<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
<TABLE>
<S> <C>
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 Section 240.14a-12
</TABLE>
The UniMark Group, Inc.
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(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than 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)(4) 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.
<PAGE> 2
[ ] 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:
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(4) Date Filed:
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<PAGE> 3
THE UNIMARK GROUP, INC.
124 MCMAKIN ROAD
BARTONVILLE, TEXAS 76226
October 27, 1998
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 Crowne
Plaza Hotel, 14315 Midway Road, Dallas, Texas, 75244, on November 20, 1998, 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,
/s/ SOREN BJORN
Soren Bjorn
President and Chief Executive Officer
<PAGE> 4
THE UNIMARK GROUP, INC.
124 MCMAKIN ROAD
BARTONVILLE, TEXAS 76226
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
OCTOBER 27, 1998
To the Shareholders:
The annual meeting of the shareholders of The UniMark Group, Inc.
(the" Company") will be held at the Crowne Plaza Hotel, 14315 Midway Road,
Dallas, Texas, 75244, Dallas, Texas, on November 20, 1998, at 10:00 a.m.
(Dallas, Texas time) for the following purposes:
1. To elect ten (10) directors to serve on the Company's Board of
Directors;
2. To ratify the selection of Ernst & Young LLP as the Company's
independent public accountants for the fiscal year ending
December 31, 1998; and
3. To transact such other business as may properly come before
the meeting.
Only the shareholders of record at the close of business on October
26, 1998 are entitled to notice of, and to vote at, this Annual Meeting or any
adjournment thereof.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ KEITH FORD
Keith Ford
Vice President -- Finance, Chief
Accounting Officer, Secretary
and Treasurer
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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.
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<PAGE> 5
THE UNIMARK GROUP, INC.
124 MCMAKIN ROAD
BARTONVILLE, TEXAS 76226
PROXY STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 20, 1998
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
Crowne Plaza Hotel, 14315 Midway Road, Dallas, Texas, 75244, Dallas, Texas, on
November 20, 1998, 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 Soren Bjorn 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 October 27, 1998, to all shareholders of record on October 26, 1998.
Shares of the Company's common stock, par value $.01 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 11,938,326 shares of Common Stock
outstanding on October 26, 1998, will be entitled to one vote for each share
held on all matters coming before the Annual Meeting.
<PAGE> 6
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 a majority of the shares of Common Stock present is
required with respect to Proposal No. 1 and No. 2. 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 and
No. 2.
ANNUAL REPORT
The annual report for the Company's fiscal year ended December 31,
1997, including audited financial statements, is being furnished with this
Proxy Statement to shareholders of record as of October 26, 1998. The annual
report does not constitute a part of the proxy solicitation materials.
2
<PAGE> 7
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
<TABLE>
<CAPTION>
NAMES AS OF THE RECORD DATE PERCENT OF CLASS (1)
- ----- --------------------- --------
<S> <C> <C>
Executive Officers and Directors:
Soren Bjorn (2) 54,800 *
Rafael Vaquero Bazan (3) 726,236 6.08
Eduardo Vaquero Bazan (3) 542, 981 4.55
Fernando Camacho Casas (3)(4) 804,065 6.72
Jakes Jordaan (5) 56,700 *
Jose Martinez Brohez (3)(11) 584,120 4.88
Federico Chavez Peon (6)(10) 5,305,500 38.06
Luis A. Chico Pardo (6)(10) 5,305,500 38.06
Jose I. de Abiega Pons (6)(10) 5,305,500 38.06
Executive Officers and Directors
as a group (11 persons) (7) 6,709,402 47.53
Other Executive Officers and Directors:
Edward A. Stone (8) 9,500 *
Jorn Budde (9) 27,894 *
Pedro Vaquero Garcia (3)(8) 563,878 4.72
OTHER FIVE PERCENT HOLDERS:
- ---------------------------
M&M Nominee L.L.C. (10) 5,305,500 38.06
</TABLE>
- ----------------
*Less than 1%
(1) In calculating the percentage of total class ownership, the number of
outstanding shares used was 11,938,326. This number does not include:
(i) 447,500 shares of Common Stock issuable upon exercise of currently
outstanding options granted under the Company's 1994 Employee Stock
Option Plan (the "Employee Stock Option Plan"); (ii) 55,000 shares of
Common Stock issuable upon exercise of currently outstanding options
granted under the Company's 1994 Stock Option Plan for Directors (the
"Directors' Stock Option 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) Includes 49,000 shares of Common Stock underlying presently
exercisable stock options.
(3) Includes 500,000 shares of Common Stock
held by Asesoria Garza Jasso, S.C., a Mexican entity of which he is a
general partner. He shares voting and investment power with all other
general partners of such entity.
(4) Includes 206,565 shares of Common Stock held by Agros, a Mexican
entity of which Mr. Camacho Casas is a
managing director, and includes 27,500 shares of Common Stock
underlying presently exercisable stock options. Mr. Camacho Casas
disclaims beneficial ownership of the Agros shares.
(5) Includes 27,500 shares of Common Stock underlying presently
exercisable stock options.
3
<PAGE> 8
(6) Includes 3,305,500 shares of Common Stock and an additional 2,000,000
shares of Common Stock underlying presently exercisable stock options
owned by M & M Nominee L.L.C. He disclaims beneficial ownership of
such securities.
(7) Includes 2,179,000 shares of Common Stock underlying presently
exercisable stock options. Does not include shares beneficially owned
by Messrs. Stone, Budde and Pedro Vaquero, who resigned from the
Company and were neither a Director nor an executive officer of the
Company at the record date.
(8) Messrs. Stone and Pedro Vaquero resigned as Directors of the Company
during the 1997 fiscal year.
(9) Mr. Budde, the Company's former President and Chief Executive Officer
is the sole "named executive officers" because none of the Company's
four other highest paid executive officers have total annual salaries
and bonuses in excess of $100,000. Mr. Budde resigned from the Company
in February 1998.
(10) On July 17, 1998, the Company sold 3,305,500 newly issued shares of
Common Stock and issued 2,000,000 options to acquire 2,000,000 shares
of Common Stock to M & M Nominee L.L.C. (the "Mexico Strategic
Advisors Transaction"). M & M Nominee L.L.C. ("M & M") is owned 80% by
Mexico Strategic Investment Fund Ltd. ("MSIF"), and 20% by Madera LLC
("Madera"). M&M's principal business is investment in securities.
Mexico Strategic Advisors LLC's ("Mexico Strategic Advisors")
principal business is to serve, pursuant to contract, as the principal
investment manager to MSIF and Madera. The principal business of each
of MSIF and Madera is investment in securities. Mexico Strategic
Advisors's contract with MSIF and Madera (the "Advisory Contract")
provides that Mexico Strategic Advisors is responsible for making
decisions relating to the acquisition, voting and disposition of
securities on behalf of MSIF and Madera, to the extent that the assets
of each have been allocated to Mexico Strategic Advisors pursuant to
the Advisory Contract.
The business of Mexico Strategic Advisors is subject to the direction
of a Board of Advisors, which is responsible for the investment
decisions made by Mexico Strategic Advisors with respect to securities
held for the accounts of MSIF and Madera. The following individuals
are the members of the Board of Advisors of Mexico Strategic Advisors:
(1) Fernando Chico Pardo, Manager of Mexico Strategic Advisors and
Partner of Promecap, S.C.; (2) Jose Ignacio de Abiega Pons, Associate
of Promecap, S.C.; (3) Juan Marco Gutierrez Wanless, Associate of
Promecap, S.C.; (4) Gary Gladstein, Managing Director of Soros Fund
Management LLC; and (5) Richard Katz, a private investor.
Pursuant to regulations promulgated under Section 13(d) of the
Securities Exchange Act of 1934, Mexico Strategic Advisors, pursuant
to the provisions of the Advisory Contract, may be deemed a
beneficial owner of securities, including the Common Stock and
options, held for the account of M & M (as a result of the contractual
authority of Mexico Strategic Advisors with MSIF and Madera to
exercise voting and dispositive power with respect to such
securities).
Except to the extent that information is believed to be otherwise
known by the Company, the information given is as of July 7, 1998, as
reported by Mexico Strategic Advisors in its Schedule 13D filed with
the Securities and Exchange Commission and as amended on July 23,
1998. Includes 2,000,000 shares of Common Stock underlying presently
exercisable stock options.
(11) Includes 40,000 shares of Common Stock underlying presently
exercisable stock options.
4
<PAGE> 9
PROPOSAL NO. 1: ELECTION OF DIRECTORS
Ten 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. Five of the ten 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.
In February 1998, Jorn Budde resigned as a director and executive
officer of the Company. In December 1997, Edward Stone resigned as a director
of the Company. Also in 1997, Pedro Vaquero Garcia resigned as a director of
the Company. Pursuant to the Mexico Strategic Advisors Transaction, the Board
of Directors increased the number of directors from eight to ten and M & M
appointed M & M nominees to fill three of the five vacancies existing on the
Board of Directors. On September 24, 1998, Soren Bjorn was appointed to the
Board of Directors. In addition, the Board of Directors has nominated Jerry W.
Johnson to fill the remaining vacancy on the Board of Directors.
The nominees for the directors of the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE DIRECTOR SINCE
- ---- --- --------------
<S> <C> <C>
Rafael Vaquero Bazan (5) 43 1992
Eduardo Vaquero Bazan 39 1994
Jose Martinez Brohez (5) 55 1996
Fernando Camacho Casas (2)(3)(6) 44 1994
Jakes Jordaan (1)(3)(6) 37 1994
Federico Chavez Peon (1)(2)(3)(4)(5)(6) 32 1998
Luis A. Chico Pardo 58 1998
Jose I. De Abiega Pons 36 1998
Soren Bjorn (4)(5) 31 1998
Jerry W. Johnson 59 --
</TABLE>
- ----------------
(1) Members of the Audit Committee.
(2) Members of the Stock Option Plan Committee.
(3) Members of the Compensation Committee.
(4) Members of the Director Option Plan Committee.
(5) Members of the Executive Committee.
(6) Members of the Nominating 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
Rafael Vaquero Bazan is a co-founder of the Company and has served as a
director since its inception in 1992. Mr. Vaquero serves as Chief Operating
Officer of the Company. From February 1998 to August of 1998, Mr. Vaquero
served as President and Chief Executive Officer of the Company. Mr. Vaquero
served as Vice-President of the Company from 1992 to 1996, and served as the
Company's Executive Vice-President and Chief Operating Officer from 1996 to
1998. 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
5
<PAGE> 10
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 Directors 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
also serves on the Board of Directors 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.
Fernando Camacho Casas has served as a director of the Company since
December 1994. Since September 1992, Mr. Camacho Casas 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 Casas served as an
economist for Probursa, S.A., a large Mexican investment and securities
brokerage firm. Mr. Camacho Casas 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 & 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.
Federico Chavez Peon is a Director of Promecap, S.C., a financial
advisory services firm for MSIF. From 1996 until 1997, Mr. Chavez Peon served
as Risk Chief Director of Banco Santander Mexicano, S.A., an affiliate of Banco
Santander, S.A., one of the most important financial institutions worldwide.
From 1991 until 1996, Mr. Chavez Peon served as Corporate Banking Director of
Banco Mexicano, S.A. an affiliate of Grupo Financiero InverMexico, S.A. de C.V.,
a leading financial institution in Mexico at that time. From 1987 until 1991,
Mr. Chavez Peon served in various positions in the Corporate Banking Area of
Casa de Bolsa Inverlat, one of the leading brokerage firms in Mexico at that
time. Mr. Chavez Peon obtained a degree in Industrial Engineering at the
National University of Mexico. Mr. Chavez Peon has been appointed as a Director
of the Company pursuant to the Mexico Strategic Advisors Transaction.
Luis A. Chico Pardo is a Director of Promecap, S. C., a financial
advisory services firm for Mexico Strategic Investment Fund Ltd. Mr. Chico
served as Vice President of the Mexican Banking Association and as a member of
the National Securities Commission. From 1982 until 1988, Mr. Chico served as
Chief Executive Officer of Banco BCH, a Mexican credit corporation. From 1977
until 1978,
6
<PAGE> 11
Mr. Chico served as Director of Public Sector Credit at Mexico's
Secretariat of Finance and Public Credit. From 1964 until 1977, Mr. Chico acted
as Deputy Manager of the International Division of Banco de Mexico (the nation's
central bank) and was a member of the Technical Committee of FOMEX, which was a
public institution responsible for promoting exports of manufactured products.
Mr. Chico obtained a degree in Law and Economics at the National University of
Mexico, from which he graduated with honors in 1963. Mr. Chico obtained a
master's degree in Economics from the London School of Economics and Political
Science. Mr. Chico Pardo has been appointed as a Director of the Company
pursuant to the Mexico Strategic Advisors Transaction.
Jose I. De Abiega Pons is a Director of Promecap, S.C., a financial
advisory services firm for Mexico Strategic Investment Fund Ltd. From 1992 to
1997, Mr. De Abiega served as Deputy Managing Director, responsible for
international and trading affairs, for Banco Santander Mexicano, one of Mexico's
largest financial institutions. From 1989 to 1991, Mr. De Abiega served as
financial advisor for Santander Management, Inc., a subsidiary of Grupo
Santander, responsible for the investment decisions of its Emerging Mexico Fund.
From 1987 to 1989, Mr. De Abiega served as Chief Executive Officer of Ingenieria
Cambiaria Casa de Cambio, a foreign exchange operator in Mexico. From 1984 to
1987, Mr. De Abiega served as Chief Operating Officer of Inverworld, Inc., a
licensed broker dealer in San Antonio, Texas. Mr. De Abiega obtained a degree
in Industrial Engineering at the Anahuac University of Mexico. Mr. Abiega Pons
has been appointed as a Director of the Company pursuant to the Mexico Strategic
Advisors Transaction.
Soren Bjorn has served as a Director of the Company since September
1998 and as the President and Chief Executive Officer of the Company and of
UniMark Foods, Inc. since August 1998. In addition, he serves as Vice President
of UniMark Foods Europe, Ltd., and as President of Simply Fresh Fruit, Inc., and
UniMark International. From 1996 to August 1998, Mr. Bjorn served as Vice
President of Operations of the Company. From 1997 to August of 1998, Mr. Bjorn
served as Executive Vice President and Chief Operating Officer of UniMark Foods,
Inc. From 1995 to 1996, Mr. Bjorn served Director of Operations for UniMark
Foods, Inc. , and from 1993 to 1995, he served as Product Manager for UniMark
Foods, Inc.'s SUNFRESH(RM) product line. Mr. Bjorn received a master's degree in
Business Administration from Texas Christian University in 1997, and a Business
Administration degree in Marketing from Baylor University in 1992.
Jerry W. Johnson is a Professor in the Marketing Department of the
Hankamer School of Business, Baylor University, Waco, Texas, from 1974 to the
present. Mr. Johnson also has served as Chairperson of the Department of
Marketing of the Hankamer School of Business from 1992 to the present. Mr.
Johnson is a partner at Johnson, Moore, Kelly and Associates, a consulting firm
primarily focused on economic revitalization of downtown areas, bank marketing
programs and business location feasibility studies. From 1970 to 1974, Mr.
Johnson served as Associate Vice President for Business Affairs for the
University of Arkansas System. From 1969 to 1970, Mr. Johnson served as
Director of Economic Analysis for the Planning Consultants firm James A. Vizzier
in Fayetteville, Arkansas. Mr. Johnson has authored a number of publications
focused on business, marketing and management, and has presented similar topics
at various seminars.
INFORMATION REGARDING THE BOARD AND ITS COMMITTEES
Executive Committee. Messrs. Rafael Vaquero, Martinez Brohez, Bjorn
and Chavez Peon serve on the Executive Committee. The Executive Committee was
established during fiscal 1998 to review any changes in market conditions, any
adjustments to the corporate strategies, any opportunities that may arise,
review monthly financial statements comparing them to the budget, identify
problems, report and make recommendations to the Board of Directors.
Audit Committee. Messrs. Jordaan and Chavez Peon currently serve on
the Audit Committee. Mr. Stone served on the Audit Committee until his
resignation as a director of the company in December 1997. The function of the
Audit Committee is to act as a liaison between the Board of Directors and the
7
<PAGE> 12
independent auditors, and review 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.
Stock Option Plan Committee. Messrs. Chavez Peon and Camacho Casas
currently serve on the Stock Option Plan Committee. Mr. Stone served on the
Stock Option Plan Committee until his resignation as a director of the company
in December 1997. The Stock Option Plan Committee 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
interpret such regulations as it deems necessary to administer the Company's
Employee Stock Option Plan.
Compensation Committee. Messrs. Jordaan, Chavez Peon and Camacho
Casas currently serve on the Compensation Committee. Mr. Stone served on the
Compensation Committee until his resignation as a director of the company in
December 1997. The Compensation Committee (composed entirely of non-employee
directors) reviews and approves individual officer salaries, bonus plan
financial performance goals, bonus plan allocations, and stock option grants.
The Compensation Committee also reviews guidelines for compensation, bonus, and
stock option grants for non-officer employees.
Director Option Plan Committee. Messrs. Chavez Peon and Bjorn
currently serve on the Director Option Plan Committee. Mr. Budde served on the
Director Option Plan Committee until his resignation from the company in
February 1998. The Director Option Plan Committee has full and final authority
in its discretion, subject to the provisions of the Directors' Stock Option
Plan, (a) to prescribe the form or forms of instruments evidencing options
under the Directors' Stock Option Plan, (b) to adopt, amend and rescind rules
and regulations for the administration of the Directors' Stock Option Plan, and
(c) to interpret the Directors' Stock Option Plan and to decide any questions
and settle all controversies and disputes that may arise in connection with the
Directors' Stock Option Plan.
Nominating Committee. Messrs. Jordaan, Chavez Peon and Camacho Casas
currently serve on the Nominating Committee. The Nominating Committee was
established during fiscal 1998 to assist, as needed, with finding qualified
candidates to serve on the Company's Board of Directors.
During the fiscal year ending December 31, 1997, the Audit Committee
met or took action by Unanimous Consent 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 six times. All directors attended 75% or more of the aggregate number
of Board of Directors meetings and committee meetings.
COMPENSATION OF DIRECTORS
No directors receive cash compensation for serving on the Board of
Directors 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 of Directors, 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 82,500 shares of
Common Stock have been granted under the Directors' Plan
8
<PAGE> 13
to Messrs. Stone, Jordaan and Camacho Casas, of which 55,000 are currently
exercisable and outstanding. The weighted average exercise price of such
options is $5.36 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 of Directors. 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.
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.
9
<PAGE> 14
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>
<S> <C> <C>
Name Age Position
- ---- --- --------
Rafael Vaquero Bazan (1) 43 Chief Operating Officer and Director of UniMark and
President and Chief Executive Officer of ICMOSA
Soren Bjorn (1) 31 President and Chief Executive Officer
Eduardo Vaquero Bazan (1) 39 Vice President -- Finance and Administration of ICMOSA
and Director
Jose Martinez Brohez (1) 55 President and Chief Executive Officer of GISE and
Director
Keith Ford 46 Vice President -- Finance (Chief Accounting Officer),
Secretary and Treasurer
Soren Borre 55 Senior Vice President -- Sales of UniMark Foods, Inc.
Pedro Vaquero Garcia (2) 73 Director (Honorary Chairman)
Fernando Camacho Casas (1) 44 Director
Jakes Jordaan (1) 37 Chairman of the Board of Directors
Federico Chavez Peon (1) 32 Director
Luis A. Chico Pardo (1) 58 Director
Jose I. De Abiega Pons (1) 36 Director
Jorn Budde (3) 55 Former Chief Executive Officer, President and Chairman of
the Board of Directors
Edward A. Stone (2) 56 Former Director
Jeffrey King (4) 39 Former Senior Vice President -- Marketing of UniMark
Foods, Inc.
- -----------------
</TABLE>
(1) For information concerning these individuals, see "Election of
Directors" above.
(2) Resigned as a member of the Company's Board of Directors during the
1997 fiscal year.
(3) Resigned from the Company in February 1998.
(4) Separated from the Company in August 1998.
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
10
<PAGE> 15
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 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.
Jorn I. Budde is a co-founder of the Company and was its President,
Chief Executive Officer, and Chairman of the Board of Directors since its
inception in 1992 until February 1998. 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.
Edward A. Stone served as a director of the Company from 1994 to 1997.
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.
Jeffrey King served as Vice President - Marketing for the UniMark from
1995 to August 1998. 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
master's degree in Management from the J.L. Kellogg Graduate School of
Management of Northwestern University.
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.
11
<PAGE> 16
COMPENSATION OF EXECUTIVE OFFICERS
The following table discloses compensation received for the three
fiscal years ended December 31, 1995, December 31, 1996, and December 31, 1997,
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
ANNUAL COMPENSATION
______________
OTHER ANNUAL
<TABLE>
<S> <C> <C> <C> <C>
YEAR SALARY BONUS COMPENSATION(1)
---- ------ ----- ---------------
Jorn Budde
President and Chief Executive
Officer (2).................... 1995 $120,000 $-- $--
1996 $120,000 $-- $--
1997 $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.
(2) Resigned from the Company in February 1998.
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 (composed entirely of non-employee directors)
reviews and approves individual officer salaries, bonus plan financial
performance goals, bonus plan allocations, and stock option 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.
12
<PAGE> 17
The Compensation Committee annually reviews and approves the
compensation of the President and Chief Executive Officer. Mr. Budde was not
granted any stock options. The Compensation Committee believes Mr. Budde was
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 was a significant
shareholder in the Company until his resignation from the Company in February
1998, and to the extent his performance as President and Chief Executive
Officer translated into an increase in the value of the Company's stock, all
shareholders, including each of them, shared the benefits.
Respectfully submitted
COMPENSATION COMMITTEE
Jakes Jordaan
Federico Chavez Peon
Fernando Camacho Casas
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.
[PERFORMANCE GRAPH]
TOTAL RETURN ANALYSIS
<TABLE>
<CAPTION>
8/12/94 12/30/94 12/29/95 12/31/96 12/31/97
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
UniMark Group, Inc. $100.00 $ 98.11 $366.04 $233.96 $113.21
------------------------------------------------------------------------
S&P Foods Index $100.00 $114.43 $145.97 $172.95 $247.87
------------------------------------------------------------------------
S&P 500 $100.00 $101.54 $139.70 $171.77 $229.08
------------------------------------------------------------------------
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the fiscal year ended December 31, 1997, Mr. Stone served as
the sole member of the Compensation Committee. No member of the Compensation
Committee was an executive officer of the Company at any time during 1997.
During 1997, 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.
13
<PAGE> 18
CERTAIN TRANSACTIONS
Effective January 1, 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 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 $42,000 during the year ended December 31, 1997.
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.
The Company has subsequently elected to advance funds to IHMSA to
retire certain of its outstanding debt since, under the terms of the operating
agreement, the Company would benefit from the IHMSA debt reduction. At December
31, 1997 amounts due from IHMSA of $1,465,000 represent cash advances applied
to reduce IHMSA's outstanding debt. This amount is expected to be applied to
the purchase price when, and if, the Company elects to exercise its purchase
option.
Effective July 1, 1995, the Company entered into a ten year operating
agreement with Empacadora de Naranjas Azteca, S.A. de C.V. ("Azteca"), to
operate a processing plant in Montemorelos, Nuevo Leon, Mexico. The operating
agreement provides for payments in the amount of (i) interest on existing debt
of approximately $220,000 with credit institutions, (ii) asset tax and (iii)
annual property tax. Prior to this time, Azteca "co-packed" chilled grapefruit
sections and mango slices for the Company. During the six-month period ended
June 30, 1995, Azteca co-packed approximately $1.4 million of fruit for the
Company. The Vaquero family owns collectively an approximate 14.3% interest in
Azteca. Payments made pursuant to the operating agreement were $61,000 during
the year ended December 31, 1997. During the term of the operating agreement,
the Company has the right of first refusal to buy the Azteca facility at its
then fair market value. 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
$78,000 for the year ended December 31, 1997. 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 1997, the Company purchased
approximately $190,000 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 $110,700
for the year ended December 31, 1997. The Company believes that said
arrangement is on terms no less favorable to the Company than would be
available from unrelated third parties.
During 1997, the Company paid Jordaan & Pennington, PLLC an amount of
$179,962 for legal services rendered. Mr. Jordaan, a director of the Company,
is a member of Jordaan & 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.
On July 17, 1998, the Company sold 3,305,500 newly issued shares of
Common Stock and 2,000,000 options to acquires shares of Common Stock to M & M.
M & M is owned 80% by MSIF and 20% by Madera. M & M's principal business is
investment in securities. Pursuant to the Mexico Strategic Advisors Transaction,
the Board of Directors increased the number of directors from eight to ten and M
& M appointed Messrs. Chavez Peon, Chico Pardo and Abiega Pons to fill three of
the five vacancies existing on the Board of Directors. In addition, the Company
granted M & M certain veto rights regarding financial and corporate matters, and
customary registration rights for the Common Stock, the options and the Common
Stock obtained upon exercise of the options.
14
<PAGE> 19
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 1997 with the following exception: Mr. Jordaan inadvertently
failed to timely file a Form 4 to report the disposition of 5,900 shares of
Common Stock.
PROPOSAL NO. 2: 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, 1998.
During the year ended December 31, 1997, Ernst & Young LLP provided
the Company with audit services, including examinations of and reporting on the
Company's consolidated financial statements, and certain accounting 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 1999 Annual
Meeting of Shareholders must be received by the Company no later than January
26, 1998 to be included in the Company's Proxy Statement and form of proxy
related to that meeting.
15
<PAGE> 20
OTHER MATTERS
The Board of Directors does not intend to bring any other business
before the meeting, and so far as is known to the Board of Directors, 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: October 27, 1998
Bartonville, Texas
A COPY OF THE COMPANY'S FORM 10-K REPORT FOR THE FISCAL YEAR ENDING DECEMBER
31, 1997, 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
BARTONVILLE, TEXAS 76226
16
<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 be held on November 20, 1998, at Crowne Plaza Hotel, 14315
Midway Road, Dallas, Texas 75244 at 10:00 a.m. (Dallas, Texas Time) and the
Proxy Statement in connection therewith, each dated October 27, 1998, (b)
appoints each of Soren Bjorn 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.
PLEASE SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY
USING THE ENCLOSED POSTAGE-PAID ENVELOPE.
(please sign and date this card on the reverse side)
<TABLE>
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
1. ELECTION OF DIRECTORS -- Nominees: For All [ ] 2. Approval of the proposal to ratify For [ ]
Rafael Vaquero Bazan, Eduardo Vaquero Bazan, Withhold All [ ] the selection of Ernst & Young LLP as the Against [ ]
Jose Martinez Brohez, Fernando Camacho Casas, For All Except [ ] Company's independent public accountants Abstain [ ]
Jakes Jordaan, Federico Chavez Peon, Luis A. for the fiscal year ending December 31, 1998.
Chico Pardo, Jose I. De Abiega Pons, Soren Bjorn,
Jerry W. Johnson
- ----------------------------------------------
(Except Nominee(s) written above)
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 and 2, and on any other business, in the
disposition of the Proxies.
Dated: _______________, 1998
Signature(s): ______________________________________________
IMPORTANT. Please date and sign exactly as the name When shares are held by joint tenants, both should sign.
appears below. 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.
</TABLE>
YOUR VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY
USING THE ENCLOSED POSTAGE-PAID ENVELOPE.
