<PAGE> 1
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(c) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant / /
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Information Statement / / Confidential, for Use of the Commission
/X/ Definitive Information Statement Only (as permitted by Rule 14c-5(d)(2))
</TABLE>
American Architectural Products Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14c-5(g).
/ / Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / 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:
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(4) Date Filed:
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<PAGE> 2
AMERICAN ARCHITECTURAL PRODUCTS CORPORATION
(formerly known as Forte Computer Easy, Inc.)
1350 Albert Street
Youngstown, Ohio 44505
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 29, 1997
- --------------------------------------------------------------------------------
To Our Shareholders:
The 1997 Annual Meeting of Shareholders of AMERICAN ARCHITECTURAL
PRODUCTS CORPORATION, a Delaware corporation (the "Company"), will be held at
the Holiday Inn Metroplex, 1620 Motor Inn Drive, Girard, Ohio 44420, on May 29,
1997, at 9:30 a.m., E.D.T., for the following purposes:
1. To elect nine (9) directors to the Company's Board of
Directors to serve for the next year or until their successors
are elected.
2. To ratify the appointment of BDO Seidman LLP as the
independent auditors for the Company for the fiscal year
ending December 31, 1997.
3. To transact such other business as may properly come before
the meeting or any adjournment(s) thereof. Management is
presently aware of no other business to come before the
meeting.
The Board of Directors has fixed the close of business on May 9, 1997,
as the record date for the determination of Shareholders entitled to notice of
and to vote at the Annual Meeting or any adjournment(s) thereof (the "Record
Date"). Shares of Common Stock can be voted at the Annual Meeting only if the
holder is present at the meeting in person or by valid proxy. Management is not
soliciting proxies in connection with the Annual Meeting, and Shareholders are
requested not to send proxies to the Company. Your attention is directed to the
attached Information Statement.
The Company's management cordially invites you to attend the Annual
Meeting.
By Order of the Board of Directors
Frank J. Amedia
President and Chief Executive Officer
Youngstown, Ohio
May 10, 1997
<PAGE> 3
AMERICAN ARCHITECTURAL PRODUCTS CORPORATION
(formerly known as Forte Computer Easy, Inc.)
1350 Albert Street
Youngstown, Ohio 44505
-----------------------------------------------
INFORMATION STATEMENT
-----------------------------------------------
This Information Statement is being furnished to the Shareholders of
AMERICAN ARCHITECTURAL PRODUCTS CORPORATION, a Delaware corporation (the
"Company"), in connection with the Annual Meeting of the Shareholders of the
Company to be held on May 29, 1997, at 9:30 a.m., E.D.T., and any adjournment or
postponement thereof (the "Annual Meeting"). A Copy Of The Notice of the Annual
Meeting accompanies this Information Statement. It is anticipated that the
mailing of this Information Statement will commence on May 12, 1997.
WE ARE NOT ASKING YOU FOR A PROXY
AND YOU ARE REQUESTED NOT TO SEND US A PROXY
VOTING
Only shareholders of record at the close of business on May 9, 1997
(the "Record Date") are entitled to notice of and to vote at the Annual Meeting
or any adjournment or postponement thereof. On the Record Date, 12,653,276
shares of the common stock, $.001 par value per share (the "Common Stock"), were
issued and outstanding. Each holder of Common Stock is entitled to one vote,
exercisable in person or by proxy, for each share of Common Stock held of record
on the Record Date. There is no cumulative voting with respect to the election
of directors.
THE PROPOSALS FOR WHICH SHAREHOLDER APPROVAL IS BEING SOUGHT CANNOT
BE APPROVED WITHOUT THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF
THE VOTES PRESENT, IN PERSON OR BY PROXY, AT THE ANNUAL MEETING. Abstentions
and broker non-votes will be included in the determination of the number of
shares represented for a quorum. In order to vote their shares in person at the
meeting, shareholders who own their shares in "street name" must obtain a
special proxy card from their broker.
The Board of Directors does not know of any matters, other than (i) the
election of nine (9) members of the Company's Board of Directors, and (ii)
ratification of BDO Seidman LLP as the Company's independent auditors for the
fiscal year ending December 31, 1997, that are expected to be presented for
consideration at the Annual Meeting.
On April 1, 1997, the shareholders of the Company approved the
reincorporation of the Company pursuant to the merger of the Company with a
wholly-owned Delaware subsidiary. The reincorporation became effective on April
1, 1997. References in this Information Statement to numbers of shares, share
prices and option exercise prices have been adjusted, where necessary, to give
effect to the 1-for-10 common stock conversion ratio applicable to the
reincorporation.
1
<PAGE> 4
BOARD OF DIRECTORS
IN GENERAL
At the Annual Meeting, nine (9) directors will be elected, each to hold
office until the Company's next annual meeting or until his successor is elected
and qualified. Subject to the requirements of applicable Delaware law, the Board
may from time to time determine the number of directors of the Company.
AAP Holdings, Inc. ("AAPH") and Mr. Frank J. Amedia, who collectively
have voting power over a majority in interest of the Common Stock, intend to
vote FOR each of the nominees listed below. Accordingly, it is expected that
each of such nominees will be elected to the Company's Board of Directors. If
any nominee becomes unavailable for any reason, or if a vacancy should occur
before the election, AAPH and Mr. Amedia will vote their shares in favor of the
election of such other person or persons as they may determine. The nine (9)
nominees receiving the highest number of votes cast at the Annual Meeting will
be elected.
INFORMATION CONCERNING DIRECTORS AND NOMINEES
Each of the individuals listed below currently serves as a member of
the Company's Board of Directors and has been nominated to stand for reelection
at the Annual Meeting. Information regarding the names, ages, tenure as a member
of the Board of Directors and recent business experience of each of the nominees
is set forth below. Each director has served continuously with the Company since
his first election to the Board of Directors as indicated below.
<TABLE>
<CAPTION>
Name Age Position Director Since
- ---- --- -------- --------------
<S> <C> <C> <C>
George S. Hofmeister 45 Chairman of the Board 1996
Frank J. Amedia 44 President, Chief Executive 1994
Officer and Director
John J. Cafaro 45 Director 1996
Joseph Dominijanni 40 Director and Treasurer 1996
W.R. Jackson, Jr. 63 Director 1996
John Masternick 71 Director 1994
James E. Phillips 40 Director 1996
Charles E. Trebilcock 70 Director 1994
James K. Warren 32 Director 1997
</TABLE>
George S. Hofmeister has served as the Chairman of the Board of
Directors of the Company since December 19, 1996. Mr. Hofmeister has served as
Chief Executive Officer and Chairman of the Board of American Commercial
Holdings, Inc. ("ACH"), the parent company of AAP Holdings, Inc. ("AAPH"), since
December 15, 1995 and continues to serve in such roles. Mr. Hofmeister served as
Vice Chairman of Tube Products, Inc., a manufacturer of automobile exhaust
systems, from February 14, 1996 until
2
<PAGE> 5
March 25, 1997. From June 1, 1991 until December 15, 1995, Mr. Hofmeister served
as Chief Executive Officer and Chairman of the Board of EWI, Inc., a
manufacturer of automotive metal stampings.
Frank J. Amedia has been a director of the Company and has served as
President and Chief Executive Officer of the Company since June 8, 1994. Mr.
Amedia was the founder and has served as the President of Forte, Inc., a wholly
owned subsidiary of the Company, from its inception in 1989. Prior thereto, Mr.
Amedia was a manufacturer's representative in the fenestration business.
John J. Cafaro joined the Board of Directors in December 1996. Mr.
Cafaro is the Executive Vice President of The Cafaro Company, a major domestic
shopping mall developer engaged in the ownership, operation and management of
enclosed regional shopping centers. Mr. Cafaro has been a principal officer of
The Cafaro Company for the past 20 years.
Joseph Dominijanni has served as the Company's Treasurer since December
19, 1996. Mr. Dominijanni has also served as the Vice President - Finance of
American Architectural Products, Inc. ("AAP") since its inception. Mr.
Dominijanni also currently serves as Vice President - Finance of American
Commercial Holdings, Inc. ("ACH"), the parent corporation of AAPH, and American
Commercial Industries, Inc. ("ACI"), which is principally engaged in the
manufacturing of automotive components. Mr. Dominijanni joined ACH and ACI in
May 1996. Mr. Dominijanni served as Vice President - Finance of EWI, Inc., a
manufacturer of automotive metal stampings, from June 1990 until April 1996.
W.R. Jackson, Jr. has served as a director of the Company since
December 19, 1996. Mr. Jackson has also served since 1982 on the Board of
Directors of Pitt-Des Moines, Inc., a steel construction, engineering and metal
products manufacturer. Mr. Jackson was also President and Treasurer of Pitt-Des
Moines, Inc. from 1983-1987.
John Masternick has been a director of the Company since June 14, 1994.
Mr. Masternick is a practicing attorney in Girard, Ohio, and is the Chairman of
the Board of Directors of Omni Manor, Inc. and Windsor House, Inc., owners and
operators of skilled nursing and extended care facilities in northeastern Ohio
and western Pennsylvania.
James E. Phillips has been a member of the Company's Board of Directors
since December 19, 1996. Mr. Phillips is also an attorney practicing with the
law firm of Arter & Hadden since 1985. Additionally, Mr. Phillips has served as
President and director of GPI Incorporated ("GPI") and Profile Extrusion Company
("PEC") since April 1, 1994 and Daymonex Limited ("Daymonex") since May 2, 1996,
respectively. GPI, PEC and Daymonex are engaged in the aluminum extrusion
industry.
Charles E. Trebilcock has been a director of the Company since June 14,
1994. Since 1964, Mr. Trebilcock has served as Chairman of Liberty Industries,
Inc., an Ohio-based manufacturer of industrial lumber packaging products and
equipment. Mr. Trebilcock is also a partner in Kings Company, which is also a
manufacturer of industrial lumber packaging products and equipment.
James K. Warren has been a director of the Company since February 27,
1997. Mr. Warren holds the office of Vice President - Corporate Planning of AAP.
Since February 1, 1996, Mr. Warren has been employed by American Commercial
Industries, Inc. as its Vice President - Corporate Planning. During the same
time, Mr. Warren has also held the position of Vice President - Corporate
Planning for ACH, the parent company of ACI and AAPH. Mr. Warren was previously
a practicing attorney with the law firm of Arter & Hadden.
3
<PAGE> 6
MEETINGS AND COMPENSATION
During the fiscal year ended December 31, 1996, the Board of Directors
of the Company met two times. All other actions taken by the Board of Directors
during the fiscal year ended December 31, 1996 were accomplished by means of
unanimous written consent. During the period in which he served as a director,
each of the directors attended 75% or more of the meeting of the Board of
Directors and of the meetings held by committees of the Board, if any, on which
he served.
During the fiscal year ended December 31, 1996, non-employee members of
the Board of Directors received no cash compensation for serving on the Board;
however, such members were reimbursed for expenses incurred in connection with
their attendance at meetings of the Board. Each non-employee director serving as
a member of the Board of Directors on December 18, 1996 was granted options to
purchase 2,000 shares of the Company's common stock at an exercise price equal
to the average of the reported closing bid and asked prices on the date of
grant, vesting in full upon issuance. Such options are exercisable for a period
of five years following the vesting date and were issued pursuant to the
Company's 1996 Stock Option Plan.For the fiscal year ending December 31, 1997,
each non-employee director of the Company will receive the following
compensation:
(i) Options to purchase 2,000 shares of the Company's common
stock at an exercise price equal to the average of the reported closing
bid and asked prices on the date of grant, vesting in full after one
year if the director attends at least four of the regularly scheduled
meetings of the Board of Directors and at least 75% of all meetings of
the Board of Directors. Such options will be exercisable for a period
of five years following the vesting date and will be issued pursuant to
the Company's 1996 Stock Option Plan.
(ii) A fee of $1,000 for each Board of Directors meeting
attended in person.
(iii) Reimbursement of expenses incurred in connection with
attending meetings of the Board of Directors.
The Company's Board of Directors did not have a standing audit,
compensation or nominating committee during the fiscal year ended December 31,
1996.
EXECUTIVE COMPENSATION
The following table summarizes all annual and long-term compensation
paid to the Company's Chief Executive Officer and all other executive officers
of the Company whose total annual salary and bonus exceeded $100,000 during the
fiscal year ending December 31, 1996 (collectively, the "Named Executive
Officers") for services rendered in all capacities to the Company and its
subsidiaries during the fiscal years ended December 31, 1996, 1995 and 1994.
4
<PAGE> 7
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Long Term
ANNUAL COMPENSATION Compensation
- ----------------------------------------------------------------------------------------------------------------------------------
Other Annual Restricted All other
Name and Year Ended Salary Bonus Compensation Stock Compensation
Principal Position December 31, ($) ($) ($)(2) Awards ($)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Frank J. Amedia, 1996 168,718 -- -- -- --
President and
Chief Executive 1995 193,000 -- -- -- --
Officer(1)
1994 137,294 -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The amount of compensation paid to Mr. Amedia for 1994 consists of $47,384
paid from October 1, 1993 through June 7, 1994 (paid by Forte, Inc.) and
an additional $89,910 paid to Mr. Amedia following the closing of the
acquisition of Forte, Inc. by the Company on June 7, 1994.
(2) Other compensation to Mr. Amedia did not exceed $50,000 or 10% of his
total annual salary and bonus during any fiscal year.
No stock options previously granted to the executive officers were
subject to repricing during the fiscal year ended December 31, 1996. The Company
does not have a long term incentive plan established for the benefit of its
executive officers or directors.
No stock options, stock appreciation rights or restricted stock
awards were granted as compensation to any officers, directors or employees of
the Company or its subsidiaries during the fiscal years ended December 31, 1994,
1995 or 1996. The Company entered into definitive stock option agreements with
Mr. Amedia and Mr. John Masternick dated December 18, 1996, memorializing the
terms of stock options granted to them in 1994 as shareholders of Forte, Inc. in
connection with the acquisition by the Company of Forte, Inc.
The following table sets forth certain information concerning each
exercise of stock options during the year ended December 31, 1996 by each of the
Named Executive Officers and the aggregated fiscal year-end value of the
unexercised options of each Named Executive Officer.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Aggregated Option Exercises in Fiscal 1996 and Option Value as of December 31, 1996
- -----------------------------------------------------------------------------------------------------------------------------------
Name Shares Value Number of unexercised Value of unexercised in-the-
acquired on realized options/SARs at fiscal year money options/SARs at fiscal
exercise (#) ($) end (#) year end ($)(1)
- -----------------------------------------------------------------------------------------------------------------------------------
Exercisable Unexercisable Exercisable Unexercisable
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Frank J. Amedia 0 $0 426,244 0 $2,530,824 0
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Based on the average of reported bid and asked prices for the
Common Stock on December 31, 1996.
EMPLOYEE STOCK OPTION PLANS
1992 Incentive Stock Option Plan. In May of 1992, the Board of
Directors of the Company adopted an Employee Incentive Stock Option Plan (the
"Option Plan"). Options to purchase an aggregate
5
<PAGE> 8
of up to 500,000 shares of the Company's common stock are authorized under the
Option Plan. Options granted under the Option Plan have a maximum duration of
ten years from the date of grant. In connection with the acquisition of Forte,
Inc. by the Company in June of 1994, Mr. Amedia and Mr. Masternick (as the
former shareholders of Forte, Inc.) received options to purchase an aggregate of
471,770 shares of the Company's common stock at $3.75 per share.
1996 Stock Option Plan. The Company's 1996 Stock Option Plan (the
"1996 Plan"), which was approved by the shareholders of the Company, authorizes
the Board to grant options to directors and employees of the Company to purchase
in the aggregate an amount of shares of Common Stock equal to 10% of the shares
of Common Stock issued and outstanding from time to time, but which aggregate
amount shall in no event exceed 10,000,000 shares of Common Stock. Directors,
officers and other employees of the Company who, in the opinion of the Board of
Directors, are responsible for the continued growth and development and the
financial success of the Company are eligible to be granted options under the
1996 Plan. Options may be nonqualified options, incentive stock options, or any
combination of the foregoing. In general, options granted under the 1996 Plan
are not transferable and expire ten (10) years after the date of grant. The per
share exercise price of an incentive stock option granted under the 1996 Plan
may not be less than the fair market value of the Common Stock on the date of
grant. Incentive stock options granted to persons who have voting control over
10% or more of the Company's capital stock are granted at 110% of the fair
market value of the underlying shares on the date of grant and expire five years
after the date of grant. No option may be granted after December 19, 2006.
The 1996 Plan provides the Board of Directors with the discretion
to determine when options granted thereunder will become exercisable. Generally,
such options may be exercised after a period of time specified by the Board of
Directors at any time prior to expiration, so long as the optionee remains
employed by the Company. No option granted under the 1996 Plan is transferable
by the optionee other than by will or the laws of descent and distribution, and
each option is exercisable during the lifetime of the optionee only by the
optionee.
As of December 31, 1996, options to purchase a total of 1,466,387
shares of the Company's common stock were outstanding, including options to
purchase 879,832 shares issued to AAP Holdings, Inc. on December 18, 1996, with
exercise prices ranging from $2.50 to $5.00 per share.
BOARD OF DIRECTORS REPORT ON EXECUTIVE COMPENSATION
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE COMPANY'S
PREVIOUS OR FUTURE FILINGS UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES
EXCHANGE ACT OF 1934 THAT MIGHT INCORPORATE BY REFERENCE THIS INFORMATION
STATEMENT, IN WHOLE OR IN PART, THE FOLLOWING REPORT AND THE PERFORMANCE GRAPH
WHICH FOLLOWS SHALL NOT BE DEEMED TO BE INCORPORATED BY REFERENCE INTO ANY SUCH
FILINGS.
COMPENSATION PHILOSOPHY
Decisions on compensation of the Company's executive officers are
made by the Board of Directors. The Board of Directors is responsible for
setting and administering the policies which govern both annual compensation and
stock ownership programs. In general, the Board of Directors compensation
policies and practices of the Board of Directors are based upon the following
subjective principles:
6
<PAGE> 9
- Compensation programs should reflect and promote the
Company's goals and reward individuals for contributions to
the Company's success in achieving its goals.
- Compensation should be related to the value created for the
Company's stockholders.
- Compensation programs should integrate both the long- and
short-term strategies of the Company.
- Compensation programs should provide incentive for
excellence in individual performance and promote teamwork
among the Company's management.
- Compensation programs should be designed to attract and
retain executives critical to the success of the Company.
- Stock ownership by management and stock-based compensation
plans are beneficial in aligning management's and the
stockholders' interest in the enhancement of stockholder
value.
Total compensation for each member of senior management is set at
levels which the Board of Directors believes are competitive in relation to
companies of similar type and size; however, no independent investigation of
such levels has been conducted by the Board of Directors. The components of
executive compensation include base salary, equity participation in the Company
in the form of options to purchase common stock, and a discretionary bonus
program. Compensation for executive officers of the Company is usually set by
the Board of Directors prior to the beginning of each fiscal year. Due to the
level of compensation received by the executive officers of the Company, the
Board of Directors has not yet deemed it necessary to adopt a policy regarding
the one million dollar cap on deductibility of certain executive compensation
under Section 162(m) of the Internal Revenue Code.
BASE SALARY
The Board of Directors establishes base salaries for the company's
executive officers at levels considered appropriate in light of the duties and
scope of responsibilities of each officer's position. In this regard, the Board
considers the compensation practices and corporate financial performance of
similarly situated companies. In evaluating base salary levels, the Board of
Directors takes into account a number of factors, including (but not limited to)
management's efforts to improve levels of sales and profitability and to expand
the markets into which the Company's products are distributed and sold. The
Board also takes into account management's consistent commitment to the
long-term success of the Company through the development of new and improved
products and through developing and implementing strategic business acquisition
opportunities.
Based upon its evaluation of these factors, the Board of Directors
believes that senior management is dedicated to achieving long-term financial
improvements, and that the compensation policies, plans and programs
administered by the Board contribute to management's commitment. The Board of
Directors attempts to assimilate all of the foregoing factors when it renders
its compensation decisions; however, the Board recognizes that its decisions are
primarily subjective in nature due to the subjective nature of the criteria. The
Board of Directors does not assign any specified weight to the criteria it
considers.
Base salary recommendations are fixed at levels which the Board
believes is paid to management with comparable qualifications, experience and
responsibilities at other corporations of similar size engaged
7
<PAGE> 10
in businesses similar to that of Company; however, the Board of Directors has
conducted no formal investigation of compensation level at other companies.
STOCK OPTIONS
The Board of Directors administers the Company's 1996 Stock Option
Plan (the "1996 Plan") and determines those employees of the Company who are
eligible to participate in the 1996 Plan. The exercise price of options granted
under the 1996 Plan is never less than the fair market value of the Company's
common stock on the day of grant. The number of options granted by the Board of
Directors under the 1996 Plan are based upon the Board's evaluation of the same
factors described above under "Base Salary." The Board of Directors also takes
into account the relative scope of accountability and the anticipated
performance requirements and contributions of each participating employee, as
well as each participating employee's current equity participation in the
Company. In addition, the Board seeks the recommendation of senior management
with respect to options granted to all participating employees, including the
Chief Executive Officer and other senior management. During the fiscal year
ending December 31, 1996, no options were granted to employees of the Company
under the 1996 Plan.
BONUS COMPENSATION
Bonus compensation is paid at the discretion of the Board of
Directors. Determinations of the Board of Directors with regard to the award of
bonus compensation are generally based upon the Board's evaluation of the same
factors described above under "Base Salary" and other subjective criteria. No
bonuses were paid to the Chief Executive Officer or any of the other executive
officers of the Company during the fiscal year ended December 31, 1996.
CHIEF EXECUTIVE OFFICER
Mr. Amedia has served as President and Chief Executive Officer of
the Company since 1994. As Chief Executive Officer, Mr. Amedia receives a base
salary and is eligible to receive stock options under the 1996 Plan and is
eligible to receive bonus compensation at the discretion of the Board of
Directors. The Board's evaluation process with respect to the Chief Executive
Officer's compensation is comprised of the same components that are utilized by
the Board in evaluating the compensation of other members of senior management.
In reflection of the substantial changes in the Company's business as a result
of the transaction with AAP Holdings, Inc. which was consummated in December of
1996, the Board of Directors has set Mr. Amedia's base salary at $250,000 for
the fiscal year ending December 31, 1997. The Company does not have an
employment agreement with Mr. Amedia.
Submitted by the American Architectural Products
Corporation Board of Directors
George S. Hofmeister
Frank J. Amedia
John J. Cafaro
Joseph Dominijanni
W.R. Jackson, Jr.
John Masternick
James E. Phillips
Charles E. Trebilcock
James K. Warren
8
<PAGE> 11
STOCK PRICE PERFORMANCE
Set forth below is a line graph comparing the cumulative total
return of the Company's Common Stock with the cumulative total return of the
Nasdaq Stock Market Index (U.S.) and a peer group of Nasdaq-listed companies
engaged in the manufacture of fabricated structural metal products for the
period from March 31, 1995 through December 31, 1996 (including the reinvestment
of dividends, if any). For each of the measurement dates, the Company's common
stock price was determined based on the average of the high and low bid prices
and the high and low asked prices for the fiscal quarter ending on such
measurement date. The performance graph below shall not be deemed incorporated
by reference by any general statement incorporating this Information Statement
by reference into any filing under, and shall not otherwise be deemed filed
under, either the Securities Act of 1933 or the Securities Exchange Act of 1934,
except to the extent that the Company specifically incorporates this information
by reference.
<TABLE>
<CAPTION>
3/31/95 12/31/95 12/31/96
------- -------- --------
<S> <C> <C> <C>
American Architectural Products Corporation 100 51.9 118.2
Nasdaq Stock Market Index 100 129.7 159.5
Peer Group (Fabricated Structural Metal Products 100 126.9 122.4
Companies)
</TABLE>
9
<PAGE> 12
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information concerning the
beneficial ownership of the Company's Common Stock as of April 15, 1997, by (i)
each beneficial owner of more than 5% of the Company's Common Stock, (ii) each
director of the Company, (iii) each Named Executive Officer of the Company, and
(iv) all Named Executive Officers and directors as a group. This information was
determined in accordance with Rule 13(d)-3 under the Securities Exchange Act of
1934, as amended, and is based upon the information furnished by the persons
listed below. Except as otherwise indicated, each shareholder listed possesses
sole voting and investing power with respect to the shares indicated as being
beneficially owned.
<TABLE>
<CAPTION>
Shares of Stock
Beneficially Owned
-----------------------------------------
Number of Shares Percent of
Class of Stock Name and Address Beneficially Held Class
-------------- ---------------- ----------------- ----------
<S> <C> <C> <C>
Common George Hofmeister(1) (8) 2,500 *
Common Frank J. Amedia(1) 3,359,326(2) 25.8%
Common John J. Cafaro(1) 0 0
Common Joseph Dominijanni(1) 2,000 *
Common W.R. Jackson, Jr.(1) 0 0
Common John Masternick 369,680(3) 2.9%
20 E. Liberty Street
Girard, Ohio 44420
Common Jim Phillips(1) 0 0
Common Charles E. Trebilcock(1) 50,833(4) *
Common James K. Warren(1) 0 0
Common AAP Holdings, Inc. 10,907,958(5) (8) 81.0%
100 S. Broadway Avenue
Salem, Ohio 44460
Common All directors and Named 3,784,339(6) 29.0%
Executive Officers of the
Company as a group (9
persons)
</TABLE>
- ------------------------
* Less than 1%
(1) c/o American Architectural Products Corporation, 1350 Albert Street,
Youngstown, Ohio 44505.
(2) Includes 426,244 shares of common stock which are subject to
unexercised options that were exercisable on April 15, 1997 or within
sixty days thereafter. Also includes an additional 171,842 unissued
shares of common stock which the Company is obligated to issue to Mr.
Amedia and
10
<PAGE> 13
32,432 shares of common stock which Forte, Inc., a wholly-owned
subsidiary of the Company, is obligated to transfer to Mr. Amedia in
connection with the acquisition of Forte, Inc. by the Company in June
of 1994.
(3) Includes 45,526 shares of common stock which are subject to unexercised
options that were exercisable on April 15, 1997 or within sixty days
thereafter.
(4) Includes 25,833 shares of common stock owned individually and 25,000
shares held by a custodian for the benefit of an individual retirement
account of Mr. Trebilcock.
(5) Does not include 879,832 shares of common stock which are subject to
unexercised options that are exercisable only upon the occurrence of
certain contingencies. Includes 2,728,808 shares of common stock owned
by Amedia, 171,842 shares of common stock issuable to Amedia by the
Company, 32,432 shares of common stock which Forte, Inc. is obligated
to transfer to Amedia and 426,244 shares of common stock subject to
unexercised options that were exercisable on April 15, 1997 or within
sixty days thereafter. In connection with the transaction between AAP
Holdings, Inc. and the Company which was consummated in December of
1996, Amedia granted AAP Holdings, Inc. an irrevocable proxy to vote
all shares of common stock currently or hereafter owned by Amedia with
respect to certain matters, including any matter submitted to the
shareholders of the Company relating to the repayment of amounts owing
to MascoTech, Inc. under those certain Promissory Notes dated August
29, 1996 in the original principal amount of $8,000,000. The proxy
expires on December 31, 1997.
(7) Includes 471,770 shares of common stock which are subject to
unexercised options that were exercisable on April 15, 1997 or within
sixty days thereafter as described above and 204,275 shares of common
stock which the Company and Forte, Inc. are obligated to issue to Mr.
Amedia.
(8) George Hofmeister, Chairman of the Board of Directors of the Company,
is the controlling shareholder of the corporate parent of AAP Holdings,
Inc.
CHANGE IN CONTROL
Pursuant to that certain Agreement and Plan of Reorganization between
the Company and AAP Holdings, Inc. ("AAPH"), dated October 25, 1996 (the
"Reorganization Agreement"), AAPH acquired 7,548,632 shares of Common Stock of
the Company in exchange for all of the issued and outstanding stock of American
Architectural Products, Inc., which was a wholly-owned subsidiary of AAPH. AAPH
also obtained a voting proxy from Frank Amedia in connection with the
Reorganization Agreement, granting AAPH an irrevocable proxy to vote all of
Amedia's shares of Common Stock with respect to certain matters, including any
matters submitted to the stockholders of the Company relating to the repayment
of amounts owing to MascoTech, Inc. from American Architectural Products, Inc.
under those certain Promissory Notes dated August 29, 1996 in the original
aggregate principal amount of $8,000,000 (the "MascoTech Notes"). In addition,
the Company agreed pursuant to the Reorganization Agreement to use its best
efforts to cause the MascoTech Notes to be repaid in full on or prior to
December 31, 1997.
Prior to execution of the Reorganization Agreement, Mr. Amedia had
effective control of the Company, directly owning over 50% of the issued and
outstanding capital stock of the Company. As a result of consummation of the
transactions contemplated by the Reorganization Agreement, AAPH now directly
owns a majority of the issued and outstanding shares of Common Stock of the
Company.
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SECTION 16(A) BENEFICIAL OWNERSHIP COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), requires the Company's officers and directors, and persons
who beneficially own more than ten percent (10%) of a registered class of the
Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. Officers, directors and
greater than ten-percent stockholders are required by Exchange Act regulations
to furnish the Company with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by
it, or written representations from certain reporting persons, the Company
believes that: (i) Messrs. Amedia, Masternick and Trebilcock and other former
members of the Company's Board of Directors failed to timely file initial
reports of beneficial ownership upon becoming reporting persons under Section
16(a) of the Exchange Act, and each such person has, subsequent to December 31,
1996, filed initial reports of beneficial ownership as required by Section 16(a)
of the Exchange Act; (ii) Mr. Amedia failed to file timely reports relating to a
disposition of 340,000 shares of Common Stock (which number of shares does not
reflect the 1-for-10 reverse stock split described elsewhere herein) on April 6,
1996, and Mr. Amedia reported this transaction on a Form 5 filed subsequent to
December 31, 1996; (iii) Mr. Masternick failed to file timely reports relating
to the acquisition of 108,750 shares of Common Stock (which number of shares
does not reflect the 1-for-10 reverse stock split described elsewhere herein) on
June 23, 1995, and Mr. Masternick reported this transaction on a Form 5 filed
subsequent to December 31, 1996; (iv) Mr. Trebilcock failed to file timely
reports relating to the acquisition of 54,960 shares of Common Stock on November
29, 1995 and 45,040 shares of Common Stock on December 29, 1995 (which number of
shares does not in either case reflect the 1-for-10 reverse stock split
described elsewhere herein), and Mr. Trebilcock reported these transactions on a
Form 5 filed subsequent to December 31, 1996; (v) Dr. Chester Amedia, a former
director of the Company, failed to file timely reports relating to the
acquisition of 32,500 shares of Common Stock on November 1, 1996 (which number
of shares does not reflect the 1-for-10 reverse stock split described elsewhere
herein), and Dr. Amedia reported this transaction on a Form 5 filed subsequent
to December 31, 1996; and (vi) except as set forth above, all filing
requirements applicable to its officers, directors, and greater than ten-percent
beneficial owners were complied with during the fiscal year ending December 31,
1996.
CERTAIN TRANSACTIONS
Pursuant to an Agreement and Plan of Reorganization dated on May
27, 1994, which was consummated on June 8, 1994 (as amended, the "Forte
Agreement"), Forte, Inc., an Ohio corporation, became a wholly owned subsidiary
of the Company. Pursuant to that transaction, as modified, the Company agreed to
issue to the prior Forte shareholders a total of 3,247,929 shares of the
Company's common stock, consisting of 2,934,650 shares to Frank J. Amedia and
313,279 shares to John Masternick. As part of the same transaction, options were
granted to Amedia and Masternick to purchase 426,244 shares and 45,526 shares,
respectively, of the Company's common stock at $3.75 per share. In addition,
32,432 shares of the Company's common stock acquired by Forte are to be issued
to Amedia as a former shareholder of Forte. These shares have not yet been
issued and are in addition to 171,842 shares of Common Stock which the Company
is obligated to issue to Amedia in connection with the Forte Agreement.
In June, 1994, Forte purchased all of the issued and outstanding
shares of MoCorp Air, Inc. ("MoCorp") from Amedia for $215,000, which consisted
of the assumption by Forte of the balance due from MoCorp to Cessna Financing
Company in the amount of $147,902 and seller-provided financing for
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the balance of the purchase price of $67,098. The total consideration paid by
Forte represented the estimated value of the sole asset of MoCorp, a Cessna
Chieftain Piper Aircraft, U.S. Registration No. N27363.
Mr. George S. Hofmeister, Chairman of the Board of Directors of
the Company, is the controlling shareholder of the corporate parent of AAP
Holdings, Inc., a Delaware corporation ("AAPH"). In connection with the
Reorganization Agreement between the Company and AAPH, the Company and its
subsidiary, American Architectural Products, Inc. ("AAP"), agreed to use their
best efforts to secure the release of Amedia, Masternick and Hofmeister from all
obligations as either a co-obligor or guarantor of Company or AAP debt. See
"DESCRIPTION OF BUSINESS -- Description of Business." In addition, the Company
agreed to indemnify, defend and hold harmless Amedia, Masternick and Hofmeister
against any loss, cost or expense which any of them may incur as a result of
being a co-obligor or guarantor of any Company or AAP debt. Furthermore, the
Company and AAPH agreed not to dispose of assets securing any Company or AAP
debt without the prior written consent of any person who is a co-obligor or
guarantor of such debt.
Forte performs management services for 78 rental units owned by
Amedia and his wife. Such services involve accounting, performing maintenance,
making repairs and coordinating tenant requirements. Mr. Amedia and his wife
paid the Company $52,257 for such services during the year ended December 31,
1996, $49,804 during the year ended December 31, 1995, and $29,925 during the
year ended December 31, 1994.
Upon consummation of the transaction contemplated by the
Reorganization Agreement, the Company agreed that AAP would pay a management fee
to AAPH of $250,000 during 1997 and to reimburse AAPH and its affiliates for
out-of-pocket expenses incurred in providing services to AAP. The management fee
agreement will terminate on December 31, 1997. In addition, the Company agreed
to pay AAPH an acquisition consulting fee of one percent (1%) of the transaction
price of each acquisition transaction consummated by the Company with respect to
which AAPH or its affiliates provides acquisition consulting services. For
purposes of calculating the acquisition fee, the transaction price means the
aggregate amount of consideration paid by the Company or its affiliates for the
acquisition in the form of cash, stock, stock options, warrants, debt
instruments and other assumed liabilities. The acquisition consulting fee
agreement will terminate on December 31, 1997, except with respect to
acquisition transactions already in progress at such date.
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PROPOSAL NO. 1
ELECTION OF DIRECTORS
At the Annual Meeting, the Company will seek the election of
George Hofmeister, Frank J. Amedia, John J. Cafaro, Joseph Dominijanni, W.R.
Jackson, Jr., John Masternick, James E. Phillips, Charles Trebilcock and James
K. Warren as directors, each to hold office until the Company's next annual
meeting or until his successor is elected and qualified.
REQUIRED VOTE
The nine (9) nominees receiving the highest number of votes cast
at the Annual Meeting will be elected. There is no cumulative voting with
respect to the election of directors.
AAP Holdings, Inc. and Mr. Frank J. Amedia, who collectively have
voting power over a majority in interest of the Common Stock, intend to vote FOR
each of the nominees listed above. Accordingly, it is expected that each of such
nominees will be elected to the Company's Board of Directors. If any nominee
becomes unavailable for any reason, or if a vacancy should occur before the
election, AAP Holdings, Inc. and Mr. Amedia will vote their shares in favor of
the election of such other person or persons as they may determine. The nominees
receiving the highest number of votes cast at the Annual Meeting will be
elected.
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
On February 17, 1997, Semple & Cooper, P.L.C. ("Semple & Cooper")
resigned as the principal accountants of the Company. Semple & Cooper's reports
on the Company's financial statements for the prior two fiscal years contained
no adverse opinion and no disclaimer of opinion, nor were such reports qualified
or modified as to uncertainty, audit scope or accounting principles. In the
Company's two most recent fiscal years and the subsequent interim period
preceding the resignation of Semple & Cooper, there were no disagreements with
Semple & Cooper on any matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedure, which disagreements, if not
resolved to the satisfaction of Semple & Cooper, would have caused it to make a
reference to the subject matter of the disagreements in connection with its
reports. Semple & Cooper furnished the Company with a letter addressed to the
Securities and Exchange Commission pursuant to Item 304(a)(3) of Regulation S-K,
which was filed by the Company on Form 8-K/A dated February 21, 1997.
The Board of Directors of the Company approved the engagement of
BDO Seidman LLP as independent accountants and auditors of the books of account
for the Company and to advise the Company on accounting matters. The Company's
engagement of BDO Seidman LLP became effective as of February 17, 1997. It is
presently contemplated that BDO Seidman LLP will be retained as the principal
accounting firm to be utilized by the Company throughout the fiscal year ending
July 31, 1997. The Company anticipates that a representative of BDO Seidman LLP
will attend the Annual Meeting for the purpose of responding to appropriate
questions. At the Annual Meeting, a representative of BDO Seidman LLP will be
provided an opportunity to make a statement (if such representative so desires).
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REQUIRED VOTE
Ratification of the selection of BDO Seidman LLP as the Company's
independent auditors requires the affirmative vote of a majority of the voting
power of the Common Stock present at the Annual Meeting in person or by valid
proxy.
AAP Holdings, Inc. and Mr. Frank J. Amedia, who collectively have
voting power over a majority in interest of the Common Stock, presently intend
to vote FOR ratification of the selection of BDO Seidman LLP as the Company's
independent auditors for the fiscal year ending December 31, 1997. Accordingly,
it is expected that such selection will be ratified; however, neither AAP
Holdings, Inc. nor Mr. Amedia is obligated to vote in favor of such
ratification.
PROPOSALS BY STOCKHOLDERS
Any stockholder proposal that is intended to be presented at the
Company's 1998 Annual Meeting of Stockholders must be received at the Company's
principal executive offices by no later than January 12, 1998, if such proposal
is to be considered for inclusion in the Company's proxy statement and form of
proxy or information statement relating to such meeting.
OTHER BUSINESS
The Annual Meeting is being held for the purposes set forth in the
Notice that accompanies this Information Statement. The Board of Directors is
not presently aware of any business to be transacted at the Annual Meeting other
than as set forth in such Notice.
BY ORDER OF THE BOARD OF DIRECTORS
David McKelvey, Secretary
Youngstown, Ohio
May 10, 1997
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