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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
(AMENDMENT NO. 1)
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 Rule 14a-11(c) or Rule 14a-12.
ZEMEX CORPORATION
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: .......
(2) Aggregate number of securities to which transaction applies: ..........
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ............
(4) Proposed maximum aggregate value of transaction: ......................
(5) Total fee paid: .......................................................
[ ] 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: ...............................................
(2) Form, Schedule or Registration Statement No.: .........................
(3) Filing Party: .........................................................
(4) Date Filed: ...........................................................
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ZEMEX CORPORATION
Canada Trust Tower, BCE Place
161 Bay Street, Suite 3750
P.O. Box 703
Toronto, Ontario
Canada M5J 2S1
NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS
THURSDAY JUNE 29, 2000
11:30 A.M.
To the Shareholders:
Notice is hereby given that the Annual and Special Meeting of Shareholders of
Zemex Corporation will be held in the Patty Watt Room at the Design Exchange,
234 Bay Street, Toronto, Ontario, M5K 1B2, on Thursday June 29, 2000 at 11:30
a.m. (Toronto time) for the following purposes:
1. to receive the audited consolidated financial statements of the
Corporation for the fiscal year ended December 31, 1999, together with
the auditors' report thereon;
2. to elect directors of the Corporation;
3. to ratify the appointment of Deloitte & Touche LLP, as independent
public auditors of the Corporation and to authorize the directors to
fix the remuneration to be paid to the auditors;
4. to approve an increase in the number of authorized options under the
Corporation's 1999 Stock Option Plan; and
5. to transact such other business as may properly come before the
meeting.
The accompanying proxy statement provides additional information relating to the
matters to be dealt with at the meeting and forms part of this notice.
If you are unable to attend the meeting in person, please sign and date the
enclosed proxy and return it promptly in the enclosed envelope. Any person
giving a proxy has the power to revoke it at any time prior to its exercise at
the meeting. Even though you execute the proxy, you may still vote your stock in
person at the meeting. It is important that your stock be represented regardless
of the number of shares you may hold. We hope that you can attend the meeting.
By Order of the Board of Directors,
Toronto, Ontario Patricia K. Moran
May 17, 2000 Corporate Secretary and Assistant Treasurer
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ZEMEX CORPORATION
Canada Trust Tower, BCE Place
161 Bay Street, Suite 3750
P.O. Box 703
Toronto, Ontario
Canada M5J 2S1
PROXY STATEMENT
SOLICITATION OF PROXIES
The information contained in this proxy statement is furnished in connection
with the solicitation of proxies by Zemex Corporation (the "Corporation" or
"Zemex"), a company incorporated under the Canada Business Corporations Act, to
be used at the Annual and Special Meeting of Shareholders (the "Meeting") of the
Corporation to be held in the Patty Watt Room at the Design Exchange, 234 Bay
Street, Toronto, Ontario, M5K 1B2 on Thursday June 29, 2000 at 11:30 a.m. and at
any adjournment thereof for the purposes set forth in the accompanying notice of
meeting. This proxy statement and the accompanying notice of meeting and form of
proxy are being mailed to the Corporation's shareholders commencing on or about
May 18, 2000. The Corporation's Annual Report on Form 10-K for the year ended
December 31, 1999, which includes its financial statements, was mailed on or
about April 14, 2000 to each shareholder of record as of the close of business
on March 30, 2000. Such annual report, however, is not to be deemed to be part
of this proxy solicitation material.
THE CORPORATION WILL PROVIDE, WITHOUT CHARGE, A COPY OF ITS ANNUAL REPORT ON
FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1999 TO ANY SHAREHOLDER WHOSE PROXY IS
SOLICITED HEREBY, UPON WRITTEN REQUEST DIRECTED TO THE CORPORATE SECRETARY AND
ASSISTANT TREASURER, ZEMEX CORPORATION, CANADA TRUST TOWER, BCE PLACE, 161 BAY
STREET, SUITE 3750, TORONTO, ONTARIO, M5J 2S1.
The expense of solicitation of proxies will be borne by the Corporation.
Following the mailing of the proxy material, solicitation of proxies may be made
by mail, telephone, facsimile, telegram or personal interview by directors,
officers or regular employees of the Corporation or its subsidiaries, who will
receive no additional compensation for their services. The Corporation has also
retained Georgeson Shareholder Communications Inc. to solicit proxies personally
or by mail, telephone, facsimile, or telegraph from brokerage houses,
custodians, fiduciaries and nominees for a fee of $4,500 plus expenses. In
addition, the Corporation will reimburse brokers and other nominees for their
expenses in forwarding soliciting material to beneficial owners.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The Corporation's board of directors (the "Board") has fixed the close of
business on May 17, 2000 as the record date for the determination of
shareholders of the Corporation entitled to vote at the Meeting. As of April 15,
2000, the Corporation had approximately 8,899,224 common shares (the "Common
Shares") issued and outstanding.
Each Common Share is entitled to one vote. Two shareholders present in person or
by proxy are required in order to constitute a quorum for the transaction of
business. Abstentions are treated as present and
ZEMEX CORPORATION 1
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entitled to vote, and will have the effect of a vote against any matter
requiring the affirmative vote of a majority of the Common Shares present and
entitled to vote at the Meeting.
As indicated on page 7 under the heading "Principal Shareholders and Security
Ownership of Management", The Dundee Bank, beneficially owns 33.8% of the issued
and outstanding Common Shares of the Corporation.
APPOINTMENT AND REVOCATION OF PROXIES
The persons named as proxies in the enclosed form of proxy accompanying this
proxy statement are directors and/or officers of the Corporation. A shareholder
of the Corporation has the right to appoint a person other than the person
specified in such form of proxy and who need not be a shareholder of the
Corporation to attend and act for him/her and on his/her behalf at the Meeting.
Such rights may be exercised by striking out the name of the persons specified
in the form of proxy, inserting the name of the person to be appointed in the
blank space provided in the form of proxy, signing the form of proxy and
returning it in the reply envelope in the manner set forth in the accompanying
notice of meeting.
ANY SHAREHOLDER GIVING A PROXY IN THE ACCOMPANYING FORM OF PROXY HAS THE RIGHT
TO REVOKE IT AT ANY TIME PRIOR TO THE VOTING THEREOF BY DELIVERY OF NOTICE OF
REVOCATION TO THE CORPORATION OR BY DELIVERY OF A SUBSEQUENT PROXY UP TO 4:00
P.M. (TORONTO TIME) ON THE BUSINESS DAY PRECEDING THE DATE OF THE MEETING, OR
ANY ADJOURNMENT THEREOF. SUCH NOTICES OF REVOCATION SHOULD BE ADDRESSED TO
EITHER OF THE ADDRESSES LISTED BELOW:
ZEMEX CORPORATION CIBC MELLON TRUST COMPANY
CANADA TRUST TOWER, BCE PLACE 200 QUEEN'S QUAY EAST
161 BAY STREET, SUITE 3750 UNIT #6
TORONTO, ONTARIO TORONTO, ONTARIO
CANADA, M5J 2S1 CANADA M5A 4K9
ATTENTION: CORPORATE SECRETARY ATTENTION: PROXY DEPARTMENT
TELEPHONE: (416) 365-8080 TELEPHONE: (416) 643-5500
FAX: (416) 365-8094 FAX: (416) 368-2502
WRITTEN REVOCATION MAY ALSO BE SUBMITTED TO THE CHAIRMAN OF THE MEETING PRIOR TO
THE COMMENCEMENT OF THE MEETING ON THE DATE OF THE MEETING OR ANY ADJOURNMENT
THEREOF OR IN ANY OTHER MANNER PERMITTED BY LAW.
VOTING OF SHARES REPRESENTED BY MANAGEMENT PROXIES
The persons named as proxies in the enclosed form of proxy will vote the shares
in respect of which they are appointed by proxy on any ballot that may be called
for in accordance with the instructions therein. In the absence of such
specification, such shares will be voted in favour of each of the matters
referred to herein.
The enclosed form of proxy confers discretionary authority upon the persons
named therein with respect to amendments to or variations of matters identified
in the notice of meeting and with respect to other matters, if any, which may
properly come before the Meeting. At the date of this proxy statement, the
management of the Corporation knows of no such amendments, variations or other
matters to come before the Meeting. However, if any other matters, which are not
known to management, should
ZEMEX CORPORATION 2
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properly come before the Meeting, the proxy will be voted on such matters in
accordance with the best judgment of the named proxy.
DOLLAR FIGURES
Unless expressly stated to the contrary, all "$" figures contained in this proxy
statement refer to U.S. dollars.
BUSINESS OF THE MEETING
ELECTION OF DIRECTORS
A board of eight directors is to be elected at the Meeting. All directors so
elected will hold office until the next annual meeting of shareholders of the
Corporation or until their successors are elected or appointed. It is not
expected that any nominee will be unable or will decline to serve as a director;
however, if that should occur for any reason at or prior to the Meeting, the
persons named in the enclosed form of proxy reserve the right to vote for the
nominee designated by the present Board to fill the vacancy.
Unless otherwise instructed, the management representatives named in the
enclosed form of proxy will vote the proxies received by them for the
Corporation's eight nominees named below, all of whom are presently directors of
the Corporation, unless the shareholder who has given such proxy has directed
that the shares be withheld from voting in the election of directors.
Opposite the name of each nominee for election as a director is (i) his age;
(ii) his position with the Corporation, his principal occupation and his
business experience during the past five years; and (iii) the year in which he
first became a director of the Corporation. All information is as of April 15,
2000.
PROPOSAL I
NOMINEES FOR ELECTION AS A DIRECTOR
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POSITION WITH THE CORPORATION;
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE DURING DIRECTOR
NAME AGE PAST FIVE YEARS SINCE
- ---------------------------------------------------------------------------------------------------------------
Paul A. Carroll 59 Chairman of the Executive Compensation / Pension 1991
Committee; Member of the Corporate Governance
Committee; Counsel to Gowling, Strathy & Henderson
(Toronto law firm) since May 1999; Chairman and Chief
Executive Officer, World Wide Minerals Ltd.
(Toronto-based mining company) since January 1997;
Counsel, Smith Lyons (Toronto law firm) from 1997-1999
and prior thereto Partner of Smith Lyons since 1973;
Chairman, Juno Limited; Director, Dundee Bancorp Inc.;
Director, Tahera Corporation; Director, United Keno
Hill Mines Ltd.
- ---------------------------------------------------------------------------------------------------------------
Morton A. Cohen 64 Chairman, President and Chief Executive Officer, 1991
- ---------------------------------------------------------------------------------------------------------------
Clarion Capital Corporation (Cleveland-based venture
capital company); Chairman, Cohesant Technologies,
Inc.; Director, DHB Capital Group
ZEMEX CORPORATION 3
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- ---------------------------------------------------------------------------------------------------------------
POSITION WITH THE CORPORATION;
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE DURING DIRECTOR
NAME AGE PAST FIVE YEARS SINCE
- ---------------------------------------------------------------------------------------------------------------
John M. Donovan 72 Chairman of the Audit Committee; Member of the 1991
Executive Compensation / Pension Committee and the
Executive Committee; Independent Consultant; Director,
Philex Gold Inc.
- ---------------------------------------------------------------------------------------------------------------
R. Peter Gillin 51 Chairman of the Corporate Governance Committee; Vice 1999
Chairman and Director, N M Rothschild & Sons Canada
Limited (investment bank) since 1996; prior to 1996,
Managing Director, ScotiaMcLeod Inc.
- ---------------------------------------------------------------------------------------------------------------
Peter Lawson-Johnston 73 Chairman of the Board of Directors, Member of the 1960
Executive Compensation / Pension Committee, Member of
the Executive Committee; Honorary Chairman and Trustee,
Solomon R. Guggenheim Foundation; Chairman of the
Board, The Harry Frank Guggenheim Foundation; Senior
Partner, Guggenheim Brothers; President and Director,
Elgerbar Corporation; Director, National Review, Inc.;
Limited Partner Emeritus, Alex Brown & Sons, Inc.
- ---------------------------------------------------------------------------------------------------------------
Richard L. Lister 61 President and Chief Executive Officer of the 1991
Corporation since May 1993; Chairman of the Executive
Committee; Director, Dundee Bancorp Inc.
- ---------------------------------------------------------------------------------------------------------------
Garth A.C. MacRae 66 Member of the Audit and Executive Committees; Vice 1998
Chairman and Director, Dundee Bancorp Inc.; Director of
Breakwater Resources Ltd.; Director, Dundee Precious
Metals Inc.; Director, Black Hawk Mining Inc.;
Director, Dimethaid Research Inc.; Director, Reserve
Royalty Corporation; Director, Eurogas Corporation;
Director, Dundee Wealth Management Inc.
- ---------------------------------------------------------------------------------------------------------------
William J. vanden Heuvel 69 Member of the Audit and Corporate Governance 1989
Committees; Counsel, Stroock, Stroock & Lavan
(attorneys at law, New York); Senior Advisor, Allen &
Company Inc. (investment bankers); Chairman of the
Board, IRC Group, Inc.; Co-Chairman, Council of
American Ambassadors; Director, Winstar Communications,
Inc.
- ---------------------------------------------------------------------------------------------------------------
VOTE REQUIRED FOR ELECTION OF DIRECTORS
Directors will be elected at the Meeting by a majority of the votes cast at the
Meeting by the holders of Common Shares represented in person or by proxy. Votes
may be cast for, or withheld from, each nominee.
THE BOARD RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH OF THE FOREGOING PERSONS.
ZEMEX CORPORATION 5
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PROPOSAL II
AUDITORS
RATIFICATION OF AUDITORS
Deloitte & Touche LLP, independent certified public accountants, were first
appointed auditors of the Corporation in 1993. The management representatives in
the enclosed form of proxy intend to vote the shares represented by such proxy
in favour of a resolution ratifying the appointment of Deloitte & Touche LLP as
independent auditors of the accounts of the Corporation and its subsidiaries for
the fiscal year ending December 31, 2000 and authorizing the Board to fix the
remuneration of the auditors, unless the shareholder who has given such proxy
has directed that the shares represented thereby be withheld from voting in the
ratification of the appointment of auditors. Representatives of Deloitte &
Touche LLP will be present at the Meeting and will be available to respond to
questions and may make a statement if they so desire.
VOTE REQUIRED FOR RATIFICATION OF AUDITORS
Ratification of the appointment of the auditors requires the affirmative vote of
a majority of the votes cast by holders of Common Shares represented in person
or by proxy.
THE BOARD UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS INDEPENDENT AUDITORS
FOR THE FISCAL YEAR ENDING DECEMBER 31, 2000.
PROPOSAL III
INCREASE IN NUMBER OF AUTHORIZED OPTIONS
UNDER THE CORPORATION'S 1999 STOCK OPTION PLAN
On October 20, 1999, the Board approved a resolution increasing the number of
Common Shares reserved for issuance under the Corporation's 1999 Stock Option
Plan, a plan which was approved by the Corporation's shareholders on May 10,
1999 (the "1999 Stock Option Plan"), to 372,543, or 4.2% of the Corporation's
then issued and outstanding capital. This represents an increase of 100,000
Common Shares over the number of shares currently reserved for issuance under
the 1999 Stock Option Plan, of which 270,650 options are outstanding. The Board
approved the increase based on, among other things, a determination that the
remaining number of Common Shares reserved for issuance under the 1999 Stock
Option Plan was insufficient to incentivize and reward officers, directors and
employees who join the Corporation or deserve to be rewarded for their service
and dedication to the Corporation.
Any increase in the number of Common Shares reserved for issuance under a stock
option plan is subject to approval by The Toronto Stock Exchange (the "TSE").
The Corporation received conditional approval from the TSE on December 21, 1999
with respect to the foregoing increase, subject to approval of the Corporation's
shareholders.
Under the TSE's rules, all interested parties (being parties currently holding
options under the Plan) must refrain from voting their Common Shares, whether
held directly or indirectly, on the motion to approve the increase in the number
of Common Shares reserved for issuance under the 1999 Stock Option Plan.
ZEMEX CORPORATION 6
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As of April 15, 2000, a total of 1,116,039 Common Shares of the Corporation were
held by interested parties, their affiliates and associates, representing 12.5%
of the total outstanding at such date.
In anticipation of shareholder approval of the foregoing increase in the number
of Common Shares reserved for issuance under the 1999 Stock Option Plan, on
October 20, 1999 the board granted 10,000 options in aggregate at a price of
$7.50 per Common Share to an employee in satisfaction of a condition of his
employment.
In accordance with the rules of the TSE, these options cannot be exercised until
shareholders have approved the increase in the number options available under
the 1999 Stock Option Plan described above.
VOTE REQUIRED FOR APPROVAL OF INCREASE IN NUMBER OF SHARES RESERVED FOR
AUTHORIZED OPTIONS
The resolution approving the increase in the number of Common Shares reserved
for issuance under the Corporation's 1999 Stock Option Plan from 272,543 to
372,543 requires the affirmative vote in respect thereof of a majority of the
votes cast by holders of Common Shares represented in person or by proxy,
excluding any votes cast by directors, officers and insiders of the Corporation
who may participate in the Plan, and their associates. Accordingly, the votes by
the directors, officers and insiders and their associates, representing
approximately 1,116,039 votes, will be excluded in counting the votes cast to
approve the foregoing amendment to the Plan.
THE BOARD UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE APPROVAL
OF THE INCREASE IN THE NUMBER OF COMMON SHARES RESERVED FOR ISSUANCE UNDER THE
1999 STOCK OPTION PLAN.
REPORTS REQUIRED BY SECTION 16(A)
Section 16(a) of the Securities Exchange Act of 1934 requires the Corporation's
directors and executive officers, and persons who own more than 10% of the
Corporation's Common Shares to file reports of ownership and changes in
ownership of the Corporation's Common Shares with the Securities and Exchange
Commission and any exchange on which the Corporation's Common Shares are traded.
Based solely on its review of the copies of Forms 3, 4 and 5 received by the
Corporation, or written representations from certain reporting persons that no
Form 5s were required for such persons, the Corporation believes that, during
the fiscal year ended December 31, 1999, all Section 16(a) filing requirements
applicable to its officers, directors and 10% shareholders were complied with.
ZEMEX CORPORATION 7
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PRINCIPAL SHAREHOLDERS AND SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of December 31, 1999, information concerning
the Common Shares beneficially owned by each person who, to the knowledge of the
Corporation, is the holder of 5% or more of the Common Shares of the
Corporation, each director, and each Named Officer (as defined on page 12 under
the heading "Executive Compensation") who was an executive officer as of that
date, and all executive officers and directors of the Corporation as a group.
Except as otherwise noted, each beneficial owner has sole investment and voting
power with respect to the listed shares.
SHARES PERCENTAGE
NAME OF BENEFICIAL OWNER(1)(2)(3) BENEFICIALLY OWNED(4) BENEFICIALLY OWNED
- -------------------------------------------------------------------------------------------------------------------
The Dundee Bank 2,995,175 33.7%
P.O. Box HM 2706
Hamilton, HM KX
Bermuda
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Paul A. Carroll 33,769 (5)(6) *
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Morton A. Cohen 312,636 (5)(6)(7) 3.5%
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John M. Donovan 26,096 (5)(6) *
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R. Peter Gillin 8,500 (5) *
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Peter O. Lawson-Johnston 93,268 (5)(6)(8) 1.0%
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Richard L. Lister 762,170 (6)(9)(10)(11)(13) 8.4%
Canada Trust Tower, BCE Place
161 Bay Street, Suite 3750
Toronto, Ontario, Canada M5J 2S1
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Garth A.C. MacRae 7,500 (5) *
- -------------------------------------------------------------------------------------------------------------------
William J. vanden Heuvel 38,772 (5)(6) *
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Allen J. Palmiere 33,020 (6)(10) *
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Peter J. Goodwin 97,896 (10)(13) 1.1%
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Terrance J. Hogan 105,196 (10)(12)(13) 1.2%
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George E. Gillespie 67,965 (10)(13) *
- -------------------------------------------------------------------------------------------------------------------
All Directors and Named Officers 1,586,789 (5)(6)(7)(8)(9)(10)(11)(12)(13) 17.0%
as a group (12 persons)
- -------------------------------------------------------------------------------------------------------------------
* Denotes less than 1% of Common Shares outstanding
(1) A Schedule 13G, prepared for Merrill Lynch & Co., Inc. (on behalf of
Merrill Lynch Asset Management Group ("AMG")), was filed with the
Securities and Exchange Commission indicating that AMG could be construed
to be a beneficial owner of 863,610 Common Shares as of December 31, 1999.
However, AMG disclaims any beneficial ownership of the Common Shares
because they are held in proprietary trading accounts.
(2) Franklin Resources, Inc. ("Franklin") has filed a Schedule 13G with the
Securities and Exchange Commission indicating that Franklin could be
deemed to be a beneficial owner of 450,000 Common Shares as of December
31, 1999. However, Franklin disclaims any beneficial ownership of the
ZEMEX CORPORATION 8
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Common Shares as they are owned by one or more open or closed-end
investment companies or held in discretionary accounts managed by
Franklin.
(3) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 493,616 Common Shares
of Zemex Corporation as of December 31, 1999, all of which Common Shares
are held in portfolios of DFA Investment Dimensions Group Inc., a
registered open-end investment company, or in series of the DFA Investment
Trust Company, a Delaware business trust, or the DFA Group Trust and DFA
Participation Group Trust, investment vehicles for qualified employee
benefit plans, all of which Dimensional serves as investment manager.
Dimensional disclaims beneficial ownership of all such Common Shares.
(4) Computed in accordance with Rule 13d-3(d)(1) of the Securities Exchange
Act of 1934, as amended.
(5) Messrs. Carroll, Cohen, Donovan, Lawson-Johnston and vanden Heuvel were
granted options for 5,000 Common Shares at $9.125 per Common Share
exercisable in two instalments of 2,500 each beginning on February 8, 1996
and February 8, 1997, respectively, and expiring on February 8, 2001.
Additionally, on April 21, 1997, Messrs. Carroll, Cohen, Donovan,
Lawson-Johnston and vanden Heuvel were granted options for 10,000 Common
Shares at $7.00 per Common Share exercisable in two instalments of 5,000
each beginning on April 21, 1998 and April 21, 1999, respectively. These
options expire April 21, 2003. On May 15, 1998, Messrs. Carroll, Cohen,
Donovan, Lawson-Johnston and vanden Heuvel were granted options for an
additional 7,500 Common Shares at $10.1875 per Common Share exercisable in
two instalments of 3,750 each beginning on May 15, 1999 and May 15, 2000,
respectively. These options expire May 15, 2004. On October 1, 1998, upon
joining the Board, Mr. MacRae was granted options for 15,000 Common Shares
at $6.50 per Common Share exercisable in two instalments of 7,500 each
beginning on October 1, 1999 and October 1, 2000, respectively, and
expiring on October 1, 2004. On January 15, 1999, upon joining the Board,
Mr. Gillin was granted options for 15,000 Common Shares at $6.5625 per
Common Share exercisable in two instalments of 7,500 each beginning on
January 15, 2000 and January 15, 2001, respectively, and expiring on
January 15, 2005. On May 26, 1999, stock options for 15,000 Common Shares
at $6.2625 per Common Share were granted to Messrs. Cohen, Donovan,
Lawson-Johnston, and vanden Heuvel exercisable in two instalments of 7,500
each beginning on May 26, 2000 and May 26, 2001, respectively, and expire
on May 26, 2009. Additionally on May 26, 1999, stock options for 7,500
Common Shares at $6.2625 per Common Share were granted to Messrs. Carroll,
Gillin and MacRae; these stock options are exercisable in two instalments
of 3,750 each beginning on May 26, 2000 and May 26, 2001, respectively,
and expiring on May 26, 2009.
(6) Each of these directors and members of management purchased 5,000 Common
Shares from G.E. Wood, former President and Chief Executive Officer, as
part of an assignment of the Corporation's settlement agreement with Mr.
Wood dated August 10, 1993.
(7) Includes 288,040 Common Shares owned by Clarion Capital Corporation, a
company of which Mr. Cohen may be deemed to be the beneficial owner.
(8) Includes 18,733 Common Shares beneficially owned by Elgerbar Corporation.
Mr. Lawson-Johnston is President and Director of Elgerbar Corporation and
has shared voting and investment power with respect to the Common Shares
held by it.
ZEMEX CORPORATION 9
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(9) In 1991, Richard L. Lister, President and Chief Executive Officer of the
Corporation, acquired 357,000 Common Shares under the Corporation's Key
Executive Stock Purchase Plan for an aggregate purchase price of
$1,749,300 ($4.90 per share). The Corporation loaned Mr. Lister the full
amount of the purchase price. This non-interest bearing loan, which was
originally scheduled to mature in 1997, is reviewed annually by the Board
and extended at that time. The loan is evidenced by a promissory note. If
Mr. Lister leaves the employ of the Corporation at any time prior to full
payment of the loan, the principal amount will be due in full 30 days
after the date his employment terminates. Any balance remaining unpaid on
the loan after it is due will bear interest at the prime rate plus 1.0%.
So long as the loan is outstanding, Mr. Lister is required to vote the
357,000 Common Shares in a manner consistent with the recommendation of
the Board.
(10) Includes Common Shares issuable upon exercise of vested options as
follows: Mr. Lister, 140,000 Common Shares; Mr. Palmiere, 27,500 Common
Shares; Mr. Goodwin, 72,500 Common Shares; Mr. Hogan, 59,500 Common
Shares; Mr. Gillespie, 62,500 Common Shares; and all Named Officers and
directors as a group, 470,750 Common Shares.
(11) During 1997, the Corporation agreed to guarantee a personal loan in the
amount of $600,000 drawn down by Mr. Lister. The proceeds of the loan were
used to acquire 85,700 Common Shares on the open market. These Common
Shares are held by the Corporation as security for the loan guarantee.
(12) As part of the Corporation's purchase of Alumitech, Inc., in May 1995, Mr.
Hogan was issued 28,558 Common Shares and options for an additional 22,000
Common Shares at $9.75 per share exercisable in two instalments of 11,000
Common Shares each beginning on May 12, 1996 and May 12, 1997,
respectively, in exchange for his interest in Alumitech, Inc. The options
expire on May 12, 2001.
(13) Includes Common Shares purchased from January 1, 1995 to December 31,
1999, plus any applicable dividends, in accordance with the terms and
conditions of the Corporation's employee stock purchase plan as follows:
Mr. Lister, 31,302 Common Shares; Mr. Goodwin, 18,090 Common Shares; Mr.
Hogan 12,442 Common Shares; and Mr. Gillespie, 4,495 Common Shares.
REPORT OF THE
EXECUTIVE COMPENSATION / PENSION COMMITTEE
The following is the report of the Executive Compensation / Pension Committee of
the Corporation describing the compensation policies and rationale with respect
to compensation paid to executive officers for the year ended December 31, 1999.
The information contained in the report shall not be deemed to be "soliciting
material" or to be "filed" with the Securities and Exchange Commission nor shall
such information be incorporated by reference into any future filing under the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as
amended, except to the extent that the Corporation specifically incorporates it
by reference into such filing.
The Corporation applies a consistent philosophy to compensation for all
employees. This philosophy is based on the premise that the achievements of the
Corporation result from the co-ordinated efforts of all individuals working
toward common objectives. The Corporation strives to achieve those objectives
through teamwork that is focused on meeting the expectations of customers and
shareholders.
ZEMEX CORPORATION 10
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COMPENSATION PHILOSOPHY
The goals of the compensation program are to align compensation with business
objectives and performance, and to enable the Corporation to attract, retain and
reward executive officers who contribute to the long term success of the
Corporation. The Corporation's compensation program for executive officers,
including the President and Chief Executive Officer (CEO), is based on the same
five principles applicable to compensation decisions for all employees of the
Corporation:
o The Corporation pays competitively. The Corporation is committed to
providing a pay program that helps attract and retain the best
people in the industry. To ensure that pay is competitive, the
Corporation regularly compares its pay practices with those of other
leading companies and sets its pay parameters based on this review.
o The Corporation pays for relative sustained performance. Executive
officers are rewarded based upon corporate performance, business
unit performance and individual performance. Corporate performance
and business unit performance are evaluated by reviewing the extent
to which strategic and business plan goals are met, including such
factors as operating profit, performance relative to competitors,
new product introductions and execution of long term strategy.
Individual performance is evaluated by reviewing organizational and
management development progress against set objectives and the
degree to which teamwork and Corporation values are fostered.
o The Corporation strives for fairness in the administration of pay.
o The Corporation strives to achieve a balance of the compensation
paid to a particular individual and the compensation paid to other
executives both inside the Corporation and at comparable companies.
o The Corporation believes that employees should understand how the
performance evaluation and pay administration process works.
The process of assessing performance is as follows:
o At the beginning of the performance cycle, the evaluating manager
sets objectives and key goals and submits these for review by the
head of that division and the President and CEO of the Corporation.
o The evaluating manager gives the employee ongoing feedback on
performance.
o At the end of the performance cycle, the manager evaluates the
employee's accomplishment of objectives / key goals.
o The manager compares the results to the results of peers within the
operating unit.
ZEMEX CORPORATION 11
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o The evaluating manager communicates the comparative results to the
employee.
o The comparative results affects decisions on salary, bonuses and
stock options.
COMPENSATION
The Corporation has had a history of using a simple total compensation program
that consists of cash and, since 1990, equity-based compensation. Having a
compensation program that allows the Corporation to successfully attract and
retain key employees permits it to provide useful products and services to
customers, enhance shareholder value, motivate technological innovation, foster
teamwork, and adequately reward employees. The compensation vehicles are:
o CASH-BASED COMPENSATION
Salary: The Corporation sets base salary for employees by reviewing
the aggregate of base salary and annual bonus for competitive
positions in the market.
o EQUITY-BASED COMPENSATION
Stock Option Program: The purpose of this program is to provide
additional incentives to employees to work to maximize shareholder
value. The option program also utilizes vesting periods to encourage
key employees to continue in the employ of the Corporation.
o BONUS PROGRAM
The Corporation maintains a bonus program for certain key employees
which is specifically designed to grant greater compensation to
those key employees to recognize their performance in the plan year.
1999 PERFORMANCE
At the beginning of fiscal 1999, the Executive Compensation / Pension Committee
reviewed performance objectives for the Corporation. Performance relative to
these objectives was the basis for determining the 1999 bonus of the President
and CEO.
Similarly, 1999 performance goals for the other Named Officers were approved by
the President and CEO at the beginning of the year. Performance measures and
goals were similar to those of the President and CEO. Their performance for 1999
was evaluated by the President and CEO and bonuses were awarded based on this
evaluation.
EXECUTIVE COMPENSATION / PENSION COMMITTEE
PAUL A. CARROLL
JOHN M. DONOVAN
PETER O. LAWSON-JOHNSTON
ZEMEX CORPORATION 12
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COMPENSATION OF NAMED OFFICERS AND DIRECTORS
The following table sets forth the annual and long-term compensation,
attributable to all service in the fiscal years 1999, 1998 and 1997, paid to
those persons who were at the end of the 1999 fiscal year (i) the chief
executive officer; and (ii) the other four most highly paid executive officers
of the Corporation (collectively, the "Named Officers").
NAMED OFFICERS
SUMMARY COMPENSATION TABLE
- --------------------------------------------------------------------------------------------------------------------
ANNUAL SECURITIES
NAME AND COMPENSATION UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS (1) COMPENSATION (2)
- --------------------------------------------------------------------------------------------------------------------
Richard L. Lister 1999 $255,896 $245,000 120,000 $139,243 (3)
President and CEO 1998 $256,133 $189,000 80,000 $45,813
1997 $265,380 $150,000 -- $40,595
- --------------------------------------------------------------------------------------------------------------------
Peter J. Goodwin 1999 $197,125 $96,000 -- $27,577
President, Industrial Minerals 1998 $183,333 $90,000 25,000 $35,759
1997 $166,666 $83,000 10,000 $23,393
- --------------------------------------------------------------------------------------------------------------------
George E. Gillespie 1999 $185,208 $91,000 -- $24,044
President, Metal Powders 1998 $166,667 $61,000 50,000 $17,418
1997 $119,318 $25,000 25,000 $10,703
- --------------------------------------------------------------------------------------------------------------------
Allen J. Palmiere 1999 $169,297 $74,034 -- $77,499 (3)
Vice President, Chief Financial 1998 $153,929 $49,356 25,000 $17,427
Officer and Assistant Secretary 1997 $150,619 $68,607 -- $17,972
- --------------------------------------------------------------------------------------------------------------------
Terrance J. Hogan 1999 $167,923 -- -- $19,538
President, Alumitech, Inc. 1998 $162,000 $22,700 25,000 $20,845
1997 $146,667 $45,000 15,000 $9,218
- --------------------------------------------------------------------------------------------------------------------
(1) On February 18, 1997, Mr. Goodwin and Mr. Hogan were granted options for
10,000 and 15,000 Common Shares, respectively, at an exercise price of
$7.25. On April 21, 1997, Mr. Gillespie was granted options for 25,000
Common Shares at an exercise price of $7.00. On February 19, 1998, Mr.
Gillespie was granted options for 25,000 Common Shares at an exercise
price of $7.875. On May 15, 1998, Mr. Lister, Mr. Goodwin, Mr. Palmiere,
Mr. Hogan and Mr. Gillespie were granted options for 80,000, 25,000,
25,000, 25,000 and 25,000 Common Shares, respectively, at an exercise
price of $10.1825. On May 26, 1999, Mr. Lister was granted stock options
for 120,000 Common Shares at an exercise price of $6.2625; these options
replaced the options to purchase 120,000 Common Shares at an exercise
price of $5.50 that had been previously granted to Mr. Lister and that
expired on May 26, 1999.
(2) Constitutes premiums for term life insurance exceeding amounts eligible to
most employees, automobile benefits, memberships/dues, and employer
matched contributions to a group registered retirement plan and an
employee stock purchase plan. The Corporation has an employee stock
purchase plan whereby employees may elect to invest up to 10% of their
earnings and the Corporation matches funding for the purchase of the
Corporation's Common Shares. Common
ZEMEX CORPORATION 13
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Shares purchased under this plan are held for a one-year vesting period.
In connection with the plan, amounts shown for Mr. Lister include $25,200
in each of 1999, 1998, and 1997 with respect to benefits derived from
participation in the plan. Amounts shown for Mr. Goodwin include plan
benefits of $18,744, $18,120, and $16,248 in 1999, 1998 and 1997,
respectively. Amounts shown for Mr. Hogan include plan benefits of
$13,323, $13,250, and $13,000 for 1999, 1998, and 1997, respectively.
Amounts shown for Mr. Gillespie include plan benefits of $9,600, $4,200,
and $3,150 in 1999, 1998 and 1997, respectively. Amounts shown for Mr.
Lister do not include imputed interest of $87,465, $83,152, and $65,596,
in 1999, 1998, and 1997, respectively, on a loan Mr. Lister received under
the Corporation's Key Executive Stock Purchase Plan. The Corporation does
not reimburse Mr. Lister for any tax consequences arising from this loan.
(See Note 9 Principal Shareholders and Security Ownership of Management.)
(3) Includes benefit from stock options. Mr. Lister exercised options for
120,000 Common Shares at a per share exercise price of $5.50; such options
were expiring May 26, 1999. Mr. Lister was issued 14,610 Common Shares,
representing the difference between the aggregate fair market value of the
Common Shares underlying such options and aggregate exercise price of such
options. Such number of shares was calculated by multiplying the number of
Common Shares underlying such stock options multiplied by the difference
between the exercise price of $5.50 and a fair market value of $6.2625
(determined as described below), and dividing the result by such fair
market value. Similarly, on November 8, 1999, Mr. Palmiere exercised
options for 60,000 Common Shares at a per share exercise price of $7.125;
such options were expiring November 8, 1999. Mr. Palmiere received a cash
payment of $60,000. Such payment was calculated by multiplying the number
of Common Shares underlying the stock options by the difference between
the exercise price of $7.125 and a fair market value of $8.125, divided by
such fair market value. In both cases, the fair market value of the Common
Shares was determined as the lower of (i) the closing price of the Common
Shares on the New York Stock Exchange (the "NYSE") on the date of
expiration of the stock options; and (ii) the average of the closing
prices of the Corporation's Common Shares on the NYSE for the five days
preceding such expiration date.
CHANGE OF CONTROL CONTRACTS
The Corporation has entered into agreements with each of the Named Officers
providing for certain benefits in the event such Named Officer is no longer
employed by the Corporation or its subsidiaries following a "change in control"
transaction. Except for Mr. Lister, if, within two years after a change in
control transaction, either the Corporation dismisses the Named Officer without
cause or a "triggering event" (which includes a specified adverse change in
duties, benefits, title; reporting, or regular work location) occurs and the
Named Officer terminates his employment, he is entitled to payment of twice his
then current annual base salary, benefits and average annual bonus over the
prior two years, immediate vesting of stock options and shares purchased
pursuant to the Corporation's employee stock purchase plan and certain
outplacement services. Mr. Lister is entitled to the same benefits except that
no triggering event is required, and his severance payment is equal to three
times his then current annual base salary, benefits and his average annual bonus
over the prior three years. These agreements, which expire on December 31, 2004
unless extended, were filed as exhibits to the Corporation's Annual Report on
Form 10-K for the fiscal year ended December 31, 1999, and reference is made
thereto for further information.
ZEMEX CORPORATION 14
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DIRECTORS
Each director who is not a salaried employee of the Corporation is paid $10,000
per annum on a semi-annual basis for his services as a director. Directors are
also entitled to a fee of $600 for each board and committee meeting attended,
and reimbursement of their travel related expenses.
OPTION EXERCISE AND YEAR-END VALUES TABLE
With respect to the Named Officers, the following table sets forth the number of
options exercised and the value realized upon exercise and the value of
outstanding options at December 31, 1999, using $8.375, the closing price of the
Common Shares on the New York Stock Exchange on December 31, 1999.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
- --------------------------------------------------------------------------------------------------------------------
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT YEAR-END IN-THE-MONEY OPTIONS AT
ACQUIRED ON VALUE EXERCISABLE/ YEAR-END EXERCISABLE/
NAMED OFFICER EXERCISE* REALIZED UNEXERCISABLE UNEXERCISABLE
- --------------------------------------------------------------------------------------------------------------------
Richard L. Lister 14,610 $91,500 140,000 / 160,000 $0 / $253,500
- --------------------------------------------------------------------------------------------------------------------
Allen J. Palmiere 0 $60,000 27,500 / 12,500 $0 / $0
- --------------------------------------------------------------------------------------------------------------------
Peter J. Goodwin -- -- 72,500 / 12,500 $11,250 / $0
- --------------------------------------------------------------------------------------------------------------------
Terrance J. Hogan -- -- 59,500 / 12,500 $16,875 / $0
- --------------------------------------------------------------------------------------------------------------------
George E. Gillespie -- -- 62,500 / 12,500 $46,875 / $0
- --------------------------------------------------------------------------------------------------------------------
* See Note 3 above under the section entitled "Executive Compensation".
ZEMEX CORPORATION 15
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OPTION GRANTS TO NAMED OFFICERS AND DIRECTORS
In the year ended December 31, 1999, the following options were granted to the
Named Officers and directors of the Corporation pursuant to the Corporation's
1999 Stock Option Plan:
- ----------------------------------------------------------------------------------------------------------------------
PERCENT OF POTENTIAL REALIZABLE VALUE
NUMBER OF TOTAL OPTIONS AT ASSUMED ANNUAL RATES OF
COMMON SHARES GRANTED TO STOCK PRICE APPRECIATION
UNDERLYING EMPLOYEES IN EXERCISE EXPIRATION FOR OPTION TERM*
NAME OPTIONS GRANTED FISCAL YEAR PRICE DATE 5% 10%
- ----------------------------------------------------------------------------------------------------------------------
Paul A. Carroll 7,500 2.5% $6.2625 May 26, 2009 $29,538 $74,856
- ----------------------------------------------------------------------------------------------------------------------
Morton A. Cohen 15,000 5.1% $6.2625 May 26, 2009 $59,077 $149,713
- ----------------------------------------------------------------------------------------------------------------------
John M. Donovan 15,000 5.1% $6.2625 May 26, 2009 $59,077 $149,713
- ----------------------------------------------------------------------------------------------------------------------
R. Peter Gillin 15,000 5.1% $6.5625 Jan. 15, 2005 $27,197 $60,098
7,500 2.5% $6.2625 May 26, 2009 $29,538 $74,856
- ----------------------------------------------------------------------------------------------------------------------
Peter Lawson-Johnston 15,000 5.1% $6.2625 May 26, 2009 $59,077 $149,713
- ----------------------------------------------------------------------------------------------------------------------
Richard L. Lister 120,000 40.6% $6.2625 May 26, 2009 $472,614 $1,197,697
- ----------------------------------------------------------------------------------------------------------------------
Garth A.C. MacRae 7,500 2.5% $6.2625 May 26, 2009 $29,538 $74,856
- ----------------------------------------------------------------------------------------------------------------------
William J. vanden Heuvel 15,000 5.1% $6.2625 May 26, 2009 $59,077 $149,713
- ----------------------------------------------------------------------------------------------------------------------
*Potential realizable values are net of exercise price and are before taxes and
are based on the assumption that the Corporation's Common Shares appreciate at
the annual rates shown, compounded annually, from the date of grant until the
expiration of the option term. These numbers are calculated based on the
requirements of the Securities and Exchange Commission and do not reflect the
Corporation's estimates of future stock price growth.
INDEBTEDNESS OF DIRECTORS, EXECUTIVE OFFICERS AND SENIOR OFFICERS
The following chart summarizes any indebtedness to the Corporation in excess of
$60,000 as at December 31, 1999 of the Corporation's directors and Named
Officers entered into in connection with a purchase of Common Shares of the
Corporation, excluding routine indebtedness.
INDEBTEDNESS OF DIRECTORS, EXECUTIVE OFFICERS AND SENIOR OFFICERS
UNDER SECURITIES PURCHASE PROGRAMS
- ----------------------------------------------------------------------------------------------------------------------
FINANCIAL
AMOUNT ASSISTED NUMBER OF COMMON
LARGEST AMOUNT OUTSTANDING AS SECURITIES SHARES HELD AS
NAME AND PRINCIPAL INVOLVEMENT OF OUTSTANDING AT PURCHASED SECURITY FOR
POSITION THE CORPORATION DURING 1999 DECEMBER 31, 1999 DURING 1999 INDEBTEDNESS
- ----------------------------------------------------------------------------------------------------------------------
Richard L. Lister Lender $1,749,300 $1,749,300 -- 257,000
President & CEO
- ----------------------------------------------------------------------------------------------------------------------
Richard L. Lister Guarantor $600,000 $600,000* -- 85,700
President & CEO
- ----------------------------------------------------------------------------------------------------------------------
* This loan bears interest at a rate equal to the average cost of borrowing
under the Corporation's credit facility.
ZEMEX CORPORATION 16
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The following chart summarizes any indebtedness to the Corporation as at
December 31, 1999 of the Corporation's directors and Named Officers not entered
into in connection with a purchase of Common Shares of the Corporation,
excluding routine indebtedness.
INDEBTEDNESS OF DIRECTORS, EXECUTIVE OFFICERS AND SENIOR OFFICERS
UNDER OTHER THAN UNDER SECURITIES PURCHASE PROGRAMS
- ----------------------------------------------------------------------------------------------------------------------
NAME AND INVOLVEMENT OF THE LARGEST AMOUNT OUTSTANDING AMOUNT OUTSTANDING AS AT
PRINCIPAL POSITION CORPORATION DURING THE YEAR DECEMBER 31, 1999
- ----------------------------------------------------------------------------------------------------------------------
Paul A. Carroll Lender $115,906* $115,906
Director
- ----------------------------------------------------------------------------------------------------------------------
* This personal loan bears interest at a rate equal to the average cost of
borrowing under the Corporation's credit facility, is supported by a promissory
note and secured by a pledge of 9,500 Common Shares.
PENSION PLAN
Pursuant to the Corporation's pension plan, employees are entitled to pension
benefits after five years of service with the Corporation. The amount of such
benefits depends upon salary and length of service as shown in the table below.
The service factor is 1 1/2% per year. There is a Social Security offset. As of
January 1, 2000, the number of credited years of service and the compensation
covered by the pension plan for the Named Officers are: Richard L. Lister, 8.5
and $256,133; Peter J. Goodwin, 5.5 and $183,333; and George E. Gillespie 2.8
and $166,667.
- ----------------------------------------------------------------------------------------------------------------------
AVERAGE FINAL COMPENSATION CREDITED SERVICE AS OF NORMAL RETIREMENT DATE
AS OF NORMAL ----------------------------------------------------------------------------
RETIREMENT DATE 15 20 25 30 35
- ----------------------------------------------------------------------------------------------------------------------
$ 50,000 $8,091 $10,788 $13,485 $16,182 $18,879
- ----------------------------------------------------------------------------------------------------------------------
$ 75,000 $13,716 $18,288 $22,860 $27,432 $32,004
- ----------------------------------------------------------------------------------------------------------------------
$100,000 $19,341 $25,788 $32,235 $38,682 $45,129
- ----------------------------------------------------------------------------------------------------------------------
$125,000 $24,966 $33,288 $41,610 $49,932 $58,254
- ----------------------------------------------------------------------------------------------------------------------
$150,000 $30,591 $40,788 $50,985 $61,182 $71,379
- ----------------------------------------------------------------------------------------------------------------------
$175,000 $32,841 $43,788 $54,735 $65,682 $76,629
- ----------------------------------------------------------------------------------------------------------------------
$200,000 $32,841 $43,788 $54,735 $65,682 $76,629
- ----------------------------------------------------------------------------------------------------------------------
$225,000 $32,841 $43,788 $54,735 $65,682 $76,629
- ----------------------------------------------------------------------------------------------------------------------
Note: All benefits shown were estimated using the 2000 Social Security Law and
assume the employee terminates employment during 2000 on his Normal Retirement
Date (age 65). The benefits shown are payable at Normal Retirement Date as a
Five Year Certain and Life Annuity, the normal form for an unmarried
participant. All amounts are annual.
ZEMEX CORPORATION 17
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CORPORATE GOVERNANCE
The TSE has adopted guidelines for effective corporate governance (the "TSE
Guidelines"), addressing matters such as the constitution of, and functions to
be performed by, the Board and its committees. The TSE requires that each listed
corporation incorporated in Canada or a province of Canada disclose its approach
to corporate governance with reference to these guidelines on an annual basis.
BOARD MANDATE
The Corporation's Board is ultimately responsible for supervising the management
of the business and affairs of the Corporation and to act in the best interests
of the Corporation. The Board discharges its responsibility directly and through
its committees, which consist of an Audit Committee, a Corporate Governance
Committee, an Executive Committee, and an Executive Compensation / Pension
Committee. Specific responsibilities of the Board include reviewing and
approving the Corporation's (i) strategic and operating plans; (ii) corporate
objectives and goals applicable to the senior management of the Corporation and
significant operational and financial matters and providing direction on these
matters; and (iii) corporate governance practices and determining what, if any,
changes are necessary.
Currently the Board consists of eight persons, of which seven are unrelated:
Messrs. Carroll, Cohen, Donovan, Gillin, Lawson-Johnston, MacRae and vanden
Heuvel. Under the TSE Guidelines, an unrelated director is a director who is
independent of management and is free from any interest in any business or other
relationship which could, or could reasonably be perceived to, materially
interfere with the director's ability to act with a view to the best interests
of the Corporation, other than interests and relationships arising from
shareholding.
Mr. Lister is a director and the President and Chief Executive Officer of the
Corporation. In the view of the Board, given the number of unrelated directors,
including the fact that the Chairman is not a member of management, the fact
that Mr. Lister is a member of the Board as well as senior management does not
impair the ability of the Board to act independently of management. The
Corporation believes that the investment of all shareholders in the Corporation
is fairly reflected in the composition of the Board.
The directors have considered the size of the board with a view to determining
its effectiveness and have concluded that the number of directors is
appropriate.
BOARD MEETINGS AND COMMITTEES
The Board met seven times during 1999. No director attended fewer than 75% of
the meetings of the Board and its committees held during the period in 1999.
The Corporation maintains standing Audit, Corporate Governance, Executive, and
Executive Compensation / Pension Committees.
Audit Committee
The Audit Committee, which met twice during 1999, is composed of John M. Donovan
(Chairman), Garth A.C. MacRae and William J. vanden Heuvel. The Audit Committee
reviews the financial reporting process of the Corporation on behalf of the
Board. In fulfilling its responsibility, the Audit Committee recommended to the
Board, subject to shareholder approval, the selection of Deloitte & Touche LLP
as the Corporation's independent auditors. During 1999, the Audit Committee met
with the Corporation's management and with representatives of Deloitte & Touche
LLP without the Corporation's management being present.
ZEMEX CORPORATION 18
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Corporate Governance Committee
At the beginning of 1999, the Board established a Corporate Governance Committee
with the mandate of reviewing the Corporation's corporate governance practices
and to determine and report to the Board what, if any, changes are necessary.
The Corporate Governance Committee is comprised of R. Peter Gillin (Chairman),
Paul A. Carroll, and William J. vanden Heuvel. Although the Corporation has a
Corporate Governance Committee, issues of corporate governance continue to be
discussed and decided at the Board level. The Board continues to have
responsibility for, among other things, nominating new directors, reviewing the
adequacy and form of compensation of directors, providing orientation and
education programs for new recruits to the Board, and approving requests of
directors to engage outside advisors at the expense of the Corporation.
Executive Committee
The Executive Committee, whose members include Peter O. Lawson-Johnston, John M.
Donovan, Garth A.C. MacRae and Richard L. Lister (Chairman), met four times
during 1999. The purpose of the Executive Committee is to act on behalf of the
Board and to authorize and approve major capital expenditures, which are
subsequently ratified by the full Board.
Executive Compensation / Pension Committee
The Executive Compensation / Pension Committee, whose members include Paul A.
Carroll (Chairman), Peter O. Lawson-Johnston and John M. Donovan, met three
times during 1999. The Executive Compensation / Pension Committee sets policies
and guidelines with respect to compensation and pensions.
BOARD PERFORMANCE
Although the Board did not formally assess the effectiveness of the Board of
Directors in 1999, the Board continually assesses the performance of management
and the Corporation. In that regard, the Board believes that management and the
Corporation performed well in fiscal 1999.
SHAREHOLDER FEEDBACK
All shareholder or investment community inquiries are directed to the Corporate
Secretary and Assistant Treasurer. Shareholder inquiries are responded to
promptly by the appropriate individual at the Corporation. In order to be
considered for inclusion in the Corporation's proxy statement for the 2001
Annual Meeting of Shareholders, proposals from shareholders must be received by
the Corporation on or before December 1, 2000. Such proposals should be
addressed to the Corporate Secretary and Assistant Treasurer, Zemex Corporation,
Canada Trust Tower, BCE Place, 161 Bay Street, Suite 3750, Toronto, Ontario, M5J
2S1.
EXPECTATIONS OF MANAGEMENT
The Board believes it is critical that management of the Corporation provides
complete and accurate information with respect to the business and affairs of
the Corporation and an analysis of the industries in which the Corporation
operates. To date the Board believes management has provided detailed quarterly
information, which has allowed the Board to be effective in supervising the
business and affairs of the Corporation.
ZEMEX CORPORATION 19
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BOARD APPROVAL
The Board has no formal policy setting out what specific matters must be brought
by management to the Board for approval; however, there is a clear understanding
between management and the Board through historical Board practice and accepted
legal practice that all transactions or matters of a material nature must be
presented by management for approval by the Board. It has been the experience to
date of the Board that they have been kept well informed as to the business and
affairs of the Corporation and that the matters which have been brought forward
to the Board for approval have been appropriate.
PERFORMANCE GRAPH
The performance graph compares the performance of the Corporation's Common
Shares to the Dow Jones Industrial Average Index and the Dow Jones Basic
Materials Average Index over the past five-year period. The graph assumes that
the value of the investment in the Corporation's Common Shares and each index
was $100 at December 31, 1994 and that all dividends were reinvested. As a
diversified producer of industrial minerals and specialty products, many of the
companies with which the Corporation competes are private and peer group
comparative data is not available.
COMPARISON OF FIVE-YEAR CUMULATIVE RETURN
YEARS ENDED DECEMBER 31
[PERFORMANCE GRAPH]
- ---------------------------------------------------------------------------------------------------------------------
1994 1995 1996 1997 1998 1999
- ---------------------------------------------------------------------------------------------------------------------
Zemex Total Cumulative Return 100 118 85 107 80 113
- ---------------------------------------------------------------------------------------------------------------------
Dow Jones Industrial Average 100 137 176 220 260 331
- ---------------------------------------------------------------------------------------------------------------------
Dow Jones Basic Materials Average 100 121 141 159 151 203
- ---------------------------------------------------------------------------------------------------------------------
ZEMEX CORPORATION 20
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OTHER MATTERS
Management is not aware of any other matters to be considered at the Meeting
other than as set forth in this proxy statement. However, if any other matters
properly come before the Meeting, it is the intention of the persons named in
the accompanying form of proxy in their discretion to vote the proxies in
accordance with their best judgment on such matters.
DIRECTORS' APPROVAL
The Board has approved the contents and the sending of this proxy statement to
the Corporation's shareholders.
By Order of the Board of Directors,
Patricia K. Moran
May 17, 2000 Corporate Secretary and Assistant Treasurer
ZEMEX CORPORATION 21
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PROXY
ZEMEX CORPORATION
ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS
The undersigned, as record holder(s) of the shares listed below, hereby revokes
any previous proxies and appoints Richard L. Lister, Allen J. Palmiere and
Patricia K. Moran (or each of them, or their assignees) proxies for the
undersigned, with full power of substitution, to represent the undersigned, to
act for the undersigned in the same manner and with the same effect as if the
undersigned were personally present and to vote all of the Common Shares which
the undersigned is entitled to vote at the Annual and Special Meeting of
Shareholders of Zemex Corporation (the "Corporation") to be held on June 29,
2000 at 11:30 a.m. and any adjournment thereof, as follows:
1. Election of directors nominees: Paul A. Carroll, Morton A. Cohen, John M.
Donovan, R. Peter Gillin, Peter O. Lawson-Johnston, Richard L. Lister,
Garth A.C. MacRae and William J. vanden Heuvel:
[ ] FOR THE DIRECTORS [ ] WITHHOLD AUTHORITY to vote for directors
2. Proposal to ratify the appointment of Deloitte & Touche as independent
public accountants for the Corporation for the fiscal year ending December
31, 2000:
[ ] FOR THE AUDITORS [ ] WITHHOLD AUTHORITY to vote for auditors
3. Proposal to approve an increase in the number of Common Shares reserved
for issuance under the Corporation's 1999 Stock Option Plan:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To vote or otherwise represent the shares on any other business which may
properly come before the annual meeting of shareholders or any
adjournments thereof, according to their decision and in their discretion:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE CORPORATION
AND WILL BE VOTED AS DIRECTED HEREIN. IF NO DIRECTION IS GIVEN, THIS PROXY WILL
BE VOTED FOR ALL THE PROPOSALS LISTED ABOVE IN THE MANNERS DESCRIBED IN THE
PROXY STATEMENT.
DATE: _______________________
-----------------------------
SIGNATURE OF SHAREHOLDER
-----------------------------
SIGNATURE OF SHAREHOLDER
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS ON YOUR STOCK CERTIFICATES. A
corporation is requested to sign its name by its president: administrators,
trustees, etc., are requested to so indicated when signing. If stock is
registered in two names, it is preferred that both sign. PLEASE RETURN YOUR
PROXY IN THE ENVELOPE PROVIDED.