SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K/A-1
Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For The Fiscal Year Ended June 30, 1996.
Commission File No. 0-5664
ROYAL GOLD, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 84-0835164
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1660 Wynkoop Street
Suite 1000
Denver, Colorado 80202-1132
(Address of Principal Executive Officers) (Zip Code)
(303) 573-1660
(Registrant's Telephone Number, including Area Code)
Securities Registered Pursuant to Section 12(b) of the Act: None
Securities Registered Pursuant to Section 12(g) of the Act:
Common Stock $0.01 Par Value
(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past ninety (90) days.
Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]
As of August 30, 1996, the average bid and asked price of the Company's stock
was $13.69. The aggregate market value of voting stock held by non-
affiliates was $139,681,000. As of August 30, 1996, there were 15,462,166
shares of Common Stock, $0.01 par value, outstanding.
Documents Incorporated By Reference: None
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ITEM 11. EXECUTIVE COMPENSATION
The following table reflects all compensation awarded or paid to
or earned by the chief executive officer of the Company, and
other executive officers of the Company, for the fiscal year
ended June 30, 1996.
Annual Compensation
Name and Year Other
Principal Ended Annual
Position June 30 Salary($) Bonus($) Compensation($)
Stanley Dempsey 1996 185,000 75,000 -
Chairman & Chief 1995 160,000 75,000 (3) -
Executive 1994 130,000 50,000 -
Officer
Thomas A. Loucks 1996 108,000 25,000 -
Executive Vice 1995 105,000 40,000 -
President 1994 80,000 30,000 -
Karen P. Gross 1996 65,000 18,250 -
Vice President 1995 60,000 20,000 -
& Corporate 1994 36,000 10,000 -
Secretary
Peter B. Babin 1996 120,000 45,000 -
Executive Vice 1995 105,000 40,000 -
President 1994 80,000 20,000 28,000
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Long Term Compensation
Awards Payouts
Name and Year Restricted All Other
Principal Ended Stock Options/ LTIP Compensation
Position June 30 Awards SARs(#) Payouts($) ($)(1)(2)
Stanley Dempsey 1996 - 55,000 - 20,564
Chairman & Chief 1995 - 60,000 - 18,987
Executive 1994 - - - 5,338
Officer
Thomas A. Loucks 1996 - 20,000 - 10,291
Executive Vice 1995 - 39,000 - 10,553
President 1994 - - - 1,086
Karen P. Gross 1996 - 20,000 - 7,128
Vice President 1995 - 22,500 - 6,804
& Corporate 1994 - - - 1,204
Secretary
Peter B. Babin 1996 - 30,000 - 14,235
Executive Vice 1995 - 39,000 - 12,638
President 1994 - - - 2,284
(1) Each of the named individuals is currently employed pursuant to an
employment agreement that provides for salary and benefits
continuation for one full year following involuntary termination of
employment, or for one full year following voluntary termination of
employment after a "change in control" event.
(2) Amounts stated in column reflect dollar value of payments made under
the Company's SARSEP Plan, as described below under "Pension Plans,"
group term life insurance premiums paid on behalf of named
individuals, to provide death benefit equivalent to 100% of annual
salary; and value of long-term disability insurance premiums paid on
behalf of named individuals.
(3) Mr. Dempsey applied $36,396.16 of his 1995 bonus to the repayment of
the loan he received from the Company in 1993, as explained in Item
13, herein.
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Option Grants or Repricings in Last Fiscal Year
During the fiscal year ended June 30, 1996, 150,000 stock
options were awarded to employees of the Company. Of those
150,000 stock options, officers of the Company were awarded a
total of 125,000 stock options. No stock appreciation rights
were awarded to any of the officers of the Company, and no
existing options held by any of the officers of the Company were
repriced by the Company.
The following table sets forth certain information on option
grants in fiscal 1996 to the named executive officers.
Individual Grants
Number of % of Total
Securities Options
Underlying Granted to Exercise
Options Employees in Price Expiration
Name Granted (#) Fiscal Year ($/share) Date
Stanley Dempsey 43,236 (1) 28.8% $8.50 December 7, 2000
11,764 (2) 7.8% $8.50 December 7, 2005
Thomas A. Loucks 8,236 (1) 5.5% $8.50 December 7, 2000
11,764 (2) 7.8% $8.50 December 7, 2005
Karen P. Gross 8,236 (1) 5.5% $8.50 December 7, 2000
11,764 (2) 7.8% $8.50 December 7, 2005
Peter B. Babin 18,236 (1) 12.2% $8.50 December 7, 2000
11,764 (2) 7.8% $8.50 December 7, 2005
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Potential Realizable
Value at
Assumed Annual Rates
of Stock Price
Appreciation for Option
Name Term
5% 10%
Stanley Dempsey 294,008 745,075
Thomas A. Loucks 106,912 270,936
Karen P. Gross 106,912 270,936
Peter B. Babin 160,368 406,404
___________________
1. Non-incentive stock options granted.
2. Incentive stock options granted.
Option Exercises and Year-End Values
The table below sets forth information regarding the deemed
value of options exercised by officers during the year ended June
30, 1996, and the deemed value of options held by such persons at
June 30, 1996. At June 30, 1996, and at the date of this Proxy
Statement, no shares of Common Stock acquired by officers of the
Company as a result of the prior exercise of stock options were
sold; all remaining shares acquired as a result of the exercise
of stock options continue to be held by such officers.
Value of
Number of Unexercised
Shares Unexercised In-the-Money
Acquired on Value Options Held Options Held
Name Exercise (#) "Realized"($) at FY-End (#) at FY-End ($)
Stanley Dempsey 2,000 $ 19,500(1) 463,000(2) 6,019,000(3)
Thomas A. Loucks 5,000 $ 47,500(4) 330,720(2) 4,299,360(3)
Karen P. Gross --- --- 98,500(2) 1,280,500(3)
Peter B. Babin 15,000 $151,895(5) 279,000(2) 3,627,000(3)
(1) Based on difference between exercise price ($0.125/share)
and closing "bid" price as reported on NASDAQ, on the dates
of exercise (2,000 shares at $9.875/share).
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(2) Of the total of 1,171,220 options, 109,708 non-incentive
stock options (NSOs) are exercisable through December 6,
1999, at $7.875/share; 46,720 incentive stock options
(ISOs) are currently exercisable through December 4, 2000,
at $0.125/share; 77,944 NSOs are currently exercisable
through December 7, 2000, at $8.50/share; 839,000 ISOs are
currently exercisable through December 21, 2001, at
$0.125/share; 50,792 ISOs are exercisable through December
6, 2004, at $7.875/share; and 47,056 ISOs are currently
exercisable through December 7, 2005, at $8.50/share.
(3) Value calculated based on closing "bid" price at June 30,
1996, as reported on NASDAQ, of $13.00/share.
(4) Based on difference between exercise price ($0.125/share)
and closing "bid" price as reported on NASDAQ, on the date
of exercise (5,000 shares, at $9.625/share).
(5) Based on difference between exercise price ($0.125/share)
and closing "bid" price as reported on NASDAQ, on the date
of exercise (15,000 shares, at $10.25/share).
Compensation To Directors
During fiscal 1995, each non-employee director of the
Company received an annual fee of $6,000 for service as a
director, and fees of $500 for each meeting of the Board that any
such director attended. At a meeting of the Board of Directors
in December 1995, it was recommended and approved that each non-
employee director of the Company receive an annual fee of $12,000
for service as a director.
Employment Contracts
Each officer of the Company identified in the Summary
Compensation Table is employed pursuant to an employment contract
providing for salary at current salary levels. Each of the
employment contracts is renewable, for a term of 12 months, in
February 1997. Pursuant to each of the employment contracts,
salary and benefits are to be continued for 12 months following
such employee's involuntary termination, or following such
employee's voluntary termination after a "change in control"
event. A change in control event, as defined in the employment
contracts, will occur if: (1) continuing directors no longer
constitute at least two-thirds of the directors constituting the
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Board; (2) any person or group becomes the beneficial owner,
directly or indirectly, of 40% or more of the Company's
outstanding Common Stock; (3) approval by the Company's
Stockholders of the merger or consolidation of the Company with
any other corporation, unless the continuing directors in office
immediately prior to such event constitute at least two-thirds of
the directors constituting the board of directors of the
surviving corporation; or (4) at least two-thirds of the
continuing directors in office immediately prior to any other
action taken or proposed by the Company's Stockholders or by the
Board determines that such action constitutes a change of control
of the Company and such action is taken.
Board Compensation Committee Report on Executive Compensation
The Compensation Committee of the Board of Directors (the
"Committee") is responsible for setting and administering the
policies that govern the compensation for the executive officers
of the Company. The Committee is comprised of three outside
directors appointed annually by the Board of Directors.
The primary objectives of the Company's executive
compensation program are: to attract and retain key executives
who are critical to the long-term success of the Company, to
provide an economic framework that will motivate executives to
achieve goals consistent with the Company's business strategy, to
reward performance that benefits all Stockholders, and to provide
a compensation package that recognizes individual results and
contributions to the overall success of the Company.
The Committee's policy objectives are to pay base salaries
that are competitive with those paid by comparable companies in
the mining industry and bonuses when individual performance or
other circumstances warrant special recognition.
The Committee is responsible for considering specific
information when reviewing salary levels, as outlined in the
Company's Business Plan, and when making recommendations to the
full Board. When reviewing individual performance of officers of
the Company, the Committee also takes into account the view of
the Company's Chairman and Chief Executive Officer. At the end
of each year, the Committee evaluates each individual officer's
performance in order to determine whether to recommend the
payment of bonuses and/or options and, if so, the amount of each
such bonus and/or option.
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In making recommendations concerning executive
compensation, the Committee reviews individual executive
compensation, individual performance, corporate performance,
stock price appreciation, and total return to Stockholders for
the Company. The salary levels of the Company's executives and
officers are usually established by the Board of Directors at its
June meeting.
The Committee also reviews and approves stock option
awards, under the Company's Employee Stock Option Plan. The
purpose of stock option awards is to provide key employees with
an incentive to continue as employees of the Company over a long
term, and to align such employees' long range interests with
those of the Stockholders by providing the opportunity of having
an equity interest in the Company, i.e., to receive compensation
based on an increase in the Company's Common Stock price. The
Committee grants stock option awards based on salary, level of
responsibility and performance. All stock options are granted
with an exercise price equal to the market price of the Common
Stock on the date of grant. Incentive Stock Options (ISO) vest
in one year and have a 10-year term. Non-Incentive Stock
Options (NSO) vest on the date of grant and have a 5-year term.
During the fiscal year ended June 30, 1996, options to acquire
125,000 shares were awarded to officers of the Company and
options to acquire 25,000 shares were awarded to employees of the
Company who are not officers and/or directors.
Chief Executive Officer. In evaluating the performance and
setting the compensation of the Chairman and Chief Executive
Officer, the Committee meets without the Chairman and Chief
Executive Officer being present. In fiscal 1996, the Committee
took particular note of the continued strong performance of the
Company. The Committee believes that the Chairman and Chief
Executive Officer, as well as the other officers of the Company,
are strongly motivated and are dedicated to the growth of the
Company and to increasing stockholder value. Because of the
leadership provided by the Chairman and other officers of the
Company, and the appreciation of the Company's share price and
market capitalization during the past fiscal year, the Committee
felt that bonuses should be awarded and salaries increased for
the officers of the Company. Therefore, in fiscal 1996, bonuses
totaling $177,500 were awarded. Salaries were increased for
certain officers of the Company effective July 1, 1996.
This Report has been provided by the Compensation Committee:
John W. Goth, Chairman, James W. Stuckert, and Pierre Gousseland
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Pension Plans
In fiscal 1994, the Company established a variation of a
Simplified Employee Pension ("SEP") Plan, known as a Salary
Reduction/Simplified Employee Pension Plan ("SARSEP").
Management chose this Plan because of regulatory compliance
simplicity, avoidance of significant administrative expense,
availability of substantial tax-advantaged investment
opportunities, and relative freedom from significant vesting or
other limitations. Under this Plan, the Company may contribute
to a designated IRA account, on an annual basis, up to 15% of
each employee-participant's base compensation. Each such
contribution would, within limits, be a deductible expense to the
Company; would be free of federal income taxation as to the
employee; and would be subject to continuing investment, on a
tax-deferred basis, until assets are actually distributed to the
employee. All employees of Royal Gold are eligible to
participate in the SEP Plan.
Performance Graph
The following graph compares the cumulative total
stockholder return on Royal Gold's Common Stock with the
cumulative total return of two other stock market indices:
Standard and Poor's 500 Index and Standard and Poor's Gold Mining
Index.
CUMULATIVE TOTAL SHAREHOLDER RETURN CHART
6/30/91 6/30/92 6/30/93 6/30/94 6/30/95 6/30/96
Royal Gold $100 $200 $1,100 $2,167 $2,200 $3,467
S&P 500 Index $100 $113 $ 129 $ 131 $ 165 $ 208
S&P Gold Mining Index $100 $ 91 $ 139 $ 133 $ 139 $ 148
(i) S & P 500 Index. Represents the return an investor would
have secured (assuming reinvestment of all dividends) on
the basis of an investment of $100 in the 500 equity issues
that make up the Standard and Poor's 500 Index.
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(ii) S & P Gold Mining Index. Represents the return an investor
would have secured (assuming reinvestment of all dividends)
on the basis of an investment of $100 in the five equity
issues that make up the Standard and Poor's Gold Mining
Index (Echo Bay Mines Ltd., Homestake Mining Company,
Newmont Gold Company, Placer Dome Inc. and Santa Fe Pacific
Gold Corporation).
(iii) The material in this chart is not "soliciting material," is
not deemed "filed" with the Commission, and is not to be
incorporated by reference in any filing of the Company
under the Securities Act or the Exchange Act, whether made
before or after the date hereof and irrespective of any
general incorporation language in any such filing.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Name and Address Number of Shares of Common Stock Percent
of Beneficial Beneficially Subject to: of
Owners Owned Options (a) Warrants (b) Total (c) Class
Stanley Dempsey (d) 495,167 463,000 15,000 973,167 6.3
Royal Gold, Inc.
1660 Wynkoop Street
Suite 1000
Denver, Colorado 80202
Edwin W. Peiker, Jr. (e) 455,178 17,500 15,000 487,678 3.1
Royal Gold, Inc.
1660 Wynkoop Street
Suite 1000
Denver, Colorado 80202
John W. Goth 15,000 15,000 -0- 30,000 *
1536 Cole Boulevard
Suite 320
Golden, Colorado 80401
Pierre Gousseland 32,500 10,000 -0- 42,500 *
4 Lafayette Court
Suite 1B
Greenwich, Connecticut 06836
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Name and Address Number of Shares of Common Stock Percent
of Beneficial Beneficially Subject to: of
Owners Owned Options (a) Warrants (b) Total (c) Class
James W. Stuckert 1,560,874 15,000 80,000 1,655,874 10.7
Hilliard, Lyons, Inc.
P.O. Box 32760
Louisville, Kentucky 40232
Merritt E. Marcus 396,243 17,500 20,000 433,743 2.8
Marcus Paint Company
235 East Market Street
Louisville, Kentucky 40202
S. Oden Howell, Jr. 529,680 15,000 30,000 574,680 3.7
H&N Constructors, Inc.
2603 Grassland Drive
Louisville, Kentucky 40299
Thomas A. Loucks 147,278 330,720 57,500 535,498 3.5
Royal Gold, Inc.
1660 Wynkoop Street
Suite 1000
Denver, Colorado 80202
Peter B. Babin 150,250 279,000 3,000 432,250 2.8
Royal Gold, Inc.
1660 Wynkoop Street
Suite 1000
Denver, Colorado 80202
Karen P. Gross 19,650 98,500 -0- 118,150 *
Royal Gold, Inc.
1660 Wynkoop Street
Suite 1000
Denver, Colorado 80202
All Directors & 3,801,820 1,261,220 220,500 5,283,540 34.1
Officers as a
Group (10 persons)
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Name and Address Number of Shares of Common Stock Percent
of Beneficial Beneficially Subject to: of
Owners Owned Options (a) Warrants (b) Total (c) Class
Cortez Gold Mines 790,765 -0- -0- 790,765 5.1
c/o Placer Dome U.S. Inc.
One California Avenue
Suite 2500
San Francisco, CA 94111
Societe Generale 1,725,000 -0- -0- 1,725,000 11.1
37, rue du Rocher
75008 Paris, France
__________________
* Less than 1% ownership of the Company's Common Stock.
(a) See "Compensation of Directors and Executive Officers --
Option Exercises and Year End-Values."
(b) The warrants have a weighted average exercise price of
$1.30.
(c) The amounts shown in the table reflect all shares
beneficially owned, including shares subject to outstanding
warrants and stock options that are exercisable within
sixty (60) days of the date of this Form 10-K/A-1.
(d) The amount shown in the table reflects shares beneficially
owned by Mr. Dempsey and members of his immediate family.
Members of Mr. Dempsey's family beneficially own 138,400
shares of Common Stock. Mr. Dempsey disclaims beneficial
ownership of these 138,400 shares of Common Stock.
(e) The amount shown in the table reflects shares beneficially
owned by Mr. Peiker and members of his immediate family.
Members of Mr. Peiker's family beneficially own 15,600
shares of Common Stock. Mr. Peiker disclaims beneficial
ownership of these 15,600 shares of Common Stock.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In October 1993, the Compensation Committee recommended,
and the Board of Directors determined, to award Mr. Dempsey a
bonus of $25,000 and authorized the Company to extend a loan to
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Mr. Dempsey in the amount of $75,000. The proceeds of the bonus
and loan were used to defray an alternative minimum tax incurred
by Mr. Dempsey in connection with his exercise of an incentive
stock option in December 1992. The loan accrued interest at the
market rate of 4% and was payable in December 1994. On December
6, 1994, the Board of Directors approved the recommendation of
the Compensation Committee that Mr. Dempsey receive a bonus of
$75,000, and that $40,000 of such bonus be applied against the
outstanding loan balance. The remaining balance of the loan, in
the amount of $35,000 plus interest, was extended to December 31,
1995. On December 7, 1995, the Board of Directors approved the
recommendation of the Compensation Committee that Mr. Dempsey
receive a bonus of $75,000, and that $36,396.16 of such bonus be
applied against the outstanding loan balance. There is no
remaining balance of the loan.
Pursuant to the requirements of Section 13 or 15 (d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
ROYAL GOLD, INC.
Date: October 28, 1996 By:/S/Stanley Dempsey
Stanley Dempsey, Chairman,
Chief Executive Officer,
and Director
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