PLTE Claymont Steel Hlds (MM)

The Board recommends a vote “FOR” each nominee for director.

PROPOSAL 2

RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The holders of Claymont common stock are being asked to ratify the appointment of Crowe Chizek and Company LLC, as Claymont’s independent registered public accounting firm for continuing audit work in 2007. See “PROPOSAL 2 – RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.”

The Board recommends a vote “FOR” the proposal to ratify the appointment of Crowe Chizek and Company LLC as Claymont’s independent registered public accounting firm for 2007.

PROXIES AND VOTING

This Proxy Statement is furnished in connection with the solicitation of proxies by the Board for use at the Annual Meeting of Stockholders to be held on November 13, 2007 and at any adjournments. This Proxy Statement and enclosed form of Proxy are first being mailed to stockholders on or about October 19, 2007.

Each holder of record of Claymont’s common stock at the close of business on October 16, 2007 is entitled to one vote per share. At the close of business on October 16, 2007, 17,566,754 shares of Claymont’s common stock were outstanding.

Stockholders may vote by telephone or over the Internet by following the instructions on the enclosed proxy card (or if you own your shares through a broker or other intermediary, on the voting instruction card provided by the broker or intermediary). Stockholders may also vote by marking, signing and dating the enclosed proxy card and returning it in the preaddressed envelope.

Any stockholder giving a proxy has the power to revoke that proxy at any time before it is voted by voting again by telephone or over the Internet, by sending the Company a proxy card dated later than your last vote, or voting at the meeting. Any proxy that is not revoked will be voted at the Annual Meeting. If no contrary instruction is indicated on the proxy, the persons named in the proxy will vote the shares FOR the election of the nominees described in this proxy statement, and FOR ratification of the appointment of Crowe Chizek and Company LLC as our independent registered public accounting firm.

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The presence, in person or by proxy, of the holders of record of such number of shares of Claymont’s common stock as are entitled to cast a majority of the votes at the meeting constitutes a quorum. Abstentions and broker “non-votes” are counted as present and entitled to vote for purposes of determining a quorum. A broker “non-vote” occurs when a bank, broker or other holder of record does not vote on a particular proposal because that holder does not have discretionary voting power with respect to the proposal and has not received voting instructions from the beneficial owner.

Directors are elected by a plurality of the votes cast. A plurality means that the nominees with the largest number of votes are elected as Directors, up to the maximum number of Directors to be chosen at the Annual Meeting. Any other matters that may be acted upon at the Annual Meeting will be determined by the affirmative vote of the holders of a majority of the shares of common stock represented in person or by proxy at the Annual Meeting. An abstention will have the same effect as a vote against and a broker “non-vote” is not counted for purposes of voting on these matters.

The Board is not aware of any matters that will be brought before the Annual Meeting other than those described in this Proxy Statement. However, if any other matters properly come before the Annual Meeting, the persons named on the enclosed proxy card will vote in their discretion on such matters.

Solicitation of proxies on behalf of the Board may be made by the Company’s employees through the mail, in person and by telephone. The Company will reimburse brokerage houses and other nominees for forwarding proxy material to beneficial owners.

PROPOSAL 1

ELECTION OF DIRECTORS

Claymont’s Amended and Restated Certificate of Incorporation and its Amended and Restated Bylaws provide for the division of the Board into three classes with the directors in each class serving for a term of three years. At the Annual Meeting, two directors will be elected to serve until the 2010 annual meeting and until their successors are elected and qualified. All nominees currently are members of the Board.

Each of the nominees has consented to serve as a director. We do not anticipate that any of the nominees will become unavailable to serve as a director for any reason, but if they became unavailable, the persons named in the enclosed form of proxy will vote for any substitute nominee designated by the Board. Information concerning the nominees and the continuing members of the Board is provided below:

Standing for Election for Term Expiring in 2010

Mr. Shellabarger has served on Claymont’s Board since 2006. Mr. Shellabarger served as chief financial officer and vice president-finance for Steel Dynamics, Inc., a publicly traded steel manufacturer. Prior to his role with Steel Dynamics, from 1987 to 1994, Mr. Shellabarger served as controller of a division of Nucor Corporation, a Fortune 400 steel manufacturer. Mr. Shellabarger currently serves on the board of directors of Tarpon Industries, Inc. and two non-profit organizations. Mr. Shellabarger earned a Bachelor of Science degree in Accounting.

Mr. Zanarini has served on Claymont’s Board and Claymont Steel, Inc.’s Board since 2005. Mr. Zanarini joined H.I.G. Capital in 2004 and currently serves as a managing director. Prior to joining H.I.G. Capital, from 1998 to 2004 Mr. Zanarini held a variety of positions at Bain & Company, a management consulting firm. While at Bain, Mr. Zanarini devised corporate growth strategies and directed diligence efforts for equity investors. Mr. Zanarini currently serves on the board of directors of several H.I.G. portfolio companies. Mr. Zanarini holds Bachelor of Science and Bachelor of Arts degrees and a Masters in Business Administration.

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Continuing Directors

Current Term Expires in 2008

Mr. Sanford has served on Claymont’s Board and Claymont Steel, Inc.’s Board since 2005. Mr. Sanford joined H.I.G. Capital in 2000 and currently serves as a managing director. Prior to joining H.I.G. Capital, Mr. Sanford was a manager with Pittiglio, Rabin, Todd and McGrath, an operations-focused consulting firm to technology based businesses, from 1999 to 2000. Previously, he held a variety of positions at Bain & Company, a management consulting firm, in which he managed the development and implementation of marketing and operating strategies for Fortune 500 business. Mr. Sanford currently serves on the board of directors of several H.I.G. Capital portfolio companies. Mr. Sanford holds a Bachelor of Arts degree and a Masters in Business Administration.

Mr. Scheinkman has served on Claymont’s Board since 2006. Mr. Scheinkman served as the president and chief executive officer of Transtar Metals Inc. from September 1999 to September 2006. Since Transtar’s acquisition by A.M. Castle & Co. in September 2006, Mr. Scheinkman has served as president of Transtar. Prior to joining Transtar, Mr. Scheinkman served as the president, chief operating officer and chief financial officer of Macsteel Service Centers USA. Mr. Scheinkman earned a Bachelor of Business Administration degree in Accounting and is a Certified Public Accountant.

Current Term Expires in 2009

Mr. Bradley has served as Claymont’s chief executive officer since 2005 and is a member of Claymont’s Board. Prior to joining Claymont, from September, 2004 to June, 2005, Mr. Bradley served as vice president of strategic planning for Dietrich Industries, a $900 million construction products subsidiary of Worthington Industries. Prior to joining Dietrich Industries, from September, 2000 to August, 2004, Mr. Bradley served as a vice president and general manager for Worthington Steel. Mr. Bradley has a Business Administration degree.

Mr. Mnaymneh has served on Claymont’s Board and Claymont Steel, Inc.’s Board since 2005. Mr. Mnaymneh is a co-founding partner of H.I.G. Capital and has served as a managing partner of the firm since 1993. Prior to joining H.I.G. Capital, from 1990 to 1993 Mr. Mnaymneh was a managing director at The Blackstone Group, a merchant bank, where he provided financial advisory services to Fortune 100 companies. Prior to that, from 1984 to 1989 Mr. Mnaymneh was a vice president in the mergers and acquisitions department at Morgan Stanley & Co. where he served as a senior advisor to private equity firms. Mr. Mnaymneh currently serves on the board of directors of Securus Technologies, Inc. and a number of other H.I.G. Capital portfolio companies. Mr. Mnaymneh holds a Bachelor of Arts degree, a Masters in Business Administration and a Juris Doctorate.

Mr. Tamer has served on Claymont’s Board since 2006. Mr. Tamer is a co-founding partner of H.I.G. Capital and has served as a managing partner of the firm since 1993. Prior to joining H.I.G. Capital, Mr. Tamer was a partner at Bain & Company, one of the world’s leading management consulting firms. Mr. Tamer has extensive operating experience particularly in the communications and semiconductor industries, having held marketing, engineering and manufacturing positions at Hewlett-Packard and Sprint Corporation. Mr. Tamer currently serves on the board of directors of Securus Technologies, Inc. and a number of other H.I.G. Capital portfolio companies. Mr. Tamer holds a Masters in Business Administration degree and a Masters degree in Electrical Engineering.

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Jeff Bradley has served as Claymont’s chief executive officer since 2005 and is a member of Claymont’s Board. Prior to joining Claymont Steel, from September, 2004 to June, 2005, Mr. Bradley served as vice president of strategic planning for Dietrich Industries, a $900 million construction products subsidiary of Worthington Industries. Prior to joining Dietrich Industries, from September, 2000 to August, 2004, Mr. Bradley served as a vice president and general manager for Worthington Steel. Mr. Bradley has a Business Administration degree.

David Clark has served as Claymont’s Chief Financial Officer since November 2006. Prior to joining Claymont, Mr. Clark served as executive vice president, chief financial officer and secretary of SunCom Wireless, Inc., a publicly traded company, from its founding in 1997 through February 2006. From 1997 to 2000, Mr. Clark served as chief financial officer of Triton Cellular Partners, L.P., an entity related to SunCom Wireless. Before joining Triton, Mr. Clark was a managing director at Furman Selz L.L.C. specializing in communications finance. Prior to joining Furman Selz, Mr. Clark spent over ten years at Citibank N.A. and Citicorp Securities Inc. as a lending officer and a high yield finance specialist. Mr. Clark holds a Bachelor of Science degree in accounting.

Allen Egner has served as Claymont’s vice president, finance since 2005. From 2001 to 2005, Mr. Egner served as Claymont’s controller, from 1998 to 2001 he served as our manager of accounting, and from 1989 to 1998 he served as Claymont’s manager of cost accounting. Before joining the Company, Mr. Egner was employed by Bethlehem Steel from 1974 to 1989, first as a general foreman and then as a senior cost analyst. Mr. Egner holds a Bachelor of Science degree and a Masters in Business Administration.

Steve Lundmark has served as Claymont’s vice president, sales and marketing since Claymont Steel, Inc.’s inception in 1988. Prior to joining Claymont Steel, Inc., Mr. Lundmark served as manager of carbon plate sales for Lukens Steel from 1986-1988, as regional sales manager of Lukens Steel from 1977 to 1986, as a branch manager for Kaiser Aluminum from 1969 to 1977, as production supervisor at Johnson & Johnson from 1967 to 1969 and as industrial engineer for Owens-Illinois Glass from 1964 to 1967. Mr. Lundmark holds a Bachelor of Science degree and a Masters in Business Administration.

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CORPORATE GOVERNANCE

Director Independence

Pursuant to the NASDAQ rules, a majority of the Board must be independent. Of the Company’s seven directors, four are independent. The Board has affirmatively determined that each of Tracy Shellabarger, Steve Scheinkman, Matthew Sanford and Jeffrey Zanarini are independent as defined in the NASDAQ listing standards. Tracy Shellabarger, Steve Scheinkman, Matthew Sanford and Jeffrey Zanarini are sometimes referred to herein as the “Independent Directors”.

Nomination of Directors

Pursuant to the NASDAQ rules, the Company does not have a formal nominating committee of the Board. All director nominees are selected and recommended for the Board’s selection by the majority of the Independent Directors. The full Board approves all recommendations for director nominees. The Independent Directors seek director candidates based upon a number of qualifications, including a candidate’s independence, integrity, education, business judgment, business experience, accounting and financial expertise, diversity of experience, acumen, reputation, civic and community relationships, high performance standards and ability to act on behalf of stockholders. The Independent Directors consider and recommend candidates to the Board so that the Board collectively possesses a broad range of skills and experience that can be of assistance in the operation of the Company’s business. The Independent Directors may engage the services of third party search firms to assist in identifying and assessing the qualifications of director candidates. In addition, the Independent Directors will consider recommendations for director candidates from stockholders. Stockholder recommendations of candidates should be submitted in writing to: Claymont Steel Holdings, Inc., 4001 Philadelphia Pike, Claymont, Delaware 19703, Attention: Secretary. In order to enable consideration of the candidate in connection with the Company’s 2008 Annual Meeting, a stockholder must submit the following information by December 16, 2007: (1) The name of the candidate and information about the candidate that would be required to be included in a proxy statement under the rules of the SEC; (2) information about the relationship between the candidate and the recommending stockholder; and (3) the consent of the candidate to serve as a director. In considering any candidate proposed by a stockholder, the Independent Directors will reach a conclusion based on the criteria described above. The Independent Directors may seek additional information regarding the candidate. After full consideration, the stockholder proponent will be notified of the decision of the Independent Directors. The Independent Directors will consider all potential candidates in the same manner regardless of the source of the recommendation.

Board Meetings and Committees

Prior to the completion of our initial public offering in December 2006, Claymont was a privately held company. During 2006, there were no meetings of the Board, and the Board acted six times by unanimous written consent. There are two standing committees of the Board: the Audit Committee and the Compensation Committee, each described below. During 2006, each director attended at least 75% of the total number of meetings held by the Board and all committees of the Board on which such Director served. This year is our first Annual Meeting and we encourage all directors to attend.

Audit Committee . The Audit Committee was formed at the time of the completion of our initial public offering in December 2006 and held its first meeting in 2007. The Audit Committee members are Steve Scheinkman and Tracy Shellabarger, each of whom is independent as defined by NASDAQ and the applicable SEC rules, and Jeffrey Zanarini. The Company is relying on an exemption to the SEC rules for newly public companies whereby the Company has one year from the date of effectiveness of its Initial Public Offering registration statement to comply with the requirements for an independent audit committee. Reliance on this exemption has not materially adversely affected the ability of the Audit Committee to act independently or satisfy any other SEC requirements for audit committees. The Board of Directors has adopted a written charter

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for the Audit Committee, which is attached hereto as Appendix A . The Audit Committee has sole authority to engage, retain and dismiss our independent registered public accounting firm, reviews and approves in advance the performance of all audit and lawfully permitted non-audit services, subject to the pre-approval policy discussed below, reviews and discusses with management and our independent registered public accounting firm the annual audited financial statements and quarterly financial statements included in our filings with the SEC, oversees the internal audit function, and oversees our internal controls and reviews periodically policies and procedures regarding business conduct and ethics.

The Audit Committee has established a policy regarding the approval of audit and non-audit services provided by its independent registered public accounting firm. Specifically, the Committee pre-approves all audit and non-audit services to be provided by the independent registered public accounting firm. The Committee sets maximum amounts that may be allocated to specified non-audit services that we may obtain from the independent registered public accounting firm and requires management to report on specific engagements to the Committee on a periodic basis and to request any increase in the maximum amount allocated to specified services.

The Audit Committee has established procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls and auditing matters and the receipt of confidential, anonymous submissions by our employees with respect to concerns regarding questionable accounting or auditing matters. Such complaints and submissions may be made by writing to the following address: Claymont Steel Holdings, Inc., 4001 Philadelphia Pike, Claymont, Delaware 19703, Attention: Audit Committee. Such correspondence will be logged in and forwarded to the members of the Audit Committee.

The Board has determined that Mr. Shellabarger is an “audit committee financial expert” within the meaning of the SEC regulations and Mr. Shellabarger is independent as defined by NASDAQ.

Compensation Committee . The Compensation Committee was formed at the time of the completion of our initial public offering in December 2006 and held its first meeting in 2007. The Compensation Committee members are Matthew Sanford and Jeffrey Zanarini, each of whom is independent as defined by the NASDAQ rules. The Compensation Committee has not formalized a charter. The Compensation Committee provides oversight on the development and implementation of the compensation policies, strategies, plans and programs for the Company’s key employees and outside directors and disclosure relating to these matters, reviews and approves the compensation of the Chief Executive Officer and the other executive officers of the Company and its subsidiaries, provides oversight concerning selection of officers, management succession planning, performance of individual executives and related matters and administers the Company’s stock incentive plan.

The Compensation Committee has the authority to delegate such of its authority and responsibilities as the Compensation Committee deems proper to members of the Committee or to a subcommittee. The Compensation Committee may engage compensation consultants, independent counsel and such other advisers as the Compensation Committee determines necessary to carry out its responsibilities. Authority to select, retain, terminate, approve the fees or other retention terms of any such consultant or adviser is vested solely in the Compensation Committee. In considering executive and director compensation, the Compensation Committee takes into account the recommendations of the Chief Executive Officer. However, the Chief Executive Officer does not make recommendations or participate in any manner with respect to his own compensation.

Communication with the Board of Directors

Any person who wishes to communicate with the Board may direct a written communication, addressed to the Board or any specific director at: Claymont Steel Holdings, Inc., 4001 Philadelphia Pike, Claymont, Delaware 19703, Attention: Secretary. Such correspondence will be logged in and forwarded to the appropriate director.

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COMPENSATION DISCUSSION AND ANALYSIS

Compensation Philosophy and Overall Objectives

The Company believes that the compensation paid to its Chief Executive Officer, its Chief Financial Officer and its other executive officers, whom are collectively referred to as the named executive officers (“Named Executive Officers”), should be closely aligned with the Company’s performance as well as with each Named Executive Officer’s individual performance on both a short- and long-term basis, and that such compensation should be sufficient to attract and retain highly qualified leaders who can create significant value for the Company’s stockholders. The Company’s compensation programs are designed to provide the Named Executive Officers meaningful incentives for superior performance. Performance is evaluated using both financial and non-financial objectives that the Company believes contributes to its long-term success. Among these objectives are financial strength, customer service, operational excellence, employee commitment and regulatory integrity.

The Company’s goal has been to design a compensation program that focuses the executives on the achievement of specific annual, long-term, and strategic goals set by the Company that align executives’ interests with those of stockholders by rewarding performance that maintains and improves stockholder value. The plans are created so that executives receive cash bonuses, stock options, or restricted stock units when specific, measurable goals are achieved.

How is Compensation Determined

The Company believes that an effective total compensation plan should be structured to focus executives on the achievement of specific business goals set by the Company and to reward executives for achieving those goals. Therefore, the Company established the following key compensation principles to guide the design and ongoing administration of the Company’s overall compensation program:

The Company intends to use companies in similar industries as benchmarks when establishing Named Executive Officers’ compensation. The Company also intends to review peer company data when making annual base salary and incentive recommendations.

Discussion of Specific Compensation Elements

The Company compensates its executive officers through a mix of:

Allocation Among Elements

The Company’s mix of base salary, short-term cash incentive and equity compensation varies depending on the level of the position held by the executive. In allocating compensation among these components, the Company believes that the compensation of our senior-most levels of management—the levels of management

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having the greatest ability to influence the Company’s performance—should be weighted toward performance-based goals putting a greater proportion of their compensation at risk based on achieving specific goals.

Base Salary

The Company determines base salaries for all Named Executive Officers by reviewing company and individual performance, the value each Named Executive Officer brings to the Company and general labor market conditions. While base salary provides a base level of compensation intended to be competitive with the external market, the base salary for each Named Executive Officer is determined on a subjective basis after consideration of these factors and is not based on target percentiles or other formal criteria. The base salaries of Named Executive Officers are reviewed on an annual basis, and any annual increase is the result of an evaluation of the Company’s and of the individual Named Executive Officer’s performance for the period. An increase or decrease in base pay may also result from a promotion or other significant change in a Named Executive Officer’s responsibilities during the year.

Annual Bonus

The annual bonus is designed to align the interests of senior management with stockholder interests, as well as customer service levels, to achieve overall positive financial performance for the Company. The Compensation Committee, in partnership with management, sets clear annual performance objectives for all executives and measures annual performance against those objectives.

Individual annual bonuses are set as a percentage of base salary. Annual bonuses are earned based on two levels of criteria. A percentage of the bonus is based on the Company achieving certain EBITDA levels. The remaining bonus is determined at the discretion of the Compensation Committee.

Long-Term Equity Compensation

The Company believes that equity compensation is the most effective means of creating a long-term link between the compensation provided to officers and other key management and the gains realized by the stockholders. This program encourages participants to focus on long-term Company performance and provides an opportunity for executive officers and designated key employees to increase their ownership in the Company through grants of stock options and restricted stock units. The following is a summary of the Company’s 2006 Stock Incentive Plan.

2006 Stock Incentive Plan

Introduction. The Company’s 2006 Stock Incentive Plan (the “2006 Plan”) was adopted by the Board and approved by the stockholders in November 2006. The 2006 Plan became effective in December 2006 and will terminate no later than November 27, 2016, unless extended with stockholder approval.

Share Reserve . 450,000 shares of common stock have been authorized for issuance under the 2006 Plan. However, no participant in our 2006 Plan may receive awards for more than 100,000 shares of common stock per calendar year.

Equity Incentive Programs. The 2006 Plan is divided into three separate components:

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Eligibility . The individuals eligible to participate in the 2006 Plan include officers and other employees of the Company, the Company’s non-employee board members and any consultants the Company hires and any individuals in similar capacities with any of the Company’s parent or subsidiary companies.

Administration . The Compensation Committee of the Board administers the discretionary grant and stock issuance programs. However, the Board may, at any time, appoint a secondary committee of one or more board members to have separate but concurrent authority with the compensation committee to make awards under those two programs to individuals other than executive officers and board members.

The plan administrator determines which eligible individuals are to receive awards under these two programs, the time or times when those awards are to be made, the number of shares subject to each such award, the vesting, exercise and issuance schedules to be in effect for each such award, the maximum term for which such award is to remain outstanding, the status of any granted option as either an incentive stock option or a non-statutory stock option under the federal tax laws and the cash consideration payable (if any) for shares issuable under the stock issuance program. The automatic grant program for the non-employee board members is self-executing, and the plan administrator has limited authority under that program.

Plan Features . The Company’s 2006 Plan includes the following features:

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Automatic Option Grant Program. Participation in the automatic option grant program is limited to (i) each individual who was serving as an eligible non-employee board member in December 2006 and (ii) any individual who first becomes an eligible non-employee board member on or after such date. For purposes of the program, an eligible non-employee board member is any non-employee board member who is not a member, officer, manager, equity holder or other affiliate of H.I.G. Capital LLC, Inc.

Grants under the automatic grant program are made as follows:

Any fractional share of common stock resulting from the application of the applicable dollar formula will be rounded up to the next whole share.

Each IPO Grant and Initial Grant will have an exercise price per share equal to the fair market value per share of the Company’s common stock on the grant date and will have a term of seven years, subject to earlier termination following the eligible non-employee director’s cessation of board service. The option will be immediately exercisable for all of the option shares; however, the Company may repurchase, at the lower of the exercise price paid per share or the fair market value per share, any shares purchased under the option which are not vested at the time of the eligible non-employee director’s cessation of board service. The shares subject to each IPO Grant and Initial Grant will vest in a series of four successive annual installments upon the eligible non-employee director’s completion of each year of board service over the four-year period measured from the grant date. The shares subject to each Annual Grant will vest upon the earlier of the eligible non-employee director’s completion of one year of board service measured from the grant date or his or her continuation in board service until the day immediately preceding the next annual stockholders meeting following the grant date. However, the shares subject to each automatic grant held by an eligible non-employee director (whether in the form of an option grant or restricted stock units) will immediately vest in full upon his or her death or disability while a board member.

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Restricted Stock Awards

The Company granted restricted stock to Jeff Bradley in 2005 to provide an incentive to its Chief Executive Officer to focus on the growth in value of the Company’s stock.

Pursuant to the terms of the employment agreement and the restricted shares agreement between the Company and Jeff Bradley, Mr. Bradley was granted 75,451 shares of our restricted stock, representing 0.6667% of our then outstanding common stock. Of such shares, 12.5% vest each anniversary of the original grant date assuming that Mr. Bradley is employed on each applicable vesting date. An additional 12.5% of such shares vest each anniversary of the original grant date if the Company’s EBITDA levels equal or exceed targets established by the Compensation Committee of the Board and Mr. Bradley is employed on each applicable vesting date.

Mr. Bradley received a dividend payment of approximately $276,000 in September 2005. Mr. Bradley was also entitled to a $466,490 dividend on his restricted shares with respect to a dividend to our equity holders declared on June 13, 2006. Mr. Bradley received $90,000 of the dividend on June 14, 2006 and the remainder was deferred pursuant to the terms of Mr. Bradley’s restricted shares agreement. In addition, Mr. Bradley was entitled to a $477,921 dividend on his restricted shares with respect to a dividend to our equity holders declared on July 12, 2006. The withheld dividends were distributed to Mr. Bradley in January 2007.

In June 2006, the Compensation Committee determined that the Company satisfied the targeted EBITDA levels and as such one-quarter of Mr. Bradley’s restricted stock vested and was released from restrictions.

Defined Benefit Retirement Plan

The Company maintains a noncontributory defined benefit pension plan, which covers substantially all full-time employees. Pension benefits are based on years of service and average annual earnings. Plan provisions and funding meet the requirements of the Employee Retirement Income Security Act of 1974. Pension benefits are based on an employee reaching the normal retirement age of 65. The amounts are accumulated by multiplying the employee’s average base salary by the number of years of un-interrupted service by a pension factor of 1%. The benefit paid out is calculated using a normal form straight line annuity for a single person. The benefits paid out are not subject to any deduction for social security or other offset amounts.

Other Benefits

We also provide all employees with a 401(k) plan, health and dental coverage, company-paid term life insurance, disability insurance, paid time off and paid holidays. These benefits are typical within our industry, are designed to be competitive with overall market practices, and are in place to attract and retain the executives and employees needed to operate our business.

Severance and Change of Control Agreements.

Mr. Bradley and Mr. Clark are entitled to certain severance and change of control benefits. These agreements are described below in the section entitled “Potential Payments Upon Termination or Change in Control.”