<PAGE> 1
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. )
--------
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14(a)-11(c) or Section
240.14a-12
Uranium Resources, Inc.
- ----------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- ----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/x/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1) or 14a-6(i)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11: / /
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(4) Proposed maximum aggregate value of transaction:
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/ / Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / Check box if any part of the fee is offset as provided by the Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(4) Date Filed:
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<PAGE> 2
URANIUM RESOURCES, INC.
12750 MERIT DRIVE, SUITE 1020
DALLAS, TEXAS 75251
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 29, 1996
To the Stockholders of
URANIUM RESOURCES, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Uranium
Resources, Inc., a Delaware corporation (the "Company"), will be held at the
Marriott Bayfront Corpus Christi, 900 North Shoreline Boulevard, Corpus Christi,
Texas 78401 on Wednesday, May 29, 1996, at 9:00 a.m., local time, for the
following purposes:
1. To elect four (4) directors of the Company to serve until the next
annual meeting of stockholders or until their respective successors shall be
elected and qualified;
2. To consider and vote upon a proposal to amend Article 4 of the Company's
Restated Certificate of Incorporation to increase the authorized shares of
common stock, $.001 par value per share, from 12,500,000 shares to 25,000,000
shares;
3. To consider and vote upon a proposal to ratify the selection of Arthur
Andersen, LLP, independent accountants, as independent auditors for the Company
for the fiscal year ending December 31, 1996; and
4. To transact such other business as may properly come before the Meeting
or any adjournment thereof.
Only stockholders of record at the close of business on April 15, 1996, are
entitled to notice of and to vote at the Meeting or any adjournment thereof.
STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER
OR NOT YOU PLAN TO BE PRESENT AT THE MEETING, YOU ARE REQUESTED TO SIGN AND
RETURN THE ENCLOSED PROXY IN THE ENCLOSED ENVELOPE SO THAT YOUR SHARES MAY BE
VOTED IN ACCORDANCE WITH YOUR WISHES AND IN ORDER THAT THE PRESENCE OF A QUORUM
MAY BE ASSURED. THE GIVING OF SUCH PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN
PERSON, SHOULD YOU LATER DECIDE TO ATTEND THE MEETING. PLEASE DATE AND SIGN THE
ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. YOUR VOTE IS
IMPORTANT.
By Order of the Board of Directors
------------------------------------
Thomas H. Ehrlich, Secretary
DALLAS, TEXAS
April 19, 1996
<PAGE> 3
12750 MERIT DRIVE, SUITE 1020
DALLAS, TEXAS 75251
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 29, 1996
This Proxy Statement is furnished to stockholders of Uranium Resources,
Inc., a Delaware corporation (the "Company"), in connection with the
solicitation of proxies by the Board of Directors of the Company for use at the
Annual Meeting of Stockholders (the "Meeting") to be held at the Marriott
Bayfront Corpus Christi, 900 North Shoreline Boulevard, Corpus Christi, Texas
78401 on Wednesday, May 29, 1996, at 9:00 a.m., local time, for the purposes set
forth in the accompanying Notice of Annual Meeting of Stockholders. The
approximate date on which this Proxy Statement and the enclosed Proxy will first
be sent to stockholders is April 19, 1996.
ACTION TO BE TAKEN AT THE MEETING
Shares represented by a properly executed Proxy, unless the stockholder
otherwise instructs in the Proxy, will be voted (a) for the election of the four
individuals named below under the caption Election of Directors as directors of
the Company; (b) for the approval of the amendment (the "Amendment") to Article
4 of the Company's Restated Certificate of Incorporation to increase the
Company's authorized common stock, $.001 per value (the "Common Stock") from
12,500,000 shares to 25,000,000 shares; (c) for the ratification of the
selection of Arthur Andersen, LLP, independent accountants, as independent
auditors of the Company for the fiscal year ending December 31, 1996; and (d) at
the discretion of the proxy holders on any other matter or business that may be
properly presented at the Meeting or any adjournment thereof. Where a
stockholder properly executes a Proxy and gives instructions on how his shares
are to be voted, the shares will be voted in accordance with those instructions.
A Proxy may be revoked at any time by a stockholder before it is exercised
by giving written notice to the Secretary of the Company, or by signing and
delivering a Proxy which is dated later, or, if the stockholder attends the
Meeting in person, by either notice of revocation to the inspectors of election
at the Meeting or by voting at the Meeting.
The only matters that management intends to present at the Meeting are the
three matters referenced in subparagraphs (a) through (c) above. If any other
matter or business is properly presented at the Meeting, the proxy holders will
vote upon it in accordance with their best judgment.
2
<PAGE> 4
VOTING SECURITIES
The record date for the Meeting is April 15, 1996. Only stockholders of
record at the close of business on that date will be entitled to vote at the
Meeting. At the close of business on that date, there were issued and
outstanding [__________] shares of the Company's Common Stock entitled to one
vote per share. In the election of directors, cumulative voting is not allowed.
A majority of the outstanding Common Stock, present in person or by Proxy and
entitled to vote, will constitute a quorum for the transaction of business at
the Meeting. Under Delaware law and the Company's Bylaws, if a quorum is present
at the Meeting: (i) to be elected a director, each nominee must receive a
plurality of the votes of the shares present in person or by Proxy at the
Meeting and entitled to vote on the matter, and (ii) the affirmative vote of the
majority of shares present in person or by Proxy at the Meeting and entitled to
vote on the matter is required to (a) approve the Amendment, (b) ratify the
selection of Arthur Andersen, LLP, as independent auditors of the Company for
the fiscal year ending December 31, 1996, and (c) approve any other matter
submitted to a vote of stockholders at the Meeting. In the election of
directors, any action other than a vote for a nominee will have the practical
effect of voting against the nominee. Abstention from voting on any matter
presented at the Meeting, will have the practical effect of voting against any
such matter since it is one less vote for approval. Broker non-votes on any
matter will not be considered "shares present" for voting purposes.
BENEFICIAL OWNERSHIP OF THE COMPANY'S COMMON STOCK
The following table sets forth, as of March 15, 1996, certain information
regarding persons known by the Company to be the beneficial owner of more than
5% of the outstanding shares of the Company's Common Stock. Shown separately in
the second table below is certain information regarding the beneficial ownership
of the Company's Common Stock by (i) each director and nominee for director of
the Company, (ii) each of the executive officers named in the Summary
Compensation Table set forth below under the caption Executive Compensation, and
(iii) all directors and executive officers as a group.
3
<PAGE> 5
PRINCIPAL STOCKHOLDERS
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE PERCENT OF
BENEFICIAL OWNER OF BENEFICIAL CLASS(2)
---------------- OWNERSHIP(1) --------
------------
<S> <C> <C>
Oren L. Benton 1,252,882(3) 14.3%
1515 Arapahoe Street
Three Park Central, Suite 1000
Denver, CO 80202
Barry R. Feirstein 750,000 8.6%
Feirstein Capital Management Corp.
767 Third Avenue
28th Floor
New York, NY 10017
Raymond G. Larson 685,128 7.8%
P.O. Box 276
Crestone, CO 81131
Lindner Growth Fund 811,525(4) 9.3%
7711 Carondelet Avenue
Suite 700
Clayton, MO 63105
Lindner Dividend Fund 2,589,000(4)(5) 24.6%
7711 Carondelet Avenue
Suite 700
Clayton, MO 63105
Lindner Bulwark Fund 750,000(4)(6) 7.9%
7711 Carondelet Avenue
Suite 700
Clayton, MO 63105
Ryback Management Corporation 407,000(7) 4.6%
7711 Carondelet Avenue
Suite 700
Clayton, MO 63105
</TABLE>
- -------------------------------------------
(1) Each person has sole voting and investment power with respect to the shares
listed, unless otherwise indicated. Beneficial ownership includes shares
over which the indicated beneficial owner exercises voting and/or
investment power.
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<PAGE> 6
(2) The shares owned by each person, and the shares included in the total
number of shares outstanding, have been adjusted, and the percentages owned
have been computed, in accordance with Rule 13d-3(d)(1) under the
Securities Exchange Act of 1934. Shares subject to options or warrants
currently exercisable or exercisable within 60 days are deemed outstanding
for computing the percentage ownership of the person holding such options
or warrants, but not deemed outstanding for computing the percentage
ownership of any other person.
(3) Includes 736,842 shares owned by Concord International Mining and
Management Corp. of which Mr. Benton is the sole stockholder.
(4) Lindner Growth Fund, Lindner Dividend Fund, and Lindner Bulwark Fund (the
"Lindner Group") are members of the same family of mutual funds and may be
deemed collectively as a controlling stockholder of the Company. The
Lindner Group is managed by Ryback Management Corporation ("Ryback"), an
investment adviser. Ryback has discretionary authority over the shares
owned beneficially by the Lindner Group, including the power to vote and
dispose of such shares.
(5) Includes 839,000 outstanding shares owned beneficially by Lindner Dividend
Fund, 1,125,000 shares issuable upon conversion of the Notes and 625,000
shares issuable upon exercise of the Warrants.
(6) Includes 375,000 shares issuable upon conversion of the Notes and 375,000
issuable upon exercise of the Warrants.
(7) Ryback manages the accounts of third parties that are not affiliated with
the Lindner Group. Such parties own beneficially 407,000 outstanding shares
over which Ryback has discretionary authority to vote and dispose of such
shares.
5
<PAGE> 7
MANAGEMENT
<TABLE>
<CAPTION>
NAME OF AMOUNT AND PERCENT OF
BENEFICIAL OWNER NATURE OF CLASS(2)
---------------- BENEFICIAL --------
OWNERSHIP(1)
------------
<S> <C> <C>
William M. McKnight, Jr. 274,684(3) 3.1%
Wallace M. Mays 0(4) *
Paul K. Willmott 30,250(5) *
Joe H. Card 6,750(6) *
Leland O. Erdahl 106,750(7) 1.2%
George R. Ireland 109,000(8) 1.2%
James B. Tompkins 100,000(9) 1.1%
All executive officers and directors as a 629,834(10) 6.9%
group (8 persons)
</TABLE>
- ----------
* Less than 1%.
(1) Each person has sole voting and investment power with respect to the shares
listed, unless otherwise indicated. Beneficial ownership includes shares
over which the indicated beneficial owner exercises voting and/or
investment power.
(2) The shares owned by each person, and the shares included in the total
number of shares outstanding, have been adjusted, and the percentages owned
have been computed, in accordance with Rule 13d-3(d)(1) under the
Securities Exchange Act of 1934. Shares subject to options currently
exercisable or exercisable within 60 days are deemed outstanding for
computing the percentage ownership of the person holding such options, but
not deemed outstanding for computing the percentage ownership of any other
person.
(3) Includes 55,000 shares that may be obtained by Mr. McKnight, through the
exercise of stock options which are currently exercisable or will become
exercisable within 60 days. Such number does not include 62,480 shares that
may be obtained by Mr. McKnight through the exercise of stock options
exercisable more than 60 days from the date hereof.
(4) Mr. Mays resigned as Chairman of the Board and Chief Executive Officer
effective as of July 31, 1995. Pursuant to his resignation, options held by
Mr. Mays to purchase 200,000 shares of the Company's Common Stock, which
were not vested at the time of his resignation, expired. In connection with
Mr. Mays' resignation, the Company granted Mr. Mays options to purchase
50,000 shares of Common Stock at an exercise price of $4.75 per share.
6
<PAGE> 8
(5) Includes 29,250 shares that may be obtained by Mr. Willmott through the
exercise of stock options which are currently exercisable. Does not include
268,620 shares that may be obtained by Mr. Willmott through the exercise of
stock options exercisable more than 60 days from the date hereof.
(6) Includes 6,750 shares that may be obtained by Mr. Card through the exercise
of stock options which are currently exercisable. Does not include 19,504
shares that may be obtained by Mr. Card through the exercise of stock
options exercisable more than 60 days from the date hereof.
(7) Includes (i) 105,250 shares that may be obtained by Mr. Erdahl through the
exercise of stock options which are currently exercisable. Does not include
16,750 shares that may be obtained by Mr. Erdahl through the exercise of
stock options exercisable more than 60 days from the date hereof.
(8) Includes 100,000 shares that may be obtained by Mr. Ireland through the
exercise of stock options which are currently exercisable. Does not include
21,000 shares that may be obtained by Mr. Ireland through the exercise of
stock options exercisable more than 60 days from the date hereof.
(9) Includes 100,000 shares that may be obtained by Mr. Tompkins through the
exercise of stock options which are currently exercisable. Does not include
21,000 shares that may be obtained by Mr. Tompkins through the exercise of
stock options exercisable more than 60 days from the date hereof.
(10) Includes 396,250 shares that may be obtained through the exercise of stock
options which are currently exercisable or will become exercisable within
60 days.
CHANGE IN CONTROL
At various times between September 1993 and March 30, 1995, Oren L. Benton
or entities controlled by Mr. Benton acquired, from certain officers, directors
and employees of the Company, options to purchase a majority of the then
outstanding shares of Common Stock and proxies to vote those shares. Such
options and proxies expired on March 30, 1995. The options expired unexercised.
7
<PAGE> 9
ELECTION OF DIRECTORS
(PROPOSAL 1 ON PROXY CARD)
Under the Company's Bylaws and pursuant to a resolution of the Board of
Directors, the Board of Directors has fixed the size of the Board at four.
Directors are elected to serve until the next annual meeting of stockholders or
until their successors are elected and qualified. The Company's Board of
Directors is not divided into classes; therefore, all four directors are to be
elected at the Meeting.
Unless authority is withheld, it is intended that the shares represented by
a properly executed Proxy will be voted for the election of all of the nominees
(Paul K. Willmott, Leland O. Erdahl, George R. Ireland and James B. Tompkins) as
directors. The nominees are currently all the members of the Company's Board of
Directors. If these nominees are unable to serve for any reason, such Proxy will
be voted for such persons as shall be designated by the Board of Directors to
replace such nominees. The Board of Directors has no reason to expect that these
nominees will be unable to serve.
The following table sets forth certain information concerning the
individuals nominated for election as directors of the Company:
<TABLE>
<CAPTION>
NAME AGE POSITIONS AND OFFICES
---- --- WITH THE COMPANY
----------------
<S> <C> <C>
Paul K. Willmott 56 Chairman, Chief Executive Officer, President, and Director
Leland O. Erdahl 67 Director
George R. Ireland 39 Director
James B. Tompkins 39 Director
</TABLE>
NOMINEES FOR DIRECTOR
PAUL K. WILLMOTT has served as a director of the Company since August 1994,
as President of the Company since February 1995, as Chief Financial and
Accounting Officer from April 12, 1995 through September 25, 1995 and as
Chairman of the Board and Chief Executive Officer effective July 31, 1995. Mr.
Willmott retired from Union Carbide Corporation ("Union Carbide") where he was
involved during the last 25 years in the finance and operation of Union
Carbide's world-wide mining and metals business. Most recently, Mr. Willmott was
President of UMETCO Minerals Corporation, a wholly-owned subsidiary of Union
Carbide, from 1987 to 1991, where he was responsible for Union Carbide's Uranium
and Vanadium businesses. From January 1993 until February 1995, Mr. Willmott was
engaged by the Concord Mining Unit, which is owned or controlled by Oren L.
Benton ("CMU"), as a senior vice president. In this capacity, he was primarily
involved in the acquisition of UMETCO Minerals Corporation's Uranium and
Vanadium operating assets by EFN. Mr. Willmott graduated from Michigan
Technological University with a Bachelor of Science degree in Mining in 1964 and
a
8
<PAGE> 10
Bachelor of Science Degree in Engineering Administration in 1967. He has been an
active member of the American Institute of Mining Engineers, the Canadian
Institute of Mining Engineers and a number of state professional organizations.
LELAND O. ERDAHL has served as a director of the Company since July 11,
1994. Mr. Erdahl previously served as President and Chief Executive Officer for
Stolar, Inc. from 1986 to 1991. Stolar was a high-tech company involved in the
radio wave imaging of geologic media and underground radio transmission for
voice and data. He was also President and CEO of Albuquerque Uranium
Corporation, a Uranium mining company, from 1987 to 1991. He is a Certified
Public Accountant and is a graduate from the College of Santa Fe. He is
currently a director of Hecla Mining Company, Freeport McMoRan Copper and Gold
Inc., Canyon Resources Corporation, Original Sixteen to One Mine, Inc., and a
trustee for a group of John Hancock Mutual Funds. He is also a director of Santa
Fe Ingredients Company of California, Inc. and Santa Fe Ingredients Company,
Inc., both private food processing companies.
GEORGE R. IRELAND has served as a director since May 26, 1995. Mr. Ireland
is a analyst for and a partner in the D.M. Knott Limited Partnership, a private
investment partnership. Mr. Ireland specializes in investing in securities of
natural resource and other basic industrial companies, both domestically and
abroad. From 1987 to 1991, he was a Vice President of Fulcrum Management, Inc.,
which was the manager of the VenturesTrident Limited Partnerships, venture
capital funds dedicated to investing in the mining industry, and Senior Vice
President and Chief Financial Officer of MinVed Gold Corporation, a company in
which the VenturesTrident funds had a significant investment. Mr. Ireland
graduated from the University of Michigan with degrees in Geology and Resource
Economics. He also attended the Graduate School of Business Administration of
New York University. Mr. Ireland is a director of Merrill & Ring, Inc., a
private land and timber holding company in the state of Washington. Mr. Ireland
acted as a consultant to Ryback Management Corporation and performed due
diligence on the Company in connection with Ryback's loan of $6 million to the
Company on behalf of members of the Lindner Group discussed elsewhere in this
Proxy Statement. Mr. Ireland is not otherwise affiliated with the Lindner Group
or Ryback.
JAMES B. TOMPKINS is a registered investment advisor and provides
independent research to institutional investors through Tompkins & Company. From
1988 until 1990, Mr. Tompkins acted as a sole proprietor of Tompkins & Company,
advising creditors of companies in bankruptcy as to the value of claims and
realizing proceeds on those claims. In that capacity, Mr. Tompkins acted as a
registered investment advisor. Between October 1990 and April 1993, Mr. Tompkins
was employed by Columbia Savings as a bond manager where he was responsible for
real estate loan workouts and asset disposition. He is an attorney and a
Chartered Financial Analyst. Mr. Tompkins graduated from the University of
Alabama in 1979 and received his Juris Doctor from the University of Alabama
School of Law in 1983. Mr. Tompkins acted as a consultant to Ryback Management
Corporation and performed due diligence on the Company in connection with
Ryback's loan of $6 million to the Company on behalf of members of the Lindner
Group discussed elsewhere in this Proxy Statement. Mr. Tompkins is not otherwise
affiliated with the Lindner Group or Ryback.
9
<PAGE> 11
ARRANGEMENTS REGARDING ELECTION OF DIRECTORS
On January 10, 1995, at the request of Oren L. Benton, Mr. Benton was
appointed to the Board and elected Chairman and Chief Executive Officer of the
Company. He resigned from those positions on February 7, 1995. Between July 7,
1994 and March 30, 1995, Mr. Benton controlled a majority of the Common Stock of
the Company through various mechanisms. On March 30, 1995, all such arrangements
terminated.
On May 25, 1995, George R. Ireland and James B. Tompkins were appointed to
the Board of Directors following the closing of the Stock Issue Transaction. In
connection with the Stock Issue Transaction, the Company has agreed to nominate
two individuals designated by Lindner for election to the Board. Messrs. Ireland
and Tompkins are Lindner's designees.
Mr. Mays resigned from the Company's Board of Directors effective as of
July 31, 1995.
LEGAL PROCEEDINGS
On July 12, 1995, the Company filed a lawsuit in the federal district court
in Colorado against Professional Bank, a Colorado chartered bank ("ProBank").
The Company believes that ProBank is owned or controlled by Oren L. Benton, the
former Chairman of the Company's Board of Directors. In the action styled
Uranium Resources, Inc. v. Professional Bank, the Company alleges that ProBank
transferred $1,080,000, without the Company's authorization, from the Company's
account at ProBank to the accounts maintained at ProBank of various entities and
an individual affiliated with Mr. Benton. The Company has recovered $300,000 of
the total and is seeking to recover the balance from ProBank in the lawsuit.
10
<PAGE> 12
OTHER EXECUTIVE OFFICERS
The following table sets forth certain information concerning executive
officers who are not also directors of the Company:
<TABLE>
<CAPTION>
NAME AGE POSITIONS AND OFFICES
---- --- WITH THE COMPANY
----------------
<S> <C> <C>
William M. McKnight, Jr. 59 Senior Vice President - Operations
Joe H. Card 42 Senior Vice President - Marketing
Thomas H. Ehrlich 36 Vice President and Chief Financial Officer
Richard F. Clement, Jr. 52 Senior Vice President - Exploration
Harry L. Anthony, IV 48 Vice President - Engineering
Mark S. Pelizza 43 Vice President - Health, Safety and
Environmental Affairs
</TABLE>
The following sets forth certain information concerning the business
experience of the foregoing executive officers during the past five years.
WILLIAM M. MCKNIGHT, JR. joined the Company in March 1978 and served as the
Company's Executive Vice President, Chief Operating Officer and Director until
August 1994. From August 1994 to February 1995, he directed the Company's
operations in South Texas and New Mexico and on February 24, 1995, he was
appointed Vice President of Operations for the Company. Mr. McKnight received a
B.S. in Geology from Centenary College in 1959 and a M.S. in Sedimentary Geology
from Florida State University in 1961.
JOE H. CARD joined the Company as Vice President - Marketing in March 1989.
In February 1993 he was promoted to Senior Vice President - Marketing.
Previously, he spent four years with UG U.S.A., Inc., a U.S. marketing
subsidiary of a major German mining company, most recently as Marketing Manager.
His responsibilities were related to the entire Uranium fuel cycle, primarily in
dealing with U.S. nuclear utilities customers. Prior to his work at UG U.S.A.,
Inc., Mr. Card spent five years with Mitsubishi International Corporation as
marketing manager. He earned a B.B.A. degree in Finance from the University of
Georgia in 1975 and an M.B.A. from Georgia State University in 1978.
THOMAS H. EHRLICH, a certified public accountant, rejoined the Company in
September, 1995 as Vice President and Chief Financial Officer. Immediately prior
to that, Mr. Ehrlich spent nine months as a Division Controller with Affiliated
Computer Services, Inc., an information technology services provider in Dallas,
Texas. Prior to that, he joined the Company in November 1987 as
Controller-Public Reporting and was promoted to Controller and Chief Accounting
Officer in February 1990. In February 1993, Mr. Ehrlich assumed the additional
duties of Vice President and Secretary of the
11
<PAGE> 13
Company. Prior to joining the Company, he spent four years with Deloitte Haskins
& Sells and worked primarily with clients that were publicly held companies.
Prior to his work at Deloitte Haskins & Sells, he spent three years in various
accounting duties at Enserch Exploration, Inc., an oil and gas company in
Dallas, Texas. Mr. Ehrlich received his B.S. B.A. degree in Accounting from
Bryant College in 1981.
RICHARD F. CLEMENT, JR. joined the Company as Vice President-Exploration in
1983. In April 1990, he was appointed Senior Vice President-Exploration. Mr.
Clement was a director of the Company from February 1985 to July 1994 at which
time he resigned his positions as director and officer of the Company. During
the period from July 1994 to February 1996 Mr. Clement remained with the Company
as Exploration Manager. In February 1996 he was again appointed Senior Vice
President-Exploration of the Company as well as the President and a Director of
Hydro Resources, Inc., a wholly owned subsidiary of the Company. Prior to
joining the Company, he spent 16 years with Mobil Oil Corporation, most recently
as vice president and exploration manager for Mobil Energy Minerals-Australia,
where he initiated and managed Mobil's Australian coal, uranium and other
minerals exploration and acquisition programs. Mr. Clement received his B.S.
degree in Geology from Boston College in 1965 and his M.S. degree in Geology
from the University of Vermont in 1967.
HARRY L. ANTHONY, IV has headed the Company's engineering team since 1978.
From April 1978 until April 1990, Mr. Anthony was Vice President - Engineering
of the Company, and in April 1990, he was appointed Senior Vice
President-Engineering. Mr. Anthony was a director of the Company from February
1985 to July 1994 at which time he resigned his positions as director and
officer of the Company. During the period from July 1994 to February 1996 Mr.
Anthony remained with the Company as Engineering Manager. In February 1996 he
was appointed Vice President-Engineering of the Company. Prior to joining the
Company he was employed for eight years by Union Carbide, six of such years as a
hydrometallurgist and the last two years as plant superintendent for Union
Carbide's Palangana solution mining plant in South Texas. Mr. Anthony received a
B.S. degree and a M.S. degree in Engineering Mechanics from Pennsylvania State
University in 1969 and 1973, respectively.
MARK S. PELIZZA has served as the Company's Environmental Manager since
1980, and as such, he has been responsible for all environmental regulatory
activities. In February 1996, he was appointed Vice President Health, Safety and
Environmental Affairs of the Company. Prior to joining the Company, he was
employed for two years by Union Carbide as an Environmental Planning Engineer at
Union Carbide's Palangana solution mining plant in South Texas. Mr. Pelizza
received a M.S. Degree in Engineering Geology from Colorado School of Mines in
1978 and a B.S. Degree in Geology from Fort Lewis College in 1974.
The officers of the Company hold office until their successors are
appointed by the Board of Directors. All officers of the Company are employed on
a full-time basis. There is no family relationship between any director and
executive officer of the Company.
12
<PAGE> 14
BOARD AND COMMITTEE MEETINGS
The Board of Directors held 19 formal meetings during the year ended
December 31, 1995. Each director attended all of the meetings during their
tenure, except for Joe B. Huffstutler, who did not attend the January 11 meeting
and Oren L. Benton who did not attend the February 7, 1995 meeting. In addition
to those meetings, certain actions were taken by unanimous written consent of
the Board of Directors. The Company's officers have made a practice of keeping
directors informed of corporate activities by personal meetings and telephone
discussions and (as indicated above) directors ratify or authorize certain
Company actions through unanimous written consent actions.
The Company has three standing committees of the Board of Directors.
Leland O. Erdahl, George R. Ireland and James B. Tompkins are the current
members of the Audit, the Employees' Stock Option and Compensation Committees.
The Audit Committee's principal functions are to meet with the Company's
independent auditors to review the financial statements contained in the Annual
Report, to review the Company's systems of internal controls and to report to
the Board of Directors thereon. The Employees' Stock Option Committee's
principal function is the administration of the employees' stock option plans
of the Company. The Compensation Committee's function is to determine the
compensation of executive officers and to set guidelines for compensation for
the employees of the Company.
During 1995, the Audit Committee held two formal meetings, the stock
option committee held three formal meetings and the Compensation Committee held
one formal meeting. The Audit Committee met in March 1996 with the Company's
auditors to review the 1995 fiscal year audit.
At present, the Company has no nominating, executive, or similar
committees.
EXECUTIVE COMPENSATION
The following table sets forth certain information with respect to annual
and long-term compensation for services in all capacities for the years ended
December 31, 1995, 1994 and 1993 paid to the Company's Chief Executive Officers
and certain other executive officers of the Company.
13
<PAGE> 15
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------- ----------------------
- -----------------------------------------------------------------------------------------------------------------
OTHER
ANNUAL ALL OTHER
COMPENSA- SECURITIES COMPENSA-
NAME AND PRINCIPAL BONUS TION(1) UNDERLYING TION(2)
POSITION YEAR SALARY ($) ($) ($) OPTIONS (#) ($)
- --------------- ---- ---------- ------- ----------- -------
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Paul K. Willmott 1995 $118,324 $10,500 $ 3,209 240,200 $25,000
Chairman, President and 1994 -- -- -- 21,000 --
Chief Executive Officer(3) 1993 -- -- -- -- --
- -----------------------------------------------------------------------------------------------------------------
Wallace M. Mays 1995 $122,218 $ -- $ -- 50,000 $45,000
Chairman, President & 1994 78,725 -- -- 100,000 --
Chief Executive Officer(3) 1993 -- -- -- -- --
- -----------------------------------------------------------------------------------------------------------------
Joe H. Card 1995 $121,619 $ 6,750 $137,461 6,064 $ --
Senior Vice President - 1994 120,441 -- 36,617 -- --
Marketing 1993 124,760 -- 3,254 -- --
- -----------------------------------------------------------------------------------------------------------------
William M. McKnight, Jr. 1995 $165,959 $10,700 $ 542 33,600 $ 3,673
Director, Senior Vice 1994 190,306 -- 168 -- 3,549
President-Operations 1993 199,373 -- 450 -- 1,753
- -----------------------------------------------------------------------------------------------------------------
Oren L. Benton(4) 1995 $ -- $ -- $ -- $ -- $ --
Chairman, President & Chief 1994 -- -- -- -- --
Executive Officer 1993 -- -- -- -- --
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------
(1) Represents amounts paid for out-of-pocket medical and dental expenses under
the Company's Supplemental Health Care Plan, for Mr. Willmott includes
$3,125, constituting the difference between the fair market value of the
shares of Common Stock on the date of exercise of certain stock options
($7,375) and the exercise price of $4.25 and for Mr. Card includes
$133,453, constituting the difference between the fair market value of the
shares of Common Stock on the date of exercise of certain stock options
($240,028) and the exercise price of $2.94.
(2) Represents contributions made by the Company under the Company's 401(k)
Profit Sharing Plan (see "401(k) Profit Sharing Plan" below), for Mr.
Willmott consists entirely of fees paid as services as a director of the
Company, and for Mr. Mays consists entirely of severance pay received upon
his resignation from the Company as noted below.
(3) Mr. Mays resigned as Chairman of the Board and Chief Executive Officer
effective July 31, 1995. Mr. Willmott was elected President effective
February 24, 1995 and Chairman and Chief Executive Officer effective July
31, 1995.
14
<PAGE> 16
(4) Mr. Benton was elected Chairman and Chief Executive Officer on January 10,
1995 and resigned those positions on February 7, 1995.
SUPPLEMENTAL HEALTH CARE PLAN
The Company has adopted a health care plan (the "Supplemental Plan") for
the officers of the Company and certain of the employees of the Company who are
also stockholders, which supplements the standard health care plan available to
all eligible employees of the Company (the "Standard Plan"). The Supplemental
Plan pays directly to the participant all out-of-pocket medical and dental
expenses not covered under the Standard Plan, including deductibles and
co-insurance amounts. Additionally, the Supplemental Plan provides to each
participant $100,000 of accidental death and dismemberment insurance protection
and a world wide medical assistance benefit. Each participant in the
Supplemental Plan may receive a maximum annual benefit of $50,000 or $100,000,
at the Company's option. The Company pays an annual premium under the
Supplemental Plan equal to $210 per participant plus 10% of claims paid. There
are currently ten officers and employees covered by the Supplemental Plan.
401(k) PROFIT SHARING PLAN
The Company maintains a defined contribution profit sharing plan for
employees of the Company (the "401(k)") that is administered by a committee of
trustees appointed by the Company. All Company employees are eligible to
participate upon the completion of six months of employment, subject to minimum
age requirements. Each year the Company makes a contribution to the 401(k) out
of its current or accumulated net profits (as defined) in an amount determined
by the Board of Directors but not exceeding 15% of the total compensation paid
or accrued to participants during such fiscal year. The Company's contributions
are allocated to participants in amounts equal to 25% (or a higher percentage,
determined at the Company's discretion) of the participants' contributions, up
to 4% of each participant's gross pay. For the plan year ended July 31, 1995 the
Company contributed amounts equal to 25% of the participant's contributions, up
to 4% of gross pay. For the plan year ended July 31, 1994, the Company
contributed amounts equal to 50% of the participants' contribution, up to 4% of
gross pay. For the plan year ended July 31, 1993, the Company contributed
amounts equal to 25% of the participants' contributions, up to 4% of gross pay.
Participants become 20% vested in their Company contribution account for each
year of service until full vesting occurs upon the completion of five years of
service. Distributions are made upon retirement, death or disability in a lump
sum or in installments.
STOCK OPTION PLANS
On December 19, 1995, the Company's Shareholders approved the 1995 Stock
Incentive Plan for key employees of the Company. The Plan authorized grants of
incentive stock options and non-qualified options to purchase up to an aggregate
of 750,000 shares of Common Stock. The Employees' Stock Option Committee of the
Board of Directors is responsible for the administration of
15
<PAGE> 17
the Employees' Plan and has the full authority, subject to the provisions of the
plan, to determine to whom and when to grant options and the number of shares of
Common Stock covered by each grant. As of March 15, 1996, a total of 213,810
shares are reserved for issuance upon exercise of options granted under the
Employees' Plan and 536,190 shares were reserved for exercise upon the future
grant of options under the 1995 Stock Incentive Plan.
The 1995 Stock Incentive Plan replaced the Company's previous plan
maintained for employees under which the Company was authorized to grant
non-qualified options. All outstanding options under that Plan will remain in
effect but no new options will be granted under that Plan. As of March 15, 1996,
a total of 477,881 shares are reserved for issuance under that Plan.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information with respect to options
granted to the executive officer named in the Summary Compensation Table in the
fiscal year ended December 31, 1995.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
POTENTIAL REALIZABLE
VALUE
AT ASSUMED ANNUAL RATES
OF STOCK PRICE
APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
----------------- ---------------
- --------------------------------------------------------------------------------------------------------------
NUMBER PERCENT OF
OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE
OPTIONS EMPLOYEES OR BASE
GRANTED IN FISCAL PRICE EXPIRATION
NAME (#) YEAR ($/Sh) DATE 5% ($) 10% ($)
---- --- ---- ------ ---- ------ -------
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Paul K. Willmott 100,000 19% $4.13 02/24/05 $ 674,000 $1,068,000
100,000 19% $8.38 08/16/05 1,366,000 2,175,000
40,200 8% $6.88 08/31/05 450,240 717,972
- --------------------------------------------------------------------------------------------------------------
Joe H. Card 6,064 1% $6.88 08/31/05 $67,917 $ 108,303
- --------------------------------------------------------------------------------------------------------------
William M. McKnight, Jr. 33,600 6% $6.88 08/31/05 $ 376,320 $ 600,096
- --------------------------------------------------------------------------------------------------------------
Wallace M. Mays 100,000 19% $4.13 02/24/05 $ 674,000 $1,068,000
50,000 9% $4.75 05/31/98 $ 387,000 $ 617,000
- --------------------------------------------------------------------------------------------------------------
</TABLE>
16
<PAGE> 18
EXERCISE OF STOCK OPTIONS AND YEAR-END VALUE
The following sets forth information with respect to each exercise of stock
options during the fiscal year ended December 31, 1995 and the year-end value of
unexercised options held by each of the executive officers named in the Summary
Compensation Table.
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
SECURITIES UNEXERCISED
SHARES UNDERLYING IN-THE-MONEY
ACQUIRED VALUE UNEXERCISED OPTIONS OPTIONS AT FISCAL
ON REALIZED AT FISCAL YEAR END YEAR-END(1)
NAME EXERCISE (#) ($) (#) ($)
---- ------------ --- --- ---
EXERCISABLE/ EXERCISABLE/
UNEXERCISABLE UNEXERCISABLE
------------- -------------
<S> <C> <C> <C> <C>
Paul K. Willmott (1) 0/100,000 0/137,000
0/100,000
0/40,200
1,000 $ 3,125 4,000/15,000 5,000/18,750
250/750
Wallace M. Mays (2) 0/100,000 0/125,000
0/100,000 0/137,000
50,000/0 $37,500/0
Joe H. Card (3) 36,250 $133,453 0/18,750 0/48,000
0/6,064
William M. McKnight, Jr. (3) -- -- 41,250/13,750 105,600/35,200
0/33,600
</TABLE>
- ----------------------------------------------------------
(1) Based on the closing price on the NASDAQ-NMS on December 29, 1995 ($5.50)
less the grant prices of $4.13, $8.38, $6.88, $4.25 and $5.88 respectively.
(2) Based on the closing price on the NASDAQ-NMS on December 29, 1995 ($5.50)
less the grant prices of $4.25, $4.13 and $4.75, respectively. Mr. Mays
resigned as Chairman of the Board and Chief Executive Officer effective
July 31, 1995. All such options expired unexercised. In connection with his
resignation, the Company granted Mr. Mays options to purchase 50,000 shares
of Common Stock at an exercise price of $4.75 per share.
(3) Based on the closing price on the NASDAQ-NMS on December 29, 1995 ($5.50)
less the grant prices of $2.94 and $6.88, respectively.
17
<PAGE> 19
DIRECTOR COMPENSATION
Under the Company's Directors' Stock Option Plan ("Directors' Plan"), each
new non-employee director elected or appointed to the Board of Directors for the
first time shall be granted an option to purchase 20,000 shares of Common Stock
as of the date of such election or appointment and, upon the re-election of a
non-employee director at an annual meeting of the Company's stockholders, such
director will be granted an option to purchase an additional 1,000 shares as of
the date of such election. As of March 15, 1996, a total of 84,000 shares are
reserved for issuance upon exercise of options granted under the Directors' Plan
and 66,000 shares were reserved for exercise upon the future grant of options
under the Directors' Plan. Mr. Erdahl holds options covering 22,000 shares under
the Directors' Plan and each of Messrs. Ireland and Tompkins holds options
covering 21,000 shares under the Directors' Plan. Mr. Willmott holds options
covering 20,000 shares under the Directors' Plan. In addition, Messrs. Ireland,
Tompkins and Erdahl each hold options to purchase 100,000 shares of Common
Stock. Those options were not granted under the Directors' Plan. Cash
compensation for 1995 to the non-employee directors was paid at the rate of
$3,000 per quarter plus $1,000 per meeting attended of the Board and committees
of the Board.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In August 1994, the Company formed a Compensation Committee to determine
the compensation of the executive officers and to set the guidelines for
compensation for the employees of the Company. During the fiscal year ended
December 31, 1995, the Compensation Committee was comprised of Leland O. Erdahl,
George R. Ireland and James B. Tompkins. No member of the Compensation Committee
has been or was during the fiscal year ended December 31, 1995 an officer or
employee of the Company or any of the Company's subsidiaries. In addition, no
member of the Compensation Committee during the fiscal year ended December 31,
1995 had any relationship requiring disclosure under the caption "Certain
Relationships and Related Transactions." No executive officer of the Company
serves or served on the compensation committee of another entity during the
fiscal year ended December 31, 1995 and no executive officer of the Company
serves or served as a director of another entity who has or had an executive
officer serving on the Compensation Committee of the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
BENTON TRANSFER AND SEC INVESTIGATION
Between January 17, 1995 and January 20, 1995, Oren L. Benton, then the
Chairman of the Board and Chief Executive Officer of the Company, transferred
$1,080,000 of the Company's funds to CSI Enterprises, Inc. ("CSI"), Energy Fuels
Exploration, Inc. ("EFX") and an individual
18
<PAGE> 20
affiliated with Mr. Benton. CSI and EFX are owned or controlled by Mr. Benton,
and both companies are now in bankruptcy. The transfer of funds was not
authorized by the Company's Board of Directors. The Company is pursuing various
actions to recover the $1,080,000 and has recovered $300,000 of the total so
far. The ability of the Company to recover the balance is not certain.
In addition, the Securities and Exchange Commission is currently conducting
an informal investigation relating to the Company's liquidity problems during
1994 and 1995. The Company is unable to predict the outcome of this
investigation.
MILL JOINT VENTURE
In the Fall of 1994, the Company entered into discussions with Energy Fuels
Limited ("EFL") relating to the creation of a joint venture for the processing
of approximately 2 million pounds of uranium. The uranium was previously mined
but not-yet-milled uranium produced from mines in Arizona owned by partnerships
in which EFL was the general partner and various Swiss utilities were the
limited partners. The uranium was to be processed through the White Mesa Mill
located in Utah which was owned by a partnership whose general partner is Energy
Fuels Nuclear and whose limited partners are some of the same Swiss utilities
that own an interest in the Arizona mines.
On January 11, 1995 the Company accepted EFL's proposal for a joint venture
and transferred $1 million to Energy Fuels Exploration in partial performance of
its obligations under the joint venture. The terms and conditions of the joint
venture were set forth in a draft joint venture agreement, but the agreement has
not been executed. Because of the bankruptcy of various entities controlled by
Mr. Benton, the realizability of the $1 million investment is doubtful.
LOANS FROM WALLACE M. MAYS AND CERTAIN CURRENT AND FORMER MEMBERS OF MANAGEMENT
Mr. Mays loaned the Company $65,000 on February 24, 1995 and $25,000 on
March 27, 1995 (the "Mays Loans") in exchange for notes issued by the Company
and a deed of trust on the Rosita property as collateral. Certain current and
former members of management have made loans to employees of the Company during
1994 and 1995. In addition, a partnership in which certain current and former
members of management are the partners loaned the Company $25,000 on April 7,
1995. On May 17, 1995, William M. McKnight, Jr. loaned the Company $20,000. On
May 26, 1995, the Mays Loans were repaid by the Company. The remaining loans
were repaid on October 6, 1995.
19
<PAGE> 21
ACQUISITION OF SHARES BY MR. BENTON
In the first quarter of 1995, all arrangements terminated between Mr.
Benton and various members of the Company's management by which Mr. Benton
controlled the voting of some or all of their shares.
LINDNER NOTES AND WARRANTS
On May 25, 1995, the Company received $6,000,000 in cash through the
issuance of 6.5% secured convertible notes in the aggregate principal amounts of
$1,500,000 and $4,500,000 initially convertible at $4.00 per share into 375,000
and 1,125,000 shares of Common Stock to Lindner Investments and Lindner
Dividend, respectively. In addition, the Company issued immediately exercisable
warrants to purchase 375,000 shares and 1,125,000 shares of the Company's Common
Stock at an initial exercise price of $4.00 per share to Lindner Investments and
Lindner Dividend, respectively. On December 26, 1995, Lindner Dividend exercised
500,000 warrants.
DRILLING COMPANY SERVICES
During 1995, the Company utilized Cinco E Corp., ("Cinco") for drilling
services at the Company's Rosita and Kingsville Dome projects. All work awarded
to Cinco was granted based upon a competitive bidding process. The amount paid
to Cinco during 1995 was approximately $725,000. The son of Mr. William M.
McKnight, Jr. (Senior Vice President - Operations of the Company) owns 50% of
Cinco and Mr. McKnight, Jr. provided working capital financing of up to
approximately $400,000 to the drilling company during 1995.
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 with the SEC and the National Association of
Securities Dealers, Inc. Officers, directors, and greater than 10% stockholders
are required by SEC regulation to furnish the Company with copies of all Section
16(a) filings.
Based solely on its review of copies of such forms received by it and
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that, during, the year ended
December 31, 1995, its officers, directors, and greater than 10% beneficial
owners complied with all applicable filing requirements except as noted below.
The Company is not aware of any Form 4 or Form 5 filing for Oren L. Benton
or any related entities since Mr. Benton's original Form 3 filing on January 11,
1995.
20
<PAGE> 22
COMPENSATION COMMITTEE REPORT
Under rules established by the Securities and Exchange Commission, the
Company is required to provide certain information regarding the compensation of
its Chief Executive Officer and other executive officers whose salary and bonus
exceed $100,000 per year. Disclosure requirements include a report explaining
the rationale and considerations that lead to fundamental executive compensation
decisions. The following report has been prepared to fulfill this requirement.
The Compensation Committee ("Committee") of the Board of Directors sets and
administers the policies that govern the annual compensation and long-term
compensation of executive officers of the Company. None of the members of the
Committee is currently an employee of the Company. The Committee makes all
decisions concerning compensation of all executive officers as defined by the
Securities and Exchange Commission and all awards of stock options under the
Company's 1995 Stock Incentive Plan. The Committee's policy is to offer
executive officers competitive compensation packages that will permit the
Company to attract and retain highly qualified individuals and to motivate and
reward such individuals on the basis of the Company's performance.
At present, the executive compensation package consists of salary, annual
cash bonus, and long-term incentive opportunities in the form of stock options.
Salary and bonus increases were evaluated reference to executive compensation
packages reported by other companies within the mining industry with
characteristics similar to those of the Company. Finally, the Committee
considered the extent to which an employee contributed to the successes of the
Company.
On August 16, 1995, executive officers were granted stock options, subject
to stockholder approval of the Company's Stock Incentive Plan, based upon a
review of the Company's performance as described above. Such stock based awards
will continue to be an important element of the executive compensation package
because they aid in the objective of aligning the officers' interests with those
of the stockholders by giving the officers a direct stake in the performance of
the Company.
The compensation of the Chief Executive Officer of the Company is
determined in the same manner as the compensation for other executive officers
as described above. As a result, the compensation of the Chief Executive Officer
is largely dependent upon the overall performance of the Company as well as a
comparison to compensation being paid by other comparable peer companies to
their chief executive officers. The Chief Executive Officer's long-term
compensation from stock options is also largely dependent upon Company
performance.
March 12, 1996
MEMBERS OF THE COMPENSATION COMMITTEE
Leland O. Erdahl
George R. Ireland
James B. Tompkins
21
<PAGE> 23
STOCK PRICE PERFORMANCE GRAPH
The following graph compares the performance of the Company's Common Stock
to the CRSP Total Return Index for The Nasdaq Stock Market (U.S. Companies) and
to a self-determined peer group comprised of American Nuclear Corporation,
United States Energy Corp. and Rio Algom Mines, Ltd. for the Company's last five
fiscal years. The graph assumes that the value of an investment in the Company's
Common Stock and each index was $100 at December 31, 1990, and that all
dividends were reinvested.
[GRAPH]
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
1990-1995
<TABLE>
<CAPTION>
Total Returns Index For: 12/31/90 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Nasdaq Stock Market
(U.S. Companies) (a) 100.0 160.5 186.8 214.5 209.7 296.6
Self-Determined Peer Group (b)(c) 100.0 125.9 123.8 158.5 179.2 182.4
Uranium Resources, Inc. (c) 100.0 54.3 74.2 82.8 139.5 107.7
</TABLE>
*Total return assumes reinvestment of dividends.
(a) Source: National Association of Securities Dealers, Inc. All dividends are
reinvested on the ex-dividend date. The CRSP Total Return Index includes
all domestic common shares traded on the NASDAQ National Market and the
NASDAQ Small-Cap Market.
(b) Comprised of United States Energy Corp. and Rio Algom Mines, Ltd.
(c) Source: The Center for Research in Security Prices (affiliated with the
University of Chicago Graduate School of Business). All dividends are
reinvested on ex-dividend date.
22
<PAGE> 24
PROPOSAL TO AMEND ARTICLE 4 OF THE
RESTATED CERTIFICATE OF INCORPORATION TO
INCREASE THE NUMBER OF SHARES OF AUTHORIZED COMMON STOCK
(PROPOSAL 2 ON PROXY CARD)
The Board of Directors has adopted a resolution to amend Article 4 of the
Company's Restated Certificate of Incorporation to increase the number of
authorized shares of the Company's Common Stock from 12,500,000 shares having a
par value of $0.001 per share to 25,000,000 shares with a par value of $0.001
per share and to submit the proposed amendment to a vote at this Meeting.
Article 4, as proposed to be amended, is set forth in its entirety as Exhibit
"A" to this Proxy Statement, and the summary contained herein is qualified in
its entirety by reference to Exhibit "A".
As of April 15, 1996, [________________] shares of Common Stock were issued
and outstanding and [_________________] shares were reserved for stock option
grants and exercise of stock options, warrants and conversion of certain debt,
leaving only [____________] shares of Common Stock available for issuance.
The Board of Directors of the Company believes that the increase in the
number of authorized shares of Common Stock is in the best interests of the
Company and its stockholders. The additional Common Stock will increase the
number of authorized shares that are available for corporate purposes,
including, for example, the declaration and payment of stock dividends to the
Company's stockholders; stock splits; use in the financing of expansion or
future acquisitions; issuance pursuant to the terms of stock option plans and
other employee benefit plans, including the Company's existing stock option
plan, as well as for use in other possible future transactions of a currently
undetermined nature.
Under Delaware law, the Board of Directors generally may issue authorized
but unissued shares of Common Stock without stockholder approval. The Board of
Directors does not currently intend to seek stockholder approval prior to any
future issuance of additional shares of Common Stock except to the extent
otherwise required by the Company's Restated Certificate of Incorporation, by
law or by the NASDAQ National Market System or any securities exchange on which
the Common Stock may be listed at the time. The authorization of additional
shares of Common Stock will enable the Company, as the need may arise, to take
timely advantage of market conditions and the availability of favorable
opportunities without the delay and expense associated with the holding of a
special meeting of its stockholders or of waiting for the regularly scheduled
Annual Meeting of Stockholders in order to increase the authorized capital. It
is the belief of the Board of Directors that the delay necessary for stockholder
approval of a specific issuance could be to the detriment of the Company and its
stockholders. The Board of Directors does not intend to issue any shares of
Common Stock except on terms which the Board deems to be in the best interest of
the Company and its stockholders. Existing stockholders of the Company will have
no pre-emptive rights to purchase any shares of Common Stock issued in the
future. Depending on the terms thereof, the issuance of the shares of Common
Stock may or may not have a dilutive effect on the Company's then existing
stockholders. Other than the shares of Common Stock which may be issued pursuant
to the Company's existing 1995 Stock Incentive Plan, upon exercise of certain
warrants and conversion of certain debt, the Company
23
<PAGE> 25
presently has no plans, agreements or understandings to issue any of the newly
authorized shares of Common Stock.
The additional shares of Common Stock to be authorized by adoption of the
amendment would have identical rights to the currently outstanding shares of
Common Stock of the Company. Adoption of the proposed amendment and issuance of
the shares of Common Stock would not affect the rights of the holders of the
currently outstanding Common Stock of the Company, except for the effect
incidental to increasing the number of shares of the Company's Common Stock
outstanding.
Although the increase in authorized but unissued shares of Common Stock
could, under certain circumstances, have the effect of deterring attempts to
acquire control of the Company, the Company believes that the increase in the
number of authorized shares is essential to the achievement of corporate
objectives. The proposed amendment is not being presented as, nor is it part of,
a plan to adopt a series of anti-takeover measures. The management of the
Company is not presently aware of any pending or proposed takeover attempt.
PROPOSAL TO RATIFY THE SELECTION
OF ARTHUR ANDERSEN, LLP AS AUDITORS
(PROPOSAL 3 ON PROXY CARD)
The Board of Directors voted to engage Arthur Andersen, LLP as independent
accountants to audit the accounts and financial statements of the Company for
the fiscal year ending December 31, 1996, and directed that such engagement be
submitted to the stockholders of the Company for ratification. In recommending
ratification by the stockholders of such engagement, the Board of Directors is
acting upon the recommendation of the Audit Committee, which has satisfied
itself as to the firm's professional competence and standing. Although
ratification by stockholders of the engagement of Arthur Andersen, LLP is not
required by Delaware corporate law or the Company's Restated Certificate of
Incorporation or Bylaws, management feels a decision of this nature should be
made with the consideration of the Company's stockholders. If stockholder
approval is not received, management will reconsider the engagement.
It is expected that one or more representatives of Arthur Andersen, LLP
will be present at the Meeting and will be given the opportunity to make a
statement if they so desire. It also is expected that the representatives will
be available to respond to appropriate questions from the stockholders.
BOARD OF DIRECTORS' RECOMMENDATIONS; VOTE REQUIRED
The Board of Directors unanimously recommends a vote (i) FOR the election
as director of each of the nominees named in the proxy, (ii) FOR the approval of
the Amendment, (iii) FOR the ratification of the appointment of Arthur Andersen,
LLP as independent auditors.
24
<PAGE> 26
The affirmative vote of the holders of (i) a plurality of the votes of the
outstanding shares of Common Stock present at the Meeting, either in person or
represented by proxy, is required to elect each nominee as a director and (ii) a
majority of the outstanding shares of Common Stock present at the Meeting,
either in person or represented by proxy, is required to approve the Amendment
and to ratify the appointment of Arthur Andersen, LLP.
COST AND METHOD OF PROXY SOLICITATION
The accompanying Proxy is being solicited on behalf of the Board of
Directors of the Company. All expenses for soliciting Proxies, including the
expense of preparing, printing and mailing the form of Proxy and the material
used in the solicitation thereof, will be borne by the Company. In addition to
the use of the mails, Proxies may be solicited by personal interview, telephone
and telegram by directors and regular officers and employees of the Company.
Such persons will receive no additional compensation for such services.
Arrangements may also be made with brokerage houses and other custodians,
nominees and fiduciaries for the forwarding of solicitation material to the
beneficial owners of stock held of record by such persons, and the Company may
reimburse them for reasonable out-of-pocket expenses incurred by them in
connection therewith.
ANNUAL REPORTS AND CONSOLIDATED FINANCIAL STATEMENTS
You are referred to the Company's annual report, including consolidated
financial statements, for the year ended December 31, 1995, enclosed herewith
for your information. The annual report is not incorporated in this Proxy
Statement and is not to be considered part of the soliciting material.
DEADLINE FOR RECEIPT OF STOCKHOLDER
PROPOSALS FOR 1997 ANNUAL MEETING
Any proposals that stockholders of the Company desire to have presented at
the 1997 Annual Meeting of Stockholders must be received by the Company at its
principal executive offices no later than March 10, 1997.
25
<PAGE> 27
UNDERTAKING TO PROVIDE DOCUMENTS
THE COMPANY WILL PROVIDE TO EACH PERSON TO WHOM A COPY OF THIS PROXY
STATEMENT IS DELIVERED, UPON THE WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON AND
THE PAYMENT OF A REASONABLE FEE, A COPY OF ANY EXHIBIT TO THE COMPANY'S ANNUAL
REPORT ON FORM 10-K FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH
31, 1995. WRITTEN REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO THOMAS H.
EHRLICH, URANIUM RESOURCES, INC., 12750 MERIT DRIVE, SUITE 1020, LB 12, DALLAS,
TEXAS 75251, (214) 387-7777.
MISCELLANEOUS
The Board of Directors is not aware of any matter, other than the matters
described above, to be presented for action at the Meeting. However, if any
other business properly comes before the Meeting, the person or persons named in
the enclosed form of proxy will vote the proxy in accordance with his or their
best judgment on such matters.
DALLAS, TEXAS
April 19, 1996
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<PAGE> 28
URANIUM RESOURCES, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDER
TO BE HELD ON DECEMBER 19, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of Uranium Resources, Inc. (the "Company")
hereby constitutes and appoints Paul K. Willmott, George R. Ireland, James B.
Tompkins and Leland O. Erdahl, or any of them acting singly, each with the power
of substitution as attorneys and proxies to vote all of the shares which the
undersigned is entitled to vote at the Annual Meeting of Stockholders of the
Company to be held at the Marriott Bayfront Corpus Christi, 900 North Shoreline
Boulevard, Corpus Christi, Texas 78401 on Wednesday, May 29, 1996, at 9:00 a.m.,
local time, and at any and all adjournments thereof, with the same force and
effect as if the undersigned were personally present, and the undersigned hereby
instructs the above-named Attorneys and Proxies to vote as follows:
1. ELECTION OF DIRECTORS. The following four persons have been nominated to
serve on the Company's Board of Directors: Paul K. Willmott, George R.
Ireland, James B. Tompkins and Leland O. Erdahl.
/ / FOR all nominees listed above / / WITHHOLD AUTHORITY
to vote for all nominees listed
above
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY ONE OR MORE INDIVIDUAL
NOMINEES, WRITE THE NAME OF EACH SUCH NOMINEE IN THE SPACE PROVIDED BELOW.)
2. AMENDMENT. Proposal to approve the amendment to Article 4 of the
Company's Restated Certificate of Incorporation to increase the authorized
common stock from 12,500,000 shares to 25,000,000 shares:
/ / FOR / / AGAINST / / ABSTAIN
3. RATIFICATION OF ARTHUR ANDERSEN. Proposal to ratify the selection of
Arthur Andersen, LLP, independent accountants, as the independent auditors
of the Company for the fiscal year ending December 31, 1996:
/ / FOR / / AGAINST / / ABSTAIN
4. OTHER BUSINESS. In their discretion, the proxies are authorized to vote
upon such other business as may properly come before the Meeting or any
adjournment of adjournments thereof.
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<PAGE> 29
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE NOMINEES SET FORTH IN PROPOSAL 1 AND FOR PROPOSALS 2 and 3.
DATED: , 1996
----------------------------
----------------------------------------
(Signature)
----------------------------------------
(Signature)
NOTE: Please sign exactly as your name or
names appear on this card. Joint owners
should each sign personally. When signing as
attorney, executor, administrator, personal
representative, trustee or guardian, please
give your full title as such. For a
corporation or a partnership, please sign in
the full corporate name by the President or
other authorized officer or the full
partnership name by an authorized person, as
the case may be. (Please mark, sign, date,
and return this proxy in the enclosed
envelope.)
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<PAGE> 30
EXHIBIT A
PROPOSED AMENDMENT TO ARTICLE 4
OF RESTATED CERTIFICATE OF INCORPORATION
ARTICLE 4
The aggregate number of shares which the corporation has authority to issue
is Twenty-Five Million (25,000,000) shares, $.001 par value per share. The
shares are designated as common stock and have identical rights and privileges
in every respect.
The holders of the stock of the corporation shall have no preemptive rights
to subscribe for any securities of the corporation.
29
