SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 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)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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ALL AMERICAN SEMICONDUCTOR, INC.
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held on November 2, 2005
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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 Wednesday, November 2, 2005,
at 10:00 A.M., Miami, Florida local time, at Don Shula's Hotel, 6842 Main
Street, Miami Lakes, Florida, for the following purposes:
1. to elect three directors to serve on the Board of Directors until the
2008 annual meeting of shareholders or until election and qualification
of their respective successors;
2. to approve an extension of the term and expiration date of the
Company's Employees', Officers', Directors' Stock Option Plan, as
previously amended and restated (the "Option Plan"), to September 6,
2015 and an increase in the number of shares of common stock reserved
for issuance under the Option Plan to 1,350,000 shares;
3. to ratify the selection of Lazar Levine & Felix LLP as the Company's
registered independent public accounting firm for the year ending
December 31, 2005; and
4. 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 Friday, September 23,
2005, 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 27, 2005
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.
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 November 2, 2005
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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
Wednesday, November 2, 2005, at 10:00 A.M., Miami, Florida local time, at Don
Shula's Hotel, 6842 Main Street, 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 27, 2005.
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. Further, the Company has made arrangements with Georgeson Shareholder
Communications, Inc., a proxy solicitation firm, to assist the Company in
soliciting proxies from shareholders. The cost to the Company with respect to
such arrangement is estimated to be approximately $6,000 plus reimbursement of
out-of-pocket expenses. 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 mail solicitation, without
additional compensation or remuneration therefor, in conjunction with the
efforts of Georgeson Shareholder Communications, Inc.
A copy of the Company's annual report for the fiscal year ended December 31,
2004 (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 Friday,
September 23, 2005 (the "Record Date"), are entitled to notice of and to vote at
the Meeting or any adjournments or
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postponements thereof. On the Record Date, the Company had 3,937,758 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.
Approximately 9.3% 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 2004 (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) ................................. 280,666 7.0%
Paul Goldberg (4) ..................................... 157,451 4.0%
Howard L. Flanders .................................... 36,767 *
Rick Gordon ........................................... 23,484 *
John Jablansky ........................................ 17,474 *
Richard E. Siegel ..................................... 6,100 *
Robin L. Crandell ..................................... 5,000 *
Howard M. Pinsley ..................................... 4,000 *
Michael W. Forman (5) ................................. 2,250 *
All executive officers and directors
as a group (9 persons)(3)(4)(5) ....................... 533,192 13.0%
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* Less than 1%
(1) 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, as previously amended
and restated (the "Option Plan") and the 2000 Nonemployee Director Stock
Option Plan which will be vested and exercisable on or before November 22,
2005: 60,734 options held by Bruce M. Goldberg; 28,878 options held by Paul
Goldberg; 32,567 options held by Howard L. Flanders; 14,567 options held by
Rick Gordon; 11,224 options held by John Jablansky; 5,000 options held by
Richard E. Siegel; 5,000 options held by Robin L. Crandell; 2,250 options
held by Howard M. Pinsley; 2,000 options held by Michael W. Forman; and
162,220 options held by the executive officers and directors as a group.
Excludes outstanding stock options to purchase an aggregate of 103,753
additional shares of the Company's Common Stock issued under the 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 22, 2005.
(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.
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(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 the beneficial owner of these securities.
(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
In September 2005, Rick Gordon, the Senior Vice President of Sales and Marketing
of the Company, voluntarily resigned as a member of the Company's Board in order
to enable the Board to consist of a majority of independent directors, as
required by Rule 4350(c) of the Rules of The Nasdaq Stock Market (the "NASD
Rules") within the time frame permitted by Rule 4350(a)(5) of the NASD Rules.
Mr. Gordon remains an executive officer of the Company.
The Company currently has seven 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 77 Chairman of the Board
Bruce M. Goldberg (1) II 50 Director, President and Chief Executive Officer
Howard L. Flanders II 48 Director, Executive Vice President, Chief Financial
Officer and Corporate Secretary
Robin L. Crandell (2)(3)(4) III 55 Director
Howard M. Pinsley (2)(3)(4) I 65 Director
Michael W. Forman (2) I 66 Director
Richard E. Siegel II 60 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 2007, 2005 and 2006, respectively. The Board currently
consists of four independent directors and three management directors and
therefore complies with Rule 4350(c) of the NASD Rules which requires that the
Board consist of a majority 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.
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 Chairman of the Board, President and Chief Executive
Officer 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 in 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 and 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 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 once during the fiscal year ended December 31, 2004, in
addition to acting two times during the year by unanimous written consent. All
Board members attended the meeting 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
2004 annual meeting, seven Board members were present in person and one Board
member was present by conference telephone.
The independent directors will meet in executive sessions at least twice per
year beginning in 2005 in connection with a meeting of the Board of Directors.
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Certain Relationships and Related Transactions
During 2004, the Company purchased product aggregating approximately $2.0
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 was triple net and provided for monthly rental payments of
$4,800. Beginning in 2001, the partnership had agreed to varying reductions in
the monthly rental payment. The Company paid a total of approximately $42,700 to
this partnership for the year ended December 31, 2004. The lease is expected to
be terminated in September 2005.
Board Compensation
Commencing in 2004, nonemployee members of the Board receive an annual fee of
$5,000. Each nonemployee director serving on one or more committees receives an
additional annual fee of $2,000. The chairman of the audit committee receives an
additional annual fee of $1,000.
The nonemployee members of the Board also receive annual grants of options under
the 2000 Nonemployee Director Stock Option Plan. 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, 2004, 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 2004, 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,
2004, the Audit Committee met five times and acted once by unanimous written
consent. The Board and the Audit Committee believe the Audit Committee's member
composition satisfies the NASD Rules 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 and consistent with such charter monitors and
oversees the Company's financial reporting process on behalf of the Board. It
reviews the independence of the Company's registered independent public
accounting firm and is responsible for, among other matters, authorizing or
approving the engagement of the registered independent public accounting firm
for both audit services and permitted non-auditing services, the scope of audit
and non-audit assignments, related fees, the accounting principles used in
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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 currently 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
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, 2004, the Compensation
Committee acted twice 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 did not hold any meetings during 2004. The
Nominating Committee operates under a written charter approved by the Board and
consistent with such charter evaluates and proposes 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 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 the NASD Rules. The Board and the Audit
Committee believe that the Audit Committee's current member composition
satisfies the NASD Rules 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).
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The Audit Committee holds discussions with management and the registered
independent public accounting firm 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 registered independent public accounting firm is 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 2004 the appointment of the
Company's registered independent public accounting firm, subject to shareholder
ratification. The Company's registered independent public accounting firm 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 registered
independent public accounting firm 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
registered independent public accounting firm. The Audit Committee also
discussed with the registered independent public accounting firm 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, 2004 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 registered independent public accounting firm. As such, it is the
Company's policy that all engagements of the Company's registered independent
public accounting firm be pre-approved by the Audit Committee.
Audit Fees. The aggregate fees billed by the Company's registered independent
public 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, 2004 and December 31, 2003 and the review of the
financial statements included in the Company's Forms 10-Q for each year were
$180,000 and $170,000, respectively.
Audit Related Fees. There were no fees billed by Lazar Levine & Felix LLP for
2004 and 2003 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 2004 and 2003 for professional services
rendered by Lazar Levine & Felix LLP for tax compliance, tax advice, and tax
planning were $44,000 and $75,000, respectively. All such tax services were
pre-approved by the Audit Committee.
All Other Fees. There were no fees billed for services rendered by Lazar Levine
& Felix LLP for 2004 and 2003, 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 77 Chairman of the Board
Bruce M. Goldberg 50 President and Chief Executive Officer
Howard L. Flanders 48 Executive Vice President, Chief Financial Officer and Corporate Secretary
Rick Gordon 52 Senior Vice President of Sales and Marketing
John Jablansky 48 Senior Vice President of Product Management and Operations
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 of the Company. In 1994, Mr.
Gordon was appointed Senior Vice President of Sales and Marketing for the
Company and currently holds that title. Mr. Gordon served as a member of the
Company's board of directors from 1992 until September of 2005, at which time
Mr. Gordon voluntarily resigned as a director of the Company in order to enable
the Board to consist of a majority of independent directors, as required by Rule
4350(c) of the NASD Rules within the time frame permitted by Rule 4350(a)(5) of
the NASD Rules. Before working for the Company, Mr. Gordon was Western Regional
Vice President for Diplomat Electronics, another electronic components
distributor, from 1975 until 1986.
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 Rick Gordon
and John Jablansky, see "BOARD OF DIRECTORS."
Code of Ethics
The Company has 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
the Code of Ethics and Business Conduct on the Company's web site,
www.allamerican.com. The Company 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, 2004, 2003 and 2002 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:
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