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RECOTON(R) RECOTON CORPORATION
2950 LAKE EMMA ROAD
LAKE MARY, FLORIDA 32746
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To the Shareholders of Recoton Corporation:
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
You are cordially invited to attend the Annual Meeting of Shareholders
of Recoton Corporation (the "Company"), which will be held in Conference Room C,
11th Floor of the Chase Manhattan Bank, 270 Park Avenue, New York, New York on
Wednesday, June 11, 1997 at 2:00 p.m., for the following purposes:
(1) To elect four directors for a term of three years;
(2) To ratify the appointment of Cornick, Garber & Sandler,
LLP as independent auditors of the Company for the fiscal year
ending December 31, 1997; and
(3) To transact such other business as may properly come
before the Annual Meeting or any adjournments thereof.
A telephone conference connection will be made available at the
Company's Florida facilities, 2950 Lake Emma Road, Lake Mary, Florida, for
shareholders who would care to attend the meeting by phone. Only shareholders of
record at the close of business on May 6, 1997 will be entitled to notice of,
and to vote at, the Annual Meeting or any adjournments thereof.
It is important that your shares be represented at the annual meeting
regardless of the size of your holdings. WHETHER OR NOT YOU INTEND TO BE PRESENT
AT THE MEETING IN PERSON, WE URGE YOU TO PLEASE MARK, DATE AND SIGN THE ENCLOSED
PROXY AND RETURN IT IN THE ENVELOPE PROVIDED FOR THAT PURPOSE, WHICH DOES NOT
REQUIRE POSTAGE IF MAILED IN THE UNITED STATES. THE PROXY IS REVOCABLE AT ANY
TIME PRIOR TO ITS USE.
By Order of the Board of Directors
Stuart Mont
Executive Vice President-Operations,
Chief Operating Officer, Chief Financial
Officer and Secretary
May 8, 1997
<PAGE>
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RECOTON(R) RECOTON CORPORATION
2950 LAKE EMMA ROAD
LAKE MARY, FLORIDA 32746
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ANNUAL MEETING OF SHAREHOLDERS
JUNE 11, 1997
PROXY STATEMENT
INTRODUCTION
The 1997 Annual Meeting (the "Annual Meeting") of Recoton Corporation
(the "Company" or "Recoton") will be held on Wednesday, June 11, 1997, for the
purposes and at the time and location set forth in the attached Notice of Annual
Meeting. The accompanying form of proxy is solicited on behalf of the Board of
Directors of the Company in connection with the Annual Meeting or any
postponement or adjournment thereof.
EACH SHAREHOLDER'S VOTE IS IMPORTANT. ACCORDINGLY, SHAREHOLDERS ARE
URGED TO SIGN AND RETURN THE ACCOMPANYING FORM OF PROXY REGARDLESS OF WHETHER OR
NOT THEY PLAN TO ATTEND THE ANNUAL MEETING. If a shareholder attends and votes
by ballot at the Annual Meeting, that vote will cancel any proxy vote previously
given. Additionally, a shareholder giving a proxy may revoke it at any time
before it is voted at the Annual Meeting by giving a valid proxy bearing a later
date. The accompanying form of proxy properly signed and returned to the Company
will be voted in accordance with the instructions thereon. Each such proxy may
be revoked at any time prior to the time it is voted at the Annual Meeting by
giving notice thereof in writing to the Secretary of the Company.
This Proxy Statement, the accompanying form of proxy and the Notice of
Annual Meeting are first being sent or given to shareholders of the Company (the
"Shareholders") on or about May 12, 1997.
SHARES OUTSTANDING AND VOTING RIGHTS
The securities entitled to vote at the Annual Meeting consist of shares
of Common Stock, $.20 par value per share, of the Company (the "Common Stock"),
each of which entitles the holder to one vote. Only holders of Common Stock of
record at the close of business on May 8, 1997 are entitled to vote at the
Annual Meeting or adjournments thereof. On April 28, 1997, there were 11,392,183
shares of Common Stock outstanding. To the knowledge of the Company, no person
owned beneficially more than 5% of the outstanding shares of Common Stock except
as otherwise noted on page 16.
Shareholders representing a majority of the shares of Common Stock
outstanding and entitled to vote must be present or represented by proxy in
order to constitute a quorum to conduct business at the Annual Meeting. Under
the New York Business Corporation Law ("BCL"), any corporate action, other than
the election of directors, must be authorized by a majority of the votes cast,
except as otherwise required by the BCL or the Company's Certificate of
Incorporation with respect to a specific proposal, and the four nominees for
Director receiving the highest number of votes will be elected as Directors. For
purposes of determining whether a proposal has received a majority of the votes
cast, where a shareholder abstains from voting or in instances where brokers are
prohibited from exercising or choose not to exercise discretionary authority for
beneficial owners who have not provided voting instructions (so-called "broker
non-votes"), those shares will not be included in the vote totals and,
therefore, will have no effect on the vote. Such shares will, however, be
counted as "present" for determining a quorum. Where, however, the BCL requires
the approval of a majority of outstanding shares for passage of a proposal, an
abstention or a broker non-vote will have the same practical effect as a vote
cast against the proposal.
PROPOSAL I
ELECTION OF DIRECTORS
The 12 directors of the Company are divided into classes having
staggered terms of three years. At the Annual Meeting, four persons are to be
elected, each for a three-year term expiring in 2000. It is intended that the
persons named in the enclosed form of proxy will vote for the election of the
nominees named below for terms expiring in 2000 (or for substitute nominees in
the event of contingencies not known at present) unless the Shareholders
submitting proxies specify otherwise. The other directors will continue in
office for the remainder of their respective terms as indicated below.
Each of the nominees named below has served as a director during the
fiscal year ended December 31, 1996 except Stephen Chu, who was first elected to
the Board on January 17, 1997. Certain data with respect to each nominee and
each director, including age as of the date of this proxy statement, follows. If
voting by proxy with respect to the election of directors, shareholders may vote
in favor of all nominees, withhold their votes as to all nominees or withhold
their votes as to specific nominees.
The Board of Directors unanimously recommends that Shareholders vote
FOR the election as directors of the nominees listed below for terms expiring in
2000. If one or more of the nominees should become unavailable or unable to
serve at the time of the Annual Meeting, the shares to be voted for such nominee
or nominees which are represented by proxies will be voted for any substitute
nominee or nominees designated by the Board or, if none, the size of the Board
will be reduced. The Board knows of no reason why any of the nominees will be
unavailable or unable to serve at the time of the Annual Meeting.
Name and Position Business Experience,
With the Company Directorships and Age
NOMINEES FOR TERMS EXPIRING IN 2000
Herbert H. Borchardt Director of Recoton since 1945.
Co-Chairman and Director Chairman and Chief Executive
Officer from 1976 until 1992,
Co-Chief Executive Officer from
1992 until June 1996 and
Co-Chairman since 1992. Age: 91
Stephen Chu Director of Recoton since January
Director 1997. President and Director of
STD Holding Limited, a Hong Kong
subsidiary of the Company, and of
its various subsidiaries, since
September 1990. STD was acquired
by the Company in September 1995.
Age: 40.
Ronald E. McPherson Director of Recoton since 1969.
Director Vice President and Secretary from
1964 until his retirement in 1989.
Age: 67
Peter Wish Director of Recoton since 1969.
Executive Vice President- Executive Vice President from
Administration and Director 1976 until 1992 and Executive Vice
and Director President-Administration since
1992. Age: 61
DIRECTORS WHOSE TERMS EXPIRE IN 1999
Robert L. Borchardt Director of Recoton since 1964.
Co-Chairman, President, Chief Chief Operating Officer from 1976
Executive Officer and Director to December 1993, President since
1976, Co-Chairman since 1992,
Co-Chief Executive Officer from
1992 until June 1996 and Chief
Executive Officer since June 1996.
Age: 59
Stuart Mont Director of Recoton since 1975.
Executive Vice Vice President and Treasurer from
President-Operations, Chief prior to 1987 until 1989, Senior
Operating Officer, Chief Vice President from 1989 until
Financial Officer, Secretary 1992, Secretary since 1989,
and Director Executive Vice President-
Operations since 1992, Chief
Financial Officer since 1992 and
Chief Operating Officer since
1993. Age: 56
George Calvi Director of Recoton since 1984.
Director Vice President from 1978 until
1988, Senior Vice President-Sales
and Marketing from 1988 until
1992 and Executive Vice
President-Sales and Marketing from
1992 until October 1996. Age: 46
Paul E. Feffer Director of Recoton since June
Director 1996. Chairman of Feffer
Consulting Co., Inc., an
international media consulting
firm, since 1991 and a consultant
to Merck & Company's publishing
division. He founded Feffer and
Simons Inc. in 1955, which was
sold to Doubleday & Co. in 1962
(where he remained as President of
the subsidiary Feffer and Simons
until 1986) and was Chairman of
Baker & Taylor International, a
subsidiary of W. R. Grace & Co.,
from 1987 until 1991. Feffer &
Simons and Baker & Taylor
specialized in international
publishing and book and magazine
distribution to overseas markets
for U.S. publishers. Age: 75
DIRECTORS WHOSE TERMS EXPIRE IN 1998
Irwin S. Friedman Director of Recoton since 1982.
Director President, Chief Executive
Officer and principal shareholder
of I. Friedman Equities, Inc., a
corporate financial consulting
firm, for more than the past five
years. Age: 63
Joseph M. Idy Director of Recoton since 1990.
Director Stockbroker and money manager at
PaineWebber, Inc. (Senior Vice
President since 1989) for more
than the past five years. Age: 56
Joseph H. Massot Director of Recoton since 1985.
Principal Accounting Officer, Controller and Assistant
Vice President, Treasurer, Treasurer from 1978 until 1989,
Assistant Secretary and Principal Accounting Officer,
Director Vice President and Treasurer since
1989 and Assistant Secretary
since 1983. Age: 52
Robert G. Shaw Director of Recoton since August
Vice President and Director 1996. Vice President of Recoton
since August 1996. President and
a director of Recoton Audio
Corporation (f/k/a International
Jensen Incorporated) (RAC) since
June 1994 (RAC was acquired by
the Company in August 1996).
President, Director and sole
stockholder of International
Jensen Incorporated (f/k/a IJI
Acquisition Corp.) (IJI) since
January 1996 (RAC sold its
original equipment manufacturing
business to IJI at the time of
RAC's acquisition by the Company).
Mr. Shaw is also a director of
Gibraltar Packaging Group, Inc.,
a manufacturer and marketer of
printed paperboard packaging, and
a trustee of Beloit College.
Age: 56.
Robert L. Borchardt may be deemed to be a control person of Recoton;
Robert L. Borchardt is the son of Herbert H. Borchardt.
BOARD COMMITTEES
The Board has standing Compensation and Audit Committees but does not
have nominating committee. It also appoints the members of committees
constituted under stock compensation plans.
Compensation Committee. The Compensation Committee, currently composed
of Messrs. Feffer, Friedman, Idy and McPherson (none of whom is an employee of
the Company), met once in 1996. Its function is to review compensation issues;
approve salaries and review benefit programs for the executive officers; review
and recommend incentive compensation (including stock compensation) plans; and
approve any employment contracts with, or other contractual benefits for,
executive officers.
Audit Committee. The audit committee, currently composed of Messrs.
Feffer, Friedman, Idy and McPherson, met once in 1996. It performs activities,
and reviews and makes recommendations, relating to the accounting controls,
audit and financial statements of the Company.
Committees Under Stock Compensation Plans. The Company's Stock Option
Committee, currently composed of Messrs. Idy and Feffer, met five times in 1996.
It makes awards under, prescribes rules for and interprets the provisions of the
Recoton Corporation 1982 Stock Option Plan, Nonqualified Stock Option Plan and
1991 Stock Option Plan. The Stock Bonus Committee, currently composed of Messrs.
Feffer, Idy and McPherson, did not meet in 1996. It makes awards under,
prescribes rules for and interprets the provisions of the Recoton Corporation
Stock Bonus Plan.
COMPENSATION OF DIRECTORS; ATTENDANCE
During 1996, none of the directors who are employees of the Company
received any compensation in addition to his regular compensation from the
Company for any services as a director or as a member of a committee of the
Board of Directors. Each of the directors who was not an employee of the Company
received an annual retainer of $10,000 in 1996 and was reimbursed for expenses,
if any, incurred in attending meetings. (See "Certain Relationships and Related
Transactions" transactions with directors or their affiliates for services other
than as a director.)
The Board of Directors held six meetings during the fiscal year ended
December 31, 1996. All of the directors attended at least 75% of the meetings of
the Board of Directors and committees of which they were members in 1996.
Directors discharge their responsibilities to the Company not only by attending
Board and committee meetings but also through communications with Company
management relative to matters in which their expertise and interest are
appropriate.
EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION COMMITTEE AND STOCK OPTION COMMITTEE ON COMPENSATION
OF EXECUTIVE OFFICERS OF THE COMPANY*
COMPENSATION PHILOSOPHY
The philosophy of the Company's executive compensation has been to
provide competitive levels of compensation, reward above average overall
corporate performance, recognize individual initiative and achievement and
assist the Company in attracting and retaining qualified management. The Company
has not historically determined compensation based on rigid formulas, fixed
targets or weighing of specific criteria. Due to the relatively small number of
management employees and the level of interinvolvement between staff and
management, compensation of executives not subject to employment agreements has
been based on management's and the Compensation Committee's subjective informal
assessment of each such employee's performance in light of over-all Company
performance.
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* This section shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent the Company
specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such Acts.
<PAGE>
BASE SALARIES
Base salary compensation for executive officers not the subject of an
employment agreement is determined by the potential impact the executive officer
has on the Company, the skills and experience required by the position and the
level of responsibility. While there is no assurance that base salaries will
always increase, the basic assumption is that such salaries will increase from
year-to-year as the employee assumes greater levels of responsibility in the
Company and to keep pace with inflation. Increases for 1996 reflect both such
factors.
INCENTIVE COMPENSATION
Annual incentive compensation for executive officers not the subject
of an employment agreement is based primarily on corporate operating earnings,
but also includes an overall assessment by management and the Committee of each
executive officer's role in helping the Company to generate such earnings. This
assessment may include, but is not limited to, an informal review of the
individual's contributions in areas such as leadership, decision making and
financial and general management. In fixing incentive compensation in 1996, the
Committee took particular note of management's success over the past few years
in increasing the Company's revenues but reduced the levels of incentive
compensation from the prior two years in light of the reduction in the Company's
profits in 1996.
Factors utilized in determining incentive compensation for the
executive officers with respect to 1996 included the continuing increase in net
sales of the Company and the increase in responsibilities as a result of the
Company's growth. In recent years, the Company has used either cash or awards of
treasury stock as incentive compensation. In 1996 such awards were made
exclusively in cash.
STOCK OPTIONS
The Company has periodically granted stock options in order to provide
certain of its executives with a competitive total compensation package, reward
them for their contribution to the Company's long-term share performance and
provide incentives to encourage future efforts. Options are generally granted to
key personnel, other employees in recognition of merit and to each employee who
has worked for the Company a minimum of five years. A general round of option
grants was made to key employees in early 1995. In 1996 options were granted to
certain newly-hired personnel and pursuant to an employment agreement with
Robert L. Borchardt (see "Chief Executive Officers' Compensation" below).
All options granted have an option price that is not less than the
fair market value of the stock on the date of grant. The terms of the options
and the dates after which they become exercisable are established by the Stock
Option Committee, subject to plan terms. The Board feels that stock ownership by
management is beneficial in aligning management's and shareholders' interest in
the enhancement of shareholder value.
CHIEF EXECUTIVE OFFICERS' COMPENSATION
Mr. Robert L. Borchardt, currently the Company's Chief Executive
Officer, Co-Chairman of the Board and President, is being compensated pursuant
to an employment agreement entered into effective as of January 1, 1995. Such
agreement provides for a base annual salary of $850,000 which is adjusted
annually to reflect the greater of any increase in the consumer price index or
6% ($901,000 effective 1996) and an annual bonus equal to two percent of the
Company's net income after taxes for the just- completed year but before
deducting the bonus ("Net Income Before Bonus") (but in no event more than two
percent of the corresponding Net Income Before Bonus for the prior year) plus
five percent of the amount by which such Net Income Before Bonus number for the
just-completed year exceeds the Net Income Before Bonus number for the prior
year. In addition, the Company granted Mr. Borchardt 100,000 options at the time
of contract execution, and 150,000 options in 1996 and agreed to exercise its
best efforts to grant the employee during each year of the employment term
options on 250 shares for each $10,000 by which the Net Income Before Bonus for
each just-completed year exceeds the Net Income Before Bonus for the prior year
(commencing with the grant of options on 79,741 shares in 1996 with respect to
the growth in Net Income Before Bonus between 1994 and 1995). For a more
complete description of the employment agreement with Mr. Robert Borchardt, see
"Employment Contracts and Change-in-Control Arrangements" appearing elsewhere in
this proxy statement.
Mr. Herbert H. Borchardt, Co-Chief Executive Officer until June 1996
and Co-Chairman of the Board, is being compensated pursuant to an employment
agreement entered into in 1987 which provides for base compensation which is
adjusted annually to reflect changes in the consumer price index (approximately
$213,000 effective 1996). His compensation package includes a provision for an
annual payment (approximately $177,000 effective 1996) were he to cease in his
role of Co-Chairman and become a consultant. The initial salary level (and
corresponding level of payment if Mr. Herbert Borchardt were to become a
consultant) was based on negotiation between the Company and the employee and
approximates the salary level which the employee was receiving at the time of
entering into the employment agreement and does not vary based on the Company's
performance.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M)
Section 162(m) of the Internal Revenue Code, enacted in 1993,
generally disallows a tax deduction beginning in 1994 to public companies for
compensation over $1 million received by a corporation's Chief Executive Officer
and four other most highly compensated executive officers. Qualifying
performance-based compensation will not be subject to the deduction limit if
certain requirements are met. The Internal Revenue Service released final rules
in 1995 implementing the provisions of this statute. In this regard, the
Committee continued to review employment arrangements to determine whether any
actions with respect to this new limit should be taken by the Company. No
executive officer's non-deferred cash compensation was substantially in excess
of $1,000,000 in 1996 (Robert L. Borchardt having waived approximately $78,700
of his bonus payable with respect to 1996); it is not anticipated that any
executive officer of the Company other than Mr. Robert L. Borchardt would
receive any such cash compensation in excess of this limit during 1997 and, with
respect to Mr. Borchardt, it can not be determined whether he would waive
receipt of any portion of his contractually mandated bonus. Therefore, during
1996 the Committee did not take any action to comply with the new limit. Options
granted under the Company's 1991 Stock Option Plan qualify as performance-based
compensation assuming satisfaction of all other applicable requirements. The
Committee will continue to monitor this situation and will consider taking
appropriate action if it is warranted in the future, including possible
renegotiation of the employment agreement with Mr. Borchardt to conform to the
exemptions allowed under the IRS regulations.
CONCLUSION
The Committee believes the current compensation structure (namely
employment agreements for the Co-Chairmen of the Board and certain officers
hired in connection with acquisitions and informal arrangements consisting of
base salaries, incentive compensation in the form of cash and stock bonuses and
the granting of stock options for the other executive officers) has
appropriately compensated its officers in a manner that relates to performance
and to the shareholders' long-term interests. The Committee will continue to
review compensation practices, with respect to both overall arrangements and the
compensation of specific officers.
Respectfully submitted,
For the Compensation Committee:
Paul E. Feffer
Irwin S. Friedman
Joseph M. Idy
Ronald E. McPherson
For the Stock Option Committee:
Paul E. Feffer
Joseph M. Idy
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Company's Compensation Committee and Stock Option
Committees is employed by the Company. Mr. McPherson was an officer and employee
of the Company until 1989 and was retained by the Company through December 31,
1993 and a company of which Mr. Friedman is principal was under retainer by the
Company as a consultant during 1996 (see "Certain Relationships and Related
Transactions"). No director of the Company served, during the last completed
fiscal year, as an executive officer of any entity whose compensation committee
(or other comparable committee, or the Board, as appropriate) included an
executive officer of the Company. There are no "interlocks" as defined by the
Securities and Exchange Commission ("SEC").
COMPENSATION TABLES
This section of the Proxy Statement discloses fiscal 1996 plan and
non-plan compensation awarded or paid to, or earned by, the (i) Company's
Co-Chief Executive Officers ("CEOs") (as of June 1996, the Company commenced to
have only one CEO), (ii) the Company's four most highly compensated executive
officers other than the CEOs who were serving as executive officers at December
31, 1996, to the extent salary and bonuses exceeded $100,000 and (iii) one
person for whom disclosure would have been provided pursuant to clause (ii) but
for the fact that the individual was not an executive officer at December 31,
1996 (together, these seven persons are sometimes referred to as the "Named
Executives").
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
The following table contains compensation data for the Named Executives
for the past three fiscal years:
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Long-Term Compensation
-------------------------------------------
Pay-
Annual Compensation Awards Outs
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Other Restricted Securities LTIP All
Name and Annual Stock Underlying Pay- Other
Principal Salary Bonus Compensation Awards Options Outs Compensation
Position Year ($)1 ($)2 ($)3 ($) (#)4 ($) ($)5
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
Robert L. Borchardt, 1996 $947,570 $ 90,000 -- -- 229,741 -- $15,322
Co-Chairman, CEO 1995 899,950 150,000 -- -- 250,000 -- 14,284
and President 1994 798,950 250,000 -- -- 150,000 -- 18,143
Herbert H. Borchardt, 1996 212,950 -- -- -- -- -- 54,496
Co-Chairman 1995 202,587 -- -- -- -- -- 8,263
1994 197,454 -- -- -- -- -- 10,207
Stuart Mont, 1996 182,227 125,000 -- -- -- -- 13,873
Chief Operating 1995 162,241 160,000 -- -- 20,000 -- 9,327
Officer, Executive 1994 142,237 140,000 -- -- -- -- 14,499
Vice President-
Operations and Secretary
Peter Wish, 1996 204,673 90,000 -- -- -- -- 6,842
Executive Vice 1995 200,122 125,000 -- -- 10,000 -- 6,841
President- 1994 185,422 125,000 -- -- -- -- 8,514
Adminstration
George Calvi, 1996 192,637 70,000 -- -- -- -- 4,123
Former Executive 1995 167,126 125,000 -- -- 10,000 -- 4,221
Vice President- 1994 157,675 125,000 -- -- -- -- 6,917
Sales & Marketing
Dennis Wherry, Senior 1996 139,966 45,000 -- -- -- -- 5,074
Vice President- 1995 131,980 55,000 -- -- 10,000 -- 4,655
Operations 1994 135,980 50,000 -- -- -- -- 7,553
Craig A. Dykes, 1996 93,681 86,781 -- -- -- -- 8,585
Vice President- 1995 87,692 40,000 -- -- 5,000 -- 7,565
Information 1994 81,692 40,000 -- -- -- -- 17,230
Systems
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1 Includes amounts allocated to the executive's deferred
compensation account for each of 1996, 1995 and 1994 (Mr. R.
Borchardt: $49,408, 49,950, and $49,950; Mr. Wish: $14,032,
$15,482, and $14,782; and Mr. Calvi: $12,507, $13,911, and
$13,460) (see "Employment Contracts and Changes-In-Control Arrangements"
below).
2 Represents bonus awards determined for the performance year indicated,
whether paid in such year or paid in the following year.
3 The column "Other Annual Compensation" includes the value of certain
personal benefits only where the value is greater than the lower of $50,000
or 10% of an executive's salary and bonus for the year.
4 Numbers have been adjusted to reflect stock dividends.
5 Includes for 1996, 1995 and 1994 respectively, (a) the vested
portion of the Company's contribution for each such person
pursuant to the Recoton Corporation Employees' Profit Sharing
Plan (Mr. R. Borchardt: $1,710, $3,009 and $6,368; Mr. H.
Borchardt: $1,463, $818 and $5,650; Mr. Mont: $3,650, $3,659
and $6,489; Mr. Wish: $3,683, $3,682 and $6,489; Mr. Calvi:
$3,451, $3,490 and $6,489; Mr. Wherry $4,412, $3,998, and
$6,489; and Mr. Dykes: $4,412, $3,387 and $5,446; (b) premiums
paid by the Company for split dollar insurance arrangements
(Mr. R. Borchardt: $10,687, $8,350 and $8,850); (c) premiums
paid by the Company for life insurance for the direct or
indirect benefit of such person over $50,000 in principal
amount (Mr. R. Borchardt: $2,925, $2,925 and $2,925; Mr. H.
Borchardt: $7,445, $7,445 and $4,557; Mr. Mont: $1,890,
$1,890, and $1,210; Mr. Wish: $3,159, $3,159 and $2,025; Mr.
Calvi: $672, $731 and $428; Mr. Wherry ($662, $657 and $397);
and Mr. Dykes: $91, $123 and $123; (d) the value of interest
assumed by the Company on relocation and other loans for Mr.
Mont ($8,333, $3,778 and $6,800); Mr. Wherry ($667 in 1994);
and Mr. Dykes ($4,082, $4,055 and $11,661); and (e) payment of
medical expenses pursuant to an employment agreement with Mr.
H. Borchardt ($45,588 in 1996).
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</TABLE>
OPTION GRANTS IN 1996
The following table contains information concerning the grant of stock
options under the Company's stock option plans to the Named Executives during
1996 (the Company has not granted any stock appreciation rights -- "SARs"):
<TABLE>
<CAPTION>
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POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM1
- -------------------------------------------------------------------------------------------------------------------------
Percent
Number of of Total
Securities Options
Underlying Granted
Options to Employees Exercise
Granted in Fiscal Price Expiration
Name (#)2 Year ($/Share)3 Date 5%($) 10%($)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Robert L. Borchardt 150,000 52.7% $16.75 1/23/06 $1,580,098 $4,004,278
Robert L. Borchardt 79,741 28.0% 18.75 3/14/06 940,288 2,382,874
Herbert H. Borchardt -0- NA NA NA NA NA
Stuart Mont -0- NA NA NA NA NA
Peter Wish -0- NA NA NA NA NA
George Calvi -0- NA NA NA NA NA
Dennis Wherry -0- NA NA NA NA NA
Craig A. Dykes -0- NA NA NA NA NA
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1 Executives may not sell or assign any stock grants, which
have value only to the extent of stock price appreciation,
which will benefit all shareholders commensurately. The
amounts set forth are based on assumed appreciation rates
of 5% and 10% as prescribed by the Securities and Exchange
Commission rules and are not intended to forecast future
appreciation, if any, of the stock price. The Company did
not use an alternate formula for a grant date valuation as
it is not aware of any formula which will determine with
reasonable accuracy a present value based on future unknown
or volatile factors. Actual gains, if any, on stock
option exercises and Common Stock holdings are dependent on
the future performance of the Common Stock and overall
stock market conditions. There can be no assurance that
the amounts reflected in this table will be achieved.
2 The options for 150,000 shares fully vested on July 24, 1996 and the
options for 79,741 shares fully vested on September 15, 1996.
3 The exercise price is equal to the fair market value of the Company's
Common Stock on the date of the grant.
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</TABLE>
Aggregated Option Exercises in 1996
and 1996 Year-End Option Values
The following table sets forth information with respect to the Named
Executives concerning the exercise of options during 1996 and unexercised
options held at year-end (as noted above, the Company has no outstanding SARs):
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Securities Underlying In-the-Money Options
Options at at 12/31/96 12/31/96 ($)1
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Value
Shares Acquired Realized
Name on Exercise (#) ($)1 Exercisable Unexercisable Exercisable Unexercisable
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Robert L. Borchardt 133,334 $1,902,176 557,175 207,900 $1,547,674 $-0-
Herber H. Borchardt NA NA NA NA NA NA
Stuart Mont NA NA 44,168 25,000 361,326 3,157
Peter Wish NA NA 22,435 17,000 94,645 3,157
George Calvi 24,834 287,068 26,000 17,000 210,345 3,157
Dennis Wherry NA NA 8,750 12,500 2,368 1,579
Craig A. Dykes NA NA 7,800 6,400 38,407 842
- ----------------------------------------------------------------------------------------------------------------
1 Market value of underlying securities at exercise or year
end, as applicable, minus the exercise price. The per
share closing sale price on the Nasdaq Stock Exchange on
December 31, 1996 was $14.9375. Certain options granted in
1994, 1995 and 1996 were excluded since they were not in the money at
year-end.
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Employment Contracts and Change-In-Control Arrangements
GENERAL. The Company is party to various employment and consulting
agreements with certain of the Named Executives as described below. These
agreements have been filed with the SEC as exhibits to the Company's periodic
filings, to which all of the following descriptions are subject.
ROBERT L. BORCHARDT EMPLOYMENT AGREEMENT. Effective January 1, 1995,
the Company entered into an employment agreement with Robert L. Borchardt,
currently its Chief Executive Officer, Co- Chairman of the Board and President,
for a ten year term. The agreement automatically is renewed thereafter for
successive two-year periods unless either party affirmatively elects to not
renew. Such agreement provides for a base annual salary of $850,000 which is to
be adjusted annually to reflect the greater of the changes in the consumer price
index or 6% ($901,000 effective 1996) and an annual bonus equal to two percent
of the Company's net income after taxes for the just-completed year but before
deducting the bonus ("Net Income Before Bonus") (but in no event more than two
percent of the corresponding Net Income Before Bonus for the prior year) plus
five percent of the amount by which such Net Income Before Bonus number for the
just-completed year exceeds the Net Income Before Bonus number for the prior
year. Mr. Borchardt waived the right to receive certain portions of his 1995 and
1996 bonuses. The agreement references option grants to Mr. Borchardt
aggregating 250,000 shares during 1995 and 1996 (exercisable at the fair market
value as of the grant date) and requires the Company to exercise its best
efforts to grant the employee during the employment term options on 250 shares
for each $10,000 by which the Net Income Before Bonus for each just-completed
year during the contract term exceeds the Net Income Before Bonus for the prior
year (exercisable at the fair market value as of the grant date). Mr. Borchardt
received options on 79,741 shares in 1996 with respect to the Company's 1995
earnings and no options in 1997 with respect to 1996 earnings. The agreement
provides for disability insurance and medical benefits, vacation and perquisites
customary for a chief executive officer as well as certain demand and "piggy
back" rights to have his shares of Company stock registered.
The agreement is terminable by the Company only for "cause" (as
defined). If the Company elects not to renew the agreement at its expiration or
if the employee terminates employment at age 65, upon a change of control or for
"good reason" (as defined), the employee has the right to become a consultant to
the Company until the time of his death. As a consultant, Mr. Borchardt would
receive an amount equal to his salary at the time of termination of employment
for two years, an amount equal to 75% of that salary for two more years and an
amount equal to 50% of that salary for the balance of the consultancy period
(all such payments being subject to cost of living adjustments). Upon a "change
of control" (as defined) during the term of employment or consultancy, the
Company is obligated to pay the employee $2 million (subject to cost of living
adjustments), the employee would have the right to cause the Company to purchase
his shares in the Company and the employee would have the right to remain in
employment or to terminate his employment and become a consultant to the
Company. If the employee has "good reason" he may terminate his employment or
consultancy, in which event he is entitled to receive his salary and bonus or
his consultancy fee on a periodic or discounted lump sum basis (at the
employee's option) for the balance of the employment and/or consulting period
and may elect to receive the cash value of unexercised options (whether vested
or not). In certain events the Company is required to gross up payments to
reflect certain excise taxes which may be imposed under the Internal Revenue
Code. Upon the employee's termination of employment for disability, he would
receive his salary and bonus for one year and his salary as in effect at the
date of termination and benefits until his death. Upon the employee's death, his
estate would receive his salary and bonus for one year and his salary for one
additional year thereafter.
HERBERT H. BORCHARDT EMPLOYMENT AGREEMENT. On May 18, 1987, the
Company entered into an employment agreement with Herbert H. Borchardt for a
period equal to the life of Mr. Borchardt. Pursuant to the agreement, the
Company shall pay Mr. Borchardt not less than $150,000 per annum while he is
Chairman of the Board (including Co-Chairman) and not less than $125,000 per
annum during his life when he is not Chairman of the Board (such sums being
subject to increase based on changes in the consumer price index; for the year
commencing January 1, 1996 the respective sums were approximately $213,000 and
$177,000). In 1997, this agreement was amended to provide that Mrs. Herbert
Borchardt would be retained by the Company as a consultant upon the death of Mr.
Borchardt so long as she shall live, for which she will receive annual
compensation at a rate equal to one-half of the amount which Mr. Borchardt was
receiving as a consultant (or would have received were he a consultant), which
payment shall be subject to CPI adjustment, and to provide Mrs. Borchardt with
hospitalization and major medical benefits comparable to those provided to Mr.
Borchardt.
LIFE INSURANCE. Pursuant to two separate Split Dollar Life Insurance
Agreements effective as of February 24, 1989 among Recoton and Trudi Borchardt
and Marvin Schlacter (the "Joint Owners") and Robert L. Borchardt, the Company
agreed to maintain life insurance policies on Robert L. Borchardt's life in the
aggregate face amount of $2,500,000, the proceeds of which (after reimbursement
to the Company for premiums paid) are payable to beneficiaries designated by the
Company and the Joint Owners. Pursuant to three separate Split Dollar Life
Insurance Agreements effective December 17, 1994 among Recoton, the Robert and
the Trudi Borchardt 1994 Family Trust (the "1994 Borchardt Family Trust") and
Robert L. Borchardt, the Company agreed to maintain life insurance policies on
the joint lives of Robert L. Borchardt and Trudi Borchardt in the aggregate face
amount of $10 million and a life insurance policy on the life of Robert L.
Borchardt in the face amount of $1.3 million, the proceeds of which (after
reimbursement to the Company for premiums paid) are payable to the beneficiary
designated by the 1994 Borchardt Family Trust.
DEFERRED COMPENSATION AGREEMENTS. Pursuant to a Deferred Compensation
Agreement effective as of July 1, 1982 between Recoton and Robert L. Borchardt,
amounts credited under a prior deferred compensation agreement to Mr. Borchardt
plus five percent of the salary which Mr. Borchardt is or may become entitled to
receive from the Company together with interest accrued thereon shall be paid to
Mr. Borchardt in monthly installments upon termination of his employment for any
reason whatsoever. In the event of Mr. Borchardt's death, all or any unpaid
portion of his deferred compensation shall be payable to a beneficiary
designated by Mr. Borchardt. Mr. Wish and the Company entered into a similar
Deferred Compensation Agreement effective as of October 1, 1982, and Mr. Calvi
and the Company entered into a similar Deferred Compensation Agreement effective
as of October 1, 1991.
CHANGE OF CONTROL ARRANGEMENT. Options granted under the Company's
1991 Stock Option Plan may include provisions accelerating the vesting schedule
in the case of defined changes-in-control. Options granted to-date under such
plan have included such provision. See also the discussion above regarding the
Robert L. Borchardt Employment Agreement.
<PAGE>
SHAREHOLDER RETURN PERFORMANCE PRESENTATION*
SET FORTH BELOW IS A LINE GRAPH AND CHART COMPARING THE YEARLY
PERCENTAGE CHANGE IN THE CUMULATIVE TOTAL SHAREHOLDER RETURN (CHANGE IN YEAR-END
STOCK PRICE PLUS REINVESTED DIVIDENDS) ON THE COMPANY'S COMMON STOCK WITH THE
CUMULATIVE TOTAL RETURN OF THE RUSSELL 2000 INDEX (AN INDEX PREPARED BY FRANK
RUSSELL & ASSOCIATES COMPOSED OF COMPANIES LISTED ON THE NEW YORK AND AMERICAN
STOCK EXCHANGES AND QUOTED ON THE NASDAQ STOCK EXCHANGE ("NASDAQ") BY MARKET
CAPITALIZATION BEGINNING WITH THE COMPANY WHICH RANKS 1001 AND ENDING WITH THE
COMPANY RANK OF 3000) AND A PEER GROUP FOR THE PERIOD OF FIVE FISCAL YEARS
COMMENCING ON DECEMBER 31, 1991 AND ENDING ON DECEMBER 31, 1996. THE GRAPH AND
CHART ASSUMES THAT THE VALUE OF THE INVESTMENT IN THE COMPANY'S STOCK AND FOR
EACH INDEX WAS $100 ON DECEMBER 31, 1991 AND REFLECTS REINVESTMENT OF DIVIDENDS
AND MARKET CAPITALIZATION WEIGHING. THE DOLLAR AMOUNTS INDICATED IN THE GRAPH
AND CHART ARE AS OF DECEMBER 31 IN EACH YEAR INDICATED.
- --------
* This section shall not be deemed incorporated by reference by any general
statement incorporating by reference this Proxy Statement into any filing
under the Securities Act of 1933 or under the Securities Exchange Act of
1934, except to the extent the Company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under
such Acts.
<PAGE>
- ------------------------------------------------------------------------------
Cumulative Total Return ($)
- ------------------------------------------------------------------------------
Registrant/Index 1991 1992 1993 1994 1995 1996
==============================================================================
Recoton Corporation 100 253 394 513 513 409
- ------------------------------------------------------------------------------
Peer Group 100 114 189 162 159 145
- ------------------------------------------------------------------------------
Russell 2000 100 119 141 139 178 207
- ------------------------------------------------------------------------------
The common stocks of the following companies have been included in the
peer group index: Acclaim Entertainment Inc., Ameriwood Industries International
Corp., Boston Acoustics Inc., Carver Corp., Emerson Radio Corp., Harman
International Industries Inc., Interactive Network Inc., Polk Audio Inc. and
Zenith Electronics Corp. The members of the peer group are companies in the
Standard & Poor's home entertainment group but Standard & Poor's does not
publish an index for such group. Historical stock price performance shown on the
graph is not necessarily indicative of the future price performance.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors and persons who own more than ten
percent of a registered class of the Company's equity securities to file reports
of ownership and changes in ownership with the SEC and the Nasdaq Stock
Exchange. Officers, directors and greater than ten-percent shareholders are
required by SEC regulation 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, or written representations from certain reporting persons that
no Forms 5 were required for those persons, the Company believes that all such
1996 filing requirements were complied with except that Mr. Feffer's Form 3 was
filed late.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In August 1996 the Company acquired International Jensen Incorporated
(Jensen), a Delaware corporation, by way of merger. Jensen has been renamed
Recoton Audio Corporation (Recoton Audio). Immediately prior to such
acquisition, Jensen sold its original equipment manufacturing (OEM) business
(excluding the related receivables, which were sold to a financial institution)
to IJI Acquisition Inc. (IJI Acquisition), a company controlled by Robert G.
Shaw, the former Chairman of the Board, President and Chief Executive Officer of
Jensen (and the current President of Recoton Audio, a Vice President of the
Company and a director of Recoton Audio and the Company) for approximately
$8,344,000 with IJI Acquisition also assuming related debt and liabilities. IJI
Acquisition was renamed International Jensen Incorporated after the acquisition
of Jensen by the Company. IJI Acquisition's sole stockholder is Robert G. Shaw.
Recoton Audio, the Company and IJI Acquisition are parties to a number
of agreements, including a Management Services Agreement, a Supply and Services
Agreement, a Shared Facilities Agreement, a Non-Competition Agreement and a
License Agreement. Pursuant to the Management Services Agreement, which has an
initial term of one year and is automatically renewed unless otherwise
terminated, Mr. Shaw and certain other employees of the Company are authorized
to perform various managerial and administrative services for IJI Acquisition
during the course of their employment by the Company, for which IJI Acquisition
pays Recoton a fee (pursuant to which IJI paid Recoton Audio approximately
$98,000 in 1996). The Supply and Services Agreement provides for IJI Acquisition
to supply Recoton Audio's requirements for certain products and services for a
term of twelve months (pursuant to which Recoton Audio paid IJI Acquisition
approximately $1,005,000 in 1996). The Shared Facilities Agreement governs the
use of facilities in Schiller Park and Lincolnshire, Illinois leased by Recoton
Audio but also used by IJI Acquisition (pursuant to which IJI Acquisition paid
Recoton Audio approximately $146,000 in facility fees in 1996 under such
agreement); such agreement may be terminated by Recoton Audio or IJI Acquisition
at any time on six-month's notice after February 1997. The Non-Competition
Agreement provides that Recoton Audio and IJI Acquisition each will not compete
in certain areas of each other's business, with certain exceptions. Pursuant to
the License Agreement, Recoton Audio has granted IJI Acquisition a ten-year,
world-wide royalty-bearing license to use the trademarks of Recoton Audio in OEM
business applications in the automotive, truck, recreation vehicle, aircraft or
other motorized vehicle markets, for which no royalties were due in 1996.
In July 1996 Robert L. Borchardt sold 65,000 shares of the Company's
Common Stock to the Corporation at $17.75 per share, a price equal to the
then-current market value, having previously exercised options to purchase
133,334 shares.
For services rendered during the fiscal year ended December 31, 1996,
the Company paid in 1997 a total of $50,000 to I. Friedman Equities, Inc.
("Equities"), of which Mr. Friedman, a director of the Company, is a principal
shareholder for financial consulting services.
The following directors and executive officers of the Company received
loans aggregating in excess of $60,000 outstanding at any time in 1996, their
relationship with the Company, the maximum amount borrowed and the outstanding
balance as of April 28, 1997:
Person Relationship Maximum Current
Balance
Stuart Mont Chief Operating $357,921 $300,619
Officer, Chief Financial
Officer, Executive Vice
President-Operations, Director
William McGreevy Vice President-Engineering $215,450 $215,450
<PAGE>
SECURITIES OWNERSHIP OF CERTAIN
BENEFICIAL HOLDERS AND MANAGEMENT
The following table sets forth information, as of April 28, 1997, with
respect to the beneficial ownership of Common Stock by (i) each director, (ii)
each Named Executive, (iii) each shareholder known by the Company to be the
beneficial owner of more than 5% of the Common Stock and (iv) all executive
officers and directors as a group.
- -----------------------------------------------------------------------------
Amount and Nature
of Beneficial
Ownership1
- -----------------------------------------------------------------------------
Name and Address of Beneficial Owner2 Number Percent
- -----------------------------------------------------------------------------
Robert L. Borchardt3,4 2,106,083 17.54%
Herbert H. Borchardt 1,667 *
George Calvi4 54,608 *
Stephen Chu5 199,803 1.75
Craig A. Dykes4 8,800 *
Paul E. Feffer 1,000 *
Irwin S. Friedman4,6 37,500 *
Joseph M. Idy 10,000 *
Ronald E. McPherson 30,194 *
Joseph H. Massot4 43,555 *
Stuart Mont4 83,699 *
Robert G. Shaw 0 *
Dennis Wherry4 10,750 *
Peter Wish4 36,341 *
First Pacific Advisors, Inc.7 1,638,100 14.38
All directors and executive officers 2,681,628 22.00
as a group (20 persons)4
- -----------------------------------------------------------------------------
* Less than 1%
1 Unless it is so stated otherwise, each holder owns the
reported shares directly and has sole voting and
dispositive power with respect to such shares. The
number of shares beneficially owned by a person also
includes all shares which can be acquired by such
person within 60 days after April 28, 1997,
including by way of exercise of outstanding options.
2 Except as otherwise noted below, the address of all persons
is c/o Recoton Corporation, 2950 Lake Emma Road,
Lake Mary, Florida 32746. The address of Mr. Chu is
c/o STD Holding, Unit F-J, 5th Floor, Block 2, Kwai
Tak Industrial Centre, Kwai Tak Street, Kwai Chung,
NT, Hong Kong; the address of Mr. Feffer is 60
Sutton Place, New York, NY 10022; the address of
Mr. Friedman is 730 Fifth Avenue, New York, New
York 10019; the address of Mr. Idy is 440 Royal
Palm Way, Palm Beach, Florida 33480; the address of
Mr. Shaw is 25 Tri-State International Office
Center, Lincolnshire, IL 60609; and the address of
Mr. McPherson is 6519 Sweet Maple Lane, Boca Raton,
Florida 33433.
3 Includes 319,999 shares held by Mr. R. Borchardt as trustee
for his children and 39,909 shares held by Mr. R.
Borchardt's wife. Mr. R. Borchardt disclaims
beneficial ownership of the shares owned by his
wife. Also includes 546,666 shares held by a trust
of which Mr. R. Borchardt and Mr. Irwin Friedman are
the trustees and of which Mr. Borchardt is the
beneficiary (the "Borchardt Trust"), the beneficial
ownership of which shares may be attributable to
Mr. R. Borchardt, 516,393 shares held by a revocable
living trust of which Mr. R. Borchardt is the sole
trustee, 19,999 shares held in an individual
retirement account in Mr. R. Borchardt's name and
616,225 share subject to stock options exercisable
as of April 28, 1997 or within 60 days thereof.
Excludes 406,092 shares as to which Mr. Borchardt
holds a proxy pursuant to an agreement between the
Company, Mr. Borchardt, Stephen Chu and other
shareholders, which shares are to be voted
consistent with the recommendation of the Board of
Directors of the Company, and 30,000 shares held by
a foundation of which Mr. Borchardt is a director.
4 Includes shares of Common Stock subject to stock options
exercisable as of April 28, 1997 or within 60 days
thereof as follows: Mr. R. Borchardt: 616,225; Mr.
Calvi: 13,000; Mr. Dykes: 8,800; Mr. Friedman:
7,500; Mr. Massot: 27,834; Mr. Mont: 48,168; Mr.
Wherry: 10,750; Mr. Wish: 20,167; and all executive
officers and directors as a group: 795,444.
5 Such shares are subject to an agreement between Mr. Chu,
the Company, Robert Borchardt and other shareholders
pursuant to which Mr. Borchardt holds a proxy to vote
the shares consistent with the recommendation of the
Board of Directors of the Company.
6 Does not include the shares held by the Borchardt Trust,
of which Mr. Friedman is a trustee.
7 Based on a Schedule 13G Statement dated February 12,
1997, and filed with the Securities and Exchange Commission,
First Pacific Advisors, Inc. had shared voting power with
respect to 653,100 shares and shared dispositive power with
respect to 1,638,100; such shareholder's address is 11400
West Olympic Boulevard, Suite 1200, Los Angeles, CA 90064.
The Company cannot determine from such filing if any natural
persons control the shares beneficially owned by First
Pacific Advisors, Inc.
- -----------------------------------------------------------------------------
PROPOSAL II
SELECTION OF AUDITORS
Action is to be taken at the Annual Meeting to ratify the selection of
Cornick, Garber & Sandler, LLP as independent auditors of the Company for the
fiscal year ended December 31, 1997.
Representatives of Cornick, Garber & Sandler, LLP, which has served as
the Company's independent auditors since 1981, are expected to be present at the
Annual Meeting and to be available to respond to appropriate questions. They
will have an opportunity to make a statement if they so desire.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS
VOTE FOR RATIFICATION OF THE SELECTION OF CORNICK, GARBER & SANDLER, LLP AS THE
COMPANY'S INDEPENDENT AUDITORS.
OTHER MATTERS TO COME BEFORE THE MEETING
If any matter not described herein should properly come before the
meeting, the Directors' Proxy Committee will vote the shares represented by it
in accordance with its best judgment. At the time this Proxy Statement went to
press, the Company knew of no other matters which might be presented for
shareholder action at the Annual Meeting.
EXPENSES OF SOLICITATION
The total cost of this proxy solicitation will be borne by the
Company. Officers, agents and employees of the Company and other solicitors
retained by the Company may, by letter, by telephone or in person, make
additional requests for the return of proxies and may receive proxies on behalf
of the Company. Brokers, nominees, fiduciaries and other custodians will be
requested to forward soliciting material to the beneficial owners of shares and
will be reimbursed for their out-of-pocket expenses.
SHAREHOLDER'S PROPOSALS
Shareholders are hereby notified that if they intend to submit
proposals for inclusion in the Company's proxy statement and form of proxy for
the 1998 Annual Meeting of Shareholders, such proposals must be received by the
Company no later than January 12, 1998.
MISCELLANEOUS
Management knows of no other business to be presented at the Annual
Meeting, but if other matters properly do come before the Annual Meeting, it is
intended that the proxies in the accompanying form will be voted thereon in
accordance with the judgment of the person or persons voting such proxies.
THE COMPANY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON
SOLICITED, ON WRITTEN REQUEST OF SUCH PERSON, A COPY OF THE COMPANY'S ANNUAL
REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1996. Such a written request
is to be directed to Stuart Mont, Secretary, Recoton Corporation, 2950 Lake Emma
Road, Lake Mary, Florida 32746.
By Order of the Board of Directors
Stuart Mont
Executive Vice President-Operations, Chief
Operating Officer, Chief Financial Officer
and Secretary
Lake Mary, Florida
May 8, 1997
<PAGE>
RECOTON CORPORATION
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
JUNE 11, 1997
THIS PROXY IS SOLICITED ON BEHALF OF RECOTON CORPORATION'S BOARD
OF DIRECTORS
The undersigned hereby appoints Joseph H. Massot and Peter M. Ildau
and each of them proxies for the undersigned with full power of substitution, to
vote all shares of Recoton Corporation capital stock which the undersigned may
be entitled to vote at the Annual Meeting of Shareholders of Recoton
Corporation, to be held at The Chase Manhattan Bank, 270 Park Avenue, New York,
NY, on Wednesday, June 11, 1997 at 2:00 P.M., or at any adjournment thereof,
upon the matters set forth on the reverse side and described in the accompanying
Proxy Statement and upon such other business as may properly come before the
meeting or any adjournment thereof.
Please mark this proxy as indicated on the reverse side to vote on any
item. If no directions are given, the proxy will be voted for the election of
all listed nominees, in accordance with the Director's recommendation on the
other matters listed on the reverse side and at the discretion of the proxies on
other matters that may properly come before the meeting. Please sign and date on
the reverse side and return promptly in the enclosed envelope or otherwise to
Recoton Corporation, c/o ChaseMellon Shareholders Services, Proxy Processing,
Church Street Station, P.O. Box 1554, New York, NY 102770-1554 so that your
shares can be represented at the meeting.
- ------------------------------------------------------------------------------
COMMENTS/ADDRESS CHANGE: PLEASE MARK COMMENTS/ADDRESS
BOX ON REVERSE SIDE
(Continued and to be signed on other side)
FOLD AND DETACH HERE
<PAGE>
----
Please X
mark your -----
votes as
indicated in
this Sample
The Board of Directors recommends a vote FOR Items 1 and 2, each of which has
been proposed by Recoton Corporation.
Proposal 1-ELECTIONS OF DIRECTORS WITHHELD Proposal 2 FOR AGAINST ABSTAIN
Nominee: Herbert h. Borchardt FOR FOR ALL APPROVAL OF
Stephen Chu AUDITORS
Ronald E. McPherson / / / / / / / / / /
Peter Wish
WITHHELD FOR: (Write that nominee's I PLAN TO ATTEND THE MEETING
name in the space provided below).
/ /
/ /
- ----------------------------------
COMMENT/ADDRESS CHANGE
Please mark this box if
you have written comments/address
change on the reverse side.
Receipt is hereby acknowledged of
the Recoton Corporation Notice of
Meeting and Proxy Statement.
Signature____________________Signature_________________Date_________, 1997
Note: Please sign as name appears hereon, Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full tile as such.
FOLD AND DETACH HERE
