Audiovox 2003 Annual Report Download - page 136

Download and view the complete annual report

Please find page 136 of the 2003 Audiovox annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 159

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159

AUDIOVOX CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
November 30, 2001, 2002 and 2003
(Dollars in thousands, except share and per share data)
The Company had been the subject of an administrative agency
investigation involving alleged reimbursement of a fixed nominal
amount of federal campaign contributions during the years 1995 and
1996. During the third quarter of fiscal 2003, the Company entered
into a Conciliation Agreement and paid a civil penalty in the amount
of $620.
During the third quarter of fiscal 2003, a certain Venezuelan
employee, who is also a minority shareholder in Audiovox Venezuela,
submitted a claim to the Venezuela Labor Court for severance
compensation of approximately $560. The Court approved the claim and
it was paid and expensed by Audiovox Venezuela in the third quarter of
fiscal 2003. The Company is challenging the payment of this claim and
will seek reimbursement from the Venezuelan shareholder or the
Company's insurance carrier.
The Company does not expect the outcome of any pending litigation,
separately and in the aggregate, to have a material adverse effect on
its business, consolidated financial position or results of
operations.
Commitments
The Company has guaranteed the borrowings of one of its 50%−owned
equity investees (GLM) at a maximum of $300. During the second quarter
of fiscal 2003, the Company adopted FIN 45, "Guarantors Accounting and
Disclosure Requirements for Guarantors, Including Guarantees of
Indebtedness of Others" (FIN 45). The Company has not modified this
guarantee after December 31, 2002. No liability has been recorded for
this guarantee on the accompanying consolidated financial statements.
ACC entered into an employment agreement with the President and Chief
Executive Officer (the Executive) of ACC through May 29, 2007 (Note
3). Under the agreement, ACC is required to pay the Executive an
annual base salary of $500 in addition to an annual bonus equal to 2%
of ACC's annual earnings before income taxes.
(Continued)
135