SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
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
[X] Definitive Proxy Statement RULE 14C-5(D)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
Amax Gold Inc.
------------------------------------------------------------------------
(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):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] 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 computed
pursuant to Exchange Act Rule 0-11 (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
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:
Notes:
[LOGO OF AMAX GOLD INC. APPEARS HERE]
9100 EAST MINERAL CIRCLE, ENGLEWOOD, COLORADO
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 30, 1996
To the Holders of Common Stock:
The Annual Meeting of Stockholders of Amax Gold Inc. will be held in the
offices of the Company at 9100 East Mineral Circle, Englewood, Colorado on
Friday, April 30, 1996, at 10:00 a.m. for the following purposes:
1. To elect six directors, each to hold office until the 1997 Annual Meeting
of Stockholders;
2. To ratify the selection of Price Waterhouse LLP as independent
accountants for the current fiscal year; and
3. To transact such other business as may properly come before the meeting
or any adjournments thereof.
The Board of Directors has fixed the close of business on March 14, 1996 as
the record date for the determination of stockholders entitled to notice of
and to vote at the Annual Meeting or any adjournments or postponements
thereof. All holders of common stock of record at that time are entitled to
vote at the meeting.
It is important that your stock be represented at the meeting. Whether or
not you plan to attend, please sign, date, and return the enclosed proxy
promptly in order to be sure that your shares will be voted. You may revoke
your proxy at any time before it is voted at the meeting by submitting a
written revocation or a new proxy or by attending the meeting and voting in
person.
Deborah J. Friedman
Vice President, General Counsel
and Secretary
March 29, 1996
[LOGO OF AMAX GOLD INC. APPEARS HERE]
PROXY STATEMENT
This Proxy Statement is being furnished to the stockholders of Amax Gold
Inc., a Delaware corporation ( "Amax Gold" or the "Company"), in connection
with the solicitation of proxies by the Company's Board of Directors from
holders of outstanding shares of the Company's common stock, par value $.01
per share ("Common Stock"), on March 14, 1996, for use at the Annual Meeting
of Stockholders of the Company to be held on April 30, 1996 and at any
adjournments or postponements thereof. Only holders of Common Stock of record
at the close of business on March 14, 1996 will be entitled to vote at the
meeting, each share of such stock being entitled to one vote. On March 14,
1996, there were outstanding 96,443,101 shares of Common Stock. Assuming a
quorum is present, a plurality of the votes cast is required to elect
directors. Cyprus Amax Minerals Company, a Delaware corporation ("Cyprus
Amax"), holds approximately 51.2 percent of the outstanding Common Stock. The
affirmative vote of Cyprus Amax will be sufficient to elect directors. The
Annual Report to Stockholders for the year ended December 31, 1995, proxy
statement and form of proxy are being mailed on or about March 29, 1996 to
each stockholder entitled to vote at the meeting.
Properly executed proxies returned at or prior to the meeting, unless
subsequently revoked, will be voted in accordance with the directions thereon.
If no directions are specified, the shares represented by the proxy will be
voted FOR proposals 1 and 2. Abstentions are counted in tabulations of votes
cast at the meeting and thus have the same effect as a negative vote, whereas
shares not voted due to the failure of a broker to exercise discretionary
authority are not tabulated for purposes of determining whether a proposal has
been approved. You may revoke your proxy at any time before it is voted at the
meeting by submitting a written revocation or a new proxy to the Secretary of
the Company or by attending the meeting and voting in person. The persons
named in the proxy will have discretionary authority to vote with respect to
additional matters that may properly come before the meeting.
The entire cost of the solicitation of proxies will be borne by Amax Gold.
In addition to solicitation by mail, officers and regular employees of Amax
Gold may solicit proxies by telephone, telegraph or personal contact.
Additional solicitation of proxies of brokers, banks, nominees and
institutional investors will be made by Georgeson & Company Inc. at a cost to
Amax Gold of approximately $5,000 plus out-of-pocket expenses.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
As of March 14, 1996, the following is, to the knowledge of the Company, the
only person (including any "group" as that term is used in Section 13(d)(3) of
the Securities Exchange Act of 1934) who is a beneficial owner of more than
five percent of the Common Stock:
AMOUNT AND NATURE PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP OF CLASS
------------------------------------------- ----------------------- --------
Cyprus Amax
9100 East Mineral Circle
Englewood, Colorado 80112................. 62,212,228 shares (1) 56.9%
- --------
(1) Includes 12,850,671 shares of Common Stock that Cyprus Amax has the right
to acquire within 60 days under the DOCLOC I agreement and the Stock
Issuance Agreement (described below). Does not include additional shares
of Common Stock that may be acquired by Cyprus Amax pursuant to the Kubaka
acquisition agreement and Fort Knox financing arrangements, each of which
is described below.
CERTAIN TRANSACTIONS-RELATIONSHIP WITH CYPRUS AMAX
Cyprus Amax currently owns 49,361,557 shares or approximately 51.2 percent
of the outstanding Common Stock of the Company. In 1995, Cyprus Amax acquired
15,047,848 shares of Common Stock pursuant to DOCLOC II and the Stock Issuance
Agreement (each described below). Cyprus Amax may acquire additional shares of
Common Stock as described below.
Four of the six members of the Company's Board are directors and officers of
Cyprus Amax: Milton H. Ward, Chairman of Board of Directors and Chief
Executive Officer of the Company, is Chairman of the Board of Directors,
President and Chief Executive Officer of Cyprus Amax; Gerald J. Malys, a
director of the Company, is Senior Vice President and Chief Financial Officer
of Cyprus Amax; Allen Born, a director of the Company, is Vice Chairman of the
Board of Directors of Cyprus Amax; and Rockwell A. Schnabel, a director of the
Company, is a director of Cyprus Amax.
The Company is party to a number of contracts with Cyprus Amax, which are
described below.
The Company has agreed to acquire, subject to the satisfaction of certain
conditions, Cyprus Amax's indirect 50 percent interest in the Kubaka gold
project located in the Russian Federation for approximately 11.8 million
shares of the Company's Common Stock to be paid upon closing and approximately
4.2 million shares of Common Stock to be paid within ten days of commencement
of commercial production at Kubaka. A contingent payment in Common Stock may
be made for reserves subsequently acquired by the Company in the Russian
Federation at the rate of $10 per gold equivalent ounce, with the Common Stock
valued at the then current ten day average stock price.
As a result of projected cost increases in completing the Fort Knox gold
mine in Alaska and other projected cash needs in 1996, the Company has
renegotiated its $250 million credit line with a group of banks. Cyprus Amax
has agreed to guarantee the loan until economic completion of the Fort Knox
mine, and the Company has agreed that it will not borrow under DOCLOC I
described below, which forms part of the guaranty, without the consent of
Cyprus Amax. In addition, Cyprus Amax has informed the Company that it intends
to make additional needed financing available to Amax Gold. The Company will
pay Cyprus Amax a fee of 2.5 percent based upon the total financing and
guaranties made available. All fees, interest and repayments of advances from
Cyprus Amax may be made in cash or, subject to approval of the stockholders of
the Company, in the Company's Common Stock at the election of Cyprus Amax,
with stock valued at the average closing price for the five day period before
such election.
Pursuant to the April 1994 Revolving Loan Agreement ("DOCLOC I") between the
Company and Cyprus Amax, Cyprus Amax provided the Company with a $100 million
line of credit. Indebtedness may be repaid by the Company's issuance of up to
two million shares of the Company's Series A Preferred Stock, redeemable by
the Company for up to 12,099,213 shares of Common Stock, or convertible by
Cyprus Amax at any time into up to 12,099,213 shares of Common Stock at a
conversion price of $8.265 per share.
Pursuant to the March 1995 Revolving Loan Agreement ("DOCLOC II"), between
the Company and Cyprus Amax, Cyprus Amax provided the Company with an
additional $80 million line of credit, all of which was borrowed in 1995. Also
in 1995, Cyprus Amax exercised its option to convert this indebtedness into
14,919,806 shares of Common Stock at a conversion price of $5.362 per share
and, as a result, DOCLOC II was terminated.
2
In September 1995, the Company and Cyprus Amax entered into an Agreement
Regarding Stock Issuance pursuant to which obligations of the Company to
Cyprus Amax may be paid with the agreement of both parties in shares of Common
Stock, valued at the then current 30 day average closing price. In September
1995, 128,042 shares of the 879,500 shares of Common Stock available under the
Stock Issuance Agreement were issued to Cyprus Amax in connection with payment
of $835,473 due under the $80 million credit line.
The Company entered into an Exploration Joint Venture Agreement with Cyprus
Amax, effective January 1994, under which the Company and Cyprus Amax have
agreed to pool their efforts for the principal purpose of discovering and
developing future gold prospects, with Cyprus Amax providing 75 percent and
the Company providing 25 percent of the initial exploration funding for such
prospects. The agreement will terminate on December 31, 1997 unless extended
by both parties.
Pursuant to the Services Agreement, the Company and Cyprus Amax provide a
variety of managerial and other services to each other at full cost. For 1995,
the Company was charged approximately $4.3 million, including the cost of
insurance coverage for the Company, and Cyprus Amax was charged approximately
$0.6 million, including a $0.4 million reimbursement for services provided by
the Company for the Kubaka project.
The Company and Cyprus Amax are parties to the Employee Transfer Agreement
which facilitates the transfer of employees between the companies with minimal
effect on an employee's benefits.
Pursuant to the Net Operating Loss Agreement, the Company agreed to allow
Cyprus Amax to use the Company's net operating loss generated in 1993 which
resulted in a refund of taxes paid by Cyprus Amax in a prior year, and Cyprus
Amax agreed to reimburse the Company at such time that the Company would have
received the benefit for the 1993 net operating loss had the Company elected
to carry it forward.
ELECTION OF DIRECTORS
The Company currently has six directors, each of whom is elected to serve
until the next annual meeting of stockholders or until his successor is duly
elected and qualified. The Board of Directors has nominated Messrs. Milton H.
Ward, Allen Born, Gerald J. Malys, Rockwell A. Schnabel, Vernon Taylor, Jr.
and Russell L. Wood for election as directors at the Annual Meeting and to
serve until the 1997 Annual Meeting or until their successors are duly elected
and qualified. It is not anticipated that any nominee will become unavailable
for any reason, but if that should occur before the Annual Meeting, the
persons named in the enclosed proxy reserve the right to substitute another
person of their choice as nominee in his place or to vote for such lesser
number of directors as may be prescribed by the Board of Directors in
accordance with the Company's Certificate of Incorporation and By-Laws.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR EACH OF THE
NOMINEES.
3
INFORMATION CONCERNING DIRECTOR NOMINEES
Milton H. Ward, age 63, has been Chairman of the Board of Directors and
Chief Executive Officer of the Company since November 1993. Mr. Ward also
served as President of the Company from November 1993 to February 1994. Mr.
Ward has been Chairman, President and Chief Executive Officer of Cyprus Amax
since May 1992. Mr. Ward served as a director, President and Chief Operating
Officer of Freeport-McMoRan Inc. from 1983 until 1992 and Chairman and Chief
Executive Officer of Freeport McMoRan Copper & Gold Inc. from 1984 until 1992.
Mr. Ward is a director of the National Mining Association.
Allen Born, age 62, has been a director of the Company since May 1987. Mr.
Born has served as Chairman and Chief Executive Officer of Alumax Inc. since
November 1993. He served as Chairman of AMAX Inc. from June 1988 to November
1993, as Chief Executive Officer of AMAX Inc. from January 1986 to November
1993 and as President and Chief Operating Officer of AMAX Inc. from June 1985
through July 1991. Mr. Born is a director and Vice Chairman of the Board of
Directors of Cyprus Amax, a director of AK Steel and the International Primary
Aluminium Institute and the Chairman of the Aluminum Association.
Gerald J. Malys, age 51, has been a director of the Company since November
1993. Mr. Malys has been Senior Vice President and Chief Financial Officer of
Cyprus Amax since August 1989. He served as Senior Vice President, Financial
and Information Services of Cyprus Amax from August 1988 to July 1989 and Vice
President and Corporate Controller of Cyprus Amax from 1985 to August 1988.
Rockwell A. Schnabel, age 59, has been a director of the Company since March
1994. Ambassador Schnabel is Chairman of Trident Capital, L.P. and former
Deputy Secretary of the United States Department of Commerce. Mr. Schnabel
served as Deputy Commerce Secretary in 1991 and 1992, Acting Secretary of
Commerce from December 1991 to March 1992, and Under Secretary of Commerce in
1989 and 1990. Mr. Schnabel served as the United States Ambassador to the
Republic of Finland from 1986 to 1989. Mr. Schnabel was in the investment
banking field from 1960 to 1986, and served as President of Bateman Eichler
Hill Richards Inc. (investment bankers-member NYSE) from 1980 to 1982. He is a
director of Cyprus Amax, International Game Technology and CSG Systems Inc.
Vernon Taylor, Jr., age 80, has been a director of the Company since May
1987. Mr. Taylor has served as President and Director of Westhoma Oil Company
and Peerless, Inc. since 1966. He served as a director of Cyprus Amax from
July 1985 to May 1993.
Russell L. Wood, age 68, has been a director of the Company since May 1987.
Mr. Wood has been a mining consultant and independent businessman since May
1989. He served as President and Chief Executive Officer of Asamera Minerals
Inc. from May 1990 to February 1992 and as President of Copper Range Company
from 1985 to 1989. He is a member of the Board of Trustees of the Colorado
School of Mines, a trustee of the Western Museum of Mining and Industry in
Colorado Springs and a director of Emerging Markets Gold Fund.
4
COMPLIANCE WITH EXCHANGE ACT SECTION 16(A)
The Company's officers and directors and persons who are beneficial owners
of more than 10 percent of the Common Stock are required to file reports of
their holdings and transactions in the Common Stock with the Securities and
Exchange Commission and to furnish the Company with copies of such reports.
Based primarily upon its review of the copies it has received and upon written
representations it has obtained from some of these persons, the Company
believes that during the fiscal year ended December 31, 1995, the Company's
officers, directors and 10 percent beneficial owners have complied with all
such filing requirements except as set forth in this paragraph. Mr. Ward,
Chairman and Chief Executive Officer of the Company, was late in reporting one
Form 4 transaction in the Company's Common Stock in 1995.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors held eight meetings in 1995. No director attended
fewer than 75 percent of the aggregate of (i) the number of Board meetings and
(ii) the number of meetings of Board committees on which he served.
Audit Committee. The Audit Committee, which met twice in 1995, is composed
of Vernon Taylor, Jr. and Russell L. Wood. The Audit Committee recommends to
the Board of Directors the independent accounting firm responsible for
conducting the annual audit of the Company's accounts and reviews the nature
and scope of audit examinations, the financial organization and accounting
practices of the Company and the qualifications and performance of its
internal auditors. In addition, the Audit Committee recommends to the Board of
Directors policies concerning avoidance of employee conflicts of interest and
avoidance of conflicts of interest between the Company and Cyprus Amax and
reviews the administration of such policies.
Compensation Committee. The Compensation Committee, which met once in 1995,
has as its members Allen Born, Gerald J. Malys, Rockwell A. Schnabel and
Vernon Taylor, Jr. and is responsible for establishing, implementing and
monitoring the Company's policies and plans for executive development,
succession planning and compensation of officers and key employees of the
Company.
Nominating Committee. The Nominating Committee, which met once in 1995, has
as its members all directors. The Nominating Committee reviews and makes
recommendations concerning the qualifications of prospective Board members.
The Nominating Committee does not consider individuals nominated by
stockholders for election to the Board of Directors. However, under the By-
Laws, nominations for the election of directors may be made by any stockholder
entitled to vote in the election of directors generally, but only if written
notice of such stockholder's intent to make such nominations has been received
by the Secretary of the Company at 9100 East Mineral Circle, Englewood,
Colorado 80112 not later than (i) with respect to an election to be held at an
annual meeting of stockholders, 90 days prior to the anniversary date of the
immediately preceding annual meeting, and (ii) with respect to an election to
be held at a special meeting of stockholders for the election of directors,
the close of business on the tenth day following the date on which notice of
such meeting is first given to stockholders. Each such notice shall set forth:
(a) the name and address of the stockholder who intends to make the nomination
and of the person or persons to be nominated; (b) a representation that the
stockholder is a holder of record of stock of the Company entitled to vote at
such meeting and intends to appear in person or by proxy at the meeting to
nominate the person or persons specified in the notice; (c) the number of
shares of the Common Stock owned of record and
5
beneficially by the stockholder; (d) a description of all arrangements or
understandings between the stockholder and each nominee and any other person
or persons (naming such person or persons) pursuant to which the nomination or
nominations are to be made by the stockholder; (e) such other information
regarding each nominee proposed by such stockholder as would be required to be
included in a proxy statement filed pursuant to the proxy rules of the
Securities and Exchange Commission; and (f) the consent of each nominee to
serve as a director of the Company. The presiding officer of the meeting may
refuse to acknowledge the nomination of any person not made in compliance with
the foregoing procedure.
COMPENSATION OF DIRECTORS
For their services, all directors (except Mr. Ward) receive an annual
retainer of $15,000, and a $1,000 fee for attendance at meetings of the Board
of Directors. Members of committees of the Board of Directors (except Mr.
Ward) are compensated at the rate of $600 per committee meeting attended,
while committee chairmen receive $1,000 per meeting attended. As an officer of
the Company, Mr. Ward is eligible to participate in the Amax Gold Inc. 1992
Stock Option Plan (the "Stock Option Plan") and the Amax Gold Inc. Performance
Share Plan (the "Performance Share Plan").
Under the Stock Grant Plan for Nonemployee Directors, on the day following
the annual meeting of stockholders in each year, each director who is not then
an officer or employee of the Company or any of its subsidiaries will be
granted 1,500 shares of Common Stock, until a maximum of 100,000 shares in the
aggregate have been granted. As of March 1, 1995, a total of 15,000 shares had
been granted to five directors.
The Company has a Deferred Compensation Plan for Directors (the "Deferred
Compensation Plan"), under which any director who is not an employee of the
Company may elect to defer all or a portion of his director's fees. Amounts
deferred under the Deferred Compensation Plan are credited to a participant's
account in the form of a right to receive shares of the Common Stock at the
closing market price on the Composite Tape of the New York Stock Exchange on
the date such participant would have received such compensation had a deferral
election not then been in effect. Distributions are made to participants upon
or following termination of service as a director. Messrs. Born, Malys,
Schnabel and Wood have elected to participate in the Deferred Compensation
Plan.
COMPENSATION OF EXECUTIVE OFFICERS
The following compensation table sets forth information for the years
indicated concerning the compensation of the chief executive officer and each
of the four other most highly compensated executive officers of the Company.
6
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
------------------------------
ANNUAL
COMPENSATION AWARDS PAYOUTS
--------------------- -------------------- ---------
RESTRICTED LONG TERM
STOCK INCENTIVE ALL OTHER
NAME AND FISCAL SALARY BONUS AWARDS OPTIONS/ PLAN COMPENSA-
PRINCIPAL POSITION YEAR $ $ $(A) SARS #(B) PAYOUTS $ TION $(C)
- ----------------------- ------ ------- ------ ---------- --------- --------- ---------
Milton H. Ward(D) 1995 267,707 -- -- 75,000 -- --
Chairman and 1994 211,611 -- -- 40,000 -- --
Chief Executive Officer 1993 -- -- -- -- -- --
Roger A. Kauffman 1995 246,882 75,000 119,625 60,000 -- 10,500
President and 1994 197,087 70,000 54,000 95,000 -- 7,050
Chief Operating Officer
Mark A. Lettes 1995 145,000 23,500 55,825 18,750 -- 5,850
Vice President and 1994 130,000 24,500 45,000 55,000 -- 10,694
Chief Financial Officer 1993 112,350 29,458 -- -- -- 14,266
Deborah J. Friedman 1995 150,000 20,500 50,750 14,500 -- 6,377
Vice President, General 1994 48,336 22,000 24,000 19,500 -- --
Counsel and Secretary
Neil K. Muncaster 1995 135,000 18,000 47,125 15,000 -- 6,075
Vice President 1994 129,000 19,350 25,200 39,500 -- 5,805
1993 129,000 33,824 -- -- 108,445 63,148
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(A) Awards of restricted stock were made under the Performance Share Plan in
December 1995. As of the end of fiscal 1995, the aggregate restricted
stock holdings of the named executives totaled 63,100 shares with a fair
market value of $457,475, based on the closing price of $7.25 per share on
December 29, 1995. Such holdings include $184,875 (25,500 shares) for Mr.
Kauffman; $110,200 (15,200 shares) for Mr. Lettes; $84,825 (11,700 shares)
for Ms. Friedman; and $77,575 (10,700 shares) for Mr. Muncaster. The
actual value realized, if any, will depend upon the amount of the stock in
respect of which restrictions lapse and the market price of such stock
when sold. Dividends, to the extent declared by the Board of Directors,
will be paid on the restricted stock.
(B) These amounts represent options to purchase shares of Common Stock awarded
under the Stock Option Plan.
(C) The 1995 amounts shown include employer contributions to the Thrift Plan
for Employees of Amax Gold Inc. and Its Subsidiaries (the "Thrift Plan")
in the following amounts: $6,750 for Mr. Kauffman; $5,850 for Mr. Lettes;
$6,377 for Ms. Friedman; and $6,075 for Mr. Muncaster. The 1995 amount
shown for Mr. Kauffman also includes $3,750 in employer contributions
allocated to Mr. Kauffman through the Employee Deferred Compensation Plan.
(D) Amounts shown represent payments made by the Company to Cyprus Amax in
respect of a portion of Mr. Ward's base salary and benefits attributable
to his service as an officer of the Company.
7
In connection with a change of control of the Company in 1993, Mr. Muncaster
relinquished his rights under a corporate separation policy and agreed to
continue employment for a minimum of two years. The Company agreed to provide
Mr. Muncaster with a severance payment of $200,000 upon termination of his
employment at any time after such two year period. Mr. Muncaster has announced
his intention to retire on May 1, 1996 and will be eligible to receive this
payment at such time.
Option/SAR Grants in the Last Fiscal Year
The following table sets forth certain information concerning stock options
granted during 1995 under the Stock Option Plan to the chief executive officer
and each of the four other most highly compensated executive officers. The
potential realizable value at assumed annual rates of stock price appreciation
for the term of the options shown below are presented pursuant to rules of the
Securities and Exchange Commission. The Company is not aware of any model or
formula which will determine with reasonable accuracy a present value for
stock options based on future unknown factors. The actual amount, if any,
realized upon the exercise of stock options will depend upon the market price
of the Common Stock relative to the option exercise price at the time of
exercise. There is no assurance that the potential realizable values of stock
options reflected in this table actually will be realized.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
POTENTIAL
REALIZABLE
VALUE AT
ASSUMED ANNUAL
RATES OF STOCK
INDIVIDUAL GRANTS PRICE
------------------------------------------------- APPRECIATION
% OF TOTAL FOR OPTION TERM
OPTIONS/SARS ---------------
GRANTED TO EXERCISE
OPTIONS/SARS EMPLOYEES OR BASE
GRANTED IN FISCAL PRICE EXPIRATION
NAME (#)(A) YEAR(B) ($/SHARE)(C) DATE 5%($) 10%($)
- ------------------- ------------ ------------ ------------ ---------- ------- -------
Milton H. Ward 75,000 21.40 7.25 12/13/05 341,961 866,597
Roger A. Kauffman 10,000 2.85 4.69 2/15/05 29,479 74,707
50,000 14.27 7.25 12/13/05 227,974 577,732
Mark A. Lettes 18,750 5.35 7.25 12/13/05 85,490 216,649
Deborah J. Friedman 14,500 4.14 7.25 12/13/05 66,113 167,542
Neil K. Muncaster 15,000 4.28 7.25 12/13/05 68,392 173,319
- --------
(A) All options are granted with an alternative settlement method under which,
in the Company's discretion, the option holder may exercise the option as
if it were a stock appreciation right.
(B) The percentage calculation is based on a total of 350,400 options granted
in 1995.
(C) The exercise price for each grant is equal to 100 percent of the fair
market value of Common Stock on the grant date. All options vest two years
after the date of grant and have a term of ten years, subject to earlier
termination in certain events related to termination of employment.
8
Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year End
Option/SAR Values
The following table sets forth information concerning stock options granted
to the chief executive officer and each of the four most highly compensated
executive officers which remain unexercised at December 31, 1995. The actual
amount, if any, realized upon exercise of a stock option will depend upon the
market price of the Common Stock relative to the option exercise price at the
time of exercise. There is no assurance that the values of unexercised in-the-
money stock options reflected in this table will be realized.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR* AND FY END OPTION/SAR
VALUES
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN-
OPTIONS/SARS AT FY END THE-MONEY OPTIONS/SARS
(#) AT FY END ($)
------------------------- -------------------------
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
------------------- ------------------------- -------------------------
Milton H. Ward 0/115,000 0/42,400
Roger A. Kauffman 0/155,000 0/68,900
Mark A. Lettes 18,000/73,750 0/31,800
Deborah J. Friedman 0/34,000 0/20,670
Neil K. Muncaster 15,000/54,500 0/20,670
- --------
*There were no option/SAR exercises during 1995.
Pension and Benefits
The Retirement Plan for Salaried Employees of the Company (the "Retirement
Plan") covers executive officers and most other salaried employees. The amount
of annuity a retiring employee will receive on a single life basis is
determined under the formula set forth below. Upon retirement, a married
employee receives a reduced annuity payment that continues after death to
cover the surviving spouse, unless the employee and the spouse elect one of
the alternate options of equivalent actuarial value. The benefit formula for
service on or after July 1, 1994 is: 1.7 percent of annual earnings (base
salary plus bonus) received by the employee for service during each year after
1995, plus 1.7 percent of the employee's average annual earnings from 1991
through 1995 multiplied by the employee's service from July 1, 1994 through
December 31, 1995, less 1.1 percent of the Social Security offset multiplied
by the total years of service credited before January 1, 1996, and after June
30, 1994, not to exceed 35 years. The benefit formula for service prior to
July 1, 1994 provided benefits that were slightly higher than those provided
under the new plan formula and will remain in effect with respect to years of
service prior to July 1, 1994. In those cases where the amounts payable under
the Retirement Plan exceed the annual pension limitations imposed by the
Internal Revenue Code of 1986, as amended (the "Code"), such excess will be
paid from the Company's Excess Benefit Plan (the "Excess Plan"). Benefits
payable under the Retirement Plan are also subject to reduction to the extent
that participants receive payments pursuant to other Company-sponsored pension
or retirement plans that have been suspended, discontinued or otherwise
terminated. The amounts shown in the table below reflect the aggregate of
payments under both the Retirement Plan and the Excess Plan.
9
The estimated annual benefits payable upon retirement at normal retirement
age are $80,331 for Roger A. Kauffman; $94,066 for Mark A. Lettes; $59,616 for
Deborah J. Friedman; and $48,862 for Neil K. Muncaster. The foregoing
estimates are calculated by using salary and bonus amounts actually received
for the years from 1991 to 1995 and estimating base salary and bonus for
future years to be equal to 1995 base salary and bonus amounts.
The five year period 1991 through 1995 currently used in the benefit formula
described above may be rolled forward by the Board of Directors. The table
below provides information on retirement benefits (subject to reduction by a
percentage of Social Security benefits), assuming that the formula is applied
to average annual remuneration during the five years prior to retirement:
PENSION PLAN TABLE
ESTIMATED ANNUAL PENSION FOR YEARS OF CREDITED SERVICE
FIVE YEAR -----------------------------------------------------------
AVERAGE ANNUAL 5 10 15 20 25 30 35
EARNINGS YEARS YEARS YEARS YEARS YEARS YEARS YEARS
- -------------- ------- ------- ------- -------- -------- -------- --------
150,000 12,750 25,500 38,250 51,000 63,750 76,500 89,250
200,000 17,000 34,000 51,000 68,000 85,000 102,000 119,000
250,000 21,250 42,500 63,750 85,000 106,250 127,500 148,750
300,000 25,500 51,000 76,500 102,000 127,500 153,000 178,500
350,000 29,750 59,500 89,250 119,000 148,750 178,500 108,250
The amounts above are payable upon retirement between ages 62 and 65. For
retirement below age 62, the annual annuity amounts are reduced as provided in
the Retirement Plan. At December 31, 1995, the years of credited service under
the Retirement Plan for Mr. Kauffman, Mr. Lettes, Ms. Friedman, and Mr.
Muncaster were two years, 16 years, one year, and 14 years, respectively. For
purposes of determining benefits under the Retirement Plan, covered
compensation for these individuals includes the amounts shown in the "Salary"
and "Bonus" columns of the Summary Compensation Table with certain minor
adjustments. Mr. Ward does not participate in the Company's Retirement Plan,
but is covered by the Cyprus Amax Retirement Plan for Salaried Employees.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of Messrs. Born, Malys, Schnabel and
Taylor, with Mr. Born serving as Chairman. Mr. Born is Vice Chairman of Cyprus
Amax. Mr. Malys is Senior Vice President and Chief Financial Officer of Cyprus
Amax. Mr. Schnabel serves as a director of Cyprus Amax. Mr. Ward is Chairman,
President and Chief Executive Officer of Cyprus Amax. Mr. Ward is compensated
by Cyprus Amax and the Company reimburses Cyprus Amax for a portion of his
base salary and benefits attributable to his services as an officer of the
Company. None of the present or former members of the Company's Compensation
Committee served on the Cyprus Amax Compensation Committee, and no executive
officers of the Company served on the Cyprus Amax Compensation Committee.
10
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's executive compensation program is administered by the
Compensation Committee. As part of its duties, the Compensation Committee
reviews compensation levels and evaluates the performance of executive
management. The Compensation Committee also administers the Company's various
incentive plans.
Compensation Philosophy. The Company's compensation philosophy is to (i)
provide a program that will be able to attract, select and retain high caliber
managerial and technical talent, (ii) assess and develop its personnel to
succeed to key positions throughout the Company, (iii) provide compensation
opportunities that are competitive with those provided by other gold mining
companies, and (iv) create a balance between short term performance measures
and long term strategic direction and decisions through long term incentive
programs which are linked to stockholder value.
The Company's compensation program for executive officers consists of base
salary, annual incentives and long term incentives which are tied to a review
of the individual performance of each executive officer, the Company's
performance, overall business and economic conditions, and compensation data
for companies competing for the same executive talent.
The Compensation Committee is assisted in its review and evaluation by
Strategic Compensation Associates and the Hay Group, executive compensation
consultants. The consultants provide advice to the Compensation Committee
generally, with particular emphasis on the competitiveness of compensation
paid to executive officers. In so doing, the consultants review survey data
regarding compensation practices and payments to executives of other major
North American gold mining companies and the relationship of executive pay to
Company performance and stockholder value. For 1995, the major survey data was
collected and compiled by the Hay Group in its Executive Compensation Report
for Gold Mining Companies. Companies included in the Hay Group survey were:
American Gold Resources Corporation, Cambior Inc., Barrick Gold Corporation,
Coeur d'Alene Mines Corporation, Echo Bay Mines Ltd., FMC Gold Company, Hecla
Mining Company, Homestake Mining Company, Independence Mining Company, Newmont
Mining Corporation, Pegasus Gold Inc., Placer Dome Inc. and Santa Fe Pacific
Gold Corporation. Some of these companies are different from the companies
selected by the Company as peer companies for preparing its performance graph
included in this Proxy Statement. The companies included in the Hay Group
survey are representative of the gold mining industry as a whole. The
Compensation Committee believes that the Company's most direct competitors for
executive talent are not necessarily the companies that should be included in
a peer group established to compare stockholder returns. For purposes of its
performance graph, the Company selected a smaller number of mining companies
that are somewhat larger than the Company. See--"Performance Graph."
Compensation of the executive officers, other than the Company's chief
executive officer, was determined pursuant to the Company's compensation
policy.
Base Salary. The base salary for each executive officer, excluding the chief
executive officer, is established initially by the Compensation Committee to
be near the median base salary in the competitive marketplace (based on the
Hay Group survey) and is adjusted based on the Compensation Committee's
assessment of the executive officer's performance and length of time in a
certain position and the overall financial condition of the Company. Base
salaries are reviewed each year by the Compensation Committee.
11
Annual Incentive Program. Annual incentive awards are contingent on the
Compensation Committee's year end assessment of the performance of both the
Company and the executive officer. Achievement of the Company's performance
goals is not applied as part of a strict formula to determine the level of
incentive awards, but, instead, is used by the Compensation Committee as a
guideline in determining the awards. Although the Company reported a net loss
of $23 million for 1995, the Company completed significant financing
activities, including a $250 million financing arrangement for its Fort Knox
Project in Alaska. The Company made significant progress on construction of
two major new gold mines: Refugio in Chile and Fort Knox. The Company reduced
cash operating costs. Additionally, the Company entered into an agreement to
acquire, subject to stockholder approval, a 50 percent interest in the Kubaka
Gold Project in the Russian Federation, which would increase the Company's
total reserves by approximately 18 percent. Due to the overall 1995 financial
performance of the Company, annual incentive bonuses were awarded at
approximately 50 percent of target amounts, with adjustments based on the
Compensation Committee's subjective view of individual performance after
consultation with the Company's executive management.
Long Term Equity Compensation. Equity participation is intended to create a
focus by executive management on key performance measures that drive
stockholder value. Therefore, the Compensation Committee gave added
significance to long term equity compensation in the form of stock options and
long term performance based restricted stock awards. In 1995, long term
incentive awards, including stock options and restricted stock awards, were
granted, on average, slightly above the median levels for such awards among
competitive companies in the gold industry. Such grants reflect the
Compensation Committee's view of the relative importance of the individual's
position, his or her current performance and continuing contribution and
prospective impact on the Company's future success, as well as the creation of
stockholder value.
Long term performance based restricted stock awards were granted in December
1995 to be effective January 1, 1996 under the Performance Share Plan.
Restrictions on shares of Common Stock will lapse upon completion of
successive three year performance periods to the extent that there is
favorable comparison in terms of total stockholder return with competitive
companies in the gold industry as measured by a peer group similar to the
group in the Hay Group survey. Such awards could be deferred, accelerated or
otherwise adjusted at the sole discretion of the Compensation Committee based
on strategic and comparative performance assessment or other factors deemed
relevant by the Compensation Committee. Such shares could be delivered on an
accelerated basis or forfeited as determined by the Compensation Committee in
certain circumstances.
Compensation of the Chief Executive Officer. Mr. Ward, Chairman and Chief
Executive Officer of the Company, is compensated by Cyprus Amax, and the
Company reimburses Cyprus Amax for a portion of his base salary and benefits
attributable to his services as an officer of the Company. In determining the
compensation to be awarded to Mr. Ward for his services to the Company, the
Compensation Committee considered the salaries paid to chief executive
officers at competitive companies and the base salary payable to Mr. Ward
under an employment agreement between Cyprus Amax and Mr. Ward. Mr. Ward's
employment agreement with Cyprus Amax establishes a base salary and a bonus
targeted at 100 percent of base salary but does not address reimbursement of
Mr. Ward's salary and benefits by Amax Gold. For 1995, Mr. Ward received a
base salary of $900,000 from Cyprus Amax. The Compensation Committee also
recognized the significant achievements made during 1995, the second full year
Mr. Ward served as Chairman and Chief Executive Officer of the Company,
including the Company's completion of key financing activities, its
significant progress on
12
construction of two new gold mines and the Company's acquisition, subject to
stockholder approval, of a new gold project in Russia, which will increase the
Company's reserves significantly. The Compensation Committee also considered
the estimated amount of Mr. Ward's time spent on matters relating to the
Company. Based on these factors and the subjective determination of the
Compensation Committee, approximately 25 percent of Mr. Ward's base salary and
benefits paid by Cyprus Amax was reimbursed by the Company in 1995.
Mr. Ward is eligible to participate in the Company's Stock Option Plan and
Performance Share Plan. The Compensation Committee awarded to Mr. Ward 75,000
stock options, an amount approximately equal to the median of the stock
options granted to chief executive officers at competitive companies, based on
the amount of Mr. Ward's time allocated to the Company and the subjective
determination of the Compensation Committee.
Section 162(m) Compliance. Under Section 162(m) of the Internal Revenue Code
of 1986, as amended, federal income tax deductions of publicly traded
companies may be limited to the extent total compensation (including base
salary, annual bonus, restricted stock awards, stock option exercises and non
qualified benefits) for certain executive officers exceeds $1 million in any
one year. The Compensation Committee intends to design the Company's
compensation programs so that the total compensation paid to any employee will
not exceed $1 million in any one year.
As the Company moves forward in its efforts to create stockholder value, the
Compensation Committee will continue to review, monitor and evaluate the
Company's program for executive compensation to assure that it is effective in
support of the Company's strategy to attract, retain and motivate talented
executives, properly reflects changes in accounting rules and tax laws and
appropriately compensates executives for their performance on behalf of the
Company and its stockholders.
Allen Born
Gerald J. Malys
Rockwell A. Schnabel
Vernon Taylor, Jr.
13
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
As of March 14, 1996, the following table sets forth the amount of all
equity securities of the Company and Cyprus Amax that are beneficially owned
by each director of the Company, each of the executive officers named in the
Summary Compensation Table above, and all directors and executive officers of
the Company as a group. A person is considered to "beneficially own" any
shares (i) over which such person exercises sole or shared voting or
investment power or (ii) of which such person has the right to acquire
beneficial ownership at any time within 60 days (e.g., through the exercise of
stock options). Unless otherwise indicated, each person has sole voting and
investment power with respect to the shares set forth opposite his or her
name.
NUMBER OF SHARES NUMBER OF SHARES NUMBER OF
OF THE OF THE SHARES OF
COMPANY COMMON COMPANY SERIES B CYPRUS AMAX
NAME OF BENEFICIAL OWNER STOCK(1)* PREFERRED STOCK* COMMON STOCK*
------------------------ ---------------- ---------------- -------------
Milton H. Ward 20,000 -- 913,818(2)
Allen Born 13,138 -- 97,109(2)
Gerald J. Malys 5,000 -- 187,342(2)(3)
Rockwell A. Schnabel 28,153 2,500 16,892(4)
Vernon Taylor, Jr. 23,160(5) 3,000(5) 24,094(6)
Russell L. Wood 3,000 -- --
Roger A. Kauffman 66,488(7) 200 --
Mark A. Lettes 45,552(7) -- --
Deborah J. Friedman 9,084 400 26,868(2)
Neil K. Muncaster 46,652(7) 500 1,003
All directors and executive
officers as a group (13 per-
sons) 323,945(8) 7,100 1,272,126(9)
- --------
*All amounts shown are less than one percent of the class.
(1) Each share of $3.75 Series B Convertible Preferred Stock is convertible
into 6.061 shares of Common Stock. Shares of Common Stock include shares
obtainable upon conversion.
(2) Includes shares subject to options exercisable within 60 days: 75,461
shares for Mr. Born; 97,088 shares for Mr. Malys; 632,294 shares for Mr.
Ward; and 21,700 shares for Ms. Friedman.
(3) The amount includes 10,000 shares held by Mrs. Malys.
(4) The amount includes shares held in the Cyprus Amax Non-Employee Director
Deferred Compensation Plan.
(5) The amount includes 1,227 shares of Common Stock and 3,000 shares of $3.75
Series B Convertible Preferred Stock owned by trusts of which Mr. Taylor,
as trustee, has investment or voting power.
(6) The amount includes 12,344 shares of Cyprus Amax Common Stock obtainable
upon conversion of 6,000 shares of $4.00 Series A Convertible Preferred
Stock of Cyprus Amax.
(7) The amounts include shares subject to options exercisable within 60 days:
60,000 shares for Mr. Kauffman; 43,000 shares for Mr. Lettes; and 35,000
shares for Mr. Muncaster.
(8) The amount includes 187,000 shares subject to options exercisable within
60 days.
(9) The amount includes 826,543 shares subject to options exercisable within
60 days.
14
PERFORMANCE GRAPH
The following graph compares the annual percentage change in the Company's
cumulative total stockholder return on Common Stock over the past five years
(assuming reinvestment of dividends at date of payment into Common Stock) with
the cumulative total return on the published Standard & Poor's 500 Stock Index
and the stocks for peer companies (weighting the returns of these peer
companies based on stock market capitalization as of the beginning of the
period). The peer companies selected by the Company for this Proxy Statement
were Battle Mountain Gold Company, Echo Bay Mines Ltd., Hemlo Gold Mines Inc.,
Pegasus Gold Inc. and TVX Gold Inc. Cumulative total stockholder return (on an
assumed initial investment of $100 at December 31, 1989), as determined at the
end of each year, reflects the change in stock price, assuming reinvestment of
dividends.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
[5 YR GRAPH APPEARS HERE]
Dec90 Dec91 Dec92 Dec93 Dec94 Dec95
=======================================================================
S&P 500 COMP-LTD 100 130.47 140.41 154.56 156.60 215.45
AMAX GOLD INC. 100 78.65 58.85 47.39 41.35 49.97
PEER GROUP 100 93.39 69.50 149.57 132.22 128.02
15
RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors, pursuant to the recommendation of the Audit
Committee, unanimously recommends the selection of Price Waterhouse LLP to
serve as independent accountants for the Company for its 1996 fiscal year.
In March 1994, Price Waterhouse LLP replaced Coopers & Lybrand LLP who had
been the Company's independent accountants since the Company's inception in
1987. Price Waterhouse LLP are the independent accountants for Cyprus Amax and
have served as such since 1985. The change was made to realize certain
synergies between the Company and Cyprus Amax.
The report of Coopers & Lybrand LLP on the financial statements for the 1993
fiscal year and the report of Price Waterhouse LLP for the 1994 and 1995
fiscal years contained no adverse opinion or disclaimer of opinion and were
not qualified or modified as to uncertainty, audit scope or accounting
principles. Also, in connection with its audit for the 1993 fiscal year, there
were no disagreements with Coopers & Lybrand LLP on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure, which disagreements if not resolved to the satisfaction of Coopers
& Lybrand LLP would have caused them to make reference thereto in their report
on the financial statements for such year. In connection with Price Waterhouse
LLP's audit for the 1994 and 1995 fiscal years, there have been no
disagreements with Price Waterhouse LLP on any matter of accounting principles
or practices, financial statement disclosure, or auditing scope or procedure.
During the two most recent fiscal years, there have been no reportable
events (as defined in Regulation S-K Item 304(a)(1)(v)). Moreover, during the
two most recent fiscal years, the Company has not consulted with Price
Waterhouse LLP on items which (1) were or should have been subject to
Statement of Auditing Standards No. 50 or (2) concerned the subject matter of
a disagreement or reportable event with the former auditor (as described in
Regulation S-K Item 304(a)(2)).
Neither the firm of Price Waterhouse LLP nor any of its partners has a
direct, or material indirect, financial interest in the Company or any of its
subsidiaries. Representatives of Price Waterhouse LLP will be present at the
Annual Meeting with the opportunity to make a statement if they desire to do
so and to respond to appropriate stockholder questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THIS PROPOSAL.
16
OTHER MATTERS
The Board of Directors is not aware of any other matters that may properly
come before the meeting. Should any such matters arise, however, it is the
intention of the persons named in the enclosed form of proxy to vote said
proxy in accordance with their judgment on such matters.
PROPOSALS FOR 1997 ANNUAL MEETING
The Company anticipates that the 1997 Annual Meeting of Stockholders will be
held on or about May 6, 1997. The exact date, time and place for such meeting
has yet to be determined. A stockholder who intends to present a proposal at
that Annual Meeting must submit the written text of the proposal so that it is
received by the Company at its principal executive offices no later than
November 27, 1996, in order for the proposal to be considered for inclusion in
the Company's Proxy Statement for that meeting.
By order of the Board of Directors,
Deborah J. Friedman
Vice President, General Counsel
and Secretary
March 29, 1996
AMAX GOLD'S ANNUAL REPORT ON FORM 10-K FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION (WITHOUT EXHIBITS) MAY BE OBTAINED AT NO CHARGE BY ANY
STOCKHOLDER ENTITLED TO VOTE AT THE MEETING WHO WRITES TO: SECRETARY, AMAX
GOLD INC., 9100 EAST MINERAL CIRCLE, ENGLEWOOD, COLORADO 80112. EXHIBITS TO
THE FORM 10-K ARE ALSO AVAILABLE AT A COST OF TWENTY-FIVE CENTS PER PAGE.
17
AMAX GOLD INC.
THIS PROXY/VOTING INSTRUCTION CARD IS SOLICITED
ON BEHALF OF THE BOARD OF DIRECTORS
OR THE TRUSTEE NAMED BELOW
The undersigned hereby appoints Milton H. Ward, Roger A. Kauffman and Deborah
J. Friedman, and each or any of them, the proxies and agents of the
undersigned, with full power of substitution, to represent and vote in
accordance with the instructions on the reverse side all the shares of the
Common Stock of Amax Gold Inc. held of record by the undersigned at the close
of business on March 14, 1996 at the Annual Meeting of the Stockholders of
Amax Gold Inc. to be held at the offices of Amax Gold Inc. at 9100 East
Mineral Circle, Englewood, Colorado 80112, on April 30, 1996 at 10:00 a.m.
(Denver time) or at any adjournment thereof, and directs the Trustee of the
Thrift Plan for Employees of Amax Gold Inc. and Its Subsidiaries (the "Plan"),
with respect to shares of Common Stock held for the benefit of the
undersigned, to vote in person or by proxy at such Annual Meeting, all shares
held by or for the benefit of the undersigned in accordance with such
instructions. The Trustee of the Plan will vote unallocated and undirected
shares of the Common Stock held by the Plan in direct proportion to the voting
of shares for which instructions have been received.
IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2,
EXCEPT AS NOTED ABOVE WITH RESPECT TO THE PLAN.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
ELECTION OF DIRECTORS. NOMINEES:
MILTON H. WARD, ALLEN BORN, GERALD J. MALYS, ROCKWELL A. SCHNABEL, VERNON
TAYLOR, JR. AND RUSSELL L. WOOD
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ONE OR MORE NOMINEES, WRITE
THE NAME OF EACH NOMINEE FOR WHOM AUTHORITY IS WITHHELD IN THE SPACE PROVIDED
ON THE REVERSE SIDE. UNLESS AUTHORITY TO VOTE FOR ALL NOMINEES IS WITHHELD, A
VOTE FOR THE ELECTION OF DIRECTORS WILL BE DEEMED TO CONFER AUTHORITY TO VOTE
FOR ANY NOMINEE WHOSE NAME IS NOT WRITTEN IN THE SPACE PROVIDED ON THE REVERSE
SIDE AND FOR ANOTHER NOMINEE IF ANY OF THE NAMED NOMINEES IS UNABLE TO SERVE
OR FOR GOOD CAUSE WILL NOT SERVE.
SEE REVERSE SIDE
X PLEASE MARK YOUR COMMON DIVIDEND REINVESTMENT
VOTES AS IN THIS
EXAMPLE.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1 AND 2.
- --------------------------------------------------------------------------------
FOR [_] WITHHELD FOR AGAINST ABSTAIN
1.Election of [_] 2. Appointment of [_] [_] [_]
Directors (see Price Waterhouse
reverse) LLP as independent
accountants.
For, except vote withheld for the following nominee(s):
- -------------------------------------------------------
3. OTHER MATTERS. In their discretion, the proxies are authorized to vote upon
other matters that may come before the meeting and upon matters incident to the
conduct of the meeting.
SIGNATURE(S) _________________________________ DATE ____________
SIGNATURE(S) _________________________________ DATE ____________
NOTE: Please sign exactly as your name appears on this proxy. Joint owners
should each sign. If signing as attorney, executor, administra-tor, agent,
trustee or guardian, please give full title as such. If signing on behalf of a
corporation, the full corporate name should be indicated and an authorized
corporate officer should sign.