ROYAL GOLD, INC.
1660 Wynkoop Street, Suite 1000
Denver, Colorado 80202
303/573-1660
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held December 2, 1997
* * * *
To the Stockholders of ROYAL GOLD, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of the
Stockholders of Royal Gold, Inc. (the "Company"), a Delaware
corporation, will be held at the Oxford Hotel, Sage Room, 1600
Seventeenth Street, Denver, Colorado, on Tuesday, December 2, 1997,
at 1:30 P.M., Mountain Standard Time, for the following purposes:
1. To elect three Class I directors to serve until the 2000
Annual Meeting of Stockholders or until each such
director's successor is elected and qualified;
2. To ratify the appointment of Coopers & Lybrand L.L.P. as
independent auditors of the Company for the fiscal year
ended June 30, 1998; and
3. To transact any other business that may properly come
before the meeting and any adjournments thereof.
Only stockholders of record at the close of business on
October 10, 1997, will be entitled to notice of and to vote at the
meeting and any adjournment of the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Karen P. Gross
Vice President & Corporate Secretary
Denver, Colorado
October 30, 1997
WHETHER OR NOT YOU PLAN TO ATTEND THIS MEETING, PLEASE COMPLETE,SIGN AND
RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE. THE
PROMPT RETURN OF YOUR COMPLETED PROXY WILL ASSIST THE COMPANY IN
OBTAINING A QUORUM OF STOCKHOLDERS FOR THE ANNUAL MEETING. YOU ARE
ALSO ENTITLED TO REVOKE YOUR PROXY AT ANY TIME PRIOR TO THE
MEETING, OR TO CHANGE YOUR VOTE BY SUBSEQUENT PROXY, OR TO VOTE IN
PERSON AT THE MEETING.
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
ROYAL GOLD, INC.
1660 Wynkoop Street
Suite 1000
Denver, Colorado 80202
303/573-1660
SOLICITATION AND REVOCATION OF PROXIES
This Proxy Statement is furnished to the Stockholders of Royal
Gold, Inc. (the "Company" or "Royal Gold"), a Delaware corporation,
in connection with the solicitation, by and on behalf of the Board
of Directors of the Company, of proxies to be voted at the Annual
Meeting of the Stockholders of the Company (the "Meeting") to be
held at 1:30 P.M. on Tuesday, December 2, 1997, at the Oxford
Hotel, Sage Room, 1600 Seventeenth Street, Denver, Colorado. This
Proxy Statement, the enclosed Proxy and the Company's Annual Report
for the fiscal year ended June 30, 1997, are being mailed to Stockholders
on or about October 31, 1997.
Only holders of shares of the Common Stock ($.01 par value) of
the Company ("Common Stock") of record at the close of business on
October 10, 1997, will be entitled to notice of, and to vote at,
the Meeting and at any and all adjournments thereof.
If the enclosed Proxy is properly executed and received by the
Company by 2:00 p.m. on December 2, 1997, the shares represented by
the Proxy will be voted at the Meeting in accordance with the
instructions indicated thereon. If no choice is indicated, the
shares will be voted FOR each of the proposals identified herein.
Stockholders who execute Proxies retain the right to revoke such
Proxies at any time before they are voted by filing with the
Secretary of the Company either an instrument revoking the Proxy or
a duly executed Proxy bearing a later date. Proxies may also be
revoked by any Stockholder present at the Meeting who desires to
vote his or her shares in person.
Solicitation of Proxies may be made by directors, officers or
employees of the Company, without additional compensation, by
telephone, facsimile, or personal interview as well as by mail.
The Company will request banks and brokers to solicit their
customers who beneficially own Common Stock listed in the name of
the nominees and will reimburse said banks and brokers for the
reasonable out-of-pocket expense of such solicitation. Costs of
solicitation will be borne by the Company.
VOTING RIGHTS
All voting rights are vested exclusively in the holders of the
Common Stock. As of the record date, October 10, 1997, there were
issued and outstanding 16,095,194 shares of Common Stock, each of
which entitles the holder thereof to one vote in all matters which
may come before the Meeting. A majority of the issued and
outstanding shares of Common Stock, whether represented in person
or by Proxy, shall constitute a quorum at any meeting of the
Stockholders. The affirmative vote of sixty percent (60%) of the
shares that are represented at a meeting at which a quorum is
present shall be the act of the Stockholders. In the election of
directors, each Stockholder eligible to vote may vote the number of
shares of Common Stock held for as many persons as there are
directors to be elected, but cumulative voting is not permitted.
Under Delaware law, holders of Common Stock are not entitled to
appraisal or dissenters' rights with respect to the matters to be
considered at the Meeting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table shows the beneficial ownership, as of
September 30, 1997, of the Common Stock by each director, by each
executive officer, by any person who is known to the Company to be
the beneficial owner of more than 5% of the issued and outstanding
shares of Common Stock, and by all of the Company's directors and
executive officers as a group.
Name and Address Number of Shares of Common Stock Beneficially Owned Percent
of Beneficial Subject to of
Owners Shares Options(a) Total(b) Class
- -----------------------------------------------------------------------------
Stanley Dempsey (c) 516,031 460,800 976,831 6.1
Royal Gold, Inc.
1660 Wynkoop Street
Suite 1000
Denver, Colorado 80202
Edwin W. Peiker, Jr. (d) 431,578 22,500 454, 078 2.8
Royal Gold, Inc.
1660 Wynkoop Street
Suite 1000
Denver, Colorado 80202
John W. Goth 15,000 20,000 35,000 *
1536 Cole Boulevard
Suite 320
Golden, Colorado 80401
Pierre Gousseland 32,000 15,000 47,000 *
4 Lafayette Court
Suite 1B
Greenwich, Connecticut 06836
James W. Stuckert 1,624,601 15,000 1,639,601 10.2
Hilliard, Lyons, Inc.
P.O. Box 32760
Louisville, Kentucky 40232
Merritt E. Marcus 421,243 17,500 438,743 2.7
Marcus Paint Company
235 East Market Street
Louisville, Kentucky 40202
S. Oden Howell, Jr. 568,680 20,000 588,680 3.7
H&N Constructors, Inc.
2603 Grassland Drive
Louisville, Kentucky 40299
Thomas A. Loucks 260,358 290,720 551,078 3.4
Royal Gold, Inc.
1660 Wynkoop Street
Suite 1000
Denver, Colorado 80202
Peter B. Babin(e) 192,800 264,000 456,800 2.8
Royal Gold, Inc.
1660 Wynkoop Street
Suite 1000
Denver, Colorado 80202
Karen P. Gross 34,640 103,500 138,140 *
Royal Gold, Inc.
1660 Wynkoop Street
Suite 1000
Denver, Colorado 80202
All Directors & 4,096,931 1,229,020 5,325,951 33.1
Officers as a
Group (10 persons)
Tour Societe Generale 2,038,600 0 2,038,600 12.7
Rese/Ges/OPC
92972 Paris-Ladefense CE DEX
__________________
* 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 amounts shown in the table reflect all shares
beneficially owned, including shares subject to outstanding
stock options that are exercisable within sixty (60) days of
the date of this Proxy Statement.
(c) 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 135,334
shares of Common Stock. Mr. Dempsey disclaims beneficial
ownership of these 135,334 shares of Common Stock.
(d) 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.
(e) The amount shown in the table reflects shares beneficially
owned by Mr. Babin and members of his immediate family.
Members of Mr. Babin's family beneficially own 19,850 shares
of Common Stock. Mr. Babin disclaims beneficial ownership of
these 19,850 shares of Common Stock.
PROPOSAL 1.
ELECTION OF CLASS I DIRECTORS
The Company's Board of Directors consists of three classes of
directors, with each class of directors serving for a three-year
term ending in a successive year. The Company's current Class I
directors are Messrs. Dempsey, Babin and Goth; the Class II
directors are Messrs. Stuckert, Marcus and Gousseland; and the
Class III directors are Messrs. Peiker and Howell. Mr. Babin was
elected as a Class I director on October 22, 1997, to fill a
vacancy on the Board created by an amendment to the by-laws, on
that date, increasing the size of the Board to eight members.
If the enclosed Proxy is duly executed and timely received
for the Meeting, and if no contrary specification is made as
provided therein, it is the intention of the persons named therein
to vote the shares represented thereby FOR Stanley Dempsey, John W.
Goth, and Peter B. Babin as Class I directors of the Company. If
any of the nominees for election as a Class I director should
refuse or be unable to serve (an event that is not anticipated),
the Proxy will be voted for such person who shall be designated by
the Board of Directors to replace such nominee. Each Class I
director elected at the Meeting shall serve until the 2000 Annual
Meeting, or until his successor is elected and qualified.
Information concerning the nominees for election as directors
is set forth below under "Directors and Officers."
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS
A VOTE "FOR" THE DIRECTOR NOMINEES.
DIRECTORS AND OFFICERS
Set forth below are the names, periods of service and past
experience of the directors and officers of the Company. The
persons who are nominated for election as directors at the Meeting
are indicated with an asterisk.
*Stanley Dempsey
Age 58; Chairman and Chief Executive Officer since August 1984;
Class I director; Term expires 1997.
Executive Officer of the Company since April 4, 1988. President
and Chief Operating Officer of the Company from July 1, 1987 to
April 4, 1988. From 1984 through June 1986, Mr. Dempsey was a
partner in the law firm of Arnold & Porter. During the same
period, he was a principal in Denver Mining Finance Company. From
1960 through 1987, Mr. Dempsey was employed by AMAX, Inc. serving
in various managerial and executive capacities. Mr. Dempsey
currently serves as a director of Dakota Mining Corporation, Behre
Dolbear & Company, Inc., and Hazen Research, Inc. and is also a
member of the board of directors of various mining-related
associations.
*Peter B. Babin
Age 43; President of the Company since December 10, 1996; Class I
director; Term Expires 1997.
Executive Vice President of the Company from January 1, 1995 to
December 10, 1996. Senior Vice President from July 1, 1993 to
January 1, 1995. From 1989 until 1993, Mr. Babin was a consultant
to the Company. From 1986 through 1989, Mr. Babin was Senior Vice
President and General Counsel of Medserv Corporation, a provider of
ancillary health care services.
*John W. Goth
Age 70; Director since August 1988; Class I director; Term expires
1997.
Executive Director of the Denver Gold Group and Vice Chairman of
the Minerals Information Institute. A consultant to the mining
industry since 1985. Mr. Goth was formerly a senior executive of
AMAX, Inc. and director of Magma Copper Corporation. He is
currently a director of U.S. Gold Corporation, U.S. Zeolites, Inc.
and Banro Resources Corporation. (1) (2)
Pierre Gousseland
Age 75; Director since June 1992; Class II director; Term expires
1998.
Financial Consultant. From 1977 until January 1986, Mr. Gousseland
was Chairman and Chief Executive Officer of AMAX, Inc. He is
presently a Director of Guyanor Resources S.A., and Golden Star
Resources, Ltd. and Advisory Director of NGV Systems Inc.
Formerly, Director of the French American Banking Corporation of
New York, the American International Group, Inc., Union Miniere,
S.A. (Belgium), Degussa AG (Germany), IBM World Trade
Europe/Middle East Africa Corporation, Pancontinental Mining Europe
GmbH (Germany), and Sauer Group Investments Ltd. Mr. Gousseland
has served on the Chase Manhattan International and Creditanstaldt
International (Vienna, Austria) Advisory Boards, and is past
president of the French-American Chamber of Commerce in the United
States. (2)
Merritt E. Marcus
Age 63; Director since December 1992; Class II director; Term
expires 1998.
President and Chief Executive Officer of Marcus Paint Company, a
producer of industrial coatings, and Performance Powders, LLC, a
producer of industrial powder coatings. Mr. Marcus is a director
of Lawson United Corporation, and has served several terms as a
director of the National Paint and Coatings Association.
James W. Stuckert
Age 59; Director since September 1989; Class II director; Term
expires 1998.
Chairman and Chief Executive Officer of Hilliard, Lyons, Inc. of
Louisville, Kentucky. Mr. Stuckert joined Hilliard, Lyons, Inc. in
1962 and served in several capacities prior to being named Chairman
in December 1995. Mr. Stuckert is a Director of DataBeam
Corporation, Thomas Transportation Group, Inc., and Lawson United
Corporation, and a Board of Governor Member of the Security
Industries Association. (1) (2)
S. Oden Howell, Jr.
Age 57; Director since December 1993; Class III director; Term
expires 1999.
Consultant to H&N Constructors, Inc., a contractor specializing in
remodeling and rehabilitation of government facilities. From 1988
until 1977, Mr. Howell was Secretary/Treasurer of H&N Constructors,
Inc. From 1972 until 1988, Mr. Howell was Secretary/Treasurer of
Howell & Howell, Inc. He is currently a Director of Florafax
International, Inc. and Lawson United Corporation.
Edwin W. Peiker, Jr.
Age 66; Director since May 1987; Class III director; Term expires
1999.
President and Chief Operating Officer of the Company from April
1988 until February 1992. Vice President of Engineering of the
Company from May 1987 to April 4, 1988. Principal in Denver Mining
Finance Company from 1984 until 1986. From 1983 to 1986, Mr.
Peiker was engaged in mineral consulting activities. During the
period 1966-1983, Mr. Peiker served in a variety of positions with
the Climax Molybdenum division of AMAX, Inc. involved in
exploration activities worldwide. (1) (2)
Karen P. Gross
Age 43
Vice President of the Company since June 1994 and Corporate
Secretary since 1989. From 1987 until 1989, Ms. Gross was the
Assistant Secretary to the Company and Executive Assistant.
Thomas A. Loucks
Age 48
Executive Vice President and Treasurer of the Company since 1991.
From August 1988 until 1991, Mr. Loucks was Vice President,
Corporate Development of the Company. From August 1985 until
August 1988, Mr. Loucks was a Business Development Analyst with
Newmont Mining Company. Mr. Loucks is a Director of the Society of
Economic Geologists, Inc., the Society of Economic Geologists
Foundation, Inc., and the Economic Geology Publishing Company.
___________
(1) Member of Audit Committee.
(2) Member of Compensation Committee.
MEETINGS AND COMMITTEES OF THE BOARD
During the fiscal year ended June 30, 1997, the Board of
Directors held four regular meetings and on seven separate
occasions action was taken by unanimous consent. Each director
attended (in person or by telephone) at least 75% of the aggregate
number of meetings of the Board and of the Committee(s) of the
Board on which he served.
The Board of Directors has a standing Audit Committee and a
standing Compensation Committee. During the year ended June 30,
1997, the Audit Committee consisted of James W. Stuckert, John W.
Goth, and Edwin W. Peiker, Jr. The Audit Committee held two
meetings during the fiscal year. The function of the Audit
Committee is to review internal financial procedures and reports,
to recommend changes in the method of reporting to ensure timely
and accurate reporting of financial data, and to review audit
principles in conjunction with the Company's independent auditors.
During the year ended June 30, 1997, the Compensation
Committee consisted of John W. Goth, James W. Stuckert and Pierre
Gousseland. The Compensation Committee met twice during the last
fiscal year. The Compensation Committee's function is to review
and make recommendations to the Company's Board of Directors
concerning the level and form of compensation paid to the officers
and key employees of the Company.
None of the members of the Compensation Committee is or has
been an officer or employee of the Company, and none of the
executive officers of the Company has served as a member of the
Compensation Committee or as a director of another entity, one of
whose executive officers served on the Compensation Committee or as
a director of the Company.
COMPLIANCE WITH SECTION 16(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires the Company's officers and directors, and persons
who own more than 10% of a registered class of the Company's equity
securities, to file reports of ownership and changes in ownership
to the Securities and Exchange Commission. Officers, directors and
greater than 10% stockholders are required by the regulations of
the Securities and Exchange Commission to furnish the Company with
copies of all Section 16(a) reports they file. Based solely on its
review of copies of such reports received by it and written
representations from certain reporting persons that no other
reports were required for those persons, the Company believes that
all filing requirements applicable to its officers, directors and
greater than 10% stockholders were complied with for the fiscal
year ended June 30, 1997.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
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, 1997.
Annual Compensation
-----------------------------------------------------
Name and Year Other
Principal Ended Annual
Position June 30 Salary($) Bonus($) Compensation ($)
- ---------------------------------------------------------------------
Stanley Dempsey 1997 215,000 100,000 -
Chairman & Chief 1996 185,000 75,000 -
Executive Officer 1995 160,000 75,000(2) -
Peter B. Babin 1997 160,000 65,000 -
President 1996 120,000 40,000 -
1995 105,000 20,000 -
Thomas A. Loucks 1997 114,000 35,000 -
Executive Vice 1996 108,000 25,000 -
President 1995 105,000 40,000 -
Karen P. Gross 1997 90,000 27,000 -
Vice President 1996 65,000 18,250 -
& Corporate 1995 60,000 20,000 -
Secretary
Long-Term Compensation
Payouts
----------------------------------------------------------
Name and Year Restricted All Other
Principal Ended Stock Options/ LTIP Compensation
Position June 30 Awards SARs(#) Payouts($) ($) (1)
- -----------------------------------------------------------------------------
Stanley Dempsey 1997 - 50,000 - 25,562
Chairman & Chief 1996 - 55,000 - 20,564
Executive Officer 1995 - 60,000 - 18,987
Peter B. Babin 1997 - 30,000 - 19,718
President 1996 - 30,000 - 14,235
1995 - 39,000 - 12,638
Thomas A. Loucks 1997 - 20,000 - 11,650
Executive Vice 1996 - 20,000 - 10,291
President 1995 - 39,000 - 10,553
Karen P. Gross 1997 - 20,000 - 9,732
Vice President 1996 - 20,000 - 7,125
& Corporate 1995 - 22,500 - 6,804
Secretary
(1) 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.
(2) Mr. Dempsey applied $36,396 of his 1995 bonus to the
repayment of the loan he received from the Company in 1993,
as explained in the section "Certain Relationships and
Related Transactions."
Option Grants in Last Fiscal Year
- ---------------------------------
During the fiscal year ended June 30, 1997, officers of the
Company were awarded a total of 120,000 stock options, no stock
appreciation rights were awarded to any of the officers of the
Company, and no existing options held by any of the officers of the
Company were repriced by the Company.
The following table sets forth certain information on option
grants in fiscal 1997 to the named executive officers.
Individual Grants
--------------------------------------------------------
Number of % of Total
Securities Options
Underlying Granted to Exercise
Options Employees in Price Expiration
Name Granted (#) Fiscal Year ($/share) Date
- -------------------------------------------------------------------------
Stanley Dempsey 50,000 31.4% $14.125 December 10, 2006
Peter B. Babin 30,000 18.9% $14.125 December 10, 2006
Thomas A. Loucks 20,000 12.6% $14.125 December 10, 2006
Karen P. Gross 20,000 12.6% $14.125 December 10, 2006
Potential Realizable
Value at
Assumed Annual Rates
of Stock Price
Appreciation for Option
Term
- --------------------------------------------------------------------------
5% 10%
------- ---------
Stanley Dempsey 444,157 1,125,581
Peter B. Babin 266,494 675,348
Thomas A. Loucks 177,663 450,232
Karen P. Gross 177,663 450,232
Option Exercises and Year-End Values
- ------------------------------------
The table below sets forth information regarding the deemed
value of options exercised by officers during the year ended June
30, 1997, and the deemed value of options held by such persons at
June 30, 1997. At June 30, 1997, and at the date of this Proxy
Statement, no shares of Common Stock acquired by officers of the
Company as a result of the exercise of stock options as set forth
below were sold; all shares acquired as a result of the exercise of
such stock options continue to be held by such officers.
Value of
Exercisable/
Number of Unexercisable
Shares Unexercised In-the-Money
Acquired on Value Options Held Options Held
Name Exercise (#) "Realized"($) at FY-End (#) at FY-End ($)
- -----------------------------------------------------------------------------
Stanley Dempsey 36,800 $360,950(1) 460,800 (2) 2,660,850/0(3)
Thomas A. Loucks 44,000 $406,875(4) 290,720 (2) 1,923,350/0(3)
Peter B. Babin 50,000 $500,000(6) 264,000 (2) 1,490,195/0(3)
Karen P. Gross 15,000 $155,625(5) 103,500 (2) 357,550/0(3)
(1) Based on difference between exercise price ($0.125/share) and
closing "sale" price as reported on NASDAQ, on the dates of
exercise (2,000 shares at $9.875/share; 17,400 shares at
$11.25/share; 17,400 shares at $8.625 share).
(2) Of the total of 1,119,020 options, 109,708 Non-Incentive
Stock Options ("NSOs") are exercisable through December 6,
1999, at $7.875/share; 77,944 NSOs are exercisable through
December 7, 2000, at $8.50/share; 1,720 Incentive Stock
Options ("ISO") are exercisable through December 4, 2000, at
$0.125/share; 754,200 ISOs are exercisable through December
21, 2001, at $0.125/share; 50,792 ISOs are exercisable
through December 6, 2004, at $7.875/share; 47,056 ISOs are
exercisable through December 7, 2005, at $8.50/share, 92,000
NSOs are exercisable through December 10, 2006, at
$14.125/share, and 28,000 ISOs are exercisable through
December 10, 2006, at $14.125/share.
(3) Value calculated based on closing "sale" price as reported on
NASDAQ, at June 30, 1997, of $8.50/share.
(4) Based on difference between exercise price ($0.125/share) and
closing "sale" price as reported on NASDAQ, on the dates of
exercise (15,000 shares, at $10.50/share; 15,000 shares at
$8.75/share; 15,000 shares at $8.25/share).
(5) Based on difference between exercise price ($0.125/share) and
closing "sale" price as reported on NASDAQ, on the date of
exercise (15,000 shares, at $10.50/share).
(6) Based on difference between exercise price ($0.125/share) and
closing "sale" price as reported on NASDAQ, on the dates of
exercise (15,000 shares at $10.25/share; 15,000 shares at
$10.50; 10,000 shares at $11.25/share; 10,000 shares at
$8.25/share).
Compensation To Directors
- -------------------------
During fiscal 1997, each non-employee director of the Company
received an annual fee of $12,000 for service as a director.
Pursuant to the Company's Equity Incentive Plan, each non-
employee director of the Company was granted, in December 1996, an
NSO to purchase 5,000 shares of Common Stock, at an exercise price
of $14.125 per share, which was the closing price of the Company's
stock on December 10, 1996. Such options have a ten year term and
are exercisable immediately with respect to 2,500 shares and after
12 months with respect to the other 2,500 shares.
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 1998. 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) the acquisition, directly or indirectly by any
person or related group of persons, of beneficial ownership of
securities possessing more than thirty percent (30%) of the total
combined voting power of the Company's outstanding securities; (2)
a change in the composition of the Board over a period of eighteen
(18) consecutive months or less such that fifty percent (50%) or
more of the Board members cease to be directors who either (A) have
been directors continuously since the beginning of such period, or
(B) have been unanimously elected or nominated by the Board for
election as directors during such period; (iii) a stockholder-
approved merger or consolidation to which the Company is a party
and in which (A) the Company is not the surviving entity, or (B)
securities possessing more than thirty percent (30%) of the total
combined voting power of the Company's outstanding securities are
transferred to a person or persons different from the persons
holding those securities immediately prior to such transaction; or
(iv) the sale, transfer or other disposition of all or
substantially all of the Company's assets in complete liquidation
or dissolution of the Company.
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 views of the
Company's Chairman and Chief Executive Officer. Before or 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.
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 Equity Incentive 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 vest in one year and have a 10-year term. Non-
Incentive Stock Options vest on the date of grant and have a 10-
year term. During the fiscal year ended June 30, 1997, options to
acquire 150,000 shares were awarded to officers of the Company and
options to acquire 54,000 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 1997, the Committee
took particular note of the 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, the Committee
felt that bonuses should be awarded and salaries increased for the
officers of the Company. Therefore, in fiscal 1997, bonuses
totaling $227,000 were awarded. Salaries were increased for
certain officers of the Company effective July 1, 1997.
This Report has been provided by the Compensation Committee:
John W. Goth, Chairman, James W. Stuckert, and Pierre Gousseland
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 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
6/30/92 6/30/93 6/30/94 6/30/95 6/30/96 6/30/97
-----------------------------------------------------
Royal Gold $100 $550 $1,083 $1,100 $1,733 $1,133
S&P 500 Index $100 $114 $ 115 $ 145 $ 183 $ 247
S&P Gold
Mining Index $100 $153 $ 147 $ 154 $ 164 $ 128
(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.
(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 four equity
issues that make up the Standard and Poor's Gold Mining Index
(Barrick Gold Corporation, Battle Mountain Gold, Echo Bay
Mines Ltd., Homestake Mining Company, Newmont Gold Company,
and Placer Dome Inc.).
(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.
PROPOSAL 2.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors recommends that the Stockholders
ratify the appointment of Coopers & Lybrand L.L.P., independent
certified public accountants to audit the consolidated financial
statements of the Company for the fiscal year ended June 30, 1998.
Coopers & Lybrand has acted as auditors of the Company since
October 1995, and has also rendered certain non-audit services to
the Company, including tax advice.
The ratification of the appointment of Coopers & Lybrand is
being submitted to the Stockholders because the Board of Directors
believes this to be a good corporate practice. Should the
Stockholders fail to ratify this appointment, the Board of
Directors will review the matter.
Representatives of Coopers & Lybrand have been invited to
attend the Annual Meeting of Stockholders. They will have an
opportunity to make a statement, if they so desire, and will have
an opportunity to respond to appropriate questions from the Stockholders.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR"
THE RATIFICATION OF THE APPOINTMENT OF COOPERS & LYBRAND
AS INDEPENDENT AUDITORS OF THE COMPANY.
OTHER MATTERS
The Board of Directors knows of no other matters to be
brought before the Meeting. However, if other matters should come
before the Meeting, it is the intention of each person named in the
Proxy to vote such Proxy in accordance with his judgment on such
matters.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 1998
Annual Meeting of Stockholders must be received by the Company at
its principal executive office in Denver, Colorado, by July 1,
1998, if such proposals are to be included in the proxy materials
for the 1998 Annual Meeting of Stockholders. The inclusion of any
Stockholder proposal in the proxy materials for the 1998 Annual
Meeting of Stockholders will be subject to applicable rules of the
Securities and Exchange Commission.
BY ORDER OF THE BOARD OF DIRECTORS
Karen P. Gross
Vice President & Corporate Secretary
Denver, Colorado
October 31, 1997
Upon the written request of any record holder or beneficial owner
of Common Stock entitled to vote at the Annual Meeting, the Company
will provide, without charge, a copy of its Annual Report on Form
10-K, as filed with the Securities and Exchange Commission for the
fiscal year ended June 30, 1997. Requests for a copy of such
Annual Report should be mailed to Karen P. Gross, Vice President &
Corporate Secretary, Royal Gold, Inc., 1660 Wynkoop Street, Suite
1000, Denver, Colorado 80202-1132, or send your request by e-mail
to [email protected].
