SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 8)
American Educational Products, Inc.
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(Name of Issuer)
Common Stock, par value $.05 per share
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(Title of Class of Securities)
02553T103
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(CUSIP Number)
David T. Kettig
96 Cummings Point Road
Stamford, CT 06902
(203) 358-8000
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(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications)
January 28, 2000
----------------
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule 13d-
1(b)(3) or (4), check the following box:
Page 1 of 7 pages
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SCHEDULE 13D
CUSIP No. 02553T103
1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
G.C. Associates Holdings Corp.
_________________________________________________________________
2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)
Not applicable. (b)
_________________________________________________________________
3) SEC USE ONLY
__________________________________________________________________
4) SOURCE OF FUNDS
Not applicable.
_________________________________________________________________
5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e)
Not applicable.
_________________________________________________________________
6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
_________________________________________________________________
7) SOLE VOTING POWER
NUMBER OF 690,230
SHARES ________________________________________________
BENEFICIALLY 8) SHARED VOTING POWER
OWNED BY -0-
EACH ________________________________________________
REPORTING 9) SOLE DISPOSITIVE POWER
PERSON 690,230
WITH ________________________________________________
10) SHARED DISPOSITIVE POWER
-0-
_________________________________________________________________
11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
690,230
_________________________________________________________________
12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES
Not applicable.
_________________________________________________________________
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
50.9%
_________________________________________________________________
14) TYPE OF REPORTING PERSON
CO
_________________________________________________________________
Page 2 of 7 pages
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Schedule 13D
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Item 1. Security and Issuer.
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The undersigned hereby supplements and amends the Schedule
13D, dated May 30, 1997, as amended (the "Statement"), filed in
connection with the Common Stock, par value $.05 per share (the
"Common Stock"), of American Educational Products, Inc., a
Colorado corporation (the "Company"), as follows (reference is
made to the Statement for previously reported facts):
Item 4. Purpose of Transaction.
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On January 28, 2000, GC submitted to the Company a proposal
(attached as Exhibit C hereto) under Rule 14a-8 of the Securities
Exchange Act of 1934 to amend the Company's articles of
incorporation. If adopted by shareholders, the amendment would
require the Board, upon receipt of an appropriate offer to
purchase the Company (as defined in such proposed amendment), to
give shareholders the right to determine whether to accept such
offer. In the past, the Board has been unwilling to provide
shareholders with the opportunity to decide for themselves
whether a bona fide offer to sell the Company is acceptable.
The Board has continued to attempt to grant its members an
inordinate number of stock options, even though such grants are
counterproductive to economic value for shareholders, have been
explicitly rejected by shareholders, and the Company's common
stock has consistently underperformed market indices and its peer
group. According to the Company's annual report for 1998, as of
December 1998, the Company had a total of 58,750 incentive stock
options and 160,000 non-qualified stock options outstanding and
unexercised. These options represent an amount equal to
approximately 20% of the Company's currently outstanding shares
of common stock.
At the Company's Annual Meeting of Shareholders in 1998,
shareholders rejected a request of the Board to increase by an
additional 200,000 the number of shares which the Company was
authorized to issue pursuant to the exercise of options granted
under the Company's 1997 Stock Incentive Plan - approximately
another 20% of the Company's total outstanding shares.
Among the shareholders of the Company who voted against the
Board's proposed increase were GC, an affiliate of Geneve
Corporation. At the time, two persons designated by Geneve
Corporation served as members of the Board and likewise opposed
the increase supported by the remaining five Board members.
Notwithstanding shareholders' rejection of the proposed
increase, the Board persisted and adopted the Company's 1998 Non-
Qualified Stock Option Plan (the "1998 Plan"), again over the
objection of the Board representatives of Geneve Corporation.
Essentially the 1998 Plan authorized what shareholders had
rejected - an additional 200,000 stock options. At the
Page 3 of 7 pages
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Company's 1999 Annual Meeting of Shareholders, the Board again
asked the shareholders to authorize the grant under the 1997
Stock Incentive Plan of an additional 200,000 options (to replace
those authorized under the 1998 Plan). GC again voted against the
proposal, and the shareholders again defeated the proposal.
On November 14, 1999, Geneve Corporation made an offer to
purchase all of the assets and substantially all of the
liabilities (exclusive of indebtedness) of the Company for a cash
price of $17 million. Such offer also indicated that GC would be
amenable to restructuring the transaction as a cash merger or
similar stock transaction with an adjustment in the purchase
price. The Board did not forward the offer to shareholders for
their approval.
In correspondence to GC, the Company's management reported
the Board's belief that the proper value of the Company's common
stock is, in its opinion, greater than the price currently
offered on the public market and greater than the value of GC's
offer. GC would give serious consideration to disposing of its
holdings, along with all other shareholders, in the event such a
value could be obtained. GC's proposed amendment would require
the Board, upon receipt of an appropriate offer relative to
historical closing market prices, to take certain actions,
including forwarding to shareholders the terms of such offer, the
retention of an investment banking firm, the establishment of an
independent committee of the Board, the solicitation of other
offers to purchase the Company and the submission of the best
offer to shareholders for a vote. GC is not alone in its view
that the Company should be sold; at least one other shareholder,
who also represents holders of a significant amount of the
Company's outstanding common stock, has indicated to the Company
his view that it should be sold.
A review of the Company's performance, both fundamentally
and on the stock market, raises the question of whether the
Company might not be operated more appropriately as a private
company, and thereby benefit from the associated cost-savings.
The pattern of corporate underperformance, coupled with the
Board's seeming willingness to reward its members for guiding the
Company to below-market returns, suggests that shareholders
should be given authority to decide for themselves whether to
accept a bona fide offer to purchase the Company. The proposed
amendment will permit shareholders to do so. If the amendment is
adopted, GC may elect to submit an offer or sell its shares in
the event an offer is forthcoming from a third party or
otherwise.
Item 7. Material to be Filed as Exhibits.
---------------------------------
C. Proposal to Amend the Articles of Incorporation of
American Educational Products, Inc.
Page 4 of 7 pages
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SIGNATURE
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After reasonable inquiry and to my best knowledge and
belief, I certify that the information set forth in this
statement is true, complete and correct.
Dated: January 31, 2000
/s/ David T. Kettig
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Name: David T. Kettig
Page 5 of 7 pages
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EXHIBIT C
Shareholder Empowerment Resolution
RESOLVED, that the articles of incorporation of American
Educational Products, Inc. (the "Company") hereby be amended to
add a new Article XII, which shall read in its entirety as
follows:
ARTICLE XII: Should the Company receive a bona fide offer for
the sale or merger of the Company (the "Triggering Offer") at a
price per share greater than (i) the average daily closing price
of the Company's common stock over (A) the 30-day period
immediately prior to the Triggering Offer, if more than 100,000
shares were traded therein, or (B) the 90-day period immediately
prior to the Triggering Offer, if fewer than 100,000 shares were
traded therein, or (ii) if neither of such criteria is met, the
average daily closing price for the period in which 100,000
shares of the Company's common stock were most recently traded,
the Board of Directors shall take the following measures:
(a) Within ten days, communicate the terms of the Triggering
Offer to shareholders and retain an investment banking firm for
the specific purposes of evaluating the Triggering Offer and
soliciting offers to acquire the Company by sale or merger;
(b) Contemporaneously establish a committee of the Board
consisting of all directors who are not (i) current or former
officers of the Company, (ii) related by blood or marriage to a
current or former officer or employee of the Company or (iii)
affiliated with the person making the Triggering Offer. After
considering the Triggering Offer and any offers received pursuant
to subsection (a), the committee shall, within a reasonable time
not to exceed 45 days following receipt of the Triggering Offer,
identify to the Board the best available offer (the "Best Offer")
to acquire the Company by sale or merger;
(c) Adopt a plan of merger based upon the Best Offer (the
"Plan"), in accordance with Section 7-111-101 of the Business
Corporation Act of the State of Colorado (the "BCA"), and
convene, for the stated purpose of considering the Plan, a
special meeting of shareholders to be held within 90 days of
receipt of the Triggering Offer. The Board may but need not
recommend the Plan to the shareholders for approval; and
(d) Transmit the Plan to the shareholders for approval pursuant
to Section 7-111-103(5) of the BCA.
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Statement Supporting Shareholder Empowerment Resolution
The proposal permits shareholders to determine whether to
accept offers to purchase the Company. Over the past year, the
Board has refused to forward for vote any offer to shareholders
while simultaneously seeking to grant an inordinate number of
stock options to insiders, even though those options are
counterproductive to economic value for shareholders. The
Company's stock price dramatically underperforms market indices
and the Company's industry peer group. The proposal would require
the Board, after receiving an appropriate offer relative to
historical closing market prices, to solicit other offers and
submit the best offer to shareholders for a vote. Accordingly,
shareholders are given the power to determine for themselves
whether sale proposals are acceptable.
Page 7 of 7 pages
