SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
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permitted by Rule 14a-6(e)(2))
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Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
GOLDEN CYCLE GOLD CORPORATION
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GOLDEN CYCLE GOLD CORPORATION
2340 Robinson Street
Colorado Springs, Colorado 80904
________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
June 17, 1999
_________________________
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders
("Annual Meeting") of GOLDEN CYCLE GOLD CORPORATION (the "Corporation"), a
Colorado corporation, will be held at the Sheraton Colorado Springs Hotel,
Colorado Springs, Colorado, on June 17, 1999, at 9:00 a.m. (local time) for
the following purposes:
1. To elect five (5) directors of the Corporation to serve until the
next Annual Meeting of Shareholders and until their successors are duly
elected and qualified;
2. To appoint KPMG, LLP independent auditors to audit the books and
records of the Corporation at the close of the current year; and
3. To transact such other business as may properly come before the
meeting, or any adjournment thereof,
all as more fully set forth in the accompanying Proxy Statement.
The Board of Directors has fixed the close of business on April 29,
1999 as the record date for the determination of shareholders entitled to
notice of and to vote at the Annual Meeting or any adjournment thereof, and
only shareholders of record at the close of business on that date are
entitled to notice of and to vote at the Annual Meeting. The books for
transfer of shares of the Corporation will not be closed.
A copy of the Company's Annual Report for the fiscal year ended
December 31, 1998 is enclosed herewith.
IF YOU DO NOT EXPECT TO BE PRESENT AT THE MEETING, PLEASE MARK, SIGN,
DATE, AND RETURN THE ENCLOSED PROXY.
By Order of the
Board of Directors,
Brandy J.
Underwood
Secretary
April 30, 1999
________________________
GOLDEN CYCLE GOLD CORPORATION
2340 Robinson Street
Colorado Springs, Colorado 80904
__________________________
PROXY STATEMENT
__________________________
ANNUAL MEETING OF SHAREHOLDERS
June 17, 1999
This proxy statement and the accompanying form of proxy are being
mailed
on or about April 30, 1999 to the holders of record on April 29, 1999 of the
Corporation's Common Stock, without par value (the "Common Stock"), in
connection with the solicitation of proxies by the Board of Directors of the
Corporation for use at the Annual Meeting to be held for the purposes set
forth in the foregoing Notice of Annual Meeting of Shareholders, or any
adjournment thereof.
Shares of Common Stock represented by properly executed proxies, if
returned in time and not revoked, will be voted in accordance with instructions
contained in the proxy. If no instructions are given with respect to any
matter specified in the Notice of Annual Meeting to be acted upon at the
Annual Meeting, the proxy will be voted for the election of the nominees for
election to the Board of Directors (Proposal No. 1) and for the appointment
of the independent auditors (Proposal No. 2). The Board of Directors is not
aware of any other matters intended to be presented for action at the Annual
Meeting. If any other matters are properly presented for action at the
Annual Meeting, or if other circumstances not now known make any of the
nominees for election to the Board of Directors unable to serve, it is the
intention of the persons named in the proxy to vote on such matters or for
such other nominees, as the case may be, in their best judgment.
A shareholder who has given a proxy has the power to revoke it by
giving
written notice of such revocation to the Corporation's Secretary at any time
prior to the exercise of the proxy, or by requesting the return of the proxy
at the Annual Meeting. A shareholder's presence at the Annual Meeting,
without such written notice of revocation or request for return of the proxy,
will not cause the proxy to be revoked. Any later dated proxy will revoke a
proxy submitted earlier. SHAREHOLDERS WHO DO NOT INTEND TO BE PRESENT AT
THE ANNUAL MEETING ARE URGED TO CONSIDER CAREFULLY THE INFORMATION IN THIS
PROXY STATEMENT AND TO MARK, SIGN, DATE AND RETURN THEIR PROXIES AS SOON AS
POSSIBLE. PROMPT RESPONSE IS HELPFUL.
The cost of solicitation of proxies will be paid by the Corporation.
In
addition to solicitation of proxies by use of the mails, certain of the
officers, directors and employees of the Corporation, without extra
remuneration, may solicit proxies personally or by other communication
facilities. Arrangements have been made with brokerage houses and other
custodians, nominees and fiduciaries which are record holders of the
Corporation's Common Stock to forward proxy materials and annual reports to
beneficial owners of such stock, and the Corporation will reimburse such
record holders for their reasonable expenses incurred in providing such
services.
Pursuant to the Corporation's By-Laws, the Board of Directors has fixed
the close of business on April 29, 1999 as the record date for determining
the shareholders entitled to notice of and to vote at the Annual Meeting (the
"Record Date"). As of the Record Date, there were outstanding 1,878,450
shares of Common Stock. The presence in person or by proxy of the holders of
a majority of the outstanding shares is necessary for a quorum. Each share
of Common Stock entitles the holder thereof to one vote. Election of
directors is by plurality vote, with the five nominees receiving the highest
vote totals to be elected as directors. Proposal No. 2 requires the
affirmative vote of a majority of the shares present in person or represented
by proxy at the Annual Meeting. Abstentions are counted as present in
determining whether the quorum requirement is satisfied, but they have no
other effect on voting for election of directors. Abstentions are the same
as a vote against on other matters. In instances where brokers are
prohibited from exercising discretionary authority for beneficial owners who
have not returned a proxy ("broker non-votes"), those shares will be counted
for quorum purposes; however, broker non-votes will not be included in the
vote totals for any proposal and therefore will have no effect on the vote
for any proposal (including the election of directors).
The Annual Report of the Corporation for the year ended December 31,
1998 is enclosed herewith.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information as to each person who, to
the
knowledge of the Board of Directors, was the beneficial owner of more than
five (5%) of the Corporation's Common Stock outstanding as of April 29, 1999.
Name and Address Number of Shares
P
ercent
of Beneficial Owner Beneficially Owned(1) of Class
__________________ _____________________ _______
American Diversified 361,033
19.
2%
Enterprise, Inc. ("ADE")
c/o Holtzmann, Wise & Shepard
1271 Avenue of the Americas,
45th Floor
New York, New York 10020
MIDAS Fund, Inc. 328,900 (2)
17.5
%
11 Hanover Square
New York, NY 10005
Taki N. Anagnoston, M.D. 98,443 (3) 5.2%
700 R. West 6th Street
Gilroy, California 95020
________________________________________________________________________
(1) To the best knowledge of the Corporation, except as indicated below,
each beneficial owner has sole voting and investment power in respect of such
shares.
(2) Does not include an additional 70,500 shares owned by Bull & Bear Gold
Investors, Ltd., a registered investment company whose investment advisor is
owned by Bull & Bear Group, Inc., which is also the parent company of the
investment advisor of Midas Fund, Inc. The information provided here is based
on a report on Schedule 13D dated March 25, 1999.
(3) The indicated number of shares includes 69,416 shares held by a revocable
retirement trust for the benefit of Dr. Anagnoston and of which Dr.
Anagnoston is trustee, 13,850 shares held by a revocable trust for the
benefit of Dr. Anagnoston's wife, of which he and his wife are trustees,
1,400 shares beneficially owned by Dr. Anagnoston's wife and 13,777 shares
held by a partnership, of which Dr. Anagnoston and his wife are general
partners.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Presently there are eight directors, however three directors are not
standing for re-election. Pursuant to the By-Laws of the Corporation, the
Board of Directors has fixed the number of Directors at five on and after the
date of this annual meeting. The entire Board of Directors is to be elected
at each annual meeting of shareholders, and each Director is elected to serve
until the next succeeding annual meeting and until his successor is elected
and qualifies. The Board of Directors met six times during 1998. Each
director attended 75% or more of the total meetings of the Board and any
committee of which he is a member.
Management intends to nominate for election at the Annual Meeting the
individuals named in the following table, which sets forth certain information
with respect to each nominee. All of the nominees are currently Directors of
the Corporation and together comprise the entire Board of Directors.
Shares of Common Percent
Name of Nominee Stock
Beneficially of Class
Age (Year First Owned as of
Outstanding
Became Director) Principal Occupation (1) April 24, 1998(2) (3)
.
Orville E. Anderson Chairman of the Board of - -
Age 74 (1998) the Corporation since
April 1999; Managing Director
of Andore PTY Ltd., an Australian
gold mining exploration company,
1988 to 1993; Director, President
and Chief Operating Officer of Mother
Lode Gold Mines Consolidated, a gold
mining exploration and development
company; Director, President and
Chief Operating Officer of Pacific
Far East Minerals, Inc., a gold
mining exploration and development
company.
Melvin L. Cooper Private investor; Chairman of the 90,850(4) 4.8%
Age 71 (1983) Board of the Union Corporation, a
provider of accounts receivable
management and collection services,
through January 1998 and for more
than five years prior thereto.
Rex H. Hampton Chairman of the Board of the 39,002(5) 2.1%
Age 80 (1980) Corporation from May 18. 1989 to
July 31, 1993 and President and
Chief Executive Officer thereof from
August 16, 1980 to July 31, 1993;
President and Chief Executive Officer
of Golden Cycle Land Corporation, a
land development company and wholly-
owned subsidiary of ATE Enterprises
Inc. from August 16, 1980 to December
31, 1986; Manager, Golden Cycle Land
Division, ATE Enterprises Liquidating
Trust January 1, 1987 to March 31,
1991; Brigadier General U.S. Army (Ret.)
R. Herbert Hampton President and Chief Executive Officer 15,102(6) 0.8%
Age 52 (1999) of the Corporation since April 1999;
Vice President, Finance from August 1,
1993 to April 1999; Secretary Treasurer
of the Corporation from May 1994 to
April 1999; and an employee of the
Corporation since October 1, 1992. Mr.
Hampton served as a Lieutenant Colonel,
U.S. Army, for more than five years
prior to joining the Corporation.
Frank M. Orrell Chairman of the Board of Mother 33,500(7) 1.8%
Age 66 (1989) Lode Gold Mines Consolidated since
1978 and Chief Executive Officer
thereof since 1985; registered
representative with Orrell and
Company, Inc., a stock brokerage
firm, since 1984; Chairman of the
Board of Pacific Far East Minerals,
Inc. since July 1996.
________________________________________________________________________
(1) The occupation listed constitutes the principal occupation or employment
of the referenced individual for at least the past five (5) years, except as
otherwise indicated. Correspondence for nominees may be sent to the Company.
The address of the persons named in the chart above is c/o Golden Cycle Gold
Corporation, 2340 Robinson Street, Suite 201, Colorado Springs, Colorado 80904.
(2) Except as noted below, each beneficial owner has sole voting power and
sole investment power.
(3) Based on 1,878,450 shares of Common Stock issued and outstanding as of
April 29, 1999. Shares issuable within 60 days from the date of this Proxy
Statement upon exercise of options issued to each Director are treated as
outstanding for the purpose of computing the percentage ownership of such
Director.
(4) Includes 30,900 outstanding shares beneficially owned by Mr. Cooper and
registered in his name; 24,950 utstanding shares which are held in a trust of
which Mr. Cooper is the trustee and which is revocable by hm at his will and
35,000 shares issuable to Mr. Cooper upon exercise of options. Mr. Cooper
has sole power to vote and dispose of such shares.
(5) Includes 30,000 shares issuable to Mr. Hampton upon exercise of options.
(6) Includes 15,000 shares issuable to Mr. R. Herbert Hampton upon exercise
of options.
(7) Includes 500 outstanding shares beneficially owned by Mr. Orrell, 1,660
outstanding shares held by a revocable retirement trust for the benefit of
Mr. Orrell's wife and 35,000 shares issuable to Mr. Orrell upon exercise of
options.
As of April 29, 1999, the officers and directors of the Corporation as
a
group beneficially owned 256,854 shares of Common Stock or approximately
13.7% of such class. The number of shares of Common Stock owned by officers
and directors of the Corporation includes an aggregate of 180,000 shares of
Common Stock which the officers and directors have the right to acquire
within 60 days from the date of this Proxy Statement upon the exercise of
options, which shares are treated as outstanding for the purpose of computing
the percentage of outstanding shares of Common Stock owned by officers and
directors as a group.
Information Concerning Executive Officers
The Corporation's executive officers are R. Herbert Hampton, President,
Chief Executive Officer and Treasurer, and Brandy J. Underwood, Corporate
Secretary. Mr. R. Herbert Hampton is the son of Rex H. Hampton, a director
and former officer of the Corporation.
Committee of the Board of Directors
Pursuant to Paragraph 16 of the Corporation's By-Laws, the Board of
Directors has created an Audit Committee, comprised of Messrs. Rex H. Hampton
Sr. (Chairman) and Orrell, which is empowered to supervise the auditing of
the accounts of the Corporation. Its functions include reviewing the scope
of the audit and auditing fees, meeting with the auditors and the officers of
the Corporation to assure the adequacy of internal controls and reporting,
reviewing the financial statements of the Corporation and performing other
duties and functions deemed appropriate by the Board. The Audit Committee
met once during 1998.
The Board does not have a formal nominating committee or compensation
committee; rather, the Board of Directors performs this function.
Recommendation of the Board of Directors
The Board of Directors recommends a vote FOR election of the nominees
identified above as directors of the Corporation.
Executive Compensation
Summary Compensation Table
The following table sets forth information on the compensation earned
by
Mr. R. Herbert Hampton, the current Chief Executive Officer, and by Mr.
Worley, who served as Chief Executive Officer through April 28, 1999. Mr.
Hampton received this compensation for serving as Vice President, Finance,
Secretary and Treasurer of the Corporation. The Chief Executive Officer is
the highest paid officer of the Corporation:
Name and Annual Long Term
Principal Compensation Compensation All Other
Position Year Salary Bonus Option Awards Compensation
R. Herbert Hampton 1998 $63,000 $2,625 5,000 -
President, Chief
Executive Officer
and Treasurer
Birl W. Worley 1998 98,000 - 5,000 -
Former President 1997 90,000 5,000 -
and Chief 1996 87,500 22,830 (1) - -
Executive Officer
________________________
(1) During 1996, Mr. Worley was paid bonuses totaling $22,830.
Option Grants During Fiscal 1998
The following table sets forth information related to options granted to Mr.
Hampton and Mr. Worley during fiscal 1998.
Potential Realizable
Value at Assumed
% of Total Exercise Annual Rates of
Options or Stock Price
Granted Base Appreciation for
Options to Employees Price Expiration Option Term (2)
Name Granted (1) Fiscal Year ($/sh) Date 5% 10%
__________ _______ ___________ ______ ________ _______ _______
R. Herbert 5,000 50% $7.75 6/4/08 $24,370 $61,758
Hampton
Birl W.
Worley Jr. 5,000 50% 7.75 6/4/08 $24,370 $61,758
________________________
(1) Option granted under the 1997 Officers' and Directors' Stock Option
Plan. The exercise price of the option was equal to the fair market value of
a share of Common Stock on the date of grant and may be paid in cash or with
shares of the Common Stock owned by the optionee. The option is exercisable
for a period of ten years from the date of grant unless the optionee resigns,
retires or dies, in which case the right to exercise the option is limited.
(2) The values set forth in this column represent the gain which would be
realized by the optionee assuming (i) the option is exercised on its
expiration date, and (ii) the value of a share of Common Stock has increased
annually by a rate of 5% and 10%, respectively, during the term of the
option. These growth rates are prescribed by the rules of the Securities and
Exchange Commission and are not intended to forecast possible future
appreciation for the Corporation's Common Stock.
Aggregate Option Exercises in Fiscal 1998 and Fiscal
Year-End Option Values
The following table sets forth certain information with respect to stock
options exercised by Mr. Worley in the last fiscal year and the value of
options held by Mr. Worley and Mr. Hampton at fiscal year end.
Number of
Securities Value of
Underlying
Unexercised
Unexercised In-the-Money
Shares Acquired Value Options at Option
s at
Name On Exercise Realized($) FY-End (#) FY-End ($)(1)
Birl W. Worley Jr. 3,400 $9,775 33,000 $11,625
R. Herbert Hampton - - 15,000 625
__________________
(1) Mr. Hampton and Mr. Worley hold options entitling them to purchase
33,000 shares and 15,000 shares, respectively, of the Corporation's Common
Stock at exercise prices which are less than $6.875 per share (the fair
market value of a share of the Corporation's Common Stock on December 31,
1998). The values set forth above are calculated based on the aggregate
amount of the excess of $6.875 over the relevant exercise prices of these
options.
Compensation of Directors
The compensation payable to directors is established periodically by
the
Board. During 1998, each non-management director was paid a fee in the
amount of $3,000 per meeting attended. For 1999, each non- management
member of the Board will be paid a fee of $3,000 for each meeting attended.
Directors are also entitled to reimbursement of expenses incurred in
connection with such attendance. Members of the Audit Committee are entitled
to a fee of $750 for each formal committee meeting, not to exceed $1,500 per
annum.
Under the terms of the 1997 Officers' and Directors' Stock Option Plan,
on June 4th of each year, each director and executive officer of the
Corporation will automatically receive an option to purchase 5,000 shares of
the Corporation's Common Stock at an exercise price equal to the fair market
value of such stock on such date, until such director or executive officer
has received options to purchase an aggregate of 25,000 shares of Common
Stock under such plan. To date, options to purchase 60,000 shares of the
Corporation's Common Stock have been granted under the plan.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Pursuant to Section 16(a) of the Securities Exchange Act of 1934 and
the
rules issued thereunder, the Corporation's directors, executive officers and
10% shareholders are required to file with the Securities and Exchange
Commission and the Pacific Exchange reports of ownership and changes in
ownership of the Corporation's Common Stock. Copies of such forms are
required to be furnished to the Corporation. Based solely on its review of
the copies of such reports, or written representations that no reports were
required, the Corporation believes that during 1998, its directors, executive
officers and 10% shareholders complied with the Section 16(a) requirements
with the exception of certain stock transactions by Mr. Frank M. Orrell, a
Director of the Corporation.
PROPOSAL NO. 2
ELECTION OF INDEPENDENT AUDITORS
On November 19, 1998, the Board of Directors re-appointed KPMG, LLP
("KPMG") as independent auditors of the Corporation, subject to shareholders'
approval. It is intended that, in the absence of a contrary direction, votes
will be cast pursuant to the accompanying proxies for the appointment of KPMG
as independent auditors to audit the books and records of the Corporation at
the close of the current calendar year. Neither KPMG nor any of its partners
has any financial interest in or any connection (other than as independent
certified public accountants) with the Corporation. A representative of
KPMG is expected to be present at the Annual Meeting, and will have the
opportunity to make a statement and will respond to appropriate questions
from shareholders present at the meeting.
SHAREHOLDER PROPOSALS FOR 2000 ANNUAL MEETING OF SHAREHOLDERS
A Shareholder proposal to be presented at the 2000 Annual Meeting of
Shareholders must be received at the Corporation's office at 2340 Robinson
Street, Colorado Springs, Colorado 80904 no later than December 31, 1999 in
order to be included in the proxy materials for that meeting.
By Order of the
Board of Directors
Colorado Springs, Colorado Brandy J. Underwood
April 30, 1999 Secretary