DEF 14A of United States Lime & Minerals Inc
Filed Mar 28, 2024 · FY20230001558370-24-004243
SHAREHOLDINGS OF COMPANY DIRECTORS AND EXECUTIVE OFFICERS
SHAREHOLDINGS OF COMPANY DIRECTORS AND EXECUTIVE OFFICERS The table below sets forth the number of shares beneficially owned, as of March 14, 2024, by each of our directors and named executive officers individually and by all directors and executive officers as a group:
SHAREHOLDINGS OF COMPANY DIRECTORS AND EXECUTIVE OFFICERS
| | Number of Shares | Percent | | Name | Beneficially Owned(1) | of Class | | Timothy W. Byrne | 42,264(2) (3) | (5) | | Richard W. Cardin | 4,666 | (5) | | Antoine M. Doumet (4) | 38,800(2) | (5) | | Sandra C. Duhé | 457 | (5) | | Tom S. Hawkins, Jr. | 1,200 | (5) | | John J. Gagnon | 1,242(3) | (5) | | Nathan M. O'Neill | 1,926(3) | (5) | | Timothy W. Stone | 1,015(3) | (5) | | Michael L. Wiedemer | 1,302(3) | (5) | | All Directors and Executive Officers as a Group (9 persons) | 92,872(2) (3) | 1.62% |
SHAREHOLDINGS OF COMPANY DIRECTORS AND EXECUTIVE OFFICERS
| (1) All shares are directly held with sole voting and dispositive power unless otherwise indicated. |
SHAREHOLDINGS OF COMPANY DIRECTORS AND EXECUTIVE OFFICERS
| (2) Includes the following shares subject to stock options exercisable within the next 60 days granted under the 2001 plan: Mr. Byrne, 12,500 and Mr. Doumet, 21,600. |
SHAREHOLDINGS OF COMPANY DIRECTORS AND EXECUTIVE OFFICERS
| (3) Includes the following shares of restricted stock granted under our 2001 plan that were not vested as of March 14, 2024: Mr. Byrne, 12,500; Mr. Gagnon, 360; Mr. O’Neill, 483; Mr. Stone, 420; and Mr. Wiedemer, 470. |
SHAREHOLDINGS OF COMPANY DIRECTORS AND EXECUTIVE OFFICERS
| (4) Mr. Doumet is the brother of Mr. George M. Doumet, who indirectly owns all of the outstanding shares of Inberdon. |
SHAREHOLDINGS OF COMPANY DIRECTORS AND EXECUTIVE OFFICERS
| (5) Less than 1%. |
PROPOSAL 1: ELECTION OF DIRECTORS
PROPOSAL 1: ELECTION OF DIRECTORS Five directors, constituting our entire board of directors, are to be elected in the 2024 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 and have been recommended for re-election by the nominating and corporate governance committee of the board and nominated by the board. 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. Directors are elected by a plurality of the votes cast by the holders of shares entitled to vote in the election of directors in the annual meeting. Our Restated Articles prohibit cumulative voting for the election of directors. Our board of directors and nominating and corporate governance committee unanimously recommend that all shareholders vote FOR the election of all our director nominees. All duly submitted and unrevoked proxies will be voted FOR all our nominees, except where authorization to so vote is withheld. Votes withheld and broker non-votes are not counted in the election of directors.
INFORMATION ABOUT OUR NOMINEES FOR DIRECTOR
INFORMATION ABOUT OUR NOMINEES FOR DIRECTOR The five 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:
Timothy W. Byrne
Timothy W. Byrne Mr. Byrne, age 66, rejoined us on December 8, 2000 as our President and Chief Executive Officer, positions he previously held during 1997 and 1998. Mr. Byrne has served as a director since 1991, and served in various positions, including Senior Vice President and Chief Financial Officer and Vice President of Finance and Administration, from 1990 to 1998. Prior to rejoining us in 2000, Mr. Byrne was president of an Internet services and communications company focused on strategy, marketing and technology. The board selected Mr. Byrne to serve as a director because he is our Chief Executive Officer and has been with the company for more than 30 years in various operational and financial positions. Mr. Byrne is a past president of the National Lime Association. He has extensive knowledge of the lime industry and our operations, markets and finances and is the only officer of the company to sit on the board.
Richard W. Cardin
Richard W. Cardin Mr. Cardin, age 88, has served as a director since 1998. He retired as a partner of Arthur Andersen LLP in 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 was a member of the board of directors of Atmos Energy Corporation (“Atmos”), a natural gas utility company, through February 2011, and was, until the corporation was sold in November 2006, a member of the board of directors of Intergraph Corporation, a global provider of spatial information management software and services. The board selected Mr. Cardin, a certified public accountant (inactive) and an audit committee financial expert, to serve as a director because of his accounting, finance and risk management background, his board and audit committee experience at other public companies, as well as his operational and leadership skills gained as an office managing partner of a major accounting firm.
Antoine M. Doumet
Antoine M. Doumet Mr. Doumet, age 63, has served as a director since 1993 and as Chairman of the board since 2005, and served as Vice Chairman from 1993 until 2005. He is a private businessman and investor. Mr. Doumet is the brother of Mr. George M. Doumet, who indirectly owns all of the outstanding shares of Inberdon. The board selected Mr. Doumet to serve as a director because of his brother’s majority control of the company and his extensive management, operational and engineering background as a result of his educational training and oversight of a variety of private business units, some with operations similar to ours.
Sandra C. Duhé
Sandra C. Duhé Ms. Duhé, age 55, has served as a director since August 2022. She has been a professor at Southern Methodist University in Dallas, Texas since 2012 and is currently professor and chair of the Division of Corporate Communication and Public Affairs. Ms. Duhé has also served as an independent consultant for CCA, Inc., a communication consulting firm, since 2017. From 1990 to 2004, she was employed by various energy sector companies, the most recent company being ExxonMobil, serving in various roles, including: financial analyst; public affairs manager; vice president of Travel Guide Holdings, Inc., an ExxonMobil subsidiary; corporate brand manager; and corporate spokesperson at ExxonMobil’s headquarters. The board selected Ms. Duhé, an audit committee financial expert, because of her background in government affairs, crisis management, media relations, financial and risk communications, and community outreach. Tom S. Hawkins, Jr. Mr. Hawkins, age 67, has served as a director since November 2022. He retired from Atmos, a natural gas utility company, in 2019 after serving in various positions for 22 years. His last position was President of the Louisiana Division of Atmos from 2005 until 2019, where he had overall responsibility for all operations in Louisiana, including marketing, construction and service, regulatory compliance, legislative, accounting and budgeting, human resources, and public affairs. He previously served as the President of the West Texas Division of Atmos from 2000 to 2005. Mr. Hawkins was a member of the board of directors of Woman’s Hospital of Baton Rouge, Louisiana, a not-for-profit specialty hospital, from 2011 to 2019, and Heritage Propane, a national propane distributor, from 2000 to 2003. He was also an audit manager for Arthur Andersen, LLP in Nashville, Tennessee. The board selected Mr. Hawkins, a certified public accountant (inactive) and an audit committee financial expert, to serve as a director because of his accounting, finance and risk management background, his operational and leadership background at other public companies, his board experience at other companies, as well as his knowledge and skills gained during his career in many areas.
Compensation Discussion and Analysis
Compensation Discussion and Analysis The compensation committee of our board has the responsibility for administering our executive compensation program. The committee reviews and, as appropriate, makes recommendations to the full board regarding the base salaries and annual cash bonuses for executive officers, and administers our 2001 plan, including the grant of stock options and shares of restricted stock and cash awards. Where appropriate, we may enter into employment agreements with certain executive officers. Compensation Philosophy and Objectives. Our principal executive compensation policy, which is endorsed by the committee, is to provide a compensation program for executive officers 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 our shareholders in order to assist us in creating sustainable, long-term shareholder value. In administering the executive compensation program, the committee is mindful of the following principles and guidelines, which are supported by the full board:
Compensation Discussion and Analysis
| ● | A sufficient portion of annual compensation should be at risk in order to align the interests of executive officers with the long-term interests of our shareholders. |
Compensation Discussion and Analysis
Our executive compensation program currently has three primary components: base salary, annual cash bonuses and stock-based awards granted pursuant to our 2001 plan. In addition, an executive officer may receive certain benefits that are specifically provided for in his employment agreement or are generally available to all salaried employees. We do not have any defined benefit pension plans, non-qualified deferred compensation arrangements or supplemental retirement plans for our executive officers. For each executive officer, the committee determines the appropriate level for each compensation component based in part on its view of competitive market factors, internal equity and consistency and other considerations deemed relevant, such as rewarding extraordinary performance. The committee has not adopted any formal or informal policies or guidelines for allocating compensation among different forms of cash compensation, between cash and non-cash compensation or between currently paid and long-term compensation. The committee also considers the potential risk incentive each compensation component may have on an executive officer and believes that the compensation packages for our executive officers achieve the appropriate balance of cash and non-cash, discretionary and performance-based and short-term and long-term incentives and do not encourage undue or inappropriate risk-taking. Our president and chief executive officer provides the committee with recommendations for executive officers other than himself, which the committee reviews and approves as submitted or with revisions, if any. The committee has not engaged an outside compensation consultant. Although the committee does not formally benchmark any component of our executive officer compensation to a particular target percentile of any other company’s compensation, the committee does, as it believes appropriate, consider data that allows a general comparison of the overall compensation for our executive officers with that of other comparable size non-durable manufacturing companies. In addition, in considering our executive compensation, the committee takes into account the favorable outcome of the shareholder advisory vote on executive compensation, and, therefore, did not feel that any major changes were required to our overall executive compensation program. On November 15, 2023, we adopted a compensation recovery policy for our executive officers effective as of December 1, 2023, with retroactive applicability to October 2, 2023. The policy provides for recovery of incentive-based compensation based, in whole or in part, upon (i) the attainment of measures that are determined and presented in accordance with the accounting principles used in preparing our financial statements, or any measures that are derived wholly or in part from such measures, (ii) our stock price, or (iii) our total stockholder return, received by an executive officer in the event of an accounting restatement due to material noncompliance with financial reporting requirements that is in excess of the incentive-based compensation that such person would have received based upon the restated financial reporting measure. On March 26, 2020, we entered into a new employment agreement with Mr. Byrne, effective as of January 1, 2020, for a five-year period. The employment agreement provides that Mr. Byrne is subject to certain forfeiture/clawback and share ownership provisions designed to better align Mr. Byrne’s financial interests with those of our long-term shareholders, and to ensure that he is incentivized not to take actions that may benefit the company and its shareholders in the short-term at the expense of long-term corporate value creation and sustainability. In particular, our board and compensation committee are sensitive to how Mr. Byrne’s leadership and actions could further our various objectives, including executive succession planning, human capital development, modernization, expansion and development projects, cost savings and efficiencies, acquisitions, and ESG and sustainability. The terms of Mr. Byrne’s employment agreement are discussed in more detail below. Base Salaries. The committee determines levels of our 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 officer’s annual increase in base salary, if any, is based on a number of largely subjective factors, including changes in the individual’s duties and responsibilities, the personal performance of such executive officer, the performance of the company, cost-of-living increases, and such other factors as the committee deems appropriate, including the individual’s overall mix between fixed and variable compensation and between cash and stock-based compensation. In the case of Mr. Byrne, his employment agreement provides for a minimum base salary. Mr. Byrne’s base salary is reviewed annually for adjustment effective January 1. The base salaries of our other executive officers are also reviewed annually for adjustment. In determining salary increases in 2023, the primary factors considered were the executive officers’ individual performances, the performance of the company and the cost-of-living. Salary rate increases for Messrs. Byrne, Gagnon, O’Neill, Stone and Wiedemer in 2023 were 5.0%, 4.5%, 3.0%, 3.0% and 4.0%, respectively. The 2024 salary rate increase for Mr. Byrne was 4.7%, effective January 1, 2024, to $555,000. The salary rate increases for the remaining executive officers, other than Mr. Byrne, for 2024 have not yet been determined. Annual Cash Bonuses. Each of our executive officers is eligible to receive annual cash bonuses based on discretionary determinations made by the committee. Except in the case of Mr. Byrne, we have not adopted a formal or informal annual bonus arrangement with pre-set performance goals. Rather, the committee’s determination to pay a cash bonus, if any, is made in December each year based on the committee’s subjective judgment with respect to the past performance of the individual and the company or on the attainment of non-quantified performance goals during the year. In either such case, the discretionary bonus may be based on the specific accomplishments of the individual and/or on the overall performance of the company. Discretionary bonuses are normally paid after our earnings for the applicable year are released. The amounts of the discretionary bonuses for 2023 paid in 2024 were based on each executive officer’s individual performance and accomplishments, including contributions made to succession planning, human capital development, modernization, expansion and development projects, cost savings and efficiencies, acquisitions, and ESG and sustainability, during 2023 and are reflected in the Summary Compensation Table.
Compensation Discussion and Analysis
In the case of Mr. Byrne, in addition to the possibility of a discretionary cash bonus in the subjective judgment of the committee, Mr. Byrne’s employment agreement provides that he was entitled for 2023 to an objective annual cash bonus opportunity under our 2001 plan based on our 2023 EBITDA (earnings before interest, income tax expense, depreciation, depletion, and amortization, computed without regard to the effects of any awards granted under our 2001 plan) of $200,000 if EBITDA was $38,000,000; $250,000 if EBITDA was $41,000,000; $300,000 if EBITDA was $44,000,000; and the greater of $460,000 or his base salary at the start of the performance year if EBITDA was equal to or greater than $50,000,000. Any such EBITDA cash bonus for 2023 would be prorated between breakpoints, if required. In 2023, our EBITDA as calculated under this agreement exceeded $50,000,000. As a result, we paid Mr. Byrne in 2024 an EBITDA cash bonus for 2023 of $530,000, equal to the amount of his base salary for 2023. For 2024, Mr. Byrne’s maximum EBITDA cash bonus is $555,000, equal to the amount of his base salary for 2024. Stock-Based Awards. The committee also administers our 2001 plan to provide stock-based incentives to our key employees, including our executive officers. Grants of stock options, shares of restricted stock and other possible stock-based awards are based on each individual’s position within the company, level of responsibility, past performance and expectation of future performance. In determining the number of stock-based awards to be granted to each executive officer, the committee also considers the number of stock-based awards made in prior years to the executive officer, as well as the company’s performance and the market price of our common stock. Grants of stock-based awards to Mr. Byrne are made on the last business day of the calendar year as set forth in his employment agreement. Grants to other executive officers are made on or soon after the date that our earnings for the preceding calendar year are released. The committee also may make grants to executive officers at other times during the year in connection with new hires or promotions. The exercise price for stock options is set at the closing per share market price of our common stock on the date of grant. The stock-based component of our executive compensation program is weighted more heavily toward the granting of shares of time-vested restricted stock than stock options. This is because the committee believes that the amount required to be expensed for stock options by accounting standards is significantly greater than the amount of benefit optionees perceive they receive, as well as the fact that restricted stock is comparatively less dilutive to earnings than stock options. Under his employment agreement, on the last business day of 2023, Mr. Byrne was granted (1) 7,500 stock options and (2) 12,500 shares of restricted stock. Mr. Byrne’s shares of restricted stock vest one year following the date of grant and his stock options vest ratably in three equal installments over 18 months. In February 2024 and 2023, the compensation committee granted shares of restricted stock that vest in three annual installments, and no options, to the other executive officers as follows:
Compensation Discussion and Analysis
| | Shares of Restricted Stock | | | Name | 2024 | 2023 | | John J. Gagnon | 150 | 210 | | Nathan M. O'Neill | 240 | 252 | | Russell W. Riggs | 210 | 345 | | Timothy W. Stone | 210 | 210 | | Michael L. Wiedemer | 240 | 240 |
Compensation Discussion and Analysis
In granting these executive officers shares of restricted stock in February 2024, the committee took into account the executive officers’ past and expected performance, the increase in gross profit of our lime and limestone operations during 2023 and the change in the market price of our common stock since February 2023 in deciding on the number of shares of restricted stock to be granted in order to provide the executives with meaningful stock-based compensation and an incentive for future performance. Tax Implications. In determining executive compensation, the committee considers, among other factors, the possible tax consequences to the company. Tax consequences, including but not limited to tax deductibility by the company, are subject to many factors (such as changes in the tax laws and regulations or interpretations thereof) that are beyond the control of the company. In addition, the committee believes that it is important for it to retain maximum flexibility in designing compensation programs that meet its stated objectives. For these reasons, the committee, while considering tax deductibility as one of the factors in determining compensation, does not limit compensation to those levels or types of compensation that will be deductible by the company.
Summary Compensation Table
Summary Compensation Table The following table sets forth the cash and non-cash compensation earned by our president and chief executive officer, our chief financial officer and our other named executive officers for 2023, 2022 and 2021:
Summary Compensation Table
| | | | | | | | Change in | | | | | | | | | | Non- | Pension Value | | | | | | | | | | Equity | and Non-Qualified | All | | | | | | | | Option | Incentive | Deferred | Other | | | Name and | | Salary | Bonus | Stock Awards | Awards | Plan | Compensation | Compensation | | | Principal Position | Year | ($) | ($)(1) | ($)(2) | ($)(2) | Compensation ($)(3) | Earnings ($) | ($)(4) | Total ($) | | Timothy W. Byrne | 2023 | 530,000 | 1,150,000 | 2,879,375 | 684,525 | 530,000 | — | 30,242 | 5,804,142 | | President and Chief | 2022 | 505,000 | 950,000 | 1,759,500 | 400,425 | 505,000 | — | 29,811 | 4,149,736 | | Executive Officer | 2021 | 480,000 | 650,000 | 1,612,750 | 317,175 | 480,000 | — | 28,764 | 3,568,689 | | John J. Gagnon (5) | 2023 | 206,750 | 45,000 | 32,088 | — | — | — | 6,412 | 290,250 | | Vice President – | 2022 | 197,250 | 45,000 | 25,194 | — | — | — | 7,164 | 274,607 | | Business Development | 2021 | | | | | | | | | | Nathan M. O' Neill(6) | 2023 | 235,250 | 55,000 | 38,506 | — | — | — | 7,644 | 336,400 | | Vice President – | 2022 | | | | | | | | | | Production | 2021 | | | | | | | | | | Russell W. Riggs(7) | 2023 | 247,000 | 50,000 | 52,716 | — | — | — | 11,641 | 361,357 | | Vice President – | 2022 | 244,250 | 50,000 | 44,989 | — | — | — | 12,527 | 351,766 | | Production | 2021 | 233,667 | 50,000 | 48,300 | — | — | — | 12,015 | 343,982 | | Timothy W. Stone | 2023 | 235,250 | 70,000 | 32,088 | — | — | — | 7,426 | 344,764 | | Vice President – | 2022 | 193,667 | 50,000 | 25,194 | — | — | — | 6,792 | 275,652 | | Sales and Marketing | 2021 | 176,250 | 40,000 | 23,184 | — | — | — | 6,058 | 245,492 | | Michael L. Wiedemer | 2023 | 309,000 | 65,000 | 36,672 | — | — | — | 9,355 | 420,027 | | Vice President and | 2022 | 216,917 | 50,000 | 25,194 | — | — | — | 6,539 | 298,650 | | Chief Financial Officer | 2021 | 191,958 | 40,000 | 27,048 | — | — | — | 5,768 | 264,774 |
Summary Compensation Table
| (1) Reflects discretionary cash bonuses earned in the year shown, and paid the following year. |
Summary Compensation Table
| (2) Reflects the aggregate grant date fair value with respect to restricted stock and stock options determined in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The method and assumptions used to determine the fair value for restricted stock and stock options are set forth in Note 6 to our consolidated financial statements included in our 2023 Annual Report on Form 10-K. |
Summary Compensation Table
| (3) Reflects Mr. Byrne’s EBITDA cash bonus earned in the year shown, and paid the following year. |
Summary Compensation Table
| (4) Includes company contributions to our 401(k) plan, the value attributable to personal use of company-provided automobiles, and, for Mr. Byrne, dues for a country club membership. |
Summary Compensation Table
| (5) Mr. Gagnon was named Vice President – Business Development in April 2022. Prior to April 2022, Mr. Gagnon was not considered an executive officer of the company. |
Summary Compensation Table
| (6) Mr. O’Neill was named Vice President – Production in February 2023. Prior to February 2023, Mr. O’Neill was not considered an executive officer of the company. |
Summary Compensation Table
| (7) Mr. Riggs resigned as Vice President – Production in February 2023, but he continues to serve as the company’s Director of Technical Services. |
Grants of Plan-Based Awards
Grants of Plan-Based Awards The following table sets forth information with respect to non-equity incentive plan awards and restricted stock and stock option awards granted to our named executive officers during 2023:
Grants of Plan-Based Awards
| | | | | | | | | All | All Other | | | | | | | | | | | | Other | Option | Exer- | | | | | | | | | | | Stock | Awards: | cise or | | | | | | | | | | | Awards: | Number | Base | Grant Date | | | | Estimated Possible Payouts | | | Estimated Future Payouts | | | Number | of | Price | Fair Value of | | | | Under Non-Equity Incentive | | | Under Equity Incentive | | | of Shares | Securities | of | Stock and | | | | Plan Awards | | | Plan Awards | | | of Stock | Underlying | Option | Option | | | | Threshold | Target | Maximum | Threshold | Target | Maximum | or Units | Options | Awards | Awards | | Name | Grant Date | ($) | ($) | ($) | (#) | (#) | (#) | (#) | (#) | ($/Sh) | ($) | | Timothy W. Byrne | | 200,000 | — | 530,000 | — | — | — | — | — | — | — | | | 12/29/23 | — | — | — | — | — | — | 12,500 | — | — | 2,879,375 | | | 12/29/23 | — | — | — | — | — | — | — | 7,500 | 230.35 | 684,525 | | John J. Gagnon | 2/3/23 | — | — | — | — | — | — | 210 | — | — | 32,088 | | Nathan M. O'Neill | 2/3/23 | | | | | | | 252 | | | 38,506 | | Russell W. Riggs | 2/3/23 | — | — | — | — | — | — | 345 | — | — | 52,716 | | Timothy W. Stone | 2/3/23 | — | — | — | — | — | — | 210 | — | — | 32,088 | | Michael L. Wiedemer | 2/3/23 | — | — | — | — | — | — | 240 | — | — | 36,672 |
Option Exercises and Stock Vested
Option Exercises and Stock Vested The following table sets forth information with respect to stock option awards exercised by, and stock awards vested for, our named executive officers during 2023:
Option Exercises and Stock Vested
| | Option Awards | | Stock Awards | | | | Number of Shares | Value Realized on | Number of Shares | Value Realized on | | Name | Acquired on Exercise (#) | Exercise ($) | Acquired on Vesting (#) | Vesting ($) | | Timothy W. Byrne | 15,000 | 1,308,375 | 12,500 | 2,879,375 | | John J. Gagnon | — | — | 212 | 32,031 | | Nathan M. O'Neill | | | 227 | 34,297 | | Russell W. Riggs | — | — | 417 | 63,005 | | Timothy W. Stone | — | — | 190 | 28,707 | | Michael L. Wiedemer | — | — | 210 | 31,729 |
Outstanding Equity Awards at Fiscal Year-End
Outstanding Equity Awards at Fiscal Year-End The following table includes certain information with respect to the value of all unexercised options and unvested shares of restricted stock held by our named executive officers as of December 31, 2023:
Outstanding Equity Awards at Fiscal Year-End
| | Option Awards | | | | | Stock Awards | | | | | | | | | | | | | | Equity | | | | | | | | | | Equity | Incentive | | | | | | | | | | Incentive | Plan | | | | | | | | | | Plan | Awards: | | | | | Equity | | | | | Awards: | Market or | | | | | Incentive | | | | | Number of | Payout | | | | | Plan | | | | | Unearned | Value of | | | | | Awards: | | | Number | Market | Shares, | Unearned | | | Number of | Number of | Number of | | | of Shares | Value of | Units or | Shares, | | | Securities | Securities | Securities | | | or Units | Shares or | Other | Units or | | | Underlying | Underlying | Underlying | | | of Stock | Units of | Rights | Other | | | Unexercised | Unexercised | Unexercised | Option | | That | Stock | That | Rights | | | Options | Options | Unearned | Exercise | Option | Have Not | That Have | Have Not | That Have | | | (#) | (#) | Options | Price | Expiration | Vested | Not | Vested | Not | | Name | Exercisable | Unexercisable | (#) | ($) | Date | (#) | Vested ($) | (#) | Vested ($) | | Timothy W. Byrne | — | 7,500(1) | — | 230.35 | 12/29/33 | 12,500(3) | 2,879,375 | — | — | | | 5,000 | 2,500(2) | — | 140.76 | 12/30/32 | — | — | — | — | | | 7,500 | — | — | 129.02 | 12/31/31 | — | — | — | — | | John J. Gagnon | — | — | — | — | — | 67(4) | 15,433 | — | — | | | — | — | — | — | — | 140(5) | 32,249 | — | — | | | — | — | — | — | — | 210(6) | 48,374 | — | — | | Nathan M. O'Neill | — | — | — | — | — | 67(4) | 15,433 | — | — | | | — | — | — | — | — | 150(5) | 34,553 | — | — | | | — | — | — | — | — | 252(6) | 58,048 | — | — | | Russell W. Riggs | — | — | — | — | — | 125(4) | 28,794 | — | — | | | — | — | — | — | — | 250(5) | 57,588 | — | — | | | — | — | — | — | — | 345(6) | 79,471 | — | — | | Timothy W. Stone | — | — | — | — | — | 60(4) | 13,821 | — | — | | | — | — | — | — | — | 140(5) | 32,249 | — | — | | | — | — | — | — | — | 210(6) | 48,374 | — | — | | Michael L. Wiedemer | — | — | — | — | — | 70(4) | 16,125 | — | — | | | — | — | — | — | — | 140(5) | 32,249 | — | — | | | — | — | — | — | — | 240(6) | 55,284 | — | — |
Outstanding Equity Awards at Fiscal Year-End
| (1) These options will vest 33 1/3% on each of June 29, 2024, December 29, 2024, and June 29, 2025. |
Outstanding Equity Awards at Fiscal Year-End
| (2) These options will vest 100% on June 30, 2024. |
Outstanding Equity Awards at Fiscal Year-End
| (3) These shares of restricted stock will vest 100% on December 29, 2024. |
Outstanding Equity Awards at Fiscal Year-End
| (4) These shares of restricted stock vested on February 2, 2024. |
Outstanding Equity Awards at Fiscal Year-End
| (5) These shares of restricted stock vested 50% on February 2, 2024 and will vest 50% on February 2, 2025. |
Outstanding Equity Awards at Fiscal Year-End
| (6) These shares of restricted stock vested 33 1/3% on February 3, 2024 and will vest 33 1/3% on each of February 3, 2025 and 2026. |
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control Regardless of the manner in which a named executive officer’s employment terminates, including upon death, disability or termination for cause, he is entitled to receive amounts earned during his term of employment. Such amounts include:
Potential Payments Upon Termination or Change in Control
| ● | salary through the date of termination; |
Potential Payments Upon Termination or Change in Control
| ● | vested stock-based compensation; and |
Potential Payments Upon Termination or Change in Control
| ● | unused vacation pay. |
Potential Payments Upon Termination or Change in Control
In addition, Mr. Byrne may be entitled to a proportional EBITDA cash bonus for the year of termination if termination occurs in the second half of the performance year, or a full EBITDA cash bonus if the termination occurs after November 14 of the performance year. The following table summarizes the estimated severance payments to be made under each employment agreement, plan or arrangement which provides for payments to a named executive officer at, following or in connection with a termination of employment due to voluntary resignation, involuntary termination without cause, death or disability or change in control as of December 31, 2023, including Mr. Byrne’s employment agreement:
Potential Payments Upon Termination or Change in Control
| | Voluntary | Involuntary | | | | | Termination | Termination | | Termination | | | Without Change | Without Change | Death or | with Change in | | Employee | in Control ($) | in Control ($) | Disability ($) | Control ($) | | Timothy W. Byrne | | | | | | Severance (1) | —(2) | 9,849,750(3) | — | 14,774,625(4)(5) | | Accelerated Vesting of Stock-Based Awards(6) | — | — | 2,879,375 | 2,879,375(5) | | John J. Gagnon | | | | | | Severance | — | — | — | — | | Accelerated Vesting of Stock-Based Awards(6) | — | — | 96,056 | 96,056 | | Nathan M. O'Neill | | | | | | Severance | — | — | — | — | | Accelerated Vesting of Stock-Based Awards(6) | — | — | 108,034 | 108,034 | | Russell W. Riggs | | | | | | Severance | — | — | — | — | | Accelerated Vesting of Stock-Based Awards(6) | — | — | 165,852 | 165,852 | | Timothy W. Stone | | | | | | Severance | — | — | — | — | | Accelerated Vesting of Stock-Based Awards(6) | — | — | 94,444 | 94,444 | | Michael L. Wiedemer | | | | | | Severance | — | — | — | — | | Accelerated Vesting of Stock-Based Awards(6) | — | — | 103,658 | 103,658 |
Potential Payments Upon Termination or Change in Control
| (1) The estimated severance payments are based on Mr. Byrne’s reportable taxable income for 2023. Does not include any EBITDA cash bonus to which he may be entitled for the year of termination if termination occurs in the second half of the year. |
Potential Payments Upon Termination or Change in Control
| (2) Does not include severance payment of two months’ base salary to which Mr. Byrne would be entitled if he gave us three months’ notice. |
Potential Payments Upon Termination or Change in Control
| (3) This severance payment is payable upon involuntary termination without cause prior to or after two years following a change in control. |
Potential Payments Upon Termination or Change in Control
| (4) This severance payment is payable upon voluntary termination within nine months following a change in control or involuntary termination without cause within two years following a change in control. |
Potential Payments Upon Termination or Change in Control
| (5) This payment is subject to being reduced to stay within the limits of Section 280G of the Internal Revenue Code. |
Potential Payments Upon Termination or Change in Control
| (6) The estimated value of accelerated vesting of stock-based awards is based on the unvested shares of restricted stock held by each executive officer as of December 31, 2023 and the closing per share market price of our common stock on December 29, 2023. |
PAY RATIO
PAY RATIO In accordance with Item 402(u) of Regulation S-K, promulgated pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we determined the ratio of the annual total compensation of Mr. Byrne, our CEO, relative to the annual total compensation of our median employee for 2023. For purposes of reporting annual total compensation and the ratio of annual total compensation of the CEO to the median employee for 2023, both the CEO’s and the median employee’s annual total compensation were calculated by taking the sum of annual total compensation according to the SEC’s instructions for preparing the Summary Compensation Table and the employer health and life insurance contributions. In determining the median employee for 2023, we collected information regarding annual gross pay for all of our employees, excluding our CEO, who were employed by us as of December 31, 2023. Gross pay generally included an employee’s actual income, including wages, overtime, bonuses, equity compensation and employer health and life insurance contributions. We included all of our full-time, part-time, temporary and seasonal employees. For 2023, the annual total compensation of our CEO was $5,826,530 and the median employee annual total compensation was $76,831, resulting in a pay ratio of 76:1.
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE
| Year | Summary Compensation Table Total for CEO ($) | Compensation Actually Paid to CEO ($) | Average Summary Compensation Table Total for Non-CEO NEO's ($) | Average Compensation Actually Paid to Non-CEO NEOs ($) | USLM Total Shareholder Return ($) | Peer Group Total Shareholder Return ($) | Net Income (Thousands of $) | EBITDA (Thousands of $) | | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | | 2023 | 5,804,142 | 7,552,783 | 350,559 | 395,137 | 260.97 | 182.76 | 74,549 | 117,449 | | 2022 | 4,149,736 | 4,293,399 | 300,169 | 306,538 | 158.81 | 129.82 | 45,429 | 78,999 | | 2021 | 3,568,689 | 3,858,073 | 284,749 | 293,920 | 144.58 | 166.34 | 37,045 | 67,667 | | 2020 | 3,078,464 | 3,195,964 | 267,293 | 281,261 | 127.17 | 102.26 | 28,223 | 55,356 |
PAY VERSUS PERFORMANCE
(a) Reflects compensation amounts reported in the Summary Compensation Table (“SCT”) for our CEO, Timothy W. Byrne, for the respective years shown. (b) “Compensation Actually Paid to CEO” in 2023 reflects the amount in (a) of the table above, adjusted as set forth in the table below, as determined in accordance with SEC rules:
PAY VERSUS PERFORMANCE
| | Covered Year | | | 2023 | | SCT Total Compensation | $5,804,142 | | Less: Stock and Option Award Values Reported in SCT for the Covered Year | (3,563,900) | | Plus: Fair Value for Outstanding Unvested Stock and Option Awards Granted in the Covered Year as of Year End | 3,563,900 | | Change in Fair Value of Outstanding Unvested Stock and Option Awards from Prior Years | 171,200 | | Change in Fair Value of Stock and Option Awards from Prior Years that Vested in the Covered Year | 1,567,441 | | Plus: Dollar value of Dividends or Distributions Paid on Equity Awards during the Covered Year | 10,000 | | Less: Fair Value of Stock and Option Awards Forfeited during the Covered Year | - | | Less: Aggregate Change in Actuarial Present Value of Accumulated Benefit Under Pension Plans | - | | Plus: Aggregate Service Cost and Prior Service Cost for Pension Plans | - | | Compensation Actually Paid | $7,552,783 |
PAY VERSUS PERFORMANCE
(c) The following non-CEO named executive officers are included in the average figures shown: 2023: John J. Gagnon, Nathan M. O’Neill, Russell W. Riggs, Timothy W. Stone, and Michael L. Wiedemer 2022: John J. Gagnon, Russell W. Riggs, Timothy W. Stone, and Michael L. Wiedemer 2021 and 2020: Russell W. Riggs, Timothy W. Stone, and Michael L. Wiedemer (d) “Average Compensation Actually Paid to Non-CEO NEOs” in 2023 reflects the amount set forth in (c) of the table above, adjusted as set forth in the table below, as determined in accordance with SEC rules:
PAY VERSUS PERFORMANCE
| | Covered Year | | | 2023 | | SCT Total Compensation | $350,559 | | Less: Stock and Option Award Values Reported in SCT for the Covered Year | (38,414) | | Plus: Fair Value for Outstanding Unvested Stock and Option Awards Granted in the Covered Year as of Year End | 57,910 | | Change in Fair Value of Outstanding Unvested Stock and Option Awards from Prior Years | 21,663 | | Change in Fair Value of Stock and Option Awards from Prior Years that Vested in the Covered Year | 3,024 | | Less: Fair Value of Stock and Option Awards Forfeited during the Covered Year | - | | Plus: Dollar Value of Dividends or Distributions Paid on Equity Awards during the Covered Year | 395 | | Less: Aggregate Change in Actuarial Present Value of Accumulated Benefit Under Pension Plans | - | | Plus: Aggregate Service Cost and Prior Service Cost for Pension Plans | - | | Compensation Actually Paid | $395,137 |
PAY VERSUS PERFORMANCE
(e) For the relevant year, represents the cumulative total shareholder return (“TSR”) of the company for the measurement periods ending on December 31, of each of 2023, 2022, 2021 and 2020, respectively. TSR assumes that the value of the investment in the company’s common stock was $100 on December 31, 2019, and that all cash dividends have been reinvested. (f) For the relevant year, represents the cumulative TSR of a peer group index consisting of Eagle Materials, Inc., Mineral Technologies, Inc., and Summit Materials Inc. for the measurement periods ending on December 31, of each of 2023, 2022, 2021, and 2020, respectively. TSR assumes that the value of the investment in the peer group index was $100 on December 31, 2019, and that all cash dividends have been reinvested. (g) For the relevant year, represents “Net Income” in the company’s Consolidated Statements of Income included in the company’s Annual Reports on Form 10-K for each of the years ended December 31, 2023, 2022, 2021 and 2020. (h) For the relevant year, represents “EBITDA,” which is net income before interest expense, income tax expense, depreciation, depletion, and amortization. EBITDA is a non-GAAP financial measure that the company’s management, investors and others use to measure a company’s operating performance and ability to incur and service debt, and forms of which are used to determine the EBITDA cash bonus for Mr. Byrne pursuant to his employment agreement and the compensation of other named executive officers and to determine the interest rate applicable under the company’s revolving credit facility.
Relationship Between Pay and Performance
| | Percentage Change from Prior Year | | | | | | 2020 | 2021 | 2022 | 2023 | | Compensation Actually Paid to CEO | 17.3% | 20.7% | 11.1% | 75.9% | | Average Compensation Actually Paid to Non-CEO NEOs | 4.9% | 4.5% | 4.3% | 28.9% | | USLM Total Shareholder Return | 27.2% | 13.7% | 9.8% | 64.3% | | Peer Group Total Shareholder Return | 2.3% | 62.7% | (22.0%) | 40.8% | | Net Income | 8.3% | 31.3% | 22.6% | 64.1% | | EBITDA | 11.4% | 22.2% | 16.7% | 48.7% |
COMPENSATION OF DIRECTORS
COMPENSATION OF DIRECTORS We use a combination of cash and stock-based awards to attract and retain qualified directors to serve on our board of directors. In setting director compensation, we consider the significant amount of time that our directors expend in fulfilling their duties, as well as the skill level required by us for members of our board. The following table sets forth the current compensation schedule for our directors who are not also employees:
COMPENSATION OF DIRECTORS
| Annual Retainer | $20,000 | | Daily Meeting or Per Diem Fee | $1,500 | | Telephonic Meeting Fee | $1,000 | | Additional Annual Retainers: | | | Audit Committee Chairman | $10,000 | | Compensation Committee Chairman | $5,000 |
COMPENSATION OF DIRECTORS
Our non-employee directors are also granted annually, at their option, either 2,400 stock options or 800 shares of restricted stock under our 2001 plan upon their election or re-election by the shareholders as a director. The options are granted at the closing per share market price of our common stock on the date of grant and vest immediately. The shares of restricted stock vest six months from the date of grant. The following table summarizes the compensation paid to our non-employee directors during 2023:
COMPENSATION OF DIRECTORS
| | | | | | Change in | | | | | | | | | Pension Value | | | | | | | | | and Non- | | | | | Fees | | | | qualified | | | | | Earned | | | Non-Equity | Deferred | | | | | or Paid | Stock | Option | Incentive Plan | Compensation | All Other | | | | in Cash | Awards (1) | Awards (1) | Compensation | Earnings | Compensation | Total | | Name | ($) | ($) | ($) | ($) | ($) | ($) | ($) | | Richard W. Cardin | 51,500 | 132,784 | — | — | — | — | 184,284 | | Antoine M. Doumet | 41,500 | — | 150,048 | — | — | — | 191,548 | | Sandra C. Duhé | 41,500 | 132,784 | — | — | — | — | 174,284 | | Tom S. Hawkins | 41,500 | 132,784 | — | — | — | — | 174,284 | | Billy R. Hughes(2) | 33,250 | 132,784 | — | — | — | — | 166,034 |
COMPENSATION OF DIRECTORS
| (1) Reflects the aggregate grant date fair value with respect to restricted stock and stock options determined in accordance with US GAAP. The method and assumptions used to determine fair value for restricted stock and stock options are set forth in Note 6 to our consolidated financial statements. As of December 31, 2023, non-employee directors had the following number of stock options outstanding: Mr. Doumet, 24,000. |
COMPENSATION OF DIRECTORS
| (2) Mr. Hughes passed away in September 2023. |