SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant
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))
Definitive Proxy Statement
Definitive Additional Materials
Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
CROWN RESOURCES CORPORATION
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
No fee required.
Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11
1) Title of each class of securities to which transaction
applies:
2) Aggregate number of securities to which transaction
applies:
3) Per unit price or other underlying value of transaction
pursuant to Exchange Act Rule 0-11:*
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.:
3) Filing Party:
4) Date Filed:
CROWN RESOURCES CORPORATION
Notice of Annual Meeting of Shareholders
To the Shareholders:
The Annual Meeting of the Shareholders of Crown Resources
Corporation will be held at The Adams Mark Hotel, 1550 Court Place,
Denver, Colorado, on Thursday, June 18, 1998, at 10:00 a.m.,
Mountain Daylight Time, for the following purposes:
1. Election of Directors. To elect seven Directors to
serve until the next Annual Meeting of Shareholders and until
their successors are elected and qualified.
2. Appointment of Auditors. To ratify the appointment
of Deloitte & Touche LLP as the Company's independent auditors
for fiscal year 1998.
3. Other Business. To transact such other business as
may properly come before the meeting and all adjournments
thereof.
The stock transfer books of the Company will not be closed.
The Board of Directors has fixed the close of business on April 17,
1998 , as the record date for the determination of shareholders
entitled to notice of, and to vote at, the Annual Meeting. The
approximate date of the mailing of this Proxy Statement and the
enclosed form of proxy is April 21, 1998.
Your attention is directed to the accompanying Proxy
Statement. To constitute a quorum for the conduct of business at
the Annual Meeting, it is necessary that holders of a majority of
all outstanding shares entitled to vote at the meeting be present
in person or be represented by proxy. To assure representation at
the Annual Meeting, you are urged to date and sign the enclosed
proxy and return it promptly in the enclosed envelope.
By Order of the Board of
Directors
James R. Maronick
Secretary
April 20, 1998
Denver, Colorado
PROXY STATEMENT
Annual Meeting of Shareholders
This Proxy Statement is furnished in connection with the
solicitation by the Board of Directors of Crown Resources
Corporation, a Washington corporation (the "Company"), of proxies
in the accompanying form for use at the Annual Meeting of
Shareholders to be held on Thursday, June 18, 1998, and any
adjournment or postponement of such meeting. The Annual Meeting
will be held at 10:00 a.m., Mountain Daylight Time, at The Adams
Mark Hotel, 1550 Court Place, Denver, Colorado.
The principal office of the Company is located at 1675
Broadway, Suite 2400, Denver, Colorado, 80202.
Proxies are solicited so that each shareholder may have an
opportunity to vote. These proxies will enable shareholders to
vote on all matters that are scheduled to come before the meeting.
When proxies are returned properly executed, the shares represented
thereby will be voted in accordance with the shareholders'
directions. Shareholders are urged to specify their choices by
marking the appropriate boxes on the enclosed proxy card; if no
choice has been specified, the shares will be voted as recommended
by the Board of Directors of the Company (the "Board"). Means have
been provided whereby a shareholder may withhold his vote for any
Director. The proxy cards also confer discretionary authority to
vote the shares authorized to be voted thereby on any matter that
was not known on the date of the Proxy Statement but may properly
be presented for action at the meeting.
You are asked to sign, date, and return the accompanying proxy
card regardless of whether or not you plan to attend the meeting.
Any shareholder returning a proxy has the power to revoke it at any
time before shares represented by the proxy are voted at the
meeting. Any shares represented by an unrevoked proxy will be
voted unless the shareholder attends the meeting and votes in
person. A shareholder's right to revoke his or her proxy is not
limited by or subject to compliance with a specified formal
procedure, but written notice should be given to the Corporate
Secretary of the Company at or before the meeting.
The expense of printing and mailing proxy material will be
borne by the Company. In addition to the solicitation of proxies
by mail, solicitation may be made by certain Directors, officers,
and other employees of the Company in person or by telephone or
other means of electronic communication. No additional
compensation will be paid for such solicitation.
Arrangements will also be made with brokerage firms and other
custodians, nominees, and fiduciaries to forward proxy solicitation
material to certain beneficial owners of the Company's Common Stock
and the Company will reimburse such brokerage firms, custodians,
nominees , fiduciaries for reasonable out-of-pocket expenses
incurred by them in connection therewith.
Shares Outstanding
The holders of the Company's $.01 par value Common Stock (the
"Common Stock"), at the close of business on April 17, 1998, are
entitled to vote at the Annual Meeting. On the record date, April
17, 1998, there were outstanding 14,520,725 shares of Common Stock.
Each share of Common Stock entitles its holder to one vote. The
presence in person or by proxy of holders of record of a majority
of the outstanding shares of Common Stock is required to constitute
a quorum for the transaction of business at the meeting. Under
Washington law and the Company's Articles of Incorporation, if a
quorum is present at the meeting the seven nominees for election as
Directors who receive the greatest number of votes cast for
election of directors at the meeting by the shares present in
person or represented by proxy at the meeting and entitled to vote
shall be elected Directors. Shares held by persons who abstain
from voting on the election of Directors and broker non-votes will
not be counted in the election. Shares held by persons abstaining
will be counted in determining whether a quorum is present for the
purpose of voting on the proposal but broker nonvotes will not be
counted for this purpose.
The Company also has issued 1,000,000 shares of its Series A
Nonconvertible Preferred Stock to a subsidiary of the Company.
Although the terms of the Preferred Stock entitle its holder to
vote as a shareholder of the Company, under Washington corporate
law this stock may not be voted while it is held by a subsidiary of
the Company.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information, as of April 9,
1998, with respect to the number of shares of Common Stock
beneficially owned by each shareholder known by the Company to be
the beneficial owner of more than five percent of the Common Stock,
by all Directors, nominees for director, executive officers named
in the Summary Compensation Table and all Directors, nominees for
director and executive officers as a group. Except as noted below,
each shareholder has sole voting and investment powers with respect
to the shares shown. Unless otherwise indicated below, the address
of each beneficial owner is 1675 Broadway, Suite 2400, Denver,
Colorado 80202.
Percent of
Name and Address of Amount and the Company's
Beneficial Owner Beneficial Ownership Common Stock
Invesco Funds Group (1) . . . . . 1,260,000 8.7
7800 East Union Ave., Suite 800
Denver, CO 80237
The Equitable Life Assurance
Society (1)
City Place House, 55, Basinghall Street
London EC2V 5DR . . . . . . . . . . 1,000,000 6.9
Mark E. Jones, III (2) . . . . . . . 286,566 1.9
Christopher E. Herald (3) . . . . . . 369,046 2.5
J. Michael Kenyon (4) . . . . . . . . 81,500 0.6
Rodney D. Knutson (5) . . . . . . . . 50,000 0.3
Linder G. Mundy (6) . . . . . . . . . 50,150 0.3
Steven A. Webster (7) . . . . . . . . .137,357 0.9
David R. Williamson (8) . . . . . . . . 90,000 0.6
All Directors, nominees for director,
and executive officers as a group
(10 persons) (3)(4)(9) . . . . . . 1,367,595 8.8
(1) Based upon information supplied to the Company by the
shareholder.
(2) Includes options to purchase 268,233 shares.
(3) Includes options to purchase 217,083 shares and 7,640 shares
owned by Mr. Herald's spouse of which Mr. Herald disclaims
beneficial ownership.
(4) Includes options to purchase 50,000 shares and 10,000 shares
beneficially owned by Sutton Resources Inc., of which Mr.
Kenyon disclaims beneficial ownership.
(5) Includes options to purchase 50,000 shares.
(6) Includes options to purchase 50,000 shares.
(7) Includes options to purchase 50,000 shares.
(8) Includes options to purchase 50,000 shares and 40,000 shares
owned by David Williamson Associates Ltd.
(9) Includes, in the aggregate, options to purchase 995,316
shares.
ELECTION OF DIRECTORS
The Board currently consists of seven Directors. The
Directors elected at the Annual Meeting will serve until the next
Annual Meeting of Shareholders and until their successors are
elected and qualified. Unless the vote is withheld by the
shareholder, the proxies solicited by the Board will be voted for
the re-election of all the current Directors, who are:
Mark E. Jones, III. Mr. Jones, age 58, has been a Director
and the Chairman of the Board of the Company since it commenced
operations in February 1989. He was Chief Executive Officer of the
Company from February 1989 until July 1993. He was President of
the Company from September 1989 to November 1990. Mr. Jones is
also Chairman and Chief Executive Officer of Solitario Resources
Corporation ("Solitario"), a 57.2 percent-owned subsidiary of the
Company that is engaged in exploration and development of
properties in South America. Mr. Jones also serves as Chairman of
Star Resources Corporation, a diamond exploration company.
Christopher E. Herald. Mr. Herald, age 44, has been a
Director of the Company since April 1989. He has served as
President of the Company since November 1990 and was Executive Vice
President of the Company from January 1990 to November 1990. Mr.
Herald also serves as President and a director of Solitario.
J. Michael Kenyon. Mr. Kenyon, age 48, has been a Director of
the Company since it commenced operations. Mr. Kenyon serves as
President, Chief Executive Officer and a director of Sutton
Resources Ltd., a minerals exploration company based in Vancouver,
British Columbia.
Rodney D. Knutson. Mr. Knutson, age 56, has been a Director
of the Company since it commenced operations. He was a partner in
the law firm of Jones & Keller, P.C. from 1992 to 1998; and has
been of counsel to the law firm of Jones & Keller, P.C. since
January 1998.
Linder G. Mundy. Mr. Mundy, age 70, has been a Director of
the Company since it commenced operations. Since 1985, Mr. Mundy
has been a private business consultant.
Steven A. Webster. Mr. Webster, age 46, has been a Director
of the Company since it commenced operations. Mr. Webster serves
as President and CEO of R & B Falcon Corporation, an offshore
drilling contractor, having served from 1991 through 1997 as
Chairman and CEO of Falcon Drilling Company, Inc., a predecessor
company. Mr. Webster is a director of R & B Falcon Corporation;
Grey Wolf, Inc., a land rig contractor; Ponder Industries, Inc., an
oilfield service contractor; Geokinetics, Inc., a seismic
acquisition company; Carrizo Oil & Gas, Inc., an oil exploration
company; and is a trust manager of Camden Property Trust, a real
estate investment trust.
David R. Williamson. Mr. Williamson, age 56, has been a
Director of the Company since September 1989. In 1989 he founded
David Williamson Associates Ltd., which undertakes research and
consulting for the mining industry. He also serves as a director
of Crew Development Corporation, Cornucopia Resources Ltd., and
Asia Pacific Resources, all mining and exploration companies.
It is intended that votes will be cast pursuant to the
enclosed proxy for the election of Directors from the foregoing
nominees. If any nominee shall not be a candidate for election as
a Director at the meeting, it is intended that votes will be cast
pursuant to the enclosed proxy for such substitute nominees as may
be nominated by the existing Directors. No circumstances are
presently known which would render any nominee named herein
unavailable.
Under the Company's Bylaws, shareholders seeking to nominate
other candidates for election to the Board at the Annual Meeting
must give written notice to the Corporate Secretary of the Company
no less than sixty (60) nor more than ninety (90) days before the
Annual Meeting. The notice must be accompanied by certain
information as to the shareholder giving the notice and each
proposed nominee, including information similar to that required
under the federal proxy rules. If less than seventy (70) days'
notice or prior public disclosure of the
date of the scheduled meeting is given, notice by the shareholder
must be given not later than the tenth day following the earlier of
mailing of notice of the meeting or the date public disclosure of
the meeting date was made. The Bylaws provide that no person shall
be elected a Director of the Company unless nominated in accordance
with the Bylaws. No Director nominations by shareholders for the
1998 Annual Meeting had been received by the Company prior to the
date of this Proxy Statement.
Directors' Compensation
Directors who are not employees of the Company are reimbursed
for their expenses incurred in attending Board meetings. Directors
are eligible to receive options to purchase Common Stock granted
under the Company's 1988 Stock Benefit Plan (the "1988 Plan") and
non-qualified stock options under the 1991 Stock Incentive Plan
(the "1991 Plan"). All options, under both plans, terminate after
five years from date of grant if not earlier exercised.
Under the 1988 Plan, the Board of Directors may (a) grant
incentive stock options, as defined in Section 422 of the Internal
Revenue Code of 1986, as amended, to any employee of the Company or
to any employee of any parent or subsidiary of the Company; (b)
grant options other than incentive stock options (i.e.
non-qualified stock options); (c) grant stock appreciation rights
or
cash bonus rights; (d) award stock bonuses; and (e) grant stock
purchase rights and sell stock subject to restrictions. The Board
of Directors reserved 1,500,000 shares of Common Stock for grants
under the 1988 Plan. Currently, 576,476 shares remain available
for issue under the 1988 Plan; of these, options for 576,250 shares
have been granted and options for 226 shares are available for
grant.
Generally, the terms and conditions of the 1991 Plan are
similar to those of the 1988 Plan described above, except that
members of the Board of Directors are eligible only to receive
formula grants of non-qualified stock options. Each Director who
is not an employee automatically receives an award of a
non-qualified stock options covering 10,000 shares of Crown Common
Stock on February 28 each year. All options granted to Directors
under the 1991 Plan have an exercise price equal to the fair market
value of the Company's Common Stock on the date of grant and they
are exercisable from and after the date of grant. The Board of
Directors reserved 1,500,000 shares of Common Stock for grants
under the 1991 Plan. Currently, 1,313,724 shares remain available
for issue under the 1991 Plan; of these, options for 1,026,432
shares have been granted and options for 287,292 are available for
grant.
Meetings of Board of Directors and Committees
During the fiscal year ended December 31, 1997, there were
four meetings of the Board. Each of the incumbent Directors
attended at least 75 percent of the aggregate of the total number
of meetings of the Board held while they served as a Director and
the total number of meetings held by all committees of the Board on
which they served, except for David Williamson, who attended 50
percent of the meetings. All of the references to meetings exclude
actions taken by written consent.
The Board has an Audit Committee consisting of Mr. Herald and
two non-employee Directors, Messrs. Mundy and Webster. The Audit
Committee reviews the preparation and auditing of accounts of the
Company; considers and recommends to the Board the engagement of
independent certified public accountants for the ensuing year and
the terms of such engagement; reviews the scope of the audit
proposed by such accountants; implements and periodically reviews
the performance of the independent accountants; and reviews the
annual financial report to the Directors and shareholders of the
Company. The Audit Committee met once during the fiscal year ended
December 31, 1997.
The Board also has a Compensation Committee consisting of non-
employee Directors, Messrs. Kenyon, Knutson, and Webster. The
Compensation Committee is responsible for reviewing and approving
executive compensation and administering the Company's stock option
programs. The Compensation Committee met once during 1997.
The Board does not have a nominating committee or other
committee performing similar functions.
Compliance with Section 16(a) of the Securities Exchange Act of
1934
Section 16(a) of the Securities Exchange Act of 1934 requires
the Company's Directors and executive officers, and persons who own
more than ten percent of a registered class of the Company's equity
securities, to file with the Securities and Exchange Commission
("SEC") initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the
Company. Officers, Directors, greater than ten percent
shareholders are required by SEC regulation to furnish the Company
with copies of all Section 16(a) forms they file. To the Company's
knowledge, based solely on review of the copies of such reports
furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31,
1997, all Section 16(a) filing requirements applicable to officers,
Directors, and greater than ten percent beneficial owners were
complied with.
EXECUTIVE COMPENSATION
Report of the Compensation Committee
Overview and Philosophy. The Compensation Committee of the
Board (the "Compensation Committee") is composed entirely of three
independent non-employee directors. The Compensation Committee is
responsible for reviewing and approving executive compensation and
administering the Company's stock option programs. Following
review and approval by the Compensation Committee, all issues
pertaining to executive compensation are submitted to the full
Board for approval.
The policy of the Compensation Committee in determining
executive compensation is that such compensation should (i) reflect
Company performance, (ii) reward individual performance, (iii)
align the interests of the executives with the long-term interests
of the shareholders and (iv) assist the Company in attracting and
retaining key executives critical to the long-term success of the
Company.
Executive Officer Compensation Program. The major elements of
the executive compensation program during 1997 consisted
principally of base salary, bonuses, and the Company's stock option
plans, which reward executives for delivering value to Crown
shareholders as measured by increases in the Common Stock price.
Base Salary. Base salaries of executive officers are
established annually, at the beginning of each year. The
Compensation Committee reviews the responsibilities, experience,
performance of the executive officers, basing its approval of base
salary levels and changes thereupon on these and other factors,
including the competitive marketplace and the Company's budget
considerations. Due to budget considerations, there were no salary
increases granted to executive officers during 1997.
Bonuses. Bonuses are granted to executive officers at the
discretion of the Board. During 1997, bonuses were paid to certain
salaried employees in amounts equal to five percent of annual base
pay. In addition, bonuses of the Company's common stock were
issued to certain salaried employees.
Stock Option Plans. The shareholders have approved the
Company's stock option plans. The Board granted stock options in
fiscal 1997 to certain eligible employees including the Named
Executive Officers pursuant to the 1988 Plan and the 1991 Plan.
The objectives of both the 1988 Plan and the 1991 Plan are to align
executive and shareholder long-term interests by creating a direct
link between executive pay and shareholder return, as well as
provide long-term incentives to the executive.
Non-qualified stock options are granted under the 1991 Plan to
non-director executive officers at an option price not less than
the average price for the five business days immediately preceding
the date of grant. Such non-qualified stock options are 25 percent
vested upon date of grant and vest an additional 25 percent each
year so that they are 100 percent vested after three years. The
Board grants such options annually.
Executive officers who are also members of the Board are
eligible only to receive formula grants of non-qualified stock
options under the 1991 Plan. Such executive officers are entitled
to receive automatically, on February 28 of each year, an award of
stock options calculated by dividing the executive officer's annual
base compensation rate on the grant date by three. All such
options are granted at a price equal to the fair market value of
the Company's Common Stock on the date of the grant.
All options granted to executive officers terminate after five
years from date of grant if not earlier exercised.
401(k) Plan. In 1990 the Company adopted the Crown Resources
Corporation 401(k) Plan ("401(k) Plan"), a defined-contribution
plan covering all full-time employees, including the Named
Executive Officers. The 401(k) Plan provides for Company matching,
at the rate of 75 percent, of employee savings contributions up to
nine percent of annual compensation, subject to ERISA limitations.
Company contributions are subject to vesting percentages of 25
percent after one year of vesting service, increasing annually by
25 percent, such that all amounts are fully vested after four years
of vesting service. Plan participants may direct the investment of
contributions in any of several different funds, including a
government securities fund and various debt and equity funds.
Compensation of the Chairman of the Board. Mr. Jones'
compensation for 1997 was based upon the established compensation
policies described above. In establishing Mr. Jones' base salary,
the Board evaluated the competitive standing of the Company as
measured by criteria such as market capitalization, ounces of
annual gold production, proven gold reserves, and stock
performance. The Board also considered the duties,
responsibilities, and performance of Mr. Jones in his capacities
with the Company and executive pay rates of peer group companies.
Mr. Jones' 1997 cash compensation reflects his responsibility in
directing the activities of the Board of Directors. Mr. Jones'
salary arrangement and performance incentives will continue to be
evaluated by the Board periodically. During 1997, Mr. Jones
received a bonus of 2,732 shares of common stock of the Company,
valued at an aggregate market of $15,709.
Compensation of the President. Mr. Herald's compensation for
1997 was based upon the established compensation policies described
above. In establishing Mr. Herald's base salary, the Board
evaluated the competitive standing of the Company as well as his
duties, responsibilities and performance as measured by criteria
similar to those described above. Mr. Herald's salary and
performance incentives reflect his duties as President of the
Company and his supervision and direction of the day-to-day
activities of the Company. These will continue to be evaluated by
the Board periodically. During 1997, Mr. Herald received a bonus
of 4,018 shares of common stock of the Company, valued at $23,104.
The stock options granted to Mr. Jones and Mr. Herald during
fiscal 1997 were granted in accordance with the formula in the 1991
Plan.
COMPENSATION COMMITTEE
Rodney D. Knutson, Chairman
J. Michael Kenyon
Steven A. Webster
Summary Compensation Table
The following table sets forth the compensation paid by the
Company during each of the last three fiscal years to its
Chairman and its President and each of the next most highly paid
executive officers whose cash compensation exceeded $100,000
during the fiscal year ending December 31, 1997:
<PAGE>
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
AWARDS
ALL
OTHER
NAME AND PRINCIPAL SALARY BONUSES OPTIONS COMPENSATION
POSITION YEAR ($) ($) (#) ($)
<S> <C> <C> <C> <C> <C>
Mark E. Jones, III, Chair 1997 98,175 20,618 (1) 75,000 (2) 12,937(3)
1996 98,175 4,909 65,450 (4); 80,000 (5) 11,220 (6)
1995 98,175 9,818 65,540 (4) 10,975 (7)
Christopher E. Herald, Pres 1997 144,375 30,323 (8) 75,000 (2) 9,757(9)
1996 144,375 7,219 48,125 (4); 70,000 (5) 9,412 (10)
1995 144,375 7,219 48,125 (4) 9,217 (11)
</TABLE>
<PAGE>
(1) Includes 2,732 shares of common stock, valued at a market
price of $5.75 per share, issued as a bonus.
(2) Granted under the Company's 1988 Plan. See "Option Grants in
Last Fiscal Year."
(3) Includes $6,627 in fully-vested employer matching
contributions to 401(k) Plan.
(4) Granted under the Company's 1991 Plan. See "Option Grants in
Last Fiscal Year."
(5) Options to acquire Solitario common stock, granted under the
Solitario 1994 Stock Option Plan.
(6) Amount includes $6,504 in fully-vested employer matching
contributions to 401(k) Plan.
(7) Amount includes $6,259 in fully-vested employer matching
contributions to 401(k) Plan.
(8) Includes 4,018 shares of common stock, valued at a market
price of $5.75 per share, issued as a bonus.
(9) Amount includes $7,125 in fully vested employer matching
contributions to 401(k) Plan.
(10) Amount includes $7,125 in fully vested employer matching
contributions to 401(k) Plan.
(11) Amount includes $6,930 in fully vested employer matching
contributions to 401(k) Plan.
Options
The following tables set forth for the fiscal year ended
December 31, 1997 contain certain information regarding options
granted to, exercised by, and held at year end by the Named
Executive Officers.
<PAGE>
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
VALUE AT ASSUMED
PERCENT OF ANNUAL RATES OF
TOTAL STOCK PRICE
OPTIONS OPTIONS EXERCISE OR EXPIRATION APPRECIATION
GRANTED (#) GRANTED BASE PRICE DATE FOR OPTION TERM (1)
NAME TO EMPLOYEES ($/SH)
IN FISCAL
YEAR
5%($) 10%($)
<S> <C> <C> <C> <C> <C> <C>
Mark E. Jones, III 75,000 (2) 14.4% 5.75 1/16/02 119,250 263,325
Christopher E. Herald 75,000 (2) 14.4% 5.75 1/16/02 119,250 263,325
</TABLE>
<PAGE>
(1) Potential realizable value is based on an assumption that the
stock price of the Common Stock appreciates at the
annual rate shown (compounded annually) from the date of grant
until the end of the five-year option term.
These numbers are calculated based on the requirements
promulgated by the SEC and do not reflect the Company's
estimate of future stock price growth.
(2) The options granted are non-qualified stock options that vest
and become exercisable upon date of grant. Such
options are nonassignable and nontransferable except by will or by
the laws of descent and distribution. All options
terminate five years from date of grant.
<PAGE>
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<CAPTION>
Number of Unexercised Value of Unexercised
Options in-the-Money
at Fiscal Year-End Options
at Fiscal Year-End
(#) ($)
Shares Value
Acquired on Realized Exercisable/ Exercisable/
Name Exercise (#) ($) Unexercisable Unexercisable
<S> <C> <C> <C> <C>
Mark E. Jones, III 30,000 97,350 300,566 / 0 62,875 / 0 (1)
0 0 330,000 / 0 187,036 / 0 (2)
Christopher E. Herald 0 0 262,916 / 0 69,570 / 0 (1)
20,000 41,159 180,000 / 0 106,628 / 0 (2)
</TABLE>
<PAGE>
(1) Value based on market price of $4.19 per share of Crown Common
Stock at December 31, 1997, less the
exercise price.
(2) Value based on market price of Cdn$3.25 per share of Solitario
Common Stock at December 31, 1997, less
the exercise price, converted to U.S.$.
COMPARATIVE STOCK PERFORMANCE
The following performance graph compares the performance of
the Company's Common Stock to the NASDAQ Stock Market Total Return
Index, the S & P Gold Mining Index, and a seven-company peer group
for the Company's last five fiscal years. The graph assumes the
value of the investment was $100 at December 31, 1992 and measures
that investment at December 31 of each of the years shown. All
dividends are assumed to be reinvested. The graph is presented
pursuant to requirements of the SEC. The information contained in
this graph is not necessarily indicative of future price
performance.
<TABLE>
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN AMONG
CROWN RESOURCES CORPORATION, NASDAQ STOCK MARKET TOTAL RETURN
INDEX,
S & P GOLD MINING INDEX (1), AND A SEVEN-COMPANY PEER GROUP (2),
AND A SEVEN-COMPANY PEER GROUP(3)
Cumulative Total Return
<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>
Crown Res Corp CRRS 100 70 62 75 93 63
NASDAQ STOCK MARKET (U.S.) 100 115 112 159 195 240
S&P GOLD & PRECIOUS
METALS MINING 100 183 148 167 165 109
OLD PEER GROUP 100 170 141 117 114 67
NEW PEER GROUP 100 216 200 195 346 142
</TABLE>
<PAGE>
(1) Consists of Barrick Gold, Battle Mountain Gold, Echo Bay Mines,
Homestake Mining, Newmont Mining, and Placer Dome, all of which are
major gold producers.
(2) Consists of Alta Gold, Atlas Corporation, Canyon Resources,
Coeur d'Alene Mines, Consolidated Nevada Goldfields, Glamis Gold,
and
Hecla Mining. USMX is no longer included as it was
acquired during 1997.
(3) Due to the recent divergence in the gold and silver markets
and the de-listing and merger of several companies in the prior
peer group, the Company has elected to redefine its peer group to
include gold and gold exploration companies operating in similar
geographic areas, consisting of Alta Gold Co., Canyon Resources
Corporation, Glamis Gold Ltd., Dakota Mining Corporation, Royal
Gold, Inc., Metallica Resources Inc., and Bema Gold Corporation.<PAGE>
INDEPENDENT PUBLIC ACCOUNTANTS
The Company's Shareholders are asked to ratify the selection of
Deloitte & Touche LLP, independent public accountants, to continue
as the Company's auditors for fiscal 1998. Representatives from
Deloitte & Touche LLP are expected to be present at the Annual
Meeting of Shareholders to make a statement if they so desire and
to respond to appropriate questions.
CERTAIN TRANSACTIONS
In February of 1998, the Company received $4.6 million from a
European equity financing through the placement of 1.04 million
shares of the Company's common stock. In connection with the
private placement, the Company paid an agency
fee of 40,000 shares (approximately $185,000) in connection with
the private placement to David Williamson Associates, Ltd., of
which David R. Williamson, director, is a principal. In addition,
the Company paid David Williamson Associates, Ltd. $72,000 for fees
and expenses related to investor relations and marketing during
1997.
PROPOSALS OF SHAREHOLDERS
Under the Company's Bylaws, shareholders seeking to propose
business to be conducted at the 1998 Annual Meeting must give
written notice to the Corporate Secretary of the Company no later
than the time that shareholder Director nominations must be
received. The notice must contain certain information as to the
proposal and the shareholder, including the share ownership of the
shareholder and any financial interest in the proposal. Any
proposal not made in compliance with the Bylaws may be rejected by
the Board. No shareholder proposals for the 1998 Annual Meeting
had been received by the Company prior to the date of this Proxy
Statement.
Shareholder proposals intended to be presented at the 1999
Annual Meeting of Shareholders should be received by the Company
prior to January 1, 1999, for inclusion in the Company's Proxy
Statement for that meeting.
OTHER BUSINESS
The Company knows of no other business to be presented at the
meeting. If any other business properly comes before the meeting,
it is intended that the shares represented by proxies will be voted
with respect thereto in accordance with the best judgment of the
person named in the accompanying form of proxy.
Upon written request from any person solicited herein addressed
to the Corporate Secretary of the Company at its principal offices,
the Company will provide, at no cost, a copy of the Annual Report
on Form 10-K filed with the SEC for the fiscal year ended December
31, 1997.
By Order of the Board of
Directors
James R. Maronick
Secretary
April 22, 1998
Denver, Colorado<PAGE>
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
CROWN RESOURCES CORPORATION
For Annual Meeting of Shareholders to be held on June 19, 1997
The undersigned hereby appoints Christopher E. Herald and
James R. Maronick, and each of them, with full power of
substitution, proxies of the undersigned at the Annual Meeting of
Shareholders of Crown Resources Corporation (the "Company"), to be
held at the Adams Mark Hotel, 1550 Court Place, Denver, Colorado,
on Thursday, June 18, 1998, at 10:00 a.m., Mountain Daylight Time,
and at all adjournments or postponements thereof, and hereby
authorizes them to represent and to vote all of the shares of
Common Stock of the Company held by the undersigned as fully as the
undersigned could do if personally present. Said proxies are
herein specifically authorized to vote the shares of Common Stock
of the Company which the undersigned is entitled to voate in the
election of Directors as proposed in the Proxy Statement, to ratify
the appointment of auditors as proposed in the Proxy Statement and
to vote said shares upon such other matters as may properly come
before the meeting or any adjournment or postponement thereof as
the above-named proxies shall determine.
The shares of Common Stock represented by this Proxy will be
voted or not voted on the matters set forth in accordance with the
specifications indicated herein.
(IMPORTANT - TO BE SIGNED AND DATED ON REVERSE SIDE;
PLEASE RETURN USING THE ENCLOSED ENVELOPE)
The Board of Directors recommends that shareholders vote in favor
or Proposals 1 and 2.
1. ELECTION OF DIRECTORS
Nominees: Mark E. Jones, III, Christopher E. Herald, J.
Michael Kenyon, Rodney D. Knutson, Linder G. Mundy,
Steven A. Webster, and David R. Williamson
FOR (All nominees) Except withhold authority to vote for any
individual nominee by lining through or otherwise striking out
the name of any nominee.
WITHHELD (All nominees).
2. APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY'S
AUDITORS
FOR_____ AGAINST_____ ABSTAIN_____
3. To transact such other business as may properly come
before the meeting and all adjournments or postponements thereof.
If no specification is made with respect to the above matters,
the shares of Common Stock of the undersigned will be voted FOR the
election of these Directors, FOR the appointment of Deloitte &
Touche LLP, and either for or against such other matters as may
properly come before the meeting or any adjournment or postponement
thereof, as the above-named proxies may determine.
Please sign exactly as your name appears hereon.
Where shares are held by joint tenants, both
should sign. When signing as attorney,
executor, administrator, trustee or guardian,
please give full title as such. If a
corporation, please sign in full corporate name
by President or other authorized person.
DATED_________________________, 1997
____________________________________
(Signature)
_____________________________________
(Signature if held jointly)
Mark here for address change_________
