-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UKihUOz5Fur4ki1G5ct06J8aAThKFu+d8XDkCoXOHV4fkHL/fM4y9VV/XdhftIQM NU/t1+VvOWTUXEOJgH+VBg== /in/edgar/work/0000905718-00-000258/0000905718-00-000258.txt : 20000714 0000905718-00-000258.hdr.sgml : 20000714 ACCESSION NUMBER: 0000905718-00-000258 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000713 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMERSON RADIO CORP CENTRAL INDEX KEY: 0000032621 STANDARD INDUSTRIAL CLASSIFICATION: [3651 ] IRS NUMBER: 223285224 STATE OF INCORPORATION: DE FISCAL YEAR END: 0402 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: SEC FILE NUMBER: 001-07731 FILM NUMBER: 672422 BUSINESS ADDRESS: STREET 1: NINE ENTIN RD STREET 2: PO BOX 430 CITY: PARSIPPANY STATE: NJ ZIP: 07054-0430 BUSINESS PHONE: 9738845800 MAIL ADDRESS: STREET 1: NINE ENTIN RD CITY: PARSIPPANY STATE: NJ ZIP: 07054 FORMER COMPANY: FORMER CONFORMED NAME: MAJOR ELECTRONICS CORP DATE OF NAME CHANGE: 19770921 DEF 14A 1 0001.txt DEFINITIVE PROXY STATEMENT SCHEDULE 14A (Rule 14a-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ) Filed by Registrant |X| Filed by a Party other than the Registrant |_| Check the appropriate box: |_| Preliminary Proxy Statement |_| Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |X| Definitive Proxy Statement |_| Definitive Additional Materials |_| Soliciting Material Pursuant to Rule 14a-12 EMERSON RADIO CORP. (Name of Registrant as Specified In Its Charter) ___________________________________________________________________________ (Name of Person(s) Filing Proxy Statement, If Other Than the Registrant) Payment of Filing Fee (Check the appropriate box): |X| No fee required. |_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. (1) Title of each class of securities to which transaction applies: ________________________________________________________________________________ (2) Aggregate number of securities to which transaction applies: ________________________________________________________________________________ (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): ________________________________________________________________________________ (4) Proposed maximum aggregate value of transaction: ________________________________________________________________________________ (5) Total Fee Paid ________________________________________________________________________________ |_| Fee paid previously with preliminary materials. |_| Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: ________________________________________________________________________________ (2) Form, Schedule or Registration Statement No: ________________________________________________________________________________ (3) Filing Party: ________________________________________________________________________________ (4) Date Filed: EMERSON RADIO CORP. Nine Entin Road P.O. Box 430 Parsippany, New Jersey 07054-0430 NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD AUGUST 10, 2000 Dear Stockholder: You are hereby given notice of and invited to attend in person or by proxy the 2000 Annual Meeting of Stockholders of Emerson Radio Corp. ("we", "our" or "Emerson") to be held at the Sheraton Parsippany Hotel, 199 Smith Road, Parsippany, New Jersey 07054 on Thursday, August 10, 2000 at 1:00 p.m. (Eastern Daylight Time). At this year's stockholders' meeting, you will be asked to elect five directors to serve for a one-year term and to transact such other business as may properly come before the meeting and any adjournment(s) thereof. The Board of Directors unanimously recommends that you vote FOR the directors nominated. Accordingly, please give careful attention to these proxy materials. Only stockholders of record of Emerson's common stock as of the close of business on June 28, 2000 (the "Record Date") are entitled to notice of and to vote at such meeting and any adjournment(s) thereof. The transfer books of the Company will not be closed. You are cordially invited to attend the meeting. However, whether or not you expect to attend the meeting, we want to have the maximum representation at the Annual Meeting and respectfully request that you date, execute and mail promptly the enclosed proxy in the enclosed stamped envelope for which no additional postage is required if mailed in the United States. You may revoke your proxy at any time prior to its use as specified in the enclosed proxy statement. By Order of the Board of Directors ELIZABETH J. CALIANESE Senior Vice President-Human Resources, General Counsel and Secretary Parsippany, New Jersey July 11, 2000 YOUR VOTE IS IMPORTANT. PLEASE EXECUTE AND RETURN PROMPTLY THE ENCLOSED PROXY CARD IN THE ENVELOPE PROVIDED HEREIN. EMERSON RADIO CORP. --------------------- PROXY STATEMENT --------------------- FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD AUGUST 10, 2000 --------------------- To Our Stockholders: This Proxy Statement is furnished to our stockholders for use at our Annual Meeting of Stockholders to be held at the Sheraton Parsippany Hotel, 199 Smith Road, Parsippany, New Jersey 07054, on August 10, 2000 at 1:00 p.m. (local time), or at any adjournment or adjournments thereof (the "Annual Meeting"). Emerson's stockholders of record as of the close of business on June 28, 2000 (the "Record Date") are entitled to vote at the Annual Meeting. We will begin mailing this Proxy Statement and the enclosed proxy to our stockholders on or about July 13, 2000. VOTING PROCEDURES AND REVOCABILITY OF PROXIES The accompanying proxy card is designed to permit each of our stockholders as of the Record Date to vote on each of the proposals brought before the Annual Meeting. As of the Record Date, there were 39,377,615 shares of our common stock, par value $.01 per share, issued and outstanding and entitled to vote at the Annual Meeting. Each outstanding share of our common stock is entitled to one vote. The holders of a majority of our outstanding shares of common stock, present in person or by proxy, will constitute a quorum for the transaction of business at the Annual Meeting. If a quorum is not present, the Annual Meeting may be adjourned from time to time until a quorum is obtained. Shares as to which authority to vote has been withheld with respect to the election of any nominee for director will not be counted as a vote for such nominee. Abstentions and broker non-votes are counted as stockholders who are present and entitled to vote and they count toward a quorum. A broker non-vote occurs when a nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that proposal and has not received instructions from the beneficial owner (despite voting on at least one other proposal for which the nominee does have discretionary authority or for which it has received instructions). Brokers holding shares of record for customers generally are not entitled to vote on certain "non-routine" matters unless they receive voting instructions from their customers. The accompanying proxy card provides space for you to vote in favor of, or to withhold voting for, the nominees for the Board of Directors. Directors are elected by plurality and the five nominees who receive the most votes will be elected. Abstentions and broker non-votes will not be taken into account in determining, and have no effect on, the outcome of the election of directors. The Board urges you to complete, sign, date and return the proxy card in the accompanying envelope, which is postage prepaid for mailing in the United States. When a signed proxy card is returned with choices specified with respect to voting matters, the proxies designated on the proxy card vote the shares in accordance with the stockholder's instructions. The proxies we have designated for the stockholders are Geoffrey P. Jurick and John P. Walker. If you desire to name another person as your proxy, you may do so by crossing out the name of the designated proxies and inserting the names of the other persons to act as your proxy. In that case, it will be necessary for you to sign the proxy card and deliver it to the person named as your proxy and for the named proxy to be present and vote at the Annual Meeting. Proxy cards so marked should not be mailed to us. If you sign your proxy card and return it to us and you have made no specifications with respect to voting matters, your shares will be voted for the election of the five nominees for director and, at the discretion of the proxies designated by us, on any other matter that may properly come before the Annual Meeting or any adjournment(s). You have the unconditional right to revoke your proxy at any time prior to the voting of the proxy by taking any act inconsistent with the proxy. Acts inconsistent with the proxy include notifying Emerson's Secretary in writing of your revocation, executing a subsequent proxy, or personally appearing at the Annual Meeting and casting a contrary vote. However, no revocation shall be effective unless notice of such revocation has been received by us at or prior to the Annual Meeting. ELECTION OF DIRECTORS Five directors are proposed to be elected at the Annual Meeting. If elected, each director will hold office until the next Annual Meeting of our stockholders or until his successor is elected and qualified. The election of directors will be decided by a plurality vote. All nominees named in this proxy statement are members of our present Board of Directors and have consented to serve if elected. We have no reason to believe that any of the nominees named will be unable to serve. If any nominee becomes unable to serve, 1.) the shares represented by the designated proxies will be voted for the election of a substitute as the Board may recommend, 2.) the Board may reduce the number of directors to eliminate the vacancy, or 3.) the Board may fill the vacancy at a later date after selecting an appropriate nominee. Nominations for election to the Board of Directors may be made by the Board, a nominating committee appointed by the Board or by any stockholder entitled to vote for the election of directors. Nominations made by stockholders must be made by written notice to Emerson's Secretary at its corporate offices in Parsippany, New Jersey, and must set forth as to each proposed nominee who is not an incumbent director: (a) the name, age, business address and, if known, residence address of each nominee proposed in such notice; (b) the principal occupation or employment of each such nominee; (c) the number of shares of our common stock that are beneficially owned by each such nominee and the nominating stockholder; and (d) any other information concerning the nominee that must be disclosed of nominees in proxy solicitations pursuant to Rule 14(a) of the Securities Exchange Act of 1934, as amended (we refer to it as the "Exchange Act"). Any such recommendation must be accompanied by a written statement from the individual nominee giving his or her consent to be named as a candidate and, if nominated and elected, to serve as a director. The current Board nominated the nominees named below for election to our Board of Directors and background information on each of the nominees is set forth below. See "Security Ownership of Certain Beneficial Owners and Management" for additional information about the nominees, including their ownership, purchase and sale of securities issued by the Company.
Year First Became Name Age Director Principal Occupation or Employment Robert H. Brown, Jr. 46 1992 Since January 1999, President and Chief Executive Officer of Frost Securities, Inc., an investment banking firm; from July 1998 to January 1999, President of RHB Capital, LLC; from January 1990 to July 1998, held a variety of positions with Dain Rauscher, formerly Rauscher Pierce Refsnes, Inc. ("Rauscher"), including Senior Vice President and Director of the Corporate Finance Department and Executive Vice President of Capital Markets; since April 1996, a Director of Claimsnet.com, which is traded on the Nasdaq Stock Market; from May 1993 through March 1999, a Director of Stevens Graphics Corp., which is traded on the American Stock Exchange. Peter G. Bunger 59 1992 Since 1990, a consultant with Savarina AG, an entity engaged in the business of portfolio management monitoring in Zurich, Switzerland; since October 1992, a Director of Savarina AG; since 1992, a Director of ISCS, a computer software company; since December 1996, a Director of Sport Supply Group, Inc., which is traded on the New York Stock Exchange ("SSG"). As of July 10, 2000, Emerson beneficially owned approximately 43.2% of the issued and outstanding common shares of SSG as determined by the most recent SSG documents filed with the Securities and Exchange Commission (which we refer to as the "SEC"). See "Certain Relationships and Related Transactions". Jerome H. Farnum 64 1992 Since July 1994, an independent consultant. For at least five years prior thereto, a senior executive with several of the entities comprising the Fidenas Group, as defined below, in charge of legal and tax affairs, accounting, asset and investment management, foreign exchange relations, and financial affairs. Stephen H. Goodman 56 1999 Since January 1998, President, Chief Executive Officer and a Director of the Singer Company, N.V. ("Singer") and a number of Singer's affiliates and subsidiaries; from March 1986 to December 1997, held a variety of positions with Bankers Trust Company, including Managing Director, Corporate Strategy, New York and Managing Director, Strategic Advisory and Mergers & Acquisitions Business, Asia. On September 6, 1999, GM Pfaff A.G., then a subsidiary of Singer, filed a voluntary petition for relief under the reorganization provisions of the German Bankruptcy Code, in the lower court of Kaiserslautern, Germany. On September 12 and 13, 1999, Singer and its U.S. subsidiaries, the holding companies for its foreign businesses, and a number of Singer's foreign operating subsidiaries, filed voluntary petitions for relief under the reorganization provisions of the United States Bankruptcy Code, in the United States District Court for the Southern District of New York. All of the bankruptcy petitions are still pending. Geoffrey P. Jurick 59 1990 Since July 1992, Chief Executive Officer of the Company; since December 1993, Chairman; since April 1997, President and previously served as our President from July 1993 to October 1994; since December 1993, served as a Director of Fidenas International Limited, L.L.C. and its predecessor ("FIN") and, since May 1994, an officer and general manager of Fidenas International; since May 1994, a Director and Chairman of GSE Multimedia Technologies Corporation ("GSE"), which is traded in the over-the-counter market; since March 1996, Chairman of Elision International Ltd. ("Elision"); for more than the past five years, held a variety of senior executive positions with several of the entities comprising the Fidenas group of companies ("Fidenas Group"); since December 1996, serves as a Director and Chairman of the Board and, since January 1997, Chief Executive Officer of SSG. See "Certain Relationships and Related Transactions".
THE BOARD OF DIRECTORS URGES YOU 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 June 28, 2000, the beneficial ownership of (i) each current Director; (ii) each Executive Officer named in the Summary Compensation Table ("Executive Officers"); (iii) the Directors and Executive Officers as a group and (iv) each stockholder known by us to own beneficially more than 5% of our outstanding shares of common stock. Except as otherwise indicated and based upon our review of information as filed with the SEC, we believe that the beneficial owners of the securities listed below have sole investment and voting power with respect to such shares, subject to community property laws where applicable.
Amount and Nature of Name and Address of Beneficial Owners Beneficial Ownership(1) Percent of Class Geoffrey P. Jurick (2) (3)** 14,575,109 36.0% Petra Stelling 8,177,533 20.2% Im Berghof 5 8700 Kusnacht Switzerland (4) The Chase Manhattan Bank 6,181,302 13.6% Special Loan Group 270 Park Avenue - 30th Floor New York, NY 10017 (5) Oaktree Capital Management 3,483,135 7.9% 550 South Hope St., 22nd Fl Los Angeles, CA 90071 (6) Thomas Hackett, Official Liquidator of 3,164,340 7.8% Fidenas International Bank Limited Price Waterhouse Coopers East Hill Street P.O. Box N-3910 Nassau, Bahamas (2) Robert H. Brown, Jr. (7)** 50,000 * Peter G. Bunger (7)** 25,000 * Jerome H. Farnum (7)** 25,000 * Stephen H. Goodman** - * Marino Andriani (8) 75,000 * Elizabeth J. Calianese (8) 30,000 * John J. Raab (8) 50,000 * John P. Walker (8) 200,000 * All Directors and Officers 15,075,109 37.3% as a Group (11 persons) (9) ______________________________________________
(*) Less than one percent (**) Director (All current directors are nominees for director.) (1) Based on 39,377,615 shares of common stock outstanding as of June 28, 2000, plus shares of common stock under option of any Director or Executive Officer, exercisable within 60 days. Except as otherwise indicated, the beneficial ownership table does not include (i) shares of common stock issuable upon conversion of 3,677 shares of Emerson's Series A Preferred Stock, (ii) common stock issuable upon conversion of certain warrants issued by Emerson, (iii) common stock issuable upon exercise of outstanding options, which are not currently exercisable within 60 days, or (iv) common stock issuable upon conversion of Emerson's 8-1/2% Senior Subordinated Convertible Debentures Due 2002 (the "Debentures"). (2) Mr. Jurick's beneficial ownership consists of 100 shares of common stock directly owned by him, and 9,875,000 shares of common stock held by Mr. Jurick, 3,164,340 and 935,669 shares of common stock held by Thomas Hackett, Official Liquidator of Fidenas International Bank Limited ("Fidenas Liquidator") and Barclays Bank PLC ("Barclays"), respectively, pursuant to the provisions of the Termination, Settlement, Redemption and Option Agreement, dated and so ordered by the United States District Court for the District of New Jersey (the "U.S. District Court") as of May 25, 2000 by and between Emerson, Mr. Jurick and his affiliated companies FIN, Elision and GSE, the Fidenas Liquidator and Barclays (the "Option Agreement"). All of the shares of common stock are subject to certain restrictions. Mr. Jurick has the right to vote the shares of common stock held by the Fidenas Liquidator and Barclays pursuant to the proxy granted to Mr. Jurick under the terms of the Option Agreement. See "Certain Relationships and Related Transactions - Certain Outstanding Common Stock". (3) Includes options to purchase 600,000 shares of common stock, exercisable within 60 days. (4) Pursuant to the Option Agreement, Mrs. Stelling holds 8,177,533 shares of common stock in her name. All of the shares of common stock are subject to certain restrictions. See "Certain Relationships and Related Transactions - Certain Outstanding Common Stock". (5) Consists of common shares issuable upon conversion of the owner's holdings of Emerson's Series A Preferred Stock if such holdings were converted into shares of Emerson's common stock. The percentage of beneficial ownership assumes that the common shares that would be issued upon conversion are outstanding. (6) Based on information set forth in a Schedule 13D, dated May 22, 1998, as amended and filed with the SEC by Oaktree Capital Management LLC ("Oaktree"), Kenneth Grossman and OCM Principal Opportunities Fund, L. P. Consists of common shares issuable upon conversion of the owner's holdings of Emerson's Debentures if such holdings were converted into shares of Emerson's common stock. The percentage of beneficial ownership assumes that the common shares that would be issued upon conversion are outstanding. (7) Comprised of options issued pursuant to Emerson's 1994 Non-Employee Director Stock Option Plan. See "Security Ownership of Certain Beneficial Owners and Management--Compensation of Directors." (8) Comprised of options issued pursuant to Emerson's 1994 Stock Compensation Program. Options vest in annual increments of one-third, commencing one year from the date of grant, and their exercise is contingent on continued employment with Emerson. (9) Includes 1,100,000 shares of common stock subject to unexercised stock options which were exercisable within 60 days under Emerson's Stock Compensation Program. Excludes options to purchase an aggregate of 275,000 shares of common stock not currently exercisable within 60 days. BOARD OF DIRECTORS AND COMMITTEES Emerson's business is managed under the direction of our Board of Directors. The Board meets during our fiscal year to review significant developments affecting Emerson and to act on matters requiring Board approval. The Board of Directors held six formal meetings during the fiscal year ended March 31, 2000 ("Fiscal 2000") and acted by unanimous written consent three times. During Fiscal 2000, each member of the Board participated in at least 80% of all Board meetings and 100% of all committee meetings held during the period for which he served as a director and/or committee member except Mr. Brown who attended 50% of all Board meetings, 100% of all Audit Committee meetings and none of the Compensation and Personnel Committee meetings. The standing committees of our Board during Fiscal 2000 were the Audit Committee, the Compensation and Personnel Committee, the Executive Committee and the Special Committee to devote attention to specific subjects and to assist the Board in the discharge of its responsibilities. The functions of these committees and their current members are described below. Audit Committee. Our Audit Committee, and each of its three members, Messrs. Farnum (Chairman), Brown and Goodman, fulfills the requirements of the NASD rules applicable to members of the American Stock Exchange with regard to independence and qualification. The Audit Committee reviews the adequacy of Emerson's internal system of accounting controls, confers with the independent auditors concerning their examination of our books and records and recommends to the Board the appointment of a firm of independent certified public accountants to conduct audits of our accounts and affairs. During Fiscal 2000, the Audit Committee met one time. Our Board of Directors has adopted a written charter for its Audit Committee, a copy of which is included in this Proxy Statement as Appendix A. Compensation and Personnel Committee. Our Compensation and Personnel Committee is presently comprised of Messrs. Brown (Chairman), Bunger and Farnum (each of whom is a non-employee Director). The Committee (i) makes recommendations to the full Board concerning remuneration arrangements for senior executive management; (ii) administers our 1994 Stock Compensation Program; and (iii) makes such reports and recommendations, from time to time, to the Board upon such matters as the Committee may deem appropriate or as may be requested by the Board. During Fiscal 2000, the Compensation Committee met one time. See "Executive Compensation and Other Information--Report of Compensation and Personnel Committee". Executive Committee. Our Executive Committee is presently comprised of Messrs. Brown, Bunger, Farnum and Jurick (Chairman). Mr. Goodman is an alternate Committee member. Subject to the provisions of the Company's By-Laws, the Executive Committee has all of the power and authority of the full Board with certain exceptions. During Fiscal 2000, the Executive Committee did not meet. Special Committee. Our Special Committee, comprised of Messrs. Brown and Goodman, was formed as part of a Stipulation and Order of Settlement, dated June 11, 1996, between the Company, Mr. Jurick, FIN, GSE, Elision, Petra and Donald Stelling (the "Stellings"), the Fidenas Liquidator and Barclays (the "Settlement Agreement") to evaluate, and make recommendations to the Board regarding, any offer to purchase the Settlement Shares which would result in a change of control of Emerson as defined in Emerson's Senior Secured Credit Facility and the Indenture governing the Debentures, as defined below. During Fiscal 2000, the Special Committee did not meet and by Order, dated March 3, 2000, the U.S. District Court terminated the Settlement Agreement. See "Certain Relationships and Related Transactions - Certain Outstanding Common Stock". The Board of Directors did not have a standing nominating committee, or any other committee performing similar functions during Fiscal 2000. Our Board performed the functions customarily attributable to a nominating committee. Compensation of Directors In Fiscal 2000, Emerson Directors who were not employees were paid $10,000 per year; members of the Compensation and Personnel Committee were paid an additional $5,000 per year; members of the Executive Committee were paid an additional $5,000 per year; members of the Audit Committee were paid an additional $7,500 per year; and members of the Special Committee were paid an additional $2,500 per year. Accordingly, during Fiscal 2000, Messrs. Brown, Bunger, Farnum and Goodman received $30,000, $20,000, $27,500 and $25,000, respectively. All compensation paid to our directors is paid in quarterly installments. No compensation is paid to Emerson employees in their capacity as Director. Additionally, each director is eligible to participate in Emerson's 1994 Non-Employee Director Stock Option Plan. EXECUTIVE COMPENSATION AND OTHER INFORMATION Compensation of Executive Officers The following table sets forth certain information regarding compensation paid during each of our last three fiscal years to our Chief Executive Officer and each of our other four most highly compensated Executive Officers. Summary Compensation Table The following table summarizes for the years indicated the compensation awarded to, earned by, or paid to the Executive Officers for services rendered in all capacities to Emerson:
SECURI- TIES OTHER UNDER- ALL ANNUAL LYING OTHER COMPEN- NAME AND PRINCIPAL POSITION(S) FISCAL COMPENSATION OPTIONS SATION (2) YEAR SALARY BONUS (1) GEOFFREY P. JURICK 2000 $411,600 $ - $ 67,910 - $ - CHAIRMAN OF THE 1999 411,600 - 108,145 - 4,844 BOARD, CHIEF 1998 321,407 - 125,208 - 13,059 EXECUTIVE OFFICER AND PRESIDENT (3) MARINO ANDRIANI 2000 385,000 557,562 8,400 225,000 14,679 PRESIDENT, EMERSON 1999 385,000 - 8,400 75,000 14,032 RADIO CONSUMER 1998 385,000 - 8,400 - 11,656 PRODUCTS CORPORATION (4) JOHN J. RAAB 2000 210,000 30,000 8,400 - 10,544 EXECUTIVE VICE 1999 210,000 - 8,400 50,000 10,100 PRESIDENT - 1998 210,000 - 8,400 - 7,780 INTERNATIONAL (4) ELIZABETH CALIANESE 2000 144,231 50,923 8,400 - 7,082 SENIOR VICE PRESIDENT - 1999 125,000 25,000 8,400 - 7,110 HUMAN RESOURCES, 1998 102,503 10,000 8,400 30,000 1,687 SECRETARY AND GENERAL COUNSEL (4) JOHN P. WALKER 2000 100,000 25,000 - - 2,400 EXECUTIVE VICE 1999 100,000 50,000 - - 2,400 PRESIDENT AND CHIEF 1998 107,692 50,000 - - 2,721 FINANCIAL OFFICER (5)
(1) Other Annual Compensation consists of (i) car allowance and auto expenses in the annual amount of $8,400, payable in equal monthly installments, to Messrs. Andriani and Raab and Ms. Calianese in Fiscal 2000, 1999 and 1998, respectively, and (ii) temporary lodging expenses and associated tax gross-ups in the amount of $67,910, $108,145 and $125,208 for Mr. Jurick, for Fiscal 2000, 1999 and 1998, respectively. (2) All Other Compensation consists of Emerson's contribution to our 401(k) employee savings plan, group health, life insurance and disability insurance. In Fiscal 1998, we also paid $7,170 in premiums for a life insurance policy for Mr. Jurick. (3) The salary shown for Mr. Jurick includes our salary reimbursement from SSG of $135,414 in Fiscal 1998 for services provided by Mr. Jurick to SSG. Pursuant to our Management Services Agreement with SSG ("Management Services Agreement"), effective October 18, 1997 we reduced Mr. Jurick's salary by $80,000 and are no longer reimbursed by SSG. See "Certain Relationships and Related Transactions - Management Services Agreement". (4) In November 1995, Mr. Raab was granted stock options to purchase 50,000 shares of common stock at an exercise price of $2.875 per share. In April 1996, Mr. Andriani was granted stock options to purchase 75,000 shares of common stock at an exercise price of $2.563 per share and in October 1996, Ms. Calianese was granted stock options to purchase 30,000 shares of common stock at an exercise price of $ 2.25 per share. These options were subsequently repriced to $1.00 and were reported as compensation in the fiscal year they are repriced. In October, 1999, our Board authorized granting Mr. Andriani stock options to purchase an additional 225,000 shares of common stock at an exercise price of $1.00 per share. Pursuant to our Stock Compensation Plan, these options will vest in equal installments over 3 years, commencing one year from the date of grant, and their exercise is contingent on continued employment with Emerson. (5) Effective January 1998, we no longer pay Mr. Walker's salary directly. However, pursuant to the Management Services Agreement, we reimburse SSG for Mr. Walker's salary and bonus per year. We reimbursed SSG in the approximate amounts of $100,000 and $50,000 for each of Fiscal 2000 and 1999. See "Certain Relationships and Related Transactions - Management Services Agreement". Option Grants During 2000 Fiscal Year Potential Realizable Value at Assumed Annual Rates of Stock Individual Grants Price Appreciation for Option Term (2) % of Total Number Options Granted Exercise of Options to Employees Price Per Expiration Name Granted (1) in Fiscal 2000 Share Date 5% 10% - ----------------------------- -------------- ------------------- -------------- ------------ ------------- ------------- GEOFFREY P. JURICK - - - - - - MARINO ANDRIANI 225,000 75% $1.00 01/21/10 $0 $0 JOHN J. RAAB - - - - - - ELIZABETH J. CALIANESE - - - - - - JOHN P. WALKER - - - - - -
1. The stock options were granted under the 1994 Stock Compensation Program, and, unless otherwise designated at the time of grant, are exercisable commencing one year after the grant date in three equal annual installments, with full vesting occurring on the third anniversary of the date of the grant. 2. The dollar amounts under these columns are the result of calculations at the assumed compounded market appreciation rates of 5% and 10% as required by the Securities and Exchange Commission over a ten-year term and therefore, are not intended to forecast possible future appreciation, if any, of the stock price. Option Exercises During Fiscal 2000 and Fiscal 2000 Year End Holdings The following table provides information related to options exercised by our Executive Officers during Fiscal 2000 and the number and value of options held at the end of our Fiscal 2000. We do not have any outstanding stock appreciation rights. Option Exercises During 2000 Fiscal Year and Fiscal Year - End Option Values
Number of Securities Value of Underlying Unexercised Unexercised In-the-Money Options/SARs Options/SARs Shares at FY-End at FY-End Acquired Value (#) ($)(1) on Exercise Realized Exercisable/ Exercisable/ Name (#) ($) Unexercisable Unexercisable - ------------------------- ------------- ------------ ------------------ ------------------------------ Geoffrey P. Jurick --- --- 600,000/0 $ 0/$ 0 Marino Andriani --- --- 75,000/225,000 $ 0/$ 0 John J. Raab --- --- 50,000/0 $ 0/$ 0 Elizabeth J. Calianese --- --- 30,000/0 $ 0/$ 0 John P. Walker --- --- 200,000/0 $ 0/$ 0
(1) The closing price for our common stock as reported by the American Stock Exchange on March 31, 2000 was $.75. Value is calculated on the basis of the difference between $.75 and the option exercise price of "in the money" options, multiplied by the number of shares of our common stock underlying the option. As of March 31, 2000, none of the outstanding options were exercisable at a share price below $.75. Certain Employment Contracts On August 13, 1992, Geoffrey P. Jurick, our Chairman, Chief Executive Officer and President, entered into five-year employment agreements ("Jurick Employment Agreements") with Emerson and two of its wholly-owned subsidiaries, Emerson Radio (Hong Kong) Ltd. and Emerson Radio International Ltd. (formerly Emerson Radio (B.V.I.) Ltd.) providing for an aggregate annual compensation of $490,000 as of April 1, 1995. Effective October 18, 1997, Mr. Jurick's employment agreement with Emerson (but not the wholly owned subsidiaries) was amended and Mr. Jurick's annual salary under the Jurick Employment Agreements was reduced to $410,000. In addition to his base salary, the Jurick Employment Agreements provided that Mr. Jurick was entitled to an annual bonus upon recommendation by the Compensation and Personnel Committee of Emerson's Board of Directors, subject to the final approval of the Emerson's Board of Directors. By letter agreement dated April 16, 1997, the terms of the Jurick Employment Agreements were extended until March 31, 2000. Pursuant to the Management Services Agreement, SSG reimbursed Emerson for $125,444 and $46,527 in salary payments made by us to Mr. Jurick in Fiscal 1999 and 1998, respectively, for the benefit of SSG. The Management Services Agreement was amended as of October 18, 1997 and SSG no longer reimburses us for any of Mr. Jurick's salary payments, but pays Mr. Jurick directly. See "Certain Relationships and Related Transactions - Management Services Agreement". Subject to certain conditions, each of the Jurick Employment Agreements granted severance benefits, through expiration of the respective terms of each of such agreements, commensurate with Mr. Jurick's base salary, in the event that his employment terminated due to permanent disability, without cause or as a result of constructive discharge (as defined therein). In the event that Mr. Jurick's employment terminated due to termination for "cause", because Mr. Jurick unilaterally terminated the agreements or for reasons other than constructive discharge or permanent disability, the agreements provided that Mr. Jurick would only be entitled to base salary earned through the applicable date of termination. Mr. Jurick's employment agreements are presently expired. Compensation Committee Interlocks and Insider Participation Geoffrey P. Jurick serves as Chairman of the Board and Chief Executive Officer of Emerson and SSG. John P. Walker serves as our Executive Vice President and Chief Financial Officer and as President and a Director of SSG. Mr. Bunger, who is a Director of Emerson and SSG, serves on the Compensation Committees of both companies. Geoffrey P. Jurick was also a member of our Board during Fiscal 2000 and participated in deliberations concerning senior executive officer compensation. Report of Compensation and Personnel Committee The Compensation and Personnel Committee of our Board (the "Compensation Committee") contains three non-employee Directors and oversees our senior executive compensation strategy. The strategy is implemented through policies designed to support the achievement of our business objectives and the enhancement of stockholder value. Our Compensation Committee reviews, on an ongoing basis, all aspects of senior executive compensation and its policies support the following objectives: o The reinforcement of management's concern for enhancing stockholder value. o The attraction, hiring and retention of qualified executives. o The provision of competitive compensation opportunities for exceptional performance. The basic elements of our senior executive compensation strategy are: Base salary. Base salaries for our senior executive managers represent compensation for the performance of defined functions and assumption of defined responsibilities. The Compensation Committee reviews each senior executive's base salary on an annual basis. In determining salary adjustments, the Compensation Committee considers our growth in earnings and revenues and the executive's performance level, as well as other factors relating to the executive's specific responsibilities. Also considered are the executive's position, experience, skills, potential for advancement, responsibility, and current salary in relation to the expected level of pay for the position. Our Compensation Committee exercises its judgment based upon the above criteria and does not apply a specific formula or assign a weight to each factor considered. Annual incentive compensation. At the beginning of each year, our Board establishes our performance goals for that year, which may include target increases in sales, net income and earnings per share, as well as more subjective goals with respect to marketing, product introduction and expansion of customer base. Long-term incentive compensation. Our long-term incentive compensation for management and employees consists of the 1994 Stock Compensation Program. Our Compensation Committee views the granting of stock options as a significant method of aligning management's long-term interests with those of the stockholders and determines awards to executives based on its evaluation of criteria that include responsibilities, compensation, past and expected contributions to the achievement of Emerson's long-term performance goals. Stock options are designed to focus executives on our long-term performance by enabling them to share in any increases in value of our stock. Our Compensation Committee encourages executives, individually and collectively, to maintain a long-term ownership position in our stock. The Compensation Committee believes this ownership, combined with a significant performance-based incentive compensation opportunity, forges a strong linkage between our executives and stockholders. Compensation of the Chief Executive Officer Mr. Geoffrey P. Jurick is our Chief Executive Officer, Chairman of the Board of Directors and President. The Compensation Committee considered the results in all aspects of our business, and the terms of Mr. Jurick's employment agreement with Emerson, in its review of his performance during Fiscal 2000. Mr. Jurick's annual compensation for Fiscal 2000, comprised of annual base salary of $411,600, is consistent with our Committee's targeted annual compensation level and with the limitations previously established by the Settlement Agreement. See "Certain Relationships and Related Transactions - Certain Outstanding Common Stock". Mr. Jurick's salary from us was reduced by $80,000 in Fiscal 1998 as a result of SSG paying him directly. See "Certain Relationships and Related Transactions - Management Services Agreement". The terms and conditions of Mr. Jurick's employment agreement are discussed above. See "Executive Compensation and Other Information - Certain Employment Contracts". Policy on Qualifying Compensation Our Board has considered the potential impact of Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"). Section 162(m) generally provides that, for tax years beginning on or after January 1, 1994, a public company's deduction for compensation paid to its covered employees is limited to $1 million per year, subject to certain exceptions. Since the cash compensation of each of our covered employees is below the $1 million threshold, the Board believes that Section 162(m) will not reduce the federal income tax deduction available to Emerson. Emerson's policy is to qualify, to the extent reasonable, our Executive Officers' compensation for deductibility under applicable tax laws. However, the Board of Directors believes that its primary responsibility is to provide a compensation program that will attract, retain and reward the executive talent necessary to Emerson's success. Consequently, the Board recognizes that the loss of a tax deduction could be necessary in some circumstances. This report is submitted by the members of the Board of Directors and the Compensation and Personnel Committee that were in existence at the end of Fiscal 2000. Board of Directors Compensation and Personnel Committee Geoffrey P. Jurick, Chairman Robert H. Brown, Jr., Chairman Robert H. Brown, Jr. Peter G. Bunger Peter G. Bunger Jerome H. Farnum Jerome H. Farnum Stephen H. Goodman This report shall not be deemed incorporated by reference in any filing by Emerson under the Securities Act of 1933 or the Securities Exchange Act of 1934 except to the extent that Emerson specifically incorporates this information by reference, and shall not otherwise be deemed filed under either act. COMPARISON OF CUMULATIVE TOTAL RETURN Share Price Performance Graph The following graph shows a comparison of cumulative total returns on our common stock for the period April 1, 1995 to March 31, 2000, with the cumulative total return over the same period for the American Stock Exchange and a peer group of companies. Companies used for the peer group are Cobra Electronics Corp., Matsushita Electric Industrial Co. Ltd., Recoton Corp. and Sony Corp. In selecting companies to be part of the peer group, we focus on publicly traded companies that design and/or distribute consumer electronic products, which have characteristics similar to ours in terms of one or more of the following: type of product, distribution channels, sourcing or sales volume. The comparison assumes the investment of $100 in our common stock on April 1, 1995 and reinvestment of all dividends. The information in the graph was provided by Media General Financial Services ("MGFS"). COMPARISON OF CUMULATIVE TOTAL RETURN OF EMERSON RADIO CORP., PEER GROUP INDEX AND BROAD MARKET INDEX FISCAL YEAR ENDING Company/Index/Market 1995 1996 1997 1998 1999 2000 Emerson Radio Corp 100 82.00 34.00 14.00 24.00 24.00 Peer Group Index 100 111.86 114.26 127.66 146.39 329.90 Amex Market Index 100 120.89 122.11 159.50 150.93 231.44 The Customer Selected Stock List is made up of the following securities: Cobra Electronics Corp. Matsushita Elec. Ind. Corp. Recoton Corp. Sony Corp. The stock price performance depicted in the above graph is not necessarily indicative of future price performance. The Share Price Performance Graph will not be deemed to be incorporated by reference in any filing by Emerson under the Securities Act or the Exchange Act except to the extent that Emerson specifically incorporates the graph by reference. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Relationship with Sport Supply Group, Inc. As of July 10, 2000 and as determined by the most recent SSG documents filed with the SEC, Emerson and Emerson Radio (Hong Kong) Ltd. ("Emerson HK"), our wholly owned subsidiary, owned 2,578,500 shares, or approximately 35.4%, of the issued and outstanding shares of SSG common stock. Emerson also owns 5-year warrants to acquire an additional 1,000,000 shares of SSG common stock at an exercise price of $7.50 per share, subject to standard anti-dilution adjustments ("Warrants"). If Emerson exercises all of the Warrants, we will own approximately 43.2% of the issued and outstanding shares of SSG common stock. SSG's Board of Directors now includes the following people that are associated with Emerson: Geoffrey P. Jurick, Chairman, Chief Executive Officer and President of Emerson and Chairman and Chief Executive Officer of SSG; John P. Walker, Executive Vice President and Chief Financial Officer of Emerson and President and a Director of SSG; and Peter G. Bunger, a Director of both companies and member of the Compensation Committee of each Company. Messrs. Jurick and Walker split their time between the two companies. Management Services Agreement - Sport Supply Group, Inc. The Management Services Agreement between Emerson and SSG implements a program whereby SSG performs certain services for us in exchange for a fee. The services include payroll, banking, computer/management information systems, payables processing, warehouse services (including subleasing warehouse storage space), provision of office space and financial management services. The Management Services Agreement may be terminated by either SSG or us on sixty (60) days' prior notice. We were billed $488,000, $636,000 and $272,000 for services provided pursuant to this agreement during Fiscal 2000, 1999 and 1998 respectively. Effective October 18, 1997, SSG began paying Mr. Jurick directly for his services. Effective January 15, 1998, we began reimbursing SSG for base salary and bonus paid to Mr. Walker for our benefit in lieu of paying Mr. Walker directly. Emerson billed SSG approximately $135,000 towards Mr. Jurick's salary during Fiscal 1998. Certain Outstanding Common Stock Pursuant to our bankruptcy restructuring plan, on March 31, 1994, 30 million shares of Emerson's common stock were issued to GSE, FIN and Elision (collectively, the "Affiliated Entities"), affiliates of Geoffrey P. Jurick, our Chairman of the Board, Chief Executive Officer and President. On June 11, 1996, as part of a global settlement of all litigation between Emerson, the Stellings, the Fidenas Liquidator, Barclays, Mr. Jurick and the Affiliated Entities, the parties executed the Settlement Agreement in the U. S. District Court which terminated substantially all litigation between the parties and provided for, among other things, the payment by Mr. Jurick and the Affiliated Entities of $49.5 million to the Stellings, the Fidenas Liquidator and Barclays (the "Creditors"), to be paid from the proceeds of the sale of 29.2 million shares of Emerson common stock (the "Settlement Shares") owned by the Affiliated Entities. In addition, Mr. Jurick was to have been paid the sum of $3.5 million from the sale of the Settlement Shares. The Settlement Shares were deposited with the Court in two pools: Pool A consisting of 15.3 million shares and Pool B consisting of the number of shares for which Mr. Jurick must retain beneficial ownership of voting power to avoid an event of default arising out of a change of control pursuant to the terms of Emerson's Loan and Security Agreement ("Senior Secured Credit Facility") with a U.S. financial institution (the "Lender") and/or the Indenture ("Indenture") governing our 8 1/2% Senior Subordinated Convertible Debentures Due 2002 (the "Debentures"). On March 3, 2000, pursuant to the request of the Creditors, the U.S. District Court terminated the Settlement Agreement upon the ground that there was no reasonable prospect that the goals contemplated by the Settlement Agreement could be accomplished and scheduled a hearing to determine, among other things, the rights and remedies of the various parties. On April 19, 2000, the Court ruled that the Settlement Shares were to be distributed to the Creditors as follows: the Fidenas Liquidator - 44.44%, Stelling - 42.42% and Barclays - 13.14%. The Creditors had previously agreed that Mr. Jurick retain control of all beneficial ownership required by the Senior Secured Credit Facility and/or the Indenture to avoid an event of default arising out of a change in control. On May 25, 2000, the Court implemented, in part, its termination of the Settlement Agreement by approving the transactions contemplated in the Option Agreement whereby it was agreed that: 1.) the Settlement Shares would be reregistered as follows: the Fidenas Liquidator - 5,402,600, the Fidenas Liquidator - 3,164,340, Stelling - 8,177,533, Barclays - 1,597,400, Barclays - 935,669 and Mr. Jurick - 9,875,000 (Mr. Jurick's shares represent the amount required to be held by Mr. Jurick pursuant to our Senior Secured Credit Facility and/or the Indenture); 2.) the Company would purchase, pro rata, an aggregate of 7,000,000 shares from the Fidenas Liquidator and Barclays for $6 million ("Initial Purchase"); 3.) Mr. Jurick's shares, the Fidenas Liquidator's and Barclays' remaining shares, Consent Judgments and their Releases would be deposited with the Court and Mr. Jurick granted the Proxy to vote the Fidenas Liquidator's and Barclays' shares so deposited; 4.) the Fidenas Liquidator and Barclays would grant Emerson (or Jurick, if Emerson was unable or unwilling to exercise) a one year option to purchase, pro rata, an additional 4,100,009 shares (the "Creditor Option Shares") at a price of $1.34 per share; 5.) Emerson (or Jurick) would have the right, at its sole option, to extend the option for an additional one year on each of the first and second year anniversaries of the Initial Purchase upon notice and payment to the Fidenas Liquidator and Barclays, pro rata, of $500,000 for the first extension and $2.55 million for the second extension. (None of the payment for the first extension but $2 million of the payment for the second extension would be credited to the purchase price of the Creditor Option Shares upon exercise of the option); 6.) in the event the option was exercised, the Fidenas Liquidator and Barclays would deliver to Emerson (or Jurick) stock certificates representing their Creditor Option Shares and would deliver to Mr. Jurick their Consent Judgments, Releases and 57.58% of Mr. Jurick's shares; and, 7.) in the event the option was not exercised or an option extension payment not timely made, upon filing of a Certification, the Fidenas Liquidator and Barclays would be entitled to the immediate receipt of their Releases and Consent Judgments. Additionally, 57.58% of Mr. Jurick's shares would be distributed, pro rata, to the Fidenas Liquidator and Barclays upon the earlier of the maturity or payment date of the Debentures. Other than the division of the Settlement Shares, the Court has not yet implemented the termination of the Settlement Agreement as to Stelling. Future Transactions and Loans Emerson has adopted a policy that all future affiliated transactions and loans will be made or entered into on terms no less favorable to us than those that can be obtained from unaffiliated third parties. In addition, all future affiliated transactions and loans, and any forgiveness of loans, must be approved by a majority of the independent outside members of our Board who do not have an interest in the transactions. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Securities Exchange Act of 1934, as amended (we refer to it as "Section 16(a)") requires our Officers and Directors, and persons who own more than 10% of a registered class of Emerson's equity securities to file reports of ownership and changes in ownership with the SEC and the American Stock Exchange. Officers, Directors and greater than 10% stockholders are required by certain regulations to furnish us with copies of all Section 16(a) forms they file. Based solely on its review of the copies of such forms received by us, we believe that, during Fiscal 2000, our Officers, Directors and greater than 10% beneficial owners have complied with all applicable filing requirements with respect to our equity securities other than a Form 3 with respect to the beneficial ownership of The Chase Manhattan Bank. STOCKHOLDER PROPOSALS A proper proposal submitted by one of our stockholders in accordance with applicable rules and regulations for presentation at our next annual meeting that is received at our principal executive office by April 15, 2001 will be included in our Proxy Statement and form of proxy for that meeting. If you desire to bring a proposal before the next annual meeting and such proposal is not timely submitted for inclusion in Emerson's Proxy Statement, you can still submit the proposal if it received by the Company no later than June 1, 2001. PERSONS MAKING THE SOLICITATION The enclosed proxy is solicited on behalf of our Board. We will pay the cost of soliciting proxies in the accompanying form. Our officers may solicit proxies by mail, telephone, telegraph or fax. Upon request, we will reimburse brokers, dealers, banks and trustees, or their nominees, for reasonable expenses incurred by them in forwarding proxy material to beneficial owners of our shares of common stock. We have retained the services of American Stock Transfer & Trust Company to solicit proxies by mail, telephone, telegraph or personal contact. The estimated cost of the solicitation will be approximately $20,000 plus out-of-pocket expenses. INDEPENDENT PUBLIC ACCOUNTANTS Ernst & Young LLP, independent certified public accountants, has been selected by our Board as our independent auditor for the current year. A representative of Ernst & Young LLP is expected to be present at the Annual Meeting, will have an opportunity to make a statement if he desires to do so and is expected to be available to respond to appropriate questions. OTHER MATTERS The Board of Directors is not aware of any matter to be presented for action at the meeting other than the matters set forth herein. Should any other matter requiring a vote of stockholders arise, the proxies in the enclosed form confer upon the person or persons entitled to vote the shares represented by such proxies discretionary authority to vote the same in accordance with their best judgment in the interest of the Company. FINANCIAL STATEMENTS We will provide a copy of our Annual Report on Form 10-K for the fiscal year ended March 31, 2000 (exclusive of exhibits), without charge, to each person to whom a copy of this Proxy Statement is delivered, upon written or oral request. Requests should be directed to Investor Relations (Attention: Elizabeth J. Calianese, Senior Vice President-Human Resources, General Counsel and Secretary), Emerson Radio Corp., Nine Entin Road, Parsippany, New Jersey 07054. By Order of the Board of Directors, ELIZABETH J. CALIANESE Senior Vice President-Human Resources, General Counsel and Secretary July 11, 2000 APPENDIX A AUDIT COMMITTEE OF THE BOARD OF DIRECTORS OF EMERSON RADIO CORP. AUDIT COMMITTEE CHARTER Organization This charter governs the operations of the Audit Committee of Emerson Radio Corp. ("Emerson"). The Committee shall review and reassess the charter at least annually and obtain the approval of the Board of Directors. The Committee shall be appointed by the Board of Directors and shall comprise at least three directors, each of whom are independent of management and Emerson. Members of the Committee shall be considered independent if they have no relationship that may interfere with the exercise of their independence from management and Emerson. All Committee members shall be financially literate, [or shall become financially literate within a reasonable period of time after appointment to the Committee,] and at least one member shall have accounting or related financial management expertise. Statement of Policy The Audit Committee shall provide assistance to the Board of Directors in fulfilling their oversight responsibility to the shareholders, potential shareholders, the investment community, and others relating to Emerson's financial statements and the financial reporting process, the systems of internal accounting and financial controls, the internal audit function, the annual independent audit of Emerson's financial statements, and the legal compliance and ethics programs as established by management and the Board. In so doing, it is the responsibility of the Committee to maintain free and open communication between the Committee, independent auditors, the internal auditors and Emerson's management. In discharging its oversight role, the Committee is empowered to investigate any matter brought to its attention with full access to all of Emerson's books, records, facilities, and personnel and the power to retain outside counsel, or other experts for this purpose. Responsibilities and Processes The primary responsibility of the Audit Committee is to oversee Emerson's financial reporting process on behalf of the Board and report the results of their activities to the Board. Management is responsible for preparing Emerson's financial statements, and the independent auditors are responsible for auditing those financial statements. The Committee in carrying out its responsibilities believes its policies and procedures should remain flexible, in order to best react to changing conditions and circumstances. The Committee should take the appropriate actions to set the overall corporate "tone" for quality financial reporting, sound business risk practices, and ethical behavior. The following shall be the principal recurring processes of the Audit Committee in carrying out its oversight responsibilities. The processes are set forth as a guide with the understanding that the Committee may supplement them as appropriate. o The Committee shall have a clear understanding with management and the independent auditors that the independent auditors are ultimately accountable to the Board and the Audit Committee, as representative of Emerson's shareholders. The Committee shall have the ultimate authority and responsibility to evaluate and, where appropriate, replace the independent auditors. The Committee shall discuss with the auditors their independence from management and Emerson and the matters included in the written disclosures required by the Independence Standards Board. Annually, the Committee shall review and recommend to the Board the selection of Emerson's independent auditors, subject to shareholders' approval. o The Committee shall discuss with the internal auditors and the independent auditors the overall scope and plans for their respective audits including the adequacy of staffing and compensation. Also, the Committee shall discuss with management, the internal auditors, and the independent auditors the adequacy and effectiveness of the accounting and financial controls, including Emerson's system to monitor and manage business risk, and legal and ethical compliance programs. Further, the Committee shall meet separately with the internal auditors and the independent auditors, with and without management present, to discuss the results of their examinations. o The Committee shall review the interim financial statements with management and the independent auditors prior to the filing of Emerson's Quarterly Report on Form 10-Q. Also, the Committee shall discuss the results of the quarterly review and any other matters required to be communicated to the Committee by the independent auditors under generally accepted auditing standards. The chair of the Committee may represent the entire Committee for the purposes of this review. o The Committee shall review with management and the independent auditors the financial statements to be included in Emerson's Annual Report on Form 10-K (or the annual report to shareholders if distributed prior to the filing of Form 10-K), including their judgment about the quality, not just acceptability, of accounting principles, the reasonableness of significant judgments, and the clarity of the disclosures in the financial statement. Also, the Committee shall discuss the results of the annual audit and any other matters required to be communicated to the Committee by the independent auditors under generally accepted auditing standards. EMERSON RADIO CORP. Board of Directors Proxy for the Annual Meeting of Stockholders at 1:00 p.m. (local time), Thursday, August 10, 2000 Sheraton Parsippany Hotel 199 Smith Road Parsippany, New Jersey 07054 The undersigned Stockholder of Emerson Radio Corp. (the "Company") hereby appoints Geoffrey P. Jurick and John P. Walker, or either of them, as proxies, each with full powers of substitution, to vote the shares of the undersigned at the above stated Annual Meeting and at any adjournment(s) thereof. (Continued on reverse side) ================================================================================ Please date, sign and mail your proxy card back as soon as possible! Annual Meeting of Stockholders EMERSON RADIO CORP. AUGUST 10, 2000 Please Detach and Mail in the Envelope Provided - -------------------------------------------------------------------------------- X - -------------------------------------------------------------------------------- Please mark your votes as in this example. FOR all nominees listed WITHHOLD AUTHORITY at right (except as provided to vote for all nominees to the contrary below) at right - -------------------------------------------------------------------------------- 1. To elect five Nominees: directors for a Geoffrey P. Jurick one-year term Robert H. Brown, Jr. Peter G. Bunger Jerome H. Farnum Stephen H. Goodman INSTRUCTIONS: To withhold authority to vote for any individual nominee, write that nominee's name in the space provided below: _________________________________________________________ 2. To transact such other business as may properly come before the meeting and any adjournment(s) thereof. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATIONS MADE HEREON. IF A CHOICE IS NOT INDICATED WITH RESPECT TO ITEM (1), THIS PROXY WILL BE VOTED "FOR" SUCH ITEM. THE PROXIES WILL USE THEIR DISCRETION WITH RESPECT TO ANY MATTER REFERRED TO IN ITEM (2). THIS PROXY IS REVOCABLE AT ANY TIME BEFORE IT IS EXERCISED. Receipt herewith of the Company's 2000 Annual Report and Notice of Meeting and Proxy Statement, dated July 11, 2000, is hereby acknowledged. PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD USING THE ENCLOSED ENVELOPE. PLEASE SIGN, DATE AND MAIL TODAY. SIGNATURE__________________________________ DATE_____________________________ SIGNATURE__________________________________ DATE_____________________________ IF HELD JOINTLY NOTE: (Joint owners must EACH sign. Please sign EXACTLY as your name(s) appear(s) on this card. When signing as attorney, trustee, executor, administrator, guardian or corporate officer, please give your FULL title.) -----END PRIVACY-ENHANCED MESSAGE-----