SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] 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 ss. 240.14a-11(c) or ss. 240.14a-12
AMERICAN BUILDINGS COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(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:
_________________________________________________________________________
-1-
<PAGE>
AMERICAN BUILDINGS COMPANY
STATE DOCKS ROAD
EUFAULA, ALABAMA 36027
334-687-2032
March 28, 1997
Dear Stockholder:
You are cordially invited to attend the Company's Annual Meeting of
Stockholders to be held at 11:00 A.M. on Tuesday, April 29, 1997 at the offices
of Fulbright & Jaworski L.L.P., 666 Fifth Avenue, New York, New York 10103.
At the meeting you will be asked to elect seven directors of the Company
and to approve an amendment to the Company's 1994 Stock Option Plan which would
increase the number of shares available for grant thereunder. In addition, we
will be pleased to report on the affairs of the Company and a discussion period
will be provided for questions and comments of general interest to stockholders.
We look forward to greeting personally those stockholders who are able to
be present at the meeting; however, whether or not you plan to be with us at the
meeting, it is important that your shares be represented. Accordingly, you are
requested to sign and date the enclosed proxy and mail it in the envelope
provided at your earliest convenience.
Thank you for your cooperation.
Very truly yours,
William L. Selden
Chairman of the Board
of Directors
Robert T. Ammerman
President
<PAGE>
AMERICAN BUILDINGS COMPANY
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
------------------------
Eufaula, Alabama
March 28, 1997
Notice is hereby given that the Annual Meeting of Stockholders of
American Buildings Company will be held on Tuesday, April 29, 1997 at 11:00 A.M.
at the offices of Fulbright & Jaworski L.L.P., 666 Fifth Avenue, New York, New
York 10103 for the following purposes:
(1) To elect seven directors to serve for the ensuing year;
(2) To consider and vote upon a proposal to amend the Company's
1994 Stock Option Plan to increase the number of shares which
may be granted thereunder; and
(3) To transact such other business as may properly come before
the Annual Meeting or any adjournment thereof.
Stockholders of record at the close of business on March 17, 1997
will be entitled to notice of and to vote at the Annual Meeting or any
adjournment thereof.
All stockholders are cordially invited to attend the Annual Meeting
in person. Stockholders who are unable to attend the Annual Meeting in person
are requested to complete and date the enclosed form of proxy and return it
promptly in the envelope provided. No postage is required if mailed in the
United States. Stockholders who attend the Annual Meeting may revoke their proxy
and vote their shares in person.
PEGGY S. WOODHAM
Secretary
<PAGE>
AMERICAN BUILDINGS COMPANY
State Docks Road
Eufaula, Alabama 36027
------------------------
PROXY STATEMENT
------------------------
GENERAL INFORMATION
PROXY SOLICITATION
This Proxy Statement is furnished to the holders of Common Stock,
par value $.01 per share (the "Common Stock"), of American Buildings Company
(the "Company") in connection with the solicitation by the Board of Directors of
the Company of proxies for use at the Annual Meeting of Stockholders to be held
on Tuesday, April 29, 1997, or at any adjournment thereof, pursuant to the
accompanying Notice of Annual Meeting of Stockholders. The purposes of the
meeting and the matters to be acted upon are set forth in the accompanying
Notice of Annual Meeting of Stockholders. The Board of Directors is not
currently aware of any other matters which will come before the meeting.
Proxies for use at the meeting are being solicited by the Board of
Directors of the Company. Proxies will be mailed to stockholders on or about
March 28, 1997 and will be solicited chiefly by mail. The Company will make
arrangements with brokerage houses and other custodians, nominees and
fiduciaries to send proxies and proxy material to the beneficial owners of the
shares and will reimburse them for their expenses in so doing. Should it appear
desirable to do so in order to ensure adequate representation of shares at the
meeting, officers, agents and employees of the Company may communicate with
stockholders, banks, brokerage houses and others by telephone, facsimile or in
person to request that proxies be furnished. All expenses incurred in connection
with this solicitation will be borne by the Company. The Company has no present
plans to hire special employees or paid solicitors to assist in obtaining
proxies, but reserves the option of doing so if it should appear that a quorum
otherwise might not be obtained.
REVOCABILITY AND VOTING OF PROXY
A form of proxy for use at the Annual Meeting of Stockholders and a
return envelope for the proxy are enclosed. Stockholders may revoke the
authority granted by their execution of proxies at any time before their
effective exercise by filing with the Secretary of the Company a written notice
of revocation or a duly executed proxy bearing a later date, or by voting in
person at the meeting. Shares of the Company's Common Stock represented by
executed and unrevoked proxies will be voted in accordance with the choice or
instructions specified thereon. If no specifications are
<PAGE>
given, the proxies intend to vote the shares represented thereby to approve
Proposal Nos. 1 and 2 as set forth in the accompanying Notice of Annual Meeting
of Stockholders and in accordance with their best judgment on any other matters
which may properly come before the meeting.
RECORD DATE AND VOTING RIGHTS
Only stockholders of record at the close of business on March 17,
1997 are entitled to notice of and to vote at the Annual Meeting or any and all
adjournments thereof. On March 17, 1997 there were 5,316,243 shares of Common
Stock outstanding; each such share is entitled to one vote on each of the
matters to be presented at the Annual Meeting. The holders of a majority of the
outstanding shares of Common Stock, present in person or by proxy and entitled
to vote, will constitute a quorum at the Annual Meeting. Abstentions and broker
non-votes will be counted for purposes of determining the presence or absence of
a quorum. "Broker non-votes" are shares held by brokers or nominees which are
present in person or represented by proxy, but which are not voted on a
particular matter because instructions have not been received from the
beneficial owner. Under applicable Delaware law, the effect of broker non-votes
on a particular matter depends on whether the matter is one as to which the
broker or nominee has discretionary voting authority under the applicable rule
of the New York Stock Exchange. The effect of broker non-votes on the specific
items to be brought before the Annual Meeting of Stockholders is discussed under
each item.
-2-
<PAGE>
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth information as of February 15, 1997
(except as otherwise noted in the footnotes), regarding the beneficial ownership
determined in accordance with the rules of the Securities and Exchange
Commission (the "SEC"), which generally attributes beneficial ownership of
securities to persons who possess sole or shared voting power and/or investment
power with respect to those securities, of the Company's Common Stock of: (i)
each person known by the Company to own beneficially more than five percent of
the Company's outstanding Common Stock; (ii) each director and nominee for
director of the Company; (iii) each executive officer named in the Summary
Compensation Table (see "Executive Compensation"); and (iv) all directors and
executive officers of the Company as a group. Except as otherwise specified, the
named beneficial owner has the sole voting and investment power over the shares
listed.
Amount and Nature of
Beneficial Ownership Percentage of
Name of Beneficial Owner of Common Stock Common Stock
- ------------------------ --------------- ------------
SAFECO Corporation (1) 675,300 12.7%
Heartland Advisors, Inc.(2)......... 531,400 10.0%
Robertson, Stephens & Company
Investment Management, L.P.(3).... 468,000 8.8%
Wellington Management Company,
LLP(4)............................ 287,000 5.4%
Robert T. Ammerman(5)............... 150,169 2.8%
Harold J. Levy(6)................... 19,632 *
Douglas L. Newhouse(7).............. 83,717 1.6%
Ralph S. Saul(6).................... 10,375 *
William L. Selden(8)................ 114,312 2.1%
Robert F. Shapiro(6)................ 14,375 *
Kendrick R. Wilson III(6)........... 13,375 *
William R. Buchholz(9).............. 47,485 *
Barry L. Milling(9)................. 63,651 1.2%
Roy L. Smith(10).................... 44,704 *
Joel R. Voelkert(11)................ 72,387 1.3%
All directors and executive officers
as a group (14 persons)(12)....... 622,140 10.9%
* Less than 1%
-3-
<PAGE>
(1) This figure is based on information set forth in Schedule 13G dated
February 10, 1997 filed by the beneficial owner. The Schedule 13G states
that such beneficial owner is the parent holding company of SAFECO Asset
Management Company, an investment adviser. Such entities share voting and
dispositive power with respect to such shares. The address of such
beneficial owner is SAFECO Plaza, Seattle, WA 98185.
(2) This figure is based on information set forth in Schedule 13G dated
January 8, 1997 filed by the beneficial owner. The Schedule 13G states
that such beneficial owner has sole voting and dispositive power with
respect to such shares. The address of such beneficial owner is 790 North
Milwaukee Street, Milwaukee, WI 53202.
(3) This figure is based on information set forth in Schedule 13G dated
February 13, 1997, filed by the beneficial owner. The Schedule 13G states
that such beneficial owner, a registered investment adviser, shares voting
and dispositive power with respect to such shares. The address of such
beneficial owner is 555 California Street, Suite 2600, San Francisco, CA
94104.
(4) This figure is based on information set forth in Schedule 13G dated
January 24, 1997 filed by the beneficial owner. The Schedule 13G states
that such beneficial owner shares voting and dispositive power with
respect to such shares. The address of such beneficial owner is 75 State
Street, Boston, MA 02109.
(5) Includes 102,777 shares of Common Stock issuable pursuant to options which
are exercisable within 60 days of February 15, 1997. Does not include
shares of Common Stock issuable pursuant to options which are not
exercisable within 60 days of February 15, 1997. See "Management--Stock
Options."
(6) Includes 9,375 shares of Common Stock issuable pursuant to options which
are exercisable within 60 days of February 15, 1997. Does not include
shares of Common Stock issuable pursuant to options which are not
exercisable within 60 days of February 15, 1997.
(7) Includes 6,125 shares issuable pursuant to options which are exercisable
within 60 days of February 15, 1997 and 77,592 shares which are owned by
Sterling ABC/Metbuild Corporation ("Sterling ABC"), a corporation in which
Mr. Newhouse owns one-third of the outstanding shares. Mr. Newhouse
disclaims beneficial ownership of the shares owned by Sterling ABC, other
than the shares in which he has a pecuniary interest. Does not include
shares of Common Stock issuable pursuant to options which are not
exercisable within 60 days of February 15, 1997.
(8) Includes 14,375 shares issuable pursuant to options which are exercisable
within 60 days of February 15, 1997 and 77,592 shares which are owned by
Sterling ABC, a corporation in which Mr. Selden owns one-third of the
outstanding shares. Mr. Selden disclaims beneficial ownership of the
shares owned by Sterling ABC, other than the shares in which he has a
pecuniary interest. Does not include shares of Common Stock issuable
pursuant to options which are not exercisable within 60 days of February
15, 1997.
(9) Includes 41,306 shares of Common Stock issuable pursuant to options which
are exercisable within 60 days of February 15, 1997. Does not include
shares of Common Stock issuable pursuant to options which are not
exercisable within 60 days of February 15, 1997.
(10) Includes 37,598 shares of Common Stock issuable pursuant to options which
are exercisable within 60 days of February 15, 1997. Does not include
shares of Common Stock issuable pursuant to options which are not
exercisable within 60 days of February 15, 1997.
(11) Consists of 72,387 shares of Common Stock issuable pursuant to options
which are exercisable within 60 days of February 15, 1997. Does not
include shares of Common Stock issuable pursuant to options which are not
exercisable within 60 days of February 15, 1997.
-4-
<PAGE>
(12) Includes 77,592 shares owned by Sterling ABC and 416,924 shares issuable
pursuant to options which are exercisable within 60 days of February 15,
1997. Does not include shares of Common Stock issuable pursuant to options
which are not exercisable within 60 days of February 15, 1997.
PROPOSAL NO. 1--ELECTION OF DIRECTORS
Seven directors (constituting the entire Board) are to be elected at
the Annual Meeting. Unless otherwise specified, the enclosed proxy will be voted
in favor of the persons named below to serve until the next annual meeting of
stockholders and until their successors shall have been duly elected and shall
qualify. In the event any of these nominees shall be unable to serve as a
director, the shares represented by the proxy will be voted for the person, if
any, who is designated by the Board of Directors to replace the nominee. All
nominees have consented to be named and have indicated their intent to serve if
elected. The Board of Directors has no reason to believe that any of the
nominees will be unable to serve or that any vacancy on the Board of Directors
will occur.
The nominees, their ages, the year in which each first became a
director and their principal occupations or employment during the past five
years are:
-5-
<PAGE>
Year First Principal Occupation
Nominee Age Became Director During the Past Five Years
- ------- --- --------------- --------------------------
Robert T. Ammerman 57 1992 President, Chief Executive
Officer and a director since
joining the Company in July
1992. From 1973 until he
joined the Company, Mr.
Ammerman was employed by
United Dominion Industries,
Inc. and its affiliates,
including Varco-Pruden
Buildings, a manufacturer of
metal buildings. Mr.
Ammerman served in various
capacities, including
Vice-President/General
Manager Eastern Division of
Varco-Pruden Buildings and
President of the Buildings
segment of United Dominion
Industries, Inc., which
included Varco-Pruden
Buildings, Stran Buildings
and AEP/Span. Mr. Ammerman
was Chairman and a member of
the Executive Committee of
the Metal Building
Manufacturers Association,
an industry trade
association, in 1995.
William L. Selden 49 1993 Director of the Company
since January 1993 and
Chairman of the Board of
Directors of the Company
since February 1993. Mr.
Selden is a partner and
co-founder of Sterling
Ventures Limited, a company
formed in 1991 for the
purpose of making private
equity investments. Mr.
Selden is Chairman of the
Board of Directors of
Tidewater Holdings, Inc. and
a director of Aavid Thermal
Technologies, Inc. and
McArthur/Glen Europe
Holdings, Ltd.
Harold Levy 43 1993 Director of the Company
since January 1993. Mr. Levy
is a Principal of Iridian
Asset Management. Prior to
co-founding Iridian Asset
Management in April 1996,
Mr. Levy was Senior Vice
President at Arnhold and S.
Bleichroeder Inc. from
September 1991 until March
1996 and was Vice President
from December 1984 to
September 1991. Mr. Levy is
a Director of First Columbia
Financial.
-6-
<PAGE>
Year First Principal Occupation
Nominee Age Became Director During the Past Five Years
- ------- --- --------------- --------------------------
Douglas L. Newhouse 43 1993 Director of the Company
since January 1993. Mr.
Newhouse is a partner and
co- founder of Sterling
Ventures Limited. Prior to
co-founding Sterling
Ventures in 1991, Mr.
Newhouse was President of
Middex Capital Corp., which
specialized in the
acquisition of middle market
companies, for one and
one-half years. Prior to his
employment with Middex, Mr.
Newhouse was a Senior Vice
President in the Corporate
Finance Department of Lehman
Brothers, Inc. Mr. Newhouse
is a director of Aavid
Thermal Technologies, Inc.
Ralph S. Saul 74 1993 Director of the Company
since May 1993. Mr. Saul is
also a director of Horace
Mann Educators Corp.,
Commonwealth Ventures and
PH-II, Inc. He is on the
board of The Brookings
Institution, the Committee
for Economic Development,
the Regulatory Advisory
Committee to The New York
Stock Exchange Board of
Directors, and the Advisory
Board of the Wharton
Entrepreneurial Center. Mr.
Saul was Chairman and
Co-Chief Executive Officer
of CIGNA Corp. from 1982 to
1985 and was President of
the American Stock Exchange
from 1966 to 1971.
Robert F. Shapiro 62 1993 Director of the Company
since May 1993. Mr. Shapiro
is the President of RFS &
Associates, a private
investment and consulting
firm. He is also an
independent general partner
of Equitable Capital
Partners and currently is a
director of the TJX
Companies, Inc., The Burnham
Fund, Inc. and Magainin
Pharmaceuticals. Mr. Shapiro
was formerly a Co-Chairman
of Wertheim Schroder & Co.
Incorporated, an investment
banking firm, a director of
Schroders PLC and Lehman
Brothers, Inc., a Governor
of the American Stock
Exchange and a Chairman of
the Securities Industry
Association.
-7-
<PAGE>
Year First Principal Occupation
Nominee Age Became Director During the Past Five Years
- ------- --- --------------- --------------------------
Kendrick R. Wilson III 50 1994 Director of the Company
since February 1994. Mr.
Wilson is a General Partner
of Lazard Freres & Co. LLC.
Prior to joining Lazard
Freres & Co. LLC at the end
of 1989, Mr. Wilson was
President and Chief
Operating Officer of Ranieri
Wilson & Company Inc., a
merchant banking firm he
co-founded. Prior to 1988,
Mr. Wilson was a Senior
Executive Vice President of
E.F. Hutton & Company Inc.
and head of Hutton's
Corporate Finance
Department, and prior
thereto was a Managing
Director at Salomon Brothers
Inc. Mr. Wilson is a
director of Bank United,
American Marine Holdings,
Inc. and ITT Corporation.
All directors hold office until the next meeting of the stockholders
of the Company and until their successors are elected and qualified.
The Board of Directors has a Finance and Audit Committee which is
charged with reviewing the Company's internal accounting procedures, consulting
with and reviewing the selection of the Company's independent auditors and
reviewing the Company's financing needs. The Finance and Audit Committee
currently consists of Messrs. Newhouse and Saul. During 1996, the Finance and
Audit Committee met twice. The Board of Directors also has a Compensation
Committee charged with recommending to the Board the compensation for the
Company's executives. The Compensation Committee is currently composed of
Messrs. Newhouse and Shapiro. During 1996, the Compensation Committee met once.
The Board of Directors has also established an Executive Committee charged with
exercising powers of the Board of Directors expressly delegated to it. The
Executive Committee is currently composed of Messrs. Ammerman, Levy and Selden.
During 1996, the Executive Committee did not act.
During the fiscal year ended December 31, 1996, the Board of
Directors held five meetings and acted three times by unanimous written consent
in lieu of a meeting. Each director attended at least 75% of the meetings of the
Board of Directors held when he was a Director and of all committees of the
Board of Directors on which he served.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's executive
officers and directors, and persons who beneficially own more than ten percent
of the Company's Common Stock, to file initial reports of ownership and reports
of changes in ownership with the SEC and the National Association of Securities
Dealers, Inc. Executive officers, directors and greater than ten percent
beneficial owners are required
-8-
<PAGE>
by SEC regulations to furnish the Company with copies of all Section 16(a) forms
they file.
Based upon on a review of the copies of such forms furnished to the
Company and written representations from the Company's executive officers and
directors, the Company believes that during fiscal 1996 all Section 16(a) filing
requirements applicable to its executive officers, directors and greater than
ten percent beneficial owners were complied with.
VOTE REQUIRED
The seven nominees receiving the highest number of affirmative votes
of the shares present in person or represented by proxy and entitled to vote for
them, a quorum being present, shall be elected as directors. Only votes cast for
a nominee will be counted, except that the accompanying proxy will be voted for
all nominees in the absence of instruction to the contrary. Abstentions, broker
non-votes and instructions on the accompanying proxy card to withhold authority
to vote for one or more nominees will result in the respective nominees
receiving fewer votes. However, the number of votes otherwise received by the
nominee will not be reduced by such action.
THE BOARD OF DIRECTORS DEEMS "PROPOSAL NO. 1-ELECTION OF DIRECTORS"
TO BE IN THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS A
VOTE "FOR" APPROVAL THEREOF.
-9-
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information concerning all cash and
non-cash compensation paid or to be paid by the Company as well as certain other
compensation awarded, earned by and paid, during the fiscal years indicated, to
the President and Chief Executive Officer and each of the four other most highly
compensated executive officers of the Company for such period in all capacities
in which they served.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------------------ -----------------------
Awards
------
Other All
Annual Securities Other
Name and Principal Compen- Underlying Compen-
Position Year Salary Bonus(1) sation Options/SARs sation(2)
-------- ---- ------ -------- ------ ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
Robert T. Ammerman
President and Chief
Executive Officer......... 1996 $250,000 $14,805 - - $8,525
1995 215,000 215,000 $45,399(3) 27,193 $6,599
1994 189,308 192,500 6,849(3) 50,000 5,583
Joel R. Voelkert
President-Construction
Products Group............ 1996 166,400 8,488 - - 8,455
1995 160,000 120,000 - 8,000 7,104
1994 152,917 116,250 - 33,594 4,976
Roy L. Smith
Vice President-Polymer
Division.................. 1996 112,200 53,914(4) - - 4,814
1995 108,500 82,850(4) - 4,000 5,358
1994 104,000 86,000(4) - 31,094 3,534
Barry L. Milling
Vice President-Technical.. 1996 137,500 4,387 - - 5,461
1995 128,500 64,250 - 6,000 5,508
1994 117,925 60,000 1,822(5) 31,094 4,217
William R. Buchholz
Vice President-Operations. 1996 125,500 3,852 - - 9,296
1995 115,500 57,750 - 6,000 6,920
1994 107,917 55,000 - 31,094 4,057
</TABLE>
- ----------
(1) For each of 1996, 1995 and 1994, represents bonuses paid during the
following year for services rendered in that year. In 1996, the Company
adopted a shareholder value added plan for key senior and middle
management executives. The plan entitles participants to receive cash
bonuses based on a fixed percentage of Shareholder Value Added (as defined
in the plan) and the change in Shareholder Value Added. Prior to 1996, key
senior and middle management executives received bonuses under an
incentive bonus plan adopted in 1993. The bonus plan entitled participants
to receive cash bonuses equal to a specified percentage of their salary
based upon the Company's earnings before interest, taxes, depreciation and
amortization and certain specified expenses ("EBITDA") for the year as
compared to EBITDA in the Company's plan for such year.
-10-
<PAGE>
(2) Includes the Company's contributions to the American Buildings Company
Savings Plan (the "Savings Plan") of $3,174, $4,880, $4,814, $3,175 and
$4,347 in 1996, $4,406, $6,013, $5,358, $4,351 and $5,838 in 1995 and
$2,987, $3,851, $3,534, $2,987 and $2,914 in 1994 to Messrs. Ammerman,
Voelkert, Smith, Milling and Buchholz, respectively. The Company is
obligated to contribute at least 25% of the amount of compensation elected
to be deferred by such individual; however, the Company has the
opportunity to increase this amount. In addition, the Company is required
to contribute 1% of its eligible gross payroll to participants in the
Savings Plan pursuant to a formula based on compensation and years of
service (the "Additional Contribution"). In 1994, 1995 and 1996, the
Company contributed 50%, 50% and 25% of the amount of compensation elected
to be deferred by each named individual plus, in 1994 and 1995 and 1996
the Additional Contribution to each named individual. The balance of the
amounts in this column consists of insurance premiums on term life
insurance paid by the Company for the benefit of the named individuals
(other than Mr. Smith) and a car allowance for each of Messrs. Ammerman,
Voelkert, Milling and Buchholz.
(3) Represents the value of stock issued to Mr. Ammerman in such year at a
purchase price below fair market value, based on the difference between
the purchase price of $0.01883 per share and the fair market value of the
Common Stock on the date of purchase. At December 31, 1996, Mr. Ammerman
held an aggregate of 11,947 shares of restricted stock granted to him
pursuant to his employment agreement, of which 1,327 shares were issued to
him in 1994 and 2,654 shares were issued to him in 1995. The value of such
restricted shares was $285,009.66 at December 31, 1996, based on $23.875,
the closing price of the Common Stock as reported by the Nasdaq National
Market on December 31, 1996. Mr. Ammerman is entitled to any dividends
paid on the restricted shares of Common Stock owned by him. The Company
currently does not anticipate paying dividends. The Company's option to
repurchase such shares upon termination of Mr. Ammerman's employment was
terminated in connection with the Company's initial public offering.
(4) Includes a bonus of $52,000 paid in 1997 based on the Polymer Coil Coaters
Division's 1996 performance, a bonus of $55,800 paid in 1996 based on that
division's 1995 performance and a bonus of $58,950 paid in 1995 based on
that division's 1994 performance.
(5) Consists of moving expenses.
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<PAGE>
STOCK OPTIONS
No grants of stock options were made during the year ended December 31,
1996 to the Company's executive officers named in the Summary Compensation
Table. However, on February 5, 1997, the Company granted options to purchase an
aggregate of 15,000 shares, 9,000 shares, 4,000 shares, 5,000 shares and 5,000
shares, to each of Messrs. Ammerman, Voelkert, Smith, Milling and Buchholz,
respectively, at an exercise price of $25.25 per share, equal to the closing
price of the Common Stock on the date of grant. The options are exercisable in
four equal annual installments commencing February 5, 1998.
The following table sets forth the aggregate options exercised during the
year ended December 31, 1996 and the number of securities underlying unexercised
options and the value of unexercised options held by each of the executive
officers named in the Summary Compensation Table at December 31, 1996:
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Shares Options at Year End Options at Year End(1)
Acquired Value -------------------------- -------------------------
Name on Exercise Realized($) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert T. Ammerman. 0 0 95,474 43,597 $1,423,535 $307,643
Joel R. Voelkert... 0 0 63,988 22,798 988,636 180,174
Roy L. Smith....... 4,249 94,965 29,822 18,548 408,053 170,799
Barry L. Milling... 0 0 33,030 20,048 457,420 170,799
William R. Buchholz 0 0 33,030 20,048 457,420 170,799
</TABLE>
- ----------
(1) Computed based upon the difference between the stock option exercise price
and the closing price of the Company's Common Stock on December 31, 1996
($23.88).
MANAGEMENT RETIREMENT AND DEATH BENEFIT PLAN
The Company has a noncontributory retirement and death benefit plan
which covers certain management employees. The plan provides a death benefit if
a covered employee dies prior to reaching retirement age, as defined by the
plan, to be paid over a minimum ten-year period and a mutually exclusive
retirement benefit, after reaching the defined retirement age, to be paid over a
ten-year period. Termination of employment with the Company for any reason prior
to reaching this defined retirement age results in plan members forfeiting all
benefit rights and claims. Benefits under this plan do not vest until retirement
or, if earlier, death, and the Company has the right to modify or terminate this
plan at any time.
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EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements, effective as of
October 21, 1994, with each of Robert Ammerman, Charles Blackmon, William
Buchholz, Barry Milling, William Riley, Roy Smith and Joel Voelkert for terms
ending December 31, 1997. Each of the foregoing agreements (collectively, the
"Employment Agreements") provides for automatic renewal for successive one year
terms unless either party notifies the other to the contrary at least 90 days
prior to its expiration. The agreements require each employee to devote
substantially all of his time and attention to the business of the Company as
necessary to fulfill his duties. The agreements currently provide for the
payment of a base salary for 1997 to Messrs. Ammerman, Blackmon, Buchholz,
Milling, Riley, Smith and Voelkert at a rate of $250,000, $142,000, $134,300,
$141,700, $80,500, $116,700 and $191,400. Mr. Ammerman's agreement also provides
for minimum annual salary increases based on increases in the cost of living,
although Mr. Ammerman declined such increase for 1997. The agreements also
provide for the payment of bonuses in such amounts as may be determined by the
Board. Under the agreements, the employee may terminate his employment upon 30
days' notice. The agreements provide that in the event the employee's employment
is terminated by the Company at any time for any reason other than justifiable
cause, disability or death, the Company shall pay the employee the employee's
base salary and permit participation in benefit programs for the greater of (i)
the remaining term of the agreement or (ii) one year (two years in the case of
Mr. Ammerman); however, if such termination occurs at any time within one year
following a "Change of Control of the Company," the Company shall pay the
employee a lump sum payment equal to two years' annual salary plus an amount
equal to twice the employee's most recently declared bonus, and permit
participation in benefit programs for the period specified above. The Employment
Agreements also provide that in the event the Company chooses not to renew the
agreement, the Company shall pay the employee his base salary for a period of
one year. Each agreement contains confidentiality provisions, whereby each
executive agrees not to disclose any confidential information regarding the
Company, as well as non-competition covenants. The non-competition
covenants survive the termination of an employee's employment for the greater of
(i) the remaining term of the agreement or (ii) two years, except in the event
the Company elects not to renew the agreement, terminates the employee's
employment within one year following a "Change in Control of the Company" or
fails to make required severance payments.
For purposes of the Employment Agreements, a "Change in Control of
the Company" shall be deemed to occur if (i) there shall be consummated (x) any
consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which shares of the Company's
Common Stock would be converted into cash, securities or other property, other
than a merger of the Company in which the holders of the Company's Common Stock
immediately prior to the merger have the same proportionate ownership of common
stock of the surviving corporation immediately after the merger, or (y) any
sale, lease, exchange or other
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transfer (in one transaction or a series of related transactions) of all, or
substantially all, of the assets of the Company, or (ii) the stockholders of the
Company shall approve any plan or proposal for liquidation or dissolution of the
Company, or (iii) any person (as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")), shall become the beneficial owner (within the meaning of Rule 13d-3
under the Exchange Act) of 40% or more of the Company's outstanding Common
Stock other than pursuant to a plan or arrangement entered into by such person
and the Company, or (iv) during any period of two consecutive years, individuals
who at the beginning of such period constitute the entire Board of Directors
shall cease for any reason to constitute a majority thereof unless the election,
or the nomination for election by the Company's stockholders, of each new
director was approved by a vote of at least two-thirds of the directors
then still in office who were directors at the beginning of the period.
The Employment Agreements also provide that if, in connection with a
change of ownership or control of the Company or a change in ownership of a
substantial portion of the assets of the Company (all within the meaning of
Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the
"Code")), an excise tax is payable by the employee under Section 4999 of the
Code, then the Company will pay to the employee additional compensation which
will be sufficient to enable the employee to pay such excise tax as well as the
income tax and excise tax on such additional compensation, such that, after the
payment of income and excise taxes, the employee is in the same economic
position in which he would have been if the provisions of Section 4999 of the
Code had not been applicable.
STOCK OPTION AWARDS
No options were granted in 1996. On February 5, 1997, options to
purchase an aggregate of 55,000 shares of Common Stock were granted under the
Company's 1994 Stock Option Plan (the "Plan") to 11 officers and employees of
the Company at a per share exercise price of $25.25, the closing price of the
Common Stock as reported by the Nasdaq National Market on that date. Of these
options, Messrs. Ammerman, Voelkert, Smith, Milling and Buchholz were granted
non-qualified options to purchase 15,000 shares, 9,000 shares, 4,000 shares,
5,000 shares and 5,000 shares, respectively, of Common Stock. The options are
exercisable in four equal annual installments commencing February 5, 1998. See
Proposal No. 2 - Amendment to the Stock Option Plan for information concerning a
proposed amendment to the Plan and for additional information concerning the
Plan.
COMPENSATION OF DIRECTORS
Each non-employee director of the Company (other than Messrs.
Newhouse and Selden) receives a director's fee of $2,500 per quarter, plus $750
per meeting attended and $250 per telephonic meetings attended. In addition,
directors who are not employees of the Company are compensated through stock
options. Messrs. Newhouse and Selden are partners of Sterling Ventures Limited
("Sterling"),
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which receives an annual management fee from the Company. In addition, on
February 5, 1997, Sterling received options to purchase 15,000 shares of Common
Stock at a per share exercise price of $25.25, the closing price of the Common
Stock as reported by the Nasdaq National Market on that date. Sterling
subsequently assigned 5,000 of such options to each of Messrs. Newhouse and
Selden, directors of the Company, and the third stockholder of Sterling. See
"Compensation Committee Interlocks and Insider Participation."
The Company has adopted a Stock Option Plan for Non-Employee
Directors (the "Directors' Plan"), pursuant to which options to acquire a
maximum of 160,000 shares of Common Stock may be granted to non-employee
directors. Options granted under the Directors' Plan do not qualify as incentive
stock options within the meaning of Section 422 of the Code. The Directors' Plan
provided that upon adoption of the plan, each of Messrs. Levy, Newhouse, Saul,
Selden, Shapiro and Wilson, its current non-employee directors, was granted an
option to purchase 7,500 shares of Common Stock at a purchase price per share
equal to the initial public offering price of the Common Stock ($10.00). The
Directors' Plan provides for the automatic grant to each of the Company's
non-employee directors of (1) an option to purchase 7,500 shares of Common Stock
on the date of such director's initial election or appointment to the Board of
Directors (the "Initial Grant"), and (2) an option to purchase 1,500 shares of
Common Stock on each annual anniversary of such election or appointment,
provided that such individual is a non-employee director on such anniversary
date (the "Additional Grant"). The options will have an exercise price of 100%
of the fair market value of the Common Stock on the date of grant and have a
ten-year term. The Initial Grant becomes exercisable in four equal installments
on the six month anniversary of the date such person was first elected or
appointed to the Board of Directors and on the first, second and third
anniversary of the date of such election or appointment. The Additional Grant
becomes exercisable in four equal installments on the six month anniversary of
the date of each Additional Grant and on the first, second and third anniversary
of the date of such Additional Grant. The options may be exercised by payment in
cash, check or shares of Common Stock. On February 24, 1995, 1996 and 1997, each
of Messrs. Levy, Newhouse, Saul, Selden, Shapiro and Wilson was granted an
option to purchase 1,500 shares of Common Stock at a purchase price of $18.0625,
$21.125 and $27.00, respectively, equal to the closing price of the Common Stock
on such dates, under the Directors' Plan.
COMPENSATION COMMITTEE REPORT TO STOCKHOLDERS
The report of the Compensation Committee (the "Compensation
Committee") shall not be deemed incorporated by reference by any general
statement incorporating by reference this proxy statement into any filing under
the Securities Act of 1933, as amended (the "Securities Act") or under the
Exchange Act, except to the extent that the Company specifically incorporates
this information by reference, and shall not otherwise be deemed filed under
such Acts.
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The Compensation Committee of the Board of Directors was formed in
February 1993 and consists of Messrs. Newhouse and Shapiro, each of whom is an
independent non-employee director. The Compensation Committee administers the
Company's executive compensation programs, monitors corporate performance and
its relationship to compensation of executive officers, and makes appropriate
recommendations concerning matters of executive compensation.
COMPENSATION PHILOSOPHY
The Company believes that executive compensation should be closely
related to increased stockholder value. One of the Company's strengths
contributing to its successes is a strong management team, many of whom have
been with the Company for a large number of years. The Committee believes that
low executive turnover has been instrumental to the Company's success, and that
the Company's compensation program has played a major role in limiting executive
turnover. The compensation program is designed to enable the Company to attract,
retain and reward capable employees who can contribute to the continued success
of the Company, principally by linking compensation with the attainment of key
business objectives. Equity participation and a strong alignment to
stockholders' interests are key elements of the Company's compensation
philosophy. Accordingly, the Company's executive compensation program is
designed to provide competitive compensation, support the Company's strategic
business goals and reflect the Company's performance.
The compensation program reflects the following principles:
o Compensation should encourage increased stockholder value.
o Compensation programs should support the short- and long-term
strategic business goals and objectives of the Company.
o Compensation programs should reflect and promote the Company's
values and reward individuals for outstanding contributions
toward business goals.
o Compensation programs should enable the Company to attract and
retain highly qualified professionals.
PAY MIX AND MEASUREMENT
The Company's executive compensation is comprised of two components,
base salary and incentives, each of which is intended to serve the overall
compensation philosophy.
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BASE SALARY
The Company's salary levels are intended to be consistent with
competitive pay practices and level of responsibility, with salary increases
reflecting competitive trends, the overall financial performance and resources
of the Company, general economic conditions as well as a number of factors
relating to the particular individual, including the performance of the
individual executive, and level of experience, ability and knowledge of the job.
INCENTIVES
Incentives consist of cash awards and stock options. Cash awards are
paid under the Company's incentive bonus plan to key senior and middle
management executives. Beginning with 1996, the Company adopted a Shareholder
Value Added Plan that entitles participants to receive cash bonuses based on an
annual aggregate award plus any deferred award balance from the award bank.
Contributions to the annual aggregate award and the award bank are based on a
fixed percentage of the Shareholder Value Added ("SVA") plus a fixed percentage
of the annual change in SVA. SVA is defined as the amount that Net Operating
Profit After Taxes ("NOPAT") exceeds a capital charge, which is calculated as
Capital Employed (as defined in the plan) multiplied by the associated Cost of
Capital (as defined in the plan). Each participant's share is based on a
specified percentage of their salary in relation to the other participants. For
1996, cash awards equal to 5.9%, 7.1%, 1.7%, 3.2% and 3.1% of their respective
salaries were paid to Messrs. Ammerman, Voelkert, Smith, Milling and Buchholz,
respectively, in 1997. Stock options are granted from time to time to reward key
employees' contributions.
The Committee strongly believes that the pay program should provide
employees with an opportunity to increase their ownership and potentially gain
financially from Company stock price increases. By this approach, the best
interests of stockholders, executives and employees will be closely aligned.
Therefore, executives and other employees are eligible to receive stock options,
giving them the right to purchase shares of Common Stock of the Company at a
specified price in the future. The grant of options is based primarily on a key
employee's potential contribution to the Company's growth and profitability,
based on the Committee's discretionary evaluation. Options are granted at the
prevailing market value of the Company's Common Stock and will only have value
if the Company's stock price increases. Generally, grants of options vest over a
period of time and executives must be employed by the Company for such options
to vest.
CHIEF EXECUTIVE OFFICER 1996 COMPENSATION
The base salary for Robert T. Ammerman, the Company's President and
Chief Executive Officer, was $250,000 during the Company's fiscal year ended
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December 31, 1996. Such base salary of $250,000 represents a 16% increase over
the previous year's salary. In 1997, Mr. Ammerman also received a cash bonus of
$14,805, for services rendered in 1996, pursuant to the shareholder value added
plan described above. Mr. Ammerman's employment agreement provides for minimum
annual salary increases based on increases in the cost of living, although Mr.
Ammerman declined such increase for 1997.
The aggregate compensation paid to Mr. Ammerman was deemed
appropriate by the Compensation Committee considering the overall performance of
the Company and Mr. Ammerman.
TAX EFFECTS
Changes made in 1993 to the Internal Revenue Code of 1986, as
amended (the "Code"), impose certain limitations on the deductibility of
executive compensation paid by public companies. In general, under the
limitations, the Company will not be able to deduct annual compensation paid to
certain executive officers in excess of $1,000,000 except to the extent that
such compensation qualifies as "performance-based compensation" (or meets other
exceptions not here relevant). Non-deductibility would result in additional tax
cost to the Company. It is possible that at least some of the cash and
equity-based compensation paid or payable to the Company's executive officers
will not qualify for the "performance-based compensation" exclusion under the
deduction limitation provisions of the Code. Nevertheless, the Committee
anticipates that in making compensation decisions it will give consideration to
the net cost to the Company (including, for this purpose, the potential
limitation on deductibility of executive compensation).
The Compensation Committee believes that linking executive
compensation to corporate performance results in a better alignment of
compensation with corporate business goals and stockholder value. The Committee
believes its compensation practices are directly tied to stockholder returns and
linked to the achievement of annual and longer-term financial and operational
results of the Company on behalf of the Company's stockholders. In view of the
Company's performance and achievement of goals and competitive conditions, the
Compensation Committee believes that compensation levels during 1996 adequately
reflect the Company's compensation goals and policies.
COMPENSATION COMMITTEE
Douglas L. Newhouse
Robert F. Shapiro
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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
On February 18, 1993, the Company's Board of Directors established a
Compensation Committee, which currently consists of Messrs. Newhouse and
Shapiro, to recommend compensation for the Company's executives.
On February 25, 1994, 1995 and 1996, each of Messrs. Newhouse and
Shapiro was granted an option to purchase 7,500 shares, 1,500 shares, and 1,500
shares respectively, of the Company's Common Stock pursuant to the Directors'
Plan. See "- Compensation of Directors."
In connection with the recapitalization of the Company in January
1993, the Company entered into a management agreement with Sterling pursuant to
which Sterling agreed to provide financial and management consulting services to
the Company for a fee of $275,000 per annum plus reimbursement of direct
out-of-pocket costs and expenses. Each of Messrs. Newhouse and Selden is an
officer, director and holder of one-third of the shares of Sterling. On February
5, 1997, the Company granted 15,000 stock options to Sterling with a per share
exercise price of $25.25, equal to the closing price of the Common Stock on such
date. Sterling subsequently assigned 5,000 of such options to each of Messrs.
Newhouse and Selden, directors of the Company, and the third stockholder of
Sterling.
THE COMPANY'S PERFORMANCE
The Stock Price Performance Graph below shall not be deemed
incorporated by reference by any general statement incorporating by reference
this proxy statement into any filing under the Securities Act or under the
Exchange Act, except to the extent the Company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
---GRAPHICAL REPRESENTATION OF DATA TABLE BELOW---
1993 1994 1995 1996
AMERICAN BUILDINGS CO 100.00 166.25 225.00 238.75
INDUSTRY INDEX 100.00 107.45 136.95 148.92
BROAD MARKET 100.00 101.44 131.58 163.51
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The above Graph compares the performance of the Company from April
29, 1994, the date that the Company's Common Stock commenced trading on the
Nasdaq National Market, through December 31, 1996, against the performance of
the Nasdaq Market Index and the Company's Peer Group (SIC Code Index) for the
same period. The companies included in the Company's Peer Group are Butler
Manufacturing Company, Mark Solutions Inc., Miller Building Systems Inc., NCI
Building Systems, Inc. and United Dominion Industries, Inc.
PROPOSAL NO. 2 - AMENDMENT TO STOCK OPTION PLAN
On February 5, 1997, the Board of Directors unanimously adopted,
subject to stockholder approval, an amendment to the Company's 1994 Stock Option
Plan (the "Plan") which would increase the aggregate number of shares of Common
Stock which may be issued thereunder from 480,000 to 580,000 shares, all of
which would be available for the grant of either "incentive stock options," as
defined in Section 422 of the Code, or options which do not qualify as incentive
stock options (restricted stock options). The primary features of the Plan are
summarized below. The full text of the Plan and the proposed amendment thereto
is set forth in Appendix A to this Proxy Statement and the following discussion
is qualified by reference thereto.
The Board of Directors believes that approval of the amendment will
serve the best interests of the Company and its stockholders by permitting the
Company to continue to utilize stock options as a means to attract and retain
key employees and consultants who are in a position to contribute materially to
the successful conduct of the business and affairs of the Company and, in
addition, to stimulate in such individuals an increased desire to render greater
service to the Company and its subsidiaries. In addition, the availability of
shares for grant under the Plan is important in that it provides the Company an
alternative or additional means of compensating key employees and consultants.
As of March 3, 1997, there were 2,872 shares available for future grants under
the Plan.
The Plan is currently administered by the Board of Directors, which
has the authority to select optionees, designate the number of shares to be
covered by each option and, subject to certain restrictions, specify other terms
of the options; however, the maximum option grant which may be made to an
executive officer of the Company in any calendar year cannot exceed 50,000
shares. Options may be granted from time to time through February 25, 2004, the
termination date of the Plan, to present and future officers and employees of
the Company or a subsidiary of the Company (a "Subsidiary"), within the meaning
of Section 424(f) of the Code, and to consultants of the Company or a Subsidiary
who are not employees. All employees are eligible to participate in the Plan and
as of March 3, 1997, approximately 42 employees were participating in the Plan.
The Board may in its discretion appoint a committee of at least two
"non-employee" directors (as defined in Section 16(b)(3) under the Exchange Act)
to administer the Plan.
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The Plan, as currently in effect, permits the granting of options to
purchase up to an aggregate of 480,000 shares of Common Stock of the Company.
Under the Plan, the Company may grant incentive stock options and restricted
stock options (a "non-ISO"). Under the Plan, the exercise price for shares
covered by an incentive stock option may not be less than 100% of the fair
market value (as defined in the Plan) of the Common Stock on the date of grant
(110% in the case of a grant to an employee who owns stock possessing more than
10% of the combined voting power of all classes of stock of the Company or any
subsidiary entitled to vote (a "10% Stockholder")). The exercise price for
shares covered by a non-ISO may not be less than the par value of the Common
Stock at the date of grant. All options must expire no later than ten years
(five years in the case of an incentive stock option granted to a 10%
Stockholder) from the date of grant. The Board of Directors has the discretion
to determine the period required for full exercisability of stock options. In no
event, however, can the Board of Directors shorten such period to less than six
months. The Plan also provides that the options will become immediately
exercisable upon a change in control of the Company. For purposes thereof, a
change in control of the Company is deemed to occur if (1) there occurs (A) any
consolidation or merger in which the Company is not the continuing or surviving
entity or pursuant to which shares of the Common Stock would be converted into
cash, securities or other property, other than a merger of the Company in which
the holders of the Common Stock immediately prior to the merger have the same
proportionate ownership of common stock of the surviving corporation immediately
after the merger, or (B) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially all the
Company's assets; (2) the Company's stockholders approve any plan or proposal
for the liquidation or dissolution of the Company; (3) any person (as such term
is used in Sections 13(d) and 14(d)(2) of the Exchange Act) shall become the
beneficial owner (within the meaning of Rule 13d-3 under said Act) of 40% or
more of the Common Stock other than pursuant to a plan or arrangement entered
into by such person and the Company; or (4) during any period of two consecutive
years, individuals who at the beginning of such period constitute the entire
Board of Directors shall cease for any reason to constitute a majority of the
Board unless the election or nomination for election by the Company's
stockholders of each new director was approved by a vote of at least two-thirds
of the directors then still in office who were directors at the beginning of the
period.
Any option outstanding after February 25, 2004 will remain in effect
until it is exercised, terminates or expires in accordance with its terms. The
Plan provides that the term of an option shall be ten years from the date of
grant. The Plan also provides that, following termination of employment, (i) if
an optionee's employment is terminated for cause, he has thirty days to exercise
his option to the extent it is exercisable on the date of termination of
employment, (ii) if an optionee's employment is terminated without cause or he
voluntarily leaves the employ of the Company, he has three months, or such
longer period as the Committee may at its sole discretion determine, to exercise
his option to the extent exercisable on the date of termination of employment,
and (iii) if an optionee shall cease to be employed by the Company as
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the result of his death or disability, he has 12 months to exercise his option
to the extent exercisable on the date he ceased to be employed.
As of March 3, 1997, options to purchase an aggregate of 477,128
shares have been granted under the Stock Option Plan. Messrs. Ammerman,
Voelkert, Smith, Milling and Buchholz have been granted options to purchase an
aggregate of 92,193, 50,594, 43,343, 42,094 and 42,094 shares of Common Stock,
respectively, under the Stock Option Plan. All current executive officers as a
group have been granted options to purchase an aggregate of 360,276 shares of
Common Stock pursuant to the Stock Option Plan. No current directors or nominee
for election as a director, other than Mr. Ammerman, received stock options
under the Stock Option Plan. All employees, including all current officers who
are not executive officers, as a group were granted options to purchase an
aggregate of 116,852 shares of Common Stock pursuant to the Stock Option Plan.
FEDERAL INCOME TAX CONSEQUENCES
Following is a summary of the salient Federal income tax
consequences associated with options granted under the Plan.
An optionee will not realize taxable income upon the grant of an
option. In general, the holder of a non-ISO will recognize ordinary income when
the option is exercised equal to the excess of the value of the stock over the
exercise price (i.e., the option spread), and the Company receives a
corresponding deduction. (If a non-ISO is exercised within six months after the
date of grant and if the optionee is subject to the six-month restrictions on
sale of Common Stock under Section 16(b) of the Exchange Act, the optionee
generally recognizes ordinary income on the date the restrictions lapse, unless
an early income recognition election is made.) Upon a later sale of the stock,
the optionee will realize capital gain or loss equal to the difference between
the selling price and the value of the stock at the time the option was
exercised (or, if later, the time ordinary income was recognized with respect to
the exercise).
The holder of an incentive stock option does not realize taxable
income upon exercise of the option, although the option spread is an item of tax
preference income potentially subject to the alternative minimum tax. If the
stock acquired upon exercise of the incentive stock option is sold or otherwise
disposed of within two years from the incentive stock option grant date or
within one year from the exercise date, then, in general, gain realized on the
sale is treated as ordinary income to the extent of the option spread at the
exercise date, and the Company receives a corresponding deduction. Any remaining
gain is treated as capital gain. If the stock is held for at least two years
from the grant date and one year from the exercise date, then gain or loss
realized upon the sale will be capital gain or loss and the Company will not be
entitled to a deduction. A special basis adjustment applies to reduce the gain
for alternative minimum tax purposes.
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In general, if an optionee delivers previously-owned shares in
payment of the exercise price of an option, no gain or loss will be recognized
on the exchange of the previously-owned shares for an equivalent number of newly
issued shares. However, if the previously-owned shares delivered in payment of
the exercise price were acquired pursuant to the exercise of an incentive stock
option and if the requisite incentive stock option holding periods are not
satisfied (see the preceding paragraph), then the optionee will realize ordinary
income on the delivery of the previously-owned shares as in the case of any
other "early" disposition of incentive stock option-acquired shares. If the
option being exercised is a non-ISO, the optionee will realize ordinary income
equal to the amount by which the fair market value of the Common Stock received
exceeds the exercise price (as if the exercise price were paid in cash).
Changes made to the Code in 1993 impose certain limitations on the
deductibility of executive compensation paid by public companies. In general,
under the limitations, the Company will not be able to deduct annual
compensation paid to certain executive officers in excess of $1,000,000 except
to the extent that such compensation qualifies as "performance-based
compensation" (or meets other exceptions not here relevant). Non-deductibility
would result in additional tax cost to the Company. It is contemplated that the
individual grant limitations on options which may be made to any employee in any
calendar year under the 1994 Stock Option Plan will enable options to be granted
under the Plan which would qualify for the "performance-based compensation"
exclusion under the new deduction limitation provisions. Nevertheless, although
the net cost to the Company in making all compensation decisions are considered
(including, for this purpose, the potential limitation on deductibility of
executive compensation), there is no assurance that compensation realized with
respect to any particular award under the Plan would qualify for the deduction
limitation exclusion.
VOTE REQUIRED
The affirmative vote of holders of a majority of the shares of
Common Stock issued, outstanding and entitled to vote, present or represented at
the meeting, a quorum being present, is required for the adoption of this
proposal. Broker non-votes with respect to this matter will be treated as
neither a vote "for" or a vote "against" the matter, although they will be
counted in determining if a quorum is present. However, abstentions will be
considered in determining the number of votes required to attain a majority of
the shares present or represented at the meeting and entitled to vote.
Accordingly, an abstention from voting by a stockholder present in person or by
proxy at the meeting has the same legal effect as a vote "against" the matter
because it represents a share present or represented at the meeting and entitled
to vote, thereby increasing the number of affirmative votes required to approve
this proposal.
THE BOARD OF DIRECTORS DEEMS PROPOSAL NO. 2 TO BE IN THE BEST INTERESTS OF
THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE "FOR" APPROVAL THEREOF.
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RELATIONSHIP WITH INDEPENDENT AUDITORS
Arthur Andersen L.L.P. have been the independent auditors for the
Company since December 1990 and will serve in that capacity for the 1997 fiscal
year. A representative of Arthur Andersen L.L.P. will be present at the Annual
Meeting and will have an opportunity to make a statement if he desires to do so,
and will respond to appropriate questions from stockholders.
STOCKHOLDER PROPOSALS
All stockholder proposals which are intended to be presented at the
1998 Annual Meeting of Stockholders of the Company must be received by the
Company no later than November 24, 1997 for inclusion in the Board of Directors'
proxy statement and form of proxy relating to that meeting.
OTHER BUSINESS
The Board of Directors knows of no other business to be acted upon
at the Annual Meeting. However, if any other business properly comes before the
Annual Meeting, it is the intention of the persons named in the enclosed proxy
to vote on such matters in accordance with their best judgment.
The prompt return of your proxy will be appreciated and helpful in
obtaining the necessary vote. Therefore, whether or not you expect to attend the
Annual Meeting, please sign the proxy and return it in the enclosed envelope.
By Order of the Board of Directors
Peggy S. Woodham
Secretary
Dated: March 28, 1997
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K WILL BE SENT WITHOUT
CHARGE TO ANY STOCKHOLDER REQUESTING IT IN WRITING FROM: AMERICAN BUILDINGS
COMPANY, ATTENTION: R. CHARLES BLACKMON, STATE DOCKS ROAD, EUFAULA, ALABAMA
36027.
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Appendix A
Below is the text of the Company's 1994 Stock Option Plan as
proposed to be amended pursuant to Proposal No. 2. Proposed language to the 1994
Stock Option Plan is set forth in bold print and the language to be deleted is
set forth in brackets.
AMERICAN BUILDINGS COMPANY
1994 STOCK OPTION PLAN
1. Purpose. The purpose of the American Buildings Company 1994 Stock
Option Plan (the "Plan") is to enable American Buildings Company (the "Company")
and its stockholders to secure the benefits of common stock ownership by
employees of the Company and its subsidiaries. The Board of Directors of the
Company (the "Board") believes that the granting of options under the Plan will
foster the Company's ability to attract, retain and motivate those individuals
who will be largely responsible for the profitability and long-term future
growth of the Company.
2. Stock Subject to the Plan. The Company may issue and sell a total
of 580,000 [480,000] shares of its common stock, $.01 par value (the "Common
Stock"), pursuant to the Plan. Such shares may be either authorized and unissued
or held by the Company in its treasury. New options may be granted under the
Plan with respect to shares of Common Stock which are covered by the unexercised
portion of an option which has terminated or expired by its terms, by
cancellation or otherwise.
3. Administration. The Plan will be administered by a committee (the
"Committee") consisting of the Board or, at the option of the Board, at least
two directors appointed by and serving at the pleasure of the Board. If the
Board does not act as the Committee, the members of the Committee shall be
"non-employee directors" within the meaning and for the purposes of Rule 16(b)-3
under the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Subject to the provisions of the Plan, the Committee, acting in its sole and
absolute discretion, will have full power and authority to grant options under
the Plan, to interpret the provisions of the Plan, to fix and interpret the
provisions of option agreements made under the Plan, to supervise the
administration of the Plan, and to take such other action as may be necessary or
desirable in order to carry out the provisions of the Plan. A majority of the
members of the Committee will constitute a quorum. The Committee may act by the
vote of a majority of its members present at a meeting at which there is a
quorum or by unanimous written consent. The decision of the Committee as to any
disputed question, including questions of construction, interpretation and
administration, will be final and conclusive on all persons. The Committee will
keep a record of its proceedings and acts and will keep or cause to be kept such
books and records as may be necessary in connection with the proper
administration of the Plan.
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4. Eligibility. Options may be granted under the Plan to present or
future officers and employees of the Company or a subsidiary of the Company (a
"Subsidiary") within the meaning of Section 424(f) of the Internal Revenue Code
of 1986 (the "Code"), and to consultants to the Company or a Subsidiary who are
not employees. Options may not be granted to directors of the Company or a
Subsidiary who are not also employees of or consultants to the Company and/or a
Subsidiary. Subject to the provisions of the Plan, the Committee may from time
to time select the persons to whom options will be granted, and will fix the
number of shares covered by each such option and establish the terms and
conditions thereof, including, without limitation, the exercise price,
restrictions on exercisability of the option and/or on the disposition of the
shares of Common Stock issued upon exercise thereof and whether or not the
option is to be treated as an incentive stock option within the meaning of
Section 422 of the Code (an "Incentive Stock Option").
5. Terms and Conditions of Options. Each option granted under the
Plan will be evidenced by a written agreement in a form approved by the
Committee. Each such option will be subject to the terms and conditions set
forth in this paragraph and such additional terms and conditions not
inconsistent with the Plan (and, in the case of an Incentive Stock Option, not
inconsistent with the provisions of the Code applicable thereto) as the
Committee deems appropriate.
(a) Option Exercise Price. In the case of an option which is
not treated as an Incentive Stock Option, the exercise price per share may not
be less than the par value of a share of Common Stock on the date the option is
granted; and, in the case of an Incentive Stock Option, the exercise price per
share may not be less than 100% of the fair market value of a share of Common
Stock on the date the option is granted (110% in the case of an optionee who, at
the time the option is granted, owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or a Subsidiary (a
"ten percent shareholder")). For purposes hereof, the fair market value of a
share of Common Stock on any date will be equal to the closing sale price per
share as published by a national securities exchange on which shares of the
Common Stock are traded on such date or, if there is no sale of Common Stock on
such date, the average of the bid and asked prices on such exchange at the
closing of trading on such date or, if shares of the Common Stock are not listed
on a national securities exchange on such date, the closing price or, if none,
the average of the bid and asked prices in the over the counter market at the
close of trading on such date, or if the Common Stock is not traded on a
national securities exchange or the over the counter market, the fair market
value of a share of the Common Stock on such date as determined in good faith by
the Committee.
(b) Option Period. The period during which an option may be
exercised will be fixed by the Committee and will not exceed 10 years from the
date the option is granted (5 years in the case of an Incentive Stock Option
granted to a "ten percent shareholder").
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(c) Exercise of Options.
(1) General. No option will become exercisable unless
the person to whom the option was granted remains in the continuous employ or
service of the Company or a Subsidiary for at least six months (or for such
longer period as the Committee may designate) from the date the option is
granted. The Committee may determine and set forth in the option agreement any
additional vesting or other restrictions on the exercisability of an option,
subject to earlier termination of the option as provided herein. All or part of
the exercisable portion of an option may be exercised at any time during the
option period. An option may be exercised by transmitting to the Company (a) a
written notice specifying the number of shares to be purchased, and (b) payment
of the exercise price (or, if applicable, delivery of a secured obligation
therefor), together with the amount, if any, deemed necessary by the Committee
to enable the Company to satisfy its income tax withholding obligations with
respect to such exercise (unless other arrangements acceptable to the Company
are made with respect to the satisfaction of such withholding obligations).
(2) Securities Laws Compliance Required. Notwithstanding
anything in the Plan to the contrary, if the shares of Common Stock issuable
upon exercise of options granted under the Plan have not been registered under
the Securities Act of 1993, as amended, the Committee may condition the
exercisability of options upon compliance with applicable federal and state
securities laws.
(d) Payment of Exercise Price. The purchase price of shares of
Common Stock acquired pursuant to the exercise of an option granted under the
Plan may be paid in cash and/or such other form of payment as may be permitted
under the option agreement, including, without limitation, previously-owned
shares of Common Stock. The Committee may permit the payment of all or a portion
of the purchase price in installments (together with interest) over a period of
not more than five years.
(e) Rights as a Stockholder. No shares of Common Stock will be
issued in respect of the exercise of an option granted under the Plan until full
payment therefor has been made (and/or provided for where all or a portion of
the purchase price is being paid in installments). The holder of an option will
have no rights as a stockholder with respect to any shares covered by an option
until the date a stock certificate for such shares is issued to him or her.
Except as otherwise provided herein, no adjustments shall be made for dividends
or distributions of other rights for which the record date is prior to the date
such stock certificate is issued.
(f) Nontransferability of Options. No option shall be
assignable or transferrable except upon the optionee's death to a beneficiary
designated by the optionee in accordance with procedures established by the
Committee or, if no designated beneficiary shall survive the optionee, pursuant
to the optionee's will or by the laws of descent and distribution. During an
optionee's lifetime, options may be exercised only by the optionee or the
optionee's guardian or legal representative.
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(g) Termination of Employment or Other Service. If an optionee
ceases to be employed by or to perform services for the Company and any
Subsidiary for any reason other than death or disability (defined below), then,
unless extended by the Committee acting in its sole discretion, each outstanding
option granted to him or her under the Plan will terminate on the date three
months after the date of such termination of employment or service, or, if
earlier, the date specified in the option agreement. If an optionee's employment
or service is terminated by reason of the optionee's death or disability (or if
the optionee's employment or service is terminated by reason of his or her
disability and the optionee dies within one year after such termination of
employment or service), then, unless extended by the Committee, acting in its
sole discretion each outstanding option granted to the optionee under the Plan
will terminate on the date one year after the date of such termination of
employment or service (or one year after the later death of a disabled optionee)
or, if earlier, the date specified in the option agreement. For purposes hereof,
the term "disability" means the inability of an optionee to perform the
customary duties of his or her employment or other service for the Company or a
Subsidiary by reason of a physical or mental incapacity which is expected to
result in death or be of indefinite duration.
(h) Incentive Stock Options. In the case of an Incentive Stock
Option granted under the Plan, at the time the option is granted, the aggregate
fair market value (determined at the time of grant) of the shares of Common
Stock with respect to which Incentive Stock Options are exercisable for the
first time by the optionee during any calendar year may not exceed $100,000.
(i) Maximum Option Grant. The maximum option grant which may
be made to an executive officer of the Company in any calendar year shall not
cover more than 50,000 shares.
(j) Other Provisions. The Committee may impose such other
conditions with respect to the exercise of options, including, without
limitation, any conditions relating to the application of federal or state
securities laws, as it may deem necessary or advisable.
6. Change in Control; Capital Changes.
(a) If any event constituting a "Change in Control of the
Company" shall occur, all Options granted under the Plan which are outstanding
at the time a Change of Control of the Company shall occur shall immediately
become exercisable. A "Change in Control of the Company" shall be deemed to
occur if (i) there shall be consummated (x) any consolidation or merger of the
Company in which the Company is not the continuing or surviving corporation or
pursuant to which shares of the Company's Common Stock would be converted into
cash, securities or other property, other than a merger of the Company in which
the holders of the Company's Common Stock immediately prior to the merger have
the same proportionate ownership of common stock of the surviving corporation
immediately after the merger, or (y) any sale, lease, exchange or other transfer
(in one transaction or a series of related
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transactions) of all, or substantially all, of the assets of the Company, or
(ii) the stockholders of the Company shall approve any plan or proposal for
liquidation or dissolution of the Company, or (iii) any person (as such term is
used in Section 13(d) and 14(d)(2) of the Exchange Act), shall become the
beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of
40% or more of the Company's outstanding Common Stock other than pursuant to a
plan or arrangement entered into by such person and the Company, or (iv) during
any period of two consecutive years, individuals who at the beginning of such
period constitute the entire Board of Directors shall cease for any reason to
constitute a majority thereof unless the election, or the nomination for
election by the Company's stockholders, of each new director was approved by a
vote of at least two-thirds of the directors then still in office who were
directors at the beginning of the period.
(b) In the event of any stock split, stock dividend or similar
transaction which increases or decreases the number of outstanding shares of
Common Stock, appropriate adjustment shall be made by the Board of Directors to
the number and option exercise price per share of Common Stock which may be
purchased under any outstanding Options. In the case of a merger, consolidation
or similar transaction which results in a replacement of the Company's Common
Stock and stock of another corporation but does not constitute Change in Control
of the Company, the Company will make a reasonable effort, but shall not be
required, to replace any outstanding Options granted under the Plan with
comparable options to purchase the stock of such other corporation, or will
provide for immediate maturity of all outstanding Options, with all Options not
being exercised within the time period specified by the Board of Directors being
terminated.
(c) In the event of any adjustment in the number of shares
covered by any option pursuant to the provisions hereof, any fractional shares
resulting from such adjustment will be disregarded and each such option will
cover only the number of full shares resulting from the adjustment.
(d) All adjustments under this paragraph 6 shall be made by
the Board, and its determination as to what adjustments shall be made, and the
extent thereof, shall be final, binding and conclusive.
7. Amendment and Termination of the Plan. The Board may amend or
terminate the Plan. Except as otherwise provided in the Plan with respect to
equity changes, any amendment which would increase the aggregate number of
shares of Common Stock as to which options may be granted under the Plan,
materially increase the benefits under the Plan, or modify the class of persons
eligible to receive options under the Plan shall be subject to the approval of
the Company's stockholders. No amendment or termination may affect adversely any
outstanding option without the written consent of the optionee.
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8. No Rights Conferred. Nothing contained herein will be deemed to
give any individual any right to receive an option under the Plan or to be
retained in the employ or service of the Company or any Subsidiary.
9. Governing Law. The Plan and each option agreement shall be
governed by the laws of the State of Delaware.
10. Decisions and Determinations of Committee to be Final. Except to
the extent rights or powers under this Plan are reserved specifically to the
discretion of the Board, all decisions and determinations of the Committee are
final and binding.
11. Number of Shares of Common Stock; Reverse Stock Split Required.
It is expressly understood and agreed that the number of shares of Common Stock
set forth in paragraphs 2 and 5 of the Plan reflects and gives effect to the
reverse stock split of the Company's Common Stock approved by the Company's
Board on February 25, 1994 (the "Reverse Split"). Notwithstanding anything
herein to the contrary, the options granted hereunder may not be exercised
unless and until the amendment to the Company's Restated Certificate of
Incorporation reflecting the Reverse Split has been filed with the Secretary of
State of Delaware.
12. Term of the Plan. The Plan shall be effective as of February 25,
1994, the date on which it was adopted by the Board, subject to the approval of
the stockholders of the Company within one year from the date of adoption by the
Board. The Plan will terminate on the date ten years after the date of adoption
by the Board, unless sooner terminated by the Board. The rights of optionees
under options outstanding at the time of the termination of the Plan shall not
be affected solely by reason of the termination and shall continue in accordance
with the terms of the option (as then in effect or thereafter amended).
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AMERICAN BUILDINGS COMPANY
PROXY SOLICITED ON BEHALF OF BOARD OF DIRECTORS
The undersigned hereby appoints Robert T. Ammerman and William L.
Selden, and each of them, with full power of substitution, as proxies to vote on
behalf of the undersigned all shares which the undersigned may be entitled to
vote at the Annual Meeting of Stockholders of the Company to be held at the
offices of Fulbright & Jaworski L.L.P., 666 Fifth Avenue, New York, New York
10103 at 11:00 A.M. on Tuesday, April 29, 1997, and at any adjournments thereof,
with all powers the undersigned would possess if personally present, upon the
matters set forth in the Notice of Annual Meeting and Proxy Statement, as
directed on the reverse side hereof.
Any proxy heretofore given by the undersigned with respect to such
shares is hereby revoked. Receipt of the Notice of Annual Meeting and Proxy
Statement is hereby acknowledged.
(To be Completed, Signed and Dated on Reverse Side)
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[X] Please mark your votes as in this example.
1. ELECTION OF DIRECTORS
FOR [_] WITHOLD [_]
(Instruction: To withhold authority to vote for any
individual nominee, write that nominee's name below.)
________________________________________________________________________________
Nominees: Robert T. Ammerman
Harold Levy
Douglas L. Newhouse
Ralph S. Saul
William L. Selden
Robert F. Shapiro
Kendrick R. Wilson III
3. Transaction of such other business as may properly come before the meeting
and any adjournments thereof.
Note: This proxy will be voted as specified. If no specification is made, it
will be voted FOR all nominees in proposal 1 and FOR proposal 2. The proxies are
authorized to vote in their discretion with respect to other matters which may
come before the meeting.
2. APPROVAL OF THE AMENDMENT TO THE COMPANY'S 1994 STOCK OPTION PLAN.
FOR [_] AGAINST [_] ABSTAIN [_]
SIGNATURE___________________________________ DATE__________
SIGNATURE___________________________________ DATE__________
(SIGNATURE IF HELD JOINTLY)
NOTE: Please mark, date and sign exactly as name appears hereon, including
designation as executor, trustee, etc. if applicable. A corporation must
sign in its name by the President or other authorized officer. All
co-owners must sign. Please return the proxy card promptly using the
enclosed envelope.
