[TOPS LETTERHEAD]
April 25,1997
Dear Shareholders:
We cordially invite you to attend the Annual Meeting of the
Shareholders of Tops Appliance City, Inc. (the "Company") to be
held at 11:00 A.M. on Friday, May 23, 1997, at the Company's store
at 410 Route 10, East Hanover, New Jersey.
The purposes of this meeting are (i) to elect one (1) director,
and (ii) to ratify the appointment of auditors. These matters are
described in the accompanying Notice of Meeting and Proxy Statement.
The Board of Directors recommends that Shareholders vote in
favor of each proposal. We encourage all Shareholders to participate
by voting their shares by Proxy whether or not they plan to attend the
meeting. Please sign, date and mail the enclosed Proxy as soon as possible.
If you do attend the Annual Meeting, you may still vote in person.
Sincerely,
Robert G. Gross
Chairman of the Board
<PAGE>
TOPS APPLIANCE CITY, INC.
45 Brunswick Avenue, CN-14
Edison, New Jersey 08818
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held on May 23,1997
Notice is hereby given that the Annual Meeting of Shareholders (the
"Meeting") of Tops Appliance City, Inc. (the "Company") will be held at the
Company's store at 410 Route 10, East Hanover, New Jersey on May 23, 1997 at
11:00 A.M. Eastern Daylight Time, for the following purposes:
1. To elect one member of the Board of Directors to serve until the
2000 Annual Meeting of Shareholders or until a successor is duly
elected and qualified.
2. To approve the appointment of Ernst & Young, LLP as the Company's
independent auditors.
3. To transact such other business as may properly come before the
Meeting or any adjournment thereof.
Only shareholders of record at the close of business on April 18, 1997
will be entitled to notice of and to vote at the Meeting.
Whether or not you intend to attend the Meeting, please complete, date
and sign the enclosed Proxy. Your Proxy will be revokable, either in writing
or by voting in person at the Meeting, at any time prior to its exercise.
By Order of the Board of Directors
/s/ Thomas L. Zambelli
__________________________________
THOMAS L. ZAMBELLI, Secretary
Edison, New Jersey
April 25,1997
<PAGE>
TOPS APPLIANCE CITY, INC.
45 Brunswick Avenue, CN-14
Edison, New Jersey 08818
PROXY STATEMENT
Accompanying this Proxy Statement is a Notice of Annual
Meeting of Shareholders and a form of Proxy for such meeting
solicited by the Board of Directors. The Board of Directors has
fixed the close of business on April 18, 1997, as the record date
for the determination of shareholders who are entitled to notice
of and to vote at the meeting or any adjournment thereof. The
holders of a majority of the outstanding shares of Common Stock
present in person, or represented by Proxy, shall constitute a
quorum at the meeting.
As of the record date, the Company had 7,277,229
outstanding shares of common stock, no par value (the "Common
Stock"), the holders of which are entitled to one vote per share.
A Proxy that is properly submitted to the Company may
be revoked at any time before it is exercised by written notice
to the Secretary of the Company, and any Shareholder attending
the meeting may vote in person and by doing so revokes any Proxy
previously submitted by him. Where a Shareholder has specified a
choice on his Proxy with respect to Proposals 1 and 2, it will be
complied with. If no direction is given, all the shares
represented by the Proxy will be voted in favor of such
Proposals.
The cost of soliciting Proxies will be paid by the
Company, which will reimburse brokerage firms, custodians,
nominees and fiduciaries for their expenses in forwarding proxy
material to the beneficial owners of the Company's stock.
Officers and regular employees of the Company may solicit Proxies
personally and by telephone. The Annual Report of the Company
for the year ended December 31, 1996, containing audited
financial statements for such year, is enclosed with this Proxy
Statement. This Proxy Statement and the enclosed Proxy are being
sent to the shareholders of the Company on or about April 25,
1997.
IN ORDER THAT YOUR SHARES MAY BE REPRESENTED AT THIS
MEETING, YOU ARE REQUESTED TO PLEASE SIGN, DATE AND MAIL THE
PROXY PROMPTLY.
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
According to the Company's By-Laws, the Board of
Directors is divided into three classes, each of which is
composed as nearly as possible of one-third of the directors. At
the 1997 Annual Meeting, one director will be elected to serve
for three years expiring on the date of the Annual Meeting of
Shareholders in 2000. Each director elected will continue in
office until a successor has been elected or until resignation or
removal in the manner provided by the Company's By-Laws. The
name of the nominee for the Board of Directors and the names of
the directors whose terms will continue after the Annual Meeting
are listed below. Shares represented by a properly executed
proxy in the accompanying form will be voted for such nominees.
However, discretionary authority is reserved to vote such shares
in the best judgment of the persons named in the event that any
person or persons other than the nominees listed below are to be
voted on at the meeting due to the unavailability of any nominee
so listed.
All persons named below are directors of the Company at
the present time. No family relationships exist between any
nominee, director or executive officer of the Company.
NOMINEE FOR THREE-YEAR TERM
John H. Hollands, 68, has served as President of
Hollands Associates, a management consulting firm, since July
1991. Prior thereto, he served as Executive Vice President of
Sony Corporation of America from July 1989 through July 1991 and
as President of Sony Magnetic Products from July 1982 through
July 1989. Mr. Hollands is Executive Director of the Vision Fund
of America which supports the Lighthouse National Center for
Vision and Aging. He is a member of the Company's Audit
Committee. Mr. Hollands became a director of the Company in
September 1992.
DIRECTORS CONTINUING IN OFFICE
Leslie S. Turchin, 54, acquired the Company in 1970,
and served as Chairman of the Board from 1988 until January 1997.
He also served as President from 1988 until 1992 and as Chief
Executive Officer from 1988 until May 1995. Mr. Turchin has been
a director of the Company since 1970. Prior to 1970, Mr. Turchin
was employed in sales positions at Kelvinator and at Sears
Roebuck. His term as a director expires at the annual meeting in
1999.
Robert G. Gross, 39, has served as a Director, Vice
Chairman and Chief Executive Officer of the Company since June
1995. In January 1997, he was elected Chairman of the Board.
Previously, Mr. Gross was President and Chief Operating Officer
of Eye Care Centers of America, Inc. from 1990 to 1994. Prior to
that, he served as a management consultant to Sears Specialty
Merchandising Group. His term as a director expires at the
annual meeting in 1999.
Philip M. Schmidt, 62, has served as President of the
Company since 1992 and prior to that served as Executive Vice
President and Chief Operating Office since 1987. He became a
director in 1988. Mr. Schmidt also served as Vice President and
General Manager of the Company from 1985 to 1987. Prior to 1985,
Mr. Schmidt held various management, sales and merchandising
positions with Platt Music Corporation, May Company Department
Stores and F & R Lazarus Department Stores. His term as a
director expires at the annual meeting in 1998.
Anthony L. Formica, 56, has served as the Chief
Operating Officer of the Kessler Institute for Rehabilitation
since 1972. He is a member of the Audit and Compensation
Committees of the Company. Mr. Formica became a director of the
Company in September 1992. His term as a director expires at the
annual meeting in 1998.
INFORMATION CONCERNING BOARD
The Board of Directors met three times in 1996.
Leslie S. Turchin, one of the incumbent directors, attended fewer
than 75% of the meetings of the Board of Directors. In addition,
the Board acted by unanimous consent eight times during 1996.
The Board of Directors has an Audit Committee, a
Compensation Committee and an Executive Committee. The Audit
Committee is responsible for reviewing the Company's audited
financial statements, meeting with the Company's independent
accountants to review the Company's internal controls and
financial management practices and examining all agreements or
other transactions between the Company and its directors and
officers (other than those compensation functions assigned to the
Compensation Committee) to determine whether such agreements or
transactions are fair to the Company's shareholders. Messrs.
Formica and Hollands serve on the Audit Committee.
The Compensation Committee is responsible for reviewing
the compensation and benefits of the Company's executive
officers, making recommendations to the Board of Directors
concerning compensation and benefits for such executive officers
and administering the Company's stock option plans. Messrs.
Turchin, Gross, Schmidt and Formica serve on the Compensation
Committee.
The Company's Executive Committee has the authority to
act, between meetings of the full Board of Directors, on any
matter than might properly be brought before the Board of
Directors, subject to exceptions for certain major matters.
Messrs. Turchin, Gross and Schmidt serve on the Executive
Committee.
Directors who are not employees of the Company receive
an annual fee of $5,000 and $500 per meeting for serving as
directors. Directors who are employees of the Company do not
receive any additional compensation for such services.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth, as of March 31, 1997,
the name and number of shares of Common Stock held by each person
known to the Company to own beneficially more than five percent
(5%) of the Company's Common Stock and the number of shares owned
by each director of the Company, the Company's Chief Executive
Officer and its other four most highly compensated executive
officers, and all directors and executive officers as a group.
Each of the following has an address c/o Tops Appliance City,
Inc., 45 Brunswick Avenue, CN-14, Edison, New Jersey 08818,
except Westinghouse Pension Plan, whose address is 11 Stanwix
Street, Pittsburgh, Pennsylvania 15222. All shares are owned
directly by the named person, except that 400,000 of Mr.
Turchin's shares are owned by the Turchin Family Partnership and
that Mr. Holland's shares are owned by his wife.
Number of Percent
Name Shares Owned of Class
Robert G. Gross 18,800 0.3%
Philip M. Schmidt 63,750 0.9%
Richard L. Jones - -
Raymond G. Navarette - -
Thomas L. Zambelli - -
Leslie S. Turchin 2,538,337 34.9%
Anthony L. Formica 2,000 -
John H. Hollands 2,500 -
Westinghouse Pension Plan 2,539,000 34.7%
All Officers and
Directors as a
Group (11 persons) 2,626,917 36.1%
<PAGE>
CERTAIN TRANSACTIONS
The Company leases a portion of its warehouse and
distribution center, including office space, and its retail store
in Edison, New Jersey from Leslie S. Turchin, a Director and the
former Chairman of the Board of the Company.
The Edison retail store lease commenced March 3, 1984
for a five-year term covering approximately 47,000 square feet in
a shopping center at a base rent of $20,579 per month. The lease
was amended on January 1, 1987 to reduce the leased premises to
43,309 square feet, to increase the base rent to $28,872 per
month through December 1991 and $51,970 per month thereafter
until December 1996, and to grant three additional five-year
options to renew, the terms of which will expire December 31,
2011. The Company has exercised its first option to renew the
lease through December 31, 2001 at a base rent of $59,412.
Further amendments to the lease require that the rental payment
for the second renewal term would be agreed upon by the parties
at the time of the renewal but would be no less than $61,354 per
month, and $79,400 per month during the third renewal term. The
Company is also responsible for its proportionate share of real
estate taxes and common area maintenance costs of the shopping
center calculated as a percentage of the total square footage of
rentable floor area of the buildings comprising the shopping
center. The Company is also responsible for its own utilities
and insurance expenses with respect to the leased premises.
The lease for the office space and warehouse and
distribution center in Edison, New Jersey commenced on
November 1, 1985 for a term of five years, covered approximately
fifteen acres, including a 318,000 square foot building, of which
28,000 square feet is office space, at a base rent of $97,517 per
month. The lease includes two renewal options, each for a term
of five years. Rental payments for the first renewal term, which
ended December 31, 1996, were $111,337 per month. The second
renewal term, which was exercised in 1996 and expires
December 31, 2001, requires a base rent of $105,577. The Company
is responsible for paying all real estate taxes, utilities,
insurance, and maintenance costs associated with these premises.
The Company believes that the terms and conditions of
the leases with Mr. Turchin are no less favorable to the Company
than could have been obtained for comparable premises in arms'
length transactions with unaffiliated third parties. The
Company's independent directors must approve any future leases or
other transactions with related parties.
EXECUTIVE COMPENSATION
The following table sets forth, for each of the last
three fiscal years, cash and certain other compensation paid or
accrued by the Company for the Chief Executive Officer and for
each of the four other most highly compensated executive officers
(the "Named Officers") of the Company in all capacities in which
they served:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
____________________ ______________________
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Awards Payouts
______ _______
Other
Name and Annual Restricted All Other
Principal Compen- Stock Options LTIP Compen-
Position Year Salary Bonus sation Awards SARs(#) Payouts sation
____ ______ _____ _______ __________ _______ _______ _________
Robert G. Gross 1996 $ 300,000 - $ 26,110 $ - 250,000 - -
Chairman and 1995 171,343 - 5,864 - 250,000(f) - _
Chief Executive 1994 - - - - - - -
Officer (a)
Philip M. Schmidt 1996 $ 250,000 $ - $ 86,138(d) - 25,000 - -
President 1995 250,000 88,870 22,702 - - - -
1994 250,000 - 46,934 - 55,000(g) - -
Richard L. Jones 1996 $ 225,000 - $ 65,612(e) - 90,000 - -
Senior Vice President1995 88,269 - 19,420 - 90,000(f) - -
and Chief Operating 1994 - - - - - - -
Officer (b)
Thomas L. Zambelli 1996 $ 46,154 - 4,399 - 40,000 - -
Senior Vice President1995 - - - - - - -
and Chief Financial 1994 - - - - - - -
Officer(c)
Raymond G. Navarette 1996 $125,000 $ 5,906 $ 8,764 $ - 10,500 - $ -
Vice President- 1995 118,415 6,000 12,617 - - - -
Division Merchandise 1994 106,000 2,000 - 13,500(h) - 39,530
Manager
</TABLE>
___________
(a) Mr. Gross became Vice Chairman and Chief Executive Officer
in June 1995 and Chairman in January 1997.
(b) Mr. Jones became Senior Vice President and General
Merchandise Manager in August 1995 and Chief Operating Officer in
January 1997.
(c) Mr. Zambelli became Senior Vice President and Chief
Financial Officer in September 1996.
(d) $60,577 of this amount represents the cash settlement of
accrued vacation paid in 1996.
(e) $58,078 of this amount represents relocation expenses
reimbursed in 1996.
(f) Cancelled in 1996.
(g) 25,000 of these options were cancelled in 1996.
(h) 10,500 of these options were cancelled in 1996.
<TABLE>
Potential Realizable
Value at Assumed
% of Total Annual Rates of Stock
Options/SARs Appreciation for
Options/SARs Granted to Exercise or Base Option Term
Granted Employees in Fiscal Price
Name # Year ($/Sh) Expiration Date 5% 10%
____ ____________ ___________________ ________________ _______________ __ ___
<S> <C> <C> <C> <C> <C> <C>
Robert G. Gross 250,000 24.0% $2.38 6/3/06 $375,000 $947,500
Philip M. Schmidt 25,000 2.4% $2.38 6/3/06 $ 37,500 $ 94,750
Richard L. Jones 90,000 8.7% $2.38 6/3/06 $135,000 $341,100
Thomas L. Zambelli 40,000 3.8% $1.44 9/3/06 $ 36,400 $ 91,600
Raymond G. Navarette 10,500 1.0% $2.38 6/3/06 $ 15,750 $ 39,795
All officers as
a Group 447,900 43.0% - - - -
</TABLE>
During 1996, stock options totalling 1,001,300 and 40,000
shares were issued at exercise prices of $2.38 and $1.44, respectively.
Options are generally exercisable over a three year period from the date of
grant. The assumed annual rates of appreciation of 5% and 10% for a ten (10)
year period would result in the price of the Company's stock increasing from
$.88 (closing price as of 4/14/96) to approximately $1.43 and $2.28,
respectively.
Employment Agreements
The Company entered into management agreements with
Philip M. Schmidt on January 1, 1989. The agreement with Mr. Schmidt
amended on January 1, 1992 to extend the term of the agreement to
five years from the date of the amendment. During 1996, the
agreement with Mr. Schmidt was amended to extend the agreement for a
period of one additional year. The Company entered into management
agreements with Robert Gross, its Chief Executive Officer, effective
June 1, 1995 for a term expiring May 31, 2000, with Richard L. Jones,
its Chief Operating Officer, effective August 1, 1995 for a term
expiring August 1, 1998 and with Thomas L. Zambelli, its Chief
Financial Officer effective September 3, 1996 for a term expiring
December 31, 1997.
Each of the existing agreements provide for a base
salary subject to increases as approved by the Board of Directors.
Currently, the base salaries of Messrs. Gross, Schmidt, Jones and
Zambelli are $300,000, $250,000, $225,000 and $160,000, respectively.
The Board of Directors, in its discretion, may award annual bonuses
to these officers.
Messrs. Gross, Schmidt, Jones and Zambelli each
receive additional non-cash compensation in the form of reimbursed
automobile expenses, use of automobiles owned or leased by the
Company (or an allowance for such leasing or purchase by the
executive subject to a dollar limitation), health, medical,
hospitalization and other insurance benefits, and other benefits
provided by the Company to all employees.
Pursuant to the terms of their respective
management agreements, Mr. Gross, Mr. Schmidt, Mr. Jones and Mr.
Zambelli have each agreed not to compete, directly or indirectly,
with the Company in any state or geographic area in which the Company
conducts or proposes to conduct business during the terms of their
respective agreements and for a period of up to two years after
termination of employment by expiration of the term of the agreement
with cause. If the Company were to terminate the employment of Mr.
Schmidt without cause, the terminated executive would not be bound by
the terms of his agreement not to compete. Should any of these
executives become disabled, as defined in their respective management
agreements, the Company has the right to reduce such executive's
compensation by fifty percent for the duration of the contract term.
Mr. Leslie S. Turchin, Founder and former Chairman
of the Board, is also subject to an agreement not to compete directly
or indirectly with the Company in any state in which the Company
conducts or proposes to conduct business. Mr. Turchin's agreement
not to compete terminates on January 20, 1999, two years following
the date his management agreement terminated by voluntary withdrawal.
Each of the agreements not to compete restrict Messrs. Turchin,
Gross, Schmidt, Jones and Zambelli from soliciting customers,
suppliers, employees or sales agents of the Company during the
effective period of such agreements. Each executive is further
restricted from disclosing any confidential information, trade
secrets or customer lists to anyone for the same restricted period of
time.
Pursuant to the terms of the respective management
agreements, if there were a transfer of more than fifty percent of
the voting securities of the Company (in one transaction or a series
of transactions), or a sale of substantially all of the Company's
assets, and, as a result, the employment of Mr. Gross or Mr. Schmidt
is terminated without cause, Mr. Schmidt would receive compensation
in an amount equal to one year's base salary. Mr. Gross would
receive an amount ranging from $1,000,000 if the change of control
occurred prior to May 31, 1997 down to $400,000 if the change of
control occurred after June 1, 1998. Mr. Gross would receive one
single payment by the Company within sixty days of notice of
termination of the executive. Neither the Company's initial public
offering in August 1992 or the corporate reorganization that occurred
simultaneously was deemed to be an event that triggered these
provisions.
Salary Savings Plan & Trust
The Company maintains a Salary Savings Plan & Trust
("401(k) Plan") for its employees who have reached the age of 21 and
completed one "Year of Service" as that term is defined in the 401(k)
Plan. The Plan is intended to be qualified under Sections 401(a) and
401(k) of the Internal Revenue Code of 1986, as amended (the "Code").
Under the Plan, a participant may contribute up to 15% of his or her
compensation, not to exceed an amount which would cause the 401(k)
Plan to violate Section 401(k) and other applicable sections of the
Code. In addition, the Company made annual contributions in an
amount equal to 2-1/2% of each participant's compensation provided the
participant completes certain service requirements for the year to
which the contribution relates. Effective January 1997, the Plan was
modified to provide for Company contributions of 25% of the
participant's contribution up to 10% of that participant's annual
compensation. The Company may also make additional discretionary
contributions.
All participants are 100% vested in their own
contributions and in the earnings attributable to their
contributions. Vesting in the remainder of a participant's account
is based upon years of service with the Company. After three years
of service, a participant will be 20% vested, and will be vested by
an additional 20% for each of the following years of service, up to 7
years, when the participant will be 100% vested. Each participant is
entitled to the benefit that can be provided from his or her vested
account.
The 401(k) Plan permits withdrawals in the event of
termination of employment, retirement, disability, death or proven
financial hardship. Distributions from the 401(k) Plan are payable
in a lump sum or in installments over a period not to exceed the
assumed life expectancy of the participant or the assumed joint life
expectancy of the participant and his or her spouse.
Participants are offered a choice of five
investment funds in which to direct their contributions. The
Company's contributions under the 401(k) Plan are invested in the
manner designated by the Company, in its sole discretion.
COMPENSATION COMMITTEE REPORT
The Compensation Committee is comprised of Messrs.
Turchin, Gross, Schmidt and Formica. The Compensation Committee
reviews, recommends and approves changes to the Company's
compensation policies and programs and is responsible for reviewing
and approving the compensation of the Chief Executive Officer and
other senior officers of the Company.
The following report 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.
Compensation Philosophy
The Company believes that executive compensation
should be based upon value returned to shareholders. The Company has
developed and is developing compensation programs designed to reflect
Company performance and to be competitive in the marketplace. In
designing compensation programs, the Company attempts to reflect both
value created for shareholders while supporting the Company's
strategic goals. The Company's compensation programs reflect the
following themes:
. Compensation should be meaningfully related to
the value created for shareholders.
. Compensation programs should support the
Company's short-term and long-term strategic
goals and objectives.
. Compensation programs should promote the
Company's value and reward individuals for
outstanding contributions to the Company's
success.
. Short-term and long-term compensation should
be designed to attract and retain superior
executives.
The Company's executive compensation is based upon
three components, base salary, annual incentive bonuses and long-term
incentives, which are intended to serve the overall compensation
philosophy.
Base Salary
The base salary of each executive officer is
determined as a function of three principal factors: the
individual's performance, the relationship of the individual's salary
to similar executives in comparable companies, and increases in the
individual's responsibilities, whether through promotions or
otherwise. The base salaries of the Named Officers remained constant
in 1996.
Annual Incentive Bonus
The Company's annual incentive bonuses are designed
to reflect the individual officer's contribution to the profitability
of the Company and any special achievements by the respective
officers. Each officer's bonus is based upon the Company's
performance in various areas, such as sales, profit margins,
operating expenses and earnings before interest and taxes as compared
to a pre-determined plan for each officer for each year.
Long-Term Incentives
The Company believes that shareholder value is
enhanced by providing senior management as well as all employees with
the opportunity to participate in the growth in the value of the
Company's stock. The Board of Directors, including each member of
the Compensation Committee, therefore adopted the Employee Stock
Purchase Plan and the 1993 Senior Management Incentive and Non-
Qualified Stock Option Plan, as amended, and the 1995 Incentive and
Non-Qualified Stock Option Plan.
Each member of management is eligible for
participation in the stock option plan. No member of management with
the rank of vice president or higher is eligible to participate in
the stock purchase plan, which is open to all other employees of the
Company.
Stock options will be granted at the prevailing
market value and will have value only if the price of the Company's
stock increases. Grants that are made will generally vest over three
years. Executives must be employed by the Company at the time of
vesting in order to exercise the options.
The Compensation Committee
Leslie S. Turchin
Robert G. Gross
Philip M. Schmidt
Anthony L. Formica
PERFORMANCE GRAPH
The following graph compares the cumulative total
shareholders return on the Company's common stock with that of the
S&P 500 Stock Index, a broad market index published by Standard &
Poor's Corporation, and an industry index of radio, television and
consumer electronic stores. The comparison assumes that $100 was
invested in each of the Company's common stock, the stocks included
in the S&P 500 Stock Index and the stocks included in the industry
index on August 11, 1992, the date of the Company's initial public
offering. The indexes reflect formulas for dividend reinvestment and
weighing of individual stocks. This data was furnished by Media
General Financial Services, Inc.
<PAGE>
This graph 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 that
the Company specifically incorporate this graph by reference, and
shall not otherwise be deemed filed under such Acts.
COMPARISON OF CUMULATIVE TOTAL RETURN OF COMPANY
INDUSTRY INDEX AND BROAD MARKET
Fiscal Year Ending Aug. 11,
Company 1992 1992 1993 1994 1995 1996
_______ ____________________________________________
Tops Appliance City 100.00 162.50 137.50 39.29 17.86 9.38
Industry Index 100.00 146.58 159.92 149.36 130.33 128.80
Broad Market 100.00 104.11 114.61 116.12 159.76 196.44
THE BOARD OF DIRECTORS RECOMMENDS THAT THE
SHAREHOLDERS VOTE TO ELECT THE AFOREMENTIONED NOMINEE TO SERVE ON THE
BOARD OF DIRECTORS.
<PAGE>
PROPOSAL 2
RATIFICATION OF THE
SELECTION OF INDEPENDENT AUDITORS
The selection of independent auditors to examine
the financial statements of the Company for the year ending
December 30, 1997 to be transmitted or made available to shareholders
and filed with the Securities and Exchange Commission is to be
submitted to the meeting for ratification. Ernst & Young, LLP has
been selected by the Company's Board of Directors to examine such
financial statements. A member of Ernst & Young will be present at
the Annual Meeting and will be available to respond to appropriate
questions and will have the opportunity to make a statement.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE
SHAREHOLDERS VOTE FOR THE RATIFICATION OF ERNST & YOUNG, LLP AS THE
COMPANY'S INDEPENDENT AUDITORS.
GENERAL
The expense of this solicitation is to be borne by
the Company. The Company may also reimburse persons holding shares in
their names or in the names of their nominees for their expenses in
sending proxies and proxy material to their principals.
Unless otherwise directed, the persons named in the
accompanying form of proxy intend to vote all proxies received by
them in favor of the election of nominees to the Board herein, and
the ratification of selected independent auditors. All proxies will
be voted as specified.
Management does not intend to present any business
at the meeting other than that set forth in the accompanying Notice
of Annual Meeting, and it has no information that others will do so.
If other matters requiring the vote of the shareholders properly come
before the meeting and any adjournments thereof, it is the intention
of the persons named in the accompanying form of proxy to vote the
proxies held by them in accordance with their judgment on such
matters.
SHAREHOLDER PROPOSALS FOR THE 1998 ANNUAL MEETING
Shareholder proposals for inclusion in the proxy
materials related to the 1998 Annual Meeting of Shareholders must be
received by the Company no later than December 1, 1997. A
Shareholder must have been a record or beneficial owner of the
Company's common stock for at least one year prior to December 1,
1997, and the shareholder must continue to own such shares, worth at
least $1,000, through the date on which the Meeting is held.
The Company's by-laws outline procedures, including
minimum notice provisions, for shareholder nominations of directors
and other shareholder business to be brought before shareholders at
the Annual Meeting. A copy of the pertinent by-law provisions is
available upon request to Thomas L. Zambelli, Secretary, Tops
Appliance City, Inc., 45 Brunswick Avenue, CN-14, Edison, New Jersey
08818.
FORM 10-K ANNUAL REPORT
Upon written request by any shareholder entitled to
vote at the 1997 Annual Meeting, the Company will furnish that person
without charge a copy of the Form 10-K Annual Report which it filed
with the Securities and Exchange Commission for 1996, including
financial statements and schedules. If the person requesting the
report was not a shareholder of record on April 18, 1997, the request
must contain a good faith representation that the person making the
request was a beneficial owner of the Company's common stock at the
close of business on that date. Requests should be addressed to
Thomas L. Zambelli, Chief Financial Officer, Tops Appliance City,
Inc., 45 Brunswick Avenue, CN-14, Edison, New Jersey 08818.
By Order of the Board of Directors
TOPS APPLIANCE CITY, INC.
/s/ Robert G. Gross
__________________________
ROBERT G. GROSS,
Chairman of the Board
Edison, New Jersey
April 25, 1997
