SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: May 25, 2000
Emerson Radio Corp.
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(Exact name of registrant as specified in charter)
Delaware 0-25226 22-3285224
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(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
9 Entin Road, Parsippany, New Jersey 07054
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(973) 884-5800
Not Applicable
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(Former Address, if changed since Last Report) (Zip Code)
Item 2. Acquisition or Disposition of Assets. See Item 5 below.
In the last few months, Emerson Radio Corp. (the "Company") settled
substantially all of its outstanding litigation.
Stelling
On May 25, 2000, the Company entered into a Termination, Settlement,
Redemption and Option Agreement, (the "Agreement") with Geoffrey P. Jurick, its
Chairman, Chief Executive Officer and President, and two of Mr. Jurick's
institutional creditors, resolving outstanding litigation between Mr. Jurick,
and two of his three outside creditors.
In 1996, Mr Jurick entered into a settlement agreement (the "Settlement
Agreement") pursuant to which he agreed to pay to an individual and two
institutions the sum of $49.5 million from the proceeds of the sale of
approximately 29.2 million shares of Common Stock of the Company (the "Common
Stock") beneficially owned by him. None of the shares of Common Stock was sold
and, in March 2000, at the request of Mr. Jurick's three creditors, the Court
terminated the Settlement Agreement. To implement such termination, the Court
divided the 29.2 million shares of Common Stock among Mr. Jurick and his three
creditors in a manner insuring that Mr. Jurick would retain at least 25% of the
outstanding shares of Common Stock as required by the Company's lending
agreements and approved the Agreement.
In accordance with the Agreement, the Company, on May 25, 2000, purchased
7.0 million shares of Common Stock from the two institutional creditors for $6.0
million. The purchase price was paid by the Company using cash generated from
operations. As a result of the purchase by the Company, the outstanding shares
of Common Stock of the Company were reduced to approximately 39.4 million
shares. In addition, under the terms of the Agreement, the Company was granted a
one year option to purchase from the two institutional creditors all of the
remaining 4.1 million shares of Common Stock owned by them for approximately
$5.5 million (the "Option Purchase Price"). The option term may be extended by
the Company for additional one year periods on each of May 25, 2001 and 2002
upon making a non-refundable payment of approximately 10% of the Option Purchase
Price, in the aggregate, to the two institutions at the time of each option
extension. In the event the Company exercises its right to extend the option
term for an additional one year following the initial extension, the Company
will also be required to make an additional $1.9 million non-refundable payment,
all of which will be credited against the Option Purchase Price.
In the event that the Company or its assignees do not purchase the
approximately 4.1 million shares of Common Stock owned by such institutions,
these institutions will continue to have claims against Mr. Jurick.
Implementation of the termination of the Settlement Agreement with Mr. Jurick's
remaining creditor (by settlement or court order) has not been finalized.
Item 5. Other Events.
Other Litigation.
The Company has also entered into definitive agreements to resolve other
outstanding litigation. The Company reached agreements with Cineral Electronica
de Amazonia Ltd., a former Latin American distributor, which had brought suit
for approximately $93.6 million in damages; Tanashin Denkin Company, which had
brought suit for patent infringements seeking potential damages of approximately
$12.0 million; and two former officers who sought damages for alleged wrongful
termination. The Company also received a favorable jury ruling in its suit
against a former supplier and won a favorable ruling from the Hong Kong Court of
Final Appeals regarding its prior year tax filings in Hong Kong for its foreign
subsidiary.
Costs.
All costs in excess of existing reserves associated with the resolution of
the above mentioned litigation, including settlement payments and legal fees,
were expensed in the Company's fiscal year ended March 31, 2000.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
EMERSON RADIO CORP.
By: /s/ Geoffrey P. Jurick
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Name: Geoffrey P. Jurick
Title: Chairman of the Board, Chief
Executive Officer and President
Dated: June 9, 2000