================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. _____)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE
14A-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
AMERICAN STONE INDUSTRIES, INC.
(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] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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:_____
================================================================================
AMERICAN STONE INDUSTRIES, INC.
230 West Main Street
South Amherst, Ohio 44001-2926
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 20, 2005
To Our Stockholders:
The Annual Meeting of Stockholders of American Stone Industries, Inc. (the
"Company") will be held at the Union Club of Cleveland, 1211 Euclid Avenue,
Cleveland, Ohio, on Wednesday, April 20, 2005, at 10:30 a.m., local time, to:
(1) Elect seven Directors, each to serve for a term of one year; and
(2) Transact such other business as may properly come before the
meeting.
Only those holders of Common Stock of record at the close of business on
March 9, 2005 are entitled to notice of and to vote at the Annual Meeting.
By Order of the Board of Directors,
/s/ Michael J. Meier
Michael J. Meier
Secretary
March 16, 2005
The Company's Annual Report for the year ended December 31, 2004 is
enclosed. The Annual Report contains financial and other information about the
Company, but is not incorporated into the Proxy Statement and is not deemed to
be a part of the proxy soliciting material.
YOUR VOTE IS IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU MAY HOLD.
Please sign, date and return your proxy card in the return envelope provided as
soon as possible. This will not prevent you from voting your shares in person if
you are present at the Annual Meeting.
AMERICAN STONE INDUSTRIES, INC.
230 West Main Street
South Amherst, Ohio 44001-2926
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 20, 2005
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of American Stone Industries, Inc. ("American Stone" or
the "Company") of proxies to be used at the Annual Meeting of Stockholders of
the Company to be held on Wednesday, April 20, 2005, at 10:30 a.m., local time,
at the Union Club of Cleveland, 1211 Euclid Avenue, Cleveland, Ohio (the "Annual
Meeting") and at any adjournment or postponement thereof.
The accompanying proxy is solicited by the Board of Directors of the
Company and will be voted in accordance with the instructions contained therein
if it is returned duly executed and is not revoked before it is voted. If no
choice is specified on the proxy it will be voted FOR the election of the seven
nominees for Director named herein. Any stockholder giving a proxy pursuant to
this solicitation may revoke it by giving written notice to the Secretary of the
Company at any time prior to its exercise, by voting in person at the Annual
Meeting or by submission of a duly executed proxy bearing a later date.
This Proxy Statement and accompanying form of proxy are being mailed to
stockholders on or about March 16, 2005.
The record date for determination of stockholders entitled to vote at the
Annual Meeting was the close of business on March 9, 2005. On that date,
2,032,021 shares of Common Stock were outstanding and entitled to vote. The
Company has no other voting securities outstanding.
At the Annual Meeting, in accordance with the Delaware General Corporation
Law and the Company's Bylaws, the inspectors of election appointed by the Board
of Directors for the Annual Meeting will determine the presence of a quorum and
will tabulate the results of stockholder voting. The holders of a majority of
the outstanding shares of the Company's Common Stock entitled to vote at the
meeting, present in person or by proxy, will constitute a quorum. The inspectors
of election intend to treat properly executed proxies that are marked, with
respect to election of Directors, as "vote withheld" or, with respect to any
other proposals, "abstain," as shares present for purposes of determining
whether a quorum is present. Likewise, broker non-votes will be counted in
determining a quorum.
The seven nominees for Director receiving the greatest number of votes
will be elected. In the election of Directors, votes may be cast in favor or
withheld; votes that are withheld or broker non-votes will have no effect on the
outcome of the election of Directors.
In voting on matters other than the election of Directors, proposals will
be decided by the vote of holders of a majority of the outstanding shares
entitled to vote thereon present in person or by proxy at the meeting, unless
otherwise provided by law or by the Certificate of Incorporation. In voting on
such other matters, votes may be cast in favor, against or abstained.
Abstentions will count as present for purposes of the proposal on which the
abstention is noted and will have the effect of a vote against the proposal.
Broker non-votes, however, are not counted as present and entitled to vote for
purposes of determining whether a proposal has been approved and will have no
effect on the outcome of any proposal requiring the affirmative vote of the
holders of a majority of the outstanding shares present and entitled to vote.
ELECTION OF DIRECTORS
Under the Company's Bylaws adopted by the stockholders on November 22,
1996, the authorized number of Directors of the Company shall be not less than
three, nor more than seven, as may be fixed from time to time by resolution of
the Board of Directors, and each Director shall be elected or designated to
serve and hold office until the next Annual Meeting of Stockholders. The Board
of Directors has fixed the number of Directors at seven. All of the current
Directors of the Company have been nominated to be re-elected for one-year
terms. Unless otherwise specified, all duly executed proxies will be voted FOR
the election of the nominees named below. The persons designated as proxies,
however, reserve full discretion to cast votes for other persons if any nominee
is unable to serve. All nominees have indicated their willingness to serve as
Directors, if elected, and the Company has no reason to believe they will be
unable to serve.
Information about the Director nominees is set forth in the following
paragraphs.
DIRECTOR NOMINEES FOR TERMS EXPIRING IN 2006
Enzo Costantino......... Mr. Costantino has served as Treasurer of the Company
Age 43 and as a Director since 1996. He has been Secretary
Director since 1996 and Treasurer of Terrazzo, Mosaic & Tile Company, Ltd.
since 1994. Terrazzo, Mosaic & Tile, located in
Toronto, Ontario, is a subcontractor for all types of
hard and soft commercial surfaces. Prior to joining
Terrazzo, Mosaic & Tile, Mr. Costantino was the
controller of Daicon Contractors, a general contractor
located in Toronto, Ontario, from 1989 to 1994, and
the cost accounting manager for Canada Packers, a meat
processor located in Toronto, Ontario, from 1983 to
1989.
Glen Gasparini.......... Mr. Gasparini has served as a Director since 1995 and
Age 52 was President and Chief Executive Officer of the
Director since 1995 Company from 1995 to 1997. He has been President of
Terrazzo, Mosaic & Tile Company, Ltd. since 1975.
Michael J. Meier........ Mr. Meier has served as Secretary of the Company and
Age 50 as a Director since 1996. He has been the Corporate
Director since 1996 Controller and Chief Accounting Officer of PolyOne
Corporation (NYSE: POL) since January 2004. PolyOne
Corporation, headquartered in Avon Lake, Ohio with
2004 annual revenues of approximately $2 billion, is
an international polymer services company with
operations in thermoplastic compounds, specialty
polymer formulations, color and additive systems, and
thermoplastic resin distribution. From September 2002
until January 2004 he was the Director of Finance for
the Elastomers and Performance Additives Group of
PolyOne. From May 1999 until December 2002 he was the
Director of Finance and Information Technology of the
Specialty Resins and Formulators Group of PolyOne. He
was previously Vice-President of Finance, Chief
Financial Officer, Secretary and Treasurer of
Defiance, Inc. (Nasdaq: DEFI) from 1990 until February
1999. Defiance, a supplier of products and services to
the U.S. transportation industry, was purchased by
General Chemical Group, Inc. (NYSE: GCG) in February
1999.
Timothy I. Panzica...... Mr. Panzica has served as a Director of the Company
Age 49 since 1996. He has been Executive Vice-President of
Director since 1996 Panzica Construction Company since 1981. Panzica
Construction Company, a 47 year old firm located in
Cleveland, Ohio, is a full service construction
management/general contracting organization with
expertise in all aspects of commercial construction.
Panzica Construction Company is part of the Panzica
Group of companies, which specializes in real estate
development, design/build, and property management.
Thomas H. Roulston II... Mr. Roulston has served as Chairman of the Board of
Age 71 the Company and as a Director since 1996. Since
Director since 1996 February 1994, he has been the Chairman of the Board
of MJM Industries, a privately held manufacturer. He
founded Roulston & Company, Inc. in 1963 and was its
Chairman from 1963 to 2000. Roulston & Company was a
registered investment adviser located in Cleveland,
Ohio. Mr. Roulston was also Chairman of the Board of
Directors of Defiance, Inc. (Nasdaq: DEFI) through
February 1999. Defiance, a supplier of tooling
systems, testing services, specialty anti-friction
bearings and precision-machined products to the U.S.
transportation industry, with headquarters in
Cleveland, Ohio, was purchased by General Chemical
Group, Inc. (NYSE: GCG) in February 1999. Mr. Roulston
is also a Director of several privately held
companies.
Louis Stokes............ Mr. Stokes has served as a Director of the Company
Age 80 since January 1999. From 1969 to 1999, Mr. Stokes
Director since 1999 served as a Congressman in the United States House of
Representatives. In February 1999, Mr. Stokes took a
position as senior counsel at Squire, Sanders &
Dempsey, a Cleveland-based law firm, and joined the
faculty of the Mandel School of Applied Social
Sciences at the Case Western Reserve University. Mr.
Stokes is also a Director of Forest City Enterprises,
Inc. (NYSE: FCEa).
John R. Male............ Mr. Male has been with Park View Federal Savings Bank
Age 56 (the "Bank") since 1971, and was named President and
Director since 2002 Chief Executive Officer of the Bank in 1986. He was
named President of PVF Capital Corp. (Nasdaq: PVFC)
upon its organization as a holding company for the
Bank in 1994. Mr. Male was named Chairman of the Board
of Directors and Chief Executive Officer of PVF
Capital Corp. and the Bank in October 2000. Mr. Male
also serves in various public service and charitable
organizations.
INFORMATION REGARDING MEETINGS AND
COMMITTEES OF THE BOARD OF DIRECTORS
COMMITTEES OF THE BOARD OF DIRECTORS
Audit Committee. The Audit Committee, established in September 1996 and
consisting entirely of non-employee Directors, met twice in fiscal 2004. The
Audit Committee has adopted a written charter. The committee reviews the
external audit plan and activities, the Company's annual financial statements
and the Company's system of internal and financial controls. The committee also
approves in advance all audit, audit-related and nonaudit services provided by
the independent auditors and reviews all significant fees related to these
services. The committee also selects the independent auditors. Members of the
Audit Committee are Michael J. Meier (Chairman), Enzo Costantino and John R.
Male. Mr. Meier and Mr. Male are independent directors, as defined under Nasdaq
listing standards and Mr. Meier qualifies as an "audit committee financial
expert" as defined by regulations of the Securities and Exchange Commission.
Compensation Committee. The Compensation Committee, established in
September 1996 and consisting entirely of non-employee Directors, met once in
fiscal 2004. The committee administers the incentive plans of the Company and
its subsidiaries, approves changes in senior executive compensation and
recommends changes in the Company's incentive plans to the Board. The committee
also recommends the retainer and attendance fees for Directors. Members of the
Compensation Committee are Timothy I. Panzica (Chairman), Thomas H. Roulston II,
and Glen Gasparini.
Executive Committee. The Executive Committee, established in September
1996 and consisting entirely of non-employee Directors, did not meet in fiscal
2004. The committee acts upon matters requiring Board action during the
intervals between Board meetings and includes all the functions of the Board of
Directors other than the filling of vacancies in the Board of Directors or in
any of its committees. Members of the Executive Committee are Thomas H. Roulston
II (Chairman) and Glen Gasparini.
Nominating Committee. The Nominating Committee, established in February
2004, is governed by a written charter adopted by the Board of Directors. The
nominating committee charter is not available at the Company website. The
current members of the Nominating Committee, Thomas H. Roulston and Glen
Gasparini, are not "independent directors" as defined under Nasdaq listing
standards The Nominating Committee charter provides in part that the committee
shall seek to identify potential directors with relevant experience in business
and industry, government, education and other areas beneficial to the Board of
Directors as a whole and that the Nominating Committee shall monitor the mix in
order to ensure that the Board has the necessary tools to perform its functions
effectively. The charter requires that the Nominating Committee recommend
annually nominees for election to the Board. Each recommended nominee must have
indicated willingness to serve on the Board and must be prepared to represent
the interests of the Company and its stockholders in general and not just to
represent a particular stockholder or group. The Nominating Committee charter
provides in part that the Nominating Committee shall consider all director
nominees recommended to it, including those recommended by third parties such as
stockholders, and that such recommendation shall be evaluated using the same
criteria as applicable to candidates identified by the Nominating Committee.
Such recommendations should be directed in writing to any member of the
Nominating Committee, at the address of the principal office of the Company, and
should be accompanied by a written statement by the recommended party that he or
she is willing to serve if elected and a written statement of the qualifications
of the recommended person.
ATTENDANCE AT MEETINGS
The Board of Directors of the Company met nine times during fiscal 2004.
During fiscal 2004 each Director attended at least 75 percent of the meetings of
the Board of Directors and any Committee of the Board of Directors on which he
or she served. The Company does not have a written policy regarding attendance
at Annual Meetings, but the Company encourages all board members to attend. All
board members attended the Annual Meeting held in 2004.
COMMUNICATIONS FROM SECURITY HOLDERS TO THE BOARD OF DIRECTORS
Any security holder may send a written communication to the full Board of
Directors by addressing it to the Chairman of the Board in care of the Company's
principal place of business. Any security holder may send a written
communication to a specific member of the Board of Directors by addressing it to
the individual board member in care of the Company's principal place of
business. All such security holder communications will be relayed to the
Chairman of the Board or the specific member of the Board of Directors as
applicable.
COMPENSATION OF DIRECTORS
No Directors' fees are paid to Directors. All Directors are reimbursed for
reasonable out-of-pocket expenses incurred in connection with their services as
Directors.
On June 24, 1998, the stockholders approved the American Stone Industries,
Inc. 1998 Non-Employee Director Stock Option Plan (the "Non-Employee Option
Plan"). Under this plan, each non-employee Director automatically receives an
option to purchase 1,500 shares of Common Stock on the date of each annual
meeting of stockholders in which the Director is elected or re-elected to the
Board of Directors. In addition, each Director receives an option to purchase
150 shares of Common Stock for each Board or committee meeting attended. The
Chairman of the Board receives twice the number of options as the other
Directors. Each option is granted at the fair market value of the Common Stock
on the date of grant and expires on the fifth anniversary of the date of grant.
All options granted are non-qualified stock options for federal income tax
purposes. On February 19, 2003, the Board of Directors unanimously approved
amending the Non-Employee Option Plan to extend the terms of all options granted
under the Non-Employee Option Plan that were outstanding prior to the Board
meeting on February 19, 2003 for an additional three years. The number of
options subject to this amendment was 110,954 at a weighted average exercise
price of $5.86.
AUDIT COMMITTEE REPORT
The Audit Committee oversees the Company's financial reporting process on
behalf of the Board of Directors. The Audit Committee's activities are governed
by a written charter adopted by the Board of Directors. The charter includes the
Audit Committee's pre-approval policies and procedures related to engaging audit
or non-audit services.
Management has the primary responsibility for the Company's financial
statements and the reporting process, including the system of internal controls.
The independent auditors audit the annual financial statements prepared by
management and express an opinion on the conformity of those financial
statements with accounting principles generally accepted in the United States of
America. The Audit Committee monitors these processes.
In this context, the Audit Committee met and held discussions with
management and the independent auditors. Management represented to the Audit
Committee that the Company's financial statements were prepared in accordance
with accounting principles generally accepted in the United States of America,
and the Audit Committee reviewed and discussed the audited financial statements
with management and the independent auditors, including a discussion of the
quality, not just the acceptability, of the accounting principles, the
reasonableness of specific judgments and the clarity of disclosures in the
financial statements. The Audit Committee also discussed with the independent
auditors such other matters as are required to be discussed with the Audit
Committee under auditing standards generally accepted in the United States of
America.
In addition, the independent auditors provided to the Audit Committee the
written disclosures and letter required by Independence Standards Board Standard
No. 1 (Independence Discussions with Audit Committees), related to the auditors'
independence. The Audit Committee discussed with the independent auditors the
auditors' independence from the Company and its management and considered the
compatibility of non-audit services with the auditors' independence.
The Audit Committee discussed with the Company's financial management and
independent auditors the overall scope and plans for the audit. The Audit
Committee also met with the independent auditors, with and without management
present, to discuss the results of the examinations, their evaluation of the
Company's internal controls and the overall quality of the Company's financial
reporting. In addition, the Audit Committee considered other areas of its
oversight relating to the financial reporting process that it determined
appropriate.
Based on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors, and the Board of Directors has
approved, that the audited financial statements be included in the Company's
Annual Report on Form 10-KSB for the year ended December 31, 2004 for filing
with the Securities and Exchange Commission.
AUDIT COMMITTEE
Michael J. Meier, Chairman
Enzo Costantino
John R. Male
AUDIT AND RELATED FEES
AUDIT FEES
The aggregate fees billed by Hobe & Lucas for professional services for
the audit of the Company's annual consolidated financial statements and the
review of the consolidated financial statements included in the Company's Forms
10-QSB was $36,517 for fiscal year 2003 and $39,395 for fiscal year 2004.
AUDIT-RELATED FEES
Hobe & Lucas did not perform "audit-related" services for the Company in
fiscal years 2003 or 2004.
TAX FEES
The aggregate fees billed to the Company for tax compliance services
rendered by Hobe & Lucas were $6,000 for fiscal year 2003 and $6,000 for fiscal
year 2004. The Audit Committee has determined that the provision of these
services is compatible with maintaining the independence of Hobe & Lucas.
ALL OTHER FEES
Hobe & Lucas did not bill the Company for any services or products during
fiscal years 2003 and 2004 except as described above.
COMMON STOCK OWNERSHIP
BENEFICIAL OWNERSHIP OF STOCKHOLDERS
OWNING MORE THAN FIVE PERCENT
The following table sets forth beneficial owners known to the Company of
more than five percent of the Company's outstanding Common Stock as of February
28, 2005. All information with respect to beneficial ownership has been
furnished by the respective five percent beneficial holder.
NAME AND ADDRESS OF NUMBER OF SHARES PERCENT OF
BENEFICIAL OWNER BENEFICIALLY OWNED TOTAL SHARES
------------------------------------------ ------------------ -------------
Roulston Ventures Limited Partnership(1).. 490,000 24.1%
1200 East Street
Fairport Harbor, Ohio 44077
Roulston Venture Capital, L.P.(2)......... 200,000(3) 9.8%
1200 East Street
Fairport Harbor, Ohio 44077
TMT Masonry, Ltd.(4)...................... 300,000 14.8%
900 Keele Street
Toronto, Ontario, Canada M6N 3E7
-----------------------
1 Mr. Thomas H. Roulston II, Director and Chairman of the Board of the
Company, is a general partner and 9% owner of Roulston Ventures Limited
Partnership. Refer to the table regarding Directors and executive officers
for detail.
2 Mr. Thomas H. Roulston II, Director and Chairman of the Board of the
Company, is a general partner and 10% owner of Roulston Venture Capital,
L.P. Refer to the table regarding Directors and executive officers for
detail.
3 Includes 60,000 shares of Common Stock that are issuable upon conversion
of a convertible subordinated note in the principal amount of $300,000 at
a conversion rate of $5.00 per share.
4 Mr. Glen Gasparini, a Director of the Company, is President and 75%
shareholder of TMT Masonry, Ltd. Refer to the table regarding Directors
and executive officers for detail.
BENEFICIAL OWNERSHIP OF DIRECTORS
AND EXECUTIVE OFFICERS
The following table sets forth the number of shares of Common Stock
beneficially owned as of February 28, 2005 by each Director and the executive
officer of the Company. All information with respect to beneficial ownership has
been furnished by the respective Director or executive officer. All shares shown
in the table reflect sole voting and investment power unless otherwise
indicated.
NAME AND ADDRESS OF NUMBER OF SHARES PERCENT OF
BENEFICIAL OWNER(1) BENEFICIALLY OWNED TOTAL SHARES(2)
-------------------------------------------------------------- ------------------ ---------------
Thomas H. Roulston II......................................... 786,785(3) 36.9%
Glen Gasparini................................................ 335,555(4) 16.4%
Timothy I. Panzica........................................... 21,850(5) 1.1%
Michael J. Meier.............................................. 20,239(6) 1.0%
Enzo Costantino............................................... 19,400(7) *
Louis Stokes.................................................. 17,697(8) *
Russell Ciphers, Sr. ......................................... 55,416(9) 2.7%
John R. Male.................................................. 27,325(10) 1.3%
All Directors and executive officers as a group (8 persons)... 1,284,267(11) 56.3%
-------------------------
* Represents less than 1%.
1 The address of each beneficial owner is c/o American Stone Industries,
Inc., 231 West Main Street, South Amherst, Ohio 44001-2926.
2 Based on 2,032,021 shares of Common Stock outstanding on February 28,
2005, adjusted for shares subject to options exercisable within 60 days
following February 28, 2005 held either by the named individuals or by the
group as a whole.
3 Includes 10,000 shares held by Mr. Roulston's wife. Mr. Roulston disclaims
beneficial ownership of these shares. Shares of Common Stock beneficially
owned by Mr. Roulston also include 490,000 shares held by Roulston
Ventures Limited Partnership, of which Mr. Roulston is a general partner
and 9% owner and 200,000 shares held by Roulston Venture Capital, L.P. of
which Mr. Roulston is a general partner and 10% owner. Refer to the table
regarding stockholders owning more than 5% for detail. Mr. Roulston's wife
is also a 9% owner of Roulston Ventures Limited Partnership. Mr. Roulston
has sole voting and investment power of Roulston Ventures Limited
Partnership and Roulston Venture Capital, L.P. in a fiduciary capacity.
Also includes options, exercisable within 60 days of February 28, 2005, to
purchase 39,600 shares.
4 Shares of Common Stock beneficially owned by Mr. Gasparini include 300,000
shares held by TMT Masonry, Ltd., of which Mr. Gasparini is President and
a 75% shareholder and 18,455 shares held by Terrazzo, Mosaic & Tile
Company, Ltd., of which Mr. Gasparini is President and a 75% shareholder.
Also includes options, exercisable within 60 days of February 28, 2005, to
purchase 17,100 shares.
5 Includes options, exercisable within 60 days of February 28, 2005, to
purchase 19,650 shares.
6 Includes options, exercisable within 60 days of February 28, 2005, to
purchase 14,534 shares.
7 Includes options, exercisable within 60 days of February 28, 2005, to
purchase 18,900 shares.
8 Includes options, exercisable within 60 days of February 28, 2005, to
purchase 16,950 shares.
9 Includes options, exercisable within 60 days of February 28, 2005, to
purchase 55,416 shares.
10 Shares of stock owned by Mr. Male include 19,975 shares held by Male
Family Limited Partnership of which Mr. Male is a 24.5% Limited Partner.
Also includes options, exercisable within 60 days of February 28, 2005 to
purchase 7,350 shares.
11 Includes (a) options, exercisable within 60 days of February 28, 2005, to
purchase 189,500 shares and (b) 60,000 shares issuable upon conversion of
promissory notes as described in the table regarding stockholders owning
more 5%.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the annual and long-term compensation for
the years ended December 31, 2004, 2003 and 2002 for the Company's Chief
Executive Officer (the "Named Executive Officer"). No other executive officers
received compensation whose annual salary and bonus exceeded $100,000 during
that year.
LONG TERM
COMPENSATION
------------
AWARDS
ANNUAL COMPENSATION ------------
---------------------------------------- SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS COMPENSATION
--------------------------- ---- -------- ----- ------------ ------------ ------------
Russell Ciphers, Sr.(1) 2004 $112,431 - - - $3,308
President and 2003 $101,039 - - - $2,030
Chief Executive Officer 2002 $ 30,500 - - - -
----------------
(1) Mr. Ciphers became President and Chief Executive Officer on October 23,
2002.
The Named Executive Officer did not receive personal benefits or
perquisites during fiscal 2004, 2003 or 2002 in excess of the lesser of $50,000
or 10% of his aggregate salary and bonus.
OPTION GRANTS IN LAST FISCAL YEAR
On June 1, 2004, Mr. Ciphers was granted 50,000 shares of stock options at
$6.00 per share of which 5,416 shares vested upon grant, 16,666 shares vest on
June 1, 2005, 16,666 shares vest on June 1, 2006, and 11,252 shares vest on June
1, 2007.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END VALUES
The following table summarizes options that were exercised during fiscal
2004 and presents the value of unexercised options held by the Named Executive
Officers at fiscal year end.
NUMBER OF SECURITIES
UNDERLYING VALUE OF
UNEXERCISED IN-THE-MONEY
OPTIONS AT FISCAL OPTIONS AT FISCAL
YEAR-END (#) YEAR-END ($)(1)
SHARES ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
-------------------- --------------- ----------- ----------- ------------- ----------- -------------
Russell Ciphers, Sr. 0 - 55,416 44,458 $174,062 $33,438
--------------------------
(1) Calculated based on the closing price of $6.75 per share on December 31,
2004.
EMPLOYMENT AGREEMENTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
The Company does not have any agreements regarding employment and does not
have any change-in-control arrangements.
CERTAIN RELATIONSHIPS AND RELATED-PARTY TRANSACTIONS
No Director has any family relationship to any other Director of the
Company.
On November 22, 1996, TMT Masonry, Ltd. ("TMT"), Roulston Ventures Limited
Partnership ("Roulston Ventures") and the Company entered into a Share Purchase
Option Agreement ("Agreement"). Pursuant to the terms of the Agreement, in the
event that TMT or Roulston Ventures intends to sell all or any part of their
shares of Common Stock of the Company, the selling party shall first offer to
the Company the opportunity to purchase such shares and, in the event that the
Company declines to purchase such shares, shall offer such shares to the other
party to the Agreement. Upon tender, the Company has 15 days within which to
accept the offer before the shares will be made available to the other party to
the Agreement. In the event that neither the Company nor the other party buys
the shares, they may be sold to a third party.
Effective as of October 1, 2002, Roulston Ventures renewed a loan to the
Company in the principal amount of $150,000 under a 6% convertible subordinated
note, due October 1, 2004. Interest was payable quarterly and the principal was
due at maturity. Effective October 1, 2004, Roulston Ventures converted the note
pursuant to its terms into Common Stock at the price of $5.00 per share, which
represented the fair market value per share of Common Stock as estimated by the
Board of Directors of the Company based on a review of bid, ask and close prices
during recent periods at the time of issuance of the note. This note was
subordinated to all senior bank debt and was approved on October 23, 2002 by
unanimous vote of the Board of Directors of the Company with Mr. Roulston
abstaining from the vote.
Effective as of October 1, 2002, Roulston Venture Capital, L.P. loaned the
Company $300,000 under a 6% convertible subordinated note due October 1, 2005.
Interest is payable quarterly and the principal is due at maturity. Roulston
Venture Capital, L.P. has the right to convert the note, or any portion thereof,
into Common Stock during the term of the note at the price of $5.00 per share,
which represents the fair market value per share of Common Stock as estimated by
the Board of Directors of the Company based on a review of bid, ask and close
prices during recent periods at the time of issuance of the note. This note is
subordinated to all senior bank debt and was approved on October 23, 2002 by
unanimous vote of the Board of Directors of the Company with Mr. Roulston
abstaining from the vote.
On December 18, 2002, American Stone Corporation, a wholly-owned
subsidiary of the Company, purchased approximately 150 acres of property
adjacent to the Company in the Township and Village of South Amherst, Lorain
County, Ohio from Amherst Quarry, Inc., P.O. Box 1072, Amherst, Ohio 44001 for
the purchase price of $500,000. The purchase price was determined by an
independent third party appraiser. Mr. Gasparini and Mr. Costantino are holders
of 60% and 20%, respectively, of the shares of Amherst Quarry, Inc. American
Stone Corporation delivered a promissory note to Amherst Quarry, Inc. for the
full purchase price bearing interest at the rate of 4.5% per annum with all
outstanding interest and principal due and payable in a single lump-sum
installment on November 21, 2007. In addition, upon the note's expiration, or if
during the term of the note any part of the property is sold to a third party,
American Stone Corporation is obligated to pay Amherst Quarry, Inc. on the
maturity date 50% of the difference between the fair market value of the
property and the purchase price of $500,000. The note is secured by a mortgage
deed executed by American Stone Corporation in favor of Amherst Quarry, Inc.
granting a mortgage lien upon the property. The transaction was approved on
November 20, 2002 by unanimous vote of the Board of Directors of the Company
with Mr. Gasparini and Mr. Costantino abstaining from the vote.
The Company has adopted a policy whereby in the event that management
recommends the Company, or any of its subsidiaries, enter into any business
transactions with a related party, such transactions will be reviewed by a
majority of the Board who are independent. In addition, if a Director is
affiliated with the subject related party, that Director will abstain from
voting on any such proposal.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's Directors, executive officers and
greater than ten percent stockholders to file reports of ownership and changes
in ownership with
the Securities and Exchange Commission and to furnish the Company with copies of
all such filings. Based solely on its review of copies of reports furnished to
the Company and, where applicable, any written representation that no reports
were required, the Company believes during fiscal 2003 all but one Section 16(a)
filing requirements were met. One Form 4 filing for Thomas H. Roulston II
regarding a single transaction on October 1, 2004 was reported late during 2004.
INDEPENDENT ACCOUNTANTS
The firm of Hobe & Lucas served as independent accountants for the Company
for the fiscal year ended December 31, 2004, and have been named as such for the
current fiscal year. Representatives of Hobe & Lucas are expected to be present
at the Annual Meeting with the opportunity to make a statement if they so desire
and to be available to respond to appropriate questions.
EXPENSES OF SOLICITATION
The Company expects to solicit proxies primarily by mail, but Directors,
officers and employees of the Company may also solicit proxies in person or by
telephone. All reasonable expenses in connection with the solicitation of
proxies will be borne by the Company. The Company will make arrangements for the
forwarding, at the Company's expense, of soliciting materials by brokers,
nominees, fiduciaries and other custodians to their principals.
STOCKHOLDERS' PROPOSALS FOR 2005 ANNUAL MEETING
Stockholder proposals to be presented at the 2006 Annual Meeting, which is
expected to be held in April 2006, must be received by the Corporate Secretary
if they are to be included in the Company's Proxy Statement and form of proxy by
November 18, 2005. To be eligible for inclusion in the 2006 proxy materials,
such proposal must conform to the requirements set forth in Regulation 14A
promulgated under the Exchange Act.
OTHER MATTERS
As of the date of this Proxy Statement, the management of the Company has
no knowledge of any matters to be presented for consideration at the meeting
other than those referred to above. If any other matters properly come before
the meeting, the persons named in the accompanying form of proxy intend to vote
such proxy according to their best judgment on such matters insofar as the
proxies are not limited to the contrary.
Upon the receipt of a written request from any stockholder entitled to
vote at the Annual Meeting, the Company will mail, at no charge to the
stockholder, a copy of the Company's Annual Report on Form 10-KSB, including the
financial statements and schedules required to be filed with the Securities and
Exchange Commission pursuant to Rule 13a-1 under the Exchange Act, for the
Company's most recent fiscal year. Requests from beneficial owners of the
Company's voting securities must set forth a good-faith representation that, as
of the record date for determination of stockholders entitled to vote at the
Annual Meeting, the person making the request was the beneficial owner of
securities entitled to vote at such Annual Meeting. Written requests for the
Annual Report on Form 10-KSB should be directed to: Michael J. Meier, Secretary,
American Stone Industries, Inc., 230 West Main Street, South Amherst, Ohio
44001-2926.
You are urged to sign and return your Proxy promptly in order to make
certain your shares will be voted at the Annual Meeting. For your convenience a
return envelope is enclosed requiring no additional postage if mailed in the
United States.
By Order of the Board of Directors,
/s/ Michael J. Meier
Michael J. Meier
Secretary
March 16, 2005
AMERICAN STONE INDUSTRIES, INC. PROXY
--------------------------------------------------------------------------------
IF NO INSTRUCTION IS INDICATED, AUTHORITY IS GRANTED TO CAST THE VOTE OF THE
UNDERSIGNED FOR THE ELECTION OF THE NOMINEES FOR DIRECTOR.
THE BOARD OF DIRECTORS RECOMMENDS THAT VOTES BE CAST FOR ALL NOMINEES.
(1) Election of Directors
Nominees: Enzo Costantino Glen Gasparini John R. Male
Michael J. Meier Timothy I. Panzica Thomas H. Roulston II Louis Stokes
[ ] FOR all nominees [ ] WITHHOLD AUTHORITY to vote for all nominees
(except as marked to the contrary)
INSTRUCTION: IF YOU WISH TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST ABOVE.
(2) In their discretion, the proxies are authorized to vote upon any other
business which may come before the meeting or any adjournments or
postponements thereof.
(Continued, and to be signed on other side)
--------------------------------------------------------------------------
AMERICAN STONE INDUSTRIES, INC.
PROXY THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS PROXY
The undersigned stockholder of American Stone Industries, Inc. (the "Company")
hereby appoints Thomas H. Roulston II and Glen Gasparini the proxies of the
undersigned to vote the shares of Common Stock of the undersigned at the 2005
Annual Meeting of Stockholders of the Company to be held at the Union Club of
Cleveland, 1211 Euclid Avenue, Cleveland, Ohio on Wednesday, April 20, 2005, at
10:30 a.m., local time, and at any adjournment thereof.
IF NO INSTRUCTION IS INDICATED ON THE OTHER SIDE, AUTHORITY IS GRANTED TO CAST
THE VOTE OF THE UNDERSIGNED FOR THE ELECTION OF THE NOMINEES FOR DIRECTOR.
Dated ____________________________, 2005
Signature_______________________________
________________________________________
NOTICE: When signing as a fiduciary or on behalf of a
corporation, limited liability company or other
similar entity, your title or capacity should be
shown.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.