<PAGE> 1
SCHEDULE 14A
(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, AS AMENDED
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 Section 240.14a-11(c) or Section 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 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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<PAGE> 2
(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:
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(4) Date Filed:
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<PAGE> 3
THE UNIMARK GROUP, INC.
124 MCMAKIN ROAD
BARTONVILLE, TEXAS 76226
April 30, 1999
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 Omni
Dallas Hotel Park West, 1590 LBJ Freeway, Dallas, Texas 75234, on July 6, 1999,
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, Chief Executive Officer and Secretary
<PAGE> 4
[Sunfresh(R) brand logo]
THE UNIMARK GROUP, INC.
124 MCMAKIN ROAD
BARTONVILLE, TEXAS 76226
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 30, 1999
To the Shareholders:
The annual meeting of the shareholders of The UniMark Group, Inc. (the"
Company") will be held at the Omni Dallas Hotel Park West, 1590 LBJ Freeway,
Dallas, Texas 75234, on July 6, 1999, at 10:00 a.m. (Dallas, Texas time) for the
following purposes:
1. The approval of the amendment to the Company's Articles of
Incorporation which changes the Company's name to "Sunfresh, Inc.";
2. To elect ten (10) directors to serve on the Company's Board of
Directors;
3. To consider and vote upon a proposal to approve the Company's 1999
Stock Option Plan;
4. To ratify the selection of Ernst & Young LLP as the Company's
independent public accountants for the fiscal year ending December 31,
1999; and
5. To transact such other business as may properly come before the
meeting.
Only the shareholders of record at the close of business on May 7, 1999 are
entitled to notice of, and to vote at, this Annual Meeting or any adjournment
thereof.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ SOREN BJORN
Soren Bjorn
President, Chief Executive Officer and Secretary
<PAGE> 5
------------------------------------------
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> 6
THE UNIMARK GROUP, INC.
124 MCMAKIN ROAD
BARTONVILLE, TEXAS 76226
PROXY STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 6, 1999
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 Omni
Dallas Hotel Park West, 1590 LBJ Freeway, Dallas, Texas 75234, on July 6, 1999,
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 Charles Horne, 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 June 5, 1999, to all shareholders of record on May 7, 1999. 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. 2: 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.
<PAGE> 7
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 13,938,326 shares of Common Stock
outstanding on May 7, 1999, 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 a majority of the shares of Common Stock present is required
with respect to Proposal No. 1, No.2, No. 3 and No.4. 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, No. 3 and No. 4.
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<PAGE> 8
ANNUAL REPORT
The annual report for the Company's fiscal year ended December 31,
1998, including its Form 10-K which contains the Company's audited financial
statements, is being furnished with this Proxy Statement to shareholders of
record as of May 7, 1999. The annual report does not constitute a part of the
proxy solicitation materials.
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<PAGE> 9
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 as of April 29, 1999
by each director and nominee, the Named Executive Officers, all the directors
and executive officers as a group, and each person that owns more than 5% of any
class of voting securities.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP OF
COMMON SHARES AS OF
NAMES THE RECORD DATE PERCENT OF CLASS (1)
----- --------------- --------------------
<S> <C> <C>
Executive Officers and Directors:
Soren Bjorn (2)(12)................................... 31,800 **
Rafael Vaquero Bazan (3)(12).......................... 726,236 5.21
Eduardo Vaquero Bazan (3)............................. 542,981 3.90
Fernando Camacho Casas (3)(4)......................... 786,565 5.57
Jakes Jordaan (5)..................................... 25,200 **
Jose Martinez Brohez (3)(8)........................... 573,384 3.97
Federico Chavez Peon (6)(10).......................... 5,549,500 39.81
Luis A. Chico Pardo (6)(10)........................... 5,549,500 39.81
Jose I. De Abiega Pons (6)(10)........................ 5,549,500 39.81
Jerry Johnson (11).................................... 20,000 **
Executive Officers and Directors
as a Group (14 Persons) (7)................................. 6,753,901 47.47
Other Executive Officers and Directors:
Jorn Budde (9)(12).................................... 9,694 **
OTHER FIVE PERCENT HOLDERS:
M&M Nominee L.L.C. (10)..................................... 5,549,500 39.81
</TABLE>
- -------------------
**Less than 1%
(1) In calculating the percentage of total class ownership, the number of
outstanding shares used was 13,938,326. This number does not include:
(i) 328,500 shares of Common Stock issuable upon exercise of currently
outstanding options granted under the Company's 1994
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<PAGE> 10
Employee Stock Option Plan (the "Employee Stock Option Plan"); (ii)
40,000 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 25,000 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 10,000
shares of Common Stock underlying presently exercisable stock options.
Mr. Camacho Casas disclaims beneficial ownership of the Agros shares.
(5) Includes 10,000 shares of Common Stock underlying presently exercisable
stock options.
(6) Includes 5,549,500 shares of Common Stock owned by M & M Nominee L.L.C.
He disclaims beneficial ownership of such securities.
(7) Includes 137,500 shares of Common Stock underlying presently
exercisable stock options. Does not include shares beneficially owned
by Mr. Budde who resigned from the Company and was neither a Director
nor an executive officer of the Company at the record date.
(8) Includes 20,000 shares of Common Stock underlying presently exercisable
stock options.
(9) Mr. Budde resigned from the Company in February 1998.
(10) On March 29, 1999, the Company sold 2,000,000 newly issued shares of
Common Stock to M & M Nominee L.L.C. In connection with the March 29,
1999 transaction, M & M Nominee L.L.C. ("M & M") surrendered options to
acquire an additional 2,000,000 shares of common stock at a purchase
price of $4.5375 per share issued to M & M in the July 17, 1998
transaction. 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.
Pursuant to regulations promulgated under Section 13(d) of the
Securities Exchange Act of 1934, Mexico Strategic Advisors LLC (by
virtue of the Advisory Contract) may be deemed a beneficial owner of
securities held for the account of M & M (as a result of the
contractual authority of Mexico Strategic Advisors LLC with MSIF and
Madera to exercise voting and dispositive power with respect to such
securities).
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<PAGE> 11
Except to the extent that information is believed to be otherwise known
by the Company, the information given is as of April 8, 1999, as
reported by Mexico Strategic Advisors LLC in its Amendment No. 3 to the
initial statement on Schedule 13D dated July 7, 1998 and all amendments
thereto filed with the Securities and Exchange Commission.
(11) Mr. Johnson was elected to serve as a director of the Company in
October 1998. Includes 20,000 shares of Common Stock underlying
presently exercisable stock options.
(12) Messrs. Budde, Vaquero and Bjorn are "named executive officers" because
each individual served as the Company's Chief Executive Officer during
the last completed fiscal year. None of the Company's other highest
paid executive officers have total annual salaries and bonuses in
excess of $100,000.
PROPOSAL NO. 1: AMENDMENT TO ARTICLES OF INCORPORATION
The Board of Directors of the Company has adopted a resolution
proposing to change the name of the Company to "Sunfresh, Inc.", and to that
end, Article One of the proposed amended Articles of Incorporation to read as
follows:
"ARTICLE ONE
The name of the Corporation is "Sunfresh, Inc."
The Board of Directors believes that the proposed name change not only
reflects the Company's objective to focus its primary efforts to be a single,
integrated and brand-driven fruit company, but will also increase the equity of
the Sunfresh(R) brand.
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
Company's Articles of Incorporation which changes the Company's name to
"Sunfresh, Inc." THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL.
PROPOSAL NO. 2: 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. 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
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<PAGE> 12
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:
<TABLE>
<CAPTION>
NAME AGE DIRECTOR SINCE
- ---- --- --------------
<S> <C> <C>
Soren Bjorn (4)(5) 31 1998
Rafael Vaquero Bazan (5) 44 1992
Eduardo Vaquero Bazan 40 1994
Fernando Camacho Casas (1)(2)(3)(6) 44 1994
Jakes Jordaan (1)(3)(6) 37 1994
Jose Martinez Brohez (5) 55 1996
Federico Chavez Peon (1)(2)(3)(4)(5)(6) 32 1998
Luis A. Chico Pardo 59 1998
Jose I. De Abiega Pons 37 1998
Jerry W. Johnson (3) 59 1998
</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
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. Mr. Bjorn has served as Secretary of the
Company since December 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 May 1996 to August 1998, Mr. Bjorn served as Vice President
of Operations of the Company. From January 1997 to August of 1998, Mr. Bjorn
served as Executive Vice President and Chief Operating Officer of UniMark Foods,
Inc. From January 1995 to May 1996, Mr. Bjorn served Director of Operations for
UniMark Foods, Inc., and from January 1993 to January 1995, he served as Product
Manager for UniMark Foods, Inc.'s Sunfresh(R) brand 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.
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
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<PAGE> 13
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
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.
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 Jakes Jordaan, PLLC, Dallas, Texas,
(formerly known as Jordaan & Pennington, PLLC) 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.
Jose Martinez Brohez has served as a director of the Company since May
1996 and as Chief Executive Officer of Grupo Industrial Santa Engracia S.A. de
C.V. ("GISE") since the GISE acquisition. 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
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<PAGE> 14
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.
Federico Chavez Peon has served as a Director of the Company since
October 1998. Mr. 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 and elected as
a Director of the Company pursuant to the Mexico Strategic Advisors Transaction.
Luis A. Chico Pardo has served as a Director of the Company since
October 1998. Mr. 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, 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 and elected as a Director of the
Company pursuant to the Mexico Strategic Advisors Transaction.
Jose I. de Abiega Pons has served as a Director of the Company since
October 1998. Mr. 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. Abiega Pons 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. Abiega Pons 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. Abiega Pons served as Chief Executive Officer of
Ingenieria Cambiaria Casa de Cambio, a foreign exchange operator in Mexico. From
1984 to 1987, Mr. Abiega Pons served as Chief Operating Officer of Inverworld,
Inc., a licensed broker dealer in San Antonio, Texas. Mr. Abiega Pons obtained a
degree in Industrial
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<PAGE> 15
Engineering at the Anahuac University of Mexico. Mr. Abiega Pons has been
appointed and elected as a Director of the Company pursuant to the Mexico
Strategic Advisors Transaction.
Jerry W. Johnson has served as a Director of the Company since October
1998. Mr. 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, Bjorn, Martinez Brohez 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, Camacho Casas and Chavez Peon
currently serve on the Audit Committee. The function of the Audit Committee is
to act as a liaison between the Board of Directors and the 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. 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, Johnson, Chavez Peon and
Camacho Casas currently serve on the Compensation Committee. 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. The Director Option Plan Committee
has full and final authority
-10-
<PAGE> 16
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, 1998, the Audit Committee
met one time. The Stock Option Plan Committee met or took action by Unanimous
Consent three times. The Compensation Committee met or took action by unanimous
written consent one time. The entire Board of Directors met four times and 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 40,000 shares of
Common Stock granted to Messrs. Jordaan, Johnson and Camacho Casas are currently
exercisable and outstanding. The weighted average exercise price of such options
is $5.67 per share. Presently, options to purchase 53,000 shares of Common Stock
are available under the Directors' Plan.
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
-11-
<PAGE> 17
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
-12-
<PAGE> 18
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.
-13-
<PAGE> 19
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>
Rafael Vaquero Bazan (1) 44 Chief Operating Officer and Director; President
and Chief Executive Officer of ICMOSA
Eduardo Vaquero Bazan (1) 40 Director; Vice President -- Finance and
Administration of ICMOSA
Soren Bjorn (1) 31 President, Chief Executive Officer and Secretary
Soren Borre 55 Senior Vice President -- Sales of UniMark
Foods, Inc.
Jose Martinez Brohez (1) 55 Director; President and Chief Executive Officer
of GISE
Fernando Camacho Casas (1) 44 Director
Federico Chavez Peon (1) 32 Director
Luis A. Chico Pardo (1) 59 Director
Jose I. De Abiega Pons (1) 37 Director
Keith Ford (2) 46 Vice President -- Finance and Administration
and Treasurer
Charles Horne (3) 54 Chief Financial Officer
Jerry W. Johnson (1) 59 Director
Jakes Jordaan (1) 37 Director (Chairman of the Board)
Roman Shumny (4) 42 Senior Vice President -- Marketing of UniMark
Foods, Inc.
Jorn Budde (5) 55 Former Chief Executive Officer, President and
Chairman of the Board
Jeffrey King (6) 39 Former Senior Vice President -- Marketing of
UniMark Foods, Inc.
</TABLE>
-14-
<PAGE> 20
- ----------------------
(1) For information concerning these individuals, see "Election of
Directors" above.
(2) Resigned as Secretary of the Company in December 1998.
(3) Joined the Company as Chief Financial Officer in March 1999.
(4) Joined the Company as Senior Vice President -- Marketing of UniMark
Foods, Inc. in November 1998.
(5) Resigned from the Company in February 1998.
(6) Separated from the Company in August 1998.
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.
Keith Ford has served as Vice President -- Finance and Administration
and Treasurer of the Company since 1992. From 1992 to 1998, he served as
Secretary of the Company. 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.
Charles Horne joined the Company in March 1999 as Chief Financial
Officer. From 1994 to 1998, Mr. Horne was a Partner in Horne-Alexander
consulting, a consulting firm providing financial and operational services to
clients. From 1986 to 1994, Mr. Horne served as a consulting Partner with Ernst
& Young LLP, and served in a variety of capacities including Regional Director
of Quality Assurance for the Southern Region of the United States. From 1991 to
1993, Mr. Horne was Ernst & Young LLP's Country Managing Partner of Consulting
for Spain. From 1968 to 1986, Mr. Horne was with Arthur Anderson & Co. where he
was a Partner. Mr. Horne has a bachelor's of science degree in Industrial
Administration from the University of Kentucky.
Roman Shumny joined the Company in November 1998 as Senior Vice
President -- Marketing of UniMark Foods, Inc. From 1996 to 1998, Mr. Shumny
served as Senior Director of Marketing for the RadioShack division of Tandy
Corporation, a publicly-held retail consumer electronics company. From 1992 to
1996, he served as Senior Marketing Manager for Timex Corporation, a
privately-held watch, clock and wrist instruments company. From 1989 to 1992,
Mr. Shumny served as Senior Product Manager for Bushnell, a division of Bausch &
Lomb, Inc., a publicly-held healthcare and optics company. From 1985 to 1989,
Mr. Shumny held the positions of Business Manager, Marketing Manager and Product
Manager with Beatrice/Hunt-Wesson, Inc., a privately-held packaged food company.
From 1978 to 1985, Mr. Shumny served as Product Manager, Associate Product
Manager, National Account Sales Manager, District Sales Manger and Sales
Representative with Union Carbide Corporation, a publicly-held chemical and
consumer products company. Mr. Shumny has a bachelor's degree in Psychology from
the University of Southern California.
-15-
<PAGE> 21
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.
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.
-16-
<PAGE> 22
COMPENSATION OF EXECUTIVE OFFICERS
The following table discloses compensation received for the three
fiscal years ended December 31, 1996, December 31, 1997, and December 31, 1998
by the Company's Chief Executive Officer. None of the Company's other highest
paid executive officers have total annual salaries and bonuses in excess of
$100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION AWARDS
---------------------- -------------------------------------------
RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING ALL OTHER
YEAR SALARY BONUS COMPENSATION AWARD(S) OPTIONS/SARS COMPENSATION
---- ------ ----- ------------ --------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Jorn Budde......................... 1996 $120,000 -0- (2) -0- -0-/-0- -0-
Former President and 1997 $120,000 -0- (2) -0- -0-/-0- -0-
Chief Executive 1998 $120,000 -0- (2) -0- -0-/-0- -0-
Officer (1)
Rafael Vaquero Bazan............... 1998 $ 78,000 -0- (2) -0- -0-/-0- -0-
Chief Operating
Officer (3)
Soren Bjorn........................ 1998 $ 87,083 $ 3,864 (2) -0- 25,000/-0- -0-
President, Chief
Executive Officer
and Secretary (4)
</TABLE>
- ---------------------
(1) Resigned from the Company in February 1998.
(2) The Company's Chief Executive Officer 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.
(3) From February 1998 to August 1998, Mr. Vaquero served as President and
Chief Executive Officer of the Company. From February 1998 to August
1998, Mr. Vaquero resigned as President and Chief Executive Officer and
was elected to serve as Chief Operating Officer of the Company.
(4) From May 1996 to August 1998, Mr. Bjorn served as Vice President of
Operations and Chief Operating Officer of the Company. In August 1998,
Mr. Bjorn was elected to serve as President, Chief Executive Officer
and, in September 1998, he was elected to serve as a Director of the
Company. Mr. Bjorn was elected to serve as Secretary of the Company in
December 1998.
EMPLOYMENT AGREEMENTS
The Company entered into an Employment Agreement with Roman Shumny
dated November 30, 1998 for his services as Senior Vice President -- Marketing
of UniMark Foods, Inc. The Employment Agreement provides that for the period of
November 30, 1998 through November 30, 1999, unless extended to November 30,
2000 pursuant to the Employment Agreement, he will be
-17-
<PAGE> 23
paid annual base compensation of not less than $105,000 through the end of the
Company's fiscal year ending December 31, 1999; he will be eligible to receive
an annual bonus payment in accordance with the Corporation's incentive plan to
be established by the Company; and he received options to acquire 20,000 shares
of Common Stock under the Corporation's 1994 Employee Stock Option. He may
terminate his employment with the Company, within 60 days after the occurrence
of a Change in Control (as defined in the Employment Agreement) for any reason
or without reason, with the right to a lump sum severance payment equal to his
base compensation as determined pursuant to the Employment Agreement for six
months. If his employment is terminated by the Corporation without cause, he
will receive severance in one payment equal to his base compensation as
determined pursuant to the Employment Agreement for six months. In addition, he
may receive payment for reasonable executive level outplacement costs.
The Company entered into an Employment Agreement with Charles Horne
dated March 31, 1999 for his services as Chief Financial Officer of the Company.
The Employment Agreement provides that for the period of March 31, 1999 through
March 31, 2003, unless extended to March 31, 2004 pursuant to the Employment
Agreement, he will be paid base compensation at the annualized rate as follows,
less taxes and other usual deductions: $180,000 for the 12 month period ending
March 31, 2000; $189,000 for the 12 month period ending March 31, 2001; $198,450
for the 12 month period ending March 31, 2002; and $208,372 for the 12 month
period ending March 31, 2003; he will be eligible to receive bonus performance
compensation, composed of subjective review and financial performance
components, not to exceed 50 percent of his then applicable base compensation
amount; and he received options to acquire 50,000 shares of Common Stock and
will receive, on an annualized basis, options to acquire 10,000 shares of Common
Stock under the Corporation's 1994 Employee Stock Option. He may terminate his
employment with the Company, within 60 days after the occurrence of a Change in
Control (as defined in the Employment Agreement) for any reason or without
reason, with the right to a lump sum severance payment within 15 days after such
termination equal to his then applicable base compensation as determined
pursuant to the Employment Agreement for 12 months. If his employment is
terminated by the Corporation without cause, he will receive a lump sum
severance payment within 15 days after such termination equal to his then
applicable base compensation as determined pursuant to the Employment Agreement
for 12 months within 15 days after such termination. In addition, he may receive
payment for reasonable executive level outplacement costs.
1994 EMPLOYEE STOCK OPTION PLAN
The Company's employees, consultants and affiliates are eligible to
receive stock options granted under The UniMark Group, Inc.'s 1994 Employee
Stock Option Plan (the "1994 Plan"). Stock options granted pursuant to the 1994
Plan may either be incentive stock options within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"), or
non-qualified stock options. The number of shares of Common Stock reserved for
issuance pursuant to the 1994 Plan is 480,000 shares. As of the date hereof,
options for 396,500 shares of Common Stock had been granted under the Plan, of
which 378,500 are currently
-18-
<PAGE> 24
outstanding and 279,375 are currently exercisable. The outstanding options have
an average exercise price of $5.47 per share of Common Stock.
In proposing the 1999 Plan, the Compensation Committee took into
account the fact that the exercise price of most of the options granted under
the 1994 Plan are substantially above the present market value of the Company's
Common Stock. In addition, the 1994 Plan is currently almost out of shares, the
newly authorized shares should be sufficient to address the Company's needs and
objectives for at least the next three years, the shares would be used to
provide long term incentives to the Company's officers and directors, and option
grants are a means of staying competitive with the compensation to executive
officers and directors offered by the Company's peer industry group.
The Plan is administered by the Compensation Committee of the Board of
Directors. Subject to the provisions of the Plan, the Compensation Committee has
the exclusive power to interpret the Plan, to grant waivers of restrictions
thereunder and to adopt such rules and regulations as it may deem necessary or
appropriate in keeping with the objectives of the Plan.
Options granted pursuant to the Plan become exercisable on such date or
dates as may be established by the Compensation Committee. The exercise price of
options granted under the Plan may not be an amount less than the market value
of Common Stock at the time of grant. The exercise price must be paid in full in
cash at the time an option is exercised or, if permitted by the Compensation
Committee, by means of tendering previously owned shares of Common Stock, or
partly in cash and partly in Common Stock.
In the event of a stock split, stock dividend, combination or
reclassification or certain other corporate transactions, the Compensation
Committee is authorized to make appropriate adjustments to the exercise price
and number of shares subject to options granted under the Incentive Plan.
Subject to certain limitations, the Board of Directors is authorized to amend,
modify or terminate the Incentive Plan to meet any changes in legal requirements
for any other purpose permitted by law.
-19-
<PAGE> 25
The following table shows information with respect to the unexercised
options and SARs granted during the last completed fiscal year and in prior
years to the Executive Officers named in the Summary Compensation Table on page
21 and with respect to option/SAR exercises by those persons during the last
completed fiscal year:
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED IN-
UNDERLYING UNEXERCISED THE-MONEY OPTIONS/SARS
OPTIONS/SARS AT FY-END AT FY-END(2)
SHARES ---------------------- -------------
ACQUIRED ON VALUE
EXERCISE REALIZED(1) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
----------- ----------- ------------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C>
Jorn Budde.................. -0- -0- -0-/-0- -0-/-0-
Rafael Vaquero Bazan........ -0- -0- -0-/-0- -0-/-0-
Soren Bjorn................. -0- -0- 25,000/-0- -0-/-0-
</TABLE>
- ------------------------
(1) Based on the difference between the market price of the securities
underlying the options on the date of exercise and the exercise price of
the options.
(2) Based on the difference between the market price of the securities
underlying the options at fiscal year-end and the exercise price of the
options.
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.
-20-
<PAGE> 26
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 the President and Chief Executive Officer. During the fiscal
year ended December 31, 1998, Messrs. Bjorn, R. Vaquero and Budde were not
granted any stock options. The Compensation Committee believes Messrs. Bjorn, R.
Vaquero and Budde are or were 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. R.
Vaquero is a significant shareholder in the Company and Mr. Budde was a
significant shareholder in the Company until his resignation in February 1998,
and to the extent each of their 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
Jerry Johnson
-21-
<PAGE> 27
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 12/31/98
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
UniMark Group, Inc. $100.00 $ 98.11 $366.04 $233.96 $113.21 $ 66.04
---------------------------------------------------------------------
S&P Foods Index $100.00 $114.43 $145.97 $172.95 $247.87 $268.24
---------------------------------------------------------------------
S&P 500 $100.00 $101.54 $139.70 $171.77 $229.08 $294.55
---------------------------------------------------------------------
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the fiscal year ended December 31, 1998, Messrs. Jordaan,
Johnson, Chavez Peon and Camacho Casas served on the Compensation Committee. No
member of the Compensation Committee was an executive officer of the Company at
any time during 1998. During 1998, 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 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
-22-
<PAGE> 28
operating agreement were $470,308 during the year ended December 31, 1998.
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, 1998 amounts due from IHMSA of $1,481,000 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. The Vaquero family owns collectively
an approximate 14.3% interest in Azteca. No payments were made pursuant to the
operating agreement during the year ended December 31, 1998. 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, 1998. 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 1998, the Company purchased approximately $286,000
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 pursuant to a lease that expires in 2000, but its terms
may be renewed for a five-year period. Rent
-23-
<PAGE> 29
expense on this lease was approximately $110,700 for the year ended December 31,
1998. The Company believes that said arrangement is on terms no less favorable
to the Company than would be available from unrelated third parties.
During 1998, the Company paid Jordaan & Pennington, PLLC an amount of
$310,182 for legal services rendered. Mr. Jordaan, a director and, since
February 1998, Chairman of the Company, is a member of Jakes Jordaan, PLLC
(formerly known as 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 to M & M. On March 29, 1999, the Company sold an additional
2,000,000 newly issued shares of Common Stock at a purchase price of $2.50 per
share, for an aggregate purchase price of $5,000,000 to M & M. In connection
with the March 29, 1999 transaction, M & M surrendered options to acquire an
additional 2,000,000 shares of common stock at a purchase price of $4.5375 per
share issued to them in the July 17, 1998 transaction. M & M is owned 80% by
MSIF and 20% by Madera. M & M's principal business is investment in securities.
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 1998 with the following exception: Mr. Camacho Casas
inadvertently failed to file a Form 4 to report the acquisition of 2,500 options
exercisable to purchase shares of Common Stock. Mr. Shumny inadvertently failed
to timely file a Form 3 to report his beneficial ownership of 20,000 stock
options exercisable to purchase shares of Common Stock.
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PROPOSAL 3: APPROVE COMPANY'S 1999 STOCK OPTION PLAN
The Board of Directors of the Company has adopted a resolution
proposing the 1999 Stock Option Plan (the "1999 Plan"). The purpose of the 1999
Plan is to provide employees, directors and advisors with additional incentives
by increasing the proprietary interest in the Company. The 1999 Plan is set out
in full as Exhibit 1 to this Proxy Statement. The following summary of the terms
of the 1999 Plan is derived from Exhibit 1 and is qualified by reference to the
specific terms of the 1999 Plan.
The aggregate number of shares of Common Stock with respect to which
options may be granted is 500,000 which amount may be increased in the
discretion of the Board of Directors to an amount not to exceed 10% of the total
outstanding shares of the Company, from time to time, provided, however, the
aggregate number of shares of Common Stock with respect to which options may be
granted may in no event, exceed 1,500,000 shares.
The 1999 Plan provides for the grant of incentive stock options
("ISOs") as defined in Section 422 of the Internal Revenue Code of 1986, as
amended, and nonqualified stock options ("NSOs") (collectively ISOs and NSOs are
referred to as "Awards"). The 1999 Plan will be administered by the Company's
full Board of Directors, although the 1999 Plan may be administered by a
committee of not less than two members of the Board of Directors (the
"Committee"). The Board of Directors or, if established, the Committee has,
subject to the terms of the 1999 Plan, the sole authority to grant Awards under
the 1999 Plan, to construe and interpret the 1999 Plan to make all other
determinations to take any and all actions necessary and advisable for the
administration of the 1999 Plan. All of the Company's full-time, salaried
employees, members of the Board of Directors and certain advisors are eligible
to receive Awards under the 1999 Plan. Options will be exercisable during the
period specified in each Option Agreement and will generally be exercisable in
installments pursuant to a vesting schedule to be designed by the Board of
Directors or the Committee. The provisions of Option Agreements may provide for
acceleration of exercisability in the event of certain events including certain
reorganizations and changes in control of the Company. No option will remain
exercisable later than 10 years after the date of grant. The exercise prices for
ISOs granted under the 1999 Plan may be no less than the fair market value of
the Common Stock on the date of grant. The exercise prices of NSOs are set by
the Board of Directors or the Committee. Each non-employee director of the
Company shall automatically be granted a NSO to purchase 20,000 shares of Common
Stock upon initial election or appointment to the Board of Directors, and will
be granted a NSO to purchase 5,000 shares of Common Stock on the date of each
subsequent annual meeting of the Board of Directors.
No options have been granted under the 1999 Plan as of the date of this
proxy statement.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The statements in the following paragraphs are based on statutory
authority and judicial and administrative interpretations, as of the date of
this Proxy Statement, which authorities and
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interpretations are subject to change at any time (possibly with retroactive
effect). The law is technical and complex and the discussion below represents
only a general summary.
Incentive Stock Options. Incentive stock options ("ISOs") granted under
the 1999 Plan are intended to meet the definitional requirements of Code Section
422(b) for "incentive stock options."
An employee who receives an ISO does not recognize any taxable income
upon the grant of such ISO. Similarly, the exercise of an ISO generally does not
give rise to federal income tax to the employee, provided that (i) the federal
"alternative minimum tax", which depends on the employee's particular tax
situation, does not apply and (ii) the employee is employed by the Company from
the date of grant of the option until three months prior to the exercise
thereof, except where such employment terminates by reason of disability (where
the three-month period is extended to one year) or death (where this requirement
does not apply). If an employee exercises an ISO after these requisite periods,
the ISO will be treated as a NSO (as defined below) and will be subject to the
rules set forth below under the caption "Non-Qualified Stock Options."
Further, if after exercising an ISO, an employee disposes of the Common
Stock so acquired more than two years from the date of grant and more than one
year from the date of transfer of the Common Stock pursuant to the exercise of
such ISO (the "applicable holding period"), the employee will generally
recognize capital gain or loss equal to the difference, if any, between the
amount received for the shares and the exercise price. If, however, an employee
does not hold the shares so acquired for the applicable holding period, thereby
making a "disqualifying disposition," the employee will recognize ordinary
income equal to the excess of the fair market value of the shares at the time
the ISO was exercised over the exercise price and the balance, if any, of the
gain would be capital gain (provided the employee held such shares as a capital
asset at such time). Capital gains are long-term and eligible for a maximum
federal income tax rate of 20% if the holder's holding period exceeds eighteen
months and are mid-term and eligible for a maximum federal income tax rate of
20% if such holding period is more than twelve but not more than eighteen
months. If the disqualifying disposition is a sale or exchange, and the sales
proceeds are less than the fair market value of the shares on the date of
exercise, the employee's ordinary income therefrom would be limited to the gain
(if any) realized on the sale.
An employee who exercises an ISO by delivering Common Stock previously
acquired pursuant to the exercise of another ISO is treated as making a
"disqualifying disposition" of such Common Stock if such shares are delivered
before the expiration of their applicable holding period. Upon the exercise of
an ISO with previously-acquired shares as to which no disqualifying disposition
occurs, despite some uncertainty, it appears that the employee would not
recognize gain or loss with respect to such previously-acquired shares.
The Company will not be allowed a federal income tax deduction upon the
grant or exercise of an ISO or the disposition, after the applicable holding
period, of the Common Stock acquired upon exercise of an ISO. In the event of a
disqualifying disposition, the Company generally will be entitled to a deduction
in an amount equal to the ordinary income recognized by the employee,
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<PAGE> 32
provided that such amount constitutes an ordinary and necessary business expense
to the Company and is reasonable and the limitations of Code Sections 280G and
162(m) (discussed below) do not apply.
Non-Qualified Stock Options. Non-qualified stock options ("NSOs")
granted under the 1999 Plan are options that do not qualify as ISOs. A
participant who receives a NSO will not recognize any taxable income upon the
grant of such NSO. However, the participant generally will recognize ordinary
income upon exercise of a NSO in an amount equal to the excess of (i) the fair
market value of the shares of Common Stock at the time of exercise over (ii) the
exercise price.
As a result of Section 16(b) of the Exchange Act, under certain
circumstances, the timing of income recognition may be deferred (generally for
up to six months following the exercise of a NSO (the "Deferral Period")) for
any participant who is an officer or director of the Company or a beneficial
owner of more than ten percent (10%) of any class of equity securities of the
Company. Recognition of income by the participant will be deferred until the
expiration of the Deferral Period, if any.
The ordinary income recognized with respect to the receipt of shares or
cash upon exercise of a NSO will be subject to both wage withholding and other
employment taxes. In addition to the customary methods of satisfying the
withholding tax liabilities that arise upon the exercise of a NSO, the Company
may satisfy the liability in whole or in part by withholding shares of Common
Stock from those that otherwise would be issuable to the participant or by the
participant tendering other shares owned, valued at their fair market value as
of the date that the tax withholding obligation arises.
A federal income tax deduction generally will be allowed to the Company
in an amount equal to the ordinary income recognized by the participant with
respect to a NSO, provided that such amount constitutes an ordinary and
necessary business expense to the Company and is reasonable and the limitations
of Code Sections 280G and 162(m) do not apply.
If a participant exercises a NSO by delivering shares of Common Stock
to the Company, other than shares previously acquired pursuant to the exercise
of an ISO which is treated as a "disqualifying disposition" as described above,
the participant will not recognize gain or loss with respect to the exchange of
such shares, even if their then fair market value is different from the
participant's tax basis. The participant, however, will be taxed as described
above with respect to the exercise of the NSO as if the participant had paid the
exercise price in cash, and the Company likewise generally will be entitled to
an equivalent tax deduction.
Change of Control. In general, if the total amount of payments to a
participant that are contingent upon a "change of control" of the Company (as
defined in Code Section 280G), including payments under the 1999 Plan that vest
upon a "change of control," equals or exceeds three times the individual's "base
amount" (generally, such participant's average annual compensation for the five
calendar years preceding the change of control), then, subject to certain
exceptions, the payments
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<PAGE> 33
may be treated as "parachute payments" under the Code, in which case a portion
of such payments would be non-deductible to the Company and the individual would
be subject to a 20% excise tax on such portion of the payments.
Certain Limitations on Deductibility of Executive Compensation. With
certain exceptions, Code Section 162(m) denies a deduction to publicly-held
corporations for compensation paid to certain executive officers in excess of $1
million per executive per taxable year (including any deduction with respect to
the exercise of a NSO or the disqualifying disposition of stock purchased
pursuant to an ISO). In general, the Company intends for stock options granted
under the 1999 Plan to qualify for the performance-based compensation exception
to Code Section 162(m).
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 Company's 1999 Stock
Option Plan. 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, 1999.
During the year ended December 31, 1998, 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 ratify the appointment of Ernst
& Young LLP as independent auditors. THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR THE PROPOSAL.
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<PAGE> 34
PROPOSALS OF SHAREHOLDERS
Proposals of shareholders intended to be presented at the 2000 Annual
Meeting of Shareholders must be received by the Company no later than December
1, 1999 to be included in the Company's Proxy Statement and form of proxy
related to that meeting.
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: April 30, 1999
Bartonville, Texas
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<PAGE> 35
EXHIBIT 1
THE UNIMARK GROUP, INC.
1999 STOCK OPTION PLAN
<PAGE> 36
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I
DEFINITIONS.......................................................................1
ARTICLE II
THE PLAN..........................................................................3
2.1 Name....................................................................3
2.2 Purpose.................................................................3
2.3 Effective Date..........................................................3
2.4 Eligibility to Participate..............................................3
2.5 Shares Subject to the Plan..............................................4
2.6 Maximum Number of Plan Shares...........................................4
2.7 Options and Stock Granted Under Plan....................................4
2.8 Conditions Precedent....................................................4
2.9 Reservation of Shares of Common Stock...................................5
2.10 Tax Withholding.........................................................5
2.11 Exercise of Options.....................................................6
2.12 Acceleration in Certain Events..........................................6
2.13 Written Notice Required.................................................7
2.14 Compliance with Securities Laws.........................................7
2.15 Employment or Service of Optionee.......................................7
2.16 Rights of Optionees Upon Termination of Employment or Service...........8
2.17 Transferability of Options..............................................9
2.18 Information to Optionees...............................................10
ARTICLE III
ADMINISTRATION...................................................................10
3.1 Committee..............................................................10
3.2 Appointment of Committee...............................................10
3.3 Majority Rule; Unanimous Written Consent...............................10
3.4 Company Assistance.....................................................10
ARTICLE IV
INCENTIVE STOCK OPTIONS..........................................................11
4.1 Terms and Conditions...................................................11
4.2 Duration of Options....................................................11
4.3 Purchase Price.........................................................11
4.4 Maximum Amount of Options First Exercisable in Any Calendar Year.......11
4.5 Individual Option Agreements...........................................11
</TABLE>
<PAGE> 37
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE V
NONQUALIFIED STOCK OPTIONS.......................................................12
5.1 Option Terms and Conditions............................................12
5.2 Duration of Options....................................................12
5.3 Purchase Price.........................................................12
5.4 Individual Option Agreements...........................................12
ARTICLE V
TERMINATION, AMENDMENT, AND ADJUSTMENT...........................................12
6.1 Termination and Amendment..............................................12
6.2 Adjustments............................................................13
ARTICLE VI
MISCELLANEOUS....................................................................13
7.1 Other Compensation Plans...............................................13
7.2 Plan Binding on Successors.............................................13
7.3 Number and Gender......................................................13
7.4 Headings...............................................................13
7.5 Choice of Law..........................................................13
</TABLE>
<PAGE> 38
THE UNIMARK GROUP, INC.
1999 STOCK OPTION PLAN
ARTICLE I
DEFINITIONS
As used herein with initial capital letters, the following terms have
the meanings hereinafter set forth unless the context clearly indicates to the
contrary:
1.1 "Advisor" means any person performing services for the Company or
any Subsidiary of the Company, with or without compensation, to whom the Company
chooses to grant Options under the Plan, provided that bona fide services are
rendered by such person and such services are not rendered in connection with
the offer or sale of securities in a capital-raising transaction.
1.2 "Board" means the Board of Directors of the Company.
1.3 "Cause" means conviction of a crime involving moral turpitude or a
crime providing for a term of imprisonment in a federal or state penitentiary;
failure or refusal to follow reasonable instructions of the Board; failure or
refusal to comply with the reasonable policies, standards and regulations of the
Company, which from time to time may be established; failure or refusal to
faithfully and diligently perform the usual customary duties of his employment
or service; acting in an unprofessional, unethical, immoral or fraudulent
manner; acting in a manner which discredits or is detrimental to the reputation,
character and standing of the Company or a Subsidiary; or the commission of any
other act that causes or reasonably may be expected to cause substantial injury
to the Company.
1.4 "Code" means the Internal Revenue Code of 1986, as amended.
1.5 "Committee" means the Committee appointed in accordance with
Section 3.1.
1.6 "Common Stock" means the Common Stock, par value $0.01 per share,
of the Company or, in the event that the outstanding shares of such Common Stock
are hereafter changed into or exchanged for shares of a different stock or
security of the Company or some other corporation, such other stock or security.
1.7 "Company" means The UniMark Group, Inc., a Texas corporation, or
one or more of its Subsidiaries.
1.8 "Director" means a member of the Board.
1.9 "Effective Date" means ________________, 1999.
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<PAGE> 39
1.10 "Employee" means an employee (as defined in Section 3401(c) of the
Code and the Treasury regulations thereunder) of the Company or any Subsidiary
that adopts the Plan, including an Officer.
1.11 "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
1.12 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
1.13 "Fair Market Value" means such value as determined by the
Committee on the basis of such factors as it deems appropriate; provided that if
the Common Stock is traded on a national securities exchange or transactions in
the Common Stock are quoted on the Nasdaq National Market System, such value as
shall be determined by the Committee on the basis of the last reported sales
price for the Common Stock on the date for which such determination is relevant,
as reported on the national securities exchange or the Nasdaq National Market
System, as the case may be. If the Common Stock is not listed and traded upon a
recognized securities exchange or on the Nasdaq National Market System, the
Committee shall make a determination of Fair Market Value on the basis of the
mean between the closing bid and asked quotations for such Common Stock on the
date for which such determination is relevant (as reported by a recognized stock
quotation service) or, in the event that there shall be no bid or asked
quotations on the date for which such determination is relevant, then on the
basis of the mean between the closing bid and asked quotations on the date
nearest preceding the date for which such determination is relevant for which
such bid and asked quotations were available.
1.14 "Incentive Stock Option" means an Option granted pursuant to
Article IV.
1.15 "Nonemployee Director" means a member of the Board who is not an
Officer or Employee; provided, however, that, as used in Section 3.1, the term
"Non-Employee Director" shall have the meaning given to that term in Rule 16b-3.
1.16 "Nonqualified Stock Option" means an Option granted pursuant to
Article V.
1.17 "Officer" means an officer of the Company or any Subsidiary of the
Company.
1.18 "Option" means an Incentive Stock Option or a Nonqualified Stock
Option.
1.19 "Optionee" means an Employee, Nonemployee Director or Advisor to
whom an Option has been granted hereunder.
1.20 "Option Agreement" means an agreement between the Company and an
Optionee with respect to one or more Options.
1.21 "Permanent Disability" has the same meaning as that provided in
Section 22(e)(3) of the Code.
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<PAGE> 40
1.22 "Plan" means The UniMark Group, Inc. 1999 Stock Option Plan, as
amended from time to time.
1.23 "Plan Shares" means shares of Common Stock issuable pursuant to
the Plan.
1.24 "Retirement" occurs when an Optionee terminates his relationship
with the Company or a Subsidiary on or after the date the Optionee (a) turns 65
years old or (b) turns 55 years old and has completed ten (10) years of service
with the Company or a Subsidiary as otherwise determined by the Board.
1.25 "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange Act
or any successor rule.
1.26 "Securities Act" means the Securities Act of 1933, as amended.
1.27 "Subsidiary" means a subsidiary corporation of the Company, as
defined in Section 424(f) of the Code.
1.28 "Tax Date" means the date on which the amount of tax to be
withheld required to be determined pursuant to the Code.
ARTICLE II
THE PLAN
2.1 Name. This Plan shall be known as the "The UniMark Group, Inc. 1999
Stock Option Plan."
2.2 Purpose. The purpose of the Plan is to promote the growth and
general prosperity of the Company by permitting the Company to grant to its
Employees, Nonemployee Directors and Advisors Options to purchase Common Stock
of the Company. The Plan is designed to help the Company and its Subsidiaries
attract and retain superior personnel for positions of substantial
responsibility and to provide Employees, Nonemployee Directors and Advisors with
an additional incentive to contribute to the success of the Company. The Company
intends that Incentive Stock Options granted pursuant to Article IV shall
qualify as "incentive stock options" within the meaning of Section 422 of the
Code.
2.3 Effective Date. The Plan shall become effective upon the Effective
Date subject to the approval of the Plan by the Company's shareholders.
2.4 Eligibility to Participate. Any Employee, Nonemployee Director or
Advisor shall be eligible to participate in the Plan. Subject to the provisions
of Section 5.5, the Committee may grant Options in accordance with such
determinations as the Committee from time to time in its sole
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<PAGE> 41
discretion shall make, provided that Incentive Stock Options may be granted only
to persons who are Employees.
2.5 Shares Subject to the Plan. The shares of Common Stock to be issued
pursuant to the Plan shall be either authorized and unissued shares of Common
Stock or shares of Common Stock issued and thereafter acquired by the Company.
2.6 Maximum Number of Plan Shares. Subject to adjustment pursuant to
the provisions of Section 6.2, and subject to any additional restrictions
elsewhere in the Plan, the maximum aggregate number of shares of Common Stock
which may be optioned, sold, granted, or otherwise issued under the Plan shall
initially be 500,000 which amount may, at the discretion of the Board, be
increased from time to time to a number such that the number of Plan Shares
available for issuance pursuant to Options to be granted pursuant to this Plan
equals 10% of the total number of shares of Common Stock of the Company and
shares of any other class of common stock of the Company outstanding from time
to time; provided however, subject to adjustment under Section 6.2 of the Plan,
the number of shares of Common Stock which may be optioned, sold, granted, or
otherwise issued under the Plan shall never be less than 500,000.
Notwithstanding the foregoing, subject to adjustment under Section 6.2 of the
Plan, no more than 500,000 Plan Shares will be available for the granting of
Incentive Stock Options under the Plan. Subject to adjustment pursuant to the
provisions of Section 6.2, the maximum aggregate number of shares of Common
Stock with respect to which Options may be granted during the term of the Plan
shall not exceed 1,500,000 shares. The maximum aggregate number of shares of
Common Stock with respect to which Options during the term may be granted to any
Optionee during the term of the Plan shall not exceed ten percent (10%) of the
shares eligible for issuance under the Plan.
2.7 Options and Stock Granted Under Plan. Plan Shares with respect to
which an Option shall have been exercised shall not again be available for grant
hereunder. If Options terminate for any reason without being wholly exercised,
new Options may be granted hereunder covering the number of Plan Shares to which
such Option termination relates.
2.8 Conditions Precedent. The Company shall not issue any certificate
for Plan Shares pursuant to the Plan prior to fulfillment of all of the
following conditions:
(a) The admission of the Plan Shares to listing on all stock
exchanges on which the Common Stock is then listed, unless the
Committee determines in its sole discretion that such listing is
neither necessary nor advisable;
(b) The completion of any registration or other qualification
of the offer or sale of the Plan Shares under any federal or state law
or under the rulings or regulations of the Securities and Exchange
Commission or any other governmental regulatory body that the Committee
shall in its sole discretion deem necessary or advisable; and
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<PAGE> 42
(c) The obtaining of any approval or other clearance from any
federal or state governmental agency that the Committee shall in its
sole discretion determine to be necessary or advisable.
2.9 Reservation of Shares of Common Stock. During the term of the Plan,
the Company shall at all times reserve and keep available such number of shares
of Common Stock as shall be necessary to satisfy the requirements of the Plan as
to the number of Plan Shares. In addition, the Company shall from time to time,
as is necessary to accomplish the purposes of the Plan, seek or obtain from any
regulatory agency having jurisdiction any requisite authority that is necessary
to issue Plan Shares hereunder. The inability of the Company to obtain from any
regulatory agency having jurisdiction the authority deemed by the Company's
counsel to be necessary to the lawful issuance of any Plan Shares shall relieve
the Company of any liability in respect of the non-issuance of Plan Shares as to
which the requisite authority shall not have been obtained.
2.10 Tax Withholding.
(a) Condition Precedent. The issuance of Plan Shares pursuant to
the exercise of any Option under the Plan is subject to the condition
that if at any time the Committee shall determine, in its discretion,
that the satisfaction of withholding tax or other withholding
liabilities under any federal, state or local law is necessary or
desirable as a condition of, or in connection with such issuances, then
the issuances shall not be effective unless the withholding shall have
been effected or obtained in a manner acceptable to the Committee.
(b) Manner of Satisfying Withholding Obligation. When an Optionee
is required by the Committee to pay to the Company an amount required
to be withheld under applicable income tax laws in connection with the
exercise of an Option, such payment may be made (i) in cash, (ii) by
check, (iii) if permitted by the Committee, by delivery to the Company
of shares of Common Stock already owned by the Optionee having a Fair
Market Value on the Tax Date equal to the amount required to be
withheld, (iv) through the withholding by the Company of a portion of
the Plan Shares acquired upon the exercise of the Options having a Fair
Market Value on the Tax Date equal to the amount required to be
withheld or (v) in any other form of valid consideration, as permitted
by the Committee in its discretion.
(c) Notice of Disposition of Stock Acquired Pursuant to Incentive
Stock Options. The Company may require as a condition to the issuance
of Plan Shares covered by any Incentive Stock Option that the party
exercising such Option give a written representation to the Company,
which is satisfactory in form and substance to its counsel and upon
which the Company may reasonably rely, that he shall report to the
Company any disposition of such shares prior to the expiration of the
holding periods specified by Section 422(a)(1) of the Code. If and to
the extent that the realization of income in such a disposition imposes
upon the Company federal, state or local withholding tax requirements,
or any such withholding is required to secure for the Company an
otherwise available tax deduction, the Company shall have the right to
require that the recipient remit to the Company an amount
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<PAGE> 43
sufficient to satisfy those requirements; and the Company may require
as a condition to the issuance of Plan Shares covered by an Incentive
Stock Option that the party exercising such Option give a satisfactory
written representation promising to make such a remittance.
2.11 Exercise of Options.
(a) Method of Exercise. Each Option shall be exercisable in
accordance with the terms of the Option Agreement pursuant to which the
Option was granted. No Option may be exercised for a fraction of a Plan
Share.
(b) Payment of Purchase Price. The purchase price of any Plan
Shares purchased shall be paid at the time of exercise of the Option
either (i) in cash, (ii) by certified or cashier's check, (iii) if
permitted by the Committee, by shares of Common Stock, (iv) if
permitted by the Committee, by cash or certified or cashier's check for
the par value of the Plan Shares plus a promissory note for the balance
of the purchase price, which note shall provide for full personal
liability of the maker and shall contain such terms and provisions as
the Committee may determine, including without limitation the right to
repay the note partially or wholly with Common Stock, (v) by delivery
of a copy of irrevocable instructions from the Optionee to a broker or
dealer, reasonably acceptable to the Company, to sell certain of the
Plan Shares purchased upon exercise of the Option or to pledge them as
collateral for a loan and promptly deliver to the Company the amount of
sale or loan proceeds necessary to pay such purchase price or (vi) in
any other form of valid consideration, as permitted by the Committee in
its discretion. If any portion of the purchase price or a note given at
the time of exercise is paid in shares of Common Stock, those shares
shall be valued at the then Fair Market Value.
2.12 Acceleration in Certain Events. The Committee may accelerate the
exercisability of any Option in whole or in part at any time. Notwithstanding
the provisions of any Option Agreement, the following provisions shall apply:
(a) Mergers and Reorganizations. If the Company or its
shareholders enter into an agreement to dispose of all or substantially
all of the assets of the Company by means of a sale, merger, or other
reorganization, liquidation or otherwise in a transaction in which the
Company is not the surviving Company, all Options shall become
immediately exercisable with respect to the full number of shares
subject to such Options during the period commencing as of the date of
the agreement to dispose of all or substantially all of the assets or
stock of the Company and ending when the disposition of assets or stock
contemplated by that agreement is consummated or the Options are
otherwise terminated in accordance with their provisions or the
provisions of this Plan, whichever occurs first; provided that no
Option will be immediately exercisable under this Section on account of
any agreement of merger or other reorganization when the shareholders
of the Company immediately before the consummation of the transaction
will own at least fifty percent (50%) of the total combined voting
power of all the classes of the stock entitled to vote of the surviving
entity
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<PAGE> 44
immediately after the consummation of the transaction. An Option shall
not become immediately exercisable, however, if the transaction
contemplated in the agreement is a merger or reorganization in which
the Company shall survive.
(b) Change in Control. In the event of a change in control or
threatened change in control of the Company after the completion of an
initial public offering of the Company's Common Stock, all Options
granted prior to the change in control or threatened change in control
shall become immediately exercisable. A "change in control" will be
deemed to have occurred for purposes hereof (i) upon the occurrence of
a change of stock ownership of the Company of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A
promulgated under the Exchange Act, and any successor Item of a similar
nature; or (ii) upon the acquisition of beneficial ownership, directly
or indirectly, by any person (as such term is used in Sections 13(d)
and 14(d)(2) of the Exchange Act) of securities of the Company
representing 33% or more of the combined voting power of the Company's
then outstanding securities; or (iii) upon a change during any period
of two (2) consecutive years of a majority of the members of the Board
for any reason, unless the election, or the nomination for election by
the Company's shareholders, of each director was approved by a vote of
a majority of the directors then still in office who were directors at
the beginning of the period; provided that a change in control will not
be deemed to have occurred for purposes hereof with respect to any
person meeting the requirements of clauses (i) and (ii) of Rule
13d-1(b)(1) promulgated under the Exchange Act.
2.13 Written Notice Required. Any Option shall be deemed to be
exercised for purposes of the Plan when written notice of exercise has been
received by the Company at its principal office from the person entitled to
exercise the Option and payment for the Plan Shares with respect to which the
Option is exercised has been received by the Company in accordance with Section
2.11.
2.14 Compliance with Securities Laws. Plan Shares shall not be issued
with respect to any Option unless the issuance and delivery of the Plan Shares
(and the exercise of an Option, if applicable) shall comply with all relevant
provisions of state and federal law (including without limitation (i) the
Securities Act, the rules and regulations promulgated thereunder, and (ii) the
requirements of any stock exchange upon which the Plan Shares may then be
listed) and shall be further subject to the approval of counsel for the Company
with respect to such compliance. The Committee may also require an Optionee to
furnish evidence satisfactory to the Company, including without limitation a
written and signed representation letter and consent to be bound by any transfer
restrictions imposed by law, legend, condition, or otherwise, that the Plan
Shares are being acquired only for investment and without any present intention
to sell or distribute the shares in violation of any state or federal law, rule,
or regulation. Further, each Optionee shall consent to the imposition of a
legend on the certificate representing the Plan Shares issued pursuant to the
exercise of an Option restricting their transfer as required by law or this
Section.
2.15 Employment or Service of Optionee. Nothing in the Plan or in any
Option granted hereunder shall confer upon any Employee any right to continued
employment by the Company or
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<PAGE> 45
any of its Subsidiaries or limit in any way the right of the Company or any
Subsidiary at any time to terminate or alter the terms of that employment.
Nothing in the Plan or in any Option granted hereunder shall confer upon any
Nonemployee Director or Advisor any right to continued service as a Nonemployee
Director or Advisor of the Company or any of its Subsidiaries or limit in any
way the right of the Company or any Subsidiary at any time to terminate or alter
the terms of that service.
2.16 Rights of Optionees Upon Termination of Employment or Service. In
the event an Optionee ceases to be an Employee, Nonemployee Director or Advisor
for any reason other than death, Retirement, Permanent Disability, for Cause or
upon providing certain required notice of termination prior to an annual
anniversary of an Employee's employment agreement with the Company, (i) the
Committee shall have the ability to accelerate the vesting of the Optionee's
Option, in its sole discretion, and (ii) such Optionee's Option shall be
exercisable (to the extent exercisable on the date of termination of employment
or rendition of services, or, if the vesting of such Option has been
accelerated, to the extent exercisable following such acceleration) at any time
within three (3) months after the date of termination of employment or rendition
of services, unless by its terms the Option expires earlier or unless, with
respect to a Nonqualified Stock Option, the Committee agrees, in its sole
discretion, to further extend the term of such Nonqualified Stock Option;
provided that the term of any such Nonqualified Stock Option shall not be
extended beyond its initial term. In the event an Optionee ceases to serve as an
Employee, Nonemployee Director or Advisor due to death, Permanent Disability,
Retirement, for Cause or upon providing certain required notice of termination
prior to an annual anniversary of an Employee's employment agreement with the
Company, an Optionee's Options may be exercised as follows:
(a) Death. Except as otherwise limited by the Committee at the
time of the grant of an Option, if an Optionee dies while serving as an
Employee, Nonemployee Director or Advisor or within three (3) months
after ceasing to be an Employee, Nonemployee Director or Advisor, his
Option shall become fully exercisable on the date of his death and
shall expire twelve (12) months thereafter, unless by its terms it
expires sooner or unless, with respect to a Nonqualified Stock Option,
the Committee agrees, in its sole discretion, to further extend the
term of such Nonqualified Stock Option; provided that the term of any
such Nonqualified Stock Option shall not be extended beyond its initial
term. During such period, the Option may be fully exercised, to the
extent that it remains unexercised on the date of death, by the
Optionee's personal representative or by the distributees to whom the
Optionee's rights under the Option shall pass by will or by the laws of
descent and distribution.
(b) Retirement. If an Optionee ceases to serve as an Employee,
Nonemployee Director or Advisor as a result of Retirement, (i) the
Committee shall have the ability to accelerate the vesting of the
Optionee's Option, in its sole discretion, and (ii) such Optionee's
Option shall be exercisable (to the extent exercisable on the effective
date of such Retirement or, if the vesting of such Option has been
accelerated, to the extent exercisable following such acceleration) at
any time within three (3) months after the effective date of such
Retirement, unless by its terms the Option expires earlier or unless,
with respect to a
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<PAGE> 46
Nonqualified Stock Option, the Committee agrees, in its sole
discretion, to further extend the term of such Nonqualified Stock
Option; provided that the term of any such Nonqualified Stock Option
shall not be extended beyond its initial term.
(c) Disability. If an Optionee ceases to serve as an Employee,
Nonemployee Director or Advisor as a result of Permanent Disability,
the Optionee's Option shall become fully exercisable and shall expire
twelve (12) months thereafter, unless by its terms it expires sooner
or, unless, with respect to a Nonqualified Stock Option, the Committee
agrees, in its sole discretion, to extend the term of such Nonqualified
Stock Option; provided that the term of any Option shall not be
extended beyond its initial term.
(d) Cause. If an Optionee ceases to be employed by the Company or
a Subsidiary or ceases to serve as a Nonemployee Director or Advisor
because the Optionee's relationship with the Company or a Subsidiary is
terminated for Cause, the Optionee's Options shall automatically expire
on the date of such termination. If any facts that would constitute
Cause for termination or removal of an Optionee are discovered after
the Optionee's relationship with the Company has ended, any Options
then held by the Optionee may be immediately terminated by the
Committee. Notwithstanding the foregoing, if an Optionee is an Employee
employed pursuant to a written employment agreement with the Company or
a Subsidiary, the Optionee's relationship with the Company or a
Subsidiary shall be deemed terminated for Cause for purposes of the
Plan only if the Optionee is considered under the circumstances to have
been terminated "for cause" for purposes of such written agreement or
the Optionee voluntarily ceases to be an Employee in breach of such
Optionee's employment agreement with the Company or a Subsidiary.
(e) Notice. If an Optionee's employment agreement with the Company
or a Subsidiary is terminated by either the Company, a Subsidiary or
the Optionee by providing certain required notices of termination prior
to an annual anniversary of such Optionee's employment agreement, the
Options that are vested as of the date of termination shall remain
exercisable for a period of twelve (12) months (three (3) months if
Incentive Stock Options) after the date of termination and shall expire
at the end of such twelve (12) month period (three (3) month period if
Incentive Stock Options).
2.17 Transferability of Options. Except as may be agreed upon by the
committee in accordance with the following paragraph, Options shall not be
transferable other than by will or the laws of descent and distribution or, with
respect to Nonqualified Stock Options, pursuant to the terms of a qualified
domestic relations order as defined by the Code or Title I of ERISA, or the
rules thereunder, and, with respect to Incentive Stock Options, may be exercised
during the lifetime of an Optionee only by that Optionee or by his legally
authorized representative. The designation by an Optionee of a beneficiary shall
not constitute a transfer of the Option.
The Committee may, in its discretion, provide in an Option Agreement
that Nonqualified Stock Options granted hereunder may be transferred by the
Optionee to members of his immediate
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<PAGE> 47
family, trusts for the benefit of such immediate family members and partnerships
in which such immediate family members are the only partners, provided that
there cannot be any consideration for the transfer.
2.18 Information to Optionees. The Company shall furnish to each
Optionee a copy of the annual report, proxy statements and all other reports
sent to the Company's shareholders. Upon written request, the Company shall
furnish to each Optionee a copy of its most recent Form 10-K Annual Report and
each quarterly report to shareholders issued since the end of the Company's most
recent fiscal year.
ARTICLE III
ADMINISTRATION
3.1 Committee. Subject to Section 3.2, the Plan shall be administered
by a Committee of not fewer than two members of the Board; provided, however
that the entire Board may exercise the functions of the Committee at any time.
Each member of the Committee shall be a "Non-Employee Director" within the
meaning of Rule 16b-3 and an "outside director" within the meaning of Section
162(m) of the Code. Subject to the provisions of the Plan, the Committee shall
have the sole discretion and authority to determine from time to time the
Employees, Nonemployee Directors, and Advisors to whom Options shall be granted
and the number of Plan Shares subject to each Option, to interpret the Plan, to
prescribe, amend and rescind any rules and regulations necessary or appropriate
for the administration of the Plan, to determine and interpret the details and
provisions of each Option Agreement, to modify or amend any Option Agreement or
waive any conditions or restrictions applicable to any Options (or the exercise
thereof), and to make all other determinations necessary or advisable for the
administration of the Plan.
3.2 Appointment of Committee. The Committee shall be appointed by the
Board; provided that the Board may remove any Committee member, with or without
cause.
3.3 Majority Rule; Unanimous Written Consent. A majority of the members
of the Committee shall constitute a quorum, and any action taken by a majority
present at a meeting at which a quorum is present or any action taken without a
meeting evidenced by a writing executed by all members of the Committee shall
constitute the action of the Committee. Meetings of the Committee may take place
by telephone conference call.
3.4 Company Assistance. The Company shall supply full and timely
information to the Committee on all matters relating to Employees, Nonemployee
Directors, and Advisors, their employment, death, Retirement, Permanent
Disability, or other termination of employment or service, and such other
pertinent facts as the Committee may require. The Company shall furnish the
Committee with such clerical and other assistance as is necessary in the
performance of its duties.
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<PAGE> 48
ARTICLE IV
INCENTIVE STOCK OPTIONS
4.1 Terms and Conditions. The terms and conditions of Options granted
under this Article may differ from one another as the Committee shall, in its
discretion, determine, as long as all Options granted under this Article satisfy
the requirements of this Article.
4.2 Duration of Options. Each Option granted pursuant to this Article
and all rights thereunder shall expire on the date determined by the Committee,
but in no event shall any Option granted under this Article expire earlier than
one (1) year or later than ten (10) years after the date on which the Option is
granted; provided, however, in the event of the grant of any Option to an
individual who, at the time the Option is granted, owns shares of stock
possessing more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or any Subsidiary or affiliate thereof within
the meaning of Section 422 of the Code, the Option must not be exercisable after
the expiration of five (5) years from the date of its grant. In addition, each
Option shall be subject to early termination as provided elsewhere in the Plan.
4.3 Purchase Price. The purchase price for Plan Shares acquired
pursuant to the exercise, in whole or in part, of any Option granted under this
Article shall not be less than the Fair Market Value of the Plan Shares at the
time of the grant of the Option; provided, however, in the event of the grant of
any Option to an individual who, at the time the Option is granted, owns shares
of stock possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or any Subsidiary or affiliate
thereof within the meaning of Section 422 of the Code, the purchase price for
the Plan Shares subject to that Option must be at least 110% of the Fair Market
Value of those Plan Shares at the time the Option is granted and the Option must
not be exercisable after the expiration of five (5) years from the date of its
grant.
4.4 Maximum Amount of Options First Exercisable in Any Calendar Year.
The aggregate Fair Market Value of Plan Shares (determined at the time the
Option is granted) with respect to which Options issued under this Article are
exercisable for the first time by any Employee during any calendar year under
all incentive stock option plans of the Company and its Subsidiaries and
affiliates shall not exceed $100,000. Any portion of an Option granted under the
Plan in excess of the foregoing limit shall be considered granted pursuant to
Article V.
4.5 Individual Option Agreements. Each Employee receiving Options
pursuant to this Article shall be required to enter into a written Option
Agreement with the Company. In such Option Agreement, the Employee shall agree
to be bound by the terms and conditions of the Plan, the Options made pursuant
hereto, and such other matters as the Committee deems appropriate.
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<PAGE> 49
ARTICLE V
NONQUALIFIED STOCK OPTIONS
5.1 Option Terms and Conditions. The terms and conditions of Options
granted under this Article may differ from one another as the Committee shall,
in its discretion, determine as long as all Options granted under this Article
satisfy the requirements of this Article.
5.2 Duration of Options. Each Option granted pursuant to this Article
and all rights thereunder shall expire on the date determined by the Committee,
but in no event shall any Option granted under this Article expire later than
ten (10) years after the date on which the Option is granted. In addition, each
Option shall be subject to early termination as provided elsewhere in the Plan.
5.3 Purchase Price. The Committee may elect to grant Options pursuant
to this Article at an exercise price less than the Fair Market Value of the Plan
Shares at the time of the grant of the Option.
5.4 Individual Option Agreements. Each Optionee receiving Options
pursuant to this Article shall be required to enter into a written Option
Agreement with the Company. In such Option Agreement, the Optionee shall agree
to be bound by the terms and conditions of the Plan, the Options made pursuant
hereto, and such other matters as the Committee deems appropriate.
5.5 Automatic Grants of Options to Nonemployee Directors. Each
Nonemployee Director shall automatically be granted a Nonqualified Stock Option
to purchase 20,000 shares of Common Stock upon initial election or appointment
to the Board. Each Nonemployee Director will receive a Nonqualified Stock Option
to purchase 5,000 shares of Common Stock on the date of each annual meeting of
shareholders of the Company subsequent to his initial election as a director.
The purchase price for Plan Shares acquired pursuant to the exercise, in whole
or in part, of any Option received by Nonemployee Directors shall be the Fair
Market Value of the Plan Shares on the date of grant of such Option. Each Option
shall become exercisable on the first anniversary of the date of grant of such
Option. Each Option shall expire on the day prior to the tenth anniversary of
the date of grant of such Option, unless otherwise specified herein.
ARTICLE VI
TERMINATION, AMENDMENT, AND ADJUSTMENT
6.1 Termination and Amendment. The Plan shall terminate on April 30,
2009. No Option shall be granted under the Plan after that date of termination.
The Board may at any time terminate or amend the Plan or any provision of the
Plan. No termination or amendment of the Plan may, without the consent of the
Optionee to whom any Option has been granted, adversely affect the rights of
such Optionee under such Option nor may any amendment be made without the prior
approval of the Company's shareholders if such amendment would:
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<PAGE> 50
(a) increase the number of shares of Common Stock that may be
issued pursuant to the Plan as provided in Section 6.2;
(b) change the designation or class of Employees eligible for
participation in the Plan; or
(c) require approval of the Company's shareholders under any
applicable law, regulation or stock exchange rule.
provided that prior approval of the Company's shareholders with respect to the
foregoing shall be required only to the extent required by any statutory law,
regulation or stock exchange rule.
6.2 Adjustments. If the outstanding Common Stock is increased,
decreased, changed into, or exchanged for a different number or kind of shares
or securities through merger, consolidation, combination, exchange of shares,
other reorganization, recapitalization, reclassification, stock dividend, stock
split, or reverse stock split, an appropriate and proportionate adjustment shall
be made in the maximum number and kind of Plan Shares as to which Option may be
granted under the Plan. A corresponding adjustment changing the number or kind
of shares allocated to unexercised Options or portions thereof, which shall have
been granted prior to any such change, shall likewise be made. Any such
adjustment in outstanding Options shall be made without change in the aggregate
purchase price applicable to the unexercised portion of the Options, but with a
corresponding adjustment in the price for each share covered by the Options. The
foregoing adjustments and the manner of application of the foregoing provisions
shall be determined solely by the Committee, and any such adjustment may provide
for the elimination of fractional share interests.
ARTICLE VII
MISCELLANEOUS
7.1 Other Compensation Plans. The adoption of the Plan shall not affect
any other stock option or incentive or other compensation plans in effect for
the Company or any Subsidiary or affiliate of the Company, nor shall the Plan
preclude the Company or any Subsidiary or affiliate thereof from establishing
any other forms of incentive or other compensation plans.
7.2 Plan Binding on Successors. The Plan shall be binding upon the
successors and assigns of the Company and any Subsidiary or affiliate of the
Company that adopts the Plan.
7.3 Number and Gender. Whenever used herein, nouns in the singular
shall include the plural where appropriate, and the masculine pronoun shall
include the feminine gender.
7.4 Headings. Headings of articles and sections hereof are inserted for
convenience of reference and constitute no part of the Plan.
7.5 Choice of Law. The Plan shall be governed and construed in
accordance with the laws of the State of Texas.
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<PAGE> 51
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 at Omni Dallas Hotel Park West, 1590 LBJ
Freeway, Dallas, Texas 75234, on July 6, 1999, at 10:00 a.m. (Dallas, Texas
Time) and the Proxy Statement in connection therewith, each dated April 30,
1999, (b) appoints each of Soren Bjorn and Charles Horne 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. AMENDMENT TO COMPANY'S ARTICLES OF INCORPORATION -- Approval of the
amendment to the Company's Articles of Incorporation which changes the
Company's name to "Sunfresh, Inc.".
For [ ]
Against [ ]
Abstain [ ]
2. ELECTION OF DIRECTORS -- Nominees: Rafael Vaquero Bazan, Eduardo
Vaquero Bazan, Fernando Camacho Casas, Jakes Jordaan, Jose Martinez
Brohez, Federico Chavez Peon, Luis A. Chico Pardo, Jose I. De Abiega
Pons, Soren Bjorn, Jerry W. Johnson
For All [ ]
Withhold All [ ]
For All Except [ ]
(Except Nominee(s) written above)
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)
<PAGE> 52
3. 1999 STOCK OPTION PLAN -- Approval of the Company's 1999 Stock Option
Plan.
For [ ]
Against [ ]
Abstain [ ]
4. RATIFICATION OF INDEPENDENT AUDITOR -- 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, 1999.
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
disposition of the Proxies.
Dated: _______________, 1999
Signature(s): ______________________
IMPORTANT. Please date and sign When shares are held by joint
exactly as the name tenants, both should sign. When
appears below. 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.
YOUR VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY
USING THE ENCLOSED POSTAGE-PAID ENVELOPE.
<PAGE> 53
[Jakes Jordaan, PLLC letterhead]
June 9, 1999
Securities and Exchange Commission
450 5th Street, N.W.
Washington, D.C. 20549
Re: The UniMark Group, Inc. (Nasdaq: UNMG)
Dear Sir or Madam:
The UniMark Group, Inc., a Texas corporation, is filing through the
EDGAR system simultaneously herewith its definitive Proxy Statement pursuant to
Section 14(a) of the Securities Exchange Act of 1934, as amended.
Please contact me at 214-871-6555 with any questions or comments you
may have.
Very truly yours,
/s/ Jakes Jordaan
-----------------------
Jakes Jordaan
Enclosure
cc: The UniMark Group, Inc.
