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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________
FORM 8-K/A
CURRENT REPORT
Pursuant to Section l3 or l5(d) of the
Securities Exchange Act of l934
Date of Report (Date of earliest event reported) JUNE 3, 1997
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VISUAL EDGE SYSTEMS INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 0-20995 13-377-8895
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(State of other juris- (Commission (I.R.S. Employer
diction of incorporation) File Number) Identification No.)
2424 NORTH FEDERAL HIGHWAY, SUITE 100, BOCA RATON, FL 33431
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(Address of principal executive offices) (Zip Code)
(561) 750-7559
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(Registrant's telephone number, including area code)
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Item 5. OTHER EVENTS
As of June 3, 1997, Visual Edge Systems Inc. (the "Company"), Greg Norman
("Norman") and Great White Shark Enterprises, Inc. executed an amendment (the
"Amendment") to the License Agreement, dated as of March 1, 1995 (the
"Agreement"), pursuant to which Norman granted to the Company a worldwide
license (the "Greg Norman License") to use his name, likeness, endorsement and
certain trademarks in connection with the production and promotion of the
Company's ONE-ON-ONE WITH GREG NORMAN personalized video golf lessons. Norman
and the Company have agreed to restructure the terms of the payments due to
Norman under the Agreement by: (i) altering the character of the payments such
that Norman will receive $1,020,000 of his royalties in shares of the Company's
Common Stock, rather than cash as was originally contemplated by the Agreement;
(ii) changing the schedule of the payments such that they will be paid to Norman
over a period of time from January 1998 through April 2000; and (iii) granting
to Norman 25,000 options to purchase shares of the Company's Common Stock at an
exercisable price of $10.00 per share.
Prior to the execution of the Amendment, the Agreement provided that the
continued use of the Greg Norman License by the Company was conditioned upon
guaranteed payments to Norman aggregating $3.3 million during the three-year
period commencing July 1, 1996, which would be applied against a royalty equal
to 8% of the Company's Net Revenues from product sales. "Net Revenues" is
defined in the Agreement as revenues less costs associated with discounts,
allowances, payments to golf clubs, driving ranges or golf professionals, sales
tax and returns, not to exceed 20% of product sales. Pursuant to the Agreement,
the Company has paid Norman $600,000 to date, and was required to make payments
aggregating $1,000,000 and $1,700,000, respectively, during each of the years
commencing July 1, 1997 and 1998, regardless of whether the Company derived any
revenues from product sales. Such annual payments were payable on a quarterly
basis.
The Amendment restructures the payments to Norman by: (i) deferring the
date that the next payment is due from July 1, 1997 until January 1, 1998; (ii)
extending the date that the last payment is due from April 1, 1999 until April
1, 2000; and (iii) providing that a portion of the payments will be in shares of
the Company's Common Stock (rather than cash payments as contemplated by the
Agreement) in accordance with the following schedule:
COMMON STOCK
PAYMENT DATE CASH PAYMENT PAYMENT (SHARES)
July 1, 1997 $ 0 0
October 1, 1997 $ 0 0
January 1, 1998 $ 140,000 6,000
April 1, 1998 $ 140,000 6,000
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July 1, 1998 $ 210,000 9,000
October 1, 1998 $ 210,000 9,000
January 1, 1999 $ 300,000 12,000
April 1, 1999 $ 300,000 12,000
July 1, 1999 $ 300,000 12,000
October 1, 1999 $ 300,000 12,000
January 1, 2000 $ 240,000 12,000
April 1, 2000 $ 240,000 12,000
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TOTAL: $2,980,000 102,000 shares
For the purposes of calculating the royalties payable to Norman, the Common
Stock issued to Norman by the Company will be valued at $10.00 per share
regardless of the actual market price of the Common Stock at the time of
payment. Any royalties earned by Norman pursuant to the Amendment that are in
excess of the fees as scheduled above are to be paid in cash.
After the initial term, which ends on June 30, 2000, the Company has the
option to renew the Agreement for two additional five-year periods (each
five-year period, a "Renewal Term"). The guaranteed fee to Norman in the first
year of the first Renewal Term will be $1,300,000, increasing by $100,000 each
successive year thereafter; all such fees will be payable in cash, in equal
quarterly installments.
The Company has agreed to register all Common Stock issued to Norman
pursuant to the Amendment under the Securities Act of 1933, as amended.
The 25,000 options to purchase shares of the Company's Common Stock, at an
exercise price of $10.00 per share, vest immediately and are exercisable at
Norman's discretion at any time prior to their expiration on June 30, 2000.
(c) Exhibits
99.1 Amendment to License Agreement, dated as of June 3, 1997, by and among
Greg Norman, Great White Shark Enterprises, Inc. and Visual Edge
Systems Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of l934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
VISUAL EDGE SYSTEMS INC. (Registrant)
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By: /s/ EARL T. TAKEFMAN
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Earl T. Takefman
Chief Executive Officer
Date: June 27, 1997
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EXHIBIT INDEX
NO.
99.1 Amendment to License Agreement, dated as of June 3, 1997, by and
among Greg Norman, Great White Shark Enterprises, Inc. and Visual
Edge Systems Inc.
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Amendments to March 1, 1995 Agreement Between
Greg Norman and Great White Shark Enterprises, Inc.
and
Visual Edge Systems Inc.
Amendment dated June 3, 1997 to Agreement dated March 1, 1995 between Greg
Norman and Great White Shark Enterprises, Inc. ("Norman") and Visual Edge
Systems Inc. ("Licensee").
Norman and Licensee hereby agree as follows:
1. Paragraph 2.2 - The existing first sentence is deleted and replaced by:
"The first term shall be July 1, 1996 to June 30, 2000 (the "First Term")."
The remaining portion of this paragraph shall not be amended.
2. Paragraph 5.1 - This entire paragraph is deleted and replaced by the
following:
"Licensee hereby agrees to pay Norman, without deduction or set off, a
Guaranteed Fee of $4,000,000 for the First Term, due and payable in
quarterly installments, on the first day of each Contract Quarter of the
First Term, in cash and Common Stock of Licensee (as calculated in
Paragraph 5.3), based on the following schedule:
Common Stock
Payment Date Cash Payment Payment (shares)
Paid to date $ 600,000 0
July 1, 1997 $ 0 0
October 1, 1997 $ 0 0
January 1, 1998 $ 140,000 6,000
April 1, 1998 $ 140,000 6,000
July 1, 1998 $ 210,000 9,000
October 1, 1998 $ 210,000 9,000
January 1, 1999 $ 300,000 12,000
April 1, 1999 $ 300,000 12,000
July 1, 1999 $ 300,000 12,000
October 1, 1999 $ 300,000 12,000
January 1, 2000 $ 240,000 12,000
April 1, 2000 $ 240,000 12,000
$2,980,000 102,000 shares
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Thereafter the Guaranteed Fee in the first year of a Renewal Term, payable
entirely in cash, shall be $1,300,000 and shall increase in each subsequent
Contract Year by $100,000 in equal quarterly installments, on the first day
of each Contract Quarter of the Term. The foregoing, collectively, are
referred to as the "Guaranteed Fees".
3. Paragraph 5.3 - This entire paragraph is deleted and replaced by the
following:
"The Guaranteed Fees paid pursuant to Paragraph 5.1 hereof shall be
credited against the Royalties payable pursuant to Paragraph 5.2 hereof and
the Royalties paid pursuant to Paragraph 5.2 hereof shall be credited
against the balance of the Guaranteed Fees payable pursuant to Paragraph
5.1 hereof. For the purposes of calculating the royalties payable the
Common Stock paid by the Licensee shall have a value of $10.00 per share
regardless of the actual market price of the Common Stock at the time of
payment. For example, on October 1, 1998, the Licensee shall be credited
with the payment of $300,000 represented by $210,000 in cash and $90,000 in
Common Stock of the Licensee."
4.. Paragraph 5.10 - This entire paragraph is deleted and replaced by the
following:
"Any Royalties earned by Norman pursuant to this Agreement that are in
excess of the Guaranteed Fees shall be paid 100% in cash."
5. Add a new Paragraph 5.11 which shall read:
"All stock issued by Licensee to Norman in accordance with Paragraph 5.1
shall be registered."
6. Add a new Paragraph 5.12 which shall read:
"Within seven (7) days of signing this amendment to the Agreement, the
Licensee shall deliver to Norman evidence of Licensee's grant to Norman of
25,000 options to purchase shares of Common Stock of Licensee at an
exercise price of $10.00 per share, at Norman's sole discretion, at any
time prior to the expiration of the First Term."
7. The following Paragraphs are also fully deleted:
Paragraph 2.1
8. Paragraph 11.1 - Licensee's address is changed to:
2424 North Federal Highway
Suite 100
Boca Raton, FL 33431
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Attention: Mr. E. Takefman, Chief Executive Officer
Norman and Licensee also agree that the terms of this Amendment shall remain
strictly confidential and as such no public press releases of these amendments
will be made by Licensee other than the required notifications and filings
incumbent upon the Licensee as a public company or in answering questions that
may arise from any public documentation available.
Except as expressly modified hereby, the Agreement as originally executed shall
remain in full force and effect.
Agreed and accepted this 3rd day
of June 1997.
/s/ Greg Norman /s/ Greg Norman
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Greg Norman Great White Shark Enterprises, Inc.
Visual Edge Systems Inc.
Per: /s/ Earl Takefman
