-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Kp8S+Mh8i6NDD2hTXNOvkUl/M6UJGwMYXtKzUPwkK412qzZveILk6uu0MTNAbhsS agrBO6gbe+69XnAEsL4wHw== 0000075644-97-000002.txt : 19970328 0000075644-97-000002.hdr.sgml : 19970328 ACCESSION NUMBER: 0000075644-97-000002 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970327 FILED AS OF DATE: 19970327 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ZEMEX CORP CENTRAL INDEX KEY: 0000075644 STANDARD INDUSTRIAL CLASSIFICATION: MINING, QUARRYING OF NONMETALLIC MINERALS (NO FUELS) [1400] IRS NUMBER: 135496920 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 001-00228 FILM NUMBER: 97565413 BUSINESS ADDRESS: STREET 1: CT TOWER, BCE PLACE STREET 2: 161 BAY ST, STE 3750 P O BOX 703 CITY: TORONTO ONTARIO M5J STATE: A6 BUSINESS PHONE: 4163658080 MAIL ADDRESS: STREET 1: CANADA TRUST TOWER STREET 2: BCE PLACE 161 BAY ST,# 3750 PO BOX 703 CITY: TORONTO ONTARIO M5J STATE: A6 FORMER COMPANY: FORMER CONFORMED NAME: PACIFIC TIN CONSOLIDATED CORP DATE OF NAME CHANGE: 19860720 DEF 14A 1 ZEMEX CORPORATION Canada Trust Tower, BCE Place 161 Bay Street, Suite 3750 P.O. Box 703 Toronto, Ontario Canada M5J 2S1 PROXY STATEMENT This proxy statement is furnished in connection with the solicitation of proxies by the Board of Directors (the "Board") of Zemex Corporation (the "Corporation" or "Zemex"), a Delaware corporation, to be voted at the Annual Meeting of Shareholders at 11:00 a.m. on May 12, 1997 in Room C, 11th Floor, The Chase Manhattan Bank, 270 Park Avenue, New York, New York, 10017 and at any adjournment thereof. This Proxy Statement and the accompanying Notice of Meeting and Form of Proxy are being mailed to the Corporation's shareholders commencing on or about March 27, 1997. The 1996 Annual Report to the Corporation's shareholders, which includes financial statements, is also being mailed on or about March 27, 1997 to each shareholder of record as of the close of business on March 7, 1997. Such Annual Report, however, is not to be deemed to be part of this proxy solicitation material. The Board has fixed the close of business on March 7, 1997 as the record date for the determination of shareholders of the Corporation entitled to vote at the Annual Meeting. As of the record date, the Corporation had approximately 8,269,099 common shares, par value $1.00 per share (the "Common Shares"), issued and outstanding. Each Common Share is entitled to one vote. A majority of the Common Shares outstanding and entitled to vote must be present at the Annual Meeting in person or by proxy in order to constitute a quorum for the transaction of business. Under Delaware law, abstentions are treated as present and entitled to vote, and therefore will be counted in determining the existence of a quorum and will have the effect of a vote against any matter requiring the affirmative vote of a majority of the shares present and entitled to vote at the Annual Meeting. Broker "non-votes" are considered present but not entitled to vote, and thus will be counted in determining the existence of a quorum but will not be counted in determining approval of any matter requiring the affirmative vote of a majority of the shares present and entitled to vote at the Annual Meeting. There are no dissenters' rights available with respect to any matter to be considered at the Annual Meeting. Any shareholder giving a proxy in the accompanying Form of Proxy has the right to revoke it at any time prior to the voting thereof by delivery of notice of revocation to the Corporation or by delivery of another proxy subsequent to the date thereof. Such notices of revocation should be addressed to the Corporate Secretary at the executive offices of the Corporation located at Canada Trust Tower, BCE Place, 161 Bay Street, Suite 3750, P.O. Box 703, Toronto, Ontario, Canada, M5J 2S1. The Corporation's telephone number is (416) 365-8080 and its fax number is (416) 365-8094. 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 some of the regular employees of the Corporation or its subsidiaries, who will receive no additional compensation for their services. The Corporation has also retained Kissel-Blake Inc. to solicit proxies personally or by mail, telephone, facsimile, or telegraph from brokerage houses, custodians, fiduciaries and nominees for a fee of $4,500 plus expenses. In addition, the Corporation will reimburse brokers and other nominees for their expenses in forwarding soliciting material to beneficial owners. ELECTION OF DIRECTORS A board of nine directors is to be elected at the Annual Meeting of Shareholders. Unless otherwise instructed, the proxy holders will vote the proxies received by them for the Corporation's nine nominees named below, all of whom are presently directors of the Corporation. If any nominee of the Corporation is unable or declines to serve as a director at the time of the Annual Meeting of Shareholders, the proxies will be voted for the nominee designated by the present Board to fill the vacancy. It is not expected that any nominee will be unable or will decline to serve as a director. The term of office of each person elected as a director will continue until the next Annual Meeting of Shareholders or until a successor has been elected and qualified. Opposite the name of each nominee for election as a director is (i) his age; (ii) his position with the Corporation, his principal occupation and his business experience during the past five years; and (iii) the year in which he first became a director of the Corporation. All information is as of March 7, 1997. PROPOSAL I NOMINEES FOR ELECTION AS A DIRECTOR Position with the Corporation; Name Age Principal Occupation Diretor and Business Experience During Past Since Five Years Paul A. Carroll 55 Chairman of the Executive 1991 Compensation/Pension Committee; Chairman and Chief Executive Officer, World Wide Minerals Ltd. (Toronto-based mining company); Counsel, Smith Lyons (Toronto law firm) since 1997 and prior thereto Partner of Smith Lyons since 1973; Chairman, Juno Limited; Director, Dundee Bancorp Inc.; Director, Pan Pacific Strategies Corp. Morton A. Cohen 61 Chairman, President and Chief 1991 Executive Officer, Clarion Capital Corporation (Cleveland-based venture capital company) since 1982; Chairman, Cohesant Technologies Inc.; Director, Gothic Energy Corporation; Director, Sentex Sensing Technology Inc.; Director, DHB Capital Group John M. Donovan 69 Member of the Audit Committee and 1991 Executive Compensation/Pension Committee; Independent Consultant since July 1990; Director, Philex Gold Inc. Thomas B. 65 Member of the Audit Committee and the 1989 Evans, Jr. Nominating Committee; Vice Chairman, The Jefferson Group Inc. (Washington D.C. consulting firm) since December 1995; President, The Evans Group Ltd. (Washington D.C. consulting firm) since 1989; Director, Juno Limited Ned Goodman 59 Chairman, President and Chief 1991 Executive Officer, Dundee Bancorp Inc. (a Toronto-based financial services company) and its subsidiary, Goodman & Company Ltd., since January 1987; Chairman, Dynamic Mutual Funds; Chairman, Goodman & Company, Investment Counsel; Director, BGR Precious Metals Inc.; Director, Kinross Gold Corporation; Director, Knights Gold Mining Co. Limited; Director, Breakwater Resources Ltd. Peter Lawson- 70 Chairman of the Board of Directors, 1960 Johnston Member of the Executive Compensation/Pension Committee, Member of the Executive Committee and Chairman of the Nominating Committee; Chairman and Trustee, Solomon R. Guggenheim Foundation; Chairman of the Board, The Harry Frank Guggenheim Foundation; Senior Partner, Guggenheim Brothers; President and Director, Elgerbar Corporation; Director, National Review, Inc.; Limited Partner Emeritus, Alex Brown & Sons, Inc.; Director, UBS Private Investor Funds, Inc. Richard L. 58 President and Chief Executive Officer 1991 Lister of the Corporation since May 1993; Chairman of the Executive Committee and Member of the Nominating Committee; Vice Chairman of the Board of Directors from 1991 to May 1993; Director, Dundee Bancorp Inc.; Vice Chairman, Dundee Bancorp Inc. from 1991 to 1993 Patrick H. 81 Chairman of the Audit Committee; 1975 O'Neill Independent Mining Consultant since 1982; Counselor, American Geographical Society, New York; Director, Ireland U.S. Council for Commerce and Industry, New York William J. 66 Member of the Executive Committee; 1989 vanden Heuvel Counsel, Stroock, Stroock & Lavan (attorneys at law, New York) since 1984; Senior Advisor, Allen & Company Inc. (investment bankers) since 1984; Chairman of the Board, IRC Group, Inc.; Co-Chairman, Council of American Ambassadors; Director, WinStar Communications, Inc. Vote Required for Election of Directors Directors will be elected at the Annual Meeting by a plurality of the votes cast at the meeting by the holders of shares represented in person or by proxy. Votes may be cast for, or withheld from, each nominee. The Board recommends a vote "FOR" the election of each of the foregoing persons. 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 ten percent (10%) of the Corporation's Common Shares, to file with the Securities and Exchange Commission and any exchange on which the Corporation's Common Shares are traded reports of ownership and changes in ownership of the Corporation's Common Shares. 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 5's were required for such persons, the Corporation believes that, during the fiscal year ended December 31, 1996, all Section 16(a) filing requirements applicable to its officers, directors and 10% shareholders were complied with. BOARD MEETINGS AND COMMITTEES The Corporation maintains standing Executive, Executive Compensation/Pension, Audit and Nominating Committees. The Executive Committee, whose members include Peter Lawson- Johnston, William J. vanden Heuvel and Richard L. Lister, met once during 1996. The purpose of the Committee is to act on behalf of the Board and to authorize and approve capital expenditures, which are subsequently ratified by the full Board. The Executive Compensation/Pension Committee, whose members include Paul A. Carroll, Peter Lawson-Johnston and John M. Donovan, met once during 1996. The Executive Compensation/Pension Committee sets policies and guidelines with respect to compensation and pensions. The Audit Committee met three times during 1996. Its members include Patrick H. O'Neill, Thomas B. Evans, Jr. and John M. Donovan. 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 as the Corporation's independent auditors. During 1996, the Audit Committee met with the Corporation's management and with representatives of Deloitte & Touche without the Corporation's management being present. The Nominating Committee met one time in 1996. Its members include Peter Lawson-Johnston, Thomas B. Evans, Jr. and Richard L. Lister. The Nominating Committee advises the Board on prospective nominees for election to the Board. It considers possible director nominees recommended by shareholders, who may submit their recommendations by writing to the Nominating Committee at the Corporation's principal executive office. The Board met eight times during 1996. No director attended fewer than 75% of the meetings of the Board and its committees held during the period in 1996 except for one. Outside directors received $10,000 annually plus $600 for each meeting of the Board or any of its committees attended through December 31, 1996. Executives who are directors receive no compensation as directors. PRINCIPAL SHAREHOLDERS AND SECURITY OWNERSHIP OF MANAGEMENT The following table sets forth, as of March 7, 1997, 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 9 under 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) Beneficially Owned (3)Beneficially Owned Dundee Bancorp International Inc. 2,840,427 34.3 percent Scotia Plaza, 55th Floor 40 King Street West Toronto, Ontario, Canada M5H 4A9 Paul A. Carroll 35,306(4)(5) * Morton A. Cohen 312,676(4)(5)(6) 3.8 percent John M. Donovan 35,306(4)(5) * Thomas B. Evans, Jr. 45,285(4)(5) * Ned Goodman 2,875,733(4)(5)(7) 34.7 percent Scotia Plaza, 55th Floor 40 King Street West Toronto, Ontario, Canada M5H 4A9 Peter Lawson-Johnston 93,871(4)(5)(8) 1.1 percent Richard L. Lister 690,599(5)(9)(10)(12) 8.1 percent Canada Trust Tower, BCE Place 161 Bay Street, Suite 3750 Toronto, Ontario, Canada M5J 2S1 Patrick H. O'Neill 39,971(4)(5) * William J. vanden Heuvel 47,491(4)(5) * Allen J. Palmiere 80,306(5)(10) 1.0 percent Peter J. Goodwin 63,111(10)(12) * Terrance J. Hogan 54,284(10)(11)(12) * G. Russell Lewis 15,000(10) * All Directors and Named Officers 4,388,939(4)(5)(6)(7)(8)(9)(10)(11)(12) as a group (13 persons) 49.4 percent __________________ * Denotes less than 1% of Common Shares outstanding (1) A Schedule 13G, prepared on behalf of Merrill Lynch & Co., Inc. and various of its subsidiaries, was filed with the Securities and Exchange Commission indicating that it could be construed to be a beneficial owner of 880,566 Common Shares. However, Merrill Lynch & Co., Inc. disclaims any beneficial ownership of the Common Shares because they were held in proprietary trading accounts. (2) Zesiger Capital Group LLC has filed a Schedule 13G with the Securities and Exchange Commission indicating that it could be deemed to be a beneficial owner of 710,813 Common Shares. However, Zesiger Capital Group LLC disclaims any beneficial ownership of the Common Shares because they were purchased for customer accounts. (3) Computed in accordance with Rule 13d-3(d)(1) of the Securities Exchange Act of 1934, as amended. (4) These directors were each granted options for 10,000 Common Shares at $5.00 per share exercisable in two installments of 5,000 each beginning on September 17, 1992 and September 17, 1993, respectively, and extend for a period of five years from the date the options first become exercisable. On May 26, 1993, these directors were each granted options for an additional 15,000 Common Shares at $5.50 per share exercisable in two installments of 7,500 each beginning on May 26, 1994 and May 26, 1995, respectively. These options expire on May 26, 1999. In addition, these directors were each granted options for an additional 5,000 Common Shares at $9.125 per share exercisable in two installments of 2,500 each beginning on February 8, 1996 and February 8, 1997, respectively, and extending for a period ending on February 8, 2001. Shares shown in the table include the 30,000 currently exercisable options. (5) 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. (6) Includes 276,856 Common Shares owned by Clarion Capital Corporation, a company which Mr. Cohen may be deemed to be the beneficial owner. (7) Includes 2,840,427 Common Shares owned by Dundee Bancorp International Inc., a wholly-owned subsidiary of Dundee Bancorp Inc., of which Mr. Goodman is Chairman of the Board and over which he may be deemed to have voting and investment power. (8) Includes 18,006 Common Shares beneficially owned by Elgerbar Corporation. Mr. Lawson-Johnston is President and a director of Elgerbar Corporation and has shared voting and investment power with respect to the Common Shares held by it. (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, was extended for one year by approval of the Board. The loan is evidenced by a promissory note secured by a pledge of the Common Shares. If Mr. Lister leaves the employ of the Corporation at any time prior to full payment of the loan, the principal amount will be due in full 30 days after the date his employment terminates. Any balance remaining unpaid on the loan after it is due will bear interest at the prime rate plus 1.0%. So long as the loan is outstanding, Mr. Lister is required to vote the 357,000 Common Shares in a manner consistent with the recommendation of the Board. (10) Includes Common Shares issuable upon exercise of vested options as follows: Mr. Lister, 220,000 Common Shares; Mr. Palmiere, 75,000 Common Shares; Mr. Goodwin, 50,000 Common Shares; Mr. Hogan, 21,000 Common Shares; Mr. Lewis, 15,000 Common Shares; and all Named Officers and directors as a group, 621,000 Common Shares. (11) 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 installments 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. (12) Includes Common Shares purchased in 1995 and 1996, plus any applicable stock dividends, in accordance with the terms and conditions of the Corporation's employee stock purchase plan as follows: Mr. Lister, 11,386 Common Shares; Mr. Goodwin, 5,319 Common Shares; and Mr. Hogan, 3,118 Common Shares. REPORT OF THE EXECUTIVE COMPENSATION / PENSION COMMITTEE The Corporation applies a consistent philosophy to compensation for all employees, including senior management. This philosophy is based on the premise that the achievements of the Corporation result from the coordinated efforts of all individuals working toward common objectives. The Corporation strives to achieve those objectives through teamwork that is focused on meeting the expectations of customers and shareholders. COMPENSATION PHILOSOPHY The goals of the compensation program are to align compensation with business objectives and performance, and to enable the Corporation to attract, retain and reward executive officers who contribute to the long term success of the Corporation. The Corporation's compensation program for executive officers, including the Chief Executive Officer ("CEO"), is based on the same five principles applicable to compensation decisions for all employees of the Corporation: 1. 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. 2. 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 and timely new product introductions. 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. 3. The Corporation strives for fairness in the administration of pay. 4. 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. 5. The Corporation believes that employees should understand how the performance evaluation and pay administration process works. The process of assessing performance is as follows: - At the beginning of the performance cycle, the evaluating manager sets objectives and key goals. - The evaluating manager gives the employee ongoing feedback on performance. - At the end of the performance cycle, the manager evaluates the accomplishments of objectives/key goals. - The manager compares the results to the results of peers within the operating unit. - The evaluating manager communicates the comparative results to the employee. - The comparative result affects decisions on salary, bonuses and stock options. COMPENSATION VEHICLES 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 vehicles are: Cash-Based Compensation Salary: The Corporation sets base salary for employees by reviewing the aggregate of base salary and annual bonus for competitive positions in the market. Equity-Based Compensation Stock Option Program: The purpose of this program is to provide additional incentives to employees to work to maximize shareholder value. The option program also utilizes vesting periods to encourage key employees to continue in the employ of the Corporation. Bonus Program The Corporation maintains a bonus program for certain key employees. The plan is specifically designed to grant greater compensation to those key employees to recognize their performance in the plan year. 1996 PERFORMANCE At the beginning of fiscal 1996, the Executive Compensation/Pension Committee reviewed performance objectives for the Corporation. Performance relative to these objectives was the basis for determining the 1996 bonus of the President and CEO. Based on the financial results for the period ended December 31, 1996, no bonus was given. Similarly, 1996 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 1996 was evaluated by the President and CEO, and no bonuses were granted. Executive Compensation/ Pension Committee PAUL A. CARROLL JOHN M. DONOVAN PETER LAWSON-JOHNSTON EXECUTIVE COMPENSATION The following table sets forth the annual and long term compensation, attributable to all service in the fiscal years 1996, 1995 and 1994, paid to those persons who were at the end of the 1996 fiscal year (i) the chief executive officer; and (ii) the other four most highly paid executive officers of the Corporation (collectively, the "Named Officers"): Summary Compensation Table Annual Securities Name and Compensation Underlying All Other Principal Position Year Salary Bonus Options Compensation (2) (1) Richard L. Lister 1996 $267,537 $0 _ $39,994 President and 1995 $265,911 $75,000 100,000 $37,225 Chief Executive 1994 $265,322 $0 Allen J. Palmiere 1996 $139,368 $0 _ $15,788 Vice President, 1995 $119,629 $24,000 15,000 $6,364 Chief Financial 1994 $113,428 $45,371 _ $5,479 Officer and Assistant Secretary Peter J. Goodwin 1996 $144,530 $0 $20,230 Vice President, 1995 $132,667 $17,500 25,000(3) $15,120 Zemex President, Industrial Minerals Terrance J. Hogan 1996 $136,667 $0 _ $14,816 President, 1995 $120,192 $36,000 32,000 $3,395 Alumitech, Inc. G. Russell Lewis 1996 $144,200 $0 _ $7,024 President, Metal 1995 $138,866 $4,000 10,000 $6,829 Powders 1994 $133,743 $40,000 - $8,403 _________________ (1) On February 8, 1995, Mr. Lister, Mr. Palmiere, Mr. Goodwin, Mr. Hogan and Mr. Lewis were granted options of 100,000, 15,000, 25,000, 10,000 and 10,000, respectively, at an exercise price of $9.125 under the 1995 Stock Option Plan. On May 12, 1995, Mr. Hogan was issued options for 22,000 Common Shares at $9.75 per share exercisable in two installments of 11,000 Common Shares each beginning on May 12, 1996 and May 12, 1997, respectively, in exchange for his interest in Alumitech, Inc. (see Note 11 Principal Shareholders and Security Ownership of Management). (2) Constitutes premiums for term life insurance exceeding amounts eligible to most employees, automobile benefits, and employer matched contributions to a group registered retirement plan and an employee stock purchase plan. In 1995, the Corporation adopted an employee stock purchase plan whereby employees may elect to invest up to 10% of their earnings and the Corporation matches funding for the purchase of the Corporation's Common Shares. Common Shares purchased under this plan are held for a one-year vesting period. Amounts shown for Mr. Lister, Mr. Goodwin and Mr. Hogan include $25,200, $14,200 and $13,000, respectively, as a benefit derived from participation in the plan in 1996 and benefits of $25,200 and $9,450, respectively, for Mr. Lister and Mr. Goodwin in 1995. Amounts shown for Mr. Lister do not include imputed interest of $100,453, $130,585 and $96,331 in 1996, 1995, and 1994, 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) On July 14, 1994, Mr. Goodwin was granted options for 25,000 Common Shares at $11.50 per share under the 1993 Stock Option Plan. On July 18, 1996, these options were repriced to $9.125. OPTION REPRICING The following table shows the repricing of any stock options previously awarded to any of the Named Officers pursuant to the Corporation's stock option plans. Number of Market Original Date Securities Price Exercise New of Underlying of Stock Price Exercise Expiry Named Repricing Options at at Time Price (1) Date Officer Repriced Time of of Repricing Repricing Peter July 18 July 14, J. Goodwin 1996 25,000 $7.125 $11.50 $9.125 2000 Mr. Goodwin was originally granted 25,000 stock options on July 14, 1994 at $11.50. Given that the Corporation's common shares have not traded in this price range since 1994 and given that the purpose of the option program is to provide incentive to valuable employees, on July 18, 1996 the Board approved the repricing of these share options to $9.125, commensurate with the price of Mr. Goodwin's other options. The term of the options remains the same. OPTION EXERCISE AND YEAR-END VALUES TABLE With respect to the Named Officers, the following table sets forth the number of options exercised, the value realized upon exercise and the value of outstanding options at December 31, 1996, using $7.00, the December 31, 1996 closing price of the Corporation's Common Shares on the New York Stock Exchange. Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values Number of Value of Unexercised In-The-Money Shares Value Options Options Acquired Realized at Year-End at Year-End Named Officer on Exercise on Exercise Exercisable/ Exercisable/ Unexercisable Unexercisable Richard L. Lister _ _ 170,000/50,000 $180,000/$0 Allen J. Palmiere _ _ 67,500/7,500 $0/$0 Peter J. Goodwin _ _ 35,500/12,500 $0/$0 Terrance J. Hogan _ _ 16,000/16,000 $0/$0 G. Russell Lewis 16,000 $72,000 12,500/2,500 $7,500/$0 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 percent per year. There is a Social Security offset. As of January 1, 1997, the number of credited years of service and the compensation covered by the pension plan for the eligible Named Officers are: Richard L. Lister, 5.5 and $267,537; Peter J. Goodwin, 2.5 and $144,530; Terrance J. Hogan, 4.1 and $136,667; and G. Russell Lewis, 28.4 and $144,200. Average Final Compensation Credited Service as of Normal Retirement Date as of Normal Retirement Date 15 20 25 30 35 $ 50,000 $ 8,613 $11,484 $14,354 $17,225 $20,096 75,000 $14,238 $18,984 $23,729 $28,475 $33,221 100,000 $19,863 $26,484 $33,104 $39,725 $46,346 125,000 $25,488 $33,984 $42,479 $50,975 $59,471 150,000 $31,113 $41,484 $51,854 $62,225 $72,596 175,000 $31,563 $42,084 $52,604 $63,125 $73,646 200,000 $31,563 $42,084 $52,604 $63,125 $73,646 225,000 $31,563 $42,084 $52,604 $63,125 $73,646 Note: All benefits shown were estimated using the 1997 Social Security Law and assume the employee terminates employment during 1997 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. PERFORMANCE GRAPH The following 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, 1991 and that all dividends were reinvested. As a diversified producer of industrial minerals and metal products, many of the companies with which the Corporation competes are private and peer group comparative data is not available. 1991 1992 1993 1994 1995 1996 Zemex Total Return 100 163 207 268 315 230 Dow Jones Industrial 100 107 126 132 181 232 Average Dow Jones Basic Materials 100 111 126 133 165 192 Average PROPOSAL II AUDITORS The Board, upon the recommendation of the Audit Committee, has selected Deloitte & Touche as independent auditors of the accounts of the Corporation and its subsidiaries for the fiscal year ending December 31, 1997. A proposal will be presented at the Annual Meeting to ratify the appointment of Deloitte & Touche as the Corporation's independent auditors. Representatives of Deloitte & Touche will be present at the Annual Meeting and will be available to respond to questions and may make a statement if they so desire. Vote Required for Ratification of Auditors Approval of the appointment of auditors requires the affirmative vote of the majority of the holders of outstanding Common Shares entitled to cast votes at the meeting. The Board unanimously recommends that the shareholders vote "FOR" the ratification of the appointment of Deloitte & Touche as independent auditors for the fiscal year ending December 31, 1997. PROPOSAL III EMPLOYEE STOCK PURCHASE PLAN INCREASE IN AUTHORIZED SHARES FROM 250,000 SHARES TO 500,000 SHARES There will be presented at the Annual Meeting a proposal that the shareholders approve an increase in the number of shares authorized to be purchased under the Corporation's Employee Stock Purchase Plan (the "Plan"), a plan approved by the shareholders on June 14, 1994. The Plan is an employee benefit plan that offers eligible employees of the Corporation the opportunity to purchase shares of the Corporation's common stock through regular payroll deductions. The initial number of authorized shares approved by the shareholders was 250,000 shares. The purpose of the Plan is to provide incentive to employees and to secure for the Corporation and its shareholders the benefits which an interest in the ownership of shares of the Corporation's common stock will provide to its employees, who are responsible for the Corporation's future growth and continued success. Each eligible employee may contribute to the Plan up to ten percent of his or her base compensation. The Corporation will also contribute to the Plan an amount equal to the amount of each participant's contribution. Each quarter, the aggregate amount contributed on behalf of each employee will be used to purchase common stock at a price equal to its average fair market value during the calendar quarter preceding the date of purchase. After purchase, the stock is held in safekeeping by the Corporation for each participant for a period of one year. During the one-year holding period, if a participating employee terminates his or her employment with the Corporation, unless the participant ceases to be an employee by reason of death, disability or retirement, he or she immediately ceases participation in the Plan and the contributions by the Corporation and stock representing the contributions by the Corporation are forfeited by them. In addition, pursuant to the terms of the Plan, upon termination the participant would only be entitled to receive the lesser of the participant's original contributions to the Plan or the value of the shares purchased with the participant's contributions. Under the Plan, however, the Board has the discretion to pay the full value of all shares held for the participant before the termination instead of allowing a forfeiture to occur. If a participating employee is still employed at the end of the one-year holding period, or upon death, disability, or retirement during the one-year holding period, all shares held by the Corporation for that employee will be distributed to the employee. During the one-year holding period, dividends, voting rights, and proxy statements will be passed through to the participating employees. In accordance with the terms of the Plan, shareholder approval is required to increase the total authorized shares. Assuming that employees continue to contribute at the same level as they did in 1995 and 1996, it is anticipated that the initial 250,000 authorized shares will be purchased by the first quarter of 1998. Recognizing the importance of providing an opportunity for ownership incentives to employees, a proposal to increase the number of authorized shares available to be purchased under the Plan from 250,000 shares to 500,000 shares will be presented at the Annual Meeting. The Board of Directors recommends a vote "FOR" the approval of an increase in the number of authorized shares available to be purchased pursuant to the Corporation's Employee Stock Purchase Plan from 250,000 shares to 500,000 shares. The affirmative vote of a majority of the shares of common stock present and voting in person or by proxy is required to approve the increase in authorized shares. SHAREHOLDERS' PROPOSALS FOR 1998 ANNUAL MEETING In order to be considered for inclusion in the Corporation's proxy statement for the 1998 Annual Meeting of Shareholders, proposals from shareholders must be received by the Corporation on or before December 1, 1997. Such proposals should be addressed to the Corporate Secretary, Zemex Corporation, Canada Trust Tower, BCE Place, 161 Bay Street, Suite 3750, Toronto, Ontario, M5J 2S1. 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. March 27, 1997 -----END PRIVACY-ENHANCED MESSAGE-----