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 Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-
6(i)(1) and 0-11
(1) Title of each class of securities to which
transaction applies:
(2) Aggregate number of securities to which
transaction applies:
(3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule
0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided
by Exchange Act Rule 0-11(a)(2) and identify the filing
for which the offsetting fee was paid previously.
Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its
filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
EXOLON-ESK COMPANY
Annual Meeting of Stockholders
To be Held April 28, 1999
Notice is hereby given that the Annual Meeting of the
Stockholders of EXOLON-ESK COMPANY will be held at the Holiday
Inn, 1881 Niagara Falls Blvd., Amherst, New York on Wednesday,
April 28, 1999 at 10:00 a.m. for the following purposes:
1. To hold an election by the holders of the outstanding
shares of the Company's Common Stock and its Series
$1.12 / Convertible Preferred Stock of three persons to
the Company's Board of Directors to serve until the
next Annual Meeting of Stockholders and until their
successors are elected and qualified.
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 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 18, 1999, 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
March 19, 1999
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 28, 1999
Solicitation of Proxies
This Proxy Statement is being furnished on or about March
19, 1999 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 18, 1999 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 at the Holiday Inn, 1881
Niagara Falls Blvd., Amherst, New York on April 28, 1999, 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 18, 1999, 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 18, 1999 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 18, 1999 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 Series A of Out-
Common Percent of Preferred standing
Stock Outstanding Stock Series A
Beneficially Common Beneficially Prefer-
Owned (1) Stock Owned (1) red Stock
---------- ---------- ----------- --------
Patrick W.E. Hodgson, et al. 205,130(2) 42.6 18,334 94.7
60 Bedford Road - 2nd Floor
Toronto, Ont., Canada M5R 2K2
Ferro Alloys Services, Inc. 90,800(3) 18.8 --- ---
750 East Ferry Street
Buffalo, NY 14211
Woodbourne Partners, L.P. 31,000 6.4 --- ---
200 N. Broadway, Suite 825
St. Louis, MO 63102
William J. Burke, III, et al. 30,370(4) 6.3 --- ---
111 Devonshire Street
Boston, MA 02109
All Directors and Officers 294,330(5) 61.1 18,334 94.7
as a group (12 persons)
(1) The beneficial ownership information presented is based upon
information furnished by each person or contained in filings
made with the Securities and Exchange Commission.
(2) Beneficially owned by a group composed of: Cinnamon
Investments Limited solely owned by Patrick W.E. Hodgson
(78,370); 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, 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) (64,700); 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
167,270 shares and shared voting and investment power with
respect to 36,260 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 25,500 shares owned by William J. Burke, Jr.,
Marital Trust, State Street Bank.
(5) 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 March 18, 1999 is as follows:
Shares of
Shares of Series B
Class A Common Preferred
Stock Stock
Beneficially Beneficially
Owned Owned
(Percent of (Percent of
Name & Address Class Class
of Beneficial Owner Outstanding) Outstanding)
------------- ------------
Wacker Chemicals (USA), Inc. 512,897 (100%) 19,364 (100%)
c/o Wacker Chemical Holding
Corporation
3301 Sutton Road
Adrian, MI 49221-9397
Proposal 1 -- Election of Directors
The Board of Directors consists 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. Fritz Petersen, Mr. Craig A. Rogerson, and Mr.David S.
Shellabarger. All are presently members of the Board.
Information as to the nominees for directors is furnished in
the following table. Such information and the information with
regard to beneficial ownership of securities have been furnished
to the Company by the respective directors.
Shares of
Shares of the
the Company's
Company's Series A
Common Preferred
Stock Stock
Owned Owned
Year Beneficially Beneficially
First as of as of
Name and Principal Became March 18, % of March 18, % of
Occupation Age Director 1999 Class 1999 Class
--- -------- ------------ ----- -------- -----
Nominees for Election
as the Common Directors
Theodore E. Dann, Jr. 45 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;
Chairman of Buffalo
Technologies Corp., from
April 11, 1994 to
Present; President of
Buffalo Technologies
Corp. since June 1997;
Secretary/Treasurer,
Director and Corporate
Attorney for Ferro
Alloys Services, Inc.,
since 1985; Director of
First Carolina
Investors, Inc.
Brent D Baird 60 1994 104,500(2) 21.7 -- --
Private investor,
Chairman of First
Carolina Investors,
Inc.; Director of
M&T Bancorp (bank
holding company),
Merchants Group, Inc.,
Oglebay Norton Company,
Todd Shipyards
Corporation, Barrister
Information Systems
Corporation, and Ecology
and Environment, Inc.
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
do not share his household and to which he
has no voting or investment power, 5,700
shares owned by The Cameron Baird Foundation
and 64,700 shares owned by First Carolina
Investors, Inc.
Shares of
Shares of the
the Company's
Company's Series A
Common Preferred
Stock Stock
Owned Owned
Year Beneficially Beneficially
First as of as of
Became March 18, % of March 18, % of
Age Director 1999 Class 1999 Class
--- -------- ------------ ----- ---------- -----
Nominees for Election
as the Common Directors
Patrick W.E. Hodgson 58 1991 78,370(3) 16.3 18,334 94.7
President, Cinnamon
Investments, London,
Ontario, investment
firm, since 1981;
Chairman of Todd
Shipyards, Inc., since
Feb. 1993; Chairman
Scotts Hospitality 1994-
1996; Director, First
Carolina Investors,
Inc., Versacold, Inc.,
M&T Bancorp and Scott's
Restaurants, Inc.
Nominees for Election as
Wacker Directors
Craig A. Rogerson 42 1997 -- -- -- --
President, Wacker
Silicones Corporation
since April 1997; Vice
President and General
Manager of Fibers
Division, Hercules
Chemical Specialties
Company, 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;
Operations Director,
Absorbents & Textile
Products Group from
1991-1992. Director,
Wacker Silicones Corp.,
Wacker Chemical Holding
Corp., Wacker Chemical
U.S.A., and Wacker
Biochem Co.
(3) Includes 78,370 shares owned by Cinnamon Investments.
See footnote (2) under table of more than 5%
stockholders, above
Shares of
Shares of the
the Company's
Company's Series A
Common Preferred
Stock Stock
Owned Owned
Year Beneficially Beneficially
First as of as of
Became March 18, % of March 18, % of
Age Director 1999 Class 1999 Class
--- -------- ----------- ------ ---------- -----
Nominees for Election as
Wacker Directors
Dr. Fritz Petersen 54 1999 -- -- -- --
Managing Director of
ESK-SiC GmbH since
January 10, 1998. Head
of the Business Unit SiC
of ESK-GmbH from January
4, 1994 to September 30,
1998. Managing Director
of CASIL-Carbureto de
Silicio S.A. in Brazil
from January 4, 1987 to
December 31, 1993.
David S. Shellabarger 40 1999 -- -- -- --
Controller of Wacker
Silicones Corporation
since 1989.
Committees of the Board
The Board of Directors met three times during 1998. During
1998, the majority directors attended 100% 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.,
Patrick W.E. Hodgson, Craig Rogerson, and Dr. Fritz Petersen. 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
full meetings and several telephone conferences in 1998 to discuss
compensation and other Board issues.
The 1998 Audit Committee, which consisted of Brent D. Baird
and Dr. Bernhard Frank, 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
1998. The 1999 Audit Committee consists of David S. Shellabarger and
Brent D. Baird and will assume the same duties as the 1998 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 1998 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, 1998, there were no omissions from or late
filings of Section 16(a) Reports.
Executive Officers
The executive officers of Exolon-ESK Company for 1998 were as
follows:
J. Fred Silver President and Chief Executive Officer
(September 1998 - present)
Robert A. Rieger President and Chief Executive Officer
(September 1997 -September 1998)
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, General Counsel/Secretary
Esq.
The business backgrounds of the Company's executive officers
are as follows:
Mr. Rieger, age 48, was the President and Chief Executive
Officer from September, 1997 to September, 1998. He served as
Managing Director of Zircon Worldwide for Cookson Matthey Ceramics
PLC, London, England, from 1994 to 1997, and as President of TAM
Ceramics, Inc., a subsidiary of Cookson Group PLC, Niagara Falls, New
York from 1985 to 1994.
Mr. Silver, age 53, has been President and Chief Executive
Officer since September 14, 1998. He had previously been President
from February 1996 to August 1997. He was a member of the Company's
Board of Directors in 1995. 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 42, has been the Chief Financial Officer of
the Company and a member of the Company's Operating Committee 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 50, has served as a Vice President of Aluminum
Oxide & Specialty Products Manufacturing since March 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. 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 45, has served as a Vice President Silicon
Carbide since March 1995. In January 1995, he became a member of the
Company's Operating Committee. He served as Plant Manager of the
Company's Hennepin, Illinois operations from 1978 to 1995.
Mr. Redshaw, age 44, has served as Vice President of Sales and
Marketing since March 1995. In January 1995, he became a member of
the Company's Operating Committee. He has served as Metallurgical
Sales and Marketing Manager for the Company since 1989.
Ms. Gates, age 34, has been the General Counsel/Corporate
Secretary and a member of the Company's Operating Committee since
February 29, 1996. 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, 1998, 1997, and 1996 of those persons who were, at December 31,
1998 or during 1998, (I) the chief executive officer of the Company
and (ii) executive officers of the Company and its subsidiaries during
1998 whose annual base salary and bonus compensation exceeded
$100,000, (collectively, the "Named Officers").
Summary Compensation Table
Annual Compensation
Name and All Other
Principal Compensation
Position Year Salary Bonus (1)
Robert Rieger 1998 $127,500 - $14,680
President and
Chief Executive
Officer 1997 $55,576 $28,334 $6,053
(effective
September 1,
1997)
J. Fred Silver 1998 $53,462 $8,374 $3,575
President and
Chief Executive 1997 $103,000 $76,125 $11,543
Officer
(effective
September 14,
1998)
Kersi Dordi 1998 $108,000 $16,200 $15,871
Vice President
Aluminum Oxide & 1997 $97,000 $47,530 $15,270
Specialty
Products 1996 $91,000 $45,500 $13,166
Armand Ladage 1998 $108,000 $20,520 $15,731
Vice President 1997 $90,000 $45,000 $15,085
Silicon Carbide
1996 $85,000 $42,500 $13,738
John L. Redshaw 1998 $108,000 $13,500 $15,450
Vice President of 1997 $97,000 $48,500 $14,531
Sales & Marketing
1996 $91,000 $45,500 $13,858
Michael H. Bieger 1998 $108,000 $17,820 $15,815
Chief Financial 1997 $93,000 $46,500 $14,251
Officer
1996 $36,125 $18,750 $4,383
(1) Includes matching contributions made by the Company under
the Company's Retirement and Savings Plan for U.S. Salaried
Employees (the "401K 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.
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 1998 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 1998 Plan and the threshold
profitability levels for incentive attainment, the Executive
Committee evaluated several factors including the Company's 1998
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 1998. 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 1998 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. Fritz Petersen
Patrick W.E. Hodgson
Craig A. 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 31, 1993 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, 1998.
The calculations exclude trading commissions and taxes.
Comparison of Five Year Cumulative Total Return
Among NASDAQ Total Index, NASDAQ Line of Business Index and the
Exolon-ESK Co.
Measurement NASDAQ Line of
Period (Fiscal NASDAQ Total Business Exolon-ESK
Year Covered) Index Stocks Company
1993 $100 $100 $100
1994 $98 $96 $ 82
1995 $138 $95 $114
1996 $170 $124 $138
1997 $208 $124 $167
1998 $294 $101 $144
Assumes $100 invested on December 31, 1998 in NASDAQ Stock Market,
NASDAQ Line of Business Stocks (Based on SIC Code) and the Exolon-ESK
Company
Compensation (Executive) Committee Interlocks and Insider
Participation
Elektroschmelzwerk Kempten GmbH ("ESK") 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 ESK at the
time of the merger, and renewed in 1997, the Company purchased
$2,699,000 and $1,989,000 of certain products from Kempten, during
1998 and 1997, respectively.
The Company and ESK 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. Fritz Petersen, who is Managing Director of ESK-SiC GmbH,
and Craig A. Rogerson, who is the President of Wacker Silicones
Corporation (another wholly owned subsidiary of Wacker Chemie),
serve on the Executive Committee.
Certain Related Party Transactions
None.
Stockholder Proposals
Stockholder proposals for inclusion in proxy materials for the
Year 2000 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 19, 1999.
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, 1998. 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: March 19, 1999
