SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. __)
Filed by the Registrant /x/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/x/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
AUDIOVOX CORPORATION
------------------------------------------------------------------------
(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:
[LOGO]
------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 7, 1998
------------------------------
Hauppauge, New York
March 27, 1998
To the Stockholders of
AUDIOVOX CORPORATION:
The Annual Meeting of Stockholders of Audiovox Corporation (the 'Company')
will be held on May 7, 1998 at the Company's headquarters, 150 Marcus Boulevard,
Hauppauge, New York, at 10 A.M., Local Time, for the following purposes:
1. To elect a Board of eight Directors;
2. To consider and act upon such other business as may properly come
before the meeting or any adjournment thereof.
The above matter is set forth in the Proxy Statement which accompanies this
Notice and to which your attention is directed.
Only stockholders of record on the books of the Company at the close of
business on March 19, 1998 will be entitled to vote at the Annual Meeting of
Stockholders or any adjournment thereof. Please complete, sign, date and return
the enclosed Proxy Card at your earliest convenience.
A copy of the Annual Report for the year ended November 30, 1997 is also
enclosed.
AUDIOVOX CORPORATION
By order of the Board of Directors,
CHRIS LIS JOHNSON,
Secretary
AUDIOVOX CORPORATION
150 MARCUS BOULEVARD
HAUPPAUGE, NEW YORK 11788
------------------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
MAY 7, 1998
------------------------------
SOLICITATION AND REVOCATION OF PROXIES
The Annual Meeting of Stockholders of Audiovox Corporation, (the
'Company'), will be held on May 7, 1998 at the Company's headquarters, 150
Marcus Boulevard, Hauppauge, New York at 10:00 A.M. Local Time for the purpose
set forth in the accompanying Notice of Annual Meeting. THE ENCLOSED PROXY IS
SOLICITED BY AND ON BEHALF OF THE BOARD OF DIRECTORS OF AUDIOVOX CORPORATION FOR
USE AT THE ANNUAL MEETING OF STOCKHOLDERS. Proxies given pursuant to this
solicitation may be revoked at any time prior to the voting thereof (by written
notice to the Secretary of the Company or attendance at the Annual Meeting of
Stockholders and oral notice to the Secretary of such revocation); once voted,
however, proxies may not be retroactively revoked. Duly executed proxies
received prior to the meeting will be voted in accordance with the
specifications therein. This Proxy Statement and form of proxy are being mailed
to stockholders beginning approximately March 27, 1998.
OUTSTANDING VOTING SECURITIES
The Company has two classes of capital stock outstanding: Class A Common
Stock, par value $.01 per share and Class B Common Stock, par value $.01 per
share. As of March 19, 1998, there were issued and outstanding 17,258,573 shares
of Class A Common Stock and 2,260,954 shares of Class B Common Stock. Proxies
are solicited to give all stockholders of record on the books of the Company at
the close of business on March 19, 1998 an opportunity to vote on matters that
come before the meeting. Each share of Class A Common Stock is entitled to one
vote and each share of Class B Common Stock is entitled to ten votes. The
holders of the Class A Common Stock are entitled to vote for the election of two
of eight directors and for all other matters properly presented to the meeting.
The holders of the Class B Common Stock are entitled to vote for the election of
six of eight directors and for all other matters properly presented to the
meeting.
RECORD DATE
Only stockholders of record at the close of business on March 19, 1998 will
be entitled to vote at the Meeting.
1
SECURITIES BENEFICIALLY OWNED
The following table sets forth, at the Record Date, the amount and
percentage of the Company's outstanding Common Stock beneficially owned by each
director and nominee for director, each executive officer named in the Summary
Compensation Table, all directors and executive officers as a group and by all
persons, to the knowledge of the Company, beneficially owning more than five
percent (5%) of the Company's Common Stock. Unless otherwise indicated in the
notes following the table, the individuals named below have sole voting and
disposition powers over the shares beneficially owned by them.
TITLE OF CLASS
OF COMMON SOLE VOTING OR PERCENT OF
NAME AND ADDRESS(1) STOCK INVESTMENT POWER OUTSTANDING SHARES
- ------------------------------------------------------ -------------- ---------------- ------------------
John J. Shalam ....................................... Class A 5,231,490(2) 26.7%
150 Marcus Blvd. Class B 2,144,152 94.8%
Hauppauge, New York
Philip Christopher ................................... Class A 668,154(3) 3.4%
150 Marcus Blvd.
Hauppauge, New York
Patrick M. Lavelle ................................... Class A 5,160(3) --(4)
150 Marcus Blvd.
Hauppauge, New York
Charles M. Stoehr .................................... Class A 31,200(3) 1.6%
150 Marcus Blvd.
Hauppauge, New York
Richard Maddia ....................................... Class A 1,000(3) --(4)
150 Marcus Blvd.
Hauppauge, New York
Ann M. Boutcher ...................................... Class A 2,000(3) --(4)
150 Marcus Blvd.
Hauppauge, New York
Paul C. Kreuch, Jr. .................................. Class A 2,000 --(4)
1000 Lafayette Blvd.
Bridgeport, CT
All directors and officers as a group (11 persons) ... Class A 5,942,004 30.2%
Class B 2,144,152 94.8%
NAME AND ADDRESS OF OTHER 5% HOLDERS OF COMMON STOCK
- ------------------------------------------------------
Kennedy Capital Management, Inc. (5) ................. Class A 1,642,300 8.4%
10829 Olive Blvd.
St. Louis, Missouri 63141
Franklin Resources, Inc. (6) ......................... Class A 1,440,000 7.3%
777 Mariners Island Blvd.
San Mateo, California 94404
(Footnotes on next page)
2
(Footnotes from previous page)
- ------------------
(1) Cede & Co., nominee of Depository Trust Co., 55 Water Street, New York, New
York 10041, was the owner of 13,066,450 shares of Class A and it is believed
that none of such shares was beneficially owned.
(2) Includes as beneficially owned for Mr. Shalam those shares of Class A Common
Stock into which Class B Common Stock beneficially owned by him may be
converted upon the exercise of the conversion right of the Class B Common
Stock.
(3) The number of shares stated as 'beneficially owned' includes shares that
certain persons, as of the Record Date, have the right to acquire beneficial
ownership of within 60 days upon the exercise of outstanding options. If
such options are exercised, Mr. Christopher, Mr. Lavelle, Mr. Stoehr,
Mr. Maddia and Ms. Boutcher would acquire 401,000, 5,000, 30,000 1,000 and
2,000 shares respectively.
(4) Amount owned is less than one percent of the outstanding shares.
(5) Information reported is derived from a Schedule 13G dated February 10, 1998,
of Kennedy Capital Management, Inc. and filed with the Securities and
Exchange Commission. As reported in the Schedule 13G, the person filing the
statement has the sole power to vote or direct the vote of 1,276,000 shares,
and has the sole power to dispose or to direct the disposition of 1,642,300
shares.
(6) Information reported is derived from a Schedule 13G dated January 16, 1998
of Franklin Resources, Inc. and filed with the Securities and Exchange
Commission.
3
ELECTION OF DIRECTORS
(ITEM 1 ON PROXY CARD)
NOMINEES FOR ELECTION OF DIRECTORS
Each of the nominees for director named below, other than Dennis McManus,
has served as a member of the present Board of Directors since the last meeting
of stockholders and each has served continuously since the year indicated. The
directors will hold office until the next annual meeting of stockholders and
until their successors are elected and qualified.
If any nominee becomes unable or unwilling to accept nomination or
election, the proxies will be voted for another person, designated by the Board
of Directors. The management has no reason to believe that any of said nominees
will be unable or unwilling to serve if elected to office.
The following persons have been nominated and are proposed to be elected:
DIRECTOR
NAME AND PRINCIPAL OCCUPATION AGE SINCE
- -------------------------------------------------------------------------------------------------- --- --------
CLASS A DIRECTORS
Paul C. Kreuch, Jr.
President and Chief Executive Officer, Lafayette American Bank.................................. 60 1997
Dennis F. McManus
Telecommunications Consultant................................................................... 47 1998
CLASS B DIRECTORS
John J. Shalam
President and Chief Executive Officer........................................................... 64 1960
Philip Christopher
Executive Vice President........................................................................ 49 1973
Charles M. Stoehr
Senior Vice President and Chief Financial Officer............................................... 51 1987
Patrick M. Lavelle
Senior Vice President, Automotive Electronics Division.......................................... 46 1993
Ann M. Boutcher
Vice President, Marketing....................................................................... 47 1995
Richard Maddia
Vice President, MIS............................................................................. 39 1996
Paul C. Kreuch, Jr. was elected to the Board of Directors in February 1997.
Mr. Kreuch has been the President and Chief Executive Officer of Lafayette
American Bank since December 1, 1997. Prior thereto he was a Senior Vice
President at Handy HRM Corp., an executive search firm, from June 1996 through
November 1997. From 1993 through 1996, Mr. Kreuch was an Executive Vice
President of NatWest Bank N.A. and prior thereto, was President of National
Westminster Bank USA.
Dennis F. McManus was elected to the Board of Directors in March 1998. Mr.
McManus was been self-employed as a telecommunications consultant since January
1, 1998. Prior thereto he was employed by NYNEX Corp. for over 27 years, most
recently as a Senior Vice President and Managing Director. Mr. McManus was in
this position from 1991 through December 31, 1997.
4
John J. Shalam has served as President, Chief Executive Officer and
Director of the Company since 1987. Mr. Shalam also serves as president and a
director of most of the Company's operating subsidiaries. From 1960 to 1987, Mr.
Shalam was president and a director of the Company's predecessor, Audiovox Corp.
Philip Christopher, Executive Vice President of the Company, has been with
the Company since 1970 and has held his current position since 1983. Prior
thereto he was Senior Vice President of the Company. Mr. Christopher is also
President of the Company's cellular subsidiary, Audiovox Communications Corp.
From 1973 through 1987 he was a director of the Company's predecessor, Audiovox
Corp.
Charles M. Stoehr has been Chief Financial Officer since 1979 and was
elected Senior Vice President in 1990. Mr. Stoehr has been a director of the
Company since 1987. From 1979 through 1990 he was a Vice President of the
Company.
Patrick M. Lavelle, was elected Senior Vice President of Automotive
Electronics in 1996 and has been a Vice President of the Company since 1982. He
has responsibility for marketing and selling the Auto Sound, Auto Security and
Accessory product lines. Mr. Lavelle was elected to the Board of Directors in
1993.
Ann M. Boutcher has been a Vice President of the Company since 1984. Ms.
Boutcher's responsibilities include the development and implementation of the
Company's advertising, sales promotion and public relations programs. Ms.
Boutcher was elected to the Board of Directors in 1995.
Richard Maddia has been a Vice President of the Company since 1992. Prior
thereto, Mr. Maddia was Assistant Vice President, MIS. Mr. Maddia's
responsibilities include development and maintenance of the Company's
information systems. Mr. Maddia was elected to the Board of Directors in 1996.
Gordon Tucker and Irving Halevy have elected not to stand for re-election
to the Board of Directors at the annual meeting of Stockholders. Mr. Shalam and
the Board have expressed their appreciation of Messrs. Tucker's and Halevy's
fine years of service.
MANAGEMENT RECOMMENDS VOTING 'FOR' THE ELECTION OF KREUCH, MCMANUS, SHALAM,
CHRISTOPHER, STOEHR, LAVELLE, BOUTCHER AND MADDIA AS DIRECTORS. UNLESS OTHERWISE
DIRECTED BY A SHAREHOLDER, PROXIES WILL BE VOTED 'FOR' THE ELECTION OF SUCH
NOMINEES.
5
RECENT HISTORY AND CERTAIN TRANSACTIONS
The Company leases certain of its office, warehouse and distribution
facilities from certain executive officers of the Company or from entities in
which such individuals own a controlling interest. The following table
identifies leases to which any such executive officer or entity is a party and
which, either alone or when combined with all other leases in which such
executive officer has an interest, involve more than $60,000. The table
identifies the property which is subject to such lease, the owner of such
property, and the amount of rent paid by the Company during the fiscal year
ended November 30, 1997.
PROPERTY EXPIRATION OWNER OF RENT PAID DURING
LOCATION DATE PROPERTY FISCAL YEAR 1997
- ----------------------------------------------- ----------------- ------------------------ ----------------
150 Marcus Blvd. .............................. Month to month John J. Shalam $396,000
Hauppauge, NY
16808 Marquardt Avenue ........................ January 31, 1999 Marquardt Associates(1) 119,011
Cerritos, CA
55 Plant Ave .................................. Month to Month John J. Shalam 13,228
Hauppauge, NY
- ------------------
(1) Marquardt Associates is a California partnership consisting of four
individuals including John J. Shalam, who owns 60% of the partnership,
Philip Christopher, who owns 10%, James Wohlberg who owns 5%, and John J.
Shalam's brother-in-law, who owns 25%.
The Company believes that the terms of each of the foregoing leases are no
less favorable to the Company than those which could have been obtained from
unaffiliated third parties. To the extent that conflicts of interest arise
between the Company and such persons in the future, such conflicts will be
resolved by a committee of independent directors.
THE BOARD OF DIRECTORS AND COMMITTEES
Board of Directors
The Board of Directors has an Executive Committee, an Audit Committee and a
Compensation Committee but does not have a standing nominating committee. The
Board of Directors held six meetings and acted by Consent six times during the
fiscal year ended November 30, 1997. All incumbent directors attended 75% or
more of the aggregate number of Board and related committee meetings during the
year.
Executive Committee
The Executive Committee which held no meetings during fiscal 1997,
consisted of six members, namely, John J. Shalam, Philip Christopher, Charles M.
Stoehr, Gordon Tucker, Irving Halevy and Paul C. Kreuch, Jr. The primary
function of the Executive Committee is to act upon matters when the Board is not
in session. The Committee has full power and authority of the Board in the
management and conduct of the business and affairs of the Company.
Audit Committee
The Audit Committee, which held one meeting in fiscal 1997, consisted of
three members, namely Mr. Gordon Tucker, Mr. Irving Halevy and Mr. Paul C.
Kreuch, Jr. The Audit Committee reviews and approves the accounting principles
and policies of the Company and the appropriate internal control procedures,
supervises the Company's independent auditors and exercises all other powers
normally associated with an audit committee of a publicly held company.
6
Compensation Committee
The Compensation Committee, which held four meetings in fiscal 1997,
consisted of three members, namely, Messrs. Halevy, Tucker and Kreuch. The
Compensation Committee recommends to the Board of Directors remuneration
arrangements for senior management and the directors, approves and administers
other compensation plans, including the profit sharing plan of the Company, in
which officers, directors and employees participate.
EXECUTIVE COMPENSATION
CASH COMPENSATION
The following table sets forth a summary for the 1997, 1996 and 1995 fiscal
years of all compensation paid to the Chief Executive Officer and the four most
highly compensated executive officers whose individual compensation exceeded
$100,000.
SUMMARY COMPENSATION TABLE
LONG TERM COMPENSATION
ANNUAL AWARDS
COMPENSATION ---------------------------------
NAME AND -------------------- RESTRICTED SECURITIES ALL OTHER
PRINCIPAL POSITION(1) YEAR SALARY BONUS STOCK($)(2) UNDERLYING OPTIONS COMPENSATION(3)
- ------------------------------- ---- -------- -------- ----------- ------------------ ---------------
John J. Shalam,
President and CEO............ 1997 $450,000 573,000 -- 350,000 $ 8,272
1996 450,000 180,000 -- -- 1,865
1995 450,000 68,891(4) -- 175,000 3,593
Philip Christopher,
Executive Vice
President.................... 1997 450,000 382,000 -- 500,000 9,020
1996 450,000 120,000 -- -- 2,216
1995 450,000 67,552(5) $ 65,000 30,000 2,070
Charles M. Stoehr,
Senior Vice President
and CFO...................... 1997 288,000 190,000 -- 100,000 5,201
1996 288,000 30,000 -- -- 2,393
1995 302,610(6) -- 16,250 7,500 2,749
Patrick M. Lavelle,
Senior Vice President........ 1997 200,000 405,000 -- 100,000 6,294
1996 200,000 200,600 -- -- 2,234
1995 200,000 153,201(7) 48,750 17,500 3,262
- ------------------
(1) Only three executive officers, in addition to the CEO, had total
compensation in excess of $100,000 for the fiscal year ended November 30,
1997.
(2) The values reported are based on the closing market price of the Company's
Class A Common Stock on the date of grant. The value of all Restricted Stock
grants, based on the value of the company's shares at November 30, 1997,
were as follows: Philip Christopher, $290,400, Charles M. Stoehr, $143,440,
and Patrick M. Lavelle, $82,192. The shares of Restricted Stock may vest
dependent upon the achievement of a
(Footnotes continued on next page)
7
(Footnotes continued from previous page)
rolling three year earnings per share goal and/or continued employment with
the Company. Shares of Restricted Stock are entitled to receive dividends.
(3) For fiscal 1997, includes: for Mr. Shalam: $3,578 allocated to his profit
sharing account, $692 401(k) Company matching contribution and $4,001 in
executive life insurance premiums; for Mr. Christopher: $3,578 allocated to
his profit sharing account, $1,200 401(k) Company matching contribution and
$4,242 in executive life insurance premiums; for Mr. Lavelle: $3,578
allocated to his profit sharing account, $1,900 401(k) Company matching
contribution and $816 in executive life insurance premiums; and for Mr.
Stoehr: $3,578 allocated to his profit sharing account, $462 401(k) Company
matching contribution and $1,162 in executive life insurance premiums.
(4) This amount represents $16,968 of bonus and $51,923 of salary earned in
fiscal 1994 and paid in fiscal 1995.
(5) This amount represents bonus earned in fiscal 1994 and paid in fiscal 1995.
(6) This amount represents $11,539 of salary which was earned in fiscal 1994 and
paid in fiscal 1995.
(7) This represents a $68,201 bonus earned in fiscal 1994 and paid in fiscal
1995 and a $45,000 bonus earned in fiscal 1995 and a $40,000 bonus earned in
fiscal 1995 and paid in fiscal 1996.
OPTION GRANTS IN LAST FISCAL YEAR (1997)
INDIVIDUAL GRANTS
- -------------------------------------------------------------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE OR GRANT DATE
OPTIONS/ EMPLOYEES IN BASE PRICE EXPIRATION PRESENT
NAME SARS GRANTED FISCAL YEAR ($ PER SHARE) DATE VALUE(1)
- ------------------------------------------------------- ------------ -------------- ------------- ---------- ----------
Shalam, John J. (CEO).................................. 350,000 27.78% $7.6875 07/21/07 $2,173,500
Christopher, Phillip (EVP)............................. 326,000 25.87% $7.6875 07/21/07 $2,024,460
174,000 13.81% $5.5000 01/03/07 $ 775,334
------------ ----- ----------
500,000 39.68% $2,799,794
Lavelle, Patrick (SVP)................................. 13,000 1.03% $7.6875 07/21/07 $ 80,730
87,000 6.90% $5.5000 01/03/07 $ 387,672
------------ ----- ----------
100,000 7.93% $ 468,402
Stoehr, Charles M. (SVP)............................... 13,000 1.03% $7.6875 07/21/07 $ 80,730
87,000 6.90% $5.5000 01/03/07 $ 387,672
------------ ----- ----------
100,000 7.93% $ 468,402
- ------------------
(1) Based on 'Black-Scholes' pricing model which indicates present values at
grant date as follows:
'$7.688 OPTIONS' '$5.50 OPTIONS'
------------------ -----------------
Volatility............................................ 70% 70%
Risk Free Interest Rate............................... 6.430% 6.660%
Dividend Yield........................................ 0% 0%
Days to Expiration.................................... 3,650 3,650
Present Value @ Grant Date............................ 6.2$10 4.$456
8
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES(1)
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
NOVEMBER 30, 1997 NOVEMBER 30, 1997
----------------- -------------------
EXERCISABLE/ EXERCISABLE/
NAME UNEXERCISABLE UNEXERCISABLE
- ---------------------------------------------------------------------- ----------------- -------------------
John J. Shalam........................................................ 0/525,000 $0/$908,688
Philip Christopher.................................................... 75,000/430,000 $145,313/$1,032,730
Charles M. Stoehr..................................................... 30,000/107,500 $0/$324,872
Patrick M. Lavelle.................................................... 5,000/117,500 $0/$354,197
- ------------------
(1) No options were exercised by the named individuals in fiscal 1997.
COMPENSATION OF DIRECTORS
For their service, members of the Board of Directors who are not salaried
employees of the Company receive an annual retainer of $10,000.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is currently comprised of two outside directors,
Paul C. Kreuch, Jr. and Dennis McManus.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
RESPONSIBILITIES OF THE COMMITTEE
The Compensation Committee of the Board of Directors which consists
entirely of outside directors, reviews and approves compensation for the
Company's executive officers and oversees and administers the Company's stock
option and restricted stock plans. The Compensation Committee recommends
compensation for the CEO subject to the Board of Directors' approval of such
recommendations. The CEO submits recommended compensation levels for other
executive officers of the Company to the Compensation Committee for its review
and approval, which then submits it to the full Board of Directors for its
consideration.
COMPENSATION PHILOSOPHY
The Company's policy on executive compensation is to provide competitive
compensation based on both corporate and individual performance which will
attract, motivate and retain executives with superior abilities. Compensation
for the Company's executive officers consists of salary, bonus and long-term
incentive awards, typically in the form of stock options or restricted stock.
Executive officers also participate in a profit sharing plan, a medical plan and
other benefits available to employees generally.
The Committee's philosophy is to provide compensation programs based on an
individual's responsibilities, achievements and performance as well as the
Company's overall performance. The Company does not have any employment
agreements with its executive officers.
9
BASE SALARY AND BONUS
Salaries for the executive officers are determined in accord with
maintaining the Company's ability to attract and retain qualified and dedicated
executive officers. Annually, the Committee reviews salary recommendations made
by the Company's Chief Executive Officer, and evaluates individual
responsibility levels and performance. Base salaries for the Company's executive
officers are fixed at levels commensurate with the competitive amounts paid to
senior executives with comparable qualifications at companies engaged in the
same or similar businesses.
Bonus compensation provides the Company with a means for rewarding superior
performance during the fiscal year. Mr. Lavelle's bonus compensation for fiscal
1997 was closely tied to his individual success in achieving financial
performance goals within his division. Messrs. Christopher and Stoehr's bonus
compensation for fiscal 1997 was based upon their dedication to the improvement
of the overall operating performance of the Company.
The Company's performance is evaluated in terms of the attainment of
corporate objectives, both short-term and long-term, which impact the growth and
economic stability of the Company.
STOCK OPTION INCENTIVES
During fiscal 1997, stock options were granted to key employees, including
the Company's executive officers, subject to the provisions of the Company's
stock option plans. The Compensation Committee reviews the recommendations of
the Chief Executive Officer regarding each executive officer's contributions to
the Company during the fiscal year and likely future contributions. Based on
this review, the Committee determines if options should be granted, and if so,
the number of options, the exercise price and the vesting dates. The number of
shares underlying the options granted during fiscal 1997, their exercise price
and vesting dates are reflected in the Option Grants in Last Fiscal Year
(1997) table on page 8. The options granted to Messrs. Christopher and
Lavelle were granted because of the performance of their respective divisions
as well as to reward long-term commitment to the Company. The options granted
to Messrs. Shalam and Stoehr were granted in recognition of the sustained
overall performance reflected in the Company's operating results as well as
their long-term commitment to the Company.
CHIEF EXECUTIVE OFFICER COMPENSATION
The Compensation Committee has fixed the base salary of the Chief Executive
Officer based on competitive compensation data, the Committee's assessment of
Mr. Shalam's past performance and its expectation as to his future contributions
in guiding and directing the Company and its business. The bases for the
Committee's determinations regarding Mr. Shalam's compensation in 1997 included
an approximate 107% increase in the Company's earnings per share and the
expansion of the Company's domestic and overseas markets. Mr. Shalam's bonus for
fiscal 1997 was calculated on the Company's pre-income tax profit before certain
non-operating events in accordance with the Company's CEO Bonus Plan which was
approved by the shareholders in 1995.
IRVING HALEVY
GORDON TUCKER
PAUL C. KREUCH
10
PERFORMANCE GRAPH
[LINE GRAPH]
COMPARISON OF CUMULATIVE TOTAL RETURN
OF COMPANY, INDUSTRY INDEX AND BROAD MARKET
FISCAL YEAR ENDING
-------------------------------------------------------------
1992 1993 1994 1995 1996 1997
------- ------ ------ ------ ------ ------
AUDIOVOX CORP. 100 302.17 123.91 113.04 91.30 153.26
INDUSTRY INDEX 100 109.98 105.92 128.47 143.24 169.29
BROAD MARKET 100 115.39 109.83 138.00 148.87 170.05
The annual changes for the five year period are based on the assumption
that $100 had been invested on December 1, 1992, and that all quarterly
dividends were reinvested. The total cumulative dollar returns shown on the
graph represent the value that such investments would have had on November 30,
1997.
11
RELATIONSHIP WITH INDEPENDENT AUDITORS
The Board has again appointed the firm of KPMG Peat Marwick LLP as
independent auditors for the fiscal year ending November 30, 1998. A
representative of KPMG Peat Marwick LLP will be present at the Annual Meeting of
Stockholders to respond to appropriate questions from stockholders and will have
the opportunity to make a statement if he so desires.
OTHER MATTERS
Management does not know of any matters to be presented for action at the
meeting other than as set forth in Item 1 of the Notice of Annual Meeting.
However, if any other matters come before the meeting, it is intended that the
holders of the proxies will vote thereon in their direction.
DATE FOR RECEIPT OF STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the next Annual
Meeting of stockholders currently scheduled for May 6, 1999, must be received by
the Secretary of the Company not later than November 28, 1998 for inclusion in
the proxy statement. The proposals must comply with all applicable statutes and
regulations.
REQUEST TO VOTE, SIGN AND RETURN PROXIES
If you do not intend to be present at the Annual Meeting of Stockholders on
May 7, 1998, please vote, date and sign the enclosed proxy, and return it in the
accompanying envelope, at your earliest convenience.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR 1997 AS FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE REQUIRED FINANCIAL
STATEMENTS AND FINANCIAL STATEMENT SCHEDULES, WILL BE FURNISHED WITHOUT CHARGE,
BY FIRST CLASS MAIL, UPON THE WRITTEN OR ORAL REQUEST OF ANY STOCKHOLDER,
INCLUDING ANY BENEFICIAL OWNER, ENTITLED TO VOTE AT THE MEETING. ANY SUCH
REQUEST SHOULD BE DIRECTED TO THE ATTENTION OF CHRIS LIS JOHNSON, THE COMPANY'S
SECRETARY, 150 MARCUS BOULEVARD, HAUPPAUGE, NEW YORK 11788, TELEPHONE: (516)
231-7750.
BY ORDER OF THE BOARD OF DIRECTORS
CHRIS LIS JOHNSON
Secretary
Audiovox Corporation
Hauppauge, New York
March 27, 1998
12
PROXY AUDIOVOX CORPORATION (THE 'COMPANY') PROXY
PROXY FOR CLASS A COMMON STOCK AND CLASS B COMMON STOCK
The undersigned appoints each of PHILIP CHRISTOPHER and CHARLES M. STOEHR
proxies with power of substitution to vote for the undersigned at the Annual
Meeting of Stockholders at the Company's headquarters, 150 Marcus Boulevard,
Hauppauge, New York, on May 7, 1998 at 10:00 A.M., and at any adjournment,
granting power and authority to act on behalf of the undersigned at said meeting
or any adjournment.
1. ELECTION OF DIRECTORS. To elect Directors as set forth in the Proxy
Statement.
Class A Stockholders:
Paul C. Kreuch, Jr. Dennis McManus
Class B Stockholders:
John J. Shalam, Philip Christopher, Charles M. Stoehr
Patrick M. Lavelle, Ann M. Boutcher, Richard Maddia
*(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, LINE
OUT THAT NOMINEE'S NAME ABOVE.)
FOR all nominees WITHHOLD AUTHORITY to vote for
listed above. / / all nominees listed above. / /
2. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
- --------------------------------------------------------------------------------
PLEASE SIGN AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE. IF NO
INSTRUCTION IS INDICATED, THE UNDERSIGNED'S VOTE WILL BE CAST IN FAVOR OF THE
PROPOSAL. A MAJORITY OF THE PROXIES PRESENT AND ACTING AT THE MEETING IN PERSON
OR BY SUBSTITUTE (OR IF ONLY ONE SHALL BE SO PRESENT, THEN THAT ONE) SHALL HAVE
AND MAY EXERCISE ALL OF THE POWER AND AUTHORITY OF SAID PROXIES HEREUNDER. THE
UNDERSIGNED HEREBY REVOKES ANY PROXY PREVIOUSLY GIVEN AND ACKNOWLEDGES RECEIPT
OF NOTICE OF ANNUAL MEETING AND PROXY STATEMENT DATED MARCH 27, 1998 AND A COPY
OF THE ANNUAL REPORT FOR THE YEAR ENDED NOVEMBER 30, 1997.
SHARES DESIGNATED BELOW ARE CLASS A COMMON STOCK UNLESS OTHERWISE INDICATED.
Dated:
------------------, 1998
--------------------------(L.S.)
--------------------------(L.S.)
Signature of Shareholder(s)
NOTE: When signing as
Executor, Administrator,
Trustee, Guardian, etc.
please add full title.
(Sign exactly as name
appears on this proxy.)
THIS PROXY IS SOLICITED BY
THE BOARD OF DIRECTORS.
