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
Registrant
x
Filed
by
a Party other than the Registrant
o
Check
the
appropriate box:
o
|
Preliminary
Proxy Statement
|
o
|
Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
|
x
|
Definitive
Proxy Statement
|
o
|
Definitive
Additional Materials
|
o
|
Soliciting
Material Pursuant to §240.14a-12
|
Stamford
Industrial 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):
o
|
Fee
computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
|
|
1)
|
Title
of each class of securities to which transaction
applies:
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2)
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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):
|
|
4)
|
Proposed
maximum aggregate value of
transaction:
|
o
|
Fee
paid previously with preliminary
materials:
|
o
|
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.
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1)
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Amount
Previously Paid:
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2)
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Form,
Schedule or Registration Statement
No.:
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STAMFORD
INDUSTRIAL GROUP, INC.
One
Landmark Square
Stamford,
Connecticut 06901
April
30,
2008
To
Our
Stockholders:
On
behalf
of the Board of Directors of Stamford Industrial Group, Inc., I cordially invite
you to attend the Annual Meeting of Stockholders to be held on Monday, June
2,
2008, at 10:00 a.m
.
,
Eastern
Daylight Time, at our principal executive offices located at One Landmark
Square, 21st
Floor,
Stamford, Connecticut 06901. The accompanying Notice of Meeting and Proxy
Statement cover the details of the matters to be presented.
A
copy of
the 2007 Annual Report is included in this mailing.
REGARDLESS
OF WHETHER YOU PLAN TO ATTEND THE ANNUAL MEETING, I URGE YOU TO VOTE AS SOON
AS
POSSIBLE BY COMPLETING AND RETURNING YOUR PROXY CARD, OR BY FOLLOWING THE
INSTRUCTIONS ON THE ENCLOSED PROXY CARD TO VOTE BY TELEPHONE OR VIA THE
INTERNET. YOUR VOTE IS IMPORTANT AND WILL BE GREATLY APPRECIATED. RETURNING
YOUR
PROXY CARD WILL ENSURE THAT YOUR VOTE IS COUNTED IF YOU LATER DECIDE NOT TO
ATTEND THE ANNUAL MEETING.
|
Cordially,
STAMFORD
INDUSTRIAL GROUP, INC.
Al
Weggeman
President
and Chief Executive Officer
|
STAMFORD
INDUSTRIAL GROUP, INC.
Notice
Of Annual Meeting Of Stockholders
To
Be Held June 2, 2008
To
Our
Stockholders:
You
are
cordially invited to attend the Annual Meeting of Stockholders, and any
adjournments or postponements thereof (the “Meeting”), of Stamford Industrial
Group, Inc., which will be held on Monday, June 2, 2008, at 10:00 a.m, Eastern
Daylight Time, at our principal executive offices located at One Landmark
Square, 21
st
Floor,
Stamford, Connecticut 06901, for the following purposes:
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1.
|
To
elect three members to serve on the Board of Directors until the
next
Annual Meeting of Stockholders and until their successors are duly
elected
and qualified (Proposal 1);
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2.
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To
approve an amendment to our Amended and Restated Certificate of
Incorporation to effect a reverse stock split of our common stock,
at an
exchange ratio ranging from one-to-two to one-to-five in the discretion
of
the Board of Directors (Proposal 2);
and
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3.
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To
transact such other business as may properly come before the Meeting
or
any postponements or adjournments thereof, including the consideration
of
any procedural matters incident to the conduct of the Meeting, such
as the
postponement of the Meeting in order to solicit additional proxies
to vote
in favor of the matters presented at the Meeting.
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Stockholders
of record at the close of business on April 21, 2008 are entitled to notice
of
and to vote at the meeting.
YOUR
VOTE
IS IMPORTANT. PLEASE SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN IT
PROMPTLY IN THE ENCLOSED RETURN ENVELOPE, OR FOLLOW THE INSTRUCTIONS ON THE
ENCLOSED PROXY CARD TO VOTE BY TELEPHONE OR VIA THE INTERNET. WHETHER OR NOT
YOU
EXPECT TO ATTEND THE ANNUAL MEETING. RETURNING YOUR PROXY CARD, OR VOTING BY
TELEPHONE OR VIA THE INTERNET WILL ENSURE THAT YOUR VOTE IS COUNTED IF YOU
LATER
DECIDE NOT TO ATTEND THE ANNUAL MEETING.
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By
order of the Board of Directors
Jonathan
LaBarre
Secretary
|
April
30,
2008
STAMFORD
INDUSTRIAL GROUP, INC.
One
Landmark Square
Stamford,
Connecticut 06901
PROXY
STATEMENT
ANNUAL
MEETING OF STOCKHOLDERS
TO
BE HELD ON
June
2, 2008
INTRODUCTION
Proxy
Solicitation and General Information
This
Proxy Statement and the enclosed form of proxy card (the “Proxy Card”) are being
furnished to the holders of common stock, par value $.0001 per share, of
Stamford Industrial Group, Inc., a Delaware corporation (which is sometimes
referred to in this Proxy Statement as “Stamford Industrial Group,” the
“Company,” “we,” “our” or “us”) in connection with the solicitation of proxies
by our Board of Directors for use at the Annual Meeting of Stockholders to
be
held on Monday, June 2, 2008, at 10:00 a.m., Eastern Daylight Time, at our
principal executive offices located at One Landmark Square, 21st Floor,
Stamford, Connecticut 06901, and at any adjournments or postponements thereof
(the “Meeting”). This Proxy Statement and the Proxy Card are first being sent to
stockholders on or about April 30, 2008.
At
the
Meeting, stockholders will be asked:
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1.
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To
elect three members to serve on the Board of Directors until the
next
Annual Meeting of Stockholders and until their successors are duly
elected
and qualified (Proposal 1);
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2.
|
To
approve an amendment to our Amended and Restated Certificate of
Incorporation to effect a reverse stock split of our common stock,
at an
exchange ratio ranging from one-to-two to one-to-five in the discretion
of
the Board of Directors (Proposal 2);
and
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|
3.
|
To
transact such other business as may properly come before the Meeting
or
any postponements or adjournments thereof, including the consideration
of
any procedural matters incident to the conduct of the Meeting, such
as the
postponement of the Meeting in order to solicit additional proxies
to vote
in favor of the matters presented at the Meeting.
|
The
Board
of Directors has fixed the close of business on April 21, 2008 as the record
date for the determination of stockholders entitled to notice of and to vote
at
the Meeting. Each such stockholder will be entitled to one vote for each share
of common stock held on all matters to come before the meeting and may vote
in
person or by proxy authorized in writing. Stockholders are requested to
complete, sign, date and promptly return the enclosed Proxy Card in the enclosed
envelope, or follow the instructions on the enclosed Proxy Card to vote by
telephone or via the Internet. Proxy Cards which are not revoked will be voted
at the meeting in accordance with instructions contained therein. If the Proxy
Card is signed and returned without instructions, the shares will be voted
FOR
the
election of each nominee for director named in this Proxy Statement (Proposal
1), and
FOR
the
approval of the proposal to amend the Company’s Amended and Restated Certificate
of Incorporation to effect a reverse stock split of our common stock (Proposal
Two).
A
stockholder who so desires may revoke a proxy previously submitted by him at
any
time before it is voted at the meeting by: (i) delivering written notice to
us
at Stamford Industrial Group, Inc., One Landmark Square, 21st
Floor,
Stamford, Connecticut 06901 c/o Jonathan LaBarre, Secretary; (ii) duly executing
and delivering a proxy bearing a later date including a proxy given by telephone
or via the Internet; or (iii) casting a ballot at the Meeting. Attendance at
the
Meeting will not in and of itself constitute a revocation of a proxy.
A
stockholder may designate a person or persons other than those persons
designated on the Proxy Card to act as the stockholder's proxy. The stockholder
may use the Proxy Card to give another person authority by striking out the
names appearing on the Proxy Card, inserting the name(s) of another person(s)
and delivering the signed card to such person(s). The person(s) designated
by
the stockholder must present the signed Proxy Card at the Meeting in order
for
the shares to be voted.
Where
the
stockholder is not the record holder, such as where the shares are held through
a broker, nominee, fiduciary or other custodian, the stockholder must provide
voting instructions to the record holder of the shares in accordance with the
record holder's requirements in order to ensure that the shares are properly
voted.
The
Board
of Directors knows of no other matters that are to be brought before the meeting
other than as set forth in the Notice of Meeting. If any other matters properly
come before the Meeting, the persons named in the enclosed Proxy Card or their
substitutes will vote in accordance with their best judgment on such matters.
Record
Date; Shares Outstanding And Entitled To Vote; Quorum
Only
stockholders as of the close of business on April 21, 2008 (the “Record Date”)
are entitled to notice of and to vote at the Meeting. As of April 21, 2008,
there were 41,801,380 shares of our common stock outstanding and entitled to
vote, with each share entitled to one vote. See “Beneficial Ownership of Company
Common Stock By Directors, Officers And Principal Stockholders” for information
regarding the beneficial ownership of our common stock by our directors,
executive officers and stockholders known to us to own or control 5% or more
of
our common stock. The presence at the Annual Meeting, in person or by duly
authorized proxy of the holders of a majority of the shares of common stock
entitled to vote, constitute a quorum for this Meeting.
Our
common stock is quoted on the OTC Pink Sheets Electronic Quotation Service
under
the symbol “STMF.PK”. As of the Record Date, the reported closing price for the
common stock as quoted on the OTC Pink Sheets Electronic Quotation Service
was
$1.20. Stockholders are urged to obtain the current market quotation for the
shares of our common stock.
Required
Votes
The
presence at the Meeting, in person or by duly authorized proxy, of the holders
of a majority of the outstanding shares of stock entitled to vote constitutes
a
quorum for the transaction of business. Each share of Stamford Industrial
Group’s common stock entitles the holder to one vote on each matter presented
for stockholder action. The affirmative vote of a plurality of the votes cast
in
person or by proxy is necessary for the election of directors (Proposal 1).
The
affirmative vote of at least seventy-five percent (75%) of the outstanding
shares of the Company’s common stock entitled to notice of and to vote at the
Meeting is necessary for the approval of the proposal to amend the Company’s
Amended and Restated Certificate of Incorporation to effect a reverse stock
split of our common stock (Proposal 2). An inspector of elections appointed
by
us will tabulate votes at the Meeting.
All
votes
will be tabulated by the inspector of election appointed for the Meeting, who
will separately tabulate affirmative and negative votes, abstentions and broker
non-votes. Brokers who hold shares in street name for clients typically have
the
authority to vote on ‘‘routine’’ proposals when they have not received
instructions from beneficial owners. However, absent specific instructions
from
the beneficial owner of the shares, brokers are not allowed to exercise their
voting discretion with respect to the adoption of non-routine matters. Proxies
submitted without a vote by the brokers on non-routine matters are referred
to
as broker non-votes.
Abstentions
and broker non−votes are counted as present and are, therefore, included for
purposes of determining whether a quorum of shares is present at the Meeting.
Broker non−votes, and shares as to which proxy authority has been withheld with
respect to any matter, are not deemed to be entitled to vote for purposes of
determining whether stockholders’ approval of that matter has been obtained. As
a result, broker non-votes will have no effect on the outcome of Proposal 1
or
Proposal 2. Abstentions, however, are included in determining the number of
shares voted on the proposals submitted to stockholders and will have the same
effect as a “no” vote on Proposal 2.
Accordingly,
our Board of Directors urges you to complete, sign, date and return the enclosed
Proxy Card in the accompanying self-addressed postage prepaid envelope as soon
as possible or follow the instructions on the enclosed proxy card to vote by
telephone or via the Internet.
Proxies
Our
Board
of Directors has selected Warren B. Kanders and Albert W. Weggeman, and each
of
them, to serve as “Proxyholders” for the Meeting. If a stockholder properly
signs and returns the enclosed form of proxy, the Proxyholders will vote the
shares represented by such proxy at the Meeting in accordance with the
instructions the stockholder writes on the proxy. If the proxy does not specify
how the shares are to be voted, the proxy will be voted
FOR
the
approval of Proposal 1 and
FOR
the approval of Proposal 2
described in the accompanying Notice of Meeting of Stockholders and this Proxy
Statement.
A
stockholder who so desires may revoke a proxy previously submitted by him at
any
time before it is voted at the Meeting by: (i) delivering written notice to
us
at Stamford Industrial Group, Inc., One Landmark Square, 21st Floor, Stamford,
Connecticut 06901 c/o Jonathan LaBarre, Chief Financial Officer, Treasurer
and
Secretary; (ii) duly executing and delivering a proxy bearing a later date,
including a proxy given by telephone or via the Internet; or (iii) casting
a
ballot at the Meeting. Attendance at the Meeting will not in and of itself
constitute a revocation of a proxy.
We
do not
know of other matters to be presented for consideration at the Meeting. However,
if any other matters properly come before the Meeting, it is the intention
of
the persons named in the enclosed form of proxy to vote the shares they
represent as the Board of Directors may recommend. Discretionary authority
with
respect to such other matters is granted by the execution of the enclosed Proxy
Card or submission of a proxy by telephone or via the Internet.
Proxy
Solicitation; Expenses
Stamford
Industrial Group will bear the entire cost of solicitation of proxies, including
preparation, assembly, printing and mailing of this proxy statement, the proxy
card and any additional information furnished to stockholders. We have retained
D.F. King & Co., Inc. to assist in the solicitation of proxies for a fee of
$8,000, plus reimbursement of expenses. Copies of solicitation materials will
be
furnished to banks, brokerage houses, fiduciaries and custodians holding in
their names shares of common stock beneficially owned by others to forward
to
the beneficial owners. We may reimburse persons representing beneficial owners
of our common stock for their costs of forwarding solicitation materials to
the
beneficial owners. Original solicitation of proxies by mail may be supplemented
by telephone, telegram or other electronic means, or by personal solicitation
by
our directors, officers or other regular employees or by representatives of
D.F.
King & Co., Inc. No additional compensation will be paid to our directors,
officers or other regular employees for their services in connection with the
solicitation of proxies.
List
of Stockholders
In
accordance with Delaware General Corporation Law (the “DGCL”), a list of
Stockholders entitled to vote at the Meeting will be available for ten days
prior to the Meeting, for any purpose germane to the Meeting, between the hours
of 10:00 a.m. and 5:00 p.m., local time, at our offices at One Landmark Square,
21st Floor, Stamford, Connecticut 06901.
Voting
Confidentiality
Proxies,
ballots, and voting tabulations are handled on a confidential basis to protect
your voting privacy. This information will not be disclosed to unrelated third
parties except as required by law.
IT
IS DESIRABLE THAT AS LARGE A PROPORTION AS POSSIBLE OF THE STOCKHOLDERS’
INTERESTS BE REPRESENTED AT THE MEETING. THEREFORE, EVEN IF YOU INTEND TO BE
PRESENT AT THE MEETING, PLEASE SIGN AND RETURN THE ENCLOSED PROXY CARD OR VOTE
BY TELEPHONE OR VIA INTERNET TO ENSURE THAT YOUR STOCK WILL BE REPRESENTED.
IF
YOU ARE PRESENT AT THE MEETING AND DESIRE TO DO SO, YOU MAY WITHDRAW YOUR PROXY
AND VOTE IN PERSON BY GIVING WRITTEN NOTICE TO THE SECRETARY OF THE COMPANY.
AS
PROMPTLY AS POSSIBLE, PLEASE RETURN YOUR EXECUTED PROXY CARD OR VOTE BY
TELEPHONE OR VIA THE INTERNET.
BENEFICIAL
OWNERSHIP OF COMPANY COMMON STOCK B
Y
DIRECTORS,
OFFICERS AND PRINCIPAL STOCKHOLDER
S
The
following table sets forth as of April 21, 2008 certain information regarding
the beneficial ownership of the common stock outstanding by (i) each person
known to us to own or control 5% or more of our common stock, (ii) each of
our
directors and nominees, (iii) each of our “Named Executive Officers” (as defined
in Item 402(a)(3) of Regulation S-K), set forth in the summary compensation
table on page 22, and (iv) our Named Executive Officers, directors and nominees
as a group. Unless otherwise indicated, each of the stockholders shown in the
table below has sole voting and investment power with respect to the shares
beneficially owned. Unless otherwise indicated, the address of each person
named
in the table below is c/o Stamford Industrial Group, Inc., One Landmark Square,
21st Floor, Stamford, Connecticut 06901.
Name
|
|
Common
Stock Beneficially
Owned
(1)
|
|
|
|
Percentage
of Common Stock
(2)
|
|
|
|
|
|
|
|
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Warren
B. Kanders and Kanders & Company, Inc.
|
|
|
13,943,381
|
|
|
(3)
|
|
|
32.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
White
Rock Capital Management, L.P.
3131
Turtle Creek Boulevard, Suite 800
Dallas,
Texas 75219
|
|
|
4,323,000
|
|
|
(4)
|
|
|
10.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
CRC
Acquisition Co., LLC
One
Landmark Square
Stamford
CT 06901
|
|
|
3,529,412
|
|
|
(5)
|
|
|
8.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Austin
W. Marxe and David M. Greenhouse
537
Madison Ave., Suite 2600
New
York, NY 10022
|
|
|
1,345,057
|
|
|
(6)
|
|
|
3.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Nicholas
Sokolow
|
|
|
831,276
|
|
|
(7)
|
|
|
2.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Albert
W. Weggeman
|
|
|
692,060
|
|
|
(8)
|
|
|
1.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Paul
Vesey
|
|
|
158,824
|
|
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
David
A. Jones
|
|
|
150,000
|
|
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
Jonathan
LaBarre
|
|
|
41,666
|
|
|
(9)
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
All
directors, nominees for directors and named executive officers
as a group
(6 persons)
|
|
|
15,817,207
|
|
|
(10)
|
|
|
37.2
|
%
|
*
Less
than one percent
|
(1)
|
As
used in this table, a beneficial owner of a security includes any
person
who, directly or indirectly, through contract, arrangement, understanding,
relationship or otherwise has or shares within 60 days of April 21,
2008:
(a) the power to vote, or direct the voting of, such security or
(b)
investment power which includes the power to dispose, or to direct
the
disposition of, such security.
|
|
(2)
|
Percentage
of beneficial ownership is based on 41,801,380 shares of common stock
outstanding as of April 21, 2008.
|
|
(3)
|
Includes
5,628,300 shares of common stock issuable upon conversion of the
2%
ten-year Convertible Subordinated Note due April 21, 2014 (the “Note”)
issued by the Company to Olden Acquisition LLC (“Olden”) on April 21,
2004. The sole member of Olden is Kanders & Company, Inc. (“Kanders
& Co.”), of which Warren B. Kanders is the sole shareholder and the
President. Mr. Kanders disclaims beneficial ownership of the Note
and the
shares of common stock into which it is convertible. Also includes
a stock
grant of (i) 8,274,000 shares of common stock pursuant to the terms
of the
Equity Compensation Agreement dated September 22, 2006 by and between
the
Company and Kanders & Co.; and (ii) 41,081 shares of common stock
pursuant to the terms of the consulting agreement, dated September
22,
2006 by and between the Company and Kanders & Co. Mr. Kanders
disclaims beneficial ownership of the shares of common stock granted
pursuant to these agreements.
|
|
(4)
|
Based
on a Schedule 13G/A filed by White Rock Capital Management, L.P.,
and
certain of its affiliates, on January 29,
2008.
|
|
(5)
|
Based
on a Schedule 13D filed by CRC Acquisition Co. LLC, and certain of
their
affiliates, on October 11, 2006.
|
|
(6)
|
Based
on a Schedule 13G/A filed by Austin W. Marxe and David M. Greenhouse,
and
certain of their affiliates, on March 9,
2007.
|
|
(7)
|
Includes
681,276 shares of common stock held by Comadets, LLC of which Mr.
Sokolow
is the Managing Member. Mr. Sokolow disclaims beneficial ownership
of the
shares of common stock held by Comadets, LLC.
|
|
(8)
|
Includes
Mr. Weggeman’s options to purchase 692,060 shares of common stock that are
presently exercisable or exercisable within 60 days of April 21,
2008.
Excludes (i) options to purchase 692,060 shares of common stock that
are
presently unexercisable and unexercisable within 60 days of April
21,
2008; (ii) 56,818 unvested shares of restricted common stock; (iii)
$1,000,000 of restricted common stock issuable upon the Company achieving
"Adjusted EBITDA" as defined in its 2007 Stock Incentive Plan, of
at least
$25,000,000 in a fiscal year of the Company; (iv) $1,000,000 of restricted
common stock which shall be granted upon the Company achieving annual
Adjusted EBITDA of at least $50,000,000 in a fiscal year of the Company;
and (v) $1,000,000 of restricted common stock which shall be granted
upon
the Company achieving annual Adjusted EBITDA of at least $75,000,000
in a
fiscal year of the Company.
|
|
(9)
|
Includes
Mr. LaBarre’s options to purchase 41,666 shares of common stock that are
presently exercisable or exercisable within 60 days of April 21,
2008.
Excludes options to purchase 208,334 shares of common stock that
are
presently unexercisable and unexercisable within 60 days of April
21,
2008.
|
|
(10)
|
See
footnotes (3) and (7) through (9).
|
We
are
not aware of any material proceedings to which any of our directors, nominees
for director, executive officers, affiliates of the foregoing persons or any
security holder, including any owner of record or beneficially of more than
5%
of any class of our voting securities, is a party adverse to us or has a
material interest adverse to us.
PROPOSAL
1
ELECTION
OF DIRECTORS
Our
Amended and Restated Certificate of Incorporation and Amended and Restated
Bylaws (the “Bylaws”) provide that the number of directors shall be fixed from
time to time by a majority of the Board of Directors. Currently, the number
of
directors has been fixed at four directors. We currently have one vacant
seat on
our Board. We do not intend to fill the vacant seat on our Board at
this time.
Our
directors are elected annually at the Annual Meeting of Stockholders. Their
respective terms of office continue until the next Annual Meeting of
Stockholders and until their successors have been elected and qualified in
accordance with our Bylaws. There are no family relationships among any of
our
directors or executive officers.
Unless
otherwise specified, each proxy received will be voted for the election of
the
three nominees for director named below to serve until the next Annual Meeting
of Stockholders and until their successors shall have been duly elected and
qualified. Each of the nominees has consented to be named a nominee in this
Proxy Statement and to serve as a director if elected. Should any nominee
become
unable or unwilling to accept a nomination for election, the persons named
in
the enclosed Proxy Card will vote for the election of a nominee designated
by
the Board of Directors or will vote for such lesser number of directors as
may
be prescribed by the Board of Directors in accordance with our Bylaws.
The
age
and principal occupation for the past five years of each person nominated
as a
director is set forth below:
Warren
B. Kanders
,
50, has
served as Non-Executive Chairman of our Board of Directors since October
3, 2006
and Executive Chairman of our Board of Directors from April 2004 to October
3,
2006. Since May 2007, Mr. Kanders has served as a director of
Highlands Acquisition Corp., a publicly-held blank check company formed with
a
focus on acquiring a business in the healthcare industry. Since August 2007,
Mr.
Kanders has served as the Chairman of the Board and Chief Executive Officer
of
Kanders Acquisition Company, Inc., a blank check company formed with a focus
on
acquiring a business in no particular industry or geography. Mr. Kanders
has served as the President of Kanders & Company since 1990. Prior to the
completion of the acquisition of Armor Holdings, Inc., formerly a New York
Stock
Exchange-listed company and a manufacturer and supplier of military vehicles,
armed vehicles and safety and survivability products and systems to the
aerospace & defense, public safety, homeland security and commercial
markets, by BAE Systems plc on July 31, 2007, he served as the
Chairman of the Board of Armor Holdings, Inc. since January 1996 and as its
Chief Executive Officer since April 2003. Mr. Kanders has served as a
member of the Board of Directors of Clarus Corporation since June 2002 and
as
the Executive Chairman of Clarus Corporation’s Board of Directors since December
2002. Since November 2004, Mr. Kanders has served as the Chairman of
the Board of Directors of Langer, Inc., a Nasdaq-listed provider of orthotic
and
skin-care products. From October 1992 to May 1996, Mr. Kanders
served as Founder and Vice Chairman of the Board of Benson Eyecare Corporation,
a distributor of eye care products and services.
Nicholas
Sokolow
,
58, has
served as one of our directors since April 2004. Mr. Sokolow has also served
as
a member of the Board of Directors of Clarus Corporation since June 2002.
Prior
to the completion of the acquisition of Armor Holdings, Inc., by BAE Systems
plc
on July 31, 2007, Mr. Sokolow served as a member of the Board of
Directors of Armor Holdings, Inc. since January 1996. Since 2007 Mr. Sokolow
has
been practicing in the law firm of Lebow & Sokolow LLP. From 1994 to
2007, Mr. Sokolow was a partner in the law firm of Sokolow, Carreras &
Partners. From June 1973 until October 1994, Mr. Sokolow was an associate
and
partner in the law firm of Coudert Brothers.
David
A. Jones
,
57, has
served as one of our directors since June 2004. Mr. Jones has over 30 years
experience as a senior executive with expertise in private wealth management
and
securities trading. Since January 2004, Mr. Jones has been the President
of D.A.
Jones LLC, where he serves as a professional trustee and independent advisor
of
high net worth individuals and families. From August 1994 until December
2003,
Mr. Jones served as a managing director and the senior client executive at
Deutsche Bank Private Wealth Management (formerly Bankers Trust). Since 1982,
Mr. Jones has served on the board of trustees of The Jewish Home & Hospital
Lifecare System in New York and served as its chairman from 1997 until 2001.
The
affirmative vote of a plurality of the votes cast in person or by proxy at
the
Meeting is necessary for the election of directors (assuming a quorum of
a
majority of the outstanding shares of common stock is present).
THE
BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR EACH OF THE ABOVE-NAMED DIRECTOR
NOMINEES.
GOVERNANCE
OF THE COMPANY
Corporate
Governance
Our
Board
of Directors is committed to sound and effective corporate governance practices.
The Company’s management and our Board of Directors reviewed our corporate
governance practices in light of the Sarbanes-Oxley Act of 2002. Based on
that
review, the Board of Directors maintains codes of ethics and conduct, corporate
governance guidelines, committee charters, complaint procedures for accounting
and auditing matters and an Audit Committee pre-approval policy. Although
the
Company is not listed on the NASDAQ Global Stock Market (the
“NASDAQ
”
),
it has modeled
its corporate governance practices after the listing requirements of the
NASDAQ.
Corporate
Governance Guidelines and Documents
The
Code
of Ethics for Senior Executive and Financial Officers, the Code of Business
Conduct and Ethics for Directors, Officers and Employees, Complaint Procedures
for Accounting and Auditing Matters, the Corporate Governance Guidelines,
the
Audit Committee Pre-Approval Policy, and the Charters of our Audit, Compensation
and Nominating/Corporate Governance Committees were adopted by Stamford
Industrial Group for the purpose of promoting honest and ethical conduct,
promoting full, fair, accurate, timely and understandable disclosure in periodic
reports required to be filed by Stamford Industrial Group, and promoting
compliance with all applicable rules and regulations that apply to Stamford
Industrial Group and its officers and directors. Our Codes of Ethics and
Conduct, the Complaint Procedures for Accounting and Auditing Matters, the
Corporate Governance Guidelines, and the Charters of our Audit, Compensation
and
Nominating/Corporate Governance Committees are available at www.stamfordig.com,
our Internet website, at the tab “Corporate Governance”. In addition, you may
request a copy of any such materials, without charge, by submitting a written
request to: Stamford Industrial Group, Inc., c/o the Secretary, One Landmark
Square, 21st Floor, Stamford, Connecticut 06901.
Board
of Directors
Our
Board
of Directors is currently comprised of the following three members: Warren
B.
Kanders, Nicholas Sokolow, and David A. Jones. During fiscal 2007, the Board
of
Directors held seven meetings and has standing Audit, Compensation and
Nominating/Corporate Governance Committees. During fiscal 2007, all of the
directors then in office attended at least 100% of the total number of meetings
of the Board of Directors and the Committees of the Board of Directors on
which
they served. All of the members of our Board of Directors, who was also a
director at the time, attended last year’s Annual Meeting of Stockholders
meeting which was held on June 21, 2007.
Director
Independence
The
Board
of Directors has evaluated each of its directors’ independence from Stamford
Industrial Group based on the definition of “independence” established by the
NASDAQ. Based on the Board’s review and the NASDAQ definition of “independence”,
the Board has determined that the Board is currently comprised of a majority
of
independent directors, consisting of each of the following directors: Messrs.
Sokolow and Jones. The Board has also determined that each of the members
of our
Audit Committee is “independent” for purposes of Section 10A(m)(3) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Stockholder
Communications
Stockholders
may send communications to the Board, or any committee thereof, by writing
to
the Board of Directors or any committee thereof at Stamford Industrial Group,
Inc., c/o the Secretary, One Landmark Square, 21st Floor, Stamford, Connecticut
06901. The Secretary will distribute all stockholder communications to the
intended recipients and/or distribute to the entire Board, as appropriate.
In
addition, stockholders may also contact the non-management directors as a
group
or any individual director by writing to the non-management directors or
the
individual director, as applicable, at Stamford Industrial Group, Inc., One
Landmark Square, 21st Floor, Stamford, Connecticut 06901.
Complaints
Procedures
Complaints
and concerns about accounting, internal accounting controls or auditing or
related matters pertaining to the Company may be submitted by writing to
the
Chairman of the Audit Committee as follows: Stamford Industrial Group, Inc.,
c/o
Chairman of the Audit Committee, One Landmark Square, 21st Floor, Stamford,
Connecticut 06901. Complaints may be submitted on a confidential and anonymous
basis by sending them in a sealed envelope marked “Confidential.” In addition,
the Company has retained the services of an outside, independent firm to
administer a 24-hour hotline (888-883-1499), available every day of the year,
that will provide for the anonymous reporting of any complaints and concerns
regarding accounting, internal accounting controls, auditing and other related
matters pertaining to the Company.
Audit
Committee
The
Audit
Committee is responsible for the oversight and evaluation of (i) the
qualifications, independence and performance of our independent auditors;
(ii)
the performance of our internal audit function; and (iii) the quality and
integrity of our financial statements and the effectiveness of our internal
control over financial reporting. In addition, the committee recommends to
the
Board of Directors the appointment of independent auditors and analyzes the
reports and recommendations of such auditors. The committee also prepares
the
Audit Committee report required by the rules of Securities and Exchange
Commission, and the report is included in this proxy statement beginning
on page
15.
Our
Audit
Committee is currently comprised of Messrs. Sokolow and Jones, with Mr. Sokolow
serving as the Chairman, both of whom were determined by the Board to be
independent of Stamford Industrial Group based on the NASDAQ’s definition of
“independence”. Our Board of Directors currently does not have an audit
committee financial expert (as such term is defined under the Sarbanes-Oxley
Act
of 2002 and the rules and regulations promulgated thereunder) serving on
its
Audit Committee. However, the Board of Directors is looking for and considering
candidates to appoint to the Board of Directors and the Audit Committee who
will
serve on the Audit Committee as an audit committee financial expert. The
Audit
Committee met eight times during fiscal 2007. The Board of Directors has
adopted
a written Charter for the Audit Committee, a copy of which was attached to
our
Proxy Statement for the Annual Meeting of Stockholders held on June 23, 2004
and
is available at
www.stamfordig.com
,
our
Internet website, at the tab “Corporate Governance”.
Compensation
Committee
The
Compensation Committee reviews recommendations for executive compensation,
including incentive compensation and stock incentive plans and makes
recommendations to the Board of Directors concerning levels of compensation
of
our executive officers and other key managerial personnel as well as the
adoption of incentive and stock plans. Pursuant to this Committee’s charter (a
copy of which is available at
www.stamfordig.com
,
our
Internet website, at the tab “Corporate Governance”), this Committee’s authority
generally includes the authority to do each of the following:
|
·
|
To
assist the Board of Directors in developing and evaluating potential
candidates for executive positions, including the Chief Executive
Officer,
and to oversee the development of executive succession plans.
|
|
·
|
To
review and approve corporate goals and objectives with respect
to
compensation for the Company’s Chief Executive Officer, evaluate the Chief
Executive Officer’s performance in light of those goals and objectives,
and, either as a committee or together with the other independent
directors, determine and approve the Chief Executive Officer’s
compensation level based on this evaluation. In determining the
long-term
incentive component of the Chief Executive Officer’s compensation, the
Committee shall consider the Company’s performance and relative
stockholder return, the value of similar incentive awards to chief
executive officers at comparable companies, and the awards given
to the
Company’s Chief Executive Officer in past
years.
|
|
·
|
To
make recommendations to the Board of Directors with respect to
Non-Chief-Executive Officer compensation, incentive-compensation
plans and
equity-based plans. The Committee shall also provide oversight
of
management’s decisions concerning the performance and compensation of
other Company officers.
|
|
·
|
To
review the Company's incentive compensation and other stock-based
plans
and recommend changes in such plans to the Board of Directors as
needed.
The Committee shall have and shall exercise all the authority of
the Board
of Directors with respect to the administration of such plans.
|
|
·
|
To
produce the compensation committee report on executive compensation
to be
included in the Company’s proxy
statement.
|
|
·
|
To
review on an annual basis director compensation and benefits.
|
The
Compensation Committee shall have authority to retain such compensation
consultants, outside counsel and other advisors as the Compensation Committee
may deem appropriate in its sole discretion. Our Compensation Committee is
currently comprised of Messrs. Sokolow and Jones, both of whom were determined
by the Board to be independent of Stamford Industrial Group. The Compensation
Committee does not formally meet on a regular basis, but only as circumstances
require. The Compensation Committee met two times during fiscal 2007, and
also
held numerous discussions during fiscal 2007.
Nominating/Corporate
Governance Committee
The
purpose of the Nominating/Corporate Governance Committee is to identify,
evaluate and nominate candidates for election to the Board of Directors as
well
as review Stamford Industrial Group’s corporate governance guidelines and other
related documents for compliance with applicable laws and regulations such
as
the Sarbanes-Oxley Act of 2002 and the NASDAQ’s listing requirements. The
Nominating/Corporate Governance Committee will consider nominees recommended
by
stockholders. Information with respect to a proposed nominee should be provided
in writing to Stamford Industrial Group, Inc., c/o the Secretary at One Landmark
Square, 21st Floor, Stamford, Connecticut 06901, who will submit them to
the
committee for its consideration. Such information shall include the name
of the
nominee, and such information with respect to the nominee as would be required
under the rules and regulations of the Securities and Exchange Commission
to be
included in our Proxy Statement if such proposed nominee were to be included
therein. In addition, the stockholder shall include a statement to the effect
that the proposed nominee has no direct or indirect business conflict of
interest with us, and otherwise meets our standards set forth below. See
“Requirements For Submission Of Stockholder Proposals, Nomination Of Directors
And Other Business Of Stockholders” for additional information on certain
procedures that a stockholder must follow to nominate persons for election
as
directors. Our Nominating/Corporate Governance Committee is currently comprised
of Messrs. Sokolow and Jones, with Mr. Sokolow serving as the Chairman, each
of
whom was determined by the Board to be independent from Stamford Industrial
Group. A copy of the Nominating/Corporate Governance Committee’s Charter is
available at
www.stamfordig.com
,
our
Internet website, at the tab “Corporate Governance”.
The
Company believes that candidates for the Board of Directors should possess
fundamental qualities of intelligence, honesty, good judgment and high ethics;
have no conflict of interest or legal impediment which would interfere with
the
duty of loyalty owed to Stamford Industrial Group and its stockholders; and
have
the ability and willingness to spend the time required to function effectively
as a director of Stamford Industrial Group. The Nominating/Corporate Governance
Committee may engage third-party search firms from time to time to assist
it in
identifying and evaluating nominees for director. The Nominating/Corporate
Governance Committee evaluates nominees recommended by stockholders, by other
individuals and by the search firms and reviews biographical information
furnished by or about the potential nominees to determine whether they have
the
experience and qualities discussed above.
Discussion
of Director Compensation
We
do not
provide our directors with cash compensation for their services as members
of
the Board of Directors, although directors are reimbursed for expenses in
connection with attendance at Board and committee meetings. Directors are
eligible to participate in our 2007 Stock Incentive Plan and from time to
time,
may receive discretionary option or stock grants under our 2007 Stock Incentive
Plan. In 2007, none of our directors received any option or stock grants
for
service on the Board. It is noted that our Non-Executive Chairman devotes
only
as much of his time as is necessary to the affairs of the Company and also
serves in various capacities with other public and private entities, including
blank check companies and not-for-profit entities affiliated with Kanders
&
Company. Although Mr. Kanders does not receive any compensation in his
individual capacity as a director or our Non-Executive Chairman, compensation
is
payable to Kanders & Company pursuant to the terms of the consulting
agreement (the “Consulting Agreement”) discussed under the heading “Certain
Relationships and Related Transactions” in this Proxy
Statement
.
Involvement
in Certain Legal Proceedings
No
director, executive officer, or person nominated to become a director or
executive officer has, within the last five years: (i) had a bankruptcy petition
filed by or against, or a receiver, fiscal agent or similar officer appointed
by
a court for, any property or any business of such person or entity with respect
to which such person was a general partner or executive officer either at
the
time of the bankruptcy or within two years prior to that time; (ii) been
convicted in a criminal proceeding or is currently subject to a pending criminal
proceeding (excluding traffic violations and other minor offenses); (iii)
been
subject to any order, judgment or decree, not subsequently reversed, suspended
or vacated, of any court of competent jurisdiction, permanently or temporarily
enjoining, barring, suspending or otherwise limiting his involvement in any
type
of business, securities or banking activities or practice; (iv) been found
by a
court of competent jurisdiction (in a civil action), the Securities and Exchange
Commission or the Commodity Futures Trading Commission to have violated a
federal or state securities or commodities law, and the judgment has not
been
subsequently reversed, suspended or vacated.
REPORT
OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The
Board
of Directors has appointed an Audit Committee consisting of two directors.
Each
of the members of the Audit Committee is independent from Stamford Industrial
Group and is financially literate as that qualification is interpreted by
the
Board of Directors. The Board of Directors has adopted a written charter
with
respect to the Audit Committee’s roles and responsibilities.
Management
is responsible for Stamford Industrial Group’s internal controls and the
financial reporting process. The external auditor is responsible for performing
an independent audit of Stamford Industrial Group’s consolidated financial
statements in accordance with generally accepted auditing standards and to
issue
a report thereon. The Audit Committee’s responsibility is to monitor and oversee
these processes.
The
Audit
Committee has had various discussions with management and the independent
auditors. Management represented to us that Stamford Industrial Group’s
consolidated financial statements were prepared in accordance with generally
accepted accounting principles applied on a consistent basis, and we have
reviewed and discussed the quarterly and annual earnings press releases and
consolidated financial statements with management and the independent auditors.
The Audit Committee has also discussed with the independent auditors the
matters
required to be discussed by Statement on Auditing Standards No. 61
(Communication With Audit Committees), as amended, and Rule 2-07 (Communication
With Audit Committees) of Regulation S-X.
The
Audit
Committee has received the written disclosures from the independent auditors
required by Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees), and has discussed with the independent
auditors their independence from Stamford Industrial Group and its management.
The Audit Committee also considered whether the independent auditors’ provision
of audit and non-audit services to Stamford Industrial Group is compatible
with
maintaining the independent auditors’ independence.
The
Audit
Committee discussed with the independent auditors the overall scope and plans
for its audit. The Audit Committee discussed with the independent auditors,
with
and without management present, the results of its examinations, the evaluations
of Stamford Industrial Group’s internal controls, and the overall quality and
integrity of financial reporting.
Based
on
the reviews and discussions referred to above, the Audit Committee recommended
to the Board of Directors, and the Board of Directors has approved, that
the
audited financial statements be included in Stamford Industrial Group’s Annual
Report on Form 10-K for the year ended December 31, 2007 for filing with
the
Securities and Exchange Commission.
Submitted
by the Audit Committee of the Board of Directors:
Nicholas
Sokolow (Chairman)
David
A.
Jones
PRINCIPAL
ACCOUNTANT FEES AND SERVICES
Aggregate
fees for professional services rendered for Stamford Industrial Group by
(i)
PricewaterhouseCoopers LLP for the fiscal years ended December 31, 2007 and
2006
and (ii) McGladrey & Pullen, LLP for the fiscal year ended December 31,
2007, were:
|
|
McGladrey
& Pullen, LLP
|
|
PricewaterhouseCoopers
LLP
|
|
|
|
Fiscal
2007 Fees
|
|
Fiscal
2006 Fees
|
|
Fiscal
2007 Fees
|
|
Fiscal
2006 Fees
|
|
Audit
Fees
|
|
$
|
547,327
|
|
$
|
416,549
|
|
$
|
—
|
|
$
|
55,741
|
|
Audit-Related
Fees
|
|
|
—
|
|
|
163,121
|
|
|
—
|
|
|
26,877
|
|
Tax
Fees
|
|
|
50,000
|
|
|
44,010
|
|
|
—
|
|
|
13,450
|
|
All
Other Fees
|
|
|
17,500
|
|
|
—
|
|
|
41,968
|
|
|
—
|
|
Total
Fees
|
|
$
|
614,827
|
|
$
|
623,680
|
|
$
|
41,968
|
|
$
|
96,068
|
|
Audit
Fees
The
Audit
Fees for the years ended December 31, 2007 and 2006, respectively, were for
professional services rendered for the audit of our consolidated financial
statements for the fiscal years ended December 31, 2007 and 2006, as applicable,
and for the review of our consolidated financial statements included in our
quarterly reports on Form 10-Q for fiscal 2007 and 2006, as applicable.
Audit
Related Fees
The
Audit
Related Fees as of the fiscal year ended December 31, 2006, were related
to the
audit of Concord Steel's financial statements for fiscal years 2005, 2004,
and
2003. Concord Steel was acquired by Stamford Industrial Group on October
3,
2006.
Tax
Fees
Tax
Fees
as of the fiscal years ended December 31, 2007 and 2006, respectively, were
for
services related to tax compliance, including the preparation of tax returns
and
claims for refund, tax planning and advice, including assistance with tax
services for net operating loss and sales tax matters and requests for rulings
or technical advice from tax authorities.
All
Other Fees
The
All
Other Fees as of the fiscal year ended December 31, 2007 were related to
consulting on other accounting matters. There were no fees incurred for All
Other Fees for the fiscal year ended December 31, 2006.
Auditor
Independence
The
Audit
Committee has considered the non-audit services provided by McGladrey &
Pullen, LLP and PricewaterhouseCoopers LLP and determined that the provision
of
such services had no effect on McGladrey & Pullen, LLP’s and
PricewaterhouseCoopers LLP’s independence from Stamford Industrial Group.
AUDIT
COMMITTEE PRE-APPROVAL POLICY AND PROCEDURES
The
Audit
Committee must review and pre-approve all audit and non-audit services provided
by our independent registered public accountants, and has adopted a Pre-approval
Policy. In conducting reviews of audit and non-audit services, the Audit
Committee will determine whether the provision of such services would impair the
auditor’s independence. The term of any pre-approval is 12 months from the date
of pre-approval, unless the Audit Committee specifically provides for a
different period. Any proposed services exceeding pre-approved fee ranges
or
limits must be specifically pre-approved by the Audit Committee.
Requests
or applications to provide services that require pre-approval by the Audit
Committee must be accompanied by a statement of the independent auditors
as to
whether, in the auditor’s view, the request or application is consistent with
the Securities and Exchange Commission’s rules on auditor independence. Each
pre-approval request or application must also be accompanied by documentation
regarding the specific services to be provided.
Since
the
adoption of the Pre-approval Policy by the Audit Committee in April 2004,
the
Audit Committee has not waived the pre-approval requirement for any services
rendered by our independent registered public accountants.
Appointment
of Independent Registered Public Accounting Firm
Effective
October 11, 2006, the Audit Committee of the Company dismissed
PricewaterhouseCoopers LLP, our independent certified public accountant since
fiscal year 1996, and appointed McGladrey & Pullen, LLP as its independent
auditors. This change was the result of an extensive search made at the request
of the Audit Committee to review the services and costs associated with the
external audit function.
PricewaterhouseCoopers
LLP’s report on the Company’s financial statements for the past two years did
not contain an adverse opinion, disclaimer of opinion, or qualification or
modification as to uncertainty, audit scope, or accounting principles.
During
the two most recent fiscal years and the interim period preceding October
11,
2006, there have been no disagreements with PricewaterhouseCoopers LLP on
any
matters of accounting principles or practices, financial statement disclosure,
or auditing scope or procedure which, if not resolved to the satisfaction
of
PricewaterhouseCoopers LLP, would have caused it to make reference to the
subject matter of the disagreement in connection with its report.
The
Company (or someone on its behalf) has not consulted McGladrey & Pullen, LLP
during the two most recent fiscal years and the subsequent interim period
preceding September 30, 2006 regarding 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.
Our
Board
of Directors has selected McGladrey & Pullen, LLP to audit our financial
statements for fiscal year 2008. We are not asking stockholders to ratify
the
appointment of McGladrey & Pullen, LLP as our independent accountants to
audit our financial statements for fiscal year 2008. Ratification of the
independent accountant is not required by our Bylaws, our Charter of the
Audit
Committee or applicable law.
Representatives
of McGladrey & Pullen, LLP are expected to be present at the Meeting. They
will have the opportunity to make a statement, if they so desire, and to
respond
to appropriate questions from stockholders.
EXECUTIVE
OFFICERS
The
following table sets forth the name, age and position of each of our current
Named Executive Officers as of the date hereof. Our Named Executive Officers
are
appointed by and serve at the discretion of the Board of Directors of Stamford
Industrial Group.
Name
|
Age
|
|
Position
|
|
|
|
|
Albert
Weggeman
|
44
|
|
President
and Chief Executive Officer
|
|
|
|
|
Jonathan
LaBarre
|
38
|
|
Chief
Financial Officer, Secretary and Treasurer
|
|
|
|
|
Paul
Vesey
|
52
|
|
President
and General Manager of Concord Steel
|
Albert
W. Weggeman
,
44, has
served as President and Chief Executive Officer since October 3, 2006. From
2005
until 2006, he served as Interim President and Chief Operating Officer of
Tyden
Group, Inc. a global manufacturer of cargo security and product identification
and traceability technology. From 2001 until 2005, Mr. Weggeman was Chief
Operating Officer for Key Components LLC, a company specializing in the design
and manufacture of engineered components for a broad range of OEM applications
and customers. From 1999 until 2001, Mr. Weggeman was President of a General
Electric Company subsidiary focused on the manufacture and sale of outdoor
electrical products. Mr. Weggeman also served in various leadership roles
in
M&A, Marketing, Operations and Strategic Planning functions for
multinational manufacturing companies. Mr. Weggeman graduated with an Electrical
Engineering degree from Northeastern University in 1988 and an MBA from Kellogg
Graduate School of Management in Chicago in 1992. He is also a graduate of
General Electric Company’s Manufacturing Management Program.
Jonathan
LaBarre
,
38, has
served as Chief Financial Officer, Secretary and Treasurer since December
1,
2006. Mr. LaBarre previously worked for Terex Corporation, a diversified
global
manufacturer, where he served as Senior Finance Manager, Corporate Finance
since
February 2002. From April 1999 until January 2002, Mr. LaBarre served in
various
finance leadership roles for Pratt & Whitney’s International Product Center,
Division of United Technologies Corporation, a producer of aerospace, elevators
and air conditioning products. Prior to that, from October 1997 until March
1999, Mr. LaBarre held various accounting and finance positions with The
Stanley
Works, an S&P 500 company. Mr. LaBarre graduated with a B.S. in Accounting
from the Central Connecticut State University in 1994 and received a M.B.A.
from
Western New England College in 2000. Mr. LaBarre is a certified public
accountant.
Paul
Vesey
,
52, has
served as the President of Concord since October 3, 2006 and previously served
as Concord’s Vice President from 1991 to 2006. Since 1980, Mr. Vesey has been
employed by Concord in a variety of positions including Plant and General
Manager with responsibilities that have included product development, sales
and
marketing.
EXECUTIVE
COMPENSATION
Compensation
Discussion and Analysis
Overview
The
Compensation Committee of the Board of Directors (the “Compensation Committee”)
assists the Board in establishing compensation packages for Stamford Industrial
Group’s executive officers and non-employee directors and administering Stamford
Industrial Group’s incentive plans. The Compensation Committee is generally
responsible for setting and administering the policies which govern annual
executive salaries, raises and bonuses and certain awards of stock options
and
common stock, and, where applicable, compliance with the requirements of
Section
162(m) of the Internal Revenue Code of 1986, as amended (the “IRC”) and such
responsibility is generally limited to the actions taken by the Compensation
Committee, although at times the full Board has determined annual executive
salaries, raises and, where the Company has determined that compliance with
the
provisions of Section 162(m) is not required, bonuses as well as grants of
stock
options and common stock without having first received recommendations from
the
Compensation Committee. From time to time, the Compensation Committee reviews
our compensation packages to ensure that they remain competitive with the
compensation packages offered by similarly-situated companies and continue
to
incentivize management and align management’s interests with those of our
stockholders.
The
Compensation Committee is comprised of two directors, each of whom has
considerable experience in executive compensation issues Each member of the
Compensation Committee meets the independence requirements specified by the
NASDAQ and by Section 162(m) of the Internal Revenue Code of 1986, as amended
(the “IRC”).
Executive
Compensation Philosophy
The
general philosophy of our executive compensation program is to attract and
retain talented management while ensuring that our executive officers are
compensated in a way that advances the interests of our stockholders. In
pursuing these objectives, the Compensation Committee believes that it is
critical that a substantial portion of each executive officer’s compensation be
contingent upon our overall performance including the growth of the Company.
The
Compensation Committee is also guided by the principle that our compensation
packages must be competitive, must support our overall strategy and objectives,
and must provide significant rewards for outstanding financial performance
while
establishing clear consequences for underperformance. Annual bonuses and
long-term awards for our executive officers should take into account not
only
objective financial goals, but also individual performance goals that reinforce
our core values, which include leadership, accountability, ethics and corporate
governance. It is the Compensation Committee’s responsibility to determine the
performance goals for the performance-based compensation payable identified
on
the summary compensation table on page 22 in compliance with Section 162(m)
of the IRC, subject to ratification by the Board, and to certify compliance
with
such goals before such compensation is paid. Subject to this limitation,
the
Compensation Committee may also make recommendations to the Board with respect
to non-Chief Executive Officer compensation and, either alone or with the
other
independent members of our Board, to determine and approve our Chief Executive
Officer’s compensation.
In
determining the compensation packages for our executive officers, non-employee
directors and Non-Executive Chairman of the Board of Directors, the Compensation
Committee and the Board of Directors have evaluated the history and performance
of Stamford Industrial Group, previous compensation practices and packages
awarded to Stamford Industrial Group's executive officers and non-employee
directors, and compensation policies and packages awarded to executive officers
and non-employee directors at similarly-situated companies.
Use
of Outside Consultants
The
Compensation Committee has the authority to retain and terminate any independent
compensation consultant and to obtain independent advice and assistance from
internal and external legal, accounting and other advisors.
Compensation
Program Components
Our
executive compensation program emphasizes company performance, individual
performance and an increase in stockholder value over time in determining
executive pay levels. Our executive compensation program consists of three
key
elements: (i) annual base salaries; (ii) a performance-based annual bonus;
and
(iii) periodic grants of stock options and restricted stock. The Compensation
Committee believes that this three-part approach best serves our and our
stockholders’ interests by motivating executive officers to improve our
financial position, holding executives accountable for the performance of
the
organizations for which they are responsible and by attracting key executives
into our service. Under our compensation program, annual compensation for
executive officers are composed of a significant portion of pay that is “at
risk” - specifically, the annual bonus, stock options and restricted stock.
Annual
Cash Compensation
Base
Salary
.
In
reviewing and approving the base salaries of our executive officers, the
Compensation Committee considers the scope of work and responsibilities,
and
other individual-specific factors; the recommendation of the Chief Executive
Officer and (except in the case of his own compensation); compensation for
similar positions at similarly-situated companies; and the executive's
experience. Except where an existing agreement establishes an executive’s
salary, the Compensation Committee reviews executive officer salaries annually
at the end of the fiscal year and establishes the base salaries for the upcoming
fiscal year. In 2007, the salaries for the Company’s Named Executive Officers
were established pursuant to their respective employment agreements.
Performance-Based
Annual Bonus
.
With
regard to Section 162(m) of the IRC, the Compensation Committee establishes
under its 2007 Annual Incentive Plan, the performance goals and then certifies
the satisfaction of such performance goals prior to the payment of the
performance-based bonus compensation. In reviewing and approving the annual
performance-based bonus for our executive officers, the Compensation Committee
may also consider an executive’s contribution to the overall performance of
Stamford Industrial Group as well as annual bonuses awarded to persons holding
similar positions at similarly-situated companies.
In
addition, cash bonuses may be awarded in the discretion of the Board, the
Compensation Committee and the executive management of the Company.
In
2007
cash bonuses were awarded to Mr. LaBarre and Mr. Vesey in the amount of $50,000
and $80,000 respectively, and a restricted stock award was granted to Mr.
Weggeman valued at $75,000. In granting the 2007 bonus awards to the Named
Executive Officers, the Compensation Committee noted the individual
contributions of the executives
in
2007,
including a substantial increase in revenue, the successful ramp-up of the
Company’s Essington, Pennsylvania facility, the implementation of a new IT
platform and the integration of Concord Steel since its acquisition in October
2006.
Equity-Based
Compensation.
Executive
officers of Stamford Industrial Group and other key employees who contribute
to
the growth, development and financial success of Stamford Industrial Group
are
eligible to be awarded stock options to purchase our common stock, shares
of
restricted common stock, and bonuses of shares of common stock under our
equity
incentive plans. Awards under this plan help relate a significant portion
of an
employee’s long-term remuneration directly to stock price appreciation realized
by all our stockholders and aligns an employee’s interests with that of our
stockholders. The Compensation Committee believes equity-based incentive
compensation aligns executive and stockholder interests because (i) the use
of a
multi-year lock-up or vesting schedule for equity awards encourages executive
retention and emphasizes long-term growth, and (ii) paying a significant
portion
of management’s compensation in our equity provides management with a powerful
incentive to increase stockholder value over the long term.
There
is
no relationship between the timing of our equity award grants and our release
of
material, non-public information. Awards are generally granted at previously
scheduled meetings of the Board and Compensation Committee and as required
by
our 2007 Stock Incentive Plan, options and stock awards are granted with
an
exercise price and valued equal to the fair market value of the Company’s common
stock which is the closing price on the date of grant such awards.
Other
than the restricted stock bonus award granted to Mr. Weggeman in lieu of
a cash
bonus as discussed above, no new equity-based compensation awards were granted
to our Named Executive Officers in 2007 as compensation. However, in 2007,
the
Company did cancel equity-based compensation awards previously granted to
each
of Mr. Weggeman and Mr. LaBarre pursuant to their respective employment
agreements and granted comparable awards under the 2007 Stock Incentive Plan
to
replace such cancelled awards. The Compensation Committee recommended the
cancellation of the old awards and the granting of the new awards primarily
to
provide that the new awards are granted under the Company’s 2007 Stock Incentive
Plan as well as to provide that the performance vesting aspect of such awards
are based upon the achievement of “Adjusted EBITDA” (as defined in the 2007
Stock Incentive Plan) and stock price targets. A more detailed discussion
of
these modified equity-based compensation awards is discussed under the heading
“Employment Agreements”.
Perquisites
and Other Personal and Additional Benefits
Executive
officers participate in other employee benefit plans generally available
to all
employees on the same terms as similarly situated employees.
The
Company maintains a qualified 401(k) plan that provides for a Company
contribution based on a matching schedule of a maximum of 20% up to the
applicable IRS limits.
The
Company also provides Named Executive Officers with perquisites and other
personal benefits that the Company and the Compensation Committee believe
are
reasonable and consistent with its overall compensation program to better
enable
the Company to attract and retain superior employees for key positions. The
Compensation Committee periodically reviews the levels of perquisites and
other
personal benefits provided to Named Executive Officers.
The
costs
to the Company associated with providing these benefits for executive officers
named in the Summary Compensation Table are reflected in the “All Other
Compensation” column of the Summary Compensation Table.
Accounting
and Tax Considerations
Section
162(m) of the IRC generally disallows a tax deduction to public corporations
for
compensation other than performance-based compensation over $1,000,000 paid
for
any fiscal year to an individual who, on the last day of the taxable year,
was
(i) the chief executive officer or (ii) among the four other highest compensated
executive officers whose compensation is required to be reported in the Summary
Compensation Table contained herein. Compensation programs generally will
qualify as performance-based if (1) compensation is based on pre-established
objective performance targets, (2) the programs’ material features have been
approved by stockholders, and (3) there is no discretion to increase payments
after the performance targets have been established for the performance period.
The Compensation Committee desires to maximize deductibility of compensation
under Section 162(m) of the IRC to the extent practicable while maintaining
a
competitive, performance-based compensation program. However, the Compensation
Committee also believes that it must reserve the right to award compensation
which it deems to be in our best interest and our stockholders but which
may not
be tax deductible under Section 162(m) of the IRC.
Post-Employment
and Other Events
Provisions
contained within our employment agreements with our Named Executive Officers
provide that termination, retirement, death, disability and change-in-control
events may trigger the payment of certain compensation to the Named Executive
Officers that is not available to all salaried members of the Company.
Generally, our equity compensation agreements provide that equity awards
that
are subject to time vesting will vest in full upon a change in control and
equity awards that vest upon the achievement of stock price or performance
targets will not accelerate upon a change in control except at the discretion
of
the Compensation Committee or the Board. A more detailed discussion of these
changes in control arrangements is discussed under the headings “Employment
Agreements” and “Potential Payments Upon Termination or Change in Control.”
Role
of Executive Officers in Compensation Decisions
The
Compensation Committee determines the total compensation of our Chief Executive
Officer and oversees the design and administration of compensation and benefit
plans for all of the Company’s employees. Certain executive officers, including
the Chief Executive Officer and Chief Financial Officer may attend a portion
of
most regularly scheduled Compensation Committee meetings, excluding executive
sessions. The Compensation Committee also obtains input from our legal, finance
and tax functions, as appropriate.
Summary
The
Compensation Committee believes that the total Named Executive Officer
compensation package has been designed to motivate key management to improve
the
operations and financial performance of the Company, thereby increasing the
market value of our common stock over the long term. The tables in this
Executive Compensation section reflect the compensation structure established
by
the Compensation Committee.
Compensation
Committee Report
The
Company’s Compensation Committee of the Board has submitted the following report
for inclusion in this Proxy Statement:
Our
Compensation Committee has reviewed and discussed the Compensation Discussion
and Analysis contained in this Proxy Statement with management. Based on
our
Compensation Committee’s review of and the discussions with management with
respect to the Compensation Discussion and Analysis, our Compensation Committee
recommended to the Board of Directors that the Compensation Discussion and
Analysis be included in this Proxy Statement for filing with the Securities
and
Exchange Commission.
MEMBERS
OF THE COMPENSATION COMMITTEE
Nicholas
Sokolow (Chairman)
David
A.
Jones
Summary
Compensation Table
The
following summary compensation table sets forth information concerning
the
annual and long-term compensation earned for the periods presented below
by our
Named Executive Officers and persons as to whom disclosure is required
under the
applicable rules of the Securities and Exchange Commission.
SUMMARY
COMPENSATION TABLE
Name
and Principal Position
(a)
|
|
Year
(b)
|
|
Salary
(1)
($)
(c)
|
|
Bonus
($)
(d)
|
|
|
|
Stock
Awards
(2)
($)
(e)
|
|
|
|
Option
Awards
(2)
($)
(f)
|
|
|
|
Non-Equity
Incentive Plan Compensation ($)
(g)
|
|
Change
in Pension Value and Nonqualified Deferred Compensation
Earnings
(h)
|
|
|
|
All
Other Compensation ($)
(i)
|
|
|
|
Total
($)
(j)
|
|
Albert
W. Weggeman
|
|
|
2006
|
|
|
75,000
|
|
|
75,000
|
|
|
|
|
|
—
|
|
|
|
|
|
1,594,508
|
|
|
|
|
|
—
|
|
|
—
|
|
|
|
|
|
39,383
|
|
|
|
|
|
1,783,891
|
|
President
and CEO
|
|
|
2007
|
|
|
300,000
|
|
|
—
|
|
|
|
|
|
75,000
|
(3)
|
|
|
|
|
3,114,274
|
(4)
|
|
|
|
|
—
|
|
|
294,835
|
(5)
|
|
|
|
|
19,179
|
(6)
|
|
|
|
|
3,803,288
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jonathan
LaBarre
|
|
|
2006
|
|
|
17,083
|
|
|
51,833
|
|
|
|
|
|
—
|
|
|
|
|
|
640,000
|
|
|
|
|
|
—
|
|
|
—
|
|
|
|
|
|
1,750
|
|
|
|
|
|
710,666
|
|
CFO,
Secretary, and Treasurer
|
|
|
2007
|
|
|
205,000
|
|
|
50,000
|
(7)
|
|
|
|
|
—
|
|
|
|
|
|
312,500
|
(8)
|
|
|
|
|
—
|
|
|
—
|
|
|
|
|
|
18,384
|
(9)
|
|
|
|
|
585,884
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paul
Vesey
|
|
|
2006
|
|
|
53,090
|
|
|
125,000
|
|
|
|
|
|
285,833
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
—
|
|
|
|
|
|
107,787
|
|
|
|
|
|
571,710
|
|
President
of Concord Steel
|
|
|
2007
|
|
|
180,000
|
|
|
80,000
|
(7)
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
—
|
|
|
|
|
|
24,885
|
(10)
|
|
|
|
|
284,885
|
|
|
(1)
|
Base
salary payable pursuant to the terms of the Named Executive Officers’
respective employment agreements which are discussed under the
heading
“Employment Agreements” in this Proxy
Statement.
|
|
(2)
|
The
amounts in the ‘‘Stock Awards’’ and ‘‘Option Awards’’ column are
calculated based on FAS 123R (excluding any estimate of forfeiture).
They
equal the aggregate dollar amount of compensation expense related
to
option and stock awards to each of the Named Executive Officers
that was
recognized in the Company’s 2007 financial statements. Under FAS 123R, a
pro rata portion of the total expense at the time of grant is
recognized
over the vesting schedule of the grant. The initial expense is
based on
the fair value of the stock option grants as estimated using
the
Black-Scholes option-pricing model. The assumptions used to arrive
at the
Lattice Option Pricing Model values are disclosed in Note 12
Stockholders’
Equity to our consolidated financial statements included in our
Form 10-K
for the year ended December 31, 2007 which accompanies the Proxy
Statement.
|
|
(3)
|
Represents
the value of a stock bonus granted on February 6, 2008 (bonus
compensation
paid in 2008 which has been included as compensation earned in
fiscal
2007) pursuant to the 2007 Stock Incentive Plan. The number of
shares
issued pursuant to the February 6, 2008 stock bonus award was
calculated
using the closing price on February 6, 2008 which was $1.32,
as reported
on OTC Pink Sheets Electronic Quotation Service. 56,818 shares
of
restricted common stock were granted to Mr. Weggeman on February
6, 2008
and fully vest if he is employed by the Company on February 6,
2011,
subject to earlier vesting under certain
circumstances.
|
|
(4)
|
Represents
the value of options to purchase 2,491,419 shares of the Company's
common
stock at an exercise price of $1.25 pursuant to the 2007 Stock
Incentive
Plan. Effective December 27, 2007, the Company’s Board of Directors and
Mr. Weggeman, agreed to cancel the non-plan options awarded to
Mr.
Weggeman in 2006 and replace with a new stock option
award.
|
|
(5)
|
Effective
December 27, 2007, the Company and Mr. Weggeman entered into
a deferred
compensation agreement discussed under the heading “Employment Agreements”
in this Proxy Statement. Pursuant to the deferred compensation
agreement,
Mr. Weggeman would be entitled to receive deferred compensation
of up to
$1,519,766 of which 19.4% shall be immediately vested. Amounts
vesting on
or before October 1, 2009, shall be payable not later than October
31,
2009.
|
|
(6)
|
“Other
Compensation” for 2007 relates to $9,384 in health benefits and $9,000 for
401(k) matching contributions.
|
|
(7)
|
Discretionary
cash bonus awarded by the Compensation
Committee.
|
|
(8)
|
Represents
the value of options to purchase 250,000 shares of the Company's
common
stock at an exercise price of $1.25 pursuant to the 2007 Stock
Incentive
Plan. Effective December 27, 2007, the Company’s Board of Directors and
Mr. LaBarre, agreed to cancel the non-plan options awarded to
Mr. LaBarre
in 2006 and replace with a new stock option
award.
|
|
(9)
|
“Other
Compensation” for 2007 relates to $9,384 in health benefits and $9,000 for
401(k) matching contributions.
|
|
(10)
|
“Other
Compensation” in 2007 includes $10,725 for health and life insurance
benefits, $6,960 for vehicle allowance and $7,200 in 401(k) matching
contributions.
|
Grants
of Plan-Based Awards
The
following table contains certain information regarding grants of plan based
awards in fiscal year 2007 under the 2007 Annual Incentive Plan for bonuses
and
2007 Stock Incentive Plan for stock awards to each of the Named Executive
Officers.
|
|
|
|
Estimated
Future Payouts Under Non-Equity Incentive Plan
Awards
|
|
Estimated
Future Payouts Under Equity Incentive Plan Awards
|
|
|
|
|
|
|
|
Name
(a)
|
|
Grant
Date(b)
|
|
Threshold
($)(c)
|
|
Target
$(d)
|
|
Maximum
($)(e)
|
|
Threshold
($)(f)
|
|
Target
$(g)
|
|
Maximum
($)(h)
|
|
All
Other Stock Awards: Number of Shares of Stock or Units
(#)(i)
|
|
All
Other Option Awards: Number of Securities Underlying Options
(#)(j)
|
|
Exercise
or Base Price of Option Awards
($/Sh)(k)
|
|
Albert
W. Weggeman
(1)
|
|
|
12/27/2007
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,378,035
|
|
|
—
|
|
|
—
|
|
|
2,491,419
|
|
|
3,114,274
|
|
Albert
W. Weggeman
(2)
|
|
|
2/6/2008
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
56,818
|
|
|
—
|
|
|
—
|
|
Albert
W. Weggeman
(3)
|
|
|
12/27/2007
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,000,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Jonathan
LaBarre
(4)
|
|
|
12/27/2007
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
640,000
|
|
|
—
|
|
|
—
|
|
|
250,000
|
|
|
312,500
|
|
|
(1)
|
Effective
December 27, 2007, the Company’s Board of Directors and Mr. Weggeman,
agreed to cancel non-plan options to purchase 2,491,419 shares
of the
Company's common stock at an exercise price of $0.64 per share,
which were
granted to Mr. Weggeman pursuant to the terms of his employment
agreement
dated as of September 22, 2006, and award to Mr. Weggeman options
under
the Company's 2007 Stock Incentive Plan to purchase 2,491,419
shares of
common stock at an exercise price of $1.25 per share. The estimated
future
payout is assumed at a target stock price of $5.12 for the options
to
purchase 1,245,710 shares that comprise the performance portion
of the
award.
|
|
(2)
|
Effective
February 6, 2008, the Company issued to Mr. Weggeman, a restricted
stock
award of 56,818 shares of common stock pursuant to the Company's
2007
Stock Incentive Plan. The number of shares issued pursuant to
the February
6, 2008 stock bonus award was calculated using the closing price
on
February 6, 2008 which was $1.32, as reported on OTC Pink Sheets
Electronic Quotation Service. 56,818 shares of restricted common
stock
were granted to Mr. Weggeman on February 6, 2008 and fully vest
if he is
employed by the Company on February 6, 2011, subject to earlier
vesting
under certain circumstances.
|
|
(3)
|
Effective
December 27, 2007, the Company and Mr. Weggeman agreed to cancel
the
restricted stock award that was granted to Mr. Weggeman pursuant
to the
terms of his employment agreement dated as of September 22, 2006,
and to
issue to Mr. Weggeman a new restricted stock award pursuant to
the
Company's 2007 Stock Incentive Plan. Under the new award, Mr.
Weggeman
shall earn shares of restricted common stock on the following
basis: (i)
$1,000,000 of restricted common stock upon the Company achieving
Adjusted
EBITDA of at least $25,000,000 in a fiscal year of the Company
commencing after fiscal year ended December 31, 2007; (ii) $1,000,000
of
restricted common stock upon the Company achieving annual Adjusted
EBITDA,
of at least $50,000,000 in a subsequent fiscal year of the Company;
and
(iii) $1,000,000 of restricted common stock upon the Company
achieving
annual Adjusted EBITDA of at least $75,000,000 in a subsequent
fiscal year
of the Company. Each of the grants specified in (i)−(iii) above are
one−time grants which vest on the date on which the Company’s Form 10−K is
filed in respect of the fiscal year for which the grant is being
made and
the grant price will be the closing price of the common stock
of the
Company on the principal exchange on which it is traded on such
date.
|
|
(4)
|
Effective
December 27, 2007, the Company’s Board of Directors and Mr. LaBarre agreed
to cancel options awarded to Mr. LaBarre under the Company's
1999 Equity
Incentive Plan and pursuant to the terms of his employment agreement
dated
as of December 1, 2006, to purchase 250,000 shares of the Company's
common
stock at an exercise price of $2.56 per share and award to Mr.
LaBarre
options under the Company’s 2007 Stock Incentive Plan to purchase 250,000
shares of stock at an exercise price of $1.25 per share. The
estimated
future payout is assumed at a target stock price of $5.12 for
the options
to purchase 125,000 shares that comprise the performance portion
of the
award.
|
Outstanding
Equity Awards at Fiscal Year End
The
following table contains certain information concerning stock options and
stock
awards held by the Named Executive Officers at December 31, 2007.
|
|
Option
Awards
|
|
Stock
Awards
|
|
Name(a)
|
|
Number
of Securities Underlying Unexercised Options (#)
Exercisable(b)
|
|
Number
of Securities Underlying Unexercised Options (#)
Unexercisable
(c)
|
|
Equity
Incentive Plan Awards: Number of Securities Underlying Unexcercised
Unearned Options
(#)(d)
|
|
Option
Exercise Price
($)(e)
|
|
Option
Expiration Date
(f)
|
|
Number
of Shares or Units of Stock That Have Not Vested
(#)(g)
|
|
Market
Value of Shares or Units of Stock That Have Not Vested
($)(h)
|
|
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or
Other Rights
That Have Not Vested
(#)(i)
|
|
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares,
Units or
Other Rights That Have Not Vested
($)(j)
|
|
Albert
W. Weggeman
(1)
|
|
|
484,442
|
|
|
2,006,977
|
|
|
—
|
|
|
1.25
|
|
|
10/03/2016
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Albert
W. Weggeman
(2)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
56,818
|
|
|
71,023
|
|
Albert
W. Weggeman
(3)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,400,000
|
|
|
3,000,000
|
|
Jonathan
LaBarre
(4)
|
|
|
41,666
|
|
|
208,334
|
|
|
—
|
|
|
1.25
|
|
|
10/03/2016
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Paul
Vesey
(5)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
147,059
|
|
|
183,824
|
|
|
—
|
|
|
—
|
|
|
(1)
|
Options
to purchase shares of common stock vest and become exercisable
as follows:
(i) 484,442 shares are immediately vested and exercisable,
(ii) 761,267 shares shall vest and become exercisable in 22 equal
consecutive monthly tranches commencing on January 3, 2008; provided,
that, upon the occurrence of a Change-of-Control Event as defined
in the
2007 Stock Incentive Plan, the vesting of such 761,267 shares
shall
accelerate and they shall automatically vest, to the extent not
previously
vested, immediately prior to the effective time of such Change-of-Control
Event, and (iii) 1,245,710 shares shall vest and become exercisable
upon the occurrence of both of the following
events: (A) the Company's common stock reaching a price of at
least $5.12 per share (subject to adjustment for stock splits
and similar
events) for 20 consecutive trading days, and (B) the aggregate amount
of Adjusted EBITDA for any four consecutive calendar quarters,
commencing
with the calendar quarter beginning January 1, 2008, being not
less than
$70,000,000; provided, that, if the conditions specified in clauses
(A)
and (B) of this clause (iii) have not been satisfied on or before
the
fourth anniversary of the date of grant of such options, then
the options
described in this clause (iii) shall have lapsed without vesting.
The
1,245,710 shares acquirable under clause (iii) described
above may not be sold or otherwise transferred (except on the death
of Mr. Weggeman) prior to December 27,
2011.
|
|
(2)
|
56,818
shares of restricted common stock fully vest if Mr. Weggeman
is employed
by the Company on February 6, 2011, subject to earlier vesting
under
certain circumstances.
|
|
(3)
|
Mr.
Weggeman shall earn shares of restricted common stock on the
following
basis: (i) $1,000,000 of restricted common stock upon the Company
achieving Adjusted EBITDA of at least $25,000,000 in a fiscal
year of the
Company commencing after fiscal year ended December 31, 2007;
(ii)
$1,000,000 of restricted common stock upon the Company achieving
annual
Adjusted EBITDA of at least $50,000,000 in a subsequent fiscal
year of the
Company; and (iii) $1,000,000 of restricted common stock upon
the Company
achieving annual Adjusted EBITDA of at least $75,000,000 in a
subsequent
fiscal year of the Company. Each of the grants specified in (i)−(iii)
above are one−time grants which vest on the date on which the Company’s
Form 10−K is filed in respect of the fiscal year for which the grant
is
being made and the grant price will be the closing price of the
common
stock of the Company on the principal exchange on which it is
traded on
such date.
|
|
(4)
|
Options
to purchase 125,000 shares of common stock vest and become exercisable
as
follows: (i) 41,666 options vest immediately; (ii) 41,667 options
vest on
December 1, 2008; and (iii) 41,667 options vest on December 1,
2009;
provided, that upon the occurrence of a Change-of-Control Event
as defined
in the 2007 Stock Incentive Plan, the vesting of such 83,334
options shall
accelerate, and they shall automatically vest, to the extent
not
previously vested, immediately prior to the effective time of
such
Change-of-Control Event. The other 125,000 options vest and become
exercisable upon the occurrence of both of the following events:
(A) the
Company's common stock reaching a price of at least $5.12 per
share
(subject to adjustment for stock splits and similar events) for
20
consecutive trading days, and (B) the aggregate amount of Adjusted
EBITDA
for any four consecutive calendar quarters, commencing with the
calendar
quarter beginning January 1, 2008, being not less than $70,000,000;
provided, that if the conditions specified in clauses (A) and
(B) above
have not been satisfied on or before the fourth anniversary of
the date of
grant of such options, the options described in this sentence
shall have
lapsed without vesting. The shares of common stock acquirable
on exercise
of these options may not be sold or otherwise transferred (except
on the
death of Mr. LaBarre) prior to December 27,
2011.
|
|
(5)
|
Mr.
Vesey was granted 158,824 shares of restricted common stock of
which
11,765 shares vested as of the grant date and the remaining 147,059
shares
vested on March 17, 2008.
|
Option
Exercises and Stock Vested During Fiscal 2007
The
following table contains certain information concerning stock options and
stock
awards that vested by the Named Executive Officers at December 31, 2007.
|
|
Option
Awards
|
|
Stock
Awards
|
|
Name
(a)
|
|
Number
of Shares Acquired on Exercise
(#)
(b)
|
|
Value
Realized on Exercise
($)
(c)
|
|
Number
of Shares Acquired on Vesting
(#)
(d)
|
|
Value
Realized on Vesting
($)
(e)
|
|
Albert
W. Weggeman
|
|
|
—
|
|
|
—
|
|
|
484,442
|
|
|
605,553
|
|
Jonathan
LaBarre
|
|
|
—
|
|
|
—
|
|
|
41,666
|
|
|
52,083
|
|
Pension
Benefits - Fiscal 2007
There
were no pension benefits earned by our Named Executive Officers during
the year
ended December 31, 2007.
Nonqualified
Deferred Compensation - Fiscal 2007
The
following table contains certain information concerning deferred compensation
that vested by the Named Executive Officer at December 31, 2007.
Non-Qualified
Deferred Compensation
|
|
Name
(a)
|
|
Executive
Contributions in Last Fiscal Year
($)
(b)
|
|
Registrant
Contributions in Last Fiscal Year
($)
(c)
|
|
Aggregate
Earnings in Last Fiscal Year
($)
(d)
|
|
Aggregate
Withdrawls/
Distributions
($)
(e)
|
|
Aggregate
Balance
at
Last
Fiscal
Year End
($)
(f)
|
|
Albert
W. Weggeman
(1)
|
|
|
—
|
|
|
—
|
|
|
294,835
|
(2)
|
|
—
|
|
|
294,835
|
|
|
(1)
|
Effective
December 27, 2007, the Company and Mr. Weggeman entered into a deferred
compensation agreement discussed under the heading “Employment Agreements”
in this Proxy Statement. Pursuant to the deferred compensation agreement,
Mr. Weggeman would be entitled to receive deferred compensation of
up to
$1,519,766 of which 19.4% shall be immediately vested.
|
|
(2)
|
Such
amount is reported as compensation to Mr. Weggeman on the Summary
Compensation Table in this Proxy
Statement.
|
Potential
Payments Upon Termination or Change of Control
The
tables below reflect the amount of compensation to each of the Named Executive
Officers of the Company in the event of termination of such executive’s
employment. The amount of compensation payable to each Named Executive Officer
upon voluntary termination; retirement; involuntary not-for-cause termination;
involuntary for cause termination; termination following a change of control;
retention following a change of control and in the event of disability or death
of the executive is shown below. The amounts shown assume that such termination
was effective as of December 31, 2007, and thus includes amounts earned through
such time and are estimates of the amounts which would be paid out to the
executives upon their termination. The actual amounts to be paid out can only
be
determined at the time of such executive’s separation from the Company.
Payments
Made Upon Termination
Regardless
of the manner in which a Named Executive Officer’s employment terminates, he may
be entitled to receive amounts earned during his term of employment.
Payments
Made Upon Retirement
In
the
event of the retirement of a Named Executive Officer, no additional benefits
are
paid.
Payments
Made Upon a Change of Control
Upon
a
change of control, in addition to the benefits listed under the heading
“Payments Made Upon Termination”, stock option and restricted stock awards
granted to the Named Executive Officers under our 2007 Stock Incentive Plan
will
generally automatically vest become exercisable except to the extent such awards
are not assumed by the successor company or replaced with a comparable award.
Generally,
pursuant to the 2007 Stock Incentive Plan, a change of control is deemed to
occur in the event that:
|
·
|
the
current members of the Board cease to constitute a majority of the
Board;
or
|
|
·
|
the
Company shall have been sold by either (i) a sale of all or substantially
all its assets, or (ii) a merger or consolidation, other than any
merger
or consolidation pursuant to which the Company acquires another entity,
or
(iii) a tender offer, whether solicited or
unsolicited.
|
Albert
W. Weggeman
The
following table shows the potential payments upon termination or a change of
control of the Company for Albert W. Weggeman, the Company’s President and Chief
Executive Officer.
Type
of Compensation
|
|
Voluntary
Termination on 12/31/07
($)
|
|
Without
Cause
Termination
on 12/31/07
($)
|
|
Change-in-Control
and Termination on 12/31/07
($)
|
|
Change
in Control Retention on 12/31/07
($)
|
|
Cash
Severance Salary
|
|
|
—
|
|
|
300,000
|
(1)
|
|
—
|
|
|
—
|
|
Stock
Options
|
|
|
—
|
|
|
—
|
|
|
—
|
(2)
|
|
—
|
|
Restricted
Stock
|
|
|
—
|
|
|
71,023
|
(3)
|
|
3,071,023
|
(3)(4)
|
|
—
|
|
Total
|
|
|
—
|
|
|
371,023
|
|
|
3,071,023
|
|
|
—
|
|
|
(1)
|
Mr.
Weggeman to receive one year base salary pursuant to the terms of
his
employment agreement which is discussed under the heading “Employment
Agreements” in this Proxy Statement.
|
|
(2)
|
Mr.
Weggeman’s 761,267 time vesting stock options not then vested shall vest
in full. No value was entered in the above table due to the December
31,
2007 market price of $1.25 per share being equal to the exercise
price of
such options.
|
|
(3)
|
Represents
the value of a stock bonus granted on February 6, 2008 (2008 bonus
compensation which has been included as compensation in fiscal 2007)
pursuant to the 2007 Stock Incentive Plan. The number of shares issued
pursuant to the February 6, 2008 stock bonus award was calculated
using
the closing price on February 6, 2008 which was $1.32, as reported
on OTC
Pink Sheets Electronic Quotation Service. 56,818 shares of restricted
common stock were granted to Mr. Weggeman on February 6, 2008 and
fully
vest if he is employed by the Company on February 6, 2011, subject
to
earlier vesting under certain
circumstances.
|
|
(4)
|
Represents
the value of options to purchase 2,491,419 shares of the Company's
common
stock at an exercise price of $1.25 pursuant to the 2007 Stock Incentive
Plan. Effective December 27, 2007, the Company’s Board of Directors and
Mr. Weggeman, agreed to cancel the non-plan options awarded to Mr.
Weggeman in 2006 and replace with a new stock option
award.
|
Jonathan
LaBarre
The
following table shows the potential payments upon termination or a change of
control of the Company for Jonathan LaBarre, the Company’s Chief Financial
Officer, Secretary and Treasurer.
|
|
Voluntary
Termination on 12/31/07
($)
|
|
Without
Cause Termination on 12/31/07
($)
|
|
Change-in-Control
and Termination on 12/31/07
($)
|
|
Change
in Control Retention on 12/31/07
($)
|
|
Cash
Severance Salary
|
|
|
—
|
|
|
205,000
|
(1)
|
|
—
|
|
|
—
|
|
Stock
Options
|
|
|
—
|
|
|
—
|
|
|
|
(2)
|
|
—
|
|
Total
|
|
|
—
|
|
|
205,000
|
(1)
|
|
—
|
|
|
—
|
|
|
(1)
|
Mr.
LaBarre to receive one year base salary pursuant to the terms of
his
employment agreement which is discussed under the heading “Employment
Agreements” in this Proxy Statement.
|
|
(2)
|
Mr.
LaBarre’s 125,000 time vesting stock options not then vested shall vest in
full. No value was entered in the above table due to the December
31, 2007
market price of $1.25 per share being equal to the exercise price
of such
options.
|
Paul
Vesey
The
following table shows the potential payments upon termination or a change of
control of the Company for Paul Vesey, the Company’s President of Concord
Steel.
|
|
Voluntary
Termination on 12/31/07
($)
|
|
Without
Cause Termination on 12/31/07
($)
|
|
Change-in-Control
and Termination on 12/31/07
($)
|
|
Change
in Control Retention on 12/31/07
($)
|
|
Cash
Severance Salary
|
|
|
—
|
|
|
315,000
|
(1)
|
|
315,000
|
(1)
|
|
315,000
|
(1)
|
Restricted
Stock
|
|
|
—
|
|
|
183,824
|
(2)
|
|
183,824
|
(2)
|
|
183,824
|
(2)
|
Total
|
|
|
—
|
|
|
498,824
|
|
|
498,824
|
|
|
498,824
|
|
|
(1)
|
Mr.
Vesey to receive one year and nine months base salary of $180,000
per year
pursuant to the terms of his employment agreement which is discussed
under
the heading “Employment Agreements” in this Proxy Statement.
|
|
(2)
|
Mr.
Vesey’s 147,059 unvested shares of restricted stock will be accelerated
and valued using the December 31, 2007 market price of $1.25.
|
EMPLOYMENT
AGREEMENTS
Albert
W. Weggeman
On
September 22, 2006, we entered into an employment agreement with Albert W.
Weggeman which provides that he will serve as our President and Chief Executive
Officer for a three year term that commenced on October 3, 2006, subject to
earlier termination as set forth in the employment agreement. The employment
agreement provides for a base salary of $300,000. The Compensation Committee
and
the Board of Directors shall review Mr. Weggeman’s base salary annually and,
based on a number of factors, including, without limitation, Stamford Industrial
Group’s performance and Mr. Weggeman’s performance, may in their sole and
absolute discretion, increase Mr. Weggeman’s base salary. In addition, Mr.
Weggeman is entitled to receive annual and other bonuses payable in cash or
equity as may be determined in the sole discretion of the Compensation Committee
and the Board of Directors.
In
the
event Mr. Weggeman’s employment is terminated by Stamford Industrial Group
without “cause” (as such term is defined in his employment agreement) or if
Stamford Industrial Group fails to renew or extend the term of his employment
agreement, and the Stamford Industrial Group so elects, and Mr. Weggeman has
complied with the terms of his employment agreement, Stamford Industrial Group
may continue to pay Mr. Weggeman his base compensation for up to an additional
12 months. In addition, Mr. Weggeman’s employment agreement may be terminated at
Stamford Industrial Group’s option for “cause” (as such term is defined in his
employment agreement).
Mr.
Weggeman’s employment agreement contains a non-competition covenant and
non-solicitation provisions (relating to Stamford Industrial Group’s employees
and customers) effective during the term of his employment and for one year
after any termination of Mr. Weggeman’s employment and for the duration of any
extended severance period in the event of termination of employment without
cause due to failure to renew or extend the employment agreement.
Effective
December 27, 2007, the Company’s Board of Directors and Mr. Albert W. Weggeman,
agreed to cancel non-plan options to purchase 2,491,419 shares of the Company's
common stock at an exercise price of $0.64 per share, which were granted to
Mr.
Weggeman pursuant to the terms of his employment agreement dated as of September
22, 2006, and award to Mr. Weggeman options under the Company's 2007 Stock
Incentive Plan to purchase 2,491,419 shares of common stock at an exercise
price
of $1.25 per share, which was the closing price of the common stock as
reported by the OTC Pink Sheet Electronic Quotation Service on
December 27, 2007. Options to purchase (i) 484,442 shares are immediately
vested and exercisable, (ii) 761,267 shares shall vest and become
exercisable in 22 equal consecutive monthly tranches commencing on January
3,
2008; provided, that, upon the occurrence of a Change-of-Control Event as
defined in the 2007 Stock Incentive Plan, the vesting of such 761,267 shares
shall accelerate and they shall automatically vest, to the extent not previously
vested, immediately prior to the effective time of such Change-of-Control Event,
and (iii) 1,245,710 shares shall vest and become exercisable upon the
occurrence of both of the following events: (A) the Company's common
stock reaching a price of at least $5.12 per share (subject to adjustment for
stock splits and similar events) for 20 consecutive trading days, and
(B) the aggregate amount of Adjusted EBITDA for any four consecutive
calendar quarters, commencing with the calendar quarter beginning January 1,
2008, being not less than $70,000,000; provided, that, if the conditions
specified in clauses (A) and (B) of this clause (iii) have not been satisfied
on
or before the fourth anniversary of the date of grant of such options, then
the
options described in this clause (iii) shall have lapsed without vesting. The
1,245,710 shares acquirable under clause (iii) described above may not
be sold or otherwise transferred (except on the death of Mr. Weggeman) prior
to
December 27, 2011.
Also
effective December 27, 2007, the Company and Mr. Weggeman entered into a
deferred compensation agreement pursuant to which Mr. Weggeman would be entitled
to receive deferred compensation of up to $1,519,766, which may be reduced
if
the stock price at the time of distribution is less than $1.25. The deferred
compensation shall vest on the following basis: (i) 19.4% shall be immediately
vested; (ii) 30.6% shall vest in twenty-two equal monthly consecutive tranches
commencing on December 27, 2007, subject to Mr. Weggeman being employed by
the Company on each vesting date; (iii) up to 50.0% shall vest as follows,
provided that Mr. Weggeman is actively employed as of the vesting date: (A)
16.7% shall vest as of March 31, 2008, if the Company’s Adjusted EBITDA, for the
year ending December 31, 2007 (“Year 1”) is not less than $13,800,000 (the
“Year 1 Target”); if the Year 1 Target is not achieved, and if the sum of the
Company’s Adjusted EBITDA for the years ending December 31, 2007 and 2008 is not
less than the sum of the Year 1 Target plus the Year 2 Target (as defined
below), then such 16.7% shall vest as of March 31, 2009; (B) 16.7% shall vest
as
of March 31, 2009, if the Company’s Adjusted EBITDA for the year ending December
31, 2008 (“Year 2”) is not less than $15,700,000 (the “Year 2 Target”); if
the Year 2 Target is not achieved, and if the sum of the Company’s Adjusted
EBITDA for the years ending December 31, 2008 and 2009 is not less than the
sum
of the Year 2 Target plus the Year 3 Target (as defined below), then such 16.7%
shall vest as of March 31, 2010; (C) 16.6% shall vest as of March 31, 2010,
if
the Company’s Adjusted EBITDA for the year ending December 31, 2009
(“Year 3”) is not less than $17,200,000 (the “Year 3 Target”); if
(i) the Year 3 Target is not achieved, and (ii) the Company renews the
employment agreement of Mr. Weggeman for another three-year term, and
(iii) the sum of the Company’s Adjusted EBITDA for the years ending
December 31, 2009 and 2010 is not less than the sum of the Year 3 Target plus
the Year 4 Target (as defined hereinafter), then such 16.6% shall vest as of
March 31, 2011. “Year 4 Target” means an amount of the Company’s Adjusted EBITDA
for the year ending December 31, 2010 that will be agreed upon by the parties
in
the renewed employment agreement, if any. Amounts vesting on or before October
1, 2009, shall be payable not later than October 31, 2009. Amounts vesting
after
October 1, 2009, shall be payable promptly after vesting. Payments shall be
made
in cash or in common stock of the Company, as determined by the Compensation
Committee in its absolute discretion.
Also
effective December 27, 2007, the Company and Mr. Weggeman agreed to cancel
the
restricted stock award that was granted to Mr. Weggeman pursuant to the terms
of
his employment agreement dated as of September 22, 2006, and to issue to Mr.
Weggeman a new restricted stock award pursuant to the Company's 2007 Stock
Incentive Plan. Under the new award, Mr. Weggeman shall earn shares of
restricted common stock on the following basis: (i) $1,000,000 of Restricted
Stock upon the Company achieving Adjusted EBITDA of at least $25,000,000 in
a
fiscal year of the Company commencing after fiscal year ended December 31,
2007;
(ii) $1,000,000 of restricted common stock upon the Company achieving annual
Adjusted EBITDA of at least $50,000,000 in a subsequent fiscal year of the
Company; and (iii) $1,000,000 of restricted common stock upon the Company
achieving annual Adjusted EBITDA of at least $75,000,000 in a subsequent fiscal
year of the Company. Each of the grants specified in (i)−(iii) above are
one−time grants which vest on the date on which the Company’s Form 10−K is filed
in respect of the fiscal year for which the grant is being made and the grant
price will be the closing price of the common stock of the Company on the
principal exchange on which it is traded on such date.
During
the term of his employment, Mr. Weggeman shall be entitled to participate in
or
benefit from, in accordance with the eligibility and other provisions thereof,
Stamford Industrial Group’s medical insurance and other fringe benefit plans or
policies as it may make available to, or have in effect for, its personnel
with
commensurate duties from time to time. Stamford Industrial Group retains the
right to terminate or alter any such plans or policies from time to time. Mr.
Weggeman shall also be entitled to four weeks paid vacation each year, sick
leave and other similar benefits in accordance with policies of Stamford
Industrial Group from time to time in effect for personnel with commensurate
duties.
Jonathan
LaBarre
On
December 1, 2006, we entered into an employment agreement with Jonathan LaBarre
which provides that he will serve as our Chief Financial Officer and Principal
Financial Officer for a three year term, subject to earlier termination as
set
forth in the employment agreement. The employment agreement provides for a
base
salary of $205,000 and a one-time bonus in the amount of $45,000 payable upon
the filing of the Company’s annual report on Form 10-K for the year ended
December 31, 2006. The Compensation Committee and the Board of Directors shall
review Mr. LaBarre’s base salary annually and, based on a number of factors,
including, without limitation, Stamford Industrial Group’s performance and Mr.
LaBarre’s performance, may in their sole and absolute discretion, increase Mr.
LaBarre’s base salary. In addition, Mr. LaBarre is entitled to receive annual
and other bonuses payable in cash or equity as may be determined in the sole
discretion of the Compensation Committee and the Board of Directors.
In
the
event Mr. LaBarre’s employment is terminated by Stamford Industrial Group
without “cause” (as such term is defined in his employment agreement) or if
Stamford Industrial Group fails to renew or extend the term of his employment
agreement, and the Stamford Industrial Group so elects, and Mr. LaBarre has
complied with the terms of his employment agreement, Stamford Industrial Group
may continue to pay Mr. LaBarre his base compensation for up to an additional
12
months. In addition, Mr. LaBarre’s employment agreement may be terminated at
Stamford Industrial Group option for “cause” (as such term is defined in his
employment agreement).
Mr.
LaBarre’s employment agreement contains a non-competition covenant and
non-solicitation provisions (relating to Stamford Industrial Group employees
and
customers) effective during the term of his employment and for one year after
any termination of Mr. LaBarre’s employment and for the duration of any extended
severance period in the event of termination of employment without cause due
to
failure to renew or extend the employment agreement.
Effective
December 27, 2007, the Company’s Board of Directors and Mr. Jonathan LaBarre,
agreed to cancel options awarded to Mr. LaBarre
under
the Company's 1999 Equity Incentive Plan
and
pursuant to the terms of his employment agreement dated as of December 1, 2006,
to purchase 250,000 shares of the Company's common stock at an exercise price
of
$2.56 per share and award to Mr. LaBarre options under the Company’s 2007 Stock
Incentive Plan to purchase 250,000 shares of stock at an exercise price of
$1.25
per share, which was the closing price of the common stock as reported by the
OTC Pink Sheet Electronic Quotation Service on December 27, 2007. Options to
purchase 125,000 shares vest and become exercisable as follows: 41,666 options
vest immediately; 41,667 options vest on December 1, 2008; and 41,667 options
vest on December 1, 2009; provided, that upon the occurrence of a
Change-of-Control Event as defined in the 2007 Stock Incentive Plan, the vesting
of such 83,334 options shall accelerate, and they shall automatically vest,
to
the extent not previously vested, immediately prior to the effective time of
such Change-of-Control Event. The other 125,000 options vest and become
exercisable upon the occurrence of both of the following events: (A) the
Company's common stock reaching a price of at least $5.12 per share (subject
to
adjustment for stock splits and similar events) for 20 consecutive trading
days,
and (B) the aggregate amount of Adjusted EBITDA for any four consecutive
calendar quarters, commencing with the calendar quarter beginning January 1,
2008, being not less than $70,000,000; provided, that if the conditions
specified in clauses (A) and (B) above have not been satisfied on or before
the
fourth anniversary of the date of grant of such options, the options described
in this sentence shall have lapsed without vesting. The shares of common stock
acquirable on exercise of these options may not be sold or otherwise transferred
(except on the death of Mr. LaBarre) prior to December 27, 2011.
During
the term of his employment, Mr. LaBarre shall be entitled to participate in
or
benefit from, in accordance with the eligibility and other provisions thereof,
Stamford Industrial Group medical insurance and other fringe benefit plans
or
policies as it may make available to, or have in effect for, its personnel
with
commensurate duties from time to time. Stamford Industrial Group retains the
right to terminate or alter any such plans or policies from time to time. Mr.
LaBarre shall also be entitled to four weeks paid vacation each year, sick
leave
and other similar benefits in accordance with policies of Stamford Industrial
Group from time to time in effect for personnel with commensurate
duties.
Paul
Vesey
On
October 3, 2006, we entered into an employment agreement with Paul Vesey which
provides that he will serve as the President and General Manager of Concord
Steel for a three year term, subject to earlier termination as set forth in
the
employment agreement. The employment agreement provides for a base salary of
$180,000 and a one-time bonus in the amount of $125,000, if Stamford Industrial
Group exceeds revenues of $80,700,000 for the 2006 fiscal year, payable upon
the
filing of the Company’s annual report on Form 10-K for the year ended December
31, 2006. The Compensation Committee and the Board of Directors shall review
Mr.
Vesey’s base salary annually and, based on a number of factors, including,
without limitation, Stamford Industrial Group performance and Mr. Vesey’s
performance, may in their sole and absolute discretion, increase Mr. Vesey’s
base salary. In addition, Mr. Vesey is entitled to receive annual and other
bonuses payable in cash or equity as may be determined in the sole discretion
of
the Compensation Committee and the Board of Directors.
In
the
event Mr. Vesey’s employment is terminated by Stamford Industrial Group without
“cause” (as such term is defined in his employment agreement), Mr. Vesey is
entitled to receive his base compensation for the remainder of the term and
all
of his unvested stock awards shall vest at the end the applicable non-compete
period as set forth in his employment agreement. In the event that Stamford
Industrial Group fails to renew or extend the term of Mr. Vesey’s employment
agreement, and Mr. Vesey has complied with the terms of the employment
agreement, Stamford Industrial Group will continue to pay Mr. Vesey his base
compensation for up to an additional 12 months. In addition, Mr. Vesey’s
employment agreement may be terminated at Stamford Industrial Group’s option for
“cause” (as such term is defined in his employment agreement).
Mr.
Vesey’s employment agreement contains a non-competition covenant and
non-solicitation provisions (relating to Stamford Industrial Group’s employees
and customers) effective during the term of his employment and for one year
after any termination of Mr. Vesey’s employment and for the duration of any
extended severance period in the event of termination of employment without
cause due to failure to renew or extend the employment agreement.
Pursuant
to the terms of the employment agreement, Mr. Vesey received the following
amounts of Restricted Stock under Stamford Industrial Group’s 1999 Equity
Incentive Plan: (i) 147,059 shares of Restricted Stock, which shall vest upon
the occurrence of any of the following: (i) the Company achieving revenues
of at
least $90,000,000 for the fiscal year ending December 31, 2007, (ii) the Company
achieving gross profit of at least $18,600,000 for the fiscal year ending
December 31, 2007 or (iii) the Company achieving EBITDA of at least $14,800,000
for the fiscal year ending December 31, 2007 and (ii) 11,765 shares of fully
vested Restricted Stock upon the commencement date. The grant specified in
(i)
above is a one-time grant which vests on the date on which the Company’s Form
10-K is filed in respect of the fiscal year for which the grant is being made
and the grant price will be the closing price of shares of Stamford Industrial
Group’s common stock on the principal exchange on which it is traded on such
date. Additionally, pursuant to the terms of the employment agreement, Mr.
Vesey
agreed not to sell, pledge, hypothecate or otherwise transfer the Restricted
Stock within a one year period after grant without the consent of the Board
of
Directors.
During
the term of his employment, Mr. Vesey shall be entitled to participate in or
benefit from, in accordance with the eligibility and other provisions thereof,
Stamford Industrial Group’s medical insurance and other fringe benefit plans or
policies as it may make available to, or have in effect for, its personnel
with
commensurate duties from time to time. Stamford Industrial Group retains the
right to terminate or alter any such plans or policies from time to time. Mr.
Vesey shall also be entitled to four weeks paid vacation each year, sick leave
and other similar benefits in accordance with policies of Stamford Industrial
Group from time to time in effect for personnel with commensurate duties.
COMPENSATION
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During
fiscal 2007, none of the members of our Compensation Committee, (i) served
as an
officer or employee of Stamford Industrial Group or its subsidiaries, (ii)
was
formerly an officer of Stamford Industrial Group or its subsidiaries or (iii)
entered into any transactions with Stamford Industrial Group or its
subsidiaries. During fiscal 2007, none of our executive officers (i) served
as a
member of the compensation committee (or other board committee performing
similar functions or, in the absence of any such committee, the board of
directors) of another entity, one of whose executive officers served on our
Compensation Committee, (ii) served as director of another entity, one of whose
executive officers served on our Compensation Committee, or (iii) served as
member of the compensation committee (or other board committee performing
similar functions or, in the absence of any such committee, the board of
directors) of another entity, one of whose executive officers served as a
director of Stamford Industrial Group.
SECTION
16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section
16(a) of the Exchange Act requires our directors and executive officers and
any
persons who own more than 10% of our capital stock to file with the Securities
and Exchange Commission (and, if such security is listed on a national
securities exchange, with such exchange), various reports as to ownership of
such capital stock. Such persons are required by Securities and Exchange
Commission regulations to furnish us with copies of all Section 16(a) forms
they
file.
Based
solely upon reports and representations submitted by the directors, executive
officers and holders of more than 10% of our capital stock, all Forms 3, 4
and 5
showing ownership of and changes of ownership in our capital stock during the
2007 fiscal year were timely filed with the Securities and Exchange Commission.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
On
September 22, 2006, the Company entered into an Equity Compensation Agreement
(the “Compensation Agreement”) with Kanders & Company, Inc. for prior
strategic, consulting, investment banking and advisory services to the Company
in connection with the Company’s asset redeployment strategy. As compensation
for such past services, the Company agreed to issue to Kanders & Company
8,274,000 shares of its common stock. Pursuant to the terms and conditions
of
the Compensation Agreement, the Company granted “demand” and “piggyback”
registration rights to Kanders & Company with respect to the shares of
common stock that are issued under the Compensation Agreement.
Also,
on
September 22, 2006, the Company entered into a five year consulting agreement
(the “Consulting Agreement”) with Kanders & Company, providing that Kanders
& Company will render investment banking and financial advisory services to
the Company on a non-exclusive basis, including strategic planning, assisting
in
the development and structuring of corporate debt and equity financings,
introductions to sources of capital, guidance and advice as to (i) potential
targets for mergers and acquisitions, joint ventures, and strategic alliances,
including facilitating the negotiations in connection with such transactions,
(ii) capital and operational restructuring, and (iii) shareholder relations.
The
Consulting Agreement provides for Kanders & Company to receive a fee equal
to (i) $500,000 in cash per annum during the term of the Consulting Agreement,
payable monthly, and (ii) 1% of the amount by which the Company’s revenues as
reported in the Company’s Form 10-K, or if no such report is filed by the
Company, as reflected in the Company’s audited financial statements for the
fiscal year in question, exceeds $60,000,000, payable in shares of common stock
of the Company (the “Stock Fee”) valued at the weighted average price of the
Company’s common stock for the fiscal year in question. Upon a
“change-in-control” (as defined in the Consulting Agreement), Kanders &
Company will be entitled to a one-time lump sum cash payment equal to three
times the average amount Kanders & Company received during the two fiscal
years preceding such “change-in-control,” subject to certain limitations as set
forth in the Consulting Agreement. Upon the death or permanent disability of
Mr.
Kanders, the Company agreed to make a one time lump sum cash payment to Kanders
& Company equal to that amount Kanders & Company would be entitled to
receive upon a “change-in control”. Upon payment of the amounts due to Kanders
& Company either upon the occurrence of a “change-in-control”, or upon the
death or permanent disability of Mr. Kanders, the Consulting Agreement will
terminate.
During
the year ended December 31, 2007, the Company reimbursed Clarus Corporation
(“Clarus”), an entity it shared office space with until October 1, 2007, an
aggregate of $112,900 for telecommunication, professional and general office
expenses which Clarus incurred on behalf of the Company. Warren B. Kanders,
our
Non Executive Chairman, also serves as the Executive Chairman of
Clarus.
In
the opinion of management, the rates, terms and
consideration of the transactions with the related parties described above
are
at least as favorable as those we could have obtained in arms length
negotiations or otherwise are at prevailing market prices and
terms.
The
Board
of Directors has a general practice of requiring directors interested in a
transaction not to participate in deliberations or to vote upon transactions
in
which they have an interest, and to be sure that transactions with directors,
executive officers and major stockholders are on terms that align the interests
of the parties to such agreements with the interests of the stockholders.
PROPOSAL
TWO
AMENDMENT
OF THE COMPANY’S AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION
TO
EFFECT A REVERSE STOCK SPLIT
General
Our
Board
of Directors has unanimously approved a proposal to amend our Amended and
Restated Certificate of Incorporation to effect a reverse stock split of all
outstanding shares of our common stock at an exchange ratio ranging from
one-to-two to one-to-five in the discretion of the Board of Directors. The
Board
has recommended that this proposal be presented to our stockholders for
approval. You are now being asked to vote upon an amendment to our Amended
and
Restated Certificate of Incorporation to effect this reverse stock split whereby
a number of outstanding shares of our common stock between and including two
and
five, such number consisting only of whole shares, will be combined into one
share of our common stock. Pending stockholder approval, the Board will have
the
sole discretion pursuant to Section 242(c) of the DGCL to elect, as it
determines to be in the best interests of the Company and its stockholders,
whether or not to effect a reverse stock split, and if so, the number of shares
of our common stock between and including two and five that will be combined
into one share of our common stock, at any time before the first anniversary
of
the Meeting. The Board believes that stockholder approval of an amendment
granting the Board this discretion, rather than approval of a specified exchange
ratio, provides the Board with maximum flexibility to react to then-current
market conditions and, therefore, is in the best interests of the Company and
its stockholders.
The
text
of the form of the proposed amendment to our Amended and Restated Certificate
of
Incorporation is attached to this proxy statement as
Appendix
A
.
By
approving this amendment, stockholders will approve an amendment to our Amended
and Restated Certificate of Incorporation pursuant to which any whole number
of
outstanding shares between and including two and five would be combined into
one
share of our common stock and authorize the Board to file such amendment as
determined by the Board in the manner described herein. The Board may also
elect
not to effect any reverse split.
If
approved by the stockholders, and following such approval, the Board determines
that effecting a reverse stock split is in the best interests of the Company
and
its stockholders, the reverse stock split will
become
effective upon filing such amendment with the Secretary of State of the State
of
Delaware. The amendment filed thereby will contain the number of shares selected
by the Board within the limits set forth in this proposal to be combined into
one share of our common stock.
If
the
Board elects to effect a reverse stock split following stockholder approval,
the
number of issued and outstanding shares of common stock would be reduced in
accordance with an exchange ratio determined by the Board within the limits
set
forth in this proposal. Except for adjustments that may result from the
treatment of fractional shares as described below, each stockholder will hold
the same percentage of our outstanding common stock immediately following the
reverse stock split as such stockholder held immediately prior to the reverse
stock split. Currently, the Company is authorized to issue up to a total of
105,000,000 shares of capital stock, consisting of 5,000,000 shares of preferred
stock and 100,000,000 shares of common stock. The amendment would not change
the
number of total authorized shares of our capital stock. Thus, immediately
following the reverse stock split, the total number of authorized shares of
capital stock would remain at 105,000,000, consisting of 5,000,000 shares of
preferred stock and 100,000,000 shares of common stock. The par value of our
common stock and preferred stock would remain unchanged at $0.0001 per share
as
well. Currently, the Board does not have any plans to issue additional
authorized but unissued shares of our common stock following the reverse stock
split.
Reasons
for the Reverse Stock Split
The
Company’s common stock currently trades on the
OTC
Pink
Sheets Electronic Quotation Service
.
The
Board of Directors believes that a reverse stock split of the Company’s common
stock may help to facilitate the listing of the Company’s common stock on The
American Stock Exchange (“AMEX”). In order to be eligible for listing on AMEX
under the criterion the Company seeks to qualify for, a security must have
a
trading bid price of at least $2.00 for a sustained period. As of the Record
Date, the closing price of our common stock was $1.20
per
share, as reported by the
OTC
Pink
Sheets Electronic Quotation Service
.
If
effected, the reverse stock split will reduce the number of shares of common
stock issued and outstanding. The Board expects that such reduction will result
in an increase in the bid price of the common stock to a level above the current
bid price and to at least $2.00 per share. However, since there are numerous
factors and contingencies that could affect the bid price of the common stock,
there can be no assurance that such increase in the bid price will occur, or,
if
it occurs, that the bid price will be at least $2.00 per share for a sustained
period. Moreover, there can be no assurance that even if the minimum bid price
of the common stock is at least $2.00 for a sustained period, the Company will
meet the other listing requirements for inclusion on AMEX. Accordingly, there
can be no assurance that even if the proposal to amend our Amended and Restated
Certificate of Incorporation to effect a reverse stock split of all outstanding
shares of our common stock is approved, the Company’s common stock will be
approved for listing on AMEX.
The
Board
of Directors expects that, even if the common stock is not listed on AMEX,
the
reverse stock split may improve the marketability and liquidity of the common
stock because the anticipated increase in the per share price of the common
stock may reduce the reluctance of many brokerage firms and institutional
investors to recommend the common stock to their clients or to otherwise hold
it
in their own portfolios. The Board of Directors also believes that some of
the
practices of the securities industry that may tend to discourage individual
brokers within those firms from dealing in lower-priced stocks or lending funds
(i.e. providing margin) to facilitate the purchase of such stocks have affected
the per share price of the common stock. Some of those practices involve
time-consuming procedures which make dealing in lower-priced stocks less
appealing economically. Furthermore, the brokerage commission on a sale of
lower-priced stock may also represent a higher percentage of the sale price
than
the actual brokerage commission on a higher-priced issue.
The
Board
of Directors anticipates that a decrease in the number of issued and outstanding
shares of common stock, in the absence of any material alteration in the
proportionate economic interest in the Company held by its individual
stockholders, may increase the aggregate market value of the outstanding shares.
However, the Board makes no assurance that the market value of the common stock
will rise in proportion to the reduction in the number of outstanding shares
resulting from the reverse stock split. Accordingly, there can be no assurance
that the foregoing objectives will be achieved or that the market price of
the
common stock resulting upon implementation of the proposed reverse stock split
will be maintained for any period of time or that such market price will
approximate on a proportional basis the market price before the proposed reverse
stock split.
Board
Discretion to Implement the Reverse Stock Split
If
the
reverse stock split is approved by our stockholders, it will be effected, if
at
all, only upon a determination by the Board that a reverse stock split (with
an
exchange ratio determined by the Board as described above) is in the best
interests of the Company and its stockholders. The determination by the Board
as
to whether the reverse split will be effected, if at all, will be based upon
certain factors, including meeting the listing requirements for AMEX, existing
and expected marketability and liquidity of our common stock, prevailing market
conditions and the likely effect on the market price of our common stock. If
the
Board determines to effect the reverse stock split, the Board will consider
certain factors in selecting the specific exchange ratio, including the overall
market conditions at the time and the recent trading history of our common
stock.
Notwithstanding
approval of the reverse stock split by the stockholders, the Board may, in
its
sole discretion, abandon the proposed amendment and determine prior to the
effectiveness of any filing with the Secretary of State of the State of Delaware
not to effect the reverse stock split prior to the one-year anniversary of
the
Meeting, as permitted under Section 242(c) of the Delaware General Corporation
Law. If the Board fails to implement the reverse stock splits prior to the
one-year anniversary of the Meeting, stockholder approval again would be
required prior to implementing any reverse stock split.
Effects
of the Reverse Stock Split
After
the
effective date of the proposed reverse stock split, each stockholder will own
a
reduced number of shares of our common stock. However, the proposed reverse
stock split will affect all of our stockholders uniformly and will, therefore,
not affect any stockholder’s percentage ownership interest in us, except to the
extent that the reverse stock split results in any of our stockholders owning
a
fractional share as described below. Proportionate voting rights and other
rights and preferences of the holders of our common stock will not be affected
by the proposed reverse stock split (other than as a result of the payment
of
cash in lieu of fractional shares). For example, a holder of 2% of the voting
power of the outstanding shares of common stock immediately prior to the reverse
stock split would continue to hold 2% of the voting power of the outstanding
shares of common stock immediately after the reverse stock split. The number
of
stockholders of record will not be affected by the proposed reverse stock split
(except to the extent that any stockholder holds only a fractional share
interest and receives cash for such interest after the proposed reverse stock
split).
Although
the proposed reverse stock split will not affect the rights of stockholders
or
any stockholder’s proportionate equity interest in the Company, subject to the
treatment of fractional shares, the number of authorized shares of common stock
and preferred stock will not be reduced. This will increase significantly the
ability of the board to issue authorized and unissued shares without further
stockholder action. The issuance in the future of such additional authorized
shares may have the effect of diluting the earnings per share and book value
per
share, as well as the stock ownership and voting rights, of the currently
outstanding shares of common stock. The effective increase in the number of
authorized but unissued shares of common stock may be construed as having an
anti-takeover effect by permitting the issuance of shares to purchasers who
might oppose a hostile takeover bid or oppose any efforts to amend or repeal
certain provisions of our certificate of incorporation or bylaws.
The
proposed reverse stock split will reduce the number of shares of common stock
available for issuance upon exercise of our outstanding stock options in
proportion to the exchange ratio of the reverse stock split and will effect
a
proportionate increase in the exercise price of such outstanding stock options.
In connection with the proposed reverse stock split, the number of shares of
common stock issuable upon exercise or conversion of outstanding stock options
will be rounded to the nearest whole share and no cash payment will be made
in
respect of such rounding.
If
the
proposed reverse stock split is implemented, it will increase the number of
stockholders of the Company who own “odd lots” of less than 100 shares of our
common stock and decrease the number of stockholders who own “whole lots” of 100
shares or more of our common stock. Brokerage commissions and other costs of
transactions in odd lots are generally higher than the costs of transactions
of
whole lots or a greater number of shares. In addition, listing standards of
an
exchange or market like AMEX may require that we have a certain minimum number
of holders of whole lots.
Our
common stock is currently registered under Section 12(g) of the Securities
Exchange Act of 1934, as amended, and we are subject to the periodic reporting
and other requirements of the Exchange Act. The proposed reverse stock split
is
not expected to affect the registration of the common stock under the Exchange
Act. If the proposed reverse stock split is implemented (and depending on
whether the Company’s common stock is approved for listing on AMEX), our common
stock will continue to be reported on the
OTC
Pink
Sheets Electronic Quotation Service
under
the symbol “STMF.PK”.
The
proposed reverse stock split will not affect the par value of our common stock.
As a result, on the effective date of the reverse stock split, the stated
capital on our balance sheet attributable to the common stock will be reduced
in
proportion to the exchange ratio selected by the Board in the manner described
above, and the additional paid-in capital account shall be credited with the
amount by which the stated capital is reduced. The per share net income or
loss
and net book value of our common stock will be increased because there will
be
fewer shares of our common stock outstanding.
Effective
Date
The
proposed reverse stock split would become effective as of 5:00 p.m., Eastern
Daylight Time on the date of filing of a Certificate of Amendment to our Amended
and Restated Certificate of Incorporation with the office of the Secretary
of
State of the State of Delaware. Except as explained below with respect to
fractional shares, on the effective date, shares of common stock issued and
outstanding immediately prior thereto will be combined and converted,
automatically and without any action on the part of the stockholders, into
new
shares of common stock in accordance with the reverse stock split ratio
determined by the Board within the limits set forth in this proposal.
Payment
for Fractional Shares
No
fractional shares of common stock will be issued as a result of the proposed
reverse stock split. Instead, stockholders who otherwise would be entitled
to
receive fractional shares, upon surrender to the exchange agent of such
certificates representing such fractional shares, will be entitled to receive
cash in an amount equal to the product obtained by multiplying (i) the fair
market value of our common stock as determined by our Board of Directors on
the
effective date by (ii) the number of shares of our common stock held by such
stockholder that would otherwise have been exchanged for such fractional share
interest. For purposes of determining the amount of cash to be distributed
to
holders of fractional shares, the fair market value of our common stock shall
be
the closing price as reported on the
OTC
Pink
Sheets Electronic Quotation Service
on
the
effective date.
Exchange
of Stock Certificates
As
soon
as practicable after the effective date, stockholders will be notified that
the
reverse split has been effected. Our transfer agent will act as exchange agent
for purposes of implementing the exchange of stock certificates. We refer to
such person as the “exchange agent.” Holders of pre-reverse split shares will be
asked to surrender to the exchange agent certificates representing pre-reverse
split shares in exchange for certificates representing post-reverse split shares
in accordance with the procedures to be set forth in a letter of transmittal
to
be sent by us. No new certificates will be issued to a stockholder until such
stockholder has surrendered such stockholder’s outstanding certificate(s)
together with the properly completed and executed letter of transmittal to
the
exchange agent. Stockholders should not destroy any stock certificate and should
not submit any certificates until requested to do so.
Accounting
Consequences
The
par
value per share of our common stock would remain unchanged at $0.0001 per share
after the reverse stock split. As a result, on the effective date of the reverse
split, the stated capital on our balance sheet attributable to the common stock
will be reduced proportionally, based on the exchange ratio of the reverse
stock
split, from its present amount, and the additional paid-in capital account
shall
be credited with the amount by which the stated capital is reduced. The per
share common stock net income or loss and net book value will be increased
because there will be fewer shares of our common stock outstanding. We do not
anticipate that any other accounting consequences would arise as a result of
the
reverse stock split.
No
Appraisal Rights
Under
the
Delaware General Corporation Law, our stockholders are not entitled to appraisal
rights with respect to our proposed amendment to our charter to effect the
reverse stock split, and we will not independently provide our stockholders
with
any such rights.
Material
Federal U.S. Income Tax Consequences of the Reverse Stock
Split
The
following is a summary of certain U.S. federal income tax considerations of
the
proposed reverse stock split. It addresses only U.S. Stockholders (as defined
herein) who hold the pre-reverse split shares and post-reverse split shares
as
capital assets. This summary is based upon the Internal Revenue Code of 1986,
as
amended (the “Code”), Treasury Regulations, judicial authorities, published
positions of the Internal Revenue Service (the “IRS”) and other applicable
authorities, all as in effect on the date hereof
and
all
of which are subject to change or differing interpretations (possibly with
retroactive effect). It does not address tax considerations under state, local,
foreign and other laws.
As
used
herein, the term “U.S. Stockholder” means (i) an individual who is a citizen or
resident of the United States, (ii) a corporation or other entity treated as
a
corporation created or organized in or under (or treated for U.S. federal income
tax purposes as created or organized in or under) the laws of the United States
or any state thereof or the District of Columbia, (iii) an estate subject to
U.S. federal income taxation without regard to the source of its income, and
(iv) a trust if (a) a U.S. court is able to exercise primary supervision over
the trust’s administration and one or more U.S. fiduciaries have the authority
to control all of the trust’s substantial decisions, or (b) the trust has in
effect a valid election to be treated as a United States person within the
meaning of the U.S. Treasury Regulations. The discussion does not address the
U.S. federal income tax considerations that affect the treatment of an entity
that is a partnership for U.S. federal income tax purposes and that holds the
pre-reverse split shares and post-reverse split shares, or the partners of
such
partnership. Such partnerships and their partners should consult their own
tax
advisors. The discussion does not purport to be complete and does not address
stockholders subject to special rules, such as stockholders that are not U.S.
Stockholders, or that are financial institutions, tax-exempt organizations,
insurance companies, dealers in securities, mutual funds, stockholders who
hold
the pre-reverse split shares as part of a straddle, hedge or conversion
transaction or other risk reduction strategy, stockholders who hold the
pre-reverse split shares as qualified small business stock within the meaning
of
Section 1202 of the Code, stockholders who are subject to the alternative
minimum tax provisions of the Code and stockholders who acquired their
pre-reverse split shares pursuant to the exercise of employee stock options
or
otherwise as compensation. Furthermore, we have not obtained a ruling from
the
IRS or an opinion of legal or tax counsel with respect to the consequences
of
the reverse stock split. ACCORDINGLY, ALL STOCKHOLDERS SHOULD CONSULT THEIR
OWN
TAX ADVISORS AS TO THE SPECIFIC FEDERAL, STATE, LOCAL AND FOREIGN TAX
CONSEQUENCES TO THEM OF THE REVERSE STOCK SPLIT.
The
reverse stock split is intended to constitute a reorganization within the
meaning of Section 368 of the Code. Assuming the reverse split qualifies as
a
reorganization, a U.S. Stockholder generally will not recognize gain or loss
on
the reverse stock split, except (as discussed below) to the extent of cash,
if
any, received in lieu of a fractional share interest in the post-reverse split
shares. The aggregate tax basis of the post-reverse split shares received will
be equal to the aggregate tax basis of the pre-reverse split shares exchanged
therefor (excluding any portion of the holder’s basis allocated to fractional
shares), and the holding period of the post-reverse split shares received will
include the holding period of the pre-reverse split shares exchanged.
A
holder
of the pre-reverse split shares who receives cash in lieu of a fractional share
interest in the post-reverse split shares will generally recognize gain or
loss
equal to the difference between the portion of the tax basis of the pre-reverse
split shares allocated to the fractional share interest and the cash received.
Such gain or loss will be a capital gain or loss and will be short term if
the
pre-reverse split shares were held for one year or less and long term if held
more than one year. It is assumed for this purpose that cash will be paid in
lieu of fractional shares only as a mechanical rounding off of fractions
resulting from the exchange rather than separately bargained-for consideration.
It is also assumed that the reverse split is not being undertaken to increase
any stockholder’s proportionate ownership of the Company.
No
gain
or loss will be recognized by us as a result of the reverse stock split.
Required
Vote
The
affirmative vote of the holders of seventy-five percent (75%) of the outstanding
shares of our common stock present in person or represented by proxy at the
Meeting is required to approve the amendment to our Amended and Restated
Certificate of Incorporation. Abstentions and broker non-votes will have the
effect of a vote AGAINST the approval of the amendment to our Amended and
Restated Certificate of Incorporation.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR
THE
AMENDMENT TO OUR AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO EFFECT
A
REVERSE
STOCK SPLIT OF OUR COMMON STOCK.
OTHER
MATTERS
As
of the
date of this Proxy Statement, the Board of Directors does not intend to present
any other matter for action at the Meeting other than as set forth in the Notice
of Annual Meeting and this Proxy Statement. If any other matters properly come
before the Meeting, it is intended that the shares represented by the proxies
will be voted, in the absence of contrary instructions, in the discretion of
the
persons named in the proxy.
FORM
10-K
We
will provide, without charge, to each stockholder as of the Record Date, upon
our receipt of a written request of the stockholder, a copy of our Annual Report
on Form 10-K for the year ended December 31, 2007, including the financial
statements and schedules, as filed with the Securities and Exchange Commission.
Stockholders should direct the written request to Stamford Industrial Group,
Inc. c/o the Secretary at One Landmark Square, 21
st
Floor, Stamford, Connecticut 06901.
REQUIREMENTS
FOR SUBMISSION OF STOCKHOLDER PROPOSALS,
NOMINATION
OF DIRECTORS
AND
OTHER BUSINESS OF STOCKHOLDERS
Under
the
rules of the Securities and Exchange Commission, if a stockholder wants us
to
include a proposal in our Proxy Statement and Proxy Card for presentation at
our
2009 Annual Meeting, the proposal must be received by us at our principal
executive offices at One Landmark Square, 21
st
Floor,
Stamford, Connecticut 06901 by December 31, 2008 (or, if the 2009 Annual Meeting
is called for a date not within 30 calendar days before or after June 2, 2009,
within a reasonable time before we begin to print and mail our proxy materials
for the Meeting). The proposal should be sent to the attention of the Secretary
of Stamford Industrial Group, and must include the information and
representations that are set out in Exchange Act Rule 14a-8.
Under
our
Bylaws, and as permitted by the rules of the Securities and Exchange Commission,
certain procedures are provided that a stockholder must follow to nominate
persons for election as directors or to introduce an item of business at a
Meeting of our stockholders. These procedures provide that nominations for
director nominees and/or an item of business to be introduced at a Meeting
of
our stockholders must be submitted in writing to the Secretary of the Company
at
our principal executive offices. Any written submission by a stockholder
including a director nomination and/or item of business to be presented at
a
Meeting of our stockholders must comply with the procedures and such other
requirements as may be imposed by our Bylaws, Delaware law, the rules and
regulations of the Securities and Exchange Commission and must include the
information necessary for the Board to determine whether the candidate qualifies
as independent.
We
must
receive notice of the intention to introduce a director nomination or to present
an item of business at our 2009 Annual Meeting (a) not less than ninety (90)
days nor more than one hundred twenty (120) days prior to June 2, 2009 if our
2009 Annual Meeting is held within thirty (30) days before or after June 2,
2009; or (b) not later than the close of business on the later of (x) ninety
(90) days prior to June 2, 2009, or (y) the tenth (10
th
)
day
following the day on which the notice of Meeting was mailed or public disclosure
of the date of the Meeting was made , whichever occurs first, in the event
our
2009 Annual Meeting is not held within thirty (30) days before or after June
2,
2009.
Assuming
that our 2009 Annual Meeting is held on schedule, we must receive notice of
your
intention to introduce a director nomination or other item of business at that
Meeting not less than ninety (90) days nor more than one hundred twenty (120)
days prior to June 2, 2009. If we do not receive notice within the prescribed
dates, or if we meet other requirements of the Securities and Exchange
Commission rules, the persons named as proxies in the proxy materials relating
to that Meeting will use their discretion in voting the proxies when these
matters are raised at the Meeting.
In
addition, nominations or proposals not made in accordance herewith may be
declared by the Non-Executive Chairman to have not been properly brought before
the Annual Meeting and such nominations or proposals may be disregarded.
|
FOR
THE BOARD OF DIRECTORS
JONATHAN
LABARRE
SECRETARY
|
APPENDIX
A
CERTIFICATE
OF AMENDMENT
OF
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
STAMFORD
INDUSTRIAL GROUP, INC.
The
undersigned, Jonathan LaBarre, hereby certifies that:
1.
He
is the
Chief Financial Officer, Treasurer and Secretary of Stamford Industrial Group,
Inc., a Delaware corporation (the “Corporation”), the original Certificate of
Incorporation of which was filed with the Secretary of State of the State of
Delaware on July 3, 1996.
2.
The
first paragraph of Article IV of the Corporation’s Amended and Restated
Certificate of Incorporation is hereby amended and restated to read in its
entirety as follows:
“The
Corporation is authorized to issue two classes of stock to be designated common
stock (“Common Stock”) and preferred stock (“Preferred Stock”). The total number
of shares of stock which the Corporation shall have the authority to issue
is
One Hundred and Five Million (105,000,000) shares, consisting of One Hundred
Million (100,000,000) shares of Common Stock having a par value of $0.0001
per
share and Five Million (5,000,000) shares of Preferred Stock having a par value
of $0.0001 per share. Effective as of 5:00 p.m., Eastern Daylight Time, on
the
date that this Certificate of Amendment is filed with the Secretary of State
of
the State of Delaware, each outstanding [*] share of Common Stock shall be
combined and converted into one share of Common Stock, par value $0.0001 per
share. No fractional shares shall be issued and, in lieu thereof, any holder
of
less than one share of Common Stock shall be entitled to receive cash for such
holder’s fractional share based upon the fair market value of the Common Stock
as of the date that this Certificate of Amendment is filed with the Secretary
of
State of the State of Delaware, as such fair market value is determined by
the
Corporation’s Board of Directors. Whether or not the reverse stock split
provided above would result in fractional shares for a holder of record shall
be
determined on the basis of the total number of shares of Common Stock held
by
such holder of record at the time that the reverse stock split
occurs.”
The
second paragraph of Article IV of the Corporation’s Amended and Restated
Certificate of Incorporation is not amended by this Certificate of
Amendment.
3.
This
Certificate of Amendment has been duly adopted by the Board of Directors and
stockholders of the Corporation in accordance with Sections 242 and 228 of
the
General Corporation Law of the State of Delaware.
IN
WITNESS WHEREOF, the undersigned have executed this Certificate of Amendment
of
Amended and Restated Certificate of Incorporation on
this day of , 2008.
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|
|
|
STAMFORD
INDUSTRIAL GROUP, INC.
|
|
|
|
|
By:
|
|
|
Name:
Jonathan
LaBarre
|
|
Title:
Chief Financial Officer, Treasurer and Secretary
|
*
The
Certificate of Amendment filed with the Secretary of State of the State of
Delaware will include the specific number determined by the Board of Directors
to be in the best interests of the Corporation and its
stockholders.
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