GIANT CEMENT HOLDING, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 11, 1999
To the Stockholders of
GIANT CEMENT HOLDING, INC.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of GIANT CEMENT HOLDING, INC. (the "Company") will be held at the
offices of Proskauer Rose LLP, 1585 Broadway, 17th Floor, New York, New York, on
May 11, 1999, at 10:00 a.m. (local time).
The meeting will be held for the following purposes:
(1) To elect six directors.
(2) To ratify the appointment of PricewaterhouseCoopers L.L.P.
as the Company's independent
auditors for fiscal 1999.
(3) To transact such other business as may properly come before
the Meeting and any adjournment or adjournments thereof.
A Proxy Statement describing matters to be considered at the Meeting is
attached to this Notice. Only stockholders of record at the close of business on
March 15, 1999, will be entitled to notice of and to vote at the Meeting.
You are cordially invited to attend the Meeting.
By Order of the Board of Directors
TERRY L. KINDER
Secretary
Summerville, South Carolina
March 30, 1999
IMPORTANT
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE MARK, DATE AND
SIGN THE ENCLOSED PROXY AND RETURN IT IN THE SELF-ADDRESSED, POSTAGE PREPAID
ENVELOPE WHICH HAS BEEN PROVIDED FOR YOUR CONVENIENCE. IN THE EVENT YOU ATTEND
THE MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE YOUR SHARES IN PERSON.
<PAGE>
GIANT CEMENT HOLDING, INC.
320-D Midland Parkway
Summerville, South Carolina 29485
---------------------
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 11, 1999
---------------------
GENERAL
This Proxy Statement and the accompanying proxy card are furnished in
connection with the solicitation of proxies by the Board of Directors of Giant
Cement Holding, Inc., a Delaware corporation (the "Company"), for use at the
1999 Annual Meeting of Stockholders (the "Meeting"), and any adjournments
thereof. The Meeting is to be held on Tuesday, May 11, 1999, at 10:00 a.m.
(local time) at the offices of Proskauer Rose LLP, 1585 Broadway, 23rd Floor,
New York, New York. The approximate date of mailing this Proxy Statement and
accompanying proxy card to the Company's stockholders is April 14, 1999.
In an effort to have as large a representation at the Meeting as
possible, proxy solicitations may be made personally or by telephone or telegram
by officers or employees of the Company, without added compensation, or by The
Financial Relations Board, Inc., the Company's investor relations firm, which
will not receive a separate fee for any such solicitations. The Company will
bear the entire cost of soliciting proxies hereunder and will reimburse brokers,
banks and other custodians, nominees and fiduciaries for their expense in
sending proxy materials to beneficial owners.
RECORD DATE AND VOTING SECURITIES
Only stockholders of record at the close of business on March 15, 1999
(the "Record Date") will be entitled to vote at the Meeting. As of the Record
Date, the Company had outstanding 9,081,167 shares of common stock, par value
$.01 per share (the "Common Stock"). Each share of Common Stock entitles the
record holder thereof to one vote on all matters properly coming before the
Meeting.
<PAGE>
PRINCIPAL HOLDERS
The following table lists the persons who, to the knowledge of
management of the Company, based upon filings with the Securities and Exchange
Commission, are the beneficial owners of more than 5% of the outstanding shares
of Common Stock:
Name and Address Shares of Common Percent of Class
of Beneficial Owner Stock (a)
FMR Corp. ("FMR") 1,396,300(b) 15.4%
One Financial Center
Boston, MA 02111
The Prudential Insurance Company of America 1,137,600(c) 12.5%
("Prudential")
751 Broad Street
Newark, NJ 07102-3777
T. Rowe Price Associates 887,800(d) 9.8%
100 E. Pratt Street
Baltimore, MD 21202
Bankers Trust Corporation 465,100(e) 5.1%
130 Liberty Street
New York, NY 10006
(a) Under the rules of the Securities and Exchange Commission (the "SEC"), a
person is deemed to be the beneficial owner of a security if such person
has or shares the power to vote or to direct the voting of such security,
or the power to dispose, or to direct the disposition, of such security. A
person is also deemed to be the beneficial owner of any securities of which
that person has the right to acquire ownership within 60 days and,
generally any securities owned by such person's spouse, children or other
relative living in the same house. Unless otherwise indicated, the named
persons having sole voting and investment power with respect to the shares
held by them.
(b) According to a Schedule 13G filed with the SEC by FMR, FMR, in its capacity
as a parent holding company may be deemed to be the beneficial owner of
these shares, which are owned by various subsidiaries including: (i)
851,100 shares deemed beneficially owned by Fidelity Management & Research
Company, an investment advisor to various investment companies including
Fidelity Low Priced Stock Fund (587,100 shares) (ii) 533,700 shares deemed
beneficially owned by Fidelity Management Trust Company and (iii) 34,700
shares deemed beneficially owned by Fidelity International Limited. Edward
C. Johnson 3d, and FMR Corp., through its control of Fidelity and the
funds, each has sole power to dispose of the 827,900 shares owned by the
funds.
(c) According to a Schedule 13G filed with the SEC by Prudential, the shares
shown as owned by Prudential are held for the benefit of Prudential's
clients and over which Prudential may have direct or indirect voting and/or
investment discretion.
(d) According to a Schedule 13G filed with the SEC by T. Rowe Price, these
securities are owned by various individual and institutional investors
including T. Rowe Price Small Cap Value Fund, Inc. (which owns 750,000
shares, representing 8.2% of the shares outstanding), which T. Rowe Price
Associates, Inc. (Price Associates) serves as investment advisor with power
to direct investments and/or sole power to vote the securities. For
purposes of the reporting requirements of the Securities Exchange Act of
1934, Price Associates is deemed to be a beneficial owner of such
securities; however, Price Associates expressly disclaims that it is, in
fact, the beneficial owner of such securities.
(e) According to a Schedule 13G filed with the SEC by Bankers Trust
Corporation, Bankers Trust Corporation, in its capacity as a parent holding
company may be deemed to be the beneficial owner of these shares, which are
owned by various subsidiaries including: (i) 443,000 deemed beneficially
owned by BT Holdings (New York) (ii) 21,400 shares deemed beneficially
owned by Bankers Trust Company and (iii) 700 shares deemed beneficially
owned by BT Alex. Brown.
2
<PAGE>
STOCK OWNERSHIP OF MANAGEMENT
The following table sets forth certain information concerning the
beneficial ownership of Common Stock as of the record date of each director of
the Company, each executive officer of the Company named in the Summary
Compensation Table below and all directors and executive officers as a group.
Name Shares of Common Stock (1) Percent of Class
---- -------------------------- ----------------
Gary L. Pechota 256,235(2) 2.8%
Terry L. Kinder 171,856(3) 1.9%
Dean M. Boylan 52,500(4) *
Edward Brodsky 37,500(5) *
Robert L. Jones 40,500(6) *
John Roberts 106,568(7) 1.2%
Richard A. Familia 16,934(8) *
All Directors and Executive 682,093(9) 7.5%
Officers as a group (seven) persons)
- -------------
*Indicates less than one percent
(1) Unless otherwise indicated, the beneficial owner has both sole voting and
sole investment power with respect to his shares.
(2) Includes 235,000 shares that Mr. Pechota may purchase under presently
exercisable stock options.
(3) Includes 167,500 shares that Mr. Kinder may purchase under presently
exercisable stock options.
(4) Includes 37,500 shares that Mr. Boylan may purchase under presently
exercisable stock options. Does not include 1,000 shares of Common Stock
owned by Mr. Boylan's spouse, as to which shares he disclaims beneficial
ownership.
(5) Represents 37,500 shares that Mr. Brodsky may purchase under presently
exercisable stock options. Does not include 2,000 shares of Common Stock
owned by Mr. Brodsky's spouse, as to which shares Mr. Brodsky disclaims
beneficial ownership.
(6) Includes 37,500 shares that Mr. Jones may purchase under presently
exercisable stock options.
(7) Includes 10,000 shares that Mr. Roberts may purchase under presently
exercisable stock options. Does not include shares owned by Mr. Roberts
spouse and adult children, to which he disclaims beneficial ownership. Does
not include approximately 37,500 shares contingently issuable to Mr.
Roberts or his family under the terms of the Escrow Agreement and the
Indemnity Escrow Agreement between the Company and Solite Corporation.
(8) Includes 16,333 shares that Mr. Familia may purchase under presently
exercisable stock options.
(9) See Notes (2) through (8) above. This total includes 541,333 shares which
such executive officers and directors may acquire upon the exercise of
stock options (See "Compensation of Directors"; "Executive Compensation -
Stock Options").
ELECTION OF DIRECTORS
At the Meeting, six directors are to be elected to serve until the next
Annual Meeting of Stockholders and until their successors are elected and
qualified.
The Board of Directors has no reason to expect that any of the nominees
will be unable to stand for election. In the event that a vacancy among the
original nominees occurs prior to the Meeting, the proxies will be voted for a
substitute nominee or nominees named by the Board of Directors and for the
remaining original Nominees.
3
<PAGE>
Nominees
GARY L. PECHOTA (49) has served as Chairman, President, Chief
Executive Officer and a director of the Company since its inception in
April 1994. Mr. Pechota also has served as President of Giant Cement Company
("Giant") since January 1993, and as President of Keystone Cement Company
("Keystone") since May 1992. Prior to joining Keystone, Mr. Pechota served as
President and Chief Executive Officer of Dacotah Cement Company, a state-owned
cement company, from January 1982 to May 1992. Mr. Pechota has been employed in
the cement industry for over 16 years. Since 1998, he has been a director of
Insteel Industries, Inc. (NYSE: III).
TERRY L. KINDER (40) has served as Vice President, Chief Financial
Officer, Secretary, Treasurer and a director of the Company since April
1994 and a director of Giant, Keystone and GRR since June 1989. Mr. Kinder has
also served as Vice President, Secretary and Treasurer of Giant Group Ltd.
("GROUP") from June 1986 to September 1994. From June 1989 to December 1992, Mr.
Kinder also served as President of Giant, and from June 1989 to August 1992, he
served as President of Keystone. Prior to joining GROUP, Mr. Kinder was a
Certified Public Accountant with Coopers & Lybrand L.L.P. from January 1980 to
June 1986.
DEAN M. BOYLAN (72) has been a director of the Company since April
1994. He served as a director of GROUP from 1985 to September 1994 and was a
director of Keystone from 1976 until January 1985 when it was acquired by GROUP.
Mr. Boylan has been an employee and a director of Boston Sand & Gravel Company,
Inc., a publicly-held company since prior to 1985 and is presently Vice
Chairman.
EDWARD BRODSKY (69) has been a director of the Company since April
1994. He served as a director of GROUP from 1986 to September 1994. Mr. Brodsky
has been a partner at the law firm of Proskauer Rose LLP, New York, New York,
which renders legal services to the Company, since August 1992. Prior thereto,
he was a partner at the law firm of Spengler Carlson Gubar Brodsky & Frischling,
New York, New York, from 1977 to August 1992.
ROBERT L. JONES (62) has been a director of the Company since April
1994. He served as a director of GROUP from 1984 to September 1994. Mr.
Jones has been the Chairman of Davidson-Jones-Beers since February 1995 and
prior thereto was the President of Davidson & Jones Corporation - a predecessor
holding company located in Raleigh, North Carolina, engaged in general
contracting and real estate activities - since prior to 1986. Sinces 1990, he
has been a director of Carolina Power & Light Company (New York Stock Exchange).
JOHN W. ROBERTS (81) has been a director of the Company since May
1998. Mr. Roberts was the founder, and served as Chairman, President and
Chief Executive Officer of Solite Corporation for more than 50 years prior to
its acquisition by the Company in April 1998.
Information About the Board of Directors and Committees of the Board
During 1998, the Board of Directors of the Company held five meetings.
Each of the directors attended at least 75% of the meetings of the Board of
Directors and the meetings held by all committees of the Board on which he
served.
The Company has a standing Compensation and Stock Option Committee and
Audit Committee. The members of each committee are appointed by the Board of
Directors to serve until their respective successors are elected and qualified.
The Audit Committee annually reviews the qualifications of the
Company's independent certified public accountants, makes recommendations to the
Board of Directors as to the selection of such accountants, reviews the plan,
fees and results of the audits performed by such accountants, receives reports
from them and meets with their representatives for purposes of reviewing and
considering questions relating to their examinations and reports and reviews,
either directly or through such accountants, the internal control and accounting
procedures of the Company. The members of the Audit Committee are Messrs.
Boylan, Brodsky and Jones. The Audit Committee held one meeting during 1998.
The Compensation and Stock Option Committee, which met twice during
1998, has responsibility for determining the executive compensation and benefit
policies and procedures of the Company, administers the Company's 1994 Employee
Stock Option Plan. The members of the Compensation and Stock Option Committee
are Messrs. Boylan, Brodsky and Jones.
There is no standing nominating committee or other committee performing
similar functions.
4
<PAGE>
Compensation of Directors
Under the 1994 Directors Stock Option Plan as amended, each
non-employee director currently receives an annual grant of options to purchase
10,000 shares of Common Stock. No additional consideration is paid to directors
for serving on the Board, meetings or committee participation. The options vest
50% on the date of grant and 50% on the first anniversary of that date and
expire five years after the date of grant.
EXECUTIVE COMPENSATION
The following table sets forth the compensation for the fiscal years
ended December 31, 1996, 1997 and 1998 awarded to or earned by the Chief
Executive Officer of the Company and the other executive officers of the Company
whose salary and bonus exceeded $100,000 (the "Named Executive Officers") for
services rendered in all capacities.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Other
Annual
Compensa- Restricted Securities Other
tion Stock Op- Underlying LTIP Compen-
Name and Principal Award(s) tions/SARs Options/SARs Payouts sation
Position Year Salary ($) Bonus ($) ($) (1) (#) (#) ($) ($)(2)
-------- ---- ---------- --------- ------- --- --- --- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gary L. Pechota, 1998 286,000 190,000 50,000 - 34,593
Chairman of the Board, 1997 275,000 180,000 - - 40,000 - 38,922
President and Chief 1996 260,000 160,000 - - 20,000 - 37,514
Executive Officer
Terry L. Kinder, 1998 171,600 100,000 35,000 - 22,560
Vice President, 1997 165,000 95,000 - - 30,000 - 25,681
Chief Financial Officer 1996 156,000 80,000 - - 10,000 - 28,314
and Treasurer
Rich Familia, 1998 137,000 19,250 - 5,000 - 12,697
Vice President of 1997 118,000 18,000 - - 3,500 - 14,584
Environmental Affairs 1996 112,300 16,500 - 2,000 - 15,333
</TABLE>
(1) The Named Executive Officers did not receive any annual compensation not
properly categorized as salary or bonus, except for certain perquisites and
other personal benefits which are not shown because the aggregate amount of
such compensation, if any, for each of the Named Executive Officers during
such fiscal year did not exceed the lesser of $50,000 or 10% of total
salary and bonus reported for such executive officer.
(2) Represents amounts contributed by the Company to the Named Executive
Officers pursuant to the Company's Profit Sharing Plans and Special
Retirement Agreements (See Employment Agreements).
STOCK OPTIONS
The following table contains information concerning the grant of stock
options to the Chief Executive Officer of the Company and the Named Executive
Officers for 1998.
Option Grants in Last Fiscal Year
Options % of Exercise Expiration Potential Value (3)
Name Granted Total Price Date(2) 5% 10%
---- ------- ----- ----- ------- -- ---
Gary L. Pechota 50,000 27.5 22.13 2/02/03 $ 306,000 $ 676,000
Terry L. Kinder 35,000 19.2 22.13 2/02/03 $ 214,000 $ 473,000
Richard A. Familia 5,000 2.7 22.13 2/05/18 $ 31,000 $ 68,000
All Stockholders (1) N/A N/A N/A N/A $56,193,000 $124,173,000
(1) The potential realizable gain to all stockholders (based on 9,190,767
shares outstanding at December 31, 1998, an assumed market value of $22.13
per share and assumed appreciation rates of 5% and 10%, over a period of
five years), is provided as a comparison to the potential gain realized by
the named executive officers at the same assumed rates of stock
appreciation.
(2) One-half of these options vested on February 3, 1998 and one-half vested
on February 3, 1999.
(3) Amounts reported in these columns represent amounts that may be realized
upon exercise of the options immediately prior to expiration of their term,
assuming the specified compounded rates of appreciation (5% and 10%) on the
Company's Common Stock over the term of the options. These numbers are
calculated based on the rules of the SEC and do not reflect the Company's
estimate of future stock price growth. Actual gains, if any, on stock
option exercise and Common Stock holdings are dependent on the timing of
such exercise and the future performance of the Company's Common Stock.
There can be no assurance that the rates of appreciation assumed in this
table can be achieved or that amounts reflected will be received by the
option holder.
5
<PAGE>
Option Exercises and Holdings
The following table sets forth information with respect to the Chief
Executive Officer of the Company and the Named Executive Officers concerning
unexercised options held at December 31, 1998.
Aggregate Option Exercises in Last Fiscal Year and FY-End Option Values
Number of Options Value of Unexercised
Shares Value Exercisable/ In-The-Money-Options
Name Acquired Realized Unexercisable Exercisable/Unexercisable
---- -------- -------- ------------- -------------------------
Gary L. Pechota -0- -0- 185,000/25,000 $1,748,000 $66,000
Terry L. Kinder -0- -0- 132,500/17,500 $1,243,000 $46,000
Richard A. Familia -0- -0- 14,667/3,333 $ 141,000 $ 9,000
Employment Agreements
Messrs. Pechota, Kinder and Familia are employed by the Company
pursuant to employment agreements (the "Employment Agreements"), which commenced
on July 30, 1997, except Mr. Familia's agreement which commenced on October 30,
1997, and expire December 31, 2000. Each Employment Agreement is automatically
renewed for additional one year terms subject to earlier termination by either
the Company or the respective employee. Mr. Pechota, Mr. Kinder and Mr. Familia
are compensated at an annual base salary of $275,000, $165,000 and $118,000,
respectively, during the term of their Employment Agreements, subject to annual
increases and/or bonuses as determined by the Compensation and Stock Option
Committee. Each of them has agreed not to compete with the Company for a period
of one year following the termination of his Employment Agreement other than by
the Company without cause or by the employee for good reason, as defined, or as
otherwise provided.
Commencing with fiscal year 1996, the Company's Board approved Special
Retirement Agreements ("SRA'S") for certain employees participating in the
Company's Profit Sharing Plans and salaried Retirement Plans. Pursuant to the
Internal Revenue Code, the Internal Revenue Service sets limit (currently
$160,000) on the amount of annual compensation which Plans or the employees
benefit under the Retirement Plans. The SRA's establish balances for each
participant in an amount equal to that required to provide the actuarial
equivalent benefit, as the Internal Revenue Service limitations did not apply.
Retirement Plans
The Company has two retirement plans (the "Retirement Plans") for
salaried employees under which a salaried employee (but not a director as such)
who retires at age 65 or thereafter, or an employee who retires prior to
reaching age 65 but after age 55 and who has completed ten or more years of
continuous service at retirement, may be eligible at retirement to receive
during his lifetime an annual pension equal to the sum of the following:
(a) for each eligible year beginning on or after October 1,
1989, 1-1/4% of the salaried employee's annual base wages
(subject to certain limitations) from the Company, plus
1/4% of such salary in excess of Social Security Covered
Compensation, plus
(b) for the period October 1, 1987, to October 1, 1989, 1-1/4%
of the salaried employee's annual base wages (subject to
certain limitations) from the Company, plus 1/4% of such
salary in excess of the Social Security Wage Base; plus
(c) for each eligible year beginning prior to October 1, 1987,
1-1/2% of the first $15,000 of salary and 1% of such base
wages over $15,000 (using annual rate of salary as of
October 1, 1987, for years before 1987) for each year of
service after the employee's first year of service after
the employee attains the age of 21. For the Named
Executive Officers, annual base wage would be the amount
shown as salary in the Summary Compensation Table (subject
to certain limitations). The amount of benefits payable to
each recipient is not reduced by the amount of Social
Security benefits payable to such recipient. For purposes
of illustration, pensions estimated to be payable upon
retirement at normal retirement age under the Retirement
Plans to persons in specified salary classifications are
shown in the following table:
Annual Pension Based on Specified Years of Employment
Assuming Retirement at Age 65
Current Salary (1) 10 Years 20 Years 30 Years 40 Years
------------------ -------- -------- -------- --------
$ 5,000 $ 650 $ 1,300 $ 2,000 $ 2,650
10,000 1,300 2,650 3,950 5,300
20,000 2,500 5,000 7,550 10,050
40,000 4,350 8,700 13,000 17,300
50,000 5,300 10,500 15,700 20,900
96,000 9,850 19,150 28,450 37,750
125,000 12,700 24,600 36,450 48,350
150,000 15,200 29,300 42,400 57,500
6
<PAGE>
(1) A retrospective salary scale of 6% has been assumed. Current IRS
Regulations limit eligible compensation for qualified defined benefit plans
to $160,000 per annum.
These benefits are expressed in terms of life annuities. In general,
benefits will be paid in the form of joint and 50% survivor benefits to the
employee and his or her spouse unless elections are made to the contrary.
The maximum annual pension payable under the Retirement Plans to a retired
employee is $130,000. Messrs. Pechota, Kinder and Familia have six, twelve
and six years, respectively, of credited service under the Retirement
Plans.
Compensation and Stock Option Committee Report on Executive Compensation
The Compensation and Stock Option Committee of the Board of Directors
consist of Dean M. Boylan, Edward Brodsky and Robert L. Jones. Mr. Brodsky is
a partner of the law firm of Proskauer Rose LLP, which provides legal services
to the Company.
The Compensation and Stock Option Committee is responsible for
developing and making recommendations to the Company with respect to executive
compensation policies addressing such matters as salaries, bonuses, incentive
plans, benefits and overall compensation. The Committee, subject to the terms of
his Employment Agreement, determines the compensation to be paid to the Chief
Executive Officer, and in consultation with the Chief Executive Officer,
determines compensation of each of the other executive officers of the Company.
The objectives of the Committee in determining the type and amount of
executive officer compensation are to provide a level of base compensation which
allows the Company to attract and retain competent personnel.
The only salaried executive officers of the Company are Gary Pechota,
Chief Executive Officer, Chairman of the Board and President, Terry L. Kinder,
Vice President and Chief Financial Officer, Secretary and Treasurer and Richard
Familia, Vice President of Environmental Affairs.
The Company's compensation program for executive officers consists of
three key elements: a base salary, a discretionary annual bonus and periodic
grants of stock options. The Committee believes that this approach best serves
the interests of stockholders by ensuring that executive officers are
compensated in a manner that advances both the short- and long-term interests of
stockholders. Thus, compensation for the Company's executive officers involves a
high proportion of pay which is at risk: the variable annual bonus (which
permits individual performance to be recognized on an annual basis, and which is
based, in part, on an evaluation of the contribution made by the executive
officer to Company performance) and stock options (which directly relate a
significant portion of the executive officer's long-term remuneration to stock
price appreciation realized by the Company's stockholders).
In evaluating executive officer compensation, the Compensation and
Stock Option Committee considers the executive officer's length of service to
the Company, the Company's performance, including its financial condition, net
income and net income per share, the executive officer's performance and the
range of compensation of executive officers with similar responsibilities in
comparable companies, including those companies in the peer group used to
construct the Company's stock price performance graph, but assigns no particular
weight to any of these factors.
The Chief Executive Officer's base salary is established under his
Employment Contract. The Compensation and Stock Option Committee determined the
amount of his bonus for 1998 and the number of options he has been granted based
on an evaluation of the factors described above and, with respect to the number
of options, the relationship of the number of options granted to him to the
number of options available under the Employee Plan and the number of options
granted to subordinate executive officers and other employees of the Company.
Compensation and Stock Option Committee:
Dean M. Boylan
Edward Brodsky
Robert L. Jones
7
<PAGE>
STOCK PRICE PERFORMANCE
The following graph compares the cumulative total return to
stockholders of the Company from the date its Common Stock commenced trading on
the Nasdaq Stock Market's National Market to December 31, 1998, to the
cumulative total returns on the Russell 2000 Index, the S&P 500 Index and the
securities of a Peer Group made up of Centex Construction Products, Lafarge
Corporation, Lone Star Industries, Southdown, Inc. and Texas Industries, Inc.
Based upon the Company's total market capitalization of approximately $168
million on March 15, 1999, the Company believes that the Russell 2000 Index is a
more appropriate benchmark than the S&P 500 Index, which has historically been
presented in this section of the Company's Proxy Statement. Under the rules of
the SEC, this graph is not deemed "soliciting material" and is not incorporated
by reference in any filings with the SEC under the Securities Act of 1933 or the
Securities Exchange Act of 1934.
COMPARATIVE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG GIANT CEMENT HOLDING, INC., RUSSELL 2000 INDEX,
S&P 500 INDEX AND A PEER GROUP INDEX
9/30/94 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
Giant Cement Holding, Inc.100.00 84.82 82.14 115.18 165.18 176.79
Peer Group 100.00 90.31 110.50 131.19 214.18 247.34
S&P 500 Index 100.00 99.98 137.56 169.15 225.58 290.04
Russell 2000 Index 100.00 98.14 126.05 146.98 179.81 174.77
ASSUMES $100 INVESTED ON SEP. 30, 1994, ASSUMES DIVIDENDS REINVESTED,
FISCAL YEAR ENDING DEC. 31, 1998
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Edward Brodsky, a director of the Company and the Chairman of the
Compensation and Stock Option Committee, is a senior partner in the law firm of
Proskauer Rose LLP, which received $408,884 from the Company for rendering legal
services to the Company during 1998.
EMPLOYMENT OF INDEPENDENT AUDITORS
Upon the recommendation of the Audit Committee, the Board of Directors
has selected the firm of PricewaterhouseCoopers L.L.P., Certified Public
Accountants, as independent auditors to examine the consolidated financial
statements of the Company for the year 1999.
A representative of PricewaterhouseCoopers L.L.P. is expected to be
present at the Meeting to respond to appropriate questions, and such
representative will have the opportunity to make a statement if he or she
desires to do so.
8
<PAGE>
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the Company's 2000
annual meeting of stockholders must be received by the Company for inclusion in
its proxy statement on form of proxy no later than November 24, 1999.
VOTING PROCEDURES
At the Meeting, stockholders will be requested to act upon the matters
set forth in this Proxy Statement. If you are not present at the meeting, your
shares can be voted only when represented by proxy. The shares represented by
your proxy will be voted in accordance with your directions if the proxy is
properly signed and returned to the Company, at or before, the Meeting. If no
instructions are specified in the proxy with respect to any proposal, the shares
represented thereby will be voted for the nominees for the Board of Directors
listed in this Proxy Statement and for the ratification of
PricewaterhouseCoopers as the Company's independent auditors for fiscal 1999. If
any other matters shall properly come before the Meeting, the enclosed proxy
will be voted in accordance with the best judgment of the persons voting this
proxy.
A proxy may be revoked at any time prior to it being voted at the
Meeting by delivering to the Secretary of the Company a signed writing revoking
the proxy or a duly executed proxy bearing a later date, or by attending the
Meeting and voting in person. The mere presence at the Meeting of a person
appointing a proxy does not revoke the appointment. All executed proxies not
revoked will be voted at the Meeting in accordance with the instructions
contained therein.
A majority of the outstanding shares of Common Stock represented at the
Meeting, in person or by proxy, will constitute a quorum. The votes of
stockholders present in person or represented by proxy at the Meeting will be
tabulated by an inspector of election appointed by the Company. The five
nominees for directors of the Company who receive the greatest number of votes
cast will be elected directors of the company. The affirmative vote of the
holders of a majority of the shares present in person or represented by proxy at
the Meeting is required to ratify the appointment of the independent auditors.
Abstentions are counted in tabulations of the votes cast on proposals
presented to stockholders, whereas broker non-votes are not counted for purposes
of determining whether a proposal has been approved. Abstentions and broker
non-votes will have no effect on the election of directors (Proposal 1), or the
ratification of the selection of independent public accountants (Proposal 2).
OTHER BUSINESS
The Board of Directors does not know of any matters to be presented for
action at the Meeting other than as set forth in this Proxy Statement. If any
other business should properly come before the Meeting, the persons named in the
proxy intend to vote thereon in accordance with their best judgment.
Stockholders that wish to submit proposals for consideration at the Company's
2000 annual meeting without including them in the Company's proxy statement for
that meeting must notify the company of their intentions by March 1, 2000. If
they do not, the persons named in the Company's proxy may exercise their
discretionary authority to vote on these proposals.
The Company's 1998 Annual Report to Stockholders is being furnished
with this Proxy Statement. Reference is made to such Annual Report for financial
information of the Company.
Upon the written request of any stockholder of record as of March 16,
1999, a copy of the Company's 1998 Annual Report to the Securities and Exchange
Commission on Form 10-K (excluding exhibits) will be provided without charge.
Requests should be directed to: Terry L. Kinder, Secretary, Giant Cement
Holding, Inc., 320-D Midland Parkway, Summerville, SC 29485.
By Order of the Board of Directors
TERRY L. KINDER
Secretary
Summerville, South Carolina
March 24, 1999
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