GREEN A P INDUSTRIES INC
DEF 14A, 1997-04-07
STRUCTURAL CLAY PRODUCTS
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                            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

[ ] Confidential,  for  Use  of the  Commission  only  (as  permitted  by  Rule
       14a-6(e)(2))

[X] Definitive Proxy Statement

[ ] Definitive Additional Materials

[ ] Soliciting Material Pursuant to 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, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2) or
       Item 22(a)(2) of Schedule 14A.

[ ] $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 (Set forth the amount on which the filing fee
       is calculated and state how it was determined): N/A

    4) Proposed maximum aggregate value of transaction:  N/A

    5) Total fee paid:  N/A

[ ] Fee paid previously with preliminary materials.

[ ] Check box  if any part of the  fee is offset as  provided  by  Exchange  Act
    Rule  0-11(a)(2)  and identify the filing for which the  offsetting  fee was
    paid  previously.  Identify the previous  filing by  registration  statement
    number, or the Form or Schedule and the date of its filing.

    1) Amount Previously Paid:  N/A    

    2) Form, Schedule or Registration Statement No.:  N.A.

    3) Filing Party:  N/A

    4) Date Filed:  N/A

<PAGE>

                           A.P. GREEN INDUSTRIES, INC.
                                 GREEN BOULEVARD
                             MEXICO, MISSOURI 65265


                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
                             TO BE HELD MAY 8, 1997


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 8, 1997, 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 two
           years.

        2. To elect two Class III directors to hold office for a term of three
           years.

        3. To ratify the appointment of KPMG Peat Marwick LLP as A.P.  Green's
           auditors for the year ending December 31, 1997.

        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 21,  1997 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 7, 1997


<PAGE>


                           A.P. GREEN INDUSTRIES, INC.
                                 GREEN BOULEVARD
                             MEXICO, MISSOURI 65265


                                 PROXY STATEMENT
                                       FOR
                         ANNUAL MEETING OF STOCKHOLDERS
                             TO BE HELD MAY 8, 1997

                                -----------------

                               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 8,
1997, 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
7, 1997.

         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 21, 1997
are  entitled  to notice of, and to vote at, the Annual  Meeting.  On such date,
there were 8,024,858 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.



<PAGE>


                 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:

                                       NUMBER OF SHARES   PERCENT OF OUTSTANDING
NAME AND ADDRESS OF BENEFICIAL OWNER  BENEFICIALLY OWNED     COMMON STOCK (1)
- ------------------------------------  ------------------  ----------------------

Dimensional Fund Advisors Inc.            513,494 (2)             6.40%
1299 Ocean View, 11th Floor
Santa Monica, California  90401

Franklin Resources, Inc.                  550,900 (3)             6.87%
777 Mariners Island Blvd.
San Mateo, California 94404

LaSalle National Trust, N.A.              480,060 (4)             5.98%
135 South LaSalle Street
Chicago, Illinois 60603

Mercantile Bancorporation Inc.          1,012,546 (5)            12.62%
One Mercantile Center
St. Louis, Missouri 63101

SoGen International Fund, Inc.            603,000 (6)             7.51%
Societe Generale Asset
  Management Corp.
1221 Avenue of the Americas
New York, New York 10020

- ---------

(1)      The percentage  calculations  are based upon  8,024,858  shares of A.P.
         Green  Common  Stock that were issued and  outstanding  as of March 21,
         1997.

(2)      The shares  reported as beneficially  owned are based upon  information
         contained  in a Schedule  13G dated  February  5, 1997,  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 332,100 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 191,394 shares reported above.

(3)      The shares  reported as beneficially  owned are based upon  information
         contained  in a Schedule 13G dated  February  13, 1997,  which has been
         filed with the Securities and Exchange Commission by a group consisting
         of Franklin Resources Inc., Charles B. Johnson,  Rupert H. Johnson, Jr.
         and Franklin Advisory  Services,  Inc. The Schedule 13G states that the
         550,900 shares  reported as beneficially  owned by Franklin  Resources,
         Inc. are owned by one or more open or closed-end  investment  companies
         or other  managed  accounts  which are advised by  investment  advisory
         subsidiaries of Franklin Resources,  Inc.,  including Franklin Advisory
         Services,  Inc. Franklin Advisory  Services,  Inc. reported sole voting
         and  investment  power with regard to all 550,900 shares  reported.  In
         addition,  Charles B.  Johnson and Rupert H.  Johnson,  Jr. each own in
         excess of 10% of the  outstanding  common stock of Franklin  Resources,
         Inc. and may be deemed to be the beneficial  owners of securities  held
         by persons  advised by Franklin  Resources,  Inc. or its  subsidiaries.
         Each of Franklin Resources, Inc., its advisory subsidiaries, Charles B.
         Johnson  and  Rupert  H.  Johnson,  Jr.  have  specifically  disclaimed
         beneficial ownership of all shares reported in the Schedule 13G.


                                      - 2 -

<PAGE>


(4)      The shares  reported as beneficially  owned are based upon  information
         contained  in a Schedule 13G dated  February  12, 1997,  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 341,010  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.

(5)      The shares  reported as beneficially  owned are based upon  information
         contained  in a Schedule 13G dated  February  12, 1997,  which has been
         filed with the  Securities  and Exchange  Commission.  The Schedule 13G
         states  that  1,012,546  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  74  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.

(6)      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
         603,000 shares reported.


                              ELECTION OF DIRECTORS

         At the Annual Meeting, one Class II director will be elected for a term
of two years or until his successor is duly elected and qualified, and two Class
III  directors  will be  elected  for a term  of  three  years  or  until  their
respective  successors  are duly  elected  and  qualified.  Except as  otherwise
directed by the  stockholder  on the Proxy Card, 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 Mack G.  Nichols  as a Class II
director and William F. Morrison and James M. Stolze as Class III directors.  In
the election of the Class II director and the Class III directors, respectively,
the nominee  receiving the highest number of votes will be elected as a Class II
director,  and the two nominees  receiving  the highest  number of votes will be
elected as Class III  directors.  Mr.  Morrison is  currently a director of A.P.
Green.  If for any reason any of the nominees  become  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 Mack G. Nichols
as a Class II director and William F.  Morrison and James M. Stolze as Class III
directors.

         The name, age, principal occupation or position and other directorships
with  respect to each  nominee  and the  directors  whose  terms of office  will
continue  after the Annual  Meeting  are 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 TWO YEARS EXPIRING IN 1999

MACK G. NICHOLS,  58 - Nominee for Director;  Director,  The Boatmen's  National
Bank of St. Louis;  President and Chief  Operating  Officer,  Mallinckrodt  Inc.
since 1995; Senior Vice President, Mallinckrodt

                                      - 3 -

<PAGE>


Group,  Inc.  from  1993  to  1995;   President  and  Chief  Executive  Officer,
Mallinckrodt Chemical, Inc. from 1989 to 1995.

      CLASS III - TO BE ELECTED FOR A TERM OF THREE YEARS EXPIRING IN 2000

JAMES M. STOLZE,  53 - Nominee for Director;  Vice President and Chief Financial
Officer of MEMC Electronic  Materials,  Inc. since June 1995; Partner, KPMG Peat
Marwick LLP from June 1977 to June 1995.

WILLIAM F.  MORRISON,  59 - 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 II - TO CONTINUE IN OFFICE UNTIL 1999

DANIEL R. TOLL, 69 - Director since 1988; Corporate and Civic Director; Director
of Brown Group, Inc.,  Mallinckrodt,  Inc., Kemper National Insurance Companies,
NICOR,  Inc.,  Lincoln National  Convertible  Securities Fund, Inc., and Lincoln
National Income Fund, Inc.

                   CLASS I - TO CONTINUE IN OFFICE UNTIL 1998

PAUL F.  HUMMER II, 55 -  Director  since  1988;  Chairman  of the Board,  Chief
Executive Officer and President of A.P. Green.

P. JACK  O'BRYAN,  61 -  Director  since  1995;  President  and Chief  Executive
Officer, United States Gypsum Company; Executive Vice President, Operations, 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 1996,  the Board of  Directors of A.P.  Green met five 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 1996.

         The  Board of  Directors  has a  standing  Executive  Committee,  Audit
Committee, and Compensation and Organization Committee.

         During 1996,  the  Executive  Committee  consisted of Paul F. Hummer II
(Chairman),  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 1996.

         The  members of the Audit  Committee  during  1996 were  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

                                      - 4 -

<PAGE>


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 1996.

         During 1996, the Compensation  and Organization  Committee was composed
of Donald E. Lasater (Chairman), Daniel R. Toll, William F. Morrison and P. 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 make
recommendations to the Board of Directors regarding the management organization,
succession and development.  The  Compensation  and  Organization  Committee met
three times during 1996.

                                 DIRECTOR'S FEES

         During fiscal 1996, directors who were not also employees of A.P. Green
received an annual retainer of $16,000 and 375 shares (on a pre-split  basis) 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.


                                      - 5 -

<PAGE>


                        SECURITY OWNERSHIP BY MANAGEMENT

         The following  table  indicates,  as of March 21, 1997,  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                       64,757(2)                   (3)
Max C. Aiken                         125,088(2)                 1.54%
Michael B. Cooney                    100,096(2)                 1.23%
Paul F. Hummer II                    263,614(2)                 3.20%
William F. Morrison                    5,050                      (3)
Mack G. Nichols                           --                      (3)
P. Jack O'Bryan                        3,850                      (3)
Gary L. Roberts                       84,550(2)                 1.04%
James M. Stolze                           --                      (3)
Daniel R. Toll                         6,250                      (3)
All directors and
  executive officers
  as a group (16 persons)            883,707(2)                10.15%



(1)      Based upon  8,024,858  shares of A.P.  Green  Common  Stock  issued and
         outstanding as of March 21, 1997 and, for each executive officer or the
         group,  the number of shares  subject  to options that may be  acquired
         within 60 days upon exercise of the option.

(2)      Totals include 51,000,  105,000,  84,000,  213,000,  75,000 and 679,500
         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.


                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 1996,
the Committee  was composed of four  non-employee  directors,  Donald E. Lasater
(Chairman), William F. Morrison, Daniel R. Toll and P. Jack O'Bryan.

         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.


                                      - 6 -

<PAGE>


         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
officer to the salaries of other  executive  officers  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  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 14 months after the prior
increase depending on A.P. Green's financial performance during such time.

         Annually, the committee decides on several near-term objectives for the
Chief Executive Officer.  Annually, the Chief Executive's  performance is based,
in part, upon his success in achieving those objectives. 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 for the corporate,  lime,  international and refractories
groups.  In  1996,  these  financial  performance  objectives  were  based  upon
operating earnings.  In 1997, these financial  performance  objectives are based
upon return on capital employed.  Additionally,  a number of participants in the
Management Incentive Plan have been given two personal goals designed to support
the Company's return on capital employed target.  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%.

                                      - 7 -

<PAGE>


         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 45% 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  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, the Committee adopted the 1993 Performance Plan, which was
approved  by the  stockholders  at the  Annual  Meeting in May 1993 and the 1996
Performance  Plan,  which was approved by the stockholders at the Annual Meeting
in May 1996.  In February  1993,  the  Committee  also approved a grant of stock
options to executive  officers.  These stock options differed 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: $7.67; $8.50; $9.33; $10.00 and $11.00. 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. As of December 31, 1996, 80% of the options were exercisable and will
remain  exercisable  for ten years from the date of the grant.  Achievement of a
trading price of $10.00 per share  represented an increase of 63% in the trading
price of the Company's stock from the date the Plan was adopted.

         The Committee  believes  that the options  granted in 1993 provided 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.

         Since  the 1993  grants  were  designed  to cover a three to four  year
period,  no  long-term  compensation  grants or awards  have  been  provided  to
executive officers generally from the 1993 stock option grants through 1996. The
Committee  has recently  requested  that a  compensation  consultant  review the
Company's long-term compensation program. The Committee expects that this review
will be completed by the time of its November 1997 meeting.

                                      - 8 -

<PAGE>


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 55% 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 was
structured in the same manner as the options for each of the other participating
executive  officers  and  has  been,  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


                                      - 9 -

<PAGE>


                       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:

<TABLE>

                           SUMMARY COMPENSATION TABLE

                                                              LONG TERM
                                    ANNUAL COMPENSATION      COMPENSATION
                                    -------------------      ------------
<CAPTION>
                                                                                  All other
NAME AND PRINCIPAL POSITION      YEAR  SALARY($)  BONUS($)  OPTIONS/SARS(#)  compensation($)(1)
- ---------------------------      ----  ---------  --------  ---------------  ------------------
<S>                              <C>   <C>        <C>           <C>              <C>
Paul F. Hummer II,               1996  $ 334,186  $     --      -0-/-0-           $  3,751
Chairman of the Board,           1995    302,079    75,600      -0-/-0-              4,926
President and Chief Executive    1994    274,600    96,000      -0-/-0-              4,516
Officer

Max C. Aiken,                    1996    183,328        --      -0-/-0-              3,810
Executive Vice President         1995    163,992    32,832      -0-/-0-              5,471
                                 1994    146,742    45,760      -0-/-0-              5,678

Michael B. Cooney,               1996    147,081        --      -0-/-0-              3,517
Senior Vice President Law/       1995    141,496    26,271      -0-/-0-              4,724
Administration and Secretary     1994    135,496    37,240      -0-/-0-              5,474

Gary L. Roberts,                 1996    148,678        --      -0-/-0-              3,516
Vice President, Chief Financial  1995    141,132    25,515      -0-/-0-              4,678
Officer and Treasurer            1994    134,000    36,120      -0-/-0-              5,450

Jurgen H. Abels,                 1996    118,842    19,541      -0-/-0-              2,981
Vice President, International    1995    113,838    28,680      -0-/-0-              3,676
                                 1994    107,506    25,440      -0-/-0-              3,725
- ---------
<FN>
(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, 1996, 1995 and 1994.
</FN>
</TABLE>


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  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
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

                                     - 10 -

<PAGE>


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,
1996. 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.............       213,000/30,000            596,040/107,400

Max C. Aiken..................       105,000/12,000            279,900/42,960

Michael B. Cooney.............       84,000/9,000              209,224/32,220

Gary L. Roberts...............       75,000/9,000              211,500/32,220

Jurgen H. Abels ..............       51,000/6,000              131,500/21,480

- ---------
(1)      Based upon a price per share  of $9.75, being the last reported trading
         price of A.P. Green Common Stock on December 31, 1996.


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 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

                                     - 11 -

<PAGE>


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 1996, 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.....   9,648   19,297   28,945   38,593   48,241   57,890   67,538
     200,000.....  13,055   26,110   39,165   52,221   65,276   78,331   91,386
     250,000.....  16,462   32,924   49,386   65,848   82,310   98,772  115,234
     300,000.....  19,869   39,738   59,607   79,476   99,344  119,213  139,082
     350,000.....  23,276   46,552   69,827   93,103  116,379  139,655  162,930
     450,000.....  30,090   60,179   90,269  120,358  150,448  180,537  210,627

- ---------
(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, 1996 are as follows:
         Mr. Hummer,  8 years;  Mr. Aiken, 22 years;  Mr. Cooney,  8 years;  Mr.
         Roberts, 7 years; and Mr. Abels, 12 years.

(3)      The maximum amount payable under the Retirement  Plan is limited by the
         Code to $125,000  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.



                                     - 12 -

<PAGE>


                      STOCKHOLDER RETURN PERFORMANCE GRAPH

          The  following  graph  compares the quarterly  cumulative  stockholder
returns,  including the reinvestment of dividends,  of A.P. Green for the period
beginning  January 1, 1992 and ending December 31, 1996 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.

                               [Performance Graph]

                             CUMULATIVE TOTAL RETURN
            Based on reinvestment of $100 beginning December 31, 1991

                                Dec-91  Dec-92  Dec-93  Dec-94  Dec-95  Dec-96
                                ------  ------  ------  ------  ------  ------
A.P. Green Industries, Inc.      $100    $117    $202    $213    $228    $232
S&P 500 (Registered Trademark)   $100    $108    $118    $120    $165    $203
Custom Composite Index           $100    $ 90    $125    $124    $154    $176

The Custom  Composite  Index consists of Pfizer Inc. (thru  12/31/92),  Minerals
Technologies Inc. (beginning 12/31/92),  Dresser Industries Inc. (thru 9/30/92),
Global Industrial  Technologies Inc. (beginning  9/30/92),  United States Lime &
Mineral, and Dravo Corp.


                                     - 13 -

<PAGE>


                 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  LLP  served as A.P.  Green's  independent  auditors  for the year ended
December 31, 1996. The Board of Directors has appointed KPMG Peat Marwick LLP as
auditors for A.P. Green for the current year ending  December 31, 1997,  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.

                          COMPLIANCE WITH SECTION 16(A)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

         Section  16(a) of the  Securities  Exchange Act of 1934  requires  A.P.
Green's directors and executive officers ("Reporting  Persons") to file with the
Securities and Exchange  Commission  initial reports of ownership and reports of
changes in ownership of A.P.  Green Common Stock.  Other than the initial filing
on Form 3 and the annual filing on Form 5 for each of Ronald L. Bramblett,  Vice
President,  Human  Resources,  Frank  T.  Cordie,  Vice  President,   Refractory
Manufacturing and John L. Kelsey,  Vice President,  Marketing,  each of whom was
first  elected as an  officer of the  Company  effective  March 1, 1996,  to the
knowledge  of  management,  based  solely on its  review  of the  copies of such
reports furnished to A.P. Green, during the fiscal year ended December 31, 1996,
all Section 16(a) filing requirements were met.


                            PROPOSALS OF STOCKHOLDERS

         Proposals of  stockholders  intended to be presented at the 1998 Annual
Meeting of  Stockholders  must be received by the Secretary of A.P. Green by not
later  than  December  5,  1997 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 7, 1997



                                     - 14 -

<PAGE>


                           A.P. GREEN INDUSTRIES, INC.
                    PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
                                   May 8, 1997

                  The undersigned  hereby appoints P.F. HUMMER II, D.R. TOLL 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 8, 1997,  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 one Class II  director  to hold  office  for a term of two
    years or until his successor is duly elected and qualified.

    |_|  FOR the nominee listed below   |_|  WITHHOLD AUTHORITY to vote for
                                             the nominee listed below

                                 MACK G. NICHOLS

2.  Election of two Class III  directors to hold office for a term of three
    years  or until  their  respective  successors  are  duly  elected  and
    qualified.


    |_|  FOR the nominees listed below  |_|  WITHHOLD AUTHORITY to vote for
                                             the nominees listed below

                               WILLIAM F. MORRISON
                                 JAMES M. STOLZE

     (INSTRUCTION: To withhold authority to vote for an individual nominee,
             write that nominee's name in the space provided below)




3.  To ratify the  appointment  of KPMG Peat  Marwick  LLP as the  Corporation's
    auditors for the year ending December 31, 1997.

      |_|  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)



<PAGE>


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 ALL OF THE  NOMINEES FOR DIRECTOR  LISTED IN ITEMS 1
AND 2, "FOR" THE  RATIFICATION  OF KPMG PEAT  MARWICK  LLP AS THE  CORPORATION'S
AUDITORS  FOR THE  YEAR  ENDING  DECEMBER  31,  1997  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
                              --------------------------------------------------
















                                     - 16 -


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