UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

(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

Filed by the Registrant þ

Filed by a Party other than the Registrant o

Check the appropriate box:

	o		Preliminary Proxy Statement
	o		Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
	þ		Definitive Proxy Statement
	o		Definitive Additional Materials
	o		Soliciting Material Pursuant to § 240.14a-12

THE LAMSON & SESSIONS CO.

(Name of Registrant as Specified in Its Charter)
N/A

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

	o		No fee required.
	o		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:
			Common Shares, without par value
	(2)		Aggregate number of securities to which transaction applies:
			15,849,285 outstanding Common Shares (includes restricted shares) and options to purchase 1,053,483 Common Shares
	(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):
			$27 per outstanding Common Share plus $20,472,776 in the aggregate to cash out options to purchase Common Shares
	(4)		Proposed maximum aggregate value of transaction: $448,403,471
	(5)		Total fee paid: $13,767

	þ		Fee paid previously with proxy materials.
	o		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:
	(2)		Form, Schedule or Registration Statement No.:
	(3)		Filing Party:
	(4)		Date Filed:

 

 

 

25701 Science Park Drive
Cleveland, Ohio 44122
(216) 464-3400

 

September 19, 2007

 

Dear Fellow Shareholder:

 

You are cordially invited to attend a special meeting of shareholders of The Lamson & Sessions Co., which is referred to as Lamson, to be held on October 24, 2007, at 9:00 a.m. (Eastern Time), at the Cleveland Marriott East Hotel, 26300 Harvard Road, Warrensville Heights, Ohio 44122.

 

At the special meeting, we will ask you to adopt the merger agreement among Lamson, Thomas & Betts Corporation and T&B Acquisition II Corp., a wholly owned subsidiary of Thomas & Betts. If the merger is completed, each of your Lamson common shares will be converted into the right to receive $27 in cash, without interest. In addition, the Lamson Board of Directors, which is referred to as the Board, has declared a one-time, cash dividend of $0.30 per share, conditioned upon consummation of the merger and payable to shareholders of record as of the closing date of the merger. Upon completion of the merger, Lamson common shares, which are listed on the New York Stock Exchange, or NYSE, under the symbol “LMS,” will have their listing terminated.

 

The proxy statement accompanying this letter is furnished in connection with the solicitation by the Board of proxies to be used at the special meeting of shareholders of Lamson.

 

The Board has carefully reviewed and considered the terms and conditions of the proposed merger. Based on its review, the Board has determined that the merger is advisable to and in the best interests of Lamson shareholders. Accordingly, the Board has unanimously approved the merger agreement and unanimously recommends that you vote FOR the adoption of the merger agreement.

 

The Board also unanimously recommends that you vote FOR any proposal, if deemed necessary or appropriate by the proxy holders, including, if necessary, to permit further solicitation of proxies or to adjourn or postpone the special meeting of shareholders. Approval of any other proposal properly brought before the special meeting is not a condition to the merger.

 

Your vote is very important. The merger cannot be completed unless holders of at least two-thirds of Lamson common shares outstanding and entitled to vote at the special meeting vote to adopt the merger agreement.

 

Only holders of record of Lamson common shares at the close of business on September 24, 2007, will be entitled to vote at the special meeting. Please complete, sign, date and return your proxy. If you hold your shares in “street name,” you should instruct your broker how to vote in accordance with your voting instruction form. Completing a proxy now will not prevent you from being able to vote at the special meeting by attending in person and casting a vote. Failure to submit a signed proxy or to vote in person at the special meeting will have the same effect as a vote against the adoption of the merger agreement.

 

This proxy statement explains the proposed merger and the merger agreement and provides specific information concerning the special meeting. Please read the entire proxy statement carefully.

 

Sincerely,

Michael J. Merriman, Jr.

President and Chief Executive Officer

 

This proxy statement is dated September 19, 2007, and is first being mailed to Lamson shareholders on or about September 19, 2007.

 

25701 Science Park Drive
Cleveland, Ohio 44122

 

 

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

TO BE HELD ON OCTOBER 24, 2007

 

To Shareholders of

THE LAMSON & SESSIONS CO.

 

A special meeting of shareholders of The Lamson & Sessions Co., which is referred to as Lamson, will be held at 9:00 a.m. (Eastern Time), on October 24, 2007, at the Cleveland Marriott East Hotel, 26300 Harvard Road, Warrensville Heights, Ohio 44122, unless adjourned or postponed to a later date. The special meeting will be held for the following purposes:

 

1. To consider and vote upon a proposal to adopt the Agreement and Plan of Merger, dated as of August 15, 2007, by and among Thomas & Betts Corporation, T&B Acquisition II Corp. and Lamson. As a result of the merger, Lamson will become a wholly owned subsidiary of Thomas & Betts and each outstanding Lamson common share will be converted into the right to receive $27 in cash, without interest. In addition, the Lamson Board of Directors, which is referred to as the Board, has declared a one-time, cash dividend of $0.30 per share, conditioned upon consummation of the merger and payable to shareholders of record as of the closing date of the merger.

 

2. To approve adjournments or postponements of the special meeting, if deemed necessary or appropriate by the proxy holders, including, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the special meeting to adopt the merger agreement.

 

Only holders of record of Lamson common shares at the close of business on September 24, 2007, the record date for the special meeting, are entitled to notice of, and to vote at, the special meeting and any adjournments or postponements thereof. Each common share is entitled to vote on all matters that properly come before the special meeting and is entitled to one vote on each matter properly brought before the special meeting.

 

The Board unanimously recommends that Lamson shareholders vote FOR the adoption of the merger agreement. Lamson cannot complete the merger unless the merger agreement is adopted by Lamson shareholders. Adoption of the merger agreement requires the affirmative vote of holders of at least two-thirds of Lamson common shares outstanding and entitled to vote at the special meeting.

 

The Board also unanimously recommends that Lamson shareholders vote FOR any proposal, if deemed necessary or appropriate by the proxy holders, including, if necessary, to permit the further solicitation of parties, to adjourn or postpone the special meeting if there are not sufficient votes at the time of the special meeting to adopt the merger agreement.

 

The attached proxy statement describes the proposed merger and the actions to be taken in connection with the merger and provides additional information about the parties involved.

 

Please give this information your careful attention. Under Ohio law, if you do not vote in favor of the adoption of the merger agreement you will have the right to seek appraisal of the fair value of your Lamson common shares under Sections 1701.84 and 1701.85 of the Ohio General Corporation Law if the merger is completed, but only if you submit a written demand for an appraisal on or before the tenth day following the special meeting and you comply with the Ohio law procedures explained in this proxy statement.

 

Whether or not you plan to attend the special meeting, please complete, sign and date the enclosed proxy and return it promptly in the enclosed postage-paid return envelope, or give your proxy by telephone or over the Internet by following the instructions on the proxy card. You may revoke the proxy at any time prior to its exercise at the special meeting in the manner described in this proxy statement. Completing a proxy now will not prevent you from being able to vote at the special meeting by attending in person and casting a vote. Your vote at the special meeting will supersede any previously submitted proxy.

 

If you fail to return your proxy or to attend the special meeting in person, your shares will not be counted for purposes of determining whether a quorum is present at the special meeting and will have the same effect as a vote AGAINST the adoption of the merger agreement.

 

Please do not send any share certificates at this time.

 

By order of the Board of Directors,

James J. Abel

Secretary

 

September 19, 2007

 

 

QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER

 

The Merger

 

 

 

Georgeson Inc.

17 State Street — 10th Floor

New York, NY 10004

Banks and Brokers Call:

(212) 440-9800

All others call Toll-Free:

(888) 605-8353

 

Other Special Meeting Proposals

 

 

Procedures

 

 

SUMMARY

 

This summary highlights selected information from this proxy statement and may not contain all of the information that is important to you. You should carefully read this entire proxy statement, including the attached annexes, and the other documents to which we have referred you. See “Additional Information” on page 49. We have included page references parenthetically to direct you to a more complete description of the topics presented in this summary.

 

Information About the Merger Parties

 

The Lamson & Sessions Co.

 

Lamson, an Ohio corporation, is a leading producer of thermoplastic enclosures, fittings, wiring outlet boxes and conduit for the electrical, telecommunications, consumer, power and wastewater markets. Our principal executive offices are located at 25701 Science Park Drive, Cleveland, Ohio 44122, and our telephone number is (216) 464-3400.

 

Thomas & Betts Corporation

 

Thomas & Betts, a Tennessee corporation, is a leading designer and manufacturer of electrical components used in construction, industrial, and utility markets and is also a leading producer of highly engineered steel structures, used primarily for utility transmission, and commercial heating and ventilation units. Thomas & Betts’ principal executive offices are located at 8155 T&B Boulevard, Memphis, Tennessee 38125, and its telephone number is (901) 252-8000.

 

T&B Acquisition II Corp.

 

T&B Acquisition II Corp., an Ohio corporation, is a direct wholly owned subsidiary of Thomas & Betts Corporation formed solely for the purpose of effecting the merger with Lamson. T&B Acquisition II Corp. has not conducted any unrelated activities since its organization. T&B Acquisition II Corp.’s principal executive offices are located at 8155 T&B Boulevard, Memphis, Tennessee 38125, and its telephone number is (901) 252-8000.

 

The Special Meeting (page 9)

 

We are furnishing this proxy statement to our shareholders as part of the solicitation of proxies by our Board for use at the special meeting.

 

Date, Time and Place.  The special meeting of our shareholders will be held October 24, 2007, at 9:00 a.m. (Eastern Time) at the Cleveland Marriott East Hotel, 26300 Harvard Road, Warrensville Heights, Ohio 44122.

 

Purpose.  You will be asked to consider and vote upon a proposal to adopt the merger agreement. The merger agreement provides that T&B Acquisition II Corp. will merge with and into Lamson, and Lamson will become a wholly owned subsidiary of Thomas & Betts. Each Lamson common share you own at the effective time of the merger will be converted into the right to receive $27 in cash, without interest. In addition, the Board has declared a one time, cash dividend of $0.30 per share, conditioned upon consummation of the merger and payable to shareholders of record as of the closing date of the merger.

 

You will also be asked to vote to approve adjournments or postponements of the special meeting, if deemed necessary or appropriate by the proxy holders, including, if necessary, to permit further solicitation of proxies, and to transact such other business as may properly come before the special meeting or any adjournment or postponement thereof.

 

Record Date; Shareholders Entitled to Vote.  You are entitled to vote at the special meeting if you own Lamson common shares as of the close of business on September 24, 2007, the record date for the special meeting. As of September 17, 2007, there were 15,849,285 Lamson common shares outstanding (all of which were entitled to vote at the special meeting), of which a total of 884,864 Lamson common shares (or 5.6% of the total outstanding) were held by Lamson’s directors and executive officers. You will have one vote on each matter submitted to a vote at the special meeting for each Lamson common share that you owned as of the close of business on the record date.

 

Voting and Proxies.

 

Shareholders can vote their Lamson common shares on matters presented at the special meeting in four ways:

 

(a) By Proxy.  You can vote by signing, dating and returning the enclosed proxy card. If you do this, the proxies will vote your Lamson common shares in the manner you indicate. All properly executed proxies that we receive prior to the vote at the special meeting, and that are not revoked, will be voted in accordance with the instructions indicated on the proxies. If you do not indicate instructions on the card, your Lamson common shares will be voted FOR the adoption of the merger agreement and FOR a proposal to adjourn or postpone the special meeting if deemed necessary or appropriate by the proxy holder(s), to permit further solicitation of proxies if there are not sufficient votes at the time of the special meeting to adopt the merger agreement.

 

(b) By Telephone.  After reading the proxy materials and with your proxy and voting instruction form in front of you, you may call the toll-free number 1-888-693-8683 using a touch-tone telephone. You will be prompted to enter your control number from your proxy and voting instruction form. This number will identify you and Lamson. Then you can follow the simple instructions that will be given to you to record your vote.

 

(c) Over the Internet.  After reading the proxy materials and with your proxy and voting instruction form in front of you, you may use your computer to access the Web site http://www.cesvote.com. You will be prompted to enter your control number from your proxy and voting instruction form. This number will identify you and the Company. Then you can follow the simple instructions that will be given to you to record your vote.

 

(d) In Person.  You may attend the special meeting and cast your vote in person.

 

The Internet and telephone voting procedures have been set up for your convenience and have been designed to authenticate your identity, allow you to give voting instructions and confirm that those instructions have been recorded properly.

 

Brokers or banks holding Lamson common shares in “street name” may vote your Lamson common shares on the adoption of the merger agreement only if you provide instructions on how to vote. Brokers or banks will provide you with directions on how to instruct the broker or bank to vote your Lamson common shares, and you should carefully follow these instructions.

 

You may revoke your proxy at any time prior to the vote at the special meeting by delivering to Lamson’s Corporate Secretary a signed notice of revocation or submitting a later-dated, signed proxy following the instructions provided on the proxy card. You also may revoke your proxy by attending the special meeting and voting in person. Attendance at the special meeting will not, in and of itself, result in the revocation of a proxy or cause your Lamson common shares to be voted.

 

Special instructions for shareholders who hold all or some of their Lamson common shares under the Company 401(k) Plan.  Shareholders who hold all or some of their Lamson common shares under The Lamson & Sessions Co. Deferred Savings Plan, which is referred to as the Company 401(k) Plan, cannot vote such Lamson common shares directly on matters presented at the special meeting. In order to cause Lamson common shares held under the Company 401(k) Plan to be voted, you must complete a consent card that instructs a trustee of the Company 401(k) Plans to vote such common shares. All Company 401(k) Plan shareholders will receive a consent card with respect to Lamson common shares held under the Company 401(k) Plan separately from the proxy card. In order to have your shares held under the Company 401(k) Plan voted, you must provide your consent in accordance with the instructions on the separate consent card.

 

Quorum.  A quorum of shareholders is necessary to hold a valid meeting. Under our Amended Code of Regulations, the holders of Lamson common shares entitled to exercise two-thirds of the voting power of Lamson, present in person or by proxy, shall constitute a quorum. Abstentions and broker non-votes are counted as present for establishing a quorum. A broker non-vote occurs when a beneficial owner fails to provide voting instructions to his or her broker as to how to vote the shares held by the broker in street name and the broker does not have discretionary authority to vote without instructions. Brokers do not have discretionary authority to vote on either of the proposals.

The holders of a majority of the voting power represented at the special meeting, whether or not a quorum is present, may adjourn the meeting without notice other than by announcement at the meeting of the date, time and location at which the meeting will be reconvened.

 

If you submit a properly executed proxy card, even if you abstain from voting, your Lamson common shares will be counted for purposes of determining whether a quorum is present at the special meeting. In the event that a quorum is not present at the special meeting, it is expected that the meeting will be adjourned or postponed to solicit additional proxies.

 

Vote Required.  Adoption of the merger agreement requires the affirmative vote of holders of at least two-thirds of Lamson common shares outstanding and entitled to vote at the special meeting.

 

Any proposal to adjourn or postpone the special meeting requires the affirmative vote of a majority of Lamson common shares represented, in person or by proxy, at the special meeting.

 

Effect of Abstentions and Broker Non-Votes on Voting.  Abstentions, broker non-votes and shares not in attendance and not voted at the special meeting will have the same effect as a vote AGAINST the proposal to adopt the merger agreement. Abstentions will have the same effect as a vote AGAINST the proposal to adjourn or postpone the special meeting. Broker non-votes and shares not in attendance at the special meeting will have no effect on the outcome of any vote to adjourn or postpone the special meeting. It is very important that ALL of our shareholders vote their Lamson common shares, so please promptly complete and return the enclosed proxy card.

 

Expenses of Proxy Solicitation.  Our directors, officers and other employees may solicit proxies in person, by telephone, electronically, by mail or other means, but they will not be specifically compensated for these services. Brokers, banks and other persons will be reimbursed by us for expenses they incur in forwarding proxy material to obtain voting instructions from beneficial shareholders. We have also hired Georgeson to assist in the solicitation of proxies. The total cost of solicitation of proxies will be borne by us. For a description of the costs and expenses to us of soliciting proxies, see “The Special Meeting — Solicitation Costs” on page 12.

 

Shareholders should not send in their share certificates with their proxies.  A transmittal form with instructions for the surrender of certificates representing Lamson common shares will be mailed to shareholders if the merger is completed.

 

Board Recommendation (page 10)

 

The Board has found and declared that the merger agreement and the merger are advisable, fair to, and in the best interests of the Company and its shareholders, has unanimously approved the merger agreement and unanimously recommends that our shareholders vote FOR the adoption of the merger agreement. The Board also unanimously recommends that you vote FOR any adjournment or postponement of the special meeting, if deemed necessary or appropriate by the proxy holders, including, if necessary, to permit solicitation of further proxies if there are not sufficient votes at the time of the special meeting to adopt the merger agreement.

 

The Merger and the Merger Agreement (pages 13 & 35)

 

The rights and obligations of the parties to the merger agreement are governed by the specific terms and conditions of the merger agreement and not by any summary or other information in this proxy statement. Therefore, the information in this proxy statement regarding the merger agreement and the merger is qualified in its entirety by reference to the merger agreement, a copy of which is attached as Annex A to this proxy statement. We encourage you to read the merger agreement carefully and in its entirety because it is the principal legal agreement that governs the merger.

 

Structure of the Merger

 

At the effective time of the merger, T&B Acquisition II Corp., a wholly owned subsidiary of Thomas & Betts, will be merged with and into Lamson. Lamson will continue as the surviving corporation and become a wholly owned subsidiary of Thomas & Betts.

 

Lamson Common Shares, Including Restricted Common Shares

 

At the effective time of the merger, each Lamson common share, including restricted shares and performance accelerated restricted shares, will be converted into the right to receive $27 in cash, without interest. In addition, the Board has declared a one time, cash dividend of $0.30 per share, conditioned upon consummation of the merger and payable to shareholders of record as of the closing date of the merger. After the effective time of the merger, Lamson common shares will no longer be publicly traded.

 

Lamson Stock Options and Stock Appreciation Rights

 

Pursuant to the merger agreement, we will take all action necessary to adjust the terms of all outstanding options to acquire Lamson common shares and stock appreciation rights in respect of Lamson common shares so that, upon completion of the merger, each option and stock appreciation right outstanding immediately prior to the effective time of the merger will become fully vested and will be converted into the right to receive the excess, if any, of $27.30 over the exercise price per share of the stock option or the base price per share of the stock appreciation right, as applicable, multiplied by the number of Lamson common shares subject to the stock option or the stock appreciation right, as applicable, less any applicable withholding tax. No payment will be made with respect to stock options or stock appreciation rights that have per share exercise prices or base prices, as applicable, equal to or greater than $27.30.

 

Opinion of Perella Weinberg Partners LP

 

In connection with the merger, the Board received a written opinion from the Company’s financial advisor, Perella Weinberg Partners LP, which is referred to as PWP, as to the fairness, from a financial point of view and as of the date of the opinion, of the merger consideration to be received by the holders of Lamson common shares (other than Thomas & Betts or any of its affiliates) in the merger. The full text of PWP’s opinion, dated as of August 15, 2007, which sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations on the review undertaken by PWP, is attached as Annex B to this proxy statement. Shareholders are urged to read this opinion carefully and in its entirety. The PWP opinion is not a recommendation as to how any holder of Lamson common shares should vote or otherwise act with respect to the merger.

 

Conditions to the Merger

 

A number of conditions must be satisfied or waived before the merger can be completed. See and read carefully “The Merger Agreement — Conditions of the Merger” beginning on page 44. We can offer no assurance that all of the conditions will be satisfied or waived or that the merger will occur.

 

Termination of the Merger Agreement and Termination Fees

 

The merger agreement may be terminated by the mutual written consent of us and Thomas & Betts, or by either us or Thomas & Betts, under certain specified circumstances. Upon termination of the merger agreement under certain specified circumstances, we may be required to pay a termination fee of $15 million to Thomas & Betts, or Thomas & Betts may be required to pay a termination fee of $4 million to us. See and read carefully “The Merger Agreement — Termination” beginning on page 45 and “The Merger Agreement — Termination Fees” beginning on page 46.

 

No Solicitation

 

The merger agreement restricts our ability to solicit or engage in discussions or negotiations with a third party regarding a proposal to acquire a significant interest in us. However, under certain circumstances, if we receive an unsolicited takeover proposal from a third party that our Board determines in good faith (after consultation with outside counsel and financial advisors) constitutes a superior proposal or would reasonably be expected to lead to a superior proposal, we may furnish nonpublic information to that third party and engage in negotiations regarding a takeover proposal with that third party, subject to specified conditions. See and read carefully “the Merger Agreement — Covenants and Agreements — No Solicitation” beginning on page 40.

 

Governmental Review

 

The merger is subject to review under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, which is referred to as the HSR Act. Under the provisions of the HSR Act, the merger cannot be completed until the companies have made required notifications, given certain information and materials to the FTC and to the Antitrust Division and a required waiting period has expired or been terminated. We and Thomas & Betts filed the notifications required under the HSR Act with the U.S. Federal Trade Commission, which is referred to as the FTC, and the antitrust division of the U.S. Department of Justice, which is referred to as the Antitrust Division, on August 29, 2007.

 

See “The Merger — Governmental and Regulatory Matters” beginning on page 31.

 

Certain United States Federal Income Tax Consequences (page 32)

 

Generally, a holder of Lamson common shares will recognize taxable gain or loss for United States federal income tax purposes equal to the difference between (1) the amount of cash such holder receives and (2) the adjusted tax basis of such holder’s Lamson common shares exchanged therefor.

 

You should read “The Merger — Certain United States Federal Income Tax Consequences” beginning on page 32 for a more complete discussion of the United States federal income tax consequences of the merger, including in respect of the special cash dividend. Tax matters can be complicated and the tax consequences of the merger to you will depend on your particular circumstances. We urge you to consult your own tax advisor to fully understand the tax consequences of the merger to you (including the application and effect of any state, local, or foreign income and other tax laws).

 

Interests of Lamson Directors and Executive Officers in the Merger (page 27)

 

When considering the recommendation of the Board with respect to the adoption of the merger agreement, you should be aware that some of our directors and executive officers have interests in the merger that may be different from, or in addition to, their interests as shareholders and the interests of shareholders generally. The Board was aware of these interests during its deliberations on the merits of the merger and in deciding to recommend that you vote for the adoption of the merger agreement at the special meeting. For a more detailed discussion of these interests, see “The Merger — Interests of Lamson Directors and Executive Officers in the Merger” beginning on page 27.

 

Appraisal Rights of Lamson Shareholders (page 33)

 

Under Ohio law, if you own Lamson common shares and do not vote in favor of adopting the merger agreement, you will have the right to seek appraisal of the fair value of your Lamson common shares under Sections 1701.84 and 1701.85 of the Ohio General Corporation Law, which is referred to as the OGCL, if the merger is completed. This value could be more than, less than, or the same as the merger consideration for Lamson common shares. Failure to strictly comply with all procedures required by Section 1701.85 of the OGCL will result in a loss of the right to appraisal.

 

Merely voting against the adoption of the merger agreement will not preserve your right to appraisal under the OGCL. Also, because a submitted proxy not marked “against” or “abstain” will be voted “for” the proposal to adopt the merger agreement, the submission of a proxy not marked “against” or “abstain” will result in the waiver of

appraisal rights. If you hold shares in the name of a broker or other nominee, you must instruct your nominee to take the steps necessary to enable you to demand appraisal for your Lamson common shares.

 

Annex C to this proxy statement contains the full text of Sections 1701.84 and 1701.85 of the OGCL, which relate to appraisal rights. We encourage you to read these provisions carefully and in their entirety.

 

FORWARD-LOOKING STATEMENTS MAY PROVE INACCURATE

 

Certain statements and assumptions in this proxy statement are based on “forward-looking” information and involve risks and uncertainties. We believe that such statements are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include those that may predict, forecast, indicate or imply future results, performance or achievements. These statements are subject to numerous risks, assumptions and uncertainties that could cause actual results, performance or achievements to differ materially from those suggested by our forward-looking statements. Although we believe that the assumptions on which our forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and, as a result, the forward-looking statements could be incorrect. Such risks, assumptions and uncertainties include the ability to obtain required regulatory approvals for the transaction; the failure of Lamson shareholders to approve the transaction; the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement; the outcome of any legal proceeding that may be instituted against us and others following the announcement of the merger agreement; the failure to close for any other reason; the amount of the costs, fees, expenses and charges related to the merger; the effect of the announcement of the merger on our customer relationships, operating results and business generally, including the ability to retain key employees; the risk that the businesses will not be integrated successfully; the risk that the cost savings and any other synergies from the transaction may not be fully realized or may take longer to realize than expected; and disruption from the transaction making it more difficult to maintain relationships with customers, employees or suppliers. Additional factors that may affect future results are contained in Lamson’s filings with the Securities and Exchange Commission, which is referred to as the SEC, which are available at the SEC’s web site, http://www.sec.gov. Lamson disclaims any obligation to update and revise statements contained in these materials based on new information or otherwise.

 

Words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “hopes,” “targets” or similar expressions are intended to identify forward-looking statements, which speak only as to the date of this proxy statement. It is not possible to predict all risk factors or to estimate the impact of these factors. Accordingly, shareholders should not place undue reliance on our forward-looking statements. We do not undertake any obligation to update or release any revisions to any forward-looking statements or to report any events or circumstances after the date of this proxy statement or to reflect the occurrence of unanticipated events, except as required by law.

 

THE SPECIAL MEETING

 

We are furnishing this proxy statement to our shareholders as part of the solicitation of the enclosed proxy card by our Board for use at the special meeting in connection with the proposed merger and the other items to be voted on at the special meeting. This proxy statement provides our shareholders with the information they need to know to be able to vote or instruct their vote to be cast at the special meeting.

 

Date, Time and Place

 

We will hold the special meeting on October 24, 2007 at 9:00 a.m. (Eastern Time), at the Cleveland Marriott East Hotel, 26300 Harvard Road, Warrensville Heights, Ohio 44122.

 

Record Date; Shareholders Entitled to Vote

 

The record date for the special meeting is September 24, 2007. Record holders of Lamson common shares at the close of business on the record date are entitled to vote or have their votes cast at the special meeting. As of September 17, 2007, there were outstanding 15,849,285 Lamson common shares (all of which were entitled to cast votes at the special meeting), of which a total of 884,864 Lamson common shares, or 5.6% of the total outstanding,

were held by our directors and executive officers. Shareholders will have one vote on each matter submitted to a vote at the special meeting for each Lamson common share they owned on the record date.

 

Quorum

 

A quorum of shareholders is necessary to hold a valid meeting. Under our Amended Code of Regulations, the holders of Lamson common shares entitled to exercise two-thirds of the voting power of the Company, present in person or by proxy, shall constitute a quorum.

 

Abstentions and broker non-votes are counted as present for establishing a quorum. A broker non-vote occurs when a beneficial owner fails to provide voting instructions to his or her broker as to how to vote the shares held by the broker in street name and the broker does not have discretionary authority to vote without instructions. Brokers do not have discretionary authority to vote on either of the proposals.

 

The holders of a majority of the common shares represented at the special meeting, whether or not a quorum is present, may adjourn the meeting without notice other than by announcement at the meeting of the date, time and location at which the meeting will be reconvened.

 

If you submit a properly executed proxy card, even if you abstain from voting or vote against the adoption of the merger agreement, your Lamson common shares will be counted for purposes of calculating whether a quorum is present at the special meeting. If a quorum is not present at the special meeting, it is expected that the meeting will be adjourned or postponed to solicit additional proxies. If a new record date is set for the adjourned meeting, however, then a new quorum would have to be established at the adjourned meeting.

 

PROPOSALS TO BE CONSIDERED AT THE SPECIAL MEETING

 

ITEM 1 — THE MERGER

 

As discussed elsewhere in this proxy statement, our shareholders will consider and vote on a proposal to adopt the merger agreement. You should read carefully this proxy statement in its entirety for more detailed information concerning the merger agreement and the merger. In particular, you should read in its entirety the merger agreement, which is attached as Annex A to this proxy statement.

 

The Board unanimously recommends that Lamson shareholders vote FOR the adoption of the merger agreement.

 

If you return a properly executed proxy card but do not indicate instructions on your proxy card, your Lamson common shares represented by such proxy card will be voted FOR the adoption of the merger agreement.

 

ITEM 2 — APPROVE ADJOURNMENT OR POSTPONEMENT
OF THE SPECIAL MEETING, IF DEEMED NECESSARY
OR APPROPRIATE BY THE PROXY HOLDERS, INCLUDING, IF NECESSARY, TO
PERMIT FURTHER SOLICITATION OF PROXIES

 

Shareholders may be asked to vote on a proposal to adjourn or postpone the special meeting, if deemed necessary or appropriate by the proxy holders, including, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the special meeting to adopt the merger agreement.

 

The Board unanimously recommends that shareholders vote FOR the proposal to adjourn or postpone the special meeting.

 

If you return a properly executed proxy card but do not indicate instructions on your proxy card, your Lamson common shares represented by such proxy card will be voted FOR the proposals to adjourn or postpone the special meeting.

 

Shareholder Vote Required to Adopt the Proposals at the Special Meeting

 

Adoption of the merger agreement requires the affirmative vote of holders of at least two-thirds of Lamson common shares outstanding and entitled to vote at the special meeting. Abstentions will have the same effect as a vote AGAINST the proposal to adjourn or postpone the special meeting. Broker non-votes and shares not in attendance at the special meeting will have no effect on the outcome of any vote to adjourn or postpone the special meeting. It is very important that ALL of our shareholders vote their Lamson common shares, so please promptly complete and return the enclosed proxy card.

 

Any proposal to adjourn or postpone the special meeting or on any other matter to be voted upon at the special meeting requires the affirmative vote of a majority of the shares represented in person or by proxy entitled to vote on the matter and actually voted on the matter for approval. Abstentions, broker non-votes and shares not voted will have no effect on the outcome of the vote related to any proposal to adjourn or postpone the special meeting or any other matter properly brought before the special meeting.

 

A broker non-vote occurs when a beneficial owner fails to provide voting instructions to his or her broker as to how to vote the shares held by the broker in street name and the broker does not have discretionary authority to vote without instructions. An abstention occurs when a shareholder marks a proxy card to abstain from voting for or against a proposal.

 

It is very important that ALL Lamson shareholders vote their Lamson common shares, so please promptly complete and return the enclosed proxy card or consent card.

 

Voting

 

Voting and Proxies.

 

Shareholders who hold Lamson common shares can vote shares on matters presented at the special meeting in four ways:

 

(a) By Proxy.  You can vote by signing, dating and returning the enclosed proxy card. If you do this, the proxies will vote your Lamson common shares in the manner you indicate. All properly executed proxies that we receive prior to the vote at the special meeting, and that are not revoked, will be voted in accordance with the instructions indicated on the proxies. If you do not indicate instructions on the card, your Lamson common shares will be voted FOR the adoption of the merger agreement and FOR a proposal to adjourn or postpone the special meeting if deemed necessary or appropriate by the proxy holder(s), to permit further solicitation of proxies if there are not sufficient votes at the time of the special meeting to adopt the merger agreement.

 

(b) By Telephone.  After reading the proxy materials and with your proxy and voting instruction form in front of you, you may call the toll-free number 1-888-693-8683 using a touch-tone telephone. You will be prompted to enter your control number from your proxy and voting instruction form. This number will identify you and Lamson. Then you can follow the simple instructions that will be given to you to record your vote.

 

(c) Over the Internet.  After reading the proxy materials and with your proxy and voting instruction form in front of you, you may use your computer to access the Web site http://www.cesvote.com. You will be prompted to enter your control number from your proxy and voting instruction form. This number will identify you and the Company. Then you can follow the simple instructions that will be given to you to record your vote.

 

(d) In Person.  You may attend the special meeting and cast your vote in person.

 

The Internet and telephone voting procedures have been set up for your convenience and have been designed to authenticate your identity, allow you to give voting instructions and confirm that those instructions have been recorded properly.

 

Brokers or banks holding Lamson common shares in “street name” may vote your Lamson common shares on the adoption of the merger agreement only if you provide instructions on how to vote. Brokers or banks will provide you with directions on how to instruct the broker or bank to vote your Lamson common shares, and you should carefully follow these instructions.

Special instructions for shareholders who hold all or some of their Lamson common shares under the Company 401(k) Plan.  Shareholders who hold all or some of their Lamson common shares under the Company 401(k) Plan cannot vote their Lamson common shares held under the Company 401(k) Plan directly on matters presented at the special meeting. In order to cause Lamson common shares under the Company 401(k) Plan to be voted, you must complete a consent card that instructs a trustee of the Company 401(k) Plan how to vote such common shares. All Company 401(k) Plan shareholders will receive a consent card with respect to Lamson common shares held under the Company 401(k) Plan separately from the proxy card. In order to have your shares held under the Company 401(k) Plan voted, you must provide your consent in accordance with the instructions on the separate consent card.

 

If you have any questions about how to vote or direct a vote in respect of your Lamson common shares, you may contact our Investor Relations Department by phone at (216) 464-3400 or by submitting a question to Georgeson at:

 

Georgeson Inc.

17 State Street — 10th Floor

New York, NY 10004

Banks and Brokers Call:

(212) 440-9800

All others call Toll-Free:

(888) 605-8353

 

Revocation of Proxies

 

Any proxy given by a Lamson shareholder may be revoked at any time before it is voted at the special meeting by doing any of the following:

 

 

Solicitation Costs

 

We are soliciting the enclosed proxy card on behalf of our Board. In addition to solicitation by mail, our directors, officers and employees may solicit proxies in person, by telephone or by electronic means. These persons will not be specifically compensated for doing this.

 

We have retained Georgeson to assist in the solicitation process. We will pay Georgeson a fee of $15,000 plus reimbursement of out-of-pocket costs and expenses. We also have agreed to indemnify Georgeson against various liabilities and expenses that relate to or arise out of its solicitation of proxies (subject to certain exceptions).

 

We will ask banks, brokers and other custodians, nominees and fiduciaries to forward our proxy solicitation materials to the beneficial owners of Lamson common shares held of record by such nominee holders. We will reimburse these nominee holders for their customary clerical and mailing expenses incurred in forwarding the proxy solicitation materials to the beneficial owners.

 

Exchange of Share Certificates

 

Our shareholders should not send share certificates with their proxies. Separate transmittal documents for the surrender of certificated and uncertificated Lamson common shares in exchange for cash merger consideration will be mailed to our shareholders as soon as practicable following completion of the merger. See “The Merger Agreement — Payment for Shares” beginning on page 36.

 

THE MERGER

 

The discussion in this proxy statement of the merger and the principal terms of the merger agreement is subject to, and is qualified in its entirety by reference to, the merger agreement, a copy of which is attached to this proxy statement as Annex A. You should read the entire merger agreement carefully.

 

Background of the Merger

 

The Board regularly reviews and evaluates Lamson’s business strategy and strategic alternatives with the goal of enhancing shareholder value. As part of these reviews and evaluations, the Board and management on various occasions have received advice from outside financial advisors.

 

On October 5, 2004, Lamson announced that it retained Brown Gibbons Lang & Company, which is referred to as BGL, as its financial advisor to explore strategic alternatives to enhance shareholder value, which included the possible sale of the Company.

 

On April 13, 2005, after concluding this review, Lamson announced that “although we received a number of expressions of interest to acquire the company, we did not receive anything that the Board felt would be in the best value creation interest of Lamson’s shareholders.” Lamson further indicated that “as has been our practice historically, management and the Board will continue to be alert for opportunities to maximize shareholder value.”

 

Between April 2005 and February 2007, Lamson had periodic, informal conversations with various parties, including Thomas & Betts, regarding a possible strategic business combination. None of these conversations went beyond the exploratory stage.

 

On December 4, 2006, Admiral Advisors, LLC, an affiliate of Ramius Capital Group, L.L.C., which is referred to as Ramius, delivered a letter to Michael J. Merriman, Lamson’s President and Chief Executive Officer, expressing its belief that the Company’s shares were significantly undervalued and recommending that Lamson take certain strategic and operational actions to enhance shareholder value.

 

On December 8, 2006, the Board convened a regularly scheduled meeting and discussed the Ramius letter, among other items. The Board authorized Mr. Merriman to communicate with Ramius regarding the contents of its letter.

 

On January 12, 2007, the Board convened a special meeting to discuss developments regarding Ramius, among other things. Mr. Merriman summarized his meeting with Ramius and advised the Board that Ramius had requested a second meeting on January 26, 2007, and had indicated a desire to nominate potential directors at the Company’s annual meeting.

 

On January 18, 2007, Ramius delivered a letter to Mr. Merriman and the Board urging the Board to immediately hire an investment bank to fully explore all strategic alternatives to maximize shareholder value, including both a sale of Lamson’s PVC pipe business and a sale of the entire Company. Ramius also stated in the letter that it would like to discuss immediate representation on the Board, and stated that if immediate representation was not granted, it would nominate directors for election at the 2007 annual meeting of shareholders.

 

On January 19, 2007, the Board convened a special meeting to discuss Ramius’ January 18, 2007 letter, among other things. Mr. Merriman reported on his recent communications with Ramius. The Board discussed the continuing process of forming of a team of experts experienced in situations similar to the Company’s involving activist hedge funds.

 

At a Board meeting held on January 30, 2007, Mr. Merriman reported on the status of discussions with Ramius and introduced PWP as a potential financial advisor to the Board based on its general experience in situations similar to the Company’s involving activist hedge funds and its specific experiences with Ramius.

 

On February 12, 2007, the Board met to discuss further developments with Ramius. At this meeting the Board formally approved engaging PWP to assist the Board in reviewing strategic alternatives available to enhance shareholder value.

On the same day, Lamson publicly announced that it had engaged PWP to assist in the evaluation of the Company’s strategic and financial alternatives including, but not limited to, a sale of certain assets or the entire Company, formation of joint ventures, a change to the Company’s capital structure, and continued implementation of Lamson’s current strategic business plan.

 

Also on February 12, 2007, Ramius delivered a letter to Lamson’s corporate secretary formally nominating four directors for election at the 2007 annual meeting of shareholders. Since February 12, 2007, Lamson and Ramius have had periodic conversations about giving Ramius board representation. No agreement was ever reached.

 

The Board next met for a regularly scheduled meeting on February 15, 2007. At the meeting, PWP discussed the anticipated schedule of the strategic alternative exploration process.

 

On March 9, 2007, the Board met to consider PWP’s report on strategic and financial alternatives, among other items. PWP led the Board through a presentation which included a situation overview, an assessment of the Company’s standalone business plan (both a base case and a cyclical case), an assessment of that plan augmented by an acquisition, an assessment of a recapitalization, an assessment of the divestiture (in whole or in part) of the PVC pipe business and an assessment of the sale of the entire Company. The PWP analysis suggested that the highest value for shareholders was most likely to be realized through a sale of the entire Company, but was dependent on competitive dynamics, business performance and market conditions. After an extensive discussion among the directors, the Board directed PWP to explore the level of interest in a sale of the entire Company by contacting potential buyers, in addition to continuing its evaluation of the other alternatives.

 

Between March 9, 2007 and April 5, 2007, PWP contacted or had initial discussions with 46 parties potentially interested in a transaction involving Lamson, including Thomas & Betts and 17 other potential strategic buyers and 28 private equity firms. Thirty-two of these parties requested confidentiality agreements and 27 parties, consisting of Thomas & Betts and five other potential strategic buyers and 21 private equity firms, executed confidentiality agreements. Each of these 27 parties received certain summary non-public information regarding the Company.

 

On April 5, 2007, PWP distributed a preliminary bid instruction letter to these 27 potential bidders and requested preliminary bids by April 24, 2007. Bidders were permitted to bid on the entire Company or certain parts of the Company.

 

On April 24, 2007, ten of the 27 potential bidders, consisting of eight private equity firms and two potential strategic buyers, submitted preliminary all-cash bids. Seven of these ten bids were submitted by private equity firms interested in acquiring the entire Company. The remaining three bids, consisting of one bid from a private equity firm and two bids from potential strategic buyers, were for the PVC pipe business only. Thomas & Betts did not submit a preliminary bid and informed PWP that it no longer had an interest in pursuing a transaction with the Company.

 

On April 27, 2007, the Board convened a regularly scheduled meeting to consider the preliminary bids, among other items. After extensive discussion with PWP, the Board authorized PWP to continue discussions with the four bidders for the entire Company that had expressed the strongest interest and had submitted the highest all-cash bids and to continue discussions with bidders for the PVC pipe business, including providing information and exploring potential structures for a transaction. Since April 27, 2007, the Company and PWP had periodic discussions with bidders for the PVC pipe business as well as a large supplier regarding potential transaction alternatives for the PVC pipe business. No agreement was ever reached.

 

On May 8, 2007, the Board convened a special meeting to consider the appointment of a special committee of the Board to assume control of and conduct the review of strategic alternatives going forward. Management had expressed concern that, because each of the bidders selected by the Board to further participate in the sales process were financial, as opposed to strategic, buyers, and that one or more of these bidders may request or offer that Lamson management maintain a role with Lamson, participation of the management directors could be perceived to create a conflict of interest.

 

After extensive discussions, the Board formed the Special Committee, consisting of independent directors James T. Bartlett (chairman), John C. Dannemiller, George R. Hill, William E. MacDonald, III, A. Malachi

Mixon, III and D. Van Skilling, which is referred to as the Special Committee. The Board delegated to the Special Committee the full power and authority to, among other things, (i) review, evaluate and, if appropriate, negotiate a possible sale of Lamson and any other strategic alternatives, as appropriate, and (ii) accept or reject a proposed transaction to sell Lamson or any other strategic alternatives. On May 10, 2007, the Special Committee retained Thompson Hine LLP to act as its special legal counsel.

 

Throughout May and June of 2007, PWP managed and facilitated the four bidders’ due diligence review of Lamson, which included discussions and meetings with Lamson’s management and review of certain non-public information pursuant to the terms of the confidentiality agreements between the remaining bidders and the Company.

 

On May 25, 2007 and June 1, 2007, the Special Committee met to receive updates from PWP on the sale process.

 

On June 14, 2007, PWP distributed to the four remaining bidders a final bid instruction letter, which enclosed a draft merger agreement and requested that final bids be submitted by July 12, 2007. On June 21, 2007, one of the four final bidders withdrew from the auction process.

 

On July 2, 2007, the Special Committee convened a meeting to discuss the ongoing sale process. PWP summarized three recent occurrences that could lead the final bids to be lower than originally anticipated: (1) the Company’s year-to-date performance relative to prior periods; (2) the generally increased stock market volatility and volatility in the Company’s stock price; and (3) the generally increased cost of capital in the private equity debt financing market. PWP informed the Special Committee that two of the three bidders expected to meet the July 12, 2007 final bid deadline, while the third bidder indicated that it expected to submit its bid soon thereafter.

 

On July 12, 2007, two of the final bidders submitted conditional proposals to purchase the entire Company. The third bidder withdrew from the auction process.

 

On July 13, 2007, the Special Committee met with PWP and management to review the two bids that had been received. PWP summarized the key terms of each of the bids, including the request by each bidder to receive 45 days of exclusivity to complete outstanding due diligence and negotiate final documentation. After an extensive discussion, the Special Committee instructed PWP to contact each bidder and propose a due diligence period of approximately four weeks in lieu of the 45 days of exclusivity, after which each bidder would be expected to make its final and best offer on August 10, 2007.

 

On July 18, 2007, PWP reported back to the Special Committee that both bidders had agreed to the proposed timetable on a non-exclusive basis.

 

On July 26, 2007, the full Board convened a regularly scheduled meeting and received an update from PWP on the status of the auction process. Members of the Board who were not on the Special Committee were updated as well on the various discussions that had occurred with the Special Committee members since the Board’s last meeting on April 27, 2007.

 

On July 27, 2007, the Company reported second quarter and first half results and revised its full year earnings per share forecast down to $1.70-$1.90 from $1.80-$2.00. Shortly thereafter, one of the two remaining bidders withdrew from the auction process.

 

On August 3, 2007, representatives of Thomas & Betts contacted PWP and expressed a desire to re-enter the process. PWP informed Thomas & Betts of the date for submitting its final and best offer. Thomas & Betts was given access to the due diligence materials that had been made available to the original four final bidders, received the draft of the merger agreement distributed to the original final four bidders, attended management presentations and visited certain of the Company’s facilities.

 

On August 10, 2007, Thomas & Betts submitted an offer of $27.00 per share. The other bidder submitted an offer of $23.75 per share. On August 11, 2007, the other bidder submitted a revised offer of $26.00 per share.

 

On the evening of August 12, 2007, the Special Committee met with PWP to consider the two final bids that had been submitted. In addition to summarizing each of the bids, PWP gave a preliminary valuation analysis, and also compared the bids in relation to the other strategic alternatives that the Board had considered before authorizing

the auction process on March 9, 2007. The Special Committee determined that a sale of the Company at a price at or above $27 per share represented greater value to shareholders than any of the other alternatives, and instructed PWP to contact each of the bidders one last time to confirm their offers represented their final and best offers before deciding definitively to proceed with Thomas & Betts.

 

Later that evening, PWP contacted each of Thomas & Betts and the other bidder and requested that each submit its final and best offer by 11 a.m. on August 13, 2007. On August 13, 2007, each of Thomas & Betts and the other final bidder confirmed their final and best offers of $27.00 and $26.00 per share, respectively. Thomas & Betts further indicated that it would be prepared to sign definitive documentation within 24 to 48 hours, subject to final negotiation, but not subject to further due diligence.

 

The Special Committee met with PWP on the morning of August 13, 2007, to discuss PWP’s conversations with the final two bidders. At the conclusion of the meeting, the Special Committee authorized PWP and the Company’s legal advisors to negotiate with Thomas & Betts to arrive at a final negotiated deal by Wednesday, August 15, 2007, at or above $27.00 per share.

 

On the afternoon of August 13, 2007, Thomas & Betts agreed that the Board could declare a special, one-time dividend of $0.30 per share in connection with the closing of an acquisition of Lamson by Thomas & Betts. Between the afternoon of August 13, 2007 and the afternoon of August 15, 2007, legal counsel to Lamson and legal counsel to Thomas & Betts negotiated the terms of the merger agreement.

 

On the afternoon of August 15, 2007, the Board and the Special Committee convened a combined meeting to consider the proposed merger with Thomas & Betts. Because the concern prompting the decision to form the Special Committee — namely that a financial buyer may request or offer that Lamson management maintain a role with Lamson, thereby creating the perception of a conflict of interest — was not applicable to a sale to Thomas & Betts, the Special Committee determined that the full Board should act on the proposal in addition to the Special Committee.

 

At the meeting, members of the Board who were not members of the Special Committee were updated as to the discussions that had occurred at the Special Committee meetings since the Board’s last meeting on July 26, 2007. The Special Committee and the Board reviewed with Lamson’s management and legal and financial advisors the status of negotiations with Thomas & Betts and the proposed terms and conditions of the merger. Lamson’s outside legal counsel reviewed again with the Special Committee and Board members their fiduciary duties in the context of a sale transaction and the material terms and conditions of the merger agreement, as reflected in the then current draft. Counsel also summarized certain contractual obligations, conditions and termination rights relating to obtaining antitrust and other regulatory approvals, payment of a “reverse” termination fee by Thomas & Betts if the merger was not consummated if certain regulatory approvals were not obtained, as well as the provisions and termination fees applicable in situations in which the transaction were made the subject of competitive bids from third parties or in which the Board withdrew its recommendation of the merger. Representatives of PWP then reviewed the financial aspects of the proposed merger. At the conclusion of PWP’s presentation, a representative of PWP orally rendered its opinion to the Board, which opinion was subsequently confirmed in writing, that, as of August 15, 2007, and based upon and subject to the various factors, assumptions and limitations set forth in such opinion, the merger consideration to be received by the holders of Lamson common shares (other than Thomas & Betts or any of its affiliates) in the merger was fair, from a financial point of view, to such holders. Following a thorough discussion, the Special Committee, and then the full Board, each unanimously determined that the merger was in the best interests of the Lamson shareholders and approved the merger and the merger agreement, resolved to recommend that Lamson shareholders vote to adopt the merger agreement, and authorized its executive officers to execute and deliver the merger agreement.

 

On the evening of August 15, 2007, the parties executed and delivered the merger agreement and announced the signing of the merger agreement.

 

Lamson’s Reasons for the Merger

 

During the course of reaching its decision to approve the merger and the transactions contemplated by the merger agreement, the Special Committee and the Board considered a number of factors and consulted the Company’s senior management and outside financial and legal advisors.

 

The Special Committee and the Board considered a number of potentially positive factors in its deliberations, including, among other matters:

 

 

 

 

 

The Special Committee and the Board also considered a number of potentially negative factors in its deliberations concerning the merger, including, but not limited to:

 

 

 

 

 

During its consideration of the merger with Thomas & Betts, the Special Committee and the Board were also aware that some of our directors and executive officers have interests in the merger that are in addition to or differ from those of our shareholders generally, as described in “— Interests of Lamson Directors and Executive Officers in the Merger” beginning on page 27.

 

This summary is not meant to be an exhaustive description of the information and factors considered by the Special Committee and the Board but is believed to address the material information and factors considered by each of them. In view of the wide variety of factors considered by the Special Committee and the Board, it is not possible to quantify or to give relative weights to the various factors. After taking into consideration all of the factors set forth above, as well as other factors not specifically described above, the Special Committee and the Board unanimously concluded that the merger is advisable to, and in the best interests of, Lamson shareholders and approved the merger agreement and the transactions contemplated by the merger agreement.

 

Recommendation of the Special Committee and the Board

 

At its combined meeting on August 15, 2007, after due consideration, the Special Committee and the Board joined to consider the merger agreement and unanimously approved the merger agreement and they each unanimously recommend that Lamson shareholders vote FOR the adoption of the merger agreement.

 

Opinion and Summary of Analyses of PWP

 

PWP rendered its opinion to the Board that, as of August 15, 2007, and based upon and subject to the various assumptions made, procedures followed, matters considered and limitations set forth in such opinion, the merger consideration to be received by the holders of Lamson common shares (other than Thomas & Betts or any of its affiliates) in the merger was fair, from a financial point of view, to such holders.

 

The full text of PWP’s opinion, dated as of August 15, 2007, which sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations on the review undertaken by PWP, is attached as Annex B and is incorporated by reference in this proxy statement. PWP’s opinion is directed only to the fairness, from a financial point of view, of the merger consideration (other than Thomas & Betts or any of its affiliates) in the merger, and does not address any other aspect of the merger. The opinion does not address the Company’s underlying business decision to enter into the merger. The opinion does not constitute a recommendation to any holder of Lamson common shares as to how such holder of Lamson common shares should vote or otherwise act with respect to the proposed merger or any other matter. PWP provided its opinion for the information and assistance of the Board in connection with and for the purposes of its evaluation of the merger. Holders of Lamson common shares are urged to read the opinion carefully and in its entirety. This summary is qualified in its entirety by reference to the full text of the opinion.

In arriving at its opinion, PWP, among other things:

 

 

In arriving at its opinion, PWP assumed and relied upon, without independent verification, the accuracy and completeness of the financial and other information supplied or otherwise made available to it (including information that was available from generally recognized public sources) for the purposes of its opinion and further relied upon the assurances of the management of the Company that information furnished by them for purposes of PWP’s analysis did not contain any material omissions or misstatements of fact. With respect to the management standalone business plan and the financial forecasts and estimates referred to above, PWP assumed, with the consent of the Board, that they had been reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of management as to the matters contained therein. However, for purposes of its analysis, with the consent of the Board, PWP evaluated management’s estimates of the future unlevered free cash flows of the Company assuming margins consistent with historical margins and management agreed with the appropriateness of the use of such margins in performing its analysis in addition to those contained in such forecasts and estimates referred to above. Additionally, PWP discussed with management and the Board the risks and uncertainties relating to the achievability of such management standalone business plan and financial forecasts and estimates. In arriving at its opinion, PWP did not make any independent valuation or appraisal of the assets or liabilities (including any contingent, derivative or off-balance sheet assets and liabilities) of the Company, nor was it furnished with any such valuations or appraisals, nor did PWP evaluate the solvency of any party to the merger agreement under any state or federal laws of bankruptcy, insolvency or similar matters. PWP relied as to all legal matters relevant to rendering its opinion upon the advice of counsel.

 

PWP was neither asked to, nor did it, offer any opinion as to the terms of the merger agreement or the form of the merger. In addition, PWP assumed that the merger will be consummated in accordance with the terms set forth in the draft merger agreement reviewed by it, without material modification, waiver or delay, and that the final executed form of the merger agreement did not differ in any material respect from the draft reviewed by it. PWP further assumed that all material governmental, regulatory and other consents and approvals necessary for the consummation of the merger will be obtained without any adverse effect on the Company. PWP did not express any opinion as to any tax or other consequences that may result from the transactions contemplated by the merger agreement, nor did its opinion address any legal, tax, regulatory or accounting matters, as to which PWP understood that the Company had received such advice as it deemed necessary from qualified professionals.

 

PWP’s opinion was necessarily based on financial, economic, market and other conditions as in effect on, and the information made available to PWP as of, the date of the opinion. PWP assumed no obligation to update, revise or reaffirm its opinion based on subsequent developments. PWP expressed no opinion as to the fairness of the

merger to, or any consideration to, the holders of any class of securities (other than Lamson common shares), creditors or other constituencies of the Company.

 

The following is a brief summary of the material financial analyses performed by PWP in connection with rendering the opinion described above, and does not purport to be a complete description of the financial analyses performed by PWP. The order of analyses described below does not represent the relative importance or weight given to those analyses by PWP. Some of the summaries of the financial analyses include information presented in tabular format. The tables must be read together with the full text of each summary and alone are not a complete description of the financial analyses of PWP. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before August 15, 2007 and is not necessarily indicative of current market conditions.

 

Historical Stock Trading and Transaction Premium Analysis

 

PWP reviewed the historical trading prices of Lamson common shares for each of the 30-day, 60-day, 90-day, 180-day and one year periods ending on August 14, 2007, which was the last full trading day prior to the preparation of PWP’s financial analyses and which we refer to as the Pre-Analysis Date, and December 4, 2006, which was the last full trading day prior to the initial filing of a Schedule 13D by Ramius and its affiliates with respect to their ownership of Lamson common shares and which we refer to as the Unaffected Date.

 

In addition, PWP calculated the implied premium represented by the merger consideration relative to the following:

 

 

The results of these calculations are summarized in the following table:

 

 

Implied Transaction Multiples

 

In performing this analysis, PWP first derived implied enterprise values of the Company based on the price per share on the Pre-Analysis Date, the price per share on the Unaffected Date and the merger consideration to be received by the holders of Lamson common shares in the merger. The implied enterprise values were derived by calculating fully-diluted equity values of the Company by multiplying the fully-diluted Lamson common shares outstanding, based on information provided by Company management, by the price per share on the Pre-Analysis Date and the Unaffected Date and by the merger consideration to be received by the holders of Lamson common shares in the merger, and then, in each case, adding net debt of the Company as of June 30, 2007, the latest publicly available balance sheet for the Company.

 

PWP calculated the following multiples and ratios of historical and estimated financial results:

 

 

 

The results of these analyses are summarized in the following table:

 

 

Selected Companies Analysis

 

PWP reviewed and compared certain financial information for the Company to corresponding financial information, ratios and public market multiples for the following publicly traded companies deemed by PWP to be relevant to its analysis:

 

 

PWP calculated and compared financial information and various financial market multiples and ratios of the selected companies based on information it obtained from SEC filings for historical information and consensus estimates provided by the Institutional Brokerage Estimate System, or IBES (a data service that compiles estimates issued by securities analysts), for forecasted information. For the Company, PWP made calculations based on the closing price per share on the Pre-Analysis Date and on the Unaffected Date and the merger consideration, and utilized third party research for forecasted information.

 

With respect to the Company and each of the selected companies, PWP reviewed, among other things:

 

 

The results of these analyses are summarized in the following tables:

 

 

 

 

Source: IBES estimates for selected companies and third party research for the Company

 

In addition, with respect to the Company and each of the selected companies, PWP reviewed the percentage of revenues derived from electrical, PVC pipe and other business segments. The results of this analysis are summarized in the following table:

 

 

Although the selected companies were used for comparison purposes, no business of any selected company was either identical or directly comparable to the business of the Company, as illustrated by the table depicting the differences in percentages of revenues derived by business segment. Accordingly, PWP’s comparison of the selected companies to the Company and analysis of the results of such comparisons was not purely mathematical, but instead necessarily involved complex considerations and judgments concerning differences in financial and operating characteristics and other factors that could affect the relative values of the selected companies and of the Company.

 

Selected Transactions Analysis

 

PWP analyzed certain information relating to the following selected transactions since 1997:

 

 

For each of the selected transactions and for the merger, PWP calculated and compared the resulting enterprise value in the transaction as a multiple of LTM EBITDA. Multiples for the selected transactions were based on publicly available information at the time of the relevant transaction.

 

Although the selected transactions were used for comparison purposes, none of the selected transactions nor the companies involved in them was either identical or directly comparable to the merger, the Company or Thomas & Betts. Accordingly, PWP’s comparison of the selected transactions to the merger and analysis of the results of such comparisons was not purely mathematical, but instead necessarily involved complex considerations and judgments concerning differences in financial and operating characteristics and other factors that could affect the relative values of the selected transactions and of the merger.

 

The results of this analysis are summarized in the following table:

 

 

Discounted Cash Flow Analysis

 

PWP performed a discounted cash flow analysis to calculate the estimated present value as of October 1, 2007 of the standalone unlevered free cash flows that the Company could generate during the fourth quarter of fiscal year 2007 and fiscal years 2008 through 2011. Estimates of unlevered free cash flows used for this analysis were based on Company management estimates, which we refer to as the Management Case, and Company management estimates adjusted to assume historical average EBITDA margins of the Company from 2000 to 2006 of 10%, which we refer to as the Sensitivity Case. PWP used discount rates ranging from 11.5% to 13.0% based on estimates of the weighted average cost of capital of the Company, calculated present values of unlevered free cash flows generated over the period described above and then added terminal values assuming enterprise value to terminal year EBITDA multiples ranging from 4.25x to 5.00x for the Management Case and 6.50x to 8.00x for the

Sensitivity Case. This analysis indicated an implied range of equity values of $27.65 to $32.23 per share in the Management Case and $22.72 to $27.86 per share in the Sensitivity Case.

 

The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Selecting portions of the analyses or of the summary set forth herein, without considering the analyses or the summary as a whole, could create an incomplete view of the processes underlying the opinion of PWP. In arriving at its fairness determination, PWP considered the results of all of its analyses and did not attribute any particular weight to any factor or analysis. Rather, PWP made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all of its analyses. No company or transaction used in the analyses described herein as a comparison is directly comparable to the Company or the merger.

 

PWP prepared the analyses described herein for purposes of providing its opinion to the Board as to the fairness, from a financial point of view, of the merger consideration to be received by the holders of Lamson common shares (other than Thomas & Betts or any of its affiliates) in the merger, as of the date of PWP’s opinion. These analyses do not purport to be appraisals or necessarily reflect the prices at which businesses or securities actually may be sold. PWP’s analyses were based in part upon the Company management’s standalone business plan and financial forecasts and estimates, including as adjusted in certain cases, which are not necessarily indicative of actual future results, and which may be significantly more or less favorable than suggested by PWP’s analyses. Because these analyses are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties to the merger agreement or their respective advisors, none of the Company, PWP or any other person assumes responsibility if future results are materially different from those forecasted by management of the Company or third parties.

 

As described above, the opinion of PWP to the Board was one of many factors taken into consideration by the Company’s Special Committee and Board in making its determination to approve the merger. PWP was not asked to, and did not, recommend the specific consideration payable in the merger, which merger consideration was determined through negotiations between the Company and Thomas & Betts.

 

The Board selected PWP to act as its financial advisor based on PWP’s qualifications, expertise and reputation and its knowledge of the industries in which the Company conducts its business. PWP, as part of its investment banking business, is continually engaged in performing financial analyses with respect to businesses and their securities in connection with mergers and acquisitions, leveraged buyouts and other transactions as well as for corporate and other purposes

 

Pursuant to a letter agreement dated February 7, 2007, the Company engaged PWP to act as its financial advisor in connection with the contemplated merger. Pursuant to the terms of such engagement letter, the Company paid PWP retainer fees and agreed to pay PWP a transaction fee, which represents a significant portion of its total compensation, upon consummation of the merger. The Company also agreed to reimburse PWP for its reasonable expenses, including attorneys’ fees and disbursements, and to indemnify PWP and related persons against various liabilities, including certain liabilities under the federal securities laws. In the ordinary course of business, PWP or its affiliates may at any time hold long or short positions, and may trade or otherwise effect transactions, for their own account or the accounts of customers, in debt or equity securities (or related derivative securities) or senior loans of the Company or Thomas & Betts.

 

Other than in connection with the merger and the fairness opinion summarized above, PWP has not provided any services to Thomas & Betts and its affiliates or to the Company and its affiliates.

 

Certain Financial Information

 

In the course of the sale process described under “— Background of the Merger,” we provided Thomas & Betts and certain other potential purchasers who signed confidentiality agreements selected, non-public financial projections prepared by our senior management. Lamson does not as a matter of course make public projections as to future performance or earnings and the portions of these financial projections set forth below are included in this proxy statement only because this information was provided to Thomas & Betts and certain other potential purchasers on a confidential basis in connection with Lamson’s sale process and because this information was used by PWP in rendering its fairness opinion, including as described under “— Opinion and

Summary of Analyses of PWP — Discounted Cash Flow Analysis,” beginning on page 24. You should note that these financial projections constitute forward-looking statements. See “Forward-Looking Statements May Prove Inaccurate” on page 9.

 

Lamson advised the recipients of the financial projections that such projections are subjective in many respects. The financial projections are based on a variety of estimates and assumptions of our senior management regarding our business, industry performance, general business, economic, market and financial conditions and other matters, all of which are difficult to predict and many of which are beyond our control. In particular, these forward-looking statements were prepared on the assumption that Lamson remained a publicly-traded company and were based on numerous other assumptions that are now out-dated. You should not regard the inclusion of these projections in this proxy statement as an indication that Lamson, Thomas & Betts, PWP or any of their respective affiliates or representatives considered or consider the projections to be a reliable prediction of future events, and you should not rely on the projections as such. Accordingly, there can be no assurance that the assumptions made in preparing the projections will prove accurate. If the assumptions do not prove accurate, the projections will not be accurate. It is expected that there will be differences between actual and projected results, and actual results may be materially greater or less than those contained in the projections. It is highly likely that the contribution of Lamson’s business to Thomas & Betts’ consolidated results will be different from Lamson’s performance on a stand alone basis. In addition, if the merger is not consummated, we may not be able to achieve these financial projections. None of Lamson, Thomas & Betts or any of their respective affiliates or representatives has made or makes any representations to any person regarding the ultimate performance of Lamson compared to the information contained in the projections.

 

The financial projections have been prepared by, and are the responsibility of, Lamson’s senior management. Neither Lamson’s independent auditors, nor any other independent accountants, have compiled, examined or performed any procedures with respect to the financial projections set forth below, nor have they expressed any opinion or any other form of assurance with respect thereto. The financial projections were not prepared with a view toward public disclosure or compliance with published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. We do not intend to update these out-dated financial projections or to make other projections public in the future.

 

The financial projections included (in millions of dollars):

 

 

 

 

The foregoing financial projections are based upon numerous estimates and assumptions including, without limitation, the following:

 

 

Interests of Lamson Directors and Executive Officers in the Merger

 

In considering the Board’s recommendation to vote for the proposal to adopt the merger agreement, Lamson shareholders should be aware that some of the directors and executive officers of Lamson have interests in the merger that are different from, or in addition to, the interests of Lamson shareholders generally and that may create potential conflicts of interest. The Board was aware of and considered the interests of its directors and executive officers when it considered and approved the merger agreement and determined to recommend to Lamson shareholders that they vote for the proposal to adopt the merger agreement.

 

Treatment of Stock Options

 

Under the terms of the merger agreement, each outstanding stock option held by our employees (including our executive officers) and directors that is outstanding as of the effective time of the merger (whether or not such stock option is vested and exercisable prior to the effective time) will be canceled and converted into the right to receive a cash payment equal to the number of shares underlying the option multiplied by the amount (if any) by which $27.30 (the sum of the cash consideration and the special cash dividend) exceeds the option exercise price, less any applicable withholding taxes, and without interest.

 

The following table shows, for our directors and executive officers, the aggregate number of shares subject to outstanding options, the cash-out value of the outstanding options with a per share exercise price less than $27.30, the aggregate number of shares subject to outstanding unvested options and the cash-out value of such unvested options. The information in the table is as of July 31, 2007.

 

 

Treatment of Stock Appreciation Rights

 

Under the terms of the merger agreement, each stock appreciation right, which is referred to as a SAR, held by our executive officers that is outstanding as of the effective time (whether or not such SAR is vested and exercisable prior to the effective time) will be canceled and converted at the effective time into the right to receive a cash amount equal to the number of shares subject to the SAR multiplied by the amount (if any) by which $27.30 (the sum of cash consideration and the special cash dividend) exceeds the base price of the SAR, less any applicable withholding taxes, and without interest.

The following table shows, for our executive officers, the aggregate number of SARs outstanding with a base price less than $27.30, the estimated cash-out value of such SARs, the aggregate number of unvested SARs and the cash-out value of such unvested SARs. The information in the table is as of July 31, 2007.

 

 

Treatment of Restricted Stock

 

Under the terms of the merger agreement, each outstanding restricted share held by our employees (including our executive officers) and directors that is outstanding as of the effective time of the merger will cease to be subject to any restrictions and will be canceled and converted into the right to receive a cash payment equal to $27.00, less any applicable withholding taxes, and without interest. The special cash dividend also will be paid on each restricted share.

 

The following table shows, for our executive officers and directors, the aggregate number of restricted shares and the cash-out value of such restricted shares (calculated at $27.30 per restricted share). The information in the table is as of July 31, 2007.

 

The following table shows, for our directors and executive officers, the aggregate cash payments to be received with respect to stock options, SARs and restricted shares outstanding as of July 31, 2007.

 

 

Change in Control Agreements; Other Payments

 

Lamson has entered into separate change in control agreements with all of the executive officers, which will become operative upon the occurrence of a change in control, for an initial term of two years (in the case of James J. Abel, Eileen A. Clancy, Donald A. Gutierrez, Andrew J. Patterson, Michael R. Pearch, James A. Rajecki, Lori L. Spencer and Norman P. Sutterer) or three years (in the case of Michael J. Merriman, Jr.). The completion of the merger will constitute a change in control for purposes of these agreements. As described below, the occurrence of a change in control results in certain terms of employment and severance protections taking effect, although no severance benefits are actually due unless there is a subsequent qualifying termination of employment.

 

Each change in control agreement provides generally that the applicable executive officer’s terms and conditions of employment (including position, responsibilities, location, compensation and benefits) will not be adversely changed during the term of the agreements and provides for certain guaranteed compensation levels during such term. Each agreement provides that, if the applicable executive officer’s employment is terminated during the term of the agreement, either by the Company or its successor, for any reason other than death, permanent disability or termination for cause (as defined in the applicable agreement), or by the executive officer for good reason (as defined in the applicable agreement), then the applicable executive officer will generally be entitled to receive severance benefits as follows:

 

 

 

Each agreement also provides that the applicable executive officer is entitled to a “gross-up” payment to make the executive whole for any federal excise tax imposed on change in control or severance payments or benefits received by the executive officer that are treated as “excess parachute payments” under Section 280G of the Internal Revenue Code of 1986, as amended, which is referred to as the Internal Revenue Code.

 

If terminated in connection with the merger, the executive officers would receive pro-rata annual bonus payments related to the Company’s 2007 fiscal year. The executive officers other than Mr. Merriman would receive a pro rata payment based on the Company’s financial performance through the date of the completion of the merger, projected through the end of the year, compared to target performance levels for 2007 under the Company’s Executive Incentive Compensation Plan. Based on current Company’s year-to-date performance levels, the executive officers would receive pro rata payouts at approximately 16% of their target bonus levels. Mr. Merriman would receive a pro rata payment of this 2007 bonus, which is guaranteed under his letter agreement with the Company dated October 26, 2005 at 72% of his 2007 base salary rate of $525,000.

 

The following table summarizes the estimated cost of the change in control and severance benefits for our executive officers if each executive officer’s employment were terminated immediately following the merger, as well as the pro rata bonus payments that the executive officers would receive, as described above, assuming an October 15, 2007 merger closing date:

 

 

Schulze Agreement

 

In March, 2007, Lamson chairman and former chief executive officer John B. Schulze entered into a consulting agreement with Lamson. This agreement provides that all payments that would have been paid to Mr. Schulze under the agreement but that remain unpaid upon a change in control will automatically become payable in a lump sum upon a change in control. The completion of the merger will constitute a change of control of Lamson under this agreement. As of July 31, 2007, $350,000 remains to be paid to Mr. Schulze under the consulting agreement.

 

Deferred Compensation Plans

 

All of our executive officers and directors are eligible to participate in our non-qualified deferred compensation plans, pursuant to which each participant may elect to defer, in the case of an executive officer, salary and other payments that he or she would otherwise have received under the annual bonus and cash long-term incentive plans, and in the case of directors, all or a portion of his or her cash annual retainer or meeting fees for serving on the Board or its committees. For any fees that a director defers into a phantom Lamson common share account, Lamson matches 25% of the deferred amounts in the form of a grant of restricted shares to the director, vesting in three years (or earlier upon the retirement, death or disability of the director or upon a change in control). Messrs. Bartlett, Coquillette, Dannemiller, Hill, McDonald, Mixon and Skilling made an election prior to 2007 to

have their meeting fees deferred into phantom Lamson common share accounts. As a result, their August 15, 2007 Board meeting fees were so deferred, and they became entitled to the 25% match in restricted shares based on the common share closing price on August 15, 2007.

 

Our non-qualified deferred compensation plans provide for the lump sum payment of participants’ accounts upon a change in control (such as the merger). All of our executive officers and directors are fully vested in their accounts in our non-qualified deferred compensation plans. As of July 31, 2007, the aggregate value of directors’ deferred compensation plan accounts was approximately $5.5 million. As of June 30, 2007, the aggregate value of executive officers’ deferred compensation plan accounts was approximately $1.1 million.

 

Outside Directors’ Benefit Program

 

The seven non-employee directors who were directors as of December 31, 2004 (including current directors Messrs. Bartlett, Coquillette, Dannemiller, Hill, Mixon and Skilling and former director Martin J. Cleary) are covered by the Outside Directors’ Benefit Program. This program was closed to new entrants as of December 31, 2004. The Outside Directors’ Benefit Program generally provides for benefits payable upon a director’s normal retirement at or after age 70. Benefits payable at normal retirement equal the annual retainer paid as of December 31, 2004 ($15,000, increased by 25% for directors who deferred their retainers into the phantom Lamson common share account described above), payable for a ten-year period in quarterly installments. Early retirement benefits, or death benefits commencing before the date the deceased director would have attained age 70, are reduced by 5/6 of one percent for each month that they commence before such date. The participant, the participant’s beneficiary or Lamson may elect that such retirement or death benefits be paid in an actuarially-equivalent, lump sum payment. The aggregate of the lump sum payments to all seven directors as a group, if received by the directors, would be approximately $0.95 million.

 

Supplemental Retirement Income Plans

 

Two executive officers (Messrs. Merriman and Abel) have individual Supplemental Retirement Agreements, which we collectively refer to as the SERPs. Mr. Abel is fully vested in his SERP benefits. Mr. Merriman is not vested in his SERP benefits. Pursuant to his SERP Agreement, Mr. Merriman will become vested in his SERP benefit upon a change in control. The completion of the merger will constitute a change in control of Lamson under this agreement.

 

Indemnification; Directors’ and Officers’ Insurance

 

Under the merger agreement, Thomas & Betts has agreed, for a period of six years after the effective time of the merger, to cause the surviving company in the merger to indemnify and hold harmless each current and former director and officer Lamson and its subsidiaries from liability and expenses for matters arising at or prior to the completion of the merger to the fullest extent provided by applicable Ohio law and Lamson’s organizational documents, and to the same extent that they would have been indemnified as a Lamson director or officer under indemnification agreements they may have had with Lamson. Thomas & Betts also has agreed that for six years after the effective time of the merger, to maintain directors’ and officers’ liability insurance coverage for the benefit of the officers and directors of Lamson that is at least as favorable to the insureds as the policy maintained by Lamson immediately prior to the effectiveness of the merger, subject to certain limitations on the amount of premiums required to be paid for such insurance coverage.

 

Governmental and Regulatory Matters

 

Under the HSR Act and the rules that have been promulgated thereunder by the FTC, certain acquisition transactions may not be consummated unless information has been furnished to the Antitrust Division and the FTC and certain waiting period requirements have been satisfied. The merger is subject to these requirements and may not be completed until the expiration of a 30-day waiting period following the filing of the required Notification and Report Forms, which are referred to as the forms, with the Antitrust Division and the FTC. Pursuant to the requirements of the HSR Act, Lamson completed the filing of the forms with the Antitrust Division and the FTC on August 29, 2007. Thomas & Betts also filed the forms on August 29, 2007.

The Antitrust Division and the FTC have the authority to scrutinize the legality of transactions under the antitrust laws. For example, the FTC could issue requests to Lamson and Thomas & Betts for additional information regarding the merger. If such requests for additional information were made, the waiting period referred to above would be extended until the end of the 30^th day after both Lamson and Thomas & Betts have substantially complied with the requests for additional information or such later time as is agreed among the parties and the FTC, unless the waiting period is earlier terminated because the FTC determines to close its review.

 

Further, at any time before or after the consummation of the merger, the Antitrust Division or the FTC could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the merger or seeking divestiture of certain of Lamson’s or Thomas & Betts’ assets. Private parties and State Attorneys General may also bring legal actions under the antitrust laws.

 

Certain United States Federal Income Tax Consequences

 

The following is a summary of certain United States federal income tax consequences of the special cash dividend and the merger to Lamson shareholders whose common shares are converted into the right to receive cash under the merger agreement. The summary is based on provisions of the Internal Revenue Code, United States Treasury Regulations promulgated thereunder, judicial opinions and published positions of the United States Internal Revenue Service, each in effect as of the date of this proxy statement and all of which are subject to change, possibly with retroactive effect. The summary applies only to shareholders who hold Lamson common shares as capital assets within the meaning of Section 1221 of the Internal Revenue Code. This summary does not purport to consider all aspects of United States federal income taxation that might be relevant to Lamson shareholders in light of their particular circumstances and does not apply to shareholders that are subject to special rules under the United States federal income tax laws (including, for example, insurance companies, tax-exempt organizations, financial institutions, dealers in securities, persons subject to the alternative minimum tax, persons who hold or have held Lamson common shares as part of a straddle, hedge, integrated constructive sale or conversion transaction for tax purposes, and persons who acquired Lamson common shares in compensatory transactions). If a partnership (including for this purpose any entity or arrangement treated as a partnership for United States federal income tax purposes) is a beneficial owner of Lamson common shares, the tax treatment of a partner in that partnership will generally depend on the status of the partner and the activities of the partnership.

 

This summary does not address the United States federal income tax consequences to any shareholder who, for United States federal income tax purposes, is a non-resident alien individual, foreign corporation, foreign partnership or foreign estate or trust, and does not address any aspect of state, local or foreign taxation.

 

All holders of Lamson common shares are urged to consult their own tax advisors to determine the particular tax consequences to them of the receipt of the special cash dividend and of the merger.

 

Special Cash Dividend

 

Lamson intends to report the special cash dividend as a distribution with respect to the Lamson common shares. It is possible, however, that the IRS could treat the special cash dividend as additional cash received in the merger, with the tax consequences described below under “— Merger.”

 

If the special cash dividend is treated as a distribution with respect to Lamson common shares, the gross amount paid to holders of Lamson common shares would be characterized as dividend income to the extent that the special cash dividend did not exceed Lamson’s current and accumulated earnings and profits (as determined for United States federal income tax purposes). Under current law this income will generally be taxed to non-corporate shareholders at the rates applicable to long-term capital gains (with a 15% maximum federal rate), provided that a minimum holding period and other requirements are satisfied. Corporate shareholders may be entitled to a dividends-received deduction with respect to distributions treated as dividend income for U.S. federal income tax purposes, subject to limitations and conditions.

 

If the amount of the special cash dividend exceeded Lamson’s current and accumulated earnings and profits, the excess would be treated as a non-taxable return of capital to the extent of the shareholder’s adjusted tax basis in its Lamson common shares, and thereafter as gain from the sale or exchange of Lamson common shares. This gain

would be capital gain provided that such shareholder holds the Lamson common shares as a capital asset as of the time of the special cash dividend.

 

Merger

 

In general, a shareholder who surrenders Lamson common shares for cash pursuant to the merger will recognize a capital gain or loss for United States federal income tax purposes equal to the difference, if any, between the amount of cash received in the merger and the shareholder’s adjusted tax basis in Lamson common shares surrendered. Gain or loss will be determined separately for each block of shares (i.e., shares acquired at the same cost in a single transaction) surrendered for cash pursuant to the merger. Such gain or loss will be long-term capital gain or loss if a shareholder’s holding period for such shares is more than one year at the time of the completion of the merger. In the case of individuals, long-term capital gain is currently eligible for reduced rates of United States federal income tax. There are limitations on the deductibility of capital losses.

 

Backup federal withholding tax at a rate of 28% may apply with respect to certain payments, including cash received in the merger, unless a payee (1) is a corporation or comes within certain other exempt categories and, when required, demonstrates this fact or (2) provides a correct taxpayer identification number, certifies as to no loss of exemption from backup withholding and that such shareholder is a U.S. person (including a U.S. resident alien) and otherwise complies with applicable requirements of the backup withholding rules. Each of our shareholders and, if applicable, each other payee should complete and sign the Substitute Form W-9 that will be included as part of the letter of transmittal to be returned to the paying agent, in order to provide the information and certification necessary to avoid backup withholding tax, unless an exemption applies and is established in a manner satisfactory to the paying agent.

 

Backup withholding is not an additional tax and any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against your United States federal income tax liability provided that you furnish the required information to the United States Internal Revenue Service. Such amounts, once withheld, are not refundable by us or the paying agent.

 

The United States federal income tax consequences set forth above are for general informational purposes only and are not intended to constitute a complete description of all tax consequences relating to the merger. Because individual circumstances may differ, all shareholders are urged to consult with their own tax advisors regarding the tax consequences of the merger to them, including the application of state, local and foreign tax laws.

 

Appraisal Rights of Lamson Shareholders

 

If the merger agreement is adopted, each Lamson shareholder objecting to the merger agreement may be entitled to seek relief as a dissenting shareholder under Sections 1701.84 and 1701.85 of the OGCL. The following is a summary of the principal steps a shareholder must take to perfect his or her appraisal rights under the OGCL. This summary is qualified by reference to a complete copy of Sections 1701.84 and 1701.85 of the OGCL, which is attached as Annex C to this proxy statement. Any dissenting shareholder contemplating exercise of his or her appraisal rights is urged to carefully review the provisions of Sections 1701.84 and 1701.85 and to consult an attorney, since failure to follow fully and precisely the procedural requirements of the statute may result in termination or waiver of such rights.

 

To perfect appraisal rights, a dissenting shareholder must satisfy each of the following conditions and must otherwise comply with Section 1701.85:

 

 

 

Lamson and a dissenting shareholder may come to agreement as to the fair cash value of the Lamson common shares. If Lamson and any dissenting shareholder cannot agree upon the fair cash value of the Lamson common shares, then either may, within three months after service of demand by the dissenting shareholder, file a petition in the Court of Common Pleas of Cuyahoga County, Ohio, for a determination that the shareholder is entitled to exercise appraisal rights and to determine the fair cash value of the Lamson common shares. The court may appoint one or more appraisers to recommend a fair cash value. The fair cash value is to be determined as of the day prior to the date of the special meeting. The fair cash value is the amount that a willing seller, under no compulsion to sell, would be willing to accept, and that a willing buyer, under no compulsion to purchase, would be willing to pay, but in no event may the fair cash value exceed the amount specified in the dissenting shareholder’s demand. In determining this value, any appreciation or depreciation in the market value of the Lamson common shares resulting from the merger is excluded. The Ohio Supreme Court, in Armstrong v. Marathon Oil Company, 32 Ohio St. 3d 397 (1987), has held that fair cash value for publicly traded shares of a company with significant trading activity will be the market price for such shares on the date that the transaction is submitted to the shareholders or directors for final approval, as adjusted to exclude the impact of the transaction giving rise to the appraisal rights. The fair cash value may ultimately be more or less than the per share merger consideration. Interest on the fair cash value and costs of the proceedings, including reasonable compensation to any appraisers, are to be assessed or apportioned as the court considers equitable.

 

Payment of the fair cash value must be made within 30 days after the later of the final determination of such value or the closing date of the merger. Such payment shall be made only upon simultaneous surrender to Lamson of the share certificates for which such payment is made.

 

A dissenting shareholder’s rights to receive the fair cash value of his or her Lamson common shares will terminate if:

 

 

All rights accruing from Lamson common shares, including voting and dividend and distribution rights, are suspended from the time a dissenting shareholder makes demand with respect to such shares until the termination or

satisfaction of the rights and obligations of the dissenting shareholder and Lamson arising from the demand. During this period of suspension, any dividend or distribution (including the special cash dividend) paid on the Lamson common shares will be paid to the record owner as a credit upon the fair cash value thereof. If a shareholder’s appraisal rights are terminated other than by purchase by Lamson of the dissenting shareholder’s Lamson common shares, then at the time of termination all rights will be restored and all distributions that would have been made, but for suspension, will be made.

 

Termination of Listing and Deregistration of Lamson Common Shares

 

Lamson common shares are currently authorized for listing on the NYSE under the symbol “LMS.” Upon the consummation of the merger, the listing of Lamson common shares on the NYSE will be terminated and Lamson common shares will be deregistered under the Securities Exchange Act of 1934.

 

THE MERGER AGREEMENT

 

The following description of the merger agreement describes the material provisions of the merger agreement but does not purport to describe all of the terms of the merger agreement. The full text of the merger agreement is attached to this proxy statement as Annex A and incorporated by reference into this proxy statement. You are urged to read the merger agreement in its entirety because it is the legal document that governs the merger.

 

The merger agreement should be read in conjunction with the disclosures in Lamson’s filings with the SEC available at the SEC’s website, www.sec.gov. The provisions contained in the merger agreement are intended to govern the contractual rights and relationships, and to allocate risks, between Lamson and Thomas & Betts with respect to the merger. The representations and warranties made by Lamson and Thomas & Betts to one another in the merger agreement were negotiated between the parties, and any inaccuracies in the representations and warranties may be waived by the beneficiary of such representations and warranties. Moreover, the representations and warranties are qualified in a number of important respects, including through the use of exceptions for certain matters disclosed by the party that made the representations and warranties to the other party. None of the representations and warranties will survive the closing of the merger.

 

The Merger

 

At the effective time of the merger, T&B Acquisition II Corp., a wholly owned subsidiary of Thomas & Betts, will merge with and into Lamson. The separate corporate existence of T&B Acquisition II Corp. will cease and Lamson will continue as the surviving corporation and will become a wholly owned subsidiary of Thomas & Betts. T&B Acquisition II Corp. was created solely for purposes of the merger and has no material assets or operations of its own.

 

Closing and Effective Time of the Merger

 

The closing of the merger will take place no later than the fifth business day after the satisfaction or waiver of the conditions described below under “— Conditions of the Merger” beginning on page 44, unless Lamson and Thomas & Betts agree to another time.

 

The merger will become effective at the time a certificate of merger is filed with the Secretary of State of the State of Ohio or such other time specified in the certificate of merger, which is referred to as the effective time of the merger.

 

Consideration to be Received in the Merger

 

The merger agreement provides that, at the effective time of the merger, each issued and outstanding Lamson common share (other than common shares owned by Lamson, Thomas & Betts, T&B Acquisition II Corp. or a Lamson shareholder exercising appraisal rights) will be converted into the right to receive $27 in cash, without interest, which is referred to as the cash consideration. At that time, each holder of Lamson common shares will no longer have any rights with respect to such common shares, except for the right to receive the cash consideration. In addition, as explicitly permitted by the merger agreement, the Board has declared the special cash dividend of $0.30

per share, which is conditioned upon consummation of the merger and payable to shareholders of record as of the closing date of the merger.

 

Cancellation of Shares

 

Each Lamson common share owned by Thomas & Betts or T&B Acquisition II Corp. or held by Lamson as treasury stock immediately prior to the effective time of the merger automatically will be canceled and will not be entitled to any merger consideration.

 

Treatment of Stock Options, Stock Appreciation Rights and Restricted Stock

 

At the effective time of the merger, each Lamson restricted share and performance accelerated restricted share will be canceled and converted into the right to receive $27 in cash, without interest. In addition, the Board has declared a one time, cash dividend of $0.30 per share, conditioned upon consummation of the merger and payable to shareholders of record as of the closing date of the merger.

 

Pursuant to the merger agreement, we will take all action necessary to adjust the terms of all outstanding options to acquire Lamson common shares and SARs in respect of Lamson common shares so that, upon completion of the merger, each option and SAR outstanding immediately prior to the effective time of the merger will become fully vested and will be converted into the right to receive the excess, if any, of $27.30 (the sum of the cash consideration and the special cash dividend) over the exercise price per share of the stock option or the base price per share of the SAR, as applicable, multiplied by the number of Lamson common shares subject to the stock option or the SAR, as applicable, less any applicable withholding tax. No payment will be made with respect to stock options or SARs that have per share exercise prices or base prices, as applicable, equal to or greater than $27.30.

 

Dissenters’ Shares

 

The merger agreement provides that any Lamson common shares held by a shareholder who has demanded and perfected the demand for appraisal of such holder’s Lamson common shares pursuant to Sections 1701.84 and 1701.85 of the OGCL and as of the effective time of the merger has not withdrawn or lost the right to such appraisal shall not be converted into or represent the right to receive merger consideration and such holder will only be entitled to the right granted to dissenting shareholders under applicable provisions of Ohio law; provided, however, that if such holder effectively withdraws or loses the right to appraisal, then such holder’s shares will automatically be converted into and represent only the right to receive the merger consideration.

 

Payment for Shares

 

Prior to completion of the merger, T&B Acquisition II Corp. will appoint an exchange agent reasonably acceptable to Lamson to act as paying agent for the payment of the merger consideration. At the effective time of the merger, Thomas & Betts or T&B Acquisition II Corp. will deposit with the paying agent funds sufficient to pay the cash consideration.

 

As soon as reasonably practicable after the effective time of the merger, the paying agent will mail to all record holders of Lamson common shares as of the time of the completion of the merger a letter of transmittal and instructions on how to surrender certificates and uncertificated shares in exchange for the cash consideration. Upon (A) delivery of a properly completed letter of transmittal and the surrender of common share certificates or (B) receipt of an “agent’s message” by the paying agent (or such other evidence, if any, of transfer as the paying agent may reasonably request) in the case of a book-entry transfer of uncertificated Lamson common shares, in each case, on or before the first anniversary of the effective time of the merger, T&B Acquisition II Corp. shall cause the paying agent to pay the holder of such certificates or uncertificated shares, in exchange for the certificates or uncertificated Lamson common shares, cash in an amount equal to the cash consideration in respect of the Lamson common shares represented by such certificate or such uncertificated Lamson common shares, without interest. Each certificate representing Lamson common shares that is surrendered will be canceled. You should not send in your Lamson common share certificates until you receive a letter of transmittal with instructions from the paying agent. Do not send common share certificates with your proxy card.

Payment of the cash consideration may be made to a person other than the person in whose name the surrendered certificate is registered if:

 

 

All cash paid upon the surrender of Lamson common shares in accordance with the merger agreement will be deemed to have been paid in full satisfaction of all rights pertaining to the Lamson common shares so surrendered. After the completion of the merger, no transfers of Lamson common shares will be made on the transfer books of the surviving corporation.

 

If your Lamson common share certificate has been lost, stolen or destroyed, you will be entitled to obtain payment of the cash consideration only by signing an affidavit to that effect and, if required by Thomas & Betts, posting a bond in an amount sufficient to protect Thomas & Betts against claims by any other party related to your lost, stolen or destroyed Lamson common share certificate.

 

The merger consideration paid in the merger will be net to the holder of Shares in cash, subject to reduction only for withholding of any applicable federal, state, local or foreign taxes or stock transfer taxes payable by shareholders.

 

Payment of Special Cash Dividend

 

The special cash dividend is conditioned upon consummation of the merger. The special cash dividend will be paid to holders of record on the closing date of the merger, in connection with the closing of the merger. You will not receive the special cash dividend until you receive the cash consideration.

 

Representations and Warranties

 

The merger agreement contains a number of representations and warranties made by Lamson, including representations and warranties relating to:

 

 

 

The merger agreement also contains a number of representations and warranties by Thomas & Betts and T&B Acquisition II Corp. including representations and warranties relating to:

 

 

Significant portions of the representations and warranties of Lamson, Thomas & Betts and T&B Acquisition II Corp. are qualified as to “materiality” or “material adverse effect.” Under the merger agreement, a material adverse effect means, when used in connection with Lamson, material adverse effect on (i) the business, assets, financial condition or results of operations of the Lamson and its subsidiaries, taken as a whole or (ii) the ability of the Lamson to timely perform its obligations under the merger agreement or consummate the merger and other transactions contemplated by the merger agreement except, in the case of clause (i), any such effect resulting from any of the following (but so long as, in the case of the first four bullets below, the effects on the Lamson and its subsidiaries is not disproportionate to that on other companies in the industries in which Lamson and its subsidiaries operate):

 

 

 

Covenants and Agreements

 

Operating Covenants

 

We have agreed, with certain exceptions disclosed to Thomas & Betts, that during the period from the date of the merger agreement until the effective time of the merger:

 

 

 

No Solicitation

 

We have agreed that we will not, nor will we authorize or permit any of our subsidiaries or our or their directors, officers, employees or representatives (including any investment banker, attorney, accountant or other agent, advisor or representative retained by us or any of our subsidiaries) to directly or indirectly:

 

 

 

The merger agreement provides that, notwithstanding the restrictions described above, if, at any time prior to the time that our shareholders adopt the merger agreement, we receive an unsolicited, bona fide, written takeover proposal, we may, if our Board determines in good faith, after consultation with outside legal counsel and financial advisors, that (i) such takeover proposal is reasonably likely to lead to a superior proposal and (ii) failing to take any such action would be inconsistent with the fiduciary duties of the Board, furnish information concerning our business, properties or assets to any third party making such a takeover proposal, and may negotiate and participate in discussions with third parties concerning such takeover proposal to the extent that prior to furnishing the information, we have received an executed confidentiality agreement with terms no less favorable to us than those contained in the confidentiality agreement between us and Thomas & Betts.

 

We have also agreed to keep Thomas & Betts informed of the status and details of such discussions and negotiations, including promptly notifying Thomas & Betts (and in any event within two business days) of the existence of any such proposal and providing Thomas & Betts with any non-public information provided to the third party making the takeover proposal, and to otherwise comply with the terms of our no solicitation obligations (including furnishing required notices) set forth in the merger agreement.

 

The Board cannot approve or recommend, or propose to approve or recommend, any takeover proposal, permit the Company to enter into any letter of intent or agreement with respect to a takeover proposal, or withdraw or modify, or propose publicly to modify, in a manner adverse to Thomas & Betts the Board’s recommendation of the merger, which is referred to as an adverse recommendation change . Notwithstanding the foregoing restrictions, the Board may, in response to a superior proposal that was not solicited by the Company, (x) terminate the merger agreement and cause the Company to enter into an agreement with respect to such superior proposal (see “— Termination” beginning on page 45 for applicable termination procedures and requirements and “— Termination Fees” beginning on page 46 for applicable termination fees), and/or (y) make an adverse recommendation change, but only if, in the case of clauses (x) and (y):

 

 

A “superior proposal” as used herein means a bona fide unsolicited written “takeover proposal” (which definition shall be read, for this purpose, without the word “inquiry”), for at least a majority of the outstanding Lamson common shares or 50% or more of the consolidated assets of the Company and for which the financing, if a cash transaction (whether in whole or in part) is then fully committed, that the Board determines in good faith, after consultation with outside legal counsel and its financial advisor and taking into account all legal, financial and regulatory and other aspects of the takeover proposal (including, among other things, any termination fees, expense reimbursement and conditions to closing), the person making the takeover proposal and all relevant material terms of such takeover proposal, the merger agreement (including any changes to the merger agreement proposed by

Thomas & Betts in response to a takeover proposal), is more favorable from a financial point of view to the shareholders of the Company than the merger and the other transactions contemplated by the merger agreement.

 

A “takeover proposal” as used herein means (i) any inquiry, proposal or offer for a merger, consolidation, share exchange, reorganization, recapitalization, liquidation, dissolution business combination or other similar transaction involving the Company or any of its subsidiaries (in the case of its subsidiaries, only to the extent such subsidiaries represent more than 20% of the consolidated assets of the Company), (ii) any inquiry, proposal or offer to acquire in any manner, directly or indirectly, more than 20% of the outstanding Lamson common shares or other voting securities of the Company, (iii) any inquiry, proposal or offer to acquire in any manner, directly or indirectly, assets of the Company or its subsidiaries representing more than 20% of the consolidated assets of the Company, in each case, other than the transactions contemplated by the merger agreement, or (iv) any inquiry, proposal or offer in relation to any tender offer (including a self-tender offer) or exchange offer that, if consummated, would result in such third party’s beneficially owning 20% or more of any class of equity or voting securities of the Company or any of its subsidiaries whose assets, individually or in the aggregate, constitute more than 20% of the consolidated assets of the Company.

 

Nothing described above limits our ability to take actions to comply with our disclosure obligations under Rules 14d-9 and 14e-2 of the Exchange Act with regard to a takeover proposal or to make such disclosure the our shareholders as, in the good faith judgment of the Board, after receiving advice from outside counsel, is required under applicable law.

 

Regulatory and Antitrust Approvals

 

We and Thomas & Betts have agreed to use our commercially reasonable efforts to take, or cause to be taken, all actions necessary, proper or advisable to complete the merger, including:

 

 

In addition, we and Thomas & Betts have each agreed to:

 

 

Access to Information; Confidentiality

 

During the period prior to the effective time of the merger, we will provide Thomas & Betts and its representatives such information as Thomas & Betts shall reasonably request with respect to the Company and our subsidiaries and our offices, properties, employees and books and records. The information will be held in confidence to the extent required by the provisions of the confidentiality agreement between the Company and Thomas & Betts.

 

Meeting of Our Shareholders

 

We have agreed to promptly call and hold a meeting of our shareholders for the purpose of voting on the proposal to adopt the merger agreement, which meeting is the subject of this proxy statement. We have also agreed to recommend to our shareholders that the merger agreement be adopted and to solicit proxies from our shareholders entitled to vote on the adoption of the merger agreement.

 

Indemnification and Insurance

 

Under the merger agreement, Thomas & Betts has agreed, for a period of six years after the effective time of the merger, to cause the surviving company in the merger to indemnify and hold harmless each current and former director and officer Lamson and its subsidiaries from liability and expenses for matters arising at or prior to the completion of the merger to the fullest extent provided by applicable Ohio law and Lamson’s organizational documents, and to the same extent that they would have been indemnified as a Lamson director or officer under indemnification agreements they may have had with Lamson. Thomas & Betts also has agreed that for six years after the effective time of the merger, to maintain directors’ and officers’ liability insurance coverage for the benefit of the officers and directors of Lamson that is at least as favorable to the insureds as the policy maintained by Lamson immediately prior to the effectiveness of the merger, subject to certain limitations on the amount of premiums required to be paid for such insurance coverage.

 

Employee Benefit Matters

 

For a period of one year following completion of the merger, Thomas & Betts has agreed to maintain employee benefit plans that provide employee benefits which are not less favorable, in the aggregate, to the benefits provided under Lamson’s employee benefit plans, other than equity-based compensation plans or arrangements.

 

Thomas & Betts has further agreed that with respect to any Thomas & Betts benefit plan in which an employee of Lamson first becomes eligible to participate on or after the effective time of the merger, it will (i) waive all pre-existing conditions, exclusions and waiting periods with respect to participation and coverage requirements applicable to such employee and his or her dependents, except to the extent such pre-existing conditions, exclusions or waiting periods applied immediately before the effective time of the merger under the analogous Lamson benefit plan, (ii) provide such employee and his or her dependents with credit for any co-payments and deductions paid before becoming eligible to participate in the Thomas & Betts benefit plan under the analogous Lamson benefit plan, and (iii) recognize all service of such employee with Lamson and its subsidiaries that was recognized by

Lamson prior to the effective time of the merger for purposes of eligibility and vesting under any analogous Thomas & Betts benefit plans.

 

Additional Agreements

 

The merger agreement contains additional agreements between us and Thomas & Betts relating to, among other things:

 

 

Conditions of the Merger

 

The obligation of each party to effect the merger is subject to the satisfaction or waiver on or before the closing date of the following conditions:

 

 

The obligation of Thomas & Betts to effect the merger is also subject to the satisfaction or waiver of the following conditions:

 

 

The obligation of Lamson to effect the merger is also subject to the satisfaction or waiver of the following conditions:

 

 

We and Thomas & Betts can provide no assurance that all of the conditions precedent to the merger will be satisfied or waived by the party permitted to do so.

 

Termination

 

We and Thomas & Betts may mutually agree in writing, at any time before the effective time of the merger, to terminate the merger agreement. Also, either party may terminate the merger agreement, without the consent of the other, before the effective time of the merger if:

 

 

Thomas & Betts can terminate the merger agreement before the effective time of the merger if:

 

 

Lamson can terminate the merger agreement before the effective time of the merger if:

 

 

Termination Fees

 

Lamson

 

Lamson must pay Thomas & Betts a $15 million termination fee (less any Thomas & Betts transaction expenses, as described below under “— Lamson Reimbursement of Thomas & Betts’ Transaction Expenses,” previously paid by Lamson) if the merger agreement is terminated:

 

 

Thomas & Betts

 

Thomas & Betts must pay Lamson a $4 million termination fee if the merger agreement is terminated by either party because the merger has not been consummated by the outside date or because any transaction restraint arising under applicable antitrust laws prohibits the merger and at the time of such termination: all conditions to the closing of the merger have been satisfied or waived or are then capable of being satisfied other than (i) the expiration or termination of the waiting period applicable to the consummation of the merger under the HSR Act, (ii) the absence of a transaction restraint arising under applicable antitrust laws or (iii) the absence of any antitrust impediment, and at the time of the termination Lamson is not in material breach of any of its representations, warranties, covenants or other agreements contained in the merger agreement.

 

Lamson Reimbursement of Thomas & Betts’ Transaction Expenses

 

If the merger agreement is, or could be, terminated by Thomas & Betts or the Company because the merger agreement is not adopted by Company shareholders at the special meeting or any adjournment thereof, under circumstances in which the termination fee payable by the Company for such failure is not then payable, then the Company is obligated to pay to Thomas & Betts, following receipt of an invoice therefor, all of Thomas & Betts’ and T&B Acquisition II Corp.’s actual and reasonably documented out-of-pocket fees and expenses (including reasonable legal fees and expenses) incurred by them and their respective affiliates on or prior to the termination of the merger agreement in connection with the transactions contemplated by the merger agreement, which fees and expenses are referred to as the Thomas & Betts transaction expenses and shall not be greater than $5 million; provided, that the existence of circumstances which could require the termination fee payable by the Company subsequently to become payable as provided in the merger agreement shall not relieve the Company of its obligations to pay the Thomas & Betts transaction expenses; and provided, further, that the Company’s payment of Thomas & Betts transaction expenses shall not relieve the Company of any subsequent obligation to pay such termination fee in accordance with the merger agreement.

 

Effect of Termination

 

If the merger agreement is terminated by either Lamson or Thomas & Betts in accordance with its terms, the merger agreement will immediately become void and have no effect, without any liability or obligation on the part of Lamson, Thomas & Betts or T&B Acquisition II Corp., other than certain provisions relating to publicity, the payment of fees and expenses and certain other general provisions which would survive the termination. However, no party will be relieved from any liability for any fraud or willful material breach of the merger agreement.

 

Amendment

 

The merger agreement may be amended by the parties at any time by an instrument in writing signed on behalf of each of the parties. However, after the adoption of the merger agreement at the special meeting there will be no amendment made that would require further shareholder approval without the further approval of the Company’s shareholders.

 

Extension; Waiver

 

At any time before the effective time of the merger, any party may extend the time for the performance of any of the obligations or acts of the other party, waive any inaccuracies in any representations or warranties or waive compliance with any of the covenants or conditions contained in the merger agreement. Any agreement on the part of either party to any such extension or waiver shall be valid only if in a written instrument signed on behalf of such party.

 

MARKET PRICE OF LAMSON COMMON SHARES

 

Lamson common shares are listed for trading on the NYSE under the Symbol “LMS.” The following table sets forth, for the fiscal quarters indicated, the high and low sales prices per share as reported on the NYSE composite tape. No dividends were declared on the Lamson common shares during the period covered by the table.

 

 

The closing price of the Lamson common shares on the NYSE on August 15, 2007, the trading day prior to the announcement of the merger, was $19.64 per share. On September 17, 2007, the most recent practicable date before this proxy statement was printed, the closing price for the Lamson common shares on the NYSE was $26.73 per share.

 

LAMSON COMMON SHARE OWNERSHIP BY CERTAIN BENEFICIAL OWNERS

 

The following table sets forth as of September 17, 2007 (except as otherwise noted), the beneficial ownership of Lamson common shares by persons (including any “group” as defined in Section 13(d)(3) of the Exchange Act), known to Lamson to be beneficial owners of more than five percent of outstanding Lamson common shares, other than our directors or officers. This information is based on reports filed with the SEC by each of the individuals or firms listed in the table below. If you wish, you may obtain these reports from the SEC by visiting the SEC’s website at www.sec.gov. The number of Lamson common shares outstanding on September 17, 2007 was 15,849,285.

 

 

 

 

 

LAMSON COMMON SHARE OWNERSHIP BY MANAGEMENT AND DIRECTORS

 

The following table sets forth, as of September 15, 2007, the beneficial ownership of Lamson common shares by each director and each of our five most highly-compensated executive officers, and the percent of cumulative beneficial ownership of all such directors and executive officers as a group.

 

 

 

 

ADDITIONAL INFORMATION

 

We file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy this information at the SEC’s Public Reference Room at 100 F Street N.E., Washington, D.C. 20549.