<PAGE> 1
As filed with the Securities and Exchange Commission on May 15, 1997
Registration No. 33-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
FORM S-8
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
--------------------------------
SPORT SUPPLY GROUP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 75-2241783
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1901 DIPLOMAT DRIVE
FARMERS BRANCH, TEXAS 75234
(972) 484-9484
(Address, including zip code, and telephone number,
including area code, of Registrant's principal
executive offices)
--------------------------------
SPORT SUPPLY GROUP, INC.
1997 EMPLOYEE STOCK PURCHASE PLAN
(Full title of Plan)
--------------------------------
TERRENCE M. BABILLA,
GENERAL COUNSEL
SPORT SUPPLY GROUP, INC.
1901 DIPLOMAT DRIVE
FARMERS BRANCH, TEXAS 75234
(972) 484-9484
(NAME, ADDRESS, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
--------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
TITLE OF EACH CLASS AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
OF SECURITIES TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED(1) PER SHARE(2) OFFERING PRICE(2) FEE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 800,000 $6.125 $4,900,000 $1,485
$.01 par value
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Pursuant to Rule 416 under the Securities Act of 1933, as amended,
there are also being registered such additional shares of Common Stock
as may become issuable pursuant to the antidilution provisions of the
1997 Employee Stock Purchase Plan. In addition, pursuant to Rule
416(c) under the Securities Act of 1933, as amended, this registration
statement also covers an indeterminate amount of interests to be
offered or sold pursuant to the 1997 Employee Stock Purchase Plan
described herein.
(2) Estimated solely for the purpose of calculating the registration fee
on the basis of the average of the high and low prices paid for a
share of Sport Supply Group, Inc. Common Stock on May 13, 1997, as
reported on the New York Stock Exchange, all in accordance with Rule
457(h) promulgated under the Securities Act of 1933, as amended.
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEM 1. PLAN INFORMATION.
Not required to be filed with this Registration Statement.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
Not required to be filed with this Registration Statement.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
The following documents which have been heretofore filed with the
Securities and Exchange Commission (the "Commission") by Sport Supply Group,
Inc. (the "Company") are incorporated by reference in this Registration
Statement:
(a) Annual Report on Form 10-K for the fiscal year ended November 1,
1996, which contains audited financial statements of the Company (the "1996
10-K").
(b) All reports filed by the Company pursuant to Sections 13(a) or 15
(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
since the 1996 10-K, including, without limitation, the Company's most recent
Quarterly Report on Form 10-Q.
(c) The description of the Company's common stock, par value $.01 per
share, contained in the Company's Registration Statement on Form 8-A, dated
March 5, 1991, including any amendment or report filed for the purpose of
updating such description.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a
post-effective amendment to this Registration Statement which indicates that
all of the securities offered have been sold or which deregisters all of such
securities then remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and to be a part hereof from the date
of filing such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is
incorporated or deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Registration Statement.
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ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Terrence M. Babilla, General Counsel and Secretary of the Company,
rendered the legal opinion attached hereto as Exhibit 5.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law (the "DGCL")
permits indemnification of directors, officers and employees of a corporation
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement of litigation under certain conditions and subject to certain
limitations.
The Company's Amended and Restated Certificate of Incorporation and
Amended and Restated Bylaws provide that officers and directors who are made a
party to or are threatened to be made a party to or are otherwise involved in
any action, suit, or proceeding, whether civil, criminal, administrative or
investigative (hereinafter a "proceeding"), by reason of the fact that he or
she is or was an officer or director of the Company or is or was serving at the
request of the Company as a director or officer of another entity shall be
indemnified and held harmless by the Company to the fullest extent authorized
by the DGCL against all expense, liability and loss reasonably incurred or
suffered by such person in connection therewith. The right to indemnification
includes the right to be paid by the Company for expenses incurred in defending
any such proceeding in advance of its final disposition. Officers and directors
are not entitled to indemnification if such persons did not meet the applicable
standard of conduct set forth in the DGCL for officers and directors.
The Company has also entered into Indemnification Agreements with each
of its officers and directors. The Indemnification Agreements provide that the
Company shall indemnify such persons to the fullest extent permitted by the
DGCL or any other applicable law, the Company's Amended and Restated
Certificate of Incorporation and the Company's Amended and Restated Bylaws.
The effect of the foregoing will be to eliminate the right of the
Company and its stockholders (through stockholders' derivative suits on behalf
of the Company) to recover monetary damages against a director or officer for
breach of a fiduciary duty as a director or officer (including breaches
resulting from grossly negligent behavior), except where such persons fail to
meet the applicable standard of conduct set forth in the DGCL for directors and
officers.
Insofar as indemnification by the Company for liabilities arising
under the Securities Act of 1933, as amended (the "Securities Act"), may be
permitted to directors, officers or persons controlling the Company pursuant to
the foregoing provisions, the Company has been informed that in the opinion of
the Commission such indemnification is against public policy as expressed in
the Securities Act and is therefore unenforceable.
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<PAGE> 4
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
Exhibit Number Exhibit
4.1 Sport Supply Group, Inc. 1997 Employee Stock
Purchase Plan
5.1 Opinion of Terrence M. Babilla
23.1 Consent of Terrence M. Babilla
(Contained in Exhibit 5.1)
23.2 Consent of Independent Public Accountants
24.1 Power of Attorney (see Page II-5 hereof)
ITEM 9. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
Registration Statement;
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement;
provided however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
by the registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability
under Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement to
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<PAGE> 5
the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
(b) Insofar as indemnification by the registrant for liabilities
arising under the Securities Act may be permitted to directors, officers and
controlling persons of the registrant pursuant to the provisions described in
Item 6, or otherwise, the registrant has been advised that in the opinion of
the Commission such indemnification is against public policy as expressed in
the Securities Act and is, therefore, unenforceable. In the event that a claim
for indemnification by the registrant against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
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<PAGE> 6
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of
1933, the registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of Farmers Branch, State of Texas, on May
14, 1997.
SPORT SUPPLY GROUP, INC.
By: /s/ Peter S. Blumenfeld
--------------------------
Peter S. Blumenfeld,
Peter S. Blumenfeld
President and
Chief Operating Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints Peter S. Blumenfeld and John P. Walker, his true and lawful
attorney-in-fact and agent with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign
any and all amendments (including post-effective amendments) to this
Registration Statement, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorney-in-fact
and agent or his substitute or substitutes may lawfully do or cause to be done
by virtue hereof.
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The Registrant. Pursuant to the requirements of the Securities Act of
1933, this Registration Statement has been signed by the following persons in
the capacities indicated, on May 14, 1997.
Signature Title
/s/ Geoffrey P. Jurick Chairman of the Board and
- ------------------------------------- Chief ExecutiveOfficer (Principal
Geoffrey P. Jurick Executive Officer)
/s/ Peter S. Blumenfeld Director
- -------------------------------------
Peter S. Blumenfeld
/s/ John P. Walker Executive Vice-President, Chief
- ------------------------------------- Financial Officer and Director
John P. Walker (Principal Financial Officer
and Principal Accounting Officer)
/s/ Eugene I. Davis Director
- -------------------------------------
Eugene I. Davis
/s/ Johnson C. S. Ko Director
- -------------------------------------
Johnson C. S. Ko
/s/ Peter G. Bunger Director
- -------------------------------------
Peter G. Bunger
/s/ Dr. Thomas P. Treichler Director
- -------------------------------------
Dr. Thomas P. Treichler
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The Plan. Pursuant to the requirements of the Securities Act of 1933,
the persons who administer the 1997 Employee Stock Purchase Plan have duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Farmers Branch, State of
Texas, on May 14, 1997.
SPORT SUPPLY GROUP, INC.
1997 EMPLOYEE STOCK PURCHASE PLAN
Signature Title
/s/ Peter G. Bunger Chairman of Compensation
- ----------------------------------- Committee
Peter G. Bunger
/s/ Johnson C. S. Ko Member of Compensation
- ----------------------------------- Committee
Johnson C. S. Ko
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INDEX TO EXHIBITS
Exhibit Number Exhibit
4.1 Sport Supply Group, Inc. 1997 Employee Stock
Purchase Plan
5.1 Opinion of Terrence M. Babilla
23.1 Consent of Terrence M. Babilla
(Contained in Exhibit 5.1)
23.2 Consent of Independent Public Accountants
24.1 Power of Attorney (see Page II-5 hereof)
<PAGE> 1
EXHIBIT 4.1
SPORT SUPPLY GROUP, INC.
1997 EMPLOYEE STOCK PURCHASE PLAN
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TABLE OF CONTENTS
<TABLE>
<S> <C>
I. INTRODUCTION............................................................1
II. DEFINITIONS.............................................................1
III. PARTICIPATION...........................................................3
IV. OPTIONS TO PURCHASE; MAXIMUM SHARES AVAILABLE...........................5
V. PURCHASE OF STOCK PURSUANT TO OPTIONS...................................5
VI. ADMINISTRATION OF PLAN..................................................8
VII. ADJUSTMENT UPON CHANGES IN COMMON STOCK.................................8
VIII. AMENDMENT; TERMINATION OF PLAN..........................................9
IX MISCELLANEOUS...........................................................10
</TABLE>
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SPORT SUPPLY GROUP, INC.
1997 EMPLOYEE STOCK PURCHASE PLAN
I. INTRODUCTION
The purpose of the 1997 Employee Stock Purchase Plan is to make
available to eligible employees of Sport Supply Group, Inc. ("Sport Supply
Group" or the "Company"), and certain related companies a means of purchasing
shares of Sport Supply Group Common Stock through voluntary, regular payroll
deductions. The Plan is not subject to the provisions of the Employee
Retirement Income Security Act of 1974, but is intended to qualify as an
"Employee Stock Purchase Plan" under Section 423 of the Internal Revenue Code
of 1986, as amended (the "Code"). The Plan shall be administered, interpreted
and construed in accordance with Section 423 of the Code.
Participation in the Plan is entirely voluntary, and the Company makes
no recommendations to employees as to whether they should or should not
participate.
II. DEFINITIONS
2.1. DEFINITIONS. The following words and phrases shall have the following
meanings:
"Administrator" means the entity or person designated to act as
Administrator of the Plan pursuant to Section 6.1.
"Base Compensation" means gross compensation for the relevant pay
period, including overtime pay, but excluding all bonuses, severance pay, any
extraordinary pay, expense allowances/reimbursements, moving expenses and
income from restricted stock or stock option awards. For these purposes, gross
compensation includes any amount that would be included in taxable income but
for the fact that it was contributed to a qualified plan pursuant to an
elective deferral under Section 401(k) of the Code or contributed under a
salary reduction agreement pursuant to Section 125 of the Code.
"Board" means the Board of Directors of Sport Supply Group.
"Broker" means a duly licensed securities dealer, broker or agent
designated to act as Broker of the Plan pursuant to Section 6.2.
"Committee" means the Compensation Committee of the Board, which, to
the extent required by Rule 16b-3, shall consist entirely of non-employee
directors (as defined in Rule 16b-3).
"Company" means Sport Supply Group, Inc.
"Common Stock" means Sport Supply Group's Common Stock, par value $.01
per share.
"Eligible Employee" means any employee of any Sport Supply Group
Company, excluding any employee (a) who has been employed by a Sport Supply
Group Company for less than twelve months, (b) whose customary employment with
the employee's Employer is 20 hours or less per week, (c) whose customary
employment with the employee's Employer is not for more than five months in any
calendar year, or (d) who immediately after the grant of an option under this
Plan to the employee would (in accordance with the provisions of Sections 423
and 424(d) of the Code) own stock possessing 5% or more of the total combined
voting power or value of all classes of stock of the "employer corporation" or
of its "parent corporations" or "subsidiary corporations," as defined in
Section 424 of the Code.
"Employer" means, with respect to any Participant, the Sport Supply
Group Company of which the Participant is an Eligible Employee.
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"Fair Market Value" means, with respect to a share of Common Stock,
the last sales price (or average of the quoted closing bid and asked prices if
there is no closing sales price reported) of a share of Common Stock as
reported by the NASDAQ (or by the principal national stock exchange on which
the Common Stock is then listed) on the date of valuation, if such date is a
business day, or the immediately preceding business day, if such date is not a
business day.
"Initial Option Period" means the Option Period commencing on the Plan
Start Date and ending on June 30, 1997.
"1933 Act" means the Securities Act of 1933, as amended.
"Option" means an option granted pursuant to this Plan at the
beginning of each Option Period to acquire Common Stock.
"Option Exercise Date" means the last day of each Option Period.
"Option Period" means each three-month period beginning on the first
day of each calendar quarter and ending on the last day of each calendar
quarter.
"Payroll Deduction Account" means, with respect to each Participant,
the amounts credited to the Participant's account from the payroll deductions
made by the Participant under this Plan, less any amounts withdrawn from such
account (for payment of Common Stock, payment to the Participant, payment of
withholding and other taxes or amounts or payment of other obligations or
amounts).
"Participant" has the meaning set forth in Section 3.2.
"Plan" means the Sport Supply Group, Inc., 1997 Employee Stock
Purchase Plan as the same may be amended from time to time.
"Plan Start Date" means April 1, 1997.
"Related Corporation" means any present or future corporation which
(i) would be a "subsidiary corporation" or "parent corporation" of Sport Supply
Group, Inc. as such terms are defined in Section 424 of the Code, and (ii) is
designated as a participating employer in this Plan by the Board.
"Rule 16b-3" means Rule 16b-3 under the 1933 Act.
"Sport Supply Group Company" means Sport Supply Group, Inc. or a
Related Corporation.
"Stock Account" means, with respect to each Participant, the number of
whole shares of Common Stock credited under this Plan to the Participant's
account. Dividends with respect to shares of Common Stock credited to a
Participant's Stock Account shall be paid to the Participant and shall not be
held in either the Participant's Stock Account or Payroll Deduction Account.
III. PARTICIPATION
3.1. ELIGIBLE EMPLOYEES. Subject to Article VIII, all Eligible
Employees as of the beginning of each Option Period may participate in the Plan
for such Option Period at their election.
3.2. PARTICIPATION PROCEDURES. If an Eligible Employee does not
otherwise have an election to become a Participant in effect, each Eligible
Employee choosing to participate in the Plan (herein called a "Participant")
during an Option Period shall enroll as a Participant in the Plan by filing
with the Participant's Employer a completed enrollment form (authorized by the
Administrator) no later than (a) 15 days prior to the beginning of any Option
Period other than the Initial Option Period, and (b) 3 business days prior to
the Initial Option Period.
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3.3. EMPLOYEE CONTRIBUTIONS. Subject to other limitations provided in
this Plan, a Participant may contribute under the Plan a minimum of one percent
(1%) and a maximum of fifteen percent (15%) of the Participant's Base
Compensation. However, the maximum number of shares of Common Stock that an
Eligible Employee can acquire during any single Option Period is the number of
shares that, when multiplied by the Fair Market Value of a share of Common
Stock at the beginning of the Option Period, produces a dollar amount of $6,000
or less. Contributions may be made only through regular payroll deductions, net
of any tax or other withholdings.
An enrollment form and payroll deduction authorization will remain
effective for each Option Period until terminated in writing by a Participant
or until the Participant is no longer eligible to participate in the Plan. The
payroll deduction authorization may be reduced or terminated at any time by the
Participant's written request submitted to the Participant's Employer:
provided, however, that a Participant may not recommence or increase payroll
deductions until the beginning of the next Option Period, nor may a Participant
make more than one revision of the Participant's payroll deduction
authorization in any Option Period. Termination of deductions shall constitute
withdrawal from the Plan as set forth in Section 3.5 and cancellation of any
outstanding Options of the Participant. Reduction or termination of deductions
will become effective as soon as practicable after a Participant's written
request is received by the Participant's Employer.
3.4. PARTICIPANT RESTRICTION. Notwithstanding any provisions of this
Plan to the contrary, no Participant will be granted an option under this Plan
which would permit (a) the Participant's rights to purchase shares of stock
under all employee stock purchase plans of Sport Supply Group and "parent
corporations" and "subsidiary corporations" (within the meaning of Section 424
of the Code) to accrue at a rate which exceeds $25,000 in Fair Market Value of
such stock (determined at the time each Option is granted) for each calendar
year during which any Option granted to such Participant is outstanding at any
time, as provided in Sections 423 and 424(d) of the Code; and (b) the
Participant to acquire Common Stock as a result of the exercise of such Option
having a Fair Market Value (determined at the time the Option is granted) of
more than $6,000.
3.5. WITHDRAWAL FROM PLAN. A Participant may withdraw from the Plan
(thereby canceling all Options then in existence) at any time by giving written
notice to the Participant's Employer and to the Administrator. The
Administrator shall, as soon as practicable after receiving written notice of a
Participant's withdrawal from the Plan, cause to be delivered to the
Participant (i) a certificate issued in the name of the Participant
representing the number of full shares of Common Stock held in the
Participant's Stock Account and (ii) a check representing any funds held to the
credit of the Participant's Payroll Deduction Account. A Participant who has
withdrawn from the Plan may thereafter reenter the Plan by following the
procedure described under Section 3.2, but not sooner than the beginning of the
next Option Period after the Participant has withdrawn from participation.
3.6. TERMINATION OF PARTICIPANT'S EMPLOYMENT. Upon termination of a
Participant's employment from the Sport Supply Group Companies for any reason,
including death or disability, the Participant's Stock Account and Payroll
Deduction Account in the Plan shall be closed, and all existing Options held by
the Participant shall be canceled. The Administrator shall, as soon as
practicable after termination of a Participant's employment, cause to be
delivered to the Participant or the Participant's estate or the Participant's
designated beneficiary as provided below, as applicable, (i) a certificate
issued in the name of the Participant representing the number of full shares of
Common Stock in the Participant's Stock Account, and (ii) a check representing
any funds held to the credit of the Participant's Payroll Deduction Account. In
the event of a Participant's death, the Participant's Common Stock and Payroll
Deduction Account shall be delivered and paid to the estate of such Participant
or to a beneficiary designated by the Participant in writing on a form approved
by the Administrator.
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IV. OPTIONS TO PURCHASE STOCK; MAXIMUM SHARES AVAILABLE
4.1. MAXIMUM SHARES. The maximum number of shares which shall be
issued under the Plan, subject to adjustment upon changes in Common Stock under
Article VII, shall be 800,000 shares.
4.2. OFFERINGS. Subject to Article XIII, the Company shall make
consecutive offerings on the beginning of each Option Period to Participants to
purchase Common Stock as long as shares authorized remain available for
issuance. Each offering as of the beginning of each Option Period shall be the
total number of shares authorized under Section 4.1, less the number of shares
issued by purchases of Common Stock under Section 5.5 in prior Option Periods.
V. PURCHASE OF STOCK PURSUANT TO OPTIONS
5.1. PAYROLL DEDUCTION ACCOUNTS. Each Sport Supply Group Company will
deduct from its Participants' paychecks such amounts as have been authorized by
the Participants and, promptly after the end of each month, remit to the
Administrator all amounts so deducted during the month, together with a report
showing each Participant and the amounts allocable to the Payroll Deduction
Account of each Participant. The Administrator shall credit each Participant's
Payroll Deduction Account with the amount of such deposits, and shall reduce
the Participant's Payroll Deduction Account by the purchase price of all Common
Stock purchased by the Participant under this Plan and by any other withdrawals
from the Participant's Payroll Deduction Account. The Plan, through its
Administrator, shall purchase for the Stock Accounts of the Participants shares
of Common Stock with funds received under the Plan.
5.2. STOCK ACCOUNTS. The Administrator will open and maintain a Stock
Account in the name of each Participant to which will be credited all shares of
Common Stock purchased for the Participant's benefit. All shares held under the
Plan will be registered in the name of the Plan, the Administrator or the
Administrator's nominee, and will remain so registered until the shares are
delivered to the Participant. The Participant shall have the right to sell all
or any part of the shares held in the Participant's Stock Account, pursuant to
procedures established by the Administrator.
5.3 GRANT OF OPTIONS AND PURCHASE. Subject to Article VIII, each
person who is a Participant on the first day of an Option Period will as of the
first day of such Option Period be granted an Option for such period. Such
Option will be for the number of whole shares (not in excess of the share
maximum as hereinafter defined) of Common Stock to be determined by dividing
(a) the balance in the Participant's Payroll Deduction Account on the Option
Exercise Date, by (b) the purchase price per share of Common Stock determined
under Section 5.4 below. For purposes of the immediately preceding sentence,
the share maximum with respect to any Option for any Option Period shall be the
quotient of (c) $6,000, divided by (d) the Fair Market Value of a share of
Common Stock at the beginning of the Option Period; provided, however, that the
quotient in this Section 5.3 shall be rounded down to a whole number. The
number of shares of Common Stock receivable by each Participant upon exercise
of an Option for an Option Period shall be reduced, on a substantially
proportionate basis, in the event that the number of shares then available
under the Plan is otherwise insufficient.
5.4 PURCHASE PRICE. The purchase price of each share of Common Stock
sold pursuant to the exercise of an Option shall be equal to the product of (a)
0.85 multiplied by (b) the lesser of (i) the Fair Market Value of the Common
Stock on the first day of the Option Period, or (ii) the Fair Market Value of
the Common Stock on the last day of the Option Period.
5.5 EXERCISE OF OPTIONS. Each person who is a Participant in the Plan
on the Option Exercise Date will be deemed to have exercised on the Option
Exercise Date the Option granted to the Participant for that Option Period.
Upon such exercise, the balance of the Participant's Payroll Deduction Account
shall be applied to the purchase of the number of whole shares of Common Stock
determined under Section 5.3, and the amount of shares of Common Stock
purchased shall be credited to the Participant's Stock Account. In the event
that the balance of the Participant's Payroll Deduction Account following an
Option Period is in excess of the total purchase price of the shares of Common
Stock so sold, the balance of the Payroll Deduction Account shall be returned
to the Participant; provided, however, that if the balance in the Payroll
Deduction Account consists solely of an amount equal to the value of a
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fractional share it will be retained in the Payroll Deduction Account and
carried over to the next Option Period. No fractional shares shall be issued
hereunder.
Notwithstanding anything herein to the contrary, Sport Supply Group's
obligation to sell and deliver shares of Common Stock under the Plan is subject
to the approval required of any governmental authority in connection with the
authorization, issuance, sale or transfer of such shares, to any requirements
of the NASDAQ or any national securities exchange applicable thereto, and to
compliance by Sport Supply Group with other applicable legal requirements in
effect from time to time, including without limitation any applicable tax
withholding requirements.
5.6. NO ASSIGNMENT OF PARTICIPANT'S INTEREST IN PLAN. A Participant
may not assign, sell, transfer, pledge, hypothecate or alienate any Options or
other interests in or rights under the Plan. Options under the Plan are
exercisable by a Participant during the Participant's lifetime only by the
Participant. All employees shall have the same rights and privileges under the
Plan.
5.7. VESTING. Each Participant will immediately acquire full ownership
of all shares of Common Stock at the time such shares are credited to the
Participant's Stock Account.
5.8. DELIVERY OF STOCK. A Participant may instruct the Administrator,
in writing, at any time to deliver to the Participant a certificate, issued in
the name of the Participant, representing any or all of the full shares of
Common Stock held in the Participant's Stock Account. As soon as practicable
after receiving such instructions, the Administrator shall cause the
certificate to be mailed to the Participant. Such instruction to the
Administrator, requesting delivery of a certificate, will not affect the
Participant's status under the Plan unless the Participant also terminates the
payroll deduction authorization.
5.9. DIVIDENDS, SPLITS AND DISTRIBUTIONS. Any stock dividends or stock
splits in respect of shares held in the Participant's Stock Account will be
credited to the Participant's account without charge. Any distributions to
holders of Common Stock or other securities or rights to subscribe for
additional shares of Common Stock will be sold and the proceeds will be handled
in the same manner as a cash dividend, unless the Participant instructs the
Administrator to the contrary.
5.10. VOTING RIGHTS. The Administrator will deliver to each
Participant as promptly as practicable, by mail or otherwise, all notices of
meetings, proxy statements and other material distributed by Sport Supply Group
to its stockholders. The full shares of Common Stock in each Participant's
Stock Account will be voted in accordance with the Participant's signed proxy
instructions duly delivered to the Administrator or pursuant to any other
method of voting available to holders of Common Stock. There will be no charge
to the Participant for the Administrator's retention or delivery of stock
certificates, or in connection with notices, proxies or other such material.
5.11. NO INTEREST TO BE PAID. No interest will be paid to or credited
to the Payroll Deduction Accounts or Stock Accounts of the Participants.
VI. ADMINISTRATION OF PLAN
6.1. THE ADMINISTRATOR AND THE COMMITTEE. To carry out the purposes of
the Plan, the Committee shall appoint an Administrator. The Administrator may
be any company or individual that the Committee deems qualified, including
Sport Supply Group. The Administrator shall be responsible for the
implementation of the Plan, including allocation of funds and stock to the
Payroll Deduction Accounts and Stock Accounts and keeping adequate and accurate
records for the Participants.
The Committee shall be entitled to adopt and apply guidelines and
procedures consistent with the purposes of the Plan. In order to effectuate the
purposes of the Plan, the Committee shall have the discretionary authority to
construe and interpret the Plan, to supply any omissions therein, to reconcile
and correct any errors or inconsistencies, to decide any questions in the
administration and application of the Plan, and to make equitable adjustments
for any mistakes or errors made in the administration of the Plan, and all such
actions or determinations made by the Committee, and the application of rules
and
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<PAGE> 8
regulations to a particular case or issue by the Committee, in good faith,
shall not be subject to review by anyone, but shall be final, binding and
conclusive on all persons ever interested hereunder.
6.2. BROKER. The Administrator may, in its discretion, with the
consent and approval of the Committee, appoint a Broker. The Broker may be any
company or individual that the Committee deems qualified; provided, however,
that the Broker shall be a licensed security dealer, broker, or agent
authorized to make purchases and sales of Common Stock.
6.3. REPORTING TO PARTICIPANTS. The Administrator will send to each
Participant a statement at the end of each calendar quarter (or such other
period as determined by the Committee in its sole discretion). Each such
statement shall contain information concerning transactions in the
Participant's Payroll Deduction Account and Stock Account during the relevant
period and reflect the balance in the Participant's Payroll Deduction Account
and Stock Account at the end of such period.
VII. ADJUSTMENT UPON CHANGES IN COMMON STOCK
7.1. CHANGES IN COMMON STOCK. If any change is made in the Common
Stock (through merger, consolidation, reorganization, recapitalization, stock
dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or otherwise), the Administrator may make appropriate adjustments in
the number of shares and price per share of Common Stock subject to the Plan or
to any Option granted under the Plan.
7.2. DISSOLUTION; MERGER; CAPITAL REORGANIZATION; ETC. In the event of
(i) a dissolution or liquidation of Sport Supply Group; (ii) a merger or
consolidation in which Sport Supply Group is not the surviving corporation, or
a reverse merger in which Sport Supply Group is the surviving corporation but
the shares of Common Stock by virtue of the merger are converted into other
property, whether in the form of securities, cash or otherwise; or (iii) any
other capital reorganization in which more than 50 percent of the shares of
Common Stock entitled to vote are exchanged, the Plan shall terminate, unless
another corporation assumes the responsibility of continuing the operation of
the Plan or the Committee determines in its discretion that the Plan shall
nevertheless continue in full force and effect. If the Committee elects to
terminate the Plan, the Administrator shall send to each Participant a stock
certificate representing the number of whole shares to which the Participant is
entitled. In addition, the Administrator shall send checks drawn on the Plan's
account to each Participant in an amount equal to the funds held to the credit
of such Participant's Payroll Deduction Account.
7.3. COMPANY'S RIGHT TO RESTRUCTURE, ETC. The grant of any right to a
Participant pursuant to the Plan shall not affect in any way the right or power
of Sport Supply Group to make adjustments, reclassifications, reorganizations
or changes of its capital or business structure or to merge or to consolidate
or to dissolve, liquidate or sell, or transfer all or any part of its business
or assets.
VIII. AMENDMENT; TERMINATION OF PLAN
8.1. AMENDMENT AND TERMINATION. Sport Supply Group, acting through the
Committee, reserves the right to amend or terminate the Plan at any time or
times; provided, however, any amendment that would require the consent of
stockholders under applicable law, rule or regulation (including, without
limitation, the Code, the Exchange Act or any self regulatory organization such
as a national securities exchange), will not be made unless such stockholders'
consent is obtained.
In addition, the Plan shall terminate automatically on March 31, 2007,
or on any Option Exercise Date when Participants become entitled to purchase a
number of shares greater than the number of reserved shares remaining available
for purchase, subject to the allocation of remaining shares pursuant to the
last sentence of Section 5.3. Upon termination of the Plan, all amounts held in
the Payroll Deduction Accounts shall, to the extent not used to purchase shares
of Common Stock, be refunded to the Participants entitled thereto.
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IX. MISCELLANEOUS
9.1. EXPENSES OF PLAN. The Broker's brokerage commissions, if any,
incurred in connection with transactions in Common Stock under the Plan, and
the Administrator's administrative charges for maintaining Participants'
accounts relating to purchases of securities and all other expenses of
administering or maintaining the Plan will be paid by the Company. If the
Company is acting as Administrator, no expenses will be charged to the
Participants.
9.2. INDEMNIFICATION. In the event and to the extent not insured
against under any contract of insurance with an insurance company, Sport Supply
Group shall indemnify and hold harmless each "Indemnified Person," as defined
below, against any and all claims, demands, suits, proceedings, losses,
damages, interest, penalties, expenses (specifically including, but not limited
to, counsel fees to the extent approved by the Board or otherwise provided by
law, court costs and other reasonable expenses of litigation), and liability of
every kind, including amounts paid in settlement, with the approval of the
Board, arising from any action or cause of action related to the Indemnified
Person's act or acts or failure to act. Such indemnity shall apply regardless
of whether such claims, demands, suits, proceedings, losses, damages, interest,
penalties, expenses and liability arise in whole or in part from (a) the
negligence or other fault of the Indemnified Person, or (b) from the imposition
on such Indemnified Person of any civil penalties or excise taxes pursuant to
the Code or any other applicable laws; except when the same is judicially
determined to be due to gross negligence, fraud, recklessness, or willful or
intentional misconduct of such Indemnified Person. "Indemnified Person" shall
mean each member of the Board, the Administrator, each member of the Committee
and each other employee of any Sport Supply Group Company who is allocated
fiduciary responsibility hereunder.
9.3. NO CONTRACT OF EMPLOYMENT INTENDED. The granting of any rights to
an Eligible Employee under this Plan shall not constitute an agreement or
understanding, express or implied, on the part of any Sport Supply Group
Company, to employ such Eligible Employee for any specified period.
9.4. GOVERNING LAW. The construction, validity and operation of this
Plan shall be governed by the laws of the State of Delaware.
9.5. SEVERABILITY OF PROVISIONS. If any provision of this Plan is
determined to be invalid, illegal or unenforceable, such invalidity, illegality
or unenforcability shall not affect the remaining provisions of this Plan, but
such invalid, illegal or unenforceable provisions shall be fully severable, and
the Plan shall be construed and enforced as if such provision had never been
inserted herein.
9.6. NO LIABILITY OF SPORT SUPPLY GROUP. Neither Sport Supply Group,
its directors, officers or employees of the Committee, nor any Related
Corporation which is in existence or hereafter comes into existence, shall be
liable to any Participant or other person if it is determined for any reason by
the Internal Revenue Service or any court having jurisdiction that the Plan
does not qualify under Section 423 of the Code.
IN WITNESS WHEREOF, the Company has caused this Plan to be adopted
effective as of the Plan Start Date.
SPORT SUPPLY GROUP, INC.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
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<PAGE> 1
EXHIBITS 5.1 AND 23.1
Opinion of Terrence M. Babilla
Consent of Terrence M. Babilla
<PAGE> 2
May 14, 1997
Sport Supply Group, Inc.
1901 Diplomat Drive
Farmers Branch, Texas 75234
Re: Registration Statement on Form S-8 for the 1997 Employee Stock
Purchase Plan
Ladies and Gentlemen:
I have acted as General Counsel to Sport Supply Group, Inc., a
Delaware corporation (the "Company") in connection with the registration under
the Securities Act of 1933, as amended (the "Securities Act") of the proposed
issuance of 800,000 shares (the "Shares") of the Company's common stock, $.01
par value per share, issuable pursuant to the Sport Supply Group, Inc. 1997
Employee Stock Purchase Plan (the "Plan"). The Shares are being registered
pursuant to a registration statement on Form S-8 to be filed with the
Securities and Exchange Commission on or about May 15, 1997 (the "Registration
Statement").
This opinion is delivered in accordance with the requirements of
Item 601 (b)(5) of Regulation S-K under the Securities Act. In connection with
this opinion, I have examined such documents and records of the Company and
such statutes, regulations and other instruments and certificates as I have
deemed necessary or advisable for the purposes of this opinion. I have assumed
that all signatures on all documents presented to me are genuine, that all
documents submitted to me as originals are accurate and complete and that all
documents submitted to me as copies are true and correct copies of the
originals thereof. I have also relied upon such other certifications of public
officials, corporate agents and officers of the Company and such other
certifications with respect to the accuracy of material factual matters
contained therein which were not independently established.
Based on the foregoing, I am of the opinion that the Shares will be,
if and when issued and paid for in accordance with the Plan, validly issued,
fully paid and nonassessable, assuming the Company maintains an adequate number
of authorized but unissued shares of common stock available for such issuance,
and further assuming that the consideration actually received by the Company
for the Shares exceeds the par value thereof.
I consent to the use of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
/s/ Terrence M. Babilla
Terrence M. Babilla
General Counsel
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our report dated
January 29, 1997, included in Sport Supply Group, Inc.'s Form 10-K for the year
ended November 1, 1996, and to all references to our Firm included in this
registration statement.
Dallas, Texas /s/ Arthur Andersen LLP
May 12, 1997
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