Add
LAWS to Portfolio
Set Alert
Email to a
Friend
| |||
|
|
Quotes & Info
|
| LAWS > SEC Filings for LAWS > Form 8-K on 19-Feb-2009 | All Recent SEC Filings |
19-Feb-2009
Change in Directors or Principal Officers
Amendment to Long-Term Capital Accumulation Plan
On February 12, 2009, the Compensation Committee of the Board of Directors (the
"Committee") of Lawson Products, Inc. (the "Company") approved an amendment to
the Lawson Products, Inc. Long-Term Capital Accumulation Plan (the "LTCAP").
Effective as of February 12, 2009, the LTCAP was amended to:
• provide for the establishment of the LTCAP incentive award pool on the basis
of the financial and valuation materials presented to the Committee at its
October 2008 meeting as if it applied as of December 31, 2008;
• reduce the total value of the LTCAP incentive award pool by the amount of prior payments made to executives in connection with their awards, such amount totaling $885,000;
• make available for award those Shareholder Value Appreciation Rights or "SVARs" awarded to participants who are no longer employed by the Company, whether or not the SVARs of such participants vested upon the applicable termination of employment; and
• provide for immediate vesting of any SVARs awarded after December 31, 2008.
In addition, the Committee adopted a form of Amended and Restated Award
Agreement to memorialize SVAR award decisions previously approved by the
Committee and authorized the Company to enter into Amended and Restated Award
Agreements with the following executive officers of the Company providing for
the following SVARs: Thomas J. Neri, 326; Neil E. Jenkins, 221; and Stewart
Howley, 60. These awards implemented the allocation of the LTCAP incentive award
pool previously approved by the Committee and described in the Company's proxy
statement dated April 21, 2008.
The foregoing descriptions of the amendment to the LTCAP and of the form of
Amended and Restated Award Agreement do not purport to be complete and are
qualified in their entirety by reference to Amendment No. 1 to Lawson Products,
Inc. Long-Term Capital Accumulation Plan and to the form of Amended and Restated
Award Agreement, copies of which are attached to this Current Report on Form 8-K
as Exhibit 10.1 and Exhibit 10.2, respectively, and incorporated herein by
reference.
Employment Agreements
On February 12, 2009, the Company entered into amended and restated employment
agreements with Thomas J. Neri, the Company's President and Chief Executive
Officer and Neil E. Jenkins, the Company's Executive Vice President, General
Counsel and Secretary. Mr. Neri's agreement amends and restates his employment
agreement dated as of April 16, 2007, and Mr. Jenkins' agreement amends and
restates his employment agreement dated as of October 1, 2007. Messrs. Neri and
Jenkins are each referred to herein as an "Officer" and collectively as
"Officers."
Each of the amended and restated employment agreements provides for a term of
employment of three years that automatically renews from year to year, unless
either the Company or the Officer provides six months' written notice of
non-renewal prior to the expiration of the initial or extended term. Mr. Neri's
employment agreement provides that he will receive an annual base salary of
$500,000. Mr. Jenkins' employment agreement provides that he will receive an
annual base salary of $365,000. The annual base salaries may be increased or
decreased by the Committee at any time, except that Mr. Neri's base salary may
not be decreased to less than $450,000 and Mr. Jenkins' base salary may not be
decreased to less than $325,000.
The employment agreements provide that the Officers will be eligible for
discretionary annual incentive bonuses, based upon the Officer's ability to meet
or exceed targeted expectations applicable to his position, as determined in the
sole discretion of the Committee. The Officers are also eligible to continue
their participation in the LTCAP. In addition, the Officers are eligible for
various equity-based compensation awards, including stock options, restricted
stock and stock award grants, as determined in the sole discretion of the
Committee, except that such grants and awards to Mr. Neri shall be on a basis no
less favorable than the grants and awards made to other senior executives. The
Officers shall also receive the Company's standard benefit package, including
coverage under the Company's
group health, long-term disability insurance, group term life insurance,
accidental death insurance, 401(k), and the Company's Executive Deferral Plan.
The Company may terminate either Officer's employment with or without "cause" or
an Officer may terminate his employment for, among other things, "good reason".
If the Company terminates an Officer without "cause," or an Officer terminates
his employment for "good reason," then the Company shall pay such Officer all
accrued compensation; an amount equal to 100% of such Officer's then current
base salary for the period of two years or the remainder of the initial or
extended term of employment, whichever is greater; a pro rata bonus (equal to
such Officer's most recent annual bonus multiplied by the days from the
beginning of the calendar year divided by 365 (the "pro rata bonus")); and
extended coverage for such Officer, his spouse and dependents under the
Company's health benefit plans for an additional two years following
termination. If the Company terminates an Officer with "cause" or an Officer
terminates his employment voluntarily, other than for "good reason," the Company
has no obligations, except that it shall pay any accrued base salary and unused
vacation and any additional payments due under the terms of the Company's
benefit plans.
The term "cause" includes the following: (i) any violation by the Officer of any
agreement between the Officer and the Company or any law relating to
non-competition, trade secrets, inventions, non-solicitation or confidentiality;
(ii) any material breach or default of any of the Officer's duties or other
obligations or covenants under his employment agreement; (iii) gross negligence,
dishonesty or willful misconduct; (iv) any act or omission which has a material
adverse effect on the Company's business, reputation, goodwill or customer
relations; (v) any conviction of or pleading nolo contendere to a crime;
(vi) any act or omission which, at the time it occurs, is in material violation
of any Company policy, such as they now exist or hereafter are supplemented,
amended, modified or restated; or (vii) an act of fraud or embezzlement or
misappropriation of property. An Officer shall not be deemed to have been
terminated for "cause" unless and until the Company delivers to the Officer a
copy of the resolutions of the Board of Directors of the Company (the "Board")
finding that the termination of the Officer was for "cause."
The term "good reason" includes the following: (i) with respect to Mr. Neri, a
decrease in Mr. Neri's base salary to less than $450,000 or with respect to
Mr. Jenkins, a decrease in Mr. Jenkins' base salary to less than $325,000;
(ii) a material diminution in the Officer's authority, duties or
responsibilities; (iii) a material change (with such change not to be less than
50 miles) in the geographic location at which the Officer must perform the
Officer's services; or (iv) any other action or inaction that constitutes a
material breach by the Company of the employment agreement with such Officer. An
Officer is only entitled to terminate his employment for "good reason" if:
(w) one or more of the conditions constituting "good reason" occurs without the
Officer's written consent: (x) the Officer provides notice to the Company of the
existence of a condition constituting "good reason" within 90 days of the
initial occurrence of such condition; (y) the Company fails to remedy such
condition constituting "good reason" within 30 days of being provided notice of
such condition by the Officer; and (z) the Officer voluntarily terminates his
employment within six months of the initial occurrence of such condition
constituting "good reason".
If within 12 months following a "change in control", the Company terminates an
Officer's employment without "cause" or if an Officer terminates his employment
for "good reason," the Officer shall be entitled to all accrued compensation and
to a lump sum payment equal to two times the Officer's then current annual base
salary and two times the most recent annual bonus; in addition, all previously
unvested options and rights granted to the Officer shall immediately vest and
become fully exercisable as of the date of termination for a period of 90 days,
and the Officer, his spouse and dependents shall be covered under the Company's
health benefit plans for two years following termination. A "change in control"
is deemed to have occurred if (i) any person or group, other than Ronald B. Port
and Roberta Washlow or their spouses, children, heirs, assigns or affiliates,
becomes the beneficial owner of the voting power of the outstanding voting
securities of the Company that exceeds the voting power of the Port group at
that time; (ii) there is a merger, consolidation or reorganization (subject to
exceptions as defined in the agreements); (iii) there is a sale or other
disposition of substantially all of the assets of the Company (subject to
exceptions as defined in the agreements); and (iv) current Board members cease,
for any reason, to constitute at least a majority of the Board (subject to
exceptions as defined in the agreements).
Each Officer's employment agreement shall terminate upon the death of the
Officer and in such event, the Officer shall receive any accrued compensation;
an amount equal to two times the Officer's then current annual base salary (and
for Mr. Neri, an additional pro rata bonus payment); and the Officer's spouse
and dependents shall be entitled to coverage under the Company's health benefit
plans for an additional two years following termination.
The Company may terminate an Officer's employment agreement if the Officer
becomes "disabled" (as such term is defined under the Company's long term
disability insurance policy). Upon a termination due to a "disability," the
Company shall pay the Officer any accrued compensation and (i) in the case of
Mr. Neri shall continue his compensation at a rate equal to 100% of his then
current salary for twelve months and at a rate equal to 60% of his then current
salary for twenty-four months thereafter and (ii) in the case of Mr. Jenkins
shall continue his compensation at a rate equal to 100% of his then current
salary for six months and at a rate equal to 60% of his then current salary for
thirty months thereafter. In each such case the Company shall be entitled to
take a credit against the payments equal to the long-term disability insurance
benefits during the same 36-month period. The Officer, his spouse and dependents
shall also be covered under the Company's health benefit plan at active employee
rates for five and one-half years following termination.
If the Company terminates an Officer's employment by providing notice that it
will not renew the employment agreement on or after the second anniversary of
the effective date of the agreement, then the Company shall pay the Officer his
base salary for one year after termination and the Officer, his spouse and
dependents shall be entitled to coverage under the Company's health benefit
plans for an additional year following termination.
Each Officer may terminate his employment with the Company upon 60 days' prior
written notice. Pursuant to the terms of the employment agreements, each Officer
has agreed not to compete with the Company during the period of employment and
for a period of two years thereafter. The employment agreements also contain
provisions related to return of Company property, non-disclosure of Company
confidential information and other restrictive covenants related to
non-solicitation of Company employees, agents and customers.
The foregoing description of the amended and restated employment agreements is a
summary of the material terms of the agreements and does not purport to be
complete and is qualified in its entirety by reference to the agreements, copies
of which are attached to this Current Report on Form 8-K as Exhibit 10.3 and
Exhibit 10.4, each of which is incorporated herein by reference.
Change in Control Agreements
On February 12, 2009, the Company entered into change in control agreements with
each of Harry Dochelli and Stewart Howley. Mr. Dochelli and Mr. Howley are each
referred to herein as an "Executive" and together as "Executives."
The Executives' change in control agreements have a term of employment of one
year that automatically renews from year to year, unless either the Company or
the Executive provides 30 days written notice of non-renewal prior to the
expiration of the initial or extended term. However, if a "change in control"
has occurred on or prior to the date the change in control agreement would
otherwise terminate, the term shall automatically be extended until the one-year
anniversary of the "change in control." A "change in control" is deemed to have
occurred if (i) any person or group, other than Ronald B. Port and Roberta
Washlow or their spouses, children, heirs, assigns or affiliates, becomes the
beneficial owner of the voting power of the outstanding voting securities of the
Company that exceeds the voting power of the Port group at that time; (ii) there
is a merger, consolidation or reorganization (subject to exceptions as defined
in the agreements); (iii) there is a sale or other disposition of substantially
all of the assets of the Company (subject to exceptions as defined in the
agreements); and (iv) current Board members cease, for any reason, to constitute
at least a majority of the Board (subject to exceptions as defined in the
agreements).
If within one year following a "change in control", the Company terminates an
Executive's employment without "cause" or if an Executive terminates his or her
employment for "good reason", the Executive shall be entitled to all accrued
compensation and to a lump sum payment equal to one and one-half times the
Executive's then current annual base salary and one times the Executive's most
recent annual bonus; in addition, all previously unvested options and rights
granted to the Executive shall immediately vest and become fully exercisable as
of the date of termination for a period of 90 days, and the Executive, his or
her spouse and dependents shall be covered under the Company's health benefit
plans for 12 months following termination. The term "cause" includes the
following: (i) any violation by the Executive of any agreement between the
Executive and the Company or any law relating to non-competition, trade secrets,
inventions, non-solicitation or confidentiality; (ii) any material breach or
default of any of the Executive's duties or other obligations or covenants under
his employment agreement; (iii) gross
negligence, dishonesty or willful misconduct; (iv) any act or omission which has
a material adverse effect on the Company's business, reputation, goodwill or
customer relations; (v) any conviction of or pleading nolo contendere to a
crime; (vi) any act or omission which, at the time it occurs, is in material
violation of any Company policy, such as they now exist or hereafter are
supplemented, amended, modified or restated; or (vii) an act of fraud or
embezzlement or misappropriation of property.
The term "good reason" includes the following: (i) a material diminution in the
Executive's base compensation; (ii) a material diminution in the Executive's
authority, duties or responsibilities; or (iii) any other action or inaction
that constitutes a material breach by the Company of the change in control
agreement with such Executive. An Executive is only entitled to terminate his or
her employment for "good reason" if: (w) one or more of the conditions
constituting "good reason" occurs without the Executive's written consent:
(x) the Executive provides notice to the Company of the existence of a condition
constituting "good reason" within 90 days of the initial occurrence of such
condition; (y) the Company fails to remedy such condition constituting "good
reason" within 30 days of being provided notice of such condition by the
Executive; and (z) the Executive voluntarily terminates his or her employment
within six months of the initial occurrence of such condition constituting "good
reason".
If the Company terminates an Executive with "cause" or the Executive terminates
his or her employment for any reason not constituting "good reason", the Company
has no obligations, except that it shall pay any accrued compensation.
Pursuant to the terms of the change in control agreement, each Executive has
agreed not to compete with the Company during the Executive's period of
employment and for a period of eighteen months thereafter. The change in control
agreements also contain provisions related to return of Company property,
non-disclosure of Company confidential information and other restrictive
covenants related to non-solicitation of Company employees, agents and
customers.
The foregoing description of the change in control agreements is a summary of
the material terms of the agreements and does not purport to be complete, and is
qualified in its entirety by reference to the agreements, copies of which are
attached to this Current Report on Form 8-K as Exhibit 10.5 and Exhibit 10.6,
each of which is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
10.1 Amendment No. 1 to Lawson Products, Inc. Long-Term Capital Accumulation Plan.
10.2 Form of Amended and Restated Award Agreement.
10.3 Amended and Restated Employment Agreement dated as of February 12, 2009 by and between the Company and Thomas Neri.
10.4 Amended and Restated Employment Agreement dated as of February 12, 2009 by and between the Company and Neil E. Jenkins.
10.5 Change in Control Agreement dated as of February 12, 2009 by and between the Company and Harry Dochelli.
10.6 Change in Control Agreement dated as of February 12, 2009 by and between the Company and Stewart Howley.
|
|