SUMMARY COMPENSATION TABLE. The following table presents certain summary
information concerning compensation paid or accrued by the Company for services
rendered in all capacities during the fiscal years ended June 30, 2003, 2002,
and 2001 for (i) the Chief Executive Officer ("CEO") of the Company, and (ii)
each of the other four executive officers of the Company (determined as of the
end of the last fiscal year) whose total annual salary and bonus exceeded
$100,000 (collectively, including the CEO, the "Named Executive Officers").
(1) The above table omits information concerning Long Term Incentive Plans
("LTIPs") (plans, other than restricted stock, stock option, or SAR
plans, which provide for the payment of incentive compensation for
performance expected to occur over more than one fiscal year), because
the Company has no LTIPs.
(2) This column consists of the value realized upon the exercise of stock
options for the fiscal years indicated. For more information, see
"Aggregate Stock Option Exercises During the Fiscal Year." In all
cases, the value of perquisites and other benefits in any fiscal year
did not exceed the lesser of $50,000 or 10% of the total salary and
bonus reported and, under applicable SEC compensation disclosure rules,
are not required to be included in this column.
(3) This column consists of Incentive Stock Options granted to executive
officers for the fiscal years indicated. For additional information,
see "Stock Options Granted During Fiscal Year" and "Other Compensation
Arrangements - Stock Option Plans."
(4) "All Other Compensation" consists of the following: (i) Company
matching contributions under the Company's 401(k) Plan for the accounts
of John C. Koss ($7,500 in 2003, $7,866 in 2002, and $7,500 in 2001),
Michael J. Koss ($15,750 in 2003, $11,000 in 2002, and $10,500 in
2001), John Koss, Jr. ($11,192.68 in 2003, $11,103 in 2002, and $9,880
in 2001), Ms. Sachdeva ($12,712 in 2003, $10,259 in 2002, and $11,224
in 2001), and Ms. Lillie ($17,415.91 in 2003, $10,606 in 2002, and
$10,752 in 2001); (ii) Company contributions to the KESOT for the
accounts of John C. Koss ($4,849 in 2003, $5,868 in 2002, and $5,917 in
2001), Michael J. Koss ($6,680 in 2003, $5,868 in 2002, and $5,917 in
2001), John Koss, Jr. ($2,208 in 2003, $5,868 in 2002, and $5,917 in
2001), Ms. Sachdeva ($1,686 in 2003, $4,062 in 2002, and $3,914 in
2001), and Ms. Lillie ($1,621 in 2003, $3,937 in 2002, and $3,749 in
2001); (iii) premiums paid by the Company for life insurance for John
C. Koss ($5,031 in 2003, $5,805 in 2002, and $3,645 in 2001), Michael
J. Koss ($2,283 in 2003, $2,354 in 2002, and $1,425 in 2001), John
7
Koss, Jr. ($1,459 in 2003, $1,402 in 2002, and $87 in 2001), Ms.
Sachdeva ($414 in 2003, $245 in 2002, and $34 in 2001), and Ms. Lillie
($1,737 in 2003, 375 in 2002, and $150 in 2001).
STOCK OPTIONS GRANTED DURING FISCAL YEAR. The following table provides
certain information concerning stock options granted to Named Executive Officers
during the fiscal year ended June 30, 2003.
INDIVIDUAL GRANTS
-----------------------------
PERCENT OF
SECURITIES TOTAL
UNDERLYING OPTIONS/SARS POTENTIAL REALIZABLE VALUE AT ASSUMED
OPTIONS/ GRANTED TO ANNUAL RATES OF STOCK PRICE APPRECIATION
SARS EMPLOYEES IN EXERCISE OR FOR OPTION TERM (1)
GRANTED FISCAL YEAR BASE PRICE EXPIRATION -------------------------------------------
NAME (#) (2) ($ PER SHARE) DATE 0% (3) 5% 10%
---------------- ---------- ------------ ------------- ---------- ------------- ------------ -----------
John C. Koss n/a n/a n/a n/a n/a n/a n/a
Michael J. Koss 60,000 33.33% $17.32 April 30, 2008 $(94,200.00) $ 166,894.05 $482,731.95
John Koss, Jr. 40,000 22.2% $17.32 April 30, 2008 $(62,800.00) $ 111,262.70 $321,821.30
Sujata Sachdeva 20,000 11.1% $15.75 April 30, 2013 -- $ 198,101.61 $502,028.73
Lenore E. Lillie 10,000 5.6% $15.75 April 30, 2013 -- $ 99,050.81 $251,014.37
(1) These assumed values result from using certain rates of stock price
appreciation prescribed under Securities and Exchange Commission rules
and are not intended to forecast possible future appreciation in the
Company's common stock. The actual value of these option grants is
dependent on future performance of the common stock and overall stock
market conditions. There is no assurance that the values reflected in
this table will be achieved.
(2) The percentages set forth in this table are based on 180,000 total
stock option shares granted for the fiscal year ended June 30, 2003.
(3) The exercise price for Michael J. Koss and John Koss, Jr. is equal to
110% of the closing price on the date of grant.
AGGREGATE STOCK OPTION EXERCISES DURING THE FISCAL YEAR. The following
table provides certain information about stock options exercised by the Named
Executive Officers during the fiscal year ended June 30, 2003 and held by the
Named Executive Officers on June 30, 2003.
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED IN-THE-MONEY
SHARES UNEXERCISED OPTIONS/SARS AT OPTIONS/SARS AT FISCAL YEAR
ACQUIRED ON VALUE FISCAL YEAR END END (1) (DOLLARS)
EXERCISE REALIZED ------------------------------- -------------------------------
NAME (#) (DOLLARS) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---------------- -------------- -------------- -------------- -------------- -------------- --------------
John C. Koss n/a n/a n/a n/a n/a n/a
Michael J. Koss 100,000 $ 1,057,250 75,000 145,000 $ 327,900 $ 170,300
John Koss, Jr. 20,000 222,675 102,500 97,500 870,350 122,700
Sujata Sachdeva 5,000 49,750 7,500 35,000 12,225 102,413
Lenore E. Lillie 5,000 44,750 10,000 25,000 44,788 75,912
(1) Based on the $18.40 per share market value of the Common Stock on June
30, 2003, determined with reference to the closing price of the Common
Stock on that date as reported on The Nasdaq Stock Market. Options are
"in-the-money" if the fair market value of the Common Stock on June 30,
2003 exceeded the exercise price.
8
EQUITY COMPENSATION PLAN INFORMATION. The table set forth below
provides certain information with respect to the Company's equity compensation
plans as of the end of the most recently completed fiscal year (June 30, 2003)
under which equity securities of the Company are authorized for issuance.
EQUITY COMPENSATION PLAN INFORMATION TABLE
NUMBER OF SECURITIES REMAINING
NUMBER OF SECURITIES TO BE WEIGHTED-AVERAGE AVAILABLE FOR FUTURE ISSUANCE
ISSUED UPON EXERCISE OF EXERCISE PRICE OF UNDER EQUITY COMPENSATION PLANS
OUTSTANDING OPTIONS, OUTSTANDING OPTIONS, (EXCLUDING SECURITIES REFLECTED IN
PLAN CATEGORY WARRANTS AND RIGHTS WARRANTS AND RIGHTS COLUMN (a))
------------------------------ --------------------------- ------------------- ----------------------------------
(a) (b) (c)
EQUITY COMPENSATION PLANS
APPROVED BY SECURITY HOLDERS 650,000 $14.75 763,483
EQUITY COMPENSATION PLANS NOT
APPROVED BY SECURITY HOLDERS Not applicable Not applicable Not applicable
TOTAL 650,000 $14.75 763,483
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION. John C.
Koss, the President of the Company, also served as a member of the Compensation
Committee during a portion f the fiscal year ended June 30, 2003. Mr. Koss is no
longer serving on the Compensation Committee.
DIRECTOR COMPENSATION. Directors who are not also employees of the
Company receive an annual retainer of $6,000, plus $1,500 per director for each
meeting, $500 per director for each committee meeting, $250 per quarter for
quarters 1-3 for Audit Committee Chair to review statements with the Audit
partner, and $250 per year for other Committee Chairs for service for each
remaining Committee.
OTHER COMPENSATION ARRANGEMENTS. The Company has certain other
compensation plans and arrangements which are available to the CEO and certain
of the Named Executive Officers including the following:
o SUPPLEMENTAL MEDICAL CARE REIMBURSEMENT PLAN. Each officer of the
Company is covered by a medical care reimbursement plan for all medical
expenses incurred which are not covered under group health insurance up
to an annual maximum of 10% of salary. Amounts reimbursed under this
Plan are included under the column headed "All Other Compensation" in
the summary compensation table.
o EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST. In December 1975, the Company
adopted the KESOT, which is a form of employee benefit plan designed to
invest primarily in employer securities. The KESOT is qualified under
Section 401(a) of the Internal Revenue Code. All full-time employees
with at least six months' uninterrupted service with the Company are
eligible to participate in the KESOT. Contributions to the KESOT are
allocated to the accounts of participants in proportion to the ratio
that a participant's compensation bears to total compensation of all
participants. Accounts are adjusted each year to reflect the investment
experience of the trust and forfeitures from accounts of non-vested
terminated participants. All unallocated shares will be voted by the
KESOT Trustees as directed by the KESOT Committee. Michael J. Koss and
Cheryl Mike currently serve as KESOT Trustees and as the members of the
KESOT Committee. Voting rights for all allocated shares are passed
through to the participant for whose account such shares are allocated,
and must be voted by the Trustees in accordance with the participants'
direction. As of August 1, 2003 the KESOT held 411,176 shares of Common
Stock (approximately 10.51% of the total number of shares outstanding).
o OFFICER LOAN POLICY. On January 31, 1980, the Board adopted an Officer
Loan Policy. The significant provisions of the policy are: (i) the
maximum amount to be loaned is limited to one-half of the officer's
annual base salary; (ii) the first $10,000 bears no interest; (iii) in
the event the loan balance exceeds $10,000, interest is charged on the
entire amount at the minimum rate provided by Section 483 of the
Internal Revenue Code; and (iv) the loan will be repaid in installments
or in full upon termination of employment. During the fiscal year ended
June 30, 2003, no officer had an officer loan that exceeded $60,000.
Given the recent passage of the Sarbanes-Oxley Act of 2002, the Company
will no longer have an officer loan policy.
9
o RETIREMENT AGREEMENT. Mr. Koss is eligible to receive his current base
salary of $150,000 for the remainder of his life, whether he becomes
disabled or not. Mr. Koss is over 70 years old and will be entitled to
receive this benefit upon his retirement from the Company. The Company
has a deferred compensation liability of $631,855 recorded as of June
30, 2003, and $737,599 as of June 30, 2002 for this arrangement.
o STOCK OPTION PLANS. In 1990, the Board of Directors created, and the
stockholders approved, a Flexible Incentive Plan (the "Plan"). This
Plan is administered by the Compensation Committee and vests the
Compensation Committee with discretionary powers to choose from a
variety of incentive compensation alternatives to make annual
stock-based awards to officers, key employees and other members of the
Company's management team.
o SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN. The Board of Directors has by
resolution entered into a Supplemental Executive Retirement Plan with
Michael J. Koss which calls for Mr. Koss to receive annual cash
compensation following his retirement from the Company ("Retirement
Payments") in an amount equal to 2% of the base salary of Mr. Koss,
multiplied by his number of years of service to the Company (for
example, if Mr. Koss had worked 25 years, then he would be entitled to
receive 50% of base salary). The base salary shall be calculated using
the average base salary of Mr. Koss during the three years preceding
his retirement. The Retirement Payments are to be paid to Mr. Koss
monthly until his death, and after his death shall continue to be paid
monthly to his surviving spouse until her death.
o PROFIT SHARING PLAN. Every quarter of each fiscal year, the Company
sets aside a percentage of any operating profits and distributes it to
all employees (except John C. Koss, Michael J. Koss, and John Koss,
Jr.) based on their hourly rate of pay. All full-time Koss employees
(except John C. Koss, Michael J. Koss, and John Koss, Jr.) are eligible
for profit sharing if they have been employed for the complete fiscal
quarter. Deductions are made from profit sharing for each absence (paid
sick days and unpaid days) based on the number of hours of time lost.
10
AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors (the "Committee") is composed of
three non-employee directors. The members of the Committee are: Mr. Mattson, Mr.
Doerr and Mr. Stein. Each member of the Committee is "independent" as defined in
The Nasdaq Stock Market listing standards. The Committee held two meetings
during its fiscal year 2003.
The responsibilities of the Committee are set forth in its Charter, which is
reviewed and amended periodically, as appropriate. Generally, the Committee
reviews and monitors the Company's financial reporting process on behalf of the
Board of Directors. In fulfilling its responsibility, the Committee recommends
to the full Board of Directors the selection of the Company's independent
accountants. The Committee discusses with the independent accountants the
overall scope and specific plans for their respective audits. The Committee also
discusses the Company's consolidated financial statements, the effectiveness and
adequacy of the Company's internal controls and pending litigation. The
Committee meets twice a year with the Company's independent accountants to
discuss the results of their examinations, their evaluations of the Company's
internal controls, and the overall quality of the Company's financial reporting.
Specifically, the Committee has: (i) reviewed and discussed the Company's
audited financial statements for the fiscal year ended June 30, 2003 with the
Company's management; (ii) discussed with the Company's independent auditors the
matters required to be discussed by SAS 61 (Codification of Statements on
Auditing Standards); and (iii) received the written disclosures and the letter
from the Company's independent accountants required by Independence Standards
Board Standard No. 1 (Independence Standards Board Standard No. 1, Independence
Discussions with Audit Committees), and has discussed with the Company's
independent accountants the independent accountants' independence. Based on the
review and discussions referred to above, the Committee recommended to the Board
of Directors that the audited financial statements be included in the Company's
Annual Report on Form 10-K for the fiscal year ended June 30, 2003 for filing
with the SEC.
AUDIT COMMITTEE
LAWRENCE S. MATTSON
THOMAS L. DOERR
MARTIN F. STEIN
THE REPORT OF THE AUDIT COMMITTEE SHALL NOT BE DEEMED INCORPORATED BY REFERENCE
BY ANY GENERAL STATEMENT INCORPORATING BY REFERENCE THIS PROXY STATEMENT INTO
ANY FILING UNDER THE SECURITIES ACT OF 1933 OR UNDER THE SECURITIES EXCHANGE ACT
OF 1934 (TOGETHER, THE "ACTS"), EXCEPT TO THE EXTENT THAT THE COMPANY
SPECIFICALLY INCORPORATES THIS INFORMATION BY REFERENCE, AND SHALL NOT OTHERWISE
BE DEEMED FILED UNDER SUCH ACTS.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Under SEC rules, the Company is required to provide certain information
concerning compensation provided to the Company's Chief Executive Officer and
the Named Executive Officers. The disclosure requirements for these individuals
include the use of tables and a report of the committee responsible for
compensation decisions for these individuals, explaining the rationale and
considerations that led to those compensation decisions. Therefore, the
Compensation Committee of the Board of Directors has prepared the following
report for inclusion in this Proxy Statement:
The Compensation Committee of the Board of Directors
("Compensation Committee") is composed of Mr. Stollenwerk, Mr. Mattson,
and Mr. Stein. The Compensation Committee is responsible for the review
of all employee salaries in excess of $75,000 or who report directly to
the Company's Chief Executive Officer. The Compensation Committee also
reviews all bonus, commission and stock option programs. The
Compensation Committee meets as a group each spring and reviews its
report with the full Board prior to the end of the fiscal year. This
system enables management to plan the following year more
appropriately.
The Company employs a compensation program linked to
company-wide performance and individual achievement. All executive
officers are reviewed twice each year. Raises in base salaries are made
in July when necessary or when promotions are announced. In addition,
the Company has a Flexible Incentive Plan, an Employee Stock Ownership
Plan and Trust, a 401(k) Plan, and a Profit Sharing Plan. The Company
also has a cafeteria benefits plan to provide flexibility to employees
to choose their own health care and associated benefits package from an
array of offerings. The Company shares the cost of medical insurance
with its employees.
11
The Company's executive officers are paid base salaries
commensurate with their responsibilities, after comparison with base
salaries of executive officers of other light assembly or manufacturing
companies taken from data in an annual national survey.
Executive officers are also eligible for annual bonuses based
upon individual performance and overall Company performance and
profitability. Factors relevant to determining such bonuses include
attainment of corporate revenue and earnings goals and the development
of new accounts. The Company's Chairman is eligible to receive a bonus
calculated as a percentage of the Company's earnings before interest
and taxes. The Company's Vice President-Sales is entitled to receive a
bonus based upon increases in sales over the prior year, and a bonus
for obtaining new accounts from a predetermined list of potential new
accounts and for adding new product lines to current accounts. The
Company's Vice President - Europe is entitled to receive a bonus based
upon the Company's sales in export markets.
The Compensation Committee annually reviews and determines the
compensation of Michael J. Koss, President and Chief Executive Officer.
Michael J. Koss' salary is based on his experience, responsibilities,
historical salary levels for himself and other executive officers of
the Company, and the salaries of Chief Executive Officers of other
light assembly or manufacturing companies. Michael J. Koss is also
eligible to receive a bonus calculated as a percentage of the Company's
earnings before interest and taxes. He also participates in the
Company's Flexible Incentive Stock Option Plan.
COMPENSATION COMMITTEE
MARTIN STEIN
LAWRENCE S. MATTSON
JOHN J. STOLLENWERK
THE REPORT OF THE COMPENSATION COMMITTEE SHALL NOT BE DEEMED INCORPORATED
BY REFERENCE BY ANY GENERAL STATEMENT INCORPORATING BY REFERENCE THIS
PROXY STATEMENT INTO ANY FILING UNDER THE SECURITIES ACT OF 1933 OR UNDER
THE SECURITIES EXCHANGE ACT OF 1934 (TOGETHER, THE "ACTS"), EXCEPT TO THE
EXTENT THAT THE COMPANY SPECIFICALLY INCORPORATES THIS INFORMATION BY
REFERENCE, AND SHALL NOT OTHERWISE BE DEEMED FILED UNDER SUCH ACTS.
12
STOCK PRICE PERFORMANCE INFORMATION
The graph and table below set forth information comparing the yearly
cumulative total return on the Company's Common Stock over the past five years
with the yearly cumulative total return on (i) stocks included in The Nasdaq
Stock Market (US Companies) Index, and (ii) a group of peer companies ("Peer
Group"). The Peer Group consists of Boston Acoustics, Inc., Digital Video
Systems, Inc., and Phoenix Gold International, Inc., companies which the Company
believes are similar in terms of market capitalization and business lines. The
Peer Group used last year also included Sensory Science Corporation, which is
not included in this year's Peer Group as a result of its acquisition by another
company. For purposes of the graph and table, it is assumed that on July 1,
1998, $100 was invested in the stock of each of (i) the Company, (ii) the
companies on The Nasdaq Stock Market (US Companies) Index, and (iii) the
companies in the Peer Group (the return for the investment in the stock of each
company in the Peer Group is weighted according to the stock market
capitalization of each company as adjusted at the beginning of each fiscal year
indicated on the table). The graph and table also assume that all dividends paid
were reinvested in the stock of the issuing companies. THE STOCK PRICE
PERFORMANCE INFORMATION SHOWN IN THE GRAPH AND TABLE BELOW SHOULD NOT BE
CONSIDERED INDICATIVE OF FUTURE PERFORMANCE.
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG KOSS CORPORATION
NASDAQ MARKET INDEX AND PEER GROUP INDEX
ASSUMES $100 INVESTED ON JULY 1, 1998
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING JUNE 30, 2003
13
RELATED TRANSACTIONS
BUILDING LEASE. The Company leases its main plant and offices in
Milwaukee, Wisconsin from its Chairman, John C. Koss. On May 28, 2003, the lease
was renewed for a period of five years, and is being accounted for as an
operating lease. The lease extension maintained the rent at a fixed rate of
$380,000 per year. At anytime during this period the Company has the option to
renew the lease for an additional five years for the period commencing July 1,
2008 and ending June 30, 2013 under the same terms and conditions. The Company
believes that the lease is on terms no less favorable to the Company than those
that could be obtained from an independent party. The Company is responsible for
all property maintenance, insurance, taxes and other normal expenses related to
ownership.
STOCK REPURCHASES. The Company has previously announced its intention
to repurchase shares of Common Stock in the open market or in private
transactions as such shares become available from time to time, because the
Company believes that its stock is undervalued in the current market and that
such repurchases enhance the value to stockholders. Consistent with this policy,
the Company repurchased 67,500 shares during the fiscal year ended June 30,
2003. The Company believes that purchases of Common Stock enhance stockholder
value and will continue from time to time to engage in such transactions either
on the open market or in private transactions.
The Company has an agreement with its Chairman, John C. Koss, to
repurchase Common Stock from his estate in the event of his death. The
repurchase price is 95% of the fair market value of the Common Stock on the date
that notice to repurchase is provided to the Company. The total number of shares
to be repurchased shall be sufficient to provide proceeds that are the lesser of
$2,500,000 or the amount of estate taxes and administrative expenses incurred by
his estate. The Company is obligated to pay in cash 25% of the total amount due
and to execute a promissory note at the prime rate of interest for the balance.
The Company maintains a $1,150,000 life insurance policy to fund a substantial
portion of this obligation. At June 30, 2003, $1,490,000 has been classified as
a Contingently Redeemable Equity Interest on the Company's financial statements
reflecting the estimated obligation in the event of execution of the agreement.
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than 10% of
a registered class of the Company's equity securities, to file with the SEC and
with The Nasdaq Stock Market reports of ownership and changes in ownership of
Common Stock and other equity securities of the Company. Officers, directors and
greater than 10% shareholders are required by SEC regulation to furnish the
Company with copies of all Section 16(a) forms they file.
Based solely on review of such reports furnished to the Company or
representations that no other reports were required, the Company believes that,
during the 2003 fiscal year, all filing requirements applicable to its officers,
directors, and greater than 10% beneficial owners were complied with.
14
ITEM 2. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITOR
The Board of Directors, following the recommendation of its Audit
Committee, has retained PricewaterhouseCoopers as independent accountants to
audit the consolidated financial statements of the Company and its subsidiaries
for the fiscal year ending June 30, 2004. PricewaterhouseCoopers has served the
Company as its independent auditors since September 1992. Representatives of
PricewaterhouseCoopers are expected to be present at the Meeting, and will have
the opportunity to make a statement if they desire to do so. The
PricewaterhouseCoopers representatives are expected to be available to respond
to appropriate questions at the Meeting.
AUDIT FEES. The aggregate fees billed by PricewaterhouseCoopers for
professional services rendered for the audit of the Company's annual
consolidated financial statements and the reviews of the consolidated financial
statements included in the Company's quarterly 10-Q filings, for the fiscal year
ended June 30, 2003, were $90,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. The
aggregate fees billed by PricewaterhouseCoopers for financial information
systems design and implementation services for the fiscal year ended June 30,
2003, were $0.
ALL OTHER FEES. The aggregate fees billed by PricewaterhouseCoopers
for professional services rendered, which primarily related to income tax
compliance, tax consulting and other services for the fiscal year ended June 30,
2003, were $72,300.
The Audit Committee has considered whether the performance of the
services described above under the caption "All Other Fees" is compatible with
maintaining PricewaterhouseCoopers' independence.
Although this appointment is not required to be submitted to a vote by
stockholders, the Board believes it appropriate, as a matter of policy, to
request that the stockholders ratify the appointment. If stockholder
ratification (by the affirmative vote of a majority of the shares of Common
Stock present in person or represented by proxy at the Meeting) is not received,
the Board will reconsider the appointment. Unless otherwise directed, the proxy
will be voted in favor of the ratification of such appointment.
THE BOARD OF DIRECTORS RECOMMENDS THAT
STOCKHOLDERS VOTE "FOR" RATIFICATION OF
PRICEWATERHOUSECOOPERS AS INDEPENDENT
ACCOUNTANTS FOR THE YEAR ENDING JUNE 30, 2004.
15
ITEM 3. TRANSACTION OF OTHER BUSINESS
The Board of Directors of the Company is not aware of any other matters
that may come before the meeting. If any other matters are properly presented to
the meeting for action, it is the intention of the persons named as proxies in
the enclosed form of proxy to vote such proxies in accordance with their best
judgment on such matters.
STOCKHOLDER PROPOSALS FOR 2004 ANNUAL MEETING
There are no stockholder proposals on the agenda for the Meeting. In
order to be eligible for inclusion in the Company's proxy materials for its 2004
annual meeting, a stockholder proposal must be received by the Company no later
than April 27, 2004 and must otherwise comply with the applicable rules of the
Securities and Exchange Commission. To avoid controversy over when a stockholder
proposal is received, stockholder proposals should be sent by certified mail,
return receipt requested, and should be addressed to the Secretary of the
Company.
16
ANNUAL MEETING OF STOCKHOLDERS OF
KOSS CORPORATION
SEPTEMBER 23, 2003
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
o Please detach along perforated line and mail in the envelope provided. o
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS AND
"FOR" PROPOSAL 2. PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE [X]
FOR AGAINST ABSTAIN
1. Election of Directors: 2. PROPOSAL TO RATIFY THE APPOINTMENT OF [ ] [ ] [ ]
PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT
AUDITORS OF THE CORPORATION FOR THE FISCAL
YEAR ENDING JUNE 30, 2004.
[ ] FOR ALL NOMINEES NOMINEES:
[ ] John C. Koss 3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
[ ] Thomas L. Doerr BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
[ ] WITHHOLD AUTHORITY [ ] Michael J. Koss
FOR ALL NOMINEES [ ] Lawrence S. Mattson
[ ] Martin F. Stein
[ ] FOR ALL EXCEPT [ ] John J. Stollenwerk
(See instructions below)
INSTRUCTION: 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: [X]
To change the address on your account, please check the
box at right and indicate your new address in the
address space above. Please note that changes to the [ ]
registered name(s) on the account may not be submitted
via this method.
Signature of Stockholder Date: Signature of Stockholder Date:
-------------------------- -------- -------------------------- --------
NOTE: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When
signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a
corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a
partnership, please sign in partnership name by authorized person.
KOSS CORPORATION PROXY
4129 NORTH PORT WASHINGTON AVENUE
MILWAUKEE, WISCONSIN 53213
2003 ANNUAL MEETING
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints John C. Koss and Lawrence S. Mattson as
Proxies, each with full power of substitution for himself, and hereby authorizes
them to represent and to vote, as designated on the reverse side, all the shares
of common stock of Koss Corporation held as of the record date and which the
undersigned is entitled to vote at the Annual Meeting of Stockholders to be held
on September 23, 2003 and any or all adjournments thereof, with like effect as
if the undersigned were personally present and voting.
PROPERLY EXECUTED PROXIES RECEIVED BY THE COMPANY WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES LISTED FOR DIRECTOR AND FOR
PROPOSAL 2. IF ANY OTHER MATTERS PROPERLY COME BEFORE THE MEETING, THIS PROXY
WILL BE VOTED IN ACCORDANCE WITH THE BEST JUDGMENT OF THE PROXIES APPOINTED. THE
UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS AND THE PROXY STATEMENT FURNISHED THEREWITH.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
ANNUAL MEETING OF STOCKHOLDERS OF
KOSS CORPORATION
KESOT PLAN
SEPTEMBER 23, 2003
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
o Please detach along perforated line and mail in the envelope provided. o
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR
VOTE IN BLUE OR BLACK INK AS SHOWN HERE [X]
FOR AGAINST ABSTAIN
1. Election of Directors: 2. PROPOSAL TO RATIFY THE APPOINTMENT OF [ ] [ ] [ ]
PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT
AUDITORS OF THE CORPORATION FOR THE FISCAL
YEAR ENDING JUNE 30, 2004.
[ ] FOR ALL NOMINEES NOMINEES:
[ ] John C. Koss 3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
[ ] Thomas L. Doerr BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
[ ] WITHHOLD AUTHORITY [ ] Michael J. Koss
FOR ALL NOMINEES [ ] Lawrence S. Mattson
[ ] Martin F. Stein
[ ] FOR ALL EXCEPT [ ] John J. Stollenwerk
(See instructions below)
INSTRUCTION: 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: [X]
To change the address on your account, please check the
box at right and indicate your new address in the
address space above. Please note that changes to the [ ]
registered name(s) on the account may not be submitted
via this method.
Signature of Stockholder Date: Signature of Stockholder Date:
-------------------------- -------- -------------------------- --------
NOTE: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When
signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a
corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a
partnership, please sign in partnership name by authorized person.
PROXY
KOSS CORPORATION
4129 NORTH PORT WASHINGTON AVENUE
MILWAUKEE, WISCONSIN 53213
2003 ANNUAL MEETING
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints John C. Koss and Lawrence S. Mattson as Proxies,
each with full power of substitution for himself, and hereby authorizes them to
represent and to vote, as designated on the reverse side, all the shares of
common stock of Koss Corporation held as of the record date and which the
undersigned is entitled to vote at the Annual Meeting of Stockholders to be held
on September 23, 2003 and any or all adjournments thereof, with like effect as
if the undersigned were personally present and voting.
PROPERLY EXECUTED PROXIES RECEIVED BY THE COMPANY WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES LISTED FOR DIRECTOR AND FOR
PROPOSAL 2. IF ANY OTHER MATTERS PROPERLY COME BEFORE THE MEETING, THIS PROXY
WILL BE VOTED IN ACCORDANCE WITH THE BEST JUDGMENT OF THE PROXIES APPOINTED. THE
UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS AND THE PROXY STATEMENT FURNISHED THEREWITH.
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