AMENDMENT NO. 2 TO STOCK OPTION AGREEMENTS
THIS AMENDMENT NO. 2 TO STOCK OPTION AGREEMENTS (this "Amendment"),
dated to be effective as of January 14, 1998, is by and between Xxxxx X.
Xxxxxxxxxx ("Xxxxxxxxxx") and Sport Supply Group, Inc. ("SSG").
WHEREAS, SSG granted Xxxxxxxxxx options to acquire an aggregate of
299,950 shares of SSG's Common Stock, the terms of which are summarized
on Schedule 1 attached hereto (collectively referred to herein as the
"Options").
WHEREAS, in order to induce Xxxxxxxxxx to remain in SSG's employ,
on January 14, 1998, the Stock Option Committee determined that it would
be in the Company's best interests to amend the Options to provide that,
in the event of a Change in Control (as defined below), Xxxxxxxxxx could
surrender the Options to SSG for cancellation in exchange for an amount
in cash equal to the difference between the exercise price per share
under the Options and the highest closing sale price per share of SSG's
Common Stock during the 360 day calendar period prior to Xxxxxxxxxx'x
election to surrender the Option;
NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Subject to the terms and provisions of this Amendment, the
Stock Option Agreements governing the Options are hereby amended to
include the following language:
"Notwithstanding the provisions set forth herein, the Optionee
may elect for a period of 180 days following a Change in Control
(as defined below) 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, the Optionee
shall be 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 Option Price per share
under the Option and the highest closing sales price per share (as
reported on the principal stock exchange on which the Common Stock
is traded) of Common Stock during the 360 calendar day period prior
to Optionee's election pursuant to this paragraph."
2. The Stock Option Agreements governing the Options are hereby
amended to include the following language (Note: If these terms were
previously defined in the Option Agreements, the previous definitions
are deleted in their entirety and replaced with the definitions set
forth below):
a. Acquiring Person: An "Acquiring Person" shall mean any person
(including any "person" as such term is used in Sections 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) that, together with all Affiliates and Associates of
such person, is the beneficial owner of 10% or more of the outstanding
Common Stock. The term "Acquiring Person" shall not include the
Company, any subsidiary of the Company, any trustee or other fiduciary
holding securities under an employee benefit plan of the Company or
subsidiary of the Company or any person holding Common Stock for or
pursuant to the terms of any such plan, any corporation owned, directly
or indirectly, by the shareholders of the Company in substantially the
same proportions as their ownership of stock of the Company, Xxxxxxx
Radio Corp. and its Affiliates and Associates (including successors and
assigns) or Xxxxxxxx X. Xxxxxx. For the purposes of this Agreement, a
person who becomes an Acquiring Person by acquiring beneficial ownership
of 10% or more of the Common Stock at any time after the date of this
Agreement shall continue to be an Acquiring Person whether or not such
person continues to be the beneficial owner of 10% or more of the
outstanding Common Stock.
b. Affiliate and Associate. "Affiliate" and "Associate" shall have
the respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act in effect on the
date of this Agreement.
c. Change in Control. A "Change in Control" of the Company shall have
occurred if at any time during the term of this Agreement any of the
following events shall occur:
(i) The Company is merged, consolidated or reorganized into
or with another corporation or other legal person and as a result
of such merger, consolidation or reorganization less than 60% of
the combined voting power to elect each class of directors of the
then outstanding securities of the remaining corporation or legal
person or its ultimate parent immediately after such transaction is
available to be received by all of the Company's stockholders on a
pro rata basis and is actually received in respect of, or in
exchange for, voting securities of the Company pursuant to such
transaction;
(ii) The Company sells all or substantially all of its assets
to any other corporation or other legal person and as a result of
such sale less than 60% of the combined voting power to elect each
class of directors of the then outstanding securities of such
corporation or legal person or its ultimate parent immediately
after such transaction is available to be received by all of the
Company's stockholders on a pro rata basis and is actually received
in respect of, or in exchange for, voting securities of the Company
pursuant to such sale (provided that this provision shall not apply
to a registered public offering of securities of a subsidiary of
the Company, which offering is not part of a transaction otherwise
a part of or related to a Change in Control);
(iii) Any Acquiring Person has become the beneficial owner
(as the term "beneficial owner" is defined under Rule 13d-3 or any
successor rule or regulation promulgated under the Exchange Act) of
securities which when added to any securities already owned by such
person would represent in the aggregate 30% or more of the then
outstanding securities of the Company which are entitled to vote to
elect any class of directors; or
(iv) If, during any period of two consecutive calendar years,
individuals who at the beginning of such period were members of the
Company's Board of Directors cease for any reason to constitute at
least a majority thereof (unless the election, or the nomination
for election by the Company's stockholders of each new director was
approved by a vote of at least a majority of the directors then
still in office who were directors at the beginning of such
period).
3. This Amendment and the Stock Option Agreements governing the
Options between Xxxxxxxxxx and the Company (as previously amended)
constitute the entire agreement between the parties pertaining to the
subject matter contained herein and therein and supersede all prior and
contemporaneous agreements, representations and understandings of the
parties (other than Amendment No. 1). No supplement, modification or
amendment of this Amendment shall be binding unless signed by the party
to be charged therewith.
IN WITNESS WHEREOF, the parties have executed this Amendment to be
effective as of January 23, 1998.
SPORT SUPPLY GROUP, INC.
/s/ Xxxxxxxx X. Xxxxxx
Xxxxxxxx X. Xxxxxx
Chairman of the Board and
Chief Executive Officer
/s/ Xxxxx X. Xxxxxxxxxx
Xxxxx X. Xxxxxxxxxx
SCHEDULE 1
SUMMARY OF OPTIONS
DATE OF EXPIRE NUMBER EXERCISE
GRANT DATE OF OPTIONS PRICE
02/25/91 02/25/01 110,625[1] $7.50[2]
06/25/91 06/25/01 6,250[1] 4.80
02/07/92 02/07/02 18,750[1] 7.50[2]
12/28/92 12/28/02 14,375[1] 6.90
08/12/93 08/12/03 18,750[1] 7.50[2]
12/27/93 12/27/98 50,000[1] 7.50[2]
05/09/94 05/09/04 25,000 7.50[2]
01/03/95 01/02/05 21,200 7.50[2]
01/23/98 01/22/08 35,000 7.50[2]
TOTAL 299,950
[1] Adjusted for March 10, 1994 5:4 Stock Split
[2] Exercise Price reduced to $7.50 per share pursuant to Amendment
No. 1 to Stock Option Agreements dated to be effective as of
January 23, 1997
