<PAGE>
<PAGE>
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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
/X/ Definitive Proxy Statement Commission Only (as permitted
/ / Definitive Additional Materials by Rule 14a-6(e)(2))
/ / Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
ZOLTEK COMPANIES, INC.
(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)(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:
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
January 21, 1999
DEAR FELLOW SHAREHOLDERS:
Our Annual Meeting of Shareholders will be held at the Abilene
Country Club, located at 4039 South Treadaway, Abilene, Texas, at 10:00
A.M., local time, on Tuesday, February 23, 1999. The Notice of Annual
Meeting of Shareholders, Proxy Statement and Proxy Card which accompany
this letter outline fully matters on which action is expected to be
taken at the Annual Meeting.
We cordially invite you to attend the Annual Meeting. Please RSVP
to 314-291-5110 if you plan to attend the meeting. Even if you plan to
be present at the meeting, you are requested to date, sign and return
the enclosed Proxy Card in the envelope provided so that your shares
will be represented. The mailing of an executed Proxy Card will not
affect your right to vote in person should you later decide to attend
the Annual Meeting.
Sincerely,
ZSOLT RUMY
Chairman of the Board, President
and Chief Executive Officer
<PAGE>
<PAGE>
ZOLTEK COMPANIES, INC.
3101 MCKELVEY ROAD
ST. LOUIS, MISSOURI 63044
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD FEBRUARY 23, 1999
Dear Shareholder:
The Annual Meeting of Shareholders of Zoltek Companies, Inc. (the
"Company") will be held at the Abilene Country Club, located at 4039
South Treadaway, Abilene, Texas, on Tuesday, February 23, 1999, at 10:00
A.M., local time, for the following purposes:
1. To elect two Class III directors to hold office for a term
of three years.
2. To transact any and all other business that may properly
come before the meeting or any adjournment thereof.
These items are more fully described in the following Proxy
Statement, which is hereby made a part of this Notice. Only
shareholders of record of the Company at the close of business on
December 30, 1998 are entitled to notice of, and to vote at, the meeting
or any adjournment thereof.
By order of the Board of Directors,
DANIEL D. GREENWELL
Chief Financial Officer and
Secretary
January 21, 1999
<PAGE>
<PAGE>
ZOLTEK COMPANIES, INC.
3101 MCKELVEY ROAD
ST. LOUIS, MISSOURI 63044
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD FEBRUARY 23, 1999
_________________
GENERAL INFORMATION
This Proxy Statement is furnished to the shareholders of ZOLTEK
COMPANIES, INC. (the "Company") in connection with the solicitation of
proxies for use at the Annual Meeting of Shareholders to be held at the
Abilene Country Club, 4039 South Treadaway, Abilene, Texas, at 10:00
A.M., local time, on Tuesday, February 23, 1999, and at all adjournments
thereof (the "Annual Meeting"), for the purposes set forth in the
preceding Notice of Annual Meeting of Shareholders.
This Proxy Statement, the Notice of Annual Meeting and the
accompanying Proxy Card were first mailed to the shareholders of the
Company on or about January 21, 1999.
The proxy reflected on the accompanying Proxy Card is being
solicited by the Board of Directors of the Company. A proxy may be
revoked at any time before it is voted by filing a written notice of
revocation or a later-dated Proxy Card with the Secretary of the Company
at the principal offices of the Company or by attending the Annual
Meeting and voting the shares in person. Attendance alone at the Annual
Meeting will not of itself revoke a proxy. Proxy Cards that are
properly executed, timely received and not revoked will be voted in the
manner indicated thereon at the Annual Meeting and any adjournment
thereof.
The Company will bear the entire expense of soliciting proxies.
Proxies will be solicited by mail initially. The directors, executive
officers and employees of the Company also may solicit proxies
personally or by telephone or other means but such persons will not be
specially compensated for such services. Certain holders of record, such
as brokers, custodians and nominees, are being requested to distribute
proxy materials to beneficial owners and will be reimbursed by the
Company for their reasonable expenses incurred in sending proxy
materials to beneficial owners.
Only shareholders of record at the close of business on December
30, 1998 are entitled to notice of, and to vote at, the Annual Meeting.
On such date, there were 16,216,338 shares of the Company's common
stock, $.01 par value ("Common Stock"), issued and outstanding.
Each outstanding share of the Company's Common Stock is entitled
to one vote on each matter to be acted upon at the Annual Meeting. A
quorum is required for votes taken at the Annual Meeting to be deemed
valid. A quorum shall be attained if holders of a majority of the
Common Stock issued and outstanding are present at the Annual Meeting in
person or by proxy. After a quorum has been established, the vote of
the holders of a majority of the Common Stock present in person or by
proxy shall be required for the election of any director and, except as
required by the Company's
<PAGE>
<PAGE>
Restated Articles of Incorporation or applicable law, any other matter
submitted for a vote of the shareholders at the Annual Meeting requires
the vote of the holders of a majority of the Common Stock outstanding.
Shares subject to abstentions will be treated as shares that are
present at the Annual Meeting for purposes of determining the presence
of a quorum but as unvoted for purposes of determining the base number
of shares voting on a particular proposal. Accordingly, abstentions
will have the same effect as a vote withheld on the election of
directors or a vote against on other matters submitted to the
shareholders for a vote, as the case may be. If a broker or other
nominee holder indicates on the Proxy Card that it does not have
discretionary authority to vote the shares it holds of record on a
proposal, those shares will not be considered as voted for purposes of
determining the approval of the shareholders on a particular proposal.
VOTING SECURITIES AND PRINCIPAL HOLDER THEREOF
The following table includes information as to the only person
known to management of the Company to beneficially own five percent or
more of the Company's outstanding Common Stock as of December 30, 1998:
<TABLE>
<CAPTION>
Number of Shares Percent of Outstanding
Name and Address of Beneficial Owner Beneficially Owned Common Stock<F1>
- ------------------------------------ ------------------ ----------------
<S> <C> <C>
Zsolt Rumy 5,500,000<F2> 33.91%
3101 McKelvey Road
St. Louis, Missouri 63044
<FN>
_____________________
<F1> The percentage calculation is based upon 16,216,338 shares of the
Company's Common Stock that were issued and outstanding as of December
30, 1998.
<F2> Pursuant to the Company's supply agreement with BF Goodrich
Aerospace, Mr. Rumy has agreed, subject to certain exceptions, to
negotiate exclusively with BF Goodrich Aerospace for a specified period
if he determines to sell a significant amount of his shares of the
Company's Common Stock.
</TABLE>
ELECTION OF DIRECTORS
Two individuals will be elected at the Annual Meeting to serve as
Class III directors of the Company for a term of three years. The two
nominees receiving the vote of holders of a majority of the shares
entitled to vote and represented in person or by proxy at the Annual
Meeting will be elected. Shareholders do not have the right to cumulate
votes in the election of directors.
The persons named as proxies on the accompanying Proxy Card intend
to vote all duly executed proxies received by the Board of Directors for
the election of Zsolt Rumy and Charles A. Dill as Class III directors,
except as otherwise directed by the shareholder on the Proxy Card.
Messrs. Rumy and Dill are currently directors of the Company. If for
any reason Mr. Rumy or Mr. Dill becomes unavailable for election, which
is not now anticipated, the persons named in the accompanying Proxy Card
will vote for such substitute nominee as is designated by the Board of
Directors. The Board of
-2-
<PAGE>
<PAGE>
Directors recommends a vote "FOR" the election of Zsolt Rumy and Charles
A. Dill as Class III directors.
The name, age, principal occupation or position and other
directorships with respect to Messrs. Rumy and Dill and the other
directors whose terms of office will continue after the Annual Meeting
is set forth below.
CLASS III - TO BE ELECTED FOR A TERM OF THREE YEARS EXPIRING IN 2002
Zsolt Rumy, age 56, is the founder of the Company and has served
as its Chairman, President and Chief Executive Officer and as a Director
since 1975. Prior to founding the Company, Mr. Rumy served as Industrial
Marketing Manager and Process Engineer for Monsanto Company, Accounts
Manager for General Electric Company and Technical Sales Representative
for W.R. Grace Company. Since May 1996, Mr. Rumy has served as a
director of Southwest Bank of St. Louis, with which the Company
maintains its primary banking relationships.
Charles A. Dill, age 58, has served as a Director of the Company
since August 1992. Since October 1995, he has been a managing partner
of Gateway Venture Associates, L.P., a venture capital firm. He served
as Chief Executive Officer of Bridge Information Systems, Inc. (a
provider of databases and systems to institutional investors) from
October 1992 to April 1995. Mr. Dill serves as a director of Stifel
Financial Corp., the parent of Stifel, Nicolaus & Company, Incorporated
(a securities brokerage, investment management and investment banking
firm), and DT Industries, Inc. (a developer and manufacturer of
automated production equipment and systems).
CLASS II - TO CONTINUE IN OFFICE UNTIL 2001
James W. Betts, age 61, has served as a Director of the Company
since August 1992. For more than the past five years, he has been Vice
President Raw Materials of Great Lakes Carbon Corp. (a producer of
carbon products).
James Dorr, age 63, has served as a Director of the Company since
August 1992. Since June 1995, he has been engaged in business as a
consultant. For more than five years prior to June 1995 when he
retired, he served as Director--Advanced Materials and Structures of
McDonnell Douglas Corporation, now a subsidiary of The Boeing Company
(an aircraft manufacturer).
CLASS I - TO CONTINUE IN OFFICE UNTIL 2000
John L. Kardos, age 59, has served as a Director of the Company
since August 1992. For more than the past five years he has been
Professor of Chemical Engineering of Washington University, St. Louis,
Missouri, where he has been Chairman of the Department of Chemical
Engineering since July 1991. From June 1971 to July 1991, he was
Chairman of the Graduate Program in Materials Science and Engineering
and Director of the Materials Research Laboratory of Washington
University.
Linn Bealke, age 54, has served as a Director of the Company since
August 1992. For more than the past five years he has been President
and Director of Mississippi Valley Bancshares, Inc. (a bank holding
company) and Vice Chairman of Southwest Bank of St. Louis (a commercial
bank).
-3-
<PAGE>
<PAGE>
BOARD OF DIRECTORS AND COMMITTEES
During fiscal 1998, the Board of Directors of the Company met four
times and acted one time by unanimous written consent. Each of the
directors and nominees attended not less than 75% of the meetings of the
Board of Directors and committees of which such director or nominee was
a member during fiscal 1998.
The Board of Directors has a standing Audit Committee and
Compensation Committee.
The members of the Audit Committee are Messrs. Bealke and Dorr.
The Audit Committee reviews the scope of the Company's engagement of its
independent public accountant and their reports. The Audit Committee
also meets with the financial staff of the Company to review accounting
procedures and reports. The Audit Committee met two times in fiscal
1998.
The Compensation Committee is composed of Messrs. Betts and Dill.
The Compensation Committee is authorized to review and make
recommendations to the Board of Directors regarding the salaries and
bonuses to be paid executive officers and to administer the Company's
Long Term Incentive Plan. The Compensation Committee met two times
during fiscal 1998.
DIRECTORS' FEES
Directors who are not also employees of the Company are paid $750
per board meeting attended. In addition, each of the directors who is
not also an employee of the Company (an "Eligible Director")
participates in the Zoltek Directors Stock Option Plan (the "Directors
Plan"). The Directors Plan provides for the granting of non-qualified
stock options to Eligible Directors. Under the Directors Plan, each
person who is an Eligible Director on the first business day after the
date of the Company's annual meeting of shareholders is granted options
to acquire 7,500 shares of Common Stock, provided, however, that no
grant shall be made to any Eligible Director who is first elected a
director of the Company at the annual meeting of shareholders
immediately preceding the date of such grant. The Directors Plan
otherwise does not establish a limit on the aggregate number of options
that may be granted thereunder. Options granted pursuant to the
Directors Plan entitle the director to purchase the Company's Common
Stock at a price equal to the Fair Market Value (as defined in the
Directors Plan) on the date of grant. The option by its terms is not
transferable by the director except by will or the laws of descent and
distribution or pursuant to a qualified domestic relations order. The
option is exercisable during the director's lifetime solely by the
director. Each option is immediately exercisable as to any or all
shares and may be exercised at any time or from time to time. Options
that are outstanding and unexercised at the time the holder ceases to be
a director of the Company for any reason terminate on the first to occur
of the expiration date of the option or the expiration of 24 months
after the date the holder ceases to be a director. Unless exercised or
terminated sooner, each option expires on the tenth anniversary of the
date of grant.
-4-
<PAGE>
<PAGE>
SECURITY OWNERSHIP BY MANAGEMENT
The following table indicates, as of December 30, 1998, the
beneficial ownership of the Company's Common Stock by each person who is
a director or nominee for director and the executive officer named in
the Summary Compensation Table, individually, and all directors and
executive officers as a group:
<TABLE>
<CAPTION>
Number of Shares
Name of Beneficial Owner Beneficially Owned Percent of Class<F1>
- ------------------------ ------------------ --------------------
<S> <C> <C>
Zsolt Rumy<F2> 5,500,000 33.91%
Linn Bealke 37,500<F3> <F*>
James W. Betts 57,000<F4> <F*>
Charles A. Dill 39,000<F4> <F*>
James Dorr 34,000<F5> <F*>
John L. Kardos 30,000<F5> <F*>
Daniel D. Greenwell 1,842<F6> <F*>
All directors and executive officers as a group (7 persons) 5,699,342<F7> 34.81%
<FN>
_____________________
<F*> Less than one percent
<F1> Based upon 16,216,338 shares of the Company's Common Stock issued
and outstanding as of December 30, 1998 and, for each director or
executive officer or the group, the number of shares subject to
options that may be acquired upon exercise thereof by such
director or executive officer or the group within 60 days of
December 30, 1998.
<F2> Mr. Rumy's address is 3101 McKelvey Road, St. Louis, Missouri
63044. Pursuant to the Company's supply agreement with BF
Goodrich Aerospace, Mr. Rumy has agreed, subject to certain
exceptions, to negotiate exclusively with BF Goodrich Aerospace
for a specified period if he determines to sell a significant
amount of his shares of the Company's Common Stock.
<F3> Includes 22,500 shares subject to presently exercisable stock
options.
<F4> Includes 36,000 shares subject to presently exercisable options.
<F5> Includes 30,000 shares subject to presently exercisable stock
options.
<F6> Includes 342 shares held jointly with spouse.
<F7> Includes 154,500 shares subject to presently exercisable stock
options.
</TABLE>
-5-
<PAGE>
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth the compensation of the executive
officers of the Company whose annual salary exceeded $100,000 for fiscal
1998.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Annual
Compensation
------------
All Other
Name and Principal Position Year Salary($) Bonus Compensation<F1>
--------------------------- ---- --------- ----- ----------------
<S> <C> <C> <C> <C>
Zsolt Rumy 1998 $150,000 -- $19,551
Chairman of the Board, President 1997 $150,000 $200,000 $16,152
and Chief Executive Officer 1996 $150,000 $100,000 $11,565
Daniel D. Greenwell 1998 $120,000 -- $5,100
Chief Financial Officer and 1997 $100,000 -- --
Secretary<F2>
<FN>
_______________________
<F1> Total includes amounts allocated to the named executive officer's
account pursuant to the Company's defined contribution profit
sharing plan.
<F2> Mr. Greenwell was appointed Chief Financial Officer and Secretary
of the Company in December 1996.
</TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
The following table sets forth information concerning the number of
exercisable and unexercisable stock options at September 30, 1998, as
well as the value of such stock options having an exercise price lower
than the last reported trading price on September 30, 1998 ("in-the-
money" options) held by the executive officers named in the Summary
Compensation Table. No stock options were exercised by such individuals
during the 1998 fiscal year.
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-The-Money
Options at Options at Fiscal
Fiscal Year-End (#) Year-End($)<F1>
Exercisable/ Exercisable/
Name Unexercisable Unexercisable
- ----------------------------------------------------------------------------
<S> <C> <C>
Zsolt Rumy 0/150,000 $0/$806,250
Daniel D. Greenwell 0/60,000 $0/$0
<FN>
_______________________
<F1> Based on a price per share of $11.625 being the last reported
trading price before the fiscal year end.
</TABLE>
-6-
<PAGE>
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
REGARDING EXECUTIVE COMPENSATION
The Company's executive compensation program is administered under
the direction of the Compensation Committee of the Board of Directors.
The Committee's compensation policies are based upon the principle that
the financial rewards of the Company's executives should be aligned with
the financial interests of its shareholders. In this manner, the
Company seeks to meet its ultimate responsibility to its shareholders by
striving to create superior long-term return on their investment through
earnings growth and prudent management of the Company's business.
In determining the appropriate level of executive compensation in
fiscal 1998, the Committee considered the Company's financial results
during the period and management's continuing success in over the past
several years in achieving the Company's goal of building long-term
shareholder value through the commercialization of carbon fibers. The
Committee did not assign specific weights to individual factors, but
rather considered all such factors as a whole.
The Company's executive compensation policy in fiscal 1998
consisted of base salary, non-cash benefits and long- and short-term
compensation. In determining its policy, the Committee also considered
the strategic accomplishments of management in fiscal 1998 toward the
Company's ZOLTEK 2000 five-year strategic plan to become the world's
leading carbon fiber producer by the year 2000. During fiscal 1998,
management largely achieved three components of its strategy with
respect to maintaining a position as the lowest-cost producer of carbon
fibers, development of a pricing strategy to attract significant new
applications and increasing manufacturing capacity to assure
availability of low-cost carbon fibers in sufficient quantities to
support development of new applications. In addition, management made
significant progress in the fourth component of its strategy to become a
leader in promoting and supporting the development of new applications.
Notwithstanding these developments, compared to fiscal 1997, net sales
for fiscal 1998 decreased 8% to $83.4 million, and net income and fully
diluted earnings per share decreased 25% and 26%, respectively, to $9.6
million and $0.58 per share.
The Company's incentive compensation program consists of long-term
and short-term components. The long-term component is in the form of
stock option grants to the Company's executives, which grants have been
linked to the Company's ZOLTEK 2000 five-year strategic plan. Each of
such grants include provisions pursuant to which such options vest and
become exercisable in October 2000 upon the planned completion of the
ZOLTEK 2000 plan.
The Company's short-term incentive compensation program consists
of cash bonuses paid based upon the Company's actual results and
progress toward its strategic plans, and an evaluation of each
individual's contributions thereto. In considering the advisability of
short-term compensation for fiscal 1998, the Committee determined that,
while significant contributions were made by executive management for
fiscal 1998 toward the Company's strategic plans, no cash bonuses should
be paid to executive officers for fiscal 1998. The Committee anticipates
that cash bonuses will be forgone until future periods in which
significant advances in both the Company's strategic plans and in the
Company's actual financial performance are achieved.
Mr. Rumy's base salary was $150,000 in fiscal 1998, the same as
that paid to him in the prior year. Mr. Rumy's base salary was set at
such level at his suggestion in order to minimize the Company's
administrative overhead, despite the Committee's view that such amount
is substantially below the level which the Company could expect to pay
for an executive of Mr. Rumy's background and
-7-
<PAGE>
<PAGE>
responsibilities. As set forth above, in light of the Committee's
evaluation of the factors deemed relevant Mr. Rumy did not receive a
bonus for fiscal 1998. Based upon his ownership of the Company's Common
Stock and prior year stock option grants, Mr. Rumy was not granted any
stock options in fiscal 1998.
Although the foregoing describes the Committee's current
compensation policies applicable to the Company's executive officers,
the Committee reserves the right to amend these policies at such times
in the future and in such manner as the Committee deems necessary or
advisable.
Section 162(m) of the Internal Revenue Code of 1986, as amended,
generally limits federal income tax deductions for compensation paid
after 1993 to the chief executive officer and the four other most highly
compensated officers of the Company to $1 million per year, but contains
an exception for performance-based compensation that satisfies certain
conditions. In making compensation decisions, the Committee will
consider the net cost of compensation to the Company and whether it is
practicable and consistent with other compensation objectives to qualify
the Company's incentive compensation under the applicable exemption of
Section 162(m). The Committee anticipates that deductibility of
compensation payments will be one among a number of factors used by the
Committee in ascertaining appropriate levels or modes of compensation,
and the Committee will make its compensation decisions based upon an
overall determination of what it believes to be in the best interests of
the Company and its shareholders.
SUBMITTED BY THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
CHARLES A. DILL JAMES W. BETTS
-8-
<PAGE>
<PAGE>
PERFORMANCE GRAPH
The following Performance Graph compares the cumulative total
shareholder return, including the reinvestment of dividends, on the
Company's Common Stock with the cumulative return of the NASDAQ
Industrial Index for the period from November 6, 1992 to September 30,
1998.
[GRAPH]
ASSUMES $100 INVESTED ON NOVEMBER 6, 1992 IN
ZOLTEK COMPANIES, INC. COMMON STOCK,
THE NASDAQ INDUSTRIAL INDEX AND
THE RUSSELL 2000 INDEX
<TABLE>
<CAPTION>
Nov. 6, 1992 Sep. 30, 1993 Sep. 30, 1994 Sep. 30, 1995 Sep. 30, 1996 Sep. 30, 1997 Sep. 30, 1998
<S> <C> <C> <C> <C> <C> <C> <C>
Zoltek Companies, Inc. 100 168.75 281.26 618.77 2850.07 4668.87 871.90
NASDAQ Industrial Index 100 122.37 121.69 169.61 198.03 265.90 269.12
The Russell 2000 Index 100 127.31 130.64 161.21 182.39 242.92 196.73
</TABLE>
CERTAIN TRANSACTIONS
Mr. Bealke, who is a director of the Company, also is Vice
Chairman of Southwest Bank of St. Louis ("Southwest Bank") which is the
Company's bank lender. Mr. Rumy, the Chairman, President and Chief
Executive Officer of the Company and a director, has served as a
director of Southwest Bank since May 1996. As of September 30, 1998,
the Company's borrowings from Southwest Bank aggregated $2,809,900.
During the fiscal year ended September 30, 1998, the Company's interest
payments to Southwest Bank aggregated $306,621.
During fiscal 1998, in connection with the Company's operations,
the Company from time to time chartered an airplane from Twin Springs
Aviation, Inc., a corporation wholly owned by Mr. Rumy, the Chairman,
President and Chief Executive Officer of the Company. The total of all
such charter payments made by the Company during fiscal 1998 was
$419,023.
The Company believes that all of the transactions set forth above
were made on terms not less favorable to the Company than would have
been obtained from unaffiliated third parties. All future transactions
(including loans) between the Company and its officers, directors,
principal shareholders and affiliates, are required to be approved by a
majority of the Board of Directors, including
-9-
<PAGE>
<PAGE>
a majority of the independent and disinterested outside directors and
must be on terms no less favorable to the Company than could be obtained
from unaffiliated third parties.
APPOINTMENT OF AUDITORS
PricewaterhouseCoopers LLP served as the Company's independent
accountants for fiscal 1998. The Board of Directors anticipates that
representatives of PricewaterhouseCoopers LLP will be present at the
Annual Meeting of Shareholders to respond to appropriate questions and
to make a statement if they desire. The Board of Directors has not yet
appointed independent accountants to be the Company's auditors for
fiscal 1999. The Company expects that the Company's auditors for fiscal
1999 will be appointed by the end of the second quarter of fiscal 1999.
PROPOSALS OF SHAREHOLDERS
Under applicable regulations of the Securities and Exchange
Commission, all proposals of shareholders to be considered for inclusion
in the proxy statement for, and to be considered at, the 1999 Annual
Meeting of Shareholders must be received at the offices of the Company,
c/o Daniel D. Greenwell, Chief Financial Officer and Corporate
Secretary, 3101 McKelvey Road, St. Louis, Missouri 63044 by not later
than September 23, 1999.
The Company's By-Laws also prescribe certain time limitations and
procedures which must be complied with for proposals of shareholders to
be included in the Company's proxy statement for, and to be considered
at, such annual meeting. The By-Laws of the Company provide that
shareholder proposals which do not appear in the proxy statement may be
considered at a meeting of shareholders only if written notice of the
proposal is received by the Secretary of the Company not less than 30
and not more than 60 days before the prior year's annual meeting;
provided, however, that, in the event that less than 40 days' notice or
prior public disclosure of the date of the meeting is given or made to
shareholders, notice by the shareholder to be timely must be received
not later than the close of business on the tenth day following the day
on which such notice of the date of the annual meeting was mailed or
such public disclosure was made. Any such notice of a shareholder
proposal by a shareholder to the Secretary of the Company must be
accompanied by (a) a brief description of the business desired to be
brought before the annual meeting and the reasons for conducting such
business at the annual meeting, (b) the name and address of the
shareholder who intends to present the proposal for a vote, (c) the
class and number of shares of Common Stock which are beneficially owned
by the shareholder and (d) a description of any material interest of the
shareholder in such business.
-10-
<PAGE>
<PAGE>
OTHER MATTERS
The Board of Directors of the Company does not intend to present
at the Annual Meeting any business other than that referred to in the
accompanying Notice of Annual Meeting. As of the date hereof, the Board
of Directors was not aware of any other matters which may properly be
presented for action at the Annual Meeting. If, however, any other
matters should properly come before the Annual Meeting, it is the
intention of the persons named on the Proxy Card to vote the shares
represented thereby in accordance with their judgment as to the best
interest of the Company on such matters.
ZSOLT RUMY
Chairman of the Board, President
and Chief Executive Officer
January 21, 1999
-11-
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ZOLTEK COMPANIES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Zsolt Rumy and Daniel D. Greenwell,
and each of them, with or without the other, proxies, with full power of
substitution to vote, as designated below, all shares of stock that the
signatory hereof is entitled to vote at the Annual Meeting of Shareholders
of Zoltek Companies, Inc. to be held at the Abilene Country Club, 4039 South
Treadaway, Abilene, Texas, on Tuesday, February 23, 1999, at 10:00 A.M., local
time, and all adjournments thereof, all in accordance with and as more fully
described in the Notice and accompanying Proxy Statement for such meeting,
receipt of which is hereby acknowledged.
1. ELECTION OF CLASS III DIRECTORS
/ / FOR all nominees listed below / / WITHHOLD AUTHORITY
(except as written to the contrary to vote for all nominees listed
below) below
ZSOLT RUMY and CHARLES A. DILL
(INSTRUCTION: To withhold authority to vote for any individual nominee
write that nominee's name in the space provided below.)
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2. IN THEIR DISCRETION UPON ANY BUSINESS WHICH MAY PROPERLY COME BEFORE THE
MEETING.
/ / FOR / / AGAINST / / ABSTAIN
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" EACH OF THE NOMINEES LISTED.
Dated this _____ day of _____________________________, 1999.
PLEASE DATE, SIGN AND MAIL PROMPTLY IN THE ENCLOSED ENVELOPE.
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Signature
Please date and sign in the exact name in
which you own the Company's Common Stock.
Executors, administrators, trustees and others
acting in a representative or fiduciary
capacity should so indicate when signing.
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APPENDIX
Page 9 of the printed Proxy contains a Performance Graph. The
information contained in the graph has been presented in a tabular
format that may be processed by the EDGAR system
