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ELAMEX SA DE CV - DEF 14A - 20000331 - PROPOSAL_1
PROPOSAL ONE
ELECTION OF DIRECTORS
Nominees
A Board of thirteen (13) directors is to be elected at this meeting, which
shall be the entire Board. Unless otherwise instructed, the proxyholders will
vote the proxies received by them for the Company's nominees named below. Any
proxy executed in such a manner, as not to withhold authority to vote for the
election of any nominee shall be deemed to grant such authority. Persons
receiving a majority of the votes cast at the Annual Meeting will be elected as
directors.
In the event that any nominee of the Company is unable or declines to
serve as a director at the time of the Annual Meeting, the proxies will be voted
for any nominee who shall be designated by the present Board of Directors to
fill the vacancy. In the event that additional persons are nominated for
election as directors, the proxyholders intend to vote all proxies received by
them in such a way that will ensure the election of as many of the nominees
listed below as possible, and, in such event, the specific nominees to be voted
for will be determined by the proxyholders. The Company is not aware of any
nominee who 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 his successor has been
elected and qualified. The Board of Directors for the coming year will
effectively be comprised of twelve members rather than thirteen. Mr. Whetten is
out of the country and does not expect to attend meetings until his return. Mr.
Whetten has consented to continue as a director while away and has agreed to
return to full status upon his return.
The election of directors is not related to or conditional on the approval
of other matters.
The names of the nominees, and certain information about them, are set
forth below:
Director
Name of Nominee Age Position Since
--------------- --- -------- -----
--------------------------------------------------------------------------------
Eloy S. Vallina 62 Chairman of the Board of Directors 1990
Jesus Alvarez-Morodo 53 Vice Chairman of the Board of Directors 1990
Federico Barrio 63 Director 1990
Antonio L. Elias 51 Director 1995
Eduardo L. Gallegos 58 Director 1990
Daniel L. Johnson 53 Director 2000
Jerry W. Neely 63 Director 1995
Hector M. Raynal 46 Director 1995
Leon H. Reinhart 57 Director 1997
Alfred J.V. Stanley 36 Director 2000
Jesus E. Vallina 51 Director 1991
Eloy Vallina Garza 28 Director 1997
Robert J. Whetten 57 Director 1994
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The shareholders will also vote on nominees for the following offices:
Name of Nominee Age Position Since
--------------- --- -------- -----
Daniel L. Johnson 53 Secretary 2000
Jose O. Garcia Mata 56 Statutory Auditor 2000
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Eloy S. Vallina
Mr. Vallina has been Chairman of the Board of Accel and its predecessor,
Grupo Chihuahua, S.A. de C.V., since its inception in 1979. He is also chairman
of Kleentex Corp., and an Advisory Director of First National Bank of San Diego.
Mr. Vallina was Chairman of Banco Comercial Mexicano, later Multibanco Comermex,
one of Mexico's largest commercial banks at that time, from 1971 until its
expropriation in 1982. He graduated with a B.A. in Business Administration from
the Instituto Tecnologico y de Estudios Superiores de Monterrey.
Jesus Alvarez-Morodo
Mr. Alvarez-Morodo has been Vice Chairman of the Board of Elamex since
1995 and President and CEO of Accel since 1992. He has been a director of Elamex
since 1990. Mr. Alvarez-Morodo has held various positions with Accel, its
predecessor Grupo Chihuahua and its subsidiaries since 1982, including Vice
President from 1989 to 1992. He graduated from the Universidad Iberoamericana
with a B.S. in Electromechanical Engineering and from the Sloan School of
Management, Massachusetts Institute of Technology with an M.S. degree in
Management.
Federico Barrio
Mr. Barrio served on the Board of Elamex and its predecessor companies,
for most of that time as Vice Chairman of the Board or a functionally equivalent
position, for 25 years and was a founding stockholder of the Elamex business. He
is a partner in Constructora Lintel, a major developer of industrial and
commercial buildings in Ciudad Juarez, and he has been Constructora Lintel's
President since 1983. He has also been an Advisory Director of Norwest Bank El
Paso since 1991. He has a B.S. in Industrial Engineering from the Chihuahua
Technological Institute and an M.B.A. degree from the University of Chihuahua.
Mr. Barrio was former Dean of Juarez Technological Institute and has 29 years of
experience in industrial development and general contracting.
Antonio L. Elias
Mr. Elias is Senior Vice President, Advanced Projects Group, at Orbital
Sciences Corporation ("OSC") since 1989. Mr. Elias joined OSC in 1986 as Chief
Engineer, becoming Vice President of Engineering in 1988 and Corporate Vice
President in 1989. From 1980 to 1986 he was Assistant Professor, Aeronautics and
Astronautics, at Massachusetts Institute of Technology. Mr. Elias obtained a
B.S., M.S., E.A.A., and Ph.D. in Aeronautics and Astronautics from Massachusetts
Institute of Technology.
Eduardo L. Gallegos
Mr. Gallegos has been with Accel and its predecessor, Grupo Chihuahua, for
30 years. He has been President of Esvamex, S.A. de C.V. since 1985. Mr.
Gallegos graduated as a Certified Public Accountant from the Instituto
Tecnologico y de Estudios Superiores de Monterrey, and has studied at the
American Management Association, Stanford Executive Program, Advanced Management
College and Instituto de Administracion Cientifica de las Empresas.
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Daniel L. Johnson
Mr. Johnson joined Elamex as Vice President and Chief Financial Officer in
December of 1999. He has more than 29 years experience with multinationals in
the U.S. and in Latin America, including General Mills, Inc., Citibank and
Continental Grain Company. He received his B.S. from Brigham Young University.
Jerry W. Neely
Mr. Neely is Director and Chairman of the Executive Committee of Smith
International, Inc. Mr. Neely retired as President/Chairman CEO in 1988. He held
several positions at Smith International, Inc. from 1966 to 1988. He serves on
the Boards of Norris Cancer Hospital and All Coast Forest Products, is a Trustee
of The University of Southern California, Past Chairman of Petroleum Equipment
Supplies Association and Past Chairman of The Young Presidents Organization. Mr.
Neely received a B.S. in Industrial Management/Business Administration from
University of Southern California.
Hector M. Raynal
Mr. Raynal has been President and Chief Executive Officer of Elamex since
January 1995. In 1994 he was the General Director of Pondercel, S.A. de C.V., a
pulp and paper manufacturer. From 1990 to 1994, Mr. Raynal directed the paper
unit at Pondercel, and served as a director, Vice President, and Secretary of
Pondercel's U.S. marketing subsidiary. Mr. Raynal has held various positions
with Accel and Grupo Chihuahua since 1983. He received a B.S. and M.S. in
Electrical Engineering and an M.B.A. from Stanford University.
Leon Reinhart
Mr. Reinhart is President and CEO of First National Bank of San Diego. He
has more than 30 years of banking experience including various senior capacities
with Citibank, in the United States, Latin America, and the Middle East.
Alfred J.V. Stanley
Mr. Stanley began his career with Amoco Canada as a Plant Engineer in
Northern Alberta. He then joined Woodbrige Foam as a Processes Engineer and then
as a Manufacturing Manager. After business school, he worked as a strategy and
operations consultant for Symmetrix, a technology consulting firm. He joined
GE's Corporate Initiatives Group in 1997 as a Manager of Strategic Initiatives
focusing on information technology. In 1998, he moved to GE Lighting as General
Manager of Distribution. In 1999, he became General Manager on Six Sigma
Worldwide for Lighting. He assumed his current role as Chairman of the Board and
CEO of GE International Mexico at the beginning of 2000.
Jesus E. Vallina
Mr. Vallina has been Director of Public Relations of Accel and its
predecessor, Grupo Chihuahua, for the past 23 years. He is President of
Constructora Inmobiliaria Las Americas, S.A. de C.V., and Director of Kleentex
Corp. He is also an Advisory Director of Norwest Bank El Paso. Mr. Vallina is a
graduate of the University of Texas at El Paso, where he received a degree in
Business Administration.
Eloy Vallina Garza
Mr. Vallina is currently in charge of the Business Operations
International Banking of First National Bank in San Diego. He is also a director
of Accel, Almacenadora, S.A., and
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Copamex. Mr. Vallina is a graduate of the University of Monterrey, where he
received a B.A. in Business Administration.
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Robert J. Whetten
Mr. Whetten has been a Director of Elamex since 1994. He served as
President and Chief Executive Officer of Norwest Bank El Paso from 1991 until
February 1996. Mr. Whetten has 20 years of banking experience in the United
States and Latin America. He received a B.A. in Finance and a Master of Public
Administration from Brigham Young University. Mr. Whetten is out of the country
and does not expect to attend meetings until his return. Mr. Whetten has
consented to continue as a director while away and has agreed to return to full
status upon his return.
Jose O. Garcia Mata
Mr. Garcia Mata has been a partner with Deloitte & Touche - Mexico since
1981, where he currently serves as National Director of Accounting and Auditing.
Mr. Garcia Mata is a U.S. Certified Public Accountant and holds a baccalaureate
degree in Business Administration from Woodbury University in Los Angeles.
Board Meeting and Committees
The Board of Directors of the Company held a total of four (4) meetings
during Fiscal 1999, the majority of the directors attended all of the meetings
of the Board of Directors and meetings of committees upon which such director
served.
The Board of Directors has established an Executive Committee, an Audit
Committee and a Compensation Committee. Messrs. Eloy S. Vallina (Chairman),
Jesus Alvarez-Morodo, Eduardo L. Gallegos, Hector M. Raynal, and Jesus E.
Vallina serve on the Executive Committee. Messrs. Eduardo L. Gallegos
(Chairman), Federico Barrio, Antonio L. Elias, and Jerry W. Neely serve on the
Audit Committee. Messrs. Jesus Alvarez-Morodo (Chairman), Antonio L. Elias,
Federico Barrio and Jerry W. Neely serve on the Compensation Committee. The
Board of Directors delegates to the Executive Committee authority over ordinary
management decisions. The Audit Committee examines and considers matters
relating to the financial affairs of the Company, including reviewing the
Company's annual financial statements, the scope of the independent annual audit
and internal audits and the independent accountants' letter to management
concerning the Company's internal financial and accounting controls. The
Compensation Committee considers and makes recommendations to the Board of
Directors with respect to programs for human resource development and management
organization and succession, evaluates and recommends levels of senior executive
compensation, supervises the hiring of senior executives, considers and makes
recommendations to the Board of Directors with respect to compensation matters
and policies and employee benefit and incentive plans and exercises authority
granted to it to administer such plans.
Director Compensation
Directors who are not employees of the Company ("Non-employee Directors")
will receive annual retainers of $4,680.00. In addition, each Non-employee
Director will be paid $1,757.60 for each Board meeting attended. Non-employee
Directors will receive annual compensation of $4,680.00 for service on the
Committees of the Board on which they sit, in addition to $1,757.60 for each
Committee meeting attended. Additionally, the Chairman of the Board will receive
annual compensation of $166,400.00 and the Vice-Chairman will receive annual
compensation of $78,000.00. Employee directors are not compensated for their
service on the Board of Directors or
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on committees of the Board. Alfred J.V. Stanley, in accordance with GE's
policies, will not receive compensation either.
Required Vote
The majority of votes cast at the Annual Meeting are required for a
nominee to be elected director.
MANAGEMENT RECOMMENDS A VOTE "FOR " THE NOMINEES LISTED ABOVE.
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PROPOSAL TWO
APPROVAL OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected Deloitte & Touche LLP ("Deloitte"), as
independent public accountants, to audit the financial statements of the Company
for Fiscal 2000. Deloitte has audited the Company's financial statements since
Fiscal 1999. KPMG LLP ("KPMG") audited the Company's financial statements since
fiscal 1990 through the end of Fiscal 1998. Representatives of Deloitte are
expected to be present at the meeting with the opportunity to make a statement
if they desire to do so, and are expected to be available to respond to
appropriate questions.
Required Vote
The affirmative vote of a majority of the votes cast is required under
Mexican law to approve the appointment of the independent public accountants.
For this purpose, the "Votes Cast" are defined under Mexican law to be the
shares of the Company's Common Stock represented and voting at the Annual
Meeting. In addition, the affirmative votes must constitute at least a majority
of the required quorum, which quorum is a majority of the shares outstanding on
the Record Date. Votes that are cast against the proposal will be counted for
purposes of determining (i) the presence or absence of a quorum and (ii) the
total number of Votes Cast with respect to the proposal. Abstentions will have
the same effect as a vote against the proposal. Broker non-votes will be counted
for purposes of determining the presence or absence of a quorum for the
transaction of business, but will not be counted for purposes of determining the
number of Votes Cast with respect to the proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR"
APPROVAL OF THE APPOINTMENT OF DELOITTE AS INDEPENDENT ACCOUNTANTS. THE EFFECT
OF AN ABSTENTION IS THE SAME AS THAT OF A VOTE AGAINST THE RATIFICATION OF THE
APPOINTMENT OF DELOITTE AS INDEPENDENT ACCOUNTANTS.
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PROPOSAL THREE
APPLICATION OF 1999 NET INCOME
The Board of Directors has proposed to apply net income of 1999 as
follows: 5% to be accrued as legal reserve, and the remaining as Retained
Earnings. The Mexican Law of Commercial Companies ("Ley General de Sociedades
Mercantiles") requires that at least 5% of the Company's net income each year
(after profit sharing and other deductions required by law) be allocated to a
legal reserve fund, which is not thereafter available for distribution except as
a stock dividend until the amount of such fund equals 20% of the Company's
common stock. The Company may also maintain additional reserves. Mexican
corporations usually pay dividends out of earnings (including retained earnings)
after an allocation to the legal and other reserves and prior approval at a
general stockholders' meeting.
Required Vote
The affirmative vote of a majority of Votes Cast is required to approve
the proposed application of 1999 Net Income.
MANAGEMENT RECOMMENDS A VOTE "FOR" THE APPLICATION OF NET INCOME LISTED ABOVE.
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CERTAIN TRANSACTIONS
The Company has entered into indemnification agreements with its executive
officers, directors, and certain significant employees containing provisions,
which are in some respects broader than the specific indemnification provisions
contained in the Mexican General Corporation Law. These agreements provide,
among other things, for indemnification of the executive officers, directors,
and certain significant employees in proceedings brought by third parties and in
shareholder derivative suits. Each agreement also provides for advancement of
expenses to the indemnified party. The agreements have been approved by the
majority vote of the disinterested shareholders of the Company.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table except as otherwise indicated sets forth as of
March 10, 2000 information relating to the beneficial ownership of the Company's
Common Stock by each person known by the Company to be the beneficial owner of
more than five percent (5%) of the outstanding shares of Common Stock.
Approximate
Name and Address of Amount Percentage
Beneficial Owner Owned Owned
---------------- ----- -----
Accel, S. A. de C. V. 4,051,300 54.8%
Avenida Zarco No. 2401
31020 Chihuahua, Chih.
Mexico
Eloy S. Vallina (1) 4,051,300 54.8%
Avenida Zarco No. 2401
31020 Chihuahua, Chih.
Mexico
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(1) Mr. Vallina directly owns 130,862,957 shares, or 44.8%, of the outstanding
voting common stock of Accel. In addition, Mr. Vallina controls companies
that hold 46,414,851 shares, or 15.8%, of the outstanding voting common
stock of Accel. Accel, in turn, owns approximately 54.8% of the
outstanding common stock of Elamex.
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EXECUTIVE OFFICERS COMPENSATION
Executive Compensation
During the year ended December 31, 1999, Elamex paid, either directly or
through a related company, Elamex Administration, Inc. (EAI), an aggregate of
$1.3 million to all of its directors and officers as a group for services in all
capacities and an additional $200,000 in respect of a discretionary compensation
plan. During such year, the Company, through EAI, set aside or accrued an
aggregate of $47,188 to provide pension, retirement or similar benefits for its
directors and officers pursuant to existing plans, consisting solely of a 401(k)
plan for its U.S. based officers and Directors.
COMPENSATION REPORT
Compensation Philosophy
The Company's executive compensation policies are designed to attract and
retain qualified personnel by providing competitive compensation and to
reinforce strategic performance objectives through the use of incentive
compensation programs. In order to provide incentives to executive officers, an
important percentage of their annual compensation is paid as a bonus. The amount
of the bonus for each person is determined on the basis of several indicators of
corporate performance as outlined below.
Compensation Plans
The following are the key components of the Company's executive officers
compensation:
Base Compensation. The Committee establishes base salaries for executive
officers based on its review of base salaries of executive officers in companies
of comparable size and in similar industries.
Bonuses. The Company's Executive Bonus Plan (the Bonus Plan) covers the
Company's executive officers and other key employees. The Bonus Plan provides
for incentive compensation to those covered and is determined cumulatively on a
yearly basis based principally on certain performance measures. The Committee
believes that these factors are indicative of overall corporate performance and
shareholder value. Individual performance is measured based on goals related to
each person's function within the organization.
Long Term Incentive Compensation. The Company's Executive Phantom Stock
Plan (the "Plan") provides for long term incentive compensation for employees of
the Company, including executive officers. An important portion of the total
compensation package for the Company's
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executive officers is in the form of Executive Phantom Stock awards. These
awards give employees a "phantom" equity interest in the Company, thereby
aligning the interests of executive officers and shareholders and providing
incentive to maximize shareholder value.
Executive Phantom Stock Plan
On October 17, 1995, Elamex adopted the Plan in order to offer long-term
incentives to eligible persons to continue their employment with the Company,
furthering the growth and earnings of the Company. Key employees of the Company,
EAI (from which the Company obtains the services of certain employees residing
in the United States), and any of the Company's affiliates or subsidiaries, in
each case as selected by the Compensation Committee of the Board of Directors
(each, a "Participant") are eligible to participate in the Plan. There are
currently seven (7) Participants in the Plan. In addition, other employees may
in the future be named as Participants. Participants receive benefits expressed
in shares of Common Stock, but which are not actual shares of Common Stock
("Phantom Stock Shares"). As of March 10, 2000, 27,282 Phantom Stock Shares had
been granted to five (5) Participants. The Company keeps a record of the amount
of Phantom Stock Shares held by each Participant. Each Participant's account is
also credited with dollar amounts equal to dividends paid on issued and
outstanding Common Stock, and such amounts accrue interest at the short-term
money-market rate published by The Chase Manhattan Bank, N.A. The accrual of
dividends and interest ceases to a Participant upon termination of the
Participant's employment with the Company.
Generally, a Participant may exercise the right to receive payment for an
award of Phantom Stock Shares two years after the Determination Date (as defined
in the Plan) with respect to such Phantom Stock Shares. Phantom Stock Shares
expire ten years after the Determination Date with respect to such Phantom Stock
Shares. Phantom Stock Shares and accrued dividends and interest are forfeited
upon termination of employment for cause or upon the commencement of employment
with a competitor. The Company is not required to distribute amounts in excess
of $150,000 in the aggregate in any calendar quarter, and a Participant may not
exercise the right to receive payment for Phantom Stock Shares more than once in
any calendar quarter. Notwithstanding the foregoing, the Compensation Committee
may retroactively allocate additional Phantom Stock Shares to Participants.
Furthermore, the Board of Directors may at any time, or from time to time,
amend, modify or supplement the Plan in whole or in part or terminate it.
OTHER MATTERS
The Company knows of no other matters to be submitted at the meeting. If
any other matters properly come before the meeting, it is the intention of the
persons named in the enclosed form of Proxy to vote the shares they represent as
the Company may recommend.
THE BOARD OF DIRECTORS
Dated: March 10, 2000
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Corporate Docs\Proxy Stmnt99 00-03-30
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Detach Proxy Card Here
1. Election of Directors: FOR all nominees WITHHOLD AUTHORITY to vote
listed below |X| for all nominees listed below |X|
*EXCEPTIONS |X|
The Management recommends a vote FOR
Nominees: Eloy S. Vallina, Jesus Alvarez-Morodo, Federico Barrio, Antonio L.
Elias, Eduardo L. Gallegos, Daniel L. Johnson, Jerry W. Neely,
Hector M. Raynal, Leon H. Reinhart, Alfred J.V. Stanley, Eloy
Vallina Garza, Jesus E. Vallina, and Robert J. Whetten.
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*Exceptions_____________________________________________________________________
INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark the
"Exceptions" box and write that nominee's name in the space provided.
2. To ratify and approve the selection by the Board of Directors of Deloitte
& Touche LLP as independent public accountants for the Company for the
fiscal year ending December 31, 2000.
FOR X AGAINST X ABSTAIN X
{front continued}
3. To ratify and approve the proposal by the Board of Directors of applying
5% of 1999 Net Income to the Legal Reserve and the remaining as Retained
Earnings.
FOR X AGAINST X ABSTAIN X
4. In their discretion the Proxies are authorized to vote upon such other
matters as may properly come before the meeting or any adjournment or
postponement thereof.
Change of Address or
Comments Mark Here |X|
The signature on this Proxy should
correspond exactly with stockholders
name as printed to the left. In the
case of joint tenancies,
Co-executors, or Co-trustees, both
should sign. Persons signing as
Attorney, Executor, Administrator,
Trustee or Guardian should give
their full title.
Dated: , 2000
Signature
Signature
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{Back Bottom Portion}
ELAMEX, S.A. DE C.V.
PROXY VOTING INSTRUCTION CARD
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
ELAMEX, S.A. DE C.V. FOR THE ANNUAL MEETING ON APRIL 28, 2000
The undersigned appoints Eduardo Romero Ramos and Raul Jaquez Madrid and
each of them, with full power of substitution in each, the proxies of the
undersigned, to severally represent the undersigned and vote all shares of
Elamex, S.A. de C.V. common stock which the undersigned may be entitled to vote
at the Annual Meeting of Shareholders to be held on April 28, 2000 at 9:00 A.M.
local time, at Av. Insurgentes 4145-B Ote., Cd. Juarez, Chih. Mexico, and at any
adjournment or postponement thereof, as indicated on the reverse side.
This proxy, when properly executed, will be voted in the matter directed
herein by the undersigned shareholder. If no direction is given, this proxy will
be voted FOR the election of directors and FOR the proposals described in items
2,3, and 4.
Elamex, S.A. de C.V.
Ave. Insurgentes 4145-B Ote.
Cd. Juarez, Chih., Mexico
(Continued, and to be signed and dated on the reverse side)
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