<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 15, 1995
REGISTRATION NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
COEUR D'ALENE MINES CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
IDAHO 82-0109423
(STATE OR OTHER JURISDICTION OF INCORPORATION OR (I.R.S. EMPLOYER IDENTIFICATION NO.)
ORGANIZATION)
400 COEUR D'ALENE MINES BUILDING DENNIS E. WHEELER
505 FRONT AVENUE CHAIRMAN OF THE BOARD,
COEUR D'ALENE, IDAHO 83814 PRESIDENT AND CHIEF EXECUTIVE OFFICER
208-667-3511 COEUR D'ALENE MINES CORPORATION
(ADDRESS, INCLUDING ZIP CODE 400 COEUR D'ALENE MINES BUILDING
AND TELEPHONE NUMBER, INCLUDING 505 FRONT AVENUE
AREA CODE, OF REGISTRANT'S COEUR D'ALENE, IDAHO 83814
PRINCIPAL EXECUTIVE OFFICES) 208-667-3511
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
</TABLE>
------------------------
PLEASE SEND COPIES OF COMMUNICATIONS TO:
<TABLE>
<S> <C>
WALTER FREEDMAN, ESQ. DAVID G. ORMSBY, ESQ.
FREEDMAN, LEVY, KROLL & SIMONDS CRAVATH, SWAINE & MOORE
1050 CONNECTICUT AVENUE, N.W. WORLDWIDE PLAZA
WASHINGTON, D.C. 20036 825 EIGHTH AVENUE
NEW YORK, N.Y. 10019
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If the delivery of this prospectus is expected to be made pursuant to Rule
434, please check the following box. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED PROPOSED
MAXIMUM MAXIMUM
OFFERING AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE PRICE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER SHARE(1) PRICE(1) FEE
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<S> <C> <C> <C> <C>
Common Stock, par value $1.00 per share............... 4,864,179 shares(2) $ 18.75 $91,203,356 $ 31,449
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Common Stock Purchase Rights.......................... (3) None
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</TABLE>
(1) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457(c), based on the average of the high and low sales
prices of the Common Stock on the New York Stock Exchange on November 9,
1995.
(2) Maximum number of shares issuable upon conversion of $74,957,000 principal
amount of the Registrant's 7% Convertible Subordinated Debentures Due 2002
outstanding at the close of business on November 15, 1995.
(3) Common Stock Purchase Rights will be issued in a number equal to the number
of shares of Common Stock to be issued for no additional consideration and,
therefore, no registration fee is required. Prior to the occurrence of
certain events, the Common Stock Purchase Rights will not be exercisable or
evidenced separately from the Common Stock.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
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<PAGE> 2
PROSPECTUS
4,864,179 SHARES
[COEUR D'ALENE MINES CORPORATION LOGO]
[LOGO] COMMON STOCK
------------------------
This Prospectus covers the issuance of a maximum of 4,864,179 shares of
common stock, par value $1.00 per share (the "Common Stock"), of Coeur d'Alene
Mines Corporation (the "Company") under the standby arrangements described
herein under "Standby Arrangements" and the reoffering of any Common Stock
issued upon conversion of the Company's outstanding 7% Convertible Subordinated
Debentures Due 2002 (the "Debentures") into Common Stock by UBS Securities Inc.
(the "Purchaser") or pursuant to such standby arrangements.
On November 15, 1995, the Company called for redemption on December 15, 1995
(the "Redemption Date") the $74,957,000 principal amount of outstanding
Debentures at a redemption price of 107% of the principal amount of Debentures
(the "Redemption Price"). Debentureholders of record at the close of business on
November 30, 1995 also will be entitled to the $35 semi-annual interest payment
payable on the Redemption Date for each $1,000 principal amount of Debentures.
The Debentures (or any portion thereof which is $1,000 or an integral multiple
thereof) may be converted into the Common Stock of the Company at a conversion
price of $15.41 of principal amount of Debentures per share of Common Stock or
approximately 64.9 shares of Common Stock for each $1,000 principal amount of
Debentures at any time prior to 5:00 p.m. Eastern Standard Time on December 14,
1995 (the "Expiration Time"). Cash will be paid in lieu of any fractional shares
of Common Stock issuable upon conversion of the Debentures.
Reference is made to "Risk Factors" on pages 4-6 hereof for a discussion of
risk factors that should be considered by prospective investors.
The Company has made arrangements with the Purchaser pursuant to which the
Purchaser has agreed to purchase from the Company the number of shares (the
"Redemption Shares") of Common Stock that would have been issuable upon
conversion of the Debentures that are not surrendered for conversion on or prior
to the Expiration Time. The Redemption Shares will be purchased from the Company
by the Purchaser at a price per share of $16.49 (i.e., $1,070 / 64.9). The
Purchaser has agreed to remit to the Company 50% of the amount, if any, by which
the aggregate net proceeds received by the Purchaser from sales of the
Redemption Shares exceeds the aggregate purchase price of the Redemption Shares.
The Purchaser may also purchase Debentures in the open market or otherwise prior
to the Expiration Time. See "Standby Arrangements" for a description of the
Purchaser's compensation and indemnification arrangements with the Company.
On November 14, 1995, the closing sale price of the Common Stock as reported
on the New York Stock Exchange Composite Tape was $18.50 per share. So long as
the market price of the Common Stock is greater than $16.49 per share at the
time of conversion, a holder of Debentures who exercises such holder's
conversion rights after November 30, 1995, will receive Common Stock, accrued
interest and cash in lieu of any fractional share with a total market value
greater than the amount of cash the holder would otherwise be entitled to
receive upon the redemption of the Debentures, before deducting any applicable
sales costs or transfer taxes, if any.
Prior to, on or after the Redemption Date, the Purchaser may offer shares of
Common Stock pursuant to this Prospectus directly to the public, at prices set
from time to time by it, including shares acquired through conversion of
Debentures acquired by the Purchaser. In effecting such transactions, the
Purchaser may realize profits or losses independent of the compensation referred
to under "Standby Arrangements." The Purchaser may also make sales to dealers at
prices which represent concessions from the prices at which such shares are then
being offered to the public. The amount of such concessions will be determined
from time to time by the Purchaser. Any Common Stock so offered is offered
subject to prior sale, when, as and if received by the Purchaser, and subject to
its right to reject orders in whole or in part. This Prospectus does not
constitute an offer to sell any securities other than the Common Stock offered
by the Purchaser.
The outstanding shares of Common Stock and the shares offered hereby are
listed on the New York Stock Exchange.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
------------------------
UBS SECURITIES INC.
November 15, 1995.
<PAGE> 3
IN CONNECTION WITH THIS OFFERING, THE PURCHASER MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE DEBENTURES OR
THE COMMON STOCK AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE
OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
AVAILABLE INFORMATION
Coeur d'Alene Mines Corporation (together with its consolidated
subsidiaries, the "Company") is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Reports, proxy
statements and other information filed with the Commission can be inspected and
copied at the Commission's public reference facilities at 450 Fifth Street,
N.W., Washington, D.C. 20549 and at the Commission's regional offices at
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511 and 7 World Trade Center, New York, New York 10048. Copies
of such material can be obtained by mail from the Commission's Public Reference
Section at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates.
Such reports, proxy statements and other information also can be inspected at
the offices of the New York Stock Exchange, Inc. ("NYSE"), 20 Broad Street, New
York, New York 10005.
The Company has filed a registration statement on Form S-3 (herein,
together with all amendments and exhibits, referred to as the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the securities offered hereby. This Prospectus does not contain
all of the information set forth in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission. For further information, reference is made to the Registration
Statement and the exhibits filed as part thereof. Statements contained herein
concerning any document filed as an exhibit are not necessarily complete and, in
each instance, reference is made to the copy of such document filed as an
exhibit to the Registration Statement. Each such statement is qualified in its
entirety by such references.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are hereby
incorporated by reference in this Prospectus:
1. Annual Report on Form 10-K for the fiscal year ended December 31, 1994,
as amended.
2. Quarterly Reports on Form 10-Q for the quarters ended March 31, 1995,
June 30, 1995 (and amended on October 16, 1995) and September 30, 1995.
3. Reports on Form 8-K dated January 1, 1995, May 2, 1995 (and amended on
June 2, 1995) and July 7, 1995.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the shares of Common Stock hereby shall be deemed
to be incorporated herein by reference and to be a part hereof from the
respective dates of filing of such documents.
Any statement contained in a document incorporated or deemed incorporated
by reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus and the Registration Statement of which it is a part to the
extent that a statement contained herein or in any other subsequently filed
document which is also incorporated or deemed to be incorporated by reference
herein modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus or such Registration Statement.
The Company will provide without charge to each person, including a
beneficial owner, to whom a copy of this Prospectus is delivered, upon the
written or oral request of any such person, a copy of any or all of the
documents which are incorporated herein by reference, other than exhibits to
such documents (unless such exhibits are specifically incorporated by reference
into such documents). Requests should be directed to William F. Boyd, Esq.,
Secretary, Coeur d'Alene Mines Corporation, 400 Coeur d'Alene Mines Building,
505 Front Avenue, Coeur d'Alene, Idaho 83814, telephone number (208) 667-3511.
2
<PAGE> 4
THE COMPANY
COEUR D'ALENE MINES CORPORATION ("Coeur" or the "Company") is an
international producer of precious metals and is principally engaged in the
exploration, development, operation and/or ownership of gold and silver mining
properties located within the United States in Nevada, Idaho and Alaska and
abroad in New Zealand and Chile. The Company's most significant properties are:
(i) the ROCHESTER MINE, a silver and gold surface mining operation located in
northwestern Nevada, which is owned and operated by Coeur and which is believed
to be one of the largest and lowest cost of production primary silver mines in
the United States and is a significant gold producer as well; (ii) the GOLDEN
CROSS MINE, an underground and surface gold mining operation located near Waihi,
New Zealand, which is operated by Coeur and in which it has an 80% operating
interest acquired on April 30, 1993; (iii) ownership of 50% of the capital stock
of SILVER VALLEY RESOURCES CORPORATION, which owns the GALENA and COEUR
underground silver mines in northern Idaho at which mining operations were
suspended in July 1992 and April 1991, respectively, and has under development a
program designed to reopen these historic mining properties; (iv) 100% of the
KENSINGTON PROPERTY, located north of Juneau, Alaska, which is being developed
as an underground gold mine by Coeur; (v) the FACHINAL PROPERTY, located in
southern Chile, South America which Coeur acquired in 1990, at which
construction of an open pit and underground gold and silver mine and processing
plant was completed and initial production commenced in late October 1995; and
(vi) the EL BRONCE MINE, a Chilean gold mine of which the Company acquired
operating control in October 1994 and in which the Company has an option to
acquire a 51% equity interest by investing approximately $25 million (of which
$8.9 million remains to be invested) prior to July 1997. In addition, in
September 1994, the Company entered into an agreement under which it has the
right to acquire up to a 51% operating interest in another Chilean gold mine,
the FARIDE MINE, which has not been operational since 1988, by investing
approximately $7.5 million (of which $5.8 million remains to be invested) prior
to January 1998.
No assurance can be given as to whether or when mining operations will
resume at the Galena or Coeur Mines or a decision to construct the proposed
Kensington Mine will be made. Coeur also has interests in other properties which
are the subject of silver or gold exploration activities and on which no
commercially minable ore bodies have been identified.
The Rochester Mine, Golden Cross Mine and El Bronce Mine contributed 56.8%,
29.8% and 1.0%, respectively, of the Company's total income from continuing
operations in 1994 and 55.1%, 33.5% and .5%, respectively, of the Company's
total income from continuing operations in the nine months ended September 30,
1995.
The Company is an Idaho corporation organized in 1928. Its executive
offices are located at 400 Coeur d'Alene Mines Building, 505 Front Avenue, Coeur
d'Alene, Idaho 83814. The telephone number is (208) 667-3511.
Reference is made to the discussion under "Risk Factors" below for
additional information relating to the Company and its business.
3
<PAGE> 5
RISK FACTORS
Investors should carefully review the considerations set forth below as
well as the other information included in this Prospectus and the documents
incorporated by reference herein.
DEPENDENCE UPON GOLD AND SILVER PRICES
The results of the Company's operations and the market price of the
Company's Common Stock are significantly affected by the market prices of gold
and silver. Those prices may fluctuate widely and are affected by many factors
beyond the Company's control, including interest rates, expectations regarding
inflation, currency values, global and regional political and economic
conditions and other factors. The depressed price of silver led to the
suspension of mining activity at the Galena Mine (in July 1992, during which
month the average price of silver was $3.95 per ounce) and at the Coeur Mine (in
April 1991, during which month the average price of silver was $3.97 per ounce).
Any resumption of mining at those mines, which the Company does not believe will
be considered unless the market price of silver exceeds at least $6.00 per
ounce, will require the affirmative decision of Silver Valley Resources
Corporation (in which the Company has a 50% ownership interest) which now owns
those mines. The Company's Rochester Mine, which it wholly owns and operates,
the Golden Cross Mine, which the Company operates and in which it has an 80%
operating interest, the El Bronce Mine, in which the Company has a 51% interest
in operating profits, and the Fachinal Property, which the Company wholly owns
and at which it commenced initial production in late October 1995, are the
Company's currently operating mining properties. A production decision by the
Company relating to the Kensington Property is subject to a market price of gold
of at least $400 per ounce, update of the final feasibility study and the
receipt of certain required permits. The average market prices of gold (based on
the London final quotation) and silver (based on the Handy and Harman base price
quotation) in 1992 were $343.73 and $3.94 per ounce, respectively, and rose to
$359.77 and $4.30 per ounce, respectively, in 1993, and $384.01 and $5.28 per
ounce, respectively, in 1994. The market prices of gold and silver on November
14, 1995 were $385.85 and $5.31 per ounce, respectively. No assurance can be
given with respect to such market prices in the future.
CONTINUING OPERATING LOSSES
Giving retroactive effect to the Company's acquisition of Callahan Mining
Corporation ("Callahan") on December 31, 1991, which was accounted for on a
pooling of interests basis, the Company recorded losses of approximately $4.2
million in 1990, $14.4 million in 1991 and $759,000 in 1992. Those losses
largely reflect the significant non-recurring write-offs relating to the closure
of the Ropes and Thunder Mountain Mines and expenses incurred in connection with
the acquisition of Callahan, as well as interest expenses and the low silver and
gold prices prevailing during these periods. The mine closure write-offs
amounted to approximately $5.6 million in 1990 and $5.7 million in 1991, and the
expenses incurred in connection with Coeur's acquisition by merger of Callahan
in 1991 approximated $5.2 million. Furthermore, a loss of approximately $13.3
million before the cumulative effect of a change in accounting was recorded in
the year ended December 31, 1993, which primarily resulted from approximately
$9.4 million of non-recurring write-offs relating to the settlement of
litigation, resolution of an environmental matter and the write-off of
uncollectible notes receivable. A loss of approximately $3.9 million was
recorded in the year ended December 31, 1994, on which date the Company's
accumulated deficit amounted to approximately $17 million. Net income of $2.3
million, which included a $3.2 million gain relating to the delivery of gold and
silver purchased in the open market to satisfy fixed price forward delivery
contracts and $2.4 million of income from discontinued operations (including the
$2.2 million after-tax gain from the sale of related non-mining assets), was
recorded in the nine-month period ended September 30, 1995. The Company's
accumulated deficit as of that date declined to approximately $14.8 million. The
attainment of net income from continuing operations in the future will primarily
depend upon future silver and gold prices and planned production levels at the
Company's operating properties.
4
<PAGE> 6
RISKS ASSOCIATED WITH POSSIBLE ACQUISITIONS
The Company periodically considers the acquisition of precious metals
mines, properties and businesses. As consideration for any acquisition, in
addition to the payment of cash, the Company may incur indebtedness or issue
debt or equity securities. Accordingly, any acquisition may result in
substantial dilution of the percentage ownership of existing stockholders. The
Company intends to seek stockholder approval for any such acquisitions only to
the extent required by applicable law, regulations or stock exchange rules. The
Company currently is not a party to any agreements relating to any material
acquisitions.
RISKS ASSOCIATED WITH THE COMPANY'S EXPLORATION AND DEVELOPMENT ACTIVITIES
Mineral exploration, particularly for gold and silver, involves many risks
and frequently is nonproductive. Once mineralization is discovered, it may take
a number of years from the initial phases until production is possible, during
which time the economic feasibility of production may change. Substantial
developmental expenditures are required to establish ore reserves, to determine
metallurgical processes to extract the metals from the ore and, in the case of
new properties, to construct mining and processing facilities.
The Company expended approximately $23.0 million and $49.7 million
(excluding capitalized interest) in the year ended December 31, 1994 and the
nine-month period ended September 30, 1995, respectively, in connection with the
exploration and development of its mining properties. The Company currently
estimates that its exploration and development expenditures on existing mining
properties during the last quarter of 1995 and the year ended December 31, 1996
will approximate $10.9 million and $113.0 million, respectively.
RISKS ASSOCIATED WITH THE COMPANY'S MINING ACTIVITIES
Following the commencement of production, the mining business continues to
be subject to risks and hazards, including quantity of production, environmental
hazards, industrial accidents, encountering unusual or unexpected formations,
cave-ins, flooding and periodic interruptions due to inclement or hazardous
weather conditions. Such risks could result in damage to, or destruction of,
mineral properties or producing facilities, personal injury, environmental
damage, reduced production and delays in mining, monetary losses and possible
legal liability. Insurance fully covering certain environmental risks (including
potential liability for pollution or other hazards as a result of disposal of
waste products occurring from exploration and production) is not generally
available to the Company or to other companies within the industry. The Company
has been recognized for its commitment to environmental responsibility and knows
of no material environmental liabilities to which it currently is subject.
GOVERNMENT REGULATION
General. The Company's mining activities are subject to extensive federal,
state and local laws governing the protection of the environment, prospecting,
development, production, taxes, labor standards, occupational health, mine
safety, toxic substances and other matters. The costs associated with compliance
with such regulatory requirements are substantial and possible future
legislation and regulations could cause additional expense, capital
expenditures, restrictions and delays in the development of the Company's
properties, the extent of which cannot be predicted. In the context of
environmental permitting, including the approval of reclamation plans, the
Company must comply with known standards and regulations which may entail
significant costs and delays. Although Coeur has been recognized for its
commitment to environmental responsibility and it believes it is in substantial
compliance with applicable laws and regulations, amendments to current laws and
regulations, the more stringent implementation thereof through judicial review
or administrative action or the adoption of new laws, could have a materially
adverse effect upon the Company. The Company expended approximately $3.0 million
and $2.1 million in connection with routine compliance activities at its
operating properties in 1994 and the first nine months of 1995, respectively,
and expects to expend approximately $981,000 and $2.8 million for that purpose
in the fourth quarter of 1995 and the year ended December 31, 1996,
respectively. The Company has expended a total of approximately $5.2 million on
environmental and permitting activities at the Kensington Property through
September 30, 1995, and expects
5
<PAGE> 7
to expend approximately $710,000 and $2.4 million for that purpose in the fourth
quarter of 1995 and the year ended December 31, 1996, respectively.
EPA Regulations. Mining wastes are currently exempt to a limited extent
from the extensive set of Environmental Protection Agency ("EPA") regulations
governing hazardous waste. The EPA is proceeding with development of a program
to regulate mining waste pursuant to its solid waste management authority under
the Resource Conservation and Recovery Act ("RCRA"). Certain processing and
other wastes, as well as high volume extraction and bonification wastes, are
expected to eventually be regulated by the EPA under RCRA. In this connection,
legislative re-authorization of RCRA is currently pending and the EPA is
studying regulations concerning how mine wastes should be managed and regulated.
If the Company's mine wastes were treated as hazardous waste or such wastes
resulted in operations being designated as a "Superfund" site under the
Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"
or "Superfund") for cleanup, material expenditures would be required for the
construction of additional waste disposal facilities or for other remediation
expenditures. Under CERCLA, any owner or operator of the land since the time of
its contamination may be held liable and may be forced to undertake remedial
cleanup action or to pay for the government's cleanup efforts. Additional
regulations or requirements may also be imposed upon the Company's tailings and
waste disposal operations under the Nevada Water Pollution Control Law.
Natural Resources Laws. The Company is subject to federal and state laws
designed to protect natural resources. The Company and Callahan were advised by
the U.S. Department of Interior in July 1995 that they were identified as
potentially responsible parties for damages resulting from alleged injury to
federal natural resources with respect to the Bunker Hill Superfund Site. The
Company presently cannot state whether or estimate the extent to which, if any,
it will be liable for any such damages. However, the Company does not believe
its liability, if any, relating to the matter will be material in amount.
Proposed Mining Legislation. Legislation is presently being considered in
the U.S. Congress to change the Mining Law of 1872 (the "Mining Act") under
which the Company holds mining claims on public lands. It is considered probable
that the Mining Act will be amended or be replaced by stricter legislation in
1995 or 1996. The legislation under consideration contains new environmental
standards and conditions, additional reclamation requirements and extensive new
procedural steps which would likely result in delays in permitting. Among the
bills under consideration are bills calling for an 8% gross royalty, a 2.5% net
smelter return royalty or a 3.5% net proceeds royalty on the value of minerals
mined on public lands, payable to the U.S. Government. A significant portion of
the Company's U.S. mining properties are on public lands. Whether or when
changes will be enacted or the extent of any changes is not presently known and
the potential impact on the Company's United States activities is difficult to
predict.
FOREIGN ACTIVITIES
Although the governments and economies of New Zealand and Chile, the only
foreign countries in which the Company currently owns or operates mining
properties, have been relatively stable in recent years, the ownership of
property in a foreign country generally is subject to the possible risk of
expropriation or nationalization with inadequate compensation. The Company does
not believe its property interests in New Zealand or Chile currently expose it
to those risks. Any foreign operation or investment may also be adversely
affected by exchange controls, currency fluctuations, taxation and laws or
policies of particular countries as well as laws and policies of the United
States affecting foreign trade, investment and taxation.
DIVIDENDS AND DISTRIBUTIONS
As reported below under "Price Range of Common Stock and Dividends," the
Company has paid per share cash distributions or dividends on its Common Stock
in recent years. No assurance can be given that cash distributions or dividends
will be declared in the future. See "Price Range of Common Stock and Dividends."
6
<PAGE> 8
USE OF PROCEEDS
The net proceeds from the sale of the Common Stock to the Purchaser
pursuant to the arrangements described herein under "Standby Arrangements" will
be used to redeem any Debentures not surrendered for conversion.
PRICE RANGE OF COMMON STOCK AND DIVIDENDS
The Company's Common Stock is listed on the NYSE and the Pacific Stock
Exchange. The following table sets forth, for the periods indicated, the high
and low closing sales prices of the Common Stock as reported on the NYSE
Composite Tape:
<TABLE>
<CAPTION>
HIGH LOW
-------- --------
<S> <C> <C> <C>
1993: First Quarter...................................................... $16.000 $10.000
Second Quarter..................................................... 20.875 15.375
Third Quarter...................................................... 23.750 15.750
Fourth Quarter..................................................... 22.000 17.500
1994: First Quarter...................................................... 23.500 18.250
Second Quarter..................................................... 22.625 16.500
Third Quarter...................................................... 22.125 17.125
Fourth Quarter..................................................... 21.500 14.375
1995: First Quarter...................................................... 18.500 14.750
Second Quarter..................................................... 21.500 17.500
Third Quarter...................................................... 20.875 17.250
Fourth Quarter (through November 14, 1995)......................... 20.875 17.000
</TABLE>
The Company paid per share cash distributions or dividends of $.15 on its
Common Stock on each of April 21, 1995, April 15, 1994, April 16, 1993 and April
15, 1992; $.12 on April 12, 1991; and $.11 on each of April 20, 1990 and April
21, 1989. Future distributions or dividends on the Common Stock, if any, will be
determined by the Company's Board of Directors and will depend primarily upon
the Company's results of operations, financial condition and capital
requirements.
At November 13, 1995, there were 8,611 record holders of the Company's
outstanding Common Stock.
7
<PAGE> 9
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Company at September 30, 1995 and as adjusted to reflect the assumed conversion
of all the Debentures into 4,866,125 shares of Common Stock. (The table does not
reflect the conversion on October 4, 1995 of $30,000 principal amount of
Debentures into 1,946 shares of Common Stock.)
<TABLE>
<CAPTION>
ACTUAL AS ADJUSTED
------------ ------------
<S> <C> <C>
Long-term debt, including current portion:
6 3/8% Convertible Subordinated Debentures Due 2004(a)...... $100,000,000 $100,000,000
7% Convertible Subordinated Debentures Due 2002(b).......... 74,987,000 --
6% Convertible Subordinated Debentures Due 2002(c).......... 50,000,000 50,000,000
Limited Recourse Project Loan............................... 23,585,552 23,585,552
Obligations under capital leases (including $2,115,592
current portion).......................................... 2,907,971 2,907,971
------------ ------------
Total long-term debt, including current portion............. 251,480,523 176,493,523
Stockholders' equity:
Preferred Stock, $1.00 par value per share; authorized
10,000,000 shares; none outstanding
Common Stock, $1.00 par value per share; authorized
60,000,000 shares; issued -- 16,657,995 shares; as
adjusted -- 21,524,120 shares (including 1,059,211 shares
held as treasury stock)(d)................................ 16,657,995 21,524,120
Capital surplus(e).......................................... 180,937,624 248,384,244
Accumulated deficit......................................... (14,772,272) (14,772,272)
Repurchased and nonvested shares............................ (13,284,542) (13,284,542)
Unrealized losses on short-term investment securities....... (1,214,395) (1,214,395)
------------ ------------
Total stockholders' equity.................................. 168,324,410 240,637,155
------------ ------------
Total capitalization............................................. $419,804,933 $417,130,678
=========== ===========
</TABLE>
- ---------------
(a) The 6 3/8% Convertible Debentures Due 2004 are convertible into Common Stock
at $25.77 per share, subject to adjustment, and are redeemable at specified
redemption prices after January 31, 1997.
(b) The 7% Convertible Subordinated Debentures Due 2002 are convertible into
Common Stock at $15.41 per share, subject to adjustment, and have been
called for redemption on December 15, 1995.
(c) The 6% Convertible Subordinated Debentures Due 2002 are convertible into
Common Stock at $25.57 per share, subject to adjustment, and are redeemable
at 100% of the principal amount.
(d) Does not include 3,880,481 shares reserved for issuance upon the conversion
of the 6 3/8% Convertible Subordinated Debentures Due 2004, 1,955,416 shares
reserved for issuance upon the conversion of the 6% Convertible Subordinated
Debentures Due 2002, 566,908 shares reserved for issuance under the
Company's Executive Compensation Program or 200,000 shares reserved for
issuance under the Company's Non-Employee Directors Stock Option Plan.
(e) The as adjusted capital surplus account includes capitalization of the
carrying value of the Debentures of $74,987,000, less the par value of the
common shares issued of $4,866,125 and prepaid offering costs of $2,674,255.
8
<PAGE> 10
SELECTED CONSOLIDATED FINANCIAL DATA
The following table summarizes certain selected consolidated financial data
with respect to the Company and its subsidiaries and was derived from the
Company's Annual Report on Form 10-K for the year ended December 31, 1994 and
Quarterly Report on Form 10-Q for the nine months ended September 30, 1995,
which are incorporated into this Prospectus. In the opinion of management of the
Company, the unaudited information for the nine-month periods ended September
30, 1994 and September 30, 1995 has been prepared on a basis consistent with the
audited information and includes all adjustments, which consist only of normal
recurring accruals, necessary for a fair presentation of the results for these
periods. The results of operations for the nine months ended September 30, 1995
are not necessarily indicative of results for the complete year or any other
year.
INCOME STATEMENT DATA:
(Thousands Except Per Share Information)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------
1990 1991 1992 1993
---------- ---------- ---------- ----------
(RESTATED)
<S> <C> <C> <C> <C>
Income:
Sale of concentrates and dore......................................... $ 53,125 $ 49,035 $ 41,414 $ 67,990
Less cost of mine operations.......................................... 45,375 44,072 37,829 59,804
---------- ---------- ---------- ----------
Gross profits......................................................... 7,750 4,963 3,585 8,186
Other income.......................................................... 8,939 7,714 4,812 5,388
---------- ---------- ---------- ----------
Total income.......................................................... 16,689 12,677 8,397 13,574
Expenses................................................................. 23,118 29,178 14,118 31,548
---------- ---------- ---------- ----------
Income (loss) from continuing operations before income taxes............. (6,429) (16,501) (5,721) (17,974)
Provision (benefit) for income taxes..................................... (1,528) (1,198) (4,233) (3,932)
---------- ---------- ---------- ----------
Loss from continuing operations.......................................... (4,901) (15,303) (1,488) (14,042)
Income from discontinued operations (net of taxes)(1)................. 711 904 729 752
---------- ---------- ---------- ----------
Income (loss) before cumulative effect of change in accounting method.... (4,190) (14,399) (759) (13,290)
Cumulative effect of change in accounting method(2)...................... 5,181
---------- ---------- ---------- ----------
Net income (loss)........................................................ $ (4,190) $ (14,399) $ (759) $ (8,109)
=========== ========= ========= =========
Per Share Data:(3)
Earnings per share data:
Loss from continuing operations....................................... $ (0.35) $ (1.00) $ (0.10) $ (0.92)
Income from discontinued operations (net of taxes).................... 0.05 0.06 0.05 0.05
---------- ---------- ---------- ----------
Income (loss) before cumulative change in accounting method........... (0.30) (0.94) (0.05) (0.87)
Cumulative effect of change in accounting method...................... .34
---------- ---------- ---------- ----------
Net income (loss)........................................................ $ (0.30) $ (0.94) $ (0.05) $ (.53)
=========== ========= ========= =========
Cash dividends per share.......................................... $ 0.11 $ 0.12 $ 0.15 $ .15
=========== ========= ========= =========
Weighted average number of shares of Common Stock and equivalents used in
calculation............................................................. 13,792 15,308 15,317 15,328
=========== ========= ========= =========
<CAPTION>
----------------------------------------
1994 1994 1995(4)
---------- ---------- ----------
<S> <C> <C> <C>
Income:
Sale of concentrates and dore......................................... $ 79,606 $ 60,340 $ 66,314
Less cost of mine operations.......................................... 67,802 50,235 53,123
---------- ---------- ----------
Gross profits......................................................... 11,804 10,105 13,191
Other income.......................................................... 12,689 9,207 8,665
---------- ---------- ----------
Total income.......................................................... 24,493 19,312 21,856
Expenses................................................................. 29,493 22,394 21,508
---------- ---------- ----------
Income (loss) from continuing operations before income taxes............. (5,000) (3,082) 348
Provision (benefit) for income taxes..................................... (264) (227) 437
---------- ---------- ----------
Loss from continuing operations.......................................... (4,736) (2,855) (89)
Income from discontinued operations (net of taxes)(1)................. 793 566 2,360
---------- ---------- ----------
Income (loss) before cumulative effect of change in accounting method.... (3,943) (2,289) 2,271
Cumulative effect of change in accounting method(2)......................
---------- ---------- ----------
Net income (loss)........................................................ $ (3,943) $ (2,289) $ 2,271
========= ========= =========
Per Share Data:(3)
Earnings per share data:
Loss from continuing operations....................................... $ (0.31) $ (0.19) $ 0.00
Income from discontinued operations (net of taxes).................... 0.05 0.04 0.15
---------- ---------- ----------
Income (loss) before cumulative change in accounting method........... (0.26) (0.15) 0.15
Cumulative effect of change in accounting method......................
---------- ---------- ----------
Net income (loss)........................................................ $ (.26) $ (0.15) $ 0.15
========= ========= =========
Cash dividends per share.......................................... $ .15 $ 0.15 $ 0.15
========= ========= =========
Weighted average number of shares of Common Stock and equivalents used in
calculation............................................................. 15,388 15,366 15,602
========= ========= =========
</TABLE>
BALANCE SHEET DATA:
<TABLE>
<S> <C> <C> <C> <C>
Total assets.......................................................... $275,806 $ 261,034 $ 324,878 $ 325,249
Working capital....................................................... 151,385 129,883 179,370 104,883
Long-term debt........................................................ 59,548 57,902 131,134 129,234
Shareholders' equity.................................................. 200,040 183,938 180,991 170,849
<CAPTION>
<S> <C> <C> <C>
Total assets.......................................................... $ 412,361 $ 415,856 $ 447,652
Working capital....................................................... 166,607 182,035 112,636
Long-term debt........................................................ 227,193 227,717 252,049
Shareholders' equity.................................................. 160,292 161,284 168,324
</TABLE>
- ---------------
(1) On May 2, 1995, the Company sold the assets of its flexible hose and tubing
division, The Flexaust Company, and shares of a related subsidiary for
approximately $10.0 million payable in cash, of which approximately $4
million was paid at the time of closing and the balance is payable over the
next five years. The results of operations and the gain on sale of Flexaust
manufacturing segment are presented as "Discontinued Operations." The Company
recorded a pre-tax gain on the sale of approximately $3.9 million ($2.2
million net of income taxes) during the second quarter of 1995.
(2) Effective January 1, 1993, the Company changed its method of accounting for
income taxes by adopting Statement of Financial Accounting Standards (FAS)
109, "Accounting for Income Taxes." FAS 109 requires an asset and liability
approach to accounting for income taxes and establishes criteria for
recognizing deferred tax assets. Accordingly, the Company adjusted its
existing deferred income tax assets and liabilities to reflect current
statutory income tax rates and previously unrecognized tax benefits related
to federal and certain state net operating loss carryforwards. FAS 109 also
contains new requirements regarding balance sheet classification and prior
business combinations. Hence, the Company adjusted the carrying values of an
incremental interest in the Rochester Property acquired in 1988 and CDE
Chilean Mining Corp. acquired in 1990 to reflect the gross purchase value
previously reported net-of-tax. The cumulative effect of the accounting
change on prior years at January 1, 1993 is a nonrecurring gain of
$5,181,188, or $.34 per share, and is included in the Consolidated Statement
of Operations for the year ended December 31, 1993. Other than the cumulative
effect, the accounting change had no material effect on the results of
operations for the year ended December 31, 1993.
As of January 1, 1993, after giving effect to the implementation of FAS 109,
the significant components of the Company's net deferred tax liability were
as follows:
<TABLE>
<CAPTION>
DEFERRED INCOME TAXES
------------------------------
ASSETS LIABILITIES
----------- -----------
<S> <C> <C>
Property, plant and equipment AMT credit carryforwards............................... $ 938,672 $16,756,918
Business credit carryforwards........................................................ 628,933
Net operating loss carryforwards..................................................... 17,721,115
----------- -----------
Total.......................................................................... 19,288,720 16,756,918
Less -- valuation allowance.......................................................... (7,927,904)
----------- -----------
Net............................................................................ $11,360,816 $16,756,918
=========== ===========
</TABLE>
As permitted by FAS 109, prior year financial statements have not been
restated to reflect the change in accounting method.
(3) Earnings per share are calculated based on the weighted average number of
common shares outstanding and those Common Stock equivalents that are deemed
to be dilutive. The 6% Convertible Subordinated Debentures Due 2002 are
considered to be Common Stock equivalents. Accordingly, such debentures are
assumed to be converted, and interest expense on such debentures, net of tax
expense, has been considered in the computation of earnings per share, except
in those instances where the effects of conversion would be antidilutive.
(4) Included in the results of operations for the nine months ended September
30, 1995 are (i) a gain of $3.2 million (included in other income) from the
sale of gold and silver purchased in the open market which was in turn
delivered pursuant to fixed price forward contracts during the quarter ended
September 30, 1995; and (ii) $2.4 million of net income from discontinued
operations (including the $2.2 million after-tax gain from the related sale
of certain non-mining assets in May 1995) during the nine-month period.
9
<PAGE> 11
DESCRIPTION OF CAPITAL STOCK
COMMON STOCK
The Company is authorized to issue up to 60,000,000 shares of Common Stock,
of which, at November 15, 1995, 15,600,730 shares were outstanding and 1,059,211
shares were held as treasury stock, 4,864,179 shares were reserved for issuance
upon conversion of the $74,957,000 principal amount of the outstanding
Debentures, 3,880,481 shares were reserved for possible issuance upon the
conversion of the Company's $100 million principal amount of outstanding 6 3/8%
Convertible Subordinated Debentures Due 2004, 1,955,416 shares were reserved for
issuance upon conversion of the Company's $50 million principal amount of
outstanding 6% Convertible Subordinated Debentures Due 2002, 566,908 shares were
reserved for issuance under the Company's Executive Compensation Program and
200,000 shares were reserved for issuance under the Company's Non-Employee
Directors Stock Option Plan.
The holders of Common Stock are entitled to one vote for each share held of
record on each matter submitted to a vote of stockholders, and upon giving
notice required by law, may cumulate their votes in elections of directors.
Subject to preferences that may be applicable to any shares of Preferred Stock
of the Company outstanding at the time, holders of Common Stock are entitled to
receive ratably such dividends as may be declared by the Board of Directors out
of funds legally available therefor and, in the event of the liquidation,
dissolution or winding up of the Company, are entitled to share ratably in all
assets remaining after payment of liabilities. Holders of Common Stock have no
preemptive rights and have no rights to convert their Common Stock into any
other security. The outstanding Common Stock is fully-paid and non-assessable.
The Company's Articles of Incorporation include a "fair price" provision
applicable to certain business combination transactions in which the Company may
be involved. The provision requires that an Interested Stockholder (the holder
of 10% or more of the Company's outstanding shares of Common Stock) not engage
in certain specified transactions (e.g., mergers, sales of assets, dissolution
and liquidation) unless one of three conditions is met: (i) a majority of the
directors who are unaffiliated with the Interested Stockholder and were
directors before the Interested Stockholder became an Interested Stockholder
approve the transaction; (ii) holders of 80% or more of the outstanding shares
of Common Stock approve the transaction; or (iii) the stockholders are all paid
a "fair price," i.e., generally the higher of the fair market value of the
shares or the same price as the price paid to stockholders in the transaction in
which the Interested Stockholder acquired its block. By discouraging certain
types of hostile takeover bids, the fair price provision may tend to insulate
current management against the possibility of removal. The Company is not aware
of any person or entity proposing or contemplating such a transaction.
The transfer agent and registrar for the Company's Common Stock is First
Interstate Bank of Oregon, N.A., Portland, Oregon.
PREFERRED STOCK
The Company is authorized to issue up to 10,000,000 shares of Preferred
Stock, none of which have been issued. The Board of Directors has the authority
to determine the dividend rights, dividend rates, conversion rights, voting
rights, rights and terms of redemption and liquidation preferences, redemption
prices, sinking fund terms on any series of Preferred Stock, the number of
shares constituting any such series and the designation thereof. Holders of
Preferred Stock have no preemptive rights and have no rights to convert their
Preferred Stock into any other securities. While series may be designated and
Preferred Stock may be issued from time to time in the future, except upon
exercise of the Rights (as described below), the Company has no present plans to
issue any such shares.
On May 24, 1989, the Board of Directors of the Company declared a dividend
distribution of one Right for each outstanding share of the Company's Common
Stock to stockholders of record at the close of business on June 16, 1989. Each
Right entitles the registered holder to purchase from the Company one
one-hundredth of a share of Series A Preferred Stock at a purchase price of $100
in cash ("Purchase Price"), subject to adjustment. The description and terms of
the Rights are set forth in a Rights Agreement, dated as of May 24, 1989 (the
"Rights Agreement"), between the Company and First Interstate Bank of Oregon,
N.A., as Rights
10
<PAGE> 12
Agent. The Rights are not exercisable or detachable from the Common Stock until
ten days after any person or group acquires 20% or more (or commences a tender
offer for 30% or more) of the Company's Common Stock. If any person or group
acquires 30% or more of the Company's Common Stock or acquires the Company in a
merger or other business combination, each Right (other than those held by the
acquiring person) will entitle the holder to purchase Preferred Stock of the
Company or common stock of the acquiring company having a market value of
approximately two times the $100 exercise price. The Rights expire on May 24,
1999, and can be redeemed by the Company at any time prior to their becoming
exercisable. Shares of Common Stock issued prior to the expiration date of the
Rights upon conversion of the Debentures will be accompanied by Rights.
STANDBY ARRANGEMENTS
Under the terms and subject to the conditions of a Standby Agreement (the
"Standby Agreement"), UBS Securities Inc. (the "Purchaser") has agreed on the
Redemption Date to purchase from the Company the number of shares (the
"Redemption Shares") of Common Stock that would have been issuable upon
conversion of the Debentures that are not surrendered for conversion on or prior
to the Expiration Time. The Redemption Shares will be purchased by the Purchaser
from the Company at a price per share of $16.49 (i.e., $1,070 / 64.9). The
Purchaser may purchase Debentures in the open market or otherwise prior to the
Expiration Time.
The Company has been advised that the Purchaser proposes to offer any
Common Stock purchased from the Company or acquired on conversion by the
Purchaser of Debentures for resale as set forth on the cover page of this
Prospectus. The Purchaser may also make sales to certain securities dealers at
prices which may reflect concessions from the prices at which the shares are
then being offered to the public. The amount of such concessions will be
determined from time to time by the Purchaser. The sales of Common Stock so
offered are offered by the Purchaser subject to prior sale, when, as, and if
received by the Purchaser, and subject to its right to reject orders in whole or
in part. The Purchaser has agreed to remit to the Company 50% of the amount, if
any, by which the aggregate net proceeds received by the Purchaser from sales of
the Redemption Shares exceeds the aggregate purchase price of the Redemption
Shares.
Pursuant to the Standby Agreement, the Company has agreed to pay a standby
fee to the Purchaser for the commitments undertaken by it under the Standby
Agreement. The standby fee ranges from .25% to 1.00% of the aggregate redemption
price of 107% of the principal amount of the outstanding Debentures depending on
the difference between the market value per share of the Common Stock at the
time the Debentures are called for redemption and $16.49. In addition, a take-up
fee will also be paid to the Purchaser in an amount ranging from 2.25% to 6.00%
of $16.49 multiplied by the number of Redemption Shares depending upon the
number of such shares purchased and the difference between the Common Stock
price at the time the Debentures are called for redemption and $16.49. In
addition, the Purchaser has agreed to advance to the Company monies, if any,
required for deposit with the Trustee pursuant to the terms of the Indenture
with the Company reimbursing the Purchaser for the cost of any such deposit. The
Company has agreed to reimburse the Purchaser for its reasonable out-of-pocket
expenses, including the fees and disbursements of its counsel.
During the period beginning from the date of this Prospectus and continuing
to and including the Redemption Date, and, if the Purchaser purchases any
Redemption Shares, further continuing and including the date ending 90 days
after the Redemption Date, the Company has agreed not to offer, sell, contract
to sell or otherwise dispose of any shares of Common Stock of the Company or any
securities convertible into or exchangeable for shares of Common Stock (except
for any securities issued, offered, sold or disposed of by the Company in
connection with a business combination transaction approved by the Company's
shareholders or pursuant to its stock option and other benefit plans maintained
for its officers, directors and employees or Common Stock issued or distributed
in connection with the conversion of any security of the Company outstanding on
the date of this Prospectus) without the Purchaser's prior written consent.
The Company has agreed to indemnify the Purchaser against certain
liabilities, including liabilities under the Securities Act.
11
<PAGE> 13
The Purchaser may assist in the solicitation of conversions by holders of
Debentures but will receive no commission therefor.
In the ordinary course of their regular business the Purchaser and certain
affiliates of the Purchaser may provide investment banking and commercial
banking services to the Company.
LEGAL MATTERS
The legality of the Common Stock offered hereby will be passed upon for the
Company by Freedman, Levy, Kroll & Simonds, Washington, D.C. and for the
Purchaser by Cravath, Swaine & Moore, New York, New York.
INDEPENDENT AUDITORS
The consolidated financial statements of the Company appearing in the
Company's Annual Report on Form 10-K for the year ended December 31, 1994 have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
12
<PAGE> 14
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus, and, if given or
made, such information or representations must not be relied upon as having been
authorized. This Prospectus does not constitute an offer to sell or solicitation
of an offer to buy any securities other than the securities to which it relates
or an offer to sell or the solicitation of an offer to buy such securities in
any circumstances in which such offer or solicitation is unlawful. Neither the
delivery of this Prospectus nor any sale made hereunder shall, under any
circumstances, create any implication that there has been no change in the
affairs of the Company since the date hereof or that the information contained
herein is correct as of any time subsequent to its date.
------------------------
Table of Contents
<TABLE>
<CAPTION>
Page
-----
<S> <C>
Available Information........................ 2
Incorporation of Certain Documents by
Reference.................................. 2
The Company.................................. 3
Risk Factors................................. 4
Use of Proceeds.............................. 7
Price Range of Common Stock and Dividends.... 7
Capitalization............................... 8
Selected Consolidated Financial Data......... 9
Description of Capital Stock................. 10
Standby Arrangements......................... 11
Legal Matters................................ 12
Independent Auditors......................... 12
</TABLE>
4,864,179 SHARES
[LOGO]
COMMON STOCK
------------------------
Prospectus
November 15, 1995
------------------------
UBS SECURITIES INC.
<PAGE> 15
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses to be paid by the Registrant in connection with the
securities being registered are as follows:
<TABLE>
<S> <C>
SEC registration fee...................................................... $ 31,449
Printing and engraving expenses........................................... 7,500
Legal fees and expenses................................................... 150,000
Accounting fees and expenses.............................................. 45,000
Blue Sky fees and expenses (including legal fees)......................... 6,500
Miscellaneous............................................................. 4,551
--------
Total........................................................... $245,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under Title 30, Section 30-1-5 of the Idaho Code and Article VI(b) of the
Registrant's By-Laws, the Registrant's directors and officers may be indemnified
against certain liabilities which they may incur in their capacities as such.
The material terms of the indemnification provisions are indemnification (i)
with respect to civil, criminal, administrative or investigative proceedings
brought because the defendant is or was serving as an officer, director,
employee or agent of the Company; (ii) for judgments, fines and amounts paid in
settlement reasonably incurred; (iii) if the defendant acted in good faith and
in a manner he believed to be in the best interest of the Company; and (iv) if,
with respect to a criminal proceeding, he had no reasonable cause to believe his
conduct was unlawful. Attorney's fees are included in such indemnification to
the extent the indemnified party is successful on the merits in defense of the
proceeding. If the foregoing criteria are met, indemnification also applies to a
suit threatened or pending by the Company against the officer, director,
employee or agent with respect to attorney's fees unless there is negligence on
the part of the indemnified party. Indemnification is made only upon a
determination by the Company that it is proper under the circumstances because
the applicable standard is met. The determination shall be made by a majority
vote of (i) a quorum of the board of directors consisting of those persons who
are not parties to the proceeding; (ii) if such a quorum is not available, by
independent legal counsel in writing; or (iii) by the shareholders. Expenses for
defense may be paid in advance of final disposition of the proceeding if the
indemnified party provides an undertaking to repay such amounts if it is
determined that the applicable standard has not been met. The Registrant also
has an officers' and directors' liability insurance policy. This insurance
policy contains a limit of liability of $10 million with a retention to the
Company of $500,000, on a claims made basis. The policy covers claims against
officers and directors for "wrongful acts" and also reimburses the Company to
the extent the Company indemnifies officers and directors in accordance with
applicable law and its by-laws. "Wrongful act" is defined to mean any breach of
duty, neglect, error, misstatement, misleading statement, omission or act by the
directors or officers of the Company in their respective capacities as such, or
any matter claimed against them solely by reason of their status as directors or
officers of the Company. The policy contains numerous exclusions of liability
which are exceptions to coverage.
ITEM 16. EXHIBITS.
<TABLE>
<S> <C> <C>
1 -- Form of Standby Agreement
5 -- Legal opinion, dated November 15, 1995, of Freedman, Levy, Kroll & Simonds
regarding legality of securities offered
23.1 -- Consent of Ernst & Young LLP. (See page II-5.)
23.2 -- Consent of Freedman, Levy, Kroll & Simonds (included in Exhibit 5).
</TABLE>
II-1
<PAGE> 16
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this registration statement
or any material change to such information in this registration
statement.
Provided, however, that the undertakings set forth in paragraphs (i)
and (ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed with the Commission by the Registrant pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining liability under the Securities
Act of 1933, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that
is incorporated by reference in the registration statement shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-2
<PAGE> 17
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT OR AMENDMENT THERETO TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, IN COEUR D'ALENE, IDAHO, ON THE 14TH DAY OF NOVEMBER,
1995.
COEUR D'ALENE MINES CORPORATION
(Registrant)
By: DENNIS E. WHEELER
---------------------------------
DENNIS E. WHEELER
(CHAIRMAN OF THE BOARD, PRESIDENT
AND CHIEF EXECUTIVE OFFICER)
KNOW ALL MEN BY THESE PRESENTS, THAT EACH PERSON WHOSE SIGNATURE APPEARS
BELOW CONSTITUTES AND APPOINTS DENNIS E. WHEELER, JAMES A. SABALA AND WILLIAM F.
BOYD HIS TRUE AND LAWFUL ATTORNEYS-IN-FACT AND AGENTS, EACH ACTING ALONE, WITH
FULL POWERS OF SUBSTITUTION, FOR HIM AND IN HIS NAME, PLACE AND STEAD, IN ANY
AND ALL CAPACITIES, TO SIGN ANY OR ALL AMENDMENTS (INCLUDING POST-EFFECTIVE
AMENDMENTS) TO THIS REGISTRATION STATEMENT, AND TO FILE THE SAME, WITH EXHIBITS
THERETO, AND OTHER DOCUMENTS IN CONNECTION THEREWITH, WITH THE SECURITIES AND
EXCHANGE COMMISSION, GRANTING UNTO SAID ATTORNEYS-IN-FACT AND AGENTS, EACH
ACTING ALONE, FULL POWER AND AUTHORITY TO DO AND PERFORM FOR ALL INTENTS AND
PURPOSES AS HE MIGHT OR COULD DO IN PERSON, HEREBY RATIFYING AND CONFIRMING ALL
THAT SAID ATTORNEYS-IN-FACT AND AGENTS, EACH ACTING ALONE, OR HIS SUBSTITUTE OR
SUBSTITUTES, MAY LAWFULLY DO OR CAUSE TO BE DONE BY VIRTUE THEREOF.
II-3
<PAGE> 18
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT OR AMENDMENT THERETO HAS BEEN SIGNED BELOW BY THE
FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ----------------------------------------------- ------------------------- ------------------
<S> <C> <C>
Chairman of the Board of
Directors, President,
Chief Executive Officer
and Director (Principal
DENNIS E. WHEELER Executive Officer) November 14, 1995
- -----------------------------------------------
DENNIS E. WHEELER
Senior Vice President --
Finance and Treasurer,
(Principal Financial and
Accounting Officer) and
JAMES A. SABALA Director November 14, 1995
- -----------------------------------------------
JAMES A. SABALA
CECIL D. ANDRUS Director November 14, 1995
- -----------------------------------------------
CECIL D. ANDRUS
JOSEPH C. BENNETT Director November 14, 1995
- -----------------------------------------------
JOSEPH C. BENNETT
JAMES J. CURRAN Director November 14, 1995
- -----------------------------------------------
JAMES J. CURRAN
JEFFREY T. GRADE Director November 14, 1995
- -----------------------------------------------
JEFFERY T. GRADE
DUANE B. HAGADONE Director November 14, 1995
- -----------------------------------------------
DUANE B. HAGADONE
JAMES A. MCCLURE Director November 14, 1995
- -----------------------------------------------
JAMES A. MCCLURE
</TABLE>
II-4
<PAGE> 19
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the reference to our firm under the caption "Independent
Auditors" in this Registration Statement on Form S-3 and related prospectus of
Coeur d'Alene Mines Corporation and to the incorporation by reference therein of
our report dated February 10, 1995 with respect to the consolidated financial
statements and schedules of Coeur d'Alene Mines Corporation included in its
Annual Report on Form 10-K for the year ended December 31, 1994, filed with the
Securities and Exchange Commission.
ERNST & YOUNG LLP
Seattle, Washington
November 13, 1995
II-5
<PAGE> 20
EXHIBIT 23.2
ATTORNEYS' CONSENT
The consent of Freedman, Levy, Kroll & Simonds to the use of Exhibit 5
hereto, and to the references to their name under the heading "Legal Matters" in
the Prospectus constituting a part of this Registration Statement, is included
in that Exhibit.
II-6
<PAGE> 1
COEUR D'ALENE MINES CORPORATION
7% Convertible Subordinated Debentures Due 2002
STANDBY AGREEMENT
November 15, 1995
UBS Securities Inc.
299 Park Avenue
New York, N.Y. 10171-0026
Dear Sirs:
Coeur d'Alene Mines Corporation (the "Company") proposes to
redeem on December 15, 1995 (the "Redemption Date"), all of its outstanding 7%
Convertible Subordinated Debentures Due 2002 (the "Debentures") at a redemption
price of $1,070.00 for each $1,000 principal amount, plus accrued and unpaid
interest from June 15, 1995, to the Redemption Date of $35.00 per $1,000
principal amount, for a total redemption price of $1,105.00 (the "Redemption
Price"). The Debentures are convertible into shares of the Company's Common
Stock, par value $1.00 per share (the "Common Stock"). The right to convert
the Debentures into Common Stock will terminate at the close of business on
December 14, 1995 (the "Final Conversion Date").
In order to assure the availability of funds to redeem the
Debentures not converted on or prior to the Final Conversion Date, the Company
desires to make arrangements pursuant to which the shares of its Common Stock
issuable on the Redemption Date on conversion of Debentures not surrendered for
conversion by the close of business on the Final Conversion Date will be
purchased on the Redemption Date from the Company by you (the "Purchaser").
1. Representations and Warranties. The Company represents
and warrants to, and agrees with, the Purchaser as set forth below in this
Section 1. Certain terms used in this Section 1 are defined in paragraph (g)
hereof.
(a) The Company meets the requirements for use of Form S-3
under the Securities Act of 1933 (the "Act")
<PAGE> 2
2
and has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on such Form for the
registration under the Act of the sale by the Purchaser of any shares
of Common Stock that may be acquired by it upon conversion of
Debentures or purchased pursuant to Section 2(a) of this Agreement.
The Company proposes to file with the Commission a final prospectus in
accordance with Rules 430A and 424(b)(1) or (4). The Company has
included in such registration statement, as amended at the Effective
Date, all information (other than Rule 430A information) required by
the Act and the rules thereunder to be included in the Prospectus with
respect to the Common Stock registered pursuant to the Registration
Statement and the offering thereof. As filed, such final prospectus
shall contain all Rule 430A information, together with all other such
required information, with respect to the Common Stock registered
pursuant to the Registration Statement and the offering thereof and,
except to the extent the Purchaser shall agree in writing to a
modification, shall be in all substantive respects in the form
furnished to you prior to the Execution Time or, to the extent not
completed at the Execution Time, shall contain only such specific
additional information and other changes (beyond those contained in
the latest Preliminary Prospectus) as the Company has advised you,
prior to the Execution Time, will be included or made therein.
(b) On the Effective Date, the Registration Statement did,
and, when the Prospectus is first filed (if required) in accordance
with Rule 424(b), on the Final Conversion Date, on the Redemption Date
and on the Closing Date, the Prospectus (and any supplements thereto)
will, comply in all material respects with the applicable requirements
of the Act and the Securities Exchange Act of 1934 (the "Exchange
Act") and the respective rules thereunder; on the Effective Date, the
Registration Statement did not or will not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein not misleading; and, on the Effective Date, the
Prospectus, if not filed pursuant to Rule 424(b), did not or will not,
and on the date of any filing pursuant to Rule 424(b), on the Final
Conversion Date, on the
<PAGE> 3
3
Redemption Date and on the Closing Date, the Prospectus (together with
any supplement thereto) will not, include any untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the
Company makes no representations or warranties as to the information
contained in or omitted from the Registration Statement or the
Prospectus (or any supplement thereto) in reliance upon and in
conformity with information furnished in writing to the Company by or
on behalf of the Purchaser through the Purchaser specifically for
inclusion in the Registration Statement or the Prospectus (or any
supplement thereto).
(c) The Debentures are convertible into Common Stock at a
conversion price of $15.41 of principal amount of Debentures per share
of Common Stock or approximately 64.9 shares of Common Stock for each
$1,000 principal amount of Debentures. At the Execution Time, there
were $74,957,000 principal amount of Debentures outstanding; the
redemption of all the outstanding Debentures had been duly authorized
by the Company; by the close of business on the date of execution
hereof, all the Debentures shall have been duly called for redemption
in accordance with the Indenture between the Company and Bankers Trust
Company (the "Paying Agent") dated as of December 1, 1992 (the
"Indenture"), and the right to convert the Debentures into shares of
Common Stock will, as a result of such call, expire at 5:00 p.m.,
Eastern Standard Time, on the Final Conversion Date. A copy of the
form of notice of redemption and the related letter of transmittal
(collectively, the "Notice of Redemption") has been heretofore
delivered to the Purchaser. The Debentures have been duly and validly
authorized and issued and are fully enforceable in accordance with
their terms.
(d) The Company has neither taken nor will take, directly or
indirectly, any action designed to cause or result in, or that has
constituted or that might reasonably be expected to cause or result
in, stabilization or manipulation of the price of any security of the
Company to facilitate the conversion of the Debentures.
<PAGE> 4
4
(e) The Company has neither paid nor given, nor will pay or
give, directly or indirectly, any commission or other remuneration for
soliciting the conversion of any Debentures into Common Stock and
cash.
(f) Neither the issue and sale of the Standby Shares, nor the
consummation of any other of the transactions herein contemplated, nor
fulfillment of the terms hereof will conflict with, result in a breach
or violation of, or constitute a default under, any law or the charter
or bylaws of the Company or the terms of any indenture or other
material agreement or instrument to which the Company or any of its
subsidiaries is a party or is bound or any judgment, order or decree
applicable to the Company or any of its subsidiaries of any court,
regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over the Company or any of its
subsidiaries.
(g) The terms which follow, when used in this Agreement,
shall have the meanings indicated. The term "Effective Date" shall
mean each date that the Registration Statement and any post-effective
amendment or amendments thereto became or become effective and each
date after the date hereof on which a document incorporated by
reference in the Registration Statement is filed. "Execution Time"
shall mean the date and time that this Agreement is executed and
delivered by the parties hereto. "Preliminary Prospectus" shall mean
any preliminary prospectus referred to in paragraph (a) above and any
preliminary prospectus included in the Registration Statement at the
Effective Date that omits Rule 430A information. "Prospectus" shall
mean the prospectus relating to the Securities that is first filed
pursuant to Rule 424(b) after the Execution Time or, if no filing
pursuant to Rule 424(b) is required, shall mean the form of final
prospectus relating to the Securities included in the Registration
Statement at the Effective Date. "Registration Statement" shall mean
the registration statement referred to in paragraph (a) above,
including incorporated documents, exhibits and financial statements,
as amended at the Execution Time (or, if not effective at the
Execution Time, in the form in which it shall become effective), and,
in the event any post-effective amendment thereto becomes effective
<PAGE> 5
5
prior to the Closing Date (as hereinafter defined), shall also mean
such registration statement as so amended. Such term shall include
any Rule 430A Information deemed to be included therein at the
Effective Date as provided in Rule 430A. "Rule 415", "Rule 424",
"Rule 430A" and "Regulation S-K" refer to such rules or regulation
under the Act. "Rule 430A Information" means information with respect
to the Securities and the offering thereof permitted to be omitted
from the Registration Statement when it becomes effective pursuant to
Rule 430A. Any reference herein to the Registration Statement, a
Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include the documents incorporated by reference therein pursuant
to Item 12 of Form S-3 which were filed under the Exchange Act on or
before the Effective Date of the Registration Statement or the issue
date of such Preliminary Prospectus or the Prospectus, as the case may
be; and any reference herein to the terms "amend", "amendment" or
"supplement" with respect to the Registration Statement, any
Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include the filing of any document under the Exchange Act after
the Effective Date of the Registration Statement, or the issue date of
the Preliminary Prospectus or the Prospectus, as the case may be,
deemed to be incorporated therein by reference. "Standby Shares"
shall mean the shares of Common Stock to be purchased from the Company
pursuant to Section 2(a) hereof.
2. Purchase of Standby Shares. Subject to the terms and
conditions and in reliance upon the representations and warranties herein set
forth:
(a) In the event that less than all the outstanding
Debentures are surrendered for conversion at or prior to 5:00 p.m.,
Eastern Standard Time, on the Final Conversion Date, the Company
agrees to sell to the Purchaser, and the Purchaser agrees to purchase
from the Company, at a purchase price of $16.49 per share, such whole
number of additional shares of Common Stock as would have been
issuable upon the conversion of such of the Debentures which shall not
have been surrendered for conversion prior to the Redemption Date.
The Company shall notify the Purchaser of such number of shares as
soon as practicable after the expiration of convertibility of the
Debentures on the
<PAGE> 6
6
Final Conversion Date and in no event later than 9:00 a.m., Eastern
Standard Time, on the business day following the Final Conversion
Date.
(b) It is understood that the Purchaser intends to resell the
Standby Shares from time to time at prices prevailing in the open
market. With respect to any Standby Shares, the Purchaser, on or
prior to January 15, 1996, shall remit to the Company 50% of the
excess, if any, of the aggregate proceeds received by the Purchaser
from the sale of such Standby Shares (net of selling concessions,
transfer taxes and other expenses of sale) over an amount equal to $
16.49 multiplied by the number of such Standby Shares sold by such
Purchaser. Upon completion of the sale of the Standby Shares, the
Purchaser shall furnish to the Company a statement setting forth the
aggregate proceeds received on the sale thereof and the applicable
selling concessions, transfer taxes and other expenses of sale. For
purposes of the foregoing determination, any Standby Shares not sold
by or for the account of the Purchaser prior to the close of business
on January 10, 1996, shall be deemed to have been sold on such day for
an amount equal to the last reported sale price of the Common Stock on
the New York Stock Exchange on such day. Nothing contained herein
shall limit the right of the Purchaser, in its discretion, to
determine the price or prices at which, or the time or times when, any
Standby Shares shall be sold, whether or not prior to the Redemption
Date and whether or not for long or short account.
(c) Delivery of any payment for the Standby Shares shall be
made at 10:00 a.m., Eastern Standard Time, on December 19, 1995 (two
business days after the Redemption Date), or such other date as the
Purchaser and the Company may agree (such date and time of delivery
and payment for the Standby Shares being herein called the "Closing
Date"). Delivery of the Standby Shares shall be made to the Purchaser
against payment by the Purchaser of the purchase price thereof to or
upon the order of the Company by wire transfer of immediately
available funds. Delivery of the Standby Shares shall be made at such
location as the Purchaser shall reasonably designate at least one
business day in advance of the Closing Date and payment for the
Standby Shares shall be made at the offices of Cravath,
<PAGE> 7
7
Swaine & Moore, Worldwide Plaza, 825 Eighth Avenue, New York, N.Y.
10019. Certificates for the Standby Shares shall be registered in
such names and in such denominations as the Purchaser may request.
The Company agrees to have the Standby Shares available for
inspection, checking and packaging by the Purchaser in New York, New
York, prior to the Closing Date.
Unless the Company waives its right to receive immediately
available funds at the Closing Date and agrees to accept next-day
funds in lieu thereof, the Company shall pay to the Purchaser promptly
following the Closing Date an amount equal to the Purchaser's
overnight cost of funds on the purchase price payable by the Purchaser
at the Closing Date.
3. Compensation. As compensation for the commitment of the
Purchaser hereunder, the Company will pay to the Purchaser an amount equal to
the sum of (i) the Standby Fee (as defined in paragraph (a) of this Section 3)
plus (ii) the Take-up Fee (as defined in paragraph (b) of this Section 3).
(a) The "Standby Fee" shall be equal to:
(i) 1.00% of the Standby Commitment if the Cushion is
less than .1500;
(ii) 0.75% of the Standby Commitment if the Cushion
is equal to or greater than .1500 but less than .2000;
(iii) 0.50% of the Standby Commitment if the Cushion
is equal to or greater than .2000 but less than .2500; or
(iv) 0.25% of the Standby Commitment if the Cushion
is equal to or greater than .2500.
The "Standby Commitment" shall be equal to $80,203,990.00.
The "Cushion" shall be the fraction (expressed as a decimal)
having the difference of the Common Stock Price
<PAGE> 8
8
minus the Breakeven Price as its numerator and the Common Stock Price as its
denominator.
The "Common Stock Price" shall be an amount equal to the last
reported sale price on the New York Stock Exchange of the Common Stock on the
day immediately preceding the day of the Company's redemption announcement,
provided that such announcement is made before 5:00 p.m. New York City time.
If the Company's redemption announcement is made later than 5:00 p.m. New York
City time, then the Common Stock Price shall be equal to the last reported sale
price on the New York Stock Exchange of the Common Stock on the day of such
announcement.
The "Breakeven Price" shall be equal to $16.489.
(b) The "Take-up Fee" shall be an amount equal to the
Take-up Percentage multiplied by the Breakeven Price multiplied
by the number of Standby Shares.
(i) if the Cushion is greater than or equal to .1500,
then the "Take-up Percentage" shall be equal to:
(A) .0225 if the number of Standby Shares is
less than 486,418;
(B) .0300 if the number of Standby Shares is
equal to or greater than 486,418 but less than
1,459,254;
(C) .0375 if the number of Standby Shares is
equal to or greater than 1,459,254 but less than
2,432,090; or
(D) .0500 if the number of Standby Shares is
equal to or greater than 2,432,090.
(ii) if the Cushion is less than .1500, then the
Take-up Percentage shall be equal to:
(A) .0275 if the number of Standby Shares is
less than 486,418;
<PAGE> 9
9
(B) .0375 if the number of Standby Shares is
equal to or greater than 486,418 but less than
1,459,254;
(C) .0475 if the number of Standby Shares is
equal to or greater than 1,459,254 but less than
2,432,090; or
(D) .0600 if the number of Standby Shares is
equal to or greater than 2,432,090.
Such compensation shall be paid to the Purchaser by wire
transfer of immediately available funds on (i) if the Purchaser is required to
purchase any Standby Shares, the Closing Date, or (ii) otherwise, as soon as
practicable after the Final Conversion Date (but in no event later than two
business days thereafter).
4. Additional Purchases. On or after the date hereof, the
Purchaser may (but will not be obligated to) purchase Debentures, in the open
market or otherwise, in such amounts and at such prices as the Purchaser may
deem advisable. Any Common Stock acquired by the Purchaser upon conversion of
any Debentures acquired pursuant to this Section 4 may be sold at any time or
from time to time by the Purchaser. It is understood that, for the purpose of
stabilizing the price of the Common Stock or otherwise, the Purchaser may (but
will not be obligated to) make purchases and sales of Common Stock or
Debentures, in the open market or otherwise, for long or short account, on
such terms as it may deem advisable and it may overallot in arranging sales.
5. Agreements. Each of the parties agrees with the other
that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and
any amendment thereof, to become effective. Prior to the termination
of the offering of the Securities, the Company will not file any
amendment of the Registration Statement or supplement to the
Prospectus unless the Company has furnished the Purchaser with a copy
for its review prior to filing and will not file any such proposed
<PAGE> 10
10
amendment or supplement to which the Purchaser may reasonably object.
Subject to the foregoing sentence, if the Registration Statement has
become or becomes effective pursuant to Rule 430A, or filing of the
Prospectus is otherwise required under Rule 424(b), the Company will
cause the Prospectus, properly completed, and any supplement thereto
to be filed with the Commission pursuant to the applicable paragraph
of Rule 424(b) within the time period prescribed and will provide
evidence satisfactory to the Purchaser of such timely filing. The
Company will promptly advise the Purchaser (i) when the Registration
Statement, if not effective at the Execution Time, and any amendment
thereto, shall have become effective, (ii) when the Prospectus, and
any supplement thereto, shall have been filed (if required) with the
Commission pursuant to Rule 424(b), (iii) when, prior to termination
of the offering of the Securities, any amendment to the Registration
Statement shall have been filed or becomes effective, (iv) of any
request by the Commission for any amendment of the Registration
Statement or supplement to the Prospectus or for any additional
information, (v) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (vi)
of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose. The Company will use its best efforts to prevent the
issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Standby
Shares is required to be delivered under the Act, any event occurs as
a result of which the Prospectus, as then amended or supplemented,
would include any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading, or if
it shall be necessary to amend the Registration Statement or
supplement the Prospectus to comply with the Act or the Exchange Act
or the respective rules thereunder, the Company promptly will (i)
prepare and file with the
<PAGE> 11
11
Commission, subject to the second sentence of paragraph (a) of this
Section 5, an amendment or supplement which will correct such
statement or omission or effect such compliance and (ii) supply any
supplemented Prospectus to you in such quantities as you may
reasonably request.
(c) As soon as practicable, the Company will make generally
available to its security holders and to the Purchaser an earnings
statement or statements of the Company and its subsidiaries which will
satisfy the provisions of Section 11(a) of the Act and Rule 158 under
the Act.
(d) The Company will furnish to the Purchaser and counsel for
the Purchaser, without charge, signed copies of the Registration
Statement (including exhibits thereto) and, so long as delivery of a
prospectus by a Purchaser or dealer may be required by the Act, as
many copies of each Preliminary Prospectus and the Prospectus and any
supplement thereto as the Purchaser may reasonably request. The
Company will pay the expenses of printing or other production of all
documents relating to the transactions contemplated hereby. The
Company will also pay all reasonable out-of-pocket expenses of the
Purchaser, including the fees and disbursements of Purchaser's
counsel, and the fees and disbursements of the Paying Agent.
(e) The Company will arrange for the qualification of the
Standby Shares for sale under the laws of such jurisdictions as the
Purchaser may designate and will maintain such qualifications in
effect so long as required for the distribution of the Standby Shares;
provided, however, that the Company will not be required to do so in
any jurisdiction where such qualification would require the Company to
register to do business as a foreign corporation, would subject the
Company to taxation as doing business or would require the Company to
file a consent to general service of process therein, in any case
where it would not otherwise be so required or subject.
(f) The Company will mail or cause to be mailed on the date
of execution hereof the Notice of Redemption by first-class mail to
the registered
<PAGE> 12
12
holders of the Debentures, which mailing will conform to the
requirements of the Indenture.
(g) The Company will direct the Paying Agent to advise the
Purchaser daily of the amount of Debentures surrendered on the
previous day for redemption or for conversion.
(h) The Company will not take any action the effect of which
would be to require an adjustment in the conversion price of the
Debentures.
(i) The Company will not, prior to the Final Conversion Date
and for a period of 90 days following the Final Conversion Date,
without the prior written consent of the Purchaser, offer, sell or
contract to sell, or otherwise dispose of, directly or indirectly, or
announce, or file for the registration of, the offering of, any other
shares of Common Stock or any securities convertible into, or
exchangeable for, shares of Common Stock; provided, however, that the
Company may issue and sell or register Common Stock (a) in connection
with a business combination transaction approved by the Company's
shareholders, (b) pursuant to any employee stock option or other
benefit plan of the Company maintained for its officers, directors and
employees and in effect at the Execution Time and (c) upon the
conversion of securities outstanding at the Execution Time; and
provided further that the Company will no longer be bound by this
provision if the Purchaser does not acquire any Standby Shares
pursuant to Section 2(a) hereof.
(j) The Company confirms as of the date hereof that it is in
compliance with all provisions of Section 1 of Laws of Florida,
Chapter 92-198, An Act Relating to Disclosure of Doing Business With
Cuba, and the Company further agrees that, if it commences engaging in
business with the government of Cuba or with any person or affiliate
located in Cuba after the date the Registration Statement becomes or
has become effective with the Securities and Exchange Commission or
with the Florida Department of Banking and Finance (the "Department"),
whichever date is later, or if the information reported in the
Prospectus, if any, concerning the Company's business with Cuba or
with any
<PAGE> 13
13
person or affiliate located in Cuba changes in any material way, the
Company will provide the Department notice of such business or change,
as appropriate, in a form acceptable to the Department.
(k) The Purchaser agrees that in the event the Trustee should
require from the Company any deposit of funds pursuant to Section 1106
of the Indenture, the Purchaser shall advance such funds to the
Company and deposit such funds with the Trustee on behalf of the
Company (such advance and deposit a "Trustee Deposit"). The Company
agrees to repay or to cause the Trustee to repay to the Purchaser any
such Trustee Deposit as soon as the Trustee no longer requires such
funds to be deposited with it pursuant to Section 1106 of the
Indenture. The Company agrees further to reimburse the Purchaser on
the Closing Date in an amount equal to the Purchaser's cost of funds
on any such Trustee Deposit from the date of such deposit through the
Closing Date.
(l) The Company will waive any defect or irregularity with
respect to the transmittal of any Debenture submitted for conversion
into Common Stock, so long as any such waiver will not have adverse
financial consequences for the Company.
6. Conditions to the Obligations of the Purchaser. The
obligations of the Purchaser hereunder to purchase any Standby Shares shall be
subject to the accuracy of the representations and warranties on the part of
the Company contained herein as of the Execution Time, each Effective Date
occurring after the Execution Time, the Final Conversion Date, the Redemption
Date and the Closing Date, to the accuracy of the statements of the Company
made in any certificates pursuant to the provisions hereof, to the performance
by the Company of its obligations hereunder and to the following additional
conditions:
(a) Unless the Purchaser agrees in writing to a later time,
the Registration Statement shall become effective not later than 5:00
p.m., Eastern Standard Time, on the date of this Agreement; if filing
of the Prospectus, or any supplement thereto, is required pursuant to
Rule 424(b), the Prospectus, and any such supplement, shall be filed
in the manner and within the time period required by Rule 424(b); and
no stop order suspending the effectiveness of the Registration
<PAGE> 14
14
Statement shall have been issued and no proceedings for that purpose
shall have been instituted or threatened.
(b) On the date of this Agreement and on the Closing Date,
the Company shall have furnished to the Purchaser the opinion of
Freedman, Levy, Kroll & Simonds, counsel for the Company, dated as of
the date of this Agreement and as of the Closing Date, respectively,
to the effect that:
(i) each of the Company, Coeur Alaska, Inc., Coeur
Rochester, Inc., CDE Chilean Mining Corporation, Callahan
Mining Corporation, Coeur New Zealand, Inc. and Silver Valley
Resources Corporation (individually a "Material Subsidiary"
and collectively the "Material Subsidiaries") has been duly
incorporated or organized and is validly existing as a
corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized, with full
corporate power and authority to own its properties and
conduct its business as described or incorporated in the
Prospectus, and is duly qualified to do business as a foreign
corporation in and is in good standing under the laws of each
jurisdiction listed on an exhibit to such opinion;
(ii) all the outstanding shares of capital stock of
each Material Subsidiary have been duly and validly authorized
and issued and are fully paid and nonassessable, and, except
as otherwise set forth or incorporated in the Prospectus, all
outstanding shares of capital stock of the Material
Subsidiaries other than directors' qualifying shares are owned
of record, and, to such counsel's knowledge, beneficially, by
the Company either directly or through wholly owned
subsidiaries free and clear of any perfected security interest
and, to the knowledge of such counsel, after due inquiry, any
other security interests, claims, liens or encumbrances;
(iii) the Company's authorized equity capitalization
is as set forth or incorporated in the Prospectus; the capital
stock of the Company conforms in all material respects to the
description thereof contained or incorporated in
<PAGE> 15
15
the Prospectus; the outstanding shares of Common Stock have
been duly and validly authorized and issued and are fully paid
and nonassessable; the Standby Shares have been duly and
validly authorized and, when issued and delivered to and paid
for by the Purchaser pursuant to this Agreement, will be fully
paid and nonassessable; the shares of Common Stock issuable
upon the conversion of the Debentures have been duly and
validly authorized and, when issued and delivered upon
conversion of the Debentures, will be fully paid and
nonassessable; the shares of Common Stock issuable upon the
conversion of the Debentures and the Standby Shares have been
duly authorized for trading, subject to official notice of
issuance, on the New York Stock Exchange; the form of the
certificate for the Common Stock is in valid and sufficient
form; and the holders of outstanding shares of capital stock
of the Company are not entitled to preemptive or other rights
to subscribe for the Standby Shares or for the shares of
Common Stock issuable upon conversion of the Debentures;
(iv) to the best knowledge of such counsel, there is
no pending or threatened action, suit or proceeding before any
court or governmental agency, authority or body or any
arbitrator involving the Company or any of its subsidiaries of
a character required to be disclosed in the Registration
Statement which is not adequately disclosed or incorporated in
the Prospectus, and there is no franchise, contract or other
document of a character required to be described in the
Registration Statement or Prospectus, or to be filed as an
exhibit, which is not described or incorporated or filed as
required;
(v) the Registration Statement has become effective
under the Act; any required filing of the Prospectus, and any
supplements thereto, pursuant to Rule 424(b) has been made in
the manner and within the time period required by Rule 424(b);
to the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has
been issued, no proceedings for that purpose have been
<PAGE> 16
16
instituted or threatened; and the Registration Statement and
the Prospectus (other than the financial statements and
related notes, the financial statement schedules and other
financial and statistical information contained or
incorporated by reference therein as to which such counsel
need express no opinion) comply as to form in all material
respects with the applicable requirements of the Act and the
Exchange Act and the respective rules thereunder;
(vi) this Agreement has been duly authorized,
executed and delivered by the Company;
(vii) no consent, approval, authorization or order of
any court or governmental agency or body is required for the
consummation by the Company of the transactions contemplated
herein, except such as have been obtained under the Act and
such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution
of the Standby Shares by the Purchaser and such other
approvals (specified in such opinion) as have been obtained;
(viii) the Debentures have been duly and validly
called for redemption on December 15, 1995; neither the call
of the Debentures for redemption, the conversion or redemption
thereof, the issue and sale of the Standby Shares, nor the
consummation of any other of the transactions herein
contemplated nor the fulfillment of the terms hereof will
conflict with, result in a breach of, or constitute a default
under the charter or bylaws of the Company or the terms of any
indenture or other agreement or instrument known to such
counsel and to which the Company or any of the Material
Subsidiaries is a party or by which it is bound, or any
judgment, order or decree known to such counsel to be
applicable to the Company or any of the subsidiaries of the
Company of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over the
Company or any of the Material Subsidiaries;
<PAGE> 17
17
(ix) neither the call of the Debentures for
redemption, the conversion or redemption thereof, the issue
and sale of the Standby Shares by the Company nor the
consummation of any of the transactions herein contemplated
nor the fulfillment of the terms hereof will conflict with,
result in a breach of, or constitute a default under any
United States statute;
(x) upon the Company taking the specific actions
enumerated in such counsel's opinion, notice of redemption of
the Debentures will have been duly and lawfully given, all the
outstanding Debentures will have been duly called for
redemption on the Redemption Date and the right to convert the
Debentures will expire on the Final Conversion Date; and
(xi) no holders of securities of the Company have
rights to the registration of such securities under the
Registration Statement which have not heretofore been waived
in writing.
In addition, such counsel shall state that they have participated in
conferences with directors, officers and other representatives of the
Company, representatives of the independent public accountants for the
Company, representatives of the Purchaser and counsel for the
Purchaser, at which conferences the contents of the Registration
Statement and the Prospectus and related matters were discussed, and,
although such counsel have not independently verified and are not
passing upon and assume no responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement and the Prospectus (except to the extent
specified elsewhere in such opinion or with reference to such
counsel), no facts have come to such counsel's attention that lead
such counsel to believe that, at the Effective Date, the Registration
Statement included any untrue statement of a material fact or omitted
to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading or that the Prospectus includes any untrue statement of a
material fact or omits to state any material fact necessary to make
the statements therein, in light of the
<PAGE> 18
18
circumstances under which they were made, not misleading (it being
understood that such counsel express no view with respect to the
financial statements and related notes, the financial statement
schedules or other financial, statistical and accounting information
contained or incorporated by reference in the Registration Statement
or Prospectus).
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other
than the State of Idaho or the United States, to the extent they deem
proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Purchaser and (B) as to matters of
fact, to the extent they deem proper, on certificates of responsible
officers of the Company or its subsidiaries and public officials.
References to the Prospectus in this paragraph (b) include any
supplements thereto at the Closing Date.
(c) On the date of this Agreement and on the Closing Date,
the Purchaser shall have received from Cravath, Swaine & Moore,
counsel for the Purchaser, such opinion or opinions, dated the date of
this Agreement and the Closing Date, respectively, with respect to the
issuance and sale of the Standby Shares, the Registration Statement,
the Prospectus (together with any supplement thereto) and other
related matters as the Purchaser may reasonably require, and the
Company shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such matters.
(d) On the date of this Agreement, and on each Effective Date
occurring after the Execution Time and on the Closing Date, the
Company shall have furnished to the Purchaser a certificate of the
Company, signed by the Chairman of the Board and the principal
financial or accounting officer of the Company, dated the date of
delivery, to the effect that the signers of such certificate have
carefully examined the Registration Statement, the Prospectus, any
supplement to the Prospectus and this Agreement and that:
<PAGE> 19
19
(i) the representations and warranties of the Company
in this Agreement are true and correct in all material
respects on and as of the date of such certificate as if made
on the date of such certificate and the Company has complied
with all the agreements and satisfied all the conditions on
its part to be performed or satisfied at or prior to the date
of such certificate;
(ii) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings
for that purpose have been instituted or, to the Company's
knowledge, have been threatened; and
(iii) since the date of the most recent financial
statements included in the Prospectus (exclusive of any
supplement thereto), there has been no material adverse change
in the condition (financial or other), earnings, business or
properties of the Company and its subsidiaries, whether or not
arising from transactions in the ordinary course of business,
except as set forth or contemplated in the Prospectus
(exclusive of any supplement thereto).
(e) At the Execution Time, and on each Effective Date
occurring after the Execution Time on which financial information is
included or incorporated in the Registration Statement or the
Prospectus and on the Closing Date, Ernst & Young shall have delivered
to the Purchaser a letter or letters, dated as of the date of
delivery, in form and substance satisfactory to the Purchaser,
confirming that they are independent public accountants with respect
to the Company within the meaning of the Act and the Exchange Act and
the respective applicable published rules and regulations thereunder,
and stating in effect that:
(i) in their opinion, the audited financial
statements of the Company for the year ended December 31, 1994
included or incorporated in the Registration Statement and the
Prospectus and reported on by them comply in form in all
material respects with the applicable accounting requirements
of the Act and the Exchange Act and the related published
rules and regulations;
<PAGE> 20
20
(ii) on the basis of a reading of the latest
unaudited financial statements made available by the Company
and its subsidiaries; carrying out certain specified
procedures (but not an examination in accordance with
generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the
comments set forth in such letter; a reading of the minutes of
the meetings of the stockholders and directors of the Company
and their Material Subsidiaries; and inquiries of certain
officials of the Company who have responsibility for financial
and accounting matters of the Company and its subsidiaries as
to transactions and events subsequent to December 31, 1994,
nothing came to their attention which caused them to believe
that:
(1) the unaudited financial statements of the
Company included or incorporated in the Registration
Statement and the Prospectus do not comply in form in
all material respects with applicable accounting
requirements and with the published rules and
regulations of the Commission with respect to
financial statements included or incorporated in
quarterly reports on Form 10-Q under the Exchange
Act; and said unaudited financial statements are not
in conformity with generally accepted accounting
principles applied on a basis substantially
consistent with that of the audited financial
statements included or incorporated in the
Registration Statement and the Prospectus; or
(2) with respect to the period subsequent to
September 30, 1995, there were any changes, at a
specified date not more than five business days prior
to the date of the letter, in the capital stock,
short-term debt or long-term debt of the Company or
decreases in the net current assets or shareholders'
equity of the Company as compared with the amounts
shown on the most recent consolidated balance sheet
included or incorporated in the Registration
Statement and the Prospectus, or for the period from
September 30, 1995, to such specified date
<PAGE> 21
21
there were any decreases, as compared with the
corresponding period in the preceding year in
consolidated net sales, except in all instances for
changes or decreases set forth in such letter, in
which case the letter shall be accompanied by an
explanation by the Company as to the significance
thereof unless said explanation is not deemed
necessary by the Purchaser;
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and its subsidiaries) set forth in the Registration
Statement and the Prospectus, including the information for
the year ended December 31, 1994 included in Items 1, 2, 6, 7
and 11 of the Company's Annual Report on Form 10-K,
incorporated in the Registration Statement and the Prospectus,
and the information included in the "Management's Discussion
and Analysis of Financial Condition and Results of Operations"
included or incorporated in any of the Company's Quarterly
Reports on Form 10-Q or any Current Reports on Form 8-K
incorporated in the Registration Statement and the Prospectus,
agrees with the accounting records of the Company and its
subsidiaries, excluding any questions of legal interpretation;
and
(iv) on the basis of a reading of any unaudited pro
forma financial statements included or incorporated in the
Registration Statement and the Prospectus (the "pro forma
financial statements"), carrying out certain specified
procedures, inquiries of certain officials of the Company who
have responsibility for financial and accounting matters, and
proving the arithmetic accuracy of the application of the pro
forma adjustments to the historical amounts in the pro forma
financial statements, nothing came to their attention which
caused them to believe that the pro forma financial statements
do not comply in form in all material respects with the
<PAGE> 22
22
applicable accounting requirements of Rule 11-02 of Regulation
S-X or that the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of such
statements.
References to the Prospectus in this paragraph (e) include any
supplement thereto at the date of the letter.
(f) Subsequent to the Execution Time or, if earlier, the
dates as of which information is given in the Registration Statement
(exclusive of any amendment thereof) and the Prospectus (exclusive of
any supplement thereto), there shall not have been (i) any change or
decrease specified in the letter or letters referred to in paragraph
(e) of this Section 6 or (ii) any change, or any development involving
a prospectus change, in or affecting the business or properties of the
Company and its subsidiaries the effect of which, in any case referred
to in clause (i) or (ii) above, is, in the judgment of the Purchaser,
so material and adverse as to make it impractical or inadvisable to
proceed with the offering or delivery of the Standby Shares as
contemplated by the Registration Statement (exclusive of any amendment
thereof) and the Prospectus (exclusive of any supplement thereto).
(g) The Company shall have furnished to the Purchaser such
further information, certificates and documents as the Purchaser may
reasonably request.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Purchaser and its counsel, this
Agreement and all obligations of the Purchaser hereunder may be cancelled at,
or at any time prior to, the Closing Date by the Purchaser. Notice of such
cancellation shall be given to the Company in writing or by telephone or
telegraph confirmed in writing.
<PAGE> 23
23
The documents required to be delivered by this Section 6 shall
be delivered to the offices of Cravath, Swaine & Moore, Worldwide Plaza, 825
Eighth Avenue, New York, NY 10019-7475, on the date of this Agreement or on the
Closing Date, as applicable.
7. Reimbursement of Purchaser's Expenses. If the sale of the
Standby Shares provided for herein is not consummated because any condition to
the obligations of the Purchaser set forth in Section 6 hereof is not
satisfied, because of any termination pursuant to Section 10 hereof or because
of any refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by the Purchaser, the Company will reimburse the Purchaser upon demand
for all out-of-pocket expenses (including reasonable fees and disbursements of
counsel) that shall have been incurred by them in connection with the proposed
purchase and sale of the Standby Shares.
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless the
Purchaser and each person, if any, who controls the Purchaser within the
meaning of either Section 15 of the Act or Section 20 of the Exchange Act, from
and against any and all losses, claims, damages and liabilities (or actions in
respect thereof) (including, without limiting the foregoing, the reasonable
legal and other expenses incurred in connection with investigating or defending
or preparing to defend or appearing as a third party witness in connection with
any such loss, claim, damage, liability or action, as such expenses are
incurred) arising out of or based on any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or the
Prospectus or any Preliminary Prospectus, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages, liabilities or expenses are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon the
following information furnished to the Company by you in (i) the third
paragraph of text on the cover page of the Prospectus concerning the terms of
the standby arrangements with the Purchaser and (ii) the first three paragraphs
of text under the caption "Standby Arrangements" in the Prospectus (all of the
<PAGE> 24
24
foregoing the "Purchaser's Information"). This indemnity agreement will be in
addition to any liability which the Company may otherwise have to the persons
referred to above in this Section 8(a).
(b) The Purchaser agrees to indemnify and hold harmless the
Company, the directors of the Company, the officers of the Company who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of either Section 15 of the Act or Section 20 of the Exchange Act
from and against any and all losses, claims, damages and liabilities (or
actions in respect thereof) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or the
Prospectus or any Preliminary Prospectus, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only with
reference to the Purchaser's Information. This indemnity agreement will be in
addition to any liability which the Purchaser may otherwise have to the persons
referred to above in this Section 8(b).
(c) In case any action or proceeding (including any
governmental or regulatory investigation or proceeding) shall be instituted
involving any person in respect of which indemnity may be sought pursuant to
either of the two preceding paragraphs, such person (hereinafter called the
indemnified party) shall promptly notify the person against whom such indemnity
may be sought (hereinafter called the indemnifying party) in writing; however,
the omission to so notify the indemnifying party shall relieve the indemnifying
party from liability under the two preceding paragraphs only to the extent
prejudiced thereby. The indemnifying party, upon request of the indemnified
party, shall assume the defense thereof, including the employment of counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others that the indemnifying party may designate and shall pay
the fees and disbursements of such counsel related to such proceeding. In any
such action or proceeding any indemnified party shall have the right to retain
its own counsel, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such counsel
or (ii) the named parties to any such proceeding (including any impleaded
parties) include
<PAGE> 25
25
both the indemnifying party and the indemnified party and representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for (a) the reasonable fees and
expenses of more than one separate firm (in addition to any local counsel) for
the Purchaser and all persons, if any, who control the Purchaser within the
meaning of either Section 15 of the Act or Section 20 of the Exchange Act; and
(b) the reasonable fees and expenses of more than one separate firm (in
addition to any local counsel) for the Company, its directors, its officers who
sign the Registration Statement and each person, if any, who controls the
Company within the meaning of either such Section, and that all such fees and
expenses shall be reimbursed as they are incurred. In the case of any such
separate firm for the Purchaser and such control persons of the Purchaser, such
firm shall be designated in writing by the Purchaser.
(d) If the indemnification provided for in this Section 8 is
insufficient or unavailable to an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities and expenses (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and the Purchaser on the other from the offering of
the Standby Shares or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law or if the indemnified party shall have failed
to the prejudice of the indemnifying party to give the notice required by
Section 8(c), in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault
of the Company on the one hand and the Purchaser on the other in connection
with the statements or omissions which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
shall be deemed to be equal to the sum of the net amount paid by the Purchaser
to the Company on the Closing Date and the relevant benefits received by the
Purchaser on the other
<PAGE> 26
26
hand shall be deemed to be equal to the total fees payable by the Company to
the Purchaser pursuant to Section 3 hereof. The relative fault of the Company
on the one hand and the Purchaser on the other shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by the Purchaser and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(e) The Company and the Purchaser agree that it would not be
just and equitable if contribution pursuant to Section 8(d) were determined by
pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to in the immediately preceding paragraph shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of Section 8(d), in no event shall the Purchaser
be required to contribute any amount in excess of the amount by which the total
price at which the Standby Shares distributed to the public were offered to the
public exceeds the amount of any damages which the Purchaser has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
9. Soliciting Conversions. The Purchaser may assist the
Company in soliciting conversion of the Debentures by the holders thereof but
shall not be entitled to compensation by the Company for any such assistance.
10. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Purchaser, by notice given to the
Company at any time prior to the Closing Date, if prior to such time (i) there
has been, since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any
<PAGE> 27
27
material adverse change in the condition, financial or otherwise, earnings,
business or prospects of the Company and its subsidiaries considered as a
whole, whether or not arising in the ordinary course of business or (ii) a
banking moratorium shall have been declared either by Federal or New York State
authorities or (iii) there has occurred any outbreak or escalation of
hostilities or other calamity or crisis or material change in existing national
or international financial, political, economic or securities market
conditions, the effect of which is such as to make it, in the judgment of the
Purchaser, impracticable or inadvisable to market the Standby Shares in the
manner contemplated in the Prospectus or enforce contracts for the sale of the
Standby Shares or (iv) trading in the Common Stock of the Company has been
suspended by the Commission or the New York Stock Exchange, or trading
generally on either the American Stock Exchange or the New York Stock Exchange
has been suspended, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices for securities have been required, by either of
said exchanges or by order of the Commission or any other governmental
authority.
11. Representations and Indemnities to Survive. The
respective agreements, representations, warranties, indemnities and other
statements of the Company or its officers and of the Purchaser set forth in or
made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of the Purchaser or the
Company or any of the officers, directors or controlling persons referred to in
Section 8 hereof, and will survive the conversion of any Debentures and the
delivery of and payment for any Standby Shares. The provisions of Sections 7
and 8 hereof shall survive the termination or cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Purchaser, will be mailed,
delivered or telegraphed and confirmed to it at 299 Park Avenue, 5th floor, New
York, NY 10171-0026, Attention: Richard M. Messina, with a copy separately
delivered to Cravath, Swaine & Moore, 825 Eighth Avenue, New York, New York
10019, attention of: David G. Ormsby, Esq.; or, if sent to the Company, will
be mailed, delivered or telegraphed and confirmed to it at 505 Front Avenue,
P.O. Box I, Coeur d'Alene, ID 83814, with a copy separately delivered to
Freedman, Levy, Kroll & Simonds,
<PAGE> 28
28
1050 Connecticut Avenue, N.W., Suite 825, Washington, DC 20036-5366, Attention:
Walter Freedman, Esq.
13. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 8 hereof,
and no other person will have any right or obligation hereunder.
14. Counterparts. This Agreement may be executed in two or
more counterparts, each of which when taken together shall constitute but one
contract.
15. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York.
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
between the Company and the Purchaser.
Very truly yours,
COEUR D'ALENE MINES CORPORATION
By:
---------------------------
Name: Dennis E. Wheeler
Title: Chairman
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above
written.
UBS SECURITIES INC.
By:
--------------------------------------
Name: Brooks J. Klimley
Title: Managing Director
<PAGE> 1
[FREEDMAN, LEVY, KROLL & SIMONDS LETTERHEAD]
EXHIBIT 5
November 15, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Coeur d'Alene Mines Corporation
Registration Statement on Form S-3
Gentlemen:
We are counsel to Coeur d'Alene Mines Corporation (the "Company") and have
represented the Company in connection with the Registration Statement on Form
S-3 filed with the Commission today (together with all exhibits thereto, the
"Registration Statement"). The Registration Statement relates to the
underwritten public offering of up to 4,864,179 shares of the Company's common
stock, par value of $1.00 per share (the "Shares"), issuable to UBS Securities
Inc. (the "Purchaser") pursuant to the terms of a Standby Agreement (the
"Standby Agreement") between the Company and the Purchaser as described in the
Prospectus forming a part of the Registration Statement. The Standby Agreement
is being entered into in connection with the Company's call for redemption on
December 15, 1995 (the "Redemption Date") of all of its outstanding 7%
Convertible Subordinated Debentures Due 2002, and provides that the Purchaser
will purchase from the Company all Shares which would have been delivered upon
conversion of those Debentures that are not surrendered for conversion on or
before December 14, 1995.
This opinion is being delivered to the Commission as Exhibit 5 to the
Registration Statement.
We have examined (1) the Articles of Incorporation, and all amendments
thereto, as certified by the Secretary of State of the State of Idaho, (2) the
By-Laws of the Company, as certified by the Secretary of the Company as being
those currently in effect, (3) the Registration Statement and (4) such other
corporate records, certificates, documents and other instruments as in our
opinion are necessary or appropriate in connection with expressing the opinions
set forth below.
Based upon the foregoing, it is our opinion that:
1. The Company is a corporation duly organized and existing under the
laws of the State of Idaho.
2. When the following events shall have occurred:
(a) the Registration Statement, as amended, shall have been
ordered effective by the Commission in accordance with the
Securities Act of 1933, as amended, and
(b) the Shares shall have been paid for and issued in accordance
with the terms of the Standby Agreement and as provided in
the Registration Statement,
the Shares thus sold will be legally issued, fully paid and non-assessable.
This firm hereby consents to the reference to it under the heading "Legal
Matters" appearing in the Prospectus which is a part of the Registration
Statement.
Sincerely,
Freedman, Levy, Kroll & Simonds
