SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant X
Filed by a Party other than the Registrant
Check the appropriate box:
Preliminary Proxy Statement Confidential, For
Use of the
Commission Only (as Permitted by
Rule 14a-6(e)(2))
X Definitive Proxy Statement
Definitive Additional Materials
Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-
12
CHIEF CONSOLIDATED MINING COMPANY (FILE # 1-1761)
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than
the Registrant)
Payment of Filing Fee (Check the appropriate box):
X No fee required (Vote on Directors and
Accountants Only)
Fee computed on table below per Exchange Act
Rules 14-a6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction
applies:
COMMON STOCK; PREFERRED STOCK
(2)Aggregate number of securities to which transaction
applies:
(3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule 0-11 (set
forth the amount on which the filing fee is calculated and state
how it was determined):
N\A
(4) Proposed maximum aggregate value of transaction:
N\A
(5) Total fee paid:
N\A
Fee paid previously with preliminary materials.
CHIEF CONSOLIDATED MINING COMPANY
500 Fifth Avenue
New York, New York 10110
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS IN LIEU OF ANNUAL
MEETING TO BE
HELD NOVEMBER 19,1997
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 Doral Hotel, 70 Park Avenue at 38th Street
(Park Avenue Suite), New York City, New York 10016 on November
19, 1997 at 10:00 A.M. New York City time for the following
purposes:
(1) To elect five directors to serve during the ensuing year.
(2) To approve the selection of the firm of Arthur Andersen &
Co. as auditors for the Company for the current fiscal year.
thereof.
(3) To transact such other business as may properly come before
the meeting and any adjournments
The holders of common and preferred stock of the Company of
record at the close of business on October 17, 1997 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
October 20, 1997
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, andshareholders
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 Doral Hotel, 70 Park Avenue at 38th
Street (Park Avenue Suite), New York, New York 10016 at 10:00
A.M. on November 19,1997 and any adjournment or adjournments
thereof. Proxy material will first be mailed about October
20,1997. 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 approval of the selection of auditors of the
Company; and (3) 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, and the approval of the selection of auditors of the
Company is designated as Proposal 2. 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 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 Shareholder be held on the third Tuesday in May of each
year. Since the forthcoming Shareholders' Meeting is being held
on November 19,1997 in lieu of the May 19,1997 (the third
Tuesday in May,1997) the November 19,1997 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 October 17,
1997. On that date there were 5,200 shares of Preferred stock
and 6,071,045 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 vote 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
PRINCIPAL STOCKHOLDERS
(a) The following table shows as of October 1,1997 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
KZ Utah, Inc.
(a subsidiary of
Korea Zinc Co., Ltd.
142 Nonnyon-Dong,
Gangnam-KU
Seoul, Korea) 500,000 shares 8.24%
(b) The equity securities of the Company beneficially owned by
all directors, director nominees and officers, and by directors
and of ricers of the Company as a group, as of October I, 1997,
are:
Title
of Name and Address Amount and Nature of
Percentage
Class of Beneficial Owner of Beneficial Ownership* of
Class
Common Stock
$0.05 par value:
James Callery 168,468(1)(2) 2.72%
RD #2, Box 2750
Charlotte, Vermont 05445
Paul Hines 125,000(3) 2%
12 Flying Cloud Road
Stamford, CT 06902
Edward R. Schwartz 165,100(4)(5) 2.67%
1165 Park Avenue
New York, N.Y. 10128
Victor V. Tchelistcheff 50,200(6)
0.83%
384 De Soto Drive
New Smyrna Beach, FL 32169
Leonard Weitz 181,010(7)(8) 2.92%
11 Longview Lane
Chappaqua, New York 10514
Owned by all directors 689,778(9)
10.45%
and officers as a group
Preferred
Stock, $0.50
par value: None
* Each director and of fleer has sole voting and investment
power with respect to shares owned.
(1) Includes nonqualified stock options previously approved by
the shareholders to purchase 120,000 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 options previously approved by
the shareholders to purchase 120,000 shares held by Paul
Hines.
(4) Includes nonqualifiedstock options previously approved by
the shareholders to purchase 120,000 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 Unqualified stock options previously approved by
the shareholders to purchase 50,000 shares held by Mr.
Tchelistcheff.
(7) Includes 40,000 shares owned jointly with Leonard Weitz's
wife and nonqualified stock options previously approved by the
shareholders to purchase 120,000 shares held by Leonard Weitz.
(8) Does not include 18,000 shares owned by Leonard Weitz's
wife, in which shares Mr. Weitz disclaims any beneficial
interest.
(9) Includes options to purchase an aggregate of 530,000 shares
es referred to et Noses (1), (3), (4), (6) and(7), above. All
options may be exercised by the directors holding same within
60 days.
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
Of fleer of the Company:
SUMMARY COMPENSATION TABLE
Name and Annual Long-Term
Principal Compensation Compensation AllOther
Position Year Salary Awards-Options
Compensation
Leonard Weitz 1996 $141,667(1) (2)
(Chairman 1995 $125,000(1) _
$50,000(3)
and Chief Executive 1994 $125,000(1)
Officer)
(1) During each of the years 1994,1995 and 1996, Leonard Weitz
received annual base salary under the terms of an employment
agreement dated January 4, 1998, 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 I, 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, 1996"
and "Option Exercises During Fiscal Year Ended December
31,1996 and Option Values on December 31,1996", respectively,
for information concerning Unqualified options to purchase
60,000 shares granted to Leonard Weitz by the Board of
Directors of the Company on August 8, 1996 and approved by the
shareholders on December 10, 1996.
(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 20,1995 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. (Subsequent to the
purchase, Korea Zinc Co., Ltd. transferred the 500,000 shares
of the Company's common stock to its subsidiary, KZ Utah, Inc.
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. Mr. Weitz exercised the option on
November 10, 1995 and purchased the 40,000 shares of the
Company's common stock.
OPTION GRANTS DURING FISCAL YEAR ENDED DECEMBER 31, 1996
The information set forth below is being presented concerning
the approval by the shareholders of the Company on December
10,1996 of nonqualified stock options previously granted by the
Board of Directors of the Company to
Leonard Weitz, the grant of said stock options having been
subject to approval by the shareholders. The following table
contains, with respect to said options, the number of options so
granted and approved, the percent the grant of options in 1996
represents to total options granted to employees during 1996,
the per share exercise price of the options granted, the
expiration date of the options, and the closing price of the
Company's shares of common stock on the date of approval by the
shareholders.
% of Total Options Exercise Expiration
Market Price
Number of Granted to Price Date of Common
Stock
Options Employees in Per of on Date
Name Granted Fiscal Year Share Option of
Approval
Leonard Weitz 60,000(1)(2) 50% $7.00(3) 8/8/2006
$9.00
(1) Nonqualifiedstockoptions granted by the Board of Directors
on August 8, 1996 subject to approval by the shareholders and
which approval was given on December 10, 1996.
(2) Leonard Weitz may exercise all ore pert of the options so
long as he continuously remains adirectororoffcer, but in no
event later than expiration date of option, except his
personal representatives may exercise within twelve months
from date of death.
(3) The exercise price was the market price of the common stock
on the date of grant by the Board of Directors on August 8,
1996.
OPTION EXERCISES DURING FISCAL YEAR
ENDED DECEMBER 31, 1996 AND OPTION VALUES
ON DECEMBER 31, 1996
The following table contains, with respect to stock options
held by Leonard Weitz, information as to options exercised
during the year 1996, the aggregate dollar value realized upon
exercise, the total number of unexercised options held on
December 31,1996 and the aggregate dollar value of the
in-the-money, unexercised options held on December31, 1996.
Shares Number of Unexercised Value of
Unexercised
Acquired or Value Options at
in-the-money options at
Name Exercised Realized December 31, 1996 (1) December 31,
1996 (3)
Nonqualffied.
Leonard Weitz None None 120,000 (1)(2)
(1) All options held are fully exercisable.
(2) Nonqualified stock options approved by shareholders.
$280,000
(3) Values are calculated by subtracting the exercise price from
the closing price of the Company's common stock on NASDAQ on
December 31, 1996.
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.
During 1996, each director who was not an officer of the Company
received an annual fee of $5,000; no attendance fees were paid.
Edward R. Schwartz, the Secretary-Treasurer of the Company, who
is a director, did not receive a salary in 1996; he received
a$10,000 annual fee in lieu of salary. The Board of Directors
set a rate of $750 per day for services performed by each
outside director of the Company that are in addition to services
regularly performed by him as a director.
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 1998 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 of 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 10, 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
Leonard Weitz 68 1967
Edward R. Schwartz 87 1974
James Callery 60 1980
Paul Hines 60 1994
Victor V. Tchelistcheff 67 1996
Age Director Since:
Business Experience During Past Five Years
Chairman and Chief Executive Of ricer of the Company since 1971;
President from 1971 to December 1993 and from August 1996 to
present.
Secretary and Treasurer of the Company since 1979; independent
consultant since prior to 1992.
Engaged in management of oil and gas, forestry, agriculture and
other investments since prior to 1992.
Financial and management consultant since prior to 1992;
Managing Director of Westerly Partners, financial and management
consultants since 1993.
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 1992. 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: THE SELECTION OF AUDITORS
The accounting firm of Arthur Andersen LLP 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
LLP 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 LLP.
6
Leonard Weitz, the grant of said stock options having been
subject to approval by the shareholders. The following table
contains, with respect to said options, the number of options so
granted and approved, the percent the grant of options in 1996
represents to total options granted to employees during 1996,
the per share exercise price of the options granted, the
expiration the options, and the closing price of the Company's
shares of common stock on the date of approval by the
shareholders.
% of Total Options Exercise Expiration
Market Price
Number of Granted to Price Date of Common
Stock
Options Employees in Per of on Date
Name Granted Fiscal Year Share Option of
Approval
Leonard Weitz 60,000(1)(2) So% $7.00(3) 8/8/2006
$9.00
(1) Nonqualified stock options granted by the Board of Directors
on August 8, 1996 subject to approval by the shareholders and
which approval was given on December 10, 1996.
(2) Leonard Weitz may exercise all or a part of the options so
long as he continuously remains a director or of ricer, but in
no event later than expiration date of option, except his
personal representatives may exercise within twelve months
from date of death.
(3) The exercise price was the market price of the common stock
on the date of grant by the Board of Directors on August 8,
1996.
OPIION EXERCISES DURING FISCAL YEAR
ENDED DECEMBER 31, 1996 AND OPTION VALUES
ON DECEMBER 31, l99C
The following table contains, with respect to stock options
held by Leonard Weitz, information as to options exercised
during the year 1996, the aggregate dollar value realized upon
exercise, the total number of unexercised options held on
December 31,1996 and the aggregate dollar value of the
in-the-money, unexercised options held on December 31, 1996.
Shares Number of Unexercised Value of
Unexercised
Acquired or Value Options at
in-the-money options at
Name Exercised Realized December 31, 1996 (1) December 31,
1996 (3)
Nonqualified:
Leonard Weitz None None 120,000 (1)(2)
(1) All options held are fully exercisable.
(2) Nonqualified stock options approved by shareholders.
$280,000
(3) Values are calculated by subtracting the exercise price from
the closing price of the Company's common stock on NASDAQ on
December 31, 1996.
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.
During 1996, each director who was not an officer of the
Company received an annual fee of $5,000; no attendance fees
were paid. Edward R. Schwartz, the Secretary-Treasurer of the
Company, who is a director, did not receive a salary in 1996; he
received a $ 10,000 annual fee in lieu of salary. The Board of
Directors set a rate of $750 per
MEETING 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 meeting in 1996. All of the
nominees for director attended all directors' meetings held in
1996.
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, 1996, was mailed to
each shareholder of record on August 5,1997. 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 Of fleer 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
$96,600 during the year 1996. However, the Company was
reimbursed $36,000 on August 28,1996 by Tintic Utah Metals LLC
for said services performed to the joint venture, thus reducing
the 1996 fee to the Company to a net fee of $60,600.
SUBMISSION OF SHAREHOLDER PROPOSALS
Shareholders' proposals intended to be presented at the
Company's 1998 Annual Meeting of Shareholders must be received
at the Company's offices at 500 Fifth Avenue, New York, New York
10110, by March 30, 1998 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 Company is not aware of any person who, at any time during
the year 1996 was a director, officer or beneficial owner of
more than 10% of the Company's common stock who failed to file
on a timely basis, reports required by Section 16(a) of the
Securities Exchange Act of 1934 during 1996 or prior years.
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 $3,000 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,
October 20, 1997
EDWARD R. SCHWARTZ Secretary
