<PAGE>
SCHEDULE 14A (RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 240.14a-11(c) or Rule 240.14a-12
GETCHELL GOLD 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)(1)
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 (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>
April 3, 1998
Getchell Gold Corporation
5460 South Quebec Street
Suite 240
Englewood, Colorado 80111
Dear Stockholder:
You are cordially invited to attend the Company's Annual Meeting of
Stockholders on Thursday, May 14, 1998. The meeting will begin promptly at 10:00
a.m. local time at the Embassy Suites Hotel, 10250 E. Costilla Avenue,
Englewood, Colorado.
You are urged to consider the enclosed materials and to sign and return your
proxy promptly in the enclosed, postage prepaid envelope, even if you plan to
attend the meeting. Any stockholder giving a proxy has a right to revoke it at
any time before it is voted.
The official Notice of Meeting, proxy statement and form of proxy are
included with this letter. The matters listed in the Notice of Meeting are
described in detail in the proxy statement.
The vote of every stockholder is important. Please sign, date and promptly
mail your proxy. The Board of Directors and management look forward to greeting
those stockholders who are able to attend.
Sincerely,
/s/ Donald S. Robson
Donald S. Robson
SECRETARY
<PAGE>
GETCHELL GOLD CORPORATION
5460 SOUTH QUEBEC STREET
SUITE 240
ENGLEWOOD, COLORADO 80111
------------------------
APRIL 3, 1998
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
---------------------
The Annual Meeting of Stockholders of Getchell Gold Corporation will be held
at the Embassy Suites Hotel, 10250 E. Costilla Avenue, Englewood, Colorado, on
Thursday, May 14, 1998, at 10:00 a.m. local time, for the following purposes:
(1) To elect three Directors of Getchell Gold Corporation to serve for a term of
three years and until their successors are duly elected and qualified;
(2) To approve the 1998 Stock Option Plan for Outside Directors;
(3) To approve an amendment to the 1996 Long Term Equity Incentive Plan;
(4) To ratify the appointment of KPMG Peat Marwick LLP as independent auditors
for 1998; and
(5) To transact such other business as may be properly brought before the
meeting.
By Order of the Board of Directors,
/s/ Donald S. Robson
Donald S. Robson
SECRETARY
<PAGE>
GETCHELL GOLD CORPORATION
5460 S. QUEBEC STREET, SUITE 240
ENGLEWOOD, COLORADO 80110
ANNUAL MEETING OF STOCKHOLDERS
MAY 14, 1998
------------------------
PROXY STATEMENT
---------------------
SOLICITATION OF PROXIES
This proxy statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of Getchell Gold Corporation, a
Delaware corporation (the "Company"), for the Annual Meeting of Stockholders of
the Company (the "Annual Meeting") to be held at the Embassy Suites Hotel, 10250
E. Costilla Avenue, Englewood, Colorado on Thursday, May 14, 1998, at 10:00 a.m.
local time. Only stockholders of record at the close of business on March 30,
1998 are entitled to notice of and to vote at the Annual Meeting.
Returning your completed proxy will not prevent you from voting in person at
the meeting should you be present and wish to do so. Stockholders may revoke
their proxies by delivering a written notice of revocation to the Secretary of
the Company at any time prior to the exercise thereof, by the execution of a
later-dated proxy by the same person who executed the prior proxy with respect
to the same shares or by attendance at the Annual Meeting and voting in person
by the person who executed the prior proxy.
The enclosed proxy is being solicited by the Board of Directors of the
Company. The solicitation will be primarily by mail but may also include
telephone, telegraph or oral communication by officers or regular employees of
the Company. Officers and employees will receive no additional compensation in
connection with the solicitation of proxies. Morrow and Co. Inc. will perform
services related to distribution of proxy materials to banks, brokerage houses
and other nominee holders for an approximate fee of $7,500. All costs of
soliciting proxies will be borne by the Company. The approximate mailing date of
the proxy statement and proxy to stockholders is April 3, 1998.
All proxies will be voted as specified. In the absence of specific
instructions, proxies will be voted FOR:
(1) the election of three Directors of the Company to serve for a term of
three years and until their successors are duly elected and qualified;
(2) the approval of the 1998 Stock Option Plan for Outside Directors;
(3) the amendment of the 1996 Long Term Equity Incentive Plan;
(4) the appointment of KPMG Peat Marwick LLP as independent auditors of the
Company for 1998; and
(5) the approval of all other matters by the persons named in the proxies in
accordance with their judgment.
* PLEASE SIGN YOUR NAME EXACTLY AS IT APPEARS ON THE PROXY. STOCKHOLDERS
RECEIVING MORE THAN ONE PROXY BECAUSE OF SHARES REGISTERED IN DIFFERENT NAMES OR
ADDRESSES MUST COMPLETE AND RETURN EACH PROXY IN ORDER TO VOTE ALL SHARES TO
WHICH ENTITLED.
<PAGE>
OUTSTANDING SHARES AND VOTING RIGHTS
RECORD DATE. Stockholders of record at the close of business on March 30,
1998 (the "Record Date") are entitled to notice of and to vote at the Annual
Meeting or any adjournment or postponement thereof.
SHARES OUTSTANDING. As of March 27, 1998, a total of 30,786,351 shares of
the Company's Common Stock (the "Common Stock") were outstanding and entitled to
vote.
VOTING RIGHTS AND PROCEDURES. Each outstanding share of Common Stock is
entitled to one vote on all matters submitted to a vote of stockholders. The
Company's Bylaws require the presence, in person or by proxy, of a majority of
the outstanding shares of Common Stock entitled to vote to constitute a quorum
to convene the Annual Meeting. Shares represented by proxies that reflect
abstentions or "broker non-votes" (I.E., shares held by a broker or nominee
which are represented at the meeting, but with respect to which such broker or
nominee is not empowered to vote on a particular proposal) will be counted as
shares that are present and entitled to vote for purposes of determining the
presence of a quorum.
STOCKHOLDER PROPOSALS FOR THE 1999 ANNUAL MEETING. Proposals from
stockholders intended to be included in the Company's proxy statement for the
1999 Annual Meeting must be received by the Secretary of the Company on or
before December 31, 1998, and may be omitted unless the submitting stockholder
meets certain requirements. It is suggested that the proposal be submitted by
certified mail, return-receipt requested.
ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
The Company's Certificate of Incorporation and Bylaws authorize a Board
comprised of not less than one nor more than fifteen members. Within the limits
specified above, the number of Directors is determined by a resolution of the
Board or by the stockholders at the Annual Meeting. Pursuant to a resolution
adopted by the Board on May 10, 1995, the authorized number of members of the
Board has been set at ten. The Bylaws provide that no person would be elected to
serve on the Board after attaining the age of sixty-nine and that any Director
elected after June 13, 1996 would be required to tender his resignation upon
attaining the age of 70 or exceeding a total term of nine years. The Board is
divided into three classes designated as Class 1, Class 2 and Class 3, each of
which is to be as nearly equal in number as possible. Normally, each Director
serves for a term ending on the date of the third Annual Meeting following the
meeting at which such Director was elected. However, if a Director is being
elected to replace a Director who has resigned for any reason, the newly elected
Director will be elected to serve the remainder of the replaced Director's term.
Set forth below for each nominee for election as a Director and for each
continuing Director who is not a nominee, based on information supplied by him,
are his name, age as of the date of the Annual Meeting, any presently held
positions with the Company, principal occupation now and for the past five
years, other directorships in public companies and tenure of service with the
Company as a Director.
NOMINEES FOR ELECTION AS DIRECTORS
PETE INGERSOLL is the principal partner of Ingersoll, Parker & Longabaugh, a
mining consulting firm. He is a member of the Compensation, Human Resource and
Director Affairs Committee. Mr. Ingersoll is also a Director of Stillwater
Mining Company, a platinum and palladium mining company.
Director Since: 1994
Term of Office: Three Years
Age: 67
WILLIAM E. NETTLES is the Chairman and Chief Executive Officer of Stillwater
Mining Company and has been since October 1997. From 1995 to October 1997, Mr.
Nettles served as Vice President and Chief
2
<PAGE>
Financial Officer of Engelhard Corporation ("Engelhard"), a producer of
catalysts, pigments, environmental technologies and precious metal-based
products and services, and from 1982 through 1994 he served as Vice President
and General Manager of various groups at Engelhard.
Term of Office: Three Years
Age: 54
G. W. THOMPSON has been President and Chief Executive Officer of the Company
since September 1994. He was a private investor and consultant in the mining
business from May 1992 until September 1994.
Director Since: 1994
Term of Office: Three Years
Age: 56
CONTINUING DIRECTORS
WALTER A. DREXEL is a private investor. From September 1987 to June 1996, he
was part owner of the Chicago Central and Pacific Railroad. He is a member of
the Compensation, Human Resource and Director Affairs Committee.
Director Since: 1995
Term Expires: 1999
Age: 67
JOHN RACICH is a mining consultant. He retired in 1989 as Senior Vice
President and Chief Financial Officer of Placer Dome Inc., a gold mining
company. He is Chairman of the Audit, Budgeting and Finance Committee.
Director Since: 1996
Term Expires: 1999
Age: 62
CHARLES E. STOTT, JR. is a mining consultant. From 1994-1995, he was
President and Chief Executive Officer of Gold Capital Corporation, a gold mining
company. From 1993-1994, he was Executive Vice President, American Mine Services
Inc., a mining contracting and engineering firm. From 1990-1993, he was
President and Chief Executive Officer of Horizon Resources Corporation, a mining
company. He is a member of the Compensation, Human Resource & Director Affairs
Committee.
Director Since: 1996
Term Expires: 1999
Age: 64
R. MICHAEL SUMMERFORD is Vice President and Chief Financial Officer of
ChemFirst Inc. ("ChemFirst") (formerly First Mississippi Corporation) and has
been since 1988. He is a member of the Audit, Budgeting and Finance Committee.
Director Since: 1987
Term Expires: 2000
Age: 49
J. KELLEY WILLIAMS is Chairman of the Board of the Company and has been
since October 1987. He is the Chairman of the Board and Chief Executive Officer
of ChemFirst and has been since November 1988. He is also a Director of Deposit
Guaranty, a bank.
Director Since: 1987
Term Expires: 2000
Age: 64
3
<PAGE>
ALLEN S. WINTERS is a consultant for various mining companies. He retired in
1995 as Vice President of Homestake Mining Company and General Manager of
Homestake Mine. He is a member of the Audit, Budgeting and Finance Committee.
Director Since: 1996
Term Expires: 2000
Age: 58
ROBERT L. ZERGA has been self-employed since January 1995. From July 1990 to
November 1994, he served as Chief Executive Officer and Chairman of the Board of
Independence Mining Company Inc., a gold mining company which is an indirect
wholly-owned subsidiary of Minorco Inc. During the same time period, he served
as Vice President and director of Minorco (U.S.A.) Inc., a gold mining company
and subsidiary of Minorco Inc. He is Chairman of the Compensation, Human
Resource and Director Affairs Committee. Mr. Zerga is also a Director of Canyon
Resources, a mining company.
Director Since: 1995
Term Expires: 1999
Age: 57
DIRECTOR COMPENSATION
In 1997, the Chairman of the Board was compensated for his services with an
annual retainer of $22,500. Other Directors who are not employees of the Company
(together with the Chairman, "Outside Directors") were compensated for their
services with an annual retainer of $7,500. In addition, all Outside Directors
received $750 per day for attendance at board meetings, and an additional $500
per day for attendance at committee meetings, $750 per day for special service
requests made by the Chairman of the Board or the Chief Executive Officer and
$250 per day for travel. No compensation, in addition to his regular salary and
benefits, is payable to the Chief Executive Officer for his services as a
Director. In accordance with the 1996 Stock Option Plan for Outside Directors,
Outside Directors may elect to forego cash payment of all or any of their fees
during a fiscal year and receive an option to purchase the number of shares
equal to the fees divided by one-third of the closing price of the Common Stock
on the last day of the fiscal year. Mr. Williams made such an election for 1997,
and received options to purchase 4,063 shares of Common Stock.
Also in accordance with the 1996 Stock Option Plan for Outside Directors,
each person who is elected or appointed as an Outside Director automatically
receives on the date of such election or appointment a non-qualified stock
option ("NQSO") grant to purchase the number of shares of Common Stock equal to
$22,500 divided by one-third of the closing price of the Common Stock on such
date. Individuals who were Outside Directors at the time the 1996 Stock Option
Plan for Outside Directors was adopted by the Board of Directors received such
an NQSO on the date of adoption by the Board, subject to stockholder approval.
Following such initial grant, each such Outside Director who serves until the
third, sixth and ninth anniversaries of the initial date of grant will
automatically receive an NQSO to purchase an additional number of shares of
Common Stock equal to $22,500 divided by one-third of the closing price of the
Common Stock on the date of grant on each such anniversary at an aggregate
option price equal to the fair market value of the Common Stock on the date of
grant, so long as the person is an Outside Director at the close of business on
the date of such anniversary. An option will be exercisable with respect to one-
third of the shares subject to the option on the anniversary of the date of
grant and an additional one-third on each of the two succeeding anniversaries.
Options granted under the 1996 Stock Option Plan for Outside Directors shall
expire five years after the date of grant.
On November 14, 1997, the Board of Directors adopted, subject to stockholder
approval, a new Stock Option Plan for Outside Directors (the "New Director
Plan") to replace the 1996 Stock Option Plan for Outside Directors. Subject to
stockholder approval, each person who (i) was an Outside Director at the time
the New Director Plan was adopted by the Board of Directors or (ii) is first
elected or appointed as an
4
<PAGE>
Outside Director thereafter within six months following an annual meeting of
stockholders of the Company, will automatically receive an NQSO to purchase
5,000 shares of Common Stock at an option exercise price equal to the fair
market value of the Common Stock on the date of grant. Each Outside Director
will also receive an NQSO to purchase an additional 5,000 shares of Common Stock
at each annual meeting of stockholders of the Company at an option exercise
price equal to the fair market value of the Common Stock on the date of grant;
provided, however, that each Outside Director may only receive NQSOs under the
New Directors Plan to purchase up to an aggregate of 15,000 shares of Common
Stock, not including NQSOs received in lieu of cash compensation at the election
of the Outside Director. NQSOs granted under the New Director Plan will be
exercisable on the later of (i) November 14, 1999 and (ii) the date of grant.
See Proposal No. 2 below.
BOARD MEETINGS AND COMMITTEES
The Board of Directors met six times during the year ended December 31,
1997. All Directors of the Company attended at least 75% of the meetings of the
Board of Directors and committees on which they served. The Board of Directors
has the following two committees:
The AUDIT, BUDGETING AND FINANCE COMMITTEE, which met ten times during the
year ended December 31, 1997, consists of three Outside Directors. The Audit,
Budgeting and Finance Committee recommends independent public accountants to act
as auditors for the Company for consideration by the Board of Directors and
confers with the independent public accountants with respect to the scope,
results of their audits, their reports thereon and their fees. The Committee
reviews the Company's internal controls and oversees quarterly and annual
financial reporting. The Committee's review of financial activities and reports
includes actual performance, budgeting, hedging, investing and insurance, as
well as the compliance of the Company to the established policies of corporate
conduct. The members of the Audit, Budgeting and Finance Committee are: John
Racich (Chairman), R. Michael Summerford and Allen S. Winters.
The COMPENSATION, HUMAN RESOURCE & DIRECTOR AFFAIRS COMMITTEE, which met
eight times during the year ended December 31, 1997, consists of five Outside
Directors and is charged with the responsibility of recommending to the Board of
Directors a program of overall compensation for executive officers and other key
employees, setting broad human resources policy, nominating directors for
service and handling corporate governance issues. The members of the
Compensation, Human Resource & Director Affairs Committee are: Walter Drexel,
Robert Horton, Pete Ingersoll, Charles Stott Jr. and Robert Zerga (Chairman).
VOTE AND RECOMMENDATION
Directors are elected by vote of a plurality of the shares of voting stock
present and entitled to vote, in person or by proxy, at the Annual Meeting.
Abstentions or broker non-votes as to the election of Directors will not affect
the election of the candidates receiving the plurality of votes. Unless
instructed to the contrary, the shares represented by the proxies will be voted
FOR the election of the Director nominees named above. Although it is
anticipated that each nominee will be able to serve as a Director, should any
nominee become unavailable to serve, the proxies will be voted for such other
person or persons as may be designated by the Board of Directors.
THE BOARD RECOMMENDS A VOTE "FOR" THE NOMINEES.
APPROVAL OF 1998 STOCK OPTION PLAN FOR OUTSIDE DIRECTORS
(PROPOSAL NO. 2)
The Board of Directors adopted the 1998 Stock Option Plan for Outside
Directors (the "New Director Plan") on November 14, 1997, subject to stockholder
approval, to replace the 1996 Stock Option Plan for Outside Directors.
5
<PAGE>
Time commitments for service as a director of public companies have
increased in recent years. These increasing demands on directors' time have
greatly increased the competition for potential directors who possess the
talents, skills, judgment, personal attributes and other characteristics of an
outstanding director. This competition is especially keen with respect to
persons who are not officers or employees of the corporation they are asked to
serve as directors. The Board of Directors adopted the New Director Plan to
provide compensation in the form of stock options to each director of the
Company who is not an employee of the Company at the time of his election or
selection to the Company Board of Directors (individually an "Outside Director"
and collectively the "Outside Directors") in an effort to enhance the Company's
ability to attract and retain well qualified individuals to serve as directors
of the Company. The Board of Directors believes that the New Director Plan will
also enhance the long-term commitment of Outside Directors to the Company and
further align their interests with the interests of the stockholders.
The description of certain features of the New Director Plan below is a
summary of such plan and is qualified in its entirety by reference to the
complete New Director Plan attached as Appendix A hereto.
Subject to stockholder approval, each person who was an Outside Director at
the time the New Director Plan was adopted by the Board of Directors received a
NQSO grant to purchase the 5,000 shares of Common Stock. Any person who is not
an Outside Director at such time, but who later becomes an Outside Director
within six months following an Annual Meeting of Stockholders of the Company,
shall be granted on the date of his election or appointment as an Outside
Director an option to purchase 5,000 shares of Common Stock at an option
exercise price equal to the fair market value of the Common Stock on the date of
grant. Additionally, at each Annual Meeting of the Company's Stockholders, each
such Outside Director will automatically receive an option to purchase 5,000
shares of Common Stock at an option exercise price equal to the fair market
value of the Common Stock on the date of grant; provided, however, that no
Outside Director may acquire options to purchase more than an aggregate of
15,000 shares of Common Stock under the New Director Plan, excluding Replaced
Cash Fees options discussed below. The options will be exercisable on the later
of (i) November 14, 1999 or (ii) the date of grant.
The options may vest earlier upon the occurrence of certain events involving
a change in control of the Company, as more specifically provided in the New
Director Plan, or upon the death, disability, retirement due to age, or failure
to be reelected as an Outside Director. If an Outside Director ceases to be a
director of the Company for any reason other than death, disability, serious
illness, age, or failure to be reelected as an Outside Director following his or
her nomination by the Board of Directors for reelection, such director will have
one year in which to exercise those options which have vested as of such
termination as a director. If an Outside Director ceases to be a director of the
Company for reason of death, disability, age, or failure to be reelected as an
Outside Director following his or her nomination by the Board of Directors for
reelection, such director will have three years to exercise all options
previously granted to him or her under the New Director Plan. Options granted
under the New Director Plan will expire eight years after the date such options
first become exercisable.
The New Director Plan also allows outside directors to elect to forego cash
payment of all or any mechanically calculable portion of his or her Director
Fees (as defined in the New Director Plan) for any fiscal year (the "Replaced
Cash Fees") and receive, on the last day of such fiscal year, an option to
purchase the number of shares equal to the Cash Replacement Fees divided by
one-third of the closing price of the Common Stock on the last day of such
fiscal year. Such options are exercisable in full at any time on and after the
date of grant until the earlier of expiration of the option's term or
termination of the option.
The New Director Plan will be administered by the Board of Directors of the
Company. The current nine Outside Directors, Messrs. Drexel, Horton, Ingersoll,
Racich, Stott, Summerford, Williams, Winters and Zerga are the individuals
currently eligible to participate in the New Director Plan. On November 14,
1997, the Board of Directors granted the nine Outside Directors options to
purchase 5,000 shares of Common Stock each, with an exercise price of $30.00 per
share, subject to stockholder approval of the
6
<PAGE>
New Director Plan. It is not possible to state the persons who will receive
stock options under the New Director Plan in the future, nor the amount of
options which will be granted thereunder. The following table provides
information as to options granted under the New Director Plan during 1997,
subject to stockholder approval.
NEW PLAN BENEFITS
1998 STOCK OPTION PLAN FOR OUTSIDE DIRECTORS
<TABLE>
<CAPTION>
DOLLAR NUMBER
NAME AND POSITION VALUE($) OF SHARES
- ---------------------------------------------------------------------------------- ------------- -----------
<S> <C> <C>
Non-Executive Director Group...................................................... $ 0(1) 45,000
</TABLE>
- ------------------------
(1) Based on the difference between the exercise price of the option and the
fair market value of the Common Stock on March 27, 1998 of $21 3/8 per
share.
Under the New Director Plan, an aggregate of 170,000 shares of Common Stock
have been reserved for issuance upon the exercise of options granted to Outside
Directors, subject to adjustments for such matters as stock splits and stock
dividends. The New Director Plan permits the Board of Directors to amend
(generally not more frequently than once every six months) or terminate the New
Director Plan at any time subject to stockholder approval of any amendments that
(i) increase the number of shares available for issuance; (ii) materially modify
the eligibility requirements; (iii) reduce the minimum option price; (iv) extend
the period during which options may be granted; or (v) require stockholder
approval under Rule 16b-3 under the 1934 Act.
Participants who hold options under the New Director Plan do not recognize
income as a result of the grant of such options, but normally recognize
compensation taxable at ordinary income rates upon the exercise of the options
to the extent that the fair market value of the shares on the date of the
exercise of the options exceed the option exercise price paid. The Company will
be allowed a deduction for federal income tax purposes in the same amount as the
Outside Director realizes ordinary income.
VOTE AND RECOMMENDATION
Approval of the New Director Plan will require the affirmative vote of the
holders of a majority of the shares of the Common Stock represented and voting
in person or by proxy at the Annual Meeting. Abstentions as to this Proposal 2
will be treated as votes against Proposal 2. Broker non-votes, however, will be
treated as unvoted for purposes of determining approval of Proposal 2 and will
not be counted as votes for or against Proposal 2. Properly executed, unrevoked
Proxies will be voted FOR Proposal 2 unless a vote against Proposal 2 or
abstention is specifically indicated in the Proxy.
THE BOARD RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE 1998 STOCK OPTION PLAN
FOR OUTSIDE DIRECTORS.
7
<PAGE>
AMENDMENT OF THE 1996 LONG TERM EQUITY INCENTIVE PLAN
(PROPOSAL NO. 3)
On November 14, 1997, the Board approved and is recommending that
stockholders ratify an amendment (the "Amendment") to the Company's 1996 Long
Term Equity Incentive Plan (the "Plan") which would increase the shares of
Common Stock authorized for issuance under the Plan by 700,000 shares, from
900,000 to 1,600,000 shares.
BACKGROUND FOR THE PROPOSAL. The purpose of the Plan is to attract, retain
and motivate officers and other employees and consultants of the Company by
providing an opportunity to acquire or increase an equity interest in the
Company. Currently all levels of employees receive options. As of December 31,
1997, there were 786,298 options to purchase shares outstanding and 102,722
options remained available for the grant of options. In order to provide shares
of Common Stock authorized for the grant of Awards under the Plan in an amount
deemed necessary to provide appropriate equity incentives to existing and new
employees, the Board has recommended the Amendment. The Board also believes that
the balance of shares available for the Plan will be an important reward and
recruitment tool for the Company.
DESCRIPTION OF THE PLAN. The description of certain features of the Plan
below is a summary of such Plan and is qualified in its entirety by reference to
the complete Plan as filed with the Securities and Exchange Commission and which
may also be obtained from the Company by any stockholder.
The Plan is administered by the Compensation, Human Resource & Director
Affairs Committee (the "Committee") of the Board. Each member of the Committee
is a "Non-Employee Director" as defined in Rule 16b-3 under the Securities
Exchange Act of 1934, as amended, and an "outside director" within the meaning
of Section 162(m) of the Internal Revenue Code of 1986, as amended. Awards under
the Plan may be in the form of Stock Options, Stock Appreciation Rights,
Restricted Stock or Performance Shares. Awards under the Plan may be granted to
employees of, and consultants to, the Company and its affiliates (excluding any
person who serves only as a director). The pool of individuals considered
eligible to receive awards under the Plan includes all employees and totaled 460
at March 23, 1998. The Committee determines the employees and consultants of the
Company who are to receive awards under the Plan and the types, amounts and
terms of the awards. Shares subject to awards which expire or otherwise
terminate will again become available for awards. The following table provides
information as to options granted under the Plan during 1997, subject to
stockholder approval.
NEW PLAN BENEFITS
1996 LONG TERM EQUITY INCENTIVE PLAN
<TABLE>
<CAPTION>
DOLLAR NUMBER
NAME AND POSITION VALUE($) OF SHARES
- ---------------------------------------------------------------------------------- ------------- -----------
<S> <C> <C>
Employee Group.................................................................... $ 0(1) 62,700
</TABLE>
- ------------------------
(1) Based on the difference between the exercise price of the option and the
fair market value of the Common Stock on March 27, 1998 of $21 3/8 per
share.
FEDERAL INCOME TAX ASPECTS. The following discussion is a general summary
of the material federal income tax consequences to participants in the Plan. The
discussion is based on the Internal Revenue Code of 1986, as amended (the
"Code"), regulations thereunder, rulings and decisions now in effect, all of
which are subject to change. The summary does not discuss all aspects of federal
income taxation that may be relevant to a particular participant in light of
such participant's personal investment circumstances. Also, state and local
income taxes are not discussed and may vary from locality to locality.
8
<PAGE>
NQSOS. Recipients of NQSOs granted under the Plan will not have taxable
income upon the grant of such options, but normally will recognize compensation
taxable at ordinary income rates upon the exercise of such options to the extent
that the fair market value of the shares of Common Stock on the date of the
exercise of such options exceeds the option exercise price paid. Subject to
Section 162(m) of the Code, discussed below, the Company will be entitled to a
tax deduction in an amount equal to the amount that the participant is required
to include in ordinary income at the time of such inclusion and will be required
to withhold taxes on such ordinary income. The participant's initial tax basis
for shares of Common Stock acquired upon the exercise of a NQSO will be the
option exercise price paid plus the amount of ordinary income recognized by the
participant.
INCENTIVE STOCK OPTIONS. Recipients of Incentive Stock Options granted
under the Plan will not have taxable income upon either the grant of an
Incentive Stock Option or its exercise. Upon the sale or other taxable
disposition of shares of Common Stock, long-term capital gain will normally be
recognized in the full amount of the difference between the amount realized and
the option exercise price if no disposition of shares has taken place within
either (a) two years from the date of grant of the Incentive Stock Option or (b)
one year from the date of transfer of such shares of Common Stock to the
participant upon exercise. If shares of Common Stock acquired upon the exercise
of an Incentive Stock Option are sold or otherwise disposed of before the end of
the one-year or two-year periods referenced above, the difference between the
option exercise price and the fair market value of the shares of Common Stock on
the date of the option's exercise will be taxed as ordinary income; the balance
of the gain, if any, will be taxed as capital gain. If shares of Common Stock
acquired upon the exercise of an Incentive Stock Option are disposed of before
the expiration of the one-year or two-year periods referenced above and the
amount realized is less than the fair market value of the shares at the date of
exercise, the participant's ordinary income is limited to the excess, if any, of
the amount realized less the option exercise price paid. Subject to Section
162(m) of the Code, discussed below, the Company will be entitled to a tax
deduction in regard to an Incentive Stock Option only to the extent the
participant has ordinary income upon sale or other disposition of the shares of
Common Stock.
The difference between the fair market value of Common Stock on the exercise
date and the exercise price of an Incentive Stock Option is deemed to be an item
of adjustment for purposes of the alternative minimum tax rules of the Code. The
consequences of the application of these provisions to individual participants
may vary depending on their particular circumstances.
STOCK APPRECIATION RIGHTS. Recipients of stock appreciation rights granted
under the Plan will not have taxable income upon the grant of a stock
appreciation right, but normally will recognize compensation taxable at ordinary
income rates upon exercise of the stock appreciation right equal to the amount
of cash and/or the then fair market value of any shares of Common Stock
received. Subject to Section 162(m) of the Code, discussed below, the Company
will be entitled to a tax deduction in an amount equal to the amount that the
participant is required to include in ordinary income at the time of such
inclusion and will be required to withhold taxes on such ordinary income.
RESTRICTED STOCK. A recipient of restricted stock granted under the Plan
will not have taxable income upon issuance of the restricted stock, and the
Company will not then be entitled to a deduction, unless an election is made
under Section 83(b) of the Code. However, when restrictions on shares of
restricted stock lapse, such that the shares are no longer subject to repurchase
by the Company, the employee will realize ordinary income, and the Company will
be entitled to a deduction in an amount equal to the fair market value of the
shares at the date such restrictions lapse, less the purchase price therefor. If
an election is made under Section 83(b), the employee will realize ordinary
income at the date of issuance equal to the difference between the fair market
value of the shares at that date less the purchase price therefor, and, subject
to Section 162(m) of the Code, discussed below, the Company will be entitled to
a deduction in the same amount.
9
<PAGE>
PERFORMANCE SHARES. A participant who has been granted a performance share
under the Plan will not realize taxable income at the time of grant, and the
Company will not be entitled to a deduction at that time. When an award pursuant
to a performance share is paid, whether in cash or Common Stock, the participant
will have ordinary income, and, subject to Section 162(m) of the Code, discussed
below, the Company will be entitled to a corresponding deduction. If the award
is distributed in Common Stock, the recipient will recognize ordinary income in
an amount equal to the fair market value of the stock at the time of
distribution.
SECTION 162(M) OF THE CODE. Under Section 162(m) of the Code, income tax
deductions of publicly-traded companies may be limited to the extent the total
compensation (including base salary, annual bonus, stock option exercised and
non-qualified benefits) for an executive officer exceeds $1 million (less the
amount of any "excess parachute payments" as defined in Section 280G of the
Code) in any taxable year of the Company. However, under Section 162(m), the
deduction limit does not apply to certain "performance-based" compensation
established by an independent compensation committee which is adequately
disclosed to, and approved by, stockholders. In particular, stock options and
stock appreciation rights will satisfy the performance-based exception if the
awards are made by a qualifying compensation committee, the plan sets the
maximum number of shares that can be granted to any particular employee within a
specified period and the compensation is based solely on an increase in the
stock price after the grant date (i.e. the option exercise price is equal to or
greater than the fair market value of the stock subject to the award on the
grant date). The Plan is intended to conform to the performance-based exception
under Section 162(m).
VOTE AND RECOMMENDATION
Approval of the Amendment to the Plan will require the affirmative vote of
the holders of a majority of the shares of the Common Stock represented and
voting in person or by proxy at the Annual Meeting. Abstentions as to this
Proposal 3 will be treated as votes against Proposal 3. Broker non-votes,
however, will be treated as unvoted for purposes of determining approval of
Proposal 3 and will not be counted as votes for or against Proposal 3. Properly
executed, unrevoked Proxies will be voted FOR Proposal 3 unless a vote against
Proposal 3 or abstention is specifically indicated in the Proxy.
THE BOARD RECOMMENDS A VOTE "FOR" RATIFICATION OF THE
AMENDMENT TO THE 1996 LONG TERM EQUITY INCENTIVE PLAN.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
(PROPOSAL NO. 4)
The accounting firm of KPMG Peat Marwick LLP ("Peat Marwick") has been
approved by the Board of Directors, upon recommendation by the Audit, Budgeting
and Finance Committee, to serve as independent auditors of the Company for 1998,
subject to approval by the stockholders by an affirmative vote of a majority of
the outstanding shares of the Company's Common Stock represented in person or by
proxy at the Annual Meeting.
Peat Marwick has served as independent auditors of the Company for the past
ten years. In addition to audit services, Peat Marwick has regularly provided
tax consulting services to the Company. The Company has been advised that
neither Peat Marwick nor any of its members or associates has any relationship
with the Company or any of its affiliates, except in the firm's capacity as the
Company's independent auditors and tax consultants. Representatives of Peat
Marwick will be present at the Annual Meeting, will be afforded an opportunity
to make a statement if they desire and will be available to respond to
appropriate questions from stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF KPMG PEAT MARWICK LLP.
10
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS
The following table sets forth as of December 31, 1997, the number and
percentage of the outstanding shares of Common Stock which, according to the
information supplied to the Company, were beneficially owned by (i) each person
who is currently a Director of the Company, (ii) each Named Executive Officer
(as defined below), (iii) all current Directors and Executive Officers of the
Company as a group and (iv) each person who, to the knowledge of the Company, is
the beneficial owner of more than 5% of the outstanding Common Stock. Except as
otherwise indicated, the persons named in the table have sole voting and
dispositive power with respect to all shares beneficially owned, subject to
community property laws where applicable.
<TABLE>
<CAPTION>
DEBENTURE
OPTIONS TOTAL
AND/OR COMMON
NQSOS STOCK
BENEFICIALLY PERCENT OF BENEFICIALLY PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED(1) CLASS COMMON STOCK OWNED(2) CLASS
- ------------------------------------------------ ----------- ----------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
DIRECTORS AND NAMED EXECUTIVE OFFICERS(3):
Walter Drexel................................... 1,000
NQSOs......................................... 2,222 * 3,222 *
Robert C. Horton................................ 1,500(4)
1989-B Series................................. 1,000 100%
1990-C Series................................. 1,000 100%
1991-B Series................................. 1,000 100%
1992-A Series................................. 1,000 100%
1993-A Series................................. 1,000 100%
NQSOs......................................... 2,222 * 8,722 *
Pete Ingersoll..................................
1994-A Series................................. 1,000 100%
NQSOs......................................... 2,222 * 3,222 *
Donald O. Miller................................ 646(5)
NQSOs......................................... 17,500 1.5% 18,146 *
Richard F. Nanna................................ 191
1988-A Series................................. 3,500 100%
1989-A Series................................. 1,000 100%
1990-A Series................................. 2,000 100%
NQSOs......................................... 23,427 2.0% 30,118 *
John Racich..................................... 300
NQSOs......................................... 666 * 966 *
Donald S. Robson................................ 991
NQSOs......................................... 29,600 2.6% 30,591 *
R. David Russell................................ 2,196
NQSOs......................................... 52,000 4.5% 54,196 *
Charles E. Stott, Jr............................ 275
NQSOs......................................... 666 * 941 *
R. Michael Summerford........................... 20,350
NQSOs......................................... 2,222 * 22,572 *
G. W. Thompson.................................. 11,432
NQSOs......................................... 132,000 11.5% 143,432 *
J. Kelley Williams.............................. 606,283(6)
NQSOs......................................... 6,285 * 612,568 2.3%
Allen S. Winters................................ 300
NQSOs......................................... 666 * 966 *
Robert L. Zerga - NQSOs......................... 2,222 * 2,222 *
ALL CURRENT DIRECTORS AND EXECUTIVE OFFICERS AS 645,864
A
GROUP (15 PERSONS):
1988-A Series................................. 3,500 100%
1989-A Series................................. 1,000 100%
1989-B Series................................. 1,000 100%
1990-A Series................................. 2,000 100%
1990-C Series................................. 1,000 100%
1991-B Series................................. 1,000 100%
1992-A Series................................. 1,000 100%
1993-A Series................................. 1,000 100%
1994-A Series................................. 1,000 100%
NQSOs......................................... 282,417 24.6% 940,781 3.5%
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
DEBENTURE
OPTIONS TOTAL
AND/OR COMMON
NQSOS STOCK
BENEFICIALLY PERCENT OF BENEFICIALLY PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED(1) CLASS COMMON STOCK OWNED(2) CLASS
- ------------------------------------------------ ----------- ----------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
5% BENEFICIAL HOLDERS(7):
FMR Corp ....................................... 4,000,695 4,000,695 14.9%
82 Devonshire Street
Boston, MA 02109
John A. Levin & Co. ............................ 1,657,290 1,657,290 6.2%
One Rockefeller Plaza, 25th Floor
New York, NY 10020 and
Baker Fentress & Company
200 West Madison Street
Chicago, Illinois 60606
Fleet Financial Group, Inc ..................... 1,603,032 1,603,032 6.0%
One Federal Street
Boston, MA 02110
</TABLE>
- ------------------------------
* Represents less than one percent of class.
(1) Numbers represent shares of Common Stock of the Company underlying the
Convertible Subordinated Debentures and NQSOs beneficially owned by the
Directors and Named Executive Officers that are exercisable within 60 days
of December 31, 1997. The Debentures are immediately convertible into the
specified number of shares of Convertible Preferred Stock of the same series
and then immediately convertible into the specified number of shares of
Common Stock of the Company.
(2) In connection with the Shareholder Rights Plan amended and restated on
December 31, 1996, Rights have been issued (and will be issued for any newly
outstanding Common Stock) to the outstanding shares of Common Stock of the
Company. The Rights may be exercised only after the earlier of 10 days after
a person becomes (or the directors have knowledge of someone becoming) and
Acquiring Person and 10 days after commencement of a public announcement of
a tender or exchange offer if, upon its consummation, the offeror would
beneficially own 15% or more of the Common Stock. An "Acquiring Person" was
defined to be a person who holds at least 15% of the shares of Common Stock
without the prior approval of a majority of the outside directors of the
Board. In the event someone becomes an Acquiring Person, each holder of
Rights (except the Acquiring Person, whose Rights are voided) has the right
to purchase one one-thousandth of a Series A Junior Participating Preferred
Stock ("Preferred Stock") or, in lieu of shares of Preferred Stock, to
receive a number of shares of Common Stock specified by formula at 50% of
the market price the shares of Common Stock. The Rights, which do not have
voting rights, expire in December 2006 and may be redeemed by the Company at
a price of $0.01 per Right prior to a specified period of time after the
occurrence of certain events. The Company may also exchange all of the
outstanding Rights for shares of Common Stock at a ratio of one share of
Common Stock per Right (as adjusted), any time after the first time someone
becomes an Acquiring Person. If, following an acquisition of 15% or more of
the shares of Common Stock, the Company is acquired in a merger or other
business combination or sells 50% of its assets or earnings power, each
Right (other than Rights voided as above) will entitle its holder to
purchase a number of shares specified by formula of the acquiring company
with a value of twice the then current exercise price.
(3) A mailing address for Messrs. Drexel, Horton, Ingersoll, Miller, Nanna,
Racich, Robson, Russell, Summerford, Thompson, Williams, Winters and Zerga
is c/o Getchell Gold Corporation, 5460 S. Quebec Street, Suite 240,
Englewood, Colorado 80111.
(4) Included are 500 shares owned by Mrs. Horton, of which Mr. Horton has no
voting and investment power and disclaims beneficial ownership.
(5) Included are 333 shares owned by Mrs. Miller, of which Mr. Miller has no
voting and investment power and disclaims beneficial ownership.
(6) Includes 43,747 shares held by the Jean Pittman Williams Revocable Trust, of
which Mr. Williams' wife is trustee and of which Mr. Williams disclaims
beneficial ownership and has no voting or investment power; and 116,895
shares held by JKW Holdings, Inc. of which Mr. Williams has shared voting
and investment power.
(7) Based on a Schedule 13G filed by the investor with the Securities and
Exchange Commission.
12
<PAGE>
EXECUTIVE OFFICERS OF GETCHELL GOLD CORPORATION
The following sets forth certain information with respect to the Executive
Officers of the Company, including age as of the date of the Annual Meeting. All
Executive Officers are elected by the Board of Directors and hold office until
the next Annual Meeting of Stockholders and until their successors are duly
elected and qualified.
J. KELLEY WILLIAMS is the Chairman of the Board. (See "Election of
Directors" for further information).
G. W. THOMPSON is the President and Chief Executive Officer. (See "Election
of Directors" for further information).
R. DAVID RUSSELL, 41, has been Vice President and Chief Operating Officer
since February 1995. He was General Manager of Lac Minerals U.S.A. Ltd., a gold
mining company and wholly owned subsidiary of Lac Minerals Ltd., from April 1994
to February 1995. From June 1993 to April 1994. Mr. Russell was a Manager at
Independence Mining Company, a gold mining company and a subsidiary of Minorco
Inc. From September 1992 to June 1993, he was a Manager at Hecla Mining Company,
a diversified mining company.
DONALD S. ROBSON, 45, is Vice President and Chief Financial Officer of the
Company and has been since March 1995. Mr. Robson has also served as Corporate
Secretary since October 1995. From May 1990 to September 1994, he was Vice
President, Finance of Lac Minerals Ltd., a gold mining company.
DONALD O. MILLER, 51, is the Vice President-Human Resources and Chief
Administrative Officer and has been since April 1995. From January 1993 to April
1995, Mr. Miller had his own consulting firm, GEM 2000, at which he consulted on
human resources issues, primarily in the mining industry. From May 1991 to
January 1993, he was the Vice President, Human Resources at Newmont Mining
Company, a mining company.
RICHARD F. NANNA, 49, is the Vice President, Exploration of the Company and
has been since August 1991.
ROGER D. PALMER, 48, is the Controller of the Company and has been since
April 1995. From December 1993 to April 1995, Mr. Palmer was Assistant
Controller of the Company. From June 1992 to December 1993, Mr. Palmer held the
position of Manager, Financial Planning and Analysis with the Company.
13
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth certain information regarding the annual and
long-term compensation for services in all capacities to the Company for the
years ended December 31, 1997 ("1997") and 1996 ("1996"), the six months ended
June 30, 1995 (the "1995IP" or "Interim Period"), and the year ended June 30,
1995 ("1995") of those persons who were either (i) the chief executive officer
of the Company during the last completed fiscal year or (ii) one of the other
four most highly compensated executive officers of the Company as of the end of
the last completed fiscal year whose annual salary and bonuses exceeded $100,000
(collectively, the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
ANNUAL COMPENSATION ----------------------------
--------------------------------------- SECURITIES
OTHER ANNUAL RESTRICTED UNDERLYING
SALARY COMPENSATION STOCK AWARDS OPTION/SAR
NAME AND PRINCIPAL POSITION YEAR ($) BONUS ($) (1)($) ($) AWARDS(2)
- --------------------------------- ------------ --------- ----------- --------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
G.W. Thompson ................... 1997 360,000 -- -- -- 91,640
President and Chief 1996 300,000 127,500(5) -- -- --
Executive Officer 1995 IP (4) 116,665 133,000(6) -- -- 105,000
1995(4) 183,000 -- (6) -- 65,000(7) 90,000
R. David Russell ................ 1997 220,000 -- -- -- 43,140
Vice President and Chief 1996 175,000 63,000(5) -- -- --
Operating Officer 1995 IP (4) 81,667 63,000(6) -- -- 45,000
1995(4) 55,321 -- (6) -- -- 34,000
Donald S. Robson ................ 1997 158,333 -- -- -- 20,905
Vice President and Chief 1996 140,000 36,750(5) 42,914(11) -- --
Financial Officer 1995 IP (4) 72,917 50,000(6) -- -- 24,000
1995 (4) 33,654 -- (6) -- -- 22,059
Donald O. Miller ................ 1997 128,333 -- -- 14,745
Vice President, 1996 110,000 29,700(5) 24,267(12) -- --
Human Resources 1995 IP (4) 49,998 30,000(6) -- -- 15,000
Chief Administrative Officer 1995 (4) 20,512 -- (6) -- -- 13,954
Richard F. Nanna ................ 1997 94,340 -- -- 15,963
Vice President, Exploration 1996 92,947 19,751(5) 317,779(13) -- 15,000
1995 IP (4) 45,114 13,950 -- -- --
1995 90,228 27,200 -- -- 15,427
<CAPTION>
ALL OTHER COMPENSATION
NAME AND PRINCIPAL POSITION (3)($)
- --------------------------------- ----------------------
<S> <C>
G.W. Thompson ................... 40,390(8)(9)
President and Chief 104,384(8)(9)(10)
Executive Officer 66,058(8)(9)(10)
3,008(8)(9)
R. David Russell ................ 25,725(8)(9)(14)
Vice President and Chief 41,526(8)(9)(10)(14)
Operating Officer 21,585(8)(9)(10)
218(9)
Donald S. Robson ................ 10,680(8)(9)
Vice President and Chief 13,277(8)(9)(10)
Financial Officer 42,961(8)(9)(10)
216(9)
Donald O. Miller ................ 7,812(9)
Vice President, 3,591(9)
Human Resources 705(9)
Chief Administrative Officer 351(9)
Richard F. Nanna ................ 4,554(8)(9)
Vice President, Exploration 4,198(8)(9)
2,403(8)(9)
4,804(8)(9)
</TABLE>
- ------------------------
(1) Other Annual Compensation included direct cash payments related to tax
reimbursement payments, tax planning and tax return preparation services
provided to the Named Executive Officer at the Company's expense, and tax
reimbursements paid on imputed income resulting from the personal use of
Company automobiles and club dues and memberships, including imputed income
on the same, but only if such payments exceed the lesser $50,000 or 10% of
the total salary and bonus of the Named Executive Officer.
(2) Represents NQSOs and stock appreciation rights ("SARs") granted under the
Company's Long-Term Equity Incentive Plans.
(3) All Other Compensation consists of Company contributions related to the
Company's 401(k) Plan, relocation expenses and executive life insurance paid
by the Company on the Named Executive Officer's behalf.
(4) In September 1995, the Company converted from a fiscal year ended June 30 to
a fiscal year ended December 31. For Messrs. Thompson, Russell, Robson and
Miller 1995 amounts represent compensation from the date of hire through
June 30, 1995. These dates were September 1, 1994 for Mr. Thompson, February
6, 1995 for Mr. Russell, March 21, 1995 for Mr. Robson and April 17, 1995
for Mr. Miller. For all Name Executive Officers the 1995 IP amounts
represent compensation from July 1, 1995 through December 31, 1995.
(5) Represents bonuses earned for the year ended December 31, 1996 which were
paid in the year ended December 31, 1997.
14
<PAGE>
(6) Mr. Thompson's bonus was calculated for a 16-month period (September 1994
through December 1995), incorporating performance for the year ended June
30, 1995 and the Interim Period. The bonuses of Messrs. Russell, Robson and
Miller were based on a period from their respective dates of hire in 1995
through December 31, 1995. These bonuses were all paid in the year ended
December 31, 1996.
(7) Includes 10,000 shares of restricted stock issued to Mr. Thompson upon being
named President and Chief Executive Officer, of which he has sole voting and
investment power. At December 31, 1997, such shares had a market value of
$245,000. All of the shares vested on February 21, 1996.
(8) Company contributions related to the Company's 401(k) Plan for the year
ended December 31, 1997 were $4,850 for Mr. Thompson, $8,425 for Mr.
Russell, $4,792 for Mr. Robson and $3,774 for Mr. Nanna. For the year ended
December 31, 1996, Company contributions were $10,053 for Mr. Thompson,
$6,766 for Mr. Russell, $9,627 for Mr. Robson and $3,718 for Mr. Nanna. For
the Interim Period, Company contributions were $3,078 for Mr. Thompson, $466
for Mr. Russell, $1,155 for Mr. Robson and $1,828 for Mr. Nanna. For the
year ended June 30, 1995, Company contributions were $2,000 for Mr. Thompson
and $3,655 for Mr. Nanna.
(9) Executive Life Insurance paid by the Company for the year ended December 31,
1997 was $35,540 for Mr. Thompson, $4,500 for Mr. Russell, $5,888 for Mr.
Robson, $7,812 for Mr. Miller and $780 for Mr. Nanna. For the year ended
December 31, 1996, Executive Life Insurance paid by the Company was $16,547
for Mr. Thompson, $2,120 for Mr. Russell, $1,663 for Mr. Robson, $3,591 for
Mr. Miller and $480 for Mr. Nanna. Executive Life Insurance paid by the
Company for the Interim Period was $2,625 for Mr. Thompson, $261 for Mr.
Russell, $324 for Mr. Robson, $705 for Mr. Miller and $575 for Mr. Nanna.
Executive Life Insurance paid by the Company in the year ended June 30, 1995
was $1,008 for Mr. Thompson, $218 for Mr. Russell, $216 for Mr. Robson, $351
for Mr. Miller and $1,149 for Mr. Nanna.
(10) Relocation expenses paid by the Company during the year ended December 31,
1996 on behalf of Mr. Thompson were $77,784, on behalf of Mr. Russell were
$24,107 and on behalf of Mr. Robson were $1,987. Relocation expenses paid by
the Company during the Interim Period on behalf of Mr. Thompson were
$60,355, on behalf of Mr. Russell were $20,858 and on behalf of Mr. Robson
were $41,482.
(11) Includes direct cash payments related to tax reimbursement payments of
$26,316, tax planning and tax return preparation services at the Company's
expense of $6,641, and tax reimbursements paid on imputed income resulting
from the personal use of Company automobiles of $4,560 and club dues and
memberships of $5,397, including imputed income on the same.
(12) Includes direct cash payments related to tax reimbursement payments of
$12,884, tax planning services at the Company's expense of $2,398, and tax
reimbursements paid on imputed income resulting from the personal use of
Company automobiles of $4,748 and club dues and memberships of $4,237,
including imputed income on the same.
(13) Includes direct cash payments related to tax reimbursement payments of
$316,674 and tax reimbursements paid on imputed income resulting from the
personal use of Company automobiles of $1,105, including imputed income on
the same.
(14) Includes imputed interest calculated at 8% on a $160,000 interest-free
bridge loan related to Mr. Russell's northern California residence, which
total $12,800 and $8,533 in 1997 and 1996, respectively.
15
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information with respect to grants of
stock options and SARs to Named Executive Officers during the year ended
December 31, 1997.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE
AT ASSUMED ANNUAL
RATES
NUMBER OF % OF TOTAL MARKET OF STOCK PRICE
SECURITIES OPTIONS/ SARS PRICE ON APPRECIATION
UNDERLYING GRANTED EXERCISE DATE OF FOR OPTION TERM(4)
OPTIONS/ SARS TO ALL PRICE GRANT EXPIRATION ----------------------
NAME GRANTED EMPLOYEES(3) ($/SHARE) ($/SHARE) DATE 0% 5%
- ----------------------------------- ------------- ----------------- ----------- ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
G.W. Thompson...................... 58,340(1) 12.0 40.25 40.25 2/14/2007 -- 1,370,319
G.W. Thompson...................... 33,300(2) 6.9 6.81 40.25 8/23/2004 1,076,256 1,606,717
R. David Russell................... 30,560(1) 6.3 40.25 40.25 4/01/2007 -- 717,808
R. David Russell................... 12,580(2) 2.6 8.44 40.25 2/09/2005 386,111 621,140
Donald S. Robson................... 13,505(1) 2.8 40.25 40.25 4/01/2007 -- 317,212
Donald S. Robson................... 7,400(2) 1.5 8.50 40.25 3/21/2005 226,662 364,914
Donald O. Miller................... 9,935(1) 2.0 40.25 40.25 2/14/2007 -- 233,358
Donald O. Miller................... 4,810(2) 1.0 10.75 40.25 4/18/2005 136,507 226,371
Richard F. Nanna................... 6,000(1) 1.2 40.25 40.25 4/01/2007 -- 140,931
Richard F. Nanna................... 1,295(2) 0.3 8.50 40.25 7/14/1998 39,665 42,199
Richard F. Nanna................... 370(2) 0.1 9.75 40.25 8/10/1999 10,870 12,354
Richard F. Nanna................... 740(2) 0.2 7.63 40.25 8/09/2000 23,313 27,877
Richard F. Nanna................... 1,850(2) 0.4 6.69 40.25 8/12/2003 60,018 84,638
Richard F. Nanna................... 2,701(2) 0.6 7.25 40.25 8/11/2004 86,107 129,134
Richard F. Nanna................... 3,007(2) 0.6 11.44 40.25 5/11/2005 83,271 139,450
<CAPTION>
NAME 10%
- ----------------------------------- ----------
<S> <C>
G.W. Thompson...................... 3,572,919
G.W. Thompson...................... 2,312,461
R. David Russell................... 1,871,587
R. David Russell................... 949,049
Donald S. Robson................... 827,087
Donald S. Robson................... 557,801
Donald O. Miller................... 608,449
Donald O. Miller................... 351,748
Richard F. Nanna................... 367,458
Richard F. Nanna................... 44,733
Richard F. Nanna................... 13,911
Richard F. Nanna................... 32,898
Richard F. Nanna................... 115,872
Richard F. Nanna................... 186,377
Richard F. Nanna................... 217,830
</TABLE>
- ------------------------------
(1) Options represent NQSOs that vest over four years from the date of grant at
a rate of 20% in the first three years and 40% in the final year. All
options were granted for a term of ten years, subject to earlier termination
in certain events. The exercise price is equal to the fair market value of
the Company's Common Stock on the date of grant.
(2) Represents SARs that are all currently vested.
(3) Based on 486,081 total options granted in the year ended December 31, 1997.
(4) The amounts shown are for illustrative purposes only. Potential gains are
net of the exercise price. Amounts represent hypothetical gains that could
be achieved for the respective options if exercised at the end of the option
term. The assumed 0%, 5% and 10% rates of stock price appreciation are
provide in accordance with the rules of the Securities and Exchange
Commission and do not represent the Company's estimate or projection of the
future Common Stock price. Actual gains, if any, on stock option exercises
are dependent upon the future financial performance of the Company, overall
market conditions and the option holders' continued employment through the
vesting period. This table does not take into account any appreciation in
the price of the Common Stock from the date of grant to the date of this
Annual Report other than the columns reflecting assumed rates of
appreciation of 0%, 5% and 10%.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table sets forth certain information with respect to the Named
Executive Officers concerning the exercise of options and SARs in 1997 and
unexercised options and SARs held at December 31, 1997.
<TABLE>
<CAPTION>
VALUE OF
UNEXERCISED
NUMBER OF SECURITIES IN-THE-MONEY
UNDERLYING UNEXERCISED OPTIONS AT
OPTIONS AT DECEMBER 31,
DECEMBER 31, 1997(#) 1997(1)($)
SHARES ACQUIRED VALUE ----------------------------- ------------
NAME ON EXERCISE(#) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE
- ------------------------------------------------ --------------- ----------- ------------ --------------- ------------
<S> <C> <C> <C> <C> <C>
G.W. Thompson................................... -- -- 165,300 121,340 2,359,677
R. David Russell................................ -- -- 64,580 57,560 824,691
Donald S. Robson................................ -- -- 37,000 27,905 479,200
Donald O. Miller................................ 1,500 $ 29,625 22,310 18,935 264,012
Richard F. Nanna................................ -- -- 39,890 18,000 596,965
<CAPTION>
NAME UNEXERCISABLE
- ------------------------------------------------ ---------------
<S> <C>
G.W. Thompson................................... 267,750
R. David Russell................................ 114,750
Donald S. Robson................................ 61,200
Donald O. Miller................................ 38,250
Richard F. Nanna................................ --
</TABLE>
- ------------------------------
(1) Value was computed as the difference between the individual option or SAR
price and the closing sales price of the Company's Common Stock on December
31, 1997 ($24.50). Only options and SARs with fair market value in excess of
the exercise price are reflected in this column.
16
<PAGE>
OTHER COMPENSATION
Employees participate in a noncontributory Retirement Plan established by
the Company. Employees become 100% vested after five years of employment. The
plan provides for normal retirement at age sixty-five with actuarially adjusted
provisions for early and postponed retirement dates. Retirement benefits are
based on years of service and average compensation (wage and salary) of the five
highest consecutive years during employment. Theoretical benefits payable under
the plan are reflected in the estimated retirement plan table below and are not
subject to any reduction for social security benefits or other offset amounts.
PENSION PLAN TABLE
The following table shows the estimated annual retirement benefit payable to
participating employees including Named Executive Officers in earnings and years
of service classifications as indicated.
<TABLE>
<CAPTION>
ESTIMATED ANNUAL BENEFITS FOR YEARS OF CREDITED
SERVICE
AVERAGE ANNUAL COMPENSATION ------------------------------------------------
(FIVE HIGHEST CONSECUTIVE YEARS) 10 YEARS 20 YEARS 30 YEARS 40 YEARS
- ------------------------------------------------- ----------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
$25,000.......................................... $ 4,212 $ 8,424 $ 12,136 $ 16,848
$50,000.......................................... 8,712 17,424 26,136 34,848
$100,000......................................... 17,712 35,424 53,136 70,848
$150,000 or greater.............................. 26,712 53,424 80,136 106,848
</TABLE>
Effective November 14, 1997, the Compensation Committee recommended and the
Board of Directors approved a non-qualified and unfunded Supplemental Executive
Retirement Plan. The plan will provide executives who were over the age of 50 at
the time of adoption of the plan, specifically G.W. Thompson and Donald O.
Miller, two years credited service for each year of employment from the approval
of the plan, until retirement, up to a maximum of 25 years, with Mr. Thompson
receiving one extra year to his first two-year credit. Additional executives
shall receive such benefit at the discretion of the Compensation Committee.
Years of service for the Named Executive Officers are: G.W. Thompson, three
years; R. David Russell, Donald S. Robson and Donald O. Miller, two years each;
and Richard F. Nanna, sixteen years.
During the year ended December 31, 1997, the Company entered into new
termination agreements with G.W. Thompson, R. David Russell, Donald S. Robson,
Donald O. Miller and Richard F. Nanna (collectively, the "Termination
Agreements") as the prior termination agreements expired in 1997. The
Termination Agreements have substantially similar terms to the old termination
agreements. The Termination Agreements expire on June 30, 2000 unless a Change
of Control (as defined therein) occurs, in which case the Termination Agreements
expire three months from the end of the month in which the Change of Control
occurred. Upon termination without Cause (as defined therein) or for Disability
(as defined therein) or upon Voluntary Resignation (as defined therein), and in
the case of Mr. Nanna's Termination Agreement, such Voluntary Resignation must
be for Good Reason (as defined therein), each of Messrs. Thompson, Russell,
Robson and Miller would be paid two times the sum of his annual base salary and
bonuses averaged over the three year period ending on the date of termination,
with certain benefit plans continuing for a period of 36 months, and Mr. Nanna
would be paid one and a half times the sum of his annual base salary and bonuses
averaged over the three year period ending on the date of termination, with
certain benefit plans continuing for a period of 24 months. Upon termination,
the individual would have the option, unless he notifies the Company otherwise,
to receive a cash payment equal to the cash value of all his NQSOs, Debenture
Options, Debentures and Stock Appreciation Rights, whether then exercisable or
not. No individual would receive payments in the event of death. The Termination
Agreements also provide for, among other things, an additional payment to be
made by the Company to the individual if any of the severance payments provided
for in the Termination Agreement or any other payments made pursuant to a Change
of Control of the Company (the "Total Payments") become subject to an additional
tax ("Excise Tax") imposed by Section 4999 of the Code, such that the net of all
of the payments received by the individual after the imposition of the Excise
Tax on the Total Payments and the federal income tax on the additional payment
shall be equal to the Total Payments.
17
<PAGE>
COMPENSATION, HUMAN RESOURCE & DIRECTOR AFFAIRS COMMITTEE
INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Drexel, Horton, Ingersoll, Stott and Zerga, who served as members of
the Compensation, Human Resource & Director Affairs Committee during 1997, are
not now and never have been officers or employees of the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company currently has a $160,000 interest-free bridge loan to Mr. R.
David Russell, Vice President and Chief Operating Officer, representing an
approximation of the equity value of a residence in northern California. Such
amount is due upon the sale of Mr. Russell's residence in northern California.
REPORT OF THE COMPANY'S COMPENSATION, HUMAN RESOURCE &
DIRECTOR AFFAIRS COMMITTEE ON EXECUTIVE COMPENSATION
COMMITTEE MEMBERS. The Compensation, Human Resource & Director Affairs
Committee (the "Compensation Committee") consists of at least two outside
members of the Board, with one member serving as chairman. There are currently
five members.
CHARTER. The Compensation Committee serves at the direction of the Board of
Directors. The primary responsibility of the Compensation Committee is to assure
development, implementation and maintenance of competitive compensation and
benefits to attract, motivate and retain highly qualified officers, management
and employees.
DUTIES. The Compensation Committee's responsibilities include the
following:
(a) To recommend to the Board of Directors compensation policies for the
Company;
(b) To recommend to the Board of Directors the base salary and annual
incentive awards of executive officers of the Company; and
(c) To recommend Long Term Equity Incentive Plan participation and awards.
PHILOSOPHY. The Company's compensation philosophy is designed to maximize
stockholder value and serve the best interest of its stockholders and employees.
The philosophy incorporates the following principles:
(a) Compensation should attract and retain qualified employees and stimulate
their useful and profitable efforts on behalf of the Company;
(b) Compensation should be internally equitable and externally competitive;
and
(c) Compensation should focus on "total" compensation which is defined as
base salary, annual incentive, long-term incentive (equity), and
benefits.
COMPONENTS OF EXECUTIVE COMPENSATION
BASE SALARY. The Compensation Committee regularly reviews and compares base
salaries and salary ranges for similar positions in other companies in relevant
markets defined by company size, industry and location. Executive, technical and
other highly compensated positions are valued in the national market using data
developed by nationally recognized compensation consulting firms. Base salary
for these positions is targeted at the median of a peer group of companies. The
peer group is reviewed regularly and generally established on the basis of
market capitalization value. Peer companies are public companies with products,
markets and other mining characteristics comparable to the Company. The
published compensation data used by the Compensation Committee to establish base
salary range do not necessarily rely on the same peer group of companies
included in the Stock Performance Graph. The Compensation Committee annually
recommends to the Board of Directors adjustments to salary ranges and actual
salaries, taking into consideration position value, market pricing, operating
results, individual performance and other factors. For 1997, the Compensation
Committee incorporated the national consultant's base salary midpoint
recommendations.
ANNUAL INCENTIVE AWARDS. Annual incentive awards, in the form of cash
payments, are designed to achieve specific short-term results and to further
long-term objectives. Financial and other objectives for
18
<PAGE>
the Company and program participants are set at the beginning of each fiscal
year. The process involves the Board of Directors, the Compensation Committee,
the Chief Executive Officer and program participants. Each participant in the
plan establishes goals and objectives at the beginning of the fiscal year.
Performance is measured at year-end against these pre-established objectives and
annual incentive awards are determined based on performance.
The Compensation Committee annually reviews potential incentive awards for
officers as a percentage of base salary and recommends adjustments to the Board
of Directors. At fiscal year end, the Compensation Committee recommends
incentive awards to the Board of Directors upon review of Company results and
performance versus objectives and personal performance of participants versus
objectives.
Base salary and annual incentive (cash compensation) is generally targeted
at the 50th percentile of the peer group of companies.
In February 1998, the Board of Directors approved the Compensation
Committee's recommendations to withhold annual incentive awards for 1997
performance due to industry conditions, the Company's current cash position and
stockholder value.
LONG TERM EQUITY INCENTIVE AWARDS. Participation in the Company's Long Term
Equity Incentive Plan is generally limited to officers and key managers based on
responsibility, authority and potential impact on the Company. The Compensation
Committee annually reviews participants and potential award ranges. The
opportunity range for each participant is based on guidelines developed by
nationally recognized compensation consultants. At fiscal year end, the
Compensation Committee reviews Company condition and performance and individual
performance versus long-term goals and determines awards for officers and key
managers. Awards may be in the form of stock options, restricted stock, stock
appreciation rights and performance shares. In 1996, the Compensation Committee
determined that it was in the best interest of the Company to grant stock
options to all employees on an ongoing basis as a means of retaining and
motivating individuals. This also allowed employees to develop an ownership
position, thus aligning them with the long-term goals of both the Company and
other stockholders.
In February 1998, based on the Compensation Committee's performance
evaluations and the recommendations of a national consulting firm, the Board of
Directors approved a grant of 30,000 NQSOs to three executive officers other
than the CEO.
CHIEF EXECUTIVE OFFICER COMPENSATION. The Compensation Committee annually
reviews the Chief Executive Officer's performance and compensation and
recommends changes as appropriate to the Board of Directors. In its review, the
Compensation Committee considers the Company's condition, operating results,
performance versus short-term and long-term objectives, economic environment,
industry conditions and increased stockholder value. The Compensation Committee
also considers the Chief Executive Officer's performance against short-term and
long-term objectives, compensation versus peers, and other factors. In view of
industry conditions and the Company's cash position, it was determined that no
annual incentive awards would be paid to management for 1997 performance. As a
result, no incentive award payment was approved for Mr. Thompson.
In February 1998, based on the long term incentive recommendations of a
national consulting firm, the Compensation Committee recommended, and the Board
of Directors approved, an award of 32,000 NQSOs to Mr. Thompson.
COMPENSATION, HUMAN RESOURCE &
DIRECTOR AFFAIRS COMMITTEE
Robert L. Zerga, Chairman
Walter Drexel
Robert C. Horton
Pete Ingersoll
Charles E. Stott, Jr.
19
<PAGE>
The report of the Compensation, Human Resource & Director Affairs Committee
shall not be deemed incorporated by reference by any general statement
incorporating by reference this proxy statement into any filing under the
Securities Act of 1933, as amended, or under the Securities Exchange Act of
1934, as amended, (collectively the "Acts"), except to the extent the Company
specifically incorporates this information by reference and shall not otherwise
be deemed filed under such Acts.
STOCK PERFORMANCE GRAPH
The following line graph compares the cumulative total stockholder return on
the Common Stock during the five-year period ended December 31, 1997, to the
Standard & Poor's ("S&P") Stock Index, S&P Gold & Precious Metals Mining ("S&P
Gold") Index and that of peer issuers selected by the Company for the same
period (the "Peer Group"). The Company has selected to use the S& P Gold Index
in the future rather than the Peer Group because the S&P Gold Index represents a
published industry index that the Company perceives as a better representation
of its industry. The Peer Group includes Amax Gold Inc., Battle Mountain Gold,
Echo Bay Mines, Pegasus Gold Inc., Agnico-Eagle Mines Limited, Meridan Gold Inc.
and Atlas Corporation. The graph assumes a one hundred dollar investment on
December 31, 1992, and reinvestment of dividends (if any).
<TABLE>
<CAPTION>
12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Getchell Gold......................................... $ 100 $ 118 $ 141 $ 363 $ 627 $ 400
S&P 500 Index......................................... $ 100 $ 110 $ 111 $ 153 $ 189 $ 251
S&P Gold Index........................................ $ 100 $ 183 $ 148 $ 167 $ 165 $ 109
Peer Group............................................ $ 100 $ 202 $ 177 $ 189 $ 174 $ 103
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
COMPARISON OF FIVE-YEAR CUMULATIVE RETURN
<S> <C> <C> <C> <C>
Getchell Gold Corporation, S&P 500, S&P Gold Index & Peer Group
Getchell S&P 500 S&P Gold Index Peers
Dec-92 $100 $100 $100 $100
Dec-93 $118 $110 $183 $202
Dec-94 $141 $111 $148 $177
Dec-95 $363 $153 $167 $189
Dec-96 $627 $189 $165 $174
Dec-97 $400 $251 $109 $103
</TABLE>
20
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires Officers and
Directors of the Company and persons who own more than ten percent of a
registered class of the Company's equity securities to file reports of ownership
and changes in their ownership with the Securities and Exchange Commission and
the American Stock Exchange. Based on information provided by its Officers and
Directors, for the year ended December 31, 1997, its Officers and Directors were
in compliance with all applicable filing requirements.
FORM 10-K
THE COMPANY WILL PROVIDE WITHOUT CHARGE A COPY OF THE COMPANY'S MOST RECENT
ANNUAL REPORT ON FORM 10-K, AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, UPON WRITTEN REQUEST TO THE COMPANY'S SECRETARY AT:
Getchell Gold Corporation
5460 S. Quebec St., Suite 240
Englewood, Colorado 80111
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors of the
Company knows of no other matters which may come before the Annual Meeting.
However, if any matters other than those referred to herein should be presented
properly for consideration and action at the Annual Meeting, or any adjournment
or postponement thereof, the proxies will be voted with respect thereto in
accordance with the best judgment and in the discretion of the proxy holders.
Please sign the enclosed proxy and return it in the enclosed return
envelope.
/s/ Donald S. Robson
Donald S. Robson
SECRETARY
Dated: April 3, 1998
21
<PAGE>
APPENDIX A
GETCHELL GOLD CORPORATION
1998 STOCK OPTION PLAN
FOR OUTSIDE DIRECTORS
Getchell Gold Corporation, (the "Company"), hereby adopts this Getchell Gold
Corporation 1998 Stock Option Plan for Outside Directors. The purpose of this
stock option plan is to obtain, motivate and retain experienced Outside
Directors by offering them an opportunity to become owners of the Common Stock
of the Company.
ARTICLE I.
DEFINITIONS
Whenever the following terms are used in this Plan, they shall have the
meaning specified below unless the context clearly indicates to the contrary.
The masculine pronoun shall include the feminine and neuter and the singular
shall include the plural, where the context so indicates.
SECTION 1.1. BOARD
"Board" shall mean the Board of Directors of the Company.
SECTION 1.2. CODE
"Code" shall mean the Internal Revenue Code of 1986, as amended.
SECTION 1.3. COMMON STOCK
"Common Stock" shall mean the Company's common stock, $.0001 par value.
SECTION 1.4. COMPANY
"Company" shall mean Getchell Gold Corporation, a Delaware corporation.
SECTION 1.5. DIRECTOR FEES
"Director Fees" shall mean the annual retainer fee and regular meeting fees,
including committee or Board chairperson fees, if any, provided to be paid by
the Company to an Outside Director.
SECTION 1.6. EXCHANGE ACT
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
SECTION 1.7. FAIR MARKET VALUE
"Fair Market Value" shall mean as of any given date:
(A) If the Common Stock is listed on any established stock exchange or a
national market system, including without limitation the American Stock
Exchange, the closing sales price for the Common Stock or the closing bid if no
sales were reported, as quoted on such system or exchange (or the largest such
exchange) for the date the value is to be determined (or if there are no sales
for such date, then for the last preceding business day on which there were
sales), as reported in the WALL STREET JOURNAL or similar publication.
(B) If the Common Stock is regularly quoted by a recognized securities
dealer but selling prices are not reported, the mean between the high bid and
low asked prices for the Common Stock on the date the
22
<PAGE>
value is to be determined (or if there are no quoted prices for the date of
grant, then for the last preceding business day on which there were quoted
prices).
(C) In the absence of an established market for the Common Stock, as
determined in good faith by the Board, with reference to the Company's net
worth, prospective earning power, dividend-paying capacity, and other relevant
factors, including the goodwill of the Company, the economic outlook in the
Company's industry, the Company's position in the industry and its management,
and the values of stock of other corporations in the same or a similar line of
business.
SECTION 1.8. OPTION
"Option" shall mean a non-qualified option to purchase Common Stock of the
Company, granted under the Plan.
SECTION 1.9. OPTIONEE
"Optionee" shall mean an Outside Director to whom an Option is granted under
the Plan.
SECTION 1.10. OUTSIDE DIRECTOR
"Outside Director" shall mean a member of the Board who is not an employee
of the Company, a Parent Corporation or a Subsidiary under Section 3401(c) of
the Code and who is not legally or contractually prohibited from receiving and
holding personally an Option.
SECTION 1.11. PARENT CORPORATION
"Parent Corporation" shall mean any corporation in an unbroken chain of
corporations ending with the Company if each of the corporations other than the
Company then owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain.
SECTION 1.12. PERMITTED TRANSFEREE
"Permitted Transferee" shall mean (i) one or more of the following family
members of an Optionee: spouse, former spouse, child (whether natural or
adopted), stepchild, and any other lineal descendant of the Optionee, (ii) a
trust, partnership or other entity established and existing for the sole benefit
of, or under the sole control of, one or more of the above family members of the
Optionee, or (iii) any other transferee specifically approved by the Board after
taking into account any state or federal tax or securities laws applicable to
transferable Options.
SECTION 1.13. PLAN
"Plan" shall mean this Getchell Gold Corporation 1998 Stock Option Plan for
Outside Directors.
SECTION 1.14. RULE 16b-3
"Rule 16b-3" shall mean that certain Rule 16b-3 under the Exchange Act, as
such Rule may be amended in the future.
SECTION 1.15. SECRETARY
"Secretary" shall mean the Secretary of the Company.
SECTION 1.16. SECURITIES ACT
"Securities Act" shall mean the Securities Act of 1933, as amended.
23
<PAGE>
SECTION 1.17. SUBSIDIARY
"Subsidiary" shall mean any corporation in an unbroken chain of corporations
beginning with the Company if each of the corporations other than the last
corporation in the unbroken chain then owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain. "Subsidiary" shall also mean any partnership or
limited liability company in which the Company and/or any Subsidiary owns more
than 50% of the capital or profits interests.
ARTICLE II.
SHARES SUBJECT TO PLAN
SECTION 2.1. SHARES SUBJECT TO PLAN
The shares of stock subject to Options shall be shares of the Common Stock.
The aggregate number of such shares which may be issued upon exercise of Options
shall not exceed 170,000.
SECTION 2.2. UNEXERCISED OPTIONS
If any Option expires or is canceled without having been fully exercised,
the number of shares subject to such Option but as to which such Option was not
exercised prior to its expiration or cancellation may again be granted
hereunder, subject to the limitations of Section 2.1.
SECTION 2.3. CHANGES IN COMPANY'S SHARES
In the event that the outstanding shares of Common Stock of the Company are
hereafter changed into or exchanged for a different number or kind of shares or
other securities of the Company, or of another corporation, by reason of
reorganization, merger, consolidation, recapitalization, reclassification, or
the number of shares is increased or decreased by reason of a stock split-up,
stock dividend, combination of shares or any other increase or decrease in the
number of such shares of Common Stock effected without receipt of consideration
by the Company (provided, however, that conversion of any convertible securities
of the Company shall not be deemed to have been effected without receipt of
consideration), the Board acting in good faith shall make appropriate
adjustments in the number and kind of shares for the purchase of which Options
may be granted, including adjustments of the limitations in Section 2.1 on the
maximum number and kind of shares which may be issued on exercise of Options.
ARTICLE III.
GRANTING OF OPTIONS
SECTION 3.1. ELIGIBILITY
Any Outside Director of the Company shall be eligible to be granted Options.
SECTION 3.2. GRANTING OF OPTIONS
3.2.1. INITIAL GRANT
Each person who is an Outside Director at the time the Plan is adopted by
the Board, shall immediately upon such adoption be granted an Option to purchase
5,000 shares of Common Stock. Any person who is not an Outside Director at such
time, but who later becomes an Outside Director within six months following an
Annual Meeting of Stockholders of the Company, shall be granted on the date of
his election or appointment as an Outside Director an Option to purchase 5,000
shares of Common Stock.
3.2.2. SUBSEQUENT GRANTS
Each Outside Director shall be granted on the date of each Annual Meeting of
Stockholders of the Company (so long as he is an Outside Director at the close
of business on the day of such Annual Meeting)
24
<PAGE>
an Option to purchase 5,000 shares of Common Stock; PROVIDED, HOWEVER, that no
Outside Director may acquire more than an aggregate of 15,000 shares of Common
Stock pursuant to Sections 3.2.1. and 3.2.2. of this Plan.
3.2.3. GRANTS IN LIEU OF CASH COMPENSATION
Each Outside Director may elect to forego cash payment of all or any
mechanically calculable portion of his or her Director Fees for any fiscal year
("Cash Replacement Fees") and receive, on the last day of such fiscal year, an
Option to purchase the number of whole shares equal to the Cash Replacement Fees
divided by one-third of the Fair Market Value of the Common Stock on the last
day of such fiscal year rounded up to reflect fractional shares. An election
pursuant to this Section 3.2.3 shall be made prior to the date that is six
months from the commencement of the fiscal year to which the grant relates. Such
election shall be irrevocable for such fiscal year, and such election can only
be changed with respect to future fiscal years by written notice at least six
months prior to the commencement of the fiscal year in question.
SECTION 3.3. NO OPTION GRANT WHERE PROHIBITED
No person shall be granted an Option under this Plan if at the time of such
grant, the grant is prohibited by applicable law or by the policies of the
employer of such person or of any other company of which such person is a member
of the board of directors or a general partner.
ARTICLE IV.
TERMS OF OPTIONS
SECTION 4.1. OPTION AGREEMENT
As soon as practicable after an Outside Director becomes entitled to the
grant of an Option under Section 3.2 above, the Secretary shall cause to be
executed a written Stock Option Agreement, which shall be executed by the
Outside Director and an authorized officer of the Company and which shall
contain such terms and conditions as approved by the Board consistent with the
Plan.
SECTION 4.2. OPTION PRICE
The exercise price per share subject to each Option granted pursuant to
Section 3.2 shall be the Fair Market Value on the date such Option is granted.
SECTION 4.3. TERM
The term of each Option shall be eight years from the date such Option first
becomes exercisable, subject to earlier termination in accordance with Sections
4.5 or 4.6.
SECTION 4.4. EXERCISE SCHEDULE
An Option granted under Section 3.2.1, 3.2.2 or 3.2.3 shall be exercisable
at the later of (i) the date of grant or (ii) November 14, 1999. Notwithstanding
the foregoing, an Option held by an Outside Director shall become immediately
exercisable in full upon the adoption by the Company of a plan for liquidation,
dissolution, merger, consolidation or reorganization as described in clause (x),
(y) or (z) of Section 4.6., unless the exercise of such Option would preclude
the application of pooling of interests accounting treatment to such
transaction.
SECTION 4.5. TERMINATION OF MEMBERSHIP ON THE BOARD
Except in the case of death, disability, serious illness, age or an
unsuccessful attempt to win reelection to the Board after nomination for
election at the recommendation of the Board, if an Outside Director's
25
<PAGE>
membership on the Board terminates for any reason, an Option held at the date of
termination may be exercised in whole or in part for up to 100% of the shares
covered by such Option at any time within one year after the date of such
termination (but in no event after the term of the Option expires) and shall
thereafter terminate. If an Outside Director's membership terminates because of
death, disability, serious illness, age or an unsuccessful attempt to win
reelection to the Board after nomination for election at the recommendation of
the Board, an Option held at the date of such termination may be exercised for
up to 100% of the shares covered by such Options at any time within three years
after the date of such termination (but in no event after the term of the Option
expires) and shall thereafter terminate.
SECTION 4.6. CHANGE OF CONTROL
In the event of (x) a dissolution or liquidation of the Company, (y) a
merger or consolidation in which the Company is not the surviving corporation or
(z) any other capital reorganization in which more than fifty percent (50%) of
the shares of the Company entitled to vote are exchanged, the Outside Director
shall have the right to exercise such Option as to an equivalent number of
shares of stock of any corporation succeeding the Company or acquiring its
business by reason of such liquidation, dissolution, merger, consolidation or
reorganization, unless such exercise would preclude the application of pooling
of interests accounting treatment to such transaction.
SECTION 4.7. ADJUSTMENTS IN OUTSTANDING OPTIONS
In the event that the outstanding shares of Common Stock subject to Options
are changed into or exchanged for a different number or kind of shares of the
Company or other securities of the Company by reason of merger, consolidation,
recapitalization, reclassification, or the number of shares is increased or
decreased by reason of a stock split-up, stock dividend, combination of shares
or any other increase or decrease in the number of such shares of Common Stock
effected without receipt of consideration by the Company (provided, however,
that conversion of any convertible securities of the Company shall not be deemed
to have been effected without receipt of consideration), the Board acting in
good faith shall make appropriate adjustments in the number and kind of shares
as to which all outstanding Options, or portions thereof then Unexercised, shall
be exercisable, to the end that after such event the Optionee's proportionate
interest shall be maintained as before the occurrence of such event. Such
adjustment in an outstanding Option shall be made without change in the total
price applicable to the Option or the unexercised portion of the Option (except
for any change in the aggregate price resulting from rounding-off of share
quantities or prices) and with any necessary corresponding adjustment in Option
price per share. Any such adjustment made by the Board shall be final and
binding upon all Optionees, the Company and all other interested persons. This
Section 4.7 shall be subject to Section 4.6.
ARTICLE V.
EXERCISE OF OPTIONS
SECTION 5.1. PERSON ELIGIBLE TO EXERCISE
Except as provided in Section 7.1, during the lifetime of the Optionee, only
the Optionee may exercise an Option (or any portion thereof) granted to the
Optionee. After the death of the Optionee, any exercisable portion of an Option
may, prior to the time when such portion becomes unexercisable under the Plan or
the applicable Stock Option Agreement, be exercised by the Optionee's personal
representative or by any person empowered to do so under the deceased Optionee's
will or under the then applicable laws of descent and distribution.
SECTION 5.2. PARTIAL EXERCISE
At any time and from time to time prior to the time when any exercisable
Option or exercisable portion thereof becomes unexercisable under the Plan or
the applicable Stock Option Agreement, such
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Option or portion thereof may be exercised in whole or in part; provided,
however, that the Company shall not be required to issue fractional shares and
any partial exercise of the Option shall be with respect to no less than 100
shares (or such lesser remaining number of shares subject to the Option).
SECTION 5.3. MANNER OF EXERCISE
An exercisable Option, or any exercisable portion thereof, may be exercised
solely by delivery to the Secretary of all of the following prior to the time
when such Option or such portion becomes unexercisable under the Plan or the
applicable Stock Option Agreement:
5.3.1. NOTICE
Notice in writing signed by the Optionee or other person then entitled to
exercise such Option or portion, stating that such Option or portion is
exercised, such notice complying with all applicable rules established by the
Board.
5.3.2. PAYMENT
(a) Full payment (in cash or by check) for the shares with respect to which
such Option or portion is thereby exercised; or
(b) With the consent of the Board, shares of the Company's Common Stock
owned by the Optionee duly endorsed for transfer to the Company; or
(c) With the consent of the Board and subject to the timing requirements of
Section 5.4, shares of the Company's Common Stock issuable to the Optionee upon
exercise of the Option, with a Fair Market Value on the date of Option exercise
equal to the aggregate Option price of the shares with respect to which such
Option or portion is thereby exercised; or
(d) With the consent of the Board, a full recourse promissory note bearing
interest (at least such rate as shall then preclude the imputation of interest
under the Code or any successor provision) and payable upon such terms as may be
prescribed by the Board. The Board may also prescribe the form of such note and
the security to be given for such note. No Option may, however, be exercised by
delivery of a promissory note or by a loan from the Company when or where such
loan or other extension of credit is prohibited by law; or
(e) With the consent of the Board, any combination of the consideration
provided in the foregoing subsections (a), (b), (c) and (d).
5.3.3. TAX WITHHOLDING
The payment to the Company of all amounts, if any, which it is required to
withhold under federal, state or local law in connection with the exercise of
the Option; with the consent of the Board, (i) shares of the Company's Common
Stock owned by the Optionee duly endorsed for transfer or (ii) subject to the
timing requirements of Section 5.4, shares of the Company's Common Stock
issuable to the Optionee upon exercise of the Option, valued at Fair Market
Value as of the date of Option exercise, may be used to make all or part of such
payment.
5.3.4. SECURITIES REPRESENTATIONS
Such representations and documents as the Board deems necessary or advisable
to effect compliance with all applicable provisions of the Securities Act and
any other federal or state securities laws or regulations. The Board may also
take whatever additional actions it deems appropriate to effect such compliance
including, without limitation, placing legends on share certificates and issuing
stop-transfer orders to transfer agents and registrars; and
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5.3.5. PROOF OF THIRD PARTY RIGHT TO EXERCISE
In the event that the Option or portion thereof shall be exercised pursuant
to Section 5.1 by any person or persons other than the Optionee, appropriate
proof of the right of such person or persons to exercise the Option or portion
thereof.
SECTION 5.4. CERTAIN TIMING REQUIREMENTS
Shares of the Company's Common Stock issuable to the Optionee upon exercise
of the Option may be used to satisfy the Option price or the tax withholding
consequences of such exercise only (i) during the period beginning on the third
business day following the date of release of the quarterly or annual summary
statement of sales and earnings of the Company and ending one month before the
end of the quarter or (ii) pursuant to an irrevocable written election by the
Optionee to use shares of the Company's Common Stock issuable to the Optionee
upon exercise of the Option to pay all or part of the Option price or the
withholding taxes (subject to the approval required under Sections 5.3.2 and
5.3.3) made at least six months prior to the payment of such Option price or
withholding taxes.
SECTION 5.5. CONDITIONS TO ISSUANCE OF STOCK CERTIFICATES
The shares of stock issuable and deliverable upon the exercise of an Option,
or any portion thereof, may be either previously authorized but unissued shares
or issued shares which have then been reacquired by the Company. The Company
shall not be required to issue or deliver any certificate or certificates for
shares of stock purchased upon the exercise of any Option or portion thereof
prior to fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all stock exchanges on which
such class of stock is then listed;
(b) The completion of any registration or other qualification of such shares
under any state or federal law or under the rulings or regulations of the
Securities and Exchange Commission or any other governmental regulatory body,
which the Board shall deem necessary or advisable;
(c) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Board shall determine to be necessary or
advisable;
(d) The payment to the Company (or other employer corporation) of all
amounts which it is required to withhold under federal, state or local law in
connection with the exercise of the Option; and
(e) The lapse of such reasonable period of time following the exercise of
the Option as the Board may establish from time to time for reasons of
administrative convenience.
SECTION 5.6. RIGHTS AS STOCKHOLDERS
The holders of Options shall not be, nor have any of the rights or
privileges of, stockholders of the Company in respect to any shares purchasable
upon the exercise of any part of an Option unless and until certificates
representing such shares have been issued by the Company to such holders.
SECTION 5.7. TRANSFER RESTRICTIONS
Unless otherwise approved in writing by the Board, no shares acquired upon
exercise of any Option by any Outside Director may be sold, assigned, pledged,
encumbered or otherwise transferred until at least six months have elapsed from
(but excluding) the date that such Option was granted.
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ARTICLE VI.
ADMINISTRATION
SECTION 6.1. DUTIES AND POWERS OF THE BOARD
It shall be the duty of the Board to conduct the general administration of
the Plan in accordance with its provisions. The Board shall have the power to
interpret the Plan and the Options and to adopt such rules for the
administration, interpretation and application of the Plan as are consistent
therewith and to interpret, amend or revoke any such rules.
SECTION 6.2. COMPENSATION; PROFESSIONAL ASSISTANCE; GOOD FAITH ACTIONS
All expenses and liabilities incurred by the Board in connection with the
administration of the Plan shall be borne by the Company. The Board may employ
attorneys, consultants, accountants, appraisers, brokers or other persons. The
Board, the Company and its officers and directors shall be entitled to rely upon
the advice, opinions or valuations of any such persons. All actions taken and
all interpretations and determinations made by the Board in good faith shall be
final and binding upon all Optionees, the Company and all other interested
persons. The Board shall not be personally liable for any action, determination
or interpretation made in good faith with respect to the Plan or the Options,
and the Board shall be fully protected by the Company in respect to any such
action, determination or interpretation.
ARTICLE VII.
OTHER PROVISIONS
SECTION 7.1. TRANSFERABILITY
(a) No Option under this Plan may be sold, pledged, assigned or transferred
in any manner other than by domestic relations order or by will or the laws of
descent and distribution unless and until such Option has been exercised, or the
shares underlying such Option have been issued, and all restrictions applicable
to such shares have lapsed; provided, however, that an Optionee may transfer an
Option to a Permitted Transferee subject to the following terms and conditions:
(i) An Option transferred to a Permitted Transferee shall not be
assignable or transferable by the Permitted Transferee other than by
domestic relations order or by will or the laws of descent and distribution;
(ii) Any Option which is transferred to a Permitted Transferee shall
continue to be subject to all of the terms and conditions of the Option as
applicable to the original holder (other than the ability to further
transfer the Option);
(iii) The Optionee and the Permitted Transferee shall execute any and all
documents reasonably requested by the Board, including without limitation
documents to (i) confirm the status of the transferee as a Permitted
Transferee, (ii) satisfy any requirements for an exemption for the transfer
under applicable federal and state securities laws and (iii) evidence the
transfer; and
(iv) Shares of Common Stock acquired by a Permitted Transferee through
exercise of an Option have not been registered under the Securities Act of
1933, as amended, or any state securities laws and may not be transferred,
nor will any assignee or transferee thereof be recognized as an owner of
such shares of Common Stock for any purpose, unless a registration statement
under the Securities Act of 1933, as amended, and any applicable state
securities laws with respect to such shares shall then be in effect or
unless the availability of an exemption from registration with respect to
any proposed transfer or disposition of such shares shall be established to
the satisfaction of counsel for the Company.
(b) No Option or interest or right therein or part thereof shall be liable
for the debts, contracts or engagements of the Optionee or his successors in
interest or shall be subject to disposition by transfer,
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alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect, except to the extent that such disposition is
permitted by the provisions of Section 7.1(a).
SECTION 7.2. AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN
The Plan may be wholly or partially amended or otherwise modified (generally
not more frequently than once every six months), suspended or terminated at any
time or from time to time by the Board. However, without approval of the
Company's stockholders given within twelve months before or after the action by
the Board, no action of the Board may: (i) except as provided in Section 2.3,
increase any limit imposed in Section 2.1 on the maximum number of shares which
may be issued upon exercise of Options; (ii) materially modify the eligibility
requirements of Section 3.1; (iii) reduce the minimum Option price requirements
of Section 4.2; (iv) extend the limit imposed in this Section 7.2 on the period
during which Options may be granted; or (v) amend or modify the Plan in a manner
requiring stockholder approval under Rule 16b-3. Notwithstanding anything to the
contrary contained herein, the Board, with respect to the Plan or any Option,
shall not (y) amend or modify any provision concerning the amount, price and
timing of any Option (including, without limitation, the provisions of Sections
3.2 and 4.2 of the Plan) more than once every six months, other than to comport
with changes in the Code, the Employee Retirement Income Security Act of 1974,
as amended, or the rules thereunder, or (z) otherwise amend or modify the Plan
or any Option in any manner inconsistent with the requirements of Rule 16b-3.
Neither the amendment, suspension nor termination of the Plan shall, without the
consent of the holder of the Option, alter or impair any rights or obligations
under any Option theretofore granted. No Option may be granted during any period
of suspension nor after termination of the Plan, and in no event may any Option
be granted under this Plan after the expiration of ten years from the date the
Plan is adopted by the Board.
SECTION 7.3. EFFECTIVE DATE OF PLAN
The Plan shall be effective on the date it is adopted by the Board, but all
Options shall be conditioned upon approval of the Plan at a duly held meeting of
stockholders by the affirmative vote of the holders of a majority of the voting
power of the shares of the Company represented in person or by proxy and
entitled to vote at the meeting.
SECTION 7.4. EFFECT OF PLAN UPON OTHER OPTION AND COMPENSATION PLANS
The adoption of this Plan shall not affect any other compensation or
incentive plans in effect for the Company, any Parent Corporation or any
Subsidiary. Nothing in this Plan shall be construed to limit the right of the
Company, any Parent Corporation or any Subsidiary (a) to establish any other
forms of incentives or compensation for directors of the Company or (b) to grant
or assume options otherwise than under this Plan in connection with any proper
corporate purpose, including, but not by way of limitation, the grant or
assumption of options in connection with the acquisition by purchase, lease,
merger, consolidation or otherwise, of the business, stock or assets of any
corporation, firm or association.
SECTION 7.5. NO RIGHT TO CONTINUED MEMBERSHIP ON THE BOARD
Nothing in this Plan or in any Stock Option Agreement shall confer upon any
Outside Director any right to continue as a director of the Company or shall
interfere with or restrict in any way the rights of the Company and its
stockholders, which are hereby expressly reserved, to remove any Outside
Director at any time for any reason whatsoever, with or without cause.
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SECTION 7.6. TITLES
Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of the Plan.
SECTION 7.7. CONFORMITY TO SECURITIES LAWS
The Plan is intended to conform to the extent necessary with all provisions
of the Securities Act and the Exchange Act and any and all regulations and rules
promulgated by the Securities and Exchange Commission thereunder, including
without limitation Rule 16b-3. Notwithstanding anything herein to the contrary,
the Plan shall be administered, and Options shall be granted and may be
exercised, only in such a manner as to conform to such laws, rules and
regulations. To the extent permitted by applicable law, the Plan and options
granted hereunder shall be deemed amended to the extent necessary to conform to
such laws, rules and regulations.
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Getchell Gold Corporation
5460 S. Quebec Street, Suite 240
Englewood, Colorado 80111
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints G.W. Thompson and J. Kelley Williams as
Proxies, each with the power to appoint his substitute, and hereby authorizes
each of them to represent and to vote, as designated below, all the shares of
Common Stock of Getchell Gold Corporation (the "Company") held of record by
the undersigned on March 30, 1998, at the Annual Meeting of Stockholders to
be held on May 14, 1998, and at any adjournment or postponement thereof.
1. Election of Directors: FOR ALL nominees WITHHOLD AUTHORITY for all
listed below (except nominees listed below
as indicated to the
contrary below)
Pete Ingersoll G.W. Thompson William E. Nettles
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below)
2. Approval of the 1998 Stock Option Plan for Outside Directors.
FOR AGAINST ABSTAIN
3. Approval of the Amendment to the 1996 Long Term Equity Incentive Plan.
FOR AGAINST ABSTAIN
4. Ratification of the appointment of KPMG Peat Marwick LLP as the Company's
independent auditors for 1998.
FOR AGAINST ABSTAIN
5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting or any adjournment
or postponement thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY
WILL BE VOTED FOR PROPOSALS 1, 2, 3 AND 4.
<PAGE>
[Reverse side]
All other proxies heretofore given by the undersigned to vote shares of
stock of the Company, which the undersigned would be entitled to vote if
personally present at the Annual Meeting or any adjournment or postponement
thereof, are hereby expressly revoked.
Dated: , 1998
--------------------
(Signature)
(Signature)
Please date this Proxy and sign it
exactly as your name or names
appear below. When shares are held
by joint tenants, both should
sign. When signing as an attorney,
executor, administrator, trustee
or guardian, please give full
title as such. If shares are held
by a corporation, please sign in
full corporate name by the
President or other authorized
officer. If shares are held by a
partnership, please sign in
partnership name by an authorized
person.
PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN THE PROXY CARD USING THE ENCLOSED
ENVELOPE. IF YOUR ADDRESS IS INCORRECTLY SHOWN, PLEASE PRINT CHANGES.
