UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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UNITED STATES LIME & MINERALS, INC.
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(Name of Registrant as Specified In Its Charter)
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[UNITED STATES LIME & MINERALS, INC. LETTERHEAD]
April 3, 2002
Dear Shareholders:
You are cordially invited to attend the 2002 Annual Meeting of
Shareholders at 10:00 a.m. on Friday, May 3, 2002, at the Crowne Plaza Suites,
7800 Alpha Road, Dallas, Texas, 75240. Please refer to the back of this letter
for directions. The Meeting will be preceded by an informal reception starting
at 9:30 a.m., at which you will have an opportunity to meet the Directors and
Officers of the Company.
Enclosed with this letter is a Notice of the Annual Meeting, Proxy
Statement, and Proxy Card. I urge you to complete, sign, date, and mail the
enclosed Proxy Card at your earliest convenience. Regardless of the size of your
holdings, it is important that your shares be represented. If you attend the
Meeting, you may withdraw your Proxy and vote in person. You may also withdraw
your Proxy by submitting to the Company, prior to the Annual Meeting, a written
notice of revocation.
I look forward to meeting and speaking with you at the Annual Meeting
on May 3, 2002.
Sincerely,
/s/ TIMOTHY W. BYRNE
Timothy W. Byrne
President and Chief Executive Officer
Enclosures
UNITED STATES LIME & MINERALS, INC.
Directions to the 2002 Annual Meeting of Shareholders
Friday, May 3, 2002, at 10:00 a.m.
CROWNE PLAZA SUITES
7800 ALPHA ROAD
DALLAS, TEXAS 75240
DIRECTIONS FROM DALLAS-FT. WORTH AIRPORT:
o Take the North exit from the airport
o East on I-635 (Lyndon B. Johnson Freeway) o Exit at Coit Road, turning
North (left) onto Coit
o Turn left at first intersection onto Alpha Road
o Hotel entrance is on the left before junction with Blossomheath Road
DIRECTIONS FROM DOWNTOWN DALLAS:
o North on North Central Expressway (U.S. 75)
o Exit at Coit Road (exit passes over U.S. 75 and joins Coit)
o Continue North on Coit until you cross over I-635 (Lyndon B. Johnson
Freeway)
o Turn left at first intersection onto Alpha Road
o Hotel entrance is on the left before junction with Blossomheath Road
[MAP] CROWN PLAZA SUITES
7800 ALPHA ROAD
DALLAS, TEXAS 75240
[UNITED STATES LIME & MINERALS, INC. LETTERHEAD]
NOTICE OF 2002 ANNUAL MEETING OF SHAREHOLDERS
To Be Held On May 3, 2002
To the Shareholders of
United States Lime & Minerals, Inc.:
Notice is hereby given that the 2002 Annual Meeting of Shareholders of
United States Lime & Minerals, Inc., a Texas corporation (the "Company"), will
be held on Friday, the 3rd day of May, 2002, at 10:00 a.m., local time at the
Crowne Plaza Suites, 7800 Alpha Road, Dallas, Texas 75240 (the "Annual
Meeting"), for the following purposes:
1. To elect six directors to serve until the next annual meeting
of shareholders and until their respective successors have
been duly elected and qualified; and
2. To transact such other business as may properly be brought
before the Annual Meeting or any adjournment thereof.
Information regarding the matters to be acted upon at the Annual
Meeting is contained in the Proxy Statement accompanying this Notice.
The Board of Directors has fixed the close of business on March 22,
2002 as the record date for the determination of shareholders entitled to notice
of and to vote at the Annual Meeting or any adjournment thereof. Only
shareholders of record at the close of business on the record date are entitled
to notice of and to vote at the Annual Meeting or any adjournment thereof. A
complete list of such shareholders will be available for inspection during usual
business hours for ten days prior to the Annual Meeting at the office of the
Company in Dallas, Texas.
All shareholders are cordially invited to attend the Annual Meeting.
SHAREHOLDERS ARE URGED, WHETHER OR NOT THEY PLAN TO ATTEND THE ANNUAL MEETING,
TO COMPLETE, SIGN, AND DATE THE ACCOMPANYING PROXY CARD AND TO RETURN IT
PROMPTLY IN THE POSTAGE-PAID RETURN ENVELOPE PROVIDED. A shareholder who has
returned a Proxy Card may withdraw the Proxy by sending the Company a written
notice of revocation or by attending the Annual Meeting and voting in person.
By Order of the Board of Directors,
/s/ TIMOTHY W. BYRNE
Timothy W. Byrne
President and Chief Executive Officer
Dallas, Texas
April 3, 2002
[UNITED STATES LIME & MINERALS, INC. LETTERHEAD]
PROXY STATEMENT
FOR
2002 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 3, 2002
INTRODUCTION
The accompanying form of proxy (the "Proxy Card"), mailed together with
this proxy statement (the "Proxy Statement"), is solicited by and on behalf of
the Board of Directors of United States Lime & Minerals, Inc., a Texas
corporation (the "Company"), for use at the 2002 Annual Meeting of Shareholders
of the Company (the "Annual Meeting") to be held at the time and place and for
the purposes set forth in the accompanying Notice. The approximate date on which
this Proxy Statement and the Proxy Card were first sent to shareholders of the
Company is April 3, 2002.
Shares of the Company's common stock, par value $0.10 per share (the
"Common Stock"), represented by valid Proxy Cards, duly signed, dated, and
returned to the Company and not revoked, will be voted at the Annual Meeting in
accordance with the directions given. In the absence of directions to the
contrary, such shares will be voted:
FOR the election of the six nominees named in the Proxy Card to the
Board of Directors of the Company.
If any other matter is properly brought before the Annual Meeting for
action at the Meeting, which is not currently anticipated, the persons
designated to serve as proxies will vote on such matters in accordance with
their best judgment.
Any shareholder of the Company returning a Proxy Card has a right to
withdraw the Proxy at any time before it is exercised by attending the Annual
Meeting and voting in person or by giving written notice of such revocation to
the Company addressed to Timothy W. Byrne, President and Chief Executive
Officer, United States Lime & Minerals, Inc., 13800 Montfort Drive, Suite 330,
Dallas, Texas 75240; however, no such revocation shall be effective unless such
notice of revocation has been received by the Company at or prior to the Annual
Meeting.
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS
Only holders of record of Common Stock at the close of business on
March 22, 2002, the record date for the Annual Meeting, are entitled to notice
of and to vote at the Annual Meeting or any adjournment thereof. The presence of
the holders of a majority of the outstanding shares of Common Stock is necessary
to constitute a quorum. On the record date for the Annual Meeting, there were
issued and outstanding 5,799,845 shares of Common Stock. At the Annual Meeting,
each shareholder of record on March 22, 2002 will be entitled to one vote for
each share of Common Stock registered in such shareholder's name on the record
date.
The following table sets forth, as of March 22, 2002, information with
respect to shareholders known to the Company to be the beneficial owners of more
than five percent of the issued and outstanding shares of Common Stock:
Name and Address Number of Shares Percent
of Beneficial Owner Beneficially Owned of Class
--------------------------- ------------------ ------------
Inberdon Enterprises Ltd. 3,478,390(2) 59.97%(2)
1020-789 West Pender Street
Vancouver, British Columbia
Canada V6C 1H2 (1)
Robert S. Beall 480,439(2) 8.28%(2)
5300 Miramar Lane
Colleyville, Texas 76034
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(1) Inberdon Enterprises Ltd. ("Inberdon") is principally engaged in the
acquisition and holding of securities of aggregate producing companies
located in North America. All of the outstanding shares of Inberdon are
held, indirectly through a number of private companies, by Mr. George
M. Doumet.
(2) In the case of Inberdon, based on the Company's records as of March 22,
2002. In the case of Robert S. Beall, based on his Schedule 13G
received by the Company on February 13, 2002 reporting shares as of
December 31, 2001. Assuming Robert S. Beall continues to own 480,439
shares on March 22, 2002, such shares would represent 8.28% of the
class as of such date.
-2-
SHAREHOLDINGS OF COMPANY DIRECTORS AND EXECUTIVE OFFICERS
The table below sets forth the number of shares of Common Stock
beneficially owned, as of March 22, 2002, by all directors and named executive
officers of the Company individually and all directors and executive officers as
a group:
Number of Shares Percent
Name Beneficially Owned(1) of Class (1)
---- ------------------ --------
John J. Brown -- --
Timothy W. Byrne 52,845 (2)(4)(5) (6)
Richard W. Cardin 2,000 (6)
Antoine M. Doumet -- (3) --
Wallace G. Irmscher 9,000 (6)
Edward A. Odishaw 8,900 (6)
Johnney G. Bowers 22,493 (2)(4) (6)
Billy R. Hughes 61,312 (2)(4) 1.06%
Richard D. Murray 33,500 (2)(4) (6)
All Directors
and Executive Officers
as a Group (9 persons) 190,050 (2)(4)(5) 3.28%
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(1) All shares are directly held with sole voting and dispositive power
unless otherwise indicated.
(2) Includes 6,845, 493, 3,860, and 500 shares allocated to Messrs. Byrne,
Bowers, Hughes, and Murray, respectively, under the Company's Employee
Stock Ownership Plan ("ESOP"), which was merged with the Company's
401(k) profit-sharing plan effective July 31, 1999.
(3) The named individual is the brother of Mr. George M. Doumet, who
indirectly owns all the outstanding shares of Inberdon.
(4) Includes the following shares subject to stock options exercisable
within the next 60 days granted under the 1992 Stock Option Plan (the
"1992 Plan"): Mr. Byrne, 30,000; Mr. Bowers, 22,000; Mr. Hughes,
52,000; and Mr. Murray, 33,000.
(5) Does not include 50,000 shares subject to stock options granted under
the 2001 Long-Term Incentive Plan (the "2001 Plan") to Mr. Byrne in
June 2001.
(6) Less than 1%.
-3-
PROPOSAL 1: ELECTION OF DIRECTORS
Six directors, constituting the entire Board of Directors, are to be
elected at the Annual Meeting to serve until the next annual meeting of
shareholders and until their respective successors have been duly elected and
qualified. All of the nominees are currently directors of the Company.
Directors are elected by a plurality of the votes cast by the holders
of shares entitled to vote in the election of directors at the Annual Meeting.
The Company's Restated Articles of Incorporation prohibit cumulative voting for
the election of directors. All duly submitted and unrevoked Proxy Cards will be
voted FOR the nominees selected by the Board of Directors except where
authorization so to vote is withheld. Votes withheld and broker non-votes are
not counted in the election of directors.
The Board of Directors recommends that all shareholders vote "FOR" the
election of all such nominees. If any nominee should become unavailable for
election for any presently unforeseen reason, the persons designated to serve as
proxies will have full discretion to vote for another person nominated by the
Board.
NOMINEES FOR DIRECTOR
The six nominees for director are named below. Each has consented to
serve as a director if elected. Set forth below is pertinent information with
respect to each nominee:
JOHN J. BROWN
Mr. Brown, age 69, has served as a director of the Company since July
1993. Mr. Brown is a director and President of Pacific Opportunity
Company Ltd., a financial consulting and merchant banking firm located
in Vancouver, Canada. He is a director of several public and private
firms. From 1990 to 1993, he served as a director and chief financial
officer of an "LTL" transportation firm in Western Canada. From 1984 to
1990, Mr. Brown was an investment advisor with a Canadian brokerage
firm. Mr. Brown is a Chartered Accountant and was a senior partner with
the public auditing firm of Deloitte & Touche, Chartered Accountants,
in Vancouver, Canada.
TIMOTHY W. BYRNE
Mr. Byrne, age 44, rejoined the Company on December 8, 2000 as its
President and Chief Executive Officer, positions he previously held
during 1997 and 1998. Mr. Byrne has served the Company as a director
since 1991, and served as Chief Financial Officer and Senior Vice
President or Vice President of Finance and Administration from 1990 to
1998. Prior to rejoining the Company in 2000, Mr. Byrne was President
of Rainmaker Interactive, Inc., an Internet services and communications
company focused on strategy, marketing, and technology. Prior to
joining the Company in 1990, Mr. Byrne was a partner at a consulting
and accounting firm in Washington, D.C.
RICHARD W. CARDIN
Mr. Cardin, age 66, has served as a director of the Company since
August 1998. He is a consultant and retired partner of Arthur Andersen
LLP since 1995, having spent 37 years with that firm. He was Office
Managing partner with Arthur Andersen LLP in Nashville, Tennessee from
1980 until 1994. He is a member of the Board of Directors of Atmos
Energy Corporation.
-4-
ANTOINE M. DOUMET
Mr. Doumet, age 42, has served as a director of the Company since July
1993 in the capacity of Vice Chairman. He is a private businessman and
investor. From 1989 to 1995, he served as a director of MELEC, a French
electrical engineering and contracting company. From 1988 to 1992, Mr.
Doumet served as vice president and a director of Lebanon Chemicals
Company. Mr. Doumet is the brother of Mr. George M. Doumet, who
indirectly owns all of the outstanding shares of Inberdon.
WALLACE G. IRMSCHER
Mr. Irmscher, age 79, has served as a director of the Company since
July 1993. He was a senior executive with 44 years of diversified
experience in the construction and construction materials industry.
Since 1995, he has served as a director of N-Viro International
Corporation, a company involved in the recycling of industrial waste.
He also serves as an advisory board member of U.S. Concrete, Inc., a
producer of construction materials. He is past Chairman of the American
Concrete Paving Association (ACPA) and is presently a Board member of
National Ready Mix Concrete Association (NRMCA). Mr. Irmscher has
performed consulting services for various companies in the cement,
construction, and environmental industries.
EDWARD A. ODISHAW
Mr. Odishaw, age 66, has served as a director and Chairman of the Board
of the Company since July 1993. Mr. Odishaw is Chairman of Austpro
Energy Corporation, a public Canadian corporation. Between 1964 and
1999, he practiced law in Saskatchewan and British Columbia, Canada,
with emphasis on commercial law, corporate mergers, acquisitions, and
finance. Between 1992 and 1999, Mr. Odishaw was a Barrister and
Solicitor with the law firm of Boughton Peterson Yang Anderson, located
in Vancouver, Canada. From 1972 to 1992, Mr. Odishaw was a Barrister
and Solicitor with the law firm of Swinton & Company, Vancouver,
Canada. Mr. Odishaw holds directorships in numerous companies in
Canada. Mr. Odishaw is a member in good standing of the Law Society of
British Columbia and the Canadian Bar Association and is a
non-practicing member of the Law Society of Saskatchewan.
EXECUTIVE OFFICERS
WHO ARE NOT ALSO DIRECTORS
JOHNNEY G. BOWERS
Mr. Bowers, age 55, joined the Company in June 1997 and has served as
Vice President - Manufacturing since that date. He has over 25 years of
engineering and operating experience. From May 1991 until he joined the
Company, Mr. Bowers served as director of engineering with Chemical
Lime Company. Prior to May 1991, Mr. Bowers held various senior process
engineering and project manager positions in the mining and processing
industry.
BILLY R. HUGHES
Mr. Hughes, age 63, joined the Company in June 1973 and has served as
Senior Vice President - Sales & Marketing since December 1998. He has
more than 25 years of experience in the lime and limestone industry.
Mr. Hughes began his employment with the Company as a salesperson for
the Arkansas Lime plant. In 1978, he was promoted to sales manager for
Arkansas Lime. In 1983, Mr. Hughes was appointed Vice President - Sales
and Marketing for both Arkansas Lime and Texas Lime. Mr. Hughes is
active in the National
-5-
Lime Association, having served on its board of directors and executive
committee for several years.
RICHARD D. MURRAY
Mr. Murray, age 61, joined the Company in May 1995 and served as
Vice President - Engineering until March 2001, when he was appointed
Vice President and Plant Manager for Texas Lime Company. He has 34
years of experience in various management and engineering positions.
Prior to joining the Company, he was Vice President - Operations for
Lone Star Industries, Inc., a leading cement manufacturer.
CORPORATE GOVERNANCE
The Company has adopted a policy for Corporate Governance which is
broadly in line with the standards of The Nasdaq Stock Market, and commensurate
with its size and stage of development.
The Board consists of six directors, five of whom are independent
within the meaning of the Nasdaq rules. The sixth is the Company's President and
Chief Executive Officer. The Board meets at least four times each year, and more
frequently as required, and is responsible for supervising the management of the
business and affairs of the Company, including the development of major policy
and strategy. The Board has a standing Executive Committee, Audit Committee, and
Compensation Committee, but does not have a standing nominating committee.
During the year ended December 31, 2001, the Board of Directors held
six meetings, the Executive Committee held one meeting, the Audit Committee held
two meetings, and the Compensation Committee held two meetings. During the year
ended December 31, 2001, each director attended at least 75% of the aggregate of
(a) the total number of meetings held by the Board and (b) the total number of
meetings held by all committees of the Board on which he served.
Governance responsibilities are undertaken by the Board as a whole,
with certain specific responsibilities delegated to the three Committees as
described below:
o The Executive Committee is composed of Messrs. Odishaw (Chairman),
Doumet, and Byrne. Within the policy and strategic direction provided
by the Board, the Executive Committee may exercise all of the powers
of the Board, except those required by law to be exercised by the full
Board, and is required to report to the Board on all matters
considered and actions taken since the last meeting of the full Board.
o The Audit Committee is composed of three independent directors,
Messrs. Brown (Chairman), Cardin, and Irmscher, two of whom are
accounting professionals. The Report of the Audit Committee is set
forth below.
o The Compensation Committee is composed of three independent directors,
Messrs. Odishaw (Chairman), Cardin, and Doumet. The Compensation
Committee is responsible for the evaluation, approval, and
administration of salary, incentive compensation, bonuses, benefit
plans, and other forms of compensation for the Company's officers and
directors. The Compensation Committee is responsible for administering
the United States Lime & Minerals, Inc. 2001 Long-Term Incentive Plan.
The Report of the Compensation Committee follows the Report of the
Audit Committee.
-6-
Notwithstanding anything to the contrary, the following reports of the
Audit Committee and the Compensation Committee and the Performance Graph set
forth below shall not be deemed to be incorporated by reference by any general
statement incorporating by reference the Proxy Statement into any filing under
the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the
extent that the Company specifically incorporates this information by reference.
This information shall not otherwise be deemed to be filed under such Acts.
REPORT OF THE AUDIT COMMITTEE
As members of the Audit Committee, we assist the Board in fulfilling its
responsibility to oversee the Company's financial reporting process. Management
has the primary responsibility for the financial statements and the reporting
process, including the systems of internal controls. In fulfilling our oversight
responsibilities, we review the audited financial statements in the Annual
Report with management and the Company's independent auditors. The Committee and
the Board of Directors also approve the selection of the Company's independent
auditors.
For the year ended December 31, 2001, we discussed with the independent
auditors, who are responsible for expressing an opinion on the conformity of
those audited financial statements with generally accepted accounting
principles, the financial statements, the audit, and the matters required to be
reviewed by Statement on Auditing Standards No. 61 (Communication with Audit
Committees). In addition, we discussed with the independent auditors the
auditors' independence from management and the Company, including the matters in
the written disclosures required by the Independence Standards Board.
We also discussed with the Company's independent auditors the overall scope and
plans for their audit. We met with the independent auditors, with and without
management present, to discuss the results of their audit.
As previously reported, in connection with the year-end close and audit for
2001, it was discovered that a former employee had embezzled significant funds
from the Company over a four-year period. Upon discovery of the defalcations, we
met with management and the Company's independent auditors; retained independent
counsel to conduct a special investigation; and hired an accounting firm to
review the Company's internal controls and make recommendations for
improvements. As reported in the Company's Annual Report on Form 10-K for the
year ended December 31, 2001, the Company has restated the affected financial
statements and adopted improvements to its internal controls and related
systems.
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors, and the Board approved, that
the audited financial statements of the Company be included in the Annual Report
on Form 10-K for the year ended December 31, 2001 for filing with the Securities
and Exchange Commission.
AUDIT COMMITTEE
John B. Brown, Chairman
Richard W. Cardin
Wallace G. Irmscher
-7-
REPORT OF THE COMPENSATION COMMITTEE
As members of the Compensation Committee of the Board of Directors (the
"Committee"), we have the responsibility for administering the executive
compensation program of the Company. The Compensation Committee reviews and
makes recommendations to the full Board of Directors regarding the base salaries
and annual incentive compensation for executive officers, and administers the
Company's 1992 Stock Option Plan (the "1992 Plan"), and the Company's 2001
Long-Term Incentive Plan (the "2001 Plan").
COMPENSATION POLICIES. The principal executive compensation policy of the
Company, which is endorsed by the Committee, is to provide a compensation
program that will attract, motivate, and retain persons of high quality and will
support a long-standing internal culture of loyalty and dedication to the
interests of the Company and its shareholders. In administering the executive
compensation program, the Committee is mindful of the following principles and
guidelines which are supported by the full Board:
Base salaries for executive officers should be competitive. A sufficient portion
of annual compensation should be at risk in order to align the interests of
executives with those of the shareholders of the Company. This variable part of
annual compensation should reflect both individual and corporate performance. As
a person's level of responsibility increases, a greater portion of total
compensation should be at risk, and the mix of total compensation should be
weighted more heavily in favor of stock-based compensation. Stock options
provide executives long-term incentive and help align the interests of
executives and shareholders in the enhancement of shareholder value.
As discussed elsewhere in this Proxy Statement, the Company has entered into
employment agreements with Messrs. Bowers, Hughes, and Byrne. These agreements
provide for an annual base salary, bonuses, the use of a Company car,
reimbursement of business expenses, participation in the 401(k) profit-sharing
plan, severance arrangements, and other benefits. The Committee has determined
that such agreements are appropriate means to achieve the Company's overall
compensation policies.
2001 COMPENSATION. The Company's executive compensation packages have three
separate elements; consisting of base salary, annual incentive compensation, and
long-term incentive compensation. The compensation packages of Mr. Byrne and the
other executive officers are designed to be competitive within the industry and
to provide incentives for both short- and long-term performance in line with the
financial interests of the shareholders.
BASE SALARIES. The Committee determines levels of the executive officers' base
salaries so as to be competitive with amounts paid to executives performing
similar functions in comparable size non-durable manufacturing companies. The
amount of each executive's annual increase in base salary, if any, will be based
on a number of largely subjective factors, including the personal performance of
such executive officer, the performance of the Company, cost-of-living
increases, and such other factors as the Committee deems appropriate, including
the individual's overall mix between fixed and variable compensation and between
cash and stock-based compensation. Executive officers did not receive a raise in
2001.
ANNUAL INCENTIVE COMPENSATION. Each of the Company's executive officers is
eligible to receive annual cash bonus awards based on determinations made by the
Committee. Except in the case of Mr. Byrne, the Company has not adopted a formal
annual bonus plan. Rather, the determination to pay a cash bonus, if any, is
based on the Committee's subjective judgment with respect to the past
performance of the individual, or on the individual's attainment of objective
performance goals set by the Committee. In either such case, the bonus may be
based on the specific accomplishments of the individual, or on the overall
success of the Company. As a result of the Company's improved
-8-
performance, the Committee awarded the following bonuses for 2001: Mr. Bowers,
$2,000; Mr. Hughes, $10,000; and Mr. Murray, $10,000.
As described elsewhere in this Proxy Statement, Mr. Byrne's employment agreement
provides for an objective annual cash bonus based on percentage increases in the
Company's EBITDA (earnings before interest, taxes, depreciation, and
amortization), as well as the possibility of a subjective cash bonus in the
discretion of the Committee. For 2001, the increase in the Company's EBITDA
resulted in Mr. Byrne's earning an objective bonus of $130,000. In addition, in
recognition of the Company's improved financial performance in 2001, the
successful completion of the Company's rights offering, the favorable resolution
of various contractors disputes related to Phase I of the modernization and
expansion project at Arkansas Lime, and other subjective factors, the Committee
awarded Mr. Byrne a discretionary bonus of $45,000, for a total bonus of
$175,000, for 2001.
LONG-TERM INCENTIVE COMPENSATION. The Committee also administers the 1992 Plan
and the 2001 Plan to provide long-term incentives to its key employees,
including executive officers. Grants are based on each individual's position
within the Company, level of responsibility, past performance, and expectation
of future performance. Mr. Byrne was granted an option for 30,000 shares on
February 22, 2001, under the 1992 Plan. At the Annual Shareholders Meeting held
on April 27, 2001, the shareholders approved the adoption of the 2001 Plan. Mr.
Byrne was granted an option for 50,000 shares under the 2001 plan on June 30,
2001.
Internal Revenue Code of 1986 ("Code") Section 162(m) generally limits the
corporate income tax deduction for compensation paid to certain named executive
officers to $1 million per year, except for certain qualified and
performance-based compensation. The Committee had not seen any need to adopt a
policy with regard to qualifying bonus awards for tax deductibility under Code
Section 162(m), since Company cash compensation is well below the level at which
this tax limitation would apply, and most of the Company's stock options granted
previously were not subject to the limitation. Options that were granted in 1999
and thereafter under the 1992 Plan, as amended and restated in 1999, and that
will be granted under the 2001 Plan are intended to constitute performance-based
compensation not subject to the Code Section 162(m) limitation.
COMPENSATION COMMITTEE
Edward A. Odishaw, Chairman
Antoine M. Doumet
Richard W. Cardin
-9-
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the cash and non-cash compensation for
each of the last three fiscal years earned by the current President and Chief
Executive Officer, and three other executive officers of the Company who earned
salaries and bonuses in 2001 that exceeded $100,000:
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION SECURITIES ALL OTHER COMPENSATION
NAME AND ------------------------------ UNDERLYING -----------------------
PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS(#) 401(k) ESOP
----------------------------------- ---- ---------- ---------- ------------ ---------- ----------
(1) (2)(3)(4) (5) (6)
Timothy W. Byrne(7) 2001 $ 240,000 -- 80,000 $ 3,400 --
President and Chief 2000 $ 15,538 -- -- -- --
Executive Officer 1999 $ 43,533 $ 25,000 -- $ 1,496 --
Johnney G. Bowers 2001 $ 141,965 -- $ 2,921 --
Vice President- 2000 $ 141,965 $ 4,000 -- $ 2,907 --
Manufacturing 1999 $ 138,500 $ 4,000 10,000 $ 2,880 $ 2,393
Billy R. Hughes 2001 $ 153,750 -- -- $ 3,125 --
Senior Vice President- 2000 $ 153,750 $ 5,000 -- $ 3,122 --
Sales and Marketing 1999 $ 150,000 $ 8,000 10,000 $ 3,120 $ 3,018
Richard Murray 2001 $ 107,625 -- -- $ 2,261 --
Vice President - 2000 $ 107,625 $ 3,000 -- $ 2,196 --
Texas Lime 1999 $ 105,000 $ 5,000 10,000 $ 2,182 $ 1,754
----------
(1) Bonuses were earned in the previous year and paid in the year shown.
(2) All options granted pursuant to the 1992 Plan, except for an option for
50,000 shares granted under the 2001 Plan.
(3) Mr. Byrne was granted options for 30,000 shares on February 22, 2001 at
$5.50 per share, and for 50,000 shares on June 30, 2001 at $4.94 per
share.
(4) Options granted in 1999 have an exercise price of $8.00. No options
were granted in 2000.
(5) Company contribution to defined contribution plan.
(6) ESOP share allocation, valued at year-end market price of the Common
Stock.
(7) Mr. Byrne was elected President and Chief Executive Officer on December
8, 2000.
-10-
AGGREGATED OPTION EXERCISES IN LAST YEAR AND YEAR-END OPTION VALUES
The following table sets forth information with respect to stock
options exercised by the named executive officers during 2001 and the number and
value of unexercised options held by such executive officers at year end:
Shares Value Number of Securities Value of Unexercised
Acquired on Realized Underlying Unexercised Options In-the-Money Options
Name Exercise (#) ($) at Year-End (#) at Year-End ($)
----------------------- -------------- ------------- ---------------------------------- ----------------------------
Exercisable Unexercisable Exercisable Unexercisable
------------- ------------- ----------- ---------------
Timothy W. Byrne -- -- 30,000 50,000 4,800 36,000
Johnney G. Bowers -- -- 22,000 -- -- --
Billy R. Hughes -- -- 52,000 -- 9,100 --
Richard D. Murray -- -- 33,000 -- -- --
----------
EXECUTIVE EMPLOYMENT AND TERMINATION AGREEMENTS
The Company has employment agreements with Messrs. Bowers, Hughes and
Byrne. Such employment agreements are designed to ensure that the Company will
be able to attract, motivate, and retain highly qualified talent, which is
critical to both the short- and long-term success of the Company.
The employment agreements provide for a base salary to be reviewed
annually. Mr. Byrne and the Company entered into an employment agreement as of
December 8, 2000, which provides him with an annual base salary of $240,000. In
addition to the base salary, the agreements for Messrs. Bowers and Hughes
provide for a bonus to be determined by the Compensation Committee of the Board
of Directors. In addition to the possibility of a discretionary bonus, Mr.
Byrne's agreement provides that Mr. Byrne is eligible to receive an objective
bonus determined by percentage increases in the Company's earnings before
interest, taxes, depreciation, and amortization ("EBITDA"). In the event of a
change of control of the Company, and Mr. Byrne's termination, Mr. Byrne may be
entitled to bonuses, the amount of which will depend on the reason for and date
of his termination in relation to the change in control. The employment
agreements also provide for use of a Company car, reimbursement of business
expenses, and participation in the Company's 401(k) profit-sharing plan.
Participation in the Company's ESOP ceased on July 31, 1999 when the ESOP was
merged with the 401(k) profit-sharing plan. In the case of Mr. Bowers, his
severance payment would be six months' compensation. Mr. Hughes does not have a
severance arrangement, but is generally entitled to one-year's notice before
termination. Mr. Byrne is entitled to severance payments if he is terminated
without cause. Mr. Hughes' and Mr. Byrne's agreements contain certain
post-termination covenants not to compete. Mr. Bower's and Mr. Hughes'
agreements have no expiration dates. Mr. Byrne's agreement expires on December
31, 2003, and is thereafter renewable for successive one-year periods, unless
the agreement is terminated earlier by him or the Company.
Pursuant to Mr. Byrne's employment agreement, the Company agreed to use
its best efforts to cause Mr. Byrne to remain on the Board and to be appointed a
member of the Executive Committee of the Board.
-11-
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company, other than the Chairman
of the Board of Directors, are paid an annual retainer of $11,000 plus $600 per
day on Company business. The Chairman of the Board is paid an annual retainer of
$40,000 plus $800 per day on Company business.
PERFORMANCE GRAPH
The graph below compares the cumulative five-year total shareholders'
return on the Company's Common Stock with the cumulative total return on The
Nasdaq Stock Market Index and a peer group consisting of Florida Rock
Industries, Lafarge Corporation, Martin Marietta Materials, Inc., Oglebay Norton
Company, and Puerto Rican Cement Company, Inc. The graph assumes that the value
of the investment in the Company's Common Stock and each index was $100 on
December 31, 1996, and that all dividends have been reinvested.
[PERFORMANCE GRAPH]
ASSUMES $100 INVESTED ON DECEMBER 31, 1996
ASSUMES DIVIDENDS REINVESTED THROUGH
FISCAL YEAR ENDED DECEMBER 31, 2001
12/31/96 12/31/97 12/31/98 12/31/99 12/31/00 12/31/01
-------------- -------------- --------------- -------------- -------------- --------------
U.S. LIME & MINERALS, INC. $100 $ 85.40 $ 85.07 $ 83.22 $ 60.36 $ 69.57
PEER GROUP INDEX $100 $154.38 $221.25 $162.29 $158.93 $210.41
NASDAQ MARKET INDEX $100 $122.32 $172.52 $304.29 $191.25 $152.46
-12-
INDEPENDENT AUDITORS
A summary of Ernst & Young LLP's fees billed to the Company for the
year ended December 31, 2001 are as follows:
Audit fees: $ 73,500
Information systems design and implementation $ 0
Other fees:
Audit Related $ 31,000
Tax consulting and compliance services $ 29,080
Total Other fees $ 60,080
The Audit Committee has considered the compatibility of nonaudit
services with the auditors' independence.
Audit fees include fees for the audit of the December 31, 2001
financial statements and related quarterly reviews performed during the year.
Audit-related fees include typical assurance services that are excluded from the
restrictive definition of audit fees.
Representatives of the firm of Ernst & Young LLP are expected to be
present at the Annual Meeting and will have an opportunity to make a statement
if they so desire and will be available to respond to appropriate questions.
OTHER MATTERS
The Board does not intend to present any other matters at the Annual
Meeting and knows of no other matters that will be presented. However, if any
other matters properly come before the Annual Meeting, the persons designated as
proxies on the enclosed Proxy Card intend to vote thereon in accordance with
their best judgment.
-13-
SHAREHOLDER PROPOSALS
Shareholder proposals submitted to the Company under Securities and
Exchange Commission ("SEC") Rule 14a-8 under the Securities Exchange Act of 1934
for inclusion in the Company's Proxy Statement for its 2003 Annual Meeting of
Shareholders must be received by the Company at its office in Dallas, Texas,
addressed to Timothy W. Byrne, President and Chief Executive Officer of the
Company, not later than November 3, 2002. Such Rule 14a-8 shareholder proposals
must comply with SEC rules.
The Company must receive notice of other matters, including non-Rule
14a-8 proposals, that shareholders may wish to raise at the 2003 Annual Meeting
of Shareholders by January 17, 2003. If the Company does not receive timely
notice of such other matters, the persons designated as proxies for such meeting
will retain general discretionary authority to vote on such matters under SEC
rules. Such notices should be addressed to Timothy W. Byrne, President and Chief
Executive Officer of the Company.
The costs of solicitation of Proxies for the Annual Meeting will be
borne by the Company. Solicitation may be made by mail, personal interview,
telephone, and/or telegraph by officers and regular employees of the Company who
will receive no additional compensation therefor. The Company may specifically
engage a firm to aid in the solicitation of Proxies, for which services the
Company would anticipate paying a standard reasonable fee plus out-of-pocket
expenses. The Company will bear the reasonable expenses incurred by banks,
brokerage firms, and other custodians, nominees, and fiduciaries in forwarding
proxy materials to beneficial owners.
UNITED STATES LIME & MINERALS, INC.
/s/ TIMOTHY W. BYRNE
TIMOTHY W. BYRNE
Dallas, Texas President and Chief Executive Officer
April 3, 2002
-14-
+
000000 0000000000 0 0000
UNITED STATES LIME & MINERALS, INC. 000000000.000 ext
000000000.000 ext
000000000.000 ext
000000000.000 ext
000000000.000 ext
000000000.000 ext
MR A SAMPLE
DESIGNATION (IF ANY) 000000000.000 ext
ADD 1
ADD 2 HOLDER ACCOUNT NUMBER
ADD 3 C 1234567890 J N T
ADD 4
ADD 5 [BAR CODE]
ADD 6
Use a black pen. Print in [X] Mark this box with an X if you have made
CAPITAL letters inside the grey A B C 1 2 3 X changes to your name or address details above.
areas as shown in this example.
================================================================================
ANNUAL MEETING PROXY CARD
================================================================================
[A] ELECTION OF DIRECTORS
The Board of Directors recommends a vote FOR all nominees in the Election of
Directors.
FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
01-J. J. Brown, 02-T. W. Byrne, [ ] [ ] [ ]
03-R. W. Cardin, 04-A. M. Doumet,
05-W. G. Irmscher, 06-E. A. Odishaw
--------------------------------------------------------------
(Except nominee(s) written above.)
In their discretion, the proxies are authorized to vote upon such other business
as may properly be brought before the Annual Meeting or any adjournment thereof.
[B] AUTHORIZED SIGNATURES - SIGN HERE - THIS SECTION MUST BE COMPLETED FOR YOUR
INSTRUCTIONS TO BE EXECUTED.
THE UNDERSIGNED ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS AND OF THE PROXY STATEMENT. Please sign exactly as name appears.
Joint owners should each sign personally. Where applicable, indicate your
official position or representative capacity.
Signature 1 Signature 2 Date (dd/mm/yyyy)
--------------------- ----------------------------- ---------------------
/ /
--------------------- ----------------------------- ---------------------
[ ] A673 1 U P X +
================================================================================
PROXY - UNITED STATES LIME & MINERALS, INC.
================================================================================
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Edward A. Odishaw and Timothy W. Byrne,
and either of them, proxies, with power of substitution in each, and
hereby authorizes them to represent and to vote, as designated below,
all shares of Common Stock of UNITED STATES LIME & MINERALS, INC.
standing in the name of the undersigned on March 22, 2002, at the
Annual Meeting of Shareholders to be held on May 3, 2002, at the Crowne
Plaza Suites, 7800 Alpha Road, Dallas, Texas 75240, and at any
adjournment thereof, and especially to vote on the item of business
specified below, as more fully described in the Notice of the Meeting
dated April 3, 2002, and the Proxy Statement accompanying the same, the
receipt of which is hereby acknowledged.
YOU ARE ENCOURAGED TO RECORD YOUR VOTE ON THE FOLLOWING ITEMS OF
BUSINESS TO BE BROUGHT BEFORE THE ANNUAL MEETING, BUT YOU NEED NOT MARK
ANY BOX IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD OF
DIRECTORS'RECOMMENDATION. The proxies cannot vote your shares unless
you sign, date, and return this Proxy Card. Remember, you can revoke
this Proxy Card and vote in person by attending the Annual Meeting, or
by submitting to the Company prior to the Annual Meeting, a written
notice of revocation.
YOUR VOTE IS IMPORTANT! PLEASE MARK, SIGN, AND DATE THIS PROXY CARD AND
RETURN IT PROMPTLY IN THE ACCOMPANYING ENVELOPE.
(Continued and to be signed on reverse side.)