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 (Date of earliest event reported): DECEMBER 10, 1996
EMERSON RADIO CORP.
(Exact name of registrant as specified in its charter)
DELAWARE 0-25226 22-3285224
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification
incorporation) Number)
NINE ENTIN ROAD, PARSIPPANY, NEW JERSEY 07054
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (201) 884-5800
NONE
(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On December 10, 1996, Emerson Radio Corp. ("Emerson") and Sport
Supply Group, Inc. ("SSG") jointly announced the closing of the
transactions contemplated under a Securities Purchase Agreement (the
"Agreement") dated November 27, 1996 by and between Emerson and SSG,
pursuant to which Emerson purchased from SSG 1,600,000 shares of the common
stock, $.01 par value per share (the "Common Stock"), of SSG for aggregate
consideration of $11.5 million, or approximately $7.19 per share. In
addition, Emerson purchased, for an aggregate consideration of $500,000, 5-
year warrants (the "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, pursuant to a Warrant Agreement (the "Warrant
Agreement"). The purchase price paid by Emerson was negotiated in an arms'
length transaction with SSG. Prior to the closing of the Agreement,
Emerson beneficially owned approximately 9.9% of SSG's outstanding Common
Stock. Based upon the purchase of the Common Stock as set forth above,
Emerson owns approximately 27.0% of the outstanding shares of the Common
Stock. If Emerson exercises all of the Warrants, it will beneficially own
approximately 34.9% of the Common Stock.
The $12,000,000 purchase price paid by Emerson pursuant to the
Agreement was obtained by Emerson from Congress Financial Corporation, its
United States senior secured lender, under the terms of its existing credit
facility, and in accordance with the terms of the consent (the "Consent")
obtained from such lender. Pursuant to a Pledge and Security Agreement
dated December 10, 1996, Emerson has pledged to Congress Financial
Corporation the Common Stock and Warrants acquired under the Agreement.
In accordance with a Registration Rights Agreement dated December
10, 1996 (the "Registration Rights Agreement"), Emerson has been granted
certain demand and incidental registration rights on the resale of the
shares of Common Stock which it and Emerson Radio (Hong Kong) Limited own,
as well as on the exercise and resale of the shares Emerson may acquire
under the Warrant Agreement. In addition, Emerson has arranged for foreign
trade credit financing of $2 million for the benefit of SSG to supplement
SSG's existing credit facilities.
Pursuant to the Agreement, SSG caused a majority of the members
of its Board of Directors to consist of Emerson's designees. In connection
therewith, Emerson designated Geoffrey P. Jurick, its Chairman and Chief
Executive Officer, Eugene I. Davis, its President, John P. Walker, its
Executive Vice President and Chief Financial Officer, Peter Bunger, one of
its directors, and Johnson C. Ko, an independent Hong Kong businessman, to
sit on the SSG Board. Peter S. Blumenfeld and William H. Watkins, Jr.,
Directors of SSG prior to the Closing, continue as Directors of SSG, while
Michael J. Blumenfeld and Robert W. Philip resigned as Directors. On
December 11, 1996, Geoffrey P. Jurick was elected Chairman, Eugene I. Davis
was elected Chief Executive Officer, and John P. Walker was elected Chief
Financial Officer of SSG. Messrs. Bunger, Ko, and Watkins have been
appointed as the members of both of the Stock Option Committee and the
Audit Committee of SSG.
Under the Agreement, for a period of at least two years from the
date of the Closing, neither SSG nor any of its subsidiaries is permitted
to enter into or be a party to any agreement or transaction with any
Affiliate (as such term is defined in the Securities Exchange Act of 1934,
as amended) of SSG or Emerson, except (i) in the ordinary course of SSG's
or its subsidiaries' business and on terms no less favorable to SSG or its
subsidiaries than would be obtained in a comparable arms' length
transaction with a person not an Affiliate of SSG or Emerson or (ii) unless
approved by a majority of SSG'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
SSG or Emerson or directors of Emerson.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of businesses acquired
Not applicable
(b) Pro forma financial information
Not applicable
(c) Exhibits
(2)(a) Securities Purchase Agreement dated as of November
27, 1996, by and between Sport Supply Group, Inc. and Emerson Radio Corp.
(Exhibit 2(a) of Emerson's Current Report on Form 8-K filed on December 3,
1996, is incorporated herein by reference.)
4(a) Warrant Agreement by and between Sport Supply
Group, Inc. and Emerson Radio Corp. (Exhibit 4(a) of Emerson's Current
Report on Form 8-K filed on December 3, 1996, is incorporated herein by
reference.)
4(b) Registration Rights Agreement by and between Sport
Supply Group, Inc. and Emerson Radio Corp. (Exhibit 4(b) of Emerson's
Current Report on Form 8-K filed on December 3, 1996, is incorporated
herein by reference.)
10(a) Consent No. 1 to Financing Agreements among
Emerson Radio Corp., certain of its subsidiaries, and Congress Financial
Corporation. (Exhibit 10(a) of Emerson's Current Report on Form 8-K filed
on December 3, 1996, is incorporated herein by reference.)
10(b) Pledge and Security Agreement dated December 10,
1996 by Emerson Radio Corp. to and in favor of Congress Financial
Corporation. (Exhibit 5 of Amendment No. 4 to Emerson's Schedule 13D
relating to its ownership of the Common Stock of SSG filed on December 17,
1996, is incorporated herein by reference.)
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SIGNATURE
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.
Dated: December 17, 1996 By: /S/ EUGENE I. DAVIS
Eugene I. Davis, President
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