SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant
Filed by a Party other than the Registrant
Check the appropriate box:
Preliminary Proxy Statement
Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
Definitive Proxy Statement
Definitive Additional Materials
Soliciting Material Under Rule 14a-12
CROWN RESOURCES CORPORATION
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
No fee required.
Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11
1) Title of each class of securities to which transaction
applies:
2) Aggregate number of securities to which transaction
applies:
3) Per unit price or other underlying value of transaction
pursuant to Exchange Act Rule 0-11:
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
Fee paid previously with preliminary materials.
Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the
filing for which the offsetting fee was paid previously.
Identify the previous filing by registration
statement number, or the Form or Schedule and the date of
its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
CROWN RESOURCES CORPORATION
Notice of Annual Meeting of Shareholders
To the Shareholders:
The Annual Meeting of the Shareholders of Crown Resources
Corporation will be held at the World Trade Center, 1625 Broadway,
Suite 820, Denver, Colorado, on Tuesday, June 26, 2001, at 10:00
a.m., Mountain Daylight Time, for the following purposes:
1. Election of Directors. To elect five Directors to
serve until the next Annual Meeting of Shareholders and until
their successors are elected and qualified.
2. Appointment of Auditors. To ratify the appointment
of Deloitte & Touche LLP as the Company's independent auditors
for fiscal year 2001.
3. Other Business. To transact such other business as
may properly come before the meeting and all adjournments
thereof.
The stock transfer books of the Company will not be closed.
The Board of Directors has fixed the close of business on April 30,
2001, as the record date for the determination of shareholders
entitled to notice of, and to vote at, the Annual Meeting. The
approximate date of the mailing of this Proxy Statement and the
enclosed form of proxy is May 1, 2001.
Your attention is directed to the accompanying Proxy
Statement. To constitute a quorum for the conduct of business at
the Annual Meeting, it is necessary that holders of a majority of
all outstanding shares entitled to vote at the meeting be present
in person or be represented by proxy. To assure representation at
the Annual Meeting, you are urged to date and sign the enclosed
proxy and return it promptly in the enclosed envelope.
By Order of the Board of
Directors
James R. Maronick
Secretary
April 30, 2001
Denver, Colorado
PROXY STATEMENT
Annual Meeting of Shareholders
This Proxy Statement is furnished in connection with the
solicitation by the Board of Directors of Crown Resources
Corporation, a Washington corporation ("Crown" or the "Company"),
of proxies in the accompanying form for use at the Annual Meeting
of Shareholders to be held on Tuesday, June 26, 2001, and any
adjournment or postponement of such meeting. The Annual Meeting
will be held at 10:00 a.m., Mountain Daylight Time, at The World
Trade Center, 1625 Broadway, Suite 820, Denver, Colorado.
The principal office of Crown is located at 1675 Broadway,
Suite 2400, Denver, Colorado, 80202.
Proxies are solicited so that each shareholder may have an
opportunity to vote. These proxies will enable shareholders to
vote on all matters that are scheduled to come before the meeting.
When proxies are returned properly executed, the shares represented
thereby will be voted in accordance with the shareholders'
directions. Shareholders are urged to specify their choices by
marking the appropriate boxes on the enclosed proxy card; if no
choice has been specified, the shares will be voted as recommended
by the Board of Directors of Crown (the "Board"). Means have been
provided whereby a shareholder may withhold his vote for any
Director. The proxy cards also confer discretionary authority to
vote the shares authorized to be voted thereby on any matter that
was not known on the date of the Proxy Statement but may properly
be presented for action at the meeting.
You are asked to sign, date, and return the accompanying proxy
card regardless of whether or not you plan to attend the meeting.
Any shareholder returning a proxy has the power to revoke it at any
time before shares represented by the proxy are voted at the
meeting. Any shares represented by an unrevoked proxy will be
voted unless the shareholder attends the meeting and votes in
person. A shareholder's right to revoke his or her proxy is not
limited by or subject to compliance with a specified formal
procedure, but written notice should be given to the Corporate
Secretary of Crown at or before the meeting.
The expense of printing and mailing proxy material will be
borne by Crown. In addition to the solicitation of proxies by
mail, solicitation may be made by certain Directors, officers, and
other employees of Crown in person or by telephone or other means
of electronic communication. No additional compensation will be
paid for such solicitation.
Arrangements will also be made with brokerage firms and other
custodians, nominees, and fiduciaries to forward proxy solicitation
material to certain beneficial owners of Crown's Common Stock and
Crown will reimburse such brokerage firms, custodians, nominees ,
fiduciaries for reasonable out-of-pocket expenses incurred by them
in connection therewith.
Shares Outstanding
The holders of Crown's $.01 par value Common Stock (the
"Common Stock"), at the close of business on April 30, 2001, are
entitled to vote at the Annual Meeting. On the record date, April
30, 2001, there were outstanding 14,553,302 shares of Common Stock.
Each share of Common Stock entitles its holder to one vote. The
presence in person or by proxy of holders of record of a majority
of the outstanding shares of Common Stock is required to constitute
a quorum for the transaction of business at the meeting. Under
Washington law and Crown's Articles of Incorporation, if a quorum
is present at the meeting the five nominees for election as
Directors who receive the greatest number of votes cast for
election of directors at the meeting by the shares present in
person or represented by proxy at the meeting and entitled to vote
shall be elected Directors. Shares held by persons who abstain
from voting on the election of Directors and broker non-votes will
not be counted in the election. Shares held by persons abstaining
will be counted in determining whether a quorum is present for the
purpose of voting on the proposal but broker non-votes will not be
counted for this purpose.
Crown also has issued 1,000,000 shares of its Series A
Nonconvertible Preferred Stock to a subsidiary of Crown. Although
the terms of the Preferred Stock entitle its holder to vote as a
shareholder of Crown, under Washington corporate law this stock may
not be voted while it is held by a subsidiary of Crown.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information, as of April 17,
2001, with respect to the number of shares of Common Stock
beneficially owned by each shareholder known by Crown to be the
beneficial owner of more than five percent of the Common Stock, by
all Directors, nominees for director, executive officers named in
the Summary Compensation Table and all Directors, nominees for
director and executive officers as a group. Except as noted below,
each shareholder has sole voting and investment powers with respect
to the shares shown. Unless otherwise indicated below, the address
of each beneficial owner is 1675 Broadway, Suite 2400, Denver,
Colorado 80202.
Percent of
Name and Address of Amount and Nature of Crown's
Beneficial Owner Beneficial Ownership Common Stock
The Equitable Life Assurance Society (1). . . . 1,000,000 6.9
City Place House, 55, Basinghall Street
London EC2V 5DR
Mark E. Jones, III (2) . . . . . . . . . . . . 206,233 1.4
Christopher E. Herald (3) . . . . . . . . . . . 453,843 3.1
J. Michael Kenyon (4) . . . . . . . . . . . . . 87,800 0.6
Linder G. Mundy (4) . . . . . . . . . . . . . . 60,150 0.4
Steven A. Webster (4) (5) . . . . . . . . . . . 151,256 1.0
David R. Williamson (6) . . . . . . . . . . . . 100,000 0.7
James R. Maronick (7) . . . . . . . . . . . . . 170,886 1.2
All Directors, nominees for director,
and executive officers as a group
(9 persons) (3)(10) . . . . . . . . . . . . 1,624,971 10.3
(1) Based upon information supplied to Crown by the shareholder.
(2) Includes options to purchase 205,900 shares.
(3) Includes options to purchase 267,500 shares and 7,640 shares
owned by Mr. Herald's spouse of which Mr. Herald disclaims
beneficial ownership.
(4) Includes options to purchase 60,000 shares and
(5) Includes options to purchase 60,000 shares. Mr. Webster is
not seeking re-election to the Board when his term expires in
2001.
(6) Includes options to purchase 60,000 shares and 40,000 shares
owned by David Williamson Associates Ltd.
(7) Includes options to purchase 160,000 shares.
(8) Includes, in the aggregate, options to purchase 1,181,400
shares.
ELECTION OF DIRECTORS
The Board currently consists of six Directors, however
effective as of the Annual Meeting of Shareholders, the number of
Directors shall be reduced to five. The Directors elected at the
Annual Meeting will serve until the next Annual Meeting of
Shareholders and until their successors are elected and qualified.
Unless the vote is withheld by the shareholder, the proxies
solicited by the Board will be voted for the re-election of all the
current Directors, except Mr. Webster, who is not standing for re-
election when his term expires in June 2001. The five nominees who
receive the most votes will be elected. If a shareholder does not
vote for a nominee or indicates to 'withhold' authority to vote for
a nominee on the proxy card, that shareholder's vote will not count
either for or against the nominee. The current Directors are:
Mark E. Jones, III. Mr. Jones, age 61, has been a Director
and the Chairman of the Board of Crown since it commenced
operations in February 1989. He was Chief Executive Officer of
Crown from February 1989 until July 1993. He was President of
Crown from September 1989 to November 1990. Mr. Jones is also
Chairman of Solitario Resources Corporation ("Solitario"), a 41.3
percent-owned subsidiary of Crown that is engaged in exploration
and development of properties in South America. Mr. Jones also
serves as Chairman of Star Resources Corporation, a diamond
exploration company.
Christopher E. Herald. Mr. Herald, age 47, has been a
Director of Crown since April 1989. He has served as Chief
Executive Officer of Crown since June of 1999 and President of
Crown since November 1990 and was Executive Vice President of Crown
from January 1990 to November 1990. Mr. Herald also serves as
Chief Executive Officer and a director of Solitario.
J. Michael Kenyon. Mr. Kenyon, age 51, has been a Director of
Crown since it commenced operations. Mr. Kenyon is President of
Hastings Resource Corp, a private mineral resource company and is
a private consultant to Barrick Gold Corporation.
Linder G. Mundy. Mr. Mundy, age 73, has been a Director of
Crown since its inception. Since 1985, Mr. Mundy has been a
private business consultant.
Steven A. Webster. Mr. Webster, age 49, has been a Director
of Crown since it commenced operations. Mr. Webster is managing
director of Global Energy Partners, an affiliate of Donaldson
Lufkin and Jenret's merchant banking group; is chairman of Carrizo
Oil & Gas, Inc., an oil exploration company; is a trust manager of
Camden Property Trust, a real estate investment trust; is a
director of Grey Wolf, Inc., a land rig contractor; and is a
director of Geokinetics, Inc., a geophysical company.
David R. Williamson. Mr. Williamson, age 59, has been a
Director of Crown since September 1989. In 1989 he founded David
Williamson Associates Ltd., which undertakes research and
consulting for the mining industry. He also serves as a director
of Crew Development Corporation, Cornucopia Resources Ltd., and
Asia Pacific Resources, all mining and exploration companies.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL OF THE NOMINEES,
EXCEPT MR. WEBSTER, LISTED ABOVE, WHO IS NOT STANDING FOR
REELECTION.
It is intended that votes will be cast pursuant to the
enclosed proxy for the election of Directors from the foregoing
nominees, excluding Mr. Webster. If any nominee shall not be a
candidate for election as a Director at the meeting, it is intended
that votes will be cast pursuant to the enclosed proxy for such
substitute nominees as may be nominated by the existing Directors.
Other than Mr. Webster, no circumstances are presently known which
would render any nominee named herein unavailable.
Under Crown's Bylaws, shareholders seeking to nominate other
candidates for election to the Board at the Annual Meeting must
give written notice to the Corporate Secretary of Crown no less
than sixty (60) nor more than ninety (90) days before the Annual
Meeting. The notice must be accompanied by certain information as
to the shareholder giving the notice and each proposed nominee,
including information similar to that required under the federal
proxy rules. If less than seventy (70) days' notice or prior
public disclosure of the
date of the scheduled meeting is given, notice by the shareholder
must be given not later than the tenth day following the earlier of
mailing of notice of the meeting or the date public disclosure of
the meeting date was made. The Bylaws provide that no person shall
be elected a Director of Crown unless nominated in accordance with
the Bylaws. No Director nominations for the 2001 Annual Meeting
had been received by Crown prior to the date of this Proxy
Statement.
Directors' Compensation
Directors who are not employees of Crown are reimbursed for
their expenses incurred in attending Board meetings. Directors
have received options to purchase Common Stock granted under
Crown's 1988 Stock Benefit Plan (the "1988 Plan"), however the ten
year life of the 1988 Plan has expired and no new options may be
granted from the 1988 Plan. In addition, Directors are eligible to
receive non-qualified stock options under the 1991 Stock Incentive
Plan (the "1991 Plan"). All options, under both plans, terminate
after five years from date of grant if not earlier exercised.
Under the 1991 Plan, the Board of Directors may (a) grant
incentive stock options, as defined in Section 422 of the Internal
Revenue Code of 1986, as amended, to any non-director employee of
Crown or to any non-director employee of any parent or subsidiary
of Crown; (b) grant options other than incentive stock options
(i.e. non-qualified stock options)except that members of the Board
of Directors are eligible only to receive formula grants of non-
qualified stock options. Each Director who is not an employee
automatically receives an award of a non-qualified stock options
covering 10,000 shares of Crown Common Stock on February 28 each
year; (c) grant stock appreciation rights or cash bonus rights; (d)
award stock bonuses; and (e) grant stock purchase rights and sell
stock subject to restrictions. All options granted to Directors
under the 1991 Plan have an exercise price equal to the fair market
value of Crown's Common Stock on the date of grant and they are
exercisable from and after the date of grant. The Board of
Directors reserved 1,500,000 shares of Common Stock for grants
under the 1991 Plan. Currently, 1,116,251 shares remain available
for issue under the 1991 Plan; of these, options for 1,109,150
shares have been granted and options for 7,101 share are available
for grant.
Generally, the terms and conditions of the 1988 Plan are
similar to those of the 1991 Plan described above, except that
members of the Board of Directors were not restricted to receive
formula grants of non-qualified stock options. The Board of
Directors reserved 1,500,000 shares of Common Stock for grants
under the 1988 Plan. The 1988 Plan had a ten-year term and no
additional grants of options may be made under the 1988 Plan.
Currently, 497,000 shares remain available for issue pursuant to
options previously granted under the 1988 Plan.
Meetings of Board of Directors and Committees
During the fiscal year ended December 31, 2000, there were
four meetings of the Board. Each of the incumbent Directors
attended at least 75 percent of the aggregate of the total number
of meetings of the Board held while they served as a Director and
the total number of meetings held by all committees of the Board on
which they served, except for David Williamson, who attended 25
percent of the meetings. All of the references to meetings exclude
actions taken by written consent.
The Board has an Audit Committee consisting exclusively of
non-employee Directors, Messrs. Kenyon, Mundy and Webster. The
Audit Committee operates under a written charter adopted by the
Board, a copy of which has been filed with the SEC and is available
for review at Crown's offices. The Audit Committee has the
responsibility, among other things, to: (i) recommend the selection
of Crown's independent public accountants; (ii) review the
preparation and scope of the annual audit of Crown and the extent
of non-audit services; (iii)review with management the independent
auditors' report and the recommendations of the independent
auditors; (iv) review litigation and other legal matters that may
affect Crown's financial condition; (v) recommends the inclusion of
the audited financial statements in the Annual Report on form 10-K.
The Audit Committee met once during the fiscal year ended December
31, 2000. The Audit Committee's report is set forth below.
AUDIT COMMITTEE REPORT
In performing its duties, the Audit Committee reviewed and
discussed the audited financial statements contained in the 2000
Annual Report on Form 10-K with management. The Audit Committee
met with Deloitte and Touche, LLP, and discussed any issues deemed
to be significant by Deloitte and Touche, LLP, including any
matters required by Statement of Auditing Standard No. 61
(Communications with Audit Committees). In addition, the Audit
Committee discussed with Deloitte and Touche, LLP its independence
from Crown and its management, and has received the written
disclosures and letter from Deloitte and Touche, LLP that stated it
is independent of Crown within the meaning of US Securities laws.
In reliance on the reviews and discussions outlined above, the
Audit Committee has recommended to the Board that Crown include the
audited financial statements in its Annual Report under Form 10-K
for the year ended December 31, 2000.
J. Michael Kenyon, Chairman
Linder G. Mundy
Steven A. Webster
The Board also has a Compensation Committee consisting of non-
employee Directors, Messrs. Kenyon, and Webster. The Compensation
Committee is responsible for reviewing and approving executive
compensation and administering Crown's stock option programs. The
Compensation Committee met once during 2000.
The Board does not have a nominating committee or other
committee performing similar functions.
Compliance with Section 16(a) of the Securities Exchange Act of
1934
Section 16(a) of the Securities Exchange Act of 1934 requires
Crown's Directors and executive officers, and persons who own more
than ten percent of a registered class of Crown's equity
securities, to file with the Securities and Exchange Commission
("SEC") initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of Crown.
Officers, Directors, greater than ten percent shareholders are
required by SEC regulation to furnish Crown with copies of all
Section 16(a) forms they file. To Crown's knowledge, based solely
on review of the copies of such reports furnished to Crown and
written representations that no other reports were required, during
the fiscal year ended December 31, 2000, all Section 16(a) filing
requirements applicable to officers, Directors, and greater than
ten percent beneficial owners
were complied with.
EXECUTIVE COMPENSATION
Report of the Compensation Committee
Overview and Philosophy. The Compensation Committee of the
Board is composed entirely of two independent non-employee
directors. The Compensation Committee is responsible for reviewing
and approving executive compensation and administering Crown's
stock option programs. Following review and approval by the
Compensation Committee, all issues pertaining to executive
compensation are submitted to the full Board for approval.
The policy of the Compensation Committee in determining
executive compensation is that such compensation should (i) reflect
Company performance, (ii) reward individual performance, (iii)
align the interests of the executives with the long-term interests
of the shareholders and (iv) assist Crown in attracting and
retaining key executives critical to the long-term success of
Crown.
Executive Officer Compensation Program. The major elements of
the executive compensation program during 2000 consisted
principally of base salary, bonuses, and Crown's stock option
plans, which reward executives for delivering value to Crown
shareholders as measured by increases in the Common Stock price and
performance of Crown's share price relative to its industry peer
group. During 2000, Crown entered into change-in-control agreements
with Mr. Herald, Mr. Jones and Mr. Maronick. These contracts
provide for the payment of between one-and-a-half times and two-
and-a-half-times salary in the event of a change in control of
Crown.
Base Salary. Base salaries of executive officers are
established annually, at the beginning of each year. The
Compensation Committee reviews the responsibilities, experience,
performance of the executive officers, basing its approval of base
salary levels and changes thereupon on these and other factors,
including the competitive marketplace and Crown's budget
considerations. Due to budget considerations, there were no salary
increases granted to executive officers during 2000.
Bonuses. Bonuses are granted to executive officers at the
discretion of the Board. During 2000, bonuses were paid to certain
salaried employees in amounts equal to six percent of annual base
pay. A portion of some of the bonuses were paid in the form of
shares of Crown's common stock.
Stock Option Plans. The shareholders have approved Crown's
stock option plans. The Board granted stock options during 2000 to
certain eligible employees including the Named Executive Officers
pursuant to the 1991 Plan. The objectives of both the 1988 Plan
and the 1991 Plan are to align executive and shareholder long-term
interests by creating a direct link between executive pay and
shareholder return, as well as provide long-term incentives to the
executive.
Non-qualified stock options are granted under the 1991 Plan to
non-director executive officers at an option price not less than
the average price for the five business days immediately preceding
the date of grant. Such non-qualified stock options are 25 percent
vested upon date of grant and vest an additional 25 percent each
year so that they are 100 percent vested after three years. The
Board grants such options annually.
Executive officers who are also members of the Board are
eligible only to receive formula grants of non-qualified stock
options under the 1991 Plan. Such executive officers are entitled
to receive automatically, on February 28 of each year, an award of
stock options calculated by dividing the executive officer's annual
base compensation rate on the grant date by three. All such
options are granted at a price equal to the fair market value of
Crown's Common Stock on the date of the grant.
All options granted to executive officers terminate after five
years from date of grant if not earlier exercised.
On June 5, 1999 and on June 19, 1998 the Board of Directors,
voted to reprice all existing stock options, held by current
officers, Directors and employees to $1.75, and to $4.06,
respectively, which was the then current market price of the
stock. The Board believed the worldwide declines in metals prices
over the prior two years and the ongoing difficulties faced in the
permitting of the Crown Jewel Project had a significant impact on
Crown's stock price and that the beneficial work of Crown's
management in a difficult environment, which included the positive
action taken by the President and Congress in getting the approval
of the Crown Jewel Plan of Operations, was not reflected in the
stock price. Crown's management and employees had not been given
an increase in salaries for the last six years. The directors of
Crown receive no compensation for their services, other than their
stock options. The Board recognized the efforts of Crown's
management and employees and believed that the retention of
existing personnel and recruitment of new personnel require the use
of stock options. Accordingly, the Board felt a repricing of
existing stock options in both years, to the then current market
level, was warranted for past service and as an incentive for
future performance. The total number of stock options repriced in
1999 was 1,559,775 which included 507,500 stock options from the
1988 Plan and 1,052,275 stock options from the 1991 Plan. The
total number of stock options repriced was 1,276,841 which included
523,250 stock options from the 1988 Plan and 753,591 stock options
from the 1991 Plan.
Change in Control Agreements. During June 2000, Crown signed
Change in Control agreements ('the Agreements") with Mr. Herald,
Mr. Jones and Mr. Maronick (the "Named Executives"). The Board
recognized the benefit to Crown to foster continued employment of
key management personnel. In this connection, the Board recognized
that, as is the case with many publicly held corporations and their
subsidiaries, the possibility of a change in control may exist and
that such possibility , and the uncertainty and questions which it
may raise among management, may result in the departure or
distraction of management personnel to the detriment of Crown and
its stockholders. A Change in Control is deemed to have occurred
if: (a) Any person is or becomes the beneficial owner of securities
representing 20% of the voting power of Crown; or (b)the
shareholders of Crown approve a merger other than a merger where at
least 80% of the combined voting power of Crown securities in the
surviving entity were represented by the combined voting power
before the merger; or (c) the shareholders of Crown approve the
sale of all or substantially all of the assets of Crown; or (d) the
approval by the shareholders of Crown of any plan of liquidation or
dissolution of the Company. The Agreements will remain in effect
during the employment of the Named Executives, however, if a Change
in Control shall have occurred during the term of the Agreements,
the Agreements shall remain in effect for a period of three years
beyond the month in which the Change in Control occurred. The
Agreements provide no benefits unless there shall have been a
Change in Control. In the event that following a Change in
Control, the Corporation terminates the employment of the Named
Executive, other than for Cause, or , the Named Executive resigns
from his employment for Good Reason, the Agreements provide for the
payment of two and one-half times the annual salary of Mr. Jones
and Mr. Herald and for the payment of one and one-half times the
annual salary of Mr. Maronick. Cause is defined as: (a) conviction
of a felony; or (b) gross and willful failure of the Named
Executive to perform his duties; or (c) dishonest conduct, which is
intentional and materially injurious to Crown. Good Reason is
defined as: (a) a reduction in the level of responsibility; or (b)
a reduction in compensation; or (c) forced relocation to another
geographic location; or (d) failure to maintain substantially
similar employment terms.
401(k) Plan. In 1990 Crown adopted the Crown Resources
Corporation 401(k) Plan ("401(k) Plan"), a defined-contribution
plan covering all full-time employees, including the Named
Executive Officers. The 401(k) Plan provides for Company matching,
at the rate of 75 percent, of employee savings contributions up to
nine percent of annual compensation, subject to ERISA limitations.
Company contributions are subject to vesting percentages of 25
percent after one year of vesting service, increasing annually by
25 percent, such that all amounts are fully vested after four years
of vesting service. Plan participants may direct the investment of
contributions in any of several different funds, including a
government securities fund and various debt and equity funds.
Compensation of the Chief Executive Officer. Mr. Herald's
compensation for 2000 was based upon the established compensation
policies described above. In establishing Mr. Herald's base
salary, the Board evaluated the competitive standing of Crown as
measured by criteria such as market capitalization, potential
ounces of annual gold production, proven gold reserves, and stock
performance. The Board also considered the duties,
responsibilities, and performance of Mr. Herald in his capacity as
Chief Executive Officer of Crown and executive pay rates of peer
group companies. Mr. Herald's 2000 salary and performance
incentives reflect his responsibilities in directing the day-to-
day activities of Crown and its subsidiaries. Mr. Herald's salary
arrangement and performance incentives will continue to be
evaluated by the Board periodically. During 2000, Mr. Herald
received a bonus consisting of 3,300 shares of common stock of
Crown, valued at $5,775 and cash payment of $2,888.
The stock options granted to Mr. Herald during fiscal 2000
were granted in accordance with the formula in the 1991 Plan.
COMPENSATION COMMITTEE
J. Michael Kenyon, Chairman
Steven A. Webster
Summary Compensation Table
The following table sets forth the compensation paid by Crown during each of the last
three fiscal years to its Chief Executive Officer and each of the next most highly paid
executive officers whose cash compensation exceeded $100,000 during the fiscal year ending
December 31, 2000:
Long-Term
Annual Compensation Compensation All
Awards Other
Salary Bonuses Options Compensation
Name and Principal Position Year ($) ($) (#) ($)
Christopher E. Herald, CEO 2000 144,375 8,663(3) 48,125(1) 9,956(2)
1999 144,375 8,663(6) 48,125(1) 9,931(8)
219,375(12)
145,000(5)
68,000(5)
70,000(14)
1998 144,375 7,810(7) 48,125(1) 9,993(8)
217,083(13)
Mark E. Jones, III, Chair. 2000 98,175 4,909 32,175(1) 9,509(2)
1999 98,175 4,909 32,725(1) 11,168(2)
205,900(12)
135,000(5)
68,000(5)
80,000(14)
1998 98,175 4,909 32,725(1) 10,614(2)
235,508(13)
James R. Maronick, CFO 2000 100,000 6,000(4) 30,000(1) 6,968(11)
1999 100,000 6,000(9) 30,000(1) 6,933(11)
95,000(12)
70,000(5)
44,000(5)
50,000(14)
1998 100,000 5,410(10) 15,000(1) 7,005(11)
65,000(13)
(1) Granted under Crown's 1991 Plan. See "Option Grants in Last
Fiscal Year."
(2) Includes $7,875 in fully-vested employer matching
contributions to 401(k) Plan.
(3) Includes 3,300 shares of common stock, valued at a market
price of $1.75 per share, issued as a bonus.
(4) Includes 2,286 shares of common stock, valued at a market
price of $1.75 per share, issued as a bonus.
(5) Options to acquire Solitario common stock, granted under the
Solitario 1994 Stock Option Plan.
(6) Includes 3,080 shares of common stock, valued at a market
price of $2.81 per share, issued as a bonus.
(7) Includes 2,118 shares of common stock, valued at a market
price of $3.69 per share, issued as a bonus.
(8) Amount includes $7,500 in fully-vested employer matching
contributions to 401(k) Plan.
(9) Includes 2,133 shares of common stock valued at a market
price of $2.81 per share, issued as a bonus.
(10) Includes 1,467 shares of common stock, valued at a market
price of $3.69 per share, issued as a bonus.
(11) Amount includes $6,750 in fully-vested employer matching
contributions to 401(k) Plan.
(12) Amount includes shares of the 1991 and 1988 Plans repriced
by the Board on June 5, 1999 to $1.75.
(13) Amount includes shares of the 1991 and 1988 Plans repriced
by the Board on June 19, 1998 to $4.06.
(16) Amount includes $1,977 in fully-vested employer matching
contributions to 401(k) Plan.
(14) Amount includes shares of the 1994 Solitario Plan repriced
by Solitario on March 16, 1999 to Cdn$1.16.
Options
The following tables set forth for the fiscal year ended
December 31, 2000 contain certain information regarding options
granted to, exercised by, and held at year end by the Named
Executive Officers.
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
<CAPTION
Percent of Potential Realizable
Total Value at Assumed
Options Annual Rates of
Granted Exercise Stock Price
Options to Employees or Base Appreciation for
Granted in Fiscal Price(2) Expiration Option Term (1)
Name (#) Year ($/sh) Date 5%($) 10%($)
Christopher E. Herald 48,125(2) 17.0% $1.03 2/28/2005 13,764 30,271
Mark E. Jones, III 32,725(2) 11.8% $1.03 2/28/2005 9,359 20,584
James R. Maronick 30,000(3) 10.8% $1.03 2/28/2005 8,580 18,870
(1) Potential realizable value is based on an assumption that the
stock price of the Common Stock appreciates at the annual rate
shown (compounded annually) from the date of grant, until the
end of the five-year option term. These numbers are
calculated based on the requirements promulgated by the SEC
and do not reflect Crown's estimate of future stock price
growth.
(3) The options granted are non-qualified stock options that vest
and become exercisable upon date of grant. Such options are
nonassignable and nontransferable except by will or by the
laws of descent and distribution. All options terminate five
years from date of grant.
(4) The options granted are non-qualified stock options that vest
and become exercisable over a four-year period, becoming fully
vested on February 28, 2003. Such options are nonassignable
and nontransferable except by will or by the laws of descent
and distribution. Options not already exercisable may become
exercisable upon mergers or changes in control of Crown,
pursuant to the 1991 Plan. All options terminate five years
from date of grant.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
Number of Unexercised Value of Unexercised
Shares Value Options at Fiscal in-the Money Options
Acquired on Realized Year-End (#) at Fiscal Year-End ($)
Name Exercise(#) ($) Exercisable/Unexercisable
Exercisable/Unexercisable
Mark E. Jones, III 0 0 238,629 0 0 / 0 (1)
Christopher E. Herald 0 0 267,500 0 0 / 0 (1)
James R. Maronick 0 0 83,750 41,250 0 / 0 (1)
(1) Value based on market price of $0.35 per share of Crown Common
Stock at December 29, 2000, less the exercise price.
TEN-YEAR OPTION/SAR REPRICINGS
Securities Years of
underlying Market price of Exercise price original option
number of stock at time of at time of New exercise term remaining
Name Date options/SARs repricing or repricing or price ($) at date of
repriced or amendment ($) amendment ($) repricing or
amended (#) amendment
Christopher E. Herald 6/05/1999 48,125(1) $1.75 $2.56 $1.75 4.8
48,125(1) $1.75 $4.06 $1.75 3.8
48,125(1) $1.75 $4.06 $1.75 1.8
75,000(2) $1.75 $4.06 $1.75 2.6
3/16/1999 70,000(3) Cdn$1.16 Cdn$2.25 Cdn$1.16 2.8
6/19/1998 48,125(1) $4.06 $4.19 $4.06 4.7
48,125(1) $4.06 $5.63 $4.06 2.7
75,000(2) $4.06 $5.75 $4.06 3.5
45,833(1) $4.06 $6.56 $4.06 0.7
Mark E. Jones, III 6/05/1999 32,725(1) $1.75 $2.56 $1.75 4.8
32,725(1) $1.75 $4.06 $1.75 3.8
65,450(1) $1.75 $4.06 $1.75 1.8
75,000(2) $1.75 $4.06 $1.75 2.6
3/16/1999 80,000(3) Cdn$1.16 Cdn$2.25 Cdn$1.16 2.8
6/19/1998 32,725(1) $4.06 $4.19 $4.06 4.7
65,450(1) $4.06 $5.63 $4.06 2.7
75,000(2) $4.06 $5.75 $4.06 3.5
62,333(1) $4.06 $6.56 $4.06 0.7
James R. Maronick 6/05/1999 30,000(1) $1.75 $2.63 $1.75 4.8
15,000(1) $1.75 $4.06 $1.75 3.8
30,000(1) $1.75 $4.06 $1.75 3.3
3/16/1999 50,000(3) Cdn$1.16 Cdn$4.40 Cdn$1.16 3.4
6/19/1998 15,000(1) $4.06 $4.30 $4.06 4.7
50,000(1) $4.06 $5.73 $4.06 4.2
(1) Options granted pursuant to the 1991 Plan.
(2) Options granted pursuant to the 1988 Plan.
(3) Options granted by Solitario pursuant to the 1994 Plan.
COMPARATIVE STOCK PERFORMANCE
The following performance graph compares the performance of
Crown's Common Stock to the NASDAQ Stock Market Total Return
Index, the S & P Gold Mining Index, and a six-company peer group
for Crown's last five fiscal years. The graph assumes the value
of the investment was $100 at December 31, 1994 and measures
that investment at December 31 of each of the years shown. All
dividends are assumed to be reinvested. The graph is presented
pursuant to requirements of the SEC. The information contained
in this graph is not necessarily indicative of future price
performance.
(This is a graph comparing the stock price of Crown Resources
Corporation to the markets listed below.)
S & P Gold and Precious Metals Mining consists of Barrick Gold,
Battle Mountain Gold, Echo Bay Mines, Homestake Mining, Newmont
Mining, and Placer Dome, which are major gold producers.
Peer Group consists of Alta Gold, Bema Gold, Canyon Resources,
Glamis Gold, Metallica Resources, and Royal Gold.
INDEPENDENT PUBLIC ACCOUNTANTS
Crown's Shareholders are asked to ratify the selection of
Deloitte & Touche LLP, independent public accountants, to
continue as Crown's auditors for fiscal 2001. A majority of the
shares voting at the Annual Meeting is required to appoint
Deloitte and Touche, LLP as Crown's independent accountants for
fiscal 2001. If a shareholder does not vote, or abstains from
voting, it will have no effect on the outcome of the
vote.Representatives from Deloitte & Touche LLP are expected to
be present at the Annual Meeting of Shareholders to make a
statement if they so desire and to respond to appropriate
questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" DELOITTE & TOUCHE,
LLP AS CROWN'S INDEPENDENT AUDITORS.
Audit Fees
The aggregate fees billed by Deloitte & Touche LLP, the
member firms of Deloitte Touche Tohmatsu, and their respective
affiliates (collectively "Deloitte") for professional services
rendered for the Audit of Crown's annual financial statements
for the fiscal year ended December 31, 2000 and for the reviews
of financial statements included in Quarterly Reports on Form
10-Q for that fiscal year were $67,000.
Financial Information Systems Design and Implementation Fees
Deloitte did not perform or bill for any professional
services for information technology services relating to
financial information systems design and implementation for the
fiscal year ended December 31, 2000.
All Other Fees
The aggregate fees billed by Deloitte for services rendered
to Crown, other that services described above under "Audit Fees"
and "Financial Information Systems Design and Implementation
Fees", for the fiscal year ended December 31, 2000 were $34,000.
The Audit Committee considered whether the provision of non-
audit services is compatible with maintaining the principal
accountant's independence and has determined that the provision
is compatible.
PROPOSALS OF SHAREHOLDERS
Under Crown's Bylaws, shareholders seeking to propose
business to be conducted at the 2001 Annual Meeting must give
written notice to the Corporate Secretary of Crown no later than
the time that shareholder Director nominations must be received.
The notice must contain certain information as to the proposal
and the shareholder, including the share ownership of the
shareholder and any financial interest in the proposal. Any
proposal not made in compliance with the Bylaws may be rejected
by the Board. No shareholder proposals for the 2000 Annual
Meeting had been received by Crown prior to the date of this
Proxy Statement.
Shareholder proposals intended to be presented at the 2002
Annual Meeting of Shareholders should be received by Crown prior
to January 1, 2002, for inclusion in Crown's Proxy Statement for
that meeting.
OTHER BUSINESS
Crown knows of no other business to be presented at the
meeting. If any other business properly comes before the
meeting, it is intended that the shares represented by proxies
will be voted with respect thereto in accordance with the best
judgment of the person named in the accompanying form of proxy.
Upon written request from any person solicited herein
addressed to the Corporate Secretary of Crown at its principal
offices, Crown will provide, at no cost, a copy of the Annual
Report on Form 10-K filed with the SEC for the fiscal year ended
December 31, 2000.
By Order of the
Board of
Directors
James R.
Maronick
Secretary
April 30, 2001
Denver, Colorado