SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
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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 Section 240.14a-12
All American Semiconductor, Inc.
.................................................................................
(Name of Registrant as Specified In Its Charter)
.................................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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[X] No fee required.
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0-11.
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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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previously. Identify the previous filing by registration statement number, or
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ALL AMERICAN SEMICONDUCTOR, INC.
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held on October 15, 2004
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To: The shareholders of All American Semiconductor, Inc.
The annual meeting of the shareholders of All American Semiconductor, Inc. (the
"Company"), a Delaware corporation, will be held on Friday, October 15, 2004, at
10 A.M., Miami, Florida local time, at Don Shula's Hotel, 15255 Bull Run Road,
Miami Lakes, Florida, for the following purposes:
1. to elect two directors to serve on the Board of Directors until the
2007 annual meeting of shareholders or until election and qualification
of their respective successors;
2. to ratify the selection of Lazar Levine & Felix LLP as the Company's
independent public accountants for the year ending December 31, 2004;
and
3. to consider and act upon such other matters as may properly come before
the annual meeting or any and all postponements or adjournments
thereof.
Only shareholders of record at the close of business on Tuesday, September 14,
2004, are entitled to notice of and to vote at the meeting or at any
adjournments or postponements thereof.
By Order of the Board of Directors,
/s/ HOWARD L. FLANDERS
-------------------------------------
Howard L. Flanders
Corporate Secretary
September 15, 2004
Miami, Florida
THE FORM OF PROXY IS ENCLOSED. TO ASSURE THAT YOUR SHARES WILL BE VOTED AT THE
MEETING, PLEASE COMPLETE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN
THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
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ALL AMERICAN SEMICONDUCTOR, INC.
16115 N.W. 52nd Avenue
Miami, Florida 33014
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PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
To be held on October 15, 2004
--------------------
INTRODUCTION
General
-------
The enclosed proxy is solicited by and on behalf of the Board of Directors
("Board") of All American Semiconductor, Inc. (the "Company") for use at the
Company's annual meeting of shareholders (the "Meeting") to be held on Friday,
October 15, 2004, at 10 A.M., Miami, Florida local time, at Don Shula's Hotel,
15255 Bull Run Road, Miami Lakes, Florida, and at any adjournments or
postponements thereof. The Company is first mailing this Proxy Statement and the
accompanying proxy to its shareholders on or about September 15, 2004.
Proxies in the form enclosed, if properly executed and received in time for
voting, and not revoked, will be voted as directed in accordance with the
instructions thereon. Any properly executed and timely received proxy, not so
directing to the contrary, will be voted "FOR" each of the items listed on the
proxy. Any person signing and mailing the enclosed proxy may revoke it at any
time before it is voted by giving written notice of revocation to Howard L.
Flanders, the Corporate Secretary of the Company, by submission of a duly
executed proxy bearing a later date or by voting in person at the Meeting.
Attendance at the Meeting will not in and of itself constitute a revocation of a
proxy. Any notice revoking a previously submitted proxy should be sent to Howard
L. Flanders, Corporate Secretary, All American Semiconductor, Inc., 16115 N.W.
52nd Avenue, Miami, Florida 33014. Revocations will not be effective unless
received in writing by the Corporate Secretary of the Company prior to the
Meeting.
The expense of this solicitation will be borne by the Company. In addition to
solicitation by mail, arrangements may be made with brokers and other
custodians, nominees and fiduciaries to send proxy materials to their principals
and the Company will, upon request, reimburse them for reasonable expenses in
doing so. Solicitation of proxies from some shareholders may also be made by the
Company's officers and regular employees by telephone, telecopy, the Internet,
or in person after the initial solicitation, without additional compensation or
remuneration therefor.
A copy of the Company's annual report for the fiscal year ended December 31,
2003 (which has included therein audited consolidated financial statements for
the Company) is being mailed to the Company's shareholders together with this
Proxy Statement.
Voting Securities
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All voting rights are vested exclusively in the holders of the Company's common
stock, $.01 par value per share (the "Common Stock"), with each share entitled
to one vote. Only shareholders of record at the close of business on Tuesday,
September 14, 2004 (the "Record Date"), are entitled to notice of and to vote at
the Meeting or any adjournments or postponements thereof. On the Record Date,
the Company had 3,880,571 shares of Common Stock outstanding (the "Shares"), all
of which are entitled to vote at the Meeting. The presence at the Meeting, in
person or by proxy, of the holders of a majority of the Shares will constitute a
quorum for the transaction of business.
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Approximately 10.4% of the Shares are (and were on the Record Date) owned by
Paul Goldberg and Bruce M. Goldberg and members of their families and certain
affiliated trusts (collectively the "Goldberg Group"). See "SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT." The members of the Goldberg Group
have informed the Company that they intend to vote in favor of all proposals
made by the Board in this Proxy Statement.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of the Record Date by (i) each person
known by the Company to be the beneficial owner of more than five percent (5%)
of the Company's Common Stock, (ii) each director or nominee for director, (iii)
each executive officer of the Company who was serving as an executive officer at
the end of fiscal year 2003 (including the Chief Executive Officer) and (iv) all
executive officers and directors of the Company as a group. Except as indicated
in the notes to the following table, the persons named in the table have sole
voting and investment power with respect to all Shares shown as beneficially
owned by them.
Percent of
Name and Address Amount and Nature of Outstanding
of Beneficial Owner (1) Beneficial Ownership (2) Shares (2)
----------------------- ------------------------ ----------
Bruce M. Goldberg (3)...................... 346,413 8.6%
Paul Goldberg (4).......................... 209,951 5.3%
Howard L. Flanders......................... 71,467 1.8%
Rick Gordon................................ 50,917 1.3%
John Jablansky............................. 14,462 *
Richard E. Siegel.......................... 5,100 *
Robin L. Crandell.......................... 4,000 *
Howard M. Pinsley.......................... 3,000 *
Michael W. Forman (5)...................... 1,000 *
All executive officers and directors
as a group (9 persons)(3)(4)(5)............ 706,310 16.9%
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* Less than 1%
(1) The address of Paul Goldberg is 16115 N.W. 52nd Avenue, Miami, Florida
33014 and the address of Bruce M. Goldberg is 230 Devcon Drive, San
Jose, California 95112.
(2) Includes as to the person indicated the following outstanding stock
options to purchase shares of the Company's Common Stock issued under
the Employees', Officers', Directors' Stock Option Plan and the 2000
Nonemployee Director Stock Option Plan which will be vested and
exercisable on or before November 13, 2004: 126,481 options held by
Bruce M. Goldberg; 66,378 options held by Paul Goldberg; 49,267 options
held by Howard L. Flanders; 42,717 options held by Rick Gordon; 8,212
options held by John Jablansky; 4,000 options held by Richard E.
Siegel; 4,000 options held by Robin L. Crandell; 1,250 options held by
Howard M. Pinsley; 750 options held by Michael W. Forman; and 303,055
options held by the executive officers and directors as a group.
Excludes outstanding stock options to purchase an aggregate of 172,635
additional shares of the Company's Common Stock issued under the
Employees', Officers', Directors' Stock Option Plan and the 2000
Nonemployee Director Stock Option Plan to the executive officers and
directors as a group that will not be vested nor exercisable as of
November 13, 2004.
(3) Includes a total of 79,500 shares of the Company's Common Stock held of
record by Bruce M. Goldberg as trustee for his sons and for his nieces
and nephew and 1,500 shares of the Company's Common Stock held of
record by Jayne Goldberg, the wife of Bruce M. Goldberg. For federal
securities law purposes only, Bruce M. Goldberg is deemed to be the
beneficial owner of these securities. Does not include 19,209 shares of
the Company's Common Stock held of record by an unrelated third party
as trustee for Bruce M. Goldberg's sons. Bruce M. Goldberg disclaims
beneficial ownership over all such securities.
(4) Includes 57,844 shares of the Company's Common Stock owned of record by
Paul Goldberg's wife, Lola Goldberg, and a total of 500 shares of the
Company's Common Stock held of record by Paul Goldberg as custodian for
two of his grandchildren. For federal securities law purposes only,
Paul Goldberg is deemed to be
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the beneficial owner of these securities. Does not include 20,000
shares of the Company's Common Stock held of record by Robin Phelan,
the daughter of Paul and Lola Goldberg, over which securities Paul and
Lola Goldberg disclaim beneficial ownership.
(5) Includes 250 shares of the Company's Common Stock owned of record by
Michael W. Forman's wife, Ann Forman. For federal securities law
purposes only, Michael W. Forman is deemed to be the beneficial owner
of these securities.
BOARD OF DIRECTORS
The Company currently has eight directors serving on its Board. The directors of
the Company and their ages and positions (if any) with the Company as of the
Record Date are as follows:
Name Class Age Position
---- ----- --- --------
Paul Goldberg (1) III 76 Chairman of the Board
Bruce M. Goldberg (1) II 49 Director, President and Chief Executive
Officer
Howard L. Flanders II 47 Director, Executive Vice President, Chief Financial
Officer and Corporate Secretary
Rick Gordon III 51 Director, Senior Vice President of Sales and Marketing
Robin L. Crandell (2)(3)(4) III 55 Director
Howard M. Pinsley (2)(3)(4) I 64 Director
Michael W. Forman (2) I 64 Director
Richard E. Siegel II 59 Director
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(1) member of the Executive Committee
(2) member of the Audit Committee
(3) member of the Compensation Committee
(4) member of the Nominating Committee
The Company's Certificate of Incorporation provides for a staggered Board,
consisting of three classes. The terms of office of Class I, II and III
directors expire in 2004, 2005 and 2006, respectively. Pursuant to Rule
4350(a)(5) of The Nasdaq Stock Market (the "NASD Rules"), as a result of the
Company having a staggered Board the Company has until its 2005 annual meeting
of shareholders to implement the requirement under NASD Rule 4350(c) that the
Board consist of a majority of independent directors. The Company will ensure
that a majority of its Board consists of independent directors no later than the
date of that annual meeting (currently, 50% of its Board consists of independent
directors).
The following is a brief resume of the Company's directors:
Paul Goldberg, one of the co-founders of the Company and the father of Bruce M.
Goldberg, has been employed by the Company in various executive capacities since
its predecessor's formation in 1964, and has served as Chairman of the Board
since 1978. Paul Goldberg was also Chief Executive Officer of the Company until
1997 and President of the Company until 1994.
Bruce M. Goldberg, the son of Paul Goldberg, joined the Company in 1988 as Vice
President, in 1990 became Executive Vice President and in 1994 became President
and Chief Operating Officer. In 1997, Bruce M. Goldberg was appointed Chief
Executive Officer of the Company. Bruce M. Goldberg has served as a director of
the Company since 1987. From 1981 until joining the Company, Bruce M. Goldberg
practiced law. Bruce Goldberg serves as a member of the board of directors of
the National Electronic Distributors Association (NEDA), a not-for-profit trade
association representing distributors of electronic components and their
manufacturer-suppliers.
Howard L. Flanders joined the Company in 1991 as its Vice President and Chief
Financial Officer, and in 1992 became a director of the Company and Corporate
Secretary. In 1997, Mr. Flanders was appointed Executive Vice President of
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the Company. Prior to joining the Company, Mr. Flanders, who is a CPA, was
Controller of Reliance Capital Group, Inc., a subsidiary of Reliance Group
Holdings, Inc., where he held various positions since 1982. Prior thereto, Mr.
Flanders was an accountant with the predecessor to the public accounting firm of
PricewaterhouseCoopers LLP.
Rick Gordon has been employed by the Company since 1986. He was originally the
General Manager of the Company's Northern California office and Northwest
Regional Manager. In 1990, Mr. Gordon became the Western Regional Vice President
and in 1992 Vice President of North American Sales and a director of the
Company. In 1994, Mr. Gordon was appointed Senior Vice President of Sales and
Marketing for the Company and currently holds that title. Before working for the
Company, Mr. Gordon was Western Regional Vice President for Diplomat
Electronics, another electronic components distributor, from 1975 until 1986.
Robin L. Crandell was Senior Vice President of Worldwide Sales and Marketing for
E2O Communications, Inc., a manufacturer of high-performance fiber optic
transmission components and modules. After E20 Communications, Inc. was acquired
by JDS Uniphase Corporation in May of 2004, Mr. Crandell became and continues to
serve as Vice President of Datacom Sales for JDS Uniphase Corporation, a
provider of optical communications technologies. Prior to joining E2O
Communications, Inc. in March 2002, Mr. Crandell was Partner and Vice President
of Sales for Phase II Technical Sales, a manufacturers sales representation firm
specializing in semiconductors. Prior to 1998, Mr. Crandell was Senior Vice
President of Sales and Marketing for Samsung Electronics, Storage System
Division, Vice President of North American Business Operations for VLSI
Technology and Vice President of North American Sales for Samsung Semiconductor.
Previously he held various sales positions at Advanced Micro Devices and was a
senior engineer with Litton Data Systems. Mr. Crandell has a BSEE degree from
California State Polytechnic University. Mr. Crandell became a director of the
Company in 1999.
Howard M. Pinsley is the President, Chief Executive Officer and a director of
Espey Mfg. & Electronics Corp., a company which has designed, developed and
manufactured high voltage applications for industry and defense since 1928. Mr.
Pinsley has been with Espey for over 20 years. Prior to joining Espey, Mr.
Pinsley was a junior accountant at an accounting firm located in New York City.
Mr. Pinsley became a director of the Company on July 31, 2002.
Michael W. Forman is President, Chief Executive Officer and a director of NELCO
Financial Services, Inc., a company that provides working capital assistance to
small to medium size companies. Prior to joining NELCO Financial Services in
March 2003, Mr. Forman was a Senior Vice President at Metro Bank. From July 1997
until July 1999, Mr. Forman was President and Chief Executive Officer and a
director of Oceanmark Bank, FSB and from August 1995 to July 1997 Mr. Forman was
President and Chief Credit Officer of Peninsula State Bank. Prior to 1995, Mr.
Forman held various positions within the banking industry for over 28 years. Mr.
Forman became a director of the Company in June 2003.
Richard E. Siegel is the Executive Vice President and a director of Supertex,
Inc., a manufacturer of high voltage complex proprietary and industry-standard
integrated circuits. Mr. Siegel has been with Supertex since 1981. Prior
thereto, Mr. Siegel worked at Signetics Corporation, Fairchild Semiconductor,
Ford Instrument, and Grumman Aircraft Corporation. Mr. Siegel has a B.S. degree
in Mechanical Engineering from the City College of New York. Mr. Siegel became a
director of the Company in 1999.
Communications with Directors
Shareholders and others who wish to communicate with employee members of the
Board may do so by submitting any such communication addressed directly to the
Board member at the Company's address stated hereinabove. Shareholders and
others who wish to communicate with nonemployee Board members may do so by
submitting such communication to the Company, Attention: Howard L. Flanders,
Corporate Secretary, at the Company's address stated hereinabove, who will
deliver any such communication to the relevant directors in accordance with
their instructions.
Meeting Attendance
The Board formally met six times during the fiscal year ended December 31, 2003,
in addition to acting five times during the year by unanimous written consent.
All Board members attended the meetings, except for one meeting in which one
member was absent, and executed the unanimous written consents. The Board
encourages, but does not require, attendance of all incumbent directors and
director nominees at the annual meeting of shareholders. At our 2003 annual
meeting, seven Board members were present.
4
The independent directors will meet in executive sessions at least twice per
year in connection with a meeting of the Board of Directors.
Certain Relationships and Related Transactions
During 2003, the Company purchased product aggregating approximately $2.9
million from Supertex, Inc., a supplier of the Company where a Board member of
the Company, Richard E. Siegel, is the Executive Vice President and a director.
Despite this relationship, Mr. Siegel constitutes an independent director under
NASD Rule 4200(a)(15).
In January 2001, the Company, with the approval of the Board, entered into a
lease to rent residential space in San Jose, California from a partnership which
includes two of the Company's executive officers (Paul Goldberg and Bruce
Goldberg). The lease provides for rental payments of $4,800 per month through
January 1, 2006, the date of the expiration of the lease. In consideration of
the impact of the severe industry downturn on the Company, the partnership
reduced the monthly rent to $3,400 in 2001. Towards the end of 2002 rental
payments were increased to approximately $4,300 per month, still below the
rental amount provided for under the lease. The Company paid a total of
approximately $51,200 to this partnership during 2003.
Board Compensation
The members of the Board do not currently receive compensation from the Company
for acting in their capacity as directors of the Company nor has the Company
adopted any standard arrangement for compensating nonemployee directors of the
Company other than grants of options under the 2000 Nonemployee Director Stock
Option Plan. In addition to the 2000 Nonemployee Director Option Stock Plan, the
Company may decide in the future to further compensate directors and/or to
establish a standard cash compensation arrangement for nonemployee directors.
See "2000 Nonemployee Director Stock Option Plan."
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), 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 initial reports of ownership and reports of changes in
ownership of common stock and other equity securities of the Company. Directors,
executive officers and greater than ten percent shareholders are also required
by the SEC regulations to furnish the Company with copies of all Section 16(a)
forms they file.
To the Company's knowledge, during the fiscal year ended December 31, 2003, all
Section 16(a) filing requirements applicable to its directors, executive
officers and greater than ten percent shareholders were satisfied.
BOARD COMMITTEES
Executive Committee
The Executive Committee is comprised of Paul Goldberg and Bruce M. Goldberg.
During 2003, the Executive Committee did not meet formally, however, its members
spoke on nearly a daily basis in connection with the operations of the Company.
The Executive Committee possesses substantially all of the powers of the Board
and acts as the Board between Board meetings.
Audit Committee
The Audit Committee is currently comprised of Howard M. Pinsley, Robin L.
Crandell and Michael W. Forman, all independent directors of the Company. Mr.
Pinsley and Mr. Crandell have served on the Audit Committee since 2002 and Mr.
Forman became a member in June 2003. During the fiscal year ended December 31,
2003, the Audit Committee met five times. The Board and the Audit Committee
believe the Audit Committee's member composition satisfies the rules of The
Nasdaq Stock Market that govern audit committee composition, including the
requirement that audit committee members all be "independent directors" as that
term is defined by NASD Rule 4200(a)(15). The Audit Committee operates under a
written charter recently amended and restated by the Board in order to
incorporate certain changes
5
required by the NASD Rules. A copy of the amended and restated charter is
attached to this Proxy Statement as Exhibit A. The Audit Committee monitors and
oversees the Company's financial reporting process on behalf of the Board. It
reviews the independence of the Company's auditors and is responsible for, among
other matters, authorizing or approving the engagement of the independent
auditors for both audit services and permitted non-auditing services, the scope
of audit and non-audit assignments, related fees, the accounting principles used
in financial reporting, internal financial accounting procedures, the adequacy
of the internal control procedures, critical accounting policies, the overall
quality of the Company's financial reporting, and reviewing and approving in
advance, if appropriate, any proposed related party transactions. The Audit
Committee has established procedures for the receipt, retention and treatment of
complaints received by the Company regarding accounting, internal accounting
controls or auditing matters, and for the confidential, anonymous submission by
Company employees of concerns regarding questionable accounting or auditing
matters or other Company-related matters. The procedures for submission and
investigation of communications regarding accounting and auditing matters and
other Company-related matters are posted on our web site, www.allamerican.com.
This document is also available in print upon written request. Such written
request should be sent to the Company, Attention: Chief Financial Officer, at
the Company's address stated hereinabove. The Board has determined that Mr.
Pinsley, who as noted above is independent as that term is used in Item
7(d)(3)(iv) of Schedule 14A under the Exchange Act, is an audit committee
financial expert as defined in Item 401(h)(2) of Regulation S-K. See "Audit
Committee Report" below.
Compensation Committee
The Compensation Committee consists of Howard M. Pinsley and Robin L. Crandell,
two independent directors of the Company. The Compensation Committee is
responsible for determining the compensation of all executive officers of the
Company and acts as the stock option committee of the Board, administering the
Employees', Officers', Directors' Stock Option Plan. The senior management of
the Company makes all decisions with respect to the compensation (other than the
granting of stock options) of all employees other than the executive officers of
the Company. See "BOARD OF DIRECTORS." During the fiscal year ended December 31,
2003, the Compensation Committee met once and acted once by unanimous written
consent.
Nominating Committee
The Nominating Committee is currently comprised of Howard M. Pinsley and Robin
L. Crandell, both independent directors of the Company. The Nominating Committee
was formed in September 2004 and, accordingly, has not yet held any meetings.
The Nominating Committee operates under a written charter approved by the Board
and consistent with such charter will evaluate and propose nominees for the
Board considering the minimum qualifications required of Board members as set
forth in the charter. A copy of the Nominating Committee charter is available on
our web site, www.allamerican.com. The charter requires that all members of the
Nominating Committee be "independent directors" as that term is defined by NASD
Rule 4200(a)(15). The Nominating Committee will consider shareholder
recommendations for nominees for membership on the Board. Such recommendations
may be submitted to the Company, Attention: Howard L. Flanders, Corporate
Secretary, at the Company's address stated hereinabove. The Corporate Secretary
will present such recommendations to the Nominating Committee. There are no
specific, minimum qualifications that the Nominating Committee believes must be
met by nominees recommended by the Nominating Committee and the Nominating
Committee will utilize the same criteria in evaluating nominees recommended by
the Nominating Committee and nominees recommended by shareholders. In evaluating
candidates for nomination to the Board, the charter of the Nominating Committee
requires the Nominating Committee to consider the contribution that a candidate
would be expected to make to the Board and the Company based upon the current
composition and needs of the Board and the candidate's expertise, integrity,
prior experience, education, relationships and other factors that the Board
determines are relevant. The Nominating Committee will identify potential
candidates through recommendations from the Company's officers, directors,
shareholders and other appropriate third parties. Although the Company is not
currently paying a fee to any third party to identify or evaluate potential
nominees, there is no guarantee that the Nominating Committee will not engage a
third party search firm in the future, which engagement is authorized by the
Nominating Committee charter.
AUDIT COMMITTEE REPORT
The Audit Committee of the Company's Board (the "Audit Committee") is currently
comprised of Howard M. Pinsley, Robin L. Crandell and Michael W. Forman, all
independent directors of the Company. Mr. Pinsley and Mr. Crandell
6
have served on the Audit Committee since 2002 and Mr. Forman became a member in
June 2003. The Audit Committee operates under a written charter adopted and
amended and restated by the Board in order to incorporate the changes required
by the Sarbanes-Oxley Act, SEC rules and rules of The Nasdaq Stock Market. The
Board and the Audit Committee believe that the Audit Committee's current member
composition satisfies the rules of NASD that govern audit committee composition,
including the requirement that audit committee members all be "independent
directors" as that term is defined by NASD Rule 4200(a)(15).
The Audit Committee holds discussions with management and the independent
accountants regarding current audit activities. Management has the primary
responsibility for the Company's financial statements, systems of internal
controls and the financial reporting process. The independent accountants are
responsible for performing an independent audit of the Company's consolidated
financial statements in accordance with generally accepted accounting standards
and to issue a report thereon. The Audit Committee's responsibility is to
monitor and oversee these processes.
The Audit Committee authorized and approved in 2003 the appointment of the
Company's independent accountants, subject to shareholder ratification. The
Company's independent accountants also provided to the Audit Committee the
written disclosure and letter required by Independence Standards Board Standard
No. 1 ("Independence Discussions with Audit Committees"), and the Audit
Committee discussed with the independent accountants that firm's independence
from the Company and its management.
Management represented to the Audit Committee that the Company's consolidated
financial statements were prepared in accordance with generally accepted
accounting principles in the United States, and the Audit Committee has reviewed
and discussed the consolidated financial statements with management and the
independent accountants. The Audit Committee also discussed with the independent
accountants matters required to be discussed by Statement on Auditing Standards
No. 61 ("Communication with Audit Committees"). Based on these discussions and
reviews, the Audit Committee recommended that the Board include the audited
consolidated financial statements in the Company's Annual Report on Form 10-K
for the year ended December 31, 2003 for filing with the SEC.
The Audit Committee has considered whether the provision of the non-audit
services described in "Tax Fees" below is compatible with maintaining Lazar
Levine & Felix LLP's independence.
Howard M. Pinsley (Chair)
Robin L. Crandell
Michael W. Forman
Principal Accounting Firm Fees and Services
The Company and its Audit Committee are committed to ensuring the independence
of its independent auditor. As such, it is the Company's policy that all
engagements of the Company's independent auditor be pre-approved by the Audit
Committee.
Audit Fees. The aggregate fees billed by the Company's accounting firm, Lazar
Levine & Felix LLP, for professional services rendered for the audit of the
Company's annual financial statements for the years ended December 31, 2003 and
December 31, 2002 and the review of the financial statements included in the
Company's Forms 10-Q for each year were $170,000 and $136,000, respectively.
Audit Related Fees. There were no fees billed by Lazar Levine & Felix LLP for
2003 and 2002 for assurance and related services that are reasonably related to
the performance of the audit or review of the Company's financial statements
that are not reported under Audit Fees above.
Tax Fees. The aggregate fees billed in 2003 and 2002 for professional services
rendered by Lazar Levine & Felix LLP for tax compliance, tax advice, and tax
planning were $75,000 and $47,000, respectively. In 2003, all such tax services
were pre-approved by the Audit Committee. In 2002, prior to the effective date
of certain amendments to the Exchange Act and certain SEC rules and prior to the
Company's adoption of its amended and restated audit committee charter, such tax
services were not pre-approved by the Company's Audit Committee.
All Other Fees. There were no fees billed for services rendered by Lazar Levine
& Felix LLP for 2003 and 2002, other than the services described above.
7
EXECUTIVE OFFICERS OF THE COMPANY
The Company currently has five executive officers. Each officer serves at the
discretion of the Board; however, as of the date of this Proxy Statement, Paul
Goldberg, Bruce M. Goldberg, Howard L. Flanders and Rick Gordon have employment
agreements with the Company. See "EXECUTIVE COMPENSATION-Employment Agreements."
The executive officers of the Company and their ages and positions as of the
Record Date are as follows:
Name Age Position
---- --- --------
Paul Goldberg 76 Chairman of the Board
Bruce M. Goldberg 49 President and Chief Executive Officer
Howard L. Flanders 47 Executive Vice President, Chief Financial Officer and Corporate Secretary
Rick Gordon 51 Senior Vice President of Sales and Marketing
John Jablansky 47 Senior Vice President of Product Management and Operations
John Jablansky has been employed by the Company since 1981. He was originally in
sales and since 1982 has worked in various capacities within the product
management department. In 1997, Mr. Jablansky was appointed Senior Vice
President of Product Management of the Company and in 2001 became Senior Vice
President of Product Management and Operations. Prior to joining the Company,
Mr. Jablansky was employed by Milgray Electronics, another electronic components
distributor.
For a brief resume of the Company's executive officers other than John
Jablansky, see "BOARD OF DIRECTORS."
Code of Ethics
We have a Code of Ethics and Business Conduct that applies to all directors,
officers and employees, including our principal executive officers, our
principal financial and accounting officer, and our controller. You can find our
Code of Ethics and Business Conduct on our web site, www.allamerican.com. We
will post any amendments to the Code of Ethics and Business Conduct, and any
waivers that are required to be disclosed by the rules of the SEC or any other
regulatory agency, on our web site. This document is also available in print
upon written request. Such written request should be sent to the Company,
Attention: Chief Financial Officer, at the Company's address stated hereinabove.
8
EXECUTIVE COMPENSATION
The following table sets forth information regarding the compensation earned
during each of the fiscal years ended December 31, 2003, 2002, and 2001, by the
Chief Executive Officer and each of the other four most highly compensated
executive officers of the Company whose total annual salary and bonus exceeded
$100,000:
Summary Compensation Table
--------------------------
Long-term
Compensation
Annual Compensation Awards
-------------------------------------- ---------------
Other Annual Securities All Other
Compensation Underlying Compensation
Name and Principal Position Year Salary($) Bonus($) ($)(1) Options(#) ($)(2)
--------------------------- ----- ---------- --------- ---------------- --------------- ----------
Paul Goldberg....................... 2003 243,000 - - 41,260 48,000 (3)
Chairman of the Board 2002 243,000 - - - 10,000
2001 278,000 - - - 17,000
Bruce M. Goldberg................... 2003 339,000 - - 58,270 26,000
President and Chief 2002 339,000 - - - 26,000
Executive Officer 2001 388,000 - - - 32,000
Howard L. Flanders.................. 2003 181,000 - - 30,890 12,000
Executive Vice President and 2002 181,000 - - - 18,000
Chief Financial Officer 2001 207,000 - - - 22,000
Rick Gordon......................... 2003 183,000 - - 22,390 4,000
Senior Vice President of 2002 183,000 - - - 15,000
Sales and Marketing 2001 210,000 - - - 19,000
John Jablansky...................... 2003 174,000(4) - - 6,040 1,000
Senior Vice President of Product 2002 174,000(4) - - - 1,000
Management and Operations 2001 191,000(4) - - - 4,000
---------------
(1) Other annual compensation for each of the named executive officers in
2003, 2002 and 2001 did not exceed the lesser of $50,000 or 10% of the
total of annual salary and bonus reported for such named executive
officer.
(2) All other compensation includes Company contributions to life insurance
policies, where the Company is not the beneficiary, to the Deferred
Compensation Plans and to the 401(k) Plan of the Company. See hereinbelow
and "Deferred Compensation Plans for Executive Officers and Key
Employees" and "401(k) Plan."
(3) Includes a distribution of $38,000 under the terms of the 1998 Deferred
Compensation Plan of the Company. See "Deferred Compensation Plans for
Executive Officers and Key Employees."
(4) Includes commissions paid in the aggregate amounts of $68,000, $68,000
and $71,000 in 2003, 2002 and 2001, respectively.
The Company pays for a $550,000 universal life insurance policy on the life of
Paul Goldberg with benefits payable to his wife, which had an annual premium in
2003 of $7,668. Pursuant to the terms of an employment agreement with Bruce M.
Goldberg, the Company makes annual payments, currently in the amount of $21,995,
to Bruce M. Goldberg to cover the annual premium on a $1,000,000 whole life
insurance policy (the "Whole Life Policy") on the life of Bruce M. Goldberg. The
Company is obligated to continue, for the duration of Bruce M. Goldberg's
employment with the Company, to pay the annual premium to Bruce M. Goldberg for
the Whole Life Policy. In addition, pursuant to the terms of an insurance
agreement effective as of January 1, 1993 with each of Howard L. Flanders and
Rick Gordon, beginning in 1993 the Company had advanced substantially all of the
premiums for $1,000,000 flexible premium life insurance policies owned by each
of Howard L. Flanders and Rick Gordon. Under the respective insurance agreement
the
9
Company's obligations to make premium payments in connection with Howard L.
Flanders' and Rick Gordon's policies lasted for a maximum of ten years from the
time the insurance policies were acquired in 1993. This obligation terminated in
January 2003. The Company's premium advances were secured by a collateral
assignment of the cash surrender value and death benefit of each of the policies
subject to a five year vesting period which commenced on January 1, 1998. On
January 1, 2003 (the tenth anniversary of the insurance agreements), all
advances were deemed cancelled, the security interests fully released and the
cash surrender value and other benefits of their respective insurance policies
were fully vested in the employees.
Option Grants in Last Fiscal Year
The following table shows all grants of options to the named executive officers
of the Company during the fiscal year ended December 31, 2003. Pursuant to SEC
rules, the table also shows the value of the options granted at the end of the
option terms (as indicated below) if the price of the Company's stock was to
appreciate annually by 0%, 5% and 10%, respectively. There is no assurance that
such stock price will appreciate at the rates shown in the table. All of the
options set forth in the table are stock options issued pursuant to the Option
Plan. The Company does not have a plan whereby tandem stock appreciation rights
("SARS") are granted. See "Employees', Officers', Directors' Stock Option Plan"
hereinbelow.
Potential Realizable
Closing Value at Assumed
Number of % of Market Annual Rates of Stock
Securities Total Options Price on Price Appreciation
Underlying Granted to Exercise Date of for Option Term
Options Employees in Price Grant Expiration --------------------------
Name Granted (#) Fiscal Year ($/Share) ($/Share)(1) Date 0% ($) 5% ($) 10% ($)
------------------- -------------- -------------- ----------- ------------ --------- -------- -------- -------
Paul Goldberg 41,260(2) 12.7% 2.11 2.00 04/07/07 - 13,245 33,759
Bruce M. Goldberg 58,270(2) 17.9% 1.92 2.00 04/07/07 4,662 29,777 58,748
Howard L. Flanders 30,890(2) 9.5% 1.92 2.00 04/07/07 2,471 15,785 31,143
Rick Gordon 22,390(2) 6.9% 1.92 2.00 04/07/07 1,791 11,442 22,574
John Jablansky 6,040(2) 1.9% 1.92 2.00 04/07/07 483 3,087 6,090
(1) For purposes of and as provided under the Option Plan, "fair market value"
on the date of grant of any option is the average of the market price of a
share of Common Stock for each of the seven (7) consecutive business days
preceding such date; the market price on each such day is the closing sales
price of a share of Common Stock on The Nasdaq Stock Market on such day.
The Compensation Committee of the Company believes this calculation more
accurately reflects "fair market value" of the Company's Common Stock on
any given day as compared to simply using the closing market price on the
date of grant. As a result, the closing market price on the date of grant
at times may be different than the exercise price per share.
(2) These options vest 30% on October 8, 2004, 30% on April 8, 2005 and 40% on
April 8, 2006.
10
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-Ended Option
Values
The following table sets forth information concerning the aggregate option
exercises in the fiscal year ended December 31, 2003 and the value of
unexercised stock options as of December 31, 2003 for the individual executive
officers named in the Summary Compensation Table:
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options At Options At
Shares FY-End(#) FY-End ($)
Acquired on Value Exercisable/ Exercisable/
Exercise(#) Realized($) Unexercisable Unexercisable(1)
-----------------------------------------------------------------------------
Paul Goldberg................ - - 68,000 (E) $ 12,825 (E)
- - 43,260 (U) 96,548 (U)
Bruce M. Goldberg............ - - 105,000 (E) 14,184 (E)
- - 63,270 (U) 150,969 (U)
Howard L. Flanders........... - - 57,000 (E) 28,368 (E)
- - 38,890 (U) 85,244 (U)
Rick Gordon.................. - - 41,000 (E) 9,456 (E)
- - 26,390 (U) 59,011 (U)
John Jablansky............... - - 5,000 (E) 3,782 (E)
- - 8,040 (U) 946 (U)
--------------
(1) Value is based upon the difference between the exercise price of the
options and the last reported sale price of the Common Stock on The
Nasdaq Stock Market on December 31, 2003 (the Company's fiscal year
end).
Compensation Committee Report
The Compensation Committee is responsible for recommending to the Board the
compensation of the executive officers, including annual base salaries, cash and
non-cash bonuses, stock ownership plans, retirement plans and other benefits.
With respect to the compensation of the executive officers other than the Chief
Executive Officer, the Compensation Committee makes its recommendations after
consulting with the Chief Executive Officer. In addition, the Compensation
Committee administers the Employees', Officers', Directors' Stock Option Plan
and the Company's deferred compensation plans and will administer all future
benefit plans of the Company. The policies of the Compensation Committee and the
Board with respect to the compensation of the executive officers is intended to
establish levels of annual compensation that are consistent with the Company's
annual and long-term goals and to reward individuals for corporate performance
as well as individual achievements. In part, the Compensation Committee believes
in using incentives such as annual incentive cash bonuses and stock option
grants and deferred compensation plans as a means of motivating its executive
officers to perform at the highest levels possible and to tie directly the
compensation of the Company's executive officers to the operating performance of
the Company. The Compensation Committee also takes into consideration the
compensation of executive officers at companies similar in size to the Company
and at other companies within the same industry as the Company.
During fiscal year 2003 executive officers named in the Summary Compensation
Table were compensated pursuant to employment agreements entered into prior to
2003 or previously existing compensation arrangements. See "Employment
Agreements" hereinbelow.
Howard M. Pinsley
Robin L. Crandell
11
Employees', Officers', Directors' Stock Option Plan
In 1987, the Company established an Employees', Officers', Directors' Stock
Option Plan (as previously amended and restated, the "Option Plan"). Subsequent
thereto certain amendments to and a restatement of the Option Plan have been
adopted by the Board and approved by the shareholders of the Company. The Option
Plan may be further modified or amended by the Board, but certain modifications
and amendments are subject to approval by the Company's shareholders. The Option
Plan provides for the granting to key employees of both "incentive stock
options," within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code") and "nonqualified stock options" ("nonqualified
stock options" are options which do not comply with Section 422 of the Code) and
for the granting to nonemployee directors and independent contractors associated
with the Company of nonqualified stock options. Unless earlier terminated, the
Option Plan will continue in effect through April 18, 2009, after which it will
expire and no further options could thereafter be granted under the Option Plan.
The expiration of the Option Plan, or its termination by the Board, will not
affect any options previously granted and then outstanding under the Option
Plan. Such outstanding options would remain in effect until they have been
exercised, terminated or have expired. A maximum of 1,100,000 shares of the
Company's Common Stock have been reserved for issuance upon the exercise of
options granted under the Option Plan, subject to any adjustments required upon
changes in capitalization to prevent dilution or enlargement of the shares
issuable pursuant to the Option Plan by reason of any stock split, stock
dividend, combination of shares, recapitalization or other change in the capital
structure of the Company.
The Option Plan is administered by the Compensation Committee comprised of two
or more independent directors appointed by the Board from among its members. Any
member of the Compensation Committee may be removed at any time either with or
without cause by action of the Board and a vacancy on the Compensation Committee
due to any reason can be filled by the Board. The current members of the
Compensation Committee are two of the independent directors of the Company,
Howard M. Pinsley and Robin L. Crandell. Subject to the express limitations of
the Option Plan, the Compensation Committee has authority, in its discretion, to
interpret the Option Plan, to adopt, prescribe, amend and rescind rules and
regulations as it deems appropriate concerning the holding of its meetings and
administration of the Option Plan, to determine and recommend persons to whom
options should be granted, the date of each option grant, the number of shares
of Common Stock to be included in each option, any vesting schedule, the option
price and term (which in no event will be for a period more than ten years from
the date of grant) and the form and content of agreements evidencing options to
be issued under the Option Plan.
Options may be currently granted under the Option Plan to any key employee or
nonemployee director or prospective key employee or nonemployee director
(conditioned upon, and effective not earlier than, his or her becoming an
employee or director) of or independent contractor associated with the Company
or its subsidiaries. However, as required by the Code, nonemployee directors and
independent contractors are only eligible to receive nonqualified stock options.
In determining key employees to whom options will be granted, the Compensation
Committee takes into consideration the key employee's present and potential
contribution to the success and growth of the Company's business and other such
factors as the Compensation Committee may deem proper or relevant in its
discretion including whether such person performs important job functions or
makes important decisions for the Company, as well as the judgment, initiative,
leadership and continued efforts of eligible participants. Employees who are
also officers or directors of the Company or its subsidiaries will not by reason
of such offices be ineligible to receive options. However, no member of the
Compensation Committee is eligible to receive options under the Option Plan and
it is currently contemplated that nonemployee directors would be granted options
under the Director Stock Option Plan described below and not the Option Plan.
The Compensation Committee has not adopted formal eligibility limitation
criteria. Therefore, quantification of the current number of employees,
nonemployee directors and independent contractors that would technically be
eligible for participation is not currently readily determinable.
The exercise price for all options granted under the Option Plan shall not be
less than the fair market value of the Company's Common Stock on the date of
grant (or, in the case of incentive stock options, 110% of the fair market value
if the beneficiary of the grant beneficially owns 10% or more of the outstanding
shares of the Company's Common Stock). For purposes of the Option Plan, fair
market value on the date of grant of any option is the average of the "market
price" of a share of Common Stock for each of the seven (7) consecutive business
days preceding such date. The "market price" on each such day shall be (i) if
the Common Stock is listed on a securities exchange (including The Nasdaq Stock
Market), the closing sales price on such exchange on such day or, in the absence
of reported sales on such day, the mean between the reported closing bid and
asked prices on such exchange on such day, or (ii) if the Common
12
Stock is not listed on a securities exchange (including The Nasdaq Stock
Market), the mean between the closing bid and asked prices as quoted by the
National Association of Securities Dealers, Inc. through the National
Association of Securities Dealers Automated Quotation System ("NASDAQ") for such
day; provided, however, that, if there are no such quotations or if it is
determined that the fair market value is not properly reflected by such NASDAQ
quotations or the Common Stock is not traded on an exchange or over the counter,
fair market value shall be determined by such other method as the Compensation
Committee determines to be reasonable. Notwithstanding the foregoing, if on, or
within ten (10) days prior to, the date of grant of any options a registration
statement filed by the Company with the SEC in connection with a public offering
of Common Stock becomes effective, the fair market value of a share of such
Common Stock shall be the public offering price per share of Common Stock being
offered pursuant to such offering.
Except as may be specifically limited by the terms of the Option Plan, the
granting of options is made at the sole discretion of the Compensation
Committee. Further, the aggregate fair market value of the Company's Common
Stock (determined at the date of the option grant) for which an employee may be
granted incentive stock options which first become exercisable in any calendar
year under the Option Plan may not exceed $100,000. Options granted pursuant to
the Option Plan are not transferable during an optionee's lifetime.
The term of and any vesting schedule (whether the option will be exercisable
immediately, in stages or otherwise, or the vesting will be based upon any
condition such as the operating performance of the Company or other events such
as a change in control) for an option granted under the Option Plan is
established by the Compensation Committee, but the term may not be more than ten
years from the date of grant of the option, except that, in the case of a person
receiving an incentive stock option who at such time owns the Company's Common
Stock representing more than 10% of the Company's Common Stock outstanding at
the time the option is granted, the term of such incentive stock option shall
not exceed five years from the date of grant of the option. In general, options
will not be exercisable after the expiration of their term. Furthermore, the
Compensation Committee has the authority and discretion to determine the time
frame in which an optionee has to exercise his options (subject to the ten-year
limitation from date of grant) in the event of his termination of employment due
to death, disability, termination without cause, retirement, voluntarily leaving
the Company or a change in control.
As of the Record Date, a total of 985,546 options were granted and had not
expired or been forfeited, of which 221,466 were exercised and 764,080 options
were outstanding (of which 463,440 options were held by executive officers and
directors of the Company as a group and 233,600 options are presently
exercisable). These options, which are held by 133 persons, are exercisable at
prices ranging from $1.92 per share to $14.32 per share and are exercisable
through various expiration dates from 2005 to 2008.
2000 Nonemployee Director Stock Option Plan
In June 2000, the Company established the 2000 Nonemployee Director Stock Option
Plan, as amended (the "Director Stock Option Plan"). The Director Stock Option
Plan provides for awards of options to purchase shares of Common Stock of the
Company to nonemployee directors of the Company. Under the Director Stock Option
Plan, on or about the day of each nonemployee director's initial election to the
Company's Board, each nonemployee director will be awarded nonqualified stock
options to purchase at least 1,500 shares of the Company's Common Stock, but not
to exceed a maximum of 15,000 shares, at the fair market value of the Company's
Common Stock on the date on which the option is granted. The Board will
determine the number of options to be granted to a nonemployee director upon his
or her initial election as it deems necessary or advisable and in the best
interests of the Company in order to attract and obtain outstanding and highly
qualified candidates to serve on the Company's Board. On the date of the
Company's annual meeting of shareholders occurring later than 12 months after a
nonemployee director's initial election, the Director Stock Option Plan provides
such nonemployee director (subject to his or her re-election if up for
re-election at such annual meeting) will be automatically awarded additional
options to purchase 1,000 shares of Common Stock at the fair market value of the
Company's Common Stock on the date on which the option is granted. An aggregate
of 75,000 shares of the Company's Common Stock have been reserved for issuance
under the Director Stock Option Plan. As of the Record Date, a total of 13,000
options were granted and had not expired or been forfeited, of which 750 were
exercised and 12,250 options were outstanding. These options, which are held by
4 persons, have exercise prices ranging from $1.96 per share to $10.53 per share
(based on fair market value at date of grant) and vest in 50% annual increments
over a two-year period and are exercisable over a ten-year period. Under certain
circumstances, including death, permanent disability, retirement or a change in
control, vesting is accelerated and the options become fully exercisable.
13
Registration Statements
The Company has filed registration statements on Form S-8 with the SEC in order
to register all of the shares of Common Stock issuable under the Company's two
option plans. So long as such registration statements remain effective under the
Securities Act of 1933, as amended (the "Act"), shares of Common Stock issued
upon the exercise of outstanding options under the option plans will be
immediately and freely tradable without restriction under the Act, subject to
applicable volume limitations, if any, under Rule 144 and, in the case of
executive officers and directors of the Company, Section 16 of the Exchange Act.
Equity Compensation Plan Information
The following table sets forth information about our Common Stock that may be
issued upon exercise of options, warrants and rights under all of our equity
compensation plans as of December 31, 2003, including the Option Plan and the
Director Stock Option Plan. Our stockholders have approved both of these plans.
Number of Securities To Weighted Average Number of Securities Remaining Available for
Be Issued Upon Exercise Exercise Price of Future Issuance Under Equity Compensation
of Outstanding Options, Outstanding Options, Plans (Excluding Securities
Plan Category Warrants And Rights Warrants and Rights Reflected in the First Column)
----------------------------- ------------------------- --------------------- --------------------------------------------
Equity compensation plans
approved by stockholders 811,160 $4.75 258,194
Equity compensation plans
not approved by stockholders N/A N/A N/A
Deferred Compensation Plans for Executive Officers and Key Employees
Effective January 1, 1988, the Company established a deferred compensation plan
(the "1988 Deferred Compensation Plan") for executive officers and key employees
of the Company. The employees eligible to participate in the 1988 Deferred
Compensation Plan (the "Participants") are chosen at the sole discretion of the
Board, upon a recommendation from the Compensation Committee. In 2003, the 1988
Deferred Compensation Plan was amended to allow a Participant to elect to
receive a lump sum benefit, providing such Participant has attained at least the
age of 65 and has at such time 25 or more years of service with the Company.
Pursuant to the 1988 Deferred Compensation Plan, commencing on a Participant's
retirement date, he or she will receive an annuity for ten years, unless he or
she has elected to receive a lump sum benefit as described above. The amount of
the annuity shall be computed at 30% of the Participant's salary, as defined.
Any Participant with less than ten years of service to the Company as of his or
her retirement date will only receive a pro rata portion of the annuity.
Retirement benefits paid under the 1988 Deferred Compensation Plan will be
distributed monthly. The Company paid benefits under this plan of approximately
$53,600 during 2003, $38,000 of which was paid to an executive officer as a lump
sum election. The maximum annuity benefit payable to a Participant (including
each of the named executive officers) under the 1988 Deferred Compensation Plan
is presently $30,000 per annum.
During 1996, the Company established a second deferred compensation plan (the
"1996 Deferred Compensation Plan") for executives of the Company. The executives
eligible to participate in the 1996 Deferred Compensation Plan are chosen at the
sole discretion of the Board upon a recommendation from the Compensation
Committee. The Company may make contributions each year in its sole discretion
and is under no obligation to make a contribution in any given year. For the
year 2003, no contributions were made to the plan. Participants in the plan will
vest in their plan benefits over a ten-year period. If the participant's
employment terminates due to death, disability or a change in control of
management, he or she will vest 100% in all benefits under the plan. Retirement
benefits will be paid, as selected by the participant, based on the sum of the
contributions made and any additions based on investment gains. One executive
officer (John Jablansky) of the Company has been chosen as a participant in the
1996 Deferred Compensation Plan.
401(k) Plan
The Company maintains a 401(k) plan (the "401(k) Plan"), which is intended to
qualify under Section 401(k) of the Internal Revenue Code. All full-time
employees of the Company are eligible to participate in the 401(k) Plan after
completing 90 days of employment. During 2003, each eligible employee could
elect to contribute to the 401(k) Plan, through payroll deductions, up to 100%
of his or her salary, limited to $12,000 in 2003. The Company's 401(k) Plan
provides for discretionary matching contributions by the Company. During 2001
and in prior years, the Company's 401(k) Plan provided for standard matching
contributions by the Company in the amount of 25% on the first 6% contributed of
each participating employee's salary. No matching contributions were made by the
Company for 2003.
14
Employment Agreements
The Goldberg Agreements
The Company has employment agreements with each of Paul Goldberg, its Chairman
of the Board, and Bruce M. Goldberg, its Chief Executive Officer and President
(collectively and as amended the "Goldberg Agreements"). Effective January 1,
2000, the term of each of the Goldberg Agreements was extended until December
31, 2005, with automatic additional successive one-year renewal periods
thereafter unless terminated in writing by the Company or the employee at least
60 days prior to the expiration of the then current term and subject, in the
case of Paul Goldberg, to earlier termination in the event that Paul Goldberg
elects to exercise his right to retire as hereinafter described. Each of the
Goldberg Agreements provides for a base salary, in the case of Paul Goldberg, of
$291,167 per annum effective January 1, 2000, and, in the case of Bruce M.
Goldberg, of $391,723 per annum effective January 1, 1999, subject to an annual
increase equal to the greater of 4% per annum or the increase in the cost of
living. During 2001, 2002 and 2003, Bruce M. Goldberg and Paul Goldberg
voluntarily agreed to reductions in the base salary that they would otherwise
then have been entitled to receive. Under the Goldberg Agreements, Paul Goldberg
and Bruce M. Goldberg are entitled to receive, in the case of Paul Goldberg, an
annual cash bonus equal to 3% and, in the case of Bruce M. Goldberg, an annual
cash bonus in 1999 equal to 4% and in 2000 and thereafter 5% of the Company's
pre-tax income, before nonrecurring and extraordinary charges, in excess of
$1,000,000 in any calendar year. Such annual bonus compensation for each of Paul
Goldberg and Bruce M. Goldberg is limited in any year to an amount no greater
than two times his respective base salary for the applicable year. In addition,
upon a change in control, all options granted by the Company to Paul Goldberg
and Bruce M. Goldberg automatically vest.
Under the Goldberg Agreement for Paul Goldberg, as amended, he is able to elect,
in his sole discretion, to retire at any time (the "Retirement Election"). Upon
the earlier to occur of the Retirement Election or at the expiration of the term
of his Goldberg Agreement, the Company will be obligated to pay Paul Goldberg
(in addition to any other compensation he may be entitled to upon termination),
and his spouse upon his death, a retirement benefit of $100,000 per annum until
the later of the death of Paul Goldberg or his spouse, provide him and his
spouse, without cost, until the later of their respective deaths, at least the
same level of medical and health insurance benefits as was provided prior to his
retirement and continue to pay the premiums on the life insurance policy
insuring his life as described under "Summary Compensation Table" hereinabove.
The Goldberg Agreements also provide certain additional benefits to each of Paul
Goldberg and Bruce M. Goldberg, including participation in the Company benefit
plans, use of or payment for an automobile and, in the case of Bruce M.
Goldberg, continuance in the event of disability of all his respective
compensation and other benefits for two years and the payment of the annual
premium on the Whole Life Policy as described under "Summary Compensation Table"
above.
The Goldberg Agreements, also provide that, in the event of change in control
(as defined) of the Company, each of Paul Goldberg and Bruce M. Goldberg shall
have the option in his sole discretion to terminate his Goldberg Agreement. In
such event, Paul Goldberg would be entitled to elect (in lieu of electing to
continue to receive some or all of the compensation, payments and benefits as
and when due under his Goldberg Agreement) to receive a lump sum payment equal
to the sum of (i) Paul Goldberg's compensation due through the greater of the
end of the term of his Goldberg Agreement or three years after the change in
control, (ii) the present value (assuming a certain discount rate and life
expectancy) of the retirement payments payable to Paul Goldberg commencing from
the later of the end of the term or three years after the change in control
until his death, (iii) an amount sufficient to pay, until the later of his or
his spouse's death, the premium for at least the same level of health insurance
benefits as was provided before the change in control and (iv) an amount
sufficient to pay until his death, the premiums on the life insurance policy
insuring his life as described under "Summary Compensation Table" above.
Similarly, under the Goldberg Agreement for Bruce M. Goldberg, in the event of a
change in control and Bruce M. Goldberg's election to terminate his Goldberg
Agreement, Bruce M. Goldberg at his option will be entitled to elect to receive
a lump sum payment equal to his compensation due through the later of the end of
the term of his Goldberg Agreement or three years after the change in control or
for such period to continue to receive such compensation as and when due under
the Goldberg Agreement. The Goldberg Agreements (as well as the employment
agreements for each of Howard L. Flanders and Rick Gordon discussed below) also
provide for reimbursement of, and a gross-up for, any federal tax liability
imposed pursuant to Section 4999 or Section 280G (or any successor provisions)
of the Internal Revenue Code of 1986, as amended, and any similar state or local
taxes, as a result of a change in control payment, consideration and/or benefit
made or provided by the Company pursuant to such employment agreements.
15
The Flanders/Gordon Agreements
Effective as of January 1, 2000, the Company entered into a new employment
agreement with Howard L. Flanders, its Executive Vice President, Chief Financial
Officer and Corporate Secretary (the "Flanders Agreement"), and Rick Gordon, its
Senior Vice President of Sales and Marketing (the "Gordon Agreement" and
collectively with the Flanders Agreement, the "Flanders/Gordon Agreements"). The
Flanders/Gordon Agreements each have an initial term through December 31, 2003,
with automatic additional successive one-year renewal periods thereafter unless
terminated in writing by the Company or the employee at least 60 days prior to
expiration of the then current term. They provide for a base salary, effective
as of January 1, 2000, of $215,000 per annum for Mr. Flanders and $218,000 per
annum for Mr. Gordon, subject to an annual increase commencing January 1, 2001,
equal to the greater of 5% per annum or the increase in the cost of living.
During 2001, 2002 and 2003, Howard L. Flanders and Rick Gordon voluntarily
agreed to reductions in the base salary that they would otherwise then have been
entitled to receive. Under the Flanders/Gordon Agreements, Messrs. Gordon and
Flanders are entitled to receive an annual cash bonus equal to 2% of the
Company's pre-tax income, before nonrecurring and extraordinary charges, in
excess of $1,000,000 in any calendar year. Such annual cash bonus compensation
is limited in any year to an amount no greater than such executive's base salary
for the applicable year. The Flanders/Gordon Agreements also provide for certain
additional benefits, including participation in the Company benefit plans, use
of or payment for an automobile and continuance of all their respective
compensation and other benefits for two years in the event of disability.
Further, if Mr. Gordon or Mr. Flanders were to be terminated without cause
(which includes requiring employee to perform duties not commensurate with his
offices or which differ materially from duties that presently exist or, after a
change in control, changing the location where employee is based), he is
entitled to receive severance benefits equal to the greater of two-years
compensation or the remainder of the compensation due under the applicable
Flanders/Gordon Agreement. Additionally, under the Flanders/Gordon Agreements,
the Company has paid premiums under a life insurance policy for each of Messrs.
Gordon and Flanders with the beneficiary to be as designated by Mr. Gordon or
Mr. Flanders, respectively, as described under "Summary Compensation Table"
above. The Flanders/Gordon Agreements also provide that, in the event of a
change in control (as defined) of the Company, each of Mr. Gordon and Mr.
Flanders would have the option in his sole discretion to terminate the
applicable Flanders/Gordon Agreement. In such event, and subject to remaining an
employee of the Company (or its successor) for 180 days after the change in
control (other than as a result of his death, disability or termination without
cause), Mr. Gordon or Mr. Flanders, at his option, is entitled to elect to
receive a lump-sum payment equal to his respective compensation due through the
later of the end of the term of the applicable Flanders/Gordon Agreement or two
years after the change in control or for such period to continue to receive such
compensation as and when due under such Flanders/Gordon Agreement. In addition,
upon a change in control, all options granted by the Company to Messrs. Flanders
and Gordon automatically vest. The Flanders/Gordon Agreements also contain
covenants not to compete, nonsolicitation and nondisclosure provisions.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee of the Board currently consists of Howard M. Pinsley
and Robin L. Crandell, both being independent directors of the Company. See
"BOARD COMMITTEES - Compensation Committee." Since January 1, 2003 to the date
hereof, none of the members of the Compensation Committee had any relationship
with the Company requiring disclosure under Item 404 of Regulation S-K.
16
STOCK PRICE PERFORMANCE CHART
The following graph compares the five-year cumulative total returns* of the
Company's Common Stock with the NASDAQ Market Index and the Electronic Parts and
Equipment Peer Group Index (SIC Code 5065). The stock price performance shown
below is not necessarily indicative of future price performance.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG THE COMPANY, THE ELECTRONIC PARTS AND EQUIPMENT
PEER GROUP INDEX AND NASDAQ MARKET INDEX*
(GRAPHICAL REPRESENTATION OF DATA BELOW)
FISCAL YEARS ENDED DECEMBER 31
-----------------------------------------------------------
1998 1999 2000 2001 2002 2003
------ ------ ------ ------ ------ ------
COMPANY 100.00 73.08 221.54 98.46 51.69 109.54
THE ELECTRONIC PARTS AND
EQUIPMENT PEER GROUP INDEX 100.00 119.80 88.70 78.27 38.27 67.41
NASDAQ MARKET INDEX 100.00 176.37 110.86 88.37 61.64 92.68
-----------------------
*Assumes the investment of $100 on January 1, 1999 and reinvestment of dividends
(no dividends were declared on the Company's Common Stock during the period).
PROPOSALS
ITEM 1. ELECTION OF DIRECTORS
It is intended that the votes will be cast pursuant to the accompanying proxy
for the nominees named below, unless otherwise directed. The Board has no reason
to believe that such nominees will become unavailable; however, in the event
that such nominees should be unavailable, proxies solicited by the Board will be
voted for the election of substitute nominees designated by the Nominating
Committee of the Board.
Michael W. Forman has been a member of the Board since 2003 and Howard M.
Pinsley has been a member of the Board since 2002. The names of the nominees and
the terms and class are set forth below. For biographical and other information
regarding such nominees, see "BOARD OF DIRECTORS."
Nominee Term Class
------- ---- -----
Michael W. Forman 3 years I
Howard M. Pinsley 3 years I
Proxies cannot be voted for a greater number of persons than the nominees named
above.
17
The nominees for directors who receive a plurality of the votes cast by the
holders of the Shares will be elected. Abstentions (withheld authority) and
broker or nominee non-votes are not counted in determining the number of Shares
voted for or against any nominee for director.
The Board recommends a vote in favor of the nominees for election to the Board.
ITEM 2. RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
It is intended that the votes will be cast pursuant to the accompanying proxy
for the ratification of Lazar Levine & Felix LLP as the Company's independent
public accountants for the fiscal year ending December 31, 2004, unless
otherwise directed.
The firm of Lazar Levine & Felix LLP certified the accounts of the Company for
the fiscal years ended December 31, 1988 and thereafter. For a discussion of the
fees paid to Lazar Levine & Felix LLP for services rendered during the year
ended December 31, 2003, see "Principal Accounting Firm Fees" under "AUDIT
COMMITTEE REPORT." No member of such firm or any associate thereof has any
financial interest in the Company or its subsidiaries. A member of such firm is
not expected to be present at the Meeting.
Shareholder approval of the Company's auditors is not required under Delaware
law. The Board is submitting the selection of Lazar Levine & Felix LLP by the
Audit Committee of the Company to its shareholders for ratification in order to
determine whether the shareholders generally approve of the Company's auditors.
If the selection of Lazar Levine & Felix LLP is not approved by the
shareholders, the Audit Committee will reconsider its selection.
The affirmative vote of a majority of the Shares represented in person or by
proxy at the Meeting which cast a vote on this proposal is required to approve
this proposal. Abstentions (withheld authority) and broker or nominee non-votes
are not counted in determining the number of Shares voted for or against this
proposal.
The Board recommends a vote in favor of this proposal.
18
SHAREHOLDER'S PROPOSALS FOR 2005 ANNUAL MEETING
Any shareholder of the Company who wishes to present a proposal to be considered
at the 2005 annual meeting of shareholders and who wishes to have such proposal
receive consideration for inclusion in the Company's proxy statement for such
meeting must deliver such proposal in writing to the Company at 16115 N.W. 52nd
Avenue, Miami, Florida 33014, not later than May 19, 2005. Any such shareholder
proposal must comply with the requirements of Rule 14a-8 promulgated under the
Securities Exchange Act of 1934.
The persons named as proxies for the 2005 annual meeting of shareholders will
generally have discretionary authority to vote on any matter presented by a
shareholder for action at that meeting. In the event that the Company receives
notice of any shareholder proposal no later than forty-five (45) days before the
date on which the Company first mailed its Proxy Statement, then, so long as the
Company includes in its proxy statement for the 2005 annual meeting of
shareholders advice on the nature of the matter and how the named proxies intend
to vote the shares for which they have received discretionary authority, such
proxies may exercise discretionary authority with respect to such matter, except
to the extent limited by the rules of the SEC governing shareholder proposals.
OTHER MATTERS
The Board has no knowledge of any other matters which may come before the
Meeting and does not intend to present any other matters. However, if any other
matters shall properly come before the Meeting or any adjournment or
postponements thereof, the persons named as proxies will have discretionary
authority to vote the shares represented by the accompanying proxy in accordance
with their best judgment.
A COPY OF THE COMPANY'S ANNUAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2003 IS
BEING PROVIDED TO SHAREHOLDERS WITH THIS PROXY STATEMENT. THE COMPANY WILL
FURNISH TO EACH PERSON SOLICITED HEREUNDER, WITHOUT CHARGE, COPIES OF ITS ANNUAL
REPORT ON FORM 10-K (INCLUDING EXHIBITS) FOR THE COMPANY'S YEAR ENDED DECEMBER
31, 2003, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, UPON RECEIPT BY
THE COMPANY OF A WRITTEN REQUEST BY SUCH PERSON. SUCH WRITTEN REQUEST SHOULD BE
SENT TO THE COMPANY, ATTENTION: HOWARD L. FLANDERS, EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER, AT THE COMPANY'S ADDRESS STATED HEREINABOVE.
By Order of the Board of Directors,
/s/ HOWARD L. FLANDERS
-------------------------------------
Howard L. Flanders
Corporate Secretary
September 15, 2004
Miami, Florida
19
EXHIBIT A
---------
September 7, 2004
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
CHARTER
========================================================
I. PURPOSE
The primary function of the Audit Committee (the "Committee") is to
assist the Board of Directors (the "Board") in fulfilling its
responsibilities relating to the company's accounting, auditing and
reporting practices by providing a channel of communication between the
Board and the company's independent accountants and internal auditors
(if any) and by reviewing the company's financial reports and its
auditing, accounting and financial reporting processes generally.
Consistent with this function, the Committee should encourage
continuous improvement of, and should foster adherence to, the
company's policies, procedures and practices at all levels. The
Committee's primary duties and responsibilities are to:
o Serve as an independent and objective party to monitor the
company's accounting and financial reporting process, audits
of the financial statements and internal control system.
o Review and appraise the audit efforts of the company's
independent accountants and internal auditing department (if
any).
o Adopt policies governing the pre-approval of all audit
services and permissible non-audit services and disclose such
policies in the company's Annual Reports on Form 10-K and
proxy statements.
o Provide an open avenue of communication among the independent
accountants, financial and senior management, the internal
auditing department (if any), and the Board.
II. RESPONSIBILITIES AND DUTIES
The Committee shall primarily further its purpose through the carrying
out of the following activities:
Documents/Reports Review
1. Review, and if necessary update, this Charter at least
annually.
2. Review and discuss with management and the independent
accountants the company's quarterly and annual financial
statements, including matters required to be reviewed under
applicable legal or regulatory requirements or requirements of
The Nasdaq Stock Market, Inc. (the "Nasdaq").
3. Review the regular internal reports to management prepared by
the internal auditing department (if any) and management's
response.
4. Review with management and the independent accountants any
Quarterly Report on Form 10-Q or Annual Report on Form 10-K
prior to its filing and any release of earnings prior to the
release of earnings.
5. Inform the Board of its determination whether or not to
recommend that the audited financial statements be included in
the company's Annual Report on Form 10-K.
6. Prepare a report for inclusion in the company's annual proxy
statement that includes the Committee's review and discussion
of matters with management and the independent accountants and
such other matters
as from time to time are required by the Securities and
Exchange Commission (the "SEC") or Nasdaq to be included
therein.
7. Review with management, the internal auditors (if any) and the
independent accountants the company's risk assessment and risk
management policies.
8. Review on an ongoing basis and, if appropriate, pre-approve
all related party transactions (any transaction required to be
disclosed pursuant to Item 404 of SEC Regulation S-K) for
potential conflict of interest situations.
Independent Accountants
1. Directly appoint, retain, approve the compensation of,
evaluate and, if and when necessary, terminate the independent
accountants. The Committee shall have the sole authority to
approve all audit engagement fees and terms. The independent
accountants shall report directly to the Committee.
2. Obtain from the independent accountants a written statement
describing all relationships between the accountants and the
company.
3. Review and discuss with the accountants on an annual basis all
significant relationships the accountants have with the
company in order to determine the accountants' independence.
4. Periodically consult with the independent accountants out of
the presence of management about internal controls and the
fullness and accuracy of the company's financial statements.
5. Review and take appropriate action when needed in order to
assure the independence of the accountants.
6. Pre-approve any permissible non-audit services provided to the
company by the independent accountants.
7. Set policies relating to the company's hiring of employees or
former employees of the independent accountants.
Financial Reporting Processes
1. In consultation with the independent accountants and the
internal auditors (if any), review the integrity of the
company's financial reporting processes, both internal and
external, and internal controls including computerized
information system controls and security.
2. Consider the independent accountants' judgments about the
quality and appropriateness of the company's accounting
principles as applied in its financial reporting.
3. Consider and approve, if appropriate, major changes to the
company's auditing and accounting principles and practices as
suggested by the independent accountants, management or the
internal auditing department (if any).
4. Review and discuss with the Chief Executive Officer ("CEO")
and Chief Financial Officer ("CFO") any deficiencies that may
exist in the design or operation of the internal controls, as
well as approve any significant changes in the internal
controls. In connection with any periodic report of the
company required to be filed with the SEC, review the contents
of the CEO's and CFO's certificates to be filed under Sections
302 and 906 of the Sarbanes-Oxley Act.
2
5. Require that the CEO and CFO disclose any fraud they may be
aware of involving management or anyone else intimately
involved with the company's internal controls.
6. Require the independent accountants to report the critical
accounting policies and alternative treatments of financial
information that will be used in the financial reporting
process, as well as those that have been discussed with
management and any other matter related to the conduct of the
audit that are required to be communicated to the Committee
under generally accepted auditing standards. The report should
include the following:
(i) all critical accounting policies and practices to be
used;
(ii) all alternative accounting treatments of financial
information within GAAP related to material items
that have been discussed with management, including
the ramifications of the use of alternative
treatments and the treatment preferred by the
independent accountants; and
(iii) other written communications between the independent
accountants and management.
7. Discuss with management each critical accounting estimate
included in Management's Discussion and Analysis of Financial
Condition and Results of Operation included in any of the
company's periodic reports to be filed with the SEC, the
development and selection of the accounting estimate, and the
disclosure in Management's Discussion and Analysis of
Financial Condition and Results of Operation about the
estimate.
8. Review with the independent accountants the scope of their
annual and quarterly examinations and the accounting
principles used in conducting the examinations.
Process Improvement
1. Establish procedures for handling complaints regarding
accounting, internal accounting controls and auditing matters,
including procedures for confidential, anonymous submission of
concerns by employees regarding accounting and auditing
matters.
2. Establish regular and separate systems of reporting to the
Committee by each of management, the independent accountants
and the internal auditors (if any) regarding any significant
judgments made in management's preparation of the financial
statements and the view of each as to the appropriateness of
such judgments.
3. Following completion of the annual audit, review separately
with each of management, the independent accountants and the
internal auditing department (if any) any significant
difficulties encountered during the course of the audit,
including any restrictions on the scope of work or access to
required information.
4. Review any significant disagreement among management and the
independent accountants or the internal auditing department
(if any) in connection with the preparation of the financial
statements.
5. Review with the independent accountants, the internal auditing
department (if any) and management the extent to which changes
or improvements in financial or accounting practices, as
approved by the Committee, have been implemented. This review
should be conducted at an appropriate time subsequent to
implementation of changes or improvements, as decided by the
Committee.
6. Review activities, organizational structure and qualifications
of the internal audit department (if any).
7. Provide a focal point for communications among non-Committee
directors, the company's management and the independent
accountants.
3
8. Review with independent accountants, the company's internal
auditor (if any) and 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 control procedures or particular
areas where new or more detailed controls or procedures are
desirable.
9. Meet with independent accountants to appraise the
effectiveness of the audit effort. Such appraisal shall
include a discussion of the overall approach to and the scope
of the examination, with particular attention to those areas
on which either the Committee or the independent accountants
believed emphasis was necessary or desirable.
Reporting
1. Annually, report to the Board its activities during the past
year. This report shall discuss any specific actions the
Committee has taken as well as the Committee's plans for the
coming year. Additionally, during the year, as appropriate,
the Committee shall report significant matters and findings to
the Board.
III. OUTSIDE ADVISORS
The Committee shall have the authority, without seeking Board approval,
to retain any outside counsel, accountants, experts or other advisors
whose assistance the Committee deems necessary for the carrying out of
its responsibilities and duties including, in discharging its oversight
responsibilities, investigating any matter brought to its attention.
The Committee shall also have the authority to determine and set the
appropriate compensation for such advisors.
IV. COMPOSITION
The Committee shall be comprised of three or more directors as
determined by the Board, each of whom shall be free from any
relationship that, in the opinion of the Board, would interfere with
the exercise of his or her independent judgment as a member of the
Committee. All members of the Committee shall be independent directors
under the standards promulgated by the Nasdaq and shall also satisfy
any more stringent independence requirements of the Nasdaq or the SEC
with respect to audit committee members. All members of the Committee
shall have a working familiarity with basic finance and accounting
practices, including the ability to read and understand the company's
fundamental financial statements. One member of the Committee must be a
"financial expert" as defined from time to time by the SEC. The Company
and its management shall assist the members of the Committee in
maintaining appropriate financial literacy.
No member of the Committee may serve on the audit committees of more
than three public companies. Committee members shall not receive any
compensation from the Company other than director's fees. Committee
members shall be selected by majority vote of the Board. The Committee
shall elect by majority vote a Chairperson from its members.
V. MEETINGS; COMPLIANCE WITH LEGAL AND REGULATORY REQUIREMENTS
The Committee shall meet at least four times annually, or more
frequently as circumstances dictate. As part of its job to foster open
communication, the Committee shall meet at least annually, and may meet
more often, with management, the director of the internal auditing
department (if any) and the independent accountants in separate
executive sessions to discuss any matters that the Committee or any of
these groups believe should be discussed privately. The Committee shall
have the authority, to the extent permissible under and consistent with
the Sarbanes-Oxley Act and the requirements of the SEC and the Nasdaq
and as and when it deems appropriate, to delegate certain of its duties
and responsibilities to subcommittees or members of the Committee
including, without limitation, the Chairperson of the Committee. The
Committee shall perform such other functions, duties and
responsibilities as are or may be required to be performed by the
Committee under applicable legal or regulatory requirements or
requirements of the Nasdaq, as such requirements may be adopted or
modified from time to time.
4
PROXY
ALL AMERICAN SEMICONDUCTOR, INC.
ANNUAL MEETING OF SHAREHOLDERS - OCTOBER 15, 2004
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints Paul Goldberg and Bruce M.
Goldberg, and each of them, as proxies, with full power of substitution to each,
for and in the name, place and stead of the undersigned to vote all shares of
Common Stock of All American Semiconductor, Inc. (the "Company") which the
undersigned would be entitled to vote at the Annual Meeting of Shareholders of
the Company to be held on Friday, October 15, 2004, at 10:00 a.m., Miami,
Florida local time, at Don Shula's Hotel, 15255 Bull Run Road, Miami Lakes,
Florida, and at any and all postponements and adjournments thereof. The Board of
Directors recommends a vote "FOR" Proposals 1 and 2 on reverse side.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED SHAREHOLDER. WHERE A VOTE IS NOT SPECIFIED, THE PROXIES WILL VOTE
THE SHARES REPRESENTED BY THE PROXY "FOR" EACH OF PROPOSALS 1 AND 2 ON REVERSE
SIDE.
A MAJORITY OF SAID PROXIES PRESENT AND ACTING IN PERSON OR BY THEIR SUBSTITUTES
(OR IF ONLY ONE IS PRESENT AND ACTING, THEN THAT ONE) MAY EXERCISE ALL OF THE
POWER CONFERRED HEREBY. DISCRETIONARY AUTHORITY IS CONFERRED HEREBY AS TO SUCH
OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING. PLEASE SIGN
EXACTLY AS YOUR NAME APPEARS IN THE RECORDS OF THE COMPANY. IF THE SHARES ARE
HELD IN THE NAMES OF TWO OR MORE PERSONS, EACH SHOULD SIGN. EXECUTORS,
ADMINISTRATORS, TRUSTEES, GUARDIANS, ATTORNEYS AND CORPORATE OFFICERS SHOULD ADD
THEIR TITLES.
Receipt of the Company's 2003 Annual Report and the Notice of Annual Meeting of
Shareholders and Proxy Statement relating thereto is hereby acknowledged.
(Continued and to be signed on the reverse side)
ANNUAL MEETING OF SHAREHOLDERS OF
ALL AMERICAN SEMICONDUCTOR, INC.
October 15, 2004
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
Please detach along perforated line and mail in the envelope provided.
-----------------------------------------------------------------------------------------------------------------------------------
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. Ratification of the selection of Lazar Levine & [ ] [ ] [ ]
Felix LLP as the Company's independent public
NOMINEES: accountants for the year ending December 31, 2004.
[ ] FOR ALL NOMINEES [ ] Michael W. Forman
[ ] Howard M. Pinsley 3. Upon such other matters as may properly come [ ] [ ] [ ]
[ ] WITHHOLD AUTHORITY before the Annual Meeting or any and all
FOR ALL NOMINEES postponements or adjournments thereof.
[ ] FOR ALL EXCEPT
(See instruction
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: o
---------------------------------------------------
---------------------------------------------------
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 Shareholder ____________________ Date: __________ Signature of Shareholder ____________________ 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.