SCHEDULE 14A
(RULE 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the registrant [X]

Filed by a party other than the registrant [ ]

Check the appropriate box:

[ ] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2)).

[X] Definitive proxy statement.

[ ] Definitive additional materials.

[ ] Soliciting material pursuant to Rule 14a-12

NAVARRE CORPORATION
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(Name of Registrant as Specified in Its Charter)

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(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)

Payment of filing fee (check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.

(1) Title of each class of securities to which transaction applies:

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(2) Aggregate number of securities to which transaction applies:

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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):

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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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[ ] Fee paid previously with preliminary materials.
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.

(1) Amount Previously Paid:

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(2) Form, Schedule or Registration Statement No.:

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(4) Date Filed:

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NAVARRE CORPORATION
7400 49TH AVENUE NORTH
NEW HOPE, MINNESOTA 55428

----------

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
SEPTEMBER 13, 2001

----------

The Annual Meeting of the Shareholders of Navarre Corporation (the "Company")
will be held Thursday, September 13, 2001 at 3:30 p.m., local time, at the
Marquette Hotel, St. Croix River Room, Third Floor, 710 Marquette Avenue,
Minneapolis, Minnesota, 55402, for the following purposes:

1. To elect three directors to hold office for a term of three years or
until their successors are elected and qualified;

2. To approve amendments to the 1992 Stock Option Plan; and

3. To transact such other business as may properly come before the meeting
or any adjournments thereof.

Shareholders of record at the close of business on July 17, 2001 will be
entitled to vote at the meeting or any adjournments or postponements thereof.
All shareholders are cordially invited to attend the meeting.

If you do not expect to be present at the meeting, you are requested to fill in,
date and sign the enclosed proxy and to mail it promptly in the enclosed
envelope to make sure that your shares are represented at the meeting. You may
also vote your shares by telephone or through the Internet by following the
instructions we have provided on the proxy form. In the event you decide to
attend the meeting in person, you may, if you desire, revoke your proxy and vote
your shares in person, even if you have previously submitted a proxy in writing,
by telephone or through the Internet.

By Order of the Board of Directors

Charles E. Cheney
Secretary

July 30, 2001

NAVARRE CORPORATION
7400 49TH AVENUE NORTH
NEW HOPE, MINNESOTA 55428
(763) 535-8333

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PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
SEPTEMBER 13, 2001

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SOLICITATION OF PROXIES

This Proxy Statement is being furnished to the shareholders of Navarre
Corporation in connection with the solicitation of proxies by the Board of
Directors of the Company for use at the Annual Meeting of Shareholders to be
held on Thursday, September 13, 2001 at 3:30 p.m., local time, at The Marquette
Hotel, St. Croix River Room, Third Floor, 710 Marquette Avenue, Minneapolis,
Minnesota, and at any adjournments or postponements thereof. This Proxy
Statement and accompanying proxy are first being mailed to the shareholders of
the Company on or about August 1, 2001.

The cost of preparing, assembling and mailing the proxy material and of
reimbursing brokers, nominees and fiduciaries for the out-of-pocket and clerical
expenses of transmitting copies of the proxy material to the beneficial owners
of shares held of record by such persons will be borne by the Company. The
Company does not intend to solicit proxies other than by use of the mail, but
certain officers and regular employees of the Company or its subsidiaries,
without additional compensation, may use their personal efforts, by telephone or
otherwise, to obtain proxies.

Only shareholders of record as of the close of business on July 17, 2001 will be
entitled to vote at the Annual Meeting. On that date, the Company had
outstanding 23,426,260 shares of common stock, no par value, each of which is
entitled to one vote per share on each matter to be voted upon at the Annual
Meeting.

The enclosed proxy may be revoked at any time before it is voted by the
execution and delivery of a proxy bearing a later date or by notification in
writing given to the Secretary of the Company prior to the meeting. The enclosed
proxy may also be revoked by attending the meeting and electing to vote in
person. The enclosed Board of Directors' proxy, when properly signed and
returned to the Company, will be voted at the Annual Meeting as directed
therein. Proxies in which no direction is given with respect to the various
matters of business to be transacted at the meeting will be voted FOR the
election of the nominees for the Board of Directors named in this Proxy
Statement and for other matter presented by the Board of Directors. While the
Board of Directors knows of no matters to be presented at the Annual Meeting or
any adjournment thereof, all proxies returned to the Company will be voted on
any such matter in accordance with the judgment of the proxy holders.

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A quorum, consisting of a majority of the shares of common stock entitled to
vote at the Annual Meeting, must be present in person or by proxy before action
may be taken at the Annual Meeting. If an executed proxy is returned and the
shareholder has abstained from voting on any matter, the shares represented by
the proxy will be considered present at the meeting for purposes of determining
a quorum and for purposes of calculating the vote, but will not be considered to
have been voted in favor of such matter. If an executed proxy is returned by a
broker holding shares in "street name" which indicates that the broker does not
have discretionary authority as to certain shares to vote on one or more
matters, the shares will be considered present at the meeting for purposes of
determining a quorum, but will not be considered to be represented at the
meeting for purposes of calculating the vote with respect to such matters.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information as of July 1, 2001 with
respect to the beneficial ownership of the common stock of the Company by (i)
all persons who are known by the Company to hold five percent or more of the
common stock of the Company, (ii) each of the directors and current Named
Executive Officers of the Company, and (iii) all directors and officers of the
Company as a group.

<Table>
<Caption>
NAME AND ADDRESS AMOUNT AND NATURE OF
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) PERCENT OF CLASS
------------------- ----------------------- ----------------

Eric H.Paulson(2) 2,520,558 10.6%
Charles E. Cheney 719,720 3.0%
James G. Sippl 38,800 *
Michael L. Snow 27,200 *
Alfred Teo 938,900 4.0%
Tom Weyl 30,000 *
Dickinson G. Wiltz 150,200 *
All directors and executive
officers as a group (7 persons) 4,425,378 18.5%
</Table>

*Indicates ownership of less than one percent.

(1) Includes shares of common stock issuable upon exercise of outstanding
options exercisable within sixty days of July 1, 2001 in the following amounts:
Eric H. Paulson - 180,000 shares; Charles E. Cheney - 144,000 shares; James G.
Sippl - 28,800 shares; Michael L. Snow - 27,200 shares; Alfred Teo - 12,000
shares, Tom Weyl - no shares, and Dickinson G. Wiltz - 19,600 shares; and all
directors and executive officers as a group - 411,600 shares.
(2) Mr. Paulson's address is 7400 - 49th Avenue North, New Hope, Minnesota
55428.

ELECTION OF DIRECTORS

Pursuant to the terms of the Amended and Restated Articles of Incorporation of
the Company, directors are divided into three classes, with the term of one
class expiring each year. As the term of each class expires, the successors to
the directors in that class will be elected for a term of three years. The terms
of Messrs. Charles E. Cheney, Tom Weyl, and Dickinson G. Wiltz expire at the
Annual Meeting of Shareholders following fiscal year 2001, the terms of Messrs.
Eric H. Paulson and James G. Sippl expire at the Annual Meeting of Shareholders
following fiscal year 2002 and the terms of Messrs. Michael L. Snow and Alfred
Teo expire at the Annual Meeting of Shareholders following fiscal year 2003.
Vacancies on the Board of Directors and newly created directorship can be filled
by vote of a majority of the directors then in office.

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Three directors will be elected at the Annual Meeting to serve until the Annual
Meeting of Shareholders following fiscal year 2004 or until their successors are
elected and qualified. The Board of Directors has nominated for election the
persons named below. The nominees are all currently directors. Messrs. Cheney
and Wiltz were previously elected by the shareholders while Mr. Weyl was elected
by the Board of Directors in July 2001.

The Board is proposing that the shareholders elect the named nominees. It is
intended that proxies will be voted for the named nominees. Unless otherwise
indicated, each director has been engaged in his present occupation as set forth
below, or has been an officer with the organization indicated, for more than
five years. The Board of Directors believes that the nominees named below will
be able to serve, but should the nominees be unable to serve as directors, the
persons named in the proxies have advised that they will vote for the election
of such substitute nominees as the Board of Directors may propose. The names of
the nominees and other directors filling unexpired terms is set forth below.

<Table>
<Caption>
Name and Age Principal Occupation and Other Directorships
------------ --------------------------------------------

Nominees proposed for election for term expiring at the Annual Meeting following
fiscal 2004

Charles E. Cheney (58)..... Mr. Cheney has served as Executive Vice
President of the Company since 1985 and has
been a director of the Company since October
1991. He became Chief Strategic Officer in
January 2001 and Vice-Chairman of the Company
in November 1999 after serving as Chief
Financial Officer since joining the Company in
1985. Prior to that, Mr. Cheney was employed by
Control Data Corporation in various financial
capacities for twelve years, most recently as
controller of Control Data Commerce
International. Mr. Cheney is also a director of
NetRadio Corporation and a certified public
accountant.

Tom Weyl (58).............. Mr. Weyl has served as director of the Company
since July 26, 2001. Mr. Weyl is retired from
Martin/Williams Advertising, a national ad
agency. Prior to his retirement, Mr. Weyl
served as president and chief creative officer
at Martin/Williams Advertising from 1973 to
October 2000. He currently is serving as a
director/organizer of the Royal Palm Bank of
Naples, Florida. Mr. Weyl also served as
director of Musicland Stores Corporation from
1992 until its acquisition by Best Buy Co.,
Inc. in February 2001.

Dickinson G. Wiltz (72)... Mr. Wiltz has served as a director of the
Company since October 1983. Mr. Wiltz has been
a self-employed business management consultant
since 1974.

Directors serving continuing terms:

Eric H. Paulson (56)........ Mr. Paulson is the founder and has been
President and Chief Executive Officer of the
Company since its inception in 1983. Prior to
1983, Mr. Paulson served as senior vice
president and general manager of Pickwick
Distribution Companies, a distributor of
records and tapes. Mr. Paulson has been a
director of the Company since October 1991. He
was also a director from the time of the
inception of the Company in 1983 until the Live
Entertainment acquisition in 1990. Mr. Paulson
also serves as interim CEO of NetRadio
Corporation.
</Table>

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6

<Table>

James G. Sippl (53)......... Mr. Sippl has served as a director of the
Company since July 1993. Mr. Sippl has been
general manager and chief financial officer of
Wealth Enhancement Group since December 1999.
Prior to that Mr. Sippl served as a financial
consultant for Sippl & Associates from May 1998
to December 1999 and chief operating officer of
IntraNet Solutions, a software company from
January 1997 to May 1998. Mr. Sippl served as
vice president of business development with
Merrill Corporation, a financial printer from
November 1990 to January 1997. Prior to joining
Merrill Corporation, Mr. Sippl was president of
Chicago Cutlery, a manufacturer of fine
cutlery, from 1985 to 1989.

Michael L. Snow (50)...... Mr. Snow has served as a director of the
Company since April 1995. Mr. Snow is of
counsel with the Minnesota law firm of Maslon
Edelman Borman & Brand, a Limited Liability
Partnership, which he joined in 1976. He has
served as a director, officer or founder in
numerous public and private corporations and
currently serves as a director of Osmonics,
Inc. and Satellite Industries, Inc.

Alfred Teo (55)........... Mr. Teo has served as a director of the Company
since May 1998. Mr. Teo is chairman and chief
executive officer of The Sigma Plastics Group
which he started in 1979. He is a member of the
board of directors of Fleet Bank NA and Cirrus
Logic. Mr. Teo is also member of the board of
trustees of St. Joseph's Hospital and Medical
Center and a trustee for Stevens Institute of
Technology. In addition, Mr. Teo is the
chairman and chief executive officer of Alpha
Technology, Inc.
</Table>

DIRECTOR COMPENSATION

The non-employee members of the Board of Directors each receive a $12,000 per
year retainer, paid monthly, plus $500 per board meeting. Under the terms of the
Company's 1992 Stock Option Plan, each non-employee director is to receive on
April 1 of each year, a non-qualified stock option to purchase 6,000 shares of
Company common stock at the fair market value on the day of the grant. Pursuant
to the Plan, each of Messrs. Sippl, Snow, Teo and Wiltz received options to
purchase 6,000 shares at a price of $3.688 on April 3, 2000. In addition, on
July 19, 2000 each of Messrs. Sippl, Snow, Teo, and Wiltz received options to
purchase 16,000 shares at a price of $3.28.

BOARD ACTIONS AND COMMITTEES

During fiscal 2001, the Board of Directors held five formal meetings and each
director attended seventy-five percent or more of the meetings of the Board and
of the committees on which the directors served. Board members also met
informally during fiscal 2001 to discuss various aspects of the business affairs
of the Company. The Board of Directors has established an Audit Committee,
Compensation Committee, Executive Committee, and Governance Committee.
Additional information about the Audit Committee and Compensation Committee are
contained in the sections "Report of the Audit Committee" and "Report of the
Compensation Committee" in this Proxy Statement.

The Executive Committee of the Board of Directors for fiscal 2001 was comprised
of Messrs. Cheney, Paulson, and Wiltz. The Executive Committee both monitors and
counsels management in the adherence to policy, progress against approved
corporate goals, strategic compliance, major capital expenditures and

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operating budgets. It also provides immediate interface between the Board of
Directors and Senior Management. Membership includes the Board Chairman as a
permanent member, plus whatever additional directors and officers that are
deemed pertinent. The Executive Committee held three meetings during the fiscal
year ended March 31, 2001.

The Governance Committee consists of all of the outside directors. For fiscal
2001, they were Messrs. Sippl, Snow, Teo and Wiltz. The Committee is intended to
provide a forum for outside directors to address all issues of Corporate
Governance. It also monitors and recommends to the Board any modification of the
principle elements of the charter of the Corporate Governance Committee. The
committee recommends to the Board the selection and replacement, if necessary,
of the CEO and periodically evaluates the performance of the CEO and the Board
as a whole.

The Company does not have a nominating committee. The officers of the Company
are appointed by the Board of Directors and hold office until their successors
are chosen and qualified or until their earlier death, resignation or removal
from office.

EXECUTIVE OFFICERS OF THE COMPANY

The Company's executive officers and other key members of management are as
follows:

<Table>
<Caption>
NAME AGE POSITION WITH THE COMPANY
---- --- -------------------------

Eric H. Paulson 56 Chairman of the Board, President and Chief Executive Officer
and Chairman of NetRadio Corporation
Charles E. Cheney 58 Vice-Chairman, Secretary, Treasurer and Director, Executive Vice
President and Chief Strategic Officer.
James Gilbertson 39 Vice President and Chief Financial Officer
Brian Burke 31 Senior Vice President and General Manager, Navarre Distribution Services
Steve Pritchitt 53 Senior Vice President, Navarre Entertainment Media
Thomas Lenaghan 51 Senior Vice President, New Channel Development
Kathleen Conlin 57 Vice President, Corporate Controller
Joyce Fleck 49 Vice President, Marketing
Margot McManus 43 Vice President, Human Resources
John Turner 47 Vice President, Operations
Ian Warfield 53 Vice President, Business Development
</Table>

The following is a brief summary of the business experience of each of the key
members of management of the Company. Information with respect to Mr. Paulson
and Mr. Cheney is set forth above under "Election of Directors."

James Gilbertson, has been Vice President and Chief Financial Officer
since January 2001. Prior to joining Navarre, he held positions of Co-President,
Chief Operating Officer and Chief Financial Officer at iNTELEFILM, formerly
Children's Broadcasting Corporation. Prior to joining iNTELEFILM, Mr. Gilbertson
served as the Chief Financial Officer for Parker Communications, Inc.,
Minneapolis, MN. Mr. Gilbertson a certified public accountant and originally
began his career with Ernst & Young LLP.

5
8

Brian Burke has been Senior Vice President and General Manager, Navarre
Distribution Services since April 2001. He previously served as General Manager,
Computer Products Division since July 2000 and Vice President, Computer Products
Division since October 1999. Prior to that, Mr. Burke held a series of positions
of increasing responsibility in the Computer Products Division since joining the
Company in July 1995. Prior to joining the company, Mr. Burke held various
marketing, sales and account manager positions with Imtron and Blue Cross/Blue
Shield of Minnesota.

Steve Pritchitt has been Senior Vice President, Navarre Entertainment
Media since April 2001. Mr. Pritchitt comes to Navarre from eSplice where he
recently served as Vice President Content Acquisition. Mr. Pritchitt's career
includes international marketing sales, product management and publishing with
several major labels including Atlantic Recording Corporation, Polygram Records,
Inc., CBS Records International and CBS Records U.K.

Thomas Lenaghan has been Senior Vice President, New Channel Development
since July 2001. Prior to that, Mr. Lenaghan served as Vice President and
General Manager, Alternative Retail Marketing, since joining the Company in June
1997. Before joining the Company, Mr. Lenaghan was employed by the Handleman
Company for twelve years, most recently as vice president of sales. In addition,
Mr. Lenaghan's career covers a total of twenty-five years in the music industry
in various management positions with both Handleman and Pickwick International.

Kathleen Conlin has been Vice President, Corporate Controller since
1995. Ms. Conlin had served in a series of positions of increasing
responsibility since joining the Company in April 1984.

Joyce Fleck has been Vice President, Marketing since January 2000. Ms.
Fleck also served as Director of Marketing since joining Navarre in May 1999.
Prior to joining Navarre she held divisional marketing and merchandising
positions at The Musicland Group from 1986 to 1997 and senior buying positions
at Grow Biz International, from 1997 to 1999.

Margot McManus has been Vice President, Human Resources since January
2000. Ms. McManus also served as Director of Human Resources since joining the
Company in August of 1995. Prior to joining Navarre she had fifteen years of
human resources and business experience including human resources management
roles with Access Management and Consul Restaurant Corporation.

John Turner has been Vice President of Operations since joining the
Company in September 1995. Prior to joining Navarre, Mr. Turner was senior
director of distribution for Nordic Track in Chaska, MN from July 1993 to
September 1995. Prior to that he held various positions in logistics in the
United States and in the United Kingdom.

Ian Warfield has been Vice President, Business Development since April
2001. Prior to that, Mr. Warfield had been President and Chief Operating Officer
of eSplice since January 2000. Before January 2000, Mr. Warfield was Vice
President and General Manager, Computer Products Division, of Navarre
Corporation from January 1998 when he joined the Company. Prior to joining
Navarre, Mr. Warfield's twenty five year industry career included senior
management roles at Microgistix, IMS Consulting, Software, Etc and Technology
Marketing Group. His consulting experience included strategic engagements with
IBM, Compaq, Hewlett Packard, Samsonite and American Airlines.

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EXECUTIVE COMPENSATION

The following table sets forth the annual compensation and other components of
compensation for the fiscal years ending March 31, 2001, 2000, and 1999 for Eric
H. Paulson, the Chief Executive Officer of the Company, and Charles E. Cheney,
the only other executive officer of the Company whose total cash compensation
exceeded $100,000 (together, the "Named Executive Officers") during the fiscal
year ended March 31, 2001.

SUMMARY COMPENSATION TABLE

<Table>
<Caption>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------- ------------
SECURITIES ALL OTHER
NAME AND FISCAL OTHER ANNUAL UNDERLYING COMPEN-
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS SATION
------------------ ------ ------ ----- ------------ ---------- ---------

Eric H. Paulson
Chairman of the Board, 2001 $325,000 $130,000 ---- 100,000 $103,564(2)
Chief Executive Officer 2000 $325,950 ---- ---- 100,000 ----
and President 1999 $293,082 $125,000 ---- 100,000 $77,000(3)

Charles E. Cheney 2001 $235,000 $94,000 $9,000(1) 100,000 $78,547(2)
Vice-Chairman, Executive 2000 $232,500 ---- $9,346(1) 100,000 ----
Vice President, Chief 1999 $205,385 $75,000 $9,000(1) 100,000 $77,000(3)
Strategic Officer,
Secretary and Treasurer
</Table>

(1) Represents car allowance.

(2) Amounts reflect accommodation fees paid to Mr. Paulson of $40,000 and to
Mr. Cheney of $55,000 in connection with loans made to the Company to
facilitate the repurchase of shares from a preferred shareholder and life
insurance premiums paid by the Company of $63,564 for Mr. Paulson and
$23,547 for Mr. Cheney.

(3) Amounts reflect loan guarantee fees paid to both Mr. Paulson and Mr. Cheney
in consideration of their guarantees of the Company's obligations.

EMPLOYMENT AGREEMENTS

The Company entered into employment agreements (the "Employment Agreements")
with Mr. Paulson and Mr. Cheney effective October 1, 1996. The Employment
Agreements protect the proprietary rights of the Company to all material and
ideas developed by Mr. Paulson and Mr. Cheney during their employment and
prohibit the disclosure of any confidential matters by these employees during or
after their employment with the Company.

The agreement with Mr. Paulson terminates on September 30, 2001 and is
automatically renewable for one-year periods. The agreement currently provides
for a base salary of $325,000 per year, subject to annual adjustments by the
Board of Directors, a year end bonus of up to eighty percent of his base salary,
and life insurance of $2,000,000.

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10

The agreement with Mr. Cheney terminates on September 30, 2001 and is
automatically renewable for one-year periods. The agreement currently provides
for a base salary of $235,000 per year, subject to annual adjustments by the
Board of Directors, a year end bonus of up to sixty percent of his base salary,
and life insurance of $250,000.

Under the terms of the Employment Agreements, if the employment of either
Messrs. Paulson or Cheney is terminated without cause by the Company or by the
employee, for the employee cause as defined in the Agreements, the Employment
Agreements require the payment to Messrs. Paulson and Cheney respectively of (i)
their base salaries through the end of the term of the Agreement or for two
years, whichever is more, in exchange for a properly executed non-compete
agreement between the employee and the Company and (ii) certain benefits to Mr.
Paulson for the greater of two years or the remaining term of the Agreement and
Mr. Cheney for the greater of one year or the remaining term of the Agreement.
In addition, if the termination by the Company without cause or by the employee
for employee cause occurs after the change of control or ownership of the
Company, the employee is entitled to receive benefits equal to the amount
determined by multiplying 2.99 by the average annual compensation and fringe
benefits paid to the employee over the five most recent fiscal years, an amount
currently equal to approximately $1,250,511 with respect to Mr. Paulson, and
$898,691 with respect to Mr. Cheney. The Agreements further provide, however,
that in no event shall the amount due and payable be such that it would
constitute a "parachute payment" within the meaning of the Internal Revenue
Code, and that, in the event that any portion of the severance payment would be
deemed a parachute payment, then the amount of the severance payment would be
reduced to the extent necessary to eliminate such treatment or characterization.
In addition, under the terms of Mr. Paulson's employment agreement, at the
expiration of his employment period or the termination of the employment
agreement, all amounts due from Mr. Paulson to the Company will be deemed paid
and satisfied.

STOCK OPTION PLAN

The Company's 1992 Stock Option Plan (the "1992 Plan") was approved by the Board
of Directors on September 1, 1992. A total of 3,474,000 shares of the Company's
authorized common stock are reserved for issuance under the 1992 Plan. At July
1, 2001, the Company had issued 1,905,409 shares under the Plan, 1,174,046
shares were subject to outstanding options and warrants and 394,545 shares were
for future issuance. The purpose of the 1992 Plan is to attract and retain
talented employees, non-employee directors, consultants and independent
contractors, as well as reward such persons who contribute to the achievement to
the Company's economic objectives, by giving them a proprietary interest in the
Company. The 1992 Plan provides for both incentive stock options and
non-statutory stock options. Incentive stock options are granted at an exercise
price based upon fair market value and receive favorable tax treatment under the
Internal Revenue Code. Non-statutory stock options are granted at an exercise
price determined by the Board of Directors and do not qualify for favorable tax
treatment.

The following table provides required information concerning the year end value
of stock options under the Stock Plan to highly compensated executive officers
of the Company identified on the table below.

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11

The following table sets forth certain information regarding stock options
granted to the executive officers named in the Summary Compensation Table during
the Company's 2001 fiscal year.

OPTION GRANTS IN LAST FISCAL YEAR

<Table>
<Caption>
POTENTIAL
INDIVIDUAL GRANTS REALIZABLE
VALUE AT ASSUMED
NUMBER OF PERCENT OF ANNUAL RATES OF
SECURITIES TOTAL OPTIONS STOCK PRICE
UNDERLYING GRANTED TO EXERCISE APPRECIATION FOR
OPTIONS EMPLOYEES IN PRICE EXPIRATION OPTION TERM(1)
NAME GRANTED FISCAL YEAR ($/SH) DATE 5% 10%
---- ---------- ------------- -------- ---------- ------------------

Eric H. Paulson 100,000 17.8% $3.28 7/19/05 $90,620 $200,247
Charles E. Cheney 100,000 17.8% $3.28 7/19/05 $90,620 $200,247
</Table>

(1) Represents the potential realizable value of grant of options assuming that
the market price of the underlying common stock appreciates in value from
its fair market value on the date of the grant to the end of the option
term at the indicated annual rates.

The following table sets forth information with respect to the Company's
executive officers concerning the exercise of options during fiscal 2001 and
unexercised options held at March 31, 2001.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION VALUES

<Table>
<Caption>
SHARES VALUE OF UNEXERCISED
ACQUIRED NUMBER OF UNEXERCISED IN-THE-MONEY
ON VALUE OPTIONS AT YEAR END OPTIONS AT YEAR END
NAME EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- -------- -------- ------------------------- -------------------------

Eric H. Paulson None None 150,000 240,000 None None
Charles E. Cheney None None 118,000 232,000 None None
</Table>

The closing price on March 30, 2001, as reported on the Nasdaq Stock Market, was
$1.375 per share.

CERTAIN TRANSACTIONS

At March 31, 2001, Mr. Paulson was indebted to the Company in the principal
amount of $304,003. Under the terms of Mr. Paulson's employment contract, any
and all sums owed by Mr. Paulson to the Company at the expiration of the his
employment period, September 30, 2001, will be deemed paid and satisfied in
full. The indebtedness originally arose from a loan from the Company to Mr.
Paulson. The Company accrues interest on the outstanding indebtedness at the
rate of 8.5 percent per year.

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REPORT OF THE AUDIT COMMITTEE

The Audit Committee of the Board of Directors is responsible for providing
independent, objective oversight of the Company's financial reporting system by
overseeing and monitoring management's and the independent auditors'
participation in the financial reporting process. The Audit Committee is
comprised of independent directors, consisting of Mr. Sippl, Mr. Snow, and Mr.
Teo. Each of the members of the current Audit Committee is independent as
defined by the Nasdaq listing standards. This report is submitted by those
individuals serving on the Committee for fiscal 2001. A copy of the audit
committee charter is attached as Exhibit A to this Proxy Statement.

The Audit Committee held one meeting during fiscal year 2001. The meeting was
designed to facilitate and encourage private communication between the Audit
Committee and the Company's independent accountants, Ernst & Young, LLP.

During the meeting, the Audit Committee reviewed and discussed the audited
financial statements with management and Ernst & Young LLP. Management
represented to the Audit Committee that the Company's consolidated financial
statements were prepared in accordance with generally accepted accounting
principles, and the Audit Committee has reviewed and discussed the consolidated
financial statements with management and the independent accountants. The
discussions with Ernst & Young LLP also included the matters required by
Statement on Auditing Standards No. 61 (Communication with Audit Committees).

Ernst & Young LLP provided to the Audit Committee the written disclosures and
the letter regarding its independence as required by Independence Standards
Board Standard No. 1 (Independence Discussions with Audit Committees). This
information was discussed with Ernst & Young LLP.

Ernst & Young, LLP have been the auditors for the Company since 1991 and have
been selected by the Board of Directors, upon recommendation of the Audit
Committee, to serve as such for the current fiscal year. A representative of
Ernst & Young LLP is expected to be present at the Annual Meeting of
Shareholders and will have an opportunity to make a statement and will be
available to respond to appropriate questions.

In reliance on the reviews and discussions referred to above, the Committee
recommended to the Board of Directors (and the Board has approved) that the
audited consolidated financial statements be included in the Annual Report on
Form 10-K for the year ended March 31, 2001 for filing with the Securities and
Exchange Commission.

SUBMITTED BY THE 2001 AUDIT COMMITTEE OF
THE COMPANY'S BOARD OF DIRECTORS

James G. Sippl Michael L. Snow Alfred Teo

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REPORT OF THE COMPENSATION COMMITTEE

Decisions on compensation of the Company's executives are generally made by the
Compensation Committee of the Board (the "Committee"). For fiscal 2001 the
members were Mr. Sippl and Mr. Teo, who were non-employee directors. Effective
July 26, 2001 the committee consists of Mr. Sippl, Mr. Weyl, and Mr. Wiltz, who
are non-employee directors. All decisions by the Committee relating to the
compensation of the Company's executive officers are reviewed by the full Board,
except for decisions about awards under the Company's 1992 Stock Option Plan,
which are made solely by the Committee. Set forth below is a report submitted by
the Committee addressing the Company's compensation policies for its executive
officers, including Mr. Paulson the Company's Chief Executive Officer for fiscal
2001.

COMPENSATION PHILOSOPHY

The Committee's executive compensation policies are designed to provide
competitive levels of compensation in order to attract and retain highly
qualified executives, establish compensation levels based upon a comparison of
job responsibility within the Company to similar positions in comparable
companies and industries, and recognize individual performance based upon
long-term specific goals, as opposed to short-term or arbitrary measurements of
performance.

BASE SALARY

The Committee annually reviews each executive officer's salary. In determining
appropriate base salary levels, the Committee considers levels of
responsibility, performance on behalf of the Company, the overall performance of
the Company and external pay practices. With respect to external pay practices,
the Committee uses various surveys of executive compensation for companies of
similar size and comparable industries as a basis for determining competitive
levels of cash compensations.

ANNUAL INCENTIVE AWARDS

The Company pays bonuses to its executive officers based upon the performance of
the Company. Mr. Paulson may receive an amount up to eighty percent of his base
salary and Mr. Cheney may receive an amount up to sixty percent of his base. The
Committee may award executive officers either cash, common stock or a
combination of cash and common stock as incentive compensation. With respect to
fiscal 2001, Mr. Paulson received a bonus of $130,000 and Mr. Cheney received
$94,000.

STOCK OPTIONS

In order to promote improved long-term performance by the Company, the Committee
awards stock options to the Company's executive officers. Stock options are
awarded in order to achieve competitive compensation levels and to reward
individual performance of executive officers. Stock options only have value for
the executive officers if the price of the Company's stock appreciates in value
from the date the stock options are granted. Shareholders also benefit from such
stock price appreciation. The Compensation Committee believes that the grant of
restricted stock grants provides additional compensation to the Company officers
by providing them with an additional equity interest in the Company's
securities.

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CHIEF EXECUTIVE OFFICER COMPENSATION

Mr. Paulson's base pay for fiscal 2001 was $325,000. The compensation package
for Mr. Paulson was set by the Board of Directors. Mr. Paulson's base salary was
established in connection with the execution of a an employment agreement in
October 1996. During fiscal 2001, the Company made cost of living adjustments to
the base salary. Mr. Paulson received a bonus of $130,000 during fiscal 2001
based upon Mr. Paulson's achievements during fiscal 2001, including record
Company revenues. The terms of Mr. Paulson's employment agreement are set forth
in the section entitled "Employment Agreements."

SUBMITTED BY THE 2001 COMPENSATION COMMITTEE OF
THE COMPANY'S BOARD OF DIRECTORS

James G. Sippl Alfred Teo

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PERFORMANCE GRAPH

The following Performance Graph compares performance of the Company's Common
stock on the Nasdaq National Market System to the Nasdaq Stock Market (US
Companies) Index and a Peer Group Index described below. The graph compares the
cumulative total return from March 31, 1996 to March 31, 2001 on $100 invested
on March 31, 1996 assumes reinvestment of all dividends and has been adjusted to
reflect stock splits.

The Peer Group Index below includes the stock performance of the following
companies which were used in the Company's performance graph in the Company's
proxy statement for fiscal 2001: Handleman Co., Ingram Micro Inc., Merisel Inc.,
Platinum Entertainment, Inc. and Tech Data Corp. This group is comprised of
companies that, in fiscal 2001 had similar music or software distribution
operations.

PERFORMANCE GRAPH

NAVARRE CORPORATION
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURNS

[PERFORMANCE GRAPH]

<Table>
<Caption>
3/96 3/97 3/98 3/99 3/00 3/01
------ ------ ------ ------ ------ ------

Navarre Corporation 100.00 68.66 62.69 332.84 94.04 32.84
Nasdaq Stock Market 100.00 111.15 168.47 227.60 423.35 169.48
Self-Determined Peer Group 100.00 134.17 208.98 141.51 144.78 125.60
</Table>

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PROPOSAL 2 - APPROVAL OF AMENDMENT TO THE COMPANY'S
1992 STOCK OPTION PLAN

AMENDMENTS TO THE 1992 PLAN

On July 26, 2001, the Board of Directors approved amendments to the 1992 Plan to
(i) increase the number of shares of common stock reserved for issuance
thereunder from 3,474,000 shares to 4,224,000 shares, (ii) extend the term of
the 1992 Plan from September 1, 2002, to July 1, 2006, and (iii) conform the
treatment of shares of restricted stock awarded under the 1992 Plan upon a
change in control to the treatment accorded to options granted under the 1992
Plan. In addition, the Board of Directors approved a number of non-substantive
amendments to the 1992 Plan (i) to clarify the definition of certain terms,
including "Fair Market Value" and Change in Control," contained in the 1992
Plan, and (ii) conforming the 1992 Plan to certain changes to Section 16 of the
1934 Act adopted by the SEC in 1996.

The 1992 Plan currently authorizes the issuance of 3,474,000 shares of Common
Stock pursuant to options granted, or shares of restricted stock awarded, under
the 1992 Plan. Of this amount, 1,905,409 shares have been issued under the 1992
Plan, 1,174,046 are subject to currently outstanding options and warrants and
394,545 are reserved for future issuance. The Board of Directors has amended the
1992 Plan, subject to shareholder approval, to increase the total number of
shares available under the 1992 Plan to 4,224,000 shares. The term of the 1992
Plan expires on September 1, 2002. The Board of Directors has amended the 1992
Plan, subject to shareholder approval, to extend the term to July 1, 2006. The
Board of Directors has deemed it prudent to increase the shares available for
grants under the 1992 Plan to facilitate future options grants and to extend the
term of the 1992 Plan.

The Board has also amended the 1992 Plan, subject to shareholder approval, to
provide that, upon a Change in Control, any shares of restricted stock awarded
under the 1992 Plan still subject to restriction shall vest in full as of the
date of such Change in Control. This amendment will provide for consistent
treatment of both outstanding stock options and shares of restricted stock
awarded under the 1992 Plan upon a Change in Control.

The Board has also revised certain provisions in the 1992 Plan requiring a
six-month holding period. The revised language is designed to conform to certain
amendments to Section 16 adopted by the SEC in 1996 that removed the six-month
holding period requirement as long as a particular transaction is approved (i)
by the board of directors of the issuer, (ii) by a committee of the board of
directors that is composed solely of two or more non-employee directors, or
(iii) or ratified by the affirmative votes of a majority of the securities of
the Company present, or represented, and entitled to vote at a meeting duly held
in accordance with the laws of the State of Minnesota.

SUMMARY OF 1992 PLAN

This summary is qualified in its entirety by the terms of the 1992 Plan, a copy
of which, in its amended form, may be obtained from the Secretary of the
Company.

GENERAL

The 1992 Plan provides for the granting to participating eligible employees of
the Company of (a) options to purchase common stock that qualify as "incentive
stock options" within the meaning of Section 422 of the Code ("Incentive Stock
Options"), (b) options to purchase common stock that do not qualify as incentive
stock options ("Non-Qualified Options"), and (c) restricted stock awards. The
1992 Plan is

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administered by the Compensation Committee, which (other than with respect to
automatic grants of options to non-employee directors) selects the participants
to be granted options under the 1992 Plan, determines the amount of grants to
participants, and prescribes discretionary terms and conditions of each grant
not otherwise fixed under the 1992 Plan. All employees of the Company are
eligible for participation under the 1992 Plan. Seventy-five employees were
participants as of July 13, 2001.

STOCK OPTIONS

Incentive Stock Options must be granted with an exercise price equal to at least
the fair market value of the common stock on the date of grant (or, in the case
of participants owning more than 10% of the total combined voting power of all
classes of stock of the Company, at least equal to 110% of the fair market value
on the date of grant). Non-Qualified Options may be granted with an exercise
price less than 100% of the fair market value of the common stock on the date of
grant.

For Incentive Stock Options granted after December 31, 1986, the aggregate fair
market value (determined as of the time the Incentive Stock Option is granted)
of shares of common stock with respect to which Incentive Stock Options become
exercisable for the first time by a participant under the 1992 Plan during any
calendar year may not exceed $100,000. On July 16, 2001, the closing price of a
share of Company common stock as reported by The Nasdaq Stock Market was $1.14.
Stock Options have a maximum term fixed by the Compensation Committee, not to
exceed 10 years from the date of grant (five years in the case of an Incentive
Stock Option granted to participants owning more than 10% of the total combined
voting power of all classes of stock of the Company). Non-Qualified Options have
a maximum term fixed by the Compensation Committee, not to exceed 10 years from
the date of grant. Stock options become exercisable during their terms in the
manner determined by the Compensation Committee. Stock options may not be
transferred other than by will or the laws of descent and distribution, and
during the lifetime of a participant they may be exercised only by the
participant.

FEDERAL INCOME TAX CONSEQUENCES

The following description of federal income tax consequences is based on current
statutes, regulations and interpretations. The description does not include
state or local income tax consequences. In addition, the description is not
intended to address specific tax consequences applicable to an individual
participant who receives an award.

Incentive Stock Options

There will not be any federal income tax consequences to either the participant
or the Company as a result of the grant to a participant of an Incentive Stock
Option under the 1992 Plan. The exercise by a participant of an Incentive Stock
Option also will not result in any federal income tax consequences to the
Company or the participant, except that (i) an amount equal to the excess of the
fair market value of the shares acquired upon exercise of the Incentive Stock
Option, determined at the time of exercise, over the consideration paid for the
shares by the participant will be a tax preference item for purposes of the
alternative minimum tax, and (ii) the participant may be subject to an
additional excise tax if any amounts are treated as "excess parachute payments"
within the meaning of the Code.

If a participant disposes of the shares acquired upon exercise of an Incentive
Stock Option, the federal income tax consequences will depend upon how long the
participant has held the shares. If the participant does not dispose of the
shares within two years after the Incentive Stock Option was granted, nor within
one year after the participant exercised the Incentive Stock Option and the
shares were transferred to the participant (the "Applicable Holding Periods"),
then the participant will recognize a long-term capital gain or loss. If the
Applicable Holding Periods are not satisfied, then any gain realized in
connection with the disposition of such stock will generally be taxable as
ordinary compensation income in the year in

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which the disposition occurred, to the extent of the difference between the fair
market value of such stock on the date of exercise and the option exercise
price. The Company is entitled to a tax deduction to the extent, and at the
time, the participant realizes compensation income. The balance of any gain will
be characterized as a capital gain.

Non-qualified Options.

An optionee will not realize taxable compensation income upon the grant of a
non-qualified stock option. As a general matter, when an optionee exercises a
non-qualified stock option, he or she will realize taxable compensation income
at that time equal to the difference between the aggregate option price and the
fair market value of the stock on the date of exercise. The Company is entitled
to a tax deduction to the extent, and at the time, the participant realizes
compensation income.

VOTE REQUIRED

The affirmative vote of the holders of the greater of (i) a majority of the
outstanding shares of common stock of the Company present and entitled to vote
or (b) a majority of the voting power of the minimum number of shares entitled
to vote that would constitute a quorum for transaction of business at the
meeting, is required for approval of the amendments to the 1992 Plan. A
shareholder who abstains is considered to be present and entitled to vote at the
meeting, and is in effect casting a negative vote, but a shareholder (including
a broker) who does not give authority to a Proxy to vote shall not be considered
present and entitled to vote.

REGISTRATION WITH SEC

The Company intends to file a Registration Statement on Form S-8 covering the
issuance of the additional shares issuable under the 1992 Plan, as amended, with
the Securities and Exchange Commission pursuant to the Securities Act of 1933,
as amended.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR ADOPTION OF THE
AMENDMENTS TO THE 1992 PLAN.

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GENERAL

INDEPENDENT AUDITORS

The Board of Directors has selected the firm of Ernst & Young LLP, independent
public accountants, as auditors to the Company for the year ended March 31,
2002. Ernst & Young LLP has audited the Company's financial statements since
1991. A representative of Ernst & Young LLP is expected to be present at the
Annual Meeting to make a statement if he or she so desires and to respond to
appropriate questions.

AUDIT FEES

The aggregate fees billed to the Company by Ernst & Young LLP for professional
services rendered for the audit of the Company's annual financial statements for
the 2001 fiscal year and review of quarterly financial statements and Securities
and Exchange Commission filings for that year were $93,500.

ALL OTHER FEES

Other than audit fees, the aggregate fees billed to the Company by Ernst & Young
LLP for the most recent fiscal year were $90,000, which consisted of $21,000 for
accounting consultation fees and $69,000 for tax preparation and filing fees.
The Company paid no financial information systems design and implementation fees
to by Ernst & Young LLP. The Audit Committee of the Board of Directors has
determined that the services performed by Ernst & Young LLP other than audit
services are not incompatible with Ernst & Young LLP maintaining its
independence.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

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 percent of a
registered class of the Company's equity securities, to file with the Securities
and Exchange Commission initial reports of ownership and reports of changes in
ownership of Common stock and other equity securities of the Company. These
insiders are required by Securities and Exchange Commission regulations to
furnish the Company with copies of all Section 16(a) forms they file, including
Forms 3, 4 and 5. Based upon its review of Forms 3, 4 and 5 filed by the
Company's insiders, the Company believes all such forms with respect to
transactions occurring in fiscal 2001 were filed on a timely basis, except that
Mr. Cheney failed to report two transactions, each of Messrs. Paulson, Sippl,
Snow, and Wiltz failed to report three transactions and Mr. Teo failed to report
four transactions in a timely manner due to an administrative error by the
Company which was assisting them in preparing their filings.

SHAREHOLDER PROPOSALS

Any shareholder desiring to submit a proposal for action at the 2002 Annual
Meeting of Shareholders and presentation in the Company's proxy statement with
respect to such meeting should arrange for such proposal to be delivered to the
Company's offices, 7400 49th Avenue North, New Hope, Minnesota 55428 addressed
to Secretary, no later than March 30, 2002 in order to be considered for
inclusion in the Company's proxy statement relating to the meeting. Matters
pertaining to such proposals, including the number and length thereof,
eligibility of persons entitled to have such proposals included and other
aspects are regulated by the Securities Exchange Act of 1934, Rules and
Regulations of the Securities and Exchange Commission and other laws and
regulations to which interested persons should refer.

17
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In addition, SEC Rule 14a-4 governs the Company's use of its discretionary proxy
voting authority with respect to a shareholder proposal that is not addressed in
the Company's proxy statement. The Rule provides that if a proponent of a
proposal fails to notify the Company at least 45 days prior to the month and day
of mailing of the prior year's proxy statement, then the Company will be allowed
to use its discretionary voting authority when the proposal is raised at the
meeting, without any discussion of the matter in the proxy statement. With
respect to the Company's 2002 Annual Meeting, if the Company is not provided
notice of a shareholder proposal prior to June 15, 2002, the Company will be
allowed to use its voting authority as described above.

OTHER BUSINESS

All items of business intended by the management to be brought before the
meeting are set forth in the Proxy Statement, and the management knows of no
other business to be presented. If other matters of business not presently known
to the Board of Directors shall be properly raised at the Annual Meeting, it is
the attention of the persons named in the proxy to vote on such matters in
accordance with their best judgment.

The Company's Annual Report on Form 10-K for fiscal 2001 is enclosed herewith.
Shareholders may also view this Proxy Statement and Form 10-K on Navarre's
website www.navarre.com or receive a copy by writing to: Navarre Corporation,
7400 49th Avenue North, New Hope, Minnesota 55428, Attention: Charles E. Cheney,
or by calling the Company at (763) 535-8333

By Order of the Board of Directors

Charles E. Cheney
Secretary

Dated: July 30, 2001

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NAVARRE CORPORATION
AUDIT COMMITTEE CHARTER

ORGANIZATION

The audit committee of the board of directors shall be comprised of at least
three directors who are independent of management and the company. Members of
the audit committee shall be considered independent if they have no relationship
to the company that may interfere with the exercise of their independence from
management and the company. All audit committee members will be financially
literate, and at least one member will have accounting or related financial
management expertise.

STATEMENT OF POLICY

The audit committee will provide assistance to the directors in fulfilling their
responsibility to the shareholders and the investment community relating to
corporate accounting, reporting practices of the company, and the quality and
integrity of financial reports of the company. In so doing, it is the
responsibility of the audit committee to maintain free and open communication
between the directors, the independent auditors and the financial management of
the company.

RESPONSIBILITIES

In carrying out its responsibilities, the audit committee believes its policies
and procedures should remain flexible in order to best react to changing
conditions and to ensure to the directors and shareholders that the corporate
accounting and reporting practices of the company are in accordance with all
requirements and are of the highest quality.

In carrying out these responsibilities, the audit committee will:

o Obtain the full board of directors' approval of the Charter and review and
reassess this Charter as conditions dictate (at least annually).

o Review and recommend to the directors the independent auditors to be
selected to audit the financial statements of the company.

o Have a clear understanding with the independent auditors that they are
ultimately accountable to the board of directors and the audit committee,
as the shareholders' representatives, who have the ultimate authority in
deciding to engage, evaluate, and if appropriate, terminate their services.

o Meet with the independent auditors and financial management of the company
to review the scope of the proposed audit for the current year and the
procedures to be utilized, the adequacy of the independent auditor's
compensation, and at the conclusion thereof review such audit, including
any comments or recommendations of the independent auditors.

o Review with the independent auditors and the company's financial and
accounting personnel, the adequacy and effectiveness of the accounting and
financial controls of the company, and elicit any recommendations for the
improvement of such internal controls or particular areas where new or more
detailed controls or procedures are desirable. Particular emphasis should
be given to the adequacy of internal controls to expose any payments,
transactions or procedures that might be deemed illegal or otherwise
improper.

19
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o Review reports received from regulators and other legal and regulatory
matters that may have a material effect on the financial statements or
related company compliance policies.

o Inquire of management and the independent auditors about significant risks
or exposures and assess the steps management has taken to minimize such
risks to the company.

o Review the financial statements contained in the annual report on Form 10-K
to shareholders with management and the independent auditors to determine
that the independent auditors are satisfied with the disclosure and content
of the financial statements to be presented to the shareholders. Review
with financial management and the independent auditors the results of their
timely analysis of significant financial reporting issues and practices,
including changes in, or adoptions of, accounting principles and disclosure
practices. Also review with financial management and the independent
auditors their judgments about the quality, not just acceptability, of
accounting principles and the clarity of the financial disclosure practices
used or proposed to be used, and particularly, the degree of aggressiveness
or conservatism of the Company's accounting principles and underlying
estimates, and other significant decisions made in preparing the financial
statements.

o Provide sufficient opportunity for the independent auditors to meet with
the members of the audit committee without members of management present.
Among the items to be discussed in these meetings are the independent
auditors' evaluation of the company's financial, accounting personnel, and
the cooperation that the independent auditors received during the course of
audit.

o Report the results of the annual audit to the board of directors. If
requested by the board, invite the independent auditors to attend the full
board of directors meeting to assist in reporting the results of the annual
audit or to answer other directors' questions (alternatively, the other
directors, particularly the other independent directors, may be invited to
attend the audit committee meeting during which the results of the annual
audit are reviewed).

o On an annual basis, obtain from the independent auditors a written
communication delineating all their relationships and professional services
as required by Independence Standards Board Standard No. 1, Independence
Discussions with Audit Committees. In addition, review with the independent
auditors the nature and scope of any disclosed relationships or
professional services and take, or recommend that the board of directors
take appropriate action to ensure the continuing independence of the
auditors.

o Submit the minutes of all meetings of the audit committee to, or discuss
the matters discussed at each committee meeting with the board of
directors.

o Investigate any matter brought to its attention within the scope of its
duties, with the power to retain outside counsel for this purpose if, in
its judgment, that is appropriate.

o Review the company's disclosure in the proxy statement for its annual
meeting of shareholders that describes that the committee has satisfied its
responsibilities under this Charter for the prior year. In addition,
include a copy of this Charter in the annual report to shareholders or the
proxy statement at least triennially or the year after any significant
amendment to the Charter.

NAVARRE CORPORATION

ANNUAL MEETING OF SHAREHOLDERS
SEPTEMBER 13, 2001
3:30 P.M.

NAVARRE CORPORATION
7400 - 49TH AVENUE NORTH
NEW HOPE, MN 55428 PROXY
--------------------------------------------------------------------------------

THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR USE AT THE ANNUAL MEETING
ON SEPTEMBER 13, 2001.

The shares of stock you hold in your account will be voted as you specify below.

IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED "FOR" ITEMS 1 AND 2.

The undersigned, revoking all prior proxies, hereby appoints Charles E. Cheney
and Eric H. Paulson, and either of them, as proxy or proxies, with full power of
substitution and revocation, to vote all shares of common stock of Navarre
Corporation (the "Company") of record in the name of the undersigned at the
close of business on July 17, 2001, at the Annual Meeting of Shareholders to be
held on Thursday, September 13, 2001, or at any adjournment thereof, upon the
following matters:

See reverse for voting instructions.

COMPANY #
THERE ARE THREE WAYS TO VOTE YOUR PROXY
CONTROL #

YOUR TELEPHONE OR INTERNET VOTE AUTHORIZES THE NAMED PROXIES TO VOTE YOUR SHARES
IN THE SAME MANNER AS IF YOU MARKED, SIGNED AND RETURNED YOUR PROXY CARD.

VOTE BY PHONE -- TOLL FREE -- 1-800-240-6326 -- QUICK *** EASY *** IMMEDIATE

- Use any touch-tone telephone to vote your proxy 24 hours a day, 7 days a
week, until 12:00 noon EST on September 12, 2001.

- You will be prompted to enter your 3-digit Company Number and your 7-digit
Control Number which are located above.

- Follow the simple instructions the Voice provides you.

VOTE BY INTERNET -- http://www.eproxy.com/navr/ -- QUICK *** EASY *** IMMEDIATE

- Use the Internet to vote your proxy 24 hours a day, 7 days a week, until
12:00 noon CST on September 12, 2001.

- You will be prompted to enter your 3-digit Company Number and your 7-digit
Control Number which are located above to obtain your records and create an
electronic ballot.

VOTE BY MAIL

Mark, sign and date your proxy card and return it in the postage-paid envelope
we've provided or return it to NAVARRE CORPORATION c/o Shareowner Services(SM),
P.O. Box 64873, St. Paul, MN 55164-0873.

IF YOU VOTE BY PHONE OR INTERNET, PLEASE DO NOT MAIL YOUR PROXY CARD.

- Please detach here -
--------------------------------------------------------------------------------

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2.

1. Election of directors: 01 Charles E. Cheney 03 Dickinson G. Wiltz
02 Tom Weyl

[ ] Vote FOR [ ] Vote Withheld
all nominees from all nominees
(except as marked)

(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDICATED NOMINEE,
WRITE THE NUMBER(S) OF THE NOMINEE(S) IN THE BOX PROVIDED TO THE RIGHT.)

-----------------------------------------------

2. Proposal to approve amendments to the
Company's 1992 Stock Option Plan. For Against Abstain
[ ] [ ] [ ]

3. In their discretion, the proxies are
authorized to vote upon such other
business as may properly come before the
meeting.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION
IS GIVEN, WILL BE VOTED FOR THE ELECTION OF THE NOMINEES LISTED IN THE PROXY
STATEMENT AND FOR THE APPROVAL OF ITEM 2.

Address Change? Mark Box [ ]
Indicate changes below:

Date
-----------------------------

----------------------------------------

----------------------------------------
Signature(s) in Box

Please sign exactly as your name(s)
appear on Proxy. If held in joint
tenancy, all persons must sign.
Trustees, administrators, etc., should
include title and authority.
Corporations should provide full name of
corporation and title of authorized
officer signing the proxy.