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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
FORM 10-K/A (Amendment No. 1)
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
----- EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the fiscal year ended December 31, 2006
Commission File Number 01-15739
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REUNION INDUSTRIES, INC.
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(Exact name of Registrant as specified in its charter)
DELAWARE 06-1439715
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(State of Incorporation) (I.R.S. Employer Identification No.)
11 STANWIX STREET, SUITE 1400, PITTSBURGH, PENNSYLVANIA 15236
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(Address of principal executive offices, including zip code)
(412) 281-2111
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(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class: COMMON STOCK, $.01 par value
Name of Each Exchange on Which Registered: AMERICAN STOCK EXCHANGE
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the Registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes No X
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Indicate by check mark if the Registrant is not required to file reports
pursuant to Section 13 or 15(d) of the Act. Yes No X
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Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.
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Indicate by check mark whether the Registrant is a
Large accelerated filer Accelerated filer Non-accelerated filer X
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Indicate by check mark whether the Registrant is a shell company Yes No X
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At March 15, 2007, 17,419,019 shares of common stock were issued and
outstanding. As of June 30, 2006, the aggregate market value of the voting
stock held by non-affiliates of the registrant (computed by reference to the
average of the high and low sales prices on the American Stock Exchange) was
$7,315,988.
DOCUMENTS INCORPORATED BY REFERENCE: None
Reunion Industries, Inc. ("Reunion Industries", "Reunion" or the
"Company")is filing this Amendment No. 1 to its Annual Report on Form 10-K for
the year ended December 31, 2006, as filed with the Securities and Exchange
Commission on April 2, 2007, to provide certain information previously omitted
from such report. The following are the four items previously omitted:
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
ITEM 11. EXECUTIVE COMPENSATION
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required by such items is provided herein as follow:
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
As of April 27, 2007, the following individuals were directors and/or
named executive officers of the Company.
Principal Position with
Name Reunion Industries, Inc. Age Director Since
----------------------- -------------------------- --- --------------
Thomas N. Amonett(1)(2) Director 63 1992
Charles E. Bradley, Sr. Director, 77 1995
Kimball J. Bradley Director, Chairman,CEO &
President 41 2000
Thomas L. Cassidy(1)(2) Director 78 1995
David E. Jackson(1)(2) Director 48 2003
Joseph C. Lawyer Director and Vice Chairman 61 2000
John G. Poole Director 64 1996
John M. Froehlich Executive Vice President,
Secretary & CFO 64
Jack T. Croushore President, CP Industries
Division 62
(1) Member, Compensation Committee of the Board of Directors
(2) Member, Audit Committee of the Board of Directors
THOMAS N. AMONETT has served as a director of Reunion Industries since
July 1, 1992 and served as its President and Chief Executive Officer from
July 1, 1992 until October 26, 1995. He also served as the President of
Reunion Energy Company, then a wholly-owned subsidiary of Reunion Industries
in the oil and gas operating business, from July 1, 1992 until May 24, 1996.
Mr. Amonett is President and Chief Executive Officer of Champion Technologies,
Inc., a manufacturer and distributor of specialty chemicals and related
services, primarily to the oil and gas industry. From November 1998 to
June 1999, he was President, Chief Executive Officer and a director of
American Residential Services, Inc., a company providing equipment and
services relating to residential heating, ventilating, air conditioning,
plumbing, electrical and indoor air quality systems and appliances. From July
1996 until June 1997, Mr. Amonett was Interim President and Chief Executive
Officer of Weatherford Enterra, Inc., an energy services and manufacturing
company. Mr. Amonett serves as a director of Petro Corp. Incorporated, a
Houston-based oil and gas company, and Stelmar Shipping Ltd., an international
provider of petroleum product and crude oil transportation services.
CHARLES E. BRADLEY, SR. became a director of Reunion Industries on
June 20, 1995 and was appointed President and Chief Executive Officer of
Reunion Industries on October 26, 1995. He became Chairman effective March
16, 2000 and served in that capacity until March 2, 2006 when he resigned his
officership as Chairman and CEO. He continues to serve as a director of the
Company. Mr. Bradley, Sr. was a co-founder of Stanwich Consulting Corp.,
formerly known as Stanwich Partners, Inc. ("SPI"), in 1982 and has served as
its President since that time. SPI is a private investment company. He was a
director of Chatwins Group, Inc. ("Chatwins Group") from 1986 until its merger
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with Reunion Industries on March 16, 2000 and was Chairman of the Board of
Chatwins Group from 1988 until the merger. Mr. Bradley, Sr. is currently the
President and a director of Sanitas, Inc. and Texon Energy Corporation, both
inactive companies. Mr. Bradley is the father of Kimball J. Bradley.
KIMBALL J. BRADLEY became President and Chief Operating Officer of
Reunion Industries effective May 1, 2000. Effective March 2, 2006, the Board
of Directors elected him Chairman of the Board and Chief Executive Officer.
Mr. Bradley continues to serve as President of the Company. He was Executive
Vice President of Operations of Reunion Industries following the Chatwins
Group merger and was a Senior Vice President of Chatwins Group from
August 1998 until the merger and a Vice President of Chatwins Group from
January 1996 to August 1998.
THOMAS L. CASSIDY became a director of Reunion Industries on June 20,
1995. He was a Managing Director of Trust Company of the West, an investment
management firm, from 1984 until his retirement in 1999. Mr. Cassidy is a
Partner of TCW Capital, an affiliate of Trust Company of the West. Mr.
Cassidy was a director of Chatwins Group from March 1993 to June 1997.
DAVID E. JACKSON became a director of Reunion Industries on June 26,
2003. He currently manages Kodiak Metals, LLC, a hedge fund which invests in
junior equities in the metals and mining industry. He has over fifteen years
experience as a portfolio manager investing in distressed securities having
worked as a portfolio manager with Avenue Capital Management, Oppenheimer &
Co. Inc., EBF & Associates and Cargill, Inc.
JOSEPH C. LAWYER became Vice Chairman of Reunion Industries effective May
1, 2000 and held that position until his retirement in 2006. He was President
and Chief Operating Officer of Reunion Industries following the Chatwins Group
merger and was President, Chief Executive Officer and a director of Chatwins
Group from 1988 until the merger. Mr. Lawyer is a director of Respironics,
Inc., a company engaged in design, manufacture and sale of home and hospital
respiratory medical products.
JOHN G. POOLE became a director of Reunion Industries on April 19, 1996.
Mr. Poole is a private investor. He was a co-founder of SPI with Charles E.
Bradley, Sr. in 1982 and served as its Vice President until 2001. Mr. Poole
was a director of Chatwins Group from 1988 until the merger. He is also a
director of Consumer Portfolio Services, Inc., engaged in the business of
purchasing, selling and servicing retail automobile installment sales
contracts.
JOHN M. FROEHLICH has served as Executive Vice President and Chief
Financial Officer of the Company since March 16, 200 and as its Secretary
since June 12, 2002.
JACK T. CROUSHORE has served as President of the Company's CP Industries
division since 1988.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires Reunion's directors and officers and persons who own beneficially
more than 10% of the common stock of Reunion Industries to file with the
Securities and Exchange Commission and the American Stock Exchange initial
reports of beneficial ownership and reports of changes in beneficial ownership
of the common stock of Reunion Industries. Directors, officers and persons
owning more than 10% of the common stock of Reunion Industries are required to
furnish Reunion Industries with copies of all such reports. Based solely on
Reunion's review of the copies of such forms it has received and
representations from certain persons that they were not required to file
reports on Form 5 during 2006, Reunion Industries believes that all its
officers, directors and greater than 10% beneficial owners complied with all
filing requirements applicable to them with respect to transactions during
2006, except that LC Capital Master Fund, Ltd. filed a Form 3 late and a Form
4 late for one transaction.
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Audit Committee
The Audit Committee of the Board of Directors, comprised of Messrs.
Amonett, Cassidy and Jackson (chairman), assists the board in assuring that
the accounting and reporting practices of the Company are in accordance with
all applicable requirements. Each member of the Audit Committee meets the
independence and financial experience requirements under the listing standards
of the American Stock Exchange (AMEX). In addition, the Board has determined
that Mr. Jackson is an "Audit Committee financial expert" as defined by rules
of the Securities and Exchange Commission (SEC). Mr. Jackson's business
experience is described above. The Audit Committee reviews with the auditors
the scope of the proposed audit work and meets with the auditors to discuss
matters relating to the audit and any other matter which the committee or the
auditors may wish to discuss. In addition, the Audit Committee recommends the
appointment of auditors to the board of directors each year and would
recommend the appointment of new auditors if future circumstances were to
indicate that such action is desirable.
Code of Ethics
In 2004, the Board of Directors adopted a Code of Business Ethics and
Conduct that applies to the Company's executive officers as well as all other
employees of the Company. Accountability for adherence to the Code primarily
rests with the Audit Committee. Reunion Industries will furnish without
charge a copy of its Code of Business Ethics upon written request. Written
requests may be directed to Reunion Industries, Inc., attn: Investor
Relations, 11 Stanwix Street, Suite 1400, Pittsburgh, PA 15222.
ITEM 11. EXECUTIVE COMPENSATION
The following table provides information concerning the compensation of
the Company's Chief Executive Officer ("CEO"), Chief Financial Officer ("CFO)
and the three other most highly compensated employees during the 2006 year.
Name and Position as Option All Other
of December 31,2006 Salary Bonus Awards(1) Compensation Total
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Kimball J. Bradley
Chairman, CEO and
President $391,528 $ -0- $ 15,049 $ 30,499(2) $437,076
John M. Froehlich
Executive VP of
Finance and CFO $219,064 $ -0- $ 5,098 $ 11,275(3) $235,437
Jack T. Croushore
President,
CPI Division $209,000 $100,000 $ 5,098 $ 7,575(4) $321,672
Thomas J. Vogel
Vice President $112,205 $ -0- $ 357 $ 900(5) $113,462
Roger L. Seese
Vice President
CPI Division $102,588 $ -0- $ 510 $ 900(5) $103,998
(1) Represents the dollar amount of stock option awards recognized for each
named individual as compensation costs for financial reporting purposes in
accordance with FAS 123R for the year 2006.
(2) Includes payments of life insurance premiums of $19,717, car allowances
of $9,882 and healthcare benefit credits of $900.
(3) Includes payments of life insurance premiums of $10,375 and healthcare
benefit credits of $900.
(4) Includes payments of life insurance premiums of $675, car allowance of
$6,000 and healthcare benefit credits of $900.
(5) Represents healthcare benefit credits.
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Option Grants
During the year ended December 31, 2006, the Company granted no stock
options to any executive officer or to any of the employees named above. The
following table shows all outstanding stock options to acquire Reunion
Industries common stock granted to executive officers and the above named
individuals as of December 31, 2006:
Number of Shares
Underlying
Unexercised Options Exercise Non-Vested Options
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Non Expiration Market
Name Exercisable Exercisable Price Date Number Value
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Kimball J Bradley 100,000 $0.275 6/26/08
300,000 $0.352 12/01/08
200,000 100,000 $0.200 6/21/10 100,000 $ 39,000
John M Froehlich 66,667 33,333 $0.180 6/21/15 33,333 $ 13,000
Jack T. Croushore 50,000 $0.250 6/26/13
66,667 33,333 $0.180 6/21/15 33,333 $ 13,000
Thomas J. Vogel 4,670 2,330 $0.180 6/21/15 2,330 $ 909
Roger L. Seese 6,667 3,333 $0.18 6/21/15 3,333 $ 1,300
Note: Options granted to Kimball J. Bradley have an exercise price equal to
110% of the fair market value of Reunion Industries' common stock on the grant
date. The remaining options have an exercise price of 100% of the fair market
value on the grant date. All non-vested options shown above have a vesting
date of June 21, 2007. Reunion Industries has not issued any stock
appreciation rights.
Option Exercises and Year-End Values
There were no options exercised in the year ended December 31, 2006.
Other Compensation Plans
The Company has no long-term incentive plan, has no defined benefit plan
applicable to any of its executive officers and has no other nonqualified
defined contribution or deferred compensation plans.
Compensation of Directors
The following table provides information concerning the compensation of
the Company's non-employee Directors for 2006. Directors who are employees of
the Company receive no compensation for their services as Directors or as
members of Board committees.
Fees
Paid in All Other
Name Cash Compensation Total
---------------------- --------- ------------ --------
Thomas N. Amonett (1) $ 21,500 $ - $ 21,500
Charles E. Bradley, Sr. $ 20,000 $ 63,333 $ 83,333
Thomas A. Cassidy (1) $ 21,000 $ - $ 21,000
David E. Jackson (1) $ 21,500 $ - $ 21,500
Joseph C. Lawyer $ 20,000 $ 37,500 $ 57,500
John G. Poole $ 20,000 $ 42,000 $ 62,000
(1) Member of both the Audit Committee and the Compensation Committee.
Non-employee Directors receive annual retainers of $18,000 for service on
the board and $500 for each board or committee meeting attended. Directors
are reimbursed for the actual cost of any travel expenses incurred. During
2006, in addition to their director's fees, Mr. Bradley, Mr. Lawyer and Mr.
Poole received other compensation of $63,333, $37,500 and $42,000,
respectively, for consulting services.
Non-employee directors of Reunion Industries are eligible for awards
under the 1998 and 2004 Stock Option Plans. During the year ended December
31, 2006, no options were granted.
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Compensation Committee Report
The Compensation Committee has reviewed and discussed the Compensation
Discussion and Analysis section, included below, with management. Based on
this review and discussion, the Compensation Committee has recommended to the
Board that the section be included in the Company's filing on this Form 10-
K/A.
Members of the Compensation Committee
Thomas N. Amonett, Chairman
Thomas L. Cassidy,
David E. Jackson
Compensation Discussion and Analysis
The Compensation Committee is responsible for the formulation and
adoption of all executive compensation, benefit and insurance programs,
subject to full board approval where legally required or in those instances
where the underlying benefit philosophy might be at variance with preexisting
board policies. The Compensation Committee also supervises the administration
of all executive compensation and benefit programs, including the
establishment of any specific criteria against which all annual performance
based benefits are to be measured.
Each year the Compensation Committee reviews the compensation levels of
the Company's executive officers and other key employees as deemed appropriate
by the committee with the objective of maximizing shareholder value by
retaining and rewarding qualified and competent individuals to run the
business. The CEO operates under an employment agreement that renews annually
at a 5% increase in salary, provides for bonus payments based on discretionary
considerations and calculations by the Compensation Committee and contains
termination benefits under certain circumstances. Such termination benefits
are provided (i) in order to maintain a continuity of management in the event
of termination in connection with a change in control of the Company or
termination without cause and (ii) in order to compensate the executive in the
event of termination for illness or death. Due to the financial difficulties
that the Company has experienced, the reviews of compensation levels for
executive officers of the Company are based mainly on factors that are more
focused toward qualitative and not quantitative results. While quantitative
measures based on Company performance compared to plan and prior year results
are considered, qualitative factors, such as relationships with independent
sources in the financial arena, knowledge and experience in the acquisition
and divestiture of companies and debt restructurings, management and
leadership skills and overall technical expertise, form a significant part of
the determination of executive compensation. Such determination of
compensation levels also take into consideration the lack of any
pension/retirement plan for executive officers. Due to the existing financial
difficulties and lack of liquidity, the Compensation Committee generally
utilizes the Company's stock option plans to maintain employees while creating
performance incentives for them and/or to reward individuals for specific
achievements.
Reviews of compensation levels for the above named non-executive officers
are performed by the CEO and are based on similar qualitative factors but are
focused more to the quantitative factors such as divisional operating results
compared to plan and prior years' performance. Stock option and bonus awards
are reviewed by the Compensation Committee.
Compensation Committee Interlocks and Insider Participation
Messrs. Amonett, Cassidy and Jackson are members of the Board's
Compensation Committee. Mr. Amonett served as Reunion Industries' President
and Chief Executive Officer from July 1, 1992 until October 26, 1995. He also
served as the President of Reunion Energy Company, then a wholly-owned
subsidiary of Reunion Industries in the oil and gas operating business, from
July 1, 1992 until May 24, 1996.
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Potential Payments upon Termination of Employment
Under the terms of the Employment Agreement between the Company and
Kimball J. Bradley, the Company is obligated to make certain payments and to
provide certain benefits to him upon the termination of his employment for
certain reasons. If his employment is terminated by reason of his becoming
disabled, the Company would be obligated to continue to pay him his base
salary (currently $406,028), for one year after termination. If Mr. Bradley's
employment is terminated by his death, the Company would be obligated to pay
his estate his base salary for two years. If his employment is terminated
without cause, if he resigns for "good reason" or if his employment is
terminated in connection with a change of control of the Company, the Company
would be obligated to pay him any unpaid bonus earned by him, continue to pay
him his base salary for 1.5 years after termination (subject to reduction by
the amount of any other salary earned by him during such period), continue to
include him in the Company's group health and life insurance programs for such
period and continue to pay the premiums on a $1,000,000 life insurance policy
for him for such period. If his employment is terminated for cause or by his
resignation (other than for "good reason"), the Company would have no post-
termination obligations to him.
Upon termination of Mr. Bradley's employment, he will continue to be
bound by obligations of confidentially (indefinitely), non-solicitation of
employees and customers of the Company (three years) and non-competition with
the Company's business (three years). If he were to breach these obligations,
the Company's post-termination obligations to him would cease.
Any post-termination salary continuation for Mr. Bradley would be paid in
equal installments on the Company's regular payroll dates during the
continuation period. The estimated annual costs of the benefits that would be
provided to him post-termination would be $10,000 for group health and life
insurance and $20,000 for an individual life insurance policy.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
Equity Compensation Plan Information
The following table summarizes information with respect to options and
warrants under Reunion's equity compensation plans on December 31, 2006:
Equity Compensation Plans
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Approved by Not Approved
Security by Security
Holders Holders
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Number of common stock shares to be issued
Upon exercise of outstanding options and
warrants 1,444,000 4,173,488
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Weighted-average exercise price per share
of outstanding options and warrants $0.25 $0.07
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Number of common stock shares remaining available
for future issuance under equity
compensation plans (excluding outstanding
options) 280,600 -
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Note: Data above in the column for plans not approved by security holders
reflect warrants issued to various lenders in connection with their loans to
the Company.
Reunion Industries had 17,419,019 shares of common stock outstanding as
of April 22, 2007. The following table sets forth information regarding the
beneficial ownership of our common stock by (i) each stockholder known to us
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to own 5% or more of our common stock, (ii) each director of Reunion, (iii)
each of the chief executive officer and the other named executives, and (iv)
all current directors and executive officers as a group. Except as set forth
in the footnotes to the following table, each stockholder has sole dispositive
and voting power with respect to the shares of our common stock shown as owned
by such stockholder.
% of
Outstanding
Beneficial Owner and Address Shares Owned Shares
-------------------------------- ------------------------- -----------
Kimball J. Bradley 6,829,802 (1) 37.7%
c/o Reunion Industries, Inc.
11 Stanwix Street, suite 1400
Pittsburgh, PA 15222
The Charles E. Bradley, Sr.
Family Limited Partnership 4,310,813 (2) 24.7%
c/o Stanwich Consulting Corp.
62 Southfield Ave.
One Stamford Landing
Stamford, CT 06902
Stanwich Financial Services Corp. 1,651,697 (3) 9.5%
c/o Melissa Neier, Esq.
Ivey, Barnum & O'Mara
170 Mason Street
Greenwich, CT 06830
The John Grier Poole Family
Limited Partnership 1,499,747 (2)(4) 8.6%
One Rye Road
Portchester, NY 10573
Amanda Poole, David Poole and
Jesse Poole 1,499,747 (4) 8.6%
c/o John G. Poole
One Rye Road
Portchester, NY 10573
LC Capital Master Fund, Ltd. 1,919,055 (5) 10.0%
c/o Lampe Conway 7 Co., LLC
730 Fifth Avenue
New York, NY 10019
John G. Poole 839,428 (6) 4.8%
Charles E. Bradley, Sr. 545,477 (7)(8)(9) 3.1%
Joseph C. Lawyer 712,131 (10) 4.1%
Thomas N. Amonett 88,000 (11) <1.0%
Thomas L. Cassidy 100,167 (12) <1.0%
David E. Jackson 45,464 (13) <1.0%
John M. Froehlich 178,959 (14) 1.0%
Jack T. Croushore 345,188 (15) 2.0%
All Officers and Directors as
a group (9 individuals) 9,684,616 (16) 51.7%
(1) Includes (a) 4,310,813 shares owned by The Charles E. Bradley, Sr.
Family Limited Partnership (the "Bradley Partnership") of which Kimball J.
Bradley is general partner and in which he holds a 14.17% interest and (b)
700,000 shares subject to options exercisable currently or within 60 days.
(2) Pursuant to the Securities Pledge Agreement dated as of May 1, 1993
among the Charles E. Bradley, Sr. Family Limited Partnership, the John Grier
Poole Family Limited Partnership, and U.S. Bank, National Association, as
successor Collateral Agent to State Street Bank and Trust Company and the
First National Bank of Boston, the Bradley Partnership pledged 4,145,247
shares and the Poole Partnership pledged 552,703 shares to secure the
obligations of Reunion Industries under the Indenture, dated as of May 1,
1993, between Reunion and the Collateral Agent relating to certain Senior
Notes issued by Reunion Industries in 1993.
(3) The voting and dispositive powers as to these shares are held by the
Liquidating Agent and the Executive Committee (subject to court oversight)
appointed in the bankruptcy proceeding of Stanwich Financial Services Corp.
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(4) These shares are owned by the John Grier Poole Family Limited
Partnership. Amanda Poole, David Poole and Jesse Poole are co-general
partners (and limited partners) of such partnership. As such, they share
voting and dispositive powers as to such shares with each other and with such
partnership.
(5) Includes 1,826,055 shares subject to currently exercisable warrants.
(6) Includes 139,808 shares as to which Mr. Poole has voting rights, but not
dispositive rights, 71,990 currently exercisable warrants and 10,000 shares
subject to options exercisable currently or within 60 days.
(7) Mr. Bradley, Sr. and his wife own, respectively, a 28% and a 1% limited
partnership interest in the Bradley Partnership, which in turn beneficially
owns 4,310,813 shares of common stock. Because Mr. Bradley, Sr. and his wife
have no voting or dispositive power as to the shares owned by the Bradley
Partnership, he disclaims any beneficial ownership thereof, and none of such
shares are included as being beneficially owned by him in the table above.
(8) Excludes 1,651,697 shares owned by Stanwich Financial Services Corp.,
with which Mr. Bradley, Sr. is the indirect sole shareholder. He has no
voting or dispositive powers as to these shares.
(9) Includes 100,000 shares owned by Hanna Investment Corporation, with
which Mr. Bradley, Sr. shares voting and dispositive power and which have been
pledged to secure certain obligations of a former affiliate of his. Mr.
Bradley, Sr. is the controlling stockholder of the parent company of Hanna
Investment Corporation and may be deemed to be the beneficial owner of these
shares. Also includes 200,000 shares subject to options exercisable currently
or within 60 days.
(10) Includes 3,698 shares beneficially owned by Mr. Lawyer's wife, as to
which he has no voting or dispositive power. Mr. Lawyer may be deemed to be
the beneficial owner of these shares. Also includes 380 currently exercisable
warrants and 10,000 shares subject to options exercisable currently or within
60 days.
(11) Includes 10,000 shares subject to options exercisable currently or
within 60 days.
(12) Includes 27,805 currently exercisable warrants and 10,000 shares subject
to options exercisable currently or within 60 days.
(13) Includes 15,464 currently exercisable warrants and 30,000 shares subject
to options exercisable currently or within 60 days.
(14) Includes 4,951 currently exercisable warrants and 100,000 shares subject
to options exercisable currently or within 60 days.
(15) Includes 150,000 shares subject to options exercisable currently or
within 60 days.
(16) Includes 120,590 currently exercisable warrants and 1,200,000 shares
subject to options exercisable currently or within 60 days.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions and Balances
Mr. K. Bradley Guarantee Fees
To facilitate obtaining new financing with two private investment funds
and the closing of the refinancing of the Company's bank debt with Wachovia in
December 2003, Mr. K. Bradley provided personal guarantees totaling $9.2
million, including guarantees of two notes payable totaling $7.7 million and
$1.5 of the revolving credit portion of the new Wachovia facilities. In
exchange for his guarantees, the Board of Directors approved 2% per annum
guarantee fees to be paid to Mr. K. Bradley during the time period such
guarantees are in place. During the 2006 year, the Company expensed, but has
not paid, $145,000 of such guarantee fees.
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Procedures for Transactions with Related Persons
The Company has no written policies or procedures concerning the review,
approval or ratification of transactions with related persons. The Company's
practice is to submit any such proposed transaction to the Board for approval
by the directors who have no direct or indirect personal interest in the
transaction.
Director Independence
The following persons are directors of the Company, and those after whose
names an asterisk appears are "independent" under the listing standards of the
AMEX.
Thomas N. Amonett*
Charles E. Bradley, Sr.
Kimball J. Bradley
Thomas A. Cassidy*
David E. Jackson*
Joseph C. Lawyer
John G. Poole*
Messrs. Amonett, Cassidy and Jackson are member of the Audit Committee and
Compensation Committee of the Board. Each is "independent" under the listing
standards of the AMEX applicable to such Committees.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Mahoney Cohen & Company, CPA, P.C. has been the Company's independent
registered public accounting firm for more than two years. Fees paid by the
Company for professional services rendered by Mahoney Cohen & Company, CPA,
P.C. for the years ended December 31, 2006 and 2005 totaled $180,500 and
$194,000, respectively. Such fees related solely to audit fees for
professional services rendered for the audit of Reunion Industries'
consolidated financial statements and review of the interim consolidated
financial statements included in quarterly reports and services that are
normally provided in connection with statutory and regulatory filings or
engagements.
All services provided by Mahoney Cohen & Company, CPA, P.C. are subject
to pre-approval by the Audit Committee. The Audit Committee may authorize the
Committee chairman to approve services in the event there is a need for such
approval prior to the next full Audit Committee meeting. However, the Audit
Committee must review such approval at its next scheduled meeting. The Audit
Committee gives due consideration to whether approval of any proposed service
will have a detrimental impact on the auditor's independence. All services
provided by Mahoney Cohen and Company, CPA, P.C. were approved by the Audit
Committee.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
Date: April 30, 2007 REUNION INDUSTRIES, INC.
--------------
By: /s/ Kimball J. Bradley
----------------------------
Kimball J. Bradley
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Annual Report on Form 10-K/A has been signed by the following persons in the
capacities and on this 1st day of May, 2006.
Signature Title
--------- -----
/s/ John M. Froehlich Executive Vice President, Chief
--------------------------- Financial Officer, Treasurer and
John M. Froehlich Secretary (chief financial
and accounting officer)
/s/ Thomas N. Amonett Director
---------------------------
Thomas N. Amonett
/s/ Charles E. Bradley, Sr. Director
---------------------------
Charles E. Bradley, Sr.
/s/ Thomas L. Cassidy Director
---------------------------
Thomas L. Cassidy
/s/ David E. Jackson Director
---------------------------
David E. Jackson
/s/ Joseph C. Lawyer Vice Chairman and Director
---------------------------
Joseph C. Lawyer
/s/ John G. Poole Director
---------------------------
John G. Poole
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