SCHEDULE
14C
Information
Required in Information Statement
Information
Statement Pursuant to Section 14(c) of the Securities
Exchange
Act of 1934
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appropriate box:
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Preliminary
Information Statement
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Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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x
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Definitive
Information Statement
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SIMCLAR,
INC.
(Name
of Registrant as Specified in its Charter)
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Simclar,
Inc.
2230
West 77
th
Street
Hialeah,
Florida 33016
April
30,
2008
To:
Our Shareholders
From:
Samuel
J.
Russell
Subject:
I
nvitation
to the Simclar, Inc. 2008 Annual Meeting of Shareholders
Management
is extending its invitation to you to attend our annual meeting on Monday,
June
9, 2008. The annual meeting is being held at our executive offices located
at
2230 West 77th Street, Hialeah, Florida at 11:00 a.m. In addition to the formal
items of business to be addressed at the annual meeting, we will review the
major developments of 2007 and answer questions you may have concerning our
Company.
This
booklet includes the Notice of Annual Meeting and the Information Statement.
Proxies are not being solicited since a quorum exists for the meeting through
Simclar Group Limited’s 73.2% ownership of Simclar, Inc. The Information
Statement provides details as to quorum and voting requirements. The Information
Statement also describes the business we will conduct at the meeting,
specifically the election of seven directors, and provides information about
Simclar, Inc.
We
look
forward to seeing you at the annual meeting.
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Samuel
J. Russell
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Chairman
of the Board and
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Chief
Executive Officer
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SIMCLAR,
INC.
2230
West
77th Street
Hialeah,
Florida 33016
(305)
556-9210
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
TO
BE HELD JUNE 9, 2008
Dear
Shareholder:
The
Annual Meeting of Shareholders of Simclar, Inc. will be held at our executive
offices, located at 2230 West 77
th
Street,
Hialeah, Florida on Monday, June 9, 2008, at 11:00 a.m. local time, for the
following purposes:
1.
The
election of seven directors; and
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2.
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The
transaction of any other business that may properly be presented
at the
annual meeting.
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If
you
were a shareholder of record at the close of business on April 18, 2008, you
are
entitled to vote at the annual meeting.
Your
copy
of the Annual Report on Form 10-K of Simclar, Inc. for the year ended December
31, 2007 is enclosed.
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By
order of the Board of Directors
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Stephen
P. Donnelly
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Corporate
Secretary
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April
30,
2008
INFORMATION
ABOUT THE ANNUAL MEETING AND VOTING
Q:
Why
did you send me an Information Statement?
A:
Management of Simclar, Inc. is asking you to attend and vote at the 2008 annual
meeting. This Information Statement summarizes the information you need to
know
to vote judiciously.
Q:
Why
did you not send me a proxy?
A:
We did
not send you a proxy because a quorum already exists based upon the
approximately 73.2% ownership of our voting securities by Simclar Group Limited
(“Simclar Group”), our parent company.
WE
ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A
PROXY.
Q:
What
does a quorum mean?
A:
A
quorum means a majority of the outstanding shares. The annual meeting may only
proceed if a quorum is present at the meeting. A majority of the outstanding
shares will be present at the meeting through Simclar Group. At April 18, 2008,
the record date, there were 6,465,345 shares of Simclar, Inc. common stock
outstanding. Simclar Group owns 4,729,520 shares of our common stock or
approximately 73.2% of the shares entitled to vote. A shareholder list will
be
available at our executive offices in Hialeah, Florida at the meeting and for
10
days prior to the meeting for your review.
Q:
Who is
entitled to vote?
A:
Shareholders who owned our common stock at the close of business on April 18,
2008, the record date.
Q:
How
many votes do I have?
A:
Each
share of common stock is entitled to one vote. We are sending this Information
Statement, the attached Notice of Annual Meeting, and our 2007 Annual Report,
which includes our financial statements, on or about April 30, 2008, to all
shareholders entitled to vote.
Q:
What
am I voting on?
A:
Election of seven directors, Messrs. Samuel J. Russell, Barry J. Pardon, John
Ian Durie, A. Graeme Manson, Kenneth M. MacKay, M.D., and William J. Sim, and
Mrs. Christina M. J. Russell, each for a one year term.
Q:
How do
I vote?
A:
By
attending the annual meeting. At that time you will be given a ballot and you
may vote your shares. If your shares of our common stock are held in the name
of
a broker, bank or other nominee, you must bring an account statement or letter
from the nominee showing you were the beneficial owner of the shares on April
18, 2008, the record date.
Q:
Is my
vote confidential?
A:
Yes.
Only the inspectors of election and other of our employees assisting in tallying
the vote will have access to your vote and comments, unless you tell us to
disclose such information.
Q:
Who
counts the votes?
A:
We
appoint two persons to act as inspectors of election, who each take an oath
to
accept that responsibility and certify the voting to the Board.
Q:
What
does it mean if I receive more than one Information Statement?
A:
Your
shares of our common stock are probably registered in more than one name or
account. It would be appreciated if you would contact our transfer agent,
Continental Stock Transfer & Trust Company, 2 Broadway, New York, New York
10004 (Attention: Proxy Department) or by telephone at (212) 635-3654 and tell
them to put all your accounts registered in the same name at the same address;
and if there is more than one Simclar shareholder at that address, that you
have
no objection and would prefer only one Notice of Annual Meeting and information
statement be sent to that address for all persons holding Simclar common stock
at that address.
Q:
How
much common stock do officers and directors own?
A:
4,792,653 shares or approximately 74.1% of our common stock as of the record
date. This includes Simclar Group’s ownership of 73.2% (4,729,520 shares) of our
common stock, since Mr. Samuel Russell, our Chairman and Chief Executive
Officer, and Mrs. Christina M. J. Russell, a director, own 100% of the shares
of
Simclar Group.
Q:
Who
are the largest principal shareholders?
A:
Simclar Group is our largest shareholder, owning approximately 73.2% of our
shares as of the record date.
Q:
Who
sends out the Information Statement and Annual Report and what are the
costs?
A:
We are
sending out the Information Statement and Annual Report to
shareholders.
We
will
ask banks, brokers and other institutions, nominees and fiduciaries to forward
these materials to their principals and we will reimburse them for their
reasonable expenses in forwarding the materials. Simclar pays all expenses
of
preparing and delivering the Information Statement and Annual Report, including
printing, envelopes, mailing and similar out-of-pocket expenses.
Q:
Who is
eligible to submit a proposal for action at an Annual Meeting?
A:
To be
eligible, you must have continuously held at least $2,000 in market value,
or
1%, of our common stock for at least one year by the date you submit the
proposal. You must continue to hold your Simclar shares through the date of
the
meeting. Please remember that Simclar Group’s 73.2% ownership will determine the
outcome of any proposal.
Q:
When
are shareholder proposals due for the 2009 Annual Meeting?
A:
Shareholder proposals must be submitted in writing by January 2, 2009, to
Stephen P. Donnelly, Corporate Secretary, Simclar, Inc., 1784 Stanley Avenue,
Dayton, Ohio 45404. Any proposal should provide the reasons for it, the text
of
any resolution, and must comply with Rule 14a-8 of Regulation 14A of the proxy
rules of the SEC. Any stockholder proposal submitted outside the processes
of
Rule 14a-8 under the Securities and Exchange Act of 1934 for presentation at
our
2009 Annual Meeting will be considered untimely for purposes of Rule 14a-4
if
notice thereof is received by the Company after March 16, 2009.
PROPOSAL
Election
of Directors
Nominees
for election to a one-year term are:
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Name
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Age
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Position
with the Company
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Position
Held Since
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Samuel
J. Russell
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63
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Chairman
of the Board and
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2001
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Chief
Executive Officer
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Barry
Pardon
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56
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President
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1991
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and
Director
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1990
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John
Ian Durie
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51
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Director
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2001
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Christina
M. J. Russell
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63
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Director
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2001
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A.
Graeme Manson*
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48
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Director
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2004
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Kenneth
M. MacKay*
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61
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Director
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2004
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William
J. Sim*
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63
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Director
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2007
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*Member
of the Audit Committee.
The
Company does not have a nominating committee. Nominations for directors are
considered by the entire Board of Directors. Our directors take a critical
role
in guiding our strategic direction and oversee the management of our Company.
Board candidates are considered based on various criteria, such as their broad
based business and professional skills and experiences, a global business and
social perspective, concern for long term interests of shareholders, and
personal integrity and judgment. In addition, directors must have time available
to devote to Board activities and to enhance their knowledge of the
industry.
Accordingly,
we seek to attract and retain highly qualified directors who have sufficient
time to attend to their substantial duties and responsibilities to our Company.
Recent developments in corporate governance and financial reporting have
resulted in an increased demand for such highly qualified and productive public
company directors.
Our
Board
will consider the recommendations of shareholders regarding potential director
candidates to be elected at the 2009 Annual Meeting. In order for shareholder
recommendations regarding possible director candidates to be considered by
our
Board:
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such
recommendations must be provided to the Board c/o Stephen P. Donnelly,
Corporate Secretary, Simclar, Inc., 1784 Stanley Avenue, Dayton,
Ohio
45404, in writing by January 2,
2009;
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the
nominating shareholder must meet the eligibility requirements to
submit a
valid shareholder proposal under Rule 14a-8 of the Securities Exchange
Act
of 1934, as amended; and
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the
shareholder must describe the qualifications, attributes, skills
or other
qualities of the recommended director
candidate.
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The
affirmative vote of a plurality of the shares of common stock represented at
the
meeting is required to elect the nominees as directors. Abstentions and votes
withheld for any nominee will have the same effect as a vote against a
director’s election.
Simclar
Group owns 4,729,520 shares or approximately 73.2% of the voting stock of our
Company, and intends to vote all of its shares in favor of the election of
the
seven nominees of management as directors, thereby assuring their
election.
The
nominees have consented to serve on the Board. Each nominee has served as a
director of our Company during the past year. If any nominee is unable to serve
for any reason, Simclar Group’s controlling block of our common stock will be
voted for any substitute nominee as designated by the Board.
For
more
information about the directors and executive officers see “Information About
Directors and Executive Officers.”
Other
Matters to be Presented to Shareholders
Management
is not currently aware of any other matter to be presented for action at the
annual meeting other than the election of seven directors, Proposal No. 1 in
the
accompanying Notice of Annual Meeting of Shareholders, and management does
not
presently intend to bring any other matter before the meeting.
INFORMATION
ABOUT DIRECTORS AND EXECUTIVE OFFICERS
The
Board of Directors
The
Board
of Directors oversees our business and affairs and monitors the performance
of
management. In accordance with corporate governance principles, our Board does
not involve itself in our day-to-day operations. The Board is kept knowledgeable
and informed through discussions with the Chairman, other directors, executives
and advisors (counsel, outside auditors, bankers and other consultants), by
reading reports, contracts and other materials sent to them and by participating
in Board and committee meetings.
The
Board
met four times during 2007, including quarterly and special meetings. No
director attended fewer than 75 percent of the total number of meetings of
the
Board and committees of which he or she was a member. It is our policy that
all
directors attend the Annual Meeting of Shareholders. However, conflicts and
unforeseen events may prevent the attendance of a director, or directors. One
member of our Board of Directors attended the 2007 Annual Meeting of
Shareholders.
The
Board
has adopted the definition of “independence” as described under the
Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”) Section 301, Rule 10A-3 under the
Securities Exchange Act of 1934 (the “Exchange Act”) and Nasdaq Rules 4200 and
4350. Our Board of Directors has determined that each of Messrs. Manson, MacKay
and Sim meet the independence requirements.
We
are a
“Controlled Company” as that term is defined by the Nasdaq listing standards. A
Controlled Company is a company of which more than 50% of the voting power
is
held by an individual, group or other company. Currently, Simclar Group holds
approximately 73.2% or our voting power. Under Nasdaq listing standards, a
Controlled Company does not need to maintain a nominating committee, a
compensation committee or a majority of independent directors on its board.
However, independent directors of a Controlled Company are required to hold
meetings at which only independent directors are present.
Directors
Standing For Election
Samuel
J. Russell
has
served as managing director and principal shareholder of Simclar International
Limited since April 1976 and of Simclar Group Limited since June 2001. Since
May
28, 1992, Mr. Russell has served as a director of Pioneer Security Systems
Limited, a Scottish company located in Dunfermline, Scotland, which provides
home security services for residential properties owned by City Councils in
Scotland and England. Since June 8, 2004 he has served as a director of Russell
Security Limited, the newly formed parent company of Pioneer Security Systems
Limited. Since June 15, 1998, he has served as a director of Russmarr Limited,
a
Scottish company located in Dunfermline, Scotland, which is engaged in the
development of electronic alarms for use in residential properties. Since June
27, 2001, he has served as our Chairman of the Board and Chief Executive
Officer. On March 7, 2005, a subsidiary of Simclar Group, Simclar Seating
Technologies Limited, acquired UP Mex Limited, a company involved in the design,
manufacture and supply of components for office furniture. Mr. Russell has
served as a director of these companies since that date. On February 24, 2006,
Simclar Interconnect Technologies, Inc. and Simclar Interconnect Technologies
Limited completed the acquisition from Northrop Grumman Corporation of certain
assets associated with the backplanes assembly business of its Interconnect
Technologies Division together with the equity of Litton Electronics (Suzhou)
Co. Ltd. Mr Russell has been a director of Simclar Interconnect Technologies
Limited since November 16, 2005, a director of Simclar Interconnect
Technologies, Inc. since December 8, 2005 and a director of Simclar Electronics
(Suzhou) Co. Ltd since December 23, 2005. He is the husband of Christina
Margaret Janet Russell.
Barry
Pardon
joined
our Company in November 1980 as national sales manager and initiated the
independent manufacturer representatives’ sales force. Mr. Pardon became Vice
President of Marketing in 1981, was appointed Executive Vice President
(Marketing) in 1988, and was appointed President in November 1991.
John
Ian Durie
was a
partner in Price Waterhouse, Edinburgh, Scotland from July 1, 1989 through
February 28, 1995 and a partner in Rutherford Manson Dowds, Chartered
Accountants, from March 1, 1995, through June 30, 1999, when the firm merged
with Deloitte & Touche, Edinburgh, Scotland. He served as a partner at
Deloitte & Touche from that date until joining Simclar Group Limited as
Finance Director on June 1, 2001. Mr. Durie has also served as a director of
Simclar International Limited since that date. Mr. Durie has served as a
director of Simclar Seating Technologies Limited since March 7, 2005. Mr. Durie
has been a director of Simclar Interconnect Technologies Limited since November
16, 2005, a director of Simclar Interconnect Technologies, Inc. since December
8, 2005, and a director of Simclar Electronics (Suzhou) Co. Ltd since December
23, 2005.
Christina
Margaret Janet Russell
has
served as a director of Simclar International Limited since April 1976 and
of
Simclar Group Limited since June 2001. She has served as a director of Pioneer
Security Systems since May 28, 1992, and as a director of Russmarr Limited
since
June 15, 1998. Mrs. Russell has served as a director of Simclar Seating
Technologies Limited since March 7, 2005. Mrs. Russell has been a director
of
Simclar Interconnect Technologies Limited since November 16, 2005, and a
director of Simclar Electronics (Suzhou) Co. Ltd since December 23, 2005. She
is
the wife of Samuel J. Russell.
Alan
Graeme Manson
is
a
chartered accountant in Scotland and was a founding partner of Rutherford Manson
Dowds, Chartered Accountants, from September 1986 to June 1999, when the firm
merged with Deloitte & Touche. He served as a partner at Deloitte &
Touche until October 2000. Since retirement from Deloitte & Touche, Mr.
Manson has taken on the role of chairman and non-executive director of a number
of UK private companies.
Kenneth
Mackenzie MacKay, M.D.
has been
a general medical practitioner since 1975 and was the senior partner in the
Hospital Hill Medical Group, Dunfermline, Scotland, from 1980 until he retired
in April 2007. In that role, in addition to his medical work with his patients,
he was also responsible for the financial and administrative affairs of the
medical group.
William
J. Sim
is the
President, CEO and founder of Midlothian Associates Inc., a specialty consulting
firm that is dedicated to providing management consulting services, mainly
to
the energy, utility and construction industries. Mr. Sim was formerly Senior
Vice President of Pepco Holdings, Inc. (PHI), a regional energy holding company,
and President and Chief Executive Officer of its subsidiaries Potomac Electric
Power Company (Pepco) and Atlantic City Electric (ACE). Mr. Sim joined Pepco
in
1977 as Manager, Generating Construction. He served as President and Chief
Operating Officer of the American Energy Division of Pepco’s subsidiary Potomac
Capital Investment Corporation from 1987 to 1991. Mr. Sim was elected Vice
President, Operations and Construction, Pepco, in 1991, and became Vice
President, Power Supply and Delivery, in 1994. He became Group Vice President,
Generation, in 1997. In 2001, he became Senior Vice President, Power Delivery,
responsible for all aspects of transmission and delivery of electricity to
Pepco’s customers. Mr. Sim was born in Edinburgh, Scotland, and is a 1968
graduate of the University of Glasgow in Scotland. He holds a master’s degree in
business administration from Loyola College in Maryland. Mr. Sim is a member
of
the Board of Directors of Williams Industries, Inc. (NasdaqCM:WMSI), where
he
also serves on the Audit Committee.
Other
Executive Officer
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Name
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Age
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Position
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Held
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Stephen
P. Donnelly
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40
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Chief Financial Officer,
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2008
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Treasurer and Secretary
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Stephen P.
Donnelly
joined
Simclar as its Chief Financial Officer, Treasurer and Secretary on March 21,
2008. Mr. Donnelly has served as Group Controller of Simclar’s parent
corporation, Simclar Group Limited, since March 2007. Prior to accepting his
position as Group Controller of Simclar Group, Mr. Donnelly held the position
of
Finance Director for several subsidiary companies of Simclar Group located
in
the United Kingdom, United States and China. Mr. Donnelly has previously worked
with the Company as executive investigator by appointment of the audit committee
in relation to the 2005 restatement exercise, and executive sponsor for the
Company’s 2007 Sarbanes Oxley project. Mr. Donnelly is a member of the Institute
of Chartered Accountants of Scotland, training with Ernst & Young and
holding senior posts with the Energy division of Babcock International PLC,
before being appointed as Finance Director of the Fullarton Computer Industries
Group, part of the Electronics Division of Laird Group plc, which was acquired
by Simclar Group in 2002.
Board
Committees
We
have
an Audit Committee consisting of Messrs. Manson, MacKay and Sim, each of whom
is
an independent director as defined under Section 301 of the Sarbanes-Oxley
Act,
Rule 10A-3 under the Exchange Act and Nasdaq Rules 4200 and 4350. Our Board
of
Directors has determined that Mr. Manson qualifies as an “audit committee
financial expert”
under
applicable SEC and Nasdaq Stock Market rules, and that he is “independent,” as
that term is defined under
Nasdaq
Rules 4200 and 4350
.
The
Audit Committee met four times in 2007, sometimes alone, with management, and
with our independent auditors. The Audit Committee is responsible for selecting
the firm of independent accountants to serve our Company, reviewing fees,
services and results of the audit by such independent accountants, reviewing
our
accounting books and records and reviewing the scope, results and adequacy
of
our internal audit control procedures. The Audit Committee reviewed our annual
and quarterly results, the Audit Committee Report (see below), and our
disclosure filings, before filing.
Shareholder
Communications
Shareholders
may send communications to our Board of Directors, or to individual directors,
by mailing communications in writing to c/o Stephen P. Donnelly, Corporate
Secretary, Simclar, Inc., 1784 Stanley Avenue, Dayton, Ohio 45404. Any
correspondence addressed to the Board of Directors or to any one of the
Company’s directors in care of the Company’s Corporate Secretary will be
forwarded to the addressee.
Report
of the Audit Committee
Under
the
guidance of its written Amended and Restated Audit Committee Charter adopted
in
March 2004, the Audit Committee is charged with overseeing the accounting,
reporting practices, and the quality and integrity of financial reports of
our
Company. A copy of the Amended and Restated Audit Committee Charter is posted
on
the Company’s website at www.simclar.com.
The
Board
of Directors evaluated the independence of each member of the Audit Committee.
As part of its evaluation, the Board of Directors determined, in the exercise
of
its business judgement, that Messrs. Manson, MacKay, and Sim are independent
under Rule 4350(d) of the Nasdaq Stock Market Listing Standards and are
financially literate, each in his own capacity.
Management
has the primary responsibility for the system of internal controls and the
financial reporting process. Our independent accountants have the responsibility
to express an opinion on the financial statements based on an audit conducted
in
accordance with generally accepted auditing standards. The Audit Committee
has
the responsibility of monitoring and overseeing these processes.
In
fulfilling its responsibilities, the Audit Committee selected Grant Thornton
LLP
as the Company’s independent accountants for purposes of auditing our financial
statements for 2007. Grant Thornton LLP has discussed with the Audit Committee
and provided written disclosures and the required letter to the Audit Committee
as to (1) Grant Thornton LLP’s independence as required by the Independence
Standards Board Standard No. 1 (Independence Standards Board Standard No. 1,
Independence
Discussions with Audit Committees)
,
as
adopted by the Public Company Accounting Oversight Board in Rule 3600T, and
(2)
the matters required to be communicated under generally accepted auditing
standards in accordance with Auditing Standard No. 61 (SAS 61), as amended
(AICPA,
Professional
Standards
,
Vol. 1
AU section 380), as adopted by the Public Company Accounting Oversight Board
in
Rule 3200T.
The
Audit
Committee reviewed with our Chief Financial Officer and other key members of
our
management and with our independent auditors the overall scope and specific
plans for their audit, the results of their examinations, their evaluation
of
our internal controls, and the overall quality of our accounting and financial
reporting.
The
Audit
Committee reviewed and discussed with management and the independent accountants
our audited financial statements.
Following
these actions, the Audit Committee recommended to the Board that the audited
financial statements be included in our Annual Report on Form 10-K for the
year
ended December 31, 2007, for filing with the SEC.
Based
upon its work and the information received in the inquiries outlined above,
the
Audit Committee is satisfied that its responsibilities under the charter for
the
period ended December 31, 2007, were met and that the financial reporting and
audit processes of our Company are functioning effectively.
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The
Audit Committee
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A.
Graeme Manson
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Kenneth
M. MacKay, M.D.
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William
J. Sim
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INDEPENDENT
PUBLIC ACCOUNTANTS
The
Audit
Committee selected Grant Thornton LLP to serve as the Company’s registered
independent public accounting firm for the fiscal year ending December 31,
2007.
Representatives of Grant Thornton LLP are not expected to attend the Annual
Meeting. If representatives from Grant Thornton LLP attend the Annual Meeting
they will be given the opportunity to make a statement if they desire and they
will be available to respond to appropriate questions.
On
November 30, 2006, the Company terminated its relationship with its independent
registered public accounting firm, Battelle & Battelle, LLP, by mutual
agreement, which decision was approved by the Audit Committee. On the same
date,
the Audit Committee approved the engagement of Grant Thornton LLP as the
Company’s independent registered public accounting firm for the fiscal year
ending December 31, 2006. This matter was previously reported by us on our
Current Report on Form 8-K dated November 30, 2006, filed with the Securities
and Exchange Commission on November 30, 2006. Grant Thornton LLP served as
our
independent accountants from November 30, 2006, through the end of the 2006
fiscal year.
In
August
2006, during the review and analysis of results of operations during the second
quarter of 2006 and the Company’s financial condition at June 30, 2006,
management discovered certain accounting errors associated with operations
at
the Brownsville, Texas, and Matamoros, Mexico facilities of the company’s
consolidated subsidiary, Simclar (Mexico), Inc. As a result of the discovery
of
these errors, Battelle & Battelle, LLP, concluded that our disclosure
controls and procedures were not effective.
The
control deficiencies identified by our management, which in combination,
resulted in a material weakness, were (a) misstatement in amounts reported
in a
consolidated subsidiary, (b) processes that allowed material errors to occur
and
go undetected on a timely basis, and (c) the failure of key accounting managers
to identify the errors and take appropriate corrective actions. The control
deficiencies were determined to be a material weakness due to the actual
misstatements identified, the potential for additional material misstatements
to
have occurred as a result of the deficiencies, and the lack of other mitigating
controls. This material weakness led to a restatement of our consolidated
financial statements for 2005 and for the first quarter of 2006.
In
order
to remedy these material weaknesses, during the third and fourth quarters of
2006 we made significant remedial efforts to increase the effectiveness of
our
internal controls. Our remedial efforts included:
|
|
·
|
Identification
and replacement of key accounting staff that had failed in their
responsibility to identify these control weaknesses and take corrective
action.
|
|
|
·
|
Re-engineering
the operational and financial processes that allowed the mistakes
to occur
and go undetected and ultimately led to the misstatements in the
financial
reports. Specific areas of concentration included, but were not limited
to, returned goods from customers, returned goods to vendors, proper
shipping cutoff procedures to assure recording of sales and cost
of goods
sold in the proper accounting periods, and timely reconciliation
of
intercompany shipments and financial
transactions.
|
|
|
·
|
Correction
of the standard cost system and training the employees responsible
for its
maintenance.
|
|
|
·
|
Addressing
specific skill deficiencies within the accounting staff by both
providing
counseling and training, rearranging of responsibilities, or making
staff
changes.
|
As
a
result
of these remedial efforts, management concluded that our controls were effective
as of December 31, 2006.
FEES
OF THE INDEPENDENT AUDITORS FOR THE
FISCAL
YEAR ENDED DECEMBER 31, 2007
Audit
Fees.
The
aggregate fees billed for professional services rendered by Grant Thornton
LLP
for the audit of our annual consolidated financial statements for 2007 were
$225,000, and for 2006 were $210,000 (including direct engagement expenses).
The
aggregate fees billed by Grant Thornton LLP for the reviews of the financial
statements included in our Quarterly Reports on Form 10-Q for 2007 were $55,890
(including direct engagement expenses). Additionally, the aggregate fees billed
for professional services rendered by Battelle & Battelle, LLP for the
review of the financial statements included in our Quarterly Reports on Form
10-Q for 2006 were $140,000.
Audit-Related
Fees.
The
aggregate fees billed by
Grant
Thornton LLP
for
audit-related services rendered for us were $0 for both 2007 and 2006. The
aggregate fees billed by
Battelle
& Battelle, LLP
for
audit-related services rendered for us and our subsidiaries in 2006 were
$34,300. Audit-related fees generally include fees for benefit plan audits,
consultation on the Company’s internal control system, due diligence services,
etc.
Tax
Fees.
The
aggregate fees billed by
Grant
Thornton LLP
for
tax-related services rendered for us and our subsidiaries in 2007 were $52,000,
and in 2006 were $31,500. The aggregate fees billed by
Battelle
& Battelle, LLP
for
tax-related services rendered for us and our subsidiaries were $30,000 for
2006.
The tax-related services were all in the nature of tax compliance and tax
planning.
All
Other Fees.
The
aggregate fees billed for services rendered to us by Grant Thornton LLP, other
than the audit services, audit-related services, and tax services, were $0
for
both
2007 and 2006
.
The
aggregate fees billed for services rendered to us by Battelle & Battelle,
LLP, other than the audit services, audit-related services, and tax services
were $0 for 2006.
Pre-approval
Policy.
Our
Audit Committee is required to pre-approve all auditing services and permitted
non-audit services (including the fees and terms thereof) to be performed for
us
by our independent auditor or other registered public accounting firm, subject
to the
de
minimis
exceptions for non-audit services described in Section 10A(i)(1)(B) of the
Securities Exchange Act of 1934 that are approved by our Audit Committee prior
to completion of the audit.
EXECUTIVE
COMPENSATION
The
following information provides discussion, analysis and data tables regarding
the compensation of our named executive officers (“NEOs”), who are those
officers listed in our Summary Compensation Table below.
Compensation
Discussion and Analysis
We
have
prepared this Compensation Discussion and Analysis (“CD&A”) to provide you
with our perspective on executive compensation so that you may understand our
compensation policies and our decisions regarding compensation for our NEOs.
We
recommend that you review the executive compensation table below in conjunction
with this CD&A. Unless otherwise noted, the policies and other information
in this CD&A apply to all of our NEOs. Our CD&A covers the following
topics:
|
|
·
|
the
role of our Board of Directors in setting executive
compensation;
|
|
|
·
|
our
compensation philosophy and its underlying principles - including
the
objectives of our executive compensation program and what it is designed
to reward;
|
|
|
·
|
our
process for setting executive compensation;
and
|
|
|
·
|
the
elements of our executive compensation program - including a discussion
of
why we choose to pay each element of compensation, how we determine
the
amount of such element, and how each element fits into our overall
compensation objectives and “total compensation” for our
NEOs.
|
We
are a
Controlled Company (as discussed above under the heading Information About
Directors and Executive Officers), and under Nasdaq listing standards a
Controlled Company does not need to maintain a separate compensation committee.
Compensation of our NEOs is considered by the entire Board of Directors. The
Board has the authority and responsibility to:
|
|
·
|
review
and discuss with management the disclosures in the CD&A to be included
in the annual information statement and any other regulatory filings,
and
make a recommendation as to whether such disclosures shall be included
in
the appropriate filing;
|
|
|
·
|
review
and approve on an annual basis the corporate goals and objectives
with
respect to the President, evaluate the President’s performance in light of
such goals and objectives at least once a year, and based on such
evaluation, set the President’s annual
compensation;
|
|
|
·
|
review
and approve on an annual basis the evaluation process and compensation
structure for our other executive officers and to evaluate and approve
the
annual compensation for such executive
officers;
|
|
|
·
|
administer
our compensation programs; and
|
|
|
·
|
determine
the compensation arrangements with non-employee
directors.
|
The
Board
has the sole authority, to the extent it deems necessary or appropriate, to
retain any compensation consultant to assist in the evaluation of executive
compensation and has the sole authority to approve any such firm’s fees. The
Board did not hire any outside consultants to assist in the evaluation of
executive compensation for 2007. The Board also has the authority to obtain
the
advice and assistance from internal or external legal, accounting or other
advisors, and may request any officer or employee of our Company, our outside
counsel or registered independent public accounting firm to attend a meeting
of
the Board or meet with any member of, or consultants to, the Board.
The
Board
meets as often as its members deem necessary to change its duties and
responsibilities. Generally, the Board receives and reviews materials in advance
of each meeting. These materials include information that management believes
will be helpful to the Board as well as materials that the Board has
specifically requested.
Compensation
Philosophy and Objectives
The
philosophy of the Board is to make compensation decisions based on an executive
compensation program that is designed to meet the following objectives:
|
|
·
|
to
attract and retain qualified key
executives;
|
|
|
·
|
to
reward, reinforce and provide incentives for individual performance
and
financial results; and
|
|
|
·
|
to
align our NEOs’ financial interests with our stockholders’ financial
interests.
|
As
a
result, we have designed our executive compensation program to attract and
retain exceptional executives who seek a long-term association with us and
who
enjoy the challenge of pay for performance. Annual base salary increases and
bonuses have been elements of our total compensation package that have been
“at-risk” or variable depending on the performance of our NEOs.
As
part
of our philosophy, we also believe that total compensation and accountability
should generally increase with position and responsibility. Among our NEOs,
individuals with a greater ability to impact the achievement of our performance
goals bear a greater portion of the risk if goals are not achieved and reap
a
greater reward if goals are achieved.
Responsibilities
of Chairman of the Board, Chief Executive Officer and
President
Samuel
J.
Russell, Chairman of the Board and Chief Executive Officer, and Barry J. Pardon,
President and director, who have been affiliated with the Company for 7 years
and 28 years, respectively, are chiefly responsible for our
performance.
Mr.
Pardon has been one of the motivating forces behind our stability, implementing
efficiency programs, expansion of products, services and customer base, and
keeping us current with technological changes in the industry. He, together
with
Mr. Russell, direct our operations and continuously seek new areas of
growth.
The
Board
considers all these factors in evaluating the performance and setting the
compensation of Mr. Pardon as President. The Board also considered the direction
of our operations and the establishment and implementation of our business
strategy.
Compensation
Tax Philosophy
Internal
Revenue Code Section 162(m) permits deductions by any publicly held corporation
for compensation paid to a “covered employee” in excess of $1,000,000 per year
only if such compensation is performance based. Generally, we intend that
compensation paid to covered employees shall be deductible to the fullest extent
permitted by law. We intend to retain the flexibility necessary, however, to
provide total compensation in line with competitive practices, our compensation
philosophy, and our best interests. Although the Committee does not believe
that
Section 162(m) will impact our Company because the current level of compensation
for each of our executive officers is well below the $1,000,000 salary
limitation, we may from time to time pay compensation to our executive officers
that may not be deductible. There were no amounts that were non-deductible
in
2007.
Board
of Directors Process for Determining Executive
Compensation
A
substantial amount of the Board’s annual cycle of work regarding executive
compensation relates to the determination of compensation for our executive
officers, including our President. Generally, in or prior to the first quarter
of our fiscal year, the Board makes determinations of base cash compensation
and
discretionary bonuses, if any. For a discussion of each individual element
of
compensation and how it is specifically determined, you should refer to
“Compensation Program Elements” below.
Although
many compensation decisions are made in the first quarter of the fiscal year,
our compensation planning process is not a rigid yearly process with fixed
beginning and end points. Rather, compensation decisions are designed to promote
our compensation philosophy and principles. The Board believes that evaluation
of executive performance, business and succession planning, and consideration
of
our business environment are year-round processes and the Board members monitor
these as such.
During
this process of determining executive compensation, the Board reviews and
approves any new corporate goals and objectives with respect to compensation
for
our President. In light of the established goals and objectives the Board
evaluates the performance of the President and, based upon these evaluations,
sets the President’s compensation. The Board also reviews and approves on an
annual basis the evaluation and compensation structure for the Company’s other
executive officers, including approval of salary and bonus. The President does
not participate in decisions affecting his own compensation. However, the
President does participate in decisions affecting the compensation of other
executive officers of the Company in his capacity as a director.
Compensation
Program Elements
In
2007,
each our NEOs was eligible to receive one or more of the following the elements
of compensation:
·
base
pay;
·
bonus;
·
special
awards in recognition of extraordinary efforts and achievements;
·
retirement
benefits; and
·
health
and welfare benefits.
The
Board
carefully considered and chose each compensation program element as a critical
component in a comprehensive “total compensation” package. Each element is
intended to reward and motivate executives in different ways consistent with
our
overall compensation principles and philosophy. Each of the elements have a
critical relationship with one another with each focusing and rewarding
different areas. These elements are necessary for us to achieve our compensation
program objectives.
(1)
Base
Pay
:
Base
pay
is also referred to as salary. Base pay is the most fundamental of all our
compensation program elements. Providing a competitive salary to our NEOs is
essential to helping us attract and retain qualified executives.
Base
pay
for our NEOs is generally set annually taking into consideration our sales
and
profit growth, overall individual performance, position with and responsibility
to our Company and pay levels for executive officers of corporations of similar
size. The Board utilizes, as a reference, up-to-date information on compensation
practices of other companies. The Board considers these factors subjectively
in
the aggregate. Because the Board believes that each of these factors is
significant and the relevance of each factor may vary depending on the duties
and responsibilities of each executive officer, the Board does not assign a
formula weight to any single factor in determining a base pay increase. Instead,
the Board examines each factor in the context of individual and Company
performance and business needs, internal pay equity where applicable, and
incumbent pay history.
(2)
Bonus
:
In
addition to base pay, the Company’s NEOs are eligible to receive an annual
bonus. The amount of such annual bonus, if any, is determined entirely at the
discretion of the Chairman and Chief Executive Officer of the Company. The
Chairman and Chief Executive Officer of the Company has not historically
received a bonus, and any future bonus paid by the Company to the Chairman
and
Chief Executive Officer would be considered and approved by the Board. The
determination of the amount of any bonus will take into account the financial
performance of the Company in its most recent fiscal year and the performance
of
the executive in his role with the Company during the same period. The Company
pays such bonuses, if any, in cash.
(3)
Special
Awards
:
Special
awards may be granted from time to time in recognition of extraordinary efforts
and achievements, as well as prospective contributions and services. Such awards
may arise based upon an executive’s extraordinary efforts in accomplishing
expansion, acquisitions, increasing market share and similar events. The extent
to which we make awards in these situations is evaluated by the Board on a
case
by case basis.
(4)
All
Other Compensation
:
The
all
other compensation category in our Summary Compensation Table primarily consists
of the annual employer match into the 401(k) plan, and automobile and related
expenses paid by the Company on behalf of Mr. Pardon.
(a)
401(k)
plan
:
We
sponsor a qualified retirement and 401(k) plan for eligible employees. This
plan
allows NEOs to defer a portion of their total cash compensation (up to IRS
limits) into this retirement account on a pre-tax basis. We provide a match
of
50% of each NEOs contribution, up to a total amount equal to 4% of base
pay.
(b)
Employment
agreements
:
In
an
effort to attract and retain his services, we have entered into an employment
agreement with Mr. Pardon. For a discussion of the agreement, please refer
to
“Agreements with NEOs and Potential Payments upon Termination and Change of
Control” below.
Summary
Compensation Table
The
following table shows the compensation paid by the Company to each of the NEOs
for the 2007 fiscal year. For a discussion of the various elements of
compensation provided in the table below, please refer to the discussion of
our
various compensation elements in our Compensation Discussion & Analysis
under the heading “Compensation Program Elements” above.
SUMMARY
COMPENSATION TABLE FOR FISCAL YEAR 2007
|
Name
and Principal Position
|
|
Year
|
|
Salary ($)
|
|
Bonus ($)
|
|
All Other
Compensation ($)
|
|
Total ($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Barry
Pardon,
|
|
|
2007
|
|
|
140,000
|
|
|
30,000
|
|
|
7,020
|
(1)
|
|
177,020
|
|
|
President
|
|
|
2006
|
|
|
130,055
|
|
|
30,441
|
|
|
6,297
|
(1)
|
|
166,793
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marshall
W. Griffin (2)
|
|
|
2007
|
|
|
115,000
|
|
|
—
|
|
|
2,302
|
(1)
|
|
117,302
|
|
|
Chief
Financial Officer,
|
|
|
2006
|
|
|
99,522
|
|
|
15,000
|
|
|
1,150
|
(1)
|
|
115,672
|
|
|
Treasurer
and Secretary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Samuel
J. Russell,
|
|
|
2007
|
|
|
120,000
|
|
|
—
|
|
|
—
|
|
|
120,000
|
|
|
Chairman
and Chief
|
|
|
2006
|
|
|
120,000
|
|
|
—
|
|
|
—
|
|
|
120,000
|
|
|
Executive
Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
______________________
|
(1)
|
Includes:
(a) automobile and related expenses in the amount of $3,126 for 2007
and
$3,276 for 2006, paid by us on behalf of Mr. Pardon; (b) life insurance
premiums in the following amounts: $420 for 2007 and $420 for 2006,
paid
by us on behalf of Mr. Pardon; and (c) matching contributions made
under
the Company’s 401(k) plan in the following amounts: $3,474 for 2007 and
$2,601 for 2006 contributed on behalf of Mr. Pardon; and $2,302 for
2007
and $1,105 for 2006 contributed on behalf of Mr. Griffin.
|
|
(2)
|
On
March 21, 2008, the Board of Directors of the Company appointed Stephen
P.
Donnelly as Chief Financial Officer, Treasurer and Secretary of the
Company to fill vacancies created by the resignation of Marshall
W.
Griffin.
|
Employment
Agreements with NEOs and Payments upon Termination or Change in
Control
We
have
entered into an employment agreement, dated April 24, 2008, with Mr. Pardon.
The
employment agreement has a two year term, which ends December 31, 2009.
Effective as of January 1, 2008, the employment agreement provides for a base
annual salary of $147,000, plus a performance bonus at the discretion of the
Chairman and Chief Executive Officer. The employment agreement also provides
for
Mr. Pardon’s continued participation in our employee benefit programs and other
benefits as described in the employment agreement, and for the reimbursement
of
automobile, travel and entertainment expenses incurred by Mr. Pardon on behalf
of the Company. Termination of the agreement may occur: (i) as the result of
the
expiration of the term; (ii) upon death of Mr. Pardon; (iii) upon Mr. Pardon’s
disability; or (iv) upon written notice by the Company for cause.
In
the
event of termination of employment: (a) by reason of death during the term;
or
(b) by our Company without cause (as defined below), we shall provide payment
to
the executive equal to one years salary, as his salary is at the date of
termination, as severance pay.
For
purposes of the employment agreement, the term “cause” means:
·
conviction
of a crime;
·
failure
to carry out the policies of the Company;
·
persistent
absenteeism;
·
felonious
act or other dishonest practice;
·
non-performance
of responsibilities and obligations to the Company;
·
breach
of
the provisions of the employment agreement;
·
gross
misconduct or neglect whether by commission or omission; or
|
|
·
|
conduct
prejudicing or tending to bring himself or the Company or its subsidiaries
or affiliates into contempt or disrepute, or similar
cause.
|
In
the
event of termination of the agreement other than by the Company without cause
or
upon the death of the executive during the term, the Company is not required
to
pay any severance to Mr. Pardon, or any other sum except for his base pay to
the
date of termination.
The
employment agreement also contains non-competition covenants. These covenants
provide that Mr. Pardon may not compete with the Company for one year from
the
date of his termination. Additionally, these covenants prohibit Mr. Pardon
from
calling upon our customers or suppliers, diverting our customers, services,
or
products, or disclosing any trade secrets.
Outstanding
Equity Awards
We
did
not make any equity awards during the year ended December 31, 2007.
Additionally, no NEO exercised an outstanding equity award in the year ended
December 31, 2007. As of December 31, 2007, we had no outstanding equity
awards.
Equity
Compensation Plan Information
We
currently have no equity compensation plans or arrangements. There are no shares
of our common stock issuable upon the exercise of any options or other rights
under any equity compensation plan or arrangement.
Director
Compensation
No
standard arrangements exist for compensating directors for their services as
directors, or for participating on any committee. During the fiscal year ended
December 31, 2007, Simclar Group made payments on behalf of the Company in
the
amount of £3,000 (equal to approximately US$ 5,944) to Kenneth MacKay, and
£5,000 (equal to approximately US$ 9,906) to A. Graeme Manson in consideration
for their service as members of our Audit Committee. The Company paid $6,450
to
William J. Sim in consideration for his service as a member of our Audit
Committee. The Company made a payment to Simclar Group in the amount of $15,850
as reimbursement for the payments made on behalf of the Company to Messrs.
MacKay and Manson. We reimburse directors for travel and related out-of-pocket
expenses incurred in attending shareholder, Board and committee meetings, which
expenses have been minimal.
The
table
below shows the compensation earned by each of the Company’s directors during
the fiscal year ended December 31, 2007:
DIRECTOR
COMPENSATION FOR 2007
|
Name
|
|
Fees earned in cash ($)
|
|
|
|
|
|
|
|
A.
Graeme Manson
|
|
|
9,906
|
|
|
Kenneth
M. MacKay, M.D.
|
|
|
5,944
|
|
|
William
J. Sim
|
|
|
6,450
|
|
|
Samuel
J. Russell
|
|
|
0
|
|
|
Barry
J. Pardon
|
|
|
0
|
|
|
John
Ian Durie
|
|
|
0
|
|
|
Christina
M. J. Russell
|
|
|
0
|
|
CODE
OF ETHICS
We
have
adopted a code of business conduct and ethics that applies to all employees,
including our Chief Executive Officer and Chief Financial Officer. The code
of
business conduct and ethics is posted on our website at
www.simclar.com
.
The
code of conduct and ethics may also be obtained free of charge by writing to
Simclar, Inc., Attn: Chief Financial Officer,
1784
Stanley Avenue, Dayton, Ohio 45404
.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
At
December 31, 2006, the Company had a net payable to Simclar Group and certain
of
its subsidiaries and related parties of approximately $1,344,000. This amount
included an ending net balance payable to Simclar Group of $2,094,000,
bearing an annual interest rate of LIBOR plus 1.5%, and approximately $240,000
of interest charge accrued during the year. At December, 31 2007, the Company
had a net receivable due from Simclar Group and certain of its subsidiaries
and
related parties of $905,000, including an ending net amount due from
Simclar Group of $630,000, against which interest receivable of $30,000 was
earned during the year. There is no fixed repayment schedule, and this
obligation will be repaid in the amounts and at the times agreed between Simclar
Group and the Company.
On
August
12, 2005, the Company entered into a management services agreement with Simclar
Group, effective July 17, 2005. The agreement originally had a term of 2 years.
Effective July 17, 2007, we amended the agreement to extend the term to July
17,
2008. Under the terms of the agreement, Simclar Group will provide management
services, including but not limited to financial, administrative, business
development and operational matters, for a fee of $40,000 per month. The amount
of expenses covered under the service agreement totaled $480,000 in
2007.
Effective
February 24, 2006, in connection with the acquisition from Northrop Grumman
Corporation of certain assets associated with the backplane assembly business
of
its Interconnect Technologies Division together with the equity of Litton
Electronics (Suzhou) Co. Ltd., Simclar Group has provided a guarantee to Bank
of
Scotland in respect of loans advanced to Simclar, Inc. up to a maximum amount
of
$10,000,000; likewise, Simclar, Inc. has guaranteed certain Simclar Group loans
from Bank of Scotland also up to a maximum amount of $10,000,000. In both cases,
this maximum amount reduces, subject to certain ratios of borrowings to EBITDA
being achieved.
Beginning
in April 2006, the Company’s subsidiary Simclar Interconnect Technologies, Inc.
began paying a monthly management fee to Simclar Interconnect Technologies
Ltd.
based on 2% of sales. The purpose of the fee is to support global research
and
development, and sales and marketing management. The total amount paid under
this arrangement for the fiscal year ended December 31, 2007, was
$1,164,000.
For
2007
the Company had sales with Simclar Corp., a related party of Simclar Group,
totaling approximately $720,000, and sales to Simclar Group of approximately
$210,000. The company had net receivables from related parties as of December
31, 2007 of approximately $166,000 from Simclar Corp. and approximately $109,000
from Simclar China.
It
is our
practice and policy to comply with all applicable laws, rules and regulations
regarding related-person transactions, including the Sarbanes-Oxley Act of
2002.
A related-person is any executive officer, director, or more than 5% stockholder
of the Company, including any of their immediate family members, and any entity
owned or controlled by such persons. Our Audit Committee is charged with
reviewing and approving all related-person transactions, as required by the
Nasdaq rules. In considering related-person transactions, the Audit Committee
takes into account the relevant available facts and
circumstances.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth the names and beneficial ownership of our equity
securities for our directors, individually itemized, and for directors and
executive officers as a group, without naming them, and for each of the named
executive officers described in the Summary Compensation Table (see “Executive
Compensation”), and for shareholders known by us to beneficially own more than
5% of our voting securities as of April 18, 2008.
|
Name(1)
|
|
Position
|
|
Simclar
Common Stock(2)
|
%(3)
|
|
|
|
|
|
|
|
|
Simclar
Group Limited
|
|
Parent
|
|
4,729,520
(4)
|
73.2
|
|
|
|
|
|
|
|
|
Samuel
J. Russell
|
|
Chairman
and CEO
|
|
4,729,520
(4)
|
73.2
|
|
|
|
|
|
|
|
|
Barry
Pardon
|
|
President
& Director
|
|
53,133
|
0.8
|
|
|
|
|
|
|
|
|
Marshall
W. Griffin (5)
|
|
Chief
Financial Officer, Treasurer and Secretary
|
|
0
|
–
|
|
|
|
|
|
|
|
|
Stephen
P. Donnelly
|
|
Chief
Financial Officer, Treasurer and Secretary
|
|
0
|
|
|
|
|
|
|
|
|
|
John
Ian Durie
|
|
Director
|
|
10,000
|
0.1
|
|
|
|
|
|
|
|
|
Christina
M. J. Russell
|
|
Director
|
|
4,729,520
(4)
|
73.2
|
|
|
|
|
|
|
|
|
A.
Graeme Manson
|
|
Director
|
|
0
|
|
|
|
|
|
|
|
|
|
Kenneth
M. MacKay, M.D.
|
|
Director
|
|
0
|
|
|
|
|
|
|
|
|
|
William
J. Sim
|
|
Director
|
|
0
|
|
|
|
|
|
|
|
|
|
All
directors and executive officers of Simclar as a group (8
persons)
|
|
|
|
4,792,653
(4)
|
74.1
|
|
(1)
|
The
address for Simclar Group Limited and John Ian Durie is Pitreavie
Business
Park, Dunfermline, Fife KY11 8UN, Scotland, United Kingdom. The address
for A. Graeme Manson is Fulford House, Easter Howgate, Edinburgh,
EH26
0PG, Scotland, United Kingdom. The address for Kenneth M. MacKay,
M.D. is
4 Charles Court, Limekilns, Fife, KY11 3LG, Scotland, United Kingdom.
The
address for Messrs. Russell and Pardon, and Mrs. Russell is c/o Simclar,
Inc., 2230 West 77
th
Street, Hialeah, FL 33016. The address for Mr. Donnelly is c/o Simclar,
Inc., 1784 Stanley Avenue, Dayton, Ohio 45404. The address for Mr.
Sim is
14025 Big Branch Drive, Dayton, Maryland
21036.
|
|
(2)
|
Beneficial
ownership is determined in accordance with the rules of the Securities
and
Exchange Commission which generally attribute beneficial ownership
of
securities to persons who possess sole or shared voting power and/or
investment power with respect to those
shares.
|
|
(3)
|
Based
on 6,465,345 shares outstanding as of April 18,
2008.
|
|
(4)
|
Mr.
and Mrs. Russell are deemed to be the beneficial owner of all Simclar
Group’s ownership of our Company since they own 100% of the shares of
Simclar Group.
|
|
(5)
|
Mr.
Griffin resigned from his position as Chief Financial Officer, Treasurer
and Secretary of the Company effective March 21, 2008. The Company
appointed Mr. Donnelly Chief Financial Officer, Treasurer and Secretary,
also effective March 21, 2008, to fill the positions vacated by Mr.
Griffin.
|
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section
16(a) of the Securities Exchange Act of 1934 requires our directors, executive
officers and 10% shareholders to file reports with the SEC, the NASDAQ Stock
Market and our Company, indicating their ownership of our common stock and
any
changes in their beneficial ownership of their common stock ownership interest.
The rules of the SEC require that we disclose failed or late filings of reports
of our stock ownership by our directors and executive officers. To the best
of
our knowledge, all beneficial ownership reports by the reporting persons were
filed on a timely basis.
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