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:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as
permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to section 240.14a-11(c)
or Section 240.14a-12
Exolon-ESK Company
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction
applies:
(3) Per unit price or other underlying value of trans-
action computed pursuant to Exchange Act Rule 0-11 (set
forth the amount on which the filing fee is calculated
and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
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[ ] Fee paid previously with preliminary materials.
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by Exchange Act Rule 0-11(a)(2) and identify the filing
for which the offsetting fee was paid previously.
Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its
filing.
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EXOLON-ESK COMPANY
Annual Meeting of Stockholders
To be Held April 30, 1997
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 30, 1997 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 Bylaws 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
March 31, 1997, 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 1, 1997
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.
EXOLON-ESK COMPANY
PROXY STATEMENT
Annual Meeting of Stockholders
April 30, 1997
Solicitation of Proxies
This Proxy Statement is being furnished on or about April 1,
1997 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 March 31, 1997 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 30, 1997, 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 31, 1997, 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 31, 1997, 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 31, 1997, and such
stock ownership of all directors and officers of the Company as
a group as of that date are as follows:
Shares of Percent
Shares of Percent Series A of
Name & Address Common of Preferred Outstand-
of Beneficial Stock Outstand- Stock ing
Owner Benefic- ing Benefic- Series A
ially Common ially Preferred
Owned (1) Stock Owned (1) Stock
Patrick W.E. Hodgson, et 162,686(2) 33.8 18,334 94.7
al. 60 Bedford Road - 2nd
Floor Toronto, Ont., Canada
M5R 2K2
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 25,000 5.2 --- ---
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 30,370(5) 6.3 --- ---
al. 111 Devonshire Street
Boston, MA 02109
All Directors and Officers 253,486(6) 52.6 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) (43,000); 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 134,962 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 the Estate of Theodore E. Dann 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 1,
1997 is as follows:
Shares of
Series B
Preferred
Stock
Shares of Benefic-
Class A Common ially
Stock Owned
Beneficially (Percent
Name & Address Owned of Class
of Beneficial (Percent of Class Outstand-
Owner Outstanding) ing)
Wacker Chemicals (USA), Inc. .... 512,897 (100%) 19,364
c/o Wacker Chemical Holding (100%)
Corporation
3301 Sutton Road
Adrian, MI 49221-9397
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 Bylaws 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 Mr. Brent D. Baird,
Mr. Theodore E. Dann, Jr., and Mr. 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:
Dr. Bernhard Frank, Mr. Craig Rogerson, 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 a fourth person
at the meeting for election as a director by the Common Stock
and Series A Preferred Stock and for the Wacker Directors to
nominate Dr. Hans Essler 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.
Shares of Shares of
the the
Company's Company's
Common Series A
Stock Preferred
Owned Stock
Year Benefic- Owned
First ially Benefic-
Became as of ially as
Name and Principal Direct- March 31, % of of March % of
Occupation Age or 1997 Class 31, 1997 Class
Nominees for
Election as the
Common Directors
Theodore E. Dann, 42 1986 90,800(1) 18.8 -- --
Jr.
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 82,800(2) 17.2 -- --
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, 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 43,000
shares owned by First Carolina Investors, Inc.
Shares of
Shares of the
the Company's
Company's Series A
Common Preferred
Stock Stock
Year Owned Owned
First Benefic- Benefic-
Became ially as ially as
Name and Principal Direct- of March % of of March % of
Occupation Age or 31, 1997 Class 31, 1997 Class
Nominees for
Election as the
Common Directors
Patrick W.E. Hodgson 55 1991 100,626(3) 20.9 18,334 94.7
President,
Cinnamon
Investments, London,
Ontario, investment
firm, since 1989;
Chairman of Todd
Shipyards, Inc.,
since Feb. 1993;
Chairman Scotts
Hospitality 1994-
1996; Director,
First Empire State
Corp., First
Carolina Investors,
Inc., and Scott's
Restaurants, Inc.
Nominees for
Election as Wacker
Directors
Craig Rogerson 40 1997 -- -- -- --
President, Wacker
Silicones Corp. since
1997; Vice President
and General Manager
of Fibers Division,
Hercules Chemical
Specialties Co.,
Hercules, Inc. from
1996-1997; Sales
Director, Americas,
for the Paper Technology
Division of the Hercules
Chemical Specialties Co.
from 1995-1996; Business
Director, Absorbents &
Textile Products Group
from 1992-1995; Oper-
ations Director, Absor-
bents & Textile Products
Group from 1991-1992.
(3) Includes 57,626 shares owned by Cinnamon
Investments and 43,000 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
Shares of
Shares of the
the Company's
Company's Series A
Name and Principal Common Preferred
Occupation Stock Stock
Year Owned Owned
First Benefic- Benefic-
Became ially as ially as
Direct- of March % of of March % of
Age or 31, 1997 Class 31, 1997 Class
Nominees for
Election as Wacker
Directors
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.
Dr. Bernhard Frank 53 1997 -- -- -- --
Vice President
Finance and Admini-
stration Wacker
Silicones Corp.
since 1997; Vice
President Admini-
stration of Wacker-
Chemie GmbH, Cologne
Plant, West Germany
Chemicals from 1990-
1996.
Committees of the Board
The Board of Directors met three times during 1996. During
1996, all directors, except Dr. Hans Essler 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 Bylaws 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 Bylaws 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 Craig Rogerson. 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 three
meetings in 1996 to discuss compensation and other Board issues.
The 1996 Audit Committee, which included Brent D. Baird and
Dirk Benthien, had 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 1996. The
1997 Audit Committee consists of Dr. Bernhard Frank and Brent Baird
and will assume the same duties as the 1996 Audit Committee.
The Company does not have a Nominating Committee.
Compensation of Directors
The Company's directors, other than the Chairman, receive from
the Company an annual retainer fee of $5,000, and $1,500 for each
meeting of the Board or meeting of a committee of the Board they
attend, but not to exceed $1,500 for any one day. Director fees
payable to Wacker Directors for 1996 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, 1996, there were no omissions from or late
filings of Section 16(a) Reports.
Executive Officers
The executive officers of Exolon-ESK Company for 1997 are as
follows:
J. Fred Silver ..... President and Chief Executive
Officer
Michael H. Bieger .... Chief Finance Officer and 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 51, 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. Bieger, age 40, has been the Chief Financial Officer
of the Company since August, 1996. He served as President and
Chief Financial Officer of Perry's Ice Cream in Akron, New York from
1990-1994 and as a management consultant for SiGMA Consulting from
March of 1994 through July 1996. He is a Certified Public Accountant
in the State of New York.
Mr. Dordi, age 48, 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 43, 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 42, 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 32, 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, 1996, 1995, and 1994 of those persons who were, at December 31,
1996, (I) the chief executive officer of the Company and (ii)
executive officers of the Company and its subsidiaries during 1996
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)
J. Fred Silver 1996 $136,500 $40,000 $15,568
President and (2)
Chief Executive
Officer
(effective
2/15/96)
Kersi Dordi 1996 $91,000 $45,500 $13,166
Vice President 1995 $80,000 $45,000 $ 8,216
Aluminum Oxide & 1994 $73,000 $ 8,350 $ 5,403
Specialty
Products
Armand Ladage 1996 $85,000 $42,500 $13,738
Vice President 1995 $80,000 $45,000 $ 7,545
Silicon Carbide 1994 $73,000 $ 8,842 $ 6,204
John L. Redshaw 1996 $91,000 $45,500 $13,858
Vice President of 1995 $85,000 $45,000 $ 5,077
Sales & Marketing 1994 $62,000 $21,700 $ 4,589
James A. Bernardoni 1996 $80,000 $20,000 $ 6,353
Acting Chief 1995 $80,000 $45,000 $ 5,296
Executive Officer 1994 $64,750 $ 7,000 $ 4,929
(thru 2/14/96 and
Vice President
thru 7/96)
(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, amounts accrued under the Company's
Retirement Plan for U.S. Salaried Employees and amounts paid under
a car allowance policy.
(2) Includes Directors Fees of $2,000 earned 1/1/96 through
2/14/96.
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 1996 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 President is not included in the Plan.
The other Officers achieve points as they meet certain criterion
goals which are in furtherance of the Company's productivity and
profitability. In establishing the 1996 Plan and the threshold
profitability levels for incentive attainment, the Executive
Committee evaluated several factors including the Company's 1996
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 1996. 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 1996 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
Craig Rogerson
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 1991 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, 1996. The calculations exclude trading commissions
and taxes.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
Among NASDAQ Total Index, NASDAQ Line of Business and the Exolon-
ESK Co.
Measurement
Period (Fiscal Exolon-ESK NASDAQ Total NASDAQ Line of
Year Covered) Company Index Business Stocks
Measurement Pt-
12/31/91 $100 $100 $100
YE 12/31/92 $ 92 $116 $109
YE 12/31/93 $109 $134 $126
YE 12/31/94 $ 90 $131 $121
YE 12/31/95 $125 $185 $169
YE 12/31/96 $150 $227 $206
Assumes $100 invested on December 31, 1991 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
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 $2,778,000 and $3,444,000
of certain products from Kempten, during 1996 and 1995,
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
Craig Rogerson, 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 had 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. This
agreement expired July 31, 1996. A separate royalty agreement with
International Oxide Fusion, Inc. ("IOF") which covers the
production of specialty product for refractory markets may exist
until April 30, 2001, but is currently being litigated for breach
of contract.
Royalties paid by the Company under the agreements amounted to
$725,000 and $419,000 in the twelve months ended December 31, 1995
and December 31, 1996, respectively.
Edward J. Bielawski, who beneficially owns 6.4% of the
Company's Common Stock, is 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
1998 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, 1997.
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, 1996. 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 1, 1997
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,
declaring their advisability and calling a special meeting of the
stockholders of the Corporation entitled to vote in respect
thereof. Thereafter, the stockholders of the Corporation duly
adopted and approved said amendments at a meeting on April 30, 1997
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, 1997.
EXOLON-ESK COMPANY
By: J. Fred Silver, President
ATTEST:
By: Nancy E. Gates, Secretary
[X] PLEASE MARK VOTES AS IN
THIS EXAMPLE
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 D.
(B) by amending Article Sixth BAIRD; AND PATRICK W.E. HODGSON
thereof to reduce from five to
four the number of directors If you do not wish your shares
whose affirmation vote is voted FOR a particular
required to amend the Bylaws of nominee, mark the For All
the Corporation. Except box and strike a line
through the nominee(s) name.
[__] For Your shares will be voted for
[__] Against the remaining nominee(s).
[__] Abstain
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 Date:_____________________
this Proxy
________________________________ _______________________________
Shareholder sign here Co-owner sign here
Mark box at right if comments or
address change have been noted
on the reverse side of this card
[__]
_________________________________________________________________
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 30, 1997.
Thank you in advance for your prompt consideration of these
matters.
Sincerely,
EXOLON-ESK COMPANY
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 30, 1997 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?
___________________________ _______________________________
___________________________ _______________________________
___________________________ _______________________________
