<PAGE> 1
================================================================================
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] 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 Rule 14a-11(c) or Rule 14a-12
</TABLE>
EASCO, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
(NOT APPLICABLE)
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies: .......
(2) Aggregate number of securities to which transaction applies: ..........
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ............
(4) Proposed maximum aggregate value of transaction: ......................
(5) Total fee paid: .......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ...............................................
(2) Form, Schedule or Registration Statement No.: .........................
(3) Filing Party: .........................................................
(4) Date Filed: ...........................................................
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<PAGE> 2
[EASCO, INC. LOGL]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The Annual Meeting of Stockholders of Easco, Inc., a Delaware corporation
(the "Company"), will be held at The Wick-Pollack Inn, 603 Wick Avenue,
Youngstown, Ohio, on May 9, 1997, at 10:00 a.m., local time, for the following
purposes:
1. To elect two directors to hold office for a term of three years;
2. To ratify the appointment of Deloitte & Touche LLP as independent
auditors for the Company for 1997; and
3. To transact such other business as may properly be presented at the
meeting.
A proxy statement with respect to the annual meeting accompanies and forms
a part of this Notice. A form of proxy and the annual report of the Company for
the fiscal year ended December 31, 1996 also accompany this proxy statement.
By order of the Board of Directors.
TERRY D. SMITH
Executive Vice President and Chief
Financial
Officer, Secretary and Treasurer
706 South State Street
Girard, Ohio 44420
March 31, 1997
YOUR VOTE IS IMPORTANT
PLEASE MARK, SIGN, AND DATE YOUR PROXY AND RETURN
IT PROMPTLY IN THE ENCLOSED ENVELOPE WHETHER OR NOT
YOU INTEND TO ATTEND THE MEETING.
<PAGE> 3
[EASCO, INC. LOGO]
706 SOUTH STATE STREET
GIRARD, OHIO 44420
PROXY STATEMENT
The enclosed proxy is solicited on behalf of the Board of Directors of the
Company for use at the Annual Meeting of Stockholders of the Company to be held
on May 9, 1997, and any adjournments thereof. This proxy statement and
accompanying proxy are first being sent to stockholders on or about March 31,
1997.
Shares represented by an effective proxy given by a stockholder will be
voted as directed by the stockholder. If a properly signed proxy form is
returned to the Company and is not marked, it will be voted in accordance with
the recommendation of the Board of Directors on all proposals. A stockholder
giving a proxy may revoke it at any time prior to the voting of the proxy by
giving written notice to the Secretary of the Company, by executing a later
dated proxy or by attending the meeting and voting in person.
The Company's common stock, $.01 par value per share (the "Common Stock"),
is the only issued and outstanding class of stock. Only stockholders of record
at the close of business on March 24, 1997 are entitled to notice of and to vote
at the meeting. At the close of business on March 24, 1997, the Company had
10,409,670 shares of Common Stock outstanding and entitled to vote. Each share
of Common Stock of the Company is entitled to one vote. A list of stockholders
entitled to vote at the meeting will be kept at the stock transfer department of
Chemical Bank for a period of 10 days prior to the meeting.
PROPOSAL 1 -- ELECTION OF DIRECTORS
The Board of Directors of the Company consists of three classes, as nearly
equal in number as possible. One of the three classes, comprising approximately
one-third of the directors, is elected each year to succeed the directors whose
terms are expiring. The number of directors of the Company, as determined by the
Board under Article X of the Company's Amended and Restated Certificate of
Incorporation, is currently nine, three of whom serve in Class II. Effective
upon the retirement of Tom H. Barrett, a Class II director whose term expires at
the Annual Meeting, the number of directors will be reduced to eight, two of
whom will serve in Class II. Shares may not be voted for a greater number of
nominees than the two nominees for Class II director listed below. Directors
hold office until the annual meeting for the year in which their terms expire
and until their successors are elected and qualified unless, prior to that time,
they have resigned, retired, or otherwise left office.
The nominees for whom the enclosed proxy is intended to be voted are set
forth below. The Company does not expect either of these nominees to be
unavailable for election, but if such a situation should arise, the proxy will
be voted in accordance with the best judgment of the proxyholder unless a
stockholder has directed otherwise. Under Delaware law and the Company's bylaws,
directors are elected by a plurality of the votes cast by holders of the shares
of Common Stock present in person or represented by proxy at the meeting and
entitled to vote for the election of directors. Shares represented at the
meeting in person or by proxy but withheld or otherwise not cast for the
election of directors will have no effect on the outcome of the election.
<PAGE> 4
NOMINEES FOR ELECTION AS CLASS II DIRECTORS --
TERM EXPIRING AT 2000 ANNUAL MEETING OF STOCKHOLDERS
<TABLE>
<CAPTION>
AGE AS OF
NAME 3/24/97 BUSINESS EXPERIENCE AND OTHER INFORMATION
- ---------------------- --------- ---------------------------------------------------------
<S> <C> <C>
Norman E. Wells, Jr. 48 Mr. Wells joined the Company in November 1996 as
President and Chief Executive Officer of Easco, Inc. and
Easco Corporation ("Easco"), a subsidiary of the Company.
Before joining the Company, Mr. Wells served as President
and Chief Executive Officer of CasTech Aluminum Group,
Inc. ("CasTech"), a producer of continuous cast aluminum
sheet metal, from March 1993 to November 1996. Prior
thereto, Mr. Wells held other executive positions at
CasTech, and he has held a variety of positions in the
aluminum industry since 1975. He has been a director of
the Company since February 1997.
W. Richard Bingham 61 Mr. Bingham co-founded American Industrial Partners
Management Company, Inc. ("AIPM") and has been a director
and officer of the firm since 1989. He is also a general
partner of American Industrial Partners, L.P. ("AIP-LP"),
the general partner of American Industrial Partners
Capital Fund, L.P. ("AIP"). Prior to co-founding AIPM,
Mr. Bingham was a Managing Director of Shearson Lehman
Brothers from 1984 until late 1987. Prior to joining
Shearson Lehman Brothers, Mr. Bingham was Director of the
Corporate Finance Department, a member of the Board, and,
most recently, head of Mergers and Acquisitions at Lehman
Brothers Kuhn Loeb Inc. Mr. Bingham is a director of
Sweetheart Holdings Inc., Day International, Inc. and RBX
Group, Inc. He has been a director of the Company since
1993.
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH NOMINEE
FOR DIRECTOR NAMED ABOVE.
CLASS III DIRECTORS CONTINUING IN OFFICE --
TERM EXPIRES AT 1998 ANNUAL MEETING OF STOCKHOLDERS
<TABLE>
<CAPTION>
AGE AS OF
NAME 3/24/97 BUSINESS EXPERIENCE AND OTHER INFORMATION
- ---------------------- --------- ---------------------------------------------------------
<S> <C> <C>
Samuel H. Smith, Jr. 66 Mr. Smith was Vice President for Planning and
Acquisitions for the Van Dorn Company, a packaging and
plastics machinery company, from 1988 until 1990. Mr.
Smith retired from Van Dorn in 1990 and has been a member
and director of AIPM's executive officer association
since 1990. He has been a director of the Company since
1993.
Robert Cizik 65 Mr. Cizik is Chairman of the Board of the Company and has
held that position and served on the Board since January
1997. He served as Chairman and Chief Executive Officer
of Cooper Industries, Inc., a diversified international
manufacturing company, from 1975 to 1996. Mr. Cizik
joined American Industrial Partners Corporation (an
affiliate of AIPM) as a director in 1996. Mr. Cizik is a
director of Air Products and Chemicals, Inc., Harris
Corporation, PanEnergy Corp. and Temple-Inland, Inc.
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
AGE AS OF
NAME 3/24/97 BUSINESS EXPERIENCE AND OTHER INFORMATION
- ---------------------- --------- ---------------------------------------------------------
<S> <C> <C>
Gene E. Little 53 Mr. Little has been Vice President-Finance of The Timken
Company ("Timken"), a manufacturer of highly engineered
bearings and alloy steel, since 1992 and has been
Treasurer of Timken since 1990. Mr. Little is a trustee
of Aultman Hospital and the Northeastern Ohio
Universities College of Medicine Education Foundation. He
has been a director of the Company since 1995.
</TABLE>
CLASS I DIRECTORS CONTINUING IN OFFICE --
TERM EXPIRES AT 1999 ANNUAL MEETING OF STOCKHOLDERS
<TABLE>
<CAPTION>
AGE AS OF
NAME 3/24/97 BUSINESS EXPERIENCE AND OTHER INFORMATION
- ---------------------- --------- ---------------------------------------------------------
<S> <C> <C>
Theodore C. Rogers 62 Mr. Rogers co-founded AIPM and has been a director and
officer of the firm since 1989. He is also a general
partner of AIP-LP, the general partner of AIP. From 1980
to 1987, he served as Chairman, President and Chief
Executive Officer of NL Industries, Inc., a petroleum
service and chemical company. Mr. Rogers is a director of
Sweetheart Holdings Inc., Day International, Inc., RBX
Group, Inc. and Derby International. He has been a
director of the Company since 1992.
Robert J. Klein 32 Mr. Klein has been an employee of AIPM since 1992. From
1991 to 1992, he was an associate at The First Boston
Corporation and prior thereto was an associate with
Acadia Partners, L.P. Mr. Klein is a director of RBX
Group, Inc. He has been a director of the Company since
1993.
Lawrence W. Ward, Jr. 44 Mr. Ward has been an employee of American Industrial
Group, an affiliate of AIPM, since May 1992. From 1989 to
1992, he was Vice President and Chief Financial Officer
of Plantronics, Inc., a telecommunications equipment
company. Mr. Ward is a director of Day International,
Inc. and RBX Group, Inc. He has been a director of the
Company since 1993.
</TABLE>
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
There were six meetings of the Company's Board of Directors during the year
ended December 31, 1996. During 1996, all incumbent directors attended at least
75% of the meetings of the Board of Directors and the committees thereof on
which they served, except for Messrs. Barrett and Bingham.
The Board of Directors has two standing committees: the Compensation
Committee and the Audit Committee. The Board of Directors does not have a
nominating committee. The functions normally performed by a nominating committee
are performed by the Board of Directors.
The duties of the Audit Committee are to oversee actions taken by the
Company's independent auditors, recommend the engagement of independent auditors
and review the Company's internal audits. The members of the Audit Committee are
Messrs. Little (Chairman), Smith, Rogers, Bingham and Cizik. The Audit Committee
met twice during 1996.
The duties of the Compensation Committee are to review and recommend to the
Board of Directors the compensation to be paid to the executive officers of the
Company and make awards under the Stock Option Plan. The members of the
Compensation Committee are Messrs. Klein and Ward. The Compensation Committee
met once during 1996.
3
<PAGE> 6
COMPENSATION OF DIRECTORS
Except for Messrs. Wells, Smith and Little, the directors of the Company
are officers, employees or affiliates of AIPM (or an affiliate of AIPM), to
which Easco pays fees for advisory and management services, and they do not
receive any direct compensation from the Company. See "Executive Compensation --
Compensation Committee Interlocks and Insider Participation." Mr. Little
receives an annual directors' fee of $10,000 plus a $1,000 annual fee for
serving as Chairman of the Audit Committee and a $500 fee for each meeting
attended. Mr. Smith receives directors' and other advisory fees from Easco in
the amount of $1,500 per month plus $500 for each meeting attended. Mr. Cizik
receives $100,000 per year from Easco for his services as Chairman of the Board
of Easco.
EXECUTIVE COMPENSATION
SUMMARY
The following table provides certain summary information concerning
compensation paid or accrued by Easco to or on behalf of Easco's present and
former Chief Executive Officers and each of Easco's four other most highly
compensated executive officers (collectively, the "Named Officers") for the
years ended December 31, 1996, 1995 and 1994.
In November, 1996, the Company realigned its executive management group,
resulting in Norman E. Wells, Jr. joining the Company as its new President and
Chief Executive Officer. The realignment was largely completed by the end of
1996. Mr. Wells was joined by Terry D. Smith, the Company's new Executive Vice
President, Chief Financial Officer, Secretary and Treasurer; Joseph M. Byers,
Vice President of Sales and Marketing; James R. McKeithan, Vice President of
Operations; and Lawrence J. Sax, Vice President of Raw Materials. As a result of
the signing bonuses paid in 1996 to attract this team of managers to the Company
(see "Executive Compensation Report of the Compensation Committee of the Board
of Directors"), Messrs. Byers, Smith and Sax are included in the list of Named
Officers for the year. The signing bonuses included cash and Common Stock (for
which the executives paid par value). Mr. Wells elected to receive a portion of
his signing bonus (that he otherwise could have taken in cash) in 70,000 shares
of Common Stock, as further described in the footnotes to the table below. These
shares and all cash signing bonuses identified below are forfeitable if the
executive officer leaves the Company within two years, except under limited
circumstances. See "Employment and Severance Arrangements."
4
<PAGE> 7
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------------------ ------------------------------
OTHER ANNUAL RESTRICTED SECURITIES ALL OTHER
COMPENSATION STOCK UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($)(1) ($)(2) AWARDS($)(3) OPTIONS/SARS(#) ($)(#)(4)
- ---------------------------- ---- --------- ----------- ------------ ------------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Norman E. Wells, Jr.,
President and Chief 1996 28,628 597,500 574,000 420,000 300,000 322
Executive Officer of 1995 -- -- -- -- -- --
Easco, Inc. and Easco(5) 1994 -- -- -- -- -- --
Terry D. Smith,
Executive Vice President, 1996 15,795 100,000 71,750 -- 87,500 100
Chief Financial Officer, 1995 -- -- -- -- -- --
Secretary and Treasurer of 1994 -- -- -- -- -- --
Easco, Inc. and Easco (5)
Joseph M. Byers,
Vice President of Sales 1996 13,712 100,000 71,750 -- 87,500 243
and Marketing of Easco (5) 1995 -- -- -- -- -- --
1994 -- -- -- -- -- --
Lawrence J. Sax,
Vice President of Raw 1996 -- 100,000 90,500 -- 87,500 --
Materials of Easco (6) 1995 -- -- -- -- -- --
1994 -- -- -- -- -- --
Michael M. Hagerty,
Former President and Chief 1996 235,000 -- -- -- -- 297,964
Executive Officer of 1995 235,000 41,125 -- -- -- 9,286
Easco, Inc. and Easco (7) 1994 200,000 187,000 24,138 -- -- 5,277
Frank L. Rich,
Executive Vice President 1996 150,000 21,375 -- -- -- 6,007
of Administration of 1995 142,500 21,375 -- -- -- 4,660
Easco(8) 1994 133,250 104,000 -- -- 29,084 4,346
</TABLE>
- ---------------
(1) Represents (i) in the case of Mr. Wells a signing bonus of $597,500 in cash,
(ii) in the case each of Messrs. Sax, Smith and Byers, a signing bonus of
$100,000 in cash, and (iii) in the case of Messrs. Hagerty and Rich,
accruals under the Company's Cash Incentive Bonus Plan for bonuses earned in
1994, 1995 and (in the case of Mr. Rich) 1996, and paid in 1995, 1996 and
1997, respectively. As a condition to receiving their signing bonuses, each
of Messrs. Wells, Sax, Smith and Byers was required to enter into a
definitive employment agreement with Easco, which occurred on December 20,
1996 for Messrs. Wells, Smith and Byers and December 30, 1996 for Mr. Sax.
Messrs. Wells, Sax, Smith and Byers would be required to return to the
Company all or a portion of such signing bonuses if their employment is
terminated prior to the second anniversary of the payment thereof except
under limited circumstances. See "Employment and Severance Arrangements."
The Company's Cash Incentive Bonus Plan, under which Messrs. Hagerty and
Rich received bonuses, targeted bonuses as a percentage of salary, with 75%
of awards based on performance against corporate operating profit targets,
and 25% of awards at the Board's discretion (in the case of Mr. Hagerty) and
in the President's discretion (in the case of Mr. Rich).
(2) Represents (i) in the case of Mr. Wells, 100,000 shares of Common Stock
granted by the Board, (ii) in the case of Mr. Hagerty, relocation and moving
expenses (and related gross-ups for income taxes) and (iii) in the case of
each of Messrs. Sax, Smith and Byers, 12,500 shares of Common Stock granted
by the Board. The fair market value of each share of Common Stock granted to
Messrs. Wells, Sax, Smith and Byers was $5.75 ($7.25 in the case of Mr. Sax)
on the effective date of the grant. As a condition to receiving shares of
Common Stock, Messrs. Wells, Sax, Smith and Byers were required to enter
into definitive employment agreements with the Company.
(3) Represents 70,000 shares of Common Stock which Mr. Wells elected to receive
in lieu of cash as part of his signing bonus and which had a value of
$533,750 as of December 31, 1996. Mr. Wells would be required to return
these shares to the Company if his employment is terminated prior to the
second anniversary of his commencement of employment except under limited
circumstances. See "Employment and Severance Arrangements." Mr. Wells will
be entitled to receive any dividends paid on such shares, in the event the
Company declares a dividend on the Common Stock.
(4) Includes (i) contributions of $3,000, $4,700 and $2,667 for the account of
Mr. Hagerty for 1996, 1995 and 1994, respectively, and contributions of
$2,925, $2,850 and 2,665 for the account of Mr. Rich for 1996, 1995 and
1994, respectively, under the Company's Thrift Plan, pursuant to which Easco
matched employee contributions of the first 1% of eligible compensation and
one-half of the next 2% of such compensation, (ii) premiums of $322 for Mr.
Wells for 1996, premiums of $5,126, $5,126 and $2,610 for Mr. Hagerty for
1996, 1995 and 1994, respectively, premiums of $100 for Mr. Smith for 1996,
premiums of $243 for Mr. Byers for 1996, and premiums of $3,082, $1,810 and
$1,681 for Mr. Rich for 1996, 1995 and 1994, respectively, for
Company-provided life insurance benefits, (iii) $7,231 of
5
<PAGE> 8
accrued but unused vacation pay for Mr. Hagerty for 1996 and (iv) $282,607
paid to Mr. Hagerty upon cancellation of exercisable options held by him to
purchase 138,534 shares of Common Stock, in each case pursuant to the
severance agreement between Mr. Hagerty and the Company. See "Employment and
Severance Agreements."
(5) The Named Officer has been employed by the Company in the indicated office
since November 1996.
(6) Mr. Sax has served as Vice President of Raw Materials of Easco since
December 1996.
(7) Mr. Hagerty served as President and Chief Executive Officer of the Company
until November 1996.
(8) Mr. Rich served as Executive Vice President of Administration of Easco until
March 1997.
OPTION GRANTS IN 1996
The following table sets forth certain information as to options to
purchase Common Stock granted to the Named Officers during the fiscal year ended
December 31, 1996, and the potential realizable value of each grant of options,
assuming that the market price of the underlying Common Stock appreciates in
value during the ten-year option term at annualized rates of 0%, 5% and 10%.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- ---------------------------------------------------------------------------------------------------------------------------------
POTENTIAL REALIZABLE VALUE
PERCENT OF AT ASSUMED RATES OF
NUMBER OF TOTAL STOCK PRICE APPRECIATIONS
SECURITIES OPTIONS GRANTED EXERCISE OR MARKET PRICE FOR OPTION TERM($)(2)
UNDERLYING OPTIONS TO EMPLOYEES BASE PRICE ON DATE OF EXPIRATION -------------------------------
NAME GRANTED(#)(1) IN FISCAL YEAR ($/SH) GRANT($/SH) DATE 0% 5% 10%
- ----------------------------------- --------------- ----------- ------------ ---------- ------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Norman E. Wells,
Jr............. 150,000 16.8 3.00 6.00 11/25/06 450,000 1,017,000 1,881,000
150,000 16.8 6.00 6.00 11/25/06 0 567,000 1,431,000
Terry D. Smith... 18,750 2.1 3.00 6.00 11/25/06 56,250 127,125 235,125
18,750 2.1 6.00 6.00 11/25/06 0 70,875 178,875
50,000(3) 5.6 5.75 5.75 11/26/06 0 181,125 457,125
Joseph M.
Byers.......... 18,750 2.1 3.00 6.00 11/25/06 56,250 127,125 235,125
18,750 2.1 6.00 6.00 11/25/06 0 70,875 178,875
50,000(3) 5.6 5.75 5.75 11/26/06 0 181,125 457,125
Lawrence J.
Sax............ 18,750 2.1 3.00 6.00 11/25/06 56,250 127,125 235,125
18,750 2.1 6.00 6.00 11/25/06 0 70,875 178,875
50,000(3) 5.6 7.25 5.75 11/26/06 0 106,125 382,125
Michael M.
Hagerty........ 0 0 0 0 0 0 0 0
Frank L. Rich.... 0 0 0 0 0 0 0 0
</TABLE>
- ---------------
(1) Except as described in footnote (3), all options granted in 1996 become
exercisable in annual cumulative installments of 33 1/3%, commencing one
year from date of grant, with full vesting occurring on the third
anniversary of the date of grant. Vesting may be accelerated as a result of
certain changes in control of the Company.
(2) Potential realizable value is reported net of the option exercise price but
before taxes associated with exercise. These amounts assume annual
compounding results in total appreciation of 0% (0% per year), 63% (5% per
year) and 159% (10% per year). Actual gains, if any, on stock option
exercises and Common Stock are dependent on the future performance of the
Common Stock and overall market conditions. There can be no assurance that
the amounts reflected in this table will be achieved.
(3) Options exercisable for $5.75 per share ($7.25 per share in the case of Mr.
Sax) become exercisable on November 26, 2003 subject to continued
employment, but provide for accelerated vesting in annual cumulative
installments of 33 1/3% on January 1 of 1998, 1999 and 2000, provided that
the Company's performance satisfies certain specified criteria relating to
increases in earnings before interest, taxes, depreciation and amortization.
Vesting may be accelerated as a result of certain changes in control of the
Company.
FISCAL YEAR-END OPTION VALUES
The table below sets forth certain information for the fiscal year ended
December 31, 1996 concerning the exercise of options to purchase shares of
Common Stock by each of the Named Officers and the value of unexercised options
held by each of the Named Officers as of December 31, 1996.
6
<PAGE> 9
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES (1)
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FY-END(#)(2) AT FY-END($)(3)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------------------- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Norman E. Wells, Jr.............. 0 0 0 300,000 0 937,500
Terry D. Smith (4)............... 0 0 0 87,500 0 210,938
Joseph M. Byers (4).............. 0 0 0 87,500 0 210,938
Lawrence J. Sax (4).............. 0 0 0 87,500 0 135,938
Michael M. Hagerty(5)............ 0 0 0 0 0 0
Frank L. Rich.................... 0 0 19,390 9,695 0 0
</TABLE>
- ---------------
(1) The Stock Option Plan does not provide for grants of SARs, and the Company
has not granted any SARs outside the Stock Option Plan.
(2) Except as described in footnote (4), options become exercisable in three
equal annual installments, with accelerated vesting in the event of certain
changes in control of the Company.
(3) Represents the difference between (i) $7.625, the closing price of the
Common Stock on The Nasdaq Stock Market on December 31, 1996, as reported by
IDD Information Services TradeLine and (ii) the applicable option exercise
prices as specified under "Option Grants in Last Fiscal Year," and, with
respect to Mr. Rich, $9.03.
(4) Includes 50,000 options that become exercisable on November 26, 2003 subject
to continued employment, but which provide for accelerated vesting
exercisable in annual cumulative installments of 33-1/3% on January 1 of
1998, 1999 and 2000, provided that the Company's performance satisfies
certain specified criteria relating to increases in earnings before
interest, taxes, depreciation and amortization. Vesting may be accelerated
as a result of certain changes in control of the Company.
(5) Mr. Hagerty's options were cancelled pursuant to his severance agreement.
See "Employment and Severance Agreements."
SALARIED EMPLOYEE PENSION PLAN
The Pension Plan table set forth below shows total estimated annual
benefits payable upon retirement, computed on the basis of normal form of
retirement (five-year certain and continuous life annuity), to persons covered
under Easco's noncontributory defined benefit pension plan for eligible salaried
employees (the "Pension Plan") and supplemental executive retirement plan (the
"Supplemental Executive Retirement Plan") following various years of service
upon normal retirement at age 65.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE AT RETIREMENT
COVERED -------------------------------------------------------
REMUNERATION 15 20 25 30 35
- ------------ ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
$250,000 57,465 76,620 95,775 114,929 114,929
$300,000 69,360 92,480 115,800 138,719 138,719
$350,000 81,255 108,340 135,425 162,509 162,509
$400,000 93,150 124,200 155,250 186,299 186,299
$450,000 105,045 140,060 175,075 210,089 210,089
$500,000 116,940 155,920 194,900 233,879 233,879
$600,000 140,604 187,472 234,340 281,207 281,207
$700,000 164,384 219,192 273,990 328,787 328,787
</TABLE>
Benefits under the Pension Plan are based upon a percentage of average
monthly compensation during the 36 continuous months which produced the highest
compensation during the five years immediately prior to retirement. For purposes
of the Pension Plan, compensation consists of all salaries and wages, including
commissions and annual bonuses, which generally correspond to the annual salary
and bonus amounts reported in the Summary Compensation Table set forth above
under "Executive Compensation -- Sum-
7
<PAGE> 10
mary." Covered compensation for the Named Officers who began employment in 1996
will be based upon their salaries and annual bonuses as described under
"Employment and Severance Arrangements" described below. Benefits under the
Pension Plan may be paid (i) in a straight-life annuity over the life of the
employee; (ii) in joint and survivor annuities for the employee and spouse; or
(iii) in ten-year continuous and certain payments over the life of the employee
and/or the employee's spouse.
Annual benefits under the Pension Plan are subject to certain limitations
imposed by the Internal Revenue Code of 1986, as amended (the "Code"), but are
not reduced for Social Security benefits paid to participants. The Supplemental
Executive Retirement Plan provides to certain officers subject to these
limitations unfunded supplemental pension benefits equal to the difference
between the Internal Revenue Code limits and the benefits which otherwise would
be payable under the Pension Plan. Easco also maintains a second supplemental
executive retirement plan (the "Second Supplemental Executive Retirement Plan")
which is designed to supplement the benefits payable under certain other plans
of Easco and of the executives' prior employers. The annual benefit under the
Second Supplemental Executive Retirement Plan is equal to up to 50% of average
compensation during the 36 continuous months which produced the highest
compensation during the last five years prior to retirement, less any amounts
payable to the executive under any other pension plan maintained by Easco or any
pension plan maintained by any of the executive's previous employers. The Second
Supplemental Executive Retirement Plan has the effect of establishing a minimum
pension level for participating executives, regardless of years of service in
Easco's plan.
Maximum benefits under the plans are provided after 30 years of service.
Credited years of service at March 24, 1997 were 0 for Messrs. Wells, Sax, Smith
and Byers and 26 for Mr. Rich.
EMPLOYMENT AND SEVERANCE ARRANGEMENTS
Employment Agreements
Mr. Wells serves as President and Chief Executive Officer of Easco pursuant
to an employment agreement. Mr. Wells began employment with Easco on November
26, 1996, and the term of the agreement is indefinite until terminated by either
Easco or Mr. Wells. Mr. Wells' employment agreement provides for an annual base
salary of $290,000, an annual performance bonus (up to specified percentages of
salary determined on the basis of the Company's performance), such health,
dental, life and disability insurance coverage as the Company provides to its
senior executive employees generally, and severance benefits comprised of
continued salary and health benefits until the earlier of the second anniversary
(in the event of termination within six months following a Hostile Sale (as
defined in the agreement) of the Company or Easco) or the first anniversary of
termination without cause or until he commences other employment. In addition,
the agreement provides for special initial compensation comprised of a signing
bonus (consisting of $597,000 in cash and 70,000 shares of Common Stock, which
he elected to receive in lieu of cash), together with a stock grant of 100,000
shares of Common Stock, and options to purchase 300,000 shares of Common Stock
(one-half of which are exerciseable at $6.00 per share and one-half at $3.00 per
share). The agreement provides that Mr. Wells will be required to return all
cash and stock comprising the signing bonus component to the Company if his
employment is terminated (other than termination without cause, death or
disability or resignation with "good reason") prior to the second anniversary of
his commencement of employment. The agreement also provides that the Company
shall lend to Mr. Wells an amount up to Mr. Wells' additional 1996 federal and
state income taxes incurred by reason of the grant of 100,000 shares of Common
Stock at a market interest rate.
Mr. Sax serves as Vice President-Raw Materials of Easco pursuant to an
employment agreement. Mr. Sax began employment with Easco on December 30, 1996,
and the term of the agreement is indefinite until terminated by either Easco or
Mr. Sax. Mr. Sax's employment agreement provides for an annual base salary of
$158,000.
Mr. Smith serves as Executive Vice President, Chief Financial Officer,
Secretary and Treasurer of Easco pursuant to an employment agreement. Mr. Smith
began employment with Easco on November 26, 1996, and the term of the agreement
is indefinite until terminated by either Easco or Mr. Smith. Mr. Smith's
employment agreement provides for an annual base salary of $160,000.
8
<PAGE> 11
Mr. Byers serves as Vice President-Sales and Marketing of Easco pursuant to
an employment agreement. Mr. Byers began employment with Easco on November 26,
1996, and the term of the agreement is indefinite until terminated by either
Easco or Mr. Byers. Mr. Byers' employment agreement provides for an annual base
salary of $138,900.
In addition to an annual base salary, the employment agreements for Messrs.
Sax, Smith and Byers provide that each of them shall receive an annual
performance bonus (up to specified percentages of salary determined on the basis
of the Company's performance), such health, dental, life and disability
insurance coverage as the Company provides to its senior executive employees
generally, and severance benefits comprised of continued salary and health
benefits until the earlier of the second anniversary (in the event of
termination within six months following a Hostile Sale of the Company) or the
first anniversary of termination without cause or until they commence other
employment. In addition, the agreements provide that each of them shall receive
special initial compensation comprised of a $200,000 signing bonus ($100,000 of
which was payable upon signing the employment agreement, with an additional
$50,000 payable upon the first anniversary and the second anniversary of
commencement of employment), together with a stock grant of 12,500 shares of
Common Stock, options to purchase 37,500 shares of Common Stock (one-half of
which are exerciseable at $6.00 per share and one-half at $3.00 per share), and
additional options to purchase 50,000 shares of Common Stock exerciseable at
$5.75 per share ($7.25 per share in the case of Mr. Sax). The agreements provide
that each of Messrs. Sax, Smith and Byers will be required to return to the
Company each installment of the signing bonus component if their employment is
terminated (other than termination without cause, death or disability or
resignation with "good reason") prior to the second anniversary of the payment
of such installment. The agreements also provide that the Company shall lend to
Messrs. Sax, Smith and Byers an amount up to their respective additional 1996
federal and state income taxes incurred by reason of the grant of 12,500 shares
of Common Stock at a market interest rate.
Mr. Rich is employed by Easco pursuant to an employment and separation
agreement. The term of Mr. Rich's employment continues until August 31, 1998
unless earlier terminated by the parties. Under the agreement, Mr. Rich has such
duties and responsibilities as the President of Easco may direct and he is
required to devote his full time, attention and energies to furthering Easco's
business. Mr. Rich is not presently assigned any material duties pursuant to the
agreement. The agreement provides for a monthly salary of $12,500 through June
30, 1997 and $13,125 from July 1, 1997 through August 31, 1998, participation in
Easco's Cash Incentive Bonus Plan administered by the Board of Directors of
Easco (with bonuses up to a specified percentage of salary determined by
performance), participation in the Company's Stock Option Plan, use of an
automobile at the Company's expense, and such health, dental, life and
disability insurance coverage as the Company provides to its senior executive
employees generally. The agreement provides that Mr. Rich will retire from Easco
effective September 1, 1998, with full credit for 29 years of service. Pursuant
to the agreement, Mr. Rich's retirement benefits will be calculated in
accordance with the Company's retirement plans as in effect on the date of the
agreement. Mr. Rich also has a consulting agreement with Easco which will take
effect following his retirement from Easco pursuant to the employment and
separation agreement described above and will continue through August 31, 1999
unless earlier terminated by the parties. The agreement provides for a monthly
retainer equal to the difference between Mr. Rich's monthly salary at the date
of retirement ($13,125) and total monthly pension benefits paid to Mr. Rich by
Easco, and provides for certain employee benefits.
Severance Arrangements
Mr. Hagerty and the Company entered into a severance agreement pursuant to
which Mr. Hagerty resigned effective November 26, 1996. Mr. Hagerty's severance
agreement provides for continuation of salary, health benefits and use of a
Company-owned automobile for thirteen months from the effective date of his
resignation, payment of $7,231 of accrued but unused vacation time, payment of
benefits accrued under the Company's employee benefit plans as of the effective
date of his resignation, and a payment of $282,607 for cancellation of all
options held by him with respect to the Common Stock of the Company. In
addition, pursuant to the agreement, the Company agreed to repurchase from Mr.
Hagerty 53,474 shares of Common Stock owned by him for $240,105 and cancellation
of indebtedness of Mr. Hagerty to the Company in
9
<PAGE> 12
connection with his purchase of such shares. Pursuant to the severance
agreement, the Company and Mr. Hagerty released each other from any claims or
liability with respect to the period on and prior to the effective date of Mr.
Hagerty's resignation. The Company agreed to continue its obligation to
indemnify Mr. Hagerty as provided in the Company's Amended and Restated
Certificate of Incorporation and by-laws.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The two-member Compensation Committee is comprised of non-employee
directors, Robert J. Klein and Lawrence W. Ward, Jr. Mr. Klein is an employee of
AIPM, and Mr. Ward is an employee of American Industrial Group, an affiliate of
AIPM. Pursuant to a services agreement (the "Services Agreement"), AIPM provides
general management, financial and other advisory services to Easco. Under the
Services Agreement, Easco reimburses AIPM for its out-of-pocket expenses and
pays AIPM a management fee, which for 1996 was $900,000. The Services Agreement
was amended upon completion of the Company's initial public offering to expire
at the end of a five-year term, with automatic one-year renewals thereafter
unless terminated by either party upon 90 days prior written notice. In
addition, on the third and on the fourth anniversary of the amendment, the
Company may reduce AIPM's fee under the Services Agreement to reflect the
reduced levels of advisory activity that would be expected to accompany a
significant reduction in ownership. Fees may be reduced by 50% if AIP owns less
than 10% and greater than or equal to 5% of the outstanding Common Stock, and
the Company may terminate the Services Agreement on either such date if AIP then
owns less than 5% of the outstanding Common Stock.
EXECUTIVE COMPENSATION REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF
DIRECTORS
The Compensation Committee (the "Committee") of the Board of Directors of
the Company reviews and approves base salary, annual bonus compensation, and
stock option grants and other incentive compensation for all corporate officers,
with the objective of attracting and retaining individuals of the necessary
quality and stature to operate the business. The Committee is comprised of
non-employee directors who are affiliated with AIPM, but who have no
"interlocking" relationships with other companies as defined in the applicable
rules of the Securities and Exchange Commission. In determining each component
of compensation, the Committee considers all elements of an executive's total
compensation package. The Committee regularly consults with the Company's
Chairman of the Board (who is not an officer of the Company) regarding executive
compensation matters.
In November 1996, the Company's Board of Directors decided to restructure
the Company's top management team in light of the Company's recent performance.
When the opportunity to hire an executive team with substantial aluminum
industry experience, headed by Norman E. Wells, Jr., came to the Board's
attention, the Committee and the Board of Directors constructed new incentive
compensation arrangements as part of the recruitment and hiring of this new
management team. In creating compensation packages to attract the new
executives, the Committee and the Board emphasized equity-based incentives and
payouts based upon specific, measurable quantitative financial goals for the
Company. In addition, the Committee and the Board considered the competitive job
market for top quality manufacturing executives and the competing job
opportunities which certain executives, particularly Mr. Wells, were
considering.
Pursuant to his employment agreement, Mr. Wells received a signing bonus
consisting of $597,500 in cash and 70,000 shares of Common Stock (which he
elected to take in lieu of cash), valued at $6.00 per share. Both the cash and
stock components of his signing bonus must be returned to the Company if Mr.
Wells leaves the Company within two years, except under certain limited
circumstances. In addition, Mr. Wells received a stock grant of 100,000 shares
of Common Stock and options exercisable for 300,000 shares of Common Stock.
These options vest and become exercisable over a three year period, with the
vesting of the first installment on the first anniversary of the grant date. See
"-- Option Grants in 1996" and "-- Employment and Severance
Arrangements -- Employment Agreements."
The Board of Directors determined that, under the circumstances (including
the availability of a group of experienced managers with a demonstrated
performance record who had worked together as a team, a generous competing offer
for Mr. Wells' services and the Company's recent performance), these compensa-
10
<PAGE> 13
tion arrangements were necessary as a reasonable fair market value inducement to
bring the new management team to the Company. Other key executives who were
recruited at the same time as Mr. Wells also received cash signing bonuses (each
installment of which is also forfeitable in the event such executives leave the
Company within two years of payment thereof) as well as Common Stock and stock
option grants. See "Summary" and "Option Grants in 1996." A majority of the
stock options granted to each executive (other than Mr. Wells) vests after seven
years (subject to continued employment) with an opportunity for accelerated
vesting in years three through five if specified performance objectives based on
increasing levels of earnings before interest, taxes, depreciation and
amortization ("EBITDA") are satisfied. The balance of the option grants vest
over three years. The Committee believes that the significant proportion of
equity-based compensation used to recruit and compensate the new management team
meaningfully aligns the interests of management with those of the stockholders
and focuses the attention of management on the long-term success of the Company.
A significant portion of the executives' compensation is at risk, based on the
financial performance of the Company and, most importantly, the value of the
Company's Common Stock in the marketplace.
As part of the management realignment, the Compensation Committee has
restructured the Company's annual Cash Incentive Bonus Plan for 1997. The plan
as in effect for 1996 provided for payment of annual bonuses based upon (i) a
quantitative factor based on performance against the corporate operating profit
target established by the Board each year in connection with the annual business
planning process, and (ii) certain qualitative criteria which measured
executives' individual contributions to the Company. In determining the total
bonus for 1996, quantitative performance criteria received a 75% weighting and
qualitative criteria received a 25% weighting. Individual target bonus
percentages were set in accordance with base salaries and levels of
responsibility, and for 1996, were targeted at 50% to 70% of base salary.
However, no bonuses were earned by key executives (including Michael M. Hagerty,
the Company's former President and Chief Executive Officer) pursuant to the
quantitative component of the Cash Incentive Bonus Plan as the Company failed to
reach the required performance levels in 1996.
For 1997, the Committee has eliminated the qualitative or discretionary
component of the Cash Incentive Bonus Plan applicable to key executives,
including Mr. Wells. Under the new plan, 100% of the Cash Incentive Bonus is
based upon achieving an EBITDA target. The Committee has established, and the
Board has approved, EBITDA targets for 1997 through 2000, rather than
re-establishing targets on a rolling annual basis as under the prior plan. The
Committee believes that these multi-year targets provide a better incentive for
managers to focus on steady, long-term growth. Annual performance bonuses will
equal 100% of salary upon the Company's achievement of each year's target
EBITDA. Minimum EBITDA targets for each year have also been established below
which no bonuses will be paid. The maximum bonus for which Mr. Wells is eligible
equals 200% of salary based on achieving a High EBITDA target (as defined in the
Cash Incentive Bonus Plan). Other key executives are eligible for bonuses equal
to 150% of salary upon achievement of High EBITDA targets. Linear interpolation
(calculated to the nearest full percentage point) will be used for EBITDA
results falling between the EBITDA targets. The Committee or the Board may make
equitable adjustments to the EBITDA targets to reflect future acquisitions or
divestitures or non-recurring or extraordinary items.
The Stock Option Plan provides equity-based incentives to officers and key
employees of the Company and its subsidiaries. The Committee is authorized to
select from among the eligible employees the individuals to whom options are to
be granted and to determine the number of shares to be subject thereto and the
terms and conditions thereof, consistent with the Stock Option Plan. Options
representing an aggregate of 225,000 shares also were granted outside the Stock
Option Plan at an exercise price of $3.00 per share as part of the initial
inducement package for the new management team. Options granted in 1996 to key
executives are described above under "Executive Compensation -- Options Granted
in 1996."
Michael M. Hagerty served as President and Chief Executive Officer of the
Company until November 1996. His compensation during 1996 consisted of a base
salary of $235,000 per year and eligibility for additional compensation pursuant
to the Cash Incentive Bonus Plan. For a description of Mr. Hagerty's severance
agreement, see "Employment and Severance Arrangements." Due to the Company's
performance
11
<PAGE> 14
and his resignation, Mr. Hagerty received no bonus payment for 1996 and the
unvested portion of his stock options were terminated.
Section 162(m) of the Internal Revenue Code limits to $1 million in a
taxable year the deduction publicly held companies may claim for compensation
paid to certain executive officers, unless certain requirements are met. The
Company considers the impact of Section 162(m) on compensation decisions, and
the Committee and the Board of Directors reviewed the impact of Section 162(m)
upon the Company in light of the incentive compensation package that was offered
to the new management team. Mr. Wells' signing bonus (comprised of $597,500 in
cash and 70,000 shares of Common Stock) together with the grant of 100,000
shares of Common Stock exceeded the $1 million deductibility limitation. The
accompanying loss of tax deductions for the 1996 tax year was considered by the
Board and the Committee prior to approving the compensation package offered to
the new management team. The Committee and the Board determined that the
benefits to the Company and its stockholders from bringing the new management
team to the Company, including the substantial equity component of the incentive
compensation package, outweighed the partial loss of a tax deduction
(approximately $600,000), particularly in a year in which the Company would
otherwise be reporting a substantial tax loss.
The Committee has determined that in future periods no executive officer
currently is likely to exceed the $1 million limitation. Pursuant to Mr. Wells'
employment agreement, Mr. Wells is prohibited from exercising certain stock
options in any period in which such exercise would cause the Company to lose a
tax deduction under Section 162(m).
Robert J. Klein
Lawrence W. Ward, Jr.
12
<PAGE> 15
CERTAIN TRANSACTIONS
In connection with the termination of Mr. Hagerty's employment, the Company
repurchased 53,474 shares of Common Stock from Mr. Hagerty for a purchase price
of $401,055 (consisting of $240,105 in cash and $160,950 in cancellation of
indebtedness owed by Mr. Hagerty to the Company in connection with his purchase
of 48,474 shares of Common Stock on December 21, 1993). Simultaneously with such
repurchase, the Company canceled the promissory note issued by Mr. Hagerty to
the Company in connection with his purchase of Common Stock in December 1993.
OWNERSHIP OF THE COMPANY'S COMMON STOCK
The following table sets forth information with respect to the number of
shares of Common Stock beneficially owned by (i) each director of the Company as
of March 14, 1997, (ii) each of the Named Officers as of March 14, 1997, (iii)
all directors and executive officers of the Company as a group as of March 14,
1997 and (iv) each stockholder known by the Company to be a beneficial owner of
more than 5% of any class of the Company's voting securities as of December 31,
1996. The Company believes that, except as otherwise noted, each individual
named has sole investment and voting power with respect to the shares of Common
Stock indicated as beneficially owned by such individual.
<TABLE>
<CAPTION>
COMMON STOCK BENEFICIALLY OWNED
---------------------------------------
PERCENT OF
NAMES AND ADDRESSES OF BENEFICIAL OWNERS (1) NUMBER OF SHARES OUTSTANDING SHARES
- ------------------------------------------------------------ ---------------- ------------------
<S> <C> <C>
American Industrial Partners Capital Fund, L.P.............. 4,239,470 40.7%
One Maritime Plaza
Suite 2525
San Francisco, CA 94111
Wellington Management Company (2)........................... 1,068,000 10.3%
75 State Street
Boston, MA 02109
Mellon Bank, N.A., Trustee for First Plaza Group Trust...... 978,674 9.4%
One Mellon Bank Center
Pittsburgh, PA 15258(3)
Tom H. Barrett (4).......................................... 10,000 *
Joseph M. Byers............................................. 12,500 *
W. Richard Bingham (6)...................................... 4,239,470 40.7%
Robert Cizik (4)............................................ 12,500 *
Michael M. Hagerty.......................................... -- --
Robert J. Klein............................................. 2,300 *
Gene E. Little.............................................. 2,000 *
Frank L. Rich (5)........................................... 34,310 *
Theodore C. Rogers (6)...................................... 4,239,470 40.7%
Lawrence J. Sax............................................. 12,500 *
Samuel H. Smith, Jr......................................... -- --
Terry D. Smith.............................................. 12,500 *
Lawrence W. Ward, Jr........................................ 5,000 *
Norman E. Wells, Jr......................................... 170,000 1.6%
Directors and executive officers as a group (13 persons).... 4,513,080 43.3%
</TABLE>
- ---------------
* Less than one percent
(1) Easco owns 2,005,222 shares of the Common Stock, which shares are accounted
for as treasury stock.
(2) Based solely on the report of Wellington Management Company ("Wellington")
on Schedule 13-G received by the Company. Includes (i) 307,000 shares as to
which Wellington has shared voting power and (ii) 1,068,000 shares as to
which Wellington has shared investment power.
13
<PAGE> 16
(3) Mellon Bank, N.A., acts as the trustee (the "Trustee") for First Plaza Group
Trust ("First Plaza"), a trust under and for the benefit of certain employee
benefit plans of General Motors Corporation ("GM") and its subsidiaries.
These shares may be deemed to be owned beneficially by General Motors
Investment Management Corporation ("GMIMCo"), a wholly-owned subsidiary of
GM. GMIMCo's principal business is providing investment advice and
investment management services with respect to the assets of certain
employee benefit plans of GM and its subsidiaries and with respect to the
assets of certain direct and indirect subsidiaries of GM and associated
entities. GMIMCo is serving as First Plaza's investment manager with respect
to these shares, and in that capacity, it has sole voting power to direct
the Trustee as to the voting and disposition of these shares. Because of the
Trustee's limited role, beneficial ownership of the shares by the Trustee is
disclaimed.
(4) Mr. Barrett is a limited partner of AIP-LP and a director and stockholder of
AIPM but does not share investment or voting discretion with respect to the
securities held by AIP. Mr. Cizik is a director of American Industrial
Partners Corporation, an indirect affiliate of AIP, but does not share
investment or voting discretion with regard to the securities held by AIP.
(5) Includes 19,390 shares which may be acquired upon exercise of options which
are exercisable within 60 days.
(6) All of such shares are held of record by AIP. Messrs. Bingham and Rogers are
general partners of AIP-L.P., the general partner of AIP, and may be deemed
to share investment and voting power with respect to the securities owned by
AIP. Messrs. Bingham and Rogers disclaim beneficial ownership of these
shares. The business address of Mr. Bingham is One Maritime Plaza, Suite
2525, San Francisco, CA 94111, and the business address of Mr. Rogers is 551
Fifth Avenue, Suite 3800, New York, NY 10176.
14
<PAGE> 17
COMPARISON OF CUMULATIVE TOTAL RETURN
The following chart compares the Company's cumulative total stockholder
return on its Common Stock from April 13, 1995, to December 31, 1996 with the
cumulative total return of the Standard & Poor's 500 Index and an index of
comparable companies. These comparisons assume the investment of $100 on April
13, 1995 (the date of the Company's initial public offering of Common Stock) and
the reinvestment of dividends. The total stockholder return shown on the graph
below is not necessarily indicative of future performance.
<TABLE>
<CAPTION>
Measurement Period Comparable Com-
(Fiscal Year Covered) S&P 500 Index panies Index (a) Easco, Inc.
<S> <C> <C> <C>
April 1995 100.00 100.00 100.00
December 1995 123.17 125.26 61.75
December 1996 151.46 163.15 54.46
</TABLE>
- ---------------
(a) As of December 1995, comparable companies index, weighted on the basis of
market capitalization, includes: Amcast Industrial Corp., CasTech Aluminum
Group, Inc., International Aluminum Corp., Mueller Industries, Inc., Quanex
Corp., Tredegar Industries Inc. and Wolverine Tube, Inc. CasTech Aluminum
Group, Inc. was acquired by Commonwealth Aluminum in October 1996 and its
shares are no longer traded on any stock exchange. Accordingly, CasTech
Aluminum Group, Inc. is not included in the Comparable Companies Index at
December 1996.
PROPOSAL 2 -- APPOINTMENT OF INDEPENDENT AUDITORS
Subject to stockholder ratification, the Board of Directors has selected
Deloitte & Touche LLP to audit the accounts of the Company for the year 1997.
Representatives of Deloitte & Touche LLP will be present at the annual meeting
and will be given the opportunity to make a statement if they desire to do so.
They will also be available to respond to appropriate questions.
If stockholders do not ratify the appointment of Deloitte & Touche LLP,
other certified public accountants will be considered by the Board of Directors.
The affirmative vote of a majority of the votes cast at the meeting is necessary
for the ratification of the selection of auditors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
APPOINTMENT OF DELOITTE & TOUCHE LLP AS INDEPENDENT AUDITORS FOR THE COMPANY FOR
1997.
15
<PAGE> 18
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors,
executive officers and certain stockholders to file with the Commission an
initial statement of beneficial ownership and certain statements of changes in
beneficial ownership of equity securities of the Company. Based solely on its
review of such forms received by it, the Company is unaware of any instances of
noncompliance, or late compliance, with such filing requirements during the
fiscal year ended December 31, 1996 by its officers, directors or stockholders.
PROXY SOLICITATION EXPENSE
The expense of the proxy solicitation will be paid by the Company. In
addition to the solicitation of proxies by use of the mails, solicitation may
also be made by telephone, telegram or personal interview by directors, officers
and regular employees of the Company, none of whom will receive additional
compensation for any such solicitation. The Company will, upon request,
reimburse brokers, banks and similar organizations for out-of-pocket and
reasonable clerical expenses incurred in forwarding proxy material to their
principals.
STOCKHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Proposals of stockholders must be received in writing by the Secretary of
the Company prior to November 29, 1997 in order to be considered for inclusion
in the Company's proxy statement and form of proxy relating to the Annual
Meeting of Stockholders to be held in 1998.
OTHER MATTERS
The Board of Directors knows of no matters to be presented at the annual
meeting other than those set forth in the Notice of Annual Meeting of
Stockholders. However, if any other matters do come before the meeting, it is
intended that the holders of the proxies will vote thereon in their discretion.
By order of the Board of Directors.
TERRY D. SMITH
Executive Vice President, Chief
Financial Officer, Secretary and
Treasurer
706 South State Street
Girard, Ohio 44420
Each stockholder, whether or not he or she expects to be present in person at
the annual meeting, is requested to SIGN, DATE AND RETURN THE ENCLOSED PROXY in
the accompanying envelope as promptly as possible. A stockholder may revoke his
or her proxy at any time prior to voting.
16
<PAGE> 19
<TABLE>
<S> <C> <C>
EASCO, INC. EASCO, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF 706 SOUTH STATE STREET
P EASCO, INC. FOR THE ANNUAL MEETING GIRARD, OHIO 44420
OF STOCKHOLDERS ON MAY 9, 1997 (330) 545-4311
R
The undersigned hereby appoints Robert Cizik, Norman E. Wells, Jr. and Gene E. Little and each of them, proxies,
O with the powers the undersigned would possess if personally present, and with full power of substitution, to vote all
shares of common stock of Easco, Inc. that the undersigned is entitled to vote at the Annual Meeting of Stockholders
X to be held at The Wick-Pollock Inn, 630 Wick Avenue, Youngstown, Ohio at 10:00 am, local time, on May 9, 1997, and at
any adjournment thereof, upon all subjects that may properly come before the meeting, including the matters described
Y in the proxy statement furnished herewith, subject to any direction indicated on the other side of this card.
Dated: __________________________________________ , 1997
Signed: ________________________________________________
________________________________________________________
PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. JOINT OWNERS
SHOULD EACH SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL
TITLE AS SUCH.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES. SEE REVERSE SIDE. YOU NEED NOT MARK ANY
BOXES IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXYHOLDERS NAMED ABOVE
CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD. PLEASE MARK, SIGN AND DATE THIS PROXY CARD AND MAIL IT
IN THE ENVELOPE PROVIDED.
(Over)
- ---------------------------------------------------------------------------------------------------------------------------------
DETACH CARD
</TABLE>
<PAGE> 20
<TABLE>
<CAPTION>
<S> <C>
/ X / PLEASE MARK
EACH VOTE
LIKE THIS
</TABLE>
<TABLE>
THIS PROXY WHEN PROPERLY SIGNED WILL BE VOTED IN THE MANNER DIRECTED HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
"FOR" THE ELECTION OF DIRECTORS AND "FOR" PROPOSAL 2.
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FOR WITHHELD
ALL FOR ALL FOR AGAINST ABSTAIN
1. ELECTION OF DIRECTORS: NORMAN E. WELLS, JR. / / / / 2. Ratification of / / / / / /
W. RICHARD BINGHAM independent
auditors.
FOR, EXCEPT VOTE WITHHELD FROM THE FOLLOWING NOMINEE:
-----------------------------------------------------
COMMENTS/ADDRESS CHANGE
Please mark this box if you have / /
written comments/address change
on the reverse side.
Signature(s) ________________________________________________________________________________ Date ___________________
NOTE: Please sign exactly as name appears hereon. Joint owners should each sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. The signer hereby revokes all proxies heretofore
given by the signer to vote at said meeting or any adjournments thereof.
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DETACH CARD
</TABLE>
