SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant X
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Check the Appropriate box
Preliminary Proxy Statement
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Rule 14a-6(e)(2))
X Definitive Proxy Statement
Definitive Additional Materials
Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
GOLDEN CYCLE GOLD CORPORATION
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GOLDEN CYCLE GOLD CORPORATION
2340 Robinson Street
Colorado Springs, Colorado 80904
________________________
GOLDEN CYCLE GOLD CORPORATION
2340 Robinson Street
Colorado Springs, Colorado 80904
________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
June 10, 1998
_________________________
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 Elks Lodge, 367 N. 3rd Street, Victor,
Colorado, June 10, 1998, at 9:00 a.m. (local time) for the following purposes:
1. To elect seven (7) directors of the Corporation to serve until the next
Annual Meeting of Shareholders and until their successors are chosen and
qualified;
2. To appoint independent auditors to audit the books and records of the
Corporation at the close of the current year; and
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 29,
1998
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 30, 1998
<PAGE>
GOLDEN CYCLE GOLD CORPORATION
2340 Robinson Street
Colorado Springs, Colorado 80904
__________________________
PROXY STATEMENT
__________________________
ANNUAL MEETING OF SHAREHOLDERS
June 10, 1998
This proxy statement and the accompanying form of proxy are being
mailed
on or about May 1, 1998 to the holders of record on April 29, 1998 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 (Proposal No. 1) and
for the appointment of the independent auditors (Proposal No. 2). 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 29, 1998 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 1,870,050
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. Election of
directors is by plurality vote, with the seven nominees receiving the highest
vote totals to be elected as directors. Proposal No. 2 requires the
affirmative vote of a majority of the shares present in person or represented
by proxy at the Annual Meeting. Abstentions are counted as present in
determining whether the quorum requirement is satisfied, but they have no
other effect on voting for election of directors. Abstentions are the same
as a vote against on other matters. In instances where brokers are
prohibited from exercising discretionary authority for beneficial owners who
have not returned a proxy ("broker non-votes"), those shares will be counted
for quorum purposes; however, broker non-votes will not be included in the
vote totals for any proposal and therefore will have no effect on the vote
for any proposal (including the election of directors).
The Annual Report of the Corporation for the year ended December 31,
1997 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 April 2, 1998.
Name and Address Number of Shares
P
ercent
of Beneficial Owner Beneficially Owned(1) of Class
__________________ _____________________ _______
American Diversified 361,033
19.
3%
Enterprise, Inc. ("ADE")
c/o Holtzmann, Wise & Shepard
1271 Avenue of the Americas,
45th Floor
New York, New York 10020
MIDAS Fund, Inc. 285,500 (2)
15.3
%
11 Hanover Square
New York, NY 10005
Taki N. Anagnoston, M.D. 95,843 (3) 5.1%
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) Does not include an additional 57,500 shares owned by Bull & Bear Gold
Investers, Ltd., a registered investment company whose investment advisor is
owned by Bull & Bear Group, Inc., which is also the parent company of the
investment advisor of Midas Fund, Inc. The information provided here is
based on a report on Schedule 13G dated January 9, 1997.
(3) The indicated number of shares includes 69,416 shares held by a
revocable retirement trust for the benefit of Dr. Anagnoston and of which
Dr. Anagnoston is trustee, 13,850 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 11,177 shares
held by a partnership, of which Dr. Anagnoston and his wife are general
partners.
As of April 2, 1998, the officers and directors of the Corporation as a
group beneficially owned 242,454 shares of Common Stock or approximately
11.9% of such class. The number of shares of Common Stock owned by officers
and directors of the Corporation includes an aggregate of 170,000 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 seven. 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 1997. 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) April 24, 1998(2) (3)
_________________ ________________________ _________________ __________
Orville E. Anderson Managing Director of Andore
Age 73 (1998) PTY Ltd., an Australian - -
gold mining exploration
company, since 1988;
Director of Mother Lode
Gold Mines Consolidated.
Melvin L. Cooper Private investor; Chairman 90,850 4.8%
Age 70 (1983) of the Board of The Union
Corporation through January
1998 and for more than
five years prior thereto;
The Union Corporation is
engaged in providing accounts
receivable management and
collection services.
Rex H. Hampton Consultant to the Corporation 34,002(5) 1.8%
Age 79 (1980) since 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.)
Joseph M. Keane President of K.D. Engineering
Age 58 (1998) Co., Inc., an engineering -
- -
design company, since 1982.
Frank M. Orrell Chairman of the Board of Mother 33,500(7)
1.8%
Age 65 (1989) Lode 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 27,000(6)
1.4%
Age 74 (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 45,000(8)
2.5%
Age 67 (1980) Officer 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 1,870,050 shares of Common Stock issued and outstanding as of
April 2, 1998. 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 35,000 shares issuable to Mr. Cooper upon exercise of
options. Mr. Cooper has sole power to vote and dispose of such shares.
(5) Includes 30,000 shares issuable to Mr. Hampton upon exercise of options.
(6) Consists solely of shares issuable upon exercise of options.
(7) Includes 30,000 shares issuable to Mr. Orrell upon exercise of options.
(8) Includes 38,000 shares issuable to Mr. Worley 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 and Secretary. 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 51 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. Hampton
(Chairman) and Orrell, 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 twice during 1997.
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
Employee Compensation Committee did not meet in 1997.
Recommendation of the Board of Directors
The Board of Directors recommends a vote FOR election as directors of
the nominees identified above.
Executive Compensation
Name and Annual Long Term
Principal Compensation Compensation All
Other
Position Year Salary Bonus Option Awards
Compensation
Birl W. Worley 1997 $90,00 - 5,000 -
President and 1996 87,500 $22,830 (1) - -
Chief Executive 1995 66,000 - - -
Officer
(1) During 1996, Mr. Worley was paid bonuses totaling $22,830.
________________________
Option Grants During 1997
Potential Realizable
Value at Assumed
Total Exercise Annual Rates of
Options or Stock Price
Granted Base Appreciation for
Options to Employees Price Expiration Option Term (2)
Name Granted(1) Fiscal Year (4/sh) Date 5% 10%
__________ _________ ____________ ______ __________ _______ _______
Birl W.
Worley Jr. 5,000 50% $9.00 6/4/07 $28,300 $71,718
________________________
(1) Option granted under the 1997 Officers' and Directors' Stock Option
Plan. The exercise price of the option was equal to the fair market value
of a share of Common Stock on the date of grant and may be paid in cash or
with shares of the Common Stock owned by the optionee. The option is
exercisable for a period of ten years from the date of grant unless the
optionee resigns, retires or dies, in which case the right to exercise the
option is limited.
(2) The values set forth in this column represent the gain which would be
realized by the optionee assuming (i) the option is exercised on its
expiration date, and (ii) the value of a share of Common Stock has increased
annually by a rate of 5% and 10%, respectively, during the term of the
option. These growth rates are prescribed by the rules of the Securities
and Exchange Commission and are not intended to forecast possible future
appreciation for the Corporation's Common Stock.
The following table sets forth certain information with respect to
stock options exercised by Mr. Worley in the last fiscal year and the value
of options held by him at fiscal year end.
Aggregate Option Exercises in Last Fiscal Year and Fiscal
Year-End Option Values
Number of
Securities Value of
Underlying
Unexercised
Unexercised In-the-Money
Shares Acquired Value Options at Option
s at
Name On Exercise Realized($) FY-End (#) FY-End ($)(1)
Birl W. Worley Jr. - - 38,000 $35,875
__________________
(1) Mr. Worley holds options entitling him to purchase 13,000 shares of the
Corporation's Common Stock at exercise prices which are less than $6.625 per
share (the fair market value of a share of the Corporation's Common Stock on
December 31, 1997). The values set forth above are calculated based on the
aggregate amount of the excess of $6.625 over the relevant exercise prices of
these options.
Compensation of Directors
The compensation payable to directors is established periodically by
the
Board. During 1997, each non-management director was paid a fee in the
amount of $3,000.00 per meeting attended. For 1998, each non- management
member of the Board will be paid a fee of $3,000 for each meeting attended.
Directors are also entitled to reimbursement of expenses incurred in
connection with such attendance. Members of the Audit Committee are entitled
to a fee of $750.00 for each formal committee meeting, not to exceed
$1,500.00 per annum.
Under the terms of the 1997 Officers' and Directors' Stock Option Plan,
on June 4th of each year, each director and executive officer of the
Corporation will automatically receive an option to purchase 5,000 shares of
the Corporation's Common Stock at an exercise price equal to the fair market
value of such stock on such date, until such director or executive officer
has received options to purchase an aggregate of 25,000 share of Common Stock
under such plan.
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 1997, its directors, executive
officers and 10% shareholders complied with the Section 16(a) requirements.
PROPOSAL NO. 2
ELECTION OF INDEPENDENT AUDITORS
On February 4, 1998 the Board of Directors re-appointed KPMG Peat
Marwick ("KPMG"), as independent auditors of the Corporation subject to
shareholders' approval. 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 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 is expected to be present at the Annual Meeting, and
will have the opportunity to make a statement and will respond to appropriate
questions from shareholders present at the meeting.
SHAREHOLDER PROPOSALS FOR 1999 ANNUAL MEETING OF SHAREHOLDERS
A Shareholder proposal to be presented at the 1998 Annual Meeting of
Shareholders must be received at the Corporation's office at 2340 Robinson
Street, Colorado Springs, Colorado 80904 no later than December 31, 1998 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 30, 1998 Secretary
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