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 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) Strayer Education, Inc. - -------------------------------------------------------------------------------- (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: - -------------------------------------------------------------------------------- 1
[GRAPHIC OMITTED] AUDIOVOX(Registered Trademark) CORPORATION NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 9, 2002 To our Shareholders: The 2002 annual meeting of shareholders of Audiovox Corporation will be held on May 9, 2002, at the Sheraton Smithtown, the Seminar Room, 110 Vanderbilt Motor Parkway, Smithtown, NY 11788 at 10 a.m. At the meeting, you will be asked to vote on the following matters: 1. The election to our Board of nine Directors; 2. Any other matters that may properly come before the meeting. If you were a shareholder of record at the close of business on March 22, 2002 you are entitled to vote at the meeting or at any adjournment of the meeting. This notice and proxy statement are first being mailed to shareholders on or about April 9, 2002. Please follow the instructions on the enclosed Proxy Card to vote either by mail, telephone or electronically via the Internet. A copy of the Annual Report for the year ended November 30, 2001 is also enclosed. By order of the Board of Directors, CHRIS LIS JOHNSON, Secretary Dated: Hauppauge, New York March 26, 2002
AUDIOVOX CORPORATION 150 MARCUS BOULEVARD HAUPPAUGE, NEW YORK 11788 ANNUAL MEETING OF SHAREHOLDERS THURSDAY, MAY 9, 2002 PROXY STATEMENT The annual meeting of shareholders will be held on Thursday, May 9, 2002 at the Sheraton Smithtown, the Seminar Room, 110 Vanderbilt Motor Parkway, Smithtown, NY 11788 at 10:00 a.m. This proxy statement contains information about the matters to be considered at the meeting or any adjournments of the meeting. THE MEETING At the meeting, you will be voting on the election of nine directors. Our management will also report on our performance during fiscal 2001 and will be available to answer your questions. You may vote if you owned stock as of the close of business on March 22, 2002. On March 22, 2002 there were 20,621,338 shares of Class A common stock and 2,260,954 shares of Class B common stock issued and outstanding. 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. You can vote: by attending the meeting; by completing, signing and mailing the enclosed proxy; by telephone or electronically via the Internet. The deadline for voting by telephone or electronically is 11:59 p.m. on May 8, 2002. You may change your vote at any time before the meeting by voting another proxy with a later date and returning it to us prior to the meeting or by attending and voting at the meeting. Any proxy that is signed and returned to us without voting instructions will be voted for the election of the nominated directors.
PROPOSAL 1 ELECTION OF DIRECTORS NOMINEES FOR ELECTION OF DIRECTORS Each of the nominees for director named below, has continuously served as a director since the year indicated. The directors will hold office until the next annual meeting of Shareholders and until their successors are elected and qualified. The Class A Directors are elected by the Class A Shareholders voting separately as a class. The joint directors are elected by the Class A and Class B Shareholders voting together, with the Class B Shareholders entitled to 10 votes per share and the Class A Shareholders entitled to one vote per share. 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.* Managing Director, WJM Associates, Inc. ................... 63 1997 Dennis F. McManus* V.P.-New Product Marketing, LSSI Corporation .............. 51 1998 Irving Halevy ** Retired Professor and Arbitrator .......................... 85 2001 JOINT DIRECTORS John J. Shalam President and Chief Executive Officer ..................... 68 1960 Philip Christopher Executive Vice President .................................. 53 1973 Charles M. Stoehr Senior Vice President and Chief Financial Officer ......... 55 1987 Patrick M. Lavelle Senior Vice President ..................................... 50 1993 Ann M. Boutcher Vice President ............................................ 51 1995 Richard Maddia Vice President ............................................ 43 1996 - ---------- * Member of the Audit and Compensation Committees ** Member of the Audit Committee Paul C. Kreuch, Jr. was elected to the Board of Directors in February 1997. Mr. Kreuch has been a Managing Director of WJM Associates, Inc. since December 2001. He was a principal of Riotto-Jazylo & Company, Inc. from April 2000 to December 2001. From October 1998 through March 2000, he was a Principal of Secura Burnett Co., LLC. From December 1997 through September 1998, he was the President and Chief Executive Officer of Lafayette American Bank. Dennis F. McManus was elected to the Board of Directors in March 1998. Mr. McManus has been a Vice President, New Product Marketing for LSSI Corporation since May 1, 2001 with responsibility for the wireless telecom industry. Mr. McManus was self-employed as a telecommunications consultant from January 1, 1998 through April, 2001. Before that, he was employed by NYNEX Corp. for over 27 years, most recently as a Senior Vice President and Managing Director. Mr. McManus held this position from 1991 through December 31, 1997. 2
Irving Halevy was elected to the Board of Directors in June 2001. Mr. Halevy had previously served as a director of Audiovox from 1987 through May 7, 1998. He is a retired professor of Industrial Relations and Management at Fairleigh Dickinson University where he taught from 1952 to 1986. He has also served as a panel member of the Federal Mediation and Conciliation Service. John J. Shalam has served as President, Chief Executive Officer and Director of Audiovox or its predecessor since 1960. Mr. Shalam also serves as President and a Director of most of Audiovox's operating subsidiaries. Mr. Shalam is on the Board of Directors of the Electronics Industry Association and is on the Executive Committee of the Consumer Electronics Association. Philip Christopher, our Executive Vice President, has been with Audiovox since 1970 and has held his current position since 1983. Before 1983 he served as Senior Vice President of Audiovox. Mr. Christopher is also Chief Executive Officer and President of Audiovox's wireless subsidiary, Audiovox Communications Corp. From 1973 through 1987, he was a Director of our predecessor, Audiovox Corp. Mr. Christopher serves on the Executive Committee of the Cellular Telephone Industry Association. Charles M. Stoehr has been our Chief Financial Officer since 1979 and was elected Senior Vice President in 1990. Mr. Stoehr has been a Director of Audiovox since 1987. From 1979 through 1990 he was a Vice President of Audiovox. Patrick M. Lavelle has been a Vice President of Audiovox since 1980 and Senior Vice President since 1991. Mr. Lavelle is Chief Executive Officer and President of Audiovox's electronics subsidiary, Audiovox Electronics Corporation. Mr. Lavelle was elected to the Board of Directors in 1993. Mr. Lavelle also serves as a member of the Board of Directors of the Consumer Electronics Association and is Vice Chair of its Mobile Electronics Division. Ann M. Boutcher has been the Company's Vice President of Marketing 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 A. Maddia has been our Vice President of Information Systems since 1992. Prior thereto, Mr. Maddia was Assistant Vice President, MIS. Mr. Maddia's responsibilities include development and maintenance of information systems. Mr. Maddia was elected to the Board of Directors in 1996. MANAGEMENT RECOMMENDS VOTING "FOR" THE ELECTION OF KREUCH, MCMANUS, HALEVY, 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. 3
SECURITIES BENEFICIALLY OWNED The following information is submitted with respect to 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, based solely on filings with the Securities and Exchange Commission, beneficially owning more than five percent (5%) of our Class A common stock as of March 5, 2002: SOLE VOTING OR PERCENT OF INVESTMENT OUTSTANDING NAME AND ADDRESS(1) POWER(2) SHARES - ----------------------------------------------------------- ------------------ ------------ John J. Shalam ............................................ 4,593,343(3) 21.7% Philip Christopher ........................................ 983,474 4.6% Patrick M. Lavelle ........................................ 183,078 * Charles M. Stoehr ......................................... 144,549 * Richard Maddia ............................................ 37,040 * Ann M. Boutcher ........................................... 16,323 * Paul C. Kreuch, Jr. ....................................... 13,000 * Dennis F. McManus ......................................... 11,000 * Irving Halevy ............................................. * All directors and officers as a group (8 persons) ......... 5,981,807 26.8% NAME AND ADDRESS OF OTHER 5% HOLDERS OF COMMON STOCK - ------------------------------------------------------------ Dimensional Fund Advisers Inc.(4) ......................... 1,202,555 5.9% 1299 Ocean Ave, 11th Floor Santa Monica, CA 90401 - ---------- * Represents less than 1% (1) The address of each person, unless otherwise noted, is c/o Audiovox Corporation, 150 Marcus Boulevard, Hauppauge, New York 11788. In presenting shares beneficially owned and in calculating each holder's percentage ownership, only options exercisable by that person within 60 days of February 1, 2002 and no options exercisable by any other person are deemed to be outstanding. (2) The number of shares stated as "beneficially owned" includes stock options exercisable within 60 days as follows: Mr. Shalam -- 525,000, Mr. Christopher -- 779,000, Mr. Lavelle -- 165,700, Mr. Stoehr -- 132,500, Mr. Maddia -- 32,000, Ms. Boutcher -- 11,000, Mr. Kreuch -- 11,000 and Mr. McManus --11,000. (3) Includes 2,144,152 shares of Class B common stock held by Mr. Shalam that he may convert into Class A common stock at any time. Excludes 116,802 shares of Class B common stock and 2,002 shares of Class A common stock that are held in irrevocable trusts for the benefit of Mr. Shalam's three sons. (4) Information reported is derived from a Schedule 13G dated January 30, 2002 of Dimensional Fund Advisors Inc. and filed with the Securities and Exchange Commission. Section 16(a) of the Exchange Act requires our executive officers, directors and persons who own more than ten percent of a registered class of our equity securities ("Reporting Persons") to file reports of ownership and changes in ownership on Forms 3, 4 and 5 with the Securities and Exchange Commission (the "SEC") and the Nasdaq Stock Market (the "Nasdaq"). These Reporting Persons are required by SEC regulation to furnish us with copies of all Forms 3, 4 and 5 they file with the SEC and Nasdaq. Based solely upon our review of the copies of the forms it has received, we believe that all Reporting Persons complied on a timely basis with all filing requirements applicable to them with respect to transactions during fiscal 2001. 4
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS TRANSACTIONS WITH MANAGEMENT We lease some of our equipment, office, warehouse and distribution facilities from entities in which our executive officers own controlling interests. The following table identifies leases that result in payments in excess of $60,000 to any of the related entities. EQUIPMENT/PROPERTY RENT PAID DURING LOCATION EXPIRATION DATE OWNER OF PROPERTY FISCAL YEAR 2001 - ---------------------------- ------------------- -------------------------------- ----------------- 150 Marcus Blvd ............ November 30, 2008 150 Marcus Blvd. Realty LLC(1) $530,000 Hauppauge, NY 16808 Marquardt Avenue ..... June 30, 2008 Marquardt Associates(2) 208,399 Cerritos, CA 555 Wireless Blvd .......... December 1, 2026 Wireless Blvd. Realty LLC(3) 544,166 Hauppauge, NY 555 Wireless Blvd .......... March 31, 2003 Wireless Blvd. Realty LLC(3) 410,640 Hauppauge, NY - ---------- (1) Property owned by 150 Marcus Blvd. Realty, LLC, a New York limited liability company, of which John J. Shalam owns 1% and Mr. Shalam's three sons own the remaining 99%. (2) Property owned by Marquardt Associates, a California partnership, owned 60% by John J. Shalam and 40% by Ardama Capital LLC, a New York limited liability company owned by Mr. Shalam's three sons. (3) Property owned or leased by Wireless Blvd. Realty, LLC, a New York limited liability company, owned 98% by the Shalam Long Term Trust, 1% by John J. Shalam and 1% by Mr. Shalam's three sons. The Shalam Long Term Trust is a grantor trust of which Mr. Shalam is the Grantor and his three sons are the beneficiaries. We believe that the terms of each of the leases are no less favorable to us than those that could have been obtained from unaffiliated third parties. To the extent that conflicts of interest arise between us and such persons in the future, such conflicts will be resolved by a committee of disinterested directors. INDEBTEDNESS OF MANAGEMENT Since December 1, 2001, Philip Christopher, Director and Executive Vice President of Audiovox, was indebted to Audiovox for $650,954. Such indebtedness is evidenced by an unsecured note which bears interest at the LIBOR rate, to be adjusted quarterly, plus 1.25% per annum. As of February 28, 2002 the amount outstanding was $655,790. In addition, as of February 28, 2002, Mr. Christopher was also indebted to Audiovox for $133,699 pursuant to an unsecured note which bears interest at the LIBOR rate plus 0.5% per annum. 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 four meetings and acted by Consent four times during the fiscal year ended November 30, 2001. All incumbent directors attended 75% or more of the aggregate number of Board and related committee meetings during the year. Directors who are not our employees receive an annual fee of $15,000 and a fee of $500 for each meeting attended. EXECUTIVE COMMITTEE The Executive Committee which held no meetings during fiscal 2001, consisted of five members, namely, John J. Shalam, Philip Christopher, Charles M. Stoehr, Paul C. Kreuch, Jr. and Dennis F. 5
McManus. 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 five meetings in fiscal 2001, consists of three members, namely, Paul C. Kreuch, Jr., Dennis F. McManus and Irving Halevy. The Board of Directors has determined that each of the three members is independent and able to read and understand fundamental financial statements in accordance with the rules of the National Association of Securities Dealers ("NASD"). The Board of Directors has also determined that at least one member of the audit committee has past employment experience in finance or accounting. The functions of the Audit Committee are described below under the heading Audit Committee Report. COMPENSATION COMMITTEE The Compensation Committee, which held two meetings in fiscal 2001, consisted of two members, namely, Messrs. Kreuch and McManus. 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. 6
AUDIT COMMITTEE REPORT The following Audit Committee Report does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Company filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent the Company specifically incorporates this Report by reference therein. The Audit Committee of the Board is responsible for providing independent, objective oversight of the Company's accounting functions and internal controls. Management is responsible for the Company's internal controls and financial reporting process. The independent accountants are responsible for performing an independent audit of the Company's consolidated financial statements in accordance with generally accepted auditing standards and to issue a report thereon. The Audit Committee's responsibility is to monitor and oversee these processes. During fiscal 2000, the Audit Committee developed a charter, which was approved by the Board of Directors. The Charter, which reflects standards set forth in new SEC regulations, recognizes five broad areas of Audit Committee responsibility: o review quarterly and annual financial reports; o supervise relationship between Audiovox and independent accountants; o review Audiovox's financial reporting processes; o review and propose improvements to the financial reporting process; and, o review ethical and legal compliance matters. In connection with these responsibilities, the Audit Committee met with management and the Company's independent auditors, KPMG LLP, to review and discuss all financial statements included in the Company's quarterly and annual reports for the fiscal year ended November 30, 2001 (the "Financial Statements") prior to their issuance and to discuss significant accounting issues. Management has advised us that the Financial Statements were prepared in accordance with generally accepted accounting principles, and the Committee discussed the Financial Statements with both management and the independent auditors. Our review included discussions with the independent auditors of matters required to be discussed by the Statement on Auditing Standards No. 61 (Communication with Audit Committees). The Audit Committee also received written disclosures from the independent accountants required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees), and the Audit Committee discussed with the independent accountants that firm's independence. Finally, the Audit Committee continued to monitor the integrity of the Company's financial reporting processes and its internal procedures and controls. Based upon the Audit Committee's discussions with management and the independent accountants and the Audit Committee's review of the representations of management and the independent accountants, the Audit Committee recommended to the Board of Directors that the Company's audited financial statements be included in the Company's Annual Report on Form 10-K for the fiscal year ended November 30, 2001, for filing with the Securities and Exchange Commission. Members of the Audit Committee Paul C. Kreuch, Jr. (Chairman) Dennis F. McManus Irving Halevy 7
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION The following Compensation Committee Report on Executive Compensation and the performance graph included elsewhere in this proxy statement do not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Company filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent the Company specifically incorporates this Report or the performance graph by reference therein. RESPONSIBILITIES OF THE COMMITTEE The Compensation Committee of the Board of Directors, which consists entirely of outside directors, reviews and approves compensation for Audiovox's executive officers and oversees and administers Audiovox's stock option and restricted stock plans. The Compensation Committee recommends compensation for the Chief Executive Officer subject to the Board of Directors approval of such recommendations. The Chief Executive Officer submits recommended compensation levels for other executive officers of Audiovox to the Compensation Committee for its review and approval. All such recommendations are subject to approval or disapproval by the Compensation Committee. The Compensation Committee then submits its recommendations to the full Board of Directors for its consideration. The Compensation Committee of the Board of Directors has furnished the following report on executive compensation for fiscal 2001. WHAT IS AUDIOVOX'S PHILOSOPHY OF EXECUTIVE OFFICER COMPENSATION? Audiovox's executive compensation policies and programs are designed to attract and retain talented executives and motivate them to achieve business objectives that will enhance stockholder value Audiovox's compensation program for executives consists of three key elements: o a base salary, o a performance-based annual bonus, and o periodic grants of stock options. This approach to executive compensation enables Audiovox to attract and retain executives of outstanding ability while ensuring that our executives' compensation advances the interests of our shareholders. Consequently, a large proportion of their compensation, the annual bonus, is dependent in significant part on Audiovox's performance. Audiovox does not have employment agreements with any of its executive officers. BASE SALARY Salaries for the executive officers are designed to attract and retain qualified and dedicated executive officers. Annually, the Committee reviews salary recommendations made by Audiovox's Chief Executive Officer, and evaluates individual responsibility levels, performance and length of service. Base salaries for Audiovox'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. ANNUAL BONUS Bonus compensation provides Audiovox with a means of rewarding performance based upon attainment of corporate profitability during the fiscal year. For fiscal 2001, the Compensation Committee established bonus compensation formulas for its executives based upon the pre-tax earnings of the Company. The annual bonus paid to Mr. Lavelle is based upon the achievement of fiscal goals within his respective division. STOCK OPTIONS During fiscal 2001, no stock options were granted to the Company's employees, including the Company's executive officers. 8
HOW IS THE CHIEF EXECUTIVE OFFICER COMPENSATED? 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 Audiovox and its business. Mr. Shalam's bonus for fiscal 2001 was calculated on Audiovox's pre-income tax profit before extraordinary items, other non-recurring transactions and income taxes of the Company in accordance with Audiovox's Executive Officer Bonus Plan that was approved by the shareholders in 2001. HOW IS AUDIOVOX ADDRESSING INTERNAL REVENUE CODE LIMITS ON DEDUCTIBILITY OF COMPENSATION? Section 162(m) of the Internal Revenue Code generally disallows a tax deduction to public corporations for compensation over $1,000,000 paid for any fiscal year to the corporation's chief executive officer and four other most highly compensated executive officers as of the end of any fiscal year. However, the statute exempts qualifying performance-based compensation from the deduction limit if certain requirements are met. The Compensation Committee currently intends to structure performance-based compensation, including stock option grants and annual bonuses, to executive officers who may be subject to Section 162(m) in a manner that satisfies those requirements. The Board and the Compensation Committee reserve the authority to award non-deductible compensation in other circumstances as they deem appropriate. Further, because of ambiguities and uncertainties as to the application and interpretation of Section 162(m) and the regulations issued thereunder, no assurance can be given, notwithstanding the Company's efforts, that compensation intended by the Company to satisfy the requirements for deductibility under Section 162(m) does in fact do so. Members of the Compensation Committee PAUL C. KREUCH, JR. DENNIS F. MCMANUS 9
EXECUTIVE COMPENSATION The following table sets forth a summary for the 2001, 2000 and 1999 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 ANNUAL COMPENSATION(2) LONG TERM COMPENSATION AWARDS ---------------------------- -------------------------------------------------------- NAME AND SECURITIES ALL OTHER PRINCIPAL POSITION(1) YEAR SALARY BONUS RESTRICTED STOCK UNDERLYING OPTIONS COMPENSATION(1) - ----------------------------------- ------ --------- ----------- ------------------ -------------------- ---------------- John J. Shalam, President and CEO ................ 2001 450,000 122,000 -- -- 9,185 2000 450,000 1,347,000 -- -- 16,616 1999 450,000 1,273,000 -- -- 10,191 Philip Christopher, Executive Vice President ......... 2001 450,000 117,000 -- -- 8,234 2000 450,000 897,000 -- -- 8,721 1999 450,000 849,000 -- 580,000 7,372 Charles M. Stoehr, Senior Vice President and CFO .............................. 2001 325,000 41,000 -- -- 8,234 2000 325,000 449,000 -- -- 10,902 1999 325,000 425,000 -- 100,000 7,738 Patrick M. Lavelle, Senior Vice President ............ 2001 200,000 655,636 -- -- 7,998 2000 200,000 781,365 -- -- 8,709 1999 200,000 596,000 -- 200,000 7,925 Richard A. Maddia, Vice President, Information Systems .............. 2001 175,000 65,000 -- -- 7,409 2000 150,500 52,500 -- -- 8,313 1999 115,000 45,490 -- 40,000 6,475 - ---------- (1) For fiscal 2001, includes: for Mr. Shalam: $6,193 allocated to his profit sharing account, $1,360 in 401(k) Company matching contribution and $1,632 in executive life insurance premiums; for Mr. Christopher: $6,193 allocated to his profit sharing account, $1,521 in 401(k) Company matching contribution and $520 in executive life insurance premiums; for Mr. Stoehr: $6,193 allocated to his profit sharing account, $1,510 in 401(k) Company matching contribution and $593 in executive life insurance premiums; for Mr. Lavelle: $6,193 allocated to his profit sharing account, $1,360 in 401(k) Company matching contribution and $445 in executive life insurance premiums; and for Mr. Maddia: $6,193 allocated to his profit sharing account, $888 in 401(k) Company matching contribution and $328 in executive life insurance premiums. (2) No other annual compensation was paid to the named individuals and the "Other Annual Compensation" column has been omitted. 10
OPTION GRANTS IN LAST FISCAL YEAR (2001) No options were granted in the fiscal year ended November 30, 2001. AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES NUMBER OF SECURITIES UNDERLYING VALUE* OF SHARES ACQUIRED VALUE OPTIONS AT IN-THE-MONEY OPTIONS AT NAME ON EXERCISE REALIZED($) NOVEMBER 30, 2001 NOVEMBER 30, 2001 - ---------------------------- ----------------- ------------- --------------------- ------------------------ EXERCISABLE/ EXERCISABLE/ UNEXERCISABLE UNEXERCISABLE --------------------- ------------------------ John J. Shalam ............. -- -- 525,000/0 $232,750/$0 Philip Christopher ......... -- -- 779,000/232,000 $ 39,900/$0 Charles M. Stoehr .......... -- -- 132,500/40,000 $ 47,595/$0 Patrick M. Lavelle ......... -- -- 165,700/80,000 $ 58,995/$0 Richard A. Maddia .......... -- -- 32,000/8,000 $ 0/$0 - ---------- * Net of cost to acquire. COMPENSATION OF DIRECTORS For their service, members of the Board of Directors who are not our salaried employees receive an annual retainer of $15,000 and $500 for each meeting attended. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The Compensation Committee is currently comprised of two independent directors, Paul C. Kreuch, Jr. and Dennis McManus. 11
PERFORMANCE GRAPH COMPARISON OF CUMULATIVE TOTAL RETURN OF COMPANY, INDUSTRY INDEX AND BROAD MARKET [GRAPHIC OMITTED] - ---------------------------------------------------------------------------------------------------------------------------------- 1996 1997 1998 1999 2000 2001 - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- AUDIOVOX CORPORATION 100.00 167.86 122.62 566.67 183.33 137.33 - ---------------------------------------------------------------------------------------------------------------------------------- SIC CODE INDEX 100.00 113.30 86.03 95.25 72.82 73.33 - ---------------------------------------------------------------------------------------------------------------------------------- NASDAQ MARKET INDEX 100.00 124.21 153.54 251.47 208.84 156.28 - ---------------------------------------------------------------------------------------------------------------------------------- ASSUMES $100 INVESTED ON DEC. 01, 1996 ASSUMES DIVIDEND REINVESTED FISCAL YEAR ENDING NOV. 30, 2001 The annual changes for the five year period are based on the assumption that $100 had been invested on December 1, 1996, 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, 2001. RELATIONSHIP WITH INDEPENDENT AUDITORS The Board has appointed the firm of KPMG LLP to serve as independent auditors for the fiscal year ending November 30, 2002. KPMG LLP has served as the Company's independent auditors for many years and is considered by management to be well qualified. Fees for the last annual financial statement audit, excluding audit related fees, were $700,200, and all other fees were $503,000, including fees for non-audit services of $438,000 and audit-related services of $65,000. Non-audit services consisted of tax consultation and compliance services. Audit-related services consisted of audits of financial statements of employee benefit plans and other consulting services. One or more representatives of KPMG LLP will be present at this year's Annual Meeting of Shareholders. The representatives will have an opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions. 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. 12
DATE FOR RECEIPT OF STOCKHOLDER PROPOSALS Proposals of Shareholders intended to be presented at the next Annual Meeting of Shareholders currently scheduled for May 8, 2003, must be received by the Secretary of the Company not later than December 2, 2002 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 Shareholders on May 9, 2002, please vote the enclosed proxy at your earliest convenience. A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR 2001 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: (631) 231-7750. BY ORDER OF THE BOARD OF DIRECTORS CHRIS LIS JOHNSON Secretary Audiovox Corporation Hauppauge, New York March 26, 2002 13
Please mark PROXY BY MAIL your vote [X] like this THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS. WITHHELD 1. ELECTION OF DIRECTORS FOR FOR ALL Class A Stockholders: 2. In their discretion, the To elect Directors as set [ ] [ ] 01 Paul C. Kreuch, Jr. Proxies are authorized to forth in the Proxy 02 Dennis F. McManus vote upon such other business Statement. 03 Irving Halevy as may properly come before the meeting. Class A and Class B Stockholders: 01 John J. Shalam, 02 Philip Christopher, 03 Charles M. Stoehr, 04 Patrick M. Lavelle, 05 Ann M. Boutcher, WITHHELD FOR: (Write that nominee's name in the 06 Richard A. Maddia space provided below): - ----------------------------------------------- - --------------------------------------------------------------------- IF YOU WISH TO VOTE ELECTRONICALLY PLEASE READ THE INSTRUCTIONS BELOW - --------------------------------------------------------------------- ________________________________ - ------------------------------------------------------------------------------------------------ COMPANY NUMBER: PROXY NUMBER: ACCOUNT NUMBER: ________________________________ - ------------------------------------------------------------------------------------------------ Signature _________________________________________ Signature _________________________________________________ Date ____________ NOTE: WHEN SIGNING AS EXECUTOR, ADMINISTRATOR, TRUSTEE, GUARDIAN, ETC. PLEASE ADD FULL TITLE. (SIGN EXACTLY AS NAME APPEARS ON THIS PROXY.) - ----------------------------------------------------------------------------------------------------------------------------------- [arrow up] FOLD AND DETACH HERE AND READ THE REVERSE SIDE [arrow up] ------------------------------------------ VOTE BY TELEPHONE OR INTERNET [GRAPHIC OMITTED] QUICK * * * EASY * * * IMMEDIATE [GRAPHIC OMITTED] ------------------------------------------ AUDIOVOX CORPORATION o You can now vote your shares electronically through the internet or the telephone. o This eliminates the need to return the proxy card. o Your electronic vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed, dated and returned the proxy card. TO VOTE YOUR PROXY BY INTERNET - ------------------------------ WWW.AUDIOVOX.COM Have your proxy card in hand when you access the above website. You will be prompted to enter the company number, proxy number and account number to create an electronic ballot. Follow the prompts to vote your shares. TO VOTE YOUR PROXY BY MAIL - -------------------------- Mark, sign and date your proxy card above, detach it and return it in the postage-paid envelope provided. TO VOTE YOUR PROXY BY PHONE - --------------------------- 1-800-293-8533 Use any touch-tone telephone to vote your proxy. Have your proxy card in hand when you call. You will be prompted to enter the company number, proxy number and account number. Follow the voting instructions to vote your shares. PLEASE DO NOT RETURN THE ABOVE CARD IF VOTED -------------------------------------------- ELECTRONICALLY --------------
PROXY THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AUDIOVOX CORPORATION The undersigned appoints each of Philip Christopher and Charles M. Stoehr as proxies, with power to act without the other and with power of substitution, hereby authorizes them to represent and vote, as designated on the other side, all the shares of stock of Audiovox Corporation standing in the name of the undersigned with all powers which the undersigned would possess if present at the Annual Meeting of Stockholders of the Company to be held May 9, 2002 or any adjournment thereof. (CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE) - -------------------------------------------------------------------------------- [arrow up] FOLD AND DETACH HERE [arrow up]