<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [ ]
Filed by a party other than the Registrant [ X ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to section 240.14a-11(c) or
section 240.14a-12
ZEMEX CORPORATION
--------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
BOWNE
--------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (check the appropriate box)
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)
[ ] Fee computed on table below per Exchange Act Rule 14a-6(i)(4)
and O-11
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule O-11:
(4) Proposed maximum aggregate value of transaction:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule O-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form of Schedule and the date of its filing.
(1) Amount previously paid: 0
(2) Form, Schedule or Registration Statement No.: Preliminary Proxy
Statement
(3) Filing Party: Zemex Corporation
(4) Date Filed: March 25, 1999
Note: $125 filing fee is no longer required.
<PAGE> 2
ZEMEX CORPORATION
Canada Trust Tower, BCE Place
161 Bay Street, Suite 3750
P.O. Box 703
Toronto, Ontario
Canada M5J 2S1
NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS
MONDAY MAY 10, 1999
To the Shareholders:
Notice is hereby given that the Annual and Special Meeting of Shareholders of
Zemex Corporation will be held in the Patty Watt Room at the Design Exchange,
234 Bay Street, Toronto, Ontario, M5K 1B2, on Monday May 10, 1999 at 1:00 p.m.
(Toronto time) for the following purposes:
1. to receive the audited consolidated financial statements of the
Corporation for the fiscal year ended December 31, 1998, together with
the auditors' report thereon;
2. to elect directors of the Corporation;
3. to ratify the appointment of Deloitte & Touche LLP as independent
public auditors of the Corporation and to authorize the directors to
fix the remuneration to be paid to the auditors;
4. to approve the Corporation's 1999 Stock Option Plan;
5. to approve the Corporation's 1999 Employee Stock Purchase Plan; and
6. to transact such other business as may properly come before the
meeting.
The accompanying proxy statement provides additional information relating to the
matters to be dealt with at the meeting and forms part of this notice.
If you are unable to attend the meeting in person, please sign and date the
enclosed proxy and return it promptly in the enclosed envelope. Any person
giving a proxy has the power to revoke it at any time prior to its exercise at
the meeting. Even though you execute the proxy, you may still vote your stock in
person at the meeting. It is important that your stock be represented regardless
of the number of shares you may hold. We hope that you can attend the meeting.
By Order of the Board of Directors,
/s/ Patricia K. Moran
Toronto, Ontario Patricia K. Moran
March 25, 1999 Corporate Secretary and Assistant Treasurer
<PAGE> 3
ZEMEX CORPORATION
Canada Trust Tower, BCE Place
161 Bay Street, Suite 3750
P.O. Box 703
Toronto, Ontario
Canada M5J 2S1
PROXY STATEMENT
SOLICITATION OF PROXIES
The information contained in this proxy statement is furnished in connection
with the solicitation of proxies to be used at the Annual and Special Meeting of
Shareholders (the "Meeting") of Zemex Corporation (the "Corporation" or
"Zemex"), a company incorporated under the Canada Business Corporations Act, to
be held in the Patty Watt Room at the Design Exchange, 234 Bay Street, Toronto,
Ontario, M5K 1B2 on Monday May 10, 1999 at 1:00 p.m. and at any adjournment
thereof for the purposes set forth in the accompanying notice of meeting. 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 30,
1999. The 1998 annual report to the Corporation's shareholders, which includes
its financial statements, is also being mailed on or about March 30, 1999 to
each shareholder of record as of the close of business on March 25, 1999. Such
annual report, however, is not to be deemed to be part of this proxy
solicitation material.
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 directors,
officers or 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.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The Corporation's board of directors (the "Board") has fixed the close of
business on March 25, 1999 as the record date for the determination of
shareholders of the Corporation entitled to vote at the Meeting. As of the
record date, the Corporation had approximately 8,707,796 common shares (the
"Common Shares") issued and outstanding.
Each Common Share is entitled to one vote. Two shareholders present in person or
by proxy are required in order to constitute a quorum for the transaction of
business. Abstentions are treated as present and entitled to vote, 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 Meeting.
As indicated on page 8 under the heading "Principal Shareholders and Security
Ownership of Management", The Dundee Bank, beneficially owns 34.4% of the issued
and outstanding Common Shares of the Corporation.
1
<PAGE> 4
APPOINTMENT AND REVOCATION OF PROXIES
The persons named in the enclosed form of proxy accompanying this proxy
statement are directors and/or officers of the Corporation. A shareholder of the
Corporation has the right to appoint a person other than the person specified in
such form of proxy and who need not be a shareholder of the Corporation to
attend and act for him and on his behalf at the Meeting. Such rights may be
exercised by striking out the name of the persons specified in the form of
proxy, inserting the name of the person to be appointed in the blank space
provided in the form of proxy, signing the form of proxy and returning it in the
reply envelope in the manner set forth in the accompanying notice of 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 UP TO
4:00 P.M. (TORONTO TIME) ON THE BUSINESS DAY PRECEDING THE DATE OF THE MEETING,
OR ANY ADJOURNMENT THEREOF. SUCH NOTICES OF REVOCATION SHOULD BE ADDRESSED TO
EITHER OF THE ADDRESSES LISTED BELOW:
<TABLE>
<S> <C>
ZEMEX CORPORATION CIBC MELLON TRUST COMPANY
CANADA TRUST TOWER, BCE PLACE 200 QUEEN'S QUAY EAST
161 BAY STREET, SUITE 3750 UNIT #6
TORONTO, ONTARIO TORONTO, ONTARIO
CANADA, M5J 2S1 CANADA M5A 4K9
ATTENTION: CORPORATE SECRETARY ATTENTION: MOE HARRIFF
TELEPHONE: (416) 365-8080 TELEPHONE: (416) 368-1481
FAX : (416) 365-8094 FAX: (416) 363-9524
</TABLE>
WRITTEN REVOCATION MAY ALSO BE SUBMITTED TO THE CHAIRMAN OF THE MEETING PRIOR TO
THE COMMENCEMENT OF THE MEETING ON THE DATE OF THE MEETING OR ANY ADJOURNMENT
THEREOF OR IN ANY OTHER MANNER PERMITTED BY LAW.
VOTING OF SHARES REPRESENTED BY MANAGEMENT PROXIES
The persons in the enclosed form of proxy will vote the shares in respect of
which they are appointed by proxy on any ballot that may be called for in
accordance with the instructions therein. In the absence of such specification,
such shares will be voted in favour of each of the matters referred to herein.
The enclosed form of proxy confers discretionary authority upon the persons
named therein with respect to amendments to or variations of matters identified
in the notice of meeting and with respect to other matters, if any, which may
properly come before the Meeting. At the date of this proxy statement, the
management of the Corporation knows of no such amendments, variations or other
matters to come before the Meeting. However, if any other matters which are not
known to management should properly come before the Meeting, the proxy will be
voted on such matters in accordance with the best judgment of the named proxy.
DOLLAR FIGURES
Unless expressly stated to the contrary, all "$" figures contained in this proxy
statement refer to U.S. dollars.
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<PAGE> 5
BUSINESS OF THE MEETING
ELECTION OF DIRECTORS
A board of eight directors is to be elected at the Meeting. All directors so
elected will hold office until the next annual meeting of shareholders of the
Corporation or until their successors are elected or appointed. It is not
expected that any nominee will be unable or will decline to serve as a director;
however, if that should occur for any reason at or prior to the Meeting, the
persons named in the enclosed form of proxy reserve the right to vote for the
nominee designated by the present Board to fill the vacancy.
Unless otherwise instructed, the management representatives named in the
enclosed form of proxy will vote the proxies received by them for the
Corporation's eight nominees named below, all of whom are presently directors of
the Corporation, unless the shareholder who has given such proxy has directed
that the shares be withheld from voting in the election of directors.
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 1,
1999.
PROPOSAL I
NOMINEES FOR ELECTION AS A DIRECTOR
<TABLE>
<CAPTION>
POSITION WITH THE CORPORATION;
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE DURING PAST DIRECTOR
NAME AGE FIVE YEARS SINCE
- ---- --- -------------------------------------------------------- --------
<S> <C> <C>
Paul A. Carroll 57 Chairman of the Executive Compensation / Pension 1991
Committee; Member of the Corporate Governance Committee;
Chairman and Chief Executive Officer, World Wide
Minerals Ltd. (Toronto-based mining company) since
January 1997; 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, Tahera Corporation
Morton A. Cohen 63 Chairman, President and Chief Executive Officer, Clarion 1991
Capital Corporation (Cleveland-based venture capital
company) since 1982; Chairman, Cohesant Technologies,
Inc.; Director, Gothic Energy Corporation; Director,
Sentex Sensing Technologies Inc.; Director, DHB Capital
Group
John M. Donovan 71 Chairman of the Audit Committee; Member of the Executive 1991
Compensation / Pension Committee and the Executive
Committee; Independent Consultant since July 1990;
Director, Philex Gold Inc.
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
POSITION WITH THE CORPORATION;
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE DURING PAST DIRECTOR
NAME AGE FIVE YEARS SINCE
- ---- --- -------------------------------------------------------- --------
<S> <C> <C>
R. Peter Gillin 50 Chairman of the Corporate Governance Committee; Vice 1999
Chairman and Director, N M Rothschild &
Sons Canada Limited since 1996; prior
to 1996, Managing Director and Head of
the Mining Group, ScotiaMcLeod Inc.
Peter O. Lawson-Johnston 72 Chairman of the Board of Directors, Member of the 1960
Executive Compensation / Pension Committee, Member of
the Executive 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.
Richard L. Lister 60 President and Chief Executive Officer of the Corporation 1991
since May 1993; Chairman of the Executive Committee;
Director, Dundee Bancorp Inc.
Garth A.C. MacRae 64 Member of the Audit and Executive Committees; Vice 1998
Chairman and Director, Dundee Bancorp Inc. since 1994;
Director of Breakwater Resources Ltd.; Director, BGR
Precious Metals Inc.; Director, Black Hawk Mining Inc.;
Director, Dimethaid Research Inc.; Director, Reserve
Royalty Corporation; Director, Eurogas Corporation
William J. vanden Heuvel 68 Member of the Executive and Corporate Governance 1989
Committees; 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.
</TABLE>
VOTE REQUIRED FOR ELECTION OF DIRECTORS
Directors will be elected at the Meeting by a majority 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.
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<PAGE> 7
PROPOSAL II
AUDITORS
APPOINTMENT OF AUDITORS
Deloitte & Touche LLP, independent certified public accountants, were first
appointed auditors of the Corporation in 1993. The management representatives in
the enclosed form of proxy intend to vote the shares represented by such proxy
in favour of a resolution appointing Deloitte & Touche LLP as independent
auditors of the accounts of the Corporation and its subsidiaries for the fiscal
year ending December 31, 1999 and authorizing the Board to fix the remuneration
of the auditors, unless the shareholder who has given such proxy has directed
that the shares represented thereby be withheld from voting in the appointment
of auditors. Representatives of Deloitte & Touche LLP will be present at the
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 a
majority of the votes present in person or by proxy.
THE BOARD UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS INDEPENDENT AUDITORS
FOR THE FISCAL YEAR ENDING DECEMBER 31, 1999.
PROPOSAL III
1999 STOCK OPTION PLAN
APPROVAL OF 1999 STOCK OPTION PLAN
The Zemex Corporation 1999 Stock Option Plan (the "Option Plan") was adopted by
the Board on January 15, 1999, subject to approval by the Corporation's
shareholders. The purpose of the Option Plan is to promote the interests of the
Corporation by affording its affiliates, employees, consultants and members of
the Board an incentive, by means of an increased opportunity to acquire Common
Shares, to share in the increase in value of the Common Shares, to remain
associated with the Corporation and to exert their maximum efforts on its
behalf. Although the material terms of the Option Plan are substantially similar
to the Corporation's predecessor stock option plan, shareholder approval of the
Option Plan is required in connection with the recent listing of the
Corporation's Common Shares on The Toronto Stock Exchange. A copy of the Option
Plan is attached to this proxy statement as Exhibit "A".
The Option Plan provides that a maximum aggregate of 272,543 Common Shares may
be issued. In addition, the Option Plan stipulates that the aggregate number of
Common Shares reserved for issuance to any one participant upon the exercise of
options shall not exceed 5% of the total number of issued and outstanding Common
Shares of the Corporation.
5
<PAGE> 8
Under the Option Plan, options for the purchase of Common Shares may be granted
to employees, non-employee directors and consultants of the Corporation or any
affiliate. Each option is granted for a term of up to 10 years, subject to
certain limitations, including the event of the death of the optionee or if the
optionee ceases to be a participant under the Option Plan, and may be exercised
at a price per Common Share that is not less than the closing price of the
Common Shares on The Toronto Stock Exchange or the New York Stock Exchange on
the trading day immediately preceding the date on which the applicable option is
granted.
In addition, under the Option Plan a participant may, rather than exercise
options which he or she is entitled to exercise, elect to require the
Corporation to purchase for cancellation any such options, in whole or in part.
Upon such election and, in lieu of receiving the Common Shares to which the
purchased options relate, the Corporation, in its sole discretion, shall deliver
to the Participant either (i) a cash payment of an amount equal to the product
of the number of Common Shares to which the purchased options relate multiplied
by the difference between the fair market value of the Common Shares to which
the purchased options related and the exercise price for such Common Shares; or
(ii) that number of Common Shares, disregarding fractions, equal to the cash
payment described above. In both cases, the Corporation will withhold required
amounts on account of income taxes, which amounts will be remitted by the
Corporation.
VOTE REQUIRED TO APPROVE 1999 STOCK OPTION PLAN
Approval of the 1999 Stock Option Plan requires the affirmative vote of a
majority of the votes present in person or by proxy, excluding any votes cast by
insiders of the Corporation to whom Common Shares may be issued pursuant to the
Option Plan and their associates, aggregating 1,065,231 votes on the date
hereof.
THE BOARD UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE APPROVAL
OF THE CORPORATION'S 1999 STOCK OPTION PLAN.
PROPOSAL III
1999 EMPLOYEE STOCK PURCHASE PLAN
APPROVAL OF 1999 EMPLOYEE STOCK PURCHASE PLAN
At the Meeting, a proposal will be presented to the shareholders to approve the
1999 Employee Stock Purchase Plan (the "1999 ESPP"), an employee benefit plan
that offers eligible employees of the Corporation the opportunity to purchase
Common Shares of the Corporation through regular payroll deductions. The 1999
ESPP was adopted by the Board on January 15, 1999. Although the material terms
of the ESPP are substantially similar to the Corporation's predecessor employee
stock purchase plan, shareholder approval of the ESPP is required in connection
with the recent listing of the Corporation's Common Shares on The Toronto Stock
Exchange. A copy of the 1999 ESPP is attached to this proxy statement as Exhibit
"B".
6
<PAGE> 9
The purpose of the 1999 ESPP is to secure for the Corporation and its
shareholders the benefits of the incentive which ownership of Common Shares of
the Corporation will provide to its employees. Each eligible employee may
contribute to the 1999 ESPP up to 10% of his or her base compensation. The
Corporation will also contribute to the 1999 ESPP an amount equal to the amount
of each participant's contribution. Each quarter, the aggregate amount
contributed on behalf of each participant will be used to purchase Common Shares
at a price equal to its fair market value during the calendar quarter preceding
the date of purchase. After purchase, the Common Shares will be held by the
Corporation for each participant for a period of one year. During the one-year
holding period, dividends, voting rights and proxy statements will be passed
through to the participants.
During the one-year holding period, if a participant 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 will immediately cease
participation in the 1999 ESPP and the contributions by the Corporation and
Common Shares representing the contributions by the Corporation will be
forfeited by them. In addition, under the terms of the 1999 ESPP, upon
termination the participant would only be entitled to receive the lesser of the
participant's original contributions to the 1999 ESPP or the value of the shares
purchased with the participant's contributions. Under the 1999 ESPP, however,
the Board would have the discretion to pay the full value of all Common Shares
held for the Participant before the termination instead of allowing a forfeiture
to occur.
The 1999 ESPP provides that a maximum aggregate of 218,366 Common Shares may be
issued.
The Board may, at its discretion, terminate the 1999 ESPP or amend it in any
respect, except that no such termination or amendment shall affect the right of
a participant to receive his or her proportionate interest in Common Shares or
contributions which have vested under the 1999 ESPP.
VOTE REQUIRED TO APPROVE 1999 EMPLOYEE STOCK PURCHASE PLAN
Approval of the 1999 Employee Stock Purchase Plan requires the affirmative vote
of a majority of the votes present in person or by proxy, excluding any votes
cast by insiders of the Corporation to whom Common Shares may be issued pursuant
to the 1999 ESPP and their associates, aggregating 659,918 votes as of the date
hereof.
THE BOARD UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE APPROVAL
OF THE CORPORATION'S 1999 EMPLOYEE STOCK PURCHASE PLAN.
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 10% of the
Corporation's Common Shares to file reports of ownership and changes in
ownership of the Corporation's Common Shares with the Securities and Exchange
Commission and any exchange on which the Corporation's Common Shares are traded.
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 5s were required for such persons, the Corporation believes that, during
the fiscal year ended December 31, 1998, all Section 16(a) filing requirements
applicable to its officers, directors and 10% shareholders were complied with.
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<PAGE> 10
PRINCIPAL SHAREHOLDERS AND SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of December 31, 1998, 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 13 under
the heading "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.
<TABLE>
<CAPTION>
SHARES PERCENTAGE
NAME OF BENEFICIAL OWNER(1)(2)(3)(4) BENEFICIALLY OWNED(5) BENEFICIALLY OWNED
- ------------------------------------ --------------------- ------------------
<S> <C> <C>
The Dundee Bank 2,995,175 34.4%
P.O. Box HM 2706
Hamilton, HM KX
Bermuda
Paul A. Carroll 25,019 (6)(7) *
Morton A. Cohen 318,886 (6)(7)(8) 3.7%
John M. Donovan 30,520 (6)(7) *
R. Peter Gillin 0 *
Peter O. Lawson-Johnston 97,692 (6)(7)(9) 1.1%
Richard L. Lister 810,131 (7)(10)(11)(12)(14) 9.3%
Canada Trust Tower, BCE Place
161 Bay Street, Suite 3750
Toronto, Ontario, Canada M5J 2S1
Garth A.C. MacRae 0 *
William J. vanden Heuvel 43,196 (6)(7) *
Allen J. Palmiere 80,520 (7)(11) *
Peter J. Goodwin 82,137 (11)(14) *
Terrance J. Hogan 87,481 (11)(13)(14) 1.0%
George E. Gillespie 26,649 (11)(14) *
All Directors and Named Officers 1,602,231 (6)(7)(8)(9)(10)(11)(12)(13)(14) 18.4%
as a group (12 persons)
</TABLE>
[FN]
* Denotes less than 1% of Common Shares outstanding
</FN>
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<PAGE> 11
(1) A Schedule 13G, prepared for Merrill Lynch & Co., Inc. (on behalf of
Merrill Lynch Asset Management Group ("AMG")), was filed with the
Securities and Exchange Commission indicating that it could be construed to
be a beneficial owner of 863,610 Common Shares as of December 31, 1998.
However, AMG disclaims any beneficial ownership of the Common Shares
because they were held in proprietary trading accounts.
(2) Zesiger Capital Group LLC ("Zesiger") has filed a Schedule 13G with the
Securities and Exchange Commission indicating that it could be deemed to be
a beneficial owner of 886,400 Common Shares as of December 31, 1998.
However, Zesiger disclaims any beneficial ownership of the Common Shares as
they are held in discretionary accounts which Zesiger manages.
(3) Franklin Resources, Inc. ("Franklin") has filed a Schedule 13G with the
Securities and Exchange Commission indicating that it could be deemed to be
a beneficial owner of 580,755 Common Shares as of December 31, 1998.
However, Franklin disclaims any beneficial ownership of the Common Shares
as they are owned by one or more open or closed-end investment companies or
held in discretionary accounts which Franklin manages.
(4) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 454,469 Common Shares of
Zemex Corporation as of December 31, 1998, all of which Common Shares 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, all of which Dimensional serves as investment manager.
Dimensional disclaims beneficial ownership of all such Common Shares.
(5) Computed in accordance with Rule 13d-3(d)(1) of the Securities Exchange Act
of 1934, as amended.
(6) These directors were each granted options for 15,000 Common Shares at $5.50
per share exercisable in two instalments 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 Common Shares at $9.125 per share exercisable in two
instalments of 2,500 each beginning on February 8, 1996 and February 8,
1997, respectively, and expiring on February 8, 2001. Additionally, on
April 21, 1997, each of these directors was granted options for 10,000
Common Shares at $7.00 per share exercisable in two instalments of 5,000
each beginning on April 21, 1998 and April 21, 1999, respectively. These
options expire April 21, 2003. On May 15, 1998, these directors were each
granted options for an additional 7,500 Common Shares at $10.1825 per share
exercisable in two instalments of 3,750 each beginning on May 15, 1999 and
May 15, 2000, respectively. 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.
(7) 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.
(8) Includes 288,040 Common Shares owned by Clarion Capital Corporation, a
company which Mr. Cohen may be deemed to be the beneficial owner.
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<PAGE> 12
(9) Includes 18,733 Common Shares 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 Common Shares
held by it.
(10) 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, is reviewed annually by the Board and extended
at that time. 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.
(11) 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, 60,000 Common Shares; Mr. Hogan, 47,000 Common Shares; Mr.
Gillespie, 25,000 Common Shares; and all Named Officers and directors as a
group, 537,000 Common Shares.
(12) During 1997, the Corporation agreed to guarantee a personal loan in the
amount of $600,000 drawn down by Mr. Lister. The proceeds of the loan were
used to acquire 85,700 Common Shares on the open market. The Common Shares
acquired are held by the Corporation as security for the loan guarantee.
(13) 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 instalments 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.
(14) Includes Common Shares purchased from January 1, 1995 to December 31, 1998,
plus any applicable stock dividends, in accordance with the terms and
conditions of the Corporation's employee stock purchase plan as follows:
Mr. Lister, 23,762 Common Shares; Mr. Goodwin, 12,483 Common Shares; Mr.
Hogan 8,507 Common Shares; and Mr. Gillespie, 1,622 Common Shares.
10
<PAGE> 13
REPORT OF THE
EXECUTIVE COMPENSATION / PENSION COMMITTEE
The following is the report of the Executive Compensation / Pension Committee of
the Corporation describing the compensation policies and rationale with respect
to compensation paid to executive officers for the year ended December 31, 1998.
The information contained in the report shall not be deemed to be "soliciting
material" or to be "filed" with the Securities and Exchange Commission nor shall
such information be incorporated by reference into any future filing under the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as
amended, except to the extent that the Corporation specifically incorporates it
by reference into such filing.
The Corporation applies a consistent philosophy to compensation for all
employees. This philosophy is based on the premise that the achievements of the
Corporation result from the co-ordinated 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 President and Chief Executive Officer (CEO), is based on the same
five principles applicable to compensation decisions for all employees of the
Corporation:
- 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.
- 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, new
product introductions and execution of long term strategy. 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.
- The Corporation strives for fairness in the administration of pay.
- 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.
- The Corporation believes that employees should understand how the
performance evaluation and pay administration process works.
11
<PAGE> 14
The process of assessing performance is as follows:
- At the beginning of the performance cycle, the evaluating manager sets
objectives and key goals and submits these for review by the head of
that division and the President and CEO of the Corporation.
- The evaluating manager gives the employee ongoing feedback on
performance.
- At the end of the performance cycle, the manager evaluates the
employee's accomplishment of objectives / key goals.
- The manager compares the results to the results of peers within the
operating unit.
- The evaluating manager communicates the comparative results to the
employee.
- The comparative results affects decisions on salary, bonuses and stock
options.
COMPENSATION
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 compensation 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
which is specifically designed to grant greater compensation to those
key employees to recognize their performance in the plan year.
12
<PAGE> 15
1998 PERFORMANCE
At the beginning of fiscal 1998, the Executive Compensation / Pension Committee
reviewed performance objectives for the Corporation. Performance relative to
these objectives was the basis for determining the 1998 bonus of the President
and CEO.
Similarly, 1998 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 1998
was evaluated by the President and CEO and bonuses were awarded based on this
evaluation.
EXECUTIVE COMPENSATION / PENSION COMMITTEE
PAUL A. CARROLL
JOHN M. DONOVAN
PETER O. LAWSON-JOHNSTON
EXECUTIVE COMPENSATION
The following table sets forth the annual and long-term compensation,
attributable to all service in the fiscal years 1998, 1997 and 1996, paid to
those persons who were at the end of the 1998 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
<TABLE>
<CAPTION>
ANNUAL SECURITIES
NAME AND COMPENSATION UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS (1) COMPENSATION (2)
- ------------------ ---- ------ ----- ----------- ----------------
<S> <C> <C> <C> <C> <C>
Richard L. Lister 1998 $256,133 $189,000 80,000 $45,813
President and CEO 1997 $265,380 $150,000 -- $40,595
1996 $267,537 -- -- $39,994
Peter J. Goodwin 1998 $183,333 $90,000 25,000 $35,759
President, Industrial Minerals 1997 $166,666 $83,000 10,000 $23,393
1996 $144,530 -- 25,000(3) $20,230
$17,418
George E. Gillespie 1998 $166,667 $61,000 25,000 $10,703
President, Metal Powders 1997 $119,318 $25,000 25,000
Terrance J. Hogan 1998 $162,000 $22,700 25,000 $20,845
President, Alumitech, Inc. 1997 $146,667 $45,000 15,000 $9,218
1996 $136,667 -- -- $14,816
Allen J. Palmiere 1998 $153,929 $49,356 25,000 $17,427
Vice President, Chief Financial 1997 $150,619 $68,607 -- $17,972
Officer and Assistant Secretary 1996 $139,368 -- -- $15,788
</TABLE>
13
<PAGE> 16
(1) On February 18, 1997, Mr. Goodwin and Mr. Hogan were granted options for
10,000 and 15,000 Common Shares, respectively, at an exercise price of
$7.25. On April 21, 1997, Mr. Gillespie was granted options for 25,000
Common Shares at an exercise price of $7.00. On February 19, 1998, Mr.
Gillespie was granted options for 25,000 Common Shares at an exercise price
of $7.875. On May 15, 1998, Mr. Lister, Mr. Goodwin, Mr. Palmiere, Mr.
Hogan and Mr. Gillespie were granted options for 80,000, 25,000, 25,000,
25,000 and 25,000 Common Shares, respectively at an exercise price of
$10.1825.
(2) Constitutes premiums for term life insurance exceeding amounts eligible to
most employees, automobile benefits, memberships/dues, 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. In connection with the plan, amounts shown for Mr.
Lister include $25,200 in each of 1998, 1997, and 1996 with respect to
benefits derived from participation in the plan. Amounts shown for Mr.
Goodwin include plan benefits of $18,120, $16,248, and $14,200 in 1998,
1997 and 1996, respectively. Amounts shown for Mr. Hogan include plan
benefits of $13,250 for 1998 and 13,000 for each of 1997 and 1996,
respectively. Amounts shown for Mr. Gillespie include plan benefits of
$4,200 and $3,150 in 1998 and 1997. Amounts shown for Mr. Lister do not
include imputed interest of $83,152, $65,596, and $100,453 in 1998, 1997,
and 1996, 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 10 Principal Shareholders and Security Ownership of Management.)
(3) On July 14, 1994, Mr. Goodwin was granted options for 25,000 Common Shares
at $11.50 per share. On July 18, 1996, these options were repriced to
$9.125.
OPTION EXERCISE AND YEAR-END VALUES TABLE
With respect to the Named Officers, the following table sets forth the number of
options exercised and the value realized upon exercise and the value of
outstanding options at December 31, 1998, using $6.25, the closing price of the
Common Shares on the New York Stock Exchange on December 31, 1998.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF IN-THE-MONEY
SHARES OPTIONS AT YEAR-END OPTIONS AT YEAR-END
ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAMED OFFICER ON EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE
- ------------- ----------- -------- ------------- -------------
<S> <C> <C> <C> <C>
Richard L. Lister -- -- 220,000 / 80,000 $90,000 / $0
Allen J. Palmiere -- -- 75,000 / 25,000 $0 / $0
Peter J. Goodwin -- -- 55,000 / 30,000 $0 / $0
Terrance J. Hogan -- -- 39,500 / 32,500 $0 / $0
George E. Gillespie -- -- 12,500 / 62,500 $0 / $0
</TABLE>
14
<PAGE> 17
INDEBTEDNESS OF DIRECTORS, EXECUTIVE OFFICERS AND SENIOR OFFICERS
The following chart summarizes any indebtedness to the Corporation as at
December 31, 1998 of the Corporation's directors and Named Officers entered into
in connection with a purchase of Common Shares of the Corporation, excluding
routine indebtedness.
INDEBTEDNESS OF DIRECTORS, EXECUTIVE OFFICERS AND SENIOR OFFICERS
UNDER SECURITIES PURCHASE PROGRAMS
<TABLE>
<CAPTION>
FINANCIAL
ASSISTED NUMBER OF COMMON
LARGEST AMOUNT AMOUNT SECURITIES SHARES HELD AS
NAME AND PRINCIPAL INVOLVEMENT OF OUTSTANDING OUTSTANDING AS PURCHASED SECURITY FOR
POSITION THE CORPORATION DURING 1998 AT MARCH 1, 1999 DURING 1998 INDEBTEDNESS
- -------- --------------- ----------- ---------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Richard L. Lister Lender $1,749,300 $1,749,300 -- 257,000
President & CEO
Richard L. Lister Guarantor $600,000 $600,000 -- 85,700
President & CEO
Paul A. Carroll Lender $15,000 $15,000 -- 2,500
Director
John M. Donovan Lender $15,000 $15,000 -- 2,500
Director
Morton A. Cohen Lender $15,000 $15,000 -- 2,500
Director
Allen J. Palmiere Lender $35,000 $35,000 -- 5,000
Vice President & CFO
</TABLE>
The following chart summarizes any indebtedness to the Corporation as at
December 31, 1998 of the Corporation's directors and Named Officers not entered
into in connection with a purchase of Common Shares of the Corporation,
excluding routine indebtedness.
INDEBTEDNESS OF DIRECTORS, EXECUTIVE OFFICERS AND SENIOR OFFICERS
UNDER OTHER THAN UNDER SECURITIES PURCHASE PROGRAMS
<TABLE>
<CAPTION>
NAME AND INVOLVEMENT OF THE LARGEST AMOUNT OUTSTANDING AMOUNT OUTSTANDING AS AT
PRINCIPAL POSITION CORPORATION DURING THE YEAR MARCH 1, 1999
- ------------------ ----------- --------------- -------------
<S> <C> <C> <C>
Richard L. Lister Lender $200,000 $0
President & CEO
Paul A. Carroll Lender $124,000 $115,000
Director
</TABLE>
15
<PAGE> 18
COMPENSATION OF DIRECTORS
Each director who is not a salaried employee of the Corporation is paid $10,000
per annum on a semi-annual basis for his services as a director. Directors are
also entitled to a fee of $600 for each board and committee meeting attended,
and reimbursement of their travel related expenses. In the year ended December
31, 1998, the following options were granted to the directors of the Corporation
pursuant to the Corporation's 1995 Stock Option Plan:
<TABLE>
<CAPTION>
MARKET VALUE OF
UNDERLYING
COMMON OPTIONS
SHARES UNDER COMMON SHARES
DATE OPTIONS EXERCISE ON DATE
NAME OF GRANT GRANTED PRICE OF GRANT EXPIRATION DATE
- ---- -------- ------- ----- -------- ---------------
<S> <C> <C> <C> <C> <C>
Paul A. Carroll May 15, 1998 7,500 $10.1875 $10.1875 May 15, 2004
Morton A. Cohen May 15, 1998 7,500 $10.1875 $10.1875 May 15, 2004
John M. Donovan May 15, 1998 7,500 $10.1875 $10.1875 May 15, 2004
Peter Lawson-Johnston May 15, 1998 7,500 $10.1875 $10.1875 May 15, 2004
Richard L. Lister May 15, 1998 80,000 $10.1875 $10.1875 May 15, 2004
Garth A.C. MacRae October 1, 1998 15,000 $6.50 $6.50 October 1, 2004
William J. vanden Heuvel May 15, 1998 7,500 $10.1875 $10.1875 May 15, 2004
</TABLE>
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% per year. There is a Social Security offset. As of
January 1, 1999, the number of credited years of service and the compensation
covered by the pension plan for the Named Officers are: Richard L. Lister, 7.5
and $256,133; Peter J. Goodwin, 4.5 and $183,333; and George E. Gillespie 1.8
and $166,667.
<TABLE>
<CAPTION>
AVERAGE FINAL COMPENSATION CREDITED SERVICE AS OF NORMAL RETIREMENT DATE
AS OF NORMAL RETIREMENT DATE 15 20 25 30 35
- ---------------------------- -- -- -- -- --
<S> <C> <C> <C> <C> <C>
$ 50,000 $8,285 $11,047 $13,809 $16,571 $19,333
$ 75,000 $13,910 $18,547 $23,184 $27,821 $32,458
$100,000 $19,535 $26,047 $32,559 $39,071 $45,583
$125,000 $25,160 $33,547 $41,934 $50,321 $58,708
$150,000 $30,785 $41,047 $51,309 $61,571 $71,833
$175,000 $32,135 $42,847 $53,559 $64,271 $74,983
$200,000 $32,135 $42,847 $53,559 $64,271 $74,983
$225,000 $32,135 $42,847 $53,559 $64,271 $74,983
</TABLE>
Note: All benefits shown were estimated using the 1999 Social Security Law and
assume the employee terminates employment during 1999 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.
16
<PAGE> 19
CORPORATE GOVERNANCE
The Toronto Stock Exchange has adopted guidelines for effective corporate
governance (the "TSE Guidelines"), addressing matters such as the constitution
of, and functions to be performed by, the Board and its committees. The Toronto
Stock Exchange requires that each listed corporation incorporated in Canada or a
province of Canada disclose its approach to corporate governance with reference
to these guidelines on an annual basis.
BOARD MANDATE
The Corporation's Board is ultimately responsible for supervising the management
of the business and affairs of the Corporation and to act in the best interests
of the Corporation. The Board discharges its responsibility directly and through
its committees which consist of an Audit Committee, a Corporate Governance
Committee, an Executive Committee, an Executive Compensation / Pension
Committee, and, until recently, a Nominating Committee. As described more fully
below, the responsibilities of the Nominating Committee was recently assumed by
the newly formed Corporate Governance Committee. Specific responsibilities of
the Board include reviewing and approving the Corporation's strategic and
operating plans, corporate objectives and goals applicable to the senior
management of the Corporation and significant operational and financial matters
and providing direction on these matters.
Mr. Lister is a director and the President and Chief Executive Officer of the
Corporation. In the view of the Board, the fact that Mr. Lister is a member of
the Board as well as senior management does not impair the ability of the Board
to act independently of management. The Corporation believes that the investment
of all shareholders in the Corporation is fairly reflected in the composition of
the Board since seven of the eight directors are unrelated to the Corporation.
BOARD MEETINGS AND COMMITTEES
The Board met eleven times during 1998. No director attended fewer than 75% of
the meetings of the Board and its committees held during the period in 1998.
Currently the Board consists of eight persons, of which seven are unrelated:
Messrs. Carroll, Cohen, Donovan, Gillin, Lawson-Johnston, MacRae and vanden
Heuvel. Under the TSE Guidelines, an unrelated director is a director who is
independent of management and is free from any interest in any business or other
relationship which could, or could reasonably be perceived to, materially
interfere with the directors' ability to act with a view to the best interests
of the Corporation, other than interests and relationships arising from
shareholding.
The Corporation maintains standing Audit, Corporate Governance, Executive, and
Executive Compensation / Pension Committees.
Audit Committee
The Audit Committee met formally three times during 1998. During 1998, the
members of the Audit Committee were Patrick H. O'Neill (Chairman), John M.
Donovan and Thomas B. Evans, Jr., who resigned from the board in February 1999.
In January 1999, Mr. O'Neill retired from the Board and as Chairman of the Audit
Committee, but he remains actively involved with the Corporation as a director
emeritus. In January 1999, Mr. Donovan assumed the role of Chairman and Garth
A.C. MacRae joined the Audit Committee. 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 LLP as the
Corporation's independent auditors. During 1998, the Audit Committee met with
the Corporation's management and with representatives of Deloitte & Touche LLP
without the Corporation's management being present.
17
<PAGE> 20
Corporate Governance Committee
At the beginning of 1999, the Board established a Corporate Governance Committee
with the mandate of further reviewing the Corporation's corporate governance
practices and to determine what, if any, changes are necessary. The Corporate
Governance Committee will conduct its review and report to the Board with its
recommendations during fiscal 1999. Additionally, commencing in 1999, the
Corporate Governance Committee will assume the responsibilities of the
Nominating Committee. The Corporate Governance Committee is comprised of R.
Peter Gillin (Chairman), Paul A. Carroll, and William J. vanden Heuvel.
Executive Committee
The Executive Committee, whose members include Peter O. Lawson-Johnston, John M.
Donovan, Garth A.C. MacRae, William J. vanden Heuvel and Richard L. Lister
(Chairman), met four times during 1998. The purpose of the Executive Committee
is to act on behalf of the Board and to authorize and approve major capital
expenditures, which are subsequently ratified by the full Board.
Executive Compensation / Pension Committee
The Executive Compensation / Pension Committee, whose members include Paul A.
Carroll (Chairman), Peter O. Lawson-Johnston and John M. Donovan, met three
times during 1998. This Committee sets policies and guidelines with respect to
compensation and pensions.
Nominating Committee
The Nominating Committee met one time in 1998 to advise the Board on prospective
nominees for election to the Board. Its members included Peter O.
Lawson-Johnston (Chairman), Thomas B. Evans, Jr. and Richard L. Lister. As
mentioned above, the Corporate Governance Committee will assume the
responsibilities of the Nominating Committee commencing in 1999.
BOARD PERFORMANCE
Although the Board did not formally assess the effectiveness of the Board of
Directors in 1998, the Board continually assesses the performance of management
and the Corporation. In that regard, the Board believes that management and the
Corporation performed well in fiscal 1998.
SHAREHOLDER FEEDBACK
All shareholder or investment community inquiries are directed to the Corporate
Secretary and Assistant Treasurer. Shareholder inquiries are responded to
promptly by the appropriate individual within the Corporation. In order to be
considered for inclusion in the Corporation's proxy statement for the 2000
Annual Meeting of Shareholders, proposals from shareholders must be received by
the Corporation on or before December 1, 1999. Such proposals should be
addressed to the Corporate Secretary and Assistant Treasurer, Zemex Corporation,
Canada Trust Tower, BCE Place, 161 Bay Street, Suite 3750, Toronto, Ontario, M5J
2S1.
EXPECTATIONS OF MANAGEMENT
The Board believes it is critical that management of the Corporation provides
complete and accurate information with respect to the business and affairs of
the Corporation and an analysis of the industries in which the Corporation
operates. To date the Board believes management has provided detailed quarterly
information, which has allowed the Board to be effective in supervising the
business and affairs of the Corporation.
18
<PAGE> 21
BOARD APPROVAL
The Board has no formal policy setting out what specific matters must be brought
by management to the Board for approval; however, there is a clear understanding
between management and the Board through historical Board practice and accepted
legal practice that all transactions or matters of a material nature must be
presented by management for approval by the Board. It has been the experience to
date of the Board that they have been kept well informed as to the business and
affairs of the Corporation and that the matters which have been brought forward
to the Board for approval have been appropriate.
PERFORMANCE GRAPH
The 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, 1993 and that all dividends were reinvested. As a
diversified producer of industrial minerals and specialty products, many of the
companies with which the Corporation competes are private and peer group
comparative data is not available.
[ZEMEX FIVE-YEAR CUMULATIVE RETURN CHART]
<TABLE>
<CAPTION>
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Zemex Total Cumulative Return 100 130 154 111 140 105
Dow Jones Industrial Average 100 105 144 185 231 273
Dow Jones Basic Materials Average 100 106 128 149 168 159
</TABLE>
19
<PAGE> 22
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.
BOARD APPROVAL
The Board has approved the contents and the sending of this proxy statement to
the Corporation's shareholders.
By Order of the Board of Directors,
/s/ Patricia K. Moran
Patricia K. Moran
March 25, 1999 Corporate Secretary and Assistant Treasurer
20
<PAGE> 23
EXHIBIT "A"
ZEMEX CORPORATION
1999 STOCK OPTION PLAN
1. PURPOSES. The purposes of this 1999 Stock Option Plan, as amended from
time to time (this "Plan"), are to encourage selected key employees, directors
and consultants of the Corporation and its Affiliates to acquire a proprietary
and vested interest in the growth and performance of the Corporation, to
generate an increased incentive to contribute to the Corporation's future
success and prosperity, thus enhancing the value of the Corporation for the
benefit of share owners, and to enhance the ability of the Corporation and its
Affiliates to attract and retain individuals of exceptional managerial talent
upon whom, in large measure, the sustained progress, growth and profitability of
the Corporation depends.
2. DEFINITIONS. As used in this Plan, the following terms shall have the
meanings set forth below:
"AFFILIATE" shall mean (i) any entity that, directly or indirectly, is
controlled by the Corporation, and (ii) any entity in which the Corporation
has a significant equity interest, in either case as determined by the
Committee.
"AWARD" shall mean any Option.
"AWARD AGREEMENT" shall mean any written agreement, contract, or other
instrument or document evidencing any Award and covering the specific terms
and conditions of such Award.
"BOARD" shall mean the Board of Directors of the Corporation.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
"COMMITTEE" shall mean a committee consisting entirely of two or more
Non-Employee Directors, who are empowered hereunder to take all action
required in the administration of the Plan and the grant and administration
of Awards hereunder.
"COMMON SHARES" shall mean the common shares of the Corporation as
constituted on the date hereof, or, following an adjustment under Section
4(3) of this Plan, such other securities or property as may become subject
to Awards in substitution for such common shares pursuant to such
adjustment.
"CORPORATION" shall mean Zemex Corporation.
"CONSULTANT" shall mean any person who is engaged by the Corporation or any
Affiliate to render consulting or advisory services as an independent
contractor and is compensated for such services.
"DISABILITY" shall mean a Participant's permanent disability within the
meaning of Section 22(e)(3) of the Code.
21
<PAGE> 24
"EMPLOYEE" shall mean any employee of the Corporation or of any Affiliate.
"FAIR MARKET VALUE" shall mean, with respect to Common Shares, the closing
price of a Common Share quoted on The Toronto Stock Exchange or the New
York Stock Exchange, or if the Common Shares are not listed on The Toronto
Stock Exchange, on the principal Canadian securities exchange on which such
stock is listed, or if the Common Shares are not listed on any such stock
exchange, on the principal securities exchange on which such stock is
listed, or if the Common Shares are not listed on any exchange, the last
sale price, or if none is reported, the highest closing bid quotation on
the National Association of Securities Dealers, Inc., Automated Quotations
System or any successor system then in use on the date of grant, or if none
are available on such day, on the next preceding day for which are
available, or if no such quotations are available, the fair market value on
the date of grant of a Common Share as determined in good faith by the
Committee. In the event the Common Shares are not publicly traded at the
time a determination of its fair market value is required to be made
hereunder, the determination of fair market value shall be made in good
faith by the Committee.
"INCENTIVE STOCK OPTION" shall mean an option granted under Section 6(1) of
this Plan that is intended to meet the requirements of Section 422 of the
Code or any successor provision thereto.
"NON-EMPLOYEE DIRECTOR" shall mean a director of the Corporation who meets
the definition of (i) a "non-employee director" set forth in Rule 16b-3
under the Securities Exchange Act of 1934, as amended, or any successor
rule, and (ii) an "outside director" set forth in Treasury Regulation
1.162-27, as amended, or any successor rule.
"NON-QUALIFIED STOCK OPTION" shall mean an option granted under Section
6(1) of this Plan that is not intended to be an Incentive Stock Option.
"OPTION" shall mean an Incentive Stock Option or a Non-Qualified Stock
Option.
"PARTICIPANT" shall mean any Employee, Non-Employee Director or Consultant
selected by the Committee to receive an Award under this Plan.
"PLAN" shall mean the Corporation's 1999 Stock Option Plan as set forth
herein.
"RETIREMENT" shall mean a Participant's termination of employment with, or
the termination of the provision of services for, the Corporation or any
Affiliate at or after age 65 (or such earlier age as the Committee shall
determine) or in any other manner determined by the Committee to constitute
retirement.
"SEC" shall mean the Securities and Exchange Commission, or any successor
thereto and shall include the staff thereof.
"SERVICE PROVIDER" means an Employee or Non-Employee Director of, or
Consultant to, the Corporation.
22
<PAGE> 25
3. ADMINISTRATION.
(1) AUTHORITY OF COMMITTEE. This Plan shall be administered by the Committee.
Subject to the terms of this Plan and applicable law, and in addition to
other express powers and authorizations conferred on the Committee by this
Plan, the Committee shall have full power and authority to:
(i) designate Participants;
(ii) determine the type or types of Awards to be granted to eligible
Participants;
(iii) determine the number of Common Shares to be covered by, or with
respect to which payments, rights, or other matters are to be
calculated in connection with, Awards;
(iv) determine the terms and conditions of any Award;
(v) determine whether, to what extent, and under what circumstances
Awards may be settled or exercised in cash, Common Shares, other
securities, other Awards or other property, or cancelled, forfeited,
or suspended and the method or methods by which Awards may be
settled, exercised, cancelled, forfeited, or suspended;
(vi) determine whether, to what extent, and under what circumstances cash,
Common Shares, other securities, other Awards, other property, and
other amounts payable with respect to an Award shall be deferred
either automatically or at the election of the holder thereof or of
the Committee;
(vii) interpret and administer this Plan and any instrument or agreement
relating to this Plan or any Award hereunder;
(viii)correct errors, omissions or inconsistencies in this Plan or in any
Award Agreement, or any other instrument relating to an Award under
this Plan, and (subject to the provisions of section 9) to amend the
terms and conditions of any outstanding Award to the extent such
terms and conditions are within the discretion of the Committee as
provided in this Plan;
(ix) establish, amend, suspend, or waive such rules and regulations and
appoint such agents as it shall deem appropriate for the proper
administration of this Plan; and
(x) make any other determination and take any other action that the
Committee deems necessary or desirable for the administration of this
Plan. To the extent necessary or appropriate, the Committee may adopt
sub-plans consistent with this Plan to conform to applicable state or
foreign securities or tax laws. A majority of the members of the
Committee may determine its actions and fix the time and place of its
meetings.
(2) DETERMINATIONS UNDER THIS PLAN. Unless otherwise expressly provided in this
Plan, all designations, determinations, interpretations, and other
decisions under or with respect to this Plan or any Award shall be within
the sole discretion of the Committee, may be made at any time and shall be
final, conclusive, and binding upon all persons, including the Corporation,
any Affiliate, any Participant, any holder or beneficiary of any Award, and
any shareholder of the Corporation.
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(3) LIABILITY OF COMMITTEE. No member of the Committee shall be liable, in the
absence of bad faith, for any act or omission with respect to his or her
services on the Committee. Service on the Committee shall constitute
service as a director of the Corporation (solely for purposes of the
provisions of this Section 3(3)) so that members of the Committee shall be
entitled to indemnification, any limitation of liability and reimbursement
as directors with respect to their services as members of the Committee.
(4) DELEGATION OF CERTAIN RESPONSIBILITIES. The Committee may, in its sole
discretion, delegate to appropriate officers of the Corporation the
administration of this Plan; provided, however, that no such delegation by
the Committee shall be made:
(i) if such delegation would not be permitted under applicable law; or
(ii) with respect to the administration of this Plan as it affects
executive officers or directors of the Corporation, and provided
further that the Committee may not delegate its authority to correct
errors, omissions or inconsistencies in this Plan
Subject to the above limitations, the Committee may delegate to the
President or Chief Executive Officer of the Corporation its authority under
this Section 3 to grant Awards to Employees who are not executive officers
or directors of the Corporation. All authority delegated by the Committee
under this Section 3(4) shall be exercised in accordance with the
provisions of this Plan and any guidelines for, conditions on, or
limitations to the exercise of such authority that may from time to time be
established by the Committee.
(5) AWARD AGREEMENTS. Each Award under this Plan shall be evidenced by an Award
Agreement which shall be signed by an officer of the Corporation and by the
Participant, and shall contain such terms and conditions as may be approved
by the Committee, which need not be the same in all cases. Any Award
Agreement may be supplemented or amended in writing from time to time as
approved by the Committee, provided that the terms of such agreements as
amended or supplemented, as well as the terms of the original Award
Agreement, are not inconsistent with the provisions of this Plan. Nothing
contained in this Plan or any resolutions adopted or to be adopted by the
Board or by the shareholders of the Corporation shall constitute the
granting of an Award under this Plan. A Service Provider who receives an
Award under this Plan shall not, with respect to such Award, be deemed to
have become a Participant, or to have any rights with respect to such
Award, unless and until such Service Provider has executed an Award
Agreement or other instrument evidencing the Award and shall have delivered
an executed copy thereof to the Corporation, and has otherwise complied
with the applicable terms and conditions of the Award.
(6) AWARDS TO OFFICERS AND DIRECTORS. Awards to officers shall be granted by
the Committee. If the Committee is not composed as prescribed in the
definition of Committee above, the Board may take such action with respect
to any Award to an officer as it deems necessary or advisable to comply
with Rule 16b-3 of the Securities Exchange Act of 1934 and any related
rules.
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4. COMMON SHARES AVAILABLE FOR AWARDS.
(1) COMMON SHARES AVAILABLE. Subject to adjustment as provided in Section 4(3),
the number of Common Shares with respect to which Awards may be granted
under this Plan shall be 272,543.
(2) TERMINATIONS AND CANCELLATIONS. If, after the effective date of this Plan,
an Award otherwise terminates or is cancelled without the delivery of
Common Shares or of other consideration, then the Common Shares covered by
such Award, or to which such Award relates, or the number of Common Shares
otherwise counted against the aggregate number of Common Shares with
respect to which Awards may be granted, to the extent of any such
termination or cancellation, shall again be Common Shares with respect to
which Awards may be granted.
(3) ADJUSTMENTS. In the event that the Committee determines that any dividend
or other distribution (whether in the form of cash, Common Shares, other
securities, or other property), recapitalization, stock split, reverse
stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, or exchange of Common Shares or other securities
of the Corporation, issuance of warrants or other rights to purchase Common
Shares or other securities of the Corporation, or other similar corporate
transaction or event affects the Common Shares such that an adjustment is
determined by the Committee to be appropriate in order to prevent dilution
or enlargement of the benefits or potential benefits intended to be made
available under this Plan, then the Committee shall, in such manner as it
may deem equitable, adjust any or all of:
(i) the number of Common Shares or the kind of equity securities of the
Corporation (or the number and kind of other securities or property)
with respect to which Awards may be granted;
(ii) the number of Common Shares or the kind of equity securities of the
Corporation (or the number and kind of other securities or property)
subject to outstanding Awards; and
(iii)the grant or exercise price with respect to any Award or, if deemed
appropriate, make provision for a cash payment to the holder of an
outstanding Award; provided, however, that any adjustment of an
Incentive Stock Option shall be made in such a manner so as not to
constitute a "modification" within the meaning of Section 424(h)(3) of
the Code; and provided further, that the number of Common Shares
subject to any Award denominated in Common Shares shall always be a
whole number.
(4) SOURCES OF COMMON SHARES DELIVERABLE UNDER AWARDS. Any Common Shares
delivered pursuant to an Award may consist, in whole or in part, of
authorized and unissued Common Shares.
(5) SINGLE PARTICIPANT LIMITATION. The aggregate number of Common Shares
reserved for issuance to any one Participant upon the exercise of Options
shall not exceed 5% of the total number of Common Shares outstanding from
time to time, provided that any reduction in the number of outstanding
Common Shares shall not affect any Option granted hereunder prior to the
reduction.
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5. ELIGIBILITY. Employees, Non-Employee Directors and Consultants of the
Corporation or any Affiliate shall be eligible to be designated as Participants.
6. STOCK OPTIONS.
(1) GRANT. Subject to the provisions of this Plan, the Committee shall have the
authority to determine the Employees, Consultants and Non-Employee
Directors to whom Options shall be granted, the number of Common Shares to
be covered by each Option, the option price therefor and the conditions and
limitations applicable to the exercise of the Option; provided, however,
that the terms and conditions of any Incentive Stock Option granted
hereunder shall be subject to, and shall comply in all respects with, the
requirements of Section 422 of the Code, as amended from time to time. The
Committee shall have the authority to grant Incentive Stock Options, or to
grant Non-Qualified Stock Options, or to grant both types of options;
provided, however, that Incentive Stock Options shall not be granted to
Consultants, Non-Employee Directors, or any other persons who are not
permitted to receive Incentive Stock Options under the Code.
(2) NUMBER OF COMMON SHARES. Each Award Agreement covering Options shall state
that it covers a specified number of Common Shares, as determined by the
Committee.
(3) PRICE. The price at which each Common Share covered by an Option may be
purchased shall be determined in each case by the Committee and set forth
in the Award Agreement related to such Option, but in no event shall the
option price for each Common Share covered by an Incentive Stock Option be
less than the Fair Market Value of a Common Share on the date the Option is
granted; provided, however, that the Option Price for each Common Share
covered by an Incentive Stock Option granted to an Employee who then owns
stock possessing more than 10% of the total combined voting power of all
classes of stock of the Corporation or any Affiliate must be at least 110%
of the Fair Market Value of the Common Shares subject to the Incentive
Stock Option on the date the Option is granted.
(4) DURATION OF OPTIONS. Each Award Agreement covering Options shall state the
period of time, determined by the Committee, within which the Option may be
exercised by the Participant (the "Option Period"). The Option Period must
expire, in all cases, not more than ten years from the date an Option is
granted; provided, however, that the Option Period of an Incentive Stock
Option granted to an Employee who then owns stock possessing more than 10%
of the total combined voting power of all classes of stock of the
Corporation or any Affiliate must expire not more than five years from the
date such an Option is granted. Each Award Agreement shall also state the
periods of time, if any, as determined by the Committee, when incremental
portions of each Option shall vest. If any Option is not exercised during
its Option Period, it shall be deemed to have been forfeited and or no
further force or effect.
(5) CASH ELECTION. A Participant may, rather than exercise Options which he or
she is entitled to exercise under Section 6(4), irrevocably elect to
require the Corporation to purchase for cancellation any such Options, in
whole or in part. Upon such election and, in lieu of receiving the Common
Shares to which the purchased Options relate (the "Designated Common
Shares"), the Corporation, in its sole discretion, shall deliver to the
Participant either:
(i) a cash payment of an amount equal to the product of the number of
Designated Common Shares multiplied by the difference between the Fair
Market Value and the exercise price
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<PAGE> 29
per share of the Designated Common Shares, less any amount withheld on
account of income taxes, which withheld income taxes will be remitted
by the Corporation; or
(ii) that number of Common Shares, disregarding fractions, which have an
aggregate Fair Market Value equal to the product of the number of
Designated Common Shares multiplied by the difference between the Fair
Market Value and the exercise price per share of the Designated Common
Shares, less any amount withheld on account of income taxes, which
withheld income taxes will be remitted by the Corporation. For the
purposes of this section, the Fair Market Value per share shall be the
weighted average trading price of the Common Shares during the five
days immediately preceding the date of the Participant's election
herein.
(6) TERMINATION OF SERVICE, DEATH, DISABILITY, ETC. Except as otherwise
determined by the Committee, each Award Agreement covering Options shall
provide as follows with respect to the exercise of the Options:
(i) If the Participant is terminated as a Service Provider within the
Option Period "for cause", the Option shall thereafter be void for all
purposes. As used in this Section 6(6)(i), "cause" shall mean:
(a) the intentional disregard of, or a gross violation of, the
Corporation's established policies and procedures, as determined
by the Corporation or the Committee; and
(b) if applicable, as set forth in any employment or similar
agreement between the Participant and the Corporation.
The effect of this Section 6(6)(i) shall be limited to determining the
consequences of a termination, and nothing in this Section 6(6)(i)
shall restrict or otherwise interfere with the Corporation's
discretion with respect to the termination of any Service Provider;
(ii) If the Participant ceases to be a Service Provider due to the
Participant's Retirement, the Option may be exercised by the
Participant, within three months following his or her Retirement if
the Option is an Incentive Stock Option or within twelve months
following his or her Retirement if the Option is a Non-Qualified Stock
Option (provided in each case that such exercise must occur within the
Option Period), but not thereafter. In any such case, the Option may
be exercised only as to the Common Shares as to which the Option had
become exercisable on or before the date the Participant ceases to be
a Service Provider;
(iii)If the Participant dies while he or she is a Service Provider or
within the three-month period following the Participant's Retirement,
the Option may be exercised by those entitled to do so under the
Participant's will or by the laws of descent and distribution within
twelve months following the Participant's death (provided that such
exercise must occur within the Option Period), but not thereafter. In
any such case, the Option may be exercised only as to the Common
Shares as to which the Option had become exercisable on or before the
date of the Participant's death or at such time as the Participant
ceased to be a Service Provider, whichever is earlier;
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(iv) If the Participant suffers a Disability while a Service Provider,
Options held by the Participant may be exercised by the Participant
within twelve months following the date the Participant ceases to be a
Service Provider (provided that such exercise must occur within the
Option Period), but not thereafter. In any such case, the Option may
be exercised only as to the Common Shares as to which the Option had
become exercisable on or before the date the Participant ceased to be
a Service Provider;
(v) If the Participant ceases to be a Service Provider within the Option
Period for any reason other than cause, Retirement, Disability or the
Participant's death, the Option may be exercised by the Participant
within three months following the date of such cessation (provided
that such exercise must occur within the Option Period), but not
thereafter. In any such case, the Option may be exercised only as to
the Common Shares as to which the Option had become exercisable on or
before the date that the Participant ceases to be a Service Provider;
(iv) Notwithstanding the provisions of this Section 6(6) or any other
provision of the plan, with respect to any Options granted to an
Employee in connection with the commencement of employment as an
Employee, the Committee may provide for terms as to retirement,
disability, death or other termination of employment which are
different from the terms provided in this Section 6(6) if such
different terms are set forth in a written employment agreement with
the Employee, which agreement shall have been approved by the Board,
or are otherwise provided by the Committee, subject to the approval by
the Board. Notwithstanding the foregoing, no Incentive Stock Options
may be granted pursuant to this Section 6(6)(vi);
(vii)Whether an authorized leave of absence or absence due to active
military service shall constitute termination as a Service Provider
shall be determined by the Committee at the time thereof.
Notwithstanding the foregoing, in the case of Incentive Stock Options,
if the period of leave exceeds ninety days, unless the individual's
right to re-employment is guaranteed by statute or contract, the
employment relationship will be deemed to have terminated on the
ninety-first day of such leave; and
(viii)If a Participant's status as a particular type of Service Provider
changes to another type of Service Provider, the Committee, in its
discretion, may determine that any Option previously granted shall
continue in full force and effect so long as the Option is a
Non-Qualified Stock Option. The Committee shall be permitted, in its
discretion, to grant Non-Qualified Stock Options which provide that
they shall continue in full force and effect if the Participant's
status with the Corporation or any Affiliate changes, but such person
continues as a Service Provider.
(7) LIMITATION ON AMOUNT OF INCENTIVE STOCK OPTIONS. The aggregate fair market
value (determined as of the time the Option is granted) of Common Shares
with respect to which Incentive Stock Options are exercisable for the first
time by a Participant during any calendar year under this Plan (and all
other incentive stock option plans of the Corporation, any subsidiary or
parent corporation of the Corporation) shall not exceed US$100,000. In no
event, however, shall an acceleration of exercisability pursuant to the
terms of this Plan operate to reduce or limit the number of shares which
may be exercised pursuant to such Incentive Stock Options. Common Shares in
excess of the US$100,000 limit described herein which become exercisable as
a result of acceleration shall be treated as Common Shares subject to a
Non-Qualified Stock Option.
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7. TERMS AND CONDITIONS.
(1) AWARDS MAY BE GRANTED SEPARATELY OR TOGETHER. Awards may, in the discretion
of the Committee, be granted either alone or in addition to, or in
substitution for, any other Award granted under this Plan. Except as
otherwise provided herein, Awards granted in addition to other Awards may
be granted either at the same time as, or at a different time from, the
grant of such other Awards.
(2) FORMS OF PAYMENT BY THE CORPORATION UNDER AWARDS. Subject to the terms of
this Plan and of any applicable Award Agreement, payments or transfers to
be made by the Corporation or an Affiliate upon the grant, exercise or
payment of an Award may be made in such form or forms as the Committee
shall determine, including, without limitation, cash, other securities,
other Awards or other property, or any combination thereof, and may be made
in a single payment or transfer, in instalments, or on a deferred basis, in
each case in accordance with rules and procedures established by the
Committee.
(3) LIMITS ON TRANSFER OF AWARDS. An Award shall not be transferable other than
by will or the laws of descent and distribution, and an Option subject to
exercise may be exercised, during the lifetime of the Participant, only by
the Participant or in the event of death, the Participant's beneficiary as
hereinafter provided, or in the event of Disability, the Participant's
personal representative.
(4) TERM OF AWARDS. Unless otherwise provided herein, the term of each Award
shall be for such period as may be determined by the Committee.
(5) COMMON SHARE CERTIFICATES. All certificates for Common Shares or other
securities of the Corporation or any Affiliate delivered under this Plan
pursuant to any Award, or the exercise thereof, shall be subject to such
stop transfer orders and other restrictions as the Committee may deem
advisable under this Plan or the rules, regulations, and other requirements
of the SEC, any stock exchange upon which such Common Shares or other
securities are then listed, and any applicable federal or state laws, and
the Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.
(6) CONSIDERATION FOR GRANTS. Awards may be granted for no cash consideration
or for such minimal cash consideration as may be required by applicable
law.
(7) DELIVERY OF COMMON SHARES OR OTHER SECURITIES AND PAYMENT BY PARTICIPANT OF
CONSIDERATION. No Common Shares or other securities shall be delivered
pursuant to any Award until payment in full of any amount required to be
paid pursuant to this Plan or the applicable Award Agreement is, or is
arranged to be (on terms acceptable to the Committee), received by the
Corporation. Such payment may be made by such method or methods and in such
form or forms as the Committee shall determine, including, without
limitation, cash, Common Shares, other securities, other Awards or other
property, or any combination thereof; provided that the combined value, as
determined by the Committee, of all cash and cash equivalents and the Fair
Market Value of any such Common Shares or other property so tendered, or
arranged to be tendered, to the Corporation, as of the date of such tender,
is at least equal to the full amount required to be paid pursuant to this
Plan or the applicable Award Agreement to the Corporation.
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(8) CANCELLATION OR SUSPENSION OF AWARDS. The Committee shall have full power
and authority to determine whether, to what extent and under what
circumstances any Award shall be cancelled or suspended. In particular, but
without limitation, all outstanding Awards to any Participant shall be
cancelled if the Participant, without the consent of the Committee, while
employed by or providing services for the Corporation or after termination
of such employment or services, becomes associated with, employed by,
renders services to, or owns any interest in (other than any nonsubstantial
interest, as determined by the Committee), any business that is in
competition with the Corporation or with any business in which the
Corporation has a substantial interest as determined by the Committee.
(9) CONDITIONS AND RESTRICTIONS ON AWARDS. At the time that an Award is
granted, the Committee may provide for any conditions and/or restrictions
which it intends to impose upon the Award and/or the Common Shares subject
to the Award. The Committee may accelerate the vesting of any Participant's
Option by giving written notice to the Participant. Upon receipt of such
notice, the Participant and the Corporation shall amend the Award Agreement
to reflect the new vesting schedule. The acceleration of the exercise
period of an Option shall not affect the expiration date of that Option.
Notwithstanding the Committee's discretion in determining a vesting
schedule, if any, with respect to a particular Award, an Option shall
become fully vested should the Board of Directors recommend acceptance of a
take-over bid or issue-bid for Common Shares of the Corporation.
(10) OPTION EXERCISE. Options shall be exercised by the delivery of written
notice to the Corporation, in such form and to be filed in such manner as
the Committee shall in its sole discretion prescribe, not later than 5:00
p.m., Toronto time, on the last day on which the Option may be exercised.
Any written notice of the exercise of an Option shall set forth the number
of Common Shares with respect to which the Option is to be exercised, shall
include any statement or representation required by the applicable Award
Agreement, and shall be accompanied by paying in full the purchase price
for the Common Shares.
(11) REGISTRATION OF OPTION COMMON SHARES. The Options shall not be exercisable
unless the purchase of the Common Shares is pursuant to an applicable
effective registration statement under the Securities Act of 1933, as
amended, or unless, in the opinion of counsel to the Corporation, the
proposed purchase of the Common Shares would be exempt from the
registration requirements of the Securities Act of 1933, as amended, and
from the registration or qualification requirements of applicable state
securities laws.
8. CHANGE OF CONTROL.
(1) For purposes of this Plan, a "Change of Control" shall be deemed to have
taken place if the shareholders of the Corporation approve a definitive
agreement for:
(i) the merger or other business combination of the Corporation with or
into another corporation or entity pursuant to which the shareholders
of the Corporation do not own, immediately after the transaction, more
than 50% of the voting power of the corporation or entity that
survives the merger or business combination; or
(ii) the sale, exchange or other disposition of all or substantially all of
the assets of the Corporation.
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(2) In the event of a Change of Control, the Committee may, in its discretion,
determine that all outstanding Options granted under this Plan shall become
exercisable in full whether or not otherwise exercisable at such time, and
any such Option shall remain exercisable in full thereafter until it
expires pursuant to its terms.
9. AMENDMENT AND TERMINATION. Except to the extent prohibited by applicable
law and unless otherwise expressly provided in an Award Agreement or in this
Plan:
(1) AMENDMENTS TO THIS PLAN. The Board may amend, alter, suspend, discontinue,
or terminate this Plan at any time without the consent of any shareholder,
Participant, other holder or beneficiary of an Award, or other person;
provided that notwithstanding any other provision of this Plan or any Award
Agreement, no such amendment, alteration, suspension, discontinuation, or
termination shall be made without shareholder approval if such approval is
necessary to comply with, or to obtain exemptive relief under, any tax or
regulatory requirement that the Board deems desirable to comply with;
(2) AMENDMENTS TO AWARDS. The Committee may waive any conditions or rights
under, amend any terms of, or accelerate or alter, any Award granted
hereunder, prospectively or retroactively, without the consent of any
relevant Participant or holder or beneficiary of an Award, provided that
such action does not
(i) materially impair the rights of any Participant or holder or
beneficiary of an Award without such person's consent; or
(ii) result in a decrease in the Fair Market Value of an Award without such
Participant's or holder's or beneficiary's consent;
(3) ADJUSTMENTS OF AWARDS UPON CERTAIN ACQUISITIONS. In the event the
Corporation or any Affiliate shall assume outstanding employee awards or
the right or obligation to make future employee awards in connection with
the acquisition of another business or another corporation or business
entity, the Committee may make such adjustments, not inconsistent with the
terms of this Plan, in the terms of Awards as it shall deem appropriate in
order to achieve reasonable comparability or an equitable relationship
between the assumed awards and the Awards as so adjusted;
(4) ADJUSTMENT OF AWARDS UPON THE OCCURRENCE OF CERTAIN UNUSUAL OR NONRECURRING
EVENTS. The Committee is hereby authorized to make adjustments in the terms
and conditions of, and the criteria included in, Awards in recognition of
unusual or nonrecurring events (including, without limitation, the events
described in Section 4(3) hereof) affecting the Corporation, any Affiliate,
or the financial statements of the Corporation or any Affiliate, or of
changes in applicable laws, regulations, or accounting principles, whenever
the Committee determines that such adjustments are appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under this Plan; and
(5) CANCELLATION. Any provision of this Plan or any Award Agreement to the
contrary notwithstanding, the Committee may cause any Award granted
hereunder to be cancelled in consideration of a cash payment or alternative
Award (equal to the Fair Market Value of the Award to be cancelled) made to
the holder of such cancelled Award.
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10. GENERAL PROVISIONS.
(1) REPRESENTATIONS; LEGEND. The Committee may require each person purchasing
Common Shares pursuant to an Option to represent to and agree with the
Corporation in writing that the Participant is acquiring the Common Shares
without a view to the distribution thereof. The certificates for such
Common Shares may include any legend which the Committee deems appropriate
to reflect any restrictions on transfer.
(2) NO RIGHTS TO AWARDS. No Employee, Participant or other person shall have
any claim to be granted any Award, and there is no obligation for
uniformity of treatment of Employees, Participants, or holders or
beneficiaries of Awards. The terms and conditions of Awards need not be the
same with respect to each recipient.
(3) WITHHOLDING. A Participant may be required to pay to the Corporation or any
Affiliate, and the Corporation or any Affiliate shall have the right and is
hereby authorized to withhold from any Award, from any payment due or
transfer made under any Award or under this Plan or from any compensation
or other amount owing to a Participant, the amount (in cash, Common Shares,
other securities, other Awards or other property, as determined by the
Committee) of any applicable withholding taxes in respect of an Award, its
exercise, or any payment or transfer under an Award or under this Plan and
to take such other action as may be necessary in the opinion of the
Corporation to satisfy all obligations for the payment of such taxes. In
the case of payments of Awards in the form of Common Shares, at the
Committee's discretion, the Participant may be required to pay to the
Corporation or an Affiliate the amount of any taxes required to be withheld
with respect to such Common Shares or, in lieu thereof, the Corporation or
an Affiliate shall have the right to retain (or the Participant may be
offered the opportunity to elect to tender) the number of Common Shares
whose Fair Market Value equals the amount required to be withheld. The
Committee may provide for additional cash payments to holders of Awards to
defray or offset any tax arising from the grant, vesting, exercise or
payments of any Award. In the discretion of the Committee, the Corporation
may offer loans to Participants to satisfy withholding requirements on such
terms as the Committee may determine, which terms may in the discretion of
the Committee be non-interest bearing.
(4) NO LIMIT ON OTHER COMPENSATION ARRANGEMENTS. Nothing contained in this Plan
shall prevent the Corporation or any Affiliate from adopting or continuing
in effect other compensation arrangements, which may (but need not) provide
for the grant of options, restricted stock and other types of
security-based awards provided for hereunder (subject to shareholder
approval if such approval is required), and such arrangements may be either
generally applicable or applicable only in specific cases.
(5) NO RIGHT TO EMPLOYMENT. The grant of an Award shall not be construed as
giving a Participant the right to be retained in the employ of, or to
continue to render services to, the Corporation or any Affiliate. Further,
the Corporation or an Affiliate may at any time dismiss a Participant from
employment, or otherwise terminate its relationship with a Service
Provider, free from any liability or any claim under this Plan, except to
the extent expressly provided otherwise in this Plan or in any Award
Agreement.
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(6) NO RIGHTS AS SHAREHOLDER. Subject to the provisions of the applicable Award
Agreement, no Participant or holder or beneficiary of any Award shall have
any rights as a shareholder with respect to any Common Shares to be
distributed under this Plan until he or she has become the holder of such
Common Shares.
(7) GOVERNING LAW. The validity, construction, and effect of this Plan and any
rules and regulations relating to this Plan and any Award Agreement shall
be determined in accordance with the laws of the State of Delaware and
applicable United States law; provided, however, that, to the extent
Canadian federal or Ontario provincial law is applicable to any aspect of
this Plan, such law shall control to the extent that it does not conflict
with application of any securities laws or tax laws of the United States
upon the grant or exercise of an Award.
(8) SEVERABILITY. If any provision of this Plan or any Award is or becomes or
is deemed to be invalid, illegal, or unenforceable in any jurisdiction or
as to any person or Award, or would disqualify this Plan or any Award under
any law deemed applicable by the Committee, such provision shall be
construed or deemed amended to conform to applicable laws, or if it cannot
be construed or deemed amended without, in the determination of the
Committee, materially altering the intent of this Plan or the Award, such
provision shall be stricken as to such jurisdiction, person or Award and
the remainder of this Plan and any such Award shall remain in full force
and effect.
(9) OTHER LAWS. The Committee may refuse to issue or transfer any Common Shares
or other consideration under an Award if it determines that the issuance or
transfer of such Common Shares or such other consideration might violate
any applicable law or regulation, and any payment tendered to the
Corporation by a Participant, other holder or beneficiary in connection
with the exercise of such Award shall be promptly refunded to the relevant
Participant, holder or beneficiary. Without limiting the generality of the
foregoing, no Award granted hereunder shall be construed as an offer to
sell securities of the Corporation, and no such offer shall be outstanding,
unless and until the Committee has determined that any such offer, if made,
would be in compliance with all applicable requirements of federal
securities laws.
(10) NO TRUST OR FUND CREATED. Neither this Plan nor any Award shall create or
be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Corporation or any Affiliate and a Participant or
any other person. To the extent that any person acquires a right to receive
payments from the Corporation or any Affiliate pursuant to an Award, such
right shall be no greater than the right of any unsecured general creditor
of the Corporation or any Affiliate.
(11) NO FRACTIONAL COMMON SHARES. No fractional Common Shares shall be issued or
delivered pursuant to this Plan or any Award, and the Committee shall
determine whether cash, other securities, or other property shall be paid
or transferred in lieu of any fractional Common Shares or whether such
fractional Common Shares or any rights thereto shall be cancelled,
terminated, or otherwise eliminated.
(12) HEADINGS. Headings are given to the sections and subsections of this Plan
solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or
interpretation of this Plan or any provision thereof.
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(13) BROKERAGE ARRANGEMENTS. The Committee, in its discretion, may enter into
arrangements with one or more banks, brokerages or other financial
institutions to facilitate the disposition of Common Shares acquired upon
exercise of Options, including, without limitation, the sale of the Common
Shares acquired upon such exercise.
(14) INDEMNIFICATION. Any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative
(including any action or suit by or in the right of the Corporation to
procure a judgment in its favour) by reason of the fact that he or she is
or was a member of the Committee, shall be indemnified by the Corporation,
if, as and to the extent authorized by the laws of the Province of Ontario,
against expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement (if the terms of such settlement have been consented to
by the Corporation) actually and reasonably incurred by him or her in
connection with the defence or settlement of such action, suit or
proceeding. The indemnification expressly provided by statute in a specific
case shall not be deemed exclusive of any other rights to which any person
indemnified may be entitled under any lawful agreement, vote of
shareholders or disinterested directors or otherwise, both as to action in
his or her official capacity and as to action in any other capacity while
holding such office, and shall continue as to a person who has ceased to be
a director, officer, employee or agent and shall inure to the benefit of
the heirs, personal representatives and administrators of such a person. No
right of indemnification under the provisions set forth herein shall be
available to or enforceable by any such person unless, within sixty days
after institution of any such action or proceeding, such person shall have
offered the Corporation, in writing, notice of and the opportunity to
handle and defend same at its own expense unless the Corporation shall have
waived the requirement to provide such written notice and offer.
11. EFFECTIVE DATE OF THIS PLAN. This Plan shall be effective on January 1,
1999 (the "Effective Date"); provided, however, that if this Plan is not
approved by the shareholders of the Corporation within the period ending twelve
months after the Effective Date, none of the Options granted hereunder shall
constitute Incentive Stock Options.
12. TERM OF THIS PLAN. No Award shall be granted under this Plan after
March 27, 2005; provided, however, that any Award theretofore granted may, and
the authority of the Board or the Committee to amend, alter, adjust, suspend,
discontinue, or terminate any such Award or to waive any conditions or rights
under any such Award shall, extend beyond such date.
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EXHIBIT "B"
ZEMEX CORPORATION
1999 EMPLOYEE STOCK PURCHASE PLAN
ARTICLE 1
PURPOSE AND INTERPRETATION
1.1 PURPOSE. The purpose of the 1999 Employee Stock Purchase Plan shall be to
advance the interests of the Corporation by encouraging equity participation in
the Corporation through the acquisition of Common Shares of the Corporation.
1.2 DEFINITIONS. In the Plan, the following capitalized words and terms shall
have the following meanings:
"AFFILIATE" includes any company in which the Corporation has an equity or
voting interest of more than 50%.
"AGGREGATE CONTRIBUTION" means the aggregate of a Participant's
Contribution and the related Corporation's Contribution.
"BASIC ANNUAL SALARY" means for any Participant for any Plan Year the total
of the Participant's Regular Gross Wages and Salary exclusive of any
overtime pay, bonuses or allowances of any kind whatsoever.
"BOARD OF DIRECTORS" means the board of directors of the Corporation.
"COMMON SHARES" means the common shares of the Corporation as constituted
on the date hereof.
"CORPORATION" means Zemex Corporation, a corporation subject to the Canada
Business Corporations Act.
"CORPORATION'S CONTRIBUTION" means the amount the Corporation credits a
Participant under Section 2.5.
"DESIGNATED AFFILIATES" means the Affiliates of the Corporation designated
by the Board of Directors for purposes of determinations under the Plan,
such as eligibility of an employee to be an Eligible Employee and/or
participation in the Plan by employees of Affiliates, from time to time.
"ELIGIBLE EMPLOYEE" means an employee of the Corporation or Designated
Affiliate who normally completes 30 or more hours of work per week.
"HOLDING PERIOD" means a period of twelve months.
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"ISSUE PRICE" means the average of the closing prices of the Common Shares
on The Toronto Stock Exchange or the New York Stock Exchange or other
exchanges on which the Corporation may be listed for the calendar quarter
in respect of which Common Shares are being issued under the Plan.
"PARTICIPANT" means an Eligible Employee who becomes a participant in the
Plan under Section 2.2.
"PARTICIPANT'S CONTRIBUTION" means the amount a Participant elects to
contribute to the Plan under Section 2.4(1) or Section 2.4(2).
"PLAN" means the Employee Stock Purchase Plan provided for herein.
"PLAN YEAR" shall mean the calendar year.
"TOTAL AUTHORIZED SHARES" shall mean the initial number of Common Shares
authorized by the approval of the shareholders of Zemex Corporation, which
is 218,366 Common Shares, for purchase under the Plan.
ARTICLE 2
SHARE PURCHASE PLAN
2.1 THE PLAN. The Plan is hereby established for Eligible Employees of the
Corporation and its Designated Affiliates.
2.2 PARTICIPANTS. Participants in the Plan shall be Eligible Employees of the
Corporation who have been continuously employed by the Corporation and/or any
Designated Affiliates for at least twelve consecutive months. The Board of
Directors, upon the recommendation of the President of the Corporation, shall
have the right, at its absolute discretion, to waive the twelve-month
eligibility period or to determine that the Plan does not apply to any Eligible
Employee or group of Eligible Employees.
2.3 NUMBER OF SHARES.
(1) A number of Common Shares made available for the Plan, individually and
collectively, shall be determined from time to time by the Board of Directors,
but, in any case, shall not exceed, in the aggregate, the Total Authorized
Shares. Should the total number of Common Shares which may be purchased under
the Plan for a particular Plan Year exceed the number of Common Shares available
for purchase under the Plan, then the Board of Directors shall make a pro rata
allocation of the available shares and shall notify each Participant of such
allocation.
(2) Notwithstanding the foregoing, in the event any change is made to the
Common Shares purchasable under the Plan (whether by reason of merger,
consolidation, reorganization, recapitalization, stock dividend in excess of 10%
at any single time, stock split, combination of shares, exchange of shares,
changes in corporate structure or otherwise), then appropriate adjustments shall
be made to the Total Authorized Shares purchasable under the Plan, and the
number of shares outstanding under the Plan.
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2.4 ELECTION TO PARTICIPATE IN THE PLAN AND PARTICIPANT'S CONTRIBUTION.
(1) Any Participant may elect to contribute money to the Plan in any Plan Year
if the Participant, prior to the end of the immediately preceding calendar year,
delivers to the Corporation a written direction in form and substance
satisfactory to the Corporation authorizing the Corporation to deduct from the
Participant's salary the Participant's Contribution in equal instalments.
(2) If, on December 31 of any year, an Eligible Employee has not been
continuously employed by the Corporation and/or any of its Designated Affiliates
for at least twelve consecutive months (unless such twelve-month requirement is
waived by the Board of Directors), then, in the next ensuing calendar quarter
during which such Eligible Employee reaches six consecutive months of
employment, he or she may elect to make a Participant's Contribution with
respect to the balance of that Plan Year, commencing at the beginning of the
next calendar quarter, by delivering to the Corporation the written direction
referred to above.
(3) The Participant's Contribution shall not exceed 10%, before deductions, of
the Participant's Basic Annual Salary; provided that, in the event of any
employee electing to make a Participant's Contribution for less than a full Plan
Year in accordance with Section 2.4(2) above, his or her Basic Annual Salary
shall be pro-rated for the balance of that Plan Year.
(4) No adjustment shall be made to the Participant's contribution until the
next succeeding Plan Year, and then only if a new written direction shall have
been delivered to the Corporation for such Plan Year.
2.5 CORPORATION'S CONTRIBUTION. Immediately prior to the date any Common Shares
are issued to a Participant in accordance with Section 2.7, the Corporation will
credit the Participant with and thereafter hold for the Participant an amount
equal to the Participant's Contribution then held by the Corporation.
2.6 AGGREGATE CONTRIBUTION. The Corporation shall not be required to
segregate the Aggregate Contribution from its own corporate funds or to pay
interest thereon.
2.7 ISSUE OF SHARES.
(1) As soon as practicable following March 31, June 30, September 30 and
December 31 in each Plan Year, the Corporation will issue for the account of
each participant fully paid and non-assessable Common Shares equal in value to
the Aggregate Contribution as of such date converted into Common Shares at the
applicable Issue Price. If such conversion would otherwise result in the issue
for the account of a Participant of a fraction of a Common Share, the
Corporation will issue only such whole shares as are issuable, and the balance
shall be held as provided in Section 2.7(2).
(2) The Corporation shall hold any unused balance of the Aggregate Contribution
for a Participant until used in accordance with the Plan.
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2.8 SAFEKEEPING AND DELIVERY OF SHARES.
(1) All Common Shares issued for the account of a Participant in accordance
with Section 2.7 will be held in safekeeping by the Corporation and will be
delivered to such Participant upon the expiration of the Holding Period
beginning on the date of issue of such Common Shares. If the Corporation
receives, on behalf of a Participant in respect of any Common Shares held:
(a) a cash dividend;
(b) options or rights to purchase additional securities of the Corporation
or any other corporation;
(c) any notice of meeting, proxy statement and proxy for any meeting of
holders of Common Shares of the Corporation; or
(d) other or additional Common Shares or other securities (by way of
dividend or otherwise);
then the Corporation shall forward to such Participant, at his or her last
address according to the register maintained under Section 2.11, any of the
items listed in Sections 2.8(1)(a), (b) and (c); and shall hold in safekeeping
any additional securities referred to in Section 2.8(1)(d) and shall deliver
such securities to the Participant with delivery of the Common Shares in respect
of which such additional securities were issued.
(2) Any Common Shares held for the account of a Participant in safekeeping by
the Corporation will be distributed to a Participant or his or her estate prior
to the expiration of the applicable Holding Period only upon:
(a) the date of the commencement of the Participant's retirement in
accordance with the normal retirement policy of the Corporation;
(b) the date of the commencement of the total disability of the
Participant determined according to the Corporation's normal
disability policy, and if none, in accordance with the definition of
disability in the Zemex Corporation Retirement Pension Plan; or
(c) the date of death of the Participant.
(3) If there is a take-over bid or issuer bid made for all or a portion of the
issued and outstanding Common Shares, the Board of Directors may, by resolution,
make any Common Shares held for a Participant immediately deliverable in order
to permit such shares to be tendered to such bid. In addition, the Board of
Directors may, by resolution, permit the Corporation's Contribution to be made
and Common Shares issued for the then Aggregate Contribution prior to expiration
of any such take-over bid or issuer bid to permit such shares to be tendered to
such bid.
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2.9 TERMINATION OF EMPLOYMENT.
(1) If a Participant shall cease to be employed by the Corporation and/or any
of its Designated Affiliates for any reason or shall receive notice from the
Corporation of the termination of his or her employment:
(a) the Participant shall automatically cease to be a Participant in the
Plan;
(b) any portion of the Participant's contribution then held for the
Participant shall be paid to the Participant or his or her estate or
successor, as the case may be;
(c) any portion of the Corporation's Contribution then held for the
Participant shall be paid to the Corporation; and
(d) any Common Shares then held in safekeeping for a Participant shall be
subject to Section 2.8 in the case of a retirement, disability or
death, and in all other cases shall, at the option of the Corporation,
be either purchased for cancellation by the Corporation at the Issue
Price thereof or sold at market, and thereafter an amount equal to the
lesser of:
(i) the Participant's Contribution; and
(ii) one-half of the proceeds received on any sale of such Common
Shares shall be paid to the Participant and the balance shall be
paid to the Corporation.
(2) The Board of Directors may waive the requirements of Section 2.9(1)(d) and
pay the full proceeds to the Participant.
2.10 ELECTION TO WITHDRAW FROM THE PLAN. Any Participant may at any time elect
to withdraw from the Plan. In order to withdraw, the Participant must give at
least two weeks' written notice to the Corporation in form and substance
satisfactory to the Corporation directing the Corporation to cease deducting
from the Participant's Basic Annual Salary the Participant's Contribution.
Deductions will cease to be made commencing with the first pay date following
expiration of the two-week notice. The Participant's Contribution made prior to
withdrawal will continue to be held by the Corporation. On the next following
date for making the Corporation's Contribution, the Corporation will credit the
Participant with the pro rata amount of the Corporation's Contribution,
calculated in accordance with Section 2.5. The issuance and delivery of Common
Shares will not be accelerated by such withdrawal but will occur on the date on
which such Common Shares would otherwise have been issued in accordance with
Section 2.7 and delivered to the Participant in accordance with Section 2.8 had
the Participant not elected to withdraw from the Plan. Upon delivery of the
Common Shares pursuant to Section 2.8, any remaining Participant Contribution
will also be delivered to the Participant and any remaining Corporation
Contribution will be returned to the Corporation.
2.11 RECORD KEEPING. The Corporation shall maintain a register in which shall
be recorded:
(a) the name and address of each Participant in the Plan;
(b) any Participant's Contributions; and
(c) the number of Common Shares held in safekeeping for the account of a
Participant.
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2.12 NECESSARY APPROVALS. The obligation of the Corporation to issue and deliver
any Common Shares in accordance with the Plan shall be subject to any necessary
approval of any stock exchange or regulatory authority having jurisdiction over
the securities of the Corporation. If any Common Shares cannot be issued to any
Participant for whatever reason, the obligation of the Corporation to issue such
Common Shares shall terminate and any Participant's Contribution held for a
Participant shall be returned to the Participant without interest.
ARTICLE 3
GENERAL
3.1 TRANSFERABILITY. The benefits and rights accruing to any Participant in
accordance with the terms and conditions of the Plan shall not be transferable
by a Participant unless specifically provided herein. During the lifetime of the
Participant, all benefits and rights shall only be exercised by the Participant
or by his or her guardian or legal representative.
3.2 EMPLOYMENT. Nothing contained in the Plan shall confer upon any
Participant any right with respect to employment or continuance of employment
with the Corporation or any Affiliate, or interfere in any way with the right of
the Corporation or any Affiliate to terminate the Participant's employment at
any time. Participation in the Plan by a Participant shall be voluntary.
3.3 DELEGATION TO EXECUTIVE COMPENSATION / PENSION COMMITTEE. All of the
powers exercisable hereunder by the Board of Directors of the Corporation may,
to the extent permitted by applicable law and by resolution of the Board of
Directors of the Corporation, be exercised by the Executive Compensation /
Pension Committee of such Board of Directors. In addition, if determined
appropriate by the Board of Directors of the Corporation, the Board of Directors
may delegate any or all of the powers of the Board of Directors of the
Corporation under the Plan to an independent consultant.
3.4 ADMINISTRATION OF THE PLAN. The Plan shall be administered by the Board
of Directors of the Corporation. The Board of Directors shall be authorized to
interpret the Plan and may, from time to time, establish, amend or rescind rules
and regulations required for carrying out the Plan. Any such interpretation of
the Plan shall be final and conclusive. All administrative costs of the Plan
shall be paid by the Corporation. The senior officers of the Corporation are
authorized and directed to do all things and execute and deliver all
instruments, undertakings and applications and writings as they, in their
absolute discretion, consider necessary for the implementation of the Plan and
of the rules and regulations established for administering the Plan.
3.5 AMENDMENT, MODIFICATION OR TERMINATION OF THE PLAN. Subject to
Section 3.3, the Board of Directors reserves the right to amend, modify or
terminate the Plan at any time if and when it is advisable in the absolute
discretion of the Board of Directors. However, any amendment of the Plan which
would:
(a) materially increase the benefits under the Plan;
(b) materially increase the number of Common Shares which may be issued
under the Plan; or
(c) materially modify the requirements as to the eligibility for
participation in the Plan;
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shall be effective only upon the approval of the shareholders of the
Corporation. Any material amendment to any provision of the Plan shall be
subject to any necessary approvals by any stock exchange or regulatory body
having jurisdiction over the securities of the Corporation.
3.6 CONSOLIDATION, MERGER, ETC. If there is a consolidation, merger or
statutory amalgamation or arrangement of the Corporation with or into another
corporation, a separation of the business of the Corporation into two or more
entities or a transfer of all or substantially all of the assets of the
Corporation to another entity, each Participant for whom Common Shares are held
in safekeeping under the Plan shall receive on the date that the Common Shares
would otherwise be delivered to the Participant the securities, property or cash
to which the Participant would have received upon such consolidation, merger,
amalgamation, arrangement, separation or transfer if the Participant had held
the Common Shares immediately prior to such event.
3.7 NO REPRESENTATION OR WARRANTY. The Corporation makes no representation
or warranty as to the future market value of any Common Shares issued in
accordance with the provisions of the Plan.
3.8 INTERPRETATION. This Plan shall be governed by and construed in accordance
with the laws of the Province of Ontario.
3.9 APPROVAL AND EFFECTIVE DATE. The approval of the Plan by the
shareholders of Zemex Corporation shall constitute approval of this Plan. This
Plan shall be effective as of January 1, 1999.
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ZEMEX CORPORATION
ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS
FORM OF PROXY
The undersigned, as record holder(s) of the shares listed below, hereby revokes
any previous proxies and appoints Richard L. Lister, Allen J. Palmiere and
Patricia K. Moran (or each of them, or their assignees) proxies for the
undersigned, with full power of substitution, to represent the undersigned, to
act for the undersigned in the same manner and with the same effect as if the
undersigned were personally present and to vote all of the Common Shares which
the undersigned is entitled to vote at the Annual and Special Meeting of
Shareholders of Zemex Corporation (the "Corporation") to be held on May 10, 1999
at 1:00 p.m., and any adjournment thereof, as follows:
1. Election of directors (nominees: Paul A. Carroll, Morton A. Cohen,
John M. Donovan, R. Peter Gillin, Peter O. Lawson-Johnston, Richard L.
Lister, Garth A.C. MacRae and William J. vanden Heuvel):
|_| FOR |_| WITHHOLD AUTHORITY to vote for directors
2. Proposal to ratify the appointment of Deloitte & Touche LLP as
independent public auditors of the Corporation and to authorize the
directors to fix the remuneration to be paid to the auditors:
|_| FOR |_| AGAINST |_| ABSTAIN
3. Proposal to approve the Corporation's 1999 Stock Option Plan.
|_| FOR |_| AGAINST |_| ABSTAIN
4. Proposal to approve the Corporation's 1999 Employee Stock Purchase Plan.
|_| FOR |_| AGAINST |_| ABSTAIN
5. To vote or otherwise represent the shares on any other business which
may properly come before the Annual and Special Meeting of Shareholders
or any adjournments thereof, according to their decision and in their
discretion.
|_| FOR |_| AGAINST |_| ABSTAIN
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS of the Corporation
and will be voted as directed herein. If no direction is given, this proxy will
be voted FOR all the proposals listed above in the manners described in the
Proxy Statement.
DATE:___________________________ ____________________________________
SIGNATURE OF SHAREHOLDER
------------------------------------
SIGNATURE OF SHAREHOLDER
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS ON YOUR STOCK CERTIFICATES. A
corporation is requested to sign its name by its president:
administrators, trustees, etc., are requested to so indicate when
signing. If stock is registered in two names, it is preferred that both
sign. PLEASE RETURN YOUR PROXY IN THE ENVELOPE PROVIDED.
