GOLDEN CYCLE GOLD CORPORATION
2340 Robinson Street
Colorado Springs, Colorado 80904
________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
May 22, 1996
_________________________
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders ("Annual
Meeting") of GOLDEN CYCLE GOLD CORPORATION (the "Corporation"), a Colorado
corporation, will be held at the Sheraton Colorado Springs Hotel, Colorado
Springs, Colorado, May 22, 1996, at 9:00 a.m. (local time) for the following
purposes:
1. To elect six (6) directors of the Corporation to serve until the next
Annual Meeting of Shareholders and until their successors are chosen and
qualified; and
2. To appoint independent auditors to audit the books and records of the
Corporation at the close of the current year.
3. To transact such other business as may properly come before the
meeting, or any adjournment thereof;
all as more fully set forth in the accompanying Proxy Statement.
The Board of Directors has fixed the close of business on April 10, 1996 as
the record date for the determination of shareholders entitled to notice of and
to vote at the Annual Meeting or any adjournment thereof. The books for
transfer of shares of the Corporation will not be closed.
IF YOU DO NOT EXPECT TO BE PRESENT AT THE MEETING, PLEASE MARK, SIGN, DATE,
AND RETURN THE ENCLOSED PROXY.
By Order of the Board of Directors,
R. Herbert Hampton
Secretary
April 15, 1996
GOLDEN CYCLE GOLD CORPORATION
2340 Robinson Street
Colorado Springs, Colorado 80904
__________________________
PROXY STATEMENT
__________________________
ANNUAL MEETING OF SHAREHOLDERS
May 22, 1996
This proxy statement and the accompanying form of proxy are being mailed on
or about April 15, 1996 to the holders of record on April 10, 1996 of the
Corporation's Common Stock, without par value (the "Common Stock"), in
connection with the solicitation of proxies by the Board of Directors of the
Corporation for use at the Annual Meeting to be held for the purposes set forth
in the foregoing Notice of Annual Meeting of Shareholders, or any adjournment
thereof.
A proxy in the accompanying form, which is properly executed, duly returned
to the Board of Directors and not revoked, will be voted in accordance with
instructions contained in the proxy. If no instructions are given with respect
to any matter specified in the Notice of Annual Meeting to be acted upon at the
Annual Meeting, the proxy will be voted for the election of the nominees for
election to the Board of Directors and for the appointment of the independent
auditors. The Board of Directors is not aware of any other matters intended to
be presented for action at the Annual Meeting. If any other matters are
properly presented for action at the Annual Meeting, or if other circumstances
not now known make any of the nominees for election to the Board of Directors
unable to serve, it is the intention of the persons named in the proxy to vote
on such matters or for such other nominees, as the case may be, in their best
judgment.
A shareholder who has given a proxy has the power to revoke it by giving
written notice of such revocation to the Corporation's Secretary at any time
prior to the exercise of the proxy. A shareholder's presence at the Annual
Meeting, without such written notice of revocation, will not cause the proxy to
be revoked. SHAREHOLDERS WHO DO NOT INTEND TO BE PRESENT AT THE ANNUAL MEETING
ARE URGED TO CONSIDER CAREFULLY THE INFORMATION IN THIS PROXY STATEMENT AND TO
MARK, SIGN, DATE AND RETURN THEIR PROXIES AS SOON AS POSSIBLE. PROMPT RESPONSE
IS HELPFUL.
The cost of solicitation of proxies will be paid by the Corporation. In
addition to solicitation of proxies by use of the mails, certain of the
officers, directors and employees of the Corporation, without extra
remuneration, may solicit proxies personally or by other communication
facilities. The Corporation will reimburse brokers and others who are only
record holders of the Corporations' Common Stock for their reasonable expenses
in obtaining voting instructions from beneficial owners of such stock.
Pursuant to the Corporation's By-Laws, the Board of Directors has fixed the
close of business on April 10, 1996 as the record date for determining the
shareholders entitled to notice of and to vote at the Annual Meeting (the
"Record Date"). As of the Record Date, there were outstanding 1,573,050 shares
of Common Stock. The presence in person or by proxy of the holders of a
majority of the outstanding shares is necessary for a quorum. Each share of
Common Stock entitles the holder thereof to one vote and the affirmative vote
of holders of a majority of the shares present in person or represented by
proxy at the Annual Meeting will be required for the election of Directors. As
abstentions are considered present for the purposes of determining whether the
quorum requirement is satisfied, they will have the legal effect of a vote
against a proposal. Therefore, unless you are opposed to a proposal, you are
urged to vote in favor of such proposal, since an abstention is the equivalent
of a vote against such proposal. When a nominee holds shares for a beneficial
owner but cannot vote on a proposal because the nominee does not have
discretionary voting power and has not received instructions from the
beneficial owner, such shares will be considered present for determining
whether the quorum requirement is satisfied but will not affect the
determination of whether the proposal on which the nominee has no authority to
vote is approved.
The Annual Report of the Corporation for the year ended December 31, 1995
is enclosed herewith.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information as to each person who, to the
knowledge of the Board of Directors, was the beneficial owner of more than five
(5%) of the Corporation's Common Stock outstanding as of March 20, 1996.
Name and Address Number of Shares Percent
of Beneficial Owner Beneficially Owned(1)
of Class
American Diversified 361,033 22.9%
Enterprise, Inc. ("ADE")
c/o Holtzmann, Wise & Shepard
1271 Avenue of the Americas, 45th Floor
New York, New York 10020
Taki N. Anagnoston, M.D. 182,443 (2)
11.6%
700 R. West 6th Street
Gilroy, California 95020
________________________________________________________________________
(1) To the best knowledge of the Corporation, except as indicated below,
each beneficial owner has sole voting and investment power in respect of such
shares.
(2) The indicated number of shares includes 66,418 shares held by a revocable
trust for the benefit of Dr. Anagnoston's wife, of which he and his wife are
trustees, 1,400 shares beneficially owned by Dr. Anagnoston's wife and 40,209
shares held by a partnership, of which Dr. Anagnoston and his wife are general
partners.
At the Record Date, the officers and directors of the Corporation as a
group beneficially owned 280,464 shares of Common Stock or approximately 15.7%
of such class. The number of shares of Common Stock owned by officers and
directors of the Corporation includes an aggregate of 217,000 shares of Common
Stock which the officers and directors have the right to acquire upon the
exercise of options, which shares are treated as outstanding for the purpose of
computing the percentage of outstanding shares of Common Stock owned by
officers and directors as a group.
PROPOSAL NO. 1
ELECTIONS OF DIRECTORS
Pursuant to the By-Laws of the Corporation, the Board of Directors has
fixed the number of Directors at six. The entire Board of Directors is to be
elected at each annual meeting of shareholders, and each Director is elected to
serve until the next succeeding annual meeting and until his successor is
elected and qualifies. The Board of Directors met four times during 1995. The
Audit Committee, the only standing committee of the Board of Directors, met on
March 23, 1995. Each director attended 75% or more of the total meetings of
the Board and any committee of which he is a member.
Management intends to nominate for election at the Annual Meeting the
individuals named in the following table which sets forth certain information
with respect to each nominee. All of the nominees are currently Directors of
the Corporation and together comprise the entire Board of Directors.
Shares of Common Percent
Name of Nominee Stock Beneficially of Class
Age (Year First Owned as of Outstanding
Became Director) Principal Occupation (1) March 15, 1995(2)
(3) .
Melvin L. Cooper Chairman of the Board and President 85,850(4)
5.4%
Age 68 (1983) of The Union Corporation; The Union
Corporation is engaged in providing
accounts receivable management and
collection services.
Rex H. Hampton Consultant to the Corporation since 49,002(5)
3.0%
Age 77 (1980) August 1, 1993; Chairman of the
Board of the Corporation from May
18. 1989 to July 31, 1993 and President
and Chief Executive Officer thereof
from August 16, 1980 to July 31, 1993;
President and Chief Executive Officer of
Golden Cycle Land Corporation, a land
development company and wholly-owned
subsidiary of ATE Enterprises Inc. from
August 16, 1980 to December 31, 1986;
Manager, Golden Cycle Land Division,
ATE Enterprises Liquidating Trust
January 1, 1987 to March 31, 1991;
Brigadier General U.S. Army (Ret.)
John A. Love Retired; Of Counsel to Davis, Graham 30,000(6)
1.9%
Age 79 (1983) & Stubbs from 1985 through
December 31, 1993; Chief Executive
Officer of Ideal Basic Industries, a cement
manufacturer now known as Holnam, Inc.,
from January 1974 to November 1985.
Frank M. Orrell Chairman of the Board of Mother Lode 28,500(7)
1.8%
Age 62 (1989) Gold Mines Consolidated, a gold
mining exploration and development
company, since 1978 and Chief Executive
Officer thereof since 1985; registered
representative with Orrell and
Company, Inc., a stock brokerage firm,
since 1984.
Alan P. Ploesser Chairman of the Board of the 22,000(6)
1.4%
Age 72 (1989) Corporation since August 1, 1993;
Vice President-Operations of Philex
Mining Corporation, a copper and
gold mining corporation, from January
1985 until his retirement in January 1989;
Vice President-Operations of North
Davao Mining Corporation, a copper
and gold mining corporation, from
January 1981 to December 1984.
Birl W. Worley, Jr. President and Chief Executive Officer 60,000(6)
3.7%
Age 65 (1980) of the Corporation since August 1,
1993; Executive Vice President and
Director of Stan West Mining Corporation
from June 1985 through March 1986;
Mineral Resources Consultant to the
Corporation and to Benguet Corporation
prior to August 1, 1993.
________________________________________________________________________
(1) The occupation listed constitutes the principal occupation or employment
of the referenced individual for at least the past five (5) years, except as
otherwise indicated.
(2) Except as noted below, each beneficial owner has sole voting power and
sole investment power.
(3) Based on 1,573,050 shares of Common Stock issued and outstanding as of
April 10, 1996. Shares issuable upon exercise of options issued to each
Director are treated as outstanding for the purpose of computing the percentage
ownership of such Director.
(4) Includes 30,900 outstanding shares beneficially owned by Mr. Cooper and
registered in his name; 24,950 outstanding shares which are held in a trust of
which Mr. Cooper is the trustee and which is revocable by him at his will and
30,000 shares issuable to Mr. Cooper upon exercise of options. Mr. Cooper has
sole power to vote and dispose of such shares.
(5) Includes 45,000 shares issuable to Mr. Hampton upon exercise of options.
(6) Consists solely of shares issuable upon exercise of options.
(7) Includes 25,000 shares issuable to Mr. Orrell upon exercise of options.
Information Concerning Executive Officers
The Corporation's executive officers are Alan P. Ploesser, Chairman of the
Board, Birl W. Worley, Jr., President and Chief Executive Officer, and R.
Herbert Hampton, Vice President, Finance. Mr. Hampton has served as Vice
President, Finance since August 1, 1993 and has been an employee of the
Corporation since October 1, 1992. Mr. Hampton served as a Lieutenant Colonel,
U.S. Army, for more than five years prior to joining the Corporation. Mr.
Hampton is 49 and is the son of Rex H. Hampton, a director and former officer
of the Corporation.
Committee of the Board of Directors
Pursuant to Paragraph 16 of the Corporation's By-Laws, the Board of
Directors has created an Audit Committee, comprised of Messrs. Love (Chairman),
Orrell and Hampton, which is empowered to supervise the auditing of the
accounts of the Corporation. Its functions include reviewing the scope of the
audit and auditing fees, meeting with the auditors and the officers of the
Corporation to assure the adequacy of internal controls and reporting,
reviewing the financial statements of the Corporation and performing other
duties and functions deemed appropriate by the Board. The Audit Committee met
on March 23, 1995.
In 1994, the Board created an Employee Compensation Committee comprised of
Messrs. Ploesser, Cooper and Hampton, which is empowered to supervise and
approve the terms of employment of all officers and employees of the
Corporation, other than the President, and to recommend the terms of employment
of the President to the Board of Directors for approval. The Compensation
Committee did not meet in 1995.
Executive Compensation
Summary Compensation Table
The following table sets forth information on the compensation earned by
Mr. Worley, the Chief Executive Officer, and by Mr. Hampton, who served as
Chief Executive Officer through July 31, 1993. The Chief Executive Officer is
the highest paid officer of the Corporation:
Name and Annual
Long Term
Principal Compensation Compensation
All Other
Position Year Salary Option Awards
Compensation
Birl W. Worley 1995 $66,000 -
-
President and 1994 80,250 5,000
-
Chief Executive 1993 31,250 (1) 5,000
$21,000
Officer
Rex H. Hampton 1993 $26,250 (2) 5,000
$10,000
Chairman of the -
Board, President
and Chief
Executive Officer
________________________
(1) Represents amounts paid to Mr. Worley after August 1, 1993, when he was
elected President and Chief Executive Officer. Prior thereto, he served as a
consultant to the Corporation and received an aggregate of $21,000 in
consulting fees in 1993, which amount is set forth in the "All Other
Compensation" column.
(2) Represents amounts paid to Mr. Hampton for his services as Chairman of the
Board, President and Chief Executive Officer from January 1, 1993 through July
31, 1993. Mr. Hampton also received an aggregate of $10,000 for his services
as a consultant to the Corporation from August 1, 1993, through December 31,
1993, which amount is set forth in the "All Other Compensation" column.
The following table sets forth certain information with respect to stock
options exercised by Mr. Worley and Mr. Hampton in the last fiscal year and the
value of options held by each of them at fiscal year end. All options are
fully exercisable; no SAR's have been granted by the Corporation. No stock
options were granted to Mr. Worley or Mr. Hampton in the last fiscal year.
Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Shares Acquired Value Options at Options at
Name On Exercise Realized ($) FY-End (#) FY-End ($) (1)
Birl W. Worley -0- -0- 60,000 $148,125
Rex H. Hampton -0- -0- 45,000 $ 73,125
________________________
(1) Mr. Worley and Mr. Hampton hold options entitling them to purchase 45,000
shares and 30,000 shares, respectively, of the Corporation's Common Stock at
exercise prices which are less than $8.375 per share (the fair market value of
a share of the Corporation's Common Stock on December 29, 1995). The values
set forth above are calculated based on the aggregate amount of the excess of
$8.375 over the relevant exercise prices of these options.
Compensation of Directors
The compensation payable to directors is established periodically by the
Board and for the past four years has consisted of a fee in the amount of
$2,000.00 per meeting payable to each member of the Board, such fees not to
exceed $8,000.00 in the aggregate per director in any one year. Directors were
also entitled to reimbursement of expenses incurred in connection with such
attendance. For the past four years, members of the Audit Committee were
entitled to a fee of $300.00 for each formal committee meeting, not to exceed
$600.00 per annum.
Mr. Hampton has served as a consultant to the Corporation since August 31,
1993. Mr. Hampton currently serves as a consultant pursuant to an agreement
which provides that he will devote such time and attention to the Corporation's
business as the Corporation reasonably requests and will be compensated at the
rate of $125 per hour, plus reimbursement of expenses. The agreement expires
on May 31, 1996. In 1995, Mr. Hampton did not receive any consulting fees from
the Corporation.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Pursuant to Section 16(a) of the Securities Exchange Act of 1934 and the
rules issued thereunder, the Corporation's directors, executive officers and
10% shareholders are required to file with the Securities and Exchange
Commission and the Pacific Stock Exchange reports of ownership and changes in
ownership of the Corporation's Common Stock. Copies of such forms are required
to be furnished to the Corporation. Based solely on its review of the copies
of such reports, or written representations that no reports were required, the
Corporation believes that during 1995, its directors, executive officers and
10% shareholders complied with the Section 16(a) requirements, except that the
Corporation has received a Form 5 filed on behalf of Dr. Anagnoston, a 10%
shareholder of the Corporation, which reports that 85 transactions occurred
during 1995 with respect to which no reports on Form 4 were filed. From the
information available, the Corporation cannot determine which, if any, of such
transactions were reportable or if an exemption from the reporting requirements
for any of them was available to the reporting person.
PROPOSAL NO. 2
ELECTION OF INDEPENDENT AUDITORS
On November 30, 1995 the Board of Directors selected KPMG Peat Marwick
("KPMG"), as independent auditors of the Corporation. It is intended that, in
the absence of a contrary direction, votes will be cast pursuant to the
accompanying proxies for the appointment of KPMG Peat Marwick LLP ("KPMG") as
independent auditors to audit the books and records of the Corporation at the
close of the current calendar year. Neither KPMG nor any of its partners has
any financial interest in or any connection (other than as independent
certified public accountants) with the Corporation. A representative of KPMG
Peat Marwick is expected to be present at the Annual Meeting, will have the
opportunity to make a statement and will respond to appropriate questions.
On January 31, 1994, the Board of Directors informed Deloitte & Touche
("D&T"), the Corporation's independent accountants for the years ended December
31, 1991 and 1992, of its decision to appoint another auditing firm. There were
no disagreements with D&T on any other matters of accounting principles or
practices, financial statement disclosure or auditing scope or procedure during
the Corporation's fiscal year ended December 31, 1992 and the subsequent
interim period preceding the change of the Corporation's auditors which, if
such disagreements were not resolved to the satisfaction of D&T, would have
caused it to make reference to the subject matter of the disagreement in
connection with its reports. The Corporation has been advised by the Joint
Venture that D&T will continue as the independent accountants and auditors for
the Joint Venture, for Pikes Peak Mining Company, the managing partner of the
Joint Venture, and for Independence Mining Company, the parent of Pikes Peak
Mining Company.
D&T's audit report on the financial statements of the Corporation for the
year ended December 31, 1992 included an explanatory paragraph which stated
that substantial doubt existed regarding the Joint Venture's ability to
continue as a going concern because the Joint Venture did not have financing in
place for its operating and development needs at the time of issuance of such
report (March 24, 1993). There was no qualification, modification or
explanatory paragraph included in D&T's March 10, 1992 report on the
Corporation's financial statements for the year ended December 31, 1991.
SHAREHOLDER PROPOSALS FOR 1997 ANNUAL MEETING OF SHAREHOLDERS
A Shareholder proposal to be presented at the 1997 Annual Meeting of
Shareholders must be received at the Corporation's office at 2340 Robinson
Street, Colorado Springs, Colorado 80904 no later than December 16, 1996 in
order to be included in the proxy materials for that meeting.
By Order of the Board of Directors
Colorado Springs, Colorado R. Herbert Hampton
April 15, 1996 Secretary
