UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
<Table>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
</Table>
Golden Cycle Gold Corporation
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
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GOLDEN CYCLE GOLD CORPORATION
1515 South Tejon
Colorado Springs, Colorado 80906
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
June 5, 2002
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NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders ("Annual
Meeting") of GOLDEN CYCLE GOLD CORPORATION (the "Corporation"), a Colorado
corporation, will be held at the Sheraton Colorado Springs Hotel, Colorado
Springs, Colorado, on June 5, 2002, at 9:00 a.m. (local time) for the following
purposes:
1. To elect five (5) directors of the Corporation to serve until the
next Annual Meeting of Shareholders and until their successors are duly elected
and qualified; and
2. To consider the approval of the 2002 Stock Option Plan pursuant to
which 125,000 shares of the Corporation's Common Stock will be reserved for
issuance pursuant to options to be granted to eligible officers and directors of
the Corporation; and
3. To appoint KPMG, LLP independent auditors to audit the books and
records of the Corporation at the close of the current year; and
4. To consider a resolution which the Company has been informed will be
proposed by a stockholder of the Company; and
5. To consider and transact such other business as may properly come
before the Annual Meeting or any adjournment thereof,
all as more fully set forth in the accompanying Proxy Statement.
The Board of Directors has fixed the close of business on April 23,
2002 as the record date for the determination of shareholders entitled to notice
of and to vote at the Annual Meeting or any adjournment thereof, and only
shareholders of record at the close of business on that date are entitled to
notice of and to vote at the Annual Meeting. The books for transfer of shares of
the Corporation will not be closed.
A copy of the Company's Annual Report for the fiscal year ended
December 31, 2001 is enclosed herewith.
IF YOU DO NOT EXPECT TO BE PRESENT AT THE MEETING, PLEASE MARK, SIGN,
DATE, AND RETURN THE ENCLOSED PROXY.
By Order of the Board of Directors,
Kristin M. Steffey
Secretary
April 27, 2002
GOLDEN CYCLE GOLD CORPORATION
1515 SOUTH TEJON
COLORADO SPRINGS, COLORADO 80906
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PROXY STATEMENT
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ANNUAL MEETING OF SHAREHOLDERS
JUNE 5, 2002
This proxy statement and the accompanying form of proxy are being
mailed on or about April 29, 2002 to the holders of record on April 23, 2002 of
the Corporation's Common Stock, without par value (the "Common Stock"), in
connection with the solicitation of proxies by the Board of Directors of the
Corporation for use at the Annual Meeting to be held for the purposes set forth
in the foregoing Notice of Annual Meeting of Shareholders, or any adjournment
thereof.
Shares of Common Stock represented by properly executed proxies, if
returned in time and not revoked, will be voted in accordance with instructions
contained in the proxy. If no instructions are given with respect to any matter
specified in the Notice of Annual Meeting to be acted upon at the Annual
Meeting, the proxy will be voted for the election of the nominees for election
to the Board of Directors (Proposal No. 1), for the approval of the 2002 Stock
Option Plan (Proposal No. 2), for the appointment of the independent auditors
(Proposal No. 3), and against the shareholder proposal, if presented. The Board
of Directors is not aware of any other matters intended to be presented for
action at the Annual Meeting. If any other matters are properly presented for
action at the Annual Meeting, or if other circumstances not now known make any
of the nominees for election to the Board of Directors unable to serve, it is
the intention of the persons named in the proxy to vote on such matters or for
such other nominees, as the case may be, in their best judgment.
A shareholder who has given a proxy has the power to revoke it by
giving written notice of such revocation to the Corporation's Secretary at any
time prior to the exercise of the proxy, or by requesting the return of the
proxy at the Annual Meeting. A shareholder's presence at the Annual Meeting,
without such written notice of revocation or request for return of the proxy,
will not cause the proxy to be revoked. Any later dated proxy will revoke a
proxy submitted earlier. SHAREHOLDERS WHO DO NOT INTEND TO BE PRESENT AT THE
ANNUAL MEETING ARE URGED TO CONSIDER CAREFULLY THE INFORMATION IN THIS PROXY
STATEMENT AND TO MARK, SIGN, DATE AND RETURN THEIR PROXIES AS SOON AS POSSIBLE.
PROMPT RESPONSE IS HELPFUL.
The cost of solicitation of proxies will be paid by the Corporation. In
addition to solicitation of proxies by use of the mails, certain of the
officers, directors and employees of the Corporation, without extra
remuneration, may solicit proxies personally or by other communication
facilities. Arrangements have been made with brokerage houses and other
custodians, nominees and fiduciaries which are record holders of the
Corporation's Common Stock to forward proxy materials and annual reports to
beneficial owners of such stock, and the Corporation will reimburse such record
holders for their reasonable expenses incurred in providing such services.
Pursuant to the Corporation's By-Laws, the Board of Directors has fixed
the close of business on April 23, 2002 as the record date for determining the
shareholders entitled to notice of and to vote at the Annual Meeting (the
"Record Date"). As of the Record Date, there were outstanding 1,888,450 shares
of Common Stock. The presence in person or by proxy of the holders of a majority
of the outstanding shares is necessary for a quorum. Each share of Common Stock
entitles the holder thereof to one vote. Election of directors is by plurality
vote, with the five nominees receiving the highest vote totals to be elected as
directors. Proposals No. 2, No. 3 and No. 4 require the affirmative vote of a
majority of the shares present in person or represented by proxy at the Annual
Meeting. Abstentions are counted as present in determining whether the quorum
requirement is satisfied, but they have no other effect on voting for election
of directors. Abstentions are the same as a vote against on other matters. In
instances where brokers are prohibited from exercising discretionary authority
for beneficial owners who have not
returned a proxy ("broker non-votes"), those shares will be counted for quorum
purposes; however, broker non-votes will not be included in the vote totals for
any proposal and therefore will have no effect on the vote for any proposal
(including the election of directors).
The Annual Report of the Corporation for the year ended December 31,
2001 is enclosed herewith.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information as to each person who, to
the knowledge of the Board of Directors, was the beneficial owner of more than
five (5%) of the Corporation's Common Stock outstanding as of April 23, 2002.
<Table>
<Caption>
NAME AND ADDRESS NUMBER OF SHARES PERCENT
OF BENEFICIAL OWNER BENEFICIALLY OWNED(1) OF CLASS
------------------- --------------------- --------
MIDAS Fund, Inc. 328,900(2) 17.4%
11 Hanover Square
New York, NY 10005
Taki N. Anagnoston, M.D. 98,443(3) 5.2%
700 R. West 6th Street
Gilroy, California 95020
Melvin L. Cooper 100,850(4) 5.3%
40 E. 78th St., Apt 14C
New York, NY 10021
</Table>
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(1) To the best knowledge of the Corporation, except as indicated below,
each beneficial owner has sole voting and investment power in respect
of such shares.
(2) Does not include an additional 70,500 shares owned by MIDAS Investors
Ltd., a registered investment company whose investment advisor is owned
by the MIDAS Funds, which is also the investment advisor of Midas
Fund, Inc. The information provided here is based on a report on
Schedule 13D dated March 25, 1999.
(3) The indicated number of shares includes 69,416 shares held by a
revocable retirement trust for the benefit of Dr. Anagnoston and of
which Dr. Anagnoston is trustee, 13,850 shares held by a revocable
trust for the benefit of Dr. Anagnoston's wife, of which he and his
wife are trustees, 1,400 shares beneficially owned by Dr. Anagnoston's
wife and 13,777 shares held by a partnership, of which Dr. Anagnoston
and his wife are general partners.
(4) Includes 35,900 outstanding shares beneficially owned by Mr. Cooper and
registered in his name; 24,950 outstanding shares which are held in a
trust of which Mr. Cooper is the trustee and which is revocable by him
at his will and 40,000 shares issuable to Mr. Cooper upon exercise of
options. Mr. Cooper has sole power to vote and dispose of such shares.
2
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Pursuant to the By-Laws of the Corporation, the Board of Directors has
fixed the number of Directors at five. The entire Board of Directors is to be
elected at each annual meeting of shareholders, and each Director is elected to
serve until the next succeeding annual meeting and until his successor is
elected and qualifies. The Board of Directors met three times during 2001. Each
director attended 75% or more of the total meetings of the Board and any
committee of which he is a member.
Management intends to nominate for election at the Annual Meeting the
individuals named in the following table, which sets forth certain information
with respect to each nominee. All of the nominees are currently Directors of the
Corporation and together comprise the entire Board of Directors.
<Table>
<Caption>
SHARES OF COMMON
NAME OF NOMINEE STOCK BENEFICIALLY PERCENT
AGE (YEAR FIRST OWNED AS OF OF CLASS
BECAME DIRECTOR) PRINCIPAL OCCUPATION(1) APRIL 23, 2002(2) OUTSTANDING(3)
- ---------------- ----------------------- ------------------ --------------
Orville E. Anderson Chairman of the Board of the Corporation since 15,000(4) 0.8%
Age 77 (1998) April 1999; Managing Director of Andore PTY Ltd.,
and Australian gold mining exploration company, 1988
to 1993; Director, President and Chief Operating
Officer of Mother Lode Gold Mines Consolidated, a
gold mining exploration and development company;
Director, President and Chief Operating Officer of
Pacific Far East Minerals, Inc., a gold mining
exploration and development company.
Melvin L. Cooper Private investor; formerly Chairman of the Board of 100,850(5) 5.3%
Age 74 (1983) The Union Corporation, a provider of accounts receivable
management and collection services, through January
1998 and for more than five years prior thereto.
Rex H. Hampton Formerly Chairman of the Board of the Corporation 44,002(6) 2.3%
Age 83 (1980) from May 18, 1989 to July 31, 1993 and President
and Chief Executive Officer thereof from August 16,
1980 to July 31, 1993; Brigadier General,
U.S. Army (Ret.)
R. Herbert Hampton President and Chief Executive Officer of the Corporation 30,102(7) 1.6%
Age 55 (1999) since April 1999; Vice President, Finance from
August 1, 1993 to April 1999; Secretary Treasurer of
the Corporation from May 1994 to April 1999; and an
employee of the Corporation since October 1, 1992.
Mr. Hampton served as a Lieutenant Colonel, U.S.
Army, for more than five years prior to joining the
Corporation.
Frank M. Orrell Chairman of the Board of Mother Lode Gold Mines 43,160(8) 2.3%
Age 69 (1989) Consolidated since 1978 and Chief Executive Officer
thereof since 1985; formerly a registered representative
with Orrell and Company, Inc., a stock brokerage firm,
through April 1991; Chairman of the Board of Pacific
Far East Minerals, Inc. since July 1996.
</Table>
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(1) The occupation listed constitutes the principal occupation or
employment of the referenced individual for at
3
least the past five (5) years, except as otherwise indicated.
Correspondence for nominees may be sent to the Company. The address of
the persons named in the chart above is c/o Golden Cycle Gold
Corporation, 1515 South Tejon, Suite 201, Colorado Springs, Colorado
80906.
(2) Except as noted below, each beneficial owner has sole voting power and
sole investment power.
(3) Based on 1,888,450 shares of Common Stock issued and outstanding as of
April 23, 2002. Shares issuable within 60 days from the date of this
Proxy Statement upon exercise of options issued to each Director are
treated as outstanding for the purpose of computing the percentage
ownership of such Director.
(4) Consists solely of shares issuable upon exercise of options.
(5) Includes 35,900 outstanding shares beneficially owned by Mr. Cooper and
registered in his name; 24,950 outstanding shares which are held in a
trust of which Mr. Cooper is the trustee and which is revocable by him
at his will and 40,000 shares issuable to Mr. Cooper upon exercise of
options. Mr. Cooper has sole power to vote and dispose of such shares.
(6) Includes 40,000 shares issuable to Mr. Hampton upon exercise of
options.
(7) Includes 30,000 shares issuable to Mr. R. Herbert Hampton upon exercise
of options.
(8) Includes 1,500 outstanding shares beneficially owned by Mrs. Orrell,
1,660 outstanding shares held by a revocable retirement trust for the
benefit of Mr. Orrell's wife and 40,000 shares issuable to Mr. Orrell
upon exercise of options.
As of April 23, 2002, the officers and directors of the Corporation as
a group beneficially owned 234,714 shares of Common Stock or approximately 12.4%
of such class. The number of shares of Common Stock owned by officers and
directors of the Corporation includes an aggregate of 165,000 shares of Common
Stock which the officers and directors have the right to acquire within 60 days
from the date of this Proxy Statement upon the exercise of options, which shares
are treated as outstanding for the purpose of computing the percentage of
outstanding shares of Common Stock owned by officers and directors as a group.
INFORMATION CONCERNING EXECUTIVE OFFICERS
The Corporation's executive officers are Orville E. Anderson, Chairman
of the Board, R. Herbert Hampton, President, Chief Executive Officer and
Treasurer, and Kristin M. Steffey, Corporate Secretary. Mr. R. Herbert Hampton
is the son of Rex H. Hampton, a director and former officer of the Corporation.
COMMITTEE OF THE BOARD OF DIRECTORS
Pursuant to Paragraph 16 of the Corporation's By-Laws, the Board of
Directors has created an Audit Committee, comprised of Messrs. Frank M. Orrell
(Chairman), Orville E. Anderson and Melvin L. Cooper, which is empowered to
supervise the auditing of the accounts of the Corporation. Its primary duties
and responsibilities are to: monitor the integrity of the Corporation's
financial reporting process and systems of internal controls regarding finance,
accounting, and legal compliance; monitor the independence and performance of
the Corporation's independent auditors; provide an avenue of communication among
the independent auditors, management and the Board of Directors; and performing
other duties and functions deemed appropriate by the Board. The Audit Committee
met four times during 2001 and was in complete compliance with its charter.
The Board does not have a formal nominating committee or compensation
committee; rather, the Board of Directors performs this function.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors recommends a vote FOR election of the nominees
identified above as directors of the Corporation.
4
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information on the compensation earned
by Mr. R. Herbert Hampton, the current Chief Executive Officer. The Chief
Executive Officer is the highest paid officer of the Corporation:
<Table>
<Caption>
Name and Annual Compensation Long Term
Principal ----------------------------- Compensation All Other
Position Year Salary Bonus Option Awards Compensation
- --------- ------------ ------------ ------------ ------------- ------------
R. Herbert Hampton 2001 $ 78,602 -- 5,000 --
President, Chief 2000 76,315 -- 5,000 --
Executive Officer 1999 75,000 -- 5,000 --
and Treasurer
</Table>
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OPTION GRANTS DURING FISCAL 2001
The following table sets forth information related to options granted
to Mr. Hampton during fiscal 2001.
<Table>
<Caption>
Potential Realizable
Value at Assumed
Annual Rates of
Stock Price
% of Total Appreciation for
Options Granted Exercise or Option Term(2)
Options to Employees Base Price Expiration -----------------------------
Name Granted(1) Fiscal Year ($/sh) Date 5% 10%
- ---- ------------ --------------- ------------ ------------ ------------ ------------
R. Herbert Hampton 5,000 100% $ 5.19 6/4/2011 $ 16,304 $ 41,318
</Table>
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(1) Option granted under the 1997 Officers' and Directors' Stock Option Plan.
The exercise price of the option was equal to the fair market value of a share
of Common Stock on the date of grant and may be paid in cash or with shares of
the Common Stock owned by the optionee. The option is exercisable for a period
of ten years from the date of grant unless the optionee resigns, retires or
dies, in which case the right to exercise the option is limited.
(2) The values set forth in this column represent the gain which would be
realized by the optionee assuming (i) the option is exercised on its expiration
date, and (ii) the value of a share of Common Stock has increased annually by a
rate of 5% and 10%, respectively, during the term of the option. These growth
rates are prescribed by the rules of the Securities and Exchange Commission and
are not intended to forecast possible future appreciation for the Corporation's
Common Stock.
5
AGGREGATE OPTION EXERCISES IN FISCAL 2001 AND FISCAL YEAR-END OPTION VALUES
The following table sets forth certain information with respect to the
value of stock options held by Mr. R. Herbert Hampton at fiscal year end.
<Table>
<Caption>
Number of Securities Value of Unexercised
Shares Underlying Unexercised In-the-Money
Acquired Options at FY-End(#) Options at FY-End($)(1)
On Value ---------------------------- ----------------------------
Name Exercise Realized($) Exercisable Unexercisable Exercisable Unexercisable
- ---- -------- ----------- ----------- ------------- ----------- -------------
R. Herbert Hampton -- -- 30,000 -- -- --
</Table>
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(1) Mr. Hampton holds options entitling him to purchase 30,000 shares of the
Corporation's Common Stock. The exercise prices for those options all exceed
$5.00 per share (the fair market value of a share of the Corporation's Common
Stock on December 31, 2001).
COMPENSATION OF DIRECTORS
The compensation payable to directors is established periodically by
the Board, and is the subject of the shareholder proposal within this proxy.
During 2001, each non-management director was paid a fee in the amount of $3,000
per meeting attended. For 2002, each non-management member of the Board will be
paid a fee of $3,000 for each meeting attended unless proposal no. 4 of this
proxy is passed by the shareholders of the Corporation. Directors are also
entitled to reimbursement of expenses incurred in connection with such
attendance. Members of the Audit Committee are entitled to a fee of $350 for
each formal committee meeting.
Under the terms of the 1997 Officers' and Directors' Stock Option Plan,
on June 4th of each year, each director and executive officer of the Corporation
will automatically receive an option to purchase 5,000 shares of the
Corporation's Common Stock at an exercise price equal to the fair market value
of such stock on such date, until such director or executive officer has
received options to purchase an aggregate of 25,000 shares of Common Stock under
such plan. To date, options to purchase 115,000 shares of the Corporation's
Common Stock have been granted under the plan and are currently outstanding.
During 2002, one director will receive options under the plan unless proposal
no. 2 in this proxy is passed by the shareholders of the Corporation. If passed,
proposal no.2 in this proxy will create the 2002 Stock Option Plan under which
each director of the Corporation will receive an option to purchase 5,000 shares
of the Corporation's Common Stock, as above, with the additional limitation that
at no time will the aggregate issued and outstanding options of the
Corporation's Common Stock exceed a number which is equal to 10% of the
Corporation's outstanding Common Stock.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Pursuant to Section 16(a) of the Securities Exchange Act of 1934 and
the rules issued thereunder, the Corporation's directors, executive officers and
10% shareholders are required to file with the Securities and Exchange
Commission and the Pacific Exchange reports of ownership and changes in
ownership of the Corporation's Common Stock. Copies of such forms are required
to be furnished to the Corporation. Based solely on its review of the copies of
such reports, or written representations that no reports were required, the
Corporation believes that during 2001, its directors, executive officers and 10%
shareholders complied with the Section 16(a) requirements.
6
PROPOSAL NO. 2
APPROVAL OF THE ADOPTION OF THE 2002 STOCK OPTION PLAN
As the Board of Directors believes that the granting of stock options
promotes continuity of management and identity of interest between directors and
shareholders, the Board has approved, and proposes that the shareholders of the
Corporation approve, the adoption of the 2002 Stock Option Plan (the "2002
Plan"). The 2002 Plan provides for the automatic annual grants to each
participant of options ("Automatic Options") to purchase up to a maximum of
5,000 shares of the Corporation's Common Stock per year, up to a maximum of
25,000 shares for any one participant during the life of the 2002 Plan. The plan
also provides that the total of current outstanding options equal no more than
10% of the Corporation's outstanding Common Stock after the completion of the
grant for the year.
The 2002 Plan would supercede all previous plans and eliminate the
possibility of any future stock option grants under those plans. The Corporation
currently has one other plan pursuant to which stock options may be granted, the
1997 Stock Option Plan (the "1997 Plan"). Under the 1997 Plan, options may be
granted to Directors and Officers of the Corporation and its subsidiaries. As of
the Record Date, options to purchase a total of 150,000 shares are issued (of
which 115,000 remain outstanding), and 50,000 shares remain available for grant
under the 1992 Plan. The Corporation also formerly maintained, from 1992 to
1994, a Directors Stock Option Plan, pursuant to which options to purchase a
total of 90,000 shares were issued to directors on an automatic basis; no
further options may be granted under that plan.
On April 27, 2002, the last reported sale price of the Corporation's
Common Stock on the Pacific Exchange was $10.50 per share.
RECOMMENDATION OF BOARD OF DIRECTORS
The Board of Directors recommends a vote for approval of Proposal No.
2. The affirmative vote required to approve the adoption of the 2002 Plan is a
majority of the votes present in person or represented by proxy and entitled to
vote at the Annual Meeting.
DESCRIPTION OF THE 2002 PLAN
The following description of the 2002 Plan is qualified in its entirety
by reference to the copy of the plan annexed hereto as Appendix A.
The 2002 Plan was adopted by the Board of Directors on November 7,
2001. If approved by the shareholders of the Corporation, an aggregate of
125,000 shares of Common Stock will be reserved for issuance pursuant to
Automatic Options to be granted under the 2002 Plan. All directors of the
Corporation who have served in such capacity for at least one full year (the
"Participants") will be eligible to be granted Automatic Options under the 2002
Plan. No person may receive options to purchase more than an aggregate of 25,000
shares under the 2002 Plan. All of the Corporation's five directors, including
one director who is also an executive officer of the Corporation officer will be
eligible to participate in the 2002 Plan, if it is approved at the Annual
Meeting.
If the 2002 Plan is approved by the shareholders, each director will
automatically receive an Automatic Option to purchase 5,000 shares of Common
Stock, effective as of the date of the Annual Meeting. In addition, on each
anniversary of such date, each Participant on that date will receive an
Automatic Option to purchase 5,000 shares of Common Stock. At no time may the
total outstanding options exceed 10% of the Company's outstanding Common Stock
under the 2002 Plan. If the number of option shares available to be granted (10%
of the Company's outstanding Common Stock less the number of outstanding options
immediately prior to the date of grant) is less that the number of option shares
which would be granted under the 2002 Plan, the number of shares subject to each
Automatic Option shall be determined by dividing the total number of option
shares available to be granted Plan by the number of eligible Participants at
that time. No person may receive Automatic Options to purchase more than an
aggregate of 25,000 shares, at which time the Participant shall be ineligible to
receive any further Automatic Options under the 2002 Plan. If the number of
shares remaining in the 2002 Plan on a date of grant are insufficient to grant
Automatic Options to purchase 5,000 of Common Stock to each eligible
Participant, the number of shares subject to
7
each Automatic Option shall be determined by dividing the total number of shares
remaining in the 2002 Plan by the number of eligible Participants at that time.
The number of shares of Common Stock covered by an Automatic Option is subject
to adjustment for stock splits, mergers, consolidations, combinations of shares,
reorganizations, and recapitalizations.
Automatic Options will be granted with an exercise price equal to the
Fair Market Value of a share of Common Stock on the date of the grant. Fair
Market Value of a share of Common Stock is defined as the closing sale price per
share of the Corporation's Common Stock as reported on the Pacific Exchange on
the date of grant. If the Common Stock is not then listed on the Pacific
Exchange, the 2002 Plan provides that the Fair Market Value shall be determined
by reference to the closing sale price for such stock on any national securities
exchange on which the Common Stock is listed or, if such stock is not listed on
a national securities exchange, by reference to quotations from the National
Association of Securities Dealers Inc. Automated Quotation System. If there is
no quotation available on the date of grant, the Fair Market Value shall be
determined by reference to the applicable price on the first day preceding the
date of grant for which quotations are available. Automatic Options will not be
incentive stock options within the meaning of Section 422 of the Internal
Revenue Code.
The exercise price of Automatic Options under the 2002 Plan may be paid
in cash or with shares of Common Stock owned by the Participant. Automatic
Options may be exercised within the period commencing on the date of grant and
ending on the earliest of (i) the date on which the service of the Participant
as an officer or director is terminated for cause, (ii) six months after the
Participant voluntarily ceases to be an officer or director of the Corporation,
(iii) one year after the date on which the Participant ceases to be an officer
or director for any other reason and (iv) the tenth anniversary of the date of
grant. In the event of the Participant's death, the Automatic Option may be
exercised, if and to the extent that such deceased optionee was entitled to
exercise the Option at the time of death, by the executor of the estate of the
decedent or by the person or persons to whom the deceased Participant's rights
pass by will or by the laws of descent and distribution of the state of his or
her domicile at the time of his or her death for a period of one year after the
date of death. In the event any Participant incurs any tax liability as a result
of the exercise of an Automatic Option, the 2002 Plan permits such Participant
to satisfy such liability by either delivery of previously owned shares of
Common Stock to the Corporation or by directing the Corporation to withhold a
portion of the shares which would otherwise be issuable upon exercise.
The Board of Directors has the power to terminate or amend the 2002
Plan from time to time in such respects as it deems advisable, except that no
termination or amendment shall materially adversely affect any outstanding
Automatic Option without the consent of the Participant. Except to the extent
necessary to govern Automatic Options, the 2002 Plan shall terminate on June 5,
2012.
The 2002 Plan shall be administered by the Board of Directors. As the
2002 Plan specifically identifies the Participants, the date of grant of
Automatic Options, the number of shares to be subject thereto, the exercise
price, duration and other significant terms thereof, the administration,
interpretation and construction of the 2002 Plan by the Board will be
essentially ministerial in nature. The 2002 Plan provides that the
interpretation and construction of the 2002 Plan by the Board shall be final.
New Plan Benefits Table The following table sets forth the number of
Automatic Options that will be granted under the 2002 Plan in 2002 to R. Herbert
Hampton, the Corporation's President and Chief Executive Officer, and the
Corporation's non-employee directors as a group:
<Table>
<Caption>
Name or Group Number of Automatic Options
- ------------- ---------------------------
R. Herbert Hampton 5,000
Executive Officer
Non-Employee Directors 20,000
as a Group (4 persons)
</Table>
8
FEDERAL INCOME TAX CONSEQUENCES
All Automatic Options to be issued under the 2002 Plan will be
non-incentive stock options. A non-incentive stock option is a stock option
which is not covered by certain specific sections of the Internal Revenue Code
(the "Code") relating to stock options. The Corporation believes that Automatic
Options granted under the 2002 Plan will not have a readily ascertainable fair
market value, as defined by Treasury Regulation Section 1.83-7. Therefore, a
Participant will not recognize income until shares are acquired upon the
exercise of an Automatic Option. Upon exercise, the excess, in any, of the fair
market value of the shares acquired over the exercise price thereof will be
recognized by the Participant as compensation income. For this purpose, the fair
market value is determined without regard to any restriction on the transfer of
the shares other than a permanent restriction. Additional rules may apply in the
event the sale of shares acquired upon exercise of an Automatic Option would be
subject to Section 16(b) of the Securities Exchange Act of 1934.
The Participant's tax basis will be an amount equal to the cash paid
upon the exercise of an Automatic Option, increased by any amount includable in
gross income of the Participant. Upon a later disposition of shares received as
a result of exercise of an Automatic Option, gain or loss will be measured by
the difference between the sale proceeds and such tax basis. The gain or loss
will generally be treated as capital gain or capital loss, provided the shares
are capital assets in the hands of the Participant.
If a Participant surrenders shares of Common Stock in payment of all or
part of the aggregate exercise price of an Automatic Option, the Participant
will recognize income if the fair market value of the shares received exceeds
the exercise price thereof. In such event, the Participant must include the
amount of such excess in gross income, as compensation. If the exercise price of
an Automatic Option is paid solely in shares, the Participant's tax basis for
the shares received equal in value to the shares surrendered will be the
Participant's basis for the surrendered shares and the tax basis of the
remainder of the shares will be the amount of compensation income recognized.
(Code Sections 1036(b) and 1031(d).
The Corporation generally will be entitled to a tax deduction in an
amount equal to the compensation income recognized by a Participant as a result
of the exercise of an option, subject to the limitations on deductibility of
certain compensation in excess of $1 million contained in Section 162(m) of the
Code. (Code Sections 83(h) and 162).
Any amount treated as compensation received by a Participant as a
result of an exercise of an Automatic Option and which is related to the
Participant's employment by the Corporation is subject to Federal income tax
withholding and employment taxes.
The foregoing is a general description of Federal income tax
consequences. In connection with their particular income tax liability,
optionees are urged to obtain professional advice regarding the applicability of
Federal, state and local tax laws.
PROPOSAL NO. 3
ELECTION OF INDEPENDENT AUDITORS
On November 7, 2001, the Board of Directors re-appointed KPMG, LLP
("KPMG") as independent auditors of the Corporation, subject to shareholders'
approval. It is intended that, in the absence of a contrary direction, votes
will be cast pursuant to the accompanying proxies for the appointment of KPMG as
independent auditors to audit the books and records of the Corporation at the
close of the current calendar year. Neither KPMG nor any of its partners has any
financial interest in or any connection (other than as independent certified
public accountants) with the Corporation. A representative of KPMG is expected
to be present at the Annual Meeting, and will have the opportunity to make a
statement and will respond to appropriate questions from shareholders present at
the meeting.
GOLDEN CYCLE GOLD CORPORATION
AUDIT COMMITTEE REPORT
The Golden Cycle Gold Corporation Audit Committee oversees the
Company's financial reporting process on behalf of the Board of Directors. The
Committee has three members, each of whom is independent as defined by
9
applicable SEC and auditing standards. The Committee operates under a written
charter, adopted by the Board mid-year 2000.
The Committee assists the Board of Directors by overseeing the 1)
integrity of the Company's financial reporting and internal control, 2)
independence and performance of the Company's independent auditors, 3) and
provides an avenue of communication between management, the independent
auditors, and the Board of Directors.
In the course of providing its oversight responsibilities regarding the
2001 financial statements, the Committee reviewed the 2001 audited financial
statements, which appear in the 2001 Annual Report to Shareholders, with
management and the Company's independent auditors. The Committee reviewed
accounting principles, practices, and judgments as well as the adequacy and
clarity of the notes to the financial statements.
The Committee reviewed the independence and performance of the
independent auditors who are responsible for expressing an opinion on the
conformity of those audited financial statements with accounting principles
generally accepted in the United States, and such other matters as required to
be communicated by the independent auditors in accordance with Statement on
Auditing Standards 61.
The Committee meets with the independent auditors to discuss their
audit plans, scope and timing on a regular basis, with or without management
present. During the year 2001 the Committee met with the independent auditors
four times.
In reliance on the reviews and discussions referred to above, the
Committee recommended to the Board, and the Board has approved, that the audited
financial statements be included in the Annual Report to the SEC on Form 10-K
for the year ended December 31, 2001. The Committee and the Board have also
recommended the selection of KPMG LLP as independent auditors for the
Corporation for the year 2002.
AUDIT FEES
The fees paid by the Corporation to KPMG LLP for services provided in
2001 were as follows:
<Table>
Audit Fees $22,000
Corporate Tax Preparation Fees 8,500
</Table>
PROPOSED STOCKHOLDER RESOLUTION FOR NON-MANAGEMENT DIRECTOR COMPENSATION
(Item 4 on the Proxy Card
Mr. G. John Gruen, III, 5686 Maxwelton Road, Oakland, CA 94618, a
shareholder, has given notice that he intends to present for action at the
Annual Meeting the following resolution:
Be it resolved that: annual compensation for non-management
directors not exceed $3,000 and that such compensation be
proportionately reduced if such director does not attend a meeting."
SUPPORTING STATEMENT
Once again Management's 2002 Proxy Statement reiterates the universally
recognized and laudable statement, "MAINTAINING QUALIFIED DIRECTORS IS
CHALLENGING FOR ALL CORPORATIONS." I am confident we can all agree.
However, the question begging to be asked of Management of a company
whose annual guaranteed income is only $250,000 and whose major stated mission
is the exploration and development of new resources and reserves is: Does the
Company and shareholder significantly benefit from paying compensation and
expenses to Directors of approximately $30,000 annually when the total stated
annual Company Exploration Expenses were only $51,754 for 2001, $16,931 for
2000, $0 for 1999 and $108,522 for 1998.* By most conventional measures and
standards, this seems to be an extremely high ratio of Director compensation to
new exploration and development expenditures.
10
Historically, outside directors have been elected, and compensated, for
the influence and bottom-line contributions they bring to the corporations they
manage and represent.
As shareholders, I believe we can all agree that compensation for
qualified directors should be tied directly to results. Increased assets per
share should mirror increased director compensation. Unrealistic and volatile
stock quotations, skewed by "extremely" low trading volume, and "business as
usual" year after year, should not.
Thank you for your kind consideration of this resolution. Your vote in
FAVOR can result in a greatly strengthened company by eventually attracting
qualified professional directors truly focused on building shareholder wealth.
The reason: Shareholders should, and hopefully will, reward directors in direct
proportion to their bottom-line performance.
(*as stated in the Company's Consolidated Statements of Operations and represent
only expenditures made on the Company's new exploration and development
opportunities, not properties held within the J.V. The Company is not liable or
responsible for any out-of-pocket exploration and development expenditures on
the J.V. properties.)
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS PROPOSAL.
Maintaining qualified directors requires providing adequate
compensation for the assumption of responsibility as a director of a public
corporation. A balance must be achieved between what is affordable to the
Corporation and what is required to attract and retain persons capable of
managing the affairs of the Corporation. Golden Cycle Gold has provided stock
options to supplement cash payments and to align the directors' interests with
those of the stockholders. The Board believes that the proposal to limit the
Board's discretion on compensation of non-management directors would not be in
the best interest of the Corporation or its stockholders.
Accordingly, the Board recommends a vote AGAINST this proposal.
SHAREHOLDER PROPOSALS FOR 2003 ANNUAL MEETING OF SHAREHOLDERS
A Shareholder proposal to be presented at the 2003 Annual Meeting of
Shareholders must be received at the Corporation's office at 1515 South Tejon,
Suite 201, Colorado Springs, Colorado 80906 no later than December 31, 2002 in
order to be included in the proxy materials for that meeting.
By Order of the Board of Directors
Colorado Springs, Colorado Kristin M. Steffey
April 27, 2002 Secretary
11
APPENDIX A
GOLDEN CYCLE GOLD CORPORATION
2002 STOCK OPTION PLAN
SECTION 1. ESTABLISHMENT. There is hereby established the Golden Cycle
Gold Corporation 2002 Stock Option Plan (the "2002 Plan") pursuant to which
certain directors of Golden Cycle Gold Corporation (the "Company") may be
granted options to purchase shares of common stock, without par value ("Common
Stock"), and thereby share in the future growth of the business. The purpose of
the 2002 Plan is to promote continuity of management and identity of interest
between directors and shareholders of the Company.
SECTION 2. STATUS OF OPTIONS. The options to be issued pursuant to this
2002 Plan (the "Options") shall not constitute incentive stock options within
the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code").
SECTION 3. ELIGIBILITY. All directors of the Company who have served in
such capacity for at least one full year (collectively, the "Participants")
shall be eligible to be granted Options under this 2002 Plan.
SECTION 4. NUMBER OF SHARES COVERED BY OPTIONS; NO PREEMPTIVE RIGHTS.
The total number of shares which may be issued and sold pursuant to Options
granted under this 2002 Plan shall be 125,000 shares of Common Stock (or the
number and kind of shares of stock or other securities which, in accordance with
Section 8 of this 2002 Plan, shall be substituted for such shares of Common
Stock or to which said shares shall be adjusted; all references to shares of
Common Stock are deemed to be references to said shares or shares so adjusted).
The issuance of shares upon exercise of an Option shall be free from any
preemptive or preferential right of subscription or purchase on the part of any
shareholder. If any outstanding Option granted under this 2002 Plan is
terminated, for any reason, or expires without having been fully exercised, the
shares of Common Stock subject to the unexercised portion of the Option will
again be available for Options issued under this 2002 Plan.
SECTION 5. ADMINISTRATION.
(a) This 2002 Plan shall be administered by the Board of Directors. A
majority of the members of the Board shall constitute a quorum. All
determinations of the Board shall be made by a majority of such quorum or by a
written consent signed by all members of the Board.
(b) Options shall be automatically granted to Participants in
accordance with Section 6 hereof and shall be issued upon the terms and
conditions set forth in Section 7 hereof. No Options shall be granted hereunder
other than as provided in Section 6 hereof. Accordingly, the persons to whom
Options shall be granted, the number of shares subject thereto and the material
terms and conditions governing the Options will not be subject to the discretion
of the Board. However, if any questions of interpretation of this 2002 Plan or
of any Options issued hereunder shall arise, they shall be determined by the
Board and such determination shall be final and binding upon all persons having
an interest in the 2002 Plan.
(c) The granting of an Option pursuant to this 2002 Plan shall not
confer upon the Participant any right to be continued as a director of the
Company or any of its subsidiaries. In addition, the granting of an Option
pursuant to this 2002 Plan shall not confer upon the Participant any rights of a
shareholder of the Company with respect to any shares issuable upon exercise of
an Option unless and until a certificate for such shares has been issued and
delivered to him.
SECTION 6. NON-DISCRETIONARY GRANTS. Following approval of this 2002
Plan by the shareholders of the Company, during the term of this 2002 Plan,
Options shall be automatically granted to Participants as follows:
(a) an Option to purchase 5,000 shares of Common Stock will be granted
to each person who is then a Participant on the date (the "Initial Grant Date")
of the Annual Meeting of the Board of Directors following the Annual Meeting of
the Shareholders at which the Plan is approved; and
12
(b) an Option to purchase 5,000 shares of Common Stock will be granted
to each person who is then a Participant on each anniversary of the Initial
Grant Date (the Initial Grant Date and each anniversary thereof on which options
are granted hereunder to be hereinafter referred to as a "date of grant"), until
the Participant has received options under this 2002 Plan entitling him to
purchase an aggregate of 25,000 shares (which number shall be adjusted in a
means consistent with an adjustment made to the 125,000 share number referred to
in Section 8), at which time such Participant shall be ineligible to receive any
further Options under this 2002 Plan. At no time may the total outstanding
options exceed 10% of the Company's outstanding Common Stock under the 2002
Plan. If the number of option shares available to be granted (10% of the
Company's outstanding Common Stock less the number of outstanding options
immediately prior to the date of grant) is less that the number of option shares
which would be granted under the 2002 Plan, the number of shares subject to each
Automatic Option shall be determined by dividing the total number of option
shares available to be granted Plan by the number of eligible Participants at
that time. If the number of shares remaining in the 2002 Plan on any date of
grant is insufficient to grant each eligible Participant an Option to purchase
5,000 shares of Common Stock, each eligible Participant will receive an Option
to purchase a number of shares of Common Stock to be determined by dividing the
total number of shares remaining in the 2002 Plan by the number of eligible
Participants at that time and, if necessary, rounding down to the nearest number
of whole shares.
SECTION 7. TERMS AND CONDITIONS OF OPTIONS; STOCK OPTION AGREEMENTS.
Each Option granted pursuant to this 2002 Plan shall be evidenced by a written
agreement between the Participant and the Company which shall be subject to the
following terms and conditions:
(a) The exercise price of each Option shall be one hundred percent
(100%) of the Fair Market Value ( as hereinafter defined) of the shares subject
to such Option on the date of grant. For purposes of this Section, the "Fair
Market Value" of a share of Common Stock shall be the closing sale price per
share of the Company's Common Stock as reported on the Pacific Exchange on the
date of grant. If the Common Stock is not traded on the Pacific Exchange on the
date of grant, then the Fair Market Value shall be (i) if the Common Stock is
then listed on any other national securities exchange, the closing sale price
per share as reported by such exchange on the date of grant; (ii) if the Common
Stock is not listed on a national securities exchange but is listed on the
National Association of Securities Dealers' NASDAQ Stock Market ("NASDAQ"), the
closing sale price per share of the Common Stock as reported by NASDAQ on the
date of grant; (iii) if the Common Stock is listed on NASDAQ, but closing sales
prices are not reported with respect to the Common Stock, the mean between the
high bid and low asked prices per share of the Common Stock as reported by
NASDAQ on the date of grant; or (iv) if the Common Stock is not listed on
NASDAQ, the mean between the closing bid and asked prices per share of the
Common Stock on the date of grant as furnished by a broker-dealer which
regularly furnishes price quotations for the Common Stock. If there is no
quotation available on the date of grant, the fair market value shall be
determined by reference to the applicable price on the first day preceding the
date of grant for which quotations are available.
(b) The exercise price of the shares to be purchased pursuant to an
Option shall be paid (i) in full either in cash or by check, (ii) by delivery
(i.e., surrender) of shares of Common Stock of the Company owned by the
Participant with a Fair Market Value (as defined above) at the time of the
exercise of the Option equal to the exercise price, or (iii) by a combination of
(i) and (ii). In addition, to the extent permitted by applicable law, the
exercise price may be paid by one or more brokerage firms pursuant to
arrangements whereby such firm or firms, on behalf of a Participant, shall pay
to the Company the exercise price of the Option being exercised, and the
Company, pursuant to an irrevocable notice from the Participant, shall deliver
shares being purchased to such firm.
(c) Each Option shall be exercisable during the period commencing on
the date of grant and ending on the earliest of (i) the date on which the
Participant's service as a director is terminated for cause, (ii) six months
after the Participant voluntarily ceases to be a director of the Company, (iii)
one year after the date on which the Participant ceases to be a director of the
Company for any other reason and (iv) the tenth anniversary of the date of
grant. In the event of the Participant's death, the Option may be exercised, if
and to the extent that such deceased Optionee was entitled to exercise the
Option at the time of death, by the executor of the estate of the decedent or by
the person or persons to whom the deceased Participant's rights pass by will or
by the laws of descent and distribution of the state of his or her domicile at
the time of his or her death for a period of one year after the date of death.
(d) Each Option shall be non-transferable by the Participant except by
will or by the laws of descent and distribution, pursuant to a qualified
domestic relations order or to a member of Participant's immediate family (i.e.,
spouse, children, parents, or siblings) or a trust for the benefit of such
person.
13
(e) Unless a registration statement with respect to the shares to be
purchased upon exercise of the Option is in effect under the Securities Act of
1933, as amended (the "Securities Act"), or any applicable state securities
laws, a Participant's right to purchase the shares shall be subject to the
condition that the Company shall have received such assurance as it may
reasonably request that such purchase will be in accordance with an applicable
exemption from the registration requirements of each such law. The Company shall
not be obligated to issue or deliver any shares upon exercise of the Option if
to do so would violate the Securities Act or any state securities law and the
Company shall have no obligation to file any registration statement or to take
any other action required or permitted by any such law. The Company shall give
the Participant and his counsel access to such information as may reasonably be
requested to enable such counsel to express an opinion as to the availability of
an exemption from such registration requirements.
(f) If, in connection with the exercise of an Option by a Participant,
the Company is required to withhold any tax for Federal Insurance Contribution
Act purposes and/or any federal, state or local income tax or taxes, each
Participant may, subject to the restrictions herein contained, satisfy, in whole
or part, the Participant's obligation to pay to the Company the amount of such
tax or taxes by electing (1) to have the Company withhold a portion of the
shares of Common Stock which would otherwise be issuable to such Participant
upon exercise of the Option or (2) to deliver and transfer to the Company shares
of Common Stock previously owned by the Participant, or (3) by a combination of
the means specified in clauses (1) and (2) above; provided, however, that the
amount of federal, state and local income taxes that may be paid by delivery or
withholding of shares of Common Stock shall not exceed the applicable maximum
marginal rate. The amount of any withholding tax not paid by delivery or
withholding of shares of Common Stock shall be paid by the Participant to the
Company in cash. Shares of Common Stock delivered or withheld shall have a Fair
Market Value (as defined in Sections 7(a) hereof) equal to the amount of tax
required to be withheld, or such part of such tax that the Participant elects to
pay with shares of Common Stock. The Fair Market Value of the shares of Common
Stock delivered to or withheld by the Company shall be determined as of the date
the amount of tax to be withheld is determined (the "Tax Date") or if shares of
Common Stock did not trade on the Tax Date, as of the last previous date shares
of Common Stock did so trade. An election by a Participant to deliver shares of
Common Stock or to have shares of Common Stock withheld to satisfy tax
withholding requirements shall be made in writing, shall be delivered to the
Secretary of the Company and shall not be effective until so delivered, and
shall be irrevocable.
SECTION 8. ADJUSTMENT OF NUMBER OF SHARES. If a dividend or other
distribution shall be declared upon the Common Stock payable in shares of Common
Stock, the number of shares of Common Stock then subject to any Option granted
hereunder, and the number or shares reserved for issuance pursuant to this 2002
Plan but not yet covered by an Option, shall be adjusted by adding to each of
such shares the number of shares which would be distributable thereon if such
shares had been outstanding on the date fixed for determining the shareholders
entitled to receive such stock dividend or distribution. If the outstanding
shares of Common Stock shall be changed into or exchanged for a different number
or kind of shares of stock or other securities of the Company or of another
corporation, whether through reorganization, reclassification, recapitalization,
stock split-up, combination of shares, merger or consolidation, then there shall
be substituted for each share of Common Stock then subject to any such Option
and for each share of Common Stock reserved for issuance pursuant to this 2002
Plan but not yet covered by an Option, the number and kind of shares of stock or
other securities into which each outstanding share of Common Stock shall be so
changed or for which each such share shall be exchangeable; provided, however,
that in the event that such change or exchange results from a merger or
consolidation, and in the judgment of the Board such substitution cannot be
effected or would be inappropriate, or if the Company shall sell all or
substantially all of its assets, the Company shall use reasonable efforts to
effect some other adjustment of each then outstanding Option which the Board, in
its sole discretion, shall deem equitable. In the event that there shall be any
change, other than as specified above in this Section 8, in the number or kind
of outstanding shares of Common Stock or of any stock or other securities into
which such shares of Common Stock shall have been changed or for which they
shall have been exchanged, then, if the Board shall determine that such change
equitably requires an adjustment in the number or kind of shares theretofore
reserved for issuance pursuant to the 2002 Plan but not yet covered by an Option
and of the shares then subject to an Option or Options, such adjustment shall be
made by the Board and shall be effective and binding for all purposes of this
2002 Plan and of each stock option agreement. In the case of any substitution or
adjustment as provided for in this Section 8, the aggregate option price in each
stock option agreement for all shares covered thereby prior to such substitution
or adjustment will be the aggregate option price for all shares of stock or
14
other securities (including any fraction) which shall have been substituted
therefor pursuant to this Section 8. No adjustment or substitution provided for
in this Section 8 shall require the Company, in any stock option agreement, to
sell a fractional share. Accordingly, any fraction of a share or other security
which results from any such adjustment of substitution shall be eliminated and
not carried forward to any subsequent adjustment or substitution.
SECTION 9. EFFECTIVE DATE AND TERM OF PLAN. This plan shall become
effective on the date of its approval by vote of the shareholders of the
Company. Except to the extent necessary to govern outstanding Options issued,
this Plan shall terminate on, and no additional Options shall be granted after
the tenth anniversary of the date on which such approval is obtained, unless
earlier terminated by the Board of Directors in accordance with Section 10
hereof.
SECTION 10. TERMINATION AND AMENDMENT OF PLAN. This 2002 Plan may be
terminated or amended from time to time by vote of the Board of Directors;
provided, however, that no such termination or amendment shall materially
adversely affect or impair any then outstanding Option without the consent of
the Participant, except that the effectiveness of any amendment which, under any
applicable statute, rule or regulation (including but not limited to rules of
the Pacific Stock Exchange) requires shareholder approval, will be subject to
obtaining such approval.
15
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF SHAREHOLDERS
GOLDEN CYCLE GOLD CORPORATION
JUNE 5, 2002
\/ PLEASE DETACH AND MAIL IN THE ENVELOPE PROVIDED \/
A [X] Please mark
your votes as
in this example.
The Board of Directors recommends a vote "FOR" all nominees
in Proposal No. 1, "FOR" Proposals No. 2 and No. 3, and "AGAINST"
Proposal No. 4. FOR AGAINST ABSTAIN
PROPOSAL 2. APPROVAL OF THE [ ] [ ] [ ]
PROPOSAL 1. [ ] [ ] NOMINEES: PROPOSED 2002 STOCK
ELECTION OPTION PLAN.
OF Orville E. Anderson
DIRECTORS: Melvin L. Cooper PROPOSAL 3. TO RATIFY THE [ ] [ ] [ ]
Rex H. Hampton APPOINTMENT OF KPMG PEAT
For, except vote withhold from the Frank M. Orrell MARWICK LLP AS INDEPENDENT
following nominee(s): R. Herbert Hampton AUDITORS TO AUDIT THE
BOOKS AND RECORDS OF THE
__________________________________ CORPORATION AT THE CLOSE
OF THE CURRENT YEAR.
PROPOSAL 4. SHAREHOLDER [ ] [ ] [ ]
PROPOSAL RELATING TO NON-
MANAGEMENT DIRECTOR
COMPENSATION.
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH
OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING. THIS
PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE,
THE PROXY WILL BE VOTED "FOR" ALL NOMINEES IN PROPOSAL NO. 1,
"FOR" PROPOSALS NO. 2 AND NO. 3, AND "AGAINST" PROPOSAL NO. 4.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY, USING THE ENCLOSED ENVELOPE.
SIGNATURE(S)_____________________________________________________________________ DATE____________________________________
NOTE: Please sign exactly as name appears hereon. When shares are held in the name of Joint holders, each should sign. When signing
as attorney, executor, trustee, or guardian, etc. please so indicate. If a corporation, please sign in full corporate name by
authorized officer. If a partnership please sign in partnership name by an authorized person.
GOLDEN CYCLE GOLD CORPORATION
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD ON JUNE 5, 2002
The undersigned shareholder of GOLDEN CYCLE GOLD CORPORATION (the
"Corporation") hereby appoints R. Herbert Hampton and Kristin M. Steffey, or
either of them, acting singly in the absence of the others, attorneys and
proxies, with full power of substitution and revocation, to vote all of the
shares of Common Stock of the Corporation, which the undersigned is entitled to
vote at the Annual Meeting of Shareholders of the Corporation to be held at The
Sheraton Hotel, Colorado Springs, Colorado, on June 5, 2002 at 9:00 a.m. (local
time) or any adjournment or postponement thereof.
(TO BE SIGNED ON REVERSE SIDE)