<PAGE>
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. 1)
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.
----------------------------------------
(Name of Registrant as Specified In Its Charter)
Neuman, Drennen & Stone, LLC, 1507 Pine Street, Boulder, Colorado 80302
-------------------------------------------------------------------------
(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:
<PAGE>
<PAGE> AMERICAN EDUCATIONAL PRODUCTS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 21, 1999
The Annual Meeting of Shareholders of American Educational Products, Inc.
("AEP" or the "Company") will be held at 6550 Gunpark Drive, Suite 200,
Boulder, Colorado 80301, on July 21, 1999 at 9:00 o'clock a.m. Mountain
Daylight Time, for the purpose of considering and voting upon the following:
1. To elect seven (7) Directors to serve until the next Annual Meeting
of Shareholders or until their successors have been duly elected and
qualified;
2. To increase the number of shares which may be issued pursuant to the
exercise of options granted under the Company's 1997 Incentive Stock
Option Plan by an additional 200,000 shares; and
3. 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 June 3, 1999 will be entitled to vote at
the meeting or any adjournment thereof.
A copy of the Company's Annual Report to Shareholders, including financial
statements for the year ended December 31, 1998, will be mailed to
shareholders concurrently with the mailing of the Proxy Statement.
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 Annual 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.
------------------------------------------
Dr. Robert Scott, Secretary
<PAGE>
<PAGE>
AMERICAN EDUCATIONAL PRODUCTS, INC.
6550 Gunpark Drive, Suite 200
Boulder, Colorado 80301
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
This Proxy Statement is furnished to the Shareholders of American
Educational Products, Inc. (respectively, the "Shareholders" and the "Company"
or "AEP") in connection with the solicitation by the Company of proxies to be
used at the Annual Meeting of Shareholders on July 21, 1999 (the "Meeting"),
at the time, place and for the purposes set forth in the accompanying Notice
of Annual 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 election of seven (7) Directors of the Company; FOR the proposal of the
Company's Board of Directors to increase the number of shares which may be
issued pursuant to the exercise of options granted under the Company's 1997
Stock Incentive Plan by an additional 200,000 shares; 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 ANNUAL 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 June 8, 1999, to Shareholders
eligible to vote at the Meeting. Concurrently with the mailing of this
Statement, the Company is furnishing to Shareholders its Annual Report for its
fiscal year ended December 31, 1998.
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 June 3, 1999
(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, 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 June 2, 1999, the Company had outstanding 1,072,996 shares of
common stock ("shares"), with each share being entitled to one vote.
<PAGE>
<PAGE>
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 of
Class of Beneficial Owner of Beneficial Ownership Class(1)
- -------- ------------------- ----------------------- ----------
<S> <C> <C> <C>
Common Dr. Robert A. Scott 31,580(2) 2.87%
Stock 32 Murray Avenue
Mahwah, N.J. 07430
" Clifford C. Thygesen 84,905(3) 7.52%
4893 Idylwild Trail
Boulder, Colorado 80301
" Clifford L. Neuman 38,000(4) 3.47%
1507 Pine Street
Boulder, Colorado 80302
" Stephen G. Calandrella 10,000(5) .92%
7210 Antelope Lane
Colorado Springs, Colorado 80920
" Wayne R. Kirschling 13,000(6) 1.20%
123 East Adams
Muncie, Indiana 47305
" Richard J. Ciurczak -0- -0-%
901 Janesville Ave.
Ft. Atkinson, Wisconsin 53538
" Steven B. Lapin -0-(7) -0-%
96 Cummings Point Road
Stamford, Connecticut 06902
" The Rockies Fund, Inc. 16,500(8) 1.54%
4465 Northpark Drive
Colorado Springs, Colorado 80907
" G.C. Associates Holdings Corp. 646,430(9) 47.78%
96 Cummings Point Road
Stamford, Connecticut 06902
All Directors and Officers 177,485 14.76%
As a Group (7 Persons)
- ------------
</TABLE>
(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 6,000 shares of
Common Stock at an exercise price of $4.50 per share granted March 29,
1996, non-qualified options exercisable to purchase 5,000 shares of
Common Stock at an exercise price of $3.875 per share granted May 28,
1997 pursuant to the Formula Plan for Directors, non-qualified options
exercisable to purchase 10,000 shares of Common Stock at an exercise
price of $8.00 per share granted August 18, 1998, and Common Stock
Purchase Warrants exercisable through December 1, 2000, to acquire up to
5,290 shares of Common Stock at an exercise price of $10.00 per share.
(3) Includes non-qualified options exercisable to purchase 1,000 shares of
Common Stock at an exercise price of $4.50 per share granted June 5, 1995
pursuant to the Formula Plan for Directors, incentive stock options
exercisable to purchase 5,900 shares of Common Stock at an exercise price
of $4.50 per share granted February 29, 1996, incentive stock options
exercisable to purchase 10,000 shares of Common Stock at an exercise
price of $4.50 per share granted March 29, 1996, non-qualified options
exercisable to purchase 10,000 shares of Common Stock at an exercise
price of $3.875 per share granted May 28, 1997 pursuant to the Formula
Plan for Directors, non-qualified options exercisable to purchase 10,000
shares of Common Stock at an exercise price of $8.00 per share granted
August 18, 1998, and Common Stock Purchase Warrants exercisable through
December 1, 2000, to acquire up to 19,900 shares of Common Stock at an
exercise price of $10.00 per share. Does not include 16,500 shares of
Common Stock which are owned by The Rockies Fund, Inc., a Colorado-based
business development company of which Mr. Thygesen is a director.
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.
Includes non-qualified options exercisable to purchase 1,000 shares of
Common Stock at an exercise price of $4.50 per share granted June 5, 1994
pursuant to the Formula Plan for directors, incentive stock options
exercisable to purchase 4,000 shares of Common Stock at an exercise price
of $4.50 per share granted March 29, 1996, non-qualified options
exercisable to purchase 5,000 shares of Common Stock at an exercise price
of $3.875 per share granted May 28, 1997 pursuant to the Formula Plan for
directors, and Common Stock Purchase Warrants exercisable through
December 1, 2000, to acquire up to 13,000 shares of Common Stock at an
exercise price of $10.00 per share.
(5) Includes non-qualified options exercisable to purchase 5,000 shares of
Common Stock at an exercise price of $4.50 per share granted November 1,
1996 pursuant to the Formula Plan for directors, and non-qualified
options exercisable to purchase 5,000 shares of Common Stock at an
exercise price of $3.875 per share granted May 28, 1997 pursuant to the
Formula Plan for directors. Does not include 16,500 shares of Common
Stock which are owned by The Rockies Fund, Inc., a Colorado-based
business development company of which Mr. Calandrella is a director.
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.
(6) Represents non-qualified options exercisable to purchase 4,000 shares of
Common Stock at an exercise price of $4.50 per share, granted February 9,
1995 pursuant to the Formula Plan for directors, non-qualified options
exercisable to purchase 4,000 shares of Common Stock at an exercise price
of $4.50 per share granted March 29,1996, and non-qualified options
exercisable to purchase 5,000 shares of Common Stock at an exercise price
of $3.875 per share granted May 28, 1997 pursuant to the Formula Plan for
directors.
(7) Does not include 358,390 shares of Common Stock and Common Stock Purchase
Warrants exercisable through December 1, 2000, to acquire up to 279,840
shares of Common Stock at an exercise price of $10.00 per share, which
are owned by G.C. Associates Holdings Corp. ("G.C.") of which Mr. Lapin
is a director.
(8) Represents 16,500 shares of Common Stock. The Rockies Fund, Inc., is a
Colorado-based business development company. 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.
(9) Includes Common Stock Purchase Warrants exercisable through December 1,
2000, to acquire up to 279,840 shares of Common Stock at an exercise
price of $10.00 per share. G.C. is a Delaware corporation engaged in
holding investments. Geneve Holdings, Inc., a Delaware corporation
("GHI"), is a private, diversified holding company, and is the indirect
controlling shareholder of G.C. By virtue of his direct or indirect
holdings of capital stock of GHI, Mr. Edward Netter may be deemed to be
the controlling person of GHI and therefore the controlling person of
G.C. Mr. Netter disclaims beneficial ownership of all shares of common
stock and common stock purchase warrants owned by G.C. for purposes of
Section 16 of the Securities Exchange Act of 1934, as amended, or for any
other purpose. The foregoing information has been furnished to the
Company by G.C., in a report of beneficial ownership on Schedule 13D, the
accuracy of which has not been independently verified by the Company.
2. ELECTION OF DIRECTORS.
The Directors have voted to nominate seven (7) Directors for election to
hold office until the next Annual Meeting of Shareholders and until their
successors are elected and qualified. Each of the following nominees has
consented to be nominated to serve as a Director of the corporation. All of
the nominees save and except for John J. Crawford, are currently Directors of
the Company.
The Company's Articles of Incorporation expressly prohibit cumulative
voting. Therefore, the holders of a majority of the Company's shares could
elect all of the Directors. It is expected that the proxies received by the
Directors' nominees will be voted, except to the extent that authority is
withheld on any proxy as to all or one or more individuals, to elect as
Directors the following nominees, whose principal occupations during the past
five (5) years, directorships and certain other affiliations and information
are set forth below:
<TABLE>
<CAPTION>
Name Age Position
------------------- ---- -------------------------
<S> <C> <C>
Dr. Robert A. Scott 60 Chairman of the Board and Secretary
Clifford C. Thygesen 63 President and Director
Clifford L. Neuman 50 Director
Dr. Wayne R. Kirschling 56 Director
Stephen G. Calandrella 37 Director
Richard J. Ciurczak 43 Director
John J. Crawford 53 Director
</TABLE>
Dr. Robert A. Scott, director since 1991, Chairman of the Board since
April, 1995 and Secretary since August, 1997, has been President, Chief
Executive Officer and Professor of Sociology and Anthropology at Ramapo
College of New Jersey since 1985. Ramapo College is a coeducational state-
supported residential institution of undergraduate and graduate liberal arts,
sciences and professional studies. From 1979 to 1985, he served as Assistant
Commissioner and Director of Academic Affairs for the Indiana Commission for
Higher Education, where he was responsible for the coordination of state-wide
higher education strategic planning for both public and private institutions.
From 1969 to 1979, he was Associate Dean and Senior Administrator of the
College of Arts and Sciences of Cornell University. Dr. Scott is a member of
the Board of Directors of USACENTER.COM, INC, and a member of the Executive
Committee of Hillcrest Health Service Systems, Inc., a holding company for the
Hackensack University Medical Center teaching hospital and four other
subsidiaries. Dr. Scott is Past Chairman of the Commission on International
Education of the American Council on Education, a founding member of the
Advisory Board of the New Jersey Center for International Business Education
and Research at Rutgers University, Past Chairman of the College and
University Educational Satellite Services sponsored by the American
Association of State Colleges and Universities and Public Broadcasting System,
Chairman of the Board of Directors of the New Jersey Association of Colleges
and Universities, and a member of numerous additional professional
associations. Dr. Scott received his B.A. from Bucknell University and his
Ph.D. in Sociology and Organizational Ethnography from Cornell University.
Clifford C. Thygesen, President of the Company since January 22, 1996 and
a Director since 1986, also served as its Executive Vice-President from 1986
until January 1992. Mr. Thygesen is also currently a director of Rockies
Fund, Inc. a Colorado Springs, Colorado based Business Development Company
registered under the Investment Company Act of 1940, a director of Global
Casinos, Inc., a publically-traded company engaged in the ownership and
operation of domestic and international casinos and limited stakes gaming
properties, and a director of Wall Street Racing Stables, a publically-traded
company involved in the racing of thoroughbred horses. From 1971 to 1973, Mr.
Thygesen was Vice-President of Operations for the Ithaca Gun Company of
Ithaca, New York, a manufacturer of high quality firearms. From 1973 to 1976,
Mr. Thygesen served as President of Alpine Designs Corporation, a company
which produces backpacking equipment, skiwear and hunting apparel. During the
period of his employment with Ithaca Gun Company and Alpine Designs, these two
companies were subsidiaries of General Recreation, Inc. In 1975 and 1976, Mr.
Thygesen was corporate Director of Manufacturing for General Recreation, Inc.,
and, in this capacity, assumed responsibility for decentralizing manufacturing
operations in addition to his duties at Alpine Designs. From 1977 to 1981, he
served as Vice-President of Manufacturing for Pure Cycle Corporation, a
company that designed water recycling systems for residential use. From 1981
until February, 1988, Mr. Thygesen was President, Chief Operating Officer and
a Director of Tri Coast Environmental Corporation, formerly Colorado Venture
Capital Corporation. He received his B.S. degree in Industrial Administration
from the University of Illinois in 1961.
Stephen G. Calandrella was elected as a director in November, 1996. Mr.
Calandrella has been President and a Director of The Rockies Fund, Inc., a
Colorado-based business development company registered under the Investment
Company Act of 1940 since February, 1991, and Chief Executive Officer of the
Rockies Fund, Inc. since January 30, 1994. Mr. Calandrella has previously
served as a Director of Kelly Motors, Ltd., Good Times Restaurants, Inc.,
Southshore Corp., and Cogenco International, Inc. Mr. Calandrella also served
as a Director for Combined Penny Stock Fund, Inc. and Redwood MicroCap Fund,
Inc., both of which are closed-end investment companies registered under the
Investment Company Act of 1940. Mr. Calandrella currently serves as Interim
President and a member of the Board of Directors of Global Casinos, Inc., a
publicly-held company engaged in the ownership and operation of domestic and
international casinos and limited stakes gaming properties. Mr. Calandrella
also serves as a Director of Optimax Industries, Inc., a NASDAQ listed holding
company; Guardian Technologies, a NASDAQ listed maker of bullet proof vests;
and Gold Capital Corporation, a publicly traded mining company. Mr.
Calandrella has also engaged in financing and consulting activities for
development stage companies, which consist of advising public and private
companies on capital formation methods, enhancing shareholder valuations,
mergers, acquisitions and corporate restructuring, as well as arranging for
bridge loans and equity purchases.
Clifford L. Neuman has served as a Director of the Company since
November, 1990 and served as Secretary from 1992 through 1994. Mr. Neuman is
a licensed, practicing attorney and a managing member of the law firm of
Neuman, Drennen & Stone, LLC, located in Boulder, Colorado. Mr. Neuman has
served as legal counsel to the Company and its subsidiaries since 1986. Mr.
Neuman received his Bachelor of Arts degree from Trinity College in 1970 and
his Juris Doctorate degree from the University of Pennsylvania School of Law
in 1973.
Dr. Wayne R. Kirschling has served as a director of the Company since
February, 1995. Dr. Kirschling currently serves as a Corporate Vice President
of Ontario Corporation, a closely held Indiana corporation with corporate
headquarters in Muncie, Indiana. Ontario engages in the manufacture and
refurbishment of components used in jet engines; the manufacture and
refurbishment of components used in semiconductor process equipment; provides
metallurgical, chemical and environmental laboratory testing; develops
software and systems for enterprises involved in collections and accounts
receivable management; and is involved in the development of an industrial
park. From 1978-1986, Dr. Kirschling served as Deputy Commissioner of Higher
Education for the Indiana Commission for Higher Education located in
Indianapolis, Indiana, where he was responsible for working with the Governor,
the State Legislature and Indiana's public and private colleges on operating
and capital budget requests, student aid funding, and approval of new
institutions and new academic programs. From 1971-1978, he was Associate
Director of the National Center for Higher Education Management Systems
located in Boulder, Colorado, where he was responsible for working
with public and private colleges throughout the U.S. to develop and
implement new management techniques and for operating a visiting
scholars program for scholars drawn from American and foreign
universities, industry and government. From 1964-1969, Dr. Kirschling served
as an officer in the U.S. Air Force, including assignments with the Office of
the Secretary of the Air Force in Washington, D.C. and at the U.S. Air Force
Academy located in Colorado Springs, Colorado. He has taught at a number of
colleges and universities including the University of Colorado, Butler
University, the University of Indianapolis and the U.S. Air Force Academy. He
received his B.S. degree from the U.S. Air Force Academy, an M.S. in
Industrial Engineering from Stanford University and an M.B.A. and D.B.A. in
Management Science from the University of Colorado.
Richard J. Ciurczak has served as a director of the Company since
January, 1998, and as President and Chief Operating Officer of Nasco
International, Inc., Fort Atkinson, Wisconsin, since October, 1996. Through
its four mail order operations and twenty catalogs circulated throughout the
United States and 100 foreign countries, Nasco serves the education and
agriculture industries. Prior to October, 1996, Mr. Ciuczak served in various
capacities within Nasco dating back to 1974, including Executive Vice
President and Chief Financial Officer. Mr. Ciurczak received his Bachelor of
Science degree in Business Administration in 1976 from Seton Hall University,
New Jersey, and attended the MBA program at Seton Hall University 1977
through 1983.
John J. Crawford has been President and Chief Executive Officer of The
Aristotle Corporation ("Aristotle") since April 2, 1990, and Chairman of its
Board since April 1993. Aristotle is a holding company engaged in the design,
manufacture and marketing of women's intimate apparel. Since July 1994, Mr.
Crawford has served Aristotle in a part-time capacity. Mr. Crawford is also
the Chief Executive Officer of the Regional Water Authority, a utility located
in New Haven, Connecticut. Mr. Crawford is also a member of the Board of
Directors of Webster Financial Corporation.
Each Director will be elected to serve until the next Annual Meeting of
Shareholders in 2000 or until a successor is duly elected and qualified.
During the 1998 fiscal year, nine (9) meetings of the Board of Directors
were held, including regularly scheduled and special meetings. All of the
meetings were attended by 100% of the Board members with the exception of Mr.
Lapin who attended eight (8) of the meetings, and with the exception of
Messrs. Neuman, Calandrella and Kirschling who each attended seven (7) of the
meetings. Outside Directors were reimbursed their expenses associated with
attendance at such meetings or otherwise incurred in connection with the
discharge of their duties as a Director.
The Company has adopted a Formula Compensation Plan for outside
Directors. For their services, all outside Directors are paid an annual fee
of $10,000 each, with the Chairman receiving an additional $12,000. In
addition to cash compensation, each outside Director is entitled to receive
non-qualified stock options exercisable to purchase 5,000 shares of Common
Stock, at an exercise price equal to the market value on the date of grant,
for each year of service as a director of the Company.
During 1998, the Company had standing Audit, Compensation and Nominating
Committees of the Board of Directors. The members of the Audit Committee were
Clifford L. Neuman, Dr. Wayne R. Kirschling, Richard J. Ciurczak and Clifford
C. Thygesen (ex officio). No member of the Audit Committee receives any
additional compensation for his service as a member of that Committee. During
1998, the Audit Committee held two (2) meetings which were attended by all of
its members except Mr. Ciurczak who attended one (1) of the two (2) meetings.
The Audit Committee is responsible for providing assurance that financial
disclosures made by Management reasonably portray the Company's financial
condition, results of operations, plan and long-term commitments. To
accomplish this, the Audit Committee oversees the external audit coverage,
including the annual nomination of the independent public accountants, reviews
accounting policies and policy decisions, reviews the financial statements,
including interim financial statements and annual financial statements,
together with auditor's opinions, inquires about the existence and substance
of any significant accounting accruals, reserves or estimates made by
Management, reviews with Management the Management's Discussion and Analysis
section of the Annual Report, reviews the letter of Management Representations
given to the independent public accountants, meets privately with the
independent public accountants to discuss all pertinent matters, and reports
regularly to the Board of Directors regarding its activities.
The members of the Compensation Committee were Dr. Robert A. Scott,
Stephen G. Calandrella and Steven B. Lapin. No member of the Compensation
Committee receives any additional compensation for his service as a member of
that Committee. During 1998, the Compensation Committee held two (2) formal
meetings all of which were attended by all of its members. The Compensation
Committee is responsible for reviewing pertinent data and making
recommendations with respect to compensation standards for the executive
officers, including the President and Chief Executive Officer, establishing
guidelines and making recommendations for the implementation of Management
incentive compensation plans, reviewing the performance of the President and
CEO, establishing guidelines and standards for the grant of incentive stock
options to key employees under the Company's Incentive Stock Option Plan, and
reporting regularly to the Board of Directors with respect to its
recommendations.
During 1998, the Company's Nominating Committee consisted of Dr. Wayne
Kirschling, Dr. Robert A. Scott and Clifford L. Neuman. No member of the
Nominating Committee receives any additional compensation for his service as a
member of that Committee. During 1998, the Nominating Committee held one (1)
formal meeting which was attended by all of its members. The Nominating
Committee is responsible for recommending a slate of Director nominees to be
considered for election at the Company's 1999 Annual Meeting of Shareholders,
which recommendation was unanimously approved by the Board of Directors.
While the Nominating Committee has not in the past considered nominees
recommended by securityholders outside of Management, if securityholders have
recommendations regarding nominees for the Board of Directors, communication
should be addressed to Mr. Thygesen at the principal executive offices of the
Company.
Any transactions between the Company and its officers, directors,
principal shareholders, or other affiliates have been and will be on terms no
less favorable to the Company than could be obtained from unaffiliated third
parties on an arms-length basis and will be approved by a majority of the
Company's independent, outside disinterested directors.
3. EXECUTIVE COMPENSATION.
The following tables and discussion set forth information with respect to
all plan and non-plan compensation awarded to, earned by or paid to the Chief
Executive Officer ("CEO"), and the Company's four (4) most highly compensated
executive officers other than the CEO, for all services rendered in all
capacities to the Company and its subsidiaries for each of the Company's last
three (3) completed fiscal years; provided, however, that no disclosure has
been made for any executive officer, other than the CEO, whose total annual
salary and bonus does not exceed $100,000.
<PAGE>
<PAGE>
<TABLE>
TABLE 1
SUMMARY COMPENSATION TABLE
<CAPTION>
Long Term Compensation
----------------------------------
Annual Compensation(1) Awards Payouts
-------------------------- --------------------- -------
Other All
Annual Restricted Other
Name and Compen- Stock LTIP Compen-
Principal Year Salary Bonus sation Award(s) Options/ Payouts sation
Position Year ($) ($) ($)(2) ($) SARs ($) ($)
- --------------- ------- -------- ----- --------- ---------- -------- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Clifford C. Thygesen 1998 $98,077 $ -0- $4,880 -0- 10,000 -0- -0-
CEO and President of 1997 90,433 5,500 4,590 -0- 10,000 -0- -0-
AEP and President of 1996 69,573 -0- 8,200 -0- 15,900 -0- -0-
Scott Resources, Inc.,
and Hubbard Scientific,
Inc.(2)
Paul D. Whittle, CEO, 1996 $114,423 -0- -0- -0- -0- -0- $29,000
and President of AEP
and President of Scott
Resources, Inc., Hubbard
Scientific, Inc., Summit
Learning, Inc. and AEP
Media(2)
- -------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<PAGE>
(1) All executive officers of the Company participate in the Company's group
health insurance plan. In addition, Mr. Whittle was given the use of a
Company leased vehicle, and the Company reimbursed Mr. Whittle for medical
expenses incurred and not otherwise covered by the Company's group health
insurance plan. Mr. Thygesen was given the use of a Company leased
vehicle. Except as indicated, no executive officer received perquisites
and other personal benefits which, in the aggregate, exceeded the lesser
of either $50,000 or 10% of the total of annual salary and bonus paid
during the respective fiscal years.
(2) Effective January 22, 1996, Mr. Whittle voluntarily resigned as CEO and
President of AEP. Mr. Whittle was replaced as President of AEP by Clifford
C. Thygesen. (See "TRANSACTIONS WITH MANAGEMENT AND OTHERS").
Management Bonus Plans
1998. For the fiscal year ended December 31, 1998, no management bonuses
were earned or paid.
1997. For the fiscal year ended December 31, 1997, the Management Bonus
Plan ("1997 Management Bonus Plan") consisted of a contribution by the Company
equal to twenty-five percent (25%) of the Company's net profits in excess of
$500,000 earned by the Company during fiscal 1997, not to exceed $62,500.
Bonuses totaling $34,354 were earned and paid under the 1997 Management Bonus
Plan.
1996. For the fiscal year ended December 31, 1996 no management bonuses
were earned or paid.
401(k) Savings Plan
During the fiscal year ended December 31, 1993, the Company adopted a
401(k) Savings Plan (the "401(k) Plan"). All full-time employees of the
Company who have reached age twenty-one (21) and completed one (1) year of
service with the Company are eligible to participate in the 401(k) Plan.
Under the 401(k) Plan, eligible employees are permitted to defer up to
fifteen percent (15%) (unless deemed highly compensated employees by government
guidelines) of their compensation limited by (i) the maximum amount allowed to
be deferred for federal income tax purposes; (ii) the maximum amount which will
not cause the 401(k) Plan to violate any non-discrimination rules; and (iii)
the amount which would not cause the 401(k) Plan to exceed the maximum amount
allowable as a deduction under Section 404 of the Internal Revenue Code. The
maximum allowable compensation deferral for any one employee in calendar 1998
was $9,500. Subject to certain restrictions, contributions to the 401(k) Plan
will be invested by the trustees of the 401(k) Plan in accordance with
directions of each participant.
Salary deferral contributions are always 100% vested. Participants or
their beneficiaries are entitled to payment of benefits (i) upon retirement
at age 65; (ii) upon death or disability; or (iii) upon termination of
employment, if the participant elects to receive a distribution of his
account balance prior to one of the events listed in (i) or (ii) above. In
addition, hardship distributions to participants from the 401(k) Plan are
available under certain conditions. The amount of benefits ultimately payable
to a participant under the 401(k) Plan will depend on the performance of the
funds to which contributions are made on the participant's behalf.
Employee Stock Purchase Plan
In 1989, the Company's shareholders ratified and approved a qualified
Employee Stock Purchase Plan ("ESPP") pursuant to Section 423 of the Internal
Revenue Code of 1986, as amended. Pursuant to the ESPP, the Company has been
authorized to offer up to 10,000 shares per year over a three-year term, or a
total of 30,000 shares, to the Company's employees. The term of the ESPP was
subsequently extended for an additional period of three (3) years commencing
upon the initial expiration date and ending on the third anniversary of such
date. The ESPP includes certain restrictions which preclude participation by
part-time employees and employees owning five percent (5%) or more of the
Company's Common Stock. The purchase price for the shares may not be less than
eighty-five percent (85%) of the market value of the stock on either the
Enrollment Date or the Exercise Date as those terms are defined in the ESPP.
The ESPP was first implemented in 1991. Employees of the Company are currently
participating in the ESPP pursuant to subscriptions whereby shares are being
purchased under a program of payroll deductions.
Incentive Stock Option Plan
In 1990, the Company's shareholders ratified and approved the American
Educational Products, Inc. 1990 Incentive Stock Option Plan (the "1990 ISOP").
Pursuant to the terms of the 1990 ISOP, as amended, the Company's Board of
Directors was authorized to issue options for the purchase of up to 228,400
shares of the Company's Common Stock to key employees of the Company. At the
Company's Annual Meeting of Shareholders on June 2, 1997, the Company's
shareholders ratified and approved the American Educational Products, Inc. 1997
Stock Incentive Plan ("1997 Stock Incentive Plan"). Upon adoption by the
shareholders, the 1997 Stock Incentive Plan superseded and replaced the 1990
ISOP, and the 1990 ISOP was merged with and into the 1997 Stock Incentive Plan.
Pursuant to the terms of the 1997 Stock Incentive Plan, the Company's Board
of Directors is authorized to grant incentive stock options, to executive
officers and key employees, and to grant non-qualified stock options and/or
stock purchase rights (collectively "Rights") to officers, employees, former
employees, directors and consultants of the Company and its subsidiaries. As
of the date of this Proxy Statement, approximately twenty-five (25) persons are
eligible to receive Rights under the 1997 Stock Incentive Plan. The 1997 Stock
Incentive Plan imposes no limit on the number of officers and other key
employees to whom awards may be made.
Stock Options.
Under the 1997 Stock Incentive Plan, options granted to eligible
participants who must be officers or key employees may take the form of
Incentive Stock Options ("ISOs") under Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code"). As required by Section 422 of the Code, the
aggregate fair market value (as defined in the Company Stock Incentive Plan) of
the Company's Common Stock (determined as of the date of grant of the ISO) with
respect to which ISOs granted to an employee are exercisable for the first time
in any calendar year may not exceed $100,000. The foregoing limitation does
not apply to NQSOs.
The 1997 Stock Incentive Plan also authorizes the Company to grant to
officers and key employees, as well as to directors, consultants and advisors to
the Company, options which do not qualify as ISO's (Non-Qualified Stock
Options or "NQSO's"). NQSO's are not subject to the limitations applicable to
ISO's.
Initially, each option is exercisable over a period, determined by the
Board of Directors or a committee appointed by the Board (the entity
administering the1997 Stock Incentive Plan will hereinafter be referred to as
the "Administrator"), of up to ten years from the date of grant. Options may
be exercisable during the option period at such time, in such amounts, and in
accordance with such terms and conditions and subject to such restrictions as
are determined by the Administrator and set forth in option agreements
evidencing the grant of such options.
The exercise price of an ISO may not be less than 100% of the fair market
value of the shares of the Company's Common Stock (or 110% of the fair market
value if granted to a person who owns 10% or more of the Company's outstanding
shares) on the date of grant. The exercise price of a NQSO may be set by the
Administrator, but for options granted to directors must have an exercise price
not less than the fair market value of the underlying shares on the date of
grant. The exercise price under any option will be adjusted as provided in the
1997 Stock Incentive Plan to reflect stock dividends, splits, other
recapitalizations or reclassifications or changes affecting the number or kind
of outstanding shares. Fair market value of the Company's Common Stock is
defined in the1997 Stock Incentive Plan as the closing sale price of the Common
Stock on NASDAQ or any securities exchange on which the shares of Common Stock
are then listed.
The shares of Common Stock purchased upon the exercise of an option are to
be paid for in cash or through the delivery of other shares of the Company's
Common Stock with a value equal to the total exercise price, or with money
loaned by the Company to the optionee in compliance with applicable law and on
terms and conditions to be determined by the Administrator and not
inconsistent with the 1997 Stock Incentive Plan, or with a combination of the
foregoing.
An option is not transferable except by will or the laws of descent and
distribution. If the employment of an optionee terminates for any reason (other
than for cause or by reason of death, disability or retirement) the optionee may
exercise his options within a 90-day period following such termination to the
extent he was entitled to exercise such options at the date of termination.
If an optionee dies while employed or terminates employment by reason of
disability or retirement, the options may be exercised within one year after
the optionee's death by the person or persons to whom the optionee's rights
pass or within one year after the optionee's disability or retirement by the
optionee.
The 1997 Stock Incentive Plan permits an optionee, with the consent of the
Administrator, to pay any income tax incurred by the optionee upon exercise
of an option with shares of Company Common Stock otherwise issuable to the
optionee. The number of shares issued to the optionee are thereby reduced, and
the Company pays the taxes of the optionee with cash.
Purchase Rights.
Rights to purchase shares of the Company's Common Stock may be offered
under the 1997 Stock Incentive Plan at a purchase price to be determined by
the Administrator. The agreements relating to purchase rights may contain such
provisions designed to provide incentive to the grantees as the Administrator
may from time to time determine to be appropriate, including vesting provisions
granting to the Company the right to repurchase the shares subject to a purchase
right at the initial purchase price upon the termination of the employment or
services of the grantee prior to the vesting date or dates provided in the
agreement.
Administration of the 1997 Stock Incentive Plan.
Either the Board of Directors (provided that a majority of directors are
"disinterested") can administer the1997 Stock Incentive Plan, or the Board of
Directors may designate a committee comprised of directors meeting certain
requirements to administer the 1997 Stock Incentive Plan.
The Administrator will decide when and to whom to make grants, the
number of shares to be covered by the grants, the vesting schedule, the type
of awards and the terms and provisions relating to the exercise of the awards.
The Administrator may interpret the 1997 Stock Incentive Plan and may at
any time adopt such rules and regulations for the 1997 Stock Incentive Plan
as it deems advisable. The Board may at any time amend or terminate the 1997
Stock Incentive Plan and change its terms and conditions, except that, without
stockholder approval, no such amendment may (a) increase the maximum number of
shares as to which awards may be granted under the 1997 Stock Incentive Plan,
except for adjustments to reflect stock dividends or other recapitalizations
affecting the number or kind of outstanding shares, (b) materially increase the
benefits accruing to 1997 Stock Incentive Plan participants, or (c) materially
change the requirements as to eligibility for participation in the 1997 Stock
Incentive Plan.
An aggregate of 179,300 shares of the Company's $.05 par value Common Stock
are reserved for issuance under the 1997 Stock Incentive Plan. As of
December 31, 1998, incentive stock options to purchase 58,750 shares of Common
Stock were outstanding and unexercised, having an average exercise price of
$4.31 per share. Additionally, as of December 31, 1998, non-qualified stock
options exercisable to acquire up to 103,000 shares of Common Stock were
outstanding and unexercised, having an average exercise price of $6.32 per
share. During the Company's fiscal year ended December 31, 1998, 36,385
options to purchase shares pursuant to the 1997 Stock Incentive Plan were
exercised at an average exercise price of $4.66 per share.
The following table sets forth certain information concerning the
exercise of incentive stock options during the last completed fiscal year by
each of the named executive officers and the fiscal year-end value of
unexercised options on an aggregated basis:
<PAGE>
<PAGE>
<TABLE>
TABLE 2
Option/SAR Grants for Last
Fiscal Year - Individual Grants
<CAPTION>
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise
Options/SARs Employees in or Base Expiration
Name Granted (#) Fiscal Year Price ($/Sh) Date
- ---------------------- ------------ ------------ ------------ ----------
<S> <C> <C> <C> <C>
Clifford C. Thygesen 10,000 16.95% $8.00 Aug 18, 2003
- -----------------
</TABLE>
<TABLE>
TABLE 3
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
----------------------------------------------------
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
at FY-End (#) at FY-End ($) (1)
Shares Acquired Value Realized Exercisable Exercisable/
Name on Exercise (#) ($) (Unexercisable) Unexercisable
- ---------------- --------------- -------------- --------------- -----------------
<S> <C> <C> <C> <C>
Clifford C. Thygesen -0- -0- -0-/36,900 $-0-/$169,700
</TABLE>
(1) Value Realized is determined by calculating the difference between the
aggregate exercise price of the options and the aggregate fair market
value of the Common Stock on the date the options are exercised.
(2) The value of unexercised options is determined by calculating the
difference between the fair market value of the securities underlying the
options at fiscal year end and the exercise price of the options.
1998 Non-Qualified Stock Option Plan
At the Company's Annual Meeting of Shareholders in 1998, the shareholders
of the Company rejected a request of the Board of Directors to increase the
number of shares which the Company was authorized to issue pursuant to the
exercise of options granted under the 1997 Stock Incentive Plan by an
additional 200,000 shares. Among the shareholders of the Company who voted
against the proposed increase was G.C. Associates Holdings Corp., the
Company's single largest shareholder and an affiliate of Geneve Holdings, Inc.
and Geneve Corporation, which owns in excess of 30% of the Company's issued
and outstanding shares of Common Stock. Two persons designated by the Geneve
Corporation serve as members of the Company's Board of Directors and likewise
opposed the increase supported by the remaining five Board members.
In response to the failure of the shareholders to approve an increase in
the authorization under the 1997 Stock Incentive Plan, the Company's Board of
Directors approved and adopted the Company's 1998 Non-Qualified Stock Option
Plan (the "1998 Non-Qualified Plan"), again over the objection of the
representatives of Geneve Corporation on the Board of Directors. Under the
1998 Non-Qualified Plan, the Company is authorized to grant non-qualified
stock options exercisable to purchase up to 200,000 shares of the Company's
Common Stock. The non-qualified options may only be granted to employees of
the Company. In addition, the aggregate number of options which may be
granted to persons who are executive officers of the Company or any subsidiary
of the Company may not exceed the lesser of 1% of the total issued and
outstanding shares of the Company's Common Stock or an aggregate of 25,000
shares of Common Stock. No non-qualified options may be granted to outside
Directors of the Company. These limitations were necessary in order for the
1998 Non-Qualified Plan to comply with Nasdaq Rules of Governance.
An aggregate of 197,000 shares of the Company's Common Stock are
reserved for issuance under the 1998 Non-Qualified Plan. As of December 31,
1998, non-qualified stock options to purchase 57,000 shares of the Company's
Common Stock were outstanding and unexercised, having an average exercise
price of $8.00 per share. During the Company's fiscal year ended December 31,
1998, 2,000 non-qualified options granted under the 1998 Non-Qualified Plan
were exercised.
4. INCENTIVE STOCK OPTION PLAN - ADDITIONAL SHARES.
A majority of the Board of Directors of the Company has again determined,
over the objection of the representatives of Geneve Corporation, that, in
order to be able to provide additional incentive to the Company's management
and key employees, it is in the best interest of the Company and its
stockholders that an additional 200,000 shares be authorized to be issued
pursuant to the exercise of options granted under the 1997 Stock Incentive
Plan. Section XVIII of the Plan, Section 422 of the Internal Revenue Code and
Rule 16b-3 under the Securities Exchange Act of 1934, as amended, each require
that any increase in the aggregate number of shares which may be issued under
the 1997 Stock Incentive Plan be approved by a majority of the stockholders of
the Company at a regular or special meeting of the stockholders called for
that purpose. Should the shareholders of the Company approve the foregoing
increase, it would supplant and supersede the 1998 Non-Qualified Plan, all
outstanding and unexercised non-qualified options under the 1998 Non-Qualified
Plan would be rolled into the 1997 Stock Incentive Plan and the 1998 Non-
Qualified Plan would be terminated. As a result, the requested increase in
the authorization under the 1997 Stock Incentive Plan would not have the
effect of increasing the Company's ability to grant options in excess of the
limits currently existing under the combined 1997 Stock Incentive Plan and
1998 Non-Qualified Plan. Rather, the benefit to the Company would be in its
ability to: (i) grant additional incentive stock options to qualified key
employees with the attending tax advantages described herein, and (ii) grant
non-qualified stock options to outside directors under the formula plan that
has been in place for several years pursuant to which outside directors are
entitled to receive non-qualified stock options exercisable to purchase 5,000
shares of the Company's Common Stock at an exercise price equal to the market
value on the date of grant for each year of service as an outside director of
the Company.
Board of Directors' Recommendation.
For the reasons stated above, the Board of Directors recommends a vote
FOR approval of the proposal to increase by 200,000 shares the total number of
shares which may be issued pursuant to options granted under the Company's
1997 Stock Incentive Plan. The Company has been advised by representatives of
the Geneve Corporation that it intends to oppose such an increase and to vote
all shares of Common Stock owned by its affiliates in opposition to such
proposal.
5. TRANSACTIONS WITH MANAGEMENT AND OTHERS.
Legal Counsel
Clifford L. Neuman has served as a member of the Company's Board of
Directors since November 1990. Mr. Neuman also served as Secretary of the
Company from February, 1992 through November, 1994.
Mr. Neuman is a Managing Member of the law firm of Neuman, Drennen &
Stone, LLC (f/k/a Neuman & Cobb), which has served as legal counsel to the
Company since its inception in 1986.
During 1998 and 1997, the Company paid Neuman, Drennen & Stone
approximately $51,570.00 and $35,152.00, respectively, for legal services
rendered during the respective fiscal years. During fiscal 1997, Mr. Neuman
was given non-qualified options exercisable to purchase 5,000 shares of Common
Stock granted May 28, 1997 pursuant to the Formula Plan for directors. Mr.
Neuman also received Common Stock Purchase Warrants exercisable to acquire up
to 13,000 shares of Common Stock issued as part of the Warrant Dividend
described above. Finally, during fiscal 1998 and fiscal 1997, Mr. Neuman
received $10,000 in consideration for his services as a director of the
Company.
6. COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Under the Securities Laws of the United States, the Company's Directors,
its Executive (and certain other) Officers, and any persons holding more than
ten percent (10%) of the Company's common stock are required to report their
ownership of the Company's common stock and any changes in that ownership to
the Securities and Exchange Commission and the NASDAQ stock market. Specific
due dates for these reports have been established and the Company is required
to report in this Proxy Statement any failure to file by these dates.
Based solely on a review of the copies of such reports required by
Section 16(a), the Company believes that its officers, Directors, and
stockholders owning greater than 10% of the Common Stock of the Company
complied with all applicable Section 16(a) filing requirements during 1998.
7. LEGAL PROCEEDINGS
During 1996, Mr. Thygesen, the Company's President and a director of the
Company, and Mr. Calandrella, also a Director of the Company, informed the
Company that they had been notified by the Securities and Exchange Commission
("Commission") that the Commission Staff intended to request that the
Commission commence an administrative proceeding against the Rockies Fund,
Inc. (the "Fund"), Mr. Calandrella, its President, and against its directors
(including Messrs. Thygesen and Calandrella) based upon certain transactions
in securities that had formerly been included in the Fund's securities
portfolio. In July 1997, Messrs Thygesen and Calandrella were informed by the
SEC that the Staff was planning to recommend an enforcement action against Mr.
Calandrella as the Fund's President for certain additional alleged violations
of the federal securities laws. In June 1998, the Commission issued an order
instituting public administrative proceedings. From November 2 through
November 6, 1998, an administrative trial was held at which the Fund, its
President and its directors contested the Staff's allegations, which they
believe to be substantially without merit, and put on extensive defensive
evidence. The parties are in process of exchanging proposed findings of fact
and conclusions of law and legal briefs. As its exclusive relief against the
Fund, the Commissions Staff has requested the entry of an order directing
the Fund to cease and desist from committing the securities law violations
alleged by the Staff in the enforcement proceeding. In addition, the Staff
has requested entry of such an order against the Fund's President and its
directors along with certain other relief. No decision has been rendered and
there is no timetable by which a decision must be made. Under the
circumstances, the Company cannot predict with any certainty the outcome of
the action.
8. INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
Hein + Associates, CPA, served as the Company's principal accountant for
the fiscal year ended December 31, 1998 and is expected to be retained as the
Company's principal accountant for the fiscal year ending December 31, 1999.
Representatives of Hein & Associates, CPA, are not expected to be present at
the Annual Meeting of Shareholders. However, should representatives of Hein &
Associates, CPA attend the Annual Meeting of Shareholders, said
representatives will have an opportunity to make a statement if they so desire
or to respond to appropriate questions.
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.
A copy of Form 10-KSB, the annual report filed by the Company with the
Securities and Exchange Commission, will be furnished without charge to any
person who requests it in writing, from the office of the company at its
address noted on this Proxy Statement.
AMERICAN EDUCATIONAL PRODUCTS, INC.
By: /s/ Dr. Robert A. Scott
------------------------------------
Dr. Robert A. Scott, Secretary
2000 Annual Meeting
No definitive date for the Annual Meeting of Shareholders in 2000 has
been established. Qualifying shareholders may submit proposals that are
consistent with the Company's Bylaws and federal securities laws to the
Company for inclusion in the Company's proxy material relating to the 2000
Annual Meeting. The Company must receive such proposals at its business
address (set forth at the beginning of this Proxy Statement) no later than
January 31, 2000.
<PAGE>
<PAGE> AMERICAN EDUCATIONAL PRODUCTS, INC.
PROXY SOLICITED ON BEHALF OF THE COMPANY
The undersigned hereby constitutes and appoints Clifford C. Thygesen or
Clifford L. Neuman (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 Annual Meeting of the
Shareholders of American Educational Products, Inc. (the "Company") to be held
at 6550 Gunpark Drive, Suite 200, Boulder, Colorado 80301, on July 21, 1999 at
9:00 o'clock a.m. Mountain Daylight 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 WITHHOLD AUTHORITY
---------- -----------
To elect all of the nominees listed below:
Clifford C. Thygesen, Dr. Robert A. Scott, Clifford L. Neuman,
John J. Crawford, Richard J. Ciurczak, Dr. Wayne R. Kirschling and
Stephen G. Calandrella
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name below)
-------------------------------------------
(2) FOR AGAINST ABSTAIN
----------- --------- ----------
To increase the number of shares which may be issued pursuant to the
exercise of options granted under the Company's 1997 Incentive Stock Option
Plan by an additional 200,000 shares.
(3) Upon such other matters as may properly come before the meeting.
UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR ITEM 1, FOR ITEM 2,
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 Annual Meeting and Proxy Statement for
the meeting.
Date , 1999.
-----------------------------------
-------------------------------------------------------------
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.
