<PAGE> 1
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
AMERICAN CONSUMER PRODUCTS, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
AMERICAN CONSUMER PRODUCTS, INC.
(NAME OF PERSON(S) FILING PROXY STATEMENT)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / 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: _______________________________
(4) Proposed maximum aggregate value of transaction: __________________
/ / 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> 2
AMERICAN CONSUMER PRODUCTS, INC.
Dear Fellow Stockholders:
The Board of Directors joins me in extending to you a cordial invitation to
attend the 1995 Annual Meeting of the Stockholders of ACPI, to be held at the
Cleveland Marriott East, 3663 Park East Drive (I-271 at Chagrin Blvd.),
Beachwood, Ohio 44122 at 9:00 a.m., on Thursday, May 4, 1995.
At the meeting, action will be taken on the matters described in the
Secretary's formal notice of the meeting and the Proxy Statement accompanying
this letter. I look forward to meeting each of you who are able to attend and to
sharing with you highlights of last year and matters of current and future
interest to ACPI.
It is important that your shares are represented and voted at the meeting.
Accordingly, we respectfully request that you sign, date and mail your proxy in
the enclosed envelope as soon as possible, whether or not you are planning to
attend the meeting. Prompt return of proxies can reduce the cost to ACPI of
follow-up solicitation.
On behalf of the Board of Directors and the employees of ACPI, thank you
for your continued support and interest in ACPI.
Sincerely,
STEPHAN W. COLE
President
<PAGE> 3
AMERICAN CONSUMER PRODUCTS, INC.
NOTICE OF THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 4, 1995
To the Stockholders of
AMERICAN CONSUMER PRODUCTS, INC.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of American
Consumer Products, Inc. (the "Company") will be held at the Cleveland Marriott
East, 3663 Park East Drive (I-271 at Chagrin Blvd.), Beachwood, Ohio 44122 at
9:00 a.m., on Thursday, May 4, 1995, for the following purposes:
(1) To fix the number at and elect five directors of the Company;
(2) To approve grants of stock options to the Directors of the Company;
(3) To ratify the appointment of Arthur Andersen LLP as independent
auditors; and
(4) To transact such other business as may properly come before the meeting
or any adjournment thereof.
Stockholders of record at the close of business on March 24, 1995 will be
entitled to notice of and to vote at such annual meeting or any adjournment
thereof.
The Proxy Statement accompanies this Notice.
BY ORDER OF THE BOARD OF DIRECTORS
RICHARD F. BERN
Secretary
Solon, Ohio
April 4, 1995
YOUR VOTE IS IMPORTANT WHETHER YOU OWN FEW OR MANY SHARES. PLEASE SIGN,
DATE AND MAIL YOUR PROXY TODAY IN THE ENCLOSED, ADDRESSED, POSTAGE-PAID
ENVELOPE.
<PAGE> 4
AMERICAN CONSUMER PRODUCTS, INC.
31100 SOLON ROAD SOLON, OHIO 44139
PROXY STATEMENT
THE PROXY AND SOLICITATION
This Proxy Statement is being mailed on April 4, 1995 to the stockholders
of American Consumer Products, Inc. (the "Company" or "ACPI") in connection with
the solicitation by the Board of Directors of the Company of the enclosed form
of proxy for the 1995 Annual Meeting of the Stockholders to be held on May 4,
1995, at 9:00 a.m., at the Cleveland Marriott East, 3663 Park East Drive (I-271
at Chagrin Blvd.), Beachwood, Ohio 44122 and any adjournment thereof.
VOTING RIGHTS
A form of proxy is enclosed for use at the meeting. It is the intention of
the persons named in the proxy, unless otherwise specifically instructed in the
proxy, to vote all proxies received by them (a) FOR fixing at five the number of
directors to be elected and the election of the nominees named below to serve as
Directors for a term expiring at the Annual Meeting of Stockholders of the
Company in 1996 or until their successors are duly elected and qualified, (b)
FOR approval of the grants of stock options to the Directors of the Company and
(c) FOR the proposal to ratify Arthur Andersen LLP as independent auditors for
the fiscal year ending December 30, 1995.
The Company knows of no other matters to be brought before the meeting, but
if any other business shall properly come before the meeting, the persons named
in the proxy intend to vote the same in accordance with their best judgment. You
may revoke your proxy by a later proxy, by giving notice to the Company, or in
open meeting, without affecting any vote previously taken. However, your mere
presence at the meeting will not operate to revoke your proxy. Under Delaware
law, directors are elected by a plurality of the votes of the shares present in
person or represented by proxy at the meeting and entitled to vote on the
election of directors, and proposals are adopted or approved by the affirmative
vote of the majority of shares present in person or represented by proxy.
Abstentions and broker non-votes are tabulated in determining the votes present
at a meeting. Consequently, an abstention or a broker non-vote has the same
effect as a vote against a proposal or a director nominee, as each abstention or
broker non-vote would be one less vote in favor of a proposal or for a director
nominee.
SHARES VOTING AT MEETING
The close of business on March 24, 1995 has been selected as the record
date for the determination of stockholders entitled to vote at the annual
meeting or any adjournment thereof (the "Record Date"). On such date, there were
outstanding and entitled to vote at the meeting 2,471,179 shares of Common
Stock, which is presently the only class of stock of the Company outstanding. A
majority of the shares of outstanding Common Stock must be represented at the
meeting in person or by proxy in order to constitute a quorum for the
transaction of business. The five candidates for director receiving the greatest
number of votes shall be elected.
<PAGE> 5
THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS AND ITS COMMITTEES
During the fiscal year ended December 31, 1994, the Board of Directors met
six times and took various actions by unanimous written consent. Each Director
attended or participated by telephone in at least 75% of the meetings of the
Board of Directors and of any committee of the Board of Directors on which he
served during the last fiscal year.
The Board of Directors has assigned certain responsibilities to committees
of its members. The Compensation Committee, established by the Board of
Directors in 1986, is composed of Malvin E. Bank, Jeffrey A. Cole and Stephan W.
Cole. The Compensation Committee took various actions without a meeting but did
not meet during 1994. The Compensation Committee is responsible for setting
executive compensation and granting stock options and restricted stock awards
under the Company's option and restricted stock plans.
The Audit Committee, established by the Board of Directors in 1987, is
composed of Malvin E. Bank, Frank W. Hulse and Jeffrey A. Cole. The Audit
Committee is responsible for recommending the appointment of auditors and
reviewing the scope of external and internal auditing procedures. The Audit
Committee met two times during 1994.
ELECTION OF DIRECTOR NOMINEES AND BIOGRAPHICAL INFORMATION
The proxies will be voted to fix at five the number of directors to be
elected and to elect five directors to serve for a term expiring at the Annual
Meeting of Stockholders of the Company in 1996 or until their respective
successors are elected and qualified. While it is not anticipated that any of
the nominees will be unable to serve, if any should be unable to serve, proxies
will be voted in favor of such other person or persons in lieu thereof as the
proxy holders in their discretion shall determine. All nominees are current
members of the Board of Directors.
The names of the nominees for election as directors at the 1995 Annual
Meeting of Stockholders, a description of the business experience of each
nominee, the number of shares of Common Stock beneficially owned by them on
March 24, 1995 and the percentage of ownership represented by such shares of
Common Stock are set forth in the following table. The relevant information
shown therein concerning the directors was obtained partly from the Company's
records and partly from the nominees.
<TABLE>
<CAPTION>
BENEFICIALLY OWNED
ON MARCH 24, 1995
PRINCIPAL OCCUPATION DURING FIRST ----------------------
PAST FIVE YEARS AND BECAME A NUMBER OF PERCENT
NAME AND AGE CURRENT PUBLIC DIRECTORSHIPS DIRECTOR IN SHARES OF CLASS
- - ------------------ ------------------------------------- ----------- --------- --------
<S> <C> <C> <C> <C>
Stephan W. Cole President and Treasurer of the 1982 613,046(1)(3) 24.81%
Age 47 Company since 1982; Stephan W. Cole
is Jeffrey A. Cole's brother
Richard F. Bern Executive Vice President of the 1982 282,500(2)(3) 11.33%
Age 47 Company since 1982; Secretary of the
Company since July 1988
</TABLE>
2
<PAGE> 6
<TABLE>
<CAPTION>
BENEFICIALLY OWNED
ON MARCH 24, 1995
PRINCIPAL OCCUPATION DURING FIRST ----------------------
PAST FIVE YEARS AND BECAME A NUMBER OF PERCENT
NAME AND AGE CURRENT PUBLIC DIRECTORSHIPS DIRECTOR IN SHARES OF CLASS
- - ------------------ ------------------------------------- ----------- --------- --------
<S> <C> <C> <C> <C>
Jeffrey A. Cole Chairman and Chief Executive Officer 1984 420,250(3)(4) 17.01%
Age 53 of Cole National Corporation, a
leading national specialty service
retailer (since 1992); President and
Chief Executive Officer of Cole
National Corporation (from 1984 to
1992); Director of Cole National
Corporation, Victoria Financial
Corporation and Hartmarx Corporation;
Jeffrey A. Cole is Stephan W. Cole's
brother
Malvin E. Bank Partner in the law firm of Thompson, 1986 5,950(2) (5)
Age 64 Hine and Flory, Cleveland, Ohio (for
more than five years); Director of
Oglebay Norton Company
Frank W. Hulse Founder and a Director (since 1983) 1986 5,500(2) (5)
Age 47 of River Capital, an Atlanta-based
venture capital partnership; Chairman
of the Board and President of
American Beechcraft, Inc., an
aircraft sales and service company
(since December 1991)
<FN>
- - ---------------
(1) Includes 83,343 shares held in trust for the benefit of Stephan W. Cole's
children. Mr. Cole disclaims beneficial ownership of such shares.
(2) Includes 21,250, 3,000 and 3,000 shares of Common Stock subject to options
exercisable at March 24, 1995, or within 60 days thereafter, held by Messrs.
Bern, Bank and Hulse, respectively.
(3) Under the Securities and Exchange Commission rules regarding the reporting
of beneficial ownership of shares, the amounts and percentages reported for
each of Stephan W. Cole, Richard F. Bern and Jeffrey A. Cole include 47,500
shares owned by 31100 Solon Road, Inc., a corporation owned equally by
Stephan W. Cole, Richard F. Bern and Stephan W. Cole as custodian for Joseph
E. Cole II, the son of Jeffrey A. Cole, under the Ohio Transfers to Minors
Act. After eliminating the effects of triple counting those shares, the
number and percentage of shares of the Company's Common Stock owned by
Stephan W. Cole, Richard F. Bern and Jeffrey A. Cole would be 581,380
(23.53%), 250,833 (10.06%) and 388,583 (15.72%), respectively (for an
aggregate of 49.31%). If the 47,500 shares owned by 31100 Solon Road, Inc.
were allocated in proportion to the ownership of that corporation, each of
Stephan W. Cole, Richard F. Bern and Stephan W. Cole as custodian for
Joseph E. Cole II would beneficially own one-third of the 47,500 shares, or
15,833 1/3 each. Jeffrey A. Cole disclaims beneficial ownership of the
47,500 shares owned by 31100 Solon Road, Inc.
(4) Includes 8,000 shares owned by Jeffrey A. Cole's son, Joseph E. Cole II. Mr.
Cole disclaims beneficial ownership of such shares.
(5) Less than 1% of the shares of Common Stock outstanding.
</TABLE>
3
<PAGE> 7
PRINCIPAL STOCKHOLDERS
The following table sets forth information at March 24, 1995 with respect
to the beneficial ownership of the Company's Common Stock by all persons known
by the Company to own, individually or as a group, more than 5% of the Company's
outstanding Common Stock, by the executive officers named in the Summary
Compensation Table and by all executive officers and directors as a group.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF BENEFICIALLY PERCENT
BENEFICIAL OWNER OWNED OF CLASS
- - ------------------------------------------- --------------- --------
<S> <C> <C>
Stephan W. Cole 613,046(1)(3) 24.81%
31100 Solon Road
Solon, Ohio 44139
Jeffrey A. Cole 420,250(2)(3) 17.01%
5915 Landerbrook Drive
Lyndhurst, Ohio 44124
Richard F. Bern 282,500(3)(4) 11.33%
31100 Solon Road
Solon, Ohio 44139
Wilen Management Corp. 230,900(5) 9.34%
2360 West Joppa Road,
Suite 226
Lutherville, Maryland 21093
FMR Corp. 206,000(6) 8.34%
82 Devonshire Street
Boston, Massachusetts 02109
Irving B. Harris 191,850(7) 7.76%
c/o William Harris Investors, Inc.
Two North LaSalle Street
Suite 505
Chicago, Illinois 60602
Dimensional Fund Advisors 134,700(8) 5.45%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
All Officers and Directors 1,329,246(1)(2)(3) 53.18%
as a Group (six) (4)(9)
<FN>
- - ---------------
(1) Includes 83,343 shares of Common Stock held in trust for the benefit of
Stephan W. Cole's children. Mr. Cole disclaims beneficial ownership of such
shares.
(2) Includes 8,000 shares owned by Jeffrey A. Cole's son, Joseph E. Cole II. Mr.
Cole disclaims beneficial ownership of such shares.
(3) Under the Securities and Exchange Commission rules regarding the reporting
of beneficial ownership of shares, the amounts and percentages reported for
each of Stephan W. Cole, Richard F. Bern and Jeffrey A. Cole include 47,500
shares owned by 31100 Solon Road, Inc., a corporation owned equally by
Stephan W. Cole, Richard F. Bern and Stephan W. Cole as custodian for Joseph
E. Cole II, the son of Jeffrey A. Cole, under the Ohio Transfers to Minors
Act. After eliminating the effects of triple counting those shares, the
number and percentage of the Company's Common Stock owned by Stephan W.
Cole, Richard F. Bern, Jeffrey A. Cole and all officers and directors as a
group would be 581,380 (23.53%), 250,833 (10.06%), 388,583 (15.72%) and
1,234,246 (49.38%), respectively. If the 47,500 shares owned by
4
<PAGE> 8
31100 Solon Road, Inc. were allocated in proportion to the ownership of that
corporation, each of Stephan W. Cole, Richard F. Bern and Stephan W. Cole as
custodian for Joseph E. Cole II would beneficially own one-third of the
47,500 shares or 15,833 1/3 each. Jeffrey A. Cole disclaims beneficial
ownership of the 47,500 shares owned by 31100 Solon Road, Inc.
(4) Includes 21,250 shares of Common Stock represented by options exercisable at
March 24, 1995, or within 60 days thereafter, held by Mr. Bern.
(5) As of January 19, 1995, based upon information contained in a Schedule 13G
filed with the Securities and Exchange Commission.
(6) As of February 14, 1995, based upon information contained in a Schedule 13G
filed with the Securities and Exchange Commission. In its capacity as
investment advisor to Fidelity Low-Priced Stock Fund (the "Fund"), Fidelity
Management & Research Company ("Fidelity"), 82 Devonshire Street, Boston,
Massachusetts 02109, a wholly owned subsidiary of FMR Corp. FMR Corp.,
through its control of Fidelity, the Fund, and Edward C. Johnson 3d,
Chairman of FMR Corp., each have sole power to dispose of these shares.
(7) As of December 19, 1994, based upon information contained in a Schedule 13D
filing with the Securities and Exchange Commission. Mr. Harris, the Harris
Foundation, the Irving Harris Foundation and the William Harris & Co.
Employee Profit Sharing Trust, whose plan sponsor is William Harris & Co.,
report shared power to dispose of these shares.
(8) As of January 30, 1995, based upon information contained in a Schedule 13G
filed with the Securities and Exchange Commission. Dimensional Fund Advisors
Inc. ("Dimensional"), a registered investment advisor, is deemed to have
beneficial ownership of 134,700 shares of American Consumer Products, Inc.
Stock as of December 31, 1994, all of which shares are held in portfolios of
DFA Investment Dimensions Group Inc., a registered open-end investment
company, or in series of the DFA Investment Trust Company, a Delaware
business trust, or the DFA Group Trust and DFA Participation Group Trust,
investment vehicles for qualified employee benefit plans, all of which
Dimensional Fund Advisors Inc. serves as investment manager. Dimensional
disclaims beneficial ownership of all such shares.
(9) Includes 28,250 shares of Common Stock subject to options which are
exercisable at March 24, 1995, or within 60 days thereafter, including
27,250 shares of Common Stock subject to options held by Mr. Bank (3,000
shares), Mr. Hulse (3,000 shares) and Mr. Bern (21,250 shares).
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION; CERTAIN OTHER RELATIONSHIPS
The Compensation Committee is composed of Stephan W. Cole, President and
Treasurer of the Company, Jeffrey A. Cole and Malvin E. Bank. The following is a
discussion of certain relationships among the members of the Compensation
Committee and the Company, as well as certain relationships between Richard F.
Bern and the Company.
The Company sells key blanks to Things Remembered, Inc. ("Things
Remembered"), a subsidiary of Cole National Corporation, a national specialty
service retailer under a contract expiring on January 31, 1998. Jeffrey A. Cole
is the Chairman and Chief Executive Officer of Cole National Corporation. In
fiscal 1994, total purchases by Things Remembered from ACPI were approximately
$1,267,000; this amount is not considered material to any of the entities,
representing less than 2% of the gross revenues of each entity.
The Company, since 1988, has leased the building located at 31100 Solon
Road, Solon, Ohio which houses the corporate headquarters and certain of the
Company's manufacturing and distribution facilities. The lessor of the property
is 31100 Solon Road, Inc., a corporation owned equally by Stephan W. Cole,
Richard F. Bern
5
<PAGE> 9
and Stephan W. Cole as custodian for Joseph E. Cole II, the son of Jeffrey A.
Cole, under the Ohio Transfers to Minors Act ("31100 Solon Road"). The lease, as
currently in effect, provides for an initial term of eight years and three
renewal option periods of five years each. The fixed rental under the lease was
at a rate of $525,000 per annum, through February 1994, and thereafter at a rate
of $575,000 per annum, including the option periods. Real estate taxes and
various other charges are the responsibility of the Company. At the time of its
inception in 1988 and upon its amendment in 1989, the Board of Directors
unanimously determined that the terms of the lease, and in 1989, the terms of
the amendment, were fair and in the best interests of the Company and were at
least as favorable to the Company as those which could be negotiated with an
unaffiliated lessor.
Boss Manufacturing Company ("Boss"), a wholly owned subsidiary of the
Company, sold in 1989 a warehouse and distribution facility located in
Springfield, Illinois to CRS Limited Partnership ("CRS") for $1,100,000 and
entered into a lease with CRS for the use of that facility. 31100 Solon Road is
a limited partner in CRS, having a 65% interest in the partnership's profits and
losses. The lease has an initial term of 10 years, with three five-year renewal
options in favor of Boss. The fixed rental for the first five years of the
initial term was $152,000 per annum, and for the last five years of the initial
term is $159,500 per annum. The fixed rental during the first renewal period
will be $167,000 per annum in the event Boss elects to exercise its first
renewal option, with the fixed rent adjusting in subsequent renewal periods to
reflect increases in the debt service of the lessor. Real estate taxes and
various other charges are the responsibility of Boss. The Company has guaranteed
Boss' obligations under the lease with CRS. The Board of Directors unanimously
determined that the sale-leaseback arrangement is fair and in the best interest
of the Company and is at least as favorable to the Company as that which could
be negotiated with an unaffiliated party.
Malvin E. Bank is a partner of the law firm of Thompson, Hine and Flory,
Cleveland, Ohio, which provided legal services to the Company in 1994 and
continues to provide such services in 1995.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee's compensation policy is designed to attract and
retain those executive officers who are able to make significant contributions
to both the long-term and short-term success of the Company. An executive
officer's annual compensation package, including that of the chief executive
officer, is composed of an annual salary and, at the discretion of the
Compensation Committee, an annual bonus. If an executive officer, including the
chief executive officer, demonstrates an ability to enhance the profitability of
the Company and stockholder value, for instance by recognizing and capitalizing
on cost saving and market opportunities resulting in improved operating
efficiencies and increased revenues, contributing to the Company's technological
advancement, or developing improved customer, supplier and employee relations,
the Compensation Committee believes that officer should be rewarded for his or
her efforts.
In setting the executive officers' compensation levels, including that of
the chief executive officer, the Compensation Committee considers a variety of
factors, including the salaries of personnel performing similar functions for
comparable companies, the Company's financial performance during the past year
and its prospects for the coming years, the effect of economic conditions on the
Company's performance and the officer's individual contribution to the Company's
performance during the past year and its prospects for the coming years. In
considering the Company's financial performance during the past year, the
Compensation Committee compares the Company's actual financial results (monthly,
quarterly and annually) with expected results given general economic conditions
and events outside the ordinary course of business, i.e. a bankruptcy
6
<PAGE> 10
filing by a customer, if any, that may have affected the historical results. In
considering prospects for the coming years, the Compensation Committee attempts
to assess the extent to which an officer's contributions may be expected to
improve future financial performance of the Company. The comparable companies
considered by the Compensation Committee in setting annual salaries are not
necessarily the same group of companies included in the CRSP Total Return Index
for The NASDAQ Stock Market (U.S. Companies) or the peer group index used in the
graph, appearing below under the heading "Comparison of Five-Year Cumulative
Return," showing the five-year cumulative total stockholder return. These
indices do not necessarily include companies competing in the same businesses as
does the Company, nor do they necessarily include companies that the
Compensation Committee believes would compete for the talent and executive
skills that the Company desires to retain. Consequently, for purposes of annual
salary determinations, the Compensation Committee focuses on companies that are
generally competing in the same businesses and for the same executive talent as
does the Company.
In addition to the salary increases reflected in the Summary Compensation
Table on page 8, the executives of the Company, including the chief executive
officer, were awarded bonuses for their efforts in the fiscal year ended
December 31, 1994. In determining these bonuses, the Compensation Committee
considered the development of a new key machine and the efforts expended to
continue the Company's systems development. These projects are vital to the
continued success of the Company and the enhancement of stockholder value.
Additionally, the Compensation Committee considered the improved operating
results over 1993. The bonuses awarded to the chief executive officer and the
other most highly paid executive officer whose total annual salary and bonus for
the fiscal year ended December 31, 1994 exceeded $100,000 are included in the
Summary Compensation Table.
The Revenue Reconciliation Act of 1993 precludes a publicly held
corporation from taking a deduction for certain compensation in excess of $1
million paid or accrued with respect to the executive officers of the Company.
While these regulations would not have an impact on the deductibility of
compensation paid by the Company, based on the Company's historical compensation
levels, the Compensation Committee intends to adopt, as necessary, a policy with
respect to compensation paid to its executive officers for deductibility under
these Federal income tax regulations.
THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Malvin E. Bank
Jeffrey A. Cole
Stephan W. Cole
7
<PAGE> 11
The following table sets forth individual compensation information for the
fiscal year ended December 31, 1994, for Stephan W. Cole, President of the
Company, and the other most highly paid executive officer whose total annual
salary and bonus for the fiscal year ended December 31, 1994, exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
----------
ANNUAL COMPENSATION SECURITIES
NAME AND ------------------------------ UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS COMPENSATION
- - ------------------ ----- --------- ------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Stephan W. Cole 1994 $267,692 $20,000 -0 - $ 13,974(1)
President 1993 $256,000 -0 - -0 - $ 9,055
1992 $247,115 $25,000 -0 - $ 8,749
Richard F. Bern 1994 $250,962 $18,000 -0 - $ 49,378(2)
Executive Vice 1993 $240,000 -0 - -0 - $ 39,633
President 1992 $231,538 $22,000 21,250 $ 42,825
<FN>
- - ---------------
(1) Includes the Company's contributions for the named executive under the
Company's 401(k) Profit Sharing Retirement Plan ($6,692) and health and
medical expense benefits in excess of those provided to employees generally
($7,282).
(2) Includes the Company's contributions for the named executive under the
Company's 401(k) Profit Sharing Retirement Plan ($6,274), health and medical
benefits in excess of those provided to employees generally ($9,728),
premiums paid by the Company in respect of a non-cancelable guaranteed
long-term disability program provided to Mr. Bern, which is in addition to
the long-term disability benefits generally provided to employees ($5,840)
and reimbursement of interest expenses payable by the named executive to a
third party ($27,536).
</TABLE>
There were no individual grants of stock options awarded under the
Company's Amended and Restated Stock Option Plan or awards of restricted stock
made under the Company's Amended and Restated Restricted Stock Plan during the
fiscal year ended December 31, 1994, to any of the executive officers named in
the Summary Compensation Table. The restrictions on restricted stock awarded to
Mr. Bern in prior years lapsed during the fiscal year ended December 25, 1993.
On October 27, 1994, the Board of Directors granted, subject to stockholder
approval, options to purchase Company Common Stock to each of the Directors of
the Company, including Messrs. S. Cole and Bern. See the discussion below under
the heading "PROPOSAL TO APPROVE GRANTS OF STOCK OPTIONS TO DIRECTORS".
8
<PAGE> 12
The following table sets forth information regarding options held by each
of the executive officers named in the Summary Compensation Table as of December
31, 1994. There were no stock options exercised by any of these executive
officers during the fiscal year ended December 31, 1994.
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FY-END(#) AT FY-END ($)
---------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - ------------------------------------- ----------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
Richard F. Bern...................... 21,250 -0 - None(1) $ -0 -
<FN>
- - ---------------
(1) As of December 31, 1994, the exercise price of Mr. Bern's exercisable
options ($3.40) was higher than the market value of the Company's Common
Stock ($2.50) on that date.
</TABLE>
DIRECTOR COMPENSATION
The Company pays Directors who do not otherwise receive compensation from
the Company at a rate of $5,000 per annum. At the 1990 Annual Meeting, the
stockholders approved a grant of options to acquire 3,000 shares of Common Stock
of the Company to each of Messrs. Bank and Hulse at an exercise price of $7.50
per share. The original exercise price per share of Common Stock for the options
granted to Messrs. Bank and Hulse was determined by calculating the mean between
the high and low sales price of a share of Common Stock of the Company as of the
date of the grant. See the discussion below under the heading "PROPOSAL TO
APPROVE GRANTS OF STOCK OPTIONS TO DIRECTORS" regarding additional option grants
to each of the Directors for which stockholder approval is being sought at the
Annual Meeting.
COMPARISON OF FIVE-YEAR CUMULATIVE RETURN
The following graph shows a five-year comparison of cumulative total
stockholder return, assuming dividend reinvestment, for the Company, the CRSP
Total Return Index for The NASDAQ Stock Market (U.S. Companies) and a peer group
index consisting of Waxman Industries, Inc., Selfix, Inc., Elco Industries,
Inc., Moore Handley, Inc. and Triangle Corp. The graph also assumes that the
value of a share of the Company's Common Stock and each index was $100 as of the
end of 1989 and that the returns of each member of the peer group have been
weighted according to their stock market capitalization as of the beginning of
each period for which a return is indicated.
9
<PAGE> 13
PERFORMANCE GRAPH
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) NASDAQ PEER GROUP ACPI
DOLLARS
<S> <C> <C> <C>
1989 100.00 100.00 100.00
1990 84.92 54.29 42.86
1991 136.28 72.62 46.43
1992 158.58 61.55 71.43
1993 180.93 84.41 51.79
1994 176.92 69.68 35.72
</TABLE>
PROPOSAL TO APPROVE GRANTS OF STOCK OPTIONS TO DIRECTORS
Subject to stockholder approval, on October 27, 1994, the Board of
Directors granted options (the "Options") to the Directors to acquire Common
Stock of the Company. The Options were granted to the Directors in recognition
of their service to the Company, particularly during the Company's consideration
in 1993 and early 1994 of a possible combination with Curtis Industries, Inc.
Additionally, the Options are intended to provide the Directors with increased
incentives to promote the success of the Company by affording them an
opportunity to purchase additional shares of Common Stock of the Company and to
increase their financial stake in the Company's continued success.
The number of shares of Common Stock subject to each Option grant are as
follows: Richard F. Bern, 50,000 shares; Stephan W. Cole, 30,000 shares; Jeffrey
A. Cole, 25,000 shares; Malvin E. Bank, 7,500; and Frank W. Hulse, 7,500.
Messrs. S. Cole and Bern are officers and employees of the Company, although
they are not eligible to participate in the Company's Amended and Restated Stock
Option Plan. Messrs. J. Cole, Bank and Hulse are neither officers nor employees
of the Company.
In the event the stockholders do not approve the Options, each of the
Option grants will be canceled.
10
<PAGE> 14
Each of the Options has a term of five years (from the date of grant) and
is exercisable immediately. The exercise price is $2.4375 per share which was
the mean between the high and low sales price of a share of Common Stock on
October 27, 1994. The Options were granted outside of the Company's Amended and
Restated Stock Option Plan. Directors of the Company are not eligible to
participate in the Stock Option Plan. For Federal income tax purposes, the
optionees will not recognize income at the time of grant. At the time of
exercise, however, the optionee will recognize ordinary income in an amount
equal to the difference between the exercise price and the fair market value of
the shares at the time of exercise. The Company is entitled to a deduction
corresponding in time and amount to the amount includable as income to the
optionee in connection with the exercise.
The grant of the Options will not be exempt from Section 16(b) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). Consequently
the acquisition of the Options, which will be deemed to have occurred on the
date of stockholder approval, will be matched against sales, if any, by the
individual Directors of Company Common Stock occurring within the six-month
period preceding and following the date of stockholder approval. To the extent
that any such sales may be matched with the acquisition of the Options, profit
(as determined under Section 16), if any, attributable to the transaction may be
subject to recapture by the Company. Based on information available or provided
to the Company, none of the Directors have effected any sales of Company Common
Stock which would be matched against the acquisition of the Options.
The vote required to approve the grant of Options is the affirmative vote
of the holders of a majority of the shares of Common Stock present (in person or
by proxy), including abstentions, at the meeting. The Board of Directors
recommends a vote "FOR" the approval of the Options.
APPROVAL OF INDEPENDENT AUDITORS
The Board of Directors of the Company, acting upon the recommendation of
its Audit Committee, has appointed Arthur Andersen LLP, independent auditors, to
examine the financial statements of the Company and its subsidiaries for the
fiscal year ending December 30, 1995. Arthur Andersen LLP has conducted the
annual audit of the Company's financial statements since 1983. Although
stockholder ratification of this appointment is not required by law or binding
on the Board, the Board believes that stockholders should be given this
opportunity to express their views. If the stockholders do not ratify the
appointment of Arthur Andersen LLP as the Company's independent auditors, the
Board will consider this vote in determining whether or not to continue the
engagement of Arthur Andersen LLP. The Board of Directors recommends
ratification of the appointment of Arthur Andersen LLP. The vote required to
ratify the appointment is the affirmative vote of holders of a majority of the
shares of Common Stock represented at the meeting (in person or by proxy).
A representative of Arthur Andersen LLP will be present at the annual
meeting and will be available to respond to appropriate questions and to make a
statement if he desires to do so.
11
<PAGE> 15
COST AND METHOD OF PROXY SOLICITATION
The cost of solicitation of the proxies will be paid by the Company.
Arrangements may be made with brokers and other nominees to send proxy materials
to their principals, and the Company may reimburse them for their reasonable
expenses in so doing. Officers and other regular employees of the Company may
request the return of proxies by telephone, telegram or in person.
STOCKHOLDER PROPOSALS
Any stockholder desiring to submit a proposal for inclusion in the
Company's proxy materials for its 1996 annual meeting must do so by December 7,
1995.
The Company's Annual Report to the Securities and Exchange Commission on
Form 10-K for the fiscal year ended December 31, 1994 (including the financial
statements and schedule thereto), is enclosed with this Proxy Statement.
BY ORDER OF THE BOARD OF DIRECTORS
RICHARD F. BERN
Secretary
Solon, Ohio
April 4, 1995
12
<PAGE> 16
AMERICAN CONSUMER PRODUCTS, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS MAY 4, 1995
The undersigned, having received the Notice of Meeting and Proxy
Statement dated April 4, 1995, hereby appoints Joel M. Falck, Cynthia
P L. Burmeister and Elizabeth Warswick, and each of them, proxies of the
R undersigned with full power of substitution and revocation to attend
O the annual meeting of the stockholders of the Company to be held at
X the Cleveland Marriott East, 3663 Park East Drive (I-271 at Chagrin
Y Blvd.), Beachwood, Ohio on May 4, 1995 at 9:00 A.M., and any
adjournment thereof, and thereat to vote all the shares of stock of
the undersigned in the Company which the undersigned would be entitled
to vote if personally present:
(1) To fix the number at and elect five (5) Directors for the
Company. The nominees of the Board of Directors are:
Stephan W. Cole, Richard F. Bern, Jeffrey A. Cole, Malvin E.
Bank and Frank W. Hulse
(INSTRUCTION: To withhold authority to vote for one or more of
the nominees, write the name of each nominee with
respect to whom you wish to withhold authority to vote on the
space provided below.)
-----------------------------------------------------------------
(2) To approve grants of stock options to the Directors of the
Company.
/ / FOR / / AGAINST / / ABSTAIN
(3) To ratify the appointment of Arthur Andersen LLP as
independent auditors for the Company for the 1995 fiscal
year.
/ / FOR / / AGAINST / / ABSTAIN
(4) In their discretion on any other matters which may properly
come before the meeting; hereby ratifying and confirming all
that said proxies may lawfully do or cause to be done by
virtue hereof, and hereby revoking any proxies heretofore
given by the undersigned to vote at said meeting or any
adjournment thereof. THIS PROXY WHEN PROPERLY EXECUTED WILL
BE VOTED AS DIRECTED. IF NO DIRECTION IS INDICATED, THIS
PROXY WILL BE VOTED FOR THE FIVE NOMINEES NAMED ABOVE AND IN
FAVOR OF THE PROPOSALS LISTED ABOVE AS ITEMS 2 AND 3.
(Continued, and to be signed, on the other side)
(Continued from other side)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
Witness my hand this
day of , 1995
------------------------
------------------------
Signature
NOTE: Please date, sign
exactly as name or names
appear hereon and return
to National City Bank,
as agent for Company, in
the enclosed envelope
which requires no
postage. When signing as
Attorney, Executor,
Trustee, Guardian or
Officer of a
corporation, please give
title as such.
For joint accounts, each
joint owner should sign.
PLEASE VOTE, SIGN AND DATE THE PROXY CARD AND
RETURN SAME IN THE ENCLOSED SELF-ADDRESSED ENVELOPE.
Proxy Card
