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-11(c) or 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 transactions 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) Date Filed:
EMERSON RADIO CORP.
Nine Entin Road
P.O. Box 430
Parsippany, New Jersey 07054-0430
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 24, 2000
As a stockholder of Emerson Radio Corp. (the "Company"), you are hereby
given notice of and invited to attend in person or by proxy the Annual Meeting
of Stockholders of the Company to be held at Bent Tree Country Club, 5201
Westgrove Drive, Dallas, Texas 75248, on Thursday, February 24, 2000 at 1:00
p.m. (Central Standard Time), for the following purposes:
1. To elect five directors for a one-year term; and
2. To transact such other business as may properly come before the
meeting and any adjournment(s) thereof.
The Board of Directors has fixed the close of business on January 12, 2000
as the record date (the "Record Date") for the determination of stockholders
entitled to notice of and to vote at such meeting and any adjournment(s)
thereof. Only stockholders of record at the close of business on the Record
Date are entitled to notice of and to vote at such meeting. 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, management desires to have the maximum
representation at the meeting and respectfully requests 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. A proxy may
be revoked by a stockholder any time prior to its use as specified in the
enclosed proxy statement.
By Order of the Board of Directors
ELIZABETH J. CALIANESE,
Vice President-Human Resources
and Secretary
Parsippany, New Jersey
January 13, 2000
YOUR VOTE IS IMPORTANT.
PLEASE EXECUTE AND RETURN PROMPTLY THE
ENCLOSED PROXY CARD IN THE ENVELOPE PROVIDED HEREIN.
EMERSON RADIO CORP.
_____________________
PROXY STATEMENT
_____________________
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 24, 2000
_____________________
To Our Stockholders:
This Proxy Statement is furnished to stockholders of Emerson Radio Corp.
(the "Company" or "Emerson") for use at the Annual Meeting of Stockholders to be
held at the date, time and place and for the purposes set forth in the
accompanying Notice of Annual Meeting of Stockholders, or at any adjournment or
adjournments thereof (the "Annual Meeting"). The enclosed proxy is solicited on
behalf of the Board of Directors of the Company and is subject to revocation at
any time prior to the voting of the proxy. Unless a contrary choice is
indicated, all duly executed proxies received by the Company will be voted in
accordance with the instructions set forth on the back side of the proxy card.
The record of stockholders entitled to vote at the Annual Meeting was taken at
the close of business on January 12, 2000 (the "Record Date"). The approximate
date on which this Proxy Statement and the enclosed proxy are first being sent
or given to stockholders is January 14, 2000.
VOTING PROCEDURES AND REVOCABILITY OF PROXIES
The accompanying proxy card is designed to permit each stockholder of
record at the close of business on January 12, 2000 to vote in the election of
directors. The proxy card provides space for a stockholder to vote in favor of
or to withhold voting for the nominees for the Board of Directors. The election
of directors will be decided by a plurality vote.
The holders of a majority of the outstanding shares of common stock, par
value $.01 per share (the "Common Stock") entitled to vote at the Annual
Meeting, 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. Broker nonvotes are counted for purposes of determining the presence or
absence of a quorum for the transaction of business. A broker nonvote will have
no effect on the outcome of the election of directors. Stockholders are urged
to sign the accompanying form of proxy and return it promptly.
When a signed card is returned with choices specified with respect to
voting matters, the shares represented are voted by the proxies designated on
the proxy card in accordance with the stockholder's instructions. The proxies
for the stockholders are Geoffrey P. Jurick and John P. Walker. A stockholder
desiring to name another person as his or her proxy may do so by crossing out
the name of the designated proxies and inserting the name(s) of such other
person(s) to act as his or her proxy(ies). In that case, it will be necessary
for the stockholder to sign the proxy card and deliver it to the person named as
his or her proxy and for the person so named to be present and vote at the
Annual Meeting. Proxy cards so marked should not be mailed to the Company.
If a signed proxy card is returned and the stockholder has made no
specifications with respect to voting matters, the shares will be voted for the
election of the five nominees for director and, at the discretion of the
proxies, on any other matter that may properly come before the Annual Meeting or
any adjournment(s). Valid proxies will be voted at the Annual Meeting and at
any adjournment in the manner specified.
Any stockholder of the Company has the unconditional right to revoke his or
her proxy at any time prior to the voting thereof by any act inconsistent with
the proxy, including notifying the Secretary of the Company in writing,
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 the Company at or prior to the
Annual Meeting.
The total issued and outstanding capital stock of the Company as of January
12, 2000 consisted of 47,828,215 shares of Common Stock. Each share of Common
Stock is entitled to one vote.
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
stockholders or until his successor is elected and qualified. The election of
directors will be decided by a plurality vote. All nominees have consented to
serve if elected. If any nominee becomes unable to serve, the shares
represented by all valid proxies will be voted for the election of such
substitute as the Board may recommend, the Board may reduce the number of
directors to eliminate the vacancy, or the Board may fill the vacancy at a later
date after selecting an appropriate nominee. Management has no reason to
believe that any of the nominees named below will be unable to serve.
Nominations for election to the Board of Directors may be made by the Board
of Directors, a nominating committee appointed by the Board of Directors or by
any stockholder entitled to vote for the election of directors. Nominations made
by stockholders must be made by written notice to the Secretary of the Company
at its corporate offices in Parsippany, New Jersey. Such notice shall 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 Common Stock of the Company 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 (the "Exchange Act"). Any such recommendation must be accompanied by a
written statement from the individual giving his or her consent to be named as a
candidate and, if nominated and elected, to serve as a director.
The nominees named below were nominated for election to the Board of
Directors of the Company by the current Board of Directors. All nominees are
currently directors of the Company. The name, age (as of January 12, 2000),
business experience and public directorships of each nominee for director are as
follows:
<TABLE>
<CAPTION>
Year
First
Became
Name Age Director Principal Occupation or Employment (1)
<S> <C> <C> <C>
Robert H. Brown, Jr. 46 1992 President, Chief Executive Officer of
Frost Securities, Inc. (2)
Peter G. Bunger 59 1992 Consultant(3)
Jerome H. Farnum 64 1992 Consultant(4)
Stephen H. Goodman 55 1999 President, Chief Executive Officer of
The Singer Company, N.V.(5)
Geoffrey P. Jurick 58 1990 Chairman of the Board, Chief Executive
Officer and President of the Company(6)
</TABLE>
(1) Each of the nominees has held the position listed, or a similar position
with the same or an affiliated organization, for at least the last five years,
except as otherwise noted herein.
(2) Robert H. Brown, Jr. has been a Director since July 1992. Since January
1999, Mr. Brown has been President and Chief Executive Officer of Frost
Securities, Inc., an investment banking firm. From July 1998 to January 1999,
Mr. Brown was President of RHB Capital, LLC. From January 1990 to July 1998,
Mr. Brown 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, Mr. Brown has been a Director of Claimsnet.com,
which is traded on the Nasdaq Stock Market. From May 1993 through March 1999,
Mr. Brown served as a Director of Stevens Graphics Corp., which is traded on the
American Stock Exchange.
(3) Peter G. Bunger has been a Director since July 1992. Since 1990, Mr.
Bunger has been a consultant with Savarina AG, engaged in the business of
portfolio management monitoring in Zurich, Switzerland. Since October 1992, Mr.
Bunger has served as Director of Savarina AG, and since 1992, as Director of
ISCS, a computer software company. Since December 1996, Mr. Bunger has served as
a Director of Sport Supply Group, Inc. ("SSG"), whose securities are traded on
the New York Stock Exchange. The Company beneficially owns approximately 40% of
the issued and outstanding common shares of SSG. See "Certain Relationships and
Related Transactions".
(4) Jerome H. Farnum has been a Director since July 1992. Since July 1994, Mr.
Farnum has been an independent consultant. From 1979 until 1994, Mr. Farnum
served as 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.
(5) Stephen H. Goodman has been a Director since January 1999. Since January
1998, he has been President, Chief Executive Officer and a Director of the
Singer Company, N.V. ("Singer"), an international manufacturer and distributor
of consumer and industrial sewing machines and a global retailer and distributor
of other consumer durable product, the common stock of which is listed on the
New York Stock Exchange. From March 1986 to December 1997, Mr. Goodman 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. Mr. Goodman is also a Director of a
number of Singer affiliates and subsidiaries. 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.
(6) Geoffrey P. Jurick has served as Director since September 1990, Chief
Executive Officer since July 1992, Chairman since December 1993 and President
since April 1997. Mr. Jurick also previously served as President from July 1993
to October 1994. Since December 1993, Mr. Jurick has served as a Director of
Fidenas International Limited, L.L.C. and its predecessor ("FIN") and, since May
1994, as an officer and general manager of Fidenas International. Mr. Jurick
has served as a Director and Chairman of GSE Multimedia Technologies Corporation
("GSE"), which is traded in the over-the-counter market, since May 1994. Since
March 1996, Mr. Jurick has served as Chairman of Elision International Ltd.
("Elision"). For more than the past five years, Mr. Jurick has held a variety
of senior executive positions with several of the entities comprising the
Fidenas group of companies ("Fidenas Group"). Since December 1996, Mr. Jurick
has served as a Director and Chairman of the Board and since January 1997 as
Chief Executive Officer of SSG. See "Certain Relationships and Related
Transactions".
THE BOARD OF DIRECTORS URGES STOCKHOLDERS TO VOTE "FOR"
EACH OF THE NOMINEES FOR DIRECTOR SET FORTH ABOVE
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth, as of January 12, 2000, the beneficial ownership
of (i) each current Director; (ii) each Officer named in the Summary
Compensation Table; (iii) the Directors and Executive Officers as a group and
(iv) each stockholder known to management of the Company to own beneficially
more than 5% of the Company's outstanding shares of Common Stock. Except as
otherwise indicated and based upon the Company's review of information as filed
with the Securities and Exchange Commission ("SEC"), the Company believes 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.
<TABLE>
<CAPTION>
Amount and Nature Percent of
Name and Address Of Beneficial Owners of Beneficial Ownership(1) Class
<S> <C> <C>
Geoffrey P. Jurick (2)(3)** 29,752,642 60.9%
Fidenas International Limited, L.L.C. 29,152,542 59.6%
831 Route 10
Suite 38, #113
Whippany, NJ 07981 (2)
Oaktree Capital Management 3,483,135 7.1%
550 South Hope St., 22nd Fl
Los Angeles, CA 90071 (7)
Robert H. Brown, Jr. (4)** 50,000 *
Peter G. Bunger (4)** 25,000 *
Jerome H. Farnum (4)** 25,000 *
Stephen H. Goodman** - *
Marino Andriani (5) 75,000 *
Elizabeth J. Calianese (5) 30,000 *
John J. Raab (5) 50,000 *
John P. Walker(5) 200,000 *
All Directors and Officers 30,207,642 61.8%
as a Group (9 persons) (6) ______________________________________________
</TABLE>
(*) Less than one percent
(**) Director (All current directors are nominees for director.)
(1) Based on 47,828,215 shares of Common Stock outstanding as of January 12,
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 3,714 shares of the Company's Series A
Preferred Stock, (ii) Common Stock issuable upon conversion of certain
warrants issued to the Company's former creditors, (iii) Common Stock
issuable upon exercise of outstanding options, which are not currently
exercisable within 60 days, (iv) Common Stock issuable upon conversion of
the Company's 8-1/2% Senior Subordinated Convertible Debentures Due 2002
(the "Debentures"), or (v) Common Stock issuable upon the exercise of
warrants granted to (a) Dresdner Securities (USA) Inc., or (b) First
Cambridge Securities Corporation ("First Cambridge"), and/or
representatives of First Cambridge it so designates or its beneficiaries.
(2) Consists of 15,552,542, 1,600,000 and 12,000,000 shares of Common Stock
which were held by FIN, Elision, and GSE, respectively. FIN is record
holder of an additional 847,458 shares of Common Stock and formerly held
such shares as nominee. The nominee relationship has been terminated and
FIN and Mr. Jurick disclaim beneficial ownership of such additional shares.
Mr. Jurick indirectly owns, through a controlled holding company,
approximately 95% of FIN. In addition, Mr. Jurick is the manager of FIN.
FIN owns approximately 14.3% of Elision. Mr. Jurick indirectly owns,
through certain holding companies and beneficial interests in affiliates, a
controlling interest in each of GSE and Elision. In accordance with a
Stipulation and Order of Settlement, dated June 11, 1996 (the
"Stipulation"), the shares of Common Stock held by Elision and GSE were
transferred and registered in the name of FIN. All of the shares owned by
FIN, GSE and Elision are subject to certain restrictions. See "Certain
Relationships and Related Transactions - Certain Outstanding Common Stock".
(3) Includes options to purchase 600,000 shares of Common Stock.
(4) Comprised of options issued pursuant to the Company's 1994 Non-Employee
Director Stock Option Plan. See "Security Ownership of Certain Beneficial
Owners and Management--Compensation of Directors."
(5) In July 1994, the Company granted stock options to purchase 200,000 shares
of Common Stock to Mr. Walker exercisable at an exercise price of $1 per
share. 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. In May 1998, the options granted to Mr. Raab and Mr.
Andriani were repriced to $1.00 per share. See "Board Report on Option
Repricing." In October 1999, the Company's Board of Directors 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.
The 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 the Company.
(6) Includes 1,055,000 shares of Common Stock subject to unexercised stock
options which were exercisable within 60 days under the Company's Stock
Compensation Program. Excludes options to purchase an aggregate of
225,000 shares of Common Stock not currently exercisable within 60 days.
(7) Based on information set forth in a Schedule 13D, dated May 22, 1998,
filed with the SEC by Oaktree Capital Management LLC ("Oaktree"), Kenneth
Grossman and OCM Principal Opportunities Fund, L. P. as amended by
Amendments 1 through 4, dated December 15, 1998, February 10, 1999,
August 3, 1999 and December 2, 1999, respectively. Consists of common
shares issuable upon conversion of the owner's holdings of the Company's
Debentures if such holdings were converted into shares of the Company's
Common Stock. The percentage of beneficial ownership assumes that the
common shares that would be issued upon conversion are outstanding.
Board Of Directors And Committees
The business of the Company is managed under the direction of the Board of
Directors. The Board meets during the Company's fiscal year to review
significant developments affecting the Company and to act on matters requiring
Board approval. The Board of Directors held six formal meetings and acted by
unanimous written consent five times during the fiscal year ended April 2, 1999
("Fiscal 1999"). During Fiscal 1999, each member of the Board participated in at
least 75% of all Board meetings and at least 50% of all committee meetings held
during the period for which he served as a Director and/or committee member.
During Fiscal 1999, the Board of Directors had an Audit Committee, a
Compensation and Personnel Committee, an Executive Committee and a 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. The Company's Audit Committee is presently comprised of
Messrs. Farnum (Chairman), Brown and Goodman. The Audit Committee recommends to
the Board of Directors the appointment of a firm of certified public accountants
to conduct audits of the Company's consolidated financial statements and
monitors the performance of such firm, reviews accounting objectives and
procedures of the Company and the findings and reports of the independent
certified public accountants, and makes such reports and recommendations to the
Board of Directors as it deems appropriate. During Fiscal 1999, the Audit
Committee met two times.
COMPENSATION AND PERSONNEL COMMITTEE. The Compensation and Personnel
Committee, which is presently comprised of Messrs. Brown (Chairman), Bunger and
Farnum (i) makes recommendations to the full Board concerning remuneration
arrangements for executive management; (ii) administers the Company's 1994 Stock
Compensation Program; and (iii) makes such reports and recommendations, from
time to time, to the Board of Directors upon such matters as the committee may
deem appropriate or as may be requested by the Board. During Fiscal 1999, the
Compensation Committee met two times. See "Executive Compensation and Other
Information--Report of Compensation and Personnel Committee".
EXECUTIVE COMMITTEE. The Executive Committee is presently comprised of
Messrs. Brown, Bunger, Farnum and Jurick (Chairman). Mr. Goodman is an
alternate member of the Committee. Subject to the provisions of the Company's
By-Laws, the Executive Committee has all of the power and authority of the full
Board of Directors except the following; 1.) declare or pay dividends; 2.) make,
alter or repeal any By-Law of the Company; 3.) elect, appoint or remove any
Directors; 4.) submit to shareholders any action that requires shareholder
approval; 5.) amend or repeal any resolution adopted by the Board; and 6.) take
any material action affecting the Company's operations including, but not
limited to, approval of mergers and acquisitions, purchase or disposal of major
Company assets, etc. During Fiscal 1999, the Executive Committee met one time.
SPECIAL COMMITTEE. The Special Committee, presently comprised of Messrs.
Brown and Goodman, was formed as part of the Stipulation to evaluate any offer
to purchase the Emerson Shares which would result in a Change of Control of the
Company as defined in the Company's Senior Secured Credit Facility and the
Indenture governing the Debentures, as defined below. During Fiscal 1999, the
Special Committee did not meet. 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 1999. The functions
customarily attributable to a nominating committee were performed by the Board
of Directors as a whole.
Compensation of Directors
Directors of the Company who are employees do not receive compensation for
serving on the Board. Non-employee Directors are paid $10,000 per annum;
members of the Compensation and Personnel Committee are paid an additional
$5,000 per annum; members of the Executive Committee are paid an additional
$5,000 per annum; members of the Audit Committee are paid an additional $7,500
per annum; and members of the Special Committee are paid an additional $2,500
per annum. All compensation for Directors is paid in quarterly installments.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Compensation of Executive Officers
The following executive compensation disclosures reflect all plan and non-
plan compensation awarded to, earned by, or paid to the named executive officers
of the Company. The "named executive officers" are the Company's Chief
Executive Officer (the "CEO"), regardless of compensation level, and the four
most highly compensated executive officers, other than the CEO, serving as such
on April 2, 1999. Where a named executive officer has served during any part of
Fiscal 1999, the disclosures reflect compensation for the full year in each of
the periods presented.
Summary Compensation Table
The following table summarizes for the years indicated the compensation
awarded to, earned by, or paid to the named executives for services rendered in
all capacities to the Company:
<TABLE>
<CAPTION>
OTHER SECURI- ALL
ANNUAL TIES OTHER
NAME AND COMPEN- UNDER- COMPEN-
PRINCIPAL FISCAL SATION LYING SATION
POSITION(S) YEAR SALARY BONUS (1) OPTIONS (2)
<S> <C> <C> <C> <C> <C> <C>
GEOFFREY P. JURICK 1999 $411,600 $ - $108,145 - $4,844
CHAIRMAN OF THE 1998 321,407 - 125,208 - 13,059
BOARD, CHIEF 1997 443,473 38,500 121,646 - 2,207
EXECUTIVE OFFICER
AND PRESIDENT (3)
MARINO ANDRIANI 1999 385,000 - 8,400 75,000 14,032
PRESIDENT, 1998 385,000 - 8,400 - 11,656
EMERSON RADIO 1997 387,100 - 9,808 75,000 11,352
CONSUMER PRODUCTS
CORPORATION(4)
JOHN J. RAAB 1999 210,000 - 8,400 50,000 10,100
SENIOR VICE 1998 210,000 - 8,400 - 7,780
PRESIDENT- 1997 212,100 - 8,638 50,000 11,237
INTERNATIONAL (4)
ELIZABETH J.CALIANESE 1999 125,000 25,000 8,400 - 7,110
VICE PRESIDENT- 1998 102,503 10,00 8,400 30,000 1,687
HUMAN RESOURCES, 1997 95,000 - 8,400 30,000 1,425
SECRETARY AND
DEPUTY GENERAL
COUNSEL (4)
JOHN P. WALKER 1999 100,000 50,000 - - 2,400
EXECUTIVE VICE 1998 107,692 50,000 - - 2,721
PRESIDENT AND 1997 179,166 40,000 18,816 - 7,089
CHIEF FINANCIAL
OFFICER (5)
</TABLE>
(1) Consists of (i) car allowance and auto expenses afforded to the listed
Company executive officers, including $13,063 paid to Mr. Walker in Fiscal
1997, and $8,400 to Mr. Andriani, Mr. Raab and Ms. Calianese, in Fiscal
1999, 1998 and 1997, respectively, (ii) temporary lodging expenses and
associated tax gross-ups in the amount of $108,145, $125,208 and $120,573
for Mr. Jurick, for Fiscal 1999, 1998 and 1997, respectively.
(2) Consists of the Company's contribution to its 401(k) employee savings plan,
group health, life insurance and disability insurance. Includes $7,170 in
premiums paid in Fiscal 1998 for a life insurance policy for Mr. Jurick.
(3) Includes reimbursement of salary from SSG of $135,414 and $46,527 for Mr.
Jurick in Fiscal 1998 and 1997, respectively. Pursuant to the Management
Services Agreement, between SSG and the Company (the "Management Services
Agreement"), effective October 18, 1997, the Company reduced Mr. Jurick's
salary by $80,000 and is 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. Mr. Raab's and Mr.
Andriani's options were repriced in Fiscal 1999 to $1.00 per share.
Repriced options are reported as compensation in the fiscal year they are
repriced. See "Board Report on Option Repricing". In October, 1999, the
Company's Board of Directors 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. The 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 the Company.
(5) Effective January 1998, the Company no longer pays Mr. Walker's salary
directly. However, pursuant to the Management Services Agreement, the
Company began reimbursing SSG for Mr. Walker's salary and bonus that on an
annualized basis is approximately equivalent to $100,000 and $50,000
respectively during Fiscal 1999 and 1998. See "Certain Relationships and
Related Transactions - Management Services Agreement".
Option Grants During 1999 Fiscal Year
There were no options granted to the named executives identified in the
Summary Compensation table during Fiscal 1999.
Option Exercises and Holdings
The following table provides information related to options exercised by
the named executive officers during Fiscal 1999 and the number and value of
options held at fiscal year end. The Company does not have any outstanding
stock appreciation rights.
Option Exercises During 1999 Fiscal Year and Fiscal Year - End Option Values
<TABLE>
<CAPTION>
Number of
Secur-
ities
Under-
lying Value of
Unexercised Unexercised
Options/ In-the-Money
Shares SARs Options/SARs
Acquired at FY-End at FY-End
On Value (#) ($)(1)
Exercise Realized Exercisable/ Exercisable/
Name (#) ($) Unexercisable Unexercisable
<S> <C> <C> <C> <C>
Geoffrey P. Jurick --- --- 600,000/0 $ 0/$ 0
John P.Walker --- --- 200,000/0 $ 0/$ 0
Marino Andriani --- --- 75,000/0 $ 0/$ 0
John J. Raab --- --- 50,000/0 $ 0/$ 0
Elizabeth J. Calianese --- --- 20,000/10,000 $ 0/$ 0
</TABLE>
(1) The closing price for the Company's Common Stock as reported by the
American Stock Exchange on April 2, 1999 was $ .81. Value is calculated on the
basis of the difference between the closing price and the option exercise price
of "in the money" options, multiplied by the number of shares of Common Stock
underlying the option.
Board Report on Option Repricing
The Board believes that the Company has taken constructive steps to improve
its performance and believes that hiring and retaining key employees is central
to implementing these measures. In furtherance of these goals, in May 1998, the
Board reduced the per share exercise price of options previously granted to Mr.
Andriani and Mr. Raab and, in October 1999, authorized granting Mr. Andriani the
right to purchase an additional 225,000 shares of Common Stock at $1.00 per
share. The Board concluded that the results achieved by these two executives
were the basis for the repricing of options granted to them and the granting of
further options to Mr. Andriani. No other provisions of these options were
altered.
In accordance with the rules of the SEC, this Option Repricing Report of
the Board of Directors is not intended to be "filed" or "soliciting Material"
or subject to Regulations 14A or 14C or Section 18 of the Exchange Act, or
incorporated into any other filing by the Company with the SEC.
The following table summarizes certain information concerning the repricing
of options to buy the Company's Common Stock held by all executive officers:
<TABLE>
<CAPTION>
Ten Year Option Repricing
Length
Of
Orig-
inal
Number Option
of Term
Secur- Remain-
ities Market ing
Under- Price of Exercise At
lying Stock at Price New Date
Date of Options Time of at Time of Exercise of Re-
Name Repricing Repriced Repricing Repricing Price pricing
<S> <C> <C> <C> <C> <C> <C>
ELIZABETH J. 05/13/97 30,000 $0.438 $2.25 $1.00 9.4 years
CALIANESE
MARINO 05/01/98 75,000 $0.438 $2.563 $1.00 7.9 years
ANDRIANI
JOHN J. RAAB 05/01/98 50,000 $0.438 $2.875 $1.00 7.5 years
</TABLE>
<TABLE>
<CAPTION>
COMPENSATION AND PERSONNEL
COMMITTEE BOARD OF DIRECTORS
<S> <C>
Robert H. Brown, Jr. Geoffrey P. Jurick
Peter G. Bunger Robert H. Brown, Jr.
Jerome H. Farnum Peter G. Bunger
Jerome H. Farnum
Stephen H. Goodman
</TABLE>
Certain Employment Contracts
On August 13, 1992, Geoffrey P. Jurick, Chairman, Chief Executive Officer
and President of the Company, entered into five-year employment agreements
("Jurick Employment Agreements") with the Company and two of its wholly-owned
subsidiaries, Emerson Radio (Hong Kong) Ltd. and Emerson Radio International
Ltd. (formerly Emerson Radio (B.V.I.) Ltd.) (hereinafter, collectively the
"Companies"), providing for an aggregate annual compensation of $490,000 as of
April 1, 1995. Effective October 18, 1997, Mr. Jurick's employment agreement
with the Company (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
provide that Mr. Jurick is entitled to an annual bonus upon recommendation by
the Compensation and Personnel Committee of the Company's Board of Directors,
subject to the final approval of the Company's Board of Directors. By letter
agreement dated April 16, 1997, the terms of the Jurick Employment Agreements
were extended until March 31, 2000. However, pursuant to the Settlement
Agreement, hereinafter defined, Mr. Jurick's cash compensation from the Company
and all subsidiaries and affiliates is limited to a total of $750,000 annually
until the Settlement Amount is paid. See "Certain Relationships and Related
Transactions." Pursuant to the Management Services Agreement, SSG reimbursed
the Company for $0, $125,444 and $46,527 in salary payments made to Mr. Jurick
in Fiscal 1999, 1998 and 1997, respectively, for the benefit of SSG. The
Management Services Agreement was amended as of October 18, 1997 to provide that
SSG will no longer reimburse the Company for any of Mr. Jurick's salary
payments, but will pay Mr. Jurick directly. See "Certain Relationships and
Related Transactions - Management Services Agreement".
Subject to certain conditions, each of the Jurick Employment Agreements
grants to Mr. Jurick severance benefits, through expiration of the respective
terms of each of such agreements, commensurate with Mr. Jurick's base salary, in
the event that his employment with the Companies terminates due to permanent
disability, without cause or as a result of constructive discharge (as defined
therein). In the event that Mr. Jurick's employment with the Companies
terminates due to termination for "cause", because Mr. Jurick unilaterally
terminates the agreements or for reasons other than constructive discharge or
permanent disability, Mr. Jurick shall only be entitled to base salary earned
through the applicable date of termination. If Mr. Jurick was to be terminated
due to permanent disability, without cause or as a result of constructive
discharge, the estimated dollar amount to be paid after April 2, 1999, based on
the terms of the employment contract, would be $410,000. However, the estimated
amount to be paid is subject to certain limitations under the Settlement
Agreement. See "Certain Relationships and Related Transactions - Certain
Outstanding Common Stock".
As of April 1, 1994, John P. Walker, Executive Vice President and Chief
Financial Officer, entered into a three-year employment agreement with the
Company providing for an annual compensation of $165,000 as of April 1, 1995 and
increased to $210,000 effective April 1, 1996, which was amended and extended in
April 1997 ("Walker Employment Agreement"). Effective January 15, 1998, the
Walker Employment Agreement was terminated and the Management Services Agreement
with SSG was amended to provide that the Company will reimburse SSG for a
portion of Mr. Walker's salary and bonus, if any, thus discontinuing the
Company's direct payments to Mr. Walker .
Compensation Committee Interlocks and Insider Participation
The Compensation and Personnel Committee, which is presently comprised of
Messrs. Brown, Bunger and Farnum, (i) makes recommendations to the full Board
concerning remuneration arrangements for executive management; (ii) administers
the Company's 1994 Stock Compensation Program; and (iii) makes such reports and
recommendations, from time to time, to the Board of Directors upon such matters
as the committee may deem appropriate or as may be requested by the Board.
Geoffrey P. Jurick serves as Chairman of the Board and Chief Executive
Officer of the Company and SSG. John P. Walker serves as Executive Vice
President and Chief Financial Officer of the Company and as President and
Director of SSG. Mr. Bunger, who is a Director of the Company and SSG, serves on
the Compensation Committees of the Company and SSG. Geoffrey P. Jurick was also
a member of the Company's Board of Directors during Fiscal 1999 and participated
in deliberations concerning executive officer compensation.
Report of Compensation and Personnel Committee
The Compensation and Personnel Committee of the Board of Directors (the
"Compensation Committee"), which contains three non-employee Directors, oversees
the Company's executive compensation strategy. The strategy is implemented
through policies designed to support the achievement of the Company's business
objectives and the enhancement of stockholder value. The Compensation Committee
reviews, on an ongoing basis, all aspects of executive compensation.
The Compensation Committee's executive compensation policies support the
following objectives:
-- The reinforcement of management's concern for enhancing stockholder
value.
-- The attraction and retention of qualified executives.
-- The provision of competitive compensation opportunities for exceptional
performance.
The basic elements of the Company's executive compensation strategy are:
Base salary. Base salaries for the executive managers of the Company
represent compensation for the performance of defined functions and
assumption of defined responsibilities. The Compensation Committee reviews
each executive's base salary on an annual basis. In determining salary
adjustments, the Compensation Committee considers the Company's 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 is the executive's position, experience, skills, potential for
advancement, responsibility, and current salary in relation to the expected
level of pay for the position. The 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, the
Board of Directors establishes performance goals of the Company 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. The Company's long-term incentive
compensation for management and employees consists of the 1994 Stock
Compensation Program.
The Compensation Committee views the granting of stock options as a
significant method of aligning management's long-term interests with those of
the stockholders. The Compensation Committee determines awards to executives
based on its evaluation of criteria that include responsibilities, compensation,
past and expected contributions to the achievement of the Company's long-term
performance goals. Stock options are designed to focus executives on the long-
term performance of the Company by enabling executives to share in any increases
in value of the Company's stock.
The Compensation Committee encourages executives, individually and
collectively, to maintain a long-term ownership position in the Company's stock.
The Compensation Committee believes this ownership, combined with a significant
performance-based incentive compensation opportunity, forges a strong linkage
between the Company's executives and its stockholders.
Compensation of the Chief Executive Officer
Mr. Geoffrey P. Jurick is the Chief Executive Officer, Chairman of the
Board of Directors and President of the Company. The Compensation Committee
considered the Company's results in all aspects of its business, and the terms
of his employment agreement with the Company, in its review of Mr. Jurick's
performance during Fiscal 1999.
Mr. Jurick's annual compensation for Fiscal 1999, comprised of
annual base salary of $411,600, is consistent with the Committee's targeted
annual compensation level and with the limitations established by the Settlement
Agreement (See "Certain Relationships and Related Transactions - Certain
Outstanding Common Stock"). Mr. Jurick's salary from the Company was reduced by
$80,000 in Fiscal 1998 as a result of SSG paying Mr. Jurick 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".
Policy on Qualifying Compensation
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), for tax years beginning on or after January 1, 1994, provides that
public companies may not deduct in any year compensation in excess of $1 million
paid to any of the individuals named in the Summary Compensation Table that is
not, among other requirements, "performance based," as defined in Section
162(m). None of the named individuals received compensation in excess of $1
million during Fiscal 1999, 1998 or 1997. The Company's policy is to qualify, to
the extent reasonable, its 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 the Company's success.
Consequently, the Board of Directors recognizes that the loss of a tax deduction
could be necessary in some circumstances.
COMPENSATION AND PERSONNEL COMMITTEE
Robert H. Brown, Jr., Chairman
Peter G. Bunger
Jerome H. Farnum
The foregoing report of the Compensation and Personnel Committee shall not
be deemed incorporated by reference by any general statement incorporating by
reference the Proxy Statement into any filing under the Securities Act of 1933
or the Securities Exchange Act of 1934 except to the extent that the Company
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under either act.
COMPARISON OF CUMULATIVE TOTAL RETURN
Performance Graph
The graph below compares the cumulative total stockholders' return on the
Company's Common Stock for the period December 22, 1994 (the date on which the
Company's Common Stock began trading on the American Stock Exchange) to April 2,
1999, with the cumulative total return over the same period of the American
Stock Exchange and a peer group of companies. Companies used to construct the
peer group index are Cobra Electronics Corp., Matsushita Electric Industrial Co.
Ltd., Recoton Corp. and Sony Corp. Philips Electronics NV and Zenith
Electronics Corp. were deleted from the peer group because their stocks were no
longer traded. Recoton Corp. was added to the peer group. In selecting
companies to be part of the peer group, the Company focuses on publicly traded
companies that design electronic products, which have characteristics similar to
the Company's in terms of one or more of the following: type of product,
distribution channels, sourcing or sales volume. The peer group assumes the
investment of $100 in the Company's Common Stock, on December 22, 1994 and
reinvestment of all dividends. The information in the graph was provided by
Media General Financial Services ("MGFS"). The comparison of the returns is as
follows:
<TABLE>
<CAPTION>
COMPARISON OF CUMULATIVE TOTAL RETURN OF
EMERSON RADIO CORP., PEER GROUP INDEX AND BROAD MARKET INDEX
FISCAL YEAR ENDING
<S> <C> <C> <C> <C> <C> <C>
COMPANY/INDEX/MARKET 1994 1995 1996 1997 1998 1999
Emerson Radio Corp. 100 135.14 110.81 45.95 18.92 35.14
Peer Group Index 100 95.11 106.39 108.68 122.39 141.70
NASDAQ Market Index 100 102.95 138.47 154.92 234.12 305.95
</TABLE>
The Customer Selected Stock List is made up of the following securities:
COBRA ELECTRONICS CORP.
MATSUSHITA ELECTRIC INDUSTRIES CO.
RECOTON CORP.
SONY CORP.
The stock price performance depicted in the above graph is not necessarily
indicative of future price performance. The Corporate Performance Graph will
not be deemed to be incorporated by reference in any filing by the Company under
the Securities Act or the Exchange Act except to the extent that the Company
specifically incorporates the graph by reference.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Relationship with Sport Supply Group, Inc.
The Company and Emerson Radio (Hong Kong) Ltd. ("Emerson HK"), the
Company's wholly owned subsidiary, own 2,269,500 shares, or approximately 31%,
of the issued and outstanding shares of SSG Common Stock. The Company 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 all of the Warrants are exercised by the Company,
the Company will own approximately 40% of the issued and outstanding shares of
SSG Common Stock.
SSG's Board of Directors now includes the following people that are
associated with the Company: 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. Mr. Jurick
has employment agreements with the Company and SSG. Messrs. Jurick and Walker
split their time between the two companies.
Management Services Agreement - Sport Supply Group, Inc.
During Fiscal 1997, SSG and the Company entered into a Management Services
Agreement, which was amended in Fiscal 1998, in an effort to utilize SSG's
excess capacity and to enable the Company to reduce certain costs. The
Management Services Agreement implements a program whereby SSG performs certain
services for the Company 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, design services and financial management services. The Management
Services Agreement may be terminated by either party upon sixty (60) days' prior
notice. Termination of the Management Services Agreement could have a material
adverse effect on the Company and its results of operations. The Company was
billed $636,000, $272,000 and $3,000 for services provided with respect to the
above mentioned agreement during Fiscal 1999, 1998 and 1997 respectively.
Effective October 18, 1997, SSG began paying Mr. Jurick directly for his
services. Effective January 15, 1998, the Company began reimbursing SSG for
base salary and bonus paid to Mr. Walker for the Company's benefit in lieu of
paying Mr. Walker directly. The Company billed SSG approximately $135,000 and
$47,000 towards Mr. Jurick's salary during Fiscal 1998 and 1997, respectively.
Certain Outstanding Common Stock
Pursuant to the Company's bankruptcy restructuring plans on March 31, 1994,
30 million shares of the Company's Common Stock were issued to GSE Multimedia
Technologies Corporation ("GSE"), Fidenas International Limited, L.L.C. ("FIN")
and Elision International, Inc. ("Elision"). GSE, FIN and Elision (the
"Affiliated Entities") are all affiliates of Geoffrey P. Jurick, the Company's
Chairman of the Board, Chief Executive Officer and President. On June 11, 1996,
a Stipulation of Settlement and Order (the "Settlement Agreement") was
executed in proceedings before the United States District Court for the District
of New Jersey, which settled various legal proceedings in Switzerland, the
Bahamas and the United States. The Settlement Agreement provides for, among
other things, the payment by Mr. Jurick and his Affiliated Entities of $49.5
million to various claimants of Mr. Jurick and the Affiliated Entities (the
"Creditors"), to be paid from the proceeds of the sale of certain of the 29.2
million shares of Emerson common stock (the "Settlement Shares") owned by the
Affiliated Entities. In addition, Mr. Jurick is to be paid the sum of $3.5
million from the sale of the Settlement Shares. The Settlement Agreement
provides that the Settlement Shares are to be sold over an indeterminate period
of time by a financial advisor, TM Capital (the "Advisor") pursuant to a
marketing plan taking into consideration (i) the interests of Emerson's minority
stockholders, and (ii) the goal of generating sufficient proceeds to pay the
Creditors and Mr. Jurick as quickly as possible. The Settlement Shares have
been divided into two pools. The Pool A Shares currently consist of 15.3
million shares of Emerson's common stock. The Pool B Shares currently consist of
the number of Emerson shares with respect to 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 the Company's Loan and Security
agreement ("Senior Secured Credit Facility") with a U.S. financial institution
(the "Lender") and/or the Indenture governing the Company's 8-1/2% Senior
Subordinated Convertible Debentures Due 2002 (the "Debentures"). Sales of the
Settlement Shares may be made pursuant to a registered offering if the sales
price is not less than 90% of the average of the three most recent closing
prices (the "Average Closing Price"), or, other than in a registered offering,
of up to 1% per quarter of the Emerson common stock outstanding, if the sales
price is not less than 90% of the Average Closing Price. Any other attempted
sales are subject to the consent of the Company, Mr. Jurick, the Creditors, and,
if necessary, the United States District Court in Newark, New Jersey.
All of the Settlement Shares secure payment of the $49.5 million
owed to the Creditors on a first priority basis. Any Creditor may apply to the
Court for an order to terminate the Settlement Agreement if certain events
occur. Such events include, without limitation, delisting of the Settlement
Shares from a national securities exchange or a determination that there is no
reasonable prospect that the goals contemplated by the Settlement Agreement can
be achieved. In November 1997, Petra Stelling and Barclays Bank filed a motion
with the Court for an order (i) terminating the Settlement Agreement on the
ground that there is no reasonable prospect that the goals contemplated by the
Settlement Agreement can be accomplished, and (ii) granting the Creditors
authorization to exercise all the rights and remedies provided by the Settlement
and Pledge Agreements in the event of termination including authorizing the
Collateral Agent to sell the Emerson Shares to fund payment of the Settlement
Amount and to vote the Emerson Shares pending such sale, directing the entry and
release of the Consent Judgments, authorizing Petra Stelling to enforce the
Swiss Judgment and for such other relief as the Court deems appropriate. The
Company and Mr. Jurick responded, the Creditors replied and several hearings
were held in 1998. Pursuant to the terms of a Letter of Intent, dated August
3, 1999, between the Company, Mr. Jurick and Oaktree Capital Management, LLC,
and certain of its affiliated entities ("Oaktree") and an Option Agreement,
dated as of August 3, 1999, among Oaktree, Petra Stelling, Barclays Bank and
Thomas Hackett, Official Liquidator of Fidenas International Bank Limited
("Fidenas Liquidator"), 1.) Oaktree would acquire all claims held by the
Creditors of Mr. Jurick for $20 million; 2.) Oaktree would purchase the
Company's entire ownership interest in SSG for approximately $15,000,0000 in
cash, the surrender by Oaktree of $13.9 million of Emerson Debentures and an
exit consent amending certain provisions of the Indenture; 3.) the Company would
purchase up to $23 million of its outstanding Common Stock through a self-tender
offer at a price of not less that $1.00 per share; 4.) Mr. Jurick would tender
his shares into the tender offer but would not sell shares having a value of
more than $18.8 million, regardless of the proration provisions of the tender;
and, 5.) Mr. Jurick would use the funds received from the self-tender by the
Company to purchase such claims from Oaktree thereby eliminating the need for
him to sell his Emerson shares. On December 1, 1999, Oaktree advised that it
had decided not to exercise its option to purchase Emerson's ownership interest
in SSG. No decision on the Creditors' motion has been rendered by the Court and
a further hearing has been scheduled for January 24 and 25, 2000.
If the Court enters an order terminating the Settlement Agreement, the
Creditors may take any action permitted by law to execute the Consent Judgments
given to them in connection with the Settlement Agreement to collect the unpaid
balance (including, without limitation, foreclosing on the Settlement Shares).
If the Creditors foreclose on the Settlement Shares and such foreclosure results
in a change of control (as defined in the Senior Secured Credit Facility), such
foreclosure will be deemed an event of default under the Company's Senior
Secured Credit Facility entitling the holders to accelerate payment of such
indebtedness. In addition, if a change of control (as defined in the Indenture
governing the Debentures) occurs, each of the holders of the Debentures, subject
to the right of the Senior Secured Creditors to impose a 120 day payment block,
has the right to require the Company to repurchase its Debentures at the par
value thereof plus accrued but unpaid interest. Such repurchases may have a
material adverse effect on the Company's future business activities.
Furthermore, a change of control will severely limit the Company's ability to
utilize existing tax net operating losses (NOL's) affecting loss and foreign tax
credit limitations provided by the Internal Revenue Code.
Swiss Proceeding Involving Certain Directors
In 1994, two of the Creditors, Petra and Donald Stelling (the
"Stellings"), filed a complaint with the Swiss Authorities claiming
that Geoffrey P. Jurick, Jerome H. Farnum and Peter G. Bunger
had engaged in improper activities in connection with the financing
of the Company's Plan of Reorganization. These allegations also
had formed the basis for a number of the claims made by the Creditors
which were settled in 1996 and which are desribed herein under the
heading "Certain Outstanding Common Stock". In December 1999, the Swiss
Tribunal dismissed all charges against Messrs. Jurick,
Farnum and Bunger. The Swiss Tribunal did find, however, that Messrs.
Jurick and Farnum had engaged in banking operations in Switzerland without
all appropriate licenses and fined them apporximately $12,500 and $5,000,
respectively.
Future Transactions and Loans
The Company has adopted a policy that all future affiliated transactions
and loans will be made or entered into on terms no less favorable to the Company
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 the Company's
Board of Directors 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 ("Section
16(a)") requires the Company's Officers and Directors, and persons who own more
than 10% of a registered class of the Company'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 the Company with copies of all
Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it, the
Company believes that, during the year ended April 2, 1999, its Officers,
Directors and greater than 10% beneficial owners have complied with all
applicable filing requirements with respect to the Company's equity securities.
STOCKHOLDER PROPOSALS
A proper proposal submitted by a stockholder in accordance with applicable
rules and regulations for presentation at the Company's next annual meeting that
is received at the Company's principal executive office by June 19, 2000 will be
included in the Company's proxy statement and form of proxy for that meeting.
If a stockholder desires to bring a proposal before the next annual meeting and
such proposal is not timely submitted for inclusion in the Company's proxy
statement, the proposal must be received by the Company no later than August 1,
2000.
PERSONS MAKING THE SOLICITATION
The enclosed proxy is solicited on behalf of the Board of Directors of the
Company. The cost of soliciting proxies in the accompanying form will be paid
by the Company. Officers of the Company may solicit proxies by mail, telephone
or telegraph. Upon request, the Company will reimburse brokers, dealers, banks
and trustees, or their nominees, for reasonable expenses incurred by them in
forwarding proxy material to beneficial owners of shares of the Common Stock.
The Company has 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 the Board of Directors as the Company's 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
THE COMPANY WILL PROVIDE A COPY OF THE COMPANY'S ANNUAL REPORT ON
FORM 10-K FOR THE FISCAL YEAR ENDED APRIL 2, 1999 (EXCLUSIVE OF EXHIBITS),
WITHOUT CHARGE, TO EACH PERSON TO WHOM A COPY OF THIS PROXY STATEMENT
IS DELIVERED, UPON THE WRITTEN OR ORAL REQUEST OF SUCH PERSON. REQUESTS
SHOULD BE DIRECTED TO INVESTOR RELATIONS (ATTENTION: ELIZABETH J. CALIANESE,
VICE PRESIDENT-HUMAN RESOURCES AND SECRETARY), EMERSON RADIO CORP.,
NINE ENTIN ROAD, PARSIPPANY, NEW JERSEY 07054.
By Order of the Board of Directors,
ELIZABETH J. CALIANESE
Vice President-Human Resources
and Secretary
January 13, 2000
EMERSON RADIO CORP.
Board of Directors Proxy for the Annual Meeting
of Stockholders at 1:00 p.m. (local time), Thursday, February 24, 2000
Bent Tree Country Club
5201 Westgrove Drive
Dallas, Texas 75248
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.
FEBRUARY 24, 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
to the contrary below) nominees at right
1. To elect five Nominees:
directors for a Geoffrey P. Jurick
one-year term Robert H. Brown,Jr.
Peter G. Bunger
Stephen H. Goodman
Jerome H. Farnum
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 1999 Annual Report and Notice of Meeting and
Proxy Statement, dated January 13, 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.)
