<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:
<TABLE>
<S> <C>
[ ] 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
</TABLE>
CANYON RESOURCES CORPORATION
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the 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:
-----------------------------------------------------------------------
(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:
-----------------------------------------------------------------------
(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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<PAGE> 2
CANYON RESOURCES CORPORATION
14142 Denver West Parkway, Suite 250
Golden, Colorado 80401
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 14, 2000
To Our Shareholders:
A Special Meeting of Shareholders ("Meeting") of Canyon Resources
Corporation (the "Company"), a Delaware corporation, will be held at 3:00 p.m.
(Mountain time) on Friday, January 14, 2000, at the Company's office at 14142
Denver West Parkway, Suite 250, Golden, Colorado, for the following purposes:
1. To approve alternate capital restructuring proposals to amend the
Certificate of Incorporation of the Company to effect (i) a
one-for-two and a half (1:2.5), (ii) a one-for-four (1:4), or
(iii) a one-for-five (1:5) reverse stock split of the Company's
issued and outstanding Common Stock at the discretion of the Board
of Directors, each of which alternative proposals would also
include (A) the reduction of the Company's authorized shares of
Common Stock from 100,000,000 to 50,000,000 and (B) the complete
elimination of the Company's Preferred Stock.
2. To transact such other business as may properly come before the
meeting or any postponement or adjournment thereof.
Shareholders of record at the close of business on November 29, 1999,
are entitled to notice of and to vote at the Meeting. A list of the stockholders
entitled to vote at the Meeting shall be open to the examination of any
stockholder during ordinary business hours for a period of 10 days prior to the
Meeting at the Company's headquarters, 14142 Denver West Parkway, Suite 250,
Golden, Colorado.
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
---------------------------------------
Gary C. Huber
Corporate Secretary
Golden, Colorado
December 2, 1999
- - --------------------------------------------------------------------------------
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> 3
CANYON RESOURCES CORPORATION
14142 Denver West Parkway, Suite 250
Golden, Colorado 80401
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
JANUARY 14, 2000
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 Special Meeting of Shareholders
("Meeting") of the Company. The Meeting will be held on January 14, 2000, at
3:00 p.m. (Mountain time) at the Company's offices, 14142 Denver West Parkway,
Suite 250, Golden, Colorado, for the purposes set forth in the accompanying
Notice of Special 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 approval of the Amendment to the
Company's Certificate of Incorporation, at the discretion of the Board of
Directors, to effectuate alternative restructurings of the Company's
capitalization, and in the proxy holders' discretion on such other business as
may properly come before the Meeting. Any person giving a proxy has the power to
revoke it at any time before its exercise by (i) filing with the Secretary of
the Company a signed written statement revoking his or her proxy or (ii)
submitting an executed proxy bearing a date later than that of the proxy being
revoked. A proxy may also be revoked by attendance at the Special Meeting and
the election to vote in person. Attendance at the Special Meeting will not by
itself constitute the revocation of a proxy.
This Proxy Statement and the accompanying proxy are first being sent to
shareholders on or about December 2, 1999. 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
November 29, 1999, are entitled to notice of and to vote at the Meeting or any
adjournment. At the close of business on November 29, 1999, there were
46,497,470 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. Assuming a
quorum is present, the affirmative vote of the holders of a majority of the
shares of Common Stock issued and outstanding will be necessary to approve the
amendment to the Company's Certificate of Incorporation, at the discretion of
the Board of Directors, to effectuate alternative restructurings of the
Company's capitalization.
1
<PAGE> 4
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.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information, as of November 29, 1999,
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 executive officer of the Company, 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 OF TYPE OF NUMBER OF PERCENT OF
BENEFICIAL OWNER OWNERSHIP SHARES CLASS
---------------- --------- --------- ----------
<S> <C> <C> <C>
Richard H. De Voto, President, Record and 1,030,698 (1) 2.2%
Director Beneficial
Gary C. Huber, Vice President, Record and 487,561 (2) 1.0%
Corporate Secretary, Director Beneficial
Richard T. Phillips, Treasurer Record and 95,000 (3) *
Beneficial
Leland O. Erdahl, Director Record and 94,289 (4) *
Beneficial
Richard F. Mauro, Director Record and 50,000 (5) *
Beneficial
All Officers & Directors as a Group Record and 1,757,548 3.7%
(5 persons) Beneficial
</TABLE>
* Less than 1%
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 85,000 shares
at an exercise price of $3.00 per share; (v) options to purchase 100,000
shares at an exercise price of $1.63 per share; (vi) an option to purchase
25,000 shares at an exercise price of $2.00 per share; (vii) an option to
purchase 50,000 shares at an exercise price of $2.19 per share; (viii) an
option to purchase 45,000 shares at an exercise price of $2.56 per share;
and (ix) an option to purchase 155,000 shares at an exercise price of $1.187
per share.
2 This number includes (i) 207,561 shares owned of record; (ii) an option to
purchase 50,000 shares at an exercise price of $3.00 per share; (iii)
options to purchase 60,000 shares at an exercise price of $1.63 per
2
<PAGE> 5
share; (iv) an option to purchase 20,000 shares at an exercise price of
$2.00 per share; (v) an option to purchase 35,000 shares at an exercise
price of $2.19 per share; (vi) an option to purchase 40,000 shares at an
exercise price of $2.56 per share; and (vii) an option to purchase 75,000
shares at an exercise price of $1.187 per share.
3 This number includes (i) an option to purchase 15,000 shares at an exercise
price of $3.00 per share; (ii) an option to purchase 15,000 shares at an
exercise price of $1.63 per share; (iii) an option to purchase 20,000 shares
at an exercise price of $2.19 per share; (iv) an option to purchase 25,000
shares at an exercise price of $2.56 per share; and (v) an option to
purchase 20,000 shares at an exercise price of $1.187 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 $2.06 per share; (iii) an
option to purchase 10,000 shares at an exercise price of $3.31 per share;
(iv) an option to purchase 10,000 shares at an exercise price of $3.00 per
share; and (v) an option to purchase 10,000 shares at an exercise price of
$0.81 per share.
5 This number includes an option to purchase 50,000 shares at an exercise
price of $0.13 per share.
PROPOSAL FOR
APPROVAL OF ALTERNATIVE RESTRUCTURINGS
OF THE COMPANY'S CAPITALIZATION
AT THE DISCRETION OF THE BOARD
INTRODUCTION
In November 1999, the Board of Directors of the Company approved,
subject to stockholders' approval solicited hereby, alternative capital
restructuring (the "Restructuring") proposals to amend the Company's Certificate
of Incorporation to effectuate (i) a one-for-two and a half (1:2.5), (ii) a
one-for-four (1:4), or (iii) a one-for-five (1:5) reverse stock split of the
Company's Common Stock, each of which alternative proposals would also include
(A) the reduction of the Company's authorized shares of Common Stock from
100,000,000 to 50,000,000, and (B) the complete elimination of the Company's
authorized Preferred Stock. Approval of the alternative proposals would give the
Board discretionary authority to implement any one or none of the alternative
proposals for a twenty-four month period, until January 14, 2002.
The directors propose to have the authority to amend the Company's
Certificate of Incorporation, at their discretion, to reclassify the Common
Stock of the Company to effectuate one of the proposed reverse stock splits (the
"Reverse Splits"), such that for every two and a half (2 1/2) pre-amendment
common shares held by a stockholder, such holder would be entitled to one (1)
post-amendment common share, or for every four (4) pre-amendment common shares
held by a stockholder, such holder would be entitled to one (1) post-amendment
common share, or for every five (5) pre-amendment common shares held by a
stockholder, such holder would be entitled to one (1) post-amendment common
share, fractional shares being rounded up to the nearest full post-amendment
share, and outstanding warrants and options to purchase stock being adjusted
accordingly. A Reverse Split would become effective upon the filing with the
Secretary of State of Delaware of an amendment to the Company's Certificate of
Incorporation.
Adjustments to the corporate financial statements to reflect the
reclassification and reverse split, the reduction of authorized shares of Common
Stock and the elimination of authorized shares of Preferred Stock are expected
to be minimal. The expected immediate effect in the market would be an
approximate increase
3
<PAGE> 6
in the trading price per share, and a decrease in the number of post-amendment
shares involved in a trade of shares that would have been involved in an
identical trade. Outstanding pre-amendment shares of 46,497,470 would become
approximately 18,598,988 outstanding post-amendment shares (in the event of a
one-for-two and a half split) or 11,624,368 outstanding post-amendment shares
(in the event of a one-for-four split) or 9,299,494 outstanding post-amendment
shares (in the event of a one-for-five split) depending on what ratio was
decided by the Board of Directors.
In addition to several requirements, the American Stock Exchange
generally prefers that issuers listed on the Exchange maintain a minimum bid
price of $1.00 per share for the listed stock. The Company's shares of Common
Stock have continuously traded below $1.00 since May 26, 1998, and the American
Stock Exchange has notified the Company that unless such shares achieve a
minimum bid price of $1.00 or more, the Company will be delisted from the
Exchange. The Board of Directors believes that such a delisting could adversely
affect the ability of the Company to attract new investors, may result in
decreased liquidity of the outstanding shares of Common Stock and, consequently,
could reduce the price at which such shares trade and increase the transaction
costs inherent to trading such shares. The Company believes that, if the
Restructuring is approved and implemented, there is a greater likelihood that
the minimum bid price of the Common Stock will be maintained at a level over
$1.00 per share. There can be no assurance, however, that approval and
implementation of the Restructuring will succeed in raising the bid price of the
Company's Common Stock above $1.00 per share, that such minimum price, if
achieved, would be maintained, or that even if AMEX's minimum bid price
preference were satisfied, the Company's Common Stock would not be delisted by
the AMEX for other reasons.
Even though a reverse stock split, by itself, does not impact a
corporation's assets or prospects, reverse stock splits can result in a decrease
in the aggregate market value of a corporation's equity capital. The Board of
Directors, however, believes that this risk is off-set by the prospect that the
reverse stock split will improve the likelihood that the Company will be able to
maintain its American Stock Exchange listing and may, by increasing the per
share price, make an investment in the Common Stock more attractive for certain
investors. If the Company's securities are delisted from American Stock
Exchange, trading, if any, of the Company's securities would thereafter have to
be conducted in the non-AMEX over-the-counter market. In such event, an investor
could find it more difficult to dispose of, or to obtain accurate quotations as
to the market value of the Company's securities. In addition, if the Common
Stock were to become delisted from trading on AMEX and the trading price of the
Common Stock were to remain below $5.00 per share, trading in the Company's
Common Stock would also be subject to the requirements of certain rules
promulgated under the Securities Exchange Act of 1934, as amended, which require
additional disclosure by broker-dealers in connection with any trades involving
a stock defined as a penny stock. The additional burdens imposed upon
broker-dealers by such requirements could discourage broker-dealers from
effecting transactions in the Common Stock, which could severely limit the
market liquidity of the Common Stock and the ability of investors to trade the
Company's Common Stock.
The sole purpose for the proposed reduction of the number of the
Company's authorized shares of Common Stock from 100,000,000 to 50,000,000 and
the complete elimination of the Company's authorized shares of Preferred Stock
is to minimize the amount of Delaware corporate franchise tax payable by the
Company. The amount of such Delaware corporate franchise tax payable by the
Company is adversely affected by the existence of a significant amount of
authorized but unissued shares of capital stock. The Company currently has
authorized 10,000,000 shares of Preferred Stock, none of which are outstanding.
If the Reverse Split is consummated without a reduction in authorized shares of
Common Stock the Company would have 100,000,000 shares of authorized Common
Stock with approximately 18,598,988 or 11,624,368, or 9,299,494 shares of Common
Stock issued and outstanding, depending on the Board of Directors' decision to
effect either the one-for-two and a half (1:2 1/2), or one-for-four (1:4), or a
one-for-five (1:5) Reverse Split, such decision solely at their discretion. The
Company estimates that the reduction of authorized shares of
4
<PAGE> 7
Common Stock to 50,000,000 and the elimination of the authorized Preferred Stock
will reduce the Company's potential annual Delaware franchise tax by
approximately $30,000 to $60,000, depending on which Reverse Split alternative
is implemented. Management believes that the shares of authorized but unissued
Common Stock (31,401,012 shares if a one-for-two and a half (1:2 1/2), or
38,375,632 shares if a one-for-four (1:4), or 40,700,506 shares if a
one-for-five (1:5) Reverse Split is effected) that will remain following a
reduction in authorized Common Stock from 100,000,000 to 50,000,000 are adequate
for the Company's future needs and contingencies.
The purpose of the Reverse Split is to increase the market value of the
Common Stock. The Board intends to effect a Reverse Split only if it believes
that a decrease in the number of shares outstanding may improve the trading
market for the Common Stock. If the Reverse Split alternatives are authorized by
the stockholders, the Board will have the discretion to implement one only
during the next 24 months, or effect no reverse stock split at all. The Board
has submitted three proposals in order to give it latitude. If the trading price
of the Common Stock increases without a reverse split, a Reverse Split may not
be necessary, or one of lesser proportions would be required than if the trading
price decreased or remains constant.
In connection with any determination to effect a Reverse Split, the
Board will also select the Reverse Split that, in its discretion, results in the
greatest marketability of the Common Stock based on prevailing market conditions
and the remaining Reverse Splits would be abandoned by the Board. No further
action on the part of the stockholders would be required to either effect a
Reverse Split or abandon the alternatives. If no Reverse Split is effected by
January 14, 2002, the Board's authority to effect a Reverse Split will also
terminate.
Based upon current market conditions and in light of the American Stock
Exchange preferences and the potential minimization of the Delaware corporate
franchise tax discussed above, management has determined that authorization of
the Restructuring is in the best interest of the Company's stockholders. The
Restructuring would be effected by management by filing an amendment to the
Certificate of Incorporation of the Company with the Delaware Secretary of
State.
Holders of the Common Stock have no preemptive or other subscription
rights.
PRINCIPAL EFFECTS OF THE RESTRUCTURING
If the stockholders approve the Restructuring and the Board of
Directors decides to effect one of the Reverse Split alternatives prior to
January 14, 2002, the Company will amend the existing provision of the
Certificate of Incorporation relating to the Company's authorized capital.
Accordingly, Article Fourth of the Certificate of Incorporation will read,
depending on the Reverse Split ratio selected by the Board, in its entirety, as
follows:
A. One-for-two and a half (1:2 1/2) Reverse Stock Split.
"FOURTH: (a) The aggregate number of shares that the Corporation shall
have authority to issue is 50,000,000 shares of Common Stock, $.01 par
value per share.
(b) Each two-and-a-half (2 1/2) shares of the Company's Common
Stock issued as of the date and time immediately preceding [insert Date
which Amended Certificate is filed], the effective date of a reverse
stock split (the "Split Effective Date"), shall be automatically
changed and reclassified, as of the Split Effective Date and without
further action, into one (1) fully paid and nonassessable share of the
Company's Common Stock;
5
<PAGE> 8
provided, however, that any fractional interest resulting from such
change and classification shall be rounded upward to the nearest whole
share."
B. One-for-Four (1:4) Reverse Stock Split
"FOURTH: (a) The aggregate number of shares that the Corporation shall
have authority to issue is 50,000,000 shares of Common Stock, $.01 par
value per share.
(b) Each four (4) shares of the Company's Common Stock issued
as of the date and time immediately preceding [insert Date which
Amended Certificate is filed], the effective date of a reverse stock
split (the "Split Effective Date"), shall be automatically changed and
reclassified, as of the Split Effective Date and without further
action, into one (1) fully paid and nonassessable share of the
Company's Common Stock; provided, however, that any fractional interest
resulting from such change and classification shall be rounded upward
to the nearest whole share."
C. One-for-Five (1:5) Reverse Stock Split
"FOURTH: (a) The aggregate number of shares that the Corporation shall
have authority to issue is 50,000,000 shares of Common Stock, $.01 par
value per share.
(b) Each five (5) shares of the Company's Common Stock issued
as of the date and time immediately preceding [insert Date which
Amended Certificate is filed], the effective date of a reverse stock
split (the "Split Effective Date"), shall be automatically changed and
reclassified, as of the Split Effective Date and without further
action, into one (1) fully paid and nonassessable share of the
Company's Common Stock; provided, however, that any fractional interest
resulting from such change and classification shall be rounded upward
to the nearest whole share."
If the stockholders approve the Restructuring, one of the above
amendments to the Company's Certificate of Incorporation would become effective
upon the Board's decision to implement a Reverse Split and the filing of an
amendment to the Certificate of Incorporation with the Secretary of State of
Delaware.
The proposed Restructuring will not affect any stockholder's
proportionate equity interest in the Company or the rights, preferences,
privileges or priorities of any stockholder, other than an adjustment which may
occur due to the rounding up of fractional shares. A stockholder may hold less
than 100 shares of the Company's Common Stock after the proposed Restructuring
and as a consequence may incur greater costs associated with trading. Likewise,
the proposed Restructuring will not affect the total stockholders' equity of the
Company or any components of stockholders' equity as reflected on the financial
statements of the Company except (i) to change the numbers of the issued and
outstanding shares of Common Stock, (ii) to change the authorized shares of
Common Stock and Preferred Stock, and (iii) for an adjustment which will occur
due to the costs incurred by the Company in connection with this Proxy Statement
and the implementation of such of the Proposals as are approved by the
stockholders.
6
<PAGE> 9
EFFECT OF THE RESTRUCTURING
The following table illustrates the principal effects on the Company's
Capital Stock of the Restructuring:
<TABLE>
<CAPTION>
NUMBER OF SHARES OF
NUMBER OF SHARES OF COMMON STOCK PREFERRED STOCK
--------------------------------------------------------------- -----------------------------
Prior to One-for-Two One-for-Four One-for-Five Prior to After
Restructuring and a Half Reverse Split Reverse Split Restructuring Restructuring
Reverse Split (1:4) (1:5)
(1:2 1/2)
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Authorized 100,000,000 50,000,000 50,000,000 50,000,000 10,000,000 0
Issued and
outstanding 46,497,470 18,598,988 11,624,368 9,299,494 0 0
Available for
future issuance 53,502,530 31,401,012 38,375,632 40,700,506 10,000,000 0
</TABLE>
EXCHANGE OF SHARES; NO FRACTIONAL SHARES
Pursuant to the proposed Reverse Splits, depending on the Reverse Split
ratio selected by the Board of Directors, every two-and-a-half (2 1/2) shares,
or four (4) shares, or five (5) shares of issued Common Stock would be converted
and reclassified into one (1) share of post-split Common Stock, and any
fractional interests resulting from such reclassification would be rounded
upward to the nearest whole share. For example, a holder of one hundred (100)
shares prior to the Split Effective Date would be the holder of: (i) forty (40)
shares at the Split Effective Date if the one-for-two and a half (1:2 1/2)
Reverse Stock Split is selected by the Board of Directors, (ii) twenty-five (25)
shares at the Split Effective Date if the one-for-four (1:4) Reverse Stock Split
is selected by the Board of Directors and, (iii) twenty (20) shares at the Split
Effective Date if the one-for-five (1:5) Reverse Stock Split is selected by the
Board of Directors. All shares held by a stockholder will be aggregated and one
new stock certificate will be issued, unless the transfer agent is otherwise
notified by the stockholder. The proposed Reverse Split would become effective
immediately on the Split Effective Date. Stockholders will be notified on or
after the Split Effective Date that the Reverse Split has been effected. The
Company's transfer agent, American Securities Transfer & Trust, Inc., will act
as the Company's exchange agent (the "Exchange Agent") for stockholders in
implementing the exchange of their certificates.
As soon as practicable after the Split Effective Date, stockholders
will be notified and provided the opportunity (but shall not be obligated) to
surrender their certificates to the Exchange Agent in exchange for certificates
representing post-split Common Stock. Stockholders will not receive certificates
for shares of post-split Common Stock unless and until the certificates
representing their shares of pre-split Common Stock are surrendered and they
provide such evidence of ownership of such shares as the Company or the Exchange
Agent may require. Stockholders should not forward their certificates to the
Exchange Agent until they have received notice from the Company that the Reverse
Split has become effective. Beginning on the Split Effective Date, each
certificate representing shares of the Company's pre-split Common Stock will be
deemed for all corporate purposes to evidence ownership of the appropriate
number of shares of post-split Common Stock.
7
<PAGE> 10
No service charge will be payable by stockholders in connection with
the exchange of certificates, all costs of which will be borne and paid by the
Company.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
A summary of the federal income tax consequences of the Restructuring
is set forth below. The discussion is based on present federal income tax law.
The discussion is not intended to be, nor should it be relied on as, a
comprehensive analysis of the tax issues arising from or relating to the
proposed Restructuring. Income tax consequences to the stockholders may vary
from the federal tax consequences described generally below.
STOCKHOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE EFFECT OF THE
CONTEMPLATED RESTRUCTURING UNDER APPLICABLE FEDERAL, STATE AND LOCAL INCOME TAX
LAWS.
The proposed Restructuring constitutes a "recapitalization" to the
Company and its stockholders to the extent that issued shares of Common Stock
are exchanged for a reduced number of shares of Common Stock. Therefore, neither
the Company nor its stockholders will recognize any gain or loss for federal
income tax purposes as a result thereof.
The shares of Common Stock to be issued to each stockholder will have
an aggregate basis, for computing gain or loss, equal to the aggregate basis of
the shares of such stock held by such stockholder immediately prior to the Split
Effective Date. A stockholder's holding period for the shares of Common Stock to
be issued will include the holding period for the shares of Common Stock held
thereby immediately prior to the Split Effective Date provided that such shares
of stock were held by the stockholder as capital assets on the Split Effective
Date.
VOTING REQUIREMENTS
Each holder of Common Stock is entitled to one vote per share held. The
holders of one-third of the shares of the Common Stock issued and outstanding
constitutes a quorum. The affirmative vote of holders of at least a majority of
the outstanding shares of Common Stock of the Company is required for approval
of the grant of discretionary authority to implement the Restructuring. In the
event that a quorum is not present or represented at the Special Meeting, the
stockholders entitled to vote at the meeting present in person or by proxy shall
have power to adjourn the Special Meeting until a quorum shall be present or
represented. Proxies solicited by the Board of Directors will be voted for
approval of the grant of discretionary authority to implement the Restructuring,
unless otherwise indicated. Stockholders are not entitled to cumulate votes.
A stockholder voting through a proxy who abstains with respect to
approval of the Proposal for the grant of discretionary authority to implement
the Restructuring shall be considered to have cast a negative vote with respect
to the grant of discretionary authority to implement the Restructuring at the
Special Meeting.
RECOMMENDATION OF THE BOARD
The Board of Directors recommends a vote "FOR" the proposal to grant
discretionary authority to the Board to amend the Company's Certificate of
Incorporation to effectuate the Restructuring. Unless a contrary choice is
specified, proxies solicited by the Board of Directors will be voted FOR
approval of the grant of discretionary authority to the Board to amend the
Certificate of Incorporation to effectuate the Restructuring.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE GRANT OF
DISCRETIONARY AUTHORITY TO THE BOARD TO AMEND THE COMPANY'S CERTIFICATE OF
INCORPORATION TO EFFECTUATE A RESTRUCTURING OF THE COMPANY'S CAPITALIZATION.
SHAREHOLDER PROPOSALS
Proposals by shareholders of the Company to be presented at the 2000
Annual Meeting of Shareholders must be received by the Company no later than
January 6, 2000, to be included in the Company's Proxy Statement and proxy for
that meeting. If a shareholder intends to submit a proposal at the meeting that
is not included in the Company's proxy statement, and the shareholder fails to
notify the Company prior to March 17, 2000 of such proposal, then the proxies
appointed by the Company's management would be allowed to use their
discretionary voting authority when the proposal is raised at the annual
meeting, without any discussion of the matter in the proxy statement. 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 $2,000.00 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.
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.
By Order of the Board of Directors
------------------------------------
Gary C. Huber
Corporate Secretary
December 2, 1999
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PROXY CANYON RESOURCES CORPORATION PROXY
14142 Denver West Parkway, Suite 250
Golden, Colorado 80401
PROXY SOLICITED BY BOARD OF DIRECTORS FOR SPECIAL MEETING
JANUARY 14, 2000
The undersigned hereby appoints Richard H. De Voto and Gary C. Huber, or each of
them, proxies, each with the power of substitution, to vote the shares of the
undersigned at the Special Meeting of Stockholders of CANYON RESOURCES
CORPORATION on January 14, 2000, and any adjournments or postponements thereof,
upon all matters that may properly come before the meeting. Without otherwise
limiting the foregoing general authorization, the proxies are instructed to vote
as indicated herein.
This proxy, which is solicited on behalf of the Board of Directors, will be
voted FOR alternative proposals for the Restructuring of the Company's
Capitalization, at the discretion of the Board of Directors, unless the
stockholder specifies otherwise, in which case it will be voted as specified. If
you wish to vote in accordance with the Board of Directors' recommendations,
please sign and return the proxy. You need not mark any boxes. In their
discretion, the proxies are authorized to vote upon such other business as may
properly come before the meeting.
(continued and to be signed on reverse side)
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING MATTERS TO COME
BEFORE THE MEETING.
To approve alternate capital restructuring proposals to amend the Certificate of
Incorporation of the Company to effect (i) a one-for-two and a half (1:2.5), or
(ii) a one-for-four (1:4), or (iii) a one-for-five (1:5) reverse stock split of
the Company's issued and outstanding Common Stock at the discretion of the Board
of Directors, each of which alternative proposals would also include (A) the
reduction of the Company's authorized shares of Common Stock from 100,000,000 to
50,000,000 and (B) the complete elimination of the Company's Preferred Stock.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Date:
---------------------------------------------------
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Signature(s) of Stockholder or Stockholders, (Executors,
Administrators, Trustees, etc. should give full title.)
WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, YOU ARE URGED TO MARK,
SIGN, DATE AND PROMPTLY RETURN THIS PROXY, USING THE ENCLOSED ENVELOPE.
