The Lamson & Sessions Co. 10-K for FYE Jan 1 2000

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AzLxkVHxsmYst1+a8f5fw7uf7GHja8VeVCasOyWuy1lqTia+vDnKxCFVx1FF53Pw bTg57kD3vil+WGWPZ7NJZQ== 0000950152-00-001476.txt : 20000307 0000950152-00-001476.hdr.sgml : 20000307 ACCESSION NUMBER: 0000950152-00-001476 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 14 CONFORMED PERIOD OF REPORT: 20000101 FILED AS OF DATE: 20000306 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LAMSON & SESSIONS CO CENTRAL INDEX KEY: 0000057497 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC LIGHTING & WIRING EQUIPMENT [3640] IRS NUMBER: 340349210 STATE OF INCORPORATION: OH FISCAL YEAR END: 0101 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 001-00313 FILM NUMBER: 561689 BUSINESS ADDRESS: STREET 1: 25701 SCIENCE PARK DR CITY: CLEVELAND STATE: OH ZIP: 44122-7313 BUSINESS PHONE: 2164643400 MAIL ADDRESS: STREET 1: 25701 SCIENCE PARK DR CITY: CLEVELAND STATE: OH ZIP: 44122 10-K 1 LAMSON & SESSIONS 10-K The Lamson & Sessions Co. 10-K for FYE Jan 1 2000

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

F O R M 10-K


[X]	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]












	For the fiscal year ended January 1, 2000	Commission File Number 1-313












[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

T H E L A M S O N & S E S S I O N S C O.

(Exact name of Registrant as specified in its charter)


Ohio		34-0349210

(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)




25701 Science Park Drive Cleveland, Ohio		44122-7313

(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: 216/464-3400

Securities registered pursuant to Section 12(b) of the Act:


Title of each class		Name of each exchange on which registered

Common Shares, without par value		New York Stock Exchange Pacific Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

The aggregate market value of the voting stock held as of February 10, 2000 by non-affiliates of the Registrant: $76,981,064.

As of February 10, 2000 the Registrant had outstanding 13,453,251 common shares.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Proxy Statement for the 2000 Annual Meeting of Shareholders are incorporated by reference into Part III.

PART I

Item 1. — Business

The Lamson & Sessions Co., an Ohio corporation, (the “Company” or “Lamson & Sessions”), founded in 1866, is a diversified manufacturer and distributor of a broad line of thermoplastic electrical, consumer, telecommunications and fluid drainage products for major domestic markets. The markets for thermoplastic electrical conduit, related fittings and accessories, wiring devices and sewer pipe include: the construction, utility and telecommunications industries, municipalities, other government agencies, and contractors; and Do-It-Yourself (DIY) home remodelers.

Principal Products and Markets

The Company is engaged in the manufacture and distribution of a broad line of thermoplastic electrical, telecommunication and engineered sewer products. In addition, the Company distributes a wide variety of consumer electrical wiring devices, home security devices, wireless electrical and other wireless products.

All of the Company’s thermoplastic electrical products compete with and serve as substitutes for similar metallic products. The Company’s engineered sewer pipe products compete with and serve as substitutes for clay, concrete, ductile iron, asbestos cement and polyethylene products. The Company’s thermoplastic electrical products offer several advantages over these other products. Specifically, nonmetallic electrical conduit and related fittings and accessories are generally less expensive, lighter and easier to install than metallic products. Furthermore, thermoplastic electrical conduit does not rust, corrode or conduct electricity. Thermoplastic sewer pipe weighs less than alternative products, is easier and more economical to install, does not degenerate due to chemical attack as do some competing products, and eliminates avoidable problems which can be caused by infiltration and exfiltration.

Three markets are served, each of which has unique product and marketing requirements. These markets are:

Carlon — Industrial, Residential, Commercial, Telecommunications and Utility Construction: The major customers served are electrical contractors and distributors, original equipment manufacturers, electric power utilities, cable television (CATV), telephone and telecommunications companies. The principal products sold by this segment include electrical and wire raceway systems and a broad line of nonmetallic enclosures, outlet boxes and electrical fittings. Examples of the applications for the products included in this segment are multi-cell duct systems designed to protect underground fiber optic cables allowing future cabling expansion and flexible conduit used inside buildings to protect communications cable.

Lamson Home Products — Consumer: The major customers served are home centers and mass merchandisers for the DIY home repair market. The products included in this segment are light dimmers, fan speed controls, touch controls, wireless door chimes, motion sensors and home security systems. In addition, this segment supplies its market with products such as outlet boxes, liquid tight conduit and electrical fittings.

PVC Pipe: This business segment supplies electrical, power and communications conduit to the electrical distribution, retail, power utility and telecommunications markets. In addition, it provides engineered sewer products to various municipalities and private contractors for drainage systems and sewer construction and rehabilitation. Principal products utilized by the waste water market include closed profile engineered sewer pipe for new sewer construction and existing sewer line rehabilitation. The products range in diameter from 4 inches to 54 inches for sewer products and 1/2 inch to 6 inches for electrical conduit.

A breakdown of revenues as a percent of net sales by major business segment for 1999, 1998 and 1997, is as follows:


(Dollars in thousands)	1999					1998				1997

Carlon	$	120,975	42	%	$	109,458	40	%	$	104,867	38	%




Lamson Home Products		53,401	18	%		50,348	19	%		50,819	19	%




PVC Pipe		117,005	40	%		111,108	41	%		116,094	43	%

	$	291,381	100	%	$	270,914	100	%	$	271,780	100	%

See discussion of segment products in Note J of financial statements.

Competition

Each of the three segments in which the Company presently operates is highly competitive based on service, price and quality. Most of the competitors are either national or smaller regional manufacturers who compete with limited product offerings. Unlike a majority of the Company’s competitors, the Company manufactures a broad line of thermoplastic products, complementary fittings and accessories. The Company believes that its products will continue to compete favorably. However, certain of the Company’s competitors have greater financial resources than the Company, which could adversely affect the Company through price competition strategies.

Distribution

The Company distributes its products through a nationwide network of more than 100 manufacturers’ representatives and a direct sales force of 42. Currently, three manufacturers’ representatives maintain an inventory of the Company’s products.

Raw Materials

The Company is a large purchaser of pipe grade polyvinyl chloride (“PVC”) resin. The Company has entered into resin supply contracts which should stabilize its availability for the next several years.

Patents and Trademarks

The Company owns various patents, patent applications, licenses, trademarks and trademark applications relating to its products and processes. While the Company considers that, in the aggregate, its patents, licenses and trademarks are of importance in the operation of its business, it does not consider that any individual patent, license or trademark, or any technically related group, is of such importance that termination would materially affect its business.

Seasonal Factors

Two of the Company’s three business segments experience moderate seasonality caused principally by a decrease in construction activity during the winter months. They are subject also to the economic cycles affecting the construction industry. The Company’s consumer products business unit is affected by consumer spending and consumer confidence.

Major Customers

Sales to Affiliated Distributors, a buying group within the Carlon and PVC Pipe segments not otherwise affiliated with the Company, totaled approximately 17% of net sales in 1999, 15% of net sales in 1998 and 13% of net sales in 1997.

Backlog

In the Company’s three business segments, the order to delivery cycle ranges from several days to a few weeks. Therefore, the measurement of backlog is not a significant factor in the evaluation of the Company’s prospects.

Research and Development

The Company is engaged in an aggressive product development program in an effort to introduce innovative applications for thermoplastic and wireless electrical products. The Company maintains a separate product development center in Cleveland, Ohio to facilitate this effort and improve manufacturing processes. The Company sponsored research and development activity totaled $3.8 million, $3.7 million and $4.6 million in 1999, 1998 and 1997, respectively.

Environmental Regulations

The Company believes that its current operations and its use of property, plant and equipment conform in all material respects to applicable environmental laws and regulations presently in effect. The Company has facilities at numerous geographic locations, which are subject to a range of federal, state and local environmental laws and regulations. Compliance with these laws has, and will, require expenditures on a continuing basis.

Associates

At January 1, 2000, the Company had 963 associates, 762 of whom were employed at the Company’s manufacturing facilities and distribution centers. The remainder of associates were primarily employed at the Company’s corporate headquarters and product development facilities.

Foreign Operations

The net sales, operating earnings and assets employed outside the United States are not significant. Export sales were approximately 2% of net sales in 1999, 1% of net sales in 1998 and 2% in 1997, and were made principally to countries in North America.

Item 2. — Properties

The Company owns or leases manufacturing and distribution facilities, which are suitable and adequate for the production and marketing of its products. The Company owns executive and administrative offices, which are located in Cleveland, Ohio, and occupy 68,000 square feet in a suburban office complex. The Company also has research and development offices, located in Cleveland, Ohio, which occupy leased space of 27,000 square feet. The following is a list of the Company’s manufacturing and distribution center locations:


	Approximate
Manufacturing Facilities (Owned)	Square Feet
Woodland, California		66,000




High Springs, Florida		110,000




Clinton, Iowa		124,000




Bowling Green, Ohio		67,000




Oklahoma City, Oklahoma		172,000




Nazareth, Pennsylvania		59,000




Pasadena, Texas		48,000












Distribution Centers (Leased)




Columbia, South Carolina		350,000




Woodland, California		105,000

The Company operated the above manufacturing facilities at approximately 93% of their productive capacity in 1999.

Item 3. – Legal Proceedings

On September 23, 1999, the Company announced that a United States District Court jury in the Northern District of Illinois found that the Company willfully infringed on a patent held by Intermatic Incorporated of Spring Grove, Illinois, relating to the design of an in-use weatherproof electrical outlet cover, and awarded Intermatic $12.5 million in damages plus pre-judgment interest of approximately $1.5 million. The court declined to increase the damages with respect to the willfulness finding. The Company is pursuing a vigorous appeal and believes it has meritorious positions that will substantially reduce or eliminate the jury award. If, however, the appeal process is not successful, the final resolution of the matter could have a material adverse affect on the Company’s financial position, cash flows and results of operations. It is the Company’s understanding that the appeal process may require a one-to-two year period.

In addition, during the second quarter of 1999, the Company reached a settlement on litigation involving environmental matters at a property sold by the Company in 1981 whereby the Company agreed to incur costs of certain remediation activities. The settlement did not have a material impact on the Company’s financial position or results of operations.

The Company has filed suit to recover damages related to the termination of the agreement to sell its PVC Pipe business. It is premature to estimate the timing for a resolution of this suit.

The Company is also a party to various other claims and matters of litigation incidental to the normal course of its business. Management believes that the final resolution of these matters will not have a material adverse affect on the Company’s financial position, cash flows and results of operations.

Item 4. – Submission of Matters to Security Holders

None.

EXECUTIVE OFFICERS OF THE REGISTRANT

JOHN B. SCHULZE

Chairman, President and Chief Executive Officer

Chairman, President and Chief Executive Officer since January 1990. Age 62.

JAMES J. ABEL

Executive Vice President, Secretary, Treasurer and Chief Financial Officer

Executive Vice President, Secretary, Treasurer and Chief Financial Officer since September 1994. Previously was Executive Vice President, Treasurer and Chief Financial Officer February 1993 — September 1994. Age 54.

CHARLES E. ALLEN

Senior Vice President

Senior Vice President since September 1989. Age 59.

ALBERT J. CATANI, II

Vice President — Manufacturing

Vice President, Manufacturing since August 1995. Previously was Independent Consultant, Environmental Growth Chambers, March 1995 — August 1995. Previously was Vice President, Operations, Universal Electronics, Inc., April 1993 — March 1995. Age 52.

DONALD A. GUTIERREZ

Vice President — Carlon

Vice President, Carlon since March 1998. Previously was Vice President, Carlon Electrical Products since July 1997. Previously was National Sales Manager since January 1997. Previously was Manager, Distributor Sales August 1996 - January 1997. Previously was in Marketing and Sales with General Electric 1979 - - August 1996. Age 42.

CHARLES W. HENNON

Vice President and Chief Information Officer

Vice President and Chief Information Officer since April 1998. Previously was Manager, Business Support Services with Ferro Corporation 1993 — April 1998. Age 54.

MELVIN W. JOHNSON

Vice President

Vice President since February 1991. Age 63.

ROBERT J. MOYER

Vice President — Supply Chain Management

Vice President, Supply Chain Management since July 1997. Previously was Vice President, Distribution since April 1997. Previously was Vice President, Supply Chain Management, Little Tikes Co., 1994 — April 1997. Age 46.

LORI L. SPENCER

Vice President and Controller

Vice President and Controller since August 1997. Previously was Vice President, Strategic Planning since February 1997. Previously was Director, Financial Planning & Internal Audit, September 1994 — February 1997. Age 41.

NORMAN P. SUTTERER

Vice President — Lamson Home Products

Vice President — Lamson Home Products since March 1998. Previously was Vice President, Carlon Telecom Systems since January 1994. Age 50.

PART II

Item 5. – Market for the Registrant’s Common Stock and Related Security Holder Matters

The Company’s Common Stock is traded on the New York Stock Exchange and the Pacific Stock Exchange. High and low sales prices for the common stock are included in Note L to the Consolidated Financial Statements. No dividends were paid in 1999, 1998 or 1997. The approximate number of shareholders of record of the Company’s Common Stock at February 10, 2000 was 1,558.

Item 6. – Selected Financial Data

FIVE-YEAR FINANCIAL SUMMARY


		Fiscal Years Ended

(Dollars in thousands except per share data,
shareholders, associates and percentages)		1999						1998		1997				1996			1995

Operations:




	Net sales		$		291,381		$	270,914			$	271,780		$	289,052		$	299,166




	Cost of products sold				229,981			214,410				221,898			223,778			238,908




	GROSS PROFIT				61,400			56,504				49,882			65,274			60,258




	Operating expenses				48,054			47,584				52,377			53,135			46,220




	OPERATING INCOME (LOSS)				13,346			8,920				(2,495	)		12,139			14,038




	Interest				3,558			4,341				3,768			2,611			5,864




	INCOME (LOSS) BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF ACCOUNTING CHANGE				9,788			4,579				(6,263	)		9,528			8,174




	Income tax (benefit)				(9,000	)		(2,100	)			(1,550	)		(4,100	)		(3,900	)




	INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE				18,788			6,679				(4,713	)		13,628			12,074




	Cumulative effect of accounting change											(4,940	)




	NET INCOME (LOSS)				18,788			6,679				(9,653	)		13,628			12,074

Year-End Financial Position:




	Current Assets			$	94,704		$	83,975			$	91,567		$	90,945		$	80,244




	Other Assets				40,522			25,957				21,079			9,703			2,680




	Property, Plant and Equipment				48,093			50,735				56,329			60,473			51,747




	Total Assets				183,319			160,667				168,975			161,121			134,671




	Current Liabilities				56,223			47,278				57,580			51,906			49,584




	Long-Term Debt				36,919			40,807				44,712			36,911			24,842




	Other Long-Term Liabilities				26,808			28,451				29,702			27,517			29,326




	Shareholders’ Equity				63,369			44,131				36,981			44,787			30,919




	Working Capital				38,481			36,697				33,987			39,039			30,660

Statistical Information:




	Average number of dilutive common shares outstanding				13,482			13,488				13,349			13,641			13,404




	Number of shareholders of record				1,558			1,687				1,832			1,987			2,162




	Number of associates				963			983				1,044			1,164			1,048




	Book value per share			$	4.70		$	3.27			$	2.77		$	3.28		$	2.33




	Market price per share			$	4.88		$	5.13			$	5.81		$	7.25		$	7.75




	Market capitalization			$	65,584		$	68,903			$	77,970		$	96,433		$	103,011




	Gross margin as a % of net sales				21.1	%		20.9	%			18.4	%		22.6	%		20.1	%




	Operating expenses as a % of net sales				16.5	%		17.6	%			19.3	%		18.4	%		15.4	%




	Operating margin as a % of net sales				4.6	%		3.3	%			(0.9	%)		4.2	%		4.7	%




	Operating cash flow as a % of total debt				29.9	%		19.5	%			6.2	%		21.3	%		66.6	%




	Long-term debt as a % of equity				58.3	%		92.5	%			120.9	%		82.4	%		80.3	%




	Return on average equity from operations				35.0	%		16.5	%			(11.5	%)		36.0	%		55.1	%

Basic Earnings (Loss) Per Common Share:




	Earnings (loss) before change in accounting principle			$	1.40		$	0.50			$	(0.35	)	$	1.02		$	0.91




	Cumulative effect of accounting change										$	(0.37	)




	Net earnings (loss)			$	1.40		$	0.50			$	(0.72	)	$	1.02		$	0.91




Diluted Earnings (Loss) Per Common Share:




	Earnings (loss) before change in accounting principle			$	1.39		$	0.50			$	(0.35	)	$	1.00		$	0.90




	Cumulative effect of accounting change										$	(0.37	)




	Net earnings (loss)			$	1.39		$	0.50			$	(0.72	)	$	1.00		$	0.90

Item 7. – Management’s Discussion and Analysis of Financial Condition and
Results of Operations

Discussion of the Consolidated Statements of Operations

The Consolidated Statements of Operations present Lamson & Sessions’ operating performance over the last three years.

Net Sales increased in 1999 by 7.6% to $291 million. The largest increases came in the Carlon business unit, which expanded sales by 10.5%, or $11.5 million. The segment has continued to gain market acceptance of its engineered cable management products used in telecommunications network construction both for inside premise and outside plant applications. Strong construction markets and improved customer service led to solid growth across the board in electrical products. Lamson Home Products grew net sales by 6.1%, or $3.1 million, in 1999 compared with 1998. Continued strong growth in the home improvement market drove improved sales volume in electrical fittings, outlet boxes and liquidtight tubing. This segment was negatively impacted by the Hechinger’s bankruptcy as well as the elimination of unprofitable wiring device products. Finally, the PVC Pipe business increased sales by 5.3% with the electrical and telecommunication conduit growing by 8.1%, primarily from increased resin costs which we were able to pass on to our customers. This segment was negatively impacted by unexpected PVC resin shortages during the third quarter, which limited its supply of conduit to the electrical construction market. In addition, sales in large diameter sewer pipe declined by 5.7% due to increased competition and a softening in demand for rehabilitation pipe.

Net Sales of $271 million in 1998 were less than 1% lower than the $272 million reported in 1997. Overall volume in the commodity rigid pipe products was up 2%, but average selling prices decreased by 6% due to lower raw material costs that were passed on to customers. This sales decline was partially offset by an 8% increase in sales of priority products, especially large diameter sewer pipe, specialty extrusion, raceway systems and the enclosure and electrical fitting products lines. During 1998, the Company continued to eliminate many of its lower-margin products, primarily commodity sewer pipe and wiring devices. These product line reductions lowered sales by $4.8 million, or 1.8% compared with 1997.

Gross Margins were 21.1% in 1999, a slight improvement from 20.9% in 1998. The current year’s cost of products sold includes $2.1 million of costs for the consolidation of distribution operations. They consist primarily of associate relocation, training and start-up costs and asset dispositions. Better product mix, distribution and freight cost savings were partially offset by unfavorable volume variances caused by the raw material shortages experienced during the peak construction season.

Gross Margin increased 13.6% to 20.9% of net sales in 1998 compared with 18.4% in 1997. This improvement was a result of reduced raw material costs referred to above, increased utilization of the Company’s manufacturing plants, a shift in sales mix to higher-margin products and improved manufacturing and distribution cost controls. These improvements helped to offset $792,000 in a restructuring charge consisting primarily of a write-down of certain inventory to net realizable value. The charge, which is included in cost of products sold, was incurred during the fourth quarter of 1998 and related to the consolidation of the Company’s distribution operations, which was completed during the first half of 1999.

Operating Expenses in 1999 declined to 16.5% of net sales, 6.3% lower than the 17.6% in 1998. The Company continues to experience productivity improvements from its infrastructure investments in management information systems and associate training programs, which have resulted in lower staffing levels. With the exception of higher commissions expense due to increased sales, operating expenses actually declined by 1.3% from 1998.

Operating Expenses in 1998 decreased by 8.8% to 17.6% of net sales compared with 19.3% in 1997. The decline is attributable to more efficient administrative operations, elimination of excess costs from the Company’s 1997 implementation of new business processes and information technology and reduced pension costs. This was partially offset by costs of $700,000 incurred in support of the sale of the polyvinyl chloride (PVC) pipe business.

Interest Expense decreased 18% in 1999 to $3.6 million as a result of lower average debt levels and improved operating results, from $4.3 million in 1998. Despite increasing market interest rates in the second half of the year, the Company's average interest rate declined as its improved operating performance provided for lower net rates under its long-term secured credit agreement.

Interest Expense increased 15% to $4.3 million in 1998 from $3.8 million in 1997. This increase reflects the effect of operating losses incurred in the second half of 1997 through the first quarter of 1998, which resulted in higher average debt outstanding and borrowing rates in 1998.

Income Tax Benefit of $9 million was recognized by the Company in 1999 (compared with $2.1 million in 1998) from the reversal of a substantial portion of the deferred tax valuation allowance, due to continued improvement in operating performance and expectations about future years’ taxable income. Beginning in 2000, the Company expects to record a normalized tax provision.

An Income Tax Benefit of approximately $2.1 million in 1998 and $1.6 million in 1997 was generated from a reduction in the valuation allowance on the Company’s net deferred tax assets.

Discussion of the Consolidated Balance Sheets

The Consolidated Balance Sheets present the Company’s financial position at year-end, compared with the previous year-end. The statement provides information to assist in assessing such factors as the Company’s liquidity and financial resources. The 1999 current ratio declined slightly to 1.7 versus 1.8 in 1998 mainly due to higher accounts payable balances reflecting the higher raw material costs at the end of 1999. The total debt-to-equity ratio declined $3.9 million, or 8.7%, in 1999 while equity increased 43.6% to $63.3 million, the highest level since 1991.

Accounts Receivable are primarily due from trade customers. Accounts receivable increased approximately $5.6 million in 1999 from 1998, which is the result of the 20% increase in sales during the fourth quarter of 1999 as compared with the same period in 1998. Days sales outstanding are 47.5 for 1999 compared with 45.8 in 1998.

Inventories increased 8.7%, or $3.4 million, in 1999 from 1998. This change resulted primarily from increases in PVC resin costs during 1999 offset by continued SKU reduction and improved inventory planning and control. Average inventory turns increased to 4.7 times in 1999 compared with 4.4 times in 1998.

Pension Assets increased $3.7 million in 1999 from 1998. The Company contributed $2 million to fully fund all qualified pension plans and continued to experience favorable investment performance. It is expected in 2000 that no contributions will be required for these plans.

Accounts Payable increased by $8.2 million from 1998 which was caused by higher PVC resin costs and operating levels in the fourth quarter of 1999 compared with the same period in the prior year.

Long-Term Debt decreased by $3.9 million during 1999. Strong operating cash flow allowed the Company to pay down term and other debt without increases in the revolver.

Post-Retirement Benefits and Other Long-Term Liabilities declined by $1.6 million which primarily was due to the payment on a settlement on litigation involving environmental matters on a property previously sold by the Company (see Note D).

Discussion of the Consolidated Statements of Cash Flows

The Consolidated Statements of Cash Flows present the cash inflows and outflows from the Company’s operating, investing and financing activities. Cash and cash equivalents increased slightly at year-end 1999 compared with 1998.

Cash Flows From Operating Activities - The Company generated $13.9 million in cash from continuing operations in 1999, an increase of 60% over the 1998 cash flow from operations of $8.7 million. This increase in operating cash flow reflects improved earnings which resulted in $23.5 million ($18.9 million in 1998) in earnings before interest, tax, depreciation and amortization (EBITDA).

The Company generated $3 million in cash from operations in 1998, an increase of 190% over the 1997 cash flow from operations of $3 million. The increase in cash flow from operations in 1998 reflects an improved operating performance, which resulted in $18.9 million in earnings before interest, tax, depreciation and amortization (EBITDA).

Cash Flows From Investing Activities – During 1999, the Company increased its investments in property, plant and equipment to $7 million. The main areas of expansion were the new distribution center in South Carolina, additions to manufacturing capacity including machinery, molds and tooling, and continued improvements to the Company’s information systems infrastructure. The Company expects to continue making manufacturing capacity additions and investments in productivity improvements in order to be a more efficient producer and improve customer service. Anticipated capital expenditures approximate $10 million for 2000.

The Company reduced its purchases of property, plant and equipment by $7 million to $4.5 million in 1998. These additions were directed toward increased manufacturing capacity of priority products and product line expansions.

Cash Flows From Financing Activities - The Company used $3.8 million of cash in 1999 for financing activities. Due to improved operating cash flows, the Company was able to pay down term debt and other obligations.

Based upon the Company’s past performance and current expectations, management believes that internally generated cash flows and existing capacity under the secured credit agreement are adequate to fund the Company’s 2000 cash needs for capital expenditures and general operating requirements.

Impact of Year 2000

In prior years, the Company discussed the nature and progress of its plans to become Year 2000 ready. In mid 1999, the Company completed its remediation and testing of systems. As a result of these planning and implementation efforts, the Company experienced no significant disruptions in mission critical information technology and non-information technology systems and believes those systems successfully responded to the Year 2000 date change. The Company spent approximately $360,000 during 1999 in connection with remediating its systems and equipment. The Company is not aware of any material problems resulting from Year 2000 issues, either with its products, its internal systems, or the products and services of third parties. The Company will continue to monitor its mission critical computer applications, equipment, suppliers and customers throughout the Year 2000 to ensure that any latent Year 2000 matters that may arise are addressed promptly.

Outlook

The following paragraphs contain forward-looking comments. These comments are subject to, and the actual future results may be impacted by, the cautionary limitations and factors outlined in the following narrative comments.

In 1999, the Company experienced many challenges including the consolidation of its distribution operations, significant increases in PVC resin costs and unexpected resin shortages due to the Oklahoma City tornado, which created a force majure condition at Lamson’s primary resin supplier. Despite these hurdles, the Company provided improved customer service, introduced several new product lines and was able to maintain its margins despite significant raw material cost increases arising from very tight market supply and demand conditions. This resulted in an excess of 8% growth in sales and the Company’s best operating performance of the nineties.

The Company expects upward pressure on PVC resin prices throughout 2000 as no increase in supply is anticipated until the end of 2001. The demand for the Company’s products follows new home sales and housing start construction indexes, telecom market construction, consumer confidence and consumer spending in the DIY retail market, all of which should be fairly stable in 2000.

The Company intends to capitalize on favorable market conditions, improved service levels, a stable economy and increased new product sales to achieve its long-term growth goals of 10%-12% in sales.

The Company is well positioned in 2000 to take advantage of favorable market conditions and operating efficiencies to meet its long-term goal of a 15%-20% increase in net earnings.

The above statements contain expectations that are forward looking within the meaning of the private Securities Litigation Reform Act of 1995. Actual results may differ materially from those expected as a result of a variety of factors such as (i) the volatility of polyvinyl chloride resin pricing, (ii) changes in the pattern of construction spending in both the new construction and repair and rehabilitation markets, (iii) changes in the number and distribution of housing starts, (iv) fluctuations in the interest rate affecting housing starts, (v) the ability of the Company to pass through raw material cost increases to its customers and (vi) a reversal in the country’s general pattern of economic stability affecting the markets for the Company’s products.

Item 7(a). — Not Applicable.

Item 8. – Financial Statements and Supplementary Data

CONSOLIDATED STATEMENTS OF OPERATIONS

THE LAMSON & SESSIONS CO. AND SUBSIDIARIES

(Dollars in thousands, except per share data)


	Fiscal Years

	1999			1998			1997

NET SALES	$	291,381		$	270,914		$	271,780




Cost of products sold		229,981			214,410			221,898

GROSS PROFIT		61,400			56,504			49,882




Operating expenses		48,054			47,584			52,377

OPERATING INCOME (LOSS)		13,346			8,920			(2,495	)




Interest		3,558			4,341			3,768

INCOME (LOSS) BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF ACCOUNTING CHANGE		9,788			4,579			(6,263	)




Income tax benefit		(9,000	)		(2,100	)		(1,550	)





INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE		18,788			6,679			(4,713	)




Cumulative effect of accounting change								(4,940	)

NET INCOME (LOSS)	$	18,788		$	6,679		$	(9,653	)

BASIC EARNINGS (LOSS) PER COMMON SHARE:




Earnings (loss) before change in accounting principle	$	1.40		$	0.50		$	(0.35	)




Cumulative effect of accounting change								(0.37	)

NET EARNINGS (LOSS)	$	1.40		$	0.50		$	(0.72	)

DILUTED EARNINGS (LOSS) PER COMMON SHARE:




Earnings (loss) before change in accounting principle	$	1.39		$	0.50		$	(0.35	)




Cumulative effect of accounting change								(0.37	)

NET EARNINGS (LOSS)	$	1.39		$	0.50		$	(0.72	)

See notes to consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS

THE LAMSON & SESSIONS CO. AND SUBSIDIARIES

(Dollars in thousands)


			Fiscal Years

			1999			1998			1997

OPERATING ACTIVITIES




Net income (loss)			$	18,788		$	6,679		$	(9,653	)




Adjustments to reconcile net income (loss) to cash provided by operating activities:




	Depreciation and amortization			10,136			9,957			8,719




	Loss on disposal of assets			516




	Deferred income taxes			(9,000	)		(2,100	)		(1,450	)




	Cumulative effect of accounting change									4,940




	Net change in working capital accounts:




		Accounts receivable		(5,596	)		(2,129	)		3,675




		Inventories		(3,399	)		6,413			(2,753	)




		Prepaid expenses and other		(2,041	)		4,535			(166	)




		Accounts payable, accrued expenses and other current liabilities		10,629			(10,391	)		6,012




	Other long-term items			(6,111	)		(4,243	)		(6,313	)

Cash Provided by Continuing Operations				13,922			8,721			3,011




Cash Used for Previously-Owned Businesses				(1,724	)

CASH PROVIDED BY OPERATING ACTIVITIES				12,198			8,721			3,011




INVESTING ACTIVITIES




	Net additions to property			(7,563	)		(4,546	)		(11,584	)




	Net proceeds from sale of assets									1,413

CASH USED IN INVESTING ACTIVITIES				(7,563	)		(4,546	)		(10,171	)




FINANCING ACTIVITIES




	Net (payments) borrowings under secured credit agreement			(3,000	)		(3,065	)		7,817




	Net change in long-term borrowings and capital lease obligations			(848	)		(751	)		(633	)




	Exercise of stock options						168			628

CASH (USED) PROVIDED BY FINANCING ACTIVITIES				(3,848	)		(3,648	)		7,812

INCREASE IN CASH				787			527			652




Cash at beginning of year				1,937			1,410			758

CASH AT END OF YEAR			$	2,724		$	1,937		$	1,410

See notes to consolidated financial statements.

CONSOLIDATED BALANCE SHEETS

THE LAMSON & SESSIONS CO. AND SUBSIDIARIES
January 1, 2000 and January 2, 1999

(Dollars in thousands)


				1999		1998

ASSETS




CURRENT ASSETS




	Cash and cash equivalents			$	2,724	$	1,937




	Accounts receivable, less allowances; 1999—$2,078 and 1998—$2,924				40,676		35,080




	Inventories:




		Finished goods and work-in-process			36,778		33,873




		Raw materials			5,783		5,289

					42,561		39,162




	Deferred tax assets				4,963		6,057




	Prepaid expenses and other				3,780		1,739

			TOTAL CURRENT ASSETS		94,704		83,975




PENSION ASSETS					19,046		15,347




DEFERRED TAX ASSETS					15,787		5,693




OTHER ASSETS					5,689		4,917




PROPERTY, PLANT AND EQUIPMENT




	Land				3,588		3,588




	Buildings				22,251		21,592




	Machinery and equipment				92,893		88,662

					118,732		113,842




	Less allowances for depreciation and amortization				70,639		63,107

Total net property, plant and equipment					48,093		50,735

			TOTAL ASSETS	$	183,319	$	160,667

See notes to consolidated financial statements.

CONSOLIDATED BALANCE SHEETS

THE LAMSON & SESSIONS CO. AND SUBSIDIARIES

January 1, 2000 and January 2, 1999
(Dollars in thousands, except per share data)


				1999			1998

LIABILITIES AND SHAREHOLDERS’ EQUITY




CURRENT LIABILITIES




	Accounts payable			$	28,237		$	20,077




	Accrued compensation and benefits				9,184			8,459




	Other accrued expenses				11,269			11,189




	Taxes				3,645			3,705




	Current maturities of long-term debt				3,888			3,848

			TOTAL CURRENT LIABILITIES		56,223			47,278

LONG-TERM DEBT					36,919			40,807




POST-RETIREMENT BENEFITS AND OTHER LONG-TERM LIABILITIES					26,808			28,451




SHAREHOLDERS’ EQUITY




	Common shares, without par value, stated value of $0.10 per share, authorized 20,000,000 shares; outstanding—13,453,251 shares in 1999 and 13,444,534 shares in 1998				1,345			1,344




	Other capital				73,616			73,574




	Retained earnings (deficit)				(11,212	)		(30,000	)




	Accumulated other comprehensive income (loss)				(380	)		(787	)

Total shareholders’ equity					63,369			44,131

		TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY		$	183,319		$	160,667

See notes to consolidated financial statements.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

THE LAMSON & SESSIONS CO. AND SUBSIDIARIES
(Dollars in thousands)


									Accumulated Other
									Comprehensive Income (Loss)

						Retained									Total
		Common		Other		Earnings			Foreign Currency			Minimum Pension			Shareholders'
		Shares		Capital		(Deficit)			Translation			Liability			Equity

Balance at December 28, 1996		$	1,330	$	72,792	$	(27,026	)	$	(279	)	$	(2,030	)	$	44,787




Net loss							(9,653	)								(9,653	)




Other comprehensive income (loss):




	Foreign currency translation Minimum pension liability												1,219			1,219

Total comprehensive income (loss)																(8,434	)




Issuance of 113,100 common shares under stock option plans			11		617											628

Balance at January 3, 1998		$	1,341	$	73,409	$	(36,679	)	$	(279	)	$	(811	)	$	36,981




Net income							6,679									6,679




Other comprehensive income (loss):




	Foreign currency translation									(72	)					(72	)




	Minimum pension liability												375			375

Total comprehensive income (loss)																6,982




Issuance of 30,350 common shares under stock option plans			3		165											168

Balance at January 2, 1999		$	1,344	$	73,574	$	(30,000	)	$	(351	)	$	(436	)	$	44,131




Net income							18,788									18,788




Other comprehensive income:




	Foreign currency translation									28						28




	Minimum pension liability												379			379

Total comprehensive income																19,195




Issuance of 8,717 common shares under deferred compensation plans			1		42											43

Balance at January 1, 2000		$	1,345	$	73,616	$	(11,212	)	$	(323	)	$	(57	)	$	63,369

See notes to consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

THE LAMSON & SESSIONS CO. AND SUBSIDIARIES

Three fiscal years ended January 1, 2000

NOTE A—ACCOUNTING POLICIES

Fiscal Year: The Company’s fiscal year end is the Saturday closest to December 31.

Principles of Consolidation and Presentation: The consolidated financial statements include the accounts of the Company and all domestic and foreign subsidiaries after elimination of intercompany items. Certain 1998 and 1997 items have been reclassified to conform with the 1999 financial statement presentation.

Revenue Recognition: Revenues are derived from sales to unaffiliated customers and are recognized when products are shipped and title has transferred.

Cash and Cash Equivalents: The Company considers all investments with an original maturity of three months or less on their acquisition date to be cash equivalents.

Inventories: Inventories are valued at the lower of first-in, first-out (FIFO) cost or market.

Financial Instruments: The Company’s carrying value of its financial instruments approximates fair value.

Property and Depreciation: Property, plant and equipment are recorded at cost. For financial reporting purposes, depreciation and amortization are computed principally by the straight-line method over the estimated useful lives of the assets. Buildings are depreciated over a period of up to 31.5 years. Machinery and equipment is depreciated over periods ranging from 3 years to 15 years. Accelerated methods of depreciation are used for federal income tax purposes.

Income Taxes: The Company accounts for income taxes using the provisions of Statement of Financial Accounting Standards (SFAS) No. 109, “Accounting for Income Taxes.” Investment tax credits are recorded using the flow-through method.

Research and Development Costs: Research and development (R&D) costs consist of Company-sponsored activities to develop new value-added products. R&D costs are expensed as incurred and expenditures were $3,800,000, $3,700,000 and $4,600,000 in 1999, 1998 and 1997, respectively. R&D costs are included in operating expenses in the Consolidated Statements of Operations.

Advertising Costs: Advertising costs are expensed as incurred and totaled $2,300,000, $2,600,000 and $3,500,000 for 1999, 1998 and 1997, respectively.

Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

THE LAMSON & SESSIONS CO. AND SUBSIDIARIES

NOTE B—LONG-TERM DEBT AND COMMITMENTS

Long-term debt consists of the following:


		Fiscal Years

(Dollars in thousands)		1999		1998

Secured Credit Agreement:




	Term	$	8,250	$	11,250




	Revolver		23,000		23,000

			31,250		34,250




Industrial Revenue Bonds			8,070		8,570




Building mortgage			1,487		1,793




Other					42

			40,807		44,655




Less amounts classified as current			3,888		3,848

		$	36,919	$	40,807

The Company has a long-term $65,000,000 secured credit agreement. The agreement was amended February 7, 2000 to extend the term to June 30, 2001. The agreement is secured by the Company’s accounts receivable, inventory and property, plant and equipment. The agreement consists of both term and revolving credit facilities with interest variable on both portions. The rate paid varies based on the Company’s financial performance and the pricing option chosen. Borrowings under this agreement carry interest based on any of three pricing options (prime rate, LIBOR or commercial paper), at the Company’s option, plus the applicable spread. Interest is paid in accordance with the maturity of the pricing option selected. The term portion of this facility carried interest at a weighted average rate of 9.1%, which is 3.0% over the commercial paper rate at January 1, 2000, and requires principal payments of $750,000 due the last day of each calendar quarter with a $4,500,000 balloon payment due June 30, 2001. The revolving credit portion permits borrowings of up to $50,000,000 at any time through June 30, 2001 and carries an average variable rate of 8.79% at January 1, 2000. The agreement provides for the payment of a commitment fee on the revolving line of credit of .375% per annum on the average daily unused commitment. In addition to amounts borrowed, letters of credit related to Industrial Revenue Bond financings and other contractual obligations total approximately $13,500,000 under the agreement.

The Company’s Industrial Revenue Bond financings include several issues due in annual installments from 2000 through 2023 with interest at variable rates. The weighted average rate for these bonds at January 1, 2000 was 4.28%. The Company maintains letters of credit related to one of the Industrial Revenue Bonds and other contractual obligations for approximately $3,900,000 with two banks. The Company’s headquarters is subject to a mortgage payable in equal monthly installments through 2003 with interest at 8.625%.

The Company’s credit agreements contain various restrictive covenants pertaining to maintenance of debt service, tangible net worth, dividend payments and certain other financial ratios.

The aggregate minimum combined maturities of long-term debt for the years 2001 through 2004 are approximately $29,219,000, $1,051,000, $1,054,000 and $660,000, respectively, with $4,935,000 due thereafter.

Interest paid was $3,679,000, $4,253,000 and $3,895,000 in 1999, 1998 and 1997, respectively.

Rental expense was $4,908,000, $4,092,000 and $4,656,000 in 1999, 1998 and 1997, respectively. Aggregate future minimum payments related to non-cancelable operating leases with initial or remaining terms of one year or more for the years 2000 through 2004 are approximately $4,060,000, $3,924,000, $2,315,000, $1,897,000 and $1,467,000, respectively, with $7,105,000 due thereafter.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

THE LAMSON & SESSIONS CO. AND SUBSIDIARIES

NOTE C—PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS

The Company sponsors several qualified and nonqualified pension plans and other post-retirement benefit plans for its current and former employees. The following table provides a reconciliation of the changes in the benefit obligations and fair value of plan assets over each of the two years in the period ended January 1, 2000 and a statement of the funded status for both year ends:


	Pension Benefits						Other Benefits

(Dollars in thousands)	1999			1998			1999			1998

Change in Benefit Obligation




Obligation at beginning of year	$	83,151		$	78,821		$	18,403		$	18,287




Service cost		1,277			1,164			329			289




Interest cost		5,179			5,306			1,132			1,206




Plan participants’ contribution		—			—			100			93




Plan amendment		—			—			(2,630	)		—




Actuarial (gain) loss		(8,679	)		4,788			(1,304	)		368




Benefits paid		(6,849	)		(6,928	)		(1,990	)		(1,840	)

Obligation at end of year	$	74,079		$	83,151		$	14,040		$	18,403

Effective January 1, 2000, the Company amended its salaried associates retirement benefits program by phasing out certain medical benefits.


	Pension Benefits						Other Benefits

(Dollars in thousands)	1999			1998			1999			1998

Change in Plan Assets




Fair value of plan assets at beginning of year	$	83,899		$	76,747




Actual return on plan assets		9,210			9,257




Employer contributions		2,419			4,823		$	1,890		$	1,747




Plan participants’ contributions								100			93




Benefits paid		(6,849	)		(6,928	)		(1,990	)		(1,840	)

Fair value of plan assets at end of year	$	88,679		$	83,899		$	—		$	—

Plan assets include Company common shares with a fair market value at January 1, 2000 and January 2, 1999 of $3.3 million and $3.5 million, respectively.


	Pension Benefits						Other Benefits

(Dollars in thousands)	1999			1998			1999			1998

Funded Status




Fund status at end of year	$	14,600		$	748		$	(14,040	)	$	(18,403	)




Unrecognized actuarial loss (gain)		1,565			12,007			(2,517	)		(1,328	)




Unrecognized transition (asset)		(1,340	)		(1,429	)




Unrecognized prior service cost (gain)		230			299			(2,630	)

Net amount recognized at end of year	$	15,055		$	11,625		$	(19,187	)	$	(19,731	)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

THE LAMSON & SESSIONS CO. AND SUBSIDIARIES

NOTE C—PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS—Continued

The pension benefits table above provides information relating to the funded status of all defined benefit pension plans on an aggregated basis. The projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for the pension plans with accumulated benefit obligations in excess of plan assets were $4.2 million, $3.9 million and $0 million, respectively, as of January 1, 2000 and $4.5 million, $4.1 million and $0, respectively, as of January 2, 1999.

The following table provides the amounts recognized in the consolidated balance sheets for both years:


	Pension Benefits						Other Benefits

(Dollars in thousands)	1999			1998			1999			1998

Prepaid benefit cost	$	19,046		$	15,347




Accrued benefit liability		(4,085	)		(4,250	)	$	(19,187	)	$	(19,731	)




Intangible asset		37			92




Accumulated other comprehensive income		57			436

	$	15,055		$	11,625		$	(19,187	)	$	(19,731	)

The assumptions used in the measurement of the Company’s benefit obligations at January 1, 2000 and January 2, 1999 were:


	Pension Benefits						Other Benefits

	1999			1998			1999			1998

Discount rate		7.5	%		6.5	%		7.5	%		6.5	%




Expected return on plan assets		9.5	%		9.5	%




Rate of salary increase		5.0	%		5.0	%

For measurement purposes, a 9% average health care cost trend rate was used for 2000 (9.7% in 1999). The rate is assumed to decline gradually each year to an ultimate rate of 5.5% in 2007 and thereafter. A 1% change in assumed health care cost trend rates would have the following effects:


(Dollars in thousands)	1% Increase		1% Decrease

Net periodic benefit cost	$	159	$	(143	)




Accumulated post-retirement benefit obligation	$	971	$	(874	)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

THE LAMSON & SESSIONS CO. AND SUBSIDIARIES

NOTE C—PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS—Continued

The components of net periodic benefit cost (income) are as follows:


	Pension Benefits									Other Benefits

(Dollars in thousands)	1999			1998			1997			1999			1998			1997

Service cost	$	1,277		$	1,164		$	922		$	329		$	289		$	294




Interest cost		5,179			5,306			5,483			1,132			1,206			1,027




Actual return on assets		(9,210	)		(9,257	)		(9,552	)




Net amortization and deferral		1,743			2,339			3,356			(115	)		(149	)		(278	)




Curtailment loss								106




Defined contribution plans		709			853			771

	$	(302	)	$	405		$	1,086		$	1,346		$	1,346		$	1,043

In addition to the defined benefit plans described above, the Company also sponsors defined contribution plans which cover substantially all full time associates. Company contributions are based upon a fixed percentage of 50% of voluntary employee contributions of up to 6% of wages.

The Company remains contingently liable for certain post-retirement benefits of certain businesses previously sold.

NOTE D—LITIGATION

The Company has filed a suit to recover damages related to the termination of the agreement to sell its PVC Pipe business. It is premature to estimate the timing for a resolution of this suit.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

THE LAMSON & SESSIONS CO. AND SUBSIDIARIES

NOTE E—PREFERRED AND PREFERENCE STOCK

The Company has authorized 1,200,000 and 3,000,000 shares of Serial Preferred and Preference Stock, respectively, none of which is issued or outstanding at January 1, 2000. The Company has reserved for issuance 200,000 shares of Cumulative Redeemable Serial Preference Stock, Series II, without par value (“Series II Preference Stock”), which relates to the Rights Agreement, dated as of September 8, 1998, between the Company and National City Bank (the “Rights Agreement”).

Under the Company’s Rights Agreement, each shareholder has the right to purchase from the Company one one-hundredth of a share of the Series II Preference Stock, subject to adjustment, upon payment of an exercise price of $44.75. The Rights will become exercisable only after a person or group acquires beneficial ownership of or commences a tender or exchange offer for 15% or more of the Company’s Common Shares. Rights held by persons who exceed that threshold will be void. In the event that a person or group acquires beneficial ownership of 15% or more of the Company’s Common Shares, or a 15% shareholder merges into or with the Company or engages in one of a number of self-dealing transactions, each Right would entitle its holder to purchase a number of the Company’s Common Shares (or, in certain cases, common stock of an acquirer) having a market value of twice the Right’s exercise price.

The Company’s Board of Directors may, at its option, redeem all Rights for $0.01 per Right, generally at any time prior to the Rights becoming exercisable. The Rights will expire on September 20, 2008, unless earlier redeemed, exchanged or amended by the Board of Directors.

NOTE F—STOCK COMPENSATION PLANS

On April 23, 1999, the Company’s shareholders approved an additional 100,000 shares to be made available under the 1994 Nonemployee Directors Stock Option Plan, bringing the total common shares authorized for issuance under this Plan to 160,000. The stock options become exercisable one year after date of grant and expire at the end of ten years. At January 1, 2000, a total of 99,000 shares were available for future grant of stock options under this Plan.

On May 5, 1998, the Company’s 1988 Incentive Equity Performance Plan expired. At January 1, 2000, there were options outstanding under the Plan representing 1,334,300 shares of the Company’s common stock. The options outstanding under the Plan may be exercised, pursuant to the terms of the stock option agreements, through April 20, 2008.

On April 24, 1998, the 1998 Incentive Equity Plan, was approved by the Company’s shareholders for 650,000 shares of common stock. Under the 1998 Incentive Equity Plan, the Company is authorized to issue incentive stock options (ISOs), non-qualified stock options, stock appreciation rights (SARs) and restricted or deferred stock. Stock options generally become exercisable, in part, one year after date of grant and expire at the end of ten years. At January 1, 2000, under this Plan, a total of 326,783 shares were available for future grant.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

THE LAMSON & SESSIONS CO. AND SUBSIDIARIES

NOTE F—STOCK COMPENSATION PLANS — Continued

A summary of the status of the Company’s three stock compensation plans as of January 1, 2000, January 2, 1999 and January 3, 1998, and changes during the respective years then ended is presented below:


(Shares in thousands)	1999					1998					1997

				Weighted-					Weighted-					Weighted-
				Average					Average					Average
	Shares			Exercise Price		Shares			Exercise Price		Shares			Exercise Price

Outstanding at beginning of year		1,473		$	6.73		1,177		$	6.83		1,138		$	6.58




Granted		341			5.00		461			6.91		251			7.91




Exercised		—			—		(30	)		5.54		(113	)		5.55




Forfeited		(104	)		7.66		(135	)		8.47		(99	)		8.16

Outstanding at end of year		1,710		$	6.34		1,473		$	6.73		1,177		$	6.83

Options exercisable at year-end		1,118					899					841




Weighted-average fair value of options granted during the year				$	1.85				$	2.55				$	2.97

The following table summarizes information about options outstanding at January 1, 2000:


		Options Outstanding						Options Exercisable

				Weighted-Average
Range of		Shares		Remaining		Weighted-Average		Shares		Weighted-Average
Exercise Prices		at 1/1/00		Contractual Life (Yrs)		Exercise Price		at 1/1/00		Exercise Price

	$0-5		474,800		6.40	$	4.78		162,800	$	4.43




	5-10		1,223,500		5.97		6.89		943,624		6.85




	10-15		11,500		6.40		10.24		11,500		10.24

The Company applies Accounting Principles Board Opinion No. 25 “Accounting for Stock Issued to Employees” and related interpretations in accounting for its stock-based plans. Accordingly, compensation cost has not been recognized for the fixed stock-based compensation plans. Had compensation expense been recognized following SFAS No. 123, “Accounting for Stock-Based Compensation,” the Company’s proforma net income (loss) and earnings (loss) per share would have been as follows:


		Fiscal Years

(Dollars in thousands, except per share data)		1999		1998		1997

Net income (loss)	As reported	$	18,788	$	6,679	$	(9,653	)




	Pro forma		18,322		6,230		(9,932	)




Basic earnings (loss) per share	As reported	$	1.40	$	0.50	$	(0.72	)




	Pro forma		1.36		0.46		(0.74	)




Diluted earnings (loss) per share	As reported	$	1.39	$	0.50	$	(0.72	)




	Pro forma		1.36		0.46		(0.74	)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

THE LAMSON & SESSIONS CO. AND SUBSIDIARIES

NOTE F—STOCK COMPENSATION PLANS — Continued

For pro forma calculations, the fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions used for grants:


	1999			1998			1997

Expected volatility		29.8	%		30.0	%		28.9	%




Risk-free interest rates		5.74	%		5.62	%		6.34	%




Average expected life		5 years			5 years			5 years

NOTE G—EARNINGS PER SHARE CALCULATION

The following table sets forth the computation of basic and diluted earnings per share:


		Fiscal Years

(Dollars and shares in thousands, except per share data)		1999		1998		1997

Basic Earnings (Loss) Per Share Computation




	Net Income (Loss)	$	18,788	$	6,679	$	(9,653	)

	Average Common Shares Outstanding		13,448		13,433		13,349

	Basic Earnings (Loss) Per Share	$	1.40	$	0.50	$	(0.72	)

Diluted Earnings (Loss) Per Share Computation




	Net Income (Loss)	$	18,788	$	6,679	$	(9,653	)

	Basic Shares Outstanding		13,448		13,433		13,349




	Stock Options Calculated Under the Treasury Stock Method		34		55

	Total Shares		13,482		13,488		13,349

	Diluted Earnings (Loss) Per Share	$	1.39	$	0.50	$	(0.72	)

NOTE H—INCOME TAXES

The Company has recognized net federal income tax benefits as follows:


(Dollars in thousands)	1999			1998			1997

Current	$	—		$	—		$	(100	)

								(100	)




Deferred		(9,000	)		(2,100	)		(1,450	)

	$	(9,000	)	$	(2,100	)	$	(1,550	)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

THE LAMSON & SESSIONS CO. AND SUBSIDIARIES

NOTE H—INCOME TAXES – Continued

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities are presented below:


		Fiscal Years

(Dollars in thousands)		1999			1998

Deferred tax assets:




	Net operating loss carryforwards (Federal & State)	$	18,700		$	18,200




	Other accruals, credits and reserves		6,300			8,100




	General business and alternative minimum tax credits		2,600			2,700




	Post-retirement benefits other than pensions		7,000			7,000

			34,600			36,000




	Less: valuation allowance		(2,600	)		(14,500	)

	Total deferred tax assets		32,000			21,500




Deferred tax liabilities:




	Tax in excess of book depreciation		5,900			5,750




	Pensions		5,350			4,000

	Total deferred tax liabilities		11,250			9,750

Total net deferred tax assets		$	20,750		$	11,750

The valuation allowance for net deferred tax assets decreased by $11,900,000 in 1999. The reduction was the result of net changes in temporary differences and the reversal of $9,000,000 of the valuation allowance, based on (i) improved operating results in 1999, (ii) projected operating results for 2000 and thereafter, and (iii) tax planning strategies available to the Company. At January 1, 2000, the deferred tax asset valuation allowance is primarily related to general business tax credit carryforwards and state net operating loss carryforwards. The Company has available federal net operating loss carryforwards totaling approximately $51 million, which expire in the years 2004 to 2012. The Company also has available general business tax credit carryforwards of $1.6 million which expire through 2011 and alternative minimum tax credit carryforwards of approximately $1 million which may be carried forward indefinitely.

The provision for income taxes is different than the amount computed using the applicable statutory federal income tax rate with the differences summarized below:


		Fiscal Years

(Dollars in thousands)		1999			1998			1997

Tax expense (benefit) at statutory rates		$	3,426		$	1,603		$	(3,921	)




Adjustment due to:




	Change in valuation allowance		(11,900	)		(4,300	)		1,900




	Other		(526	)		597			471

		$	(9,000	)	$	(2,100	)	$	(1,550	)

In 1999 and 1997 the Company received income tax refunds of $78,000 and $175,000, respectively, ($0 in 1998). Income taxes paid in 1998 were $11,000 ($0 in 1999 and 1997).

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

THE LAMSON & SESSIONS CO. AND SUBSIDIARIES

NOTE I—CHANGE IN ACCOUNTING PRINCIPLE

As required by Emerging Issues Task Force (EITF) Issue No. 97-13, “Business Process Re-engineering Costs,” the Company changed its accounting policy in the fourth quarter of 1997, regarding its business and information technology project. Prior to the issuance of the consensus opinion, substantially all direct costs relating to the project were capitalized, including the portion related to business process re-engineering. Under the EITF consensus, all costs for business process re-engineering must be expensed as incurred and the unamortized balance of these costs of $4.9 million were written off as a cumulative effect adjustment in the fourth quarter of 1997.

NOTE J—BUSINESS SEGMENTS

During 1999, the Company changed its segment reporting structure to match management’s internal reporting of business operations. Significant changes include the segregating of the PVC Pipe business. All segment data has been restated to conform with this revised presentation.

The Company’s reportable segments are as follows:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

THE LAMSON & SESSIONS CO. AND SUBSIDIARIES

NOTE J – BUSINESS SEGMENTS — Continued


(Dollars in thousands)	1999			1998			1997

Net Sales




Carlon	$	120,975		$	109,458		$	104,867




Lamson Home Products		53,401			50,348			50,819




PVC Pipe		117,005			111,108			116,094

	$	291,381		$	270,914		$	271,780

Operating Income (loss)




Carlon	$	15,065		$	14,660		$	9,251




Lamson Home Products		1,135			(1,783	)		(3,047	)




PVC Pipe		5,814			4,113			(918	)




Corporate Office (includes costs associated with the consolidation of distribution operations in 1999 and 1998)		(8,668	)		(8,070	)		(7,781	)

	$	13,346		$	8,920		$	(2,495	)

Depreciation and Amortization




Carlon	$	3,737		$	3,482		$	3,068




Lamson Home Products		2,792			2,618			2,465




PVC Pipe		3,607			3,857			3,155

	$	10,136		$	9,957		$	8,688

Total assets by business segment at January 1, 2000, January 2, 1999 and December 31, 1998.




Identifiable Assets




Carlon	$	52,326		$	50,704		$	51,528




Lamson Home Products		30,658			31,542			37,707




PVC Pipe		51,393			48,843			49,143




Corporate Office (includes deferred tax and pension assets)		48,942			29,578			30,597

	$	183,319		$	160,667		$	168,975

Substantially all sales are made within North America. Net sales to a single customer within the Carlon and PVC Pipe segments totaled approximately 17% in 1999, 15% in 1998 and 13% in 1997 of consolidated net sales.

NOTE K—RESTRUCTURING CHARGE

During the fourth quarter of 1998 the Company recorded a restructuring charge of $792,000 when it entered into a commitment to have a new distribution center constructed in South Carolina in order to consolidate distribution activities. The charge, which is included in cost of products sold, consisted primarily of a write-down of certain inventory to net realizable value.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

THE LAMSON & SESSIONS CO. AND SUBSIDIARIES

NOTE L—SUMMARY OF QUARTERLY RESULTS OF OPERATIONS—(UNAUDITED)

(Dollars in thousands, except per share data)


						Net			Basic Earnings			Diluted Earnings			Market Price Per Share
		Net		Gross		Income			(Loss) Per			(Loss) Per
		Sales		Profit		(Loss)			Common Share			Common Share			High		Low

Fiscal 1999:




	First quarter	$	67,198	$	15,452	$	2,724		$	0.20		$	0.20		$	5.63	$	4.75




	Second quarter		74,482		14,130		1,787			0.13			0.13			6.44		4.94




	Third quarter		75,436		16,127		3,767			0.28			0.28			6.94		4.56




	Fourth quarter		74,265		15,691		10,510	(1)		0.78			0.78			5.25		4.44

Total		$	291,381	$	61,400	$	18,788		$	1.40*		$	1.39




Fiscal 1998:




	First quarter	$	64,794	$	13,373	$	(326	)	$	(0.02	)	$	(0.02	)	$	7.44	$	5.63




	Second quarter		71,168		15,240		2,351			0.18			0.17			7.63		5.63




	Third quarter		73,160		16,195		3,611			0.27			0.27			6.56		3.88




	Fourth quarter		61,792		11,696		1,043			0.08			0.08			6.13		4.25

Total		$	270,914	$	56,504	$	6,679		$	0.50*		$	0.50

*		Earnings per share were computed on a stand-alone quarterly basis for each respective quarter. Therefore, the sum of the quarters in 1999 and 1998 for Basic Earnings Per Common Share does not equal the year’s total due to rounding.
(1)		Includes an income tax benefit of $6,900 in fourth quarter compared to $700 in the previous six quarters. See Note H.

REPORT OF INDEPENDENT AUDITORS

Board of Directors and Shareholders
The Lamson & Sessions Co.

We have audited the accompanying consolidated balance sheets of The Lamson & Sessions Co. and Subsidiaries as of January 1, 2000 and January 2, 1999, and the related consolidated statements of operations, shareholders’ equity and cash flows for each of the three fiscal years in the period ended January 1, 2000. Our audits also included the financial statement schedule listed in the Index at Item 14 (a). These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of The Lamson & Sessions Co. and Subsidiaries at January 1, 2000 and January 2, 1999, and the consolidated results of their operations and their cash flows for each of the three fiscal years in the period ended January 1, 2000, in conformity with accounting principles generally accepted in the United States. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

As discussed in Note I to the financial statements, in 1997, the Company changed its method of accounting for business process re-engineering costs.

Ernst & Young LLP

Cleveland, Ohio
February 7, 2000

STATEMENT OF MANAGEMENT’S RESPONSIBILITY

We have prepared the financial statements and other financial information contained in this Annual Report.

The management of Lamson & Sessions is primarily responsible for the integrity of this financial information. The financial statements were prepared in accordance with accounting principles generally accepted in the United States and necessarily include certain amounts based on management’s reasonable best estimates and judgments, giving due consideration to materiality. Financial information contained elsewhere in this Annual Report is consistent with that contained in the financial statements.

Management is responsible for establishing and maintaining a system of internal control designed to provide reasonable assurance as to the integrity and reliability of financial reporting. The concept of reasonable assurance is based on the recognition that there are inherent limitations in all systems of internal control, and that the cost of such systems should not exceed the benefits to be derived therefrom.

To meet management’s responsibility for financial reporting, we have established internal control systems that we believe are adequate to provide reasonable assurance that our assets are protected from loss. These systems produce data used for the preparation of published financial information and provide for appropriate reporting relationships and division of responsibility. All significant systems and controls are reviewed periodically by the internal audit group in order to ensure compliance, and by our independent auditors to support their audit work. It is management’s policy to implement a high proportion of recommendations resulting from these reviews.

The Audit Committee of the Board of Directors, composed solely of outside directors, meets regularly with management, the internal auditor group and our independent auditors to review accounting, auditing and financial matters. Both the independent auditors and the internal auditor group have free access to the Audit Committee, with or without management, to discuss the scope and results of their audits and the adequacy of the system of internal controls.


/s/ John B. Schulze _____________________________________ John B. Schulze Chairman of the Board, President and Chief Executive Officer

/s/ James J. Abel _____________________________________ James J. Abel Executive Vice President, Secretary, Treasurer and Chief Financial Officer

/s/ Lori L. Spencer _____________________________________ Lori L. Spencer Vice President and Controller Principal Accounting Officer

PART II

Item 9. – Disagreements on Accounting and Financial Disclosure

None

PART III

Item 10. – Directors and Executive Officers of the Registrant


(a)		Directors




		The information set forth under the caption “Election of Directors” in the Company’s definitive proxy statement for its Annual Meeting of Shareholders to be held April 28, 2000 is hereby incorporated by reference.




(b)		Executive Officers — See Part I




(c)		Compliance with Section 16 (a) of the Exchange Act.




		The information set forth under the caption “Section 16(a) Beneficial Ownership Reporting Compliance” in the Company’s definitive proxy statement for its Annual Meeting of Shareholders to be held April 28, 2000 is hereby incorporated by reference.

Item 11. – Executive Compensation

The information set forth under the caption “Executive Compensation” in the Company’s definitive proxy statement for its Annual Meeting of Shareholders to be held April 28, 2000 is hereby incorporated by reference.

Item 12. – Security Ownership of Certain Beneficial Owners and Management

The information set forth under the captions “Ownership of the Company’s Common Shares,” “Election of Directors” and “Security Ownership of Management” in the Company’s definitive Proxy Statement for its Annual Meeting of Shareholders to be held April 28, 2000 is hereby incorporated by reference.

Item 13. – Certain Relationships and Related Transaction

During the past fiscal year, the Company, in the normal course of business, utilized the services of the law firm of Jones, Day, Reavis & Pogue, in which Mr. Coquillette, a director of the Company, is a partner. The Company plans to continue using the services of the firm in 2000.

PART IV

Item 14. – Exhibits, Financial Statement Schedules, and Reports on Form 8-K

(a) The following documents are filed as part of this report:

Consolidated financial statements of The Lamson & Sessions Co. and Subsidiaries are included in Item 8 of this report:














1.		Financial Statements Consolidated Statements of Operations for Fiscal Years Ended 1999, 1998 and 1997.












		Consolidated Statements of Cash Flows for Fiscal Years Ended 1999, 1998 and 1997.












		Consolidated Balance Sheets at January 1, 2000 and January 2, 1999.












		Consolidated Statements of Shareholders’ Equity for Fiscal Years Ended 1999, 1998 and 1997.












		Notes to Consolidated Financial Statements.












2.		Financial Statement Schedule












		Schedule II — Valuation and Qualifying Accounts and Reserves.












		All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and, therefore, have been omitted.












3.		The exhibits listed in the accompanying Exhibit Index and required by Item 601 of Regulation S-K (numbered in accordance with Item 601 of Regulation S-K) are filed or incorporated by reference as part of this Report.

(b) Reports on Form 8-K

There were no reports on Form 8-K filed for the three months ended January 1, 2000.

(c) Exhibits — See 14(a) 3.

(d) Financial Statement Schedule

SCHEDULE II — Valuation and Qualifying Accounts and Reserves

(Dollars in thousands)


	Balance at		Charged to						Balance at
	Beginning of		Costs and						End of
Description	Period		Expenses		Deductions				Period

Year Ended January 1, 2000




Allowances deducted from assets:




Trade receivable allowances	$	2,924	$	574	$	1,420	(A	)	$	2,078




Inventory obsolescence reserve		1,189		1,369		1,528	(B	)		1,030




Other current and long-term assets		400								400




Accounts and loss reserves included in current and long-term liabilities		5,404				1,724	(D	)		3,680

Year Ended January 2, 1999




Allowances deducted from assets:




Trade receivable allowances	$	2,975	$	1,000	$	1,051	(A	)	$	2,924




Inventory obsolescence reserve		760		1,365		936	(B	)		1,189




Other current and long-term assets		400								400




Accounts and loss reserves included in current and long-term liabilities		5,419				15	(D	)		5,404

Year Ended January 3, 1998




Allowances deducted from assets:




Trade receivable allowances	$	2,895	$	1,022	$	942	(A	)	$	2,975




Inventory obsolescence reserve		606		420		266	(B	)		760




Other current and long-term assets		2,222				1,822	(C	)		400




Accounts and loss reserves included in current and long-term liabilities		6,624				1,205	(D	)		5,419

Note A — Principally write-off of uncollectible accounts and disputed items, net of recoveries.

Note B — Principally the disposal of obsolete inventory.

Note C — Adjustment to reserves and collection of note receivable for previously sold businesses.

Note D — Principally payments on contractual obligations for previously owned businesses.

Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 2nd day of March 2000.


		THE LAMSON & SESSIONS CO.

By		/s/ James J. Abel

		James J. Abel Executive Vice President, Secretary, Treasurer and Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated as of March 2, 2000.


Signature		Title

/s/ John B. Schulze John B. Schulze		Chairman of the Board, President and Chief Executive Officer (Principal Executive Officer)

/s/ James J. Abel James J. Abel		Executive Vice President, Secretary, Treasurer and Chief Financial Officer (Principal Financial Officer)

/s/ Lori L. Spencer Lori L. Spencer		Vice President and Controller (Principal Accounting Officer)

/s/ James T. Bartlett* James T. Bartlett		Director

/s/ Francis H. Beam, Jr.* Francis H. Beam, Jr.		Director

/s/ Martin J. Cleary* Martin J. Cleary		Director

/s/ William H. Coquillette* William H. Coquillette		Director


/s/ John C. Dannemiller* John C. Dannemiller		Director

/s/ George R. Hill* George R. Hill		Director

/s/ A. Malachi Mixon, III* A. Malachi Mixon, III		Director

/s/ John C. Morley* John C. Morley		Director

/s/ D. Van Skilling* D. Van Skilling		Director


*		The undersigned, by signing his name hereto, does sign and execute this Annual Report on Form 10-K pursuant to a Power of Attorney executed on behalf of the above named directors of The Lamson & Sessions Co. and filed herewith as Exhibit 24 on behalf of The Lamson & Sessions Co. and each such person.




		March 2, 2000


By		/s/ James J. Abel

		James J. Abel, Attorney-in-fact

EXHIBIT INDEX

Exhibit No.

Management Contracts and Compensatory Plans required to be filed pursuant to Item 14 of Form 10-K are identified with an asterisk (*).


3(a)		Amended Articles of Incorporation of the Company (incorporated by reference to Exhibit 4(a) to the Company’s Registration Statement on Form S-8, (Registration No. 333-32875) filed with the Securities and Exchange Commission on August 5, 1997).




3(b)		Amended Code of Regulations of the Company (incorporated by reference to Exhibit 3(b) to the Company’s Annual Report on Form 10-K for the year December 31, 1994).




4(a)		Specimen Certificate of Common Shares, without par value with Rights legend (incorporated by reference to Exhibit 3 to the Company’s Registration Statement on Form 8-A filed with the Securities and Exchange Commission on September 9, 1998).




4(e)		Form of Rights Certificate (incorporated by reference to Exhibit 4(oo) to the Company’s Registration Statement on Form 8-A filed with the Securities and Exchange Commission on September 9, 1998).




4(g)		Rights Agreement, dated as of September 8, 1998, by and between the Company and National City Bank (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form 8-A filed with the Securities and Exchange Commission on September 9, 1998).




*10(a)		1988 Incentive Equity Performance Plan (as amended as of February 26, 1998) (incorporated by reference to the Company’s Registration Statement on Form S-3 (Registration No. 333-65795) filed with the Securities and Exchange Commission on October 16, 1998).




*10(b)		Form of Three-Year Executive Change-in-Control Agreement between the Company and certain executive officers, filed herewith.




*10(c)		Form of Two-Year Executive Change-in-Control Agreement between the Company and certain executive officers, filed herewith.




*10(d)		Corporate Officers Incentive Compensation Plan (incorporated by reference to Exhibit 10(d) to the Company’s Annual Report on Form 10-K for the year ended December 31, 1994).




*10(e)		Form of Amended and Restated Supplemental Executive Retirement Agreement dated as of March 20, 1990 between the Company and certain of its executive officers (incorporated by reference to Exhibit 10(e) to the Company’s Annual Report on Form 10-K for the year ended December 30, 1995).




*10(f)		The Company’s Deferred Compensation Plan for Nonemployee Directors (incorporated by reference to the Company’s Registration Statement, on Form S-8 (Registration No. 333-12585) filed with the Securities and Exchange Commission on September 24, 1996).




*10(g)		Form of Indemnification Agreement between the Company and the Directors and certain officers (incorporated by reference to Exhibit 10(g) to the Company’s Annual Report on Form 10-K for the year ended December 31, 1994).




*10(h)		The Company’s Long-Term Incentive Plan (incorporated by reference to Exhibit 10(h) to the Company’s Annual Report on Form 10-K for the year ended December 28, 1996).






10(j)		Mortgage and Security Agreement, dated October 29, 1993, between The Lamson & Sessions Co. and PFL Life Insurance Company (incorporated herein by reference to Exhibit 10(j) to the Company’s Annual Report on Form 10-K for the year ended January 1, 1994).




10(k)		Asset Purchase Agreement between Iochpe-Maxion Ohio, Inc. and The Lamson & Sessions Co. dated as of May 4, 1994 (incorporated by reference to Exhibit 10 to the Company’s Current Report on Form 8-K dated as of May 27, 1994).




10(s)		Amended and Restated Loan Agreement dated as of July 14, 1995 by and between the Company and General Electric Capital Corporation (incorporated by reference to Exhibit 10(g) to the Company’s Quarterly Report on Form 10-Q for the period ended July 1, 1995, the “GECC Loan Agreement”).




10(t)		Amendment No. 1 dated as of October 30, 1995, to the GECC Loan Agreement (incorporated by reference to Exhibit 10(t) to the Company’s Annual Report on Form 10-K for the year ended December 30, 1995).




10(u)		Amendment No. 2 and Consent dated as of November 8, 1995 to the GECC Loan Agreement (incorporated by reference to Exhibit 10(u) to the Company’s Annual Report on Form 10-K for the year ended December 30, 1995).




10(v)		Amendment No. 3 dated as of March 31, 1996, to the GECC Loan Agreement (incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the period ended March 30, 1996).




10(w)		Amendment No. 4 dated as of October 25, 1996, to the GECC Loan Agreement (incorporated by reference to Exhibit 10(w) to the Company’s Quarterly Report on Form 10-Q for the period ended September 28, 1996).




10(y)		Amendment No. 5 dated as of March 5, 1997, to the GECC Loan Agreement (incorporated by reference to Exhibit 10(y) to the Company’s Annual Report on Form 10-K for the year ended December 28, 1996).




*10(z)		The Company’s Nonemployee Directors Stock Option Plan (incorporated by reference to the Company’s Registration Statement on Form S-8 (Registration No. 033-62443) filed with the Securities and Exchange Commission on September 8, 1995).




10(aa)		Amendment No. 6 dated as of July 24, 1997 to the GECC Loan Agreement (incorporated by reference to Exhibit 10(aa) to the Company’s Quarterly Report on Form 10-Q for the period ended July 5, 1997).




10(ab)		Amendment No. 7, dated as of January 30, 1998 to the GECC Loan Agreement (incorporated by reference to Exhibit 10(ab) to the Company’s Annual Report on Form 10-K for the year ended January 3, 1998).




*10(ac)		Amendment to the 1988 Incentive Equity Performance Plan (as amended as of February 26, 1998) (incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended January 3, 1998).




*10(ad)		Amendment to The Lamson & Sessions Co. Deferred Savings Plan (as amended February 26, 1998) (incorporated by reference to the Company’s Registration Statement on Form S-8 (Registration No. 333-46953) filed with the Securities and Exchange Commission on February 26, 1998).






*10(ae)		1998 Incentive Equity Plan (incorporated by reference to the Company’s Registration Statement on Form S-8 (Registration No. 333-61911) filed with the Securities and Exchange Commission on August 20, 1998).




10(af)		Amendment No. 8, dated as of January 29, 1999, to the GECC Loan Agreement (incorporated by reference to Exhibit 10(ag) to the Company’s Annual Report on Form 10-K for the year ended January 2, 1999).




*10(ag)		Amendment to the Nonemployee Directors Stock Option Plan effective as of February 25, 1999 (incorporated by reference to Exhibit 10(ah) to the Company’s Annual Report on Form 10-K for the year ended January 2, 1999).




10(ah)		Amendment No. 9, dated as of February 7, 2000, to the GECC Loan Agreement, filed herewith.




*10(aj)		Amendment to The Lamson & Sessions Co. Nonemployee Directors Stock Option Plan (as amended and restated as of April 23, 1999) (incorporated by reference to the Company’s Registration Statement on Form S-8 (Registration No. 333-93251) filed with the Securities and Exchange Commission on December 21, 1999).




*10(ak)		First Amendment to The Lamson & Sessions Co. Amended and Restated Supplemental Retirement Agreement, filed herewith.




*10(al)		Amendment No. 2 to The Lamson & Sessions Co. Nonemployee Directors Stock Option Plan, filed herewith.




*10(am)		Amendment No. 3 to The Lamson & Sessions Co. 1988 Incentive Equity Performance Plan, filed herewith.




*10(an)		Amendment No. 1 to The Lamson & Sessions Co. Long-Term Incentive Plan, filed herewith.




*10(ao)		Amendment No. 1 to The Lamson & Sessions Co. 1998 Incentive Equity Plan, filed herewith.




21		Subsidiaries of the Registrant filed herewith.




23		Consent of Independent Auditors filed herewith.




24		Powers of Attorney filed herewith.




27		Financial Data Schedule (Submitted for the SEC’s Information), filed herewith.

37 EX-10.B 2 EXHIBIT 10(B) 1 Exhibit 10(b) EXECUTIVE CHANGE-IN-CONTROL AGREEMENT ------------------------------------- This EXECUTIVE CHANGE-IN-CONTROL AGREEMENT ("Agreement"), dated as of January 1, 2000, by and between The Lamson & Sessions Co., an Ohio corporation (the "Company"), and [INSERT NAME OF EXECUTIVE] (the "Executive"); WITNESSETH: ---------- WHEREAS, the Executive is a senior executive of the Company and has made and is expected to continue to make major contributions to the profitability, growth and financial strength of the Company; WHEREAS, the Company recognizes that, as is the case for most publicly held companies, the possibility of a Change in Control (as that term is hereafter defined) exists; WHEREAS, the Company desires to assure itself of both present and future continuity of management in the event of a Change in Control and desires to establish certain minimum compensation rights of its key senior executive officers, including the Executive, applicable in the event of a Change in Control; WHEREAS, the Company wishes to ensure that its senior executives are not practically disabled from discharging their duties upon a Change in Control; WHEREAS, this Agreement is not intended to alter materially the compensation and benefits which the Executive could reasonably expect to receive from the Company absent a Change in Control and, accordingly, although effective and binding as of the date hereof, this Agreement shall become operative only upon the occurrence of a Change in Control; WHEREAS, the Executive is willing to render services to the Company on the terms and subject to the conditions set forth in this Agreement; and WHEREAS, this Agreement amends and restates the Employment Agreement(s) dated as of [DATE OF ORIGINAL AGREEMENT] (the "Prior Agreement(s)") between the Company and the Executive, which Prior Agreements will, without further action, be superseded as of the date first above written. NOW, THEREFORE, the Company and the Executive agree as follows: 2 1. OPERATION OF AGREEMENT: (a) This Agreement shall be effective and binding immediately upon its execution, but, anything in this Agreement to the contrary notwithstanding, this Agreement shall not become operative unless and until there shall have occurred a Change in Control. For purposes of this Agreement, a "Change in Control" shall have occurred if at any time during the Term (as that term is hereafter defined) any of the following events shall occur: (i) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities and Exchange Act of 1934, as amended (the "Exchange Act") (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 15% or more of either: (A) the then-outstanding shares of common stock of the Company (the "Company Common Stock") or (B) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors ("Voting Stock"); PROVIDED, HOWEVER, that for purposes of this subsection (i), the following acquisitions shall not constitute a Change in Control: (1) any acquisition directly from the Company, (2) any acquisition by the Company, (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary of the Company, or (4) any acquisition by any Person pursuant to a transaction which complies with clauses (A), (B) and (C) of subsection (iii) of this Section 1(a); or (ii) Individuals who, as of the date hereof, constitute the Board of Directors of the Company, (the "Incumbent Board") cease for any reason (other than death or disability) to constitute at least a majority of the Board of Directors of the Company; PROVIDED, HOWEVER, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without objection to such nomination) shall be considered as though such individual were a member of the Incumbent Board, but excluding for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest (within the meaning of Rule 14a-11 of the Exchange Act) with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board of Directors of the Company; or (iii) Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a "Business Combination"), in each case, unless, following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Company Common Stock and Voting Stock immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then-outstanding shares of common stock and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through 2 3 one or more subsidiaries) in substantially the same proportions relative to each other as their ownership, immediately prior to such Business Combination, of the Company Common Stock and Voting Stock of the Company, as the case may be, (B) no Person (excluding any entity resulting from such Business Combination or any employee benefit plan (or related trust) sponsored or maintained by the Company or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, 15% or more of, respectively, the then-outstanding shares of common stock of the entity resulting from such Business Combination, or the combined voting power of the then-outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (C) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board of Directors of the Company, providing for such Business Combination; or (iv) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company. (b) Upon the occurrence of a Change in Control at any time during the Term, this Agreement shall become immediately operative. (c) The period during which this Agreement shall be in effect (the "Term") shall commence as of the date hereof and shall expire as of the later of (i) the close of business on December 31, 2004 or (ii) the expiration of the Period of Employment (as that term is hereafter defined); PROVIDED, HOWEVER, that (A) commencing on January 1, 2001 and each January 1 thereafter prior to the occurrence of a Change in Control, the term of this Agreement shall automatically be extended for an additional year unless, not later than December 30 of the immediately preceding year, the Company or the Executive shall have given notice that it or he, as the case may be, does not wish to have the Term extended, and (B) subject to Section 8 hereof, if, prior to a Change in Control, the Executive ceases for any reason to be an officer of the Company, thereupon the Term shall be deemed to have expired and this Agreement shall immediately terminate and be of no further effect. 2. EMPLOYMENT; PERIOD OF EMPLOYMENT: (a) Subject to the terms and conditions of this Agreement, upon the occurrence of a Change in Control, the Company shall continue the Executive in its employ and the Executive shall remain in the employ of the Company for the period set forth in Section 2(b) hereof (the "Period of Employment"), in the position and with substantially the same duties and responsibilities that he had immediately prior to the Change in Control, or to which the Company and the Executive may hereafter mutually agree in writing. Throughout the Period of Employment, the Executive shall devote substantially all of his time during normal business hours (subject to vacations, sick leave and other absences in accordance with the policies of the Company as in effect for senior executives immediately prior to the Change in Control) to the business and affairs of the Company, but nothing in this Agreement shall preclude the Executive from devoting reasonable periods of time during normal business hours to (i) serving as a director, trustee or member of or participant in any organization or business, (ii) engaging in charitable and community activities, or (iii) managing his personal investments. 3 4 (b) The Period of Employment shall commence on the date of an occurrence of a Change in Control and, subject only to the provisions of Section 4 hereof, shall continue until the earlier of (i) the expiration of the third anniversary of the occurrence of the Change in Control, (ii) the Executive's death, or (iii) the Executive's attainment of age 65; PROVIDED, HOWEVER, that commencing on each anniversary of the Change of Control, the expiration of the Period of Employment provided for under clause (i) of this Section 2(b) shall automatically be extended for an additional year unless, not later than 90 calendar days prior to such anniversary date, either the Company or the Executive shall have given written notice to the other that the Period of Employment shall not be so extended. 3. COMPENSATION DURING PERIOD OF EMPLOYMENT: (a) Upon the occurrence of a Change in Control, the Executive shall receive during the Period of Employment (i) annual base salary at a rate not less than the Executive's annual fixed or base compensation (payable monthly or otherwise as in effect for senior executives of the Company immediately prior to the occurrence of a Change in Control) or such higher rate as may be determined from time to time by the Board of Directors of the Company (the "Board") or the Compensation Committee thereof (the "Committee") (which base salary at such rate is herein referred to as "Base Pay") and (ii) an annual amount equal to not less than the average of the aggregate annual bonus, incentive or other payments of cash compensation in addition to the amounts referred to in clause (i) above made or to be made in regard to services rendered in any calendar year during the period of two calendar years immediately preceding the year in which the Change in Control occurred pursuant to any bonus, incentive, profit sharing, performance, discretionary pay or similar policy, plan, program or arrangement of the Company or any successor thereto providing benefits at least as great as the benefits payable thereunder prior to a Change in Control ("Incentive Pay"); PROVIDED, HOWEVER, that with the prior written consent of the Executive, nothing herein shall preclude a change in the mix between Base Pay and Incentive Pay so long as the aggregate cash compensation received by the Executive in any one calendar year is not reduced in connection therewith or as a result thereof; and PROVIDED FURTHER, HOWEVER, that in no event shall any increase in the Executive's aggregate cash compensation or any portion thereof in any way diminish any other obligation of the Company under this Agreement. (b) For his service pursuant to Section 2(a) hereof, during the Period of Employment the Executive shall be a full participant in, and shall be entitled to the perquisites, benefits and service credit for benefits as provided under, any and all employee retirement income and welfare benefit and other fringe benefit policies, plans, programs or arrangements in which senior executives of the Company participate, including without limitation any stock option, stock purchase, stock appreciation, savings, pension, supplemental executive retirement or/ other retirement income or welfare benefit (within the meaning of Section 3(1) of the Employee Retirement Income Act of 1974, as amended), deferred compensation, incentive compensation, group and/or executive life, health, medical/hospital or other insurance (whether funded by actual insurance or self-insured by the Company), disability, salary continuation, expense reimbursement (including automobile allowances and reimbursement of club dues and financial planning fees) and other employee benefit policies, plans, programs or arrangements that may now exist or any equivalent successor policies, plans, programs or arrangements that may be 4 5 adopted hereafter by the Company providing perquisites, benefits and service credit for benefits at least as great as are payable thereunder prior to a Change in Control (collectively, "Employee Benefits"); PROVIDED, HOWEVER, that the Executive's rights thereunder shall be governed by the terms thereof and shall not be enlarged hereunder or otherwise affected hereby. Subject to the proviso in the immediately preceding sentence, if and to the extent that the Company determines, in the exercise of its reasonable judgment after consultation with nationally recognized legal counsel, that any perquisite, benefit or service credit for benefits is not or cannot be paid or provided under any such policy, plan, program or arrangement as a result of the amendment or termination thereof, then the Company shall itself pay or provide therefor. Nothing in this Agreement shall preclude improvement or enhancement of any such Employee Benefits, provided that no such improvement shall in any way diminish any other obligation of the Company under this Agreement. (c) The Company has determined that the amounts payable pursuant to this Section 3 constitute reasonable compensation for services to be rendered during the Period of Employment. 4. TERMINATION FOLLOWING A CHANGE IN CONTROL: (a) In the event of the occurrence of a Change in Control, the Executive's employment may be terminated by the Company during the Period of Employment and the Executive shall not be entitled to the benefits provided by Section 5 hereof only upon the occurrence of one or more of the following events: (i) The Executive's death; (ii) If the Executive shall become permanently disabled within the meaning of, and begins actually to receive disability benefits pursuant to, the long-term disability plan in effect for senior executives of the Company immediately prior to the Change in Control; or (iii) For "Cause", which for purposes of this Agreement shall mean that, prior to any termination pursuant to Section 4(b) hereof, the Executive shall have committed: (A) an intentional act of fraud, embezzlement or theft in connection with his duties or in the course of his employment with the Company; (B) intentional wrongful damage to property of the Company; or (C) intentional wrongful disclosure of secret processes or confidential information of the Company; and any such act shall have been materially harmful to the Company. For purposes of this Agreement, no act, or failure to act, on the part of the Executive shall be deemed "intentional" if it was due primarily to an error in judgment or negligence, but shall be deemed "intentional" only if done, or omitted to be done, by the Executive not in good faith and without reasonable belief that his action or omission was in the best interest of 5 6 the Company. Notwithstanding the foregoing, the Executive shall not be deemed to have been terminated for "Cause" hereunder unless and until there shall have been delivered to the Executive a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the Board then in office at a meeting of the Board called and held for such purpose (after reasonable notice to the Executive and an opportunity for the Executive, together with his counsel, to be heard before the Board), finding that, in the good faith opinion of the Board, the Executive had committed an act set forth above in this Section 4(a)(iii) and specifying the particulars thereof in detail. Nothing herein shall limit the right of the Executive or his beneficiaries to contest the validity or propriety of any such determination. (b) In the event of the occurrence of a Change in Control, during the Period of Employment, the Executive shall be entitled to the benefits as provided in Section 5 hereof upon the occurrence of one or more of the following events: (i) Any termination by the Company of the employment of the Executive prior to the date upon which the Executive shall have attained age 65, which termination shall be for any reason other than for Cause or as a result of the death of the Executive or by reason of the Executive's disability and the actual receipt of disability benefits in accordance with Section 4(a)(ii) hereof; or (ii) Termination by the Executive of his employment with the Company upon the occurrence of any of the following events: (A) Failure to elect, re-elect or otherwise maintain the Executive in the office or position in the Company which the Executive held immediately prior to a Change in Control, or the removal of the Executive as a Director of the Company (or any successor thereto) if the Executive shall have been a Director of the Company immediately prior to the Change in Control; (B) A significant adverse change in the nature or scope of the authorities, powers, functions, responsibilities or duties attached to the position with the Company which the Executive held immediately prior to the Change in Control, any reduction in the aggregate of the Executive's Base Pay and Incentive Pay received from the Company, or the termination of the Executive's rights to any Employee Benefits to which he was entitled immediately prior to the Change in Control or a reduction in scope or value thereof without the prior written consent of the Executive, any of which is not remedied within ten (10) calendar days after receipt by the Company of written notice from the Executive of such change, reduction or termination, as the case may be; (C) A determination by the Executive made in good faith that as a result of a Change in Control and a change in circumstances thereafter significantly affecting his position, including without limitation a change in the scope of the business or other activities for which he was responsible immediately prior to the Change in Control, he has been rendered substantially unable to carry out, has 6 7 been substantially hindered in the performance of, or has suffered a substantial reduction in, any of the authorities, powers, functions, responsibilities or duties attached to the position held by the Executive immediately prior to the Change in Control, which situation is not remedied within ten (10) calendar days after written notice to the Company from the Executive of such determination; (D) The liquidation, dissolution, merger, consolidation or reorganization of the Company or transfer of all or a significant portion of its business and/or assets, unless the successor or successors (by liquidation, merger, consolidation, reorganization or otherwise) to which all or a significant portion of its business and/or assets have been transferred (directly or by operation of law) shall have assumed all duties and obligations of the Company under this Agreement pursuant to Section 11 hereof; (E) The Company shall relocate its principal executive offices, or require the Executive to have his principal location of work changed, to any location which is in excess of fifty (50) miles from the location thereof immediately prior to the Change of Control or the Company shall require the Executive to travel away from his office in the course of discharging his responsibilities or duties hereunder significantly more (in terms of either consecutive days or aggregate days in any calendar year) than was required of him prior to the Change of Control without, in either case, his prior written consent; or (F) Without limiting the generality or effect of the foregoing, any material breach of this Agreement by the Company or any successor thereto. (c) A termination by the Company pursuant to Section 4(a) hereof or by the Executive pursuant to Section 4(b) hereof shall not affect any rights which the Executive may have pursuant to any agreement, policy, plan, program or arrangement of the Company providing Employee Benefits, which rights shall be governed by the terms thereof. If this Agreement or the employment of the Executive is terminated under circumstances in which the Executive is not entitled to any payments under Sections 3 or 5 hereof, the Executive shall have no further obligation or liability to the Company hereunder with respect to his prior or any future employment by the Company. 5. SEVERANCE COMPENSATION: (a) If, following the occurrence of a Change in Control, the Company shall terminate the Executive's employment during the Period of Employment other than pursuant to Section 4(a) hereof, or if the Executive shall terminate his employment pursuant to Section 4(b) hereof, the Company shall pay to the Executive the amounts specified in this Section 5(a) and, if required to be paid in a lump sum, the Company shall pay such amounts within five (5) business days after the date (the "Termination Date") that the Executive's employment is terminated (the effective date of which shall be the date of termination or such other date that may be specified by the Executive if the termination is pursuant to Section 4(b) hereof): 7 8 (i) In lieu of any further payments to the Executive for periods subsequent to the Termination Date, the Company shall pay to the Executive, a lump sum payment in an amount equal to the present value (using a discount rate equal to the then-applicable interest rate prescribed by the Pension Benefit Guarantee Corporation for benefit valuations in connection with non-multiemployer pension plan terminations assuming the immediate commencement of benefit payments (the "Discount Rate")) of the sum of (A) the aggregate Base Pay (at the greater of the highest rate in effect either immediately preceding the occurrence of the Change in Control or during the Period of Employment) for each remaining year or partial year of the Period of Employment which the Executive would have received had such termination or breach not occurred, plus (B) the aggregate Incentive Pay (calculated in accordance with the provisions of Section 3(a) hereof), which the Executive would have received pursuant to this Agreement during the remainder of the Period of Employment had his employment continued for the remainder of the Period of Employment. (ii) For the remainder of the Period of Employment the Company shall arrange to provide the Executive with Employee Benefits (other than (A) the retirement income, supplemental executive retirement and other benefits described in (iii) below, (B) the Company's matching contributions under the 401(k) Plan described in (iv) below and (C) stock option, stock purchase, stock appreciation and similar compensatory benefits) substantially similar to those which the Executive was receiving or entitled to receive immediately prior to the Termination Date (and if and to the extent the Company determines in the exercise of its reasonable judgment after consultation with nationally recognized legal counsel, that such benefits shall not or cannot be paid or provided under any policy, plan, program or arrangement of the Company, then the Company shall itself pay or provide for the payment to the Executive, his dependents and beneficiaries, such Employee Benefits); PROVIDED, HOWEVER, that any such payment by the Company that is less beneficial to the Executive or the Executive's beneficiaries and dependents from a tax perspective shall be increased appropriately to reflect the loss to the Executive or the Executive's dependents and beneficiaries. Without otherwise limiting the purposes or effect of Section 6 hereof, Employee Benefits payable to the Executive pursuant to this Section 5(a)(ii) by reason of any "welfare benefit plan" of the Company (as the term "welfare benefit plan" is defined in Section 3(1) of the Employee Retirement Income Act of 1974, as amended) shall be reduced to the extent comparable welfare benefits are actually received by the Executive from another employer during such period following the Executive's Termination Date until the expiration of the Period of Employment. (iii) In addition to the retirement income, supplemental executive retirement, and other benefits to which the Executive is entitled under the Company's Retirement Plans, the Executive will be entitled to a lump sum payment in an amount equal to the actuarial equivalent (using the Discount Rate and the applicable mortality table under Section 417(e)(3) of the Internal Revenue Code of 1986, as amended (the "Code")) of the excess of (A) the retirement pension benefits that would be payable to the Executive under the Retirement Plans if (x) the Executive continued to be employed through the end of the Period of Employment given the Executive's Base Pay and Incentive Pay 8 9 (without regard to any amendment to the Retirement Plans made subsequent to a Change in Control which adversely affects in any manner the computation of retirement benefits thereunder) for the calendar year in which the Executive's employment is terminated (or, if higher, for the calendar year immediately prior to the Change in Control) and (y) provided that the Executive is a party to an Amended and Restated Supplemental Retirement Agreement (a "SERP"), the fraction set forth in Section 2.2(a)(ii) of his SERP is equal to one, over (B) the retirement pension benefits that the Executive is entitled to receive (either immediately or on a deferred basis) under the Retirement Plans. For purposes of this subsection (iii), "Retirement Plans" means the pension, retirement income, supplemental employee or executive retirement, excess benefits and life and similar benefit plans in which the Executive participates at the time of a Change in Control providing retirement perquisites, benefits and service credit for benefits. (iv) The Company shall pay to the Executive (A) the amount of the matching contributions that would have been made to The Lamson & Sessions Co. Deferred Savings Plan (the "401(k) Plan") by the Company and allocated to the Executive's account thereunder as of the end of the Period of Employment if the Executive had continued to be employed through the end of the Period of Employment given the Executive's Base Pay and Incentive Pay for the calendar year in which the Executive's employment is terminated (or, if higher, for the year immediately prior to the Change in Control), and assuming the Executive's salary deferral was at the maximum permissible level less (B) the amount of the matching contributions made to the 401(k) Plan by the Company and allocated to the Executive's account thereunder at the Termination Date. (b) There shall be no right of set-off or counterclaim in respect of any claim, debt or obligation against any payment to or benefit for the Executive provided for in this Agreement. (c) Without limiting the rights of the Executive at law or in equity, if the Company fails to make any payment required to be made hereunder on a timely basis, the Company shall pay interest on the amount thereof at an annualized rate of interest equal to the then-applicable Discount Rate. 6. NO MITIGATION OBLIGATION: The Company hereby acknowledges that it will be difficult, and may be impossible, for the Executive to find reasonably comparable employment following the Termination Date. In addition, the Company acknowledges that its severance pay plan applicable in general to its salaried employees does not provide for mitigation, offset or reduction of any severance payment received thereunder. Accordingly, the parties hereto expressly agree that the payment of the severance compensation by the Company to the Executive in accordance with the terms of this Agreement will be liquidated damages, and that the Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise, nor shall any profits, income, earnings or other benefits from any source whatsoever create any mitigation, offset, reduction or any other obligation on the part of the Executive hereunder or otherwise, except as expressly provided in Section 5(a)(ii) hereof. 9 10 7. LEGAL FEES AND EXPENSES: (a) It is the intent of the Company that the Executive not be required to incur the expenses associated with the enforcement of his rights under this Agreement by litigation or other legal action because the cost and expense thereof would substantially detract from the benefits intended to be extended to the Executive hereunder. Accordingly, if it should appear to the Executive that the Company has failed to comply with any of its obligations under this Agreement or in the event that the Company or any other person takes any action to declare this Agreement void or unenforceable, or institutes any litigation designed to deny, or to recover from, the Executive the benefits intended to be provided to the Executive hereunder, the Company irrevocably authorizes the Executive from time to time to retain counsel of' his choice, at the expense of the Company as hereafter provided, to represent the Executive in connection with the initiation or defense of any litigation or other legal action, whether by or against the Company or any Director, officer, stockholder or other person affiliated with the Company, in any jurisdiction. Notwithstanding any existing or prior attorney-client relationship between the Company and such counsel, the Company irrevocably consents to the Executive's entering into an attorney-client relationship with such counsel, and in that connection the Company and the Executive agree that a confidential relationship shall exist between the Executive and such counsel. The Company shall pay or cause to be paid and shall be solely responsible for any and all attorneys' and related fees and expenses incurred by the Executive as a result of the Company's failure to perform this Agreement or any provision hereof or as a result of the Company or any person contesting the validity or enforceability of this Agreement or any provision hereof as aforesaid. (b) To ensure that the provisions of this Agreement can be enforced by the Executive, the Company shall establish certain trust arrangements ("Trusts") with an independent banking association as Trustee ("Trustee"). The Company shall execute and deliver a Trust Agreement ("Trust Agreement") and a Trust Agreement for Attorneys' Fees ("Trust Agreement for Attorneys' Fees") between the Trustee and the Company, and when so executed and delivered each Trust Agreement and Trust Agreement for Attorneys' Fees shall be deemed to be a part of this Agreement and shall set forth the terms and conditions relating to payment from the Trust under the Trust Agreement of compensation and other benefits pursuant to Sections 3 and 5 hereof owed by the Company, and payment from the Trust under the Trust Agreement for Attorneys' Fees of attorneys' and related fees and expenses pursuant to Section 7(a) hereof owed by the Company. The Executive shall first make demand on the Company for any payments due the Executive pursuant to Section 7(a) hereof prior to making demand therefor on the Trustee under the Trust Agreement for Attorneys' Fees. Payments by such Trustee shall discharge the Company's liability under Section 7(a) hereof only to the extent that trust assets are used to satisfy such liability. (c) Upon the occurrence of a Change in Control, the Company shall promptly, to the extent it has not previously done so, and in any event within five (5) business days: (i) transfer to the Trustee to be added to the principal of the Trust under the Trust Agreement a sum equal to the present value on the date of the Change in Control of the payments to be made to the Executive under the provisions of Section 5 hereof; PROVIDED, HOWEVER, that the Company shall not be required to transfer, in the aggregate, to the Trust under the Trust Agreement a sum in excess of the maximum amount 10 11 authorized from time to time by its Directors. Any payments of compensation, supplemental pension or other benefits by the Trustee pursuant to the Trust Agreement shall, to the extent thereof, discharge the Company's obligation to pay compensation, supplemental pension and other benefits hereunder, it being the intent of the Company that assets in such Trust be held as security for the Company's obligation to pay compensation, supplemental pension and other benefits under this Agreement; and (ii) transfer to the Trustee to be added to the principal of the Trust under the Trust Agreement for Attorneys' Fees the sum of TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000), it being the intent of the Company that assets in such Trust be held as security for the Company's obligation under Section 7(a) hereof. The Executive understands and acknowledges that the entire corpus of the Trust under the Trust Agreement for Attorneys' Fees will be $250,000 and that said amount will be available to discharge not only the obligations of the Company to the Executive under Section 7(a) hereof, but also similar obligations of the Company to other executives under similar provisions. 8. EMPLOYMENT RIGHTS: Nothing expressed or implied in this Agreement shall create any right or duty on the part of the Company or the Executive to have the Executive remain in the employment of the Company prior to any Change in Control; PROVIDED, HOWEVER, that any termination of employment of the Executive or the removal of the Executive from the office or position in the Company (as a result of a pending Change in Control) following the commencement of any discussion with a third person that ultimately results in a Change in Control shall be deemed to be a termination or removal of the Executive after a Change in Control for purposes of this Agreement. 9. WITHHOLDING OF TAXES: The Company may withhold from any amounts payable under this Agreement all federal, state, city or other taxes as shall be required pursuant to any law or government regulation or ruling. 10. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY: (a) Anything in this Agreement to the contrary notwithstanding, in the event that this Agreement shall become operative and it shall be determined (as hereafter provided) that any payment or distribution by the Company or any of its affiliates to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise pursuant to or by reason of any other agreement, policy, plan, program or arrangement, including without limitation any stock option, performance share, performance unit, stock appreciation right or similar right, or the lapse or termination of any restriction on or the vesting or exercisability of any of the foregoing (a "Payment"), would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code") (or any successor provision thereto) by reason of being considered "contingent on a change in ownership or control" of the Company, within the meaning of Section 280G of the Code (or any 11 12 successor provision thereto) or to any similar tax imposed by state or local law, or any interest or penalties with respect to such tax (such tax or taxes, together with any such interest and penalties, being hereafter collectively referred to as the "Excise Tax"), then the Executive will be entitled to receive an additional payment or payments (collectively, a "Gross-Up Payment"); PROVIDED, HOWEVER, that no Gross-Up Payment shall be made with respect to the Excise Tax, if any, attributable to (i) any incentive stock option, as defined by Section 422 of the Code ("ISO") granted prior to the execution of this Agreement, or (ii) any stock appreciation or similar right, whether or not limited, granted in tandem with any ISO described in clause (i). The Gross-Up Payment will be in an amount such that, after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including any Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed on the Payment. (b) Subject to the provisions of Section 10(f), all determinations required to be made under this Section 10, including whether an Excise Tax is payable by the Executive and the amount of such Excise Tax and whether a Gross-Up Payment is required to be paid by the Company to the Executive and the amount of such Gross-Up Payment, if any, will be made by a nationally recognized accounting firm (the "Accounting Firm") selected by the Executive in his sole discretion. The Executive will direct the Accounting Firm to submit its determination and detailed supporting calculations to both the Company and the Executive within thirty (30) calendar days after the Termination Date, if applicable, and any such other time or times as may be requested by the Company or the Executive. If the Accounting Firm determines that any Excise Tax is payable by the Executive, the Company will pay the required Gross-Up Payment to the Executive within five (5) business days after receipt of such determination and calculations with respect to any Gross-Up Payment to the Executive. If the Accounting Firm determines that no Excise Tax is payable by the Executive, it will, at the same time as it makes such determination, furnish the Company and the Executive an opinion that the Executive has substantial authority not to report any Excise Tax on his federal, state or local income or other tax return. As a result of the uncertainty in the application of Section 4999 of the Code (or any successor provision thereto) and the possibility of similar uncertainty regarding applicable state or local tax law at the time of any determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made (an "Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts or fails to pursue its remedies pursuant to Section 10(f) and the Executive thereafter is required to make a payment of any Excise Tax, the Executive will direct the Accounting Firm to determine the amount of the Underpayment that has occurred and to submit its determination and detailed supporting calculations to both the Company and the Executive as promptly as possible. Any such Underpayment will be promptly paid by the Company to, or for the benefit of, the Executive within five (5) business days after receipt of such determination and calculations. (c) The Company and the Executive will each provide the Accounting Firm access to and copies of any books, records and documents in the possession of the Company or the Executive, as the case may be, reasonably requested by the Accounting Firm, and otherwise cooperate with the Accounting Firm in connection with the preparation and issuance of the determinations and calculations contemplated by Section 10(b). Any determination by the Accounting Firm as to the amount of the Gross-Up Payment will be final and binding upon the Company and the Executive. 12 13 (d) The federal, state and local income or other tax returns filed by the Executive will be prepared and filed on a consistent basis with the determination of the Accounting Firm with respect to the Excise Tax payable by the Executive. The Executive will make proper payment of the amount of any Excise Payment, and at the request of the Company, provide to the Company true and correct copies (with any amendments) of his federal income tax return as filed with the Internal Revenue Service and corresponding state and local tax returns, if relevant, as filed with the applicable taxing authority, and such other documents reasonably requested by the Company, evidencing such payment. If prior to the filing of the Executive's federal income tax return, or corresponding state or local tax return, if relevant, the Accounting Firm determines that the amount of the Gross-Up Payment should be reduced, the Executive will within five (5) business days pay to the Company the amount of such reduction. (e) The fees and expenses of the Accounting Firm for its services in connection with the determinations and calculations contemplated by Section 10(b) will be borne by the Company. If such fees and expenses are initially paid by the Executive, the Company will reimburse the Executive the full amount of such fees and expenses within five (5) business days after receipt from the Executive of a statement therefor and reasonable evidence of his payment thereof. (f) The Executive will notify the Company in writing of any claim by the Internal Revenue Service or any other taxing authority that, if successful, would require the payment by the Company of a Gross-Up Payment. The Executive will not pay such claim prior to the earlier of (i) the expiration of the 30-calendar-day period following the date on which he gives such notice to the Company and (ii) the date that any payment of amount with respect to such claim is due. If the Company notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive will: (i) provide the Company with any written records or documents in his possession relating to such claim reasonably requested by the Company; (ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including without limitation accepting legal representation with respect to such claim by an attorney competent in respect of the subject matter and reasonably selected by the Company; (iii) cooperate with the Company in good faith in order effectively to contest such claim; and (iv) permit the Company to participate in any proceedings relating to such claim; PROVIDED, HOWEVER, that the Company will bear and pay directly all costs and expenses (including interest and penalties) incurred in connection with such contest and will indemnify and hold harmless the Executive, on an after-tax basis, for and against any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses. Without limiting the foregoing provisions of this Section 13 14 10(f), the Company will control all proceedings taken in connection with the contest of any claim contemplated by this Section 10(f) and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim (PROVIDED, HOWEVER, that the Executive may participate therein at his own cost and expense) and may, at its option, either direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; PROVIDED, HOWEVER, that if the Company directs the Executive to pay the tax claimed and sue for a refund, the Company will advance the amount of such payment to the Executive on an interest-free basis and will indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or income or other tax, including interest or penalties with respect thereto, imposed with respect to such advance; and PROVIDED FURTHER, HOWEVER, that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which the contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of any such contested claim will be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Executive will be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority. (g) If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 10(f), the Executive receives any refund with respect to such claim, the Executive will (subject to the Company's complying with the requirements of Section 10(f)) promptly pay to the Company the amount of such refund, less all out-of-pocket costs and expenses related thereto (together with any interest paid or credited thereon after any taxes applicable thereto). If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 10(f), a determination is made that the Executive will not be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such denial or refund prior to the expiration of thirty (30) calendar days after such determination, then such advance will be forgiven and will not be required to be repaid and the amount of any such advance will offset, to the extent thereof, the amount of Gross-Up Payment required to be paid by the Company to the Executive pursuant to this Section 10. 11. SUCCESSORS AND BINDING AGREEMENT: (a) The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business and/or assets of the Company, by agreement in form and substance satisfactory to the Executive, expressly to assume and agree to perform this Agreement in the same manner and to the same extent the Company would be required to perform if no such succession had taken place. This Agreement shall be binding upon and inure to the benefit of the Company and any successor to the Company, including without limitation any persons acquiring directly or indirectly all or substantially all of the business and/or assets of the Company whether by purchase, merger, consolidation, reorganization or otherwise (and such successor shall thereafter be deemed the "Company" for the purposes of this Agreement), but shall not otherwise be assignable, transferable or delegable by the Company. 14 15 (b) This Agreement shall inure to the benefit of and be enforceable by the Executive's personal or legal representatives, executors, administrators, successors, heirs, distributees and/or legatees. (c) This Agreement is personal in nature and neither of the parties hereto shall, without the consent of the other, assign, transfer or delegate this Agreement or any rights or obligations hereunder except as expressly provided in Section 11(a) hereof. Without limiting the generality of the foregoing, the Executive's right to receive payments hereunder shall not be assignable, transferable or delegable, whether by pledge, creation of a security interest or otherwise, other than by a transfer by his will or by the laws of descent and distribution and, in the event of any attempted assignment or transfer contrary to this Section 11(c), the Company shall have no liability to pay any amount so attempted to be assigned, transferred or delegated. (d) The Company and the Executive recognize that each party will have no adequate remedy at law for breach by the other of any of the agreements contained herein and, in the event of any such breach, the Company and the Executive hereby agree and consent that the other shall be entitled to a decree of specific performance mandamus or other appropriate remedy to enforce performance of this Agreement. 12. NOTICE: For all purposes of this Agreement, all communications including without limitation notices, consents, requests or approvals, provided for herein shall be in writing and shall be deemed to have been duly given when delivered, or five (5) business days after having been mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed to the Company (to the attention of the Secretary of the Company) at its principal executive office and to the Executive at his principal residence, or to such other address as any party may have furnished to the other in writing and in accordance herewith, except that notices of change of address shall be effective only upon receipt. 13. GOVERNING LAW: The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Ohio, without giving effect to the principles of conflict of laws of such State. 14. VALIDITY: If any provision of this Agreement or the application of any provision hereof to any person or circumstances is held invalid, unenforceable or otherwise illegal, the remainder of this Agreement and the application of such provision to any other person or circumstances shall not be affected, and the provision so held to be invalid, unenforceable or otherwise illegal shall be reformed to the extent (and only to the extent) necessary to make it enforceable, valid and legal. 15 16 15. MISCELLANEOUS: No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by the Executive and the Company. No waiver by either party hereto at any time of any breach by the other party hereto or compliance with any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, expressed or implied with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement. 16. COUNTERPARTS: This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same agreement. 17. PRIOR AGREEMENT: This Agreement supersedes the Prior Agreement(s), which Prior Agreement(s) shall, without further action, be terminated and superseded as of the date hereof. IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the date first above written. THE LAMSON & SESSIONS CO. By --------------------------------- Senior Executive Officer --------------------------------- [EXECUTIVE] 16 EX-10.C 3 EXHIBIT 10(C) 1 Exhibit 10(c) EXECUTIVE CHANGE-IN-CONTROL AGREEMENT ------------------------------------- This EXECUTIVE CHANGE-IN-CONTROL AGREEMENT ("Agreement"), dated as of January 1, 2000, by and between The Lamson & Sessions Co., an Ohio corporation (the "Company"), and [INSERT NAME OF EXECUTIVE] (the "Executive"); WITNESSETH: ---------- WHEREAS, the Executive is a senior executive of the Company and has made and is expected to continue to make major contributions to the profitability, growth and financial strength of the Company; WHEREAS, the Company recognizes that, as is the case for most publicly held companies, the possibility of a Change in Control (as that term is hereafter defined) exists; WHEREAS, the Company desires to assure itself of both present and future continuity of management in the event of a Change in Control and desires to establish certain minimum compensation rights of its key senior executive officers, including the Executive, applicable in the event of a Change in Control; WHEREAS, the Company wishes to ensure that its senior executives are not practically disabled from discharging their duties upon a Change in Control; WHEREAS, this Agreement is not intended to alter materially the compensation and benefits which the Executive could reasonably expect to receive from the Company absent a Change in Control and, accordingly, although effective and binding as of the date hereof, this Agreement shall become operative only upon the occurrence of a Change in Control; WHEREAS, the Executive is willing to render services to the Company on the terms and subject to the conditions set forth in this Agreement; and WHEREAS, this Agreement amends and restates the Employment Agreement(s) dated as of [DATE OF ORIGINAL AGREEMENT] (the "Prior Agreement(s)") between the Company and the Executive, which Prior Agreements will, without further action, be superseded as of the date first above written. NOW, THEREFORE, the Company and the Executive agree as follows: 2 1. OPERATION OF AGREEMENT: (a) This Agreement shall be effective and binding immediately upon its execution, but, anything in this Agreement to the contrary notwithstanding, this Agreement shall not become operative unless and until there shall have occurred a Change in Control. For purposes of this Agreement, a "Change in Control" shall have occurred if at any time during the Term (as that term is hereafter defined) any of the following events shall occur: (i) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities and Exchange Act of 1934, as amended (the "Exchange Act") (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 15% or more of either: (A) the then-outstanding shares of common stock of the Company (the "Company Common Stock") or (B) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors ("Voting Stock"); PROVIDED, HOWEVER, that for purposes of this subsection (i), the following acquisitions shall not constitute a Change in Control: (1) any acquisition directly from the Company, (2) any acquisition by the Company, (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary of the Company, or (4) any acquisition by any Person pursuant to a transaction which complies with clauses (A), (B) and (C) of subsection (iii) of this Section 1(a); or (ii) Individuals who, as of the date hereof, constitute the Board of Directors of the Company, (the "Incumbent Board") cease for any reason (other than death or disability) to constitute at least a majority of the Board of Directors of the Company; PROVIDED, HOWEVER, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without objection to such nomination) shall be considered as though such individual were a member of the Incumbent Board, but excluding for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest (within the meaning of Rule 14a-11 of the Exchange Act) with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board of Directors of the Company; or (iii) Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a "Business Combination"), in each case, unless, following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Company Common Stock and Voting Stock immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then-outstanding shares of common stock and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through 2 3 one or more subsidiaries) in substantially the same proportions relative to each other as their ownership, immediately prior to such Business Combination, of the Company Common Stock and Voting Stock of the Company, as the case may be, (B) no Person (excluding any entity resulting from such Business Combination or any employee benefit plan (or related trust) sponsored or maintained by the Company or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, 15% or more of, respectively, the then-outstanding shares of common stock of the entity resulting from such Business Combination, or the combined voting power of the then-outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (C) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board of Directors of the Company, providing for such Business Combination; or (iv) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company. (b) Upon the occurrence of a Change in Control at any time during the Term, this Agreement shall become immediately operative. (c) The period during which this Agreement shall be in effect (the "Term") shall commence as of the date hereof and shall expire as of the later of (i) the close of business on December 31, 2004 or (ii) the expiration of the Period of Employment (as that term is hereafter defined); PROVIDED, HOWEVER, that (A) commencing on January 1, 2001 and each January 1 thereafter prior to the occurrence of a Change in Control, the term of this Agreement shall automatically be extended for an additional year unless, not later than December 30 of the immediately preceding year, the Company or the Executive shall have given notice that it or he, as the case may be, does not wish to have the Term extended, and (B) subject to Section 8 hereof, if, prior to a Change in Control, the Executive ceases for any reason to be an officer of the Company, thereupon the Term shall be deemed to have expired and this Agreement shall immediately terminate and be of no further effect. 2. EMPLOYMENT; PERIOD OF EMPLOYMENT: (a) Subject to the terms and conditions of this Agreement, upon the occurrence of a Change in Control, the Company shall continue the Executive in its employ and the Executive shall remain in the employ of the Company for the period set forth in Section 2(b) hereof (the "Period of Employment"), in the position and with substantially the same duties and responsibilities that he had immediately prior to the Change in Control, or to which the Company and the Executive may hereafter mutually agree in writing. Throughout the Period of Employment, the Executive shall devote substantially all of his time during normal business hours (subject to vacations, sick leave and other absences in accordance with the policies of the Company as in effect for senior executives immediately prior to the Change in Control) to the business and affairs of the Company, but nothing in this Agreement shall preclude the Executive from devoting reasonable periods of time during normal business hours to (i) serving as a director, trustee or member of or participant in any organization or business, (ii) engaging in charitable and community activities, or (iii) managing his personal investments. 3 4 (b) The Period of Employment shall commence on the date of an occurrence of a Change in Control and, subject only to the provisions of Section 4 hereof, shall continue until the earlier of (i) the expiration of the second anniversary of the occurrence of the Change in Control, (ii) the Executive's death, or (iii) the Executive's attainment of age 65; PROVIDED, HOWEVER, that commencing on each anniversary of the Change of Control, the expiration of the Period of Employment provided for under clause (i) of this Section 2(b) shall automatically be extended for an additional year unless, not later than 90 calendar days prior to such anniversary date, either the Company or the Executive shall have given written notice to the other that the Period of Employment shall not be so extended. 3. COMPENSATION DURING PERIOD OF EMPLOYMENT: (a) Upon the occurrence of a Change in Control, the Executive shall receive during the Period of Employment (i) annual base salary at a rate not less than the Executive's annual fixed or base compensation (payable monthly or otherwise as in effect for senior executives of the Company immediately prior to the occurrence of a Change in Control) or such higher rate as may be determined from time to time by the Board of Directors of the Company (the "Board") or the Compensation Committee thereof (the "Committee") (which base salary at such rate is herein referred to as "Base Pay") and (ii) an annual amount equal to not less than the average of the aggregate annual bonus, incentive or other payments of cash compensation in addition to the amounts referred to in clause (i) above made or to be made in regard to services rendered in any calendar year during the period of two calendar years immediately preceding the year in which the Change in Control occurred pursuant to any bonus, incentive, profit sharing, performance, discretionary pay or similar policy, plan, program or arrangement of the Company or any successor thereto providing benefits at least as great as the benefits payable thereunder prior to a Change in Control ("Incentive Pay"); PROVIDED, HOWEVER, that with the prior written consent of the Executive, nothing herein shall preclude a change in the mix between Base Pay and Incentive Pay so long as the aggregate cash compensation received by the Executive in any one calendar year is not reduced in connection therewith or as a result thereof; and PROVIDED FURTHER, HOWEVER, that in no event shall any increase in the Executive's aggregate cash compensation or any portion thereof in any way diminish any other obligation of the Company under this Agreement. (b) For his service pursuant to Section 2(a) hereof, during the Period of Employment the Executive shall be a full participant in, and shall be entitled to the perquisites, benefits and service credit for benefits as provided under, any and all employee retirement income and welfare benefit and other fringe benefit policies, plans, programs or arrangements in which senior executives of the Company participate, including without limitation any stock option, stock purchase, stock appreciation, savings, pension, supplemental executive retirement or/ other retirement income or welfare benefit (within the meaning of Section 3(1) of the Employee Retirement Income Act of 1974, as amended), deferred compensation, incentive compensation, group and/or executive life, health, medical/hospital or other insurance (whether funded by actual insurance or self-insured by the Company), disability, salary continuation, expense reimbursement (including automobile allowances and reimbursement of club dues and financial planning fees) and other employee benefit policies, plans, programs or arrangements that may now exist or any equivalent successor policies, plans, programs or arrangements that may be 4 5 adopted hereafter by the Company providing perquisites, benefits and service credit for benefits at least as great as are payable thereunder prior to a Change in Control (collectively, "Employee Benefits"); PROVIDED, HOWEVER, that the Executive's rights thereunder shall be governed by the terms thereof and shall not be enlarged hereunder or otherwise affected hereby. Subject to the proviso in the immediately preceding sentence, if and to the extent that the Company determines, in the exercise of its reasonable judgment after consultation with nationally recognized legal counsel, that any perquisite, benefit or service credit for benefits is not or cannot be paid or provided under any such policy, plan, program or arrangement as a result of the amendment or termination thereof, then the Company shall itself pay or provide therefor. Nothing in this Agreement shall preclude improvement or enhancement of any such Employee Benefits, provided that no such improvement shall in any way diminish any other obligation of the Company under this Agreement. (c) The Company has determined that the amounts payable pursuant to this Section 3 constitute reasonable compensation for services to be rendered during the Period of Employment. 4. TERMINATION FOLLOWING A CHANGE IN CONTROL: (a) In the event of the occurrence of a Change in Control, the Executive's employment may be terminated by the Company during the Period of Employment and the Executive shall not be entitled to the benefits provided by Section 5 hereof only upon the occurrence of one or more of the following events: (i) The Executive's death; (ii) If the Executive shall become permanently disabled within the meaning of, and begins actually to receive disability benefits pursuant to, the long-term disability plan in effect for senior executives of the Company immediately prior to the Change in Control; or (iii) For "Cause", which for purposes of this Agreement shall mean that, prior to any termination pursuant to Section 4(b) hereof, the Executive shall have committed: (A) an intentional act of fraud, embezzlement or theft in connection with his duties or in the course of his employment with the Company; (B) intentional wrongful damage to property of the Company; or (C) intentional wrongful disclosure of secret processes or confidential information of the Company; and any such act shall have been materially harmful to the Company. For purposes of this Agreement, no act, or failure to act, on the part of the Executive shall be deemed "intentional" if it was due primarily to an error in judgment or negligence, but shall be deemed "intentional" only if done, or omitted to be done, by the Executive not in good faith and without reasonable belief that his action or omission was in the best interest of 5 6 the Company. Notwithstanding the foregoing, the Executive shall not be deemed to have been terminated for "Cause" hereunder unless and until there shall have been delivered to the Executive a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the Board then in office at a meeting of the Board called and held for such purpose (after reasonable notice to the Executive and an opportunity for the Executive, together with his counsel, to be heard before the Board), finding that, in the good faith opinion of the Board, the Executive had committed an act set forth above in this Section 4(a)(iii) and specifying the particulars thereof in detail. Nothing herein shall limit the right of the Executive or his beneficiaries to contest the validity or propriety of any such determination. (b) In the event of the occurrence of a Change in Control, during the Period of Employment, the Executive shall be entitled to the benefits as provided in Section 5 hereof upon the occurrence of one or more of the following events: (i) Any termination by the Company of the employment of the Executive prior to the date upon which the Executive shall have attained age 65, which termination shall be for any reason other than for Cause or as a result of the death of the Executive or by reason of the Executive's disability and the actual receipt of disability benefits in accordance with Section 4(a)(ii) hereof; or (ii) Termination by the Executive of his employment with the Company upon the occurrence of any of the following events: (A) Failure to elect, re-elect or otherwise maintain the Executive in the office or position in the Company which the Executive held immediately prior to a Change in Control, or the removal of the Executive as a Director of the Company (or any successor thereto) if the Executive shall have been a Director of the Company immediately prior to the Change in Control; (B) A significant adverse change in the nature or scope of the authorities, powers, functions, responsibilities or duties attached to the position with the Company which the Executive held immediately prior to the Change in Control, any reduction in the aggregate of the Executive's Base Pay and Incentive Pay received from the Company, or the termination of the Executive's rights to any Employee Benefits to which he was entitled immediately prior to the Change in Control or a reduction in scope or value thereof without the prior written consent of the Executive, any of which is not remedied within ten (10) calendar days after receipt by the Company of written notice from the Executive of such change, reduction or termination, as the case may be; (C) A determination by the Executive made in good faith that as a result of a Change in Control and a change in circumstances thereafter significantly affecting his position, including without limitation a change in the scope of the business or other activities for which he was responsible immediately prior to the Change in Control, he has been rendered substantially unable to carry out, has 6 7 been substantially hindered in the performance of, or has suffered a substantial reduction in, any of the authorities, powers, functions, responsibilities or duties attached to the position held by the Executive immediately prior to the Change in Control, which situation is not remedied within ten (10) calendar days after written notice to the Company from the Executive of such determination; (D) The liquidation, dissolution, merger, consolidation or reorganization of the Company or transfer of all or a significant portion of its business and/or assets, unless the successor or successors (by liquidation, merger, consolidation, reorganization or otherwise) to which all or a significant portion of its business and/or assets have been transferred (directly or by operation of law) shall have assumed all duties and obligations of the Company under this Agreement pursuant to Section 11 hereof; (E) The Company shall relocate its principal executive offices, or require the Executive to have his principal location of work changed, to any location which is in excess of fifty (50) miles from the location thereof immediately prior to the Change of Control or the Company shall require the Executive to travel away from his office in the course of discharging his responsibilities or duties hereunder significantly more (in terms of either consecutive days or aggregate days in any calendar year) than was required of him prior to the Change of Control without, in either case, his prior written consent; or (F) Without limiting the generality or effect of the foregoing, any material breach of this Agreement by the Company or any successor thereto. (c) A termination by the Company pursuant to Section 4(a) hereof or by the Executive pursuant to Section 4(b) hereof shall not affect any rights which the Executive may have pursuant to any agreement, policy, plan, program or arrangement of the Company providing Employee Benefits, which rights shall be governed by the terms thereof. If this Agreement or the employment of the Executive is terminated under circumstances in which the Executive is not entitled to any payments under Sections 3 or 5 hereof, the Executive shall have no further obligation or liability to the Company hereunder with respect to his prior or any future employment by the Company. 5. SEVERANCE COMPENSATION: (a) If, following the occurrence of a Change in Control, the Company shall terminate the Executive's employment during the Period of Employment other than pursuant to Section 4(a) hereof, or if the Executive shall terminate his employment pursuant to Section 4(b) hereof, the Company shall pay to the Executive the amounts specified in this Section 5(a) and, if required to be paid in a lump sum, the Company shall pay such amounts within five (5) business days after the date (the "Termination Date") that the Executive's employment is terminated (the effective date of which shall be the date of termination or such other date that may be specified by the Executive if the termination is pursuant to Section 4(b) hereof): 7 8 (i) In lieu of any further payments to the Executive for periods subsequent to the Termination Date, the Company shall pay to the Executive, a lump sum payment in an amount equal to the present value (using a discount rate equal to the then-applicable interest rate prescribed by the Pension Benefit Guarantee Corporation for benefit valuations in connection with non-multiemployer pension plan terminations assuming the immediate commencement of benefit payments (the "Discount Rate")) of the sum of (A) the aggregate Base Pay (at the greater of the highest rate in effect either immediately preceding the occurrence of the Change in Control or during the Period of Employment) for each remaining year or partial year of the Period of Employment which the Executive would have received had such termination or breach not occurred, plus (B) the aggregate Incentive Pay (calculated in accordance with the provisions of Section 3(a) hereof), which the Executive would have received pursuant to this Agreement during the remainder of the Period of Employment had his employment continued for the remainder of the Period of Employment. (ii) For the remainder of the Period of Employment the Company shall arrange to provide the Executive with Employee Benefits (other than (A) the retirement income, supplemental executive retirement and other benefits described in (iii) below, (B) the Company's matching contributions under the 401(k) Plan described in (iv) below and (C) stock option, stock purchase, stock appreciation and similar compensatory benefits) substantially similar to those which the Executive was receiving or entitled to receive immediately prior to the Termination Date (and if and to the extent the Company determines in the exercise of its reasonable judgment after consultation with nationally recognized legal counsel, that such benefits shall not or cannot be paid or provided under any policy, plan, program or arrangement of the Company, then the Company shall itself pay or provide for the payment to the Executive, his dependents and beneficiaries, such Employee Benefits); PROVIDED, HOWEVER, that any such payment by the Company that is less beneficial to the Executive or the Executive's beneficiaries and dependents from a tax perspective shall be increased appropriately to reflect the loss to the Executive or the Executive's dependents and beneficiaries. Without otherwise limiting the purposes or effect of Section 6 hereof, Employee Benefits payable to the Executive pursuant to this Section 5(a)(ii) by reason of any "welfare benefit plan" of the Company (as the term "welfare benefit plan" is defined in Section 3(1) of the Employee Retirement Income Act of 1974, as amended) shall be reduced to the extent comparable welfare benefits are actually received by the Executive from another employer during such period following the Executive's Termination Date until the expiration of the Period of Employment. (iii) In addition to the retirement income, supplemental executive retirement, and other benefits to which the Executive is entitled under the Company's Retirement Plans, the Executive will be entitled to a lump sum payment in an amount equal to the actuarial equivalent (using the Discount Rate and the applicable mortality table under Section 417(e)(3) of the Internal Revenue Code of 1986, as amended (the "Code")) of the excess of (A) the retirement pension benefits that would be payable to the Executive under the Retirement Plans if (x) the Executive continued to be employed through the end of the Period of Employment given the Executive's Base Pay and Incentive Pay 8 9 (without regard to any amendment to the Retirement Plans made subsequent to a Change in Control which adversely affects in any manner the computation of retirement benefits thereunder) for the calendar year in which the Executive's employment is terminated (or, if higher, for the calendar year immediately prior to the Change in Control) and (y) provided that the Executive is a party to an Amended and Restated Supplemental Retirement Agreement (a "SERP"), the fraction set forth in Section 2.2(a)(ii) of his SERP is equal to one, over (B) the retirement pension benefits that the Executive is entitled to receive (either immediately or on a deferred basis) under the Retirement Plans. For purposes of this subsection (iii), "Retirement Plans" means the pension, retirement income, supplemental employee or executive retirement, excess benefits and life and similar benefit plans in which the Executive participates at the time of a Change in Control providing retirement perquisites, benefits and service credit for benefits. (iv) The Company shall pay to the Executive (A) the amount of the matching contributions that would have been made to The Lamson & Sessions Co. Deferred Savings Plan (the "401(k) Plan") by the Company and allocated to the Executive's account thereunder as of the end of the Period of Employment if the Executive had continued to be employed through the end of the Period of Employment given the Executive's Base Pay and Incentive Pay for the calendar year in which the Executive's employment is terminated (or, if higher, for the year immediately prior to the Change in Control), and assuming the Executive's salary deferral was at the maximum permissible level less (B) the amount of the matching contributions made to the 401(k) Plan by the Company and allocated to the Executive's account thereunder at the Termination Date. (b) There shall be no right of set-off or counterclaim in respect of any claim, debt or obligation against any payment to or benefit for the Executive provided for in this Agreement. (c) Without limiting the rights of the Executive at law or in equity, if the Company fails to make any payment required to be made hereunder on a timely basis, the Company shall pay interest on the amount thereof at an annualized rate of interest equal to the then-applicable Discount Rate. 6. NO MITIGATION OBLIGATION: The Company hereby acknowledges that it will be difficult, and may be impossible, for the Executive to find reasonably comparable employment following the Termination Date. In addition, the Company acknowledges that its severance pay plan applicable in general to its salaried employees does not provide for mitigation, offset or reduction of any severance payment received thereunder. Accordingly, the parties hereto expressly agree that the payment of the severance compensation by the Company to the Executive in accordance with the terms of this Agreement will be liquidated damages, and that the Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise, nor shall any profits, income, earnings or other benefits from any source whatsoever create any mitigation, offset, reduction or any other obligation on the part of the Executive hereunder or otherwise, except as expressly provided in Section 5(a)(ii) hereof. 9 10 7. LEGAL FEES AND EXPENSES: (a) It is the intent of the Company that the Executive not be required to incur the expenses associated with the enforcement of his rights under this Agreement by litigation or other legal action because the cost and expense thereof would substantially detract from the benefits intended to be extended to the Executive hereunder. Accordingly, if it should appear to the Executive that the Company has failed to comply with any of its obligations under this Agreement or in the event that the Company or any other person takes any action to declare this Agreement void or unenforceable, or institutes any litigation designed to deny, or to recover from, the Executive the benefits intended to be provided to the Executive hereunder, the Company irrevocably authorizes the Executive from time to time to retain counsel of' his choice, at the expense of the Company as hereafter provided, to represent the Executive in connection with the initiation or defense of any litigation or other legal action, whether by or against the Company or any Director, officer, stockholder or other person affiliated with the Company, in any jurisdiction. Notwithstanding any existing or prior attorney-client relationship between the Company and such counsel, the Company irrevocably consents to the Executive's entering into an attorney-client relationship with such counsel, and in that connection the Company and the Executive agree that a confidential relationship shall exist between the Executive and such counsel. The Company shall pay or cause to be paid and shall be solely responsible for any and all attorneys' and related fees and expenses incurred by the Executive as a result of the Company's failure to perform this Agreement or any provision hereof or as a result of the Company or any person contesting the validity or enforceability of this Agreement or any provision hereof as aforesaid. (b) To ensure that the provisions of this Agreement can be enforced by the Executive, the Company shall establish certain trust arrangements ("Trusts") with an independent banking association as Trustee ("Trustee"). The Company shall execute and deliver a Trust Agreement ("Trust Agreement") and a Trust Agreement for Attorneys' Fees ("Trust Agreement for Attorneys' Fees") between the Trustee and the Company, and when so executed and delivered each Trust Agreement and Trust Agreement for Attorneys' Fees shall be deemed to be a part of this Agreement and shall set forth the terms and conditions relating to payment from the Trust under the Trust Agreement of compensation and other benefits pursuant to Sections 3 and 5 hereof owed by the Company, and payment from the Trust under the Trust Agreement for Attorneys' Fees of attorneys' and related fees and expenses pursuant to Section 7(a) hereof owed by the Company. The Executive shall first make demand on the Company for any payments due the Executive pursuant to Section 7(a) hereof prior to making demand therefor on the Trustee under the Trust Agreement for Attorneys' Fees. Payments by such Trustee shall discharge the Company's liability under Section 7(a) hereof only to the extent that trust assets are used to satisfy such liability. (c) Upon the occurrence of a Change in Control, the Company shall promptly, to the extent it has not previously done so, and in any event within five (5) business days: (i) transfer to the Trustee to be added to the principal of the Trust under the Trust Agreement a sum equal to the present value on the date of the Change in Control of the payments to be made to the Executive under the provisions of Section 5 hereof; PROVIDED, HOWEVER, that the Company shall not be required to transfer, in the aggregate, to the Trust under the Trust Agreement a sum in excess of the maximum amount 10 11 authorized from time to time by its Directors. Any payments of compensation, supplemental pension or other benefits by the Trustee pursuant to the Trust Agreement shall, to the extent thereof, discharge the Company's obligation to pay compensation, supplemental pension and other benefits hereunder, it being the intent of the Company that assets in such Trust be held as security for the Company's obligation to pay compensation, supplemental pension and other benefits under this Agreement; and (ii) transfer to the Trustee to be added to the principal of the Trust under the Trust Agreement for Attorneys' Fees the sum of TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000), it being the intent of the Company that assets in such Trust be held as security for the Company's obligation under Section 7(a) hereof. The Executive understands and acknowledges that the entire corpus of the Trust under the Trust Agreement for Attorneys' Fees will be $250,000 and that said amount will be available to discharge not only the obligations of the Company to the Executive under Section 7(a) hereof, but also similar obligations of the Company to other executives under similar provisions. 8. EMPLOYMENT RIGHTS: Nothing expressed or implied in this Agreement shall create any right or duty on the part of the Company or the Executive to have the Executive remain in the employment of the Company prior to any Change in Control; PROVIDED, HOWEVER, that any termination of employment of the Executive or the removal of the Executive from the office or position in the Company (as a result of a pending Change in Control) following the commencement of any discussion with a third person that ultimately results in a Change in Control shall be deemed to be a termination or removal of the Executive after a Change in Control for purposes of this Agreement. 9. WITHHOLDING OF TAXES: The Company may withhold from any amounts payable under this Agreement all federal, state, city or other taxes as shall be required pursuant to any law or government regulation or ruling. 10. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY: (a) Anything in this Agreement to the contrary notwithstanding, in the event that this Agreement shall become operative and it shall be determined (as hereafter provided) that any payment or distribution by the Company or any of its affiliates to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise pursuant to or by reason of any other agreement, policy, plan, program or arrangement, including without limitation any stock option, performance share, performance unit, stock appreciation right or similar right, or the lapse or termination of any restriction on or the vesting or exercisability of any of the foregoing (a "Payment"), would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code") (or any successor provision thereto) by reason of being considered "contingent on a change in ownership or control" of the Company, within the meaning of Section 280G of the Code (or any 11 12 successor provision thereto) or to any similar tax imposed by state or local law, or any interest or penalties with respect to such tax (such tax or taxes, together with any such interest and penalties, being hereafter collectively referred to as the "Excise Tax"), then the Executive will be entitled to receive an additional payment or payments (collectively, a "Gross-Up Payment"); PROVIDED, HOWEVER, that no Gross-Up Payment shall be made with respect to the Excise Tax, if any, attributable to (i) any incentive stock option, as defined by Section 422 of the Code ("ISO") granted prior to the execution of this Agreement, or (ii) any stock appreciation or similar right, whether or not limited, granted in tandem with any ISO described in clause (i). The Gross-Up Payment will be in an amount such that, after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including any Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed on the Payment. (b) Subject to the provisions of Section 10(f), all determinations required to be made under this Section 10, including whether an Excise Tax is payable by the Executive and the amount of such Excise Tax and whether a Gross-Up Payment is required to be paid by the Company to the Executive and the amount of such Gross-Up Payment, if any, will be made by a nationally recognized accounting firm (the "Accounting Firm") selected by the Executive in his sole discretion. The Executive will direct the Accounting Firm to submit its determination and detailed supporting calculations to both the Company and the Executive within thirty (30) calendar days after the Termination Date, if applicable, and any such other time or times as may be requested by the Company or the Executive. If the Accounting Firm determines that any Excise Tax is payable by the Executive, the Company will pay the required Gross-Up Payment to the Executive within five (5) business days after receipt of such determination and calculations with respect to any Gross-Up Payment to the Executive. If the Accounting Firm determines that no Excise Tax is payable by the Executive, it will, at the same time as it makes such determination, furnish the Company and the Executive an opinion that the Executive has substantial authority not to report any Excise Tax on his federal, state or local income or other tax return. As a result of the uncertainty in the application of Section 4999 of the Code (or any successor provision thereto) and the possibility of similar uncertainty regarding applicable state or local tax law at the time of any determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made (an "Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts or fails to pursue its remedies pursuant to Section 10(f) and the Executive thereafter is required to make a payment of any Excise Tax, the Executive will direct the Accounting Firm to determine the amount of the Underpayment that has occurred and to submit its determination and detailed supporting calculations to both the Company and the Executive as promptly as possible. Any such Underpayment will be promptly paid by the Company to, or for the benefit of, the Executive within five (5) business days after receipt of such determination and calculations. (c) The Company and the Executive will each provide the Accounting Firm access to and copies of any books, records and documents in the possession of the Company or the Executive, as the case may be, reasonably requested by the Accounting Firm, and otherwise cooperate with the Accounting Firm in connection with the preparation and issuance of the determinations and calculations contemplated by Section 10(b). Any determination by the Accounting Firm as to the amount of the Gross-Up Payment will be final and binding upon the Company and the Executive. 12 13 (d) The federal, state and local income or other tax returns filed by the Executive will be prepared and filed on a consistent basis with the determination of the Accounting Firm with respect to the Excise Tax payable by the Executive. The Executive will make proper payment of the amount of any Excise Payment, and at the request of the Company, provide to the Company true and correct copies (with any amendments) of his federal income tax return as filed with the Internal Revenue Service and corresponding state and local tax returns, if relevant, as filed with the applicable taxing authority, and such other documents reasonably requested by the Company, evidencing such payment. If prior to the filing of the Executive's federal income tax return, or corresponding state or local tax return, if relevant, the Accounting Firm determines that the amount of the Gross-Up Payment should be reduced, the Executive will within five (5) business days pay to the Company the amount of such reduction. (e) The fees and expenses of the Accounting Firm for its services in connection with the determinations and calculations contemplated by Section 10(b) will be borne by the Company. If such fees and expenses are initially paid by the Executive, the Company will reimburse the Executive the full amount of such fees and expenses within five (5) business days after receipt from the Executive of a statement therefor and reasonable evidence of his payment thereof. (f) The Executive will notify the Company in writing of any claim by the Internal Revenue Service or any other taxing authority that, if successful, would require the payment by the Company of a Gross-Up Payment. The Executive will not pay such claim prior to the earlier of (i) the expiration of the 30-calendar-day period following the date on which he gives such notice to the Company and (ii) the date that any payment of amount with respect to such claim is due. If the Company notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive will: (i) provide the Company with any written records or documents in his possession relating to such claim reasonably requested by the Company; (ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including without limitation accepting legal representation with respect to such claim by an attorney competent in respect of the subject matter and reasonably selected by the Company; (iii) cooperate with the Company in good faith in order effectively to contest such claim; and (iv) permit the Company to participate in any proceedings relating to such claim; PROVIDED, HOWEVER, that the Company will bear and pay directly all costs and expenses (including interest and penalties) incurred in connection with such contest and will indemnify and hold harmless the Executive, on an after-tax basis, for and against any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses. Without limiting the foregoing provisions of this Section 13 14 10(f), the Company will control all proceedings taken in connection with the contest of any claim contemplated by this Section 10(f) and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim (PROVIDED, HOWEVER, that the Executive may participate therein at his own cost and expense) and may, at its option, either direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; PROVIDED, HOWEVER, that if the Company directs the Executive to pay the tax claimed and sue for a refund, the Company will advance the amount of such payment to the Executive on an interest-free basis and will indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or income or other tax, including interest or penalties with respect thereto, imposed with respect to such advance; and PROVIDED FURTHER, HOWEVER, that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which the contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of any such contested claim will be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Executive will be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority. (g) If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 10(f), the Executive receives any refund with respect to such claim, the Executive will (subject to the Company's complying with the requirements of Section 10(f)) promptly pay to the Company the amount of such refund, less all out-of-pocket costs and expenses related thereto (together with any interest paid or credited thereon after any taxes applicable thereto). If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 10(f), a determination is made that the Executive will not be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such denial or refund prior to the expiration of thirty (30) calendar days after such determination, then such advance will be forgiven and will not be required to be repaid and the amount of any such advance will offset, to the extent thereof, the amount of Gross-Up Payment required to be paid by the Company to the Executive pursuant to this Section 10. 11. SUCCESSORS AND BINDING AGREEMENT: (a) The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business and/or assets of the Company, by agreement in form and substance satisfactory to the Executive, expressly to assume and agree to perform this Agreement in the same manner and to the same extent the Company would be required to perform if no such succession had taken place. This Agreement shall be binding upon and inure to the benefit of the Company and any successor to the Company, including without limitation any persons acquiring directly or indirectly all or substantially all of the business and/or assets of the Company whether by purchase, merger, consolidation, reorganization or otherwise (and such successor shall thereafter be deemed the "Company" for the purposes of this Agreement), but shall not otherwise be assignable, transferable or delegable by the Company. 14 15 (b) This Agreement shall inure to the benefit of and be enforceable by the Executive's personal or legal representatives, executors, administrators, successors, heirs, distributees and/or legatees. (c) This Agreement is personal in nature and neither of the parties hereto shall, without the consent of the other, assign, transfer or delegate this Agreement or any rights or obligations hereunder except as expressly provided in Section 11(a) hereof. Without limiting the generality of the foregoing, the Executive's right to receive payments hereunder shall not be assignable, transferable or delegable, whether by pledge, creation of a security interest or otherwise, other than by a transfer by his will or by the laws of descent and distribution and, in the event of any attempted assignment or transfer contrary to this Section 11(c), the Company shall have no liability to pay any amount so attempted to be assigned, transferred or delegated. (d) The Company and the Executive recognize that each party will have no adequate remedy at law for breach by the other of any of the agreements contained herein and, in the event of any such breach, the Company and the Executive hereby agree and consent that the other shall be entitled to a decree of specific performance mandamus or other appropriate remedy to enforce performance of this Agreement. 12. NOTICE: For all purposes of this Agreement, all communications including without limitation notices, consents, requests or approvals, provided for herein shall be in writing and shall be deemed to have been duly given when delivered, or five (5) business days after having been mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed to the Company (to the attention of the Secretary of the Company) at its principal executive office and to the Executive at his principal residence, or to such other address as any party may have furnished to the other in writing and in accordance herewith, except that notices of change of address shall be effective only upon receipt. 13. GOVERNING LAW: The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Ohio, without giving effect to the principles of conflict of laws of such State. 14. VALIDITY: If any provision of this Agreement or the application of any provision hereof to any person or circumstances is held invalid, unenforceable or otherwise illegal, the remainder of this Agreement and the application of such provision to any other person or circumstances shall not be affected, and the provision so held to be invalid, unenforceable or otherwise illegal shall be reformed to the extent (and only to the extent) necessary to make it enforceable, valid and legal. 15 16 15. MISCELLANEOUS: No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by the Executive and the Company. No waiver by either party hereto at any time of any breach by the other party hereto or compliance with any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, expressed or implied with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement. 16. COUNTERPARTS: This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same agreement. 17. PRIOR AGREEMENT: This Agreement supersedes the Prior Agreement(s), which Prior Agreement(s) shall, without further action, be terminated and superseded as of the date hereof. IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the date first above written. THE LAMSON & SESSIONS CO. By -------------------------------------- Senior Executive Officer -------------------------------------- [EXECUTIVE] 16 EX-10.AH 4 EXHIBIT 10(AH) 1 Exhibit 10(ah) AMENDMENT NO. 9 Dated as of February 7, 2000 THIS AMENDMENT NO. 9 ("Amendment") is entered into as of February 7, 2000 by and among THE LAMSON & SESSIONS CO., an Ohio corporation (the "Borrower"), GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation ("GE Capital"), as the sole "Lender" (as defined in the Loan Agreement referred to below) and GE Capital as agent for the Lenders (in such capacity, the "Agent"). PRELIMINARY STATEMENT A. The Borrower, the Lender and the Agent are parties to that certain Loan Agreement dated as of February 13, 1992, as amended and restated as of July 14, 1995 (as amended from time to time, the "Loan Agreement"). Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Loan Agreement. B. The Borrower, the Lender and the Agent have agreed to amend the Loan Agreement on the terms and conditions hereinafter set forth. NOW, THEREFORE, in consideration of the premises set forth above, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower, the Lender and the Agent hereby agree as follows: SECTION 1. AMENDMENT TO THE LOAN AGREEMENT. Effective as of the date hereof, subject to the satisfaction of the conditions precedent set forth in SECTION 2 below, the Loan Agreement is hereby amended as follows: 1.01. The definition of "Commitment Termination Date" in SECTION 1.1 of the Loan Agreement is amended by deleting "December 31, 2000" in clause (i) and substituting "June 30, 2001" therefor. 1.02. SECTION 2.2(b) of the Loan Agreement is amended and restated in its entirety as follows: (b) The aggregate principal amount of the Term Loan shall be payable in six (6) quarterly installments, on the last Business Day of each calendar quarter, commencing on March 31, 2000 and with a final payment on June 30, 2001. The first five (5) installments shall be in the amount of $750,000 each, and the final installment shall be in the amount of $4,500,000; PROVIDED, HOWEVER, that in any event the full unpaid principal amount of the Term Loan, together with all accrued interest thereof, shall be due and payable on the Commitment Termination Date. 2 SECTION 2. CONDITIONS PRECEDENT. This Amendment shall become effective and be deemed effective as of the date first above written upon the Agent's having received the following: (i) four (4) copies of this Amendment duly executed by the Borrower, the Lender and the Agent; (ii) Reaffirmation of Guaranty and Security Agreement in substantially the form of EXHIBIT A attached hereto, duly executed by Carlon Chimes Co.; (iii) Reaffirmation of Guaranty and Security Agreement in substantially the form of EXHIBIT B attached hereto, duly executed by Dimango Products Corporation; and (iv) a fee of $50,000 for the benefit of the Lender in consideration for the execution of this Amendment, of which $25,000 shall be applied to the closing fees owed by the Borrower upon the closing of the amendment and restatement of the Loan Agreement, provided that GE Capital is the agent and the lender thereunder. SECTION 3. COVENANTS, REPRESENTATIONS AND WARRANTIES OF THE BORROWER. 3.1 Except to the extent that any representation or warranty expressly is made only with respect to an earlier date, upon the effectiveness of this Amendment, the Borrower hereby reaffirms all covenants, representations and warranties made by it in the Loan Agreement to the extent the same are not amended hereby and agrees that all such covenants, representations and warranties shall be deemed to have been re-made as of the effective date of this Amendment. 3.2 The Borrower hereby represents and warrants that this Amendment constitutes the legal, valid and binding obligation of the Borrower enforceable against the Borrower in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and general principles of equity which may limit the availability of equitable remedies. SECTION 4. REFERENCE TO AND EFFECT ON THE LOAN AGREEMENT. 4.1 Upon the effectiveness of this Amendment, each reference in the Loan Agreement to "this Agreement," "hereunder," "hereof," "herein," "hereby" or words of like import shall mean and be a reference to the Loan Agreement as amended hereby, and each reference to the Loan Agreement in any other document, instrument or agreement executed and/or delivered in connection with the Loan Agreement shall mean and be a reference to the Loan Agreement as amended hereby. 4.2 Except as specifically amended hereby, the Loan Agreement and other documents, instruments and agreements executed and/or delivered in connection therewith shall remain in full force and effect and are hereby ratified and confirmed. 4.3 The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of any Lender or the Agent under the Loan Agreement or any of the other Loan Documents, nor constitute a waiver of any provision contained therein, except as specifically set forth herein. -2- 3 SECTION 5. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF LAW PROVISIONS) AND DECISIONS OF THE STATE OF ILLINOIS. SECTION 6. EXECUTION IN COUNTERPARTS. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute but one and the same instrument. SECTION 7. HEADINGS. Section headings in this Amendment are included herein for convenience or reference only and shall not constitute a part of this Amendment for any other purpose. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereto duly authorized as of the date first written above. THE LAMSON & SESSIONS CO. By: /s/ James J. Abel -------------------- Name: James J. Abel Title: Executive Vice President and Chief Financial Officer GENERAL ELECTRIC CAPITAL CORPORATION, as the Agent and as the sole Lender By: /s/ Geoffrey K. Hall ----------------------- Name: Geoffrey K. Hall Title: Duly Authorized Signature -3- 4 EXHIBIT A to Amendment Form of Reaffirmation of Guaranty and SECURITY AGREEMENT FOR CARLON CHIMES CO. (Attached.) -4- 5 REAFFIRMATION OF GUARANTY AND SECURITY AGREEMENT The undersigned hereby (i) acknowledges receipt of that certain Amendment No. 9 of even date herewith (the "Amendment") to the Loan Agreement dated as of February 13, 1992, as amended and restated as of July 14, 1995 (as amended from time to time prior to the date hereof, the "Loan Agreement") among THE LAMSON & SESSIONS CO. (the "Borrower"), GENERAL ELECTRIC CAPITAL CORPORATION ("GE Capital"), as a "Lender" (as defined in the Loan Agreement) and GE Capital, as agent for the Lenders (in such capacity, the "Agent"), (ii) reaffirms all of its obligations under that certain Guaranty and Security Agreement dated as of February 13, 1992, as amended from time to time, ("Guaranty and Security Agreement"), made by the undersigned in favor of the Lenders, and (iii) acknowledges and agrees that such Guaranty and Security Agreement remains in full force and effect notwithstanding the Amendment, and that such Guaranty and Security Agreement is hereby ratified and confirmed. Date: February 7, 2000 CARLON CHIMES CO. By: /s/ James J. Abel ------------------ Name: James J. Abel Title: Vice President, Secretary and Treasurer 6 EXHIBIT B to Amendment Form of Reaffirmation of Guaranty AND SECURITY AGREEMENT FOR DIMANGO PRODUCTS CORPORATION (Attached.) 7 REAFFIRMATION OF GUARANTY AND SECURITY AGREEMENT The undersigned hereby (i) acknowledges receipt of that certain Amendment No. 9 of even date herewith (the "Amendment") to the Loan Agreement dated as of February 13, 1992, as amended and restated as of July 14, 1995 (as amended from time to time prior to the date hereof, the "Loan Agreement") among THE LAMSON & SESSIONS CO. (the "Borrower"), GENERAL ELECTRIC CAPITAL CORPORATION ("GE Capital"), as a "Lender" (as defined in the Loan Agreement) and GE Capital, as agent for the Lenders (in such capacity, the "Agent"), (ii) reaffirms all of its obligations under that certain Guaranty and Security Agreement dated as of October 25, 1996, as amended from time to time, ("Guaranty and Security Agreement"), made by the undersigned in favor of the Lenders, and (iii) acknowledges and agrees that such Guaranty and Security Agreement remains in full force and effect notwithstanding the Amendment, and that such Guaranty and Security Agreement is hereby ratified and confirmed. Date: February 7, 2000 DIMANGO PRODUCTS CORPORATION By: /s/ James J. Abel ------------------- Name: James J. Abel Title: Secretary EX-10.AK 5 EXHIBIT 10(AK) 1 Exhibit (ak) FIRST AMENDMENT TO THE LAMSON & SESSIONS CO. AMENDED AND RESTATED SUPPLEMENTAL RETIREMENT AGREEMENT This First Amendment to the Amended and Restated Supplemental Retirement Agreement (this "Amendment"), effective as of January 1, 2000 is made by THE LAMSON & SESSIONS CO., an Ohio corporation (the "Company"), in order to amend the Amended and Restated Supplemental Retirement Agreement, dated as of March 20, 1990 (the "Agreement"). NOW THEREFORE, the undersigned hereby amends the Agreement as follows: 1. Section 1.1 of the Agreement is hereby amended and restated to read in its entirety as follows: "1.1 A "Change in Control" shall be deemed to have occurred if any of the following events shall occur: (a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 15% or more of either: (A) the then-outstanding shares of common stock of the Company (the "Company Common Stock") or (B) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors ("Voting Stock"); PROVIDED, HOWEVER, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change in Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary of the Company, or (iv) any acquisition by any Person pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) of this Section 1.2; or (b) Individuals who, as of the date hereof, constitute the Board of Directors of the Company (the "Incumbent Board") cease for any reason (other than death or disability) to constitute at least a majority of the Board of Directors of the Company; PROVIDED, HOWEVER, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without objection to such nomination) shall be considered as though such individual were a member of the Incumbent Board, but excluding for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest (within the meaning of Rule 14a-11 of the Exchange Act) with respect to the election or 2 removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board of Directors of the Company; or (c) Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Company Common Stock and Voting Stock immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then-outstanding shares of common stock and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions relative to each other as their ownership, immediately prior to such Business Combination, of the Company Common Stock and Voting Stock of the Company, as the case may be, (ii) no Person (excluding any entity resulting from such Business Combination or any employee benefit plan (or related trust) sponsored or maintained by the Company or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, 15% or more of, respectively, the then-outstanding shares of common stock of the entity resulting from such Business Combination, or the combined voting power of the then-outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board of Directors of the Company, providing for such Business Combination; or (d) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company." 2. Section 1.5 of the Agreement is hereby amended and restated to read in its entirety as follows: "1.5 Termination "For Cause" shall mean prior to any termination of employment by the Company, Executive shall have committed: (a) an intentional act of fraud, embezzlement or theft in connection with his duties or in the course of his employment with the Company; 2 3 (b) intentional wrongful damage to property of the Company; or (c) intentional wrongful disclosure of secret processes or confidential information of the Company; and any such act shall have been materially harmful to the Company. For purposes of this Agreement, no act, or failure to act, on the part of Executive shall be deemed "intentional" if it was due primarily to an error in judgment or negligence, but shall be deemed "intentional" only if done, or omitted to be done, by Executive not in good faith and without reasonable belief that his action or omission was in the best interest of the Company. Notwithstanding the foregoing, Executive shall not be deemed to have been terminated for "Cause" hereunder unless and until there shall have been delivered to Executive a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the Board of Directors of the Company then in office at a meeting of the Board of Directors of the Company called and held for such purpose (after reasonable notice to Executive and an opportunity for Executive, together with his counsel, to be heard before the Board of Directors of the Company), finding that, in the good faith opinion of the Board of Directors of the Company, Executive had committed an act set forth above in this Section 1.5 and specifying the particulars thereof in detail. Nothing herein shall limit the right of Executive or his beneficiaries to contest the validity or propriety of any such determination." 3. Section 7.9 of the Agreement is hereby deleted in its entirety and shall be of no further force or effect. Section 7.10 of the Agreement shall be renumbered to Section 7.9 to reflect this deletion of Section 7.9. 4. This Amendment is effective when it is executed by the Company. 5. Except as expressly set forth in this Amendment, the Agreement remains unchanged and continues in full force and effect. 6. The undersigned Executive hereby consents to the adoption of this Amendment. IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the date first above written. THE LAMSON & SESSIONS CO. By:_________________________________ Senior Executive Officer ___________________________________ Executive 3 EX-10.AL 6 EXHIBIT 10(AL) 1 EXHIBIT 10(al) AMENDMENT NO. 2 TO THE LAMSON & SESSIONS CO. NONEMPLOYEE DIRECTORS STOCK OPTION PLAN WHEREAS, the Lamson & Sessions Co., an Ohio corporation (the "Company"), with the approval of the Company's shareholders, has established the Nonemployee Directors Stock Option Plan of the Company (the "Plan"); WHEREAS, the Board of Directors of the Company (the "Board") desires to amend the Plan to conform the definition of "Change in Control" in the Plan to the definition of "Change in Control" in other plans and agreements of the Company; and WHEREAS, the Board has approved this Amendment No. 2 (this "Amendment") in accordance with the provisions of Section 12 of the Plan. NOW THEREFORE, the undersigned hereby amends the Plan as follows: 1. Section 11(b) of the Plan is hereby amended and restated to read in its entirety as follows: "(b) Definition of "Change in Control." For purposes of Section 11(a), a "Change in Control" shall be deemed to have occurred if any of the following events shall occur: (i) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 15% or more of either: (A) the then-outstanding shares of common stock of the Company (the "Company Common Stock") or (B) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors ("Voting Stock"); PROVIDED, HOWEVER, that for purposes of this subsection (i), the following acquisitions shall not constitute a Change in Control: (1) any acquisition directly from the Company, (2) any acquisition by the Company, (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary of the Company, or (4) any acquisition by any Person pursuant to a transaction which complies with clauses (A), (B) and (C) of subsection (iii) of this Section 11(b); or (ii) Individuals who, as of the date hereof, constitute the Board of Directors of the Company (the "Incumbent Board") cease for any reason (other than death or disability) to constitute at least a majority of the Board of Directors of the Company; PROVIDED, HOWEVER, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee 2 for director, without objection to such nomination) shall be considered as though such individual were a member of the Incumbent Board, but excluding for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest (within the meaning of Rule 14a-11 of the Exchange Act) with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board of Directors of the Company; or (iii) Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a "Business Combination"), in each case, unless, following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Company Common Stock and Voting Stock immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then-outstanding shares of common stock and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions relative to each other as their ownership, immediately prior to such Business Combination, of the Company Common Stock and Voting Stock of the Company, as the case may be, (B) no Person (excluding any entity resulting from such Business Combination or any employee benefit plan (or related trust) sponsored or maintained by the Company or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, 15% or more of, respectively, the then-outstanding shares of common stock of the entity resulting from such Business Combination, or the combined voting power of the then-outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (C) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board of Directors of the Company, providing for such Business Combination; or (iv) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company." 2. This Amendment shall be effective as of January 1, 2000, upon approval by the Board. 3. Except as expressly set forth in this Amendment, the Plan remains unchanged and continues in full force and effect. 2 EX-10.AM 7 EXHIBIT 10(AM) 1 EXHIBIT (am) AMENDMENT NO. 3 TO THE LAMSON & SESSIONS CO. 1988 INCENTIVE EQUITY PERFORMANCE PLAN WHEREAS, The Lamson & Sessions Co., an Ohio corporation (the "Company"), with the approval of the Company's shareholders, has established the 1988 Incentive Equity Performance Plan of the Company (the "Plan"); WHEREAS, the Board of Directors of the Company (the "Board") desires to amend the Plan to conform the definition of "Change in Control" in the Plan to the definition of "Change in Control" in other plans and agreements of the Company; and WHEREAS, the Board has approved this Amendment (this "Amendment") in accordance with the provisions of Section 10 of the Plan. NOW THEREFORE, the undersigned hereby amends the Plan as follows: 1. The last paragraph of Section 2 is hereby amended and restated to read in its entirety as follows: In addition, the terms "Change in Control" and "Change in Control Price" shall have the meanings set forth in Section 9. 2. Section 9 of the Plan is hereby amended and restated to read in its entirety as follows: "SECTION 9. CHANGE IN CONTROL PROVISIONS. (a) Impact of Event. In the event of a "Change in Control" as defined in Section 9(b), the Committee or the Board may provide that one or more of the following acceleration and valuation provisions shall apply: (i) Any or all Stock Appreciation Rights outstanding for at least six months on the date that such Change in Control is determined to have occurred and any or all Stock Options awarded under this Plan not previously exercisable and vested shall become fully exercisable and vested. (ii) The restrictions and deferral limitations applicable to any or all Restricted Stock and Deferred Stock awards shall lapse and such shares and awards shall be fully vested. (iii) The value of any or all outstanding Stock Options, Restricted Stock and Deferred Stock awards shall be cashed out on the basis of the "Change in Control Price" as defined in Section 9(c) as of the date such Change in Control is determined to have occurred or such other date as the Committee may determine prior to the Change in Control. 2 (b) Definition of "Change in Control." For purposes of Section 9(a), a "Change in Control" shall be deemed to have occurred if any of the following events shall occur: (i) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 15% or more of either: (A) the then-outstanding shares of common stock of the Company (the "Company Common Stock") or (B) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors ("Voting Stock"); PROVIDED, HOWEVER, that for purposes of this subsection (i), the following acquisitions shall not constitute a Change of Control: (1) any acquisition directly from the Company, (2) any acquisition by the Company, (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary of the Company, or (4) any acquisition by any Person pursuant to a transaction which complies with clauses (A), (B) and (C) of subsection (iii) of this Section 9(b); or (ii) Individuals who, as of the date hereof, constitute the Board of Directors of the Company (the "Incumbent Board") cease for any reason (other than death or disability) to constitute at least a majority of the Board of Directors of the Company; PROVIDED, HOWEVER, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without objection to such nomination) shall be considered as though such individual were a member of the Incumbent Board, but excluding for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest (within the meaning of Rule 14a-11 of the Exchange Act) with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board of Directors of the Company; or (iii) Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a "Business Combination"), in each case, unless, following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Company Common Stock and Voting Stock immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then-outstanding shares of common stock and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity which as a 2 3 result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions relative to each other as their ownership, immediately prior to such Business Combination, of the Company Common Stock and Voting Stock of the Company, as the case may be, (B) no Person (excluding any entity resulting from such Business Combination or any employee benefit plan (or related trust) sponsored or maintained by the Company or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, 15% or more of, respectively, the then-outstanding shares of common stock of the entity resulting from such Business Combination, or the combined voting power of the then-outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (C) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board of Directors of the Company, providing for such Business Combination; or (iv) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company. (c) Change in Control Price. For the purposes of this Section 9, "Change in Control Price" means the highest price per share paid in any transaction reported on the New York Stock Exchange Composite Index, or paid or offered in any bona fide transaction related to an actual Change in Control of the Company, at the time during the preceding sixty-day period as determined by the Committee, except that, in the case of Incentive Stock Options and Stock Appreciation Rights relating to Incentive Stock Options, such price shall be based only on transactions reported for the date as of which the Committee decides to cashout such options." 3. This Amendment shall be effective as of January 1, 2000, upon approval by the Board. 4. Except as expressly set forth in this Amendment, the Plan remains unchanged and continues in full force and effect. 3 EX-10.AN 8 EXHIBIT 10(AN) 1 EXHIBIT (an) AMENDMENT NO. 1 TO THE LAMSON & SESSIONS CO. LONG-TERM INCENTIVE PLAN WHEREAS, the Lamson & Sessions Co., an Ohio corporation (the "Company"), has established the Long-Term Incentive Plan of the Company (the "Plan"); WHEREAS, the Board of Directors of the Company (the "Board") desires to amend the Plan to conform the definition of "Change in Control" in the Plan to the definition of "Change in Control" in other plans and agreements of the Company; and WHEREAS, the Board has approved this Amendment No. 1 (this "Amendment") in accordance with the provisions of Section 16 of the Plan. NOW THEREFORE, the undersigned hereby amends the Plan as follows: 1. Section 10 of the Plan is hereby amended and restated to read in its entirety as follows: "10. Change in Control. (a) In the event of a "Change in Control" as defined in Section 10(b), any or all Units outstanding on the date that such Change in Control is determined to have occurred shall become fully exercisable and vested as if Performance Objectives had been attained at 125%. (b) Definition of "Change in Control." For purposes of Section 10(a), a "Change in Control" shall be deemed to have occurred if any of the following events shall occur: (i) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 15% or more of either: (A) the then-outstanding shares of common stock of the Company (the "Company Common Stock") or (B) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors ("Voting Stock"); PROVIDED, HOWEVER, that for purposes of this subsection (i), the following acquisitions shall not constitute a Change in Control: (1) any acquisition directly from the Company, (2) any acquisition by the Company, (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary of the Company, or (4) any acquisition by any Person pursuant to a transaction which complies with clauses (A), (B) and (C) of subsection (iii) of this Section 10(b); or 2 (ii) Individuals who, as of the date hereof, constitute the Board of Directors of the Company (the "Incumbent Board") cease for any reason (other than death or disability) to constitute at least a majority of the Board of Directors of the Company; PROVIDED, HOWEVER, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without objection to such nomination) shall be considered as though such individual were a member of the Incumbent Board, but excluding for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest (within the meaning of Rule 14a-11 of the Exchange Act) with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board of Directors of the Company; or (iii) Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a "Business Combination"), in each case, unless, following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Company Common Stock and Voting Stock immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then-outstanding shares of common stock and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions relative to each other as their ownership, immediately prior to such Business Combination, of the Company Common Stock and Voting Stock of the Company, as the case may be, (B) no Person (excluding any entity resulting from such Business Combination or any employee benefit plan (or related trust) sponsored or maintained by the Company or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, 15% or more of, respectively, the then-outstanding shares of common stock of the entity resulting from such Business Combination, or the combined voting power of the then-outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (C) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board of Directors of the Company, providing for such Business Combination; or 2 3 (iv) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company." 2. This Amendment shall be effective as of January 1, 2000, upon approval by the Board. 3. Except as expressly set forth in this Amendment, the Plan remains unchanged and continues in full force and effect. 3 EX-10.AO 9 EXHIBIT 10(AO) 1 Exhibit 10(ao) AMENDMENT NO. 1 TO THE LAMSON & SESSIONS CO. 1998 INCENTIVE EQUITY PLAN WHEREAS, The Lamson & Sessions Co., an Ohio corporation (the "Company"), with the approval of the Company's shareholders, has established the 1998 Incentive Equity Plan of the Company (the "Plan"); WHEREAS, the Board of Directors of the Company (the "Board") finds that it is in the best interest of the Company and its shareholders to amend the Plan to conform the definition of "Change in Control" in the Plan to the definition of "Change in Control" in other plans and agreements of the Company; and WHEREAS, the Board has approved this Amendment No. 1 (this "Amendment") in accordance with the provisions of Section 18 of the Plan. NOW THEREFORE, the Plan is hereby amended as follows: 1. Section 13 of the Plan is hereby amended and restated to read in its entirety as follows: SECTION 13. CHANGE IN CONTROL. For purposes of this Plan, a "Change in Control" shall be deemed to haveoccurred if any of the following events shall occur: (a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 15% or more of either: (A) the then-outstanding shares of common stock of the Company (the "Company Common Stock") or (B) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors ("Voting Stock"); PROVIDED, HOWEVER, that for purposes of this subsection (i), the following acquisitions shall not constitute a Change in Control: (1) any acquisition directly from the Company, (2) any acquisition by the Company, (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary of the Company, or (4) any acquisition by any Person pursuant to a transaction which complies with clauses (A), (B) and (C) of subsection (iii) of this Section 9(b); or (b) Individuals who, as of the date hereof, constitute the Board of Directors of the Company (the "Incumbent Board") cease for any reason (other than death or disability) to constitute at least a majority of the Board of Directors of the Company; PROVIDED, HOWEVER, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (either by a specific vote or by approval of the 2 proxy statement of the Company in which such person is named as a nominee for director, without objection to such nomination) shall be considered as though such individual were a member of the Incumbent Board, but excluding for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest (within the meaning of Rule 14a-11 of the Exchange Act) with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board of Directors of the Company; or (c) Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a "Business Combination"), in each case, unless, following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Company Common Stock and Voting Stock immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then-outstanding shares of common stock and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions relative to each other as their ownership, immediately prior to such Business Combination, of the Company Common Stock and Voting Stock of the Company, as the case may be, (B) no Person (excluding any entity resulting from such Business Combination or any employee benefit plan (or related trust) sponsored or maintained by the Company or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, 15% or more of, respectively, the then-outstanding shares of common stock of the entity resulting from such Business Combination, or the combined voting power of the then-outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (C) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board of Directors of the Company, providing for such Business Combination; or (d) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company. 2. This Amendment shall be effective as of January 1, 2000, upon approval of the shareholders of the Company. 3. Except as expressly set forth in this Amendment, the Plan remains unchanged and continues in full force and effect. 2 EX-21 10 EXHIBIT 21 1 Exhibit (21) - Subsidiaries At January 1, 2000, the Company owned the following subsidiaries, all of which are included in the consolidated financial statements filed as part of the Form 10-K: - -------------------------------------------------------------------------------- PERCENT STATE OF OF SUBSIDIARIES INCORPORATION OWNERSHIP - -------------------------------------------------------------------------------- Carlon Chimes Co. Delaware 100 Lamson & Sessions Ltd. Ontario, Canada 100 LMS Asia Limited Hong Kong 100 LMS S.A. Limitada Chile 100 Dimango Products Corporation Michigan 100 EX-23 11 EXHIBIT 23 1 Exhibit 23 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statements (Form S-8 No. 333-93251, Form S-8 No. 033-62443, Form S-8 No. 333-12585, Form S-8 No. 333-32875, Form S-8 No. 333-46953 and Form S-8 No. 333-61911) pertaining to The Lamson & Sessions Co. Nonemployee Directors Stock Option Plan, the Deferred Compensation Plan for Nonemployee Directors, the 1988 Incentive Equity Performance Plan, The Lamson & Sessions Co. Deferred Savings Plan, and the 1998 Incentive Equity Plan, respectively, and the Registration Statement and related Prospectus (Form S-3 No. 333-65795) of The Lamson & Sessions Co. of our report dated February 7, 2000, with respect to the consolidated financial statements and schedule of The Lamson & Sessions Co., included in this Annual Report (Form 10-K) for the year ended January 1, 2000. ERNST & YOUNG LLP Cleveland, Ohio March 1, 2000 EX-24 12 EXHIBIT 24 1 Exhibit 24 THE LAMSON & SESSIONS CO. DIRECTORS' POWER OF ATTORNEY ---------------------------- Each of the undersigned members of the Board of Directors of The Lamson & Sessions Co., an Ohio Corporation, which anticipates filing with the Securities and Exchange Commission, Washington, D. C., an annual report of the Corporation on Form 10-K for the fiscal year ended January 1, 2000 ("1999 Form 10-K") under the provisions of the Securities Act of 1934, as amended, does hereby constitute and appoint James J. Abel and John B. Schulze, jointly and severally, with full power and substitution and resubstitution, as attorney(s) to sign for him and in his name, in the capacities indicated below, the 1999 Form 10-K, including any amendments and exhibits thereto, with full power and authority to do and perform any and all acts and things whatsoever necessary and required to be done in connection with such signing as fully to all intents and purposes as he would do if personally present, hereby ratifying and approving the acts of said attorney(s) and any substitutes(s) therefor in connection with such signing: IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of the 23rd day of February, 2000. /S/ JAMES T. BARTLETT /S/ JOHN C. DANNEMILLER - -------------------------------------------- ------------------------- James T. Bartlett John C. Dannemiller Director Director /S/ FRANCIS H. BEAM, JR. /S/ GEORGE R. HILL - -------------------------------------------- ------------------------- Francis H. Beam, Jr. George R. Hill Director Director /S/ WILLIAM H. COQUILLETTE /S/ A. MALACHI MIXON, III - -------------------------------------------- ------------------------- William H. Coquillette A. Malachi Mixon, III Director Director /S/ MARTIN J. CLEARY /S/ JOHN C. MORLEY - -------------------------------------------- ------------------------- Martin J. Cleary John C. Morley Director Director /S/ D. VAN SKILLING --------------------- D. Van Skilling Director EX-27 13 EXHIBIT 27
5 0000057497 THE LAMSON & SESSIONS CO. 1,000 USD YEAR JAN-01-2000 JAN-03-1999 JAN-01-2000 1 2,724 0 42,754 2,078 42,561 94,704 118,732 70,639 183,319 56,223 36,919 0 0 1,345 62,024 183,319 291,381 291,381 229,981 229,981 48,054 0 3,558 9,788 (9,000) 18,788 0 0 0 18,788 1.40 1.39

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	(a) The following documents are filed as part of this report:

	Consolidated financial statements of The Lamson & Sessions Co. and Subsidiaries are included in Item 8 of this report:


	(b) Reports on Form 8-K

	There were no reports on Form 8-K filed for the three months ended January 1, 2000.

	(c) Exhibits — See 14(a) 3.

	(d) Financial Statement Schedule