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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. __)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to ss.240.14a-12
THE FLAMEMASTER CORPORATION
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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):
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[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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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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THE FLAMEMASTER CORPORATION
11120 Sherman Way
Sun Valley, California 91352-4949
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON THURSDAY, JUNE 17, 2004
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of The
Flamemaster Corporation, a Nevada Corporation, (the "Company") will be held at
the Smoke House Restaurant, located at 4420 Lakeside Drive, Burbank, California,
on Thursday, June 17, 2004 at 1:30 P.M., Pacific Time, for the following
purposes, more fully described in the attached Proxy Statement:
1. To elect seven (7) directors of the Company to serve until the
next annual meeting of shareholders or until their successors are
duly elected and qualified; and
2. A proposal to ratify the appointment of Sarna & Company as our
independent auditors for the fiscal year ending September 30,
2004; and
3. To ratify the actions of the Board of Directors for the previous
year ending September 30, 2003; and
4. To transact such other business as may properly be brought before
the Annual Meeting or any and all adjournments thereof.
The Board of Directors has fixed the close of business on May 18, 2004
as the record date for the determination of shareholders entitled to notice of
and to vote at the Annual Meeting. Only shareholders at the close of business on
the record date are entitled to vote at the Annual Meeting.
Accompanying this Notice are a Proxy and Proxy Statement. IF YOU WILL
NOT BE ABLE TO ATTEND THE ANNUAL MEETING TO VOTE IN PERSON, PLEASE COMPLETE,
SIGN AND DATE THE ACCOMPANYING PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED
POSTAGE PAID ENVELOPE. The Proxy may be revoked at any time prior to its
exercise at the Annual Meeting. The Proxy and Proxy Statement are first being
mailed to shareholders on or about May 28, 2004.
By order of the Board of Directors
Mary Kay Eason
Secretary
Sun Valley, California
May 28, 2004
THE FLAMEMASTER CORPORATION
11120 SHERMAN WAY
SUN VALLEY, CALIFORNIA 91352-4949
PROXY STATEMENT
2003 ANNUAL MEETING OF SHAREHOLDERS
The following information is provided in connection with the solicitation of
proxies for the Annual Meeting of Shareholders of The Flamemaster Corporation
(the "Company"), to be held on June 17, 2004, or any adjournments thereof (the
"Meeting"), for the purposes stated in the Notice of Annual Meeting of
Shareholders preceding this Proxy Statement. The Proxy Statement and the Proxy
were first mailed to shareholders on or about May 28, 2004.
SOLICITATION AND RECOVATION OF PROXIES
--------------------------------------
The company is furnishing a form of proxy to each shareholder, and, in each
case, is solicited on behalf of the Board of the Company for use at the Meeting.
The entire cost of soliciting these proxies will be borne by the Company,
including reimbursements of banks, brokerage firms, custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy, material
to the beneficial owners of stock. In addition to the use of mails, proxies may
be solicited by the directors, officers and employees of the Company without
additional compensation, by personal interview, telephone, telegram, fax or
otherwise.
Any valid proxy received in time for voting and not revoked will be voted at the
meeting in accordance with the directions contained therein. Any valid proxy
submitted without directions will be voted as described herein IN FAVOR of the
election of the nominees named herein.
Your execution of the enclosed Proxy will not affect your rights as a
shareholder to attend the meeting and to vote in person. Any shareholder giving
a proxy has a right to revoke it at any time either (a) a later-dated proxy, (b)
written revocation sent to and received by the Secretary of the Company prior to
the Meeting, or (c) attendance at the meeting in person.
VOTING SECURITIES AND RECORD DATE
---------------------------------
The only voting security of the Company is its COMMON stock. Only shareholders
of record at the close of business on May 18, 2004 will be entitled to vote at
the Meeting. As of such date there were outstanding 1,810,257 shares of common
stock, which are entitled to one vote per share. However, the election of
directors will be conducted by cumulative voting. In cumulative voting each
shareholder may cast that number of votes equal to the number of directors to be
elected multiplied by the number of shares held. The shareholder may cast all of
such votes for one nominee or distribute such votes among as many nominees as he
desires. The seven candidates receiving the largest number of votes shall be
elected.
Through his stock ownership along with family and affiliates, Joseph Mazin, our
Chairman of the Board and Chief Executive Officer, controls over 52% of our
total voting power, therefore the Company is not required to have a nominating
committee because it is a "controlled company" (see "Controlled Company
Exemption Election" below). Because of this fact, and because the Board of
Directors believes that it is more appropriate for all of the directors of the
Company to be involved in the process of nominating persons for election as
directors, the Board of Directors does not have a nominating committee. As such,
the Board as a whole performs the functions of a nominating committee and is
responsible for reviewing the requisite skills and characteristics of the
directors of the Company.
The Board of Directors will consider candidates for nomination as a director
recommended by current directors, officers, third-party search firms and other
sources. In evaluating candidates,
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the Board of Directors considers the attributes of the candidate, including but
not limited to their skills, experience, age, legal and regulatory requirements
and the needs of the Board of Directors. The Board of Directors will review all
candidates in the same manner, regardless of the source of the recommendation.
The Board has further determined that no policy with respect to consideration of
candidates recommended by security holders would be appropriate.
GENERAL INFORMATION
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CONTROLLED COMPANY EXEMPTION ELECTION
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The Company has determined that due to the beneficial ownership by Joseph Mazin
and affiliates, of more than 50% of the Common Stock of the Company we are a
"controlled company" as defined in Rule 435(C)(5) of the NASDAQ Marketplace
Rules. Therefore, we are not subject to the requirements of Rule 435(C) that
would otherwise require us to have (i) a majority of independent directors on
the Board; (ii) a compensation committee composed solely of independent
directors; (iii) a nominating committee composed solely of independent
directors; (iv) compensation of our executive officers determined by a majority
of the independent directors or a compensation committee composed solely of
independent directors; and (v) director nominees selected, or recommended for
the Board's selection, either by a majority of the independent directors or a
nominating committee composed solely of independent directors.
CODE OF BUSINESS CONDUCT AND ETHICS
-----------------------------------
The Flamemaster Corporation is dedicated to maintaining the highest standards of
integrity and trust throughout all levels of its organization and between it and
all of its members and shareholders. Our board of directors and executive
officers are committed to upholding sound principles of corporate governance and
meeting all Securities and Exchange Commission and NASDAQ requirements.
The Company has adopted a Code of Business Conduct and Ethics for our officers,
including our principal executive officer, principal financial officer,
principal accounting officers and controller and our employees and directors.
The Code of Business Conduct and Ethics is available upon request by writing to:
The Flamemaster Corporation, Attn: Corporate Secretary, 11120 Sherman Way, Sun
Valley, CA 91352 (818) 982-1650.
DIRECTOR PROFILE
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William Z. Deutsch is a retired businessman and previous owner, partner and
officer of several companies in the Los Angeles area. He is currently engaged as
a private investor in real estate and securities.
Leon Gutowicz is a retired businessman, with investments in real estate and
financial instruments, and active in non-profit charitable organizations. Leon
Gutowicz is the father-in-law of Joseph Mazin.
Joseph Mazin is President and Chief Executive Officer and Chief Financial
Officer of the company since June of 1984.
Donna Mazin is President of Altius Investment and has served as Executive
Administrator and buyer at PerfectData Corporation. Donna Mazin is the wife of
Joseph Mazin.
Joshua M. Mazin has been working for the company since July 2000. He has a BS
degree in Business Management, and is currently working as Assistant
Secretary/Treasurer and Internal Control Manager. He was recently promoted to
Vice President of Administration. Joshua Mazin is the son of Joseph and Donna
Mazin.
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Bishop George Vlahos is Bishop of God's Universal Life Church. He worked as
production coordinator for a successful pizza restaurant chain called Famous Ted
Pizza. He is now a retired businessman.
Stuart Weinstein is Vice President PTL Realty, a real estate holding company.
William Deutsch and Stuart Weinstein comprise the Independent Audit Committee.
Between October 2002 and September 2003, five meetings of the Company's Board of
Directors were held. Directors attended 75% of said meetings. The Company's
Board of Directors does not have standing nominating or compensation committees.
ELECTION OF DIRECTORS
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Seven directors are to be elected at the meeting, each director to hold office
until his successor is elected and qualified. The shares represented by Proxies
on the enclosed form will be voted FOR the election of the seven persons named
below, in the absence of other instruction. However, in the event that any
person other than the nominees named below shall be nominated for election as
director, the persons named in the proxy may vote cumulatively for less than all
the nominees. If any of the persons named below should decline or be unable to
serve, an event, which is not anticipated, the proxy discretionary authority to
cast their votes for such other person or persons as they may determine.
Director of Common Percentage
Company Bennefic- of class
Name Age Occupation Since ally Owned (Common)
---- --- ---------- ----- ---------- --------
William Deutsch 77 Retired Businessman 1998 2,256 .12%
Leon Gutowicz 85 Officer,Director 1984 86,743 4.79%
Charitable
Organization
Joseph Mazin 57 President, CEO, 1982 800,989 (1,2) 44.25%
CFO and Chairman
Donna Mazin 56 President 1993 779,177 (1) 43.04%
Altius Investment
Joshua M. Mazin 25 Vice President 2004 4,115 .23%
Administration
Bishop George Vlahos 63 Retired Businessman 2004 60,750 3.36%
Stuart Weinstein 55 Vice President 1997 19,800 1.09%
PTL Realty
(1) Includes 469,082 shares (inclusive) owned of record by Altius
Investment Corp, and StarBiz Corp., entities of which Mr. Mazin
is a principal and/or has voting control
(2) Includes 21,812 shares owned by the Company's Profit Sharing
Plan. Mr. Mazin is trustee of this plan and has voting control.
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PRINCIPAL SHAREHOLDERS - COMMON
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The following table sets forth information regarding beneficial ownership of the
Company's common stock as of May 20, 2004. To the Company's knowledge, the
individuals or groups shown in the table are the only persons who held more than
5% of the Company's common stock at that date.
Name and address of Amount and nature of Percentage of Class
Beneficial Owner Beneficial Ownership Common
------------------- -------------------- -------------------
Altius Investment 466,416 25.77%
11120 Sherman Way
Sun Valley, CA 91352
Joseph & Donna Mazin 800,989 (a,b) 44.25%
11120 Sherman Way
Sun Valley, CA 91352
Directors and Officers 491,462 27.15%
As a Group (10)
(a) Joseph & Donna Mazin share voting control of the Flamemaster shares
held by Altius Investment and other affiliates.
(b) Includes 490,894 shares (inclusive) owned of record by Altius Invest.
Corp., Flamemaster Profit Sharing Plan, and StarBiz Corporation,
entities of which Mr. Mazin is a principal and/or has voting control.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
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The following table includes information as to all directors and executive
officers of the Company who received more than $100,000 in remuneration during
each of the last three fiscal years.
Name and Principal Fiscal Salary Restricted All other
Position Year $ $ Compensation
------------------ ------ ------ ---------- ------------
Joseph Mazin 2003 187,345 - -
Chairman, President 2002 180,740 - -
And Chief Executive 2001 176,288 - -
REPORT OF AUDIT COMMITTEE
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The role of the Audit Committee is to assist Flamemaster's Board of Directors in
its oversight of Flamemaster's financial reporting process, as is more fully
described in its charter, which the Board has adopted and which is attached as
Appendix A to this Proxy Statement. Flamemaster's management is responsible for
its financial reporting process, including its system of internal controls, and
for the preparation and presentation of its consolidated financial statements in
accordance with internal controls, and for the preparation and presentation of
its consolidated financial statements in accordance with generally accepted
accounting principles. Flamemaster's independent auditors are responsible for
auditing those financial statements and expressing an opinion as to their
conformity with generally accepted accounting principles. Our responsibility is
to monitor and review these processes. It is not our duty or our responsibility
to conduct auditing or accounting reviews or procedures. We are not and may not
be employees of Flamemaster, and we may not represent ourselves to be or to
serve as accountants or auditors by profession or experts in the fields of
accounting or auditing. Therefore, we have relied without independent
verification on representations by Flamemaster's management that its financial
statements have been prepared with integrity and objectivity and in conformity
with accounting
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principles generally accepted in the United States of America. We have also
relied on representations of Flamemaster's independent auditors included in
their report on its financial statements. Our oversight does not provide us with
an independent basis to determine that management has maintained appropriate
accounting and financial reporting principles or policies or appropriate
internal controls and procedures designed to assure compliance with accounting
standards and applicable laws and regulations. Furthermore, our considerations
and discussions with Flamemaster's management and independent auditors do not
assure that Flamemaster's financial statements are presented in accordance with
generally accepted accounting principles, that the audit of Flamemaster's
financial statements has been carried out in accordance with generally accepted
auditing standards or that Flamemaster's independent auditors are in fact
"independent."
Respectfully submitted,
The Flamemaster Corporation
Audit Committee
Stuart Weinstein, (Chairman)
William Z. Deutsch
COMMON STOCK
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The Company's common stock is traded on the NASDAQ Smallcap Market under the
symbol "FAME".
RELATIONSHIP WITH AUDITORS
--------------------------
Beckman Kirkland & Whitney have been engaged as the company's auditors from 1992
through 2003. On May 5, 2004, The Flamemaster Corporation (the "Company")
received notification that the firm of Beckman, Kirkland & Whitney LLP ("BKW")
had resigned as the Company's independent auditors effective immediately. The
decision of BKW to resign as the Company's independent auditors is due to the
fact that the Public Company Accounting Oversight Board has not approved their
application for registration. The Company's Audit Committee and Board of
Directors accepted the resignation of BKW on May 5, 2004.
During the years ended September 30, 2003 and 2002 and the subsequent interim
periods, there were no disagreements between the Company and BKW on any matters
of accounting principles or practices, financial statement disclosure or
auditing scope or procedure, which, if not resolved to the satisfaction of BKW,
would have been referred to in their reports. BKW's report on the Company's
financial statements for the years ended September 30, 2003 and 2002 did not
contain an adverse opinion or a disclaimer of opinion and were not qualified or
modified as to uncertainty, audit scope or accounting principles. In addition,
during the years ended September 30, 2003 and 2002 and the subsequent interim
periods, there were no reportable events (as defined in Item 304(a)(1)(v) of
Securities and Exchange Commission Regulation S-K).
On May 5, 2004, the Company engaged Sarna and Company ("SAC"), based in
Westlake, California to serve as its new auditors. SAC is a registered member of
the Public Company Accounting Oversight Board (PCAOB).
During the year ended September 30, 2003 and the subsequent interim periods, the
Company did not consult with SAC regarding either (i) the application of
accounting principles to a specified transaction or the type of audit opinion
that might be rendered on the Company's financial statements or (ii) any matter
that was either the subject of a disagreement (as defined in Item 304(a)(1)(iv)
of Regulation S-K) or a reportable event (as defined in Item 304 (a)(1)(v) of
Regulation S-K).
The decision to engage SAC was recommended by the Audit Committee and
unanimously approved by the Company's Board of Directors.
Registrant provided a copy of the foregoing disclosure to BKW.
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SHAREHOLDER PROPOSALS FOR ANNUAL MEETING
----------------------------------------
Any shareholder proposal to be considered for presentation at the Company's next
Annual Meeting must be received by the Company at its executive offices on or
before November 10, 2004 for inclusion in the Company's Proxy Statement and Form
of Proxy.
OTHER MATTERS
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The Board does not know of any matters to be presented at the Annual Meeting
other than those discussed herein. If other matters properly come before the
meeting or any adjournment thereof, the persons named in the proxies will vote
them in accordance with their best judgment.
BY ORDER OF THE BOARD OF DIRECTORS
----------------------------------
Mary Kay Eason
--------------
Secretary
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APPENDIX A FLAMEMASTER CORPORATION
CHARTER OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
ORGANIZATION
This Charter governs the operations of the Audit Committee. The Committee shall
review and reassess the Charter at least annually and obtain the approval of the
Board of Directors. The Committee shall be appointed by the Board of Directors
and shall be comprised of at least two directors, each of whom is independent of
management and the Company.
STATEMENT OF POLICY
The Audit Committee shall provide assistance to the Board of Directors in
fulfilling their oversight responsibility to the shareholders, potential
shareholders, the investment community and others relating to the Company's
financial statements and the financial reporting process, the systems of
internal accounting and financial controls, the internal audit function, if any,
the annual independent audit of the Company's financial statements, and the
legal compliance and ethics programs as established by management and the Board.
In so doing, it is the responsibility of the Committee to maintain free and open
communication between the Committee, the independent auditors, the internal
auditors, if any, and management of the Company.
RESPONSIBILITIES AND PROCESSES
The primary responsibility of the Audit Committee is to oversee the Company's
financial reporting process on behalf of the Board and report the results of
their activities to the Board. Management is responsible for preparing the
Company's financial statements, and the independent auditors are responsible for
auditing those financial statements. The Committee, in carrying out its
responsibilities, believes its policies and procedures should remain flexible,
in order to best react to changing conditions and circumstances. The Committee
should take the appropriate actions to set the overall corporate "tone" for
quality financial reporting, sound business risk practices and ethical behavior.
The Audit Committee shall also provide to the Company's independent accountants
copies of the quarterly financial statements for review in accordance with rules
of the Securities and Exchange Commission. The Chairperson of the Committee may
represent the entire Committee for the purposes of this review.
The Audit Committee shall review periodic written reports from the independent
accountants regarding the independent accountants' independence, discuss such
reports with the independent accountants, and, if so determined by the Audit
Committee, recommend that the Board take appropriate action to satisfy itself as
to the independence of the independent accountants.
The Audit Committee shall review major changes to the Company's auditing and
accounting principles and practices as suggested by the independent accountants
or management and evaluate together with the Board the performance of the
independent accountants. If so determined by the Audit Committee, it shall
recommend that the Board replace the independent accountants. The Audit
Committee shall prepare such reports as may be required by the rules of the
Securities and Exchange Commission to be included in the Company's Annual Proxy
Statement.
This Charter is intended to be flexible so that the Audit Committee is able to
meet changing conditions. The Audit Committee is authorized to take such further
actions as are consistent with the above-described responsibilities and to
perform such other actions as applicable law, the Company's charter documents
and/or the Board may require. To that end, the Audit Committee shall review and
reassess the adequacy of this Charter annually. Any proposed changes shall be
put before the Board for its approval.
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ANNUAL MEETING OF SHAREHOLDERS
THE FLAMEMASTER CORPORATION
The undersigned hereby appoints Joseph Mazin, with the power to appoint his
substitute, as Proxy, with the powers the undersigned would possess if
personally present, to vote, as designated below, all stock of the undersigned
in The Flamemaster Corporation at the Annual Meeting of Shareholders on June 17,
2004, or any adjournments thereof.
1. ELECTION OF DIRECTORS
_____ FOR all nominees listed below (except as marked to the contrary
below).
_____ WITHHOLD AUTHORITY to vote for all nominees listed below.
William Deutsch, Leon Gutowicz, Joseph Mazin, Donna Mazin, Joshua Mazin,
George Vlahos, Stuart Weinstein.
(To withhold authority to vote for an individual write that nominee's
name on space provided below).
______________________________________________________
THIS PROXY WILL BE VOTED FOR ALL NOMINEES LISTED ABOVE
UNLESS OTHERWISE SPECIFIED.
PROPOSAL(S) FOR AGAINST ABSTAIN
----------- --- ------- -------
2. The appointment of Sarna & Company as ___ ___ ___
our independent auditors for the
fiscal year ending September 30, 2004;
3. Ratify the actions of the Board of ___ ___ ___
Directors for the previous year ending
September 30, 2003;
4. Such other business as may properly
come before said meeting or any
adjournments thereof.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THIS PROXY OF THE
FLAMEMASTER CORPORATION DATED MAY 18, 2004.
Date: __________________________2004
____________________________________
(Signature)
____________________________________
(Signature, if jointly held)
Please sign exactly as name appears
at left. If stock is jointly held
each owner should sign. Executors
Administrators,Trustees, Guardians
And Corporate Officers should
indicate their Fiduciary capacity of
full title when signing.
Please mark, sign, date and return
this proxy Card promptly, using the
enclosed envelope.