CHIEF CONSOLIDATED MINING COMPANY
866 Second Avenue
New York, New York 10017
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS IN LIEU OF ANNUAL
MEETING TO BE HELD DECEMBER 10, 1996
To the Shareholders of Chief Consolidated Mining Company:
Notice is hereby given that a Special Meeting of Shareholders
in Lieu of Annual Meeting of Chief Consolidated Mining Company will
be held at the Sheraton Park Avenue Hotel, 45 Park Avenue at 37th
Street (Park Avenue Room), New York City, New York 10016 on December
10, 1996 at 11:00 A.M. New York City time for the following
purposes:
(1) To elect five directors to serve during the ensuing year.
(2) To consider and act upon a proposal to approve and ratify
nonqualified stock options granted to the directors and
officers of the Company.
(3) To approve the selection of the firm of Arthur Andersen &
Co. as auditors for the Company for the current fiscal year.
(4) To transact such other business as may properly come before
the meeting and any adjournments thereof.
The holders of common and preferred stock of the Company
of record at the close of business on November 8, 1996 will be
entitled to notice of and to vote at this meeting and any
adjournments thereof.
By Order of the Board of Directors.
EDWARD R. SCHWARTZ
Secretary
November 11, 1996
WE URGE ALL SHAREHOLDERS TO ATTEND THE MEETING IN PERSON, IF
POSSIBLE. IF NOT, THEY ARE URGED TO DATE, SIGN AND RETURN THE PROXY
AS PROMPTLY AS POSSIBLE IN THE ENCLOSED ENVELOPE. NO POSTAGE IS
REQUIRED IF MAILED IN THE UNITED STATES. The Proxy may be revoked at
any time before it is voted, and shareholders executing proxies may
attend the meeting and vote there in person should they so desire.
Management of the Company desires all shareholders to take an
interest in the affairs of the Company and your interest can best be
evidenced by attendance at the forthcoming meeting. Without a quorum
in attendance the above matters to be taken up cannot be acted upon.
Expense of obtaining a quorum for the meeting can be kept at a
minimum if you attend the meeting either in person or by proxy.
PROXY STATEMENT
This Proxy Statement is furnished in connection with the
solicitation by the management of Chief Consolidated Mining Company
("the Company") of proxies to be used at the Special Meeting of
Shareholders in Lieu of Annual Meeting of the Company, to be held at
the Sheraton Park Avenue Hotel, 45 Park Avenue at 37th Street (Park
Avenue Room), New York, New York 10016 at 11:00 A.M. on December
10, 1996 and any adjournment or adjournments thereof. Proxy material
will first be mailed about November 11, 1996. The accompanying form
of Proxy is solicited on behalf of Management of the Company.
Shareholders will vote upon: (1) the election of five directors to
the Board of Directors of the Company; (2) the proposal to approve
and ratify nonqualified stock options granted to the directors and
officers of the Company; (3) the approval of the selection of
auditors of the Company; and (4) such other business as may properly
come before the meeting or any adjournments thereof.
The enclosed Proxy may be revoked at any time before it is
exercised by written notice to the Company bearing a later date than
the Proxy, and any shareholder attending the meeting may vote in
person whether or not the shareholder has previously submitted a
proxy. Each proposal is identified in the Proxy and the accompanying
Notice of Special Meeting of Shareholders in Lieu of Annual Meeting
and is set forth and commented upon in this Proxy Statement. The
election of directors is designated Proposal 1, the proposal to
approve and ratify nonqualified stock options granted to the
directors and officers of the Company is designated Proposal 2, and
the approval of the selection of auditors of the Company is
designated as Proposal 3. Where instructions are indicated, the
proxies will be voted in accordance therewith. Where no instructions
are indicated, the proxies will be voted FOR the nominees for
directors, FOR the approval and ratification of nonqualified stock
options, FOR the selection of auditors, all as described below, and
in their discretion with respect to any other business as may
properly come before the meeting and any adjournment or adjournments
thereof.
The By-Laws of the Company provide that the Annual Meeting of
the Shareholders be held on the third Tuesday in May of each year.
Since the forthcoming Shareholders' Meeting is being held on
December 10, 1996 in lieu of the May 21, 1996 (the third Tuesday in
May, 1996) the December 10, 1996 meeting is deemed to be a Special
Meeting of Shareholders.
The record date set by the Board of Directors for the
determination of stockholders entitled to vote is November 8, 1996.
On that date there were 5,195 shares of preferred stock and
6,024,009 shares of common stock outstanding and entitled to vote.
Holders of each class are entitled to one vote per share without
distinction as to class. Upon the election of directors,
shareholders have cumulative voting rights. Under cumulative voting,
shareholders may multiply the number of shares of stock held by them
by the number of positions to be filled and distribute the resulting
numbers of votes among any or all nominees in any manner they see
fit. The five nominees receiving the greatest number of votes will
be elected as directors. The cumulative votes represented by
management proxies will be distributed among management's five
nominees in management's discretion so as to elect as many
management nominees as possible. Shareholders representing a
majority of the outstanding shares entitled to vote at the meeting
must be present or represented by proxy to constitute a quorum. The
shares represented by a proxy submitted by a shareholder will be
counted for the purpose of determining whether a quorum is present;
however, if the shareholder abstains from voting on a particular
proposal, the proxies will not vote those shares on the proposal.
VOTING SECURITIES AND
PRINCIPAL STOCKHOLDERS
(a) The following table shows as of October 17, 1996 stock
ownership of all persons known to management to be beneficial
owners of more than 5% of the common stock of the Company:
Name and Address of Amount and Nature of
Percentage
Beneficial Owners Beneficial Ownership
of Class
Korea Zinc Co., Ltd. 500,000 shares
8.3 %
142 Nonnyon-Dong,
Gangnam-KU
Seoul, Korea
(b) The equity securities of the Company beneficially owned by
all directors, director nominees and officers, and by directors
and officers of the Company as a group, as of October 17, 1996,
are:
Title
of Name and Address Amount and Nature of
Percentage
Class of Beneficial Owner of Beneficial
Ownership* of Class
Common Stock
$0.50 par value:
James Callery 108,468 (1)(2)(9)
1.78 %
RD # 2, Box 2750
Charlotte, Vermont 05445
Paul Hines 65,000 (3)(9)
1.07%
12 Flying Cloud Road
Stamford, CT 06902
Edward R. Schwartz 105,100 (4)(5)(9)
1.73%
1165 Park Avenue
New York, N.Y. 10128
Victor V. Tchelistcheff
384 De Soto Drive
New Smyrna Beach, FL 32169 200 (9)
0.01%
Leonard Weitz 121,010 (6)(7)(9)
1.99%
11 Longview Lane
Chappaqua, New York 10514
Owned by all directors
and officers as a group 399,778 (8)(9)
6.38%
Preferred
Stock, $0.50
par value: None
*Each director and officer has sole voting and investment power with
respect to shares owned.
(1) Includes nonqualifed stock options previously approved by the
shareholders to purchase 60,000 shares held by James Callery.
(2) Does not include an aggregate of 10,500 shares owned by James
Callery's wife and children, in which shares Mr. Callery disclaims
any beneficial interest.
(3) Includes nonqualified stock option previously approved by the
shareholders to purchase 60,000 shares held by Paul Hines.
(4) Includes nonqualified stock options previously approved by the
shareholders to purchase 60,000 shares held by Edward R. Schwartz.
(5) Does not include 200 shares owned by Mr. Schwartz's wife, in
which shares Mr. Schwartz disclaims any beneficial interest.
(6) Includes 40,000 shares owned jointly with Leonard Weitz's wife
and nonqualified stock options previously approved by the
shareholders to purchase 60,000 shares held by Leonard Weitz.
(7) Does not include 18,000 shares owned by Leonard Weitz's wife, in
which shares Mr. Weitz disclaims any beneficial interest.
(8) Includes options to purchase an aggregate of 240,000 shares as
referred to at Notes (1), (3),(4), and (6), above.
(9) Does not include nonqualified stock options to purchase shares
of common stock granted to the following directors, which options
are subject to the approval of shareholders at the meeting (Proposal
2): Mr. Callery-60,000 shares; Mr. Hines-60,000 shares; Mr.
Schwartz-60,000 shares; Mr. Tchelistcheff-50,000 shares; and Mr.
Weitz-60,000 shares.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
The following information for each of the Company's last three
completed fiscal years is presented concerning the compensation of
the Leonard Weitz as Chairman, President and Chief Executive Officer
of the Company and A. Paul Mogensen, who served as President and
Chief Operating Officer of the Company during the years 1994 and
1995:
SUMMARY COMPENSATION TABLE
Name and Annual Long-Term
Principal Compensation Compensation All
Other
Position Year Salary Awards - Options
Compensation
Leonard Weitz 1995 $125,000(1) (2)
$50,000(3)
(Chairman 1994 $125,000(1) -
- -
and Chief Executive 1993 $125,000(1) -
-
Officer;
also President in
1993)
A. Paul Mogensen* 1995 $118,845(4)(5)
(President and Chief 1994 $ 77,157(4)(6)
Operating Officer 1993 $ 8,808(4)(7)
1994 and 1995;
consultant in 1993)
(*Mr. Mogensen resigned as an officer and director of the Company
effective July 1, 1996.)
(1) During each of the years 1993, 1994 and 1995, Leonard Weitz
received annual base salary under the terms of an employment
agreement dated January 4, 1988, which agreement was to expire
September 30, 1996. A new employment agreement was entered into
between the Company and Leonard Weitz, effective as of September 1,
1996. Under the terms of the new employment agreement, Mr. Weitz
will be employed as Chairman, President and Chief Executive Officer
of the Company for a five year period ending August 31, 2001. Under
the new employment agreement, Leonard Weitz will receive an annual
base salary of $175,000 and such bonuses as the Board of Directors
of the Company may determine.
(2) See "Option Grants During Fiscal Year Ended December 31, 1995"
and "Option Exercises During Fiscal Year Ended December 31, 1995 and
Option Values on December 31, 1995", respectively, for information
concerning nonqualified options to purchase 60,000 shares granted to
Leonard Weitz by the Board of Directors of the Company, subject to
shareholder approval at the meeting, and the exercise by Leonard
Weitz in 1995 of incentive stock options for the purchase of 40,000
shares.
(3) On September 20, 1995, the Board of Directors of the Company
awarded a $50,000 bonus payment to Leonard Weitz on the condition
that Korea Zinc Co., Ltd. consummated by September 30, 1995 its
purchase of 500,000 shares of the Company's common stock. The Board
also approved on September 30, 1995 a $50,000 three-year loan to Mr.
Weitz, the loan to bear interest at the prime rate, adjustable
quarterly. Said stock purchase was timely made by Korea Zinc Co.,
Ltd. See "Voting Securities and Principal Stockholders". The award
of the bonus and approval of the loan were made by the Board of
Directors to Mr. Weitz based upon his indication to the Board of
Directors that he intended to exercise his incentive stock option to
purchase 40,000 shares of the Company's common stock by November 14,
1995. See "Option Exercises During Fiscal Year Ended December 31
1995 and Option Values on December 31, 1995", below. Mr. Weitz
exercised the option on November 10, 1995 and purchased the 40,000
shares of the Company's common stock.
(4) Prior to Mr. Mogensen's resignation as a director and President
of the Company effective July 1, 1996, Mr. Mogensen was employed
under an arrangement whereby he was compensated based upon time
devoted by him to the affairs of the Company in his capacity as an
officer. Mr. Mogensen could elect to receive such compensation all
or partly in the Company's stock during 1994 and the first quarter
of 1995. For the purpose of determining the number of shares to be
issued to him, the shares were valued at $3.50 per share for shares
issued to him in 1994 and for January, 1995 and at $5.625 for shares
issued to him for the month of February, 1995. Mr. Mogensen's
compensation was thus increased to the extent that the market price
for his shares on the dates of issuance exceeded the foregoing per
share values.
(5) Comprised of cash compensation of $99,512 and 3,000 shares of
the Company's common stock received as compensation and having a
market value of $19,333 on the dates of issuance.
(6) Comprised of cash compensation of $6,250 and 14,500 shares of
registrant's common stock received as compensation and having a
market value of $70,907 on the dates of issuance.
(7) Consulting fees received in 1993 prior to becoming an officer.
OPTION GRANTS DURING FISCAL YEAR ENDED DECEMBER 31, 1995
On December 6, 1995, registrant's Board of Directors granted,
subject to shareholder approval, nonqualified options to purchase
40,000 shares of the Company's common stock to each of the following
four directors and officers of the Company: James Callery, Paul
Hines, A. Paul Mogensen and Edward R. Schwartz, at an exercise price
of $6.9375 per share, exercisable over a ten year period so long as
the optionee remained a director or officer. The options granted to
Mr. Mogensen were canceled upon his resignation as a director and
officer effective July 1, 1996. For further information concerning
these options and the vote to be taken at the meeting upon the
options, see Proposal 2. The Company has never issued any stock
appreciation rights to its officer and directors.
OPTION EXERCISES DURING FISCAL YEAR
ENDED DECEMBER 31, 1995 AND OPTION VALUES
ON DECEMBER 31, 1995
The following table contains, with respect to stock options
held by Leonard Weitz and A. Paul Mogensen, information as to
options exercised during the year 1995, the aggregate dollar
value realized upon exercise, the total number of unexercised
options held on December 31, 1995 and the aggregate dollar
value of the in-the-money, unexercised options held on December
31, 1995.
Shares Number of Unexercised Value of
Unexercised
Acquired or Value Options at in-
the-money options at
Name Exercised Realized December 31, 1995
December 31, 1995 (5)
Nonqualified:
Leonard Weitz None None 60,000 (1)(2)
$450,000
A. Paul Mogensen None None 60,000 (3)
$450,000
Incentive:
Leonard Weitz 40,000(4) $205,000 None
Total 120,000
(1) Options held are fully exercisable.
(2) Nonqualified stock options previously approved by
shareholders. Does not include nonqualifed stock options for
60,000 shares granted by the Board of Directors on August 8,
1996, subject to shareholders approval at the meeting (see
Proposal 2).
(3) Nonqualifed stock options previously approved by the
shareholders. Mr. Mogensen resigned as a director and officer
effective July 1, 1996. The said nonqualified stock options
held by Mr. Mogensen were canceled as of said date as a result
of his resignation
(4) Incentive Stock Options under the Company's Incentive Stock
Option Plan.
(5) Values are calculated by subtracting the exercise price
from the closing price of the Company's common stock on the
Pacific Stock Exchange on December 31, 1995.
Compensation of Directors
Leonard Weitz, Chairman of the Board and Chief Executive
Officer of the Company, is employed through August 31, 2001 under an
employment agreement dated September 1, 1996. See "Compensation of
Directors and Executive Officers - Summary Compensation Table",
above, for further details concerning Mr. Weitz's employment
agreement.
A. Paul Mogensen, who served as a director and President of the
Company during 1995, received compensation for his services based
upon time spent on the Company's business in his capacity as
President. See "Compensation of Directors and Executive Officers -
Summary Compensation Table" for information concerning the amounts
of Mr. Mogensen's compensation. Mr. Mogensen resigned as a director
and President of the Company effective July 1, 1996.
During 1995, each director who was not an officer of the
Company received an annual retainer of $1,200 and an attendance fee
of $100 for each board meeting attended. Edward R. Schwartz, the
Secretary-Treasurer of the Company, who is a director, did not
receive a salary in 1995; he received fees at twice the rate as
directors who are not officers of the Company. In August, 1996, the
Board of Directors revised the method of payment to outside
directors and to Mr. Schwartz. Each outside director of the Company
now receives an annual fee of $5,000; no attendance fees are paid.
Mr. Schwartz, as Secretary-Treasury of the Company, receives a
$10,000 annual fee in lieu of salary. The Board of Directors also
set a rate of $750 per day for services to be performed by each
outside director of the Company that are in addition to these
services regularly performed by him as a director.
INFORMATION CONCERNING STOCK OPTIONS
HELD BY DIRECTORS AND OFFICERS
Action is to be taken at the meeting with respect to the approval
of nonqualified options to purchase a total of 290,000 shares
granted by the Board of Directors to the directors and officers of
the Company, subject to shareholders approval (see Proposal 2).
The table below shows the following information with respect to
outstanding nonqualified stock options to purchase a total of
240,000 shares as of October 17, 1996 with respect to each of four
directors of the Company to whom such options were granted, all of
said options having previously been approved by the shareholders of
the Company: name of optionee, date of grant, expiration date,
number of shares under option and exercise price per share.
TABLE OF STOCK OPTIONS CURRENTLY OUTSTANDING
Name of Date of Expiration Date No. Of
Shares Exercise Price
Optionee Grant of Option Under Option Per
Share
Non Qualified
Stock Options
James Callery 12/10/93 12/10/03 50,000
$3.50
9/19/94 9/19/04 10,000
$3.50
Paul Hines 9/19/94 9/19/04 60,000
$3.50
Edward R. Schwartz12/10/93 12/10/03 30,000
$3.50
9/19/94 9/19/04 30,000
$3.50
Leonard Weitz 12/10/93 12/10/03 30,000
$3.50
9/19/94 9/19/04 30,000
$3.50
TOTAL 240,000
======
PROPOSAL 1: ELECTION OF DIRECTORS
Five directors are proposed to be elected at the meeting to
serve until the meeting of shareholders to be held in 1997 and
until their successors shall be elected and qualify. The persons
named in the enclosed form of proxy intend to vote such proxy for
the election of the five nominees named below as directors of the
Company. If any nominee shall become unavailable for election, the
proxies will be voted for the election such persons, if any, as
shall be designated by the Board of Directors. It is not anticipated
that any nominee will be unavailable for election.
Each of the nominees was elected to the Board of Directors at
the meeting of shareholders held on December 6, 1995, except Victor
V. Tchelistcheff was elected by the Board of Directors on August 8,
1996 to replace A. Paul Mogensen. Mr. Mogensen had resigned from
the Board effective July 1, 1996.
In electing directors, holders of common stock have cumulative
voting rights; that is, each holder of record of common stock shall
be entitled to as many votes as shall equal the number of shares
owned of record multiplied by the number of directors to be elected,
and may cast all of such votes for a single director or may
distribute them among all or some of the directors to be voted for,
as such holder sees fit. Unless contrary instructions are given, the
persons named on the proxy will have discretionary authority to
accumulate votes in the same manner.
Certain information for each nominee for director is set forth
below:
Name Age Director Since: Business Experience During
Past Five Years
Leonard Weitz 67 1967 Chairman and Chief Executive
Officer of the Company
since 1971; President from 1971
to December 1993 and from August 1996 to
present.
Edward R. Schwartz 86 1974 Secretary and Treasurer of
the Company
since 1979; independent
consultant since prior to 1991.
James Callery 59 1980 Engaged in management of oil and
gas, forestry, agriculture and other
investments since prior to 1991.
Paul Hines 59 1994 Financial and management
consultant and Managing Director of Westerly
Partners, financial and management consultants since
1993; Managing Director of the Leadership Group,
consultants to management from 1991 to 1992.
Victor V. Tchelistcheff 67 August, 1996 President of VVT
Consultants, performs international management and
cross cultural communications services to clients in
cement, minerals, construction and real estate
development fields since prior to 1991. During 1993
and 1994, also worked as volunteer
for International Executive Services Corps, a non-
profit organization, as a Country Director
in Moscow, Russia on matters involving emerging market
assistance programs.
PROPOSAL 2: APPROVAL AND RATIFICATION OF NONQUALIFIED STOCK
OPTIONS GRANTED TO DIRECTORS AND OFFICERS OF THE COMPANY
The Board of Directors recommends the approval of
nonqualified stock options granted by the Board of Directors to
directors and officers of the Company to purchase a total of
290,000 shares of the Company's common stock.
On December 6, 1995, the Board of Directors granted to
each of the three following current directors, Messrs. Callery,
Hines and Schwartz, nonqualified stock options to purchase
40,000 shares of the Company's common stock at an exercise
price of $6.9375 per share. The grant of said options was
subject to the approval of the shareholders of the Company. On
August 8, 1996, the Board of Directors granted the following
additional stock options to directors of the Company at an
exercise price of $7 per share: Messrs. Callery, Hines and
Schwartz - 20,000 shares each; Victor V. Tchelistcheff - 50,000
shares; and Leonard Weitz - 60,000 shares. The grant of said
options on August 8, 1996 was also subject to the approval of
the shareholders of the Company. The above per share option
prices for the options granted by the Board of Directors on
December 6, 1995 and August 8, 1996 were based upon the closing
market prices of the shares on the dates of grant.
The market price for the Company's shares on October 17,
1996 was $7.375 per share. The shareholders of the Company had
previously approved nonqualified stock options for 60,000
shares each that are held by the following four of the
Company's directors: Messrs. Callery, Hines, Schwartz and
Weitz. Since Mr. Tchelistcheff was first elected a director on
August 8, 1996, he holds no options that were previously
approved by the shareholders. At the time of granting the
options, the Board of Directors had considered various factors
in favor of grants, such as, the overall incentive provided to
the directors that is consistent with the goals of all the
shareholders of the Company, the responsibilities of the
directors relating to formulating future plans for the Company,
the lack of directors insurance for the Board members, and, to
an extent, the preservation of cash by granting options in lieu
of higher directors cash fees. The Board also, at the time it
granted the August 8, 1996 options, determined that each of the
Board members should hold an equal number of options, other
than Mr. Tchelistcheff who had joined the Board that day.
Based on the foregoing, the options granted to the members
of the Board of Directors on December 6, 1995 and August 8,
1996, for which approval of the shareholders is sought at the
meeting under Proposal 2, and the exercise price of the
options, are as follows.
Name of Optionee Date of Grant Expiration Date #
of Shares Exercise Price
James Callery 12/6/95 12/6/05 40,000
$6.9375
8/8/96 8/8/06 20,000
$7.00
Paul Hines 12/6/95 12/6/05 40,000
$6.9375
8/8/96 8/8/06 20,000
$7.00
Edward R. Schwartz 12/6/95 12/6/05 40,000
$6.9375
8/8/96 8/8/06 20,000
$7.00
Victor V. Tchelistcheff 8/8/96 8/8/06
50,000 $7.00
Leonard Weitz 8/8/96 8/8/06 60,000
$7.00
Total number of nonqualified options granted to Directors
for which shareholder approval is sought.
290,000
In addition to the above stated exercise prices for the options
granted on December 6, 1995 and August 8, 1996, each of the
aforesaid options contains the following significant provisions: the
expiration date of the option is ten years from the date of grant;
the optionee may exercise all or a part of the options so long as he
continuously remains a director or officer, but in no event later
than the expiration date, on which latter date the option expires
without value; if the optionee dies, his personal representative may
exercise within twelve months from date of death; and payments by
the optionee upon exercise of the option must be in cash.
See "Information Concerning Stock Options Held By Directors and
Officers - Table of Stock Options Currently Outstanding", above,
for information concerning the nonqualified stock options granted
to Messrs. Callery, Hines, Schwartz and Weitz that were previously
approved by the shareholders.
The Company has been advised by counsel that under the Internal
Revenue Code, the persons to whom the nonqualified stock options
were granted will not be deemed to receive any income for Federal
tax purposes at the time the options were granted, nor will the
Company be entitled to a tax deduction at that time. Upon the
exercise of a nonqualified stock option, the optionee will be deemed
to have received income in an amount equal to the difference between
the option price and market price of the shares on the exercise
date. The Company will be allowed an income tax deduction in an
amount equal to income deemed received by the optionee.
There is no charge against income of the Company in connection
with the grant of a nonqualified stock option or the exercise of the
option.
The affirmative vote of the holders of a majority of the shares
entitled to vote at the meetings is required to approve Proposal 2.
Abstentions and broker non-votes will have the effect of "negative"
votes with respect to this proposal. If such approval is given, the
options will become effective. If approval of the options granted
by the Board of Directors at the December 6, 1995 and August 8, 1996
Board meetings is not given, the options will be deemed canceled and
void.
MANAGEMENT INTENDS TO CAST ITS PROXY VOTES IN FAVOR OF PROPOSAL
2
PROPOSAL 3: THE SELECTION OF AUDITORS
The accounting firm of Arthur Andersen & Co. has been
recommended by the Board of Directors to serve as independent
auditors for the Company for the current fiscal year. No member of
said accounting firm has any direct financial or any material
indirect financial interest in the Company or any of its
subsidiaries or any connection during the past five years with the
Company or any of its subsidiaries in the capacity of promoter,
underwriter, voting trustee, director, officer or employee. At the
meeting of shareholders the selection of said accounting firm will
be proposed by management. Arthur Andersen & Co. has advised the
Company that it does not expect a representative to be present at
the meeting and that it does not desire the opportunity to make a
statement at the meeting.
The affirmative vote of the majority of the shares represented
and entitled to vote at the meeting is required to approve this
proposal. MANAGEMENT INTENDS TO CAST ITS PROXY VOTES IN FAVOR OF THE
SELECTION OF ARTHUR ANDERSEN & CO.
MEETINGS OF THE BOARD OF DIRECTORS AND
INFORMATION REGARDING COMMITTEES
The Board of Directors does not have an audit, compensation or
nominating committee or committees performing similar functions.
The Board of Directors held three meetings in 1995. All of the
nominees for director who were directors in 1995 attended all
directors' meetings held in 1995.
A copy of the Company's Annual Report, which includes a
complete copy of the Company's Annual Report on Form 10-KSB
containing financial statements and financial statement schedules
for the year ended December 31, 1995, was mailed to each shareholder
of record on August 21, 1996. Additional annual reports will be
available upon written request to the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company retained Howard Weitz, P.C. as general counsel
during 1995 and 1996. Howard Weitz, Esq., the sole stockholder of
Howard Weitz, P.C., is the brother of Leonard Weitz, the Chairman,
President and Chief Executive Officer of the Company. The Company
believes that the fees earned by Howard Weitz, P.C during 1995 and
1996 were fair and reasonable in view of the level and extent of
legal services rendered pertaining to the Tintic Utah Metals LLC
joint venture and the merger with South Standard Mining Company.
Legal fees earned by Howard Weitz, P.C. were $75,900 during the
fiscal year ended December 31, 1995 and approximately $95,000 will
be earned during the year 1996. However, the Company was reimbursed
$36,000 on August 28, 1996 by Tintic Utah Metals LLC for said
services performed in 1996 pertaining to the joint venture, thus
reducing the 1996 fee to the Company to a net fee of approximately
$59,000.
SUBMISSION OF SHAREHOLDER PROPOSALS
Shareholders' proposals intended to be presented at
the Company's 1997 Annual Meeting of Shareholders must be received
at the Company's offices at 866 Second Avenue, New York, New York
10017, by March 30, 1997 for inclusion in the Company's proxy
statement and form of proxy relating to that meeting. Such proposals
must also meet the other requirements of the rules of the Securities
and Exchange Commission relating to shareholders' proposals.
OTHER MATTERS
The cost of soliciting proxies will be borne by the Company.
The Company will solicit votes by mail, and officers, directors and
employees of the Company may solicit proxies by telephone, telegraph
or personal interview. In addition, the Company has retained the
professional soliciting firm of Corporate Investors Communications,
Inc. to solicit proxies from banks, brokers, nominees and
institutions at a cost to the Company of $2,500 and disbursements.
Management knows of no other matters to be presented for
consideration at the meeting by management or by shareholders who
have requested inclusion of proposals in the Proxy Statement, other
than the matters stated in the Notice of Special Meeting of
Shareholders in Lieu of Annual Meeting. If any other matter shall
properly come before the meeting, the persons named in the
accompanying proxy intend to vote on such matters in accordance with
their best judgment.
By Order of the Board of Directors,
EDWARD R. SCHWARTZ
Secretary
November 11, 1996
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