SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)
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)
November 5, 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 6
<PAGE>
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 (the
"Original Proposal") to the Board of Directors of Sport Supply Group, Inc.
("SSG"), in which Emerson sought to acquire a controlling interest in SSG.
Under the terms of the Original Proposal, Emerson sought to 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 sought to
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. Had the Original Proposal been accepted,
upon acquisition of such shares, but prior to the exercise of any of such
warrants, Emerson would have owned approximately 25% of the outstanding
shares of the Common Stock, and assuming exercise of all such warrants,
would have beneficially owned approximately 35% of the Common Stock.
Emerson was also to be granted registration rights on the resale of the
shares of Common Stock it would have owned, as well as on the exercise and
resale of the shares it could have acquired under the warrants. In
addition, Emerson would have arranged for foreign trade credit financing of
$2 million for the benefit of SSG to supplement existing credit facilities.
As part of its Original Proposal, SSG would have caused a
majority of the members of its Board of Directors to consist of Emerson*s
designees. Emerson*s Original Proposal contemplated that SSG*s current
Chairman and Chief Executive Officer would have resigned and been retained
by SSG as a consultant, on terms to have been negotiated. Emerson would
have caused SSG to comply with its current contractual obligations to such
officer upon the change in control. All other members of senior management
would have been retained.
The Original Proposal was 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. Under the Original Proposal, Emerson was seeking
an expeditious closing of these transactions, by no later than November 15,
1996.
On November 5, 1996, Emerson delivered a revised proposal (the
"Revised Proposal") to SSG under which Emerson would purchase from SSG
1,714,286 shares of Common Stock at a purchase price of $7.00 per share
(for aggregate consideration of approximately $12 million). In addition,
under the Revised Proposal, Emerson would purchase, for an aggregate
consideration of $600, 5-year warrants to acquire an additional 1,000,000
shares of Common Stock at an exercise price of $7.50 per share, subject to
adjustments. If the Revised Proposal is accepted, Emerson will own
approximately 28% of the outstanding shares of the Common Stock, prior to
the exercise of any such warrants, and assuming exercise of all such
warrants, will beneficially own approximately 35% of the Common Stock.
Under the Revised Proposal, Emerson clarified its position with
respect to language in the Original Proposal which appeared to require
SSG's current Chairman and Chief Executive Officer to resign as an
employee, officer, and/or director of SSG and each of its subsidiaries
prior to closing. The Revised Proposal clarifies Emerson's intention to
cause SSG to honor its contractual commitments to such officer, without any
requirement that such officer resign or enter into a consulting
agreement or non-competition agreement prior to closing. Emerson
intends to pursue a revised arrangement with such officer, but the
finalization of such an arrangement shall not be a precondition to closing.
Finally, the Revised Proposal contemplates that Emerson be paid a
termination fee of $750,000, rather than $1,000,000 as contemplated by the
Original Proposal, if a transaction with Emerson is not consummated for any
reason except for the willful failure to close by Emerson.
Except as set forth above, the Revised Proposal provides that the
terms of the Original Proposal remain unchanged, except as may be modified
in negotiation and set forth in definitive documentation executed by
Emerson and SSG. Emerson has been invited to discuss the Revised Proposal
with a Special Committee of the SSG Board of Directors.
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
Revised 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 Revised 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 exhibits are being filed herewith:
(1) Proposal letter dated October 11, 1996, from Emerson to the Board
of Directors of SSG.
(2) Revised proposal letter dated November 5, 1996, from Emerson to
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 Filed with Amendment No. 1
Emerson Radio Corp. to the Board of Directors to Schedule 13D
of Sport Supply Group, Inc.
(2) Revised Proposal Letter dated November 5, 7
1996, from Emerson Radio Corp. to Sport Supply
Group, Inc.
</TABLE>
<PAGE>
EXHIBIT 2
EMERSON RADIO CORP.
9 Entin Road
P.O. Box 430
Parsippany, New Jersey 07045-0430
November 5, 1996
Mr. Terry Babilla
Mr. Bob Philip
Mr. Bill Watkins
Sport Supply Group, Inc.
1901 Diplomat
Farmers Branch, Texas 75234
RE: REVISED EMERSON RADIO CORP. ("EMERSON") ACQUISITION
PROPOSAL FOR SPORT SUPPLY GROUP, INC. ("SSG")
Gentlemen:
We are in receipt of correspondence dated November 1, 1996 and
November 4, 1996 addressed to our counsel, Jeff Davis, from Terry Babilla,
advising Emerson that the SSG Board of Directors has designated a Special
Committee to enter into substantive negotiations with Emerson regarding its
Proposal of October 11, 1996 as amended and clarified hereby. Emerson
appreciates the opportunity to enter into substantive discussions with the
Special Committee and to conclude a transaction as promptly as possible.
It is our intention to follow the schedule suggested by LaSalle Business
Credit, Inc. which anticipated that a closing could occur within two
business weeks after Emerson and SSG had entered into a binding agreement.
We believe that the two-week period will allow us to complete negotiations
and documentation with LaSalle and/or Congress Financial Corporation and
will permit SSG to complete its documentation (e.g., fairness opinions) and
receive any necessary third party approvals.
Accordingly, in the interest of prompt consummation of a
recapitalization and refinancing transaction for SSG and subject to our
understanding, as set forth above, of the role and authority of the Special
Committee, Emerson hereby amends and clarifies its October 11, 1996
Proposal, as follows:
1. Emerson, or a direct or indirect subsidiary of Emerson ("the
Purchaser"), will purchase directly from SSG 1,714,286 shares of
newly issued common stock (the "Stock") of SSG at a purchase
price of $7.00 per share, for aggregate consideration of
approximately $12 million.
2. The Purchaser will purchase from SSG, for $600, warrants (the
"Warrants") to purchase an aggregate of 1,000,000 shares of Stock
at an exercise price of $7.50 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.
3. Emerson will not require Michael Blumenfeld to resign as an
employee, officer, and/or director of SSG and each of its
subsidiaries prior to closing. Emerson will cause SSG to honor
its contractual commitments to Mr. Blumenfeld. Mr. Blumenfeld
will not be required, nor shall it be a condition to the
transaction that he be required, to enter into any consulting
agreement or non-competition agreement prior to closing. The
foregoing should not be construed as an indication that Emerson's
position with respect to Mr. Blumenfeld has changed from its
initial Proposal. Rather, it is Emerson's intention to clarify
that the resolution of these matters outside the scope of pre-
existing agreements is not a precondition to closing of the
financing transaction, and is not an impediment to the prompt and
necessary recapitalization of SSG.
4. A termination fee shall be payable to Emerson by SSG equal to
$750,000 if a transaction with Emerson is not consummated for any
reason except for the willful failure to close by Emerson.
Except as modified or clarified as specifically set forth above, the
terms of the October 11, 1996 Proposal shall remain unchanged, except as
may be modified in negotiation and set forth in definitive documentation
executed by Emerson and SSG. We hope that the foregoing revisions to our
Proposal assist the Special Committee in bringing this matter to a rapid
resolution. We look forward to meeting with you in Memphis.
Very truly yours,
/s/ Eugene I. Davis
Eugene I. Davis
President
EID/sw
cc: G. Jurick
J. Walker
J. Davis
339649-1
