ZEMEX CORPORATION
Canada Trust Tower, BCE Place
161 Bay Street, Suite 3750
P.O. Box 703
Toronto, Ontario
Canada M5J 2S1
PROXY STATEMENT
This proxy statement is furnished in connection with the
solicitation of proxies by the Board of Directors (the "Board")
of Zemex Corporation (the "Corporation" or "Zemex"), a Delaware
corporation, to be voted at the Annual Meeting of Shareholders at
11:00 a.m. on May 12, 1997 in Room C, 11th Floor, The Chase
Manhattan Bank, 270 Park Avenue, New York, New York, 10017 and at
any adjournment thereof. This Proxy Statement and the
accompanying Notice of Meeting and Form of Proxy are being mailed
to the Corporation's shareholders commencing on or about March
27, 1997. The 1996 Annual Report to the Corporation's
shareholders, which includes financial statements, is also being
mailed on or about March 27, 1997 to each shareholder of record
as of the close of business on March 7, 1997. Such Annual
Report, however, is not to be deemed to be part of this proxy
solicitation material.
The Board has fixed the close of business on March 7, 1997 as the
record date for the determination of shareholders of the
Corporation entitled to vote at the Annual Meeting. As of the
record date, the Corporation had approximately 8,269,099 common
shares, par value $1.00 per share (the "Common Shares"), issued
and outstanding.
Each Common Share is entitled to one vote. A majority of the
Common Shares outstanding and entitled to vote must be present at
the Annual Meeting in person or by proxy in order to constitute a
quorum for the transaction of business. Under Delaware law,
abstentions are treated as present and entitled to vote, and
therefore will be counted in determining the existence of a
quorum and will have the effect of a vote against any matter
requiring the affirmative vote of a majority of the shares
present and entitled to vote at the Annual Meeting.
Broker "non-votes" are considered present but not entitled to
vote, and thus will be counted in determining the existence of a
quorum but will not be counted in determining approval of any
matter requiring the affirmative vote of a majority of the shares
present and entitled to vote at the Annual Meeting. There are no
dissenters' rights available with respect to any matter to be
considered at the Annual Meeting. Any shareholder giving a proxy
in the accompanying Form of Proxy has the right to revoke it at
any time prior to the voting thereof by delivery of notice of
revocation to the Corporation or by delivery of another proxy
subsequent to the date thereof. Such notices of revocation
should be addressed to the Corporate Secretary at the executive
offices of the Corporation located at Canada Trust Tower, BCE
Place, 161 Bay Street, Suite 3750, P.O. Box 703, Toronto,
Ontario, Canada, M5J 2S1. The Corporation's telephone number is
(416) 365-8080 and its fax number is (416) 365-8094.
The expense of solicitation of proxies will be borne by the
Corporation. Following the mailing of the proxy material,
solicitation of proxies may be made by mail, telephone,
facsimile, telegram or personal interview by some of the regular
employees of the Corporation or its subsidiaries, who will
receive no additional compensation for their services. The
Corporation has also retained Kissel-Blake Inc. to solicit
proxies personally or by mail, telephone, facsimile, or telegraph
from brokerage houses, custodians, fiduciaries and nominees for a
fee of $4,500 plus expenses. In addition, the Corporation will
reimburse brokers and other nominees for their expenses in
forwarding soliciting material to beneficial owners.
<PAGE 2>
ELECTION OF DIRECTORS
A board of nine directors is to be elected at the Annual Meeting
of Shareholders. Unless otherwise instructed, the proxy holders
will vote the proxies received by them for the Corporation's nine
nominees named below, all of whom are presently directors of the
Corporation. If any nominee of the Corporation is unable or
declines to serve as a director at the time of the Annual Meeting
of Shareholders, the proxies will be voted for the nominee
designated by the present Board to fill the vacancy. It is not
expected that any nominee will be unable or will decline to serve
as a director. The term of office of each person elected as a
director will continue until the next Annual Meeting of
Shareholders or until a successor has been elected and qualified.
Opposite the name of each nominee for election as a director is
(i) his age; (ii) his position with the Corporation, his
principal occupation and his business experience during the past
five years; and (iii) the year in which he first became a
director of the Corporation. All information is as of March 7,
1997.
PROPOSAL I
NOMINEES FOR ELECTION AS A DIRECTOR
Position with the Corporation;
Name Age Principal Occupation Diretor
and Business Experience During Past Since
Five Years
Paul A. Carroll 55 Chairman of the Executive 1991
Compensation/Pension Committee;
Chairman and Chief Executive
Officer, World Wide
Minerals Ltd. (Toronto-based
mining company); Counsel,
Smith Lyons (Toronto law firm)
since 1997 and prior thereto
Partner of Smith Lyons since
1973; Chairman, Juno Limited;
Director, Dundee Bancorp Inc.;
Director, Pan Pacific
Strategies Corp.
Morton A. Cohen 61 Chairman, President and Chief 1991
Executive Officer, Clarion Capital
Corporation (Cleveland-based
venture capital company) since
1982; Chairman, Cohesant
Technologies Inc.; Director, Gothic
Energy Corporation; Director,
Sentex Sensing Technology
Inc.; Director, DHB Capital Group
John M. Donovan 69 Member of the Audit Committee and 1991
Executive Compensation/Pension
Committee; Independent
Consultant since July 1990;
Director, Philex Gold Inc.
Thomas B. 65 Member of the Audit Committee and the 1989
Evans, Jr. Nominating Committee;
Vice Chairman, The Jefferson
Group Inc. (Washington D.C.
consulting firm) since December
1995; President, The Evans
Group Ltd. (Washington D.C.
consulting firm) since 1989;
Director, Juno Limited
Ned Goodman 59 Chairman, President and Chief 1991
Executive Officer, Dundee
Bancorp Inc. (a Toronto-based
financial services company) and
its subsidiary, Goodman &
Company Ltd., since January 1987;
Chairman, Dynamic Mutual Funds;
Chairman, Goodman & Company,
Investment Counsel; Director,
BGR Precious Metals Inc.;
Director, Kinross Gold
Corporation; Director, Knights
Gold Mining Co. Limited;
Director, Breakwater
Resources Ltd.
<PAGE 3>
Peter Lawson- 70 Chairman of the Board of Directors, 1960
Johnston Member of the Executive
Compensation/Pension Committee,
Member of the Executive Committee
and Chairman of the Nominating
Committee; Chairman and Trustee,
Solomon R. Guggenheim
Foundation; Chairman of the
Board, The Harry Frank
Guggenheim Foundation; Senior
Partner, Guggenheim
Brothers; President and
Director, Elgerbar Corporation;
Director, National Review, Inc.;
Limited Partner Emeritus,
Alex Brown & Sons, Inc.;
Director, UBS Private Investor
Funds, Inc.
Richard L. 58 President and Chief Executive Officer 1991
Lister of the Corporation since
May 1993; Chairman of the
Executive Committee and
Member of the Nominating
Committee; Vice Chairman of the
Board of Directors from 1991 to
May 1993; Director, Dundee
Bancorp Inc.; Vice Chairman,
Dundee Bancorp Inc. from
1991 to 1993
Patrick H. 81 Chairman of the Audit Committee; 1975
O'Neill Independent Mining
Consultant since 1982;
Counselor, American Geographical
Society, New York; Director,
Ireland U.S. Council for
Commerce and Industry, New York
William J. 66 Member of the Executive Committee; 1989
vanden Heuvel Counsel, Stroock, Stroock
& Lavan (attorneys at law, New
York) since 1984; Senior
Advisor, Allen & Company Inc.
(investment bankers) since
1984; Chairman of the Board, IRC
Group, Inc.; Co-Chairman,
Council of American
Ambassadors; Director, WinStar
Communications, Inc.
Vote Required for Election of Directors
Directors will be elected at the Annual Meeting by a plurality of
the votes cast at the meeting by the holders of shares
represented in person or by proxy. Votes may be cast for, or
withheld from, each nominee.
The Board recommends a vote "FOR" the election of each of the
foregoing persons.
REPORTS REQUIRED BY SECTION 16(a)
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's directors and executive officers, and persons who
own more than ten percent (10%) of the Corporation's Common
Shares, to file with the Securities and Exchange Commission and
any exchange on which the Corporation's Common Shares are traded
reports of ownership and changes in ownership of the
Corporation's Common Shares. Based solely on its review of the
copies of Forms 3, 4 and 5 received by the Corporation, or
written representations from certain reporting persons that no
Form 5's were required for such persons, the Corporation believes
that, during the fiscal year ended December 31, 1996, all Section
16(a) filing requirements applicable to its officers, directors
and 10% shareholders were complied with.
<PAGE 4>
BOARD MEETINGS AND COMMITTEES
The Corporation maintains standing Executive, Executive
Compensation/Pension, Audit and Nominating Committees.
The Executive Committee, whose members include Peter Lawson-
Johnston, William J. vanden Heuvel and Richard L. Lister, met
once during 1996. The purpose of the Committee is to act on
behalf of the Board and to authorize and approve capital
expenditures, which are subsequently ratified by the full Board.
The Executive Compensation/Pension Committee, whose members
include Paul A. Carroll, Peter Lawson-Johnston and John M.
Donovan, met once during 1996. The Executive
Compensation/Pension Committee sets policies and guidelines with
respect to compensation and pensions.
The Audit Committee met three times during 1996. Its members
include Patrick H. O'Neill, Thomas B. Evans, Jr. and John M.
Donovan. The Audit Committee reviews the financial reporting
process of the Corporation on behalf of the Board. In fulfilling
its responsibility, the Audit Committee recommended to the Board,
subject to shareholder approval, the selection of Deloitte &
Touche as the Corporation's independent auditors. During 1996,
the Audit Committee met with the Corporation's management and
with representatives of Deloitte & Touche without the
Corporation's management being present.
The Nominating Committee met one time in 1996. Its members
include Peter Lawson-Johnston, Thomas B. Evans, Jr. and Richard
L. Lister. The Nominating Committee advises the Board on
prospective nominees for election to the Board. It considers
possible director nominees recommended by shareholders, who may
submit their recommendations by writing to the Nominating
Committee at the Corporation's principal executive office.
The Board met eight times during 1996. No director attended
fewer than 75% of the meetings of the Board and its committees
held during the period in 1996 except for one.
Outside directors received $10,000 annually plus $600 for each
meeting of the Board or any of its committees attended through
December 31, 1996. Executives who are directors receive no
compensation as directors.
PRINCIPAL SHAREHOLDERS AND SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of March 7, 1997, information
concerning the Common Shares beneficially owned by each person
who, to the knowledge of the Corporation, is the holder of 5% or
more of the Common Shares of the Corporation, each director, and
each Named Officer (as defined on page 9 under Executive
Compensation) who was an executive officer as of that date, and
all executive officers and directors of the Corporation as a
group. Except as otherwise noted, each beneficial owner has sole
investment and voting power with respect to the listed shares.
<PAGE 5>
Shares Percentage
Name of Beneficial Owner(1)(2) Beneficially Owned (3)Beneficially Owned
Dundee Bancorp International Inc. 2,840,427 34.3 percent
Scotia Plaza, 55th Floor
40 King Street West
Toronto, Ontario, Canada M5H 4A9
Paul A. Carroll 35,306(4)(5) *
Morton A. Cohen 312,676(4)(5)(6) 3.8 percent
John M. Donovan 35,306(4)(5) *
Thomas B. Evans, Jr. 45,285(4)(5) *
Ned Goodman 2,875,733(4)(5)(7) 34.7 percent
Scotia Plaza, 55th Floor
40 King Street West
Toronto, Ontario, Canada M5H 4A9
Peter Lawson-Johnston 93,871(4)(5)(8) 1.1 percent
Richard L. Lister 690,599(5)(9)(10)(12) 8.1 percent
Canada Trust Tower, BCE Place
161 Bay Street, Suite 3750
Toronto, Ontario, Canada M5J 2S1
Patrick H. O'Neill 39,971(4)(5) *
William J. vanden Heuvel 47,491(4)(5) *
Allen J. Palmiere 80,306(5)(10) 1.0 percent
Peter J. Goodwin 63,111(10)(12) *
Terrance J. Hogan 54,284(10)(11)(12) *
G. Russell Lewis 15,000(10) *
All Directors and Named Officers 4,388,939(4)(5)(6)(7)(8)(9)(10)(11)(12)
as a group (13 persons) 49.4 percent
__________________
* Denotes less than 1% of Common Shares outstanding
(1) A Schedule 13G, prepared on behalf of Merrill Lynch & Co.,
Inc. and various of its subsidiaries, was filed with the
Securities and Exchange Commission indicating that it could
be construed to be a beneficial owner of 880,566 Common
Shares. However, Merrill Lynch & Co., Inc. disclaims any
beneficial ownership of the Common Shares because they were
held in proprietary trading accounts.
(2) Zesiger Capital Group LLC has filed a Schedule 13G with the
Securities and Exchange Commission indicating that it could
be deemed to be a beneficial owner of 710,813 Common Shares.
However, Zesiger Capital Group LLC disclaims any beneficial
ownership of the Common Shares because they were purchased
for customer accounts.
(3) Computed in accordance with Rule 13d-3(d)(1) of the
Securities Exchange Act of 1934, as amended.
(4) These directors were each granted options for 10,000 Common
Shares at $5.00 per share exercisable in two installments of
5,000 each beginning on September 17, 1992 and September 17,
1993, respectively, and extend for a period of five years
from the date the options first become exercisable. On May
26, 1993, these directors were each granted options for an
additional 15,000 Common Shares 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. In addition, these directors were
each granted options for an additional 5,000 Common Shares
at $9.125 per share exercisable in two installments of 2,500
each beginning on February 8, 1996 and February 8, 1997,
respectively, and extending for a period ending on February
8, 2001. Shares shown in the table include the 30,000
currently exercisable options.
<PAGE 6>
(5) Each of these directors and members of management
purchased 5,000 Common Shares from G.E. Wood, former
President and Chief Executive Officer, as part of an
assignment of the Corporation's settlement agreement with
Mr. Wood dated August 10, 1993.
(6) Includes 276,856 Common Shares owned by Clarion Capital
Corporation, a company which Mr. Cohen may be deemed to be
the beneficial owner.
(7) Includes 2,840,427 Common Shares owned by Dundee Bancorp
International Inc., a wholly-owned subsidiary of Dundee
Bancorp Inc., of which Mr. Goodman is Chairman of the Board
and over which he may be deemed to have voting and
investment power.
(8) Includes 18,006 Common Shares beneficially owned by Elgerbar
Corporation. Mr. Lawson-Johnston is President and a
director of Elgerbar Corporation and has shared voting and
investment power with respect to the Common Shares held by
it.
(9) In 1991, Richard L. Lister, President and
Chief Executive Officer of the Corporation, acquired 357,000
Common Shares under the Corporation's Key Executive Stock
Purchase Plan for an aggregate purchase price of $1,749,300
($4.90 per share). The Corporation loaned Mr. Lister the
full amount of the purchase price. This non-interest
bearing loan, which was originally scheduled to mature in
1997, was extended for one year by approval of the Board.
The loan is evidenced by a promissory note secured by a
pledge of the Common Shares. If Mr. Lister leaves the
employ of the Corporation 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
Common Shares in a manner consistent with the recommendation
of the Board.
(10) Includes Common Shares issuable upon exercise
of vested options as follows: Mr. Lister, 220,000
Common Shares; Mr. Palmiere, 75,000 Common Shares; Mr.
Goodwin, 50,000 Common Shares; Mr. Hogan, 21,000 Common
Shares; Mr. Lewis, 15,000 Common Shares; and all Named
Officers and directors as a group, 621,000 Common Shares.
(11) As part of the Corporation's purchase of Alumitech, Inc., in
May 1995 Mr. Hogan was issued 28,558 Common Shares and
options for an additional 22,000 Common Shares at $9.75 per
share exercisable in two installments of 11,000 Common
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.
(12) Includes Common Shares purchased in 1995 and 1996, plus any
applicable stock dividends, in accordance with the terms and
conditions of the Corporation's employee stock purchase plan
as follows: Mr. Lister, 11,386 Common Shares; Mr. Goodwin,
5,319 Common Shares; and Mr. Hogan, 3,118 Common Shares.
<PAGE 7>
REPORT OF THE
EXECUTIVE COMPENSATION / PENSION COMMITTEE
The Corporation applies a consistent philosophy to compensation
for all employees, including senior management. This philosophy
is based on the premise that the achievements of the Corporation
result from the coordinated efforts of all individuals working
toward common objectives. The Corporation strives to achieve
those objectives through teamwork that is focused on meeting the
expectations of customers and shareholders.
COMPENSATION PHILOSOPHY
The goals of the compensation program are to align compensation
with business objectives and performance, and to enable the
Corporation to attract, retain and reward executive officers who
contribute to the long term success of the Corporation. The
Corporation's compensation program for executive officers,
including the Chief Executive Officer ("CEO"), is based on the
same five principles applicable to compensation decisions for all
employees of the Corporation:
1. The Corporation pays competitively. The Corporation is
committed to providing a pay program that helps attract and
retain the best people in the industry. To ensure that pay is
competitive, the Corporation regularly compares its pay practices
with those of other leading companies and sets its pay parameters
based on this review.
2. The Corporation pays for relative sustained performance.
Executive officers are rewarded based upon corporate performance,
business unit performance and individual performance. Corporate
performance and business unit performance are evaluated by
reviewing the extent to which strategic and business plan goals
are met, including such factors as operating profit, performance
relative to competitors and timely new product introductions.
Individual performance is evaluated by reviewing organizational
and management development progress against set objectives and
the degree to which teamwork and Corporation values are fostered.
3. The Corporation strives for fairness in the administration
of pay.
4. The Corporation strives to achieve a balance of the
compensation paid to a particular individual and the compensation
paid to other executives both inside the Corporation and at
comparable companies.
5. The Corporation believes that employees should understand
how the performance evaluation and pay administration process
works.
The process of assessing performance is as follows:
- At the beginning of the performance cycle, the evaluating
manager sets objectives and key goals.
- The evaluating manager gives the employee ongoing feedback
on performance.
- At the end of the performance cycle, the manager evaluates
the accomplishments of objectives/key goals.
- The manager compares the results to the results of peers
within the operating unit.
<PAGE 8>
- The evaluating manager communicates the comparative results
to the employee.
- The comparative result affects decisions on salary, bonuses
and stock options.
COMPENSATION VEHICLES
The Corporation has had a history of using a simple total
compensation program that consists of cash and, since 1990,
equity-based compensation. Having a compensation program that
allows the Corporation to successfully attract and retain key
employees, permits it to provide useful products and services to
customers, enhance shareholder value, motivate technological
innovation, foster teamwork, and adequately reward employees.
The vehicles are:
Cash-Based Compensation
Salary: The Corporation sets base salary for employees by
reviewing the aggregate of base salary and annual bonus for
competitive positions in the market.
Equity-Based Compensation
Stock Option Program: The purpose of this program is to provide
additional incentives to employees to work to maximize
shareholder value. The option program also utilizes vesting
periods to encourage key employees to continue in the employ of
the Corporation.
Bonus Program
The Corporation maintains a bonus program for certain key
employees. The plan is specifically designed to grant greater
compensation to those key employees to recognize their
performance in the plan year.
1996 PERFORMANCE
At the beginning of fiscal 1996, the Executive
Compensation/Pension Committee reviewed performance objectives
for the Corporation. Performance relative to these objectives
was the basis for determining the 1996 bonus of the President and
CEO. Based on the financial results for the period ended
December 31, 1996, no bonus was given.
Similarly, 1996 performance goals for the other Named Officers
were approved by the President and CEO at the beginning of the
year. Performance measures and goals were similar to those of
the President and CEO. Their performance for 1996 was evaluated
by the President and CEO, and no bonuses were granted.
Executive Compensation/
Pension Committee
PAUL A. CARROLL
JOHN M. DONOVAN
PETER LAWSON-JOHNSTON
<PAGE 9>
EXECUTIVE COMPENSATION
The following table sets forth the annual and long term
compensation, attributable to all service in the fiscal years
1996, 1995 and 1994, paid to those persons who were at the end of
the 1996 fiscal year (i) the chief executive officer; and (ii)
the other four most highly paid executive officers of the
Corporation (collectively, the "Named Officers"):
Summary Compensation Table
Annual Securities
Name and Compensation Underlying All Other
Principal Position Year Salary Bonus Options Compensation (2)
(1)
Richard L. Lister 1996 $267,537 $0 _ $39,994
President and 1995 $265,911 $75,000 100,000 $37,225
Chief Executive 1994 $265,322 $0
Allen J. Palmiere 1996 $139,368 $0 _ $15,788
Vice President, 1995 $119,629 $24,000 15,000 $6,364
Chief Financial 1994 $113,428 $45,371 _ $5,479
Officer and
Assistant Secretary
Peter J. Goodwin 1996 $144,530 $0 $20,230
Vice President, 1995 $132,667 $17,500 25,000(3) $15,120
Zemex
President,
Industrial
Minerals
Terrance J. Hogan 1996 $136,667 $0 _ $14,816
President, 1995 $120,192 $36,000 32,000 $3,395
Alumitech, Inc.
G. Russell Lewis 1996 $144,200 $0 _ $7,024
President, Metal 1995 $138,866 $4,000 10,000 $6,829
Powders 1994 $133,743 $40,000 - $8,403
_________________
(1) On February 8, 1995, Mr. Lister, Mr. Palmiere, Mr. Goodwin,
Mr. Hogan and Mr. Lewis were granted options of 100,000,
15,000, 25,000, 10,000 and 10,000, respectively, at an
exercise price of $9.125 under the 1995 Stock Option Plan.
On May 12, 1995, Mr. Hogan was issued options for 22,000
Common Shares at $9.75 per share exercisable in two
installments of 11,000 Common Shares each beginning on May
12, 1996 and May 12, 1997, respectively, in exchange for his
interest in Alumitech, Inc. (see Note 11 Principal
Shareholders and Security Ownership of Management).
(2) Constitutes premiums for term life insurance exceeding
amounts eligible to most employees, automobile benefits, and
employer matched contributions to a group registered retirement
plan and an employee stock purchase plan. In 1995, the
Corporation adopted an employee stock purchase plan whereby
employees may elect to invest up to 10% of their earnings and the
Corporation matches funding for the purchase of the Corporation's
Common Shares. Common Shares purchased under this plan are held
for a one-year vesting period. Amounts shown for Mr. Lister, Mr.
Goodwin and Mr. Hogan include $25,200, $14,200 and $13,000,
respectively, as a benefit derived from participation in the plan
in 1996 and benefits of $25,200 and $9,450, respectively, for Mr.
Lister and Mr. Goodwin in 1995. Amounts shown for Mr. Lister do
not include imputed interest of $100,453, $130,585 and $96,331 in
1996, 1995, and 1994, respectively, on a loan Mr. Lister received
under the Corporation's Key Executive Stock Purchase Plan. The
Corporation does not reimburse Mr. Lister for any tax
consequences arising from this loan. (See Note 9 Principal
Shareholders and Security Ownership of Management.)
<PAGE 10>
(3) On July 14, 1994, Mr. Goodwin was granted options for 25,000
Common Shares at $11.50 per share under the 1993 Stock
Option Plan. On July 18, 1996, these options were repriced
to $9.125.
OPTION REPRICING
The following table shows the repricing of any stock options
previously awarded to any of the Named Officers pursuant to the
Corporation's stock option plans.
Number of Market Original
Date Securities Price Exercise New
of Underlying of Stock Price Exercise Expiry
Named Repricing Options at at Time Price (1) Date
Officer Repriced Time of of
Repricing Repricing
Peter July 18 July 14,
J. Goodwin 1996 25,000 $7.125 $11.50 $9.125 2000
Mr. Goodwin was originally granted 25,000 stock options on July
14, 1994 at $11.50. Given that the Corporation's common shares
have not traded in this price range since 1994 and given that the
purpose of the option program is to provide incentive to valuable
employees, on July 18, 1996 the Board approved the repricing of
these share options to $9.125, commensurate with the price of Mr.
Goodwin's other options. The term of the options remains the
same.
OPTION EXERCISE AND YEAR-END VALUES TABLE
With respect to the Named Officers, the following table sets
forth the number of options exercised, the value realized upon
exercise and the value of outstanding options at December 31,
1996, using $7.00, the December 31, 1996 closing price of the
Corporation's Common Shares on the New York Stock Exchange.
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
Number of Value of
Unexercised In-The-Money
Shares Value Options Options
Acquired Realized at Year-End at Year-End
Named Officer on Exercise on Exercise Exercisable/ Exercisable/
Unexercisable Unexercisable
Richard L.
Lister _ _ 170,000/50,000 $180,000/$0
Allen J.
Palmiere _ _ 67,500/7,500 $0/$0
Peter J.
Goodwin _ _ 35,500/12,500 $0/$0
Terrance J.
Hogan _ _ 16,000/16,000 $0/$0
G. Russell
Lewis 16,000 $72,000 12,500/2,500 $7,500/$0
PENSION PLAN
Pursuant to the Corporation's pension plan, employees are
entitled to pension benefits after five years of service with the
Corporation. The amount of such benefits depends upon salary and
length of service as shown in the table below. The service
factor is 1 1/2 percent per year. There is a Social Security offset. As
of January 1, 1997, the number of credited years of service and
the compensation covered by the pension plan for the eligible
Named Officers are: Richard L. Lister, 5.5 and $267,537; Peter J.
Goodwin, 2.5 and $144,530; Terrance J. Hogan, 4.1 and $136,667;
and G. Russell Lewis, 28.4 and $144,200.
<PAGE 11>
Average Final Compensation Credited Service as of Normal Retirement Date
as of Normal Retirement Date 15 20 25 30 35
$ 50,000 $ 8,613 $11,484 $14,354 $17,225 $20,096
75,000 $14,238 $18,984 $23,729 $28,475 $33,221
100,000 $19,863 $26,484 $33,104 $39,725 $46,346
125,000 $25,488 $33,984 $42,479 $50,975 $59,471
150,000 $31,113 $41,484 $51,854 $62,225 $72,596
175,000 $31,563 $42,084 $52,604 $63,125 $73,646
200,000 $31,563 $42,084 $52,604 $63,125 $73,646
225,000 $31,563 $42,084 $52,604 $63,125 $73,646
Note: All benefits shown were estimated using the 1997 Social
Security Law and assume the employee terminates employment during
1997 on his Normal Retirement Date (age 65). The benefits shown
are payable at Normal Retirement Date as a Five Year Certain and
Life Annuity, the normal form for an unmarried participant. All
amounts are annual.
PERFORMANCE GRAPH
The following performance graph compares the performance of the
Corporation's Common Shares to the Dow Jones Industrial Average
Index and the Dow Jones Basic Materials Average Index over the
past five-year period. The graph assumes that the value of the
investment in the Corporation's Common Shares and each index was
$100 at December 31, 1991 and that all dividends were reinvested.
As a diversified producer of industrial minerals and metal
products, many of the companies with which the Corporation
competes are private and peer group comparative data is not
available.
1991 1992 1993 1994 1995 1996
Zemex Total Return 100 163 207 268 315 230
Dow Jones Industrial 100 107 126 132 181 232
Average
Dow Jones Basic Materials 100 111 126 133 165 192
Average
<PAGE 12>
PROPOSAL II
AUDITORS
The Board, upon the recommendation of the Audit Committee, has
selected Deloitte & Touche as independent auditors of the
accounts of the Corporation and its subsidiaries for the fiscal
year ending December 31, 1997. A proposal will be presented at
the Annual Meeting to ratify the appointment of Deloitte & Touche
as the Corporation's independent auditors. Representatives of
Deloitte & Touche will be present at the Annual Meeting and will
be available to respond to questions and may make a statement if
they so desire.
Vote Required for Ratification of Auditors
Approval of the appointment of auditors requires the affirmative
vote of the majority of the holders of outstanding Common Shares
entitled to cast votes at the meeting.
The Board unanimously recommends that the shareholders vote "FOR"
the ratification of the appointment of Deloitte & Touche as
independent auditors for the fiscal year ending December 31,
1997.
PROPOSAL III
EMPLOYEE STOCK PURCHASE PLAN
INCREASE IN AUTHORIZED SHARES FROM 250,000 SHARES TO 500,000
SHARES
There will be presented at the Annual Meeting a proposal that the
shareholders approve an increase in the number of shares
authorized to be purchased under the Corporation's Employee Stock
Purchase Plan (the "Plan"), a plan approved by the shareholders
on June 14, 1994. The Plan is an employee benefit plan that
offers eligible employees of the Corporation the opportunity to
purchase shares of the Corporation's common stock through regular
payroll deductions. The initial number of authorized shares
approved by the shareholders was 250,000 shares.
The purpose of the Plan is to provide incentive to employees and
to secure for the Corporation and its shareholders the benefits
which an interest in the ownership of shares of the Corporation's
common stock will provide to its employees, who are responsible
for the Corporation's future growth and continued success.
Each eligible employee may contribute to the Plan up to ten
percent of his or her base compensation. The Corporation will
also contribute to the Plan an amount equal to the amount of each
participant's contribution. Each quarter, the aggregate amount
contributed on behalf of each employee will be used to purchase
common stock at a price equal to its average fair market value
during the calendar quarter preceding the date of purchase.
After purchase, the stock is held in safekeeping by the
Corporation for each participant for a period of one year.
During the one-year holding period, if a participating employee
terminates his or her employment with the Corporation, unless the
participant ceases to be an employee by reason of death,
disability or retirement, he or she immediately ceases
participation in the Plan and the contributions by the
Corporation and stock representing the contributions by the
Corporation are forfeited by them. In addition, pursuant to the
terms of the Plan, upon termination the participant would only be
entitled to receive the lesser of the participant's original
contributions to the Plan or the value of the shares purchased
with the participant's contributions. Under the Plan, however,
the Board has the discretion to pay the full value of all shares
held for the participant before the termination instead of
allowing a forfeiture to occur. If a participating employee is
still employed at the end of the one-year holding period, or upon
death, disability, or retirement during the one-year holding
period, all shares held by the Corporation for that employee will
be distributed to the employee. During the one-year holding
period, dividends, voting rights, and proxy statements will be
passed through to the participating employees.
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In accordance with the terms of the Plan, shareholder approval is
required to increase the total authorized shares. Assuming that
employees continue to contribute at the same level as they did in
1995 and 1996, it is anticipated that the initial 250,000
authorized shares will be purchased by the first quarter of 1998.
Recognizing the importance of providing an opportunity for
ownership incentives to employees, a proposal to increase the
number of authorized shares available to be purchased under the
Plan from 250,000 shares to 500,000 shares will be presented at
the Annual Meeting.
The Board of Directors recommends a vote "FOR" the approval of an
increase in the number of authorized shares available to be
purchased pursuant to the Corporation's Employee Stock Purchase
Plan from 250,000 shares to 500,000 shares. The affirmative vote
of a majority of the shares of common stock present and voting in
person or by proxy is required to approve the increase in
authorized shares.
SHAREHOLDERS' PROPOSALS FOR 1998 ANNUAL MEETING
In order to be considered for inclusion in the Corporation's
proxy statement for the 1998 Annual Meeting of Shareholders,
proposals from shareholders must be received by the Corporation
on or before December 1, 1997. Such proposals should be
addressed to the Corporate Secretary, Zemex Corporation, Canada
Trust Tower, BCE Place, 161 Bay Street, Suite 3750, Toronto,
Ontario, M5J 2S1.
OTHER MATTERS
Management is not aware of any other matters to be considered at
the meeting other than as set forth in this Proxy Statement.
However, if any other matters properly come before the meeting,
it is the intention of the persons named in the accompanying Form
of Proxy in their discretion to vote the proxies in accordance
with their best judgment on such matters.
March 27, 1997
