SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934
(Amendment No. )
Filed by Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ]Preliminary Proxy Statement
[ ]Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e) (2))
[x]Definitive Proxy Statement
[ ]Definitive Additional Materials
[ ]Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
SPORT SUPPLY GROUP INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, If Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-
11.
(1)Title of each class of securities to which transaction applies:
(2)Aggregate numer of securities to which transactions applies:
(3)Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4)Proposed maximum aggregate value of transaction:
(5) Total Fee Paid
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1)Amount Previously Paid:
(2)Form, Schedule or Registration Statement No:
(3)Date Filed:
<PAGE>
SPORT SUPPLY GROUP, INC.
1901 Diplomat Drive
Farmers Branch, Texas 75234
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JANUARY 13, 1998<PAGE>
As a stockholder of Sport Supply Group, Inc. (the "Company"), you
are hereby given notice of and invited to attend in person or by proxy
the Annual Meeting of Stockholders of the Company to be held at
Columbian Country Club, 2525 Country Club Drive, Carrollton, Texas
75006, on Tuesday, January 13, 1998 at 2:00 p.m., for the following
purposes:
1. To elect six directors for a one-year term; and
2. To transact such other business as may properly come before
the meeting and any adjournment(s) thereof.
The Board of Directors has fixed the close of business on November
25, 1997 as the record date (the "Record Date") for the determination of
stockholders entitled to notice of and to vote at such meeting and any
adjournment(s) thereof. Only stockholders of record at the close of
business on the Record Date are entitled to notice of and to vote at
such meeting. The transfer books of the Company will not be closed.
You are cordially invited to attend the meeting. However, whether
or not you expect to attend the meeting, management desires to have the
maximum representation at the meeting and respectfully requests that you
date, execute and mail promptly the enclosed proxy in the enclosed
stamped envelope for which no additional postage is required if mailed
in the United States. A proxy may be revoked by a stockholder any time
prior to its use as specified in the enclosed proxy statement.
By Order of the
Board of Directors
/s/ TERRENCE M. BABILLA,
Secretary
Dallas, Texas
December 1, 1997
YOUR VOTE IS IMPORTANT.
PLEASE EXECUTE AND RETURN PROMPTLY THE
ENCLOSED PROXY CARD IN THE ENVELOPE PROVIDED HEREIN.
<PAGE>
SPORT SUPPLY GROUP, INC.
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JANUARY 13, 1998
To Our Stockholders:
This Proxy Statement is furnished to stockholders of Sport Supply
Group, Inc. (the "Company") for use at the Annual Meeting of
Stockholders to be held at the date, time and place and for the purposes
set forth in the accompanying Notice of Annual Meeting of Stockholders,
or at any adjournment or adjournments thereof (the "Annual Meeting").
The enclosed proxy is solicited on behalf of the Board of Directors of
the Company and is subject to revocation at any time prior to the voting
of the proxy. Unless a contrary choice is indicated, all duly executed
proxies received by the Company will be voted in accordance with the
instructions set forth on the back side of the proxy card. The record
of stockholders entitled to vote at the Annual Meeting was taken at the
close of business on November 25, 1997 (the "Record Date"). The
approximate date on which this Proxy Statement and the enclosed proxy
are first being sent or given to stockholders is December 1, 1997.
VOTING PROCEDURES AND REVOCABILITY OF PROXIES
The accompanying proxy card is designed to permit each stockholder
of record at the close of business on November 25, 1997 to vote in the
election of directors. The proxy card provides space for a stockholder
to vote in favor of or to withhold voting for the nominees for the Board
of Directors. The election of directors will be decided by a plurality
vote.
The holders of a majority of the outstanding shares of common
stock, par value $.01 per share (the "Common Stock") entitled to vote at
the Annual Meeting, present in person or by proxy, will constitute a
quorum for the transaction of business at the Annual Meeting. If a
quorum is not present, the Annual Meeting may be adjourned from time to
time until a quorum is obtained. Shares as to which authority to vote
has been withheld with respect to the election of any nominee for
director will not be counted as a vote for such nominee. Broker nonvotes
are counted for purposes of determining the presence or absence of a
quorum for the transaction of business. A broker nonvote will have no
effect on the outcome of the election of directors. Stockholders are
urged to sign the accompanying form of proxy and return it promptly.
<PAGE>
When a signed card is returned with choices specified with respect
to voting matters, the shares represented are voted by the proxies
designated on the proxy card in accordance with the stockholder's
instructions. The proxies for the stockholders are Geoffrey P. Jurick,
Peter S. Blumenfeld and John P. Walker. A stockholder desiring to name
another person as his or her proxy may do so by crossing out the names
of the designated proxies and inserting the name(s) of such other
person(s) to act as his or her proxy(ies). In that case, it will be
necessary for the stockholder to sign the proxy card and deliver it to
the person named as his or her proxy and for the person so named to be
present and vote at the Annual Meeting. Proxy cards so marked should
not be mailed to the Company.
If a signed proxy card is returned and the stockholder has made no
specifications with respect to voting matters, the shares will be voted
for the election of the six nominees for director and, at the discretion
of the proxies, on any other matter that may properly come before the
Annual Meeting or any adjournment(s). Valid proxies will be voted at
the Annual Meeting and at any adjournment in the manner specified.
Any stockholder of the Company has the unconditional right to
revoke his or her proxy at any time prior to the voting thereof by any
act inconsistent with the proxy, including notifying the Secretary of
the Company in writing, executing a subsequent proxy, or personally
appearing at the Annual Meeting and casting a contrary vote. However,
no revocation shall be effective unless notice of such revocation has
been received by the Company at or prior to the Annual Meeting.
The total issued and outstanding capital stock of the Company as of
November 14, 1997 consisted of 8,085,759 shares of Common Stock. Each
share of Common Stock is entitled to one vote.
ELECTION OF DIRECTORS
Six directors are proposed to be elected at the Annual Meeting. If
elected, each director will hold office until the next annual meeting of
stockholders or until his successor shall be elected and shall qualify.
The election of directors will be decided by a plurality vote. All
nominees named below are members of the present Board of Directors of
the Company. All nominees have consented to serve if elected. If any
nominee becomes unable to serve, the shares represented by all valid
proxies will be voted for the election of such substitute as the Board
may recommend, the Board may reduce the number of directors to eliminate
the vacancy, or the Board may fill the vacancy at a later date after
selecting an appropriate nominee. Management has no reason to believe
that any of the nominees named below will be unable to serve.
Nominations for election to the Board of Directors may be made by
the Board of Directors, a nominating committee appointed by the Board of
Directors or by any stockholder entitled to vote for the election of
directors. Nominations made by stockholders must be made by written
notice, certified mail, return-receipt requested and received by the
Secretary of the Company no later than 60 days after the end of the
Company's fiscal year. If, however, less than thirty-five days'
notice of a stockholders' meeting called for the election of directors
is given to stockholders, nominations by stockholders must be so made
and received by the Secretary of the Company not later than the close of
business on the seventh day following the day on which the notice was
mailed. Such notice shall set forth as to each proposed nominee who is
not an incumbent director: (a) the name, age, business address and, if
known, residence address of each nominee proposed in such notice; (b)
the principal occupation or employment of each such nominee; (c) the
number of shares of Common Stock of the Company that are beneficially
owned by each such nominee and the nominating stockholder; and (d) any
other information concerning the nominee that must be disclosed of
nominees in proxy solicitations pursuant to Rule 14(a) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
<PAGE>
The nominees named below were nominated for election to the Board
of Directors of the Company by the current Board of Directors. The
name, age, business experience and public directorships of each nominee
for director are as follows:
<TABLE>
Year
Principal Occupation First
Name Age or Employment (1) Became
Director
<S> <C> <C> <C>
Geoffrey P. Jurick 57 Chairman of the Board 1996
and Chief Executive Officer
(2) (8)
Peter S. 49 President and Chief 1991
Blumenfeld Operating
Officer (3)
John P. Walker 34 Executive Vice President 1996
and Chief Financial Officer
(4) (8)
Peter G. Bunger 57 Consultant (5) (8) 1996
Johnson C.S. Ko 46 Chairman of Universal 1996
Appliances Limited (6)
Thomas P. Treichler 53 Chairman of the Board and 1997
Chief Executive Officer
of Orient Financial
Corporation (7)
(1) Each of the nominees has held the position listed, or a similar
position with the same or an affiliated organization, for at least
the last five years, except as otherwise provided herein.
(2) Geoffrey P. Jurick has served as a director of the Company since
December 10, 1996. Mr. Jurick has served as the Company's Chairman
of the Board since December 11, 1996 and the Company's Chief
Executive Officer since January 23, 1997. Mr. Jurick has served as
a director of Emerson Radio Corp. (``Emerson'' ), a Delaware
corporation listed on the American Stock Exchange under the symbol
``MSN'' since 1990, and as Emerson's Chief Execut ive Officer and
Chairman since July 1992 and December 1993, respectively. Mr.
Jurick served as President of Emerson from July 1993 to October
1994. Emerson beneficially owns approximately 36% of the Company's
issued and outstanding Common Stock. See ``Certain Relationships
and Related Transactions.'' Since December 1993, Mr. Jurick has
served as a director of Fidenas International Limited, L.L.C. and
its predecessor ("FIN"), and, since May 1994, as an officer and
general manager of FIN. Mr. Jurick has also served as a Director
of Fidenas Investment Limited ("FIL") and Fidenas International
Bank Limited ("FIBANK"). On January 10, 1995, the Supreme Court of
the Commonwealth of the Bahamas (the "Bahamas Court") appointed an
<PAGE>
official liquidator of FIL and ordered that FIL be wound up. On
January 27, 1995, the Bahamas Court appointed an official
liquidator for FIBANK and ordered, subject to the ongoing
supervision of the Bahamas Court, that FIBANK's assets be
liquidated. Since May, 1994, Mr. Jurick has served as a director,
Chairman, and Chief Executive Officer of GSE Multimedia
Technologies Corporation ("GSE"), which is traded in the over-the-
counter market. Since March 1996, Mr. Jurick has served as
Chairman of Elision International Ltd. ("Elision"), a provider of
computer and telecommunication services. See "Certain Relationships
and Related Transactions." For more than the past five years, Mr.
Jurick has held a variety of senior executive positions with
several of the entities comprising the Fidenas group of companies,
whose activities encompass merchant banking, investment banking,
investment management, and corporate development.
(3) Peter S. Blumenfeld serves as President and Chief Operating Officer
of the Company and has served in these or in various other
executive positions with the Company and its predecessors for more
than 15 years. Mr. Blumenfeld has been a director of the Company
since February 1991.
(4) John P. Walker has served as a director of the Company since
December 10, 1996 and has served as the Company's Executive Vice
President and Chief Financial Officer since December 11, 1996. Mr.
Walker has served as Executive Vice President and Chief Financial
Officer of Emerson since April 1996. Mr. Walker served as
Emerson's Senior Vice President from April 1994 until March 1996,
Vice President-Finance from February 1993 to April 1994, Assistant
Vice President-Finance from June 1991 to January 1993, and Director
of Financial Management from September 1989 to May 1991. Emerson
beneficially owns approximately 36% of the Company's issued and
outstanding Common Stock. See ``Certain Relationships and Related
Transactions.''
(5) Peter G. Bunger has been a director of the Company since December
10, 1996. Mr. Bunger has been a director of Emerson since July
1992. Emerson beneficially owns approximately 36% of the Company's
issued and outstanding Common Stock. See ``Certain Relationships
and Related Transactions.'' Presently, he is a consultant with
Savarina AG and serves as a consultant to Emerson. Since October
1992, Mr. Bunger has served as a director of Savarina AG, an entity
engaged in the business of portfolio management monitoring in
Zurich, Switzerland, and since 1992, as a director of ISCS, a
computer software company. From December 1991 until December 1993,
Mr. Bunger was Vice Chairman of Montcour Bank and Trust Company
Limited, a bank organized in the Bahamas and an affiliate of FIN.
From 1981 until 1992, Mr. Bunger was owner and Managing Director of
Peter G. Bunger Investment Consulting, a firm that supervised,
controlled, and analyzed investments for individuals.
(6) Johnson C.S. Ko has been a director of the Company since December
10, 1996. Since February 1994, Mr. Ko has served as the Chairman
and Director of Universal Appliances Limited (``Universal''), a
Hong Kong corporation listed on the Hong Kong Stock Exchange, which
is engaged in the manufacturing and distribution of consumer
electronics, household electrical and telecommunication products
and printed circuit boards and in the dissemination of
international financial market information and consumer data.
Universal is the holding company for the Universal Group which owns
<PAGE>
or controls numerous subsidiary companies. Mr. Ko has also served
on certain boards of these subsidiaries since February 1994. Mr.
Ko has also served as the Chairman and Director of Kwan Wing
Holdings Limited ("Kwan Wing Holdings") since October 1992, which
is the holding company of Universal, organized under the laws of
the British Virgin Islands, and an investment vehicle whose
activities encompass trading, real property holding and financial
services. Kwan Wing Holdings' principal operating company in Hong
Kong is its wholly owned subsidiary Kwan Wing Development Ltd., in
which Mr. Ko has served as director since 1989. Kwan Wing
Development Ltd. was the initial operating company prior to the
creation of Kwan Wing Holdings Limited. From November 1992 to
April 1995, Mr. Ko also has served as Chairman and director of
Mandarin Dragon Holdings Limited, a Hong Kong corporation listed on
the Hong Kong Stock Exchange, which was also an investment holding
company with business in the manufacturing and distribution of
pharmaceuticals.
(7) Dr. Thomas P. Treichler has been a Director of the Company since
March 23, 1997. Dr. Treichler has been the Chairman of the Board
and Chief Executive Officer of Orient Financial Corporation, a San
Francisco based financial and investment banking firm, since 1983.
Dr. Treichler is a founder and member of the Board of Directors of
Satrecol Australia Limited, an Australian venture capital
investment company listed on the Main Board of the Australian Stock
Exchange. Dr. Treichler is also an Independent Director of the
Shanghai Growth Fund (listed on the Hong Kong Stock Exchange), a
fund for direct investments into the greater Shanghai region.
(8) On September 29, 1993, Emerson and five of its United States
subsidiaries filed voluntary petitions for relief under the
reorganization provisions of Chapter 11 of the United States
Bankruptcy Code. On March 31, 1994, the United States Bankruptcy
Court for the District of New Jersey entered an order confirming
the Fourth Amended Joint Plan of Reorganization which became
effective on that date. See "Certain Relationships and Related
Transactions."
THE BOARD OF DIRECTORS URGES STOCKHOLDERS TO VOTE "FOR"
EACH OF THE NOMINEES FOR DIRECTOR SET FORTH ABOVE
<PAGE> SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth, as of November 14, 1997, the
beneficial ownership of each current director, each nominee for
director, each officer named in the Summary Compensation Table, the
directors and executive officers as a group and each stockholder known
to management of the Company to own beneficially more than 5% of the
Company's outstanding shares of Common Stock. Except as otherwise
indicated and based upon the Company's review of information as filed
with the Securities and Exchange Commission ( "SEC" ), the Company
believes that the beneficial owners of the securities listed below have
sole investment and voting power with respect to such shares, subject to
community property laws where applicable.
</TABLE>
<TABLE>
Amount and Percent
Nature of of
Name and Address of Beneficial Class
Beneficial Owner Ownership
<S> <C> <C>
Emerson Radio Corp. 3,269,500(1) 36.0%
Nine Entin Road
Parsippany, New Jersey 07054
Dimensional Fund Advisors, Inc. 438,625(2) 5.4%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
Pioneering Management Corporation 502,500(3) 6.2%
60 State Street
Boston, Massachusetts 02114
Geoffrey P. Jurick* 3,269,500(4) 36.0%
Peter S. Blumenfeld* 345,419(5) 4.1%
John P. Walker* 1,381 **
Peter G. Bunger* 13,125(6) **
Johnson C.S. Ko* 3,125(7) **
Thomas P. Treichler* 3,125(7) **
Terrence M. Babilla 200 **
Eugene I. Davis* 10,000(8) **
Executive Officers and Directors
as a group (8 persons) 3,645,875(9) 38.8%
</TABLE>
(*) Director (all current directors are nominees for director except
Eugene I. Davis).
(**) Less than one percent
<PAGE>
(1) Based on information set forth in Amendment No. 3 to Schedule 13D
dated December 3, 1996, filed with the SEC by Emerson. On August 1,
1996, Emerson and Emerson Radio (Hong Kong) Limited, a wholly owned
subsidiary of Emerson (``Emerson HK''), filed a Schedule 13D with
the SEC. Pursuant to the Schedule 13D, Emerson HK reported that it
acquired 669,500 shares of the Company's Common Stock (the
"Initial Shares"). Emerson HK reported in such Schedule 13D that
it has sole voting and dispositive power with respect to the
Initial Shares. On December 10, 1996, Emerson acquired directly
from the Company (i) an additional 1,600,000 shares of newly-
issued Common Stock (the ``New Shares'') and (ii) 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 standard anti-
dilution adjustments (the "Emerson Warrants"). Pursuant to a
Pledge and Security and Agreement, Emerson pledged to Congress
Financial Corporation ("Congress") the New Shares and the Emerson
Warrants together with all proceeds thereof and all dividends and
other income and distributions thereon or with respect thereto and
all rights of Emerson to have the New Shares and any shares of
Common Stock acquired through the exercise of the Emerson Warrants
(as permitted by Congress) registered under a certain Registration
Rights Agreement. See "Certain Relationships and Related
Transactions" for a more detailed description of Emerson's
investment in the Company.
(2) Based on information set forth in a Schedule 13F for the period
ended September 30, 1997, filed with the SEC by Dimensional Fund
Advisors, Inc. ("Dimensional"), a registered investment advisor.
Dimensional reported it has sole voting power with respect to
305,925 shares and sole dispositive power with respect to 438,625
shares. Dimensional reported that all of such shares are held in
portfolios of DFA Investment Dimensions Group, Inc. (the "Fund"), a
registered open-end investment company, or in a series of The DFA
Investment Trust Company (the "Trust"), a Delaware business trust,
or the DFA Group Trust and DFA Participating Group Trust,
investment vehicles for qualified employee benefit plans, all of
which Dimensional serves as investment manager. Dimensional
disclaims beneficial ownership of all such shares. Persons who are
officers of Dimensional also serve as officers of the Fund and the
Trust. In their capacity as officers of the Fund and the Trust,
the persons vote 41,000 additional shares that are owned by the
Fund and 91,700 additional shares that are owned by the Trust (both
of which are included in sole dispositive power above).
(3) Based on information set forth in Amendment No. 4 to Schedule 13G,
dated January 21, 1997, filed with the SEC by Pioneering Management
Corporation, a registered investment adviser. Pioneering
Management Corporation reported it has sole voting and dispositive
power with respect to 502,500 shares.
<PAGE>
(4) Mr. Jurick's address is Sport Supply Group, Inc., 1901 Diplomat
Drive, Farmers Branch, Texas 75234. Mr. Jurick, directly and
indirectly, beneficially owns approximately 65.6% of the
outstanding shares of Emerson's common stock and is the Chairman of
the Board and Chief Executive Officer of Emerson and, therefore,
may be deemed to control Emerson. As a result of such control, Mr.
Jurick may be deemed to beneficially own the securities of the
Company beneficially owned by Emerson. See Note (1) above. Mr.
Jurick disclaims any such beneficial ownership. See "Certain
Relationships and Related Transactions."
(5) Consists of: (a) 500 shares of Common Stock and 125 shares of
Common Stock issuable upon exercise of the Company's common stock
purchase warrants (each warrant is exercisable into 1.25 shares of
the Company's Common Stock, the "Existing Warrants"), owned of
record by Mr. Blumenfeld's minor children; (b) 33,375 shares of
Common Stock and 11,469 shares of Common Stock issuable upon
exercise of Existing Warrants owned of record by Mr. Blumenfeld;
(c) 228,750 shares of Common Stock issuable upon exercise of stock
options granted in accordance with the Company's Option Plan (each
of which is exercisable into one share of Common Stock, the "Plan
Options") owned of record by Mr. Blumenfeld; and (d) 71,200 shares
of Common Stock issuable upon exercise of stock options granted
other than pursuant to the Company's Option Plan (each of which is
exercisable into one share of Common Stock, the "Non-Plan
Options") owned of record by Mr. Blumenfeld.
(6) Includes 3,125 Plan Options.
(7) Consists of 3,125 Plan Options.
(8) Mr. Davis is no longer an officer or consultant of the Company and
was not nominated to stand for re-election to the Board of
Directors. See "Certain Relationships and Related Transactions."
(9) Includes (a) 238,125 shares of Common Stock issuable upon exercise
of Plan Options; (b) 71,200 shares of Common Stock issuable upon
exercise of Non-Plan Options; (c) 11,594 shares of Common Stock
issuable upon exercise of Existing Warrants; and (d) 1,000,000
shares of Common Stock issuable upon exercise of the Emerson
Warrants. Mr. Jurick disclaims beneficial ownership of the
securities of the Company owned by Emerson. See footnote 4 above.
BOARD OF DIRECTORS AND COMMITTEES
The business of the Company is managed under the direction of the
Board of Directors. The Board meets during the Company's fiscal year to
review significant developments affecting the Company and to act on
matters requiring Board approval. The Board of Directors held eight (8)
formal meetings and acted by unanimous written consent three (3) times
during the 1997 fiscal year. During the 1997 fiscal year, each member of
the Board participated in at least 75% of all Board and committee
meetings held during the period for which he served as a director and/or
committee member.
<PAGE>
During fiscal 1997, the Board of Directors had an audit committee,
a stock option committee, and a compensation committee to devote
attention to specific subjects and to assist the Board in the discharge
of its responsibilities. The functions of these committees and their
current members are described below.
Audit Committee. The Company's Audit Committee is presently
comprised of Peter G. Bunger and Thomas P. Treichler. The Audit
Committee recommends to the Board of Directors the appointment of a firm
of certified public accountants to conduct audits of the accounts and
affairs of the Company and monitors the performance of such firm,
reviews accounting objectives and procedures of the Company and the
findings and reports of the independent certified public accountants,
and makes such reports and recommendations to the Board of Directors as
it deems appropriate. The Audit Committee acted by unanimous written
consent two (2) times during fiscal 1997.
Stock Option Committee. The Company's Option Plan is presently
administered by Johnson C. S. Ko and Thomas P. Treichler (each of whom
is a Non-employee Director, as defined in the Company's Amended and
Restated Stock Option Plan). The Amended and Restated Stock Option Plan
provides that the Stock Option Committee has full and final authority to
select the key employees, directors and consultants to whom awards are
granted, the number of shares of Common Stock with respect to such
awards, and the terms of such awards, including the exercise price of
the stock options and any vesting periods. In general, the Stock Option
Committee is authorized to construe, interpret and administer the
Amended and Restated Stock Option Plan and the provisions of the options
granted thereunder, prescribe and amend rules for the operation of the
Amended and Restated Stock Option Plan, and make all other
determinations necessary or advisable for its implementation and
administration. The Stock Option Committee held one (1) formal meeting
during fiscal 1997.
Compensation Committee. The Company's Compensation Committee is
presently comprised of Peter G. Bunger and Johnson C.S. Ko. The
Compensation Committee administers the Employee Stock Purchase Plan. In
addition, the Compensation Committee is responsible for recommending to
the Board of Directors compensation arrangements for the Company's
Chairman of the Board, which recommendation is subject to the approval
of a majority of the disinterested directors.
The Board of Directors did not have a standing nominating
committee, or any other committee performing similar functions during
fiscal 1997. The functions customarily attributable to a nominating
committee were performed by the Board of Directors as a whole.
Compensation of Directors
During fiscal 1997, nonmanagement directors were entitled to
receive up to $8,000 in annual directors' fees. During fiscal 1997, Mr.
Bunger and Mr. Ko each received $6,000, and Dr. Treichler received
$4,000 in directors' fees. Officers of the Company do not receive
compensation for serving on the Board of Directors. Non-employee
directors are automatically granted nonqualified stock options to
purchase 3,125 shares of Common Stock on an annual basis.
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Summary Compensation Table
The following table sets forth certain information regarding
compensation paid during each of the Company's last three fiscal years
to the Company's Chief Executive Officer and each of the Company's other
most highly compensated executive officers, based on salary and bonus
earned during fiscal 1997. During 1995, the Company changed its fiscal
year-end from December 31 to October 31, and during 1997 the Company
changed its fiscal year-end from October 31 to September 30. As a
result, fiscal year 1995 is a transition period consisting of ten
calendar months and fiscal 1997 is a transition period consisting of
eleven calendar months. During fiscal 1995 and 1996, the Company was
operating on a 52/53 week year ending on the Friday closest to October
31. During fiscal 1997, the Company was operating on a 52/53 week year
ending on the Friday closest to September 30. The information set forth
in the following table is for the ten month fiscal year-ended October
31, 1995, the twelve month fiscal year-ended November 1, 1996, and the
eleven month fiscal year-ended September 26, 1997.
<TABLE>
Securities
Underlying
Other Annual Options/ All Other
Name and Fiscal Salary Bonus Compensation SARs Compensation
Principal Position Year ($) ($) ($) (#) ($)
<S> <C> <C> <C> <C> <C> <C>
Geoffrey P. Jurick 1997 $114,582(2) $150,000(3) --- 300,000 ---
Chairman of the Board and 1996 --- --- --- --- ---
Chief Executive Officer (1) 1995 --- --- --- --- ---
Peter S. Blumenfeld, 1997 $226,245 $60,000(3) --- 279,325(4) ---
President and Chief 1996 $224,258 --- --- --- ---
Operating Officer (4) 1995 $178,333 --- --- 21,200 (5) ---
John P. Walker, 1997 $152,609 $107,000 (3) $130,805(6) 100,000 $1,188
Executive Vice President, 1996 --- --- --- --- ---
Chief Financial Officer (6) 1995 --- --- --- --- ---
Terrence M. Babilla, 1997 $183,333 --- (3) --- --- ---
General Counsel and 1996 $182,500 $35,000 --- 25,000(8) $71,875(8)
Secretary (7) 1995 $108,212 --- --- 25,000(8) ---
Michael J. Blumenfeld, 1997 $ 28,000 --- --- --- $669,760(9)
Chairman of the 1996 $221,442 --- $25,892(9) --- ---
Board and Chief 1995 $170,000 $18,500 -- 120,000 ---
Executive Officer (9)
Eugene I. Davis, 1997 --- $100,000 (3) $5,413 150,000 (10) $141,666
Chief Executive Officer, 1996 --- --- --- --- ---
Vice Chairman and 1995 --- --- --- --- ---
Consultant (10)
</TABLE>
<PAGE>
(1) Mr. Jurick has served as Chairman of the Board since December 10,
1996, the date which the Company and Emerson consummated that
certain Securities Purchase Agreement, dated November 27, 1996, by
and between the Company and Emerson (the "Emerson Agreement").
See "Certain Relationships and Related Transactions." Mr. Jurick
has served as the Company's Chief Executive Officer since January
23, 1997.
(2) The Company did not pay Mr. Jurick any salary during fiscal 1997.
However, pursuant to a Management Services Agreement by and between
the Company and Emerson, the Company paid Emerson $114,582 in
reimbursement of salary paid by Emerson to Mr. Jurick for the
benefit of the Company. See " Certain Relationships and Related
Transactions." Effective October 18, 1997, the Company began
paying Mr. Jurick an annualized salary of $250,000 and ceased
reimbursing Emerson for such payments.<PAGE>
(3) Except with respect to Mr. P. Blumenfeld, the bonus reflected in
this column, if any, is a signing bonus that was paid in January,
1997. The $60,000 reflected in this column for Mr. Blumenfeld is a
"stay-on" bonus that was approved by the Board of Directors on
January 23, 1997, to be paid on December 10, 1997, only if Mr.
Blumenfeld remains as a full-time employee of the Company through
such date. Bonuses for the fiscal year-ended September 26, 1997
are not reflected in this column because they were not calculable
through the date of this Proxy Statement. However, pursuant to the
terms of Mr. Walker's Employment Agreement, Mr. Walker is entitled
to a guaranteed minimum bonus of $57,000 for the fiscal year ended
September 26, 1997. Mr. Walker's $50,000 signing bonus and
guaranteed bonus of $57,000 are included in the Bonus column for
Mr. Walker. See "Executive Compensation and Other Information --
Employment Agreements."
(4) Mr. P. Blumenfeld served as President during the entire three (3)
fiscal years. Mr. P. Blumenfeld also served as Chief Operating
Officer from December 4, 1995 to the present date. Mr. P.
Blumenfeld was granted an option to acquire 35,000 shares of Common
Stock during fiscal 1997. In addition, options to acquire 244,325
shares of Common Stock granted to Mr. Blumenfeld in prior fiscal
years were repriced during fiscal 1997 and are, therefore, required
to be reported as compensation during fiscal 1997. See "Executive
Compensation and Other Information -- Ten Year Option Repricings."
(5) Consists of Non-Plan Options granted in lieu of a salary increase
for 1995.
(6) Mr. Walker has served as Executive Vice President and Chief
Financial Officer since December 11, 1996. The amount in "Other
Annual Compensation" in the Summary Compensation Table consists of
the following through September 26, 1997: (i) $32,577 for
initiation fees for a country club plus monthly dues, (ii)
automobile allowance of $9,000, (iii) relocation expenses including
(A) $13,896 with respect to reimbursing Mr. Walker for principal,
interest, taxes, insurance and maintenance on his home in New
Jersey, (B) $19,300 with respect to closing, sales and mortgage
related fees and expenses related to his purchase of a new
residence in Texas, (C) $21,137 with respect to moving expenses
related to his move from New Jersey to Texas and temporary
residence in Texas, and (D) $34,895 with respect to tax gross-ups
related to certain of the expenses described above. See "Executive
Compensation and Other Information -- Employment Agreements." The
amount in "All Other Compensation" is comprised of matching 401(k)
contributions. Mr. Walker also received a one-year interest free
bridge loan in the amount of $100,000 to be used toward the
purchase of a residence in Texas. Such loan is not reflected in
the Summary Compensation Table. See "Executive Compensation and
Other Information -- Employment Agreements."
<PAGE>
(7) Mr. Babilla was employed by the Company on March 13, 1995 and has
served as General Counsel since such date. Mr. Babilla was elected
as Secretary on May 13, 1996 and has served in such capacity since
such date. From September 1987 to February 1995, Mr. Babilla was
an attorney with the law firm of Hughes & Luce, L.L.P. in Dallas,
Texas.
(8) Mr. Babilla was granted options to acquire 25,000 shares of the
Company's Common Stock in fiscal 1995. All of Mr. Babilla's
options granted in fiscal 1995 were repriced in fiscal 1996 and
are, therefore required to be reported as compensation in fiscal
1996. See "Executive Compensation and Other Information -- Ten
Year Option Repricings". These stock options permitted Mr. Babilla
to elect for a period of 180 days following a change in control (as
defined in the option agreements governing the options) to
surrender to the Company for cancellation all or any part of the
unexercised portion of the option. In consideration of such
surrender and cancellation, Mr. Babilla was entitled to receive for
each share of Common Stock as to which the surrendered portion of
the option relates, an amount in cash equal to the difference
between the exercise price per share under the option and the
highest closing sales price per share of Common Stock during the
360 day calendar period prior to Mr. Babilla's election to
surrender the option as described in this paragraph. The
execution, delivery and performance of the Emerson Agreement was
deemed to be a change in control for purposes of these options.
See "Certain Relationships and Related Transactions."
Mr. Babilla surrendered his options to the Company on December 13, 1996
in exchange for $71,875.
(9) Mr. Blumenfeld served as Chairman of the Board and Chief Executive
Officer during all of fiscal 1995 and 1996, except that from
December 4, 1995 to May 13, 1996, Mr. Sanford Edlein served as
Chief Executive Officer. Mr. Blumenfeld resigned from the Company
on December 10, 1996 and was paid $669,760 (before taxes and other
deductions) pursuant to the terms of his Severance Agreement. See
"Executive Compensation and Other Information -- Severance
Agreements." The Other Annual Compensation is comprised of $18,258
for automobile allowance and $7,634 for country club dues. All of
Mr. Blumenfeld's options expired upon his resignation.
(10) Mr. Davis served as interim Chief Executive Officer of the Company
from December 11, 1996 through January 23, 1997. Mr. Davis served
as Vice Chairman and provided consulting services to the Company
from January 23, 1997 through September 29, 1997. The compensation
received by Mr. Davis for providing consulting services to the
Company is reflected under "All Other Compensation" in the Summary
Compensation Table. The compensation reflected under "Other Annual
Compensation" in the Summary Compensation Table is for club dues.
Mr. Davis no longer serves as Vice Chairman to the Company and no
longer provides consulting services to the Company. See "Certain
Relationships and Related Transactions."
<PAGE>
Option Grants During 1997 Fiscal Year
The following table provides information related to options granted to
the named executive officers during fiscal 1997.
<TABLE>
Potential Realizable
Value at Assumed Annual
Rates of Stock Price
Individual Grants in Last Fiscal Year Appreciation for Option Term (1)
Number of % of Total
Securities Options/
Underlying SARs Grant
Options/ Granted to Exercise or Date
SARs Employees Base Market
Granted in Fiscal Price Price Expiration
(#) Year ($/Sh)(2) ($/Sh)(2) Date 0%($) 5%($) 10%($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Geoffrey P. Jurick 300,000(3) 36.2% $7.50 $5.38 1/22/07 $-0- $380,820 $1,930,260
Peter S. Blumenfeld 35,000 4.2% $7.50 $5.38 1/22/07 $-0- $ 44,429 $225,197
110,625(4) 13.3% $7.50 $5.38 2/25/01 $-0- $-0- $48,359
18,750(4) 2.3% $7.50 $5.38 2/07/02 $-0- $-0- $21,835
18,750(4) 2.3% $7.50 $5.38 8/12/03 $-0- $-0- $45,380
50,000(4) 6.0% $7.50 $5.38- 12/27/98 $-0- $-0- $-0-
25,000(4) 3.0% $7.50 $5.38 5/09/04 $-0- $ 4,827 $82,977
21,200(4) 2.6% $7.50 $5.38 1/02/05 $-0- $ 8,856 $83,632
John P. Walker 100,000(3) 12.0% $7.50 $5.38 1/22/07 $-0- $126,940 $643,420
Eugene I. Davis 150,000 (5) 18.1% $7.50 $5.38 3/31/07 $-0- $190.410 $965,130
</TABLE>
(1) The potential realizable value portion of the foregoing table
illustrates value that might be realized upon exercise of the
options immediately prior to the expiration of their term, assuming
the specified compounded rates of appreciation on the Company's
Common Stock over the term of the options.
(2) The option exercise price may be paid (a) in shares of Common Stock
previously owned by the executive officer, (b) by withholding
shares of Common Stock that would otherwise be issued upon
exercise, (c) in cash or (d) a combination of the foregoing.
(3) All of these options vest in 3 equal annual installments beginning
on January 23, 1998; provided, however, the options will vest
immediately upon a change in control (as defined in the option
agreements) of the Company.
(4) Although none of these stock options were granted in fiscal 1997,
they were required to be disclosed in this table as granted in
fiscal 1997 because the options were repriced in fiscal 1997.
(5) Mr. Davis is no longer an officer of or consultant to the Company
and all of his options were terminated on September 29, 1997.
<PAGE>
Option Exercises During 1997 Fiscal Year and Fiscal Year End Option
Values
The following table provides information related to options exercised by
the named executive officers during the 1997 fiscal year and the number
and value of options held at fiscal year end. The Company does not have
any outstanding stock appreciation rights.
<TABLE>
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
Shares at FY-End at FY-End
Acquired Value (#) ($)(1)
on Realized Exercisable/ Exercisable/
Name Exercise ($) Unexercisable Unexercisable
(#)
<S> <C> <C> <C> <C>
Geoffrey P. Jurick --- --- 0/300,000 0/$150,000
PeterS. Blumenfeld --- --- 299,950/0 $172,351/0
John P. Walker --- --- 0/100,000 0/$50,000
TerrenceM. Babilla --- --- 0/0 0/0
MichaelJ. Blumenfeld --- --- 0/0 0/0
Eugene I. Davis (2) --- --- 0/150,000 0/$75,000
</TABLE>
The closing price for the Company's Common Stock as reported by the(1)
New York Stock Exchange on September 26, 1997 was $8.00. Value is
calculated on the basis of the difference between $8.00 and the option
exercise price of "in the money" options, multiplied by the number of
shares of Common Stock underlying the option.
(2) All of Mr. Davis' options were terminated on September 29, 1997.
See "Certain Relationships and Related Transactions."
Stock Option Committee And Board Report On Option Repricing
On December 10, 1996, Emerson and the Company consummated the
Emerson Agreement. See "Certain Relationships and Related
Transactions." Pursuant to the Emerson Agreement, the Company caused a
majority of the members of its Board of Directors to consist of
Emerson's designees. The new Board recognized that it would be in the
Company's best interests to retain a person that had knowledge of the
Company and experience in the sporting goods industry to assist in
operating the Company. The new Board concluded that Mr. Peter
Blumenfeld, who had been employed by the Company and its predecessors in
various executive positions for more than fifteen years, would be the
best candidate for this position. In order to induce Mr. Peter S.
Blumenfeld to remain as the President and Chief Operating Officer of the
Company, the Board of Directors (excluding Mr. P. Blumenfeld) and the
Stock Option Committee agreed to reprice all of Mr. Blumenfeld's stock
options that had an exercise price greater than $7.50 per share to $7.50
per share. On January 23, 1997 (the date of the repricing), the last
sales price of the Company's Common Stock as reported on the New York
Stock Exchange was $5.38.
<PAGE>
In accordance with the rules of the SEC, this Option Repricing
Report of the Board of Directors and the Stock Option Committee is not
intended to be "filed" or "soliciting material filed'' or subject to
Regulations 14A or 14C or Section 18 of the Exchange Act, or
incorporated by reference into any other filing by the Company with the
SEC.
The Stock Option Committee The Board of Directors
Johnson C.S. Ko Geoffrey P. Jurick
Thomas P. Treichler Peter S. Blumenfeld
John P. Walker
Peter G. Bunger
Johnson C.S. Ko
Thomas P. Treichler
Eugene I. Davis
The following table summarizes certain information concerning the
repricing of options to buy the Company's Common Stock held by all
executive officers since the Company became a reporting company after
its initial public offering in April 1991.
<TABLE>
Ten-Year Option Repricings
Number of Market Length pf
Securities Price of Exercise Original
Underlying Stock at Price at New Option Term
Options Time of Time of Exercise Remaining at
Date of Repriced Repricing Repricing Price Date of
Name Repricing # $ $ $ Repricing
<S> <C> <C> <C> <C> <C> <C>
Sanford R. Edlein,
Chief Executive
Officer (1) Sept. 30, 1994 25,000 $12.13 $15.13 $12.13 3.2 years(1)
Terrence M. Babilla July 29, 1996 25,000 $5.50 $12.00 $5.50 8.8 years
General Counsel
and Secretary (2)
Peter S. Blumenfeld, Jan. 23, 1997 110,625 $5.38 $7.60 $7.50 4 years, 1 month
President and Jan. 23, 1997 18,750 $5.38 $7.90 $7.50 5.0 years
Operating Officer Jan. 23, 1997 18,750 $5.38 $10.20 $7.50 6 years, 5 months
Jan. 23, 1997 50,000 $5.38 $14.10 $7.50 1 year, 11 months
Jan. 23, 1997 25,000 $5.38 $13.13 $7.50 7 years, 4 months
Jan. 23, 1997 21,200 $5.38 $10.63 $7.50 7 years, 11 months
</TABLE>
(1)Mr. Edlein resigned on May 13, 1996. These options expired on
November 10, 1997.
(2)Mr. Babilla tendered these options back to the Company. See Footnote
8 to "Executive Compensation and Other Information -- Summary
Compensation Table."
<PAGE>
Employment Agreements
In February 1991, the Company entered into a five-year employment
agreement with Peter S. Blumenfeld. Under Mr. Blumenfeld's employment
agreement and as a result of subsequent pay raises, Mr. Blumenfeld
receives base annual compensation (subject to annual increases by the
Board of Directors) of $250,000. The employment agreement also provides
that Mr. Blumenfeld is able to use a Company car, be reimbursed for
certain country club dues, and receive certain other benefits, such as
participation in the Company's health insurance plans. Mr. Blumenfeld's
employment agreement is scheduled to terminate on February 28, 1998.
However, the employment agreement was amended to provide that if
Mr. Blumenfeld is terminated without cause after December 10, 1999,
Mr. Blumenfeld will be entitled to receive eighteen (18) months severance.
If Mr. Blumenfeld is terminated without cause prior to December 10,
1999, Mr. Blumenfeld will be entitled to receive payments under his
Severance Agreement. See "Executive Compensation and Other Information
- - - -- Severance Agreements." Mr. Blumenfeld's Amended Employment Agreement
also provides that if Mr. Blumenfeld serves as a full time employee of
the Company through December 10, 1997, the Company will pay Mr.
Blumenfeld a $60,000 bonus.
In March 1995, the Company entered into a three (3) year employment
agreement with Terrence M. Babilla. Under Mr. Babilla's employment
agreement and as a result of subsequent pay raises, Mr. Babilla receives
base annual compensation (subject to annual increases by the Board of
Directors) of $220,000. The employment agreement also provides that Mr.
Babilla is able to use a Company car and receives certain other
benefits, such as participation in the Company's health insurance plans.
Mr. Babilla's employment agreement automatically renews for successive
one (1) year periods following the initial term, unless one party
provides written notice that such party intends to terminate the
employment at least six (6) months prior to termination.
Effective January 23, 1997, the Company entered into a three (3)
year employment agreement with John P. Walker. Pursuant to Mr. Walker's
employment agreement, Mr. Walker receives base annual compensation
(subject to annual increases by the Board of Directors) of $190,000.
The employment agreement also provides for (i) an annual bonus equal to
an amount up to 30% of Mr. Walker's base salary upon attainment of the
Company's business plan and other agreed upon benchmarks (with a
guaranteed bonus of $57,000 for the fiscal year ended September 26,
1997), (ii) an additional annual performance bonus to be approved at the
discretion of the Board of Directors, or a committee thereof, (iii) up
to $30,000 for initiation fees for a country club plus monthly dues,
(iv) car allowance, (v) relocation expenses, including (A) reimbursing
Mr. Walker for principal, interest, taxes, insurance and maintenance on
his existing home in New Jersey for six (6) months, (B) reimbursing
Mr. Walker for all closing, sales and mortgage related fees and expenses
and moving expenses with respect to the sale of his residence in New
Jersey and the purchase of a new residence in Texas, with the closing
costs (exclusive of moving expenses) not to exceed $30,000, and (C) an
interest free one-year bridge loan in the amount of $100,000 secured by
the real estate purchased, and (vi) certain other benefits, such as
participation in the Company's health insurance plans, and (vii) certain
tax gross-ups. Mr. Walker's Employment Agreement also provides that if
<PAGE>
Mr. Walker is terminated or constructively discharged on or after July
1, 1998, he will receive severance in the amount of $285,000 (18 months
salary) and this provision survives the termination or expiration of the
Employment Agreement (see "Summary Compensation Table."). Mr. Walker
was also paid a $50,000 signing bonus and granted options to acquire
100,000 shares of the Company's Common Stock at $7.50 per share. The
Company has also agreed to make available to Mr. Walker an interest free
loan for 6 months to purchase the shares of Common Stock underlying the
options, which loan would be secured by the shares of Common Stock.
Pursuant to Mr. Walker's employment agreement, Mr. Walker may devote up
to 50% of his working time fulfilling his obligations as an officer of
Emerson.
Effective October 18, 1997, the Company entered into an employment
agreement with Geoffrey P. Jurick, which employment agreement is
scheduled to expire on March 31, 2000. Pursuant to Mr. Jurick's
employment agreement, Mr. Jurick receives base annual compensation
(subject to increases by the Board of Directors) of $250,000. The
employment agreement also provides for (i) an annual bonus equal to an
amount up to 30% of Mr. Jurick's base salary upon attainment of the
Company's business plan and other agreed upon benchmarks, (ii) an
additional annual performance bonus to be approved at the discretion of
the Board of Directors or a committee thereof, (iii) the use of a
Company car and certain other benefits, such as participation in the
Company's health insurance plans, and (iv) certain tax gross-ups. Mr.
Jurick was also paid a $150,000 signing bonus and granted options to
acquire 300,000 shares of the Company's Common Stock at $7.50 per share.
Pursuant to Mr. Jurick's employment agreement, Mr. Jurick may devote up
to 50% of his working time fulfilling his obligations as an officer of
Emerson.
The Company may terminate its obligations under the applicable
employment agreements if the employee covered by the employment
agreement is discharged for cause. Each agreement defines "cause" as:
(a) an intentional material act of fraud or embezzlement by the employee
in connection with his employment with the Company; (b) an intentional
wrongful material damage to the Company's property; (c) an intentional
wrongful disclosure of material secret processes or material
confidential information of the Company; or (d) an intentional and
continued failure by the employee to perform his duties in his official
capacity. Each of the foregoing employees may be discharged without
cause, provided the Company continues to pay the remaining compensation
payments due under the agreements and continues to provide health
insurance. Each of the foregoing employees may terminate their
employment prior to expiration of the agreements and, if the Company has
not breached any provision of the agreements, the Company will be
required to pay only the compensation earned to the date of termination.
Any amount payable upon termination will reduce amounts payable under
Mr. Blumenfeld's and Mr. Babilla's Severance Agreements described below.
<PAGE>
Severance Agreements
The Company entered into a Severance Agreement with Messrs. Michael
J. Blumenfeld, P. Blumenfeld and Babilla. Upon a change in control of
the Company, each of the Severance Agreements becomes effective for
three years. The execution, delivery and performance of the Emerson
Agreement resulted in a change in control under the Severance
Agreements. See "Certain Relationships and Related Transactions."'
After a change in control, the Company may terminate the employee's
employment only by reason of the employee's death or disability or for
cause (as defined in the agreements). The employee is entitled to cash
severance compensation from the Company if the Company terminates the
employee's employment for any other reason after a change in control, or
if the employee resigns after a change in control and any one of the
following events has occurred: (a) an adverse change in the nature or
scope of the employee's position with the Company; (b) a reduction in
the employee's salary, bonus or incentive compensation or a significant
reduction in other monetary or nonmonetary benefits to which the
employee was entitled; (c) a good faith determination by the employee
that a change in circumstances has significantly affected his position,
or that a change in the composition or policies of the Board of
Directors, or such other material event, has substantially rendered such
employee unable to carry out or perform his position with the Company;
(d) the Company has required the employee to relocate or travel
significantly more than prior to the change in control; or (e) the
Company has committed any material breach of the agreement.
The cash severance compensation is equivalent to 299% of the sum
of: (a) the highest annual salary of the employee during the period of
employment commencing on the day prior to a change in control and
continuing until expiration of the agreement or the employee's salary
immediately prior to the change in control, whichever is larger; and (b)
bonuses or incentive compensation paid by the Company in the preceding
fiscal year. The severance compensation is generally designed to
compensate for the loss of the employee's compensation, including salary
and bonuses, less any amounts the payment of which might cause adverse
consequences under federal income tax laws (as described in the
agreements). Subsequent to the closing of the Emerson Agreement, Michael
J. Blumenfeld resigned from the Company and was paid $669,760 (before
taxes and other deductions) pursuant to the terms of his Severance
Agreement, which agreement is of no further force or effect. As of
November 14, 1997, the maximum aggregate contingent liability under the
named executive officers' severance agreements was approximately
$1,515,000. In addition, Mr. Walker has a guaranteed severance of
$285,000 in his Employment Agreement if he is terminated without cause
or constructively discharged. See "Executive Compensation and Other
Information -- Employment Agreements."
Anti-Takeover Effect of Certain Provisions
The provisions of the option agreements that include change-in-
control provisions, employment agreements and severance agreements may
be deemed to have an anti-takeover effect and may delay, defer or
prevent a tender offer or takeover attempt that a stockholder may
consider to be in the stockholder's best interest, including attempts
that might result in a premium over the market price for shares held by
stockholders.
<PAGE>
Compensation Committee Interlocks and Insider Participation In
Compensation Decisions
The Compensation Committee is responsible for recommending to the
Board of Directors compensation arrangements for the Company's Chairman
of the Board and Chief Executive Officer, which recommendation is
subject to the approval of a majority of the disinterested directors.
The Chairman of the Board was responsible for establishing compensation
arrangements for all other executive officers, subject to the review and
approval of the Board of Directors. During fiscal 1997, Peter G. Bunger
and Johnson C.S. Ko served as members of the Company's Compensation
Committee.
Geoffrey P. Jurick serves as Chairman of the Board and Chief
Executive Officer of the Company and Emerson. John P. Walker serves as
Executive Vice President and Chief Financial Officer of the Company and
Emerson. Mr. Walker is also a director of the Company. Mr. Davis was
an executive officer and director of Emerson and is a director of the
Company. Mr. Bunger, who is a director of the Company and Emerson,
serves on the Compensation Committee of the Company and Emerson and also
serves as a consultant to Emerson. The following executive officers,
who were also members of the Board of Directors during 1997,
participated in deliberations concerning executive officer compensation:
Geoffrey P. Jurick, Peter S. Blumenfeld, John P. Walker, Michael J.
Blumenfeld, and Eugene I. Davis. Michael J. Blumenfeld is no longer an
officer or director of the Company. Eugene I. Davis is no longer an
officer of the Company. See "Certain Relationships and Related
Transactions."
Report of the Compensation Committee and Stock Option Committee on
Executive Compensation
During fiscal 1997 the Company's Compensation Committee, Chairman
of the Board, and the Stock Option Committee shared the responsibility
for establishing and administering the Company's executive compensation
programs. The Compensation Committee had responsibility for determining
compensation to be paid to the Chairman of the Board and Chief Executive
Officer, subject to the approval of a majority of the disinterested
directors. The Stock Option Committee had responsibility for
administering the Company's Option Plan, including authority regarding
the selection of award recipients and the size and terms of all option
grants under the Option Plan. The Chairman of the Board, subject to
review and approval by the Board of Directors, determines on an annual
basis the compensation to be paid to the executive officers of the
Company. Under the supervision of the Compensation Committee and the
Board of Directors, the Company developed and implemented compensation
policies, plans and programs that sought to enhance the profitability of
the Company, and thus stockholder value, by aligning closely the
financial interests of the Company's executives with those of its
stockholders. The specific objectives of the Company's executive
compensation program were to:
Support the achievement of the Company's strategic operating
objectives.
Provide compensation at competitive levels that will attract and
retain superior talent and reward executive officers based upon
performance.
Align the executive officers' interests with the success of the
Company by placing the majority of pay increases at risk (i.e.
increases that are dependent upon Company performance).
<PAGE>
The Company's executive officer compensation program for fiscal
1997 was comprised of base salary, cash bonuses and long-term incentive
compensation in the form of stock options.
Base salaries for the executive officers of the Company represent
compensation for the performance of defined functions and assumption of
defined responsibilities. The Compensation Committee reviews the base
salary for the Chairman of the Board and Chief Executive Officer on an
annual basis and recommends compensation arrangements for the Company's
Chairman of the Board and Chief Executive Officer. Implementation of
the Chairman's and Chief Executive Officer's compensation arrangement is
subject to the approval of a majority of the disinterested directors.
The Chairman of the Board reviews the base salary of all the other
executive officers on an annual basis and recommends compensation
arrangements to the Board of Directors for such executive officers. In
determining salary adjustments, the Compensation Committee and the
Chairman of the Board consider the Company's growth in earnings and
revenues, the reduction in expenses, the Company's results of operations
as compared to the Company's business plan, and each executive's
performance level, as well as other factors relating to the executive's
specific responsibilities. Also considered are the executive's
position, experience, skills, potential for advancement, responsibility
and current salary in relation to the expected level of pay for the
position(s) in which the executive serves. The Compensation Committee
(with respect to compensation arrangements for the Chairman and Chief
Executive Officer) and the Chairman (with respect to compensation
arrangements for the other executive officers) exercise their judgment
based upon the above criteria and do not apply a specific formula or
assign a weight to each factor considered. The Company has entered into
employment agreements with each of Messrs. Jurick, P. Blumenfeld, Walker
and Babilla. See "Executive Compensation and Other Information --
Employment Agreements."
At the beginning of each fiscal year, management submits a business
plan to the Board of Directors and the Compensation Committee. The
business plan establishes performance goals of the Company for such
fiscal year. Such goals may include target increases in sales, net
income and earnings per share, reduction in expenses, as well as more
subjective goals with respect to marketing, product introduction and
expansion of customer base. Cash bonuses are paid based upon successful
achievement of some or all of the foregoing factors.
The cash bonuses reflected in the Summary Compensation Table
reflect signing bonuses that were paid to Messrs. Jurick, Walker and
Davis in January 1997 and a "stay-on" bonus for Mr. P. Blumenfeld
payable in December 1997. Bonuses for the fiscal year ended September
26, 1997 are not reflected in this column because they were not
calculable through the date of this Proxy Statement. However, pursuant
to the terms of Mr. Walker's Employment Agreement, Mr. Walker is
entitled to a guaranteed minimum bonus of $57,000 for the fiscal year
ended September 26, 1997. See "Executive Compensation and Other
Information -- Employment Agreements." Mr. Walker's $50,000 signing
bonus and guaranteed bonus of $57,000 are included in the Bonus column
for Mr. Walker. The Employment Agreements for Mr. Jurick and Mr. Walker
provide for an annual bonus equal to an amount up to 30% of their
respective base salary upon attainment of the Company's business plan
and other agreed upon benchmarks as well as an additional annual bonus
to be approved at the discretion of the Board of Directors or a
committee thereof.
<PAGE>
The award of options to purchase Company Common Stock forms the
basis for the Company's long-term incentive plan for officers and key
employees. Awards have been made during the current fiscal year from
the Option Plan administered by the Stock Option Committee. The
specific objective of all awards is to align executive and stockholder
long-term interests by creating a strong correlation between executive
pay and stockholder return. The Company intends that its executives
develop and maintain a significant, long-term stock ownership position
in the Company's Common Stock. During fiscal 1997, executive officers
were granted options to purchase 535,000 shares of Common Stock. In
addition, all of Mr. P. Blumenfeld's options that were outstanding prior
to January 23, 1997 and that had an exercise price greater than $7.50
per share were repriced to $7.50 per share. Although the closing stock
price on the date the options were granted and/or repriced was $5.38 per
share, the Stock Option Committee set the exercise price at $7.50 per
share. The number of stock options granted to the executive officers
was arbitrarily determined by the Stock Option Committee.
Michael J. Blumenfeld was the founder of the Company and served as
Chairman of the Board and Chief Executive Officer of the Company or its
predecessors until December 10, 1996. Mr. Blumenfeld's base salary was
$224,000 per year when he resigned on December 10, 1996.
On December 11, 1996, Eugene I. Davis became the interim Chief
Executive Officer upon consummation of the Emerson Agreement. See
"Certain Relationships and Related Transactions." Mr. Davis did not
receive a base salary while he served as Chief Executive Officer.
However, Mr. Davis received a $100,000 signing bonus and options to
acquire 150,000 shares of Common Stock at $7.50 per share. Mr. Davis
also received $141,666 for providing consulting services to the Company.
On January 23, 1997, Geoffrey P. Jurick replaced Mr. Davis as Chief
Executive Officer. The Company did not pay Mr. Jurick any salary during
fiscal 1997. However, pursuant to a Management Services Agreement by
and between the Company and Emerson, the Company paid Emerson $114,582
in reimbursement of salary paid by Emerson to Mr. Jurick for the benefit
of the Company. See ``Certain Relationships and Related Transactions."
In addition, Mr. Jurick received a $150,000 signing bonus and options to
acquire 300,000 shares of Common Stock at $7.50 per share. The salary
level, bonus and the number of options granted to each of the Chief
Executive Officers in fiscal 1997 were subjectively established by the
Board of Directors and/or Compensation Committee and Stock Option
Committee and not subject to specific criteria.
The Board of Directors has considered the potential impact of
Section 162(m) of the Code. Section 162(m) of the Code generally
provides that a publicly held corporation's deduction for compensation
paid to its covered employees is limited to $1 million per year,
subject to certain exceptions. Since the cash compensation of each of
the Company's current covered employees is below the $1 million
threshold and the Amended and Restated Stock Option Plan has been
revised to meet the requirements of Section 162(m) of the Code, the
Board of Directors believes that Section 162(m) will not reduce the
federal income tax deduction available to the Company. The Company's
policy is to qualify, to the extent reasonable, its executive officers'
compensation for deductibility under applicable tax laws. However, the
Board of Directors believes that its primary responsibility is to
provide a compensation program that will attract, retain and reward the
executive talent necessary to the Company's success. Consequently, the
Board of Directors recognizes that the loss of a tax deduction could be
necessary in some circumstances.
<PAGE>
This report is submitted by the members of the Board of Directors,
the Compensation Committee and the Stock Option Committee that were in
existence at the end of fiscal 1997:
Board of Directors Compensation Committee Stock Option Committee
Geoffrey P. Jurick Peter G. Bunger Thomas P. Treichler
Peter S. Blumenfeld Johnson C.S. Ko Johnson C.S. Ko
John P. Walker
Peter G. Bunger
Johnson C.S. Ko
Thomas P. Treichler
Eugene I. Davis
This report will not be deemed to be incorporated by reference in
any filing by the Company under the Securities Act of 1933 (the
"Securities Act") or the Exchange Act, except to the extent that the
Company specifically incorporates this report by reference.
Corporate Performance Graph
The following shows a comparison of cumulative total returns for
the Company, the S&P 500 Composite Index and an index of peer companies
selected by the Company for the period since September 30, 1992. The
comparison assumes $100 was invested on September 30, 1992 in the
Company's Common Stock and in each of the two indices and assumes
reinvestment of dividends. Companies in the peer group are as follows:
Ajay Sports, Inc., K2, Inc. (f/k/a Anthony Industries, Inc.), Escalade,
Inc., and Johnson Worldwide Associates, Inc. The information in the
graph was provided by Media General Financial Services.
<TABLE>
COMPARISON OF CUMULATIVE TOTAL RETURN
OF COMPANY, PEER GROUP INDEX
AND BROAD MARKET INDEX
FISCAL YEAR ENDING
9/30/92 9/30/93 9/30/94 9/30/95 9/30/96 9/30/97
<S> <C> <C> <C> <C> <C> <C>
SPORT SUPPLY GROUP, INC. 100.00 250.04 248.95 225.95 101.87 144.71
PEER GROUP 100.00 128.56 153.41 154.68 162.13 169.67
BROAD MARKET 100.00 113.01 117.18 152.04 182.96 256.97
</TABLE>
CUSTOMER SELECTED STOCK LIST
AN INDEX OF THE COMPANIES ON THE S&P 500
AJAY SPORTS INC.
ESCALADE INC.
JOHNSON WORLDWIDE ASSOC.
K2 INC.
The stock price performance depicted in the above graph is not
necessarily indicative of future price performance. The Corporate
Performance Graph will not be deemed to be incorporated by reference in
any filing by the Company under the Securities Act or the Exchange Act,
except to the extent that the Company specifically incorporates the
graph by reference.
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Emerson, one of the nation's largest volume consumer electronics
distributors, directly and through subsidiaries, designs, sources,
imports and markets a variety of video and audio consumer electronics
and microwave oven products. On August 1, 1996, Emerson and Emerson
Radio HK, filed a Schedule 13D with the SEC. Pursuant to the Schedule
13D, Emerson HK reported that it acquired 669,500 shares of the
Company's Common Stock (the "Initial Shares").
On December 10, 1996, Emerson acquired directly from the Company
(i) an additional 1,600,000 shares of newly-issued Common Stock (the
`` New Shares') for an aggregate consideration of $11,500,000, or
approximately $7.19 per share, and (ii) 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 standard anti-dilution adjustments (the
"Emerson Warrants") for an aggregate consideration of $500,000. In
addition, Emerson agreed to arrange for foreign trade credit financing
of $2 million for the benefit of the Company to supplement the Company's
existing credit facilities.
Prior to the exercise of any of the Emerson Warrants, Emerson and
Emerson HK own approximately 28% of the issued and outstanding shares of
Common Stock. If all of the Emerson Warrants are exercised by Emerson,
Emerson will own approximately 36.0% of the issued and outstanding
shares of Common Stock.
Pursuant to a Registration Rights Agreement (the ``Registration
Rights Agreement''), the Company granted to Emerson and Emerson HK
certain demand and incidental registration rights with respect to the
resale of the shares of Common Stock they own, as well as on the
exercise and resale of the shares of Common Stock Emerson may acquire
under the Warrant Agreement governing the Emerson Warrants.
The total consideration paid by Emerson pursuant to the Emerson
Agreement was $12 million, of which $11,500,000 was attributable to the
1,600,000 New Shares and $500,000 was attributable to the Emerson
Warrants. The $12,000,000 purchase price was borrowed by Emerson from
Congress Financial Corporation ("Congress"), Emerson's United States
senior secured lender, under the terms of Emerson's existing credit
facility and in accordance with the terms of the consent obtained from
Congress. Pursuant to a Pledge and Security Agreement, Emerson pledged
to Congress the New Shares and the Emerson Warrants together with all
proceeds thereof and all dividends and other income and distributions
thereon or with respect thereto and all rights of Emerson to have the
New Shares (and any shares of Common Stock acquired through the exercise
of the Emerson Warrants as permitted by Congress) registered under the
Registration Rights Agreement.
In addition, for a period of at least 2 years after the closing,
neither the Company nor any of its subsidiaries are permitted to enter
into or be a party to any agreement or transaction with any Affiliate
(as such term is defined in the Exchange Act) of the Company or Emerson,
except (i) in the ordinary course of the Company's or its subsidiaries'
business and on terms no less favorable to the Company or its
subsidiaries than would be obtained in a comparable arms' length
transaction with a person not an Affiliate of the Company or Emerson or
(ii) unless approved by a majority of the Company's directors who do not
have a direct or indirect material financial interest in the agreement
or transaction and which includes a majority of directors who are not
officers or employees of the Company or Emerson or directors of Emerson.
<PAGE>
Pursuant to the Emerson Agreement, the Company also caused a
majority of the members of its Board of Directors to consist of
Emerson's designees. The Company's Board of Directors now includes the
following people that are associated with Emerson: Geoffrey P. Jurick,
who beneficially owns approximately 65.6% of Emerson's issued and
outstanding common stock and is Emerson's Chairman, Chief Executive
Officer and President; John P. Walker, Emerson's Executive Vice
President and Chief Financial Officer; and Peter G. Bunger, a
consultant serving both Emerson and Savarina AG. Mr. Jurick is
currently the Chairman of the Board and Chief Executive Officer of the
Company. Mr. Walker is currently the Executive Vice President and Chief
Financial Officer of the Company. Mr. Bunger is a director of both
companies and serves on the Compensation Committee of each company.
Each of Mr. Jurick and Mr. Walker have employment agreements with
Emerson and the Company and split their time between the two companies.
During fiscal 1997, the Company and Emerson entered into a
Management Services Agreement in an effort to utilize the Company's
excess capacity and to enable Emerson to reduce certain costs. The
Management Services Agreement implements a program whereby the Company
performs certain services for Emerson in exchange for a fee. The
services include human resources, banking, computer/management
information systems, payables management, warehouse services (including
subleasing warehouse storage space), provision of office space, design
services and financial management services. During fiscal 1997, the
Company paid Emerson $114,582 in reimbursement of salary paid by Emerson
to Mr. Jurick for the benefit of the Company. Effective October 18,
1997, the Management Services Agreement was amended to provide that the
Company will no longer reimburse Emerson for any of Mr. Jurick's salary,
but will pay Mr. Jurick directly. The Management Services Agreement may
be terminated by either party upon sixty (60) days prior notice. During
fiscal 1997, the Company invoiced Emerson approximately $90,168 for
services provided to Emerson, all of which has been paid. During fiscal
1997, the Company paid Emerson $114,582 for reimbursement of Mr.
Jurick's salary.
In connection with the execution of his employment agreement with
the Company, John P. Walker, the Company's Executive Vice President and
Chief Financial Officer, agreed to relocate his residence to the general
locality of the Company's principal executive offices. To assist in
such relocation, the Company provided an interest-free bridge loan of
$100,000 to Mr. Walker to be secured by his new residence. The term of
the loan is for the lesser of twelve (12) months or through the date of
sale of Mr. Walker's residence in New Jersey.
Pursuant to Emerson's bankruptcy restructuring plans on March 31,
1994, 30 million shares of Emerson's common stock were issued to GSE,
FIN and Elision (the "Affiliated Entities). The Affiliated Entities are
all affiliates of Geoffrey P. Jurick. Mr. Jurick is the Chairman of the
Board, Chief Executive Officer and President of Emerson, and the
Chairman of the Board and Chief Executive Officer of the Company, and a
beneficial owner of approximately 65.6% of the issued and outstanding
shares of Emerson's common stock. On June 11, 1996, a Stipulation of
Settlement and Order (the "Settlement Agreement") was executed, which
settles various legal proceedings in Switzerland, the Bahamas and the
United States. The Settlement Agreement provides for, among other
things, the payment by Mr. Jurick and his Affiliated Entities of $49.5
million to various claimants of Mr. Jurick and the Affiliated Entities
(the "Creditors"), to be paid from the proceeds of the sale of certain
of the 29,152,542 shares of Emerson common stock (the "Settlement
Shares") owned by the Affiliated Entities. In addition, Mr. Jurick is
to be paid the sum of $3.5 million from the sale of the Settlement
<PAGE>
Shares. The Settlement Shares are to be sold over an indeterminate
period of time by a financial advisor, initially TM Capital (the
"Advisor"). The Advisor is formulating a marketing plan taking into
consideration (i) the interests of Emerson's minority stockholders, and
(ii) the goal of generating sufficient proceeds to pay the Creditors and
Mr. Jurick as quickly as possible. The Settlement Shares have been
divided into two pools. The Pool A Shares currently consist of
15,286,172 shares of Emerson's common stock. The Pool B Shares
currently consist of the number of Emerson shares with respect to which
Mr. Jurick must retain beneficial ownership of voting power to avoid an
event of default arising out of a change of control of Emerson pursuant
to the terms of Emerson's Loan and Security Agreement with Congress
and/or the Indenture governing Emerson's 8-1/2% Senior Subordinated
Convertible Debentures Due 2002 (the "Debentures").
All of the Settlement Shares secure payment of the $49.5 million
owed to the Creditors on a first priority basis. Any Creditor may apply
to the Court for an order to terminate the Settlement Agreement if
certain events occur. Such events include, without limitation,
delisting of the Settlement Shares from a national securities exchange
or a determination that there is no reasonable prospect that the goals
contemplated by the Settlement Agreement can be achieved. If the Court
enters an order terminating the Settlement Agreement, the Creditors may
take any action permitted by law to execute the Consent Judgments given
to them in connection with the Settlement Agreement to collect the
unpaid balance (including, without limitation, foreclosing on the
Settlement Shares). If the Creditors foreclose on the Settlement Shares
and such foreclosure results in a change of control (as defined in the
Indenture governing the Debentures) of Emerson, such foreclosure will be
deemed an event of default under Emerson's Senior Secured Credit
Facility and under the Indenture pursuant to which the Debentures were
issued. Such default entitles the debtholders, under certain
circumstances, to accelerate payment of all such indebtedness. Any such
<PAGE>
acceleration would have a material adverse effect on Emerson and could
result in a change of control of SSG.
The Company was paying Mr. Davis, a director of the Company, $8,333
bimonthly in exchange for consulting services to be provided by Mr.
Davis to the Company. See "Executive Compensation and Other Information
- - - -- Summary Compensation Table." On September 29, 1997, the Company
terminated Mr. Davis as Vice Chairman and a Consultant and requested
that Mr. Davis resign as a director of the Company. The circumstances
surrounding such termination are the subject of two proceedings. On
September 30, 1997, the Company filed a complaint in the United States
District Court for the Northern District of Texas, Dallas Division,
seeking a declaration as to the existence of an alleged consulting
agreement and as to the Company's continuing obligations to make
payments to Mr. Davis. Thereafter, Mr. Davis filed a complaint in the
Law Division of the Superior Court of New Jersey, against the Company
for breach of an alleged consulting agreement and against certain
unnamed "John Does" of the Company for tortious interference with
contractual relationships. The Company intends to vigorously defend
itself against Mr. Davis' complaint.
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended
("Section 16(a)") requires the Company's officers and directors, and
persons who own more than 10% of a registered class of the Company's
equity securities to file reports of ownership and changes in ownership
with the SEC and the New York Stock Exchange. Officers, directors and
greater than 10% stockholders are required by certain regulations to
furnish the Company with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by
it, the Company believes that, since November 1, 1996, its officers,
directors and greater than 10% beneficial owners have complied with all
applicable filing requirements with respect to the Company's equity
securities.
<PAGE>
STOCKHOLDER PROPOSALS
A proper proposal submitted by a stockholder in accordance with
applicable rules and regulations for presentation at the Company's next
annual meeting that is received at the Company's principal executive
office by July 31, 1998 will be included in the Company's proxy
statement and form of proxy for that meeting.
PERSONS MAKING THE SOLICITATION
The enclosed proxy is solicited on behalf of the Board of Directors
of the Company. The cost of soliciting proxies in the accompanying form
will be paid by the Company. Officers of the Company may solicit
proxies by mail, telephone or telegraph. Upon request, the Company will
reimburse brokers, dealers, banks and trustees, or their nominees, for
reasonable expenses incurred by them in forwarding proxy material to
beneficial owners of shares of the Common Stock.
INDEPENDENT PUBLIC ACCOUNTANTS
Effective June 20, 1997, the Company appointed Ernst & Young LLP as
its independent auditors for the fiscal year ending September 26, 1997,
to replace the firm of Arthur Andersen LLP, who was dismissed as
auditors of the Company effective June 20, 1997. The decision to change
auditors was recommended by the Audit Committee of the Board of
Directors and approved by the Company's Board of Directors.
The reports of Arthur Andersen LLP on the Company's financial
statements for the ten month period ended October 31, 1995 and the year
ended November 1, 1996 (which financial statements are included in the
Company's Annual Report on Form 10-K for the fiscal year ended September
26, 1997) did not contain an adverse opinion or a disclaimer of opinion,
nor were they qualified or modified as to uncertainty, audit scope or
accounting principles.
During the ten month period ended October 31, 1995, the year ended
November 1, 1996, and the subsequent interim period prior to June 20,
1997, there were no disagreements with Arthur Andersen LLP on any matter
of accounting principles or practices, financial statement disclosures,
or auditing scope or procedure, which disagreements, if not resolved to
the satisfaction of Arthur Andersen LLP, would have caused it to make a
reference to the subject matter of the disagreements in connection with
its reports.
The Company had not consulted with Ernst & Young LLP during the ten
month period ended October 31, 1995 and the fiscal year ended November
1, 1996, or subsequent interim periods prior to June 20, 1997, on either
the application of accounting principles or the type of opinion Ernst &
Young LLP might issue on the Company's financial statements.
Ernst & Young LLP, independent certified public accountants, has
been selected by the Board of Directors as the Company's independent
auditor for the current year. A representative of Ernst & Young LLP is
expected to be present at the Annual Meeting, will have an opportunity
to make a statement if he desires to do so and is expected to be
available to respond to appropriate questions.
<PAGE>
OTHER MATTERS
The Board of Directors is not aware of any matter to be presented
for action at the meeting other than the matters set forth herein.
Should any other matter requiring a vote of stockholders arise, the
proxies in the enclosed form confer upon the person or persons entitled
to vote the shares represented by such proxies discretionary authority
to vote the same in accordance with their best judgment in the interest
of the Company.
FINANCIAL STATEMENTS
The Company will provide a copy of the Company's Annual Report on
Form 10-K for the fiscal year ended September 26, 1997 (exclusive of
exhibits), without charge, to each person to whom a copy of this Proxy
Statement is delivered, upon the written or oral request of such person.
Requests should be directed to Investor Relations (Attention: John P.
Walker), Sport Supply Group, Inc., 1901 Diplomat Drive, Farmers Branch,
Texas 75234.
By Order of the Board of Directors,
/s/ TERRENCE M. BABILLA
Secretary
December 1, 1997
<PAGE>
FRONT OF PROXY CARD
SPORT SUPPLY GROUP, INC.
Board of Directors Proxy for the Annual Meeting
of Stockholders at 2:00 p.m., Tuesday, January 13, 1998
Columbian Country Club
2525 Country Club Drive
Carrollton, Texas 75006
The undersigned stockholder of Sport Supply Group, Inc. (the
"Company") hereby appoints Geoffrey P. Jurick, Peter S. Blumenfeld and
John P. Walker, or any of them, as proxies, each with full powers of
substitution, to vote the shares of the undersigned at the above-stated
Annual Meeting and at any adjournment(s) thereof.
(Continued on reverse side)
<PAGE>
BACK OF PROXY CARD
(1) To elect six directors for a one-year term
FOR all nominees listed below WITHHOLD AUTHORITY
(except as provided to the contrary below) [ ] to vote for
all nominees below [ ]
Geoffrey P. Jurick, Peter S. Blumenfeld, John P. Walker, Peter
G. Bunger, Johnson C.S. Ko, and Thomas P. Treichler.
(INSTRUCTION: To withhold authority to vote for any
individual nominee(s), write that nominee's name
on the space provided below):
(2) To transact such other business as may properly come before
the meeting and any adjournment(s) thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND
WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATIONS MADE HEREON. IF A
CHOICE IS NOT INDICATED WITH RESPECT TO ITEM (1), THIS PROXY WILL BE
VOTED "FOR" SUCH ITEM. THE PROXIES WILL USE THEIR DISCRETION WITH
RESPECT TO ANY MATTER REFERRED TO IN ITEM (2). THIS PROXY IS REVOCABLE
AT ANY TIME BEFORE IT IS EXERCISED.
Receipt herewith of the Company's Annual Report and Notice of Meeting
and Proxy Statement, dated December 1, 1997, is hereby acknowledged.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD USING THE ENCLOSED
ENVELOPE.
PLEASE SIGN, DATE AND MAIL TODAY.
Dated:
Signature of Stockholder(s)
(Joint owners must EACH sign.
Please sign EXACTLY as your
name(s) appear(s) on this card.
When signing as attorney,
trustee, executor,
administrator, guardian or
corporate officer, please give
your FULL title.)
