USMX, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 24, 1996
TO THE STOCKHOLDERS OF USMX, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of
Stockholders of USMX, INC. (the Company) will be held at
the Sheraton Denver West Hotel, 360 Union Boulevard,
Lakewood, Colorado on June 24, 1996, at 3:00 p.m. local time
to consider the following matters:
1. The election of two directors to Group II, to serve
until the annual meeting of stockholders in 1999 and until
their successors shall have been duly elected and qualified;
2. To transact such other business as may properly come
before the meeting or any adjournments thereof.
Stockholders of record at the close of business on May
24, 1996, shall be entitled to notice of and to vote at the
Annual Meeting or any adjournments thereof. The stock
transfer books of the Company will remain open. The
management of the Company hopes that you will find it
convenient to attend the meeting in person. In any event,
please mark, sign, date and return the enclosed Proxy to
make sure that your shares are represented at the meeting.
Stockholders who attend the meeting may vote their shares
personally even though they have returned Proxies.
There is printed on the following pages a Proxy
Statement to which your attention is invited.
BY ORDER OF THE BOARD OF DIRECTORS:
/s/ Donald E. Nilson
Donald E. Nilson, Secretary
Dated: May 24, 1996
<PAGE>
USMX, INC.
141 Union Boulevard, Suite 100
Lakewood, Colorado 80228
PROXY STATEMENT
This Statement is furnished in connection with the
solicitation of Proxies by and on behalf of the Board of
Directors of USMX, Inc., a Delaware corporation (the
Company or USMX), for use at the Annual Meeting of
Stockholders to be held at 3:00 p.m, local time, on June 24,
1996, at the Sheraton Denver West Hotel, 360 Union
Boulevard, Lakewood, Colorado or at any adjournments
thereof. The Company anticipates that this Proxy Statement
and the accompanying form of Proxy will be first mailed or
given to the stockholders of the Company on or about May 28,
1996. The Company's Annual Report to Stockholders,
including financial statements, for the year ended December
31, 1995, accompanies this Proxy Statement, but does not
form a part of the proxy solicitation materials.
The cost of soliciting Proxies will be borne by the
Company. Officers and regular employees of the Company,
without compensation other than their regular compensation,
may solicit Proxies by further mailing, by telephone and by
telegraph and by personal conversations. The Company will
reimburse brokerage firms and others for their expenses in
forwarding solicitation material to the beneficial owners of
common stock. The Company has no plans to retain any firms,
or otherwise incur any extraordinary expense, in connection
with the solicitation of stockholders.
Voting Procedures
Stockholders of record at the close of business on May
24, 1996, ("Record Date") will be entitled to vote at the
meeting. On such Record Date, the Company had outstanding
and entitled to vote 14,643,519 shares of common stock.
Each stockholder is entitled to cast one vote for each share
of common stock registered in such stockholder's name on the
books of the Company held on the Record Date. The presence
in person or by proxy of the holders of one-third of the
shares of the Company is necessary to constitute a quorum at
the Annual Meeting.
Any Proxy may be revoked by the person giving it at any
time before it has been exercised or by attending the
meeting and voting in person. Revocation in writing is the
sole means by which Proxies may be revoked. Proxies may be
revoked by execution of a later dated Proxy or by written
notice to the Secretary of the Company at the Company's
address above before the Annual Meeting or by a personal
vote at the Annual Meeting of Stockholders.
Unless instructed to the contrary in the Proxies, the
Proxies will be voted for the persons named below in the
election of the Company's Board of Directors, and will be
voted in the discretion of the Proxies on such other matters
as may properly come before the meeting. The Company does
not know of any other matters to come before the meeting.
<PAGE>
Pursuant to applicable Delaware law, only votes cast
"for" a matter constitute affirmative votes. Votes
"withheld" or abstaining from voting are counted for quorum
purposes, but as they are not cast "for" a particular
matter, they will have the same effect as negative votes or
votes "against" a particular matter.
Voting Securities and Principal Holders
The number of shares of the Company's common stock
beneficially owned as of May 17, 1996, by each of the
directors and nominees is stated opposite each individual's
name in ELECTION OF DIRECTORS. The number of shares of
the Company's common stock beneficially owned by all
directors and officers of the Company as a group is stated
at the end of the list of directors in ELECTION OF
DIRECTORS.
Security Ownership of Certain Beneficial Owners
The following table sets forth information as of May
17, 1996 with respect to any person who is known to the
Company to be the beneficial owner of more than five percent
of any class of the Companys voting securities:
<TABLE>
<CAPTION>
Title of Name and Address of Amount and Nature Percent
Class Beneficial Owner of Beneficial of Class
Ownership
- --------- ---------------------------- ----------------- ---------
<S> <C> <C> <C>
Common Pegasus Gold Inc.
601 West First Avenue, Suite
1500
Spokane, WA 99204 4,826,000 (1) 33.0%
Common Van Eck Associates
Corporation
122 East 42nd Street
New York, New York 10168 1,045,000 (2) 7.1%
<FN>
(1) Represents direct ownership.
(2) Van Eck Associates Corporation has advised the Company
that it is a registered investment adviser, and that such
shares are held for funds or trusts managed by it, including
715,000 shares (4.9%) held for Gold/Resources Fund and
275,000 shares (1.9%) held for International Investors
Incorporated and 55,000 shares (0.4%) for a private
investor. Gold/Resources Fund and International Investors
Incorporated are open end, diversified investment management
companies which concentrate investments in gold mining
shares. The shares of both of such companies are publicly
held and Van Eck Associates Corporation has advised the
Company that to its knowledge no natural person owns
beneficially more than 5% of the outstanding shares of
either such company. John C. Van Eck, whose business
address is the same as that of Van Eck Associates
Corporation, has voting control of Van Eck Associates
Corporation.
</FN>
</TABLE>
<PAGE>
Security Ownership of Management
Information regarding the Companys equity securities
owned by directors and executive officers is set forth in
the following table:
<TABLE>
<CAPTION>
Shares of $0.001 Par Percent
Value Common Stock of
Name Beneficially Owned Class
---------------------- --------------------- ----------
<S> <C> <C>
George J. Allen 32,000 (2) *
Phillips S. Baker 4,841,000 (4) (7) 31.9 %
Donald P. Bellum 25,000(1) *
James P. Geyer 4,836,000 (5) (7) 31.9 %
James A. Knox 333,899 (6) 2.2 %
Dennis L. Lance 157,068 (8) 1.0 %
Terry P. McNulty 33,000 (2) *
Werner G. Nennecker 4,851,000 (1) (7) 32.0 %
Donald E. Nilson 60,584 (9) *
Gregory Pusey 297,274 (4) 2.0 %
Robert Scullion 21,750 (3) *
Paul B. Valenti 114,783 (10) *
All directors and
executive officers
as a group 5,951,358 (7) (11) 39.2 %
<FN>
(1) Includes 25,000 shares underlying currently exercisable
options granted pursuant to the Companys Non-Discretionary
Stock Option Plan For Non-Employee Directors. Does not
include options recently granted to Mr. Bellum, which are
not currently exercisable. See Employment Contracts and
Termination of Employment and Change in Control
Arrangements.
(2) Includes 20,000 shares underlying currently exercisable
options granted pursuant to the Companys Non-Discretionary
Stock Option Plan For Non-Employee Directors.
(3) Includes 21,750 shares underlying currently exercisable
options granted pursuant to the Companys Non-Discretionary
Stock Option Plan For Non-Employee Directors.
(4) Includes 15,000 shares underlying currently exercisable
options granted pursuant to the Companys Non-Discretionary
Stock Option Plan For Non-Employee Directors.
(5) Includes 10,000 shares underlying currently exercisable
options granted pursuant to the Company's Non-Discretionary
Stock Option Plan For Non-Employee Directors.
(6) Includes 206,667 shares underlying currently
exercisable options granted pursuant to the Companys 1987
Stock Option Plan.
(7) Messrs. Nennecker , Baker , and Geyer are officers and
Mr. Nennecker is a director of Pegasus. As such, they can
be considered to be beneficial owners of the 4,826,000
shares held of record by Pegasus. Accordingly, the figures
opposite their names reflect the 4,826,000 shares owned by
Pegasus.
(8) Includes 68,334 shares underlying currently exercisable
options granted pursuant to the Companys 1987 Stock Option
Plan.
(9) Includes 38.334 shares underlying currently exercisable
options granted pursuant to the Companys 1987 Stock Option
Plan.
(10) Includes 58,334 shares underlying currently exercisable
options granted pursuant to the Companys 1987 Stock Option
Plan.
(11) Includes currently exercisable options to purchase
523,419 shares.
* Represents less than 1%.
</FN>
</TABLE>
<PAGE>
Election of Directors
The Board of Directors of the Company (the Board) is
divided into three Groups, with the terms of office of each
Group ending in successive years. The terms of directors of
Group II expire with this Annual Meeting. The directors of
Group I and Group III will continue in office. Proxies will
be voted at the Annual Meeting, unless authority is
withheld, FOR the election of the persons in Group II named
below. Each of the nominees currently is a director of the
Company. There is no nominating committee of the Board.
The affirmative vote of a majority of the shares represented
at the Annual Meeting is required to elect each director.
The Company does not contemplate that any of the
persons named below will be unable or will decline to serve.
However, if any such nominee is unable or declines to serve,
the persons named in the accompanying Proxy will vote for a
substitute, or substitutes, at their discretion.
The following information is submitted respecting the
nominees for election and other directors of the Company:
<TABLE>
NOMINEES FOR DIRECTOR
GROUP II
FOR THREE YEAR TERM EXPIRING 1999
<CAPTION>
Director
Name and Business Experience Since
<S> <C>
Phillips S. Baker, age 36, joined Pegasus Gold in
January 1994 as Vice President, Finance and Chief
Financial Officer. Prior to joining Pegasus, Mr. Baker
worked seven years for Battle Mountain Gold Company,
most recently as Treasurer. He also worked as an
accountant for Arthur Andersen LLP. Mr. Baker is an
Attorney, Certified Public Accountant and Certified Cash
Manager. 1995
Terry P. McNulty, age 57, has served as President of
T.P. McNulty & Associates, a consulting firm, since
1988. From 1983 to 1988, he was President of Hazen
Research, Inc. 1990
MEMBERS OF BOARD OF DIRECTORS CONTINUING IN OFFICE
GROUP I
THREE YEAR TERM EXPIRING 1998
George J. Allen, age 67, has served as President of
Allen Engineering since 1983. From 1951 to 1983, he
served in various positions with Kennecott Corporation,
including Vice President and Director of Tolling. 1990
Werner G. Nennecker, age 41, joined Pegasus Gold Inc. in
September 1992 as Senior Vice President and Chief
Operating Officer. In November 1992, Mr. Nennecker
assumed the position of President and Chief Executive
Officer of Pegasus. Prior to joining Pegasus, Mr.
Nennecker worked 15 years in the mining industry with
Ranchers Exploration and Santa Fe Pacific Gold
Corporation. Most recently, he held the positions of
Executive Vice-President of Santa Fe Pacific Minerals
Corporation and President of Santa Fe Pacific Gold
Corporation. He has extensive experience in all aspects
of the mining business. Mr. Nennecker is also a
director of Pegasus Gold Inc., Zapopan NL, the Gold
Institute, and the National Mining Hall of Fame. 1992
Robert Scullion, age 56, has been a partner in Scullion,
Strasheim & Company, a firm of Certified Public
Accountants, since 1975. He is a Certified Public
Accountant licensed in the United States as well as a
Scottish Chartered Accountant. 1987
<PAGE>
MEMBERS OF BOARD OF DIRECTORS CONTINUING IN OFFICE
GROUP III
THREE YEAR TERM EXPIRING 1997
Donald P. Bellum, age 63, has over 35 years of
experience in the mining industry and related fields.
Mr. Bellum currently serves as a consultant to the
mining industry. Effective May 1, 1996, he became
Chairman of the Board of Directors and Chief Executive
Officer of the Company. From 1987 to 1991, Mr. Bellum
was Executive Vice President of Cyprus Minerals Company.
He served as President of Cyprus Coal Company from 1978
to 1987. From 1974 to 1978, Mr. Bellum was Vice
President of Operations for Tesoro Coal Company. Mr.
Bellum served as Project Manager (1965 to 1969) and as
Mine Manager (1969 to 1973) for Kennecott Copper
Corporation. 1992
James P. Geyer, age 43, joined Pegasus Gold in 1987 and
was appointed Vice President, Operations in October
1995. Prior to joining Pegasus, Mr. Geyer worked 13
years for ASARCO and AMAX in various operating and
engineering positions. Mr. Geyer is a mining engineer
from the Colorado School of Mines. Mr. Geyer is a
Director of Wheaton River Minerals Ltd. 1996
Gregory Pusey, age 44, served as the Companys Chief
Financial Officer from May 1989 until January 1990 and
he also has served as Secretary and Treasurer of the
Company. Since 1983, Mr. Pusey has been engaged in
private investment activities. He has served as
President of Livingston Capital, Ltd. And President of
the General Partner of Graystone Capital, Ltd, a venture
captial firm. He is also President and a Director of
Cambridge Holdings, Ltd. and a Director of Nutrition For
Life International, Inc. Mr. Pusey was a founder of the
Company. 1979
</TABLE>
The Board of Directors held seven meetings in person or
by consent during the year ended December 31, 1995. All
incumbent directors attended at least 75 percent of the
meetings of the Board held during the period for which they
served as directors.
The Company's Board of Directors had two standing
committees in 1995: the Audit Committee and the Compensation
Committee. The members of the Audit Committee are Terry P.
McNulty and Robert Scullion. The primary functions of the
Audit Committee are to review the scope and results of
audits by the Company's independent auditors, internal
accounting controls, non-audit services performed by the
independent accountants and the cost of accounting services.
Although members of the Audit Committee had informal
discussions, the Audit Committee held no formal meetings in
1995.
The Compensation Committee determines matters related
to compensation payable to the Company's executive officers
and administers the Companys 1987 Stock Option Plan. The
members of the Compensation Committee during 1995 were
George J. Allen, Donald P. Bellum and Gregory Pusey. The
Compensation Committee held two meetings in 1995. In April
1996, Mr. Bellum resigned as a member of the Compensation
Committee and Werner G. Nennecker was elected to serve as a
member of the Compensation Committee. In May 1996, Mr.
Bellum became Chairman of the Board of Directors and Chief
Executive Officer of the Company.
Executive Officers
Set forth below are the names and offices held by each
of the executive officers of the Company:
<TABLE>
<CAPTION>
Name and Business Experience Offices Held
- ------------------------------------------------- -------------------
<S> <C>
James A. Knox, age 62, has served as President of President, Chief
the Company since June 1991. He will remain in Executive Officer,
this position until June 30, 1996. It is Chairman
anticipated that he will thereafter concentrate
his duties in the areas of acquiring mineral
properties and mining operations for the Company.
From 1969 until June 1991, he was an officer and
director of Knox, Kaufman, Inc. That firm
provided geological consulting services and
managed exploration programs in the United States
and Western Canada. Mr. Knox has previously been
employed as a geologist with several other
companies, including The Superior Oil Company
where he was a district Exploration Manager, and
Kermac Nuclear Fuels Corporation where he also
managed the exploration efforts.
Paul L. Blair, age 54, joined the Company in April Vice President --
1995. Mr. Blair has 35 years experience in the Operations for Latin
mining industry. He served as President and America and the
General Manager of Golden Queen Mining Co., Inc. Caribbean
from December 1993 to April 1995. For the
preceding seven years, Mr. Blair served as General
Manager of Cactus Gold Mines Co.
Dennis L. Lance, age 51, has served as Vice Vice President --
President -- Exploration of the Company since May Exploration
1989. He also served as Secretary of the Company
from January 1990 to December 1990. He has served
as a geologist with the Company since June 1986.
Prior thereto, he was an independent consulting
geologist.
Donald E. Nilson, age 51, has served as Vice Vice President --
President--Finance and Secretary of the Company Finance and Secretary
since his employment in October 1990. Mr. Nilson
has been a Certified Public Accountant since 1968
and holds a graduate degree in Computer
Information Systems.
Paul B. Valenti, age 46, joined the Company in May Vice President --
1987 and was elected Vice President in August Operations
1988. From November 1983 to May 1987, he served
as the Metallurgy Manager for Silver King Mines.
</TABLE>
There are no family relationships among the officers or
directors. On May 1, 1996 Donald P. Bellum became Chairman
of the Board of Directors and Chief Executive Officer of the
Company. Mr. Bellum previously served as a director of the
Company. Biographical information concerning Mr. Bellum is
set forth under "Directors" above.
<PAGE>
Executive Compensation
Following is information regarding compensation paid
during each of the last three completed fiscal years to the
executive officers of the Company whose salary and bonus
exceeded $100,000 during 1995.
<TABLE>
Summary Compensation Table
<CAPTION>
Annual Compensation
----------------------------
Long Term
Name and Compensat All Other
Principal ion Compen
Position Awards sation
Year Salary ($) Bonus ($) (Options#) ($)
- -------------- ----- ---------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C>
James A. Knox,
President and
CEO 1995 $156,050 $10,000 50,000 $4,620(1)
1994 $151,500 $20,000 30,000 $4,022(1)
1993 $142,500 $25,000 30,000 $4,069(1)
Dennis L.
Lance,
V.P. --
Exploration 1995 $107,100 - 25,000 $3,213(1)
1994 $93,816 $8,000 15,000 $2,814
1993 $89,256 $16,227 15,000 $2,678
Donald E.
Nilson,
V.P. --
Finance 1995 $105,100 - 25,000 $3,153(1)
1994 $95,530 $8,000 15,000 $2,790(1)
1993 $91,719 $10,000 15,000 $2,741(1)
Paul B.
Valenti,
V.P. --
Operations 1995 $108,150 - 25,000 $3,244(1)
1994 $98,650 $8,000 15,000 $2,959(1)
1993 $96,230 $13,050 15,000 $2,887(1)
<FN>
(1) The amounts shown represent the Company's matching
contribution for the stated individuals to its 401(K) plan.
</FN>
</TABLE>
<PAGE>
The following table sets forth information with respect
to stock options granted during 1995 to each executive named
in the Summary Compensation Table. The assumed annual rates
of stock price appreciation of 5% and 10% are set by a rule
of the Securities and Exchange Commission, and are not
intended as a forecast of possible future appreciation and
stock prices. The potential value of options granted
depends on an increase in the market price of the Company's
common stock. If the stock price does not increase, the
options would be worthless. If the stock price does
increase, this increase would benefit both option holders
and stockholders commensurately.
<TABLE>
Option Grants in 1995
<CAPTION>
Potential Realizable
Value at Assumed Annual
Rates of Stock Price
Appreciation for Option
Term
--------------------------
% of Total
Options
Granted to
Options Employees Exercise
Granted in Fiscal Price Expiration
Name (#) Year ($/Sh) Date 5% ($) 10% ($)
- --------- -------- ----------- ---------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
James A.
Knox 50,000 13.2 % $2.19 3/14/2005 $68,864 $174,515
Dennis
L. Lance 25,000 6.6 % $2.19 3/14/2005 $34,432 $87,257
Donald E.
Nilson 25,000 6.6 % $2.19 3/14/2005 $34,432 $87,257
Paul B.
Valenti 25,000 6.6 % $2.19 3/14/2005 $34,432 $87,257
All
Stock-
holders(1) $20,168,000 $51,110,000
Executive
officers'
gain as a
% of All
Stock-
holders
gain 0.85% 0.85%
<FN>
(1) The amounts shown for All Stockholders represent the
potential realizable value assuming appreciation at the
rates indicated based on the exercise price per share and
the expiration date applicable to grants made in 1995 and
the number of outstanding shares on the date of grant.
</FN>
</TABLE>
<PAGE>
The following table sets forth, in the aggregate, the
number of shares underlying options exercised during 1995 by
each executive named in the Summary Compensation Table, and
states the value at year-end of exercisable and
unexercisable options remaining outstanding.
<TABLE>
Aggregated Option Exercises and Fiscal Year-End Option
Values
<CAPTION>
Value of
Number of Unexercised
Shares Unexercised In-the-Money
Acquired Options at FY- Options at
on Value End (#) FY-End ($)
Exercise Realized Exercisable/ Exercisable/
Name (#) ($) Unexercisable Unexercisable
- --------------- --------- --------- -------------- --------------
<S> <C> <C> <C> <C>
James A. Knox - - 190,000 / $9,000 /
50,000 -
Dennis L. Lance - - 60,000 / $1,800 /
25,000 -
Donald E. Nilson - - 30,000 -
25,000 -
Paul B. Valenti - - 50,000 / $900 /
25,000 -
</TABLE>
Compensation of Directors
All directors who are not employed either by the
Company or by Pegasus are paid a fee of $350 for each
meeting of the Board attended. In addition, each director
who is not a full-time employee of the Company receives a
fee of $500 per month. These directors also receive
additional compensation plus reasonable expenses for any
additional services performed. Robert Scullion is paid an
additional $4,000 per year as chairman of the Audit
Committee. During 1995, certain directors were paid a total
of $6,344 for consulting fees and out of pocket expenses
pertaining to various Company projects.
Employment Contracts and Termination of Employment and
Change-in-Control Arrangements
During 1995 James A. Knox was employed by the Company
as its President and Chief Executive Officer. Mr. Knox
continued to serve as Chief Executive Officer until May 1,
1996, and will continue to serve as President until June 30,
1996. Thereafter, Mr. Knox is expected to concentrate his
duties in the areas of acquiring mineral properties and
mining operations for the Company. In July 1993, the
Company entered into an Employment Agreement with Mr. Knox
for a two-year term which ended June 30, 1995, which
provided for a minimum annual salary of $150,000. Upon Mr.
Knoxs termination of employment with the Company, he will
receive severance pay at 50% of his present annual salary
and the Company will pay his medical insurance premiums for
six months after the date of termination. Mr. Knox has
agreed not to acquire, for two years after the termination
<PAGE>
of the Employment Agreement, an interest in any mineral
properties within two miles of any properties in which the
Company has an interest or is, on the date of termination,
negotiating to acquire an interest.
On May 1, 1996, Donald P. Bellum became Chairman of the
Board of Directors and Chief Executive Officer of the
Company. Mr. Bellum receives a salary of $16,800 per month
and has been granted an option to purchase up to 150,000
shares of the Companys common stock at $2.55 per share.
The options vest in annual installments of 50,000 shares
each commencing on the date of grant, except that no options
may be exercised until six months from the date of grant.
Vesting would occur in the event of termination of Mr.
Bellums employment without cause. This would include a
change in control wherein the Companys executive offices
were relocated or his duties were changed in a substantial
manner.
Compensation Committee Interlocks and Insider Participation
in Compensation Decisions
George J. Allen, Donald P. Bellum and Gregory Pusey
served as members of the Compensation Committee during 1995.
Mr. Pusey is a former officer of the Company. In April
1996, Mr. Bellum resigned as a member of the Compensation
Committee and Werner G. Nennecker was elected to serve as a
member of the Compensation Committee. Effective May 1,
1996, Mr. Bellum became Chairman of the Board of Directors
and Chief Executive Officer of the Company.
Board Compensation Committees Report on Executive
Compensation
The compensation policies of the Compensation Committee
applicable to the Company's executive officers are based on
the continuing need to attract and retain a management team
capable of guiding the growth of the Company over the long
term. Compensation of executive officers paid during 1995
is based on the qualifications and experience of the
individual officers, competitive market conditions for
executive talent, and the contributions of the individuals
to the long term growth and stability of the Company and to
maximizing the long term value of stockholders' investment
in the Company. Factors considered by the Compensation
Committee to be important in the long term growth and
stability of the Company and to maximizing the long term
value of the stockholders' investment include increasing the
quantity and quality of the Company's portfolio of
exploration properties, development of these properties into
producing mines where justified, acquisition and improvement
of producing properties, increasing the amount and
timeliness of internal and external financial reporting and
building and maintaining a complement of well trained and
highly motivated employees. The Compensation Committee also
compared salaries and bonuses with those paid by other gold
mining companies.
The Company's Compensation Committee did not make its
determinations based specifically upon objective measures of
corporate performance in 1995 such as revenue or net income,
nor did that Committee set any targets of performance using
such objective measures. The Committee believes that, for a
growing exploration and mining company, primary emphasis
<PAGE>
should be placed on the exploration and development of
mining properties with superior potential that will
ultimately result in the achievement of improved financial
results, through mineral production or property sale. The
Committee considered the performance of the Company's CEO
and other executive officers during 1995 as well as other
factors discussed above in making its compensation
decisions.
The salary paid by the Company to James A. Knox for his
services as President and Chief Executive Officer during
most of 1995 was in accordance with the Employment Agreement
which the Company entered into with Mr. Knox in July of
1993. During 1995 Mr. Knox was granted an option to
purchase up to 50,000 shares of the Company's common stock.
The number of options granted to Mr. Knox and the other
executive officers was based on the Compensation Committee's
assessment of the officers performance and a review of
similar benefits offered by other gold mining companies.
The exercise price for all options granted in 1995 was the
fair market value of the stock on the date of grant.
George J. Allen
Donald P. Bellum
Gregory Pusey
Performance Graph
Graph showing the performance of USMX, Inc. Stock as compared
with the NASDAQ Stock market and the S & P Gold Mining Index
The above graph assumes an initial investment of $100
as of the close of trading December 31, 1990. Each of the
data points gives the dollar value of the investment from
December 31, 1990, forward assuming dividends, where paid,
are reinvested monthly plus any price change in the
investment.
<PAGE>
Transactions with Management and Others
As of December 31, 1995, the Company had provided
collateral in the form of Certificates of Deposit totaling
approximately $283,000 to secure repayment of bank loans to
four employees of the Company including two officers (Paul
B. Valenti - $114,408 and Donald E. Nilson - $52,778). The
employees have pledged a total of 134,439 shares of the
Companys common stock to the Company to secure repayment of
these obligations.
In March 1995, the Company acquired all of the
outstanding capital stock of Mega Minerals S.A., an
Ecuadorian company. The Company assumed obligations of
approximately $120,000, and agreed to pay the seller a 10%
net proceeds royalty on any production from the concessions
after recovery of all capital expenditures. Gregory Pusey,
a director and principal shareholder of the seller, is also
a director of the Company. The assets of Mega Minerals S.A.
consist of eight exploration concessions and the rights to
acquire four additional exploration concessions, all located
in the Nambija-Zamora gold belt of southern Ecuador.
Relationship with Independent Certified Public Accountants
The firm of KPMG Peat Marwick LLP was engaged to audit
the financial statements of the Company for the year ended
December 31, 1995. A representative of KPMG Peat Marwick
LLP is expected to be present at the meeting and available
to respond to appropriate questions and, although the firm
has indicated that no statement will be made, an opportunity
for a statement will be provided. Management has not made
an appointment of auditors for 1996 but anticipates that it
will appoint KPMG Peat Marwick LLP.
Section 16 Reporting
Section 16(a) of the Securities Exchange Act of 1934,
as amended, requires the Company's officers and directors,
and persons who own more than 10% of a registered class of
the Company's equity securities, to file reports of
ownership and changes in ownership to the Securities and
Exchange Commission. Officers, directors and greater than
10% stockholders are required by the regulations of the
Securities and Exchange Commission to furnish the Company
with copies of all Section 16(a) reports they file. Based
solely on its review of copies of such reports received by
it and written representations from certain reporting
persons that no other reports were required for those
persons, the Company believes that all filing requirements
applicable to its officers, directors and greater than 10%
stockholders were complied with for the fiscal year ended
December 31, 1995.
Stockholder Proposals
Any proposal which a stockholder may desire to present
to the Annual Meeting of Stockholders for the year ending
December 31, 1996, must be received in writing by the
Secretary of the Company prior to December 1, 1996.
<PAGE>
Other Matters
The Board does not know of any other matters to be
brought before the meeting. However, if any other matters
should properly come before the meeting, it is the intention
of the persons named in the accompanying proxy to vote such
Proxy as in their discretion they may deem advisable.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Donald E. Nilson
Donald E. Nilson, Secretary
Dated: May 24, 1996
