SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)
SPORT SUPPLY GROUP, INC.
(Name of Issuer)
Common Stock, $.01 par value
(Title and Class of Securities)
848915104
(CUSIP Number)
Eugene I. Davis
Emerson Radio Corp.
Nine Entin Road
Parsippany, New Jersey 07054
(201) 884-5800
with a copy to:
Jeffrey M. Davis, Esq.
Wolff & Samson, P.A.
5 Becker Farm Road
Roseland, New Jersey 07068
(201) 533-6561
(Name, Address, and Telephone Number of Person
Authorized to Receive Notices and Communications)
October 11, 1996
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this Schedule 13D,
and is filing this schedule because of Rule 13d-1(b)(4), (5), or (6), check
the following box ___.
Check the following box if a fee is being paid with this
statement ___. (A fee is not required only if the reporting person: (1)
has a previous statement on file reporting beneficial ownership of more
than five percent of the class of securities described in Item 1; and (2)
has filed no amendment subsequent thereto reporting beneficial ownership of
five percent or less of such class.) (See Rule 13d-7.)
Note: Schedules filed in paper format shall include a signed
original and five copies of the schedule, including all exhibits. See Rule
13d-7(b) for other parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a
reporting person*s initial filing on this form with respect to the subject
class of securities, and for any subsequent amendment containing
information which would alter disclosure provided in a prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18 of the
Securities Exchange Act of 1934 ("Act") or otherwise subject to the
liabilities of that section of the act but shall be subject to all other
provisions of the Act (however, see the Notes).
CUSIP No. 848915104
Page 1 of 8 pages
Exhibit Index on page 5
<PAGE>
Item 2. Identity and Background.
Item 2 of Emerson*s Schedule 13D is hereby amended by deleting
the paragraph contained therein relating to Stuart D. Slugh, who is no
longer an officer of Emerson Radio Corp. ("Emerson").
Item 4. Purpose of Transaction.
Item 4 of Emerson*s Schedule 13D is hereby amended by deleting
such Item in its entirety and substituting the following therefor:
On October 11, 1996, Emerson delivered a written proposal to the
Board of Directors of Sport Supply Group, Inc. ("SSG"), in which Emerson
seeks to acquire a controlling interest in SSG. Under the terms of the
proposal, Emerson would purchase from SSG an additional 1,333,333 shares of
the common stock, $.01 par value per share (the "Common Stock") of SSG at a
purchase price of $6.00 per share (for aggregate consideration of
approximately $8 million) and would purchase, for an aggregate
consideration of $800, 5-year warrants to acquire an additional 1,333,333
shares at an exercise price of $6.50 per share, subject to adjustment. If
the proposal is accepted, upon acquisition of such shares, but prior to the
exercise of any of such warrants, Emerson would own approximately 25% of
the outstanding shares of the Common Stock, and assuming exercise of all
such warrants, would beneficially own approximately 35% of the Common
Stock. Emerson is also to be granted registration rights on the resale of
the shares of Common Stock it will own, as well as on the exercise and
resale of the shares it can acquire under the warrants. In addition,
Emerson would arrange for foreign trade credit financing of $2 million for
the benefit of SSG to supplement existing credit facilities.
As part of its proposal, SSG would cause a majority of the
members of its Board of Directors to consist of Emerson*s designees.
Emerson*s proposal contemplates that SSG*s current Chairman and Chief
Executive Officer would resign and be retained by SSG as a consultant, on
terms to be negotiated. Emerson would cause SSG to comply with its current
contractual obligations to such officer upon the change in control. All
other members of senior management would be retained.
The proposal is subject to various conditions (including
resolution of SSG*s current defaults with its primary lender or replacement
of such lender by Emerson) and the negotiation and execution of definitive
documentation. Emerson is seeking an expeditious closing of these
transactions, by no later than November 15, 1996. It has not yet received
a response from SSG, which has indicated that it is examining Emerson*s
proposal.
Emerson and Emerson Radio (Hong Kong) Limited ("Emerson HK")
intend to continue to review from time to time their position with respect
to the shares of Common Stock, and may, depending on SSG*s response to its
proposal, the circumstances then existing, including their evaluation of
SSG*s business, assets, operations, the industry in general, economic
conditions, prevailing market prices for the Common Stock, investment
opportunities of Emerson and Emerson HK, and other factors, determine to
increase, decrease, or dispose of the ownership of the Common Stock, or
revise or retract Emerson*s current proposal.
Except for the proposal described above, as of the date hereof,
neither Emerson nor Emerson HK has any plan or proposal relating to:
(a) The acquisition by any person of additional securities of
SSG, or the disposition of securities of SSG;
(b) An extraordinary corporate transaction, such as a merger,
reorganization, or liquidation, involving SSG or any of its subsidiaries;
(c) A sale or transfer of a material amount of assets of SSG or
any of its subsidiaries;
(d) A change in the present board of directors or management of
SSG, including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the board;
(e) A material change in the present capitalization or dividend
policy of SSG;
(f) One or more other material changes in SSG*s business or
corporate structure;
(g) Changes in SSG*s charter, bylaws, or instruments
corresponding thereto or other actions which may impede the acquisition of
control of SSG by any person;
(h) Causing a class of securities of SSG to be delisted from a
national securities exchange or to cease to be authorized to be quoted in
an inter-dealer quotation system of a registered national securities
association;
(i) A class of equity securities of SSG becoming eligible for
termination of registration pursuant to section 12(g)(4) of the Act; or
(j) Any action similar to any of those enumerated above.
Item 7. Material to be Filed as Exhibits.
Item 7 of Emerson*s Schedule 13D is amended by deleting such Item
in its entirety and substituting the following therefor:
The following exhibit is being filed herewith:
(1) Proposal letter dated October 11, 1996, from Emerson to the Board of
Directors of SSG.
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete, and correct.
EMERSON RADIO (HONG KONG)
LIMITED
By: /s/ Eugene I. Davis
Name: Eugene I. Davis
Title: Director
EMERSON RADIO CORP.
By: /s/ Eugene I. Davis
Name: Eugene I. Davis
Title: President
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Exhibit Name Page No. in Sequential
Numbering System
<S> <C> <C>
(1) Proposal Letter dated October 11, 1996, from 6
Emerson Radio Corp. to the Board of Directors
of Sport Supply Group, Inc.
</TABLE>
<PAGE>
EXHIBIT 1
October 11, 1996
VIA TELECOPY
Sports Supply Group, Inc.
1901 Diplomat Drive
Dallas, Texas 75234
Attn.: Board of Directors
Re: Emerson Radio Corp. Acquisition Proposal
Gentlemen:
Emerson Radio Corp. ("Emerson") has engaged in a due diligence review
and analysis of Sport Supply Group, Inc. ("SSG") over the past few weeks,
with a view towards determining Emerson*s interests with regard to its
future relationship with, and its current investment in, SSG. Emerson
appreciates the cooperation and assistance of SSG in its review of SSG to
date, enabling Emerson to conduct its review in an expeditious and non-
intrusive manner. The following proposal is based on the review of the
documents made available to Emerson by SSG and meetings with SSG personnel
to date. Subject to the foregoing, Emerson*s proposal is being made on the
following terms and subject to the following conditions:
a) Emerson, or a direct or indirect subsidiary of Emerson (the
"Purchaser"), will purchase directly from SSG 1,333,333 shares of
newly-issued common stock (the "Stock") of SSG at a purchase
price of $6.00 per share, for an aggregate consideration of
approximately $8 million.
b) The Purchaser will purchase from SSG, for $800, warrants (the
"Warrants") to purchase an aggregate of 1,333,333 shares of Stock
at an exercise price of $6.50 per share, subject to customary
anti-dilution adjustments. The Warrants shall have a term of
five-years and have such other terms as shall be acceptable to
Emerson.
c) SSG will grant the Purchaser demand and "piggyback" registration
rights on the resale of the shares of Stock currently owned and
to be acquired as contemplated hereby, and to be acquired on the
exercise of the Warrants and the resale of such shares of Stock
upon such exercise. Such registration rights shall be on such
terms as shall be negotiated between Emerson and SSG.
d) The Purchaser will enter into a purchase agreement (the "Purchase
Agreement") with SSG providing for the purchase of the Stock and
the Warrants as described above, and on such other terms and
conditions as shall be agreed upon between Emerson and SSG, and
shall provide, without limitation, for the following:
i) Emerson will provide approximately $2 million of
available trade finance credit to SSG for the purchase of
goods sourced in the Far East through a foreign subsidiary
of Emerson, on terms and conditions acceptable to Emerson
and SSG;
ii) SSG shall cause designees of Emerson to be appointed to
its Board of Directors so as to cause such designees to
constitute a majority of SSG*s Board;
iii) Emerson will cause SSG to retain all current members of
management, except Michael Blumenfeld, in accordance with
their current employment arrangements. SSG shall not alter
the title, duties, compensation, or employment arrangements
of any of such management members without the prior written
consent of Emerson;
iv) Michael Blumenfeld will resign as an employee, officer,
and director of SSG and each of its subsidiaries. Emerson
will cause SSG to honor its contractual commitments to Mr.
Blumenfeld;
v) SSG may proceed with its attempts to sell its golf
business as previously disclosed to Emerson; PROVIDED,
HOWEVER, that SSG shall obtain the prior written consent of
Emerson if such sale would be at a price less than the book
value of such business as reflected in SSG*s financial
statements contained in its most recently filed Form 10-Q;
vi) a termination fee shall be payable to Emerson by SSG
equal to $1 million if a transaction with Emerson is not
consummated for any reason except for the willful failure to
close by Emerson;
vii) Emerson shall be entitled to conduct site assessments
and reviews and environmental and other due diligence as
shall be deemed necessary or desirable by Emerson;
viii) mutually satisfactory definitive documentation shall
have been negotiated, prepared, executed, and exchanged.
e) Emerson will cause SSG to enter into a consulting or similar
agreement with Michael Blumenfeld, which will be negotiated
concurrently with the Purchase Agreement. Such consulting or
similar arrangement will be on terms acceptable to Emerson and
Mr. Blumenfeld, and will contain, without limitation, Mr.
Blumenfeld*s agreement not to compete with SSG, and will be on
such terms and conditions as shall be acceptable to Emerson, SSG,
and Mr. Blumenfeld.
f) The current defaults by SSG with its primary lender and the
amounts of future credit availability shall be resolved to
Emerson*s satisfaction, either by agreement with SSG*s current
primary lender or by arrangements with a substitute primary
lender, all of which shall be acceptable to Emerson.
g) SSG shall consult with Emerson on SSG*s accounting practices and
shall provide for such adjustments(to be effective for the fiscal
year ended October 1996), reports, and practices as shall
reasonably be requested by Emerson.
The foregoing represents Emerson*s proposal with respect to its
contemplated acquisition of securities of SSG. A draft of the Purchase
Agreement should be supplied to SSG by Monday, October 14, 1996. If this
proposal is acceptable, Emerson representatives would be prepared to meet
with SSG representatives in Dallas on Tuesday and Wednesday of next week to
finalize the Purchase Agreement. The ultimate rights and obligations of
the parties shall only be as set forth in and subject to execution of such
definitive documents.
Emerson understands the importance of effectuating the acquisition as
expeditiously as possible due to the current default of SSG under its
lending arrangements. Thus, Emerson and SSG shall each use their
respective best efforts to close the transactions contemplated hereby on or
about November 1, 1996, but in any event by the close of business on
November 15, 1996.
Emerson also anticipates that SSG will permit additional access to its
senior and middle management personnel, and reasonable access to other
personnel of SSG and its subsidiaries and affiliates. Further, Emerson
shall be permitted to inspect and monitor the books and records of SSG and
its subsidiaries until the closing date of the Purchase Agreement.
Any release to the public of information with respect to the matters
set forth herein or contemplated hereby or the definitive documents will be
made as necessary or desirable in a form and manner based on the mutual
cooperation of Emerson and SSG; PROVIDED, that nothing contained herein
shall restrict any party from releasing information which, upon advice of
counsel, may be required by applicable laws regulations. An amendment to
Emerson*s Schedule 13D will immediately be required due to the delivery of
this proposal.
Emerson looks forward to proceeding immediately with all necessary
steps to expeditiously consummate these transactions.
Very truly yours,
/s/ Eugene I. Davis
Eugene I. Davis
President
