<PAGE> 1
SCHEDULE 14A INFORMATION
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:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2)).
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
CANYON RESOURCES CORPORATION
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(Name of Registrant as Specified In Its Charter)
---------------------------------
(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] 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 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
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<PAGE> 2
5) Total Fee paid:
------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by 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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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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2
<PAGE> 3
CANYON RESOURCES CORPORATION
14142 Denver West Parkway, Suite 250
Golden, Colorado 80401
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 6, 1997
To Our Shareholders:
The Annual Meeting of Shareholders ("Meeting") of Canyon Resources
Corporation (the "Company"), a Delaware corporation, will be held at 3:00 p.m.
(Mountain daylight time) on Friday, June 6, 1997, at the Denver West Marriott
Hotel, 1717 Denver West Blvd., Golden, Colorado, for the following purposes:
1. To elect three directors of the Company, each for a three-year
term.
2. To ratify the appointment of Coopers & Lybrand L.L.P. as the
Company's independent public accountants for 1997.
3. To consider and vote upon such other matters as may properly
come before the Meeting or any adjournment thereof.
Shareholders of record at the close of business on April 23, 1997, are entitled
to notice of and to vote at the Meeting.
The Board of Directors of the Company extends a cordial invitation to
all shareholders to attend the Meeting in person. Whether or not you plan to
attend the Meeting, please fill in, date, sign, and mail the enclosed proxy in
the return envelope as promptly as possible. Your proxy may be revoked by you
at any time prior to the Meeting. The prompt return of your completed proxy
will assist the Company in obtaining a quorum of shareholders for the Meeting,
but will not affect your ability to change your vote by subsequent proxy or by
attending the Meeting and voting in person. If you are unable to attend, your
written proxy will assure that your vote is counted.
By Order of the Board of Directors
Cheryl A. Martin
Corporate Secretary
Golden, Colorado
May 2, 1997
- - --------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN
Please indicate your voting instructions on the enclosed proxy card,
date and sign it, and return it in the envelope provided, which is addressed for
your convenience. No postage is required if mailed in the United States.
PLEASE MAIL YOUR PROXY PROMPTLY
- - --------------------------------------------------------------------------------
<PAGE> 4
CANYON RESOURCES CORPORATION
14142 Denver West Parkway, Suite 250
Golden, Colorado 80401
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
JUNE 6, 1997
This Proxy Statement is furnished to the shareholders of Canyon
Resources Corporation (the "Company"), a Delaware corporation, in connection
with the solicitation by and on behalf of the Company's Board of Directors (the
"Board") of proxies to be voted at the Annual Meeting of Shareholders
("Meeting") of the Company. The Meeting will be held on June 6, 1997, at 3:00
p.m. (Mountain daylight time) at the Denver West Marriott Hotel, 1717 Denver
West Blvd., Golden, Colorado, for the purposes set forth in the accompanying
Notice of Annual Meeting of Shareholders. Officers and regular employees of
the Company, without additional compensation, may solicit proxies personally or
by telephone if deemed necessary. Solicitation expenses will be paid by the
Company.
All proxies that are properly executed and received prior to the
Meeting will be voted at the Meeting. If a shareholder specifies how the proxy
is to be voted on any business to come before the Meeting, it will be voted in
accordance with such specification. If a shareholder does not specify how to
vote the proxy, it will be voted FOR the election of the three nominees for
director named in this Proxy Statement, FOR the ratification of the appointment
of Coopers & Lybrand L.L.P. as the Company's auditors for 1997, and in the
proxy holders' discretion on such other business as may properly come before
the Meeting. Any proxy may be revoked by a shareholder at any time before it
is actually voted at the Meeting by delivering written notification to the
Secretary of the Company, by delivering another valid proxy bearing a later
date, or by attending the Meeting and voting in person.
This Proxy Statement and the accompanying proxy are first being sent
to shareholders on or about May 2, 1997. The Company will bear the cost of
preparing, assembling, and mailing the notice, Proxy Statement, and form of
proxy for the Meeting.
VOTING SECURITIES
All voting rights are vested exclusively in the holders of the
Company's common stock, $.01 par value (the "Common Stock"), with each share
entitled to one vote. Only shareholders of record at the close of business on
April 23, 1997, are entitled to notice of and to vote at the Meeting or any
adjournment. At the close of business on April 23, 1997, there were 37,605,488
shares of Common Stock issued and outstanding. A minimum of one-third of the
shares of Common Stock issued and outstanding must be represented at the
Meeting, in person or by proxy, in order to constitute a quorum. Cumulative
voting is not allowed for any purpose. The affirmative vote of the holders of
the majority of the shares of Common Stock represented at the Meeting in person
or by proxy will be necessary to elect the slate of directors nominated by the
Company, and to ratify the appointment of the auditors.
An abstention or withholding authority to vote will be counted as
present for determining whether the quorum requirement is satisfied. With
respect to the vote on any particular proposal, abstentions will be treated as
shares present and entitled to vote, and for purposes of determining the
outcome of the vote on any such proposal, shall have the same effect as a vote
against the proposal. A broker "non-vote" occurs when a nominee holding shares
for a beneficial holder does not have discretionary voting power and does not
receive voting instructions from the beneficial owner. Broker "non-votes" on a
particular proposal will not be treated as shares present and entitled to vote
on the proposal.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information, as of April 23, 1997, with
respect to beneficial ownership of the Common Stock by each person known by the
Company to be the beneficial owner of more than 5% of its outstanding Common
Stock, by each director and nominee for director of the Company, by each
executive officer named in the table titled "Summary Compensation Table," which
appears elsewhere in this Proxy Statement, and by all officers and directors of
the Company as a group. Unless otherwise noted, each shareholder has sole
investment and voting power over the shares owned.
<TABLE>
<CAPTION>
- - ---------------------------------------------------------------------------------------------------------
NAME AND ADDRESS TYPE OF NUMBER OF PERCENT OF
OF BENEFICIAL OWNER OWNERSHIP SHARES CLASS
- - ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Richard H. De Voto Record and 818,698 (1) 2.2%
14142 Denver West Pkwy., Suite 250 Beneficial
Golden, CO 80401
Gary C. Huber Record and 698,561 (2) 1.9%
14142 Denver West Pkwy., Suite 250 Beneficial
Golden, CO 80401
William W. Walker Record and 313,137 (3) *
14142 Denver West Pkwy., Suite 250 Beneficial
Golden, CO 80401
James E. Askew Record and 0 *
840 Gaylord Street Beneficial
Denver, CO 80206
Leland O. Erdahl Record and 84,289 (4) *
8046 Mackenzie Court Beneficial
Las Vegas, NV 89129
George W. Holbrook, Jr. Record and 1,001,775 (5) 2.7%
P.O. Box 761 Beneficial
Southport, CT 06490-0761
Frank M. Monninger Record and 30,000 (6) *
150 Quail's Roost Road Beneficial
Sequim, WA 98382
William C. Parks Record and 125,783 (7) *
South 5919 Yale Road Beneficial
Spokane, WA 99223
Christopher M. T. Thompson Record and 50,000 (8) *
475 Seventeenth Street, Suite 750 Beneficial
Denver, CO 80202-4017
Robert L. Zerga Record and 0 *
P.O. Box 281327 Beneficial
Lamoille, NV 89828
John R. Danio Record and 108,301 (9) *
14142 Denver West Pkwy., Suite 250 Beneficial
Golden, CO 80401
All Officers & Directors as a Group Record and 3,293,044 8.5%
(12 persons) Beneficial
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</TABLE>
* Less than 1%
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1 This number includes (i) 9,719 shares owned of record; (ii) 560,628 shares
held by the Richard H. De Voto Trust No. 1; (iii) 351 shares held as
Co-Trustee of Trust for his mother; (iv) an option to purchase 48,000 shares
at an exercise price of $3.00 per share; (v) an option to purchase 100,000
shares at an exercise price of $1.63 per share; (vi) an option to purchase
75,000 shares at an exercise price of $3.69 per share and (vii) an option to
purchase 25,000 shares at an exercise price of $2.00 per share.
2 This number includes (i) 474,561 shares owned of record; (ii) two trusts of
22,000 shares each held by Gwen D. Huber, as Trustee for two minor
children; (iii) an option to purchase 50,000 shares at an exercise price of
$3.00 per share; (iv) an option to purchase 60,000 shares at an exercise
price of $1.63 per share; (v) an option to purchase 50,000 shares at an
exercise price of $3.69 per share and (vi) an option to purchase 20,000
shares at an exercise price of $2.00 per share.
3 This number includes (i) 198,137 shares owned of record; (ii) an option to
purchase 30,000 shares at an exercise price of $3.00 per share; (iii) an
option to purchase 35,000 shares at an exercise price of $3.69 per share;
(iv) an option to purchase 30,000 shares at an exercise price of $1.63 per
share and (v) an option to purchase 20,000 shares at an exercise price of
$2.00 per share.
4 This number includes (i) 54,289 shares owned of record; (ii) an option to
purchase 10,000 shares at an exercise price of $2.19 per share; (iii) an
option to purchase 10,000 shares at an exercise price of $2.06 per share;
and (iv) an option to purchase 10,000 shares at an exercise price of $3.31
per share.
5 This number includes (i) 5,000 shares owned of record; (ii) 694,946 shares
owned of record by Bradley Securities Corporation of which Mr. Holbrook is
the President and major shareholder; (iii) 171,829 shares owned by two
partnerships in which Mr. Holbrook is a controlling partner; (iv) 80,000
shares owned of record by Bradley Resources Company, of which Mr. Holbrook
is the Managing partner; (v) an option to purchase 30,000 shares at an
exercise price of $2.50 per share; (vi) an option to purchase 10,000 shares
at an exercise price of $2.06 per share; and (vii) an option to purchase
10,000 shares at an exercise price of $3.31 per share.
6 This number includes (i) an option to purchase 10,000 shares at an exercise
price of $2.19 per share; (ii) an option to purchase 10,000 shares at an
exercise price of $2.06 per share; and (iii) an option to purchase 10,000
shares at an exercise price of $3.31 per share.
7 This number includes (i) 75,783 shares owned of record; (ii) an option to
purchase 30,000 shares at an exercise price of $3.19 per share; (iii) an
option to purchase 10,000 shares at an exercise price of $2.06 per share;
and (iv) an option to purchase 10,000 shares at an exercise price at $3.31
per share.
8 This number includes (i) an option to purchase 30,000 shares at an exercise
price of $3.19 per share; (ii) an option to purchase 10,000 shares at an
exercise price of $2.06 per share; and (iii) an option to purchase 10,000
shares at an exercise price of $3.31 per share.
9 This number includes (i) 8,301 shares owned of record; (ii) an option to
purchase 20,000 shares at an exercise price of $3.00 per share; (iii) an
option to purchase 25,000 shares at an exercise price of $1.63 per share;
(iv) an option to purchase 35,000 shares at an exercise price of $3.69 per
share and (v) an option to purchase 20,000 shares at an exercise price of
$2.00 per share.
ELECTION OF DIRECTORS
The Company's Bylaws provide that the number of members of the Board
shall be nine. The Board presently consists of nine members, divided into
three classes. Cumulative voting in the election of directors is not
permitted. Directors are elected by majority vote of the shares represented at
the Meeting.
Two Directors, Gary C. Huber and Leland O. Erdahl, have been nominated
for re-election at the Meeting. One Director, James E. Askew, has been
nominated for election for the first time, replacing Frank
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<PAGE> 7
Monninger whose term expires in 1997. UNLESS AUTHORITY IS WITHHELD, IT IS
INTENDED THAT THE SHARES REPRESENTED BY THE PROXIES WILL BE VOTED FOR THESE
THREE DIRECTORS, EACH TO SERVE FOR A THREE-YEAR TERM OR UNTIL HIS RESPECTIVE
SUCCESSOR IS ELECTED AND QUALIFIED.
OFFICERS AND DIRECTORS
The following table lists the names, ages, and positions of the
executive officers and directors of the Company as of March 31, 1997.
Directors are divided into classes, each of which is elected to serve for three
years, with one class being elected each year. All officers have been
appointed to serve until their successors are elected and qualified. Additional
information regarding the business experience, length of time served in each
capacity, and other matters relevant to each individual is set forth below the
table.
<TABLE>
<CAPTION>
DIRECTORS' TERMS
NAME AGE POSITION EXPIRE
- - --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Richard H. De Voto 62 President, Director and 1998
Chairman of the Board
Gary C. Huber 45 Vice President-Finance 1997
and Director
William W. Walker 58 Vice President-Exploration 1999
and Director
Leland O. Erdahl 68 Director 1997
George W. Holbrook, Jr. 65 Director 1998
Frank M. Monninger 72 Director 1997
William C. Parks 55 Director 1999
Christopher M.T. Thompson 49 Director 1999
Robert L. Zerga 56 Director (1) 1998
John R. Danio 47 Vice President-Operations
Richard T. Phillips 42 Treasurer
Cheryl A. Martin 44 Corporate Secretary
</TABLE>
1 Appointed to the Board by the current Board of Directors at a Director's
Meeting held on March 20, 1997, to fill the remaining term of Paul A. Bailly
who retired on December 31, 1996.
James E. Askew is nominated for election as a Director for the first
time at this meeting. He will be replacing Frank M. Monninger, who is
retiring, and whose term as Director expires in 1997. Mr. Askew's biography
appears in the biography section.
4
<PAGE> 8
DR. RICHARD H. DE VOTO was a founder of the Company and has been a
Director of the Company since its formation in 1979. Dr. De Voto served as
President of the Company from September 1979 to April 1985, and became
President again in April 1987. He is President of CR Montana Corporation, CR
Briggs Corporation, and CR International Corporation, each wholly owned
subsidiaries of the Company. Dr. De Voto is Professor Emeritus of Geology at
the Colorado School of Mines, where he taught from 1966 to 1987. Dr. De Voto
was a founder of the private Australian mining firm, Canyon Resources
Proprietary Ltd., which later became Delta Gold N.L., a publicly listed company
of which he was a Director from 1983 to 1989.
GARY C. HUBER was a founder of the Company and served as Secretary of
the Company from inception through June 1986, as Treasurer from 1980 through
December 1991, as Vice President from April 1985 to April 1987, and as Vice
President-Finance since April 1987. He was elected as a Director of the
Company in June 1985 and serves as President of CR Minerals Corporation, a
wholly owned subsidiary of the Company. Dr. Huber has been responsible for the
financial operations of the Company since its inception and currently directs
the Company's industrial minerals program.
WILLIAM W. WALKER was a founder of the Company and served as its Vice
President from 1979 to April 1985, and its President from April 1985 to April
1987. In April 1987, Mr. Walker became the Company's Vice
President-Exploration. He was elected as a Director of the Company in June
1985. Mr. Walker is President of Canyon Resources Africa Ltd., CR Brazil
Corporation and Canyon de Panama, S.A., all of which are subsidiaries of the
Company. Mr. Walker directs the Company's exploration programs and is
responsible for joint venture activities and property farmouts.
LELAND O. ERDAHL has been a Director of the Company since February
1986. He served as President and CEO of Stolar, Inc., a privately held service
and communication supply company for the mining industry, from July 1987 to
September 1991, and as President and CEO of Albuquerque Uranium Corporation, a
privately held company engaged in the production and sale of uranium from
November 1987 to January 1992. He is currently the Vice President and Chief
Financial Officer of Amax Gold Inc. Mr. Erdahl serves as a Director of Hecla
Mining Company, Uranium Resources, Inc., and Original Sixteen to One Mine,
Inc., all publicly held mineral resources companies, and as a trustee of a
group of John Hancock Mutual Funds, all publicly held investment entities. Mr.
Erdahl is also a Director of Santa Fe Ingredients Company of California, Inc.
and Santa Fe Ingredients Company, Inc., private food processing companies.
GEORGE W. HOLBROOK, JR. has been a Director of the Company since
1981. Since 1984, he has been the Managing Partner of Bradley Resources
Company, a private investment company. He is a Director of the Merrill Lynch
Institutional Fund and other associated funds, Thoratec Laboratories and
several private companies.
FRANK M. MONNINGER has been a Director of the Company since September
1990. He is currently a consultant to the mining industry. From 1984 to 1988,
he was Executive Vice President of Operations for Coeur D'Alene Mines
Corporation, a publicly held mining company. Mr. Monninger has held positions
of Vice President of Development and Operations for Occidental Minerals
Corporation, Vice President and General Manager for Inspiration Consolidated
Copper Company, Manager of Mine and Plant Operations for Bechtel Corporation,
Vice President of Anaconda Company, and President of the Montana Mining
Division of Anaconda Company. He currently serves as Chairman of the Board of
ISL Ventures, a Nevada corporation involved in in-situ leaching and precious
metals lixiviants.
WILLIAM C. PARKS has been a Director of the Company since February
1986. He is currently Executive Vice President and General Manager of R.A.
Pearson Company, a privately held company engaged in the design and manufacture
of packaging machinery. From August 1989 through December 1991, he was the
President of United Management Company, a company involved in providing
management consulting services to the mining, manufacturing, and transportation
industries.
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<PAGE> 9
CHRISTOPHER M.T. THOMPSON has been a Director of the Company since
September 1990. He is President of Castle Group, Inc., the successor to
Fulcrum Management, Inc. From 1984 through 1992, he served as Executive Vice
President and Chief Financial Officer for Fulcrum Management, Inc., the
managing company for two private U.S. venture capital funds, VenturesTrident
L.P. and VenturesTrident II, L.P., which invest in precious metals companies
and projects. He is also a Director of EMGF Management Company which manages
The Emerging Markets Gold Fund. Castle Group is, by subcontract, manager of
the Emerging Markets Gold Fund. He currently serves as a Director of Golden
Queen Mining Company, Ltd., Minven, Inc., Olympic Mining Corporation, Silver
Standard Resources Inc., Lonestar Explorations N.L., and Pacific Rim Mining
Corp.
ROBERT L. ZERGA has been a Director of the Company since March 1997,
replacing Paul A. Bailly who retired. From 1990 to 1995, he was Chief
Executive Officer of Independence Mining Company and Vice President of Minorco
(USA), as well as Chairman of the Board of Independence Mining Company and
Director of Minorco (USA). From 1985 to 1989, he was Executive Vice President
& General Manager of Newmont Gold Company and also a Director of Newmont Gold
Company. Mr. Zerga currently serves as a Director of Getchell Gold
Corporation.
JAMES E. ASKEW is nominated for election as a Director for the first
time at this meeting. He is currently the President of International Mining &
Finance Corporation, a venture capital and private investment group targeting
gold and base-metal opportunities internationally. From 1987, until it was
merged with Ashanti Goldfields Limited in October 1996, Mr. Askew was President
and Managing Director of Golden Shamrock Mines, Ltd. He currently serves as
Chairman of the Board of Opawica Explorations, Inc., and he serves as a
Director of Ausdrill Ltd. and Nelson Gold Corporation Ltd.
JOHN R. DANIO was appointed Vice President-Operations of the Company
in September 1987, and has overall responsibility for the Company's mine
development and production operations. Prior to joining the Company, he
operated several open-pit gold mines and heap-leaching operations as Project
Engineer and Mine Manager. Mr. Danio is a registered professional engineer in
the States of Colorado and Nevada.
RICHARD T. PHILLIPS was appointed Treasurer of the Company in
December 1991. Initially joining the Company as Controller in July 1991, he is
responsible for the Company's cash management, risk management, and financial
reporting functions. From 1988 to 1991, Mr. Phillips served as Controller for
Western Gold Exploration and Mining Company, a gold mining partnership between
Minorco and Inspiration Resources Corporation.
CHERYL A. MARTIN was appointed Corporate Secretary in December 1996.
Initially joining the Company as Director, Investor Relations in May 1994, she
continues in that capacity and is responsible for interaction with the
investment community and managing shareholder activities. From 1991 to 1994,
Ms. Martin served as Manager of Investor Relations for Sharon Resources, Ltd.,
a publicly traded oil and gas company, and from 1989 to 1991 she was Director,
Investor Relations for Sindor Resources, Inc., a development-stage copper
mining company. She currently serves on the Board of Directors of the Denver
Gold Group, a not-for-profit organization which sponsors institutional mining
investment programs.
BOARD MEETINGS AND COMMITTEES
During the Company's 1996 fiscal year, the Board met five times. All
of the Directors were present for 75% or more of the meetings of the Board and
committees upon which they served that were held during their individual
incumbencies except for Paul A. Bailly who attended three out of five meetings.
The Company's Audit Committee ("Audit Committee") is comprised of
Messrs. Erdahl, Parks, and Thompson, all independent Directors of the Company.
The Audit Committee recommends the selection and re-appointment of the
Company's independent certified public accountants to the Board and reviews the
proposed scope, content, and results of the audit performed by the accountants,
and any reports and recommendations made by them. The Audit Committee held two
meetings in 1996.
6
<PAGE> 10
The Company's Compensation Committee ("Compensation Committee") is
comprised of Messrs. Erdahl, Parks, and Thompson, with Dr. De Voto as a
non-voting member. The Compensation Committee reviews and makes
recommendations to the Board concerning the salaries paid to the Company's
officers. The Compensation Committee held two meetings in 1996.
The Company has no nominating or executive committee.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
TRANSACTION WITH A DIRECTOR
Keene Valley Minerals, a limited partnership, was a participant in the
Canyon-Minex II Joint Venture. Mr. Holbrook is the sole general partner of a
partnership which is a partner in Keene Valley Minerals. The participation of
his partnership in this joint venture is on the same terms and conditions as
were available to unaffiliated participants. Keene Valley Minerals owned 22.5%
of the Canyon-Minex II Joint Venture and had invested $750,000 in the venture
as of May 12, 1993. Effective May 12, 1993, the Company acquired the other
parties' 38.25% interest in the venture by issuing 150,000 shares of common
stock and warrants to purchase 75,000 shares of common stock at an exercise
price of $3.00 per share, exercisable until May 11, 1996. The fair market
value of the Company's common stock on the acquisition date was $2.38 per
share. During 1996, warrants to purchase 63,900 shares of common stock were
exercised and 11,100 warrants expired unexercised.
EXECUTIVE COMPENSATION
In 1992, the United States Securities and Exchange Commission amended
the proxy disclosure requirements covering compensation of executive officers.
These requirements call for a new format that includes a report by the
Compensation Committee on the Company's policies for making executive
compensation decisions, including the factors and criteria on which the chief
executive officer's pay is based; a series of tables covering annual and
long-term compensation; and a performance graph comparing the Company's
five-year total shareholder return with a performance indicator of the overall
stock market and another selected index.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN
COMPENSATION DECISIONS
Messrs. Leland O. Erdahl, William C. Parks, Christopher M. T. Thompson
and Richard H. De Voto serve as the Compensation Committee for the Board. Dr.
De Voto, the President of the Company, is a non-voting member of the
Compensation Committee. Other than Dr. De Voto, no committee member is an
officer or employee of the Company or any of its subsidiaries.
REPORT OF THE COMPENSATION COMMITTEE ON
EXECUTIVE COMPENSATION
OVERALL POLICY
Salary compensation of the Company's executive officers is determined
by the Board. The Compensation Committee is responsible for considering
specific information and making recommendations to the full Board. The
Compensation Committee is comprised of three outside directors appointed
annually by the Board. The Compensation Committee's consideration of and
recommendations regarding executive compensation are guided by a number of
factors described below. The objectives of the Company's total executive
compensation package
7
<PAGE> 11
are to attract and retain the best possible executive talent, to provide an
economic framework to motivate the Company's executives to achieve goals
consistent with the Company's business strategy, to provide an identity between
executive and shareholder interests through stock option plans, and to provide
a compensation package that recognizes an executive's individual results and
contributions in addition to the Company's overall business results.
In making recommendations concerning executive compensation, the
Committee reviews individual executive compensation, corporate performance,
stock price appreciation, and total return to shareholders for the Company as
well as a peer group of public North American gold-mining companies. The peer
group of companies used for compensation analysis includes many of the selected
peer group identified in the Performance Graph set forth below.
The Compensation Committee recommends to the Board compensation levels
for the President (Chief Executive Officer) and other officers of the Company.
In reviewing individual performance of executives whose compensation is
detailed in this Proxy Statement, the Compensation Committee takes into account
the views of Richard H. De Voto, the Company's Chief Executive Officer and
non-voting member of the Committee.
SALARIES
The key elements of the Company's executive compensation consist of
base salary, an incentive compensation plan, and stock options. The Board acts
on salary levels of officers and on the incentive compensation plan, and the
Compensation Committee makes recommendations on employee stock option awards
for action by the full Board of Directors.
Salaries for executive officers are determined by evaluating the
responsibilities of the position held and the experience of the individual, and
by reference to the competitive marketplace for executive talent, including a
comparison of salaries for comparable positions at other similar mining
companies.
The salary levels of the Chief Executive Officer and other officers of
the Company for the following calendar year are generally established by the
Board at its December meeting. Specific individual performance and overall
corporate or business segment performance are reviewed in determining the
compensation level of each individual officer. In a particular business unit,
such unit's financial, operating, cost containment, and productivity results
are also considered. The Compensation Committee, where appropriate, also
considers other performance measures, such as increase in market share, safety,
environmental awareness, and improvements in relations with shareholders,
employees, the public, and government regulators.
In evaluating the performance and setting the compensation of the
President and Chief Executive Officer, Richard H. De Voto, for 1997, the
Compensation Committee and Board noted the successful 100% financing for the
entire Briggs project, including a bank loan facility and a mining equipment
lease; the successful construction and operation of the Briggs Mine;
exploration successes which continue in both the United States and
internationally; and, the ambitious expansion program for the industrial
minerals business.
The Compensation Committee believes that the Chief Executive Officer,
as well as the other officers of the Company, are strongly motivated and
dedicated to the growth in shareholder value of the Company. The Compensation
Committee further believes that the Chief Executive Officer, as well as the
other officers of the Company, are receiving salary compensation in the
mid-range of peer-group levels and that their performance incentives are
heavily based on their personal shareholding and/or incentive stock options in
the Company. The Compensation Committee believes that through the excellent
leadership provided by Richard H. De Voto and the Company's other officers,
(1) the Briggs project was fully-financed with 100% bank financing for
construction costs and an equipment lease for mining equipment during a
difficult market environment; (2) the Briggs mine was successfully built; (3)
the Company has maintained an effective voice in the management and advancement
of the permitting of the McDonald Project through its joint venture with Phelps
Dodge; (4) the Company continues to increase its reserve base; (5) the Company
has acquired an exploration property position
8
<PAGE> 12
in several countries in Latin America and Africa, including Panama, Brazil,
Ethiopia and Tanzania; and (6) the Company has embarked on an ambitious
expansion program for its industrial minerals business with the objective of
achieving a meaningful cash flow over a long period of time. The Compensation
Committee further believes that the Company is well positioned for substantial
growth both in the near-term as well as the long-term as the Briggs mine
reaches commercial production, the McDonald project is permitted, and
exploration success is achieved.
INCENTIVE COMPENSATION PLAN
The Company's Board of Directors is committed to providing a strong
incentive compensation opportunity to encourage and reward superior
performance. Corporate objectives are to build a team-driven environment which
will result in increased mineral production, cash flow and profitability by
means of development of current reserves and discovery of new mineral deposits.
On January 1, 1997, a performance-driven, variable pay Incentive Compensation
Plan was implemented by the Board, designed to measure and reward executive
officer's performance based on several key performance indicators. The
indicators used to measure performance include (1) annual share price change
compared to a peer group of companies, (2) cash flow, (3) net income per share,
(4) ounces of gold produced, (5) total mineable (profitable) ounces of gold
reserves, (6) successful completion of merger and/or acquisition transactions,
and (7) discretionary critical behavior as determined by the President.
The Board of Directors feels that by moving from a "fixed" base pay
compensation structure to a structure with more emphasis on "variable"
incentive pay, a corporate environment will be created which is goal-oriented,
results- driven, profit-focused, time sensitive and entrepreneurial.
STOCK OPTIONS
Under the Company's 1982 Incentive Stock Option Plan as amended ("ISO
Plan"), which was approved by shareholders, stock options are granted to the
Company's key employees, including the individuals whose compensation is
detailed in this Proxy Statement. The Compensation Committee sets the size of
the stock option grants based on factors, including competitive compensation
data, similar to those used to determine salaries.
Stock options are intended to align the interests of the executives
with those of the shareholders. All stock options granted from the ISO Plan
are granted with an exercise price equal to the market price of the Common
Stock on the date of grant and are generally exercisable over a 2-5 year
period. This approach is designed to provide executive incentive for creation
of additional shareholder value over the long term since the benefit of the
option awards cannot be realized unless stock price appreciation occurs.
CONCLUSION
The Company's executive compensation is linked to individual and
corporate performance and stock price appreciation. The Compensation Committee
intends to continue the policy of linking executive compensation to corporate
performance and returns to shareholders, recognizing that the ups and downs of
the business cycle, and in particular the depressed gold prices, from time to
time may result in an imbalance for a particular period.
This Report has been provided by the Compensation Committee.
Leland O. Erdahl (1)
William C. Parks (1)
Christopher M. T. Thompson (1)
Richard H. De Voto (2)
1 Member of Compensation Committee
2 Non-voting member of Compensation Committee
9
<PAGE> 13
COMPENSATION OF OFFICERS
The following tables show compensation during the fiscal years ended
December 31, 1996, 1995, and 1994, and option grants and option exercises
during the fiscal year ended December 31, 1996, of those persons who were, at
December 31, 1996 (i) the Chief Executive Officer and (ii) the three other most
highly compensated executive officers of the Company whose total compensation
exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
===============================================================================================
Annual Long-term
Compensation Compensation
-------------------------------
Awards
----------
Securities
Underlying All Other
Name and Salary Options Compensation
Principal Position Year ($) (#) ($)*
- - -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Richard H. De Voto 1996 197,500 45,000 4,500
President, CEO 1995 190,000 75,000 4,500
1994 190,000 50,000 4,500
Gary C. Huber 1996 150,438 40,000 4,500
Vice President- 1995 145,000 55,000 3,988
Finance 1994 145,000 30,000 3,988
William W. Walker 1996 119,375 25,000 3,581
Vice President- 1995 110,000 50,000 3,300
Exploration 1994 110,000 25,000 3,300
John R. Danio 1996 125,625 25,000 3,769
Vice President- 1995 120,000 50,000 3,600
Operations 1994 120,000 25,000 3,480
===============================================================================================
</TABLE>
* Amounts included in All Other Compensation were paid pursuant to the
Company's 401(k) plan.
10
<PAGE> 14
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
===============================================================================================================================
Potential Realizable
Value at Assumed Annual
Rates of Stock Price
Appreciation
INDIVIDUAL GRANTS for Option Term
- - -------------------------------------------------------------------------------------------------------------------------------
Percent of Total
Number of Securities Options Granted to
Underlying Options Employees in Exercise or
Granted Fiscal Base Price Expiration
Name (#) Year 1996 ($/Sh) Date 5% ($) 10% ($)
- - -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Richard H. De Voto 45,000(1) 12.9% 2.56 12/04/01 31,828 70,331
Gary C. Huber 40,000(1) 11.5% 2.56 12/04/01 28,291 62,516
William W. Walker 25,000(1) 7.2% 2.56 12/04/01 17,682 39,073
John R. Danio 25,000(1) 7.2% 2.56 12/04/01 17,682 39,073
===============================================================================================================================
</TABLE>
1 Options were granted on December 5, 1996, and first become exercisable after
the second anniversary of the date of grant. The options were granted at an
exercise price equal to the Common Stock closing price as quoted on AMEX on
the grant date.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
========================================================================================================================
Number of Securities
Underlying Value of Unexercised
Unexercised Options at FY-End In-The-Money Options at FY-
(#) End ($)(1)
-------------------------------------------------------------------------------------------------
Shares
Acquired Value
Name on Exercise (#) Realized ($)(2) Exercisable Unexercisable Exercisable Unexercisable
- - ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Richard H. De Voto 40,000 65,200 223,000 172,000 100,000 40,900
Gary C. Huber 30,000 56,250 160,000 95,000 60,000 30,800
William W. Walker 20,000 27,400 90,000 75,000 25,000 27,550
John R. Danio -- -- 105,000 75,000 50,000 27,550
========================================================================================================================
</TABLE>
(1) Based on the closing price of $2.63 of the Common Stock as quoted on
AMEX December 31, 1996.
(2) Market value of underlying securities at exercise date minus the
exercise price.
11
<PAGE> 15
SHAREHOLDER RETURN PERFORMANCE GRAPH
The following graph shows the cumulative total shareholder return on
the Company's Common Stock for the period December 31, 1991, through December
31, 1996, compared to the cumulative total return of three other stock market
indices: 1) the AMEX Market Value Index, 2) an index comprised of a group of
peer companies engaged in precious metal mining, and 3) the Standard and Poor's
Gold Index.
The peer group of North American mining companies includes data from
ten companies, all of which are listed on NASDAQ, AMEX, or NYSE. The ten
companies are: Alta Gold Co., Atlas Corp., Coeur d'Alene Mines Corporation,
Crown Resources Corporation, Dakota Mining Corporation, Glamis Gold Ltd., Hecla
Mining Company, Sunshine Mining and Refining Company, USMX, Inc., and Vista
Gold Corp. The Standard and Poor's Gold Index includes data from seven large
North American gold mining companies: Barrick Gold Corporation, Battle
Mountain Gold Company, Echo Bay Mines, Ltd., Homestake Mining Company, Newmont
Gold Company, Placer Dome Inc., and Santa Fe Pacific Gold Corporation.
<TABLE>
<CAPTION>
===============================================================================================================
TOTAL RETURN ANALYSIS 12/31/91 12/31/92 12/31/93 12/30/94 12/29/95 12/31/96
- - ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Canyon Resources Corp. $100.00 $59.59 $138.31 $53.18 $82.98 $89.38
- - ---------------------------------------------------------------------------------------------------------------
S&P Gold/Precious Metals
Mining $100.00 $93.37 $171.05 $138.20 $155.54 $154.38
- - ---------------------------------------------------------------------------------------------------------------
AMEX Market Value Index $100.00 $101.06 $120.78 $109.78 $138.77 $147.65
- - ---------------------------------------------------------------------------------------------------------------
Peer Group Only $100.00 $83.05 $157.26 $123.86 $101.25 $94.44
===============================================================================================================
</TABLE>
o Assumes initial investment of $100.
o Total Return assumes reinvestment of dividends.
o Total Returns based on market capitalization.
12
<PAGE> 16
COMPENSATION OF DIRECTORS
During 1996, the Company paid its Directors who are not officers,
employees, or otherwise retained by the Company an annual Director's fee of
$5,000, plus $1,000 for each attended meeting of the Board ($250 for each
telephonic meeting) and $500 for each Compensation and Audit Committee
meeting. The Chairman of the Audit Committee received an additional $2,000 of
compensation. The Company reimburses its Directors for expenses incurred in
attending meetings.
During 1996, Paul A. Bailly, Leland O. Erdahl, George W. Holbrook,
Frank M. Monninger, William C. Parks and Christopher M. T. Thompson were each
granted options to purchase 10,000 shares of common stock under the Company's
Non- Qualified Stock Option Plan. The options were granted at an exercise
price of $3.31 per share, the closing market price of the Company's common
stock on the date of the grant. The options are exercisable as of June 5,
1997, and expire on June 4, 2001.
CHANGE IN CONTROL ARRANGEMENT
The Company has entered into employment agreements with certain
executive employees, including Messrs. De Voto, Huber, Walker, Danio, Phillips
and Ms. Martin which are only effective in the event of a "change in control"
of the Company, as defined in the employment agreements. Upon the occurrence
of such a change in control, the Company has agreed to continue the executives'
employment and the executives have agreed to remain in the Company's employ for
a period ranging from six to twenty-four months after such change in control
(the "Employment Period"). During the Employment Period, the executive shall
receive an annual base salary at least equal to twelve times the highest
monthly base salary paid to the executive by the Company during the
twelve-month period immediately preceding the month in which the change of
control occurs. Further, under the agreement, the executive may terminate the
employment agreement for "good reason." If terminated for good reason, the
executive is entitled to receive any accrued obligations to such executive plus
the executive's salary payable for the remainder of the Employment Period.
"Good reason" is defined in the agreement to include: (i) a significant
diminution of the executive's duties, (ii) a failure of the Company to pay
salary and other amounts due under the agreement, (iii) requiring the executive
to move beyond a 20 mile radius of the Company's principal office, (iv) an
unauthorized termination of the executive, or (v) failure of the Company to
require any successor company to honor the provisions of the employment
agreement.
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board has appointed Coopers & Lybrand L.L.P. to audit the
Company's financial statements prepared in connection with the submittal of the
Company's Report on Form 10-K for the fiscal year ending December 31, 1997.
The Board recommends that the shareholders ratify that appointment. Coopers &
Lybrand L.L.P. has audited the Company's financial statements since inception.
The Company has requested representatives of Coopers & Lybrand L.L.P.
to be present at the Meeting, will make available to such representatives an
opportunity to make a statement if they so desire, and expects them to be
available to respond to appropriate questions.
THE SHARES OF COMMON STOCK REPRESENTED BY THE PROXIES IN THE
ACCOMPANYING FORM WILL BE VOTED "FOR" THE RATIFICATION OF THE APPOINTMENT OF
INDEPENDENT PUBLIC ACCOUNTANTS UNLESS A CONTRARY DIRECTION IS INDICATED.
13
<PAGE> 17
SHAREHOLDER PROPOSALS
Proposals by shareholders of the Company to be presented at the 1998
Annual Meeting of Shareholders must be received by the Company no later than
February 6, 1998, to be included in the Company's Proxy Statement and proxy for
that meeting. The proponent must be a record or beneficial owner entitled to
vote on his or her proposal at the next Annual Meeting and must continue to own
such security entitling him or her to vote through that date on which such
meeting is held. The proponent must own 1% or more of the outstanding shares
or $1,000.00 in value of the Company's Common Stock and must have owned such
shares for one year in order to present a shareholder proposal to the Company.
ANNUAL REPORT
The Annual Report to Shareholders concerning the operation of the
Company during the fiscal year ended December 31, 1996, including certified
financial statements for the year then ended, has been enclosed with this Proxy
Statement. The Annual Report is not incorporated in this Proxy Statement and
is not to be considered a part of the soliciting material.
OTHER MATTERS
The Board knows of no other special business to be presented at the
Meeting. If other matters properly come before the Meeting, the persons named
in the accompanying form of proxy intend to vote on such other matters in
accordance with their best judgement.
AVAILABILITY OF ANNUAL REPORT ON FORM 10-K
UPON A WRITTEN REQUEST, THE COMPANY WILL PROVIDE, WITHOUT CHARGE, A
COPY OF ITS ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31,
1996, TO EACH SHAREHOLDER OF RECORD OR TO EACH SHAREHOLDER WHO OWNED COMMON
STOCK OF THE COMPANY LISTED IN THE NAME OF A BANK OR BROKER, AS NOMINEE, AT THE
CLOSE OF BUSINESS ON APRIL 23, 1997. ANY REQUEST BY A SHAREHOLDER FOR THE
COMPANY'S ANNUAL REPORT ON FORM 10-K SHOULD BE MAILED TO THE COMPANY'S
SECRETARY, C/O CANYON RESOURCES CORPORATION, 14142 DENVER WEST PARKWAY, SUITE
250, GOLDEN, COLORADO 80401.
By Order of the Board of Directors
Cheryl A. Martin
May 2, 1997 Corporate Secretary
14
<PAGE> 18
(Front)
PROXY CANYON RESOURCES CORPORATION PROXY
14142 Denver West Parkway, Suite 250
Golden, Colorado 80401
The undersigned holder of Common Stock acknowledges receipt of Notice of an
Annual Meeting of Shareholders of Canyon Resources Corporation, hereby appoints
Richard H. De Voto and William W. Walker, or either of them, as Proxies, each
with the power to appoint a substitute, and hereby authorizes them to represent
and to vote, as designated below, all shares of Common Stock of Canyon
Resources Corporation held of record by the undersigned on April 23, 1997, at
the Annual Meeting of Shareholders to be held on June 6, 1997, or at any
adjournment thereof, with respect to the following:
1. ELECTION OF DIRECTORS - Nominees:
Gary C. Huber Leland O. Erdahl James E. Askew
[ ] FOR all nominees (except as specifically listed below) [ ] WITHHOLD
AUTHORITY to vote for all nominees
INSTRUCTIONS: To withhold authority to vote for any individual nominee, write
the nominee's name in the space provided below. IF AUTHORITY IS NOT EXPRESSLY
WITHHELD, IT SHALL BE DEEMED GRANTED.
- - --------------------------------------------------------------------------------
(Back)
2. RATIFICATION OF THE APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
[ ] FOR [ ] AGAINST [ ] ABSTAIN
This Proxy is solicited on behalf of the Board of Directors and may be revoked
prior to its exercise. This Proxy, when properly executed, will be voted as
directed above by the undersigned shareholders. If no direction is made, it
will be voted FOR the nominees named in Item 1, and FOR the Ratification of the
appointment of the independent public accountants in Item 2, and in the
Proxies' discretion on such other business as may properly come before the
Meeting.
Date:
---------------------------------------
--------------------------------------------
Signature
--------------------------------------------
Signature if held jointly
(Please sign EXACTLY as your name appears on your stock certificate(s). If
more than one name appears because of joint ownership, all joint owners should
sign.)
