SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [ x ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material under Rule 14a-12
SYNERGY BRANDS INC.
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(Name of Registrant as Specified in Its Charter)
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(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 Rule 14a-6(i)(4) and 0-11.
1. Title of each class of securities to which transaction applies
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2. Aggregate number of securities to which transaction applies:
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3. Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined)
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4. Proposed maximum aggregate value of transaction:
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5. Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] check box if any part of the fee is offset as provided by Exchange Act rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1. Amount Previously Paid:
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2. Form, Schedule or Registration Statement No.
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3. Filing Party:
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4. Date Filed:
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SYNERGY BRANDS INC.
1175 Walt Whitman Road
Melville, NY 11747
PROXY STATEMENT
and
2004 ANNUAL REPORT TO STOCKHOLDERS
PROXY STATEMENT
This statement is furnished as notice of and in connection with a
solicitation of proxies by the Board of Directors (the "Board of Directors" or
the "Board") of Synergy Brands Inc. (the "Company") to be used at the Annual
Meeting of Stockholders of the Company (the "Meeting") to be held on June 24,
2005 at 10:00 A.M. at Melville Marriott, Melville, New York, 631-423-1600.Please
refer to the Safe Harbor Statement and other for information about factors which
could cause future results to differ materially from forward-looking,
statements, expectations and assumptions expressed and/or implied in this
publication as such are more particularly included in the Company's filed annual
report on Form 10K.
VOTING PROCEDURES
Stockholders of record at the close of business on May 1, 2005 will be
entitled to vote at the Meeting. On April 29, 2005 there were outstanding
3,578,168 shares of Common Stock and a similar amount is expected to be
outstanding as of the record date set for the Meeting, par value $.001 per share
("Common Stock"), each of which being entitled to one vote at the Meeting,
100,000 shares of Class A Preferred Stock, par value $.001 per share ("Class A
Preferred") each of which being entitled to 13 votes at the Meeting (vote is
controlled by Mair Faibish, Chief Executive Officer of the Company) and 330,000
shares of Series A Class B ("Class B Preferred") without any voting power at the
Meeting ( such "Preferred Stock together with the Common Stock, collectively
hereinafter referred to as the "Company Shares"), outstanding. Holders of the
Common Stock and the Class A Preferred Stock will vote as a single class as to
all matters to come before the Meeting. A Shareholder List disclosing
shareholders of record on May 1, 2005 shall be made available for inspection by
shareholders entitled to vote at the Annual Meeting at the location of the
Meeting on the date of and in advance of the date of the Meeting.
The By-Laws of the Company (the "By-Laws") provide that the holders of a
minimum of one third of the votes represented by the Company Shares issued and
outstanding and entitled to vote at the Meeting, present in person or
represented by proxy, shall constitute a quorum at the Meeting. The By-Laws
further provide that the directors of the Company shall be elected by a
plurality vote, and that, except as otherwise provided by statute, the
Certificate of Incorporation of the Company, or the By-Laws, all other matters
coming before the meeting shall be decided by the vote of a majority of the
number of Company Shares present in person or represented by proxy at the
Meeting and entitled to vote thereat where a quorum is present.
Votes cast at the Meeting will be counted by the persons appointed by the
Company to act as inspectors of election for the Meeting. The inspectors of
election will treat Company Shares represented by a properly executed and
returned proxy as present at the Meeting for purpose of determining a quorum.
Abstention and broker non-votes with respect to particular proposals will not
affect the determination of a quorum.
Six directors will be elected by a plurality of the votes represented by
the Company Shares present, in person or by proxy, and entitled to be cast at
the Meeting where a quorum is present. Accordingly, abstentions and broker
non-votes as to the election of directors will have no effect thereon. All other
matters to come before the Meeting require either the approval of a majority of
the votes represented by all Company Shares or those present at the meeting and
entitled to vote thereon, therefore abstentions as to particular proposals will
have the same effect as votes against such proposals. Broker and other non-votes
as to particular proposals will not, however, be deemed to be a part of the
voting power present with respect to such proposals and will not therefore count
as votes for or against such proposals and will not be included in calculating
the number of votes necessary for approval of such proposals except for
establishment of a quorum and as to those proposals requiring a majority vote of
all Company Shares.
-3-
The Board of Directors solicits proxies in the enclosed form to provide an
opportunity for every eligible stockholder to vote on all matters to come before
the Meeting, whether or not he or she attends in person. If proxies in the
enclosed form are properly executed and returned, the Company Shares represented
thereby will be voted at the Meeting in accordance with stockholder direction.
Proxies in the enclosed form upon presentation unless otherwise designated
thereon will be voted FOR the election of each nominated director, and FOR the
election of Holtz Rubenstein Reminick LLP as the Company's auditors for the
fiscal year ending December 31, 2005, such being all of the proposals presently
existing for shareholder vote at the Meeting. Any stockholder executing a proxy
may revoke that proxy or submit a revised one at any time before it is voted. A
stockholder may also attend at the Meeting in person and vote by ballot, thereby
canceling any proxy previously given. Except for the proposals hereinabove
mentioned, Company management expects no other matters to be presented for
action at the Meeting. If, however, any other matters properly come before the
Meeting, the persons named as proxies in the enclosed form of proxy intend to
vote in accordance with their judgment on the matters presented unless otherwise
specified in the Proxy.
PROXY SOLICITATION
The cost of soliciting proxies will be borne by the Company. In addition to
solicitations by mail, arrangements have been made for brokers and nominees to
send proxy material to their principals, and the Company will reimburse them for
their reasonable expenses in doing so. The Company's transfer agent, American
Stock Transfer and Trust Company, will assist it in the solicitation of proxies
from brokers and nominees. The fees for the services of the transfer agent are
included in the monthly fees paid by the Company, however, the Company will
reimburse the transfer agent for its reasonable out-of-pocket expenses incurred
in connection with providing solicitation services. Certain employees of the
Company, who will receive no compensation for their services other than their
regular remuneration, may also solicit by telephone, telegram, telex, telecopy,
or personal interview.
PROPOSAL 1. ELECTION OF DIRECTORS
Dominic Marsicovetere has decided not to seek re-election to the Company's
Board of Directors, not because of any voiced concerns or disagreement with the
Company but rather to allow him to pursue other endeavors and to have less
constraints then at present with him being on the Company's Board of Directors
and the Audit Committee of such Board as to how he may consult with and assist
the Company. The Company has decided not to seek to fill the vacancy to be
created by Mr. Marsicovetere not seeking re-election but rather has decided to
decrease their Board of Directors to six members. Therefore, at the Meeting, six
directors are to be elected to a one-year term and to hold office until their
successors are elected and qualified. The Board of Directors consists of one
class, which serves for a one-year term or until their successor is elected and
qualifies. The persons named in the enclosed form of proxy intend to vote such
proxy, unless otherwise directed, FOR the election of each of the directors
nominated to serve on the Board to serve until the fiscal 2005 Annual Meeting of
Stockholders or other dates for proposed election of new directors. If contrary
to present expectation, any of the nominees should become unavailable for any
reason, votes may be cast pursuant to the accompanying form of proxy for a
substitute nominee designated by the Board.
The current nominees are:
Mair Faibish
Randall J. Perry
Frank A. Bellis Jr.
Lloyd Miller
Joel Sebastian
Bill Rancic
Except for Dominic Marsicovetere who is not seeking re-election, these
persons constitute the complete current Board of Directors of the Company. The
Company's Governance and Nominating Committee has proposed, considered and
endorsed these candidates for re-election.
-4-
INFORMATION CONCERNING DIRECTORS AND DIRECTOR NOMINEES.
Set forth is certain information concerning directors and director
nominees. Each of these persons are nominated to serve as a director for fiscal
year 2005 and/or until their successor is elected and qualified.
Year First
Elected A
Name of Director/Nominee Age Position Director
--------------- --- -------- --------
Mair Faibish 45 Chairman and Chief
Executive Officer
and Director 1989
Nominee
Randall J. Perry 50 Director 2002
Nominee
Frank A. Bellis Jr. 51 Director 2003
Nominee
Lloyd Miller 50 Director
Nominee 2004
Joel Sebastian 63 Director
Nominee 2004
Bill Rancic 33 Director
Nominee 2004
MAIR FAIBISH. Mr. Faibish has been CEO since January 1, 2000, prior thereto
he served as Executive Vice President, Chief Financial Officer and a Director of
the Company since May 1989. He serves on the Employee Compensation Committee and
the Executive Committee. From 2001 to the present Mr. Faibish serves (for no
compensation) as the Chairman of Columbia University's Alumni Representative
Committee for Suffolk County New York responsible for coordinating admission
interviews for prospective student candidates.
-5-
RANDALL J. PERRY has acted in the past and is presently retained as
corporate and securities counsel for the Company. Mr. Perry is an attorney
licensed and practicing in New Jersey, New York and Pennsylvania. Mr. Perry has
been in active law practice since 1981. Mr. Perry is a graduate of Penn State
University (1975 BA) and Seton Hall University Law Center (JD 1980). Mr. Perry
is licensed to practice law in New Jersey, New York and Pennsylvania.
FRANK A. BELLIS JR. has been director since August 2003. Mr. Bellis was the
former President of Claridge Casino Hotel (currently owned by Park Place
Entertainment NYSE: PPS) until December 2002. Previously, Mr. Bellis was chief
legal officer, CEO and a director of Claridge from 1991 to 2002. Mr. Bellis is
currently president of Proviceline Associates LLC, a company dedicated to
providing a broad range of advice to emerging organizations in financial
transition.
Mr. Bellis' other present Directorships include:
- Advisor to the Board of the Atlantis Internet Group, February
2003-Present
- Caring, Inc., February 2003-Present
Mr. Bellis has obtained a degree, AB with honors, from Brown University
(1975) and a JD from Seton Hall University Law Center (1982) and is presently
admitted to practice law with the Bar of New Jersey, US District Court for
District of New Jersey, US Court of Appeals for the Third Circuit and the US
Supreme Court.
-6-
JOEL SEBASTIAN is a nominee for a director. Mr. Sebastian is currently Vice
President of Special Projects for Bozzuto's Inc., a Connecticut based consumer
product distributor. Mr. Sebastian currently serves on the Board of Directors of
Food Marketing Institute (FMI) acting as Chairman of such company's Vendex and
ABC Convention Committees. Mr. Sebastian has past experience as Director of
Grocery Merchandising for Pegnataro's, Director of Purchasing and varied other
management positions for Sweet Life Foods, various management authority with
Supervalu culminating in his position as Vice President of Category Management
for the New England Region previous to the transfer of such part of Supervalu to
C&S Wholesalers in Bratelboro, Vt where after Mr. Sebastian returned to
Bozzuto's in his present management position there. Mr. Sebastian is a member of
various consumer merchandising trade associations and has served in the past on
advisory boards and management committees with IGA, Ralston Purina, Connecticut
Food Association, FDI (Formerly NAWGA) and Emeritus of North East Food
Distributors Association) and currently serves as Chairman of FDI's Vendex and
ABC Convention Committees. Mr. Sebastian has also schooled with the Levinson
Institute and a vast array of consumer product distribution training seminars
and has been guest speaker at numerous related trade association seminars,
conferences and conventions including those sponsored by the American Marketing
Association, Nestle Foods and Grocery Manufacture's of America, NEWFDA, the
Frozen Food Association of New England, the Connecticut/Western Mass Knights of
the Grip, Grocery Manufacturer Representatives of New England, Food Marketing
Institute and numerous universities and colleges.
LLOYD MILLER is a nominee for a director. Mr. Miller is an independent
investor and has served on numerous corporate boards including Vulcan
International, and American Controlled Industries, among others. Mr. Miller
currently serves as a director of Aldila, Inc., American Banknote Corporation,
Celeritek Inc., and FairMarket, Inc. He is a member of the Chicago Board of
Trade and the Chicago Stock Exchange, and traded actively on the floor of the
CBOT from 1978 to 1992. He is a Registered Investment Advisor. Mr. Miller
received his B.A. from Brown University.
BILL RANCIC is the founder and current president of The Ranley Group
trading as Cigars Around the World ("CAW"), the stock ownership of which in June
2003 was purchased by Gran Reserve Corporation, itself a subsidiary of Synergy
Brands Inc. Mr. Rancic is presently under contract to continue his activities
with CAW for at least two years from the date of such acquisition. CAW was
founded in 1995. CAW is a supplier/distributor of premium cigar products with
principal offices and distribution facilities in Chicago Illinois. Mr. Rancic is
the winner of the NBC Show The Apprentice and thereby has gained employment
associated therewith for a yet undetermined time period while also continuing to
pursue his other enterprising activities. Mr. Rancic is a 1992 Graduate of
Loyola University Chicago with a Bachelor's Degree in criminal justice.
Messrs. Sebastian, Rancic, Bellis and Miller meet, to the best knowledge of
the Company the independence standards set by the Securities and Exchange
Commission and NASDAQ except for the affiliate status of Lloyd Miller which does
not provide an independence standard for he sitting as a member of the Audit
Committee but does not disallow him from being otherwise considered an
independent member of the Company's Board of Directors, such that if all
nominees for directorships are elected the Broad of Directors of the Company
will be majority independent. The Company has no set policy on Director
attendance but does encourage full participation, most meetings of the Board
historically being by telephonic and other communication with decision making
accomplished by written consent mainly for convenience of the members, most not
being physically situated near the Company's business sites.
-7-
CORPORATE GOVERNANCE
Directors are elected at the annual meeting of stockholders and hold office
until their successors have been duly elected and qualified, or until the
earlier of their death, resignation or removal. In the interim between such
annual meetings the existing Board of Directors may increase or decrease the
number of directors on the Board and fill any vacancies thereby or otherwise
created, such other members to serve until their successors are duly elected by
the shareholders of the Company entitled to vote thereon or they terminate their
role as Director in some fashion and thereby create an interim vacancy to be
filled.
The Board of Directors has primary responsibility of directing the
management of the business and affairs of the Company. The Board currently
consists of seven members.
The Company has an Audit Committee, an Executive Committee, Executive
Compensation Committee, an Employee Compensation Committee and a Governance and
Nominating Committee.
The Audit Committee is presently comprised of Dominic A. Marsicovetere
(chair), Frank A. Bellis Jr. and Joel Sebastian and its functions include
recommending to the Board of Directors the engagement of the Company's
independent certified public accountants, reviewing with such accountants the
plan and results of their examination of the consolidated financial statements
and determining the independence of such accountants. The Audit Committee also
has primary responsibility for reviewing all related party transactions.
However, it is the Company's policy that all related party transactions be
approved by a majority of the disinterested directors of the Company. Such
directors will not be required to make a determination that each related party
transaction meets a fairness test, but will decide whether the transaction is in
the best interest of the Company. The Audit Committee is comprised totally of
independent directors as required by NASDAQ. A copy of the Audit Committee
Charter is included on the Company's website.
The Company believes that Dominic Marsicovetere and Frank A. Bellis, Jr.
may be qualified as an "audit committee financial expert" as defined by the
Securities and Exchange Commission and NASDAQ.
-8-
The Executive Committee is presently comprised of Joel Sebastian and Mair
Faibish and is responsible for establishing policies and procedures relating to
the administration and operation of the Company.
The Executive Compensation Committee, presently consisting of Dominic
Marsicovetere and Joel Sebastian, the Company's two independent non-employee
directors, is authorized to review and make recommendations with respect to
compensation of officers and key employees. They also administer the Company's
1994 Services and Consulting Compensation Plan, as amended (the "1994 Option
Plan"), with respect to compensation of directors (except non-employee
directors) and officers and consultants of the Company.
The Employee Compensation Committee, presently consisting of Frank A.
Bellis, Jr., Lloyd Miller and William Rancic, is authorized to review and make
recommendations with respect to compensation of employees who are not officers
or directors.
The Governance and Nominating Committee presently consisting of Joel
Sebastian, Lloyd Miller and Frank A. Bellis Jr., assists the full Board of
Directors in identifying and recommending individuals qualified to become
directors and will consider all qualified nominees recommended by shareholders.
The Board of Directors has adopted a charter for the Governance and Nominating
Committee, a copy of which is included on the Company's website.
The Nominating Committee will seek candidates for an open director position
by soliciting suggestions from Committee members, the Chairman of the Board,
incumbent directors, senior management and/or others. The Committee also may
retain a third-party executive search firm to identify candidates from time to
time. Additionally, the Committee will consider any unsolicited recommendation
for a potential candidate to the Board from Committee members, the Chairman of
the Board, other Board members, management and shareholders.
The Governance and Nominating Committee will consider nominees recommended
by any shareholder of the Company who delivers timely notice of the nomination
in proper written form to the Company's secretary at the Company's principal
executive office. To be timely, the notice must be received not less that the
time allowed for other shareholder proposals seeking entry onto the agenda for
the next following Annual Meeting. The notice must include certain biographical
information about both the proposed nominee and the shareholder submitting the
proposal as well as disclose the number of shares of Company Common Stock owned
by each of the proposed nominee and the shareholder making the proposal. The
proposal must also contain the proposed nominee's written signed consent to
being named as nominee in the proxy statement and to serving on the Board of
Directors if nominated and subsequently elected.
The Governance and Nominations Committee does not set specific, minimum
qualifications that nominees must meet in order for the committee to recommend
them to the Board of Directors, but rather believes that each nominee should be
evaluated based on his or her individual merits, taking into account the needs
of the Company and the composition of the Board of Directors.
-9-
The policy adopted by the Committee provides that nominees recommended by
stockholders are given appropriate consideration in the same manner as other
nominees.
The Board of Directors will be responsible for making the final
determination regarding prospective nominees after considering the
recommendations of the Committee.
Executive officers serve at the discretion of the Board of Directors,
subject to any employment agreement between the executive officer and the
Company.
The Board of Directors and its Committees voted by unanimous or majority
(on notice to others not voting) written consent in lieu of formal meetings with
respect to all actions taken during the year ended December 31, 2004 and
thereafter in 2005. All present directors attended at the 2003 Annual Meeting of
Shareholders except for Mr. Miller. Mr. Bellis, Mr. Sebastian and Mr. Rancic.
None of the directors or respective officers of the Company have over the
last two fiscal years been involved in any material transactions with the
Company wherein the amount of money involved exceeded $60,000 except that the
Company has paid to Mr. Perry on retainer the sum of $125,000 for 2003 and 2004
for legal services rendered on behalf of the Company. No other material
transactions involving the officers and or directors of the Company and the
Company are proposed where the amount to be paid exceeds $60,000 except that the
Company anticipates continuing to pay for legal services to Randall J. Perry to
similar extent in fiscal 2005. There are also no common affiliations between the
Company and officers and/or directors in any other business or entity, to the
best knowledge of the Company and no legal proceedings involving securities
issues or any bankruptcy proceedings and/or criminal proceedings are pending or
have existed within the last five years involving any officers and/or directors
of the Company or any officers, directors and/or affiliates of the Company as an
adverse party to the Company.
No officer or director or affiliate thereof is or in the last fiscal year
has been in debt to the Company in excess of $60,000.
The Company has adopted a code of conduct for its senior executive and
financial officers (the "Code of Conduct"), a copy of which is included on the
Company's website. The Company will make any legally required disclosures
regarding amendments to, or waivers of, provisions of its Code of Conduct in
accordance with the rules and regulations of the SEC.
-10-
COMPENSATION OF DIRECTORS/ NON-EMPLOYEE DIRECTOR PLAN
Directors and committee members who are part of management serve as such
without compensation but are reimbursed for their reasonable out-of-pocket
expenses in attending meetings of the Board and its committees. Pursuant to the
Company's S-8 Option Plan, directors who are not employees of the Company are
granted annually $30,000 in shares of Common Stock at a price equal to fair
market value on the date of grant and an additional $10,000 in stock as to the
members of the Company's Audit Committee immediately upon their election or
reelection to the Board of Directors.
RECOMMENDATION AND VOTE
The Board of Directors recommends the election of the nominees listed above
as directors of the Company to hold office until the next annual meeting or
until their successors are elected and qualified. The affirmative vote of a
plurality of the votes represented by the Company Shares represented at the
Meeting where a quorum is present is required for such approval. Quorum at the
meeting shall require attendance in person and/or by proxy by at least one-third
amount of the potential votes outstanding.
PRINCIPAL STOCKHOLDERS
The following table sets forth as of April 29, 2005 information regarding
the beneficial ownership of the Company's voting securities (i) by each person
who is known to the Company to be the owner of more than five percent of the
Company's voting securities, (ii) by each of the Company's directors, and (iii)
by all directors and executive officers of the Company as a group each share of
Common Stock being entitled to one vote and Class A Preferred Stock being
entitled to 13 votes per share:
Amount and Nature of
Beneficial Ownership Percent of Class
Name and Address of Common Preferred Common Preferred
Beneficial Owner Stock Stock Stock Stock
- --------------------- ----- ----- ----- -----
Mair Faibish (1)............. 139,342 100,000 3.9% 100%
1175 Walt Whitman Road
Melville, NY 11747
Mitchell Gerstein............ -0- -0- -0- --
1175 Walt Whitman Road
Melville, NY 11747
Dominic A. Marsicovetere..... -0- -0- -0- --
1175 Walt Whitman Road
Melville, NY 11747
Randall J. Perry........... -0- -0- -0- --
44 Union Avenue
PO Box 108
Rutherford, NJ 07070
-10-
Lloyd I. Miller III . .. 1,031,657 -0- 28.8% --
4550 Gordon Drive
Naples, Florida 34102
Frank A. Bellis Jr. 5,900 -0- -0- --
1175 Walt Whitman Road
Melville, NY 11747
Joel Sebastian -0- -0- -0- --
1175 Walt Whitman Road
Melville, NY 11747
Bill Rancic
1175 Walt Whitman Road
Melville, NY 11747 90,000 -0- 2.5% --
All Officers and Directors
as Group(3)................. 1,266,899 100,000 35.4% 100.0%
(1) Mr. Faibish owns the 100,000 shares of Class A Preferred Stock
outstanding. Each share of Preferred Stock is entitled to 13 votes on all
matters on which Common Stock may vote. Accordingly, the percentage of overall
voting power of the Company's voting securities beneficially owned by Mair
Faibish and all officers and directors as a group is increased accordingly to
36% and 53% respectively.
-11-
PROPOSAL 2. ELECTION OF AUDITORS
The Board of Directors, on the recommendation and vote of the Audit
Committee, has appointed Holtz Rubenstein Reminick LLP as independent auditors
for the Company for the fiscal year ending December 31, 2005. Although not
required to do so, the Board has proposed and recommends that the firm of Holtz
Rubenstein Reminick LLP be elected by the Company's Shareholders at the Annual
Meeting as the Company's auditors for the year ending December 31, 2005.
Effective January 20, 2004, the Company's Board of Directors first approved the
engagement of Holtz Rubenstein Reminick LLP to serve as the Company's
independent public accountants for the fiscal 2004 audit and they have
continuously acted as the Company's auditors since such time. Prior thereto the
audit firm of Grant Thornton LLP acted as the Company's auditor and the change
to Holtz Rubenstein Reminick took place effective and was the subject of a filed
8K Report by the Company filed June 14, 2004 which may be reviewed for further
information regarding such change in auditors.
During the Company's two most recent fiscal years, the report of Grant
Thornton LLP and that of Holtz Rubenstein Reminick LLP on the audited financial
statements of the Company did not contain any qualifications and there were no
disagreements with Grant Thornton LLP or Holtz Rubenstein Reminick LLP, on any
matter of accounting principles or practices, financial statements disclosure,
or auditing scope or procedure, which disagreements, if not resolved to the
satisfaction of Grant Thornton LLP and Holtz Rubenstein Reminick LLP would have
caused them to make reference to the subject matter of the disagreements in
their reports for such fiscal years. More specifically such auditors have not
questioned or advised:
(a) that the Company's internal controls necessary for the Company to
develop reliable financial statements do not exist, or
(b) that any information has come to such auditor's attention that has led
it to no longer be able to rely on management's representations or that has made
such auditors unwilling to be associated with the financial statements prepared
by Company's management, or
(c) of the need to expand significantly the scope of its audit, or that
information has come to the auditor's attention that if further investigated
may: (i) materially impact the fairness or reliability of either: a previously
issued audit report or the underlying financial statements; or the financial
statements issued or to be issued covering the fiscal period(s) subsequent to
the date of the most recent financial statements covered by an audit report
(including information that may prevent it from rendering an unqualified audit
report on those financial statements), or (ii) cause it to be unwilling to rely
on management's representations or be associated with the registrant's financial
statements, and due to the auditor's dismissal, or for any other reason, the
auditor did not so expand the scope of its audit or conduct such further
investigation; or
(d) that information has come to the auditor's attention that it has
concluded materially impacts the fairness or reliability of either: (i) a
previously issued audit report or the underlying financial statements, or (ii)
the financial statements issued or to be issued covering the fiscal period(s)
subsequent to the date of the most recent financial statements covered by an
audit report (including information that, unless resolved to the auditor's
satisfaction, would prevent it from rendering an unqualified audit report on
those financial statements), and due to the auditor's dismissal, or for any
other reason, the issue has not been resolved to the auditor's satisfaction
prior to its dismissal.
-12-
During the Company's two most recent fiscal years the Company did not
consult with Holtz Rubenstein Reminick LLP, regarding either (i) the application
of accounting principles to a specific transaction, either completed or
proposed, or the type of audit opinion that might be rendered on the Company's
financial statements by it's auditors that was an important factor considered by
the Company in reaching a decision as to any accounting, auditing or financial
reporting issue; or (ii) any matter that was either the subject of a
disagreement or a reportable event regarding any prior auditors utilized by the
Company,
During fiscal 2003 and 2004, and in connection with the audit of the
Company's fiscal 2003 and 2004 financial statements, Grant Thronton LLP and
Holtz Rubenstein Reminick LLP provided various audit and non-audit services to
the Company as follows:
(a) AUDIT FEES: Aggregate fees billed by the Company's auditors for
professional services rendered for the audit of the Company's fiscal year 2004
annual financial statements and quarterly reviews for 2004 were $127,000, and
for 2003 were $134,000. Fees for 2004 include $38,000 to Grant Thornton in
connection with their review of our form 10-QSB for the quarter ended March 31,
2004 and their services in connection with our form 10-K for the year ended
December 31, 2004
(b) AUDIT RELATED FEES: None. (both years)
(c) TAX RELATED FEES: Aggregate fees billed by the Company's auditors for
fees related to tax filings by the Company in 2004 were $27,000 and in 2003 were
$26,500.
(d) ALL OTHER FEES: NONE
The Audit Committee of the Board has considered whether provision of the
services described in sections (b),(c) and (d) above is compatible with
maintaining the independent accountant's independence and, determined that such
services have not adversely affected the independence of either Grant Thornton
LLP or Holtz Rubenstein Reminick.
A representative of Holtz Rubenstein Reminick LLP will be present at the
meeting and will have an opportunity to make a statement if the representative
desires to do so. Said representative should also be available to respond to
appropriate questions from shareholders of the Company.
RECOMMENDATION AND VOTE
The Company's full Board of Directors and its Audit Committee, recommend
the election of Holtz Rubenstein Reminick LLP to serve as auditors for the
Company for the fiscal year ended December 31, 2005 and until successors are
elected and qualified. The affirmative vote of a majority of the votes
represented by the Company Shares represented at the Meeting where a quorum is
present is required for such approval. Quorum at the Meeting shall require
attendance in person and/or by proxy by at least one-third amount of potential
votes outstanding.
-13-
OTHER BUSINESS
Management knows of no other business, which is to be presented for action
at the meeting. Should any other matters properly come before the meeting, the
persons named in the accompanying proxy will have discretionary authority to
vote all proxies in accordance with their judgment.
It is important that proxies be returned promptly. Therefore, stockholders
who do not expect to attend in person are urged to execute and return the
enclosed proxy to which no postage need be affixed if mailed in the United
States.
EXECUTIVE COMPENSATION
Set forth below are tables showing (i) in summary form, the compensation
paid to Mair Faibish and Mitchell Gerstein, the only executive officers of the
Company for the fiscal year ended December 31, 2004: and (ii) the options and
stock appreciation rights (SARs) granted to such executives in 2004.
SUMMARY COMPENSATION TABLE
annual long term compensation
compensation awards
--------------- -----------------------------------
restricted securities underlying
salary stock bonus stock options
NAME
- ----
Mair Faibish, President and Chief Executive Officer
2004 $227,339.00 0 0
2003 $158,319.00 0 0
2002 $112,579.00 0 0
Mitchell Gerstein, Vice President and Chief Financial Officer
2004 $ 84,600.00 0 0
2003 $ 54,153.00 0 0
2002 $ 52,000.00 0 0
There were no stock options or stock appreciation rights (SARs) given to
any of the officers or directors of the Company. There are no outstanding SARs
held by officers and/or directors of the Company and no stock options held by
officers and/or directors of the Company in fiscal year 2004 have been exercised
during such period. No Long-Term Incentive Plan awards have been granted by the
Company to any of its officers and/or directors in fiscal year 2004. In the
fiscal year 2004 there were no adjustments made to the exercise price of any
outstanding stock options held by officers and/or directors of the Company other
than an adjustment identical to adjustment made in all outstanding Company.
Compensation Committee Interlocks and Insider Participation
All decisions with respect to the stock compensation of the Company's
executive officers and key employees are made by the Executive Compensation
Committee, which is comprised of Mr. Marsicovetere and Mr. Sebastian. Neither
Mr. Marsicovetere nor Mr. Sebastian are officers or employees of the Company nor
were they at any time.
All decisions with respect to the compensation of employees who are not
officers or key employees are made by the Employee Compensation Committee which
is comprised of Frank A. Bellis, Jr., Lloyd Miller and William Rancic.
-14-
AUDIT COMMITTEE REPORT
The Securities and Exchange Commission rules now require the Company to
include in its proxy statement a report from the Audit Committee of the Board.
The following report concerns the Committee's activities regarding oversight of
the Company's financial reporting and auditing process.
The Audit Committee is comprised solely of independent directors, as
defined in the Marketplace Rules of The NASDAQ Stock Market, and it operates
under a written charter adopted by the Board of Directors, a copy of which is
attached to this proxy statement as an Exhibit. The composition of the Audit
Committee, the attributes of its members and the responsibilities of the
Committee, as reflected in its charter, are intended to be in accordance with
applicable requirements for corporate audit committees. The Committee reviews
and assesses the adequacy of its charter on an annual basis.
As described more fully in its charter, the purpose of the Audit Committee
is to assist the Board of Directors in its general oversight of the Company's
financial reporting, internal control and audit functions. Management is
responsible for the preparation, presentation and integrity of the Company's
financial statements, accounting and financial reporting principals, internal
controls and procedures designed to ensure compliance with accounting standards,
applicable laws and regulations. Holtz Rubenstein Reminick LLP, the Company's
independent auditing firm, is responsible for performing an independent audit of
the consolidated financial statements in accordance with generally accepted
auditing standards.
Some of the Audit Committee members may be professional accountants or
auditors, but their functions are not intended to duplicate or to certify the
activities of management and the independent auditor, nor can the Committee
certify that the independent auditor is "independent" under applicable rules.
The Committee serves a board-level oversight role, in which it provides advice,
counsel and direction to management and the auditors on the basis of the
information it receives, discussions with management and the auditors and the
experience of the Committee's members in business, financial and accounting
matters.
Among other matters, the Audit Committee monitors the activities and
performance of the Company's internal and external auditors, including the audit
scope, external audit fees, auditor independence matters and the extent to which
the independent auditor may be retained to perform non-audit services. The Audit
Committee and the Board have ultimate authority and responsibility to select,
evaluate and, when appropriate, replace the Company's independent auditor. The
Audit Committee also reviews the results of the internal and external audit work
with regard to the adequacy and appropriateness of the Company's financial,
accounting and internal controls. Management and independent auditor
presentations to and discussions with the Audit Committee also cover various
topics and events that may have significant financial impact or are the subject
of discussions between management and the independent auditor. In addition, the
Audit Committee generally oversees the Company's internal compliance programs.
The Committee has reviewed and discussed the consolidated financial
statements with management and the independent auditor, management represented
to the Committee that the Company's consolidated financial statements were
prepared in accordance with generally accepted accounting principles, and the
independent auditor represented that its presentations included the matters
required to be discussed with the independent auditor by Statement on Auditing
Standards No. 61, "Communication with Audit Committees" and Statement on
Auditory Standards No. 90 "Audit Committee Communication".
The Company's independent auditor also provided the Committee with the
written disclosures required by Independence Standards Board Standard No.1,
"Independence Discussions with Audit Committees," and the Committee discussed
with the independent auditor that firm's independence.
Following the Committee's discussions with management and the independent
auditor, the Committee recommended that the Board of Directors include the
audited consolidated financial statements in the Company's annual report on Form
10-K for the year ended December 31, 2004.
Audit Committee:
Dominic A Marsicovetere
Frank A. Bellis Jr.
Joel Sebastian
* Notwithstanding anything to the contrary set forth in any of the Company's
filings under the Securities Act of 1933 or the Securities Exchange Act of 1934,
the aforesaid and following reports of the Audit Committee or the Company's
Board of Directors shall not be incorporated by reference into any such filing
and shall not otherwise be deemed filed under either act.
-15-
REPORT OF THE BOARD OF DIRECTORS ON ANNUAL COMPENSATION
ADMINISTRATION OF COMPENSATION PROGRAM
The Executive Compensation Committee will be responsible for establishing
and administering the stock compensation policies applicable to the Company's
executive officers.
Prior to the establishment of the Committee, decisions with respect to the
compensation of the Company's executive officers have been made by the Board of
Directors.
COMPENSATION POLICY
The goals of the Company's executive compensation policy are to (i) attract
and retain qualified executives and (ii) ensure that an appropriate relationship
exists between executive pay and the creation of shareholder value. To achieve
these goals, the Company's executive compensation policy will reward executives
for long term strategic management and the enhancement of stockholder value by
integrating annual base compensation with other forms of incentive compensation
based upon corporate results and individual performance. Measurement of
corporate performance will be primarily based on the level of achievement of
Company goals and upon Company performance levels compared with industry
performance levels.
The Committee will obtain compensation survey data where available for
similar industries to be used as a guide to establish compensation levels to be
competitive with and comparable to other companies in its industry group.
FISCAL 2004 EXECUTIVE COMPENSATION PROGRAM
The Company's fiscal 2004 executive compensation program was comprised
exclusively of base salary and bonuses. During fiscal 2004 Mr. Faibish, and Mr.
Gerstein, the Company's executive officers, did not receive base salary
increases. The decisions not to grant increases were made by the Board of
Directors based on the Company's performance and financial condition. The
compensation program described below will be implemented by the Independent
Compensation Committee on a going forward basis.
BASE SALARY. The Independent Compensation Committee will review and approve
all salary changes and stock grants for executive officers. The Committee will
base its approval of such salary changes on: (i) performance of the executive,
(ii) Company performance, (iii) experience, and (iv) external salary surveys.
ANNUAL INCENTIVE. The Company may use annual performance incentives to
focus management on achieving financial and operating results. The Company may
establish a bonus pool for executive officers for a particular year or years,
from which bonuses will be paid at the discretion of the CEO and President upon
approval of the Committee, except that bonuses awarded to the CEO and President
will be at the discretion of the Committee based on the financial performance of
the Company.
LONG TERM INCENTIVE. The primary purpose of the long-term incentive
compensation plan (the "Plan") is to link management pay with the long term
interests of stockholders. The Independent Compensation Committee will use stock
options to achieve this link. The grant of options at 100 percent for the fair
value assures that the executive officers will receive a benefit only when stock
price increases.
The amount of options granted is based on comparative data on the estimated
value of long term compensation for other industry executives. In determining
annual stock option grants, the Independent Compensation Committee will base its
decision on the individual's performance and potential to improve stockholder
value.
-16-
PRESIDENT and CEO COMPENSATION DURING FISCAL 2003
Mr. Faibish's salary is intended to be competitive with salary arrangements
received by other chief executive officers in the industry. The Committee will
base future bonuses or awards to Mr. Faibish on Company and individual
performance as compared to other promotional wholesale distribution logistics
companies, and the criteria set forth above for executive officers generally.
COMPENSATION OF DIRECTORS
The Company's executive officers do not receive any compensation for their
services as Directors; however, such officers are reimbursed for their
reasonable out-of-pocket expenses in attending any meetings of the Board and/or
its committees. The Company's non-employee Directors, on the other hand, each
receive compensation for their services in the form of a grant of $30,000 in
value of shares of the Company's Common Stock immediately upon their election or
re-election to the Board and an additional $10,000 in stock for those being
members on the Company's Audit Committee. These securities, which are granted
pursuant to the Company's Stock Option Plan for Non-Employee Directors (the
"Option Plan"), are issued at their fair market value.
EMPLOYMENT CONTRACTS
There are no Employment Contracts at present.
CONCLUSION
The Board of Directors and the Independent Compensation Committee believe
that the quality and motivation of management make a significant difference in
the long term performance of the Company. The Board of Directors and the
Committee also believe that a compensation program which rewards performance
that meets or exceeds high standards also benefits the stockholders, so long as
there is an appropriate downside risk element to compensation when performance
falls short of such standards. The Board of Directors and the Committee are of
the opinion that the Company's management compensation program meets these
requirements, has contributed to the Company's success, and is deserving of
stockholder support.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER COMPENSATION PLANS
Following is information as of the end of fiscal year 2004 with respect to
compensation plans (including individual compensation arrangements) under which
equity securities of the Company are authorized for issuance.
The following is a summary of such stock option transactions for the years
ended December 31, 2004 and 2005 in accordance with the Plan and other
restricted stock option agreements:
Weighted-
Number average
of shares exercise price
---------- -------------
Outstanding at January 1, 2002 140,809 $ 32.12
Forfeited (13,175) (34.66)
Granted 356,625 2.81
---------- -------------
Outstanding at December 31, 2002 484,259 10.46
Granted 85,000 3.53
Cancelled/forfeited (25,109) (9.08)
Exercised (62,500) 1.84
---------- -------------
Outstanding at December 31, 2003 481,650 $ 10.42
Exercised (110,000) (3.68)
========== ==========
Outstanding at December 31, 2004 371,650 $ 13.10
========== ==========
Available for grant
December 31, 2004 7,218,967
=========
December 31, 2003 7,261,162
=========
December 31, 2002 7,457,291
=========
-17-
The following table summarizes information concerning currently outstanding
and exercisable stock options:
Options outstanding Options exercisable
-------------------------------------------- --------------------------
Weighted-
Number average Weighted- Number Weighted-
outstanding at remaining average exercisable at average
Ranges of December 31, contractual exercise December 31, exercise
exercise prices 2004 life (years) price 2003 price
------------------- ------------- ------------ ---------- --------------- -------
$ 1.00 - $ 4.00 266,125 .12 $ 3.85 266,125 $ 3.85
18.00 - 20.00 29,000 .35 18.34 29,000 18.34
25.00 - 35.60 36,275 .31 27.36 36,275 27.36
40.00 - 50.00 8,500 .01 42.94 8,500 42.94
60.00 - 70.00 31,750 .38 61.57 31,750 61.57
------------ ----------- --------- -------- ------
371,650 .18 $13.10 371,650 $13.10
============ =========== ========= ======== ======
The Company has also reserved 100,000 shares for a stock option plan
("Option Plan") for non-employee, independent directors, which entitles each
non-employee director to a grant of $30,000 value in shares of the Company's
stock immediately upon election or re-election to the Board of Directors and an
additional $10,000 in stock for those being members on the Company's Audit
Committee. Options granted under the Option Plan will be at the fair market
value on the date of grant. The Company had no options outstanding and
exercisable and 84,000 shares available for grant at December 31, 2004.
-18-
COMPANY STOCK PERFORMANCE
(PLEASE SEE SCHEDULE A)
ANNUAL REPORT
The Annual Report to Shareholders of the Company for the fiscal year ended
December 31, 2003 , which includes audited financial statements, has been
previously mailed to stockholders and the 2004 Annual Report is included as is
being mailed to shareholders herewith. Such reports are incorporated herein by
reference and should be reviewed by the recipient of this Proxy Statement in
conjunction with review of the other information on the Company included
herewith.
FORM 10-K
The Company will provide without charge to each person whose Proxy is being
solicited, a copy (without exhibits) of the Annual Report of the Company on Form
10-K for the fiscal year ended December 31, 2004, as filed with the Securities
and Exchange Commission. Any request therefore should be addressed to the
Company at the address given at the beginning of this report. The Form 10-K of
the Company for 2004 is incorporated herein by reference and should be reviewed
by the recipient of this Proxy Statement in conjunction with review of the other
information on the Company included herein.
STOCKHOLDER PROPOSALS AND COMMUNICATIONS WITH THE BOARD OF DIRECTORS
If any stockholder desires to present a proposal for action at the
Company's annual meeting to be held in 2006, such proposal must be in compliance
with applicable laws and Securities and Exchange Commission regulations and must
be received by the Company on or prior to December 31, 2005.
The Company's Board of Directors has adopted a policy and established
procedures for the Company's shareholders to communicate with members of the
Board of Directors. Shareholders can communicate with any of the Company's
directors, including the Chairperson of any of the committees of the Board of
Directors by writing to a director c/o Synergy Brands Inc., at the Company's
executive offices. Shareholders may communicate their concerns directly to the
entire Board or specifically to management or non-management members of the
Board. Such communications may be confidential or anonymous, if and as so
designated.
-19-
SECTION 16 REQUIREMENTS
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and officers, and persons who own more than 10% of a
registered class of the Company's equity securities, to file initial reports of
ownership and reports of changes in ownership with the Securities and Exchange
Commission ("SEC"). Such persons are required by SEC regulation to furnish the
Company with copies of all Section 16(a) reports they file.
Based solely on its review of the copies of such reports received by it
with respect to fiscal 2003 and 2004 or written representations from certain
reporting persons, the Company believes that all filing requirements applicable
to its directors, officers and persons who own more than 10% of a registered
class of the Company's equity securities have been timely complied with.
OTHER DOCUMENTS NOT A PART OF THIS PROXY STATEMENT
This Proxy Statement is being distributed to stockholders as part of a
larger publication containing other documents and information of interest to
stockholders concerning the Annual Meeting including Appendix, A which contains
the Annual Report to Shareholders, including Management's Discussion and
Analysis and the Consolidated Financial Statements; and Appendix B, which
contains Other Stockholder Information. All of this information not specifically
part of this Proxy Statement, and certain information in this Proxy Statement,
specifically the Audit Committee Report (other than any information contained
therein not permitted to be so excluded), the report on 2004 Executive
Compensation and the Performance Graph shall not be deemed to be "soliciting
material" or to be "filed" with the Securities and Exchange Commission under or
pursuant to the Securities Act of 1933 or the Securities Exchange Act of 1934 as
currently in effect and shall not be deemed to be incorporated by reference into
any filing by the Company under such Acts, unless specifically provided
otherwise in such filing.
By Order of the Board of Directors
Mitchell Gerstein
Secretary
Melville, NY
-20-
SCHEDULE A
COMPANY STOCK PERFORMANCE
COMPARISON OF CUMULATIVE TOTAL RETURN OF ONE OR MORE
COMPANIES, PEER GROUPS, INDUSTRY INDEXES AND/OR BROAD MARKETS
FISCAL YEAR ENDING
COMPANY/INDEX/MARKET 12/31/1999 12/29/2000 12/31/2001 12/31/2002 12/31/2003 12/31/2004
Synergy Brands, Inc. 100.00 20.01 7.28 4.24 6.57 5.64
Food Wholesale 100.00 137.14 137.35 141.36 187.14 200.27
Russell 3000 Index 100.00 91.47 79.91 61.68 79.41 87.41
Customer Selected Stock List 100.00 127.32 146.05 98.78 131.53 143.08
The Customer Selected Stock List is made up of the following securities:
BJ'S WHOLESALE CLUB INC
MCKESSON CORP
SUPERVALU INC
SOURCE: COREDATA, INC.
2108 LABURNUM AVENUE
RICHMOND, VA 23227
PHONE: 1-(800) 775-8118
FAX: 1-(804) 358-1857
The current composition of CoreData Industry Group 757 - Food Wholesale -
is as follows:
AMCON DISTRIBUTING CO
AQUACELL TECHNOLOGIES
ASHLIN DEVELOPMENT CORP
COFFEE PACIFICA INC
DOMINO'S PIZZA INC
G. WILLI-FOOD INTL
INTERNAT FOOD PRODUCTS
JANE BUTEL CORPORATION
NASH-FINCH CO
PERFORMANCE FOOD GROUP
SMART & FINAL INC
SUPERVALU INC
SYNERGY BRANDS INC
SYSCO CORP
UNITED NATURAL FOODS INC
US WIRELESS ONLINE INC
VERMONT PURE HLDNGS NEW
VIROPRO INC
WARNING MGMT SERVICES
WEIDER NUTRITION INTL
(GRAPH ALSO INCLUDED) Graph represents the total return of $100 investment
in the Company relative to sample peer group and a national stock index
-21-
EXHIBIT A
SYNERGY BRANDS INC.
CATEGORICAL STANDARDS OF DIRECTOR INDEPENDENCE
A director who meets all of the following categorical standards shall be
presumed to be "independent" ("Company" shall include all subsidiaries thereof):
* During the past five years the Company has not employed the director, and
has not employed (except in a non-officer capacity) any of his or her
immediate family members.
* During the past five years, the director has not been employed (or
affiliated with) the Company's present or former auditors, nor has any of
his or her immediate family members been so employed or affiliated (except
in a non-officer capacity not involving the Company's business).
* During the past five years, neither the director, nor any of his or her
immediate family members, has been part of an "interlocking directorate" in
which an executive officer of the Company serves on the compensation (or
equivalent) committee of another company that employs the director.
* The director does not (directly or indirectly as a partner, shareholder
or officer of another company) provide consulting, legal or financial
advisory services to the Company or the Company's present or former
auditors.
* The director is not employed by (or affiliated with) a significant
supplier or customer of the Company. For the purposes of this categorical
standard, a supplier or customer shall be considered significant if its
sales to, or purchases from the Company represent more than (i) 1 % of the
sales of the customer or supplier or (ii) 1 % of the Company's revenues.
* During the past five years, the director has not had a personal services
contract with the Company, its chairman, chief executive officer or other
executive officer, or any affiliate of the Company.
* The director is not an employee, officer or director of a foundation,
university or other non-profit organization to which the Company gives
directly, or indirectly through the provision of services, more than
$100,000 per annum or 1% of the total annual donations received (whichever
is less).
*The director does not, either directly or indirectly as a partner,
shareholder or officer of another company own more than 5% of the Company's
common stock (for purposes of being eligible to sit as a member of the
Audit Committee but not necessarily as a Board member).
EX-A1
EXHIBIT B
SYNERGY BRANDS INC.
1175 WALT WHITMAN ROAD
MELVILLE, NY 11747
THE PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Mair Faibish and Mitchell Gerstein, and
each of them, as proxies, each with the power to appoint his substitute, and
hereby authorizes them to represent and vote, as designated herein, all of the
shares of the common stock, par value $.001 per share, of Synergy Brands Inc.
the "Company"), held of record by the undersigned on at the 2004 Annual Meeting
(the "Annual Meeting") of Stockholders of the Company to be held on June 25,
2005, and any adjournment(s) thereof.
THIS PROXY, WHEN PROPERLY EXECUTED AND DATED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR ALL PROPOSALS LISTED IN THE PROXY STATEMENT, AND THE
PROXIES WILL USE THEIR DISCRETION WITH RESPECT TO ANY MATTERS PRESENTED FOR
SHAREHOLDER VOTE AT THE ANNUAL MEETING.
1. PROPOSAL TO ELECT THE FOLLOWING PERSONS TO SERVE AS THE BOARD OF DIRECTORS
FOR SYNERGY BRANDS INC. FOR ONE YEAR FROM THE EFFECTIVE DATE OF THE ANNUAL
MEETING OF SHAREHOLDERS TO WHICH THIS PROXY RELATES OR UNTIL THEIR SUCCESSORS
ARE ELECTED AND QUALIFIED:
MAIR FAIBISH
RANDALL J. PERRY
FRANK A. BELLIS JR.
LLOYD MILLER
JOEL SEBASTIAN
BILL RANCIC
FOR { } AGAINST { } ABSTAIN { }
2. PROPOSAL TO ELECT HOLTZ RUBENSTEIN REMINICK LLP TO SERVE AS THE COMPANY'S
AUDITORS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2005 AND UNTIL THEIR SUCCESSORS
ARE ELECTED AND QUALIFIED.
FOR { } AGAINST { } ABSTAIN { }
3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING AND ANY ADJOURNMENT(S)
THEREOF.
FOR { } AGAINST { } ABSTAIN { }
-EX-B1-
MARK HERE FOR ADDRESS CHANGE AND NOTE BELOW { }
PLEASE EXECUTE THIS PROXY AS YOUR NAME APPEARS HEREON. WHEN SHARES ARE HELD BY
JOINT TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. IF A
CORPORATION, PLEASE SIGN IN FULL CORPORATE NAME BY THE PRESIDENT OR OTHER
AUTHORIZED OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY
AUTHORIZED PERSON.
SIGNATURE: DATE:
SIGNATURE: DATE:
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
-EX-B2-