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Industrial Distribution Group Inc – ‘PRE 14A’ for 5/16/01

On: Friday, 3/2/01, at 3:44pm ET · For: 5/16/01 · Accession #: 950144-1-3271 · File #: 1-13195

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 3/02/01  Industrial Distribution Group Inc PRE 14A     5/16/01    1:68K                                    Bowne of Atlanta Inc/FA

Preliminary Proxy Solicitation Material — Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: PRE 14A     Industrial Distribution Group, Inc.                   24    112K

Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Common Stock
1	1st Page - Filing Submission
23	Common Stock

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SCHEDULE 14A
 INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
 SECURITIES EXCHANGE ACT OF 1934

Filed by the Registrant [X]                                                     
Filed by a Party other than the Registrant [ ]                                  
Check the appropriate box:                                                      
[X] Preliminary Proxy Statement                                                 
[ ] Confidential, For Use of the Commission Only (as permitted by               
Rule 14a-6(e)(2))                                                       
[ ] Definitive Proxy Statement                                                  
[ ] Definitive Additional Materials                                             
[ ] Soliciting Material Under Rule 14a-12                                       

 Industrial Distribution Group, Inc.
--------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

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

Payment of Filing Fee (Check the appropriate box):                              
[X]     No fee required.                                                        
[ ]     Fee computed on table below per Exchange Act Rules 14a-6(i)(1)          
and 0-11.                                                       

(1)     Title of each class of securities to which transaction applies:         

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(2)     Aggregate number of securities to which transaction applies:            

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(3)     Per unit price or other underlying value of transaction computed        
     pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):      

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(4)     Proposed maximum aggregate value of transaction:                        

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(5)     Total fee paid:                                                         

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[ ]     Check box if any part of the fee is offset as provided by Exchange Act  
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid   
previously. Identify the previous filing by registration statement number, or   
the form or schedule and the date of its filing.                                

(1)      Amount previously paid:                                                

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(2)      Form, Schedule or Registration Statement No.:                          

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(3)      Filing Party:                                                          

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(4)      Date Filed:                                                            

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March __, 2001    

To Our Stockholders:                                                            

  On behalf of the Board of Directors and management of Industrial
Distribution Group, Inc., I cordially invite you to the Annual Meeting of       
Stockholders to be held on Wednesday, May 16, 2001, at 4:00 p.m., Eastern Time, 
at 2500 Royal Place, Tucker, Georgia.                                           

   At the Annual Meeting, stockholders will be asked to consider and
approve an amendment to the Company's certificate of incorporation and bylaws   
relating to the classification of the Board of Directors and to elect eight     
directors of the Company, all of the nominees for which are currently directors 
of the Company. Information about the proposal, the nominees and certain other  
matters is contained in the accompanying Proxy Statement. A copy of the         
Company's 2000 Annual Report to Stockholders, which contains financial          
statements and other important information about the Company's business, is also
enclosed.                                                                       

 It is important that your shares of stock be represented at the
meeting, regardless of the number of shares you hold. You are encouraged to     
specify your voting preferences by marking and dating the enclosed proxy card.  
However, if you wish to vote for re-electing the directors, all you need to do  
is sign and date the proxy card.                                                

     Please complete and return the proxy card in the enclosed envelope,
whether or not you plan to attend the meeting. If you do attend and wish to vote
in person, you may revoke your proxy at that time.                              

I hope you are able to attend, and look forward to seeing you.

          Sincerely,

                  Patrick S. O'Keefe
                                     President and Chief Executive Officer

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 INDUSTRIAL DISTRIBUTION GROUP, INC.
 950 EAST PACES FERRY ROAD
SUITE 1575
ATLANTA, GEORGIA 30326

----------------------------------

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
 TO BE HELD MAY 16, 2001

----------------------------------

To the Stockholders of                                                          
Industrial Distribution Group, Inc.:                                            

   Notice is hereby given that the Annual Meeting of Stockholders of
Industrial Distribution Group, Inc. will be held at 4:00 p.m., Eastern Time,    
Wednesday, May 16, 2001, at 2500 Royal Place, Tucker, Georgia for the following 
purposes:                                                                       

  1.       To approve an amendment to the Company's certificate of
                  incorporation and bylaws relating to the classification of the
Board of Directors;                         

        2.       To elect eight directors to constitute the Board of Directors
         to serve until their term has expired and until their
                  successors, if there are to be any, are elected and qualified;
and                                         

         3.       To consider such other matters as may properly come before the
        meeting and any adjournment or postponement thereof.

       Only stockholders of record on March 20, 2001, are entitled to notice
of and to vote at the Annual Meeting and any adjournment or postponement        
thereof.                                                                        

                                 BY ORDER OF THE BOARD OF DIRECTORS,

            Jack P. Healey
MARCH __, 2001                         Secretary                                

WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE ANNUAL MEETING, PLEASE FILL IN,  
DATE, SIGN, AND PROMPTLY RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED BUSINESS
REPLY ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. THE   
PROXY MAY BE REVOKED AT ANY TIME PRIOR TO EXERCISE, AND IF YOU ARE PRESENT AT   
THE ANNUAL MEETING, YOU MAY, IF YOU WISH, REVOKE YOUR PROXY AT THAT TIME AND    
EXERCISE THE RIGHT TO VOTE YOUR SHARES PERSONALLY.                              

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[IDG LOGO]

 PROXY STATEMENT
DATED MARCH 30, 2001
FOR THE ANNUAL MEETING OF STOCKHOLDERS
 TO BE HELD MAY 16, 2001

      This Proxy Statement is furnished to stockholders in connection with
the solicitation of proxies by the Board of Directors of Industrial Distribution
Group, Inc. ("IDG" or the "Company") for use at IDG's 2001 Annual Meeting of    
Stockholders ("Annual Meeting") to be held on Wednesday, May 16, 2001, including
any postponement, adjournment, or adjournments thereof, for the purposes set    
forth in the accompanying Notice of Annual Meeting. Management intends to mail  
this Proxy Statement and the accompanying form of proxy to stockholders on or   
about March 30, 2001.                                                           

        Only stockholders of record at the close of business on March 20, 2001
(the "Record Date"), are entitled to notice of and to vote in person or by proxy
at the Annual Meeting. As of the Record Date, there were __________ shares of   
common stock, $.01 par value per share ("Common Stock"), of IDG outstanding and 
entitled to vote at the Annual Meeting. The presence of a majority of such      
shares is required, in person or by proxy, to constitute a quorum for the       
conduct of business at the Annual Meeting. Each share is entitled to one vote on
any matter submitted for vote by the stockholders. The vote required for        
approval of each matter submitted to the stockholders is described with the     
discussion of that matter in this Proxy Statement.                              

     Proxies in the accompanying form, duly executed and returned to the
management of the Company, and not revoked, will be voted at the Annual Meeting.
Any proxy given pursuant to this solicitation may be revoked by the stockholder 
at any time prior to the voting of the proxy by delivery of a subsequently dated
proxy, by written notification to the Secretary of the Company, or by personally
withdrawing the proxy at the Annual Meeting and voting in person.               

 Proxies that are executed, but that do not contain any specific
instructions, will be voted for approval of the amendment to IDG's certificate  
of incorporation and bylaws classifying the Board of Directors, for the election
of all the nominees for directors specified herein, and in the discretion of the
persons appointed as proxies on any other matter that may properly come before  
the Annual Meeting or any postponement, adjournment, or adjournments thereof,   
including any vote to postpone or adjourn the Annual Meeting.                   

       A copy of the Company's 2000 Annual Report to Stockholders (including
substantive excerpts from the Company's Annual Report on Form 10-K) is being    
furnished herewith to each stockholder of record as of the close of business on 
the Record Date. Additional copies of the 2000 Annual Report to Stockholders    
will be provided free of charge upon written request to:                        

 INDUSTRIAL DISTRIBUTION GROUP, INC.
 950 EAST PACES FERRY ROAD
SUITE 1575
ATLANTA, GEORGIA 30326
 ATTN.: INVESTORS RELATIONS DEPARTMENT

     If the person requesting the Annual Report was not a stockholder of
record on the Record Date, the request must include a representation that the   
person was a beneficial owner of Common Stock on that date. Copies of any       
exhibits to the Company's Annual Report on Form 10-K for the fiscal year ended  
December 31, 2000 will also be furnished on request and upon payment of the     
Company's expenses in furnishing the exhibits.                                  

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VOTING SECURITIES AND PRINCIPAL STOCKHOLDERS

The following table sets forth the information concerning the 
beneficial ownership of Common Stock, which is the only class of voting stock of
the Company, at February 28, 2001, by (1) each person known to the Company to   
beneficially own more than 5% of the Common Stock, (2) each director, nominee   
for director, and designated highly compensated executive officer, and (3) all  
directors and executive officers of the Company as a group. Unless otherwise    
indicated below, the persons named below had sole voting and investment power   
with respect to all shares of the Common Stock shown as beneficially owned by   
them.                                                                           

                                                        [Enlarge/Download Table]

                                                               SHARES BENEFICIALLY              
NAME OF BENEFICIAL OWNER                                               OWNED          PERCENT(1)
------------------------                                       ---------------------  ----------
                                                                                                
Edmundson International, Inc.                                                                   
Consolidated Electrical Distributors, Inc.                                                      
Portshire Corp.                                                                                 
Lincolnshire Associates Ltd. (2) .............................      1,232,700              14%  
Employees' Retirement Plan of                                                                   
  Consolidated Electrical Distributors, Inc.                                                    
Dimensional Fund Advisors, Ind. (3) ..........................        642,300             7.3%  
Andrew B. Shearer (4).........................................        541,500             6.1%  
William J. Burkland (5) ......................................        161,777             1.8%  
George L. Sachs, Jr. (6) .....................................         86,171             1.0%  
Patrick S. O'Keefe (7) .......................................        252,171             2.8%  
Jack P. Healey (8) ...........................................         47,678             *     
Thomas W. Aldridge, Jr. (9) ..................................         14,456             *     
David K. Barth (10) ..........................................         37,066             *     
William T. Parr (11) .........................................         12,200             *     
William R. Fenoglio (12) .....................................         13,000             *     
Richard M. Seigel (13) .......................................         58,667             *     
All Directors and Executive Officers as a Group                                                 
    (10 persons) (14) ........................................      1,224,686            13.5%  

-------------------                                                             
* Denotes less than 1%.                                                         

(1)      The percentages shown are based on 8,820,204 shares of Common Stock    
    outstanding on February 28, 2001 plus, as to each person and group
   listed, the number of shares of Common Stock deemed owned by such
    holder pursuant to Rule 13d-3 under the Securities Exchange Act of
         1934, as amended (the "Exchange Act"), assuming the exercise of options
         held by such holder that are exercisable within 60 days of February 28,
2001.                                                         
(2)      The address of Edmundson International, Inc. ("Edmundson") and         
 Consolidated Electrical Distributors, Inc. ("CED") is 31356 Via
       Colinas, Westlake Village, California 91362. The address of Portshire
        Corp. ("Portshire") and Lincolnshire Associates, Ltd. ("Lincolnshire")
         is 2550 Midway Road, Suite 220, Carrollton, Texas 75006. The address of
     Employees' Retirement Plan of Consolidated Electrical Distributors,
       Inc. (the "Retirement Plan") is 700 S. Flower Street (c/o BNY Western
  Trust Co.), Los Angeles, California 90071. The listed owners are
         affiliated with each other and therefore the aggregate number of shares
        listed above could be voted together. Specifically, CED is the sponsor
  of the Retirement Plan and is the sole shareholder of Edmundson;
      Edmundson is the sole shareholder of Portshire; and Portshire is the
 general partner of Lincolnshire. The listed owners have filed a
Schedule 13D with the Securities and Exchange Commission (the 
"Commission") as members of a group.                          
(3)      The address of Dimensional Fund Advisors, Inc. is 1229 Ocean Avenue,   
        11th Floor, Santa Monica, California 90401. The listed owner has filed
     a Schedule 13G with the Commission and claims voting and investment
power with respect to all 642,300 shares.                     
(4)      Includes 16,667 shares subject to exercisable options. The address for 
Mr. Shearer is 3100 Farmtrail Road, York, PA 17402.           

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(5)      Includes an aggregate of 300 shares held by Mr. Burkland as custodian  
       for his three minor children and 16,667 shares subject to exercisable
      options. Does not include an aggregate of 28,966 shares owned by Mr.
Burkland's wife, with respect to which Mr. Burkland disclaims 
beneficial ownership.                                         
(6)      Includes 16,667 shares subject to exercisable options.                 
(7)      Includes 100,000 shares that are restricted. Includes 125,000 shares   
subject to exercisable options.                               
(8)      Includes 6,667 shares subject to exercisable options.                  
(9)      Includes 7,500 shares subject to exercisable options.                  
(10)     Includes 10,000 shares subject to exercisable options. Does not include
        an aggregate of 9,000 shares owned by Mr. Barth's adult children, with
respect to which Mr. Barth disclaims beneficial ownership.    
(11)     Includes 10,000 shares subject to exercisable options. Does not include
        an aggregate of 1,200 shares owned by Mr. Parr's wife, with respect to
which Mr. Parr disclaims beneficial ownership.                
(12)     Includes 10,000 shares subject to exercisable options.                 
(13)     Includes 26,667 shares subject to exercisable options.                 
(14)     Includes an aggregate of 245,835 shares subject to exercisable options 
that are held by the persons in the group.                    

AMENDMENT OF THE COMPANY'S
 BYLAWS AND CERTIFICATE OF INCORPORATION
RELATING TO THE CLASSIFICATION OF THE BOARD OF DIRECTORS
 (ITEM NUMBER 1 ON THE PROXY CARD)

SUMMARY AND PURPOSE OF AMENDMENTS                                               

The Board of Directors voted to amend the Company's Bylaws and
Certificate of Incorporation on February 28, 2001 to create a classified Board  
of Directors. The amendments to the Bylaws and Certificate of Incorporation, if 
approved by the stockholders, will be effective as of such date. In all other   
respects, the Bylaws and Certificate of Incorporation remain the same.          

      The Board of Directors believes that it is advisable and in the best
interest of the Company to create a Board of Directors whose members serve      
staggered three-year terms. The Company's Board of Directors has unanimously    
adopted, subject to the approval of the stockholders at the Annual Meeting,     
amendments to the Company's present Bylaws and Certificate of Incorporation. The
amendment calls for the directors to be classified with respect to the time     
during which they hold office, dividing them into three classes. The initial    
term of the Class I directors will expire at the annual meeting of stockholders 
in 2002, the initial term of Class II directors will expire at the annual       
meeting of stockholders in 2003, and the initial term of the Class III directors
will expire at the annual meeting of stockholders in 2004. Following their      
initial term, the members of each class will serve three-year terms. In the     
event that one or more vacancies occurs in the Board of Directors because of the
death of a director, resignation or otherwise, the remaining directors may, by a
majority vote, elect a successor or successors for the unexpired term or terms. 

      Creating classes of directors makes it difficult for stockholders to
change the composition of the Board of Directors at a single meeting. However,  
classifying the Board in this manner will help ensure the continuity and        
stability of the Company's management and policies. At least two annual         
stockholders' meetings, instead of one, will generally be required for          
stockholders to effect a change in control of the Board. Although the Company   
has not encountered any lack of continuity or stability, the Board believes that
requiring a longer period of time to elect a majority of directors will help to 
assure continuity and stability of the Company's affairs and policies in the    
future. The classification provisions could also discourage a third party from  
accumulating large blocks of Company stock to attempt to obtain control of the  
Company, even though such an attempt might be beneficial to the Company or to   
stockholders.                                                                   

VOTE REQUIRED AND RECOMMENDATION OF THE BOARD                                   

       Stockholder approval of the amendment to the Bylaws is required under
the Delaware General Corporation Law because the proposal would divide the      
Company's Board into three classes. The affirmative vote of holders of a        
majority of the shares of Common Stock of the Company, represented and voted at 
the Annual Meeting, assuming                                                    

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the presence of a quorum, is required to approve the amendment to the Bylaws.   
Stockholder approval of an amendment to the Certificate of Incorporation is also
required under the Delaware General Corporation Law.                            

        The Board, which approved the amendments to the Bylaws and Certificate
of Incorporation recommends a vote "For" approval of the amendments to the      
Bylaws and Certificate of Incorporation by all of the Company's stockholders who
are entitled to vote. The full text of the proposed amendment to the Bylaws and 
Certificate of Incorporation is attached as Exhibits A and B to this Proxy      
Statement, respectively.                                                        

 ELECTION OF DIRECTORS
 (ITEM NUMBER 2 ON THE PROXY CARD)

        The Bylaws of IDG provide that the Board of Directors shall consist of
not less than three nor more than fifteen directors, with the exact number being
set from time to time by the Board. The Board presently consists of eight       
directors, each of whom serves until the expiration of his term and until his   
successor, if there is to be one, is elected and qualified. Classification of   
the Board of Directors has been approved by the Board of Directors and will be  
voted upon by the stockholders at the Annual Meeting. The classification of the 
Board of Directors is wholly contingent upon the approval by the stockholders.  

         Directors are elected by a plurality of the votes cast by the holder of
shares of Common Stock entitled to vote for the election of directors at a      
meeting at which quorum is present. A quorum will be present for the Annual     
Meeting when the holders of a majority of the shares outstanding on the Record  
Date are present in person or by proxy. An abstention and a broker non-vote are 
included in determining whether a quorum is present, but will not affect the    
outcome of the vote for the election of directors. Unless otherwise indicated on
a proxy, all duly executed proxies granted by the holders of Common Stock will  
be voted individually at the Annual Meeting for the election of each nominee.   

      If Item 1 is approved by the stockholders, all duly executed proxies
will be voted for the classification of the nominees identified below into three
classes and their election to serve as directors of the Company for the terms   
set forth below until their successors are elected and qualified. Each nominee  
has indicated that he will serve if elected, but if the situation should arise  
that any nominee is no longer able or willing to serve, the proxy may be voted  
for the election of such other person as may be designated by the Board of      
Directors. Nominations are made in order to provide that Directors are divided  
into three classes, as nearly equal in number as possible.                      

NOMINEES FOR ELECTION WHOSE TERMS WILL EXPIRE IN 2002 (CLASS I)                 

David K. Barth                                                                  
George L. Sachs, Jr.                                                            

NOMINEES FOR ELECTION WHOSE TERMS WILL EXPIRE IN 2003 (CLASS II)                

William J. Burkland                                                             
William R. Fenoglio                                                             
William T. Parr                                                                 

NOMINEES FOR ELECTION WHOSE TERMS WILL EXPIRE IN 2004 (CLASS III)               

Patrick S. O'Keefe                                                              
Andrew B. Shearer                                                               
Richard M. Seigel                                                               

  If the proposal to amend the Company's Bylaws and Certificate of
Incorporation to provide for a classified Board of Directors is not approved,   
all duly elected proxies will be voted for the election of nominees identified  
below to serve for a term of one year and until their successors are elected and
qualified. Information with respect to each current director and nominee,       
including biographical data for at least the last five years, is set forth      
below:                                                                          

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                                                                       PRESIDENT
DAVID K. BARTH                                               BARTH SMITH COMPANY

Mr. Barth, age 57, is the President of Barth Smith Company, an investment and   
management consulting firm, which he founded in 1991 and which assisted the     
Company with its formation in 1997. Prior to that time, he served as Vice       
President, Planning and Development, from 1985 to 1990, and Treasurer, from 1979
to 1984, of W.W. Grainger, Inc., a national distributor of maintenance, repair, 
and operating supplies and related information to commercial, industrial,       
contractor, and institutional customers. Mr. Barth also served as Treasurer,    
Financial Services Group, from 1975 to 1979, and Manager, Treasury Operations,  
from 1972 to 1975, of Borg-Warner Corporation, a multinational diversified      
manufacturing, finance, and services company. Mr. Barth is a member of the      
Executive and Compensation Committees of the Board of Directors.                

                                                                VICE PRESIDENT
WILLIAM J. BURKLAND                                                 IDG SEATTLE 

Mr. Burkland, age 39, is a co-founder of the Company. Mr. Burkland has served   
since 1994 as a Vice President of the IDG Seattle business unit, formerly B&J   
Industrial Supply Company ("B&J"), one of the companies that founded the Company
in 1997. From 1992 to 1994, Mr. Burkland served as B&J's Director of            
International Sales, during which time he initiated, managed, and expanded B&J's
international business.                                                         

                                               CHIEF EXECUTIVE OFFICER (RETIRED)
WILLIAM R. FENOGLIO                                                  AUGAT, INC.

Mr. Fenoglio, age 61, served as the President and Chief Executive Officer of    
Augat, Inc., a manufacturer of connector products, from 1994 to 1996. Prior to  
that time, Mr. Fenoglio served as President and Chief Executive Officer (1991 to
1994) and Chief Operating Officer (1985 to 1991) of Barnes Group, Inc., a       
diversified manufacturer and distributor which owns Bowman Distribution Company.
From 1961 to 1984, Mr. Fenoglio was employed by General Electric Corporation and
served as the Vice President and General Manager of the Component Motor Division
from 1981 to 1984. Mr. Fenoglio is currently a director of Standex              
International, Inc., and he has served as Chairman of the Board of Connecticut  
Business & Industry Association. Mr. Fenoglio is a member of the Executive,     
Compensation and Audit Committees of the Board of Directors.                    

                                           PRESIDENT AND CHIEF EXECUTIVE OFFICER
PATRICK S. O'KEEFE                           INDUSTRIAL DISTRIBUTION GROUP, INC.

Mr. O'Keefe, age 48, became President and Chief Executive Officer of the Company
on December 1, 1999. Prior to joining the Company, Mr. O'Keefe served as        
President of the ZEP Chemical Unit of National Service Industries from December 
1997 to October 1999. From July 1996 to July 1997, Mr. O'Keefe served as the    
President and Chief Executive Officer of Huttig Building Products (formerly a   
subsidiary of Crane Co.) and from June 1994 to June 1996 he served as the       
President and Chief Executive Officer of Crane Canada (a subsidiary of Crane    
Co.). Mr. O'Keefe is a member of the Executive Committee of the Board of        
Directors.                                                                      

                                                                   VICE CHAIRMAN
WILLIAM T. PARR                                            J. SMITH LANIER & CO.

Mr. Parr, age 64, has served as Vice Chairman and a director of J. Smith Lanier 
& Co., an insurance placement company, since 1980. Mr. Parr is currently a      
director of ITC DeltaCom, Inc., and he also currently serves as a director of   
ITC Holding Company, Inc. and several of its subsidiaries. Mr. Parr is a member 
of the Executive, Audit and Compensation Committees of the Board of Directors.  

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                                                                     PRESIDENT
GEORGE L. SACHS, JR.                                              IDG ST. LOUIS 

Mr. Sachs, age 59, is a co-founder of the Company. Mr. Sachs has served since   
1985 as the President of the IDG St. Louis business unit, formerly Tri-Star     
Industrial Supply, Inc. ("Tri-Star"), one of the companies that founded the     
Company in 1997, and from 1978 to 1985, he served as Tri-Star's Vice            
President-Finance. Prior to joining Tri-Star, Mr. Sachs served as an Audit      
Manager for Arthur Andersen & Co. from 1968 to 1978.                            

                                                       CHAIRMAN OF THE BOARD
RICHARD M. SEIGEL                          INDUSTRIAL DISTRIBUTION GROUP, INC.  

Mr. Seigel, age 55, became Chairman of the Board on March 4, 1999, and served as
President and Acting Chief Executive Officer of the Company from March 8, 1999  
to November 30, 1999. Mr. Seigel is the retired former Chairman and Chief       
Executive Officer of SYSCO Food Services of Los Angeles, a subsidiary of SYSCO  
Corporation, with which he had held the position of Senior Vice President       
Foodservice operations. Prior to that, Mr. Seigel was President of Continental  
Foodservice Company, a national distributor of foodservice products. Mr. Seigel 
is a member of the Executive, Audit and Compensation Committees of the Board of 
Directors.                                                                      

                                                                       PRESIDENT
ANDREW B. SHEARER                                                       IDG YORK

Mr. Shearer, age 37, is a co-founder of the Company. Mr. Shearer has served     
since 1991 as the President of the IDG York business unit, formerly Shearer     
Industrial Supply Co. ("Shearer"), one of the companies that founded the Company
in 1997. Prior to becoming President, Mr. Shearer was employed by Shearer in    
various positions from 1985.                                                    

MEETINGS AND COMMITTEES OF THE BOARD                                            

   The Board of Directors of the Company meets on a regular basis to
supervise, review, and direct the business and affairs of the Company. During   
the Company's 2000 fiscal year, the Board held six meetings. The Board of       
Directors has established an Executive Committee, an Audit Committee, and a     
Compensation Committee to which it has assigned certain responsibilities in     
connection with the governance and management of the Company's affairs. The     
Company has no standing nominating committee or other committee performing      
similar functions.                                                              

       Each of the directors attended all of the Board meetings and meetings
of committees on which he served.                                               

     Executive Committee. The Executive Committee, pursuant to authority
delegated by the Board, from time to time considers certain matters in lieu of  
convening a meeting of the full Board, subject to any restrictions in applicable
law related to the delegation of certain powers to a committee of the Board.    
Messrs. Barth, Fenoglio, Parr, O'Keefe, and Seigel, comprise the members of the 
Executive Committee. The Executive Committee held six meetings during fiscal    
2000.                                                                           

    Audit Committee. The Audit Committee recommends the appointment of
independent public accountants, reviews the scope of audits proposed by the     
independent public accountants, reviews audit reports on various aspects of     
corporate operations, and periodically consults with the independent public     
accountants on matters relating to internal financial controls and procedures.  
Messrs. Fenoglio, Parr, and Seigel comprise the members of the Audit Committee. 
The Audit Committee held four meetings during fiscal 2000.                      

       Compensation Committee. The Compensation Committee is responsible for
the review and approval of compensation of senior management, the review of     
management recommendations relating to incentive compensation plans, the        
administration of the Company's stock option and stock purchase plans, the      
review of compensation of directors, and consultation with management and the   
Board on senior executive continuity and organizational matters. Messrs. Barth, 
Fenoglio, Parr, and Seigel comprise the members of the Compensation             

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Committee. The Compensation Committee held four meetings during fiscal 2000     
Messrs. Fenoglio and Seigel comprise the members of a subcommittee of the       
Compensation Committee to act with respect to certain matters of compensation to
the Company's most highly compensated executive officers in order to comply with
requirements of Section 162(m) of the Internal Revenue Code.                    

DIRECTORS' COMPENSATION                                                         

  The Company pays its outside directors an annual fee of $20,000,
payable quarterly, and an additional $15,000 annually to its non-executive      
Chairman of the Board. The Company also pays each director $1,000 for each      
meeting attended in person, reimburses all directors for their travel and other 
expenses incurred in connection with attending Board or Committee meetings, and 
also reimburses its outside directors for actual expenses otherwise incurred in 
performing their duties. The Company also pays certain health insurance costs   
for Messrs. Barth, Fenoglio, Parr and Seigel; such costs were $24,277 in total  
for 2000.                                                                       

EXECUTIVE COMPENSATION

       The following table sets forth the total compensation paid or accrued
by the Company for services rendered during the fiscal year ended December 31,  
2000, to or for those individuals who served as the Company's chief executive   
officer during 2000 and both of the Company's two other executive officers who  
were paid or accrued at least $100,000 during fiscal 2000 (the "Named Executive 
Officers").                                                                     

SUMMARY COMPENSATION TABLE

                                                        [Enlarge/Download Table]

                                        ANNUAL COMPENSATION             LONG TERM COMPENSATION                   
                                ----------------------------------      ----------------------                   
                                                                                AWARDS                           
                                                                               -------                           
                                                                     RESTRICTED       SECURITIES                 
                                FISCAL                                 STOCK          UNDERLYING       ALL OTHER 
NAME AND PRINCIPAL POSITION(S)   YEAR        SALARY        BONUS      AWARD(S)      OPTIONS/SARS(#)  COMPENSATION
------------------------------  ------      --------      -------   ----------      ---------------  ------------
                                                                                                                 
Patrick O'Keefe                  2000       $275,000           --          --                --         $    0   
   Chief Executive Officer       1999       $ 22,916           --   $ 387,500                --         $  272   
   and President (1)                                                                                             
Jack P. Healey                   2000       $205,000           --          --                --         $4,587   
  Senior Vice President,         1999       $187,500      $22,000          --                --         $3,271   
  Chief Financial Officer        1998       $175,000      $25,000          --                --         $3,271   
  and Secretary                                                                                                  
Thomas W. Aldridge, Jr           2000       $207,000           --          --                --         $1,658   
  Senior Vice President (2)      1999       $195,000           --          --                --         $3,271   
                                 1998       $ 86,250           --          --            15,000         $1,362   


----------------                                                                
(1)  Mr. O'Keefe's employment by the Company commenced December 1, 1999. In     
 connection therewith, Mr. O'Keefe received 100,000 shares of the Common
Stock that are restricted and subject to forfeiture if he ceases to be
employed by the Company. The forfeiture provisions lapse as to 25,000 
shares on each of the four anniversary dates of the date of grant.    
   Additional restrictions relating to the trading price of the Common Stock
  were removed by the compensation committee in January, 2001. The closing
     trading price of the Common Stock on the date of grant was $3.875. Although
no dividends are expected to be declared on the Common Stock, if the  
Company does declare and pay any dividends on its Common Stock in the 
future, such dividends will be paid on the Common Stock granted to Mr.
O'Keefe.                                                              
(2)  Mr. Aldridge's employment by the Company commenced August 1, 1998.         

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         The following table sets forth the fiscal year-end value of unexercised
options held by the Named Executive Officers at the end of fiscal 2000.         

 FISCAL YEAR-END OPTION VALUES

                                                        [Enlarge/Download Table]


                                             NO. OF SECURITIES UNDERLYING     VALUE OF UNEXERCISED      
                                                UNEXERCISED OPTIONS AT        IN-THE-MONEY OPTIONS      
                                                    FISCAL YEAR END           AT FISCAL YEAR END(1)     
                                             ----------------------------  -----------------------------
                                             EXERCISABLE    UNEXERCISABLE  EXERCISABLE    UNEXERCISABLE 
                                             -----------    -------------  -----------    --------------
                                                                                                        
Patrick O'Keefe ............................    100,000        300,000          -                --     
Jack P. Healey .............................      3,333          6,667          -                --     
Thomas W. Aldridge, Jr .....................      7,500          7,500          -                --     

------------                                                                    
(1)      As required by the rules of the Securities and Exchange Commission, the
      value of unexercised in-the-money options is calculated based on the
        closing sale price of the Company's Common Stock on the New York Stock
   Exchange ("NYSE") as of the last business day of its fiscal year,
        December 31, 2000, which was $1.75 per share. Because the closing sale
        price of the Company's Common Stock on December 31, 2000 was less than
the exercise price of the options, no unexercised options were
in-the-money.                                                 

CERTAIN TRANSACTIONS

FORMATION OR COMBINATION RELATED MATTERS                                        

        Upon consummation of the formation of the Company (the "Combination"),
the Company succeeded to certain real property leases as lessee with respect to 
which stockholders of the Company (former stockholders of certain of the nine   
companies that formed the Company (the "Founding Companies")), or their         
affiliates, are the lessors. The Company believes that the monthly rent and     
other terms of each of these leases are not less favorable to the Company than  
could be obtained from unaffiliated parties for comparable properties in the    
respective geographic areas. Specifically, the Company leases property in (1)   
Spokane, Washington from a company in which the father of William J. Burkland   
has a 25% ownership interest; (2) Whitehall, Pennsylvania from Andrew B.        
Shearer; (3) Lancaster, Williamsport, and York, Pennsylvania from a trust of    
which Andrew B. Shearer's mother is the trustee and he and his father, sisters, 
and deceased brother's estate are the beneficiaries; (4) Reading, Pennsylvania  
from a trust of which Andrew B. Shearer and his father, mother, sisters, and    
deceased brother's estate are the beneficiaries; and (5) St. Louis and          
Springfield, Missouri from a company in which George L. Sachs, Jr. has a 15%    
ownership interest. Messrs. Burkland, Shearer, and Sachs are directors of the   
Company, and Mr. Shearer is also a principal stockholder of the Company.        

        Prior to the Combination, B&J had agreed to pay Charles T. Burkland, a
former president and a significant stockholder of B&J, a non-qualified, unfunded
pension in the amount of $10,000 per month during his lifetime and thereafter to
his spouse, if she survived him, for her lifetime. As a condition to B&J's      
participation in the Combination, B&J made a lump sum payment of $1.11 million  
to Charles T. Burkland in exchange for relief from its obligation to make such  
monthly pension payments through 2012. As part of that arrangement, the Company 
agreed to make such $10,000 monthly payments beginning in January 2013, if      
either Mr. Burkland or his spouse is then surviving, and continuing thereafter  
until both of them are deceased. In addition, the Company has agreed to pay 75% 
of the health and dental insurance costs of Mr. Burkland and his spouse until   
their deaths. Mr. Burkland is 73 years old, and his spouse is 69 years old. Mr. 
Burkland is the father of William J. Burkland, a director of the Company.       

OTHER RELATED PARTY MATTERS                                                     

         During 2000, the Company has paid approximately $1,020,157 in insurance
premiums, of which $70,000 constituted a servicing fee, to J. Smith Lanier &    
Co., an independent insurance agency, in connection with business and health    
insurance purchased by the Company. William T. Parr, a director of the Company, 
is the Vice Chairman of, and has less than 10% ownership interest in, J. Smith  
Lanier & Co.                                                                    

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     In July 1998, an operating subsidiary of the Company entered into a
real property lease as lessee with respect to which Andrew B. Shearer is the    
lessor. The property is located in York, Pennsylvania and serves as the         
Company's primary distribution center in the Mid-Atlantic region. The term of   
the lease is for ten years and expires in December, 2008 with annual rent under 
the lease of $319,215. The Company believes that the annual rent and other terms
of this lease are not less favorable to the Company than could be obtained from 
unaffiliated parties for a comparable property in the York, Pennsylvania area.  
Mr. Shearer is a principal stockholder and director of the Company.             

POLICY RESPECTING RELATED PARTY TRANSACTIONS                                    

    On July 10, 1997, the Board of Directors adopted a policy that any
transactions between the Company and any of its officers, directors, or         
principal stockholders or affiliates must be on terms no less favorable than    
those that could be obtained from unaffiliated parties in comparable situations 
and must be approved by a majority of the disinterested members of the Board of 
Directors. The Audit Committee of the Board of Directors is responsible for     
reviewing all related party transactions on a continuing basis and potential    
conflict of interest situations where appropriate.                              

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION                     

    Messrs. Barth, Fenoglio, Parr, and Seigel served as members of the
Company's Compensation Committee throughout the 2000 fiscal year. Mr. Seigel is 
the Chairman of the Board of the Company. None of the other members of the      
Committee is an officer or former officer of the Company.                       

      None of the executive officers of the Company served as either (1) a
member of the Compensation Committee or (2) a director of any entity of which   
any member of the Compensation Committee is an executive officer. In addition,  
none of the executive officers of the Company served as a member of the         
compensation committee of any entity of which any member of the Board of        
Directors is an executive officer.                                              

REPORT OF COMPENSATION COMMITTEE

This report sets forth the factors currently being used in the
Company's compensation programs for its executive officers and describes the    
basis on which fiscal 2000 compensation determinations were made with respect to
the executive officers of the Company, including the Chief Executive Officer and
the other Named Executive Officers of the Company.                              

GENERAL COMPENSATION PHILOSOPHY                                                 

        The Compensation Committee (the "Committee") seeks to develop programs
and policies for the compensation of the Company's executive officers that will 
link the compensation of executive officers to the performance of the Company   
and its business units. The Committee intends that such a link will align the   
financial interests of the Company's executive officers with those of its       
stockholders.                                                                   

   The Committee has identified several objectives for the Company's
compensation programs and policies, and it has determined that, to achieve these
objectives, the Company will use a combination of base salary, short-term and   
long-term incentive plans, and performance bonus criteria in order to tie       
executive compensation to increases in the Company's earnings and return on     
stockholders' equity. While specific amounts and parameters are established     
after further review and analysis, the Company's compensation programs will     
consist of the following basic components:                                      

-        Reasonably competitive base salaries, in light of the
          Company's stage of development and position within its
industry;                                   

         -        The issuance of performance-based stock options and restricted
shares of stock;                            

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     -        Potentially significant annual incentive bonuses under the
Company's Management Incentive Program; and 

-        Customary benefits.                                  

        The Committee's formulation of the Company's compensation programs and
policies for executive officers is monitored and reviewed on an ongoing basis in
order for the Committee to determine the appropriateness of the compensation    
paid to each of the executive officers of the Company from time to time in light
of its compensation philosophy and developments in the Company's industry and   
generally. While promoting initiative and providing incentives for superior     
performance by executives on behalf of the Company for the benefit of its       
stockholders, the Committee also seeks to assure that the Company is able to    
compete for and retain talented personnel who will lead the Company in achieving
levels of financial performance that will enhance stockholder value over the    
long-term as well as the short-term.                                            

BASE SALARIES                                                                   

        The Company has established the current base salaries of its executive
officers without reference to specific Company performance criteria. The base   
salary for the Chief Executive Officer during 2000 was established in           
negotiations with the approval of the Committee. Such base salaries were        
intended to be competitive when compared to amounts paid to executive officers  
of similar businesses in structure, size, and market orientation. The Committee 
reviews salaries of the Company's executive officers on an annual basis.        

STOCK INCENTIVE PLAN                                                            

During fiscal 2000, the Company granted options to purchase an
aggregate of 12,500 shares of Company Common Stock to 25 employees, none of     
which were granted to any of the Company's executive officers, pursuant to its  
Stock Incentive Plan. Under the Stock Incentive Plan, the Company is permitted  
to issue stock options that are qualified as incentive stock options under the  
Internal Revenue Code (the "IRC"), options that are not so qualified, direct    
awards of shares of stock, stock appreciation rights and other forms of awards  
that use (or are based on) shares of Common Stock. To date, the Company has     
issued only non-qualified stock options under the Stock Incentive Plan.         

        Stock options are awarded to executive officers and other persons both
to recognize outstanding contributions that they have made to the Company's     
financial performance, and to encourage and provide incentives to continue to   
make such contributions. While the Company has the flexibility to grant         
below-market options, its policy has been to grant options at fair market value,
with vesting over a period of several years, in order to better align the       
personal interests of optionees with those of the stockholders of the Company.  

ANNUAL INCENTIVE COMPENSATION                                                   

 The Company provides annual incentive compensation to executive
officers of the Company through its Management Incentive Program. The Management
Incentive Program is designed to offer compensation opportunities that are tied 
directly to Company performance. The Management Incentive Program, at least as  
it relates to designated executive officers of the Company, is administered by a
subcommittee of the Committee that will include only those members who qualify  
as "outside" directors under Section 162(m) of the IRC. Pursuant to the         
Management Incentive Program, the subcommittee establishes the specific criteria
and performance measures each year that are applicable to the Company's         
designated Executive Officers for the purpose of earning incentive compensation 
or bonuses for such year under the Management Incentive Program. Incentive      
compensation for executive officers is currently based upon attaining certain   
earnings per share targets approved by the Board of Directors.                  

BENEFITS                                                                        

      Executives are also eligible to participate in the Company's regular
employee benefit programs, including a 401(k) retirement savings plan, group    
medical and dental coverage, group life insurance, group long-term disability   
insurance, and other group benefit plans. Substantially all decisions with      
respect to such benefits are made on a group basis, and no individual decisions 
were made with respect to the executive officers during fiscal 2000.            

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COMPENSATION OF CEO                                                             

   Mr. O'Keefe, who became the Company's Chief Executive Officer and
President on December 1, 1999, receives an annual base salary of $275,000, which
will be reviewed annually, and is eligible for an annual bonus determined by the
Board of Directors. In connection with his employment, Mr. O'Keefe also received
100,000 shares of Common Stock, which are restricted and subject to forfeiture  
over a four year period from December 1, 1999, and options to purchase 400,000  
shares of Common Stock that vest in 25% increments on the anniversary of the    
date of grant. In January 2001, the Company granted Mr. O'Keefe options to      
purchase 100,000 shares of common stock under the Company's Stock Incentive Plan
that vest in 25% increments on the date of grant and the first three            
anniversaries of the date of grant. The Committee believes that the compensation
terms of Mr. O'Keefe's employment (as well as the terms for the initial purchase
of shares and the grant of options, in the circumstances in which they were     
granted) are consistent with the fundamental elements that comprise the         
Company's executive compensation philosophy. The Committee believes that the    
base salary to Mr. O'Keefe is competitive with the Company's industry, and the  
opportunities for value from the shares of restricted stock and stock options   
are tied to increases in the price levels of the Company's Common Stock and thus
to enhanced value to the Company's stockholders. Mr. O'Keefe is also eligible to
participate in employee benefit plans as generally made available to senior     
management of the Company, including the Stock Incentive Plan and the Management
Incentive Program.                                                              

David K. Barth -- William Fenoglio -- William T. Parr -- Richard M. Seigel

 REPORT OF AUDIT COMMITTEE

     The Audit Committee is comprised of two independent members and one
member that is not classified as independent by the listing standards of the New
York Stock Exchange ("NYSE"). Richard M. Seigel is not considered independent   
under the NYSE's standards because he served as Acting President and Chief      
Executive Officer from March 8, 1999 until November 30, 1999, during which time,
the Company conducted a search for a permanent President and Chief Executive    
Officer. Even though Mr. Seigel is not considered independent by the standards  
of the NYSE, the Board of Directors determined to use the limited exemption in  
accordance with Section 303.02(D) of the NYSE listing standards to appoint him  
to the Audit Committee. The Board made this determination based upon Mr.        
Seigel's knowledge of distribution processes and issues specific to the         
integration of highly acquisitive companies. The Audit Committee acts under a   
written charter adopted and approved by the Board of Directors in August 2000. A
copy of the Audit Committee Charter is attached to this proxy statement as      
Appendix C.                                                                     

         The responsibilities of the Audit Committee include recommending to the
Board of Directors an accounting firm to be engaged as independent accountants. 
In addition, the Audit Committee is responsible for recommending to the Board of
Directors that the financial statements be included in the Annual Report to     
shareholders.                                                                   

        In keeping with its responsibilities, the Audit Committee has reviewed
and discussed the audited financial statements for the fiscal year ended        
December 31, 2000 with management, and has discussed with Arthur Andersen LLP,  
the independent public accountants, the matters required to be discussed by the 
Statement on Auditing Standards No. 61 (Communication with Audit Committees).   
The Audit Committee has also received the written disclosures and the letter    
from Arthur Andersen LLP required by Independence Standards Board Standard No. 1
(Independence Discussion with Audit Committees) and the Audit Committee has     
discussed the independence of Arthur Andersen LLP with that firm.               

    Based on the reports and discussions described in this report, and
subject to the limitations on the role and responsibilities of the Committee    
referred to above and in the Audit Committee Charter, the Committee recommended 
to the Board of Directors that the audited consolidated financial statements of 
the Company be included in the Annual Report on Form 10-K for the year ended    
December 31, 2000 for filing with the Securities and Exchange Commission.       

     This report is respectfully submitted by the Audit Committee of the
Board of Directors.                                                             

 William R. Fenoglio -- William T. Parr -- Richard M. Seigel

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 STOCK PERFORMANCE GRAPH

        Set forth below is a line graph comparing the percentage change in the
cumulative total shareholder return of the Company's Common Stock against the   
cumulative total return of the Russell 2000 Index and the Media General SIC Code
508 - machinery, equipment and supplies - Index for the period commencing on    
September 24, 1997 and ending on December 31, 2000.                             

COMPARE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG INDUSTRIAL DISTRIBUTION GROUP, INC.,
RUSSELL 2000 INDEX AND SIC CODE INDEX 

[GRAPH] 

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INDEPENDENT PUBLIC ACCOUNTANTS

     The Board of Directors, upon recommendation of the Audit Committee,
appoints each year the firm that will serve as the Company's independent public 
accountants. The Board has appointed Arthur Andersen LLP, which firm served as  
independent public accountants for the Company during the past fiscal year, to  
serve as such accountants for the current fiscal year. Such appointment is not  
subject to ratification or other vote by the stockholders.                      

      A representative of Arthur Andersen LLP is expected to be present at
the Annual Meeting, with the opportunity to make a statement if he or she       
desires to do so, and is expected to be available to respond to appropriate     
questions.                                                                      

AUDIT FEES                                                                      

       Arthur Andersen LLP billed the Company aggregate fees of $308,500 for
professional services rendered for the audit of financial statements for fiscal 
year 2000, and the reviews of financial statements included in Forms 10-Q filed 
during fiscal year 2000.                                                        

ALL OTHER FEES                                                                  

      Arthur Andersen LLP billed the Company aggregate fees of $26,500 for
all other services rendered to it during fiscal year 2000.                      

 STOCKHOLDERS' PROPOSALS FOR 2002 ANNUAL MEETING

  Any stockholder who wishes to present a proposal appropriate for
consideration at the Company's 2002 Annual Meeting of Stockholders must submit  
the proposal in proper form to the Company at its address set forth on the first
page of this Proxy Statement no later than November 30, 2001 for the proposal to
be considered for inclusion in the Company's proxy statement and form of proxy  
relating to such Annual Meeting.                                                

 OTHER MATTERS

         All of the expenses involved in preparing, assembling, and mailing this
Proxy Statement and the materials enclosed herewith and soliciting proxies will 
be paid by the Company. It is estimated that such costs will be nominal. The    
Company may reimburse banks, brokerage firms and other custodians, nominees, and
fiduciaries for expenses reasonably incurred by them in sending proxy materials 
to beneficial owners of stock. The solicitation of proxies will be conducted    
primarily by mail but may include telephone, telegraph, or oral communications  
by directors, officers, or regular employees of the Company, acting without     
special compensation.                                                           

       The Board of Directors is aware of no other matters, except for those
incidental to the conduct of the Annual Meeting, that are to be presented to    
stockholders for formal action at the Annual Meeting. If, however, any other    
matters properly come before the Annual Meeting or any postponement,            
adjournment, or adjournments thereof, it is the intention of the persons named  
in the proxy to vote the proxy in accordance with their judgment.               

         Stockholders are urged to fill in, date, and sign the accompanying form
of proxy and return it to the Company as soon as possible.                      

                                   BY ORDER OF THE BOARD OF DIRECTORS,

              Jack P. Healey
         Secretary

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APPENDIX A

THE BYLAWS OF INDUSTRIAL DISTRIBUTION GROUP, INC. SHALL BE AMENDED BY DELETING  
SECTION 3.2 OF ARTICLE THREE THEREOF IN ITS ENTIRETY AND REPLACING IN LIEU      
THEREOF THE FOLLOWING SECTION 3.2:                                              

         "3.2 NUMBER, ELECTION AND TERM OF OFFICE. The number of directors shall
be fixed by resolution of the Board of Directors or of the stockholders from    
time to time and, until otherwise determined, shall be three (3); provided,     
however, that the number of directors shall not at any time be less than three  
(3) or more than fifteen (15); and further provided, that no decrease in the    
number of directors shall have the effect of shortening the term of an incumbent
director. The terms of office of the directors shall be staggered by dividing   
the total number of directors into three classes, with each class accounting for
one-third, as near as may be, of the total number of directorships. The terms of
directors in the first class shall expire at the first annual stockholders'     
meeting after their election, the terms of the second class shall expire at the 
second annual stockholders' meeting after their election, and the terms of the  
third class shall expire at the third annual stockholders' meeting after their  
election. At each annual stockholders' meeting held thereafter, directors shall 
be chosen for a term of three years to succeed those whose terms expire. If the 
number of directorships is changed, any increase or decrease shall be so        
apportioned among the classes as to make all the classes as nearly equal in     
number as possible, and when the number of directorships is increased and newly 
created directorships are filled by the Board, the terms of the additional      
members shall expire at the next election by the stockholders of directors in   
the class in which such member was placed. Each director, except in the case of 
his or her earlier death, written resignation, retirement, disqualification or  
removal, shall serve for the duration of his or her term, as staggered, and     
thereafter until his or her successor, if there is to be one, shall have been   
elected and qualified."                                                         

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APPENDIX B

THE CERTIFICATE OF INCORPORATION OF INDUSTRIAL DISTRIBUTION GROUP, INC. SHALL BE
AMENDED BY DELETING SECTION (B) OF ARTICLE EIGHTH THEREOF IN ITS ENTIRETY AND   
REPLACING IN LIEU THEREOF THE FOLLOWING SECTION (B):                            

       "(b) The directors shall be classified as Class I, Class II and Class
III Directors and will initially serve one, two and three-year terms,           
respectively. At each annual meeting following the initial classification and   
election, the successors to the class of directors whose terms expire at that   
meeting shall be elected for a term of office to expire at the third succeeding 
annual meeting after their election. Directors shall hold office until their    
respective successors, if there be any, have been duly elected and qualified. At
each annual meeting of stockholders at which a quorum is present, the person    
receiving a plurality of the votes cast with respect to an election to a        
position as a director shall be elected to the position. Election of directors  
need not be by written ballot unless the Bylaws of the Corporation so provide." 

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APPENDIX C

 AUDIT COMMITTEE CHARTER

I.       PURPOSE                                                                

       The primary function of the Audit Committee is to assist the Board of
Directors in fulfilling its financial and other oversight responsibilities by:  

       -        Serving as an independent and objective party to monitor the
               Company's financial statements, financial reporting process
and internal control system.                

      -        Reviewing and appraising the Company's outside auditors and
internal financial management.              

        -        Providing an open avenue of communication among the Company's
              outside auditors, management, including internal financial
management, and the Board.                  

       The Audit Committee will further carry out its purpose by engaging in
the activities enumerated in Section IV of this Charter.                        

II.      MEMBERSHIP REQUIREMENTS                                                

         Members of the Audit Committee shall meet the following qualifications,
or such other qualifications as may be imposed from time to time by the Board,  
by law or by the listing requirements of any stock exchange or automated        
quotation system upon which a security of the Company may be traded or quoted.  

(A)      Independence                                         

      The Audit Committee shall be comprised of three or more directors as
determined by the Board. Except as provided below, all members of the Audit     
Committee shall be free of any relationship to the Company that may interfere   
with the exercise their independence from management and the Company.           

         In addition to the general requirement of independence described above,
the following restrictions shall apply to the members of the Audit Committee:   

(1)      Employees. A director who is an employee (including a
         non-employee executive officer) of the Company or any of its affiliates
      may not serve on the Audit Committee until three years following the
termination of his or her employment.                         

  (2)      Business Relationship. A director (a) who is a partner,
       controlling stockholder, or executive officer of an organization that
       has a business relationship with the Company, or (b) who has a direct
         business relationship with the Company may serve on the Audit Committee
only if the Board determines in its business judgment that the
 relationship does not interfere with the director's exercise of
independent judgment. In making a determination regarding the 
       independence of a director pursuant to this paragraph, the Board will
      consider, among other things, the materiality of the relationship to
       the Company, to the director, and, if applicable, to the organization
with which the director is affiliated.                        

        A "business relationship" can include commercial, industrial, banking,
       consulting, legal, accounting and other relationships. A director can
       have this relationship directly with the Company, or the director can
      be a partner, officer or employee of an organization that has such a
         relationship. The director may serve on the Audit Committee without the
      above-referenced Board determination after three years following the
        termination of, as applicable, either (x) the relationship between the
         organization with which the director is affiliated and the Company, (y)
  the relationship between the director and his or her partnership
       status, stockholder interest or executive officer position or (z) the
    direct business relationship between the director and the Company.

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        (3)      Cross Compensation Committee Link. A director who is employed
   as an executive of another corporation where any of the Company's
        executives serves on that corporation's compensation committee may not
serve on the Audit Committee.                                 

       (4)      Immediate Family. A director who is a spouse, parent, child,
       sibling, mother-in-law, father-in-law, brother-in-law, sister-in-law,
         son-in-law, daughter-in-law or who shares the home of an individual who
        is an executive officer of the Company or any of its affiliates cannot
serve on the Audit Committee until three years following the  
termination of such employment relationship.                  

   Notwithstanding the preceding limitations, one director who is no
longer an employee or who is an immediate family member of a former executive   
officer of the Company or its affiliates, but is not considered independent     
pursuant to these provisions due to the three-year restriction period, may be   
appointed, under exceptional and limited circumstances, to the Audit Committee  
if the Board determines in its business judgment that membership on the Audit   
Committee by the individual is required by the best interests of the Company and
its stockholders. This exception shall not apply to persons disqualified for any
other reason described above.                                                   

(B)      Financial Literacy                                   

      Each member of the Audit Committee shall be financially literate, or
must become financially literate within a reasonable period of time after his or
her appointment to the Audit Committee; and at least one member of the Audit    
Committee must have accounting or related financial management expertise.       

(C)      Election, Removal and Replacement                    

   The members of the Audit Committee shall be elected by the Board.
Unless a Chair is elected by the full Board, the members of the Audit Committee 
may designate a Chair.                                                          

     In the event a director becomes disqualified from membership on the
Audit Committee, such director shall be removed as soon as practicable from     
service on the Audit Committee by the Board. In the event the removal,          
resignation, retirement, death or other termination of a director from service  
on the Audit Committee results in the Audit Committee comprising less than three
members, the Board shall elect a new qualified director to the Audit Committee  
as soon as practicable. If such election to the Audit Committee requires the    
election by the shareholders of the Company or the directors of new director to 
the Board, the Company and the Board may consult with any stock exchange or     
automated quotation system upon which a security of the Company may be traded or
quoted.                                                                         

III.     MEETINGS AND GOVERNANCE                                                

         The Audit Committee shall meet at least annually in connection with the
Company's annual audit, or more frequently as circumstances dictate. In         
addition, the Audit Committee or its Chair shall meet to review the Company's   
quarterly or other interim financial statements, as appropriate. Such meetings  
may be held in or out of the presence of the Company's management, outside      
auditors or both, as appropriate. Other governance matters not addressed herein 
shall be governed by the Company's articles of incorporation or bylaws.         

IV.      DUTIES, RESPONSIBILITIES AND ACTIVITIES                                

      To fulfill its purpose, the Audit Committee has the following duties
and responsibilities and shall engage in the following activities:              

 (A)      Review of Charter and Financial Statements and Reports

      The Audit Committee shall review the Company's financial statements,
reports and other financial information, in conjunction with the Company's      
internal financial management and outside auditors, as appropriate. Such review 
shall include candid discussions of the quality--not merely the                 
acceptability--of the Company's accounting principles as applied in its         
financial reporting. Reviews shall occur prior to dissemination of the          
statement, report or other document to a third party or the public. Without     
limitation, the Audit Committee shall review:                                   

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   -        The annual financial statements and any reports or other
               financial information, including any certification, report,
        opinion, or review rendered by the outside auditors.

      -        Any quarterly or other interim financial statements and any
         reports or other financial information, including any
             certification, report, opinion, or review rendered by the
          outside auditors. The Chair of the Audit Committee may
             represent the entire Audit Committee for purposes of this
review.                                     

 -        This Charter on an annual basis, or more frequently as
circumstances dictate.                      

        -        As circumstances dictate and as deemed necessary or advisable
                 from time to time, any material internal financial reports to
         management prepared by internal financial management.

        -        As circumstances dictate and as deemed necessary or advisable
                  from time to time, any financial statements and any reports or
             other financial information, including any certification,
               report, opinion, or review by accountants, of the Company's
franchisees.                                

(B)      Relationship with Outside Auditors                   

       The Audit Committee's and the Board's relationship with the Company's
outside auditors shall governed by the following principles:                    

       -        The Company's outside auditors are ultimately accountable to
the Audit Committee and the Board.          

       -        The Audit Committee and the Board are ultimately responsible
               for selecting, evaluating and, where appropriate, replacing
the Company's outside auditors.             

       -        The Audit Committee is responsible for ensuring receipt from
                  the outside auditors of a formal written statement delineating
          all relationships between the outside auditors and the
            Company. The Audit Committee is responsible for actively
                 engaging in a dialogue with the outside auditors with respect
                  to any disclosed relationships or services that may impact the
             objectivity and independence of the outside auditors. The
         Audit Committee is further responsible for taking, or
           recommending that the Board take, appropriate action in
                 response to the outside auditors' report to satisfy itself of
the outside auditors' independence.         

      (C)      Relationship with Company and Internal Financial Management

       The Audit Committee's and the Board's relationship with the Company's
management, including its internal financial management, shall governed by the  
following principles:                                                           

         -        The Audit Committee is responsible for reviewing the integrity
               of the Company's financial reporting process, both internal
and external.                               

       -        The Audit Committee is responsible for reviewing the quality
                 and appropriateness of the Company's accounting principles as
applied in its financial reporting.         

 -        The Audit Committee is responsible for considering and
             approving, if appropriate, major changes to the Company's
                 auditing and accounting principles and practices as suggested
             by the outside auditors or management, including internal
financial management.                       

(D)      Audit Committee Report                               

         The Audit Committee shall prepare an Audit Committee Report annually in
connection with the Company's annual audit. The Report shall address such       
matters as deemed appropriate by the Audit Committee, but shall state whether   
the Audit Committee:                                                            

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 -        Reviewed and discussed the Company's audited financial
statements with management.                 

       -        Discussed with the outside auditors such qualitative matters
                concerning the Company's accounting principles as applied in
its financial reporting as are appropriate. 

        -        Received from the outside auditors a formal written statement
                  delineating all relationships between the outside auditors and
the Company.                                

       -        Recommends to the Board that the Company's audited financial
             statements be included in the Company's public filings or
other publicly available reports.           

         The names of the members of the Audit Committee shall appear at the end
of the Report.                                                                  

(E)      Other Activities                                     

       The Audit Committee may perform such activities from time to time, as
the Board deems appropriate. Without limitation, such activities may be assigned
to the Audit Committee because of the independence of its members.              

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COMMON STOCK
OF INDUSTRIAL DISTRIBUTION GROUP, INC.

 THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE
MAY 16, 2001 ANNUAL MEETING OF STOCKHOLDERS.

        The undersigned hereby appoints Patrick S. O'Keefe and Jack P. Healey,
and each of them, the proxy of the undersigned to vote the Common Stock of the  
undersigned at the Annual Meeting of Stockholders of INDUSTRIAL DISTRIBUTION    
GROUP, INC. (the "Company") to be held on May 16, 2001, and any adjournment or  
postponement thereof.                                                           

1.       Amendments to the Company's Bylaws and Certificate of Incorporation    
relating to the classification of the Board of Directors                        

[   ] FOR             [  ]   AGAINST           [  ]  ABSTAIN  

2.       Election of directors                                                  

Class I (term expiring 2002):  David K. Barth, George L. Sachs, Jr.             

FOR all nominees for director listed above (except as marked to the 
----- contrary).                                                                

WITHHOLD AUTHORITY to vote for all nominees listed above.           
-----                                                                           
  WITHHOLD AUTHORITY to vote for an individual nominee(s). Write name(s)
----- below.                                                                    

-------------------------------------------                         

Class II (term expiring 2003): William J. Burkland, William R. Fenoglio, William
T. Parr                                                                         

FOR all nominees for director listed above (except as marked to the 
----- contrary).                                                                

WITHHOLD AUTHORITY to vote for all nominees listed above.           
-----                                                                           

  WITHHOLD AUTHORITY to vote for an individual nominee(s). Write name(s)
----- below.                                                                    

-------------------------------------------                         

Class III (term expiring 2004): Patrick S. O'Keefe, Andrew B. Shearer, Richard  
M. Seigel                                                                       

FOR all nominees for director listed above (except as marked to the 
----- contrary).                                                                

WITHHOLD AUTHORITY to vote for all nominees listed above.           
-----                                                                           

  WITHHOLD AUTHORITY to vote for an individual nominee(s). Write name(s)
----- below.                                                                    

-------------------------------------------                         

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3.       In accordance with their best judgment with respect to any other       
matters that may properly come before the meeting.            

THE BOARD OF DIRECTORS FAVORS A VOTE "FOR" THE AMENDMENTS TO THE BYLAWS AND     
CERTIFICATE OF INCORPORATION AND THE ELECTION AS DIRECTORS OF THE PERSONS NAMED 
IN THE PROXY AND ACCOMPANYING PROXY STATEMENT AND UNLESS INSTRUCTIONS TO THE    
CONTRARY ARE INDICATED IN THE SPACE PROVIDED, THIS PROXY WILL BE SO VOTED.      

                                        ----------------------------------
                                       Please sign this Proxy exactly as
                                name appears on the Proxy.

                                      Note:  When signing as attorney,
                                          trustee, administrator, or guardian,
                                         please give your title as such.  In
                                           the case of joint tenants, each joint
                      owner must sign.

Date:                           , 2001                                          
---------------------------                                           

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Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘PRE 14A’ Filing	Date	First	Last	Other Filings

	11/30/01	16
For Period End:	5/16/01	2	23	DEF 14A
	3/30/01	4		S-8
	3/20/01	3	4
Filed on:	3/2/01
	2/28/01	5	6
	12/31/00	4	15	10-K405, 5
	12/1/99	8	14	3, 8-K
	11/30/99	9	14
	3/8/99	9	14
	3/4/99	9		3
	8/1/98	10
	9/24/97	15		424B1
	7/10/97	12
				List all Filings

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Filing Submission 0000950144-01-003271 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

Industrial Distribution Group Inc – ‘PRE 14A’ for 5/16/01

On: Friday, 3/2/01, at 3:44pm ET · For: 5/16/01 · Accession #: 950144-1-3271 · File #: 1-13195

Preliminary Proxy Solicitation Material — Schedule 14AFiling Table of Contents

Document Table of Contents

Dates Referenced Herein and Documents Incorporated by Reference

Preliminary Proxy Solicitation Material — Schedule 14A
Filing Table of Contents