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FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 27, 2000
REGISTRATION NO. 333-49118
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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UNITED STATES LIME & MINERALS, INC.
(Exact name of Registrant as specified in its charter)
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TEXAS 75-0789226
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
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13800 MONTFORT DRIVE, SUITE 330
DALLAS, TEXAS 75240
(972) 991-8400
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
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TIMOTHY W. BYRNE
PRESIDENT AND CHIEF EXECUTIVE OFFICER
UNITED STATES LIME & MINERALS, INC.
13800 MONTFORT DRIVE, SUITE 330
DALLAS, TEXAS 75240
(972) 991-8400
(Name, Address, Including Zip Code, and
Telephone Number, Including Area Code, of Agent for Service)
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Copies to:
GEORGE G. YEARSICH, ESQ.
SUSAN K. CHASNOV, ESQ.
MORGAN, LEWIS & BOCKIUS LLP
1800 M STREET, N.W.
WASHINGTON, DC 20036
(202) 467-7000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this registration statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 426(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of earlier effective
registration statement the same offering. [ ] ---------------
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] ---------------
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
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This prospectus is not an offer to sell, and it is not soliciting an offer
to buy, these securities in any state where the offer or sale is not
permitted.
UNITED STATES LIME & MINERALS, INC.
1,818,181 SHARES OF COMMON STOCK
ISSUABLE UPON EXERCISE OF SUBSCRIPTION RIGHTS
United States Lime & Minerals, Inc. is distributing non-transferable
subscription rights to purchase shares of common stock in this rights offering
to persons who owned shares of our common stock on December 26, 2000.
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PROCEEDS TO
SUBSCRIPTION EXERCISE UNITED STATES LIME &
PRICE MINERALS, INC.(1)
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Per Share................................................. $ 5.50 $ 5.50
Total..................................................... $10,000,000 $10,000,000
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(1) Before deducting expenses payable by us, estimated to be $340,190.
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THE EXERCISE OF THE SUBSCRIPTIONS RIGHTS INVOLVES SUBSTANTIAL RISK. FOR A
DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN EVALUATING AN
INVESTMENT IN THE SECURITIES OFFERED HEREBY, SEE "RISK FACTORS," BEGINNING ON
PAGE 6 OF THIS PROSPECTUS.
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You will receive 0.4566 subscription rights for each share of common stock
that you owned on December 26, 2000. You will not receive any fractional rights.
Each subscription right entitles you to purchase one share of common stock at
the purchase price of $5.50 per share. If you exercise all of your subscription
rights, you may also have the opportunity to purchase additional shares at the
same purchase price.
The subscription rights are exercisable beginning on the date of this
prospectus and continuing until 5:00 p.m., Eastern Standard Time, on February 5,
2001. If you want to participate in the rights offering, we recommend that you
submit your subscription documents to the subscription agent before that
deadline or to your broker or bank at least 10 days before that deadline. Please
see page 15 for further instructions on submitting subscriptions. All
subscriptions will be held in escrow by our subscription agent, Computershare
Trust Company of New York, through the expiration date of the rights offering.
We reserve the right to cancel the rights offering at any time before the
expiration. There is no minimum number of shares that we must sell in order to
complete the rights offering. Shareholders who do not participate in the rights
offering will continue to own the same number of shares, but will own a smaller
percentage of the total shares outstanding to the extent that other shareholders
participate in the rights offering.
The subscription rights may not be sold or transferred. The subscription
rights will not be listed for trading on Nasdaq or any stock exchange.
Inberdon Enterprises Ltd., the majority shareholder of United States Lime &
Minerals, has stated its intention to fully exercise its basic subscription
rights, thereby purchasing 926,862 shares. Additionally, Inberdon has indicated
its intention to backstop the rights offering by purchasing additional shares
that are not subscribed for by other shareholders in the rights offering, to the
extent such shares are available, until its investment has reached a total
amount between $8,000,000 and $10,000,000.
Shares of the our common stock are quoted on the Nasdaq National Market
under the symbol "USLM." The last sale price of our common stock on December 22,
2000 was $4.5625.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS
ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The securities are not being offered in any jurisdiction where the offer is
not permitted under applicable local laws.
The Date of this Prospectus is December 27, 2000
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TABLE OF CONTENTS
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PAGE
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Prospectus Summary.......................................... 1
Questions and Answers About United States Lime &
Minerals............................................... 1
Questions and Answers About the Rights Offering........... 1
Risk Factors................................................ 6
Risks Associated with the Offering of Subscription
Rights................................................. 6
Risk Factors Relating to United States Lime & Minerals.... 7
Recent Developments......................................... 9
Banking Facilities.......................................... 10
About United States Lime & Minerals......................... 10
About the Lime Industry..................................... 13
About the Rights Offering................................... 14
The Subscription Rights................................... 14
Basic Subscription Privilege.............................. 14
Over-Subscription Privilege............................... 14
Purchase Commitments...................................... 15
No Recommendations........................................ 15
Expiration Date........................................... 15
Cancellation Right........................................ 15
Non-Transferability of Subscription Rights................ 15
Exercise of Subscription Rights........................... 15
Method of Payment......................................... 16
Guaranteed Delivery Procedures............................ 16
Signature Guarantees...................................... 17
Shares Held for Others.................................... 17
Ambiguities in Exercise of Subscription Rights............ 17
Regulatory Limitation..................................... 17
Our Decision Binding...................................... 18
No Revocation............................................. 18
Shares of Common Stock Outstanding After the Rights
Offering............................................... 18
Capitalization Table...................................... 18
Fees and Expenses......................................... 19
Subscription Agent........................................ 19
Information Agent......................................... 19
If You Have Questions....................................... 20
Description of Common Stock................................. 20
Use of Proceeds............................................. 20
Determination of Offering Price............................. 20
Plan of Distribution........................................ 21
Federal Income Tax Considerations........................... 21
Taxation of Shareholders.................................. 21
Taxation of United States Lime & Minerals................. 22
State and Foreign Securities Laws........................... 22
Legal Matters............................................... 22
Experts..................................................... 22
If You Would Like More Information.......................... 22
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PROSPECTUS SUMMARY
This section answers in summary form some questions you may have about
United States Lime & Minerals, Inc. and this rights offering. The information in
this section is a summary and therefore does not contain all of the information
that you should consider before exercising your subscription rights. You should
read the entire prospectus carefully, including the "Risk Factors" section and
the documents listed under "If You Would Like More Information."
QUESTIONS AND ANSWERS ABOUT UNITED STATES LIME & MINERALS
WHAT IS UNITED STATES LIME & MINERALS, INC.?
United States Lime & Minerals was incorporated in 1950. Our business is the
production and sale of lime and limestone products. We extract high-quality
limestone from our quarries and process it for sale as pulverized limestone,
quicklime, and hydrated lime. We conduct our operations through three wholly-
owned subsidiaries: Arkansas Lime Company, Texas Lime Company, and Colorado Lime
Company.
WHERE ARE WE LOCATED?
Our principal executive office is located at:
United States Lime & Minerals, Inc.
13800 Montfort Drive, Suite 330
Dallas, Texas 75240
QUESTIONS AND ANSWERS ABOUT THE RIGHTS OFFERING
WHAT IS A RIGHTS OFFERING?
A rights offering is an opportunity for you to purchase additional shares
of common stock at a fixed price and in an amount at least proportional to your
existing interest, which enables you to maintain and possibly increase your
current percentage ownership.
WHAT IS A SUBSCRIPTION RIGHT?
We are distributing to you, at no charge, 0.4566 subscription rights for
every share of our common stock that you owned either as a holder of record or,
in the case of shares held in our 401(k) plan (formerly the ESOP) (the "Plan"),
as a beneficial owner of shares held by the Plan, on December 26, 2000. We will
not distribute any fractional subscription rights, but will round the number of
subscription rights you receive down to the nearest whole number. Each
subscription right entitles you to purchase one share of our common stock for
$5.50. When you "exercise" a subscription right, that means that you choose to
purchase the number of shares of common stock that the subscription right
entitles you to purchase. You may exercise any number of your subscription
rights, or you may choose not to exercise any subscription rights. You cannot
give or sell your subscription rights to anybody else -- only you can exercise
them. See "About the Rights Offering -- The Subscription Rights."
WHAT IS THE BASIC SUBSCRIPTION PRIVILEGE?
The basic subscription privilege of each subscription right entitles you to
purchase one share of our common stock at a subscription price of $5.50. See
"About the Rights Offering -- Basic Subscription Privilege."
WHAT IS THE OVER-SUBSCRIPTION PRIVILEGE?
We do not expect that all of our shareholders will exercise all of their
basic subscription privileges. By extending over-subscription privileges to our
shareholders, we are providing for the purchase of those shares which are not
purchased through exercise of basic subscription privileges. The
over-subscription privilege of each subscription right entitles you, if and when
you fully exercise your basic subscription
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privilege, to subscribe for additional shares of common stock at a subscription
price of $5.50 per share. See "About the Rights Offering -- Over-Subscription
Privilege."
WHAT ARE THE LIMITATIONS ON THE OVER-SUBSCRIPTION PRIVILEGE?
If sufficient shares are available in the rights offering, we will honor
all over-subscription requests in full. If over-subscription requests exceed the
number of shares available, we will allocate all or a portion of the available
shares among shareholders who over-subscribed in proportion to the number of
shares purchased by those over-subscribing shareholders through the exercise of
their basic subscription privilege. Inberdon Enterprises has stated its
intention not to subscribe for shares pursuant to the over-subscription
privilege. See "About the Rights Offering -- Over-Subscription Privilege."
WHY ARE WE ENGAGING IN A RIGHTS OFFERING?
We are making this rights offering in order to raise $10,000,000. During
the last quarter of this fiscal year (i) we completed the pulverized limestone
production line for our Texas plant at a cost of $500,000 more than last
anticipated, (ii) we substantially completed the Phase I project in Arkansas at
a cost of $4,000,000 more than last anticipated, and (iii) our operating profit
was less than we had expected. Additionally, the first and fourth quarters of
the fiscal year are typically less profitable for us than the second and third
quarters. For these reasons, we determined that additional capital was needed to
fund short-term liquidity demands.
We intend to use the net proceeds of the offering, assuming we sell all the
shares being offered at a per share price of $5.50, for working capital and to
repay short-term indebtedness, including a $5,000,000 bridge loan from Inberdon
and all or a portion of our $4,000,000 revolving credit facility. Assuming
normal weather conditions in the first half of 2001 and additional sales as a
result of our increased capacity, we expect that the proceeds of the rights
offering will provide us with sufficient liquidity to complete all necessary
work on Phase I and to fund short-term working capital requirements. We expect
that the completion of Phase I and the pulverized limestone line will allow us
to more efficiently produce higher quality lime in larger quantities and that,
consequently, we will realize improvements in operating profit and cash flow.
HOW MANY SHARES MAY I PURCHASE?
You will receive 0.4566 subscription rights for each share of common stock
that you owned on December 26, 2000. We will not distribute fractional
subscription rights, but will round the number of subscription rights you are to
receive down to the nearest whole number. Each subscription right entitles you
to purchase one share of common stock for $5.50. See "About the Rights
Offering -- Basic Subscription Privilege." If you exercise all of the
subscription rights that you receive, you may have the opportunity to purchase
additional shares of common stock. On your subscription certificate, you may
request to purchase as many additional shares as you wish for $5.50 per share.
We may honor all of these over-subscription requests, but if not, you may not be
able to purchase as many shares as you requested on your subscription
certificate. Subject to state securities laws and regulations, we have the
discretion to issue less than the total number of shares that may be available
for over-subscription requests in order to comply with state securities laws.
See "About the Rights Offering -- Over-Subscription Privilege."
HOW DID WE ARRIVE AT THE $5.50 PER SHARE SUBSCRIPTION PRICE?
Our Board of Directors, excluding the director affiliated with Inberdon,
set all of the terms and conditions of the rights offering, including the
subscription price. The Board of Directors advised Inberdon of its determination
of the subscription price to confirm Inberdon's willingness to pay a
higher-than-market price for shares in the rights offering. The $5.50
subscription price was based on the historical trading prices of our common
stock, our book value per share, and Inberdon's willingness to pay an above
market price. See "Determination of Offering Price."
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HOW DO I EXERCISE MY SUBSCRIPTION RIGHTS?
You must properly complete the attached subscription certificate and
deliver it to the Subscription Agent before 5:00 p.m., Eastern Standard Time on
February 5, 2001. The address for the Subscription Agent is on page 19. See
"About the Rights Offering -- Exercise of Subscription Rights."
HOW DO I PAY FOR MY SHARES?
Your subscription certificate must be accompanied by proper payment for
each share that you wish to purchase pursuant to both your basic and
over-subscription privileges. See "About the Rights Offering -- Method of
Payment."
HOW LONG WILL THE RIGHTS OFFERING LAST?
You will be able to exercise your subscription rights only during a limited
period. IF YOU DO NOT EXERCISE YOUR SUBSCRIPTION RIGHTS BEFORE 5:00 P.M.,
EASTERN STANDARD TIME, ON FEBRUARY 5, 2001, THE SUBSCRIPTION RIGHTS WILL EXPIRE.
We may, in our discretion, decide to extend the rights offering. In addition, if
the commencement of the rights offering is delayed, the expiration date will
similarly be extended. See "About the Rights Offering -- Expiration Date."
WHAT IF MY SHARES ARE NOT HELD IN MY NAME?
If you are a beneficial owner of common stock held by a holder of record,
such as a broker, trustee or a depository for securities, you should contact the
holder and ask him or her to effect transactions in accordance with your
instructions. Notwithstanding the above, if you are a current or former employee
of ours who beneficially owns shares of our common stock which are held in our
Plan, we will treat those shares as part of your record ownership for purposes
of calculating your subscription rights and you will receive a subscription
certificate representing those rights directly from the Subscription Agent. See
"About the Rights Offering -- Shares Held for Others."
AFTER I EXERCISE MY SUBSCRIPTION RIGHTS, CAN I CHANGE MY MIND AND CANCEL MY
PURCHASE?
No. Once you send in your subscription certificate and payment, you cannot
revoke the exercise of your subscription rights, even if you later learn
information about us that you consider to be unfavorable and even if the market
price of our common stock is below the $5.50 per share purchase price. You
should not exercise your subscription rights unless you are certain that you
wish to purchase additional shares of our common stock at a price of $5.50 per
share. See "About the Rights Offering -- No Revocation."
IS EXERCISING MY SUBSCRIPTION RIGHTS RISKY?
The exercise of your subscription rights involves risks. Exercising your
subscription rights means buying additional shares of our common stock and
should be considered as carefully as you would consider any other equity
investment. Among other things, you should carefully consider the risks
described under the heading "Risk Factors," beginning on page 6.
WHAT HAPPENS IF I CHOOSE NOT TO EXERCISE MY SUBSCRIPTION RIGHTS?
You will retain your current number of shares of common stock even if you
do not exercise your subscription rights. However, if other shareholders
exercise their subscription rights and you do not, the percentage of United
States Lime & Minerals that you own will diminish, and your voting and other
rights will be diluted. See "Risk Factors -- Dilution of your percentage
ownership of United States Lime & Minerals."
CAN I SELL OR GIVE AWAY MY SUBSCRIPTION RIGHTS?
No.
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MUST I EXERCISE ANY SUBSCRIPTION RIGHTS?
No.
WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES OF EXERCISING MY SUBSCRIPTION
RIGHTS?
The receipt and exercise of your subscription rights are intended to be
nontaxable events. You should seek specific tax advice from your personal tax
advisor. See "Federal Income Tax Considerations -- Taxation of Shareholders."
WHEN WILL I RECEIVE MY NEW SHARES?
If you purchase shares of common stock through the rights offering, you
will receive certificates representing those shares as soon as practicable after
February 5, 2001.
CAN THE BOARD OF DIRECTORS CANCEL THE RIGHTS OFFERING?
Yes. The Board of Directors, excluding the director affiliated with
Inberdon, may decide to cancel the rights offering at any time, on or before
February 5, 2001, for any reason. If we cancel the rights offering, any money
received from subscribing shareholders will be refunded promptly. See "About the
Rights Offering -- Cancellation Right."
HOW MUCH MONEY WILL UNITED STATES LIME & MINERALS RECEIVE FROM THE RIGHTS
OFFERING?
If we sell all the shares being offered, we will receive gross proceeds of
$10,000,000. We are offering shares in the rights offering with no minimum
purchase requirement. As a result, there is no assurance we will be able to sell
all or any of the shares being offered. However, our majority shareholder,
Inberdon, has indicated a willingness to fully exercise its basic subscription
rights and to purchase all or a portion of the shares that are not subscribed
for in the rights offering by other shareholders. Accordingly, even if Inberdon
is the only shareholder who participates in the rights offering, we should
receive gross proceeds of between $8,000,000 and $10,000,000. See "About the
Rights Offering -- Purchase Commitments."
HOW WILL WE USE THE PROCEEDS FROM THE RIGHTS OFFERING?
We intend to use the net proceeds of the rights offering to repay
short-term borrowings, which currently consist of the $5,000,000 bridge loan
provided to us by Inberdon on December 27, 2000 and $4,000,000 under our
revolving credit facility. We intend to use the balance of the proceeds, if any,
for working capital and general corporate purposes. If we receive proceeds of
less than $9,000,000, we intend to fully and promptly repay the bridge loan and
will partially repay the amount borrowed under our revolving credit facility.
See "Use of Proceeds."
HOW MANY SHARES WILL BE OUTSTANDING AFTER THE RIGHTS OFFERING?
The number of shares of common stock that will be outstanding after the
rights offering will depend on the number of shares that are purchased in the
rights offering. If we sell all of the shares being offered, then we will issue
1,818,181 new shares of common stock. In that case, we will have approximately
5,799,845 shares of common stock outstanding after the rights offering.
WHAT IF I HAVE MORE QUESTIONS?
If you have more questions about the rights offering, please contact our
information agent, Corporate Investor Communications, Inc., toll free by
telephone at (866) 745-6678 or our Vice President of Finance, Corporate
Controller and Secretary, Larry T. Ohms at 13800 Montfort Drive, Suite 330,
Dallas, Texas, 75240, or by telephone at (972) 991-8400. See "If You Have
Questions."
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A WARNING ABOUT FORWARD-LOOKING STATEMENTS
Any statements contained in this prospectus that are not statements of
historical fact are forward-looking statements as defined in the Private
Securities Litigation Reform Act of 1995. Forward-looking statements in this
prospectus, including, without limitation, statements relating to our plans,
strategies, objectives, expectations, intentions, and adequacy of resources, are
identified by such words as "will," "could," "should," "believe," "expect,"
"intend," "plan," "anticipate," "schedule," "estimate," and "project." We
undertake no obligation to publicly update or revise any forward-looking
statements. You are cautioned that forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially from
expectations, including, without limitation, the following: (i) our plans,
strategies, objectives, expectations, and intentions are subject to change at
any time at our discretion; (ii) our plans and results of operations will be
affected by our ability to manage our growth and modernization; (iii) inclement
weather conditions; (iv) increased fuel costs; (v) unanticipated delays or
additional cost overruns in completing current construction projects; and (vi)
other risks and uncertainties set forth below or in our filings with the
Securities and Exchange Commission.
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RISK FACTORS
Investing in our common stock involves risks. You should be able to bear a
complete loss of your investment. You should carefully consider the following
factors and other information in this Prospectus before deciding to purchase our
common stock.
RISKS ASSOCIATED WITH THE OFFERING OF SUBSCRIPTION RIGHTS
Risks associated with exercising subscription rights. We cannot assure you
that the public trading market price of our common stock will not either
increase or decline before the subscription rights expire. If you exercise your
subscription rights and the market price of the common stock subsequently does
not increase to more than $5.50, then you will have committed to buy shares of
common stock in the rights offering at a price that is higher than the price at
which our shares could be purchased in the market. Moreover, we cannot assure
you that you will ever be able to sell shares of common stock that you purchased
in the rights offering at a price equal to or greater than the subscription
price. Until certificates are delivered upon expiration of the rights offering,
you may not be able to sell the shares of our common stock that you purchase in
the rights offering. Certificates representing shares of our common stock that
you purchased will be delivered as soon as practicable after expiration of the
rights offering. We will not pay you interest on funds delivered to the
Subscription Agent pursuant to the exercise of rights.
Determination of the subscription price. Our Board of Directors, excluding
the director affiliated with Inberdon, set all of the terms and conditions of
the rights offering, including the subscription price. The Board of Directors
advised Inberdon of its determination of the subscription price to confirm
Inberdon's willingness to pay an above market price for shares in the rights
offering. The $5.50 subscription price was based on the historical trading
prices of our common stock, our book value per share, and Inberdon's willingness
to pay an above market price. The subscription price does not necessarily bear
any relationship to our past operations, cash flows, current financial
condition, or any other established criteria for value. You should not consider
the subscription price as an indication of the value of United States Lime &
Minerals or our common stock. See "Determination of Offering Price."
No revocation of exercise of subscription rights. Once you exercise your
subscription rights, you may not revoke the exercise.
Dilution of your percentage ownership of United States Lime & Minerals. If
you do not exercise all of your basic subscription rights, you may suffer
significant dilution of your percentage ownership of United States Lime &
Minerals relative to shareholders who fully exercise their subscription rights.
For example, if you own 500,000 shares of common stock before the rights
offering, or 12.6% of the equity of United States Lime & Minerals, and you
exercise none of your subscription rights while all other subscription rights
are exercised through the basic subscription privilege or over-subscription
privilege, then the percentage ownership represented by your 500,000 shares will
be reduced to 8.6%.
Cancellation of rights offering. If we elect to cancel the rights
offering, neither we nor the Subscription Agent will have any obligation with
respect to the subscription rights except to return, without interest, any
subscription payments.
Volatility of stock price. Certain factors may cause the market price of
our stock to fluctuate significantly. These factors include, without limitation:
- inclement weather;
- quarterly fluctuations in our financial results;
- general economic conditions and the impact of government programs such as
the Transportation Equity Act for the 21st Century;
- market conditions in the lime industry, and in the industries that
purchase our products;
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- changes in relationships with our customers; and
- the size of the public float of our common stock (which, in the case of
the rights offering, will depend on the number of shares of common stock
purchased in the rights offering).
Control by major shareholder. As of December 26, 2000, Inberdon owned
approximately 51% of our voting stock. The rights offering could, and in fact is
likely to, result in Inberdon owning an even greater percentage of our common
stock. Inberdon has enough votes to approve or disapprove any matters that are
determined by a majority vote of our shareholders, and accordingly your ability
to influence United States Lime & Minerals through voting your shares is
limited.
RISK FACTORS RELATING TO UNITED STATES LIME & MINERALS
Short-term liquidity demands. We are making the rights offering to raise
cash to meet immediate liquidity demands. If we sell all the shares being
offered, we will receive gross proceeds of $10,000,000. We will use most of
these proceeds to repay short-term indebtedness, including the $5,000,000 bridge
loan from Inberdon and all or a portion of our $4,000,000 revolving credit
facility, which we have fully drawn down. To the extent we repay the revolving
credit facility, we will have access to funds available thereunder. Accordingly,
we believe that the proceeds of the rights offering will allow us to meet
immediate liquidity demands and to pay for all necessary work on Phase I of the
Arkansas project. We have not, however, established any minimum purchase
requirement for shareholder participation in the rights offering. And, although
we have had some assurance from Inberdon, our majority shareholder, that it will
purchase shares in the rights offering for a total purchase price of between
$8,000,000 and $10,000,000, (see "About the Rights Offering -- Purchase
Commitments") there is no guarantee that Inberdon will do so. Accordingly, there
can be no assurance that we will be able to sell all or any of the shares we are
offering and the amount of proceeds we receive may be substantially less than we
anticipate and need.
If we do not raise at least $8,000,000 in the rights offering and if our
results of operations do not significantly improve in the short term, it may be
difficult for us to meet our short-term obligations or to achieve our business
goals. We likely would have to raise additional proceeds and there is no
assurance we will be able to do so given our current levels of indebtedness.
Even if we do raise $10,000,000 in the rights offering, until we begin to
generate the level of operating profit and cash flow that we believe we are
capable of, given the significant investments that we recently have made to our
facilities, we may need to explore new sources of financing or other
alternatives to maximize shareholder value.
Factors that could affect our operations. In the normal course of our
business, we face risks that could have a material adverse impact on our results
of operations, liquidity, financial position and prospects. Not all risks are
foreseeable or within our ability to control. These risks arise from factors
including, but not limited to:
- fluctuating demand for lime and limestone products;
- our ability to produce and store quantities of lime and limestone
products sufficient to meet customer demand;
- our modernization and expansion strategies, including our ability to
execute our strategies and complete our projects on time and within
budget;
- our access to capital;
- energy costs;
- inclement weather; and
- the effects of seasonal trends in the lime industry.
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Our success depends on our ability to manage risks affecting our business and
the industry. If we are not able to do so, our business will suffer, which could
have a negative impact on the price of our common stock.
Existing and future adverse effects of leverage and restrictions imposed by
terms of our indebtedness. Following the closing of this offering our debt ratio
is expected to have improved (see "About the Rights Offering -- Capitalization
Table"). Even with our improved debt ratio, a substantial portion of our cash
flows from operations will be dedicated to the payment of principal and interest
on indebtedness. Our ability to service our debt and to comply with the
financial and restrictive covenants contained in our loan agreements will depend
upon our future performance and business growth. Our performance and growth is
subject to financial, economic, competitive, and other factors. Many of these
factors are beyond our control. In particular, our ability to service our
indebtedness will depend upon our ability to generate higher levels of revenues
and cash flows as a result of the modernization and expansion of the Texas and
Arkansas plants. While we believe that we will be able to generate sufficient
cash flow to cover our current and anticipated future debt service payments, we
cannot provide any assurance to that effect.
Compliance with environments laws and regulations. Our operations are
subject to various federal, state, and local environmental laws and regulations,
including the Clean Air Act, the Clean Water Act, the Resource Conservation and
Recovery Act, and the Comprehensive Environmental Response, Compensation, and
Liability Act, as well as the Toxic Substances Control Act. The rate of change
of such legislation has been rapid over the last decade, and compliance can
require significant expenditures. For example, recent federal legislation
required Texas Lime Company and Arkansas Lime Company to apply for "Title V"
renewable operating permits ("Operating Air Permits") which have significant
on-going compliance monitoring costs. While we cannot be certain that we will
always be able to comply with changing requirements without a material impact on
our business, we are not aware of any such impending change with which we cannot
comply.
In September 1999, we received an Operating Air Permit for Phase I of the
modernization and expansion project for the Arkansas facility. In June 2000, we
received a second Operating Air Permit for Arkansas Phase II. These permits
cover air emissions generated at the facility and contain stringent emission
limits and performance criteria that the new rotary lime kilns and plant must
meet. Until both kilns are fully operational and have demonstrated their ability
to comply with the permit conditions, there can be no assurance that additional
capital will not be required, or operating conditions imposed, in order to
achieve compliance.
Completion of Phase II of the Arkansas expansion. We have discussed our
desire to complete Phase II of the Arkansas expansion. However, due to our lower
than expected operating income generated this year, as well as the increased
costs of both Arkansas Phase I and the second pulverized limestone facility at
Texas Lime, we are delaying the construction of Arkansas Phase II at this time.
We still intend to proceed with the project and will continue to review the
optimum start-up time based on our operating results, market demand, ability to
secure competitive bids for the construction and the availability of financing.
The future construction of Arkansas Phase II could also have a material adverse
effect on our business or financial results due to the impact of start-up costs
and the potential for under-utilization, especially in the start-up phase. No
assurance can be given that the Phase II expansion of the Arkansas facility will
be completed on time or within budgeted projections, and may be abandoned due to
these or other issues. Further, notwithstanding current demand for lime and
limestone products, we cannot guarantee that we will be able to sell our
products, or reestablish accounts with those customers that previously purchased
products from Arkansas Lime, once increased production has commenced, or that
any such sales will be profitable. We may decide to incur additional debt or
issue additional equity securities to pay for construction or other expansion
costs, which could have a further material adverse dilutive effect on the
ownership interests of our current stockholders.
Competition. The lime industry is highly regionalized and competitive. Our
competitors include both public and private companies. The primary competitive
factors in the lime industry are quality, price, proximity to the customer,
personal relationships, and timeliness of deliveries, with varying emphasis on
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these factors depending upon the specific product application. To the extent
that one or more of our competitors becomes more successful with respect to any
key competitive factor, our business could be materially adversely affected.
Although demand for lime has been relatively strong in recent years, we are
unable to predict future demand and prices, and we cannot provide any assurance
that current levels of demand and pricing will continue or that any future price
increases can be sustained.
Industry consolidation. There is a continuing trend of consolidation in
the lime and limestone industry. Currently, the four largest lime companies in
North America account for approximately 70% of total lime capacity. In addition
to, and often in conjunction with, consolidations, many producers have undergone
modernization and expansion projects to upgrade their processing equipment in an
effort to improve their operating efficiency and competitive position. As
industry consolidation continues, we will continue to evaluate external
opportunities for expansion, as well as pursue our modernization and expansion
projects, in an effort to remain competitive, protect our markets, and position
ourself for the future. We cannot provide any assurance that we will have
sufficient financial and management resources to implement our strategy,
particularly while we are endeavoring to complete the Arkansas project.
RECENT DEVELOPMENTS
The Board of Directors has accepted the resignation of Herbert G.A. Wilson
as President, Chief Executive Officer and Director effective December 8, 2000
and appointed Timothy W. Byrne as its new President and CEO effective that date.
Mr. Byrne has been associated with us for 10 years. In addition to his service
as a Board member since 1991, Mr. Byrne served as our President and CEO during
1997 and 1998 and as our Chief Financial Officer prior to 1997.
On December 27, 2000, the Company obtained a $5,000,000 bridge loan
("Bridge Loan"), under normal commercial terms, from Inberdon. The Bridge Loan
is unsecured, bears interest at 9.75% and must be repaid by March 27, 2001. We
intend to promptly repay the Bridge Loan with a portion of the proceeds of the
rights offering.
During the first nine months of 2000 and continuing in the fourth quarter,
our operating results have been adversely affected by a number of factors, which
include, but are not limited to, rapidly increasing fuel costs, particularly
natural gas, lower sales of pulverized limestone used in roofing products, and
unprecedented flooding at the Texas Lime Company in June. Actions have been
taken to address these adverse factors which, together with the new production
facilities, should improve cash flow in 2001.
The recent high cost of natural gas has impacted the results of Arkansas
Lime Company, increasing operating losses because the old vertical kilns, now
retired, could only burn gas. The new Phase I rotary kiln, produced its first
lime on October 22, 2000, has mitigated this issue because it is permitted to
burn gas, coal or coke. The old gas kilns used for lime production were
permanently closed on October 20, 2000, one month later than originally
estimated. Our pulverized limestone production process in Texas and Arkansas
will continue to run exclusively on gas fuel.
The June flooding in Texas was the result of exceptional rainfall,
subsequently confirmed by the National Weather Service to be the heaviest
monthly total in the area for 113 years. The floods caused a significant loss of
production, the depletion of finished goods inventories, and led to increased
costs through purchasing lime from outside sources to fulfill customer
commitments. There was no long-term damage, and the plant was back in full
production in July. We retained our customer base and have rebuilt the normal
level of finished goods inventories.
During the fourth quarter 2000, we commissioned a new line for the
production of pulverized limestone at Texas Lime Company. This investment will
allow us to pursue new business opportunities and better serve existing
customers. The lack of reliability of a single production line was a restraining
factor on sales to several large customers requiring 'round-the-clock'
availability. We believe that certain of these customers will begin taking
additional product in the first quarter of 2001. The production operations at
Texas Lime are highly integrated, and increasing the level of pulverized
limestone production along with the recent increases in lime capacity, allows
for a lower level of production cost to be achieved. We
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previously estimated the cost of the pulverized limestone production line to be
$1,800,000. We have revised our estimate to $2,300,000 to reflect additional
costs due to: changes in the scope of work, which amounted to approximately
$225,000; additional foundation work, amounting to about $30,000; and unexpected
renovations of used equipment for the line, approximating $150,000. Other costs
amounted to around $100,000. The line is complete and fully operational, so we
do not anticipate revising further our $2,300,000 estimate.
We now estimate that total capital expenditures for Phase I of the Arkansas
project will be approximately $34,000,000, approximately $4,000,000 over the
estimate last announced by us. The kiln in Phase I produced its first lime on
October 22, 2000, which is of excellent quality and has been well received by
our customers. Currently our lime is being tested by a number of new customers
that we previously could not serve because of the quality of our lime produced
with our old vertical kilns which have been retired. In addition, the new kiln
is operating efficiently, and has produced volumes in excess of 600 tons per
day. There is some additional work to be completed on Phase I, and at the
present time, we estimate that, except for the terminal in Shreveport,
Louisiana, which may not be completed until we commence Phase II, Phase I will
be completed and operational during the first quarter of 2001.
Arkansas Phase II is estimated to cost approximately $12,000,000. We have
expressed our desire to complete Phase II of the Arkansas expansion as soon as
practicable. However, due to our lower than expected operating profit generated
this year, as well as the increased costs of both Arkansas Phase I and the
second pulverized limestone line at Texas Lime, we are delaying the construction
of Phase II at this time. We still plan to proceed with the project and will
continue to review the optimum time to start this project based on our future
operating results, market demand, and our ability to secure competitive
construction bids and financing.
BANKING FACILITIES
We have a $50,000,000 Senior Secured Term Loan (the "Loan"), provided by a
consortium of commercial banks (the "Lenders"), which was fully drawn down on
March 30, 2000. The Loan was used to repay all the then-existing bank loans,
with the balance principally used to fund Phase I of the Arkansas project.
Monthly principal payments of $277,778 began on April 30, 2000, and will
terminate on March 30, 2007, when a final payment of $26,944,444 is due. The
interest rate is fixed at a weighted average rate of 9.135%, in addition to
which, we pay a servicing fee of 0.125% of the outstanding principal. The Loan
is secured by a first lien on substantially all of our assets with the exception
of accounts receivable and inventories. On December 27, 2000 we executed with
the Lenders the first amendment to the credit agreement for the Loan for the
purpose of amending certain covenants related to other indebtedness and to
permit us to incur additional indebtedness in the amount of the $5,000,000
Bridge Loan provided by Inberdon.
We also have a $4,000,000 revolving credit facility (the "Revolver")
provided by the lead bank of the Loan consortium and secured by accounts
receivable and inventories. The Revolver bears interest at LIBOR plus 1.40%,
which rate will increase in accordance with a defined rate spread based upon our
then-current rate of total funded debt to earnings before interest, taxes,
depreciation and amortization (EBITDA). The Revolver expires on April 20, 2001,
and as of December 22, 2000, we had fully drawn down all available funds under
this facility.
ABOUT UNITED STATES LIME & MINERALS
United States Lime & Minerals, Inc. was incorporated in 1950. Our business
is the production and sale of lime and limestone products. We conduct our
operations through three wholly-owned subsidiaries: Arkansas Lime Company, Texas
Lime Company, and Colorado Lime Company.
We extract raw, high-quality limestone from our quarries and then processes
it for sale as pulverized limestone, quicklime, and hydrated lime. Pulverized
limestone, also referred to as ground calcium carbonate, is a dried product
ground to granular and finer sizes. Quicklime (calcium oxide) is produced by
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heating limestone to very high temperatures in kilns in a process called
calcination. Hydrated lime (calcium hydroxide) is produced by reacting quicklime
with water in a controlled process to produce a dry, white powder.
Pulverized limestone is used primarily in the production of construction
materials such as asphalt paving and roofing shingles, as an additive to
agriculture feeds, as a soil enhancement, and for mine safety dust in coal
mining operations. Quicklime is used primarily in the manufacturing of paper
products, in sanitation and water filtering systems, in metal processing, and in
soil stabilization for highway and building construction. Hydrated lime is used
primarily in municipal sanitation and water treatment, in soil stabilization for
highway and building construction, in the production of chemicals, and in the
production of construction materials such as stucco, plaster and mortar.
Our principal customers for lime and limestone products are highway, street
and parking lot contractors, chemical producers, paper manufacturers, roofing
shingle manufacturers, steel producers, glass manufacturers, municipal
sanitation and water treatment facilities, poultry and cattle feed producers,
governmental agencies, and electric utility companies. We transport our lime and
limestone products by rail and truck to customers generally within a radius of
400 miles of each of our processing plants. Substantially all of our sales are
made within the United States, with a majority of our product sales occurring in
the states of Arkansas, Colorado, Kansas, Louisiana, Mississippi, Missouri, New
Mexico, Oklahoma, Tennessee, and Texas. Approximately 700 customers accounted
for our sales of lime and limestone products during the year ended December 31,
1999. No single customer accounted for more than 10% of such sales. We believe
that we are not subject to significant customer risks because our customers are
considerably diversified as to geographic location and industrial concentration.
However, given the capital intensive nature of the lime and limestone industry,
our profits are very sensitive to changes in sales volume.
Our sales have historically reflected seasonal trends, with the largest
percentage of total annual revenues being realized in the second and third
quarters. Lower seasonal demand normally results in reduced shipments and
revenues in the first and fourth quarters. Inclement weather conditions
generally have a negative impact on the demand for lime and limestone products.
Two of our subsidiaries currently extract limestone from open-pit quarries:
the Texas Lime Company, which is located 14 miles from Cleburne, Texas; and the
Arkansas Lime Company, which is located near Batesville, Arkansas. A third
subsidiary, the Colorado Lime Company, owns limestone resources at Monarch Pass
located 15 miles west of Salida, Colorado.
Texas Lime Company operates from a tract of land containing approximately
470 acres, including the Cleburne Quarry. In January 1999, we purchased
approximately 400 acres of additional land and now own approximately 2,700 acres
adjacent to the quarry. Both the quarry and the adjacent land contain known
high-quality limestone reserves in a bed averaging 28 feet in thickness, with an
overburden that ranges from 0 to 50 feet. We also have mineral interests in
approximately 560 acres of land adjacent to the northwest boundary of that
property. The calculated reserves, as of January 31, 1999, were approximately
44,000,000 tons of proven reserves and approximately 91,000,000 tons of probable
reserves. Assuming the enhanced level of production following the Texas
modernization and expansion project is maintained, we estimate that these
reserves are sufficient to sustain operations for approximately 100 years.
Arkansas Lime Company operates the Batesville Quarry and its new lime
production facility located at the quarry. The limestone and hydrate production
facilities are located at a second site linked to the quarry by its own standard
railroad. The active quarry operations cover approximately 725 acres of land
containing a known deposit of high-quality limestone. The average thickness of
the high-quality limestone deposit is approximately 70 feet, with an average
overburden thickness of 35 feet. We also own approximately 325 additional acres
containing additional high-quality limestone deposits adjacent to the present
quarry but separated from it by a public highway. The average thickness of this
second high-quality limestone deposit is approximately 55 feet, with an average
overburden of 20 feet. The calculated reserves, as of January 31, 1999, were
approximately 23,500,000 tons of proven reserves plus an additional 33,500,000
tons of probable reserves. Assuming the present level of production is
maintained, we estimate
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that reserves are sufficient to sustain operations for approximately 100 years.
However, this estimate is reduced to 50 years assuming that the Arkansas
facility reaches projected production levels after the planned modernization and
expansion.
Colorado Lime Company acquired the Monarch Pass Quarry in November 1995 and
has not carried out any mining on the property. A review of the potential
limestone resources has been completed by independent geologists. However, we do
not consider the cost of a drilling program to be economically feasible at this
time and, consequently, it is not possible to identify and categorize reserves.
The Monarch Pass Quarry, which had been operated for many years until its
closure in the early nineties, contains a mixture of limestone types, including
high-quality calcium limestone and dolomite. We expect to utilize remaining
crushed stone inventories to supply our processing plant in nearby Salida.
Developed quarry benches are available and will be mined if the need arises.
We extract limestone by the open-pit method at the Arkansas and Texas
quarries. Monarch Pass is also an open-pit quarry, but is not being worked at
this time. Open-pit mining is generally less expensive than underground mining.
The principal disadvantage of the open-pit method is that operations are subject
to inclement weather.
After extraction through mining operations, limestone is crushed, screened,
and ground in the case of pulverized limestone, or further processed in kilns
and hydrators in the case of quicklime and hydrated lime, before shipment. We
produce lime and/or limestone products at three plants as described below.
Following the completion of the modernization and expansion of the Texas
plant at the end of 1998, the annual capacity is now 470,000 tons of quicklime
from three rotary kilns. The Texas project included the installation of a new
stone crushing and handling system, the addition of a preheater to one of the
existing kilns, additional storage, screening, and shipping capacity, and a new
support building housing a laboratory and administrative and shop facilities.
The plant has pulverized limestone equipment which has a capacity to produce
approximately 1,000,000 tons of pulverized limestone annually, depending on the
product mix. Construction of a second pulverizing line is now completed and has
provided operational flexibility as well as an increase in capacity. In addition
to the Cleburne plant, we own a dormant plant which is located near Blum, Texas
on a tract of land covering approximately 40 acres. The Blum plant was acquired
in 1989, and its kilns have not been operated since that time; however, the
plant's storage and shipment facilities are currently being utilized.
The Arkansas lime production plant is situated at the quarry. The limestone
and hydrate facilities are situated on a tract of 290 acres located
approximately two miles from the Batesville Quarry to which it is connected by a
company-owned standard railroad. Utilizing one rotary kiln, this plant has an
annual capacity of 200,000 tons of quicklime. The plant has two grinding systems
which, depending on the product mix, have the capacity to produce 700,000 tons
of pulverized limestone annually.
Over the past decade, Arkansas Lime Company has lost various accounts due
to poor product quality and service from the now retired vertical lime kilns
which were installed in the 1920's. We have commenced a modernization and
expansion of the Arkansas facility, to be completed in two phases, which is
designed to expand production and improve quality and service, enabling Arkansas
Lime Company to compete for new accounts and for the accounts of former
customers lost due to the quality and service issues. Phase I, includes the
redevelopment of the quarry plant, rebuilding of the railroad to standard United
States gauge, purchase of a facility to establish an out-of-state terminal, and
installation of a rotary kiln with preheater, along with increased product
storage and loading capacity. There is some additional work to be completed on
Phase I, but the project recently met an important milestone in producing its
first lime on October 22. Completion of Phase I will provide us with a modern
quarry and lime manufacturing facilities with an annual production capacity of
up to approximately 200,000 tons of quicklime. We have plans to refurbish the
distribution terminal in Shreveport, Louisiana, connected to the Kansas City
Southern railroad, to provide lime storage and distribution capacity to service
markets in Louisiana and East Texas. However, based on our current plan, this
terminal may be completed in conjunction with Phase II. Phase II will further
expand lime production capacity at Arkansas to approximately 400,000 tons of
quicklime by the installation of a second rotary kiln and preheater with
additional storage capacity.
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We maintain lime hydrating equipment and limestone drying and pulverizing
equipment at both the Texas and Arkansas plants. Storage facilities for lime and
pulverized limestone products at each plant consist primarily of cylindrical
tanks, which we considered to be adequate to protect our lime and limestone
products and to provide an available supply for our customers' needs at the
existing volume of shipments. Equipment is maintained at each plant to load
trucks, and at the Arkansas and Blum plants to load railroad cars.
The Colorado Lime Company operates a limestone drying, grinding and bagging
facility, with an annual capacity of 60,000 tons, on 99 acres of land in Salida,
Colorado. The property is leased from the Union Pacific Railroad for a term of 5
years, commencing June 1999, with renewal options for a further 10 years. A rail
loading spur is available, although we do not currently ship any products by
rail from this facility. This plant's facilities also include a small rotary
lime kiln which is permitted for operation but is presently not being operated.
A mobile stone crushing and screening plant is situated in the Monarch Pass
Quarry, producing agricultural grade limestone, with an annual capacity of up to
40,000 tons.
ABOUT THE LIME INDUSTRY
In recent years, the demand for lime has been relatively strong, and price
levels have gradually increased. However, the industry remains localized and
competitive, with quality, price and proximity to customers being the prime
factors affecting competition.
Our competitors are predominately private companies, and, following a
period of substantial consolidation in the lime and limestone industry, with the
four largest lime companies now account for approximately 70% of North American
lime capacity. In addition to the consolidations, and often in conjunction with
them, many lime producers have undergone modernization and expansion projects to
upgrade their processing equipment in an effort to improve operating efficiency.
Our modernization and expansion projects should allow us to continue to remain
competitive, protect our markets, and position ourselves for the future. In
addition, we will continue to evaluate external opportunities for expansion.
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ABOUT THE RIGHTS OFFERING
BEFORE EXERCISING ANY SUBSCRIPTION RIGHTS, YOU SHOULD READ CAREFULLY THE
INFORMATION SET FORTH UNDER "RISK FACTORS" BEGINNING ON PAGE 6.
THE SUBSCRIPTION RIGHTS
We are distributing to you, at no cost, non-transferable subscription
rights either as a holder of record of shares of our common stock on December
26, 2000 or, in the case of shares held in our Plan, as a beneficial owner of
shares held by the Plan. We are giving you 0.4566 subscription rights for each
share of common stock that you owned on December 26, 2000. You will not receive
fractional subscription rights during the rights offering, but instead we have
rounded your total number of subscription rights down to the nearest whole
number. Each subscription right entitles you to purchase one share of common
stock for $5.50. If you wish to exercise your subscription rights, you must do
so before 5:00 p.m., Eastern Standard Time, on February 5, 2001. After that
date, the subscription rights will expire and will no longer be exercisable.
BASIC SUBSCRIPTION PRIVILEGE
Each subscription right entitles you to receive one share of common stock
upon payment of $5.50 per share. You will receive certificates representing the
shares that you purchase pursuant to your basic subscription privilege as soon
as practicable after February 5, 2001, whether you exercise your subscription
rights immediately prior to that date or earlier.
OVER-SUBSCRIPTION PRIVILEGE
Subject to the allocation described below, each subscription right also
grants each shareholder an over-subscription privilege to purchase additional
shares of common stock that are not purchased by other shareholders pursuant to
their basic subscription privileges. You are entitled to exercise your over-
subscription privilege only if you exercise your basic subscription rights in
full. Inberdon, our majority shareholder, has stated its intention not to
subscribe for additional shares pursuant to its over-subscription privilege,
thus stepping back to allow other fully subscribing shareholders to purchase
additional shares if they wish.
If you wish to exercise your over-subscription privilege, you should
indicate the number of additional shares that you would like to purchase in the
space provided on your subscription certificate. When you send in your
subscription certificate, you must also send the full purchase price for the
number of additional shares that you have requested to purchase (in addition to
the payment due for shares purchased through your basic subscription privilege).
If the number of shares remaining after the exercise of all basic subscription
privileges is not sufficient to satisfy all requests for shares pursuant to
over-subscription privileges, you will be allocated additional shares pro rata
(subject to elimination of fractional shares), based on the number of shares you
purchased through the basic subscription privilege in proportion to the total
number of shares that you and other over-subscribing shareholders purchased
through the basic subscription privilege. However, if your pro rata allocation
exceeds the number of shares you requested on your subscription certificate,
then you will receive only the number of shares that you requested, and the
remaining shares from your pro rata allocation will be divided among other
shareholders exercising their over-subscription privileges. Subject to state
securities laws and regulations, we have the discretion to issue less than the
total number of shares that may be available for over-subscription requests in
order to comply with state securities laws.
As soon as practicable after February 5, 2001, Computershare Trust Company
of New York, acting as our Subscription Agent, will determine the number of
shares of common stock that you may purchase pursuant to the over-subscription
privilege. You will receive certificates representing these shares as soon as
practicable after February 5, 2001. Subject to state securities laws and
regulations, we have the discretion to delay allocation and distribution of any
and all shares to shareholders who are affected by such regulations and elect to
participate in the rights offering, including shares that we issue with respect
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to your basic or over-subscription privilege in order to comply with state
securities laws. If you request and pay for more shares than are allocated to
you, we will refund that overpayment, without interest. In connection with the
exercise of the over-subscription privilege, banks, brokers and other nominee
holders of subscription rights who act on behalf of beneficial owners will be
required to certify to the Subscription Agent and United States Lime & Minerals
as to the aggregate number of subscription rights that have been exercised, and
the number of shares of common stock that are being requested through the over-
subscription privilege, by each beneficial owner on whose behalf such nominee
holder is acting.
PURCHASE COMMITMENTS
As of December 26, 2000, Inberdon owned approximately 51% of the
outstanding shares of our common stock and, therefore, will receive rights to
subscribe with its basic subscription privilege for approximately 926,862 shares
of our common stock in the rights offering. Inberdon stated its intention to
fully exercise its basic subscription rights and, if the rights offering is
undersubscribed, to, in its sole discretion, purchase additional shares that are
not subscribed for by other shareholders in the rights offering, to the extent
such shares are available, for an investment of at least $8,000,000 and possibly
up to $10,000,000.
NO RECOMMENDATIONS
We are not making any recommendation as to whether or not you should
exercise your subscription rights. You should make your decision based on your
own assessment of your best interests.
EXPIRATION DATE
The rights will expire at 5:00 p.m., Eastern Standard Time, on February 5,
2001, unless we decide to extend the rights offering. If this commencement of
the rights offering is delayed, the expiration date will be similarly extended.
If you do not exercise your basic subscription privilege and over-subscription
privilege prior to that time, YOUR SUBSCRIPTION RIGHTS WILL BE NULL AND VOID. We
will not be required to issue shares of common stock to you if the Subscription
Agent receives your subscription certificate or your payment after that time,
regardless of when you sent the subscription certificate and payment, unless you
send the documents in compliance with the guaranteed delivery procedures
described below.
CANCELLATION RIGHT
Our Board of Directors, excluding the director affiliated with Inberdon,
may cancel the rights offering in its sole discretion at any time prior to or on
February 5, 2001 for any reason (including, without limitation, a change in the
market price of the common stock). If we cancel the rights offering, any funds
you paid will be promptly refunded, without interest.
NON-TRANSFERABILITY OF SUBSCRIPTION RIGHTS
Only you may exercise the basic subscription privilege and the
over-subscription privilege. You may not sell, give away or otherwise transfer
the basic subscription privilege or the over-subscription privilege.
EXERCISE OF SUBSCRIPTION RIGHTS
You may exercise your subscription rights by delivering to the Subscription
Agent on or prior to February 5, 2001:
- A properly completed and duly executed subscription certificate;
- Any required signature guarantees; and
- Payment in full of $5.50 per share of common stock to be purchased
through the basic subscription privilege and the over-subscription
privilege.
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You should deliver your subscription certificate and payment to the
Subscription Agent at the address shown under the heading "Subscription Agent."
We will not pay you interest on funds delivered to the Subscription Agent
pursuant to the exercise of rights.
METHOD OF PAYMENT
Payment for the shares must be made by check or bank draft (cashier's
check) drawn upon a U.S. bank or a money order payable to "Computershare Trust
Company of New York, AS SUBSCRIPTION AGENT" or by wire transfer of immediately
available funds to the account maintained by the Subscription Agent at Harris
Trust and Savings Bank, Chicago, Illinois, ABA #071000288, Account No.
227-938-8. Any wire transfer of funds should clearly indicate the identity of
the subscriber who is paying the subscription price by the wire transfer.
Payment will be deemed to have been received by the Subscription Agent only
upon:
(A) receipt and clearance of any uncertified check;
(B) receipt by the Subscription Agent of any certified check or bank
draft drawn upon a U.S. bank, any money order or any funds transferred by
wire transfers; or
(C) receipt of good funds in the Subscription Agent's account
designated above.
Please note that funds paid by uncertified personal check may take at least
five business days to clear. Accordingly, if you wish to pay by means of an
uncertified personal check, we urge you to make payment sufficiently in advance
of February 5, 2001 to ensure that the Subscription Agent receives cleared funds
before that date. We also urge you to consider payment by means of a certified
or cashier's check or money order.
GUARANTEED DELIVERY PROCEDURES
If you want to exercise your subscription rights, but time will not permit
your subscription certificate to reach the Subscription Agent on or prior to
February 5, 2001 you may exercise your subscription rights if you satisfy the
following guaranteed delivery procedures:
(1) You send, and the Subscription Agent receives, payment in full for
each share of common stock being subscribed for through the basic
subscription privilege and the over-subscription privilege, on or prior to
February 5, 2001;
(2) You send, and the Subscription Agent receives, on or prior to
February 5, 2001, a notice of guaranteed delivery, substantially in the
form provided with the attached instructions, from a member firm of a
registered national securities exchange or a member of the National
Association of Securities Dealers, Inc., or a commercial bank or trust
company having an office or correspondent in the United States. The notice
of guaranteed delivery must state your name, the number of subscription
rights that you hold, the number of shares of common stock that you wish to
purchase pursuant to the basic subscription privilege and the number of
shares, if any, you wish to purchase pursuant to the over-subscription
privilege. The notice of guaranteed delivery must guarantee the delivery of
your subscription certificate to the Subscription Agent within three OTC
trading days following the date that you executed the notice of guaranteed
delivery; and
(3) You send, and the Subscription Agent receives, your properly
completed and duly executed subscription certificate, including any
required signature guarantees, within three OTC trading days following the
date that you executed the notice of guaranteed delivery.
The notice of guaranteed delivery may be delivered to the Subscription
Agent in the same manner as your subscription certificate at the addresses set
forth under the heading "About the Rights Offering -- Subscription Agent," or
may be transmitted to the Subscription Agent by facsimile transmission, to
facsimile number (212) 701-7636. You can obtain additional copies of the form of
notice of guaranteed delivery by requesting them from the Subscription Agent at
the address or phone number set forth under the heading "About the Rights
Offering -- Subscription Agent."
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<PAGE> 20
SIGNATURE GUARANTEES
Signatures on the subscription certificate must be guaranteed by an
Eligible Guarantor Institution, as defined in Rule 17Ad-15 of the Securities
Exchange Act of 1934, as amended, subject to the standards and procedures
adopted by the Subscription Agent. Eligible Guarantor Institutions include
banks, brokers, dealers, credit unions, national securities exchanges and
savings associations. Signatures on the subscription certificate do not need to
be guaranteed if either the subscription certificate provides that the shares of
common stock to be purchased are to be delivered directly to the record owner of
such subscription rights, or the subscription certificate is submitted for the
account of a member firm of a registered national securities exchange or a
member of the National Association of Securities Dealers, Inc., or a commercial
bank or trust company having an office or correspondent in the United States.
SHARES HELD FOR OTHERS
If you are a broker, a trustee or a depository for securities, or you
otherwise hold shares of common stock for the account of others as a nominee
holder, you should notify the beneficial owner of such shares as soon as
possible to obtain instructions with respect to their subscription rights, as
set forth in the instructions we have provided to you for your distribution to
beneficial owners. If the beneficial owner so instructs, you should complete the
appropriate subscription certificate and, in the case of the over-subscription
privilege, the related nominee holder certification, and submit them to the
Subscription Agent with the proper payment.
If you are a beneficial owner of common stock held by a nominee holder,
such as a broker, trustee or a depository for securities, we will ask your
broker, dealer or other nominee to notify you of this rights offering. If you
wish to purchase shares through this rights offering, you should contact the
holder and ask him or her to effect transactions in accordance with your
instructions on a form provided by your nominee holder with the other rights
offering materials. Notwithstanding the above, if you are a current or former
employee of ours who beneficially owns shares of our common stock which are held
in our Plan, we will treat those shares as part of your record ownership for
purposes of calculating your subscription rights.
AMBIGUITIES IN EXERCISE OF SUBSCRIPTION RIGHTS
If you do not specify the number of shares of common stock being subscribed
for on your subscription certificate, or if your payment is not sufficient to
pay the total purchase price for all of the shares that you indicated you wished
to purchase, you will be deemed to have subscribed for the maximum number of
shares of common stock that could be subscribed for with the payment that the
Subscription Agent receives from you. If your payment exceeds the total purchase
price for all of the shares of common stock shown on your subscription
certificate, your payment will be applied, until depleted, to subscribe for
shares of common stock in the following order:
(1) to subscribe for the number of shares, if any, that you indicated
on the subscription certificate that you wished to purchase through your
basic subscription privilege;
(2) to subscribe for shares of common stock until your basic
subscription privilege has been fully exercised;
(3) to subscribe for additional shares of common stock pursuant to the
over-subscription privilege (subject to any applicable proration). Any
excess payment remaining after the foregoing allocation will be returned to
you as soon as practicable by mail, without interest or deduction.
REGULATORY LIMITATION
We will not be required to issue to you shares of common stock pursuant to
the rights offering if, in our opinion, you would be required to obtain prior
clearance or approval from any state or federal regulatory authorities to own or
control such shares if, at the time the subscription rights expire, you have not
obtained such clearance or approval.
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<PAGE> 21
OUR DECISION BINDING
All questions concerning the timeliness, validity, form and eligibility of
any exercise of subscription rights will be determined by us, and our
determinations will be final and binding. In our sole discretion, we may waive
any defect or irregularity, or permit a defect or irregularity to be corrected
within such time as we may determine, or reject the purported exercise of any
subscription right by reason of any defect or irregularity in such exercise.
Subscriptions will not be deemed to have been received or accepted until all
irregularities have been waived or cured within such time as we determine in our
sole discretion. Neither United States Lime & Minerals nor the Subscription
Agent will be under any duty to notify you of any defect or irregularity in
connection with the submission of a subscription certificate or incur any
liability for failure to give such notification.
NO REVOCATION
Once you have exercised your basic subscription privilege or
over-subscription privilege, YOU MAY NOT REVOKE THAT EXERCISE EVEN IF THE
SUBSCRIPTION PERIOD HAS NOT YET ENDED. You should not exercise your subscription
rights unless you are certain that you wish to purchase additional shares of
common stock at the subscription price of $5.50 per share.
SHARES OF COMMON STOCK OUTSTANDING AFTER THE RIGHTS OFFERING
Assuming we issue all of the shares of common stock offered in the rights
offering, approximately 5,799,845 shares of common stock will be issued and
outstanding. This would represent a 46% increase in the number of outstanding
shares of common stock. IF YOU DO NOT FULLY EXERCISE YOUR BASIC SUBSCRIPTION
PRIVILEGE BUT OTHERS DO, THE PERCENTAGE OF COMMON STOCK THAT YOU HOLD WILL
DECREASE.
CAPITALIZATION TABLE
The following table sets forth our cash and cash equivalents, current
installments of long-term debt and revolving credit facility, long-term debt,
excluding current installments and revolving credit facility, and stockholders'
equity as of September 30, 2000, and as adjusted to reflect the anticipated
$10,000,000 gross proceeds from the Rights Offering, as if the Rights Offering
had closed as of September 30, 2000. You should read this table in conjunction
with our consolidated financial statements and the notes thereto which are
incorporated by reference into this prospectus.
<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, 2000
(UNAUDITED)
------------------------
AS
ACTUAL ADJUSTED
-------- ------------
(IN THOUSANDS)
<S> <C> <C>
Cash and cash equivalents................................... 2,186 12,186
Current installments of long-term debt and revolving credit
facility.................................................. 3,333 3,333
Long-term debt, excluding current installments and revolving
credit facility........................................... 45,000 45,000
Stockholders' equity:
Common stock.............................................. 529 711
Additional paid-in capital................................ 14,819 24,637
Retained earnings......................................... 27,780 27,780
Less treasury stock at cost:
1,312,401 shares of common stock.......................... (13,927) (13,927)
Total stockholders' equity.................................. 29,201 39,201
======= =======
Debt Ratio (debt : debt plus total equity).................. 62.3% 55.2%
</TABLE>
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<PAGE> 22
FEES AND EXPENSES
We will pay all fees charged by the Subscription Agent and the Information
Agent. You are responsible for paying any other commissions, fees, taxes or
other expenses incurred in connection with the exercise of the subscription
rights. Neither United States Lime & Minerals, the Subscription Agent nor the
Information Agent will pay such expenses.
SUBSCRIPTION AGENT
We have appointed Computershare Trust Company of New York as Subscription
Agent for the rights offering.
The Subscription Agent's address for packages sent by hand or overnight
delivery is:
Computershare Trust Company of New York
88 Pine Street, 19th Floor
New York, New York 10005.
The Subscription Agent's address for packages sent by mail is:
Computershare Trust Company of New York
Wall Street Station
P.O. Box 1023
New York, New York 10268-1023
The Subscription Agent's telephone number is (212) 701-7624 and its
facsimile number is (212) 701-7636. You should deliver your subscription
certificate, payment of the subscription price and notice of guaranteed delivery
(if any) to the Subscription Agent. We will pay the fees and certain expenses of
the Subscription Agent, which we estimate will total $25,000. Under certain
circumstances, we may indemnify the Subscription Agent from certain liabilities
that may arise in connection with the rights offering.
INFORMATION AGENT
We have appointed Corporate Investor Communications, Inc. as Information
Agent for the rights offering. The Information Agent will be responsible for
delivery of rights offering materials to certain nominee holders. The
Information Agent will also operate a toll free telephone number to answer
questions from shareholders relating to the rights offering. The Information
Agent may be contacted toll free by telephone at (866) 745-6678.
We will pay the fees and certain expenses of the Information Agent, which
we estimate will total $10,000. Under certain circumstances, we may indemnify
the Information Agent from certain liabilities that may arise in connection with
the rights offering.
IMPORTANT
PLEASE CAREFULLY READ THE INSTRUCTIONS ACCOMPANYING THE SUBSCRIPTION
CERTIFICATE AND FOLLOW THOSE INSTRUCTIONS IN DETAIL. DO NOT SEND SUBSCRIPTION
CERTIFICATES DIRECTLY TO US. YOU ARE RESPONSIBLE FOR CHOOSING THE PAYMENT AND
DELIVERY METHOD FOR YOUR SUBSCRIPTION CERTIFICATE, AND YOU BEAR THE RISKS
ASSOCIATED WITH SUCH DELIVERY. IF YOU CHOOSE TO DELIVER YOUR SUBSCRIPTION
CERTIFICATE AND PAYMENT BY MAIL, WE RECOMMEND THAT YOU USE REGISTERED MAIL,
PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED. WE ALSO RECOMMEND THAT YOU
ALLOW A SUFFICIENT NUMBER OF DAYS TO ENSURE DELIVERY TO THE SUBSCRIPTION AGENT
AND CLEARANCE OF PAYMENT PRIOR TO FEBRUARY 5, 2001. BECAUSE UNCERTIFIED PERSONAL
CHECKS MAY TAKE AT LEAST FIVE BUSINESS DAYS TO CLEAR, WE STRONGLY URGE YOU TO
PAY, OR ARRANGE FOR PAYMENT, BY MEANS OF CERTIFIED OR CASHIER'S CHECK OR MONEY
ORDER.
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<PAGE> 23
IF YOU HAVE QUESTIONS
If you have questions or need assistance concerning the procedure for
exercising subscription rights, or if you would like additional copies of this
prospectus, the Instructions, or the Notice of Guaranteed Delivery, you should
contact:
Corporate Investor Communications, Inc.
Toll Free Telephone: (866) 745-6678
or
United States Lime & Minerals, Inc.
13800 Montfort Drive, Suite 330
Dallas, Texas 75240
Attention: Larry T. Ohms, Vice President of Finance,
Corporate Controller and Secretary
Telephone: (972) 991-8400
DESCRIPTION OF COMMON STOCK
As a holder of common stock, you are entitled to one vote for each share
held of record on all matters submitted to a vote of our shareholders. You are
entitled to receive dividends, if any, declared by our Board of Directors. If we
liquidate United States Lime & Minerals you will be entitled to share ratably
with the other shareholders in the distribution of all assets that we have left
after we pay all of our liabilities and make any necessary distributions to
holders of our preferred stock. You have no preemptive rights to subscribe for
additional shares of common stock and no right to convert your common stock into
any other securities. In addition, you do not have the benefit of a sinking fund
for your shares of common stock. Your common stock is not redeemable by United
States Lime & Minerals.
USE OF PROCEEDS
We estimate that we will receive net proceeds of approximately $9,659,810
in the rights offering, assuming that all subscription rights are exercised
(which cannot be assured) at a subscription price of $5.50 per share, and after
deducting expenses of the rights offering of approximately $340,190. We intend
to use the net proceeds of the rights offering to repay short-term borrowings
which currently consist of the $5,000,000 bridge loan provided to us by Inberdon
on December 27, 2000 and $4,000,000 under our revolving credit facility. The
bridge loan bears interest at the rate of 9.75% and matures on March 31, 2001.
We intend to pay the bridge loan promptly upon the closing of the rights
offering; however, if the bridge loan is not paid at maturity, the rate of
interest will increase to 11.75% and will be payable on demand. We plan to use
the proceeds of the bridge loan to pay $4,000,000 in increased costs of the
completion of the Phase I project in Arkansas, to pay $500,000 in increased
capital costs in completing the pulverized limestone production line in Texas
and for other capital expenditures. The revolving credit facility bears interest
at the rate of LIBOR plus 1.40%, which rate is subject to increase under certain
circumstances, and expires on April 20, 2001. We intend to use the balance of
the proceeds for capital expenditures and general corporate purposes. If we
receive proceeds of less than $9,000,000, we intend to promptly and fully repay
the bridge loan and will partially repay the amount borrowed under our revolving
credit facility.
DETERMINATION OF OFFERING PRICE
Our Board of Directors, excluding the director affiliated with Inberdon,
set all of the terms and conditions of the rights offering, including the
subscription price. The Board of Directors advised Inberdon of its determination
of the subscription price to confirm Inberdon's willingness to pay an above
market price for shares in the rights offering. The $5.50 subscription price was
based on the historical trading prices of our common stock, our book value per
share, and Inberdon's willingness to pay an above market price. The subscription
price does not necessarily bear any relationship to our past or expected future
results of operations, cash flows, current financial condition, or any other
established criteria for value. You
20
<PAGE> 24
should not consider the subscription price as an indication of the value of
United States Lime & Minerals or our common stock.
PLAN OF DISTRIBUTION
On or about December 27, 2000, we will distribute the subscription rights
and copies of this prospectus to all holders of record of our common stock on
December 26, 2000, except in the case of shares held through our Plan, in which
case the distribution will be made directly to the beneficial owners of common
stock held by the Plan on the record date. If you wish to exercise your
subscription rights and purchase shares of common stock, you should complete the
subscription certificate and return it, with payment for the shares, to the
Subscription Agent, Computershare Trust Company of New York, at the address on
page 19. See "The Rights Offering -- Exercise of Subscription Rights." If you
have any questions, you should contact Corporate Investor Communications, Inc.
or our Vice President of Finance, Company Secretary and Corporate Controller,
Larry T. Ohms, at the telephone numbers and address on page 20.
FEDERAL INCOME TAX CONSIDERATIONS
The following summarizes the material federal income tax considerations of
the rights offering to you and United States Lime & Minerals. This summary is
based on current tax law, which is subject to change at any time, possibly with
retroactive effect. This summary is not a complete discussion of all federal
income tax consequences of the rights offering, and, in particular, may not
address federal income tax consequences applicable to shareholders subject to
special treatment under federal income tax law. In addition, this summary does
not address the tax consequences of the rights offering under applicable state,
local or foreign tax laws. This discussion assumes that your shares of common
stock and the subscription rights and shares issued to you during the rights
offering constitute capital assets.
Receipt and exercise of the subscription rights distributed pursuant to the
rights offering is intended to be nontaxable to shareholders, and the following
summary assumes you will qualify for such nontaxable treatment. If, however, the
rights offering does not qualify as nontaxable, you would be treated as
receiving a taxable distribution equal to the fair market value of the
subscription rights on their distribution date. The distribution would be taxed
as a dividend to the extent made out of United States Lime & Minerals' current
or accumulated earnings and profits; any excess would be treated first as a
return of your basis (investment) in your United States Lime & Minerals stock
and then as a capital gain. Expiration of the subscription rights would result
in a capital loss.
THIS DISCUSSION IS INCLUDED FOR YOUR GENERAL INFORMATION ONLY. YOU SHOULD
CONSULT YOUR TAX ADVISOR TO DETERMINE THE TAX CONSEQUENCES TO YOU OF THE RIGHTS
OFFERING IN LIGHT OF YOUR PARTICULAR CIRCUMSTANCES, INCLUDING ANY STATE, LOCAL
AND FOREIGN TAX CONSEQUENCES.
TAXATION OF SHAREHOLDERS
Receipt of a subscription right. You will not recognize any gain or other
income upon receipt of a subscription right.
Tax basis and holding period of subscription rights. Your tax basis in
each subscription right will effectively depend on whether you exercise the
subscription right or allow the subscription right to expire.
If you exercise a subscription right, your tax basis in the subscription
right will be determined by allocating the tax basis of your common stock on
which the subscription right is distributed between the common stock and the
subscription right, in proportion to their relative fair market values on the
date of distribution of the subscription right. However, if the fair market
value of your subscription rights is less than 15 percent of the fair market
value of your existing shares of common stock, then the tax basis of each
subscription right will be deemed to be zero, unless you elect, by attaching an
election statement to your federal income tax return for 2000, to allocate tax
basis to your subscription rights.
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<PAGE> 25
If you allow a subscription right to expire, it will be treated as having
no tax basis. Your holding period for a subscription right will include your
holding period for the shares of common stock upon which the subscription right
is issued.
Expiration of subscription rights. You will not recognize any loss upon
the expiration of a subscription right.
Exercise of subscription rights. You generally will not recognize a gain
or loss on the exercise of a subscription right. The tax basis of any share of
common stock that you purchase through the rights offering will be equal to the
sum of your tax basis (if any) in the subscription right exercised and the price
paid for the share. The holding period of the shares of common stock purchased
through the rights offering will begin on the date that you exercise your
subscription rights.
TAXATION OF UNITED STATES LIME & MINERALS
We will not recognize any gain, other income or loss upon the issuance of
the subscription rights, the lapse of the subscription rights, or the receipt of
payment for shares of common stock upon exercise of the subscription rights.
STATE AND FOREIGN SECURITIES LAWS
The rights offering is not being made in any state or other jurisdiction in
which it is unlawful to do so. We may delay the commencement of the rights
offering in certain states or other jurisdictions in order to comply with the
securities law requirements of such states or other jurisdictions. In our sole
discretion, we may decline to make modifications to the terms of the rights
offering requested by certain states or other jurisdictions, in which case
shareholders who live in those states or jurisdictions will not be eligible to
participate in the rights offering.
LEGAL MATTERS
The validity of the shares of common stock offered by this prospectus will
be passed upon for us by Morgan, Lewis & Bockius LLP, Washington, D.C.
EXPERTS
Our consolidated financial statements incorporated by reference from our
Annual Report (Form 10-K) for the year ended December 31, 1999, have been
audited by Ernst & Young LLP, independent auditors, as set forth in their report
thereon included therein and incorporated by reference into this prospectus.
Such consolidated financial statements are incorporated by reference into this
prospectus in reliance upon such report given on the authority of such firm as
experts in accounting and auditing.
IF YOU WOULD LIKE MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy this information at the SEC's
public reference rooms, which are located at:
450 Fifth Street, NW
Washington, DC 20549
7 World Trade Center, Suite 1300
New York, NY 10048
500 West Madison Street, Suite 1400
Chicago, IL 60661
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<PAGE> 26
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. This information is also available online through the SEC's
Electronic Data Gathering, Analysis, and Retrieval System (EDGAR), located on
the SEC's web site (http://www.sec.gov).
Also, we will provide (free of charge) any of our documents filed with the
SEC, as you reasonably may request. To get your free copies, please call or
write to:
Larry T. Ohms
Vice President of Finance,
Secretary and Corporate Controller
United States Lime & Mineral, Inc.
13800 Montfort Drive, Suite 330
Dallas, Texas 75240
(972) 991-8400
The SEC allows us to "incorporate by reference" the information we have
filed with them, which means that we can disclose important information to you
by referring you to other documents. The documents that are incorporated by
reference are legally considered to be a part of this prospectus. The documents
incorporated by reference are:
(1) our Quarterly Report on Form 10-Q for the period ended September
30, 2000, our Quarterly Report on Form 10-Q for the period ended June 30,
2000 and our Quarterly Report on Form 10-Q for the period ended March 31,
2000;
(2) our Definitive Proxy Statement on Schedule 14A filed March 20,
2000;
(3) our Annual Report on Form 10-K for the year ended December 31,
1999; and
(4) any filings with the SEC pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act of 1934 between the date of this prospectus and
the expiration of the rights offering.
As you read the above documents, you may find some inconsistencies in
information from one document to another. If you find inconsistencies between
the documents, or between a document and this prospectus, you should rely on the
statements made in the most recent document.
You should rely only on the information in this prospectus or incorporated
by reference. We have not authorized anyone to provide you with any different
information.
This prospectus is not an offer to sell nor is it seeking an offer to buy
these securities in any state where the offer or sale is not permitted. This
prospectus is not an offer to sell nor is it seeking an offer to buy securities
other than the shares of common stock to be issued pursuant to the rights
offering. The information contained in this prospectus is correct only as of the
date of this prospectus, regardless of the time of the delivery of this
prospectus or any sale of these securities.
No action is being taken in any jurisdiction outside the United States to
permit a public offering of the common stock or possession or distribution of
this prospectus in any such jurisdiction. Persons who come into possession of
this prospectus in jurisdictions outside the United States are required to
inform themselves about and to observe any restrictions as to this offering and
the distribution of this prospectus applicable in the jurisdiction.
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<PAGE> 27
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses in connection with the issuance and distribution of the
Securities, other than underwriting discounts and commissions, being registered
are set forth in the following table (all amounts other than the Registration
Fee and the Nasdaq National Market Listing Fee are estimated):
<TABLE>
<S> <C>
SEC Registration Fee........................................ $ 2,640
Nasdaq National Market Listing Fee.......................... $ 17,500
Subscription Agent Fees and Expenses........................ $ 25,000
Information Agent Fees and Expenses......................... $ 10,000
Legal Fees and Expenses..................................... $200,000
Blue Sky Fees and Expenses.................................. $ 50
Accounting Fees and Expenses................................ $ 20,000
Printing Expenses........................................... $ 40,000
Miscellaneous Costs......................................... $ 25,000
Total............................................. $340,190
</TABLE>
All expenses in connection with the issuance and distribution of the
securities being offered shall be borne by us.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 2.02-1 of the Texas Business Corporation Act, as amended,
authorizes us to indemnify our officers and directors and certain other persons
in certain instances.
In addition, Section 2.02-1 and our Bylaws require that we indemnify any
director or officer against reasonable expenses he incurs in connection with a
wholly successful defense of a proceeding in which he is a named defendant or
respondent because he is or was a director or officer. This indemnification will
only occur with the determination that the person (i) conducted himself in good
faith, (ii) reasonably believed, in the case of conduct in his official capacity
as our director or officer, that his conduct was in our best interests and, in
all other cases, that his conduct was at least not opposed to our best
interests, and (iii), in the case of any criminal proceeding, had no reasonable
cause to believe his conduct was unlawful. However, if the director or officer
is found liable to us or is found liable on the basis that personal benefit was
improperly received, the indemnification shall be limited to reasonable expenses
actually incurred in connection with the proceeding. Indemnification shall not
be made in respect of any proceeding in which the person shall have been found
liable for willful or intentional misconduct in the performance of his duty to
us.
The Bylaws generally require determinations that the person to be
indemnified has satisfied the prescribed conduct and belief standards, as
determined by directors who are not themselves then named defendants or
respondents in the proceeding, by a special legal counsel selected by the Board
of Directors or a committee thereof, or by shareholders in a vote that excludes
the shares held by directors and officers who are named defendants or
respondents in the proceeding.
The Bylaws further require us to pay or reimburse expenses incurred by a
director or officer in connection with his appearance as a witness or other
participation in a proceeding at a time when he is not a named defendant or
respondent in the proceeding. We must also advance reasonable expenses to a
director or officer upon receipt of a good faith affirmation by him that he has
met the standard of conduct necessary for indemnification and a written
undertaking to repay such advances if it is ultimately determined that he has
not met those requirements.
The Bylaws permit us to indemnify and advance expenses to an officer,
employee, or agent to such further extent as may be consistent with law,
including persons serving another entity in various capacities
II-1
<PAGE> 28
at our request. The Bylaws also authorize us to purchase and maintain insurance
or make other arrangements on behalf of directors, officers, employees, and
agents against or in respect of liabilities.
Any indemnification of or advance of expenses to a director under the
Bylaws or any statute must be reported in writing to shareholders not later than
the notice of the next shareholders' meeting or the next submission to
shareholders of a consent to action without a meeting and, in any event, within
the 12-month period immediately following the indemnification or advance.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
5.1 Opinion of Morgan, Lewis & Bockius LLP
23.1 Consent of Morgan, Lewis & Bockius LLP (included in Exhibit
5.1)
23.2 Consent of Ernst & Young LLP
24.1 Power of Attorney (included on signature page)
99.1 Subscription Certificate
99.2 Instructions for Use of United States Lime & Minerals, Inc.
Subscription Certificates
99.3 Notice of Guaranteed Delivery
99.4 Letter to Shareholders
99.5 Letter to Brokers
99.6 Letter to Clients of Nominee Holders
99.7 Beneficial Owner Election Form
99.8 Nominee Holder Certification
99.9 Form of Subscription Agent Agreement
</TABLE>
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement; and
(iii) To include any additional or changed material information with
respect to the plan of distribution not previously disclosed in the
registration statement or any material change to such information in the
registration statement;
II-2
<PAGE> 29
Provided, however, paragraphs (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act of
1934, as amended, that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(4) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to section
13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
section 15(d) of the Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-3
<PAGE> 30
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant, United States Lime & Minerals, Inc., certifies that it has
reasonable grounds to believe that it meets all of the requirements for filing
on Form S-3 and has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on this 22nd day of December, 2000.
UNITED STATES LIME & MINERALS, INC.
By: /s/ TIMOTHY W. BYRNE
----------------------------------
Timothy W. Byrne
President and Chief Executive
Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby appoints Timothy W. Byrne
and/or Larry T. Ohms his true and lawful attorney-in-fact with the authority to
execute in the name of each such person, and to file with the Securities and
Exchange Commission, together with any exhibits thereto and other documents
therewith, any and all amendments (including without limitation post-effective
amendments) to this registration statement necessary or advisable to enable the
Registrant to comply with the Securities Act of 1933, as amended, and any rules,
regulations and requirements of the Securities and Exchange Commission in
respect thereof, which amendments may make such other changes in the
registration statement as the aforesaid attorney-in-fact executing the same
deems appropriate.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ TIMOTHY W. BYRNE President, Chief Executive December 22, 2000
----------------------------------------------------- Officer and Director
Timothy W. Byrne (Principal Executive
Officer)
/s/ LARRY T. OHMS Vice President of Finance, December 22, 2000
----------------------------------------------------- Company Secretary and
Larry T. Ohms Corporate Controller
(Principal Financial and
Accounting Officer)
* Director and Chairman of the December 22, 2000
----------------------------------------------------- Board
Edward A. Odishaw
* Director and Vice Chairman December 22, 2000
----------------------------------------------------- of the Board
Antoine M. Doumet
* Director December 22, 2000
-----------------------------------------------------
John J. Brown
</TABLE>
II-4
<PAGE> 31
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* Director December 22, 2000
-----------------------------------------------------
Wallace G. Irmscher
* Director December 22, 2000
-----------------------------------------------------
Richard W. Cardin
---------------
*By Larry T. Ohms, Attorney-in-Fact
/s/ LARRY T. OHMS
-----------------------------------------------------
Larry T. Ohms
</TABLE>
II-5
<PAGE> 32
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
5.1 Opinion of Morgan, Lewis & Bockius LLP
23.1 Consent of Morgan, Lewis & Bockius LLP (included in Exhibit
5.1)
23.2 Consent of Ernst & Young LLP
24.1 Power of Attorney (included on signature page)
99.1 Subscription Certificate
99.2 Instructions for Use of United States Lime & Minerals, Inc.
Subscription Certificates
99.3 Notice of Guaranteed Delivery
99.4 Letter to Shareholders
99.5 Letter to Brokers
99.6 Letter to Clients of Nominee Holders
99.7 Beneficial Owner Election Form
99.8 Nominee Holder Certification
99.9 Form of Subscription Agent Agreement
</TABLE>
