UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________
FORM 8-K/A
CURRENT REPORT
Pursuant to Section l3 or l5(d) of the
Securities Exchange Act of l934
Date of Report (Date of earliest event reported) JUNE 3, 1997
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VISUAL EDGE SYSTEMS INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 0-20995 13-377-8895
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(State of other juris- (Commission (I.R.S. Employer
diction of incorporation) File Number) Identification No.)
2424 NORTH FEDERAL HIGHWAY, SUITE 100, BOCA RATON, FL 33431
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(Address of principal executive offices) (Zip Code)
(561) 750-7559
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(Registrant's telephone number, including area code)
Item 5. OTHER EVENTS
As of June 3, 1997, Visual Edge Systems Inc. (the "Company"), Greg Norman
("Norman") and Great White Shark Enterprises, Inc. executed an amendment (the
"Amendment") to the License Agreement, dated as of March 1, 1995 (the
"Agreement"), pursuant to which Norman granted to the Company a worldwide
license (the "Greg Norman License") to use his name, likeness, endorsement and
certain trademarks in connection with the production and promotion of the
Company's ONE-ON-ONE WITH GREG NORMAN personalized video golf lessons. Norman
and the Company have agreed to restructure the terms of the payments due to
Norman under the Agreement by: (i) altering the character of the payments such
that Norman will receive $1,020,000 of his royalties in shares of the Company's
Common Stock, rather than cash as was originally contemplated by the Agreement;
(ii) changing the schedule of the payments such that they will be paid to Norman
over a period of time from January 1998 through April 2000; and (iii) granting
to Norman 25,000 options to purchase shares of the Company's Common Stock at an
exercisable price of $10.00 per share.
Prior to the execution of the Amendment, the Agreement provided that the
continued use of the Greg Norman License by the Company was conditioned upon
guaranteed payments to Norman aggregating $3.3 million during the three-year
period commencing July 1, 1996, which would be applied against a royalty equal
to 8% of the Company's Net Revenues from product sales. "Net Revenues" is
defined in the Agreement as revenues less costs associated with discounts,
allowances, payments to golf clubs, driving ranges or golf professionals, sales
tax and returns, not to exceed 20% of product sales. Pursuant to the Agreement,
the Company has paid Norman $600,000 to date, and was required to make payments
aggregating $1,000,000 and $1,700,000, respectively, during each of the years
commencing July 1, 1997 and 1998, regardless of whether the Company derived any
revenues from product sales. Such annual payments were payable on a quarterly
basis.
The Amendment restructures the payments to Norman by: (i) deferring the
date that the next payment is due from July 1, 1997 until January 1, 1998; (ii)
extending the date that the last payment is due from April 1, 1999 until April
1, 2000; and (iii) providing that a portion of the payments will be in shares of
the Company's Common Stock (rather than cash payments as contemplated by the
Agreement) in accordance with the following schedule:
COMMON STOCK
PAYMENT DATE CASH PAYMENT PAYMENT (SHARES)
July 1, 1997 $ 0 0
October 1, 1997 $ 0 0
January 1, 1998 $ 140,000 6,000
April 1, 1998 $ 140,000 6,000
-2-
July 1, 1998 $ 210,000 9,000
October 1, 1998 $ 210,000 9,000
January 1, 1999 $ 300,000 12,000
April 1, 1999 $ 300,000 12,000
July 1, 1999 $ 300,000 12,000
October 1, 1999 $ 300,000 12,000
January 1, 2000 $ 240,000 12,000
April 1, 2000 $ 240,000 12,000
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TOTAL: $2,980,000 102,000 shares
For the purposes of calculating the royalties payable to Norman, the Common
Stock issued to Norman by the Company will be valued at $10.00 per share
regardless of the actual market price of the Common Stock at the time of
payment. Any royalties earned by Norman pursuant to the Amendment that are in
excess of the fees as scheduled above are to be paid in cash.
After the initial term, which ends on June 30, 2000, the Company has the
option to renew the Agreement for two additional five-year periods (each
five-year period, a "Renewal Term"). The guaranteed fee to Norman in the first
year of the first Renewal Term will be $1,300,000, increasing by $100,000 each
successive year thereafter; all such fees will be payable in cash, in equal
quarterly installments.
The Company has agreed to register all Common Stock issued to Norman
pursuant to the Amendment under the Securities Act of 1933, as amended.
The 25,000 options to purchase shares of the Company's Common Stock, at an
exercise price of $10.00 per share, vest immediately and are exercisable at
Norman's discretion at any time prior to their expiration on June 30, 2000.
(c) Exhibits
99.1 Amendment to License Agreement, dated as of June 3, 1997, by and among
Greg Norman, Great White Shark Enterprises, Inc. and Visual Edge
Systems Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of l934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
VISUAL EDGE SYSTEMS INC. (Registrant)
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By: /s/ EARL T. TAKEFMAN
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Earl T. Takefman
Chief Executive Officer
Date: June 27, 1997
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EXHIBIT INDEX
NO.
99.1 Amendment to License Agreement, dated as of June 3, 1997, by and
among Greg Norman, Great White Shark Enterprises, Inc. and Visual
Edge Systems Inc.