sec document
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant / /
Filed by a Party other than the Registrant /X/
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Under Rule 14a-12
THE LAMSON & SESSIONS CO.
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(Name of Registrant as Specified in Its Charter)
STARBOARD VALUE AND OPPORTUNITY MASTER FUND LTD.
PARCHE, LLC
ADMIRAL ADVISORS, LLC
RAMIUS CAPITAL GROUP, L.L.C.
C4S & CO., L.L.C.
PETER A. COHEN
MORGAN B. STARK
JEFFREY M. SOLOMON
THOMAS W. STRAUSS
MICHAEL CAPORALE, JR.
WILLIAM J. FOX
JEFFREY C. SMITH
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(Name of Persons(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials:
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/ / Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed
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PRELIMINARY COPY SUBJECT TO COMPLETION
DATED APRIL __, 2007
STARBOARD VALUE AND OPPORTUNITY MASTER FUND LTD.
______________, 2007
Dear Fellow Shareholder:
Starboard Value and Opportunity Master Fund Ltd. ("Starboard") and the
other participants in this solicitation (collectively, the "Ramius Group") are
the beneficial owners of an aggregate of 1,569,338 shares of Common Stock of The
Lamson & Sessions Co. ("Lamson" or the "Company"), representing approximately
9.9% of the outstanding shares of common stock of the Company. For the reasons
set forth in the attached Proxy Statement, the Ramius Group wants to ensure that
the Board of Directors of Lamson is fully and adequately exploring strategic
alternatives as the Company has run two strategic review processes in the past
that failed to yield a sale or disposition of either the Company's PVC Pipe
business or the entire Company. Additionally, the Ramius Group believes that the
nominees it has proposed for election to the Lamson Board of Directors are
better suited than the Company's nominees to implement necessary strategic and
operational changes should the Company's strategic alternatives review not
result in a sale of the Company. The Ramius Group is therefore seeking your
support at the annual meeting of shareholders scheduled to be held at
________________________________________________ on ________ __, 200, at __:__
_.M. (local time) for the following:
To elect Starboard's slate of four nominees to the Board of
Directors to serve as Class I directors.
The Ramius Group urges you to carefully consider the information contained
in the attached Proxy Statement and then support its efforts by signing, dating
and returning the enclosed WHITE proxy card today. The attached Proxy Statement
and the enclosed WHITE proxy card are first being furnished to the shareholders
on or about _____________, 2007.
If you have already voted for the incumbent management slate, you have
every right to change your vote by signing, dating and returning a later dated
proxy.
If you have any questions or require any assistance with your vote, please
contact MacKenzie Partners, Inc., which is assisting us, at their address and
toll-free numbers listed on the following page.
Thank you for your support.
Jeffrey C. Smith
Starboard Value and Opportunity Master
Fund Ltd.
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IF YOU HAVE ANY QUESTIONS, REQUIRE ASSISTANCE IN
VOTING YOUR WHITE PROXY CARD,
OR NEED ADDITIONAL COPIES OF STARBOARD'S PROXY MATERIALS, PLEASE CALL
MACKENZIE PARTNERS, INC. AT THE PHONE NUMBERS LISTED BELOW.
MACKENZIE
PARTNERS, INC.
105 Madison Avenue
New York, NY 10016
proxy@mackenziepartners.com
---------------------------
(212) 929-5500 (Call Collect)
or
TOLL-FREE (800) 322-2885
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2007 ANNUAL MEETING OF SHAREHOLDERS
OF
THE LAMSON & SESSIONS CO.
-------------------------
PROXY STATEMENT
OF
STARBOARD VALUE AND OPPORTUNITY MASTER FUND LTD.
-------------------------
PLEASE SIGN, DATE AND MAIL THE ENCLOSED WHITE PROXY CARD TODAY
Starboard Value and Opportunity Master Fund Ltd., a Cayman Islands
exempted company ("Starboard"), is a significant shareholder of The Lamson &
Sessions Co., an Ohio corporation ("Lamson" or the "Company"). Starboard is
writing to you in connection with the election of four nominees to the board of
directors of Lamson (the "Lamson Board") at the annual meeting of shareholders
scheduled to be held at _______________________________________ on _________ __,
2007, at __:__ _.M. (local time), including any adjournments or postponements
thereof and any meeting which may be called in lieu thereof (the "Annual
Meeting"). This proxy statement (this "Proxy Statement") and the enclosed WHITE
proxy card are first being furnished to shareholders on or about ___________,
2007.
This Proxy Statement and the enclosed WHITE proxy card are being furnished
to shareholders of Lamson by Starboard in connection with the solicitation of
proxies from Lamson's shareholders for the following:
To elect Starboard's director nominees, Michael Caporale, Jr., William J.
Fox, Jeffrey C. Smith and Jeffrey M. Solomon (the "Ramius Nominees") to
serve as Class I directors of the Company, in opposition to Lamson's
incumbent directors whose terms expire at the Annual Meeting.
Starboard, Parche, LLC, a Delaware limited liability company ("Parche"),
Admiral Advisors, LLC, a Delaware limited liability company ("Admiral
Advisors"), Ramius Capital Group, L.L.C., a Delaware limited liability company
("Ramius Capital"), C4S & Co., L.L.C., a Delaware limited liability company
("C4S"), Peter A. Cohen ("Mr. Cohen"), Morgan B. Stark ("Mr. Stark"), Thomas W.
Strauss ("Mr. Strauss"), Jeffrey M. Solomon ("Mr. Solomon"), Jeffrey C. Smith
("Mr. Smith"), William J. Fox ("Mr. Fox") and Michael Caporale, Jr. ("Mr.
Caporale") are members of a group (the "Ramius Group" or "we") formed in
connection with this proxy solicitation and are deemed participants in this
proxy solicitation.
Ohio law generally provides that shareholders have cumulative voting
rights with respect to the election of directors if written notice that
cumulative voting is desired is given to the President, a Vice President or the
Secretary of the company at least forty-eight hours before the Annual Meeting.
We intend to give such written notice to invoke our right to cumulate votes for
the election of the Ramius Nominees. Cumulative voting rights entitle you to
give a nominee as many votes as is equal to the number of shares you own
multiplied by the number of directors to be elected, or you may distribute your
votes among the nominees as you see fit. We are soliciting the discretionary
authority to cumulate votes, and the persons named as proxies on our proxy card
will have the authority to cumulate votes at their discretion at the Annual
Meeting. We will use the authority granted to us by the enclosed WHITE proxy
card to cumulate votes at our discretion for all or a portion of the Ramius
Nominees in order to assure that the maximum number of Ramius Nominees are
elected to the Lamson Board.
Lamson has set the record date for determining shareholders entitled to
notice of and to vote at the Annual Meeting as ______________, 2007 (the "Record
Date"). The mailing address of the principal executive offices of Lamson is
25701 Science Park Drive, Cleveland, Ohio 44122. Shareholders of record at the
close of business on the Record Date will be entitled to vote at the Annual
Meeting. According to Lamson, as of the Record Date, there were _____________
shares of common stock, no par value per share (the "Shares"), outstanding and
entitled to vote at the Annual Meeting. As of the date hereof, the members of
the Ramius Group are the beneficial owners of an aggregate of 1,569,338 Shares,
which represents approximately 9.9% of the Shares outstanding (based on
information publicly disclosed by the Company). The participants in this
solicitation intend to cumulate votes in respect of such Shares at their
discretion for all or a portion of the Ramius Nominees in order to assure that
the maximum number of Ramius Nominees are elected to the Lamson Board.
THIS SOLICITATION IS BEING MADE BY THE RAMIUS GROUP AND NOT ON BEHALF OF THE
BOARD OF DIRECTORS OR MANAGEMENT OF LAMSON. THE RAMIUS GROUP IS NOT AWARE OF ANY
OTHER MATTERS TO BE BROUGHT BEFORE THE ANNUAL MEETING. SHOULD OTHER MATTERS,
WHICH THE RAMIUS GROUP IS NOT AWARE OF A REASONABLE TIME BEFORE THIS
SOLICITATION, BE BROUGHT BEFORE THE ANNUAL MEETING, THE PERSONS NAMED AS PROXIES
IN THE ENCLOSED WHITE PROXY CARD WILL VOTE ON SUCH MATTERS IN THEIR DISCRETION.
THE RAMIUS GROUP URGES YOU TO SIGN, DATE AND RETURN THE WHITE PROXY CARD IN
FAVOR OF THE ELECTION OF ITS NOMINEES.
IF YOU HAVE ALREADY SENT A PROXY CARD FURNISHED BY LAMSON MANAGEMENT TO LAMSON,
YOU MAY REVOKE THAT PROXY AND VOTE FOR THE ELECTION OF THE RAMIUS NOMINEES BY
SIGNING, DATING AND RETURNING THE ENCLOSED WHITE PROXY CARD. THE LATEST DATED
PROXY IS THE ONLY ONE THAT COUNTS. ANY PROXY MAY BE REVOKED AT ANY TIME PRIOR TO
THE ANNUAL MEETING BY DELIVERING A WRITTEN NOTICE OF REVOCATION OR A LATER DATED
PROXY FOR THE ANNUAL MEETING TO THE RAMIUS GROUP, C/O MACKENZIE PARTNERS, INC.
WHICH IS ASSISTING IN THIS SOLICITATION, OR TO THE SECRETARY OF LAMSON, OR BY
VOTING IN PERSON AT THE ANNUAL MEETING.
-2-
IMPORTANT
YOUR VOTE IS IMPORTANT, NO MATTER HOW MANY OR HOW FEW SHARES YOU OWN. THE
RAMIUS GROUP URGES YOU TO SIGN, DATE, AND RETURN THE ENCLOSED WHITE PROXY CARD
TODAY TO VOTE FOR THE ELECTION OF THE RAMIUS NOMINEES.
The Ramius Group is soliciting the discretionary authority to cumulate
votes, and the persons named as proxies on the enclosed WHITE proxy card will
have the authority to cumulate votes at their discretion at the Annual Meeting.
The Ramius Group will use the authority granted to it by the enclosed WHITE
proxy card to cumulate votes at its discretion for all or a portion of the
Ramius Nominees in order to assure that the maximum number of Ramius Nominees
are elected to the Lamson Board. For information concerning voting procedures at
the Annual Meeting, see "Voting and Proxy Procedures."
o If your Shares are registered in your own name, please sign and date the
enclosed WHITE proxy card and return it to the Ramius Group, c/o MacKenzie
Partners, Inc., in the enclosed envelope today.
o If any of your Shares are held in the name of a brokerage firm, bank, bank
nominee or other institution on the Record Date, only it can vote such Shares
and only upon receipt of your specific instructions. Accordingly, please
contact the person responsible for your account and instruct that person to
execute on your behalf the WHITE proxy card. The Ramius Group urges you to
confirm your instructions in writing to the person responsible for your
account and to provide a copy of such instructions to the Ramius Group, c/o
MacKenzie Partners, Inc., who is assisting in this solicitation, at the
address and telephone numbers set forth below, and on the back cover of this
Proxy Statement, so that we may be aware of all instructions and can attempt
to ensure that such instructions are followed.
If you have any questions regarding your proxy, or need
assistance in voting your Shares, please call:
MACKENZIE
PARTNERS, INC.
105 Madison Avenue
New York, NY 10016
proxy@mackenziepartners.com
---------------------------
(212) 929-5500 (Call Collect)
or
TOLL-FREE (800) 322-2885
-3-
BACKGROUND TO SOLICITATION
We are significant shareholders of the Company. The Ramius Group owns in
the aggregate 1,569,338 Shares, representing approximately 9.9% of the issued
and outstanding common stock of the Company, which Shares were purchased in the
open market, except as otherwise noted on Schedule I, for a total purchase price
of approximately $35,741,459, including brokerage commissions.
The following is a chronology of events leading up to this proxy
solicitation:
o On November 28 and 29, 2006, certain representatives of Ramius Capital
met with Lamson's Chief Financial Officer to discuss the merits of the
Company's stated strategy of pursuing acquisitions to diversify away
from the PVC Pipe business especially in light of the possibility that
such acquisitions could be executed at multiples significantly higher
than where Lamson trades on a stand-alone basis. The Ramius Capital
representatives specifically questioned the actions taken by the
Company to 1) expand the Company's credit facility from $125 million to
$250 million and 2) call a special shareholder meeting to double the
authorized shares of the Company from 20 million shares to 40 million
shares.
o On December 4, 2006, Admiral Advisors, an affiliate of Ramius Capital,
delivered a letter to Lamson's President and Chief Executive Officer
expressing its belief that the Shares are significantly undervalued and
highlighting several concerns about certain aspects of the strategy and
direction of the Company. Admiral Advisors expressed its view that
shareholder value would be significantly enhanced if the Company
executed a sale of the Company's PVC Pipe business and repurchased $60
million - $120 million of its outstanding shares of common stock.
o On December 15, 2006, certain representatives of Ramius Capital met
with Lamson's President and Chief Executive Officer and its Chief
Financial Officer to discuss their concerns regarding the Company's
strategy and the prospects for a sale of the Company's PVC Pipe
business.
o On January 18, 2007, Admiral Advisors delivered a letter to Lamson's
President and Chief Executive Officer and the Lamson Board urging the
Lamson Board to immediately hire a reputable investment bank to fully
explore all strategic alternatives to maximize shareholder value,
including both a sale of the Company's PVC Pipe business and a sale of
the Company. Admiral Advisors also stated in the letter that it wanted
to discuss immediate representation on the Lamson Board, and in the
event an agreement could not be reached on Board representation,
Admiral Advisors stated that it intended to nominate directors for
election at the Annual Meeting.
-4-
o On February 12, 2007, Lamson issued a press release announcing that it
had engaged Perella Weinberg Partners, an independent investment bank,
to assist the Lamson Board and management of the Company in the
evaluation of the Company's strategic and financial alternatives.
o On February 12, 2007, Starboard delivered a letter to Lamson nominating
William J. Fox, Lee D. Meyer, Jeffrey C. Smith and Jeffrey M. Solomon
for election to the Lamson Board at the Annual Meeting.
o On February 13, 2007, certain representatives of Ramius Capital
traveled to Cleveland, Ohio to meet with several members of the Lamson
Board and Lamson's senior management to discuss appropriate Board
representation without the necessity of a proxy contest. However, the
Ramius Capital representatives were unable to reach an agreement with
Lamson.
o On April 26, 2007, Starboard delivered a supplemental letter to Lamson
substituting Michael Caporale, Jr. for Lee D. Meyer as one of its
nominees for election to the Lamson Board at the Annual Meeting. The
reason for such substitution, as described in the supplemental letter,
was that Mr. Meyer is a member of the board of directors of a
competitor of the Company, which was expected to be sold by the end of
April 2007; however, as a result of delays in the sale transaction, Mr.
Meyer decided to withdraw as a nominee.
o On April 26, 2007, Admiral Advisors delivered a letter to the President
and Chief Executive Officer of the Company expressing concern over the
delay in scheduling the 2007 Annual Meeting and requesting that the
Company either promptly set a date for the 2007 Annual Meeting or
alternatively, immediately name two of the Ramius Nominees to the
Lamson Board.
PROPOSAL
ELECTION OF DIRECTORS
The Lamson Board is divided into three classes serving staggered
three-year terms and the term of the Class I directors of the Lamson Board will
expire at the Annual Meeting. On December 8, 2006, the Lamson Board expanded the
size of the Board from nine directors to ten and elected William E. MacDonald,
III to fill the vacancy created by such expansion. The Company's public filings
do not specify to which class Mr. MacDonald was elected. In a filing with the
Securities and Exchange Commission (the "SEC") on April 21, 2006, the Company
reported that John B. Schulze, a Class III director and Lamson's current
Chairman of the Board, notified Lamson that he would retire from all his
positions at Lamson, including director, no later than the Annual Meeting and
the Company reiterated that position in an SEC filing on November 1, 2006.
However, in an SEC filing on March 15, 2007, the Company reported that Mr.
Schulze will continue to serve as non-executive Chairman of the Lamson Board
following the Annual Meeting. Taking into consideration the foregoing, it is the
Ramius Group's belief that four Class I directors of the Lamson Board will stand
for election at the Annual Meeting. In the event that the number of Class I
directors to stand for election at the Annual Meeting is less than four and one
or more directors of another class will stand for election, then one or more of
the Ramius Nominees, as appropriate, will be deemed to stand for election to
such other class or classes.
-5-
The Ramius Group is seeking your support at the Annual Meeting to elect
the Ramius Nominees in opposition to Lamson's director nominees. The Ramius
Group is soliciting the discretionary authority to cumulate votes, and the
persons named as proxies on the enclosed WHITE proxy card will have the
authority to cumulate votes at their discretion. The Ramius Group will use the
authority granted to it by the enclosed WHITE proxy card to cumulate votes in
its discretion for all or a portion of the Ramius Nominees in order to assure
that the maximum number of Ramius Nominees are elected to the Lamson Board. For
information concerning voting procedures at the Annual Meeting, see "Voting and
Proxy Procedures."
REASONS FOR THE SOLICITATION
WE BELIEVE THE PVC PIPE BUSINESS DIMINISHES THE VALUE OF THE COMPANY,
AND THAT IT SHOULD AND CAN BE SOLD.
For the reasons outlined below, we believe it would be in the best
interests of the Lamson shareholders for management and the Lamson Board to
expeditiously explore and consummate a sale of the PVC Pipe business in order to
focus on the core business opportunities within the Carlon and Lamson Home
Products businesses. We believe the Company's recent announcement that it will
consider strategic alternatives is a step in the right direction, particularly
if it represents a bona fide intention to seriously pursue a sale of the PVC
Pipe business or a sale of the entire Company for an acceptable premium.
However, we are concerned about management and the Lamson Board's
commitment to consummating a transaction. In fact, the Lamson Board has
conducted two sales processes that did not yield a sale of either the PVC Pipe
business or the entire Company. In December 1998, following a previously
announced strategic evaluation process, the Company agreed to sell the PVC Pipe
business to Eagle Pacific Industries, Inc.; however, that sale was never
consummated. In October 2004, the Company retained Brown, Gibbons, Lang &
Company as its financial advisor to explore strategic alternatives, including
the possible sale of the Company, but no transaction was completed.
WE BELIEVE THAT PRIOR TO OUR PUBLIC STATEMENTS REGARDING THE DIRECTION OF THE
COMPANY, MANAGEMENT AND THE BOARD WERE PURSUING A FLAWED STRATEGY.
Prior to our involvement in Lamson, the Company was pursuing a publicly
disclosed strategy of pursuing acquisitions to diversify away from the PVC Pipe
business. In connection with its pursuit of this strategy, the Company expanded
its credit facility from $125 million to $250 million and called a special
shareholders meeting to double the authorized shares of common stock of the
Company from 20 million shares to 40 million shares. In our view, it would make
much more sense for the Company to sell the PVC Pipe business and use cash
resources to repurchase its own stock so long as the Company's shares continue
to be undervalued. We believe that Lamson should not be pursuing any such
acquisition strategy until its shares are trading at multiples similar to those
of its peers, and only then might it make sense (and, in such circumstances,
only to pursue highly selective acquisitions which would leverage the Carlon and
-6-
Lamson Home Products distribution channels). We believe our nominees will
represent the Lamson shareholders' best interests in helping the Board analyze
potential acquisitions should the time come and make sure the Lamson
shareholders' interests are represented in those decisions.
WE BELIEVE CARLON AND LAMSON HOME PRODUCTS ARE EXTREMELY ATTRACTIVE
BUSINESSES.
We believe Lamson has a terrific opportunity to build upon the strong
brand names and value-added product portfolios of the Carlon and Lamson Home
Products businesses. Those opportunities deserve the full attention of
management and the Lamson Board.
o Over the past several years, the Carlon and Lamson Home Products
businesses, which together represented approximately 67% of the
Company's revenue in 2006, have shown consistent improvements in
revenue and operating income driven by strong end market demand, the
ability to pass through raw material price increases to customers, and
significant process improvements including manufacturing automation,
inventory management, and distribution efficiencies.
o Carlon's revenue has grown by approximately 39% from $188 million in
2001 to $261 million in 2006, and operating margin has improved from
7.8% in 2001 to 14.6% in 2006. THIS REPRESENTS A 6.8% REVENUE COMPOUND
ANNUAL GROWTH RATE ("CAGR") AND A 680 BASIS POINT IMPROVEMENT IN
OPERATING MARGIN.
o Lamson Home Products revenue has grown by approximately 82% from $62
million in 2001 to $113 million in 2006, and operating margin has
improved from 6.0% in 2001 to 13.8% in 2006. THIS REPRESENTS A 12.8%
REVENUE CAGR AND A 780 BASIS POINT IMPROVEMENT IN OPERATING MARGIN.
Conversely, we believe despite meaningful operational improvements over
the past several years in plant automation and distribution, the PVC Pipe
business, which represented the remaining approximately 33% of the Company's
revenue in 2006, continues to be extremely volatile based on cyclical end market
demand and high correlation to raw material input costs. We believe the
volatility associated with the PVC Pipe business will continue to demand
management's increased attention and distract management from focusing on the
core businesses.
We believe that in the current market environment, the Company has a prime
opportunity to sell the PVC Pipe business at attractive terms. On January 16,
2007, PW Eagle, Inc., a competitor in the PVC pipe market ("PWEI"), announced a
definitive agreement to be acquired by J-M Manufacturing Company, Inc. for
$33.50 per share (the "PWEI Acquisition"). Based on analyst estimates, this
purchase price represents an Enterprise Value / Normalized EBITDA multiple of
between 6.4x and 7.0x. The PWEI Acquisition further demonstrates, in our
opinion, that the current market has strong demand for assets similar to the
Company's PVC Pipe business. We believe, therefore, that the Company currently
has an excellent opportunity to maximize shareholder value by divesting itself
of this non-core asset.
-7-
We are cognizant of the potential structural issues surrounding a sale and
separation of the PVC Pipe business from Lamson's other businesses. However,
regardless of any structural challenges or opportunities, we believe the
Company's stock price is deeply discounted in the market today and that this
situation can and must be remedied. If management and the Lamson Board determine
after conducting a thorough analysis that the PVC Pipe business represents a
core piece of the consolidated Lamson business and should not be separated from
the Carlon and Lamson Home Products businesses, then we believe the Company
should explore a value-maximizing event through the sale of the entire Company.
The Ramius Nominees are fully committed to our platform to increase
shareholder value and we believe their presence on the Lamson Board will help
assure that a process for the sale of the PVC Pipe business or the entire
Company is carried forward vigorously.
WE BELIEVE THE RAMIUS NOMINEES HAVE THE EXPERIENCE NECESSARY TO OVERSEE AN
EFFORT TO MAXIMIZE SHAREHOLDER VALUE THROUGH STRATEGIC ALTERNATIVES AND
CORPORATE GOVERNANCE REFORMS
The Ramius Group, as one of the largest shareholders of Lamson, has a
vested financial interest in the maximization of the value of your Shares. Our
interests are aligned with the interests of all shareholders. We believe that
the Ramius Nominees have extensive experience in private and public investment,
business management and mergers and acquisitions as further discussed in their
biographical extracts below. For example, Mr. Caporale was President, Chief
Executive Officer and a director of AMH Holdings, Inc., when AMH sold a 50%
equity interest in AMH to affiliates of Investcorp S.A. in December 2004. In
addition, Mr. Fox was Co-Chairman of the Board of Loehmanns Holdings, Inc
(Nasdaq:LHMS) from 2000 until Loehmanns was sold to a private equity fund in
October 2004. Mr. Fox served as Chairman of the Special Committee overseeing the
sale process and supervised the negotiations of the transaction. If elected to
the Lamson Board, the Ramius Nominees will endeavor to use their collective
experience to oversee the Company with a goal of implementing the strategic and
operational changes espoused by the Ramius Group as well as exploring other
alternatives to maximize shareholder value. There can be no assurance that these
goals will be achieved if the Ramius Nominees are elected.
The Ramius Nominees, if elected, will represent a minority of the Lamson
Board. If elected, the Ramius Nominees will, subject to their fiduciary duties
as directors, work with the other members of the Lamson Board to take those
steps that they deem are necessary to facilitate the consummation of a sale of
the PVC Pipe business or the entire Company in a competitive sales process. The
Ramius Nominees, if elected, would also lobby the Lamson Board to redeem the
Company's "poison pill" shareholders' rights plan and remove other anti-takeover
devices, as described below, in order to allow Lamson shareholders to decide for
themselves whether they want to accept any third-party acquisition proposal.
Although the Ramius Nominees will not be able to adopt any measures without the
support of at least some members of the current Lamson Board, we believe that
the election of the Ramius Nominees will send a strong message to the Lamson
Board that immediate action must be taken to maximize shareholder value.
-8-
WE BELIEVE LAMSON SHOULD REDEEM ITS POISON PILL AND SHOULD ELIMINATE FROM ITS
ARTICLES OF INCORPORATION AND CODE OF REGULATIONS CERTAIN ANTI-TAKEOVER
PROVISIONS
In 1998, the Lamson Board adopted, without shareholder approval, a rights
plan or "poison pill" purportedly to protect the interests of Lamson's
shareholders in the event of a potential takeover in a manner or on terms not
approved by the Lamson Board as being in the best interests of Lamson's
shareholders. We believe the poison pill has the effect of entrenching the
Lamson Board and management. In our opinion, this lack of management
accountability to shareholders adversely affects shareholder value. If the
Ramius Nominees are elected, they will use their best efforts to cause the
Lamson Board to terminate the poison pill by redeeming all of the outstanding
rights. Historically, proponents of poison pills have asserted that they enable
a board of directors to respond in an orderly fashion to unsolicited takeover
bids by providing sufficient time to carefully evaluate the fairness of such a
bid. We oppose Lamson's poison pill because we believe that it places such an
effective obstacle to a takeover bid that it serves to entrench the Lamson Board
and management. We believe that Lamson's poison pill forces a would-be acquirer
to negotiate its bid for Lamson with management, instead of making its offer
directly to the shareholders of Lamson. In our opinion, the power of the Lamson
Board and management to block any bid that does not leave them in control
adversely affects shareholder value. We further believe that the effect of their
poison pill is to insulate management from the most fundamental accountability
to shareholders by providing management and the Lamson Board with a veto over
takeover bids, even when shareholders might favorably view such bids.
If elected, the Ramius Nominees would also attempt to work with the Lamson
Board to take other measures to improve the Company's corporate governance,
including declassifying the Lamson Board. A classified board of directors limits
the ability of shareholders to elect all directors on an annual basis. We
believe that the annual election of directors is the primary means for
shareholders to influence corporate governance policies and to hold management
accountable for its implementation of those policies. We view classified boards
as having the effect of insulating directors from being accountable to a
corporation's shareholders.
In addition to the classified board, the Company's Articles of
Incorporation and Code of Regulations contain numerous anti-takeover provisions
that we believe infringe on the shareholders' rights to determine what is best
for the Company and serve to entrench current management. These anti-takeover
provisions include, but are not limited to, the following:
o Special meetings of shareholders may only be called by the
shareholders to the extent they hold 50% of the outstanding voting
shares;
o Directors may only be removed by the shareholders for cause and only
by a vote of at least 80% of the outstanding voting shares;
o Certain business combinations with shareholders who hold 5% or more
of the outstanding voting shares require the approval of at least
80% of the outstanding voting shares; and
o The anti-takeover provisions above, as well as certain other
provisions, may be amended or repealed by the shareholders only by
the affirmative vote of at least 80% of the outstanding voting
shares.
-9-
We believe the foregoing anti-takeover provisions disenfranchise
shareholders and have the effect of insulating directors from being accountable
to the shareholders. If elected, the Ramius Nominees will, subject to their
fiduciary duties, lobby the Lamson Board to eliminate the Company's
anti-takeover provisions.
-10-
THE RAMIUS NOMINEES
The following information sets forth the name, age, business address,
present principal occupation, and employment and material occupations,
positions, offices, or employments for the past five years of each of the Ramius
Nominees. This information has been furnished to the Ramius Group by the Ramius
Nominees. The Ramius Nominees are citizens of the United States of America.
MICHAEL CAPORALE, JR. (AGE 55) served as President, Chief Executive
Officer and a director of Associated Materials, Inc., a leading North American
manufacturer and distributor of exterior building products ("AMI"), from April
2002 until June 2006 and as Chairman of the Board of AMI from December 2004
until December 2006. Mr. Caporale also served as President, Chief Executive
Officer and a director of Associated Materials Holdings Inc., the direct parent
of AMI ("Holdings"), from April 2002 until June 2006, and as President, Chief
Executive Officer and a director of AMH Holdings, Inc., the direct parent of
Holdings ("AMH"), from March 2004 until June 2006. In December 2004, AMH sold a
50% equity interest in AMH to affiliates of Investcorp S.A. From 2000 until
April 2002, Mr. Caporale served as President and Chief Executive Officer of
AMI's Alside division. In April 2002, AMI was transitioned from a public company
to private ownership following the completion of a $436 million cash tender
offer by Harvest Partners, a private equity firm. Prior to joining AMI, from
1995 through 2000, Mr. Caporale served as President of Great Lakes Window, a
division of PlyGem Industries, Inc., a manufacturer of high-end vinyl windows
for the replacement window market. From 1992 through 1995, Mr. Caporale served
as Vice President, Operations of Enerpac, a division of Applied Power, Inc.,
where he developed logistic systems for the U.S., Asia and Europe markets. Mr.
Caporale began his career with General Electric, Inc. ("GE") where he spent
seventeen years in various operating positions in GE's Appliance, Jet Engine and
Transformer businesses. Mr. Caporale received a B.S. in Civil Engineering and an
M.B.A. from Syracuse University. The principal business address of Mr. Caporale
is 3668 Shetland Trail, Richfield, Ohio 44286. As of the date hereof, Mr.
Caporale does not own any securities of Lamson nor has he made any purchases or
sales of any securities of Lamson during the past two years.
WILLIAM J. FOX (AGE 50) is currently Executive Chairman of the Board
(since August 2006) and a director (since September 2004) of Nephros, Inc.
(AMEX:NEP), a medical device company. From October 2004 until May 2006, Mr. Fox
was Vice Chairman of Barington Capital and several of its affiliates, a group of
equity investment funds. Until December 2006, Mr. Fox had been a member of the
Barington Advisory Board since the founding of the Barington Funds in 1999. From
October 2004 until May 2006, Mr. Fox served as President, Chief Executive
Officer and a director of LQ Corporation (OTCBB:LQCI), a marketer of commercial
and government security solutions, and from December 2004 until May 2006, Mr.
Fox served as President, Chief Executive Officer and a director of Dynabazaar
Inc. (OTCBB:FAIM), which was formerly engaged in online auctions of surplus
assets. From November 2005 until May 2006, Mr. Fox also served as a member of
the Executive Committee of Register.com (Cayman) L.P., a provider of domain name
registration and internet services. From February 1999 until October 2004, Mr.
Fox served as Chairman, President, Chief Executive Officer and a director of
AKI, Inc. ("AKI"), a marketing and interactive advertising company, and during
that time, Mr. Fox also served as President, Chief Executive Officer and a
director of AKI Holding Corp., the parent of AKI. Prior to joining AKI, Mr. Fox
-11-
served as President-Strategic & Corporate Development of Revlon Worldwide, Inc.,
Chief Executive Officer of Revlon Technologies, Inc., Senior Executive Vice
President of Revlon, Inc. and Senior Vice President of MacAndrews & Forbes
Holdings Inc. ("MacAndrews"). Mr. Fox joined MacAndrews in 1983 and held various
senior executive positions in MacAndrews and in several of its subsidiaries and
affiliates, including Revlon, Inc., Brooks Drugs, The Coleman Company, First
Gibraltar Bank Holdings, Wilbur Chocolate, New World Entertainment and
Technicolor Inc. Mr. Fox has also served as a director of several public
companies, including Loehmann's Holding Inc. (October 2000 through October
2004), MM Companies Inc. (now George Foreman Enterprises Inc.) (2003-2004),
Revlon, Inc. (NYSE:REV) (1996-1999) and The Hain Food Group (NASD:HAIN)
(1996-1999). Mr. Fox received a B.B.A. (magna cum laude) in Public Accounting
from Pace University Lubin School and an M.B.A. (with distinction) in Public
Accounting from Pace University Graduate School. Mr. Fox is also a Certified
Public Accountant. The principal business address of Mr. Fox is c/o Nephros,
Inc., Columbia University Audubon Technology Center, 3960 Broadway, New York,
New York 10032. As of the date hereof, Mr. Fox does not own any securities of
Lamson nor has he made any purchases or sales of any securities of Lamson during
the past two years.
JEFFREY C. SMITH (AGE 34) is a Partner of Ramius Capital, a position he
has held since February 2007, and a member of Ramius Capital's Management Board.
Prior to February 2007, Mr. Smith served as Executive Managing Director (from
July 2006) and Managing Director (from January 2004 to July 2006) of Ramius
Capital. Mr. Smith currently heads Ramius Capital's Private Investment in Public
Equity business and co-heads Ramius Capital's Opportunistic Value Investing
business. He has been employed by Ramius Capital since January 1998. Prior to
joining Ramius Capital, he served as Vice President of Strategic Development and
Investor Relations for The Fresh Juice Company, Inc. (NASD:FRSH), a manufacturer
and distributor of fresh squeezed and frozen fresh squeezed citrus juices and
other non-carbonated beverages, from February 1996 until January 1998. From
August 1994 until February 1996, Mr. Smith was a financial analyst in the
Mergers and Acquisitions Department at LSG Advisors, a division of Societe
Generale Securities Corporation. Mr. Smith served on the Board of Directors of
The Fresh Juice Company, Inc. from April 1996 until February 1999 and Jotter
Technologies, Inc., an Internet infomediary company, from January 2000 to
September 2000. Mr. Smith has served as a member of the Board of Directors of S1
Corporation (NASD:SONE), a provider of internet based financial services
solutions, since May 2006. Mr. Smith has served as a member of the Executive
Committee of Register.com (Cayman) L.P., a provider of domain name registration
and internet services, since December 2005. Mr. Smith is a General Securities
Registered Representative. Mr. Smith received a B.S. in Economics with
concentrations in finance and accounting from the Wharton School of The
University of Pennsylvania. The principal business address of Mr. Smith is c/o
Ramius Capital Group, L.L.C., 666 Third Avenue, 26th Floor, New York, New York
10017. As of the date hereof, Ramius Capital may be deemed to beneficially own
1,569,338 shares of Common Stock of Lamson. As of the date hereof, Mr. Smith
does not own any securities of Lamson nor has he made any purchases or sales of
any securities of Lamson during the past two years. For information regarding
purchases and sales during the past two years by Ramius Capital and its
affiliates in securities of Lamson (without conceding that any such information
is required to be disclosed in this Proxy Statement), please see EXHIBIT A.
-12-
JEFFREY M. SOLOMON (AGE 40) is a Managing Member of Ramius Capital and a
member of Ramius Capital's Executive Committee and Management Board. Along with
Morgan Stark, Mr. Solomon is responsible for overseeing Ramius Capital's
multi-strategy and single strategy investment platforms. Mr. Solomon was
previously responsible for managing a number of specific investment portfolios
at Ramius Capital and, until recently, was also responsible for overseeing
Ramius Capital's technology, operations and finance functions. Mr. Solomon
joined Ramius Capital when it was founded in 1994. From 1991 to 1994, Mr.
Solomon was at Republic New York Securities Corporation, the brokerage affiliate
of Republic National Bank (now part of the HSBC Group) ("Republic"). As head of
Corporate Development and Strategic Planning, Mr. Solomon coordinated the budget
process and marketing effort of Republic and directed its numerous regulatory
filings with the Federal Reserve Board. In 1993, Mr. Solomon supervised
Republic's expansion into Europe by overseeing the creation of its U.K.
affiliate. He was named Republic's Chief Administrative Officer and was
responsible for supervising the integration of systems and operations on a
worldwide basis. He was also a member of the Credit Committee of Republic's
Board of Directors. Prior to joining Republic, Mr. Solomon was in the Mergers
and Acquisitions Group at Shearson Lehman Brothers. Mr. Solomon was also part of
the internal corporate finance team at Shearson Lehman Brothers that worked
closely with senior management in evaluating the company's operations, capital
usage and investment strategies, including the acquisition and disposition of
corporate assets. Currently, Mr. Solomon serves on the Board of Directors of
Hale & Hearty Soups, a New York based restaurant chain and NuGo Nutrition, the
manufacturer of NuGo Nutrition Bars. Mr. Solomon received a B.A. in Economics
from the University of Pennsylvania. The principal business address of Mr.
Solomon is c/o Ramius Capital Group, L.L.C., 666 Third Avenue, 26th Floor, New
York, New York 10017. As of the date hereof, as a Managing Member of Ramius
Capital, Mr. Solomon may be deemed to beneficially own 1,569,338 shares of
Common Stock of Lamson. For information regarding purchases and sales during the
past two years by Ramius Capital and its affiliates in securities of Lamson
(without conceding that any such information is required to be disclosed in this
Proxy Statement), please see EXHIBIT A.
There can be no assurance that the actions the Ramius Nominees intend to
take as described above will be implemented if they are elected or that the
election of the Ramius Nominees will improve the Company's business or otherwise
enhance shareholder value. Your vote to elect the Ramius Nominees does not
constitute a vote in favor of our value enhancing plans for Lamson. Your vote to
elect the Ramius Nominees will, assuming sufficient votes are cast in favor of
the Ramius Nominees, have the legal effect of replacing four incumbent directors
of Lamson with the Ramius Nominees. There can be no assurance that shareholder
value will be maximized as a result of this solicitation or the election of the
Ramius Nominees.
Admiral Advisors, an affiliate of Ramius Capital, and two of the Ramius
Nominees, Messrs. Caporale and Fox, have entered into compensation letter
agreements (the "Compensation Letter Agreements") regarding compensation to be
paid to such Ramius Nominees for their agreement to be named and to serve as
Ramius Nominees and for their services as directors of Lamson, if elected.
Pursuant to the terms of the Compensation Letter Agreements, each nominee will
receive $5,000 in cash from Admiral Advisors as a result of the submission by
Starboard of its nomination of the Ramius Nominees. Upon the Ramius Group's
filing of a definitive proxy statement with the SEC relating to a solicitation
of proxies in favor of each nominee's election as a director at the Annual
Meeting, Admiral Advisors has agreed to allow each nominee to receive a profit
-13-
participation with respect to the sale by Admiral Advisors or one of its
affiliates of the last $20,000 worth of Shares (the "Participation Shares")
beneficially owned by Admiral Advisors or one of its affiliates to a third party
unaffiliated with any member of the Ramius Group. The number of Participation
Shares shall be determined by dividing $20,000 by the closing price of the
Company's common stock on the date of the definitive proxy filing. Each nominee
will receive a cash payment equal to the amount, if any, by which the proceeds
received by Admiral Advisors from the sale of the Participation Shares exceeds
$20,000 in the aggregate.
Starboard and certain other affiliates of Ramius Capital, have signed
letter agreements pursuant to which they agree to indemnify the Ramius Nominees
against claims arising from the solicitation of proxies from Lamson's
shareholders in connection with the Annual Meeting and any related transactions.
Other than as stated herein, there are no arrangements or understandings between
members of the Ramius Group and any of the Ramius Nominees or any other person
or persons pursuant to which the nomination of the Ramius Nominees described
herein is to be made, other than the consent by each of the Ramius Nominees to
be named in this Proxy Statement and to serve as a director of Lamson if elected
as such at the Annual Meeting. None of the Ramius Nominees are a party adverse
to Lamson or any of its subsidiaries or has a material interest adverse to
Lamson or any of its subsidiaries in any material pending legal proceedings.
The Ramius Group does not expect that the Ramius Nominees will be unable
to stand for election, but, in the event that such persons are unable to serve
or for good cause will not serve, the Shares represented by the enclosed WHITE
proxy card will be voted for substitute nominees. In addition, Starboard
reserves the right to nominate substitute persons if Lamson makes or announces
any changes to its Articles of Incorporation or Code of Regulations or takes or
announces any other action that has, or if consummated would have, the effect of
disqualifying the Ramius Nominees. In any such case, Shares represented by the
enclosed WHITE proxy card will be voted for such substitute nominees. Starboard
reserves the right to nominate additional persons, and to use the discretionary
authority granted by the proxies it is soliciting to vote for such additional
nominees, if Lamson increases the size of the Lamson Board above its existing
size or increases the number of directors whose terms expire at the Annual
Meeting. Additional nominations made pursuant to the preceding sentence are
without prejudice to the position of Starboard that any attempt to increase the
size of the current Lamson Board or to reconstitute or reconfigure the classes
on which the current directors serve constitutes an unlawful manipulation of
Lamson's corporate machinery in violation of the Lamson Board's fiduciary
duties.
YOU ARE URGED TO VOTE FOR THE ELECTION OF THE RAMIUS NOMINEES ON THE ENCLOSED
WHITE PROXY CARD.
-14-
VOTING AND PROXY PROCEDURES
Only shareholders of record on the Record Date will be entitled to notice
of and to vote at the Annual Meeting. Shareholders who sell Shares before the
Record Date (or acquire them without voting rights after the Record Date) may
not vote such Shares. Shareholders of record on the Record Date will retain
their voting rights in connection with the Annual Meeting even if they sell such
Shares after the Record Date. Based on publicly available information, the
Ramius Group believes that the only outstanding class of securities of Lamson
entitled to vote at the Annual Meeting is the Shares.
We are asking you to give us discretionary authority to cumulate your
votes to elect the Ramius Nominees. The enclosed WHITE proxy card may only be
voted for the Ramius Nominees and does not confer voting power with respect to
the Company's nominees. Accordingly, you will not have the opportunity to vote
for any of Lamson's nominees. You can only vote for Lamson's nominees by signing
and returning a proxy card provided by Lamson. Shareholders should refer to the
Company's proxy statement for the names, backgrounds, qualifications and other
information concerning the Company's nominees. The participants in this
solicitation intend to vote all of their Shares in favor of all or a portion of
the Ramius Nominees and will not vote their Shares in favor of any of Lamson's
nominees.
QUORUM
In order to conduct the election of directors at the Annual Meeting, the
holders of Shares entitling them to exercise seventy-five percent (75%) of the
voting power of the Company, present in person or by proxy, shall constitute a
quorum All Shares that are voted "FOR", "AGAINST" or "WITHHOLD" will count for
purposes of establishing such quorum and will be treated as Shares entitled to
vote at the Annual Meeting.
CUMULATIVE VOTING FOR ELECTION OF DIRECTORS
In accordance with the cumulative voting rights set forth in Section
1701.55(C) of the Ohio General Corporation Law, to which the Company is subject,
you are entitled to give a nominee as many votes as is equal to the number of
shares you own multiplied by the number of directors to be elected, or you may
distribute your votes among the nominees as you see fit. For example, if you own
100 shares as of the Record Date, and if four directors are to be elected at the
Annual Meeting, you have 400 votes that you can allocate among the nominees in
any manner you choose. If four directors are to be elected at the Annual
Meeting, the four nominees receiving the highest number of affirmative votes at
the Annual Meeting will be elected to the Lamson Board.
Under Ohio law, the exercise of cumulative voting rights is conditioned
upon the giving of written notice that cumulative voting is desired to the
President, a Vice President or the Secretary of the Company at least forty-eight
hours before the Annual Meeting. We intend to give such written notice to invoke
our right to cumulate our votes for the election of the Ramius Nominees.
Shares represented by a valid, unrevoked WHITE proxy card will be voted in
accordance with the recommendations made in this Proxy Statement unless you
otherwise indicate on the proxy card. We are soliciting the discretionary
-15-
authority to cumulate votes, and the persons named as proxies on the enclosed
WHITE proxy card will have the authority to cumulate votes at their discretion
at the Annual Meeting. We will use the authority granted to us by the enclosed
WHITE proxy card to cumulate votes at our discretion for all or a portion of the
Ramius Nominees in order to assure that the maximum number of Ramius Nominees
are elected to the Lamson Board.
A shareholder may cast votes for the Ramius Nominees either by so marking
the ballot at the Annual Meeting or by specific voting instructions sent with a
signed proxy to either the Ramius Group in care of MacKenzie Partners, Inc. at
the address set forth on the back cover of this Proxy Statement or to Lamson at
25701 Science Park Drive, Cleveland, Ohio 44122 or any other address provided by
Lamson.
WITHHELD VOTES
A vote to "WITHHOLD" for any nominee for director will be counted for
purposes of determining whether a quorum is present, but will have no other
effect on the outcome of the vote on the election of directors.
DISCRETIONARY VOTING
Shares held in "street name" and held of record by banks, brokers or
nominees may not be voted by such banks, brokers or nominees unless the
beneficial owners of such Shares provide them with instructions on how to vote.
REVOCATION OF PROXIES
Shareholders of Lamson may revoke their proxies at any time prior to
exercise by attending the Annual Meeting and voting in person (although
attendance at the Annual Meeting will not in and of itself constitute revocation
of a proxy) or by delivering a written notice of revocation. The delivery of a
subsequently dated proxy which is properly completed will constitute a
revocation of any earlier proxy. The revocation may be delivered either to the
Ramius Group in care of MacKenzie Partners, Inc. at the address set forth on the
back cover of this Proxy Statement or to Lamson at 25701 Science Park Drive,
Cleveland, Ohio 44122 or any other address provided by Lamson. Although a
revocation is effective if delivered to Lamson, the Ramius Group requests that
either the original or photostatic copies of all revocations be mailed to the
Ramius Group in care of MacKenzie Partners, Inc. at the address set forth on the
back cover of this Proxy Statement so that Starboard will be aware of all
revocations and can more accurately determine if and when proxies have been
received from the holders of record on the Record Date and the number of
outstanding Shares represented thereby. Additionally, MacKenzie Partners, Inc.
may use this information to contact shareholders who have revoked their proxies
in order to solicit later dated proxies for the election of the Ramius Nominees.
IF YOU WISH TO VOTE FOR THE ELECTION OF THE RAMIUS NOMINEES TO THE LAMSON BOARD,
PLEASE SIGN, DATE AND RETURN PROMPTLY THE ENCLOSED WHITE PROXY CARD IN THE
POSTAGE-PAID ENVELOPE PROVIDED.
-16-
SOLICITATION OF PROXIES
The solicitation of proxies pursuant to this Proxy Statement is being made
by the Ramius Group. Proxies may be solicited by mail, facsimile, telephone,
telegraph, Internet, in person and by advertisements.
Starboard has entered into an agreement with MacKenzie Partners, Inc. for
solicitation and advisory services in connection with this solicitation, for
which MacKenzie Partners, Inc. will receive a fee not to exceed $___,000.00,
together with reimbursement for its reasonable out-of-pocket expenses, and will
be indemnified against certain liabilities and expenses, including certain
liabilities under the federal securities laws. MacKenzie Partners, Inc. will
solicit proxies from individuals, brokers, banks, bank nominees and other
institutional holders. Starboard has requested banks, brokerage houses and other
custodians, nominees and fiduciaries to forward all solicitation materials to
the beneficial owners of the Shares they hold of record. Starboard will
reimburse these record holders for their reasonable out-of-pocket expenses in so
doing. It is anticipated that MacKenzie Partners, Inc. will employ approximately
__ persons to solicit Lamson's shareholders for the Annual Meeting.
The entire expense of soliciting proxies is being borne by the Ramius
Group. Costs of this solicitation of proxies are currently estimated to be
approximately $___,000.00. The Ramius Group estimates that through the date
hereof its expenses in connection with this solicitation are approximately
$___,000.00. The Ramius Group intends to seek reimbursement from Lamson of all
expenses it incurs in connection with the solicitation of proxies for the
election of the Ramius Nominees to the Lamson Board at the Annual Meeting. The
Ramius Group does not intend to submit the question of such reimbursement to a
vote of security holders of the Company.
OTHER PARTICIPANT INFORMATION
Each member of the Ramius Group is a participant in this solicitation. The
principal business of each of Starboard and Parche is serving as a private
investment fund. Each of Starboard and Parche has been formed for the purpose of
making equity investments and, on occasion, taking an active role in the
management of portfolio companies in order to enhance shareholder value. The
principal business of Admiral Advisors is acting as investment manager of
Starboard and managing member of Parche. Ramius Capital is engaged in money
management and investment advisory services for third parties and proprietary
accounts. C4S serves as managing member of Ramius Capital. Mr. Cohen, Mr.
Strauss, Mr. Stark and Mr. Solomon serve as co-managing members of C4S. Mr.
Smith is a Partner of Ramius Capital.
The address of the principal office of each of Parche, Admiral Advisors,
Ramius Capital, C4S, Mr. Cohen, Mr. Stark, Mr. Strauss, Mr. Solomon and Mr.
Smith is 666 Third Avenue, 26th Floor, New York, New York 10017. The address of
the principal office of Starboard is c/o Citco Fund Services (Cayman Islands)
Limited, Corporate Center, West Bay Road, Grand Cayman, Cayman Islands, British
West Indies.
As of the date hereof, Starboard beneficially owns 1,318,244 Shares and
Parche beneficially owns 251,094 Shares. As of the date hereof, Admiral Advisors
(as the investment manager of Starboard and the managing member of Parche) may
be deemed to be the beneficial owner of the 1,318,244 Shares owned by Starboard
-17-
and the 251,094 Shares owned by Parche. As of the date hereof, Ramius Capital
(as the sole member of Admiral Advisors), C4S (as the managing member of Ramius
Capital) and Mr. Cohen, Mr. Stark, Mr. Strauss and Mr. Solomon (as the managing
members of C4S) each may be deemed to be the beneficial owner of the 1,318,244
Shares owned by Starboard and the 251,094 Shares owned by Parche. Mr. Cohen, Mr.
Stark, Mr. Strauss and Mr. Solomon share voting and dispositive power with
respect to the Shares owned by Starboard and Parche by virtue of their shared
authority to vote and dispose of such Shares. Messrs. Cohen, Stark, Strauss and
Solomon disclaim beneficial ownership of such Shares except to the extent of
their pecuniary interest therein. Mr. Smith does not currently beneficially own
any Shares.
For information regarding purchases and sales of securities of Lamson
during the past two years by the members of the Ramius Group, see Schedule I.
On February 13, 2007, the members of the Ramius Group entered into a Joint
Filing and Solicitation Agreement, which was amended and restated on April 26,
2007 as a result of the substitution of Mr. Caporale for Mr. Meyer as a nominee.
Pursuant to this agreement, each member of the Ramius Group agreed to the joint
filing on behalf of each of them of Statements on Schedule 13D with respect to
securities of Lamson and agreed to form the Ramius Group for the purpose of
soliciting proxies or written consents for the election of the Ramius Nominees
to the Lamson Board at the Annual Meeting and for the purpose of taking all
other actions incidental to the foregoing.
Except as set forth in this Proxy Statement (including the Schedules
hereto), (i) during the past 10 years, no participant in this solicitation has
been convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors); (ii) no participant in this solicitation directly or indirectly
beneficially owns any securities of Lamson; (iii) no participant in this
solicitation owns any securities of Lamson which are owned of record but not
beneficially; (iv) no participant in this solicitation has purchased or sold any
securities of Lamson during the past two years; (v) no part of the purchase
price or market value of the securities of Lamson owned by any participant in
this solicitation is represented by funds borrowed or otherwise obtained for the
purpose of acquiring or holding such securities; (vi) no participant in this
solicitation is, or within the past year was, a party to any contract,
arrangements or understandings with any person with respect to any securities of
Lamson, including, but not limited to, joint ventures, loan or option
arrangements, puts or calls, guarantees against loss or guarantees of profit,
division of losses or profits, or the giving or withholding of proxies; (vii) no
associate of any participant in this solicitation owns beneficially, directly or
indirectly, any securities of Lamson; (viii) no participant in this solicitation
owns beneficially, directly or indirectly, any securities of any parent or
subsidiary of Lamson; (ix) no participant in this solicitation or any of his/its
associates was a party to any transaction, or series of similar transactions,
since the beginning of Lamson's last fiscal year, or is a party to any currently
proposed transaction, or series of similar transactions, to which Lamson or any
of its subsidiaries was or is to be a party, in which the amount involved
exceeds $120,000; (x) no participant in this solicitation or any of his/its
associates has any arrangement or understanding with any person with respect to
any future employment by Lamson or its affiliates, or with respect to any future
transactions to which Lamson or any of its affiliates will or may be a party;
and (xi) no person, including the participants in this solicitation, who is a
party to an arrangement or understanding pursuant to which the Ramius Nominees
are proposed to be elected has a substantial interest, direct or indirect, by
security holdings or otherwise in any matter to be acted on at the Annual
Meeting.
-18-
SHAREHOLDER PROPOSALS FOR 2008 ANNUAL MEETING OF SHAREHOLDERS
Any shareholder proposal intended to be presented at Lamson's Annual
Meeting of Shareholders to be held in 2008 must be received by the Company's
Secretary at its principal office in Cleveland, Ohio, not later than _______,
2007 for inclusion in the Company's Proxy Statement and Form of Proxy relating
to the Annual Meeting of Shareholders in 2008. Each proposal submitted should be
accompanied by the name and address of the shareholder submitting the proposal
and the number of common shares owned. If the proponent is not a shareholder of
record, proof of beneficial ownership should also be submitted. All proposals
must be a proper subject for consideration and comply with the proxy rules of
the SEC.
If a shareholder intends to present a proposal at Lamson's Annual Meeting
of Shareholders to be held in 2008 without inclusion of the proposal in the
Company's proxy materials and written notice of the proposal is not received by
the Company on or before ________, 2008, proxies solicited by the Lamson Board
will confer discretionary authority to vote on the proposal if presented at the
meeting.
The information set forth above regarding the procedures for submitting
shareholder proposals for consideration at Lamson's Annual Meeting of
Shareholders to be held in 2008 is based on information contained in the
Company's proxy statement. The incorporation of this information in this Proxy
Statement should not be construed as an admission by us that such procedures are
legal, valid or binding.
OTHER MATTERS AND ADDITIONAL INFORMATION
The Ramius Group is unaware of any other matters to be considered at the
Annual Meeting. However, should other matters, which the Ramius Group is not
aware of a reasonable time before this solicitation, be brought before the
Annual Meeting, the persons named as proxies on the enclosed WHITE proxy card
will vote on such matters in their discretion.
THE RAMIUS GROUP HAS OMITTED FROM THIS PROXY STATEMENT CERTAIN DISCLOSURE
REQUIRED BY APPLICABLE LAW THAT IS ALREADY INCLUDED IN THE COMPANY'S PROXY
STATEMENT. THIS DISCLOSURE INCLUDES, AMONG OTHER THINGS, BIOGRAPHICAL
INFORMATION ON LAMSON'S DIRECTORS AND EXECUTIVE OFFICERS, INFORMATION CONCERNING
EXECUTIVE COMPENSATION, AN ANALYSIS OF CUMULATIVE TOTAL RETURNS ON AN INVESTMENT
IN SHARES DURING THE PAST FIVE YEARS AND PROCEDURES FOR SUBMITTING PROPOSALS FOR
INCLUSION IN THE COMPANY'S PROXY STATEMENT AT THE NEXT ANNUAL MEETING.
SHAREHOLDERS SHOULD REFER TO THE COMPANY'S PROXY STATEMENT IN ORDER TO REVIEW
THIS DISCLOSURE.
See Schedule II for information regarding persons who beneficially own
more than 5% of the Shares and the ownership of the Shares by the management of
Lamson.
-19-
The information concerning Lamson contained in this Proxy Statement and
the Schedules attached hereto has been taken from, or is based upon, publicly
available information.
THE RAMIUS GROUP
___________, 2007
-20-
SCHEDULE I
TRANSACTIONS IN SECURITIES OF LAMSON
DURING THE PAST TWO YEARS
Except as otherwise specified, all purchases were made in the open market.
Shares of Common Stock Price Per Date of
Purchased Share($) Purchase
--------- -------- --------
STARBOARD VALUE AND OPPORTUNITY MASTER FUND LTD.
------------------------------------------------
84,000 21.5000 11/15/06
84,000 21.4500 11/16/06
42,000 20.6700 11/20/06
99,960 20.9285 11/21/06
8,400 21.1532 11/24/06
89,460 20.7246 11/27/06
21,000 20.7020 11/27/06
8,316 21.3947 11/28/06
42,336 21.5488 11/28/06
84,000 20.8630 11/28/06
10,584 21.6887 11/29/06
98,112 21.4746 11/30/06
84,000 21.6000 11/30/06
24,948 21.5104 12/01/06
42,000 23.4549 01/09/07
18,900 23.5467 01/10/07
42,000 23.7476 01/11/07
252,000 23.3092 01/16/07
58,800 23.4004 01/17/07
43,680 30.7515 02/26/07
21,000 30.2500 02/27/07
30,072 30.3771 02/27/07
15,992 29.5650 03/01/07
12,684 28.6700 03/07/07
PARCHE, LLC
-----------
18,688 21.4746 11/30/06
*109,344 21.6600 11/30/06
------------------------
* Shares were acquired in private transactions with various transferors for
which Ramius Capital Group, L.L.C. or an affiliate serves as the investment
manager, the managing member or the managing member of the investment
manager.
I-1
16,000 21.6000 11/30/06
4,752 21.5104 12/01/06
8,000 23.4549 01/09/07
3,600 23.5467 01/10/07
8,000 23.7476 01/11/07
48,000 23.3092 01/16/07
11,200 23.4004 01/17/07
8,320 30.7515 02/26/07
4,000 30.2500 02/27/07
5,728 30.3771 02/27/07
3,046 29.5650 03/01/07
2,416 28.6700 03/07/07
ADMIRAL ADVISORS, LLC
---------------------
None
RAMIUS CAPITAL GROUP, L.L.C.
----------------------------
None
C4S & CO., L.L.C.
-----------------
None
PETER A. COHEN
--------------
None
MORGAN B. STARK
---------------
None
THOMAS W. STRAUSS
-----------------
None
JEFFREY M. SOLOMON
------------------
None
JEFFREY C. SMITH
----------------
None
I-2
WILLIAM J. FOX
--------------
None
MICHAEL CAPORALE, JR.
---------------------
None
I-3
SCHEDULE II
SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT
[TO BE INSERTED FROM LAMSON'S PROXY STATEMENT, WHEN FILED.]
II-1
IMPORTANT
Tell your Board what you think! Your vote is important. No matter how many
Shares you own, please give the Ramius Group your proxy FOR the election of the
Ramius Group's Director Nominees by taking three steps:
o SIGNING the enclosed WHITE proxy card,
o DATING the enclosed WHITE proxy card, and
o MAILING the enclosed WHITE proxy card TODAY in the envelope provided
(no postage is required if mailed in the United States).
If any of your Shares are held in the name of a brokerage firm, bank, bank
nominee or other institution, only it can vote such Shares and only upon receipt
of your specific instructions. Accordingly, please contact the person
responsible for your account and instruct that person to execute the WHITE proxy
card representing your Shares. The Ramius Group urges you to confirm in writing
your instructions to the Ramius Group in care of MacKenzie Partners, Inc. at the
address provided below so that the Ramius Group will be aware of all
instructions given and can attempt to ensure that such instructions are
followed.
If you have any questions or require any additional information concerning
this Proxy Statement, please contact MacKenzie Partners, Inc. at the address set
forth below.
MACKENZIE
PARTNERS, INC.
105 Madison Avenue
New York, NY 10016
proxy@mackenziepartners.com
---------------------------
(212) 929-5500 (Call Collect)
or
TOLL-FREE (800) 322-2885
PRELIMINARY COPY SUBJECT TO COMPLETION
DATED APRIL __, 2007
THE LAMSON & SESSIONS CO.
2007 ANNUAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE RAMIUS GROUP
THE BOARD OF DIRECTORS OF THE LAMSON & SESSIONS CO.
IS NOT SOLICITING THIS PROXY
W H I T E P R O X Y
The undersigned appoints Jeffrey C. Smith, Jeffrey M. Solomon and Mark R.
Mitchell, and each of them, attorneys and agents with full power of substitution
to vote all shares of common stock of The Lamson & Sessions Co. (the "Company")
which the undersigned would be entitled to vote if personally present at the
Annual Meeting of Shareholders of the Company scheduled to be held at
_______________________________________ on _________ __, 2007, at __:__ _.M.
(local time), and including at any adjournments or postponements thereof and at
any meeting called in lieu thereof (the "Annual Meeting").
The undersigned hereby revokes any other proxy or proxies heretofore given to
vote or act with respect to the shares of common stock of the Company held by
the undersigned, and hereby ratifies and confirms all action the herein named
attorneys and proxies, their substitutes, or any of them may lawfully take by
virtue hereof. If properly executed, this Proxy will be voted as directed on the
reverse and in the discretion of the herein named attorneys and proxies or their
substitutes with respect to any other matters as may properly come before the
Annual Meeting that are unknown to the Ramius Group a reasonable time before
this solicitation.
IF NO DIRECTION IS INDICATED WITH RESPECT TO THE PROPOSAL ON THE REVERSE, THIS
PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES SET FORTH IN THIS PROXY, OR
ANY SUBSTITUTIONS THEREFOR.
Shareholders have the right to vote cumulatively in the election of directors at
the Annual Meeting. The Ramius Group intends to invoke its right to cumulate its
votes for the election of the nominees set forth in this Proxy or any
substitutions therefor. THIS PROXY GIVES THE HEREIN NAMED ATTORNEYS AND PROXIES
OR THEIR SUBSTITUTES FULL DISCRETIONARY AUTHORITY TO VOTE THE UNDERSIGNED'S
SHARES CUMULATIVELY AND TO ALLOCATE VOTES AMONG THE NOMINEES SET FORTH IN THIS
PROXY, UNLESS AUTHORITY TO VOTE FOR ANY OF THEM IS WITHHELD ON THE REVERSE SIDE.
This Proxy will be valid until the sooner of one year from the date indicated on
the reverse side and the completion of the Annual Meeting.
IMPORTANT: PLEASE SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY!
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
[X] PLEASE MARK VOTE AS IN THIS EXAMPLE
THE RAMIUS GROUP STRONGLY RECOMMENDS THAT SHAREHOLDERS VOTE IN
FAVOR OF THE FOLLOWING PROPOSAL.
Proposal - The Ramius Group's Proposal to Elect Michael Caporale, Jr., William
J. Fox, Jeffrey C. Smith and Jeffrey M. Solomon as Class I directors of the
Company.
WITHHOLD FOR ALL
AUTHORITY TO EXCEPT
FOR ALL VOTE FOR ALL NOMINEE(S)
NOMINEES NOMINEES WRITTEN BELOW*
Nominees: Michael Caporale, Jr. [ ] [ ] [ ]
William J. Fox
Jeffrey C. Smith
Jeffrey M. Solomon
*YOU MAY WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE BY WRITING THE NAME OF THE
NOMINEE(S) YOU DO NOT SUPPORT ON THE LINE
BELOW. IF YOU WITHHOLD DISCRETIONARY AUTHORITY
TO VOTE FOR ONE OR MORE OF THE NOMINEES, YOUR
VOTES WILL BE ALLOCATED TO THE REMAINING
NOMINEES
----------------------------------------------
DATED:
-----------------------------
------------------------------------
(Signature)
------------------------------------
(Signature, if held jointly)
------------------------------------
(Title)
WHEN SHARES ARE HELD JOINTLY, JOINT OWNERS SHOULD EACH SIGN. EXECUTORS,
ADMINISTRATORS, TRUSTEES, ETC., SHOULD INDICATE THE CAPACITY IN WHICH SIGNING.
PLEASE SIGN EXACTLY AS NAME APPEARS ON THIS PROXY.