SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Exolon-ESK Company
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a- 6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and O-11.
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule O-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.
<PAGE>
EXOLON-ESK COMPANY
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 24, 1996
Notice is hereby given that the Annual Meeting of the
Stockholders of EXOLON-ESK COMPANY will be held at the offices of
Exolon-ESK Company, 1000 East Niagara Street, Tonawanda, New York
on Wednesday, April 24, 1996 at 10:00 a.m. for the following
purposes:
1. To consider and act upon a proposal to amend the
Company's Restated Certificate of Incorporation (A) by
amending Article Fifth thereof to reduce the number of
directors of the Company from eight to six and (B) by
amending Article Sixth thereof to reduce from five to
four the number of directors whose affirmative vote is
required to amend the By-laws of the corporation.
2. To hold an election by the holders of the outstanding
shares of the Company's Common Stock and its Series
$1.12 1/2 Convertible Preferred Stock of three persons
(four persons if proposal number one is not approved)
to the Company's Board of Directors to serve until the
next Annual Meeting of Stockholders and until their
successors are elected and qualified.
3. 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 three members of the
Company's Board of Directors (four persons if proposal number one
is not approved) 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
April 2, 1996, 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
NANCY E. GATES, ESQ.
Corporate Secretary
April 3, 1996
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 24, 1996
SOLICITATION OF PROXIES
This Proxy Statement is being furnished on or about April 3,
1996 to all holders of the Common Stock, par value $1.00 per
share ("Common Stock"), and of the Series A $1.12 1/2 Convertible
Preferred Stock (the "Series A Preferred Stock") of Exolon-ESK
Company (the "Company") of record on April 2, 1996 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 24, 1996, 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 April 2, 1996, 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 April 2, 1996, 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 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:
<TABLE>
<CAPTION>
SHARES OF PERCENT
SHARES OF PERCENT SERIES A OF
COMMON OF PREFERRED OUTSTAND-
STOCK OUTSTAND STOCK ING
NAME & ADDRESS BENEFIC- -ING BENEFIC- SERIES A
OF BENEFICIAL IALLY COMMON IALLY PREFERRED
OWNER OWNED (1) STOCK OWNED (1) STOCK
<S> <C> <C> <C> <C>
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 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
All Directors and Officers as a 250,486(6) 52.0 18,334 94.7
group (14 persons)
</TABLE>
(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:
<TABLE>
<CAPTION>
SHARES OF
SHARES OF SERIES B
CLASS A COMMON PREFERRED
STOCK STOCK
BENEFICIALLY BENEFICIALLY
NAME & ADDRESS OWNED OWNED
OF BENEFICIAL (PERCENT OF CLASS (PERCENT OF CLASS
OWNER OUTSTANDING) OUTSTANDING)
<S> <C> <C>
Wacker Chemicals (USA), Inc. . . 512,897 (100%) 19,364 (100%)
Suite 240
460 McLaws Circle
Williamsburg, VA 23185
</TABLE>
Proposal 1 - Amendment to the Restated Certificate of
Incorporation
The Board of Directors presently consists of eight members,
four of whom were elected by the outstanding shares of Common
Stock and Series A Preferred Stock voting as a class, and four of
whom were elected by the outstanding shares of Class A Common
Stock and Series B Preferred Stock voting as a class.
The directors elected by the holder of the Class A Common
Stock and the Series B Preferred Stock (hereinafter referred to
as the "Wacker Directors") requested that the size of the Board
of Directors of the Company be reduced from eight to six on the
basis that six directors would provide adequate representation
and that, under the circumstances, the provision for two extra
directors created additional expenses for the Company and made it
more difficult to convene Board meetings. The directors elected
by the shares of Common Stock and Series A Preferred Stock
(hereinafter referred to as the "Common Directors") agreed to the
change.
Accordingly, by resolution dated March 26, 1996, the Board
approved and recommended for adoption by shareholders an
amendment to the Company's Restated Certificate of Incorporation
(the "Certificate") that would amend Article Fifth of the
Certificate to reduce the number of directors from eight to six.
A corresponding change to Article Sixth of the Certificate to
reduce the number of directors whose affirmative vote is required
in order to amend the Company's By-laws from five to four, was
also approved and is recommended to shareholders.
A vote in favor of adoption by a majority of the shares of
Common Stock and Series A Preferred Stock voting together as a
separate class and by a majority of the shares of Class A Common
Stock and Series B Preferred Stock voting as a separate class is
required for approval of proposal number 1.
Reference is made to the Amendment to the Restated
Certificate of Incorporation attached hereto as Appendix A for
the complete terms of the proposed amendments.
The Board of Directors recommends a vote FOR the adoption of
the proposed Amendment to the Company's Restated Certificate of
Incorporation.
PROPOSAL 2 -- ELECTION OF DIRECTORS
If proposal number 1 is approved, the Board of Directors
will consist of six members, three of whom are elected by the
outstanding shares of Common Stock and Series A Preferred Stock
voting as a class (Common Directors), and three of whom are
elected by the outstanding shares of Class A Common Stock and
Series B Preferred Stock voting as a class (Wacker Directors).
The nominees for election as Common Directors, with respect
to whom proxies are being solicited hereby, are Brent D. Baird,
Theodore E. Dann, Jr., and Patrick W.E. Hodgson. All nominees
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
Common Directors or that a vacancy will be left in the membership
to be filled subsequently by the Common Directors.
Representatives of Wacker Chemicals (USA), Inc., 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 directors:
Dirk Benthien, Dr. Hans Essler, and Dr. Hans Herrmann. All are
presently members of the Board.
If proposal number 1 is not approved, the Board of Directors
will continue to consist 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 together as a class. In such event, it is
the intention of the Common Directors to nominate at the meeting
J. Fred Silver for election as a director by the Common Stock and
Series A Preferred Stock and for the Wacker Directors to nominate
a person to be chosen by Wacker for election as a director by the
Class A Common Stock and Series B Preferred Stock.
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.
<TABLE>
<CAPTION>
SHARES OF
SHARES OF THE
THE COMPANY'S
COMPANY'S SERIES A
COMMON PREFERRED
STOCK STOCK
OWNED OWNED
YEAR BENEFI- BENEFI-
FIRST CIALLY AS CIALLY AS
NAME AND PRINCIPAL BECAME OF APRIL % OF OF APRIL % OF
OCCUPATION AGE DIRECTOR 2, 1996 CLASS 2, 1996 CLASS
<S> <C> <C> <C> <C> <C> <C>
NOMINEES FOR ELECTION
AS THE 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.
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.
NOMINEES FOR ELECTION
AS 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-
1992.7
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.
____________________________________
(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 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, above
</TABLE>
COMMITTEES OF THE BOARD
The Board of Directors met three times during 1995. During
1995, 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.
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 Dirk Benthein.
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 two meetings in 1995 at which
executive compensation was discussed.
The Audit Committee, which includes Brent D. Baird, Dirk
Benthien, Patrick W.E. Hodgson and Dr. Hans Essler, 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
one time in 1995.
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 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 of Sales &
Marketing
Nancy E. Gates, Esq. . Secretary
The business backgrounds of the Company's executive officers
are as follows:
Mr. Silver, age 50, has been the 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 been the Vice President Finance
of the Company 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 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
<TABLE>
<CAPTION>
Annual Compensation
Name and Principal All Other
Position Year Salary Bonus Compensation (1)
__________________ ____ ______ _____ ________________
<S> <C> <C> <C> <C>
James A. Bernardoni 1995 $80,000 $45,000 $5,296
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 1994 $73,000 $8,350 $5,403
Aluminum Oxide &
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 $80,000 $45,000 $5,077
Vice President of
Sales & Marketing 1994 $62,000 $21,350 $4,589
1993 $60,000 $10,500 $8,662
</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 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.
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 in our industry 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 "Plan"). The base
salary is reviewed and set by the Executive Committee. It is
subject to change annually. The salary is based upon the nature
and scope of the job with an effort to keep the base salary fair
and competitive in relation to other companies our size. In
setting the 1995 base salaries for the Officers in the Summary
Compensation Table, the Executive Committee carefully considered
these criteria. A new Incentive Award Plan is instituted each
year.
The Incentive Award Plan is a cash award plan based on a
written series of criteria arrived at after discussion by the
Executive Committee. The Officers achieve points as they meet
certain criterion goals which are in furtherance of the Company's
productivity and profitability. In establishing the 1995 Plan
and the threshold profitability levels for incentive attainment,
the Executive Committee evaluated several factors including the
Company's 1995 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 1995. These
factors were all deemed to be important to the Company's overall
well-being.
In the Executive Committee's opinion, the Company's
executive officers were adequately compensated in 1995 when
compared to other executives in similar positions in companies of
similar size. Specifically, James Bernardoni, Acting Chief
Executive Officer in 1995, was compensated based upon his
ability, performance, and accomplishments in his role. His base
salary was increased from $64,750 in 1994 to $80,000 in 1995 in
light of his additional duties and responsibilities. He further
received $45,000 in Incentive Awards for 1995 based upon the
Company's overall productivity and profitability during his
service as Acting Chief Executive Officer. The Company's
compensation for Mr. Bernardoni, Acting Chief Executive Officer
in 1995, was reasonable in light of his attainment of certain
Company goals and additional obligations. 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
Dirk Benthein
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
1990 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, 1995. 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-12/31/90 $100 $100 $100
YE 12/31/91 $128 $161 $131
YE 12/31/92 $113 $187 $216
YE 12/31/93 $137 $215 $326
YE 12/31/94 $115 $210 $313
YE 12/31/95 $153 $297 $311
Assumes $100 invested on December 31, 1990 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 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.
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 $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").
STOCKHOLDER PROPOSALS
Stockholder proposals for inclusion in proxy materials for
the 1997 Annual Meeting of Stockholders should be addressed to
Nancy E. Gates, Esq., Corporate Secretary of Exolon-ESK Company,
1000 East Niagara Street, Tonawanda, New York 14150 must be
received before November 26, 1996.
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, 1995. 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 NANCY E. GATES, ESQ., CORPORATE
SECRETARY OF EXOLON-ESK COMPANY, 1000 E. NIAGARA STREET,
TONAWANDA, NEW YORK 14150.
By order of the Board of Directors
Nancy E. Gates, Esq.
Corporate Secretary
Dated: April 3, 1996
<PAGE>
Appendix A
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
EXOLON-ESK COMPANY
_________________________________
Pursuant to Section 242 of the General
Corporation Law of the State of Delaware
EXOLON-ESK COMPANY, a corporation organized and existing
under and by virtue of the General Corporation Law of the State
of Delaware (the "Corporation"), DOES HEREBY CERTIFY:
FIRST: The Restated Certificate of Incorporation of the
Corporation shall be amended as follows:
A. Article Fifth of the Certificate of Incorporation
is hereby amended to decrease the number of directors from eight
to six so that, as amended, the first sentence of said Article
Fifth shall read in its entirety as follows:
"The number of Directors shall be six."
B. Article Sixth of the Certificate of Incorporation
is hereby amended by deleting subparagraph (1) thereof and
substituting a new subparagraph (1) which shall read in its
entirety as follows:
"(1) Notwithstanding any provision of the General
Corporation Law of the State of Delaware now or
hereafter in force requiring for any corporate action
the vote of a lesser number of directors, the
affirmative vote of a majority of all of the directors
of the Corporation shall be required for the Board of
Directors to take any action, except when the Board of
Directors shall have designated an executive committee
with authority in the management of the Corporation, in
which case the affirmative vote of a majority of all of
the directors on said executive committee shall be
required for the executive committee to take action.
Without limiting the generality of the foregoing, the
Board of Directors by the affirmative vote of not less
than four directors, is hereby authorized to amend the
By-laws of the Corporation."
SECOND: The Board of Directors of the Corporation duly
adopted a resolution setting forth the amendments set forth above
and declaring their advisability. Thereafter the stockholders of
the Corporation duly adopted and approved said amendments at an
annual meeting of stockholders duly called and held on April 24,
1996 in accordance with the applicable provisions of Section 242
of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, said Exolon-ESK Company has caused
this Certificate to be signed by J. Fred Silver, its President,
and Nancy E. Gates, its Secretary, this ___ day of April, 1996.
EXOLON-ESK COMPANY
By___________________
J. Fred Silver
ATTEST:
By_____________
Nancy E. Gates
<PAGE>
<TABLE>
<CAPTION>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE.
<S> <C>
1. To consider and act upon a 2. Election of Directors
proposal to amend the Company's
Restated Certificate of [__] For
Incorporation (A) by amending [__] Withhold
Article Fifth thereof to reduce [__] For All Except
the number of directors of the
Company from eight to six and THEODORE E. DANN, JR.; BRENT
(B) by amending Article Sixth D. BAIRD; and PATRICK W.E.
thereof to reduce from five to HODGSON
four the number of directors
whose affirmation vote is If you do not wish your
required to amend the By-laws shares voted "FOR" a
of the corporation. particular nominee, mark the
"For All Except" box and
[__] For strike a line through the
[__] Against nominee(s) name. Your shares
[__] Abstain will be voted for the
remaining nominee(s).
RECORD DATE SHARES: 3. IN ACCORDANCE WITH THE
DISCRETION OF THE
PROXIES ON SUCH OTHER
MATTERS AS MAY PROPERLY
COME BEFORE THE MEETING.
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. There are two issues related to the management and
operation of your Company that require your immediate attention
and approval. They are 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 Annual Meeting of
Stockholders, April 24, 1996.
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 Exolon-ESK
Company, 1000 East Niagara St., Tonawanda, New York on Wednesday,
April 24, 1996 at 10:00 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" items 1 and 2.
The shares represented by the proxy will be voted "FOR" the
matters specified herein if no direction 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, the signature should be that of an
authorized officer who should state his or her title.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
_____________________________ ____________________________
_____________________________ ____________________________
_____________________________ ____________________________
