<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934.
Filed by the Registrant [ x ]
Filed by Party other than the Registrant [ ]
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only [as permitted by Rule
14a-6(e)(2)]
[ x ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
ROYAL SILVER MINES, INC.
(Exact name of Registrant as specified in its charter.)
Commission File number 0-25170
Payment of Filing Fee (Check the appropriate box):
[ x ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-1:
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction
computed pursuant to Exchange Act
Rule O-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided
by Exchange Act Rule O-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:
<PAGE> 2
May 7, 1997
Dear Shareholders:
On behalf of the Board of Directors, you are cordially
invited to attend the Annual Meeting of Shareholders of ROYAL
SILVER MINES, INC. to be held at the Cavanaugh's Inn at the Park,
303 West North River Drive, Ballroom D, Spokane, Washington, on
Thursday, May 29, 1997, commencing at 1:30 p.m., P.D.T. We look
forward to the opportunity of personally greeting those of you
who are able to attend.
At the meeting you are being asked to consider the election
of six directors, increasing the authorized shares of Common
Stock of the Company, authorizing a class of Preferred Stock and
the appointment of independent auditors.
The complete text of these proposals and the reasons the
directors have proposed their adoption are contained in this
proxy statement. I urge you to carefully study them.
FOR THE REASONS STATED THEREIN, YOUR BOARD OF DIRECTORS
RECOMMENDS THAT YOU VOTE "FOR" THESE PROPOSALS.
During the course of the meeting, management will report on
the current activities of ROYAL SILVER MINES, INC. and comment on
its future plans. A discussion period is also planned so that
Shareholders will have an opportunity to ask questions and
present their comments.
Under the provisions of the Bylaws, the Board of Directors
has fixed the close of business on April 3, 1997 as the record
date for the determination of Shareholders entitled to notice of
and to vote at the meeting.
Please take a moment to sign, date and mail your proxy in
the enclosed envelope. Should you later decide to join us at the
meeting, you may withdraw your proxy at that time and vote in
person.
Thank you for your interest and consideration.
Very truly yours,
HOWARD CROSBY
Chairman of the Board
<PAGE> 3
ROYAL SILVER MINES, INC.
Notice of Annual Meeting of Shareholders
To Shareholders:
The Annual Meeting of Shareholders of ROYAL SILVER MINES,
INC. (the "Company") will be held at the Cavanaugh's Inn at the
Park, 303 West North River Drive, Ballroom D, Spokane,
Washington, on Thursday, May 29, 1997, commencing at 1:30 p.m.,
P.D.T., for the following purposes:
1. Election of six directors to succeed those whose terms
have expired;
2. To consider and act upon a proposal to amend the
Company's Articles of Incorporation. The proposed amendment
would increase the authorized Common Stock of the Company from
40,000,000 shares, par value $0.01 per share, to 100,000,000
shares of Common Stock, $0.01 par value per share.
3. To consider and vote upon a proposal to amend the
Articles of Incorporation to authorize ten million shares of
Preferred Stock, $0.01 par value per share, for possible issuance
from time-to-time and in such series and upon such terms as shall
be determined by the Board of Directors.
4. Ratification of the appointment of Williams & Webster,
Certified Public Accountants, to audit the financial statements
of the Company for the year ending December 31, 1997; and,
5. To act upon such other matters as may properly come
before the meeting and any adjournment thereof.
Only Shareholders of record at the close of business on
April 3, 1997, will be entitled to notice of and to vote at the
Annual Meeting.
By Order of the Board of Directors
Robert Jorgensen
Vice President
Spokane, Washington
May 7, 1997
YOUR VOTE IS IMPORTANT
Please complete, date, sign and return
the enclosed proxy immediately.
<PAGE> 4
ROYAL SILVER MINES, INC.
10220 North Nevada
Suite 270
Spokane, Washington 99218
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON May 29, 1997
AT 1:30 p.m. P.D.T.
INTRODUCTION
These Proxy materials are furnished in connection with the
solicitation by the Board of Directors of ROYAL SILVER MINES,
INC., a Utah corporation (the "Company"), for use at its Annual
Meeting of Shareholders to be held on May 29, 1997, at 1:30 p.m.,
P.D.T., at the Cavanaugh's Inn at the Park, 303 West North River
Drive, Ballroom D, Spokane, Washington (the "Annual Meeting"),
and any adjournment thereof. Only Shareholders of record, as of
the close of business on April 3, 1997 will be entitled to vote
at the meeting or any adjournment thereof. This Proxy Statement
and form of Proxy are being sent to Shareholders on or about May
7, 1997.
PURPOSES OF ANNUAL MEETING
At the Annual Meeting, Shareholders entitled to vote will be
asked to consider and take action to increase the authorized
shares of Common Stock of the Company; elect six (6) directors to
succeed those whose terms have expired; amend the Article of
Incorporation to increase the authorized Common Stock of the
Company; amend the Articles of Incorporation to create a class of
Preferred Stock; and ratify the appointment of Williams &
Webster, Certified Public Accountants, as independent auditors to
make an examination of financial statements of the Company for
the fiscal year ending December 31, 1997; and, such other
business as may come before the meeting. See "Voting at the
Annual Meeting of Shareholders."
SOLICITATION OF PROXIES
These proxy materials are furnished in connection with the
solicitation of proxies by the Board of Directors and management
of the Company to be used at the Annual Meeting of Shareholders
and at any adjournment or adjournments thereof. Properly
executed proxies received prior to the meeting will be voted at
the meeting. If a Shareholder specifies how the proxy is to be
voted on any business to come before the meeting, it will be
voted in accordance with such specifications. If no
specification is made, it will be voted in accordance with the
recommendations of the Board of Directors and management which
are FOR the election of the directors named in the Proxy
Statement; FOR the increase in authorized shares of Common Stock
<PAGE> 5
of the Company; FOR the authorization of a class of
Preferred Stock; and, FOR ratification of the appointment of
Williams & Webster as the Company's principal independent public
accountants for 1997. The proxy may be revoked by you at any
time before it is voted at the meeting.
This Proxy Statement and accompanying form of proxy are
first being sent or given to Shareholders on or about May 7,
1997.
Shareholders of record at the close of business on April 3,
1997 are entitled to notice of and to vote at the meeting. On
April 3, 1997 there were outstanding and entitled to vote
13,384,232 shares of Common Stock (each of which is entitled to
one vote). A majority of the votes cast by the holders of Common
Stock is required to increase the authorized shares of Common
Stock of the Company, for the election of directors and a
majority of the votes cast by such holders is required for
ratification of the appointment of the principal independent
public accountants.
REVOCATION OF PROXIES
Any Shareholder has the power to revoke his or her proxy at
any time, insofar as it has not been exercised, by the written
notice of a subsequently dated proxy, received by the Company
prior to or at the Annual Meeting or by oral revocation given by
the Shareholder in person at the Annual Meeting or any
adjournment thereof.
PROXY COMMITTEE
Management of the Company has appointed a Proxy Committee
consisting of Howard Crosby and Thomas Henricksen in whose names
the proxies are solicited on behalf of the Company.
VOTING AT THE ANNUAL MEETING OF SHAREHOLDERS
The Board of Directors of the Company has fixed the close of
business on the 3rd day of April, 1997, as the record date for
determination of the Shareholders entitled to notice of, and to
vote at, the Annual Meeting (the "Record Date"). As of the
Record Date, there were issued and outstanding, Thirteen Million,
Three Hundred Eighty-four Thousand, Two Hundred Thirty-two
(13,384,232) shares of Common Stock entitled to vote. A majority
of such shares will constitute a quorum for the transactions of
business at the Annual Meeting. The holders of record on the
Record Date of the shares entitled to be voted at the Annual
Meeting are entitled to cast one vote per share on each matter
submitted to vote at the Annual Meeting.
<PAGE> 6
IMPORTANT
Whether or not you plan to attend the Annual Meeting of
Shareholders, please complete, sign and date the accompanying
proxy and mail it at once in the enclosed envelope, which
requires no additional postage if mailed in the United States.
Your proxy will be revocable, either in writing or by voting in
person at the Annual Meeting, at any time prior to its exercise.
INFORMATION CONCERNING VOTING
As of the close of business on April 3, 1997, the Company
has authorized Forty Million (40,000,000) shares of one class of
Common Stock and it has issued and outstanding Thirteen Million,
Three Hundred Eighty-four Thousand, Two Hundred Thirty-two
(13,384,232) shares of one class of Common Stock. Only holders
of record of the Company's Common Stock at the close of business
on April 3, 1997 are entitled to notice and to vote on matters
which come before the Annual Meeting or any adjournment thereof.
On all matters requiring a shareholder vote, each shareholder is
entitled to one vote in person or by proxy at the Annual Meeting
for each share of Common Stock of the Company recorded in his/her
name. Proposals Nos. 1 and 4 will be decided by a majority vote
of those shares voting and Proposals 2 and 3 will decided upon by
a majority vote of the total outstanding shares eligible to vote.
PROPOSAL 1
ELECTION OF DIRECTORS
Six directors are to be elected to hold office until the
next Annual Meeting of Shareholders and until their successors
have been duly elected and qualified. If the proxy is executed
in such manner as not to withhold authority for the election of
any or all of the nominees for directors, then the persons named
in the proxy will vote the shares represented by the proxy for
the election of the following six nominees. If the proxy
indicates that the stockholder wishes to withhold a vote from one
or more nominees for directors, such instructions will be
followed by the persons named in the proxy. Four of the nominees
are now members of the Board of Directors and were elected by the
Shareholders at the last annual shareholders meeting and two
(Messrs. Henricksen and Stulp) were appointed by the Board of
Directors to fill vacancies created by resignations of former
Board members. Management has no reason to believe that any of
the nominees will not serve. In the event that any nominee
should not be available, and if the Board has designated a
substitute nominee, the persons named in the proxy will vote for
the substitute nominee designated by the Board of Directors.
<PAGE> 7
Meetings and Committees of the Board
During the year ended December 31, 1996, the Board
unanimously adopted resolutions on five occasions, pursuant to
applicable Utah law. The action taken by the Board on the one
occasion was without a meeting.
Currently, the Company does not have any Committees of the
Board of Directors.
NOMINEES
Howard M. Crosby
Since February 1994, Mr. Crosby is the President and a
member of the Board of Directors. Since 1989, Mr. Crosby has
been president of Crosby Enterprises, Inc., a family-owned
business advisory and public relations firm. From September 1992
to May 1993, Mr. Crosby was employed by Digitran Systems, Inc.,
of Logan, Utah, in the marketing department. In May of 1993, Mr.
Crosby entered into a business consulting relationship with
Centurion Mines Corporation, and has served as president and
director of Mammoth Mining Company and Gold Chain Mining Company,
both Centurion subsidiaries. In July, 1992, Mr. Crosby filed a
Chapter 13 petition for bankruptcy. The reorganization plan was
approved in October 1992. Mr. Crosby received a B.A. degree from
the University of Idaho in 1974.
Robert E. Jorgensen
Since August 1995, Mr. Jorgensen has been the Executive Vice
President, Treasurer and a member of the Board of Directors of
the Company. Mr. Jorgensen has served as vice-president,
secretary and director of Celebration Mining Company, a Nevada
public company. From 1987 to 1991, Mr. Jorgensen was an
investment broker and owner of RCL Northwest, Inc., a regional
investment firm. Mr. Jorgensen was a broker with Cohig &
Associates, Inc., from January 1992 to May 1992. In May 1992,
Mr. Jorgensen retired from the brokerage business and has since
been a private investor. Mr. Jorgensen filed for protection
under Chapter 7 of the Bankruptcy Code in August 1992. Mr.
Jorgensen received a degree in Business Administration from the
University of Idaho.
Thomas Henricksen
Since February 5, 1997, has been the Secretary and a member
of the Board of Directors of the Company. Mr. Henricksen is a
professional geologist who is currently working as an independent
consulting geologist specializing in precious and base metal
exploration projects in North and South America. From 1991 to
July 1996, Mr. Henricksen was regional manager for Kennecott
<PAGE> 8
Exploration, where he was responsible for overseeing all
exploration activities in Alaska and the Pacific Northwest.
Prior to working for Kennecott, Mr. Henricksen was senior
geologist for U.S. Borax from 1977 to 1991. Mr. Henricksen holds
a Ph.D. in economic geology from Oregon State University and a
B.S. degree in geology from the University of Wisconsin-Oshkosh.
Ronald Kitching
Since August 1995, Mr. Kitching has been a member of the
Board of Directors of the Company. Prior to his retirement five
years ago, Mr. Kitching was involved in the mining industry for
over 35 years holding various positions, including serving as
president of Overland Drilling Company, an Australian exploration
drilling company, and as co-founder of Glindeman-Kitching
Enterprises, an exploration drilling company. Mr. Kitching has
served as a director for Celebration Mining Company since May
1994.
John Ryan - Vice President of Corporate Development
Since September 1996, Mr. Ryan has been Vice President of
Corporate Development. Mr. Ryan is a professional mining
engineer. Mr. Ryan has served as a consultant in mine
engineering services, and will continue in these activities
during his tenure, as well as, engage in other matters in
accordance with the direction and assignment of the Board of
Directors. In addition to his professional degree in Mining
Engineering, which he received from the University of Idaho, Mr.
Ryan also holds a Juris Doctorate (J.D.) law degree from the
Boston College School of Law.
Kevin Stulp
Mr. Stulp was appointed to the Board of Directors of the
Company to fill the vacancy created by the resignation of Hal
Cameron. Since August 1995, Mr. Stulp has been an independent
consultant in the fields of volume electronics and manufacturing,
general business consulting, business strategy, business use of
the Internet, automation and integration through computers, and
financial analysis. From July 1994 to July 1995, Mr. Stulp was
Director of Manufacturing Reengineering for Compaq Computer
Corporation, Houston, Texas. From September 1992 to June 1994,
Mr. Stulp was Director of Manufacturing for Compaq Computer
Corporation. From September 1986 to September 1992, Mr. Stulp
was PCA Operations Manager for Compaq Computer Corporation. From
December 1983 to September 1986, Mr. Stulp held various positions
with Compaq Computer Corporation, including industrial engineer,
new products planner and manufacturing manager. From July 1980
to December 1983, Mr. Stulp was a financial planner with Texas
<PAGE> 9
Instruments, Houston, Texas. Mr. Stulp holds the degree of
Masters in Business Administration and the degree of Bachelor of
Science Mechanical Engineering, both from the University of
Michigan, and the degree of Bachelor of Science from Calvin
College, Grand Rapids, Michigan.
EXECUTIVE COMPENSATION
It is the Board's responsibility to review and set
compensation levels of the executive officers of the Company,
evaluate the performance of management and consider management
appointments and related matters. All decisions are decisions of
the full Board. The Board considers the performance of the
Company and how compensation paid by the Company compares to
compensation generally in the mining industry and among similar
companies. In establishing executive compensation, the Board
bases its decisions, in part, on achievement and performance
regarding broad-based objectives and targets relating to the
continued acquisition of favorable silver properties and the
progress of exploration and development of such properties, as
well as the Company's financial performance.
For Fiscal 1996, the Company's executive compensation policy
consisted of two elements: base salary and stock awards. The
policy factors which determine the setting of these compensation
elements are largely aimed at attracting and retaining executives
considered essential to the Company's long-term success. The
granting of stock is designed as an incentive for executives to
keep management's interests in close alignment with the interests
of shareholders. The Company's executive compensation policy
seeks to engender committed leadership to favorably posture the
Company for continued growth, stability and strength of
shareholder equity.
The table below sets forth all cash and cash equivalent
remuneration paid by the Company and its subsidiaries during the
year ended December 31, 1996 to each of the Company's executive
officers and to all executive officers of the Company as a group:
Name and Title Cash Compensation
Howard Crosby, President $78,000 yearly
Robert Jorgensen, Executive $72,000 yearly
Vice President and Treasurer
Jerry Stacey, Vice $70,000 yearly
President of Operations
John Ryan, Vice $48,000 yearly
President of Corporate
Development
<PAGE> 10
In addition to the foregoing, each officer received 2,500
shares per quarter.
These amounts were approved by the Board in recognition of
the work and efforts and in completing the acquisition of a large
number of silver mining properties prior to the end of Fiscal
1996.
The Company anticipates paying the same cash and cash
equivalent remuneration to the foregoing executive officers in
the 1997.
Further, the Board recognized the significant role of these
individuals in managing the Company's principal office in
Spokane, Washington and in raising funds for the Company's
exploration and development activities. Finally, the Board of
Directors took into account the reasonableness of these salaries
in comparison with Executive salaries within the mining region.
On the basis of the above factors, the Board determined that
these salaries were proper and fitting. No other officers
received a salary during Fiscal 1996.
The Board believes that executive compensation during Fiscal
1996 substantially reflects the Company's compensation policy.
Compensation of Directors
Directors of the Company are reimbursed for travel expenses
incurred in serving on the Board of Directors. Directors who are
not executive officers of the Company receive $150 a month for
their services. An additional $50 per meeting is paid when the
Company holds more than two Board meetings during any calendar
month.
Members of the Board of Directors also receive 2,500 shares
of common stock for serving as such. In the event that a member
of the Board of Directors is also an executive officer, he
receives a total of 5,000 shares per quarter.
STOCK OPTION PLANS
The Company's Employee Incentive Stock Option Plan (the
"Plan") was adopted by the Board of Directors on January 10,
1992. The purpose of the Plan is to attract and retain qualified
personnel. The Plan provides that the aggregate fair market
value of the shares of Common Stock for which any participant may
be granted incentive stock options in any calendar year shall not
exceed $100,000 plus any "unused limited carryover" as determined
under Section 422A(c) of the Internal Revenue Code of 1954, as
amended.
<PAGE> 11
On January 8, 1997, the Company filed a Form S-8
Registration Statement with the Commission registering 831,775
shares of Common Stock for resale by certain shareholders of the
Company.
The Plan is administered by the Board of Directors of the
Company who determine, subject to the provisions of the Plan, to
whom options are granted and the number of shares of the Common
Stock subject to option. The exercise price of such options
granted under the Plan must at least equal 100% of the fair
market value of the Common Stock on the date the option is
granted.
The Plan also provides that no option shall be exercisable
more than three months after termination of an optionee's
employment with the Company unless such termination of employment
occurs by reason of death or permanent and total disability. In
the event of the death or disability of a recipient of options
while an employee of the Company, the options which were
otherwise exercisable by the optionee or his legal representative
or beneficiary of his estate at any time prior to the expiration
of one year from the date of his death or disability. In no
event, however, shall an option be exercisable after 10 years
from the date it was granted.
PERFORMANCE GRAPH
The graph below compares the cumulative total return to
shareholders of Common Stock of the Company from June 16, 1993
through December 31, 1996, to cumulative total return of the S &
P Metals Mining Index and the Russell 2000 Index for the same
period of time. The Company does not believe any other published
industry or line-of-business index adequately represents the
current operations of the Company or that it can identify a peer
group that merits comparison. The graph assumes $100 is invested
in the Company's stock, each of the two indexes at the closing
market quotations on June 16, 1993 and that dividends are
reinvested. The performances shown on the graph are not
necessarily indicative of future price performance.
<TABLE>
<CAPTION>
Royal S & P
Measurement Period Silver Russell Metals
(Fiscal year covered) Mines 2000 Mining
<S> <C> <C> <C>
6/16/93 100 100 100
1993 100 112 113
1994 1,200 110 132
1995 972 141 146
1996 300 165 149
</TABLE>
<PAGE> 12
For the directors to be elected, Proposal No. 1, requires
that a majority of the votes be cast in favor of the each
director.
The Board of Directors recommends the vote FOR Proposal No.
1, the election of Howard M. Crosby, Robert E. Jorgensen, Thomas
Henricksen, Ronald Kitching, John Ryan and Kevin Stulp.
PROPOSAL 2
PROPOSED AMENDMENT TO THE COMPANY'S ARTICLES OF
INCORPORATION TO INCREASE AUTHORIZED COMMON STOCK OF
THE COMPANY FROM 40,000,000 SHARES $0.01 PAR VALUE PER SHARE
TO 100,000,000 SHARES, $0.01 PAR VALUE PER SHARE
The Board of Directors of the Company, unanimously approved
and recommends to the shareholders that they consider and approve
a proposed amendment to Article IV of the Company's Articles of
Incorporation which would increase the Company's authorized
shares from 40,000,000 shares of Common Stock, par value $0.01
per share to 100,000,000 shares of Common Stock, par value $0.01
per share. The proposed amendment would revise the Company's
Certificate of Incorporation to read as follows:
The total number of shares of Common Stock which
the Corporation shall have authority to issue is One
Hundred Million (100,000,000) shares of Common Stock,
par value $0.01 per share.
The Board of Directors recommends a vote "FOR" this
proposal.
The Board of Directors believes that the increase in the
number of authorized shares will benefit the Company by improving
its flexibility to consider and respond to future business
opportunities and needs. The additional authorized shares will
be available for issuance from time to time in connection with
possible financings, the acquisitions of other mining properties,
or the Company's incentive stock option plan. Authorized shares
may be issued from time to time without action by the Company's
stockholders to such persons and for such consideration and on
such terms as the Board of Directors determines. The Company has
no current plans to issue shares for any purpose.
An affirmative vote by the holders of a majority of the
outstanding shares of Common Stock entitled to vote at the
meeting is required for the adoption of this proposal to amend
the Certificate of Incorporation.
The Board of Directors recommends a vote "FOR" the amendment
to the Articles of Incorporation to increase the authorized
Common Stock.
<PAGE> 13
PROPOSAL 3
PROPOSED AMENDMENT TO THE COMPANY'S ARTICLES OF
INCORPORATION TO AUTHORIZE A CLASS OF PREFERRED STOCK
The Board of Directors of the Company has voted to propose
and recommends that shareholders vote to amend Article IV of the
Articles of Incorporation. This amendment would authorize for
issuance a new class of capital stock consisting of 10,000,000
shares of Preferred Stock, $0.01 par value, (the "Preferred
Stock") which would have such voting powers, designations,
preferences, and relative participating, optional, conversion or
other special rights, and such qualifications, limitations or
restrictions as the Board of Directors may designate for each
series thereof issued from time to time.
There are no shares of Preferred Stock of the Company
currently authorized. The proposed amendment would authorize the
Board of Directors to issue Preferred Stock, from time to time,
in one or more series, with such designation, voting powers,
preferences, and relative, participating, optional, conversion or
other special rights, and such qualifications, limitations and
restrictions, as the Board of Directors may determine. These
would include, but not be limited to, (a) the distinctive
designation of each series and the number of shares that will
constitute such series; (b) the dividend rate for such series;
(c) the price at which, and the terms and conditions on which,
the shares os such series may be redeemed, if such shares are
redeemable; (d) the purchase or sinking fund provisions, if any,
for the purchase or redemption of shares of such series; (e) any
preferential amount payable upon each share of such series in the
event of the liquidation, dissolution or winding up of the
Company; (f) the voting rights, if any, of shares of such series;
(g) the terms and conditions, if any, upon which shares of such
series may be converted into shares of other classes or series of
shares of the Company's Capital Stock, or securities issued by
other issuers; and, (h) the relative rights of priority of each
series as to dividends and assets. For the reasons discussed
below, the Board of Directors recommends a vote "FOR this
proposal.
The above summary description of the proposed amendment to
Article IV of the Company's Articles of Incorporation is
qualified in its entirety by reference to the complete text of
Article VI of the Articles of Incorporation contained in Exhibit
A hereto.
<PAGE> 14
The Board of Directors believes that the proposed
authorization of Preferred Stock is desirable to enhance the
Company's flexibility in connection with possible future actions,
such as stock splits, stock dividends, financings, corporate
mergers, acquisitions or properties or businesses, use in
employee benefit plans or other corporate purposes. Having such
authorized shares available for issuance in the future would
allow shares of either Preferred Stock to be issued without the
expense and delay of a special shareholders' meeting. The shares
of Preferred Stock would be available for issuance without
further action by the shareholders.
The Board of Directors recommends a vote "FOR" this
proposal.
The Board of Directors believes that the authorization of a
class of Preferred Stock will benefit the Company by improving
its flexibility to consider and respond to future business
opportunities and needs. The Preferred Stock will be available
for issuance from time-to-time in connection with possible
financings or the acquisitions of other mining properties. The
Preferred Stock may be issued from time-to-time without action by
the Company's stockholders to such persons and for such
consideration and on such terms as the Board of Directors
determines. The Company has no current plans to issue shares for
any purpose.
An affirmative vote by the holders of a majority of the
outstanding shares of Common Stock entitled to vote at the
meeting is required for the adoption of this proposal to amend
the Certificate of Incorporation.
The Board of Directors recommends a vote "FOR" the amendment
to the Articles of Incorporation to create a class of Preferred
Stock.
PROPOSAL 4
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has to examine the consolidated
financial statements of the Company for the current year ending
December 31, 1997 and to perform other appropriate accounting
services. Williams and Webster, P.S. have performed auditing and
accounting services for the Company since 1996.
A proposal will be presented at the meeting to ratify the
appointment of Williams & Webster, P.S., as the Company's
independent public accountants. One or more members of that firm
are expected to be present at the Annual Meeting to respond to
questions and to make a statement if they desire to do so. If
<PAGE> 15
stockholders do not ratify this appointment by the affirmative
vote of the shares present in person or represented by proxy at
the meeting, other independent public accountants will be
considered by the Board of Directors.
Proposal 4, the ratification of the appointment of
independent auditors, requires that a majority of the votes cast
must be in favor of the proposal.
The Board of Directors recommends a vote "FOR" ratification
of the appointment of Williams & Webster, P.S., as the Company's
independent public accountants.
OTHER MATTERS
Management knows of no other matters to be brought before
the Annual Meeting, but if other matters come before the meeting,
it is the intention of the persons named in the accompanying
proxy to take such action as in their judgment is in the best
interest of the Company and Shareholders.
The Annual Report of the Company for the year ended December
31, 1996, including financial statements, is enclosed herewith.
Regardless of the number of shares you hold, it is important
that your stock be represented at the meeting in order that the
presence of a quorum can be secured. If you are unable to attend
the meeting, you are urged to date and sign your proxy and return
it without delay in the enclosed addressed envelope. The shares
represented by each proxy so signed and returned will be voted in
accordance with the Shareholder's directions.
By Order of the Board of Directors
Robert Jorgensen
Vice President
May 7, 1997
<PAGE> 1
P R O X Y
FOR THE ANNUAL MEETING
OF SHAREHOLDERS OF
ROYAL SILVER MINES, INC.
KNOW ALL MEN BY THESE PRESENTS: That the undersigned hereby
constitutes and appoints Howard Crosby and Thomas Henricksen with the
power of substitution, attorneys and proxies to appear and vote at the
Annual Meeting of Shareholders of Royal Silver Mines, Inc. to be held
at Cavanaugh's Inn at the Park, 303 West North River Drive, Ballroom D,
Spokane, Washington on May 29, 1997, at 1:30 p.m., P.D.T., and at any
adjournments thereof, with all the powers the undersigned would possess
if personally present, including authority to vote on the matters shown
below in the manner directed and upon any other matter which may
properly come before the meeting.
This proxy is solicited on behalf of the Board of Directors of
Royal Silver Mines, Inc. Except as specified to the contrary below,
the shares represented by this proxy will be voted for Proposals 1, 2,
3 and 4. The undersigned hereby revokes any proxy previously given to
vote such shares at the meeting or at any adjournment.
PLEASE MARK THE FOLLOWING WITH AN "X."
1. [ ] ELECTION OF DIRECTORS [ ] WITHHOLD AUTHORITY
FOR all nominees listed to vote for all
below (except as marked nominees listed below
to the contrary below)
(INSTRUCTION: To withhold authority to vote for any
individual nominee strike a line through the nominee's
name in the list below.)
Howard M. Crosby
Robert E. Jorgensen
Thomas Henricksen
Ronald Kitching
John Ryan
Kevin Stulp
2. Amend the Company's Articles of Incorporation. The amendment will
increase the authorized Common Stock of the Company from
40,000,000 shares, $0.01 par value per share, to 100,000,000
shares, $0.01 par value per share.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Amend the Company's Articles of Incorporation. The amendment will
create a class of Preferred Stock.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE> 2
4. Ratification of the appointment of Williams & Webster, P.S., as
the Company's independent public accountants for the fiscal year
ending December 31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PLEASE VOTE, DATE AND SIGN YOUR NAME(S) EXACTLY AS PRINTED ON
THIS PROXY, indicating, where applicable, official position or
representative capacity.
_______________________________________
Signature
_______________________________________
(Additional signature(s) if held jointly)
DATE: ______________________
PLEASE RETURN THIS PROXY IN THE POSTAGE PAID
SELF ADDRESSED ENVELOPE ENCLOSED.
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