-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JLatJxBxCRmMhqowG/9oUQPqCXsHnKB60sxs6kDkNssvHJkWbASnb2DfB7aX+UlY ECbYJXXjhB7GsbJ6/8xZew== 0001019056-98-000668.txt : 19981118 0001019056-98-000668.hdr.sgml : 19981118 ACCESSION NUMBER: 0001019056-98-000668 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALL AMERICAN SEMICONDUCTOR INC CENTRAL INDEX KEY: 0000818074 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-ELECTRONIC PARTS & EQUIPMENT, NEC [5065] IRS NUMBER: 592814714 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-16207 FILM NUMBER: 98749529 BUSINESS ADDRESS: STREET 1: 16115 N W 52ND AVENUE CITY: MIAMI STATE: FL ZIP: 33014 BUSINESS PHONE: 3056218282 MAIL ADDRESS: STREET 1: 16115 NW 52ND AVENUE CITY: MIAMI STATE: FL ZIP: 33014 10-Q 1 FORM 10-Q ================================================================================ 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 SEPTEMBER 30, 1998 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 November 11, 1998, 19,866,906 shares (including 160,703 shares held by a wholly-owned subsidiary of the Registrant) of the common stock of All American Semiconductor, Inc. were outstanding. ================================================================================
ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES FORM 10-Q - INDEX Part Item Page No. No. Description No. - ------------------------------------------------------------------------------------------------- I FINANCIAL INFORMATION: 1. Financial Statements Consolidated Condensed Balance Sheets at September 30, 1998 (Unaudited) and December 31, 1997........................................ 1 Consolidated Condensed Statements of Income for the Quarters and Nine Months Ended September 30, 1998 and 1997 (Unaudited)............ 2 Consolidated Condensed Statements of Cash Flows for the Nine Months Ended September 30, 1998 and 1997 (Unaudited)................ 3 Notes to Consolidated Condensed Financial Statements (Unaudited)........... 4 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.................................................... 6 II OTHER INFORMATION: 6. Exhibits and Reports on Form 8-K........................................... 9 SIGNATURES................................................................. 9
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ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS SEPTEMBER 30 DECEMBER 31 ASSETS 1998 1997 - ------------------------------------------------------------------------------------------------------------------ (UNAUDITED) Current assets: Cash .............................................................. $ 101,000 $ 444,000 Accounts receivable, less allowances for doubtful accounts of $1,201,000 and $1,166,000............................. 32,170,000 32,897,000 Inventories......................................................... 64,709,000 67,909,000 Other current assets................................................ 2,648,000 2,074,000 --------------- --------------- Total current assets.............................................. 99,628,000 103,324,000 Property, plant and equipment - net................................... 4,538,000 4,779,000 Deposits and other assets............................................. 3,050,000 3,157,000 Excess of cost over fair value of net assets acquired - net........... 1,076,000 1,026,000 --------------- --------------- $ 108,292,000 $ 112,286,000 =============== =============== LIABILITIES AND SHAREHOLDERS' EQUITY - ------------------------------------------------------------------------------------------------------------------ Current liabilities: Current portion of long-term debt................................... $ 315,000 $ 304,000 Accounts payable and accrued expenses............................... 32,053,000 39,154,000 Income taxes payable................................................ 556,000 389,000 Other current liabilities........................................... 141,000 169,000 --------------- --------------- Total current liabilities......................................... 33,065,000 40,016,000 Long-term debt: Notes payable....................................................... 40,282,000 39,084,000 Subordinated debt................................................... 6,209,000 6,293,000 Other long-term debt................................................ 1,220,000 1,219,000 --------------- --------------- 80,776,000 86,612,000 --------------- --------------- 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, 19,866,906 and 20,353,894 shares issued, 19,866,906 and 19,863,895 shares outstanding...................... 199,000 199,000 Capital in excess of par value...................................... 25,592,000 25,588,000 Retained earnings................................................... 2,176,000 338,000 Treasury stock, at cost, 180,295 shares............................. (451,000) (451,000) --------------- --------------- 27,516,000 25,674,000 --------------- --------------- $ 108,292,000 $ 112,286,000 =============== ===============
See notes to consolidated condensed financial statements 1
ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED) QUARTERS NINE MONTHS PERIODS ENDED SEPTEMBER 30 1998 1997 1998 1997 - ------------------------------------------------------------------------------------------------------------------ NET SALES.................................. $ 59,027,000 $ 69,771,000 $ 185,538,000 $ 200,141,000 Cost of sales.............................. (45,896,000) (54,453,000) (143,742,000) (155,487,000) --------------- --------------- --------------- --------------- Gross profit............................... 13,131,000 15,318,000 41,796,000 44,654,000 Selling, general and administrative expenses.................. (11,516,000) (12,142,000) (35,308,000) (37,401,000) --------------- --------------- --------------- --------------- INCOME FROM OPERATIONS..................... 1,615,000 3,176,000 6,488,000 7,253,000 Interest expense........................... (1,071,000) (1,199,000) (3,263,000) (3,655,000) --------------- --------------- --------------- --------------- INCOME BEFORE INCOME TAXES................. 544,000 1,977,000 3,225,000 3,598,000 Income tax provision....................... (234,000) (850,000) (1,387,000) (1,547,000) --------------- --------------- --------------- --------------- NET INCOME................................. $ 310,000 $ 1,127,000 $ 1,838,000 $ 2,051,000 =============== =============== =============== =============== Earnings per share: Basic and diluted........................ $ .02 $ .06 $ .09 $ .10 ====== ====== ====== ======
See notes to consolidated condensed financial statements 2
ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) NINE MONTHS ENDED SEPTEMBER 30 1998 1997 - ------------------------------------------------------------------------------------------------------------------ Cash Flows Provided By (Used For) Operating Activities................ $ (707,000) $ 6,262,000 ------------- -------------- Cash Flows From Investing Activities: Acquisition of property and equipment................................. (326,000) (186,000) Increase in other assets.............................................. (295,000) (83,000) ------------- -------------- Cash flows used for investing activities........................ (621,000) (269,000) ------------- -------------- Cash Flows From Financing Activities: Net borrowings (repayments) under line of credit agreement............ 1,229,000 (6,184,000) Increase in notes payable............................................. 14,000 - Repayments of notes payable........................................... (262,000) (214,000) Net proceeds from issuance of equity securities....................... 4,000 15,000 ------------- -------------- Cash flows provided by (used for) financing activities.......... 985,000 (6,383,000) ------------- -------------- Decrease in cash...................................................... (343,000) (390,000) Cash, beginning of period............................................. 444,000 525,000 ------------- -------------- Cash, end of period................................................... $ 101,000 $ 135,000 ============= ============== Supplemental Cash Flow Information: Interest paid......................................................... $ 3,170,000 $ 3,970,000 ============= ============== Income taxes paid - net............................................... $ 1,223,000 $ 115,000 ============= ==============
See notes to consolidated condensed financial statements 3 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 September 30, 1998, 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, 1997) and additional financial information, see the Company's Annual Report on Form 10-K for the year ended December 31, 1997, including the consolidated financial statements and notes thereto which should be read in conjunction with these financial statements. EARNINGS PER SHARE The following average shares were used for the computation of basic and diluted earnings per share:
QUARTERS NINE MONTHS PERIODS ENDED SEPTEMBER 30 1998 1997 1998 1997 - ---------------------------------------------------------------------------------------- Basic........................ 19,686,611 19,673,600 19,684,604 19,670,859 Diluted...................... 20,072,481 19,860,937 20,126,049 19,706,939
2. LONG-TERM DEBT Outstanding borrowings at September 30, 1998 under the Company's $100 million line of credit facility aggregated $40,229,000. In July 1998, the Company's credit facility was amended whereby certain financial covenants were modified. 3. OPTIONS During the quarters ended June 30 and September 30, 1998, no stock options were granted by the Company. During the quarter ended March 31, 1998, the Company granted an aggregate of 195,000 stock options to 31 individuals pursuant to the Employees', Officers', Directors' Stock Option Plan, as previously amended and restated. These options have an exercise price of $1.44 per share (market value at date of grant) and generally vest over a five-year period and are exercisable over a six-year period. During the nine months ended September 30, 1998, 3,011 stock options were exercised at prices ranging from $1.07 to $1.24 per share and 66,250 stock options were canceled at exercise prices ranging from $1.00 to $1.44 per share. 4. ACQUISITIONS In connection with the December 29, 1995 acquisitions of all of the capital stock of Added Value Electronics Distribution, Inc. and A.V.E.D.-Rocky Mountain, Inc. (collectively the "Added Value Companies"), the Company paid approximately $107,000 of additional consideration to certain of the selling stockholders of the Added Value Companies since the aggregate value of the shares of the 4 ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED) ================================================================================ Company's common stock issued to these individuals did not, by June 30, 1998, appreciate in the aggregate by $107,000. The additional consideration is included in excess of cost over fair value of net assets acquired in the accompanying Consolidated Condensed Balance Sheet as of September 30, 1998. The Company has not included in excess of cost over fair value of net assets acquired as of September 30, 1998 approximately $159,000 of additional consideration that would have been payable to another selling stockholder of the Added Value Companies since such additional consideration has been applied by the Company to partially satisfy certain claims alleged by the Company against such selling stockholder arising with respect to the transaction with the Added Value Companies. 5. MERGER TERMINATION In June 1998, the Company signed a letter of intent with Reptron Electronics, Inc. ("Reptron") regarding the merger of Reptron's distribution operations with the Company (the "Merger"). Subsequent to the balance sheet date, Merger negotiations between the Company and Reptron were terminated. 5 ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES 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, 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 Net sales for the quarter and nine months ended September 30, 1998 were $59.0 million and $185.5 million, representing a 15.4% and 7.3% decrease from net sales of $69.8 million and $200.1 million for the same periods of 1997. The decreases in net sales were attributable to market conditions and the continued decline in unit prices on certain products as well as the negative impact of the distractions caused by a proposed merger which did not occur. Gross profit was $13.1 million and $41.8 million for the third quarter and first nine months of 1998, compared to $15.3 million and $44.7 million for the same periods of 1997. The decreases were due to the decrease in net sales. Gross profit margins as a percentage of net sales were 22.2% and 22.5% for the third quarter and first nine months of 1998 compared to 22.0% and 22.3% for the third quarter and first nine months of 1997. Management expects downward pressure on gross profit margins in the future. Selling, general and administrative expenses ("SG&A") was $11.5 million for the third quarter of 1998 compared to $12.1 million for the third quarter of 1997. SG&A for the first nine months of 1998 was $35.3 million compared to $37.4 million for the first nine months of 1997. The decreases reflect the continued benefits of the Company's expense control programs. SG&A as a percentage of net sales increased to 19.5% and 19.0% for the third quarter and nine months ended September 30, 1998, from 17.4% and 18.7% for the same periods of 1997. The increases in SG&A as a percentage of net sales reflect the impact of the reduction in net sales discussed above. With its present infrastructure, including the Company's excess plant capacity, the Company believes that it can support higher sales without a significant increase in fixed costs. This should result in improved operating efficiencies and greater economies of scale in the future if the Company succeeds in increasing its sales volume. SG&A in absolute dollars and as a percentage of sales may increase in the near term. Income from operations was $1.6 million and $6.5 million for the third quarter and first nine months of 1998, compared to $3.2 million and $7.3 million for the same periods of 1997. The decreases in income from operations were attributable to the decreases in net sales which more than offset the benefits derived from the Company's cost control programs. Interest expense was $1.1 million and $3.3 million for the third quarter and first nine months of 1998, as compared to $1.2 million and $3.7 million for the same periods of 1997. The decreases in interest expense 6 ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ================================================================================ for the third quarter and first nine months of 1998 as compared to the 1997 periods resulted from lower average borrowings as well as a decrease in the Company's borrowing rate. Net income was $310,000 ($.02 per share) and $1.8 million ($.09 per share) for the quarter and nine months ended September 30, 1998, compared to $1.1 million ($.06 per share) and $2.1 million ($.10 per share) for the same periods of 1997. The decrease in earnings reflects the reduction in net sales which more than offset the reduction in SG&A in absolute dollars and the decrease in interest expense. LIQUIDITY AND CAPITAL RESOURCES Working capital at September 30, 1998 increased to $66.6 million from working capital of $63.3 million at December 31, 1997. The current ratio was 3.01:1 at September 30, 1998, as compared to 2.58:1 at December 31, 1997. The increases in working capital and the current ratio were primarily due to the decreases in accounts payable and accrued expenses which were partially offset by a decrease in inventory. Accounts receivable levels at September 30, 1998 were $32.2 million, down slightly from accounts receivable of $32.9 million at December 31, 1997, reflecting a decrease in the rate of sales during the third quarter of 1998 compared to the last quarter of 1997. Inventory declined to $64.7 million at September 30, 1998 from $67.9 million at December 31, 1997. Accounts payable and accrued expenses decreased to $32.1 million at September 30, 1998 from $39.2 million at December 31, 1997. The decreases in inventory and accounts payable reflect a reduction in inventory purchases. During the first quarter of 1998, as a result of the Company satisfying certain conditions, the Company's borrowing rate under its line of credit facility was decreased by one-quarter of one percent (.25%). Additionally, during the third quarter of 1998, the Company's credit facility was amended whereby certain financial covenants were modified. At September 30, 1998, outstanding borrowings under this facility aggregated $40.2 million. In June 1998, the Company signed a letter of intent with Reptron Electronics, Inc. ("Reptron") regarding the merger of Reptron's distribution operations with the Company (the "Merger"). In October 1998, Merger negotiations between the Company and Reptron were terminated. 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. STATE OF READINESS AND COSTS TO ADDRESS 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 currently believes that its internal systems are in compliance with Year 2000 requirements or, to the extent any further required modifications are necessary, will comply with Year 2000 requirements without material expenditures of funds or internal resources. 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 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 or other third parties with which it has a business relationship. As no 7 ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ================================================================================ assessment has been made of any potential impact by customers' or other third parties' 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 third parties 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 effectiveness of the Company's business and marketing strategies, timing of delivery of products from suppliers, 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, 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, the ability of the Company to enter or expand new market areas, the availability of acquisition opportunities and the associated costs, management of growth and expenses, the Company's ability to collect accounts receivable, price decreases on inventory that is not price protected, gross profit margins, 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, a change in interest rates, the state of the general economy, and the other risks and factors detailed in this Form 10-Q and in the Company's other filings with the Securities and Exchange Commission. 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 ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES PART II. OTHER INFORMATION ================================================================================ ITEM 6. Exhibits and Reports on Form 8-K (a) EXHIBITS 10.1 Second Amendment to Employment Agreement dated as of August 21, 1998, between the Company and Paul Goldberg. 10.2 First Amendment to Employment Agreement dated as of August 21, 1998, between the Company and Bruce M. Goldberg. 10.3 First Amendment to Employment Agreement dated as of August 21, 1998, between the Company and Howard L. Flanders. 10.4 First Amendment to Employment Agreement dated as of August 21, 1998, between the Company and Rick Gordon. 10.5 Mortgage Deed dated August 21, 1998, by Bruce Mitchell Goldberg and Jayne Ellen Goldberg in favor of the Company. 11.1 Statement Re: Computation of Per Share Earnings (Unaudited). 27.1 Financial Data Schedule. (b) REPORTS ON FORM 8-K The Company did not file any reports on Form 8-K during the quarter ended September 30, 1998. ------------------------ 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: November 13, 1998 /s/ PAUL GOLDBERG ------------------------------------------------- Paul Goldberg, Chairman of the Board (Duly Authorized Officer) Date: November 13, 1998 /s/ HOWARD L. FLANDERS ------------------------------------------------- Howard L. Flanders, Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) 9 EX-10.1 2 EXHIBIT 10.1 SECOND AMENDMENT TO EMPLOYMENT AGREEMENT SECOND AMENDMENT, made and entered into as of the 21st day of August, 1998, to the Employment Agreement (the "Agreement") made and entered into on May 24, 1995, and amended pursuant to that certain First Amendment to Employment Agreement dated December 31, 1996, by and between ALL AMERICAN SEMICONDUCTOR, INC., a Delaware corporation (the "Company"), and PAUL GOLDBERG (the "Employee"). W I T N E S S E T H : WHEREAS, the Company and the Employee mutually desire and each of them is willing, in accordance with the terms and conditions specifically restated, added, deleted or otherwise set forth below, to amend the Agreement; it being understood by the Company and the Employee that all terms and conditions of the Agreement not otherwise specifically modified by this Second Amendment thereto shall remain effective and continue operating in full force throughout the entire term of the Agreement. NOW, THEREFORE, for and in consideration of the covenants and agreements hereinafter set forth, the parties hereto mutually agree as follows: 1. EXPENSES OF EMPLOYEE. Section 4 of the Agreement is hereby amended to be replaced in its entirety with the following: (a) General Expenses. The Company shall pay or reimburse Employee for reasonable expenses incurred by Employee in connection with the business of the Company. (b) Excise Tax Reimbursement and Tax Gross-up. (i) The Company shall promptly pay or reimburse Employee (collectively, the "Excise Tax Payments") for any federal income tax liability imposed pursuant to Section 4999 or Section 280G (or any successor provisions) of the Internal Revenue Code of 1986, as amended, and any similar federal, state or local tax that may be imposed in lieu thereof or in addition thereto (collectively, "Excise Tax"), in connection with the receipt of any payments or other consideration by or for the benefit of Employee with respect to this Agreement (including any increases thereto pursuant to the Gross-Up Formula, as defined below), including any imputed income to Employee relating to the acceleration of any Company benefits including vesting of stock options to purchase common stock of the Company. In addition, each Excise Tax Payment, to the extent such payment constitutes income to Employee subject to income and/or unemployment taxes, shall be increased to and include the amount computed under the Gross-Up Formula, as defined and provided below (each, as increased, a "Grossed-Up Excise Tax Payment"; collectively, the "Grossed-Up Excise Tax Payments"). Each Grossed-Up Excise Tax Payment shall be in the amount computed under the following formula (the "Gross-Up Formula"): Divide the gross taxable amount of each Excise Tax Payment (or other compensation payment subject to tax gross up pursuant to 2 this Agreement) by a number equal to one minus the sum of (i) the highest combined marginal U.S. federal, state and local individual income tax, social security tax and unemployment tax rate (or such other combined tax rate that is similar to or replaces such combined tax rate) applicable to Employee (taking into account the deductibility of any such federal, state and local taxes) that is in effect at the time each such Excise Tax Payment (or other compensation payment subject to tax gross up pursuant to this Agreement) is made and (ii) the Excise Tax rate applicable to Employee that is in effect at the time each such Excise Tax Payment (or other compensation payment subject to tax gross up pursuant to this Agreement) is made. For example, if a $100 Excise Tax Payment is subject to the Gross-Up Formula, and the highest combined marginal tax rate applicable to Employee at such time is 45% and the Excise Tax rate is 20%, the Excise Tax Payment shall be increased under the Gross-Up Formula to, and the Grossed-Up Excise Tax Payment shall be, $285.71. In addition, any interest or penalties imposed against Employee by any federal, state or local taxing authority as a result of any misclassification by the Company, not predicated upon Employee's direction or description, and reclassification as taxable income of any amounts received by Employee under this Agreement shall be paid or reimbursed by the Company and increased by the Gross-Up Formula (as increased, the "Grossed-Up Penalties and Interest"). (ii) In the event that Employee's employment is terminated and at any time prior to the receipt by Employee of any Company U.S. Form W-2, including any amendments thereto ("Form W-2"), with respect to any payments or other amounts under this Agreement, the Company undergoes a change (i) in the ownership or effective control of the Company or (ii) in the ownership of a substantial portion of the assets of the Company, as clauses (i) and (ii) are interpreted under Section 280G of the Code and the Treasury Regulations thereunder (such event, a "Potential Excise Tax Situation"), then the Company, with the advice of its accountants and/or attorneys, shall determine whether any amounts paid or imputed to Employee under this Agreement are subject to Excise Taxes. Such determination by the Company with respect to whether any amounts received during 3 the year constitute a "parachute payment" as defined under Section 280G of the Code (a "Parachute Payment") subject to Excise Taxes shall be reflected on Employee's U.S. Form W-2 with respect to such year. If the Company determines that Excise Taxes are payable, then, unless the Company has withheld the proper Excise Taxes from Employee's payments, the Company shall provide Employee with the Grossed-Up Excise Tax Payment, no later than ten days after the issuance of Employee's Form W-2 (the "Excise Tax Due Date") with respect to the amounts paid under the Agreement (which Form W-2 shall be issued in a timely manner on or before January 31st following the year of payment of the amounts subject to the Excise Tax). If the Company has withheld the proper Excise Taxes from the amounts paid to Employee, then the Company shall pay Employee, on the date Employee receives such payments from which the Excise Tax has been deducted, the difference between the Grossed-Up Excise Tax Payment and the Excise Tax withheld. If a Potential Excise Tax Situation arises and the Company determines that no payments received in connection with this Agreement are subject to Excise Taxes by Employee, then the Company shall do all of the following set forth in clauses (A) through (D) below: (A) on or before the date of issuance of Employee's Form W-2, at the Company's sole expense, a nationally-recognized CPA firm or law firm reasonably acceptable to Employee shall render a written opinion to Employee, reasonably acceptable to Employee in both substance and form, that there is substantial authority for concluding that (i) no payments received in connection with this Agreement including those reflected in the Form W-2 constitute a Parachute Payment and (ii) no Excise Taxes are due by 4 Employee with respect to any payments received in connection with this Agreement including any amounts reflected in the Form W-2; (B) on or before the date of issuance of Employee's Form W-2, Employer shall procure and deliver to Employee an irrevocable standby letter of credit for the benefit of Employee (the "Letter of Credit"), in form and content and issued by a financial institution all reasonably acceptable to Employee, for an amount equal to the aggregate of (i) the full amount of the Grossed-Up Excise Tax Payment, and (ii) an amount equal to a reasonable estimate of the amount of any Grossed-Up Penalties and Interest that would be due if Employee ultimately were to be liable for the Excise Taxes. The amount of the Letter of Credit shall be adjusted from time to time for any material changes (more than ten percent) in the estimates of the Grossed-Up Excise Tax Payment and/or the Grossed-Up Penalties and Interest). The Letter of Credit shall be payable to Employee upon demand in the event that the Company shall not have paid Employee all amounts due under this Section 1(b) within three business days after the earliest to occur of subclauses (1) and (2) below of this clause (B), if either is applicable. The Letter of Credit shall remain outstanding until the earliest of (1) the Company's agreement that the Excise Taxes are payable (requiring immediate payment by the Company to Employee of the Grossed-Up Excise Tax Payment and the Grossed-Up Penalties and Interest, and upon receipt thereof Employee shall immediately deliver the Letter of Credit to the Company), (2) a final, non-appealable determination by a court of competent jurisdiction that the Excise Taxes are payable (requiring immediate payment by the Company of the Grossed-Up Excise Tax Payment and the Grossed-Up Penalties and Interest, and upon receipt thereof Employee shall immediately deliver the 5 Letter of Credit to the Company), (3) a final, non-appealable determination by a court of competent jurisdiction that the Excise Taxes are not payable (requiring Employee to immediately deliver the Letter of Credit to the Company), and (4) the expiration of the longest statute of limitations applicable to Employee with respect to the payment of the Excise Taxes, as such statute may be extended by Employee (requiring Employee to immediately deliver the Letter of Credit to the Company). In the event that the Company and Employee dispute the amount for which the Letter of Credit shall be obtained or adjusted pursuant to clause (B) above, the Company shall procure a Letter of Credit for the greatest amount not in dispute, the amount in dispute shall be determined through litigation, if the parties cannot otherwise agree, and the amount of the Letter of Credit shall be adjusted accordingly thereafter. In the event that Employee draws down the Letter of Credit under the conditions provided above, the Company shall immediately pay to Employee any deficiency in the proceeds of the Letter of Credit compared with the final amount to be received as Grossed Up Excise Tax Payments and Grossed-Up Penalties and Interest, and Employee shall immediately reimburse the Company for any excess proceeds from the Letter of Credit compared with such final amounts; (C) the Company shall indemnify, and hold harmless Employee from and against any and all liability, damage, loss, costs, expense, penalties, interest, claims or demands (including attorneys' fees through all appeals if for any reason the Company fails to defend Employee pursuant to clause (D) below), other than consequential damages, arising out of or in any manner connected with Employee's failure to pay the Excise Taxes, and such amount of indemnification shall not be limited in amount; and 6 (D) the Company shall, at its sole cost and expense, defend Employee before all applicable governmental agencies and, if the Company or the government determines to appeal such decision, through any and all appeals. Notwithstanding the foregoing, in the event that at any time, including after the receipt of Form W-2 by Employee, any governmental agency asserts that any Excise Taxes are payable by Employee with respect to any amounts received by Employee in connection with this Agreement, then the Company shall pay to Employee a Grossed-Up Excise Tax Payment and any Grossed-Up Penalties and Interest required, each based on all Excise Taxes asserted by the government, within thirty days after written notice thereof by Employee to the Company (including a copy of any governmental notice with respect thereto), unless, not later than the end of such thirty-day period, the Company shall have met the conditions set forth in clauses (A) and (B) above of this Section 1(b) and has agreed to the conditions set forth in clauses (C) and (D) above. 2. SURVIVABILITY. Section 15 of the Agreement is hereby amended to replace the words "Sections 3 and 5" with the words "Sections 3, 4 and 5" in the last sentence of the Section 15. 3. EFFECT. This Second Amendment shall not apply with respect to a Change in Control resulting from any merger between the Company and a wholly-owned subsidiary of Reptron Electronics, Inc. Except as otherwise specifically modified by this Second Amendment, all terms, conditions and provisions of the Agreement shall remain effective and continue operating in full force and without change. 7 IN WITNESS WHEREOF, the Employee has hereunto set his hand and the Company has caused this Second Amendment to be executed by its duly authorized officer effective as of the day and year first above written. ALL AMERICAN SEMICONDUCTOR, INC. By: /s/ BRUCE M. GOLDBERG ------------------------------- Bruce M. Goldberg, President EMPLOYEE: /s/ PAUL GOLDBERG ---------------------------------- PAUL GOLDBERG The undersigned, Lola Goldberg, as a third party beneficiary of certain of the provisions of the Agreement being modified by this Second Amendment, hereby consents to and approves the amendments to the Agreement set forth in this Second Amendment. /s/ LOLA GOLDBERG ---------------------------------- LOLA GOLDBERG 8 EX-10.2 3 EXHIBIT 10.2 FIRST AMENDMENT TO EMPLOYMENT AGREEMENT FIRST AMENDMENT, made and entered into as of the 21st day of August, 1998, to the Employment Agreement (the "Agreement") made and entered into on May 24, 1995, by and between ALL AMERICAN SEMICONDUCTOR, INC., a Delaware corporation (the "Company"), and BRUCE M. GOLDBERG (the "Employee"). W I T N E S S E T H : WHEREAS, the Company and the Employee mutually desire and each of them is willing, in accordance with the terms and conditions specifically restated, added, deleted or otherwise set forth below, to amend the Agreement; it being understood by the Company and the Employee that all terms and conditions of the Agreement not otherwise specifically modified by this First Amendment thereto shall remain effective and continue operating in full force throughout the entire term of the Agreement; NOW, THEREFORE, for and in consideration of the covenants and agreements hereinafter set forth, the parties hereto mutually agree as follows: 1. EXPENSES OF EMPLOYEE. Section 4 of the Agreement is hereby amended to be replaced in its entirety with the following: (a) General Expenses. The Company shall pay or reimburse Employee for reasonable expenses incurred by Employee in connection with the business of the Company. (b) Excise Tax Reimbursement and Tax Gross-up. (i) The Company shall promptly pay or reimburse Employee (collectively, the "Excise Tax Payments") for any federal income tax liability imposed pursuant to Section 4999 or Section 280G (or any successor provisions) of the Internal Revenue Code of 1986, 1 as amended, and any similar federal, state or local tax that may be imposed in lieu thereof or in addition thereto (collectively, "Excise Tax"), in connection with the receipt of any payments or other consideration by or for the benefit of Employee with respect to this Agreement (including any increases thereto pursuant to the Gross-Up Formula, as defined below), including any imputed income to Employee relating to the acceleration of any Company benefits including vesting of stock options to purchase common stock of the Company. In addition, each Excise Tax Payment, to the extent such payment constitutes income to Employee subject to income and/or unemployment taxes, shall be increased to and include the amount computed under the Gross-Up Formula, as defined and provided below (each, as increased, a "Grossed-Up Excise Tax Payment"; collectively, the "Grossed-Up Excise Tax Payments"). Each Grossed-Up Excise Tax Payment shall be in the amount computed under the following formula (the "Gross-Up Formula"): Divide the gross taxable amount of each Excise Tax Payment (or other compensation payment subject to tax gross up pursuant to this Agreement) by a number equal to one minus the sum of (i) the highest combined marginal U.S. federal, state and local individual income tax, social security tax and unemployment tax rate (or such other combined tax rate that is similar to or replaces such combined tax rate) applicable to Employee (taking into account the deductibility of any such federal, state and local taxes) that is in effect at the time each such Excise Tax Payment (or other compensation payment subject to tax gross up pursuant to this Agreement) is made and (ii) the Excise Tax rate applicable to Employee that is in effect at the time each such Excise Tax Payment (or other compensation payment subject to tax gross up pursuant to this Agreement) is made. For example, if a $100 Excise Tax Payment is subject to the Gross-Up 2 Formula, and the highest combined marginal tax rate applicable to Employee at such time is 45% and the Excise Tax rate is 20%, the Excise Tax Payment shall be increased under the Gross-Up Formula to, and the Grossed-Up Excise Tax Payment shall be, $285.71. In addition, any interest or penalties imposed against Employee by any federal, state or local taxing authority as a result of any misclassification by the Company, not predicated upon Employee's direction or description, and reclassification as taxable income of any amounts received by Employee under this Agreement shall be paid or reimbursed by the Company and increased by the Gross-Up Formula (as increased, the "Grossed-Up Penalties and Interest"). (ii) In the event that Employee's employment is terminated and at any time prior to the receipt by Employee of any Company U.S. Form W-2, including any amendments thereto ("Form W-2"), with respect to any payments or other amounts under this Agreement, the Company undergoes a change (i) in the ownership or effective control of the Company or (ii) in the ownership of a substantial portion of the assets of the Company, as clauses (i) and (ii) are interpreted under Section 280G of the Code and the Treasury Regulations thereunder (such event, a "Potential Excise Tax Situation"), then the Company, with the advice of its accountants and/or attorneys, shall determine whether any amounts paid or imputed to Employee under this Agreement are subject to Excise Taxes. Such determination by the Company with respect to whether any amounts received during the year constitute a "parachute payment" as defined under Section 280G of the Code (a "Parachute Payment") subject to Excise Taxes shall be reflected on Employee's U.S. Form W-2 with respect to such year. If the Company determines that Excise Taxes are payable, then, unless the 3 Company has withheld the proper Excise Taxes from Employee's payments, the Company shall provide Employee with the Grossed-Up Excise Tax Payment, no later than ten days after the issuance of Employee's Form W-2 (the "Excise Tax Due Date") with respect to the amounts paid under the Agreement (which Form W-2 shall be issued in a timely manner on or before January 31st following the year of payment of the amounts subject to the Excise Tax). If the Company has withheld the proper Excise Taxes from the amounts paid to Employee, then the Company shall pay Employee, on the date Employee receives such payments from which the Excise Tax has been deducted, the difference between the Grossed-Up Excise Tax Payment and the Excise Tax withheld. If a Potential Excise Tax Situation arises and the Company determines that no payments received in connection with this Agreement are subject to Excise Taxes by Employee, then the Company shall do all of the following set forth in clauses (A) through (D) below: (A) on or before the date of issuance of Employee's Form W-2, at the Company's sole expense, a nationally-recognized CPA firm or law firm reasonably acceptable to Employee shall render a written opinion to Employee, reasonably acceptable to Employee in both substance and form, that there is substantial authority for concluding that (i) no payments received in connection with this Agreement including those reflected in the Form W-2 constitute a Parachute Payment and (ii) no Excise Taxes are due by Employee with respect to any payments received in connection with this Agreement including any amounts reflected in the Form W-2; (B) on or before the date of issuance of Employee's Form W-2, Employer shall procure and deliver to Employee an irrevocable standby letter of credit for the benefit 4 of Employee (the "Letter of Credit"), in form and content and issued by a financial institution all reasonably acceptable to Employee, for an amount equal to the aggregate of (i) the full amount of the Grossed-Up Excise Tax Payment, and (ii) an amount equal to a reasonable estimate of the amount of any Grossed-Up Penalties and Interest that would be due if Employee ultimately were to be liable for the Excise Taxes. The amount of the Letter of Credit shall be adjusted from time to time for any material changes (more than ten percent) in the estimates of the Grossed-Up Excise Tax Payment and/or the Grossed-Up Penalties and Interest). The Letter of Credit shall be payable to Employee upon demand in the event that the Company shall not have paid Employee all amounts due under this Section 1(b) within three business days after the earliest to occur of subclauses (1) and (2) below of this clause (B), if either is applicable. The Letter of Credit shall remain outstanding until the earliest of (1) the Company's agreement that the Excise Taxes are payable (requiring immediate payment by the Company to Employee of the Grossed-Up Excise Tax Payment and the Grossed-Up Penalties and Interest, and upon receipt thereof Employee shall immediately deliver the Letter of Credit to the Company), (2) a final, non-appealable determination by a court of competent jurisdiction that the Excise Taxes are payable (requiring immediate payment by the Company of the Grossed-Up Excise Tax Payment and the Grossed-Up Penalties and Interest, and upon receipt thereof Employee shall immediately deliver the Letter of Credit to the Company), (3) a final, non-appealable determination by a court of competent jurisdiction that the Excise Taxes are not payable (requiring Employee to immediately deliver the Letter of Credit to the Company), and (4) the expiration of the longest statute of limitations applicable to Employee with respect to the payment of the 5 Excise Taxes, as such statute may be extended by Employee (requiring Employee to immediately deliver the Letter of Credit to the Company). In the event that the Company and Employee dispute the amount for which the Letter of Credit shall be obtained or adjusted pursuant to clause (B) above, the Company shall procure a Letter of Credit for the greatest amount not in dispute, the amount in dispute shall be determined through litigation, if the parties cannot otherwise agree, and the amount of the Letter of Credit shall be adjusted accordingly thereafter. In the event that Employee draws down the Letter of Credit under the conditions provided above, the Company shall immediately pay to Employee any deficiency in the proceeds of the Letter of Credit compared with the final amount to be received as Grossed Up Excise Tax Payments and Grossed-Up Penalties and Interest, and Employee shall immediately reimburse the Company for any excess proceeds from the Letter of Credit compared with such final amounts; (C) the Company shall indemnify, and hold harmless Employee from and against any and all liability, damage, loss, costs, expense, penalties, interest, claims or demands (including attorneys' fees through all appeals if for any reason the Company fails to defend Employee pursuant to clause (D) below), other than consequential damages, arising out of or in any manner connected with Employee's failure to pay the Excise Taxes, and such amount of indemnification shall not be limited in amount; and (D) the Company shall, at its sole cost and expense, defend Employee before all applicable governmental agencies and, if the Company or the government determines to appeal such decision, through any and all appeals. 6 Notwithstanding the foregoing, in the event that at any time, including after the receipt of Form W-2 by Employee, any governmental agency asserts that any Excise Taxes are payable by Employee with respect to any amounts received by Employee in connection with this Agreement, then the Company shall pay to Employee a Grossed-Up Excise Tax Payment and any Grossed-Up Penalties and Interest required, each based on all Excise Taxes asserted by the government, within thirty days after written notice thereof by Employee to the Company (including a copy of any governmental notice with respect thereto), unless, not later than the end of such thirty-day period, the Company shall have met the conditions set forth in clauses (A) and (B) above of this Section 1(b) and has agreed to the conditions set forth in clauses (C) and (D) above. 2. SURVIVABILITY. Section 15 of the Agreement is hereby amended to replace the words "Sections 3 and 5" with the words "Sections 3, 4 and 5" in the last sentence of the Section 15. 3. EFFECT. This First Amendment shall not apply with respect to a Change in Control resulting from any merger between the Company and a wholly-owned subsidiary of Reptron Electronics, Inc. Except as otherwise specifically modified by this First Amendment, all terms, conditions and provisions of the Agreement shall remain effective and continue operating in full force and without change. 7 IN WITNESS WHEREOF, the Employee has hereunto set his hand and the Company has caused this First Amendment to be executed by its duly authorized officer effective as of the day and year first above written. ALL AMERICAN SEMICONDUCTOR, INC. By: /s/ PAUL GOLDBERG ------------------------------ Paul Goldberg, Chairman EMPLOYEE: /s/ BRUCE M. GOLDBERG ------------------------------ BRUCE M. GOLDBERG 8 EX-10.3 4 EXHIBIT 10.3 FIRST AMENDMENT TO EMPLOYMENT AGREEMENT FIRST AMENDMENT, made and entered into as of the 21st day of August, 1998, to the Employment Agreement (the "Agreement") made and entered into on May 24, 1995, by and between ALL AMERICAN SEMICONDUCTOR, INC., a Delaware corporation (the "Company"), and HOWARD L. FLANDERS (the "Employee"). W I T N E S S E T H : WHEREAS, the Company and the Employee mutually desire and each of them is willing, in accordance with the terms and conditions specifically restated, added, deleted or otherwise set forth below, to amend the Agreement; it being understood by the Company and the Employee that all terms and conditions of the Agreement not otherwise specifically modified by this First Amendment thereto shall remain effective and continue operating in full force throughout the entire term of the Agreement. NOW, THEREFORE, for and in consideration of the covenants and agreements hereinafter set forth, the parties hereto mutually agree as follows: 1. EXPENSES OF EMPLOYEE. Section 4 of the Agreement is hereby amended to be replaced in its entirety with the following: (a) General Expenses. The Company shall pay or reimburse Employee for reasonable expenses incurred by Employee in connection with the business of the Company. (b) Excise Tax Reimbursement and Tax Gross-up. (i) The Company shall promptly pay or reimburse Employee (collectively, the "Excise Tax Payments") for any federal income tax liability imposed pursuant to Section 4999 or Section 280G (or any successor provisions) of the Internal Revenue Code of 1986, 1 as amended, and any similar federal, state or local tax that may be imposed in lieu thereof or in addition thereto (collectively, "Excise Tax"), in connection with the receipt of any payments or other consideration by or for the benefit of Employee with respect to this Agreement (including any increases thereto pursuant to the Gross-Up Formula, as defined below), including any imputed income to Employee relating to the acceleration of any Company benefits including vesting of stock options to purchase common stock of the Company. In addition, each Excise Tax Payment, to the extent such payment constitutes income to Employee subject to income and/or unemployment taxes, shall be increased to and include the amount computed under the Gross-Up Formula, as defined and provided below (each, as increased, a "Grossed-Up Excise Tax Payment"; collectively, the "Grossed-Up Excise Tax Payments"). Each Grossed-Up Excise Tax Payment shall be in the amount computed under the following formula (the "Gross-Up Formula"): Divide the gross taxable amount of each Excise Tax Payment (or other compensation payment subject to tax gross up pursuant to this Agreement) by a number equal to one minus the sum of (i) the highest combined marginal U.S. federal, state and local individual income tax, social security tax and unemployment tax rate (or such other combined tax rate that is similar to or replaces such combined tax rate) applicable to Employee (taking into account the deductibility of any such federal, state and local taxes) that is in effect at the time each such Excise Tax Payment (or other compensation payment subject to tax gross up pursuant to this Agreement) is made and (ii) the Excise Tax rate applicable to Employee that is in effect at the time each such Excise Tax Payment (or other compensation payment subject to tax gross up pursuant to this Agreement) is made. For example, if a $100 Excise Tax Payment is subject to the Gross-Up 2 Formula, and the highest combined marginal tax rate applicable to Employee at such time is 45% and the Excise Tax rate is 20%, the Excise Tax Payment shall be increased under the Gross-Up Formula to, and the Grossed-Up Excise Tax Payment shall be, $285.71. In addition, any interest or penalties imposed against Employee by any federal, state or local taxing authority as a result of any misclassification by the Company, not predicated upon Employee's direction or description, and reclassification as taxable income of any amounts received by Employee under this Agreement shall be paid or reimbursed by the Company and increased by the Gross-Up Formula (as increased, the "Grossed-Up Penalties and Interest"). (ii) In the event that Employee's employment is terminated and at any time prior to the receipt by Employee of any Company U.S. Form W-2, including any amendments thereto ("Form W-2"), with respect to any payments or other amounts under this Agreement, the Company undergoes a change (i) in the ownership or effective control of the Company or (ii) in the ownership of a substantial portion of the assets of the Company, as clauses (i) and (ii) are interpreted under Section 280G of the Code and the Treasury Regulations thereunder (such event, a "Potential Excise Tax Situation"), then the Company, with the advice of its accountants and/or attorneys, shall determine whether any amounts paid or imputed to Employee under this Agreement are subject to Excise Taxes. Such determination by the Company with respect to whether any amounts received during the year constitute a "parachute payment" as defined under Section 280G of the Code (a "Parachute Payment") subject to Excise Taxes shall be reflected on Employee's U.S. Form W-2 with respect to such year. If the Company determines that Excise Taxes are payable, then, unless the 3 Company has withheld the proper Excise Taxes from Employee's payments, the Company shall provide Employee with the Grossed-Up Excise Tax Payment, no later than ten days after the issuance of Employee's Form W-2 (the "Excise Tax Due Date") with respect to the amounts paid under the Agreement (which Form W-2 shall be issued in a timely manner on or before January 31st following the year of payment of the amounts subject to the Excise Tax). If the Company has withheld the proper Excise Taxes from the amounts paid to Employee, then the Company shall pay Employee, on the date Employee receives such payments from which the Excise Tax has been deducted, the difference between the Grossed-Up Excise Tax Payment and the Excise Tax withheld. If a Potential Excise Tax Situation arises and the Company determines that no payments received in connection with this Agreement are subject to Excise Taxes by Employee, then the Company shall do all of the following set forth in clauses (A) through (D) below: (A) on or before the date of issuance of Employee's Form W-2, at the Company's sole expense, a nationally-recognized CPA firm or law firm reasonably acceptable to Employee shall render a written opinion to Employee, reasonably acceptable to Employee in both substance and form, that there is substantial authority for concluding that (i) no payments received in connection with this Agreement including those reflected in the Form W-2 constitute a Parachute Payment and (ii) no Excise Taxes are due by Employee with respect to any payments received in connection with this Agreement including any amounts reflected in the Form W-2; (B) on or before the date of issuance of Employee's Form W-2, Employer shall procure and deliver to Employee an irrevocable standby letter of credit for the benefit 4 of Employee (the "Letter of Credit"), in form and content and issued by a financial institution all reasonably acceptable to Employee, for an amount equal to the aggregate of (i) the full amount of the Grossed-Up Excise Tax Payment, and (ii) an amount equal to a reasonable estimate of the amount of any Grossed-Up Penalties and Interest that would be due if Employee ultimately were to be liable for the Excise Taxes. The amount of the Letter of Credit shall be adjusted from time to time for any material changes (more than ten percent) in the estimates of the Grossed-Up Excise Tax Payment and/or the Grossed-Up Penalties and Interest). The Letter of Credit shall be payable to Employee upon demand in the event that the Company shall not have paid Employee all amounts due under this Section 1(b) within three business days after the earliest to occur of subclauses (1) and (2) below of this clause (B), if either is applicable. The Letter of Credit shall remain outstanding until the earliest of (1) the Company's agreement that the Excise Taxes are payable (requiring immediate payment by the Company to Employee of the Grossed-Up Excise Tax Payment and the Grossed-Up Penalties and Interest, and upon receipt thereof Employee shall immediately deliver the Letter of Credit to the Company), (2) a final, non-appealable determination by a court of competent jurisdiction that the Excise Taxes are payable (requiring immediate payment by the Company of the Grossed-Up Excise Tax Payment and the Grossed-Up Penalties and Interest, and upon receipt thereof Employee shall immediately deliver the Letter of Credit to the Company), (3) a final, non-appealable determination by a court of competent jurisdiction that the Excise Taxes are not payable (requiring Employee to immediately deliver the Letter of Credit to the Company), and (4) the expiration of the longest statute of limitations applicable to Employee with respect to the payment of the 5 Excise Taxes, as such statute may be extended by Employee (requiring Employee to immediately deliver the Letter of Credit to the Company). In the event that the Company and Employee dispute the amount for which the Letter of Credit shall be obtained or adjusted pursuant to clause (B) above, the Company shall procure a Letter of Credit for the greatest amount not in dispute, the amount in dispute shall be determined through litigation, if the parties cannot otherwise agree, and the amount of the Letter of Credit shall be adjusted accordingly thereafter. In the event that Employee draws down the Letter of Credit under the conditions provided above, the Company shall immediately pay to Employee any deficiency in the proceeds of the Letter of Credit compared with the final amount to be received as Grossed Up Excise Tax Payments and Grossed-Up Penalties and Interest, and Employee shall immediately reimburse the Company for any excess proceeds from the Letter of Credit compared with such final amounts; (C) the Company shall indemnify, and hold harmless Employee from and against any and all liability, damage, loss, costs, expense, penalties, interest, claims or demands (including attorneys' fees through all appeals if for any reason the Company fails to defend Employee pursuant to clause (D) below), other than consequential damages, arising out of or in any manner connected with Employee's failure to pay the Excise Taxes, and such amount of indemnification shall not be limited in amount; and (D) the Company shall, at its sole cost and expense, defend Employee before all applicable governmental agencies and, if the Company or the government determines to appeal such decision, through any and all appeals. 6 Notwithstanding the foregoing, in the event that at any time, including after the receipt of Form W-2 by Employee, any governmental agency asserts that any Excise Taxes are payable by Employee with respect to any amounts received by Employee in connection with this Agreement, then the Company shall pay to Employee a Grossed-Up Excise Tax Payment and any Grossed-Up Penalties and Interest required, each based on all Excise Taxes asserted by the government, within thirty days after written notice thereof by Employee to the Company (including a copy of any governmental notice with respect thereto), unless, not later than the end of such thirty-day period, the Company shall have met the conditions set forth in clauses (A) and (B) above of this Section 1(b) and has agreed to the conditions set forth in clauses (C) and (D) above. 2. SURVIVABILITY. Section 15 of the Agreement is hereby amended to replace the words "Sections 3 and 5" with the words "Sections 3, 4 and 5" in the last sentence of the Section 15. 3. EFFECT. This First Amendment shall not apply with respect to a Change in Control resulting from any merger between the Company and a wholly-owned subsidiary of Reptron Electronics, Inc. Except as otherwise specifically modified by this First Amendment, all terms, conditions and provisions of the Agreement shall remain effective and continue operating in full force and without change. 7 IN WITNESS WHEREOF, the Employee has hereunto set his hand and the Company has caused this First Amendment to be executed by its duly authorized officer effective as of the day and year first above written. ALL AMERICAN SEMICONDUCTOR, INC. By: /s/ BRUCE M. GOLDBERG ---------------------------------- Bruce M. Goldberg, President EMPLOYEE: /s/ HOWARD L. FLANDERS ---------------------------------- HOWARD L. FLANDERS 8 EX-10.4 5 EXHIBIT 10.4 FIRST AMENDMENT TO EMPLOYMENT AGREEMENT FIRST AMENDMENT, made and entered into as of the 21st day of August, 1998, to the Employment Agreement (the "Agreement") made and entered into on May 24, 1995, by and between ALL AMERICAN SEMICONDUCTOR, INC., a Delaware corporation (the "Company"), and RICK GORDON (the "Employee"). W I T N E S S E T H : WHEREAS, the Company and the Employee mutually desire and each of them is willing, in accordance with the terms and conditions specifically restated, added, deleted or otherwise set forth below, to amend the Agreement; it being understood by the Company and the Employee that all terms and conditions of the Agreement not otherwise specifically modified by this First Amendment thereto shall remain effective and continue operating in full force throughout the entire term of the Agreement. NOW, THEREFORE, for and in consideration of the covenants and agreements hereinafter set forth, the parties hereto mutually agree as follows: 1. EXPENSES OF EMPLOYEE. Section 4 of the Agreement is hereby amended to be replaced in its entirety with the following: (a) General Expenses. The Company shall pay or reimburse Employee for reasonable expenses incurred by Employee in connection with the business of the Company. (b) Excise Tax Reimbursement and Tax Gross-up. (i) The Company shall promptly pay or reimburse Employee (collectively, the "Excise Tax Payments") for any federal income tax liability imposed pursuant to Section 4999 or Section 280G (or any successor provisions) of the Internal Revenue Code of 1986, 1 as amended, and any similar federal, state or local tax that may be imposed in lieu thereof or in addition thereto (collectively, "Excise Tax"), in connection with the receipt of any payments or other consideration by or for the benefit of Employee with respect to this Agreement (including any increases thereto pursuant to the Gross-Up Formula, as defined below), including any imputed income to Employee relating to the acceleration of any Company benefits including vesting of stock options to purchase common stock of the Company. In addition, each Excise Tax Payment, to the extent such payment constitutes income to Employee subject to income and/or unemployment taxes, shall be increased to and include the amount computed under the Gross-Up Formula, as defined and provided below (each, as increased, a "Grossed-Up Excise Tax Payment"; collectively, the "Grossed-Up Excise Tax Payments"). Each Grossed-Up Excise Tax Payment shall be in the amount computed under the following formula (the "Gross-Up Formula"): Divide the gross taxable amount of each Excise Tax Payment (or other compensation payment subject to tax gross up pursuant to this Agreement) by a number equal to one minus the sum of (i) the highest combined marginal U.S. federal, state and local individual income tax, social security tax and unemployment tax rate (or such other combined tax rate that is similar to or replaces such combined tax rate) applicable to Employee (taking into account the deductibility of any such federal, state and local taxes) that is in effect at the time each such Excise Tax Payment (or other compensation payment subject to tax gross up pursuant to this Agreement) is made and (ii) the Excise Tax rate applicable to Employee that is in effect at the time each such Excise Tax Payment (or other compensation payment subject to tax gross up pursuant to this Agreement) is made. For example, if a $100 Excise Tax Payment is subject to the Gross-Up 2 Formula, and the highest combined marginal tax rate applicable to Employee at such time is 45% and the Excise Tax rate is 20%, the Excise Tax Payment shall be increased under the Gross-Up Formula to, and the Grossed-Up Excise Tax Payment shall be, $285.71. In addition, any interest or penalties imposed against Employee by any federal, state or local taxing authority as a result of any misclassification by the Company, not predicated upon Employee's direction or description, and reclassification as taxable income of any amounts received by Employee under this Agreement shall be paid or reimbursed by the Company and increased by the Gross-Up Formula (as increased, the "Grossed-Up Penalties and Interest"). (ii) In the event that Employee's employment is terminated and at any time prior to the receipt by Employee of any Company U.S. Form W-2, including any amendments thereto ("Form W-2"), with respect to any payments or other amounts under this Agreement, the Company undergoes a change (i) in the ownership or effective control of the Company or (ii) in the ownership of a substantial portion of the assets of the Company, as clauses (i) and (ii) are interpreted under Section 280G of the Code and the Treasury Regulations thereunder (such event, a "Potential Excise Tax Situation"), then the Company, with the advice of its accountants and/or attorneys, shall determine whether any amounts paid or imputed to Employee under this Agreement are subject to Excise Taxes. Such determination by the Company with respect to whether any amounts received during the year constitute a "parachute payment" as defined under Section 280G of the Code (a "Parachute Payment") subject to Excise Taxes shall be reflected on Employee's U.S. Form W-2 with respect to such year. If the Company determines that Excise Taxes are payable, then, unless the 3 Company has withheld the proper Excise Taxes from Employee's payments, the Company shall provide Employee with the Grossed-Up Excise Tax Payment, no later than ten days after the issuance of Employee's Form W-2 (the "Excise Tax Due Date") with respect to the amounts paid under the Agreement (which Form W-2 shall be issued in a timely manner on or before January 31st following the year of payment of the amounts subject to the Excise Tax). If the Company has withheld the proper Excise Taxes from the amounts paid to Employee, then the Company shall pay Employee, on the date Employee receives such payments from which the Excise Tax has been deducted, the difference between the Grossed-Up Excise Tax Payment and the Excise Tax withheld. If a Potential Excise Tax Situation arises and the Company determines that no payments received in connection with this Agreement are subject to Excise Taxes by Employee, then the Company shall do all of the following set forth in clauses (A) through (D) below: (A) on or before the date of issuance of Employee's Form W-2, at the Company's sole expense, a nationally-recognized CPA firm or law firm reasonably acceptable to Employee shall render a written opinion to Employee, reasonably acceptable to Employee in both substance and form, that there is substantial authority for concluding that (i) no payments received in connection with this Agreement including those reflected in the Form W-2 constitute a Parachute Payment and (ii) no Excise Taxes are due by Employee with respect to any payments received in connection with this Agreement including any amounts reflected in the Form W-2; (B) on or before the date of issuance of Employee's Form W-2, Employer shall procure and deliver to Employee an irrevocable standby letter of credit for the benefit 4 of Employee (the "Letter of Credit"), in form and content and issued by a financial institution all reasonably acceptable to Employee, for an amount equal to the aggregate of (i) the full amount of the Grossed-Up Excise Tax Payment, and (ii) an amount equal to a reasonable estimate of the amount of any Grossed-Up Penalties and Interest that would be due if Employee ultimately were to be liable for the Excise Taxes. The amount of the Letter of Credit shall be adjusted from time to time for any material changes (more than ten percent) in the estimates of the Grossed-Up Excise Tax Payment and/or the Grossed-Up Penalties and Interest). The Letter of Credit shall be payable to Employee upon demand in the event that the Company shall not have paid Employee all amounts due under this Section 1(b) within three business days after the earliest to occur of subclauses (1) and (2) below of this clause (B), if either is applicable. The Letter of Credit shall remain outstanding until the earliest of (1) the Company's agreement that the Excise Taxes are payable (requiring immediate payment by the Company to Employee of the Grossed-Up Excise Tax Payment and the Grossed-Up Penalties and Interest, and upon receipt thereof Employee shall immediately deliver the Letter of Credit to the Company), (2) a final, non-appealable determination by a court of competent jurisdiction that the Excise Taxes are payable (requiring immediate payment by the Company of the Grossed-Up Excise Tax Payment and the Grossed-Up Penalties and Interest, and upon receipt thereof Employee shall immediately deliver the Letter of Credit to the Company), (3) a final, non-appealable determination by a court of competent jurisdiction that the Excise Taxes are not payable (requiring Employee to immediately deliver the Letter of Credit to the Company), and (4) the expiration of the longest statute of limitations applicable to Employee with respect to the payment of the 5 Excise Taxes, as such statute may be extended by Employee (requiring Employee to immediately deliver the Letter of Credit to the Company). In the event that the Company and Employee dispute the amount for which the Letter of Credit shall be obtained or adjusted pursuant to clause (B) above, the Company shall procure a Letter of Credit for the greatest amount not in dispute, the amount in dispute shall be determined through litigation, if the parties cannot otherwise agree, and the amount of the Letter of Credit shall be adjusted accordingly thereafter. In the event that Employee draws down the Letter of Credit under the conditions provided above, the Company shall immediately pay to Employee any deficiency in the proceeds of the Letter of Credit compared with the final amount to be received as Grossed Up Excise Tax Payments and Grossed-Up Penalties and Interest, and Employee shall immediately reimburse the Company for any excess proceeds from the Letter of Credit compared with such final amounts; (C) the Company shall indemnify, and hold harmless Employee from and against any and all liability, damage, loss, costs, expense, penalties, interest, claims or demands (including attorneys' fees through all appeals if for any reason the Company fails to defend Employee pursuant to clause (D) below), other than consequential damages, arising out of or in any manner connected with Employee's failure to pay the Excise Taxes, and such amount of indemnification shall not be limited in amount; and (D) the Company shall, at its sole cost and expense, defend Employee before all applicable governmental agencies and, if the Company or the government determines to appeal such decision, through any and all appeals. 6 Notwithstanding the foregoing, in the event that at any time, including after the receipt of Form W-2 by Employee, any governmental agency asserts that any Excise Taxes are payable by Employee with respect to any amounts received by Employee in connection with this Agreement, then the Company shall pay to Employee a Grossed-Up Excise Tax Payment and any Grossed-Up Penalties and Interest required, each based on all Excise Taxes asserted by the government, within thirty days after written notice thereof by Employee to the Company (including a copy of any governmental notice with respect thereto), unless, not later than the end of such thirty-day period, the Company shall have met the conditions set forth in clauses (A) and (B) above of this Section 1(b) and has agreed to the conditions set forth in clauses (C) and (D) above. 2. SURVIVABILITY. Section 15 of the Agreement is hereby amended to replace the words "Sections 3 and 5" with the words "Sections 3, 4 and 5" in the last sentence of the Section 15. 3. EFFECT. This First Amendment shall not apply with respect to a Change in Control resulting from any merger between the Company and a wholly-owned subsidiary of Reptron Electronics, Inc. Except as otherwise specifically modified by this First Amendment, all terms, conditions and provisions of the Agreement shall remain effective and continue operating in full force and without change. 7 IN WITNESS WHEREOF, the Employee has hereunto set his hand and the Company has caused this First Amendment to be executed by its duly authorized officer effective as of the day and year first above written. ALL AMERICAN SEMICONDUCTOR, INC. By: /s/ BRUCE M. GOLDBERG ----------------------------- Bruce M. Goldberg, President EMPLOYEE: /s/ RICK GORDON -------------------------------- RICK GORDON 8 EX-10.5 6 EXHIBIT 10.5 This Instrument prepared by and, after recording, return to: Steven D. Lear, Esq. Bilzin Sumberg Dunn Price & Axelrod LLP 2500 First Union Financial Center Miami, Florida 33131 98R416896 1998 AUG 24 15:15 (305) 374-7580 OFF. REC. 18244PC4264 MORTGAGE DEED RAMCO FORM REG. LONG FORM THIS MORTGAGE DEED EXECUTED THE 21 DAY OF AUGUST A.D. 1998 BY BRUCE MITCHELL GOLDBERG AND JAYNE ELLEN GOLDBERG, HIS WIFE, HEREINAFTER CALLED THE MORTGAGOR, TO ALL AMERICAN SEMICONDUCTOR, INC., A DELAWARE corporation, HEREINAFTER CALLED THE MORTGAGEE: [WHEREVER USED HEREIN THE TERMS "MORTGAGOR" AND "MORTGAGEE" include all the parties to this instrument and the heirs, legal representatives and assigns of individuals, and the successors and assigns of corporation: and the terms "note" includes all the notes herein described if more than one.] WITNESSETH, THAT FOR GOOD AND VALUABLE CONSIDERATIONS, AND ALSO IN CONSIDERATION OF THE AGGREGATE SUM NAMED IN THE PROMISSORY NOTE OF EVEN DATE HEREWITH, HEREINAFTER DESCRIBED, THE MORTGAGOR HEREBY GRANTS, BARGAINS, SELLS, ALIENS, REMISES, CONVEYS AND CONFIRMS UNTO THE MORTGAGEE ALL THE CERTAIN LAND OF WHICH THE MORTGAGOR IS NOW SEIZED AND IN POSSESSION SITUATE IN MIAMI-DADE COUNTY, FLORIDA, VIZ: Lot 3, Block 2B, of SUNSET ISLAND NO. 2, according to the Plat thereof, as recorded in Plat Book 40, at Page 8, of the Public Records of Dade County, Florida. OFF. REC. 18244PC4265 TO HAVE AND TO HOLD THE SAME, TOGETHER WITH THE TENEMENTS, HEREDITAMENTS AND APPURTENANCES THERETO BELONGING, AND THE RENTS, ISSUES AND PROFITS THEREOF, UNTO THE MORTGAGEE, IN FEE SIMPLE. AND THE MORTGAGOR COVENANTS WITH THE MORTGAGEE THAT THE MORTGAGOR IS INDEFEASIBLY SEIZED OF SAID LAND IN FEE SIMPLE; THAT THE MORTGAGOR HAS GOOD RIGHT AND LAWFUL AUTHORITY TO CONVEY SAID LAND AS AFORESAID; THAT THE MORTGAGOR WILL MAKE SUCH FURTHER ASSURANCES TO PERFECT THE FEE SIMPLE TITLE TO SAID LAND IN THE MORTGAGEE AS MAY REASONABLY BY REQUIRED; THAT THE MORTGAGOR HEREBY FULLY WARRANTS THE TITLE TO SAID LAND AND WILL DEFEND THE SAME AGAINST THE LAWFUL CLAIMS OF ALL PERSONS WHOMSOEVER; AND THAT SAID LAND IS FREE AND CLEAR OF ALL ENCUMBRANCES. SUBJECT TO: ZONING, RESTRICTIONS, PROHIBITIONS AND OTHER REQUIREMENTS IMPOSED BY GOVERNMENTAL AUTHORITY; RESTRICTIONS AND MATTERS APPEARING ON THE PLAT OR OTHERWISE COMMON TO THE SUBDIVISION; PUBLIC UTILITY EASEMENTS OF RECORD, IF ANY AND 1998 REAL ESTATE TAXES AND SUBSEQUENT YEARS WHICH ARE NOT YET DUE AND PAYABLE, AND THE MORTGAGE SHALL BE JUNIOR, SUBJECT TO AND SUBORDINATE IN ALL RESPECTS TO THAT CERTAIN MORTGAGE IN FAVOR OF HARRIS TRUST & SAVINGS BANK, AS RECORDED IN OFFICIAL RECORDS BOOK 18156 AT PAGE 1929 OF THE PUBLIC RECORDS OF MIAMI-DADE COUNTY, FLORIDA ON JUNE 22, 1998 INCLUDING ALL ASSIGNMENTS, MODIFICATIONS, EXTENSIONS, RENEWALS AND REPLACEMENTS THEREOF FROM TIME TO TIME. AND SUBJECT TO OTHER MATTERS OF RECORD. PROVIDED ALWAYS, THAT IS SAID MORTGAGOR SHALL PAY UNTO SAID MORTGAGEE THE CERTAIN PROMISSORY NOTE HEREINAFTER SUBSTANTIALLY COPIED OR IDENTIFIED, TO-WIT: Attached hereto as Exhibit A. OFF. REC. 18244PC4266 EXHIBIT "A" MORTGAGE NOTE $125,000 Miami, Florida August 21, 1998 FOR VALUE RECEIVED the undersigned promises to pay to the order of ALL AMERICAN SEMICONDUCTOR, INC., a Delaware corporation, the principal sum of One Hundred Twenty-Five Thousand and no/100 Dollars together with interest thereon at the rate of five percent (5%) per annum from August 21, 1998, until maturity, both principal and interest being payable in Lawful Money of the United States, such principal sum and interest payable in installments as follows: Interest only in annual installments commencing December 31, 1998, and each December 31st thereafter through and including December 31, 2003. Commencing January 1, 2004, this note shall be payable in twenty annual equal payments of principal and interest sufficient to pay interest each year at a rate of five percent (5%) per annum and amortize the unpaid principal balance in twenty years with the first annual payment due on December 31, 2004; provided, however, that in all events this note is payable in full including the unpaid principal balance and any accrued and unpaid interest thereon, on August 25, 2013. Such installment payments shall be applied first to the interest accruing under the terms of this note and then to a reduction of the principal indebtedness. The makers and endorsers of this note further agree to waive demand, notice of non-payment and protest, and in the event suit shall be brought for the collection hereof, or the same has to be collected upon demand of an attorney, to pay reasonable attorney's fees for making such collection. This note is secured by a mortgage of even date herewith and is to be construed and enforced according to the laws of the State of Florida. Payable at ----------------------------------- BRUCE MITCHELL GOLDBERG All American Semiconductor, Inc. 16115 N.W. 52nd Avenue Miami, Florida 33014 ----------------------------------- JAYNE ELLEN GOLDBERG OFF. REC. 18244PC4267 AND SHALL PERFORM, COMPLY WITH AND ABIDE BY EACH AND EVERY THE AGREEMENTS, STIPULATIONS, CONDITIONS AND COVENANTS THEREOF, AND OF THIS MORTGAGE, THEN THIS MORTGAGE AND THE ESTATE HEREBY CREATED, SHALL CEASE, DETERMINE AND BE NULL AND VOID. AND THE MORTGAGOR HEREBY FURTHER COVENANTS AND AGREES TO PAY PROMPTLY WHEN DUE THE PRINCIPAL AND INTEREST AND OTHER SUMS OF MONEY PROVIDED FOR IN SAID NOTE AND THIS MORTGAGE, OR EITHER; TO PAY ALL AND SINGULAR THE TAXES, ASSESSMENTS, LEVIES, LIABILITIES, OBLIGATIONS, AND ENCUMBRANCES OF EVERY NATURE ON SAID PROPERTY; TO PERMIT, COMMIT OR SUFFER NO WASTE, IMPAIRMENT OR DETERIORATION OF SAID LAND OR THE IMPROVEMENTS THEREON AT ANY TIME; TO KEEP THE BUILDINGS NOW OR HEREAFTER ON SAID LAND FULLY INSURED IN A SUM OF NO LESS THAN IN A COMPANY OR COMPANIES ACCEPTABLE TO THE MORTGAGEE, THE POLICY OR POLICIES TO BE HELD BY, AND PAYABLE TO, SAID MORTGAGEE, AND IN THE EVENT ANY SUM OF MONEY BECOMES PAYABLE BY VIRTUE OF SUCH INSURANCE THE MORTGAGEE SHALL HAVE THE RIGHT TO RECEIVE AND APPLY THE SAME TO THE INDEBTEDNESS HEREBY SECURED, ACCOUNTING TO THE MORTGAGOR FOR ANY SURPLUS; TO PAY ALL COSTS, CHARGES, AND EXPENSES, INCLUDING LAWYER'S FEES AND TITLE SEARCHES, REASONABLY INCURRED OR PAID BY THE MORTGAGEE BECAUSE OF THE FAILURE OF THE MORTGAGOR TO PROMPTLY AND FULLY COMPLY WITH THE AGREEMENTS, STIPULATIONS, CONDITIONS AND COVENANTS OF SAID NOTE AND THIS MORTGAGE, OR EITHER; TO PERFORM, COMPLY WITH AND ABIDE BY EACH AND EVERY THE AGREEMENTS, STIPULATIONS, CONDITIONS AND COVENANTS SET FORTH IN SAID NOTE AND THIS MORTGAGE OR EITHER. IN THE EVENT THE MORTGAGOR FAILS TO PAY WHEN DUE ANY TAX, ASSESSMENT, INSURANCE PREMIUM OR OTHER SUM OF MONEY PAYABLE BY VIRTUE OF SAID NOTE AND THIS MORTGAGE, OR EITHER, THE MORTGAGEE MAY PAY THE SAME, WITHOUT WAIVING OR AFFECTING THE OPTION TO FORECLOSE OR ANY OTHER RIGHT HEREUNDER, AND ALL SUCH PAYMENTS SHALL BEAR INTEREST FROM DATE THEREOF AT THE HIGHEST LAWFUL RATE THEN ALLOWED BY THE LAWS OF THE STATE OF FLORIDA. IF ANY SUM OF MONEY HEREIN REFERRED TO BE NOT PROMPTLY PAID WITHIN 30 DAYS NEXT AFTER THE SAME BECOMES DUE, OR IF EACH AND EVERY THE AGREEMENTS, STIPULATIONS, CONDITIONS AND COVENANTS OF SAID NOTE AND THIS MORTGAGE, OR EITHER, ARE NOT FULLY PERFORMED, COMPLIED WITH AND ABIDED BY, THEN THE ENTIRE SUM MENTIONED IN SAID NOTE, AND THIS MORTGAGE, OR THE ENTIRE BALANCE UNPAID THEREON, SHALL FORTHWITH OR THEREAFTER, AT THE OPTION OF THE MORTGAGEE, BECOME AND BE DUE AND PAYABLE, ANYTHING IN SAID NOTE OR HEREIN TO THE CONTRARY NOTWITHSTANDING. FAILURE BY THE MORTGAGEE TO EXERCISE ANY OF THE RIGHTS OR OPTIONS HEREIN PROVIDED SHALL NOT CONSTITUTE A WAIVER OF ANY RIGHTS OR OPTIONS UNDER SAID NOTE OR THIS MORTGAGE ACCRUED OR THEREAFTER ACCRUING. IN WITNESS WHEREOF, THE SAID MORTGAGOR HAS HEREUNTO SIGNED AND SEALED THESE PRESENTS THE DAY AND YEAR FIRST ABOVE WRITTEN. SIGNED, SEALED AND DELIVERED IN THE PRESENCE OF: /s/ PAMELA R. WALES /s/ BRUCE MITCHELL GOLDBERG L.S. - -------------------------------- -------------------------------------------- PAMELA R. WALES BRUCE MITCHELL GOLDBERG /s/ MIKE CLARK L.S. - -------------------------------- -------------------------------------------- MIKE CLARK /s/ PAMELA R. WALES /s/ JAYNE ELLEN GOLDBERG L.S. - -------------------------------- -------------------------------------------- PAMELA R. WALES JAYNE ELLEN GOLDBERG /s/ MIKE CLARK L.S. - -------------------------------- -------------------------------------------- MIKE CLARK Address as to both: 112 Bond Court Los Gatos, California 95030 STATE OF California COUNTY OF Santa Clara I HEREBY CERTIFY that on this day, before me, an officer duly authorized in the State aforesaid and in the County aforesaid to take acknowledgements, personally appeared BRUCE M. (MITCHELL) GOLDBERG AND JAYNE ELLEN GOLDBERG to me known to be the persons described in and who executed the foregoing instrument and __________ acknowledged before me that they executed the same. WITNESS my hand and official seal in the County and State last aforesaid this twenty first day of August A. D. 1998 /s/ JEANIE McCUNE -------------------------------------------- JEANIE McCUNE NOTARY PUBLIC ==================================== [NOTARY SEAL] JEANIE MC CUNE COMMISSION #1098646 Notary Public - California Santa Clara County My Comm. Expires May 23, 2000 ==================================== THIS INSTRUMENT PREPARED BY: ADDRESS OFF. REC. 18244PC4268 CALIFORNIA ALL-PURPOSE ACKNOWLEDGEMENT ================================================================================ STATE OF CALIFORNIA RECORDED IN OFFICIAL RECORD BOOK COUNTY OF SANTA CLARA OF DADE COUNTY FLORIDA RECORD VERIFIED HARVEY RUVIN On AUGUST 21, 1998 before me, JEANIE MCCUNE-NOTARY PUBLIC, Personally appeared BRUCE MITCHELL GOLDBERG AND JAYNE ELLEN GOLDBERG. [X] personally known to me - OR - [ ] proved to me on the basis of satisfactory evidence to be the person(s) whose ==================================== name(s) is [ARE] subscribed to the within [NOTARY SEAL] JEANIE MC CUNE instrument and acknowledged to me that COMMISSION #1098646 he/she [THEY] executed the same in Notary Public - California his/her [THEIR] authorized capacity(ies), Santa Clara County and that by his/her [THEIR] signature(s) My Comm. Expires May 23, 2000 on the instrument the person(s), or the ==================================== entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. /s/ JEANIE McCUNE ----------------------------------------- SIGNATURE OF NOTARY /s/ Jeanie McCune =================================== OPTIONAL =================================== Though the data below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent reattachment of this form. CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT [ ] INDIVIDUAL [ ] CORPORATE OFFICER ------------------------------------- ----------------------------------- TITLES TITLE OF TYPE OF DOCUMENT [ ] PARTNER(S) [ ] LIMITED [ ] GENERAL [ ] ATTORNEY-IN-FACT ----------------------------------- [ ] TRUSTEE(S) NUMBER OF PAGES [ ] GUARDIAN/CONSERVATOR [ ] OTHER: -------------------------------- ----------------------------------- ------------------------------------- DATE OF DOCUMENT ------------------------------------- SIGNER IS REPRESENTING: NAME OF PERSON(S) OR ENTITY(IES) ------------------------------------- ----------------------------------- ------------------------------------- SIGNER(S) OTHER THAN NAMED ABOVE ================================================================================ EX-11.1 7 EXHIBIT 11.1
ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES EXHIBIT 11.1 STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS (UNAUDITED) QUARTERS NINE MONTHS PERIODS ENDED SEPTEMBER 30 1998 1997 1998 1997 - ------------------------------------------------------------------------------------------------------------------ BASIC EARNINGS PER SHARE: Net Income................................. $ 310,000 $ 1,127,000 $ 1,838,000 $ 2,051,000 =============== =============== =============== =============== Weighted Average Shares Outstanding........ 19,686,611 19,673,600 19,684,604 19,670,859 =============== =============== =============== =============== Basic Earnings Per Share................... $ .02 $ .06 $ .09 $ .10 ====== ====== ====== ====== DILUTED EARNINGS PER SHARE: Net Income................................. $ 310,000 $ 1,127,000 $ 1,838,000 $ 2,051,000 =============== =============== =============== =============== Weighted Average and Dilutive Shares: Weighted average shares outstanding...... 19,686,611 19,673,600 19,684,604 19,670,859 Dilutive shares.......................... 385,870 187,337 441,445 36,080 --------------- --------------- --------------- --------------- 20,072,481 19,860,937 20,126,049 19,706,939 =============== =============== =============== =============== Diluted Earnings Per Share................. $ .02 $ .06 $ .09 $ .10 ====== ====== ====== ======
EX-27.1 8 FINANCIAL DATA SCHEDULE
5 The schedule contains summary financial information from the Registrant's consolidated condensed financial statements as of and for the nine months ended September 30, 1998, and is qualified in its entirety by reference to such consolidated financial statements. 0000818074 ALL AMERICAN SEMICONDUCTOR, INC. 1,000 9-MOS DEC-31-1998 JAN-01-1998 SEP-30-1998 101 0 33,371 1,201 64,709 99,628 9,886 5,348 108,292 33,065 47,711 0 0 199 27,317 108,292 185,538 185,538 143,742 143,742 34,721 587 3,263 3,225 1,387 1,838 0 0 0 1,838 .09 .09
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