SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One) FORM 10-K/A
[X]
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995
OR
[]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
For the transition
period from _______ to _______
Commission file 1-7276
number __________
EXOLON-ESK COMPANY
____________________________
(Exact name of registrant as
specified in its charter)
Delaware 16-0427000
_______________ ________________
(State or other (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or
organization)
1000 East Niagara Street,
Tonawanda, NY 14150
__________________________
(Address of Principal
Executive Offices)
(716) 693-4550
___________________________
(Registrant's telephone number,
including area code)
Name of each
exchange on which
Title of each class registered
___________________ _______________
Common stock $1 par Boston Stock
value Exchange
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of Registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. ( )
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No
At February 6, 1996 the aggregate market value of the publicly
traded voting stock held by nonaffiliates of the Registrant was
$2,200,105 based upon the closing price of the Registrant's
Common Stock on that date as reported by the Boston Stock
Exchange. Solely for the purposes of this calculation all
persons who are or may be Officers or Directors of the Registrant
and all persons or groups that have filed Schedules 13D with
respect to the Registrant's stock have been deemed to be
affiliates.
As of February 6, 1996, the Registrant had outstanding 481,995
shares of $1 par value Common Stock.
Documents Incorporated by Reference
Portions of the Registrant's 1993 Form 10-K, Form 10-Q for the
period ended September 30, 1993, Form 10-Q for the period ended
March 31, 1995, and the Proxy Statement dated April 5, 1996 are
incorporated by reference in Parts I, II and III of this report.
PART III
Item 10. Directors and Executive Officers of the Regristrant
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 Directors currently elected by the shares of Common
Stock and of the Series A Preferred Stock are Brent D. Baird,
Theodore E. Dann, Jr. and Patrick W.E. Hodgson (such persons are
hereinafter referred to as Common Directors, and the individuals
currently elected by the shares of Class A Common Stock and
Series B Preferred Stock are hereinafter referred to as Wacker
Directors). The Wacker Directors are Dirk Benthien, Dr. Hans
Essler, and Dr. Hans Herrmann.
The following table contains information relating to the
Company's Directors. Such information and the information with
regard to beneficial ownership of securities have been furnished
to the Company by the respective directors.
Shares of
Shares of the
the Company's
Company's Series A
Common Preferred
Stock Stock
Owned Owned
Year Bene- Bene-
First ficially ficially
Became as of as of
Name and Principal Direc- April 2, % of April 2, % of
Occupation Age tor 1996 Class 1996 Class
______________________ ___ ______ _________ _____ __________ _____
Common Directors
Theodore E. Dann, Jr. 42 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; Chief Executive
Officer of Buffalo
Technologies Corp.,
from April 11, 1994 to
present; Chairman of
the Board of Buffalo
Technologies Corp.
since March 15, 1995;
Vice President,
Director and Corporate
Attorney for Ferro
Alloys Services, Inc.,
since 1985; Director of
First Carolina
Investors, Inc.
Brent D Baird 57 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.
(1) See footnote (3) under table of more than 5% stockholders,
under Item 12 below, which is herein incorporated by reference.
(2) See footnote (2) under table of more than 5% stockholders,
under Item 12 below, which is herein incorporated by reference.
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.
Patrick W.E. Hodgson 55 1991 97,626(3) 20.3 18,334 94.7
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.
Wacker Directors:
Dirk Benthien 39 1996 -- -- -- --
President of Wacker
Chemicals (USA), Inc.
since 1994; Vice
President Finance and
Administration of
Wacker Silicones
Corporation, since
1992; Division Manager
- Administration of
Wacker Chemicals, East
Asia, Japan, 1990-1992
Dr. Hans Essler 63 1995 -- -- -- --
Senior Vice
President, Director
Regional Coordination
of Wacker-Chemie GmbH
since January 1988.
Dr. Hans Herrmann 60 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.
(3) Includes 57,626 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, under Item 12 below, which is herein
incorporated by reference.
Item 11. Executive Compensation
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 1995
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, 1995,
their were no omissions from or late filings of Section 16(a)
Reports.
Executive Officers
The executive officers of Exolon-ESK Company for 1996 are as
follows:
J. Fred Silver . . . . . . President and Chief Executive
Officer
James A. Bernardoni . . . . Vice President - Finance
Kersi Dordi . . . . . . . . Vice President - Aluminum
Oxide & Specialty Products
Armand Ladage . . . . . . . Vice President - Silicon
Carbide
John L. Redshaw . . . . . . Vice President - Sales &
Marketing
Nancy E. Gates, Esq. . . . Secretary
The business backgrounds of the Company's executive officers
are as follows:
Mr. Silver, age 50, has served as President and Chief
Executive Officer since February 15, 1996. From April 26, 1995
to February 15, 1996 he was a member of the Company s Board of
Directors. He served as President of Carborundum Abrasives Co.
from 1981 through 1992 and President of Time Release Sciences,
Inc., a foam manufacturer since January, 1993.
Mr. Bernardoni, age 51, has served as Vice President -
Finance since October, 1995. From January 1995 to October 1995,
he served as Acting Chief Financial Officer. From March 20, 1995
to October 1995 he served as Acting Principal Executive Officer.
He has been 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 47, has served as a Vice President of
Aluminum Oxide & Specialty Products Manufacturing since October
1995 and has served as the General Manager of the Company's
Canadian subsidiary, Exolon-ESK Company of Canada, Ltd., since
September 1992. In January 1995, he became a member of the
Company s Operating Committee and in March 1995 was appointed as
an executive officer on the Operating Committee. 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 42, has served as a Vice President Silicon
Carbide since October 1995. In January 1995, he became a member
of the Company s Operating Committee and in March 1995 was
appointed as an executive officer on the Operating Committee. He
served as the Plant Manager of the Company's Hennepin, Illinois
operations since 1978.
Mr. Redshaw, age 41, has served as Vice President of Sales
and Marketing since October 1995. In January 1995, he became a
member of the Company s Operating Committee, and in March 1995
was appointed as an executive officer on the Operating Committee.
He has served as Metallurgical Sales and Marketing Manager for
the Company since 1989.
Ms. Gates, age 31, has been the Corporate Secretary since
February 29, 1996. Since February 29, 1996, she has also been
employed as the Company s In-house Counsel. From 1990 to 1996,
Ms. Gates was a corporate attorney at the law firm of Magavern,
Magavern, & Grimm, LLP, Buffalo, New York.
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, 1995, 1994, and 1993 of those persons
who were, at December 31, 1995, (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").
Summary Compensation Table
Annual Compensation
___________________________
Name and
Principal All Other
Position Year Salary Bonus Compensation(1)
______________ _____ _______ _______ ___________
James A. 1995 $80,000 $45,000 $5,296
Bernardoni
Vice President
Finance 1994 $64,750 $7,000 $4,929
and Acting Chief
Executive Officer 1993 $63,000 --- $4,818
(1995)
Kersi Dordi 1995 $80,000 $45,000 $8,216
Vice President
Aluminum Oxide & 1994 $73,000 $8,350 $5,403
Specialty
Products 1993 $70,000 $7,000 $5,190
Armand Ladage 1995 $80,000 $45,000 $7,545
Vice President
Silicon Carbide 1994 $73,000 $8,842 $6,204
1993 $70,000 $2,135 $5,890
John L. Redshaw 1995 $85,000 $45,000 $5,077
Vice President of
Sales & Marketing 1994 $62,000 $21,700 $4,589
1993 $60,000 $21,000 $8,662
(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 and amounts accrued under the
Company's Retirement Plan for U.S. Salaried Employees and in the
case of Mr. Dordi and Mr. Ladage, amounts paid under a car
allowance policy.
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 Chemicals (USA), Inc.
("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 $3,444,000 and $1,814,000 of certain products from
Kempten, during 1995 and 1994, 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
Dirk Benthien, who is the President of Wacker Chemicals (USA),
Inc. (another wholly owned subsidiary of Wacker Chemie), serve on
the Executive Committee.
Item 12. 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 April 2, 1996, and such
stock ownership of all directors and officers of the Company as
a group as of that date are as follows:
Shares
of
Series Percent
A of Out-
Pre- stand-
Shares of Percent ferred ing
Common of Out- Stock Series
Stock stand- Benefi- A
Name & Address Benefi- ing cially Pre-
of Beneficial cially Common Owned ferred
Owner Owned (1) Stock (1) Stock
___________________________ ______ ______ ______ ______
Patrick W.E. Hodgson, et al 159,686(2) 33.1 18,334 94.7
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 28,744 6.0 --- ---
Institute of Technology . .
Castle Point Station
Hoboken, NJ 07030
The Exolon-ESK Company of 26,000 5.4 --- ---
Canada, 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
All Directors and Officers 250,486(6) 52.0 18,334 94.7
as a group (14 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 (57,626); 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.
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 April 2, 1996 is as follows:
Shares of Shares of
Class A Series B
Common Preferred
Stock Stock
Beneficially Beneficially
Owned Owned
Name & Address (Percent of (Percent of
of Beneficial Class Class
Owner Outstanding) Outstanding)
__________________________________ __________ ___________
Wacker Chemicals (USA), Inc. . . . . 512,897 19,364
c/o Wacker Chemical Holding (100%) (100%)
Corporation
3301 Sutton Road
Adrian, MI 49221-9397
Item 13. Certain Relationships and Related 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 $725,000 and $543,000 in the twelve months ended December 31,
1995 and December 31, 1994, 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").
Pursuant to Rule 403(b) of the Securities and Exchange Act,
the Directors disclose that Wacker Chemie GmbH ( Wacker ) through
its subsidiary Elektroschmelzwerk Kempten GmbH ( ESK ) executed a
letter of intent with Compagnie St. Gobain in the fall of 1995.
While the Directors representing the Common and Series A
Preferred shares ( the public shares ) have not been privy to the
terms of the letter of intent, they have been advised that the
letter of intent provides that Wacker will sell certain of its
assets to Compagnie St. Gobain. The sales price for these assets
has not been disclosed to the Company to date. If the sale is
consummated, St. Gobain will become the owner of assets formerly
owned by Wacker, including the following:
1. The Class A Common and Series B Preferred shares Wacker
currently owns of Exolon-ESK;
2. ESK s Delfsjil Plant in Holland; and
3. ESK s Grefath plant in Germany.
An application has been made to the Cartel Office in Berlin for
permission for Wacker Chemie GmbH to sell the above described
assets to St. Gobain. To date, the German Cartel Office has not
approved the sale of assets by Wacker to St. Gobain. After
canvassing the German refractory and abrasives industry as to the
projected anticompetitive effect such a sale would face in
Germany, the Cartel Office asked St. Gobain and Wacker for an
extension of time, and another hearing, before issuing its
determination. This determination is expected until April 30,
1996. It is not known whether the 1992 Exclusive Distributorship
Agreement between the owners of ESK, or its successors, and
Exolon-ESK Company will remain in existence. In the event that
the German Cartel Office approves the proposed sale by Wacker,
application for approval must be made to the Federal Trade
Commission of the United States ( FTC ) before a sale by Wacker
to St. Gobain of its shares in Exolon-ESK can be consummated.
The FTC will independently assess what effect the sale will have
on competition in the abrasives industry in the United States,
and is empowered to approve or disapprove a proposed transaction.
Any approval or disapproval would apply only to the Class A Common
and Series B Preferred shares and not to the public shares.
Pursuant to the requirements of Section 13 of the Securities
Exchange Act of 1934, the Registrant has duly caused this
amendment to be signed on behalf by the undersigned, thereunto
duly authorized.
April 15, 1996 EXOLON-ESK COMPANY
By: S/J. Fred Silver
__________________________________
J. Fred Silver
President and Chief Executive
Officer
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