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
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)
Definitive Proxy Statement
Definitive Additional Material
Soliciting Material Pursuant to Rule 14a-11(o) 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):
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 transactions 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 DECEMBER 15,1998
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
DoubleTree Hotel, 255 South WestTemple (Salon 11 Room), Salt Lake City,
Utah 84101 on December 15, 1998 at 9:00 A.M. Salt Lake 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 LLP 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 November 12, 1998 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 16, 1998
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 IFMAILED INTHE
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 desiresall 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.<PAGE>
PROXY STATEMENT
This Proxy Statement is furnished in connection with thesolicitation 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
Meetingof tile Company, to be held at the DoubleTree Hotel, 255
SouthWestTemple (Salon II Room), Salt Lake Cit", Utah 84101 at 9:00 A.M. on
December 15, 1998 and any adjournment or adjournments thereof. Proxy
material will first be mailedabout November 16, 1998. Tile accompanying
form of Proxy is solicited on behalf of Management of the Company.
Shareholders will vote upon: (1) the clectionof fivedirectors to the Board
of Directors of the Company; (2) the approval of the selection of auditors
of the Company; and (3) such otherbusiness as may properly come before tile
meeting or any adjournments thereof.
The enclosed Proxy maybe revoked at anytime before it is exercised by
written notice to the Company bearing a later date than tile Proxy, and any
shareholder attending the meeting may vote in person whether or not the
shareho I der has previously submitted a proxy. Each Proposal is identified
in the Proxy and the accompanying Notice of Special Meetingof Shareholders
in Lieu of Annual Meeting and is setforth andcommented 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 fordirectors, 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 December 15, 1998 in
lieu of May 18, 1998 (the third Tuesday in May, 1998) the December 15, 1998
meeting is deemed to be a Special Meeting of Shareholders.
Tile record date set by the Board of Directors for the determination of
stockholders entitled to vote is November 12, 1998. On that date there were
5,200 shares of Preferred stock and 7,010,209 shares of common stock
outstanding
C:
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 tile number ofsharcs orstock 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 AND
PRINCIPAL STOCKHOLDERS
(a) The following table shows as of November 10, 1998 stock ownership of
all persons known to inanagcmc-,. to be beneficial owners of more than 5%
of tile common stock of the Company:
Name and Address ofAmount and Nature of Percentage
Beneficial Owners Beneficial Ownership of Class
William E. Simon 607,150 shares (1) 8.66%
3 10 South Street
Morristown, NJ 07962
KZ Utah, Inc. 371,800 shares (2) 5.30%
(a subsidiary of
Korea Zinc Co., Ltd.
142 Nonnyon-Dong,
Gangnam-KU
Seoul, Korea)
(1) 357,150 shares owned directly by William E. Simon; 250,000 shares
owned by a corporation in which Mr.Simonhas shared powerto direct the
vote and disposition of the Company's shares held by the corporation by
virtue of his ownership of voting stock in said corporation.
(2)371,800 shares owned directly by KZ Utah, Inc.
(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 November 1, 1998, are:
Title
of Name and Address Amount and Nature ofPercentage
Class of Beneficial Ownerof Beneficial Ownership*of Class
Common Stock
$0.05 par value:
James Caller y 168,468(1)(2) 2.36%
RD #2, Box 2750
Charlotte, Vermont 05445
Paul Hines 130,000(3) 1.82%
12 Flying Cloud Road
Stamford, CT 06902
Edward R. Schwartz 165,100(4)(5) 2.31%
1165 Park Avenue
New York, N.Y. 10128
Victor V. Tchelistcheff 50,200(6) 0.71%
384 De Soto Drive
New Smyrna Beach, FL 32169
Leonard Weitz 189,010(7)(8) 2.65%
11 Longview Lane
Chappaqua, New York 10514
Owned by all directors 702,778(9) 9.32%
and officers as a group
Preferred
Stock, $0.50
par value: None<PAGE>
Each director and officer has sole voting and investment power with respect
to shares owned.
3<PAGE>
(1) Includes nonqualified stock options previously approved by the
shareholders to purchase 120,000 shares held;2% James Callery.
(2) Does not includean aggregate of 10,500 shares owned by James Callery's
wife and children, in which sharesMn Callery disclaims any beneficial
interest.
(3) Includes nonqualificd stock options previously approved by the
shareholders to purchase 120,000 shares held b., Paul Hines. Also
includes 5,000 shares held in IRA account.
(4) Includes nonqualified stock options previously approved by the
shareholders to purchase 120,000 shares held b,. Edward R. Schwartz.
(5) Does not include 200 shares owned by Mr. Schwartz's wife, in which
shares Mr. Schwartz disclaims ?_rv beneficial interest.
(6) Includes nonqualified stock options previously approved by the
shareholders to purchase 50,000 shares held b,. Mr. Tchelistcheff.
(7) Includes nonqualified stock options previously approved by the
shareholders to purchase 120,000 shares held b~ Leonard Weitz. Also
includes 8,000 shares held in IRA account and 40,000 shares owned
jointly with Leonard Weitz's wife.
(8) Does not include 20,000 shares owned by Leonard Weitz's wife, in which
shares Mr. Weitz disclaims and beneficial interest.
(9) Includes options to purchase an aggregate of 530,000 shares as
referred to at Notes( 1), (3),(4), (6) and (7), above. All options may
be exercised by the directors holding same within 60 days.
CONII'ENSXI'ION OFI)IRECTORS AND EXECUTIVE OFFICERS
The following information Forrest of the Company's last three completed
fiscal years is presented concerning-E the compensation of the Leonard
Weitz as Chairman, President and Chief Executive Officer of the Company:
SUMMARY COMPENSATION TABLE
Name and Annual Long-Term
Principal Compensation Compensation All Other
Position. Year Salary Awards-Options Compensation
Leonard Weitz 1997 $175,000(l) -
(Chairman 1996 $141,667(l) (2)
and Chief Executive 1995 $125,000(l) -$50,000(3)
Officer)
(1) During the years 1995 and 1996, Leonard Weitz received annual base
salary under the terms of an cmploymer.: 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 ofthe Company may determine.
(2) On December 10, 1996, shareholders of the Company approved a
nonqualified stock option granted to Leonard Weitz by the Company's
Board of Directors on August 8, 1996 to purchase 60,000 shares of the
Company's common stock at an option price of $7 per share. The closing
price of the Company's common stock on The NASDAQ Stock Market on
November 10, 1998 wits $21-YI6 pcrsharc. The exercise price was the
market price of the common stock on the date of grant. Leonard Weitz may
exercise all or a part of the option so long as he continuously remains
a director or officer, but in no event later than the expiration date of
option, except his personal representatives may exercise within twelve
months from date of death.
(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 Ltd. consummate 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; the due date of
the loan has been extended by the Board to December 31, 1999. 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 31,1997
No stock options were granted by the Company to Leonard Weitz during the
fiscal year ended December 31, 1997.
OPTION EXERCISES DURING FISCAL YEAR
ENDED DECEMBER 31,1997 AND OPTION VALUES
ON DECEMBER 31,1997
The following table contains, with respect to stock options held by
Leonard Weitz, information as to options exercised during the year 1997,
the aggregate dollar value realized upon exercise, the total number of
unexercised options held on December 31, 1997 and the aggregate dollar
value of the in-the-money, unexercised options held on December 31, 1997.
Shares Number of UnexercisedValue of Unexercised
Acquired or Value Options atin-the-money
options at
Name Exercised Realized December 31, 1997 (1)December 31, 1997 (3)
Nonqualified:
Leonard Weitz None None 120,000 (1)(2) $45,000
(1)All options held are fully exercisable,
(2) Nonqualified stock options approved by shareholders.
(3) Values are calculated by subtracting the exercise price from the
closing price of the Company's common stock on The NASDAQ on December
31, 1997,
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.<PAGE>
During 1997, 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 1997; he received a $10,000 annual fee in lieu of
salary. The Board of Directors set a rate of S750 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.
No stock options were granted by the Company to any directors during the
fiscal year ended December 31, 1997 and no director exercised in 1997 any
stock options held by him. See "Voting Securities and Principal
Stockholders," above, for information as to stock options held by
directors.
PROPOSAL 1: ELECTION OF DIRECTORS
Five directors are proposed to be elected at tile lliccting to serve
until tile meeting ofsharcholdcrs to be held in 1999,111d tilltil
1llCi1'.S1JCCCSS01'SshalI be elected and (lualify.The persons named in the
enclosed forill ol'proxy intend to vote such proxy for tile 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'Dircctors.
It is not anticipatcd that any nominee will be unavailable for c1cction.
Each of the nominces was elected to the Board of Directors at the meeting
of shareholders held on November 19, 1997.
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 numberof shares ownedofrecord multiplied
by the numberof directors to be elected, and may cast all of such votes
fora 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 nanled oil the proxy will have
discretionary authority to accumulate votes in the same manner. Certain
information for each nominee for director is set forth below:
Leonard Weitz 69 1967
Edward R. Schwartz
88 1974
James Callcry 60 1980
Paul Hines
61 1994
Victor V. Tchelistcheff69 1996
Age Direclor Since:
Experience During Past Five Years
Chairman and Chief Executive Officer 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 1993.
Engaged in management of oil and gas, forestry, agriculture and other
investments since prior to 1993.
Financial and management consultant since prior to 1993.
President of VVT Consultants, performs international management and cross
cultural communications services to cHents in cement, minerals, construcdon
and real estate development fields since prior to 1993. During 1993 and<PAGE>
1994, also worked as volunteer for IntemadonaL Execufive 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 orany
of its subsidiaries orany 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 expect
a representative to be present at the meeting, who will be available to
respond to appropriate questions. Arthur Andersen LLP has also advised the
Company that its representative 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.
MEETINGS OF THE BOARD OF DIRECTORS AND
INFORMATION REGARDING COMMITTEES
Tile Board of Directors held two meetings in 1997. All of the nominees
for director were present at both directors' meetings held in 1997.
The Board of Directors formed an Audit Committee in 1998, comprised of
the following two members of the Board: James Callery and Paul Hines.
The Board of Directors did not have an audit committee in 1997. The
Board of Directors does not ha compensation or nominating committee or
committees performing similar functions.
A copy of the Company's Annual Report, which includes a complete copy of
the Company's Annual Report on Form I O-KSB containing financial statements
and financial statement schedules for the year ended December 3 1, 1997,
wits mailcd to each shareholder of record on July 27, 1998. Additional
annual reports will be available upon written request to the Company.
SUBMISSION OF SHAREHOLDER PROPOSALS
Shareholders' proposals intended to be presented at the Company's 1999
Annual Meeting of Shareholders must be received at the Company's offices at
500 Fifth Avenue, New York, New York 10 110, by March 30, 1999 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
1997 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 Secufities Exchange Act of 1934 during
1997 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, tile 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 properlytome 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,
November 16, 1998
EDWARD R. SCHWARTZ
Secretary
