SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. ___)
FILED BY THE REGISTRANT |X|
FILED BY A PARTY OTHER THAN THE REGISTRANT |_|
Check the appropriate box:
|_| Preliminary Proxy Statement
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
|_| Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
PREMIER ALLIANCE GROUP, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
|X| No fee required.
|_| Fee computed on table below per Exchange Act
Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
Fee paid previously with preliminary materials.
| |Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
PREMIER ALLIANCE GROUP, INC.
4521 Sharon Road, Suite 300
Charlotte, North Carolina 28211
Tel. (704) 521-8077
April 9, 2007
Dear Fellow Shareholder:
You are cordially invited to attend the annual meeting of shareholders of
Premier Alliance Group, Inc., a Nevada corporation (the "Company"), to be held
at 1:00 p.m. Eastern Daylight Time on May 11, 2007, at our corporate offices,
which are located at 4521 Sharon Road, Suite 300, Charlotte, North Carolina
28211.
At this meeting, you will be asked to consider and vote, in person or by proxy,
on the following matters:
o Election of three directors to the board of directors for the
following year and until their successors are elected. The board of
directors unanimously recommends a vote FOR election of the nominees
on the enclosed proxy card.
o Ratification of the appointment of Scharf Pera & Co. PLLC as our
independent auditors. The board of directors unanimously recommends a
vote FOR this proposal.
o Transaction of such other business as may properly come before the
meeting or any adjournment.
The official notice of meeting, proxy statement, and proxy card are included
with this letter. The matters listed in the notice of meeting are described in
detail in the accompanying proxy statement. We are also providing you with a
copy of our annual report on Form 10-KSB for our fiscal year ended December 31,
2006.
Whether or not you expect to attend, the board of directors urges you to vote
your shares by signing, dating, and returning the enclosed proxy card in the
envelope provided, which is postage-paid if mailed in the United States.
Very truly yours,
/s/ Mark S. Elliott
Mark S. Elliott
President
PREMIER ALLIANCE GROUP, INC.
4521 Sharon Road, Suite 300
Charlotte, North Carolina 28211
Tel. (704) 521-8077
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of Premier Alliance Group, Inc.:
We hereby notify you that the annual meeting of shareholders of Premier Alliance
Group, Inc., a Nevada corporation, will be held on May 11, 2007 at 1:00 p.m.
Eastern Daylight Time, at our corporate offices, which are located at 4521
Sharon Road, Suite 300, Charlotte, North Carolina 28211. This meeting is being
held for the following purposes:
o to elect three directors to the board of directors to hold office for
the following year and until their successors are elected;
o to ratify the appointment of Scharf Pera & Co. PLLC as our independent
auditors; and
o to transact such other business as may properly come before the
meeting or any adjournments.
The matters listed in this notice of meeting are described in detail in the
accompanying proxy statement. The board of directors has fixed the close of
business on April 4, 2007, as the record date for determining those shareholders
who will be entitled to notice of and to vote at the meeting and any
adjournment. You may examine a list of the shareholders of record as of the
close of business on April 4, 2007, for any purpose germane to the meeting
during the ten-day period preceding the date of the meeting at our corporate
offices, which are located at 4521 Sharon Road, Suite 300, Charlotte, North
Carolina 28211.
YOUR VOTE IS IMPORTANT
Even if you plan to attend the meeting, please sign, date and return the
enclosed proxy card in the envelope provided so that your vote will be counted
if you later decide not to attend the meeting. No postage is required if the
proxy card is mailed in the United States.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Mark S. Elliott
Mark S. Elliott
President
Charlotte, North Carolina
April 9, 2007
PREMIER ALLIANCE GROUP, INC.
4521 Sharon Road, Suite 300
Charlotte, North Carolina 28211
Tel. (704) 521-8077
PROXY STATEMENT
GENERAL INFORMATION
INFORMATION ABOUT PROXY SOLICITATION
This proxy statement is being furnished to holders of shares of common stock,
$.001 par value per share, of Premier Alliance Group, Inc., a Nevada corporation
(the "Company"), in connection with solicitation of proxies on behalf of our
board of directors for use at the annual meeting of shareholders to be held at
1:00 p.m. Eastern Daylight Time on May 11, 2007, at our corporate offices, 4521
Sharon Road, Suite 300, Charlotte, North Carolina 28211, and at any adjournment.
The purpose of the meeting and the matters to be acted on are stated in the
accompanying notice of annual meeting of shareholders. The board of directors
currently knows of no other business that will come before the meeting.
The notice of annual meeting, proxy statement, and proxy card are being mailed
to shareholders on or about April 9, 2007. We will bear the cost of its
solicitation of proxies. The original solicitation of proxies by mail may be
supplemented by personal interview, telephone, and facsimile by our directors,
officers, and employees. Arrangements will also be made with brokerage houses
and other custodians, nominees, and fiduciaries for the forwarding of
solicitation material to the beneficial owners of stock held by any such
persons, and we may reimburse those custodians, nominees and fiduciaries for
reasonable out-of-pocket expenses incurred by them in doing so.
The board of directors is soliciting votes FOR our slate of nominees for
election to the board of directors and FOR ratification of the appointment of
the firm of Scharf Pera & Co. PLLC as our independent auditors.
INFORMATION ABOUT VOTING
Q: WHY AM I RECEIVING THESE MATERIALS?
A: The board of directors is providing these proxy materials for you in
connection with our annual meeting of shareholders, which will take
place on May 11, 2007. As a shareholder, you are invited to attend the
annual meeting and to vote on the items of business described in this
proxy statement.
Q: WHAT INFORMATION IS CONTAINED IN THESE MATERIALS?
A: The information included in this proxy statement relates to the
proposals to be voted on at the annual meeting, the voting process, the
compensation of directors and the most highly paid executive officers,
and certain other required information. A copy of our annual report on
Form 10-KSB is also enclosed.
Q: WHAT ITEMS OF BUSINESS WILL BE VOTED ON AT THE ANNUAL MEETING?
A: The two items of business scheduled to be voted on at the annual
meeting are (1) election of directors and (2) ratification of the
independent auditors. We will also consider any other business that
properly comes before the annual meeting.
Q: HOW DOES THE BOARD OF DIRECTORS RECOMMEND THAT I VOTE?
A: The board of directors recommends that you vote your shares FOR each of
the nominees to the board on the proxy card included with this proxy
statement and FOR ratification of the independent auditors.
Q: WHAT SHARES CAN I VOTE?
A: You may vote all shares owned by you as of the close of business on
April 4, 2007, the record date. These shares include (1) shares held
directly in your name as a shareholder of record and (2) shares held
for you, as the beneficial owner, through a broker or other nominee,
such as a bank.
Q: WHAT IS THE DIFFERENCE BETWEEN HOLDING SHARES AS A SHAREHOLDER OF
RECORD AND AS A BENEFICIAL OWNER?
A: Most of our shareholders hold their shares through a broker or other
nominee rather than directly in their own name. As summarized below,
there are some distinctions between shares held of record and those
owned beneficially.
If your shares are registered directly in your name with our transfer
agent, Corporate Stock Transfer, you are considered, with respect to
those shares, the shareholder of record and these proxy materials are
being sent directly to you by us. As the shareholder of record, you
have the right to grant your voting proxy directly to the board of
directors or to vote in person at the meeting. The board of directors
has enclosed or sent a proxy card for you to use.
If your shares are held in a brokerage account or by another nominee,
you are considered the beneficial owner of shares held in "street
name," and these proxy materials are being forwarded to you by your
broker or nominee together with a voting instruction card. As the
beneficial owner, you have the right to direct your broker or nominee
how to vote and are also invited to attend the annual meeting. However,
since you are not the shareholder of record, you may not vote these
shares in person at the meeting unless you obtain a "legal proxy" from
the broker or nominee that holds your shares, giving you the right to
vote the shares. Your broker or nominee has enclosed or provided voting
instructions for you to use in directing the broker or nominee how to
vote your shares.
Q: HOW CAN I ATTEND THE ANNUAL MEETING?
A: You are entitled to attend the annual meeting only if you were a
shareholder of our company or joint holder as of the close of business
on April 4, 2007, or you hold a valid proxy for the annual meeting. You
should be prepared to present photo identification for admittance. If
you are not a record holder but hold shares through a broker or nominee
(that is, in "street name"), you should provide proof of beneficial
ownership on the record date, such as your most recent account
statement prior to April 4, 2007, a copy of the voting instruction card
provided by your broker or nominee, or other similar evidence of
ownership. If you do not provide photo identification or comply with
the other procedures outlined above upon request, you will not be
admitted to the annual meeting. The annual meeting will begin promptly
at 1:00 p.m. Eastern Daylight Time. Check-in will begin at 9:00 a.m.,
and you should allow ample time for the check-in procedures.
Q: HOW CAN I VOTE MY SHARES IN PERSON AT THE ANNUAL MEETING?
A: You may vote in person at the annual meeting any shares that you hold
as the shareholder of record. You may only vote in person shares held
in street name if you obtain from the broker or nominee that holds your
shares a "legal proxy" giving you the right to vote the shares.
Q: HOW CAN I VOTE MY SHARES WITHOUT ATTENDING THE ANNUAL MEETING?
A: Whether you hold shares directly as the shareholder of record or
beneficially in street name, you may without attending the meeting
direct how your shares are to be voted. If you are a shareholder of
record, you may vote by granting a proxy. If you hold shares in street
name, you may vote by submitting voting instructions to your broker or
nominee. Each record holder of Company common stock may submit a proxy
by completing, signing, and dating a proxy card and mailing it in the
accompanying pre-addressed envelope. Each shareholder who holds shares
in street name may vote by mail by completing, signing, and dating a
voting instruction card provided by the broker or nominee and mailing
it in the accompanying pre-addressed envelope.
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Q: CAN I CHANGE MY VOTE?
A: You may change your vote at any time prior to the vote at the annual
meeting. For shares held directly in your name, you may accomplish this
by granting a new proxy bearing a later date (which automatically
revokes the earlier proxy) or by attending the annual meeting and
voting in person. Attendance at the meeting will not cause your
previously granted proxy to be revoked unless you specifically so
request. For shares you hold beneficially, you may change your vote by
submitting new voting instructions to your broker or nominee or, if you
have obtained a "legal proxy" from your broker, or nominee giving you
the right to vote your shares, by attending the meeting and voting in
person. You may also change your vote by sending a written notice of
revocation to Mr. Mark S. Elliott, President, Premier Alliance Group,
Inc., 4521 Sharon Road, Suite 300, Charlotte, North Carolina 28211.
Q: WHO CAN HELP ANSWER MY QUESTIONS?
A: If you have any questions about the annual meeting or how to vote or
revoke your proxy, you should contact Mark S. Elliott at Premier
Alliance Group, Inc., 4521 Sharon Road, Suite 300, Charlotte, North
Carolina 28211, tel. (704) 521-8077, email
melliott@premieralliance.com.
If you need additional copies of this proxy statement or voting
materials, you should contact M. Elliott as described above.
Q: HOW ARE VOTES COUNTED?
A: In the election of directors, you may vote FOR all of the three
nominees or you may direct your vote to be WITHHELD with respect to one
or more of the three nominees. With respect to ratification of the
independent auditors, you may vote FOR, AGAINST or ABSTAIN. If you vote
ABSTAIN, it has the same effect as a vote AGAINST. If you provide
specific instructions, your shares will be voted as you instruct. If
you sign your proxy card or voting instruction card with no further
instructions, your shares will be voted in accordance with the
recommendations of the board of directors (FOR all of our nominees and
FOR ratification of the independent auditors and, in the discretion of
the proxy holders, on any other matters that properly come before the
meeting). If any other matters properly arise at the meeting, your
proxy, together with the other proxies received, will be voted at the
discretion of the proxy holders.
Q: WHAT IS A QUORUM AND WHY IS IT NECESSARY?
A: Conducting business at the meeting requires a quorum. The presence,
either in person or by proxy, of the holders of one third of our shares
of capital stock outstanding on April 4, 2007 is necessary to
constitute a quorum. Under the Nevada Revised Statutes and our articles
of incorporation and by-laws, abstentions and broker non-votes (when
your shares are held in "street name" and you do not tell the nominee
how to vote your shares) are treated as present for purposes of
determining whether a quorum exists.
Q: WHAT IS THE VOTING REQUIREMENT TO APPROVE EACH OF THE PROPOSALS?
A: In the election of directors, the three persons receiving the highest
number of FOR votes at the annual meeting will be elected. Accordingly,
abstentions and broker non-votes do not have the effect of a vote for
or against the election of any nominee. You do not have the right to
cumulate your votes.
All other proposals require the affirmative FOR vote of a majority of
those shares present in person or represented by proxy and entitled to
vote on that proposal at the annual meeting. Accordingly, abstentions
on other proposals will have the same effect as a vote against the
proposal. Broker non-votes will not have the effect of a vote for or
against other proposals.
Q: WHAT SHOULD I DO IF I RECEIVE MORE THAN ONE SET OF VOTING MATERIALS?
A: You may receive more than one set of voting materials, including
multiple copies of this proxy statement and multiple proxy cards or
voting instruction cards. For example, if you hold your shares in more
than one brokerage account, you will receive a separate voting
instruction card for each brokerage account in which you hold shares.
If you are a shareholder of record and your shares are registered in
more than one name, you will receive more than one proxy card. Please
complete, sign, date, and return each proxy card and voting instruction
card that you receive.
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Q: WHERE CAN I FIND THE VOTING RESULTS OF THE ANNUAL MEETING?
A: We intend to announce preliminary voting results at the annual meeting
and publish final results in our quarterly report on Form 10-QSB for
the fiscal quarter ending July 31, 2007.
Q: WHAT HAPPENS IF ADDITIONAL MATTERS ARE PRESENTED AT THE ANNUAL MEETING?
A: Other than the two items of business described in this proxy statement,
we are not aware of any other business to be acted upon at the annual
meeting. However, if you grant a proxy, the persons named as proxy
holders, Mark S. Elliott, our president, and Robert N. Yearwood, our
executive vice president, will have the discretion to vote your shares
on any additional matters properly presented for a vote at the meeting.
If for any unforeseen reason any of our nominees is not available as a
candidate for director, the persons named as proxy holders will vote
your proxy for any one or more other candidates nominated by the board
of directors.
Q: WHAT SHARES ARE ENTITLED TO BE VOTED?
A: Each share of our common stock issued and outstanding as of the close
of business on April 4, 2007, the record date, is entitled to be voted
on all items being voted at the annual meeting, with each share being
entitled to one vote. On the record date, 5,867,945 shares of common
stock were issued and outstanding.
Q: WHO WILL COUNT THE VOTES?
A: Our transfer agent, Continental Stock Transfer & Trust Company, will
present us with a list of votes.
Q: IS MY VOTE CONFIDENTIAL?
A: Proxy instructions, ballots, and voting tabulations that identify
individual shareholders are handled in a manner that protects your
voting privacy. Your vote will not be disclosed, either within our
company or to anyone else, except (1) as necessary to meet applicable
legal requirements, (2) to allow for the tabulation of votes and
certification of the vote, or (3) to facilitate a successful proxy
solicitation.
Q: WHO WILL BEAR THE COST OF SOLICITING VOTES FOR THE ANNUAL MEETING?
A: The board of directors is making this solicitation and will pay the
entire cost of preparing, assembling, printing, mailing and
distributing these proxy materials. Certain of our directors, officers
and employees, without any additional compensation, may also solicit
your vote in person, by telephone or by electronic communication. On
request, we will also reimburse brokerage houses and other custodians,
nominees and fiduciaries for their reasonable out-of-pocket expenses
for forwarding proxy and solicitation materials to shareholders.
Q: MAY I PROPOSE ACTIONS FOR CONSIDERATION AT NEXT YEAR'S ANNUAL MEETING
OF SHAREHOLDERS?
A: You may submit proposals for consideration at future shareholder
meetings. However, in order for a shareholder proposal to be considered
for inclusion in our proxy statement for the annual meeting next year,
the written proposal must be received by us no later than January 6,
2008. Such proposals also will need to comply with Securities and
Exchange Commission regulations under Rule 14a-8 regarding the
inclusion of shareholder proposals in company-sponsored proxy
materials.
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PROPOSALS TO BE VOTED ON
PROPOSAL ONE:
ELECTION OF DIRECTORS
The board of directors, based on the recommendation of the nominating committee
of the board of directors, is proposing a slate of directors consisting of three
incumbent directors. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE YOUR SHARES
FOR EACH OF THESE NOMINEES.
THE NOMINEES
The nominees are listed below:
- ----------------------- ---- --------------------------------- ---------------
Name Age Position Director Since
- ----------------------- ---- --------------------------------- ---------------
Mark S. Elliott 46 President, director 2004
- ----------------------- ---- --------------------------------- ---------------
Robert N. Yearwood 58 Executive vice president of 2004
corporate development, director
- ----------------------- ---- --------------------------------- ---------------
Kevin J. Hasenfus 49 Executive vice president of 2004
business development, director
- ----------------------- ---- --------------------------------- ---------------
It is the intention of the persons named in the accompanying proxy card to vote
all shares of common stock for which they have been granted a proxy for the
election of Mark S. Elliott, Kevin J. Hasenfus, and Robert N. Yearwood, each to
serve as a director until the next annual meeting of shareholders and until his
successor has been duly elected and qualified. All the nominees have consented
to being named in this proxy statement and to serve as a director if elected. At
the time of the annual meeting, if any of the nominees named above is not
available to serve as director (an event that the board of directors does not
currently have any reason to anticipate), all proxies will be voted for any one
or more other persons that the board of directors designates. The board of
directors believes that it is in the best interests of our company to elect the
above-described slate of directors.
INFORMATION ABOUT THE NOMINEES
None of our directors or executive officers is related to any other director or
executive officer, and none of our directors or executive officers holds any
directorships in any other public company. None of our directors is independent.
Stated below is the principal occupation of each nominee, the business
experience of each nominee for at least the past five years, and certain other
information relating to the nominees.
MARK S. ELLIOTT has been in the technology industry for more than 20 years. In
that time, Mr. Elliott has worked with such Fortune 500 companies as JC Penney
and First Union National Bank, as well as for a number of consulting
organizations. He has held positions ranging from application developer, systems
specialist, and project manager, to sales and senior management roles. Mr.
Elliott moved into the consulting arena as a regional specialist and eventually
moved into management as a technical director for Contract Data Services
(acquired by Vanstar and subsequently acquired by Inacom). This position, which
he held for five years, involved all aspects of the business from staff
management, sales effort and strategy, to managing the profitability of the
branch. In this capacity he was a partner responsible for developing a branch
into a top service provider throughout North Carolina and South Carolina and
servicing Fortune 500 companies such as First Union, Bank of America, MCI, Royal
and SunAlliance. Mr. Elliott was an original founder of Old Premier (the
predecessor to Premier) and was responsible for day-to-day operational aspects.
He currently is President and oversees the direction of the company. Mr. Elliott
has had financial reporting and processing responsibilities within Premier
Alliance Group for over 10 years, is adept at analyzing and evaluating financial
statements, understands internal controls over financial reporting and
processing and has worked closely with external auditors and CPA's over the past
10 years. Mr. Elliott has been employed by Premier since 1995.
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KEVIN J. HASENFUS has 25 years of professional information-technology
experience. He started his career as a programmer, systems analyst, and project
manager at major energy and financial institutions. Subsequently he served as a
product manager in the treasury management department of a large financial
institution, where he was accountable for the strategic planning and
implementation of the online banking system for large corporate customers. In
1990, he was named as a marketing director for a southeast-region
information-technology services company and was responsible for all sales and
marketing activity in a defined territory. He was one of the founding partners
of Old Premier (the predecessor to Premier) and operated as the Chairman until
November 2004. He currently is an Executive Vice President accountable for
directing day to day operation in recruiting, as well as for strategic planning.
Mr. Hasenfus received a Bachelor of Science degree from Virginia Tech. He was
valedictorian of his class at Airco Computer Learning Center. He has held
various positions in the Association of Systems Management, Goodwill Industries
Computer Training Program for the Handicapped, and the United Way. . Mr.
Hasenfus has been employed by Premier since 1995.
ROBERT N. YEARWOOD has been in the technology industry for more than 30 years.
Mr. Yearwood served as president of Old Premier (the predecessor to Premier)
from 1999 until November 2004. Prior to this, Mr. Yearwood was founder and
president of Software Data Services, Inc. ("SDS") from March 1988 until May
1999. In this capacity he grew the company from conception to approximately $9
million in annual sales. His responsibilities included sales, recruiting
management, sales management, and directing overall business development
efforts. Prior to forming SDS, Mr. Yearwood worked with three large regional
consulting organizations in progressively responsible positions beginning with a
sales position at Applied Management Systems (now known at CTG) to branch
manager at Systems and Programming Consultants (now known as Compuware) and
finally director of marketing at Metro Information Services (now known as
Keane). Mr. Yearwood gained his initial technology experience by spending seven
years in the field as a programmer and programmer/analyst. . Mr. Yearwood is
currently an Executive Vice President accountable for marketing and sales and
works on corporate strategies. Mr. Yearwood has been employed by Premier since
1999.
COMMITTEES OF THE BOARD OF DIRECTORS
AUDIT COMMITTEE
The audit committee is responsible for recommending independent auditors and
reviewing management actions in matters relating to audit functions. The
committee reviews, with independent auditors, the scope and results of its audit
engagement, the system of internal controls and procedures and reviews the
effectiveness of procedures intended to prevent violations of laws. The report
of the audit committee for fiscal year 2006 can be found below under the heading
"Proposal Two: Ratification of Appointment of Independent Auditors."
The audit committee, consistent with the Sarbanes-Oxley Act of 2002 and the
rules adopted thereunder, meets with management and the auditors prior to filing
of officers' certifications with the SEC to receive information concerning,
among other things, significant deficiencies in the design or operation of
internal controls.
The audit committee has recommended the selection of Scharf Pera & Co. PLLC as
our independent auditors for the year ended December 31, 2007. Scharf Pera
reports directly to the audit committee.
Our board of directors currently acts as our audit committee. None of our audit
committee members is "independent" in accordance with rule 4200(a)(14) of the
Nasdaq Marketplace Rules. Our board of directors does not have an "audit
committee financial expert," within the meaning of that phrase under applicable
regulations of the Securities and Exchange Commission, serving on the audit
committee. The board of directors believes that all members of the audit
committee are financially literate and experienced in business matters, and that
one or more members of the audit committee are capable of (1) understanding
generally accepted accounting principles ("GAAP") and financial statements, (2)
assessing the general application of GAAP principles in connection with our
accounting for estimates, accruals and reserves, (3) analyzing and evaluating
our financial statements, (4) understanding our internal controls and procedures
for financial reporting, and (5) understanding audit committee functions, all of
which are attributes of an audit committee financial expert. However, the board
of directors believes that no audit committee member has obtained these
attributes through the experience specified in the SEC's definition of "audit
committee financial expert." Further, as is the case with many small companies,
it would be difficult for us to attract and retain board members who qualify as
"audit committee financial experts," and competition for such individuals is
significant. The board of directors believes that its current audit committee is
able to fulfill its role under SEC regulations despite not having a designated
"audit committee financial expert."
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The audit committee operates under a formal charter that governs its duties and
conduct. A copy of the charter is available on our website,
www.premieralliance.com. The audit committee has adopted a non-retaliation
policy and a complaint-monitoring procedure to enable confidential and anonymous
reporting to the audit committee.
COMPENSATION COMMITTEE
The compensation committee determines, approves, and reports to the board of
directors on all elements of compensation of our executive officers. The
compensation committee also has the power to prescribe, amend, and rescind rules
relating to our stock option plans, to grant options and other awards under the
stock option plans, and to interpret the stock option plans.
Our board of directors currently acts as our compensation committee. None of the
members of the compensation committee is "independent" in accordance with rule
4200(a)(14) of the Nasdaq Marketplace Rules.
The compensation committee operates under a formal charter that governs its
duties and standards of performance. A copy of the charter is available on our
website, www.premieralliance.com.
NOMINATING COMMITTEE
Our board of directors currently acts as our nominating committee. The
nominating committee operates under a written charter, a copy of which is
available on our website, www.premieralliance.com.
The nominating committee performs the following functions:
o It considers, and recommends to the board of directors, individuals
for appointment or election as directors.
o It recommends to the board of directors individuals for appointment to
vacancies on any committee of the board of directors.
o It makes recommendations to the board of directors regarding any
changes to the size of the board of directors or any committee.
o It assists management in preparing proxy statement disclosure
regarding the operations of the committee.
o It reports to the board of directors on a regular basis, not less than
once a year.
o It performs any other duties or responsibilities expressly delegated
to the committee by the board of directors relating to board or
committee members.
Candidates for director should have certain minimum qualifications, including
being able to understand basic financial statements, being over 21 years of age,
having relevant business experience (taking into account the business experience
of the other directors), and having high moral character. The committee retains
the right to modify these minimum qualifications from time to time.
In evaluating an incumbent director whose term of office is set to expire, the
nominating committee will review that director's overall service to our company
during that director's term, including the number of meetings attended, level of
participation, quality of performance, and any transactions with our company
engaged in by that director during his or her term.
When selecting a new director nominee, the committee will first determine
whether the nominee must be independent for Nasdaq purposes or whether the
candidate must qualify as an "Audit Committee Financial Expert," as that term is
used in section 407 of the Sarbanes-Oxley Act of 2002. The committee will then
use its network of contacts to compile a list of potential candidates, but may
also engage, if it deems appropriate, a professional search firm. The committee
will then meet to consider the candidates' qualifications and chooses a
candidate by majority vote.
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Shareholders wishing to directly recommend candidates for election to the board
of directors at an annual meeting must do so by giving notice in writing to
Chairman of the Nominating Committee, Premier Alliance Group, Inc., 4521 Sharon
Road, Suite 300, Charlotte, North Carolina 28211. Any such notice must, for any
given annual meeting, be delivered to the chairman not less than 120 days prior
to the anniversary of the preceding year's annual meeting. The notice must state
(1) the name and address of the shareholder making the recommendations, (2) the
name, age, business address, and residential address of each person recommended,
(3) the principal occupation or employment of each person recommended, (4) the
class and number of shares of Premier Alliance Group shares that are
beneficially owned by each person recommended and by the recommending
shareholder, (5) any other information concerning the persons recommended that
must be disclosed in nominee and proxy solicitations in accordance with
Regulation 14A of the Securities Exchange Act of 1934, and (6) a signed consent
of each person recommended stating that he or she consents to serve as a
director of our company if elected.
The nominating committee will consider and vote on any recommendations so
submitted. In considering any person recommended by a shareholder, the committee
will look for the same qualifications that it looks for in any other person that
it is considering for a position on the board of directors.
Any shareholder nominee recommended by the committee and proposed by the board
of directors for election at the next annual meeting of shareholders will be
included in our proxy statement for that annual meeting.
COMMUNICATIONS FOR OUR SHAREHOLDERS TO THE BOARD OF DIRECTORS
Our board of directors recommends that shareholders direct to our assistant
corporate secretary any communications intended for the board of directors.
Shareholders can send communications by e-mail to investor@premieralliance.com
or by mail to Board of Directors, Premier Alliance Group, Inc., 4521 Sharon
Road, Suite 300, Charlotte, North Carolina 28211.
This centralized process will assist the board in reviewing and responding to
shareholder communications in an appropriate manner. If a shareholder wishes to
direct any communication to a specific board member, the name of that board
member should be noted in the communication. The board of directors has
instructed the assistant corporate secretary to forward shareholder
correspondence only to the intended recipients, but the board has also
instructed Mark S. Elliott, our president, to review all shareholder
correspondence and, in his discretion, not forward any items that he deems to be
of a commercial or frivolous nature or otherwise inappropriate for the board's
consideration.
BOARD AND COMMITTEE MEETINGS
During our fiscal year ended December 31, 2006, the board of directors held two
meetings and acted by unanimous written consent one time. Each director attended
100% of the board meetings and meetings of the board committees on which he
served.
During our fiscal year ended December 31, 2006, the audit committee met one time
and did not act by written consent. The compensation committee and nominating
committee did not meet or act by written consent.
DIRECTOR ATTENDANCE AT ANNUAL MEETINGS
Our directors are encouraged, but not required, to attend the annual meeting of
shareholders.
8
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under Section 16 of the Exchange Act, our directors and executive officers and
beneficial owners of more than 10% of any class of our equity securities are
required to file certain reports, within specified time periods, indicating
their holdings of and transactions in any class of equity securities and
derivative securities. Based solely on a review of any such reports provided to
us and written representations from such persons regarding the necessity to file
any such reports, we are not aware of any failures to file reports or report
transactions in a timely manner during our fiscal year ended December 31, 2006.
CORPORATE GOVERNANCE
We operate according to a comprehensive plan of corporate governance for the
purpose of defining responsibilities, setting high standards of professional and
personal conduct, and assuring compliance with those responsibilities and
standards. We regularly monitor developments in the area of corporate
governance. In July 2002, Congress passed the Sarbanes-Oxley Act of 2002, which,
among other things, establishes, or provides the basis for, a number of new
corporate governance standards and disclosure requirements. The board of
directors has initiated actions consistent with these new rules and will
continue to monitor developments in this area. Some are described below; others
are described elsewhere in this proxy statement.
CODE OF ETHICS
We have adopted a code of ethics relating to financial management (for its
principal executive officer and its senior financial officers). A copy of the
code of ethics is available on our website, www.premieralliance.com. Violations
of our code of ethics may be reported to the audit committee.
PERSONAL LOANS TO EXECUTIVE OFFICERS AND DIRECTORS
We comply with recently enacted legislation outlawing extensions of credit in
the form of personal loans to or for its directors and executive officers.
EXECUTIVE COMPENSATION
The following table sets forth the annual compensation paid to our executives
for the fiscal year ended December 31, 2006. Each of our officers assumed their
positions on November 5, 2004, on consummation of our share exchange agreement
with Premier Alliance Group, Inc., a North Carolina corporation. This share
exchange agreement is described in our annual report on Form 10-KSB for the
fiscal year ended December 31, 2004.
- -------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
- -------------------------------------------------------------------------------
Annual Compensation
----------------------------------------
Other Annual
Name and Principal Compensa-
Position Year Salary Bonus($) tion(1)
- --------------------------- ---------- ----------- ------------ ---------------
Mark S. Elliott, 2006 $180,000 - $3,560
President
- --------------------------- ---------- ----------- ------------ ---------------
Robert N. Yearwood, 2006 $180,000 - $10,800
Exec Vice President
- --------------------------- ---------- ----------- ------------ ---------------
Kevin J. Hasenfus, 2006 $180,000 - $10,800
Exec Vice President
- --------------------------- ---------- ----------- ------------ ---------------
9
(1) The amount under "Other Annual Compensation" represents a car allowance or
allocations.
No grants of stock options or stock appreciation rights were made during the
last fiscal year to our officers and our officers did not exercise any stock
options during the last fiscal year. In addition, we do not have an equity
compensation plan.
COMPENSATION OF DIRECTORS
We do not currently compensate our directors. Furthermore, whereas we may in the
future compensate non-employee directors, we anticipate that we will not
compensate for their services as director those of our directors who are
employees.
EMPLOYMENT CONTRACTS
We do not have employment agreements with any of our employees.
LIMITS ON LIABILITY AND INDEMNIFICATION
Our articles of incorporation eliminate the personal liability of our directors
to the fullest extent permitted by law. The articles of incorporation further
provide that the Company will indemnify its officers and directors to the
fullest extent permitted by law. We believe that this indemnification covers at
least negligence and gross negligence on the part of the indemnified parties.
Insofar as indemnification for liabilities under the Securities Act may be
permitted to our directors, officers, and controlling persons under the
foregoing provisions or otherwise, we have been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is therefore
unenforceable.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of March 26, 2007, with
respect to the beneficial ownership of our outstanding common stock and Class A
preferred stock by (i) any holder of more than five (5%) percent; (ii) each of
our executive officers and directors; and (iii) our directors and executive
officers as a group. Except as otherwise indicated, each of the stockholders
listed below has sole voting and investment power over the shares beneficially
owned. For purposes of this table, a person or group of persons is deemed to
have "beneficial ownership" of any shares of common stock they have the right to
acquire within 60 days of March 26, 2007. When computing beneficial ownership
percentages, shares of common stock that may be acquired within 60 days are
considered outstanding for that holder only, not for any other holder.
The number and percentage of shares beneficially owned are based on 5,867,945
shares of common stock and 560,746 shares of Class A preferred stock issued and
outstanding as of March 26, 2007.
Unless otherwise indicated in the footnotes below, the persons and entities
named in the table have sole voting or investment power with respect to all
shares owned, subject to community property laws. And unless otherwise
indicated, the address of each person is care of Premier Alliance Group, Inc.,
4521 Sharon Road, Suite 300, Charlotte, North Carolina 28211.
- ------------------------ ------------------ ----------------- ----------
NUMBER OF SHARES OWNERSHIP
NAME BENEFICIALLY OWNED CLASS OF STOCK PERCENTAGE
- ------------------------ ------------------ ----------------- ----------
Mark S. Elliott 646,016 Common 11.0%
- ------------------------ ------------------ ----------------- ---------
Robert N. Yearwood 1,602,119 Common 27.3%
- ------------------------ ------------------ ----------------- ---------
Kevin J. Hasenfus 1,292,031 Common 22.0%
- ------------------------ ------------------ ----------------- ---------
10
- ------------------------ ------------------ ----------------- ----------
NUMBER OF SHARES OWNERSHIP
NAME BENEFICIALLY OWNED CLASS OF STOCK PERCENTAGE
- ------------------------ ------------------ ----------------- ----------
All directors and officers 3,540,166 Common 0.3%
as a group (3 persons)
- ------------------------ ------------------ ----------------- ---------
Richard C. Siskey 981,944 Common 16.7%
- ------------------------ ------------------ ----------------- ---------
Vicki Elliott 646,016 Common 11.0%
- ------------------------ ------------------ ----------------- ---------
Steven Bayern 694,974 (1) Common 10.7%
- ------------------------ ------------------ ----------------- ---------
Patrick Kolenik 694,974 (1) Common 10.7%
- ------------------------ ------------------ ----------------- ---------
Huntington Laurel 155,044 Class A preferred 27.6%
Partners LP
5 Cedar Wood Ct
Laurel Hollow, NY 11791
- ------------------------ ------------------ ----------------- ---------
Jerry R. King 103,363 Class A preferred 18.4%
2228 Hwy 102
Chesterfield, SC 29709
- ------------------------ ------------------ ----------------- ---------
Terry F. King 103,363 Class A preferred 18.4%
4901 Winding Lane
Indian Trail, NC 28079
- ------------------------ ------------------ ----------------- ---------
Joseph A. Magurne and 103,363 Class A preferred 18.4%
Joseph M Magurne
1 Geordian Ct
Albertson, NY 11507
- ------------------------ ------------------ ----------------- ---------
Joseph R. Nemeth 51,682 Class A preferred 9.2%
Living Trust
29829 Telegraph
Suite 111
Southfield, MI 48034
- ------------------------ ------------------ ----------------- ---------
(1) Includes (a) 289,291 shares issuable upon exercise of a stock option held by
Cyndel & Co., Inc., a company controlled by Mr. Bayern and Mr. Kolenik, (b)
155,044 shares issuable upon conversion of Class A preferred stock held by
Huntington Laurel Partners LP, of which Mr. Bayern and Mr. Kolenik are General
Partners, and (c) 155,044 shares issuable upon exercise of warrants held by
Huntington Laurel Partners LP, of which Mr. Bayern and Mr. Kolenik are General
Partners.
11
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Transactions with Related Persons
We own life insurance policies on the life of each of Mark. S Elliott, Kevin J.
Hasenfus, and Robert N. Yearwood, each policy having a face amount of
$3,000,000. These policies were purchased by Premier Alliance Group, Inc., the
North Carolina corporation we acquired in a share exchange effective November 5,
2004. The policies were purchased to fund the repurchase of shares contemplated
by a shareholders agreement; that agreement was terminated on our acquisition of
the North Carolina. We elected to maintain the policies in order to provide a
benefit and an incentive to the employees in question.
An agreement with each of the employees relating to these policies provides that
we retain ownership of the policy and are required to pay all scheduled monthly
premiums and take all other actions necessary to maintain the policy in force,
all until the earliest to occur of death of the employee, termination of the
employee's employment, purchase of the policy by the employee, or our
termination of the agreement. We have the right to terminate the agreement at
any time in our sole discretion on at least 60 days' prior notice. If the
employee dies at any time while we still own the policy, we are required to pay
the employee's designated beneficiary an annual survivor's benefit of $300,000
per year for ten consecutive years.
Promoters and Control Persons
Roberrt L. Frome and Michael Wainstein, our former officers and directors, acted
as promoters subsequent to our reorganization in 2000. As compensation, from
January 2000 to August 2004, Messrs. Frome and Wainstein received an aggregate
of 100,952 and 92,600 shares of common stock, respectively. They received no
other compensation, and are not owed any in the future.
Director Independence
None of our directors are "independent" in accordance with rule 4200(a)(14) of
the Nasdaq Marketplace Rules.
PROPOSAL TWO:
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
INDEPENDENT AUDITORS
Scharf Pera has been our principal accounting firm since December 2004, prior to
which our principal accounting firm was Marcum & Kliegman LLP. THE BOARD OF
DIRECTORS RECOMMENDS THAT YOU VOTE YOUR SHARES FOR RATIFICATION OF SELECTION OF
SCHARF PERA & CO. PLLC AS OUR INDEPENDENT AUDITORS FOR THE 2007 FISCAL YEAR.
We do not anticipate that representatives of Scharf Pera & Co. PLLC will attend
the annual meeting.
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The audit committee oversees our financial reporting process on behalf of the
board of directors. Management has the primary responsibility for the financial
statements and the reporting process, including the system of internal control.
In fulfilling its oversight responsibilities, the committee reviewed the audited
financial statements in the annual report on Form 10-KSB with management,
including a discussion of the quality, not just the acceptability, of the
accounting principles; the reasonableness of significant judgments; and the
clarity of disclosures in the financial statements.
The committee reviewed with the independent auditors, who are responsible for
expressing an opinion on the conformity of those audited financial statements
with accounting principles generally accepted in the U.S., their judgments as to
the quality, not just the acceptability, of our accounting principles, and such
other matters as are required to be discussed with the committee under auditing
standards of the Public Company Accounting Oversight Board (United States). In
addition, the committee has discussed with the independent auditors the
auditors' independence from management and our company, including the matters in
the written disclosures required by the Independence Standards Board, and
considered the compatibility of non-audit services with the auditors'
independence.
12
The committee discussed with our independent auditors the overall scope and
plans for their audit. The committee meets with the independent auditors to
discuss the results of their examinations, their evaluations of our internal
controls, and the overall quality of our financial reporting. The committee held
one meeting during fiscal year 2006.
In reliance on the reviews and discussions referred to above, the committee
recommended to the board of directors (and the board of directors has approved)
that the audited financial statements be included in the annual report on Form
10-KSB for the year ended December 31, 2006, for filing with the Securities and
Exchange Commission.
AUDIT FEES AND ALL OTHER FEES
Fees for audit services totaled approximately $18,565 in fiscal year 2006 and
approximately $19,037 in fiscal year 2005, including fees associated with the
annual audit and the reviews of our quarterly reports on Form 10-QSB. During
fiscal year 2006 we incurred audit-related fees and tax fees of $8,565 related
to work performed by our independent auditors, but incurred no other fees
related to work performed by our independent auditors. The audit-related fees
were incurred in connection with our filing of financial statements as part of
the current report on Form 8-K that we are required to file.
AUDIT COMMITTEE PRE-APPROVAL OF AUDIT SERVICES AND PERMISSIBLE NON-AUDIT
SERVICES.
Consistent with the Sarbanes-Oxley Act and the SEC regulations promulgated
thereunder, the audit committee has established a policy to pre-approve all
audit and permissible non-audit services to be performed by our independent
auditors.
Respectfully submitted March 21, 2007, by the members of the audit committee.
MARK S. ELLIOTT, KEVIN J. HASENFUS, ROBERT N. YEARWOOD
***
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Mark S. Elliott
Mark S. Elliott
President
Dated: March 21, 2007
13
PROXY CARD
PREMIER ALLIANCE GROUP, INC.
2007 ANNUAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned, revoking all previous proxies, hereby appoints each of Mark S.
Elliott and Robert N. Yearwood as proxies, acting jointly and severally, with
full power of substitution, for and in the name of the undersigned to vote all
shares of common stock, par value $.001 per share, of Premier Alliance Group,
Inc., that the undersigned would be entitled to vote if present in person at the
annual meeting of shareholders to be held on 1:00 p.m. Eastern Daylight Time on
May 11, 2007, at the company's offices at 4521 Sharon Road, Suite 300,
Charlotte, North Carolina 28211, and at any adjournment, on the matters
described in the accompanying proxy statement and on any such other matters as
may properly come before the annual meeting. The proxies are directed to vote or
refrain from voting as checked on the reverse side on the matters listed on the
reverse side, and otherwise may vote in their discretion.
This proxy granted by this proxy card will be voted in the manner directed on
the reverse side by the undersigned shareholder. If no direction is specified,
this proxy will be voted FOR proposals 1 and 2. With respect to any other
matters that properly come before the annual meeting, the proxies may vote at
their discretion. The board of directors currently knows of no other business
that will come before the annual meeting. If at the time of the annual meeting
any of the nominees listed on this proxy card are unable to serve, this proxy
will be voted for any other person or persons, if any, that the board of
directors designates.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE "FOR" PROPOSALS 1 AND 2
1. Election of the following director nominees to serve for the following year
and until their successors are elected:
Nominees are: Mark S. Elliott, Kevin J. Hasenfus, and Robert N. Yearwood.
FOR ALL NOMINEES WITHHOLD AUTHORITY FOR WITHHELD FOR THE FOLLOWING ONLY:
LISTED ABOVE ALL NOMINEES (WRITE THE NAME(S) OF THE
WITH EXCEPTIONS NOTED NOMINEE(S) IN THE SPACE BELOW)
/ / / /
-------------------------------
2. Ratification of the selection of Scharf Pera & Co. PLLC as our independent
auditors for the fiscal year ending December 31, 2006.
FOR AGAINST ABSTAIN
/ / / / / /
Mark here if your address has changed and provide us with your new address in
the space provided to the right:
NEW ADDRESS:
Dated: ___________________________, 2007
SIGNATURE(S) OF STOCKHOLDER(S)
TITLE
Please mark, date and sign exactly as
your name appears above and return in
the enclosed envelope. If acting as
executor, administrator, trustee,
guardian, etc., you should so indicate
when signing. If the signer is a
corporation, please sign the full
corporate name, by duly authorized
officer. If shares are held jointly,
each shareholder named should sign.
PROXY CARD
PREMIER ALLIANCE GROUP, INC.
2007 ANNUAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned, revoking all previous proxies, hereby appoints each of Mark S.
Elliott and Robert N. Yearwood as proxies, acting jointly and severally, with
full power of substitution, for and in the name of the undersigned to vote all
shares of Class A preferred stock, par value $.001 per share, of Premier
Alliance Group, Inc., that the undersigned would be entitled to vote if present
in person at the annual meeting of shareholders to be held on 1:00 p.m. Eastern
Daylight Time on May 11, 2007, at the company's offices at 4521 Sharon Road,
Suite 300, Charlotte, North Carolina 28211, and at any adjournment, on the
matters described in the accompanying proxy statement and on any such other
matters as may properly come before the annual meeting. The proxies are directed
to vote or refrain from voting as checked on the reverse side on the matters
listed on the reverse side, and otherwise may vote in their discretion.
This proxy granted by this proxy card will be voted in the manner directed on
the reverse side by the undersigned shareholder. If no direction is specified,
this proxy will be voted FOR proposals 1 and 2. With respect to any other
matters that properly come before the annual meeting, the proxies may vote at
their discretion. The board of directors currently knows of no other business
that will come before the annual meeting. If at the time of the annual meeting
any of the nominees listed on this proxy card are unable to serve, this proxy
will be voted for any other person or persons, if any, that the board of
directors designates.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE "FOR" PROPOSALS 1 AND 2
1. Election of the following director nominees to serve for the following year
and until their successors are elected:
Nominees are: Mark S. Elliott, Kevin J. Hasenfus, and Robert N. Yearwood.
FOR ALL NOMINEES WITHHOLD AUTHORITY FOR WITHHELD FOR THE FOLLOWING ONLY:
LISTED ABOVE ALL NOMINEES (WRITE THE NAME(S) OF THE
WITH EXCEPTIONS NOTED NOMINEE(S) IN THE SPACE BELOW)
/ / / /
-------------------------------
2. Ratification of the selection of Scharf Pera & Co. PLLC as our independent
auditors for the fiscal year ending December 31, 2006.
FOR AGAINST ABSTAIN
/ / / / / /
Mark here if your address has changed and provide us with your new address in
the space provided to the right:
NEW ADDRESS:
Dated: ___________________________, 2007
SIGNATURE(S) OF STOCKHOLDER(S)
TITLE
Please mark, date and sign exactly as
your name appears above and return in
the enclosed envelope. If acting as
executor, administrator, trustee,
guardian, etc., you should so indicate
when signing. If the signer is a
corporation, please sign the full
corporate name, by duly authorized
officer. If shares are held jointly,
each shareholder named should sign.