NINE ENTIN ROADP.O. BOX 430PARSIPPANY,3 UNIVERSITY PLAZA, SUITE 405
HACKENSACK, NEW JERSEY 07601
07054-0430
TO BE HELD NOVEMBER 10, 20097, 2012
Dear Stockholder:
As a stockholder of Emerson Radio Corp., you are hereby given notice of and invited to attend in person or by proxy our 20092012 Annual Meeting of Stockholders to be held at theour offices of our counsel, Lowenstein Sandler PC, located at 65 Livingston Avenue, Roseland,3 University Plaza, Suite 405, Hackensack, New Jersey 07068,07601, on Tuesday,Wednesday, November 10, 2009,7, 2012, at 9:00 a.m. (local time).
At this year’s stockholders’ meeting, you will be asked to (i) elect eightseven directors to serve for a one-year term,until the next annual meeting of stockholders and until their respective successors shall have been duly elected and qualified, (ii) ratify the appointment of MSPC Certified Public Accountants and Advisors, A Professional Corporation (“MSPC”) as our independent registered public accountants for the fiscal year ending March 31, 20102013 and (iii) transact such other business as may properly come before the meeting and any adjournment(s) thereof. Our Board of Directors unanimously recommends that you vote FOR the directors nominated and the ratification of MSPC. Accordingly, please give careful attention to these proxy materials.
Only holders of record of our common stock as of the close of business on October 8, 200912, 2012 are entitled to notice of and to vote at our annual meeting and any adjournment(s) thereof. Our transfer books will not be closed.
You are cordially invited to attend the annual meeting. Whether you expect to attend the annual meeting or not, please vote, sign, date and return in the self-addressed envelope provided the enclosed proxy card as promptly as possible. If you attend the annual meeting, you may vote your shares in person, even though you have previously signed and returned your proxy.
| By Order of the Board of Directors, |
/s/ Andrew L. Davis |
| Andrew L. Davis |
| Secretary |
Hackensack, New Jersey
October 19, 2009
YOUR VOTE IS IMPORTANT.
PLEASE EXECUTE AND RETURN PROMPTLY THE
ENCLOSED PROXY CARD IN THE ENVELOPE PROVIDED HEREIN.
Nine Entin RoadP.O. Box 430Parsippany,3 University Plaza, Suite 405
Hackensack, New Jersey 07601
07054-0430
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 10, 20097, 2012
To Our Stockholders:
This proxy statement is furnished in connection with the solicitation of proxies by the Board of Directors (“Board of Directors” or “Board”) of Emerson Radio Corp., a Delaware corporation (“Emerson” or the “Company”), to be used at our Annual Meeting of Stockholders to be held at theour offices of our counsel, Lowenstein Sandler PC, located at 65 Livingston Avenue, Roseland,3 University Plaza, Suite 405, Hackensack, New Jersey 07068,07601, on Tuesday,Wednesday, November 10, 2009,7, 2012, at 9:00 a.m. (local time), or at any adjournment or adjournments thereof. Our stockholders of record as of the close of business on October 8, 200912, 2012 are entitled to vote at our annual meeting. We expect to begin mailing this proxy statement and the enclosed proxy card to our stockholders on or about October 19, 2009.
Important Notice of Availability of Proxy Materials for the Annual Meeting of Stockholders to be held on November 10, 2009.
Our proxy materials, including our Proxy Statement for the 20092012 Annual Meeting, 20092012 Annual Report to Stockholders (which contains our Annual Report onForm 10-K for the year ended March 31, 2009)2012) and proxy card, are available on the Internet athttp://www.amstock.com/proxyservices/viewmaterial.asp?CoNumber=02008.02008.
The accompanying proxy card is designed to permit each of our stockholders as of the record date to vote on each of the proposals properly brought before the annual meeting. As of the record date, there were 27,129,832 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. Assuming that a quorum is present, directors will be elected by a plurality vote and the eight nominees who receive the most votes will be elected. There is no right to cumulate votes in the election of directors. The ratification of the appointment of MSPC. as our independent registered public accountants for the fiscal year ending March 31, 2010 will require the affirmative vote of a majority of the shares present and entitled to vote with respect to such proposal.
Abstentions and broker non-votes will be counted for the purpose of determining whether a quorum is present and do not have an effect on the election of directors.present. Abstentions, but not broker non-votes, are treated as shares present and entitled to vote, and will be counted as a “no” vote on all other matters. Broker non-votes are treated as not entitled to vote, and so reduce the absolute number, but not the percentage of votes needed for approval of a matter. Broker non-votes occur when nominees, such as banks and brokers holding shares on behalf of beneficial owners, do not receive voting instructions from the beneficial holders at least ten days before the meeting. If that happens, the nominees may vote those shares only on matters deemed “routine” by the New York Stock Exchange (NYSE), such as the ratification of auditors. Nominees cannot vote on non-routine matters unless they receive voting instructions from beneficial holders, resulting in so-called “broker non-votes.”
Assuming that a quorum is present, directors will be elected by a plurality vote and the seven nominees who receive the most votes will be elected. There is no right to cumulate votes in the election of directors. As a result, abstentions and “broker non-votes” (see below), if any, will not affect the outcome of the vote on this proposal.
Assuming that a quorum is present, the ratification of the appointment of MSPC Certified Public Accountants and Advisors, A Professional Corporation (“MSPC”) as our independent registered public accountants for the fiscal year ending March 31, 2013 and approval of any other matter that may properly come before the annual meeting, the affirmative vote of a majority of the total votes cast on these proposals, in person or by proxy, is required to approve these proposals. As a result, abstentions will have the same practical effect as a negative vote on these proposals, and “broker non-votes”, if any, will not affect the outcome of the vote on these proposals. The Company believes that the proposal for the ratification of our independent registered public accounting firm is considered to be a “routine” matter, and hence the Company does not expect that there will be a significant number of broker non-votes on such proposal.
As of the record date, October 12, 2012, The Grande Holdings Limited (Provisional Liquidators Appointed) (“Grande Holdings”Grande”) had advised the indirectCompany that Grande has, together with S&T International Distribution Limited (“S&T”), Grande N.A.K.S. Ltd. and Christopher Ho (Chairman of Grande’s and Emerson’s Boards of Directors) (together with Grande, the “Reporting Persons”) filed, on July 5, 2012, a Schedule 13D/A with the Securities and Exchange Commission (“SEC”) stating that, as of the filing date, the Reporting Persons (except Christopher Ho) had the shared power to vote and direct the disposition of 15,243,283 shares, or approximately 57.6%56.2%, of the outstanding common stock of Emerson, subject only to the rights granted to Deutsche Bank AG (“Deutsche Bank”) pursuant to a security agreement entered into between S&T and Deutsche Bank on January 20, 2010 in which S&T granted a security interest in an aggregate of 3,780,600 shares in Emerson common stock (the “Pledged Shares”) owned by S&T but pledged to Deutsche Bank for the purposes of securing obligations owing from Grande to Deutsche Bank (the “Secured Obligations”).
The aforementioned Schedule 13D/A also states that, as of the filing date, the Reporting Persons are aware only of the sale of 391,199 of the Pledged Shares by Deutsche Bank and that they have not yet been able to verify whether, or to what extent, Deutsche Bank has taken any other actions in respect of the Pledged Shares. The Reporting Persons also are of the view that the Secured Obligations have already been settled and, therefore, S&T reportedly is seeking clarification of the basis on which Deutsche Bank has claimed beneficial ownership of the remaining 3,380,079 shares out of the remaining 3,389,401 Pledged Shares. On February 11, 2011, Deutsche Bank filed a Schedule 13G with the SEC stating that it had sole voting and sole dispositive power over the Pledged Shares, which represent approximately 12.5% of the Company’s outstanding common stock. On January 9, 2012, Deutsche Bank filed with the SEC a Form 4 Statement of Changes in Beneficial Ownership stating that, after sales by it of certain of the Pledged Shares, it beneficially owned 3,380,079 shares of ourEmerson’s common stock, and Grande Holdings has advised uson February 10, 2012, Deutsche Bank filed with the SEC a Schedule 13G stating that they intend to vote in favorit was the beneficial owner with sole voting and sole dispositive power of each of the proposals.such shares. As a result of the foregoing, there are competing claims to 3,380,079 shares of Emerson’s common stock. As of October 12, 2012 and until further clarification is obtained, Emerson is unable to determine the beneficial ownership of such shares. Regardless of such determination, we expect thatthtat we will have a quorum present at the annual meeting and that each of the proposals will be approved. Holders of our common stock will not have any dissenters’ rights of appraisal in connection with any of the matters to be voted on at the annual meeting.
On May 31, 2011, upon application of a major creditor, the High Court of Hong Kong appointed Fok Hei Yu (who is also known by the anglicized name Vincent Fok), a current director, and Roderick John Sutton, both of FTI Consulting (Hong Kong) Limited (“FTI”), as Joint and Several Provisional Liquidators over Grande (the “Provisional Liquidators over Grande”). Accordingly, as of May 31, 2011, the directors of Grande no longer have the ability to exercise control over Grande or the power to direct the voting and disposition of the 15,243,283 shares described in footnote (2) to “Security Ownership of Certain Beneficial Owners and Management”. Instead, Mr. Fok, as a Provisional Liquidator over Grande, has such power.
The accompanying proxy card provides space for you to vote in favor of, or to withhold voting for: (i) the nominees for the Board of Directors identified herein and (ii) the ratification of the appointment of MSPC as
When a signed proxy card is returned with choices specified with respect to voting matters, the proxies designated on the proxy card will vote the shares in accordance with the stockholder’s instructions. The Company has designated Andrew L. Davis and Barry Smith as proxies we have designated for the stockholders are Greenfield Pitts and Andrew L. Davis.stockholders. If you desire to name another person as your proxy, you may do so by crossing out the names of the designated proxies and inserting the names of the other persons to act as your proxies. 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 usthe Company and you have made no specifications with respect to voting matters, your shares will be voted FOR: (i) the election of the nominees for director identified herein and (ii) the ratification of the appointment of MSPC as ourthe Company’s independent registered public accountants for the fiscal year ending March 31, 20102013 and, at the discretion of the proxies designated by us,the Company, 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 our 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 at or prior to the annual meeting we have received notice of such revocation.
At least ten (10) days before the annual meeting, wethe Company will make a complete list of the stockholders entitled to vote at the annual meeting open to the examination of any stockholder for any purpose germane to the meeting. The list will be open for inspection during ordinary business hours at ourthe Company’s offices located at Nine Entin Road, Parsippany,3 University Plaza, Suite 405, Hackensack, New Jersey 07054,07601, and will also be made available to stockholders present at the meeting.
Seven 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.
The eightseven nominees for election as directors to serve until ourthe next annual meeting of shareholdersstockholders and until their successors have been duly elected and qualified are Christopher Ho, Adrian Ma, Greenfield Pitts,Eduard Will, Duncan Hon, Eduard Will,Vincent Fok, Mirzan Mahathir, Kareem E. Sethi and Terence A. Snellings. All of the nominees named in this proxy statement are members of ourthe Company’s current Board of Directors. All nominees have consented to serve if elected and we havethe Company has no reason to believe that any of the nominees named will be unable to serve. If any nominee becomes unable to serve, (i) the shares represented by the designated proxies will be voted for the election of a substitute as ourthe Company’s Board of Directors may recommend, (ii) ourthe Company’s Board of Directors may reduce the number of directors to eliminate the vacancy or (iii) ourthe Company’s Board of Directors may fill the vacancy at a later date after selecting an appropriate nominee.
The current Board of Directors nominated the individuals named below for election to our Board of Directors, and information regarding the background information onand qualifications of 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 of securities issued by Emerson.
2
Name | Age | Year First Became Director | Principal Occupation or Employment | |||
| Christopher Ho (1) | 62 | 2006 | Christopher Ho has served as the Company’s Chairman since July 2006. Mr. Ho is presently the Chairman of Grande, a Hong Kong based group of companies engaged principally in the distribution of household appliances and consumer electronic products and licensing of trademarks. Grande indirectly, through a wholly-owned subsidiary, owns the controlling interest in the Company’s outstanding common stock. Mr. Ho also currently serves as Chairman of Lafe Corporation Limited, a company listed on the Singapore Exchange. Mr. Ho graduated from the University of Toronto in 1974. He is a member of the Canadian Institute of Chartered Accountants as well as a member of the Certified Management Accountants of Ontario. He also is a Certified Public Accountant in Hong Kong and a member of the Hong Kong Institute of Certified Public Accountants. He was a partner in an international accounting firm before joining Grande and has extensive experience in corporate finance, international trade and manufacturing.
Based on Mr. Ho’s position as Chairman of Grande and his experience in the consumer electronics industry, the Board of Directors believes that he is well qualified to serve as a director of the Company.
| |||
| Eduard Will (1) | 70 | 2006 | Eduard Will has been the Company’s Vice Chairman since October 2007 and a director since July 2006. From July 2006 until October 2007, Mr. Will served as the Company’s President- North American Operations. Prior to becoming President- North American Operations, Mr. Will was the Chairman of the Company’s Audit Committee from January 2006 through July 2006. From 2001 to 2002, Mr. Will served as Chief Executive Officer of Boca Research, Inc. Mr. Will has more than 40 years of experience as a merchant banker, senior advisor and director of various public and private companies. Presently, Mr. Will is serving on the Board or acting as Senior Adviser to Lafe Corporation Limited, Ricco Capital (Holdings) Ltd. (Hong Kong) and South East Group (Hong Kong). | |||
Based on Mr. Will’s background in merchant banking and service on a variety of corporate boards, the Board believes that he is well qualified to serve as a director of the Company.
| ||||||
| Duncan Hon | 51 | 2009 | Duncan Hon, a director of the Company since February 2009, has been the Company’s Chief Executive Officer since August 2011 and, prior to that, was the Company’s Deputy Chief Executive Officer since November 2009. In addition, Mr. Hon was appointed as a director of Grande in January 2011. Mr. Hon also serves as Chief Executive Officer of the Branded Distribution Division of Grande. Mr. Hon currently serves as a director and Vice Chairman of the Board of Sansui Electric Co. Ltd. and also serves as a director of several of Grande’s non-listed subsidiaries. From 2004 to 2007, Mr. Hon served as a director of Smart Keen International Limited, a Hong Kong company, providing financial consulting services. He is a member of the Hong Kong Institute of Certified Public Accountants and the Association of Chartered Certified Accountants. |
Based on Mr. Hon’s role as Chief Executive Officer of the Company, his experience in management and accounting, and his position as a director and executive of Grande, the Board believes that he is well qualified to serve as a director of the Company. Vincent Fok Vincent Fok has been a director since August 2011. Mr. Fok is currently a senior managing director of FTI, a global advisory firm assisting companies to protect and enhance enterprise value, and was appointed one of two Joint and Several Provisional Liquidators over Grande by the High Court of Hong Kong on May 31, 2011. Additionally, Mr Fok is an independent non-executive director of Kaisa Group Holdings Limited, which is listed on the Hong Kong Stock Exchange, and was a non-executive director of Delong Holding Limited, a Singapore listed company, between 2009 and 2012. Mr. Fok is a member of the Hong Kong Institute of Certified Public Accountants, the Australian Society of Certified Practicing Accountants and the Hong Kong Institute of Directors. Mr Fok graduated from Australian National University with a bachelor’s degree in commerce. Based on Mr. Fok’s background in business and corporate finance, the Board believes that he is well qualified to serve as a director of the Company. Mirzan Mahathir (1) Mirzan Mahathir has been a director since December 2007. Mr. Mahathir currently manages his investments in Malaysia and overseas while facilitating business collaboration in the region. Previously, Mr. Mahathir worked for IBM Corporation and Salomon Brothers. Between 1992 and 2007, Mr. Mahathir served as the Executive Chairman and President of Konsortium Logistik Berhad, a Malaysian logistic solutions provider listed on the Bursa Malaysia. He also is the Chairman and CEO of Crescent Capital Sdn Bhd, a Malaysian investment holding and independent strategic and financial advisory firm which he founded, and the President of the Asian Strategy and Leadership Institute (ASLI), a leading organizer of business conferences, secretariat for business councils and public policy research centre. Currently, Mr. Mahathir holds directorships in Petron Corporation, AHB Holdings Berhad and Lafe Corporation Limited, companies listed on the Philippine Stock Exchange, Bursa Malaysia, and the Singapore Exchange respectively. He is also a member of the Wharton Business School Asian Executive Board. During the past five years, Mr. Mahathir also served as a member of the UN/ESCAP Business Advisory Council. Based on Mr. Mahathir’s executive management and directorship experience, the Board believes that he is well qualified to serve as a director of the Company. Kareem E. Sethi (2) 42 2011 53 2007 35 2007 Kareem E. Sethi has been a director since December 2007. Mr. Sethi has served as Managing Director of Streetwise Capital Partners, Inc. since 2003. From 1999 until 2003, Mr. Sethi was Manager, Business Recovery Services for PricewaterhouseCoopers LLP.
| Year | ||||||||||
| First | ||||||||||
| Became | ||||||||||
Name | Age | Director | Principal Occupation or Employment | |||||||
| Christopher Ho | 59 | 2006 | Christopher Ho has served as the Company’s Chairman since July 2006. Mr. Ho is presently the Chairman of Grande Holdings, a Hong Kong based group of companies engaged in a number of businesses including the manufacture, sale and distribution of audio, video and other consumer electronics and video products. Grande Holdings beneficially holds approximately 57.6% of the Company’s outstanding common shares. Mr. Ho also currently serves as Chairman of Lafe Corporation Ltd., a company listed on the Singapare Exchange, and a representative director of Sanusi Electric Co., Ltd., a company listed on the Tokyo Stock Exchange. Mr. Ho graduated with a Bachelor of Commerce degree from the University of Toronto in 1974. He is a member of the Canadian Institute of Chartered Accountants as well as a member of the Institute of Management Accountants of Canada. He also is a certified public accountant (Hong Kong) and a member of the Hong Kong Institute of Certified Public Accountants. He was a partner in international accounting firms before joining Grande Holdings and has extensive experience in corporate finance, international trade and manufacturing. | |||||||
| Adrian Ma(1) | 64 | 2006 | Adrian Ma, a director of the Company since March 30, 2006, has been the Company’s Chief Executive Officer since March 30, 2006 and also served as its Chairman from March 30, 2006 through July 26, 2006. In addition, Mr. Ma is a director of Grande Holdings. He has more than 30 years experience as an Executive Chairman, Executive Director and Managing Director of various organizations focused primarily in the consumer electronics industry. Mr. Ma also is Director of Lafe Technology Ltd., Vice Chairman and Managing Director of Ross Group Inc. and Deputy Chairman of Sansui Electric Co. Ltd. | |||||||
| Greenfield Pitts | 59 | 2006 | Greenfield Pitts has served as the Company’s Chief Financial Officer since February 2007 and a director since March 2006. Mr. Pitts has a 30-year background in international banking and was associated with Wachovia Bank, the Company’s present lender, for more than 25 years, with assignments in London, Atlanta and Hong Kong. From 1997 to 2006, he was in Hong Kong managing a joint venture between Wachovia and HSBC, later working in Corporate Finance for Wachovia Securities. | |||||||
| Duncan Hon | 48 | 2009 | Duncan Hon has been a director since February 2009. Mr. Hon currently serves as Chief Executive Officer of the Branded Distribution Division of Grande Holdings. Mr. Hon has also served as a director of Grande Holdings and several of its subsidiaries. From 2004 to 2007, Mr. Hon served as a director of Smart Keen International Limited, a Hong Kong company, providing financial consulting services. He is a member of the Hong Kong Institute of Certified Public Accountants and the Association of Chartered Certified Accountants. | |||||||
Based on Mr. Sethi’s experience in accounting, corporate finance and portfolio management, the Board believes that he is well qualified to serve as a director of the Company.
| ||||||
| Terence A. Snellings (1) (2) | 62 | 2008 | Terence A. Snellings has been a director since August 2008. Until December 2009, Mr. Snellings served as Director of Finance and Administration of Refugee Resettlement and Immigration Services of Atlanta, Inc., a non-profit agency that provides an entry into the American culture for refugees. From 1986 until April 2006, Mr. Snellings served as Managing Director of Wachovia Services, Ltd., where he managed investment banking origination activities of the Asia-Pacific Group within Wachovia Securities Corporate and Investment Banking Division. | |||
| Based on Mr. Snellings’ experience in international banking and finance, the Board believes that he is well qualified to serve as a director of the Company. |
3
| Year | ||||||||||
| First | ||||||||||
| Became | ||||||||||
Name | Age | Director | Principal Occupation or Employment | |||||||
| Eduard Will(1) | 67 | 2006 | Eduard Will has been the Company’s Vice Chairman since October 2007 and a Director since July 2006. From July 2006 until October 2007, Mr. Will served as the Company’s President- North American Operations. Prior to becoming President- North American Operations, Mr. Will was the Chairman of the Company’s Audit Committee from January 2006 through July 2006. From 2001 to 2002 Mr. Will served as Chief Executive Officer of Boca Research, Inc. Mr. Will has more than 37 years experience as a merchant banker, senior advisor and director of various public and private companies. Presently, Mr. Will is serving on the Board of Directors or acting as Senior Adviser to Grande Holdings, KoolConnect Technologies Inc., Ricco Capital (Holdings) Ltd. (Hong Kong), South East Group (Hong Kong) and Integrated Data Corporation. | |||||||
| Mirzan Mahathir(1) | 50 | 2007 | Mirzan Mahathir has been a Director since December 2007. Mr. Mahathir currently manages his investments in Malaysia and overseas while facilitating business collaboration in the region. Previously, Mr. Mahathir worked for IBM Corporation and Salomon Brothers. Since 1992, Mr. Mahathir has served as the Executive Chairman and President of Konsortium Logistik Berhad, a Malaysian logistic solutions provider listed on the Kuala Lumpur Stock Exchange. He also is the Chairman and CEO of Crescent Capital Sdn Bhd, a Malaysian investment holding and independent strategic and financial advisory firm which he founded and the President of the Asian Strategy and Leadership Institute (ASLI), a leading organizer of business conferences, secretariat for business councils and Public Policy research centre. Currently, Mr. Mahathir holds directorships in Worldwide Holdings Berhad and AHB Holdings Berhad, companies listed on the Bursa Malaysia, San Miguel Corporation, a company listed on the Philippines Exchange, and Lafe Technology Ltd., a company listed on the Singapore Exchange. He is also a member of the UN/ ESCAP Business Advisory Council, the American Bureau of Shipping Southeast Asia Committee and the Wharton Business School Asian Executive Board. | |||||||
| Kareem E. Sethi(2) | 32 | 2007 | Kareem E. Sethi has been a Director since 2007. Mr. Sethi has served as Managing Director of Streetwise Capital Partners, Inc. since 2003. From 1999 until 2003, Mr. Sethi was Manager, Business Recovery Services for PricewaterhouseCoopers Inc. | |||||||
| Terence A. Snellings(2) | 59 | 2008 | Terence A. Snellings has been a Director since August 2008. Mr. Snellings has served as Director of Finance and Administration of Refugee Resettlement and Immigration Services of Atlanta, Inc., a non-profit agency that provides an entry into the American culture for refugees, since June 2006. From 1986 until April 2006, Mr. Snellings served as Managing Director of Wachovia Services, Ltd., where he managed investment banking origination activities of the Asia-Pacific Group within Wachovia Securities Corporate and Investment Banking Division. | |||||||
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| (1) | Member of the Corporate Governance, Nominating and Compensation Committee | |
| (2) | Member of the Audit Committee |
Family Relationships
There are no family relationships among the nominees for director, the officers and key employees of the Company.
Vote Required
Directors will be elected by a plurality of the votes cast by the holders of ourEmerson common stock voting in person or by proxy at the annual meeting. Abstentions and broker non-votes will each be counted as present for purposes of determining the presence of a quorum, but will have no effect on the vote for election of directors.
THE BOARD OF DIRECTORS URGES YOU TO VOTE “FOR”
EACH OF THE NOMINEES FOR DIRECTOR SET FORTH ABOVE.
5
OWNERS AND MANAGEMENT
The following table sets forth, as of October 8, 2009,12, 2012, the beneficial ownership of (i) each current director; (ii) each of the Company’s Named Executive Officers; (iii) the Company’s current directors and executive officers as a group; and (iv) each stockholder known by the Company to own beneficially more than 5% of the Company’s outstanding shares of common stock. Common stock beneficially owned and percentage ownership as of October 8, 200912, 2012 was based on 27,129,832 shares outstanding. Except as otherwise noted, the address of each of the following beneficial owners isc/o Emerson Radio Corp., Nine Entin Road, Parsippany,3 University Plaza, Suite 405, Hackensack, New Jersey 07054.
| Amount and Nature of | ||||||||
Name and Address of Beneficial Owners | Beneficial Ownership(1) | Percent of Class(1) | ||||||
| Christopher Ho(2) | 15,634,482 | 57.6 | % | |||||
| Adrian Ma | 0 | 0 | % | |||||
| Greenfield Pitts(3) | 50,000 | * | ||||||
| John Spielberger | 0 | 0 | % | |||||
| Duncan Hon | 0 | 0 | ||||||
| Eduard Will(4) | 50,000 | * | ||||||
| Mirzan Mahathir | 0 | 0 | % | |||||
| Kareem E. Sethi | 0 | 0 | % | |||||
| Terence A. Snellings | 0 | 0 | % | |||||
| Lloyd I. Miller, III(5) | 2,071,870 | 7.6 | % | |||||
| All Directors and Executive Officers as a Group (9 persons)(6) | 15,734,482 | 58.0 | % | |||||
Name and Address of Beneficial Owners | Amount and Nature of Beneficial Ownership (1) | Percent of Class (1) | ||||||
Christopher Ho | 0 | (2)(3) | 0 | %(2)(3) | ||||
Vincent Fok | 15,243,283 | (3) | 56.2 | %(3) | ||||
Duncan Hon | 0 | (3) | 0 | %(3) | ||||
Mirzan Mahathir | 0 | 0 | % | |||||
Kareem E. Sethi | 0 | 0 | % | |||||
Terence A. Snellings | 0 | 0 | % | |||||
Eduard Will (4) | 50,000 | * | ||||||
Andrew L. Davis | 0 | 0 | % | |||||
Adrian Ma | 0 | 0 | % | |||||
Greenfield Pitts | 0 | 0 | % | |||||
Deutsche Bank AG | 3,380,079 | (2)(5) | 12.5 | %(2)(5) | ||||
Lloyd I. Miller, III (6) | 1,680,867 | 6.2 | % | |||||
S&T International Distribution Limited | 15,243,283 | (2) | 56.2 | %(2) | ||||
William C. Martin (7) | 1,387,549 | 5.1 | % | |||||
All Directors and Executive Officers as a Group (8 persons) (8) | 15,293,283 | (8) | 56.3 | %(8) | ||||
| (*) | Less than one percent. | |
| (1) | Based on 27,129,832 shares of common stock outstanding as of October | |
| (2) | Grande, a Bermuda corporation, has, together with S&T, Grande N.A.K.S. Ltd. |
| (3) | On May 31, 2011, upon application of a major creditor, the High Court of Hong Kong appointed Fok Hei Yu (who is also known by the anglicized name Vincent Fok), a current director, and Roderick John Sutton, both of FTI, as Joint and Several Provisional Liquidators over Grande. Accordingly, as of May 31, 2011, the directors of Grande no longer have the ability to exercise control over Grande or the power to direct the voting and disposition of the 15,243,283 shares described in footnote (2). Instead, Mr. Fok, as a Provisional Liquidator over Grande, has such power. |
| (4) | Mr. Will’s ownership consists of options to purchase 50,000 shares of the Company’s common stock pursuant to Emerson’s 2004 Non-Employee Director Stock Option Plan that are exercisable within 60 days of October |
6
| (5) | The address for Deutsche Bank AG is Theodor-Heuss-Allee 70, 60468 Frankfurt am Main, Federal Republic of Germany — see also footnote (2) above. |
| (6) | Lloyd I. Miller, III has sole voting and dispositive power with respect to |
| (7) | Raging Capital Fund, LP, Raging Capital Fund (QP), LP, Raging Capital Management, LLC and William Martin have shared voting and dispositive power with respect to 1,387,549 shares. Their address is Ten Princeton Avenue, Rocky Hill, New Jersey 08553. Information with respect to the ownership of these shares was obtained from a Schedule 13D filed with the SEC on January 23, 2012. |
| (8) | See footnotes (2) |
Board of Directors and Committees
The Company’s Board of Directors presently consists of eightseven directors and, other than the resignation from the Board of Directors of Mr. Adrian Ma on August 8, 2011 and the appointment to the Board of Directors of Mr. Vincent Fok on August 31, 2011 to fill the vacancy created by Mr. Ma’s resignation, the Board of Directors’ composition is otherwise unchanged since the beginning of the Company’s fiscal year ended March 31, 2012 (“Fiscal 2012”) — Messrs. Ho, Ma, Pitts,Will, Hon, Will,Fok, Mahathir, Sethi and Snellings. ThreeSnellings currently serve on the Board of Directors. The Board of Directors has determined that four of the eightseven current directors, Messrs. Will, Mahathir, Sethi and Snellings, meet the definition of independence as established by the NYSE AmexMKT listing standards and SEC rules. Until their respective resignations during Fiscal 2009, the following individuals also served on the Company’s Board of Directors — Messrs. Michael A.B. Binney, W. Michael Driscoll, David R. Peterson and Norbert Wirsching. The Company’s Board of Directors determined that W. Michael Driscoll and Norbert R. Wirsching, each of whom served as a member of our Board of Directors during Fiscal 2009, were “independent” as defined under the NYSE Amex listing standards.
The Board of Directors is responsible for the management and direction of our companythe Company and for establishing broad corporate policies. The Board of Directors meets periodically during ourthe Company’s fiscal year to review significant developments affecting usthe Company and to act on matters requiring Board of Director approval. The Board of Directors held nineone formal meetingsmeeting during Fiscal 20092012, and also acted by unanimous written consent. During Fiscal 2009,2012, each member of the Board of Directors participated in at least 75% of the aggregate of all meetings of the Board of Directors and the aggregate of all meetings of committees on which such member served, that were held during the period in which such director served during Fiscal 2009,2012, except Mr. Ho,Mahathir, who attended five ofdid not attend the meetingssingle meeting of the Board of Directors. We have a policyDirectors that was held during Fiscal 2012. The Company encourages, but does not require, members of encouraging, but not requiring, ourthe Board membersof Directors to attend annual meetings of stockholders. Last year, fiveone of ourthe Company’s directors who werewas nominated for re-election attended our 2008the Company’s 2011 Annual Meeting.
The Company’s Board of Directors has two standing committees, the Audit Committee, which is a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 10A-3 thereunder, and the Corporate Governance, Nominating and Compensation Committee (the “CGNC Committee”). Prior to November 10, 2011, there was a third committee, the Related Party Transaction Review Committee, which was dissolved on that date, and whose duties were assigned on that date to the CGNC Committee.
Audit Committee.The Company’s Audit Committee currently consists of Mr. Sethi and Mr. Snellings, eachboth of whom meetsthe Board of Directors has determined meet the definition of independence as established by the NYSE AmexMKT listing rules and SEC rules.rules and its composition is unchanged since the beginning of Fiscal 2012. Mr. Sethi is currently the Chairman of the Audit Committee and the “audit committee financial expert.” Pursuant to Section 803(B)(2)(c) of the NYSE AmexMKT Company Guide (the “Company Guide”), as a smaller reporting company, the Company is required to have an audit committee of at least two independent members, as defined by the listing standards of the NYSE Amex. During a portion of Fiscal 2009, the Audit Committee consisted of Mr. Sethi, Mr. Driscoll and Mr. Wirsching, each of whom meets the definition of independence as established by the NYSE Amex and SEC rules. For a brief period following the resignations of Mr. Driscoll and Mr. Wirsching
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Report of the Audit Committee
This report shall not be deemed “soliciting material” or incorporated by reference in any filing by usthe Company under the Securities Act or the Exchange Act except to the extent that wethe Company specifically incorporateincorporates this information by reference, and shall not otherwise be deemed filed under either act.
The Audit Committee has (i) reviewed and discussed the Company’s audited consolidated financial statements and has met and held discussionsfor the year ended March 31, 2012 with the Company’s management and MSPC, Emerson’swith the Company’s independent auditors. Management has represented to the Audit Committee that Emerson’s consolidated financial statements were prepared in accordance with generally accepted accounting principles. Emerson’s independent auditors are responsible for performing an independent audit of Emerson’s financial statements in accordance with auditing standards generally accepted in the United States and for issuing a report on those financial statements. The Audit Committee is responsible for monitoring and overseeing these processes. The Audit Committee alsoauditor, MSPC; (ii) discussed with MSPCthe Company’s independent auditor the matters required to be discussed by Statement on Auditing Standards No. 61, as amended,amended; and as adopted(iii) received the written disclosures and the letter from the Company’s independent accountants required by applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) in Rule 3200T, which includes, among other items, matters related toregarding the conduct of the audit of Emerson’s financial statements:
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The Audit Committee also considered whether the provision to the relevant entity by applicable standardsthe independent auditor of non-audit services was compatible with maintaining the independence of the PCAOB which relate to the independent registered Public Accounting firm’s independence. In addition, the Audit Committee discussed with MSPC its independence from the Company. The standards further require the independent registered Public Accounting firm to disclose annually in writing all relationships that, in their professional opinion, may reasonably be thought to bear on their independence, confirm their perceived independence and engage in the discussion of independence.
Based on the Audit Committee’sreviews and discussions with management and MSPC, as well as the Audit Committee’s review of the representations of management and the report of MSPC to the Audit Committee,described above, the Audit Committee recommended to the Board of Directors that Emerson’sthe audited consolidated financial statements of the Company be included in ourthe Company’s Annual Report onForm 10-K for the fiscal year ended March 31, 2009,2012 for filing with the Securities and Exchange Commission.
Members of the Audit Committee
Kareem E. Sethi (Chairman)
Terence A. Snellings
Corporate Governance, Nominating and Compensation Committee. UnderSo long as Grande holds beneficially more than 50% of the outstanding common stock of Emerson, Emerson is a Controlled Company under Sections 804 and 805 of the Company Guide, the Company isand therefore exempt from the requirementrequirements to have (i) the compensation of its executives determined by a compensation committee comprised solely of independent directors or by a majority of the board’sBoard of Directors’ independent directors and from the requirement to have(ii) director nominees selected by a nominating committee comprised entirely of independent directors or by a majority of the independent directorsdirectors. Even so, Emerson satisfies the requirements of Sections 804 and 805 of the Company Guide because the CompanyCGNC Committee consists of three independent directors (Messrs. Mahathir, Will and Snellings) and only one director who is a Controlled Company. In April 2008,not independent (Mr. Ho), having been appointed by the Company’s Board of Directors establishedafter a determination that Mr. Ho’s experience was exceptionally valuable to the committee, and that his appointment was in the best interest of the Company and its stockholders. Mr. Ho’s appointment was made on November 10, 2010 pursuant to an exception to Sections 804 and 805 of the Company Guide which provides, among other things, that his service on the committee may not exceed two years. In order to continue to satisfy the requirements of Sections 804 and 805 of the Company Guide, Mr. Ho will be ineligible to continue to serve on the CGNC Committee after the 2012 annual meeting. Mr. Ho has served as the Company’s Chairman since July 2006, and is presently the Chairman of Grande, a Hong Kong based group of companies which indirectly, through a wholly-owned subsidiary, owns the controlling interest in the Company’s outstanding common stock.
The CGNC Committee, among other things, (i) identifies individuals qualified to become members of the Board of Directors and recommends to the Board of Directors director nominees for election at the next Annual Meeting of Stockholders, (ii) reviews and monitors matters related to management development and succession, (iii) develops and implements executive compensation policies and pay for performance criteria, (iv) reviews and approves salaries, bonuses and incentive awards and (v) pre-approves any proposed transactions between the Company and related parties.
During Fiscal 2012, the Corporate Governance, Nominating and Compensation Committee which was to be comprised of three members, at least two of whom were to be “independent” as such term is defined in Section 803A ofperformed its duties without a written charter and formally met five times. A written charter for the Company Guide. On June 24, 2008, our Corporate Governance, Nominating and Compensation Committee was fully constituted with three directors, Messrs. Ma, Petersonapproved and Sethi, two of whom the Board had determined were independent as such term is defined in Section 803A of the Company Guide. Following Mr. Peterson’s resignation as a director on July 15, 2008,adopted by the Board of Directors resolvedin July 2012. A copy of the Company’s Corporate Governance, Nominating and Compensation Committee Charter is posted on September 19, 2008 to reconstitutethe Company’s website: www.emersonradio.com on the Investor Relations page.
Members of the Corporate Governance, Nominating and Compensation Committee as being
Mirzan Mahathir (Chairman)
Christopher Ho
Eduard Will
Terence A. Snellings
Prior to its dissolution by the Board on November 10, 2011, the Related Party Transaction Review Committee was comprised of Messrs. Ma,Mahathir (Chairman), Will and Mahathir, one of whom the Board had determined was “independent” as defined under the NYSE Amex listing standards. The Corporate Governance, NominatingSethi, and Compensation Committee metdid not formally three timesmeet during Fiscal 2009.
Procedures for Considering Nominations Made by Stockholders.Nominations for election to the Board of Directors may be made by ourthe Company’s Board of Directors or by any stockholder of any outstanding class of ourthe Company’s capital stock entitled to vote for the election of directors. The following procedures shall be utilized in
considering any candidate for election to the Board of Directors at an annual meeting, other than candidates who have previously served on the Board of Directors or who are recommended by the Board of Directors. A nomination must be delivered to ourthe Company’s Secretary at ourits principal executive offices not later than the close of business on the ninetieth (90th) day nor earlier than the close of business on the one hundred twentieth (120th) day prior to the first anniversary of the preceding year’s annual meeting;provided, however, that if the date of
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Qualifications. OurThe Company’s Board of Directors has adopted guidelines describing the minimum qualifications for nominees and the qualities or skills that are necessary for directors to possess. Each nominee (i) must satisfy any legal requirements applicable to members of the Board of Directors; (ii) must have business, professional or other experience that will enable such nominee to provide useful input to the Board of Directors in its deliberations; and (iii) must have knowledge of the types of responsibilities expected of members of the board of directors of a public company.
Identification and Evaluation of Candidates for the Board.Candidates to serve on the Board of Directors will be identified from all available sources, including recommendations made by stockholders, members of ourthe Company’s management and members of ourthe Company’s Board of Directors. OurThe Company’s Board of Directors has a policy that there will be no differences in the manner in which ourits Board of Directors evaluates nominees recommended by stockholders and nominees recommended by it or management, except that no specific process shall be mandated with respect to the nomination of any individuals who have previously served on the Board of Directors. The evaluation process for individuals other than existing members of the Board of Directors will include a review of the information provided to the Board of Directors by the proponent and a review of such other information as the Board of Directors shall determine to be relevant.
Third Party Recommendations.In connection with the Annual Meeting, the Board of Directors did not receive any nominations from any stockholder or group of stockholders which owned more than 5% of ourthe Company’s common stock for at least one year.
Diversity Considerations in Director Nominations
The Company does not have a formal diversity policy. The Company believes its Board of Directors represents a collection of individuals with a variety of complementary skills which, as a group, possess the appropriate skills and experience to oversee the Company’s business. The CGNC Committee considers a wide variety of qualifications, attributes and other factors and recognizes that a diversity of viewpoints and practical experiences can enhance the effectiveness of the Company’s Board.
Board Leadership Structure
The Company does not have a formal policy regarding whether the roles of the Chairman of the Board and Chief Executive Officer should be combined or separated. The Board of Directors recognizes that one of its key responsibilities is to evaluate and determine its optimal leadership structure so as to provide independent oversight of management. The Board of Directors understands that there is no single, generally accepted approach to providing Board leadership and that given the dynamic and competitive environment in which the Company operates, the right Board leadership structure may vary as circumstances warrant. Currently, the roles of Chief Executive Officer and Chairman of the Board are separate; however, representatives of the Company’s controlling stockholder serve in each role. Mr. Hon, a director of Grande, serves as the Company’s Chief Executive Officer. Mr. Ho, Chairman of Grande, serves as the Company’s Chairman of the Board.
Role in Risk Oversight
Although the Company’s management is responsible for implementing systems and processes to identify and manage risks, the Company’s Board has oversight responsibility for the Company’s risk management processes. In carrying out its oversight responsibility, the Board of Directors has delegated to individual committees certain elements of its risk oversight function. This oversight is administered primarily through the following:
The Board of Directors’ review and approval of the Company’s annual budget (prepared and presented to the Board of Directors by the management team), including discussion of the opportunities and challenges facing its business;
The Audit Committee’s oversight of the Company’s internal control over financial reporting and its discussions with management and the independent accountants regarding the quality and adequacy of the Company’s internal controls and financial reporting; and
The CGNC Committee’s review and recommendations to the Board of Directors regarding executive officer compensation and its relationship to the Company’s business plans.
Process for Sending Communications to the Board of Directors
The Board of Directors has established a procedure that enables stockholders to communicate in writing with members of the Board of Directors. Any such communication should be addressed to the Company’s Secretary and should be sent to such individual atc/o Emerson Radio Corp., Nine Entin Road, Parsippany,3 University Plaza, Suite 405, Hackensack, New Jersey 07054.07601. Any such communication must state, in a conspicuous manner, that it is intended for distribution to the entire Board of Directors. Under the procedures established by the Board of Directors, upon the Secretary’s receipt of such a communication, the Company’s Secretary will send a copy of such communication to each member of the Board of Directors, identifying it as a communication received from a stockholder. Absent unusual circumstances, at the next regularly scheduled meeting of the Board of Directors held more than two days after such communication has been distributed, the Board of Directors will consider the substance of any such communication.
Codes of Ethics
The Company has adopted a Code of Ethics for Senior Financial Officers (“Code of Ethics”) that applies to its Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer, Controller and Treasurer. This Code of Ethics was established with the intention of focusing Senior Financial Officers on areas of ethical risk, providing guidance to help them recognize and deal with ethical issues, providing mechanisms to
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The Company has also adopted a Code of Conduct for Officers, Directors and Employees of Emerson Radio Corp. and Its Subsidiaries (“Code of Conduct”). We prepared this Code of Conduct to help all officers, directors and employees understand and comply with its policies and procedures. Overall, the purpose of the Company’s Code of Conduct is to deter wrongdoing and promote (i) honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; (ii) full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with, or submits to, the SEC and in other public communications made by the Company; (iii) compliance with applicable governmental laws, rules and regulations; (iv) prompt internal reporting of code violations to an appropriate person or persons identified in the Code of Conduct; and (v) accountability for adherence to the Code of Conduct.
The Code of Ethics and the Code of Conduct are posted on the Company’s website: www.emersonradio.com on the Investor Relations page. If the Company makes any substantive amendments to, or grant any waiver (including any implicit waiver) from a provision of the Code of Ethics or the Code of Conduct, and that relates to any element of the Code of Ethics definition enumerated in Item 406 (b) ofRegulation S-K, the Company will disclose the nature of such amendment or waiver on its website or in a current report onForm 8-K.
The following table sets forth certain information regarding the current executive officers (1) of Emerson:
| Year | ||||||||||
Name | Age | Position | Became Officer | |||||||
| Adrian Ma | 64 | Chief Executive Officer and Director | 2006 | |||||||
| Greenfield Pitts | 59 | Chief Financial Officer and Director | 2007 | |||||||
| John Spielberger | 46 | President-North American Operations | 2007 | |||||||
Duncan Hon | |||||||||||||||||||||||||||||||||||||
Greenfield PittsAndrew L. Davishas served as the Company’s Executive Vice President and Chief Financial Officer since February 2007 andSeptember 2010. Mr. Davis also serves as Secretary of the Company, a director since March 2006. Seeposition to which he was elected in November 2007. Previously, Mr. Pitts’ biographical information above.
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Summary Compensation Table
The following Summary Compensation Table sets forth information concerning compensation for services rendered in all capacities to usthe Company and ourits subsidiaries for Fiscal 20092012 and for the fiscal year ended March 31, 2011 (“Fiscal 20082011”) which was awarded to, earned by or paid to each person who served as ourthe Company’s principal executive officer at any time during Fiscal 2009 and2012, the two most highly compensated executive officers other than the principal executive officer who were serving as executive officers as of March 31, 20092012 and up to two additional individuals for whom disclosure would have been provided but for the fact that the individual was not serving as an executive officer of the smaller reporting company as of March 31, 2012 (collectively, the “Named Executive Officers”).
| All Other | ||||||||||||||||||||||||
| Name and | Option | Compensation | ||||||||||||||||||||||
Principal Position | Fiscal Year | Salary ($) | Bonus ($)(2) | Awards ($)(1) | ($)(3) | Total ($) | ||||||||||||||||||
| Adrian Ma(4) | 2009 | $ | 350,000 | — | — | — | $ | 350,000 | ||||||||||||||||
| President and Chief Executive Officer | 2008 | $ | 50,000 | — | — | $ | 50,000 | |||||||||||||||||
| Greenfield Pitts(5) | 2009 | $ | 250,000 | — | $ | 9,500 | $ | 23,459 | $ | 282,959 | ||||||||||||||
| Chief Financial Officer | 2008 | $ | 250,000 | $ | 100,000 | 9,500 | $ | 22,841 | $ | 382,341 | ||||||||||||||
| John Spielberger(6) | 2009 | $ | 250,000 | — | — | $ | 23,461 | $ | 273,461 | |||||||||||||||
| President-North American Operations | 2008 | $ | 105,769 | $ | 60,000 | — | $ | 9,437 | $ | 175,206 | ||||||||||||||
Name and Principal Position | Fiscal Year | Salary($) | Bonus($)(1) | All Other Compensation ($) | Total ($) | |||||||||||||||
Duncan Hon (2) | 2012 | $ | 433,333 | $ | 200,000 | $ | 11,206 | (3) | $ | 644,539 | ||||||||||
Chief Executive Officer | 2011 | $ | 375,000 | — | $ | 65,031 | (3) | $ | 440,031 | |||||||||||
Andrew L. Davis (4) | 2012 | $ | 275,000 | — | $ | 19,746 | (5) | $ | 294,746 | |||||||||||
Chief Financial Officer | 2011 | $ | 258,333 | — | $ | 12,751 | (5) | $ | 271,084 | |||||||||||
Adrian Ma | 2012 | $ | 295,940 | — | $ | 295,940 | ||||||||||||||
Former Chief Executive Officer | 2011 | $ | 350,000 | — | — | $ | 350,000 | |||||||||||||
Greenfield Pitts (6) | 2012 | — | — | $ | 52,083 | (7) | $ | 52,083 | ||||||||||||
Former Chief Financial Officer | 2011 | $ | 108,974 | — | $ | 86,382 | (5)(8) | $ | 195,356 | |||||||||||
| (1) | ||
| Represents bonus paid for such fiscal year. |
| (2) | Mr. Hon was appointed as the Company’s Chief Executive Officer on August 31, 2011. |
| (3) | Represents $10,000 and $58,704 paid by the Company on behalf of Mr. Hon to settle Mr. Hon’s U.S. federal and state income tax liabilities related to U.S. sourced income earned by him from all sources in Fiscal 2012 and Fiscal 2011, respectively, and $1,206 and $6,327 paid by the Company for medical insurance for Mr. Hon during Fiscal 2012 and Fiscal 2011, respectively. |
| (4) | Mr. Davis was appointed as the Company’s Executive Vice President and Chief Financial Officer effective September 3, 2010. |
| (5) | Represents the incremental cost to the Company of all personnel benefits, including |
| (6) | Mr. Pitts | |
| of Emerson Radio Corp. effective September 3, 2010. Mr. |
| (7) | Represents consulting fees paid to Mr. Pitts by the Company during Fiscal 2012 under the terms of the consulting agreement referred to in footnote (6) above. |
| (8) | Includes consulting fees of $71,875 paid to Mr. Pitts by the Company during Fiscal 2011 under the terms of the consulting agreement referred to in footnote (6) above. |
Employment Agreements.
During Fiscal 2009,2012, the Company had employment agreements with certain of its Named Executive Officers, each of which is described below.
Duncan Hon.Duncan Hon, our Chief Executive Officer, entered into an employment agreement with Emerson effective as of October 1, 2009, which set forth the terms and conditions pursuant to which Mr. Hon would serve as the Company’s Deputy Chief Executive Officer. The agreement provided for an annual base salary of $300,000 and a discretionary bonus at the end of the Company’s fiscal year as recommended by the Board. The term expired on September 30, 2010. On September 8, 2010, the Company’s Board approved an increase in Mr. Hon’s annual base salary to $375,000. Such salary increase was made effective retroactive to April 1, 2010. On March 24, 2011, Mr. Hon and Emerson agreed that the employment agreement would be terminated and be of no further force and effect effective at the close of business on March 31, 2011. Effective April 1, 2011, Mr. Hon entered into an employment agreement with a wholly-owned, indirect subsidiary of the Company. Such agreement sets forth the terms and conditions pursuant to which Mr. Hon would serve as the Company’s Deputy Chief Executive Officer and, subsequently, as Chief Executive Officer. The agreement provides for an annual base salary of 2,925,000 Hong Kong Dollars (“HKD”) and an annual discretionary bonus payable at any time as recommended by the Board. The contract extends until the earlier of the retirement of Mr. Hon on the first day of the following month immediately after his 60th birthday, or the termination of the agreement by either the Company or Mr. Hon upon the delivery from one to the other of one month prior written notice. In November 2011, the Board approved an increase to Mr. Hon’s base annual salary to $475,000 effective August 31, 2011 based on the recommendation of the Board’s CGNC Committee.
Andrew L. Davis. Andrew L. Davis, our Executive Vice President and Chief Financial Officer, entered into an employment agreement with the Company on August 1, 2007, which provided that Mr. Davis shall serve as the Company’s Vice President Finance and Corporate Controller. The agreement provides for an annual base salary of $225,000 and a discretionary bonus at the end of the Company’s fiscal year as recommended by the Board. The
initial term expired on July 31, 2008. During the term extensions, the Company has the right to terminate the agreement upon 90 days prior written notice and Mr. Davis has the right to terminate the agreement upon 90 days prior written notice. In connection with his appointment as Executive Vice President and Chief Financial Officer, the Company entered into an amendment to the existing employment agreement with Mr. Davis dated September 3, 2010 pursuant to which Mr. Davis’s base salary was increased to $275,000 effective as of September 3, 2010.
Adrian Ma. Adrian Ma, our former Chief Executive Officer, resigned from these positions, and as a director, of Emerson, effective August 8, 2011. Mr. Ma entered into a consulting agreement with the Company for a period of one year, beginning August 1, 2011 and expiring July 31, 2012, for a fee of approximately $221,000. In June 2012, Mr. Ma entered into new consulting agreement with the Company for a period of one year, beginning August 1, 2012 and expiring July 31, 2013, for a fee of approximately $124,000.
Greenfield Pitts.Greenfield Pitts, our former Chief Financial Officer, entered into an employment agreement with the Company on April 3, 2007, which setsset forth the terms and conditions pursuant to which Mr. Pitts shallwould serve as the Company’s Chief Financial Officer. The agreement providesprovided for an annual base salary of $250,000 and a discretionary bonus at the end of the Company’s fiscal year as recommended by the Board of
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Outstanding Equity Awards at Fiscal Year End
None of the Company’s Named Executive Officers held any outstanding equity awards held by each of our Named Executive Officers at March 31, 2009.
| Option Awards | ||||||||||||||||
| Number of Securities | Number of Securities | |||||||||||||||
| Underlying | Underlying | |||||||||||||||
| Unexercised Options | Unexercised Options | Option Exercise | Option Expiration | |||||||||||||
Name | (#) Exercisable | (#) Unexercisable | Price ($) | Date | ||||||||||||
| Adrian Ma | 0 | 0 | — | — | ||||||||||||
| Greenfield Pitts | 16,667 | 8,333 | $ | 3.19 | 11/21/2016 | |||||||||||
| John Spielberger | 0 | 0 | — | — | ||||||||||||
Compensation of Directors
During Fiscal 2009,2012, our directors who were not employees (“Outside Directors”), specifically Messrs. Binney, Driscoll, Ho, Hon,Fok, Mahathir, Peterson, Sethi, Snellings Will and WirschingWill were paid $33,750, $17,500, $120,625, $5,875, $52,958, $13,125, $60,514, $36,667, $52,597$85,000, $29,167, $74,167, $74,167, $80,000 and $18,333,$74,167, respectively, for serving on the Board of Directors and on our various committees during the period. The Company does not compensate directors who are employees of the Company for their services as directors.
Outside Directors are each paid an annual director’s fee of $45,000. Beginning October 15, 2008,$50,000. The Outside Director serving as the Chairman of the Board receives an additional annual fee of Directors resolved that each$20,000. Each Outside Director serving on a committee of the Board of Directors would receivereceives an additional fee of $15,000 per annum with no additional fee paid an Outside Directorfor serving as chairman of a committee. The Company does not pay any additional fees for attendance at meetings of the Board of Directors or the committees, but the Company’s directors are reimbursed their expenses for attendance at meetings.committees. All directors’ fees are paid in four equal quarterly installments per annum and are pro-rated in situations where an Outside Director serves less than a full one year term.
Additionally, each Outside Director effective April 1, 2008 and that Mr. Ho would receive a retroactive director fee as an Outside Director dating from the time he joined the Board of Directors of the Company on July 26, 2006. As a result of this resolution, Mr. Ho was paid an aggregate amount of director’s fees in fiscal 2009 of $120,625.
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Directors Compensation
| Fees Earned or Paid | All Other | |||||||||||||||
Name | in Cash ($) | Option Awards ($)(1) | Compensation ($) | Total ($) | ||||||||||||
| Michael A.B. Binney(2) | $ | 33,750 | $ | 0 | $ | 0 | $ | 33,750 | ||||||||
| W. Michael Driscoll(3) | $ | 17,500 | $ | 0 | $ | 0 | $ | 17,500 | ||||||||
| Christopher Ho(4) | $ | 120,625 | $ | 0 | $ | 0 | $ | 120,625 | ||||||||
| Duncan Hon(5) | $ | 5,875 | $ | 0 | $ | 0 | $ | 5,875 | ||||||||
| Mirzan Mahathir | $ | 52,958 | $ | 0 | $ | 0 | $ | 52,958 | ||||||||
| David R. Peterson(6) | $ | 13,125 | $ | 0 | $ | 0 | $ | 13,125 | ||||||||
| Kareem E. Sethi | $ | 60,514 | $ | 0 | $ | 0 | $ | 60,514 | ||||||||
| Terence A. Snellings(7) | $ | 36,667 | $ | 0 | $ | 0 | $ | 36,667 | ||||||||
| Eduard Will | $ | 52,597 | $ | 19,772 | $ | 0 | $ | 72,369 | ||||||||
| Norbert Wirsching(8) | $ | 18,333 | $ | 0 | $ | 0 | $ | 18,333 | ||||||||
Name | Fees Earned or Paid in Cash ($) | All Other Compensation ($) | Total ($) | |||||||||
Christopher Ho | $ | 85,000 | $ | 0 | $ | 85,000 | ||||||
Vincent Fok | $ | 29,167 | $ | 0 | $ | 29,167 | ||||||
Mirzan Mahathir | $ | 74,167 | $ | 0 | $ | 74,167 | ||||||
Kareem E. Sethi | $ | 74,167 | $ | 0 | $ | 74,167 | ||||||
Terence A. Snellings | $ | 80,000 | $ | 0 | $ | 80,000 | ||||||
Eduard Will | $ | 74,167 | $ | 62,166 | (1)(2) | $ | 136,333 | |||||
| (1) | ||
| and Mr. | ||
During Fiscal 2012, the Company recovered $15,960 from Mr. Will in accordance with terms of the above arrangement.
| (2) | During Fiscal 2012, the Company paid $62,166 to Mr. Will for work performed by him for strategic and management consulting with respect to a lawsuit facing the Company and certain of | |
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The following table gives information about the Company’s common stock that may be issued upon the exercise of options and rights under ourits 1994 Stock Compensation Program, 1994 Non-Employee Director Stock Option Plan, Emerson Radio Corp. 2004 Employee Stock Incentive Plan and 2004 Non-Employee Outside Director Stock Option Plan, and exercise of warrants, as of March 31, 20092012 (the “Plans”). The 1994 Plans expired in July 2004 and the remaining Plans are the only equity compensation plans in existence as of March 31, 2009.
| Number of Securities | ||||||||||||
| Number of Securities to | Weighted Average | Remaining Available | ||||||||||
| be Issued Upon Exercise | Exercise Price of | for Future Issuance | ||||||||||
| of Outstanding Options, | Outstanding Options, | Under Equity | ||||||||||
| Warrants and Rights | Warrants and Rights | Compensation Plans | ||||||||||
| (a) | (b) | (c) | ||||||||||
| Equity compensation plans approved by security holders | 134,000 | $ | 2.99 | 2,878,334 | ||||||||
| Equity compensation plans not approved by security holders | 100,000 | 4.00 | — | |||||||||
Total | 234,000 | $ | 3.42 | 2,878,334 | ||||||||
| Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans | ||||||||||
Equity compensation plans approved by security holders | 50,000 | $ | 3.13 | 2,950,000 | ||||||||
Certain Relationships and Related TransactionsCERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
From time to time, the CompanyEmerson engages in business transactions with its controlling shareholder, Grande, Holdings. Asand one or more of October 8, 2009, Grande Holdings beneficially owned approximately 57.6% of the Company’s outstanding common stock. Mr. Ho, the Chairman of the Board of Directors of the Company, also serves as Chairman of Grande Holdings.Grande’s direct and indirect subsidiaries. Set forth below is a summary of such transactions.
MajorityControlling Shareholder
Grande Holding’s Ownership Interesthas, together with S&T, Grande N.A.K.S. Ltd. and Christopher Ho (Chairman of Grande’s and Emerson’s Boards of Directors) (together with Grande, the “Reporting Persons”) filed, on July 5, 2012, a Schedule 13D/A with the Securities and Exchange Commission (“SEC”) stating that, as of the filing date, the Reporting Persons (except Christopher Ho) had the shared power to vote and direct the disposition of 15,243,283 shares, or approximately 56.2%, of the outstanding common stock of Emerson, subject only to the rights granted to Deutsche Bank AG (“Deutsche Bank”) pursuant to a security agreement entered into between S&T and Deutsche Bank on January 20, 2010 in Emerson. At October 8, 2009,which S&T granted a security interest in an aggregate of 3,780,600 shares in Emerson common stock (the “Pledged Shares”) owned by S&T but pledged to Deutsche Bank for the purposes of securing obligations owing from Grande to Deutsche Bank.
The aforementioned Schedule 13D/A also states that, as of the filing date, the Reporting Persons are aware only of the sale of 391,199 of the Pledged Shares by Deutsche Bank and that they have not yet been able to verify whether, or to what extent, Deutsche Bank has taken any other actions in respect of the Pledged Shares. The Reporting Persons also are of the view that the Secured Obligations have already been settled and, therefore, S&T reportedly is seeking clarification of the basis on which Deutsche Bank has claimed beneficial ownership of the remaining 3,380,079 shares out of the remaining 3,389,401 Pledged Shares. On February 11, 2011, Deutsche Bank filed a Schedule 13G with the SEC stating that it had sole voting and sole dispositive power over the Pledged Shares, which represent approximately 57.6%12.5% of the Company’s outstanding common stock was ownedstock. On January 9, 2012, Deutsche Bank filed with the SEC a Form 4 Statement of Changes in Beneficial Ownership stating that, after sales by direct or indirect subsidiariesit of certain of the Grande Holdings.
On May 31, 2011, upon application of a major creditor, the High Court of Hong Kong appointed Fok Hei Yu (who is also known by the anglicized name Vincent Fok), a current director, and Roderick John Sutton, both of FTI, as Joint and Several Provisional Liquidators over Grande. Accordingly, as of May 31, 2011, the directors of Grande no longer have the ability to exercise control over Grande or the power to direct the voting and disposition of the 15,243,283 shares described in footnote (2) to “Security Ownership of Certain Beneficial Owners and Management”. Instead, Mr. Fok, as a Provisional Liquidator over Grande, has such power.
Related Party Transactions
Rented Space in Hong Kong
Effective January 1, 2010, Emerson entered into a lease agreement with Lafe Properties (Hong Kong) Limited (“Lafe”), a related party of Grande at that time, pursuant to which Emerson rented 36,540 square feet from Lafe for the purpose of housing its Hong Kong based office personnel and for its use to refurbish certain returned products. This lease agreement expired on December 31, 2010 and was renewed for a one year period on substantially the same terms during December 2010, and expired on December 31, 2011. On December 31, 2010, Lafe was sold by its immediate holding company to an independent third party, and, as such, the Company no longer considers Lafe to be a related party to the Company beginning December 31, 2010. For the nine months ended December 31, 2010, Emerson’s rent expense associated with this arrangement,lease was approximately $387,000.
Related service charges associated with this lease agreement that the Company continues to procure from Brighton Marketing Limited, a subsidiary of Grande, The Grande Properties Management Limited, a related party of Grande, and The Grande Group (HK) Ltd., a related party of Grande, totaled approximately $81,000 for the twelve months ended March 31, 2012 as compared to approximately $161,000 for the twelve months ended March 31, 2011, which also included charges associated with the lease agreement that were provided during the twelve months ended March 31, 2011 by Devon Technical Services Ltd., a subsidiary of Grande. Emerson recorded sales to Sansui Sales and Akai Sales, collectively, of $0 and $242,000 in fiscal 2009 and 2008, respectively. Sansui Sales and Akai Sales collectively owed Emerson $1,500 and $5,000 relatingThe Grande Group (HK) Ltd. approximately $1,000 pertaining to these activities,charges at March 31, 2009 and March 31, 2008, respectively. Akai Sales deducted $9,600 for storage2012. Emerson owed Brighton Marketing Limited approximately $2,000 pertaining to these charges from its June 30, 2008 settlement payment to Emerson for this activity, which was deemed to be in error by Emerson, which resulted in an outstanding balance owed to Emerson of $9,600 at March 31, 2009. At
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These charges totaled approximately $12,000 for the three month period ended June 30, 2012 and approximately $39,000 for the three month period ended June 30, 2011. Emerson owed Brighton Marketing Limited nil at June 30, 2012 and approximately $1,100 at June 30, 2011 pertaining to these charges.
In December 2008, Emerson signed a lease agreement with Akai Electric (China) Co., Ltd. (“Akai China”), a subsidiary of Grande prior to its disposal on December 24, 2010, concerning the rental of office space, office equipment, and lab equipment for Emerson’s quality assurance personnel in Zhong Shan,Zhongshan, People’s Republic of China. The initial lease term began in July 2007 and ended by its terms in June 2009, andat which time the agreement renewsrenewed automatically at the end of the termon a month-by-month basis unless canceled by either party. Rent chargesThe agreement was cancelled in May 2011.
On December 24, 2010, Grande announced that it sold Capetronic Group Ltd. (“Capetronic”) to a purchaser who, along with Akai Electric (China) Ltd. totaled $264,000 for fiscal 2009. Emerson owedits beneficial owner, are third parties independent of Grande $9,500 relatedand its connected persons, as defined in the Listing Rules, and to the agreementbest of Grande’s and its directors’ knowledge, information and belief, having made all reasonable inquiries (the “Sale”). As Akai China was a subsidiary of Capetronic at March 31, 2009. A security depositthe time of $31,600 on the leased propertySale, and was disposed of along with Capetronic by Grande, the Company is held byno longer considering Akai Electric (China) Ltd. as of March 31, 2009.
For the nine months ended December 31, 2007. The2010, Emerson’s rent expense associated with this lease agreement was not renewed aftertotaled approximately $85,000.
Consulting Services Provided to Emerson by one of its termination in October 2007.
During the twelve months ended March 31, 2012 and March 31, 2011, Emerson paid consulting fees of approximately $62,000 and $114,000, respectively, to Mr. Eduard Will, a $10,000 commissiondirector of Emerson, for work performed
by Mr. Will related to Vigers Hong Kong Ltd, a property agentstrategy for the Kayne Litigation as more fully described in the section entitled “Legal Proceedings” below, merger and a subsidiary of Grande,acquisition research, as well as work related to the salestrategy for a shareholder derivative lawsuit that the Company settled in January 2011. In addition, during the twelve months ended March 31, 2012 and March 31, 2011, Emerson paid expense reimbursements and advances, in the aggregate, of approximately $19,000 and $23,000, respectively, to Mr. Will, related to this consulting work and his service as a building owneddirector of Emerson. At March 31, 2012 and March 31, 2011, the Company owed Mr. Will approximately $10,000 and nil related to these activities.
During the three months ended June 30, 2012 and June 30, 2011, Emerson paid consulting fees of approximately $21,000 and $3,000, respectively, to Mr. Will, for work performed by Mr. Will related to strategy for the Kayne Litigation as more fully described in the section entitled “Legal Proceedings” below, merger and acquisition research, as well as work related to the strategy for a shareholder derivative lawsuit that the Company settled in January 2011. In addition, during the three months ended June 30, 2012 and June 30, 2011, Emerson paid expense reimbursements and advances, in the aggregate, of nil and approximately $18,000, respectively, to Mr. Will, related to this consulting work and his service as a director of Emerson. At June 30, 2012, the Company owed Mr. Will nil and at June 30, 2011, Mr. Will owed the Company approximately $15,500 related to these activities.
Dividend-Related Issues with S&T
On March 2, 2010, the Board of Directors declared an unaffiliated buyer. Also, Emersonextraordinary dividend of $1.10 per common share, which was paid on March 24, 2010. In connection with the Company’s determination as to the taxability of the dividend, the Board relied upon information and research provided to it by the Company’s tax advisors and, in reliance on the “stock-for-debt” exception in the Internal Revenue Code Sections 108(e)(8) and (e)(10), concluded that 4.9% of such dividend paid was taxable to the recipients. The Company has received a deposit of approximately $300,000Form 886-A from the buyer on this date.Internal Revenue Service (the “IRS”) which challenges the Company’s conclusions and determines that the Company does not qualify for the above-referenced exception. Accordingly, the IRS has concluded that 100% of the dividend paid was taxable to the recipients. The sale was concluded on September 27, 2007, on which date EmersonCompany intends to defend its position and calculations and will contest the position asserted by the IRS. In the event that the Company is not successful in establishing with the IRS that the Company’s calculations were correct, then the shareholders who received the balancedividend likely will be subject to and liable for an assessment of additional taxes due. Moreover, the purchase price of approximately $1,700,000 andCompany may be contingently liable for taxes due by its shareholders resulting from the dividend paid an additional $10,000 commissionby the Company.
Initially, the Company withheld from the dividend funds allocated to Vigers.
Per the terms of the Agreement, Emerson invoiced S&T in June 2010 approximately $42,000 for reimbursement of legal fees incurred by Emerson with regard to the Agreement and approximately $33,000 as a transaction fee for having entered into the Agreement. In January 2011, Emerson agreed, upon the request of S&T, to pay $1,682,220waive approximately $5,000 of the legal charges that had been invoiced to S&T in exchange for Goldmen’s manufacture and deliveryJune 2010. S&T paid the full amount owed to Emerson of musical instrumentsapproximately $70,000 in order for itFebruary 2011.
In March 2011, upon the request of S&T to meet its delivery requirements of these instruments in the first week of September 2007.
Other
During the twelve months ended March 31, 2012 and March 31, 2011, Emerson invoiced Vigers Appraisal & Consulting Ltd. (“Vigers”), a related party of Grande, approximately $4,000 and $5,000, respectively, for bankruptcyoffice rental and was unableusage of telephone and data lines maintained by Emerson. Vigers owed Emerson approximately $1,000 and nil, respectively, at March 31, 2012 and March 31, 2011, related to manufacturethis activity.
During each of the ordered musical instruments. Promptly thereafter, Capetronic Displays Limitedthree months ended June 30, 2012 and June 30, 2011, Emerson invoiced Vigers approximately $1,000 for usage of telephone and data lines maintained by Emerson. Vigers owed Emerson approximately $1,000 at both June 30, 2012 and June 30, 2011 related to this activity.
During the twelve months ended March 31, 2011, Akai Sales Pte Ltd. (“Capetronic”Akai Sales”), a subsidiary of Grande, agreed to manufacture the musical instruments at the same price and on substantially the same terms and conditions. Accordingly, on July 12, 2007,invoiced Emerson paid Tomei Shoji Limited, an affiliate of Grande, $125,000 to acquire from Goldmen and deliver to Capetronic the molds and equipment necessary for Capetronic to manufacture the musical instruments. In July 2007, Emerson made two upfront payments to Capetronic totaling $546,000. On July 20, 2007, Capetronic advised Emerson that it was unable to manufacture the musical instruments because it did not have the requisite governmental licenses to do so.
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Review and Approval of Transactions with Related Parties
It is the policy of the Company that allany proposed transactions between the Company and related parties, as defined by applicable accounting standards, which are (1) less than $500,000 but greater than $100,000the Financial Accounting Standard Board’s Accounting Standards Codification Topic 850 (ASC 850) (“RPT Transactions”), must be pre-approved by the Company’s Chief Executive Officer, Chief Financial Officer and President-North American Operations and (2) greaterCGNC Committee. Any proposed related-party transaction which is less than $500,000or equal to USD $100,000 in value must be pre-approved by the Company’s Chief Executive Officer, Chief Financial Officer, President-North American Operations and Audit CommitteeCGNC Committee. Any proposed related-party transaction which is greater than USD $100,000 in value must be pre-approved by a majority of the Board of Directors.
Legal Proceedings
In re: Kayne Litigation.On July 7, 2011, the Company was served with an amended complaint (the “Complaint”) filed in the United States District Court for the Central District of California alleging, among other things, that the named defendants violated their fiduciary dutiesCompany, certain of its present and former directors and other entities or individuals now or previously associated with Grande, intentionally interfered with the ability of the plaintiffs to collect on a judgment (now approximately $47 million) they had against Grande by engaging in transactions (such as the dividend paid to all shareholders in March 2010) which transferred assets out of the United States. The Complaint also asserts claims under the civil RICO statute and for alter ego liability. In the Company’s opinion, the claims appear to be devoid of merit. Accordingly, on September 27, 2011, Emerson moved to dismiss the action for failure to state a claim (the “Motion”). On or about February 27, 2012, the Court dismissed the intentional interference claim and portions of the Civil RICO claim with leave to re-plead, but denied the Motion to dismiss the alter ego claim. On March 19, 2012, the plaintiffs filed a Second Amended Complaint setting forth the same claims as the Complaint. On April 20, 2012, the Company moved to dismiss the re-pleaded intentional interference and RICO claims, and oral arguments on this motion were held on June 18, 2012. On September 6, 2012, the Court dismissed the RICO claim, but granted the plaintiffs leave to re-plead. On September 17, 2012, the plaintiffs filed a Third Amended Complaint setting forth the same claims as the Complaint. The Company’s response to the Company in connection with a number of related party transactions with affiliates of Grande Holdings,Third Amended Complaint was due and filed on October 4, 2012. In the Company’s controlling shareholder. In January 2009,interim, the individual defendants filedparties have exchanged document discovery requests and responses. Plaintiffs and certain co-defendants have produced documents. This action has been scheduled for an answer denyingApril 23, 2013 trial date. Emerson is defending the material allegations of the complaint and the litigation currently is in the discovery stage. The recovery, if any, in this action will inure to the Company’s benefit.
18vigorously.
MSPC AS INDEPENDENT AUDITORS OF EMERSON
FOR THE FISCAL YEAR ENDING 20102013
The Audit Committee has appointed MSPC as ourthe Company’s independent registered accountants to audit ourthe Company’s financial statements for the fiscal year ending March 31, 2010,2013, and has further directed that management submit the selection of independent registered accountants for ratification by ourthe Company’s stockholders at the annual meeting. Stockholder ratification of the selection of MSPC is not required by our by-laws or otherwise. However, we arethe Company is submitting the selection of MSPC to the stockholders for ratification as a matter of good corporate practice. If the stockholders fail to ratify the selection, the Audit Committee will reconsider whether or not to retain MSPC. Even if the selection is ratified, the Audit Committee in its discretion may direct the appointment of a different independent accounting firm at any time during the year if it is determined that such a change would be in the best interests of Emerson and its stockholders.
Representatives of the firm of MSPC are expected to be present at ourthe Company’s annual meeting and will have an opportunity to make a statement, if they so desire, and will be available to respond to appropriate questions.
In accordance with the requirements of the Sarbanes-Oxley Act of 2002 and the Audit Committee’s charter, all audit and audit-related work and all non-audit work performed by the Company’s independent accountants, MSPC, is approved in advance by the Audit Committee, including the proposed fees for such work. The Audit Committee is informed of each service actually rendered.
| • | Audit Fees.Audit fees billed to the Company by MSPC for the audit of the financial statements included in the Company’s Annual Reports on Form 10-K, and reviews by MSPC of the financial statements included in the Company’s Quarterly Reports on Form 10-Q, for the fiscal years ended March 31, 2012 and 2011 totaled approximately $255,300 for each of such fiscal years. |
| • | Audit-Related Fees. The Company was billed approximately $118,000 by MSPC for each of the fiscal years ended March 31, 2012 and 2011 for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements and are not reported under the captionAudit Fees |
| • | Tax Fees.MSPC billed the Company an aggregate of $66,600 for each of the fiscal years ended March 31, 2012 and 2011 for tax services, principally related to the preparation of income tax returns and related consultation. |
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Applicable law and regulations provide an exemption that permits certain services to be provided by the Company’s outside auditors even if they are not pre-approved. The Company has not relied on this exemption at any time since the Sarbanes-Oxley Act was enacted.
Vote Required
The affirmative vote of a majority of the votes cast at the meeting at which a quorum representing a majority of all outstanding shares of the Company’s common stock is present and voting, either in person or by proxy, is required for the ratification of the Company’s independent registered accountants.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE APPOINTMENT OF
MSPC AS INDEPENDENT AUDITORS OF EMERSON FOR THE FISCAL YEAR ENDING MARCH 31, 2013.
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company’s directors, officers, and stockholders who beneficially own more than 10% of any class of its equity securities registered pursuant to Section 12 of the Exchange Act, to file initial reports of ownership and reports of changes in ownership with respect to the Company’s equity securities with the SEC and the NYSE MKT. All reporting persons are required to furnish the Company with copies of all reports that such reporting persons file with the SEC pursuant to Section 16(a) of the Exchange Act.
Based solely upon a review of Forms 3 and 4 and amendments to these forms furnished to the Company, and Forms 5, along with amendments thereto, all parties subject to the reporting requirements of Section 16(a) timely filed all such required reports during and with respect to Fiscal 2012.
STOCKHOLDER COMMUNICATIONS AND PROPOSALS
The Company’s Board of Directors has established a procedure that enables stockholders to communicate in writing with members of the Company’s Board of Directors. Any such communication should be addressed to the Company’s Secretary and should be sent to such individual c/o Emerson Radio Corp., 3 University Plaza, Suite 405, Hackensack, New Jersey 07061. Any such communication must state, in a conspicuous manner, that it is intended for distribution to the entire Board of Directors. Under the procedures established by the Board of Directors, upon the Secretary’s receipt of such a communication, the Company’s Secretary will send a copy of such communication to each member of the Board of Directors, identifying it as a communication received from a stockholder. Absent unusual circumstances, at the next regularly scheduled meeting of the Board of Directors held more than two days after such communication has been distributed, the Board of Directors will consider the substance of any such communication.
Stockholder proposals to be presented at the Company’s Annual Meeting of Stockholders to be held in 2012, for inclusion in the Company’s proxy statement and form of proxy relating to that meeting, must be received by the Company at its offices located at 3 University Plaza, Suite 405, Hackensack, New Jersey 07601, addressed to the Secretary, on or before June 20, 2013. If, however, the date of the Company’s 2013 Annual Meeting of Stockholders is changed by more than thirty (30) days from the date of its 2012 annual meeting, the deadline is a reasonable time before the Company begins to print and mail its proxy materials for the 2013 Annual Meeting of Stockholders. Such stockholder proposals must comply with the Company’s bylaws and the requirements of Regulation 14A of the Exchange Act. See “Election of Directors” for information on stockholder submissions of nominations for election to the Board of Directors.
Rule 14a-4 of the Exchange Act governs the Company’s use of discretionary proxy voting authority with respect to a stockholder proposal that is not addressed in the proxy statement. With respect to the Company’s 2013 Annual Meeting of Stockholders, if the Company is not provided notice of a stockholder proposal prior to September 3, 2013, the Company will be permitted to use its discretionary voting authority when the proposal is raised at the meeting, without any discussion of the matter in the proxy statement.
PERSONS MAKING THE SOLICITATION
The enclosed proxy is solicited on behalf of the Company’s Board of Directors. The Company will pay the cost of soliciting proxies in the accompanying form. The Company’s officers may solicit proxies by mail, telephone, telegraph or fax. Upon request, the Company will reimburse brokers, dealers, banks and trustees, or their nominees, for reasonable expenses incurred by them in forwarding proxy material to beneficial owners of the Company’s 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 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 Emerson.
A copy of the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2012, including financial statements, accompanies this proxy statement. The Annual Report is not to be regarded as proxy soliciting material or as a communication by means of which any solicitation is to be made. The Company filed an amendment to its Annual Report on Form 10-K in July 2012 in order to include certain information regarding our management, compensation and other matters. All of the information included in such amendment has been updated and is included in this proxy statement. A copy of the Company’s Annual Report on Form 10-K and Form 10-K/A for the fiscal year ended March 31, 2012, filed with the SEC, is available (excluding exhibits) without cost to stockholders upon written request made to Investor Relations, Emerson Radio Corp., 3 University Plaza, Suite 405, Hackensack, New Jersey 07601 or on-line at the Company’s web site: www.emersonradio.com.
| By Order of the |
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| ANDREW L. DAVIS |
| Secretary |
October 18, 2012
ANNUAL MEETING OF STOCKHOLDERS OF
EMERSON RADIO CORP.
November 7, 2012
NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL:
The Notice of Meeting, Proxy Statement, Proxy Card
are available at http://www.amstock.com/proxyservices/viewmaterial.asp?CoNumber=02008
Please sign, date and mail
your proxy card in the
envelope provided as soon
as possible.
i Please detach along perforated line and mail in the envelope provided. i
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE | ||||||||||||||||
| FOR | AGAINST | ABSTAIN | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1. To elect seven directors: | 2. To ratify the appointment of MSPC
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¨ ¨ ¨ | FOR ALL NOMINEES WITHHOLD AUTHORITY FOR ALL NOMINEES FOR ALL EXCEPT (See instructions below) | NOMINEES: O Christopher Ho O Eduard Will O Duncan Hon O Vincent Fok O Mirzan Mahathir O Kareem E. Sethi O Terence A. Snellings | THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. IT MAY BE REVOKED PRIOR TO ITS EXERCISE. RECEIPT OF NOTICE OF THE ANNUAL MEETING AND PROXY STATEMENT IS HEREBY ACKNOWLEDGED, AND THE TERMS OF THE NOTICE AND PROXY STATEMENT ARE HEREBY INCORPORATED BY REFERENCE INTO THIS PROXY. THE UNDERSIGNED HEREBY REVOKES ALL PROXIES HERETOFORE GIVEN FOR SAID MEETING OR ANY AND ALL ADJOURNMENTS, POSTPONEMENTS AND CONTINUATIONS THEREOF. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PLEASE VOTE, SIGN, DATE AND PROMPTLY RETURN THIS PROXY IN THE ENCLOSED RETURN ENVELOPE WHICH IS POSTAGE PREPAID IF MAILED IN THE UNITED STATES. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INSTRUCTIONS: To withhold authority to vote for any individual nominee(s), mark“FOR ALL EXCEPT”and fill in the circle next to each nominee you wish to withhold, as shown here: — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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