<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 5, 1998
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________________
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_______________________
ZEMEX CANADA CORPORATION
(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<S> <C> <C>
CANADA NONE 1031
(State or other jurisdiction of (I.R.S. Employer (Primary Standard Industrial
incorporation or organization) Identification Classification Code Number)
Number)
</TABLE>
CANADA TRUST TOWER, BCE PLACE
161 BAY STREET, SUITE 3750
TORONTO, ONTARIO, CANADA M5J 2S1
(416) 365-8080
(Address and Telephone Number of Registrant's Principal Executive Office)
_______________________
PATRICIA K. MORAN
CANADA TRUST TOWER, BCE PLACE
161 BAY STREET, SUITE 3750
TORONTO, ONTARIO, CANADA M5J 2S1
(416) 365-8080
(Name, Address and Telephone Number of Agent for Service)
COPIES TO:
RONALD R. LEVINE, II, ESQ. JAY C. KELLERMAN, ESQ.
DAVIS, GRAHAM & STUBBS LLP STIKEMAN ELLIOTT
370 SEVENTEENTH STREET, SUITE 4700 COMMERCE COURT WEST, SUITE 5300
DENVER, COLORADO 80202 TORONTO, ONTARIO, CANADA M5L 1B9
(303) 892-9400 (416) 869-5500
_______________________
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after the requisite votes are obtained pursuant to the
solicitation by Zemex Corporation referred to in this Registration
Statement.
If any of the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [_]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
================================================================================================================================
AMOUNT OF SHARES PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF SHARES TO BE REGISTERED TO BE REGISTERED OFFERING PRICE PER SHARE AGGREGATE OFFERING PRICE REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Shares, without par value..... 8,681,976 shares $6.56/(1)/ $56,953,763 $16,802.
================================================================================================================================
</TABLE>
(1) Estimated in accordance with Rule 457, solely for the purpose of determining
the registration fee, on the basis of the average of the high and low prices
reported on the New York Stock Exchange Composite Tape on September 30, 1998
for the Common Stock, par value $1.00 per share, of Zemex Corporation, which
will be converted into Common Shares of Zemex Canada Corporation on a one-
for-one basis pursuant to the merger described in this Registration
Statement.
_______________________
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
<PAGE>
CROSS REFERENCE SHEET
Pursuant to Item 501(b) of Regulation S-K
Showing Location in Prospectus of Information
Required by Form S-4
<TABLE>
<CAPTION>
ITEM NUMBER AND CAPTION LOCATION IN PROSPECTUS BY CAPTION
<S> <C>
1. Forepart of Registration Statement and Outside
Front Cover Page of Prospectus.......................... Outside Front Cover Page
2. Inside Front and Outside Back Cover Pages of
Prospectus.............................................. Table of Contents; Available Information
3. Risk Factors, Ratio of Earnings to Fixed Charges
and Other Information................................... Summary; Risk Factors
4. Terms of the Transaction................................ Outside Front Cover Page; Summary; Reincorporation Merger
Proposal; Merger Agreement; Comparative Rights of Shareholders;
Certain United States Federal Tax Considerations; Certain
Canadian Federal Tax Considerations; Accounting Treatment;
Description of Share Capital
5. Pro Forma Financial Information......................... Not Applicable
6. Material Contacts with the Company Being
Acquired............................................... Not Applicable
7. Additional Information Required for Reoffering
by Persons and Parties Deemed to Be
Underwriters........................................... Not Applicable
8. Interests of Named Experts and Counsel................. Not Applicable
9. Disclosure of Commission Position on
Indemnification for Securities Act Liabilities......... Not Applicable
10. Information with Respect to S-3 Registrants............ Not Applicable
11. Incorporation of Certain Information by
Reference.............................................. Not Applicable
12. Information with Respect to S-2 or S-3
Registrants............................................ Not Applicable
13. Incorporation of Certain Information by
Reference.............................................. Not Applicable
14. Information with Respect to Registrants other
than S-2 or S-3 Registrants............................ Summary; Business of the Company; Selected Historical
Financial Data; Financial Statements
15. Information with Respect to S-3 Companies.............. Not Applicable
16. Information with Respect to S-2 or S-3
Companies.............................................. Summary; Incorporation of Certain Documents by
Reference; Selected Historical Financial Data; Business
of Zemex
17. Information with Respect to Companies Other
Than S-2 or S-3 Companies.............................. Not Applicable
18. Information if Proxies, Consents or
Authorizations are to be Solicited..................... Outside Front Cover Page; Summary; Voting and Proxy
Information; Dissenters' Rights; Security Ownership;
Management of Zemex and the Company
19. Information if Proxies, Consents or
Authorizations are not to be Solicited in an
Exchange Offer......................................... Not Applicable
</TABLE>
<PAGE>
ZEMEX CORPORATION
CANADA TRUST TOWER, BCE PLACE
161 BAY STREET, SUITE 3750
TORONTO, ONTARIO, CANADA M5J 2S1
November ___, 1998
Dear Zemex Corporation Shareholder:
You are cordially invited to attend a special meeting of shareholders of Zemex
Corporation ("Zemex") to be held on Friday, December 18, 1998 at 1:00 p.m. in
Room "C", 11th Floor, The Chase Manhattan Bank, 270 Park Avenue, New York, New
York 10017.
At the Special Meeting of Shareholders, you will be asked to consider and vote
upon a proposal to approve a reincorporation into Canada by means of a merger of
a subsidiary of Zemex Canada Corporation ("Zemex Canada"), a Canadian company,
with and into Zemex (the "Reincorporation Merger") pursuant to the Agreement and
Plan of Merger (the "Merger Agreement"), dated as of October 1, 1998, among
Zemex, Zemex Canada Corporation and Zemex Acquisition Corporation. Pursuant to
the Merger Agreement, (i) each outstanding common share of Zemex will be
converted into one common share of Zemex Canada, and (ii) Zemex will become a
wholly-owned subsidiary of Zemex Canada. The Reincorporation Merger is more
completely described in the accompanying Proxy Statement/Prospectus, and a copy
of the Merger Agreement is attached as Annex A thereto.
The board of directors of Zemex has determined the Reincorporation Merger to be
beneficial to Zemex and its shareholders, has approved the Merger Agreement and
the Reincorporation Merger, and unanimously recommends that the shareholders
vote for approval of this transaction.
At the completion of this transaction, Zemex Canada will be listed for trading
on both The Toronto Stock Exchange and the New York Stock Exchange.
Please read the accompanying Notice of Special Meeting of Shareholders and the
Proxy Statement/Prospectus for details of the Reincorporation Merger and
additional related information.
Sincerely,
ZEMEX CORPORATION
Richard L. Lister
President and Chief Executive Officer
<PAGE>
ZEMEX CORPORATION
CANADA TRUST TOWER, BCE PLACE
161 BAY STREET, SUITE 3750
TORONTO, ONTARIO, CANADA M5J 2S1
____________________
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
____________________
To the Shareholders:
A special meeting of the shareholders of Zemex Corporation ("Zemex") will be
held in Room "C", 11th Floor, The Chase Manhattan Bank, 270 Park Avenue, New
York, New York 10017, on Friday, December 18, 1998, at 1:00 p.m. for the
purpose of considering and acting upon a proposal to approve a reincorporation
into Canada by means of a merger of a subsidiary of Zemex Canada Corporation, a
Canadian company ("Zemex Canada"), with and into Zemex pursuant to the Agreement
and Plan of Merger (the "Merger Agreement"), dated as of October 1, 1998, among
Zemex, Zemex Canada and Zemex Acquisition Corporation. Pursuant to the Merger
Agreement, (i) each outstanding common share of Zemex will be converted into one
common share of Zemex Canada, and (ii) Zemex will become a wholly-owned
subsidiary of Zemex Canada.
Once this transaction has been completed, Zemex Canada will be listed for
trading on both The Toronto Stock Exchange and the New York Stock Exchange.
Only shareholders of record at the close of business on November 10, 1998, are
entitled to notice of, and to vote at, the meeting and at any adjournment or
postponement thereof. A complete list of such shareholders will be open for
examination by any shareholder for any purpose germane to the meeting at the
office of the Corporate Secretary of Zemex for a period of 10 days prior to the
meeting.
If you do not expect to attend in person, please sign and return the enclosed
proxy.
By Order of the Board of Directors,
Patricia K. Moran
Corporate Secretary and Assistant Treasurer
<PAGE>
Information contained herein is subject to completion or amendment. A
Registration Statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time this Registration Statement becomes
effective. This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION, DATED OCTOBER 5, 1998
ZEMEX CANADA CORPORATION ZEMEX CORPORATION
CANADA TRUST TOWER, BCE PLACE CANADA TRUST TOWER, BCE PLACE
161 BAY STREET, SUITE 3750 161 BAY STREET, SUITE 3750
TORONTO, ONTARIO, CANADA M5J 2S1 TORONTO, ONTARIO, CANADA M5J 2S1
_________________________
PROXY STATEMENT/PROSPECTUS
Zemex Canada Corporation, a company organized under the Canada Business
Corporations Act (the "Company"), has agreed to a transaction which will
facilitate the change of domicile of Zemex Corporation, a Delaware corporation
("Zemex"), from Delaware to Canada. A special meeting of Zemex shareholders
will be held to consider and vote on a proposal to approve the Agreement and
Plan of Merger dated as of October 1, 1998 by and among the Company, Zemex and
Zemex Acquisition Corporation (the "Merger Agreement"), pursuant to which each
outstanding share of common stock, par value $1.00 per share, of Zemex ("Zemex
Common Stock") will be converted into one common share, without par value, of
the Company ("Company Common Shares"), and Zemex will become a wholly-owned
subsidiary of the Company (the "Reincorporation Merger"). The full text of the
Merger Agreement is attached as Annex A to this Proxy Statement/Prospectus. As
of November __, 1998, there were _____ outstanding shares of Zemex Common Stock.
This Proxy Statement/Prospectus constitutes (i) the proxy statement of Zemex
with respect to the solicitation of proxies from Zemex shareholders by the board
of directors of Zemex to approve the Merger Agreement, and (ii) the prospectus
of the Company with respect to the issuance of Company Common Shares to Zemex
shareholders upon the consummation of the Reincorporation Merger.
The Reincorporation Merger will be consummated only if certain conditions are
satisfied, including the approval of the Merger Agreement by the affirmative
vote of the holders of at least a majority of the outstanding shares of Zemex
Common Stock. See "Merger Agreement--Conditions to the Consummation of the
Reincorporation Merger." The Zemex Board of Directors has approved the Merger
Agreement and the Reincorporation Merger, and recommends that shareholders of
Zemex vote FOR approval of the Merger Agreement. Dundee Bancorp International
Inc., which is the holder of approximately 34% of the outstanding Zemex Common
Stock, and members of the Board of Directors of Zemex, who own approximately __%
of the outstanding Zemex Common Stock, have indicated that they intend to vote
for the approval of the Merger Agreement. See "Voting and Proxy Information--
Vote Required for Approval."
Zemex Common Stock is currently listed for trading on the New York Stock
Exchange under the symbol "ZMX" and, immediately following the consummation of
the Reincorporation Merger, the Company Common Shares are expected to be listed
on the New York Stock Exchange and on The Toronto Stock Exchange.
This Proxy Statement/Prospectus is first being mailed to shareholders of Zemex
Common Stock on or about November 12, 1998.
FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION WITH
THE REINCORPORATION MERGER, SEE "RISK FACTORS" BEGINNING ON PAGE 13.
_________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROXY STATEMENT/ PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
_________________________
The date of this Proxy Statement/Prospectus is November ____, 1998.
<PAGE>
AVAILABLE INFORMATION
Zemex has been and is currently subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). In accordance
therewith, Zemex files, and following the Reincorporation Merger the Company
will file, reports, proxy statements, and other information with the Securities
and Exchange Commission (the "SEC"). Such reports, proxy statements, and other
information can be inspected and copied at the offices of the SEC at 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the regional offices of the SEC at
Seven World Trade Center, 13th Floor, New York, New York 10048 and Northwestern
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661, and
copies of such material can be obtained from the public reference section at the
principal office of the SEC, 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates, or by calling the SEC at 1-800-SEC-0330. In addition,
registration statements and certain other filings made with the SEC through its
Electronic Data Gathering, Analysis and Retrieval ("EDGAR") system are publicly
available through the SEC's site on the Internet's World Wide Web, located at
http://www.sec.gov.
The Company has filed with the SEC a Registration Statement on Form S-4 under
the Securities Act of 1933, as amended (the "Securities Act"), with respect to
the Company Common Shares offered hereby. This Proxy Statement/Prospectus does
not contain all the information set forth in that Registration Statement and the
exhibits relating thereto. Statements contained herein concerning the
provisions of documents are necessarily summaries of those documents, and each
statement is qualified in its entirety by reference to the copy of the
applicable document filed with the SEC. The Registration Statement and any
amendments thereto, including exhibits filed as a part thereof, are available
for inspection and copying as set forth above.
_________________________
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
This Proxy Statement/Prospectus incorporates certain documents by reference
which are not presented herein or delivered herewith. These documents (without
exhibits unless such exhibits are specifically incorporated by reference) are
available without charge to each person to whom a copy of this Proxy
Statement/Prospectus is delivered, upon written or oral request to Zemex
Corporation, Canada Trust Tower, BCE Place, 161 Bay Street, Suite 3750, Toronto,
Ontario, Canada M5J 2S1, Attention: Patricia K. Moran, Telephone (416) 365-
8080.
The following documents filed by Zemex with the SEC under the Exchange Act are
hereby incorporated by reference herein:
1. Annual Report on Form 10-K for the fiscal year ended December 31, 1997
(the "1997 Form 10-K");
2. Quarterly Report on Form 10-Q for the three months ended March 31, 1998
(the "March 31, 1998 Form 10-Q");
3. Quarterly Report on Form 10-Q for the three months ended June 30, 1998
(the "June 30, 1998 Form 10-Q"); and
4. Current Report on Form 8-K dated May 20, 1998.
All documents filed by Zemex under Section 13(a), 13(c), 14, or 15(d) of the
Exchange Act after the date of this Proxy Statement/Prospectus and prior to the
termination of the offering of the Company Common Shares
<PAGE>
offered hereby shall be deemed to be incorporated by reference in this Proxy
Statement/Prospectus and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Proxy Statement/Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which is also
incorporated or deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Proxy Statement/Prospectus.
This Proxy Statement/Prospectus is being accompanied by a copy of the Zemex 1997
Form 10-K, the 1997 Annual Report to Shareholders filed as an exhibit thereto
and the June 30, 1998 Form 10-Q. Portions of the 1997 Annual Report that are
not specifically incorporated by reference into the 1997 Form 10-K are not part
of the Registration Statement of which this Proxy Statement/Prospectus is a
part.
_________________________
ENFORCEABILITY OF CIVIL LIABILITIES
The Company is incorporated under the laws of Canada and certain of its
directors and officers are residents of Canada. In addition, a portion of the
assets of the Company and such persons are or may be located outside the United
States. As a result, it may be difficult for investors to effect service of
process within the United States against the Company or such persons or to
enforce in United States courts judgments obtained against the Company or such
persons in United States courts and predicated upon the civil liability
provisions of the Securities Act. The Company may be served with process in the
United States by serving Ronald R. Levine, II, c/o Davis, Graham & Stubbs LLP,
370 Seventeenth Street, Denver, Colorado 80202, its United States agent
appointed for that purpose.
_________________________
No person has been authorized to give any information or to make any
representations other than those contained in this Proxy Statement/Prospectus,
and if given or made, such information or representations must not be relied
upon as having been authorized. This Proxy Statement/Prospectus does not
constitute an offer to sell or the solicitation of an offer to buy any
securities other than the Company Common Shares to which it relates or an offer
to or solicitation of any person in any jurisdiction in which such offer or
solicitation is unlawful. Neither the delivery of this Proxy
Statement/Prospectus nor any sale made hereunder shall under any circumstances
imply that information contained herein is correct at any time subsequent to its
date.
_________________________
CAUTIONARY "SAFE HARBOR" STATEMENT UNDER THE UNITED STATES PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995
With the exception of historical matters, the matters discussed or incorporated
by reference in this Proxy Statement/Prospectus are forward looking statements
that involve risks and uncertainties that could cause actual results to differ
materially from targeted or projected results. These forward-looking statements
include statements regarding the intent, belief or current expectations of the
Company and members of its senior management team, including without limitation,
post transaction performance and opportunities, the attractiveness of an
investment in Zemex Canada to Canadian and other investors, market acceptance in
the Canadian capital markets and enhanced liquidity. Factors that could cause
actual results to differ materially include, among others, fluctuations in
aluminum prices, problems regarding unanticipated competition,
-2-
<PAGE>
processing, access and transportation of supplies, availability of materials and
equipment, force majeure events, the failure of plant equipment or processes to
operate in accordance with specifications or expectations, accidents, labor
relations, delays in start-up dates, environmental costs and risks, the outcome
of acquisition negotiations and general domestic and international economic and
political conditions, as well as other factors described herein or in the
filings of Zemex with the SEC. Many of these factors are beyond the ability of
Zemex to predict or control. Readers are cautioned not to put undue reliance on
forward looking statements.
-3-
<PAGE>
TABLE OF CONTENTS
Page
----
SUMMARY.............................................................. 6
The Companies................................................... 6
Reincorporation Merger Proposal................................. 6
Special Meeting................................................. 7
Dissenters' Rights.............................................. 8
Comparative Rights of Shareholders.............................. 9
Certain Tax Considerations...................................... 9
Accounting Treatment............................................ 9
Third Party Consents............................................10
Risk Factors....................................................10
SUMMARY HISTORICAL FINANCIAL DATA....................................11
Market and Trading Prices of Securities.........................12
RISK FACTORS.........................................................13
Adverse Tax Consequences........................................13
Possible Volatility of Stock Price..............................13
REINCORPORATION MERGER PROPOSAL......................................15
Background of the Reincorporation Merger Proposal...............15
Purposes and Effects of the Change of Domicile..................16
Recommendation of the Zemex Board of Directors..................16
MERGER AGREEMENT.....................................................17
General.........................................................17
Effective Time of the Reincorporation Merger....................17
Conditions to the Consummation of the Reincorporation Merger....17
Third Party Consents............................................18
Exchange of Share Certificates..................................18
Employee Matters; Stock Options.................................18
Indemnification.................................................19
Termination.....................................................19
VOTING AND PROXY INFORMATION.........................................19
Special Meeting.................................................19
Record Date.....................................................19
Vote Required for Approval......................................20
Proxies.........................................................20
DISSENTERS' RIGHTS...................................................21
COMPARATIVE RIGHTS OF SHAREHOLDERS...................................21
SELECTED HISTORICAL FINANCIAL DATA...................................29
SECURITY OWNERSHIP...................................................30
-4-
<PAGE>
BUSINESS OF ZEMEX....................................................32
BUSINESS OF THE COMPANY..............................................33
CERTAIN UNITED STATES FEDERAL TAX CONSIDERATIONS.....................33
Reincorporation.................................................33
Ownership of the Company Common Shares..........................34
CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS...................36
ACCOUNTING TREATMENT.................................................38
MANAGEMENT OF ZEMEX AND THE COMPANY..................................38
Directors, Executive Officers and Certain Key Employees.........38
DESCRIPTION OF SHARE CAPITAL.........................................39
Common Shares...................................................39
First Preference Shares.........................................40
Registrar and Transfer Agent....................................40
MARKET PRICES, DIVIDENDS AND TRADING INFORMATION.....................40
Company Common Shares...........................................40
Dividend Policy.................................................40
LEGAL MATTERS........................................................41
EXPERTS..............................................................41
ANNEX A.............................................................A-1
Agreement and Plan of Merger
-5-
<PAGE>
SUMMARY
The following summary is qualified in its entirety by the detailed information
and financial statements appearing elsewhere in this Proxy Statement/Prospectus,
including the annexes hereto and in the documents incorporated herein by
reference. Certain capitalized terms used in this Summary are defined elsewhere
in this Proxy Statement/Prospectus. The symbol "$" in this Proxy
Statement/Prospectus refers to United States dollars.
THE COMPANIES
Zemex. Zemex Corporation ("Zemex"), a Delaware corporation, was incorporated in
- -----
1985 as the successor to Pacific Tin Corporation. Zemex is a niche producer of
industrial minerals and metal products. Its principal businesses are industrial
minerals, metal powders, and aluminum dross recycling. Its major products
include feldspar, feldspathic minerals, kaolin, sand, mica, talc, ferrous and
non ferrous powders, and aluminum dross derivatives. Zemex's principal offices
are located at Canada Trust Tower, BCE Place, 161 Bay Street, Suite 3750,
Toronto, Ontario, Canada M5J 2S1, and its telephone number is (416) 365-8080.
The Company. Zemex Canada Corporation (the "Company"), a company incorporated
- -----------
under the Canada Business Corporations Act ("CBCA"), was incorporated to
facilitate the change of domicile of Zemex from Delaware to Canada. After
consummation of the Reincorporation Merger, the outstanding capital stock of the
Company will be held by the current shareholders of Zemex, and Zemex will become
a wholly-owned subsidiary of the Company. The Company will continue to conduct
the business in which Zemex is currently engaged. The Company's registered
office is located at Canada Trust Tower, BCE Place, 161 Bay Street, Suite 3750,
Toronto, Ontario, Canada M5J 2S1, and its telephone number is (416) 365-8080.
REINCORPORATION MERGER PROPOSAL
General
The board of directors of Zemex has determined that it is advisable to change
Zemex's domicile from Delaware to Canada. The Board is proposing that the
change of domicile be effected pursuant to the Merger Agreement. Pursuant to
the Merger Agreement, shareholders of Zemex will become shareholders of the
Company, and Zemex will become a wholly-owned subsidiary of the Company.
Immediately prior to the Reincorporation Merger, the Company will change its
name to Zemex Corporation, and in the Merger Zemex will change its name to Zemex
U.S. Corporation. The change of domicile will not result in any material change
to the business of Zemex and will not have any effect on the relative equity or
voting interests of Zemex's shareholders in the Zemex business, but will,
however, result in certain changes in the rights and obligations of current
Zemex shareholders under applicable corporate and tax laws. See "Risk Factors",
"Comparative Rights of Shareholders" and "Reincorporation Merger Proposal".
Purposes and Effects of Change of Domicile
The purpose of the Reincorporation Merger is to change Zemex's domicile from
Delaware to Canada, which the Zemex Board of Directors believes will afford
greater access to the Canadian capital markets and investors (which have a
significant interest in natural resource companies). See "Reincorporation
Merger Proposal--Purposes and Effects of the Change of Domicile" and "Certain
United States Federal Tax Considerations". The expected dual listing of the
Company Common Shares for trading on the New York Stock Exchange and The Toronto
Stock Exchange should also enhance liquidity for shareholders through the
creation of a broader and deeper trading market. See "Reincorporation Merger
Proposal".
-6-
<PAGE>
Terms of Merger Agreement
Under the terms of the Merger Agreement, Zemex Acquisition Corporation, a newly-
formed, direct subsidiary of the Company, incorporated under the laws of
Delaware, will merge with and into Zemex, the separate corporate existence of
the merger subsidiary will cease, Zemex will be the surviving corporation, each
previously outstanding share of the merger subsidiary's common stock will be
converted into one share of Zemex Common Stock and each previously outstanding
share of Zemex Common Stock will be converted into one Company Common Share.
The previously outstanding Company Common Shares will be canceled. As a result
of the foregoing, Zemex will become a wholly-owned subsidiary of the Company and
the current shareholders of Zemex will own the outstanding Company Common
Shares. For accounting purposes, the assets and liabilities of the Company and
its subsidiaries on a consolidated basis immediately after the consummation of
the Reincorporation Merger will be substantially identical to the assets and
liabilities of Zemex and its subsidiaries on a consolidated basis immediately
prior to the Reincorporation Merger.
The Company has agreed in the Merger Agreement to establish for employees of
Zemex and the Company new benefit plans which are substantially similar to
existing employee benefit plans of Zemex. The Company has also agreed to
indemnify current and former directors and officers of Zemex for losses arising
out of their service in such capacities prior to and including the effective
time of the Reincorporation Merger, and the Company has agreed to indemnify
Zemex's affiliates, directors and officers from and against losses suffered by
such parties relating to any breach of any covenant in the Merger Agreement by
the Company.
For a more detailed discussion of the terms of the Merger Agreement, see "Merger
Agreement" and the full text of the Merger Agreement attached hereto as Annex A.
Recommendation of the Zemex Board of Directors
THE ZEMEX BOARD OF DIRECTORS HAS APPROVED THE MERGER AGREEMENT AND RECOMMENDS
THAT SHAREHOLDERS OF ZEMEX VOTE FOR APPROVAL OF THE MERGER AGREEMENT. In
reaching such determination, the board has considered the various factors
described under "Reincorporation Merger Proposal--Recommendation of the Zemex
Board of Directors." See "Reincorporation Merger Proposal".
SPECIAL MEETING
Time, Date, Place and Purpose
A special meeting of the Zemex shareholders will be held at 1:00 p.m. on Friday,
December 18, 1998, at Room "C", 11th Floor, The Chase Manhattan Bank, New York,
New York 10017 (or at any adjournments or postponements thereof) to consider and
vote on the proposal to approve the Merger Agreement and any other matters that
may properly come before such meeting. The presence, in person or by proxy, of
the shareholders holding a majority of the outstanding Zemex Common Stock will
constitute a quorum. See "Voting and Proxy Information".
Record Date
Only Zemex shareholders of record at the close of business on November 10, 1998,
as shown in Zemex's records, will be entitled to vote, or to grant proxies to
vote, at the special meeting. See "Voting and Proxy Information-- Record Date".
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Votes Required for Approval
Approval of the Merger Agreement requires the affirmative vote of the
shareholders of Zemex holding at least a majority of the outstanding Zemex
Common Stock. Abstentions and broker "non-votes" will have the effect of votes
against the approval of the Merger Agreement. As of the record date identified
above, there were __________ shares of Zemex Common Stock outstanding and
entitled to vote. As of the record date, the directors and executive officers
of Zemex and affiliates of such persons directly owned, in the aggregate, _____
shares (approximately ____%) of the total number of shares of Zemex Common Stock
outstanding, and Dundee Bancorp International Inc. owned approximately 34% of
the outstanding Zemex Common Stock. Such shareholders have indicated they intend
to vote all such shares for the approval of the Merger Agreement. See "Voting
and Proxy Information--Vote Required for Approval."
Proxies
Each Zemex shareholder as of the record date is receiving a proxy card (a "Proxy
Card") with this Proxy Statement/Prospectus. A shareholder of Zemex may grant a
proxy to vote for or against, or to abstain from voting on, the proposal to
approve the Merger Agreement by marking his/her Proxy Card appropriately,
executing it in the space provided and, in the case of holders of Zemex Common
Stock appearing on the stock records of Zemex, returning it to Zemex's transfer
agent, First Union National Bank (the "Transfer Agent"), in the envelope
provided with the Proxy Card. Zemex shareholders who hold their Zemex Common
Stock in the name of a bank, broker or other nominee should follow the
instructions provided by their bank, broker or nominee on voting their shares.
TO BE EFFECTIVE, A PROXY CARD MUST BE RECEIVED PRIOR TO THE SPECIAL MEETING. ANY
PROPERLY EXECUTED PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATION
INDICATED ON SUCH PROXY CARD. A PROPERLY EXECUTED AND RETURNED PROXY CARD IN
WHICH NO SPECIFICATION IS MADE WILL BE VOTED FOR THE PROPOSAL TO APPROVE THE
MERGER AGREEMENT.
If any other matters are properly presented at the special meeting for
consideration, including consideration of a motion to adjourn the meeting to
another time and/or place, the persons named in the Proxy Card and acting
thereunder will have discretion to vote on such matters in accordance with their
best judgment.
Revocation
In the case of holders of Zemex Common Stock appearing on the stock record of
Zemex, a Proxy Card may be revoked at any time prior to its exercise by (a)
giving written notice of such revocation to the Transfer Agent, (b) appearing
and voting in person at the special meeting, or (c) properly completing and
executing a later-dated proxy and delivering it to the Transfer Agent at or
before the special meeting. Presence without voting at the special meeting will
not automatically revoke a proxy, and any revocation during the meeting will not
affect votes previously taken. Zemex shareholders who hold their Zemex Common
Stock in the name of a bank, broker or other nominee should follow the
instructions provided by their bank, broker or nominee in revoking their
previously voted shares. See "Voting and Proxy Information-- Proxies".
DISSENTERS' RIGHTS
The shareholders of Zemex will not have dissenters' rights in connection with
the Reincorporation Merger. For additional information see "Dissenters' Rights"
and Section 262 of the Delaware General Corporation Law.
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<PAGE>
COMPARATIVE RIGHTS OF SHAREHOLDERS
The principal attributes of Zemex Common Stock and Company Common Shares will be
identical in all material respects. However, there are certain substantive
differences between the rights of shareholders under Delaware law and of
shareholders under the CBCA. See "Comparative Rights of Shareholders".
CERTAIN TAX CONSIDERATIONS
The following is a brief summary of the tax consequences of the Reincorporation
Merger and is not intended to be, nor should it be construed to be, advice to
any particular shareholder of Zemex. Shareholders of Zemex should consult their
own tax advisers with respect to their particular circumstances. A more
detailed summary of certain tax consequences of the Reincorporation Merger is
set out under "Certain United States Federal Tax Considerations" and "Certain
Canadian Federal Income Tax Considerations".
United States Federal Income Tax Consequences. Generally, holders of Zemex
- ---------------------------------------------
Common Stock who are treated as U.S. persons for U.S. Federal income tax
purposes will recognize gains but not losses with respect to their Zemex Common
Stock as a result of the Reincorporation Merger. It is expected that holders of
Zemex Common Stock who are treated as foreign persons for U.S. Federal income
tax purposes, including such holders who have held directly and constructively
more than 5% of the outstanding Zemex Common Stock, will not recognize taxable
gain or loss with respect to their Zemex Common Stock as a result of the
Reincorporation Merger. See "Certain United States Federal Tax
Considerations."
Canadian Federal Income Tax Consequences. Holders of Zemex Common Stock who are
- ----------------------------------------
resident or are deemed to be resident in Canada for purposes of the Income Tax
Act (Canada) (the "Tax Act") who exchange their Zemex Common Stock pursuant to
the Merger Agreement for Company Common Shares will be considered to have
disposed of their Zemex Common Stock for proceeds of disposition equal to the
fair market value of the Company Common Shares received in exchange. With
respect to Holders who are neither resident nor deemed to be resident in Canada
for purposes of the Tax Act and who do not use or hold, and are not deemed to
use or hold, their Zemex Common Stock or Company Common Shares in connection
with carrying on business in Canada, no tax will be payable under the Tax Act on
any capital gain realized on the disposition of Zemex Common Stock in exchange
for Company Common Shares pursuant to the Merger Agreement unless the Zemex
Common Stock constitutes "taxable Canadian property" for purposes of the Tax
Act. See "Certain Canadian Federal Income Tax Considerations".
ACCOUNTING TREATMENT
The indirect acquisition by the Company of the shares of Zemex in connection
with the Reincorporation Merger will be accounted for as a statutory
reincorporation. There will not be any "step-up" or write-up of assets for
accounting purposes as a result of the Reincorporation Merger.
Pro forma financial information in contemplation of the Reincorporation Merger
has not been included in this Proxy Statement/Prospectus reflecting the fact
that the statutory reincorporation will largely result in a change in legal form
only; the carrying values of the assets and liabilities of the Company after the
transaction will substantially reflect the carrying values of the assets and
liabilities of Zemex prior to the transaction.
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<PAGE>
THIRD PARTY CONSENTS
No material consent, approval or authorization of or filing with any
governmental entity is required in connection with the consummation of the
Reincorporation Merger, other than (a) the approval of the shareholders of Zemex
and Zemex Acquisition Corporation in accordance with the laws of the State of
Delaware and (b) filing with the Secretary of State of the State of Delaware the
certificate of merger with respect to the Reincorporation Merger.
RISK FACTORS
An investment in the Company Common Shares offered hereby involves certain
risks. In evaluating the Company and its business, investors should carefully
consider the following risk factors, in addition to the other information
included herein and the risks inherent in the existing business of Zemex: (i)
certain possible adverse tax consequences, and (ii) possible volatility of stock
price. See "Risk Factors".
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SUMMARY HISTORICAL FINANCIAL DATA
The following summary historical financial data as of December 31, 1997, 1996,
1995, 1994 and 1993 and for each of the five years in the period ended December
31, 1997 were derived from the audited consolidated financial statements of
Zemex. The following summary historical financial data as of June 30, 1998 and
1997 and for the six month periods ended June 30, 1998 and 1997 were derived
from unaudited historical consolidated financial statements of Zemex which, in
the opinion of management, reflect all adjustments (consisting of normal
recurring adjustments) necessary for a fair presentation of unaudited balance
sheet data as of June 30, 1998 and 1997 and the unaudited results for the six
month periods ended June 30, 1998 and 1997. The information contained in this
table should be read in conjunction with "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and the consolidated financial
statements and accompanying notes thereto included in the 1997 Form 10-K, the
March 31, 1998 Form 10-Q and the June 30, 1998 Form 10-Q incorporated herein by
reference.
The consolidated financial statements of Zemex have been prepared in accordance
with accounting principles generally accepted in the United States ("U.S.
GAAP"). The application of Canadian generally accepted accounting principles
("Canadian GAAP"), which will be applicable to the Company's financial
statements, would not result in any material differences from the Zemex
financial statements.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
--------------------- ------------------------------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
---------- ---------- ------------ ------------- -------------- --------------- --------------
(unaudited)
(dollars in thousands, except per share data)
U.S. GAAP
STATEMENT OF
OPERATIONS DATA:
<S> <C> <C> <C> <C> <C> <C> <C>
Net sales..................... $ 52,380 $ 48,899 $ 97,226 $ 86,420 $ 85,056 $ 55,306 $ 47,958
Reorganization and restruc.... -- -- -- 1,752 -- -- --
turing charge
Operating income.............. 4,792 4,020 8,371 3,066 8,342 5,841 1,237
Other income (expense)........ 1,163 1,033 (309) (1,403) (443) (262) 2,421
Net income.................... 2,502 1,926 5,793 2,612 8,418 6,250 1,852
Earnings per common share
Basic........................ $ 0.31 $ 0.24 $ 0.72 $ 0.33 $ 1.07 $ 1.21 $ 0.45
Fully diluted................. 0.29 0.24 0.70 0.32 1.03 1.12 0.40
BALANCE SHEET DATA
(AT PERIOD END)
Working capital............... $ 17,499 $ 19,789 $ 18,975 $ 18,688 $ 19,709 $ 26,046 $ 9,288
Total assets.................. 145,632 104,184 118,774 109,376 96,681 70,864 48,414
Long-term debt................ 40,234 14,042 20,527 17,797 7,485 5,461 8,735
Shareholders' equity.......... 78,874 69,031 76,535 70,997 70,900 54,052 26,530
</TABLE>
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MARKET AND TRADING PRICES OF SECURITIES
Zemex Common Stock
The closing sales price, as reported on the New York Stock Exchange Composite
Tape, for Zemex Common Stock on _________, 1998 was $_____. As of _______,
1998, the __________ outstanding shares of Zemex Common Stock were held by ___
holders of record. The following table sets forth, for the periods indicated,
the high and low closing sale prices of Zemex Common Stock as reported on the
New York Stock Exchange Composite Tape. In the fourth quarter of each of 1996,
1997 and 1998, Zemex declared a 2% stock dividend.
SALE PRICES
---------------
HIGH LOW
------ ------
1996
First Quarter................................$10.00 $ 8.88
Second Quarter............................... 9.63 7.50
Third Quarter................................ 8.13 6.88
Fourth Quarter............................... 8.88 7.00
1997
First Quarter................................ 7.75 6.75
Second Quarter............................... 8.00 6.75
Third Quarter................................ 9.50 7.88
Fourth Quarter............................... 10.94 7.94
1998
First Quarter................................ 9.63 7.81
Second Quarter............................... 10.44 8.75
Third Quarter................................ 9.19 6.00
Fourth Quarter (through November ___, 1998)..
Company Common Shares
There will be no public market for Company Common Shares before consummation of
the Reincorporation Merger. Upon consummation of the Reincorporation Merger,
the Company Common Shares are expected to be listed on the New York Stock
Exchange and on The Toronto Stock Exchange. The declaration and payment of
dividends by the Company will be subject to the discretion of its board of
directors.
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<PAGE>
RISK FACTORS
An investment in the Company Common Shares offered hereby involves certain
risks. In evaluating the Company and its business, investors should carefully
consider the following risk factors in addition to the other information
included herein.
ADVERSE TAX CONSEQUENCES
Generally, for U.S Federal income tax purposes, the Reincorporation Merger will
cause shareholders of Zemex Common Stock who are taxable as U.S. persons to
recognize gains, but not losses, with respect to their Zemex Common Stock. See
"Certain United States Federal Tax Consequences." To the extent that any
dividends are paid to United States shareholders of Company Common Shares after
the Reincorporation Merger, such dividends may be subject to Canadian
withholding taxes. See "Certain Canadian Federal Income Tax Considerations." In
addition, payments of dividends or interest by Zemex to the Company could also
be subject to United States withholding taxes. Finally, statutory income tax
rates are higher in Canada than in the United States; however, this is not
expected to materially affect the Company's current financial results.
POSSIBLE VOLATILITY OF STOCK PRICE
The market price of the Company Common Shares may be subject to significant
fluctuations in response to variations in results of operations and other
factors. Developments affecting the speciality materials industry generally,
including national and international economic conditions, currency fluctuations
and government regulation, could also have a significant impact on the market
price of the Company Common Shares. In addition, in recent years, the stock
market has experienced a high level of price and volume volatility and market
prices for the stock of many companies have experienced wide price fluctuations
which have not necessarily been related to the operating performance of such
companies. These broad market fluctuations, which are beyond the control of the
Company, could have a material adverse effect on the market price of the Company
Common Shares.
Prior to the Reincorporation Merger, there has been no public market for the
Company Common Shares (although there has been a public market for the Zemex
Common Stock) and no prediction can be made as to the effect, if any, that the
Reincorporation will have on the market price prevailing from time to time or
the liquidity of the Company Common Shares. While the Zemex Common Stock has
been, and the Company Common Shares will be, listed for trading on the New York
Stock Exchange, the change in domicile, and expected increase in investment
interest in Canada, may decrease the demand for the Company Common Shares in the
United States trading markets, which decrease may not be offset by increased
demand on The Toronto Stock Exchange.
In addition to the risk factors set forth above, which are risks relating to the
Reincorporation Merger, the Company will be involved in the same business as
Zemex, which business, like that of Zemex, is subject to the following risks,
which should be considered carefully in evaluating the Company and its business.
VULNERABILITY TO ECONOMIC CYCLES
The Company's future operating results will be highly dependent on the
economic environments in which it operates. In the past, demand for Zemex's
products has been adversely affected by recessionary pressures in the housing,
automotive, construction, transportation and durable goods industries. The
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<PAGE>
Company expects that product demand (and consequently results of operations)
will continue to be highly sensitive to North American economic conditions and
other factors beyond the Company's control.
ACQUISITION RISKS
Acquisition of speciality materials businesses has been a key element of Zemex's
success, and the Company will continue to seek acquisitions in the future.
Although Zemex has performed, and the Company will continue to perform, a review
that it believes is consistent with industry practices of the operations to be
acquired, such reviews are inherently incomplete. In addition, representations,
warranties and indemnities received from sellers may not be adequate to limit
acquisition risks. It is generally not feasible for the Company to review in-
depth all of the operations and records of an acquired business. Ordinarily,
the Company will focus most of its due diligence efforts on the operation's more
significant assets. However, even an in-depth review of operations and records
may not necessarily reveal existing or potential problems, nor will it permit a
buyer to become familiar enough with the operations to assess fully their
deficiencies and capabilities. Moreover, environmental problems, such as ground
water contamination, are not necessarily observable even when an in-depth
inspection is undertaken. The Company may assume environmental and other
liabilities in connection with acquired assets and operations.
SUBSTITUTE PRODUCTS
The Company believes that there are few current substitutes for Zemex's
products. If alternative products are discovered or developed, they could
potentially erode the Company's market share and adversely affect results of
operations.
COMPETITION
The speciality materials industry is highly competitive. The Company will
compete for acquisitions and in the development, production and marketing of
speciality materials with other companies. The Company will also compete with
respect to its sales based in part upon technological know-how, service and in
part upon price. Some of these competitors have substantially greater financial
and other resources than the Company. There can be no assurance that the
Company's competitors will not succeed in developing products based upon new
processor technologies that are more effective or less expensive than the
Company's products.
CAPITAL REQUIREMENTS
Zemex has utilized, and the Company will continue to utilize, bank debt in
addition to cash flow from operations to support its growth and to finance its
capital expansion program. Any significant reductions in the availability of
bank borrowings could have a material adverse effect on the Company's prospects.
IMPACT OF GOVERNMENT REGULATION
The Company's extraction and processing activities are subject to comprehensive
U.S. federal, state and local, Canadian federal and provincial and other foreign
laws and regulations relating to the environment and health and safety. Zemex
has, and the Company will continue to, regularly monitor and review operations,
procedures and policies for compliance with these laws and regulations. Despite
compliance efforts, risk of environmental and other damage is inherent in the
operations of its business, as it is with other companies engaged in similar
businesses. There is no assurance that the Company will not incur material
environmental liabilities in the future. Moreover, the historical trend toward
stricter environmental regulation may continue. Future events, such as changes
in, or modified interpretations of, existing laws and regulations or enforcement
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<PAGE>
policies or further investigation or evaluation of the potential health hazards
of certain products and environmental impact of certain processes may give rise
to additional compliance requirements and costs that could have a material
adverse effect on the Company.
EXTRACTION AND PROCESSING RISKS AND INSURANCE
The business of extraction and processing of industrial minerals and metal
powders is subject to many risks and hazards, including environmental hazards,
industrial accidents, periodic interruptions due to inclement weather
conditions, labor disputes, power interruptions, critical equipment failures,
fires, unusual or unexpected geological or mining conditions and flooding. Such
risks could result in damage to, or destruction of, extraction or processing
facilities, personal injury, environmental damage, delays in extraction or
production, monetary loss and possible legal liability. Although the Company
will maintain insurance within ranges of coverage consistent with industry
practice, no assurance can be given that such insurance will be adequate to
cover losses or continue to be available at economically acceptable rates in the
future. The Company may become subject to liability for pollution, accidents or
other hazards against which it is uninsured.
EXCHANGE RATES
Currency fluctuations may affect the revenue which the Company will realize from
its operations as its products are sold in the world market in United States
dollars. The costs of the Company will be incurred principally in Canadian
dollars and United States dollars. There is no guarantee that the fluctuations
in the value of such currencies will not have an adverse effect on the Company.
EMPLOYEE RELATIONS
A portion of the Company's workforce will be unionized and represented by
different unions. The current contracts expire at different times. If these
contracts are not renewed on their expiration, there is a risk of work stoppages
due to strike or lockout.
REINCORPORATION MERGER PROPOSAL
BACKGROUND OF THE REINCORPORATION MERGER PROPOSAL
The Board of Directors of Zemex has determined that it is advisable to change
Zemex's domicile from Delaware to Canada. A principle reason for the change in
domicile is that shares of a Canadian company would qualify as "qualified
property" that is not "foreign property" for Canadian Registered Retirement
Savings Plan purposes. Therefore, Canadian pension and retirement funds would
have greater flexibility to invest in such shares than in Zemex Common Stock.
Management believes that Canadian pension and retirement plans have substantial
interest in investment in natural resource and specialty material companies, and
that the ability of such funds to invest would positively affect the market for
equity securities in Canada.
Over the past 18 months, Zemex has pursued several acquisition proposals, each
of which would, if consummated, have resulted in Zemex being, or being part of,
a Canadian corporation. For various reasons, none of the acquisition
transactions were consummated, and the board is now proposing that the change of
domicile be effected directly pursuant to the Merger Agreement. Pursuant to the
Merger Agreement, shareholders of Zemex will become shareholders of the Company,
and Zemex will become a wholly-owned subsidiary of the Company. The change of
domicile will not result in any material change to the business
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<PAGE>
of Zemex and will not have any effect on the relative equity or voting interests
of Zemex's shareholders in the Zemex business, but will, however, result in
certain changes in the rights and obligations of current Zemex shareholders
under applicable corporate and tax laws. See "Risk Factors", "Comparative Rights
of Shareholders", "Certain United States Federal Tax Considerations" and
"Certain Canadian Federal Income Tax Considerations".
PURPOSES AND EFFECTS OF THE CHANGE OF DOMICILE
The purpose of the Reincorporation Merger is to change Zemex's domicile from
Delaware to Canada, which the Zemex board of directors believes will afford
greater access to the Canadian capital markets and investors (which have a
significant interest in natural resource companies). The expected dual listing
of the Company Common Shares for trading on the New York Stock Exchange and The
Toronto Stock Exchange should also enhance liquidity for shareholders through
the creation of a broader and deeper trading market.
RECOMMENDATION OF THE ZEMEX BOARD OF DIRECTORS
THE BOARD OF DIRECTORS OF ZEMEX HAS UNANIMOUSLY APPROVED THE PROPOSED
TRANSACTION AND RECOMMENDS THAT SHAREHOLDERS APPROVE THE MERGER AGREEMENT. In
reaching its decision, the board reviewed the fairness to Zemex and its
shareholders of the proposed transactions and considered, without assigning
relative weights to, the following factors:
(i) the belief of the board of directors that the Reincorporation Merger
should provide greater access to the Canadian capital markets and
investors, which the board believes have a significant interest in
mining and other natural resource issues;
(ii) the belief of the board of directors that liquidity for shareholders
of the Company should be enhanced by the dual listing of the Company
Common Shares for trading on The Toronto Stock Exchange and the New
York Stock Exchange;
(iii) the belief that adverse tax consequences of the proposed transaction
will be minimized due to the current low trading price of the Zemex
Common Stock. For U.S. tax purposes, a Zemex stockholder who is a
U.S. person must recognize taxable gains, but not losses, on his
Zemex stock;
(iv) the fact that Zemex's principal executive office is currently
located in Canada, and that it has, through operations in Canada,
established relationships with the investment and mining communities
in Canada; and
(v) the fact that the shareholders have an opportunity to vote on the
Reincorporation Merger.
Without relying on any single factor listed above more than any other factor,
the Zemex board of directors, based upon its consideration of all such factors
taken as a whole, has concluded that the proposed transaction is fair to Zemex
and its shareholders. ACCORDINGLY, THE ZEMEX BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE REINCORPORATION MERGER.
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<PAGE>
MERGER AGREEMENT
The following summary of the terms of the Merger Agreement is qualified in its
entirety by reference to the full text of the Merger Agreement, attached as
Annex A to this Proxy Statement/Prospectus.
GENERAL
Under the terms of the Merger Agreement, Zemex Acquisition Corporation, a newly
formed subsidiary of the Company ("Zemex Acquisition"), will merge with and into
Zemex, the separate corporate existence of Zemex Acquisition will cease, Zemex
will be the surviving corporation, each previously outstanding share of Zemex
Acquisition common stock will be converted into one share of Zemex Common Stock
and each previously outstanding share of Zemex Common Stock will be converted
into one Company Common Share (the "Merger Consideration"). The previously
outstanding Company Common Shares will be canceled. As a result of the
foregoing, upon consummation of the Reincorporation Merger, Zemex will become a
wholly-owned subsidiary of the Company, and the current shareholders of Zemex
will own all of the outstanding Company Common Shares. In the Reincorporation
Merger, Zemex will change its name to Zemex U.S. Corporation and immediately
prior to the Reincorporation Merger, the Company will change its name to Zemex
Corporation. For accounting purposes, the assets and liabilities of the Company
and its subsidiaries on a consolidated basis immediately after the consummation
of the Reincorporation Merger will be substantially identical to the assets and
liabilities of Zemex and its subsidiaries on a consolidated basis immediately
prior to the Reincorporation Merger.
EFFECTIVE TIME OF THE REINCORPORATION MERGER
The Reincorporation Merger will become effective (the "Effective Time") upon (a)
the approval of the Merger Agreement by the shareholders of Zemex and Zemex
Acquisition, (b) the delivery of a duly executed and verified certificate of
merger to the Secretary of State of the State of Delaware, and (c) the
satisfaction or waiver of the other conditions set forth below. See "--
Conditions to the Consummation of the Reincorporation Merger." It is anticipated
that the certificate of merger will be filed shortly after the special meeting
of Zemex shareholders.
CONDITIONS TO THE CONSUMMATION OF THE REINCORPORATION MERGER
The obligation of each of the parties to the Merger Agreement to effect the
Reincorporation Merger is subject to the satisfaction of certain conditions at
or prior to the Effective Time, including
(a) the shareholders of Zemex and Zemex Acquisition shall have duly
approved the transactions contemplated by the Merger Agreement,
(b) no action, suit or proceeding shall be pending or threatened before
any court or quasi-judicial or administrative agency of any federal, state,
local or foreign jurisdiction or before any arbitrator or other governmental
entity wherein an unfavorable injunction, judgment, order, decree, ruling or
charge would
(i) prevent consummation of any of the transactions contemplated
by the Merger Agreement,
(ii) cause any of the transactions contemplated by the Merger
Agreement to be rescinded following consummation,
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<PAGE>
(iii) cause the Company or Zemex, or any of their officers or
directors, to become liable for any material damages, or
(iv) affect adversely the right of the surviving corporation
after the Reincorporation Merger to own the former assets or
to operate the former businesses of Zemex (and no such
injunction, judgment, order, decree, ruling or charge shall
be in effect) and there shall not have been any statute,
rule or regulation enacted, promulgated or deemed applicable
to the Reincorporation Merger by any governmental entity
which prevents the consummation of the Reincorporation
Merger,
(c) there shall not have been a breach of any representation, warranty,
covenant or agreement of Zemex, the Company, or Zemex Acquisition set forth in
the Merger Agreement which, individually or in the aggregate, would have a
material adverse effect on Zemex, and
(d) the Company Common Shares shall have been listed for trading on the New
York Stock Exchange and the Toronto Stock Exchange.
The Merger Agreement also provides that, subject to certain limitations, any
term or provision of the Merger Agreement may be waived by written agreement of
Zemex.
THIRD PARTY CONSENTS
No material consent, approval or authorization of or filing with any
governmental entity is required in connection with the consummation of the
Reincorporation Merger, other than (a) the approval of the shareholders of Zemex
and Zemex Acquisition in accordance with the laws of the State of Delaware, and
(b) filing with the Secretary of State of the State of Delaware the certificate
of merger with respect to the Reincorporation Merger.
EXCHANGE OF SHARE CERTIFICATES
No exchange of certificates that, prior to the Effective Time, represented
shares of Zemex Common Stock ("Certificates") is required with respect to the
Reincorporation Merger and the transactions contemplated by the Merger
Agreement. Promptly after the Effective Time, The Montreal Trust Company of
Canada (the "Exchange Agent"), shall mail to each record holder of Certificates
that immediately prior to the Effective Time represented shares of Zemex Common
Stock a letter of transmittal and instructions for use in surrendering such
Certificates. Upon the surrender of each such Certificate formerly representing
such shares, together with a properly completed letter of transmittal, the
Exchange Agent shall issue in respect thereof a common share certificate of the
Company representing the Company Common Shares in exchange therefor, and such
Certificate shall forthwith be canceled. Until so surrendered and exchanged,
each such Certificate shall represent solely the right to receive the Merger
Consideration.
EMPLOYEE MATTERS; STOCK OPTIONS
Following the Reincorporation Merger, Zemex will continue pension benefit plans
for Zemex employees, most of whom will continue to be employed by Zemex (and not
the Company) following the Merger. The cost of such plans is expected to be
consistent with costs historically incurred by Zemex for employee benefits.
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As of the Effective Time, all options to purchase shares of Zemex Common Stock
granted or issued prior to the Effective Time and all rights to purchase Zemex
Common Stock arising under Zemex stock purchase plans will entitle the holder to
purchase an equal number of Company Common Shares. After the Effective Date,
the Company will adopt new option and stock purchase plans to replicate Zemex's
existing plans. Future options and rights would be subject to and governed by
the terms of such new option plan, purchase plan or plans and any agreements
executed pursuant thereto. At the Effective Time, Zemex's existing option and
stock purchase plans will be canceled and terminated.
INDEMNIFICATION
From and after the Effective Time, the Company will, for a period of at least
six years following the Effective Time, indemnify any current or former
directors and officers of Zemex or any of Zemex's subsidiaries against all
losses and liabilities arising out of their service in such capacities prior to
and including the Effective Time. The Company has also included provisions in
its bylaws for the limitation of liability of directors and indemnification of
directors and officers to the fullest extent permitted by applicable law.
TERMINATION
The Merger Agreement may be terminated and the Reincorporation Merger may be
abandoned at any time, either before or after approval thereof by the
shareholders of Zemex, by action of the board of directors of Zemex.
VOTING AND PROXY INFORMATION
SPECIAL MEETING
A special meeting of the Zemex shareholders will be held at 1:00 p.m. on Friday,
December 18, 1998, at The Chase Manhattan Bank, Room "C," 11th Floor, 270 Park
Avenue, New York, New York 10017 (or at any adjournments or postponements
thereof) to consider and vote on the proposal to approve the Merger Agreement
and any other matters that may properly come before such meeting. The presence,
in person or by proxy, of shareholders holding a majority of the outstanding
Zemex Common Stock will constitute a quorum.
The vote of any Zemex shareholder who is represented at the special meeting by
proxy will be cast as specified in the proxy. If no vote is specified in a duly
executed and delivered proxy, such vote will be cast FOR the proposal. Any
Zemex shareholder of record who is present at the special meeting in person will
be entitled to vote at the meeting regardless of whether he has previously
granted a proxy with respect thereto.
THE BOARD OF DIRECTORS OF ZEMEX HAS APPROVED THE PROPOSED REINCORPORATION MERGER
AND RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE APPROVAL OF THE MERGER AGREEMENT.
RECORD DATE
Only Zemex shareholders of record at the close of business on November 10,
1998, as shown on Zemex's records, will be entitled to vote, or to grant proxies
to vote, at the special meeting.
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VOTE REQUIRED FOR APPROVAL
Approval of the Merger Agreement requires the affirmative vote of the
shareholders of Zemex holding at least a majority of the outstanding Zemex
Common Stock. Abstentions and director "non-votes" will have the effect of
votes against the approval of the Merger Agreement. As of the record date
described above, there were __________ shares of Zemex Common Stock outstanding
and entitled to vote. In addition, as of the record date, the directors and
executive officers of Zemex and affiliates of such persons directly owned, in
the aggregate, _____ shares (approximately ____%) of the total number of shares
of Zemex Common Stock outstanding. In addition, Dundee Bancorp International
Inc. owns approximately 34% of the outstanding Zemex Common Stock. Such persons
have indicated that they will vote all such shares of Zemex Common Stock for the
approval of the Merger Agreement.
PROXIES
General
Each Zemex shareholder as of the record date will receive a Proxy Card. A
shareholder of Zemex may grant a proxy to vote for or against, or to abstain
from voting on, the proposal to approve the Merger Agreement by marking his/her
Proxy Card appropriately, executing it in the space provided, and, in the case
of shareholders of Zemex Common Stock appearing on the stock records of Zemex,
returning it to the Transfer Agent in the envelope provided with the Proxy Card.
Zemex shareholders who hold their Zemex Common Stock in the name of a bank,
broker or other nominee should follow the instructions provided by their bank,
broker or nominee on voting their shares.
TO BE EFFECTIVE, A PROXY CARD MUST BE RECEIVED PRIOR TO THE SPECIAL MEETING. ANY
PROPERLY EXECUTED PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATION
INDICATED ON SUCH PROXY CARD. A PROPERLY EXECUTED AND RETURNED PROXY CARD IN
WHICH NO SPECIFICATION IS MADE WILL BE VOTED FOR THE PROPOSAL TO APPROVE THE
MERGER AGREEMENT.
If any other matters are properly presented at the special meeting for
consideration, including consideration of a motion to adjourn the meeting to
another time and/or place (including adjournment for the purpose of soliciting
additional proxies), the persons named in the Proxy Card and acting thereunder
will have discretion to vote on such matters in accordance with their best
judgment.
Revocation
In the case of shareholders of Zemex Common Stock appearing on the stock records
of Zemex, a Proxy Card may be revoked at any time prior to its exercise by (a)
giving written notice of such revocation to the Transfer Agent, (b) appearing
and voting in person at the special meeting, or (c) properly completing and
executing a later-dated proxy and delivering it to Transfer Agent at or before
the special meeting. Presence without voting at the special meeting will not
automatically revoke a proxy, and any revocation during the meeting will not
affect votes previously taken. Zemex shareholders who hold their Zemex Common
Stock in the name of a bank, broker or other nominee should follow the
instructions provided by their bank, broker or nominee in revoking their
previously voted shares.
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Validity
All questions as to the validity, form, eligibility (including time of receipt),
and acceptance of Proxy Cards will be determined by the Zemex board of
directors. Any such determination will be final and binding. The Zemex board
of directors will have the right to waive any irregularities or conditions as to
the manner of voting. Zemex may accept proxies by any reasonable form of
communication so long as can be reasonably assured that the communication is
authorized by the Zemex shareholder.
DISSENTERS' RIGHTS
Under Section 262(b) of the Delaware General Corporation Law ("DGCL"), appraisal
rights are not available to a corporation in a merger (i) whose shares prior to
the merger were listed on a national securities exchange, and (ii) the
shareholders of which receive in the merger shares of a corporation that are
listed for trading on a national securities exchange. Because the Zemex Common
Stock was, and the Company Common Shares will be, listed for trading on the New
York Stock Exchange, Zemex shareholders will not have appraisal rights in the
Reincorporation Merger.
COMPARATIVE RIGHTS OF SHAREHOLDERS
At the Effective Time, the shareholders of Zemex, a Delaware corporation, will
become shareholders of the Company, a Canadian corporation organized under the
CBCA. Differences between the CBCA and the DGCL will result in various changes
in the rights of shareholders of Zemex.
The following is a summary of the rights of Zemex shareholders compared to those
of Company shareholders under applicable law and charter documents. This
summary does not purport to be complete and is qualified in its entirety by
reference to the Company's charter documents (the "Articles"), the text of which
is attached to the Registration Statement of which this Proxy
Statement/Prospectus is a part as Exhibit 3.1 and the Company's Bylaw No. 1 (the
"Bylaws"), the text of which is attached to the Registration Statement of which
this Proxy Statement/Prospectus is a part as Exhibit 3.2.
Removal of Directors; Filling Vacancies on the Board of Directors. Under both
the CBCA and the DGCL, directors generally may be removed, with or without
cause, by a vote of the holders of a majority of the shares entitled to vote in
an election of directors.
The CBCA provides that, subject to any contrary provision in a corporation's
articles, a vacancy among the directors, other than a vacancy resulting from an
increase in the number or minimum number of directors or from a failure to elect
the number or minimum number of directors or from a vacancy in the term of a
director elected exclusively by holders of a given class or series of shares,
may be filled, for the unexpired term of the predecessor, by a vote of a quorum
of the directors or by the remaining director(s) elected by such class or
series, as applicable. Under the Company's Articles, directors may fill
vacancies, but the number of directors so appointed may not exceed one-third of
the number of directors elected at the previous annual meeting of shareholders.
Adjournment and Notice of Shareholder Meetings. The CBCA and the DGCL both
provide that a meeting of shareholders may be adjourned by one or more
adjournments for up to 30 days without, subject to the bylaws, giving notice of
the adjourned meeting other than by announcement at the earliest meeting
adjourned. If the meeting is adjourned by one or more adjournments for an
aggregate of 30 days or more, the CBCA
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requires that the same notice be given as for an original meeting. If the
meeting is adjourned for more than 30 days, the DGCL requires that notice be
given as for an original meeting. Under the CBCA, notice of shareholder meetings
must be given between 21 and 50 days (inclusive) before a meeting. Under the
DGCL, notice of shareholder meetings must be given no less than 10 and no more
than 60 days before a meeting.
Call of Special Shareholder Meetings. Under the CBCA, special meetings of
shareholders may be called by the board of directors and must be called by the
board of directors when so requested by holders of not less than 5% of the
shares entitled to vote at the proposed meeting. The DGCL provides that special
meetings of shareholders may be called by the board of directors or by a person
authorized by the charter or bylaws.
Shareholder Consent in Lieu of Meeting. Under the CBCA, shareholder action
without a meeting may only be taken by written resolution signed by all
shareholders who would be entitled to vote thereon at a meeting. Under the DGCL,
unless otherwise provided in the charter, action by shareholders may be taken
without a meeting if a consent in writing, setting forth the action so taken, is
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote on the given matter were present
and voted.
Nomination of Directors. The CBCA provides that shareholders may nominate
candidates for election as directors at an annual meeting of shareholders by
means of a shareholder proposal which is signed by one or more holders of shares
representing at least 5% of a class of the shares entitled to vote at the
meeting at which the proposal is presented if the proposal is submitted to the
corporation at least 90 days before the anniversary date of the previous annual
meeting of shareholders, but this provision does not preclude nominations made
at the shareholders meeting. Similarly, regulations under the Exchange Act set
forth procedures and guidelines to be followed by shareholders wishing to
nominate directors, including the information to be given to other shareholders
regarding the nominee and the timing of disseminating such information.
Business Introduced by Shareholders at Annual Meetings. The CBCA provides that
a shareholder entitled to vote at an annual meeting of shareholders may submit
to the corporation a notice of any matter he proposes to raise at the meeting (a
"shareholder proposal") which the corporation must set out in or attach to the
management proxy circular for such meeting. A shareholder can discuss any
matter at a meeting in respect of which he would be entitled to submit a
shareholder proposal. The shareholder proposal must be submitted to the
corporation at least 90 days prior to the anniversary date of the last annual
meeting, and the shareholder can require the corporation to include a statement
of not more than 200 words by the shareholder in support of the proposal in the
management proxy circular. A corporation does not have to entertain shareholder
proposals which are primarily self-serving for the shareholder, which have been
included in a management proxy circular within the past two years and were
defeated, or which are submitted by a shareholder who has failed to present a
proposal, included at his request in a management or dissident proxy circular,
at a meeting held within the past two years. Similarly, regulations under the
Exchange Act set forth procedures and guidelines to be followed by shareholders
wishing to include a proposal in a corporation's proxy materials, including the
timing of notification to the corporation, the length of any shareholder
proposal included in proxy materials and the grounds for omitting any
shareholder proposal from such proxy materials.
Dissenter's Rights. The DGCL generally entitles a holder to an appraisal of the
fair value of his shares by the Delaware Court of Chancery upon a merger of the
corporation effected pursuant to the DGCL if the holder complies with the
requirements of Section 262 thereof. The DGCL, however, does not provide
(unless required by a charter provision) appraisal rights for shareholders of a
corporation if either (i) the corporation before the merger or consolidation was
listed on a national securities exchange or designated as a national market
system security on an interdealer quotation system, (ii) the stock of the
corporation was held by more
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than 2,000 shareholders, or (iii) the corporation survived the merger and the
approval of its shareholders was not required for the merger because the merger
agreement did not amend the surviving corporation's certificate of incorporation
and did not provide for the issuance of common stock of the survivor in excess
of 20% of such survivor's shares outstanding immediately prior to the merger or
the merger was with or into a wholly-owned subsidiary and certain conditions
were met.
The CBCA provides that shareholders of a CBCA corporation are entitled to
exercise dissenter's rights and to be paid the fair value of their shares in
connection with certain matters including (a) any amalgamation with another
corporation (other than with certain affiliated corporations); (b) an amendment
to a corporation's articles to add, change or remove any provisions restricting
or constraining the issue, transfer or ownership of shares of the class held by
holders of the class so affected; (c) an amendment to a corporation's articles
to add, change or remove any restriction upon the business or businesses that
the corporation may carry on; (d) a continuance under the laws of another
jurisdiction; (e) a sale, lease or exchange of all or substantially all the
property of the corporation other than in the ordinary course of business; (f) a
court order permitting a shareholder to dissent in connection with an
application to the court for an order approving an arrangement proposed by the
corporation; or (g) a matter which requires a separate class or series vote;
provided, that a shareholder is not entitled to dissent if an amendment to the
articles is effected by a court order approving a reorganization or by a court
order made in connection with an action for an oppression remedy. Under the
CBCA, a shareholder may, in addition to exercising dissent rights, seek an
oppression remedy for any act or omission of a corporation which is oppressive,
unfairly prejudicial to or that unfairly disregards a shareholder's interest
(see discussion below under "Oppression Remedy").
Derivative Action. Derivative actions may be brought in Delaware by a
shareholder on behalf of, and for the benefit of, the corporation. The DGCL
provides that a shareholder must aver in the complaint that he was a shareholder
of the corporation at the time of the transaction of which he complains.
However, no action may be brought by a shareholder unless he first seeks
remedial action on his claim from his corporation's board of directors unless
such a demand for redress is excused. The board of directors of a Delaware
corporation can appoint an independent litigation committee to review a
shareholder's request for a derivative action and the litigation committee,
acting independently, reasonably and in good faith, can terminate the
shareholder's action subject to a court's review of such committee's
independence, good faith and reasonable investigation. Under the DGCL, the
court in a derivative action may apply a variety of legal and equitable remedies
on behalf of the corporation which vary depending on the facts and circumstances
of the case and the nature of the claim brought.
The CBCA also permits derivative actions. Under the CBCA, a complainant may
apply to the court for leave to bring an action in the name of and on behalf of
a corporation or any subsidiary, or to intervene in an existing action to which
the corporation is a party, for the purpose of prosecuting, defending or
discontinuing the action on behalf of the corporation. A complainant may
include: (a) present or former registered holders or beneficial owners of
securities of a corporation or any of its affiliates; (b) present or former
officers or directors of the corporation or any of its affiliates; (c) the
Director under the CBCA; or (d) any other person who in the discretion of the
court is a proper person to make such application. Under the CBCA, no action
may be brought and no intervention in an action may be made unless the court is
satisfied that (a) the complainant has given reasonable notice to the directors
of the corporation or its subsidiary of his intention to apply to the court if
the directors of the corporation or its subsidiary do not bring, diligently
prosecute or defend or discontinue the action; (b) the complainant is acting in
good faith; and (c) it appears to be in the interests of the corporation or its
subsidiary that the action be brought, prosecuted, defended or discontinued.
Under the CBCA, the court in a derivative action may make any order it thinks
fit, including, without limitation, (i) an order authorizing the complainant or
any other person to control the conduct of the action,
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(ii) an order giving directions for the conduct of the action, (iii) an order
directing that any amount adjudged payable by a defendant in the action shall be
paid, in whole or in part, directly to former and present security holders of
the corporation or its subsidiary instead of to the corporation or its
subsidiary, or (iv) an order requiring the corporation or its subsidiary to pay
reasonable legal fees incurred by the complainant in connection with the action.
Additionally, under the CBCA a court may order a corporation or its subsidiary
to pay the complainant's interim costs, including legal fees and disbursements.
Although the complainant may be held accountable for the interim costs on final
disposition of the complaint, it is not required to give security for costs in a
derivative action.
Oppression Remedy. The DGCL does not provide a statutory oppression remedy.
However, the DGCL provides a variety of legal and equitable remedies to a
corporation's shareholders for improper acts or omissions of a corporation, its
officers or directors. Under the DGCL, only shareholders can bring an action
alleging a breach of fiduciary duty by the directors of a corporation. In order
to be successful, the shareholder must overcome the "business judgment rule,"
which, simply stated, means that absent a showing of intentional misconduct,
gross negligence or a conflict of interest, disinterested directors' decisions
are presumed (subject to rebuttal) by the courts to have been made in good faith
and in the best interests of the corporation.
Unlike the DGCL, the CBCA contains a statutory oppression remedy that enables
the court to make any order, both interim and final, to rectify the matters
complained of if satisfied upon application by a complainant (as defined above
under "Derivative Action") that (i) any act or omission of the corporation or an
affiliate effects a result, (ii) the business or affairs of the corporation or
an affiliate are or have been carried on or conducted in a manner, or (iii) the
powers of the directors of the corporation or an affiliate are or have been
exercised in a manner, that is oppressive or unfairly prejudicial to or that
unfairly disregards the interests of any security holder, creditor, director or
officer. Because of the breadth of the conduct which can be complained of and
the scope of the court's remedial powers, the oppression remedy is very flexible
and is frequently relied upon to safeguard the interests of shareholders and
other complainants with a substantial interest in the corporation. Under the
CBCA, a complainant does not have to provide that the directors of a corporation
acted in bad faith in order to seek an oppression remedy. Furthermore, the
court may order the corporation to pay the interim expenses of a complainant
seeking an oppression remedy but the complainant may be held accountable for
such interim costs on final disposition of the complaint (as in the case of a
derivative action).
Dividends and Distributions. Subject to any restrictions contained in a
corporation's charter, the DGCL generally provides that the directors of a
corporation may declare and pay dividends out of surplus (defined as the excess,
if any, of net assets over stated capital) or, when no surplus exists, out of
net profits for the fiscal year in which the dividend is declared and/or the
preceding fiscal year. Dividends may not be paid out of net profits if the
stated capital of the corporation is less than the aggregate amount of stated
capital represented by the issued and outstanding stock of all classes having a
preference upon the distribution of assets.
Under the CBCA, directors of a corporation shall not declare or pay a dividend
if there are reasonable grounds for believing that the corporation is, or would
after the payment be, unable to pay its liabilities as they become due or if the
realizable value of the corporation's assets would thereby be less than the
aggregate of its liabilities and stated capital of all classes.
Director Qualifications and Number. A majority of the directors of a CBCA
corporation must be resident Canadians. The DGCL has no comparable
requirements. The articles of a CBCA corporation must specify the number or a
minimum and maximum number of directors. Where the articles specify a range,
the
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shareholders normally initially determine the precise number within such range
and thereafter delegate this power to the directors. The number of directors of
a Delaware corporation shall be fixed by, or in the manner provided in, the
bylaws, unless the charter fixes the number of directors.
Indemnification of Officers and Directors. The DGCL essentially authorizes a
corporation to indemnify its directors, officers, employees and agents (each, an
"indemnitee") against all reasonable expenses (including attorneys' fees) and
against all judgments, fines and amounts paid in settlement of actions brought
against them. Indemnification is only available if such individual is
determined to have acted in good faith and in a manner which he reasonably
believed to be in, or not opposed to, the best interests of the corporation and,
in the case of a criminal proceeding, had no reasonable cause to believe his
conduct was unlawful. However, in actions initiated by or on behalf of the
corporation, no indemnification shall be made if such individual shall have been
adjudged to be liable to the corporation, unless and only to the extent that the
court in which such action or suit was brought determines that, despite the
adjudication of liability and considering all circumstances of the case, such
individual is fairly and reasonably entitled to indemnification for the expenses
which such court shall deem proper. The DGCL contemplates that the
determination of a corporation as to whether the indemnitee is entitled to
indemnification is to be made by a majority vote of the directors (even if less
than a quorum), by independent legal counsel in a written opinion if there are
no such directors or if such directors so direct, or by the shareholders.
Under the CBCA, a corporation may, except in respect of an action by or on
behalf of such corporation, indemnify a director or officer, a former director
or officer, or a person who acts or has acted at the corporation's request as a
director or officer of a body corporate of which the corporation is or was a
shareholder or creditor against all costs, charges and expenses, including an
amount paid to settle an action or satisfy a judgment, reasonably incurred by
him in respect of any civil, criminal or administrative action or proceeding to
which he is made a party by reason of being or having been a director or officer
of such corporation or such body corporate if (a) he acted honestly and in good
faith with a view to the best interests of the corporation and (b), in the case
of a criminal or administrative action or proceeding that is enforced by a
monetary penalty, he had reasonable grounds for believing that his conduct was
lawful. In respect of an action by or on behalf of such corporation or body
corporate, a corporation may, with court approval, provide indemnification
against all costs, charges and expenses reasonably incurred by such persons in
connection with such action who fulfill the conditions set forth in (a) and (b)
immediately above.
Under the DGCL, there is in effect a right of mandatory indemnification for
expenses reasonably incurred to the extent that an indemnitee is successful on
the merits or otherwise in the defense of any action, claim, issue or matter
associated with an action. Under the CBCA, a director or officer, a former
director or officer or a person who acts, or has acted at a corporation's
request as a director of officer of a body corporate of which such corporation
is or was a shareholder or creditor is entitled to indemnity from the
corporation in respect of all costs, charges and expenses reasonably incurred by
him in connection with the defense of any civil, criminal or administrative
action or proceeding to which he is made a party by reason of being or having
been a director or officer of the corporation or body corporate if (a) he was
substantially successful on the merits in his defense of the action or
proceeding and (b)(i) he acted honestly and in good faith with a view to the
best interests of the corporation and (ii) in the case of a criminal or
administrative action or proceeding that is enforced by a monetary penalty, he
had reasonable grounds for believing that his conduct was lawful. The DGCL
allows for the advance payment of an officer's or director's expenses prior to
the final disposition of an action, provided that the officer or director
undertakes to repay any such amount advanced if it is later determined that the
indemnitee is not entitled to indemnification with regard to the action for
which the expenses were advanced. Payment of such expenses incurred by other
employees or agents of the corporation is at the discretion of the board of
directors.
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The DGCL permits a corporation to maintain insurance on behalf of an indemnitee
against any liability or expenses incurred in the capacity in which he serves
the corporation or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such expenses and
liabilities under the applicable provisions of the DGCL. The CBCA permits a
corporation to purchase and maintain insurance for a director or officer of the
corporation, a former director or officer of the corporation or a person who
acts or has acted at a corporation's request as a director or officer of a body
corporate of which such corporation is or was a shareholder or creditor against
any liability incurred by him (a) in his capacity as a director or officer of
the corporation, except where the liability relates to his failure to act
honestly and in good faith with a view to the best interests of the corporation,
or (b) in his capacity as a director or officer of another body corporate where
he acts or acted in that capacity at the corporation's request, except where the
liability relates to his failure to act honestly and in good faith with a view
to the best interests of the body corporate. In addition, the DGCL provides
that the indemnification rights provided by the provisions described above are
not exclusive of any other rights to which such indemnitee may be entitled under
any bylaw, agreement, vote of shareholders or disinterested directors or
otherwise. The CBCA does not expressly provide for any such arrangements.
Director Liability. The charter of a Delaware corporation may include a
provision which limits or eliminates the personal liability of directors to the
corporation or its shareholders for monetary damages for breach of fiduciary
duty as a director, provided such liability does not arise from certain
proscribed conduct, including intentional misconduct and breach of the duty of
loyalty. The CBCA does not permit any such limitation of a director's
liability.
Amendment to Internal Affairs. The DGCL requires the approval of the holders of
a majority of the outstanding stock entitled to vote for any amendment to the
certificate of incorporation unless such level of approval is increased by the
certificate of incorporation. Moreover, if the amendment to the certificate of
incorporation proposes to change the number or par value of shares or adversely
affect the rights of a particular class of stock, that class is entitled to vote
separately on the amendment, whether or not it is designated as voting stock.
The DGCL also provides shareholders with the right to amend the bylaws, although
a corporation is permitted in its charter to give this right to the directors as
well, subject to any director action being amended by shareholders.
Under the CBCA, any amendment to the articles generally requires approval by
special resolution, which is a resolution passed by a majority of not less than
two-thirds of the votes cast by the shareholders who vote on the resolution.
The CBCA provides that those shareholders entitled to vote at shareholder
meetings may confirm, reject or amend any bylaw or amendment or repeal of a
bylaw submitted by directors by "ordinary resolution" (as defined in the CBCA),
which must be passed by a majority of the votes cast by shareholders who voted
thereon. Shareholders may also make a proposal to make, amend or repeal a bylaw
subject to compliance with the CBCA requirements in respect of shareholder
proposals described above under "Business Introduced by Shareholders at Annual
Meetings."
Vote Required for Extraordinary Corporate Transactions. Under the DGCL, a
merger or consolidation requires the approval of a majority of each constituent
corporation's shareholders entitled to vote thereon except (i) for a corporation
which survives the merger where the merger requires the issuance of common stock
not exceeding 20% of such corporation's shares outstanding immediately prior to
the merger, the merger agreement does not amend in any respect the survivor's
certificate of incorporation, each share of such corporation's stock outstanding
immediately prior to a merger is to be an identical outstanding or treasury
share of the surviving corporation after the merger, and shareholder approval is
not specifically mandated in the survivor's certificate of incorporation; (ii)
for both corporations where the corporation surviving the merger was a 90%
parent of the other corporation; and (iii) where a corporation merges with or
into a wholly-
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owned subsidiary and certain conditions are met. A dissolution and a sale of
substantially all of a corporation's assets also require the approval of a
majority of shareholders entitled to vote thereon. The DGCL provides that unless
a greater percentage is required by the charter, the approval of a merger,
consolidation, dissolution or sale of assets requires the affirmative vote of
the holders of a majority of the shares entitled to vote.
Under the CBCA, certain extraordinary corporate actions, such as certain
amalgamations, continuances, sales, leases or exchanges of all or substantially
all the assets of a corporation other than in the ordinary course of business,
and other extraordinary corporate actions such as liquidations, dissolutions or
(if ordered by a court) arrangements, are required to be approved by special
resolution (a resolution passed by a majority of not less than two- thirds of
the votes cast by the shareholders who voted on the resolution) of the holders
of all shares, whether or not the shares are designated as voting shares in the
corporation's articles. In certain cases, such special resolution is also
required to be approved by shareholders separately as a class or series.
Under the CBCA, a takeover bid in respect of a corporation means an offer,
subject to certain statutory exceptions, made to shareholders of such
corporation at approximately the same time to acquire shares that, if combined
with shares already beneficially owned or controlled, directly or indirectly, by
the offeror or affiliates or associates of the offeror on the date of the
takeover bid, would exceed 10% of any class of issued shares of the corporation
and includes every offer, subject to certain statutory exceptions, by the
corporation to repurchase its own shares (which is generally termed an issuer
bid under provincial securities legislation). Takeover bids (with a 20%
threshold instead of a 10% threshold) and issuer bids are also defined and
regulated under provincial securities legislation. There are differences in
such definitions and in the rules applicable to such bids from those contained
in the CBCA. Takeover bids or issuer bids in respect of a corporation
incorporated under the CBCA are, however, subject to the applicable provisions
of both the CBCA and relevant provincial securities legislation.
As a general matter, any takeover bid or issuer bid in respect of a corporation
must be made to all holders resident in Canada of securities of the class that
is subject to the bid, such holders must be offered identical consideration and
the bid must otherwise be made in compliance with applicable provisions of the
CBCA and provincial securities legislation governing bids, subject to limited
statutory exemptions. In particular, the CBCA excludes an exempt offer, which
includes an offer to fewer than 15 shareholders to purchase shares by way of
separate agreements, from the CBCA definition of a takeover bid. The scope of
such exemption is limited, however, by the analogous statutory exemptions in the
securities legislation of certain provinces. For example, the Securities Act
(Ontario) provides for a statutory exemption for a takeover bid (but not an
issuer bid) where purchases are made from not more than five persons or
companies in the aggregate, the bid is not made generally to securityholders of
the subject class of securities and the value of the consideration paid for any
of the securities, including brokerage fees or commissions, does not exceed 115%
of the market price of the securities of that class at the date of the bid
determined in accordance with the applicable legislation.
In addition, provincial securities legislation of certain provinces, including
Ontario, provides for integration of a subsequent take-over bid that is a formal
bid or an issuer bid with prior pre-bid private transactions and restrictions on
post-bid acquisitions. Subject to a limited exemption, under the Securities Act
(Ontario), where a takeover bid that is a formal bid or an issuer bid is made by
an offeror and, within the period of 90 days immediately preceding the bid, the
offeror acquired beneficial ownership of securities of the class subject to the
bid pursuant to a transaction not generally available to holders of that class
of securities,
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(a) the offeror must offer consideration for securities deposited
under the bid at least equal to the highest consideration that
was paid on a per security basis under any of such prior
transactions or the offeror shall offer at least the cash
equivalent of such consideration; and
(b) the offeror must offer to acquire under the bid that percentage
of securities of the class subject to the bid that is at least
equal to the highest percentage that the number of securities
acquired from a seller in such a prior transaction was of the
total number of securities of that class beneficially owned by
such seller at the time of the prior transaction.
An offeror is also prohibited from acquiring beneficial ownership of securities
of the class that was subject to the bid by way of a transaction that is not
generally available on identical terms to the holders of that class of
securities during the period beginning with the expiry of the bid and ending at
the end of the twentieth business day thereafter, and whether or not any
securities are taken up under the bid.
Ontario Securities Commission Policy No. 9.1 ("Policy 9.1") provides for
additional requirements in connection with insider bids, issuer bids, going-
private transactions and related party transactions.
An insider bid means a takeover bid (as defined in the Securities Act (Ontario))
made by an insider of the offeree issuer, by any associate or affiliate of an
insider of an offeree issuer, by any associate or affiliate of the offeree
issuer or by an offeror acting jointly or in concert with any of the foregoing
and excludes an issuer bid. With respect to insider bids and issuer bids,
Policy 9.1 requires enhanced disclosure in the offering document and, subject to
a limited exemption, that a formal valuation of the securities of the offeree
issuer that are the subject of the bid be prepared and summarized in the
offering document.
A going-private transaction means any amalgamation, arrangement, acquisition or
other transaction involving an issuer as a consequence of which the interest of
the holder of a participating security of the issuer in that security may be
terminated without the consent of that holder and without the substitution
therefor of an interest of equivalent value in a participating security of the
issuer or of a successor to the business of that issuer or of another issuer
that controls the issuer but does not include the acquisition of participating
securities pursuant to a statutory right of acquisition.
With respect to going-private transactions, Policy 9.1 not only requires
enhanced disclosure in the proxy material sent to securityholders in connection
with the transactions, the preparation of a formal valuation of any securities
of the issuer in which the interest of the holders will be terminated and any
non-cash consideration offered therefor and the inclusion of a summary thereof
in such proxy material, but also requires that the minority shareholders of the
issuer separately approve the transaction. Depending on the circumstances, the
required level of approval may be a simple majority or two-thirds of the votes
cast by the minority shareholders.
Interested Shareholder Transactions. The DGCL prohibits a "business
combination" between the corporation and an "interested shareholder" within
three years of the shareholder becoming an "interested shareholder." An
"interested shareholder" is any person (other than the corporation or a majority
owned subsidiary) who, directly or indirectly, controls 15% or more of the
outstanding voting stock. A "business combination" includes a merger,
consolidation, sale or other disposition of assets having an aggregate value in
excess of 10% of the consolidated assets of the corporation, and certain
transactions that would increase the interested shareholder's proportionate
share ownership in the corporation. This provision does not apply where (i) the
business combination or the transaction that caused the shareholder to become an
"interested shareholder" is approved by the corporation's board of directors
prior to the time the interested shareholder acquired its shares; (ii) upon
completion of the transaction in which the shareholder became an "interested
shareholder,"
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such shareholder held at least 85% of the outstanding voting stock of the
corporation, excluding, for determining the number of shares outstanding, shares
held by persons who are directors and also officers or by employee stock plans
in which participants do not have the right to determine confidentially whether
shares held subject to the plan will be tendered; (iii) the business combination
is approved by a majority of the board of directors and the affirmative vote of
two-thirds of the votes entitled to be cast by disinterested shareholders at an
annual or special meeting; (iv) the corporation does not have a class of voting
stock that is listed on a national securities exchange, authorized for quotation
on the NASDAQ Stock Market, or held by more than 2,000 shareholders unless any
of the foregoing results from action taken, directly or indirectly, by an
interested shareholder; or (v) the corporation has opted out of this provision.
The CBCA does not contain a comparable provision with respect to business
combinations. However, policies of certain Canadian securities regulatory
authorities, including Policy 9.1, contain requirements in connection with
related party transactions. A related party transaction means, generally, any
transaction by which an issuer, directly or indirectly, acquires or transfers an
asset or acquires or issues treasury securities or assumes or transfers a
liability from or to, as the case may be, a related party by any means in any
one transaction or any combination of transactions. "Related party" is defined
in Policy 9.1 and includes directors, senior officers and holders of at least
10% of the voting securities of the issuer. Policy 9.1 requires more detailed
disclosure in the proxy material sent to security holders in connection with a
related party transaction, and, subject to certain exemptions, the preparation
of a formal valuation of the subject matter of the related party transaction and
any non-cash consideration offered therefor and the inclusion of a summary of
the valuation in the proxy material. Policy 9.1 also requires, subject to
certain exemptions, that the minority shareholders of the issuer separately
approve the transaction, by either a simple majority or two-thirds of the votes
cast, depending on the circumstances.
Changes in Control. The business combination provisions of the DGCL described
above may have had the effect of deterring merger proposals, tender offers or
other attempts to effect changes in control of Zemex that were not negotiated
with and approved by the Board of Directors.
As noted above under "Votes Required for Extraordinary Corporate Transactions,"
takeover bids in Canada are regulated by corporate and securities legislation.
However, shareholder-ratified shareholders rights plans also exist in Canada to
further protect shareholders' rights by giving shareholders adequate time to
assess a takeover bid without undue pressure and to allow competing bids to
emerge.
SELECTED HISTORICAL FINANCIAL DATA
The following selected historical financial data as of December 31, 1997, 1996,
1995, 1994 and 1993 and for each of the five years in the period ended December
31, 1997 were derived from the audited consolidated financial statements of
Zemex. The following summary historical financial data as of June 30, 1998 and
1997 and for the six month periods ended June 30, 1998 and 1997 were derived
from unaudited historical consolidated financial statements of Zemex which, in
the opinion of management, reflect all adjustments (consisting of normal
recurring adjustments) necessary for a fair presentation of unaudited balance
sheet data as of June 30, 1998 and 1997 and the unaudited results for the six
month periods ended June 30, 1998 and 1997. The information contained in this
table should be read in conjunction with "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and the consolidated financial
statements and accompanying notes thereto included in the 1997 Form 10-K, the
March 31, 1998 Form 10-Q and the June 30, 1998 Form 10-Q, incorporated herein by
reference.
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The consolidated financial statements of Zemex have been prepared in accordance
with U.S. GAAP. The application of Canadian GAAP, which will be applicable to
the Company's financial statements, would not result in any material differences
in the Zemex financial statements.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
---------------------- ---------------------------------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
---------- ---------- ------------- ------------- ------------- ------------- --------------
(unaudited)
(dollars in thousands, except per share data)
U.S. GAAP
STATEMENT OF
OPERATIONS DATA:
<S> <C> <C> <C> <C> <C> <C> <C>
Net sales $ 52,380 $ 48,899 $ 97,226 $ 86,420 $ 85,056 $ 55,306 $ 47,958
Reorganization and restruc
turing charge............... -- -- -- 1,752 -- -- --
Operating income............. 4,792 4,020 8,371 3,066 8,342 5,841 1,237
Other income (expense)....... 1,163 1,033 (309) (1,403) (443) (262) 2,421
Net income................... 2,502 1,926 5,793 2,612 8,418 6,250 1,852
Earnings per common share
Basic $ 0.31 $ 0.24 $ 0.72 $ 0.33 $ 1.07 $ 1.21 $ 0.45
Fully diluted................ 0.29 0.24 0.70 0.32 1.03 1.12 0.40
BALANCE SHEET DATA
(AT PERIOD END)
Working capital $ 17,499 $ 19,789 $ 18,975 $ 18,688 $19,709 $ 26,046 $ 9,288
Total assets................. 145,632 104,184 118,774 109,376 96,681 70,864 48,414
Long-term debt............... 40,234 14,042 20,527 17,797 7,485 5,461 8,735
Shareholders' equity......... 78,874 69,031 76,535 70,997 70,900 54,052 26,530
</TABLE>
SECURITY OWNERSHIP
The Company is incorporated under the CBCA , and was incorporated to facilitate
the change of domicile of Zemex from Delaware to Canada. All of the outstanding
capital stock of the Company is currently owned by Zemex. At the Effective
Time, each share of Zemex Common Stock outstanding immediately prior to the
consummation of the Reincorporation Merger will be automatically converted into
one Company Common Share and the existing Company Common Shares will be
cancelled. Accordingly, upon consummation of the Reincorporation Merger, the
share ownership of the Company will be identical to the stock ownership of Zemex
immediately prior to the Reincorporation Merger. In addition, outstanding
options to purchase shares of Zemex Common Stock will upon exercise entitle the
holder to purchase an equal number of Company Common Shares.
The following table sets forth certain information as of August 31, 1998 with
respect to the beneficial ownership of the shares of Zemex Common Stock by (i)
each person known by Zemex to be the beneficial owner of more than 5% of the
outstanding shares of Zemex Common Stock, (ii) each director of Zemex, (iii)
each named executive officer of Zemex who was an executive officer as of such
date, and (iv) all directors and executive officers of Zemex as a group.
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<TABLE>
<CAPTION>
5% SHAREHOLDERS, DIRECTORS, NAMED
EXECUTIVE OFFICERS AND DIRECTORS AND NUMBER OF SHARES
EXECUTIVE OFFICERS AS A GROUP/(1)(2)(3)/ BENEFICIALLY OWNED/(4)/ PERCENT OF CLASS
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
Dundee Bancorp International Inc. 2,897,233 34.2%
Scotia Plaza, 55th Floor
40 King Street West
Toronto, Ontario, Canada M5H 4A9
Paul A. Carroll 24,911/(5)(6)/ *
Morton A. Cohen 313,125/(5)(6)(7)/ 3.7%
John M. Donovan 30,412/(5)(6)/ *
Thomas B. Evans, Jr. 40,590/(5)(6)/ *
Garth A.C. MacRae 0/(8)/ *
Peter O. Lawson-Johnston 96,268/(5)(6)(9)/ 1.1%
Richard L. Lister 796,455/(6)(10)(12)(14)/ 9.2%
Canada Trust Tower, BCE Place
161 Bay Street, Suite 3750
Toronto, Ontario, Canada M5J 2S1
Patrick H. O'Neill 35,170/(5)(6)/ *
William J. vanden Heuvel 42,840/(5)(6)/ *
Allen J. Palmiere 80,412/(6)(11)/ *
Peter J. Goodwin 73,150/(11)(14)/ *
Terrance J. Hogan 77,947/(11)(13)(14)/ *
George E. Gillespie 13,615/(11)(14)/ *
All Directors and Named Officers as a group 1,624,895/(5)(6)(7)(8)(9)(10)(11)(12)(13)(14)/ .%
(13 persons)
</TABLE>
* Denotes less than 1% of Zemex Common Stock outstanding.
(1) A Schedule 13G, prepared on behalf of Merrill Lynch & Co., Inc. and various
of its subsidiaries, was filed with the SEC indicating that it could be
construed to be a beneficial owner of 898,177 shares of Zemex Common Stock
as of December 31, 1997. However, Merrill Lynch & Co., Inc. disclaims any
beneficial ownership of the shares of Zemex Common Stock because they were
held in proprietary trading accounts.
(2) Zesiger Capital Group LLC has filed a Schedule 13G with the SEC indicating
that it could be deemed to be a beneficial owner of 935,815 shares of Zemex
Common Stock as of December 31, 1997. However, Zesiger Capital Group LLC
disclaims any beneficial ownership of the shares of Zemex Common Stock
because they were purchased for customer accounts.
(3) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 438,572 shares of Zemex
Common Stock as of December 31, 1997, all of which shares of Zemex Common
Stock are held in portfolios of DFA Investment Dimensions Group Inc., a
registered open-end investment company, or in series of the DFA Investment
Trust Company, a Delaware business trust, or the DFA Group Trust and DFA
Participation Group Trust, investment vehicles for qualified employee
benefit plans, for all of which Dimensional serves as investment manager.
Dimensional disclaims beneficial ownership of all such shares of Zemex
Common Stock.
(4) Computed in accordance with Rule 13d-3(d)(1) of the Exchange Act.
(5) These directors were each granted options for 15,000 shares of Zemex Common
Stock at $5.50 per share exercisable in two installments of 7,500 each
beginning on May 26, 1994 and May 26, 1995, respectively. These options
expire on May 26, 1999. On February 8, 1995, these directors were each
granted options for an additional 5,000 shares of Zemex Common Stock at
$9.125 per share exercisable in two installments of 2,500 each beginning on
February 8, 1996 and February 8, 1997, respectively, and expiring on
February 8, 2001. On April 21, 1997, each of these directors was granted
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options for 10,000 shares of Zemex Common Stock at $7.00 per share
exercisable in two installments of 5,000 each beginning on April 21, 1998
and April 21, 1999, respectively. These options expire April 21, 2003.
Additionally, each of these directors was granted options for 7,500 shares
of Zemex Common Stock at $10.1875 per share exercisable in two installments
of 3,750 each beginning on May 15, 1999 and May 15, 2000, respectively.
These options expire May 15, 2004. Shares shown in the table include the
25,000 currently exercisable options for each director, respectively,
except for Mr. Carroll who exercised 15,000 options in March 1998.
(6) Each of these directors and members of management purchased 5,000 shares of
Zemex Common Stock from G.E. Wood, former President and Chief Executive
Officer, as part of an assignment of Zemex's settlement agreement with Mr.
Wood dated August 10, 1993.
(7) Includes 282,393 shares of Zemex Common Stock owned by Clarion Capital
Corporation, a company of which Mr. Cohen may be deemed to be the
beneficial owner.
(8) Excludes 2,897,233 shares of Zemex Common Stock owned by Dundee Bancorp
International Inc., a wholly-owned subsidiary of Dundee Bancorp Inc. Mr.
MacRae is Vice Chairman of the Board of Dundee Bancorp Inc., but disclaims
any beneficial ownership of the shares of Zemex Common Stock owned by
Dundee Bancorp International Inc.
(9) Includes 18,366 shares of Zemex Common Stock beneficially owned by Elgerbar
Corporation. Mr. Lawson-Johnston is President and Director of Elgerbar
Corporation and has shared voting and investment power with respect to the
shares of Zemex Common Stock held by it.
(10) In 1991, Richard L. Lister, President and Chief Executive Officer of Zemex,
acquired 357,000 shares of Zemex Common Stock under Zemex's Key Executive
Stock Purchase Plan for an aggregate purchase price of $1,749,300 ($4.90
per share). Zemex loaned Mr. Lister the full amount of the purchase price.
This non-interest bearing loan, which was originally scheduled to mature in
1997, has been extended for two years by approval of the Board. The loan
is evidenced by a promissory note secured by a pledge of the shares of
Zemex Common Stock. If Mr. Lister leaves the employ of Zemex at any time
prior to full payment of the loan, the principal amount will be due in full
30 days after the date his employment terminates. Any balance remaining
unpaid on the loan after it is due will bear interest at the prime rate
plus 1.0%. So long as the loan is outstanding, Mr. Lister is required to
vote the 357,000 shares of Zemex Common Stock in a manner consistent with
the recommendation of the Board.
(11) Includes shares of Zemex Common Stock issuable upon exercise of vested
options as follows: Mr. Lister, 220,000 shares; Mr. Palmiere, 75,000
shares; Mr. Goodwin, 55,000 shares; Mr. Hogan, 39,500 shares; Mr.
Gillespie, 12,500 shares; and all named officers and directors as a group,
587,000 shares.
(12) During 1997, Zemex agreed to guarantee a personal loan in the amount
$600,000 drawn down by Mr. Lister. The proceeds of the loan were used to
acquire 85,700 shares of Zemex Common Stock on the open market. The shares
of Zemex Common Stock acquired are held by Zemex as security for the loan
guarantee.
(13) As part of Zemex's purchase of Alumitech, Inc. in May 1995, Mr. Hogan was
issued 28,558 shares of Zemex Common Stock and options for an additional
22,000 shares of Zemex Common Stock at $9.75 per share exercisable in two
installments of 11,000 shares each beginning on May 12, 1996 and May 12,
1997, respectively, in exchange for his interest in Alumitech, Inc. The
options expire on May 12, 2001.
(14) Includes shares of Zemex Common Stock purchased in 1995, 1996, 1997 and the
first six months of 1998, plus any applicable stock dividends, in
accordance with the terms and conditions of Zemex's employee stock purchase
plan as follows: Mr. Lister, 21,198 shares; Mr. Goodwin, 11,705 shares; Mr.
Hogan 7,364 shares; and Mr. Gillespie, 1,115 shares.
BUSINESS OF ZEMEX
Zemex was incorporated in 1985 as the successor to Pacific Tin Corporation.
Zemex is a niche producer of industrial minerals and metal products. Its
principal businesses are industrial minerals, metal powders, and aluminum waste
recycling. Its major products include feldspar, feldspathic minerals, kaolin,
sand, mica, talc, ferrous and non ferrous powders, and aluminum dross
derivatives.
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BUSINESS OF THE COMPANY
The Company was incorporated in December 1997 under the CBCA. It has not
carried on an active business. The Company has been organized to facilitate the
change of domicile of Zemex from Delaware to Canada. All of the outstanding
Company Common Shares are currently owned by Zemex. After consummation of the
Reincorporation Merger, Zemex will be a wholly-owned subsidiary of the Company
and the Company will continue to conduct the operations in which Zemex is now
engaged.
CERTAIN UNITED STATES FEDERAL TAX CONSIDERATIONS
The following is a summary of certain United States tax consequences generally
applicable to United States holders of Zemex Common Stock or, after the
Reincorporation Merger, Company Common Shares, who hold the Zemex Common Stock
or Company Common Shares as capital assets and who do not own, directly,
indirectly or constructively, 10% or more of Zemex's outstanding voting stock or
the Company's outstanding voting shares. As used herein, the term "U.S. Holder"
means a beneficial owner of Zemex Common Stock or, after the Reincorporation
Merger, Company Common Shares, that is (i) a citizen or resident of the United
States, (ii) a corporation organized under the laws of the United States or any
state, or (iii) otherwise subject to United States federal income taxation on a
net income basis in respect of Zemex Common Stock or, after the Reincorporation
Merger, the Company Common Shares.
This summary is general in nature and is not intended to constitute a complete
analysis of all relevant tax consequences to any particular U.S. Holder. In
particular, this summary does not purport to take into account the specific
circumstances of any particular U.S. Holder (such as certain insurance
companies, broker-dealers, investors liable for alternative minimum tax,
investors that hold Zemex Common Stock or, after the Reincorporation Merger,
Company Common Shares as part of a straddle or a hedging or conversion
transaction or investors whose functional currency is not the U.S. dollar), some
of which may be subject to special rules.
This summary is based on the Internal Revenue Code of 1986, as amended (the
"Code"), judicial decisions, administrative pronouncements, and existing and
proposed U.S. Treasury Department regulations, changes to any of which after the
date of this Proxy Statement/Prospectus could apply on a retroactive basis and
affect the tax consequences described herein. This summary should not be
interpreted as legal or tax advice to any U.S. Holder. Each U.S. Holder should
obtain independent advice regarding such person's tax consequences based on such
person's own particular circumstances.
REINCORPORATION
Consequences for U.S. Holders. As used herein, the term "U.S. Holder" means (i)
a citizen or resident of the United States, (ii) a corporation or partnership
created or organized under the laws of the United States or any State thereof
(including the District of Columbia), including any organization treated as a
U.S. partnership under any applicable Treasury Regulation, (iii) an estate or
trust described in Section 7701(a)(30) of the Code, or (iv) a person otherwise
subject to U.S. Federal income taxation on its worldwide income. U.S. HOLDERS
WILL RECOGNIZE GAIN WITH RESPECT TO THEIR ZEMEX COMMON STOCK ON THE
REINCORPORATION MERGER IN AN AMOUNT EQUAL TO THE EXCESS, IF ANY, OF THE FAIR
MARKET VALUE OF THE ZEMEX COMMON STOCK OVER THEIR BASIS IN THE ZEMEX COMMON
STOCK. A U.S. HOLDER WILL NOT RECOGNIZE LOSS, IF ANY, WITH RESPECT TO THE U.S.
HOLDER'S ZEMEX COMMON STOCK AS A RESULT OF THE REINCORPORATION MERGER. In
addition, if the U.S. Holder holds some Zemex Common Stock at a gain and other
Zemex Common Stock at a loss, the U.S.
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Holder will, as a result of the Reincorporation Merger, recognize the gains but
not losses inherent in the Zemex Common Stock.
For Company Common Shares received in exchange for Zemex Common Stock held at a
gain, a U.S. Holder's basis in the Company Common Shares will be equal to the
fair market value of the shares received, and the U.S. Holder's holding period
in the Company Common Shares will begin on the day of the Reincorporation
Merger. For Company Common Shares received in exchange for Zemex Common Stock
held at a loss, a U.S. Holder's basis in the Company Common Shares should be the
same as the U.S. Holder's basis in the Zemex Common Stock exchanged therefor,
and the U.S. Holder's holding period in the Company Common Shares should include
the U.S. Holder's holding period in the Zemex Common Stock exchanged therefor.
Consequences for Foreign Holders. Except as discussed below, a holder of Zemex
Common Stock who is not a U.S. Holder (a "Foreign Holder") should not recognize
gain or loss for U.S. income tax purposes as a result of the Reincorporation
Merger.
A Foreign Holder who has owned, directly or constructively, more than 5% of the
outstanding Zemex Common Stock at any time during the five years preceding the
Reincorporation Merger (or, if shorter, the Foreign Holder's holding period in
the Zemex Common Stock) (a "5% Foreign Holder") would recognize taxable gain or
loss with respect to the Zemex Common Stock if the Zemex Common Stock is a "U.S.
real property interest" as defined in Section 897(c) of the Code (a "USRPI").
In general, a 5% Foreign Holder's Zemex Common Stock would be a USRPI if 50% or
more of the fair market value of Zemex's trade or business and real property
assets have consisted of interests in U.S. real property at any time during the
preceding five years (or, if shorter, the 5% Foreign Holder's holding period in
the Zemex Common Stock). Zemex believes that Zemex Common Stock does not
constitute a USRPI as to its 5% Foreign Holders. Accordingly, Zemex does not
believe that 5% Foreign Holders will recognize taxable gain or loss with respect
to their Zemex Common Stock as a result of the Reincorporation Merger.
In accordance with Treasury Regulations, at the request of a 5% Foreign Holder,
Zemex will inform the 5% Foreign Holder whether, in Zemex's determination, the
5% Foreign Holder's interest in Zemex has been a USRPHC during the applicable
period, and will provide notice of such determination to the Internal Revenue
Service within a reasonable time of receiving such a request. The request of a
5% Foreign Holder for such a determination should be accompanied by the name,
address and U.S. taxpayer identification number (if any) of the 5% Foreign
Holder.
Consequences for Zemex and the Company. It is not anticipated that Zemex or the
Surviving Corporation will be subject to adverse U.S. income tax consequences as
a result of the Reincorporation Merger. If, subsequent to the Reincorporation
Merger, the Company receives dividend or interest payments from the Surviving
Corporation, such payments will be subject to U.S. withholding tax at a rate of
5% or 10%, respectively.
OWNERSHIP OF THE COMPANY COMMON SHARES
Distributions made by the Company with respect to Company Common Shares (which
for these purposes will include the amount of any Canadian taxes withheld
therefrom) will generally be includible in the gross income of a U.S. Holder as
foreign source dividend income to the extent that such distributions are paid
out of the Company's current or accumulated earnings and profits as determined
under U.S. federal income tax principles. To the extent, if any, that the
amount of any such distribution exceeds the Company's current and accumulated
earnings and profits as so computed, it will first reduce the U.S. Holder's tax
basis in its
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Company Common Shares to the extent thereof, and to the extent in excess of such
tax basis, will be treated as gain from the sale or exchange of property. The
amount of any cash distribution paid in Canadian dollars will be equal to the
U.S. dollar value of the Canadian dollars determined at the spot Canadian
dollar/U.S. dollar rate on the date of receipt, regardless of whether the
payment is in fact converted into U.S. dollars at that time. Gain or loss, if
any, realized on the sale or disposition of Canadian dollars will generally be
U.S. source ordinary income or loss for a U.S. Holder. U.S. Holders will not be
entitled to claim a dividends received deduction with respect to distributions
by the Company (unless the U.S. Holder is a corporation which owns by vote and
value at least 10% of the stock of the Company, in which case a portion of such
distributions may be eligible for such deduction).
Future distributions of Company Common Shares or other interests in the Company,
or of rights to subscribe for Company Common Shares, may be treated as
distributions subject to U.S. federal income tax.
Subject to certain limitations, Canadian taxes withheld from or paid on dividend
distributions generally will be eligible for credit against the U.S. Holder's
U.S. federal income taxes. The limitation on foreign taxes eligible for credit
is calculated separately with respect to specific classes of income.
A U.S. Holder will generally recognize a capital gain or loss for U.S. federal
income tax purposes on the sale or disposition of Company Common Shares in the
same manner as on the sale or disposition of any other shares held as capital
assets and such capital gain or loss will be long-term capital gain or loss if
the U.S. Holder's holding period for such Company Common Shares exceeds one year
on the date of sale or disposition. Gain, if any, will generally be U.S. source
gain.
Under certain limited circumstances, Foreign Holders of Company Common Stock
will be subject to U.S. federal income taxation at graduated rates upon
dividends or gain with respect to their Company Common Stock, if such income or
gain is treated as effectively connected with the conduct of the recipient's
trade or business within the United States.
The Company believes that, following the Reincorporation Merger, it will not be
a "passive foreign investment company" (a "PFIC"), a "foreign personal holding
company" (a "FPHC") or a "controlled foreign corporation" (a "CFC") for U.S.
Federal income tax purposes. If the Company were a PFIC, an FPHC or a CFC
following the Reincorporation Merger, some or all U.S. Holders of Company Stock
would be required to include in their taxable income certain undistributed
amounts of the Company's income or, in certain circumstances, to pay an interest
charge together with tax calculated at maximum rates on certain "excess
distributions," defined as including gain on the sale of stock.
Any U.S. Holder who owns 10% or more in value of the stock of the Company be may
required to file IRS Form 5471 with respect to the Company.
In general, information reporting requirements may apply to dividend payments
(or other taxable distributions) in respect of Company Common Shares made within
the United States to a non-corporate United States person, and "backup
withholding" at the rate of 31% may apply to such payments if the holder or
beneficial owner fails to provide an accurate taxpayer identification number in
the manner required by United States law and applicable regulations, if there
has been notification from the Internal Revenue Service of a failure by the
holder or beneficial owner to report all interest or dividends required to be
shown on its federal income tax returns or, in certain circumstances, if the
holder or beneficial owner fails to comply with applicable certification
requirements. Certain corporations and persons that are not United States
persons may be required to establish their exemption from information reporting
and backup withholding by certifying their status on Internal Revenue Service
Forms W-8 or W-9.
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Amounts withheld under the backup withholding rules may be credited against a
holder's tax liability, and a holder may obtain a refund of any excess amounts
withheld under the backup withholding rules by filing the appropriate claim for
refund with the United States Internal Revenue Service.
CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS
CANADIAN FEDERAL INCOME TAX
The following is a summary of the principal Canadian federal income tax
considerations under the Income Tax Act (Canada) (the "Tax Act") generally
applicable to shareholders of Zemex Common Stock who dispose of their shares
pursuant to the Merger Agreement (hereinafter "Holders"), who for purposes of
the Tax Act hold their Zemex Common Stock as capital property, deal at arm's
length with Zemex and the Company and are not affiliated with Zemex or the
Company. This summary does not apply to a Holder that is a "financial
institution" within the meaning of subsection 142.2(1) of the Tax Act as such
definition is proposed to be amended by the Federal Budget dated February 24,
1998, nor does this summary apply to any Holder in respect of whom Zemex or
Zemex Acquisition Corporation is a foreign affiliate for purposes of the Tax Act
nor to any Holder in respect of whom any such shares constitute an "offshore
investment fund property" for purposes of the Tax Act. This summary is based on
the assumption that all issued Company Common Shares are at all times listed on
The Toronto Stock Exchange or another prescribed stock exchange.
The summary is based on the current provisions of the Tax Act, the regulations
thereunder (the "Tax Regulations"), the current provisions of the Canada-United
States Income Tax Convention, 1980 (the "Tax Treaty") and an understanding of
the current publicly available statements of the administrative practices of
Revenue Canada, Customs, Excise and Taxation. This summary takes into account
specific proposals to amend the Tax Act and Tax Regulations publicly announced
by the Minister of Finance (Canada) prior to the date hereof, but there is not
certainty that such proposals will be enacted in the form proposed or at all.
This summary does not otherwise take into account tax legislation or
considerations of any province, territory or foreign jurisdiction.
THIS SUMMARY IS OF A GENERAL NATURE ONLY AND IS NOT INTENDED TO BE, NOR SHOULD
IT BE CONSTRUED TO BE, LEGAL OR TAX ADVICE TO ANY PARTICULAR HOLDER, AND NO
REPRESENTATIONS WITH RESPECT TO THE INCOME TAX CONSEQUENCES TO ANY PARTICULAR
HOLDER ARE MADE. ACCORDINGLY, HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS FOR
ADVICE WITH RESPECT TO THE TAX CONSEQUENCES OF THE PROPOSED TRANSACTIONS.
Residents of Canada
The following portion of the summary is applicable only to Holders who are
resident or are deemed to be resident in Canada for purposes of the Tax Act.
Holders of Zemex Common Stock who exchange their shares pursuant to the Merger
Agreement for Company Common Shares will be considered to have disposed of their
Zemex Common Stock for proceeds of disposition equal to the fair market value of
the Company Common Shares received in exchange. The aggregate adjusted cost
base of the Company Common Shares immediately after the exchange will be equal
to their fair market value at that time. Holders who exchange their Zemex
Common Stock and Holders who dispose of Company Common Shares in the future will
be considered to have realized a capital gain (or capital loss) to the extent
the proceeds of disposition exceed (or are less than) the aggregate of the
adjusted cost base of the Zemex Common Stock or Company Common Shares
immediately before the exchange or disposition, as the case may be, and any
reasonable costs of disposition.
-36-
<PAGE>
Three-quarters of any capital gain realized on an exchange of Zemex Common Stock
or on a future disposition of Company Common Shares will be included in income
as a taxable capital gain and three-quarters of any capital loss sustained under
these circumstances may be deducted against other taxable capital gains in
accordance with the detailed rules in the Tax Act in that regard. Taxable
capital gains of a Canadian-controlled private corporation may be subject to an
additional 6 2/3% refundable tax, which may be refundable in the circumstances
and to the extent specified in the Tax Act.
Non-Residents of Canada
The following portion of the summary is applicable only to Holders who are
neither resident nor deemed to be resident in Canada for purposes of the Tax Act
and who do not use or hold, and are not deemed to use or hold, their Zemex
Common Stock or Company Common Shares in connection with carrying on business in
Canada (hereinafter "Non-resident Holders").
No tax will be payable under the Tax Act on any capital gain realized by a Non-
resident Holder on the disposition of Zemex Common Stock in exchange for Company
Common Shares pursuant to the Merger Agreement unless the Zemex Common Stock
constitutes "taxable Canadian property" for purposes of the Tax Act. Based on
the fact that no more than 50% of the fair market value of Zemex Common Stock is
or was at the relevant time derived, directly or indirectly, from real property
situated in Canada, Canadian resource properties, timber resource properties, or
any combination thereof, the Zemex Common Stock of Non-resident Holders will not
constitute taxable Canadian property.
No tax will be payable under the Tax Act on any capital gain realized by Non-
resident Holders on a future disposition of Company Common Shares unless the
Company Common Shares constitute taxable Canadian property at that time.
Company Common Shares of Non-resident Holders will not constitute "taxable
Canadian property" unless either (a) at any time during the period of five years
immediately preceding the date such shares are disposed of, 25% or more of the
issued shares (and in the view of Revenue Canada, taking into account certain
interests in or rights to acquire shares) of any class or series of the capital
stock of the Company were owned by the Non-resident Holder, by persons with whom
the Non-resident Holder did not deal at arm's length, or by any combination
thereof, or (b) the Non-resident Holder's Company Common Shares are deemed to be
taxable Canadian property under the Tax Act. Even if the Company Common Shares
are taxable Canadian property, a gain realized on such disposition may be exempt
from tax under the provisions of an applicable income tax treaty. For example,
the Tax Treaty will generally exempt from Canadian tax a gain realized on such
disposition by a Holder who is resident in the United States for purposes of the
Tax Treaty provided the value of the Company Common Shares is not at that time
derived principally from real property situated in Canada.
Dividends paid or credited to a non-resident holder of Company Common Shares
will be subject to non-resident withholding tax under the Tax Act at 25%,
although such rate may be reduced under the provisions of an applicable income
tax treaty. For example, under the Tax Treaty, the rate is generally reduced to
15% in respect of dividends paid to a person who is the beneficial owner and who
is resident in the United States for purposes of the Tax Treaty (and who owns
less than 10% of the Company's voting stock). Under the Tax Treaty, dividends
paid to certain religious, scientific, charitable and other tax exempt
organizations and certain pension organizations that are resident in, and exempt
from tax in, the United States are exempt from Canadian withholding tax.
Provided that certain administrative procedures are observed by the Holder, the
Company will not be required to withhold tax on dividend payments to such
organizations.
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<PAGE>
ACCOUNTING TREATMENT
The acquisition by the Company of the assets and liabilities of Zemex in
connection with the Reincorporation Merger will be accounted for as a statutory
reincorporation. There will not be any "step-up" or write-up of assets for
accounting purposes as a result of the Reincorporation Merger.
Pro forma financial information in contemplation of the Reincorporation Merger
has not been included in this Proxy Statement/Prospectus reflecting the fact
that the statutory reincorporation will largely result in a change in legal form
only; the carrying values of the assets and liabilities of the Company after the
transaction will substantially reflect the carrying values of the assets and
liabilities of Zemex prior to the transaction.
MANAGEMENT OF ZEMEX AND THE COMPANY
DIRECTORS, EXECUTIVE OFFICERS AND CERTAIN KEY EMPLOYEES
The following table sets forth the names and ages as of August 31, 1998 of the
directors of Zemex. Mr. Lawson-Johnston serves as the Chairman of the board of
directors.
NAME AGE
Paul A. Carroll......................................57
Morton A. Cohen......................................63
John M. Donovan......................................70
Thomas B. Evans, Jr..................................66
Peter O. Lawson-Johnston.............................71
Richard L. Lister....................................59
Garth A.C. MacRae....................................64
Patrick H. O'Neill...................................83
William J. vanden Heuvel.............................68
Upon the Reincorporation Merger, it is expected that the directors of Zemex
other than Patrick H. O'Neill will become directors of the Company and it is
expected that Mr. O'Neill will be a Director Emeritus of the Company.
Currently, the Company directors include all of the Zemex directors, as well as
R. Peter Gillin.
The following table sets forth certain information with respect to the executive
officers and certain key employees of Zemex as of August 31, 1998.
NAME AGE POSITION
Richard L. Lister............. 59 President and Chief Executive Officer
Allen J. Palmiere............. 45 Vice President, Chief Financial Officer
and Assistant Secretary
Peter J. Goodwin.............. 48 Vice President; President Industrial
Minerals Group
Terrance J. Hogan............. 43 President, Alumitech, Inc.
George E. Gillespie........... 56 President, Metal Powders
-38-
<PAGE>
Upon the Reincorporation merger, it is expected that the executive officers of
Zemex will become the executive officers of the Company. The Company's current
executive officers are as follows:
Peter O. Lawson-Johnston....... 71 Chairman
Richard L. Lister.............. 59 President and Chief Executive Officer
Allen J. Palmiere.............. 45 Vice President and Chief Financial
Officer
Patricia K. Moran ............. 32 Corporate Secretary and Assistant
Treasurer
Garth A.C. MacRae joined the Board of Zemex in June 1998. Since 1994, he has
been Vice Chairman of Dundee Bancorp Inc., having served as President of Dundee
Bancorp Inc. from 1991 to 1994. Dundee Bancorp Inc. is the sole shareholder of
Dundee Bancorp International Inc., Zemex's principal shareholder. Mr. McRae is
also a director of Dundee Bancorp Inc. and of BGR Precious Metals, Inc.,
Breakwater Resources Ltd., Black Hawk Mining Inc., Dimethaid Research Inc.,
Reserve Royalty Corporation and Eurogas Corporation.
R. Peter Gillin joined the Board of the Company in September 1998. Since 1996,
he has been Vice Chairman and a director of NM Rothschild & Sons Canada
Limited. From 1973 to 1996, he was Managing Director and Head of the Mining
Group at Scotia Mcleod Inc.
DESCRIPTION OF SHARE CAPITAL
The authorized capital stock of the Company currently consists of an unlimited
number of first preference shares without par value and an unlimited number of
Common Shares without par value. As of the completion of the Reincorporation
Merger, approximately ____________ Common Shares and no first preference shares
will be issued and outstanding. The following description of the capital stock
of the Company does not purport to be complete or to give full effect to the
provisions of statutory or common law and is subject in all respects to the
applicable provisions of the Company's Articles (a copy of which is attached to
the Registration Statement of which this Proxy Statement/Prospectus is a part as
Exhibit 3.1) and the Company's Bylaws (a copy of which is attached to the
Registration Statement of which this Proxy Statement/Prospectus is a part as
Exhibit 3.2), and the information herein is qualified in its entirety by this
reference.
The following is a summary of the attributes of the Common Shares and first
preference shares.
COMMON SHARES
Voting
Each Common Share entitles its holder to receive notice of and to attend all
general and special meetings of shareholders of the Company other than meetings
at which only the holders of a particular class or series are entitled to vote.
Each such Common Share entitles its holder to one vote.
-39-
<PAGE>
Dividends
The holders of Common Shares are, at the discretion of the Board of Directors of
the Company, entitled to receive, out of any or all profits or surplus of the
Company properly available for the payment of dividends (after the payment of
any dividend payable on securities of the Company entitled to receive dividends
in priority to the Common Shares), any dividends declared by the Board of
Directors and payable by the Company on the Common Shares.
Dissolution
Subject to the prior rights of the holders of first preference shares, the
holders of Company Common Shares are entitled to share ratably in any
distribution of the assets of the Company upon the liquidation, dissolution or
winding-up of the Company or other distribution of its assets among its
shareholders for the purpose of winding-up its affairs.
FIRST PREFERENCE SHARES
First preference shares are issuable in series. Subject to the Company's
Articles, the Board of Directors is authorized to fix, before issuance, the
designation, rights, privileges, restrictions and conditions attaching to the
shares of each series. The first preference shares rank prior to the Company
Common Shares with respect to dividends and return of capital on dissolution.
Except with respect to matters as to which the holders of first preference
shares as a class are entitled by law to vote, the holders of first preference
shares are not entitled to receive notice of, to attend or to vote at meetings
of shareholders of the Company.
REGISTRAR AND TRANSFER AGENT
The registrar and transfer agent for the Company Common Shares will be Montreal
Trust.
MARKET PRICES, DIVIDENDS AND TRADING INFORMATION
COMPANY COMMON SHARES
There is currently no established public trading market for the Company Common
Shares, and no first preference shares are outstanding. Immediately following
the Reincorporation Merger, the Company Common Shares are expected to be listed
on the New York Stock Exchange and on The Toronto Stock Exchange. Until
surrendered, the certificates representing shares of Zemex Common Stock will be
deemed to represent Company Common Shares.
As of the date of this Proxy Statement/Prospectus, there were 100 Company Common
Share outstanding held by Zemex. Following the consummation of the
Reincorporation Merger, there will be approximately __________ Company Common
Shares outstanding.
DIVIDEND POLICY
The declaration and payment of dividends by the Company will be subject to the
discretion of its Board of Directors. The amount of any such dividend and the
Board's policy with respect to the payment of dividends will depend on the
Company's results of operations, financial condition, capital requirements,
contractual restrictions and other factors deemed relevant by the Company's
board of directors.
-40-
<PAGE>
LEGAL MATTERS
The validity of the issuance of the Company Common Shares offered hereby will be
passed upon for the Company by Stikeman, Elliott, Toronto, Ontario. Certain
matters relating to Canadian federal income tax considerations will be passed on
by Stikeman, Elliott, and certain matters relating to U.S. federal income tax
considerations will be passed on by Davis, Graham & Stubbs, LLP.
EXPERTS
The financial statements of Zemex as of December 31, 1997 and 1996 and for each
of the years in the three-year period ended December 31, 1997 included in the
1997 Form 10-K, which have been incorporated by reference herein, have been
audited by Deloitte & Touche, chartered accountants, as stated in its report
appearing therein, and have been so incorporated in reliance upon such report
given upon the authority of said firm as experts in accounting and auditing.
The balance sheet of Zemex Canada Corporation as at June 30, 1998 has been
audited by Deloitte & Touche, chartered accountants, as stated in its report
appearing with this document, and has been included in reliance upon such report
given upon the authority of said firm as experts in accounting and auditing.
-41-
<PAGE>
AUDITORS' REPORT
To the Directors of
Zemex Canada Corporation
We have audited the balance sheet of Zemex Canada Corporation as at June 30,
1998. This financial statement is the responsibility of the Company's
management. Our responsibility is to express an opinion on this financial
statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
in Canada. Those standards require that we plan and perform an audit to obtain
reasonable assurance 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.
In our opinion, this balance sheet presents fairly, in all material respects,
the financial position of the Company as at June 30, 1998, in accordance with
generally accepted accounting principles in Canada.
/s/ Deloitte & Touche
Deloitte & Touche
Toronto, Ontario
September 24, 1998
F-1
<PAGE>
ZEMEX CANADA CORPORATION
BALANCE SHEET
AS AT JUNE 30, 1998
- ------------------------------------------------------------------------------
ASSETS
Cash $ 1
- ------------------------------------------------------------------------------
SHAREHOLDER'S EQUITY
Share capital
Authorized
Unlimited number of common shares
Unlimited number of first preference shares
Issued
100 common shares $ 1
- ------------------------------------------------------------------------------
APPROVED BY THE BOARD:
/s/ Richard L. Lister /s/ Paul A. Carroll
Director Director
F-2
<PAGE>
ZEMEX CANADA CORPORATION
NOTES TO THE BALANCE SHEET
JUNE 30, 1998
- --------------------------------------------------------------------------------
1. BASIS OF PRESENTATION
Zemex Canada Corporation (the "Company") was incorporated on December 4, 1997
under the Business Corporations Act (Ontario). The Company is a wholly-owned
subsidiary of Zemex Corporation ("Zemex"), a New York Stock Exchange listed
company headquartered in Toronto, Canada. By articles of continuance dated
June 5, 1998, the Company was continued under the Canada Business
Corporations Act. The Company has been incorporated and organized for the
purposes of facilitating a merger with Zemex which will result in a change of
Zemex's domicile from the United States to Canada. The pro forma effect of
this transaction, and a complete description of the merger, has been
disclosed in a registration statement dated October 2, 1998. The transaction
is summarized in Note 2 below.
Statements of operations and changes in financial position are not included
with the accompanying balance sheet as all aspects of the Company's
operations and cash flows are readily apparent from financial information
presented.
2. SUBSEQUENT EVENT
Under the terms of a merger agreement dated October 1, 1998, the Company will
merge a newly-formed subsidiary which is incorporated under the laws of
Delaware (the "Delaware subsidiary"), with and into Zemex (the
"Reincorporation Merger"). The separate corporate existence of the Delaware
subsidiary will cease, and Zemex will be the surviving corporation. Each
previously outstanding share of the Delaware subsidiary's common stock will
be converted into one share of Zemex common stock and each previously
outstanding share of Zemex common stock will be converted into the right to
receive one Company common share. The previously outstanding Company common
shares will be canceled. As a result, Zemex will become a wholly-owned
subsidiary of the Company and the current stockholders of Zemex will own the
outstanding Company common shares. For accounting purposes, the assets and
liabilities of the Company and its subsidiaries on a consolidated basis
immediately after the consummation of the merger will be substantially
identical to the assets and liabilities of Zemex and its subsidiaries on a
consolidated basis immediately prior to the merger.
F-3
<PAGE>
ANNEX A
AGREEMENT AND PLAN
OF
MERGER
BY AND AMONG
ZEMEX CANADA CORPORATION,
ZEMEX ACQUISITION CORPORATION,
AND
ZEMEX CORPORATION
OCTOBER 1, 1998
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TABLE OF CONTENTS
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<TABLE>
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Page
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<S> <C> <C>
ARTICLE I THE MERGER........................................................................... 4
Section 1.01 The Merger.................................................. 4
Section 1.02 Effective Time; Closing..................................... 4
Section 1.03 Effects of the Merger; Subsequent Actions................... 4
Section 1.04 Certificate of Incorporation and By-Laws of the
Surviving Corporation....................................... 5
Section 1.05 Directors................................................... 5
Section 1.06 Officers.................................................... 5
Section 1.07 Conversion of Shares........................................ 5
Section 1.08 Conversion of Mergeco Common Stock.......................... 5
Section 1.09 Outstanding Common Shares of the Company.................... 5
Section 1.10 Exchange of Certificates.................................... 6
Section 1.11 Zemex Stock Option Plan..................................... 6
Section 1.12 Zemex Stock Purchase Plans.................................. 6
Section 1.13 Stockholders' Meeting....................................... 7
ARTICLE II REPRESENTATIONS AND WARRANTIES OF ZEMEX.............................................. 7
Section 2.01 Organization and Qualification.............................. 7
Section 2.02 Capitalization.............................................. 7
Section 2.03 Authority Relative to this Agreement........................ 7
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND
MERGECO.............................................................................. 8
Section 3.01 Organization and Qualification.............................. 8
Section 3.02 Authority Relative to this Agreement........................ 8
ARTICLE IV COVENANTS............................................................................ 8
Section 4.01 Conduct of Business of Zemex................................ 8
Section 4.02 Employee Benefit Arrangements............................... 9
Section 4.03 Directors' and Officers' Indemnification;
Insurance................................................... 9
Section 4.04 Option Plan; Stock Purchase Plans...........................10
Section 4.05 Name Changes................................................10
Section 4.06 Registration Statement/Proxy Statement......................11
Section 4.07 Listing on Stock Exchanges..................................11
ARTICLE V CONDITIONS TO CONSUMMATION OF THE MERGER.............................................12
Section 5.01 Conditions to Each Party's Obligation to
Consummate the Merger.......................................12
</TABLE>
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<TABLE>
<CAPTION>
<S> <C> <C>
ARTICLE VI TERMINATION; AMENDMENT...............................................................12
Section 6.01 Termination.....................................................12
Section 6.02 Effect of Termination...........................................12
Section 6.03 Amendment.......................................................13
ARTICLE VII MISCELLANEOUS........................................................................13
Section 7.01 Non-Survival of Representations and Warranties..................13
Section 7.02 Entire Agreement................................................13
Section 7.03 Validity........................................................13
Section 7.04 Governing Law...................................................13
Section 7.05 Descriptive Headings............................................13
Section 7.06 Counterparts....................................................13
Section 7.07 Certain Definitions.............................................13
Section 7.08 No Third Party Beneficiaries....................................14
</TABLE>
LIST OF SCHEDULES
Schedule 2.02--Capitalization
Schedule 4.02--Employee Benefits
A-3
<PAGE>
AGREEMENT AND PLAN OF MERGER
Agreement and Plan of Merger dated as of October 1, 1998, by and among
Zemex Canada Corporation, a Canadian corporation (the "Company"), Zemex
Acquisition Corporation, a Delaware corporation and a subsidiary of the Company
("Mergeco"), and Zemex Corporation, a Delaware corporation ("Zemex").
Whereas, the respective Boards of Directors of Zemex, Mergeco and the
Company have approved the merger of Mergeco into Zemex and the other
transactions contemplated hereby on the terms and subject to the conditions set
forth herein; and
Whereas, in furtherance thereof, upon the terms and subject to the
conditions of this Agreement, (i) Mergeco would be merged (the "Merger") with
and into Zemex in accordance with the General Corporation Law of the State of
Delaware (the "DGCL") and (ii) each share of common stock, par value US$1.00 per
share, of Zemex (collectively, the "Shares"), issued and outstanding immediately
prior to the Effective Time would, except as otherwise expressly provided
herein, be converted into the right to receive the Merger Consideration.
Now, therefore, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, Zemex,
Mergeco and the Company agree as follows:
ARTICLE I
THE MERGER
Section 1.01 The Merger. Upon the terms and subject to the satisfaction
----------
or waiver of the conditions hereof, and in accordance with the applicable
provisions of this Agreement and the DGCL, at the Effective Time Mergeco shall
be merged with and into Zemex. As of and following the Effective Time, the
separate corporate existence of Mergeco shall cease and Zemex shall continue as
the surviving corporation (the "Surviving Corporation").
Section 1.02 Effective Time; Closing. As soon as practicable after the
-----------------------
satisfaction or waiver of the conditions set forth in Article V, Zemex and
Mergeco shall execute in the manner required by the DGCL and deliver to the
Secretary of State of the State of Delaware a duly executed and verified
certificate of merger, and the parties shall take such other and further actions
as may be required by law to make the Merger effective. The time the Merger
becomes effective in accordance with applicable law is referred to as the
"Effective Time." Prior to such filing, a closing (the "Closing") shall be held
at the offices of Stikemen Elliott, Commerce Court West, Suite 5300, Toronto,
Ontario, Canada M5L 1B9, or such other place as the parties hereto shall agree,
for the purpose of confirming the satisfaction or waiver of the conditions set
forth in Article V. The date on which the Closing occurs is referred to herein
as the "Closing Date."
Section 1.03 Effects of the Merger; Subsequent Actions. The Merger shall
-----------------------------------------
have the effects set forth in Section 259 of the DGCL. Without limiting the
generality of the foregoing, and subject thereto and any other applicable laws,
at the Effective Time, all properties, rights, privileges, powers
A-4
<PAGE>
and franchises of Zemex and Mergeco shall vest in the Surviving Corporation, and
all debts, liabilities, restrictions, disabilities and duties of Zemex and
Mergeco shall become debts, liabilities, restrictions, disabilities and duties
of the Surviving Corporation.
Section 1.04 Certificate of Incorporation and By-Laws of the Surviving
---------------------------------------------------------
Corporation.
- -----------
(a) The Certificate of Incorporation of Mergeco, as in effect
immediately prior to the Effective Time, shall be the Certificate of
Incorporation of the Surviving Corporation, until thereafter amended in
accordance with the provisions thereof and hereof and applicable law;
provided, however, that the name of the Surviving Corporation shall, in
accordance with the provisions hereof and applicable law, be changed to
"Zemex U.S. Corporation" at the Effective Time.
(b) The By-Laws of Mergeco in effect at the Effective Time shall
be the By-Laws of the Surviving Corporation, until thereafter amended in
accordance with the provisions thereof and hereof and applicable law.
Section 1.05 Directors. Subject to applicable law, the directors of
---------
Mergeco immediately prior to the Effective Time shall be the initial directors
of the Surviving Corporation and shall hold office until their respective
successors are duly elected and qualified, or their earlier death, resignation
or removal.
Section 1.06 Officers. The officers of Mergeco immediately prior to the
--------
Effective Time shall be the initial officers of the Surviving Corporation and
shall hold office until their respective successors are duly elected and
qualified, or their earlier death, resignation or removal.
Section 1.07 Conversion of Shares. At the Effective Time, by virtue of
--------------------
the Merger and without any action on the part of Zemex, Mergeco, the Company or
the holders of the following securities, each Share issued and outstanding
immediately prior to the Effective Time shall be converted into the right to
receive the Merger Consideration. Such Shares shall be canceled by virtue of
the Merger. As used herein, "Merger Consideration" means one common share of
the Company, without par value.
Section 1.08 Conversion of Mergeco Common Stock. At the Effective Time,
----------------------------------
each share of common stock, par value US$.01 per share, of Mergeco issued and
outstanding immediately prior to the Effective Time shall, by virtue of the
Merger and without any action on the part of the holder thereof, be converted
into and become one validly issued, fully paid and non-assessable share of
common stock of the Surviving Corporation.
Section 1.09 Outstanding Common Shares of the Company. All of the common
----------------------------------------
shares of the Company outstanding immediately prior to the Effective Time
shall, by virtue of the Merger, be canceled as of the Effective Time.
A-5
<PAGE>
Section 1.10 Exchange of Certificates.
------------------------
(a) Prior to the Effective Time, the Company shall designate the
Montreal Trust Company of Canada to act as exchange agent (the "Exchange
Agent") in effecting the exchange for the Merger Consideration of
certificates (the "Certificates") that, prior to the Effective Time,
represented Shares. Upon the surrender of each such Certificate formerly
representing Shares, together with a properly completed letter of
transmittal described in Section 1.10(b) below, the Exchange Agent shall
issue in respect thereof a common share certificate of the Company
representing the Merger Consideration (a "Company Certificate") multiplied
by the number of Shares formerly represented by each such Certificate, in
exchange therefor, and each such Certificate shall forthwith be canceled.
Until so surrendered and exchanged, each such Certificate shall represent
solely the right to receive the Merger Consideration. If the Merger
Consideration is to be delivered to any person other than the person in
whose name the Certificate formerly representing Shares surrendered in
exchange therefor is registered, it shall be a condition to such exchange
that the Certificate so surrendered shall be properly endorsed or
accompanied by a stock power and shall otherwise be in proper form for
transfer and that the person requesting such exchange shall pay to the
Exchange Agent any transfer or other taxes required by reason of the
delivery of the Merger Consideration to a person other than the registered
holder of the Certificate surrendered, or shall establish to the
satisfaction of the Exchange Agent that such taxes have been paid or are
not applicable.
(b) Promptly after the Effective Time, the Exchange Agent shall
mail to each record holder of Certificates that immediately prior to the
Effective Time represented Shares a letter of transmittal and instructions
for use in surrendering such Certificates and receiving the Merger
Consideration in exchange therefor.
(c) After the Effective Time, there shall be no transfers on the
stock transfer books of the Surviving Corporation of any Shares. If, after
the Effective Time, Certificates formerly representing Shares are presented
to the Surviving Corporation or the Exchange Agent, they shall be canceled
and exchanged for the Merger Consideration as provided in this Section
1.10.
Section 1.11 Zemex Stock Option Plan. Effective as of the Effective
-----------------------
Time, each outstanding option (an "Option") issued, awarded or granted pursuant
to Zemex's 1995 Stock Option Plan (the "Option Plan") to purchase Shares will
entitle the holder upon exercise to acquire an equivalent number of Company
Common Shares.
Section 1.12 Zemex Stock Purchase Plans. Effective as of the Effective
--------------------------
Time, all rights to purchase Shares arising under the Zemex Employee Stock
Purchase Plan and the Zemex Key Executive Common Stock Purchase Plan (the "Stock
Purchase Plans") will entitle the holder to purchase an equivalent number of
Company Common Shares.
A-6
<PAGE>
Section 1.13 Stockholders' Meeting.
---------------------
(a) Zemex, acting through its Board of Directors (the "Board"),
shall, in accordance with the DGCL:
(i) duly call, give notice of, convene and hold a special
meeting of its stockholders (the "Stockholders' Meeting") as soon as
practicable following the date hereof for the purpose of considering
and taking action upon this Agreement; and
(ii) subject to Section 4.06 below, prepare and file with
the Securities and Exchange Commission (the "SEC") a preliminary proxy
or information statement relating to the Merger and this Agreement and
use all reasonable efforts (x) to obtain and furnish the information
required by the SEC to be included in the Proxy Statement and, after
consultation with the Company, to respond promptly to any comments
made by the SEC with respect to the preliminary proxy or information
statement and cause a definitive proxy or information statement (the
"Proxy Statement") to be mailed to its stockholders and (y) to obtain
the necessary approvals of the Merger and this Agreement by its
stockholders.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF ZEMEX
Zemex represents and warrants that, except as set forth in any Schedule
hereto, the statements contained in this Article II are correct and complete as
of the date of this Agreement.
Section 2.01 Organization and Qualification. Zemex is a corporation duly
------------------------------
organized, validly existing and in good standing under the laws of the State of
Delaware.
Section 2.02 Capitalization. The authorized capital stock of Zemex
--------------
consists of 20,000,000 Shares and 5,000 shares of preferred stock ("Preferred
Stock"). As of the close of business on September 30, 1998, 8,511,742 Shares
were issued and outstanding. As of the close of business on September 25, 1998,
there were no shares of Preferred Stock issued and outstanding. Zemex has no
shares reserved for issuance, except that, as of September 25, 1998, there were
674,393 Shares reserved for issuance pursuant to (i) outstanding Options under
the Option Plan and (ii) purchase rights under the Stock Purchase Plans. Zemex
has no options, warrants or rights to purchase Shares outstanding other than as
set forth on Schedule 2.02.
Section 2.03 Authority Relative to this Agreement. Zemex has all
------------------------------------
necessary corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by Zemex and the consummation by Zemex of the
transactions contemplated hereby have been duly and validly authorized and
approved by the Board and no other corporate proceedings on the part of Zemex
are necessary to authorize or approve this Agreement or to consummate the
transactions contemplated hereby (other than, with respect to the Merger, the
approval and adoption of the Merger and this Agreement by the affirmative vote
of the holders of a majority of the Shares then outstanding). This
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Agreement has been duly and validly executed and delivered by Zemex and,
assuming the due and valid authorization, execution and delivery of this
Agreement by the Company and Mergeco, constitutes a valid and binding obligation
of Zemex enforceable against Zemex in accordance with its terms, except that
such enforceability (i) may be limited by bankruptcy, insolvency, moratorium or
other similar laws affecting or relating to the enforcement of creditors' rights
generally and (ii) is subject to general principles of equity.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND MERGECO
The Company and Mergeco represent and warrant that the statements contained
in this Article III are correct and complete as of the date of this Agreement
insofar as such statements pertain to such Person.
Section 3.01 Organization and Qualification. Mergeco is a corporation
------------------------------
duly organized, validly existing and in good standing under the laws of the
State of Delaware. The Company is a corporation duly organized, validly
existing and in good standing under the laws of Canada.
Section 3.02 Authority Relative to this Agreement. Each of the Company
------------------------------------
and Mergeco has all necessary corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement by the Company and Mergeco and the
consummation by the Company and Mergeco of the transactions contemplated hereby
have been duly and validly authorized and approved by the Boards of Directors of
the Company and Mergeco and no other corporate proceedings on the part of the
Company or Mergeco are necessary to authorize or approve this Agreement or to
consummate the transactions contemplated hereby, other than the approval of this
Agreement and the transactions contemplated hereby by the sole stockholder of
Mergeco. This Agreement has been duly executed and delivered by each of the
Company and Mergeco and, assuming the due and valid authorization, execution and
delivery by Zemex, constitutes a valid and binding obligation of each of the
Company and Mergeco enforceable against each of them in accordance with its
terms, except that such enforceability (i) may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting or relating to the
enforcement of creditors' rights generally and (ii) is subject to general
principles of equity.
ARTICLE IV
COVENANTS
Section 4.01 Conduct of Business of Zemex. Except as contemplated by
----------------------------
this Agreement or with the prior consent of the Company, during the period from
the date of this Agreement to the Effective Time, Zemex will, and will cause
each of its Subsidiaries to, conduct its operations only in the ordinary and
usual course of business consistent with past practice and will use its
reasonable efforts, and will cause each of its Subsidiaries to use its
reasonable efforts, to preserve intact the business organization of Zemex and
each of its Subsidiaries, to keep available the services of its and their
present officers and key employees, and to preserve the good will of those
having business relationships with it. Without limiting the generality of the
foregoing, and except as otherwise
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contemplated by this Agreement, Zemex will not, and will not permit any of its
Subsidiaries to, prior to the Effective Time, without the prior written consent
of the Company:
(a) adopt any amendment to its Certificate of Incorporation or
By-laws or comparable organizational documents;
(b) except for issuances of capital stock of the Zemex's
Subsidiaries to Zemex or a wholly-owned Subsidiary of Zemex, issue,
reissue, pledge or sell, or authorize the issuance, reissuance, pledge or
sale of (i) additional shares of capital stock of any class, or securities
convertible into capital stock of any class, or any rights, warrants or
options to acquire any convertible securities or capital stock, other than
the issuance of Shares, in accordance with the terms of the instruments
governing such issuance on the date hereof, pursuant to the exercise of
Options outstanding on the date hereof, or Shares purchasable pursuant to
the Stock Purchase Plans, or (ii) any other securities in respect of, in
lieu of, or in substitution for, Shares outstanding on the date hereof;
(c) declare, set aside or pay any dividend or other distribution
(whether in cash, securities or property or any combination thereof) in
respect of any class or series of its capital stock other than between
Zemex and any of its wholly-owned Subsidiaries; or
(d) agree in writing or otherwise to take any of the foregoing
actions prohibited under Section 4.01 or any action which would cause any
representation or warranty of Zemex in this Agreement to be or become
untrue or incorrect in any material respect.
Section 4.02 Employee Benefit Arrangements. Zemex and the Company hereby
-----------------------------
agree to the provisions set forth on Schedule 4.02 hereto relating to the
provision of employee benefits and other related employee matters.
Section 4.03 Directors' and Officers' Indemnification; Insurance.
---------------------------------------------------
(a) From and after the Effective Time, the Company shall
indemnify and hold harmless each person who is, or has been at any time
prior to the date hereof or who becomes prior to the Effective Time, an
officer or director of Zemex or any of its Subsidiaries (collectively, the
"Indemnified Parties" and individually, the "Indemnified Party") against
all losses, liabilities, expenses, claims or damages in connection with any
claim, suit, action, proceeding or investigation based in whole or in part
on the fact that such Indemnified Party is or was a director or officer of
Zemex or any of its Subsidiaries and arising out of acts or omissions
occurring prior to and including the Effective Time (including but not
limited to the transactions contemplated by this Agreement) to the fullest
extent permitted by applicable law, for a period of not less than six years
following the Effective Time; provided, however, that in the event any
claim or claims are asserted or made within such six-year period, all
rights to indemnification in respect of any such claim or claims shall
continue until final disposition of any and all such claims.
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(b) The Company shall cause the Certificate of Incorporation and
By-Laws of the Surviving Corporation to include provisions for the
limitation of liability of directors and indemnification of the Indemnified
Parties to the fullest extent permitted under applicable law and shall not
permit the amendment of such provisions in any manner adverse to the
Indemnified Parties, as the case may be, without the prior written consent
of such persons, for a period of six years from and after the Effective
Time.
(c) Without limitation of the foregoing, in the event any such
Indemnified Party is or becomes involved in any capacity in any action,
proceeding or investigation in connection with any matter, including,
without limitation, the transactions contemplated by this Agreement,
occurring prior to, and including, the Effective Time, the Company will pay
as incurred such Indemnified Party's legal and other expenses (including
the cost of any investigation and preparation) incurred in connection
therewith. The Company shall pay all expenses, including attorneys' fees,
that may be incurred by any Indemnified Party in enforcing the indemnity
and other obligations provided for in this Section 4.03 or any action
involving an Indemnified Party resulting from the transactions contemplated
by this Agreement.
(d) Any determination to be made as to whether any Indemnified
Party has met any standard of conduct imposed by law shall be made by legal
counsel reasonably acceptable to such Indemnified Party, the Company and
the Surviving Corporation, retained at the Company's and the Surviving
Corporation's expense.
(e) This Section 4.03 is intended to benefit the Indemnified
Parties and their respective heirs, executors and personal representatives
and shall be binding on the successors and assigns of the Company, Mergeco
and the Surviving Corporation.
Section 4.04 Option Plan; Stock Purchase Plans. Subject to the
---------------------------------
provisions of Sections 1.11 and 1.12 above, at the Effective Time, the Option
Plan and the Stock Purchase Plans shall be canceled and terminated. Prior to
the effective time of the registration statement contemplated by Section 4.06
below, the Company shall adopt an option plan and stock purchase plans providing
benefits substantially similar to those provided under the Option Plan and the
Stock Purchase Plans, and all options and grants made pursuant to Sections 1.11
and 1.12 above shall be subject to and governed by the terms of such new option
plan and stock purchase plans and any option and stock purchase agreements
executed pursuant thereto.
Section 4.05 Name Changes. In the Merger, the Surviving Corporation will
------------
change its name to Zemex U.S. Corporation, and immediately prior to the Merger,
the Company will change its name to Zemex Corporation. Each of such
corporations will replace its current name with its new company name on all
stationery, business cards, real and personal property, directories, labels,
advertising and promotional material and any and all applications, registrations
or other documents filed or to be filed with international, national and local
governmental offices, agencies or authorities in any country.
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<PAGE>
Section 4.06 Registration Statement/Proxy Statement.
--------------------------------------
(a) Zemex and the Company shall jointly prepare and file with
the SEC as soon as practicable after the date hereof a Registration
Statement (the "Registration Statement") on Form S-4 under the Securities
Act of 1933, as amended, with respect to the Merger Consideration issuable
in the Merger and this Agreement, which Registration Statement shall also
serve as the "Proxy Statement" for purposes of obtaining the approval of
Zemex's stockholders to this Agreement. Zemex and the Company shall use all
reasonable efforts to have the Registration Statement declared effective by
the SEC as promptly as practicable. Zemex and the Company shall use all
reasonable efforts to obtain, prior to the effective date of the
Registration Statement, all necessary state securities law or "Blue Sky"
permits or approvals required to carry out the transactions contemplated by
this Agreement, and Zemex will pay all expenses incident thereto. The
Registration Statement, when declared effective by the SEC, will not
include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(b) The Company, Zemex and Mergeco shall cooperate with one
another in the preparation and filing of the Registration Statement and
shall use their reasonable best efforts to promptly obtain and furnish the
information required to be included in the Registration Statement and to
respond promptly to any comments or requests made by the SEC with respect
to the Registration Statement. Each party hereto shall promptly notify the
other parties of the receipt of comments of, or any requests by, the SEC
with respect to the Registration Statement and shall promptly supply the
other parties with copies of all correspondence between such party (or its
representatives) and the SEC (or its staff) relating thereto. The Company,
Zemex and Mergeco each agrees to correct any information provided by it for
use in the Registration Statement which shall have become, or is, false or
misleading.
(c) As soon as possible after completion of review of the Proxy
Statement by the SEC, Zemex shall mail the Proxy Statement to its
stockholders who are entitled to vote at the Stockholders' Meeting.
Subject to the fiduciary obligations of the Board under applicable law and
the DGCL, the Proxy Statement shall contain the recommendation of the Board
that the stockholders of Zemex adopt this Agreement and the Merger.
Section 4.07 Listing on Stock Exchanges. The Company and Zemex shall
--------------------------
prepare and submit to the New York Stock Exchange and The Toronto Stock Exchange
any necessary documents covering the Common Shares of the Company comprising the
Merger Consideration to be issued in connection with the Merger and shall
obtain, prior to the Effective Time, approval for the listing of such Company
Common Shares upon official notice of issuance.
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ARTICLE V
CONDITIONS TO CONSUMMATION OF THE MERGER
Section 5.01 Conditions to Each Party's Obligation to Consummate the
-------------------------------------------------------
Merger. Subject to the right of any party hereto to waive any of the following
- ------
conditions with respect to itself and not with respect to any other party, the
respective obligations of Zemex, Mergeco and the Company to consummate the
Merger and the transactions contemplated hereby are subject to the satisfaction,
at or before the Effective Time, of each of the following conditions:
(a) Stockholder Approval. If required by the DGCL, the
--------------------
stockholders of Zemex and Mergeco shall have duly approved the transactions
contemplated by this Agreement.
(b) Injunctions, Illegality. No action, suit or proceeding
-----------------------
shall be pending or threatened before any court or quasi-judicial or
administrative agency of any federal, state, local or foreign jurisdiction
or before any arbitrator or any governmental or regulatory authority,
agency or other entity (a "Governmental Entity") wherein an unfavorable
injunction, judgment, order, decree, ruling or charge would (i) prevent
consummation of any of the transactions contemplated hereby, (ii) cause any
of the transactions contemplated hereby to be rescinded following
consummation, (iii) cause any of Zemex, the Company, or any of their
officers or directors, to become liable for any material damages or (iv)
affect adversely the right of the Surviving Corporation to own the former
assets or to operate the former businesses of Zemex (and no such
injunction, judgment, order, decree, ruling or charge shall be in effect)
and there shall not have been any statute, rule or regulation enacted,
promulgated or deemed applicable to the Merger by any Governmental Entity
which prevents the consummation of the Merger.
(c) No Breach. There shall not have been a breach of any
---------
representation, warranty, covenant or agreement of the Company, Mergeco or
Zemex set forth in this Agreement which, individually or in the aggregate,
would have a material adverse effect on the Surviving Corporation.
(d) Listing of Company Common Shares. The Merger Consideration
--------------------------------
issuable in the Merger shall be listed for trading on the New York Stock
Exchange and the Toronto Stock Exchange, subject to official notice of
issuance.
ARTICLE VI
TERMINATION; AMENDMENT
Section 6.01 Termination. This Agreement may be terminated and the
-----------
Merger contem plated hereby may be abandoned at any time prior to the Effective
Time, notwithstanding approval thereof by the stockholders of Zemex, by action
of the Company or the board of directors of Zemex.
Section 6.02 Effect of Termination. In the event of the termination of
---------------------
this Agreement pursuant to Section 6.01, this Agreement shall forthwith become
void and have no effect, without any liability on the part of any party or its
directors, officers or stockholders.
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Section 6.03 Amendment. This Agreement may be amended, modified or
---------
supplemented by written agreement of Zemex and the Company at any time prior to
the Effective Time, whether before or after the approval of this Agreement by
the stockholders of Zemex, but, after any such vote, no amendment, modification
or supplement shall be made if the Board shall determine that such amendment,
modification, supplement would have a material adverse effect on the rights of
the holders of Shares without the further approval of such holders.
ARTICLE VII
MISCELLANEOUS
Section 7.01 Non-Survival of Representations and Warranties. The
----------------------------------------------
representations and warranties made in this Agreement shall not survive beyond
the Effective Time. The covenants and other agreements contained herein shall
survive in accordance with their respective terms.
Section 7.02 Entire Agreement. This Agreement (including the documents
----------------
and the instruments referred to herein) constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof and thereof.
Section 7.03 Validity. The invalidity or unenforceability of any
--------
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, each of which shall remain in full force
and effect.
Section 7.04 Governing Law. The validity and enforceability of this
-------------
Agreement shall be governed by and construed in accordance with the corporate
law of the State of Delaware, regardless of the laws that might otherwise govern
under applicable principles of conflicts of laws thereof.
Section 7.05 Descriptive Headings. The descriptive headings and captions
--------------------
herein are inserted for convenience of reference only and are not intended to be
part of or to affect the meaning or interpretation of this Agreement.
Section 7.06 Counterparts. This Agreement may be executed in two or more
------------
counterparts (including by means of telecopied signature pages), each of which
shall be deemed to be an original, but all of which shall constitute one and the
same agreement.
Section 7.07 Certain Definitions. As used in this Agreement:
-------------------
(a) the term "Person" shall include individuals, corporations,
partnerships, trusts, other entities and groups (which term shall include a
"group" as such term is defined in Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended); and
(b) the term "Subsidiary," "Subsidiaries" or "subsidiaries"
means, with respect to Zemex, Mergeco, the Company or any other person, any
corporation, partnership, joint venture or other legal entity of which
Zemex, Mergeco, the Company or such other person,
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<PAGE>
as the case may be (either alone or through or together with any other
subsidiary), owns, directly or indirectly, stock or other equity interests
the holders of which are generally entitled to more than 50% of the vote
for the election of the board of directors or other governing body of such
corporation or other legal entity.
Section 7.08 No Third Party Beneficiaries. Nothing in this Agreement,
----------------------------
express or implied, is intended to nor shall confer upon any Person any legal or
equitable right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement, and no Person shall be deemed a third party beneficiary under
or by reason of this Agreement.
* * * * *
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<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its respective officer thereunto duly authorized, all
as of the day and year first above written.
ZEMEX CORPORATION
By: /s/ Richard L. Lister
----------------------
Name: Richard L. Lister
Title: President and Chief Executive Officer
ZEMEX CANADA CORPORATION
By: /s/ Richard L. Lister
----------------------
Name: Richard L. Lister
Title: President and Chief Executive Officer
ZEMEX ACQUISITION CORPORATION
By: /s/ Richard L. Lister
----------------------
Name: Richard L. Lister
Title: President
A-15
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF OFFICERS AND DIRECTORS
STATUTE. Under the Canada Business Corporations Act ("CBCA"), Zemex Canada
-------
Corporation (the "Company") may indemnify a present or former director or
officer of the Company or of another corporation of which the Company is a
stockholder or creditor against amounts paid to settle civil, criminal or
administrative actions or judgments and expenses in connection therewith, where
the director or officer was made a party by reason of his position with the
Company or such other corporation and provided that the director or officer
acted honestly and in good faith with a view to the best interests of the
Company and, in the case of a criminal or administrative action or proceeding
that is enforced by a monetary penalty, had reasonable grounds for believing
that his conduct was lawful. Such indemnification may be made in connection
with a derivative action only with court approval. A director or officer is
entitled to indemnification from the Company as a matter of right if he was
substantially successful on the merits and fulfilled the conditions set forth
above.
BYLAWS. The Bylaws of the Company provide that, subject to limitations
------
contained in the CBCA, the Company shall indemnify a director or officer of the
Company, a former director or officer of the Company or a person who acts or
acted at the Company's request as a director or officer of a body corporate of
which the Company is or was a shareholder or creditor against all costs, charges
and expenses reasonably incurred in respect of any civil, criminal or
administrative action or proceeding to which such person is made a party by
reason of being or having been a director or officer of the Company or such body
corporate if such director or officer (a) acted honestly and in good faith with
a view to the best interests of the Company and (b) in the case of a criminal or
administrative action or proceeding that is enforced by a monetary penalty, had
reasonable grounds for believing that his or her conduct was lawful.
Notwithstanding the foregoing, the Company shall indemnify any person referred
to above in such other circumstances as the CBCA permits or requires.
The Bylaws further provide that the Company may purchase and maintain
insurance for the benefit of any person referred to above as the Company's Board
of Directors may from time to time determine.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENTS SCHEDULE
(a) Exhibits
--------
(2) Agreement and Plan of Merger dated October 1, 1998 by and
among Zemex Canada Corporation, Zemex Acquisition Corporation
and Zemex Corporation./(a)/
(3)(a) Articles of Continuance of Zemex Canada Corporation./(c)/
(3)(b) Articles of Amendment to Articles of Continuance of Zemex
Canada Corporation./(c)/
(3)(c) Bylaw No. 1 of Zemex Canada Corporation./(b)/
(4)(a) Indenture of Trust dated as of November 1, 1989 between
Niagara County Industrial Development Agency and The Bank of
New York as trustee for Pyron Corporation./(d)/
(4)(b) Agency Mortgage and Security Agreement dated as of November
1, 1989 from Pyron Corporation and Niagara County Industrial
Development Agency to The Bank of New York./(d)/
(4)(c) Letter of Credit Reimbursement Agreement dated as of November
1, 1989 between Pyron Corporation and Chemical Bank./(d)/
(4)(d) First Amendment to Letter of Credit Reimbursement Agreement
dated as of November 1, 1989 between Pyron Corporation and
Chemical Bank./(d)/
<PAGE>
(4)(e) Second Amendment to Letter of Credit Reimbursement Agreement
dated as of March 15, 1995 between Pyron Corporation and
Chemical Bank./(g)/
(4)(f) Bank Mortgage and Security Agreement dated as of November 1,
1989 from Pyron Corporation and Niagara County Industrial
Development Agency to Chemical Bank./(d)/
(4)(g) Building Loan Agreement dated as of November 1, 1989 between
Chemical Bank and Pyron Corporation./(d)/
(4)(h) Security Agreement dated as of November 1, 1989 between Pyron
Corporation and Chemical Bank./(d)/
(4)(i) Corporate Guaranty dated as of November 1, 1989 from Zemex
Corporation to Chemical Bank./(d)/
(4)(j) First Amendment to Corporate Guaranty dated as of November 1,
1989 of Zemex Corporation to Chemical Bank./(d)/
(4)(k) Second Amendment to Corporate Guaranty dated as of March 14,
1991 of Zemex Corporation to Chemical Bank./(e)/
(4)(l) Third Amendment to Corporate Guaranty dated as of February
25, 1992 of Zemex Corporation to Chemical Bank./(f)/
(4)(m) Fourth Amendment to Corporate Guaranty dated as of March 8,
1993 of Zemex Corporation to Chemical Bank./(f)/
(4)(n) Fifth Amendment to Corporate Guaranty dated as of March 15,
1995 of Zemex Corporation to Chemical Bank./(g)/
(4)(o) Loan and Security Agreement dated as of March 15, 1995 among
Zemex Corporation and The Feldspar Corporation and
NationsBank of Tennessee, N.A. and Chemical Bank and
NationsBank of Tennessee, N.A., as Agent./(g)/
(4)(p) Amendment No. 1 dated as of March 12, 1997 to the Loan and
Security Agreement dated as of March 15, 1995 among Zemex
Corporation and The Feldspar Corporation and NationsBank of
Tennessee, N.A. and Chemical Bank and NationsBank of
Tennessee, N.A., as Agent./(h)/
(5) Opinion of Stikeman Elliott./(c)/
(10)(a) Key Executive Common Stock Purchase Plan./(c)/
(10)(b) Employee Stock Purchase Plan./(c)/
(10)(c) 1998 Stock Option Plan./(c)/
(10)(d) 1997 Annual Report to Stockholders of Zemex Corporation./(h)/
(10)(e) Consent to Assignment of Lease and to Agreement Sublease, and
Permission to Make Payments dated November 7, 1978, each from
Joberta Enterprises, Inc. to NL Industries, Inc. and The
Feldspar Corporation./(i)/
(10)(f) Additional Lease Agreement dated as of November 1, 1989
between Niagara County Industrial Development Agency and
Pyron Corporation./(d)/
(10)(g) Subscription Agreement with Richard L. Lister dated November
26, 1991./(j)/
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<PAGE>
(10)(h) Ligonier Purchase Agreement and Second Plan of Reorganization
dated March 2, 1992 among Pyron Metal Powders, Inc., a
wholly-owned subsidiary of Zemex Corporation, as Purchaser,
and Ligonier Powders, Inc., as Seller./(f)/
(10)(i) Stock Purchase Agreement dated August 10, 1993 between Zemex
Corporation, Zemex Canada Inc., an Ontario corporation and a
direct wholly-owned subsidiary of Zemex Corporation, Dundee
Bancorp Inc., an Ontario corporation, and Dundee Bancorp
International Inc., a Delaware corporation and a direct
wholly-owned subsidiary of Dundee Bancorp Inc., with respect
to the acquisition of Suzorite Mica Products Inc./(k)/
(10)(j) Capital Stock Purchase Warrant dated September 14, 1993
issued to Dundee Bancorp International Inc. pursuant to the
Stock Purchase Agreement referred to in 10(i)./(k)/
(10)(k) Registration Rights Agreement dated September 14, 1993
between Zemex Corporation and Dundee Bancorp International
Inc./(k)/
(10)(l) Asset Purchase Agreement dated September 3, 1993 between U.S.
Silica Company, The Feldspar Corporation and Zemex
Corporation with respect to the sale of the Virginia aplite
facility./(l)/
(10)(m) Stock Purchase Agreement dated November 15, 1993 between
Americo Malay Mineral Company and Zemex Corporation with
respect to the sale of 2,500,002 common shares of Perangsang
Pasifik Senderian Berhad, a corporation organized and
existing under the laws of the Federal Republic of
Malaysia./(l)/
(10)(n) Suzorite Mica Product Inc.'s Mining Lease dated August 25,
1975 between the Province of Quebec and Marietta Resources
International Ltd./(l)/
(10)(o) Stockholders Agreement dated June 10, 1994 among Alumitech,
Inc., Clarion Capital Corporation, DCC Equities Limited and
Moshe Dan Yerushalmi, John Hocevar and Terrance Hogan and
Zemex Corporation./(m)/
(10)(p) Asset Purchase Agreement dated December 7, 1994 between
Whittaker, Clark & Daniels, Inc., Clark Minerals, Inc.,
Cherokee Minerals, Inc. and Pioneer Talc Company and Suzorite
Mineral Products, Inc. and Zemex Corporation./(g)/
(21) Subsidiaries of the Registrant./(b)/
(23)(a) Consent of Stikeman Elliott (Included in Exhibit (5))./(c)/
(23)(b) Consent of Deloitte & Touche, Chartered Accountants,
regarding Zemex Canada Corporation./(b)/
(23)(c) Consent of Deloitte & Touche, Chartered Accountants,
regarding Zemex Corporation./(b)/
(24)(a) Power of Attorney--William J. vander Heuvel/(b)/
(24)(b) Power of Attorney--R. Peter Gillin/(b)/
(27) Financial Data Schedule /(b)/
_________________________
(a) Annex A to the Proxy Statement/Prospectus included in this Registration
Statement.
(b) Filed herewith.
(c) To be filed by amendment.
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<PAGE>
(d) Incorporated by reference from Zemex Corporation Form 10-K filed March 31,
1990.
(e) Incorporated by reference from Zemex Corporation Form 10-K filed March 31,
1991.
(f) Incorporated by reference from Zemex Corporation Form 10-K filed March 31,
1993.
(g) Incorporated by reference from Zemex Corporation Form 10-K filed March 30,
1995.
(h) Incorporated by reference from Zemex Corporation Form 10-K filed March 31,
1998.
(i) Incorporated by reference from Zemex Corporation's Registration Statement on
Form S-2, Registration No. 33-7774, filed on August 5, 1986.
(j) Incorporated by reference from Zemex Corporation's Form 10-K filed March 31,
1992.
(k) Incorporated by reference from Zemex Corporation's Current Report on Form 8-
K filed September 7, 1993.
(l) Incorporated by reference from Zemex Corporation's Form 10-K filed March 31,
1994.
(m) Incorporated by reference from Zemex Corporation's Registration Statement on
Form S-1, Registration No. 33-82638, filed on August 22, 1994.
(2) Financial Statement Schedules
-----------------------------
None
(c) Report on Appraisal
-------------------
None
ITEM 22. UNDERTAKINGS
(a) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report pursuant
to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(b) That prior to any public reoffering of the securities
registered hereunder through use of a prospectus which is a part of this
registration statement, by any person or party who is deemed to be an
underwriter within the meaning of Rule 145(c), the issuer undertakes that such
reoffering prospectus will contain the information called for by the applicable
registration form with respect to reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other items of
the applicable form.
(c) That every prospectus (i) that is filed pursuant to paragraph
(b) immediately preceding, or (ii) that purports to meet the requirements of
Section 10(a)(3) of the Securities Act and is used in connection with an
offering of securities subject to Rule 415, will be filed as a part of an
amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(d) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-4
<PAGE>
(e) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Items 4, 10(b), 11 or 13 of this form,
within one business day of receipt of such request, and to send the incorporated
documents by first class mail or other equally prompt means. This includes
information contained in documents filed subsequent to the effective date of the
registration statement through the date of responding to the request.
(f) To supply by means of a post-effective amendment all
information concerning a transaction, and the company being acquired involved
therein, that was not the subject of and included in the registration statement
when it became effective.
(g) To deliver or cause to be delivered with the prospectus, to
each person to whom the prospectus is sent or given, the latest annual report to
security holders that is incorporated by reference in the prospectus and
furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3
under the Securities Exchange Act of 1934; and, where interim financial
information required to be presented by Article 3 of Regulation S-X is not set
forth in the prospectus, to deliver, or cause to be delivered to each person to
whom the prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the prospectus to provide such interim
financial information.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the city of Toronto on
the 1st day of October, 1998.
ZEMEX CANADA CORPORATION
By: /s/ Richard L. Lister
-------------------------------------
Richard L. Lister
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard L. Lister, Patricia K. Moran, Jay C.
Kellerman and Ronald R. Levine, II, and each of them, his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities (including his capacity as a director and/or officer of Zemex Canada
Corporation), to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said attorneys- in-
fact and agents or any of them, or their or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
<S> <C> <C>
/s/ Peter Lawson-Johnston Chairman of the Board October 1, 1998
- ----------------------------
Peter Lawson-Johnston
/s/ Richard L. Lister President, Chief Executive Officer and October 1, 1998
- ---------------------------- Director (Principal Executive Officer)
Richard L. Lister
/s/ Allen J. Palmiere Vice President and Chief Financial October 1, 1998
- ---------------------------- Officer (Principal Financial and
Allen J. Palmiere Accounting Officer)
/s/ Paul A. Carroll Director October 1, 1998
- ----------------------------
Paul A. Carroll
/s/ Morton A. Cohen Director October 1, 1998
- ----------------------------
Morton A. Cohen
</TABLE>
II-6
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ John M. Donovan Director October 1, 1998
- ----------------------------
John M. Donovan
/s/ Thomas B. Evans Director October 1, 1998
- ----------------------------
Thomas B. Evans
/s/ Garth A.C. MacRae Director October 1, 1998
- ----------------------------
Garth A.C. MacRae
/s/ Patrick H. O'Neill Director October 1, 1998
- ----------------------------
Patrick H. O'Neill
Director October 1, 1998
- ----------------------------
William J. vander Heuvel
Director October 1, 1998
- ----------------------------
R. Peter Gillin
</TABLE>
II-7
<PAGE>
EXHIBIT INDEX
EXHIBIT PAGE NO.
- ------- --------
(a) Exhibits
--------
(3)(c) Bylaw No. 1 of Zemex Canada Corporation./(b)/
(21) Subsidiaries of the Registrant./(b)/
(23)(b) Consent of Deloitte & Touche, Chartered Accountants, regarding Zemex
Canada Corporation./(b)/
(23)(c) Consent of Deloitte & Touche, Chartered Accountants, regarding Zemex
Corporation./(b)/
(24)(a) Power of Attorney--William J. vander Heuvel./(b)/
(24)(b) Power of Attorney--R. Peter Gillin./(b)/
(27) Financial Data Schedule./(b)/
_________________________
(b) Filed herewith.
<PAGE>
EXHIBIT (3)(C)
ZEMEX CANADA CORPORATION
(the "Corporation")
BY-LAW NO. 1
A by-law relating generally to the transaction of the business and
affairs of the Corporation
CONTENTS
ARTICLE ONE INTERPRETATION
ARTICLE TWO BUSINESS OF THE CORPORATION
ARTICLE THREE BORROWING AND SECURITIES
ARTICLE FOUR DIRECTORS
ARTICLE FIVE COMMITTEES
ARTICLE SIX OFFICERS
ARTICLE SEVEN PROTECTION OF DIRECTORS, OFFICERS
AND OTHERS
ARTICLE EIGHT SHARES
ARTICLE NINE DIVIDENDS AND RIGHTS
ARTICLE TEN MEETINGS OF SHAREHOLDERS
ARTICLE ELEVEN NOTICES
ARTICLE TWELVE EFFECTIVE DATE
<PAGE>
BE IT ENACTED as a by-law of the Corporation as follows:
ARTICLE ONE
INTERPRETATION
1.01 DEFINITIONS - In the by-laws of the Corporation, unless the context
otherwise requires:
"Act" means the Canada Business Corporations Act, and any statute that
may be substituted therefor, as from time to time amended;
"appoint" includes "elect" and vice versa;
"articles" means the articles of the Corporation as from time to time
amended or restated;
"board" means the board of directors of the Corporation;
"by-laws" means this by-law and all other by-laws of the Corporation
from time to time in force and effect;
"cheque" includes a draft;
"Corporation" means the corporation incorporated under the Act on
December 4, 1997 by the said certificate endorsed on the articles, as
amended by articles of amendment dated May 29, 1998, and named ZEMEX
CANADA CORPORATION;
"meeting of shareholders" includes an annual meeting of shareholders
and a special meeting of shareholders;
"non-business day" means Saturday, Sunday and any other day that is a
holiday as defined in the Interpretation Act (Canada) as from time to
time amended;
"ordinary resolution" means a resolution passed by a majority of the
votes cast by the shareholders who voted in respect of that resolution
or signed by all of the shareholders entitled to vote on that
resolution;
"recorded address" means in the case of a shareholder his address as
recorded in the securities register; and in the case of joint
shareholders the address appearing in the securities register in
respect of such joint holding or the first address so appearing if
there are more than one; and in the case of a director (subject to the
provisions of Section 11.01), officer, auditor or member of a
committee of the board, his latest address as recorded in the records
of the Corporation;
2
<PAGE>
"resident Canadian" means an individual who is
(a) a Canadian citizen ordinarily resident in Canada;
(b) a Canadian citizen not ordinarily resident in Canada who is a
member of a class of persons prescribed in the regulations to the
Act, as amended from time to time, or
(c) a permanent resident within the meaning of the Immigration Act and
ordinarily resident in Canada, except a permanent resident who has
been ordinarily resident in Canada for more than one year after
the time at which he first became eligible to apply for Canadian
citizenship;
"signing officer" means, in relation to any instrument, any person
authorized to sign the same on behalf of the Corporation by or
pursuant to section 2.04;
"special meeting of shareholders" includes a meeting of any class or
classes of shareholders and a special meeting of all shareholders
entitled to vote at an annual meeting of shareholders;
"special resolution" means a resolution passed by a majority of not
less than two-thirds of the votes cast by the shareholders who voted
in respect of that resolution or signed by all the shareholders
entitled to vote on that resolution;
"unanimous shareholder agreement" means a written agreement among all
the shareholders of the Corporation or among all such shareholders and
a person who is not a shareholder or a written declaration of the
beneficial owner of all of the issued shares of the Corporation that
restricts, in whole or in part, the powers of the directors to manage
the business and affairs of the Corporation, as from time to time
amended;
Save as aforesaid, words and expressions defined in the Act have the
same meanings when used herein. Words importing the singular number
include the plural and vice versa; words importing gender include the
masculine, feminine and neuter genders; and words importing a person
include an individual, partnership, association, body corporate,
unincorporated organization, trustee, executor, administrator and
legal representative.
1.02 CONFLICT WITH UNANIMOUS SHAREHOLDER AGREEMENT -Where any provision in
the by-laws conflicts with any provision of a unanimous shareholder agreement
the provision of such unanimous shareholder agreement shall govern.
3
<PAGE>
ARTICLE TWO
BUSINESS OF THE CORPORATION
2.01 REGISTERED OFFICE - The registered office of the Corporation shall be
at the place within Canada from time to time specified in the articles and at
such address therein as the board may from time to time determine.
2.02 CORPORATE SEAL - Until changed by the board, the corporate seal of the
Corporation shall be in the form impressed hereon.
2.03 FINANCIAL YEAR - Until changed by the board, the financial year of the
Corporation shall end on the last day of December in each year.
2.04 EXECUTION OF INSTRUMENTS - Deeds, transfers, assignments, contracts,
obligations, certificates, and other instruments may be signed on behalf of the
Corporation by any one of the following: director, chairman of the board,
managing director, chief financial officer, chief executive officer, president,
vice-president, secretary, treasurer, assistant secretary or assistant
treasurer, or the holder of any other office created by by-law or by resolution
of the board. In addition, the board may from time to time direct the manner in
which and the person or persons by whom any particular instrument or class of
instruments may or shall be signed. Any signing officer may affix the corporate
seal to any instrument requiring the same.
2.05 BANKING ARRANGEMENTS - The banking business of the Corporation
including, without limitation, the borrowing of money and the giving of security
therefor, shall be transacted with such banks, trust companies or other bodies
corporate or organizations or persons as may from time to time be designated by
or under the authority of the board. Such banking business or any part thereof
shall be transacted under such agreements, instructions and delegations of
powers as the board may from time to time prescribe or authorize.
2.06 VOTING RIGHTS IN OTHER BODIES CORPORATE - The person or persons
authorized under Section 2.04 may execute and deliver proxies and arrange for
the issuance of voting certificates or other evidence of the right to exercise
the voting rights attaching to any securities held by the Corporation. Such
instruments, certificates or other evidence shall be in favour of such person or
persons as may be determined by the said person or persons executing such
proxies or arranging for the issuance of voting certificates or such other
evidence of the right to exercise such voting rights. In addition, the board
may from time to time direct the manner in which and the person or persons by
whom any particular voting rights or class of voting rights may or shall be
exercised.
2.07 DIVISIONS - The board may cause the business and operations of the
Corporation or any part thereof to be divided or segregated into one or more
divisions upon such basis, including without limitation, character or type of
businesses or operations, geographical territories, product lines or goods or
services as the board may consider appropriate in each case. From time to time
the board or, if authorized by the board, the
4
<PAGE>
chief executive officer may authorize, upon such basis as may be considered
appropriate in each case;
(a) SUB-DIVISION AND CONSOLIDATION - The further division of the
business and operations of any such division into sub-units and
the consolidation of the business and operations of any such
divisions and sub-units;
(b) NAME - The designation of any such division or sub-unit by, and
the carrying on of the business and operations of any such
division or sub-unit under, a name other than the name of the
Corporation; provided that the Corporation shall set out its name
in legible characters in all contracts, invoices, negotiable
instruments and orders for goods or services issued or made by or
on behalf of the Corporation;
(c) OFFICERS - The appointment of officers for any such division or
sub-unit, the determination of their powers and duties, and the
removal of any such officer so appointed without prejudice to such
officer's rights under any employment contract or in law, provided
that any such officers shall not, as such, be officers of the
Corporation, unless expressly designated as such.
ARTICLE THREE
BORROWING AND SECURITIES
3.01 BORROWING POWER - Without limiting the borrowing powers of the
Corporation as set forth in the Act, the board may from time to time on behalf
of the Corporation, without authorization of the shareholders:
(a) borrow money upon the credit of the Corporation;
(b) issue, reissue, sell or pledge bonds, debentures, notes or other
evidences of indebtedness or guarantee of the Corporation, whether
secured or unsecured;
(c) to the extent permitted by the Act, give a guarantee on behalf of
the Corporation to secure performance of any present or future
indebtedness, liability or obligation of any person; and
(d) charge, mortgage, hypothecate, pledge, or otherwise create a
security interest in all or any currently owned or subsequently
acquired real or personal, movable or immovable, property of the
Corporation, including book debts, rights, powers, franchises and
undertakings, to secure any such bonds, debentures, notes or other
evidences of
5
<PAGE>
indebtedness or guarantee or any other present or future
indebtedness, liability or obligation of the Corporation.
Nothing in this section limits or restricts the borrowing of money by the
Corporation on bills of exchange or promissory notes made, drawn, accepted or
endorsed by or on behalf of the Corporation.
3.02 DELEGATION - The board may from time to time delegate to a committee
of the board, one or more directors or officers of the Corporation or any other
person as may be designated by the board all or any of the powers conferred on
the board by section 3.01 or by the Act to such extent and in such manner as the
board shall determine at the time of each such delegation.
ARTICLE FOUR
DIRECTORS
4.01 NUMBER OF DIRECTORS AND QUORUM - Until changed in accordance with the
Act, the board shall consist of not fewer than the minimum number and not more
than the maximum number of directors provided for in the articles. Subject to
section 4.08, the quorum for the transaction of business at any meeting of the
board shall consist of majority of directors or such greater number of directors
as the board may from time to time determine.
4.02 QUALIFICATION - No person shall be qualified for election as a
director if he is less than 18 years of age; if he is of unsound mind and has
been so found by a court in Canada or elsewhere; if he is not an individual; or
if he has the status of a bankrupt. A director need not be a shareholder. A
majority of the directors shall be resident Canadians.
4.03 ELECTION AND TERM - The election of directors shall take place at the
first meeting and thereafter at each annual meeting of shareholders and all the
directors then in office shall retire but, if qualified, shall be eligible for
re-election. The number of directors to be elected at any such meeting shall,
if a minimum and maximum number of directors is authorized, be the number of
directors then in office unless the directors or the shareholders otherwise
determine or shall, if a fixed number of directors is authorized, be such fixed
number. The election shall be by ordinary resolution. If an election of
directors is not held at the proper time, the incumbent directors shall continue
in office until their successors are elected.
4.04 REMOVAL OF DIRECTORS - Subject to the provisions of the Act, the
shareholders may by ordinary resolution passed at a special meeting of
shareholders called for such purpose remove any director from office and the
vacancy created by such removal may be filled at the same meeting, failing which
it may be filled by the board.
4.05 TERMINATION OF OFFICE - A director ceases to hold office when he dies;
he is removed from office by the shareholders; he ceases to be qualified for
election as a
6
<PAGE>
director; or his written resignation is sent or delivered to the Corporation,
or, if a time is specified in such resignation, at the time so specified,
whichever is later.
4.06 VACANCIES - Subject to the provisions of the Act, a quorum of the
board may fill a vacancy in the board, except a vacancy resulting from an
increase in the number or minimum number of directors specified in the articles
or from a failure of the shareholders to elect the number or minimum number of
directors specified in the articles. In the absence of a quorum of the board,
or if the vacancy has arisen from a failure of the shareholders to elect the
number or minimum number of directors specified in the articles, the directors
then in office shall forthwith call a special meeting of shareholders to fill
the vacancy. If such directors fail to call such meeting or if there are no
such directors then in office, any shareholder may call the meeting.
4.07 ACTION BY THE BOARD - Subject to any unanimous shareholder
agreement, the board shall manage the business and affairs of the Corporation.
Subject to sections 4.08 and 4.09, the powers of the board may be exercised by
resolution passed at a meeting at which a quorum is present or by resolution in
writing signed by all the directors entitled to vote on that resolution at a
meeting of the board. Where there is a vacancy in the board, the remaining
directors may exercise all the powers of the board so long as a quorum remains
in office. Where the Corporation has only one director, that director may
constitute a meeting.
4.08 CANADIAN MAJORITY AT MEETINGS - The board shall not transact business
at a meeting, other than filling a vacancy in the board, unless a majority of
the directors present are resident Canadians, except where
(a) a resident Canadian director who is unable to be present approves
in writing or by telephone or other communications facilities the
business transacted at the meeting; and
(b) a majority of resident Canadians would have been present had that
director been present at the meeting.
4.09 MEETING BY TELEPHONE - If all the directors of the Corporation
consent, a director may participate in a meeting of the board or of a committee
of the board by means of such telephone or other communications facilities as
permit all persons participating in the meeting to hear each other, and a
director participating in such a meeting by such means is deemed to be present
at the meeting. Any such consent shall be effective whether given before or
after the meeting to which it relates and may be given with respect to all
meetings of the board and of committees of the board.
4.10 PLACE OF MEETINGS - Meetings of the board may be held at any place in
or outside Canada.
4.11 CALLING OF MEETINGS - Meetings of the board shall be held from time to
time at such time and at such place as the board, the chairman of the board, the
managing director, the president or any two directors may determine.
7
<PAGE>
4.12 NOTICE OF MEETING - Notice of the time and place of each meeting of
the board shall be given in the manner provided in Article Eleven to each
director not less than 48 hours before the time when the meeting is to be held.
A notice of a meeting of directors need not specify the purpose of or the
business to be transacted at the meeting except where the Act requires such
purpose or business to be specified, including, if required by the Act, any
proposal to:
(a) submit to the shareholders any question or matter requiring
approval of the shareholders;
(b) fill a vacancy among the directors or in the office of auditor;
(c) issue securities, except in the manner and on the terms authorized
by the directors;
(d) declare dividends;
(e) purchase, redeem or otherwise acquire shares issued by the
Corporation;
(f) pay a commission for the sale of shares;
(g) approve a management proxy circular referred to in the Act;
(h) approve a take-over bid circular or directors' circular referred
to in the Act;
(i) approve any annual financial statements referred to in the Act; or
(j) adopt, amend or repeal by-laws.
4.13 FIRST MEETING OF NEW BOARD - Provided a quorum of directors is
present, each newly elected board may hold its first meeting, without notice,
immediately following the meeting of shareholders at which such board is
elected.
4.14 ADJOURNED MEETING - Notice of an adjourned meeting of the board is not
required if the time and place of the adjourned meeting is announced at the
original meeting.
4.15 REGULAR MEETINGS - The board may appoint a day or days in any month or
months for regular meetings of the board at a place and hour to be named. A
copy of any resolution of the board fixing the place and time of such regular
meetings shall be sent to each director forthwith after being passed, but no
other notice shall be required for any such regular meeting except where the Act
requires the purpose thereof or the business to be transacted thereat to be
specified.
4.16 CHAIRMAN - The chairman of any meeting of the board shall be the first
mentioned of such of the following officers as have been appointed and who is a
director and
8
<PAGE>
is present at the meeting: chairman of the board, managing director, president
or a vice-president. If no such officer is present, the directors present shall
choose one of their number to be chairman. If the secretary of the Corporation
is absent, the chairman shall appoint some person, who need not be a director,
to act as secretary of the meeting.
4.17 VOTES TO GOVERN - At all meetings of the board every question shall be
decided by a majority of the votes cast on the question. In case of an equality
of votes the chairman of the meeting shall not be entitled to a second or
casting vote.
4.18 CONFLICT OF INTEREST - A director or officer who is a party to, or who
is a director or officer of or has a material interest in any person who is a
party to, a material contract or proposed material contract with the Corporation
shall disclose the nature and extent of his interest at the time and in the
manner provided by the Act and such material interest shall be entered in the
minutes of the meetings of directors or otherwise noted in the records of the
Corporation. Any such contract or proposed contract shall be referred to the
board or shareholders for approval even if such contract is one that in the
ordinary course of the Corporation's business would not require approval by the
board or shareholders. Such a director shall not vote on any resolution to
approve the same except as provided by the Act.
4.19 REMUNERATION AND EXPENSES - Subject to any unanimous shareholder
agreement, the directors shall be paid such remuneration for their services as
the board may from time to time determine. The directors shall also be entitled
to be reimbursed for travelling and other expenses properly incurred by them in
attending meetings of the board or any committee thereof. Nothing herein
contained shall preclude any director from serving the Corporation in any other
capacity and receiving remuneration therefor.
ARTICLE FIVE
COMMITTEES
5.01 COMMITTEES OF THE BOARD - The board may appoint one or more committees
of the board, however designated, and delegate to any such committee any of the
powers of the board except those which pertain to items which, under the Act, a
committee of the board has no authority to exercise. A majority of the members
of any such committee shall be resident Canadians.
5.02 TRANSACTION OF BUSINESS - Subject to the provisions of section 4.09,
the powers of a committee of the board may be exercised by a meeting at which a
quorum is present or by resolution in writing signed by all members of such
committee who would have been entitled to vote on that resolution at a meeting
of the committee. Meetings of any such committee may be held at any place in or
outside of Canada.
5.03 ADVISORY BODIES - The board may from time to time appoint such
advisory bodies as it may deem advisable.
9
<PAGE>
5.04 PROCEDURE - Unless otherwise determined by the board, each committee
and advisory body shall have power to fix its quorum at not less than a majority
of its members, to elect its chairman, and to regulate its procedure.
ARTICLE SIX
OFFICERS
6.01 APPOINTMENT - Subject to any unanimous shareholder agreement, the
board may from time to time appoint a president, one or more vice-presidents (to
which title may be added words indicating seniority or function), a secretary, a
treasurer and such other officers as the board may determine, including one or
more assistants to any of the officers so appointed. The board may specify the
duties of and, in accordance with this by-law and subject to the provisions of
the Act, delegate to such officers powers to manage the business and affairs of
the Corporation. Subject to sections 6.02 and 6.03, an officer may but need not
be a director and one person may hold more than one office.
6.02 CHAIRMAN OF THE BOARD - The board may from time to time also appoint a
chairman of the board who shall be a director. If appointed, the board may
assign to him any of the powers and duties that are by any provisions of this
by-law assigned to the managing director or to the president, and he shall,
subject to the provisions of the Act, have such other powers and duties as the
board may specify. During the absence or disability of the chairman of the
board, his duties shall be performed and his powers exercised by the managing
director, if any, or by the president.
6.03 MANAGING DIRECTOR - The board may from time to time also appoint a
managing director who shall be a resident Canadian and a director. If
appointed, he shall be the chief executive officer and, subject to the authority
of the board, shall have general supervision of the business and affairs of the
Corporation; and he shall, subject to the provisions of the Act, have such other
powers and duties as the board may specify. During the absence or disability of
the president, or if no president has been appointed, the managing director
shall also have the powers and duties of that office.
6.04 PRESIDENT - If appointed, the president shall be the chief operating
officer and, subject to the authority of the board, shall have general
supervision of the business of the Corporation; and he shall have such other
powers and duties as the board may specify. During the absence or disability of
the managing director, or if no managing director has been appointed, the
president shall also have the powers and duties of that office.
6.05 VICE-PRESIDENT - A vice-president shall have such powers and duties as
the board or the chief executive officer may specify.
6.06 SECRETARY - The secretary shall enter or cause to be entered minutes
of all proceedings of all meetings of the board, shareholders and committees of
the board in records kept for that purpose; he shall give or cause to be given,
as and when instructed, all notices to shareholders, directors, officers,
auditors and members of committees of the board;
10
<PAGE>
he shall be the custodian of the stamp or mechanical device generally used for
affixing the corporate seal of the Corporation and of all books, papers,
records, documents, and instruments belonging to the Corporation, except when
some other officer or agent has been appointed for that purpose; and he shall
have such other powers and duties as the board or the chief executive officer
may specify.
6.07 TREASURER - The treasurer shall keep or cause to be kept proper
accounting records in compliance with the Act and shall be responsible for the
deposit of money, the safekeeping of securities and the disbursement of the
funds of the Corporation; he shall render or cause to be rendered to the board
whenever required an account of all his transactions as treasurer and of the
financial position of the Corporation; and he shall have such other powers and
duties as the board or the chief executive officer may specify.
6.08 POWERS AND DUTIES OF OTHER OFFICERS - The powers and duties of all
other officers shall be such as the terms of their engagement call for or as the
board or the chief executive officer may specify. Any of the powers and duties
of an officer to whom an assistant has been appointed may be exercised and
performed by such assistant, unless the board or the chief executive officer
otherwise directs.
6.09 VARIATION OF POWERS AND DUTIES - The board may from time to time and
subject to the provisions of the Act, vary, add to or limit the powers and
duties of any officer.
6.10 TERM OF OFFICE - The board, in its discretion, may remove any officer
of the Corporation, without prejudice to such officer's rights under any
employment contract. Otherwise each officer appointed by the board shall hold
office until his successor is appointed, or until his earlier resignation.
6.11 TERMS OF EMPLOYMENT AND REMUNERATION - The terms of employment and the
remuneration of an officer appointed by the board shall be settled by it from
time to time.
6.12 CONFLICT OF INTEREST - An officer shall disclose his interest in any
material contract or proposed material contract with the Corporation in
accordance with section 4.18.
6.13 AGENTS AND ATTORNEYS - Subject to the provisions of the Act, the
Corporation, by or under the authority of the board shall have power from time
to time to appoint agents or attorneys for the Corporation in or outside Canada
with such powers of management, administration or otherwise (including the power
to sub-delegate) as may be thought fit.
6.14 FIDELITY BONDS - The board may require such officers, employees and
agents of the Corporation as the board deems advisable to furnish bonds for the
faithful discharge of their powers and duties, in such form and with such surety
as the board may from time to time determine.
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ARTICLE SEVEN
PROTECTION OF DIRECTORS, OFFICERS AND OTHERS
7.01 LIMITATION OF LIABILITY - Every director and officer of the
Corporation in exercising his powers and discharging his duties shall act
honestly and in good faith with a view to the best interests of the Corporation
and exercise the care, diligence and skill that a reasonably prudent person
would exercise in comparable circumstances. Subject to the foregoing, no
director or officer shall be liable for the acts, receipts, neglects or defaults
of any other director, officer or employee, or for joining in any receipt or
other act for conformity, or for any loss, damage or expense happening to the
Corporation through the insufficiency or deficiency of title to any property
acquired for or on behalf of the Corporation, or for the insufficiency or
deficiency of any security in or upon which any of the monies of the Corporation
shall be invested, or for any loss or damage arising from the bankruptcy,
insolvency or tortious acts of any person with whom any of the monies,
securities or effects of the Corporation shall be deposited, or for any loss
occasioned by any error of judgment or oversight on his part, or for any other
loss, damage or misfortune whatever which shall happen in the execution of the
duties of his office or in relation thereto; provided that nothing herein shall
relieve any director or officer from the duty to act in accordance with the Act
and the regulations thereunder or from liability for any breach thereof.
7.02 INDEMNITY - Subject to the limitations contained in the Act, the
Corporation shall indemnify a director or officer, a former director or officer,
or a person who acts or acted at the Corporation's request as a director or
officer of a body corporate of which the Corporation is or was a shareholder or
creditor, and his heirs and legal representatives, against all costs, charges
and expenses, including an amount paid to settle an action or satisfy a
judgment, reasonably incurred by him in respect of any civil, criminal or
administrative action or proceeding to which he is made a party by reason of
being or having been a director or officer of the Corporation or such body
corporate, if
(a) he acted honestly and in good faith with a view to the best
interests of the Corporation; and
(b) in the case of a criminal or administrative action or proceeding
that is enforced by a monetary penalty, he had reasonable grounds
for believing that his conduct was lawful.
The Corporation shall also indemnify such person in such other circumstances as
the Act permits or requires. Nothing in this by-law shall limit the right of
any person entitled to indemnity to claim indemnity apart from the provisions of
this by-law.
7.03 INSURANCE - Subject to the Act, the Corporation may purchase and
maintain insurance for the benefit of any person referred to in section 7.02
against such liabilities and in such amounts as the board may from time to time
determine and as are permitted by the Act.
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ARTICLE EIGHT
SHARES
8.01 ALLOTMENT OF SHARES - Subject to the Act, the articles and any
unanimous shareholder agreement, the board may from time to time allot or grant
options to purchase the whole or any part of the authorized and unissued shares
of the Corporation at such times and to such persons and for such consideration
as the board shall determine, provided that no share shall be issued until it is
fully paid as provided by the Act.
8.02 COMMISSIONS - The board may from time to time authorize the
Corporation to pay a reasonable commission to any person in consideration of his
purchasing or agreeing to purchase shares of the Corporation, whether from the
Corporation or from any other person, or procuring or agreeing to procure
purchasers for any such shares.
8.03 REGISTRATION OF A SHARE TRANSFER - Subject to the provisions of the
Act, no transfer of a share in respect of which a certificate has been issued
shall be registered in a securities register except upon presentation of the
certificate representing such share with an endorsement which complies with the
Act made thereon or delivered therewith duly executed by an appropriate person
as provided by the Act, together with such reasonable assurance that the
endorsement is genuine and effective as the board may from time to time
prescribe, upon payment of all applicable taxes and any reasonable fee, not to
exceed $3, prescribed by the board, upon compliance with such restrictions on
transfer as are authorized by the articles.
8.04 TRANSFER AGENTS AND REGISTRARS - The board may from time to time
appoint one or more agents to maintain, in respect of each class of securities
of the Corporation issued by it in registered form, a central securities
register and one or more branch securities registers. Such a person may be
designated as transfer agent or registrar according to his functions and one
person may be designated both registrar and transfer agent. The board may at
any time terminate such appointment.
8.05 NON-RECOGNITION OF TRUSTS - Subject to the provisions of the Act, the
Corporation may treat as absolute owner of any share the person in whose name
the share is registered in the securities register as if that person had full
legal capacity and authority to exercise all rights of ownership, irrespective
of any indication to the contrary through knowledge or notice or description in
the Corporation's records or on the share certificate.
8.06 SHARE CERTIFICATES - Every holder of one or more shares of the
Corporation shall be entitled, at his option, to a share certificate, or to a
non-transferable written certificate of acknowledgement of his right to obtain a
share certificate, stating the number and class or series of shares held by him
as shown on the securities register. Such certificates and certificates of
acknowledgement of a shareholder's right to a share certificate, respectively,
shall be in such form as the board may from time to time approve. Any share
certificate shall be signed in accordance with section 2.04 and need not be
under the corporate seal; provided that, unless the board otherwise determines,
certificates representing shares in respect of which a transfer agent and/or
registrar has been appointed shall not be valid unless countersigned by or on
behalf of such transfer agent and/or registrar.
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The signature of one of the signing officers or, in the case of a certificate
which is not valid unless countersigned by or on behalf of a transfer agent
and/or registrar, and in the case of a certificate which does not require manual
signature under the Act, the signatures of both signing officers, may be printed
or mechanically reproduced in facsimile thereon. Every such facsimile signature
shall for all purposes be deemed to be the signature of the officer whose
signature it reproduces and shall be binding upon the Corporation. A certificate
executed as aforesaid shall be valid notwithstanding that one or both of the
officers whose facsimile signature appears thereon no longer holds office at the
date of issue of the certificate.
8.07 REPLACEMENT OF SHARE CERTIFICATES - The board or any officer or agent
designated by the board may in its or his discretion direct the issue of a new
share or other such certificate in lieu of and upon cancellation of a
certificate that has been mutilated or in substitution for a certificate claimed
to have been lost, destroyed or wrongfully taken on payment of such reasonable
fee, not to exceed $3, and on such terms as to indemnity, reimbursement of
expenses and evidence of loss and of title as the board may from time to time
prescribe, whether generally or in any particular case.
8.08 JOINT HOLDERS - If two or more persons are registered as joint holders
of any share, the Corporation shall not be bound to issue more than one
certificate in respect thereof, and delivery of such certificate to one of such
persons shall be sufficient delivery to all of them. Any one of such persons
may give effectual receipts for the certificate issued in respect thereof or for
any dividend, bonus, return of capital or other money payable or warrant
issuable in respect of such share.
8.09 DECEASED SHAREHOLDERS - In the event of the death of a holder, or of
one of the joint holders, of any share, the Corporation shall not be required to
make any entry in the securities register in respect thereof or to make any
dividend or other payments in respect thereof; except upon production of all
such documents as may be required by law and upon compliance with the reasonable
requirements of the Corporation and its transfer agents.
ARTICLE NINE
DIVIDENDS AND RIGHTS
9.01 DIVIDENDS - Subject to the provisions of the Act, the board may from
time to time declare dividends payable to the shareholders according to their
respective rights and interest in the Corporation. Dividends may be paid in
money or property or by issuing fully paid shares of the Corporation.
9.02 DIVIDEND CHEQUES - A dividend payable in money shall be paid by cheque
drawn on the Corporation's bankers or one of them to the order of each
registered holder of shares of the class or series in respect of which it has
been declared and mailed by prepaid ordinary mail to such registered holder at
his recorded address, unless such holder otherwise directs. In the case of
joint holders the cheque shall, unless such joint holders otherwise direct, be
made payable to the order of all of such joint holders and mailed to them
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at their recorded address. The mailing of such cheque as aforesaid, unless the
same is not paid on due presentation, shall satisfy and discharge the liability
for the dividend to the extent of the sum represented thereby plus the amount of
any tax which the Corporation is required to and does withhold.
9.03 NON-RECEIPT OF CHEQUES - In the event of non-receipt of any dividend
cheque by the person to whom it is sent as aforesaid, the Corporation shall
issue to such person a replacement cheque for a like amount on such terms as to
indemnity, reimbursement of expenses, and evidence of non-receipt and of title
as the board may from time to time prescribe, whether generally or in any
particular case.
9.04 RECORD DATE FOR DIVIDENDS AND RIGHTS - The board may fix in advance a
date, preceding by not more than 50 days the date for the payment of any
dividend or the date for the issue of any warrant or other evidence of the right
to subscribe for securities of the Corporation, as a record date for the
determination of the persons entitled to receive payment of such dividend or to
exercise the right to subscribe for such securities; and notice of any such
record date shall be given not less than 7 days before such record date in the
manner provided for by the Act. If no record date is so fixed, the record date
for the determination of the persons entitled to receive payment of any dividend
or to exercise the right to subscribe for securities of the Corporation shall be
at the close of business on the day on which the resolution relating to such
dividend or right to subscribe is passed by the board.
9.05 UNCLAIMED DIVIDENDS - Any dividend unclaimed after a period of 6 years
from the date on which the same has been declared to be payable shall be
forfeited and shall revert to the Corporation.
ARTICLE TEN
MEETINGS OF SHAREHOLDERS
10.01 ANNUAL MEETINGS - The annual meeting of shareholders shall be held at
such time in each year and, subject to section 10.03, at such place as the
board, the chairman of the board, the managing director, or the president may
from time to time determine, for the purpose of considering the financial
statements and reports required by the Act to be placed before the annual
meeting, electing directors, appointing an auditor, and for the transaction of
such other business as may properly be brought before the meeting.
10.02 SPECIAL MEETINGS - The board, the chairman of the board, the managing
director, or the president shall have power to call a special meeting of
shareholders at any time.
10.03 PLACE OF MEETINGS - Meetings of shareholders shall be held at the
registered office of the Corporation or elsewhere in the municipality in which
the registered office is situate or, if the board shall so determine, at some
other place in Canada or, if all the shareholders entitled to vote at the
meeting so agree, at some place outside Canada.
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10.04 NOTICE OF MEETINGS - Notice of the time and place of each meeting of
shareholders shall be given in the manner provided in Article Eleven not less
than 21 nor more than 50 days before the date of the meeting to each director,
to the auditor, and to each shareholder who at the close of business on the
record date for notice is entered in the securities register as the holder of
one or more shares carrying the right to vote at the meeting. Notice of a
meeting of shareholders called for any purpose other than consideration of the
financial statements and auditor's report, election of directors and
reappointment of the incumbent auditor shall state the nature of such business
in sufficient detail to permit the shareholder to form a reasoned judgment
thereon and shall state the text of any special resolution to be submitted to
the meeting. A shareholder and any other person entitled to attend a meeting of
shareholders may in any manner waive notice of or otherwise consent to a meeting
of shareholders.
10.05 LIST OF SHAREHOLDERS ENTITLED TO NOTICE - For every meeting of
shareholders, the Corporation shall prepare a list of shareholders entitled to
receive notice of the meeting, arranged in alphabetical order and showing the
number of shares held by each shareholder entitled to vote at the meeting. If a
record date for the meeting is fixed pursuant to section 10.06, the shareholders
listed shall be those registered at the close of business on such record date.
If no record date is fixed, the shareholders listed shall be those registered at
the close of business on the day immediately preceding the day on which notice
of the meeting is given or, where no such notice is given, on the day on which
the meeting is held. The list shall be available for examination by any
shareholder during usual business hours at the registered office of the
Corporation or at the place where the central securities register is maintained
and at the meeting for which the list was prepared. Where a separate list of
shareholders has not been prepared, the names of persons appearing in the
securities register at the requisite time as the holder of one or more shares
carrying the right to vote at such meeting shall be deemed to be a list of
shareholders.
10.06 RECORD DATE FOR NOTICE - The board may fix in advance a date,
preceding the date of any meeting of shareholders by not more than 50 days and
not less than 21 days, as a record date for the determination of the
shareholders entitled to notice of the meeting, and notice of any such record
date shall be given not less than 7 days before such record date, by newspaper
advertisement in the manner provided in the Act. If no record date is so fixed,
the record date for the determination of the shareholders entitled to receive
notice of the meeting shall be at the close of business on the day immediately
preceding the day on which the notice is given or, if no notice is given, the
day on which the meeting is held.
10.07 MEETINGS WITHOUT NOTICE - A meeting of shareholders may be held
without notice at any time and place permitted by the Act (a) if all the
shareholders entitled to vote thereat are present in person or represented by
proxy or if those not present or represented by proxy waive notice of or
otherwise consent to such meeting being held, and (b) if the auditors and the
directors are present or waive notice of or otherwise consent to such meeting
being held; so long as such shareholders, auditors or directors present are not
attending for the express purpose of objecting to the transaction of any
business on the grounds that the meeting is not lawfully called. At such a
meeting any business may be transacted which the Corporation at a meeting of
shareholders may transact. If the meeting is held at a place outside Canada,
shareholders not present or represented by proxy, but who
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have waived notice of or otherwise consented to such meeting, shall also be
deemed to have consented to the meeting being held at such place.
10.08 CHAIRMAN, SECRETARY AND SCRUTINEERS - The chairman of any meeting of
shareholders shall be the first mentioned of such of the following officers as
have been appointed and who is present at the meeting: managing director,
president, chairman of the board, or a vice-president who is a shareholder. If
no such officer is present within 15 minutes from the time fixed for holding the
meeting, the persons present and entitled to vote shall choose one of their
number to be chairman. If the secretary of the Corporation is absent, the
chairman shall appoint some person, who need not be a shareholder, to act as
secretary of the meeting. If desired, one or more scrutineers, who need not be
shareholders, may be appointed by a resolution or by the chairman with the
consent of the meeting.
10.09 PERSONS ENTITLED TO BE PRESENT - The only persons entitled to be
present at a meeting of shareholders shall be those entitled to vote thereat,
the directors and auditor of the Corporation and others who, although not
entitled to vote, are entitled or required under any provision of the Act or the
articles or by-laws to be present at the meeting. Any other person may be
admitted only on the invitation of the chairman of the meeting or with the
consent of the meeting.
10.10 QUORUM - Subject to the Act, a quorum for the transaction of business
at any meeting of shareholders shall be two persons present in person, each
being a shareholder entitled to vote thereat or a duly appointed proxyholder or
representative for an absent shareholder so entitled. If a quorum is present at
the opening of any meeting of shareholders, the shareholders present or
represented by proxy may proceed with the business of the meeting
notwithstanding that a quorum is not present throughout the meeting. If a quorum
is not present at the opening of any meeting of shareholders, the shareholders
present or represented by proxy may adjourn the meeting to a fixed time and
place but may not transact any other business.
10.11 RIGHT TO VOTE - Subject to the provisions of the Act as to authorized
representatives of any other body corporate or association, at any meeting of
shareholders for which the Corporation has prepared the list referred to in
section 10.05, every person who is named in such list shall be entitled to vote
the shares shown thereon opposite his name at the meeting to which such list
relates except to the extent that, where the Corporation has fixed a record date
in respect of such meeting pursuant to section 10.06, such person has
transferred any of his shares after such record date and the transferee, having
produced properly endorsed certificates evidencing such shares or having
otherwise established that he owns such shares, has demanded not later than 10
days before the meeting that his name be included in such list. In any such
case the transferee shall be entitled to vote the transferred shares at the
meeting. At any meeting of shareholders for which the Corporation has not
prepared the list referred to in section 10.05, every person shall be entitled
to vote at the meeting who at the time of the commencement of the meeting is
entered in the securities register as the holder of one or more shares carrying
the right to vote at such meeting.
10.12 PROXYHOLDERS AND REPRESENTATIVES - Every shareholder entitled to vote
at a meeting of shareholders may appoint a proxyholder, or one or more alternate
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proxyholders, who need not be shareholders, to attend and act as his
representative at the meeting in the manner and to the extent authorized and
with the authority conferred by the proxy. A proxy shall be in writing executed
by the shareholder or his attorney and shall conform with the requirements of
the Act.
Alternatively, every such shareholder which is a body corporate or
association may authorize by resolution of its directors or governing body an
individual to represent it at a meeting of shareholders and such individual may
exercise on the shareholder's behalf all the powers it could exercise if it were
an individual shareholder. The authority of such an individual shall be
established by depositing with the Corporation a certified copy of such
resolution, or in such other manner as may be satisfactory to the secretary of
the Corporation or the chairman of the meeting. Any such representative need
not be a shareholder.
10.13 TIME FOR DEPOSIT OF PROXIES - The board may specify in a notice
calling a meeting of shareholders a time, preceding the time of such meeting by
not more than 48 hours exclusive of non-business days, before which time proxies
to be used at such meeting must be deposited. A proxy shall be acted upon only
if, prior to the time so specified, it shall have been deposited with the
Corporation or an agent thereof specified in such notice or if, no such time
having been specified in such notice, it has been received by the secretary of
the Corporation or by the chairman of the meeting or any adjournment thereof
prior to the time of voting.
10.14 JOINT SHAREHOLDERS - If two or more persons hold shares jointly, any
one of them present in person or duly represented by proxy at a meeting of
shareholders may, in the absence of the other or others, vote the shares; but if
two or more of those persons are present in person or represented by proxy and
vote, they shall vote as one the shares jointly held by them.
10.15 VOTES TO GOVERN - At any meeting of shareholders every question shall,
unless otherwise required by the articles or by-laws or by law, be determined by
a majority of the votes cast on the question. In case of an equality of votes
either upon a show of hands or upon a poll, the chairman of the meeting shall *
be entitled to a second or casting vote.
10.16 SHOW OF HANDS - Subject to the provisions of the Act, any question at
a meeting of shareholders shall be decided by a show of hands, unless a ballot
thereon is required or demanded as hereinafter provided. Upon a show of hands
every person who is present and entitled to vote shall have one vote. Whenever
a vote by show of hands shall have been taken upon a question, unless a ballot
thereon is so required or demanded, a declaration by the chairman of the meeting
that the vote upon the question has been carried or carried by a particular
majority or not carried and an entry to that effect in the minutes of the
meeting shall be prima facie evidence of the fact without proof of the number or
proportion of the votes recorded in favour of or against any resolution or other
proceeding in respect of the said question, and the result of the vote so taken
shall be the decision of the shareholders upon the said question.
10.17 BALLOTS - On any question proposed for consideration at a meeting of
shareholders, and whether or not a show of hands has been taken thereon, the
chairman or
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any person who is present and entitled to vote, whether as shareholder or
proxyholder, on such question at the meeting may demand a ballot. A ballot so
required or demanded shall be taken in such manner as the chairman shall direct.
A requirement or demand for a ballot may be withdrawn at any time prior to the
taking of the ballot. If a ballot is taken each person present shall be
entitled, in respect of the shares which he is entitled to vote at the meeting
upon the question, to that number of votes provided by the Act or the articles,
and the result of the ballot so taken shall be the decision of the shareholders
upon the said question.
10.18 ADJOURNMENT - The chairman at a meeting of shareholders may, with the
consent of the meeting and subject to such conditions as the meeting may decide,
adjourn the meeting from time to time and place to place. If a meeting of
shareholders is adjourned for less than 30 days, it shall not be necessary to
give notice of the adjourned meeting, other than by announcement at the earliest
meeting that is adjourned. Subject to the Act, if a meeting of shareholders is
adjourned by one or more adjournments for an aggregate of 30 days or more,
notice of the adjourned meeting shall be given as for an original meeting.
10.19 RESOLUTION IN WRITING - A resolution in writing signed by all the
shareholders entitled to vote on that resolution at a meeting of shareholders is
as valid as if it had been passed at a meeting of the shareholders unless a
written statement with respect to the subject matter of the resolution is
submitted by a director or the auditor in accordance with the Act.
10.20 ONLY ONE SHAREHOLDER - Where the Corporation has only one shareholder
or only one holder of any class or series of shares, the shareholder present in
person or duly represented by proxy constitutes a meeting.
ARTICLE ELEVEN
NOTICES
11.01 METHOD OF GIVING NOTICES - Any notice or document to be given pursuant
to the Act, the regulations thereunder, the articles or the by-laws to a
shareholder or director of the Corporation may be sent by prepaid mail addressed
to, or may be delivered personally to the shareholder at his latest address as
shown in the records of the Corporation or its transfer agent and the director
at his latest address as shown on the records of the Corporation or in the last
notice of directors or notice of change of directors filed under the Act. A
notice or document sent in accordance with the foregoing to a shareholder or
director of the Corporation shall be deemed to be received by him at the time it
would be delivered in the ordinary course of mail unless there are reasonable
grounds for believing that the shareholder or director did not receive the
notice or document at the time or at all. The secretary may change or cause to
be changed the recorded address of any shareholder, director, officer, auditor
or member of a committee of the board in accordance with any information
believed by him to be reliable. The foregoing shall not be construed so as to
limit the manner or effect of giving notice by any other means of communication
otherwise permitted by law.
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11.02 NOTICE TO JOINT HOLDERS - If two or more persons are registered as
joint holders of any share, any notice shall be addressed to all of such joint
holders but notice addressed to one of such persons shall be sufficient notice
to all of them.
11.03 COMPUTATION OF TIME - In computing the date when notice must be given
under any provision requiring a specified number of days' notice of any meeting
or other event, the date of giving the notice shall be excluded and the date of
the meeting or other event shall be included.
11.04 UNDELIVERED NOTICES - If any notice given to a shareholder pursuant to
section 11.01 is returned on three consecutive occasions because he cannot be
found, the Corporation shall not be required to give any further notices to such
shareholder until he informs the Corporation in writing of his new address.
11.05 OMISSIONS AND ERRORS - The accidental omission to give any notice to
any shareholder, director, officer, auditor or member of a committee of the
board or the non-receipt of any notice by any such person or any error in any
notice not affecting the substance thereof shall not invalidate any action taken
at any meeting held pursuant to such notice or otherwise founded thereon.
11.06 PERSONS ENTITLED BY DEATH OR OPERATION OF LAW - Every person who, by
operation of law, transfer, death of a shareholder or any other means
whatsoever, shall become entitled to any share, shall be bound by every notice
in respect of such share which shall have been duly given to the shareholder
from whom he derives his title to such share prior to his name and address being
entered on the securities register (whether such notice was given before or
after the happening of the event upon which he became so entitled) and prior to
his furnishing to the Corporation the proof of authority or evidence of his
entitlement prescribed by the Act.
11.07 WAIVER OF NOTICE - Any shareholder, proxyholder, other person entitled
to attend a meeting of shareholders, director, officer, auditor or member of a
committee of the board may at any time waive any notice, or waive or abridge the
time for any notice, required to be given to him under any provision of the Act,
the regulations thereunder, the articles, the by-laws or otherwise and such
waiver or abridgement, whether given before or after the meeting or other event
of which notice is required to be given, shall cure any default in the giving or
in the time of such notice, as the case may be. Any such waiver or abridgement
shall be in writing except a waiver of notice of a meeting of shareholders or of
the board or of a committee of the board which may be given in any manner.
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ARTICLE TWELVE
EFFECTIVE DATE
12.01 EFFECTIVE DATE - This by-law shall come into force when made by the
board in accordance with the Act.
<PAGE>
EXHIBIT 21
SUBSIDIARIES OF THE REGISTRANT
The subsidiaries listed below are directly or indirectly wholly-owned and
all are consolidated in the financial statements.
STATE OR COUNTRY IN WHICH
SUBSIDIARY NAME INCORPORATED OR ORGANIZED
Zemex Corporation Delaware
Alumitech, Inc. Delaware
Aluminum Waste Technology, Inc. Delaware
AWT Properties, Inc. Ohio
ETS Schaefer Corporation Ohio
The Feldspar Corporation North Carolina
Pyron Corporation New York
Pyron Metal Powders, Inc. Delaware
Suzorite Mica Products Inc. Ontario, Canada
Suzorite Mineral Products, Inc. Delaware
Zemex Industrial Minerals, Inc. Delaware
<PAGE>
[DELOITTE & TOUCHE LETTERHEAD]
EXHIBIT 23(B)
The Board of Directors
Zemex Canada Corporation
Dear Sirs:
INDEPENDENT AUDITORS' CONSENT
We hereby consent to the use in the Registration Statement on Form S-4 of Zemex
Canada Corporation (the "Registration Statement") dated October 2, 1998, of our
Auditors' Report dated September 24, 1998 on the Balance Sheet of Zemex Canada
Corporation as at June 30, 1998.
We hereby further consent to the reference to our firm under the caption
"Experts" in the Registration Statement.
/s/ Deloitte & Touche
Deloitte & Touche
Chartered Accountants
October 2, 1998
<PAGE>
[DELOITTE & TOUCHE LETTERHEAD]
EXHIBIT 23(C)
The Board of Directors
Zemex Corporation
Dear Sirs:
INDEPENDENT AUDITORS' CONSENT
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-4 of Zemex Canada Corporation (the "Registration Statement")
dated October 2, 1998, of our Auditors' Reports acknowledged in Exhibit 24(a) of
the Zemex Corporation Form 10-K for the fiscal year ended December 31, 1997.
We hereby further consent to the reference to our firm under the caption
"Experts" in the Registration Statement.
/s/ Deloitte & Touche
Deloitte & Touche
Chartered Accountants
October 2, 1998
<PAGE>
EXHIBIT 24(A)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints Richard L. Lister, Patricia K. Moran, Jay Kellerman and Ronald R.
Levine, II, and each of them, his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities (including his capacity as a director
and/or officer of Zemex Canada Corporation), to sign a Registration Statement on
Form S-4 relating to the registration under the U.S. Securities Act of 1933, as
amended (the "Act") of common shares of Zemex Canada Corporation (the "Company")
to be issued in the merger of a subsidiary of the Company with and into Zemex
Corporation (the "Registration Statement"), and any or all amendments
(including post-effective amendments) to the Registration Statement, and any
subsequent registration statement filed pursuant to Rule 462(b) under the Act,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said attorneys- in-
fact and agents or any of them, or their or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
/s/ William J. vander Heuvel
------------------------------
Name: William J. vander Heuvel
<PAGE>
EXHIBIT 24(B)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints Richard L. Lister, Patricia K. Moran, Jay Kellerman and Ronald R.
Levine, II, and each of them, his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities (including his capacity as a director
and/or officer of Zemex Canada Corporation), to sign a Registration Statement on
Form S-4 relating to the registration under the U.S. Securities Act of 1933, as
amended (the "Act") of common shares of Zemex Canada Corporation (the "Company")
to be issued in the merger of a subsidiary of the Company with and into Zemex
Corporation (the "Registration Statement"), and any or all amendments
(including post-effective amendments) to the Registration Statement, and any
subsequent registration statement filed pursuant to Rule 462(b) under the Act,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said attorneys- in-
fact and agents or any of them, or their or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
/s/ R. Peter Gillin
--------------------------------------
Name: R. Peter Gillin
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE AUDITED
BALANCE SHEET OF ZEMEX CANADA CORPORATION AS OF JUNE 30, 1998 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JUN-30-1998
<PERIOD-END> JUN-30-1998
<CASH> 1
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 1
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 1
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
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<EXTRAORDINARY> 0
<CHANGES> 0
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<EPS-PRIMARY> 0
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</TABLE>
