Matrix Asset Management Inc.

Matrix Asset Management Inc.

September 29, 2010 08:43 ET

Matrix Asset Management Adopts 5 Year, Performance-Linked Restricted Share Plan

HALIFAX, NOVA SCOTIA--(Marketwire - Sept. 29, 2010) - Matrix Asset Management Inc. ("Matrix" or the "Company") (TSX:MTA) announced today that it has adopted a 5 year, performance-linked restricted share plan (the "RS Plan" or the "Plan"). The RS Plan is intended to serve as a cost effective long term incentive plan for employees of Matrix (and its affiliates) and align employee and shareholder interests as the Company pursues new growth opportunities.

The RS Plan permits the Company to grant "restricted" common shares to participants. Applicable restrictions are formulated for each grant. Appendix A lists the material restrictions approved to be applied to initial grants under the Plan and generally expected to be applied to future grants. The shares only become free of restrictions once the restriction terms and conditions are satisfied. Shares for which restriction terms and conditions are not fulfilled are forfeited back to Matrix. Vesting and transfer restrictions span over a 5 year period and vesting is conditional on participants attaining performance goals.

Matrix has brought together asset management operating subsidiaries in institutional and high net worth, retail investment funds, and venture capital/private equity funds. The RS Plan is also designed to support key employee retention, provide a common long term incentive plan across the organization, and focus employees on Company-wide synergies and results.

The RS Plan was reviewed over a number of months by Matrix's Governance & Compensation Committee in light of Matrix's particular needs and circumstances. A key factor in favour of the Plan was its comparatively low cost per year to the Company versus other long incentive plan alternatives. A grant to a participant under the RS Plan is intended to span over a 5 year period, thereby generally eliminating multiple grants to individuals during that period and supporting a lower "per year" cost.

To help move to one primary long term incentive plan across the organization, holders of existing Matrix deferred stock units ("DSUs") and stock options who remain actively employed or hold office with the Company or its affiliates will be offered an opportunity to cancel those instruments and migrate to restricted shares governed by the Plan.

The Plan can create Restricted Shares from common shares issued from treasury and from already issued common shares purchased for that purpose. The maximum number of common shares issuable from treasury under the Restricted Share Plan is 10% of Matrix's issued and outstanding common shares. Additionally, the number of shares issuable from treasury to insiders pursuant to the Plan and any other Matrix treasury security based compensation arrangements is limited to 10% of the total number of common shares. Matrix's restricted share plan is available on the SEDAR website at

The RS Plan has been conditionally approved by the Toronto Stock Exchange but remains subject to shareholder approval. To avoid the expense of calling a special meeting, shareholder approval of the Plan will be sought at Matrix's next annual general meeting. During development of the Plan, consultations were held with some significant shareholders to help gauge shareholder views. Pending receipt of shareholder approval, grants will be made under the RS Plan on the basis that restricted shares will be forfeited in the event that shareholders do not approve the plan. Certificates representing restricted shares will be deposited into escrow and the restricted shares will not vest, and participants under the plan will not derive any benefit from their restricted shares, until such approval is obtained.

In connection with the consolidation of Matrix's equity-based incentive plans and establishing a long term incentive for all employees within the Matrix group, the Board has approved the grant of up to 4,445,593 restricted shares from treasury under the RS Plan.

David Levi, Matrix's CEO, commented that "Our primary objective was to implement an effective long term incentive plan that cultivates a united, performance-driven culture at Matrix over the medium and long-term. We believe the restricted share plan will do that."

About Matrix (

Matrix (TSX:MTA) is a diversified asset and wealth management company with offices across Canada. The company's mission is to provide a diverse array of investment choices and the best possible investment management service to Canadian investors and institutions. The company delivers its services through three main operating subsidiaries serving institutional, high net worth, and retail investors.

Forward-Looking Statements

Certain statements in this release are forward-looking statements, including statements regarding the expected tax, cash flow and HR advantages of the RS Plan and the incentive value provided by the RS Plan. Forward-looking statements are predictive in nature and are not based upon historical fact. Forward-looking statements are based upon beliefs and assumptions, including beliefs and assumptions concerning economic and market conditions and the impact of such conditions and other factors on the market price of Matrix's common shares, future appreciation of the price of Matrix common shares, the availability of earnings from which to pay dividends, tax rates and laws and applicable accounting principles. While management considers these beliefs and assumptions to be reasonable based on information currently available to it, they are subject to numerous risks and uncertainties and no assurance can be given that such beliefs and assumptions will prove to be correct. Accordingly, actual results may differ significantly from those expressed or implied by forward-looking statements due to many factors including, but not limited to, risks associated with institutional, mutual fund and venture capital fund management sectors generally, market, economic, political and other risks affecting operating results and market conditions, changes to regulatory requirements, accounting and reporting policies (including the adoption of IFRS) and tax laws, Matrix's ability to effectively recruit and retain key management personnel and Matrix's ability to successfully integrate acquired operations and implement cost savings measures and growth strategies. Many of these risks are beyond the control of Matrix.

Readers are cautioned to consider these and other risks, uncertainties and potential events carefully and not place undue reliance on forward-looking statements. Other than as specifically required by law, Matrix undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date on which such statements are made, or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results or otherwise.

Appendix A

Restricted Share Restrictions


Participants – Employees, officers, directors and consultants of Matrix (and its affiliates) are eligible participants ("Participants") under the Plan. The board of directors, or when delegated the authority, the Governance & Compensation Committee (in either case the "Board"), can make grants under the Plan and formulate and vary restrictions that apply to each grant. It is expected that restrictions similar to those summarized in this Appendix will generally apply to future grants under the Plan.

Shares – Grants under the Plan consist of Matrix common shares ("Shares"), either issued from treasury or already issued and acquired, that have restrictions attached to them under the Plan. The Plan limits issuances from treasury to no more than 10% of the issued Shares of Matrix on a rolling basis.

Restricted Shares Held by Trustee or Custodian – All restricted Shares will be held in the name of the Plan trustee (the "Trustee") for the benefit of the Participant or, in the case of non-treasury Shares acquired for this purpose, by a custodian (the "Custodian") with whom Shares are deposited by the Trustee. The Participant will have no custody or control of the Shares while they are with the Trustee or Custodian. The Board is empowered under the Plan to vary restrictions attached to Shares in circumstances it considers appropriate. Restricted Shares will only be released to the Participant after they become free of restrictions.

Restrictions Summary

The following table summarizes key restrictions, step-downs and the resulting release schedule for the initial grants under the Restricted Share Plan to Participants, assuming they meet the performance-based vesting conditions noted below.

Year End Shares Vested * Shares that Can't be Voted Shares Prohibited from being Sold/Transferred Shares Free of Restrictions & Released
1 20% 80% 100% 0%
2 40% 60% 100% 0%
3 60% 40% 60% 40%
4 80% 20% 60% 40%
5 100% 0% 0% 100%
* Subject to the Participant meeting his or her performance goals for the year. If restricted Shares do not vest due to the participant not meeting his or her performance goals, those unvested restricted Shares will remain eligible for vesting for the following two years and the transfer and other restrictions applicable thereto will be correspondingly extended.

Restrictions Applicable to Initial Grants under the RS Plan

  • Non-Voting – Any Shares held with the Trustee or Custodian may not be voted and the Participant cannot direct voting. In the case of certain major transactions, the Board is empowered to direct how the votes on restricted Shares are to be cast or can allow the Participants to direct voting of the Shares held with the Trustee or Custodian.
  • 5 Year Vesting – Restricted Shares will vest equally over 5 years as follows. Each year the following two tests would be applied:
  1. Does the Participant still remain with the Company (or an affiliate)?
  2. Has the Participant sufficiently met his or her "performance" goals for the performance year?

If the tests are met, 20% of the restricted Shares would vest each year. So, over 5 years if the above tests are consistently met, the Shares would vest 20% per year until 100% of the Shares are vested at the end of year 5. If a Participant does not meet his or her individual performance goals in a given year, that year's portion will not vest (but may later vest if, within the subsequent 2 years, the Participant does meet his or her performance goals). Any restricted Shares not vested during the 5 year period will be forfeited and retuned back to the Company.

Early Vesting - In exceptional or specific circumstances, such as those listed below, the Board will have the discretion to accelerate and release all or part of the remaining restrictions on Shares:

  1. death or permanent disability, or
  2. a director "retires" from the Board after a minimum number of years of service.

Prohibition on Sale/Transfer – No Shares can be sold or transferred during the 3 year period after grant. After 3 years, up to 40% of the granted Shares could be sold or transferred. However, the percentage that could be sold could not be greater than the percentage of shares that have vested. After 5 years, any remaining vested Shares would be free of the prohibition on sale or transfer. Intra-family transfers to effect tax planning would generally be permitted. However, any such family transferee(s) would remain subject to the original prohibition on sale/transfer.

Release – Shares will only be transferred into the name of the Participant and released into the possession of the Participant after they become free of all restrictions.

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