Unassociated Document
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
Filed
by
the Registrant x
Filed
by
a Party other than the Registrant o
Check
the
appropriate box:
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Preliminary
Proxy Statement
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Confidential,
for Use of the Commission Only (as Permitted by Rule
14a-6(e)(2))
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Definitive
Proxy Statement
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Definitive
Additional Materials
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o
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Solicitation
Material Pursuant to Rule 14a-11(c) or rule
14a-12
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Capital
Gold Corporation
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(Name
of Registrant as Specified in its
Charter)
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(Name
of
Person(s) Filing Proxy Statement, if Other Than the
Registrant)
Payment
of Filing Fee (Check the appropriate box):
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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1)
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Title
of each class of securities to which transaction applies:
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2)
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Aggregate
number of securities to which transaction applies:
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3)
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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):
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4)
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Proposed
maximum aggregate value of transaction:
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Fee
paid previously with preliminary
materials.
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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.
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(1)
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Amount
Previously Paid:
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(2)
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Form,
Schedule or Registration Statement No.:
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CAPITAL
GOLD CORPORATION
76
Beaver Street, 14th Floor
New
York, NY 10005
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
TO
BE HELD ON JANUARY 24, 2008
To
the
Stockholders of Capital Gold Corporation:
You
are
cordially invited to attend the Annual Meeting of Stockholders of Capital Gold
Corporation (the “Company”), a Delaware corporation, to be held at Bayard's, One
Hanover Square, New York, New York 10004
on
Thursday, January 24, 2008, at 1:30 p.m. local time, for the following
purposes:
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1.
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To
amend the Company’s certificate of incorporation to provide for a
classified Board of Directors (Proposal
1);
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2.
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To
elect (1) two Class I directors to serve for a one-year term that
expires
at the 2009 Annual Meeting of Stockholders and until their successors
have
been duly elected and qualified, (2) three Class II directors to
serve for
a two-year term that expires at the 2010 Annual Meeting of Stockholders
and until their successors have been duly elected and qualified,
and (3)
three Class III directors to serve for a three-year term that expires
at
the 2011 Annual Meeting of Stockholders and until their successors
have
been duly elected and qualified (Proposal 2);
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3.
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To
amend the Company’s certificate of incorporation to increase the
authorized number of shares of common stock from 250,000,000 shares
to
300,000,000 shares (Proposal 3);
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4.
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To
amend the Company’s certificate of incorporation to permit stockholder
action to be taken only at a duly called annual or special meeting
of
stockholders and eliminate stockholder action by written consent
(Proposal
4);
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5.
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To
ratify the selection by our audit committee of Wolinetz, Lafazan
&
Company, P.C., independent registered public accountants, to audit
the
financial statements of the Company for the year ending July 31,
2008
(Proposal 5); and
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6.
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To
transact such other matters as may properly come before the meeting
or any
adjournment thereof.
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Only
stockholders of record at the close of business on December 3, 2007 are entitled
to notice of and to vote at the meeting.
A
proxy
statement and proxy are enclosed. If you are unable to attend the meeting in
person you are urged to sign, date and return the enclosed proxy promptly in
the
self addressed stamped envelope provided. If you attend the meeting in person,
you may withdraw your proxy and vote your shares.
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By
Order of the Board of Directors
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Jeffrey
W. Pritchard, Secretary
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New
York, New York
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December
19, 2007
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YOUR
VOTE IS IMPORTANT
We
urge you to promptly vote your shares
by
completing, signing, dating and returning
your
proxy card in the enclosed
envelope.
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PROXY
STATEMENT
CAPITAL
GOLD CORPORATION
76
Beaver Street
14th
Floor
New
York, NY 10005
INTRODUCTION
This
proxy statement is furnished in connection with the solicitation of proxies
for
use at the Annual Meeting of stockholders of Capital Gold Corporation (“Capital
Gold,” the “Company,” “We” or “Us”) to be held on Thursday, January 24, 2008,
and at any adjournments. The accompanying proxy is solicited by our Board of
Directors and is revocable by the stockholder by notifying our Corporate
Secretary at any time before it is voted, or by voting in person at the Annual
Meeting. This proxy statement and accompanying proxy are being distributed
to
stockholders beginning on or about December 19, 2007. Our principal executive
offices are located at 76 Beaver Street, 14th Floor, New York, NY 10005,
telephone (212) 344-2785.
OUTSTANDING
SHARES AND VOTING RIGHTS
RECORD
DATE; OUTSTANDING SHARES; VOTES REQUIRED
Only
stockholders of record at the close of business on December 3, 2007, the record
date, are entitled to receive notice of, and vote at the Annual Meeting. As
of
the record date, the number and class of stock outstanding and entitled to
vote
at the meeting was 174,243,646 shares of common stock, par value $.0001 per
share. Each share of common stock is entitled to one vote on all matters. No
other class of securities will be entitled to vote at the meeting. There are
no
cumulative voting rights.
The
affirmative vote of at least a majority of the outstanding shares entitled
to
vote at the Annual Meeting at which a quorum is present is necessary for
approval of Proposals 1, 3 and 4. The two (2) Class I director nominees, two
(2)
Class II director nominees and two (2) Class III director nominees receiving
the
highest number of affirmative “FOR” votes at the meeting (a plurality of votes
cast) will be elected and constitute our entire Board of directors. The
affirmative vote of at least a majority of the shares represented and voting
at
the Annual Meeting at which a quorum is present is necessary for approval of
Proposal 5.
REVOCABILITY
OF PROXIES
If
you
attend the meeting, you may vote in person, regardless of whether you have
submitted a proxy. Any person giving a proxy in the form accompanying this
proxy
statement has the power to revoke it at any time before it is voted. It may
be
revoked by filing, with our corporate secretary of Capital Gold at its principal
offices, 76 Beaver Street, 14th Floor, New York, NY 10005, a written notice
of
revocation or a duly executed proxy bearing a later date, or it may be revoked
by attending the meeting and voting in person.
VOTING
AND SOLICITATION
Every
stockholder of record is entitled, for each share held, to one vote on each
proposal or item that comes before the meeting. There are no cumulative voting
rights. By submitting your proxy, you authorize Gifford A. Dieterle and Jeffrey
W. Pritchard and each of them to represent you and vote your shares at the
meeting in accordance with your instructions. Messrs. Dieterle and Pritchard
and
each of them may also vote your shares to adjourn the meeting from time to
time
and will be authorized to vote your shares at any adjournment or postponement
of
the meeting.
Capital
Gold has borne the cost of preparing, assembling and mailing this proxy
solicitation material. The total cost estimated to be spent and the total
expenditures to date for, in furtherance of, or in connection with the
solicitation of stockholders is approximately $25,000.
We may
reimburse brokerage firms and other persons representing beneficial owners
of
shares for their expenses in forwarding soliciting materials to beneficial
owners. Proxies may be solicited by certain of our directors, officers and
employees, without additional compensation, personally, by telephone or by
facsimile.
We
have
hired the firm of MacKenzie Partners, Inc. to assist in the solicitation of
proxies on behalf of the Board of Directors. MacKenzie has agreed to perform
this service for a proposed fee of $8,000 plus out-of-pocket expenses.
ADJOURNED
MEETING
The
chair
of the meeting may adjourn the meeting from time to time to reconvene at the
same or some other time, date and place. Notice need not be given of any such
adjournment meeting if the time, date and place thereof are announced at the
meeting at which the adjournment is taken. If the time, date and place of the
adjournment meeting are not announced at the meeting which the adjournment
is
taken, then our Secretary shall give written notice of the time, date and place
of the adjournment meeting not less than ten (10) days prior to the date of
the
adjournment meeting. Notice of the adjournment meeting also shall be given
if
the meeting is adjourned in a single adjournment to a date more than 30 days
after the original date fixed for the meeting or if a new record date for the
adjourned meeting is fixed.
TABULATION
OF VOTES
The
votes
will be tabulated and certified by our transfer agent.
VOTING
BY STREET NAME HOLDERS
If
you
are the beneficial owner of shares held in “street name” by a broker, the
broker, as the record holder of the shares, is required to vote those shares
in
accordance with your instructions. If you do not give instructions to the
broker, the broker will nevertheless be entitled to vote the shares with respect
to “discretionary” items but will not be permitted to vote the shares with
respect to “non-discretionary” items (in which case, the shares will be treated
as “broker non-votes”).
QUORUM;
ABSTENTIONS; BROKER NON-VOTES
The
required quorum for the transaction of business at the Annual Meeting is a
majority of the shares of common stock entitled to vote at the Annual Meeting,
in person or by proxy. Shares that are voted "FOR," "AGAINST" or "WITHHELD
FROM"
a matter are treated as being present at the meeting for purposes of
establishing a quorum and are also treated as shares represented and voting
the
votes cast at the Annual Meeting with respect to such matter.
Proxies
marked “abstain” will be counted as shares present for the purpose of
determining the presence of a quorum. For purposes of determining the outcome
of
a proposal, abstentions will have the same effect as a vote against the proposal
(other than the election of directors).
Broker
“non-votes” occur when a nominee holding shares for a beneficial owner does not
vote on a particular proposal because the nominee does not have discretionary
voting power for that particular item and has not received voting instructions
from the beneficial owner. Broker “non-votes” will be counted as shares present
for purposes of determining the presence of a quorum. However, broker
“non-votes” will not be counted for purposes of determining the number of votes
cast with respect to the particular proposal on which the broker has expressly
not voted. Where a proposal, such as approval of amendment to our Certificate
of
Incorporation to permit stockholder action to be taken only at a meeting of
stockholders and eliminate stockholder action by written consent, requires
the
vote of a majority of the shares entitled to vote rather than a majority of
the
votes present and voting at a meeting, the general effect of a broker “non-vote”
is a vote against the proposal.
PROPOSALS
TO STOCKHOLDERS
PROPOSAL
1
APPROVAL
OF AN AMENDMENT TO THE CERTIFICATE OF INCORPORATION TO PROVIDE FOR A CLASSIFIED
BOARD OF DIRECTORS
Our
Board
of Directors, subject to approval of our stockholders, authorized an amendment
to our Certificate of Incorporation to add an Article TENTH thereto which would
provide that our Board of Directors shall be divided into three classes
designated as Class I, Class II and Class III, respectively, with the term
of
office of one class expiring each year. The Class I directors shall be initially
elected for a term expiring at the annual meeting of stockholders to be held
in
the calendar year 2009, Class II directors shall be initially elected for a
term
expiring at the annual meeting of stockholders to be held in the calendar year
2010, and Class III directors shall be initially elected for a term expiring
at
the annual meeting of stockholders to be held in the calendar year 2011. Members
of each class shall hold office until the annual meeting for the year in which
their term expires and until their successors are elected and qualified,
subject, however, to prior death, resignation, retirement, or removal from
office. At each succeeding annual meeting of our stockholders, the successors
of
the class of directors whose term expires at that meeting shall be elected
to
hold office for a term expiring at the annual meeting of stockholders held
in
the third year following the year of their election. In the event of any
increase or decrease in the authorized number of directors, (i) each director
then serving as such shall nevertheless continue as a director of the class
of
which he or she is a member until the expiration of such director’s current term
or his or her prior death, resignation, retirement, or removal from office,
and
(ii) the newly created or eliminated directorships resulting from such increase
or decrease shall be apportioned by the Board of Directors among the three
classes of directors so that the number of directors in each class is as nearly
equal as possible. To the extent possible, consistent with the foregoing rule,
any newly created directorships shall be added to those classes whose terms of
office are to expire at the earliest dates following such allocation, unless
otherwise provided for from time to time by resolution adopted by a majority
of
the directors then in office, though less than a quorum. No decrease in the
number of directors constituting the whole Board of Directors shall shorten
the
term of an incumbent Director. In the event a vacancy occurs during the term
of
any director (by reason of death, resignation, retirement, removal from office
or otherwise), such vacancy may be filled by the Board of Directors as provided
in the amended bylaws of the Company (for the remainder of the term of the
director who leaves the board and creates the vacancy).
New
Article TENTH would also provide that the total number of directors constituting
the entire Board of Directors will be not less than three nor more than ten,
with the then-authorized number of directors being fixed from time to time
by
resolution of the Board of Directors. This tracks the provisions in our
bylaws.
If
the
proposal is approved by our stockholders, the classified terms of the members
of
the Board of Directors would be applicable to every election of the directors
following the date of effectiveness of the Amendment to the Certificate of
Incorporation.
Our
Board
has evaluated the potential vulnerability of our company and our stockholders
to
the threat of unfair or coercive takeover tactics and has considered the range
of possible responses to such a threat. Although the Board is not currently
aware of any such threat, this proposal and proposal no. 4 are intended to
reduce our vulnerability to unsolicited or hostile attempts to obtain control
of
our company and to increase the likelihood that our stockholders would receive
a
fair price for their shares in transactions relating to such attempts. This
proposal is not being proposed in response to any present attempt known to
the
Board to acquire control of our company, to obtain representation on the Board
of Directors, or to take significant corporate action and we are aware of no
such plans. We are aware, however, that a number of unsolicited acquisition
proposals in connection with takeover activities have employed, or have sought
to employ, tactics which are designed to force a response by the target company
through threats or attempts to secure action without affording a reasonable
opportunity for the Board of such companies to consider whether such proposals
are in the best interests of its stockholders. We have no current intentions
to
adopt or propose anti-takeover measures other than the proposals described
in
this Proxy Statement.
Third
parties frequently accumulate stock positions in public companies in order
to
force a merger or other business combination or to commence a tender or exchange
offer or other hostile attempt to acquire control of a company. We believe
that
unsolicited takeover attempts may be unfair or disadvantageous to our company
and our stockholders because, among other reasons: (i) a non-negotiated takeover
bid may be timed to take advantage of temporarily depressed stock prices; (ii)
a
non-negotiated takeover bid may be designed to foreclose or minimize the
possibility of more favorable competing bids or alternative transactions; (iii)
a non-negotiated takeover bid may involve the acquisition of only a controlling
interest in our common stock, without affording all stockholders the opportunity
to receive the same economic benefits; and (iv) a non-negotiated takeover bid
may often deprive the stockholders of an adequate opportunity to evaluate the
merits of the proposed transaction.
By
contrast, in a transaction in which a potential acquiror must negotiate with
the
Board of Directors, the Board would take into account the underlying and
long-term values of our business and assets, the possibilities for alternative
transactions on more favorable terms, anticipated favorable developments in
our
business not yet reflected in the stock price, and equality of treatment of
all
stockholders.
This
proposal and proposal no. 4 are designed to encourage any person who might
seek
to acquire control of our company to first consult with our Board and to
negotiate the terms of any tender offer or proposed business combination. The
Board believes that, for the protection of our stockholders, any proposed
acquisition of control of our company, and any proposed business combination
in
which we might be involved, should be thoroughly studied by the Board to ensure
that such transaction would be in the best interests of our company and our
stockholders and that all of our stockholders would be treated fairly. In sum,
the Board believes that this proposal and proposal no. 4 are prudent and in
the
best interests of our Company and our stockholders and should be adopted for
their protection.
This
proposal and proposal no. 4, if adopted, may be disadvantageous to the extent
that they have the effect of discouraging a future takeover attempt that is
not
approved by the Board, but which a majority of the stockholders may deem to
be
in their best interests or in which stockholders may receive a substantial
premium for their shares over the then current market value or over their cost
basis in such shares. As a result of such effects of this proposal, stockholders
who might wish to participate in an unsolicited tender offer may not have an
opportunity to do so. These proposals, if adopted, could also delay or frustrate
the assumption of control by a holder of a large block of our shares, even
if
many stockholders considered such an action to be beneficial. Furthermore,
the
adoption of these proposals will not ensure or guarantee that stockholders
will
receive a price for their shares in connection with an acquisition of control
of
our company that reflects the value of such shares, or that the price received
will be fair or equitable, although in the opinion of the Board, the likelihood
that the price will reflect such value and be fair and equitable will be
increased by the adoption of these proposals.
A
copy of
the amendment to our Certificate of Incorporation reflecting the effect of
this
proposed amendment and the other proposed amendments discussed in this Proxy
Statement is attached as Appendix A .
Required
Vote and Recommendation
The
affirmative vote of at least a majority of the issued and outstanding shares
as
of the record date eligible to vote is necessary for approval of this Proposal
1.
THE
BOARD OF DIRECTORS DEEMS PROPOSAL 1 TO BE IN THE BEST INTERESTS OF THE COMPANY
AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE “FOR” APPROVAL
THEREOF.
PROPOSAL
2
ELECTION
OF DIRECTORS
We
currently have eight directors, Gifford A. Dieterle, John Brownlie, Jeffrey
W.
Pritchard, Robert Roningen, Roger A. Newel, Ian A. Shaw, John Postle, Mark
T.
Nesbitt, whose terms each expire at the upcoming annual meeting. If Proposal
no.
1 is approved by stockholders herein, upon filing of the amendment to our
Certificate of Incorporation, our Board of Directors shall be divided into
three
classes designated as Class I, Class II and Class III, respectively, with the
classes of directors serving for staggered three-year terms.
Class
I
Director Nominees
Our
Board
of Directors has nominated Roger Newell and Robert Roningen, for election as
Class I directors. Each of Messrs. Roger Newell and Robert Roningen, has served
as director since the last annual meeting. If elected, Messrs. Roger Newell
and
Robert Roningen, will hold office as Class I directors until our annual meeting
of stockholders held in calendar 2009, or until their respective successors
are
elected and duly qualified, or until their earlier death, resignation or
removal.
Class
II
Director Nominees
Our
Board
of Directors has nominated Ian
Shaw,
John Postle and Mark Nesbitt,
for
election as Class II directors. Each of Messrs. Ian
Shaw,
John Postle and Mark Nesbitt,
has
served as director since the last annual meeting. If elected, Messrs.
Ian
Shaw,
John Postle and Mark Nesbitt,
will
hold office as Class II directors until our annual meeting of stockholders
held
in calendar 2010, or until their respective successors are elected and duly
qualified, or until their earlier death, resignation or removal.
Class
III
Director Nominees
Our
Board
of Directors has nominated Gifford
Dieterle, John Brownlie and Jeffrey Pritchard,
for
election as Class III directors. Each of Messrs. Gifford
Dieterle and Jeffrey Pritchard,
has
served as director since the last annual meeting. Mr. Brownlie was appointed
a
director by our Board in February 2007. If elected, Messrs. Gifford
Dieterle, John Brownlie and Jeffrey Pritchard,
will
hold office as Class III directors until our annual meeting of stockholders
held
in calendar 2010, or until their respective successors are elected and duly
qualified, or until their earlier death, resignation or removal.
In
the
event that Proposal no. 1 is not approved by stockholders, directors elected
at
the meeting will serve until the next annual meeting of stockholders or until
their respective successors are elected and duly qualified, or until their
earlier death, resignation or removal.
Required
Vote and Recommendation
The
two
(2) Class I nominees, two (2) Class II nominees and two (2) Class III nominees
receiving the highest number of affirmative “FOR” votes at the meeting (a
plurality of votes cast) will be elected to serve as directors in those
respective classes.
Set
forth
below is the biographical information of the nominees and Director:
GIFFORD
A. DIETERLE, age 75, is our President, Treasurer and Chairman of our Board
of
Directors. Mr. Dieterle was appointed President in September 1997 and has been
an officer and Chairman since 1981. He has a M.S. in Geology obtained from
New
York University. From 1977 until July 1993, he was Chairman, Treasurer, and
Executive Vice-President of Franklin Consolidated Mining Company. From 1965
to
1987, he was lecturer in geology at the City University of N.Y. (Hunter
Division). Mr. Dieterle has been Secretary-Treasurer of South American Minerals
Inc. since 1997 and a director of that company since 1996.
JOHN
BROWNLIE, age 58, is our Chief Operating Officer and a member of our Board
of
Directors. He has worked for us since May 2006. Mr. Brownlie has provided team
management for mining projects requiring technical, administrative, political
and cultural experience over his 29 year mining career. From 2000 to 2006,
Mr.
Brownlie was a consultant providing mining and mineral related services to
various companies including SRK, Oxus Mining plc and Cemco Inc. From 1995 to
2000, he was the General Manager for the Zarafshan-Newmont Joint Venture in
Uzbekistan, a one-million tonne per month heap leach plant which produced over
400,000 ounces of gold per year. From 1988 to 1995, Mr. Brownlie served as
the
Chief Engineer and General Manager for Monarch Resources in Venezuela, at both
the El Callao Revemin Mill and La Camorra gold projects. Before that, was a
resident of South Africa and associated with numerous mineral projects across
Africa. He is also a mechanical engineer and fluent in Spanish.
JEFFREY
W. PRITCHARD, age 49, is our Vice President - Investor Relations, Secretary
and
a member of our Board of Directors. He has worked for us since 1996. He has
been
in the marketing/public relations field since receiving a Bachelor’s degree from
the State University of New York in 1979. Mr. Pritchard has served as the
Director of Marketing for the New Jersey Devils (1987-1990) and as the Director
of Sales for the New York Islanders (1985-1987). He also was an Executive Vice
President with Long Island based Performance Network, a marketing and publishing
concern from 1990 through 1995.
ROBERT
RONINGEN, age 72, is one of our Senior Vice Presidents and a member of our
Board
of Directors. He has been engaged in the practice of law as a sole practitioner
and is a self-employed consultant geophysicist in Duluth, Minnesota. Mr.
Roningen served as our Secretary until February 2007. From 1988 to August 1993,
he was an officer and director of Franklin Consolidated Mining Company, Inc.
He
graduated from the University of Minnesota in 1957 with a B.A. in geology and
in
1962 with a degree in Law.
ROGER
A.
NEWELL, age 64, a member of our Board of Directors, has been an Executive Vice
President of Kilimanjaro Mining Company Ltd. since September 2007. Kilimanjaro
Mining Company is a private Nevada based company involved in uranium and gold
exploration in Tanzania, Africa. Mr. Newell worked for us from 2000 to September
2007 and was our Vice President - Development until September 2007. From 1974
through 1977, he was a geologist with Kennecott Copper Corporation. From 1977
through 1989, he served as Exploration Manager/Senior Geologist for the Newmont
Mining Corporation and, from 1989 through 1995, was the Exploration Manager
for
Gold Fields Mining Company. He was Vice President Development, for Western
Exploration Company from 1997 through 2000. Since 1995, he has been a senior
consultant in the Minerals Advisory Group LLC, Tucson, Arizona, a company that
provides technical and engineering advice to clients regarding mineral projects.
He has been self-employed as a geologist since 2001. He is a Fellow in the
Society of Economic Geologists and a Past President of that Society’s
Foundation. . He has a M.Sc. from the Colorado School of Mines and a Ph.D.
in
mining and mineral exploration from Stanford University.
IAN
A.
SHAW, age 67, is a member of our Board of Directors and the Board’s Audit and
Compensation Committees. Mr. Shaw has over 32 years of experience in the
mining industry. He has been Managing Director of Shaw & Associates since
1993. Shaw & Associates is a corporate services consulting firm
specializing in corporate finance, regulatory reporting and compliance with
clients that are typically public companies in the resource industry. In the
course of providing consulting services he has accepted positions as an officer
or director with number of his clients. Positions he currently holds include
Director, since 1994, of Metallica Resources Inc., a TSX listed corporation
with
a gold mine in Mexico, and exploration properties in Chile and Alaska; Chief
Financial Officer, since 1995, of Pelangio Mines Inc., a TSX listed
corporation with an interest in a gold property in Canada and gold exploration
properties in Ghana; Vice President, Finance and CFO, since May 2005, of Unor
Inc., a TSX listed company with uranium exploration properties in Canada;
and Chief Financial Officer, since January 2007, of Olivut Resources Ltd.,
a TSX
listed corporation with diamond exploration properties in Canada. Mr. Shaw
is a
Chartered Accountant and received a B. Comm. from Trinity College at the
University of Toronto in 1964.
JOHN
POSTLE, age 66, is a member of our Board of Directors and the Board’s Audit and
Compensation Committees. He is a Consulting Mining Engineer associated
with Scott Wilson Roscoe Postle Associates Inc. In 1985 he was a founding
partner of Roscoe Postle Associates Inc. which later merged with Scott Wilson
Group Plc. Mr. Postle provides mining consulting services to a number of
international financial institutions, corporations, utilities and law
firms. He worked for Cominco Ltd (1965-1970), Falconbridge Ltd (1970-1975)
and D.S. Robertson and Associates (1976-1985) and has worked at a number of
open
pit and underground mining operations in both operating and planning
capacities. Mr. Postle is a Past Chairman of the Mineral Economics
Committee of the Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”),
and was appointed a Distinguished Lecturer of the CIM in 1991. In 1997, he
was awarded the CIM Robert Elver Mineral Economics Award. He is currently
Chairman of a CIM Standing Committee on Ore Reserve Definitions. Mr. Postle
is a
director of Strait Gold Corporation, a Canadian publicly traded company, and
serves as a member of that company’s audit and disclosure committees. Mr.
Postle has a B.A.Sc. Degree in Mining Engineering from the University of British
Columbia in 1965 and a M.Sc. Degree in Earth Sciences from Stanford University
in 1968.
MARK
T.
NESBITT, age 62, is a member of our Board of Directors and the Board’s Audit and
Compensation Committees. Since 1988, he has been a natural resources attorney
in
Denver, Colorado specializing in domestic and international mining transactions,
agreements, negotiations, title due diligence, corporate and general business
counsel. Mr. Nesbitt has been an Adjunct Professor at the University of Denver
School of Law's since 2001, is an active member of the Rocky Mountain Mineral
Law Foundation, having served as a Trustee from 1987 to 1993, and from 2003
to
2006, Co-chairman of the Mining Sessions at the Foundation’s international
natural resource institute in Buenos Aires, Argentina in 2007, Co-chairman
of
the Foundation's Mining Law and Investment in Latin America institute in Lima,
Peru in 2003, and Chairman of the same institute in 2003, and Chairman of the
Foundation's first Land and Permitting Special Institute in 1994. He also has
served continuously over the years on the Foundation's Special Institutes
Committee, Long Range Planning Committee, and numerous other committees. Mr.
Nesbitt is a member of the International, American, Colorado and Denver Bar
Associations, Rocky Mountain Mineral Law Foundation, International Mining
Professionals Society (Treasurer since 2000), and the Colorado Mining
Association. He is also a former Director of the Colorado Mining Association
and
past President of the Rocky Mountain Association of Mineral Landmen. He received
a B.S. degree in Geology from Washington State University in 1968 and a J.D.
from Gonzaga University School of Law in 1975.
MEETINGS
AND COMMITTEES OF THE BOARD
Our
Board
of Directors is responsible for the management and direction of our company
and
for establishing broad corporate policies. A primary responsibility of the
Board
is to provide effective governance over our affairs for the benefit of our
stockholders. In all actions taken by the Board, the Directors are expected
to
exercise their business judgment in what they reasonably believe to be the
best
interests of our company. In discharging that obligation, Directors may rely
on
the honesty and integrity of our senior executives and our outside advisors
and
auditors.
The
Board
of Directors and the Audit Committee of the Board meet periodically throughout
the year to receive and discuss operating and financial reports presented by
our
executive officers as reports by experts and other advisors. The Board held
five
meetings during the fiscal year ended July 31, 2007 in person and
telephonically, and acted by unanimous written consent on seven occasions.
All
directors attended 75% or more of the aggregate meetings.
In
fiscal
2007, the Audit Committee, consisting of all of the non-employee members of
the
Board of Directors, met on four occasions. Representatives of our auditor were
in attendance at one meeting without management present.
Our
Board
of Directors has no standing nominating committee because this function is
handled by the Board of Directors. Nominees to the Board of Directors are
selected by the Board of Directors based on current business and industry
knowledge as well as general business knowledge.
There
are no formal procedures for stockholders to nominate persons to serve as
directors.
Audit
Committee and Audit Committee Expert.
The
Audit
Committee of our Board of Directors consists of Ian A. Shaw, Committee Chairman,
John Postle and Mark T. Nesbitt. The Board of Directors has determined that
all
three members are independent directors as (i) defined in Rule 10A-3(b)(1)(ii)
under the Securities Exchange Act of 1934 (the “Exchange Act”) and (ii) under
Section 121B(2)(a) of the AMEX Company Guide (although our securities are not
listed on the American Stock Exchange or any other national exchange). The
Audit
Committee met four times telephonically in fiscal 2007. All committee members
were present at the meetings.
Mr.
Shaw
serves as the financial expert as defined in Securities and Exchange Commission
rules on the committee. We believe Messrs. Shaw, Postle and Nesbitt to be
independent of management and free of any relationship that would interfere
with
their exercise of independent judgment as members of this committee. The
principal functions of the Audit Committee are to (i) assist the Board in
fulfilling its oversight responsibility relating to the annual independent
audit
of our consolidated financial statements, the engagement of the independent
registered public accounting firm and the evaluation of the independent
registered public accounting firm’s qualifications, independence and performance
(ii) prepare the reports or statements as may be required by the securities
laws, (iii) assist the Board in fulfilling its oversight responsibility relating
to the integrity of our financial statements and financial reporting process
and
our system of internal accounting and financial controls, (iv) discuss the
financial statements and reports with management, including any significant
adjustments, management judgments and estimates, new accounting policies and
disagreements with management, and (vi) review disclosures by independent
accountants concerning relationships with us and the performance of our
independent accountants. Our
Audit
Committee’s charter is available on our website at www.capitalgoldcorp.com ,
where it may be found under the Corporate Info; Corporate Governance
tab.
Audit
Committee Report.
The
primary responsibility of the Audit Committee (the “Committee”) is to assist the
Board of Directors in discharging its oversight responsibilities with respect
to
financial matters and compliance with laws and regulations. The primary methods
used by the Committee to fulfill its responsibility with respect to financial
matters are:
|
·
|
To
appoint, evaluate, and, as the Committee may deem appropriate, terminate
and replace Capital Gold’s independent registered public
accountants;
|
|
·
|
To
monitor the independence of Capital Gold’s independent registered public
accountants;
|
|
·
|
To
determine the compensation of Capital Gold’s independent registered public
accountants;
|
|
·
|
To
pre-approve any audit services, and any non-audit services permitted
under
applicable law, to be performed by Capital Gold’s independent registered
public accountants;
|
|
·
|
To
review Capital Gold’s risk exposures, the adequacy of related controls and
policies with respect to risk assessment and risk
management;
|
|
·
|
To
monitor the integrity of Capital Gold’s financial reporting processes and
systems of control regarding finance, accounting, legal compliance
and
information systems;
|
|
·
|
To
facilitate and maintain an open avenue of communication among the
Board of
Directors, management and Capital Gold’s independent registered public
accountants.
|
In
discharging its responsibilities relating to internal controls, accounting
and
financial reporting policies and auditing practices, the Committee discussed
with Capital Gold’s independent registered public accountants, Wolinetz, Lafazan
& Company, P.C., the overall scope and process for its audit. The Committee
has met with Wolinetz, Lafazan & Company, P.C., with and without management
present, to discuss the results of its examinations and the overall quality
of
Capital Gold’s financial reporting.
The
Committee has discussed with Wolinetz, Lafazan & Company, P.C. its judgments
about the quality, in addition to the acceptability, of the Capital Gold’s
accounting principles as applied in Capital Gold’s financial reporting, as
required by Statement on Auditing Standards No. 90 “Communications with Audit
Committees.”
The
Committee also has received a letter from Wolinetz, Lafazan & Company, P.C.
that is required by the Independence Standards Board Standard No. 1,
Independence
Discussions with Audit Committees, and
has
discussed with Wolinetz, Lafazan & Company, P.C. their independence.
The
Committee has met and held discussions with management. The Committee has
reviewed and discussed with management Capital Gold’s audited consolidated
financial statements as of and for the fiscal years ended July 31, 2007 and
2006.
Based
on
the reviews and discussions referred to above, the Committee recommended to
the
Board of Directors that the audited financial statements referred to above
be
included in Capital Gold’s Annual Report for the year ended July 31,
2007.
This
report is respectfully submitted by the members of the Audit Committee of the
Board of Directors.
Ian
A.
Shaw,
Chairman
John
Postle
Mark
T.
Nesbitt
Compensation
Committee.
In
May
2007, our Board of Directors established a Compensation Committee consisting
of
Messrs. Shaw, Postle and Nesbitt, our independent directors. The principal
functions of the Compensation Committee are to advise and makes recommendations
to our Board of Directors regarding matters relating to the compensation of
directors, officers and senior management. The Compensation Committee met once
telephonically in fiscal 2007. All committee members were present at the
meetings.
Communication
with the Board of Directors
Interested
parties wishing to contact the Board of Directors of the Company may do so
by
writing to the following address: Board of Directors, 76
Beaver
Street, 14th Floor, New York, NY 10005, Attn: Jeffrey W. Pritchard,
Secretary.
All
letters received will be categorized and processed by Mr. Pritchard and then
forwarded to the Company’s Board or Directors.
Changes
to Director nominee procedures
In
August
2006, we amended our bylaws to require stockholders that seek to bring business
before a meeting of stockholders, including nominations of candidates for
election as directors, to provide notice of such business to us not less than
90
days nor more than 120 days prior to the date of the meeting (provided that,
in
the event that public disclosure of the meeting date is first made less than
120
days prior to the meeting date, such notice must be received by us not later
than the close of business on the tenth day following such public disclosure).
With regard to nominations of persons for election to the Board of Directors,
the notice must set forth (a) as to each proposed nominee, (i) the name, age,
business address and residence address of the nominee, (ii) the principal
occupation or employment of the nominee, (iii) the number of our shares owned
beneficially or of record by the nominee and (iv) any other information relating
to the nominee that would be required to be disclosed in a proxy statement
to be
made in connection with solicitations of proxies for election of directors
pursuant to Section 14 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"); and (b) as to the Stockholder giving the notice, (i) the name
and record address of such Stockholder, (ii) the number of our shares owned
beneficially or of record by such Stockholder, (iii) a description of all
arrangements or understandings between such Stockholder and each proposed
nominee and any other person or persons (including their names) pursuant to
which the nomination(s) are to be made by such Stockholder, (iv) a
representation that such Stockholder intends to appear in person or by proxy
at
the meeting to nominate the persons named in its notice and (v) any other
information relating to such Stockholder that would be required to be disclosed
in a proxy statement to be made in connection with solicitations of proxies
for
election of directors pursuant to Section 14 of the Exchange Act. Such notice
must be accompanied by a written consent of each proposed nominee to being
named
as a nominee and to serve as a director if
elected.
Code
of Ethics and Business Conduct
Our
Board
of Directors adopted a code of ethics and business conduct for officers,
directors and employees that went into effect on October 22, 2003. This code
has
been presented and reviewed by each officer, director and employee. You may
obtain a copy of this code by visiting our web site at www.capitalgoldcorp.com
or by written request to our Office Manager at 76
Beaver
Street, 14th Floor, New York, NY 10005.
Our
Board of Directors is required to approve any waivers of the code of ethics
and
business conduct for Directors or executive officers and we are required to
disclose any such waiver in a Current Report on Form 8-K within four business
days.
Director
Attendance at Annual Meetings of Stockholders
Directors
are encouraged, but not required, to attend the Annual Meeting of
Stockholders.
PROPOSAL
3
APPROVAL
OF AN AMENDMENT TO THE CERTIFICATE OF INCORPORATION INCREASING THE AUTHORIZED
COMMON STOCK FROM
250,000,000
SHARES TO 300,000,000 SHARES
Our
Board
of Directors, subject to approval of our stockholders, authorized an amendment
to our Certificate of Incorporation to increase the number of our authorized
shares of common stock from 250,000,000 to 300,000,000. If this proposal is
approved by our stockholders, we will file an amendment to our Certificate
of
Incorporation with the Delaware Secretary of State. A copy of that amendment
is
attached hereto as Appendix A. The Board believes such action to be in our
best
interests for the reasons set forth below.
As
of
December 3, 2007, we had approximately 174,243,646 shares of common stock
outstanding and approximately 18,750,042 shares reserved for future issuance
under outstanding options, warrants and our 2006 Equity Incentive Plan, leaving
approximately 57,006,312 shares of common stock available for future
issuances.
Our
Board
of Directors believes that the proposed increase in authorized common shares
will benefit the Company by providing flexibility to issue common stock for
a
variety of business and financial objectives in the future without the necessity
of delaying such activities for further stockholder approval, except as may
be
required in particular cases by our charter documents, applicable law or the
rules of any stock exchange or national securities association trading system
on
which our securities may be listed or quoted.
We
anticipate using such shares, or the proceeds from the sale thereof, to retain
the ability to acquire additional mining prospects, properties and/or projects,
acquire equipment, expand production and/or paying off debt. However, we have
no
arrangements, understandings, agreements or commitments at this time with
respect to the issuance of the new shares that would be authorized if this
proposal is approved.
This
amendment and the creation of additional shares of authorized common stock
will
not alter the current number of issued shares or change the relative rights
and
limitations of the shares of common stock. The terms of the additional shares
of
common stock will be identical to those of the currently outstanding shares
of
common stock. However, because holders of common stock have no preemptive rights
to purchase or subscribe for any unissued stock of the Company, any issuance
of
additional shares of common stock will reduce the current stockholders'
percentage ownership interest in the total outstanding shares of common stock.
In
addition, our Board of Directors could issue large blocks of common stock to
fend off unwanted tender offers or hostile takeovers without further stockholder
approval.
Required
Vote and Recommendation
The
affirmative vote of at least a majority of the issued and outstanding shares
as
of the record date eligible to vote is necessary for approval of Proposal 3.
THE
BOARD OF DIRECTORS DEEMS PROPOSAL 3 TO BE IN THE BEST INTERESTS OF THE COMPANY
AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE “FOR” APPROVAL
THEREOF.
PROPOSAL
4
APPROVAL
OF AN AMENDMENT TO THE CERTIFICATE OF INCORPORATION TO PERMIT STOCKHOLDER ACTION
TO BE TAKEN ONLY AT A DULY CALLED ANNUAL OR SPECIAL MEETING OF STOCKHOLDERS
AND
ELIMINATE STOCKHOLDER ACTION BY WRITTEN CONSENT
Our
Board
of Directors, subject to approval of our stockholders, authorized an amendment
to our Certificate of Incorporation to permit stockholder action to be taken
only at a duly called annual or special meeting of stockholders and eliminate
stockholder action by written consent. If this proposal is approved by our
stockholders, we will file an amendment to our Certificate of Incorporation
with
the Delaware Secretary of State. A copy of that amendment is attached hereto
as
Appendix A. The Board believes such action to be in our best interests for
the
reasons set forth in Proposal no. 1 above. The effects of approving this charter
amendment also are set forth in Proposal no. 1.
Required
Vote and Recommendation
The
affirmative vote of at least a majority of the issued and outstanding shares
as
of the record date eligible to vote is necessary for approval of Proposal 4.
THE
BOARD OF DIRECTORS DEEMS PROPOSAL 4 TO BE IN THE BEST INTERESTS OF THE COMPANY
AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE “FOR” APPROVAL
THEREOF.
PROPOSAL
5
RATIFICATION
OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
The
Board
of Directors, upon the recommendation of the Audit Committee, has appointed
the
firm of
Wolinetz, Lafazan & Company, P.C.
(“WL”)
as our independent registered public accountants for the fiscal year ending
July
31, 2008 subject to ratification by the stockholders.
WL
audited our financial statements for the years ended July 31, 2007 and 2006.
All
audit
and professional services provided by WL, Certified Public Accountants, will
be
approved in advance by the Audit Committee to assure such services do not impair
the auditor's independence from us. The total aggregate fees billed by WL were
$140,000 and $135,000 for the fiscal years ended July 31, 2007 and 2006,
respectively. The following table shows the detailed fees billed to us by WL
for
professional services rendered during these fiscal years.
| |
|
Amount
($)
|
|
|
Description
of Fees
|
|
2007
|
|
2006
|
|
|
Audit
Fees
|
|
$
|
130,000
|
|
$
|
128,000
|
|
|
Audit-Related
Fees
|
|
|
-
|
|
|
-
|
|
|
Tax
Fees
|
|
|
10,000
|
|
|
7,000
|
|
|
All
Other Fees
|
|
|
-
|
|
|
-
|
|
| |
|
|
|
|
|
|
|
|
Total
|
|
$
|
140,000
|
|
$
|
135,000
|
|
Audit
Fees
Represents
fees for professional services provided for the audit of our annual financial
statements, services that are performed to comply with generally accepted
auditing standards, and review of our financial statements included in our
quarterly reports and services in connection with statutory and regulatory
filings.
Audit-Related
Fees
Represents
the fees for assurance and related services that are reasonably related to
the
performance of the audit or review of our financial statements. The Board of
Directors considers WL to be well qualified to serve as our independent public
accountants.
The
Audit
Committee will pre-approve all auditing services and the terms thereof (which
may include providing comfort letters in connection with securities
underwriting) and non-audit services (other than non-audit services prohibited
under Section 10A(g) of the Exchange Act or the applicable rules of the SEC
or
the Public Company Accounting Oversight Board) to be provided to us by the
independent auditor; provided, however, the pre-approval requirement is waived
with respect to the provisions of non-audit services for us if the "de minimus"
provisions of Section 10A(i)(1)(B) of the Exchange Act are satisfied. This
authority to pre-approve non-audit services may be delegated to one or more
members of the Audit Committee, who shall present all decisions to pre-approve
an activity to the full Audit Committee at its first meeting following such
decision. The Audit Committee may review and approve the scope and staffing
of
the independent auditors' annual audit plan.
Tax
Fees
This
represents professional services rendered for tax compliance, tax advice and
tax
planning.
All
Other
Fees
WL
was
paid no other fees for professional services during the fiscal years ended
July
31, 2007 and 2006.
The
Board
of Directors considers WL to be well qualified to serve as our independent
public accountants.
Representatives
of WL will be available telephonically at the annual meeting, will have the
opportunity to make a statement if they desire to do so and are expected to
be
available to respond to appropriate questions.
Required
Vote and Recommendation
The
affirmative vote of at least a majority of the shares represented and voting
at
the Annual Meeting is necessary for approval of Proposal 5.
THE
BOARD OF DIRECTORS DEEMS PROPOSAL 5 TO BE IN THE BEST INTERESTS OF THE COMPANY
AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE "FOR" APPROVAL
THEREOF.
INFORMATION
CONCERNING EXECUTIVE OFFICERS
The
following sets forth biographical information about our executive officers
and
key personnel:
|
Name
|
Age
|
Position
|
| |
|
|
|
Gifford
A. Dieterle
|
75
|
President,
Treasurer & Chairman
of the Board
|
| |
|
|
|
John
Brownlie
|
58
|
Chief
Operating Officer
|
| |
|
|
|
Jeffrey
W. Pritchard
|
49
|
Vice
President - Investor Relations and
Secretary
|
| |
|
|
|
Christopher
M. Chipman
|
35
|
Chief
Financial Officer
|
| |
|
|
|
Robert
Roningen
|
72
|
Senior
Vice President
|
| |
|
|
|
J.
Scott Hazlitt
|
55
|
Vice
President - Mine Development
|
For
biographical information about Gifford A. Dieterle, John Brownlie, Jeffrey
W.
Pritchard and Robert Roningen, please see the discussion under the heading
“Proposal 1 Election of Directors” above.
CHRISTOPHER
M. CHIPMAN, Chief Financial Officer. Mr. Chipman has been our Chief Financial
Officer since March 1, 2006. Since November 2000, Mr. Chipman has been a
managing member of Chipman & Chipman, LLC, a consulting firm that assists
public companies with the preparation of periodic reports required to be filed
with the Securities and Exchange Commission and compliance with Section 404
of
the Sarbanes Oxley Act of 2002. The firm also provides outsourced financial
resources to clients assisting in financial reporting, forecasting and
accounting services. Mr. Chipman is a CPA and, from 1996 to 1998, he was a
senior accountant with the accounting firm of Grant Thornton LLP. Mr. Chipman
was the Controller of Frontline Solutions, Inc., a software company (March
2000
to November 2000); a Senior Financial Analyst for GlaxoSmithKline (1998-2000);
and an Audit Examiner for Wachovia Corporation (1994-1996). He received a B.A.
in Economics from Ursinus College in 1994. He is a member of the American and
Pennsylvania Institute of Certified Public Accountants. Mr. Chipman devotes
approximately 85% of his time to our business.
J.
SCOTT
HAZLITT, Vice President - Mine Development, has been in the mining business
since 1974. Since 2001, he has focused on development of our El Chanate
concessions. Currently, he is involved in mine expansion plans and corporate
development. He has worked primarily in reserves, feasibility, development
and mine operations. Mr. Hazlitt was a field geologist for ARCO Syncrude
Division at their CB oil Shale project in 1974 and 1975. He was a contract
geologist for Pioneer Uravan and others from 1975 to 1977. He was a mine
geologist for Cotter Corporation in 1978 and 1979, and was a mine geologist
for
ASARCO from 1979 to 1984. He served as Vice President of Exploration for Mallon
Minerals from 1984 to 1988. From 1988 to 1992, Mr. Hazlitt was a project
geologist and Mine Superintendent for the Lincoln development project. From
1992
to 1995, he was self-employed as a consulting mining geologist in California
and
Nevada. He was Mine Operations Chief Geologist for Getchell Gold from 1995
to
1999. His work experience has included precious metals, base metals, uranium,
and oil shale. Mr. Hazlitt served as mine manager at our Hopemore Mine in
Leadville, Colorado starting in November 1999. His highest educational degree
is
Master of Science from Colorado State University. He is a registered geologist
in the state of California.
EXECUTIVE
COMPENSATION
Summary
Compensation Table
The
following table sets forth the total compensation paid to or earned by our
named
executive officers, as that term is defined in Item 402(a)(2) of Regulation
S-B
as of our fiscal year ended July 31, 2007:
|
Name
&
Principal
Position
|
|
Year
|
|
Salary
($)
|
|
Bonus
($)
|
|
Stock
Awards
(2)
|
|
Option
Awards
(1)
|
|
Non-Equity
Incentive
Plan
Compen-
sation
|
|
Non-
qualified
Deferred
Compen-
sation
Earnings
|
|
All
Other
Compen-
sation
($)
|
|
Total
($)
|
|
Gifford
A. Dieterle,
Director,
Chairman, Treasurer and CEO
|
|
2007
|
|
$
|
180,000
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
180,000
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John
Brownlie, Director and COO
|
|
2007
|
|
$
|
150,000
|
|
$
|
-
|
|
$
|
225,000
|
|
$
|
34,000
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
409,000
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Christopher
M. Chipman, CFO
|
|
2007
|
|
$
|
118,000
|
|
$
|
-
|
|
$
|
-
|
|
$
|
79,000
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
197,000
|
|
Notes:
|
|
(1)
|
|
Based
on Black Scholes Pricing Model of valuing options. Total fair value
of
option awards granted in 2007 was $113,000.
|
| |
|
|
|
(2)
|
|
Issuance
of shares based on the fair market value of the Company’s common stock on
the date of grant.
|
Outstanding
Equity Awards At Fiscal Year-End
The
following table provides information concerning unexercised options for each
of
our named executive officers, as that term is defined in Item 402(a)(2) of
Regulation S-B as of our fiscal year ended July 31, 2007:
|
Name
and Principal
Position
|
|
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
|
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
|
|
Equity
Incentive
Plan
Awards:
Number
of
Securities
Underlying
Unexercised
Unearned
Options
|
|
|
Option
Exercise
Price
|
|
|
Option
Expiration
Date
|
|
|
Gifford
A. Dieterle, Director,
Chairman, Treasurer and CEO
|
|
|
250,000
|
|
|
-
|
|
|
-
|
|
$
|
0.32
|
|
|
7/31/08
|
|
|
John
Brownlie, Director and COO
|
|
|
250,000
|
|
|
-
|
|
|
-
|
|
$
|
0.36
|
|
|
12/13/08
|
|
| |
|
|
200,000
|
|
|
150,000
|
|
|
150,000
|
|
$
|
0.32
|
|
|
5/12/08
|
|
|
Christopher
M. Chipman, CFO
|
|
|
50,000
|
|
|
-
|
|
|
-
|
|
$
|
0.34
|
|
|
3/1/08
|
|
| |
|
|
100,000
|
|
|
-
|
|
|
-
|
|
$
|
0.36
|
|
|
12/13/08
|
|
| |
|
|
500,000
|
|
|
-
|
|
|
-
|
|
$
|
0.38
|
|
|
6/13/09
|
|
Director
Compensation
The
following table sets forth the compensation paid to our directors for the fiscal
year ended July 31, 2007.
|
Name
|
|
|
Fees
Earned
or
Paid
in
Cash
($)
|
|
|
Stock
Awards
($)
|
|
|
Option
Awards
($)
(1)
|
|
|
Non-Equity
Incentive
Plan
Compensation
($)
|
|
|
Nonqualified
Deferred
Compensation
Earnings
($)
|
|
|
All
Other
Compensation
($)
|
|
|
Total
($)
|
|
|
Ian
A. Shaw, Director
|
|
$
|
12,000
|
|
|
-
|
|
$
|
13,239
|
|
|
-
|
|
|
-
|
|
|
-
|
|
$
|
25,239
|
|
|
John
Postle, Director
|
|
$
|
12,000
|
|
|
-
|
|
$
|
13,239
|
|
|
-
|
|
|
-
|
|
|
-
|
|
$
|
25,239
|
|
|
Mark
T. Nesbitt, Director
|
|
$
|
12,000
|
|
|
-
|
|
$
|
13,239
|
|
|
-
|
|
|
-
|
|
|
-
|
|
$
|
25,239
|
|
|
Robert
Roningen, Director
|
|
$
|
24,000
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
$
|
24,000
|
|
|
Notes:
|
|
(1)
Based on Black Scholes Pricing Model of valuing options. Total fair
value
of option awards granted in 2007 was
$39,717.
|
During
the fiscal year ended July 31, 2007, our Independent Directors each received
a
fee of $1,000 per month. Robert Roningen, director, received a fee of $2,000
per
month for legal and consulting services during the fiscal year ended July 31,
2007. Directors are not otherwise compensated for acting in their capacity
as
Directors. Directors are reimbursed for their accountable expenses incurred
in
attending meetings and conducting their duties. On August 29, 2007, we increased
directors’ compensation to our independent directors and to Robert Roningen by
$1,000 per month.
Employment
and Change of Control Agreements
Effective
July 31, 2006, we entered into employment agreements with the following
executive officers: Gifford A. Dieterle, our President and Treasurer, Roger
A.
Newell, our then Vice President of Development, Jack V. Everett, our then Vice
President of Exploration, and Jeffrey W. Pritchard, our Vice President of
Investor Relations. Agreements with John Brownlie, our Chief Operating Officer,
and Christopher Chipman, our Chief Financial Officer, are discussed
below.
The
agreements run for a period of three years and automatically renew for
successive one-year periods unless we or the executive provides the other party
with written notice of our or his intent not to renew at least 30 days prior
to
the expiration of the then current employment period.
Under
the
original agreements, Mr. Dieterle is entitled to a base annual salary of at
least $180,000 and each of the other executives is entitled to a base annual
salary of at least $120,000. Each executive is entitled to a bonus or salary
increase in the sole discretion of our board of directors. In addition, each
of
the executives received two year options to purchase an aggregate of 250,000
shares of our common stock at an exercise price of $0.32 per share (the closing
price on July 31, 2006).
On
August
29, 2007, based on the recommendation of the Compensation Committee of our
Board
of Directors after review of an Executive Compensation Market Analysis and
Report by an independent human resource professional services firm, we increased
the salaries of our executive officers to be commensurate with industry
standards. The new salaries are as follows: Gifford A. Dieterle, President,
Treasurer and Chairman of the Board, $250,000; John Brownlie, Chief Operating
Officer, $225,000; Christopher Chipman, Chief Financial Officer, $175,000
(consulting fee); Jeffrey W. Pritchard, Vice President - Investor Relations
and
Secretary, $195,000; and J. Scott Hazlitt, Vice President - Mine Development,
$135,000. The salary increase for Mr. Brownlie and the consulting fee increase
for Mr. Chipman were retroactive to May 1, 2007 and the salary increase for
Mr.
Pritchard was retroactive to August 1, 2007.
We
have
the right to terminate any executive’s employment for cause or on 30 days’ prior
written notice without cause or in the event of the executive’s disability (as
defined in the agreements). The agreements automatically terminate upon an
executive’s death. “Cause” is defined in the agreements as (1) a failure or
refusal to perform the services required under the agreement; (2) a material
breach by executive of any of the terms of the agreement; or (3) executive’s
conviction of a crime that either results in imprisonment or involves
embezzlement, dishonesty, or activities injurious to us or our reputation.
In
the
event that we terminate an executive’s employment without cause or due to the
disability of the executive, the executive will be entitled to a lump sum
severance payment equal to one month’s salary, in the case of termination for
disability, and up to 12 month’s salary (depending upon years of service), in
the case of termination without cause.
Each
executive has the right to terminate his employment agreement on 60 days’ prior
written notice or, in the event of a material breach by us of any of the terms
of the agreement, upon 30 days’ prior written notice. In the event of a claim of
material breach by us of the agreement, the executive must specify the breach
and our failure to either (i) cure or diligently commence to cure the breach
within the 30 day notice period, or (ii) dispute in good faith the existence
of
the material breach. In the event that an agreement terminates due to our
breach, the executive is entitled to severance payments in equal monthly
installments beginning
in the month following the executive’s termination equal to three month’ salary
plus one additional month’s salary for each year of service to us. Severance
payments cannot exceed 12
month’s salary.
In
conjunction with the employment agreements, our board of directors deeming
it
essential to the best interests of our stockholders to foster the continuous
engagement of key management personnel and recognizing that, as is the case
with
many publicly held corporations, a change of control might occur and that such
possibility, and the uncertainty and questions which it might raise among
management, might result in the departure or distraction of management personnel
to the detriment of our company and our stockholders, determined to reinforce
and encourage the continued attention and dedication of members of our
management to their engagement without distraction in the face of potentially
disturbing circumstances arising from the possibility of a change in control
of
our company, we entered into identical agreements regarding change in control
with the executives. Each
of
the agreements regarding change in control continues through December 31, 2009
and extends automatically to the third anniversary thereof unless we give notice
to the executive prior to the date of such extension that the agreement term
will not be extended.
Notwithstanding the foregoing, if a change in control occurs during the term
of
the agreements, the term of the agreements will continue through the second
anniversary of the date on which the change in control occurred. Each of the
agreements entitles the executive to change of control benefits, as defined
in
the agreements and summarized below, upon his termination of employment with
us
during a potential change in control, as defined in the agreements, or after
a
change in control, as defined in the agreements, when his termination is caused
(1) by us for any reason other than permanent disability or cause, as defined
in
the agreement (2) by the executive for good reason as defined in the agreements
or, (3) by the executive for any reason during the 30 day period commencing
on
the first date which is six months after the date of the change in control.
Each
executive would receive a lump sum cash payment of three times his base salary
and outplacement benefits. Each agreement also provides that the executive
is
entitled to a payment to make him whole for any federal excise tax imposed
on
change of control or severance payments received by him.
In
May
2006, we entered into an employment agreement with John Brownlie, pursuant
to
which Mr. Brownlie originally served as Vice President Operations. Mr. Brownlie
became our Chief Operating Officer in February 2007. Pursuant to his employment
agreement, as amended, Mr. Brownlie now receives a base annual salary of
$225,000 and is entitled to annual bonuses. Upon his employment, he received
options to purchase an aggregate of 200,000 shares of our common stock at an
exercise price of $.32 per share. 50,000 options vested immediately and the
balance vest upon our achieving “Economic Completion” as that term is defined in
the loan agreement with Standard Bank plc (when we have been operating at
anticipated capacity for 60 to 90 days after mining operations commenced).
The
term of the options is two years from the date of vesting. The agreement runs
for an initial two year period and automatically renews thereafter for
additional one year periods unless terminated by either party within 30 days
of
a renewal date. We can terminate the agreement for cause or upon 30 days notice
without cause. Mr. Brownlie can terminate the agreement upon 60 days notice
without cause or, if there is a breach of the agreement by us that is not timely
cured, upon 30 days notice. In the event that we terminate him without cause
or
he terminates due to our breach, he will be entitled to certain severance
payments. In addition, Mr. Brownlie is entitled to change of control benefits
comparable to those of our other executive officers (see discussion
above).
On
September 14, 2007, we entered into a Second Amended Engagement Agreement (the
“Engagement Agreement”) with Christopher Chipman, our Chief Financial Officer,
effective May 1, 2007. The Engagement Agreement supersedes and replaces Mr.
Chipman’s prior agreement that expired on August 31, 2007. Pursuant to the
Engagement Agreement, Mr. Chipman is engaged as our Chief Financial Officer
and
devotes approximately 85% of his time to our business. He receives a monthly
fee
of $14,583. The Engagement Agreement expires on August 31, 2009 and
automatically renews for successive one-year periods, unless either party gives
at least 30 days prior notice to the other party of its intent not to renew.
Mr.
Chipman can terminate the Engagement Agreement on 60 days prior notice. We
can
terminate the Engagement Agreement without cause on 30 days prior notice and
for
cause (as defined in the Engagement Agreement). The Engagement Agreement also
terminates upon Mr. Chipman’s disability (as defined in the Engagement
Agreement) or death. In the event that we terminate the Engagement Agreement
without cause, Mr. Chipman will be entitled to a cash termination payment equal
to his Annual Fee in effect upon the date of termination, payable in equal
monthly installments beginning in the month following his termination. In the
event the Engagement Agreement is terminated by Mr. Chipman at his election
or
due to his death or disability, Mr. Chipman will be entitled to the fees
otherwise due and payable to him through the last day of the month in which
such
termination occurs.
In
conjunction with Engagement Agreement, we entered into a change of control
agreement similar to the agreements entered into with our other executive
officers. The change of control agreement continues through August 31, 2009
and
extends automatically to the next anniversary thereof unless we give notice
to
Mr. Chipman prior to the date of such extension that the agreement term will
not
be extended. Notwithstanding the foregoing, if a change in control occurs during
the term of the change of control agreement, the term of the agreement will
continue through the anniversary of the date on which the change in control
occurred. The change of control agreement entitles Mr. Chipman to change of
control benefits, as defined in the agreement and summarized below, upon his
termination of employment with us during a potential change in control (as
defined in the agreement) or after a change in control (as defined in the
agreement) when his termination is caused (1) by us for any reason other than
permanent disability or cause, as defined in the agreement (2) by Mr. Chipman
for good reason (as defined in the agreement) or, (3) by Mr. Chipman for any
reason during the 30 day period commencing on the first date which is six months
after the date of the change in control. Mr. Chipman would receive a lump sum
cash payment equal to three times his base annual fee plus three times his
bonus
award for the year immediately preceding the year of the change in control,
and
outplacement benefits. The change of control agreement also provides that Mr.
Chipman is entitled to a payment to make him whole for any federal excise tax
imposed on change of control or severance payments received by him.
In
connection with the original engagement agreement with Mr. Chipman, in March
2006, Mr. Chipman received a two year option to purchase an aggregate of 50,000
shares of our common stock at an exercise price of $.34 per share. These options
are now fully vested.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
In
January 2006, we extended the following stock options through January 3, 2007,
all of which were exercisable at $0.05 per share: Messrs. Dieterle - 1,050,000
shares; Roningen - 500,000 shares; Pritchard - 327,727 shares; Newell - 500,000
shares; and Hazlitt - 25,000 shares. These options were exercised in 2007 for
aggregate gross proceeds of $122,000.
Upon
their engagement with us, we issued 50,000 two year options to Christopher
Chipman, our Chief Financial Officer, (March 2006) and 200,000 two year options
to John Brownlie, our Chief Operating Officer, (May 2006). Mr. Chipman’s options
are exercisable at $.34 per share and are now fully vested. Mr. Brownlie’s
options are exercisable at $.32 per share. 50,000 of Mr. Brownlie’s options
vested upon issuance and the balance vest upon our achieving “Economic
Completion” as that term is defined in the loan agreement with Standard Bank
plc.
On
November 30, 2006, our board of directors granted 100,000 common stock options
to each of John Postle, Ian A. Shaw and Mark T. Nesbitt, our independent
directors. The options are to purchase shares of our common stock at an exercise
price of $0.33 per share (the closing price of our common stock on that date)
for a period of two years. We utilized the Black-Scholes method to fair value
the 300,000 options received by the directors and recorded approximately $40,000
as equity based compensation expense.
On
December 13, 2006, we issued two year options to purchase our common stock
at an
exercise price of $0.36 per share to Mr. Brownlie and Mr. Chipman. These options
are for the purchase of 250,000 shares and 100,000 shares, respectively. We
utilized the Black-Scholes method to fair value the 350,000 options received
by
these individuals and recorded approximately $48,000 as stock based compensation
expense.
On
March
22, 2007, we issued 500,000 shares of common stock to Mr. Brownlie under our
2006 Equity Incentive Plan. The fair value of the services provided in March
2007 amounted to $225,000 or $0.45 per share.
In
May
2007, we issued an aggregate of 620,455 shares upon the exercise of options
by
our officers and directors for gross proceeds of $ 137,000
as follows: 70,455 shares to Gifford A. Dieterle, 50,000 shares to Jeffrey
W.
Pritchard, and 250,000 shares each to Roger A. Newell and the wife of Robert
Roningen.
On
June
13, 2007, we issued two year options to purchase our common stock at an exercise
price of $0.384 per share to Mr. Chipman . These options are for the purchase
of
500,000 shares and were issued under the 2006 Equity-Incentive Plan. We utilized
the Black-Scholes Method to fair value these options and recorded approximately
$65,000 as equity based compensation expense.
During
the years ended July 31, 2006, we paid Roger Newell, our then V.P. Development,
$68,500 for professional geologist and management services rendered to us.
During the years ended July 31, 2006, we paid Jack V. Everett, our then V.P.
Exploration, consulting fees of $88,500. During the years ended July 31, 2007
and 2006, we paid Robert Roningen, our Senior Vice President, legal and
consulting fees of $24,000 and $8,000, respectively.
We
utilize Caborca Industrial S.A. de C.V., a Mexican corporation 100% owned by
Messrs. Dieterle and Pritchard, two of our officers and directors for mining
support services. These services include but are not limited to the payment
of
mining salaries and related costs. Caborca Industrial bills us for these
services at cost. Mining expenses charged by it amounted to approximately
$702,000 and $122,000 for the year ended July 31, 2007 and 2006 and eliminate
upon consolidation.
COMPLIANCE
WITH SECTION 16(a) OF
THE
SECURITIES EXCHANGE ACT OF 1934
To
our
knowledge, during the fiscal year ended July 31, 2007, based solely on a review
of such materials as are required by the Securities and Exchange Commission,
no
officer, director or beneficial holder of more than ten percent of our issued
and outstanding shares of Common Stock failed to timely file with the Securities
and Exchange Commission any form or report required to be so filed pursuant
to
Section 16(a) of the Securities Exchange Act of 1934, except that, Robert
Roningen, filed Forms 4 late for an aggregate of 24 transactions, Jack Everett,
a former Vice President, filed a Form 4 late for an aggregate of four
transactions, Jeffrey Pritchard filed a Form 4 late for one transaction and
Scott Hazlitt filed a Form 4 late for one transaction.
PRINCIPAL
STOCKHOLDERS
The
following table sets forth as of December 3, 2007, the number and percentage
of
outstanding shares of common stock beneficially owned by:
| |
·
|
Each
person, individually or as a group, known to us to be deemed the
beneficial owners of five percent or more of our issued and outstanding
Common Stock;
|
| |
·
|
each
of our Directors and the Named Executives;
and
|
| |
·
|
all
of our officers and Directors as a group.
|
As
of the
foregoing date, there were no other persons, individually or as a group, known
to us to be deemed the beneficial owners of five percent or more of the issued
and outstanding Common Stock.
This
table is based upon information supplied by Schedules 13D and 13G, if any,
filed
with the Securities and Exchange Commission, and information obtained from
our
directors and named executives. For purposes of this table, a person or group
of
persons is deemed to have “beneficial ownership” of any shares of Common Stock
which such person has the right to acquire within 60 days of December
3,
2007.
For
purposes of computing the percentage of outstanding shares of Common Stock
held
by each person or group of persons named in the table, any security which such
person or persons has or have the right to acquire within such date is deemed
to
be outstanding but is not deemed to be outstanding for the purpose of computing
the percentage ownership of any other person. Except as indicated in the
footnotes to this table and pursuant to applicable community property laws,
we
believe, based on information supplied by such persons, that the persons named
in this table have sole voting and investment power with respect to all shares
Common Stock which they beneficially own. Unless otherwise noted, the address
of
each of the principal stockholders is care of us at 76 Beaver Street,
14th
floor,
New York, NY10005.
|
Name
and Address
|
|
Amount
& Nature
|
|
|
|
|
of
Beneficial
|
|
of
Beneficial
|
|
Approximate
|
|
|
Owner
|
|
Ownership
|
|
Percentage(1)
|
|
| |
|
|
|
|
|
|
|
|
Gifford
A. Dieterle*
|
|
|
2,762,455
|
(2)
|
|
1.6
|
%
|
| |
|
|
|
|
|
|
|
|
Robert
Roningen*
|
|
|
1,718,750
|
(3)
|
|
1.0
|
%
|
|
2955
Strand Road
|
|
|
|
|
|
|
|
|
Duluth,
MN 55804
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Jeffrey
W. Pritchard*
|
|
|
1,006,354
|
(2)
|
|
**
|
|
| |
|
|
|
|
|
|
|
|
Christopher
Chipman*
|
|
|
650,000
|
(2)
|
|
**
|
|
|
4014
Redwing Lane
|
|
|
|
|
|
|
|
|
Audubon,
PA 19407
|
|
|
|
|
|
|
|
|
Roger
A Newell*
|
|
|
1,577,273
|
(2)
|
|
**
|
|
|
1781
South Larkspur Drive
|
|
|
|
|
|
|
|
|
Golden,
CO 80401
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
John
Brownlie*
|
|
|
|
|
|
|
|
|
6040
Puma Ridge
|
|
|
|
|
|
|
|
|
Littleton,
CO 80124
|
|
|
950,000
|
(2)
|
|
**
|
|
| |
|
|
|
|
|
|
|
|
Scott
Hazlitt*
|
|
|
1,025,000
|
|
|
**
|
|
|
9428
W. Highway 50
|
|
|
|
|
|
|
|
|
Salida.
CO 81201
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Ian
A. Shaw*
|
|
|
100,000
|
(2)
|
|
**
|
|
|
98
Crimson Millway
|
|
|
|
|
|
|
|
|
Toronto,
Ontario M2LIT6
|
|
|
|
|
|
|
|
|
Canada
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
John
Postle*
|
|
|
100,000
|
(2)
|
|
**
|
|
|
2169
Constance Drive
|
|
|
|
|
|
|
|
|
Oakville
Ontario
|
|
|
|
|
|
|
|
|
Canada
L6j 5l2
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Mark
T. Nesbitt*
|
|
|
141,666
|
(2)(4)
|
|
**
|
|
|
1580
Lincoln St., Ste. 700
|
|
|
|
|
|
|
|
|
Denver
CO 80203-1501
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Strategic
Precious Metal Fund
|
|
|
12,500,000
|
(5)
|
|
7.1
|
%
|
|
c/o
Banque Cantonale Vaoudoise
|
|
|
|
|
|
|
|
|
Place
St-Francois 14
|
|
|
|
|
|
|
|
|
1003
Lausanne, Switzerland
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
SPGP
|
|
|
11,295,000
|
(6)
|
|
6.5
|
%
|
|
17,
Avenue Matignon
|
|
|
|
|
|
|
|
|
75008
Paris, France
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Standard
Bank PLC
|
|
|
15,750,000
|
(7)
|
|
8.4
|
%
|
|
320
Park Avenue
|
|
|
|
|
|
|
|
|
New
York, NY 10022
|
|
|
|
|
|
|
|
|
Van
Eck International Investors
|
|
|
10,000,000
|
(8)
|
|
5.7
|
%
|
|
Gold
Fund
|
|
|
|
|
|
|
|
|
99
Park Avenue
|
|
|
|
|
|
|
|
|
New
York, NY 10016
|
|
|
|
|
|
|
|
|
and
|
|
|
|
|
|
|
|
|
Van
Eck Long/Short Gold
|
|
|
|
|
|
|
|
|
Portfolio
Ltd.
|
|
|
|
|
|
|
|
|
Ogier
Fiduciary Services
|
|
|
|
|
|
|
|
|
PO
box 1234
|
|
|
|
|
|
|
|
|
Queensgate
House
|
|
|
|
|
|
|
|
|
South
Church Street
|
|
|
|
|
|
|
|
|
Georgetown
|
|
|
|
|
|
|
|
|
Grand
Cayman, Cayman Islands
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
All
Officers and Directors
|
|
|
|
|
|
|
|
|
as
a Group (10 persons)
|
|
|
10,031,498
|
(2)(3)(4)
|
|
5.7
|
%
|
_________________________________
| |
*
|
Officer
and/or Director of Capital Gold.
|
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(1)
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Based
upon 174,243,646 shares issued and outstanding as of December 3,
2007.
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(2)
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For
Messrs. Dieterle, Pritchard, Chipman, Newell, Brownlie, Shaw, Postle
and
Nesbitt includes, respectively, 250,000 shares, 250,000 shares, 650,000
shares, 250,000 share, 450,000 shares, 100,000 shares, 100,000 shares
and
100,000 shares issuable upon exercise of options.
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(3)
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Represents
shares owned by Mr. Roningen’s wife. All of the foregoing shares are
pledged as collateral for payment of a bank
note.
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(4)
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Includes
shares owned jointly with his wife.
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(5)
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Includes
2,500,000 shares issuable upon exercise of warrants issued in
the January
2007 Private Placements. The securities are held of record by Banque
Cantonale Vaudoise (as custodian). We have been advised that FidFund
Management SA is the Fund Manager for Strategic Precious Metal Fund
and
that various persons at the Fund Manager, including its directors,
Christian Piguet, Gino Leonardi, Ariane Ischi, Claudio Müller and Herzig
Steve, share dispositive and voting power over the shares held by
Strategic Precious Metal Fund.
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(6)
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We
have been advised that Xavier Roulet, is a natural person with voting
and
investment control over shares of our common stock beneficially owned
by
SPGP.
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(7)
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Includes
shares issuable upon exercise of warrants to purchase an aggregate
of
13,600,000 shares. We have been advised that Standard Bank PLC’s directors
and senior management are natural persons with voting and investment
control over shares of our common stock beneficially owned by Standard
Bank PLC.
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(8)
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Represents
shares owned by the listed stockholders. Separately, the stockholders
do
not beneficially own in excess of 5% of our outstanding shares of
Common
Stock. However, both stockholders have identified Joseph Foster as
a
natural person with voting and investment control over shares of
our
common stock beneficially owned by the stockholders. Mr. Foster is
the
portfolio manager for Van Eck Associates Corporation and Van Eck
Absolute
Return Advisers Corp., the investment advisors for, respectively,
Van Eck
International Investors Gold Fund and Van Eck Long/Short Gold Portfolio
Ltd.
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DEADLINE
FOR RECEIPT OF STOCKHOLDER PROPOSALS
Proposals
of stockholders to be considered for inclusion in the Proxy Statement and proxy
card for the Company’s 2009 Annual Meeting of Stockholders must be received by
the Company’s Secretary, at Capital Gold Corporation, 76 Beaver Street, 14th
Floor, New York, NY 10005 no later than August 20, 2008.
Pursuant
to our Amended and Restated By-laws, all stockholder proposals may be brought
before an annual meeting of stockholders only upon timely notice thereof in
writing having been given to the Secretary of the company. To be timely, a
stockholder’s notice, for all stockholder proposals shall be delivered to the
Secretary at our principal executive offices not less than ninety (90) nor
more
than one hundred twenty (120) days prior to the date of the meeting; provided,
however, that in the event that the annual meeting date is publicly disclosed
less than one hundred twenty (120) days prior to the date of the meeting, the
stockholders’ notice, in order to be timely, must be so received not later than
the close of business on the tenth (10th) day following the day on which such
notice of the date of the annual meeting was publicly disclosed. All such
stockholders must be stockholders of record on both the date such stockholders
provide notice of their proposals and on the record date for the determination
of stockholders entitled to vote at such meeting. In addition, all stockholder
proposals must contain all of the information required under our Amended and
Restated By-laws, a copy of which is available upon written request, at no
charge, from the Secretary at our New York office. The Company reserves the
right to reject, rule out of order, or take other appropriate action with
respect to any proposal that does not comply with these and other applicable
requirements.
GENERAL
Unless
contrary instructions are indicated on the proxy, all shares of common stock
represented by valid proxies received pursuant to this solicitation (and not
revoked before they are voted) will be voted FOR all director nominees and
FOR
Proposal No. 2.
The
Board
of Directors knows of no business other than that set forth above to be
transacted at the meeting, but if other matters requiring a vote of the
stockholders arise, the persons designated as proxies will vote the shares
of
common stock represented by the proxies in accordance with their judgment on
such matters. If a stockholder specifies a different choice on the proxy, his
or
her shares of common stock will be voted in accordance with the specification
so
made.
Annual
Report on Form 10-KSB
A
copy of
our Annual Report on Form 10-KSB for the fiscal year ended July 31, 2007,
including financial statements, is enclosed with this proxy. Exhibits and any
amendments to our Form 10-KSB, as filed with the SEC, may be obtained without
charge upon written request to: Corporate Secretary, Capital Gold Corporation,
76 Beaver Street, 14th Floor, New York, NY 10005. You can also get copies of
our
filings made with the SEC, including the Annual Report on Form 10-KSB, by
visiting the SEC’s web site at www.sec.gov.
IT
IS
IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. WE URGE YOU TO FILL IN, SIGN AND
RETURN THE ACCOMPANYING FORM OF PROXY IN THE PREPAID ENVELOPE PROVIDED, NO
MATTER HOW LARGE OR SMALL YOUR HOLDINGS MAY BE.
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By
Order of the Board of Directors,
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Jeffrey
W. Pritchard, Secretary
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New
York, New York
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December
19, 2007
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Appendix
A
CERTIFICATE
OF AMENDMENT
TO
THE
CERTIFICATE
OF INCORPORATION
OF
CAPITAL
GOLD CORPORATION
The
above
corporation organized and existing under and by virtue of the General
Corporation Law of the State of Delaware does hereby certify:
FIRST:
At
a meeting of the Board of Directors of CAPITAL GOLD CORPORATION (the
"Corporation") duly called and noticed, and by subsequent unanimous written
consent of all directors of the Corporation, resolutions were duly adopted
setting forth proposed amendments to the Corporation's Certificate of
Incorporation, declaring said amendments to be advisable and calling a meeting
of the stockholders of the Corporation for consideration thereof.
SECOND:
The first resolution provides for amendment to the first paragraph of Article
FOURTH of the Corporation's Certificate of Incorporation, which sets forth
the
Corporation's capitalization, which first paragraph of the Article, as amended,
reads as follows:
“FOURTH.
1. Authorized
Shares.
The
aggregate number of shares of Common Stock which the Corporation shall have
authority to issue is THREE HUNDRED MILLION (300,000,000) shares, at a par
value
of $.0001 per share. All Stock When issued shall be fully paid and
non-assessable.”
THIRD:
The second resolution provides for the addition of a new Article TENTH of the
Corporation's Certificate of Incorporation, which new Article TENTH, as added,
reads as follows:
“TENTH. The
total
number of directors constituting the entire Board of Directors of the
Corporation shall be not less than three nor more than ten, with the
then-authorized number of directors being fixed from time to time by resolution
of the Board of Directors. Elections of directors need not be by written ballot
except as and to the extent provided in the Bylaws of the Corporation.
The
Board
shall be divided into three classes, designated Class I, Class II, and Class
III, with the term of office of one class expiring each year. Each class shall
be as nearly equal in number as the then-authorized number of directors
constituting the Board permits. Class I directors shall be initially elected
for
a term expiring at the annual meeting of stockholders to be held in the calendar
year 2009, Class II directors shall be initially elected for a term expiring
at
the annual meeting of stockholders to be held in the calendar year 2010, and
Class III directors shall be initially elected for a term expiring at the annual
meeting of stockholders to be held in the calendar year 2011. Members of each
class shall hold office until the annual meeting for the year in which their
term expires and until their successors are elected and qualified, subject,
however, to prior death, resignation, retirement, or removal from office. At
each succeeding annual meeting of the stockholders of the Corporation, the
successors of the class of directors whose term expires at that meeting shall
be
elected in accordance with this Article TENTH to hold office for a term expiring
at the annual meeting of stockholders held in the third year following the
year
of their election. In
the
event of any increase or decrease in the authorized number of directors, (i)
each director then serving as such shall nevertheless continue as a director
of
the class of which he or she is a member until the expiration of such director’s
current term or his or her prior death,
resignation, retirement, or removal from office,
and (ii)
the newly created or eliminated directorships resulting from such increase
or
decrease shall be apportioned by the Board of Directors among the three classes
of directors so that the number of directors in each class is as nearly equal
as
possible. To the extent possible, consistent with the foregoing rule, any newly
created directorships shall be added to those classes whose terms of office
are
to expire at the earliest dates following such allocation, unless otherwise
provided for from time to time by resolution adopted by a majority of the
directors then in office, though less than a quorum. No decrease in the number
of directors constituting the whole Board of Directors shall shorten the term
of
an incumbent Director.”
FOURTH:
The third resolution provides for the addition of a new Article ELEVENTH of
the
Corporation's Certificate of Incorporation, which new Article ELEVENTH, as
added, reads as follows:
“ELEVENTH. No
action
that is required or permitted to be taken by the stockholders of the Corporation
at any annual or special meeting of stockholders may be effected by written
consent of stockholders in lieu of a meeting of stockholders.”
FIFTH:
That thereafter, pursuant to resolution of its Board of Directors, an annual
meeting of the stockholders of said Corporation was duly called and held upon
notice in accordance with Section 222 of the Delaware General Corporation Law
at
which meeting the necessary number of shares as required by statute were voted
in favor of the amendment.
SIXTH:
That said amendment was duly adopted in accordance with the provisions of
Section 242 of Delaware General Corporation Law.
IN
WITNESS WHEREOF, the Corporation has caused this certificate to be signed this
day of
January 2008.
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By: |
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Gifford
A. Dieterle, President |
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CAPITAL
GOLD CORPORATION
ANNUAL
MEETING OF STOCKHOLDERS
January
24, 2008
THIS
PROXY IS SOLICTED ON BEHALF OF THE BOARD OF DIRECTORS
The
undersigned hereby appoints Gifford A. Dieterle and Jeffrey W. Pritchard and
each of them, with full power of substitution, as proxies to represent the
undersigned at the Annual Meeting of Stockholders to be held at
the , to
be held at Bayard's, One Hanover Square, New York, New York 10004 on
Thursday, January 24, 2008, at 1:30 p.m. local time and
at
any adjournment thereof, and to vote all of the shares of common stock of
Capital Gold Corporation (the “Company”) the undersigned would be entitled to
vote if personally present, upon the following matters:
Please
mark box in blue or black ink.
1. Proposal
1- To
approve the Company’s Proposal to amend the Company’s certificate of
incorporation to provide
for a classified Board of Directors.
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o
For
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o
Against
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o
Abstain
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2. Proposal
2-Election
of Directors.
Nominees:
Class I - Roger
A.
Newell and Robert Roningen; Class II - Ian A. Shaw, John Postle and Mark T.
Nesbitt; Class III - Gifford A. Dieterle, John Brownlie and Jeffrey W.
Pritchard.
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o
For all nominees
(except as marked to the contrary below)
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o
Authority
Withheld as to all Nominees
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(INSTRUCTION:
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH
THE NOMINEE’S NAME)
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Gifford
A. Dieterle
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John
Brownlie
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Roger
A. Newel
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Jeffrey
W. Pritchard
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Robert
Roningen
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Ian
A. Shaw
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John
Postle
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Mark
T. Nesbitt.
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3.
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Proposal
3
-
To approve the Company’s Proposal to amend the Company’s certificate of
incorporation to increase the authorized number of shares of common
stock
from 250,000,000 shares to 300,000,000
shares.
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o
For
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o
Against
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o
Abstain
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4.
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Proposal
4- To
approve the Company’s Proposal to
amend the Company’s certificate of incorporation to permit stockholder
action to be taken only at a duly called annual or special meeting
of
stockholders and eliminate stockholder action by written
consent.
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o
For
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o
Against
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o
Abstain
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5.
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Proposal
5-Ratification
of the selection of Wolinetz, Lafazan & Company, P.C., as independent
auditors of the Company for the year ending July 31,
2008.
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o
For
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o
Against
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o
Abstain
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In
their
discretion, the proxies are authorized to vote upon such other business as
may
properly come before the meeting.
THIS
PROXY WILL BE VOTED AS DIRECTED, OR, IF NO DIRECTION IS INDICATED, WILL BE
VOTED
“FOR” THE ELECTION OF GIFFORD A. DIETERLE, JOHN BROWNLIE, JEFFREY W. PRITCHARD,
ROBERT RONINGEN, ROGER A. NEWELL, IAN A. SHAW, JOHN POSTLE AND MARK T. NESBITT
AS DIRECTORS, “FOR” ALL OF THE OTHER PROPOSALS AND, IN THE DISCRETION OF THE
PROXIES, ON ALL OTHER MATTERS PROPERLY BROUGHT BEFORE THE ANNUAL MEETING. THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
Please
date, sign as name appears at left, and return promptly. If the stock is
registered in the name of two or more persons, each should sign. When signing
as
Corporate Officer, Partner, Executor, Administrator, Trustee, or Guardian,
please give full title. Please note any change in your address alongside the
address as it appears in the Proxy.
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Dated:
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Signature
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(Print
Name)
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SIGN,
DATE AND RETURN PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE