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-12
EMERSON RADIO CORP.
(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 number of securities to which transaction 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) Filing Party:
________________________________________________________________________________
(4) Date Filed:
<PAGE>
EMERSON RADIO CORP.
Nine Entin Road
P.O. Box 430
Parsippany, New Jersey 07054-0430
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 10, 2000
Dear Stockholder:
You are hereby given notice of and invited to attend in person or by
proxy the 2000 Annual Meeting of Stockholders of Emerson Radio Corp. ("we",
"our" or "Emerson") to be held at the Sheraton Parsippany Hotel, 199 Smith Road,
Parsippany, New Jersey 07054 on Thursday, August 10, 2000 at 1:00 p.m. (Eastern
Daylight Time).
At this year's stockholders' meeting, you will be asked to elect five
directors to serve for a one-year term and to transact such other business as
may properly come before the meeting and any adjournment(s) thereof. The Board
of Directors unanimously recommends that you vote FOR the directors nominated.
Accordingly, please give careful attention to these proxy materials.
Only stockholders of record of Emerson's common stock as of the close
of business on June 28, 2000 (the "Record Date") are entitled to notice of and
to vote at such meeting and any adjournment(s) thereof. 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, we want to have the maximum representation
at the Annual Meeting and respectfully request 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. You may revoke
your proxy at any time prior to its use as specified in the enclosed proxy
statement.
By Order of the Board of Directors
ELIZABETH J. CALIANESE
Senior Vice President-Human Resources,
General Counsel and Secretary
Parsippany, New Jersey
July 11, 2000
YOUR VOTE IS IMPORTANT.
PLEASE EXECUTE AND RETURN PROMPTLY THE
ENCLOSED PROXY CARD IN THE ENVELOPE PROVIDED HEREIN.
<PAGE>
EMERSON RADIO CORP.
---------------------
PROXY STATEMENT
---------------------
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 10, 2000
---------------------
To Our Stockholders:
This Proxy Statement is furnished to our stockholders for use at our
Annual Meeting of Stockholders to be held at the Sheraton Parsippany Hotel, 199
Smith Road, Parsippany, New Jersey 07054, on August 10, 2000 at 1:00 p.m. (local
time), or at any adjournment or adjournments thereof (the "Annual Meeting").
Emerson's stockholders of record as of the close of business on June 28, 2000
(the "Record Date") are entitled to vote at the Annual Meeting. We will begin
mailing this Proxy Statement and the enclosed proxy to our stockholders on or
about July 13, 2000.
VOTING PROCEDURES AND REVOCABILITY OF PROXIES
The accompanying proxy card is designed to permit each of our
stockholders as of the Record Date to vote on each of the proposals brought
before the Annual Meeting. As of the Record Date, there were 39,377,615 shares
of our common stock, par value $.01 per share, issued and outstanding and
entitled to vote at the Annual Meeting. Each outstanding share of our common
stock is entitled to one vote.
The holders of a majority of our outstanding shares of common stock,
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. Abstentions
and broker non-votes are counted as stockholders who are present and entitled to
vote and they count toward a quorum. A broker non-vote occurs when a nominee
holding shares for a beneficial owner does not vote on a particular proposal
because the nominee does not have discretionary voting power with respect to
that proposal and has not received instructions from the beneficial owner
(despite voting on at least one other proposal for which the nominee does have
discretionary authority or for which it has received instructions). Brokers
holding shares of record for customers generally are not entitled to vote on
certain "non-routine" matters unless they receive voting instructions from their
customers.
The accompanying proxy card provides space for you to vote in favor
of, or to withhold voting for, the nominees for the Board of Directors.
<PAGE>
Directors are elected by plurality and the five nominees who receive the most
votes will be elected. Abstentions and broker non-votes will not be taken into
account in determining, and have no effect on, the outcome of the election of
directors. The Board urges you to complete, sign, date and return the proxy card
in the accompanying envelope, which is postage prepaid for mailing in the United
States.
When a signed proxy card is returned with choices specified with
respect to voting matters, the proxies designated on the proxy card vote the
shares in accordance with the stockholder's instructions. The proxies we have
designated for the stockholders are Geoffrey P. Jurick and John P. Walker. If
you desire to name another person as your proxy, you may do so by crossing out
the name of the designated proxies and inserting the names of the other persons
to act as your proxy. In that case, it will be necessary for you to sign the
proxy card and deliver it to the person named as your proxy and for the named
proxy to be present and vote at the Annual Meeting. Proxy cards so marked should
not be mailed to us.
If you sign your proxy card and return it to us and you have made no
specifications with respect to voting matters, your shares will be voted for the
election of the five nominees for director and, at the discretion of the proxies
designated by us, on any other matter that may properly come before the Annual
Meeting or any adjournment(s).
You have the unconditional right to revoke your proxy at any time
prior to the voting of the proxy by taking any act inconsistent with the proxy.
Acts inconsistent with the proxy include notifying Emerson's Secretary in
writing of your revocation, 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 us at or prior to the Annual Meeting.
ELECTION OF DIRECTORS
Five directors are proposed to be elected at the Annual Meeting. If
elected, each director will hold office until the next Annual Meeting of our
stockholders or until his successor is elected and qualified. The election of
directors will be decided by a plurality vote. All nominees named in this proxy
statement are members of our present Board of Directors and have consented to
serve if elected. We have no reason to believe that any of the nominees named
will be unable to serve. If any nominee becomes unable to serve, 1.) the shares
represented by the designated proxies will be voted for the election of a
substitute as the Board may recommend, 2.) the Board may reduce the number of
directors to eliminate the vacancy, or 3.) the Board may fill the vacancy at a
later date after selecting an appropriate nominee.
Nominations for election to the Board of Directors may be made by the
Board, a nominating committee appointed by the Board or by any stockholder
entitled to vote for the election of directors. Nominations made by stockholders
must be made by written notice to Emerson's Secretary at its corporate offices
<PAGE>
in Parsippany, New Jersey, and must 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 our
common stock 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 (we refer to it as the "Exchange
Act"). Any such recommendation must be accompanied by a written statement from
the individual nominee giving his or her consent to be named as a candidate and,
if nominated and elected, to serve as a director.
The current Board nominated the nominees named below for election to
our Board of Directors and background information on each of the nominees is set
forth below. See "Security Ownership of Certain Beneficial Owners and
Management" for additional information about the nominees, including their
ownership, purchase and sale of securities issued by the Company.
<TABLE>
<CAPTION>
Year First
Became
Name Age Director Principal Occupation or Employment
<S> <C> <C> <C>
Robert H. Brown, Jr. 46 1992 Since January 1999, President and Chief Executive Officer
of Frost Securities, Inc., an investment banking firm;
from July 1998 to January 1999, President of RHB Capital,
LLC; from January 1990 to July 1998, held a variety of
positions with Dain Rauscher, formerly Rauscher Pierce
Refsnes, Inc. ("Rauscher"), including Senior Vice
President and Director of the Corporate Finance Department
and Executive Vice President of Capital Markets; since
April 1996, a Director of Claimsnet.com, which is traded
on the Nasdaq Stock Market; from May 1993 through March
1999, a Director of Stevens Graphics Corp., which is
traded on the American Stock Exchange.
Peter G. Bunger 59 1992 Since 1990, a consultant with Savarina AG, an entity
engaged in the business of portfolio management monitoring
in Zurich, Switzerland; since October 1992, a Director of
Savarina AG; since 1992, a Director of ISCS, a computer
software company; since December 1996, a Director of
Sport Supply Group, Inc., which is traded on the New
York Stock Exchange ("SSG"). As of July 10, 2000,
Emerson beneficially owned approximately 43.2% of the
issued and outstanding common shares of SSG as determined
by the most recent SSG documents filed with the Securities
and Exchange Commission (which we refer to as the "SEC").
See "Certain Relationships and Related Transactions".
<PAGE>
Jerome H. Farnum 64 1992 Since July 1994, an independent consultant. For at least
five years prior thereto, a senior executive with several
of the entities comprising the Fidenas Group, as defined
below, in charge of legal and tax affairs, accounting,
asset and investment management, foreign exchange
relations, and financial affairs.
Stephen H. Goodman 56 1999 Since January 1998, President, Chief Executive Officer and
a Director of the Singer Company, N.V. ("Singer") and a
number of Singer's affiliates and subsidiaries; from March
1986 to December 1997, held a variety of positions with
Bankers Trust Company, including Managing Director,
Corporate Strategy, New York and Managing Director,
Strategic Advisory and Mergers & Acquisitions Business,
Asia. On September 6, 1999, GM Pfaff A.G., then a
subsidiary of Singer, filed a voluntary petition for
relief under the reorganization provisions of the German
Bankruptcy Code, in the lower court of Kaiserslautern,
Germany. On September 12 and 13, 1999, Singer and its U.S.
subsidiaries, the holding companies for its foreign
businesses, and a number of Singer's foreign operating
subsidiaries, filed voluntary petitions for relief under
the reorganization provisions of the United States
Bankruptcy Code, in the United States District Court for
the Southern District of New York. All of the bankruptcy
petitions are still pending.
Geoffrey P. Jurick 59 1990 Since July 1992, Chief Executive Officer of the Company;
since December 1993, Chairman; since April 1997, President
and previously served as our President from July 1993 to
October 1994; since December 1993, served as a Director of
Fidenas International Limited, L.L.C. and its predecessor
("FIN") and, since May 1994, an officer and general
manager of Fidenas International; since May 1994, a
Director and Chairman of GSE Multimedia Technologies
Corporation ("GSE"), which is traded in the
over-the-counter market; since March 1996, Chairman of
Elision International Ltd. ("Elision"); for more than the
past five years, held a variety of senior executive
positions with several of the entities comprising the
Fidenas group of companies ("Fidenas Group"); since
December 1996, serves as a Director and Chairman of the
Board and, since January 1997, Chief Executive Officer of
SSG. See "Certain Relationships and Related
Transactions".
</TABLE>
THE BOARD OF DIRECTORS URGES YOU 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 June 28, 2000, the beneficial ownership of
(i) each current Director; (ii) each Executive Officer named in the Summary
Compensation Table ("Executive Officers"); (iii) the Directors and Executive
Officers as a group and (iv) each stockholder known by us to own beneficially
more than 5% of our outstanding shares of common stock. Except as otherwise
indicated and based upon our review of information as filed with the SEC, we
believe 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.
<PAGE>
<TABLE>
<CAPTION>
Amount and Nature of
Name and Address of Beneficial Owners Beneficial Ownership(1) Percent of Class
<S> <C> <C> <C> <C>
Geoffrey P. Jurick (2) (3)** 14,575,109 36.0%
Petra Stelling 8,177,533 20.2%
Im Berghof 5
8700 Kusnacht
Switzerland (4)
The Chase Manhattan Bank 6,181,302 13.6%
Special Loan Group
270 Park Avenue - 30th Floor
New York, NY 10017 (5)
Oaktree Capital Management 3,483,135 7.9%
550 South Hope St., 22nd Fl
Los Angeles, CA 90071 (6)
Thomas Hackett, Official Liquidator of 3,164,340 7.8%
Fidenas International Bank Limited
Price Waterhouse Coopers
East Hill Street
P.O. Box N-3910
Nassau, Bahamas (2)
Robert H. Brown, Jr. (7)** 50,000 *
Peter G. Bunger (7)** 25,000 *
Jerome H. Farnum (7)** 25,000 *
Stephen H. Goodman** - *
Marino Andriani (8) 75,000 *
Elizabeth J. Calianese (8) 30,000 *
John J. Raab (8) 50,000 *
John P. Walker (8) 200,000 *
All Directors and Officers 15,075,109 37.3%
as a Group (11 persons) (9) ______________________________________________
</TABLE>
(*) Less than one percent
(**) Director (All current directors are nominees for director.)
<PAGE>
(1) Based on 39,377,615 shares of common stock outstanding as of June 28, 2000,
plus shares of common stock under option of any Director or Executive Officer,
exercisable within 60 days. Except as otherwise indicated, the beneficial
ownership table does not include (i) shares of common stock issuable upon
conversion of 3,677 shares of Emerson's Series A Preferred Stock, (ii) common
stock issuable upon conversion of certain warrants issued by Emerson, (iii)
common stock issuable upon exercise of outstanding options, which are not
currently exercisable within 60 days, or (iv) common stock issuable upon
conversion of Emerson's 8-1/2% Senior Subordinated Convertible Debentures Due
2002 (the "Debentures").
(2) Mr. Jurick's beneficial ownership consists of 100 shares of common stock
directly owned by him, and 9,875,000 shares of common stock held by Mr. Jurick,
3,164,340 and 935,669 shares of common stock held by Thomas Hackett, Official
Liquidator of Fidenas International Bank Limited ("Fidenas Liquidator") and
Barclays Bank PLC ("Barclays"), respectively, pursuant to the provisions of the
Termination, Settlement, Redemption and Option Agreement, dated and so ordered
by the United States District Court for the District of New Jersey (the "U.S.
District Court") as of May 25, 2000 by and between Emerson, Mr. Jurick and his
affiliated companies FIN, Elision and GSE, the Fidenas Liquidator and Barclays
(the "Option Agreement"). All of the shares of common stock are subject to
certain restrictions. Mr. Jurick has the right to vote the shares of common
stock held by the Fidenas Liquidator and Barclays pursuant to the proxy granted
to Mr. Jurick under the terms of the Option Agreement. See "Certain
Relationships and Related Transactions - Certain Outstanding Common Stock".
(3) Includes options to purchase 600,000 shares of common stock, exercisable
within 60 days.
(4) Pursuant to the Option Agreement, Mrs. Stelling holds 8,177,533 shares of
common stock in her name. All of the shares of common stock are subject to
certain restrictions. See "Certain Relationships and Related Transactions -
Certain Outstanding Common Stock".
(5) Consists of common shares issuable upon conversion of the owner's holdings
of Emerson's Series A Preferred Stock if such holdings were converted into
shares of Emerson's common stock. The percentage of beneficial ownership assumes
that the common shares that would be issued upon conversion are outstanding.
(6) Based on information set forth in a Schedule 13D, dated May 22, 1998, as
amended and filed with the SEC by Oaktree Capital Management LLC ("Oaktree"),
Kenneth Grossman and OCM Principal Opportunities Fund, L. P. Consists of common
shares issuable upon conversion of the owner's holdings of Emerson's Debentures
if such holdings were converted into shares of Emerson's common stock. The
percentage of beneficial ownership assumes that the common shares that would be
issued upon conversion are outstanding.
<PAGE>
(7) Comprised of options issued pursuant to Emerson's 1994 Non-Employee Director
Stock Option Plan. See "Security Ownership of Certain Beneficial Owners and
Management--Compensation of Directors."
(8) Comprised of options issued pursuant to Emerson's 1994 Stock Compensation
Program. Options vest in annual increments of one-third, commencing one year
from the date of grant, and their exercise is contingent on continued employment
with Emerson.
(9) Includes 1,100,000 shares of common stock subject to unexercised stock
options which were exercisable within 60 days under Emerson's Stock Compensation
Program. Excludes options to purchase an aggregate of 275,000 shares of common
stock not currently exercisable within 60 days.
BOARD OF DIRECTORS AND COMMITTEES
Emerson's business is managed under the direction of our Board of
Directors. The Board meets during our fiscal year to review significant
developments affecting Emerson and to act on matters requiring Board approval.
The Board of Directors held six formal meetings during the fiscal year ended
March 31, 2000 ("Fiscal 2000") and acted by unanimous written consent three
times. During Fiscal 2000, each member of the Board participated in at least 80%
of all Board meetings and 100% of all committee meetings held during the period
for which he served as a director and/or committee member except Mr. Brown who
attended 50% of all Board meetings, 100% of all Audit Committee meetings and
none of the Compensation and Personnel Committee meetings.
The standing committees of our Board during Fiscal 2000 were the Audit
Committee, the Compensation and Personnel Committee, the Executive Committee and
the Special 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. Our Audit Committee, and each of its three members,
Messrs. Farnum (Chairman), Brown and Goodman, fulfills the requirements of the
NASD rules applicable to members of the American Stock Exchange with regard to
independence and qualification. The Audit Committee reviews the adequacy of
Emerson's internal system of accounting controls, confers with the independent
auditors concerning their examination of our books and records and recommends to
the Board the appointment of a firm of independent certified public accountants
to conduct audits of our accounts and affairs. During Fiscal 2000, the Audit
Committee met one time. Our Board of Directors has adopted a written charter for
its Audit Committee, a copy of which is included in this Proxy Statement as
Appendix A.
Compensation and Personnel Committee. Our Compensation and Personnel
Committee is presently comprised of Messrs. Brown (Chairman), Bunger and Farnum
(each of whom is a non-employee Director). The Committee (i) makes
recommendations to the full Board concerning remuneration arrangements for
senior executive management; (ii) administers our 1994 Stock Compensation
<PAGE>
Program; and (iii) makes such reports and recommendations, from time to time, to
the Board upon such matters as the Committee may deem appropriate or as may be
requested by the Board. During Fiscal 2000, the Compensation Committee met one
time. See "Executive Compensation and Other Information--Report of Compensation
and Personnel Committee".
Executive Committee. Our Executive Committee is presently comprised of
Messrs. Brown, Bunger, Farnum and Jurick (Chairman). Mr. Goodman is an alternate
Committee member. Subject to the provisions of the Company's By-Laws, the
Executive Committee has all of the power and authority of the full Board with
certain exceptions. During Fiscal 2000, the Executive Committee did not meet.
Special Committee. Our Special Committee, comprised of Messrs. Brown
and Goodman, was formed as part of a Stipulation and Order of Settlement, dated
June 11, 1996, between the Company, Mr. Jurick, FIN, GSE, Elision, Petra and
Donald Stelling (the "Stellings"), the Fidenas Liquidator and Barclays (the
"Settlement Agreement") to evaluate, and make recommendations to the Board
regarding, any offer to purchase the Settlement Shares which would result in a
change of control of Emerson as defined in Emerson's Senior Secured Credit
Facility and the Indenture governing the Debentures, as defined below. During
Fiscal 2000, the Special Committee did not meet and by Order, dated March 3,
2000, the U.S. District Court terminated the Settlement Agreement. See "Certain
Relationships and Related Transactions - Certain Outstanding Common Stock".
The Board of Directors did not have a standing nominating committee,
or any other committee performing similar functions during Fiscal 2000. Our
Board performed the functions customarily attributable to a nominating
committee.
Compensation of Directors
In Fiscal 2000, Emerson Directors who were not employees were paid
$10,000 per year; members of the Compensation and Personnel Committee were paid
an additional $5,000 per year; members of the Executive Committee were paid an
additional $5,000 per year; members of the Audit Committee were paid an
additional $7,500 per year; and members of the Special Committee were paid an
additional $2,500 per year. Accordingly, during Fiscal 2000, Messrs. Brown,
Bunger, Farnum and Goodman received $30,000, $20,000, $27,500 and $25,000,
respectively. All compensation paid to our directors is paid in quarterly
installments. No compensation is paid to Emerson employees in their capacity as
Director. Additionally, each director is eligible to participate in Emerson's
1994 Non-Employee Director Stock Option Plan.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Compensation of Executive Officers
The following table sets forth certain information regarding
compensation paid during each of our last three fiscal years to our Chief
Executive Officer and each of our other four most highly compensated Executive
Officers.
Summary Compensation Table
The following table summarizes for the years indicated the
compensation awarded to, earned by, or paid to the Executive Officers for
services rendered in all capacities to Emerson:
<PAGE>
<TABLE>
<CAPTION>
SECURI-
TIES
OTHER UNDER- ALL
ANNUAL LYING OTHER COMPEN-
NAME AND PRINCIPAL POSITION(S) FISCAL COMPENSATION OPTIONS SATION (2)
YEAR SALARY BONUS (1)
<S> <C> <C> <C> <C> <C> <C>
GEOFFREY P. JURICK 2000 $411,600 $ - $ 67,910 - $ -
CHAIRMAN OF THE 1999 411,600 - 108,145 - 4,844
BOARD, CHIEF 1998 321,407 - 125,208 - 13,059
EXECUTIVE OFFICER
AND PRESIDENT (3)
MARINO ANDRIANI 2000 385,000 557,562 8,400 225,000 14,679
PRESIDENT, EMERSON 1999 385,000 - 8,400 75,000 14,032
RADIO CONSUMER 1998 385,000 - 8,400 - 11,656
PRODUCTS CORPORATION (4)
JOHN J. RAAB 2000 210,000 30,000 8,400 - 10,544
EXECUTIVE VICE 1999 210,000 - 8,400 50,000 10,100
PRESIDENT - 1998 210,000 - 8,400 - 7,780
INTERNATIONAL (4)
ELIZABETH CALIANESE 2000 144,231 50,923 8,400 - 7,082
SENIOR VICE PRESIDENT - 1999 125,000 25,000 8,400 - 7,110
HUMAN RESOURCES, 1998 102,503 10,000 8,400 30,000 1,687
SECRETARY AND
GENERAL COUNSEL (4)
JOHN P. WALKER 2000 100,000 25,000 - - 2,400
EXECUTIVE VICE 1999 100,000 50,000 - - 2,400
PRESIDENT AND CHIEF 1998 107,692 50,000 - - 2,721
FINANCIAL OFFICER (5)
</TABLE>
(1) Other Annual Compensation consists of (i) car allowance and auto expenses
in the annual amount of $8,400, payable in equal monthly installments, to
Messrs. Andriani and Raab and Ms. Calianese in Fiscal 2000, 1999 and 1998,
respectively, and (ii) temporary lodging expenses and associated tax
gross-ups in the amount of $67,910, $108,145 and $125,208 for Mr. Jurick,
for Fiscal 2000, 1999 and 1998, respectively.
(2) All Other Compensation consists of Emerson's contribution to our 401(k)
employee savings plan, group health, life insurance and disability
insurance. In Fiscal 1998, we also paid $7,170 in premiums for a life
insurance policy for Mr. Jurick.
(3) The salary shown for Mr. Jurick includes our salary reimbursement from SSG
of $135,414 in Fiscal 1998 for services provided by Mr. Jurick to SSG.
<PAGE>
Pursuant to our Management Services Agreement with SSG ("Management
Services Agreement"), effective October 18, 1997 we reduced Mr. Jurick's
salary by $80,000 and are no longer reimbursed by SSG. See "Certain
Relationships and Related Transactions - Management Services Agreement".
(4) In November 1995, Mr. Raab was granted stock options to purchase 50,000
shares of common stock at an exercise price of $2.875 per share. In April
1996, Mr. Andriani was granted stock options to purchase 75,000 shares of
common stock at an exercise price of $2.563 per share and in October 1996,
Ms. Calianese was granted stock options to purchase 30,000 shares of common
stock at an exercise price of $ 2.25 per share. These options were
subsequently repriced to $1.00 and were reported as compensation in the
fiscal year they are repriced. In October, 1999, our Board authorized
granting Mr. Andriani stock options to purchase an additional 225,000
shares of common stock at an exercise price of $1.00 per share. Pursuant to
our Stock Compensation Plan, these options will vest in equal installments
over 3 years, commencing one year from the date of grant, and their
exercise is contingent on continued employment with Emerson.
(5) Effective January 1998, we no longer pay Mr. Walker's salary directly.
However, pursuant to the Management Services Agreement, we reimburse SSG
for Mr. Walker's salary and bonus per year. We reimbursed SSG in the
approximate amounts of $100,000 and $50,000 for each of Fiscal 2000 and
1999. See "Certain Relationships and Related Transactions - Management
Services Agreement".
Option Grants During 2000 Fiscal Year
<TABLE>
Potential Realizable
Value at Assumed
Annual Rates of Stock
Individual Grants Price Appreciation
for Option Term (2)
% of Total
Number Options Granted Exercise
of Options to Employees Price Per Expiration
Name Granted (1) in Fiscal 2000 Share Date 5% 10%
----------------------------- -------------- ------------------- -------------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
GEOFFREY P. JURICK - - - - - -
MARINO ANDRIANI 225,000 75% $1.00 01/21/10 $0 $0
JOHN J. RAAB - - - - - -
ELIZABETH J. CALIANESE - - - - - -
JOHN P. WALKER - - - - - -
</TABLE>
1. The stock options were granted under the 1994 Stock Compensation Program,
and, unless otherwise designated at the time of grant, are exercisable
commencing one year after the grant date in three equal annual
installments, with full vesting occurring on the third anniversary of the
date of the grant.
2. The dollar amounts under these columns are the result of calculations at
the assumed compounded market appreciation rates of 5% and 10% as required
by the Securities and Exchange Commission over a ten-year term and
therefore, are not intended to forecast possible future appreciation, if
any, of the stock price.
<PAGE>
Option Exercises During Fiscal 2000 and Fiscal 2000 Year End Holdings
The following table provides information related to options exercised by
our Executive Officers during Fiscal 2000 and the number and value of options
held at the end of our Fiscal 2000. We do not have any outstanding stock
appreciation rights.
Option Exercises During 2000 Fiscal Year and Fiscal Year - End Option Values
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
Shares at FY-End at FY-End
Acquired Value (#) ($)(1)
on Exercise Realized Exercisable/ Exercisable/
Name (#) ($) Unexercisable Unexercisable
------------------------- ------------- ------------ ------------------ ------------------------------
<S> <C> <C> <C> <C> <C> <C>
Geoffrey P. Jurick --- --- 600,000/0 $ 0/$ 0
Marino Andriani --- --- 75,000/225,000 $ 0/$ 0
John J. Raab --- --- 50,000/0 $ 0/$ 0
Elizabeth J. Calianese --- --- 30,000/0 $ 0/$ 0
John P. Walker --- --- 200,000/0 $ 0/$ 0
</TABLE>
(1) The closing price for our common stock as reported by the American Stock
Exchange on March 31, 2000 was $.75. Value is calculated on the basis of the
difference between $.75 and the option exercise price of "in the money" options,
multiplied by the number of shares of our common stock underlying the option. As
of March 31, 2000, none of the outstanding options were exercisable at a share
price below $.75.
Certain Employment Contracts
On August 13, 1992, Geoffrey P. Jurick, our Chairman, Chief Executive
Officer and President, entered into five-year employment agreements ("Jurick
Employment Agreements") with Emerson and two of its wholly-owned subsidiaries,
Emerson Radio (Hong Kong) Ltd. and Emerson Radio International Ltd. (formerly
Emerson Radio (B.V.I.) Ltd.) providing for an aggregate annual compensation of
$490,000 as of April 1, 1995. Effective October 18, 1997, Mr. Jurick's
employment agreement with Emerson (but not the wholly owned subsidiaries) was
amended and Mr. Jurick's annual salary under the Jurick Employment Agreements
was reduced to $410,000. In addition to his base salary, the Jurick Employment
Agreements provided that Mr. Jurick was entitled to an annual bonus upon
recommendation by the Compensation and Personnel Committee of Emerson's Board of
Directors, subject to the final approval of the Emerson's Board of Directors. By
letter agreement dated April 16, 1997, the terms of the Jurick Employment
Agreements were extended until March 31, 2000. Pursuant to the Management
Services Agreement, SSG reimbursed Emerson for $125,444 and $46,527 in salary
payments made by us to Mr. Jurick in Fiscal 1999 and 1998, respectively, for the
benefit of SSG. The Management Services Agreement was amended as of October 18,
1997 and SSG no longer reimburses us for any of Mr. Jurick's salary payments,
but pays Mr. Jurick directly. See "Certain Relationships and Related
Transactions - Management Services Agreement".
Subject to certain conditions, each of the Jurick Employment
Agreements granted severance benefits, through expiration of the respective
<PAGE>
terms of each of such agreements, commensurate with Mr. Jurick's base salary, in
the event that his employment terminated due to permanent disability, without
cause or as a result of constructive discharge (as defined therein). In the
event that Mr. Jurick's employment terminated due to termination for "cause",
because Mr. Jurick unilaterally terminated the agreements or for reasons other
than constructive discharge or permanent disability, the agreements provided
that Mr. Jurick would only be entitled to base salary earned through the
applicable date of termination. Mr. Jurick's employment agreements are presently
expired.
Compensation Committee Interlocks and Insider Participation
Geoffrey P. Jurick serves as Chairman of the Board and Chief Executive
Officer of Emerson and SSG. John P. Walker serves as our Executive Vice
President and Chief Financial Officer and as President and a Director of SSG.
Mr. Bunger, who is a Director of Emerson and SSG, serves on the Compensation
Committees of both companies. Geoffrey P. Jurick was also a member of our Board
during Fiscal 2000 and participated in deliberations concerning senior executive
officer compensation.
Report of Compensation and Personnel Committee
The Compensation and Personnel Committee of our Board (the
"Compensation Committee") contains three non-employee Directors and oversees our
senior executive compensation strategy. The strategy is implemented through
policies designed to support the achievement of our business objectives and the
enhancement of stockholder value. Our Compensation Committee reviews, on an
ongoing basis, all aspects of senior executive compensation and its policies
support the following objectives:
o The reinforcement of management's concern for enhancing stockholder
value.
o The attraction, hiring and retention of qualified executives.
o The provision of competitive compensation opportunities for exceptional
performance.
The basic elements of our senior executive compensation strategy are:
Base salary. Base salaries for our senior executive managers
represent compensation for the performance of defined functions and
assumption of defined responsibilities. The Compensation Committee
reviews each senior executive's base salary on an annual basis. In
determining salary adjustments, the Compensation Committee considers
our growth in earnings and revenues and the 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
<PAGE>
current salary in relation to the expected level of pay for the
position. Our Compensation Committee exercises its judgment based upon
the above criteria and does not apply a specific formula or assign a
weight to each factor considered.
Annual incentive compensation. At the beginning of each year,
our Board establishes our performance goals for that year, which may
include target increases in sales, net income and earnings per share,
as well as more subjective goals with respect to marketing, product
introduction and expansion of customer base.
Long-term incentive compensation. Our long-term incentive
compensation for management and employees consists of the 1994 Stock
Compensation Program.
Our Compensation Committee views the granting of stock options as a
significant method of aligning management's long-term interests with those of
the stockholders and determines awards to executives based on its evaluation of
criteria that include responsibilities, compensation, past and expected
contributions to the achievement of Emerson's long-term performance goals. Stock
options are designed to focus executives on our long-term performance by
enabling them to share in any increases in value of our stock.
Our Compensation Committee encourages executives, individually and
collectively, to maintain a long-term ownership position in our stock. The
Compensation Committee believes this ownership, combined with a significant
performance-based incentive compensation opportunity, forges a strong linkage
between our executives and stockholders.
Compensation of the Chief Executive Officer
Mr. Geoffrey P. Jurick is our Chief Executive Officer, Chairman of the
Board of Directors and President. The Compensation Committee considered the
results in all aspects of our business, and the terms of Mr. Jurick's employment
agreement with Emerson, in its review of his performance during Fiscal 2000.
Mr. Jurick's annual compensation for Fiscal 2000, comprised of annual
base salary of $411,600, is consistent with our Committee's targeted annual
compensation level and with the limitations previously established by the
Settlement Agreement. See "Certain Relationships and Related Transactions -
Certain Outstanding Common Stock". Mr. Jurick's salary from us was reduced by
$80,000 in Fiscal 1998 as a result of SSG paying him directly. See "Certain
Relationships and Related Transactions - Management Services Agreement". The
terms and conditions of Mr. Jurick's employment agreement are discussed above.
See "Executive Compensation and Other Information - Certain Employment
Contracts".
<PAGE>
Policy on Qualifying Compensation
Our Board has considered the potential impact of Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code"). Section 162(m) generally
provides that, for tax years beginning on or after January 1, 1994, a public
company'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 our covered employees is below the $1 million threshold, the Board
believes that Section 162(m) will not reduce the federal income tax deduction
available to Emerson. Emerson's policy is to qualify, to the extent reasonable,
our 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 Emerson's success. Consequently, the Board
recognizes that the loss of a tax deduction could be necessary in some
circumstances.
This report is submitted by the members of the Board of Directors and the
Compensation and Personnel Committee that were in existence at the end of Fiscal
2000.
Board of Directors Compensation and Personnel Committee
Geoffrey P. Jurick, Chairman Robert H. Brown, Jr., Chairman
Robert H. Brown, Jr. Peter G. Bunger
Peter G. Bunger Jerome H. Farnum
Jerome H. Farnum
Stephen H. Goodman
This report shall not be deemed incorporated by reference in any
filing by Emerson under the Securities Act of 1933 or the Securities Exchange
Act of 1934 except to the extent that Emerson specifically incorporates this
information by reference, and shall not otherwise be deemed filed under either
act.
COMPARISON OF CUMULATIVE TOTAL RETURN
Share Price Performance Graph
The following graph shows a comparison of cumulative total returns on
our common stock for the period April 1, 1995 to March 31, 2000, with the
cumulative total return over the same period for the American Stock Exchange and
a peer group of companies. Companies used for the peer group are Cobra
Electronics Corp., Matsushita Electric Industrial Co. Ltd., Recoton Corp. and
Sony Corp. In selecting companies to be part of the peer group, we focus on
publicly traded companies that design and/or distribute consumer electronic
products, which have characteristics similar to ours in terms of one or more of
the following: type of product, distribution channels, sourcing or sales volume.
The comparison assumes the investment of $100 in our common stock on April 1,
1995 and reinvestment of all dividends. The information in the graph was
provided by Media General Financial Services ("MGFS").
<PAGE>
COMPARISON OF CUMULATIVE TOTAL RETURN OF
EMERSON RADIO CORP., PEER GROUP INDEX AND BROAD MARKET
INDEX
FISCAL YEAR ENDING
Company/Index/Market 1995 1996 1997 1998 1999 2000
Emerson Radio Corp 100 82.00 34.00 14.00 24.00 24.00
Peer Group Index 100 111.86 114.26 127.66 146.39 329.90
Amex Market Index 100 120.89 122.11 159.50 150.93 231.44
The Customer Selected Stock List is made up of the following securities:
Cobra Electronics Corp.
Matsushita Elec. Ind. Corp.
Recoton Corp.
Sony Corp.
The stock price performance depicted in the above graph is not necessarily
indicative of future price performance. The Share Price Performance Graph will
not be deemed to be incorporated by reference in any filing by Emerson under the
Securities Act or the Exchange Act except to the extent that Emerson
specifically incorporates the graph by reference.
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Relationship with Sport Supply Group, Inc.
As of July 10, 2000 and as determined by the most recent SSG documents
filed with the SEC, Emerson and Emerson Radio (Hong Kong) Ltd. ("Emerson HK"),
our wholly owned subsidiary, owned 2,578,500 shares, or approximately 35.4%, of
the issued and outstanding shares of SSG common stock. Emerson also owns 5-year
warrants to acquire an additional 1,000,000 shares of SSG common stock at an
exercise price of $7.50 per share, subject to standard anti-dilution adjustments
("Warrants"). If Emerson exercises all of the Warrants, we will own
approximately 43.2% of the issued and outstanding shares of SSG common stock.
SSG's Board of Directors now includes the following people that are
associated with Emerson: Geoffrey P. Jurick, Chairman, Chief Executive Officer
and President of Emerson and Chairman and Chief Executive Officer of SSG; John
P. Walker, Executive Vice President and Chief Financial Officer of Emerson and
President and a Director of SSG; and Peter G. Bunger, a Director of both
companies and member of the Compensation Committee of each Company. Messrs.
Jurick and Walker split their time between the two companies.
Management Services Agreement - Sport Supply Group, Inc.
The Management Services Agreement between Emerson and SSG implements a
program whereby SSG performs certain services for us in exchange for a fee. The
services include payroll, banking, computer/management information systems,
payables processing, warehouse services (including subleasing warehouse storage
space), provision of office space and financial management services. The
Management Services Agreement may be terminated by either SSG or us on sixty
(60) days' prior notice. We were billed $488,000, $636,000 and $272,000 for
services provided pursuant to this agreement during Fiscal 2000, 1999 and 1998
respectively. Effective October 18, 1997, SSG began paying Mr. Jurick directly
for his services. Effective January 15, 1998, we began reimbursing SSG for base
salary and bonus paid to Mr. Walker for our benefit in lieu of paying Mr. Walker
directly. Emerson billed SSG approximately $135,000 towards Mr. Jurick's salary
during Fiscal 1998.
Certain Outstanding Common Stock
Pursuant to our bankruptcy restructuring plan, on March 31, 1994, 30
million shares of Emerson's common stock were issued to GSE, FIN and Elision
(collectively, the "Affiliated Entities"), affiliates of Geoffrey P. Jurick, our
Chairman of the Board, Chief Executive Officer and President. On June 11, 1996,
as part of a global settlement of all litigation between Emerson, the Stellings,
the Fidenas Liquidator, Barclays, Mr. Jurick and the Affiliated Entities, the
<PAGE>
parties executed the Settlement Agreement in the U. S. District Court which
terminated substantially all litigation between the parties and provided for,
among other things, the payment by Mr. Jurick and the Affiliated Entities of
$49.5 million to the Stellings, the Fidenas Liquidator and Barclays (the
"Creditors"), to be paid from the proceeds of the sale of 29.2 million shares of
Emerson common stock (the "Settlement Shares") owned by the Affiliated Entities.
In addition, Mr. Jurick was to have been paid the sum of $3.5 million from the
sale of the Settlement Shares. The Settlement Shares were deposited with the
Court in two pools: Pool A consisting of 15.3 million shares and Pool B
consisting of the number of shares for which Mr. Jurick must retain beneficial
ownership of voting power to avoid an event of default arising out of a change
of control pursuant to the terms of Emerson's Loan and Security Agreement
("Senior Secured Credit Facility") with a U.S. financial institution (the
"Lender") and/or the Indenture ("Indenture") governing our 8 1/2% Senior
Subordinated Convertible Debentures Due 2002 (the "Debentures").
On March 3, 2000, pursuant to the request of the Creditors, the U.S.
District Court terminated the Settlement Agreement upon the ground that there
was no reasonable prospect that the goals contemplated by the Settlement
Agreement could be accomplished and scheduled a hearing to determine, among
other things, the rights and remedies of the various parties. On April 19, 2000,
the Court ruled that the Settlement Shares were to be distributed to the
Creditors as follows: the Fidenas Liquidator - 44.44%, Stelling - 42.42% and
Barclays - 13.14%. The Creditors had previously agreed that Mr. Jurick retain
control of all beneficial ownership required by the Senior Secured Credit
Facility and/or the Indenture to avoid an event of default arising out of a
change in control.
On May 25, 2000, the Court implemented, in part, its termination of
the Settlement Agreement by approving the transactions contemplated in the
Option Agreement whereby it was agreed that: 1.) the Settlement Shares would be
reregistered as follows: the Fidenas Liquidator - 5,402,600, the Fidenas
Liquidator - 3,164,340, Stelling - 8,177,533, Barclays - 1,597,400, Barclays -
935,669 and Mr. Jurick - 9,875,000 (Mr. Jurick's shares represent the amount
required to be held by Mr. Jurick pursuant to our Senior Secured Credit Facility
and/or the Indenture); 2.) the Company would purchase, pro rata, an aggregate of
7,000,000 shares from the Fidenas Liquidator and Barclays for $6 million
("Initial Purchase"); 3.) Mr. Jurick's shares, the Fidenas Liquidator's and
Barclays' remaining shares, Consent Judgments and their Releases would be
deposited with the Court and Mr. Jurick granted the Proxy to vote the Fidenas
Liquidator's and Barclays' shares so deposited; 4.) the Fidenas Liquidator and
Barclays would grant Emerson (or Jurick, if Emerson was unable or unwilling to
exercise) a one year option to purchase, pro rata, an additional 4,100,009
shares (the "Creditor Option Shares") at a price of $1.34 per share; 5.) Emerson
(or Jurick) would have the right, at its sole option, to extend the option for
an additional one year on each of the first and second year anniversaries of the
Initial Purchase upon notice and payment to the Fidenas Liquidator and Barclays,
pro rata, of $500,000 for the first extension and $2.55 million for the second
extension. (None of the payment for the first extension but $2 million of the
payment for the second extension would be credited to the purchase price of the
Creditor Option Shares upon exercise of the option); 6.) in the event the option
was exercised, the Fidenas Liquidator and Barclays would deliver to Emerson (or
Jurick) stock certificates representing their Creditor Option Shares and would
deliver to Mr. Jurick their Consent Judgments, Releases and 57.58% of Mr.
Jurick's shares; and, 7.) in the event the option was not exercised or an option
extension payment not timely made, upon filing of a Certification, the Fidenas
<PAGE>
Liquidator and Barclays would be entitled to the immediate receipt of their
Releases and Consent Judgments. Additionally, 57.58% of Mr. Jurick's shares
would be distributed, pro rata, to the Fidenas Liquidator and Barclays upon the
earlier of the maturity or payment date of the Debentures. Other than the
division of the Settlement Shares, the Court has not yet implemented the
termination of the Settlement Agreement as to Stelling.
Future Transactions and Loans
Emerson has adopted a policy that all future affiliated transactions
and loans will be made or entered into on terms no less favorable to us than
those that can be obtained from unaffiliated third parties. In addition, all
future affiliated transactions and loans, and any forgiveness of loans, must be
approved by a majority of the independent outside members of our Board who do
not have an interest in the transactions.
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (we
refer to it as "Section 16(a)") requires our Officers and Directors, and persons
who own more than 10% of a registered class of Emerson's equity securities to
file reports of ownership and changes in ownership with the SEC and the American
Stock Exchange. Officers, Directors and greater than 10% stockholders are
required by certain regulations to furnish us with copies of all Section 16(a)
forms they file.
Based solely on its review of the copies of such forms received by us,
we believe that, during Fiscal 2000, our Officers, Directors and greater than
10% beneficial owners have complied with all applicable filing requirements with
respect to our equity securities other than a Form 3 with respect to the
beneficial ownership of The Chase Manhattan Bank.
STOCKHOLDER PROPOSALS
A proper proposal submitted by one of our stockholders in accordance
with applicable rules and regulations for presentation at our next annual
meeting that is received at our principal executive office by April 15, 2001
will be included in our Proxy Statement and form of proxy for that meeting. If
you desire to bring a proposal before the next annual meeting and such proposal
is not timely submitted for inclusion in Emerson's Proxy Statement, you can
still submit the proposal if it received by the Company no later than June 1,
2001.
<PAGE>
PERSONS MAKING THE SOLICITATION
The enclosed proxy is solicited on behalf of our Board. We will pay
the cost of soliciting proxies in the accompanying form. Our officers may
solicit proxies by mail, telephone, telegraph or fax. Upon request, we will
reimburse brokers, dealers, banks and trustees, or their nominees, for
reasonable expenses incurred by them in forwarding proxy material to beneficial
owners of our shares of common stock. We have retained the services of American
Stock Transfer & Trust Company to solicit proxies by mail, telephone, telegraph
or personal contact. The estimated cost of the solicitation will be
approximately $20,000 plus out-of-pocket expenses.
INDEPENDENT PUBLIC ACCOUNTANTS
Ernst & Young LLP, independent certified public accountants, has been
selected by our Board as our 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.
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
We will provide a copy of our Annual Report on Form 10-K for the
fiscal year ended March 31, 2000 (exclusive of exhibits), without charge, to
each person to whom a copy of this Proxy Statement is delivered, upon written or
oral request. Requests should be directed to Investor Relations (Attention:
Elizabeth J. Calianese, Senior Vice President-Human Resources, General Counsel
and Secretary), Emerson Radio Corp., Nine Entin Road, Parsippany, New Jersey
07054.
By Order of the Board of Directors,
ELIZABETH J. CALIANESE
Senior Vice President-Human Resources,
General Counsel and Secretary
July 11, 2000
<PAGE>
APPENDIX A
AUDIT COMMITTEE OF THE
BOARD OF DIRECTORS
OF
EMERSON RADIO CORP.
AUDIT COMMITTEE CHARTER
Organization
This charter governs the operations of the Audit Committee of Emerson Radio
Corp. ("Emerson"). The Committee shall review and reassess the charter at least
annually and obtain the approval of the Board of Directors. The Committee shall
be appointed by the Board of Directors and shall comprise at least three
directors, each of whom are independent of management and Emerson. Members of
the Committee shall be considered independent if they have no relationship that
may interfere with the exercise of their independence from management and
Emerson. All Committee members shall be financially literate, [or shall become
financially literate within a reasonable period of time after appointment to the
Committee,] and at least one member shall have accounting or related financial
management expertise.
Statement of Policy
The Audit Committee shall provide assistance to the Board of Directors in
fulfilling their oversight responsibility to the shareholders, potential
shareholders, the investment community, and others relating to Emerson's
financial statements and the financial reporting process, the systems of
internal accounting and financial controls, the internal audit function, the
annual independent audit of Emerson's financial statements, and the legal
compliance and ethics programs as established by management and the Board. In so
doing, it is the responsibility of the Committee to maintain free and open
communication between the Committee, independent auditors, the internal auditors
and Emerson's management. In discharging its oversight role, the Committee is
empowered to investigate any matter brought to its attention with full access to
all of Emerson's books, records, facilities, and personnel and the power to
retain outside counsel, or other experts for this purpose.
Responsibilities and Processes
The primary responsibility of the Audit Committee is to oversee Emerson's
financial reporting process on behalf of the Board and report the results of
their activities to the Board. Management is responsible for preparing Emerson's
financial statements, and the independent auditors are responsible for auditing
those financial statements. The Committee in carrying out its responsibilities
believes its policies and procedures should remain flexible, in order to best
react to changing conditions and circumstances. The Committee should take the
<PAGE>
appropriate actions to set the overall corporate "tone" for quality financial
reporting, sound business risk practices, and ethical behavior.
The following shall be the principal recurring processes of the Audit Committee
in carrying out its oversight responsibilities. The processes are set forth as a
guide with the understanding that the Committee may supplement them as
appropriate.
o The Committee shall have a clear understanding with management and the
independent auditors that the independent auditors are ultimately
accountable to the Board and the Audit Committee, as representative of
Emerson's shareholders. The Committee shall have the ultimate authority and
responsibility to evaluate and, where appropriate, replace the independent
auditors. The Committee shall discuss with the auditors their independence
from management and Emerson and the matters included in the written
disclosures required by the Independence Standards Board. Annually, the
Committee shall review and recommend to the Board the selection of
Emerson's independent auditors, subject to shareholders' approval.
o The Committee shall discuss with the internal auditors and the independent
auditors the overall scope and plans for their respective audits including
the adequacy of staffing and compensation. Also, the Committee shall
discuss with management, the internal auditors, and the independent
auditors the adequacy and effectiveness of the accounting and financial
controls, including Emerson's system to monitor and manage business risk,
and legal and ethical compliance programs. Further, the Committee shall
meet separately with the internal auditors and the independent auditors,
with and without management present, to discuss the results of their
examinations.
o The Committee shall review the interim financial statements with management
and the independent auditors prior to the filing of Emerson's Quarterly
Report on Form 10-Q. Also, the Committee shall discuss the results of the
quarterly review and any other matters required to be communicated to the
Committee by the independent auditors under generally accepted auditing
standards. The chair of the Committee may represent the entire Committee
for the purposes of this review.
o The Committee shall review with management and the independent auditors the
financial statements to be included in Emerson's Annual Report on Form 10-K
(or the annual report to shareholders if distributed prior to the filing of
Form 10-K), including their judgment about the quality, not just
acceptability, of accounting principles, the reasonableness of significant
judgments, and the clarity of the disclosures in the financial statement.
Also, the Committee shall discuss the results of the annual audit and any
other matters required to be communicated to the Committee by the
independent auditors under generally accepted auditing standards.
<PAGE>
EMERSON RADIO CORP.
Board of Directors Proxy for the Annual Meeting
of Stockholders at 1:00 p.m. (local time), Thursday, August 10, 2000
Sheraton Parsippany Hotel
199 Smith Road
Parsippany, New Jersey 07054
The undersigned Stockholder of Emerson Radio Corp. (the "Company")
hereby appoints Geoffrey P. Jurick and John P. Walker, or either 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)
================================================================================
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Stockholders
EMERSON RADIO CORP.
AUGUST 10, 2000
Please Detach and Mail in the Envelope Provided
--------------------------------------------------------------------------------
X
--------------------------------------------------------------------------------
Please mark your
votes as in this
example.
FOR all nominees listed WITHHOLD AUTHORITY
at right (except as provided to vote for all nominees
to the contrary below) at right
--------------------------------------------------------------------------------
1. To elect five Nominees:
directors for a Geoffrey P. Jurick
one-year term Robert H. Brown, Jr.
Peter G. Bunger
Jerome H. Farnum
Stephen H. Goodman
INSTRUCTIONS: To withhold authority to vote for any individual nominee, write
that nominee's name in 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 2000 Annual Report and Notice of Meeting and
Proxy Statement, dated July 11, 2000, is hereby acknowledged.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD USING THE ENCLOSED ENVELOPE.
PLEASE SIGN, DATE AND MAIL TODAY.
SIGNATURE__________________________________ DATE_____________________________
SIGNATURE__________________________________ DATE_____________________________
IF HELD JOINTLY
NOTE: (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.)
