EXOLON-ESK COMPANY
Annual Meeting of Stockholders
To be Held April 26, 1995
Notice is hereby given that the annual meeting of the
stockholders of EXOLON-ESK COMPANY will be held at the offices of
Hodgson, Russ, Andrews, Woods & Goodyear, One M & T Plaza,
Buffalo, New York on Wednesday, April 26, 1995 at 11:00 a.m. for
the following purposes:
1. To hold an election by the holders of the outstanding
shares of the Company's Common Stock and its Series A
$1.12 1/2 Convertible Preferred Stock of four persons
to the Company's Board of Directors to serve until the
next annual meeting of stockholders and until their
successors are elected and qualified.
2. To transact such other business as may properly come
before the meeting or any adjournment thereof.
In addition, at this meeting the holder of the Company's
outstanding shares of Class A Common Stock and its Series B
$1.12- 1/2 Convertible Preferred Stock will elect four members of
the Company's Board of Directors to serve until the next annual
meeting of stockholders and until their successors are elected
and qualified.
The Board of Directors has fixed the close of business on
March 15, 1995, as the record date for the determination of the
stockholders entitled to notice of and to vote at the annual
meeting of stockholders and at any adjournment thereof.
Attention is directed to the Proxy Statement printed on the
following pages.
By order of the Board of Directors
SHAWN M. HOWARD
Secretary
April 5, 1995
PLEASE INDICATE YOUR INSTRUCTIONS ON THE ENCLOSED PROXY
CARD, DATE AND SIGN IT, AND MAIL IT IN THE ENCLOSED ENVELOPE AS
PROMPTLY AS POSSIBLE. IF YOU ATTEND THIS MEETING, YOU MAY VOTE
IN PERSON AND THE PROXY WILL NOT BE USED.
<PAGE>
EXOLON-ESK COMPANY
PROXY STATEMENT
Annual Meeting of Stockholders
April 26, 1995
SOLICITATION OF PROXIES
This Proxy Statement is being furnished on or about April 5,
1995 to all holders of the Common Stock, par value $1.00 per
share ("Common Stock"), and the Series A $1.12 1/2 Convertible
Preferred Stock (the "Series A Preferred Stock") of Exolon-ESK
Company (the "Company") of record on March 15, 1995 in connection
with the solicitation of proxies in the form enclosed by the
Board of Directors of the Company for use at the annual meeting
of stockholders to be held on April 26, 1995, and at any
adjournments thereof. The Company's principal executive office
is located at 1000 East Niagara Street, Tonawanda, New York
14150.
Shares cannot be voted at the meeting unless the shareholder
is present or represented by proxy. When proxies in the
accompanying form are returned properly executed, the shares
represented thereby will be voted at the meeting in accordance
with the instructions contained in the proxy card, unless the
proxy is revoked prior to its exercise. A proxy may be revoked
at any time prior to its exercise by delivery of a written
revocation to the Secretary of the Company. Proxies submitted
with abstentions and broker non-votes will be counted in
determining whether or not a quorum is present. Abstentions and
broker non-votes will not be counted in tabulating the votes cast
on proposals submitted to shareholders.
At the close of business on March 15, 1995, the record date
for determining the holders of the Common Stock and the Series A
Preferred Stock entitled to vote at the annual meeting of
stockholders, there were outstanding 481,995 shares of Common
Stock and 19,364 shares of the Series A Preferred Stock of the
Company entitled to vote with respect to the election of
directors and the other matters to be considered at the meeting.
Each share has the right to one vote. At the close of business
on March 15, 1995, there were outstanding 512,897 shares of the
$1 par value Class A Common Stock (the "Class A Common Stock")
and 19,364 shares of the Series B $1.12 1/2 Convertible Preferred
Stock (the "Series B Preferred Stock") of the Company entitled to
vote with respect to the election of additional directors and the
other matters to be considered at the meeting. Each share has
the right to one vote. Except with respect to the election of
directors, both the affirmative vote of the holders of a majority
of the shares of Common Stock and the Series A Preferred Stock
voting together as a single class, and the affirmative vote of
the holders of a majority of the shares of the Class A Common
Stock and the Series B Preferred Stock voting together as a
separate single class, are required for the approval of all
matters to be brought before the meeting.
The cost of soliciting proxies will be borne by the Company.
In addition to this solicitation, the officers, directors, and
regular employees of the Company without any additional
compensation may solicit proxies by mail, facsimile, telephone or
personal contact. The Company will also request stockbrokers,
banks, and other fiduciaries to forward proxy material to their
principals or customers, who are the beneficial owners of shares,
and will reimburse them for their expenses. If no contrary
instruction is indicated, each proxy will be voted FOR the listed
proposals and in accordance with the discretion of the proxies on
any other matter which may properly come before the meeting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
COMMON STOCK AND SERIES A PREFERRED. The stock ownership of the only
persons known to the Company to be the beneficial owners of more than 5% of
the outstanding shares of the Common Stock and of the Series A Preferred
Stock as of March 15, 1995, and such stock ownership of all directors and
officers of the Company as a group as of that date are as follows:
<PAGE>
<TABLE>
<CAPTION>
Shares of Percent Shares of Percent
Common of Out- Series A of
Stock standing Preferred Outstand-
Name & Address Beneficially Common Stock ing
of Beneficial Owned (1) Stock Beneficia Series A
Owner lly Preferred
Owned (1) Stock
<S> <C> <C> <C> <C>
Patrick W.E. Hodgson, et al. . . 158,740(2) 32.9
248 Pall Mall
Suite 400 London, Ont.
Canada N6A 5P6
Ferro Alloys Services, Inc. . . . 90,800(3) 18.8
Suite 463
Carborundum Center
Niagara Falls, NY 14303
Trustees of the Stevens Institute 28,744 6.0
of Technology . . . . . . . . . .
Castle Point Station
Hoboken, NJ 07030
The Exolon-ESK Company of Canada 26,000 5.4
Ltd. . . . . . . . . . . . . . .
Consolidated Pension Plan
Reg. No. C-6808
181 Queen Street
Thorold, Ont., Canada L2V 5A9
Edward J. Bielawski, et al. . . . 30,600(4) 6.4
5150 Dorchester Rd., Unit 15
Niagara Falls, Ont., Canada L2E
6Z3
William J. Burke, III, et al. . . 30,370(5) 6.3
111 Devonshire Street
Boston, MA 02109
Estate of Ruth O'Rourke . . . . . 18,297 94
3456 Laurel Vale Drive
Studio City, CA 91604
All Directors and Officers as a 249,540(6) 51.8
group
(12 persons)
(1) The beneficial ownership information presented is based upon information
furnished by each person or contained in filings made with the
Securities and Exchange Commission.
(2) Beneficially owned by a group composed of: Patrick W.E. Hodgson
(56,680); William J. Magavern II and James L. Magavern, as co-executors
of the estate of Samuel D. Magavern (15,260); Brent D. Baird (1,300);
Aries Hill Corp. (a private holding company whose controlling
shareholders include Brent D. Baird, Bruce C. Baird, Brian D. Baird and
Bridget B. Baird) (14,000); Bridget B. Baird, as trustee of a family
trust (9,800); Jane D. Baird (9,000); The Cameron Baird Foundation (a
charitable foundation whose trustees include Jane D. Baird, Bridget B.
Baird, Brian D. Baird, Bruce C. Baird, Bronwyn B. Clauson and Brenda B.
Senturia) (5,700); First Carolina Investors, Inc. (a Delaware
corporation whose directors include Brent D. Baird, Bruce C. Baird,
Patrick W.E. Hodgson, Theodore E. Dann, Jr. and H. Thomas Webb)
(40,000); William J. Magavern II (5,000); and, James L. Magavern
(2,000). Members of the group had sole voting and investment power with
respect to 131,016 shares and shared voting and investment power with
respect to 27,724 shares, and reported that they had agreed to evaluate
jointly any proposal presented to the Company's shareholders pursuant to
which Wacker Chemical Corporation may acquire all or substantially all
of the assets of the Company.
(3) Owned by Ferro Alloys Services, Inc., a corporation of which Theodore E.
Dann, Jr., who is Chairman of the Board of the Company, is a director,
officer and corporate attorney. Includes 2,000 shares held in the name
of Mr. Dann's father that are beneficially owned by Ferro Alloys
Services, Inc.
(4) Includes 20,600 shares owned by Theeb, Ltd. ("Theeb") 4,000 shares owned
by Robert C. Thiel, 3,000 shares owned by Mr. Bielawski's sister and
3,000 shares owned by his brother all of which he has the power to vote.
Theeb is a company organized under the laws of Ontario which is
controlled by Messrs. Thiel and Bielawski (each of whom owns,
indirectly, 50% of its outstanding stock).
(5) Includes 25,500 shares owned by May and Gannon, Inc., a Massachusetts
corporation whose directors are William J. Burke, III (who is the
President), Ellen Burke Ryan and Helen D. Burke.
(6) Except as otherwise indicated above, members of the group have sole
voting and investment power with respect to such shares.
</TABLE>
<PAGE>
BENEFICIAL OWNER OF CLASS A COMMON STOCK AND SERIES B
PREFERRED STOCK. The stock ownership of the only beneficial
owner of the Class A Common Stock and Series B Preferred Stock of
the Company as of March 15, 1995 is as follows:
<TABLE>
<CAPTION>
Shares of
Series B
Preferred
Shares of Stock
Class A Common Beneficially
Stock Owned
Name & Address Beneficially (Percent of
of Beneficial Owned Class
Owner (Percent of Class Outstanding)
Outstanding)
<S> <C> <C>
Wacker Chemical Corporation . . . . . 512,897 (100%) 19,364
Suite 240 (100%)
460 McLaws Circle
Williamsburg, VA 23185
</TABLE>
<PAGE>
PROPOSAL 1 - ELECTION OF DIRECTORS
The Board of Directors consists of eight members, four of
whom are elected by the outstanding shares of Common Stock and
Series A Preferred Stock voting as a class, and four of whom are
elected by the outstanding shares of Class A Common Stock and
Series B Preferred Stock voting as a class.
The nominees for election as directors by the shares of
Common Stock and of the Series A Preferred Stock, with respect to
whom proxies are being solicited hereby, are Brent D. Baird,
Theodore E. Dann, Jr., Patrick W. E. Hodgson and J. Fred Silver
(such persons are hereinafter referred to as the nominees for
election as "Common Directors," and the individuals nominated for
election by the shares of Class A Common Stock and Series B
Preferred Stock are hereinafter referred to as nominees for
election as "Wacker Directors"). All nominees, except Mr.
Silver, are presently members of the Board.
The shares represented by the enclosed proxy will be voted
for the Board of Directors' nominees for election as Common
Directors unless authority is withheld. In the event that any
such nominee for director should become unavailable (which is not
anticipated), it is intended that such shares will be voted for
such substitute nominee or nominees as may be determined by the
Board of Directors or that a vacancy will be left in the
membership to be filled subsequently by the Board of Directors.
Representatives of Wacker Chemical Corporation, owner of all
of the outstanding shares of the Class A Common Stock and Series
B Preferred Stock, have indicated to the Company that such shares
will be voted for the election of the following persons as
directors: Dr. Eberhard Cleff, Dr. Hans Herrmann, Joseph R.
Pinotti and Hans-Jurgen Zippel. All are presently members of the
Board.
Information as to the nominees for directors is furnished in
the following table. Such information and the information with
regard to beneficial ownership of securities have been furnished
to the Company by the respective directors.
<PAGE>
<TABLE>
<CAPTION>
Shares of
the
Company's
Year Common Stock
First Owned Percent
Became Beneficially of Class
Name and Principal Age Director as of March
Occupation 15, 1995
Nominees for Election as
the Common Directors
<S> <C> <C> <C> <C>
Theodore E. Dann, Jr. . . . 41 1986 90,800(1) 18.8
Chairman of the Company's
Board of Directors since
June 1, 1992; Corporate
Secretary of the Company
from January 1, 1987
through June 1, 1992; Vice
President, Director and
Corporate Attorney for
Ferro Alloys Services,
Inc., since 1985; Director
of First Carolina
Investors, Inc.
Brent D Baird . . . . . . . 56 1994 79,900(2) 16.6
Private investor,
Chairman of First Carolina
Investors, Inc.; Director
of First Empire State
Corporation (bank holding
company); Merchants Group,
Inc.; Oglebay Norton
Company and Todd Shipyards
Corporation; Prior to 1992
was a limited partner of
Trubee, Collins & Co., a
member of the New York
Stock Exchange, Inc.
Patrick W.E. Hodgson . . . 54 1991 96,680(3) 20.1
President , Cinnamon
Investments, London,
Ontario, investment firm,
since 1989; Chairman of
Todd Shipyards, Inc., since
Feb. 1993; President,
London Machinery Co.,
concrete and aggregate
machinery, 1964-1989;
Director, First Empire
State Corp., First Carolina
Investors, Inc., and
Scott's Hospitality, Ltd.
J. Fred Silver . . . . . . 49 --- --- ---
President, Time Release
Sciences Inc., foam
manufacturing, since
January, 1993; President,
Carborundum Abrasives Co.
from 1983 through 1992.
Nominees for Election as
Wacker Directors
Dr. Eberhard Cleff. . . . 51 1986 --- ---
Vice President-Finance of
Wacker-Chemie, GmbH since
1985; Executive Director of
Continental Illinois, Ltd.,
a London Merchant Bank,
1983-84; Vice President and
Arca Manager for Germany,
Austria and Switzerland of
Frankfort branch of
Continental Illinois Bank
and Trust Company, 1974-83.
Dr. Hans Herrmann . . . . . 59 1986 --- ---
A Managing Director of
Elektroschmelzwerk Kempten
GmbH of Germany since 1986;
Vice President of Wacker-
Chemitronic GmbH, a wholly-
owned subsidiary of Wacker
Chemie GmbH, 1982-86;
Executive Vice President
and General Manager of
Wacker Siltronic
Corporation, a wholly-owned
subsidiary of Wacker
Chemical Corporation, 1978-
82.
Joseph R. Pinotti . . . . . 65 1991 --- ---
President of Wacker
Chemical Corporation since
May 1, 1991, employee of
Wacker Chemical Corporation
since January 1, 1991;
consultant to chemical and
health care industries,
1988-1990; Group Vice-
President -Chemicals of
BASF Corporation 1978-1988.
Hans-Jurgen Zippel . . . . 53 1992 --- ---
Member of the Board of
Management of
Elektroschmelzwerk Kempten
GmbH of Germany since 1986;
member of the Supervisory
Board of Elektroschmelzwerk
Delfzilvl, B.V. since 1986.
__________________________________
(1) See footnote (3) under table of more than 5% stockholders,
above.
(2) See footnote (2) under table of more than 5% stockholders,
above. Includes 1,300 shares owned by Mr. Baird, 14,000
shares owned by Aries Hill Corp., 18,800 shares owned by
members of Mr. Baird's immediate family who share his
household but as to which he has no voting or investment
power, 5,700 shares owned by The Cameron Baird Foundation and
40,000 shares owned by First Carolina Investors, Inc.
(3) Includes 56,680 shares owned by Mr. Hodgson and 40,000 shares
owned by First Carolina Investors, Inc. of which Mr. Hodgson
is a director. See footnote (2) under table of more than 5%
stockholders, above
</TABLE>
COMMITTEES OF THE BOARD
The Board of Directors met seven times during 1994. During
1994, all directors attended at least 75% of the aggregate of
meetings of the Board of Directors and of those committees of the
Board on which they served except for Messrs. Cleff and Zippel,
who attended 56% and 44% of such meetings, respectively.
The By-laws of the Company provide for a four member
Executive Committee of the Board of Directors. Action by the
Executive Committee can only be taken by the affirmative vote of
a majority of the Committee, including at least one director
elected by the Common Stockholders and one director elected by
the Class A Common Stockholders. The By-Laws also provide that
the Executive Committee, to the extent provided for by resolution
of the Board of Directors and subject to the General Corporation
Law of the State of Delaware, shall have all the powers and
authority of the Board of Directors in the management of the
business affairs of the Company.
The Executive Committee is composed of Theodore E. Dann,
Jr., Dr. Hans Herrmann, Patrick W.E. Hodgson and Joseph R.
Pinotti. The Executive Committee is currently fulfilling the
responsibilities of a compensation committee in setting the
compensation of the officers of the Company and its subsidiaries.
The Executive Committee held one meeting in 1994 at which
executive compensation was discussed.
The Audit Committee, which included Brent D. Baird, William
J. Burke, III, Edward J. Bielawski, Dr. Eberhard Cleff and Hans
Jurgen Zippel, has responsibility for reviewing with the auditors
the scope of the audit work performed, estimating audit fees,
considering questions and technical audit and tax issues arising
in the course of the audit work, and inquiring as to related
matters such as adequacy of internal controls. The Audit
Committee met three times in 1994.
The Company does not have a Nominating Committee.
COMPENSATION OF DIRECTORS
The Company's directors other than the Chairman have the
right to receive from the Company an annual retainer fee of
$2,000, and $500 for each meeting of the Board or meeting of a
committee of the Board they attend, but not to exceed $500 for
any one day. Director fees payable to Wacker Directors for 1994
were paid to Wacker Chemical Corporation. The Chairman, Mr.
Dann, receives an annual retainer fee of $50,000 plus the meeting
fees received by the other directors.
COMPLIANCE WITH SECTION 16 OF THE SECURITIES EXCHANGE ACT
Under Section 16 of the Securities Exchange Act of 1934, as
amended, directors, executive officers and persons who own more
than 10% of the Company's common stock are required to report
their ownership of equity securities of the Company, and any
changes in that ownership to the Securities Exchange Commission
and to the Company. Based solely upon a review of reports
furnished to the Company (the "Section 16(a) Reports") by such
persons on Forms 3, 4 or 5 for the year ended December 31, 1994,
their were no omissions from or late filings of Section 16(a)
Reports, except that Theodore E. Dann, Jr., a director of the
Company, filed one Form 4 late with respect to one transaction.
EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
The executive officers of Exolon-ESK Company are as follows:
<S> <C>
James A. Bernardoni . . . . . . . . Acting Principal Executive
Officer and Acting Chief
Financial Officer
Kersi Dordi . . . . . . . . . . . . Officer, Member of the
Operating Committee
Armand Ladage . . . . . . . . . . . Officer, Member of the
Operating Committee
John L. Redshaw . . . . . . . . . . Officer, Member of the
Operating Committee
</TABLE>
The business backgrounds of the Company's executive officers are
as follows:
Mr. Bernardoni, age 50, has been the Acting Principal
Executive Officer since March 20, 1995, and the Acting Chief
Financial Officer and a Member of the Company's Operating
Committee since January 18, 1995. From 1989 to January 1995, he
served as the Controller of the Company, and from 1984 to 1989,
he served as an Accounting Manager for the Company.
Mr. Dordi, age 46, has been an Officer since March 20, 1995,
and a Member of the Company's Operating Committee since January
18, 1995, and he has served as the General Manager of the
Company's Canadian subsidiary, Exolon-ESK Company of Canada,
Ltd., since September 1992. From November 1990 to September
1992, he served as the Plant Manager for the Company's Thorold,
Ontario plant, and from 1986 to November of 1990, he served the
Company in various technical and managerial capacities.
Mr. Ladage, age 41, has been an Officer since March 20,
1995, and a Member of the Company's Operating Committee since
January 18, 1995, and he has served as the Plant Manager of the
Company's Hennepin, Illinois operations since 1978.
Mr. Redshaw, age 40, has been an Officer since March 20,
1995, and a Member of the Company's Operating Committee since
January 18, 1995, and he has served as Metallurgical Sales and
Marketing Manager for the Company since 1989.
The Board of Directors has suspended Hans Pfingstl, the
President and Chief Executive Officer of the Company, from all
duties and responsibilities as an officer and employee of the
Company pending final disposition of the legal proceedings
instituted by the federal government relating to alleged
antitrust violations. As a result of the suspension, Mr.
Pfingstl will have no involvement in either the day to day
operations or policy decisions for the Company or any of its
subsidiaries and will not be physically present on any Company
premises. However, Mr. Pfingstl is expected to assist Company
counsel in defending the antitrust action, and in preparing his
own defense.
COMPENSATION OF EXECUTIVE OFFICERS
The following Summary Compensation Table sets forth
information concerning compensation for services in all
capacities for the Company and its subsidiaries for the fiscal
years ended December 31, 1994, 1993, and 1992 of those persons
who were, at December 31, 1994, (i) the chief executive officer
of the Company and (ii) executive officers of the Company and its
subsidiaries whose annual base salary and bonus compensation
exceeded $100,000, (collectively, the "Named Officers").
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation
___________________________
______
Name and
All Other Principal
Year Salary Bonus Compensation Position
(1)
<S> <C> <C> <C> <C>
Hans Pfingstl 1994 $162,000 --- $2,016
President and 1993 $156,288 --- $1,621
Chief Executive
Officer
1992 $156,912 $52,885 $1,511
William H. Nehill 1994 $120,000 --- $8,796
Executive Vice
1993 $115,769 --- $8,574 President
1992 $114,231 $38,500 $8,410
</TABLE>
(1) Includes matching contributions made by the Company
under the Company's Retirement and Savings Plan for U.S. Salaried
Employees (the "401(K) Plan"). Also includes premiums paid by
the Company on term life insurance for the named Officers, and,
in the case of Mr. Nehill, amounts accrued under the Company's
Retirement Plan for U.S. Salaried Employees.
REPORT OF THE EXECUTIVE COMMITTEE ON EXECUTIVE COMPENSATION
The Executive Committee of the Board of Directors currently
has among its responsibilities the supervision and approval of
Company established executive compensation, including annual base
compensation reviews and incentive compensation awards. The
Executive Committee determines what it believes to be the
appropriate level of compensation for senior executives based on
the Company's performance, the executive's contribution to that
performance, and the responsibilities of the Corporation
entrusted to that executive.
The Committee's guidelines on compensation start with the
basic criterion that in order to retain qualified managers,
executive compensation should be competitive with similar
positions in similar sized companies and contain an incentive
portion that is intended to stimulate superior performance for
shareholders.
Compensation for Exolon-ESK executives consists of an annual
base salary plus an Incentive Award Plan. The base salary is
reviewed and is subject to change annually, and a new Incentive
Award Plan is instituted each year. The Incentive Award Plan is
a cash award plan based on profit performance of the Company and
other key criteria that are considered likely to influence both
its short term and long term profitability.
In setting the 1994 base salaries for the President and the
Executive Vice President (the other Named Officer in the Summary
Compensation Table), the Executive Committee considered the
criteria previously discussed. No increases of base salary were
proposed or made for 1994.
The Company's 1994 Incentive Award Plan (the "Plan") for the
President provided that he would earn points based on various
performance criteria including the amount of the Company's North
American earnings before taxes for the year; reductions in days
sales in inventories and accounts receivable; absence of lost
time from work due to accidents in the work place; absence of
environmental, industrial hygiene or work stoppage caused by
governmental or regulatory agency action; improvements in
employee productivity; timely completion of a management
restructuring; timely resolution of certain environmental
problems at the Company's work sites; and preparation of a
strategic marketing plan.
The award of up to two thirds of the points available under
the Plan was based on the achievement of the annual earnings
goal. Depending upon the achievement of specific point
thresholds, the President could have earned up to $50,000 in
bonuses. A similar set of goals provided for the award of up to
$35,000 to the Executive Vice President. No awards were earned
under the Plan for 1994.
In establishing the 1994 Plan and the threshold
profitability levels for incentive attainment, the Executive
Committee evaluated several factors including the Company's 1994
Business Plan, current and projected competitive conditions,
forecasted market condition for the Company's products and,
finally, management's strategies and action plans for attaining
specific profitability targets for 1994.
In the Executive Committee's opinion, the Company's
executive officers were adequately compensated in 1994 when
compared to other executives in similar positions in companies of
similar size. The Company does not provide long term
compensation to its officers and, other than as described in the
footnotes to the "Summary Compensation Table", above, does not
provide perquisites to its officers.
Membership of the Executive Theodore E. Dann, Jr.
Committee: Dr. Hans Herrmann
Patrick W.E. Hodgson
Joseph R. Pinotti
SUMMARY SHARE PERFORMANCE GRAPH
As part of the executive compensation information presented
in the Proxy Statement, the Securities and Exchange Commission
requires a five-year comparison of stock performance for the
Company with stock performance with a broad market index and with
appropriate similar companies. The Company's common stock is
traded on the Boston Stock Exchange and one appropriate broad
market index comparison is with the NASDAQ Stock Market Total
Return Index (U.S. Companies). The closest peer group index, on
a line-of-business basis, which could be found was the Peer Group
Index for NASDAQ stocks under SIC Major Group 32, for
manufacturers of stone, clay, glass and concrete products, which
was the second comparison selected for this Proxy Statement.
The annual change for the five-year period shown in the
graph is based (as required by SEC rules) on the assumption that
$100 had been invested in the Company's stock on December 31st of
1989 and that all dividends had been re-invested quarterly during
the period. The total cumulative dollar returns shown on the
graph represents the value that the investments would have had on
December 31, 1994. The calculations exclude trading commissions
and taxes.
<TABLE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
Among NASDAQ Total Index, NASDAQ Line of Business Index and the Exolon-ESK Co.
<CAPTION>
Measurement Period Exolon-ESK NASDAQ NASDAQ Line
(Fiscal Year Covered) Company Total Index of Business
Stocks
<S> <C> <C> <C>
Measurement Pt-12/31/89 $100 $100 $100
YE 12/31/90 $108 $ 85 $ 83
YE 12/31/91 $139 $136 $109
YE 12/31/92 $123 $159 $181
YE 12/31/93 $148 $181 $272
YE 12/31/94 $124 $177 $261
Assumes $100 invested on December 31, 1989 in NASDAQ Stock Market,
NASDAQ Line of Business Stocks (Based on SIC Code) and the Exolon-ESK Company
Source: The University of Chicago Graduate School of Business CRSP
</TABLE>
COMPENSATION (EXECUTIVE) COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION
Elektroschmelzwerk Kempten GmbH ("Kempten") is a subsidiary
of Wacker Chemie GmbH ("Wacker Chemie"), which is the owner of
all of the outstanding stock of Wacker Chemical Corporation
("Wacker"), and Wacker is the owner of all of the Company's
outstanding Class A Common Stock and Series B Preferred Stock.
The Company is the successor to a merger of ESK Corporation
(wholly owned subsidiary of Wacker) into The Exolon Company which
was effected on April 27, 1984. Pursuant to an exclusive
distributorship and sales representation agreement which was
entered into with Kempten at the time of the merger, the Company
purchased $1,814,000 and $3,810,000 of certain products from
Kempten, during 1994 and 1993, respectively.
The Company and Kempten maintain a joint patent covering
certain technology developed and implemented at the Company's
Hennepin facility and are joint applicants with respect to
another such patent. The patent and patent application relate to
joint ownership rights in the subject technology.
Dr. Hans Herrmann, who is Managing Director of Kempten and
Joseph R. Pinotti, who is the President of Wacker, serve on the
Executive Committee.
CERTAIN RELATED PARTY TRANSACTIONS
The Company has a royalty agreement with Theeb Ltd.
("Theeb") covering the production of crude aluminum oxide at the
Company's Thorold, Ontario plant using process technology
acquired as part of the construction and completion of an
aluminum oxide furnace. A separate royalty agreement with
International Oxide Fusion, Inc. ("IOF") covers the production of
specialty product for refractory markets. The agreements are for
a period of ten years each and expire July 31, 1996 and April 30,
2001, respectively.
Royalties paid by the Company under the agreements amounted
to $543,000 and $641,000 in the twelve months ended December 31,
1994 and December 31, 1993, respectively.
Edward J. Bielawski, who beneficially owns 6.4% of the
Company's Common Stock, is also the President of IOF. Theeb is a
holding company formed under the laws of the Province of Ontario,
which is controlled by Mr. Bielawski and Robert C. Thiel (each of
whom owns, indirectly, 50% of Theeb's outstanding stock). Theeb
and Messrs. Bielawski and Thiel beneficially own in the aggregate
30,600 shares of the Company's Common Stock (see "Security
Ownership of Certain Beneficial Owners and Management").
INDEPENDENT AUDITORS
On October 6, 1994, the Board of Directors selected Ernst &
Young LLP ("Ernst & Young") as the Company's independent public
accountants for the 1994 fiscal year and dismissed Arthur
Andersen LLP ("Arthur Andersen"). Ernst & Young has also been
selected as the Company's independent public accountants for the
1995 fiscal year.
Arthur Andersen & Co. was the independent accounting firm
which audited the financial statements of the Company for each
fiscal year from 1989 through 1993. Arthur Andersen's report on
the Company's financial statements for the fiscal year ended
December 31, 1993 was modified by the following statement:
"As further discussed in Note 14, to the consolidated
financial statements, the Company is involved in
antitrust litigation and with claims of its alleged
noncompliance with certain environmental regulations.
The outcomes of these matters are uncertain at this
time and related loss contingencies, if any, are
currently not estimable. Accordingly, no provisions
for any liabilities that may result upon resolution of
these matters have been made in the accompanying
financial statements. As discussed in Note 11 to the
consolidated financial statements, effective January 1,
1993, the Company changed its method of accounting for
postretirement benefits for U.S. employees in
accordance with Statement of Financial Accounting
Standards No. 106 Employer's Accounting for
Postretirement Benefits Other Than Pensions."
Excerpts for the aforementioned modification, Arthur Andersen's
reports on the Company's financial statements for the past two
fiscal year's have not contained an adverse opinion or disclaimer
of opinion, or been qualified or modified for uncertainty, audit
scope, or accounting principles.
1. During the Company's two most recent fiscal years and
any subsequent interim period preceding the date of the selection
of Ernst & Young, there were no disagreements between the Company
and Arthur Andersen 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 Arthur Andersen, would have caused it to make
reference to the subject matter of the disagreement in connection
with its report.
2. During the Company's two most recent fiscal years and
any subsequent interim period preceding the selection of Ernst &
Young, none of the following events occurred:
(a) Arthur Andersen advised the Company that the internal
controls necessary for the Company to develop reliable
financial statements did not exist;
(b) Arthur Andersen having advised the Company that
information has come to its attention that had led it
to no longer be able to rely on management's
representations, or that made it unwilling to be
associated with the financial statements prepared by
management;
(c) (1) Arthur Andersen having advised the Company of the
need to expand significantly the scope of its audit, or
that information had come to its attention during the
such time period, that if further investigated might
(i) materially impact the fairness or reliability of
either: a previously issued audit report or the
underlying financial statements; or the financial
statements issued or to be issued covering the fiscal
periods subsequent to the date of the most recent
financial statements covered by an audit report
(including information that may prevent it from
rendering an unqualified audit report on those
financial statements), or (ii) cause it to be unwilling
to rely on management's representations or be
associated with the registrant's financial statements;
and (2) due to the failure to reappoint Arthur
Andersen as accountants for the Company or for any
other reason, Arthur Andersen did not so expand the
scope or its audit or conduct such further
investigation; or
(d) (1) Arthur Andersen having advised the Company that
information has come to its attention and that it had
concluded that the information materially impacts the
fairness or reliability of either (i) a previously
issued audit report or the underlying financial
statements, or (ii) the financial statements issued or
to be issued covering the fiscal period(s) subsequent
to the date of the most recent financial statements
covered by an audit report (including information that
unless resolved to Arthur Andersen's satisfaction,
would prevent it from rendering an unqualified audit
report on those financial statements; and (2) due to
the failure to reappoint Arthur Andersen as accountants
for the Company or for any other reason, the issue has
not been resolved to its satisfaction.
During the Company's two most recent fiscal years and any
interim period prior to October 6, 1994, the Company (or someone
acting on its behalf) did not consult Ernst & Young regarding
any matter that was either (i) the subject of a disagreement as
described in paragraph number "1" above, or (ii) the subject of
any event described in paragraph number "2" above.
A representative of Ernst & Young is expected to be present
at the annual meeting of shareholders, will be available to
respond to appropriate questions and will be given an opportunity
to make a statement if he or she so desires.
STOCKHOLDER PROPOSALS
Stockholder proposals for inclusion in proxy materials for
the 1996 Annual Meeting of Stockholders should be addressed to
the Company's President, 1000 East Niagara Street, Tonawanda, New
York 14150 must be received before December 4, 1995.
<PAGE>
OTHER BUSINESS
Management knows of no other matters which may come before
the meeting. If any other matters are properly presented, it is
the intention of the persons named in the proxy to vote or
otherwise act in accordance with their best judgment.
ACCOMPANYING THIS PROXY STATEMENT IS A COPY OF PORTIONS OF
THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED
DECEMBER 31, 1994. ANY STOCKHOLDER WHO HAS NOT BEEN FURNISHED A
COMPLETE COPY OF THE COMPANY'S FORM 10-K REPORT WITH THIS PROXY
STATEMENT MAY OBTAIN A COPY WITHOUT CHARGE, AND ANY STOCKHOLDER
MAY OBTAIN COPIES OF ANY EXHIBITS THERETO UPON PAYMENT OF A
REASONABLE FEE, BY WRITING TO SHAWN M. HOWARD, SECRETARY OF
EXOLON-ESK COMPANY, 1000 E. NIAGARA STREET, TONAWANDA, NEW YORK
14150.
By order of the Board of Directors
SHAWN M. HOWARD
Secretary
Dated: April 5, 1995
<PAGE>
<TABLE>
<CAPTION>
[X] Please Mark Votes
as in this Example.
<S> <C>
1.) Election of Directors 2.) In accordance with the
[__] For discretion of the
[__] Withhold proxies on such other
[__] For All Except matters as may properly
come before the meeting.
THEODORE E. DANN, JR.;
BRENT D. BAIRD; PATRICK
W.E. HODGSON; and J. FRED
SILVER
If you do not wish your
shares voted "FOR" a
particular nominee, mark
the "For All Except" box
and strike a line through
the nominee(s) name. Your
shares will be voted for
the remaining nominee(s).
RECORD DATE SHARES:
Please be sure to sign and date this Proxy. Date: _______________
_________________________________________________ Mark box at right
Shareholder sign here Co-owner sign here if comments or
address change
have been noted
on the reverse
side of this
card. [___]
</TABLE>
_________________________________________________________________
DETACH CARD DETACH CARD
EXOLON-ESK COMPANY
Dear Stockholders:
Please take note of the important information enclosed with this Proxy
Ballot. There is one issue related to the management and operation of
your Company that requires your immediate attention and approval. It
is discussed in detail in the attached proxy materials.
Your vote counts, and you are strongly encouraged to exercise your
right to vote your shares.
Please mark the boxes on the proxy card to indicate how your shares
shall be voted. Then sign the card, detach it and return your proxy
vote in the enclosed postage paid envelope.
Your vote must be received prior to the Meeting of Stockholders,
April 26, 1995.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
EXOLON-ESK COMPANY
<PAGE>
EXOLON-ESK COMPANY
Proxy for Annual Meeting of Stockholders
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Theodore E. Dann, Jr. and Brent D.
Baird, and each of them, with full power of substitution, as proxies
to represent and vote all shares of stock which the undersigned would
be entitled to vote, if personally present at the Annual Meeting of
Stockholders of Exolon-Esk Company to be held at the offices of
Hodgson, Russ, Andrews, Woods and Goodyear, One M & T Plaza, Buffalo,
New York on Wednesday, April 26, 1995 at 11:00 a.m. Eastern Time, and
at any adjournments thereof, with respect to the matters described on
the reverse side.
The Board of Directors recommends a vote "FOR" item 1. The shares
represented by the proxy will be voted "FOR" the matters specified
herein if no director is indicated.
PLEASE VOTE, DATE, AND SIGN ON OTHER SIDE AND
RETURN PROMPTLY IN ENCLOSED ENVELOPE.
Please sign this proxy exactly as your name appears on the books of
the Company. Joint owners should each sign personally. Trustees and
other fiduciaries should indicate the capacity in which they sign, and
where more than one name appears, a majority must sign. If a
corporation, this signature should be that of an authorized officer
who should state his or her title.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
_______________________________ _______________________________
_______________________________ _______________________________
_______________________________ _______________________________
