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Eselco Inc – ‘PRE 14A’ for 5/6/97

As of: Wednesday, 3/19/97 · For: 5/6/97 · Accession #: 912057-97-9406 · File #: 0-17736 · Correction: This Filing was Corrected by the SEC on 5/6/97. `®`

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 3/19/97  Eselco Inc                        PRE 14A®    5/06/97    1:37K                                    Merrill Corp/FA

Preliminary Proxy Solicitation Material — Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: PRE 14A     Preliminary Proxy Solicitation Material               15     61K 

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SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.    ) 

Filed by the Registrant / /                                             
Filed by a party other than the Registrant / /                          

Check the appropriate box:                                              
/X/  Preliminary Proxy Statement                                        
/ /  Confidential, for Use of the Commission Only (as permitted by Rule 
14a-6(e)(2))                                                  
/ /  Definitive Proxy Statement                                         
/ /  Definitive Additional Materials                                    
/ /  Soliciting Material Pursuant to Section 240.14a-11(c) or Section   
240.14a-12                                                    

ESELCO, INC         
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

ESELCO, INC         
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):                              

/X/  No fee required                                                            

/ /  Fee computed on table below per Exchange Act Rules 14a-6(i)(1)             
and 0-11                                                              

(1) Title of each class of securities to which transaction applies:     

        ------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:        

        ------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed    
     pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):      

        ------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:                    

        ------------------------------------------------------------------------
(5) Total fee paid:                                                     

        ------------------------------------------------------------------------

/ / Fee paid previously with preliminary materials.                             

/ / Check box if any part of the fee is offset as provided by Exchange Act Rule 
0-11(a)(2) and identify the filing for which the offsetting fee was paid
  previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.                     

(1) Amount Previously Paid:                                             

        ------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:                       

        ------------------------------------------------------------------------
(3) Filing Party:                                                       

        ------------------------------------------------------------------------
(4) Date Filed:                                                         

        ------------------------------------------------------------------------

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THE MANAGEMENT URGES STOCKHOLDERS TO SIGN AND RETURN
 THE ENCLOSED BLUE PROXY CARDS AS PROMPTLY AS POSSIBLE
 IN THE RETURN ENVELOPE PROVIDED FOR THAT PURPOSE.

[LOGO]

 725 East Portage Avenue
Sault Ste. Marie, Michigan 49783

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
 TO BE HELD ON MAY 6, 1997

   Notice is hereby given that the Annual Meeting of Stockholders of ESELCO,
Inc., a Michigan corporation (the "Company"), will be held on Tuesday, May 6,   
1997, at 10:00 a.m. (Eastern Daylight Time), at the Cisler Center, located at   
Lake Superior State University,  650 W. Easterday Avenue, Sault Ste. Marie,     
Michigan, 49783, for the following purposes:                                    

1.   To elect two members of the Board of Directors for a three-year term       
expiring in 2000.                                                     

These members are:
William R. Gregory
James S. Clinton

2.   Considering and acting upon a proposal to amend the Restated Articles of   
Incorporation to increase the number of authorized common shares from 
3,000,000 to 9,840,000 shares.                                        

3.   To transact other business as may properly come before the meeting, or any 
adjournment thereof.                                                  

   The Board of Directors has fixed the close of business March 20, 1997, as
the record date for the determination of the Company's Stockholders entitled to 
notice of, and to vote at, the meeting.                                         

We cordially invite all Stockholders to attend the meeting.           

              By Order of the Board of Directors

Donald C. Wilson    
Secretary           
Dated:  March 31, 1997                                                          

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 PROXY STATEMENT

     The Board of Directors of ESELCO, Inc. (the "Company"), solicits your proxy
for use at this Annual Meeting.  You may revoke your proxy at any time before it
is exercised, provided that prior to exercise of the proxy the Company received 
a written notice of such revocation or such revocation is made in open meeting. 
Distribution of this Proxy Statement and the accompanying form of Proxy began on
or about March 31, 1997.                                                        

The presence in person, or by properly executed returned and unrevoked
proxies, of Shareholders entitled to cast a majority of votes shall constitute a
quorum for the transaction of business at the Annual Meeting.  Shares with      
respect to which votes are withheld, abstentions are cast, or there are broker  
nonvotes will be considered present at the Annual Meeting for purposes of       
determining a quorum.                                                           

 ELECTION OF DIRECTORS

The Company's Articles of Incorporation provide for three classes of  
Directors.  The term of office of each class is three years, and the term of one
class expires each year.  The Company's By-laws, like those of Edison Sault,    
provide for a Board of Directors with at least five, but no more than seven,    
members.  The classes will comprise as nearly equal a number of Directors as    
possible. The Board of Directors will assign any newly created directorship to  
one of the classes so that the number of Directors in each class will remain as 
nearly equal as possible.  Therefore, approximately one-third of the Board of   
Directors will be elected at each Annual Meeting of Shareholders.               

     The Company's Board of Directors is presently composed of five individuals.
Two Directors are to be elected at this Annual Meeting to hold office for a term
of three years or until their successors are fully elected and qualified.   It  
is the intention of the persons named in the enclosed Form of Proxy (unless     
otherwise instructed by the Shareholder) to vote for the election of the persons
listed below who are presently Directors of the Company.  Directors are elected 
by a plurality of the votes cast.  In case of a vacancy on the Board of         
Directors, the remaining Directors (by a majority vote) could elect a successor 
for a term of office continuing until the next election of Directors by         
shareholders.  Consequently, votes withheld and broker nonvotes with respect to 
the election of Directors will have no impact on the election of Directors.     

   If a nominee is unable to serve or for good cause will not serve, or if a
vacancy should occur before the election (which events are not anticipated), the
proxies may be voted for a person selected by the Board of Directors.  The only 
equity security of the Company or Edison Sault owned by the people listed below 
is the Common Stock of the Company.                                             

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--------------------------------------------------------------------------------------------------------------------------
    NAME, POSITION WITH THE COMPANY                                              AMOUNT AND NATURE OF         PERCENT     
    AND BUSINESS EXPERIENCE DURING                               DIRECTOR        BENEFICIAL OWNERSHIP           OF        
      THE PAST FIVE YEARS (1)                            AGE     SINCE(1)        FEBRUARY 17, 1997(2)         CLASS       
--------------------------------------------------------------------------------------------------------------------------
                                                                                                                          
NOMINEES FOR DIRECTOR (TERM EXPIRING IN 2000)                                                                             
--------------------------------------------------------------------------------------------------------------------------
WILLIAM R. GREGORY, Director                             57       1972             40,224.85 Shares            2.6%(6)    
President of ESELCO, Inc., and Edison Sault                                                                               
Director - First of America, Michigan NA                                                                                  
Sault Ste. Marie,  Michigan                                                                                               
--------------------------------------------------------------------------------------------------------------------------
JAMES S. CLINTON, Director                               56       1975             8,942.00 Shares             (3)(4)     
Chairman, President, & CEO Leggoons, Inc.                                                                                 
  (Consumer Products Manufacturer)                                                                                        
Omaha, Nebraska                                                                                                           
--------------------------------------------------------------------------------------------------------------------------
(TERM EXPIRING IN 1998)                                                                                                   
--------------------------------------------------------------------------------------------------------------------------
THOMAS S. NURNBERGER, Chairman                           78       1977             33,537.78 Shares             2.2%      
Chairman of the Board of ESELCO, Inc., and                                                                                
  Edison Sault Electric Company                                                                                           
Montague, Michigan                                                                                                        
--------------------------------------------------------------------------------------------------------------------------
ALLAN L. GRAUER, Vice Chairman                           66       1986              4,671.43 shares             (3)       
Vice Chairman of ESELCO, Inc., and Edison                                                                                 
  Sault Electric Company                                                                                                  
Counsel to the firm of Kutak Rock                                                                                         
Omaha, Nebraska                                                                                                           
--------------------------------------------------------------------------------------------------------------------------
(TERM EXPIRING IN 1999)                                                                                                   
--------------------------------------------------------------------------------------------------------------------------
DAVID K. EASLICK, Director                               76       1986                 2,660 shares             (3)       
Director of Michigan Bell Telephone Company                                                                               
North Naples, Florida                                                                                                     
--------------------------------------------------------------------------------------------------------------------------
NON-DIRECTOR                                                                                                              
--------------------------------------------------------------------------------------------------------------------------
DONALD SAWRUK, Executive Vice President                  49         *              17,465.91 shares          1.1% (6)     
  & COO                                                                                                                   
ESELCO, Inc., and Edison Sault Electric                                                                                   
Company                                                                                                                   
Sault Ste. Marie, Michigan                                                                                                
--------------------------------------------------------------------------------------------------------------------------
All Directors and Officers as a Group (13 persons)                                162,183.59 Shares         10.5%(5)(6)   
--------------------------------------------------------------------------------------------------------------------------

(1)  Includes time as Director and Officer of subsidiary and predecessor -      
Edison Sault.                                                         
(2)  Inclusive of the individual's beneficial interest in common shares held by 
the Employee Incentive Investment and Stock Ownership Plan because the
     individuals have the right to vote such shares. Mr. Hubbard, Vice President
   - Finance of the Company, as Trustee of the Bargaining Unit Savings Plan,
 has the power to vote and the power to sell all 28,294.55 shares in the
   plan per the direction of the Savings Plan Board.  The shares held in the
   Bargaining Unit Savings Plan are not included in this table.  Mr. Hubbard
also votes the unallocated shares in the ESOP.                        
(3)  Less than 1%.                                                              
(4)  Includes 6,051 shares in C.E. Clinton Family Trust stock account for which 
Mr. Clinton is the trustee.                                           
(5)  Includes the Vice President - Engineering, Assistant Vice President -      
Engineering, Assistant Vice President - Operations, and Assistant Vice
    President - Information Systems, who are officers of Edison Sault, but are
    not officers of the Company, who collectively own 22,210 shares of Company
stock, which includes shares vested to their accounts in the Employee 
Incentive Investment and Stock Ownership Plan.                        
(6)  Includes shares administered and awarded through the Restricted Stock Bonus
 Plan approved by shareholders at the 1996 ESELCO, Inc., Annual Meeting.

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The nominees for Directors are not employed by a company that was     
affiliated with the Company (except as shown above for Edison Sault) during the 
past five years.                                                                

 Except as described above, each of the identified beneficial owners has
sole voting and investment power as to all of the shares shown as beneficially  
owned, with the exception of those held jointly with their spouses or directly  
by their spouses, minor children, or certain other relatives or relatives of    
their spouses.  None of the shares shown is a share as to which the person is   
shown as beneficial owner because he has the right to acquire beneficial        
ownership in the future.                                                        

There are no family relationships among the Directors and executive   
officers.                                                                       

 MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS

The Board of Directors has the responsibility for establishing broad  
corporate policies and for the overall performance of the Company, although it  
is not involved in day to day operating details.  Members of the Board are kept 
informed of the Company's business by various reports and documents sent to them
each month, and by operating and financial reports made at Board and Committee  
meetings by the President and other officers.  The Company and Edison Sault have
identical Boards of Directors.  The Committees described below include          
Committees of the Edison Sault Board.                                           

     The Board held five meetings in 1996.  There was one Special Meeting of the
Board during 1996.  Each Director attended 75% or more of the aggregate number  
of meetings of the Board and Committees on which he served in 1996.             

    The Finance Committee has the responsibility of periodically reviewing the
financial needs of the Company and the methods of providing funds for such      
needs.  The Committee is composed of James S. Clinton (Chairman), Allan L.      
Grauer, and William R. Gregory.                                                 

    The Salary and Compensation Committee recommends salaries and compensation
for all officers to the Board of Directors.  The Committee is composed of Thomas
S. Nurnberger as Chairman, Allan L. Grauer, David K. Easlick, and James S.      
Clinton.  The Committee held one meeting in 1996.                               

The Audit Committee meets with management to consider the adequacy of 
internal controls and the objectivity of financial reporting.  Both internal    
personnel and the independent public accountants meet periodically  with the    
Audit Committee and always have unrestricted access to the Committee.  The      
Committee consists of the following non-employee Directors: David K. Easlick    
(Chairman), James S. Clinton, and Allan L. Grauer.  The Committee held one      
meeting in 1996.                                                                

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The Pension Committee advises the Board of Directors in matters that  
pertain to the Edison Sault pension plans.  The Committee is composed of Allan  
L. Grauer (Chairman), William R. Gregory, and David K. Easlick.                 

     The Strategic Planning Committee is chaired by William R. Gregory, assisted
by Thomas S. Nurnberger, and has the purpose of identifying key operational     
issues to the Board of Directors.                                               

    The Restricted Stock Bonus Plan Committee is responsible for administering
and implementing the Restricted Stock Bonus Plan approved by the shareholders of
ESELCO, Inc., at the 1996 Annual Shareholder Meeting.  This Committee consists  
of the following non-employee Directors:  David K. Easlick (Chairman), Allan L. 
Grauer, and James S. Clinton.                                                   

The Board of Directors does not have a Nominating Committee.          

   The information set forth as to the principal occupations during the past
five years of the Directors, as to their beneficial ownership of securities of  
the Company, and as to other information not of record with the Company, is     
based upon information furnished to the Company by said Directors.              

 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The following table sets forth, as of February 17, 1997, information  
concerning ownership of the voting securities (Common Stock) of the Company by  
the only persons whom the Company knows to own of record or beneficially more   
than 5% of any class of such securities:                                        
--------------------------------------------------------------------------------
 TITLE OF       NAME AND ADDRESS OF       AMOUNT AND NATURE       PERCENT OF
CLASS        BENEFICIAL OWNER (1)    OF BENEFICIAL OWNERSHIP       CLASS
--------------------------------------------------------------------------------
Common         Cede & Co.                                483,670         31.3%  
Box 20                                            
Bowling Green Station                             
New York NY 10004                                 
--------------------------------------------------------------------------------

(1)  CEDE & CO. IS THE NOMINEE FOR THE DEPOSITORY TRUST CO. IN NEW YORK.  THE   
   COMPANY HAS BEEN ADVISED THAT NONE OF THESE SHARES ARE OWNED BENEFICIALLY
 BY CEDE & CO., BUT ARE HELD FOR THE ACCOUNT OF ITS CUSTOMERS, INCLUDING
EDISON SAULT'S PENSION PLANS.                                         

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SALARY AND COMPENSATION COMMITTEE REPORT

The Salary and Compensation Committee of the Board of Directors (the  
"Committee") is composed of Chairman Thomas S. Nurnberger and outside Directors 
Allan L. Grauer, James S. Clinton, and David K. Easlick.  The Committee is      
responsible for setting and administering the policies that govern both annual  
compensation and other remuneration for the executive officer group within the  
Company.  The positions included in the executive officer group include the     
Chairman of the Board, President, Executive Vice President, Corporate Secretary,
Vice President - Finance, Vice President - Engineering, Vice                    
President/Treasurer, Assistant Vice President - Engineering, Assistant Vice     
President - Operations, and Assistant Vice President - Information Systems.     

  The Compensation Committee evaluates the President of the Company, along
with the other executive officers, concerning their quality of leadership.      
Performance results are based on meeting goals within the financial, regulatory,
service, personnel, and community areas.  Salary levels are established after   
comparing the executive officer positions with comparable companies in industry 
and the community.                                                              

By: Thomas S. Nurnberger  By: Allan L. Grauer  By: James S. Clinton             
By:  David K. Easlick                                                           

REMUNERATION OF DIRECTORS AND OFFICERS

     The Company has three subsidiaries - Edison Sault Electric Company ("Edison
Sault"); Northern Tree Service, Inc.; and ESEG, Inc.  The Company is a holding  
company and does not engage in any business on its own.  Officers' salaries and 
Directors' fees are paid by Edison Sault only.  Therefore, the following        
information is provided with respect to Edison Sault.                           

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The base compensation for 1996 for each person whose cash compensation
exceeded $100,000 and for all executive officers as a group was as follows:     

                                                        [Enlarge/Download Table]


                                  SUMMARY COMPENSATION TABLE                                                         

                                     ANNUAL COMPENSATION                     LONG-TERM COMPENSATION                  
----------------------------------------------------------------      -----------------------------------------------
                                                                               AWARDS            PAYOUT              
                                                                      ----------------------   -----------           
                                                          OTHER          RE-                                         
                                                         ANNUAL       STRICTED    SECURITIES               ALL OTHER 
      NAME AND                                           COMPEN-        STOCK     UNDERLYING      LTIP      COMPEN-  
      PRINCIPAL               SALARY       BONUS         SATION       AWARD(S)     OPTIONS/      PAYOUT     SATION   
      POSITION      YEAR       ($)          ($)          ($)(1)        ($)(2)       SARS(#)        ($)        ($)    
         (a)         (b)       -C-          (d)            (e)           (f)          (g)          (h)        (i)    
---------------------------------------------------------------------------------------------------------------------
                                                                                                                     
---------------------------------------------------------------------------------------------------------------------
W.R. Gregory                                                                                                         
President & CEO     1996     $167,077       -0-       $ 19,790(i)     $222,960        -0-          -0-        -0-    
---------------------------------------------------------------------------------------------------------------------
W.R. Gregory                                                                                                         
President & CEO     1995     $159,903       -0-       $ 18,103           -0-          -0-          -0-        -0-    
---------------------------------------------------------------------------------------------------------------------
W.R. Gregory                                                                                                         
President & CEO     1994     $152,577       -0-       $  9,779           -0-          -0-          -0-        -0-    
---------------------------------------------------------------------------------------------------------------------
D. Sawruk                                                                                                            
Exec. V.P. & COO    1996     $116,538       -0-       $ 10,637(ii)    $222,960        -0-          -0-        -0-    
---------------------------------------------------------------------------------------------------------------------
D. Sawruk                                                                                                            
Exec. V.P. & COO    1995     $106,538       -0-       $ 10,923           -0-          -0-          -0-        -0-    
---------------------------------------------------------------------------------------------------------------------
D. Sawruk                                                                                                            
Exec. V.P. & COO    1994     $ 93,077       -0-       $ 11,662           -0-          -0-          -0-        -0-    
---------------------------------------------------------------------------------------------------------------------


(1)       Other includes group life insurance, transportation allotment, and    
contributions to savings plans.                             
(1)(i)    Of William R. Gregory's other compensation totaling $19,790 for 1996, 
          a vehicle allotment in an amount of $7,746 and an amount of $10,612 in
     contributions to his savings plan are included in the total other
annual compensation.                                        
(1)(ii)   Of Donald Sawruk's other compensation totaling $10,637 for 1996,  an  
         amount of $7,497 in contributions to his savings plan are included in
the total other annual  compensation.                       
(2)       The dollar value of shares listed in the table was based upon the     
        number of shares multiplied by the market value of the shares on the
     date of award.  The dollar value of the shares awarded to Messrs.
  Gregory and Sawruk as of December 31, 1996, was $203,040 each.

  The Company has established the Pension Plan for Management Employees of
Edison Sault Electric Company, for participants who retire at age 62, assuming  
various combinations of service and compensation.  The annual pension retirement
income after reduction for social security benefits may not exceed $90,000 for  
someone retiring at age 65 (or social security retirement, if later), which     
amount is subject to increases after 1987 to reflect increases in the cost of   
living in accordance with regulations prescribed by the Secretary of the        
Treasury.                                                                       

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   Employees of Edison Sault not covered by a collective bargaining contract
may become participants in the Pension Plan.  To become a participant, such an  
employee has also to complete one year of continuous service of at least 1,000  
hours of service as a permanent full-time employee of Edison Sault.  Under the  
plan's current benefit formula, which applies to services beginning December 31,
1991, the annual normal retirement allowance payable to a member on his normal  
retirement date will be equal to 1.2% of the member's final average             
compensation, multiplied by his years of credit service up to 35 years          
(including pre-1991 service) and .75% of the member's final average compensation
multiplied by his years of service over 35 years.  Benefits attributable to     
service prior to December 31, 1991, were calculated under the prior formula and 
required transition rules for the 1989-1990 plan years and will reflect changes 
in the final average compensation prior to  retirement.  The final average      
compensation means the average of the highest five full years of compensation   
paid to the member.  For a member who retires with less than five years of      
compensation, such final average compensation shall be the average of the       
compensation for those lesser number of years.  The compensation covered by the 
Plan is the regular remuneration paid to an employee for services rendered to   
Edison Sault during a Plan year, excluding any bonuses, pay for overtime, and   
special pay.  The normal retirement allowance is payable monthly to the member  
during his life. After the member's death, an allowance of one-half the         
unreduced normal retirement allowance is payable to the member's spouse under   
most circumstances.                                                             

The following table contains maximum annual total projected pension   
benefits, including amounts attributable to the Supplemental Plan for           
participants retiring at age 62.                                                

----------------------------------------------------------------                
Pension Benefits Payable at Age 62                  
----------------------------------------------------------------                
Final Average                                                                   
Compensation                 Years of Credited Service                          
----------------------------------------------------------------                
20           25           30         35     
----------------------------------------------------------------                
$ 60,000     $ 19,200     $ 22,800     $ 26,400    $ 30,000           
----------------------------------------------------------------                
75,000       24,000       28,500       33,000      37,500         
----------------------------------------------------------------                
90,000       28,800       34,200       39,600      45,000         
----------------------------------------------------------------                
120,000       38,400       45,600       52,800      60,000          
----------------------------------------------------------------                
150,000       50,100       59,600       69,200      78,700          
----------------------------------------------------------------                
200,000       70,000       83,500       97,000     110,500          
----------------------------------------------------------------                

(1)  During 1996 Mr. Gregory and Mr. Sawruk were credited with 29 and 26 years  
of service, respectively,  to Edison Sault Electric Company.          

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Edison Sault also maintains an unfunded non-qualified Supplemental    
Executive Retirement Plan which covers all executive officers. The Supplemental 
Plan provides three layers of benefits. The first layer pays the difference, if 
any, between the maximum allowable benefit and the Pension Plan benefit.  The   
second layer  preserves the benefit levels produced by the Pension Plan formula 
in effect prior to December 31, 1991.  The third layer provides up to five years
of prior service credit for related employment prior to joining Edison Sault.   
Messrs. Nurnberger, Gregory, Hubbard, Beedy, Sawruk, Boeckman, Wilson, Maas,    
Jirikovic, Schemanski are covered by the Supplemental Plan.                     

    Edison Sault has an Employee Incentive Investment and Stock Ownership Plan
which is a qualified plan for federal tax purposes. The purposes of the Plan are
to stimulate interest in the improvement and progress of Edison Sault by        
encouraging ownership of the Company Common Stock and to permit tax deferred    
employee contributions under Section 401(k) of the Internal Revenue Code.       
Subject to statutory limits, Plan participants may contribute on either a pre-  
tax or a post-tax basis through payroll deduction from 2% to 12% of their       
earnings to be invested at the employee's election among a number of investment 
funds offered by the Plan.  For any amount the employee contributes up to 8% of 
earnings, Edison Sault may contribute an additional amount, depending on        
profitability.  Of the Edison Sault 1996 contributions, $10,612, $7,497, and    
$46,398 were unconditionally vested for Mr. Gregory, Mr. Sawruk, and the        
executive officers as a group, respectively.                                    

    Directors who are not officers of Edison Sault are compensated at the rate
of $1,367 per month.  During 1996, there was one Special Meeting for which the  
non-employee Directors of the Company were paid a fee of $1,000.  Directors who 
are officers of Edison Sault receive no fees for service on the Board of        
Directors.                                                                      

   Directors who are not employees of ESELCO, Inc., or its subsidiaries, are
eligible to participate in the Directors' Retirement Plan.  Each eligible       
Director will receive one-twelfth (1/12) of a year of Credited Service for each 
month during which he serves as a Director for at least fifteen (15) days.  The 
Directors' Retirement Plan provides each eligible participant with monthly      
retirement payments equal in an amount to the monthly Directors' fee in effect  
on the date that the Director retires, which such monthly retirement payment    
shall continue for a number of months equal to the lesser of:  (i) 120 months or
(ii) the retired Director's months of Credited Service.  In lieu of receiving   
these monthly retirement payments, any such Director may elect to receive an    
alternative form of payment of equivalent actuarial value to the total of       
monthly retirement payments that such Director would otherwise receive under the
formula described in the preceding sentence.  The Board reserves the right to   
amend or terminate the plan at any time and for any reason.                     

Effective December 23, 1988, and amended November 12, 1991; August 17,
1995; and August 15, 1996, Edison Sault entered executive severance agreements  
with each of its nine executive officers.  Under these agreements, Edison Sault 
has agreed to make certain severance payments to any executive officer in case  
of change in ownership or control of Edison Sault and                           

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the executive officer's subsequent termination of employment relating to, or    
resulting from, such change.                                                    

INCREASE IN NUMBER OF AUTHORIZED COMMON SHARES

 The Board of Directors of the Company, at its meeting held November 14,
1996, voted that the Annual Meeting of Stockholders scheduled for Tuesday, May  
6, 1997, would be called for, in addition to other purposes, the purpose of     
considering and acting upon a proposed amendment to the Articles of             
Incorporation of the Company so as to increase the number of authorized Common  
Shares from the existing 3,000,000 authorized shares to 9,840,000 authorized    
shares.                                                                         

     Presently, the Company has 1,547,345 shares outstanding of 3,000,000 shares
authorized.  The Company has had a history of increasing Shareholders' ownership
through Common Stock dividends.  Future stock dividends would require sufficient
authorized but unissued Common Shares.  Further, from time to time, additional  
authorized but unissued Common Shares may be issued to employees or employee    
benefit plans such as the Thrift Plan.  If authorization of the proposal is     
postponed until a specific situation arises, the time and expense incident to   
obtaining Shareholder approval at that time might disadvantage the Company by   
depriving it of the flexibility which could be important in facilitating        
effective use of the shares.                                                    

 The Board of Directors believes it would be in the best interest of the
Company to increase the authorized number of Common Shares, thereby assuring    
that an ample number of authorized shares will be available for issuance if     
desirable.                                                                      

  The additional authorized Common Shares would be issuable at the Board's
discretion, normally without further Stockholder action, for any proper         
corporate purposes, unless required by law or any rules or regulations to which 
the Company is subject.  However, as long as the Common Stock is listed for     
trading on NASDAQ, the flexibility that this amendment would provide the Board  
of Directors will be limited by rules which, as presently in effect, would      
generally require Stockholder approval for the issuance of shares when:  (i) a  
stock option or purchase plan is to be established or other arrangements made   
pursuant to which stock may be acquired by Officers or Directors, except for    
warrants or rights issued generally to security holders of the Company or       
broadly-based plans or arrangements, including other employees; (ii) the        
issuance would result in a change in control of the Company; (iii) stock or     
assets of another company are to be acquired, if a Director, Officer, or        
substantial Shareholder of the Company has a 5% or greater interest (10% or     
greater, collectively), directly or indirectly, in the Company or assets to be  
acquired or the consideration to be paid and the present or potential issuance  
of Common Stock could result in a 5% or greater increase in outstanding shares  
of Common Stock; (iv) Common Stock, or securities convertible into or           
exercisable for Common Stock, are to be issued in any transaction or series of  
related transactions, other than a public offering for cash, if (a) the Common  
Stock to be issued has, or will have upon issuance, voting power equal to or in 

10

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excess of 20% of the voting power outstanding before the issuance of such Common
Stock or securities convertible into or exercisable for Common Stock, or (b) the
number of shares of Common Stock to be issued is, or will be, equal to or in    
excess of 20% of the number of shares of Common Stock outstanding before the    
issuance of the Common Stock; (v) the Company sells or issues shares of Common  
Stock, or securities convertible into or exercisable for Common Stock, in a     
nonpublic offering for less than the greater of book or market value, which with
sales by Officers, Directors, or substantial Shareholders of the Company, equal 
to 20% or more of the number of shares of Common Stock or 20% or more of the    
voting power outstanding before the issuance; or (vi) the Company sells or      
issues shares of Common Stock, or securities convertible into or exercisable for
Common Stock, in a nonpublic offering for less than the greater of book or      
market value equal to 20% or more of the number of shares of Common Stock or 20%
or more of the voting power outstanding before the issuance.                    

     The authorization of additional authorized shares may have an anti-takeover
effect.  For example, such additional shares could be used to dilute the stock  
ownership of persons seeking to obtain control of the Company.  The Board of    
Directors has no present plans to use such shares to inhibit any hostile        
takeover, and the Board knows of no hostile takeover attempts for the Company.  

Other than as indicated above, the Company's Board of Directors and   
management have no plans or agreements for the issuance of any of the presently 
authorized and unissued Common Shares or of the additional shares to be         
authorized.  Rather, it is the intention of the Board of Directors and          
management to hold such authorized and unissued Common Shares in reserve for    
such corporate needs as may develop.                                            

     No Shareholder of the Company has any preemptive rights to subscribe for or
to purchase any of the authorized and unissued Common Shares, including the     
additional shares to be authorized.                                             

     The affirmative vote of the holders of at least a majority of Common Shares
of the Company outstanding as of the Record Date March 20, 1997, is required to 
adopt the amendment.                                                            

The Board of Directors and management recommend that the Common       
Shareholders vote FOR the proposal.                                             

REPORT TO SHAREHOLDERS

The Annual Report of ESELCO, Inc., for 1996, including financial      
statements, accompanied this Proxy Statement.                                   

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 PROPOSALS OF SHAREHOLDERS

Proposals by shareholders intended to be presented at the 1998 Annual 
Meeting must be received by the Company for inclusion in the 1997 Proxy         
Statement and Proxy on or before December 1, 1997.                              

 SOLICITATION OF PROXIES

The accompanying Proxy is solicited on behalf of management.          

   The cost of soliciting proxies in the accompanying form has been, or will
be, borne by ESELCO.  Officials and regular employees of Edison Sault may       
solicit proxies personally, by telephone, or by telegram from some Stockholders.

 OTHER MATTERS

The Company has not selected an independent auditor for 1997.  This   
selection usually occurs at the May Board Meeting pursuant to recommendations by
the Audit Committee.  Representatives of Arthur Andersen & Co., the independent 
auditors for 1996, are not expected to be present at the Annual Meeting.        

    The management knows of no other matters that may come before the meeting.
However, if any such other matters should properly come before the meeting, it  
is the intention of the persons named in the enclosed proxy to vote the proxy in
accordance with their best judgment.                                            

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The chart listed below is mandated by proxy disclosure rules that attempt to    
measure the performance of ESELCO common stock against a) a broad stock index   
(the Standard & Poor's 500) and b) an electric industry-specific index (the     
Standard & Poor's Electric Utility Index).  The methodology used to calculate   
the five-year cumulative total return is prescribed by the proxy disclosure     
rules.  The total annual return is equal to the sum of a) the cash dividends    
plus b) the increase (decrease) in the market price per share of stock.         

 [GRAPH]

ESELCO         $100      $131      $150      $172      $177      $213           
S & P ELECT.   $100      $106      $119      $104      $136      $136           
S & P 500      $100      $108      $118      $120      $165      $203           

 The Company's common stock trades on the NASDAQ system under the symbol
EDSE.                                                                           

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Proxy for - ESELCO, Inc.                                                        
Sault Ste. Marie, MI 49783                              

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. If any other       
matters arise, the proxies or substitutes may vote according to their best      
judgement.                                                                      

This proxy will be voted in the manner directed by the undersigned              
stockholder.                                                                    

IF NOT DIRECTED, THIS PROXY IS VOTED FOR DIRECTOR NOMINEES ON THE REVERSE SIDE. 

                                     Dated: __________________________

                                     Signed: _________________________

                                             _________________________

                                   PLEASE SIGN EXACTLY AS NAME APPEARS AT LEFT

If stock is registered in the names of two or more persons, each person should  
sign. Executors, Administrators, Guardians, and Corporate Officers should add   
titles.                                                                         

------------------------------------------------------------------------------- 

The undersigned hereby appoints David K. Easlick, Allan L. Grauer, and          
Thomas S. Nurnberger or any of them proxies with full power of substitution to  
represent and vote all shares of common stock of Eselco, Inc. which the         
undersigned is entitled to vote at the Annual Meeting of Shareholders to be     
held at the Cisler Center, located at Lake Superior State University, 650 W.    
Easterday Ave, Sault Sainte Marie, Michigan on Tuesday May 6, 1997 at 10:00     
am and all adjournments thereof revoking any proxies heretofore given.          

1. ELECTION OF TWO DIRECTORS -- You may vote as indicated below.                

A - VOTE FOR BOTH NOMINEES - James S. Clinton and William R. Gregory      
                  (Circle A)

B - VOTE FOR ONE NOMINEE -   James S. Clinton      William R. Gregory     
                    (Circle Nominee)

C - WITHHOLD AUTHORITY - DO NOT VOTE FOR EITHER NOMINEE   (Circle C)      

2. AMENDMENT OF ARTICLES OF INCORPORATION. Amend the Articles of                
Incorporation to increase the number of authorized shares of Common Stock 
from 3,000,000 to 9,840,000.                                              

/ / FOR              / / AGAINST           / /ABSTAIN         

3. IN THEIR DISCRETION UPON SUCH OTHER MATTERS TO PROPERLY COME BEFORE THE      
MEETING.

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Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘PRE 14A’ Filing	Date	First	Last	Other Filings

	12/1/97	13
For Period End / Corrected on:	5/6/97	2	15	DEF 14A
	3/31/97	2	3	10-K405, 10-Q
	3/20/97	2	12
Filed on:	3/19/97			DEF 14A
	2/17/97	4	6
	12/31/96	8		10-K405, U-3A-2
	11/14/96	11		10-Q
	8/15/96	10
	8/17/95	10
				List all Filings

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Filing Submission 0000912057-97-009406 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

Eselco Inc – ‘PRE 14A’ for 5/6/97

As of: Wednesday, 3/19/97 · For: 5/6/97 · Accession #: 912057-97-9406 · File #: 0-17736 · Correction: This Filing was Corrected by the SEC on 5/6/97. ®

Preliminary Proxy Solicitation Material — Schedule 14AFiling Table of Contents

Dates Referenced Herein and Documents Incorporated by Reference

As of: Wednesday, 3/19/97 · For: 5/6/97 · Accession #: 912057-97-9406 · File #: 0-17736 · Correction: This Filing was Corrected by the SEC on 5/6/97. `®`

Preliminary Proxy Solicitation Material — Schedule 14A
Filing Table of Contents