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 World Trade Center, 1625 Broadway, Suite 580,
Denver, Colorado,
on Friday, June 4, 1999, 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 1999.
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 5, 1999, 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 9, 1999.
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
March 31, 1999
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 Friday, June 4, 1999, and
any adjournment
or postponement of such meeting. The Annual Meeting will be held
at 10:00 a.m.,
Mountain Daylight Time, at The World Trade Center, 1625 Broadway,
Suite 580,
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 5, 1999, are entitled
to vote at the
Annual Meeting. On the record date, April 5, 1999, 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.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information, as of March 26,
1999, 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.
<TABLE>
<CAPTION>
Percent of
Name and Address of Amount and Nature of the Company's
Beneficial Owner Beneficial Ownership Common Stock
<S> <C> <C>
Invesco Funds Group (1) . . . . . . . . . . . . 1,380,000 9.5
7800 East Union Ave., Suite 800
Denver, CO 80237
The Equitable Life Assurance Society (1). . . . 1,000,000 6.9
City Place House, 55, Basinghall Street
London EC2V 5DR
Mark E. Jones, III (2) . . . . . . . . . . . . 271,683 1.8
Christopher E. Herald (3) . . . . . . . . . . . 440,183 3.0
J. Michael Kenyon (4) . . . . . . . . . . . . . 101,500 0.7
Rodney D. Knutson (5) . . . . . . . . . . . . . 60,000 0.4
Linder G. Mundy (6) . . . . . . . . . . . . . . 60,150 0.5
Steven A. Webster (7) . . . . . . . . . . . . . 151,256 1.0
David R. Williamson (8) . . . . . . . . . . . . 100,000 0.7
James R. Maronick (9) . . . . . . . . . . . . . 98,600 0.7
All Directors, nominees for director,
and executive officers as a group
(10 persons) (3)(4)(10) . . . . . . . . . . . 1,619,093 10.3
</TABLE>
(1) Based upon information supplied to the Company by the
shareholder.
(2) Includes options to purchase 271,350 shares.
(3) Includes options to purchase 267,500 shares and 7,640 shares
owned by Mr. Herald's spouse of which Mr.
Herald disclaims beneficial ownership.
(4) Includes options to purchase 60,000 shares and 10,000 shares
beneficially owned by Sutton Resources Inc.,
of which Mr. Kenyon disclaims beneficial ownership.
(5) Includes options to purchase 60,000 shares.
(6) Includes options to purchase 60,000 shares.
(7) Includes options to purchase 60,000 shares.
(8) Includes options to purchase 60,000 shares and 40,000 shares
owned by David Williamson Associates Ltd.
(9) Includes options to purchase 95,000 shares.
(10) Includes, in the aggregate, options to purchase
1,222,850 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 59, 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 45, 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 49, 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 57, 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 71, 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 47, 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 57, 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 1991 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 non-director employee of the Company or to any
non-director
employee of any parent or subsidiary of the Company; (b) grant
options other than
incentive stock options (i.e. non-qualified stock options)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; (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. 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,
1,145,828 shares remain
available for issue under the 1991 Plan; of these, options for
1,122,300 shares
have been granted and options for 23,528 are available for grant.
Generally, the terms and conditions of the 1988 Plan are
similar to those
of the 1991 Plan described above, except that members of the
Board of Directors
were not restricted to receive formula grants of non-qualified
stock options.
The Board of Directors reserved 1,500,000 shares of Common Stock
for grants under
the 1988 Plan. The 1988 Plan had a ten-year term and no
additional grants of
options may be made under the 1988 Plan. Currently, 576,250
shares remain
available for issue pursuant to options previously granted under
the 1988 Plan.
Meetings of Board of Directors and Committees
During the fiscal year ended December 31, 1998, 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 Rodney Knutson and Steven
Webster, 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, 1998.
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
1998.
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, 1998,
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 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 1998 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 and performance of the Company's share price relative
to its industry
peer group.
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 1998.
Bonuses. Bonuses are granted to executive officers at the
discretion of
the Board. During 1998, bonuses were paid to certain salaried
employees in
amounts equal to five percent of annual base pay. Some of the
bonuses were paid
in the form of shares of the Company's common stock.
Stock Option Plans. The shareholders have approved the
Company's stock
option plans. The Board granted stock options in fiscal 1998 to
certain eligible
employees including the Named Executive Officers pursuant to 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.
On June 19, 1998, the Board of Directors, voted to reprice
all existing
stock options, held by current officers, Directors and employees
with a price in
excess of $4.19, to $4.06, which was the then current market
price of the stock.
The Board noted that due to a continued sharp decline in
worldwide precious
metals prices the market price of most mining companies had
declined and it
appeared to be a fundamental change in these markets. The
Company's stock price
had declined in concert with these markets. The Board felt the
value of the
current stock options as an incentive for current holders had
declined. The
Company has traditionally used stock options both as a form of
compensation and
as an incentive as there have been no salary increases for any of
senior
management during the last five years. Furthermore, the Company
provides no
other compensation to Board members other than stock options.
The Board
recognized the efforts of the Company's management and employees
and believes
that the retention of existing personnel and recruitment of new
personnel
requires the use of stock options. Accordingly, the Board felt a
repricing of
existing stock options to the then current market level was
warranted for past
service and as an incentive for future performance. The total
number of stock
options repriced was 1,276,841 which included 523,250 stock
options from the 1988
Plan and 753,591 stock options from the 1991 Plan.
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
1998 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, potential
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' 1998 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 1998, Mr. Jones received a bonus of $4,909.
Compensation of the President. Mr. Herald's compensation
for 1998 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
1998, Mr. Herald
received a bonus of 2,118 shares of common stock of the Company,
valued at
$7,810.
The stock options granted to Mr. Jones and Mr. Herald during
fiscal 1998
were granted in accordance with the formula in the 1991 Plan.
COMPENSATION COMMITTEE
Rodney D. Knutson, Chairman
J. Michael Kenyon
Steven A. Webster
<TABLE>
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 $100,000 during the fiscal year ending December 31, 1998:
<CAPTION>
Long-Term
Annual Compensation Compensation All
Awards Other
Salary Bonuses Options Compensation
Name and Principal Position Year ($) ($) (#) ($)
<S> <C> <C> <C> <C> <C>
Mark E. Jones, III, Chair 1998 98,175 4,909 32,725(1) 10,614(2)
75,000(14)
160,508(15)
1997 98,175 20,618(3) 75,000(4) 12,937(2)
1996 98,175 4,909 65,450(1) 11,220(6)
80,000(5)
Christopher E. Herald, Pres 1998 144,375 7,810(7) 48,125(1) 9,993(8)
75,000(14)
142,083(15)
1997 144,375 30,323(9) 75,000(4) 9,759(10)
1996 144,375 7,219 48,125(1) 9,412(10)
70,000(5)
James R. Maronick, VP Fin 1998 100,000 5,410(11) 15,000(1) 7,005(12)
65,000(15)
1997 29,283(16) 0 50,000(1) 2,062(13)
50,000(5)
</TABLE>
(1) Granted under the Company's 1991 Plan. See "Option Grants
in Last Fiscal Year."
(2) Includes $6,627 in fully-vested employer matching
contributions to 401(k) Plan.
(3) Includes 2,732 shares of common stock, valued at a market
price of $5.75 per share, issued as a bonus.
(4) Granted under the Company's 1988 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) Includes 2,118 shares of common stock, valued at a market
price of $3.69 per share, issued as a bonus.
(8) Amount includes $7,500 in fully-vested employer matching
contributions to 401(k) Plan.
(9) Includes 4,018 shares of common stock, valued at a market
price of $5.75 per share, issued as a bonus.
(10) Amount includes $7,125 in fully-vested employer matching
contributions to 401(k) Plan.
(11) Includes 1,467 shares of common stock, valued at a market
price of $3.69 per share, issued as a bonus.
(12) Amount includes $6,750 in fully-vested employer matching
contributions to 401(k) Plan.
(13) Amount includes $1,977 in fully-vested employer matching
contributions to 401(k) Plan.
(14) Amount includes shares of the 1988 Plan repriced by the
Board on June 19, 1998 to $4.06.
(15) Amount includes shares of the 1991 Plan repriced by the
Board on June 19, 1998 to $4.06.
(16) Employment began September 15, 1997.
Options
The following tables set forth for the fiscal year ended
December 31, 1998 contain certain information
regarding options granted to, exercised by, and held at year end
by the Named Executive Officers.
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
<CAPTION>
Percent of Potential Realizable
Total Value at Assumed
Options Annual Rates of
Granted Exercise Stock Price
Options to Employees or Base Appreciation for
Granted in Fiscal Price(2) Expiration Option Term (1)
Name (#) Year ($/sh) Date 5%($) 10%($)
<S> <C> <C> <C> <C> <C> <C>
Mark E. Jones, III 32,725(3) 13.2% 4.19 2/28/2003 36,717 81,093
Christopher E. Herald 48,125(3) 19.4% 4.19 2/28/2003 53,996 119,254
James R. Maronick 15,000(4) 6.0% 4.19 2/28/2003 16,830 37,170
</TABLE>
(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, as repriced, 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) Options were repriced to $4.06 on June 19, 1998.
(3) The options granted are non-qualified stock options that
vest and become exercisable upon date of grant.
Such options are nonassignable and nontransferable except by
will or by the laws of descent and
distribution. All options terminate five years from date of
grant.
(4) The options granted are non-qualified stock options that
vest and become exercisable over a four-year
period, becoming fully vested on February 28, 2001. Such
options are nonassignable and nontransferable
except by will or by the laws of descent and distribution.
Options not already exercisable may become
exercisable upon mergers or changes in control of the
Company, pursuant to the 1991 Plan. All options
terminate five years from date of grant.
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<CAPTION>
Number of Unexercised Value of Unexercised
Shares Value Options at Fiscal in-the Money Options
Acquired on Realized Year-End (#) at Fiscal Year-End ($)
Name Exercise(#) ($) Exercisable/Unexercisable Exercisable/Unexercisable
<S> <C> <C> <C> <C>
Mark E. Jones, III 32,333 101,202 238,625/ 0 0 / 0 (1)
0 0 330,000/ 0 0 / 0 (2)
Christopher E. Herald 45,833 143,457 219,375/ 0 0 / 0 (1)
0 0 70,000/ 0 0 / 0 (2)
James R. Maronick 0 0 28,750/36,250 0 / 0 (1)
0 0 25,000/25,000 0 / 0 (2)
</TABLE>
(1) Value based on market price of $2.30 per share of Crown
Common Stock at December 31, 1998, less the exercise price.
(2) Value based on market price of Cdn$1.15 per share of
Solitario Common Stock at December 31, 1998, less the exercise
price,
converted to U.S.$.
<TABLE>
TEN-YEAR OPTION/SAR REPRICINGS
<CAPTION>
Securities Years of
underlying Market price of Exercise price original option
number of stock at time of at time of New exercise term remaining
Name Date options/SARs repricing or repricing or price ($) at date of
repriced or amendment ($) amendment ($) repricing or
amended (#) amendment
<S> <C> <C> <C> <C> <C>
Mark E. Jones, III 6/19/1998 32,725(1) 4.06 4.19 4.06 4.7
Chair 65,450(1) 4.06 5.63 4.06 2.7
75,000(2) 4.06 5.75 4.06 3.5
62,333(1) 4.06 6.56 4.06 0.7
Christopher E. Herald 6/19/1998 48,125(1) 4.06 4.19 4.06 4.7
Pres 48,125(1) 4.06 5.63 4.06 2.7
75,000(2) 4.06 5.75 4.06 3.5
45,833(1) 4.06 6.56 4.06 0.7
James R. Maronick 6/19/1998 15,000(1) 4.06 4.30 4.06 4.7
VP Fin 50,000(1) 4.06 5.73 4.06 4.2
</TABLE>
(1) Options granted pursuant to the 1991 Plan.
(2) Options granted pursuant to the 1988 Plan.
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 an 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 SIX-COMPANY PEER GROUP (2)
Cumulative Total Return
<CAPTION>
12/93 12/94 12/95 12/96 12/97 12/98
<S> <C> <C> <C> <C> <C> <C>
CROWN RESOURCES CORPORATION 100 89 107 134 91 44
PEER GROUP 100 90 88 157 65 30
NASDAQ STOCK MARKET (U.S.) 100 98 138 170 208 294
S&P GOLD & PRECIOUS METALS
MINING 100 81 91 90 59 52
</TABLE>
(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, Bema Gold, Canyon Resources, Glamis
Gold, Metallica
Resources, and Royal Gold. Dakota Mining Corportation, included
in the prior
years' peer group, ceased trading during 1998 and has been
removed for all
years presented.<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 1999. 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) to David
Williamson
Associates, Ltd., of which David R. Williamson, director, is a
principal. In
addition, the Company paid David Williamson Associates, Ltd.
$5,141 for fees
and expenses related to investor relations and marketing during
1998.
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 2000
Annual Meeting
of Shareholders should be received by the Company prior to
January 1, 2000,
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, 1998.
By Order of the Board
of
Directors
James R. Maronick
Secretary
March 31, 1999
Denver, Colorado
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
CROWN RESOURCES CORPORATION
For Annual Meeting of Shareholders to be held on June 4, 1999
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 World Trade Center, 1625 Broadway,
Suite 580,
Denver, Colorado, on Friday, June 4, 1999, 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 vote 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
of 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_____ (1)
WITHHELD_____
(1) (All nominees) Except withhold authority to vote
for the
following 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.
DATED_________________________, 1999
____________________________________
(Signature)
_____________________________________
(Signature if held
jointly)
Mark here for address
change_________
