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 Section 240.14a-11(c) or Section
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 Person(s) 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 transaction 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
Set forth the amount on which the filing fee is calculated and state how
it was determined.
[ ] 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: 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 9, 1996
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 9, 1996, at 10:00 a.m., local time, for the
following purposes:
1. To elect one Class II director to hold office for a term of three
years.
2. To act upon a proposal to adopt the A.P. Green 1996 Long-Term
Performance Plan.
3. To ratify the appointment of KPMG Peat Marwick LLP as A.P. Green's
auditors for the year ending December 31, 1996.
4. 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 22, 1996 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 4, 1996
<PAGE>
A.P. GREEN INDUSTRIES, INC.
Green Boulevard
Mexico, Missouri 65265
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 9, 1996
-----------------
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 9, 1996, 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 4, 1996.
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 22, 1996
are entitled to notice of, and to vote at, the Annual Meeting. On such date,
there were 4,038,754 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 and as voted 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 Beneficial Number of Shares Percent of Outstanding
Owner Beneficially Owned Common Stock (1)
- ------------------------------ ------------------ ----------------------
Mercantile Bancorporation Inc.
One Mercantile Center
St. Louis, Missouri 63101 479,411 (2) 11.87%
Quest Advisory Corp.
1414 Avenue of the Americas
New York, New York 10019 312,650 (3) 7.74%
SoGen International Fund, Inc.
Societe Generale Asset
Management Corp.
1221 Avenue of the Americas
New York, New York 10020 301,500 (4) 7.47%
LaSalle National Trust, N.A.
135 South LaSalle Street
Chicago, Illinois 60603 270,033 (5) 6.69%
Dimensional Fund Advisors Inc.
1299 Ocean View, 11th Floor
Santa Monica, California 90401 235,550 (6) 5.83%
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(1) The percentage calculations are based upon 4,038,754 shares of A.P. Green
Common Stock that were issued and outstanding as of March 22, 1996.
(2) The shares reported as beneficially owned are based upon information
contained in a Schedule 13G dated January 19, 1996, which has been filed
with the Securities and Exchange Commission. The Schedule 13G states
that 479,279 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 132 shares in a fiduciary capacity as trustees of certain
other trusts and have sole voting and investment power with respect to
all of such shares. Mercantile Bancorporation Inc., Mercantile Bank of
St. Louis National Association, the A.P. Green 401(k) Plan and the A.P.
Green Hourly Investment Plan 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 14, 1995, which has been filed
with the Securities and Exchange Commission. The Schedule 13G is a group
filing of Quest Advisory Corp., an investment advisor 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 respect to all 312,650 shares
reported. Mr. Royce has specifically disclaimed beneficial ownership as
to all shares reported on the Schedule 13G.
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(4) The shares reported as beneficially owned are based upon information
contained in a Schedule 13G dated January 31, 1995, which has been filed
with the Securities and Exchange Commission. SoGen International Fund,
Inc., an investment company registered under the Investment Company Act
of 1940, and Societe Generale Asset Management Corp., an investment
advisor registered under the Investment Advisors Act of 1940 which acts
as investment advisor to SoGen International Fund, Inc., reported shared
voting power and investment power with respect to all 301,500 shares
reported.
(5) The shares reported as beneficially owned are based upon information
contained in a Schedule 13G dated February 5, 1996, 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 147,887 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.
(6) The shares reported as beneficially owned are based upon information
contained in a Schedule 13G dated February 7, 1996, 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 149,350
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 DFA 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 86,200 shares
reported above.
ITEM 1. ELECTION OF DIRECTORS
One Class II director 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 Daniel
R. Toll as a Class II director, except as otherwise directed by the
stockholder on the Proxy Card. The nominee receiving the highest number of
votes in the election will be elected as a Class II director. Mr. Toll is
currently a director of A.P. Green. If for anyreason Mr. Toll 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 Daniel R. Toll as a Class II director.
The name, age, principal occupation or position and other directorships
with respect to Mr. Toll and the other directors whose terms of office will
continue after the Annual Meeting is set forth below. Except as otherwise
indicated, 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 II - TO BE ELECTED FOR A TERM OF THREE YEARS EXPIRING IN 1999
Daniel R. Toll, 68 - Director since 1988; Corporate and Civic Director;
Director of Brown Group, Inc., Mallinckrodt 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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CLASS III - TO CONTINUE IN OFFICE UNTIL 1997
Donald E. Lasater, 70 - 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 Company,
Illinois Power Company and Interco Incorporated
William F. Morrison, 58 - 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 1998
Paul F. Hummer II, 54 - Director since 1988; Chairman of the Board, Chief
Executive Officer and President of A.P. Green
P. Jack O'Bryan, 60 - Director since 1995; Executive Vice President, Worldwide
Ceilings, USG Corporation (a building materials manufacturer which filed a
voluntary petition under Chapter 11 of the United States Bankruptcy Code in
March 1993) and President and Chief Executive Officer of USG Interiors, Inc.
BOARD OF DIRECTORS AND COMMITTEES
During 1995, 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 1995.
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, William F. Morrison and P. Jack O'Bryan. 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 1995.
The members of the Audit Committee are Daniel R. Toll (Chairman), Donald
E. Lasater, William F. Morrison and P. Jack O'Bryan. 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 three times in 1995.
The Compensation and Organization Committee is composed of Donald E.
Lasater (Chairman), Daniel R. Toll, William F. Morrison and R. Jack O'Bryan.
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
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make recommendations to the Board of Directors regarding the management
organization, succession and development. The Compensation and Organization
Committee met two times during 1995.
DIRECTOR'S FEES
During fiscal 1995, directors who were not also employees of A.P. Green
received an annual retainer of $16,000 and 375 shares of A.P. Green Common
Stock in lieu of fees for meetings of the Board of Directors or committees.
Directors were also reimbursed for expenses incurred in attending Board or
committee meetings.
Pursuant to the Retirement Plan for Directors, A.P. Green provides
retirement benefits to any non-employee director who retires as a director of
A.P. Green or who terminates his directorship with A.P. Green due to a
disability, after serving as a director of A.P. Green for a minimum of five
years. The benefits that are payable to each director are determined by
multiplying the annual retainer paid to directors of A.P. Green on the date of
such director's retirement or termination of service due to disability by 10%
for each year of service as an A.P. Green director, with the maximum annual
benefit for any director being 100% of the then-applicable annual retainer.
Benefits will commence upon the later of the date that the former director
attains the age of 65 or the date that such former director ceases to be a
director of A.P. Green due to retirement or disability. An eligible director
will continue to receive benefits under the plan during his lifetime on a
quarterly basis for a maximum of ten years.
SECURITY OWNERSHIP BY MANAGEMENT
The following table indicates, as of March 22, 1996, the beneficial
ownership of A.P. Green Common Stock by each nominee for director, 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)
- ------------------------ ------------------ --------------------
Jurgen H. Abels 27,822 (2) (3)
Max C. Aiken 67,212 (2) 1.66%
Michael B. Cooney 49,633 (2) 1.03
Paul F. Hummer II 129,601 (2) 3.13
Donald E. Lasater 3,375 (3)
William F. Morrison 2,025 (3)
P. Jack O'Bryan 1,425 (3)
Gary L. Roberts 42,099 (2) 1.03
Daniel R. Toll 2,625 (3)
All directors and
executive officers as
a group (15 persons) 419,309 (2) 9.62
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(1) Based upon 4,038,754 shares of A.P. Green Common Stock issued and
outstanding as of March 22, 1996 and, for each 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 25,500, 52,500, 42,000, 106,500, 37,500 and 320,750 shares
subject to stock options which are presently exercisable by Messrs.
Abels, Aiken, Cooney, Hummer and 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) Less than one percent.
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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
1995, the Committee was composed of three non-employee directors, Donald E.
Lasater (Chairman), William F. Morrison and Daniel R. Toll who served
throughout the year. In addition, Jack R. Janney served as a member of the
Committee until the annual meeting of stockholders in May 1995, and P.J.
O'Bryan served on the Committee following that meeting and during the period
that this report was prepared.
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 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 the salary increase 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.
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The Committee considers and acts upon increases to the base salary of the
Chief Executive Officer separately in executive session.
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 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
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 participating officers 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 responsibility and ability to impact A.P.
Green's or the operating group's financial results. For executive officers
other than the Chief Executive Officer, such percentages range from 30% 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 Management Incentive Plan.
Where, in the Committee's judgment, the awards under the Management
Incentive Plan do not reflect the actual achievements of individual
executive officers during the year, the Committee may make special bonus
awards after taking into account the contributions of such executive officers
and the interests of the stockholders.
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 respect to A.P. Green's long-term performance programs, the
Committee has 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 approved a grant of stock
options to executive officers, the exercisability of which 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 would 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
becomes 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 any portion of such option does not become so
exercisable, such portion will be exercisable only for one day at the
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expiration of five years from the date of the grant. As of December 31, 1995,
80% of the options were exercisable and will remain exercisable for ten years
from the date of grant. Achievement of a trading price of $20.00 per share
represented an increase of 63% in the trading price of the Company's stock
from the date the 1993 Performance Plan was adopted.
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.
To further these goals in the future, the Committee has recommended, and
the full Board of Directors has approved, the adoption of the 1996 Long-Term
Performance Plan and its submission to the stockholders for their approval at
the 1996 Annual Meeting of Stockholders. A description of the 1996 Long-Term
Performance Plan is set forth in this Proxy Statement under the caption "Item
2. Proposal to Adopt the A.P. Green Industries, Inc. 1996 Long-Term
Performance Plan."
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 for 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 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 last three years and
will be affected by the stock price performance over the next several 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
P. Jack O'Bryan 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
Annual Compensation Long term compensation
------------------- ----------------------
Name and Principal All other
Position Year Salary($) Bonus($) Options/SARs(#) compensation($)(1)
- ------------------ ---- --------- -------- --------------- ------------------
Paul F. Hummer II, 1995 $302,079 $ 75,600 -0-/-0- $4,926
Chairman of the 1994 274,600 96,000 -0-/-0- 4,516
Board, President 1993 233,334 191,000 75,000/-0- 5,126
and Chief
Executive Officer
Max C. Aiken, 1995 163,992 32,832 -0-/-0- 5,471
Executive Vice 1994 146,742 45,760 -0-/-0- 5,678
President 1993 138,330 103,140 30,000/-0- 3,257
Michael B. Cooney, 1995 141,496 26,271 -0-/-0- 4,724
Senior Vice 1994 135,496 37,240 -0-/-0- 5,474
President Law/ 1993 129,496 84,900 22,500/-0- 3,058
Administration
and Secretary
Gary L. Roberts, 1995 141,132 25,515 -0-/-0- 4,678
Vice President, 1994 134,000 36,120 -0-/-0- 5,450
Chief Financial 1993 128,000 82,226 22,500/-0- 3,022
Officer and
Treasurer
Jurgen H. Abels, 1995 113,838 28,680 -0-/-0- 3,676
Vice President, 1994 107,506 25,440 -0-/-0- 3,725
International 1993 100,996 39,660 15,000/-0- 2,914
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(1) 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
years ended December 31, 1995, 1994 and 1993.
Employment Arrangements
A.P. Green currently has separate agreements with each of Paul F. Hummer
II, Max C. Aiken, Michael B. Cooney and Gary L. Roberts 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 such 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). Each agereement 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 vwill not be so extended, except if there is a
change 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.
-10-
<PAGE>
"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.
Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End
Option/SAR Values
No stock options were exercised by any of the executive officers named in
the Summary Compensation Table during the fiscal year ended December 31, 1995.
The following table sets forth information concerning the unexercised options
of the executive officers named 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 . . . . . . . . 106,500/15,000 $597,105/107,550
Max C. Aiken. . . . . . . . . . . 52,500/ 6,000 280,425/ 43,020
Michael B. Cooney . . . . . . . . 42,000/ 4,500 209,640/ 32,265
Gary L. Roberts . . . . . . . . . 37,500/ 4,500 211,875/ 32,265
Jurgen H. Abels . . . . . . . . . 25,500/ 3,000 131,835/ 21,510
- ----------------
(1) Based upon a price per share of $19.50, being the last reported trading
price of A.P. Green Common Stock on December 29, 1995.
Retirement Plan
Officers and employees of A.P. Green participate in a retirement plan
(the "Retirement Plan"). In addition, A.P. Green sponsors supplemental
retirement plans (the "Supplemental Plans") which allow the payment of
benefits exceeding the maximum limits set forth in the Internal Revenue Code
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<PAGE>
of 1986, as amended (the "Code"). Under the Retirement Plan and the
Supplemental Plans, 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 benefits shown in the following table as payable
under the Retirement Plan and Supplemental Plans are not subject to offset for
Social Security benefits received by the participant.
Annual retirement benefits under the Retirement Plan and the Supplemental
Plans, assuming normal retirement at age of 65 during 1995, payment based
under the straight life annuity option, and Final Average Compensation and
credited service are set forth in the following table:
Years of Credited Service (2)(3)
Final Average -------------------------------------------------------
Compensation (1) 5 10 15 20 25 30 35
- ---------------- - -- -- -- -- -- --
$150,000 . . . . 9,706 19,411 29,117 38,822 48,528 58,233 67,939
250,000 . . . . 16,519 33,039 49,558 66,077 82,596 99,116 115,635
350,000 . . . . 23,333 46,666 69,999 93,332 116,665 139,998 163,331
450,000 . . . . 30,147 60,294 90,440 120,587 150,734 180,881 211,027
- ----------------
(1) Final Average Compensation under the Retirement Plan and the Supplemental
Plans includes the employee's salary and any cash bonus awards under the
Management Incentive Compensation Plan. The amount shown in the Summary
Compensation Table as salary and bonus for each of the five executive
officers named therein is compensation for purposes of the Retirement
Plan and the Supplemental Plans.
(2) The credited years of service for the five executive officers named in
the Summary Compensation Table as of December 31, 1995 are as follows:
Mr. Hummer, 7 years; Mr. Aiken, 21 years; Mr. Cooney, 7 years; Mr.
Roberts, 6 years; and Mr. Abels, 11 years.
(3) The maximum amount payable under the Retirement Plan is limited by the
Code to $120,000 annually, subject to cost-of-living increases and
reduction by reason of contributions under tax-qualified defined
contribution plans maintained by A.P. Green. To the extent benefits
under the Retirement Plan are limited by the Code, they will be paid
under the Supplemental Plans.
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: Minerals Technologies Inc.
(formerly a subsidiary of Pfizer, Inc.) and Global Industrial Technologies,
Inc. (formerly a subsidiary of Indresco, Inc.) in the refractories business;
United States Lime & Minerals, Inc. (formerly Scottish Heritable) and Dravo
Corp. in the lime business.
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, 1991 and ending
December 31, 1995. 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 1994 and 1995.
-12-
<PAGE>
[Performance Graph #1]
CUMULATIVE TOTAL RETURN
Based on reinvestment of $100 beginning December 31, 1990
Dec-90 Dec-91 Dec-92 Dec-93 Dec-94 Dec-95
------ ------ ------ ------ ------ ------
A.P.Green Industries, Inc. $100 $ 82 $ 96 $166 $175 $187
S&P 500 (Registered Trademark) $100 $130 $140 $155 $157 $215
Custom Composite Index
(4 Stocks) $100 $192 $173 $240 $238 $296
[Performance Graph #2]
CUMULATIVE TOTAL RETURN
Based on reinvestment of $100 beginning December 31, 1993
Dec-93 Mar-94 Jun-94 Sep-94 Dec-94 Mar-95 Jun-95 Sep-95 Dec-95
------ ------ ------ ------ ------ ------ ------ ------ ------
A.P.Green
Industries,
Inc. $100 $113 $ 98 $101 $106 $108 $114 $138 $113
S&P 500
(Registered
Trademark) $100 $ 96 $ 97 $101 $101 $111 $122 $131 $139
Custom
Composite Index
(4 Stocks) $100 $ 90 $ 93 $ 98 $ 99 $101 $119 $124 $124
-13-
<PAGE>
ITEM 2. PROPOSAL TO ADOPT THE A.P. GREEN INDUSTRIES, INC.
1996 LONG-TERM PERFORMANCE PLAN
The Board of Directors has adopted, subject to approval by the
stockholders of A.P. Green, the A.P. Green Industries, Inc. 1996 Long-Term
Performance Plan (the "Plan"), which provides for the granting of stock
options and other stock-based awards. The Plan is in addition to the 1987 and
1989 Long-Term Performance Plans, each of which authorized the issuance of
195,000 shares of A.P. Green Common Stock, and the 1993 Long-Term Performance
Plan which authorized the issuance of 225,000 shares. At December 31, 1995,
there were 63,379 shares available for grant under these prior plans. The
total number of shares of A.P. Green Common Stock to be issuable under the
Plan is not to exceed 200,000 shares, subject to adjustment in the event of
any change in the outstanding shares of such stock by reason of a stock
dividend, stock split, recapitalization, merger, consolidation or other
similar change generally affecting stockholders of A.P. Green.
The Board of Directors believes that the Plan (as well as the 1987, 1989
and 1993 plans) advances the interests of A.P. Green and its stockholders by
encouraging key employees of A.P. Green and its subsidiaries to acquire A.P.
Green Common Stock or to receive monetary payments based on the value of the
Common Stock upon the achievement of certain goals that are mutually
advantageous to A.P. Green and its stockholders, on the one hand, and the
participating employees, on the other. The Board believes that the Plan will
provide additional incentives toward the continuation of superior performance
by its employees in the success of A.P. Green and will enable A.P. Green and
its subsidiaries to attract and retain the services of its key employees. In
order to allow the continuation of stock-based incentive programs at A.P.
Green, the Board of Directors recommends that the stockholders approve the
Plan.
The Plan is administered by the Compensation and Organization Committee
of the Board of Directors (the "Committee"), currently consisting of four
directors of A.P. Green, each of whom is a non-employee director of A.P.
Green. Members of the Committee are not eligible to receive a benefit under
the Plan for a period of at least one year prior to appointment to the
Committee and during the period that they serve on the Committee. The
Committee, by majority action thereof, is authorized in its sole discretion to
determine the individuals to whom the benefits will be granted, the type and
amount of such benefits and the terms of the benefit grants, as well as to
interpret the Plan, to prescribe, amend and rescind rules and regulations
relating to the Plan, to provide for conditions and assurances deemed
necessary or advisable to protect the interests of A.P. Green, and to make all
other determinations necessary or advisable for the administration of the Plan
to the extent not contrary to the express provisions of the Plan.
Description of Plan
Under the terms of the Plan, key employees of A.P. Green and its
subsidiaries as determined in the sole discretion of the Committee will be
eligible to receive (a) stock options ("Stock Options") exercisable into
shares of A.P. Green Common Stock which may or may not qualify as incentive
stock options within the meaning of Section 422 of the Internal Revenue Code,
as amended, (b) restricted shares of A.P. Green Common Stock ("Restricted
Stock"), and (c) performance awards ("Performance Awards").
Stock Options. Stock Options granted under the Plan shall entitle the
holder thereof to purchase A.P. Green Common Stock at a purchase price
established therefor by the Committee, which price shall not be less than the
fair market value of A.P. Green Common Stock on the date of grant. The
Committee shall determine the term of such Stock Options and the times at, and
conditions under which, such Stock Options will become exercisable. Stock
Options will generally not be exercisable earlier than six months nor later
than ten years from the date of the grant, except that Options will become
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<PAGE>
immediately exercisable at any time after grant that more than 20% of A.P.
Green's Common Stock, business or assets are acquired by a person or
affiliated group of persons without the approval of A.P. Green's Board of
Directors. Stock Options outstanding and unexercised at the time of the death
or disability of the holder shall terminate on the first to occur of either
the expiration date thereof or the expiration of twelve months after the date
of such event. In the event of a holder's termination of employment as a
result of retirement or for reasons not otherwise referenced above, all
outstanding Stock Options held by such person shall terminate three months
after the date of such event or, if earlier, the expiration date of such
option.
There is no maximum or minimum number of shares for which a Stock Option
may be granted; however, for any employee, the aggregate fair market value of
A.P. Green Common Stock subject to qualifying incentive stock options that are
exercisable for the first time in any calendar year may not exceed $100,000.
Restricted Stock. The Committee may issue shares of A.P. Green Common
Stock either as a stock bonus or at a purchase price of less than fair market
value, subject to the restrictions or conditions specified by the Committee at
the time of grant. In addition to any other restrictions or conditions that
may be imposed on the Restricted Stock, shares of Restricted Stock may not be
sold or disposed of for a period of six months after the date of grant.
During the period of restriction, holders of Restricted Stock shall be
entitled to receive all dividends and other distributions made in respect of
such stock and to vote such stock without limitation.
Performance Awards. The Committee may grant Performance Awards
consisting of shares of A.P. Green Common Stock, monetary units payable in
cash or a combination thereof. These grants would result in the issuance,
without payment therefor, of Common Stock or the payment of cash upon the
achievement of certain pre-established performance criteria (such as return on
average total capital employed, earnings per share or return of stockholders'
equity) during a specified performance period not to exceed five years. The
participating employee will have no right to receive dividends on or to vote
any shares subject to Performance Awards until the award is actually earned
and the shares are issued. In the event that a person who is required to file
reports under Section 16 of the Securities Exchange Act of 1934 receives a
Performance Award that includes shares of A.P. Green Common Stock, such shares
received may not be disposed of by such person until six months following the
date of issuance. The Committee is expressly authorized to issue the stock
portion of any bonus award payable under any incentive compensation plan (or
other similar program) as Performance Awards under the Plan.
The Plan is to remain in effect until (a) all Common Stock reserved
under the Plan shall have been purchased or acquired, (b) the Board terminates
the Plan, or (c) February 14, 2006, whichever shall first occur. The Board
may terminate the Plan at any time and from time to time may amend or modify
the Plan; provided, however, that no such action of the Board may, without the
approval of the stockholders of A.P. Green: (a) increase the total amount of
stock or the amount or type of benefit that may be issued under the Plan; (b)
change the provisions of the Plan regarding the minimum purchase price of
awards; or (c) modify the requirements as to eligibility for benefits. No
amendment, modification or termination of the Plan shall in any manner
adversely affect any award theretofore granted under the Plan, without the
consent of the participant affected thereby.
Federal Income Tax Consequences
No income will be realized by a participating officer or employee on the
grant of an incentive stock option or an option which is not an incentive
stock option ("non-qualified option") or upon the award of Restricted Stock,
and A.P. Green will not be entitled to a deduction at such time. If a holder
exercises an incentive stock option and does not dispose of the shares
-15-
<PAGE>
acquired within two years from the date of the grant, or within one year from
the date of exercise of the option, no income will be realized by the holder
at the time of exercise. A.P. Green will not be entitled to a deduction by
reason of the exercise.
If a holder disposes of the shares acquired pursuant to an incentive
stock option within two years from the date of grant of the option or within
one year from the date of exercise of the option, the holder will realize
ordinary income at the time of disposition which will equal the excess, if
any, of the lesser of (a) the amount realized on the disposition, or (b) the
fair market value of the shares on the date of exercise, over the holder's
basis in the shares. A.P. Green generally will be entitled to a deduction in
an amount equal to such income in the year of the disqualifying disposition.
Upon the exercise of a non-qualified option, the excess, if any, of the
fair market value of the stock on the date of exercise over the purchase price
is ordinary income to the holder as of the date of exercise. A.P. Green
generally will be entitled to a deduction equal to such excess amount in the
year of exercise.
Subject to a voluntary election by the holder under Section 83(b) of the
Internal Revenue Code of 1986, as amended (the "Code"), a holder will realize
income as a result of the award of Restricted Stock at the time the
restrictions expire on such shares. An election pursuant to Section 83(b) of
the Code would have the effect of causing the holder to realize income in the
year in which such award was granted. The amount of income realized will be
the difference between the fair market value of the shares on the date such
restrictions expire (or on the date of issuance of the shares, in the event of
a Section 83(b) election) over the purchase price, if any, of such shares.
A.P. Green generally will be entitled to a deduction equal to the income
realized in the year in which the holder is required to report such income.
An officer or employee will realize income as a result of a Performance
Award, including shares issued under any incentive compensation plan at the
time the award is issued or paid. The amount of income realized by the
participant will be equal to the fair market value of the shares on the date
of issuance, in the case of a stock award, and to the amount of the cash paid,
in the event of a cash award. A. P. Green will be entitled to a corresponding
deduction equal to the income realized in the year of such issuance or
payment.
The complete text of the Plan is set forth in Appendix A to this Proxy
Statement.
The vote required to approve the Plan is a majority of the shares of A.P.
Green Common Stock present, in person or by proxy, and voting at the Annual
Meeting. The Board of Directors recommends a vote "FOR" the approval of the
A.P. Green Industries, Inc. 1996 Long-Term Performance Plan.
ITEM 3. 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 LLP served as A.P. Green's independent auditors for the year ended
December 31, 1995. The Board of Directors has appointed KPMG Peat Marwick LLP
as auditors for A.P. Green for the current year ending December 31, 1996,
subject to ratification by the stockholders. It is expected that a
representative of KPMG Peat Marwick LLP 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 LLP as independent auditors.
-16-
<PAGE>
PROPOSALS OF STOCKHOLDERS
Proposals of stockholders intended to be presented at the 1997 Annual
Meeting of Stockholders must be received by the Secretary of A.P. Green by not
later than December 5, 1996 for consideration for 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 as proxies to vote the shares represented by Proxy Cards
granting such proxies discretionary authority to vote on such other matters 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 4, 1996
-17-
<PAGE>
1996 LONG-TERM PERFORMANCE PLAN OF Appendix A
A. P. GREEN INDUSTRIES, INC. ----------
1. Purpose. The purpose of this Plan is to encourage certain employees
of the Corporation, and of such subsidiaries of the Corporation as the
Committee administering the Plan designates, to acquire Common Stock of the
Corporation or to receive monetary payments based on the value of such stock
or based upon achieving certain goals on a basis mutually advantageous to such
employees and the Corporation and thus provide an incentive for continuation
of the efforts of employees for the success of the Corporation and for
continuity of employment.
2. Administration. The Plan will be administered by the Compensation
and Organization Committee (the "Committee") of the Board of Directors of the
Corporation consisting of three or more Directors as the Board may designate
from time to time, none of whom have been eligible to receive a benefit under
this Plan for a period of at least one year prior to appointment or during the
period of appointment. The determinations of the Committee shall be made in
accordance with their judgment as to the best interests of the Corporation and
its stockholders and in accordance with the purpose of the Plan. A majority
of members of the Committee shall constitute a quorum, and all determinations
of the Committee shall be made by a majority of its members. Any
determination of the Committee under the Plan may be made without notice or
meeting of the Committee, by a writing signed by a majority of the Committee
members.
3. Shares Reserved Under the Plan. There is hereby reserved for
issuance under the Plan an aggregate of 200,000 shares of Common Stock of the
Corporation, which may be authorized but unissued or treasury shares. Stock
underlying outstanding options or Performance Awards will be counted against
the Plan maximum while such options or awards are outstanding. Shares
underlying expired, cancelled or forfeited options or awards may be added back
to the Plan maximum. When the exercise price of stock options is paid by
delivery of shares of Common Stock of the Corporation, or if the Committee
approves the withholding of shares from a distribution in payment of the
exercise price, the number of shares available for issuance under the Plan
shall be reduced by the gross (rather than the net) number of shares which
would have been issued pursuant to such exercise, regardless of the number of
shares surrendered or withheld in payment. If the Committee approves the
payment of cash to an optionee equal to the difference between the fair market
value and the exercise price of stock subject to an option, the number of
shares available for issuance under the Plan shall be reduced by the number of
shares with respect to which such payment is authorized. Restricted Stock
issued pursuant to the Plan will be counted against the Plan maximum while
outstanding even while subject to restrictions. Shares of Restricted Stock may
not be added back to the Plan maximum if such Restricted Stock is forfeited.
4. Participants. Participants will consist of such officers and key
employees of the Corporation or any designated subsidiary as the Committee in
its sole discretion determines have a major impact on the success and future
growth and profitability of the Corporation. Designation of a participant in
any year shall not require the Committee to designate such person to receive a
benefit in any other year or to receive the same type or amount of benefit as
granted to the participant in any other year or as granted to any other
participant in any year. The Committee shall consider such factors as it
deems pertinent in selecting participants and in determining the type and
amount of their respective benefits.
5. Types of Benefits. The following benefits may be granted under the
Plan: (a) Incentive Stock Options, (b) Nonqualified Stock Options; (c)
Restricted Stock; and (d) Performance Awards; all as described below.
<PAGE>
6. Incentive Stock Options: Incentive Stock Options shall consist of
stock options to purchase shares of Common Stock at purchase prices not less
than 100% of the fair market value of the shares on the date the option is
granted. Said purchase price may be paid (i) by check or, in the discretion
of the Committee, either (ii) by the delivery of shares of Common Stock of the
Corporation then owned by the participant or (iii) by directing the Company to
withhold from the number of shares of Common Stock otherwise issuable upon
exercise of the option that whole number of shares of Common Stock having an
aggregate fair market value on the date of exercise at least equal to the
exercise price for all of the shares of Common Stock subject to such exercise,
or (iv) by a combination of any of the foregoing, in the manner provided in
the option agreement. In lieu of exercising an option and subject to the
approval of the Committee, the optionee may request that the Company pay in
cash the difference between the fair market value of part or all of the stock
which is the subject of the option and the exercise price thereof. Incentive
Stock Options will be exercisable not earlier than six months and not later
than ten years after the date they are granted and will terminate not later
than three months after termination of employment for any reason other than
death or disability. In the event termination of employment occurs as a
result of death or disability, such an option will be exercisable for 12
months after such termination. If the optionee dies within 12 months after
termination of employment by disability, then the period of exercise following
death shall be the remainder of the 12-month period, or three months,
whichever is longer. If the optionee dies within three months after
termination of employment for any other reason, then the period of exercise
following death shall be three months. However, in no event shall any
Incentive Stock Option be exercised more than ten years after its grant.
Leaves of absence granted by the Corporation for military service, illness,
and transfers of employment between the Corporation and any subsidiary thereof
shall not constitute termination of employment. The aggregate fair market
value (determined as of the time an option is granted) of the stock with
respect to which Incentive Stock Options are exercisable for the first time by
an optionee during any calendar year (under all option plans of the
Corporation and its subsidiary corporations) shall not exceed $100,000.
7. Nonqualified Stock Options. Nonqualified Stock Options shall
consist of nonqualified stock options to purchase shares of Common Stock at
purchase prices not less than 100% of the fair market value of the shares on
the date the option is granted. Said purchase price may be paid (i) by check
or, in the discretion of the Committee, either (ii) by the delivery of shares
of Common Stock of the Corporation then owned by the participant or (iii) by
directing the Company to withhold from the number of shares of Common Stock
otherwise issuable upon exercise of the option that whole number of shares of
Common Stock having an aggregate fair market value on the date of exercise at
least equal to the exercise price for all of the shares of Common Stock
subject to such exercise, or (iv) by a combination of any of the foregoing, in
the manner provided in the option agreement. In lieu of exercising an option
and subject to the approval of the Committee, the optionee may request that
the Company pay in cash the difference between the fair market value of part
or all of the stock which is the subject of the option and the exercise price
thereof. Nonqualified Stock Options will be exercisable not earlier than six
months and not later than ten years after the date they are granted and will
terminate not later than three months after termination of employment for any
reason other than death, retirement or disability. In the event termination
of employment occurs as a result of death, retirement or disability, such an
option will be exercisable for 12 months after such termination. If the
optionee dies within 12 months after termination of employment by retirement
or disability, then the period of exercise following death shall be three
months. However, in no event shall any option be exercised more that ten
years after its grant. Leaves of absence granted by the Corporation for
military service, illness, and transfers of employment between the Corporation
and any subsidiary thereof shall not constitute termination of employment.
The Committee shall have the right to determine at the time the option is
granted whether shares issued upon exercise of a Nonqualified Stock Option
shall be subject to restrictions, and if so, the nature of the restrictions.
-A-2-
<PAGE>
8. Restricted Stock. Restricted Stock shall consist of Common Stock of
the Corporation issued or transferred under the Plan (other than upon exercise
of Stock Options or as Performance Awards) at any purchase price less than the
fair market value thereof on the date of issuance or transfer, or as a bonus.
In the case of any Restricted Stock:
(a) The purchase price, if any, will be determined by the Committee.
(b) Restricted Stock may be subject to (i) restriction on the sale or
other disposition thereof, provided, however, that Restricted Stock granted to
a person who is subject to Section 16 of the Securities Exchange Act of 1934
(a "Reporting Person") shall, in addition to any other restrictions thereon,
not be sold or disposed of for six (6) months following the date of grant;
(ii) rights of the Corporation to reacquire such Restricted Stock at the
purchase price, if any, originally paid therefor upon termination of the
employee's employment within specified periods; (iii) representation by the
employee that he or she intends to acquire Restricted Stock for investment and
not for resale; and (iv) such other restrictions, conditions and terms as the
Committee deems appropriate.
(c) The participant shall be entitled to all dividends paid with
respect to Restricted Stock during the period of restriction and shall not be
required to return any such dividends to the Corporation in the event of the
forfeiture of the Restricted Stock.
(d) The participant shall be entitled to vote the Restricted Stock
during the period of restriction.
(e) The Committee shall determine whether Restricted Stock is to be
delivered to the participant with an appropriate legend imprinted on the
certificate or if the shares are to be deposited in escrow pending removal of
the restrictions.
9. Performance Awards.
(a) Performance Awards shall consist of Common Stock of the Corporation,
monetary units or some combination thereof, to be issued without any payment
therefor, in the event that certain performance goals established by the
Committee are achieved over a period of time designated by the Committee, but
not in any event more than five years. The goals established by the Committee
may include return on average total capital employed, earnings per share,
return on stockholders' equity and such other goals as may be established by
the Committee. In the event the minimum Corporate goal is not achieved at the
conclusion of the period, no payment shall be made to the participant. Actual
payment of the award earned shall be in cash or in Common Stock of the
Corporation or in a combination of both, as the Committee in its sole
discretion determines. If Common Stock of the Corporation is used, the
participant shall not have the right to vote and receive dividends until the
goals are achieved and the actual shares are issued. In the event a Reporting
Person receives a Performance Award which includes Common Stock of the
Corporation, such stock shall not be sold or disposed of for six (6) months
following the date of issuance pursuant to such award. In the event of a cash
payment, the number of shares reserved for issuance hereunder shall be reduced
as if shares had been issued.
(b) The Committee is expressly authorized to include under this Section
9 and to pay under this Plan that portion of any award earned under any
separate management incentive award program (or similar program) of the
Corporation or any subsidiary thereof which is to be paid or distributed to
participants thereunder in Common Stock of the Corporation. If and to the
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<PAGE>
extent that the Committee exercises its authority to include and pay such
awards under this Plan, the designation award program as covered by this Plan
shall be sufficient to include the participants under such award program as
participants in this Plan, but such participants may not receive any other
benefits or distributions under this Plan unless they are separately
designated as participants hereunder with specific additional rights to
benefits described only in this Plan. Reporting Persons who receive payment
under this Section 9 shall be subject to the provisions of this Plan
applicable to awards to Reporting Persons.
10. Adjustment Provisions.
(a) If the Corporation shall at any time change the number of issued
shares of Common Stock without new consideration to the Corporation (such
as by stock dividends or stock splits), the total number of shares reserved
for issuance under this Plan and the number of shares covered by each
outstanding benefit shall be adjusted so that the aggregate consideration
payable to the Corporation, if any, and the value of each such benefit shall
not be changed. Benefits may also contain provisions for their continuation
or for other equitable adjustments after changes in the Common Stock resulting
from reorganization, sale, merger, consolidation, issuance of stock rights or
warrants, or similar occurrence.
(b) Notwithstanding any other provision of this Plan, and without
affecting the number of shares reserved or available hereunder, the Board of
Directors may authorize the issuance or assumption of benefits in connection
with any merger, consolidation, acquisition of property or stock, or
reorganization upon such terms and conditions as it may deem appropriate.
(c) The six-month holding periods in Sections 6 and 7 above shall not
apply in the event that more than 20% of the Corporation's Common Stock,
business, or assets are purchased or acquired by any person, firm,
corporation, or group acting in concert and without agreement of the
Corporation's Board of Directors. In such event, any such option or right
shall be deemed exercisable upon grant and with no waiting period.
11. Nontransferability. Each benefit granted under the Plan to an
employee shall not be transferable otherwise than by will or the laws of
descent and distribution or pursuant to a Qualified Domestic Relations Order
(as defined in Section 206(d)(3) of the Employee Retirement Income Security
Act of 1974, as amended, and the rules promulgated thereunder), and shall be
exercisable, during the participant's lifetime, only by the participant. In
the event of the death of a participant, exercise or payment shall be made
only:
(a) By or to the executor or administrator of the estate of the deceased
participant or the person or persons to whom thedeceased participant's rights
under the benefit shall pass by will or the laws of descent and distribution;
and
(b) To the extent that the deceased participant was entitled thereto at
the date of his death.
12. Taxes. The Corporation shall be entitled to withhold the amount of
any tax attributable to any amounts payable or shares deliverable under the
Plan after giving the person entitled to receive such payment or delivery
notice as far in advance as practicable, and the Corporation may defer making
payment or delivery as to any benefit if any such tax is payable until
indemnified to its satisfaction. The person entitled to any such delivery
may, by notice to the Corporation at the time the requirement for such
delivery is first established, elect to have such withholding satisfied by a
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<PAGE>
reduction of the number of shares otherwise so deliverable, such reduction to
be calculated based on a closing market price on the date of such notice.
13. Tenure. A participant's right, if any, to continue to serve the
Corporation and its subsidiaries as an officer, employee, or otherwise, shall
not be enlarged or otherwise affected by his or her designation as a
participant under the Plan.
14. Duration, Interpretation, Amendment and Termination. No benefit
shall be granted more than ten years after the date of adoption of this Plan;
provided, however, that the terms and conditions applicable to any benefit
granted within such period may thereafter be amended or modified by mutual
agreement between the Corporation and the participant or such other person as
may then have an interest therein. Also, by mutual agreement between the
Corporation and a participant hereunder, Stock Options or other benefits may
be granted to such participant in substitution and exchange for, and in
cancellation of, any benefits previously granted such participant under this
Plan. To the extent that any Stock Options or other benefits which may be
granted within the terms of the Plan would qualify under present or future
laws for tax treatment that is beneficial to a recipient, then any such
beneficial treatment shall be considered within the intent, purpose and
operational purview of the Plan and the discretion of the Committee, and to
the extent that any such Stock Options or other benefits would so qualify
within the terms of the Plan, the Committee shall have full and complete
authority to grant Stock Options or other benefits that so qualify (including
the authority to grant, simultaneously or otherwise, Stock Options or other
benefits which do not so qualify) and to prescribe the terms and conditions
(which need not be identical as among recipients) in respect to the grant or
exercise of any such Stock Option or other benefits under the Plan. The Board
of Directors may amend the Plan from time to time or terminate the Plan at any
time. However, no action authorized by this paragraph shall reduce the amount
of any existing benefit or change the terms and conditions thereof without the
participant's consent. No amendment of the Plan shall, without approval of
the stockholders of the Corporation (a) increase the total number of shares
which may be issued under the Plan or increase the amount or type of benefits
that may be granted under the Plan; (b) change the minimum purchase price, if
any, of shares of Common Stock which may be made subject to benefits under the
Plan; or (c) modify the requirements as to eligibility for benefits under the
Plan.
15. Stockholder Approval. The Plan was adopted by the Board of
Directors on February 15, 1996, and was approved by the stockholders of the
Corporation on May 9, 1996.
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<PAGE>
Appendix B
A.P. GREEN INDUSTRIES, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
May 9, 1996
The undersigned hereby appoints MERCANTILE BANK OF ST. LOUIS
NATIONAL ASSOCIATION, AS TRUSTEE OF THE A.P. GREEN INDUSTRIES, INC. 401(K)
PLAN AND THE A.P. GREEN INDUSTRIES, INC. HOURLY INVESTMENT PLAN, as proxy, 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 9, 1996, 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 the nominee listed below [ ] WITHHOLD AUTHORITY to vote for
the nominee listed below
DANIEL R. TOLL
2. To act upon a proposal to adopt the A.P. Green Industries, Inc. 1996
Long-Term Performance Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To ratify the appointment of KPMG Peat Marwick LLP as the Corporation's
auditors for the year ending December 31, 1996.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To transact any and all other business, including adjournment of the
meeting, which may properly come before the meeting or any adjournment
thereof.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(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 NOMINEE LISTED, "FOR" THE ADOPTION OF
THE A.P. GREEN INDUSTRIES, INC. 1996 LONG-TERM PERFORMANCE PLAN, "FOR" THE
RATIFICATION OF KPMG PEAT MARWICK LLP AS THE CORPORATION'S AUDITORS FOR THE
YEAR ENDING DECEMBER 31, 1996 AND "FOR" THE GRANT OF DISCRETIONARY AUTHORITY.
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
------------------------------------------
<PAGE>
A.P. GREEN INDUSTRIES, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
May 9, 1996
The undersigned hereby appoints LASALLE NATIONAL TRUST, N.A., AS
TRUSTEE OF THE A.P. GREEN INDUSTRIES, INC. EMPLOYEE STOCK OWNERSHIP PLAN, as
proxy, 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 9, 1996, 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 the nominee listed below [ ] WITHHOLD AUTHORITY to vote for
the nominee listed below
DANIEL R. TOLL
2. To act upon a proposal to adopt the A.P. Green Industries, Inc. 1996
Long-Term Performance Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To ratify the appointment of KPMG Peat Marwick LLP as the Corporation's
auditors for the year ending December 31, 1996.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To transact any and all other business, including adjournment of the
meeting, which may properly come before the meeting or any adjournment
thereof.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(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 NOMINEE LISTED, "FOR" THE ADOPTION OF
THE A.P. GREEN INDUSTRIES, INC. 1996 LONG-TERM PERFORMANCE PLAN, "FOR" THE
RATIFICATION OF KPMG PEAT MARWICK LLP AS THE CORPORATION'S AUDITORS FOR THE
YEAR ENDING DECEMBER 31, 1996 AND "FOR "THE GRANT OF DISCRETIONARY AUTHORITY.
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
------------------------------------
<PAGE>
A.P. GREEN INDUSTRIES, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
May 9, 1996
The undersigned hereby appoints P.F. HUMMER, D.E. LASATER 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 9, 1996, 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 the nominee listed below [ ] WITHHOLD AUTHORITY to vote for
the nominee listed below
DANIEL R. TOLL
2. To act upon a proposal to adopt the A.P. Green Industries, Inc. 1996
Long-Term Performance Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To ratify the appointment of KPMG Peat Marwick LLP as the Corporation's
auditors for the year ending December 31, 1996.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To transact any and all other business, including adjournment of the
meeting, which may properly come before the meeting or any adjournment
thereof.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(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 NOMINEE LISTED, "FOR" THE ADOPTION OF
THE A.P. GREEN INDUSTRIES, INC. 1996 LONG-TERM PERFORMANCE PLAN, "FOR" THE
RATIFICATION OF KPMG PEAT MARWICK LLP AS THE CORPORATION'S AUDITORS FOR THE
YEAR ENDING DECEMBER 31, 1996 AND "FOR" THE GRANT OF DISCRETIONARY AUTHORITY.
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
------------------------------------------
<PAGE>
