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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
--OR--
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED JUNE 30, 1999
Commission File Number: 0-16207
ALL AMERICAN SEMICONDUCTOR, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 59-2814714
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
16115 NORTHWEST 52ND AVENUE, MIAMI, FLORIDA 33014
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (305) 621-8282
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [X] Yes [ ] No
As of August 9, 1999, 3,973,431 shares (including 32,141 shares held by a
wholly-owned subsidiary of the Registrant) of the common stock of All American
Semiconductor, Inc. were outstanding, which gives effect to the one-for-five
reverse stock split effective as of June 1, 1999.
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<PAGE>
ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES
FORM 10-Q - INDEX
<TABLE>
<CAPTION>
Part Item Page
No. No. Description No.
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
I FINANCIAL INFORMATION:
1. Financial Statements
Consolidated Condensed Balance Sheets at June 30, 1999
(Unaudited) and December 31, 1998.................................... 1
Consolidated Condensed Statements of Income for the Quarters
and Six Months Ended June 30, 1999 and 1998 (Unaudited).............. 2
Consolidated Condensed Statements of Cash Flows for the
Six Months Ended June 30, 1999 and 1998 (Unaudited).................. 3
Notes to Consolidated Condensed Financial Statements (Unaudited)....... 4
2. Management's Discussion and Analysis of Financial Condition and
Results of Operations................................................ 6
3. Quantitative and Qualitative Disclosures about Market Risk............. 9
II OTHER INFORMATION:
4. Submission of Matters to a Vote of Security Holders....................10
6. Exhibits and Reports on Form 8-K.......................................11
SIGNATURES.............................................................11
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
JUNE 30 DECEMBER 31
ASSETS 1999 1998
- --------------------------------------------------------------------------------------------
(UNAUDITED)
<S> <C> <C>
Current assets:
Cash .................................................... $ 365,000 $ 473,000
Accounts receivable, less allowances for doubtful
accounts of $1,777,000 and $1,412,000 ................. 47,594,000 37,821,000
Inventories ............................................. 77,093,000 69,063,000
Other current assets .................................... 2,476,000 2,574,000
------------- -------------
Total current assets .................................. 127,528,000 109,931,000
Property, plant and equipment - net ....................... 4,276,000 4,506,000
Deposits and other assets ................................. 3,256,000 3,458,000
Excess of cost over fair value of net assets acquired - net 1,034,000 1,062,000
------------- -------------
$ 136,094,000 $ 118,957,000
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
- --------------------------------------------------------------------------------------------
Current liabilities:
Current portion of long-term debt ....................... $ 180,000 $ 269,000
Accounts payable and accrued expenses ................... 49,444,000 41,229,000
Income taxes payable .................................... 30,000 56,000
Other current liabilities ............................... 227,000 185,000
------------- -------------
Total current liabilities ............................. 49,881,000 41,739,000
Long-term debt:
Notes payable ........................................... 51,893,000 43,306,000
Subordinated debt ....................................... 6,154,000 6,187,000
Other long-term debt .................................... 1,216,000 1,216,000
------------- -------------
109,144,000 92,448,000
------------- -------------
Commitments and contingencies
Shareholders' equity:
Preferred stock, $.01 par value, 1,000,000 shares
authorized, none issued ............................... -- --
Common stock, $.01 par value, 40,000,000 shares
authorized, 3,973,431 shares issued and outstanding ... 40,000 40,000
Capital in excess of par value .......................... 25,751,000 25,751,000
Retained earnings ....................................... 1,610,000 1,169,000
Treasury stock, at cost, 36,060 shares .................. (451,000) (451,000)
------------- -------------
26,950,000 26,509,000
------------- -------------
$ 136,094,000 $ 118,957,000
============= =============
</TABLE>
See notes to consolidated condensed financial statements
1
<PAGE>
<TABLE>
<CAPTION>
ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED)
QUARTERS SIX MONTHS
PERIODS ENDED JUNE 30 1999 1998 1999 1998
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET SALES .................. $ 79,874,000 $ 62,981,000 $ 150,523,000 $ 126,511,000
Cost of sales .............. (64,602,000) (48,426,000) (121,612,000) (97,846,000)
------------- ------------- ------------- -------------
Gross profit ............... 15,272,000 14,555,000 28,911,000 28,665,000
Selling, general and
administrative expenses... (13,671,000) (11,689,000) (25,874,000) (23,792,000)
------------- ------------- ------------- -------------
INCOME FROM OPERATIONS ..... 1,601,000 2,866,000 3,037,000 4,873,000
Interest expense ........... (1,168,000) (1,094,000) (2,264,000) (2,192,000)
------------- ------------- ------------- -------------
INCOME BEFORE INCOME TAXES.. 433,000 1,772,000 773,000 2,681,000
Income tax provision ....... (186,000) (762,000) (332,000) (1,153,000)
------------- ------------- ------------- -------------
NET INCOME ................. $ 247,000 $ 1,010,000 $ 441,000 $ 1,528,000
============= ============= ============= =============
Earnings per share:
Basic..................... $ .06 $ .26 $ .11 $ .39
====== ====== ====== ======
Diluted................... $ .06 $ .25 $ .11 $ .38
====== ====== ====== ======
</TABLE>
See notes to consolidated condensed financial statements
2
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ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
SIX MONTHS ENDED JUNE 30 1999 1998
- ----------------------------------------------------------------------------
Cash Flows Used For Operating Activities ........ $(8,266,000) $ (162,000)
----------- -----------
Cash Flows From Investing Activities:
Acquisition of property and equipment ........... (264,000) (189,000)
Increase in other assets ........................ (34,000) (67,000)
----------- -----------
Cash flows used for investing activities .... (298,000) (256,000)
----------- -----------
Cash Flows From Financing Activities:
Net borrowings under line of credit agreement ... 8,613,000 247,000
Repayments of notes payable ..................... (157,000) (145,000)
----------- -----------
Cash flows provided by financing activities.. 8,456,000 102,000
----------- -----------
Decrease in cash ................................ (108,000) (316,000)
Cash, beginning of period ....................... 473,000 444,000
----------- -----------
Cash, end of period ............................. $ 365,000 $ 128,000
=========== ===========
Supplemental Cash Flow Information:
Interest paid ................................... $ 1,998,000 $ 2,040,000
=========== ===========
Income taxes paid ............................... $ 358,000 $ 1,111,000
=========== ===========
See notes to consolidated condensed financial statements
3
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ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
================================================================================
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
- ---------------------
In the opinion of management, the accompanying unaudited Consolidated Condensed
Financial Statements include all adjustments (consisting of normal recurring
accruals or adjustments only) necessary to present fairly the financial position
at June 30, 1999, and the results of operations and the cash flows for all
periods presented. The results of operations for the interim periods are not
necessarily indicative of the results to be obtained for the entire year.
For a summary of significant accounting policies (which have not changed from
December 31, 1998) and additional financial information, see the Company's
Annual Report on Form 10-K for the year ended December 31, 1998, including the
consolidated financial statements and notes thereto which should be read in
conjunction with these financial statements.
All references to shares of common stock, $.01 par value ("Common Stock"), stock
options and exercise prices per share and per share amounts have been restated
to reflect the effect of the Reverse Stock Split (see Note 5 below) unless
otherwise indicated.
Earnings Per Share
- ------------------
The following average shares were used for the computation of basic and diluted
earnings per share:
<TABLE>
<CAPTION>
QUARTERS SIX MONTHS
PERIODS ENDED JUNE 30 1999 1998 1999 1998
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Basic.............................. 3,937,371 3,936,719 3,937,371 3,936,719
Diluted............................ 3,937,371 4,055,905 3,937,371 4,043,506
</TABLE>
2. LONG-TERM DEBT
Outstanding borrowings at June 30, 1999 under the Company's $100 million line of
credit facility aggregated $51,876,000.
3. OPTIONS
During the quarter ended June 30, 1999, no stock options were granted by the
Company. During the quarter ended March 31, 1999, the Company granted an
aggregate of 39,000 stock options to 30 individuals pursuant to the Employees',
Officers', Directors' Stock Option Plan, as amended and restated (the "Stock
Option Plan"). These options have an exercise price of $4.50 per share (fair
market value at date of grant) and vest over a five-year period and are
exercisable over a six-year period. During the six months ended June 30, 1999,
48,600 stock options were canceled at exercise prices ranging from $4.49 to
$11.55 per share.
At the Company's 1999 annual meeting of shareholders which was held on June 1,
1999, the shareholders of the Company approved an amendment to the Stock Option
Plan increasing the number of shares of Common Stock reserved for issuance under
the Stock Option Plan to 900,000 shares and extending its term and expiration
date to April 18, 2009.
4
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ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
================================================================================
All stock option and Stock Option Plan amounts above have been adjusted to
reflect the Reverse Stock Split (as defined below).
4. STOCK REPURCHASE PROGRAM
On May 24, 1999, the Company announced that the Company's Board of Directors
authorized the repurchase of up to $2 million in purchase price of the Company's
Common Stock. The stock repurchases may, at the discretion of the Company's
management, be made from time to time at prevailing prices in the open market or
through privately negotiated transactions. The Company's management will base
its decision on market conditions, the price of the Common Stock and other
factors. The Company intends to make such stock repurchases using available cash
flow from operations and/or available borrowings under its credit facility. Any
shares of Common Stock repurchased will be available for reissuance in
connection with the Stock Option Plan or for other corporate purposes. As of
June 30, 1999, the Company had not repurchased any shares of its Common Stock.
5. REVERSE STOCK SPLIT
On June 1, 1999, the Company's shareholders approved a one-for-five reverse
stock split (the "Reverse Stock Split") of the Company's outstanding shares of
Common Stock. The Reverse Stock Split became effective for trading in the
Company's new Common Stock as of Wednesday, June 2, 1999. Immediately following
the Reverse Stock Split, there were 3,973,431 shares of Common Stock
outstanding. The $.01 par value of the Common Stock remained the same after the
Reverse Stock Split.
6. NASDAQ LISTING
On June 24, 1999, the Company was advised by the Nasdaq Listing Qualifications
department of The Nasdaq Stock Market (the "Nasdaq Listing Department") that the
Company maintained a bid price in excess of the $1.00 minimum bid requirement
under The Nasdaq Stock Market rules for a minimum of ten consecutive business
days. Accordingly, the matter of maintaining a minimum bid price detailed in a
previous notification from the Nasdaq Listing Department was closed.
5
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ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
All American Semiconductor, Inc. and its subsidiaries (the "Company") is a
national distributor of electronic components manufactured by others. The
Company distributes a full range of semiconductors (active components),
including transistors, diodes, memory devices and other integrated circuits, as
well as passive components, such as capacitors, resistors, inductors and
electromechanical products, including cable, switches, connectors, filters and
sockets. These products are sold primarily to original equipment manufacturers
("OEMs") in a diverse and growing range of industries, including manufacturers
of computers and computer-related products, networking, satellite and
communications products, consumer goods, robotics and industrial equipment,
defense and aerospace equipment and medical instrumentation. The Company also
sells products to contract electronics manufacturers who manufacture products
for companies in all electronics industry segments. Through the Aved Memory
Products and Aved Display Technologies divisions of its subsidiary, Aved
Industries, Inc., the Company also designs and has manufactured under the label
of its subsidiary's divisions certain board level products including memory
modules and flat panel display driver boards. These products are also sold to
OEMs.
Results of Operations
- ---------------------
The Company achieved record net sales for the quarter and six months ended June
30, 1999 of $79.9 million and $150.5 million, representing a 26.8% and 19.0%
increase from net sales of $63.0 million and $126.5 million for the same periods
of 1998. The increases resulted from improved conditions in the industry as well
as from increased sales in most territories and contributions from two new sales
offices which were opened during the second quarter of 1999.
Gross profit was $15.3 million and $28.9 million for the second quarter and
first six months of 1999, compared to $14.6 million and $28.7 million for the
same periods of 1998. The increases were due to the increase in net sales. Gross
profit margins as a percentage of net sales were 19.1% and 19.2% for the second
quarter and first six months of 1999 compared to 23.1% and 22.7% for the second
quarter and first six months of 1998. The declines in gross profit margins
reflect increased competition, a greater number of low margin, large volume
transactions and continued changes in the Company's product mix. In addition,
the Company has experienced lower margins relating to the development of
long-term strategic relationships with accounts which have required aggressive
pricing programs. Management expects downward pressure on gross profit margins
to continue in the future.
Selling, general and administrative expenses ("SG&A") was $13.7 million for the
second quarter of 1999 compared to $11.7 million for the second quarter of 1998.
SG&A for the first half of 1999 was $25.9 million compared to $23.8 million for
the first six months of 1998. The increases were primarily as a result of an
increase in the Company's infrastructure to support the changing needs and
additional requirements of our customers and increased variable expenses
associated with the increases in sales and gross profit. Furthermore, in an
effort to drive expansion and internal growth, the Company opened additional
sales offices and increased its management personnel during 1999. Due to these
factors, the Company expects that SG&A will increase in future periods.
SG&A as a percentage of net sales improved to 17.1% and 17.2% for the second
quarter and six months ended June 30, 1999, from 18.6% and 18.8% for the same
periods of 1998. The improvement in SG&A as a percentage of sales reflects the
increase in net sales.
Income from operations was $1.6 million for the second quarter of 1999, compared
to $2.9 million for the second quarter of 1998. For the six months ended June
30, 1999, income from operations was $3.0 million, compared to $4.9 million for
the same period of 1998. The decreases in income from operations were
6
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ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES
================================================================================
primarily attributable to the decreases in gross profit margins as well as the
increases in SG&A in absolute dollars as discussed above.
Interest expense was $1.2 million and $2.3 million for the second quarter and
first half of 1999, compared to $1.1 million and $2.2 million for the same
periods of 1998. The increases in interest expense primarily resulted from an
increase in average borrowings during the second quarter of 1999 to support the
growth in sales and the expanded infrastructure.
Net income was $247,000, or $.06 per share (diluted), and $441,000, or $.11 per
share (diluted), for the quarter and six months ended June 30, 1999, compared to
$1.0 million, or $.25 per share (diluted), and $1.5 million, or $.38 per share
(diluted), for the same periods of 1998. The decreases in net income reflect the
decreases in gross profit margins as well as the increases in SG&A in absolute
dollars.
Liquidity and Capital Resources
- -------------------------------
Working capital at June 30, 1999 increased to $77.6 million from working capital
of $68.2 million at December 31, 1998. The current ratio was 2.56:1 at June 30,
1999, as compared to 2.63:1 at December 31, 1998. The increase in working
capital was primarily due to increases in accounts receivable and inventories.
These increases more than offset an increase in accounts payable. Accounts
receivable levels at June 30, 1999 were $47.6 million, up from accounts
receivable of $37.8 million at December 31, 1998, reflecting significantly
increased sales for June 1999 over December 1998. Inventory levels were $77.1
million at June 30, 1999, up from $69.1 million at December 31, 1998. Accounts
payable and accrued expenses increased $8.2 million to $49.4 million at June 30,
1999 from $41.2 million at December 31, 1998. The increases in inventory and
accounts payable reflect increases in inventory purchases to support higher
sales.
On May 24, 1999, the Company announced that the Company's Board of Directors
authorized the repurchase of up to $2 million in purchase price of the Company's
Common Stock. The Company intends to make such stock repurchases using available
cash flow from operations and/or available borrowings under its credit facility.
Any shares of Common Stock repurchased will be available for reissuance in
connection with the Stock Option Plan or for other corporate purposes.
Subsequent to June 30, 1999, and through August 9, 1999, the Company repurchased
21,800 shares of its Common Stock at an average price of $3.95 per share.
At June 30, 1999, outstanding borrowings under the Company's credit facility
aggregated $51.9 million.
The Company expects that its cash flows from operations and additional
borrowings available under its credit facility will be sufficient to meet its
current financial requirements over the next twelve months.
Year 2000 Issue
- ---------------
The Company has evaluated its business information technology (IT) systems as
well as its non-IT systems and has surveyed its major vendors. The Company has
completed the testing of its internal systems and believes that its systems are
in compliance with Year 2000 requirements. The Company has not incurred any
material expenditures of funds or internal resources relating to such compliance
of its internal systems. Based upon the survey of the Company's major suppliers,
the Company currently believes that Year 2000 issues of its suppliers should not
have a material adverse effect on the Company's business, operations or
financial condition. Nevertheless, to the extent the Company's vendors
(particularly its major vendors) experience Year 2000 difficulties, the Company
may face delays in obtaining or even be unable to obtain certain products and
services and therefore may be unable to make
7
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ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES
================================================================================
shipments to customers resulting in a material adverse effect on the Company's
business, operations and financial condition. The Company has not surveyed its
customers and on a limited basis has surveyed certain other third parties with
which it has a business relationship. As no assessment has been made of any
potential impact by customers' non-compliance (such as the ability of customers
to electronically interface with the Company), the Company does not have a cost
estimate to address any non-compliance by these customers nor can any assurance
be given that such non-compliance will not result in a material adverse effect
on the Company's business, operations and financial condition. The Company has
not undertaken an analysis (nor does it currently intend to analyze) the effect
of a worst-case Year 2000 scenario on the Company's business, operations or
financial condition and, accordingly, the materiality of such effect (if any) is
uncertain and the Company does not have a contingency plan and currently does
not intend to create one.
Forward-Looking Statements
- --------------------------
This Form 10-Q contains forward-looking statements (within the meaning of
Section 21E. of the Securities Exchange Act of 1934, as amended), representing
the Company's current expectations and beliefs concerning the Company's future
performance and operating results, its products, services, markets and industry,
and/or future events relating to or effecting the Company and its business and
operations. When used in this Form 10-Q, the words "believes," "estimates,"
"plans," "expects," "intends," "anticipates," and similar expressions as they
relate to the Company or its management are intended to identify forward-looking
statements. The actual results or achievements of the Company could differ
materially from those indicated by the forward-looking statements because of
various risks and uncertainties. Factors that could adversely affect the
Company's future results, performance or achievements include, without
limitation, the amount and timing of shipments of previously booked customer
orders, the effectiveness of the Company's business and marketing strategies,
timing of delivery of products from suppliers, price increases from suppliers
that cannot be passed on to the Company's customers at the same rate, the
product mix sold by the Company, the Company's development of new customers,
existing customer demand as well as the level of demand for products of its
customers, the ability of the Company to open new sales offices in a timely and
cost-effective manner and to expand its product offerings and continue to
enhance its service capabilities and the timing and cost thereof, utilization by
the Company of excess capacity, availability of products from and the
establishment and maintenance of relationships with suppliers, price erosion in
and price competition for products sold by the Company, management of growth and
expenses, the ability of the Company to generate the expected return from its
addition of people, addition of sales offices and the increase of its
infrastructure, the Company's ability to collect accounts receivable, price
decreases on inventory that is not price protected, gross profit margins,
including decreasing margins relating to the Company being required to have
aggressive pricing programs, increased competition from third party logistics
companies and e-brokers through the use of the Internet as well as from its
traditional competitors, availability and terms of financing to fund capital
needs, the continued enhancement of telecommunication, computer and information
systems, the achievement by the Company and its vendors and customers and other
third parties with which the Company has a business relationship of Year 2000
compliance in a timely and cost efficient manner, the continued and anticipated
growth of the electronics industry and electronic components distribution
industry, the impact on certain of the Company's suppliers and customers of
economic or financial turbulence in off-shore economies and/or financial
markets, change in government tariffs or duties, currency fluctuations, a change
in interest rates, the state of the general economy, and the other risks and
factors detailed in this Form 10-Q, in the Company's other filings with the
Securities and Exchange Commission and in its press releases. These risks and
uncertainties are beyond the ability of the Company to control. In many cases,
the Company cannot predict the risks and uncertainties that could cause actual
results to differ materially from those indicated by the forward-looking
statements.
8
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ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES
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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company's credit facility bears interest based on interest rates tied to the
prime or LIBOR rate, either of which may fluctuate over time based on economic
conditions. As a result, the Company is subject to market risk for changes in
interest rates and could be subjected to increased or decreased interest
payments if market interest rates fluctuate. If market interest rates increase,
the impact may have a material adverse effect on the Company's financial
results.
9
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ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) On June 1, 1999, the Company held its 1999 annual meeting of shareholders
(the "Annual Meeting").
(b) One matter voted on at the Annual Meeting was the election of two directors
of the Company. The two nominees, who were existing directors of the
Company and nominees of the Company's Board of Directors, were re-elected
at the Annual Meeting as directors of the Company, receiving the number
(not reflecting and prior to the Reverse Stock Split) and percentage of
votes for election and abstentions as set forth next to their respective
names below:
Nominee for Director For Abstain
-------------------- ---------- ---------
Bruce M. Goldberg 17,332,632 91.6% 1,580,690 8.4%
Howard L. Flanders 17,332,682 91.6% 1,580,640 8.4%
The other directors whose term of office as directors continued after the
Annual Meeting are Paul Goldberg, Rick Gordon, Sheldon Lieberbaum, S. Cye
Mandel and Daniel M. Robbin.
(c) The following four additional matters were separately voted upon at the
Annual Meeting and each of the matters received the votes (not reflecting
and prior to the Reverse Stock Split) of the holders of the number of
shares of Common Stock and in the case of all of the proposals, except
proposal (1), the percentage of total votes cast by holders represented in
person or by proxy at the Annual Meeting, and, in the case of proposal (1),
the percentage of the total number of outstanding shares of Common Stock
entitled to notice of and to vote, as of the record date for the Annual
Meeting, as indicated below:
(1) Proposal to approve an amendment to the Company's Certificate of
Incorporation to effect the Reverse Stock Split of the Company's
outstanding Common Stock
For 17,166,620 87.2%
Against 1,605,327 8.2%
Abstain 141,375 0.7%
(2) Proposal to approve the increase in the number of shares of Common
Stock reserved for issuance under the Company's Stock Option Plan
For 6,870,751 65.8%
Against 3,448,496 33.0%
Abstain 129,975 1.2%
(3) Proposal to approve the extension of the term and expiration date of
the Stock Option Plan to April 18, 2009
For 7,745,269 71.3%
Against 2,859,664 26.3%
Abstain 260,917 2.4%
(4) Proposal to ratify the selection of Lazar Levine & Felix LLP as the
Company's independent public accountants for the year ending December
31, 1999
For 17,843,548 94.4%
Against 874,422 4.6%
Abstain 195,352 1.0%
10
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ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
================================================================================
There were 8,464,100 and 8,047,472 broker or nominee non-votes for
proposals (2) and (3) above, respectively.
(d) Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
--------
3.1 Certificate of Amendment of Certificate of Incorporation dated
June 1, 1999 of the Company.
4.1 Specimen Certificate of Common Stock (after giving effect to
Reverse Stock Split).
10.1 Amended and Restated All American Semiconductor, Inc.
Employees', Officers', Directors' Stock Option Plan (as
amended through June 1, 1999).
11.1 Statement Re: Computation of Per Share Earnings (Unaudited).
27.1 Financial Data Schedule.
(b) Reports On Form 8-K
-------------------
A Current Report on Form 8-K dated May 24, 1999 was filed on May 25,
1999, reporting in Item 5 thereof the authorization by the Company's
Board of Directors of the repurchase of up to $2 million in purchase
price of the Company's Common Stock. On June 1, 1999, a Current Report
on Form 8-K dated June 1, 1999, was filed reporting in Item 5 thereof
the approval, at the Annual Meeting held on the same day, of the
Reverse Stock Split which became effective for trading in the
Company's Common Stock as of June 2, 1999.
------------------------
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
All American Semiconductor, Inc.
------------------------------------------------
(Registrant)
Date: August 12, 1999 /s/ PAUL GOLDBERG
------------------------------------------------
Paul Goldberg, Chairman of the Board
(Duly Authorized Officer)
Date: August 12, 1999 /s/ HOWARD L. FLANDERS
------------------------------------------------
Howard L. Flanders, Executive Vice President and
Chief Financial Officer
(Principal Financial and Accounting Officer)
11
Exhibit 3.1
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
ALL AMERICAN SEMICONDUCTOR, INC.
-----------------------
The undersigned, President and Corporate Secretary of All American
Semiconductor, Inc., a Delaware corporation (the "Corporation"), do hereby
certify:
FIRST: That at a special meeting of the Board of Directors the
following resolution was duly adopted in accordance with the provisions of
Section 242 of the General Corporation Law of the State of Delaware and the
By-laws of the Corporation, setting forth a proposed amendment to the
Certificate of Incorporation of the Corporation, as previously amended,
declaring said amendment to be advisable and directing that said amendment be
submitted at the next annual meeting of the shareholders of the Corporation for
consideration thereof. The resolution setting forth the proposed amendment is as
follows:
RESOLVED, that, subject to obtaining the approval of
shareholders of the Corporation holding a majority of the
outstanding shares of common stock of the Corporation, Article 4
of the Certificate of Incorporation of the Corporation, as
previously amended (the "Certificate"), be, and it hereby is
authorized and deemed advisable to be, further amended by adding,
at the end thereof, the following additional paragraphs (the
"Reverse Stock Split Amendment"):
"Simultaneously with the effective date of
this Certificate of Amendment (the "Effective
Date"), all issued and outstanding shares of common
stock ("Existing Common Stock") shall be and hereby
are automatically combined and reclassified as
follows: each five (5) shares of Existing Common
Stock shall be combined and reclassified (the
"Reverse Stock Split") as one share of issued and
outstanding common stock ("New Common Stock"),
provided, that there shall be no fractional shares
of New Common Stock. In the case of any holder of
fewer than five (5) shares of Existing Common Stock
or any number of shares of Existing Common Stock
which, when divided by five (5), does not result in
a whole number (a "Fractional Shareholder"), the
fractional share interest of New Common Stock held
by any Fractional Shareholder as a result of the
Reverse Stock Split shall be rounded up to the
nearest whole share of New Common Stock.
The Corporation shall, through its transfer
agent, provide certificates representing New Common
Stock to holders of Existing Common Stock in
exchange for certificates representing Existing
Common Stock. From and after the Effective Date,
certificates representing shares of Existing Common
Stock are hereby canceled and shall represent only
the right of the holders thereof to receive New
Common Stock.
From and after the Effective Date, the term
"New Common Stock" as used in this Article 4 shall
mean common stock as provided in this Certificate of
Incorporation. The par value of the common stock
shall remain as otherwise provided in Article 4 of
this Certificate of Incorporation."
<PAGE>
SECOND: That thereafter, pursuant to the resolution of the Board of
Directors, an annual meeting of the shareholders of the Corporation was duly
called and held, upon notice in accordance with Section 222 of the General
Corporation Law of the State of Delaware, at which meeting the necessary number
of shares as required by statute were voted in favor of the Reverse Stock Split
Amendment.
THIRD: That said amendment to the Certificate of Incorporation was
duly adopted in accordance with the provisions of Section 242 of the General
Corporation Law of the State of Delaware and, accordingly, Article 4 of the
Certificate of Incorporation is amended as provided herein.
FOURTH: That said amendment shall be effective at 11:59 P.M., daylight
savings time, on the date this Certificate of Amendment is filed and accepted by
the Secretary of State of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this certificate to be
signed by Bruce M. Goldberg, its President, and Howard L. Flanders, its
Corporate Secretary, this 1st day of June, 1999.
/s/ BRUCE M. GOLDBERG
-------------------------------------------
Bruce M. Goldberg, President
/s/ HOWARD L. FLANDERS
-------------------------------------------
Howard L. Flanders, Corporate Secretary
STATE OF FLORIDA )
) SS:
COUNTY OF MIAMI-DADE )
The foregoing instrument was acknowledged before me this 1st day of
June, 1999, by Bruce M. Goldberg, as President of All American Semiconductor,
Inc., a Delaware corporation, on behalf and as the act and deed of said
corporation. He is personally known to me or has produced identification and he
swore that the facts stated therein are true and correct.
Sign Name: /s/ GAIL G. BOLDEN
-----------------------
Print Name: Gail G. Bolden
-----------------------
My Commission Expires: 8/9/2002 NOTARY PUBLIC
Serial No (none, if blank):CC765907
--------
[NOTARIAL SEAL]
STATE OF FLORIDA )
) SS:
COUNTY OF MIAMI-DADE )
The foregoing instrument was acknowledged before me this 1st day of
June, 1999, by Howard L. Flanders, as Corporate Secretary of All American
Semiconductor, Inc., a Delaware corporation, on behalf and as the act and deed
of said corporation. He is personally known to me or has produced identification
and he swore that the facts stated therein are true and correct.
Sign Name: /s/ GAIL G. BOLDEN
-----------------------
Print Name: Gail G. Bolden
-----------------------
My Commission Expires: 8/9/2002 NOTARY PUBLIC
Serial No (none, if blank):CC765907
--------
[NOTARIAL SEAL]
2
Exhibit 4.1
SPECIMEN STOCK CERTIFICATE
NUMBER
AAS________ COMMON STOCK
SHARES
NEW COMMON STOCK
ALL AMERICAN SEMICONDUCTOR, INC.
A DELAWARE CORPORATION
CUSIP 016557 40 7
SEE REVERSE FOR
CERTAIN DEFINITIONS
THIS
CERTIFIES
THAT
IS THE
OWNER OF
FULLY PAID AND NONASSESSABLE SHARES OF COMMON STOCK, $.01 PAR VALUE PER SHARE,
OF
ALL AMERICAN SEMICONDUCTOR, INC.
CERTIFICATE OF STOCK
(the "Company"), transferable in person or by duly authorized attorney upon
surrender of this Certificate properly enclosed. The holder hereof accepts said
shares of common stock with notice of, and subject to, the provisions of the
Company's Certificate of Incorporation and Bylaws and all amendments thereto.
This Certificate is not valid unless countersigned by the Transfer Agent.
WITNESS the facsimile seal of the Company and the facsimile signatures of its
duly authorized officers.
Dated:
[CORPORATE SEAL]
/s/ HOWARD FLANDERS /s/ BRUCE M. GOLDBERG
VICE PRESIDENT, CORPORATE SECRETARY PRESIDENT
AND CHIEF FINANCIAL OFFICER
COUNTERSIGNED:
AMERICAN STOCK TRANSFER & TRUST COMPANY
(NEW YORK, N.Y.)
TRANSFER AGENT
AUTHORIZED SIGNATURE
<PAGE>
The Corporation shall furnish without charge to each stockholder who so
requests a statement of the powers, designations, preferences and relative,
participating, optional or other special rights of each class of stock of the
Corporation or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights. Such request shall be made to
the Corporation's Secretary at the principal office of the Corporation.
The following abbreviations, when used in the inscription on the face
of this Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM-as tenants in common UNIF GIFT MIN ACT-......Custodian......
TEN ENT-as tenants by the entireties (Cust) (Minor)
JT TEN-as joint tenants with right of under Uniform Gifts to
survivorship and not as tenants Minors Act.......
in common (State)
Additional abbreviations may also be used though not in the above list.
For value received_______________hereby sell, assign and transfer unto
Please insert Social Security or other
identifying number of assignee, if any
- ----------------------------------------
- ----------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Please print or typewrite name and address including postal zip code of assignee
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares of the Common Stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint
- ----------------------------------------------------------------------- Attorney
to transfer the said stock on the books of the Company with full power of
substitution in the premises.
Signature
-----------------------------------
NOTICE: The signature to this
assignment must correspond with the
name as written upon the face of
the Certificate, in every
particular without alteration or
enlargement, or any change
Date: ________________________________ whatever.
Exhibit 10.1
AMENDED AND RESTATED
ALL AMERICAN SEMICONDUCTOR, INC.
EMPLOYEES', OFFICERS', DIRECTORS'
STOCK OPTION PLAN*
1. PURPOSE. The purpose of the Amended and Restated All American
Semiconductor, Inc. Employees', Officers', Directors' Stock Option Plan (the
"Plan") is to secure for All American Semiconductor, Inc. and its subsidiaries,
if any (hereinafter collectively the "Company") and its stockholders the
benefits of the additional incentive, inherent in the ownership of the Company's
common stock (the "Common Stock"), by selected key employees and non-employee
directors and independent contractors of the Company who are important to the
success and growth of the business of the Company and to help the Company secure
and retain the services of such employees, non-employee directors and
independent contractors. Options granted under the Plan will be either
"incentive stock options", intended to qualify as such under the provisions of
Section 422 of the Internal Revenue Code of 1986, as from time to time amended
(the "Code"), or "non-qualified stock options." For purposes of the Plan, the
terms "parent" and "subsidiary" shall mean "parent corporation" and "subsidiary
corporation", respectively, as such terms are defined in Sections 424(e) and (f)
of the Code.
2. STOCK OPTION COMMITTEE.
2.1 ADMINISTRATION. The Plan shall be administered by the
Compensation Committee of the Board of Directors (the "Committee"). The
Committee shall consist of not less than two members of the Board of Directors,
each of whom is a "non-employee director" as defined in Rule 16b-3 promulgated
under Section 16(b) of the Securities Exchange Act of 1934, as amended. Once
appointed, the Committee shall continue to serve until otherwise directed by the
Board of Directors. From time to time the Board of Directors may increase the
size of the Committee and appoint additional members thereof, remove members
(with or without cause), and appoint new members in substitution therefor, and
fill vacancies however caused; provided, however, that at no time shall a
Committee of less than two members of the Board of Directors administer the
Plan, and provided, further, that all members of the Committee must be
"non-employee directors" as defined in Rule 16b-3.
2.2 PROCEDURES. Subject to the provisions of this Plan, the
Committee shall adopt such rules and regulations as it shall deem appropriate
concerning the holding of its meetings and the administration of the Plan. All
determinations and actions of the Committee shall be made by not less than a
majority of its members.
2.3 INTERPRETATION. The Committee shall have full power and
authority to interpret the provisions of the Plan, and its decisions shall be
final and binding on all interested parties.
- -----------------
*As amended through June 1, 1999, and after giving effect to the
one-for-five reverse stock split of the Company's outstanding Common Stock (see
Paragraph 14 herein).
<PAGE>
2.4 LIABILITY. No member of the Board of Directors of the
Company or the Committee shall be liable for any action or determination made in
good faith with respect to the Plan or any option granted under it.
3. SHARES SUBJECT TO OPTIONS.
3.1 NUMBER OF SHARES. Subject to the provisions of Paragraph 12
and to any adjustments required upon changes in capitalization to prevent
dilution or enlargement of the shares issuable pursuant to the Plan by reason of
any stock split, stock dividend, combination of shares, recapitalization, or
other change in the capital structure of the Company, the number of shares of
Common Stock subject at any one time to options granted under the Plan, plus the
number of shares of Common Stock theretofore issued or delivered pursuant to the
exercise of options granted under the Plan, shall not exceed 900,000 shares. If
and to the extent that options granted under the Plan terminate, expire or are
cancelled without having been exercised, new options may be granted under the
Plan with respect to the shares of Common Stock covered by such terminated,
expired or cancelled options; PROVIDED that the granting and terms of such new
options shall in all respects comply with the provisions of the Plan. In no
event shall any options be granted under the Plan after April 18, 2009.
3.2 CHARACTER OF SHARES. Shares of Common Stock delivered upon
the exercise of options granted under the Plan may be authorized and unissued
Common Stock, issued Common Stock held in the Company's treasury, or both.
3.3 RESERVATION OF SHARES. There shall be reserved at all times
for sale under the Plan a number of shares of Common Stock (authorized and
unissued Common Stock, issued Common Stock held in the Company's treasury, or
both) equal to the maximum number of shares which may be purchased pursuant to
options granted or that may be granted under the Plan.
4. GRANT OF OPTIONS. The Committee shall determine, within the limitations
of the Plan, the employees and non-employee directors of the Company and
independent contractors to whom options are to be granted, the number of shares
that may be purchased under each option, the option price, the vesting and
exercise schedule and any conditions or terms of vesting and exercise of each
option, including, but not limited to, vesting and exercise upon a change in
control of the Company, events that may permit acceleration of vesting and
exercise and the period after termination of employment or directorship that an
Option may be exercised, and shall designate options at the time of grant as
either "incentive stock options" or "non-qualified options;" PROVIDED that the
"Fair Market Value" (as hereinafter defined) (determined as of the time the
option is granted) of the Common Stock with respect to which incentive stock
options are exercisable for the first time by any individual during any calendar
year (under all plans of the individual's employer corporation and its parent
and subsidiary corporations) shall not exceed $100,000; PROVIDED, FURTHER, that
non-employee directors and independent contractors may be granted only
non-qualified stock options. In determining the employees, non-employee
directors and independent contractors to whom options shall be granted, the
Committee shall take into consideration the employee's, non-employee director's
and independent contractor's present and potential contribution to the success
of the Company and other such factors as the Committee may deem proper and
relevant. Each option granted under the Plan shall be evidenced by a written
agreement between the
2
<PAGE>
Company and the Optionee (as defined in Paragraph 5) in such form, not
inconsistent with the provisions of the Plan, or with Section 422 of the Code
for incentive stock options, as the Committee shall provide. Options designated
as incentive stock options that fail to continue to meet the requirements of
Section 422 of the Code shall be redesignated non-qualified stock options
automatically without further action by the Committee on the date of such
failure to continue to meet the requirements of Section 422 of the Code.
"Fair Market Value" on any day shall be the average of the market price of
a share of Common Stock for each of the seven (7) consecutive business days
preceding such day; the market price on each such day shall be (i) if the Common
Stock is listed on a securities exchange (including for purposes hereof 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
Stock is not listed on a securities exchange, the mean between the closing bid
and asked prices as quoted by the National Association of Securities Dealers,
Inc. through 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 Committee determines to be reasonable, provided, however,
that in no event shall the fair market value be less than the Common Stock's par
value. Notwithstanding the foregoing, if on, or within ten (10) days prior to,
the date of grant of any options hereunder, a registration statement filed by
the Company with the Securities and Exchange Commission in connection with a
public offering of Common Stock becomes effective, the fair market value of a
share of such Common Stock for purposes hereof shall be the public offering
price per share of Common Stock being offered pursuant to such offering.
5. PERSONS ELIGIBLE. Options may be granted under the Plan to any key
employee or prospective key employee (conditioned upon, and effective not
earlier than, his or her becoming an employee) of the Company, including without
limitation by way of specification, the Chief Executive Officer, Chief Operating
Officer, President, Senior Vice Presidents, Chief Financial Officer and other
officers and non-employee directors or prospective non-employee directors
(conditioned upon, and effective not earlier than, an individual becoming a
director) and other employees of the Company as approved by the Committee, or
any person who is an independent contractor associated with and rendering
services to the Company and who, in the opinion of the Committee, is in a
position to materially contribute to the continued growth and development of the
Company and its future financial success. No incentive stock options may be
granted under the Plan to any person, who owns, directly or indirectly (within
the meaning of Sections 422(b)(6) and 424(d) of the Code), at the time the
incentive stock option is granted, stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or its parent, if
any, or its subsidiaries, if any, unless the option price is at least 110% of
the Fair Market Value of the shares subject to the option, determined on the
date of the grant, and the option by its terms is not exercisable after the
expiration of five years from the date such option is granted.
3
<PAGE>
An individual receiving any option under the Plan is hereinafter referred
to as an "Optionee." Any reference herein to the employment of an Optionee by
the Company shall include his or her employment by the Company or its
subsidiaries, if any.
6. OPTION PRICE. Subject to Paragraph 12, the option price of each share
of Common Stock purchasable under any incentive stock option or non-qualified
stock option granted under the Plan shall be not less than the Fair Market Value
of such shares of Common Stock on the date the option is granted. For purposes
of this Paragraph, the time at which an option is granted, in case of the grant
of an option to a prospective key employee or prospective non-employee director,
shall be deemed to be the date of such grant. The option price of any option
issued in a transaction described in Section 424(a) of the Code shall be an
amount which conforms to the requirements of that section and the regulations
thereunder.
7. EXPIRATION AND TERMINATION OF THE PLAN.
7.1 GENERAL. Options may be granted under the Plan at any time
and from time to time on or prior to April 18, 2009 (the "Expiration Date"),
which is ten years from the effective date of the last amendment to the Plan
extending the term to such date and on which date the Plan will expire except as
to options then outstanding under the Plan. Such outstanding options shall
remain in effect until they have been exercised, terminated or have expired. The
Plan may be terminated, modified or amended by the Board of Directors at any
time on or prior to the Expiration Date, except with respect to any options then
outstanding under the Plan; PROVIDED, however, that the approval of the
Company's shareholders will be required for any amendment which would (i) change
the class of persons eligible for the grant of options, as specified in
Paragraph 5 or otherwise materially modify the requirements as to eligibility
for participation in the Plan, (ii) increase the maximum number of shares
subject to options, as specified in Paragraph 3 (unless made pursuant to the
provisions of Paragraph 12) or (iii) materially increase the benefits accruing
to participants under the Plan, within the meaning of Rule 16b-3 promulgated
under the Securities Exchange Act of 1934, as amended ("1934 Act"). With respect
to persons subject to Section 16 of the 1934 Act, transactions under the Plan
are intended to comply with all applicable conditions of Rule 16b-3 or its
successors under the 1934 Act. To the extent any provision of the Plan or action
by the Committee fails to so comply, it shall be deemed null and void, to the
extent permitted by law and deemed advisable by the Committee. Moreover, in the
event the Plan does not include a provision required by Rule 16b-3 to be stated
therein, such provision (other than one relating to eligibility requirements, or
the price and amount of awards) shall be deemed automatically to be incorporated
by reference into the Plan insofar as participants subject to Section 16 are
concerned.
7.2 MODIFICATIONS. The Committee may make such modifications,
extensions, renewals or other changes in any option granted under the Plan after
the grant of such option, provided such modifications, extensions, renewals or
other changes are consistent with the provisions of the Plan and do not
disqualify an incentive stock option under the provisions of Section 422 of the
Code.
4
<PAGE>
8. EXERCISABILITY AND DURATION OF 0PTIONS.
8.1 DETERMINATION OF COMMITTEE; ACCELERATION. Each option
granted under the Plan shall vest and be exercisable at such time or times, or
upon the occurrence of such event or events, and in such amounts, as the
Committee may provide upon the granting thereof. Subsequent to the grant of an
option which is not immediately exercisable in full, the Committee, at any time
before complete termination of such option, may accelerate the time or times at
which such option may be exercised in whole or in part. Any option granted under
the Plan shall be exercisable upon the death of the Optionee or upon the
termination of the Optionee's employment by or Optionee's acting as a
non-employee director of the Company by reason of his illness or disability to
the extent such option was exercisable by the Optionee immediately prior to such
event, unless otherwise expressly provided in the option at the time it is
granted. Each option granted under the Plan shall be for a term not in excess of
ten (10) years from the date of its grant.
9. EXERCISE OF OPTIONS; CERTAIN LEGAL AND OTHER RESTRICTIONS.
9.1 EXERCISE. Subject to all of the provisions of the Plan and
the terms of the applicable option agreement, options granted under the Plan
shall be exercised by the Optionee (or by his or her personal representatives,
executors or administrators, as provided in Paragraph 10) as to all or part of
the shares covered thereby, by the giving of written notice of exercise to the
Company, specifying the number of shares to be purchased, accompanied by payment
of the full purchase price for the shares being purchased. Payment of such
purchase price shall be made (a) by check payable to the Company, or (b) with
the consent of the Committee or to the extent provided in an applicable option
agreement, by delivery of shares of Common Stock having a Fair Market Value
(determined as of the date such option is exercised) equal to all or part of the
purchase price, and, if applicable, of a check payable to the Company for any
remaining portion of the purchase price. Such notice of exercise, accompanied by
such payment, shall be delivered to the Company at its principal business office
or such other office as the Committee may from time to time direct, and shall be
in such form, containing such further provisions consistent with the provisions
of the Plan, as the Committee may from time to time prescribe. The Company shall
effect the transfer of the shares so purchased to the Optionee (or such other
person exercising the option pursuant to Paragraph 10 hereof) as soon as
practicable, and within a reasonable time thereafter. Such transfer shall be
evidenced on the books of the Company. No Optionee or other person exercising an
option shall have any of the rights of a shareholder of the Company with respect
to shares subject to an option granted under the Plan until certificates for
such shares shall have been issued following the exercise of such option. No
adjustment shall be made for cash dividends or other rights for which the record
date is prior to the date of such issuance. In no event may any option granted
hereunder be exercised for a fraction of a share.
9.2 WITHHOLDING TAX. Whenever under the Plan shares of stock
are to be delivered upon exercise of a non-qualified stock option, the Company
shall be entitled to require as a condition of delivery that the Optionee remit
or, in appropriate cases, agree to remit when due an amount sufficient to
satisfy all federal, state and local withholding tax requirements relating
thereto.
5
<PAGE>
If an Optionee makes a "disposition" (within the meaning of Section 424(c)
of the Code) of shares of Common Stock issued upon exercise of an incentive
stock option within two years from the date of grant or within one year from the
date the shares of Common Stock are transferred to the Optionee, the Optionee
shall, within ten days of disposition, notify the Committee and deliver to it
any withholding and employment taxes due. However, if the Optionee is a person
subject to Section 16(b) of the 1934 Act, delivery of any withholding and
employment taxes due may be deferred until ten days after the date any income on
the disposition is recognized under Section 83 of the Code. The Company may
cause a legend to be affixed to certificates representing shares of Common Stock
issued upon exercise of incentive stock options to ensure that the Committee
receives notice of disqualifying dispositions.
9.3 RESTRICTIONS ON DELIVERY OF SHARES. In and at the
discretion of the Committee, each award granted under the Plan may be subject to
the condition that, if at any time the listing, registration or qualification of
the shares covered by such award upon any securities exchange or under any state
or federal law is necessary as a condition of or in connection with the granting
of such option or the purchase or delivery of shares thereunder, the delivery of
any or all shares pursuant to exercise of the option may be withheld unless and
until such listing, registration or qualification shall have been effected;
provided, however, that the Committee, in its discretion, may agree on behalf of
the Company in connection with the granting of an award under the Plan that the
Company will use its best efforts to effect and continuously maintain any and
all such listings, registrations and qualifications. The Committee may require,
as a condition of exercise of any option, that the Optionee represent, in
writing, that the shares received upon exercise of the option are being acquired
for investment and not with a view to distribution and agree that the shares
will not be disposed of except pursuant to an effective registration statement
under the Securities Act of 1933, as amended, and only after any required
qualification under applicable state securities laws, unless the Company shall
have received an opinion of counsel satisfactory to the Company that such
disposition is exempt from such registration and qualification. The Committee
may require that there be affixed on certificates representing shares issued
upon the exercise of an option such legends referring to the foregoing
representations or any applicable restrictions on resale as the Committee, in
its discretion, shall deem reasonably appropriate as well as place such stop
transfer orders with its registrar and transfer agent as it deems reasonably
appropriate.
10. NON-TRANSFERABILITY OF OPTIONS. No option granted under the Plan or any
right evidenced thereby shall be transferable by the Optionee other than by will
or by the laws of descent and distribution or pursuant to a qualified domestic
relations order as defined by the Code or Title I of the Employment Retirement
Income Security Act, or the rules thereunder, and, except with respect to a
qualified domestic relations order as aforesaid, an option may be exercised,
during the lifetime of an Optionee, only by such Optionee.
11. RIGHT TO TERMINATE EMPLOYMENT. Nothing in the Plan or in any option
granted under the Plan shall confer upon any Optionee the right to continue in
the employment or as a director of the Company or affect the right of the
Company to terminate the Optionee's employment or directorship at any time,
subject, however, to the provisions of any agreement of employment between the
Optionee and the Company.
6
<PAGE>
12. ADJUSTMENT UPON CHANGES IN CAPITALIZATION, ETC. In the event of any
stock split, stock dividend, combination of shares, reclassification or
recapitalization which changes the character or amount of the Company's
outstanding Common Stock while any portion of any option theretofore granted
under the Plan is outstanding but unexercised, the Committee shall make such
adjustments in the character and number of shares subject to such options and in
the option price, as shall be equitable and appropriate in order to make the
option, as nearly as may be practicable, equivalent to such option immediately
prior to such change; PROVIDED, however, that no such adjustment shall give any
Optionee any additional benefits under his or her option; and PROVIDED FURTHER,
that, with respect to any outstanding incentive stock option, if any such
adjustment is made by reason of a transaction described in section 424(a) of the
Code, it shall be made so as to conform to the requirements of that section and
the regulations thereunder.
If any transaction (other than a change specified in the preceding
paragraph) described in section 424(a) of the Code affects the Company's Common
Stock subject to any unexercised option theretofore granted under the Plan
(hereinafter for purposes of this Paragraph 12 referred to as the "old option"),
the Board of Directors of the Company or any surviving or acquiring corporation
may take such action as it deems appropriate, and in conformity with the
requirements of that section and the regulations thereunder, to substitute a new
option for the old option, in order to make the new option, as nearly as may be
practicable, equivalent to the old option, or to assume the old option.
If any such change or transaction shall occur, the number and kind of
shares for which options may thereafter be granted under the Plan shall be
adjusted to give effect thereto.
13. APPLICATION OF FUNDS. The proceeds received by the Company from the
sale of the Common Stock may be commingled with any other corporate funds and
used for any corporate purpose.
14. AMENDMENT OF PLAN. The Plan was amended, by action taken by the Board
of Directors of the Company on April 19, 1999, which was approved by the
shareholders of the Company at the Company's annual meeting of shareholders held
on June 1, 1999, as follows: (i) to increase the number of shares of Common
Stock reserved for issuance under the Plan to 4,500,000 shares (before giving
effect to the one-for-five reverse stock split of the Company's outstanding
Common Stock effective as of 11:59 p.m., daylight savings time, on June 1, 1999,
which reduced the number of shares of Common Stock reserved for issuance under
the Plan to 900,000 shares), and (ii) the extension of the term and expiration
date of the Plan to April 18, 2009.
7
<TABLE>
<CAPTION>
ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES EXHIBIT 11.1
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS (UNAUDITED)
QUARTERS SIX MONTHS
PERIODS ENDED JUNE 30 1999 1998 1999 1998
- ------------------------------------------------------------------------------------------------------------------
BASIC EARNINGS PER SHARE:
<S> <C> <C> <C> <C>
Net Income....................................... $ 247,000 $ 1,010,000 $ 441,000 $ 1,528,000
============= ============= ============= =============
Weighted Average Shares Outstanding (1).......... 3,937,371 3,936,719 3,937,371 3,936,719
============= ============= ============= =============
Basic Earnings Per Share (1)..................... $ .06 $ .26 $ .11 $ .39
===== ===== ===== =====
DILUTED EARNINGS PER SHARE:
Net Income....................................... $ 247,000 $ 1,010,000 $ 441,000 $ 1,528,000
============= ============= ============= =============
Weighted Average and Dilutive Shares (1):
Weighted average shares outstanding............ 3,937,371 3,936,719 3,937,371 3,936,719
Dilutive shares................................ -- 119,186 -- 106,787
------------- ------------- ------------- -------------
3,937,371 4,055,905 3,937,371 4,043,506
============= ============= ============= =============
Diluted Earnings Per Share (1)................... $ .06 $ .25 $ .11 $ .38
===== ===== ===== =====
</TABLE>
(1) Restated to reflect a one-for-five reverse stock split which became
effective June 1, 1999.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information from the Registrant's
consolidated condensed financial statements as of and for the six months ended
June 30, 1999, and is qualified in its entirety by reference to such
consolidated financial statements.
</LEGEND>
<CIK> 0000818074
<NAME> ALL AMERICAN SEMICONDUCTOR, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 365
<SECURITIES> 0
<RECEIVABLES> 49,371
<ALLOWANCES> 1,777
<INVENTORY> 77,093
<CURRENT-ASSETS> 127,528
<PP&E> 10,384
<DEPRECIATION> 6,108
<TOTAL-ASSETS> 136,094
<CURRENT-LIABILITIES> 49,881
<BONDS> 59,263
0
0
<COMMON> 40
<OTHER-SE> 26,910
<TOTAL-LIABILITY-AND-EQUITY> 136,094
<SALES> 150,523
<TOTAL-REVENUES> 150,523
<CGS> 121,612
<TOTAL-COSTS> 121,612
<OTHER-EXPENSES> 25,505
<LOSS-PROVISION> 369
<INTEREST-EXPENSE> 2,264
<INCOME-PRETAX> 773
<INCOME-TAX> 332
<INCOME-CONTINUING> 441
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 441
<EPS-BASIC> .11
<EPS-DILUTED> .11
</TABLE>
