Lawson Products DEF 14A 2006
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
Payment of Filing Fee (Check the appropriate box):
Lawson Products, Inc.
1666 East Touhy Avenue
Des Plaines, Illinois 60018
ANNUAL MEETING OF STOCKHOLDERS
May 9, 2006
This Proxy Statement is being sent to stockholders on or about April 10, 2006, in connection with the solicitation of the accompanying proxy by the Board of Directors of the Company. Only stockholders of record at the close of business on March 31, 2006, are entitled to notice of and to vote at the meeting. The Company has retained Morrow & Co., Inc., a firm specializing in the solicitation of proxies, to assist in the solicitation at a fee estimated to be $6,000 plus expenses. Officers of the Company may make additional solicitations in person or by telephone. Expenses incurred in the solicitation of proxies will be borne by the Company. If the accompanying form of proxy is executed and returned in time or you vote your shares by telephone or via the Internet as set forth in the enclosed proxy, the shares represented thereby will be voted. A proxy may be revoked at any time prior to its voting by execution of a later dated proxy or by voting in person at the annual meeting.
As of March 31, 2006, the Company had outstanding 8,974,841 shares of the Companys Common Stock (the Common Stock) and such shares are the only shares entitled to vote at the annual meeting. Each holder of Common Stock is entitled to one vote per share on all matters to come before the meeting. For purposes of the meeting, a quorum means a majority of the outstanding shares. In determining whether a quorum exists, all shares represented in person or by proxy will be counted.
Directors will be elected by a plurality of the votes cast at the meeting by the holders of shares represented in person or by proxy. It is intended that the named proxies will vote in favor of the election of directors of the nominees listed below, except as otherwise indicated on the proxy form. If any nominee should become unavailable for election as a director (which is not contemplated), the proxies will have discretionary authority to vote for a substitute. In the absence of a specific direction from the stockholders, proxies will be voted for the election of all named director nominees. The ratification of Ernst & Young LLP as the Companys independent registered public accounting firm requires the approval of the affirmative vote of a majority of the shares of common stock present or represented by proxy and voting at the meeting. A properly executed proxy card marked Abstain with respect to this proposal will constitute a vote against this proposal.
Proxies received but marked as abstentions and broker non-votes will be included in the calculation of the number of shares considered to be present at the meeting. Broker non-votes will not affect the determination of the outcome of the vote on the election of directors or the ratification of Ernst & Young LLP as the Companys independent registered public accounting firm. A broker non-vote occurs when a broker holding shares registered in street name is permitted to vote, in the brokers discretion, on routine matters without receiving instructions from the client, but is not permitted to vote without instructions on non-routine matters, and the broker returns a proxy card
The Board recommends that stockholders vote FOR these nominees.
Board of Director Meetings and Committees
LONG-TERM INCENTIVE PLANS AWARDS IN 2005
The following table sets forth information with respect to grants of Shareholder Value Appreciation Rights (SVARs) to the Companys Named Executive Officers during 2005.
Mr. Washlow is employed under a contract pursuant to which he will receive a minimum salary of $650,000. Mr. Washlows salary is subject to periodic review and may be increased but not
Proposal 2: Ratification of the Appointment of Ernst & Young LLP
The Audit Committee of the Board of Directors has appointed Ernst & Young LLP to serve as the Companys independent registered public accounting firm for the fiscal year ending December 31, 2006. Although the Companys governing documents do not require the submission of this matter to stockholders, the Board of Directors considers it desirable that the appointment of Ernst & Young LLP be ratified by stockholders.
Audit services provided by Ernst & Young LLP for the fiscal year ended December 31, 2005 included the audit of the consolidated financial statements of the Company; audit of the Companys internal control over financial reporting and attestation of managements report on internal control over financial reporting; and services related to periodic filings made with the Securities and Exchange
Fees of $957,000 in 2005 and $954,300 in 2004 were paid to Ernst & Young by the Company for audit services which includes fees for the annual audit, review of the Companys reports on Form 10-Q each year, statutory audits required internationally, consulting on accounting and auditing matters and fees related to Ernst & Youngs audit of the Companys managements assessment of internal controls over financial reporting as required by the Rule 404 Sarbanes-Oxley Act of 2002.
The Company paid Ernst & Young $87,000 in 2005 and $21,000 in 2004 for audit-related fees primarily for pension audits and merger and acquisition due diligence.
Fees of $174,400 in 2005 and $215,900 in 2004 were paid to Ernst & Young by the Company for domestic and international income tax compliance and consulting services.
All Other Fees
Ernst & Young did not render any other services to the Company.
All fees were pre-approved by the Audit Committee
Annual Meeting Proxy Card
This proxy is solicited on behalf of the Board of Directors for the Annual Meeting on May 9, 2006.
The undersigned hereby makes, constitutes and appoints Neil E. Jenkins, Sidney L. Port and Robert J. Washlow, and each of them, proxies for the undersigned, with full power of substitution, to vote on behalf of the undersigned at the Annual Meeting of Stockholders of Lawson Products, Inc. (the Company), to be held at the offices of the Company, 1666 East Touhy Avenue, Des Plaines, Illinois, on Tuesday, May 9, 2006, at 10:00 AM. (Local time), or any adjournment thereof.
The withholding of authority to vote for any nominee will allow the proxies to distribute, in their discretion, the withheld votes equally or unequally to or among the remaining nominees. If a properly signed proxy is returned without any choices marked, the proxies will distribute, in their discretion, votes in respect of all proxies they hold equally or unequally to or among the Board of Directors nominees.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED BY THE UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSAL 1 AND FOR PROPOSAL 2.
PLEASE SEE BELOW FOR INFORMATION ON VOTING YOUR PROXY BY TELEPHONE OR INTERNET.
PLEASE VOTE, DATE AND SIGN THIS PROXY ON THE OTHER SIDE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
(continued and to be signed on other side)
LAWSON PRODUCTS, INC.
C/O COMPUTERSHARE TRUST COMPANY, N.A.
P.O. BOX 8694
EDISON, NJ 08818-8694
We encourage you to vote your shares electronically this year either by telephone or via the Internet. This will eliminate The need to return your proxy card. You will need your proxy card and Social Security number (where applicable) when voting your shares electronically.
The Computershare Vote by Telephone and Vote by Internet systems can be accessed 24-hours a day, seven days a week up until the day prior to the meeting.
Your vote is important. Please vote immediately.
Telephone and Internet Voting Instructions
You can vote by telephone OR Internet! Available 24 hours a day 7 days a week!
Instead of mailing your proxy, you may choose one of the two voting methods outlined below to vote your proxy
VALIDATION DETAILS ARE LOCATED ON THE FRONT OF THIS FORM IN THE COLORED BAR.
If you vote by telephone or the Internet, please DO NOT mail back this proxy card.
Proxies submitted by telephone or the Internet must be received by 1:00 a.m., Central Time, on May 9, 2006.
THANK YOU FOR VOTING