FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark
One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED JUNE 30, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 0-13928
U.S. GLOBAL INVESTORS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
7900 CALLAGHAN ROAD, SAN ANTONIO, TX 78229
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 210-308-1234
TEXAS 74-1598370
(STATE OF ORGANIZATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
-----------------------------------------------------------------------
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g)of the Act: CLASS A COMMON STOCK,
PAR VALUE $0.05 PER SHARE
Indicate by check mark whether the Company (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES X NO___
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss.229.405 of this chapter) is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [X]
The aggregate market value of the voting stock held by non-affiliates of
Registrant on September 9, 1998, was $143,768.62. Registrant's only voting stock
is class C common stock, par value $0.05 per share, for which there is no active
market. The 104,559 shares of class C common stock held by non-affiliates were
valued at the last sale on September 9, 1998, of Registrant's class A common
stock as reported by Nasdaq, which was $1.375 per share.
On September 9, 1998, there were 496,830 shares of Registrant's class C common
stock outstanding, no shares of Registrant's class B non-voting common shares
outstanding, and 6,299,444 shares of Registrant's class A common stock issued
and 6,128,048 shares of Registrant's class A common stock issued and
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Annual Report to Shareholders for the fiscal year ended June 30,
1998, are incorporated by reference in Part I, Item 1 and Part II, Items 6, 7, 8
and Part III, Item 13 of this Form 10-K.
U.S. Global Investors, Inc.
Annual Report on Form 10-K 1998 Page 2
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TABLE OF CONTENTS
PAGE
PART I ......................................................................3
Item 1. Business......................................................3
Item 2. Properties....................................................3
Item 3. Legal Proceedings.............................................3
Item 4. Submission of Matters to a Vote of Security Holders...........3
PART II ......................................................................4
Item 5. Market for Registrant's Common Equity and
Related Shareholder Matters...................................4
Item 6. Selected Financial Data.......................................5
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations.................5
Item 8. Financial Statements and Supplementary Data...................5
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure........................5
PART III ......................................................................6
Item 10. Directors and Executive Officers of the Company..............6
Item 11. Executive Compensation.......................................8
Item 12. Security Ownership of Certain Beneficial
Owners and Management.......................................12
Item 13. Certain Relationships and Related Transactions..............14
PART IV .....................................................................15
Item 14. Exhibits, Financial Statement Schedules
and Reports on Form 8-K.....................................15
SIGNATURES....................................................................18
EXHIBIT 10.1 Distribution Agreement between U.S. Global Brokerage Inc.
and U.S. Global Accolade Funds dated September 3, 1998
EXHIBIT 10.2 Distribution Agreement between U.S. Global Brokerage Inc.
and U.S. Global Investors Funds dated September 3, 1998
EXHIBIT 11 Schedule of Computation of Net Earnings per Share
EXHIBIT 13 Annual Report
EXHIBIT 21 Subsidiaries of the Registrant, Jurisdiction of
Incorporation and Percentage of Ownership
EXHIBIT 23.1 Consent of Independent Accountants
EXHIBIT 23.2 Consent of Independent Accountants
EXHIBIT 24.1 Power of Attorney
EXHIBIT 24.2 Power of Attorney
EXHIBIT 23.3 Consent of Independent Accountants
U.S. Global Investors, Inc.
Annual Report on Form 10-K 1998 Page 3
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PART I
ITEM 1. BUSINESS
There is incorporated in this Item 1 by reference that portion of the U.S.
Global Investors, Inc. ("U.S. Global," the "Company" or "Registrant") Annual
Report to Shareholders, attached to this Form 10-K as Exhibit 13, appearing
under the caption "The Company."
ITEM 2. PROPERTIES
The Company presently occupies an office building with approximately 46,000
square feet and approximately 2.5 acres of land. The Company purchased this
building from the Resolution Trust Corporation on February 28, 1992, for
$1,018,165, which included closing costs. To finance acquisition and
improvements, the Company obtained a bank loan in the amount of $1,425,000 and
refinanced the note during fiscal year 1994. (See Notes D and H to the
Consolidated Financial Statements incorporated by reference from the Company's
Annual Report to Shareholders in Item 8 of this Form 10-K.) The Company moved to
its new headquarters during August 1992 and has made substantial improvements in
the building. The Company and its subsidiaries, United Shareholder Services,
Inc. ("USSI"), A&B Mailers, Inc., and Security Trust & Financial Company
("STFC") and U.S. Global Brokerage, Inc. ("USGB") occupy approximately 95
percent of the building.
ITEM 3. LEGAL PROCEEDINGS
There is no material pending legal proceeding in which the Company is involved.
There are no material legal proceedings to which any director, officer or
affiliate of the Company or any associate of any such director or officer is a
party or has a material interest, adverse to the Company or any of its
subsidiaries.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during fiscal year 1998.
U.S. Global Investors, Inc.
Annual Report on Form 10-K 1998 Page 4
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
MARKET INFORMATION
The Company has three classes of common equity -- class A, class B and class C
common stock, par value $0.05 per share.
There is no established public trading market for the Company's class B and
class C common stock.
The holders of the Company's class C common stock of record on March 12, 1985
(and their transferees by gift, devise or descent) have the right to exchange
their shares of class C common stock for class A common stock on a
share-for-share basis until April 30, 2000. At September 9, 1998, the holders of
28,388 shares of class C common stock have the right to exchange.
The Company's class A common stock is traded over-the-counter and is quoted
daily under the Nasdaq Small Cap Issues. Trades are reported under the symbol
"GROW."
The following table sets forth the range of high and low closing bid quotations
from Nasdaq for the fiscal years ended June 30, 1998 and 1997. The quotations
represent prices between dealers and do not include any retail markup, markdown
or commission and may not necessarily represent actual transactions.
BID PRICE ($)
----------------------------------------------
1998 1997
----------------------- ---------------------
High Low High Low
-------- ------- -------- -------
First Quarter (9/30) $3.000 $2.000 $3.125 $2.375
Second Quarter (12/31) $2.563 $1.750 $2.813 $2.250
Third Quarter (3/31) $2.813 $1.813 $3.000 $1.750
Fourth Quarter (6/30) $2.625 $1.875 $2.125 $1.688
HOLDERS
On September 9, 1998, there were 72 holders of record of class C common stock,
no holders of record of class B common stock and 310 holders of record of the
class A common stock.
Many of the class A common shares are held of record by nominees, and management
believes that as of September 9, 1998, there were approximately 1,000 beneficial
owners of the Company's class A common stock.
DIVIDENDS
The Company has not paid cash dividends on its class C common stock during the
last twelve fiscal years, and has never paid cash dividends on its class A
common stock. Payment of cash dividends is within the discretion of the
Company's board of directors and is dependent upon earnings, operations, capital
requirements, general financial condition of the Company and general business
conditions.
Holders of the outstanding shares of the Company's class A common stock are
entitled to receive, when and as declared by the Company's board of directors, a
non-cumulative cash dividend equal in the aggregate to 5 percent of the
Company's after-tax net earnings for its prior fiscal year. After such dividend
has been paid, the holders of the outstanding shares of class B common stock are
entitled to receive, when and as declared by the Company's board of directors,
cash dividends per share equal to the cash dividends per share paid to the
holders of the class A common stock. Holders of the outstanding shares of class
C common stock are entitled to receive when and as declared by the
U.S. Global Investors, Inc.
Annual Report on Form 10-K 1998 Page 5
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Company's board of directors, cash dividends per share equal to the cash
dividends per share paid to the holders of the class A and class B common stock.
Thereafter, if the board of directors determines to pay additional cash
dividends, such dividends will be paid simultaneously on a prorated basis to
holders of class A, B and C common stock. The holders of the class A common
stock are protected in certain instances against dilution of the dividend amount
payable to such holders.
ITEM 6. SELECTED FINANCIAL DATA
There is incorporated by reference in this Item 6 that portion of the Company's
Annual Report to Shareholders appearing under the caption "Selected Financial
Data."
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
There is incorporated by reference in this Item 7 that portion of the Company's
Annual Report to Shareholders appearing under the caption "Annual Status
Report."
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated Financial Statements and notes thereto located in the Company's
Annual Report to Shareholders are incorporated herein by reference.
ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
As of June 5, 1998, U.S. Global Investors, Inc. no longer retained
PricewaterhouseCoopers LLP as its independent accountants. The reports of
PricewaterhouseCoopers LLP on the financial statements for the past two fiscal
years contained no adverse opinion or disclaimer of opinion and were not
qualified or modified as to uncertainty, audit scope or accounting principle.
The Registrant's Audit Committee participated in and approved the decision to
change independent accountants. In connection with its audits for the two most
recent fiscal years and through June 5, 1998, there have been no disagreements
with PricewaterhouseCoopers LLP on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure, which
disagreements if not resolved to the satisfaction of PricewaterhouseCoopers LLP
would have caused them to make reference thereto in their report on the
financial statements for such years. During the two most recent fiscal years and
through June 5, 1998, there have been no reportable events [as defined in
Regulation S-K Item 304(a)(1)(v)].
The Registrant engaged Ernst & Young LLP as its new independent accountants as
of June 8, 1998.
PricewaterhouseCoopers continues to audit investment companies managed by the
Company and the Guernsey subsidiary.
U.S. Global Investors, Inc.
Annual Report on Form 10-K 1998 Page 6
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
The directors and executive officers of the Company are as follows:
Name Age Position
- -------------------- ------- ----------------------------------------------
David J. Clark 37 Chief Financial Officer of the Company since
May 1997 and Chief Operating Officer since
December 1997. Chief Financial Officer of USSI
and STFC since June 1997 and September 1997,
respectively. Treasurer of USGIF and USGAF
since January 1998. Director of USGB since
October 1997 and Chief Financial Officer since
January 1998. Foreign Service Officer with
U.S. Agency for International Development in
the U.S. Embassy, Bonn, West Germany from May
1992 to May 1997. Audit Supervisor for Univer-
sity of Texas Health Science Center from April
1991 to April 1992. Auditor-in-Charge for
Texaco, Inc. from August 1987 to June 1990.
Bobby D. Duncan 41 Director of the Company since 1986. President
and Chief Executive Officer of IMFS,Inc. since
March 1998. Consultant to the Company since
May 1997. Held various positions with the
Company from January 1985 to April 1997,
including President, Chief Operating Officer,
Chief Financial Officer. Held various
positions with U.S. Global Investors Funds
from May 1985 to April 1997, including
Director, President, Chief Executive Officer
and other positions with United Shareholder
Services, Inc. from September 1988 to April
1997. Director of A&B Mailers, Inc. from
February 1988 to April 1997. Director,
Executive Vice President, Chief Executive
Officer and other positions with Security
Trust & Financial Corp. from November 1991 to
April 1997. Executive Vice President, Chief
Financial Officer and other positions with
U.S. Global Accolade Funds from September 1988
to April 1997. Chief Financial Officer and
Director of USACI from February 1995 to April
1997. President, Chief Executive Officer and
other positions with United Services Insurance
Funds from June 1994 to April 1997. Vice
President and other positions with Pauze/
Swanson United Services Funds from October
1993 to February 1996.
J. Michael Edwards 31 Chief Accounting Officer of the Company since
May 1997 and employed by the Company beginning
February 1997. Chief Accounting Officer of
USSI and STFC since June 1997 and September
1997, respectively. Assistant Treasurer of
USGIF and USGAF since January 1998. Assistant
Controller for Grant-Lydick Beverage Co. from
January 1995 to February 1997.Staff Accountant
with PricewaterhouseCoopers LLP from August
1992 through January 1995.
Frank E. Holmes 43 Chairman of the Board of Directors and Chief
Executive Officer of the Company since October
27, 1989, and President from October 1989 to
September 1995 and from April 1997 to February
1998. Director of STFC since October 1989.
President, Chief Executive Officer and Trustee
of USGIF since January 1990. President, Chief
Executive Officer and Trustee of USGAF since
April 1993. Director of U.S. Global Brokerage,
Inc. since October 1997. Director of U.S.
Global Investors (Guernsey) Limited, a wholly
owned subsidiary of the Company, and of the
Guernsey Funds managed by that Company since
September 1993. Trustee of Pauze/Swanson
United Services Funds from October 1993 to
February 1996. Director of Franc-Or Resource
Corp. from November 1994 to November 1996.
Director of Adventure Capital from January
1996 to July 1997 and Director of Vedron Gold,
Inc. from August 1996 to March 1997. Director
of 71316 Ontario, Inc. since April 1987.
Director, President and Secretary of F.E.
Holmes Organization, Inc. since July 1978.
Director of Marleau, Lemire Inc. from January
1995 to January 1996. Director of USACI since
February 1995, Director and President from
February 1995 to June 1997.
U.S. Global Investors, Inc.
Annual Report on Form 10-K 1998 Page 7
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Name Age Position
- -------------------- ------- ----------------------------------------------
Creston A. King, III 35 Vice President of Fixed Income Trading since
December 1997 and employee of the Company
since September 1993. Director and President
of U.S. Global Brokerage, Inc. since January
1998 and Secretary since March 1998. Research
Analyst for Southwest Securities, Inc. from
June 1992 to August 1993.
Marie A. Kriley 55 Vice President, Mailing Services of the
Company since December 1991. Chief Executive
Officer of A&B Mailers, Inc. since February
1983 and has held various other positions
since April 1983.
Thomas F. Lydon, Jr. 38 Director of the Company since June 1997.
Chairman of the Board and President of Global
Trends Investments since April 1996.President,
Vice President and Account Manager with Fabian
Financial Services, Inc. from April 1984 to
March 1996.
Susan B. McGee 39 President of the Company since February 1998,
General Counsel since March 1997, Corporate
Secretary since September 1996. Executive Vice
President of the Company from March 1997 to
February 1998, Vice President from September
1995 to March 1997; Associate Counsel from
August 1994 to March 1997. Executive Vice
President, General Counsel of USGIF since
March 1997; Secretary of USGIF since September
1995. President of STFC since April 1997; Vice
President, Counsel from September 1992 to
April 1997; Vice President-Operations of STFC
from May 1993 to December 1994. Executive Vice
President and General Counsel to USGAF since
March 1997, and Secretary since January 1998.
Vice President, Assistant Secretary of USGAF
from September 1995 to March 1997. Vice
President, Secretary of A&B Mailers, Inc.
since March 1997 and Director since May 1997.
President, Secretary of USSI since March 1997
and Director since May 1997. Director of USACI
since May 1997.
J. Stephen Penner 57 Director since May 1997. Senior Vice President
of LCG Associates, and since March 1982 has
held various positions with that Company.
Senior Vice President of LCG Holdings, Inc.
since November 1992.
Jerold H. Rubinstein 60 Director of the Company since October 1989.
Chairman and Chief Executive Officer of Xtra
Music since July 1997. Chairman of the Board
of Directors and Chief Executive Officer of
DMX Inc. from May 1986 to July 1997.
Roy D. Terracina 52 Director of the Company since December 1994
and Vice Chairman of the Board of Directors
since May 1997. Director of STFC since August
1992. Currently a director of Norwood Pro-
motional Products, Inc. Owner of Sunshine
Ventures, Inc., an investment company, since
January 1994. Owner/President of Sterling
Foods, Inc., food manufacturer, from May 1984
to December 1993.
None of the directors or executive officers of the Company has a family
relationship with any of the other directors or executive officers.
Each member of the board of directors is elected for a one-year term or until
their successors are elected and qualified. The executive officers of the
Company are appointed by, and serve at the pleasure of, the board of directors.
The Company does not have a Nominating Committee. The Company's Compensation
Committee consists of Messrs. Holmes, Terracina and Rubinstein. The Company's
Audit Committee consists of Messrs. Duncan, Rubinstein and Terracina. The Stock
Option Committee consists of Messrs. Rubinstein and Terracina.
COMPLIANCE WITH SECTION 16(A) OF THE 1934 ACT
Section 16(a) of the 1934 Act requires directors and officers of the Company,
and persons who own more than 10 percent of the Company's class A common stock,
to file with the Securities and Exchange Commission ("SEC") initial
U.S. Global Investors, Inc.
Annual Report on Form 10-K 1998 Page 8
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reports of ownership and reports of changes in ownership of the stock.
Directors, officers and more than 10 percent shareholders are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms they
file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the year ended June 30, 1998, all Section 16(a)
filing requirements applicable to its directors, officers and more than 10
percent beneficial owners were met.
ITEM 11. EXECUTIVE COMPENSATION
LONG TERM
COMPENSATION
| -------------------------------
ANNUAL COMPENSATION | AWARDS
- --------------------------------------------------------------------------------------- | -------------------------------
(a) (b) (c) (d) (e) | (f) (g)
OTHER |
NAME AND ANNUAL | RESTRICTED NUMBER OF
PRINCIPAL POSITION COMPEN- | STOCK OPTIONS/
DURING FY 98 YEAR SALARY BONUS SATION(1) | AWARDS(2) SARS(3)
- ----------------------- ------- ----------- ----------- -------------- | ------------- --------------
Frank E. Holmes 1998 $315,917 $164,902 $37,405 | -- --
Chairman, Chief 1997 $304,079 $128,848 $36,277 | $5,683 0
Executive Officer 1996 $304,355 $140,240 $35,937 | $1,268 1,000
|
Susan B. McGee 1998 $106,786 $55,439 $16,024 | $1,328 --
President, Secretary, 1997 $74,850 $34,818 $9,173 | $9,995 25,000
General Counsel 1996 $65,522 $22,757 $3,697 | $3,461 11,000
The Company has intentionally omitted columns (h) and (i) as they are not
applicable.
Includes amounts identified for 401(k) contributions (calculable through the end
of June 30, 1998, fiscal year) and amounts for company savings plans (calculable
through the end of the June 30, 1998, fiscal year).
<FN>
- ------------------------
(1) Does not include the cost to the Company of incidental personal use of
automobiles furnished by the Company for use in its business and certain
other personal benefits. The Company believes that the aggregate amounts of
such omitted personal benefits do not exceed the lesser of $50,000 or 10
percent of the total of annual salary or bonus reported [in columns (c) and
(d)] for the named executive officers.
Perquisites and other personal benefits which exceed 25 percent of total
perquisites are as follows:
NAME DESCRIPTION 1998 1997 1996
---- ----------- ---- ---- ----
Frank E. Holmes Club dues $5,901 $5,773 $5,433
Susan B. McGee Club dues $3,090 $1,478 $1,345
Car allowance $7,306 $609 $0
(2) The dollar value of the shares reflected in the table is based on the
market value for the shares on the date the shares were awarded. Restricted
stock balances of the Company's class A common stock as of June 30, 1998,
are as follows:
NUMBER OF RESTRICTED VALUE OF RESTRICTED
NAME SHARES HELD AT 06/30/98 SHARES HELD AT 06/30/98
---- ----------------------- -----------------------
Frank E. Holmes 4,972 $9,944
Susan B. McGee 5,389 $10,778
</FN>
U.S. Global Investors, Inc.
Annual Report on Form 10-K 1998 Page 9
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The closing price on June 30, 1998, was $2.00 per share. No dividends have
ever been paid on the Company's class A common stock; however, the
restricted stock would be eligible for dividends should one be declared.
(3) All options pertain to Company class A common stock.
INCENTIVE COMPENSATION
During the last fiscal year, the individual listed in the compensation table
received the majority of her bonus compensation from individual performance pay
arrangements. Ms. McGee, as a member of the Legal Department, received a bonus
based on the timing, accuracy and completion of materials for the various boards
of directors/trustees supported by the department and regulatory filings for the
various entities.
The named executive officers except Mr. Holmes, also participated in a team
performance pay program based on each employee's annual salary to recognize
monthly completion of departmental goals. During fiscal year 1997, part of the
team bonus was payable in the Company's class A common stock. The portion of the
team performance program paid in Company stock was suspended at the beginning of
fiscal year 1998.
PROFIT SHARING PLAN
In June 1983, the Company adopted a profit sharing plan in which all qualified
employees who have completed one year of employment with the Company are
included. Subject to board action, the Company may contribute up to 15 percent
of its net income before taxes during each fiscal year, limited to 15 percent of
qualifying salaries, to a profit sharing plan, the beneficiaries of which are
the eligible employees of the Company. The Company's contribution to the plan is
then apportioned to each employee's account in the plan in an amount equal to
the percentage of the total basic compensation paid to all eligible employees
which each employee's individual basic compensation represents. An employee
generally becomes eligible to receive a distribution from the plan upon the
occurrence of retirement, death, total disability or termination. Distributions
of an employee's account may be made either in one lump sum or in installments
over a period not exceeding 15 years. For the fiscal year ended June 30, 1998,
the Company did not contribute to the profit sharing plan. There have been no
recent material changes to the plan.
401(K) PLAN
The Company adopted a 401(k) plan in October 1990 for the benefit of all
employees. The Company will contribute 50 cents for every $1.00 of the first 4
percent of an employee's pay deferment. The Company will make contributions to
employee accounts at the end of each plan year if the employee is still employed
on that date. New employees may enroll on any quarterly entry date following six
months of employment. The Plan offers many investment options which represent
different levels of risk and return. Employees have the option of investing in
the majority of the U.S. Global Investors Funds ("USGIF") and U.S. Global
Accolade Funds ("USGAF") funds offered and the Company's class A common stock.
For the fiscal year ended June 30, 1998, the Company has accrued $38,123 for its
401(k) plan matching contribution.
SAVINGS PLANS
The Company has continued the program pursuant to which it offers employees,
including its executive officers, an opportunity to participate in savings
programs using managed investment companies, which essentially all such
employees accepted. Limited employee contributions to an Individual Retirement
Account are matched by the Company. Similarly, certain employees may contribute
monthly to the Tax Free Fund, the Company will match these contributions on a
limited basis. Beginning in fiscal year 1997, a similar savings plan utilizing
UGMA accounts has been offered to employees to save for their children's
education. Under each program, if the employee ceases to make personal
contributions or withdraws the money, their participation in the program is
terminated and they may not
U.S. Global Investors, Inc.
Annual Report on Form 10-K 1998 Page 10
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participate in the future. For the fiscal year ended June 30, 1998, the Company
match aggregated in all programs to $61,102, reflected in base salary expense.
STOCK OPTION PLANS
In March 1985, the board of directors of the Company adopted an Incentive Stock
Option Plan ("1985 Plan") which the shareholders of the Company approved on
April 2, 1985. Under the terms of the 1985 Plan, certain executives and key
salaried employees of the Company and its subsidiaries were granted options to
purchase shares of the Company's class A common stock. The maximum number of
shares of class A common stock authorized for issuance under the 1985 Plan was
200,000 shares (subject to adjustment in the event of reorganization, merger,
consolidation, liquidation, recapitalization, or stock splits). Shares subject
to purchase pursuant to an option granted under the 1985 Plan may be either
authorized but unissued shares or shares that were once issued and subsequently
reacquired by the Company.
The 1985 Plan was amended on November 7, 1989 and December 6, 1991. In December
1991, it was amended to provide provisions to cause the plan and future grants
under the plan to qualify under 1934 Act Rule 16b-3. The 1985 Plan was
administered by a committee consisting of the two outside members of the board
of directors of the Company. The 1985 Plan terminated on December 31, 1994.
Options granted under the 1985 Plan were granted for a term of up to five years
for employees who own more than 10 percent of the total combined voting power of
all classes of the Company's stock and for up to ten years for other employees.
The options were granted at an exercise price of not less than 100 percent of
the fair market value as of the date of the grant, or 110 percent of the fair
market value for any officer or employee holding more than 10 percent of the
combined voting power of the Company's stock. The aggregate fair market value of
the class A common stock for which any employee was granted options in any
calendar year could not exceed $100,000 plus any unused carry-over from a
preceding year. All of the options were granted at or above market price on the
date of the grant. As of September 9, 1998, grants covering 88,000 shares have
been exercised under the 1985 plan. Grants covering 49,000 shares have expired.
In November 1989 the board of directors adopted the 1989 Non-Qualified Stock
Option Plan (the "1989 Plan") which provides for the granting of options to
purchase shares of the Company's class A common stock to directors, officers and
employees of the Company and its subsidiaries. On December 6, 1991, shareholders
approved and amended the 1989 Plan to provide provisions to cause the plan and
future grants under the plan to qualify under 1934 Act Rule 16b- 3. The 1989
Plan is administered by a committee consisting of two outside members of the
board of directors. The maximum number of shares of class A common stock
initially approved for issuance under the 1989 Plan is 800,000 shares. During
the fiscal year ended June 30, 1998, there were no grants. As of September 9,
1998, grants covering 393,000 shares have been exercised under the 1989 plan.
Grants covering 120,000 shares have expired.
The board of directors, at a meeting held on July 14, 1992, amended the Stock
Option Agreement for stock options granted during November 1989 to provide for
an option period of ten years. All optionees accepted the amendment.
In April 1997, the board of directors adopted the 1997 Non-Qualified Stock
Option Plan (the "1997 Plan"), which shareholders approved on April 25, 1997. It
provides for the granting of stock appreciation rights ("SARs") and/or options
to purchase shares of the Company's class A common stock to directors, officers
and employees of the Company and its subsidiaries. The 1997 Plan expressly
requires that all grants under the plan qualify under 1934 Act Rule 16b-3. The
1997 Plan is administered by a committee consisting of two outside members of
the board of directors. The maximum number of shares of class A common stock
initially approved for issuance under the 1997 Plan is 200,000 shares. During
the fiscal year ended June 30, 1998, there were no grants. As of September 9,
1998, grants covering 6,000 shares have been exercised under the 1997 Plan, and
grants covering 3,000 shares have expired. Shares available for stock option
grants under the 1989 Plan and the 1997 Plan aggregate to approximately 65,400
and 54,500 shares, respectively, on September 9, 1998.
The following table shows, as to each officer of the Company listed in the cash
compensation table, grants of stock options and freestanding stock appreciation
rights made during the last fiscal year.
U.S. Global Investors, Inc.
Annual Report on Form 10-K 1998 Page 11
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| POTENTIAL REALIZED
| VALUE AT ASSUMED
| ANNUAL
| RATES OF STOCK PRICE
| APPRECIATION
INDIVIDUAL GRANTS | FOR OPTION TERM
- --------------------------------------------------------------------------------------- | -------------------------------
(a) (b) (c) (d) (e) | (f) (g)
NUMBER OF % OF TOTAL |
SECURITIES OPTIONS/SARS EXERCISE |
UNDERLYING GRANTED TO OR BASE |
OPTIONS/SARS EMPLOYEES IN PRICE |
NAME GRANTED FISCAL YEAR ($/SH) EXPIRATION DATE | 5% ($) 10% ($)
- ------------------ -------------- --------------- ---------- ----------------- | ------------- -------------
Frank E. Holmes 0/0 -- -- -- | -- --
Susan B. McGee 0/0 -- -- -- | -- --
The following table shows, as to each of the officers of the Company listed in
the cash compensation table, aggregated option exercises during the last fiscal
year and fiscal year-end option values.
(a) (b) (c) (d) (e)
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN THE MONEY
NUMBER OF OPTIONS/SARS OPTIONS/SARS AT
SHARES AT FY-END FY-END($)
ACQUIRED ON VALUE --------------- ----------------
NAME EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
UNEXERCISABLE UNEXERCISABLE
- ------------------- -------------- ---------- --------------- ----------------
Frank E. Holmes 0 0 200,400/600 $12,250/$0
Susan B. McGee 0 0 35,700/800 $4,500/$0
COMPENSATION OF DIRECTORS
The Company may grant non-employee directors options under the Company's 1989
and 1997 Stock Option Plans. Their compensation is subject to a minimum of
$3,000 in any quarter paid in arrears. During the fiscal year ended June 30,
1998, the non-employee directors each received cash compensation of $12,000. Mr.
Terracina is also a director of STFC where he received cash compensation of
$2,400. Directors are reimbursed for reasonable travel expenses incurred in
attending the meetings held by the board of directors.
REPORT ON EXECUTIVE COMPENSATION
The board appointed Messrs. Holmes, Terracina and Rubinstein as members of the
Executive Compensation Committee during fiscal year 1997, and they continue to
serve on the committee. There are no compensation committee interlocks or
insider participations to report. The board of directors reviews Mr. Holmes'
compensation annually to determine an acceptable base compensation, reflecting
an amount competitive with industry peers and taking into account the relative
cost of living in San Antonio, Texas. The base pay of the executives is
relatively fixed, but the executive has the opportunity to increase his/her
compensation by (1) participating in team building programs to enhance
operational and fiscal efficiencies throughout the Company with a percent of
resulting savings flowing to the executive and (2)
U.S. Global Investors, Inc.
Annual Report on Form 10-K 1998 Page 12
- --------------------------------------------------------------------------------
participating directly in retirement and savings programs whereby the Company
will contribute amounts relative to the executive's contribution.
The Company has utilized option grants under the 1985 Plan, the 1989 Plan, and
the 1997 Plan to induce qualified individuals to join the Company with a base
pay consistent with the foregoing, thereby providing the individual with an
opportunity to benefit if there is significant Company growth. Similarly,
options have been utilized to reward existing employees for long and faithful
service and to encourage them to stay with the Company. Messrs. Rubinstein and
Terracina constitute the Stock Option Committee of the board of directors. This
Committee acts upon recommendations of the Chief Executive Officer, President
and Executive Vice President.
COMPANY PERFORMANCE PRESENTATION
The graph below compares the cumulative total return for the Company's class A
common stock to the cumulative total return for the S&P 500 Composite Index and
the Financial Times Gold Mine Index for the Company's last five fiscal years.
The graph assumes an investment of $100 in the class A common stock and in each
index as of June 30, 1993, and that all dividends are reinvested.
[GRAPHIC: Linear graph plotted from data in table below]
U.S. GLOBAL INVESTORS, INC.
JUNE 30, 1993 THROUGH JUNE 30, 1998
FINANCIAL
TIMES S&P
GOLD MINE 500
DATE INDEX INDEX GROW
--------- ------ ------ ------
30-Jun-93 100.00 100.00 100.00
30-Jul-93 106.31 99.47 112.50
31-Aug-93 98.74 102.89 95.00
30-Sep-93 88.09 101.86 80.00
29-Oct-93 103.62 103.84 95.00
30-Nov-93 101.34 102.50 97.50
31-Dec-93 116.87 103.53 112.50
31-Jan-94 113.68 106.90 115.00
28-Feb-94 106.25 103.69 105.00
31-Mar-94 106.90 98.94 107.50
29-Apr-94 99.60 100.08 87.50
31-May-94 102.64 101.33 97.50
30-Jun-94 100.30 98.61 92.50
29-Jul-94 103.01 101.72 85.00
31-Aug-94 109.36 105.54 85.00
30-Sep-94 122.06 102.70 92.50
31-Oct-94 113.22 104.84 82.50
30-Nov-94 99.22 100.70 75.00
30-Dec-94 103.76 101.94 65.00
31-Jan-95 86.02 104.41 67.50
28-Feb-95 90.88 108.18 67.50
31-Mar-95 101.35 111.14 67.50
28-Apr-95 101.33 114.25 67.50
31-May-95 99.84 118.39 55.00
30-Jun-95 101.23 120.91 52.50
31-Jul-95 102.41 124.76 52.50
31-Aug-95 103.59 124.72 50.00
29-Sep-95 104.29 129.72 52.50
31-Oct-95 90.48 129.07 42.50
30-Nov-95 99.12 134.37 37.50
29-Dec-95 100.49 136.71 32.50
31-Jan-96 121.09 141.17 60.00
29-Feb-96 122.90 142.15 57.50
29-Mar-96 122.58 143.28 54.68
30-Apr-96 122.19 145.20 55.00
31-May-96 124.83 148.52 67.50
28-Jun-96 105.91 148.85 57.50
31-Jul-96 104.81 142.04 47.50
30-Aug-96 106.69 144.72 50.00
30-Sep-96 97.25 152.56 53.76
31-Oct-96 98.62 156.54 47.50
29-Nov-96 98.48 168.03 47.50
31-Dec-96 95.77 164.42 47.50
31-Jan-97 89.19 174.50 55.00
28-Feb-97 100.18 175.53 47.50
31-Mar-97 85.97 168.05 41.26
30-Apr-97 77.13 177.87 35.00
30-May-97 82.45 188.28 36.26
30-Jun-97 73.15 196.47 40.00
31-Jul-97 74.27 211.81 47.50
29-Aug-97 74.15 199.65 48.75
30-Sep-97 80.09 210.26 43.75
31-Oct-97 65.21 203.01 43.75
28-Nov-97 51.34 212.06 45.00
31-Dec-97 55.57 215.40 37.50
30-Jan-98 58.71 217.58 40.00
27-Feb-98 56.57 232.91 47.50
31-Mar-98 60.14 244.55 52.50
30-Apr-98 68.19 246.76 51.25
29-May-98 57.09 242.12 45.00
30-Jun-98 52.19 251.67 40.00
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
CLASS C COMMON STOCK (VOTING STOCK). At September 9, 1998, there were 496,830
shares of the Company's class C common stock outstanding. The following table
sets forth, as of such date, information regarding the beneficial ownership of
the Company's class C common stock by each person known by the Company to own 5
percent or more of the outstanding shares of class C common stock.
U.S. Global Investors, Inc.
Annual Report on Form 10-K 1998 Page 13
- --------------------------------------------------------------------------------
CLASS C PERCENT OF
NAME AND ADDRESS COMMON SHARES OUTSTANDING SHARES ISSUED
OF BENEFICIAL OWNER BENEFICIALLY OWNED SHARES OWNED OUTSTANDING
- ------------------------------ ---------------------- ------------------ ------------------
Frank E. Holmes 1,373,402(1) 387,280 77.95%
7900 Callaghan Road
San Antonio, TX 78229
Marleau, Lemire Inc. 72,720 72,720 14.64%
1 Place Ville Marie
Suite 3601
Montreal, Quebec H3B 3P2
<FN>
(1) Includes 586,122 shares of class C common stock underlying presently
exercisable class C common stock warrants held by Mr. Holmes and F. E.
Holmes Organization Inc., a corporation wholly owned by Mr. Holmes; 102,280
shares of class C common stock owned by F. E. Holmes Organization Inc.;
400,000 shares obtainable upon exercise of a class C common stock option
issued to Mr. Holmes; and 285,000 shares owned directly by Mr. Holmes.
</FN>
CLASS A COMMON STOCK (NON-VOTING STOCK). At September 9, 1998, there were
6,128,048 shares of the Company's class A common stock issued and outstanding.
The following table sets forth, as of such date, information regarding the
beneficial ownership of the Company's class A common stock by each person known
by the Company to own 5 percent or more of the outstanding shares of class A
common stock.
CLASS A COMMON SHARES
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY OWNED PERCENT OF CLASS
- ------------------------------------------------ -------------------------- ----------------------
Quest Management Co.-- New York, NY 391,205 (1) 6.21%
Frank E. Holmes-- San Antonio, TX 367,765 (2) 5.83%
Constable Partners, L.P.-- Radnor, PA 345,000 (3) 5.48%
Mason Hill Asset Management, Inc.-- New York, NY 409,000 (4) 6.49%
Heartland Advisors, Inc.-- Milwaukee, WI 502,000 (5) 7.97%
<FN>
- ------------------------
(1) Information is from Schedule 13G filed with the SEC on February 10, 1998.
(2) Detail of beneficial ownership set forth below under "Security Ownership of
Management."
(3) Information is from Schedule 13D, dated May 9, 1996, filed with the SEC.
(4) Mason Hill Asset Management, Inc. owns 250,500 shares or 4.02 percent.
Equinox Partners, LP owns 158,500 shares or 2.55 percent. Mason Hill Asset
Management, Inc. and Equinox Partners, L.P. may be deemed to be under the
common control of William W. Strong. Information is from Schedule 13D filed
with the SEC on March 18, 1997.
(5) Information is from Schedule 13D, dated January 30, 1998, filed with the
SEC.
</FN>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of September 9, 1998, information regarding
the beneficial ownership of the Company's class A and class C common stock by
each director and by all directors and officers as a group. Except as otherwise
indicated in the notes below, each director owns directly the number of shares
indicated in the table and has sole voting power and investment power with
respect to all such shares.
U.S. Global Investors, Inc.
Annual Report on Form 10-K 1998 Page 14
- --------------------------------------------------------------------------------
CLASS C COMMON STOCK CLASS A COMMON STOCK (1)
----------------------------- ------------------------------
BENEFICIAL OWNER NUMBER OF SHARES % NUMBER OF SHARES %
- ------------------------------ ----------------------------- ------------------------------
Bobby D. Duncan 4,931 0.99% 116,652 1.90%
Frank E. Holmes 1,373,402(2) 92.61% 368,965(3) 6.02%
Thomas F. Lydon, Jr. -- -- 10,000 0.16%
Susan B. McGee -- -- 47,120 0.77%
J. Stephen Penner -- -- 10,000 0.16%
Jerold H. Rubinstein -- -- 50,000 0.82%
Roy D. Terracina -- -- 89,100 1.45%
All directors and officers as a group 1,378,363 93.60% 734,722(4) 11.99%
(11 persons)
(1) Includes shares of class A common stock underlying presently exercisable
options held directly by each individual as follows: Mr. Duncan - 95,400
shares; Mr. Holmes - 200,400 shares; Mr. Lydon - 10,000 shares; Ms. McGee
- 35,700 shares; Mr. Penner - 10,000 shares; Mr. Rubinstein - 50,000
shares; and Mr. Terracina - 50,600 shares.
(2) Includes 586,122 shares of class C common stock underlying presently
exercisable class C common stock warrants held by Mr. Holmes and F. E.
Holmes Organization Inc., a corporation wholly owned by Mr. Holmes;
400,000 shares underlying a presently exercisable option held by Mr.
Holmes to purchase class C common stock; 102,280 shares of class C common
stock owned by F. E. Holmes Organization Inc.; and 285,000 shares owned
directly by Mr. Holmes.
(3) Includes 67,965 shares and options to obtain 201,000 shares of class A
common stock as well as 100,000 shares of class A common stock held by
F.E. Holmes Organization, Inc. a corporation wholly owned by Mr. Holmes.
Mr. Holmes' 67,965 shares also include 1,300 shares of class A common
stock owned separately by Mr. Holmes' wife. Mr. Holmes disclaims
beneficial ownership of these 1,300 shares of class A common stock.
(4) Includes the shares underlying presently exercisable options held by the
directors and officers listed above and an additional 26,900 of class A
common stock underlying presently exercisable options held by officers
other than those listed above.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
U.S. Global is invested in several of the mutual funds it manages. There is
incorporated in this Item 13 by reference that portion of the U.S. Global
Investors, Inc. Annual Report to Shareholders, attached to this Form 10-K as
Exhibit 13, appearing under Note O to the Consolidated Financial Statements.
During fiscal year 1998, the Company purchased 4,378 shares for $200,000 of Xtra
Music Limited, of which Jerold H. Rubinstein, a director of the Company, has
controlling interest. Additionally, during fiscal year 1998, the Company paid
Bobby D. Duncan, a director of the Company, approximately $60,000 in consulting
fees.
U.S. Global Investors, Inc.
Annual Report on Form 10-K 1998 Page 15
- --------------------------------------------------------------------------------
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
1. FINANCIAL STATEMENTS
The Consolidated Financial Statements are incorporated herein by re-
ference to the Company's Annual Report to Shareholders as an exhibit
hereto (see Item 8):
Report of Independent Accountants
Consolidated Balance Sheets at June 30, 1998 and 1997
Consolidated Statements of Operation for the three years
ended June 30, 1998
Consolidated Statements for Cash Flows for the three years
ended June 30, 1998
Consolidated Statements of Shareholders' Equity for the three
years ended June 30, 1998
Notes to Consolidated Financial Statements
2. FINANCIAL STATEMENT SCHEDULES
None
3. EXHIBITS
3.1 Third Restated and Amended Articles of Incorporation of Registrant,
incorporated by reference in the Registrant's Form 10-K for the
fiscal year ended June 30, 1996 (EDGAR Accession Number 0000754811-96-
000025).
3.2 By-Laws of Registrant, incorporated by reference to Exhibit D to the
Registrant's Registration Statement No. 33-33012 filed on Form S-8
with the Commission on January 30, 1990.
3.2a Amendment to Article II, Section 2 of the By-Laws, incorporated by
reference to Exhibit 3(e) to the Registrant's Form 10-K for the fiscal
year ended June 30, 1991.
3.2b Amendment to By-Laws of Registrant, incorporated by reference to
Exhibit 3(h) to the Registrant's Registration Statement No. 33-90518
filed on Form S-3 on March 16, 1995.
3.2c Amendment to By-Laws, incorporated by reference in the Registrant's
Form 10-K for the fiscal year ended June 30, 1996 (EDGAR Accession
No. 754811-96-000025).
10.1 Advisory Agreement dated October 27, 1989, by and between Registrant
and United Services Funds ("USF"),incorporated by reference to Exhibit
(4)(b) to the Registrant's Form 10-K for fiscal year ended June 30,
1990.
10.2 Advisory Agreement dated September 21, 1994, by and between Registrant
and Accolade Funds, incorporated by reference to Exhibit 10.2 to
Registrant's Form 10-K for fiscal year ended June 30, 1995 (EDGAR
Accession Number 0000754811-95-000002).
10.3 Sub-Advisory Agreement dated September 21, 1994, by and between
Registrant and Accolade Funds/Bonnel Growth Fund and Bonnel, Inc.,
incorporated by reference to Exhibit 10.3 to Registrant's Form 10-K
for fiscal year ended June 30, 1995(EDGAR Accession Number 0000754811-
95-000002).
U.S. Global Investors, Inc.
Annual Report on Form 10-K 1998 Page 16
- --------------------------------------------------------------------------------
10.4 Transfer Agency Agreement dated September 21, 1994, by and between
United Shareholder Services, Inc. ("USSI") and Accolade Funds/Bonnel
Growth Fund, incorporated by reference to Exhibit 10.4 to Registrant's
Form 10-K for fiscal year ended June 30, 1995 (EDGAR Accession Number
0000754811-95- 000002).
10.5 Transfer Agent Agreement by and between USSI and USF, incorporated by
reference to Exhibit 10(b)to the Registrant's Form 10-K for the fiscal
year ended June 30, 1989.
10.6 Loan Agreement between Registrant and Bank One, dated April 12, 1994,
and Modification Agreement, dated February 28, 1995,for $1,385,000 for
refinancing new building, incorporated by reference to Exhibit 10.8 to
Registrant's Form 10-K for fiscal year ended June 30, 1995 (EDGAR
Accession Number 0000754811-95-000002).
10.7 United Services Advisors, Inc. 1985 Incentive Stock Option Plan as
amended November 1989 and December 1991, incorporated by reference to
Exhibit 4(b) of the Registrant's Registration Statement No. 33-3012,
Post-Effective Amendment No. 2, filed on Form S-8 with the Commission
on April 23, 1997 (EDGAR Accession No.754811-97-000004).
10.8 United Services Advisors, Inc. 1989 Non-Qualified Stock Option Plan,
incorporated by reference to Exhibit 4(a) to the Registrant's Regi-
stration Statement No. 33-3012, Post-Effective Amendment No. 2, filed
on Form S-8 with the Commission on April 23, 1997 (EDGAR Accession No.
754811-97-000004).
10.9 U.S. Global Investors, Inc. 1997 Non-Qualified Stock Option Plan,
incorporated by reference to Exhibit 4 to the Registrant's Registra-
tion Statement No. 333-25699 filed on Form S-8 with the Commission on
April 23, 1997 (EDGAR Accession No. 7548111-97-000003).
10.10 Bookkeeping and Accounting Agreement by and between USSI and USF,dated
February 1, 1992, incorporated by reference to Exhibit E 1 to the
Registrant's Form 10-Q dated December 31, 1991.
10.11 Bookkeeping and Accounting Agreement by and between USSI and Accolade
Funds, dated September 21, 1994, incorporated by reference to Exhibit
10.21 to Registrant's Form 10-K for fiscal year ended June 30, 1995
(EDGAR Accession Number 0000754811-95-000002).
10.12 Distribution Agreement by and between USGB and U.S. Global Accolade
Funds dated September 3, 1998, filed herein.
10.13 Distribution Agreement by and between USGB and U.S. Global Investors
Funds dated September 3, 1998, filed herein.
11 Statement re: Computation of Per Share Earnings, filed herein.
13 Annual Report to Shareholders, filed herein.
21 List of Subsidiaries of the Registrant, filed herein.
23.1 Consent of Independent Accountant, Ernst & Young LLP, filed herein.
23.2 Consent of Independent Accountant, PricewaterhouseCoopers, filed
herein.
23.3 Consent of Independent Accountant, PricewaterhouseCoopers LLP, filed
herein.
24.1 Power of Attorney to file 10-K, filed herein.
24.2 Power of Attorney to file amendments to 10-K, filed herein.
27 Financial Data Schedule, filed herein.
U.S. Global Investors, Inc.
Annual Report on Form 10-K 1998 Page 17
- --------------------------------------------------------------------------------
(b) Reports on Form 8-K
One Form 8-K was filed on June 11, 1998, to report a change in Registrant's
certifying accountant.
U.S. Global Investors, Inc.
Annual Report on Form 10-K 1998 Page 18
- --------------------------------------------------------------------------------
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
U.S. GLOBAL INVESTORS, INC.
By: ______________________________
SUSAN B. MC GEE
Date: September 28, 1998 PRESIDENT, SECRETARY, GENERAL COUNSEL
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
SIGNATURE CAPACITY IN WHICH SIGNED DATE
- ------------------------ -------------------------- ---------------
/s/ Jerold H. Rubinstein Director September 18, 1998
- ------------------------
JEROLD H. RUBINSTEIN
/s/ Roy D. Terracina Director September 18, 1998
- ------------------------
ROY D. TERRACINA
/s/ Frank E. Holmes Chairman of the Board of Directors September 18, 1998
- ------------------------ Chief-Executive-Officer
FRANK E. HOLMES
/s/ Bobby D. Duncan Director September 18, 1998
- ------------------------
BOBBY D. DUNCAN
/s/ J. Stephen Penner Director September 18, 1998
- ------------------------
J. STEPHEN PENNER
/s/ Thomas F. Lydon Jr. Director September 18, 1998
- ------------------------
THOMAS F. LYDON, JR.
/s/ David J. Clark Chief Financial Officer September 18, 1998
- ------------------------ Chief Operating Officer
DAVID J. CLARK
/s/ J. Michael Edwards Chief Accounting Officer September 29, 1998
- ------------------------
J. MICHAEL EDWARDS