SECURITIES AND EXCHANGE COMMISSION
                                Washington, D.C. 20549

           (Mark One)                 FORM 10-K
           [X]

           ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                                 EXCHANGE ACT OF 1934
                     For the fiscal year ended December 31, 1995
                                          OR
           []

               TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                                      SECURITIES
                                 EXCHANGE ACT OF 1934
                          For the transition           to
                                 period from  _______      _______

                         Commission file          1-7276
                                  number       ____________

                               EXOLON-ESK COMPANY
                            _________________________
                          (Exact name of registrant as
                            specified in its charter)

                   Delaware                              16-0427000
             ____________________                    ___________________

                (State or other                       (I.R.S. Employer
                jurisdiction of                      Identification No.)
               incorporation or
                 organization)
                            1000 East Niagara Street,
                               Tonawanda, NY 14150
                            _________________________

                         (Address of Principal Executive
                                     Offices
                                 (716) 693-4550
                             _______________________

                         (Registrant's telephone number,
                              including area code)

                                                          Name of each
           Title of each class                          exchange on which
                                                           registered
           ____________________                         _________________
           Common stock $1 par                            Boston Stock
                  value                                     Exchange

          Indicate  by  check  mark  if  disclosure  of  delinquent  filers
          pursuant to Item  405 of Regulation S-K is  not contained herein,
          and will not be contained, to the best of Registrant's knowledge,
          in  definitive proxy  or information  statements incorporated  by
          reference in Part III of this Form 10-K or any amendment  to this
          Form 10-K. ( )

          Indicate by check  mark whether the registrant (1)  has filed all
          reports  required to  be  filed by  section 13  or  15(d) of  the
          Securities Exchange  Act of 1934  during the preceding  12 months
          (or for such  shorter period that the registrant  was required to
          file  such reports),  and (2)  has  been subject  to such  filing
          requirements for the past 90 days. Yes   X      No      

          At February  6, 1996 the  aggregate market value of  the publicly
          traded voting stock  held by nonaffiliates of  the Registrant was
          $2,200,105   based  upon the  closing price  of the  Registrant's
          Common  Stock  on that  date  as  reported  by the  Boston  Stock
          Exchange.    Solely  for the  purposes  of  this  calculation all
          persons who are or may be Officers or Directors of the Registrant
          and  all persons  or groups  that have  filed Schedules  13D with
          respect  to  the  Registrant's  stock  have  been  deemed  to  be
          affiliates.

          As of  February 6, 1996,  the Registrant had  outstanding 481,995
          shares of $1 par value Common Stock.

          Documents Incorporated by Reference

          Portions of  the Registrant's 1993  Form 10-K, Form 10-Q  for the
          period ended September  30, 1993, Form 10-Q for  the period ended
          March 31, 1995, and  the Proxy Statement dated April 5,  1996 are
          incorporated by reference in Parts I, II and III of this report.

                                                   Exhibit Index - page  66

                                                        Total Pages -   134


                                        PART I

          Item 1.  Business

                                  EXOLON-ESK COMPANY

          (a)  General Development of the Business

               The Exolon Company  was founded in  1914 as a  Massachusetts
          corporation and reincorporated as a Delaware corporation in 1976.
          On April 27, 1984, ESK Corporation merged into the Exolon Company
          and the resulting  company was renamed  Exolon-ESK Company.   (As
          used herein, the   Company  refers to Exolon-ESK  Company and its
          wholly  owned Canadian Subsidiary.)   The Company  issued 499,219
          shares  of  its Class  A Common  Stock and  31,523 shares  of its
          Series  B   Convertible  Preferred   Stock  to   Wacker  Chemical
          Corporation as  a result  of the  merger.  In  December of  1995,
          Wacker  Chemical Corporation transferred all of its Company stock
          to Wacker Chemicals (USA), Inc. ( Wacker USA ).

               The Company is  engaged in the business of manufacturing and
          selling   products  which  are  used  principally  for  abrasive,
          refractory and metallurgical applications.   The primary products
          of the  Company are  fused  aluminum oxide  and silicon  carbide.
          Other product  lines include fused specialty products sold to the
          refractory industry.

               Effective at  the time of  the merger,  the Company  entered
          into  a Restated Patent License Agreement with Elektroschmelzwerk
          Kempten GmbH ("Kempten").  Both Kempten and Wacker USA are wholly
          owned  subsidiaries of Wacker  Chemie GmbH.   At the  time of the
          merger,   the   Company   also   entered   into    an   exclusive
          distributorship and sales  representation agreement with  Kempten
          for the  United States  and Canada  relating  to silicon  carbide
          products.   The Company  makes sales  as a  distributor and  as a
          sales   representative  under  this  agreement.  The  Company  is
          currently in discussions  with Kempten with regard  to amendments
          of this  agreement.   Should  the  agreement be  terminated,  the
          Company believes that  purchases of the  products now covered  by
          the  agreement  can  be  made in  sufficient  quantities  and  at
          prevailing  market prices  from alternative  suppliers, including
          from  its  Norwegian joint  venture.   In  addition,  the Company
          represents Kempten  as a distributor  of boron carbide  grains to
          selected markets.

          (b)  Financial Information about Industry Segments

               The Company has  only one business segment,  the manufacture
          of abrasive  materials and  products for  abrasive, metallurgical
          and refractory uses.  The Company regards  its principal business
          as being in a single industry segment.

          (c)  Narrative Description of Business

               The  Company's  crude  silicon carbide  is  produced  at the
          Company's  plant in  Hennepin, Illinois.    The Company  produces
          crude aluminum oxide  and certain other products at  its plant in
          Thorold,  Canada  owned  by Exolon-ESK  Company  of  Canada, Ltd.
          ("Exolon Ltd."), its wholly owned  subsidiary.  Some of the crude
          products are  sold directly to  customers, but most of  the crude
          products  are shipped  to the  Company's plant in  Tonawanda, New
          York, where the Company crushes,  grades and formulates the crude
          products into granular products for sale to customers.

               Methods  of distribution.    While  most  of  the  Company's
          products   are  sold   directly  to   its   customers  by   sales
          representatives employed by  the Company, a portion  of the sales
          are made  through industrial distributors located  throughout the
          United States and  Canada.   Export sales  are made  on a  direct
          basis and through agents.

               Raw  materials.   The principal  raw materials  used by  the
          Company are abrasive  grade bauxite, petroleum coke,  silica sand
          and cast iron borings.

               The  Company purchases  many other  products  such as  fiber
          drums,   wood  pallets,   bags,  oil,  natural   gas,  chemicals,
          electrodes and carbon products.

               The abrasive  grade bauxite  used by  the Company  presently
          comes from the  Republic of Guinea in West  Africa, Australia and
          The People's Republic  of China.  Petroleum coke  and silica sand
          originate from United States sources.

               Large  quantities  of  electric  power  are  purchased  from
          Ontario Hydro for use by the Company's Canadian furnace plant and
          from the  Illinois Power Company  for use in its  Hennepin plant.
          The  Company  believes  that  adequate  supplies  of  power  will
          continue  to be  available.   Adequate supplies of  raw materials
          have  in general  been available  to the  Company at  competitive
          prices.

               Employees.   As of  December 31, 1995,  the Company  had 267
          employees.   A new collective bargaining agreement was negotiated
          at the Tonawanda, New  York plant in the  third quarter of  1995.
          In  1993  and  1994,  the  Company  negotiated   new  three  year
          agreements  with  its  Hennepin, Illinois  and  Thorold,  Ontario
          manufacturing employees, respectively.   In 1993, 1994  and 1995,
          agreement was  reached on  methods to  further reduce  employment
          levels, consolidate jobs and improve operational efficiencies.

               Major Customers.  Sales to one customer accounted for 8% and
          12% of consolidated net sales of the Company for  the years ended
          December  31,  1995  and 1994.    As of  December  31,  1995 this
          customer's    accounts   receivable    balance   accounted    for
          approximately 8% of  the Company's total  trade receivables.   In
          management's opinion, the loss of  this customer would not have a
          material adverse effect on the Company.

               Competition.   The industry in which  the Company is engaged
          is highly competitive.   Principal North American  competition is
          from  three  well  established  North  American  companies.    In
          addition, substantial quantities  of grain are imported  and sold
          in  North America by  foreign based producers  of abrasive grain.
          Each  of the  North  American  competitors,  in addition  to  the
          Company, have silicon  carbide grain processing facilities.   Two
          of the three also have  aluminum oxide crude and grain production
          operations, and all but one have silicon carbide crude production
          facilities.

               Competition  in the industry is based upon pricing, service,
          and  product performance.   The  Company's products  are sold  to
          other  manufacturers and, as  a result,  the distribution  to the
          industry  markets is  highly competitive.    Major customers  are
          continually  striving to  remain competitive  by controlling  the
          costs for  raw materials purchased from the Company.  In order to
          meet  customer demand and  for competitive purposes,  the Company
          maintains  substantial inventories.   In  addition,  it has  been
          Company  policy to confine its primary operations to the electric
          furnace production and processing of grain products.

               Backlog.    As of  December  31,  1995,  the Company  had  a
          consolidated  backlog of $5,235,000  as compared to  $2,873,000 a
          year earlier.   The  increase in backlog principally results from
          increased  1995 sales  recorded and  reduced  shipment levels  in
          December  1995 resulting  from the  Company s  holiday shut  down
          between Christmas  and New  Years Day.   All of  this backlog  is
          expected to be shipped in 1996.  

               Seasonal  Effect.  The  Company's business is  generally not
          seasonal.   However,  vacation  shutdowns  by  a  number  of  its
          customers can influence third quarter sales.

               Pollution Control.  The Company is involved in operations in
          which there  is a  continued risk that  the environment  could be
          adversely affected.  The Company  is in frequent contact with the
          various environmental agencies  in the jurisdictions in  which it
          operates in an attempt to maintain environmental compliance.  The
          following represents the primary outstanding environmental issues
          currently being addressed.

               The Government of  Norway has held discussions  with certain
          Norwegian industries  including the abrasive  industry concerning
          the  implementation of reduced  gaseous emission standards.   The
          Company's  Norwegian  joint  venture  is  participating in  these
          discussions to help achieve the Norwegian Government's objectives
          as well  as assuring long  term economic viability for  the joint
          venture.

               The Company s  joint venture  appointed a  project group  to
          complete a study and define a project to minimize sulfur and dust
          emissions  which was presented  to the Norwegian  State Pollution
          Control Authority ( Authority ) on March 1,  1995.  The Authority
          has prepared an internal study  of the report and the Authority s
          draft for new  concessions was presented to the  joint venture in
          February 1996.    Based  on a  consensus  for  the  metallurgical
          industry,  the joint venture  has initiated discussions  with the
          Authority  to  obtain  acceptable emissions  levels.    The costs
          associated with the implementation  of environmental expenditures
          are uncertain as a result of various alternatives presently being
          considered by the Norwegian joint venture.
           
               The  Company has been directed by the Illinois Environmental
          Protection   Agency  to  control  its  sulfur  emissions  at  its
          Hennepin, Illinois silicon  carbide furnace plant.   Reference is
          made to the information contained in  Note 14(a) of the Notes  to
          Financial  Statements beginning  on  page  40,  which  is  hereby
          incorporated herein by reference.

               Management   believes   all  necessary   pollution   control
          equipment  at  the Company's  plants in  Tonawanda, New  York and
          Thorold,  Ontario are  in  place,  and     all current  pollution
          control requirements are being met at both plants.

               Norwegian   Operations.       The   Company's   wholly-owned
          subsidiary, Norsk Exolon A/S is  a limited partner in a Norwegian
          partnership,  Orkla Exolon  K/S  (the  "Partnership"),  which  is
          engaged in the manufacture and  sale of silicon carbide crude and
          grain products.

               Norsk Exolon A/S has a 50% interest in the Partnership, with
          another  Norwegian company, Orkla  A/S, owning the  balance.  The
          furnace  plant,  processing  plant and  other  facilities  of the
          Partnership  were constructed  in  the  early  1960's  under  the
          guidance and technical direction of the Company.  The partnership
          began manufacturing operations during 1963.

          (d)  Financial Information about  Foreign and Domestic Operations
          and Export Sales

               Financial information about  foreign and domestic operations
          and export  sales is incorporated by reference to Note 5 of Notes
          to Consolidated Financial Statements, appearing on pages 26-28 of
          Part II, Item 8.

               The  financial statements  of  Orkla  Exolon  K/S  are  also
          included in this  Form 10-K on the  financial statement schedules
          on  pages  49-64.    The  Company's  interest  in  the  Norwegian
          partnership is subject to the usual risks of  foreign investment,
          including  currency fluctuations.  Currency fluctuation is also a
          risk  associated with  the  Company's Canadian  plant operations.
          The Company  reduces Canadian currency  exposure with the  use of
          foreign  currency  forward contracts  as  hedges against  certain
          commitments in Canadian dollars.

          Item 2.  Properties

               The Company's  main office  and grain  processing plant  are
          located in Tonawanda, New York.   The plant and office buildings,
          which are  owned by the  Company, contain 273,000 square  feet of
          space,  and occupy  6 of 34  acres owned  by the Company  at this
          site.   The  facilities were  originally completed  in 1943,  and
          substantial additions  to the  plant  have been  made since  that
          date.

               The  Company has  an  electric  furnace  plant  situated  in
          Thorold, Ontario, Canada.  All  plant and office buildings at the
          plant are owned by the Company, as  well as the 43 acres of  land
          on which  the facilities  are located.   In total,  the buildings
          consist  of  251,000  square  feet  of  space.    The  plant  was
          originally built in 1914.   Substantial additions have been  made
          in subsequent years, including the construction of a new aluminum
          oxide furnace in 1985.

               The Company's Hennepin, Illinois plant includes four outdoor
          furnace groups and buildings of  47,800 square feet, located on a
          78 acre site  which is owned by the Company.   Construction began
          in late 1977  and was completed in  the Spring of 1979  for three
          furnace  groups.   The expansion  to a  fourth furnace  group was
          completed in 1989.

               The  Company also has operations in Norway conducted through
          a joint venture, Orkla Exolon K/S, of  which the Company owns 50%
          through the Company's wholly-owned  subsidiary, Norsk Exolon A/S,
          a holding company.   The office and plant  of the Norwegian joint
          venture  are located  in Gjolme,  Norway.   The plant  and office
          building, and the land  upon which it is  situated, are owned  by
          the joint  venture.  In  total, the  plant and office  consist of
          154,000 square feet of space, on 88 acres of land.  The plant and
          office   were  constructed   from  1961-1963,   with  substantial
          additions made thereafter.

               The Company  believes that all  of these plants are  in good
          condition  and  suited  for  the  purposes  for  which  they  are
          operated.

          Item 3.  Legal Proceedings

          a.   Environmental Proceedings - Hennepin, Illinois Plant 

               Reference is  made to  the information  presented under  the
          heading  "Environmental   Issues  -  Hennepin,   Illinois  Plant"
          appearing under Note 14(a) to the Notes to Consolidated Financial
          Statements contained  in this Form  10-K Report, which  is hereby
          incorporated herein by reference.

          b.   Exolon-ESK Company and Exolon-ESK Company of Canada, Ltd. v.
               Michael Perrotto, et al.

               Reference is  made to the information contained in "PART II,
          Item  1. Legal Proceedings, under the heading "Exolon-ESK Company
          and Exolon-ESK Company  of Canada, Ltd.  v. Michael Perrotto,  et
          al." (the  Perrotto Case ) in  the Company's Form 10-Q Report for
          the period ended September 30, 1993, which is hereby incorporated
          herein by reference.

               On  February 29, 1996, the Company and Exolon-Canada entered
          into  a  Final  Release  (the   Release )  with  their  insurance
          carriers  whereby they  agreed to  release the carriers  from all
          claims based on the activities  of the defendants in the Perrotto
          Case,   in  consideration  of  a  payment  of  $535,000  Canadian
          (approximately  $390,000 U.S.).  Under the  terms of the Release,
          the  insurance carriers denied any liability, and the payment may
          not be  indicative of  the amount  of  any recovery  that may  be
          obtained from the defendants.

          c.   Federal Proceedings

               Reference is  made to the  information contained in  Part I,
          "Item  3.  Legal  Proceedings"  under  the  heading  "e.  Federal
          Indictments" in the Company's Form 10-K Report for the year ended
          December  31,  1993,  which  is  hereby  incorporated  herein  by
          reference.  The proceedings  described thereunder are hereinafter
          referred to as the "Antitrust Proceedings".

               Reference  is  made  to   information  concerning  the   DLA
          suspension contained  in Note 14(b)  "Legal Matters" of  Part II,
          Item 8, Notes  to Consolidated Financial Statements  beginning on
          page 41, which is hereby incorporated herein by reference

          d.   General  Refractories Company  v.  Washington Mills  Electro
               Minerals Corporation and Exolon-ESK Company

               The description of a class action lawsuit relating to claims
          under the  Sherman Act  brought by  General Refractories  Company
          against  Washington Mills  Electro  Mineral Corporation  and  the
          Company, appearing under  the heading  Legal Matters   under Note
          7(b) to the Notes to Consolidated Financial Statements on Page 10
          of the  Company s Form 10-Q  reported for the period  ended March
          31,  1995, is  hereby incorporated  herein by  reference.   On or
          about July 17,  1995, a law  suit captioned  Arden  Architectural
          Specialties,  Inc.   v.   Washington   Mills   Electro   Minerals
          Corporation  and   Exolon-ESK  Company,    (95-CV-05745(m)),  was
          commenced  in the  United States District  Court for  the Western
          District  of New  York.    The  Arden  Architectural  Specialties
          complaint purports to be a class action that is based on the same
          matters alleged in the General Refractories complaint.

          Item 4.  Submission of Matters to a Vote of Security Holders

               None.
                                       PART II


          Item 5.   Market  for  Registrant's   Common  Stock  and  Related
                    Stockholder Matters

               The Company's  Common Stock  is traded on  the Boston  Stock
          Exchange.    The quarterly  common  stock  price  ranges  are  as
          follows:

                        PRICE RANGE OF COMMON STOCK BOSTON STOCK EXCHANGE

                                             QUARTER

                          1            2            3              4
                      _________   __________   ______________  _____________
           High-Low $17-1/2 -16  $18-1/2 -15  $18-1/2 -18-1/2  $22 - 18-5/8 
           1995

           High-Low    $22 - 20     $20 - 18        $18 - 17   $17-1/4 -17-1/4 
           1994

               Information  concerning   limitations  on  the   payment  of
          dividends on the Company's Common Stock is hereby incorporated by
          reference to Notes 8  and 10 to  Notes to Consolidated  Financial
          Statements beginning on pages 29 and 33, respectively.

               The number of stockholders of record of the Company's Common
          Stock,  $1 par  value, was   178  as of  February 6,  1996.   The
          Company  did not pay any dividends on its Common Stock in 1995 or
          1994.

               The shares  of the  Company's Class A  Common Stock,  all of
          which are owned by Wacker Chemical (USA), Inc., are not  publicly
          traded.

          <PAGE>

          Item 6.   Selected Financial Data

               The  "Selected Financial  Information"  for  the five  years
          ended December 31, 1995 appears on pages 8 and 9.


          <TABLE>

                            EXOLON-ESK COMPANY AND SUBSIDIARIES
                        (thousands of dollars except share amounts)
          <CAPTION>

          SELECTED FINANCIAL INFORMATION          YEARS ENDED DECEMBER 31,
                                             1995   1994    1993   1992    1991
                                            ______ ______  ______ ______  ______
          <S>                              <C>     <C>    <C>     <C>    <C>

          Statement of Operations:
          Net Sales                        $68,592 $59,494 $58,225 $58,387 $53,390
          Cost of Goods Sold                53,212  46,631  45,860  46,009  40,889
          Depreciation                       2,873   2,992   3,210   3,182    3,084

          Selling, General and               4,958   5,039   5,478   4,673    5,875
          Administrative Expense
          Research and Development              22     289      54      64      249
          Environmental Compliance Charges       -   1,357       -     210       -
                                            ______  ______   _____   _____    _____
              Operating Income               7,527   3,186   3,623   4,249    3,293

          Other (Income) Expenses:
           Equity in (Earnings) Loss of      (793)   (431)      32     151      796
          Norwegian Joint Venture  
            Interest Expense                 1,469   1,480   1,441   1,367    1,974
            Other                              (6)     195     232     495    (145)
                                             _____   _____   _____   _____     ____


          Earnings before Income Taxes and Cumulative
            Effect of  Accounting Change     6,857   1,942   1,918   2,236      668
          Income Tax Expense                 2,893     426     712     923      125
                                             _____   _____   _____   _____   _____

          Earnings before Cumulative Effective of 
            Accounting Change                3,964   1,516   1,206   1,313      543
          Cumulative Effect of Accounting Change -
            Net of Income Tax Benefit        (502)       -  (1,173)      -        -
                                             _____   _____  ______   _____    _____
          Net Earnings                      $3,462  $1,516     $33  $1,313     $543
                                             =====   =====   =====   =====    =====

          Primary Earnings (Loss) per share of Common
          Stock:
              Earnings before Cumulative Effect
                of Accounting Change         $4.07   $1.53   $1.21   $1.42    $0.56
              Cumulative Effect of Accounting Change -
                 Net of Tax Benefit        ($0.52)       - ($1.22)       -       -
                                            ______   _____  ______   _____    _____

          Net Earnings (Loss) per share      $3.55   $1.53 ($0.01)   $1.42    $0.56
                                             =====   =====  ======   =====    =====

          Primary Earnings (Loss) per share of Class A Common
          Stock:
            Earnings before Cumulative Effect of

              Accounting Change              $3.82   $1.44    $1.14   $1.16   $0.46
            Cumulative Effect of  Accounting Change -
               Net of Tax Benefit          ($0.49)       -  ($1.15)       -       -
                                            ______   _____   ______   _____   _____
          Net Earnings (Loss) per share      $3.33   $1.44  ($0.01)   $1.16   $0.46
                                            ======   =====   ======   =====   =====
          </TABLE>
          </PAGE>


          <TABLE>

                            EXOLON-ESK COMPANY AND SUBSIDIARIES
                        (thousands of dollars except share amounts)
          <CAPTION>

          SELECTED FINANCIAL INFORMATION -
          CONTINUED                               YEARS ENDED DECEMBER 31,

                                             1995   1994    1993   1992    1991
                                            _____   _____  _____   _____  _____
          <S>                              <C>     <C>    <C>     <C>    <C>
          Fully Diluted Earnings per share of Common
          Stock:

              Earnings before Cumulative Effect
                of  Accounting Change        $3.93   $1.50  $1.20   $1.39  $0.58
              Cumulative Effect of Accounting Change -
                 Net of Tax Benefit        ($0.49)       -($1.17)       -      -
                                            ______   _____  _____   _____  _____

          Net Earnings per share             $3.44   $1.50  $0.03   $1.39  $0.58
                                             =====   =====  =====   =====  =====

          Fully Diluted Earnings per share of Class A Common
          Stock:
            Earnings before Cumulative Effect of 
              Accounting Change              $3.71   $1.42  $1.13   $1.14  $0.47

            Cumulative Effect of  Accounting Change -
               Net of Tax Benefit          ($0.47)       -($1.10)       -      -
                                             _____   _____  _____   _____  _____
          Net Earnings per share             $3.24   $1.42  $0.03   $1.14  $0.47
                                             =====   =====  =====   =====  =====

          Weighted Average Shares Outstanding:

              Primary:   Common Stock          482     482    482     482    482
                                             =====   =====  =====   =====  =====
                         Class A Common        513     513    513     513    513
                         Stock               =====   =====  =====   =====  =====

              Fully      Common Stock          504     504    504     504    504
          Diluted:                           =====   =====  =====   =====  =====

                         Class A Common        535     535    535     535    535
                         Stock               =====   =====  =====   =====  =====

          Dividends per share:
            Series A Cumulative Preferred  $1.1250 $0.8437$1.1250 $1.1250$1.9688
          Stock
            Series B Cumulative Preferred  $1.1250 $0.8437$1.0517 $0.8316$1.4552
          Stock

            Common Stock                         -       -      -       -      -
            Class A Common Stock                 -       -      -       -      -

          SUMMARY BALANCE SHEET
          INFORMATION:                                  DECEMBER 31,

                                             1995   1994    1993   1992    1991
                                            _____   _____  _____   _____  _____

          Current Assets                   $29,395 $25,441$25,434 $23,937$23,126
          Current Liabilities                7,981   7,387  8,660   8,021 11,783
                                            ______  ______ ______  ______ ______
          Working Capital                   21,414  18,054 16,774  15,916 11,343

          Total Assets                      50,215  45,309 45,834  45,925 47,614
          Long-Term Debt                    15,350  14,900 16,900  18,691 16,509
          Stockholders' Equity              22,298  18,628 16,770  16,813 16,286

          </TABLE>
          <PAGE>

          Item 7.   Management's   Discussion  and  Analysis  of  Financial
                    Condition and Results of Operations

               The  following  discussion  and  analysis  reviews   certain
          factors  which  produced  significant changes  in  the  Company's
          results  of operations during the  three years ended December 31,
          1995.

          RESULTS OF OPERATIONS 1995 COMPARED TO 1994
               In 1995,  the Company s  net sales  increased $9,098,000  to
          $68,592,000,  an  increase  of  15%  compared  to  net  sales  of
          $59,494,000 in 1994.  The 1995 increase was primarily a result of
          an 18% increase in the Company s shipment volume of its principal
          manufactured  and purchased products  due to a  strong demand for
          abrasive products during  1995, when compared  to 1994.   Average
          selling  prices  for  the  Company s  principal manufactured  and
          purchased  products increased  by approximately  1% during  1995,
          when compared to 1994.

               Consolidated net  earnings  were  $3,462,000  or  $3.55  per
          common share for the year ended December 31, 1995.  This compares
          to consolidated net earnings of $1,516,000 or $1.53 per share for
          the  1994 year.  During 1995,  the Company adopted the provisions
          of Statement of Financial Accounting Standards No. 106 (SFAS 106)
          for its  Canadian subsidiary, which  resulted in a  one time non-
          cash after  tax  charge of  $502,000  or $.52  per share.    This
          statement  requires  that the  cost  of postretirement  benefits,
          including health  care and life  insurance, be accrued  during an
          employee s active working career.  In years prior  to 1995, these
          costs  were  expensed as  paid.   The  Company s  U.S. operations
          adopted SFAS 106 during 1993.  Prior to the effect of this charge
          related to SFAS 106, the Company s consolidated net earnings were
          $3,964,000 for the 1995 year or $4.07 per share, when compared to
          $1,516,000 or  $1.53 per share for 1994.  In addition, 1994's net
          earnings were adversely  affected by a $1,357,000  unusual charge
          related  to the  1994  settlement  of  environmental  litigation.
          (This charge is discussed further within Note 14(a)  of the Notes
          to  Consolidated  Financial  Statements,  which  is  incorporated
          herein  by reference and within the operating expense comparisons
          to follow.)

               Cost  of sales, excluding  depreciation, as a  percentage of
          sales declined  to 77.6% in 1995, when compared to 78.4% in 1994;
          therefore gross margins, as a percent of sales increased to 22.4%
          in 1995 compared to 21.6% in  1994.  The 1995 enhancement is  due
          primarily to the economies of scale available at the higher sales
          levels recognized in  1995 and the  continued focus on  increased
          manufacturing efficiencies at all Company facilities.

               Total   operating  expenses   including  depreciation   were
          $7,853,000  during 1995  versus  $9,677,000 during  1994.   As  a
          result  operating income increased to $7,527,000 in 1995 compared
          to $3,186,000 for the 1994 year.  The 1995 decrease in  operating
          expenses of $1,824,000 is a  result of the decreases of $119,000,
          81,000,  $267,000  and $1,357,000  in  depreciation, selling  and
          general  and   administrative,  research   and  development   and
          environmental compliance charges, respectively.

               Depreciation,  as  a percent  of  sales, was  4.2%  for 1995
          compared to 5.0% for 1994.

               Selling,  general  and administrative  expense  decreased by
          $81,000 in 1995, due principally to a $334,000 reduction in legal
          fees recorded during  1995 versus the prior year.   Other selling
          and general and administrative expense categories  were generally
          increased, with the  exception of reduced health  care costs, due
          to the  increased 1995 sales  volume of  products shipped.   As a
          percent  of net  sales, selling  and  general and  administrative
          expense decreased to 7.2% in 1995, from 8.5% for the 1994 year.

               Research and development expense  decreased by $267,000  for
          1995  mainly as  a result  of the  $188,000 decrease  in expenses
          associated  with  R&D  costs   related  to  specialty  refractory
          products  at the Company s Canadian  operation.  During 1995, the
          Company eliminated R&D  spending related to one  of its specialty
          products produced at its Canadian plant. 

               Interest expense  from  continuing  operations  declined  to
          $1,469,000  in 1995  from  $1,480,000 in  1994.   Higher  average
          interest  rates experienced on  the Company s variable  rate debt
          were offset by lower average borrowing levels during  1995 versus
          the 1994 year.  The average  interest rate on the U.S.  revolving
          and demand lines of credit was  8.4% during 1995 compared to 7.3%
          in 1994.  The Company  recorded lower average borrowing levels in
          1995  on its  U.S. and  Canadian  revolving and  demand lines  of
          credit  and its  U.S. term  loan.   The  average total  borrowing
          outstanding for the three revolving lines of credit combined with
          the  term loan was $8.9 million for  1995, when compared to $10.5
          million for the 1994 year.

               The  Company s  Norwegian joint  venture, Orkla  Exolon K/S,
          reported the  Company s 50%  share in the  pre-tax income  of the
          venture was $793,000  for the 1995 year versus  pre-tax income of
          $431,000 for the 1994 year.  The Company s share of the venture s
          net  sales  increased  19%  in  1995  to  $8,140,000  compared to
          $6,832,000  in 1994.   Net  sales, in  terms of  native currency,
          increased by 8%  in 1995 compared to  1994.  The increase  in net
          sales was a result of the 1995 improved product mix and increases
          in selling prices.   The joint venture s gross  margins, prior to
          depreciation, increased to  24% for the 1995 year  versus 18% for
          1994, principally due  to increased operational efficiency  and a
          more favorable product mix. 

               The 1995 income tax  provision was $2,893,000,  representing
          an effective rate  of 42%.   The 1995  effective rate reflects  a
          rate which  is more than  the U.S. Federal statutory  rate of 34%
          principally due to the  inclusion of state and  provincial income
          taxes.   In addition, the Company  has reserved $571,000 included
          in the  1995  tax provision for future  taxes payable related  to
          the   repatriation   of  earnings   of   the   Company s  foreign
          subsidiaries.  

          RESULTS OF OPERATIONS 1994 COMPARED TO 1993
               Net sales in 1994 were $59,494,000, representing an increase
          of 2.2% when  compared to $58,225,000 in the  year ended December
          31,  1993.    The  Company's  shipment  volume  for  its  primary
          products, which  include  manufactured  and  purchased  products,
          increased by 3.2% in 1994 when compared to 1993.  Average selling
          prices   of   the   Company's   primary   products  declined   by
          approximately  1%  in  1994, principally  resulting  from  a less
          favorable product mix in 1994 when compared to the previous year.

               Consolidated net earnings were $1,516,000 for the year ended
          December  31,  1994  compared  to  net  earnings,  prior  to  the
          cumulative effect of  an accounting change, of  $1,206,000 during
          1993.  In  1993, the Company adopted the  provisions of Statement
          of Financial Accounting Standards No. 106 (SFAS 106) for its U.S.
          operations.     This  statement   requires  that  the   costs  of
          postretirement   benefits,  including   health   care  and   life
          insurance, be accrued during an employee's active working career.
          In years prior to  1993, these costs were expensed as  paid.  The
          cumulative effect of this one-time non-cash accounting change was
          $1,173,000 after taxes,  therefore, net earnings after  this one-
          time accounting change were  $33,000 for the year  ended December
          31, 1993.

               Gross margins, prior  to depreciation expense,  increased to
          21.6%  in  1994  versus  21.2% in  1993.    Depreciation  expense
          decreased to $2,992,000 for the year ended December 31, 1994 when
          compared  to $3,210,000  for the  1993 year.   Depreciation  as a
          percent of sales, was 5.0% for 1994 versus 5.5% for 1993.

               Selling,  general  and administrative  expense  decreased to
          $5,039,000 in  1994, when  compared to $5,478,000  in 1993.   The
          $439,000  reduction was primarily a result of a $400,000 decrease
          in bad  debt expense during  the 1994 year  when compared to  bad
          debt expense  recorded for  1993.  In  1993, a separate  bad debt
          expense  of  $400,000  was  recorded  to  reflect  the  estimated
          unrealizable portion of the outstanding receivable in  connection
          with  the Hennepin  desulfurization project.    In addition,  the
          Company  decreased office  expenses by  approximately  $57,000 in
          1994.  Several of  the remaining categories included  in selling,
          general and  administrative expense increased marginally  in 1994
          when compared to the previous year.

               Research  and development  expense increased to  $289,000 in
          1994  when  compared  to  $54,000  during  1993.    The  increase
          primarily related to the 1994 additional research and development
          spending  for  specialty  refractory  products  at the  Company's
          Canadian facility.

               Environmental compliance charges of $1,357,000 were recorded
          in 1994 related to a $1,300,000 civil penalty associated with the
          October,  1994   settlement  with   the  Illinois   Environmental
          Protection Agency (IEPA).  See "Liquidity and Capital Resources",
          below.   In  addition, the  Company increased  a reserve  for its
          Canadian subsidiary  by $57,000  for the  environmental penalties
          assessed by  the Ontario  Ministry of  Environment  (MOE) upon  a
          settlement between the Company and the MOE in August, 1994.

               Interest  expense from  continuing  operations increased  to
          $1,480,000  in 1994  from  $1,441,000  for the  1993  year.   The
          $39,000  increase  in  primarily  to  result  of  higher  average
          interest rates during 1994 compared to average rates during 1993.
          The  1994 increase in  average interest  rates for  the Company's
          revolving  lines of  credit was approximately  20%.   The average
          interest rate  on the U.S.  revolving and demand lines  of credit
          was  7.3% during  1994  versus  6.1% during  1993.   The  Company
          recorded lower average  borrowing levels in 1994 on  its U.S. and
          Canadian  revolving and  demand  lines of  credit.   The  average
          borrowing outstanding for the three revolving lines of credit was
          $10.5  million in  1994, when  compared to  $11.2  million during
          1993.   This 1994 reduction  of average bank debt  contributed to
          partially  offset  the  adverse  effect  of  the  higher  average
          interest  rates incurred.   The interest rate  increases resulted
          from higher U.S. and Canadian prime rates experienced during 1994
          versus the prior year.

               The  Company's Norwegian  joint  venture, Orkla  Exolon K/S,
          reported the  Company's 50%  share in the  pre-tax income  of the
          venture was $431,000  for the 1994 year versus a  pre-tax loss of
          $32,000 for the 1993 year.  The  Company's share of the venture's
          net sales  increased  25.5% in  1994  to $6,832,000  compared  to
          $5,445,000 in 1993.   The increase in  net sales was a  result of
          the 1994 increase in shipment volume, an improved product mix and
          increases in  selling prices  due to  the strengthening  European
          economy.     The  joint   venture's  gross   margins,  prior   to
          depreciation, increased to  18% for the 1994 year  versus 11% for
          1993, principally due  to increased operational efficiency  and a
          more favorable product mix.

               Other  expense  of  $195,000  was  recorded  in  1994,  when
          compared to $232,000 in 1993.  The continued stronger U.S. dollar
          against  the Canadian  dollar accounted  for  the recognition  of
          transaction  losses  in  translating  the  Canadian  subsidiary's
          balance sheet from Canadian dollars to U.S. dollars.

               The 1994 income  tax provision was $426,000  representing an
          effective rate  of 22%.  The 1994  effective rate reflects a rate
          which  is  less than  the  U.S.  Federal  statutory rate  of  34%
          principally  due to the  1994 recognition of  Canadian investment
          tax credit  carryforwards on the Company's books  as deferred tax
          assets which were not  recorded in the prior year.   In addition,
          the Company's  Norwegian joint  venture eliminated  a substantial
          income tax reserve related to a tax case which was settled during
          1994.  The aforementioned reduction in the Company's  1994 income
          tax provision were partially offset, however, by the recording of
          an increase to the current year  provision of $442,000 due to the
          non-deductibility  of  $1,357,000   of  environmental  compliance
          charges which were discussed above.

          LIQUIDITY AND CAPITAL RESOURCES
               As of  December 31,  1995, working  capital (current  assets
          less  current  liabilities) has  increased  to $21,414,000,  when
          compared to  $18,054,000  as  of  December 31,  1994.    Accounts
          receivable increased by $1,960,000 as of December 31, 1995 versus
          1994 year end primarily as a result  of the increase in net sales
          during  1995  versus 1994.  Inventory increased  by $2,596,000 at
          December 31,  1995 when  compared to December  31, 1994.   Income
          taxes  payable and accounts  payable increased by  $1,194,000 and
          $424,000, respectively, as  of December 31, 1995  versus December
          31, 1994.   The adverse  effect of the  income taxes payable  and
          accounts payable increase was offset by  an $800,000 net decrease
          in notes payable and long-term debt during 1995.

               For the year  ended December 31, 1995, net  cash provided by
          operating  activities   was   $3,539,000.      Outstanding   bank
          indebtedness decreased by  $800,000, and cash  reserves decreased
          by $27,000  at December 31,  1995 compared to December  31, 1994.
          Net cash  provided by operating activities was sufficient to fund
          $2,695,000 of capital expenditures in the year ended December 31,
          1995.

               The Company's  current  ratio increased  to  3.7 to  1.0  at
          December 31, 1995 from 3.5 to  1.0 as of December 31, 1994.   The
          ratio of total liabilities to shareholder's equity was 1.3 to 1.0
          as of December 31, 1995 and 1.4 to 1.0 as of December 31, 1994. 

               Current financial  resources including  the availability  of
          the  revolving and  short-term  lines  of  credit  financing  and
          anticipated funds from operations are expected  to be adequate to
          meet  normal  requirements  for  the  year  ahead.   The  Company
          currently  has lines  of  credit  with  borrowing  capacities  of
          $12,000,000 in the U.S. and $800,000 in Canada.

                The  Company in its long-term cash planning normally covers
          capital  expenditures with  funds  generated internally.    Where
          abnormally large capital expenditure programs are involved, long-
          term financing  vehicles are sometimes  used.  Total  1996 normal
          capital expenditures are forecasted at $3,000,000 to maintain and
          upgrade production facilities.   The Company believes  that funds
          generated  internally  should  be  sufficient  to  finance normal
          capital expenditure  requirements in  1996.   In addition to  the
          Company s   recurring  capital   expenditures  of   approximately
          $3,000,000  during 1996,  the Company  will  incur capital  costs
          within the range of $12,000,000  to $14,000,000 over the next two
          years to comply with its environmental permit in Illinois.  As of
          December  31,  1995,  the   Company  has  incurred  approximately
          $1,400,000 of capital costs related to the facility improvements.
          The Company expects to finance  the costs of the required capital
          improvements through  a bond  offering possibly  on a  tax-exempt
          basis.  The Company has obtained a modification of its Industrial
          Revenue   Bond  Agreement  to  allow  for  the  required  capital
          expenditures  under the Consent  Order.  For  further information
          see Note 14(a) to the Notes to Consolidated Financial  Statements
          beginning on page 40, which is incorporated herein by reference.

               Reference is made to the descriptions of the following legal
          matters,  under the caption  Legal Matters   beginning on page 41
          of this  Form 10-K  Report, which  descriptions are  incorporated
          herein by reference: (i) a legal action commenced in June 1993 by
          the  Company in  Ontario, Canada  seeking  $2,000,000 in  damages
          against  certain  former  officers and  employees  and  a related
          insurance  settlement;  (ii) antitrust  proceedings  commenced in
          February 1994 against the  Company and others; (iii) a  temporary
          suspension imposed upon  the Company and others  in December 1994
          by the  U.S. Defense Logistics  Agency; and (iv) civil  law suits
          brought  against  the  Company and  others  commenced  by General
          Refractories Company in  October 1994 and by  Arden Architectural
          Specialties, Inc. in July 1995.

          <PAGE>
          <TABLE>
               A table presented  below, to assist further  in interpreting
          the  changes  in   financial  operations  for  the   three  years
          indicated, sets forth the following (I) percentages which certain
          items presented in the financial  statements bear to net sales of
          the  Company and  (ii) change  of such  items as compared  to the
          indicated prior year.

      <CAPTION>
                                                         PERIOD TO PERIOD
                                                             INCREASE
                                                            (DECREASE)
                                                         IN RELATIONSHIP
                           RELATIONSHIP TO NET SALES           TO 
                                                            NET SALES

                           YEARS ENDED DECEMBER 31,        YEARS ENDED
                           1995      1994      1993     1994-95    1993-94
                           _____     _____     _____     _____      _____

      <S>                 <C>       <C>       <C>       <C>       <C>

      Net Sales           100.0%    100.0%    100.0%         0%         0%
                           _____    ______     _____     ______      _____
      Cost of Goods Sold,
      excluding             77.6      78.4      78.8      (0.8)      (0.4)
      Depreciation

      Depreciation           4.2       5.0       5.5      (0.8)      (0.5)
      Selling, General
      and Administrative     7.2       8.5       9.4      (1.3)      (0.9)
      Expense
      Research and           0.0       0.4       0.1      (0.4)        0.3
      Development
      Environmental
      Compliance Charges       -       2.3         -      (2.3)        2.3
                           _____     _____     _____      _____      _____

                            89.0      94.6      93.8      (5.6)        0.8
                           _____     _____     _____      _____      _____
      Operating Income      11.0       5.4       6.2        5.6      (0.8)
      Other (Income)
      Expense: Equity in 
      Loss (Income)  of
      Norwegian Joint
      Venture              (1.2)     (0.7)       0.1      (0.5)      (0.8)
      Interest Expense       2.2       2.5       2.4      (0.3)        0.1
      Other                  0.0       0.3       0.4      (0.3)      (0.1)
                           _____     _____     _____      _____      _____

                             1.0       2.1       2.9      (1.1)      (0.8)
                           _____     _____     _____      _____      _____
      Earnings Before       10.0       3.3       3.3        6.7        0.0
      Income Taxes
      Income Tax Expense     4.2       0.7       1.2        3.5      (0.5)
                           _____     _____     _____      _____      _____
      Earnings Before
      Cumulative Effect
      of Acctg Change        5.8       2.6       2.1        3.2        0.5      
      Cumulative Effect
      of Acctg Change      (0.8)         -     (2.0)      (0.8)        2.0
                           _____     _____     _____      _____      _____


      Net Earnings           5.0 %     2.6 %     0.1 %      2.4%       2.5%
                            ====      ====      ====       ====       ====

      </TABLE>

          <PAGE>


          Item 8.   Financial Statements and Supplementary Data

               The  Consolidated Financial  Statements,  together with  the
          reports  thereon of  Ernst &  Young LLP  and Arthur  Andersen LLP
          dated January 12, 1996 and January 27, 1994  respectively, appear
          on pages 16 through 43 to follow.


                            Report of Independent Auditors


          Board of Directors
          Exolon-ESK Company

          We have audited  the accompanying consolidated balance  sheets of
          Exolon-ESK  Company and subsidiaries as  of December 31, 1995 and
          1994,  and  the  related   consolidated  statements  of   income,
          stockholders   equity, and cash  flows for the  years then ended.
          Our  audits also included the financial statement schedule listed
          in  the Index  at Item  14(a).   These  financial statements  and
          schedule are the responsibility of the Company s management.  Our
          responsibility  is to  express  an  opinion  on  these  financial
          statements  and schedule  based  on our  audits.   The  financial
          statements and  schedule of  Exolon-ESK Company and  subsidiaries
          for  the year  ended December  31,  1993, were  audited by  other
          auditors  whose report  dated  January  27,  1994,  expressed  an
          unqualified  opinion   on  those  statements   and  included   an
          explanatory  paragraph  that  described   the  accounting  change
          discussed in Note 11 to these financial statements.

          We conducted  our audits  in accordance  with generally  accepted
          auditing standards.   Those standards  require that  we plan  and
          perform  the audit to  obtain reasonable assurance  about whether
          the  financial statements are free  of material misstatement.  An
          audit  includes examining, on  a test basis,  evidence supporting
          the amounts  and  disclosures in  the financial  statements.   An
          audit  also includes assessing the accounting principles used and
          significant estimates made  by management, as well  as evaluating
          the  overall financial statement  presentation.  We  believe that
          our audits provide a reasonable basis for our opinion.

          In  our opinion,  the  financial  statements  referred  to  above
          present  fairly,  in  all  material  respects,  the  consolidated
          financial  position  of Exolon-ESK  Company  and  subsidiaries at
          December 31, 1995  and 1994, and the results  of their operations
          and their cash flows for the years then ended in conformity  with
          generally  accepted accounting principles.  Also, in our opinion,
          the  related financial  statement  schedule, when  considered  in
          relation  to  the basic  financial statements  taken as  a whole,
          presents  fairly in  all material  respects  the information  set
          forth therein.

          As discussed in  Note 11 to the financial statements, in 1995 the
          Company  changed  its  method of  accounting  for  postretirement
          benefits other than pensions for its Canadian subsidiary.


                                                       S/ Ernst & Young LLP


          Buffalo, New York
          January 12, 1996
          Except for Note 14 b.(ii), as to which the date is
          February 29, 1996


          <PAGE>

                       REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


          To Exolon-ESK Company:

          We  have  audited  the accompanying  consolidated  statements  of
          operations, changes  in stockholders   equity and  cash flows  of
          Exolon-ESK Company (a Delaware  corporation) and subsidiaries for
          the year ended December  31, 1993.  These  consolidated financial
          statements   and  the  schedules   referred  to  below   are  the
          responsibility of the Company s  management.  Our  responsibility
          is   to  express  an  opinion  on  these  consolidated  financial
          statements and schedules based on our audit.

          We  conducted our  audit in  accordance  with generally  accepted
          auditing  standards.   Those standards  require that we  plan and
          perform  the audit to  obtain reasonable assurance  about whether
          the financial statements are  free of material misstatement.   An
          audit  includes examining, on  a test basis,  evidence supporting
          the  amounts and  disclosures in  the  financial statements.   An
          audit  also includes assessing the accounting principles used and
          significant estimates made  by management, as well  as evaluating
          the  overall financial statement  presentation.  We  believe that
          our audit provides a reasonable basis for our opinion.

          In  our opinion,  the  financial  statements  referred  to  above
          present   fairly,  in  all  material  respects,  the  results  of
          operations  and cash flows of Exolon-ESK Company and subsidiaries
          for  the  year  ended  December  31,  1993,  in  conformity  with
          generally accepted accounting principles.

          As discussed in Note 11 to the consolidated financial statements,
          effective January  1, 1993,  the  Company changed  its method  of
          accounting  for postretirement  benefits  for  U.S. employees  in
          accordance with  Statement of Financial  Accounting Standards No.
          106,   Employers   Accounting for  Postretirement  Benefits Other
          Than Pensions. 

          Our audit was made  for the purpose of forming an  opinion on the
          basic financial statements  taken as a whole.   The schedules per
          Item  14(a)(2) are presented  for purposes of  complying with the
          Securities and Exchange Commission s rules and are not a required
          part  of the  basic financial  statements.  These  schedules have
          been subjected to the auditing procedures applied in our audit of
          the basic financial statements and, in  our opinion, fairly state
          in all  material respects the  financial data required to  be set
          forth therein in relation to the basic financial statements taken
          as a whole.


          Rochester, New York,                       S/ Arthur Andersen LLP
             January 27, 1994
          (Except with respect to
          the matters discussed in
          Note 14, as to which the
          date is March 24, 1994
          and October 6, 1994.)



           <PAGE>







                                EXOLON-ESK COMPANY
                                 AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF OPERATIONS

                                                YEARS ENDED DECEMBER 31,
          (thousands of dollars except per
          share amounts)                           1995     1994    1993
                                                  _____    _____   _____

          Net Sales                             $68,592  $59,494 $58,225
          Cost of Goods Sold                     53,212   46,631  45,860
                                                 ______   ______  ______
          Gross Profit Before Depreciation       15,380   12,863  12,365
          Depreciation                            2,873    2,992   3,210

          Selling, General & Administrative       4,958    5,039   5,478
          Expenses
          Research and Development                   22      289      54
          Environmental Compliance Charges            -    1,357       -
                                                 ______   ______  ______
          Operating Income                        7,527    3,186   3,623
          Other (Income) Expenses:

              Interest Expense                    1,469    1,480   1,441
              Equity in (Income) Loss of          (793)    (431)      32
          Norwegian Joint Venture
              Other                                 (6)      195     232
                                                 ______   ______  ______

          Earnings before Income Taxes and Cumulative
          Effect of 
              Accounting Change                   6,857    1,942   1,918
          Income Tax Expense                      2,893      426     712
                                                 ______   ______  ______

          Earnings before Cumulative Effect of    3,964    1,516   1,206
          Accounting Change
          Cumulative Effect of Accounting
          Change -
          Net of Income Tax Benefit               (502)        - (1,173)
                                                 ______   ______  ______
              Net Earnings                       $3,462   $1,516     $33
                                                 ======   ======  ======

          Primary Earnings (Loss) Per Common
          Share:
              Earnings before Cumulative Effect   $4.07    $1.53   $1.21
          of Accounting Change
              Cumulative Effect of Accounting   ($0.52)        - ($1.22)
          Change                                 ______   ______  ______
              Net Earnings (Loss)                 $3.55    $1.53 ($0.01)
                                                 ======   ======  ======
          Primary Earnings (Loss) Per Class A Common
          Share:

              Earnings before Cumulative Effect   $3.82    $1.44   $1.14
          of Accounting Change
              Cumulative Effect of Accounting   ($0.49)        - ($1.15)
          Change                                 ______   ______  ______
              Net Earnings (Loss)                 $3.33    $1.44 ($0.01)
                                                 ======   ======  ======
          Fully Diluted Earnings Per Common
          Share:
              Earnings before Cumulative Effect   $3.93    $1.50       -
          of Accounting Change

              Cumulative Effect of Accounting   ($0.49)        -       -
          Change                                 ______   ______  ______
              Net Earnings                        $3.44    $1.50       -
                                                 ======   ======  ======
          Fully Diluted Earnings Per Class A Common
          Share:
              Earnings before Cumulative Effect   $3.71    $1.42       -
          of Accounting Change

              Cumulative Effect of Accounting   ($0.47)        -       -
          Change                                 ______   ______  ______
              Net Earnings                        $3.24    $1.42       -
                                                 ======   ======  ======
          Weighted Average Shares Outstanding
          (in thousands):
            Common Stock                            482      482     482
                                                 ======   ======  ======
          Class A Common Stock                      513      513     513
                                                 ======   ======  ======

          The accompanying notes to consolidated financial statements
          are an integral part of these statements.

          <PAGE>

                                EXOLON-ESK COMPANY
                                 AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS


          (thousands of dollars except share amounts)
                                                         DECEMBER 31,  

                                                           1995    1994
                                                         ______  ______
          Assets
          Current assets:

            Cash                                           $440    $467
           
           Accounts receivable (less allowance for        8,896   6,936
          doubtful accounts of $419 in 1995 and $309
          in 1994)
            Inventories                                  19,700  17,104

            Prepaid expenses                                359     399
            Deferred income taxes                             -     535
                                                         ______  ______
          Total Current Assets                           29,395  25,441
                                                         ______  ______
          Investment in Norwegian joint venture           5,230   4,173
          Property, plant and equipment, net of 
            accumulated depreciation
                                                         15,193  15,395
          Other assets                                      397     300
                                                         ______  ______
          Total Assets                                  $50,215 $45,309
                                                         ======  ======
          Liabilities and Stockholders' Equity

          Current liabilities:
            Notes payable                                     -  $2,000
            Current maturities of long-term debt          1,550     800
            Current maturities of capital lease               -      25
          obligations
            Accounts payable                              3,229   2,805

            Accrued expenses                              1,713   1,622
            Income taxes payable                          1,329     135
            Deferred income taxes                           160       -
                                                         ______  ______
          Total Current Liabilities                       7,981   7,387
                                                         ______  ______

          Deferred income taxes                           1,300   1,548
          Long-term debt                                 15,350  14,900
          Other long-term liabilities                     3,286   2,846
          Commitments and Contingencies
          Stockholders' equity:
            Preferred stock

              Series A (liquidation preference -            276     276
          $484)
              Series B (liquidation preference -            166     166
          $484)
            Common stock, issued 512,897 ($1 par            513     513
          value)
            Class A common stock, issued 512,897 ($1        513     513
              par value)
            Additional paid-in capital                    4,345   4,345

            Retained earnings                            16,952  13,545
            Cumulative translation adjustment              (99)   (362)
            Treasury stock, at cost                       (368)   (368)
                                                         ______  ______
          Total Stockholders' Equity                     22,298  18,628
                                                         ______  ______

          Total Liabilities and Stockholders' Equity    $50,215 $45,309
                                                         ======  ======

          The accompanying notes  to consolidated financial statements  are
          an integral part of these statements.

          <PAGE>

          <TABLE>
          <CAPTION>

                         EXOLON-ESK COMPANY AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                           FOR THE YEAR ENDED DECEMBER 31,

          (thousands of dollars)                       1995    1994    1993
                                                     ______  ______  ______
          <S>                                         <C>     <C>      <C>

          Cash Flow from Operating Activities:
            Net earnings                             $3,462  $1,516     $33
            Adjustments to reconcile net earnings to net   
            cash provided by operating activities:
             

            Depreciation                              2,873   2,992   3,210
            Cumulative effect of change in              502       -   1,173
             accounting for post-retirement       
             benefits
            Equity in (income) loss of                (793)   (431)      32
             Norwegian joint venture
            (Gain) loss on fixed asset                   16    (56)    (15)
             disposals
            Deferred income taxes                       729     176 (1,060)
            Foreign currency adjustments                (2)    (14)      20
           Change in Assets and Liabilities:

            Accounts receivable                     (1,960)     656   (936)
            Inventories                             (2,596)   (347)      47
            Prepaid expenses                             40    (26)    (22)
            Other assets                               (97)     155     450
            Accounts payable                            424   (639)   (510)

            Due to affiliates                             -       -   (825)
            Accrued expenses                             91       6    (22)
            Income taxes payable                      1,194   (590)     230
            Other liabilities                         (344)     778     392
                                                     ______  ______  ______

                                                         77   2,660   2,164
                                                     ______  ______  ______
            Net Cash Provided by Operating            3,539   4,176   2,197
             Activities
          Cash Flow from Investing Activities:
                Capital expenditures                (2,695) (2,068) (2,185)
                Proceeds from fixed asset                 8     328      42
                 disposals                           ______  ______  ______

          Net Cash Used for Investing Activities    (2,687) (1,740) (2,143)
          Cash Flow from Financing Activities:
            Net (payments) of long-term debt          (800) (2,000)    (29)
            Dividends paid                             (54)    (32)    (43)

            Principal (payments) borrowings under      (25)    (50)       5
             capital lease obligations               ______  ______  ______
              Net Cash Used by Financing              (879) (2,082)    (67)
               Activities
          Net Increase (Decrease) in Cash              (27)     354    (13)
          Cash at Beginning of Year                     467     113     126
                                                     ______  ______  ______
          Cash at End of Year                          $440    $467    $113
                                                     ======  ======  ======

          Supplemental Disclosures of Cash Flow 
          Information:
          Cash paid during the year for:
            Interest                                 $1,493  $1,465  $1,400
            Income Taxes                               $991    $852    $817


          The accompanying notes to consolidated financial statements are
          an integral part of these statements.

          </TABLE>
          <PAGE>

     <TABLE>

                         EXOLON-ESK COMPANY AND SUBSIDIARIES
              CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

     <CAPTION>
      
                                PREFERRED STOCK                       CLASS A

     (thousands of dollars   SERIES A    SERIES B    COMMON  STOCK  COMMON STOCK
     except share amounts) SHARES  AMT  SHARES  AMT  SHARES   AMT  SHARES   AMT
                           ______ ____  ______ ____  ______  ____  ______  ____

     <S>                   <C>    <C>  <C>    <C>   <C>     <C>   <C>      <C>

     Balance at December   19,364 $276  19,364 $166 512,897  $513  512,897 $513
     31, 1992

       Net earnings

       Dividends declared:
         Preferred stock Series A -    
       $1.1250 per share

         Preferred stock Series B -    
       $1.0517 per share
       Change in cumulative       
     translation adjustment

                           ______ ____ ____________ _______ _____ _______  ____
     Balance at December   19,364 $276  19,364 $166 512,897  $513  512,897 $513
     31, 1993

       Net earnings

       Dividends declared:

         Preferred stock Series A -    
         $.8437 per share
         Preferred stock Series B -    
         $.8437 per share
       Change in cumulative   
     translation adjustment

                           ______ ____ _______ ____ _______ _____ _______  ____ 

     Balance at December   19,364 $276  19,364 $166 512,897  $513  512,897 $513
     31, 1994

       Net earnings

       Dividends declared:

         Preferred stock Series A -    
      $1.1250 per share
         Preferred stock Series B -    
      $1.1250 per share
     Change in cumulative translation
     adjustment

                           ______ ____ ______ _____ _______ _____ _______  ____

     Balance at December   19,364 $276  19,364 $166 512,897  $513  512,897 $513
     31, 1995              ====== ====  ====== ==== =======  ===== ======  ====


     The accompanying notes to consolidated financial statements are an
     integral part of these statements.

     </TABLE>
     </PAGE>


                          EXOLON-ESK COMPANY AND SUBSIDIARIES
              CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                       (CONT'D.)

                                                       CUMU-
                                     ADDI-            LATIVE
                                    TIONAL            TRANS-
          (thousands of dollars     PAID-IN RETAINED  LATION  TREASURY STOCK    
          except share amounts)     CAPITAL EARNINGS    ADJ    SHARES AMOUNT
                                    ______  ________  ______   ______ ______

          Balance at December 31,     $4,345  $12,071  ($703) (30,902) ($368)
          1992

            Net earnings                           33

            Dividends declared:
              Preferred stock Series A -         (22)
          $1.1250 per share
              Preferred stock Series B -         (21)
          $1.0517 per share
            Change in cumulative                         (33)
          translation adjustment

                                      ______  _______  ______  _______  _____
          Balance at December 31,     $4,345  $12,061  ($736) (30,902) ($368)
          1993

            Net earnings                        1,516

          Dividends declared:
              Preferred stock Series A -         (16)
          $.8437 per share
              Preferred stock Series B -         (16)
          $.8437 per share

            Change in cumulative                          374
          translation adjustment

                                      ______   ______  ______  _______  _____
          Balance at December 31,     $4,345  $13,545  ($362) (30,902) ($368)
          1994

            Net earnings                        3,462

          Dividends declared:
              Preferred stock Series A -         (28)
          $1.4062 per share
              Preferred stock Series B -         (27)
          $1.4062 per share
            Change in cumulative                          263
          translation adjustment


                                      ______  _______   _____  _______  _____
          Balance at December 31,     $4,345  $16,952   ($99) (30,902) ($368)
          1995                        ======  =======   =====  =======  =====

          The accompanying notes to consolidated financial statements are an
          integral part of these statements

          </PAGE>


                         EXOLON-ESK COMPANY AND SUBSIDIARIES

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 1995, 1994 and 1993


          1.   Summary of significant accounting policies

               a.   Principles of consolidation

               The accompanying  consolidated financial statements  include
          the  accounts  of  the Exolon-ESK  Company  and  its wholly-owned
          subsidiaries (The   Company"):   (Exolon-ESK  Company of  Canada,
          Ltd;   Norsk-Exolon    A/S;   Exolon-ESK   International    Sales
          Corporation.)     All  significant   intercompany  balances   and
          transactions have been eliminated.

               b.   Investment in Norwegian joint venture

               Norsk  Exolon  A/S,  a wholly-owned  Norwegian  nonoperating
          subsidiary, has as its only significant asset a 50% investment in
          a  Norwegian  partnership,  Orkla  Exolon  K/S,  engaged  in  the
          manufacture of silicon carbide abrasive products.  The investment
          is  stated  at cost  plus  the Company's  share  of undistributed
          earnings  and  translation adjustments  since  acquisition.   The
          earnings of  the joint venture  are reportable for  Norwegian tax
          purposes by the  partners.   Taxes attributable  to Norsk  Exolon
          A/S's share  of earnings from the joint venture are included as a
          component of income taxes (Note 9).

               c.   Inventories

               Inventories  are  stated at  the  lower of  cost  or market.
          Approximately  75% and 74% of the  dollar value of inventories is
          stated at last-in, first-out (LIFO) cost at December 31, 1995 and
          1994, with the balance being stated at average cost.

               d.   Property, plant and equipment

               Property,  plant   and   equipment  is   stated   at   cost.
          Depreciation is  computed for financial reporting  purposes using
          straight-line and  declining balance methods  over the  estimated
          useful lives of the assets as follows:

                                                  Years
                           Buildings              15-50

                           Machinery and           3-20
                           Equipment

               The cost  of assets  sold or otherwise  disposed of  and the
          related accumulated  depreciation are  removed from  the accounts
          and  any resulting gain  or loss is  reflected in the  results of
          operations.  Maintenance  and repairs are  charged to expense  as
          incurred and renewals and betterments are capitalized.

               e.   Foreign currency translation

               The Company has determined that  the United States dollar is
          the functional currency of  the Canadian subsidiary and  that the
          Norwegian  krone  is  the functional  currency  of  the Norwegian
          subsidiary and the joint venture.

               Property, plant and equipment of the Canadian subsidiary are
          translated at historical exchange rates and all  other assets and
          liabilities  are translated at  year-end exchange rates.   Income
          statements of the  Canadian subsidiary are translated  at average
          rates for the year, except  for depreciation, which is translated
          at historical rates.  Gains and losses arising as a result of the
          translation  of  the   financial  statements   of  the   Canadian
          subsidiary are reflected directly in the results of operations.

               Assets and liabilities of the Norwegian subsidiary and joint
          venture are translated at year-end exchange rates  and the income
          statements are  translated at the average exchange  rates for the
          year.   Resulting  translation  adjustments  are  recorded  as  a
          separate component of equity.

               Net gains (losses) arising as a result of  the remeasurement
          of the Canadian subsidiary's financial statements into the United
          States  dollar  and  from  other  foreign  currency  transactions
          amounted  to ($30,000), ($143,000), and ($188,000) in 1995, 1994,
          and 1993, respectively.

               f.   Income taxes

               The liability  method prescribed  in Statement  of Financial
          Accounting Standards No. 109 (SFAS 109) is used in accounting for
          income taxes.    Under  this  method,  deferred  tax  assets  and
          liabilities are determined based on differences between financial
          reporting and  tax bases  of assets  and liabilities  as measured
          using the enacted tax rates and laws that will be in  effect when
          the differences are expected to reverse.

               The Company  does not provide  U.S. Federal income  taxes on
          the  entire  balance  of the  undistributed  earnings  of foreign
          subsidiaries  as these earnings  are permanently reinvested.   In
          1995,  the Company  decided  to repatriate  up  to $3,100,000  of
          undistributed  earnings from  its Canadian  subsidiary through  a
          future  stock  redemption  and has  provided  for  all applicable
          income taxes  in the 1995  statement of operations.   At December
          31,  1995, undistributed earnings  of the Canadian  and Norwegian
          foreign subsidiaries combined were $8,657,000.

               g.   Pension and other retirement plans

               Pension  benefits  under  the  Company's  Tonawanda  defined
          benefit pension plan  for hourly employees are  based principally
          on years of  service.  Benefits under the  Tonawanda and Hennepin
          salaried  employees  defined  contribution plan  are  based  on a
          percentage  of compensation for eligible employees.  Pension cost
          and related disclosures for these  plans are determined under the
          provisions of SFAS 87 (see Note 11).

               h.   Earnings per share

               Primary  earnings  per share  of  Common Stock  and  Class A
          Common Stock are  based on the weighted average  number of shares
          of the respective classes outstanding during each year.  Earnings
          applicable  to  Common   Stock  and  Class  A  Common  Stock  are
          determined   by  using  the  earnings  entitlement  of  each  (as
          discussed  in Note  10) and  giving effect  to the  total current
          dividend requirements on the preferred stock.  On a fully-diluted
          basis, both net earnings  and shares outstanding are adjusted  to
          assume  the  conversion of  convertible  Series  A and  Series  B
          Preferred  Stock  from  the  date  of  issue.    The  effects  of
          considering  conversion  of  convertible Series  A  and  Series B
          Preferred Stock in  1993 was anti-dilutive, therefore, it  is not
          presented.

               i.   Currency forward contracts

               From time  to time, the Company enters into currency forward
          contracts in management of foreign currency transaction exposure.
          Forward  foreign currency  exchange  contracts are  purchased  to
          reduce the impact  of foreign currency fluctuations  on operating
          results.   Realized  and unrealized  gains  and losses  on  these
          contracts   are  recorded  in  net  income  currently,  with  the
          exception of  gains and losses  on contracts designated  to hedge
          specific foreign  currency  commitments which  are  deferred  and
          recognized  in  net  income  in  the  period  of  the  commitment
          transaction.  The discount or  premium of the forward contract is
          recognized over the life of the contract.   At December 31, 1995,
          the Company had open  currency forward contracts to  purchase the
          U.S. dollar equivalent of $3,861,000 of Canadian dollars,  all of
          which  mature within  12 months.    Their fair  market value,  at
          December 31, 1995 market exchange rates, was $3,903,000.

               j.   Environmental remediation and compliance

               Environmental expenditures that relate to current operations
          are  expensed or capitalized  as appropriate.   Expenditures that
          relate to an  existing condition caused  by past operations,  and
          which do not contribute to current or future  revenue generation,
          are  expensed.    Liabilities  are  recorded  when  environmental
          assessments  and/or remedial efforts  are probable, and  the cost
          can  be  reasonably estimated.   Generally,  the timing  of these
          accruals coincides with completion of a feasibility study  or the
          Company's commitment to a  formal plan of  action.   At  December
          31,  1995  and  1994,  liabilities  for  environmental  costs  of
          $780,000   and   $1,097,000  were   recorded  in   other  accrued
          liabilities.

               k.   Other

               Use of estimates:   The preparation of  financial statements
          in  conformity  with  generally  accepted  accounting  principles
          requires management to make estimates and assumptions that affect
          the amounts reported in the financial statements and accompanying
          notes.  Actual results could differ from those estimates.

               Long-Lived  Assets:  In March 1995, the Financial Accounting
          Standards Board  issued Statement  No. 121,   Accounting for  the
          Impairment of Long-Lived  Assets and for Long-Lived  Assets to be
          Disposed Of , which requires impairment losses  to be recorded on
          long-lived  assets   used  in   operations  when  indicators   of
          impairment  are present and the undiscounted cash flows estimated
          to  be  generated by  those  assets  are  less than  the  assets 
          carrying   amount.    Statement   No.  121  also   addresses  the
          accounting for long-lived assets that are expected to be disposed
          of.   The  Company will  adopt  Statement No.  121  in the  first
          quarter  of 1996  and, based  on current circumstances,  does not
          believe the effect of adoption will be material.

          2.   Business segment information

               The Company has  only one business segment,  the manufacture
          of  abrasive materials  and products for  abrasive, metallurgical
          and refractory uses.  The Company regards its  principal business
          as being in a single industry segment.

               The Company had sales to  one major customer which accounted
          for approximately 12%  and 11% of consolidated net  sales in 1994
          and 1993, respectively.   This customer's receivable  balance was
          approximately 8% and  14% of total trade receivables  at December
          31, 1994 and  1993, respectively.  No one  customer accounted for
          10% or more of net sales in 1995.

          3.   Inventories

               If  the average cost method, which would approximate current
          or replacement costs, had  been used for valuing  all inventories
          of  the Company,  inventories  would  have  been  $2,070,000  and
          $2,083,000  higher than reported  at December 31,  1995 and 1994,
          respectively.  The  Company generally records the  adjustment for
          LIFO inventory  in the  fourth quarter.   In  1995 and  1994 this
          adjustment  reduced cost of  goods sold by  approximately $12,000
          and $375,000, respectively.

               The following  are the  major classes  of inventories  as of

          December 31 (in thousands):

                                                1995        1994      1993
                                               _____       _____     _____

                Raw Materials                 $2,119      $3,051    $2,868

                Semi-Finished and             18,640      15,085    15,379
                Finished Goods

                Supplies and Other             1,011       1,051       967
                                              ______      ______    ______
                                              21,770      19,187    19,214

                Less:  LIFO Reserve          (2,070)     (2,083)   (2,457)
                                             _______     _______   _______

                                             $19,700     $17,104   $16,757
                                             =======     =======   =======


          4.   Property, Plant and Equipment


                 Property, plant and equipment consists of (in
                 thousands):
                                                   1995         1994
                                                _______      _______

                 Land                              $283         $170

                 Buildings                        8,233        8,227
                 Machinery & equipment           45,087       44,620

                 Construction in progress         2,300          421
                                                _______      _______

                                                 55,903       53,438
                 Less - accumulated              40,710       38,043
                 depreciation                   _______      _______

                                                $15,193      $15,395
                                                =======      =======

          5.   Operations

               The Company  conducts operations  through its  manufacturing
          facilities  in  the United  States  and  Canada, and  its  equity
          interest in a Norwegian joint venture.

               Transfers between  Canada and  the United  States are  based
          upon established arm's length prices for the Canadian operation.

               Operating income  represents total  revenues less  operating
          expenses before  general corporate  expenses.   General corporate
          expenses include directors and officers salaries,  and donations.
          Identifiable  assets  are those  assets of  the Company  that are
          identified  with   the  operations  in   each  geographic   area.
          Information   about  the   Company's   operations  in   different
          geographic areas is set forth below.


          (thousands of dollars)        YEAR ENDED DECEMBER 31, 1995
                                   UNITED            ELIMINA-
                                   STATES    CANADA   TIONS   CONSOLIDATED
                                   _______  _______  _______   ___________

          Sales to unaffiliated
          customers                 $62,799   $5,793         -      $68,592
          Transfers between
          geographic areas                -   11,888  (11,888)            -
                                    _______  _______ _________   __________
          Total revenue             $62,799  $17,681 ($11,888)      $68,592
                                    =======  =======  ========      =======
          Operating income, before general

            corporate expense        $5,483   $2,441         -       $7,924
                                    =======  =======  ========
          General corporate expenses                                  (391)
          Income before income taxes of
            Norwegian joint
          venture                                                       793
          Interest Expense                                          (1,469)
                                                                    _______

          Earnings before income taxes and
          cumulative effect of account                               $6,857
          change                                                    =======
          Identifiable assets       $37,714   $9,720  ($2,449)      $44,985
                                    =======  =======  ========

          Investment in Norwegian joint
          venture                                                     5,230
                                                                    _______

          Total assets at December 31,
          1995                                                      $50,215
                                                                    =======


          (thousands of dollars)         YEAR ENDED DECEMBER 31, 1994
                                      UNITED           ELIMINA-   CONSOLI-
                                      STATES   CANADA   TIONS      DATED
                                      ______   ______   ______     ______
          Sales to unaffiliated
          customers                   $55,997  $3,497    -         $59,494
          Transfers between
          geographic areas               -     11,457  (11,457)    -
                                      _______  ______   _______   _______
          Total revenue
                                       $55,997 $14,954 ($11,457)   $59,494
                                       =======  ======  ========   =======
          Operating income, before general

            corporate expense           $2,161  $1,415    -         $3,576
                                        ======  ====== =======
          General corporate expenses                                 (585)
          Income before taxes of
            Norwegian joint venture                                    431

          Interest Expense                                         (1,480)
                                                                   _______
          Earnings before income taxes                              $1,942
                                                                   =======
          Identifiable assets          $36,078  $9,952  ($4,894)   $41,136
                                       =======  ======   =======
          Investment in Norwegian joint                              4,173
          venture                                                  _______
          Total assets at December 31, 1994                        $45,309
                                                                   =======


          (thousands of dollars)         YEAR ENDED DECEMBER 31, 1993
                                      UNITED           ELIMIN-  CONSOLI-
                                      STATES  CANADA   ATIONS     DATED
                                      ______  ______   _______   _______
          Sales to unaffiliated       $55,154  $3,071     -      $58,225
          customers
          Transfers between             -      10,590  (10,590)     -
          geographic areas           _______   ______  ________  _______

          Total revenue               $55,154 $13,661 ($10,590)   $58,225
                                     ======== =======  ========   =======
          Operating income, before general
            corporate expense          $3,265    $740     -        $4,005
                                       ======  ======  =======
          General corporate expenses                                (614)
          (Loss) before income taxes of

            Norwegian joint venture                                  (32)
          Interest Expense                                        (1,441)
                                                                  ________
          Earnings before income taxes and
            cumulative effect of accounting change                 $1,918
                                                                   =======

          Identifiable assets         $37,928 $10,986  ($6,434)   $42,480
                                      ======= =======  ========
          Investment in Norwegian joint                             3,354
          venture                                                ________
          Total assets at December 31, 1993                       $45,834
                                                                  =======

          6.   Investment in Norwegian Joint Venture

               The Company's 50% share of  the results of operations of the
          Norwegian  joint venture has been determined after adjustments to
          reflect the  application  of  United  States  generally  accepted
          accounting principles relating  principally to  the recording  of
          depreciation and pension expenses and adjustments to the carrying
          values of  the ventures's  year-end inventories.   The  Company's
          share  of the  venture's  assets,  liabilities,  and  results  of
          operations  is set  forth in  the  following condensed  financial
          information (in thousands):

                                                                         
                                                            DECEMBER 31,
           Balance Sheet Data                                1995     1994
                                                           ______   ______

             Current assets                                $4,704   $4,093
             Non-current assets                             2,644    1,951

             Current liabilities                            1,458    1,243

             Non-current Liabilities                          363      375


           Statement of Operations                  1995     1994     1993
                                                 ______    ______   ______

             Net Sales                            $8,140   $6,832   $5,445
             Gross profit                          2,097    1,221      629

             Income (Loss) before income             793      431     (32)
           taxes

               The Company  does not provide  U.S. Federal income  taxes on
          the  undistributed  earnings of  the  Norwegian joint  venture as
          these earnings are permanently reinvested.  At December 31, 1995,
          undistributed earnings of the joint venture were $4,285,000. 

          7.   Notes payable

               The Company's Canadian subsidiary has a $1,000,000 (Canadian
          funds)  operating demand  loan  available  as  part of  a  credit
          facility provided  by a Canadian  bank.    The demand loan  had a
          zero  balance  as  of December  31,  1995,  1994 and  1993.   The
          approximate   average  borrowings  (Canadian  funds)  outstanding
          during  1995,  1994  and  1993  equaled  $83,000,  $204,000,  and
          $242,000,  respectively, with  the  approximate weighted  average
          interest rates of 9.9%, 6.9% and 7.0%, respectively.  The maximum
          amount of short-term debt (Canadian  funds) outstanding as of any
          month-end during 1995, 1994 and  1993 was $200,000, $425,000  and
          $650,000, respectively.

               The Canadian  agreement requires the subsidiary  to maintain
          specified financial  ratios and  minimum net  worth levels.   The
          maintenance  of financial  covenants  may  preclude the  Canadian
          subsidiary's transfer,  by dividend  or otherwise,  funds to  the
          U.S. parent company.  All borrowings under the Canadian agreement
          are  guaranteed  by the  Company  and  the  Canadian bank  has  a
          security interest in the Canadian  accounts receivable, inventory
          and machinery and equipment.  Interest on the borrowings is based
          upon the Canadian prime rate.

               At  December   31,  1994  borrowings   of  $2,000,000   were
          outstanding under the  demand line of credit portion  of a Credit
          Agreement  with  a U.S.  bank.    The  U.S. Credit  Agreement  is
          discussed further in Note 8 to follow.

          8.   Long-Term debt


             Long-term debt consists of (in
             thousands):
                                                          1995      1994
                                                        ______    ______

             Revolving credit and term loan             $7,100    $5,100
             agreement with a U.S. Bank.  Interest
             at prime rate plus  % (8.75% at
             December 31, 1995).

             Term loan agreement with a U.S. Bank.       1,800     2,600
             Interest at prime rate plus  % (9.0%
             at December 31, 1995).
             Industrial revenue bond held by an          8,000     8,000
             insurance company.  Interest is at a
             fixed rate of 8 %.  Bond maturity is       ______    ______
             January 1, 2018.

                                                       $16,900   $15,700

             Less - current maturities                   1,550       800
                                                        ______    ______
                                                       $15,350   $14,900
                                                       =======   =======

          U.S. Credit Agreement

               The Company entered into a Credit Agreement on  December 22,
          1992 with  a U.S. bank.  The proceeds  were used to refinance the
          Company's  previous Revolving Credit and Term Loan Agreement with
          a  different  U.S.  bank.   The  Credit  Agreement  provides  for
          borrowings up to $10,000,000 under  the revolving portion of  the
          agreement, a $4,000,000,  5 year, term loan and  for borrowing up
          to $2,000,000 under a demand line of credit.

               At  December  31,   1995  borrowings   of  $7,100,000   were
          outstanding  under the revolving portion of the Credit Agreement.
          The revolving  portion converts,  in whole or  any portion,  to a
          term  note on  March  31, 1996.    Any principal  balance of  the
          revolver which is  not converted is required to  be repaid by the
          conversion date.   Upon conversion,  the term loan is  payable in
          sixteen  quarterly  principal installments  as follows:   fifteen
          equal  quarterly  installments,  each  equal  to  the  lesser  of
          $250,000  or  2.5%  of  the  principal  balance  of  the revolver
          converted on  the conversion  date beginning  April  1, 1996  and
          continuing to October 1, 1999 and one final payment on January 1,
          2000  in an  amount equal  to the  remaining balance of  the term
          note.

               At  December   31,  1995   borrowings  of  $1,800,000   were
          outstanding under the  term loan portion of  borrowings under the
          Credit Agreement.  The term loan is due in twenty equal quarterly
          principal payments of $200,000 which  began April 1, 1993 and end
          January 1, 1998.

               In addition to  the revolver and term loan  under the Credit
          Agreement, the  Company has a  $2,000,000 demand line  of credit.
          At December 31, 1995 the line had a zero balance.

               Borrowings  under the three segments of the Credit Agreement
          bear interest at either a  defined base rate, contingent upon the
          bank's  prime  lending  rate,  or  a rate  based  on  the  London
          Interbank Offered  Rate (LIBOR).   The Company has the  option to
          convert the interest rate on all or a portion of the principal of
          its borrowings  from the base  rate to  the rate based  on LIBOR.
          Interest is payable monthly.

               The U.S. Credit  Agreement requires the Company  to maintain
          certain financial  covenants  and  include,  the  maintenance  of
          specified working  capital; debt  to tangible  net worth  ratios;
          minimum tangible  net worth levels; a minimum  current ratio; and
          minimum cash flow ratios.   In addition, the agreement sets forth
          limits  on capital  expenditures and  dividends.   The  agreement
          contains  certain  other   covenants  including  restriction   on
          mergers,  consolidations and  sales  of assets.   The  Company is
          precluded  from  paying  or  declaring  any  dividends  or  other
          distributions  on its Common  Stock without written  consent from
          its U.S. bank.  The Company may declare Preferred Stock dividends
          not to exceed $50,000 in the aggregate in any fiscal year.

               As collateral  for the U.S.  Credit Agreement, the  bank has
          security interest in  all U.S. accounts receivable  and inventory
          as well as  certain additional assets of the  Tonawanda, New York
          facility.

          Industrial Revenue Bonds

               The  Company is liable  for making payments  with respect to
          $8,000,000 of  Industrial Revenue Bonds issued by  the Village of
          Hennepin, Illinois  and purchased  by an  insurance company  upon
          refinancing of the bonds on January  22, 1993.  The bonds  mature
          on January 1, 2018 and  require quarterly interest payments which
          began March 1, 1993.  The bonds  bear interest, payable to a bank
          as trustee  at a fixed  rate of 8 %.   Amortization  of principal
          commences in January, 1999 until maturity in the year 2018.   The
          Bond   Agreement  requires  the  Company  to  maintain  specified
          financial  ratios including, cash flow ratios, current ratios and
          debt to tangible net worth  ratios.  Additionally, the Company is
          required to  maintain minimum  working capital  and tangible  net
          worth levels.

               The  Bond  Agreement  limits  new (non-replacement)  capital
          expenditures, with the exception of capital expenditures incurred
          in 1995  or 1996 related  to a desulfurization unit,  to $500,000
          per  year at  the Company's  Illinois facility.     The Agreement
          further  restricts the  Company  by  disallowing  any  new  liens
          incurred on the Hennepin facility with the  exception of existing
          liens as  of January  22, 1993 and  liens to  secure indebtedness
          arising under the U.S. Credit Agreement or liens arising from the
          financing of the  aforementioned new equipment at  Hennepin of up
          to $500,000 per year.

               Aggregate annual maturities of long-term debt under the U.S.
          Credit Agreement  and the term loan  with a Canadian bank  are as
          follows:    1996   -  $1,550,000;  1997  -   $1,800,000;  1998  -
          $1,200,000, ;  1999  - $1,000,000;  2000 -  $1,000,000; 2001  and
          beyond - $10,350,000.

          9.   Income taxes

               The  components of  income tax  expense are  as follows  (in
          thousands):

                                            1995      1994        1993
                                          ______    ______      ______
               Current provision
               (benefit):
                 United States

                    Federal               $1,226       $68        $848

                    State                    178        76         145
                 Foreign                     768       112          47
                                          ______    ______      ______

                    Total Current           2172       256        1040
                                          ______    ______      ______
               Deferred provision
               (benefit):
                 United States

                    Federal                  494       152       (151)

                    State                   (36)        65       (141)

                 Foreign                     263      (47)        (36)
                                          ______    ______      ______
                    Total Deferred           721       170       (328)
                                          ______    ______      ______

                              Total       $2,893      $426        $712
                                          ======    ======      ======

               As   of  December  31,  1995,   the  Company  has  available
          investment  tax credit carryforwards of approximately $24,000 for
          state purposes.

               The  actual tax  expense  differs  from the  "expected"  tax
          expense (computed by applying the U.S. Federal corporate tax rate
          of 34% in 1995, 1994 and 1993 to earnings before income taxes) as
          follows:

          (thousands of dollars)                     1995    1994   1993
                                                   ______  ______ ______

          Computed "expected" tax expense          $2,332    $660   $652

          Effect of differing tax rates applicable to foreign
            subsidiary income                       (267)   (109)      -

          Utilization of Norwegian net operating losses
          not
            previously recognized                       -   (149)      -

          Foreign subsidiary losses not benefited for

            Federal tax purposes                        -       -      9

          Recognition of investment tax credits         -   (214)      -

          Effect of permanent differences               9    (16)     25


          State and Provincial taxes, net of          465     217    192
          Federal benefit

          Non-deductible environmental                  -     442      -
          penalties

          Norwegian tax reserve                         -   (225)  (130)

          U.S. reserve for dividend                   571       -      -
          repatriation

          Other                                     (217)   (180)   (36)
                                                   ______  ______ ______

          Total income tax expense                 $2,893    $426   $712
                                                   ======  ====== ======

          Effective tax rate                        42.2%   21.9%  37.1%
                                                   ======  ====== ======

               Deferred income taxes  for 1995 and 1994  reflect the impact
          of  "temporary  differences"  between the  amount  of  assets and
          liabilities for financial reporting purposes  and such amounts as
          measured  by  tax   laws  and  regulations.     These  "temporary
          differences" are determined in accordance with SFAS 109 (see Note
          1(f)).  The  types of "temporary  differences" that give rise  to
          significant portions of deferred tax  liabilities or (assets) are
          as follows (in thousands):

                                                   1995        1994
                                                 ______      ______

              Excess tax depreciation            $2,235      $2,347
              Canadian NOL                           --        (25)

              Norwegian NOL                       (180)          --

              Canadian ITC carryforwards             --       (214)
              Inventory accounting methods        (192)       (311)

              Norwegian tax assessment               59         ---
              reserve

              Dividend repatriation reserve         571          --
              Pension and payroll accruals          52            1

              Accounts receivable and other        (22)       (122)
              asset reserves

              Post retirement accrual           (1,044)       (771)
              Other, net                           (19)         108
                                                 ______      ______

              Net deferred tax liability at       1,460       1,013
              end of year
              Less:

              Effect of Norwegian                     8           6
              translation

              Tax benefit recorded on
              cumulative effect of                (282)         ---
              accounting change
              Net deferred tax liability at       1,013         837
              beginning of year                  ______      ______

              Deferred expense for income          $721        $170
              taxes                              ======      ======

          10.  Capital Stock

               The Company  has two classes  of Common Stock.   At December
          31, 1995 there  were 600,000 shares of $1  par value Common Stock
          authorized,  of  which  512,897 shares  were  issued  and 481,995
          shares were  outstanding.   At the same  date there  were 600,000
          shares of  $1 par value  Class A  Common Stock, of  which 512,897
          shares were issued and outstanding.

               Additionally,  there were  100,000 shares  of  no par  value
          Preferred  Stock  authorized.   At December  31, 1995  there were
          19,364 shares of Series A and 19,364 shares of Series B Preferred
          Stock outstanding.

               At December 31, 1995,  the shares of  Series A and Series  B
          Preferred  Stock are entitled  to receive,  when declared  by the
          Board of Directors, cumulative annual cash dividends at the  rate
          of $1.125 per share.  The  Series A and Series B Preferred  Stock
          have  a preference  upon liquidation  of $25.00  each per  share.
          Each  share  of  Series  A   and  Series  B  Preferred  Stock  is
          convertible into 1.125 shares of  Common Stock and Class A Common
          Stock, respectively.  The shares of Common Stock, voting with the
          shares of the  Series A Preferred Stock, have the  right to elect
          one-half of the members of the Board  of Directors and the shares
          of Class A Common Stock voting with the Series B Preferred Stock,
          owned  by Wacker  Chemical (USA), Inc.  ("Wacker USA"),  have the
          right to elect the remaining one-half of the members of the Board
          of Directors.

          11.  Pension and other retirement benefits

               The  Company  sponsors   contributory  and  non-contributory
          pension   plans  in  the   United  States  and   Canada  covering
          substantially  all  hourly   and  salaried  employees  with   the
          exception of union employees at the Company's Hennepin plant, who
          are  covered by  a union-sponsored  pension plan.   The Company's
          U.S. defined contribution  plan which covers all  of its domestic
          salaried  employees and  its  Canadian defined  contribution plan
          covering substantially  all Canadian  employees, provide  for the
          Company  to make  regular  contributions  based  on  salaries  of
          eligible employees.   Payments upon retirement or  termination of
          employment are  based on  vested amounts  credited to  individual
          accounts.   Contributions to  the U.S. defined  contribution plan
          totaled $146,000 in 1995, $147,000  in 1994 and $158,000 in 1993.
          Contributions  to the  Canadian  defined contribution  plan  were
          $66,000  in 1995  and  $65,000  in 1994.    Contributions to  the
          Canadian plan were not made in 1993 due to a surplus in the plan.

               The  Company also provides a defined benefit plan for hourly
          employees  at the Tonawanda plant.   Benefits are based primarily
          on  years  of service.    Total  pension  expense for  all  plans
          amounted  to $361,000, $391,000  and $405,000  in 1995,  1994 and
          1993, respectively.

          <PAGE>

               The  following table  summarizes the  funded  status of  the
          Company's Tonawanda hourly employees defined benefit plan and the
          related  amounts recognized in the Company's consolidated balance
          sheet as of December 31, 1995 and 1994:

                                                      DECEMBER 31,
          (thousands of dollars)                      1995       1994
                                                     ______    ______

          Actuarial present value of benefit obligations:
          Accumulated benefit obligations, 
           including vested benefit obligations
           of $1,475 at December 31, 1995
           and $1,324 at December 31, 1994          ($1,475) ($1,327)
                                                     =======  =======
          Projected benefit obligations             ($1,475) ($1,327)

          Plan assets at fair value, primarily long-term
            fixed income investments                   2,036    1,494
                                                      ______   ______
          Plan assets in excess of plan                  561      167
          obligations
          Unrecognized net loss at transition, being

            amortized approximately 17 years             137      154
          Unrecognized prior service cost                162      173
          Unrecognized net (gain) arising since        (428)    (141)
          transition                                  ______   ______
          Prepaid pension expense                       $432     $353
                                                      ======   ======
          Prepaid pension asset                          295      199

          Intangible asset, net of amortization          137      154
                                                      ______   ______
          Prepaid pension expense                       $432     $353
                                                      ======   ======

          The actuarially computed pension cost for 1995, 1994 and 1993
          included the following

          components:
          (thousands of dollars)                        1995     1994  1993
                                                      ______   ______ _____
                                                                          _

          Service costs                                  $54      $59   $70
          Interest on projected benefit obligation       106      100    98

          Actual (return) on plan assets               (404)     (54) (178)
          Amortization of transition liability and       324     (18)   142
          deferrals                                    _____    _____ _____

          Net periodic pension expense                   $80      $87  $132
                                                      ======   ======  ====

               Unrecognized  gain  (losses)  and  prior  service costs  are
          amortized on a  straight-line basis  over a period  approximating
          the average remaining service period for active employees.

               An assumed discount rate of 8% has been  used in determining
          the actuarial present value of  the projected benefit obligation.
          The expected long-term rate of return on plan assets is 7%.

               Benefits under  the Canadian subsidiary's pension  plans are
          based on  employee and  employer matching  contributions for  the
          defined contribution  plan and years  of service for  the defined
          benefit plan.  The Company has applied for the termination of the
          Canadian  defined  benefit plan  with  the Pension  Commission of
          Ontario.    Upon  formal  procedural   approval  by  the  Pension
          Commission  of  Ontario,   the  defined  benefit  plan   will  be
          terminated  and  a   projection  of  the  employees   benefit  at
          retirement age will  be calculated  and subsequently rolled  over
          into the defined contribution plan.  The defined benefit plan had
          a surplus of approximately $120,000 (Canadian) as of December 31,
          1993, the date of the most recent actuarial valuation.  Assets of
          the plan at December 31, 1995 and  1994 included 26,000 shares of
          the  Common  Stock  of  Exolon-ESK  Company  valued  at  $780,000
          (Canadian) at December 31, 1995.

               In  addition  to  providing pension  benefits,  the  Company
          provides  certain  health  care and  life  insurance  benefits to
          eligible  retired  employees  and  their spouses.    Participants
          generally  become  eligible  for these  benefits  after achieving
          certain age  and years of  service requirements.   These benefits
          are  subject  to  deductibles, co-payment  provisions  and  other
          limitations.    The  Company   may  amend  or  change   the  plan
          periodically.

               Effective January 1,  1993, the Company adopted for its U.S.
          operations only,  Statement of Financial Accounting Standards No.
          106,  "Employers' Accounting  for  Postretirement Benefits  Other
          Than  Pensions,"  which  requires  that  the  estimated  cost  of
          postretirement benefits be accrued  over the period earned.   The
          Company recognized the  initial obligation as a  one-time, after-
          tax charge to earnings of $1,173,000 (net of income tax effect of
          $703,000) in the  year ended December 31,  1993.  Prior  to 1993,
          the Company recognized the costs of these benefits on the pay-as-
          you-go basis.   The  Company's current  policy is  to fund  these
          benefits on a pay-as-you-go basis.

               The amounts recognized  in the  Company's December 31,  1995
          and  1994 balance sheets for its  U.S. operations were as follows
          (in thousands):


                                                  DECEMBER 31,
                                                 1995         1994
                                                _____        _____

           Accumulated postretirement
           benefits obligation:

                Retirees                         $887         $756

                Fully eligible active             366          348
                participants
                Terminated participants not        39           73
                yet receiving benefits          _____        _____

           Total accumulated postretirement    $1,292       $1,177
           benefits obligation

           Unrecognized net (gain)              (623)        (777)
                                               ______       ______

           Accrued postretirement benefit      $1,915       $1,954
           obligation                          ======       ======

           These  obligations  are  included  in  other  long-term
           liabilities on the Company's December 31, 1995 and 1994
           balance sheets.


           Net periodic postretirement benefit costs  for 1995 and
           1994 included the following components (in thousands):

                                                 1995   1994  1993
                                               ______  _____  ____

           Service cost - benefits earned         $12    $14   $12
           during the period
           Interest cost                           92    115   145

           Amortization                          (42)    (4)     -
                                                _____  _____  ____

           Net periodic postretirement            $62   $125  $157
           benefit cost                         =====   ====  ====


               For  measuring the postretirement  benefit obligation  as of
          December 31,  1995 an 8% annual  rate of increase in  health care
          rates was assumed for the next 7 years and 6% per year thereafter
          applicable to  Blue Cross  and Medicare Reimbursements.   It  was
          also  assumed that  reimbursable expenses for  post-1990 retirees
          would be at  least equal to the  dollar reimbursement limitation.
          Increasing the  annual rate of  increase in health care  rates by
          one  percentage  point  would  increase  the   accumulated  post-
          retirement obligation by $55,000 and  would increase the periodic
          post-retirement cost by  $7,000.   Group life insurance  premiums
          and limitations on dollar reimbursements (applicable to post-1990
          retirees) are not assumed to be subject to increases.  An assumed
          discount  rate of  8% has  been used  in determine  the actuarial
          present value of the projected benefit obligation.  

               Unrecognized gains and  losses are amortized on  a straight-
          line basis  over the average  remaining service period  of active
          participants.

               The Company's  Canadian  subsidiary  also  provides  certain
          health  care  and  life insurance  benefits  to  eligible retired
          employees  and  their  spouses.   Participants  generally  become
          eligible for these benefits after achieving certain age and years
          of  service  requirements.   The  Company  adopted  SFAS No.  106
          effective  January  1,  1995  for  its  Canadian  subsidiary  and
          recognized the initial obligation as a one-time, after-tax charge
          to earnings of $502,000 (net of income tax effect of $282,000) in
          the year ended December 31, 1995.

               The  accumulated  post-retirement   benefits  obligation  at
          January   1,  1995  for  the  Canadian  subsidiary  includes  the
          following (in thousands):

                Retirees and beneficiaries               $600

                Fully eligible active participants        184
                                                        _____

                Total accumulated post-retirement        $784
                benefits obligation                     =====

               The amounts recognized in the Canadian subsidiary's December
          31, 1995 balance sheet was as follows (in thousands):


                                                   DECEMBER 31,
                                                          1995
                                                        ______

           Accumulated postretirement benefits
           obligation:

                Retirees                                  $445

                Fully eligible active                      151
                participants                            ______
           Total accumulated postretirement               $596
           benefits obligation

           Unrecognized net (gain)                       (233)
                                                        ______

           Accrued postretirement benefit                 $829            
           obligation                                   ======

           These obligations are  included in other  long-term liabilities
           on the Canadian subsidiary s December 31, 1995  balance sheet.

           Net periodic postretirement benefit costs for 1995 included the
           following components (in thousands):

                                                          1995
                                                         _____

           Service cost - benefits earned during           $13
           the period
           Interest cost                                    61

           Amortization                                      -
                                                        ______

           Net periodic postretirement benefit             $74            
           cost                                         ======

               The pro forma effect  of the change on  years prior to  1995
          was not determinable.

               For  measuring the post-retirement benefits obligation as of
          January 1, 1995, an 8% annual rate of increase in the health care
          rates  was  assumed  for  the  next  6  years  and  6%  per  year
          thereafter.  Increasing the annual rate of increase in the health
          care rates by one  percentage point in  each year would  increase
          the accumulated  post-retirement benefits  obligation by  $73,000
          (Canadian)  and  would  increase  the  periodic   post-retirement
          benefits  cost by $11,000  (Canadian).  The  group life insurance
          premiums  are not assumed to be subject  to increase.  An assumed
          discount rate of 8% was used.

               Unrecognized gains and  losses are amortized on  a straight-
          line basis  over the average  remaining service period  of active
          participants.

               The Company's current policy is to fund these benefits on  a
          pay-as-you-go basis.

          12.  Related party transactions

               The  Company  purchased   combined  totals  of   $4,320,000,
          $2,626,000  and  $4,426,000  of products  from    its affiliates,
          Elektroschmelzwerk Kempten GmbH, and its  Norwegian joint venture
          during 1995, 1994 and 1993, respectively.

               The  Company has two royalty agreements with affiliates of a
          shareholder of the Company as described in Note 13(c).

          13.  Commitments

               a.   Lease agreements

               The Company  leases  certain machinery  and equipment  under
          operating leases.  Amounts charged to expense for the years ended
          December  31, 1995,  1994  and 1993  were $370,000,  $351,000 and
          $448,000,  respectively.    Total   minimum  lease  payments,  at
          December  31,  1995,  under operating  leases  are  summarized as
          follows (in thousands):


                                           Operating
                               Year          Leases
                              _______      _________

                               1996              334

                               1997              249

                               1998              205
                                               _____
                                                $788
                                               =====

               b.   Purchase Commitments

               The  Company  has  entered  into  a  one-year  agreement  to
          purchase  abrasive  grade  bauxite.    Total  cost  remaining  at
          December 31, 1995 under the agreement is approximately $1,928,000
          and is scheduled for payment by March, 31, 1996.

               c.   Royalty Agreements

               The Company has  a royalty agreement covering  production of
          crude aluminum oxide at its Thorold, Ontario plant using  process
          technology acquired as part of the construction and completion of
          a  new  furnace  plant.   A  separate  royalty  agreement  covers
          production  of  specialty product  for  refractory markets.   The
          agreements are for  a period of 10 years each and expire July 31,
          1996 and  April 30,  2001 respectively.   The royalty  expense in
          U.S.  dollars amounted to $725,000,  $543,000 and $641,000 in the
          twelve  months ended  December 31,  1995, December  31, 1994  and
          December 31, 1993, respectively.   The expiration of the  royalty
          agreement  in  July 1996  covering  production of  crude aluminum
          oxide will reduce  operating costs by approximately  $475,000 per
          year beginning August 1, 1996.

          14.  Contingencies
               a.   Environmental Issues

                    (i)  Hennepin, Illinois Plant

               On October 6, 1994, the Company entered into a Consent Order
          (the  Consent  Order ) with the Illinois Attorney General and the
          Illinois  Environmental Protection  Agency  ( IEPA ) in  complete
          settlement of a complaint brought  by them which alleged that the
          Company  had  violated certain  air  quality requirements  in the
          operating permit for  its Hennepin, Illinois plant.   The Consent
          Order provides a schedule for the Company to install a Continuous
          Emissions  Monitoring  System  ( CEMS )   and  to  implement  the
          required  Best  Available  Control  Technology  ( BACT )  for air
          emissions,  pursuant   to  an  IEPA  approved   construction  and
          operating permit.  The Company  is in the process of  obtaining a
          construction permit to implement the BACT.

               Under the  terms of the  Consent Order the Company  has also
          agreed  to   pay  a  civil  penalty  of  $1,300,000,  payable  in
          installments of $260,000 each on November 1, 1994, April 1, 1995,
          February  1, 1996,  January 1,  1997 and  November 1, 1997.   The
          Company  recorded an   expense  of $1,300,000  in the  year ended
          December 31, 1994, which represents the civil penalty.

               In  order to  comply  with the  Consent  Order and  complete
          facility improvements, the Company expects to incur capital costs
          within the range  from $12,000,000 to $14,000,000   over the next
          two years.   As of  December 31,  1995, the Company  has incurred
          approximately $1,400,000 of capital costs related to the facility
          improvements.   The Company expects  to finance the costs  of the
          required capital  improvements  through  an  underwritten  credit
          enhanced bond  offering  possibly on  a  tax-exempt basis.    The
          Company has  obtained a  modification of  its Industrial  Revenue
          Bond Agreement  to allow  for the  required capital  expenditures
          under the Consent Order.

                    (ii)  Norwegian Joint Venture

               The Government of  Norway has held discussions  with certain
          Norwegian industries  including the abrasive  industry concerning
          the  implementation of reduced  gaseous emission standards.   The
          Company's  joint venture is participating in these discussions to
          help achieve  the Norwegian  Government's objectives  as well  as
          assuring long term economic viability for the joint venture.

               The Company s  joint venture  appointed a  project group  to
          complete a study and define a project to minimize sulfur and dust
          emissions  which was presented  to the Norwegian  State Pollution
          Control Authority ( Authority ) on March 1, 1995.   The Authority
          has prepared an internal study  of the report and the Authority s
          draft for  new concessions  was expected to  be presented  to the
          joint venture in  February 1996.   Based on a  consensus for  the
          metallurgical   industry,  the   joint   venture  has   initiated
          discussions  with the  Authority to  obtain acceptable  emissions
          levels.     The  costs  associated  with  the  implementation  of
          environmental expenditures are  uncertain as a result  of various
          alternatives  presently being  considered by the  Norwegian joint
          venture.

               b.   Legal Matters

                    (i) Federal Proceedings and Related Matters

               In February  1994, the  Company, its  former President,  its
          former  Executive Vice President  and certain other  parties were
          the subject  of an indictment  under federal antitrust  laws (the
          "Antitrust Proceedings") which alleged, among other things, that:
          (a) sometime  prior to the  mid-1980's and continuing  into 1992,
          the  defendants  and  unnamed co-conspirators  entered  into  and
          engaged  in a  combination and  conspiracy to  fix the  prices of
          artificial abrasive grain  in restraint of interstate  trade; (b)
          during the  same  period, the  Company and  its former  President
          willfully  violated the  terms of  a  permanent injunction  dated
          November  16, 1948  on  the  Company  and  its  officers  against
          entering  into  conspiracies  or combinations  to  fix  prices of
          artificial  abrasive  grain;  and that  c)  the  Company's former
          Executive Vice  President  destroyed  documents  and  made  false
          declarations in  response to a  grand jury subpoena issued  in an
          investigation of  price fixing for artificial abrasive grain.

               On  December 8,  1994, in  an ex  parte proceeding  the U.S.
          Defense  Logistics  Agency  (the "DLA")  issued  a  Memorandum of
          Decision  that  temporarily  suspended   the  defendants  in  the
          Antitrust Proceedings from  contracting with the  U.S. Government
          under  procurement  or   non-procurement  programs  pending   the
          completion of  the Antitrust Proceedings.   On January  31, 1995,
          the DLA amended the Memorandum  of Decision (as amended, the "DLA
          Suspension")  to include under the DLA Suspension sixteen alleged
          affiliates of the defendants including the Company's  subsidiary,
          Exolon-ESK  Company of Canada  Ltd., and  Orkla-Exolon   K/S, the
          Norwegian  partnership in  which the Company's  subsidiary, Norsk
          Exolon A/S, has  a 50% partnership interest.   The DLA Suspension
          alleges as causes  for the suspension (I) the  indictments of the
          parties  in the  Antitrust  Proceedings,  and  (ii)  on  separate
          occasions in  October and November  of 1994 the  Company s former
          President and  former Executive Vice  President individually made
          alleged false certifications  in DLA sales contracts  denying the
          existence within the  past three years of any  indictments of the
          kind involved in the pending Antitrust Proceedings.  A jury trial
          on a  separate criminal  complaint  against the  Company and  the
          former  Executive Vice  President  based  on  the  alleged  false
          certifications in DLA  sales contracts found the  Company and the
          former Executive Vice President not guilty of all charges.

               In  general, the DLA Suspension provides, during the term of
          the suspension,  that the  suspended parties  will be  prohibited
          from entering  into new contracts,  or renewing or  extending old
          contracts  with the U.S.  government or its  agencies, unless the
          head of the  contracting agency states in writing that there is a
          compelling reason  to do so;  that the suspended parties  may not
          conduct  business  with  the  U.S.  Government  as  an  agent  or
          representative  of  other contractors;  that  no U.S.  Government
          contractor may award a suspended party a subcontract in excess of
          $25,000  unless there  is  compelling  reason to  do  so and  the
          contracting party complies with  certain notification provisions;
          and, that each suspended party's relationship to any organization
          doing business with the government will be  examined to determine
          the  impact of  those ties  on  the responsibility  of the  other
          organization to be a government contractor or subcontractor.

               At this time, the Company is  not able to predict the amount
          and nature of  criminal penalties or fines that  might be imposed
          against  the Company or its former  President or former Executive
          Vice  President, if  any of  them  were convicted  of any  of the
          charges   alleged  in  the  Antitrust  Proceedings,  but  if  the
          Antitrust Proceedings  were resolved in  a manner adverse  to the
          Company, such penalties or fines  could be substantial and  could
          materially  adversely affect the  Company.  The  Company believes
          there are  meritorious defenses  to the  alleged violations  and,
          accordingly, the Company believes that the DLA Suspension against
          it will be lifted at the conclusion of the Antitrust Proceedings.
          The  Company intends to  vigorously defend against  the Antitrust
          Proceedings and  to seek  to have the  DLA Suspension  against it
          lifted as soon as possible.

               The DLA Suspension, for so long as it remains in force, will
          prevent  the Company from  purchasing crude abrasive  grains from
          U.S.  Government stockpiles,  but is  not  otherwise expected  to
          impact the Company's operations as the Company does not otherwise
          deal with the U.S.  Government as a contractor  or subcontractor.
          As long as there  is an adequate supply of  crude abrasive grains
          and the U.S. Government does not sell from its stockpiles of such
          grains at below market prices, the DLA Suspension is not expected
          to have  a material adverse  effect on the  Company's operations.
          Presently, and for at least the next one year period, the Company
          expects crude abrasive grains to be in adequate supply.  However,
          the  Company is  unable to  predict under what  circumstances the
          U.S. Government might choose to  sell from its stockpiles, and if
          it were to  undertake an aggressive  program of selling  abrasive
          grains  at below market  prices the Company could  be placed at a
          disadvantage in relation to its competitors. 

               On October 18,  1994, a law suit  was commenced in  the U.S.
          District court for the Eastern District of  Pennsylvania (No. 94-
          CV-6332)  under   the  title  "General  Refractories  Company  v.
          Washington Mills  Electro  Minerals  Corporation  and  Exolon-ESK
          Company."  The suit purports to be a class action seeking  treble
          damages from the defendants for allegedly conspiring with unnamed
          co-conspirators  during the period  from January 1,  1985 through
          the date of  the complaint to fix, raise,  maintain and stabilize
          the price  of artificial  abrasive grains  and to allocate  among
          themselves their  major customers  or accounts  for purchases  of
          artificial grains, in violation of  Section 1 of the Sherman Act,
          15 U.S.C.   1.  The  plaintiffs allegedly paid more for  abrasive
          grain products than  they would have paid in the  absence of such
          anti-trust violations  and were  allegedly damaged  in an  amount
          that they are presently unable to determine. On or about July 17,
          1995, a law suit captioned  Arden Architectural Specialties, Inc.
          v. Washington Mills Electro  Minerals Corporation and  Exolon-ESK
          Company,   (95-CV-05745(m)), was commenced  in the  United States
          District Court for  the Western District of New York.   The Arden
          Architectural Specialties complaint purports to be a class action
          that  is  based  on  the  same matters  alleged  in  the  General
          Refractories  complaint.    The  Company  believes  that  it  has
          meritorious  defenses to  the  allegations,  and  it  intends  to
          vigorously defend against the charges.

                In addition to  the potential liabilities that  the Company
          may experience in the legal proceedings brought by the Department
          of  Justice and  third parties,  the Company  may  incur material
          expenses in defending against the  actions, and it may incur such
          expenses even if it is found to have no liability for any  of the
          charges asserted against it.

                    (ii)  Exolon-ESK Company of Canada, LTD.

               In  June 1993,  the  Company commenced  a legal  action (the
           Perrotto  Case )  in Ontario,  Canada  Court  (General Division)
          against  one of its former  officers and certain former employees
          of  Exolon-ESK Company of Canada, LTD. (Exolon-Canada) on various
          charges  related to allegations  that they defrauded  the Company
          and  Exolon-Canada  of  money, property  and  services  over many
          years.   The  Company is  seeking $2,000,000 in  damages together
          with such  other damages  that may be  determined.   A reasonable
          estimation of the Company's potential recovery, if any, cannot be
          made at this time.  

               On  February 29, 1996, the Company and Exolon-Canada entered
          into  a  Final  Release  (the   Release )  with  their  insurance
          carriers whereby  they agreed  to release  the carriers  from all
          claims based on the activities  of the defendants in the Perrotto
          Case  in  consideration   of  a  payment  of   $535,000  Canadian
          (approximately $390,000 U.S.).   Under the terms of the  Release,
          the insurance carriers denied any  liability, and the payment may
          not  be indicative  of the  amount of  any recovery  that may  be
          obtained from the defendants.

          15.  Quarterly Financial Data (unaudited)

               Summarized quarterly financial data for 1995 and  1994 is as
          follows:

                                                      QUARTER

           (thousands of dollars          FIRST   SECOND    THIRD   FOURTH
           except per share amounts)     ______  _______  _______  _______

           Year Ended December 31,
           1995

           Net Sales                    $17,177  $17,131  $17,094  $17,190
           Gross Profit Before            3,788    3,922    4,052    3,628
           Depreciation

           Earnings Before Cumulative
           Effect of Accounting Change      938    1,014    1,175      837

           Cumulative Effect of           (762)        -        -      260
           Accounting Change             ______   ______   ______   ______

           Net Income                      $176   $1,014   $1,175   $1,097
                                         ======   ======   ======   ======

           Primary Earnings Per Common
           Share Before Cumulative        $0.96    $1.04    $1.21    $0.86
           Effect of Accounting Change

           Cumulative Effect of          (0.79)        -        -     0.27
           Accounting Change             ______   ______   ______   ______

           Primary Earnings Per Common    $0.17    $1.04    $1.21   $1.13 
           Share
           Primary Earnings Per Class
           A Common Share Before          $0.90    $0.98    $1.14    $0.80
           Cumulative Effect of
           Accounting Change

           Cumulative Effect of         ($0.74)        -        -    $0.25
           Accounting Change             ______   ______   ______   ______

           Primary Earnings  Per Class    $0.16    $0.98    $1.14    $1.05
           A Common Share                ======   ======   ======   ======


           Year Ended December 31,
           1994
           Net Sales                    $14,155  $15,252  $15,185  $14,902

           Gross Profit Before            2,644    3,159    3,435    3,625
           Depreciation

           Net Income (Loss)                121       75    (171)    1,491
                                         ======   ======   ======   ======

           Primary Earnings (Loss) Per    $0.11    $0.07  ($0.17)    $1.52
           Common Share
           Primary Earnings (Loss) Per
           Class A Common Share           $0.11    $0.06  ($0.16)    $1.43
                                         ======   ======   ======   ======

          Item 9.   Changes  in  and  Disagreements   with  Accountants  on
          Accounting and Financial Disclosure

               Reference  is made to the form  8-K s dated October 12, 1994
          and October  24, 1994  which are  hereby  incorporated herein  by
          reference.


          <PAGE>
                                       PART III


          Item 10.  Directors and Executive Officers of the Registrant

               See the information  relating to  directors and officers  of
          the  Company  under  the captions  "The  Election  of Directors",
          contained in the Company's definitive Proxy Statement relating to
          the Annual Meeting of Shareholders to be  held on April 24, 1996,
          which is hereby incorporated by reference.

          Item 11.  Executive Compensation

               See the information relating  to "Compensation of  Executive
          Officers"  presented in the  Company's definitive Proxy Statement
          relating  to the  Annual Meeting  of Shareholders  to be  held on
          April 24, 1996, which is incorporated herein by reference, except
          that  information appearing  under the  headings  "Report of  the
          Executive Committee on Executive Compensation" and "Summary Share
          Performance Graph" is  not incorporated herein and should  not be
          deemed to be included in this document for any purpose.

          Item 12.  Security  Ownership of  Certain  Beneficial Owners  and
                    Management

               See  the information relating  to directors and  officers of
          the Company  under the  captions "Security  Ownership of  Certain
          Beneficial  Owners and  Management", contained  in  the Company's
          definitive  Proxy Statement  relating to  the  Annual Meeting  of
          Shareholders  to be  held  on  April 24,  1996,  which is  hereby
          incorporated by reference.

          Item 13.  Certain Relationships and Related Transactions

               See  the information relating  to directors and  officers of
          the Company under the captions "Certain Relationships and Related
          Transactions",  contained  in  the  Company's  definitive   Proxy
          Statement  relating to the  Annual Meeting of  Shareholders to be
          held  on  April   24,  1996,  which  is  hereby  incorporated  by
          reference.

          <PAGE>

                                          PART IV
                    Item 14.  Exhibits, Financial Statement Schedules
                              and Reports on Form 8-K

               (a)  The following documents are filed as part of this
                    report
                                                              Page In
                                                             Form 10-K

                1)  Report of Independent Accountants: 

                    Financial Statements:
                    Consolidated Statements of
                    Operations, three years ended               18
                    December 31, 1995
                    Consolidated Balance Sheets at              19
                    December 31, 1995 and 1994
                    Consolidated Statements of Cash
                    Flows, three years ended December 31,       20
                    1995
                    Consolidated Statements of Changes in
                    Stockholders' Equity, three years          21-22
                    ended December 31, 1995

                    Notes to Consolidated Financial            23-43
                    Statements
                2)  Financial Statement Schedule for
                    three years ended December 31, 1995:

               II.  Valuation and qualifying accounts           48


                    All other required schedules have
                    been omitted because they do not
                    apply to the Company.


          <PAGE>
           Item 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
                     ON FORM 8-K (Continued)

           (a) (3) Exhibits
           Exhibit 
             No.             Description                  Reference

           3A       Restated Certificate of       Exhibit 3A.
                    Incorporation

           3A(1)    Certificate of Merger         Exhibit 3A(1).
           3E       Amendment to By-Laws dated    Exhibit 3E to the Report
                    March 23, 1991                on Form 10-Q dated March
                                                  31, 1991*

           3F       Certificate of Amendment of   Exhibit 3F to the Report
                    Restated Certificate of       on Form 10-K for the
                    Incorporation dated April     year ended December 31,
                    23, 1986                      1994*
           3G       Certificate of Amendment of   Exhibit 3G to the Report
                    Restated Certificate of       on Form 10-K for the
                    Incorporation dated May 4,    year ended December 31,
                    1987                          1994*

           3H       By-Laws                       Exhibit 3H to the Report
                                                  on Form 10-K for the
                                                  year ended December 31,
                                                  1994*

           4        Instruments Defining Rights   Articles of
                    of Security Holders           Incorporation, Exhibits
                                                  3A, and Exhibits  3F and
                                                  3G to the Report on Form
                                                  10-K for the year ended
                                                  December 31, 1994*
           10D(23)  Revolving Credit Agreement    Exhibit 10D(23) to the
                    dated December 22, 1992       Report on Form 10-K for
                                                  the year ended December
                                                  31, 1992*

           10D(24)  Industrial Revenue Bond       Exhibit 10D(24) to the
                    Agreement dated January 1,    Report on Form 10-K for
                    1993.                         the year ended December
                                                  31, 1992*
           10F      Stockholder's Agreement       Exhibit 10F.
                    dated as of April 26, 1984
                    between the Registrant and
                    Wacker Chemical Corporation

           10G      Restated License Agreement    Exhibit 10G.
                    dated as of April 26, 1984
                    among Elektroschmelzwerk
                    Kempten GmbH, ESK
                    Corporation and the
                    Registrant

           10H      Distributorship Agreement     Exhibit 10H. 
                    dated April 27, 1984 between
                    Elektroschmelzwerk Kempten
                    GmbH, and the Registrant
           10I      Indemnification Agreement     Exhibit 10I.
                    dated as of December 15,
                    1984 between Wacker Chemical
                    Corporation and the
                    Registrant 

           10K      Contract between Theeb, Ltd.  Exhibit  10K to the
                    and The Exolon-ESK Company    Report on Form 10-K for
                    of Canada, Ltd. dated         the year ended December
                    February 28, 1985             31, 1992*
           10M      Federal Indictments dated     Exhibit 10M to the
                    February 11, 1994             Report on Form 10-K for
                                                  the year ended December
                                                  31, 1993*

           11       Statement of computation of   Exhibit 11
                    per share earnings 

           21       Amendment of Certificate of   Exhibit 21 to the Report
                    Incorporation dated October   of Form 10-Q for the
                    28, 1992                      quarter ended September
                                                  30, 1992.

           22       Subsidiaries of the           Exhibit 22
                    registrant 
           27       Financial Data Schedule       Exhibit 27

           (b)      Reports on Form 8-K:

                    None.

           (c)      All exhibits required by Item 601 of Regulation S-K
                    are included in Item 14(a)(3).

           (d)      Separate Financial Statements of Subsidiary Not
                    Consolidated and 50% Owned

                    See the accompanying index to Orkla Exolon K/S
                    financial statements and financial statement schedules
                    on pages 49-64.


          <PAGE>

          Schedule II



                          EXOLON-ESK COMPANY AND SUBSIDIARIES
                           VALUATION AND QUALIFYING ACCOUNTS
                          THREE YEARS ENDED DECEMBER 31, 1995
                                (thousands of dollars)

                                              ADDITIONS      NET
                                    BALANCE    CHARGED    ACCOUNTS
                                      AT       TO COSTS  RECEIVABLE  BALANCE
                                   BEGINNING     AND       CHARGED    AT END
                DESCRIPTION         OF YEAR    EXPENSES      OFF     OF YEAR
            ___________________    ________    ________   _________  _______

           Deducted from assets -
                Allowance for
                doubtful accounts

           Year ended December       $309        $110        --        $419
           31, 1995
           Year ended December       $307        $20        ($18)      $309
           31, 1994

           Year ended December       $293        $20        ($6)       $307
           31, 1993


          </PAGE>


                          Orkla Exolon KS, Orkanger - Norway
                            Index to Financial Statements


                                                                  Page

          Report of independent auditor                              2

          Balance sheets at December 31, 1995 and 1994           3 - 4

          Statements of income and retained earnings for the three
          years ended December 31, 1995, 1994 and 1993               5

          Statements of cash flows for the three
          years ended December 31, 1995, 1994 and 1993           6 - 7

          Notes to the financial statements                     8 - 13

          Financial schedules for the three years ended
          December 31, 1995, 1994 and 1993:


             II   Valuation and qualifying accounts and reserves    14

          All other schedules are omitted as the required information is
          inapplicable or the information is presented in the financial
          statements or related notes.

          To The Partners of

          Orkla Exolon KS

                                             Trondheim, February 9, 1996


          Report of Independent Public Accountant.

          We have audited the accompanying balance sheets of Orkla Exolon
          KS as of December 31, 1995 and 1994, and the related statements
          of income and cash flows for each of the three years in the
          period ended December 31, 1995.  These financial statements and
          related schedules referred to below are the responsibility of the
          Company's management.  Our responsibility is to express an
          opinion on these financial statements based on our audits.

          We conducted our audit in accordance with generally accepted
          auditing standards.  Those standards require that we plan and
          perform the audit to obtain reasonable assurance about whether
          the financial statements are free of material misstatement.  An
          audit includes examining, on a test basis, evidence supporting
          the amounts and disclosures in the financial statements.  An
          audit also includes assessing the accounting principles used and
          significant estimates made by management, as well as evaluating
          the overall financial statement presentation.  We believe that
          our audits provide a reasonable basis for our opinion.

          In our opinion, the financial statements referred to above
          present fairly, in all material respects, the financial position
          of Orkla Exolon KS as of December 31, 1995 and 1994, and the
          results of its operations and cash flows for the three years in
          the period ended December 31, 1995 in conformity with generally
          accepted accounting principles. 

          Our audits were made for the purpose of forming an opinion on the
          basic financial statements taken as a whole.  The schedules
          listed in the index to financial statements are presented for
          purposes of complying with the Securities and Exchange
          Commission' s rules and are not part of the basic financial
          statements.  These schedules have been subjected to the auditing
          procedures applied in the audits of the basic financial
          statements and, in our opinion, fairly state in all material
          respects the financial data required to be set forth therein in
          relation to the basic financial statements taken as a whole, .

          ERNST & YOUNG - TRONDHEIM AS

          Hans J Jonassen
          State Authorized Public Accountant, (Norway)


          <PAGE>

           BALANCE SHEET AT DECEMBER 31st

            Assets                                  NOK 1995      NOK 1994



           Current Assets

           Cash                                   14,461,939     9,386,111
           Trade receivables, less allowance
           for doubtful accounts of NOK 380 000   16,499,168    17,120,092


           Other accounts receivable and
           prepayments                             2,776,714     2,665,939

           Receivable from related parties         5,570,011     5,214,232
           (Note 4)

           Inventories  (Note 3)                  20,194,000    20,960,000
                                                  __________    __________


           Total current assets                   59,501,832    55,346,374



           Long-Term Receivables and Other         7,025,136     6,466,136
           Assets (Note 5)

           Property, Plant and Equipment

           At cost
           Land                                      507,930       507,930

           Buildings                              18,127,175    17,988,414

           Machinery, equipment and
           installations                          43,779,235    35,526,285
                                                  __________    __________

                                                  62,414,340    54,022,629

           Accumulated depreciation              (35,989,31)  (34,109,640)
                                                 ___________  ____________

           Net property, plant and equipment      26,425,030    19,912,989
                                                  __________    __________

           Total assets                           92,951,998    81,725,499


           The accompanying notes are an integral part of these financial
           statements.

          <PAGE>

           BALANCE SHEET AT DECEMBER 31st



           Liabilities and Partners' Interest         NOK 1995    NOK 1994


           Current Liabilities

           Bank indebtedness  (Note 6)               3,000,000   3,000,000

           Accounts payable and accruded
           expenses                                 14,960,958  13,329,427
           Portion of long-term debt repayable
           within one year  (Note 7)                   483,334     483,334
                                                    __________  __________

           Total current liabilities                18,444,292  16,812,761

           Long-Term Debt

           Mortgage loans  (Note 7)                  5,074,999   5,558,333

           Portion repayable within one year         (483,334)   (483,334)
           (Note 7)                                 __________  __________

           Total long-term debt                      4,591,665   5,074,999

           Partners' Interest

           Paid-in capital  (Note 8)                11,349,100  11,349,100

           Retained earnings                        58,566,941  48,488,639
                                                    __________  __________

           Total partners' interest                 69,916,041  59,837,739
                                                    __________  __________

           Total liabilities and partners'          92,951,998  81,725,499
           interest

           Commitments and Contingent Liabilities   (Note 9)


           The accompanying notes are an integral part of these financial
           statements.

          <PAGE>

           STATEMENT OF INCOME AND RETAINED EARNINGS

           FOR THE YEARS ENDED DECEMBER 31st


           Income from Operations      NOK 1995     NOK 1994    NOK 1993



           Sales                      103,426,909  96,220,973   77,449,041

           Cost of sales exclusive  
           of depreciations shown  
           below                       78,782,750  79,020,248   68,495,781

           Gross income                24,644,159  17,200,725    8,953,260

           Depreciation                 2,129,670   1,597,094    1,423,216
           Selling, general and                              
           administrative expenses     12,742,064   9,129,804   10,402,262

           Bad debts, net               (107,430)      94,260    (867,869)
                                       __________  __________   __________

           Income/loss from                                  
           operations                   9,879,855   6,379,567  (2,004,349)

           Other Income/Expense

           Interest on mortgage                              
           loans and bank overdraft     (394,659)   (631,827)    (620,949)

           Interest income                489,941     156,774       53,744

           Foreign exchange
           gain/loss                      103,165   (245,073)      884,133

           Gain on investments                  0           0            0
                                       __________  __________   __________

           Income/loss from other                            
           activities                     198,447   (720,126)      316,928

           Income/loss for the yr.     10,078,302   5,659,441  (1,687,421)

           Retained earnings at      
           January 1st                 48,488,639  42,829,198   44,516,619
                                       __________  __________   __________

           Retained earnings at      
           December 31st               58,566,941  48,488,639   42,829,198

           The accompanying notes are an integral part of these financial
           statements.

          <PAGE>

           STATEMENT OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31st

           Cash Flows from 
           Operating Activities          NOK 1995   NOK 1994    NOK 1993

           Net income                  10,078,302  5,659,441   (1,687,421)

           Adjustments to reconcile net income to net

           cash provided by operating activities:

           Depreciations                2,129,670  1,597,094    1,423,216

           Gain/Loss sale property,     (250,000)  (452,521)       28,500
           plant & equipment
           Gain/Loss on other                 0          0            0
           investments

           Change in assets and liabilities:

           Increase/Decrease             154,370  1,302,797   (6,449,710)
           inreceivables and
           prepayments

           Increase/Decrease in          766,000    892,000    3,021,000
           inventories

           Increase/Decrease in         (559,000)  (585,129)    (659,084)
           pension benefit
           plan/prepaid pension
           premiums

           Increase/Decrease in        1,631,531   1,557,980      105,008
           accounts payable and        _________   _________    _________
           accrued expenses



                                       3,872,571   4,312,221   (2,531,070)
                                      __________   _________   __________

           Cash flow from operating   13,950,873   9,971,662   (4,218,491)
           activities

          <PAGE>


           STATEMENT OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31st


           Cash Flow from
           Investment Activities      NOK 1995     NOK 1994     NOK 1993

           Capital expenditures      (8,641,711)  (2,575,169)    (392,000)

           Sales of bonds                      0            0            0
           Sale of property, plant       250,000      715,000       84,000
           and equipment              __________   __________   __________

           Cash flow from            (8,391,711)  (1,860,169)    (308,000)
           investment activities

           Cash Flow from Financial Activities

           Increase in bank                    0    2,282,000    3,518,000
           indebtedness

           Repayment of long-term      (483,334)  (2,230,762)    (435,722)
           debt                       __________   __________   __________
           Cash from financial         (483,334)       51,238    3,082,278
           activities                 __________   __________   __________
           Net increase/decrease       5,075,828    8,162,731  (1,444,213)
           in cash and cash
           equivalents

           Cash and cash               9,386,111    1,223,380    2,667,593
           equivalents at the         __________   __________   __________
           beginning of year

           Cash and cash              14,461,939    9,386,111    1,223,380
           equivalents at the end
           of year

           Supplemental disclosure of cash flow information

           Cash paid during the          403,178      584,058      640,468
           year for interest:

           The accompanying notes are an integral part of these financial
           statements.

          <PAGE>

                                   Orkla Exolon KS

          NOTES TO THE FINANCIAL STATEMENTS  (All amounts expressed in NOK)


          1)   Operations

               The company is organized as a limited partnership under
               Norwegian law.  The main business activity is the
               manufacture and processing in Norway of Silicon Carbide, an
               abrasive product. 

          2)   Summary of Significant Accounting Policies

          a.   Taxes

               No provisions for taxes are made in the financial statements
               of the company because, as a limited partnership, it is not
               subject to income tax, the tax effect of its activities
               accruing to the partners.

          b.   Inventories

               Finished goods and work in progress are stated at the lower
               of average production cost and market.  Cost comprises raw
               materials, power, direct labour and manufacturing overhead.  
               Raw materials and supplies are stated at the lower of
               average purchase cost and market.  Cost comprises materials,
               freight and handling.

          c.   Property, plant and equipment and related depreciation

               Property, plant and equipment are stated at cost. 
               Depreciation has been recorded on the basis of cost using
               the straight line method at the following rates which are
               estimated to depreciate the assets over their useful lives 
               in the business:

                    Land                        0%
                    Buildings                   2%
                    Machinery and installations 6%
                    Equipment and vehicles     10%

               Maintenance and repairs are expensed as incurred, major
               renewals and betterments are capitalized.

               Transactions denominated in foreign currencies are
               translated into Norwegian kroner at the approximate exchange
               rates ruling at the date of the individual transaction. 
               Foreign currency denominated assets and liabilities are
               translated into Norwegian kroner at the approximate exchange
               rates ruling at the year end.

          e.   Pension

               The company has an insured pension plan which provides
               pension for eligible employees on retirement at the age of
               67 years or earlier in the event of disability, and for
               widows, widowers and dependent children of deceased
               employees covered by the plan.  The basis for the pension on
               retirement is the final salary at that date.  Number  of
               service years required to obtain full pension is 30 years. 
               The pension benefits are secured by collective insurance
               policy.  The company's insured pension is coordinated with
               the obligatory state pension scheme and is a benefit plan
               per. FASB 87.

          f.   Use of estimates

               The preparation of financial statements in conformity with
               generally accepted accounting principles requires management
               to make estimates and assumptions that affect the amounts
               reported in the financial statements and accompanying notes. 
               Actual results could differ from those estimates.

          3)   Inventories


           Inventories consist of:                  1995        1994
                                                ________    ________

           Finished Goods                      7,385,000   7,895,000
           Work in progress                    8,937,000   8,469,000
           Raw materials                       2,836,000   2,800,000
           Supplies (net)*)                    1,036,000   1,796,000
                                              __________  __________

                                              20,194,000  20,960,000

           *)  Supplies are included net of an obsolescence provision
           of NOK 1 282 000.


          4)   Related Party Transactions

           Amounts receivable from/payable to related parties consist of:



                Receivable from:                     1995          1994
                                                    ______        ______


                The Exolon - ESK Company,           963,436       522,343
                New York, USA

                Orkla Exolon AS                   4,606,575     4,691,889

                Norsk Exolon AS                           0             0
                                                  _________     _________

                  Total receivable from           5,570,011     5,214,232
                related parties

                Payable to:

                Orkla AS                            106,440        76,600

                Sales:                      1995       1994          1993
                                         _______    _______       _______

                Exolon ESK Comp        5,255,893  5,567,746     4,641,462

                ESK Germany                    0    679,386             0


           The Exolon - ESK Company, New York, USA is the ultimate
           holding company of Norsk Exolon AS.

               Purchases
           

           Purchases of goods and services from related parties during
           the year were as follows:

                                                  1995     1994     1993
                                                 _____    _____    _____

                Orkla AS                       341,607  337,633  302,845

                Borregaard                     297,422        0        0

                The Exolon - ESK Company,
                New York, USA                        0        0   77,750
                Elektrosmeltzwerk, Kempten,
                Germany                        371,500  215,100  334,900
                                               _______  _______  _______

                  Total purchases from
                related parties              1,010,529  552,733  715,495

          5)   Pensions

               For the calculation for Orkla Exolon KS is used main
               assumptions of 5% interest, 7% rate of return and 2% salary
               increases.  The company's funding exeed their obligations
               and net value of funding and obligations is classified as
               long term receivables.  Total assets of the pension plan at
               December 31, 1995 were NOK 26 286 000.

               Prior years the company has booked pension premium fund
               only.  Pension premium fund is used for advance payments for
               insured collective pensions plan to obtain deductions for
               tax purposes.  Some changes to the fund, such as bonuses,
               was booked upon as revaluation and amortized over 12 years. 
               This amortization plan is continued and will cause yearly
               credit of NOK 209 000.


          <PAGE>

               This years movements in caption for long term receivables
               and other assets can be summarized as follows:

                                                                      1995
                                                                 _________

           Net value of benefit plan as of 1.1.95                7,224,279

           Difference between actuarial calculation and 
           pension premium fund as of 1.1.95                             0

           Rest revaluation pension premium fund as of 1.1.95    (758,143)

           Prepaid pension premium  as of 1.1.95                         0

           Booked pension premium fund as of 12.31.94            6,466,136

           Net pension premium 1995                                350,000

           Revaluation pension premium fund 1995                   209,000
                                                                  ________

           Booked value of benefit plan as of 12.31.95           7,025,136

           Rest revaluation pension premium fund as of             299,269
           12.31.95                                               ________

           Net value of benefit plan as of 12.31.95              7,324,405

          6)   Bank Indebtedness

               The company has an overdraft facility of NOK 3 000 000.  The
          company pays a commission on the total facility of 1%.  Interest
          on the amount utilised is the banks prime rate + 0.5%.  In
          addition, the bank is comitted to lend the company up to NOK 3
          000 000 in equivalent DEM  amount until September 31, 1996.  The
          interest rate is LIBOR + 1.5%.  These loan-facilities are secured
          on properties, plant and equipment, raw materials, work in
          progress and finished goods.  Unused line of credit at December
          31, 1995 was NOK 3 000 000 and NOK 3 000 000 at December 31,
          1994.

          <PAGE>

          7)   Long-Term Debt

      Long-term debt consist of:


                                 INTEREST
      LENDER         SECURITY      RATE      1995       1994       1993
      __________     _________   ________   _______    _______    _______

      Den Norske    First          12.70%          0          0          0
      Industribank  mortgage
                    Second         12.70%          0          0    175,000
                    mortgage
                    (Buildings,
                    machinery &
                    equipment)


      Den Norske    Third           8.00%          0          0    123,526
      Industribank  mortgage
                    (Buildings,
                    machinery &
                    equipment)

      Den Norske    Fourth          9.70%          0          0    461,540
      Industribank  mortgage

      Den Norske    Fifth           8.00%          0          0    861,529
      Industribank  mortgage
                    (Buildings,
                    machinery &
                    equipment)

      Den Norske    Sixth          12.00%          0          0    367,500
      Industribank  mortgage                                       _______
                    (Buildings,
                    machinery &
                    equipment)

      SND           First           6.80%   5,075,000    5,558,333             
                    mortgage                _________    _________
                    (Buildings,
                    machinery &
                    equipment)

      
      Mortgage loans as of December 31st     5,075,000     558,333  1,989,095

          
          
          
<PAGE>          

        REPAYMENT TERMS

                          1996             483,333
                          1997             483,333
                          1998             483,333
                          1999             483,333
                          2000 onwards   3,141,668
                                        __________
                                         5,075,000
          
          
          8)        Paid-in Capital
          
                 THE PAID-IN CAPITAL IS AS FOLLOWS:

                                           SHARE IN
                                          PARTNERSHIP         NOK

         Norsk Exolon AS, Orkanger           42.3285%     4,803,900
         Orkla AS, Oslo                      42.3285%     4,803,900
         Orkla Exolon AS, Orkanger           15.3430%     1,741,300
                                             ________     _________

                                            100.0000%    11,349,100

          9)   Commitments and Contingent Liabilities

               Environmental standards

               The company is still involved in discussions with the
          Norwegian State Pollution Control Authority (SFT) regarding
          environmental issues.  These issues are mainly related to dust
          and SO2-emission.

               Following open issues exists:

               Authorities have not yet specified which environmental
          requirements the company has to follow.

               These are uncertainties connected to which technological
          methods to use to meet environmental requirements.

               There exist uncertainty regarding the financial consequences
          connected to environmental requirements.

               The Authorities (SFT) has announced that the existing
          permission for emission is withdrawn from January 1, 1996.  The
          company has presented plans to SFT for how to solve environmental
          issues.  These plans will form basis for the Authorities
          evaluation of further permission for future emission.

               SFT's draft for a new concession will be presented in
          February 1996.

          10)  Unrecorded Adjustments

               The adjustments shown below have been made to present the
          accompanying financial statements in accordance with US generally
          accepted accounting principles and Exolon ESK company accounting
          principles:

                                               Increase(+)/decreace(-) in:

                                                  STATEMENT       RETAINED
                                                  OF INCOME       EARNINGS


                 1995 *)                             16,579      9,670,117

                 1994 *)                           (56,955)      9,653,538

                 1993 (Change in N GAAP re.       (261,450)
                 Acc. principles
                   for pensions)

                 1993                               766,758      9,971,943
                 1992 **)                       (9,667,305)      9,205,185

                 1991 ***)                     (13,401,790)     18,872,490

           *)    Differences in 1995 and 1994
                 is due to:

                 Statement of income:                  1995           1994
                                                    _______        _______

                 Effect of different              (392,421)      (265,955)
                 depreciation rates
                 Effect of different capital        200,000              0
                 expenditures

                 Effect on accounting of            209,000        209,000
                 pension per FASB 87

                 Effect on different loss on              0              0
                 disposal fixed assets

                                                     16,579       (56,955)

                 Retained earnings:

                 Inventory obsolensence         (1,282,000)    (1,282,000)
                 (supplies)

                 Benefit plan per FASB 87         (299,268)      (508,268)

                 Fixed assets                    11,251,385     11,443,806
                                                 __________     __________

                                                  9,670,117      9,653,538

           **)   The decrease in difference between retained earnings per
                 US GAAP and local books in 1992 is mostly due to change
                 in Norwegian accounting principles.

           ***)  The decrease in difference between retained earning per
                 US GAAP and local books in 1991 is mostly due to changes
                 in Norwegian tax regulation as some of the tax related
                 reserves were made permanent as of January 1, 1991.  This
                 does not effect the financial statements of Orkla Exolon
                 KS per US GAAP (see note 2a)

          <PAGE>

          Valuation and Qualifying Accounts and Reserves        Schedule II

                                                                  REALIZED
                                              ADDITION             LOSSES
                                   BALANCE     CHARGED   BALANCE     ON
                                      AT         TO       AT END  ACCOUNTS
                                  BEGINNING   COST AND     OF     RECEIV-
           CLASSIFICATIONS        OF PERIOD   EXPENSES   PERIOD    ABLES
           ________________       _________   _________  ______   ________

           Year ended December 31, 1995

           Allowance for             380,000
           doubtful accounts

           Year ended December 31,1994

           Allowance for             343,000     37,000  380,000    57,260
           doubtful accounts

           Year ended December 31,1993

           Allowance for           1,230,000  (887,000)  343,000    19,131
           doubtful accounts

<PAGE>

          Pursuant to the requirements of Section 13 of the Securities
          Exchange Act of 1934, the Registrant has duly caused this report
          to be signed on its behalf by the undersigned, thereunto duly
          authorized.

          March 15, 1996                EXOLON-ESK COMPANY

                                             S/ J. Fred Silver
                                        By:________________________ 
                                        J. Fred Silver, 
                                        President and
                                        Chief Executive Officer

          Pursuant to the requirements of the Securities Exchange Act of
          1934, this report has been signed below by the following persons
          on behalf of the Registrant and in the capacities and on the
          dates indicated.



           S/ J. Fred Silver
           _____________________

           J. Fred Silver,
           President and Chief
           Executive Officer



           S/ James A. Bernardoni
           _____________________
           James A. Bernardoni,
           Vice President Finance,
           and Principal Accounting
           Officer



           S/ Theodore E. Dann, Jr.
           ________________________

           Theodore E. Dann, Jr.        Chairman of the    March 15, 1996
                                             Board


           S/ Brent D. Baird
           ________________________
           Brent D. Baird                  Director        March 15, 1996


           S/ Dirk Benthien
           _______________________

           Dirk Benthien                   Director        March 15, 1996


           S/ Dr. Hans Essler
           _______________________

           Dr. Hans Essler                 Director        March 15, 1996


           S/ Dr. Hans Herrmann
           _______________________
           Dr. Hans Herrmann               Director        March 15, 1996


           S/ Patrick W. E. Hodgson
           ________________________

           Patrick W.E. Hodgson            Director        March 15, 1996


           S/ Joseph R. Pinotti
           _______________________
           Joseph R. Pinotti               Director        March 15, 1996


<PAGE>

                                   EXHIBIT INDEX
          Exhibit
            No.            Description                   Reference

         3A        Restated Certificate of      Exhibit 3A on pages 68-84
                   Incorporation

         3A(1)     Certificate of Merger        Exhibit 3A(1) on pages
                                                85-93
         3         Amendment to By-Laws dated   Exhibit 3E to the report
                   March 23, 1991               on Form 10-Q for the
                                                quarter ended March 23,
                                                1991*

         3F        Certificate of Amendment of  Exhibit 3F to the report
                   Restated Certificate of      on Form 10-K for the year
                   Incorporation dated April    ended December 31, 1994*
                   23, 1986
         3G        Certificate of Amendment of  Exhibit 3G to the report
                   Restated Certificate of      on Form 10-K for the year
                   Incorporation dated May 4,   ended December 31, 1994*
                   1987

         3H        By-Laws                      Exhibit 3H to the report
                                                on Form 10-K for the year
                                                ended December 31, 1994*

         4         Instruments Defining Rights  Articles of
                   of Security Holders          Incorporation, Exhibits
                                                3A, and Exhibits 3F and
                                                3G to the report on Form
                                                10-K for the year ended
                                                December 31, 1994*

         10D(23)   Revolving Credit Agreement   Exhibit 10D(23) to the
                   dated December 22, 1992      Report on Form 10-K for
                                                the year ended December
                                                31, 1992*

         10D(24)   Industrial Revenue Bond      Exhibit 10D(24)  to the
                   Agreement dated January 1,   Report on Form 10-K for
                   1993.                        the year ended December
                                                31, 1992*
         10F       Stockholder's Agreement      Exhibit 10F on pages 94-
                   dated as of April 26, 1984   100
                   between the Registrant and
                   Wacker Chemical Corporation

         10G       Restated License Agreement   Exhibit 10G on pages 101-
                   dated as of April 26, 1984   115
                   among Elektroschmelzwerk
                   Kempten GmbH, ESK
                   Corporation and the
                   Registrant 

         10H       Distributorship Agreement    Exhibit 10H on pages 116-
                   dated April 27, 1984         129
                   between Elektroschmelzwerk
                   Kempten GmbH and the
                   Registrant

         10I       Indemnification Agreement    Exhibit 10I on pages 130-
                   dated as of December 15,     131
                   1984 between Wacker
                   Chemical Corporation and
                   the Registrant 

         10K       Contract between Theeb,      Exhibit 10K  to the
                   Ltd. and the Exolon-ESK      Report on Form 10-K for
                   company of Canada, Ltd.      the year ended December
                   dated February 28, 1985      31, 1992*
         10M       Federal Indictments dated    Exhibit 10M to the Report
                   February 11, 1994            on Form 10-K for the year
                                                ended December 31, 1993*

         11        Statement of computation of  Page  132 
                   per share earnings
         21        Amendment of Certificate of  Exhibit 21 to the Report
                   Incorporation dated October  on Form 10-Q for the
                   28, 1992                     quarter ended September
                                                30, 1992*

         22        Subsidiaries of the          Page 133
                   registrant

         27        Financial Data Schedule      Submitted Electronically

         * Incorporated herein by reference


                                                  Exhibit 3A

                                       RESTATED

                             CERTIFICATE OF INCORPORATION

                                          OF

                                  The Exolon Company

                    The original Certificate of Incorporation of The Exolon
          Company was filed with the Secretary of State of the State of
          Delaware on December 5, 1975.  This Restated Certificate of
          Incorporation was duly adopted by the stockholders on April 12,
          1984, in accordance with the provisions of Sections 245 & 242 of
          the General Corporation Law of the State of Delaware.

                    FIRST.    The name of the Corporation is Exolon-ESK
          Company.

                    SECOND.   The address of its registered office in the
          State of Delaware is 100 West Tenth Street in the City of
          Wilmington, County of New Castle.  The name of the registered
          agent at such address is The Corporation Trust Company.

                    THIRD.    The purpose of the Corporation is to engage
          in any lawful act or activity for which corporations may be
          organized under the General Corporation Law of the State of
          Delaware.

                    FOURTH.   The number of shares of all classes which the
          Corporation is authorized to have outstanding is 1,300,000
          shares, consisting of (I) one hundred thousand (100,000)
          preferred shares without par value, issuable in series
          (hereinafter designated "Preferred Stock"), (ii) six hundred
          thousand (600,000) common shares with a par value of one Dollar
          ($l) per share (hereinafter designated "Common Stock"), and (iii)
          six hundred thousand (600,000) common shares with a par value of
          $1 (hereinafter designated "Class A Common Stock").  The express
          terms and provisions of the shares of each class are as follows:

                                    SUBDIVISION A
                          PREFERRED STOCK ISSUABLE IN SERIES

                    The Preferred Stock may from time to time be divided
          into and issued in one or more series.  Except to the extent
          herein provided, the different series shall be established and
          designated, the rights and preferences thereof established and
          the variations in the relative rights and preferences as between
          the different series shall be established by the Board of
          Directors as herein provided.  In all other respects all shares
          of Preferred Stock shall be identical.

                    The Preferred Stock may be issued from time to time by
          authority of the Board of Directors for such consideration as
          from time to time may be fixed by vote of the Board of Directors.

                    The Board of Directors is hereby expressly authorized,
          subject to the provisions of these Articles, to establish one or
          more additional series of Preferred Stock and, with respect to
          each such series, to establish:

                    (1)  the number of shares constituting such series and
          the distinctive designation thereof;

                    (2)  the dividend rate on the shares of such series and
          the dividend payment dates, and whether the shares of such series
          shall be entitled to any participating or other dividends in
          addition to dividends at such rate, and if so on what terms;

                    (3)  whether or not the shares of such series shall be
          redeemable and, if redeemable, the redemption prices and the
          terms and manner of redemption;

                    (4)  the preferences, if any, and the amount or amounts
          per share which the shares of such series shall be entitled to
          receive upon any voluntary or involuntary liquidation,
          dissolution or winding-up of the Corporation;

                    (5)  whether or not the shares of such series shall be
          subject to the operation of retirement or sinking funds to be
          applied for redemption of such shares and, if so, the annual
          amount thereof and the terms and provisions relative to the
          operation thereof;

                    (6)  the terms and conditions, if any, upon which
          shares of such series shall be convertible into, or exchangeable
          for, shares of stock of any other class or classes, including the
          price or prices or the rate or rates of conversion or exchange
          and the terms of adjustment, if any:

                    (7)  the conditions under which and matters on which
          the shares of such series shall vote as a separate class;

                    (8)  limitations or restrictions, if any, on the
          issuance of additional shares of such series or any shares of any
          other series of Preferred Stock; and

                    (9)  such other preferences or restrictions or
          qualifications thereof as the Board of Directors may deem
          advisable and as are not inconsistent with law and the provisions
          of this Restated Certificate of Incorporation.

                    Each share of Preferred Stock of any series shall be
          entitled to one vote per share, each such series voting as a
          single class with the holder of common shares of a stated class
          of the Corporation.  Votes need not be written ballot unless
          requested by the holder of shares entitled to vote thereon.

                    Notwithstanding the fixing of the number of shares
          constituting a particular series, the Board of Directors may any
          time thereafter authorize the issuance of additional shares of
          the same series.

                    Holders of Preferred Stock shall be entitled to
          receive, when and as declared by the Board of Directors out of
          funds legally available therefor, cumulative cash dividends at
          the annual rates fixed hereby or by the Board of Directors for
          the respective series.  Until all accrued dividends on all series
          of Preferred Stock shall have been declared and set apart for
          payment through the last preceding dividend date set for all such
          series, no cash payment or distribution shall be made to holders
          of any other class of stock of the Corporation.  Arrearages in
          the payment of dividends shall not bear interest.  No dividend
          shall be declared and set apart for payment on any series of
          Preferred Stock if dividends are in arrears on any other series. 
          Nothing herein contained shall be deemed to limit the right of
          the corporation to purchase or otherwise acquire at any time any
          shares of its capital stock, provided that no shares of capital
          stock shall be repurchased at any time when dividends on any
          series of Preferred Stock are in arrears.

                    Any shares of Preferred Stock which shall have been
          purchased or redeemed, or which shall at any time have been
          surrendered for conversion o r exchange or for cancellation
          pursuant to any retirement or sinking fund provision with respect
          to any series of Preferred Stock, shall be retired and shall
          thereafter have the status of authorized and unissued shares of
          Preferred Stock undesignated as to series.

                                    SUBDIVISION B
                       SPECIAL TERMS AND PROVISIONS APPLICABLE
                  TO $1.12-1/2 SERIES A CONVERTIBLE PREFERRED STOCK

                    There shall be a series of Preferred Stock which shall
          consist of Thirty-one Thousand Five Hundred Twenty-three (31,523)
          shares of said Preferred Stock and which shall constitute a
          series designated as the $1.12-1/2 Series A Convertible Preferred
          Stock (hereinafter referred to as the "Series A Preferred
          Stock").

                    (1)  Dividends.

                    The holders of the Series A Preferred Stock shall be
          entitled to receive, as and when declared by the Board of
          Directors out of any funds legally available therefor, cumulative
          cash dividends at the annual rate of $1.12-1/2 per share held,
          payable quarterly on the last day of November, February, May and
          August in each year.

                    (2)  Redemption.

                         (a)  The Corporation may, pursuant to a resolution
          adopted by the Board of Directors, redeem on any dividend payment
          date all or any part of the Series A Preferred Stock at the time
          outstanding at a redemption price of $25 per share, together with
          all dividends accrued thereon to the date fixed for such
          redemption.  If less than all of the outstanding shares of the
          Series A Preferred Stock are to be redeemed, the shares to be
          redeemed, the shares to be redeemed shall be determined by lot or
          pro rata in such manner as the Board of Directors may prescribe.

                         (b)  Notice of every redemption shall be mailed,
          addressed to the holders of record of the shares to be redeemed
          at their respective addresses as they shall appear on the books
          of the Corporation, at least twenty (20) days and not more than
          sixty (60) days prior to the date fixed for redemption.

                         (c)  If on or before the redemption date the
          redemption price, together with accrued dividends to the date
          fixed for redemption, shall have been set aside by the
          Corporation, separate from its other funds in trust for the pro
          rata benefit of the holders of the shares called for redemption,
          then after the date of redemption notwithstanding that any
          certificate for shares of the Series A Preferred Stock so called
          for redemption shall not have been surrendered for cancellation,
          the shares represented thereby shall no longer be deemed
          outstanding, the dividends thereon shall cease to accrue, and all
          rights with respect to such shares shall terminate on the
          redemption date, except for the right of the holders thereof to
          receive the redemption price of and dividends accrued on the
          shares so redeemed without interest.

                    (3)  Liquidation, Dissolution and Winding-Up.

                         (a)  In the event of any voluntary or involuntary
          liquidation, dissolution or winding-up of the affairs of the
          Corporation, then before any distribution or payment shall be
          made to the holders of the common shares of any class, the
          holders of the Series A Preferred Stock shall be entitled to be
          paid in full an amount equal to $25 per share, together with all
          dividends accrued thereon to such distribution or payment date. 
          If the amounts so payable are not paid in full, the holders of
          all of the outstanding shares of Series A Preferred Stock shall
          share ratably in any distribution of assets in proportion to the
          full amounts to which they would otherwise be respectively
          entitled.

                         (b)  Neither a consolidation nor merger of the
          Corporation with or into any other corporation, nor a
          reorganization of the Corporation, nor a sale or transfer of the
          business or assets of the Corporation as or substantially as an
          entirety, shall be considered a liquidation, dissolution or
          winding-up of the affairs of the Corporation within the meaning
          of the foregoing provisions.

                         (c)  As used herein, the term "dividends accrued"
          means, with respect to the shares of the Series A Preferred
          Stock, an amount equal to simple interest at the rate of
          $1.12-1/2 per share per annum from the date of issuance, or from
          the last date on which a dividend was paid on such shares, to the
          date as of which the computation is to be made, as the case may
          be.

                    (4)  Retirement Fund.

                         Shares of the Series A Preferred Stock shall not
          be subject to the operation of a retirement or sinking fund to be
          applied for redemption of such shares.

                    (5)  Conversion Rights.

                         (a)  Shares of the Series A Preferred Stock shall
          be convertible into fully paid and non-assessable shares of the
          Corporation's Common Stock at the rate of 1.12-1/2 shares of the
          Common Stock for each share of Series A Preferred Stock.  Such
          shares shall be converted by giving written notice of the
          election to convert to any Transfer Agent and surrendering the
          certificate or certificates for such shares to such Transfer
          Agent in transferable form.  In case of the Corporation's
          redemption of any shares of the Series A Preferred Stock, such
          right of conversion shall end, as to the shares called for
          redemption, at the close of business on the sixth business day
          prior to the date fixed for redemption, unless default shall be
          made in the payment of the redemption price.  In the event of the
          liquidation or dissolution of the Corporation, such right of
          conversion shall end at the close of business on the tenth
          business day prior to the date fixed for the first distribution
          to the holders of Series A Preferred Stock.  Upon conversion, the
          Corporation shall make no payment or adjustment on account of
          dividends accrued on the shares of Series A Preferred Stock
          surrendered for conversion, except that in the case of shares
          called for redemption accrued dividends shall be paid through the
          date fixed for redemption.

                         (b)  The number of shares of the Common Stock into
          which each share of the Series A Preferred Stock is convertible
          shall be subject to the following adjustments from time to time
          after the happening of the following events as follows:

                              (i)  In case the Corporation shall (1)
          declare a dividend on the Common Stock payable in shares of the
          Common Stock, (2) subdivide the outstanding shares of the Common
          Stock, (3) combine the outstanding shares of the Common Stock
          into a smaller number of shares, or (4) issue by reclassification
          of the Common Stock any shares of the Corporation, each holder of
          the Series A Preferred Stock shall thereafter be entitled upon
          conversion to receive for each share the number of shares of the
          Corporation which he would have owned or have been entitled to
          receive after the happening of such event had such share been
          converted immediately prior to the happening of such event.  Such
          adjustment shall become effective immediately after the close of
          business on the record day for such dividend or the day upon
          which any subdivision, combination or reclassification shall
          become effective.

                              (ii) In case the Corporation shall
          consolidate or merge into or with another corporation, or in case
          the Corporation shall sell or convey all or substantially all of
          its property, each share of the Series A Preferred Stock then
          outstanding shall thereafter be convertible into the kind and
          amount of shares of stock, other securities, cash and/or property
          received by a holder of the number of shares of Common Stock into
          which such share might have been converted immediately prior to
          such event, and shall have no other conversion rights.  In any
          such event, effective provision shall be made in the certificate
          or articles of incorporation or organization of the resulting or
          surviving corporation or otherwise or in any contracts of sale
          and conveyance for said conversion rights of the shares of the
          Series A Preferred Stock.

                              (iii)     In case the Corporation shall issue
          rights to the holders of the Common Stock entitling them to
          subscribe for or purchase shares of the Common Stock at a price
          per share less than the current market price of the Common Stock
          (as defined in Subsection (v) below) on the record date thereof
          the number of shares of the Common Stock into which each share of
          the Series A Preferred Stock shall thereafter be convertible
          shall be determined by multiplying the number of shares of the
          Common Stock into which such shares of the Series A Preferred
          Stock was theretofore convertible by a fraction, of which the
          numerator shall be the number of shares of the Common Stock
          outstanding on the record date plus the number of additional
          shares of the Common Stock offered for subscription or purchase,
          and of which the denominator shall be the number of shares of the
          Common Stock outstanding on the record date plus the number of
          shares of the Common Stock which the aggregate offering price of
          the total number of shares so offered would purchase at such
          current market price.  Such adjustment shall be made whenever
          such rights are issued and shall become effective immediately
          after the record date for the determination of stockholders
          entitled to receive such rights.

                              (iv) In case the Corporation shall distribute
          to all holders of its Common Stock rights to subscribe to-its
          debt securities or equity securities other than Common Stock,
          then in each such case the number of shares of Common Stock into
          which each such share of Series A Preferred Stock shall be
          convertible after the record date for such distribution shall be
          determined by multiplying the number of shares of Common Stock
          into which such share of Series A Preferred Stock was theretofore
          convertible by a fraction, of which the numerator shall be the
          current market price per share of the Common Stock (as defined in
          Subsection (v) below) on such record date and of which the
          denominator shall be the current market price per share of the
          common Stock on such record date less the value of the
          subscription rights so distributed applicable to one of the
          outstanding shares of Common Stock.  Value shall be determined by
          the Board of Directors of the Corporation, whose determination
          shall be conclusive and shall be described in a statement filed
          with the Transfer Agent or Transfer Agents for such shares of
          such series and for the Common Stock and sent to the holders of
          the Series A Preferred Stock.

                              (v)  The current market price per share of
          the Common Stock on any date shall be deemed to be the average of
          the daily closing prices for the fifteen (15) consecutive
          business days commencing thirty (30) business days before such
          record date.  The closing price for each day shall be the last
          reported sales price regular way or, in case no such reported
          sale takes place on such day, the average of the reported closing
          bid and asked prices regular way, in either case on the Boston
          Stock Exchange or the American Stock Exchange or, if the Common
          Stock is not listed on either Exchange, the average of the
          closing bid and asked prices as furnished by any member of the
          New York Stock exchange selected from time to time by the
          Corporation.  The term "business day" means any day on which such
          Exchange shall be open for trading.

                              (vi) No fractional shares of the Common Stock
          shall be issued upon any conversion but, in lieu thereof, there
          shall be paid to each holder of shares of the Series A Preferred
          Stock surrendered for conversion who would otherwise be entitled
          to receive a fraction of a share on such conversion, as soon as
          practicable after the date such shares are surrendered for
          conversion, an amount in cash equal to the same fraction of the
          market value of a full share of the Common Stock, unless the
          Board of Directors shall determine to adjust fractional shares by
          the issue of fractional scrip certificates or in some other
          manner.  For such purpose, the market value of a share of the
          Common Stock shall be the last reported sales price regular way
          on the day immediately preceding the date upon which shares are
          surrendered for conversion, or, in  case no such sale takes place
          on such day, the average of the reported closing bid and asked
          prices regular way on such day, in either case on the Boston
          Stock Exchange or American Stock Exchange, or, if the shares of
          Common Stock are not listed on either Exchange, the average of
          the closing bid and asked prices as furnished by any member of
          the New York Stock Exchange selected from time to time by the
          Corporation.

                              (vii)     No adjustment in the number of
          shares of the Common Stock into which each share of the Series A
          Preferred Stock is convertible shall be required unless such
          adjustment would require an increase or decrease of more than
          1/5Oth of a share in the number of shares of the Common Stock
          into which such share is then convertible; provided, however,
          that any adjustments which are not required to be made shall be
          carried forward cumulatively and taken into account in any
          subsequent calculation.

                              (viii)    Whenever any adjustment is required
          in the shares of Common Stock into which each share of the Series
          A Preferred Stock is convertible, the Corporation shall keep
          available at each of its offices and the offices of each Transfer
          Agent or Transfer Agents for such shares of such series and for
          the Common Stock a statement describing in reasonable detail the
          adjustment and the method of calculation used, and shall cause a
          copy of such statement to be mailed to the holders of record of
          the shares of the Series A Preferred Stock.

                         (c)  The Corporation shall at all times reserve
          and keep available out of the authorized but unissued shares of
          the Common Stock the full number of shares of the Common Stock
          into which all shares of the Series A Preferred Stock from time
          to time outstanding are convertible, but shares of the Common
          Stock held in the treasury of the Corporation may in its
          discretion be delivered upon any conversion of shares of the
          Series A Preferred Stock.

                         (d)  Shares of the Series A Preferred Stock
          converted into Common Stock shall have the status of authorized
          but unissued shares of Preferred Stock and any such shares may be
          reissued as shares of the Series A Preferred Stock or of any
          other series.

                         (e)  In case securities other than Common Stock,
          cash or property shall be issuable, payable or deliverable by the
          Corporation upon conversion as aforesaid, then all references in
          this paragraph shall be deemed to apply, so far as appropriate
          and as nearly as may be, to such other securities.

                    (6)  Voting.

                    Each share of the Series A Preferred Stock shall be
          entitled to one vote per share, voting as a single class with the
          shares of Common Stock.  So long as any shares of the Series A
          Preferred Stock are outstanding, no provisions hereof relating to
          such stock may be amended without the consent of the holders of
          at least two-thirds of all outstanding shares of the Series A
          Preferred Stock, which consent may be given in writing without a
          meeting or at a meeting duly held for such purpose.

                    (7)  Issuance of Other Shares of Preferred Stock.

                    The Board of Directors of the Corporation may authorize
          the issuance of additional shares of Series A Preferred Stock and
          of shares Of one or more other series of Preferred Stock,
          provided that no other series shall have any preference over the
          Series A Preferred Stock upon any liquidation, dissolution or












          winding-up of the affairs of the Corporation, but other series
          may be so authorized ranking on a parity with the series A
          Preferred Stock in such respects pro rata based on the amount of
          the respective preferences on liquidation.

                                    SUBDIVISION C
                 SPECIAL TERMS AND PROVISIONS APPLICABLE TO $1.12-1/2
                         SERIES B CONVERTIBLE PREFERRED STOCK

                    There shall be a series of Preferred Stock which shall
          consist of Thirty-one Thousand Five Hundred Twenty-three (31,523)
          shares of said Preferred Stock and which shall constitute a
          series designated as the $1.12-1/2 series B Convertible Preferred
          Stock (hereinafter referred to as the "Series B Preferred
          Stock").

                    The shares of Series B Preferred Stock shall have the
          same per share rights, preferences, voting powers and privileges
          as the Series A Preferred Stock except as otherwise expressly
          provided in this Restated Certificate of Incorporation and as
          follows:

                    (1)  Dividends.

                    The holders of the Series B Preferred stock shall
          be entitled to receive, as and when declared by the Board of
          Directors out of any funds legally available therefor, cumulative
          dividends from January 1, 1984 at the annual rate of 0.8315 per
          share held, payable quarterly on the last day of November,
          February, May and August in each year until the earliest of (i)
          December 31, 1992, (ii) the sale of all or substantially all of
          the assets of the Corporation, or (iii) the transfer of a
          controlling interest in the Common Stock and the Series A
          Preferred Stock (taken together as a whole), and thereafter at
          the annual rate of $1.12-1/2.  In the event of an adjustment of
          the Common Stock Percentage from 57.5%, the amount of such
          cumulative dividend shall be adjusted, effective on the date of
          issuance of the Series B Preferred Stock, to an amount that bears
          the same relation to $1.12-1/2 as (a) 100% minus, the adjusted
          Common Stock Percentage bears to (b) the adjusted Common Stock
          Percentage.

                    (2)  Redemption.

                    For purposes of Subdivision B, Section (2) hereof, as
          made applicable to the shares of Series B Preferred Stock hereof,
          the redemption price shall be the same amount as the amount of
          the preference under Section (3) of this Subdivision C.

                    (3)  Liquidation, Dissolution and Winding-Up.

                         (a)  The holders of the Series B Preferred Stock
          shall be entitled to a preference of $18.48 per share in the
          event of any liquidation, dissolution or winding-up of the












          affairs of the Corporation until the earliest of (i) December 31,
          1992, (ii) the sale of all or substantially all of the assets of
          the Corporation (other than a sale as a result of proceedings
          under the Bankruptcy Act or other insolvency law), (iii) a
          voluntary liquidation, or (iv) the transfer of a controlling
          interest in the Common Stock and the Series A Preferred Stock
          (taken together as a whole), and thereafter of $25 per share.  In
          the event of an adjustment of the Common Stock Percentage from
          57.5%, the amount of such preference shall be adjusted to an
          amount that bears the same relation to $25 as (a) 100% minus the
          adjusted Common Stock Percentage bears to (b) the adjusted Common
          Stock Percentage.

                         (b)  Neither a consolidation nor merger of the
          Corporation with or into any other corporation, nor a
          reorganization of the Corporation, nor a sale or transfer of the
          business or assets of the Corporation as or substantially as an
          entirety, shall be considered a liquidation, dissolution or w
          winding-up of the affairs of the Corporation within the meaning
          of the foregoing provision.

                         (c)  As used herein, the term "dividends accrued"
          means, with respect to the shares of the Series B Preferred
          Stock, an amount equal to simple interest at the annual dividend
          rate in effect during the period involved from January 1, 1984,
          or from the last date on which a dividend was paid on such
          shares, to the date as of which the computation is to be made, as
          the case may be.

                    (4)  Retirement Fund.

                         Shares of Series B Preferred Stock shall not be
          subject to the operation of a retirement or sinking fund to be
          applied for redemption of such shares.

                    (5)  Conversion Rights.

                         Shares of Series B Preferred Stock shall be
          convertible into shares of Class A Common Stock, at the same rate
          and on the same terms and conditions as contained in Subdivision
          B, Section (5) hereof, as the shares of Series A Preferred Stock
          are convertible into shares of Common Stock, and for the purposes
          hereof references to "Common Stock" in said section 5 shall be
          deemed to be to "Class A Common Stock" and references to "Series
          A Preferred Stock" shall be deemed to be to "Series B Preferred
          Stock."  For purposes of clause (v) and (vi) of Section 5(b) as
          applied to the Class A Common Stock hereunder the market value of
          the shares of Class A Common Stocks shall be as determined in
          good faith by the Board of Directors by the affirmative vote of
          not less than five members thereof based upon the value of the
          shares of Common Stock at the times provided in said Clauses (v)
          and (vi).

                    (6)  Voting.

                         Each share of the Series B Preferred Stock shall
          be entitled to one vote per share, voting as a single class with
          the shares of Class A Common Stock.  So long as any shares of the
          Series B Preferred Stock are outstanding, no provisions hereof
          relating to such stock may be amended without the Consent of the
          holders of at least two-thirds of all outstanding shares of the
          Series B Preferred Stock, which consent may be given in writing
          without a meeting or at a meeting duly held for such purpose.

                    (7)  Issuance of Other Shares of Preferred Stock.

                         The Board of Directors of the Corporation may
          authorize the issuance of additional shares of Series B Preferred
          Stock and of shares of one or more other series of Preferred
          Stock, provided that no other series shall have any preference
          over the Series B Preferred Stock upon any liquidation,
          dissolution or winding-up of the affairs of the Corporation, but
          other series may be so authorized ranking on a parity with the
          Series B Preferred Stock in such respects pro rata based on the
          amount of the respective preferences on liquidation.

                                    SUBDIVISION D
            PROVISIONS APPLICABLE TO COMMON STOCK AND CLASS A COMMON STOCK

                    Each of the shares of Class A Common Stock and each of
          the shares of Common Stock shall have the same rights,
          preferences, voting powers and privileges, except as otherwise
          expressly provided in this Restated Certificate of Incorporation.

                    (1)  Voting Rights.

                         (a)  Except as provided with respect to the shares
          of Preferred Stock and except as hereinafter provided, the
          holders of Common Stock and of the Class A Common Stock shall
          have exclusive voting rights for the election of directors and
          for all other purposes and shall be entitled to one vote for each
          share held.

                         (b)  The holders of a majority of the shares of
          Class A Common Stock and the Series B Preferred Stock, voting
          together as a class, shall be entitled to elect one-half of the
          members of the Board of Directors of the Corporation.  The
          directors thus elected shall be entitled to appoint one-half of
          members of any Executive Committee established by the Board of
          Directors pursuant to the By-Laws of the Corporation and shall
          further be entitled to cause the Corporation to appoint such
          directors' designees to one-half of the directorships in any
          subsidiary of the Corporation other than Norsk Exolon A/S.

                         (c)  The holders of a majority of the shares of
          Common Stock and the Series A Preferred Stock, voting together as
          a class, shall be entitled to elect one-half of the members of
          the Board of Directors of the Corporation.  The directors thus
          elected shall be entitled to appoint one-half of the members of
          any Executive Committee established by the Board of Directors
          pursuant to the By-Laws of the Corporation and shall further be
          entitled to cause the Corporation to appoint such directors'
          designees to one-half of the directorships in any subsidiary of
          the Corporation other than Norsk Exolon A/S.

                         (d)  Votes for the election of directors and on
          other matters need not be by written ballot unless requested by
          the holder of shares entitled to vote thereon.

                    (2)  Dividends.

                         Out of any assets of the Corporation available for
          dividends remaining after full cumulative dividends up to the
          then current dividend period on all shares of Preferred Stock
          then outstanding shall have been paid or declared and a sum
          sufficient for the payment thereof set apart, and after or
          concurrently with making payment of or declaring full dividends
          on all shares of Preferred Stock then outstanding for the then
          current dividend period for such stock and setting aside a sum
          sufficient for the payment thereof, then, and not otherwise,
          dividends may be paid upon the shares of Common Stock and the
          Class A Common Stock to the exclusion of the shares of Preferred
          Stock.  Until (a) an amount equal to 45% of the Corporation's
          consolidated net earnings after taxes and Preferred Stock
          dividends for the period January 1, 1984 through December 31,
          1992 has been paid as dividends on the shares of the common stock
          and the Class A Common Stock, or (b) until the earlier sale of
          all or substantially all of the assets of the Corporation or the
          transfer of a controlling interest in the Common Stock and the
          Series A Preferred Stock (taken together as a whole), the shares
          of the Common Stock shall be entitled to the Common Stock
          Percentage of the aggregate amount of dividends on the shares of
          Common Stock and Class A Common Stock as and when paid and the
          shares of Class A Common Stock to the remainder thereof;
          thereafter shares of Common Stock and Class A Common Stock shall
          be entitled to equal dividends on a share for s hare basis
          regardless of class; provided that in the event of the transfer
          of a controlling stock interest referred to in clause (b) the
          shares of Common Stock and of Class A Preferred Stock not so
          transferred shall continue to have the same rights as if such
          transfer had not taken place, i.e., such shares shall continue to
          be entitled to their pro rata share of the Common Stock
          Percentage of the aggregate amount of dividends on the Common
          Stock and Class A Common Stock until 45% of such net earnings
          have been paid as dividends; such dividend rights shall be
          determined by multiplying the aggregate amount of the dividend
          declared for both the Common Stock and the Class A Common Stock
          by the Common Stock Percentage, and then dividing such amount by
          the number of all outstanding shares of Common Stock; the
          dividend for each other share of Common Stock and for each share
          of Class A Common Stock shall be equal on a share for share basis
          regardless of class.

                         (3)   Distribution of Assets.

                         In the event of any dissolution, liquidation or
          winding-up of the Corporation, after there shall have been paid
          or set aside in cash for the holders of shares of Preferred Stock
          the full preferential amounts to which they are entitled, the
          holders of the shares of Common Stock and Class A Common Stock
          shall be entitled to receive pro rata all of the remaining assets
          of the Corporation available for distribution to its
          stockholders, except as hereinafter provided.  The Board of
          Directors by vote of a majority of the members thereof may
          distribute in kind to the holders of the shares of Common Stock
          and Class A Common such remaining assets of the Corporation or
          may sell, transfer, or otherwise dispose of any or all of the
          remaining assets of the Corporation to any other corporation and
          receive payment therefor wholly or in part in cash or in stock or
          obligations of such other corporation and may sell all or any
          part of the consideration received therefor and distribute the
          balance thereof in kind to the holders of the Common Stock and
          Class A Common Stock.  Until December 31, 1992, or the earlier
          sale of all or substantially all of the assets of the Corporation
          (other than a sale as a result of proceedings under the
          Bankruptcy Act or other insolvency law), or a transfer of a
          controlling interest in the Common Stock and the Series A
          Preferred Stock (taken together as a whole), the shares of Common
          Stock shall be entitled to the Common stock Percentage of such
          remaining assets of the Corporation and the shares of Class A
          Common Stock to the remainder thereof; provided, that after
          December 31, 1992 or at the time of any such sale of assets the
          shares of Common Stock shall first be entitled to receive the
          amount of dividends then payable with respect to such shares in
          of the amount payable on the shares of Class A Common Stock prior
          to any such distribution to the shares of Class A Common Stock;
          and further provided, that in the event of any such transfer of a
          controlling interest in the Common Stock and the Series A
          Preferred Stock, the shares of Common Stock not so transferred
          shall continue to be entitled to such amount of dividends payable
          on such shares prior to any distribution to the shares of Common
          Stock so transferred or to the shares of Class A Common Stock,
          and shall be entitled to the amount of assets of the Corporation
          to which such shares would have been entitled in the absence of
          such transfer of a controlling interest, determined by
          multiplying the aggregate amount of the assets of the Corporation
          by the Common Stock Percentage, and then dividing such amount by
          the number of all outstanding shares of Common Stock, with each
          other share of Common Stock and each share of Class A Common
          Stock entitled to an equal amount of assets on a share for share
          basis regardless of class.

                    (4)  The Common Stock Percentage.

                         As used in this Restated Certificate of
          incorporation, the term "the Common Stock Percentage" means
          57.5%, (I) reduced, if more the 10,000 shares of Common Stock and
          Series A Preferred Stock demand appraisal in connection with the
          merger of ESK Corporation into the Corporation, to a percentage
          determined by multiplying 57.5% by a fraction of the numerator of
          which is the number of shares of Common Stock and Series A
          preferred Stock not demanding appraisal and the denominator of
          which is 534,682; and (ii) reduced, if additional federal taxes
          (including interest thereon net of tax benefit from its
          deductibility) in excess of $100,000 are assessed against the
          corporation for years prior to 1983, by .025% for each whole
          $10,000 of such additional payments (i.e., from 57.5% to 57.25%
          if there are $100,000 of additional payments); and (iii)
          increased, if the tax loss carry forward for federal income tax
          purposes of ESK Corporation available to the Corporation after
          the merger of ESK Corporation into the Corporation is less than
          $2,893,000, by .025% for each $21,700 by which the tax loss carry
          forward is less than $2,893,000 (i.e., from 57.5% to 57.75% if
          the tax loss carry forward is $217,000 less than $2,893,000).

                    (5)  Determination of Earnings.

                         Consolidated net earnings for purposes of this
          Subdivision D shall be computed on a pooling of interests basis
          without regard to non-cash amortization of the excess of the fair
          market value over the historical cost of the assets of ESK
          Corporation.

                    FIFTH.    The number of directors shall be eight.  A
          vacancy in the membership of the Board of Directors shall be
          filled by a vote of the directors elected by the shares of Common
          Stock and Series A Preferred Stock or by vote of such shares if
          the previous director was elected by such shares, and by vote of
          the directors elected by the shares of Class A Common Stock and
          Series B Preferred Stock or by vote of such shares if the
          previous director was elected by such shares.  In no event shall
          the term of a director expire until his successor shall be
          elected and shall qualify.  The Corporation may also have one or
          more Consulting Directors appointed by the directors elected by
          the shares of Common Stock and Class A Preferred Stock.

                    SIXTH.    (1)  The Board of Directors by the
          affirmative vote of not less than five directors is hereby
          authorized to amend the By-Laws of the Corporation.

                              (2)  The holders of a majority of the shares
          of Common Stock and the Series A Preferred Stock, voting together
          as a class, and the holders of a majority of the shares of Class
          A Common Stock and the Series B Preferred Stock, voting together
          as a separate class, may amend the by-laws of the Company.

                    SEVENTH.  The Corporation shall, to the fullest extent
          permitted by Section 145 of the General Corporation Law of the
          State of Delaware, as the same may be amended and supplemented
          from time to time, indemnify ant and all directors and officers
          which it shall have power to indemnify under said section 145
          from and against any and all expenses, liabilities or other
          matters referred to in or covered by said Section.  The
          indemnification provided for herein shall not be deemed exclusive 
          of any other rights to which those indemnified may be entitled
          under any By-Law, agreement, vote of stockholders or
          disinterested directors or otherwise, both as to action in their
          official capacities and as to action in another capacity while
          holding such office, and shall continue as to a person who has
          ceased to be a director or officer, and shall inure to the
          benefit of the heirs, executors and administrators of such a
          person.

                    EIGHTH.   The Corporation hereby reserves the right to
          amend or repeal any provision contained in this Restated
          Certificate of Incorporation, in the manner now or hereafter
          prescribed by statute, and all rights conferred upon stockholders
          herein are granted subject to this reservation.

                    NINTH.    A stockholder of the Company shall have the
          right to demand payment of the value of his stock in the event of
          a merger or consolidation notwithstanding the fact that the
          Corporation's stock may be listed on a national securities
          exchange.

                    TENTH.    Except as provided in Article Eleventh, this
          Restated Certificate of Incorporation may be amended by vote of
          the holders of a majority of the shares of Common Stock and the
          Series A Preferred Stock, voting together as a class, and the
          vote of a majority of the shares of Class A Common Stock and the
          Series B Preferred Stock, voting together as a separate class.

                    ELEVENTH. 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 or consent of a
          lesser number of directors or a lesser portion of the shares of
          the Corporation or of any class of shares thereof or of any other
          securities having voting power, the affirmative vote or consent
          of a majority of all of the directors, and of the holders of two-
          thirds of the aggregate number of outstanding shares (1) of the
          Common Stock and the Series A Preferred Stock voting as one class
          and also (2) of the Class A Common Stock and the Series B
          Preferred Stock voting as a second class, shall be required:

                    (a)  to approve (I) the sale, lease or exchange by the
               Corporation of all or substantially all of its property and
               assets to any other corporation, person or other entity, or
               (ii) the merger or consolidation of the Corporation with or
               into any other corporation or corporations;

                    (b)  to approve any agreement, contract or other
               arrangement with any corporation or corporations providing
               for any of the transactions described in subparagraph (a)
               above; or

                    (c)  to effect any amendment of the Restated
               Certificate of Incorporation of the Corporation which
               amends, alters, changes or repeals any of the provisions of
               this Article Eleventh.

               Executed at Boston, Massachusetts on April 12, 1984.


                                            THE EXOLON COMPANY             
          Attest:                          (now Exolon-ESK Company)        



          S/ L. Harrison Thayer II       By: S/ John K. Shurie            
                    Secretary                     President


          <PAGE>
                                    EXHIBIT 3A(1)



                                 AGREEMENT OF MERGER


               AGREEMENT OF MERGER dated April 12, 1984, between THE EXOLON
          COMPANY, a Delaware corporation having its registered office in
          Wilmington, Delaware ("Exolon"), and E S K CORPORATION, a
          Delaware corporation having its registered office in Wilmington,
          Delaware ("ESK").

                                     WITNESSETH:

               WHEREAS, the Boards of Directors of Exolon and ESK (the
          "Constituent Corporations") have approved this Agreement of
          Merger providing for the merger of ESK into Exolon upon the terms
          and conditions hereinafter set forth; and

               WHEREAS, Exolon is authorized to have outstanding 600,000
          shares of Common Stock, $1 par value ("Exolon Common Stock"), of
          which 499,219 shares were issued and outstanding on the date
          hereof, and 60,000 shares of Preferred Stock, without par value,
          of which 31,523 shares are designated Series A $1.12  
          Convertible Preferred Stock and are issued and outstanding
          ("Series A Preferred Stock") and will have, upon completion of
          the merger to be effected herewith, an authorized capitalization
          of 600,000 shares of such Common Stock, $1 par value, 600,000
          shares of Class A Common Stock, $1 par value (the "Class A Common
          Stock"), and 100,000 shares of Preferred Stock, without par
          value, of which (a) 31,523 shares will be designated such
          Series A Preferred Stock and will be issued and outstanding, and
          (b) 31,523 shares will be designated Series B Convertible
          Preferred Stock and will be issued and outstanding ("Series B
          Preferred Stock"); and

               WHEREAS, ESK is authorized to have outstanding 1,000 shares
          of Common Stock, $10 par value ("ESK Common Stock"), 11 of which
          shares are now issued and outstanding and are owned by Wacker
          Chemical Corporation, a New York corporation ("Wacker"); and

               WHEREAS, this Agreement of Merger was submitted to the
          stockholders of Exolon at a special meeting of stockholders held
          on April 12, 1984, duly called for such purpose, and was duly
          approved by the affirmative note of the holders of at least two
          thirds of the Exolon Common Stock and Exolon Series A Preferred
          Stock (voting together as a single class); and

               WHEREAS, the Agreement of Merger has been approved by
          Wacker, the sole stockholder of ESK, pursuant to a Written
          Consent of Sole Stockholder dated January 9, 1984;

               NOW, THEREFORE, in consideration of the premises and of the
          mutual agreements herein contained and in accordance with the
          laws of the State of Delaware, Exolon and ESK (the "Constituent
          Corporations") hereby agree that, subject to the conditions
          hereinafter set forth, ESK shall be merged into Exolon and Exolon
          shall be the surviving corporation, and that the terms and
          conditions of such merger (the "Merger") shall be as follows:

               FIRST:    The name of the surviving corporation shall be
          Exolon-ESK Company (the "Surviving Corporation"), and it shall
          exist by virtue of, and be governed by, the laws of the State of
          Delaware.  The Restated Certificate of Incorporation shall be the
          Certificate of Incorporation of the Surviving Corporation.

               SECOND:   The address of the registered office of the
          Surviving Corporation in the State of Delaware shall be 100 West
          Tenth Street, in the City of Wilmington, County of New Castle.

               THIRD:    The purpose of the Surviving Corporation shall be
          to engage in any lawful act or activity for which corporations
          may be organized under the General Corporation Law of the State
          of Delaware.

               FOURTH:   The directors of the Surviving Corporation shall
          be the following: Kurt M. Hertzfeld, L. Harrison Thayer II,
          Edward R. Speare, Hollis French, Dr. Ludwig Eberle, Mr. Hans
          Pfingstl, Dr. Dieter Normann and

               FIFTH:    The officers of the Surviving Corporation shall be
          as follows:

                    Kurt M. Hertzfeld       Chairman of the Board and Chief
                                            Executive Officer

                    John K. Shurie          President

                    Dr. Ludwig Eberle       Executive Vice President and
                                            Vice Chairman of the Board

                    R. Philip Harty         Senior Vice President

                    William H. Nehill       Vice President-Finance, and
                                            Treasurer

                    David A. Matthew        Vice President-Marketing and
                                            Sales

                    L. Harrison Thayer II    Secretary


               All corporate acts, approvals, contracts and authorizations
          of Exolon and of ESK, their respective shareholders, Boards of
          Directors, committees elected or appointed by their Board of
          Directors, their officers and agents, which were valid and
          effective immediately prior to the Effective Time of the Merger
          (as that term is defined in Article Eighth), shall be taken for
          all purposes as the acts, approvals, contracts and authorizations
          of the Surviving Corporation and shall be as effective and
          binding thereon as the same were with respect to Exolon or ESK. 
          The employees of Exolon shall continue to be, and the employees
          of ESK shall become, the employees of the Surviving Corporation,
          and continue to be entitled to the same rights and benefits which
          they enjoyed heretofore.

               SIXTH:    At the Effective Time of the Merger, the separate
          existence of ESK shall cease, and the Surviving Corporation shall
          possess all assets and property of every description, and every
          interest therein, wherever located, and the rights, privileges,
          immunities, powers, franchises and authority, of a public as well
          as of a private nature, of ESK shall be vested in the Surviving
          Corporation without further act or deed.  Title to any real
          estate or any interest therein vested in ESK shall not revert or
          in any way be impaired by reason of the Merger.

               The Surviving Corporation shall be liable for all of the
          obligations of ESK.  Any claim existing, or action or proceeding
          pending, by or against ESK, may be prosecuted to judgment, with
          right of appeal, as if the Merger had not taken place, or the
          Surviving Corporation may be substituted in its place.

               All of the rights of creditors of ESK shall be preserved
          unimpaired, and all liens upon the property of ESK shall be
          preserved unimpaired, on only the property affected by such
          liens, immediately prior to the Effective Time of the Merger.

               SEVENTH:  The terms of the Merger, the mode of carrying the
          same into effect, and the manner and basis of making
          distributions to the stockholders of the Constituent Corporations
          in extinguishment of and in substitution for shares of the
          Constituent Corporations, shall be as follows:

                    (d)  At the Effective Time of the Merger each share of
          ESK Common Stock outstanding immediately prior to the Merger or
          held in the treasury of ESK, and all rights in respect thereof,
          shall forthwith cease to exist and shall be cancelled.

                    (e)  At the Effective Time of the Merger, each share of
          Common Stock and of Series A Preferred Stock of Exolon other than
          treasury stock and the certificates representing such shares
          outstanding shall remain outstanding and shall be and represent
          such Common Stock and Series A Preferred Stock of the Surviving
          Corporation with the rights and preferences provided in the
          Restated Certificate of Incorporation of Exolon, except for any
          shares as to which dissenters' appraisal rights may be demanded
          by the holders thereof.

                    (f)  At the Effective Time of the Merger, all of the
          issued and outstanding shares of ESK Common Stock shall be
          converted into 499,219 shares of the Surviving Corporation's
          Class A Common Stock and 31,523 shares of the Surviving
          Corporation's Series B Preferred Stock.

                    (g)  From and after the Effective Time of the Merger,
          the holder of the certificate or certificates representing shares
          of ESK Common Stock outstanding immediately prior to the
          Effective Time of the Merger shall, upon presentation of such
          certificate or certificates for surrender to the Surviving
          Corporation or its agent, be entitled to receive in exchange
          therefor certificates representing the shares of fully paid and
          non-assessable Class A Common Stock and Series B Preferred Stock
          of the Surviving Corporation to which such holder shall be
          entitled upon the aforesaid basis of exchange.  Until so
          surrendered, each outstanding certificate which prior to the
          Merger represented shares of ESK Common Stock shall be deemed,
          for all corporate purposes, to evidence ownership of the number
          of shares of Class A Common Stock and Series B Preferred Stock of
          the Surviving Corporation into which the same shall have been
          converted and exchanged; provided, however, that no dividends or
          other distributions declared with respect to the Class A Common
          Stock and Series B Preferred Stock of the Surviving Corporation
          shall be paid to the holder of any unsurrendered certificate or
          certificates of ESK Common Stock until such holder shall
          surrender such certificate or certificates, at which time the
          holder shall be paid the amount of dividends and other
          distributions, without interest, which theretofore became payable
          with respect to the shares of Class A Common Stock and Series B
          Preferred Stock of the Corporation evidenced by such certificate
          or certificates.

               EIGHTH:   The Merger shall not become effective until, and
          shall become effective at, the time (the "Effective Time of the
          Merger") at which an executed copy of this Agreement of Merger is
          filed with the Secretary of State of the State of Delaware in
          accordance with Section 251 of the General Corporation Law of the
          State of Delaware.

               NINTH:    Each of the Constituent Corporations hereby agrees
          to do promptly all such acts and to take promptly all such
          measures as may be appropriate to enable it to perform as early
          as practicable the covenants and agreements herein provided to be
          performed by it.

               TENTH:    ESK and Exolon, by mutual consent and majority
          vote of their respective Boards of Directors, may amend, modify
          and supplement this Agreement of Merger in such manner as may be
          agreed upon by them in writing at any time before or after action
          thereon by the stockholders of ESK or Exolon or both; provided,
          however, that no such amendment, modification or supplement made
          following such action by stockholders shall affect the rights of
          the stockholders of ESK or Exolon in a manner which is materially
          adverse to such stockholders in the judgment of the Board of
          Directors of ESK or Exolon, as the case may be, or shall change
          any of the principal terms of this Agreement of Merger.  ESK or
          Exolon may, by a majority vote of its Board of Directors, by an
          instrument in writing, extend the time for or waive the
          performance of any of the obligations of the other or waive
          compliance by the other with any of the covenants or conditions
          contained herein; provided, however, that no such waiver or
          extension shall affect the rights of the stockholders of ESK or
          Exolon in a manner which is materially adverse to such
          stockholders in the judgment of their respective Board of
          Directors.

               ELEVENTH: This Agreement of Merger shall terminate, without
          further action by or on behalf of the Constituent Corporations,
          if an affirmative vote of the holders of two-thirds of the
          outstanding shares of the Common Stock and Series A Preferred
          Stock of Exolon (voting together as a single class) is not
          obtained prior to April 30, 1984.  In addition, prior to the
          Effective Time of the Merger, this Agreement of Merger may be
          terminated, at the option of the respective Boards of Directors
          of the Constituent Corporations and notwithstanding the adoption
          of this Agreement by the respective stockholders of the
          Constituent Corporations by (a) mutual consent of the Board of
          Directors of both Constituent Corporations; or (b) the Board of
          Directors of either Constituent Corporation if:

               1.   The holders of an aggregate of more than 53,000 shares
          of the Common Stock and of the Series A Preferred Stock of Exolon
          have filed written demands for the payment of fair cash value of
          their shares; or

               2.   Such Board of Directors determines in good faith that,
          in its judgment, the Merger does not then appear to be in the
          best interests of the stockholders of that corporation.

               In the event of any such termination, the Merger shall
          thereupon be abandoned.

               TWELFTH:  The By-laws of the Surviving Corporation shall be
          the By-laws of Exolon in effect at the Effective Time of the
          Merger.

               THIRTEENTH:    This Agreement may be executed in any number
          of counterparts, each of which shall be an original, but such
          counterparts shall together constitute but one and the same
          instrument.

               IN WITNESS WHEREOF, each of the Constituent Corporations has
          caused this Agreement of Merger to be signed by its officers
          thereunto duly authorized and its corporate seal to be hereunto
          affixed, all as of the day and year first above written.


                         THE EXOLON COMPANY,
                      a Delaware Corporation



          (Corporate Seal)             By: S/ John K. Shurie            
                                            President

          Attest:


          S/ L. Harrison Thayer II   
          Secretary


                            ESK CORPORATION,
                      a Delaware Corporation



          (Corporate Seal)                   By:___________________________
                                             President


          Attest:


          S/ William Schurtman       
          Secretary



               THE UNDERSIGNED, President of ESK Corporation, who executed
          on behalf of said corporation the foregoing Agreement of Merger,
          of which this certificate is made a part, hereby acknowledges, in
          the name and on behalf of said corporation, the foregoing
          Agreement of Merger to be the corporate act of said corporation
          and further certifies that, to the best of his knowledge,
          information and belief, the matters and facts set forth therein
          with respect to the approval thereof are true in all material
          respects, under the penalties of perjury.


                                        __________________________________
                                        President


               Subscribed and sworn to before me this 12th day of April,
          1984.


                                        S/ Thomas L. Krawczyk             
                                        Notary Public

                                        My Commission expires: 3/30/86

               THE UNDERSIGNED, President of The Exolon Company, who
          executed on behalf of said corporation the foregoing Agreement of
          Merger, of which this certificate is made a part, hereby
          acknowledges, in the name and on behalf of said corporation, the
          foregoing Agreement of Merger to be the corporate act of said
          corporation and further certifies that, to the best of his
          knowledge, information and belief, the matters and facts set
          forth therein with respect to the approval thereof are true in
          all material respects, under the penalties of perjury.


                                        S/ John K. Shurie              
                                        President



               Subscribed and sworn to before me this 12th day of April,
          1984.


                                        S/ Thomas L. Krawczyk          
                                        Notary Public


                                        My commission expires: 3/30/86



               I, L. Harrison Thayer II, Secretary of The Exolon Company, a
          corporation organized and existing under the laws of the State of
          Delaware, hereby certify as such Secretary under the seal of said
          corporation, that the Agreement of Merger dated April 12, 1984,
          between the Exolon Company and ESK Corporation to which this
          certificate is attached was duly submitted to the stockholders of
          The Exolon Company at a meeting of said stockholders duly called
          and held after at least 20 days' notice by mail as provided in
          Section 251  of the Delaware General Corporation Law on the 12th
          day of April, 1984, for the purpose, among other things, of
          considering and taking action upon the Agreement of Merger; that
          499,219 shares of Common Stock and 32,881 shares of Series A
          Preferred Stock of said Corporation were issued and outstanding
          on the record date for such meeting; that said Agreement of
          Merger was approved and adopted by the affirmative vote of the
          holders of at least two-thirds of the shares of such Common and
          Preferred Stock, voting together as a single class, said shares
          of Common and Preferred Stock being the only shares of said
          Corporation then outstanding and entitled to vote thereon; that
          thereby the Agreement of Merger was at said meeting duly adopted
          in the manner required by Section  251  of the Delaware General
          Corporation Law and the Certificate of Incorporation of the
          Exolon Company, as the act of the stockholders of The Exolon
          Company and the duly adopted agreement of said Corporation.

               WITNESS my hand and seal of The Exolon Company on this 12th
          day of April, 1964.


                                     S/ L. Harrison Thayer II, Secretary   

                    I, William Schurtman, Secretary of ESK Corporation, a
          corporation organized and existing under the laws of the State of
          Delaware, hereby certify as such Secretary under the seal of said
          corporation, that the Agreement of Merger dated as of April 2,
          1984, between The Exolon Company and ESK Corporation to which
          this certificate is attached was duly adopted by the written
          consent of the sole stockholder of ESK Corporation on the 9th day
          of January, 1984, in accordance with the provisions of Section
          228 of the Delaware General Corporation Law; that 11 shares of
          Common Stock of said Corporation were issued and outstanding on
          the date of such consent; that said Agreement of Merger was
          approved and adopted by the affirmative vote of the holders of
          said 11 shares of Common Stock, being the only shares of said
          Corporation then outstanding and entitled to vote thereon; that
          thereby the Agreement of Merger was duly adopted in the manner
          required by Section 251(c) of the Delaware General Corporation
          Law as the act of the stockholders of ESK Corporation and the
          duly adopted agreement of said Corporation.

                    WITNESS my hand and seal of ESK Corporation on this
          12th day of April, 1984.
                                        S/ William Schurtman               
                                        Secretary                          


                    The above Agreement of Merger, having been approved by
          the Board of Directors of each corporate party thereto, and
          having been approved and adopted separately by the stockholders
          of each corporate party thereto, in accordance with the
          provisions of the General Corporation Law of the State of
          Delaware, and that fact having been certified on said Agreement
          of Merger by Secretary of The Exolon Company and the Secretary of
          ESK Corporation, the undersigned do now hereby execute the said
          Agreement of Merger under the corporate seals of their respective
          corporations, by authority of the directors and stockholders
          thereof, as the respective act, deed and agreement of each of
          said corporations, on this 12th day of April, 1984.

                                           THE EXOLON COMPANY              


          (SEAL)                               By:S/ John K. Shurie        
                                               President                   

          Attest:


          By: L. Harrison Thayer II      
              Secretary

                                           THE EXOLON COMPANY              



          (SEAL)                           By: ____________________________
                                               President                   




          Attest:


          By: S/ William Schurtman    
              Secretary


          <PAGE>


                                                                EXHIBIT 10F




                                STOCKHOLDERS AGREEMENT

                    AGREEMENT dated as of April 26, 1984, between The
          Exolon Company ("Exolon"), a Delaware corporation, and Wacker
          Chemical Corporation ("Wacker"), a New York corporation.

                    WHEREAS, Exolon, Wacker and ESK Corporation ("ESK"), a
          Delaware corporation and a wholly-owned subsidiary of Wacker,
          have entered into a Plan and Agreement of Reorganization provid-
          ing for the merger of ESK into Exolon, and

                    WHEREAS, Exolon has presently outstanding shares of
          Common Stock and $1.12-1/2 Series A Convertible Preferred Stock
          ("Series A Preferred Stock"), of which 99,938 shares of Common
          Stock are beneficially owned (as "beneficial ownership" is
          defined in Rule 13d-3 of the Securities Exchange Act of 1934) by
          officers and directors of Exolon immediately prior to such merger
          (the "Management Group"), and

                    WHEREAS, upon the effectiveness of such merger, Wacker
          will receive shares of the Class A Common Stock and $1.12-1/2
          Series B Convertible Preferred Stock ("Series B Preferred Stock")
          of Exolon, the name of which will be changed to Exolon-ESK
          Company, and

                    WHEREAS, the parties wish to provide for certain rights
          and obligations with respect to the shares of the Class A Common
          Stock of Exolon and to regulate Wacker's purchase of Common Stock
          and Series A Preferred Stock,

                    NOW, THEREFORE, it is hereby agreed as follows:

                    3.   Acquisition For Investment.  Wacker acknowledges
          that it is acquiring the shares of stock of Exolon to be issued
          to it upon the merger of ESK into Exolon for investment with no
          present intention of selling or distributing such shares.

                    4.   Right of Wacker to Participate in Registration for
          Sale by Exolon at Exolon's Expense.  In case of any proposed
          registration no sooner than September 30, 1984, by Exolon of
          Common Stock of Exolon on Form S-3 or other applicable form for
          public sale by Exolon under the Securities Act of 1933 (the
          "Act"), Exolon will give written notice to Wacker of its
          intention to do so and, on the written request of Wacker given
          within 21 days after receipt of any such notice (which request
          shall specify the number of shares of Class A Common Stock
          intended to be sold), Exolon will, at its expense (excluding
          Wacker's pro rata share of underwriters' commissions and expenses
          and the fees of counsel for Wacker other than counsel for
          Exolon), use its best efforts to cause all such shares specified
          in the request to be registered under the Act concurrently with
          the registration of such Common Stock.  All expenses,
          disbursements and fees in connection with such registration
          except as specifically provided above shall be borne by Exolon,
          whether so specified or not.

                    If the underwriters advise Exolon that the sale of
          shares owned by Wacker would materially interfere with the public
          offering of Common Stock of Exolon pursuant to the proposed
          registration statement, then Exolon shall have the right to
          reduce the number of shares of Class A Common Stock that may be
          offered for sale as part of the public offering of Common Stock
          pro rata with a reduction in the number of shares to be sold by
          other selling stockholders (other than a selling stockholder who
          is bearing all or part of the costs of such registration), but
          without any reduction in the number of shares to be sold by
          Exolon or other selling stockholders bearing such costs. 
          Nevertheless, Wacker shall have the right to have any of its
          shares specified in its request to Exolon but not included in the
          public offering of Common Stock included in the registration on a
          "to be sold" basis, provided that any sale of such shares shall
          not occur earlier than 90 days after the effective date of the
          public offering of Common Stock and that Wacker shall bear any
          additional costs resulting from keeping such registration
          statement effective after the sale of the shares of Common Stock.

                    5.   Right of Wacker to Registration for Sale by It at
          Its Expense.  Exolon will, upon written request made no sooner
          than September 30, 1984, that Wacker wishes to dispose of at
          least 100,000 shares of Exolon Class A Common Stock, file a
          registration statement under the Act on Form S-3 or other
          applicable form covering the number of shares of Exolon Class A
          Common Stock specified in such request and shall use its best
          efforts to have such registration statement declared effective,
          provided that Exolon shall have an obligation to register such
          shares on only two occasions.  Any such sales shall be through a
          broker or principal underwriter which is a member of the New York
          Stock Exchange and which shall be subject to the reasonable
          approval of Exolon.  Wacker shall pay all of the expenses of such
          registration, including applicable legal, accounting and printing
          expenses; provided, however, that if Exolon causes Common Stock
          of other shareholders of Exolon to be registered under the Act
          concurrently with the registration of such Class A Common Stock,
          such other shareholders shall pay their pro rata (based on the
          number of shares offered for sale by each) shares of such
          expenses.

                    If the underwriters or brokers advise Wacker that the
          sale of shares owned by such other shareholders would materially
          interfere with the public offering of Wacker's Class A Common
          Stock, then Exolon will, on demand by Wacker, reduce the number
          of shares that may be offered for sale by the other Shareholders
          in connection with such public offering.

                    6.   Right of Wacker at Its Expense to Participate in
          Registration for Sale by Other Shareholders of Exolon.  In case
          of any proposed registration no sooner than September 30, 1984,
          of Common Stock of Exolon on Form S-3 or other applicable form
          for public sale by shareholders of Exolon under the Act, Exolon
          will give written notice to Wacker of its intention to do so and,
          on the written request of Wacker given within 21 days after
          receipt of any such notice (which request shall specify the
          number of shares of Class A Common Stock), Exolon will use its
          best efforts to cause all such shares specified in the request to
          be registered under the Act concurrently with the registration of
          such Common Stock.

                    If the underwriters or brokers advise Exolon that the
          sale of shares owned by Wacker would materially interfere with
          the public offering of shares pursuant to the proposed
          registration statement, then Exolon shall have the right to
          reduce the number of Shares of Class A Common Stock that may be
          offered for sale in connection with such public offering. 
          Nevertheless, Wacker shall have the right to have any of its
          shares specified in its notice to Exolon but not included in such
          public offering included in the registration on a "to be sold"
          basis, provided that any sale of such shares shall not occur
          earlier than 90 days after the effective date of such public
          offering, and Wacker shall bear any additional costs resulting
          from keeping such registration statement effective after the
          sale.

                    All expenses, disbursements and fees in connection with
          such registration, including extraordinary accountants' fees,
          shall be paid by the selling stockholders pro rata based on the
          number of shares offered for sale by each.

                    7.   Effectiveness of Registration Statements.  Exolon
          shall use its best efforts to cause any such registration
          statement to become effective as promptly as possible and to keep
          effective and maintain any such registration or qualification for
          a period of not less than 180 days after the registration
          statement becomes effective and from time to time shall amend or
          supplement the prospectus used in connection therewith to the
          extent necessary in order to comply with applicable law.  Exolon
          may terminate the effectiveness of any such registration
          statement at any time after it has been effective for a period of
          180 days.  Exolon shall give Wacker five days' notice prior to
          any such termination.

                    8.   Exercise of Wacker's Conversion Right.  If Wacker
          chooses to exercise its right under Exolon's Certificate of
          Incorporation to have some or all of its shares of Series B
          Preferred Stock converted into shares of Class A Common Stock for
          purposes of including such shares in a registration under
          paragraphs 2, 3, or 4 hereof, its written notice or request to
          Exolon in connection with such registration shall include a
          statement of its intention to exercise its conversion right. 
          Thereafter, Wacker and Exolon shall cooperate to complete such
          conversion of shares in time to have the converted shares
          included in the proposed registration.

                    9.   Indemnification.

                         (a)  By Underwriters.  Whenever Wacker enters into
          an underwriting agreement in connection with the disposition of
          Exolon Class A Common Stock, such underwriting agreement will
          contain an agreement by the underwriter or underwriters in
          customary form to indemnify and hold harmless, to the extent
          permitted by law, Exolon, each of its directors, each of its
          officers who have signed such registration statement and each
          other such person, if any, who controls Exolon within the meaning
          of the Act, against all losses, claims, damages or liabilities
          and expenses (including legal fees), joint or several, to which
          Exolon or any such director, officer or controlling person may
          become subject under the Act or common law or otherwise, insofar
          as such losses, claims, damages or liabilities and expenses (or
          actions in respect thereof) arise out of or are based upon any
          untrue statement or alleged untrue statement of any material fact
          contained in such registration statement, or preliminary
          prospectuses or final or summary prospectuses contained therein,
          or any amendments or supplements thereto, or arise out of or are
          based upon the omission or alleged omission to state therein a
          material fact required to be stated therein or necessary to make
          the statements therein not misleading, but only if, and only to
          the extent that, such statement or omission was in reliance upon
          and in conformity with written information furnished to Exolon by
          such underwriter or underwriters specifically for use in the
          preparation thereof.

                    (b)  By Exolon.  Exolon will indemnify and hold
          harmless, to the extent permitted by law, Wacker against all
          losses, claims, damages, liabilities and expenses (including
          legal fees), joint or several (under the Act or common law or
          otherwise), caused by any untrue statement or alleged untrue
          statement of a material fact contained in such registration
          statement or preliminary prospectus or final or summary
          prospectus contained therein, or in any documents specifically
          incorporated therein by reference, or any amendments or
          supplements thereto, or caused by any omission or alleged
          omission to state therein a material fact required to be stated
          therein or necessary to make the statements therein not
          misleading except insofar as such losses, claims, damages,
          liabilities or expenses are caused by any untrue statement or
          omission contained in information furnished in writing to Exolon
          by Wacker expressly for use therein.

                    (c)  By Wacker.  In connection with any registration
          statement in which Wacker is participating, Wacker will furnish
          to Exolon in writing such information as shall reasonably be
          requested by Exolon for use in any such registration statement or
          prospectus and will indemnify and hold harmless, to the extent
          permitted by law, Exolon, its directors and officers and each
          person, if any, who controls Exolon within the meaning of the
          Act, against any losses, claims, damages, liabilities and
          expenses (including legal fees) resulting from any untrue
          statement or alleged untrue statement of a material fact or any
          omission or alleged omission of a material fact required to be
          stated in the registration statement or prospectus and necessary
          to make the statements therein not misleading, but only to the
          extent that such untrue statement or omission is contained in
          information so furnished in writing by Wacker expressly for use
          therein.

                    (d)  Of Underwriters by Exolon and Wacker.  If Exolon
          and/or Wacker enter into an underwriting agreement it shall be in
          customary form with Exolon and/or Wacker agreeing to indemnify
          such underwriters, their officers and directors and each person
          who controls such underwriters within the meaning of the Act to
          the same extent as herein provided with respect to the
          indemnification of each other.

                    10.  Registration Not Required.

                    Exolon shall not be required to register any shares
          pursuant to the provisions of this Agreement if in the opinion of
          counsel for Exolon such registration is not necessary and all of
          the shares which Wacker proposes to sell or transfer may be sold
          or transferred without violating the Act and any applicable blue
          sky laws.  In any such instance, Exolon shall cause its counsel
          to deliver a formal written opinion addressed to Wacker in form
          and substance reasonably satisfactory to counsel for Wacker.

                    11.  Stop Orders; Blue Sky Qualifications.  In
          connection with any registration statement herein described being
          effective, if any stop order shall be issued by the Securities
          and Exchange Commission, Exolon shall use its best efforts to
          obtain the removal of the same.  In connection with any public
          offering of Exolon stock referred to herein which is required to
          be registered under the Securities Act of 1933, Exolon will use
          its best efforts simultaneously to qualify, under the securities
          or blue sky laws of not more than 20 jurisdictions designated by
          Wacker, the securities being offered and maintain such
          qualifications in effect for the duration of the corresponding
          registration statement.

                    12.  Restriction on Purchase of Exolon Stock. Wacker
          agrees that before January 1, 1993, it will not, directly or
          indirectly, purchase any shares of Common Stock or Series A
          Preferred Stock of Exolon.  Wacker further agrees to use its best
          efforts to cause its parent corporation, and any corporation or
          entity affiliated with its parent corporation, not to purchase or
          otherwise acquire any shares of Exolon's Common Stock or Series A
          Preferred Stock before January 1, 1993.  This restriction shall
          not be applicable:

                    (a)  In the event of a publicly announced tender offer
          for shares of Exolon's common and/or preferred stock; or 

                    (b)  In the event of a filing under the Williams Act of
          a public announcement indicating an intention of a person or
          group to acquire a controlling interest in the shares of Exolon's
          common and/or preferred stock; or

                    (c)  In the event of a determination in good faith by
          five members of Exolon's Board of Directors that some person or
          group is seeking to acquire such control; or

                    (d)  If more than 50% of the shares of Exolon
          beneficially owned by the Management Group is transferred by the
          holder(s) thereof, excluding, however, transfers of shares to or
          among affiliates of such members.  "Affiliates" means spouses,
          children, relatives with whom members of the Management Group
          share their homes, corporations and trusts with which such
          members are associated, and beneficiaries under such trusts with
          respect to transfers in distribution of trust assets; or

                    (e)  If any person or group of persons acting in
          concert (including existing shareholders of Exolon but not
          including members of the Management Group) in any one transaction
          or series of transactions beneficially acquires shares of Common
          Stock or Series A Preferred equal to 10% of the outstanding
          shares of both classes taken together, unless such person or
          group indicates support of the Management Group; or

                    (f)  If holders of Common Stock and Series A Preferred
          Stock, who, following the merger, exercise such control as to be
          able to cause the election of their nominees to one-half of the
          directorships of Exolon, in fact lose such control.

                    13.  Miscellaneous.  This Agreement shall be binding
          upon and inure to the benefit of the successors and assigns of
          the parties.  This Agreement shall be governed by the laws of the
          State of Delaware.

                    IN WITNESS WHEREOF, the parties hereto have caused this
          Agreement to be executed by their officers thereunto duly
          authorized this 26th day of April, 1984.


                                        THE EXOLON COMPANY                 


                                        By_________________________        
                                          Chairman of the Board            


                                         WACKER CHEMICAL CORPORATION       


          <PAGE>

          EXHIBIT 1OG


                              RESTATED LICENSE AGREEMENT

                    This Restated License Agreement ("Agreement"), dated as
          of 26th of April 1984, is by and among ELEKTROSCHMELZWERK KEMPTEN
          GMBH, a West German limited liability company ("ESK"); ESK
          CORPORATION, a Delaware corporation ("ESK Corp."); and the EXOLON
          COMPANY, a Delaware corporation ("Exolon").

                                   R E C I T A L S

                    Pursuant to a license agreement (the "License
          Agreement") dated 15 December 1978 and 19 January 1979 ESK
          licensed to ESK Corp. a novel, environmentally acceptable
          technology for the production of silicon carbide ("SiC") -
          hereinafter referred to as the "Process" - which had been applied
          since 1973 by its affiliated company, Elektroschmelzwerk Delfzijl
          B.V. 

                    ESK Corp. and Exolon now intend to merge in the near
          future in such a way that ESK Corp. will be merged into Exolon
          (the "Merger"), and Exolon, as the surviving corporation will
          change its name as of the time the Merger becomes effective to
          Exolon-ESK Company (Exolon-ESK Company, as the corporation
          resulting after the effective date of the Merger, is hereinafter
          referred to as the "Licensee").

                    The parties hereto desire that on the effective date of
          the Merger Licensee shall succeed to the rights, benefits,
          duties, and obligations of ESK Corp. pursuant to the License
          Agreement effective January 1, 1984.

                    The parties further desire to amend and restate the
          License Agreement, effective as of the effective date of the
          Merger, in order to, among other things, modify the terms of the
          License Agreement and to expand the scope thereof.

                    NOW, THEREFORE, in consideration of the premises and
          the mutual covenants and agreements hereinafter set forth, the
          parties hereto hereby covenant and agree as follows:

                    As of the time and date that the Merger shall become
          effective, the License Agreement shall be amended and restated to
          provide in its entirety as follows, provided, however, that if
          the Merger shall not have occurred on or before 30 April 1984,
          then this Agreement shall be null and void ab initio, and the
          License Agreement shall remain in full force and effect as if
          this Agreement were never executed:

               14.  Definitions

                    a.   Affiliates. Those companies controlling,
          controlled by, or under the common control of Licensee or Wacker
          Chemie GmbH, the ultimate parent company of ESK, respectively,
          but excluding, in the case of Wacker Chemie GmbH, Hoechst AG and
          any entity controlled by it not otherwise an affiliate of ESK,
          and excluding, in the case of Licensee, Norsk Exolon A/S. 
          "Control" of a company shall mean when and for so long as a fifty
          percent interest in distribution and dividend rights or voting
          interests of such company is owned directly or indirectly by the
          relevant party.

                    b.   Hennepin Plant.  The current manufacturing
          facilities of Licensee at Hennepin, Illinois, which utilizes the
          Process in the manufacture of SiC.

                    c.   Improvements. All improvements of the Technology
          occurring before, during, or after the Term hereof, whether by
          ESK or by Licensee or any of their respective Affiliates except
          as provided in Section 1.6.

                    d.   Know-How. All trade secrets, secret processes,
          procedures, formulae, data, manuals, test procedures and results
          and other information of ESK or Licensee or their respective
          Affiliates, whether now existing or hereafter developed, relating
          to the Process and considered by ESK or Licensee, as the case may
          be, to be confidential and secret, and marked as confidential or
          secret if in writing or some other physical state, and such
          Know-How shall include the technology, data, drawings and
          calculations required for the construction and operation of a
          complete SiC manufacturing plant, particulars concerning the
          production of green and dark SiC, and specifications relating to
          all supplementary procedures and equipment needed or appropriate
          in connection with constructing and operating such an SiC
          manufacturing plant.

                    e.   Patents. Those letters patent listed on Exhibit A
          hereto, and any patents hereafter issued or assigned to ESK or
          its Affiliates in the Territory in regard to the Process or the
          Improvements, as well as any patent applications hereafter filed
          by or assigned to ESK or its Affiliates in regard to the Process
          or the Improvements.

                    f.   Technology. Collectively, the Process, the
          Patents, the Know-How, and any Improvements thereof, except that,
          when used in relation to Improvements of Licensee, Improvements
          and technology shall not include any new technology,
          improvements, inventions and developments which (I) are not
          derivative from the Technology and (ii) are useful otherwise than
          solely in connection with the Process.

                    g.   Term. The period commencing with the effective
          date of the License Agreement and terminating on 31 December
          1992, unless earlier terminated by the provisions hereof.

                    1.8   Territory. The United States of America and its
          territories and possessions and the Dominion of Canada.

               15.  Grant of License

                    a.   Grant. Subject to the limits of grant described in
          Section 2.3 hereof, ESK hereby grants to Licensee in perpetuity
          (unless this Agreement is terminated pursuant to Article 8
          hereof) the exclusive right and license to use the Technology to
          manufacture an unlimited quantity of SiC at the Hennepin Plant
          and, with the prior written consent of ESK (which consent shall
          not be unreasonably withheld), at any other facility within the
          Territory owned by Licensee or any of its Affiliates, and to sell
          in the Territory the said SiC so produced at the Hennepin Plant
          and such other plants, as well as the non-exclusive right, upon
          subsequent separate mutual discussion and agreement between ESK
          and Licensee, to sell such SiC so produced at the Hennepin Plant
          or at such other plant in the Territory in other parts of the
          world.

                    b.   Improvements. Except for certain patentable
          Improvements of ESK governed by Section 4.3 hereof, the foregoing
          license shall include any Improvements developed or owned by ESK,
          to the extent that ESK has the right to license the same to
          Licensee and its Affiliates (except for Norsk Exolon A/S).

                    c.   Limit of Grant.  The exclusive rights granted
          pursuant to Sections 2.1 and 2.2 are subject to the exceptions
          that (I) a license has been granted by ESK to General Abrasives,
          a division of Dresser Industries, Inc., 2000 College Avenue,
          Niagara Falls, New York 14305, pursuant to a license agreement
          dated 1 December 1983; (ii) ESK has the right to sell in the
          Territory certain products, manufactured using the Process
          outside the Territory, pursuant to a Distributorship Agreement
          dated 27 April 1984 between ESK and Licensee; (iii) if the said
          distributorship agreement is no longer in force, ESK or its
          Affiliates shall have the right to sell in the Territory products
          manufactured outside the Territory using the Process and the
          Technology, but ESK and its Affiliates may not so sell crude SiC
          if and for so long as Licensee is manufacturing and selling such
          product in the Territory in appreciable quantities on a regular
          basis; and (iv) if ESK or any of its Affiliates shall no longer
          for any reason have the right to nominate and elect at least
          one-half of the members of the Board of Directors of Licensee,
          ESK shall have the right to sell (but, until after the Term
          hereof has expired, not to manufacture) in the Territory any
          products manufactured outside the Territory using the Process and
          the Technology; (v) if the Hennepin Plant shall be conveyed to
          ESK or any of its Affiliates or any third person, whether by
          foreclosure sale or otherwise, as a consequence of Wacker Chemie
          GmbH having to pay any sums under a certain Guaranty Agreement by
          Wacker Chemie GmbH (or any agreement creating security in regard
          to the reimbursement of any amounts paid under such Guaranty
          Agreement) in regard to certain Industrial Revenue Bonds issued
          by ESK Corp., and the Hennepin Plant having been conveyed as
          security for the repayment of such sums by ESK Corp. or its
          successor to Wacker Chemie GmbH, ESK shall have the right itself
          to operate the Hennepin Plant using the Technology and ESK shall
          also have the right to grant a non-exclusive license of the
          Technology to any of ESK's Affiliates or any third person who
          shall acquire such Hennepin plant as a consequence of such a
          guaranty payment and conveyance of the Hennepin Plant as
          security, which license shall be on such terms as ESK shall deem
          appropriate and shall be assignable by such Affiliates or third
          parties to any transferees or successors thereof (and their
          respective transferees and successors) who shall thereafter
          acquire the title to the Hennepin Plant, but in any event shall
          be restricted to a license to operate the Hennepin Plant, as
          thereafter operated, renovated, replaced or expanded.  Licensee
          shall have no right to sublicense, assign, transfer, pledge, or
          encumber the said Technology or any of its right, title, and
          interest in and to this Agreement to any party other than an
          Affiliate of Licensee without the prior written permission of
          ESK.

               16.  Technical Assistance

                    a.   Extent of Assistance by ESK.  If and to the extent
          that Licensee's own personnel are not familiar with the
          Technology, ESK shall make available to Licensee, to such a
          degree and at such times as shall be mutually agreed upon by ESK
          and Licensee, basic engineering assistance in connection with the
          construction of any new SiC manufacturing plant using the
          Technology.  ESK also shall make available to Licensee, to such a
          degree and at such times as shall be mutually agreed upon by ESK
          and Licensee, technical and other necessary assistance in regard
          to the use of any Improvements developed by ESK or its
          Affiliates.

                    b.   Extent of Assistance by Licensee.  Licensee shall
          make available to ESK, to such a degree and at such times as
          shall be mutually agreed upon by ESK and Licensee, technical and
          other necessary assistance in regard to the use of any
          Improvements developed by Licensee or its Affiliates.

                    c.   Cost of Assistance. The out-of-pocket expenses and
          costs incurred in providing such technical assistance as set
          forth in Sections 3.1 and 3.2 hereof (but not the salaries or
          other compensation of any employees of the party providing such
          assistance) shall be borne by the party receiving such
          assistance.

               17.  Exchange of Information and Rights
                    a.   Duty to Exchange.  ESK and Licensee each shall be
          deemed hereunder automatically to have licensed to the other and
          its Affiliates, and shall promptly advise the other of, all
          Improvements of the Technology relating to the Process which it
          or any of its Affiliates shall have developed at any time during
          the Term hereof or any time after the Term hereof until 31
          December 1999 and shall forthwith make available to the other
          such Improvements (in regard to such nonpatentable Improvements,
          such Improvements shall be deemed licensed exclusively to the
          extent and only to the extent that patentable Improvements by the
          licensing party are exclusively licensed under Section 4.2 or
          Section 4.3 hereof to the licensee party), conditional however on
          the payment of any royalty due pursuant to either Section 4.2 or
          Section 4.3 hereof and except to the extent that such license and
          duty of exchange of ESK shall be limited by the provisions of
          Section 4.5 hereof.

                    b.   Patentable Improvements by Licensee.  To the
          extent that Licensee or any of its Affiliates shall develop an
          Improvement which is patentable, Licensee shall be deemed to have
          granted to ESK and its Affiliates, subject to a royalty to be
          mutually agreed upon by Licensee and ESK (or, in the absence of
          such agreement, determined by arbitration as provided hereinafter
          by this Agreement), payable for the period mutually agreed upon
          by Licensee and ESK, an exclusive (except for Licensee and its
          Affiliates) and non-transferable license (but with right of
          sub-license) to use the same for any purpose and in any
          jurisdiction or territory other than Norway not specifically
          denied to ESK and its Affiliates under the terms hereof, which
          license shall be in perpetuity.  In the event that any patent
          application in regard to such Improvement shall be finally denied
          by the Patent and Trademark Office or any court of competent
          jurisdiction or if the patent application is withdrawn by
          Licensee, any royalties previously paid in regard to such
          Improvement shall be refunded to ESK or its relevant Affiliate,
          without interest.  In the event any patent application is filed
          by any employee or agent of Licensee as inventor, Licensee
          covenants and agrees to cause such patent application or such
          resulting patent to be assigned to it or one of its Affiliates.

                    c.   Patentable Improvements by ESK.  To the extent
          that ESK or any of its Affiliates shall develop an Improvement
          which is patentable, ESK shall be deemed to have granted to
          Licensee and its Affiliates, subject to a royalty to be mutually
          agreed upon by ESK and Licensee (or, in the absence of such
          agreement, determined by arbitration as provided hereinafter in
          this Agreement), payable for the period mutually agreed upon by
          ESK and Licensee, a non-transferable license, without right of
          sublicense, to use the same for the purposes specified in this
          Agreement in regard to the Technology but only in the Territory
          as specified in this Agreement and other jurisdictions expressly
          consented to by ESK, which license shall be exclusive in the
          Territory (but subject to the limits on exclusivity specified in
          Section 2.3 hereof) and which license shall be in perpetuity,
          except to the extent that Licensee's license under this Agreement
          in regard to the Technology generally shall be terminated by some
          other provision of this Agreement.  In the event that any patent
          application in regard to such Improvement shall be finally denied
          by the Patent and Trademark Office or any court of competent
          jurisdiction or if the patent application is withdrawn by ESK,
          any royalties previously paid in regard to such Improvement shall
          be refunded to Licensee or its relevant Affiliate, without
          interest.

                    d.   Abandonment.  If ESK or Licensee or any of their
          respective Affiliates shall at any time during the Term hereof
          intend to abandon or not pursue a patent right or patent
          application in regard to the Technology or any of the
          Improvements (including any patentable Improvement of Licensee or
          ESK licensed to the other pursuant to Section 4.2 or Section 4.3
          hereof), it will notify the other in writing, and the notified
          party shall be entitled to assume, without further consideration,
          the said patent right or patent application within thirty days
          after such notification upon written notice to the abandoning
          party.  In such event the abandoning party shall make available
          to the other all records and documents necessary for such
          assumption.  If the notified party shall fail to give such notice
          of assumption of such patent right or patent application to be
          abandoned within the thirty day period herein specified, the
          abandoning party shall be free to abandon the same.  Any patent
          right or patent application assumed by the notified party shall
          be deemed licensed to the abandoning party on a royalty-free,
          non-exclusive basis in perpetuity.

                    e.   Limitations on License and Duty of Exchange. 
          Anything in Sections 4.1 through 4.4 hereof to the contrary
          notwithstanding, any duty of ESK to license and make available
          its Improvements shall be terminated by the occurrence of any of
          the following:

                         (a)  this Agreement shall be terminated other 
          than by the expiration of time;

                         (b)  ESK or any of its Affiliates shall no longer
          have the right to nominate and elect at least one half of the
          members of the Board of Directors of Licensee;

                         (c)  the current Management Group (as that term is
          defined in that certain stockholders agreement between Licensee
          and Wacker Chemical Corporation dated as of 18 April 1984) of the
          Licensee shall no longer control the election of one half of the
          members of the Board of Directors of Licensee.

                    Upon such termination of the exchange obligation,
          unless this Agreement shall otherwise have been terminated
          pursuant to Article 8, the right of Licensee to use the
          Improvements of ESK previously licensed to Licensee, and the
          license of Licensee to use such patentable Improvements
          previously licensed to Licensee pursuant to Section 4.3, shall
          continue, but ESK shall have no further obligation to make
          available and license any additional Improvements, whether or not
          patentable, developed subsequent to such termination pursuant to
          this Section 4.5. The provisions of this Section 4.5 are not
          ESK's exclusive remedy in the event of the breach of this
          Agreement by Licensee or any of its Affiliates, and in the event
          of such breach ESK shall have all the rights and remedies herein
          provided or available at law or in equity.

               18.  Secrecy

                    a.   Duty of Licensee.  At all times during the Term
          hereof and thereafter Licensee and its Affiliates shall keep the
          Know-How and all Improvements thereof not otherwise patented
          confidential, and shall take reasonable precautions that their
          employees and agents are also contractually bound to maintain
          such confidentiality.

                    b.   Duty of ESK.  At all times during the Term hereof
          and at all times thereafter while Licensee shall have the right
          to require ESK to exchange Improvements with it pursuant to
          Article IV hereof, ESK and its Affiliates shall keep secret and
          confidential all Improvements developed by Licensee or its
          Affiliates and deemed by the same to be confidential and shall
          take reasonable precautions to make sure that its employees,
          agents and sublicensees are also contractually bound to maintain
          such confidentiality.

                    c.   Limitations of Duty.  The foregoing duty of
          confidentiality shall not apply to any such Know-How or such
          Improvements thereof which (I) was previously known to Licensee
          or ESK or their respective Affiliates prior to the receipt
          thereof by it; (ii) shall become known to Licensee or ESK or
          their respective Affiliates hereafter from some other source
          other than as a direct or indirect result of a breach of this
          covenant of confidentiality by Licensee or ESK or their
          respective Affiliates, as the case may be; or (iii) shall become
          generally known in the industry.

                    d.   Limitation on Confidentiality Exception.  Neither
          ESK nor Licensee nor their respective Affiliates shall be
          permitted to justify disregard of its obligation of
          confidentiality under this Agreement by using the disclosed
          Know-How or Improvements to guide a search of publications and
          other publicly available material and by selecting a series of
          items of knowledge from unconnected sources in the public domain
          and fitting them together through use of the relevant Know-How or
          Improvements.

               19.  Warranties

                    a.   Of Non-Infringement.  ESK warrants that to the
          best of its knowledge the Technology licensed hereunder to
          Licensee does not infringe the patents or proprietary rights of
          any third party nor does the licensing hereof constitute a breach
          of any contractual obligations in regard thereto to which ESK or
          any of its Affiliates are a party or by which any of them are
          bound.  Licensee warrants that to the best of its knowledge any
          Improvements made available by it to ESK hereunder will not
          infringe the patent or proprietary rights of any third party or
          constitute the breach of any contractual obligations in regard
          thereto to which Licensee or any of its Affiliates are a party or
          by which any of them is bound.  In the event any claim is made
          that any of the foregoing warranties have in fact been breached,
          the party hereto so warranting ("Warrantor") shall promptly
          undertake the defense of such claim and may retain appropriate
          counsel to defend against the same, provided that such counsel
          shall be reasonably acceptable to the other of ESK and Licensee
          ("Warrantee"), and the control and expenses of such defense,
          including any settlement of the said claim or the abandonment of
          any allegedly infringing patent rights, shall be the
          responsibility of and within the sole discretion of Warrantor. 
          Warrantee shall have the right to retain its own counsel at its
          own cost and expense and, subject to the right of Warrantor so to
          control the defense of such claim, to participate in such
          defense.  Warrantor shall indemnify Warrantee in regard to any
          such claim of breach of warranty, but only to the extent of the
          out-of-pocket cost and expense (including reasonable attorneys'
          fees and court costs until Warrantor has assumed liability for
          and defense of the claim) and liability to third parties imposed
          upon Warrantee which results from the breach of such warranty by
          Warrantor.

                    b.   Of Reliability.  ESK and Licensee each warrants to
          the other that the Technology or any Improvement which it
          provides to the other under this Agreement was properly and duly
          prepared by qualified and reliable engineers and technicians and
          that the appropriateness of such Technology or Improvement has
          been established through technical experimentation and use.

                    c.   Disclaimer. Licensee and ESK each disclaims any
          and all other warranties, whether expressed or implied, in regard
          to the Technology and the Improvements.  Each acknowledges that
          the remedies specified in Section 6.1 shall be exclusive in
          regard to the breach of the warranties specified therein.

                    d.   Nonwarranty Claims of Infringement.  In the event
          any claim is made by a third party that the Technology or any
          Improvement licensed hereunder by ESK or Licensee to the other
          infringes the patents or proprietary rights of a third party, and
          such claim does not constitute a breach of the warranties of the
          respective parties in Section 6.1 hereof, the licensing party
          shall promptly undertake the defense of such claim and may retain
          appropriate counsel to defend against the same, provided that
          such counsel shall be reasonably acceptable to the other of ESK
          and Licensee (the "licensee party"), and the control and expenses
          of such defense, including any settlement of the said claim or
          the abandonment of any allegedly infringing patent rights, shall
          be the responsibility of and within the sole discretion of the
          licensing party except that the licensing party may not agree to
          any settlement which imposes liability upon the licensee party in
          excess of the licensing party's liability limit for
          indemnification under this Section 6.4. The licensee party shall
          have the right to retain its own counsel at its own cost and
          expense and, subject to the right of the licensing party so to
          control the defense of such claim, to participate in such
          defense.  The licensing party shall indemnify the licensee party
          in regard to any such claim of infringement, but only to the
          extent of out-of-pocket costs and expense (including reasonable
          attorneys' fees and court costs until the licensing party has
          assumed liability for and defense of the claim) and liability to
          third parties imposed upon the licensee party as a result of such
          infringement claim, but the maximum amount of the licensing
          party's duty of indemnity hereunder in regard to licensee party's
          liability to third parties (including any obligation to pay
          royalties for past or future use) is limited to the amount of
          royalties which the licensing party has received or which has
          been accrued by the licensee party (provided, however, that if
          any such royalties have accrued but have not yet been paid to the
          licensing party, the licensing party may deduct such accrued but
          unpaid royalties from any amounts which it may owe to the
          licensee party hereunder, thereby cancelling the Licensee party's
          obligation to pay such amount of accrued but unpaid royalties)
          under this Agreement since the date of the Merger.  Nothing in
          this Section 6.4 shall be construed to obligate the licensing
          party to continue any defense against such claim if the licensing
          party reasonably considers such defense to be legally or
          economically impractical, but licensee party may continue such
          defense if it may still be subject to liability.

                    e.   Other Claims Regarding the Technology or
          Improvements.  ESK and Licensee will promptly give notice to the
          other, in writing, of any infringement or possible infringement
          of, or of attack or threatened attack on, any of the Technology. 
          To the extent that such matter is not within the scope of
          Section 6.1 or Section 6.4 hereof, the parties will thereupon
          consult with one another as to the course of action to be taken,
          but the licensor of such Technology, be it ESK or Licensor, will
          remain the final arbiter of whether or not legal proceedings are
          to be undertaken with respect to any infringement(s) or such
          attack defended against.  If affirmative action is decided upon,
          the parties agree to cooperate wholeheartedly with one another
          and to decide, taking into account all of the relevant
          circumstances, whether and how the costs of any action are to be
          apportioned between them.

               20.  Royalties

                    a.   Royalty. As consideration for the grant of the
          licenses provided herein, as well as the covenant of ESK to make
          Improvements hereafter developed available to Licensee, Licensee
          hereby agrees to pay to ESK a royalty of 3.5% of the aggregate
          net proceeds (based upon the invoice price of the Products, less
          any charges for freight, insurance, or taxes and also less any
          rebates, discounts or allowances) in fact received by Licensee or
          any of its Affiliates from the sale of any of the Products
          manufactured using the Process or any part of the Technology as
          licensed hereunder.  The royalty due hereunder on any sales
          between Licensee and any of its Affiliates shall be based upon
          the average net invoice price, weighted as to quantity sold, of
          all sales of the same product in the same calendar year subject
          to these royalty provisions which were made between Licensee or
          any of its Affiliates and any Non-Affiliate.

                    b.   Payment.  Licensee agrees to keep a complete
          record regarding the sale and delivery of products subject to
          such royalty obligation, indicating all particulars that are
          necessary for computing such royalties.  Within eight weeks after
          the close of each calendar year during the Term hereof, Licensee
          shall send ESK an accounting of sales made in the aforementioned
          calendar year which were subject to such royalty obligation, and
          with such accounting Licensee shall submit payment of the royalty
          due for such period in regard to the proceeds of such sales.  ESK
          shall have the right to conduct at any time, through an auditor
          obligated to maintain confidentiality, an audit of the accounting
          of Licensee in regard to the sale and delivery of such products
          subject to the royalty obligation and the proceeds thereof.  The
          cost of such audit, if made by Licensee's regular accountant,
          shall be borne by Licensee, otherwise by ESK.

                    c.   Withholding.  Licensee may deduct from the
          payments which it is obligated to make to ESK pursuant to this
          Article 7 any taxes which Licensee is required to withhold
          pursuant to the laws of the United States of America or the
          Dominion of Canada, or any of the subdivision of either, but only
          insofar as ESK may set off or credit such sums withheld against
          its German tax obligations.

                    d.   Abatement.  Licensee and ESK hereby stipulate and
          agree that the royalty obligations due hereunder constitute,
          among other things, consideration for the licensing of the
          various aspects of the Technology as a whole, as well as the
          competitive advantage gained by Licensee (and Licensee's
          predecessor) in having available the Know-How at the commencement
          of the Term hereof.  Licensee and ESK stipulate and agree that if
          any of the Patents shall be held invalid, or if ESK shall for any
          reason abandon any Patent, the royalty payments which would be
          otherwise payable during the remainder of the Term after such
          finding of invalidity or abandonment shall be ratably abated upon
          the mutual agreement of ESK and Licensee (or, in the absence of
          such agreement, the amount of such abatement shall be determined
          by arbitration as provided hereinafter in this Agreement), taking
          into account any competitive advantage otherwise obtained by
          Licensee and its predecessor and the fact that the claims
          protected by U.S. Patents (and their Canadian equivalents)
          3,950,602 and 3,976,829 are substantially more significant than
          the claims protected by the other two U.S. Patents (and their
          Canadian equivalents).  If any patent application and/or patents
          in regard to any of the patentable Improvements of either ESK or
          Licensee shall be ruled invalid or abandoned, the royalty shall
          be abated to the extent that a royalty was established and paid
          as set forth in Section 4.2 or Section 4.3 in regard to the
          patentable Improvement in question developed by ESK or Licensee.

               21.  Termination

                    a.   Right of ESK to Terminate.  Provided ESK is not in
          default hereunder, ESK shall have the right to terminate this
          Agreement, whether before or after the expiration of the Term
          hereof, at once upon written notice to Licensee if any of the
          following shall occur:

                         (a)   Licensee shall default in the performance or
          observance of any covenant or agreement hereunder (other than the
          covenant to pay royalties or other sum due), and Licensee shall
          fail to cure such default (or shall not be undertaking bona fide
          efforts to cure such default as promptly as possible if such cure
          shall require more than thirty days) for at least thirty days
          after ESK shall have given Licensee written notice hereof,
          specifying with particularity the nature of the default;

                         (b)   Licensee shall fail to pay any royalties due
          hereunder and shall fail to cure such default within fifteen days
          after it shall have received written notice thereof;

                         (c)   Licensee shall become bankrupt or insolvent
          or shall enter into any voluntary bankruptcy or reorganization
          proceeding, shall become the purported bankrupt in any
          involuntary proceeding or reorganization proceeding which is not
          dismissed within sixty days after it has been commenced, shall
          make an assignment for the benefit of creditors, or shall
          generally be unable to pay its debts when they become due for a
          period of sixty days.

                    b.   Termination by Licensee.  Provided Licensee is not
          in default hereunder, Licensee may terminate this Agreement at
          once, whether before or after the expiration of the Term hereof,
          upon written notice to ESK if any of the following shall occur:

                         (a)   ESK shall default in the performance or
          observance of any covenant or agreement of ESK herein set forth
          and ESK shall fail to cure such default (or shall not be
          undertaking bona fide efforts to cure such default as promptly as
          possible if such cure requires more than thirty days) for at
          least thirty days after Licensee has given ESK written notice
          thereof, specifying with particularity the nature of the default;
          or

                         (b) Licensee shall irrevocably abandon all use and
          exploitation of the Technology.

                    c.   Effect of Termination.  Upon the termination of
          this Agreement under this Article 8, Licensee shall at once pay
          all royalties accrued up to the date of termination, even if not
          otherwise at that time due and payable pursuant to the terms
          hereof.  Such termination shall be without prejudice to any
          rights or remedies available to either Licensee or ESK against
          the other which may have accrued prior to the date of
          termination.  Upon such termination Licensee and its Affiliates
          shall at once return any and all written material and items in
          their possession incorporating any part of the Technology and
          Improvements made available by ESK or its Affiliates to Licensee,
          as well as all copies thereof.  Any covenants or agreements in
          this Agreement in regard to secrecy and confidentiality and in
          regard to the return of certain items to ESK shall survive such
          termination, shall remain in full force and effect, and shall be
          fully enforceable.

               22.  Force Majeure and Special Conditions

                    a.   Force Majeure.  In the event that the fulfillment
          of any covenant or obligation under this Agreement shall be
          interrupted or delayed by acts of God, war, blockades, labor
          disputes of any kind, insufficient or delayed provision of
          transportation, fuel, raw materials, or otherwise, acts of
          officials, or seizure by any governmental authority, or any other
          circumstance which delays or interferes with the fulfillment of
          the covenants of either Licensee or ESK pursuant to this
          Agreement and are beyond the control of the parties so affected,
          both parties shall be relieved, during the continued existence of
          such cause, from the performance of their respective obligations
          hereunder, without the right of either party to any claim for
          damages.  Immediate notice to the other party must be given in
          any case of force majeure, and it is understood that the party
          asserting such force majeure shall take all reasonable effort to
          reduce to a minimum the consequences of the delay which has
          occurred.

                    b.   Special Conditions.  Should there occur such a
          gross fundamental change in general economic and technical
          conditions existing at the time when the Term hereof commenced,
          that the carrying out of this Agreement would represent an undue
          hardship for either party, the party affected by such change
          shall have the right to ask for an appropriate modification of
          this Agreement.

               23.  Miscellaneous

                    a.   Choice of Law.  This Agreement shall be governed
          by and construed and interpreted in accordance with the law of
          the State of New York.

                    b.   Arbitration. Any controversy or claim arising out
          of or relating to this Agreement, or the negotiation of breach
          thereof, shall be settled by arbitration in accordance with the
          rules of the American Arbitration Association, and judgment upon
          award rendered by the arbitrator(s) may be entered in any court
          having jurisdiction thereof.  Arbitration shall be held at a site
          mutually agreeable to Licensee and ESK, or if no agreement can be
          reached then in New York, New York.

                    c.   Interest. Any sum owing by Licensee to ESK not
          paid when due shall accrue interest at a varying interest rate
          equal to the varying prime rate of interest announced from time
          to time by Citibank N.A., New York, New York.

                    d.   Notice. Any notice required or permitted to be
          given hereunder shall be deemed given when mailed, postage
          prepaid, by first class mail (air mail if to an address overseas
          from the point of mailing), certified or registered, with return
          receipt requested, to the address of the party to receive such
          notice as set forth below the signatures of the respective
          parties below, or to such other address as the party to receive
          such notice may give notice of pursuant to the provisions of this
          Section 10.4.

                    e.   Binding Effect, Assignability.  This Agreement
          shall be binding upon and shall inure to the benefit of the
          respective successors and assigns of the parties hereto. 
          Anything in the previous sentence to the contrary
          notwithstanding, Licensee and ESK shall not have the right to
          assign this Agreement or their respective rights and obligations
          hereunder to any person or party other than one of their own
          Affiliates without the prior written consent of the other of ESK
          and Licensee.

                    f.   Severability. Each and every provision in this
          Agreement shall be deemed severable, separable, and independent
          from the other provisions hereof, and in the event that any such
          provision hereof is later held unenforceable, the validity or
          enforceability of any other provision hereof shall not be thereby
          affected, and Licensee and ESK hereby covenant that in the event
          any such provision is in fact void or unenforceable, they shall
          use their best efforts mutually to agree upon a substitution
          therefor achieving the same economic result as the void or
          unenforceable provision.

                    g.   Entire Agreement.  This Agreement, the Exhibits
          attached hereto (which for the purposes hereof shall be deemed a
          part of and incorporated into this Agreement), and the documents
          and instruments referred to herein, constitute the entire
          agreement of the parties in regard to the subject matter of this
          Agreement and no amendment or modification thereof may be made
          except by a written agreement signed by both Licensee and ESK.

                    h.   Counterparts. This Agreement may be executed in
          one or more counterparts, each of which shall be deemed an
          original and all of which, upon execution, shall be deemed and
          constitute one and the same instrument.

                    IN WITNESS WHEREOF, the parties hereto have executed
          this Agreement as of the day and year first above written.

          ELEKTROSCHMELZWERK KEMPTEN GMBH         THE EXOLON COMPANY


          By S/ Norman Pfingstl                   ByS/ Kurt M. Hertzfeld   

          Name: Norman Pfingstl                   Name: Kurt M. Hertzfeld
          Title: Managing Director                Title: Chairman
          Herzog-Wilhelm-Str. 16                  1000 East Niagara Street
          D-8000 Muenchen 2                       Tonawanda, New York 14150
          Federal Republic of Germany             Attention: Chairman of
          the                                      Board


          ESK CORPORATION



          By S/ Ludwig Eberle     
          Name: Ludwig Eberle
          Title: President
          P.O. Box 412
          Hennepin, Illinois 61327
          Attention: President


                                      EXHIBIT A


          US-Patent      Issue Date          CD-Patent      Issue Date

          3,950,602      4/30/76             1,038,432      9/12/78
          3,976,829      8/24/76             1,066,019      11/13/79
          3,989,883      11/02/76            1,048,092      2/06/79
          4,158,744      6/19/79             1,070,477      1/29/80


          <PAGE>

                                                                EXHIBIT 10H



                              DISTRIBUTORSHIP AGREEMENT



          Between:       EXOLON-ESK COMPANY
                         1000 East Niagara Street
                         TONAWANDA, New York  14150
                         (hereinafter referred to as the "Distributor")
          and

                         ELEKTROSCHMELZWERK KEMPTEN GMBH
                         Herzog-Wilhelm-Strasse 16
                         D-8000 MUENCHEN 2
                         (hereinafter referred to as "ESK")

                    I.   Subject and Definitions

                         A.   Subject to the terms and conditions of this
          Agreement, ESK hereby appoints the Distributor its sole and
          exclusive Distributor of the products listed in Appendix A
          ("Products") in the Territory as defined in Section 1.2 hereof.

                         B.    The Territory shall be the United States of
          America and its territories (including the Commonwealth of Puerto
          Rico) and Canada.

                         C.    This Agreement shall become effective on
          January 1, 1984, and the initial term thereof shall expire on
          December 31, 1988; provided, however, that the term of this
          Agreement shall be automatically extended for additional
          successive three year terms, commencing on January 1, 1989, and
          each succeeding third anniversary thereafter unless either party
          shall give written notice of termination by June 30 of the last
          contract year of the original term or the renewal term hereof
          then in effect, in which event this Agreement shall terminate on
          the following December 31 of the same contract year.

                         D.   As used in this Agreement, "Buyer" shall mean
          the original ultimate purchaser or user of any of the Products,
          after purchase from Distributor or from any middleman, who has
          ultimately acquired the Product in question in any series of
          non-final sales originating with Distributor.

                    II.  Promotion and Sale

                         A.   Distributor shall use its best efforts to
          develop and exploit the maximum sales potential for the entire
          line of the Products in the Territory.

                         2.2  Distributor shall suitably promote the
          Products in the Territory through the appropriate means.

                         2.3  Distributor shall establish and maintain a
          sales organization, which shall be properly trained and which
          shall competently and conscientiously promote and sell the
          Products and maintain the good will of customers throughout the
          Territory.

                         2.4  The parties shall consult with one another
          concerning Distributor's performance of its obligations under
          this paragraph 2 and ESK shall render to Distributor such
          assistance as it deems appropriate.

                         2.5  ESK shall provide Distributor such technical
          assistance as may reasonably be required by Distributor in the
          promotion and sale of the Products, and the cost of such
          technical assistance shall be borne by ESK, except however, that
          Distributor shall reimburse ESK for all travel, meal, lodging,
          and related out of pocket expenses incurred by personnel of ESK
          or its affiliates while in the Territory in providing such
          technical assistance.

                         2.6  ESK's personnel shall have the right
          periodically to visit Distributor's facilities.  Distributor
          shall assist where necessary in making arrangements for such
          visits.  Deficiencies in regard to proper storage of the
          inventory, prompt processing of customer orders, inquiries, or
          complaints, appropriate limitation of warranties and liability
          (as previously agreed upon by the parties), and maintenance of
          appropriate inventory of Products noted during such visits to
          such centers or otherwise shall be remedied without delay by
          Distributor.

                    III. Reports; Planning

                         A.   Not more than twenty-one (21) days after each
          June 30 and January 31, starting with June 30, 1984, while this
          Agreement is in force, Distributor shall mail a report in writing
          to ESK.  In such semi-annual report Distributor shall:

                              1.   advise ESK of the inventories of the
          Products held by Distributor, if any, at the end of the
          just-completed quarter, by classes and sub-classes, in the form
          mutually agreed upon by the parties hereto, showing grade, size,
          and product type to the extent differentiated on ESK's invoices
          to Distributor, cost thereof and quantity on hand;

                              2.   advise ESK of its anticipated
          requirements, if any, of the Products in the coming two calendar
          quarters; thereafter the parties shall jointly plan Distributor's
          inventory requirements, if any, and determine the quantities of
          the Products by classes and sub-classes to be ordered by
          Distributor from ESK.

                         B.   In November of each year during the term of
          this Agreement, Distributor shall furnish ESK with a report on
          Distributor's marketing plans for the coming calendar year and
          setting forth the activities of the competition, the market for
          the Products, the price structure of the market, and reactions of
          Distributor's customers to the Products.

                         C.   Within ninety days (90) after the end of each
          fiscal year (or portion thereof) of Distributor falling within
          the term hereof, Distributor shall furnish to ESK a report of the
          total gross sales in tonnage of the Products by Distributor
          during such fiscal year, with the average price per ton for each
          such Product during such year.  Distributor agrees that ESK shall
          have the right to examine and copy (at ESK's expense), from time
          to time, Distributor's books and records in regard to
          Distributor's inventory of the Products.

                    IV.  Prices, Payment, Sales and Delivery Terms

                         A.   Distributor will purchase the Products for
          its own account from ESK at the net list prices set by ESK for
          the Territory, CIF at port of entry.  Title to the Products and
          risk of loss thereof shall pass from ESK to Distributor,
          irrespective of any agreement between them as to purchase of
          insurance or shipment terms, upon delivery by ESK of the Products
          to the carrier loaded on board at the port of shipment.  Any port
          of entry shall be mutually agreed upon by ESK and Distributor. 
          Prices are subject to change from time to time by ESK and ESK
          shall give Distributor sixty (60) days written notice prior to
          the effective date of any such change; however, ESK shall not be
          required to give such sixty day notice if the price increase is
          caused by increased customs duties or import surcharges.  Price
          changes shall apply to orders submitted before the expiration of
          the sixty-day period unless delivery is scheduled by Distributor
          to take place after such period expires, provided, however, that
          Distributor's scheduling of such delivery conforms to the normal
          and customary delivery schedules arranged between Distributor and
          ESK previously and is for normal and customary quantities of
          Products previously ordered by Distributor from ESK.

                         B.   Distributor shall be invoiced in the currency
          of the Federal Republic of Germany (DM) and payment of the
          invoice prices shall be made in such currency.  Payment terms
          shall be net sixty (60) days.  All bank fees and other charges
          and expenses shall be paid by Buyer.  Any sum not paid when due
          shall accrue interest at a varying rate equal to three points
          above the varying discount rate in effect from time to time as
          announced by the West German Bundesbank.  Any demand or
          collection of interest by Seller shall not be deemed in lieu of
          any other claim for damages which Seller may have.

                         C.   The latest edition of the "Incoterms" issued
          by the International Chamber of Commerce shall be applicable to
          any sales or deliveries hereunder, but in the event of any
          conflict between the terms hereof and Incoterms, the terms hereof
          shall prevail.

                         D.   Unless otherwise provided in this Agreement,
          the terms and conditions of sale of ESK attached hereto, which
          are based on ESK's standard terms and conditions for export
          sales, shall be deemed a part of this Agreement and shall govern
          all sales transactions entered into within the framework of this
          Agreement.  Such terms and conditions may only be modified with
          the prior written consent of both parties hereto.  In the event
          of any conflict between such standard terms and conditions of
          sale and the provisions of this Agreement, this Agreement shall
          prevail.  Any terms and conditions appearing on any quotation,
          purchase order, or acknowledgment form of either party made
          hereto in connection with any sales transactions within the
          framework of this Agreement shall be without force or effect.

                         E.   In the event that Distributor intends to
          grant any lien or security interest in its inventory (other than
          machinery and parts inventory) to secure obligations of any kind,
          Distributor will, prior to such grant of any such lien or
          security interest, grant to ESK, as security for its payment to
          ESK of any and all amounts due to ESK under any section of this
          paragraph 4 or any other provision of this Agreement, including
          any and all attorney's fees and legal costs incurred by ESK in
          enforcing this Agreement or collecting any monies due to ESK from
          Distributor for any reason, a first security interest and lien in
          the inventory of Distributor to the extent such inventory is
          comprised of any Products sold to Distributor by ESK pursuant to
          this Agreement or otherwise, as well as all products derived from
          such Products, all rights of Distributor as a seller of such
          Products or products derived from such Products under Article 2
          of the Uniform Commercial Code, all such Products or products
          derived from the Products which are sold or transferred by
          Distributor which have been subsequently returned, reclaimed or
          repossessed, and all proceeds thereof, including any cash or
          accounts receivable resulting from the sale of such inventory or
          proceeds of any insurance policy (collectively, the
          "Collateral").  Distributor agrees to keep the inventory
          identified so that it can be distinguished from any goods not
          subject to this security interest, to keep such inventory insured
          against the customary casualties and risks for at least its
          replacement costs, to protect the inventory from waste, damage by
          the elements, theft and vandalism, and to pay all taxes of any
          kind which may be imposed upon the inventory or which, if not
          paid, could result in a lien upon the inventory.  Distributor
          agrees that in the event Distributor intends to grant such lien
          or security interest to another, it will at any time and from
          time to time execute any financing and continuation statements
          reasonably requested by ESK to perfect or to continue the
          perfection of such security interest and further appoints ESK its
          attorney-in-fact to execute and file such financing and
          continuation statements if Distributor fails to execute and
          deliver the same within 5 days after the same is requested by
          ESK.  Distributor warrants that such security interest shall be
          superior to any and all liens and encumbrances upon such
          Collateral.  Failure of Distributor to observe the covenants and
          warranties of this Section 4.5, or to observe the other
          covenants, warranties and agreements of this Agreement, or to pay
          any sum when due under this Agreement shall constitute grounds
          for ESK, at its option, to declare all sums immediately due and
          owing and to exercise its rights under this Section 4.5. Any
          rights of ESK under this Section 4.5 are cumulative of any other
          rights and remedies which ESK may have at law or in equity.

                    V.   Sales by ESK in the Territory

                         A.   Notwithstanding paragraph 1 hereof and
          subject to the following conditions, ESK shall have the right
          after consulting with Distributor, to sell and to make delivery
          of the Products to those customers who wish to negotiate and deal
          directly with ESK.  In regard to such customers, ESK hereby
          appoints Distributor its exclusive sales representative for the
          Territory during the term hereof, and Distributor agrees to
          cooperate with ESK to promote and bring about such business
          between ESK and such customers who wish to deal directly with
          ESK, but the acceptance or refusal of such orders procured by
          Distributor from such customers for ESK shall in all instances be
          reserved to ESK, and ESK, not Distributor, shall establish the
          selling prices as well as the terms and conditions of sale and
          delivery to such customers, provided, however, that ESK shall not
          make such sales at prices which are less than the prices of
          Distributor for sales to its customers of the same product of the
          same quality in the same quantity and under the same delivery and
          payment terms.

                         B.   In such cases of direct sale by ESK, ESK
          shall pay to Distributor, in consideration of the performance of
          Distributor's obligations hereunder, a commission equal to two
          percent (2%) of the invoice amount charged by ESK to such
          customers (less freight, taxes, insurance, customs duties, and
          any discounts, rebates, and allowances) and in fact paid by such
          customers.  If for any reason any orders shall remain unexecuted
          or unpaid, Distributor shall have no claim for any compensation
          or allowance with respect thereto.

                         C.   Notwithstanding Section 5.2 hereof,
          Distributor shall have no claim for commissions on triangle and
          switch business into third countries, nor shall any commission be
          paid to Distributor in the event that American or Canadian
          companies purchase Products, in their own name and on their own
          account, for direct or indirect shipment to a location outside
          the Territory.

                    VI.  Expenses of Performance

                         Unless otherwise herein provided, each of the
          parties hereto shall bear the entire cost of performing its
          obligations hereunder.  In particular, Distributor shall not be
          compensated or reimbursed for the advertising, servicing and
          other expenses incurred by it in performing its obligations under
          paragraph 2 hereof.

                    VII. Limitation of Warranty

                         A.   ESK warrants only that the Products sold to
          Distributor under this Agreement will meet ESK's specifications
          or the relevant sample or any independent standard accepted
          expressly by ESK, under normal use in accord with ESK's
          specifications and instructions.  If any failure to conform to
          this warranty is reported to ESK in writing within thirty (30)
          days after the date of the receipt of the Products by Distributor
          or any Buyer receiving through Distributor (in the case of any
          nonconformity discoverable through reasonable inspection by
          Distributor or such Buyer) or within thirty (30) days after the
          discovery of the nonconformity (in the case of any nonconformity
          not discoverable through such reasonable inspection, but in any
          event notice of any nonconformity, whether or not discoverable by
          reasonable inspection, must be given to ESK within one hundred
          eighty (180) days after delivery of the Products to Buyer), ESK,
          upon being satisfied of the existence of such nonconformity, will
          correct the same by, at ESK's sole option, delivering replacement
          Products or refunding the purchase price (or, where appropriate,
          the unit price for such relevant quantity of the Products as have
          the nonconformity) paid by Distributor or Buyer.  If the Products
          are found by ESK to be nonconforming, ESK will pay shipping costs
          for return to ESK.  No Products shall be returned to ESK,
          however, without its express written consent.

                         THE FOREGOING WARRANTY IS THE SOLE WARRANTY OF
          ESK.  ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING
          WARRANTIES OF MERCHANTABILITY AND FITNESS FOR PURPOSE, ARE
          EXCLUDED AND DISCLAIMED.

                         ESK SHALL NOT BE LIABLE TO DISTRIBUTOR, BUYER OR
          TO ANY OTHER PERSON, EITHER DIRECTLY OR BY WAY OF
          INDEMNIFICATION, CONTRIBUTION OR OTHERWISE, FOR CONSEQUENTIAL,
          INCIDENTAL, SPECIAL OR DIRECT DAMAGES, WHETHER THE CLAIM FOR ANY
          SUCH DAMAGES IS BASED ON WARRANTY, TORT, CONTRACT, OR OTHERWISE.

                         B.   Distributor agrees to undertake all
          reasonable efforts requested by ESK to assure that ESK's product
          warranty is distributed to all Buyers, and Distributor agrees not
          to give any broader warranty or more restricted limitation of
          liability on its own behalf to Buyers that those given by ESK to
          such Buyers or to Distributor without the prior written approval
          of ESK.

                    VIII.     Product Liability Insurance

                         Distributor shall carry product liability
          insurance, covering the Products which it has modified prior to
          resale by it and ESK shall carry product liability insurance
          covering the Products which Distributor has not modified prior to
          resale by it, each in such amounts as shall be reasonably
          satisfactory to both parties from time to time.  In the event of
          any dispute between ESK and Distributor as to whether the amount
          of such insurance is adequate, such dispute shall be resolved by
          referral to an insurance broker mutually satisfactory to the
          parties.

                    IX.  Termination

                         A.    This Agreement may be terminated:

                              1.   At once by either party if the other
          party hereto commits a material breach or default under this
          Agreement, which breach or default shall not be remedied within
          30 days after the giving of notice thereof to the party in breach
          or default; or

                              2.   At once by either party if the other
          party hereto is unable to pay its debts as they fall due for a
          period of sixty (60) days or enters into liquidation or
          dissolution or becomes insolvent, or if a trustee or receiver is
          appointed for such party, whether by voluntary act or otherwise,
          or if any proceeding is instituted by or against such party under
          the provisions of any bankruptcy act or amendment thereto and is
          not dismissed within sixty (60) days, or if it enters into a
          voluntary arrangement with its creditors; or

                              3.   At once by ESK if (I) either direct or
          indirect control of the Common Stock and Series A Preferred Stock
          of Distributor is transferred, either voluntarily or
          involuntarily, to any person or entity other than the current
          control group; or (ii) if all or a substantial part of the assets
          of Distributor shall be sold in other than the ordinary course of
          business; or (iii) if Distributor attempts to assign this
          Agreement without ESK's prior written consent.

                         B.   It is expressly understood and agreed that
          neither party hereto is under any obligation to continue this
          Agreement in effect, nor to continue the distributorship
          arrangement established hereunder, after termination of this
          Agreement in accordance with this paragraph 9.  Both parties
          recognize the necessity of making expenditures in preparing to
          perform and in performing this Agreement, and they recognize the
          possibility and the likelihood of losses or damages resulting
          from its termination.  The parties nevertheless agree that
          neither party shall be liable to the other for termination of
          this Agreement in accordance with this paragraph 9, and each
          party specifically agrees not to hold the other liable for any
          losses or damages resulting from such termination, including, but
          not limited to, loss of or damage to investments, leases and
          sales, advertising and promotional activities, whether incurred
          in connection with the preparation to perform or the performance
          of this Agreement or in the expectation of its renewal or
          extension.

                         C.   After notice of termination is given by
          either party under this paragraph 9, ESK is entitled to restrict
          or even stop entirely deliveries of the Products to Distributor,
          including deliveries on orders already received at the time of
          notice of termination.  However, ESK is required to make the
          Products available to Distributor in order to enable Distributor
          to maintain its own legally binding delivery commitments existing
          before termination becomes effective, subject to proof thereof
          being given by Distributor to ESK.

                         D.   Upon termination of this Agreement, whether
          pursuant to this paragraph 9 or by expiration of the term hereof,
          Distributor shall deliver to ESK at once a complete list of all
          customers of Distributor (including the name and address thereof
          only) who have bought any Products from Distributor at any time
          in the three (3) years preceding such termination, and Distribu-
          tor acknowledges that ESK shall have the right directly or
          through another distributor or agent to approach such customers
          and to solicit purchases by them of the Products, and ESK shall
          have the option, exercisable within a period of sixty (60) days
          following the effective date of termination, to repurchase from
          Distributor such of the inventory of the Products as it shall
          determine, at Distributor's cost therefor, without interest. 
          "Distributor's cost" shall mean the price paid by Distributor to
          ESK for such Products plus all costs incurred by Distributor to
          lay down the Products in its facilities, less an appropriate
          allowance for depreciation, obsolescence or damage.

                         E.   Upon termination of this Agreement, ESK shall
          have the option to reclaim all advertising and printed matter, if
          any, made available by it to Distributor.

                    X.   Special and Consequential Damages

                         The parties agree that the remedies provided in
          this Agreement are adequate, and that therefore neither party
          shall be liable to the other for special or consequential damages
          arising from the breach of any obligation hereunder or for any
          other reason whatsoever other than as specifically provided for
          herein.

                    XI.  Miscellaneous Provisions

                         A.   The relationship between Distributor and ESK
          is that of independent contractor and not of employer-employee or
          principal-agent.  Distributor is not the legal representative of
          ESK nor is ESK the legal representative of Distributor, and
          neither shall hold itself out as such.  Neither Distributor nor
          ESK has the right or authority to assume or undertake any
          obligation or make any representation on behalf of the other.

                    B.   Both parties acknowledge and agree that any
          internal and confidential knowledge or information or trade
          secrets about the activities, processes or products of either
          party hereto which the other shall receive or learn in the
          performance of its obligations hereunder shall be kept strictly
          confidential and secret, even after termination of this
          Agreement, and shall not be used by such other party hereto in
          its own business without the prior written consent of the owner
          of the same or unless pursuant to a separate license agreement
          between the parties or unless the same shall have become known in
          the industry through no fault of the party seeking to use the
          other's information or unless the same shall have become known to
          such party from other sources not involving a breach of any
          contractual obligation.  Each party shall be responsible for
          seeing that its own employees and agents observe the agreements
          of this Section 11.2.

                         C.   ESK agrees to inform Distributor of all
          inquiries and orders received by it directly from the Territory
          for delivery in the Territory of the Products.  In return,
          Distributor shall send to ESK all inquiries and orders received
          by it either for delivery outside the Territory or in regard to
          customers who wish to deal directly with ESK.

                         D.   This Agreement, including any claims arising
          out of or connected with this Agreement, may not be assigned by
          Distributor except with the prior written consent of ESK.

                         E.   The failure of any party hereto to require
          the performance of any term of this Agreement or waiver by any
          party of any breach under this Agreement shall not prevent a
          subsequent enforcement of such term nor be deemed waiver of any
          subsequent breach.  Subject to the provisions of paragraph 9
          hereof in regard to notice of default and right to cure, time is
          of the essence in the performance of each party's obligations
          hereunder. 

                         F.   The captions set forth herein are for
          convenience of reference only and shall not be considered as part
          hereof or in any way to limit or amplify the terms and provisions
          hereof.

                         G.   Neither of the parties hereto shall be
          responsible for or liable to the other party for any damage or
          loss of any kind, directly or indirectly, resulting from fire,
          flood, explosion, riot, rebellion, revolution, war, labor trouble
          (whether or not due to the fault of any party hereto),
          requirements or acts of any government or subdivisions thereof,
          mechanical breakdown or any other causes beyond the reasonable
          control of the party.  The occurrence and the termination of such
          force majeure shall be promptly communicated to the other
          parties.


                    XII. Notices

                         Any notice required or permitted to be given
          hereunder shall be in writing and shall be deemed to have been
          given after the same has been mailed by registered or certified
          mail (air mail if overseas), return receipt requested, to the
          respective addresses appearing on the first page of this
          instrument, or to such other addresses as the parties may from
          time to time designate in writing.

                    XIII.     Controversies

                         Any controversy or claim arising out of or
          relating to this Agreement, or the negotiation or breach thereof,
          shall be settled by arbitration in accordance with the Rules of
          the American Arbitration Association, and the judgment upon the
          award rendered by the Arbitrator(s) may be entered in any court
          having jurisdiction thereof.  The arbitration shall be held in
          such location as shall be mutually agreeable to the parties, but
          in the absence of such agreement in New York, New York.

                    XIV. Alterations of the Contract

                         Alterations of and amendments to this Agreement
          must be confirmed by both parties in writing in order to be
          binding.

                    XV.  Severability of the Contract

                         Should any provision of this contract lack
          validity or become void, the remaining provisions hereof will
          remain in force.

                    XVI. Applicable Law

                         This contract is subject to and shall be construed
          in accordance with the law of the State of New York.

                    IN WITNESS WHEREOF, the parties have duly executed this
          Agreement this 27th day of April, 1984.

          ELEKTROSCHMELZWERK KEMPTEN GMBH    EXOLON-ESK COMPANY         


          S/ Norman Pfingstl                 S/ Kurt M. Hertzfeld         


                                      APPENDIX A


          Silicon carbide
          except submicrofine powder
          and sintered shapes


          ELEKTROSCHMELZWERK KEMPTEN GMBH         EXOLON-ESK COMPANY


          S/ Norman Pfingstl                      S/ Kurt M. Hertzfeld    



                      TERMS AND CONDITIONS OF SALE AND DELIVERY

                              I.   Any delivery dates given to Distributor
          by ESK are estimates only, and shall not bind ESK to ship or
          deliver the Products on the dates indicated, although ESK will
          use its best efforts to meet such delivery dates, and ESK shall
          not be liable for any direct, indirect, consequential or special
          damages as a result of delay.  In the event that ESK fails to
          make delivery within the time agreed upon by ESK and Distributor,
          and within a reasonable period thereafter, Distributor's sole
          remedy shall be to cancel its order.  ESK reserves the right to
          make partial shipments of the Products ordered and to submit
          separate invoices to Distributor for such partial shipments.

                    II.  If Distributor shall default in the timely
          performance of its obligations in regard to any order or invoice,
          or any partial shipment under a larger order, ESK may suspend its
          performance under any subsequent order or in regard to any
          further partial shipments under such larger order unless and
          until Distributor shall have cured such default.

                    III. Distributor shall have no right to set off any
          amount or claim against any amount due and owing to ESK from
          Distributor unless such amount or claim is fully liquidated and
          is uncontested or is the subject of a final nonappealable
          judgment.

                    IV.  The term "force majeure" means any cause not
          within the reasonable control of the party affected thereby,
          including without limitation acts of God, strikes or labor
          disturbances, war, embargoes, shortages of raw materials or
          transportation or fuel or electric power, failure or destruction
          of production facilities, and any governmental decree.  The
          occurrence of force majeure shall not excuse either party from
          the performance of its obligations to the other party, but shall
          only suspend the same during the continuance of the force
          majeure.  If any force majeure shall prevail for 45 consecutive
          days, either party shall have the right to terminate at once by
          written notice to the other party that portion of any order
          between Distributor and ESK which is still fully executory on the
          part of both parties.  Neither party shall be liable to the other
          party for any direct, indirect, consequential, incidental or
          special damages arising out of or relating to the suspension or
          termination of any contractual relationship between the parties
          as a result of force majeure.

                    V.   The provisions hereof may be changed by specific
          agreement as regards any individual case.


          <PAGE>

                                        27 April 1984

          Exolon-ESK Company
          1000 East Niagara Street
          Tonawanda, New York  14150

          Gentlemen:

                    This letter is being delivered to you in conjunction
          with the execution and delivery of that certain Restated License
          Agreement dated 26 April 1984 among Elektroschmelzwerk Kempten
          ("ESK"), ESK Corporation ("ESK Corp."), and The Exolon Company
          ("Exolon"), and also that certain Distributorship Agreement of
          even date herewith between ESK and Exolon-ESK Company
          ("Exolon-ESK"), the surviving corporation after the merger today
          of ESK Corp. and Exolon.

                    We wish to assure you that ESK has no current intention
          upon the termination of the Distributorship Agreement to sell or
          offer to sell in the Territory (as defined in the Restated
          License Agreement), either directly or indirectly, any silicon
          carbide crude or grain products covered by the Distributorship
          Agreement and currently manufactured and offered for sale by
          Exolon-ESK in the Territory other than through Exolon-ESK as
          distributor or sales representative so long as our parent
          company, Wacker-Chemie GmbH, is directly or indirectly a 50%
          shareholder of Exolon-ESK and Wacker Chemie has the right
          directly or indirectly to nominate and elect one-half of the
          members of the board of directors of Exolon-ESK.  In addition, we
          wish to advise you that we do not believe that ESK will have any
          intention in the future to sell such products in the Territory
          other than through Exolon-ESK as distributor or sales
          representative so long as Wacker-Chemie GmbH directly or
          indirectly is a 50% shareholder of Exolon-ESK and has the right
          directly or indirectly to nominate and elect one-half of the
          members of the board of directors of Exolon-ESK, unless
          extraordinary conditions shall arise, extraordinary conditions
          which do not currently exist and which we do not currently
          foresee, which would make such sales after the termination of the
          Distributorship Agreement by ESK in the Territory compelling.

                    In acting under this letter agreement, we would expect
          to base our conduct on concepts of fair dealing ("Treu und
          Glauben"),

          Accepted:                     Very truly yours,

          Exolon-ESK Company            Elektroschmelzwerk Kempten GmbH

          By S/ Kurt M. Hertzfeld       By S/ Norman Pfingstl           


          <PAGE>
                                                                EXHIBIT 10I



                              INDEMNIFICATION AGREEMENT


                    AGREEMENT, made as of the 15th day of December, 1984,
          by and between EXOLON-ESK COMPANY (the "Company"), with its
          principal office at 1000 East Niagara Street, Tonawanda, New York
          14150; and WACKER CHEMICAL CORPORATION ("WCC"), with its
          principal office at 964 Third Avenue, New York, New York 10022.


                                 W I T N E S S E T H:


                    WHEREAS, WCC has heretofore entered into an
          indemnification agreement with respect to the tax exempt status
          of interest on the $8,000,000 Industrial Development Revenue
          Bonds, Series 1984 (ESK Corporation Project), dated February 15,
          1984, (the "ESK Bonds"); and

                    WHEREAS, the ESK Bonds are being refunded through the
          issuance of $8,000,000 Industrial Revenue Bonds, Series 1984
          (Exolon-ESK Company Project) (the "Bonds") and it is agreed that
          such indemnification shall be continued with respect to the
          Bonds;

                    NOW, THEREFORE, the parties hereby agree as follows:

                    1.   WCC will pay to the Company any Additional
          Payments, as hereinafter defined, due to the holders of the Bonds
          or to an indenture trustee of the Bonds with respect to the
          period ending January 15, 1999, inclusive, provided that the
          amounts payable to the Company with respect to the period
          beginning January 16, 1994, and ending January 15, 1999, shall in
          no event exceed three percent (3%) of the average principal
          amount of the Bonds outstanding during such period.  For this
          purpose, the term "Additional Payments" shall mean any amounts
          which may from time to time be due as a result of the interest on
          the Bonds becoming taxable for Federal income tax purposes
          because the $10,000,000 capital expenditure limitation of Section
          103(b)(6)(D) of the Internal Revenue Code of 1954, as amended,
          was exceeded with respect to the $8,000,000 Industrial Project
          Revenue Bonds, Series A (ESK Corporation Project), heretofore
          refunded by the ESK Bonds, but only to the extent such amounts do
          not constitute principal of the Bonds and are in excess of the
          amounts which would be due under the Bonds if said $10,000,000
          capital expenditure limitation had not been exceeded.

                    2.   WCC shall have all of the rights of the Company
          with respect to contesting any claim that interest on the Bonds
          is taxable during the period ending January 15, 1994, and shall
          be entitled to participate in contesting any such claim for the
          period January 16, 1994, to January 15, 1999.

                    3.   Any notice or other communication required or
          permitted hereunder shall be in writing and shall be deemed to
          have been given upon mailing by registered or certified mail (air
          mail if overseas), return receipt requested, to the respective
          addresses appearing on the first page of this Agreement, or to
          such other addresses as the parties may from time to time
          designate in writing.

                    4.   This Agreement may be executed in one or more
          counterparts and together shall constitute but one and the same
          agreement.  This Agreement may be amended only by a writing
          executed by the parties hereto.  This Agreement shall be governed
          by and construed in accordance with the laws of the State of
          New York.

                    5.   Nothing in this Agreement shall affect any of the
          obligations of WCC under the Indemnification Agreement dated
          April 26, 1984, between it and The Exolon Company (now Exolon-ESK
          Company), which obligations shall continue in full force and
          effect.

                    IN WITNESS WHEREOF, the parties have caused this
          Agreement to be duly executed as of the day and year first
          hereinabove written.

                                        WACKER CHEMICAL CORPORATION  

                                        By:S/ Harold Seeberg         
                                           Harald Seeberg, President

                                        EXOLON-ESK COMPANY          


                                        By:S/ L. Harrison Thayer II  


          <PAGE>


                                                                 Exhibit 11
                         Exolon-ESK Company and Subsidiaries
                          Computation of Earnings Per Share
                        (In Thousands, Except Per Share Data)

                                                        Years Ended
                                                        December 31,
                                                  1995      1994      1993
                                                ______    ______    ______

           Net earnings                         $3,462    $1,516       $33

           Less Preferred Stock Dividends:            
               Series A                           (22)      (22)      (22)

               Series B                           (22)      (22)      (21)
                                                ______    ______    ______

           Undistributed earnings (loss)        $3,418    $1,472     ($10)
           Net earnings (loss) attributable
           to:

               Common Stock (50.0% in 1993,     $1,709      $736      ($5)
               1994 and 1995)
               Class A Common Stock (50.0%      $1,709      $736      ($5)
               in 1993, 1994 and 1995)          ______    ______    ______

                                                $3,418    $1,472     ($10)
                                                ======    ======    ======

           Net earnings (loss) per share of
           Common Stock:                         $3.55     $1.53   ($0.01)
               Primary
               Fully Diluted                     $3.44     $1.50  $0.03(a)

           Net earnings (loss) per share of
           Class A Common Stock:

               Primary                           $3.33     $1.44   ($0.01)

               Fully Diluted                     $3.24     $1.42  $0.03(a)

           Weighted Average Shares
           Outstanding:
               Primary:
                                               482,000   482,000   482,000
               Common Stock

               Class A Common Stock            513,000   513,000   513,000
               Fully Diluted:

               Common Stock                    504,000   504,000   504,000

               Class A Common Stock            535,000   535,000   535,000

          (a)  Assumed conversion of Preferred Stock would have anti
               dilutive effect in computations and therefore fully diluted
               earnings per share is not presented on the face of the
               income statement for the year ended December 31, 1993.



          <PAGE>                                                 Exhibit 22

                            SUBSIDIARIES OF THE REGISTRANT

                The subsidiaries listed below have been included in the
           Consolidated Financial Statements of the Registrant.  See Note
           1 of Notes to Consolidated Financial Statements.

            Subsidiaries of the Registrant       Place of      Percentage
                                              Incorporation       Owned
           Exolon-ESK Company of Canada,     Dominion of          100%
           Ltd.                              Canada

           Norsk-Exolon A/S                  Kingdom of           100%
                                             Norway
           Exolon-ESK International Sales    U.S. Virgin          100%
           Corp.                             Islands