<PAGE>
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
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
Amax Gold Inc.
(Name of Registrant as Specified In Its Charter)
Amax Gold Inc.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
(4) Proposed maximum aggregate value of transaction:
- --------
*Set forth the amount on which the filing is calculated and state how it was
determined.
[_] 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.:
(3) Filing Party:
(4) Date Filed:
Notes:
<PAGE>
[LOGO OF AMAX GOLD INC. APPEARS HERE]
9100 EAST MINERAL CIRCLE, ENGLEWOOD, COLORADO 80112
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 5, 1994
April 11, 1994
To the Holders of Common Stock:
The Annual Meeting of Stockholders of Amax Gold Inc. (the "Company") will be
held at the Scanticon Denver Conference Center, 200 Inverness Drive West,
Englewood, Colorado on Thursday, May 5, 1994, at 9:00 a.m. (Mountain Daylight
Saving Time) for the following purposes:
1. To elect six Directors, each for a term of one year;
2. To ratify the selection of Price Waterhouse as auditors for the fiscal
year 1994;
3. To approve the adoption of a stock grant plan for the Company's
nonemployee directors; and
4. To transact such other business as may properly come before the meeting or
any adjournments thereof.
The holders of common stock are entitled to vote on all of the above
proposals.
The Board of Directors has fixed the close of business on March 24, 1994, as
the record date for the determination of stockholders entitled to notice of and
to vote at the meeting.
IF YOU ARE UNABLE TO ATTEND THE MEETING IN PERSON, PLEASE MARK, SIGN AND DATE
THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ACCOMPANYING ENVELOPE WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
By order of the Board of Directors
Paul J. Hemschoot, Jr.
Secretary
<PAGE>
[LOGO OF AMAX GOLD INC. APPEARS HERE]
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement, along with the enclosed form of proxy, is being mailed
to stockholders on or about April 13, 1994, in connection with a solicitation
of proxies by the Board of Directors of Amax Gold Inc. (the "Company") for use
at the Annual Meeting of Stockholders of the Company to be held on Thursday,
May 5, 1994, at 9:00 a.m. (Mountain Daylight Saving Time) at the Scanticon
Denver Conference Center, 200 Inverness Drive West, Englewood, Colorado, 80112,
for the purposes set forth in the accompanying Notice of Annual Meeting of
Stockholders.
REVOCABILITY OF PROXY
Execution of the enclosed form of proxy will not affect a stockholder's right
to attend the meeting and vote in person. A stockholder giving a proxy has the
power to revoke it at any time before it is exercised by attending the meeting
and voting in person or by filing with the Secretary of the Company an
instrument in writing revoking the proxy or another duly executed proxy bearing
a later date.
VOTING SECURITIES
The Record Date for voting at the Annual Meeting was the close of business on
March 24, 1994. On the Record Date, the Company had outstanding 78,196,647
shares of common stock (exclusive of 1,991 shares held in the Treasury), which
is the only outstanding class of voting securities of the Company. The
outstanding common stock will be voting on all matters currently scheduled to
be acted upon at the Annual Meeting, with each share entitled to one vote.
VOTING PROCEDURES
Under the Delaware Corporation Law and the Company's By-Laws, the holders of
a majority of the shares of common stock eligible to vote, present in person or
represented by proxy, will constitute a quorum at the Annual Meeting. For this
purpose, shares which are present or represented by a proxy at the 1994 Annual
Meeting will be counted for quorum purposes, regardless of whether the holder
of the shares or proxy fails to vote on, or whether a broker with discretionary
authority fails to exercise its discretionary voting authority with respect to,
any particular matter. Once a quorum of the stockholders is established, the
Directors standing for election (Proposal 1) must be elected by a plurality of
the votes cast; the ratification of the selection of auditors (Proposal 2) and
approval of the stock grant plan for nonemployee directors (Proposal 3) must be
approved by holders of a majority of the shares of the Company's common stock
present in person or represented by proxy. In the tabulation of votes on each
Proposal, shares represented at the Annual Meeting, in person or by proxy, that
either abstain from voting on Proposal 2 or 3 or are represented by a proxy
lacking authority to vote on either of those Proposals will have the same
effect as shares voted against the Proposal.
Votes at the 1994 Annual Meeting will be tabulated by two employees of
Chemical Bank, the Company's Transfer Agent, to be named by Chemical Bank to
serve as inspectors of election.
SOLICITATION
The Company will bear the cost of solicitation of proxies. In addition to the
use of the mails, proxies may be solicited by officers and regular employees of
the Company, personally or by telephone or telegraph,
<PAGE>
and the Company may reimburse persons holding shares in their names or those of
their nominees for their expenses in sending soliciting material to their
principals.
CHANGE OF CONTROL OF COMPANY
On November 15, 1993, AMAX Inc. ("Amax"), a New York corporation which owned
approximately 68% of the Company's outstanding common stock, was merged with
and into Cyprus Minerals Company, a Delaware corporation (the "Cyprus Amax
Merger"). The merged company was renamed Cyprus Amax Minerals Company ("Cyprus
Amax"). Immediately prior to the Cyprus Amax Merger, Amax distributed 21.8
million shares (approximately 28%) of the Company's common stock (together with
all of the outstanding shares of common stock of Alumax Inc., a Delaware
corporation that controlled Amax's aluminum business) in a distribution to its
stockholders. As a result of the Cyprus Amax Merger, and after giving effect to
the prior stock distribution by Amax, Cyprus Amax acquired approximately 31.3
million shares of the Company's common stock, which constitutes approximately
40% of the outstanding common shares of the Company.
CHANGE IN MANAGEMENT OF COMPANY
Since the Cyprus Amax Merger, senior management of the Company has been
changed. Milton H. Ward, Chairman of the Board, President and Chief Executive
Officer of Cyprus Amax, became Chairman of the Board, President and Chief
Executive Officer of the Company in mid-November 1993. On February 1, 1994,
Roger A. Kauffman was appointed Senior Vice President and Chief Operating
Officer of the Company. Mr. Kauffman came to the company from Hecla Mining
Company, where he had been Vice President-Industrial Minerals since 1986. Mr.
Kauffman, who has developed low-cost, highly efficient mining operations, is
charged with improving the Company's operating performance.In January 1994,
Mark A. Lettes, former Vice President and Treasurer of the Company, was named
the new Chief Financial Officer. Mr. Lettes will be responsible for the
Company's hedging activities and obtaining financing for the Company's
development projects.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
As of March 1, 1994, the following is, to the knowledge of the Company, the
only person (including any "group" as that term is used in Section 13(d)(3) of
the Securities Exchange Act of 1934) who is the beneficial owner of more than
5% of the Company's common stock:
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE PERCENT
OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP OF CLASS
------------------- ----------------------- --------
<S> <C> <C>
Cyprus Amax.................................
9100 East Mineral Circle 31,313,709 shares 40.0%
Englewood, Colorado 80112 Indirect
</TABLE>
SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS
As of March 1, 1994, the following table sets forth the amount of all equity
securities of the Company and Cyprus Amax that are beneficially owned by each
Director of the Company, each of the executive officers named in the Summary
Compensation Table on page 11, Messrs., Kauffman and Lettes and all Directors
and executive officers of the Company as a group. The table segregates shares
held from those beneficially owned through ownership of options to purchase
shares. A person is considered to "beneficially own" any shares (i) over which
such person exercises sole or shared voting or investment power or (ii) of
which such person has the right to acquire beneficial ownership at any time
within 60 days (e.g., through the exercise of employee stock options). Unless
otherwise indicated, each person has sole voting and investment power with
respect to the shares set opposite his name. None of the Directors or officers
of the Company beneficially own any shares of Cyprus Amax's $4.00 Series A
Convertible Preferred Stock.
2
<PAGE>
<TABLE>
<CAPTION>
OPTIONS ON
NUMBER OF OPTIONS ON AMAX NUMBER OF CYPRUS AMAX
SHARES OF GOLD COMMON STOCK SHARES OF COMMON STOCK
AMAX GOLD PERCENT EXERCISABLE CYPRUS AMAX PERCENT EXERCISABLE
COMMON OF WITHIN 60 DAYS COMMON OF WITHIN 60 DAYS
NAME OF BENEFICIAL OWNER STOCK CLASS OF 3/1/94 STOCK CLASS OF 3/1/94
- ------------------------ --------- ------- ----------------- ----------- ------- --------------
<S> <C> <C> <C> <C> <C> <C>
Allen Born........................ 10,138 * -- 20,648(/1/) * 75,461
Gerald J. Malys................... 2,000 * -- 85,660(/1/) * 78,000
Rockwell A. Schnabel.............. -- (/2/) -- -- 5,500 * --
Vernon F. Taylor, Jr.............. 750 * -- -- -- --
Milton H. Ward.................... 10,000 * -- 237,615(/1/) * 450,000
Russell L. Wood................... 4,199(/3/) * -- -- -- --
Harry B. Carson................... 5,297(/4/) * 20,000 -- -- --
Richard B. Esser.................. 7,517(/4/) * 6,000 5,000 -- --
Timothy J. Haddon................. 2,590(/4/) * -- 1,860 -- --
Paul J. Hemschoot, Jr............. 3,927(/4/) * 6,000 -- -- --
Marvin K. Kaiser.................. -- -- 15,000(/5/) -- -- --
Roger A. Kauffman................. -- -- -- -- -- --
Mark A. Lettes.................... 362(/4/) * 8,000 -- -- --
Neil K. Muncaster................. 3,705(/4/) * 15,000 -- -- --
All Directors and Executive
Officers as a group
(16 persons)..................... 50,667(/4/) * 101,000 356,283(/1/) * 603,461
</TABLE>
- --------
* Less than 1%
(1) The total shares shown for all directors and executive officers as a group
include the following for Messrs. Ward and Malys: (i) stock held in the
Employee Savings Plan of 1,295 shares for Mr. Ward and 3,182 shares for
Mr. Malys, and; (ii) stock held in the Employee Stock Ownership Plan of
369 shares for Mr. Malys. The total shares shown for all directors and
executive officers as a group also include 1,463 shares of Cyprus Amax
common stock held for Mr. Born in the AMAX Inc. Thrift Plan for Salaried
Employees.
(2) Mr. Schnabel purchased 10,000 shares of the Company's common stock on March
7, 1994, after being named a director.
(3) Includes shares held under the Directors Deferred Compensation Plan
referred to on page 7.
(4) The total shares shown include the following number of shares held
indirectly through the Company's Thrift Plan as of March 1, 1994: Timothy
J. Haddon, 610 shares; Paul J. Hemschoot, Jr., 3,764 shares; Mark A.
Lettes, 62 shares; Neil K. Muncaster, 2,705 shares; Harry B. Carson, 5,297
shares; Richard B. Esser, 5,062 shares and all directors and executive
officers as a group, 17,682 shares.
(5) These options expired as of March 31, 1994, as a result of Mr. Kaiser's
termination of employment with the Company.
1. ELECTION OF DIRECTORS
The Company currently has six Directors, each of whom is elected for a one-
year term at each annual meeting. At the 1994 Annual Meeting, the following
nominees have been recommended for election by the Board of Directors of the
Company to hold office for one year or until their successors are duly elected
and qualified.
Messrs. Allen Born
Gerald J. Malys
Rockwell A. Schnabel
Vernon F. Taylor, Jr.
Milton H. Ward
Russell L. Wood
3
<PAGE>
It is not anticipated that any of these nominees will become unavailable for
any reason, but if that should occur before the Annual Meeting, the persons
named in the enclosed proxy reserve the right to substitute another person of
their choice as nominee in his place or to vote for such lesser number of
Directors as may be prescribed by the Board of Directors in accordance with the
Company's Restated Certificate of Incorporation and By-Laws.
The six nominees receiving the largest number of votes by the holders of
common stock present at the annual meeting in person or represented by proxy
will be elected. In accordance with Securities and Exchange Commission
regulations, the enclosed proxy card provides stockholders with an opportunity
to grant to or withhold from the appointees named thereon the authority to vote
for the election of any individual named above. Only proxies marked "For" the
nominees or indicating no preference whatsoever will be counted as "votes" in
determining the election of Directors, although the Company will tabulate any
instructions withholding authority to vote for one or more of the nominees.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
FOREGOING NOMINEES AND, UNLESS A STOCKHOLDER GIVES INSTRUCTIONS ON THE PROXY
CARD TO THE CONTRARY, THE APPOINTEES NAMED THEREON INTEND TO SO VOTE.
INFORMATION CONCERNING DIRECTORS AND NOMINEES
ALLEN BORN* Director since 1987
Chairman and Chief Executive Officer of Alumax Inc. Age 60
(aluminum)
Co-Chairman of the Board of Cyprus Amax
(mining and minerals)
Mr. Born has been Chairman of the Board and Chief Executive Officer of Alumax
Inc. since November 15, 1993. He has also been a Director and Co-Chairman of
Cyprus Amax since November 15, 1993. Prior to that Mr. Born was Chairman of the
Board and Chief Executive Officer of Amax and Chairman of the Board of the
Company for more than five years. From June 1985 to July 1991 Mr. Born was also
President and Chief Operating Officer of Amax. Mr. Born is also a Director of
Canada Tungsten Inc., which is an indirect 48% subsidiary of Cyprus Amax, and
the American Mining Congress.
- --------
* Chairman of the Compensation Committee
GERALD J. MALYS* Director since 1993
Senior Vice President and Chief Financial Officer of Cyprus Amax Age 49
(mining and minerals)
Mr. Malys has been Senior Vice President and Chief Financial Officer of Cyprus
Amax since July 1989. Prior to that he was Senior Vice President Financial and
Information Services for Cyprus Amax since August 1988.
- --------
* Member of the Compensation Committee
ROCKWELL A. SCHNABEL Director since 1994
Partner of Trident Capital L.P. Age 57
(finance)
Ambassador Schnabel served as Deputy Secretary of the United States Department
of Commerce in 1991 and 1992; Acting Secretary of Commerce from December 1991
to March 1992; and Under Secretary of Commerce in 1989 and 1990. Prior to that
he served as the United States Ambassador to the Republic of Finland from 1986
to 1989. Ambassador Schnabel is also a Director of Cyprus Amax.
4
<PAGE>
VERNON F. TAYLOR, JR.* Director since 1987
President, Westhoma Oil Company Age 78
(oil and gas)
Mr. Taylor has been President and a Director of Westhoma Oil Company and
Peerless, Inc. for more than five years. He is also a Director of Colorado
National Bankshares, Inc.
- --------
* Chairman of Audit Committee and Nominating Committee
MILTON H. WARD Director since 1993
Chairman, President and Chief Executive Age 61
Officer of the Company
Co-Chairman, Chief Executive Officer
and President of Cyprus Amax
(mining and minerals)
Mr. Ward has been Chairman of the Board, President and Chief Executive Officer
of the Company since November 1993. He is also Chairman, Chief Executive
Officer and President of Cyprus Amax since May 1992 (Co-Chairman since November
1993). Mr. Ward served as Director, President, and Chief Operating Officer of
Freeport-McMoRan Inc. from 1983 until May 1992 and Chairman and Chief Executive
Officer of Freeport McMoRan Copper & Gold Inc. from 1984 until May 1992. Mr.
Ward is Vice Chairman and a Director of the American Mining Congress.
RUSSELL L. WOOD* Director since 1987
Mining Consultant Age 66
Mr. Wood has been an independent businessman and mining consultant since May
1989. From May 1990 to February 1992 he also served as President and Chief
Executive Officer of Asamera Minerals Inc. Prior to May 1989 Mr. Wood was
President of Copper Range Company since November 1985. He is currently a member
of the Board of Trustees of the Colorado School of Mines.
- --------
* Member of Audit Committee and Nominating Committee
OTHER INFORMATION CONCERNING DIRECTORS
ELECTION
Messrs. Born, Taylor and Wood were elected by the holders of common stock of
the Company at the annual meeting of stockholders held on May 11, 1993, for a
term of one year and until their successors are duly elected and qualified.
Messrs. Malys and Ward were appointed by unanimous written consent of the
Company's remaining directors to fill two vacancies on the Board which became
effective with the Cyprus Amax Merger on November 15, 1993. (See CHANGE OF
CONTROL OF COMPANY on p. 2 of this Proxy Statement.) Mr. Schnabel was appointed
to fill a vacancy on the Board at a meeting of the Board of Directors on March
1, 1994.
5
<PAGE>
COMPLIANCE WITH EXCHANGE ACT SECTION 16(A)
The Company's officers and directors and persons who are beneficial owners of
more than 10% of the Company's common stock (10% beneficial owners) are
required to file reports of their holdings and transactions in the Company's
common stock with the Securities and Exchange Commission ("SEC") and to furnish
the Company with copies of such reports. Based primarily upon its review of the
copies it has received and upon written representations it has obtained from
some of these persons, the Company believes that during the fiscal year ended
December 31, 1993, the Company's officers, directors and 10% beneficial owners
have complied with all such filing requirements except as set forth in this
paragraph. Each of Messrs. Born, Haddon and Carson made one late Form 4 filing
in 1993 with respect to one transaction by each of them in the Company's common
stock. Mr. Born is a director of the Company, Mr. Haddon is a former director
and former President and Chief Executive Officer of the Company, and Mr. Carson
is a former officer of the Company.
COMMITTEES OF THE BOARD OF DIRECTORS
(i) Audit Committee. The Audit Committee is composed of Messrs. Taylor and
Wood, with Mr. Taylor being the Chairman of the Committee. The principal
functions of this Committee are to recommend to the Board of Directors the
independent accounting firm that will conduct the annual audit of the Company's
accounts, to review the nature and scope of the audit and the financial
organization and accounting practices of the Company, as well as the
qualifications and performance of its internal auditors and its past or
proposed auditing firm. In addition, the Committee recommends to the Board of
Directors policies concerning avoidance of employee conflicts of interest and
avoidance of conflicts of interest between the Company and Amax (now Cyprus
Amax). It also reviews the administration of such policies. During 1993, the
Audit Committee met three times.
(ii) Nominating Committee. The Nominating Committee normally consists of
three directors, none of whom may be an officer of the Company or of any
affiliate of the Company. Messrs. Taylor and Wood currently comprise the
Nominating Committee, with Mr. Taylor being the Chairman. The principal
function of the Nominating Committee is to recommend to the Board prospective
members of the Board of Directors. The Nominating Committee met in January 1994
to nominate Rockwell A. Schnabel to fill a vacancy on the Board. The Committee
will consider candidates for Board membership suggested by the stockholders.
Suggestions for candidates, accompanied by biographical material for
evaluation, may be sent to the Secretary of the Company at its principal
executive offices. Individuals suggested as candidates should have attained a
position of leadership in the candidate's field of endeavor and have
demonstrated the ability to exercise sound business judgment. A candidate must
also indicate a willingness to serve on the Board and attend scheduled Board
and Committee meetings.
(iii) Compensation Committee. The Compensation Committee normally consists of
three directors and is responsible for establishing, implementing and
monitoring the Company's policies and plans for executive development,
succession planning and compensation of officers and key employees of the
Company. The Compensation Committee administers the Company's stock option plan
for officers and employees, as well as the performance share plan for officers
and certain key employees. Messrs. Born and Malys are on the Compensation
Committee with Mr. Born being the Chairman. The Compensation Committee does not
determine the compensation of any of its members and none of its members are
eligible to participate in the Company's stock option plan for officers and
employees or the Company's performance share plan. The Compensation Committee
did not meet during calendar year 1993, but took certain action by unanimous
written consent in March and April 1994.
6
<PAGE>
During 1993, the Board of Directors met six times. All of the Directors
attended at least 83% of the aggregate of (a) the total number of Board of
Directors meetings held during the year and (b) the total number of meetings of
the Committees on which they served in 1993.
DIRECTORS' COMPENSATION
For their services, Directors who are not officers or employees of the
Company or of Cyprus Amax receive $10,000 per year and $1,000 per Board meeting
attended. Members of Board Committees are compensated at the rate of $600 per
Committee meeting attended, while Committee Chairmen receive $1,000 per meeting
attended. Directors who are officers or employees of Cyprus Amax (other than
Mr. Born who is Co-Chairman of Cyprus Amax) have not received fees or other
compensation from the Company for serving on the Board of Directors or
attending Board or Committee meetings. They may, however, be eligible to
participate in the Company's 1992 Stock Option Plan and Performance Share Plan
in the case of Mr. Ward or in the proposed stock grant plan for nonemployee
directors (if approved by the stockholders) in the case of Mr. Malys.
DIRECTORS' DEFERRED COMPENSATION PLAN
The Company has a Deferred Compensation Plan for Directors (the "Deferred
Compensation Plan"), whereby any Director who is not an employee of the Company
or of Cyprus Amax may elect to defer all or a portion of his director's fees.
Amounts deferred under the Deferred Compensation Plan are credited to a
participant's account in the form of a right to receive shares of the Company's
common stock at the closing market price on the Composite Tape of the New York
Stock Exchange on the date such participant would have received such
compensation had a deferral election not then been in effect.
Under the Deferred Compensation Plan, each such Director may elect, prior to
the beginning of a Plan Year (as defined in the Plan), to defer all or a
portion of his fees for such Plan Year. An election to defer compensation may
be revoked or changed for future Plan Years if such revocation or change is
made at least 30 days prior to the beginning of the Plan Year to which it
relates. Additional shares are credited to such participants as and to the
extent dividends are paid on the Company's common stock.
A distribution will be made to a participant upon termination of his
directorship or, if he so elects, on any January 1 occurring thereafter. Such
distribution will consist of the number of whole shares credited to his account
on the date of such distribution and a cash payment for any fractional shares.
Mr. Wood has elected to participate in the Deferred Compensation Plan. During
1993, a total of 1,015 shares of the Company's common stock were credited to
Mr. Wood's account pursuant to the Deferred Compensation Plan. In addition a
total of 9,758 shares of the Company's common stock was paid to two directors
who resigned from the Board during 1993.
PROPOSED STOCK GRANT PLAN FOR NONEMPLOYEE DIRECTORS
In order to increase the Company's ability to attract and retain outside
directors of the highest caliber and experience, in March 1994 the Board of
Directors adopted, subject to review and approval by the Compensation Committee
of the Board (which approval was subsequently given) and approval by the
stockholders of the Company, a Stock Grant Plan for Nonemployee Directors of
the Company ("the Directors' Stock Grant Plan"). See Proposal 3 on p. 20 of
this Proxy Statement. The affirmative vote of a majority of the shares of the
Company's common stock present and eligible to vote at the Annual Meeting will
be required for approval of the Directors' Stock Grant Plan. The full text of
the Directors' Stock Grant Plan is set forth as Exhibit A to this Proxy
Statement. No shares have been issued or reserved for issuance under the
Directors' Stock Grant Plan pending stockholder approval of such plan.
7
<PAGE>
TRANSACTIONS WITH AMAX AND CYPRUS AMAX
Prior to the Cyprus Amax Merger on November 15, 1993, Amax owned
approximately 68% of the Company's outstanding common stock and provided a
variety of services to the Company, either directly or through wholly-owned
subsidiaries, under agreements, most of which were entered into in connection
with the formation and initial public offering of shares of the Company's
common stock in 1987. Mr. Born, who was Chairman and Chief Executive Officer of
Amax prior to the Cyprus Amax Merger, is currently Co-Chairman of Cyprus Amax.
Mr. Haddon and one other Company director, who resigned in conjunction with the
Cyprus Amax Merger, were also officers of Amax, and two of the other directors
of the Company, who resigned in conjunction with the Cyprus Amax Merger, were
also directors of Amax. Messrs. Malys and Ward are officers of Cyprus Amax and
Messrs. Born, Schnabel and Ward are directors of Cyprus Amax.
INDEBTEDNESS
From time to time the Company and Amax advanced to each other excess funds
not then required for the conduct of the lender's business, which advances bore
interest at rates determined by reference to then prevailing interest rates.
During 1993, the largest amount of indebtedness outstanding was $25.3 million
owed to Amax, of which $24.7 million was outstanding and owed to Cyprus Amax as
of December 31, 1993. The annualized interest rate on outstanding amounts owed
to Amax or Cyprus Amax during 1993 was 3.1%. As of March 15, 1994, the Company
had outstanding advances from Cyprus Amax of $24.7 million under a demand
promissory note bearing interest at the sum of the Effective Federal Funds Rate
(as defined) plus 3/16%. In February 1994 the Company's Board of Directors
approved the purchase by Cyprus Amax of three million shares of the Company's
common stock as repayment of $20.7 million of outstanding amounts under the
demand promissory note. This share purchase is conditioned upon receipt of
stockholder approval of this transaction and the financing arrangement
described in the following paragraph.
In February 1994, a commitment letter was signed between the Company and
Cyprus Amax to provide the Company with a $100 million convertible line of
credit. The outstanding indebtedness under this line of credit may be repaid by
the Company issuing a like amount of convertible preferred stock, which in turn
can be converted into Company common stock at $8.265 per share, which
represents a 20% premium to the ten-day average closing price of the Company's
common stock immediately prior to the date the commitment letter was signed. In
addition, the Company will have the right to convert the convertible preferred
stock into Company common stock at a maximum price of $8.265 per share and a
minimum price of $5.854 per share. Cyprus Amax will have the right to replace
the line of credit and any outstanding indebtedness and/or preferred stock with
the purchase of $100 million of Company common stock at a purchase price of
$8.265 per share, which represents approximately 12.1 million shares of the
Company's common stock. The Company has been informed that the New York Stock
Exchange will require approval of this financing arrangement, as well as the
share purchase described in the preceding paragraph, by the Company's
stockholders as a condition to listing the additional shares of common stock
which may be issued in such transaction. The Company intends to seek such
approval later in the year using a separate proxy solicitation or consent
solicitation statement.
As of March 18, 1994, Cyprus Amax had also provided guarantees for
approximately $54 million of the Company's outstanding indebtedness and letters
of credit.
NON-COMPETITION AGREEMENT
The Company had a non-competition agreement (the "Non-Competition Agreement")
with Amax, which, subject to certain exceptions, prohibited Amax and companies
it controlled (other than Canada
8
<PAGE>
Tungsten, Inc.) from competing with the Company in the business of acquiring,
exploring for, or developing gold and silver properties, or mining, milling or
concentrating gold and silver in the United States, Canada and the North Island
of New Zealand. This agreement expired by its terms as of the effective date of
the Cyprus Amax Merger. A new agreement is under negotiation with Cyprus Amax.
See AGREEMENTS WITH CYPRUS AMAX on p. 10 of this Proxy Statement.
MANAGEMENT SERVICES AGREEMENT
Pursuant to the terms of a management services agreement (the "Management
Services Agreement") entered into at the time of the Company's formation, Amax
agreed to provide a variety of managerial and other services to the Company on
a full cost-reimbursement basis. The agreement is terminable by the Company or
by Cyprus Amax (as successor to Amax) as of the end of any month on 180 days'
prior written notice. For fiscal year 1993, amounts charged to the Company by
Amax pursuant to the Management Services Agreement were approximately $5.2
million, including the costs of insurance coverage for the Company and employee
benefits provided to the Company's officers and employees under benefit and
pension plans maintained by Amax through the date of the Cyprus Amax Merger.
EXPLORATION SERVICES AGREEMENT. Pursuant to an exploration services agreement
(the "Exploration Services Agreement") entered into at the time of the
Company's formation, Amax Exploration, Inc., a wholly owned subsidiary of Amax,
agreed to provide exploration services for the Company. The agreement is
effective until terminated by either party with at least 180 days' prior
notice. During 1993, the Company conducted its exploration programs through
wholly-owned subsidiaries of the Company using its own personnel. Effective
January 1, 1994, in order to reduce costs and realize some the synergies from
its new affiliation with Cyprus Amax, the Company transferred most of its
exploration personnel to Cyprus Amax, but retained its Vice President in charge
of exploration. In the future, Cyprus Amax geologists will conduct the
Company's exploration for gold, either under the exploration joint venture
agreement described below under AGREEMENTS WITH CYPRUS AMAX or otherwise.
PUT AND CALL AGREEMENT. The Company and Amax entered into a put and call
agreement (the "Put and Call Agreement") under which Cyprus Amax (as successor
to Amax) may sell shares of Amax Gold common stock to the Company upon exercise
of certain common stock purchase warrants (the "Warrants") issued in connection
with the acquisition of the Fort Knox project in 1992. The Put and Call
Agreement has been approved by the Company's independent directors. A summary
of the terms of the Put and Call Agreement is set forth below:
(i) Put Option. Under the Put and Call Agreement, Cyprus Amax has a put
option (the "Put Option") whereby, upon exercise of any Warrants, Cyprus
Amax may require the Company to purchase a number of shares of Amax Gold
common stock from Cyprus Amax at the Exercise Price (the "Warrant Exercise
Price"), as determined pursuant to the provisions of the Warrant Agreement
dated January 6, 1992, entered into between the Company and Manufacturers
Hanover Trust Company as Warrant Agent, such number to be equal to the
number of shares of Amax Gold common stock which the Company is required to
issue upon exercise of such Warrants. Pursuant to the Warrant Agreement,
the initial Warrant Exercise Price is $21.00 per share and is subject to
customary anti-dilution adjustments upon the occurrence of, among other
things, stock dividends, stock splits, reclassifications, mergers and
similar events.
(ii) Call Option. In the event Cyprus Amax fails to exercise the Put
Option, the Company will have a call option (the "Call Option") whereby it
may require Cyprus Amax to sell shares of Amax
9
<PAGE>
Gold common stock (to the extent then owned by Cyprus Amax) to the Company
equal to the number of shares of Amax Gold common stock which the Company
is required to issue upon exercise of such Warrants at a price equal to the
Warrant Exercise Price plus two-thirds of the excess of (x) the market
price per share of Amax Gold common stock over (y) the Warrant Exercise
Price.
AGREEMENTS WITH CYPRUS AMAX
In connection with the change of ownership of the Company resulting from the
Cyprus Amax Merger, the Company is in the process of negotiating various
agreements with Cyprus Amax. These include a services agreement, a gold
exploration joint venture agreement, a non-competition agreement and the $100
million financing arrangement described above under INDEBTEDNESS. Cyprus Amax
may also sell to the Company certain of its gold exploration and development
properties, subject to the approval of each company's Board of Directors and
compliance with stock exchange and possibly other regulatory requirements
regarding related party transactions. The services agreement would provide the
Company with certain Cyprus Amax general and administrative services in order
to take advantage of the synergies between the two companies and is expected to
provide both companies with cost savings. The new exploration joint venture
agreement would result in the two companies pooling their efforts to discover
and develop gold properties, with Cyprus Amax providing 75% of initial funding
for newly identified gold exploration targets. This joint venture arrangement
would have the benefits of potentially broadening the Company's geographic
reach, sharing key personnel, reducing costs and sharing the high risks
associated with exploration. Exploration projects that the Company held prior
to the Cyprus Amax Merger will continue to be evaluated entirely by the
Company. The non-compete agreement would define the terms under which either
company would develop and ultimately produce minerals that would be in
competition with the other party. Mr. Ward is compensated by Cyprus Amax and a
portion of his base salary and benefits is charged back to the Company in
proportion to the amount of his time spent on Company business.
Until the new services agreement and gold exploration joint venture agreement
are concluded, the existing Management Services Agreement and Exploration
Services Agreement described above will remain in effect with Cyprus Amax
succeeding to the rights and obligations of Amax under such agreements. The Put
and Call Agreement described above will also remain in place, with Cyprus Amax
succeeding to the rights and obligations of Amax under such agreement.
INFORMATION CONCERNING EXECUTIVE OFFICERS' COMPENSATION
The following compensation table summarizes the compensation paid during each
of the last three fiscal years to Milton H. Ward, who has been the Company's
Chief Executive Officer since mid-November 1993; Timothy J. Haddon, who was the
Company's Chief Executive Officer until mid-November 1993; and the next four
most highly compensated executive officers who were serving as executive
officers at the end of 1993, based on salary and bonus earned for fiscal year
1993. As reflected in the table, the Company was not
charged with any compensation which Cyprus Amax paid to Mr. Ward for the period
from mid-November 1993 through December 31, 1993. Also included in the table is
Marvin K. Kaiser, who was the Company's Chief Financial Officer until December
8, 1993, and whose employment with the Company terminated on December 31, 1993.
Roger A. Kauffman, Senior Vice President and Chief Operating Officer of the
Company since February 1994, and Mark A. Lettes, Vice President and Chief
Financial Officer of the Company since January 1994, are not included in the
table since they did not assume their positions until 1994.
10
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------------- --------------------
AWARDS PAYOUTS
-------- ---------
LONG-TERM
INCENTIVE
NAME AND OTHER ANNUAL OPTIONS/ PLAN ALL OTHER
PRINCIPAL FISCAL SALARY BONUS COMPENSATION SARS PAYOUTS COMPENSATION
POSITION YEAR $ $(A) $(B) # $ $(C)(D)
--------- ------ ------- ------ ------------ -------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Milton H. Ward.......... 1993 0 0 0 0 0 0
President and Chief
Executive Officer
Timothy J. Haddon....... 1993 204,750(E) 80,528 0 0 347,725(F) 879,682
Former President and
Chief 1992 204,750 69,086 0 50,000(G) 39,015(H) 10,488
Executive Officer 1991 195,000 40,000 * 27,150(I) 0 *
Paul J. Hemschoot, Jr. . 1993 140,700 36,892 0 0 0 13,097
Vice President, Sec'y 1992 140,700 25,000 0 6,000(G) 0 4,230
& General Counsel 1991 134,000 18,750 * 2,000(I) 0 *
Marvin K. Kaiser........ 1993 131,000 34,348 0 0 103,295(F) 397,817
Former Vice President & 1992 131,000 30,000 0 15,000(G) 0 5,904
Chief Financial Officer 1991 126,000 19,000 * 9,000(I) 0 *
Neil K. Muncaster....... 1993 129,000 33,824 0 0 108,445(F) 63,148
Vice President 1992 129,000 30,000 0 15,000(G) 0 5,814
1991 114,154 20,000 * 12,000(I) 0 *
Harry B. Carson......... 1993 125,750 34,086 0 0 111,186(F) 72,299
Former Vice President(J) 1992 121,500 36,400 0 20,000(G) 0 5,476
1991 112,500 27,000 * 12,000(I) 0 *
Richard B. Esser........ 1993 115,500 30,284 0 0 0 34,574
Vice President 1992 115,500 25,000 0 6,000(G) 0 5,205
1991 110,000 13,200 * 2,000(I) 0 5,243
</TABLE>
- --------
* Under the transition rules of the SEC, no disclosure is required.
(A) Includes 1993 payments made by Cyprus Amax under change of control
provisions that were triggered by the Cyprus Amax Merger under the Amax
Annual Incentive Compensation Plan.
(B) Perquisites are below mandatory reporting levels and are therefore not
included.
(C) 1993 amounts include payments made by Cyprus Amax of $686,340 to Mr.
Haddon and $344,823 to Mr. Kaiser under Amax corporate separation policies
as described under EMPLOYMENT POLICIES, and payments made by Cyprus Amax
for outstanding Amax stock options which were triggered as a result of the
Cyprus Amax Merger and resulting change of control, representing $183,460
for Mr. Haddon; $13,097 for Mr. Hemschoot; $47,559 for Mr. Kaiser; $57,343
for Mr. Muncaster; $66,640 for Mr. Carson and $29,376 for Mr. Esser. See
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR
VALUES on p. 13. 1993 amounts also include matching contributions to the
Amax Thrift Plan for Salaried Employees in the following amounts: $8,282
for Mr. Haddon; $5,435 for Mr. Kaiser; $5,805 for Mr. Muncaster; $5,659
for Mr. Carson and $5,198 for Mr. Esser.
(D) Amax carried split-dollar life insurance on Mr. Haddon prior to November
15, 1993, and the Company has carried it since that time. The taxable
income under this policy during 1993 was $1,600, which is included in the
amount shown in this column as compensation to Mr. Haddon.
(E) Mr. Haddon's employment with the Company was terminated as of November 30,
1993. A sum equal to his salary for December 1993 was paid by the Company
to Mr. Haddon under a consulting agreement and is included in his 1993
salary amount.
(F) Represents a payout under change of control provisions of the Amax
Performance Share Plan (Amax PSP) that were triggered by the Cyprus Amax
Merger. This payout was made 100% in cash by Cyprus Amax.
(G) Options to purchase shares of the Company's common stock awarded under the
Company's 1992 Stock Option Plan.
(H) Represents an Amax PSP payout made 70% in stock and 30% in cash for the
three-year performance period ending in 1992, based on Amax total return
to shareholders (stock price movement and dividends paid) relative to a
weighted group of 13 competitor companies in the aluminum, gold, coal and
oil & gas industries with discretionary adjustment by the Amax Human
Resources and Compensation Committee (the "Amax Committee").
(I) Options to purchase shares of Amax common stock awarded under the Amax
1988 Amended and Restated Stock Option Plan. See Note (C) for 1993
payments made by Cyprus Amax under such options.
(J) Mr. Carson's employment with the Company terminated on March 31, 1994.
11
<PAGE>
OPTION/SAR GRANTS IN THE LAST FISCAL YEAR
The following table sets forth certain information concerning stock options
conditionally granted during 1992 by the Company under the Company's 1992
Stock Option Plan (the "Stock Option Plan") to the Chief Executive Officer and
each of the five other most highly compensated executive officers of the
Company. The grant of these options was conditional upon the Stock Option Plan
being approved by holders of a majority of the shares of the Company's common
stock which occurred at the Company's Annual Meeting on May 11, 1993. THE
POTENTIALLY REALIZABLE VALUE AT ASSUMED ANNUAL RATES OF STOCK PRICE
APPRECIATION FOR THE TERM OF THE OPTIONS SHOWN BELOW ARE PRESENTED PURSUANT TO
SEC RULES. THE COMPANY IS NOT AWARE OF ANY MODEL OR FORMULA WHICH WILL
DETERMINE WITH REASONABLE ACCURACY A PRESENT VALUE FOR STOCK OPTIONS BASED ON
FUTURE UNKNOWN FACTORS. THE ACTUAL AMOUNT, IF ANY, REALIZED UPON THE EXERCISE
OF STOCK OPTIONS WILL DEPEND UPON THE MARKET PRICE OF THE COMPANY'S COMMON
STOCK RELATIVE TO THE EXERCISE PRICE PER SHARE OF COMMON STOCK OF THE STOCK
OPTION AT THE TIME THE STOCK OPTION IS EXERCISED. THERE IS NO ASSURANCE THAT
THE POTENTIALLY REALIZABLE VALUES OF STOCK OPTIONS REFLECTED IN THIS TABLE
ACTUALLY WILL BE REALIZED. The options granted to Mr. Haddon and Mr. Kaiser
have expired by their terms as a result of termination of their employment
with the Company. No other stock options were granted by the Company during
1993 under the Stock Option Plan.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------------------------------------------
POTENTIAL REALIZABLE
VALUE AT ASSUMED
% OF TOTAL ANNUAL RATES OF
STOCK STOCK PRICE
STOCK OPTIONS/SARS APPRECIATION FOR
OPTIONS/ GRANTED EXERCISE OR OPTION TERM
SARS GRANTED TO EMPLOYEES BASE PRICE EXPIRATION ---------------------
NAME (#)(A) IN FISCAL YEAR(B) ($/SHARE) DATE(C) 5%($) 10%($)
- ---- ------------ ----------------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Timothy J. Haddon....... 50,000(D) 15.83% $8.75 12/02/02 $ 275,141 $ 697,260
Paul J. Hemschoot, Jr... 6,000 1.90% $8.75 12/02/02 $ 33,016 $ 83,671
Marvin K. Kaiser........ 15,000(D) 4.75% $8.75 12/02/02 $ 82,542 $ 209,178
Neil K. Muncaster....... 15,000 4.75% $8.75 12/02/02 $ 82,542 $ 209,178
Harry B. Carson......... 20,000 6.33% $8.75 12/02/02 $ 110,056 $ 278,904
Richard B. Esser........ 6,000 1.90% $8.75 12/02/02 $ 33,016 $ 83,671
</TABLE>
- --------
(A) All options are granted with an alternative settlement method under which,
in the Company's discretion, the option holder may exercise the option as
if it were a stock appreciation right (SAR).
(B) Based on 315,825 options granted.
(C) Options granted in 1992 became vested on the effective date of the Cyprus
Amax Merger as a result of a change in control of the Company (as defined
in the Stock Option Plan). Vested options are exercisable for ten years
after the date of grant, subject to earlier termination in certain events
related to termination of employment.
(D) The options granted to Mr. Haddon and Mr. Kaiser have expired pursuant to
their terms as a result of termination of their employment with the
Company.
12
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
The following table sets forth information concerning the exercise during
1993 of stock options granted to the former Chief Executive Officer of the
Company and the next five most highly compensated executive officers under the
Amax 1988 Amended and Restated Stock Option Plan (the "1988 Amax Plan") and
the Cyprus Amax and Company options remaining unexercised at December 31,
1993. As a result of the change of control resulting from the Cyprus Amax
Merger, all of the outstanding Amax and Company options became immediately
vested. Those Amax options that were in-the-money were paid out by Cyprus Amax
in cash in November 1993 and the remaining Amax options were converted into
exercisable Cyprus Amax options at a factor of .9522 per each Amax option. THE
VALUE OF UNEXERCISED CYPRUS AMAX IN-THE-MONEY STOCK OPTIONS AT DECEMBER 31,
1993 SHOWN BELOW IS PRESENTED PURSUANT TO SEC RULES. THE ACTUAL AMOUNT, IF
ANY, REALIZED UPON EXERCISE OF A STOCK OPTION WILL DEPEND UPON THE MARKET
PRICE OF CYPRUS AMAX'S COMMON STOCK RELATIVE TO THE EXERCISE PRICE OF THE
STOCK OPTION AT THE TIME THE STOCK OPTION IS EXERCISED. THERE IS NO ASSURANCE
THAT THE VALUES OF UNEXERCISED IN-THE-MONEY STOCK OPTIONS REFLECTED IN THIS
TABLE WILL BE REALIZED. None of the unexercised Company stock options were in-
the-money at year end.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR
VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
WITH NUMBER OF UNEXERCISED
RESPECT TO SECURITIES CYPRUS AMAX
WHICH AMAX UNDERLYING IN-THE-
OPTIONS UNEXERCISED MONEY
WERE VALUE OPTIONS AT OPTIONS AT
EXERCISED REALIZED FY-END FY-END
NAME (1) ($)(1) (#)(2) ($)(3)
---- ---------- -------- ----------- -----------
EXERCISABLE EXERCISABLE
----------- -----------
<S> <C> <C> <C> <C>
Timothy J. Haddon................ 41,450 183,460 61,173 147
Paul J. Hemschoot, Jr............ 3,400 13,097 11,746 454
Marvin K. Kaiser................. 10,800 47,559 16,428 0
Harry B. Carson.................. 14,500 66,640 25,238 0
Neil K. Muncaster................ 12,000 57,343 15,000 0
Richard B. Esser................. 8,504(4) 29,376(4) 9,111 117
Total.......................... 90,654 397,475 138,696 718
</TABLE>
- --------
(1) The cash-out amount paid by Cyprus Amax per share of Amax common stock
subject to an Amax option was based on a formula equal to the greater of
(a) the average price of a share of Amax common stock prior to the
distribution to Amax shareholders of approximately 28% of the Company's
common stock and all of the shares of common stock of Alumax Inc. prior to
the Cyprus Amax Merger (see discussion under CHANGE IN CONTROL OF COMPANY)
or (b) the average price of the fractional share interests in Cyprus Amax
common stock, Alumax Inc. common stock and the Company's common stock
received by holders of Amax common stock as a result of the Cyprus Amax
Merger, minus the exercise price of the Amax option per share of Amax
common stock.
(2) Includes in each case options received as a result of the Cyprus Amax
Merger and options received under the Company's Stock Option Plan. See
OPTION/SAR GRANTS IN LAST FISCAL YEAR on page 12.
(3) At fair market value of $26.1875 per share based on an average of the high
and low sales prices of Cyprus Amax's common stock at December 31, 1993.
(4) In addition to a cash-out amount of $15,389 paid by Cyprus Amax to Mr.
Esser in November 1993 with respect to 5,500 Amax options, Mr. Esser
exercised 1,100 Amax options in August 1993, realizing $10,230, and
exercised 1,904 Cyprus Amax options in December 1993, realizing $3,757.
13
<PAGE>
PENSION AND BENEFITS
Retirement Plan for Salaried Employees. A Retirement Plan for Salaried
Employees of the Company and its subsidiaries (the "Pension Plan") was adopted
by the Board of Directors of the Company in October 1993, to be effective with
the Cyprus Amax Merger. The Pension Plan is a defined benefit retirement plan
with pensions paid in accordance with a formula based upon final pay and years
of service. It replaces a similar pension plan that Amax maintained under
which officers and employees participated prior to the Cyprus Amax Merger.
Officers and employees of the Company, as participants, become entitled to
accrued benefits under the Pension Plan after they complete five years of
continuous service to the Company and any of its subsidiaries. Accrued
benefits are determined on the basis of a participant's years of credited
service, which includes all continuous service prior to his or her normal
retirement date. The basic benefit formula provides an annual retirement
allowance equal to 1 7/8% of the average of the participant's three highest
annual rates of compensation prevailing on January 1 during any of the last 10
years of credited service multiplied by the number of years of credited
service up to and including 10 years, plus 1 3/4% of such average multiplied
by the number of years of credited service over 10 years, less certain
adjustments for Social Security benefits, with a minimum benefit of $21 per
month multiplied by the number of years of credited service. In those cases
where the amounts payable under the Pension Plan exceed the annual pension
limitations imposed by the Internal Revenue Code of 1986, as amended (the
"Code"), such excess will be paid from the Company's Excess Benefit Plan (the
"Excess Plan").
<TABLE>
<CAPTION>
ESTIMATED ANNUAL PENSION FOR
REPRESENTATIVE YEARS OF CREDITED SERVICE
HIGHEST THREE-YEAR ----------------------------------------
AVERAGE COMPENSATION 5 10 15 20 25 30 35
- -------------------- - -- -- -- -- -- --
<S> <C> <C> <C> <C> <C> <C> <C>
$100,000 $ 9,375 $18,750 $27,500 $ 36,250 $ 45,000 $ 53,750 $ 62,500
150,000 14,063 28,125 41,250 54,375 67,500 80,625 93,750
200,000 18,750 37,500 56,500 72,500 90,000 107,500 125,000
250,000 23,438 46,875 68,750 90,625 112,500 134,375 156,250
300,000 28,125 56,250 82,500 108,750 135,000 161,250 187,500
350,000 32,813 65,625 96,250 126,875 157,500 188,125 218,750
</TABLE>
At December 31, 1993, the years of credited service under the Pension Plan
for Messrs. Haddon, Hemschoot, Muncaster, Carson and Esser were 17 years, 19
years, 12 years, 16 years, and 24 years, respectively. For purposes of
determining benefits under the Pension Plan, covered compensation for these
individuals includes the amounts shown in the "Salary" and "Bonus" columns of
the Summary Compensation Table with certain minor adjustments. Mr. Ward does
not participate in the Company's Pension Plan, but is covered by the Cyprus
Amax Retirement Plan for Salaried Employees. On Mr. Kaiser's termination of
employment at December 31, 1993, he received a lump sum cash settlement of
$75,578 in lieu of pension benefits under the Company's Pension Plan.
The above table shows the estimated annual retirement benefits, before any
applicable offset for Social Security benefits, that would be payable to
participants in the Pension Plan at normal retirement (age 65) on a straight
life annuity basis. Optional forms of benefit payments are available. Benefits
payable under the Pension Plan are also subject to reduction to the extent
that participants receive payments pursuant to other Company-or Amax-sponsored
pension or retirement plans that have been suspended, discontinued or
otherwise terminated. As noted above, benefits under the Pension Plan are
limited to the extent prescribed by the Code, and any amounts in excess of
such limitations will be paid pursuant to the Excess Plan. Accordingly, the
amounts shown in the table reflect the aggregate of payments under both the
Pension Plan and the Excess Plan.
14
<PAGE>
EMPLOYMENT POLICIES
Under Amax corporate separation policies which were applicable to certain
Amax and subsidiary company executives, including Messrs. Haddon, Kaiser and
Carson, Cyprus Amax paid $686,340 to Mr. Haddon and $344,823 to Mr. Kaiser upon
termination of their employment with the Company and termination compensation
will be paid to Mr. Carson in connection with his termination of employment as
of March 31, 1994. Such termination compensation includes (i) a cash payment
equal to one and one-half times (two times in the case of Mr. Haddon) the
executive's annual salary plus target award under the Amax Annual Incentive
Compensation Plan, a cash bonus plan based upon annual business and individual
performance; (ii) a pro rata portion of certain incentive compensation awards,
determined on the assumption that all applicable targets have been met; (iii)
maintenance of all insurance plans in effect for one and one-half years (two
years in the case of Mr. Haddon); and (iv) for a period not to exceed one and
one-half years (two years in the case of Mr. Haddon) payment of benefits
equivalent on an after-tax basis to the benefits the executive would have
received under all employee benefit and executive compensation plans (other
than stock option and performance share plans) in which he was participating
immediately prior to termination, as if he had received credit for service
under such plans during such period following termination. In the event that
any payments made pursuant to the policy to Mr. Haddon (together with any
payments under any other plans, policies or arrangements) are subject to excise
tax under Federal tax laws, Cyprus Amax will increase Mr. Haddon's termination
payment to the extent necessary to restore him to the same after-tax position
as he would have had if the excise tax had not been imposed. In connection with
the change of control of the Company resulting from the Cyprus Amax Merger, Mr.
Muncaster relinquished his rights under the Amax corporate separation policy
and agreed to continue employment for a minimum of two years from the date of
the merger. In consideration of such relinquishment and agreement, the Company
agreed to provide Mr. Muncaster with a severance payment of $200,000 upon
termination of his employment after such two-year period.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1993, prior to the Cyprus Amax Merger on November 15, the members of
the Compensation Committee of the Board of Directors consisted of Mr. Born, Mr.
Paul E. Drack, and Mr. Paul W. MacAvoy, Messrs. Drack and MacAvoy being former
directors of the Company. Prior to the Cyprus Amax Merger, Messrs. Born and
Drack were principal executive officers of Amax and Mr. MacAvoy was an outside
director of Amax. Since the Cyprus Amax Merger, the Compensation Committee has
consisted of Messrs. Born and Malys, with Mr. Born serving as Chairman. Mr.
Born is Co-Chairman of the Board of Cyprus Amax and Mr. Malys is Senior Vice
President and Chief Financial Officer of Cyprus Amax. Mr. Ward is Co-Chairman
of the Board of Directors, President and Chief Executive Officer of Cyprus
Amax. Mr. Ward is compensated by Cyprus Amax and a portion of his base salary
and benefits is charged back to the Company in proportion to the amount of his
time spent on Company business. None of the present or former members of the
Company's Compensation Committee served on the Cyprus Amax (formerly Amax)
Compensation Committee, and no executive officers of the Company served on the
Cyprus Amax (formerly Amax) Compensation Committee. No member of the
Compensation Committee was during 1993 or is an officer or employee of the
Company or any of its subsidiaries. (For a discussion of transactions with
Cyprus Amax, see "TRANSACTIONS WITH AMAX AND CYPRUS AMAX" on page 8 hereof.)
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Compensation Policies Applicable to Executive Officers
The Company's Compensation Committee is responsible for establishing,
implementing and monitoring the Company's policies and plans for executive
development, succession planning and compensation. The Company's policy is to
(i) attract, select and retain high caliber managerial and technical talent to
meet the
15
<PAGE>
Company's human resources needs, (ii) assess and develop such talent to succeed
to key positions throughout the Company and its operating subsidiaries, (iii)
provide compensation opportunities that are competitive with those provided by
comparable gold companies, and (iv) motivate and reward its executives
individually based on the contribution of each toward meeting Company
objectives, which include annual and long-term business performance objectives
and the creation of stockholder value.
Normally, at the beginning of each year, the Compensation Committee reviews a
summary of objectives for the Company and for its executive officers which are
derived from the Company's strategic and financial planning activities. Based
on this review and a review of the compensation offered by the Company's
competitors, the Compensation Committee subsequently determines the Company's
executive officers' compensation levels for base pay, annual incentive awards
and long term incentive compensation. At year end, results achieved are
assessed by the Compensation Committee relative to the previously approved
objectives taking into consideration prevailing economic and business
conditions.
The Compensation Committee is assisted in its review and evaluation by
Strategic Compensation Associates, executive compensation consultants retained
by the Compensation Committee to advise it in the discharge of its
responsibilities. The consultants provide advice to the Compensation Committee
with respect to the reasonableness, fairness and competitiveness of
compensation paid to certain executive officers of the Company. In so doing,
the consultants review survey data regarding compensation practices and
payments to executives of other major North American gold mining companies and
the relationship of executive officer pay to Company performance and
stockholder value. Prior to the Cyprus Amax Merger, the Company's Compensation
Committee consulted with the Amax Human Resources and Compensation Committee
("Amax Committee") of the Board of Directors of Amax in determining the
Company's executive officers' compensation levels. The Amax Committee was
assisted in its review and evaluation by Pearl Meyer & Partners, Inc.,
executive compensation consultants.
For 1993, the compensation of the Company's Chief Executive Officer and next
five highest paid executive officers of the Company was consistent with the
Company's policies and plans after consideration of the change in control of
the Company that occurred as a result of the Cyprus Amax Merger. Those policies
and plans include three major elements of compensation:
1. Base salaries with ranges that were established to reflect the
competitive marketplace at the appropriate job level. Placement within base
salary ranges reflects the individual performance of each executive
officer, time in position, and the overall financial condition of the
Company. Base salaries are generally reviewed each year for adjustment by
the Company's Compensation Committee. As of January 1, 1993, however, the
salaries of all but two executive officers of the Company, as well as a
number of key Company employees were frozen at their 1992 levels on the
recommendation of the Company's Chief Executive Officer. The two Vice
Presidents whose salaries were not frozen were granted modest increases
because their base salaries were substantially below the salary levels of
others occupying comparable positions, both within the Company and in
comparable gold producing companies. In 1994, the Company's focus will be
on cost-cutting, and executive salaries will therefore generally continue
to be frozen. In lieu of 1994 salary increases, the Company intends to
reward employees with stock option incentives.
2. Annual incentive awards that were contingent on the Compensation
Committee's year-end assessment of the performance of the Company and the
individual executive officer in relation to goals and objectives set at the
beginning of the year. Prior to the Cyprus Amax Merger, executive officers
participated in Amax's Annual Incentive Compensation Plan for Executives
under which such awards were generally made in cash early in the following
year. Each executive officer was assigned performance goals for annual
incentive purposes based on assigned position responsibilities. For 1993,
performance
16
<PAGE>
goals included earnings from operations and cash flow, as well as growth in
the Company's ore reserves. No payments were made by the Company under the
Amax Incentive Compensation Plan. Payments were made by Cyprus Amax,
however, under change of control provisions in the Amax Incentive
Compensation Plan (which deemed all performance goals to have been met)
that were triggered by the Cyprus Amax Merger.
3. Equity participation in the form of stock options. Such options are
granted to help strengthen the coincidence of interest of officers, as well
as other salaried employees, and the Company's stockholders in the
Company's growth in real value over the long term. At the Company's 1993
annual meeting of stockholders, approval was given to the Company's Stock
Option Plan for salaried employees of the Company and its subsidiaries and
the Company's Performance Share Plan for officers and other key employees.
The amount of stock options granted in December 1992 conditioned upon such
approval is shown in the table under OPTION/SAR GRANTS IN THE LAST FISCAL
YEAR on page 12 hereof. No additional options were granted under the Stock
Option Plan and no awards were made under the Performance Share Plan in
1993.
The Company's philosophy is to increase the percentage of the Company's
stock in the hands of directors, officers, and employees and thus to
increase the commonality of interest with the stockholders. In keeping with
this philosophy, in March and April 1994 the Company's Compensation
Committee approved (subject to stockholder approval) the Directors' Stock
Grant Plan and the issuance to the Company's officers and employees of
stock options for slightly in excess of 300,000 shares of the Company's
common stock. The options, which are effective as of March 21, 1994, were
issued at option prices equal to 100% of fair market value at the date of
grant, are exercisable for 10 years and have a two-year vesting period. In
the future additional stock options may be granted to Company officers and
employees by the Compensation Committee on a discretionary basis within a
guideline range based on Company policies and practice. Such grants reflect
the relative value of the individual's position as well as his or her
current performance, continuing contribution and the prospective impact of
the individual on the Company's future success and creation of stockholder
value.
Prior to the Cyprus Amax Merger, long term performance-related stock
ownership opportunities in Amax common stock were granted to certain
executive officers of the Company under the Amax Performance Share Plan
("Amax PSP"). Since 1991, such grants were in the form of performance
accelerated restricted stock units with dividend equivalents ("PARS"). PARS
granted in 1991 and 1992 could be earned out in shares of Amax common stock
upon completion of successive three-year performance periods to the extent
that Amax's cumulative earnings objectives had been attained. Such awards
could be deferred, accelerated or otherwise adjusted in the sole discretion
of the Amax Committee based on strategic and comparative performance
assessment or other factors deemed relevant by the Amax Committee. Such
shares could be delivered on an accelerated basis or forfeited as
determined by the Amax Committee in certain circumstances. The long term
incentive plan payouts to Messrs. Haddon, Kaiser, Muncaster and Carson made
by Cyprus Amax in 1993 (shown in the table on page 11) were made under
change of control provisions under the Amax PSP that were triggered by the
Cyprus Amax Merger.
From 1988 to 1990, contingent shares of Amax common stock with reinvested
dividend units ("Performance Shares") were awarded annually to selected
executive officers of the Company. Such Performance Shares were earned out
at the end of successive three-year performance periods based on total Amax
shareholder return (stock price movement and dividend payment) relative to
a weighted group of companies engaged in similar businesses and a strategic
performance evaluation by the Amax
17
<PAGE>
Committee. The long term incentive payout made to Timothy J. Haddon for
1992 (shown in the table on page 11) reflects the relative results of Amax
for the three-year performance period ending December 31, 1992.
Bases for the Compensation of the Chief Executive Officer
Mr. Ward, Chairman of the Board, President and Chief Executive Officer of the
Company, is compensated by Cyprus Amax, and a portion of his base salary and
benefits is charged back to the Company in proportion to the amount of his time
spent on Company business. No such amounts were charged back to the Company by
Cyprus Amax for the period from mid-November 1993 through December 31, 1993.
Mr. Ward is eligible to participate in the Company's Stock Option Plan and
Performance Share Plan.
The compensation paid to Mr. Haddon, the Company's former President and Chief
Executive Officer, during 1993 was consistent with the Company's policies and
plans described above, after consideration of the change in control of the
Company that occurred as a result of the Cyprus Amax Merger.
As the Company moves forward in its efforts to create stockholder value in
the 1990s, the Compensation Committee will continue to review, monitor and
evaluate the Company's program for executive compensation to assure that it is
effective in support of the Company's strategy, is competitive in the
marketplace to attract, retain and motivate the talent needed to succeed, takes
into account significant pending changes in accounting rules as well as
potential tax legislation, and appropriately pays for performance on behalf of
all Company stockholders.
Members of the Compensation Committee:
Allen Born, Chairman
Gerald J. Malys
18
<PAGE>
PERFORMANCE GRAPH
The following graph compares the yearly percentage change in the Company's
cumulative total stockholder return on its common stock over the prior five
years (assuming reinvestment of dividends at date of payment into common stock
of the Company) with the cumulative total return on the published Standard &
Poor's 500 Stock Index and the cumulative total return on the published
Standard & Poor's index for the gold industry. THE FOLLOWING GRAPH IS PRESENTED
PURSUANT TO SEC RULES. THE COMPANY BELIEVES THAT WHILE TOTAL STOCKHOLDER RETURN
IS A VERY IMPORTANT CRITERION OF CORPORATE PERFORMANCE, IT IS SUBJECT TO THE
VAGARIES OF THE MARKET. IN ADDITION TO STOCK PRICE PERFORMANCE, THE COMPANY'S
EXECUTIVE COMPENSATION PROGRAM IS BASED ON FINANCIAL AND STRATEGIC RESULTS, AS
WELL AS OTHER FACTORS SET FORTH AND DISCUSSED ABOVE IN THE COMPENSATION
COMMITTEE REPORT ON EXECUTIVE COMPENSATION.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN* AMONG THE COMPANY, THE S&P 500
AND THE S&P GOLD MINING INDEX**
[GRAPH APPEARS HERE]
<TABLE>
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG AMAX GOLD INC, S&P GOLD INDEX AND S&P 500 INDEX
<CAPTION>
Measurement period Amax S&P Gold S&P 500
(Fiscal year Covered) Gold Index Index
--------------------- -------- -------- --------
<S> <C> <C> <C>
Measurement PT -
12/31/88 $ 100.00 $ 100.00 $ 100.00
FYE 12/31/89 $ 111.73 $ 143.01 $ 131.68
FYE 12/31/90 $ 95.45 $ 123.66 $ 127.58
FYE 12/31/91 $ 75.07 $ 100.38 $ 166.47
FYE 12/31/92 $ 56.14 $ 95.17 $ 179.20
FYE 12/31/93 $ 45.19 $ 178.97 $ 197.26
</TABLE>
* Assumes $100 invested on December 31, 1988, in Amax Gold Inc. common stock,
S&P 500 Index and S&P Gold Miningg Index, each with reinvestment of dividends
(quarterly compounding) and as measured on December 31, for each of the years
shown.
** The S&P Gold Mining Index is comprised of Echo Bay Mines, Homestake Mining,
Newmont Mining and Placer Dome, all of which produce substantially more gold
than the Company.
19
<PAGE>
2. RATIFICATION OF SELECTION OF AUDITORS
On March 1, 1994, the Company's Board of Directors, acting on the
recommendation of its Audit Committee, decided to appoint Price Waterhouse as
the Company's independent accountants for fiscal year 1994, subject to
ratification by the stockholders at the Annual Meeting of Stockholders to be
held May 5, 1994. Price Waterhouse replaces Coopers & Lybrand who have been the
Company's independent accountants since the Company's inception in 1987. Price
Waterhouse are the independent accountants for Cyprus Amax and have served as
such since 1985. The change was made to realize certain synergies between the
Company and Cyprus Amax.
The reports of Coopers & Lybrand on the financial statements for the past two
fiscal years contained no adverse opinion or disclaimer of opinion and were not
qualified or modified as to uncertainty, audit scope or accounting principles.
Also, in connection with its audits for the two most recent fiscal years and
through March 1, 1994, there have been no disagreements with Coopers & Lybrand
on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements if not resolved
to the satisfaction of Coopers & Lybrand would have caused them to make
reference thereto in their report on the financial statements for such years.
During the two most recent fiscal years and through March 1, 1994, there have
been no reportable events (as defined in Regulation S-K Item 304(a)(1)(v)).
Moreover, during the two most recent fiscal years and through March 1, 1994,
the Company has not consulted with Price Waterhouse on items which (1) were or
should have been subject to Statement of Auditing Standards No. 50 or (2)
concerned the subject matter of a disagreement or reportable event with the
former auditor, (as described in Regulation S-K Item 304(a)(2)).
Neither the firm of Price Waterhouse nor any of its partners has a direct, or
material indirect, financial interest in the Company or any of its
subsidiaries. Representatives of the firms of Price Waterhouse and Coopers &
Lybrand will be present at the Annual Meeting with the opportunity to make a
statement if they desire to do so and to respond to appropriate stockholder
questions.
The favorable vote of the holders of a majority of the shares of common stock
present in person or represented by proxy at the Annual Meeting is needed to
approve this Proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THIS
PROPOSAL AND, UNLESS A STOCKHOLDER GIVES INSTRUCTIONS ON THE PROXY CARD TO THE
CONTRARY, THE APPOINTEES NAMED THEREON INTEND SO TO VOTE.
3. APPROVAL OF STOCK GRANT PLAN FOR NONEMPLOYEE DIRECTORS
In order to increase the Company's ability to attract and retain outside
directors of the highest caliber and experience, in March 1994 the Board of
Directors adopted, subject to review and approval by the Compensation Committee
of the Board (which approval was subsequently given) and approval by the
stockholders of the Company, a Stock Grant Plan for Nonemployee Directors of
the Company ("the Directors' Stock Grant Plan"). The affirmative vote of a
majority of the shares of the Company's common stock present and eligible to
vote at the Annual Meeting will be required for approval of the Directors'
Stock Grant Plan. The full text of the Directors' Stock Grant Plan is set forth
as Exhibit A to this Proxy Statement. The following is a brief summary of the
provisions of the Directors' Stock Grant Plan, which is qualified in its
entirety by reference to the text of the Directors' Stock Grant Plan attached
as Exhibit A.
20
<PAGE>
The Directors' Stock Grant Plan, if approved by the stockholders, will become
effective on August 1, 1994. It provides that on that date, and on the day
following the annual stockholders' meeting held in each subsequent year, each
director who is not then an employee of the Company or of any of its
subsidiaries will be granted 1,500 shares of the Company's common stock, until
a total of 100,000 shares, the maximum to be granted under the Directors' Stock
Grant Plan, shall have been granted. The number of shares subject to grants and
the number of shares to be granted are subject to equitable adjustment in the
event of changes in the corporate structure or capital stock of the Company.
The Board of Directors or a committee thereof shall administer the Directors'
Stock Grant Plan, and the Board may amend or terminate the plan at any time;
provided that amendments pertaining to eligibility to participate and the
amount or timing of grants may not be made more than once every six months,
other than to comport with changes in the Internal Revenue Code, the Employment
Retirement Income Security Act, or the rules promulgated thereunder. No
amendment that would materially increase the benefits to directors, materially
increase the number of shares that may be issued or materially modify
eligibility requirements may become effective without approval by the
stockholders. All of the present directors except Mr. Ward would be eligible to
receive grants of stock under the Directors' Stock Grant Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE PROPOSAL
TO APPROVE THE ADOPTION OF THE STOCK GRANT PLAN FOR NONEMPLOYEE DIRECTORS, AND
UNLESS A STOCKHOLDER GIVES INSTRUCTIONS ON THE PROXY CARD TO THE CONTRARY, THE
APPOINTEES NAMED THEREON INTEND SO TO VOTE.
NEW PLAN BENEFITS
<TABLE>
<CAPTION>
STOCK GRANT PLAN FOR
NONEMPLOYEE DIRECTORS OF
AMAX GOLD INC.
----------------------------
DOLLAR
NAME AND POSITION VALUE ($)(1) NUMBER OF UNITS
----------------- ------------ ---------------
<S> <C> <C>
Non-executive Director Group....................... $800,000 100,000
</TABLE>
- --------
(1) The value was calculated by multiplying the number of shares by $8.00, the
closing share price as of March 31, 1994. The actual value of the shares on
the dates of grants may be greater or lesser than the value shown in the
table.
OTHER MATTERS
The Board of Directors is not aware of any other matters that may properly
come before the meeting. Should any such matters arise, however, it is the
intention of the persons named in the enclosed form of proxy to vote said proxy
in accordance with their judgment on such matters.
PROPOSALS FOR 1995 ANNUAL MEETING
The Company anticipates that the 1995 Annual Meeting of Stockholders will be
held on or about May 4, 1995. The exact date, time and place for such meeting
has yet to be determined. A stockholder who intends to present a proposal at
that Annual Meeting must submit the written text of the proposal so that it is
received by the Company at its principal executive offices no later than
December 14, 1994, in order for the proposal to be considered for inclusion in
the Company's Proxy Statement for that meeting.
21
<PAGE>
EXHIBIT A
STOCK GRANT PLAN
FOR NONEMPLOYEE DIRECTORS OF
AMAX GOLD INC.
Section 1. Purpose. The purpose of this Stock Grant Plan for Nonemployee
Directors of Amax Gold Inc. (the "Plan") is to provide certain incentives and
compensation to eligible directors of Amax Gold Inc. (the "Company"), and to
encourage the highest level of director performance by providing such directors
with a proprietary interest in the Company's success and progress by granting
them shares of the Company's Common Stock ("Shares").
Section 2. Shares Subject to Plan. Subject to Section 6, the maximum number
of Shares that may be granted under the Plan is 100,000. The Shares granted
under the Plan may be either authorized but unissued shares or treasury shares,
as determined from time to time by the Company's Board of Directors (the
"Board").
Section 3. Eligibility. A director will be eligible to participate in the
Plan if the director is not an employee of the Company or of any of its
subsidiaries and is a director on the date of grant. Each eligible director to
whom Shares are granted is referred to as a "Participant." Each grant of Shares
shall be evidenced by a written agreement duly executed and delivered by or on
behalf of the Company and a Participant, if such an agreement is required by
the Company to assure compliance with all applicable laws and regulations.
Section 4. Share Grants. Each eligible director on August 1, 1994, shall be
granted 1,500 Shares on that date, and annually thereafter each eligible
director on the day after the annual stockholder's meeting held in each
subsequent year shall be granted 1,500 Shares; provided that no grant to any
director shall be made in any year when the total number of Shares remaining
available for grants under Section 2 of the Plan is less than the total number
then necessary to make full grants to all eligible directors.
Section 5. Regulatory Compliance and Listing. The issuance or delivery of any
of the Shares may be postponed by the Company for such period as may be
required to comply with any applicable requirements under federal or state
securities laws, any applicable listing requirements of any national securities
exchange, and requirements under any other law or regulation applicable to the
issuance or delivery of such Shares. The Company shall not be obligated to
issue or deliver any of the Shares if the issuance or delivery of such Shares
would constitute a violation of any provision of any law or of any regulation
of any governmental authority or any national securities exchange.
Section 6. Adjustment for Company Changes. In the event of a
recapitalization, stock split, reverse stock split, stock dividend, combination
or exchange of shares, merger, consolidation, reorganization or liquidation, or
any other change in the corporate structure or capital stock of the Company
that equitably requires an adjustment in the Shares then remaining subject to
future grants under the Plan, appropriate adjustment shall be made in the
maximum number of Shares then remaining subject to future grants under the Plan
and in the Shares granted thereafter to eligible directors. A director shall
have the rights of a stockholder of the Company only as to shares actually
acquired by the director under the Plan.
A-1
<PAGE>
Section 7. Interpretation, Amendment, and Termination of the Plan.
(a) Eligible directors and directors to whom shares have been granted may
vote on matters of plan administration, including the grant of Shares.
(b) Either the Board or a committee to whom the Board from time to time may
delegate such authority (the "Committee") shall have the authority to interpret
the provisions of the Plan and to determine the terms and conditions of grants
that may be necessary or advisable to protect the interests of the Company, and
the interpretations and decisions of the Board or the Committee, as the case
may be, in these matters shall be final.
(c) The Board may from time to time amend the Plan, provided that (i) no
amendment that would materially increase the benefits accruing to Participants,
materially increase the number of securities which may be issued under the
Plan, or materially modify the requirements as to eligibility to participate in
the Plan shall become effective without approval of the amendment by the
stockholders, (ii) no other amendment shall become effective without approval
of the amendment by the stockholders if stockholder approval is required to
enable the Plan to satisfy any applicable statutory or regulatory requirements
(including Rule 16b-3 under the Securities Exchange Act of 1934), or if the
Company, on the advice of counsel, determines that stockholder approval is
otherwise necessary or desirable, and (iii) amendments to any provisions of the
Plan describing the eligible directors, stating the number of Shares to be
granted, or specifying the time of the grants shall not be made more than once
every six months, other than to comport with changes in the Internal Revenue
Code, the Employment Retirement Income Security Act, or the rules promulgated
thereunder.
(d) The Board may terminate the Plan at any time.
(e) Notwithstanding any other provision of the Plan, neither the Board nor
the Committee shall be authorized to exercise any discretion with respect to
the selection of persons to receive grants under the Plan or concerning the
amount or timing of grants under the Plan.
Section 8. Miscellaneous.
(a) Nothing in the Plan shall be deemed to create any obligation on the
part of the Board to nominate any director for reelection by the Company's
stockholders or to limit the rights of the stockholders to remove any director.
(b) The Company shall have the right to require, prior to the issuance or
delivery of any Shares, payment by a Participant of any taxes required by law
with respect to the issuance or delivery of such Shares. The Company may take
such action as it may deem necessary or appropriate for the withholding of any
taxes in connection with any grant for which the Company is required to
withhold by any law or regulation of any federal, state or other governmental
authority. Such action may include the cancelling of any portion of a grant of
Shares or withholding from other compensation in an amount sufficient to pay
the required withholding amount.
Section 10. Effective Date of the Plan. The Plan shall become effective as of
August 1, 1994, subject to and conditioned upon obtaining prior approval of the
Plan by the Company's stockholders.
A-2
<PAGE>
AMAX GOLD INC.
9100 EAST MINERAL CIRCLE
ENGLEWOOD, COLORADO 80112
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints ROGER A. KAUFFMAN, MARK A. LETTES and PAUL J.
HEMSCHOOT, JR. as Proxies, each with the power to appoint his substitute, and
hereby authorizes them to represent and to vote, as designated below, all the
shares of common stock of Amax Gold Inc. held of record by the undersigned on
March 24, 1994, at the annual meeting of stockholders to be held on May 5, 1994
or any adjournment thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR ALL NOMINEES" IN ITEM 1 AND "FOR"
ITEM 2 AND ITEM 3.
Item 1--ELECTION OF DIRECTORS
[_] FOR all nominees [_] WITHHOLD AUTHORITY for all nominees
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.
Allen Born, Gerald J. Malys, Rockwell A. Schnabel,
Vernon F. Taylor, Jr., Milton H. Ward and Russell L. Wood
Item 2--PROPOSAL TO RATIFY THE SELECTION OF PRICE WATERHOUSE as the independent
public accountants of the Company.
[_] FOR [_] AGAINST [_] ABSTAIN
Item 3--PROPOSAL FOR ADOPTION OF A STOCK GRANT PLAN for the nonemployee Direc-
tors of the Company.
[_] FOR [_] AGAINST [_] ABSTAIN
The shares represented by this proxy will be voted as directed by the
stockholder. IF NO DIRECTION IS GIVEN WHEN THE DULY EXECUTED PROXY IS RETURNED,
SUCH SHARES WILL BE VOTED "FOR ALL NOMINEES" IN ITEM 1 AND "FOR" ITEM 2 AND
ITEM 3.
PLEASE DATE AND SIGN ON REVERSE SIDE AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.
-------------
<PAGE>
Item 4--In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment
thereof. This proxy when properly executed will be voted in the manner
directed herein by the undersigned stockholder.
PLEASE MARK, SIGN, DATE AND
RETURN THE PROXY CARD PROMPTLY,
USING THE ENCLOSED ENVELOPE.
Date..............................
Signature.........................
Signature
if held jointly...................
PLEASE SIGN EXACTLY AS NAME
APPEARS. WHEN SHARES ARE HELD BY
JOINT TENANTS, BOTH SHOULD SIGN.
WHEN SIGNING AS ATTORNEY, AS
EXECUTOR, ADMINISTRATOR, TRUSTEE
OR GUARDIAN, PLEASE GIVE FULL
TITLE AS SUCH. IF A CORPORATION,
PLEASE SIGN IN FULL CORPORATE
NAME BY PRESIDENT OR OTHER
AUTHORIZED OFFICER. IF A
PARTNERSHIP, PLEASE SIGN IN
PARTNERSHIP NAME BY AUTHORIZED
PERSON.
<PAGE>
AMAX GOLD INC.
9100 EAST MINERAL CIRCLE
ENGLEWOOD, COLORADO 80112
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints ROGER A. KAUFFMAN, MARK A. LETTES and PAUL
J. HEMSCHOOT, JR. as Proxies, each with the power to appoint his substitute,
and hereby authorizes them to represent and to vote, as designated below, all
the shares of common stock of Amax Gold Inc. held of record by the undersigned
on March 24, 1994, at the annual meeting of stockholders to be held on May 5,
1994 or any adjournment thereof.
PLEASE DATE AND SIGN ON REVERSE SIDE AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.
-------------
- --------------------------------------------------------------------------------
COMMENTS/ADDRESS CHANGE: PLEASE MARK COMMENT/ADDRESS BOX ON REVERSE SIDE
<PAGE>
[X] Please mark
your votes
like this
----------- -------------------------
COMMON DIVIDEND REINVESTMENT
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR ALL NOMINEES" IN ITEM 1 AND
"FOR" ITEM 2 AND ITEM 3. THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS
DIRECTED BY THE STOCKHOLDER. IF NO DIRECTION IS GIVEN WHEN THE DULY EXECUTED
PROXY IS RETURNED, SUCH SHARES WILL BE VOTED "FOR ALL NOMINEES" IN ITEM 1 AND
"FOR" ITEM 2 AND ITEM 3.
Item 1--ELECTION OF DIRECTORS
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE
A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
Allen Born, Gerald J. Malys, Rockwell A. Schnabel, Vernon F. Taylor, Jr.,
Milton H. Ward and Russell L. Wood
FOR WITHHELD
[_] [_]
Item 2--PROPOSAL TO RATIFY THE SELECTION OF PRICE WATERHOUSE as the indepen-
dent public accountants of the Company.
FOR AGAINST ABSTAIN
[_] [_] [_]
Item 3--PROPOSAL FOR ADOPTION OF A STOCK GRANT PLAN for the nonemployee Direc-
tors of the Company.
FOR AGAINST ABSTAIN
[_] [_] [_]
Item 4--In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the meeting or any adjournment
thereof. This proxy when properly executed will be voted in the manner
directed herein by the undersigned stockholder.
- ------------------------------
I PLAN TO ATTEND MEETING [_]
++++++
+
+ COMMENTS/ADDRESS CHANGE
+ Please mark this box if
+ you have written [_]
comments/address change
on the reverse side.
Signature(s) ___________________________ Date _______________________________
PLEASE SIGN EXACTLY AS NAME APPEARS ABOVE. WHEN SHARES ARE HELD BY JOINT
TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY, AS EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. IF A
CORPORATION, PLEASE SIGN IN FULL CORPORATE NAME BY PRESIDENT OR OTHER
AUTHORIZED OFFICER. IF A PARTNERSHIP, SIGN IN PARTNERSHIP NAME BY AUTHORIZED
PERSON.
