<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14a INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] 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
</TABLE>
United States Lime & Minerals, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] 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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<PAGE> 2
UNITED STATES LIME & MINERALS, INC.
12221 Merit Drive
Suite 500
Dallas, Texas 75251
[UNITED STATES LIME & MINERALS LOGO]
March 26, 1999
Dear Shareholders:
You are cordially invited to attend the 1999 Annual Meeting of
Shareholders at 10:00 a.m. on Friday, April 30, 1999, at the Sheraton Park
Central Hotel, 7750 LBJ Freeway, Dallas, Texas, 75251. Please refer to the
back of this letter for directions. The Meeting will be preceded by an
informal reception starting at 9:30 a.m., at which you will have an
opportunity to meet the Directors and Officers of the Company.
Enclosed with this letter is a Notice of the Annual Meeting, Proxy
Statement, and Proxy Card. I urge you to complete, sign, date, and mail the
enclosed Proxy Card at your earliest convenience. Regardless of the size of
your holdings, it is important that your shares be represented. If you
attend the Meeting, you may withdraw your Proxy and vote in person.
I look forward to meeting and speaking with you at the Annual Meeting
on April 30, 1999.
Sincerely,
Herbert G.A. Wilson
President and Chief
Executive Officer
Enclosures
<PAGE> 3
UNITED STATES LIME & MINERALS, INC.
Directions to the 1999 Annual Meeting of Shareholders
Friday, April 30, 1999, at 10:00 a.m.
at the
SHERATON PARK CENTRAL HOTEL
7750 LBJ FREEWAY
DALLAS, TEXAS 75251
972-233-4421
[GRAPH]
FROM DFW AIRPORT: FROM DOWNTOWN DALLAS:
o North exit from airport o North on North Central Expressway
o East on I-635 (LBJ) (U.S. 75)
o Exit at Coit Road o Exit to Coit Road
o Turn Right immediately into the (Exit passes over U.S. 75 and joins
Sheraton Hotel reception area Coit Road)
o Turn Left at second red light onto
Banner Drive
o At first intersection (Merit Drive),
turn right and immediately turn left
into a lane leading to the rear
entrance to the Sheraton Hotel
<PAGE> 4
UNITED STATES LIME & MINERALS, INC.
12221 Merit Drive
Suite 500
Dallas, Texas 75251
NOTICE OF 1999 ANNUAL MEETING OF SHAREHOLDERS
To Be Held On April 30, 1999
To the Shareholders of
United States Lime & Minerals, Inc.:
Notice is hereby given that the 1999 Annual Meeting of Shareholders of
United States Lime & Minerals, Inc., a Texas corporation (the "Company"), will
be held on Friday, the 30th day of April, 1999, at 10:00 a.m., local time at the
Sheraton Park Central Hotel, 7750 LBJ Freeway, Dallas, Texas, 75251 (the "Annual
Meeting"), for the following purposes:
1. To elect seven directors to serve until the next annual
meeting of shareholders and until their respective successors
have been duly elected and qualified;
2. To consider and vote upon a proposal to approve the United
States Lime & Minerals, Inc. 1992 Stock Option Plan, as
Amended and Restated (the "1992 Plan"), increasing from
380,000 to 480,000 the aggregate number of shares of Common
Stock for which options may be granted under the 1992 Plan,
and imposing a 70,000-share per-person limit on options
granted under the Plan; and
3. To transact such other business as may properly be brought
before the Annual Meeting or any adjournment thereof.
Information regarding the matters to be acted upon at the Annual
Meeting is contained in the Proxy Statement accompanying this Notice.
The Board of Directors has fixed the close of business on March 22,
1999, as the record date for the determination of shareholders entitled to
notice of and to vote at the Annual Meeting or any adjournment thereof. Only
shareholders of record at the close of business on the record date will be
entitled to notice of and to vote at the Annual Meeting or any adjournment
thereof. A complete list of such shareholders will be available for inspection
during usual business hours for ten days prior to the Annual Meeting at the
office of the Company in Dallas, Texas.
All shareholders are cordially invited to attend the Annual Meeting.
SHAREHOLDERS ARE URGED, WHETHER OR NOT THEY PLAN TO ATTEND THE ANNUAL MEETING,
TO COMPLETE, SIGN, AND DATE THE ACCOMPANYING PROXY CARD AND TO RETURN IT
PROMPTLY IN THE POSTAGE-PAID RETURN ENVELOPE PROVIDED. If a shareholder who has
returned a Proxy Card attends the Annual Meeting in person, such shareholder may
revoke the Proxy and vote in person on all matters submitted to the shareholders
at the Annual Meeting.
By Order of the Board of Directors,
Herbert G.A. Wilson
President and Chief Executive Officer
Dallas, Texas
March 26, 1999
<PAGE> 5
UNITED STATES LIME & MINERALS, INC.
12221 MERIT DRIVE
SUITE 500
DALLAS, TEXAS 75251
PROXY STATEMENT
FOR
1999 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 30, 1999
INTRODUCTION
The accompanying proxy (the "Proxy Card"), mailed together with this
proxy statement (the "Proxy Statement"), is solicited by and on behalf of the
Board of Directors of United States Lime & Minerals, Inc., a Texas corporation
(the "Company"), for use at the 1999 Annual Meeting of Shareholders of the
Company to be held at the time and place and for the purposes set forth in the
accompanying Notice (the "Annual Meeting"). The approximate date on which this
Proxy Statement and Proxy Card were first sent to shareholders of the Company is
March 26, 1999.
Shares of the Company's common stock, par value $0.10 per share (the
"Common Stock"), represented by valid Proxies in the form enclosed, duly signed,
dated, and returned to the Company and not revoked, will be voted at the Annual
Meeting in accordance with the directions given. In the absence of directions to
the contrary, such shares will be voted:
FOR the election of the seven nominees named in the Proxy Card
to the Board of Directors of the Company (the "Board of
Directors" or the "Board").
FOR the approval of the United States Lime & Minerals, Inc.
1992 Stock Option Plan, as Amended and Restated (the "1992
Plan"), increasing from 380,000 to 480,000 the aggregate
number of shares of Common Stock for which options may be
granted under the 1992 Plan, and imposing a 70,000-share
per-person limit on options granted under the Plan.
If any other matter is properly brought before the Annual Meeting for
action at the Meeting, which is not currently anticipated, the Proxy holders
will vote the Proxies in accordance with their best judgment in such matter.
Any shareholder of the Company returning a Proxy Card has a right to
revoke the Proxy at any time before it is exercised by giving written notice of
such revocation to the Company addressed to Herbert G.A. Wilson, President and
Chief Executive Officer, United States Lime & Minerals, Inc., 12221 Merit Drive,
Suite 500, Dallas, Texas 75251; however, no such revocation shall be effective
until such notice of revocation has been received by the Company at or prior to
the Annual Meeting.
VOTING SECURITIES AND PRINCIPAL SHAREHOLDER
Only holders of record of Common Stock at the close of business on
March 22, 1999, the record date for the Annual Meeting, are entitled to notice
of and to vote at the Annual Meeting or any adjournment thereof. The presence of
the holders of a majority of the outstanding shares of Common Stock is necessary
to constitute a quorum. On the record date for the Annual Meeting, there were
issued and outstanding 3,977,189 shares of Common Stock. At the Annual Meeting,
each shareholder of record on March 22, 1999, will be entitled to one vote for
each share of Common Stock registered in such shareholder's name on the record
date.
<PAGE> 6
The following table sets forth, as of March 22, 1999, information with
respect to the only shareholder known to the Company to be the beneficial owner
of more than five percent of the issued and outstanding shares of Common Stock:
<TABLE>
<CAPTION>
Name and Address Number of Shares Percent
of Beneficial Owner Beneficially Owned of Class
- ------------------- ------------------ --------
<S> <C> <C>
Inberdon Enterprises Ltd. 2,013,448 50.62%
1020-789 West Pender Street
Vancouver, British Columbia
Canada V6C 1H2 (1)
</TABLE>
- ------------------------------
(1) Inberdon Enterprises Ltd. ("Inberdon") is principally engaged in the
acquisition and holding of securities of aggregate producing companies
located in North America. All of the outstanding shares of Inberdon are
held, indirectly through a number of private companies, by Mr. George
M. Doumet.
ELECTION OF DIRECTORS
Seven directors, constituting the entire Board of Directors, are to be
elected at the Annual Meeting to serve until the next annual meeting of
shareholders and until their respective successors have been duly elected and
qualified. All of the nominees are currently directors of the Company.
Directors are elected by a plurality of the votes cast by the holders
of shares entitled to vote in the election of directors at the Annual Meeting.
The Company's Restated Articles of Incorporation prohibit cumulative voting for
the election of directors. All duly submitted and unrevoked Proxies will be
voted FOR the nominees selected by the Board of Directors except where
authorization so to vote is withheld. Abstentions and broker non-votes are not
counted in the election of directors.
The Board of Directors recommends that all shareholders vote FOR the
election of all such nominees. If any nominee should become unavailable for
election for any presently unforeseen reason, the persons designated as Proxy
holders will have full discretion to vote for another person nominated by the
Board.
The Company has a standing Executive Committee, Audit Committee, and
Compensation Committee, but does not have a standing nominating committee.
During the fiscal year ended December 31, 1998, the Board of Directors held four
meetings, and the Executive Committee held two meetings. The Audit Committee
held two meetings, and the Compensation Committee held one meeting. During the
fiscal year ended December 31, 1998, each director attended at least 75% of the
aggregate of (a) the total number of meetings held by the Board and (b) the
total number of meetings held by all committees of the Board on which he served.
The seven nominees for director are named below. Each has consented to
serve as a director if elected. Set forth below is pertinent information with
respect to each nominee:
JOHN J. BROWN
Mr. Brown, age 66, has served as a director of the Company since July
1993. Mr. Brown is a director and President of Pacific Opportunity
Company Ltd., a financial consulting and merchant banking firm located
in Vancouver, Canada. He is a director of several public and private
firms. From 1990 to 1993, he served as a director and chief financial
officer of an "LTL" transportation firm in Western Canada. From 1984 to
1990, Mr. Brown was an investment advisor with a Canadian brokerage
firm. Mr. Brown is a Chartered Accountant and was a senior partner with
the public auditing firm of Deloitte & Touche, Chartered Accountants,
in Vancouver, Canada.
-2-
<PAGE> 7
TIMOTHY W. BYRNE
Mr. Byrne, age 41, has served as a director of the Company since March
1991. Mr. Byrne was employed with the Company in various capacities
from August 1990 to January 1, 1999. Effective that date, he resigned
as President, Chief Executive Officer, and Chief Financial Officer.
Since his resignation as an executive officer of the Company, Mr. Byrne
has continued as an employee of the Company. From December 1997 to
December 31, 1998, Mr. Byrne served as President, Chief Executive
Officer, and Chief Financial Officer of the Company; from December 1993
to December 1997, he served as Senior Vice President -- Finance and
Administration and Chief Financial Officer; and from November 1990 to
December 1993, he served as Vice President - Finance and Chief
Financial Officer. From 1985 through 1989, Mr. Byrne was a partner in a
Washington, D.C., consulting and accounting firm.
RICHARD W. CARDIN
Mr. Cardin, age 63, was appointed a director of the Company by the
Board in August 1998. In 1995, he retired from Arthur Andersen, LLP
after 37 years, serving as an office managing partner for 26 of those
years. Mr. Cardin also serves on the board of directors of Atmos Energy
Corporation and CCA Prison Realty Trust, both of which are publicly
owned companies listed on the New York Stock Exchange. He is also a
member of the board of directors of Pulmonary Solutions, Inc., a
private health care company, and is the Chairman of the Advisory
Committee to the Dean of the College of Business at the University of
Tennessee.
ANTOINE M. DOUMET
Mr. Doumet, age 39, has served as a director of the Company since July
1993 in the capacity of Vice Chairman. He is a private businessman and
investor. From 1989 to 1995, he served as a director of MELEC, a French
electrical engineering and contracting company. From 1988 to 1992, Mr.
Doumet served as vice president and a director of Lebanon Chemicals
Company. Mr. Doumet is the brother of Mr. George M. Doumet, who
indirectly owns all of the outstanding shares of Inberdon.
WALLACE G. IRMSCHER
Mr. Irmscher, age 76, has served as a director of the Company since
July 1993. He was a senior executive with 44 years of diversified
experience in the construction and construction materials industry.
Since 1995, he has served as a director of N-Viro International
Corporation, a company involved in the recycling of industrial waste.
From 1993 to 1995, Mr. Irmscher was a director and officer of
Newfoundland Resources & Mining Company Limited. Mr. Irmscher has
performed consulting services for various companies in the cement,
construction, and environmental industries.
EDWARD A. ODISHAW
Mr. Odishaw, age 63, has served as a director and Chairman of the Board
of the Company since July 1993. He has practiced law in Saskatchewan
and British Columbia, Canada, since 1964, with emphasis on commercial
law, corporate mergers, acquisitions, and finance. Mr. Odishaw has been
a Barrister and Solicitor with the law firm of Boughton Peterson Yang
Anderson, located in Vancouver, Canada, since February 1992. From 1972
to 1992, Mr. Odishaw was a Barrister and Solicitor with the law firm of
Swinton & Company, Vancouver, Canada. Mr. Odishaw holds directorships
in numerous companies in Canada. Mr. Odishaw is a member in good
standing of the Law Society of British Columbia and the Canadian Bar
Association and is a non-practicing member of the Law Society of
Saskatchewan.
-3-
<PAGE> 8
HERBERT G.A. WILSON
Mr. Wilson, age 49, was appointed a director of the Company by the
Board effective January 1, 1999. On that date, he joined the Company as
President and Chief Executive Officer in succession to Mr. Byrne. From
1992 until December 1998, he was Chief Operating Officer and Executive
Vice President of Global Stone Corporation, a North American public
company in the lime and limestone industry, principally operating in
the United States. From 1990 until 1992, he was a director of Federated
Aggregates, PLC, the vehicle used to form Global Stone. Prior to 1990,
Mr. Wilson was managing director of ARC Pipes, Ltd., a division of
Hanson, PLC.
EXECUTIVE OFFICERS
WHO ARE NOT ALSO DIRECTORS
JOHNNEY G. BOWERS
Mr. Bowers, age 52, joined the Company in June 1997 and has served as
Vice President - Manufacturing since that date. He has over 25 years of
engineering and operating experience. From May 1991 until he joined the
Company, Mr. Bowers served as director of engineering with Chemical
Lime Company. Prior to May 1991, Mr. Bowers held various senior process
engineering and project manager positions in the mining and processing
industry.
BILLY R. HUGHES
Mr. Hughes, age 60, joined the Company in June 1973 and has served as
Senior Vice President - Sales & Marketing since December 1998. He has
more than 25 years of experience in the lime and limestone industry.
Mr. Hughes began his employment with the Company as a salesperson for
the Arkansas Lime plant. In 1978, he was promoted to sales manager for
Arkansas Lime. In 1983, Mr. Hughes was appointed Vice President - Sales
and Marketing for both Arkansas Lime and Texas Lime. Mr. Hughes is
active in the National Lime Association, having served on its board of
directors and executive committee for several years.
RICHARD D. MURRAY
Mr. Murray, age 58, joined the Company in May 1995 and has served as
Vice President - Engineering since that date. He has 34 years of
experience in various management and engineering positions. Prior to
joining the Company, he was Vice President - Operations for Lone Star
Industries, Inc., a leading cement manufacturer.
LARRY T. OHMS
Mr. Ohms, age 38, joined the Company in July 1994 as Corporate
Controller. In December 1998, he was named Corporate Controller and
Treasurer. From 1990 until July 1994, Mr. Ohms served as Vice President
- Finance for My Alarm, Inc., a manufacturer and distributor of two-way
voice home security systems. Prior to 1990, Mr. Ohms held positions as
plant controller for publicly traded companies, including Flowers
Baking Company and Weyerhauser Company.
-4-
<PAGE> 9
SHAREHOLDINGS OF COMPANY DIRECTORS AND EXECUTIVE OFFICERS
The table below sets forth the number of shares of Common Stock
beneficially owned, as of March 22, 1999, by all directors and named executive
officers of the Company individually and all directors and executive officers as
a group:
<TABLE>
<CAPTION>
Common Stock Beneficially Owned (1)
-----------------------------------
Name Number of Shares Percent of Class
---- ------------------- -----------------
<S> <C> <C>
John J. Brown - -
Timothy W. Byrne 77,869 (3)(4) 2.00%
Richard W. Cardin 2,000 (6)
Antoine M. Doumet - (5) -
Wallace G. Irmscher 8,000 (6)
Edward A. Odishaw 10,900 (6)
Herbert G.A. Wilson 2,500 (2) (6)
Johnney G. Bowers 12,188 (3)(4) (6)
Billy R. Hughes 49,052 (3)(4) 1.20%
Richard D. Murray 23,273 (3)(4) (6)
All Directors
and Executive Officers
as a Group (11 persons) 185,782 (2)(3)(4) 4.70%
</TABLE>
- ------------------
(1) All shares are directly held with sole voting and dispositive power unless
otherwise indicated.
(2) The named individual serves as one of three members of the Company's
Employee Stock Ownership Plan ("ESOP") Administration Committee. The number
of shares shown as beneficially owned by the named individual excludes
shares that may be deemed to be beneficially owned by the ESOP
Administration Committee, as to which the named individual disclaims
beneficial ownership.
(3) Includes 6,845, 188, 7,052, 273, and 482 shares allocated to Messrs. Byrne,
Bowers, Hughes, Murray, and Ohms, respectively, under the ESOP, as to which
they have sole voting power but no dispositive power.
(4) Includes the following shares subject to stock options exercisable within
the next 60 days granted under the 1992 Plan: Mr. Byrne, 40,000; Mr.
Bowers, 12,000; Mr. Hughes, 42,000; Mr. Murray, 23,000; and Mr. Ohms,
3,000.
(5) The named individual is the brother of Mr. George M. Doumet, who indirectly
owns all of outstanding shares of Inberdon.
(6) Less than 1%.
-5-
<PAGE> 10
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the cash and non-cash compensation for
each of the last three fiscal years earned by the former Chief Executive
Officer, Mr. Byrne. The present Chief Executive Officer, Mr. Wilson, was not
employed by the Company in 1998. Three other executive officers of the Company
earned salaries and bonuses in 1998 that exceeded $100,000:
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION ALL OTHER COMPENSATION
------------------- ------------ ----------------------
SECURITIES
UNDERLYING
NAME AND OPTIONS (#) 401(k) ESOP
PRINCIPAL POSITION YEAR SALARY BONUS (3) (4) (5)
------------------ ---- ------ ----- ----------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
Timothy W. Byrne (6) 1998 $202,680 $25,000 (2) 15,000 $4,054 $2,226
Former President and 1997 $169,130 $20,000 (1) - $3,373 $2,094
Chief Executive Officer 1996 $168,833 $12,000 (2) - $3,857 $1,572
Johnney G. Bowers (7) 1998 $139,920 $ 8,000 (2) 12,000 $2,798 $1,363
1997 - - - - -
1996 - - - - -
Billy R. Hughes (7) 1998 $149,942 $10,000 (2) 12,000 $2,999 $2,095
1997 - - - - -
1996 - - - - -
Richard D. Murray (7) 1998 $ 96,918 $ 5,000 (2) 3,000 $1,938 $ 972
1997 - - - - -
1996 - - - - -
</TABLE>
- -------------------------
(1) Bonuses, based on executive officer's achievement of defined goals, were
accrued and paid in the year shown.
(2) Bonuses, based on the Company's performance, were accrued in the year shown
and paid in the following year.
(3) Options granted pursuant to the 1992 Plan.
(4) Company contribution to defined contribution plan.
(5) ESOP share allocation, valued at year-end market price of the Common Stock.
(6) Mr. Byrne resigned as President and Chief Executive Officer effective
January 1, 1999.
(7) Named individuals were elected as Executive Officers during 1998.
AGGREGATED OPTION EXERCISES IN LAST YEAR AND YEAR-END OPTION VALUES
The following table sets forth information with respect to stock
options exercised by the named executive officers during 1998 and the number and
value of unexercised options held by such executive officers at year end:
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Shares Acquired Value Underlying Unexercised In-the-Money Options
Name on Exercise (#) Realized ($) Options at Year-End (#) at Year-End ($)
- ---------------- --------------- ------------ ----------------------- -----------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Timothy W. Byrne 15,000 47,813 25,000 15,000 - 3,750
Johnney G. Bowers - - - 12,000 - 3,000
Billy R. Hughes - - 30,000 12,000 25,000 3,000
Richard D. Murray - - 20,000 3,000 - 750
</TABLE>
-6-
<PAGE> 11
EXECUTIVE EMPLOYMENT AND TERMINATION AGREEMENTS
The Company has employment agreements with Messrs. Wilson, Bowers, and
Hughes. Such employment agreements are designed to ensure that the Company will
be able to attract, motivate, and retain highly qualified talent, which is
critical to both the short- and long-term success of the Company.
The agreements provide for a base salary to be reviewed annually. In
addition to the base salary, the agreements provide for a bonus (to be
determined by the Compensation Committee of the Board of Directors), use of a
Company car, reimbursement of business expenses, and participation in the
Company's 401(k) plan and ESOP. In case of termination of employment, Mr. Wilson
would receive a severance payment equal to one-year's compensation if the
Company elects to terminate Mr. Wilson without cause, and a severance payment of
up to two-years' compensation in the event of a change of control. In the case
of Mr. Bowers, the severance payment would be six months' compensation. Mr.
Hughes does not have a severance arrangement, but is generally entitled to
one-year's notice before termination. Mr. Wilson's and Mr. Hughes' agreements
contain certain post-termination covenants not to compete. Mr. Wilson's
agreement is for a stated five-year period. Mr. Bower's and Mr. Hughes'
agreements have no expiration dates. Mr. Wilson's agreement also provides that
the Company will use its best efforts to ensure that Mr. Wilson is elected as a
director of the Company for as long as he serves as Chief Executive Officer.
Prior to his resignation as President, Chief Executive Officer, and
Chief Financial Officer of the Company effective January 1, 1999, Mr. Byrne had
a similar employment agreement with the Company. In case the Company would have
terminated Mr. Byrne's employment, including upon a change in control, he would
have received a severance payment equal to eighteen months' compensation. Mr.
Byrne's resignation did not result in his entitlement to any severance payments.
Mr. Byrne's agreement contains certain post-termination covenants not to
compete. Since his resignation as an executive officer of the Company, Mr. Byrne
has continued as an employee of the Company at the same daily salary rate and
benefits that he was receiving at the time of his resignation.
COMPENSATION OF DIRECTORS AND OTHER MATTERS
Directors who are not employees of the Company, other than the Chairman
of the Board of Directors, are paid an annual retainer of $11,000 plus $600 per
day on Company business. The Chairman of the Board is paid an annual retainer of
$40,000 plus $800 per day on Company business.
The Company entered into a consulting agreement with Mr. Wallace G.
Irmscher for $2,000 per month, commencing April 1996. Pursuant to the agreement,
Mr. Irmscher assisted the Company in pursuing acquisitions and expansion
opportunities. The agreement ended in April 1998.
-7-
<PAGE> 12
REPORT OF THE COMPENSATION COMMITTEE
TO: The Shareholders of United States Lime & Minerals, Inc.
As members of the Compensation Committee of the Board of Directors (the
"Committee"), we have the responsibility for administering the executive
compensation program of the Company. The Compensation Committee reviews and
makes recommendations to the full Board of Directors regarding the base salaries
and annual incentive compensation for executive officers, and administers the
Company's 1992 Stock Option Plan (the "1992 Plan"). The Compensation Committee
is composed of Messrs. Odishaw, Doumet, and Irmscher.
COMPENSATION POLICIES
The principal executive compensation policy of the Company, which is
endorsed by the Committee, is to provide a compensation program that will
attract, motivate, and retain persons of high quality and will support a
long-standing internal culture of loyalty and dedication to the interests of the
Company and its shareholders. In administering the executive compensation
program, the Committee is mindful of the following principles and guidelines
which are supported by the full Board:
Base salaries for executive officers should be competitive. A
sufficient portion of annual compensation should be at risk in order to align
the interests of executives with those of the shareholders of the Company. This
variable part of annual compensation should reflect both individual and
corporate performance. As a person's level of responsibility increases, a
greater portion of total compensation should be at risk, and the mix of total
compensation should be weighted more heavily in favor of stock-based
compensation. Stock options provide executives long-term incentive and help
align the interests of executives and shareholders in the enhancement of
shareholder value.
As discussed elsewhere in this Proxy Statement, the Company has entered
into employment agreements with Messrs. Wilson, Bowers, and Hughes. These
agreements provide for an annual base salary, bonus, the use of a Company car,
reimbursement of business expenses, participation in the 401(k) plan and ESOP,
and severance arrangements. The Committee has determined that such agreements
are appropriate means to achieve the Company's overall compensation policies.
1998 COMPENSATION
The Company's executive compensation packages have three separate
elements consisting of base salary, annual incentive compensation, and long-term
incentive compensation. The compensation packages of Mr. Byrne, Mr. Wilson, and
the other executive officers are designed to be competitive within the industry
and to provide incentives for both short- and long-term performance in line with
the financial interests of the shareholders.
BASE SALARIES. The Committee determined levels of the executive officers' base
salaries so as to be competitive with amounts paid to executives performing
similar functions in comparable size non-durable manufacturing companies. The
amount of each executive's annual increase in base salary, if any, will be based
on a number of largely subjective factors, including the personal performance of
such executive officer, the performance of the Company, cost-of-living
increases, and such other factors as the Committee deems appropriate, including
the individual's overall mix between fixed and variable compensation and between
cash and stock-based compensation. In January 1998, Mr. Byrne received a salary
increase of 11.1% in connection with his promotion in December 1997 from Chief
Financial Officer to President and Chief Executive Officer. Salary increases for
the other executive officers averaged 6.5%
-8-
<PAGE> 13
ANNUAL INCENTIVE COMPENSATION. Each of the Company's executive officers is
eligible to receive annual cash bonus awards based on determinations made by the
Committee. The Company has not adopted a formal annual bonus plan. Rather, the
determination to pay a cash bonus, if any, is based on the Committee's
subjective judgment with respect to the past performance of the individual, or
on the individual's attainment of objective performance goals set by the
Committee. In either such case, the bonus may be based on the specific
accomplishments of the individual, or on the overall success of the Company. In
November 1998, the Committee determined to award a special bonus to Mr. Byrne of
$25,000 based on the achievement of certain performance goals, principally the
modernization and expansion of Texas Lime. In the view of the Committee, such
bonus award was an appropriate means to reward Mr. Byrne for his performance.
Bonuses of $8,000, $10,000, and $5,000 were awarded for the Texas project and
the Company's 1998 operating results to Messrs. Bowers, Hughes, and Murray,
respectively.
LONG-TERM INCENTIVE COMPENSATION. The Committee also administers the 1992 Plan
to provide long-term incentives to its key employees, including executive
officers. Grants are based on each individual's position within the Company,
level of responsibility, past performance, and expectation of future
performance. In 1998, options for 15,000 shares were granted to Mr. Byrne, and
options for an aggregate of 27,000 additional shares were granted to the other
executive officers. At the end of 1998, Messrs. Byrne, Bowers, Hughes, Murray,
and Ohms held options to purchase 40,000, 12,000, 42,000, 23,000, and 3,000
shares, respectively. The Committee has recommended, and the Board of Directors
has approved and is submitting to the shareholders for their approval, an
amendment to the 1992 Plan increasing from 380,000 to 480,000 the aggregate
number of shares for which options may be granted under the Plan. This increase
is necessary to allow the Committee to continue to grant options to executive
officers under the 1992 Plan in accordance with the principles and guidelines
set forth above. See "Proposal To Amend and Restate the Company's 1992 Stock
Option Plan."
Internal Revenue Code of 1986 ("Code") Section 162(m) generally limits
the corporate income tax deduction for compensation paid to certain named
executive officers to $1 million per year, except for certain qualified and
performance-based compensation. The Committee had not seen any need to adopt a
policy with regard to qualifying bonus awards and future stock option grants for
tax deductibility under Code Section 162(m), since current Company cash
compensation is well below the level at which this tax limitation would apply,
and most of the Company's stock options granted to date were not subject to the
limitation. In connection with the proposed amendment to the 1992 Plan to
increase the aggregate number of shares for which options may be granted under
the 1992 Plan, the Committee has recommended, and the Board of Directors has
approved and is submitting to the shareholders for their approval, a further
amendment to the 1992 Plan imposing a 70,000-share per-person limit on options
granted under the Plan, along with making certain other minor changes to the
Plan, in order to conform the Plan to the requirements of Code Section 162(m).
Future options granted under the 1992 Plan, as proposed to be amended and
restated, are intended to constitute performance-based compensation not subject
to the Code Section 162(m) limitation.
This report shall not be deemed to be incorporated by reference by any
general statement incorporating by reference the Proxy Statement into any filing
under the Securities Act of 1933 or the Securities Exchange Act of 1934, except
to the extent that the Company specifically incorporates this information by
reference. This report shall not otherwise be deemed to be filed under such
Acts.
COMPENSATION COMMITTEE
Edward A. Odishaw
Antoine M. Doumet
Wallace G. Irmscher
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<PAGE> 14
PERFORMANCE GRAPH
The graph below compares the cumulative five-year total shareholders'
return on the Company's Common Stock with the cumulative total return on the
Nasdaq National Market Index and a group of peer issuers selected on a
line-of-business basis, consisting of Global Industrial Technologies and Oglebay
Norton Company. The graph assumes that the value of the investment in the
Company's Common Stock and each index was $100 on December 31, 1993, and that
all dividends have been reinvested.
COMPARISON OF CUMULATIVE 5-YEAR TOTAL SHAREHOLDERS' RETURN
AMONG UNITED STATES LIME & MINERALS, INC.,
NASDAQ MARKET INDEX AND PEER GROUP INDEX
[GRAPH]
ASSUMES $100 INVESTED ON DECEMBER 31, 1993
ASSUMES DIVIDENDS REINVESTED
FISCAL YEAR ENDING DECEMBER 31, 1998
<TABLE>
<CAPTION>
===========================================================================================================================
12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
COMPANY $100 $120.00 $176.87 $178.67 $152.58 $151.99
- ---------------------------------------------------------------------------------------------------------------------------
NASDAQ NATIONAL MARKET $100 $104.99 $136.18 $169.23 $207.00 $291.96
- ---------------------------------------------------------------------------------------------------------------------------
PEER GROUP $100 $ 97.80 $128.52 $151.48 $146.24 $ 91.65
===========================================================================================================================
</TABLE>
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<PAGE> 15
PROPOSAL TO AMEND AND RESTATE
THE COMPANY'S 1992 STOCK OPTION PLAN
INTRODUCTION
On April 16, 1992, the Board of Directors adopted the Company's 1992
Stock Option Plan (the "1992 Plan"), subject to approval by the Company's
shareholders at the 1992 Annual Meeting of Shareholders. The shareholders of the
Company approved the 1992 Plan on June 9, 1992. The purpose of the 1992 Plan is
to promote the interests of the Company and its shareholders by attracting,
retaining, and stimulating the performance of selected employees by giving such
employees the opportunity to acquire a proprietary interest in the Company and
an increased personal interest in its continued success and progress.
As originally adopted, the 1992 Plan reserved an aggregate of 380,000
shares of Common Stock for the grant of options under the Plan, with shares
subject to outstanding options that expired or terminated for any reason again
being available for the grant of options under the Plan. To date, options to
purchase an aggregate of 380,000 shares have been granted under the 1992 Plan,
including shares that again became available for option grant as a result of the
expiration or termination of outstanding options. At the present time, only
11,000 shares remain available for option grants under the 1992 Plan. The 1992
Plan, by its terms, provides that no options may be granted under the Plan after
April 15, 2002, ten years after the Board's adoption of the Plan.
The Compensation Committee has recommended, and the Board of Directors
has approved and is submitting to the shareholders for their approval, an
amendment to the 1992 Plan increasing from 380,000 to 480,000 the aggregate
number of shares of Common Stock for which options may be granted under the
Plan. The Compensation Committee and the Board believe that the 1992 Plan has
been effective in achieving its intended purposes. They also believe that the
11,000 shares currently remaining for option grants under the 1992 Plan, even
assuming that shares again become available for option grant as a result of the
expiration or termination of outstanding options, does not provide a meaningful
number of shares to carry the 1992 Plan through the next three years. Moreover,
in the employment agreement that the Company entered into with Herbert G.A.
Wilson, the Company's new President and Chief Executive Officer, in December
1998, the Company agreed to use its best efforts to increase the number of
shares for which options may be granted under the 1992 Plan to cause the
Compensation Committee to grant options to Mr. Wilson.
At this time, the Company is proposing to amend the 1992 Plan to
increase the aggregate number of shares of Common Stock for which options may be
granted under the Plan by 100,000, to 480,000. Future grants of options under
the 1992 Plan will be solely in the discretion of the Compensation Committee.
While the Compensation Committee expects during the current year to grant Mr.
Wilson an option under the 1992 Plan, the Compensation Committee has not yet
determined the size or timing of such grant, nor are other future grants of
options under the 1992 Plan determinable at this time.
In addition, the Compensation Committee has recommended, and the Board
of Directors has approved and is submitting to the shareholders for their
approval, a further amendment to the 1992 Plan imposing a 70,000-share
per-person limit on options granted under the Plan. This per-person limit is
intended to conform the 1992 Plan to the requirements of Section 162(m) of the
Internal Revenue Code of 1986, as amended ("Code"), and will apply after its
approval by the shareholders so that, after such date, no person may be granted
options under the 1992 Plan if, after such grant, such person will have received
options under the Plan that aggregate more than the 70,000-share limit. In the
past, the Company has granted options under the 1992 Plan to selected executives
that have aggregated more than 70,000 shares, but under the proposed amendment
the Company would be precluded from doing so in the future. Thus, the
70,000-share per-person limit would apply to any future grants to Mr. Wilson and
others under the 1992 Plan.
The Company is also seeking to have the shareholders approve a
restatement of the 1992 Plan, as amended to increase the aggregate number of
shares and to impose the per-person limit as described above,
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<PAGE> 16
and to include certain minor conforming changes as noted below. The purpose of
the restatement is to ensure that the shareholders have approved the entire Plan
as amended for purposes of Code Section 162(m).
The Company is not, at this time, seeking shareholder approval to
extend the 1992 Plan, as amended and restated, beyond the April 15, 2002
scheduled termination of the Plan. The Compensation Committee and the Board
believe that the additional 100,000 shares being added to the 1992 Plan at this
time should carry the Company through April 15, 2002, but there can be no
assurance that that will be the case. The Company expects that, prior to the
April 15, 2002 termination of the 1992 Plan, the Company will prepare and submit
to the shareholders for their approval further amendments to the 1992 Plan, or
an entirely new long-term incentive plan, to enable the Company to continue to
provide equity-based incentives to its employees after the expiration of the
1992 Plan.
SUMMARY OF THE PLAN AS PROPOSED TO BE AMENDED AND RESTATED
The principal provisions of the 1992 Plan, as proposed to be amended
and restated, are summarized below. The summary is qualified in its entirety by
reference to the full text of the 1992 Plan. Shareholders may obtain a copy of
the full text of the 1992 Plan, as proposed to be amended and restated, by
contacting the Company's President and Chief Executive Officer, or from the
Company's Internet Web Site at www.uslm.com.
NUMBER OF SHARES, GRANT OF OPTIONS, AND OPTION EXERCISE PRICE. Under
the 1992 Plan, which will expire on April 15, 2002, unless terminated sooner by
the Board, a maximum of 480,000 shares of Common Stock may be subject to grants
of options to officers and other employees of the Company and its affiliates.
Options may be granted until the maximum number of shares has been exhausted or
the Plan has been terminated. Options granted under the Plan may be either
Incentive Stock Options (which satisfy the requirements of Code Section 422(b))
or nonqualified options (which do not satisfy such requirements). Shares of
Common Stock covered by an option that expires or terminates prior to exercise
are again available for grant of options. The option exercise price may not be
less than 100% of the fair market value of the Common Stock on the date of
grant, except that the purchase price per share of Common Stock under any
Incentive Stock Option granted to an employee who, at the time such Incentive
Stock Option is granted, owns stock possessing more than 10% of the voting power
of the stock of the Company or any of its affiliates must be at least 110% of
the fair market value of the Common Stock on the date of grant. The last
reported sale price of the Common Stock on the Nasdaq National Market on March
22, 1999 was $7.25 per share.
ADMINISTRATION OF THE PLAN. The Plan is currently administered by the
Compensation Committee. Under the 1992 Plan, as proposed to be amended and
restated, any committee that administers the Plan (the "Committee") must be
appointed by the Board of Directors and must consist of two or more directors of
the Company, all of whom must be "Non-Employee Directors" as defined in
Securities and Exchange Commission ("SEC") Rule 16b-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and "outside directors"
within the meaning of Code Section 162(m) (as opposed to "disinterested persons"
under the 1992 Plan as originally adopted). The Committee will determine the
grants of options, the terms and provisions of the respective agreements
covering such grants, and all other decisions concerning the 1992 Plan. Members
of the Committee are not eligible to receive options under the 1992 Plan. The
total number of employees eligible to participate in the 1992 Plan is currently
estimated at 50.
OPTION PERIOD AND TERMS OF EXERCISE OF OPTIONS. Except as otherwise
provided in the 1992 Plan, options will be exercisable during such period, up to
ten years after the date of grant, commencing on or after the expiration of one
year from the date of the grant of such option, as the Committee shall
determine. The Committee may, however, accelerate the time at which an option is
exercisable without regard to its terms. Any Incentive Stock Option granted to
an employee who, at the time such Incentive Stock Option is granted, owns stock
possessing more than 10% of the voting power of the stock of the Company or of
any of its affiliates, shall not be exercisable after the expiration of five
years from the date of grant. Generally, all rights to exercise an option will
terminate within three months after the date the optionee ceases to be an
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<PAGE> 17
employee of the Company or of an affiliate for any reason other than death or
disability. In the event of an optionee's death or disability, the option will
terminate within 12 months. In no event may an option be exercised after the
expiration of the option period. If the employment of the optionee is terminated
on account of fraud, dishonesty, or other acts detrimental to the interests of
the Company or one or more of its subsidiaries, the option shall thereafter be
null and void for all purposes.
TRANSFERABILITY OF OPTIONS AND PAYMENT OF PURCHASE PRICE. Options are
not transferable except by will or the laws of descent and distribution and,
during the lifetime of the optionee, may be exercised only by the optionee or
his guardian or legal representative. Upon exercise of an option, the purchase
price shall be paid in full in cash or, if and to the extent provided for under
the option agreement for such option, in cash and/or by delivery of shares of
Common Stock, including actual or deemed multiple exchanges of shares. Any cash
proceeds of such exercise shall constitute general funds of the Company. Upon
exercise of an option, the optionee will be required to pay to the Company the
amount of any federal, state, or local taxes required by law to be withheld in
connection with such exercise.
ADJUSTMENTS UPON CHANGES IN COMMON STOCK. The 1992 Plan contains
adjustment provisions applicable upon the occurrence of certain events and in
accordance with applicable law. In the event the Company effects a split of the
Common Stock, pays a dividend in shares of Common Stock, or combines the
outstanding shares of Common Stock into a smaller number of shares, the
Committee shall adjust the maximum number of shares as to which options may be
granted under the 1992 Plan and, as the Plan is proposed to be amended and
restated, the per-person limit for such grants proportionately, and the purchase
price of and the number of shares covered by the unexercised portion of any
outstanding options shall be decreased or increased proportionately so that the
aggregate purchase price for all of the then-optioned shares shall remain the
same as immediately prior to such split, dividend, or combination. In the event
of a reclassification of the Common Stock not covered by the foregoing, or in
the event of a liquidation or reorganization (including a merger, consolidation,
spinoff, or sale of assets) of the Company or an affiliate, the Committee (as
opposed to the "Board" under the 1992 Plan as originally adopted) shall make
such adjustments, if any, as it may deem appropriate in the number, purchase
price, and kind of shares covered by the unexercised portions of options
theretofore granted under the Plan.
AMENDMENT AND TERMINATION OF THE 1992 PLAN. The Board may at any time
amend, suspend, or terminate the 1992 Plan, except that it may not, without the
approval of the shareholders, (i) abolish the Committee, change the
qualifications of its members, or withdraw the administration of the Plan from
the Committee's supervision, (ii) increase the total number of shares of Common
Stock which may be granted under the Plan (other than as provided in the Plan in
the event of an adjustment upon changes in the Common Stock as described above),
(iii) extend the term of the Plan or the maximum exercise period provided in the
Plan, (iv) decrease the minimum purchase price provided in the Plan (other than
as provided in the Plan in the event of an adjustment upon changes in the Common
Stock as described above), or (v) materially modify the requirements as to
eligibility for participation in the Plan. No termination or amendment of the
Plan shall adversely affect the rights of an optionee under a previously granted
option, except with the consent of such optionee.
MODIFICATION OF OPTIONS. Subject to the terms and conditions of and
within the limitations of the 1992 Plan, the Committee may modify, extend, or
renew outstanding options granted under the Plan (including the conversion of an
Incentive Stock Option into a nonqualified option); provided, however, that no
such action shall, without the consent of the optionee, alter or impair any
rights or obligations under any option theretofore granted to such optionee
(except as may be necessary, with respect to Incentive Stock Options, to satisfy
the requirements of Code Section 422(b)).
APPLICABLE LAW. The granting of options and the issuance of Common
Stock upon the exercise of an option shall be subject to all applicable laws,
rules, and regulations and to such approval by governmental agencies as may be
required.
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES. No income will be
recognized by an optionee for federal income tax purposes upon the grant or
exercise of an Incentive Stock Option. The excess of the fair market value of
shares received upon the exercise of an Incentive Stock Option over the option
price for such shares is an item of adjustment for the optionee for purposes of
the alternative minimum tax. If the
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<PAGE> 18
optionee holds the shares received upon the exercise of an Incentive Stock
Option for at least one year after transfer of the shares to the optionee or two
years after the grant of the option, whichever is later, the optionee will
recognize capital gain or loss upon sale of the shares received upon such
exercise equal to the difference between the amount realized on such sale and
the exercise price. Generally, if the shares are not held for that period, the
optionee will recognize ordinary income upon disposition in an amount equal to
the excess of the fair market value of the shares on the date of exercise over
the exercise price for such shares or, if less, the gain on disposition. Any
additional gain realized by the optionee upon such disposition will be a capital
gain.
The Company is not entitled to an income tax deduction upon the grant
or exercise of an Incentive Stock Option. If an optionee disposes of the shares
of stock received pursuant to the exercise of an Incentive Stock Option prior to
the expiration of one year following transfer of the shares to the optionee or
two years after grant of the option, however, the Company may deduct an amount
equal to the ordinary income recognized by the optionee upon disposition of the
shares at the time such income is recognized by the optionee.
If an optionee uses already-owned shares of Common Stock to pay the
exercise price for shares under an Incentive Stock Option, the resulting tax
consequences will depend upon whether such already-owned shares of Common Stock
are "statutory option stock," and, if so, whether such statutory option stock
has been held by the optionee for the applicable holding period referred to in
Code Section 424(c)(3)(A). In general, "statutory option stock" (as defined in
Code Section 424(c)(3)(B)) is any stock acquired through the exercise of an
Incentive Stock Option or an option granted pursuant to an employee stock
purchase plan, but not through the exercise of a nonqualified option. If such
stock is statutory option stock with respect to which the applicable holding
period has been satisfied, no income will be recognized by the optionee upon the
transfer of such stock in payment of the exercise price of an Incentive Stock
Option. If such stock is not statutory option stock, no income will be
recognized by the optionee upon the transfer of such stock unless such stock is
not substantially vested within the meaning of the regulations under Code
Section 83 (in which event it appears that the optionee may recognize ordinary
income upon the transfer equal to the amount by which the fair market value of
the transferred shares exceeds their basis). If the stock used to pay the
exercise price of an Incentive Stock Option is statutory option stock with
respect to which the applicable holding period has not been satisfied, the
transfer of such stock will be a disqualifying disposition of such statutory
option stock which will result in the recognition of ordinary income by the
optionee with respect to such stock.
No income will be recognized by an optionee for federal income tax
purposes upon the grant of a nonqualified option. Upon exercise of a
nonqualified option, the optionee will recognize ordinary income in an amount
equal to the excess of the fair market value of the shares on the date of
exercise over the option price of such shares. If an optionee sells shares
acquired upon exercise of a nonqualified option, the optionee will recognize
capital gain or loss.
Ordinary income recognized upon the exercise of nonqualified options
will be considered compensation subject to withholding at the time such income
is recognized. The Company will be entitled to a tax deduction equal to the
amount of ordinary income recognized by the optionee at the time of such
recognition by the optionee.
If an optionee uses already-owned shares of Common Stock to pay the
exercise price for shares under a nonqualified option, the number of shares
received pursuant to the option which is equal to the number of shares delivered
in payment of the exercise price will be considered received in a nontaxable
exchange, and the fair market value of the remaining shares received by the
optionee upon such exercise will be taxable to the optionee as ordinary income.
However, if such already-owned shares of Common Stock are statutory option stock
(as defined in Code Section 424(c)(3)(B)) with respect to which the applicable
holding period has not been satisfied, it is not presently clear whether such
exercise will be considered a disqualifying disposition of the statutory option
stock.
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<PAGE> 19
RECOMMENDATION AND REQUIRED AFFIRMATIVE VOTE
The affirmative vote of the holders of record of a majority of the
outstanding shares of Common Stock present in person or by Proxy and entitled to
vote thereon at the Annual Meeting is required in order to approve the amendment
and restatement of the 1992 Plan. Broker non-votes will have no effect on the
vote on this matter; abstentions will have the same effect as a vote against the
matter. The Board unanimously recommends that all shareholders vote FOR the
approval of the amendment and restatement of the 1992 Plan.
INDEPENDENT AUDITORS
The firm of Ernst & Young LLP (a limited liability partnership) audited
the financial statements of the Company for the fiscal year ended December 31,
1998. Representatives of Ernst & Young LLP are expected to be present at the
Annual Meeting and to be available to respond to appropriate questions. Such
representatives will be given the opportunity to make a statement at the Meeting
if they so desire.
The Audit Committee of the Board of Directors is currently composed of
Messrs. Brown, Cardin, and Irmscher. The Audit Committee recommends the
appointment of the independent auditors to audit the Company's financial
statements, meets with the independent auditors and reviews the scope and
results of their audit, and reviews the fees charged by the independent
auditors.
Ratification of independent auditors by the shareholders is not
required by Texas law or the Restated Articles of Incorporation or Bylaws of the
Company.
OTHER MATTERS
The Board does not intend to present any other matters at the Annual
Meeting and knows of no other matters that will be presented. However, if any
other matters properly come before the Annual Meeting, the persons named in the
enclosed Proxy Card intend to vote thereon in accordance with their best
judgment.
SHAREHOLDER PROPOSALS
Shareholder proposals submitted to the Company under SEC Rule 14a-8
under the Exchange Act for inclusion in the Company's Proxy Statement for its
2000 Annual Meeting of Shareholders must be received by the Company at its
office in Dallas, Texas, addressed to Herbert G.A. Wilson, President and Chief
Executive Officer of the Company, not later than November 27, 1999. Such Rule
14a-8 shareholder proposals must comply with SEC rules.
The Company must receive notice of other matters, including non-Rule
14a-8 shareholder proposals, that shareholders may wish to raise at the 2000
Annual Meeting of Shareholders by February 9, 2000. If the Company does not
receive timely notice of such other matters, the Proxy holders for such meeting
will retain general discretionary authority to vote on such matters under SEC
rules. Such notices should be addressed to Herbert G.A. Wilson, President and
Chief Executive Officer of the Company.
The costs of solicitation of Proxies will be borne by the Company.
Solicitation may be made by mail, personal interview, telephone, and/or
telegraph by officers and regular employees of the Company who will receive no
additional compensation therefor. The Company may specifically engage a firm to
aid in the solicitation of Proxies, for which services the Company would
anticipate paying a standard reasonable fee plus out-of-pocket expenses. The
Company will bear the reasonable expenses incurred by banks, brokerage firms,
and other custodians, nominees, and fiduciaries in forwarding proxy materials to
beneficial owners.
UNITED STATES LIME & MINERALS, INC.
HERBERT G.A. WILSON
Dallas, Texas President and Chief Executive Officer
March 26, 1999
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<PAGE> 20
PROXY
UNITED STATES LIME & MINERALS, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Edward A. Odishaw and Herbert G.A. Wilson,
and either of them, Proxies, with power of substitution in each, and hereby
authorizes them to represent and to vote, as designated below, all shares of
Common Stock of UNITED STATES LIME & MINERALS, INC. standing in the name of the
undersigned on March 22, 1999, at the Annual Meeting of Shareholders to be held
on April 30, 1999, at the Sheraton Park Central Hotel, 7750 LBJ Freeway,
Dallas, Texas 75251, and at any adjournment thereof and especially to vote on
the items of business specified on the reverse side of this card, as more fully
described in the Notice of the Meeting dated March 26, 1999, and the Proxy
Statement accompanying the same, the receipt of which is hereby acknowledged.
YOU ARE ENCOURAGED TO RECORD YOUR VOTE ON THE FOLLOWING ITEMS OF BUSINESS
TO BE BROUGHT BEFORE THE ANNUAL MEETING, BUT YOU NEED NOT MARK ANY OVAL IF YOU
WISH TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. The
Proxies cannot vote your shares unless you sign, date, and return this card.
Remember, you can revoke this Proxy and vote in person by attending the Annual
Meeting.
(Continued and to be signed on reverse side.)
<PAGE> 21
UNITED STATES LIME & MINERALS, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [X]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES IN THE ELECTION OF
DIRECTORS AND FOR PROPOSAL 2.
FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
1. ELECTION OF DIRECTORS - [ ] [ ] [ ]
Nominees: J.J. Brown, T.W. Byrne, R.W. Cardin,
A.M. Doumet, W.G. Irmscher,
E.A. Odishaw, H.G.A. Wilson
- ------------------------------------------------
(Except nominee(s) written above.)
2. Approval of the 1992 Stock Option Plan, as
amended and restated.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
In their discretion, the Proxies are authorized to vote upon such other
business as may properly be brought before the Annual Meeting or any
adjournment thereof.
THE UNDERSIGNED ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS AND OF THE PROXY STATEMENT.
Dated: , 1999
----------------------------------
Signature(s)
----------------------------------
- ----------------------------------------------
Please sign exactly as name appears. Joint
owners should each sign personally. Where
applicable, indicate your official position
or representative capacity.
*FOLD AND DETACH HERE*
YOUR VOTE IS IMPORTANT!
PLEASE MARK, SIGN, AND DATE THIS PROXY AND RETURN IT PROMPTLY
IN THE ACCOMPANYING ENVELOPE.
<PAGE> 22
UNITED STATES LIME & MINERALS, INC.
1992 STOCK OPTION PLAN, AS AMENDED AND RESTATED
Section 1. Purpose. It is the purpose of the Plan to promote the
interests of the Company and its shareholders by attracting, retaining and
stimulating the performance of selected Employees by giving such Employees the
opportunity to acquire a proprietary interest in the Company and an increased
personal interest in its continued success and progress. Unless otherwise
specified in the option agreement, each Option granted under the Plan shall be
treated as an Incentive Stock Option.
Section 2. Definitions. As used herein the following terms have the
following meanings:
(a) "Affiliate" means any parent or subsidiary corporation of
the Company within the meaning of Section 424(e) and (f) of the Code.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended
from time to time.
(d) "Committee" means the Stock Option Committee described in
Section 4 hereof.
<PAGE> 23
(e) "Common Stock" means the $.10 par value Common Stock of
the Company.
(f) "Company" means United States Lime & Minerals, Inc., a
Texas corporation.
(g) "Employee" means an employee of the Company or an
Affiliate.
(h) "Fair Market Value" means, unless the Committee determines
otherwise in good faith, the closing sales price on the date in
question (or, if there was no reported sale on such date, on the last
preceding day on which any reported sale occurred) of the Common Stock
reported on the National Association of Securities Dealers Automated
Quotation System (the "Nasdaq Stock Market") or on any national stock
exchange on which the Common Stock is then traded; or, if the Common
Stock is not listed or admitted to trading on any such exchange and is
not listed as a National Market security on the Nasdaq Stock Market,
but is quoted on the Nasdaq Stock Market or any similar system then in
use, "Fair Market Value" shall mean the average of the closing high bid
and low asked quotations on such system for the Common Stock on the
date in question.
(i) "Incentive Stock Option" means an incentive stock option
within the meaning of Section 422(b) of the Code.
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<PAGE> 24
(j) "Option" means an option to purchase shares of Common
Stock granted pursuant to the provisions of the Plan.
(k) "Optionee" means an Employee who has been granted an
Option under the Plan.
(l) "Plan" means this United States Lime & Minerals, Inc. 1992
Stock Option Plan, as Amended and Restated.
Section 3. Number of Shares; Per-Person Limit. Options may be granted
by the Company from time to time under the Plan to purchase an aggregate of
480,000 shares of the authorized Common Stock. If an Option expires or
terminates for any reason without having been exercised in full, the unpurchased
shares subject to such expired or terminated Option shall again be available for
purposes of the Plan. No person may be granted Options under the Plan if, after
such grant, such person will have been granted Options under the Plan that cover
in the aggregate more than 70,000 shares of Common Stock.
Section 4. Administration of the Plan. The Plan shall be administered
by a Stock Option Committee which shall consist of two or more members of the
Board, each of whom shall be a "Non-Employee Director" within the meaning of
Rule 16b-3 under the Securities Exchange Act of 1934, as amended, and an
"outside director" within the meaning of Section 162(m) of the Code and the
regulations thereunder, or any similar or successor rule, provision or
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regulation. Each member of the Committee shall be appointed by and shall serve
at the pleasure of the Board. The Board shall have the sole continuing authority
to appoint members of the Committee both in substitution for members previously
appointed and to fill vacancies however caused. The following provisions shall
apply to the administration of the Plan by the Committee:
(a) The Committee shall designate one of its members as
Chairman and shall hold meetings at such times and places as it may
determine. Each member of the Committee shall be notified in writing of
the time and place of any meeting of the Committee at least two days
prior to such meeting, provided that such notice may be waived by a
Committee member. A majority of the members of the Committee shall
constitute a quorum, and any action taken by a majority of the members
of the Committee present at any duly called meeting at which a quorum
is present (or action unanimously approved in writing) shall constitute
action by the Committee.
(b) The Committee may appoint a Secretary (who need not be a
member of the Committee) who shall keep minutes of its meetings. The
Committee may make such rules and regulations for the conduct of its
business as it may determine.
(c) No member of the Committee shall be eligible to receive an
Option under the Plan.
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(d) The Committee shall have full authority subject to the
express provisions of the Plan to interpret the Plan, to provide,
modify and rescind rules and regulations relating to it, to determine
the terms and provisions of each Option and the form of each option
agreement evidencing an Option granted under the Plan and to make all
other determinations and perform such actions as the Committee deems
necessary or advisable to administer the Plan. In addition, the
Committee shall have fall authority, subject to the express provisions
of the Plan, to determine the Employees to whom Options shall be
granted, the time or date of grant of each such Option, the number of
shares subject thereto and the price at which such shares may be
purchased. In making such determinations, the Committee may take into
account the nature of the services rendered by the Employee, his or her
present and potential contributions to the success of the Company's
business and such other facts as the Committee in its discretion shall
deem appropriate to carry out the purposes of the Plan.
(e) No member of the Committee shall be liable for any action
taken or determination made in good faith with respect to the Plan or
any Option granted hereunder.
Section 5. Grant of Options. At any time and from time to time during
the duration of the Plan and subject to the express provisions thereof, Options
may be granted by the Committee to any Employee for such number of shares of
Common Stock as the Committee in its discretion shall deem to be in the best
interest of the Company and which will serve to further
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the purposes of the Plan. The Committee, in its discretion, may designate any
Option so granted as an option that shall not be treated as an Incentive Stock
Option.
Section 6. Option Price and Payment. The purchase price per share of
Common Stock under each Option shall be determined by the Committee in its
discretion, but in no event shall such price be less than 100% of the Fair
Market Value per share of Common Stock at the time the Option is granted;
provided, however, that the purchase price per share of Common Stock under any
Incentive Stock Option granted to an Optionee who, at the time such Incentive
Stock Option is granted, owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or any Affiliate
shall be at least 110% of the Fair Market Value per share of Common Stock at the
date of grant. Upon exercise of an Option, the purchase price shall be paid in
full in cash or, if and to the extent provided for under the option agreement
for such Option, in cash and/or by delivery of shares of Common Stock already
owned by the Optionee having an aggregate Fair Market Value (determined as of
the date of exercise) equal to the purchase price, including an actual or deemed
multiple series of exchanges of such shares. The proceeds of such sale shall
constitute general funds of the Company. Upon exercise of an option, the
Optionee will be required to pay to the Company the amount of any federal, state
or local taxes required by law to be withheld in connection with such exercise.
Section 7. Option Period and Terms of Exercise of Options. Except as
otherwise provided for herein, each Option granted under the Plan shall be
exercisable during such period commencing on or after the expiration of one year
from the date of the grant of such Option as
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the Committee shall determine; provided, however, that the otherwise unexpired
portion of any Option shall expire and become null and void no later than upon
the first to occur of (i) the expiration of ten years from the date such Option
was granted, (ii) the expiration of three months from the date of the
termination of the Optionee's employment with the Company or an Affiliate for
any reason other than death or disability, or (iii) the expiration of one year
from the date of the termination of the Optionee's employment with the Company
or an Affiliate by reason of death or disability. Anything herein to the
contrary notwithstanding, the otherwise unexpired portion of any Option granted
hereunder to an Optionee shall expire and become null and void immediately upon
such Optionee's termination of employment with the Company or an Affiliate by
reason of such Optionee's fraud, dishonesty or performance of other acts
detrimental to the Company or an Affiliate. Any Incentive Stock Option granted
to an Optionee who, at the time such Incentive Stock Option is granted, owns
stock possessing more than 10% of the total combined voting power of all classes
of stock of the Company or any Affiliate shall not be exercisable after the
expiration of five years from the date of its grant. Under the provisions of any
option agreement evidencing an Option, the Committee may limit the number of
shares purchasable thereunder in any period or periods of time during which the
Option is exercisable and may impose such other terms and conditions upon the
exercise of an Option as are not inconsistent with the terms of this Plan;
provided, however, that the Committee, in its discretion, may accelerate the
exercise date of any Option to any date following the date of grant.
Section 8. Nontransferability of Options. An Option granted under the
Plan shall be transferable by the Optionee only by will or by the laws of
descent and distribution and shall be
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exercisable during the lifetime of the Optionee only by the Optionee, or if the
Optionee is legally incompetent, by the Optionee's legal representative.
Section 9. Termination of Employment. Transfers of employment between
the Company and any of its Affiliates shall not be considered to be a
termination of employment for the purposes of this Plan. Nothing in the Plan or
in any option agreement evidencing an Option shall confer upon any Optionee any
right to continue in the employ of the Company or any Affiliate or in any way
interfere with the right of the Company or any Affiliate to terminate the
employment of the Optionee at any time, with or without cause.
Section 10. Adjustments Upon Changes in Common Stock. In the event the
Company shall effect a split of Common Stock or dividend payable in Common
Stock, or in the event the outstanding Common Stock shall be combined into a
smaller number of shares, the maximum number of shares as to which Options may
be granted under the Plan and the per-person limit on Option grants set forth in
Section 3 hereof shall be decreased or increased proportionately. In the event
that, before delivery by the Company of all of the shares of Common Stock in
respect of which an Option has been granted under the Plan, the Company shall
have effected such a split, dividend or combination, the shares still subject to
such Option shall be increased or decreased proportionately and the purchase
price per share shall be decreased or increased proportionately so that the
aggregate purchase price for all of the then-optioned shares shall remain the
same as immediately prior to such split, dividend or combination.
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In the event of a reclassification of Common Stock not covered by the
foregoing, or in the event of a liquidation or reorganization (including a
merger, consolidation, spinoff or sale of assets) of the Company or an
Affiliate, the Committee shall make such adjustments, if any, as it may deem
appropriate in the number, purchase price and kind of shares covered by the
unexercised portions of Options theretofore granted under the Plan. The
provisions of this Section shall only be applicable if, and only to the extent
that, the application thereof does not conflict with any valid governmental
statute, regulation or rule.
Section 11. Amendment and Termination of the Plan. Subject to the right
of the Board to terminate the Plan prior thereto, the Plan shall terminate at
the expiration of ten years from April 16, 1992, the date of adoption of the
Plan by the Board. No Options may be granted after the termination of the Plan.
The Board may alter or amend the Plan but may not without the approval of the
shareholders of the Company make any alteration or amendment thereof which
operates (i) to abolish the Committee, change the qualifications of its members
or withdraw the administration of the Plan from the Committee's supervision,
(ii) to increase the total number of shares of Common Stock which may be granted
under the Plan (other than as provided in Section 10 hereof), (iii) to extend
the term of the Plan or the maximum exercise period provided in Section 7
hereof, (iv) to decrease the minimum purchase price provided in Section 6 hereof
(other than as provided in Section 10 hereof) or (v) to materially modify the
requirements as to eligibility for participation in the Plan.
No termination or amendment of the Plan shall adversely affect the
rights of an Optionee
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under a previously granted Option, except with the consent of such Optionee.
Section 12. Modification of Options. Subject to the terms and
conditions of and within the limitations of the Plan, the Committee may modify,
extend or renew outstanding Options granted under the Plan (including the
conversion of an Incentive Stock Option into a nonqualified stock option), or
accept the surrender of Options outstanding hereunder (to the extent not
theretofore exercised) and authorize the granting of new Options in substitution
therefor. Notwithstanding the foregoing, no modification of an Option shall,
without the consent of the Optionee, alter or impair any rights or obligations
under any Option theretofore granted to such Optionee, except as may be
necessary, with respect to Incentive Stock Options, to satisfy the requirements
of Section 422(b) of the Code.
Section 13. Requirements of Law. The granting of Options and the
issuance of Common Stock upon the exercise of an Option shall be subject to all
applicable laws, rules and regulations and to such approval by governmental
agencies as may be required.
Section 14. Investment Letter. The Company's obligation to deliver
Common Stock with respect to an Option shall be conditioned upon the Company's
receipt from the Employee to whom such Common Stock is to be delivered of an
executed investment letter containing such representations and agreements as the
Committee may determine to be necessary or advisable in order to enable the
Company to issue and deliver such Common Stock to such Employee in compliance
with the Securities Act of 1933, as amended, and other applicable federal, state
or
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local securities laws or regulations.
Section 15. Effective Date of the Plan. The Plan shall become
effective, as of the date of its adoption by the Board, when it has been duly
approved by the holders of at least a majority of the shares of Common Stock
present or represented and entitled to vote at a meeting of the shareholders of
the Company duly held in accordance with applicable law within twelve months
after the date of adoption of the Plan by the Board. If the Plan is not so
approved, the Plan shall terminate, and any Option granted hereunder shall be
null and void.
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