<PAGE> 1
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
The UniMark Group, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(l) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
<PAGE> 2
THE UNIMARK GROUP, INC.
124 MCMAKIN ROAD
BARTONVILLE, TEXAS 76226
May 1, 1997
Dear Shareholder:
You are cordially invited to attend the annual meeting of shareholders
of The UniMark Group, Inc. (the "Company"), which will be held at the
Doubletree Hotel, Lincoln Centre, 5410 LBJ Freeway, Dallas, Texas, on June 6,
1997, at 10:00 a.m. (Dallas, Texas Time). Information about the meeting is
presented on the following pages.
Details of the business to be conducted at the annual meeting are
given in the attached Notice of Annual Meeting and Proxy Statement.
Whether or not you attend the annual meeting it is important that your
shares be represented and voted at the meeting. Therefore, I urge you to sign,
date, and promptly return the enclosed proxy in the enclosed postage-paid
envelope. If you decide to attend the meeting and vote in person, you will of
course have that opportunity.
On behalf of the Board of Directors, I would like to express our
appreciation for your continued interest in the affairs of the Company.
Sincerely,
Jorn Budde
President and Chief Executive Officer
<PAGE> 3
THE UNIMARK GROUP, INC.
124 MCMAKIN ROAD
BARTONVILLE, TEXAS 76226
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JUNE 6, 1997
To The Shareholders:
The annual meeting of the shareholders of The UniMark Group, Inc.
(the" Company") will be held at the Doubletree Hotel, Lincoln Centre, 5410 LBJ
Freeway, Dallas, Texas, on June 6, 1997, at 10:00 a.m.(Dallas, Texas Time) for
the following purposes:
1. To elect eight directors to serve on the Company's Board of
Directors.
2. To consider and approve an amendment to the Company's 1994
Employee Stock Option Plan to reserve an additional 340,000
shares of common stock for issuance thereunder.
3. To consider and vote upon a proposal to amend the Company's
Articles of Incorporation to authorize a new class of
Preferred Stock.
4. To ratify the selection of Ernst & Young LLP as the Company's
independent public accountants for the fiscal year ending
December 31, 1997.
5. To transact such other business as may properly come before
the meeting.
Only the shareholders of record at the close of business on April 15,
1997 are entitled to notice of, and to vote at, this Annual Meeting or any
adjournment thereof.
BY ORDER OF THE BOARD OF DIRECTORS
Keith Ford, Secretary
Bartonville, Texas
May 1, 1997
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IMPORTANT
Whether or not you expect to attend in person, we urge you to sign,
date, and return the enclosed Proxy at your earliest convenience. This will
ensure the presence of a quorum at the meeting. PROMPTLY SIGNING, DATING, AND
RETURNING THE PROXY WILL SAVE THE COMPANY THE EXPENSES AND EXTRA WORK OF AN
ADDITIONAL SOLICITATION. An addressed envelope for which no postage is
required if mailed in the United States is enclosed for that purpose. Sending
in your proxy will not prevent you from voting your stock at the meeting if you
desire to do so, as your Proxy is revocable at your option.
- --------------------------------------------------------------------------------
<PAGE> 4
THE UNIMARK GROUP, INC.
124 MCMAKIN ROAD
BARTONVILLE, TEXAS 76226
PROXY STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 6, 1997
The enclosed proxy is solicited by and on behalf of the Board of
Directors of The UniMark Group, Inc. (the "Company") to be voted at the Annual
Meeting of Shareholders (the "Annual Meeting"), which will be held at the
Doubletree Hotel, Lincoln Centre, 5410 LBJ Freeway, Dallas, Texas, on June 6,
1997, at 10:00 a.m. (Dallas, Texas Time), and at any adjournments of such
Annual Meeting, for the purposes set forth in the accompanying Notice of Annual
Meeting of Shareholders and this Proxy Statement. The persons named as Proxies
are Jorn Budde and Keith Ford, each of whom is presently an executive officer
of the Company.
This Proxy Statement and the related form of proxy are being mailed on
or about May 1, 1997, to all shareholders of record on April 15, 1997. Shares
of the Company's common stock, $.01 par value per share (the "Common Stock"),
represented by proxies will be voted as described in this Proxy Statement or as
otherwise specified by a shareholder. As to the election of directors, a
shareholder, may, by checking the appropriate box on the proxy: (i) vote for
all director nominees as a group; (ii) withhold authority to vote for all
director nominees as a group; or (iii) vote for all director nominees as a
group except those nominees identified by the shareholder in the appropriate
area. See "Proposal No. 1: Election of Directors" below. With respect to each
of the other proposals, a shareholder may, by checking the appropriate box on
the proxy: (i) vote "FOR" the proposal; (ii) vote "AGAINST" the proposal; or
(iii) "ABSTAIN" from voting on the proposal. Any proxy given by a shareholder
may be revoked by the shareholder at any time prior to the voting of the proxy
by delivering a written notice of revocation to the Secretary of the Company,
by executing and delivering a later-dated proxy or by attending the Annual
Meeting and voting in person.
The cost of soliciting, preparing, assembling and mailing the proxy,
this Proxy Statement, and other materials enclosed therewith, and all clerical
and other expenses of proxy solicitation will be borne by the Company. In
addition, directors, officers and employees of the Company and its subsidiaries
may solicit proxies by telephone, telegram or in person. The Company also has
employed Corporate Investor Communications, Inc., a proxy solicitation firm, to
solicit proxies from brokers and banks at a cost of approximately $5,000. The
Company also will request brokerage houses and other custodians, nominees and
fiduciaries to forward soliciting materials to the beneficial owners of Common
Stock held of record by such parties and will reimburse such parties for their
expenses in forwarding such materials.
The information contained in the "Stock Option and Compensation
Committee Report on Executive Compensation" below and "Performance of the
Common Stock" below shall not be deemed "filed" with the Securities and
Exchange Commission or subject to Regulations 14A or 14C or to the liabilities
of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
VOTING RIGHTS
The holders of record of the 8,583,833 shares of Common Stock
outstanding on April 15 1997, will be entitled to one vote for each share held
on all matters coming before the Annual Meeting.
METHOD OF VOTING
The presence, in person or by proxy, of the holders of a majority of
the outstanding shares of Common Stock entitled to vote is necessary to
constitute a quorum at the Annual Meeting. If a quorum is present, the
affirmative vote of two-thirds (66.67%) of all the outstanding shares of Common
Stock shall be the act of the shareholders with respect to Proposal No. 3.
Proposal No. 1, No. 2 and No. 4 require the affirmative vote of a majority of
the shares of Common
<PAGE> 5
Stock present. Once a quorum is present at a duly organized and convened
meeting, shareholders may continue to conduct business notwithstanding the
withdrawal of enough shareholders to leave less than a quorum. If a quorum is
not present or represented at the Annual Meeting, the shareholders present at
the meeting or represented by proxy, have the power to adjourn the Annual
Meeting from time to time, without notice other than an announcement at the
Annual Meeting, until a quorum is present or represented. At any such adjourned
Annual Meeting at which a quorum is present or represented, any business may be
transacted that might have been transacted at the original Annual Meeting.
Abstentions may be specified on all proposals (other than the election
of directors) and will be counted towards a quorum. With respect to the
election of directors, votes may be cast in favor or withheld. Directors are
elected by a plurality of the votes cast at the Annual Meeting, and votes that
are withheld will be excluded entirely from the vote and will have no effect.
Brokers who hold shares in street name for customers are required to
vote those shares in accordance with instructions received from the beneficial
owners. In addition, brokers are entitled to vote on certain items, such as the
election of directors and other "discretionary items," even when they have not
received instructions from beneficial owners. Brokers are not permitted to vote
for other "non-discretionary" items without specific instructions from the
beneficial owners. If a broker has not received specific instructions with
respect to shares held for beneficial owners, the votes to which those shares
are entitled are deemed "broker non-votes." Such broker non-votes will be
counted towards a quorum. Under applicable Texas law and in accordance with the
Company's bylaws, broker non-votes are not counted in determining the total
number of votes cast and will have no effect with respect to Proposal No. 1 ,
No. 2 and No. 4. With respect to Proposal 3, broker non-votes will be counted
as votes against the proposal.
ANNUAL REPORT
The annual report for the Company's fiscal year ended December 31,
1996, including audited financial statements, is being furnished with this
Proxy Statement to shareholders of record as of April 15, 1997. The annual
report does not constitute a part of the proxy solicitation materials.
2
<PAGE> 6
SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS, DIRECTORS, AND MANAGEMENT
The following table sets forth information regarding the number and
percentage of the Company's Common Stock beneficially owned by each director
and nominee, the Named Executive Officer, all the directors and executive
officers as a group, and each person that owns more than 5% of any class of
voting securities.
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP
OF COMMON SHARES
NAMES AS OF THE RECORD DATE PERCENT OF CLASS(1)
----- --------------------- -------------------
Jorn Budde(2) ........................ 527,894 6.15%
Rafael Vaquero Bazan ................. 226,236 2.64
Eduardo Vaquero Bazan ................ 42, 981 *
Pedro Vaquero Garcia ................. 63,878 *
Fernando Camacho Casas (3) ........... 301,565 3.51
Jakes Jordaan (4) .................... 65,100 *
Edward A. Stone (5) .................. 27,500 *
Jose Martinez Brohez ................. 44,120 *
Executive Officers and Directors
as a group (12 persons) (7).. 1,447,474 16.65
OTHER FIVE PERCENT HOLDERS:
---------------------------
Kennedy Capital Management, Inc. (6) 502,050 5.84
Dr. David Madero Gonzales ............ 465,989 5.43
- ---------------------------
*Less than 1%
(1) In calculating the percentage of total class ownership, the number of
outstanding shares used was 8,583,833. This number does not include:
(i) 339,500 shares of Common Stock issuable upon exercise of
currently outstanding options granted under the Option Plan; (ii)
68,000 shares of Common Stock issuable upon exercise of currently
outstanding options granted under the Directors' Plan; and (iii)
78,190 shares of Common Stock issuable upon exercise of currently
outstanding warrants granted to underwriters in connection with the
Company's initial public offering.
(2) Mr. Jorn Budde, the Company's President and Chief Executive Officer is
the only "named executive officer" because none of the Company's four
other highest paid executive officers have total annual salaries and
bonuses in excess of $100,000.
(3) Includes 276,565 shares of Common Stock held by Agros, a Mexican
entity of which Mr. Camacho is a managing director, and 25,000 shares
of Common Stock underlying presently exercisable stock options. Mr.
Camacho disclaims beneficial ownership of the Agros' shares.
(4) Includes 25,000 shares of Common Stock underlying presently
exercisable stock options.
(5) Includes 18,000 shares of Common Stock underlying presently
exercisable stock options.
(6) Except to the extent that information is believed to be otherwise
known by the Company, the information given is as of or about
February 15, 1996, as reported by Kennedy Capital Management, Inc. in
its Schedule 13G filed with the Securities and Exchange Commission.
(7) Includes 109,500 Vested Options.
3
<PAGE> 7
PROPOSAL NO. 1: ELECTION OF DIRECTORS
Eight directors are to be elected at the annual meeting, to hold
office until the next annual meeting of shareholders and until their successors
are elected and qualified. It is intended that the accompanying proxy will be
voted in favor of the following persons to serve as directors unless the
shareholder indicates to the contrary on the proxy. All nominees are incumbent
directors. Each of the nominees named below has indicated his willingness to
accept election. Management expects that each of the nominees will be available
for election, but if any of them is not a candidate at the time the election
occurs, it is intended that such proxy will be voted for the election of
another nominee to be designated by the Board of Directors to fill such
vacancy.
The nominees for the directors of the Company are as follows:
NAME AGE DIRECTOR SINCE
- ---- --- --------------
Jorn Budde 53 1992
Rafael Vaquero Bazan 42 1992
Eduardo Vaquero Bazan 38 1994
Jose Martinez Brohez 54 1996
Pedro Vaquero Garcia 71 1994
Fernando Camacho Casas 43 1994
Jakes Jordaan(1)(2) 35 1994
Edward A. Stone(1)(2)(3) 55 1994
- -------------------
(1) Members of the Audit Committee.
(2) Member of Stock Option Committee.
(3) Member of the Compensation Committee.
Each director serves until the next annual meeting of shareholders and until
his successor is duly elected and qualified. Officers serve at the discretion
of the Board of Directors.
NOMINEES
Jorn I. Budde is a co-founder of the Company and has been its President, Chief
Executive Officer, and Chairman of the Board of Directors since its inception
in 1992. From 1987 until 1991, Mr. Budde served as President of UniMark Sales,
Inc., a company founded and wholly-owned by Mr. Budde, that provided
international consulting and marketing services. From 1984 until 1986, Mr.
Budde served as Vice President of Mission Foods, Inc., a subsidiary of Gruma
SA, a diversified international foods conglomerate, with significant Mexican
operations. From 1976 until 1984, Mr. Budde served in various executive
positions with The Jimmy Dean Companies, a national meat processing company,
most recently as Executive Vice President and Vice Chairman. Prior to 1976, Mr.
Budde served in various positions with Plumrose, Inc., a subsidiary of The East
Asiatic Company of Copenhagen, Denmark, where he started his business career.
Mr. Budde has a degree in International Business from the Copenhagen School of
Commerce.
Rafael Vaquero Bazan is a co-founder of the Company and has served as a
director since its inception in 1992. Mr. Vaquero served as Vice-President of
the Company from 1992 to 1996, and has been serving as the Company's
4
<PAGE> 8
Executive Vice-President and Chief Operating Officer since 1996. He has also
served as general manager and has been in charge of operating the packing
plants Industrias Citricolas de Montemorelos, S.A. de C.V. ("ICMOSA") and
Empacadora de Naranjas Azteca S.A. ("Azteca") since 1978 and 1986,
respectively. Mr. Vaquero served as President of Amafac, the Mexican National
Fruit Sections Packers Association from 1989 until 1991. Mr. Vaquero is the
former President of the National Citrus Growers Association in Mexico and a
former President of the National Citrus Packers Association in Mexico. He is
also a former member of the Board of Directors of EMIT, a government sponsored
entity involved in developing technology for the Mexican citrus industry. Mr.
Vaquero has a Masters Degree in Business Administration from the University of
Monterrey, Mexico. Mr. Rafael Vaquero Bazan is the son of Mr. Pedro Vaquero
Garcia and the brother of Mr. Eduardo Vaquero Bazan.
Eduardo Vaquero Bazan, has served as a director of the Company since April 1994
and as Vice President -- Finance and Administration of ICMOSA since January
1995. From 1988 until 1995, Mr. Vaquero was employed by Industrias Horticolas
de Montemorelos, S.A. de C.V., a frozen fruit and vegetable processing plant,
most recently as General Manager and Director. From 1982 to 1988, Mr. Vaquero
served as a Divisional Director of Banca Serfin, S.A., a regional Mexican bank.
Mr. Eduardo Vaquero Bazan is the son of Mr. Pedro Vaquero Garcia and the
brother of Mr. Rafael Vaquero Bazan.
Jose Martinez Brohez has served as Chief Executive Officer of Grupo Industrial
Santa Engracia S.A. de C.V. ("GISE") since the GISE acquisition and as a
director of the Company since May 1996. Since 1989, he has also served as
President and Chairman of the Board of GISE. Mr. Martinez is a co-founder and
has been a director of the Asociacion Nacional De Procesadores De Citricos, the
Mexican national association of citrus processors, since 1991. He is also a
Board member of the following financial institutions: Banco Nacional De Mexico
(Banamex); Bancomer, S.A. at Cd. Victoria, Tamps.; and Casa De Bolsa Arka at
Monterrey, N.L. Mr. Martinez obtained his Bachelor of Science degree from
Monterrey Tech and his Masters of Science and Ph.D. in Agriculture, Range
Management and Animal Science from Texas A&M University.
Pedro Vaquero Garcia has been a director of the Company since 1994. He is a
co-founder of ICMOSA and Azteca. From 1992 until 1995, Mr. Vaquero served as a
member of the Congress of the State of Nuevo Leon, Mexico. Prior to 1992, Mr.
Vaquero held several political offices. Mr. Pedro Vaquero Garcia is the father
of Messrs. Rafael Vaquero Bazan and Eduardo Vaquero Bazan.
Fernando Camacho Casas has served as a director of the Company since December
1994. Since September 1992, Mr. Camacho has served as General Director and
co-founder of Operadora Agros, S.A. de C.V. ("Agros"), a Mexican venture
capital fund that invests primarily in the Mexican agricultural, horticultural
and food industries. During 1991 and 1992 he served as a representative of the
Mexican Ministry of Commerce in the North American Free Trade Agreement
negotiations. From 1985 to 1990, Mr. Camacho served as an economist for
Probursa, S.A., a large Mexican investment and securities brokerage firm. Mr.
Camacho received his degree in economics from the Autonomous Technological
Institute of Mexico.
Jakes Jordaan has served as a director of the Company since 1994. Presently,
Mr. Jordaan is a member of Jordaan, Howard & Pennington, PLLC, Dallas, Texas, a
law firm specializing in corporate finance, securities and complex business
litigation. From February 1991 until March 1994, Mr. Jordaan was a member of
the law firm of Munsch, Hardt, Kopf, Harr & Dinan, P.C., Dallas, Texas, most
recently as a shareholder. Mr. Jordaan is the past Chairman of the Securities
Section of the Dallas Bar Association and is a member of the Texas Bar
Association and the American Bar Association.
Edward A. Stone has served as a director of the Company since 1994. Since 1976,
Mr. Stone has been President and Chairman of The Dallas Marketing Group, Inc.,
a marketing consulting group, whose clients include Heinz Pet Products,
StarKist Seafood, American Airlines, AT&T Wireless Services, Reckitt & Coleman,
GTE and Coca-Cola. Prior to founding his consulting practice, Mr. Stone held a
variety of marketing and general administration positions in the United States
and Canada with Proctor & Gamble, the Clorox Company and Frito-Lay. He is a
Certified Management Consultant and a Fellow of the Institute of Management
Consultants.
5
<PAGE> 9
INFORMATION REGARDING THE BOARD AND ITS COMMITTEES
The Board has an Audit Committee, a Stock Option Plan Committee, a
Compensation Committee, and a Director Option Plan Committee. There is no
standing nominating committee. Messrs. Jordaan and Stone, both non-management
directors, serve on the Audit Committee, which acts as a liaison between the
Board and the independent auditors, and reviews with them the planning and
scope of financial statement audits, the results of those audits, and the
adequacy of internal accounting controls. It also monitors other corporate and
financial policies. Messrs. Jordaan and Stone also serve on the Stock Option
Plan Committee, which is vested with full authority to select participants,
grant options, determine the number of shares subject to each option, the
exercise price of each option and in general, to make, administer, and
interpret such regulations as it deems necessary to administer the Option Plan.
Mr. Stone serves on the Compensation Committee, which establishes executive
compensation policies and makes recommendations to the Board. Messrs. Jorn
Budde and Rafael Vaquero Bazan serve on the Director Option Plan Committee and
are not eligible to receive options under the plan.
During the fiscal year ending December 31, 1996, the Audit Committee
met two times. The Stock Option Plan Committee met or took action by Unanimous
Consent one time. The Compensation Committee met or took action by unanimous
written consent one time. The Director Option Plan Committee met or took action
by unanimous written consent one time. The entire Board of Directors met or
took action by unanimous written consent seven times. All directors attended
75% or more of the aggregate number of Board meetings and committee meetings.
COMPENSATION OF DIRECTORS
No directors receive cash compensation for serving on the Board except
for reimbursement of reasonable expenses in attending meetings.
1994 Stock Option Plan for Directors. Effective as of April 15, 1994,
the Company's 1994 Stock Option Plan for Directors (the "Directors' Plan") was
approved by the Board, subject to approval by the shareholders of the Company.
Effective as of April 15, 1994, the holders of at least a majority of the
outstanding shares of the Company's common stock executed a written consent
adopting and approving the Directors' Plan.
A maximum of 100,000 shares of Common Stock (subject to certain
anti-dilution adjustments) may be issued upon the exercise of options granted
under the Directors' Plan. The Company has reserved 100,000 shares of Common
Stock for issuance upon exercise of options granted pursuant to the Directors'
Plan, plus additional securities issuable pursuant to the anti-dilution
provisions of the Directors' Plan. Currently, options for 68,000 shares of
Common Stock have been granted under the Directors' Plan to Messrs. Stone,
Jordaan and Camacho, all of which are currently exercisable and outstanding.
The weighted average exercise price of such options is $5.39 per share.
Stock options may be granted under the Directors' Plan to any director
who is not an employee of the Company and is not a holder of more than 1% of
the outstanding shares of the Company's Common Stock or a person who is in
control of such holder.
Independent directors automatically receive an initial grant of
options to purchase 20,000 shares of Common Stock upon their appointment to the
Board. Independent directors automatically receive annual grants of options to
purchase 2,500 shares of Common Stock as of the date following each annual
meeting of the Company's shareholders.
The Director Option Plan Committee (the "Committee") has full and
final authority in its discretion, subject to the provisions of the Directors'
Plan, (a) to prescribe the form or forms of instruments evidencing options
under the Directors' Plan, (b) to adopt, amend and rescind rules and
regulations for the administration of the Directors' Plan, and (c) to interpret
the Directors' Plan and to decide any questions and settle all controversies
and disputes that may arise in connection with the Directors' Plan.
6
<PAGE> 10
The exercise price of options will be at least the fair market value
of a share of the Common Stock on the date of grant. Options granted pursuant
to the Directors' Plan are immediately exercisable. The expiration date of each
option is not more than six years from the date of grant. Payment for shares
purchased upon exercising an option are made in cash or by certified check,
bank draft or money order, or by delivery of previously owned shares of Common
Stock held for at least six months (at their fair market value), or partly in
cash and partly in such common stock.
An optionee does not have any of the rights of a shareholder of the
Company with regard to awards under the Directors' Plan except as to stock
actually received by the director. The Company is not obligated to deliver any
shares of Common Stock until (a) in the opinion of the Company's counsel, all
applicable federal and state laws and regulations have been complied with, (b)
the shares to be delivered have been listed or authorized to be listed upon
official notice of issuance, and (c) all other legal matters in connection with
the issuance of the shares have been approved by the Company's counsel.
Options are not transferable or assignable by an optionee, voluntarily
or by operation of law, other than by will or the laws of descent and
distribution or pursuant to a qualified domestic relations order. Each option
is exercisable, during the optionee's lifetime, only by the optionee, his
guardian or legal representative.
Upon termination of an optionee's status as a director of the Company
for any reason other than death, any and all outstanding options of such
optionee shall be null and void effective as of a date three months after the
date of such termination but shall terminate immediately if the director was
removed for cause or resigned under circumstances which in the opinion of the
Committee casts such discredit on the director as to justify termination of the
options.
The Directors' Plan and any option may be amended or terminated by the
Committee at any time; provided, however, that the Committee may not, without
shareholder approval, increase the aggregate number of shares which may be
issued under options granted pursuant to the Directors' Plan or increase the
number of options granted to eligible directors (other than pursuant to the
anti-dilution provisions), amend the definition of eligible director so as to
enlarge the group of directors eligible to receive options, reduce the price at
which options may be granted, or change or extend the times at which options
may be granted. No such amendment shall adversely affect the rights of any
director under options previously granted without such directors' consent.
7
<PAGE> 11
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the
directors, executive officers and key employees of the Company.
<TABLE>
<CAPTION>
Name Age Position
- ---- --- --------
<S> <C> <C>
Jorn Budde* 53 President, Chief Executive Officer and
Chairman of the Board
Rafael Vaquero Bazan* 42 Executive Vice President, Chief Operating
Officer and Director of UniMark and
President and Chief Executive Officer of
ICMOSA
Eduardo Vaquero Bazan 38 Vice President -- Finance and
Administration of ICMOSA and Director
Jose Martinez Brohez* 54 President and Chief Executive Officer of
GISE and Director
Keith Ford 44 Vice President -- Finance (Chief Accounting
Officer), Secretary and Treasurer
Soren Bjorn 29 Vice President -- Operations
Soren Borre 53 Senior Vice President -- Sales of UniMark
Foods, Inc.
Jeffrey King 37 Senior Vice President -- Marketing of
UniMark Foods, Inc.
Pedro Vaquero Garcia* 70 Director (Honorary Chairman)
Fernando Camacho Casas* 43 Director
Jakes Jordaan* 34 Director
Edward A. Stone* 54 Director
</TABLE>
- -----------
* For information concerning these individuals, see "Election of Directors"
above.
Keith Ford joined UniMark in 1992 as Vice President - Finance,
Secretary and Treasurer. From 1990 until 1992, Mr. Ford served as internal
comptroller and financial advisor of ERS, Inc., a privately-held multi-store
specialty retail company. From 1987 to 1990, Mr. Ford served as comptroller of
Papertech, Inc., a privately-held paper products importer and distributor. Mr.
Ford has a degree in accounting and is a Certified Public Accountant in the
State of Texas.
Soren Bjorn has served as Vice President of Operations of the Company
since May 1996. Mr. Bjorn joined the Company as a Product Manager for its
SUNFRESH(TM) product line in January 1993 and became its Director of Operations
in January 1995. Mr. Bjorn received a Business Administration degree in
Marketing from Baylor University in 1992.
Soren Borre joined UniMark in 1992 as Vice President - Sales. From
1989 until 1992, Mr. Borre served as Director of Sales and Marketing for Katrin
Systems, Inc., an international paper products company.
Jeffrey King joined UniMark in September 1995 as Vice President -
Marketing. From January 1994 until joining UniMark, Mr. King served as Director
of Marketing for Mission Foods, Inc., a manufacturer and distributor of Mexican
food products. From 1992 until 1994, Mr. King served as Director of Marketing
for Jimenez Foods, a division of Milnot Company, a consumer foods product
company. From 1990 until 1992, Mr. King served as a Product manager for Leaf
Corporation, a manufacturer of confectionary products. Mr. King has a Masters
of Management degree from the J.L. Kellogg Graduate School of Management of
Northwestern University.
8
<PAGE> 12
All directors hold office until the next annual meeting of
shareholders or until their successors are elected and qualified. Officers hold
their respective positions until their successors are duly qualified or until
they resign or are removed by the Board of Directors.
COMPENSATION OF EXECUTIVE OFFICERS
The following table discloses compensation received for the three
fiscal years ended December 31, 1996, by the Company's President and Chief
Executive Officer, he being the Company's only executive officer whose total
annual salary and bonus is in excess of $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
---------------------------------------------
OTHER ANNUAL
YEAR SALARY BONUS COMPENSATION(1)
---- ------ ----- ---------------
<S> <C> <C> <C> <C>
Jorn Budde
President and Chief Executive Officer............ 1994 $ 96,000 $-- $--
1995 $120,000 $-- $--
1996 $120,000 $-- $--
</TABLE>
(1) The Company's CEO receives personal benefits in addition to salary and cash
bonuses. The aggregate amount of such personal benefits, however, does not
exceed the lesser of $50,000 or 10% of the total of his annual salary and bonus
reported for any of the named executive officers.
REPORT OF THE UNIMARK GROUP, INC.
BOARD OF DIRECTORS COMPENSATION COMMITTEE
The Company's employee compensation policy is to offer a package
including a competitive salary, competitive benefits, and an efficient
workplace environment. The Company also encourages broad-based employee
ownership of Company Stock through a stock option program in which all
employees are eligible to participate.
The Company's compensation policy for officers is similar to that of
other employees and is designed to promote continued performance and attainment
of corporate and personal goals. More specifically, the Compensation
Committee's objectives are to develop compensation policies which will:
i) Allow the Company to attract and retain qualified individuals;
ii) Encourage achievement of short-term and long-term goals of the
Company; and
iii) Align executive enumeration with the interests of
shareholders by linking a significant portion of executive
compensation to the appreciation of the share price of the
Common Stock.
The Compensation Committee of the Board (composed entirely of a
non-employee director) reviews and approves individual officer salaries, bonus
plan financial performance goals, bonus plan allocations, and stock option
9
<PAGE> 13
grants. The Compensation Committee also reviews guidelines for compensation,
bonus, and stock option grants for non-officer employees.
Officers of the Company are paid salaries in line with their
responsibilities and experience. These salaries are structured to be within the
range of salaries paid by similarly situated executives in similarly
capitalized companies. The Compensation Committee believes that stock option
grants to officers (and other employees) promote success by aligning employee
financial interests with long-term shareholder value.
The Compensation Committee annually reviews and approves the
compensation of Mr. Jorn Budde, the President and Chief Executive Officer. Mr.
Budde has not been granted any stock options. The Compensation Committee
believes Mr. Budde is paid a reasonable salary, although substantially below
salaries paid to executives in similarly capitalized companies based upon a
survey conducted by an independent compensation consultant. However, Mr. Budde
is a significant shareholder in the Company, and to the extent his performance
as President and Chief Executive Officer translates into an increase in the
value of the Company's stock, all shareholders, including him, share the
benefits.
Respectfully submitted
COMPENSATION COMMITTEE
Edward Stone
10
<PAGE> 14
PERFORMANCE GRAPH
The following graph compares the cumulative total return of the
Company's Common Stock to the S&P 500 Index and the S&P Foods Index for the
period during which the Common Stock has been registered under Section 12 of
Securities Exchange Act of 1934.
Note: The UniMark Group, Inc. management consistently cautions that the stock
price performance shown in the graph below should not be considered indicative
of potential future stock price performance. [GRAPHIC OMITTED]
[PERFORMANCE GRAPH]
TOTAL RETURN ANALYSIS
<TABLE>
<CAPTION>
8/12/94 12/30/94 12/29/95 12/31/96
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Unimark Group, Inc. $100.00 $ 98.11 $365.95 $233.50
- -----------------------------------------------------------------------------
S&P Foods Index $100.00 $108.30 $137.54 $163.53
- -----------------------------------------------------------------------------
S&P 500 $100.00 $100.54 $138.75 $169.91
- -----------------------------------------------------------------------------
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
At December 3,1 1996, the sole member of the Compensation Committee
was Mr. Edward Stone. No member of the Compensation Committee was an officer of
the Company at any time during 1996. During 1996, no executive officer of the
Company served as (i) a member of the compensation committee (or other board
committee performing equivalent functions) of another entity, one of whose
executive officers served on the Compensation Committee of the Board of
Directors, (ii) a director of another entity, one of whose executive officers
served on the Compensation Committee of the Board of Directors, or (iii) a
member of the compensation committee (or other board committee performing
equivalent functions) of another entity, one of whose executive officers served
as a director of the Company.
CERTAIN TRANSACTIONS
Effective January 2, 1995, the Company entered into a five year
operating agreement with Industrias Horticolas de Montemorelos, S.A. de C.V.
("IHMSA") to operate a freezing plant located in Montemorelos, Nuevo Leon,
Mexico. Pursuant to the terms of the operating agreement, the Company has
agreed to pay IHMSA an operating fee sufficient to cover the interest payments
on IHMSA's existing outstanding debt. This debt is denominated in U.S. dollars
and has an outstanding principal amount of approximately $4,600,000. Interest
on this debt is charged at variable rates ranging
11
<PAGE> 15
from 9.8% to 15.5%. The Company is responsible for all raw material and
operating costs and the sale of the finished goods produced at the IHMSA plant.
Payments made pursuant to the operating agreement were $116,000 during the year
ended December 31, 1996. During the term of the operating agreement, the
Company has the right of first refusal to buy the IHMSA facility at its then
fair market value. The Vaquero family owns an approximate 8% interest in IHMSA.
The Company believes that said arrangement is no less favorable to the Company
than would be available from unrelated third parties.
In November, 1995, the Company entered into a lease agreement with
Loma Bonita Partners, a Texas general partnership, for approximately 200
hectares (approximately 494 acres) of land located in Loma Bonita, Veracruz,
Mexico for the development of citrus groves. The lease commenced in December,
1995 and expires in ten years. Messrs. Jorn Budde and Rafael Vaquero are the
two general partners of Loma Bonita Partners. Rent expense on this lease was
$68,870 for the year ended December 31, 1996. The Company believes that said
lease agreement is on terms no less favorable to the Company than would be
available from unrelated third parties.
The Company operates a 144 acre grapefruit grove located close to the
ICMOSA plant in Montemorelos pursuant to a ten year operating agreement that
expires in 2000. Per the agreement, the Company operates the grove and
purchases all the grapefruit produced at a formula price tied to purchases from
unrelated third parties. During fiscal 1996, the Company purchased
approximately $130,000 of grapefruit pursuant to this agreement. The grove is
owned by a partnership that consists primarily of shareholders of Azteca. The
Vaquero family collectively owns an approximate 14.3% interest in this
partnership. The Company believes that said arrangement is on terms no less
favorable to the Company than would be available from unrelated third parties.
The Company leases its corporate office facility from an entity
controlled by Mr. Budde. Rent expense on this lease was approximately $98,250
for the year ended December 31, 1996. The Company believes that said
arrangement is on terms no less favorable to the Company than would be
available from unrelated third parties.
During 1996, the Company paid Jordaan, Howard and Pennington, PLLC an
amount of $299,723 for legal services rendered. Mr. Jordaan, a director of the
Company, is a member of Jordaan, Howard & Pennington, PLLC. The Company
believes that said arrangement is on terms no less favorable to the Company
than would be available from unrelated third parties.
FUTURE TRANSACTIONS
Although the Company intends that the terms of any future transactions
and agreements between the Company and its directors, officers, principal
shareholders or other affiliates will be no less favorable than could be
obtained from unaffiliated third parties, no assurances can be given in this
regard. Any such future transactions that are material to the Company and are
not in the ordinary course of business will be approved by a majority of the
Company's independent and disinterested directors.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires officers
and directors of the Company, and persons who own beneficially greater than ten
percent of the Common Stock of the Company ("ten-percent beneficial owners"),
to file with the Securities and Exchange Commission and the NASDAQ Stock Market
initial reports of beneficial ownership and reports of changes in beneficial
ownership of Common Stock on Forms 3, 4, and 5. Reporting parties are required
by regulation to furnish the Company with copies of all Section 16(a) reports.
To the Company's knowledge, all Section 16(a) filing requirements
applicable to its officers, directors, and ten-percent beneficial owners were
complied with in 1996 with the following exceptions. Mr. Pedro Vaquero Garcia
failed to file a Form 4 to report the acquisition of 60,000 shares of Common
Stock and Mr. Jose Martinez Brohez failed to file a Form 3 and a Form 4 on two
occasions to report the acquisition of 44,120 shares of Common Stock.
12
<PAGE> 16
PROPOSAL NO. 2:
PROPOSAL FOR AMENDMENT TO
THE COMPANY'S 1994 EMPLOYEE STOCK OPTION PLAN
TO RESERVE AN ADDITIONAL 340,000 SHARES OF
COMMON STOCK FOR ISSUANCE THEREUNDER
On April 15, 1994, the shareholders of the Company approved the Option
Plan. The Company is presently authorized to issue 480,000 shares of Common
Stock upon exercise of the options granted under the Option Plan. As of April
1, 1997, options to acquire 339,500 were outstanding under the Option Plan and
89,500 shares of Common Stock were available for future grant.
If the shareholders approve the amendment, 429,500 shares of Common
Stock will be available for grant under the Option Plan. The shareholders will
be requested at the meeting to approve an amendment to Section 4.(a) of the
Option Plan which increases by 340,000 the number of shares that may be issued
under the Option Plan. The amended section will read as follows:
(a) Subject to the provisions of Section 10 relating to
adjustments upon changes in stock, the stock that may be sold pursuant
to Options shall not exceed in the aggregate 820,000 shares of the
Company's Common Stock. If any Option shall otherwise expire or
terminate without having been exercised in full, the stock not
purchased under such Option shall revert to and again become available
for issuance under the Plan.
The purpose of the Option Plan is to promote Company success by
aligning employee financial interests with long-term shareholder value. The
Board believes that the number of shares remaining available for issuance will
be insufficient to achieve the purpose of the Option Plan over the term of the
plan unless the additional shares are authorized. A copy of the Option Plan as
proposed to be amended may be obtained upon written request to the Company's
Investor Relations Department at the address listed on page 17.
FEDERAL INCOME TAX CONSEQUENCES RELATING TO THE OPTION PLAN
The federal income tax consequences of an employee participating in
the Option Plan are complex and subject to change. The following discussion,
which has been prepared by the law firm of Jordaan, Howard & Pennington, PLLC,
counsel to the Company, is only a summary of the general rules applicable to
the Option Plan. Employees should consult their own tax advisors since a
taxpayer's particular situation may be such that some variation of the rules
described below will apply.
INCENTIVE STOCK OPTIONS
If an option granted under the Option Plan is treated as an incentive
stock option, the optionee will not recognize any income upon either the grant
or the exercise of the option, and the Company will not be allowed a deduction
for federal tax purposes. Upon a sale of the shares, the tax treatment of the
optionee and the Company will depend primarily upon whether the optionee has
met certain holding period requirements at the time he or she sells the shares.
In addition, as discussed below, the exercise of an incentive stock option may
subject the optionee to alternative minimum tax liability.
If an optionee exercises an incentive stock option and does not
dispose of the shares received within two years after the date of such option
or within one year after the transfer of the shares to him or her, any gain
realized upon the disposition will be characterized as a long-term capital gain
and, in such case, the Company will not be entitled to a federal tax deduction.
13
<PAGE> 17
If the optionee disposes of the shares either within two years after
the date the option is granted or within one year after the transfer of the
shares to him or her, such disposition will be treated as a disqualifying
disposition and an amount equal to the lesser of (1) the fair market value of
the shares on the date of exercise minus the purchase price, or (2) the amount
realized on the disposition minus the purchase price, will be taxed as ordinary
income to the optionee in the taxable year in which the disposition occurs.
(However, in the case of gifts, sales to related parties, and certain other
transactions, the full difference between the fair market value of the stock
and the purchase price will be treated as compensation income). The excess, if
any, of the amount realized upon disposition over the fair market value at the
time of the exercise of the option will be treated as long-term capital gain if
the shares have been held for more than one year following the exercise of the
option. In the event of a disqualifying disposition, the Company may withhold
income taxes from the optionee's compensation with respect to the ordinary
income realized by the optionee as a result of the disqualifying disposition.
The exercise of an incentive stock option may subject an optionee to
alternative minimum tax liability because the excess of the fair market value
of the shares at the time an incentive option is exercised over the purchase
price of the shares is included in income for purposes of the alternative
minimum tax even though it is not included in taxable income for purposes of
determining the regular tax liability of an employee. Consequently, an optionee
may be obligated to pay alternative minimum tax in the year he or she wishes to
exercise an incentive stock option.
In general, there will be no federal income tax deductions allowed to
the Company upon the grant, exercise, or termination of an incentive stock
option plan. However, in the event an optionee sells or disposes of stock
received on the exercise of an incentive stock option in a disqualifying
disposition, the Company will be entitled to a deduction for federal income tax
purposes in an amount equal to the ordinary income, if any, recognized by the
optionee upon distribution of the shares, provided that the deduction is not
otherwise disallowed under the Code.
NONQUALIFIED STOCK OPTIONS
Nonqualified stock options granted under the Option Plan do not
qualify as "incentive stock options" and will not qualify for any special tax
benefits to the optionee. An optionee generally will not recognize any taxable
income at the time he or she is granted a nonqualified option. However, upon
its exercise, the optionee will recognize ordinary income for federal tax
purposes measured by the excess of the then fair market value of the shares
over the exercise price. The income realized by the optionee will be subject to
income and other employee withholding taxes.
The optionee's basis for determination of gain or loss upon the
subsequent disposition of shares acquired upon the exercise of a nonqualified
stock option will be the amount paid for such shares plus any ordinary income
recognized as a result of the exercise of such option. Upon disposition of any
shares acquired pursuant to the exercise of a nonqualified stock option, the
difference between the sale price and the optionee's basis in the shares will
be treated as a capital gain or loss and generally will be characterized as
long-term capital gain or loss if the shares have been held for more than one
year at their disposition.
In general, their will be no federal income tax deduction allowed to
the Company upon the grant or termination of a nonqualified stock option or a
sale or disposition of the shares acquired upon the exercise of a nonqualified
stock option. However, upon the exercise of a nonqualified stock option, the
Company will be entitled to a deduction for federal income tax purposes equal
to the amount of ordinary income that an optionee is required to recognize as a
result of the exercise, provided that the deduction is not otherwise disallowed
under the Code.
14
<PAGE> 18
VOTE REQUIRED AND BOARD RECOMMENDATION
The affirmative vote of holders of a majority of the shares of common
stock represented at the meeting is required to approve the amendment to the
Option Plan. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL.
PROPOSAL NO. 3: AUTHORIZATION OF PREFERRED STOCK
GENERAL
The Board of Directors has determined that it is in the best interest
of the Company and the shareholders to amend the Articles of Incorporation to
provide for a class of preferred stock (the "Preferred Stock"). The Board of
Directors has approved and adopted an amendment to the Articles of
Incorporation to allow the Board of Directors to create a class of Preferred
Stock and to authorize 5,000,000 shares to be issued thereunder. The full text
of the amended Article Four is set forth as follows:
The aggregate number of shares that the Company shall have the
authority to issue is twenty five million (25,000,000) shares,
consisting of twenty million (20,000,000) shares of Common Stock,
$0.01 par value per share, and five million (5,000,000) shares of
Preferred Stock, $0.01 par value per share.
The Preferred Stock may be issued from time to time in one or more
series; provided, however, that all shares of the same series shall be
identical in all respects. The Board of Directors is hereby authorized
to fix by resolution or resolutions, the designations, preferences,
limitations and relative rights, including voting rights, of the
shares of any series so established. Any of the designations,
preferences, limitations, and relative rights, including voting
rights, of any series may be made dependent upon facts ascertainable
outside these Articles of Incorporation, which facts may include
future acts of the Company, provided that the manner in which such
facts shall operate upon the designations, preferences, limitations,
and relative rights, including voting rights, of such series is
clearly and expressly set out in the resolution or resolutions
establishing the series of Preferred Stock. The Board of Directors is
further authorized to increase or decrease the number of shares within
each such series; provided, however, that the Board of Directors may
not decrease the number of shares within a series to less than the
number of shares within such series that are then issued. In case the
number of shares of a series shall be so decreased, the shares by
which the series is decreased shall resume the status of authorized
but unissued shares of the class of shares from which such series was
established. If no shares of a series of Preferred Stock established
by the Board of Directors are outstanding, the Board of Directors
shall have authority to eliminate such series, and the shares of such
eliminated series shall resume the status of authorized but unissued
shares of the class of shares from which such series was established.
PURPOSE AND EFFECT OF THE SERIES OF PREFERRED STOCK
The Company's Articles of Incorporation currently do not authorize the
issuance of any shares of Preferred Stock. The Board of Directors believes that
a class of Preferred Stock will add flexibility to the Company's capital
structure by allowing the Company to issue preferred stock for such purposes as
the public or private sale of Preferred stock for cash as a means of obtaining
additional capital for use in the Company's business and operations, and
issuance of Preferred Stock as part or all of the consideration required to be
paid by the Company for acquisitions of other businesses or properties. If the
proposed amendment is approved, the Board will be empowered to authorize the
issuance of the Preferred Stock from time to time for any proper corporate
purpose without the delay and expense of seeking shareholder approval each
time, unless required by applicable laws or regulations or stock exchange
rules. The Company does not currently have any agreements, understandings or
arrangements which would result in the issuance of any shares of Preferred
Stock.
15
<PAGE> 19
The amendment would authorize the Board to determine, among other
things, with respect to each series of Preferred Stock that may be issued: (a)
the distinctive designation and number of shares constituting such series; (b)
whether, and upon what terms and conditions, the shares of that series would be
redeemable; (c) whether dividends would be cumulative, noncumulative, or
partially cumulative; (d) whether the shares will have preference over any
other class, classes or series of shares as to the payment of dividends; (e)
whether the shares will have preference in the assets of the Company over any
other class, classes or series of shares upon the voluntary or involuntary
liquidation of the Company; (f) whether, and upon what terms and conditions the
shares of that series would be exchangeable, at the option of the Company, the
shareholder or another person, or upon the occurrence of a designated event,
for shares, obligations, indebtedness, evidence of ownership, rights to
purchase securities of the Company or one or one or more other domestic
corporations or entities, or for other property, or for any combination of the
foregoing; (g) whether, and upon what terms and conditions, the shares of that
series would be convertible into shares of any other class or series; (h)
whether the holders of such securities would have voting rights and the extent
of those voting rights; and (i) whether any of the designations, preferences,
limitations, and relative rights, including voting rights, of that series is
dependent upon facts ascertainable upon facts outside the Articles of
Incorporation; provided, however, that the manner in which such facts operate
upon the series of shares must be clearly and expressly set forth. Each series
of Preferred Stock could, as determined by the Board at the time of issuance,
rank, with respect to dividends and redemption and liquidation rights, senior
to the Company's Common Stock. Holders of the Company's Common Stock have no
preemptive right to purchase or otherwise acquire any Preferred Stock that may
be issued in the future.
It is not possible to state the precise effect of the authorization of
the Preferred Stock upon the rights of holders of Common Stock until the Board
of Directors determines the respective preferences, limitations and relative
rights of the holders of one or more series of the Preferred Stock. However,
such effect might include: (a) reduction of the amount otherwise available for
payment of dividends on Common Stock, to the extent dividends are payable on
any issued shares of Preferred Stock, and restrictions on dividends on Common
Stock if dividends on the Preferred Stock are in arrears; (b) dilution of the
voting power of the Common Stock to the extent that the Preferred Stock has
voting rights; and (c) the holders of Common Stock not being entitled to share
in the Company's assets upon liquidation until satisfaction of any liquidation
preference granted to the Preferred Stock.
The authorization of Preferred Stock may be viewed as having the
effect of discouraging an unsolicited attempt by another person or entity to
acquire control of the Company. Issuances of authorized preferred shares can be
implemented, and have been implemented by some companies in recent years with
voting or conversion privileges intended to make acquisition of the Company
more difficult or more costly. Such an issuance could discourage or limit the
shareholders' participation in certain types of transactions that might be
proposed (such as a tender offer), whether or not such transactions were
favored by the majority of the shareholders, and could enhance the ability of
officers and directors to retain their positions.
VOTE REQUIRED AND BOARD RECOMMENDATION
The affirmative vote of holders of sixty-six and two-thirds percent
(66-2/3%)of the issued and outstanding shares of Common Stock is required to
approve the amendment of the Company's Articles of Incorporation authorizing
the creation of 5,000,000 shares of Preferred Stock. THE BOARD OF DIRECTORS
RECOMMENDS A VOTE FOR THE PROPOSAL.
PROPOSAL NO. 4: SELECTION OF INDEPENDENT AUDITORS
Since 1992, the firm of Ernst & Young LLP, independent auditors, has
examined and reported on the financial statements of the Company. The Board of
Directors, upon recommendation of the Audit Committee, has appointed Ernst &
Young LLP as independent auditors to examine and report on the financial
statements of the Company for the fiscal year ending December 31, 1997.
During the year ended December 31, 1996, Ernst & Young LLP provided
the Company with audit services, including examinations of and reporting on the
Company's consolidated financial statements, and certain accounting
16
<PAGE> 20
advisory services. Representatives of Ernst & Young LLP are expected to be
present at the Annual Meeting and will have the opportunity to make any
statements they may desire. They also will be available to respond to
appropriate questions of the stockholders.
Ratification of the appointment of Ernst & Young LLP as independent
auditors requires the affirmative vote of the holders of a majority of the
shares of Common Stock present in person or represented by proxy at the Annual
Meeting. If the appointment is not approved, the Board of Directors will select
other independent accountants. VOTE REQUIRED AND BOARD RECOMMENDATION
The affirmative vote of holders of a majority of the shares of common
stock represented at the meeting is required to approve the Ratification of the
appointment of Ernst & Young LLP as independent auditors. THE BOARD OF
DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL.
PROPOSALS OF SHAREHOLDERS
Proposals of shareholders intended to be presented at the 1998 Annual
Meeting of Shareholders must be received by the Company no later than December
28, 1997 to be included in the Company's Proxy Statement and form of proxy
related to that meeting.
OTHER MATTERS
The Board does not intend to bring any other business before the
meeting, and so far as is known to the Board, no matters are to be brought to
the meeting except as specified in the notice of the meeting. However, as to
any other business which may properly come before the meeting, it is intended
that the proxies, in the form enclosed, will be voted in respect thereof in
accordance with the judgment of the persons voting such proxies.
DATED: Argyle, Texas, May 1, 1997.
A COPY OF THE COMPANY'S FORM 10-K REPORT FOR THE FISCAL YEAR ENDING
DECEMBER 31, 1996, CONTAINING INFORMATION ON OPERATIONS, FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION, IS AVAILABLE UPON REQUEST. PLEASE WRITE TO:
INVESTOR RELATIONS DEPARTMENT
THE UNIMARK GROUP, INC.
P.O. BOX 229
ARGYLE, TEXAS 76226
17
<PAGE> 21
PROXY SOLICITED BY THE UNIMARK GROUP, INC.'S BOARD OF DIRECTORS FOR ANNUAL
MEETING OF SHAREHOLDERS OF THE UNIMARK GROUP, INC.
The undersigned hereby (a) acknowledges receipt of Notice of Annual
Meeting of Shareholders to held on June 6, 1997, at 10:00 a.m. (Dallas, Texas
Time) and the Proxy Statement in connection therewith, each dated May 1, 1997,
(b) appoints each of Jorn Budde and Keith Ford the proxy and attorney-in-fact
for the undersigned, with full power of substitution, (c) authorizes the
Proxies to represent and vote on behalf of the undersigned, as designated
below, at the Annual Meeting of Shareholders and at any adjournments or
postponements thereof, all shares of the Common Stock, $.01 par value, of The
UniMark Group, Inc.(the "Company") standing in the name of the undersigned or
which the undersigned may be entitled to vote and (d) revokes any proxies
heretofore given.
1. Election of directors.
[ ] FOR all nominees listed below for the terms shown (except as
indicated to the contrary below)
Name
----
Jorn Budde
Rafael Vaquero Bazan
Eduardo Vaquero Bazan
Jose Martinez Brohez
Pedro Vaquero Garcia
Fernando Camacho Casas
Jakes Jordaan
Edward A. Stone
[ ] WITHHOLD AUTHORITY to vote for all the nominees above.
Instructions: To withhold authority for any individual
nominee or nominees, strike a line through that nominee's name.
Unless authority to vote for all the foregoing nominees is withheld,
this proxy will be deemed to confer authority to vote for every
nominee whose name is not struck.
2. Approval of the proposal to amend to the Company's 1994 Employee Stock
Option Plan to reserve an additional 340,000 shares of common stock
for issuance thereunder.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Approval of the proposal to amend the Company's Articles of
Incorporation to authorize a new class of Preferred Stock.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. Approval of the proposal to ratify the selection of Ernst & Young LLP
as the Company's independent public accountants for the fiscal year
ending December 31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS SPECIFIED. IF NO
SPECIFICATION IS INDICATED THIS PROXY WILL BE VOTED FOR THE ADOPTION AND
APPROVAL OF PROPOSALS 1, 2, 3, AND 4, AND ON ANY OTHER BUSINESS, IN THE
DISCRETION OF THE PROXIES.
(PLEASE SIGN AND DATE THIS CARD ON THE REVERSE SIDE)
<PAGE> 22
IMPORTANT. Please date sign exactly as the name appears below.
When shares are held by joint tenants, both
should sign. When signing as attorney,
executor, administrator, trustee or
guardian, please give full title as such.
If a corporation, please sign in full
corporate name by president or other
authorized officer. If a partnership,
please sign in partnership name by
authorized person.
Dated ____________________________, 1997
________________________________________
Signature
________________________________________
Signature (if held jointly)
PLEASE SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY USING THE ENCLOSED
POSTAGE-PAID ENVELOPE.
