SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
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 Sect. 240.14a-11(c) or Sect. 240.14a-12
A.P. GREEN INDUSTRIES, INC.
(Name of Registrant as Specified in Its Charter)
THE BOARD OF DIRECTORS OF A.P. GREEN INDUSTRIES, INC.
(Name of Persons Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 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 transactions applies: N/A
2) Aggregate number of securities to which transaction applies: N/A
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: N/A
4) Proposed maximum aggregate value of transaction: N/A
[ ] Check box if any part of the fee if 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: N/A
2) Form, Schedule or Registration Statement No.: N/A
3) Filing Party: N/A
4) Date Filed: N/A
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A.P. GREEN INDUSTRIES, INC.
Green Boulevard
Mexico, Missouri 65265
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 12, 1994
Dear Stockholder:
The Annual Meeting of Stockholders of A.P. Green Industries, Inc. ("A.P.
Green") will be held at The Empire Club located off of Teal Lake Road in Mexico,
Missouri on May 12, 1994, at 10:00 a.m., local time, for the following purposes:
1. To elect two Class III directors to hold office for a term of three
years.
2. To ratify the appointment of KPMG Peat Marwick as A.P. Green's
auditors for the year ending December 31, 1994.
3. To transact any and all other business that may properly come before
the meeting or any adjournment thereof.
Only stockholders of record of A.P. Green at the close of business on
March 25, 1994 are entitled to notice of, and to vote at, the meeting or any
adjournment thereof.
We cordially invite you to attend the Annual Meeting. Even if you plan to
be present at the meeting, you are requested to date, sign and return the
enclosed Proxy Card in the envelope provided so that your shares will be
represented. The mailing of an executed Proxy Card will not affect your right
to vote in person should you later decide to attend the Annual Meeting.
Paul F. Hummer II
Chairman of the Board, President and
Chief Executive Officer
April 8, 1994
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A.P. GREEN INDUSTRIES, INC.
Green Boulevard
Mexico, Missouri 65265
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 12, 1994
_________________
GENERAL INFORMATION
This Proxy Statement is furnished to the stockholders of A.P. GREEN
INDUSTRIES, INC. ("A.P. Green"), in connection with the solicitation of proxies
for use at the Annual Meeting of Stockholders to be held on Thursday, May 12,
1994, and at all adjournments thereof (the "Annual Meeting"), for the purposes
set forth in the preceding Notice of Annual Meeting of Stockholders.
This Proxy Statement, the Notice of Annual Meeting and the accompanying
Proxy Card were first mailed to the stockholders of A.P. Green on or about April
8, 1994.
The proxy reflected on the accompanying Proxy Card is being solicited by
the Board of Directors of A.P. Green. A proxy may be revoked at any time before
it is voted by filing a written notice of revocation or a later-dated Proxy Card
with the Secretary of A.P. Green at the principal offices of A.P. Green or by
attending the Annual Meeting and voting the shares in person. Attendance alone
at the Annual Meeting will not of itself revoke a proxy. Proxy Cards that are
properly executed, timely received and not revoked will be voted in the manner
indicated thereon at the Annual Meeting and any adjournment thereof.
A.P. Green will bear the entire expense of soliciting proxies. Proxies
will be solicited by mail initially. The directors, executive officers and
employees of A.P. Green may also solicit proxies personally or by telephone or
other means but such persons will not be specially compensated for such
services. A.P. Green has retained the services of Georgeson & Company Inc. to
assist in the solicitation of proxies for a fee of $5,500, plus out-of-pocket
expenses.
Only stockholders of record at the close of business on March 25, 1994 are
entitled to notice of, and to vote at, the Annual Meeting. On such date, there
were 4,027,282 shares of A.P. Green Common Stock issued and outstanding.
Each outstanding share of A.P. Green Common Stock is entitled to one vote
on each matter to be acted upon at the Annual Meeting. Shares subject to
abstentions will be treated as shares that are present at the Annual Meeting for
purposes of determining the presence of a quorum but as unvoted for purposes of
determining the base number of shares voting on a particular proposal. If a
broker or other nominee holder indicates on the Proxy Card that it does not have
discretionary authority to vote the shares it holds of record on a proposal,
those shares will not be considered as voted for purposes of determining the
approval of the stockholders on a particular proposal. Stockholders do not have
the right to cumulate votes in the election of directors.
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VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The following persons were known to management of A.P. Green to be the
beneficial owners of five percent or more of A.P. Green's Common Stock:
Name and Address of Number of Shares Percent of Outstanding
Beneficial Owner Beneficially Owned Common Stock (1)
Mercantile Bancorporation Inc. 405,277 (2) 10.06%
One Mercantile Center
St. Louis, Missouri 63101
Quest Advisory Corp. 375,750 (3) 9.33%
1414 Avenue of the Americas
New York, New York 10019
LaSalle National Trust, N.A. 330,039 (4) 8.20%
135 South LaSalle Street
Chicago, Illinois 60603
Dimensional Fund Advisors Inc. 230,250 (5) 5.72%
1299 Ocean View, 11th Floor
Santa Monica, California 90401
____________
(1) The percentage calculations are based upon 4,027,282 shares of A.P.
Green's Common Stock that were issued and outstanding as of March 25, 1994.
(2) The shares reported as beneficially owned are based upon information
contained in a Schedule 13G dated February 14, 1994, which has been filed with
the Securities and Exchange Commission. The Schedule 13G states that 405,007
shares reported as beneficially owned by Mercantile Bancorporation Inc. are held
by its subsidiary, Mercantile Bank of St. Louis National Association, solely in
a fiduciary capacity as trustee of the trusts established pursuant to the A.P.
Green 401(k) Plan and the A.P. Green Hourly Investment Plan. Mercantile
Bancorporation Inc. reported shared voting and investment power (subject to the
participants' right to direct the Trustee) with regard to all shares held in
such trusts. In addition, subsidiaries of Mercantile Bancorporation Inc. hold
an additional 270 shares in a fiduciary capacity as trustees of certain other
trusts and have sole voting power with respect to all of such shares, and shared
investment power with respect to 233 of such shares. Mercantile Bancorporation
Inc. and Mercantile Bank of St. Louis National Association have specifically
disclaimed beneficial ownership of all shares reported in the Schedule 13G.
(3) The shares reported as beneficially owned are based upon information
contained in a Schedule 13G dated February 8, 1994, which has been filed with
the Securities and Exchange Commission. The Schedule 13G is a group filing of
Quest Advisory Corp. and Quest Management Company, a General Partnership, which
are investment advisors registered under Investment Advisors Act of 1940, and
Charles M. Royce, an individual who may be deemed to be a controlling person.
Quest Advisory Corp. reported sole voting and investment power with regard to
352,800 shares and Quest Management Company reported sole voting and investment
power with regard to 22,950 shares. Mr. Royce has specifically disclaimed
beneficial ownership as to all shares reported on the Schedule 13G.
(4) The shares reported as beneficially owned are based upon information
contained in a Schedule 13G dated February 10, 1994, which has been filed with
the Securities and Exchange Commission. The Schedule 13G states that the
beneficial ownership attributed to LaSalle National Trust, N.A. is solely in a
fiduciary capacity as trustee of the trust established pursuant to the A.P.
Green Employee Stock Ownership Plan. LaSalle National Trust, N.A. reported
shared voting and investment power (subject to the participants' right to direct
the Trustee) with regard to all shares beneficially owned. The amount reported
in the table does not include 104,937.77 additional shares held by the trust but
allocated to the accounts of participants. LaSalle National Trust, N.A. has
specifically disclaimed beneficial ownership of all shares reported in the
Schedule 13G.
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(5) The shares reported as beneficially owned are based upon information
contained in a Schedule 13G dated February 9, 1994, which has been filed with
the Securities and Exchange Commission. Dimensional Fund Investment Advisors
Inc., an investment advisor registered under the Investment Advisors Act of
1940, reported sole voting power with respect to 153,750 shares and sole
investment power with regard to all shares beneficially owned. In addition,
Dimensional Fund Advisors Inc. reported that certain of its officers are also
officers of DFA Investment Dimensions Group, Inc. and The Investment Trust
Company, each an open-end investment company registered under the Investment
Company Act of 1940, and in such capacities have shared voting power with
respect to 76,500 shares reported above.
ITEM 1. ELECTION OF DIRECTORS
Two Class III directors will be elected at the Annual Meeting for a term
of three years or until his successor is duly elected and qualified. The
persons named as proxies on the accompanying Proxy Card intend to vote all duly
executed proxies received by the Board of Directors for the election of Donald
E. Lasater and William F. Morrison as Class III directors, except as otherwise
directed by the stockholder on the Proxy Card. Messrs. Lasater and Morrison are
currently directors of A.P. Green. If for any reason either Mr. Lasater or Mr.
Morrison becomes unavailable for election, which is not now anticipated, the
persons named in the accompanying Proxy Card will vote for such substitute
nominee as designated by the Board of Directors. The Board of Directors
recommends a vote "FOR" the election of Donald E. Lasater and William F.
Morrison as Class III directors.
The name, age, principal occupation or position and other directorships
with respect to Messrs. Lasater and Morrison and the other directors whose terms
of office will continue after the Annual Meeting is set forth below. Each of
the directors has held the position or another executive position with the same
entity shown or an affiliated entity for in excess of five years.
CLASS III - TO BE ELECTED FOR A TERM OF THREE YEARS EXPIRING IN 1997
Donald E. Lasater, 68 - Director since 1988; Former Chairman of the Board of
Mercantile Bancorporation Inc. and Mercantile Bank of St. Louis National
Association (banking); Director of General American Life Insurance Co., Illinois
Power Company and Interco Incorporated
William F. Morrison, 56 - Director since 1993; Investor and Former Executive
Vice President of the Essex Wire Division of United Technologies Corporation and
Former member of the Senior Management Council of United Technologies
Corporation
CLASS I - TO CONTINUE IN OFFICE UNTIL 1995
Paul F. Hummer II, 52 - Director since 1988; Chairman of the Board, Chief
Executive Officer and President of A.P. Green
Jack R. Janney, 69 - Director since 1988; Independent Consultant and Director of
Wiss, Janney, Elstner and Associates, Inc. (an engineering consulting firm)
CLASS II - TO CONTINUE IN OFFICE UNTIL 1996
Daniel R. Toll, 66 - Director since 1988; Corporate and Civic Director; Director
of Brown Group, Inc., IMCERA Group, Inc., Kemper Corporation, Kemper National
Insurance Company, Lincoln National Convertible Securities Fund, Inc., Lincoln
National Income Fund, Inc. and NICOR, Inc.
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BOARD OF DIRECTORS AND COMMITTEES
During 1993, the Board of Directors of A.P. Green met four times and each
of the directors whose term of office will continue after the Annual Meeting
attended not less than 75% of the meetings of the Board of Directors and
committees of which such director was a member during 1993.
The Board of Directors has a standing Executive Committee, Audit
Committee, and Compensation and Organization Committee.
The Executive Committee consists of Paul F. Hummer II, Donald E. Lasater,
Daniel R. Toll and William F. Morrison. The Executive Committee exercises the
authority of the Board of Directors in the management of A.P. Green in the
intervals between meetings of the full Board of Directors subject to the
restrictions imposed by law. The Executive Committee did not meet during 1993.
The members of the Audit Committee are Daniel R. Toll (Chairman), Jack R.
Janney, Donald E. Lasater and William F. Morrison. The Audit Committee is
empowered to select and employ, subject to ratification by the stockholders, the
independent auditors of A.P. Green; to confer with such independent auditors
with regard to the scope and cost of the audit and other services rendered by
such auditors; and to review with the auditors, the internal audit staff and
management the work and the findings of each to ensure that A.P. Green has
adequate audit policies and internal controls and complies with such policies
and controls. The Audit Committee met two times in 1993.
The Compensation and Organization Committee is composed of Donald E.
Lasater (Chairman), Jack R. Janney, Daniel R. Toll and William F. Morrison. The
Compensation and Organization Committee is authorized to review and make
recommendations to the Board of Directors regarding the salaries, incentive
compensation and bonus awards to be given corporate officers; to administer A.P.
Green's stock option and other employee benefit plans; and to review and make
recommendations to the Board of Directors regarding the management organization,
succession and development. The Compensation and Organization Committee met two
times during 1993.
DIRECTOR'S FEES
During fiscal 1993, Directors who were not also employees of A.P. Green
received an annual retainer of $14,000 and $500 per each meeting of the Board of
Directors or committees attended. Directors were also reimbursed for expenses
incurred in attending Board or committee meetings.
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SECURITY OWNERSHIP BY MANAGEMENT
The following table indicates, as of March 25, 1994, the beneficial
ownership of A.P. Green's Common Stock by each director whose term of office
will continue after the Annual Meeting and each executive officer named in the
Summary Compensation Table, individually, and all directors and executive
officers as a group:
Number of Shares
Name of Beneficial Owner Beneficially Owned Percent of Class (1)
Max C. Aiken 66,581 (2)(3) 1.63%
Michael B. Cooney 43,800 (2)(3) 1.08
Paul F. Hummer II 107,027 (2)(3) 2.60
Jack R. Janney 1,125 (4) (5)
Donald E. Lasater 2,625 (5)
William F. Morrison 1,275 (5)
Lester C. Reed 22,274 (2) (5)
Gary L. Roberts 37,096 (2)(3) (5)
Daniel R. Toll 1,875 (5)
All directors and executive
officers as a group (13 persons) 391,932 (2)(3) 9.06
____________
(1) Based upon 4,027,282 shares of A.P. Green Common Stock issued and
outstanding as of March 25, 1994 and, for each director or executive officer or
the group, the number of shares subject to option that may be acquired within 60
days upon exercise of the option.
(2) Totals include 46,500, 37,500, 91,500, 19,500, 33,000 and 301,000 shares
subject to stock options which are presently exercisable by Messrs. Aiken,
Cooney, Hummer, Reed, Roberts, and all directors and executive officers as a
group, respectively, under the A.P. Green Long-Term Performance Plans. Under
applicable regulations of the Securities and Exchange Commission, the shares
subject to options are deemed to be beneficially owned because such shares may
be acquired within 60 days upon exercise of the option.
(3) Includes 2,250, 2,250 4,500, 3,000, and 12,000 shares of restricted stock,
granted under A.P. Green's Long-Term Performance Plans to Messrs. Aiken, Cooney,
Hummer, Roberts, and all directors and executive officers as a group,
respectively. Such shares are subject to forfeiture by the holder and reversion
back to A.P. Green in the event such holder terminates his employment with A.P.
Green during specified time periods.
(4) Does not include 300 shares that are owned by Mr. Janney's wife, as to
which shares Mr. Janney has no voting or investment power.
(5) Less than one percent.
REPORT OF COMPENSATION AND ORGANIZATION COMMITTEE
REGARDING EXECUTIVE COMPENSATION
General
A.P. Green's executive compensation program is administered by the
Compensation and Organization Committee of the Board of Directors. During 1993,
the Committee was composed of the four non-employee directors. Until the Annual
Meeting in May, 1993, the following persons served on the Committee: Harry J.
Bruce (Chairman), Jack R. Janney, Donald E. Lasater and Daniel R. Toll. After
the Annual Meeting, the Committee was comprised of Donald E. Lasater (Chairman),
Jack R. Janney, William F. Morrison and Daniel R. Toll.
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A.P. Green's executive compensation policy is designed and administered to
provide a competitive compensation program that will enable A.P. Green to
attract, motivate, reward and retain executives who have the skills, education,
experience and capabilities required to discharge their duties in a competent
and efficient manner. The compensation policy is based on the principle that
the financial rewards to the executives are aligned with the financial interests
of the stockholders of A.P. Green. In this manner, A.P. Green will meet its
ultimate responsibility to its stockholders by striving to give a suitable long-
term return on their investment through earnings from operations and prudent
management of A.P. Green's assets.
A.P. Green's executive compensation has three separate elements consisting
of base salary, annual incentive compensation and long-term incentive
compensation. The following is a summary of the policies underlying each
element.
Base Salary
The Committee has determined the salary ranges for each of the executive
officer positions of A.P. Green based upon the level and scope of the
responsibilities of the office, the pay levels of similarly positioned executive
officers in manufacturing companies of comparable size to A.P. Green and a
consideration of the equities relating the salary for a particular executive
office to the salaries of other executive offices within A.P. Green at the same
level of responsibility. The Committee's recent practice has been to establish
a range of base salaries for particular offices at or near the fiftieth
percentile of the comparison group of companies. The data utilized in
determining such ranges is compiled from various salary surveys that are made
available to the public by trade and industry associations, accounting firms,
compensation consultants and professional groups.
Prior to the Committee meeting in February of each year, the Chief
Executive Officer, after consultation with the Human Resources Department of
A.P. Green, submits to the Committee a list of recommended salary changes for
all executive officers except himself. At such February meeting, the Committee
considers the Chief Executive Officer's recommendations with respect to a
particular officer in light of such officer's then-current salary within the
applicable range of salaries for such position, the officer's individual
performance and, where appropriate, significant changes in the officer's level
of responsibility. The Committee considers and acts upon increases to the base
salary of the Chief Executive Officer separately in executive session.
The Committee acts upon the recommendations of the Chief Executive Officer
in any manner it deems appropriate and authorizes the salary changes of
specified officers. The Committee also gives the Chief Executive Officer the
discretion to implement salary increases so authorized within a general
timeframe approved by the Committee. Actual salary increases have typically
been implemented by the Chief Executive Officer from 12 to 18 months after the
prior increase depending on A.P. Green's financial performance during such time.
Annual Incentive Compensation
The Committee believes that a significant portion of the executive
officers' potential compensation should be at risk and contingent upon the
Company and its operating groups achieving financial performance objectives. To
this end, each of A.P.Green's nine executive officers (as well as other
management employees) participate in A.P.Green's Management Incentive Plan
pursuant to which such participants are eligible to receive annual cash bonus
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awards. At the beginning of each year the Committee establishes certain minimum
financial performance objectives (typically operating income) for the corporate,
lime, international and refractories groups. These performance objectives are
intended to provide incentives to the participants to meet and exceed the
financial goals for A.P. Green or the particular operating group. The
attainment of performance objectives above the minimum levels are assigned
specified percentage values from 1% to 200%.
In addition, a par or target bonus (expressed as a percentage of base
salary) is established by the Committee for each of the participants in the plan
based upon the executive's title, responsibility, and ability to impact A.P.
Green's or the operating group's financial results. For officers other than the
Chief Executive Officer, such percentages range from 25% to 40% of base salary.
The percentage determined by the actual performance level of the relevant group
to which the participant is assigned is then factored with the par or target
bonus percentage attributable to each participant's position to determine the
percentage of the participant's base salary that will be paid as a cash bonus
under the Plan.
Long-Term Incentive Compensation
The Committee believes that long-term incentive compensation is the most
direct way of tying executive compensation to increases in stockholder value.
A.P. Green's long-term incentive programs are all stock-based thereby providing
a means through which executive officers can build a meaningful equity ownership
in A.P. Green Common Stock.
With the assistance of an outside compensation consultant, the Committee
reevaluated its long-term incentive programs during the latter part of 1992 and
the first part of 1993. In the course of that review, the Committee determined
that: (i) each individual executive officer's long-term incentive compensation
should approximate the fiftieth percentile of long-term incentive compensation
for manufacturing companies of similar size to A.P. Green and (ii) long-term
compensation tied directly to increases in share price, were appropriate for
A.P. Green.
Accordingly, in February, 1993, the Committee adopted the 1993 Performance
Plan, which was approved by stockholders at the Annual Meeting in May, 1993. At
the same time, the Committee also approved the grant of stock options to
executive officers as described elsewhere in this Proxy Statement. These stock
options differ from typical stock options in that the exercisability of such
options is dependent upon the attainment of certain share price levels for A.P.
Green Common Stock within a five year period after the grant of such options.
Specifically, 20% of the options become exercisable when the share price of A.P.
Green common stock reaches each of the following levels: $15.33; $17.00;
$18.67; $20.00; and $22.00. To the extent that all or a portion of such options
become so exercisable prior to the expiration of five years from the date of the
grant, such options remain exercisable for ten years from the date of the
grant. To the extent that all or a portion of such options do not become so
exercisable, such options are exercisable only for one day at the expiration of
five years from the date of the grant.
The Committee believes that the options granted in 1993 give the executive
officers greater incentives throughout the term of the options to strive to
operate A.P. Green in a manner that directly benefits the financial interests of
the stockholders. The options are designed to give the executive officers a
continuous incentive to meet the performance objectives necessary to assure the
appreciation of the stock price both on a long-term, as well as a shorter term
basis. In this manner, the Committee believes that it has aligned the interests
of the executives who are participating in the option grant in a more direct and
continuous manner to the financial return to the stockholders.
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Compensation of Chief Executive Officer
Mr. Hummer's base salary, annual incentive compensation and long-term
incentive compensation are determined by the Committee in the same manner as is
used by the Committee for executive officers generally. The total compensation
package of Mr. Hummer is designed to be competitive within the industry while
creating awards for short- and long-term performance in line with the financial
interests of the stockholders. The Committee has established a range of total
compensation for the position of Chief Executive Officer at or near the fiftieth
percentile for chief executive officers at comparable companies.
Because Mr. Hummer's par or target bonus is 50% of his base salary, a
substantial portion of his cash compensation for the year is therefore dependent
upon A.P. Green's meeting or exceeding the pre-established performance
objectives. Mr. Hummer's stock option grant under the 1993 Performance Plan is
structured in the same manner as the options for each of the other participating
executive officers and is, therefore, affected by the stock price performance of
A.P. Green Common Stock over the next four years.
This report shall not be deemed to be incorporated by reference by any
general statement incorporating by reference the Proxy Statement into any filing
under the Securities Act of 1933 or the Securities Exchange Act of 1934, except
to the extent that A.P. Green specifically incorporates this information by
reference. This report shall not otherwise be deemed to be filed under such
acts.
COMPENSATION AND ORGANIZATION COMMITTEE
Donald E. Lasater, Chairman William F. Morrison
Jack R. Janney Daniel R. Toll
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COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth the compensation of the named executive of
A.P. Green for each of the last three years:
Summary Compensation Table
Long term
Annual Compensation compensation
Restricted
Stock All other
Awards Options/ compen-
Year Salary($) Bonus($) ($)(1) SARs sation (2)
Paul F. Hummer II, 1993 $233,334 $191,000 -0- 75,000/-0- 5,126
Chairman of the 1992 183,332 -0- -0- -0-/-0- 3,150
Board, President 1991 162,496 -0- -0- 22,500/-0-
and Chief Execu-
tive Officer
Max C. Aiken, 1993 138,330 103,140 -0- 30,000/-0- 3,257
Executive Vice 1992 128,336 -0- -0- -0-/-0- 2,250
President 1991 116,069 -0- -0- 15,000/-0-
Gary L. Roberts, 1993 128,000 82,226 -0- 22,500/-0- 3,022
Vice President, 1992 123,000 -0- -0- -0-/-0- 2,205
Chief Financial 1991 116,330 -0- $55,000 12,000/-0-
Officer and
Treasurer
Michael B. Cooney, 1993 129,496 84,900 -0- 22,500/-0- 3,058
Senior Vice 1992 120,996 -0- -0- -0-/-0- 2,130
President Law/ 1991 111,336 -0- -0- 10,500/-0-
Administration
and Secretary
Lester C. Reed, 1993 108,333 55,440 -0- 15,000/-0- 2,558
Vice President, 1992 103,124 -0- -0- -0-/-0- 1,687
Refractory 1991 99,996 -0- -0- 9,000/-0-
Manufacturing
____________
(1) All restricted stock is subject to a three-year vesting period and the
holders of the restricted stock receive any dividends paid on the stock during
the vesting period. As of December 31, 1993, the aggregate number of restricted
shares held by Messrs. Hummer, Aiken, Roberts, Cooney and Reed was 4,500, 2,250,
3,000, 2,250 and 0, respectively, having an aggregate value at December 31, 1993
of $79,875, $39,938, $53,250, $39,938 and $0, respectively.
(2) The totals set forth in this column represent the value of shares of A.P.
Green Common Stock allocated under the A.P. Green Employee Stock Ownership Plan
to the account of the named executive officer for the year ended December 31,
1993.
Employment Arrangements
A.P. Green currently has separate agreements with each of Paul F. Hummer
II, Max C. Aiken, Gary L. Roberts and Michael B. Cooney under which each would
be given severance benefits in the event that his employment with A.P. Green is
"terminated" within three years of a change in control of A.P. Green (except
that in all agreements the rights to severance benefits terminate upon reaching
age 65 if it occurs before the expiration of three years after a change in
control). A.P. Green had such an agreement with Harry Stover which expired
without any payment thereunder upon his retirement as Chairman of the Board on
February 3, 1993. Each agreement is for a term of three years, subject to
automatic extension each year for an additional year unless A.P. Green gives a
60-day notice that the term will not be so extended, except if there is a change
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in control of A.P. Green prior to such notice. Each agreement would require a
lump-sum cash payment generally in an amount equal to 2.99 times the officer's
then-current annual base salary and then-current full year bonus (except that
such multiplier will be subject to a declining pro rata reduction from the date
of such officer's 62nd birthday until his 65th birthday, based upon the number
of months left until such officer's 65th birthday at the effective date of his
termination). If payment of the foregoing amounts and any other benefits
received or receivable subject such officer to payment of federal excise tax,
the total amount payable to such officer shall be increased by an amount
sufficient to satisfy the excise tax and the additional excise and income taxes
thereon.
"Change in control" is generally defined as the type of transaction which
would require disclosure in A.P. Green's proxy statement pursuant to the rules
and regulations of the Securities and Exchange Commission. Specifically,
"change in control" includes, but is not limited to: (i) an acquisition by any
person of 20% or more of the combined voting power of A.P. Green's then-
outstanding voting securities; (ii) the replacement of the majority of the
existing directors during a period of two years or less; (iii) a consolidation
or merger in which A.P. Green is not the surviving corporation or pursuant to
which A.P. Green Common Stock would be converted into cash, securities or other
property; (iv) a sale, lease, exchange or other transfer of all or substantially
all of A.P. Green's assets; or (v) approval by A.P. Green's stockholders of any
plan or proposal for the liquidation or dissolution of A.P. Green.
"Termination" generally includes any event which severs the officer's employment
relationship with A.P. Green, other than termination due to death, disability or
retirement or dismissal for cause. The agreements provide severance benefits in
the event the officer terminates his employment for "good reason." "Good
reason" is generally defined in each such agreement as (i) assignment of duties
inconsistent with the officer's then-current position, status or
responsibilities; (ii) reduction of the officer's then-current base salary;
(iii) elimination of the officer's then-current participation level in A.P.
Green's bonus plans or employee benefit plans; (iv) geographic relocation of the
officer; or (v) failure by A.P. Green to obtain assumption of the agreement by
any successor.
Option Grants in Last Fiscal Year
The following tables sets forth information concerning stock option grants
made in the fiscal year ended December 31, 1993 to the individuals named in the
Summary Compensation Table:
INDIVIDUAL GRANTS GRANT DATE VALUE
Percent of
Number of Total
Securities Options
Underlying Granted Exercise Grant Date
Options Employees or Base Present
Granted in Fiscal Price Expiration Value
Name (#)(1) Year ($/Sh)(1) Date ($)(3)
Paul F. Hummer II ... 75,000 54.55% $12.33 (2) $450,242
Max C. Aiken ........ 30,000 14.55 12.33 (2) 180,097
Gary L. Roberts ..... 22,500 10.91 12.33 (2) 135,073
Michael B. Cooney ... 22,500 10.91 12.33 (2) 135,073
Lester C. Reed ...... 15,000 7.27 12.33 (2) 90,048
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____________
(1) Options were granted with an exercise price equal to the fair market value
on the date of grant.
(2) Options will become exercisable for shares of A.P. Green Common Stock at
the rate of 20% of the total number of shares subject to the option if, prior to
February 18, 1998, the last transaction price of the Common Stock equals for a
period of thirty consecutive trading days or exceeds $15.33, $17.00, $18.67,
$20.00 and $22.00, respectively. To the extent that the options become
exercisable in such manner, such options (or the portion thereof that becomes
exercisable in such manner) will remain exercisable until February 18, 2003. To
the extent that all or a portion of the options remain unexercisable as of
February 18, 1998 due to a failure to achieve the designated stock price levels,
such options will become exercisable on February 18, 1998 and will remain
exercisable only through February 19, 1998.
(3) Grant date present values were derived using the Black-Scholes option
pricing model. As previously stated, the exercise price equaled the fair market
value of $12.33 per share on the date of grant. The model also assumed: (i)
the volatility and dividend yield over the life of the option to be .3687 and
1.66%, respectively, based on three years of monthly stock price and dividend
history; (ii) the option term to be ten years from the date of grant; and (iii)
a risk-free interest rate of 6.7%, the rate of a ten year zero-coupon U.S.
Treasury security at the date of grant. No discounts were taken for: (i) the
possibility the option term would be substantially reduced for all or a portion
of the options granted if the stated performance conditions are not met; (ii)
the risk of forfeiture during the period the options (or a portion thereof) are
under vesting restrictions and are not exercisable; (iii) the possibility that
the option term would be shortened due to retirement or termination other than
for cause; or (iv) the non-transferability of the options. The actual value, if
any, an optionee may realize from option exercise may differ from the grant date
present value and will depend on the increase in the fair market value of the
Common Stock over the exercise price on the date the option is exercised.
Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End
Option/SAR Values
The following table sets forth information concerning the unexercised
options of the named executive officers in the Summary Compensation Table.
Number of
Securities
Underlying Value of Unexercised
Unexercised In-The-Money
Options at Options at Fiscal
Fiscal Year-End(#) Year-End($)(1)
Exercisable/ Exercisable/
Name Unexercisable Unexercisable
Paul F. Hummer II .......... 46,500/75,000 $99,450/406,500
Max C. Aiken ............... 28,500/30,000 $66,300/162,600
Gary L. Roberts ............ 19,500/22,500 $53,040/121,950
Michael B. Cooney .......... 24,000/22,500 $46,410/121,950
Lester C. Reed ............. 10,500/15,000 $39,780/81,300
____________
(1) Based upon a price per share of $17.75, being the last reported trading
price of A.P. Green Common Stock on December 31, 1993.
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Retirement Plan
Officers and employees of A.P. Green participate in a retirement plan (the
"Retirement Plan"). In addition, A.P. Green sponsors a supplemental retirement
plan (the "Supplemental Plan") which pays a participant whose benefit exceeds
the maximum limits set forth in Section 415 of the Internal Revenue Code of
1986, as amended (the "Code"). Under the Retirement Plan, each eligible
participant of A.P. Green will receive an annual retirement benefit based upon
such employee's highest average annualized earnings over any period of 36
consecutive months during the last 120 consecutive months of employment
immediately preceding retirement ("Final Average Compensation").
The following table presents annual retirement benefits under the
Retirement Plan and the Supplemental Plan, assuming normal retirement at age of
65 during 1993, payment based under the straight life annuity option, and Final
Average Compensation and credited service are set forth in the following table:
Final Average Years of Credited Services (2)(3)
Compensation (1) 5 10 15 20 25 30 35
$100,000 ....... 6,379 12,758 19,136 25,515 31,894 38,273 44,651
150,000 ....... 9,786 19,591 29,357 39,148 48,928 58,714 60,477
200,000 ....... 13,193 26,385 39,578 52,770 65,963 79,155 92,348
250,000 ....... 15,635 31,269 46,904 62,538 78,173 93,807 109,442
300,000 ....... 15,635 31,269 46,904 62,538 78,173 93,807 109,442
350,000 ....... 15,635 31,269 46,904 62,538 78,173 93,807 109,442
____________
(1) Final Average Compensation under the Retirement Plan and the Supplemental
Plan includes the employee's salary and any cash portion of bonus awards under
the Management Incentive Compensation Plan. The amount shown in the Summary
Compensation Table as salary for each of the five executive officers named
therein is compensation for purposes of the Retirement Plan and the Supplemental
Plan.
(2) The credited years of service for the five executive officers named in the
cash compensation table as of December 31, 1993 are as follows: Mr. Hummer, 5
years; Mr. Aiken, 19 years; Mr. Roberts, 4 years; Mr. Cooney, 5 years; and Mr.
Reed, 3 years.
(3) The maximum amount payable under the Retirement Plan is limited by the
Code to $115,641 annually, subject to cost-of-living increases after 1992. To
the extent benefits under the Retirement Plan are limited by the Code, they will
be paid under the Supplemental Plan.
STOCKHOLDER RETURN PERFORMANCE GRAPHS
The following graphs compare the quarterly cumulative stockholder returns,
including the reinvestment of dividends, of A.P. Green on an indexed basis with
the S&P 500 Stock Index and an index of peer public companies selected by A.P.
Green because such companies were in one of A.P. Green's lines of business. The
peer companies are Pfizer, Inc. and Dresser Industries, Inc. in refractories and
Scottish Heritable, Inc. and Dravo Corp. in the lime. These were the only
public companies known by A.P. Green to be in either the refractories or the
lime business during the periods presented in the graph.
The first graph presented below compares the total return of A.P. Green
stockholders to the total returns of the comparative indexes described above for
the period beginning January 1, 1989 and ending December 31, 1993. The second
graph shows the total return on a quarterly basis of A.P. Green stockholders as
compared with the quarterly returns on such indexes during 1992 and 1993.
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<PAGE>
[Cumulative Graphs]
CUMULATIVE TOTAL RETURN
Based on reinvestment of $100 beginning December 31, 1988
Dec-88 Dec-89 Dec-90 Dec-91 Dec-92 Dec-93
A.P. Green Industries, Inc. $100 $127 $ 66 $ 54 $ 63 $109
S&P 500 (Registered Trademark) $100 $132 $128 $166 $179 $197
Custom Composite Index
(4 Stocks) $100 $129 $147 $283 $252 $350
Dec-91 Mar-92 Jun-92 Sep-92 Dec-92 Mar-93 Jun-93 Sep-93 Dec-93
A.P. Green
Industries,Inc. $100 $132 $119 $113 $117 $142 $152 $172 $202
S&P 500
(Registered
Trademark) $100 $ 97 $ 99 $102 $108 $112 $113 $116 $118
Custom Composite
Index
(4 Stocks) $100 $ 85 $ 89 $ 91 $ 89 $103 $120 $114 $124
ITEM 2. RATIFICATION OF APPOINTMENT OF AUDITORS
At the Annual Meeting, action will be taken with respect to the
ratification of the appointment of auditors for the ensuing year. KPMG Peat
Marwick served as A.P. Green's independent auditors for the year ended December
31, 1993. The Board of Directors has appointed KPMG Peat Marwick as auditors
for A.P. Green for the current year ending December 31, 1994, subject to
ratification by the stockholders. It is expected that a representative of KPMG
Peat Marwick will be present at the Annual Meeting to respond to appropriate
questions. The Board of Directors recommends a vote "FOR" the ratification of
KPMG Peat Marwick as independent auditors.
PROPOSALS OF SHAREHOLDERS
Proposals of stockholders intended to be present at the 1995 Annual
Meeting of Stockholders must be received by the Secretary of A.P. Green by not
later than December 9, 1994 for consideration in inclusion in the Proxy
Statement and Proxy Card for that meeting.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors of A.P.
Green does not intend to present, nor has it been informed that other persons
intend to present, any matters for action at the Annual Meeting, other than
those specifically referred to herein. If, however, any other matters should
properly come before the Annual Meeting, it is the intention of the persons
named on the Proxy Card to vote the shares represented thereby in accordance
with their judgment as to the best interest of A.P. Green on such matters.
PAUL F. HUMMER, II
Chairman of the Board, President
and Chief Executive Officer
April 8, 1994
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<PAGE>
A.P. GREEN INDUSTRIES, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
May 12, 1994
The undersigned hereby appoints P. F. HUMMER II, G. L. ROBERTS and M. B.
COONEY, and each of them, with or without the others, proxies, with full power
of substitution to vote as designated below, all shares of stock of A.P. Green
Industries, Inc. (the "Corporation") that the undersigned signatory hereof is
entitled to vote at the Annual Meeting of Stockholders of the Corporation to be
held at The Empire Club located off of Teal Lake Road in Mexico, Missouri, on
Thursday, May 12, 1994, at 10:00 a.m., and all adjournments thereof, all in
accordance with and as more fully described in the Notice and accompanying Proxy
Statement for such meeting, receipt of which is hereby acknowledged.
1. Election of Directors
___ FOR all nominees listed below ___ WITHHOLD AUTHORITY to vote for
(except as written to the the nominees listed below
contrary below)
DONALD E. LASATER and WILLIAM F. MORRISON
(INSTRUCTION: To withhold authority to vote for any individual nominee
write that nominee's name in the space provided below.)
________________________________________________________________________________
2. To ratify the appointment of KPMG Peat Marwick as the Corporation's
auditors for the year ending December 31, 1994.
___ FOR ___ AGAINST ___ ABSTAIN
3. To transact any and all other business which may properly come before the
meeting or any adjournment thereof.
(continued, and to be signed, on the other side)
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" THE ELECTION OF THE NOMINEES LISTED AND "FOR" THE RATIFICATION OF
KPMG PEAT MARWICK AS THE CORPORATION'S AUDITORS FOR THE YEAR ENDING DECEMBER 31,
1994.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
SIGN
HERE ___________________________________________
(Please sign exactly as name appears hereon)
SIGN
HERE __________________________________________
(Executors, administrators, trustees, etc.
should so indicate when signing
Dated _________________________________________
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Appendix
The five-year and two-year performance graphs appearing on page 14 of the
Proxy Statement have been filed under cover of Form SE.
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