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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. ___)
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [x]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
AMERICAN EDUCATIONAL PRODUCTS, INC.
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(Name of Registrant as Specified In Its Charter)
Neuman & Cobb, 1507 Pine Street, Boulder, Colorado 80302
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(Name of Person 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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
_________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
_________________________________________________________________
(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):
___________________________________________________
(4) Proposed maximum aggregate value of transaction: _______________
(5) Total fee paid: ________________________________________________
[ ] Fee Paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: _______________________________________
(2) Form, Schedule or Registration Statement No.: __________________
(3) Filing Party: __________________________________________________
(4) Date Filed: ____________________________________________________
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AMERICAN EDUCATIONAL PRODUCTS, INC.
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 4, 1997
A Special Meeting of Shareholders of American Educational Products, Inc. ("AEP"
or the "Company") will be held at the principal executive offices of the
Company, 5350 Manhattan Circle, Suite 210, Boulder, Colorado 80303 on April 4,
1997 at 10:00 o'clock a.m. Mountain Standard Time for the purpose of
considering and voting upon the following:
1. The adoption and approval of a reverse split of the issued and
outstanding shares of the Company's Common Stock and issued and
outstanding options, warrants and other rights convertible into
shares of Common Stock of up to one-for-five (1-for-5) at the future
discretion and subject to the determination of the Board of Directors
(the "Reverse Split") and an amendment to the Company's Articles of
Incorporation increasing the par value per share of its authorized
Common Stock by the same factor as the Reverse Split
2. Any other matters properly brought before said meeting or any
adjournment thereof.
Information relating to the above matters is set forth in the accompanying
Proxy Statement. Only holders of outstanding shares of AEP common stock of
record at the close of business on March 3, 1997 will be entitled to vote at
the meeting or any adjournment thereof.
Shareholders are cordially invited to attend the meeting in person.
IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, IT WOULD BE
APPRECIATED IF YOU WOULD PROMPTLY FILL IN, SIGN AND DATE THE ENCLOSED PROXY
STATEMENT AND RETURN IT IN THE ENCLOSED STAMPED ENVELOPE. Any proxy may be
revoked at any time before it is voted by written notice mailed or delivered to
the Secretary, by receipt of a proxy properly signed and dated subsequent to an
earlier proxy, and by revocation of a written proxy by request in person at the
Special Meeting of Shareholders. If not so revoked, the shares represented by
the proxy will be voted in accordance with your instruction on the proxy form.
AMERICAN EDUCATIONAL PRODUCTS, INC.
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Dr. Dale LaFrenz, Secretary
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AMERICAN EDUCATIONAL PRODUCTS, INC.
5350 MANHATTAN CIRCLE, SUITE 210
BOULDER, COLORADO 80303
PROXY STATEMENT
FOR
SPECIAL MEETING OF SHAREHOLDERS
This Proxy Statement is furnished to the Shareholders of American
Educational Products, Inc. (respectively, the "Shareholders" and the "Company")
in connection with the solicitation by the Company of proxies to be used at a
Special Meeting of Shareholders on April 4, 1997 (the "Meeting"), at the time,
place and for the purposes set forth in the accompanying Notice of Special
Meeting of Shareholders and at any adjournment thereof. When the accompanying
proxy is properly executed and returned, the shares of common stock it
represents will be voted at the Meeting and, where a choice has been specified
on a proxy, will be voted in accordance with such specification. If no choice
is specified on a proxy, the shares it represents will be voted FOR the
adoption and approval of a reverse split of the issued and outstanding shares
of the Company's Common Stock and issued and outstanding options, warrants and
other rights convertible into shares of Common Stock of up to one-for-five (1-
for-5) at the future discretion and subject to the determination of the Board
of Directors (the "Reverse Split") and an amendment to the Company's Articles
of Incorporation increasing the par value per share of its authorized Common
Stock by the same factor as the Reverse Split, and according to the judgment of
the persons named in the enclosed proxies as to any other action which may
properly come before the Meeting or any adjournment thereof.
ANY PROXY MAY BE REVOKED AT ANY TIME BEFORE IT IS VOTED BY WRITTEN NOTICE
MAILED OR DELIVERED TO THE SECRETARY, BY RECEIPT OF A PROXY PROPERLY SIGNED AND
DATED SUBSEQUENT TO AN EARLIER PROXY, AND BY REVOCATION OF A WRITTEN PROXY BY
REQUEST IN PERSON AT THE SPECIAL MEETING OF SHAREHOLDERS. IF NOT SO REVOKED,
THE SHARES REPRESENTED BY THE PROXY WILL BE VOTED IN ACCORDANCE WITH THE
INSTRUCTIONS ON THE PROXY FORM.
This Statement is being mailed on or about March 4, 1997, to Shareholders
eligible to vote at the Meeting.
The Company is bearing all costs of soliciting proxies, and expressly
reserves the right to solicit proxies otherwise than by mail. The solicitation
of proxies by mail may be followed by telephone, telegraph or other personal
solicitations of certain Shareholders and brokers by one or more of the
Directors or by Officers or employees of the Company. The Company may request
banks and brokers or other similar agents or fiduciaries for the voting
instructions of beneficial owners and reimburse the expenses incurred by such
agents or fiduciaries in obtaining such instructions. As of the date of this
mailing, however, the Company has not made any contracts or arrangements for
such solicitations, hence it cannot identify any parties or estimate the cost
of such solicitation.
Only Shareholders of record as of the close of business on March 3, 1997
(the "Record Date"), will be entitled to vote at the Meeting. Representation
of a majority of the Company's shares of common stock outstanding on such date,
either in person or by proxy, constitutes a quorum for the Meeting. When a
quorum is present, unless otherwise indicated, the vote by the holders of a
majority of the shares represented at the Meeting shall decide the proposals to
be voted upon at the Meeting. As of the Record Date, the Company had
outstanding 4,576,551 shares of common stock ("shares"), with each share being
entitled to one vote.
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1. SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS.
The following table sets forth, as of the date of this Proxy Statement,
and as adjusted for the sale of Option Stock, the stock ownership of each
person known by the Company to be the beneficial owner of five (5%) percent or
more of the Company's common stock, all Directors individually and all
Directors and Officers of the Company as a group. Each person has sole voting
and investment power with respect to the shares shown, except as noted.
<TABLE>
<CAPTION>
Title of Name and Address Amount and Nature Percent
Class of Beneficial Owner of Beneficial Ownership of Class(1)
- - -------- ------------------- ----------------------- ------------
<S> <C> <C> <C>
Common Paul D. Whittle 258,095 5.64%
Stock 1013 Turnberry Circle
Louisville, Colorado 80027
" Dr. Robert A. Scott 132,200(2) 2.82%
32 Murray Avenue
Mahwah, N.J. 07430
" Clifford C. Thygesen 372,029(3) 7.98%
4893 Idylwild Trail
Boulder, Colorado 80301
" Clifford L. Neuman 95,000(4) 2.06%
1507 Pine Street
Boulder, Colorado 80302
" Frank L. Jennings 40,276(5) .88%
1050 Princeton Drive
Longmont, Colorado 80503
" Dr. Dale LaFrenz 40,000(6) .87%
14842 Hickory Court
Eden Prairie, Minnesota 55346
" Wayne R. Kirschling 40,000(7) .87%
123 East Adams
Muncie, Indiana 47305
" Rockies Fund, Inc. 200,000(8) 4.37%
4465 Northpark Drive
Colorado Springs, Colorado 80907
" Heartland Advisors, Inc. 1,035,500(9) 24.9%
790 North Milwaukee
Milwaukee, Wisconsin 53202
" Stephen G. Calandrella 205,000(10) 4.48%
7210 Antelope Lane
Colorado Springs, Colorado 80920
All Directors and Officers 919,505 18.68%
As A Group (7 Persons)
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(1) Shares not outstanding but deemed beneficially owned by virtue of the
individual's right to acquire them as of the date of this Proxy Statement,
or within 60 days of such date, are treated as outstanding when
determining the percent of the class owned by such individual and when
determining the percent owned by the group.
(2) Includes non-qualified options exercisable to purchase 10,000 shares of
Common Stock at an exercise price of $2.25 per share, granted to Dr. Scott
on May 9, 1991 in recognition of his services to the Company, non-
qualified options exercisable to purchase 4,000 shares of Common Stock at
an exercise price of $2.25 per share, granted November 16, 1993 pursuant
to the Formula Plan for directors, non-qualified options exercisable to
purchase 7,500 shares of Common Stock at an exercise price of $2.25 per
share granted May 23, 1994 pursuant to the Formula Plan for directors,
non-qualified options exercisable to purchase 50,000 shares of Common
Stock at an exercise price of $1.80 per share granted June 5, 1995, non-
qualified options exercisable to purchase 17,000 shares of Common Stock at
an exercise price of $1.25 per share granted February 29, 1996 and non-
qualified options exercisable to purchase 30,000 shares of Common Stock at
an exercise price of $1.25 per share granted March 29, 1996.
(3) Includes non-qualified options exercisable to purchase 5,000 shares of
Common Stock at an exercise price of $1.80 per share granted June 5, 1995
pursuant to the Formula Plan for Directors, incentive stock options
exercisable to purchase 29,500 shares of Common Stock at an exercise price
of $1.25 per share granted February 29, 1996 and incentive stock options
exercisable to purchase 50,000 shares of Common Stock at an exercise price
of $1.25 per share granted March 29, 1996. Also includes 200,000 shares
of Common Stock owned by The Rockies Fund, Inc., a Colorado-based business
development company of which Mr. Thygesen is a director. Does not include
common Stock Purchase Warrants exercisable commencing October 1, 1997 to
acquire up to 200,000 shares of Common Stock at an exercise price of $1.00
per share which are also owned by The Rockies Fund, Inc. Beneficial
ownership of shares held by The Rockies Fund, Inc. is exercised by its
Board of Directors whose members include Stephen Calandrella, Charles
Powell and Clifford C. Thygesen. Mr. Thygesen disclaims beneficial
ownership of all shares of common stock and warrants owned by The Rockies
Fund, Inc. for purposes of Section 16 of the Securities Exchange Act of
1934, as amended.
(4) Includes non-qualified options exercisable to purchase 4,000 shares of
Common Stock at an exercise price of $2.25 per share, granted November 16,
1993 pursuant to the Formula Plan for directors, non-qualified options
exercisable to purchase 5,000 shares of Common Stock at an exercise price
of $2.25 per share granted May 23, 1994 pursuant to the Formula Plan for
directors, incentive stock options exercisable to purchase 1,000 shares of
Common Stock at an exercise price of $2.25 per share granted under the
1990 ISOP, non-qualified options exercisable to purchase 5,000 shares of
Common Stock at an exercise price of $1.80 per share granted June 5, 1995
pursuant to the Formula Plan for Directors, and non-qualified options
exercisable to purchase 20,000 shares of Common Stock at an exercise price
of $1.25 per share granted March 29, 1996.
(5) Includes incentive stock options exercisable to purchase 24,000 shares of
Common Stock at an exercise price of $2.25 per share granted under the
1990 ISOP.
(6) Includes non-qualified options exercisable to purchase 20,000 shares of
Common Stock at an exercise price of $1.59375 per share, granted February
9, 1995 pursuant to the Formula Plan for directors, and non-qualified
options exercisable to purchase 20,000 shares of Common Stock at an
exercise price of $1.25 per share granted March 29,1996.
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(7) Includes non-qualified options exercisable to purchase 20,000 shares of
Common Stock at an exercise price of $1.59375 per share, issued February
9, 1995 pursuant to the Formula Plan for directors, and non-qualified
options exercisable to purchase 20,000 shares of Common Stock at an
exercise price of $1.25 per share granted March 29,1996.
(8) Does not include Common Stock Purchase Warrants exercisable commencing
October 1, 1997 to purchase up to 200,000 additional shares of Common
Stock at an exercise price of $1.00 per share. The Rockies Fund, Inc. is a
Colorado Springs, Colorado based business development company regulated
under the Investment Company Act of 1940, as amended. Voting and
investment power with respect to these securities is exercised by the
Company's Board of Directors whose members are Stephen Calandrella,
Charles Powell and Clifford C. Thygesen.
(9) Heartland Advisors, Inc. is a Wisconsin corporation. Voting and
investment power with respect to securities held by Heartland Advisors,
Inc. is exercised by its Board of Directors. The foregoing information
has been furnished to the Company by Patrick Retzer, a representative of
Heartland Advisors, Inc., in a report of beneficial ownership on Schedule
13G, the accuracy of which has not been independently verified by the
Company.
(10) Includes non-qualified options exercisable to purchase 5,000 shares of
Common Stock at an exercise price of $.9375 per share granted August 20,
1996. Also includes 200,000 shares of Common Stock which are owned by The
Rockies Fund, Inc., a Colorado-based business development company of which
Mr. Calandrella is an officer and director. Does not include Common Stock
Purchase Warrants exercisable commencing October 1, 1997 to acquire up to
200,000 shares of Common Stock at an exercise price of $1.00 per share,
which are also owned by The Rockies Fund, Inc. Beneficial ownership of
shares held by The Rockies Fund, Inc. is exercised by its Board of
Directors whose members include Stephen Calandrella, Charles Powell and
Clifford C. Thygesen. Mr. Calandrella disclaims beneficial ownership of
all shares of common stock and warrants owned by The Rockies Fund, Inc.
for purposes of Section 16 of the Securities Exchange Act of 1934, as
amended.
</TABLE>
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2. REVERSE STOCK SPLIT
MECHANICS OF REVERSE STOCK SPLIT.
--------------------------------
The Board of Directors of the Company is seeking authorization of the
shareholders to undertake at their future discretion, a Reverse Split of the
outstanding shares of Common Stock and outstanding options, warrants and other
rights convertible into shares of Common Stock of the Company of up to one-for-
five (1-for-5). The Board of Directors requests the approval of the
Shareholders to effect a Reverse Split of the Company's securities at such time
in the future and by such a factor as the Board may determine in its sole
discretion to be in the best interest of the Company and its Shareholders.
Once implemented, the Reverse Split would result in each holder of the
Company's Common Stock on the Record Date owning a number of shares of Common
Stock reduced by the factor of the Reverse Split, and outstanding options,
warrants, other convertible rights will become exercisable to purchase a number
of shares of Common Stock reduced by the same factor at an exercise price per
share increased by the same factor. Fractional shares, options and warrants
shall be rounded to the nearest whole.
If the Reverse Split as currently described is approved by the Company's
Shareholders, the Company's Board of Directors will be authorized to implement
the Reverse Split within the foregoing parameters at any time and until such
time as such authorization is revoked by a majority vote of the Company's
Shareholders at a future regular or special meeting of the Company's
Shareholders. If and when implemented, the Company's Board of Directors will
cause the Company's stock transfer agent to provide each Shareholder of record
written notice of such implementation together with a description of the effect
thereof.
In order to effectuate the Reverse Stock Split, it will be necessary to
amend the Articles of Incorporation of the Company to increase the par value of
the outstanding shares of Common Stock by the same factor as the Reverse Split.
This change is required in order to avoid an inadvertent change in the stated
capital of the Company. However, while the par value of the Company's
outstanding shares of Common Stock will be changed, the total number of
authorized shares of Common Stock as set forth in the Company's Articles of
Incorporation shall remain unchanged. Thus, the Reverse Stock Split and
corresponding amendment to the Articles of Incorporation shall result in the
number of the Company's authorized capital stock remaining unchanged,
consisting of 100,000,000 shares of Common Stock and 50,000,000 shares of
Preferred Stock.
The Reverse Stock Split will not affect in any manner the relative rights
and preferences of holders of the Company's Common Stock. There will be no
change in the voting rights, right to participate in stock or cash dividends,
or rights upon the liquidation or dissolution of the Company of holders of
Common Stock; nor will the Reverse Stock Split affect in any manner the ability
of Shareholders to sell under Rule 144 or otherwise engage in market
transactions in accordance with federal and state securities laws.
The reverse stock split will also result in an automatic adjustment of any
and all outstanding options, warrants and other rights exercisable or
convertible into shares of the Company's Common Stock. The adjustment will
consist of an increase in the exercise price or conversion value per share by
the factor of the Reverse Split and a corresponding decrease in the number of
shares issuable upon exercise or conversion by the factor of the Reverse Split.
All other relative rights and preferences of holders of outstanding options,
warrants and other rights convertible or exercisable into shares of the
Company's common stock shall remain unchanged.
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REASONS FOR REVERSE STOCK SPLIT.
-------------------------------
Management of the Company has determined to recommend the reverse stock
split described in this Proxy Statement, as a precaution, in the event a
reverse stock split becomes necessary in order to continue to qualify the
Company's shares of common stock for inclusion on the NASDAQ Stock Market
("NASDAQ"). Among the numerous criteria which must be satisfied in order to
qualify for continued inclusion on NASDAQ is the requirement that the Company's
shares of common stock trade in a public trading market at a price of not less
than $1.00 per share. Further, NASDAQ maintenance standards are subject to
future change which could result in more stringent requirements, including a
higher minimum price per share.
While the Company currently meets the requirements for continued inclusion
on NASDAQ, the Company's Board of Directors believes that a reverse stock split
may become necessary in order to qualify the Company's shares of common stock
for continued inclusion on the NASDAQ Stock Market at a later date.
In the event the Company's securities are de-listed from the NASDAQ Stock
Market, the Company's securities would most likely be traded on the over-the-
counter market and be quoted on the OTC Electronic Bulletin Board. As such,
the Company's securities would be subject to a rule under the Securities
Exchange Act of 1934 that imposes additional stringent sales practice
requirements on broker/dealers who sell such securities. Those sale practice
requirements would adversely affect the ability of broker/dealers to sell the
Company's securities and consequently adversely affect the public market for
and the trading price of those securities. Accordingly, management of the
Company believes that if it is important for the Company's shares of common
stock to remain listed on the NASDAQ Stock Market.
Votes Required.
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The approval and adoption of the reverse stock split and amendment to the
Articles of Incorporation will require the affirmative vote of a majority of
the shares entitled to vote at the Meeting.
Management Recommendation.
-------------------------
THE BOARD OF DIRECTORS HAS CONCLUDED THAT THE PROPOSED REVERSE STOCK SPLIT
AND AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION ARE IN THE BEST
INTEREST OF THE COMPANY'S SHAREHOLDERS AND UNANIMOUSLY RECOMMEND THAT THE
SHAREHOLDERS APPROVE THIS PROPOSAL AT THE MEETING.
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3. OTHER MATTERS
The Company's management is not aware of other matters which may come
before the Meeting. The Directors' designees or other persons named in the
accompanying form of proxy will vote said proxy in accordance with their
judgment if any other matter does properly come before the Meeting. A majority
of those votes present at the Meeting cast in favor of any such matter will
result in the passage of such matter.
AMERICAN EDUCATIONAL PRODUCTS, INC.
By: /s/ Dale Lafrenz
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Dr. Dale Lafrenz, Secretary
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AMERICAN EDUCATIONAL PRODUCTS, INC.
PROXY SOLICITED ON BEHALF OF THE COMPANY
The undersigned hereby constitutes and appoints Clifford C. Thygesen or
Dr. Dale LaFrenz (SEE NOTE BELOW) or either of them acting in the absence of
the other, with full power of substitution the true and lawful attorneys or
attorney and proxies of the undersigned to attend the Special Meeting of the
Shareholders of American Educational Products, Inc. (the "Company") to be held
at the principal executive offices of the Company, 5350 Manhattan Circle, Suite
210, Boulder, Colorado 80303, on April 4, 1997 at 10:00 o'clock a.m. Mountain
Standard Time, or any adjournment or adjournments thereof, and vote all the
shares of the Company standing in the name of the undersigned with all the
powers the undersigned would possess if present at said meeting.
(1) FOR ___________ AGAINST ___________ ABSTAIN ___________
The adoption and approval of a reverse split of the issued and
outstanding shares of the Company's Common Stock and issued and outstanding
options, warrants and other rights convertible into shares of Common Stock of
up to one-for-five (1-for-5) at the future discretion and subject to the
determination of the Board of Directors ("Reverse Split"), and an amendment to
the Company's Articles of Incorporation increasing the par value per share of
its authorized Common Stock by the same factor as the Reverse Split.
(2) Upon such other matters as may properly come before the meeting.
UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR ITEM 1 AND IN THE
DISCRETION OF THE PERSON HOLDING THE PROXY FOR ANY OTHER BUSINESS.
(NOTE: Should you desire to appoint a proxy other than the management designees
named above, strike out the names of management designees and insert the name
of your proxy in the space provided above. Should you do this, give this proxy
card to the person you appoint instead of returning the proxy card to the
Company.)
(PLEASE DATE, SIGN AND PROMPTLY RETURN THIS PROXY IN THE ENCLOSED ENVELOPE.)
Receipt is acknowledged of Notice of Special Meeting and Proxy Statement for
the meeting.
Date __________________________________, 1997
_____________________________________________
Name (please type or print)
_____________________________________________
Signature
_____________________________________________
Signature, if held jointly
Please sign exactly as name appears to the left. When shares are held by
joint tenants, both should sign. When signing as executor, administrator,
attorney, trustee, or guardian, please give full title as such. If a
corporation, please sign in full corporation name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
