SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934-
Filed by the Registrant- [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2)
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
FRANKLIN CONSOLIDATED MINING COMPANY, INC.
(Name of Registrant as Specified in Its Charter)
FRANKLIN CONSOLIDATED MINING COMPANY, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
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4) Proposed maximum aggregate value of transaction:
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5) Total Fee Paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid: ___________________________________
2) Form Schedule or Registration Statement No. _______________
3) Filing Party: _____________________________________________
4) Date Filed: ______________________________________________
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FRANKLIN CONSOLIDATED MINING COMPANY, INC.
76 Beaver Street
Suite 500
New York, NY 10005-3402
Telephone (212) 344-2828
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To Be Held April 6th, 1998
A Special Meeting of Stockholders of Franklin Consolidated Mining Company, Inc.,
a Delaware corporation (the "Company"), will be held at the Sheraton at Newark,
128 Frontage Road, Newark, New Jersey 07114, on Monday, April 6th, 1998 at 6:00
p.m., for the following purposes:
(1) To amend the Company's Certificate of Incorporation to reverse split the
outstanding shares of the Company's Common Stock on a one for fifteen basis so
that the 98,879,328 shares of the Company's Common Stock outstanding prior to
the reverse split will become 6,591,956 shares of the Company's Common Stock
following the reverse split; all fractional shares being rounded up to the next
nearest whole share; and
(2) To transact such other business as may properly come before the meeting or
any adjournments thereof.
Only holders of the Company's common stock, par value $0.01 per share (the
Common Stock) of record on February 12, 1998 are entitled to notice of, and to
vote at, the meeting or any adjournment thereof. At February 12, 1998, the
record date for determination of stockholders entitled to vote at the meeting or
any adjournments thereof, 98,879,328 shares of Common Stock were issued and
outstanding.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, YOU ARE URGED TO FILL
OUT, SIGN AND MAIL PROMPTLY THE ENCLOSED PROXY TO THE COMPANY AT 76 BEAVER
STREET, SUITE 500, NEW YORK, NEW YORK 10005-3402. PROXIES FORWARDED BY OR FOR
BROKERS OR FIDUCIARIES SHOULD BE RETURNED AS REQUESTED BY THEM. THE PROMPT
RETURN OF PROXIES WILL SAVE THE EXPENSE INVOLVED IN FURTHER COMMUNICATION.
By Order of the Board of Directors,
New York, New York
March 6, 1998
-----------------------------------
J. Terry Anderson
Chairman of the Board, President
and Treasurer
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FRANKLIN CONSOLIDATED MINING COMPANY, INC.
76 Beaver Street
Suite 500
New York, NY 10005-3402
Telephone (212) 344-2828
PROXY STATEMENT
FOR
SPECIAL MEETING OF STOCKHOLDERS
To Be Held April 6th, 1998
This Proxy Statement is furnished to holders of the Company's common stock,
par value $0.01 per share (the Common Stock), in connection with the
solicitation of proxies by the Board of Directors of Franklin Consolidated
Mining Company, Inc., a Delaware corporation (the Company), for use at the
Special Meeting of Stockholders of the Company to be held at the Sheraton at
Newark, 128 Frontage Road, Newark, New Jersey 07114, on Monday, April 6th, 1998
at 6:00 p.m., and at any and all postponements or adjournments thereof (the
Special Meeting) for the purposes of:
(1) Amending the Company's Certificate of Incorporation to reverse split the
outstanding shares of the Company's Common Stock on a one for fifteen basis so
that the 98,879,328 shares of the Company's Common Stock outstanding prior to
the reverse split will become 6,591,956 shares of the Company's Common Stock
following the reverse split; all fractional shares being rounded up to the next
nearest whole share; and-
(2) Transacting such other business as may properly come before the meeting or
any adjournments thereof.
The approximate date on which this Proxy Statement and accompanying proxy
are first being sent or given to stockholders is March 6, 1998.
Shares of Common Stock represented by each proxy, if properly executed and
returned to the Company prior to the Special Meeting, will be voted as directed,
but if not otherwise specified, will be voted for the amendment to the Company's
Certificate of Incorporation to reverse split the outstanding shares of the
Company's Common Stock on a one-for fifteen basis.
If the Special Meeting is postponed or adjourned for any reason, at any
subsequent reconvening of the Special Meeting all proxies will be voted in the
same manner as such proxies would have been voted at the original convening of
the Special Meeting (except for proxies which have theretofore effectively been
revoked or withdrawn), notwithstanding that they may have been effectively voted
on the same or any other matter at a previous meeting.
The Board of Directors knows of no other business to be presented at the
Special Meeting. If any other business is properly presented, the person named
in the enclosed proxy has authority to vote on such matters in accordance with
such person discretion. A stockholder executing the proxy may revoke it at any
time before it is voted by giving written notice to the Secretary of the
Company.
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The solicitation of proxies in the enclosed form is made on behalf of the
Company's Board of Directors. The entire cost of soliciting these proxies,
including the costs of preparing, printing and mailing this Proxy Statement and
accompanying materials to stockholders, will be borne by the Company. In
addition to use of the mails, proxies may be solicited personally or by
telephone or otherwise by officers, directors and employees of the Company, who
will receive no additional compensation for such activities. Arrangements will
also be made with brokerage houses and other custodians, nominees and
fiduciaries to forward solicitation materials to the beneficial owners of shares
held of record by such brokerage houses, custodians, nominees and fiduciaries.
Such parties will be reimbursed for their reasonable expenses incurred in
forwarding the proxy materials.
VOTE REQUIRED FOR APPROVAL;
SHARES ENTITLED TO VOTE; RECORD DATE
The affirmative vote of the holders of a majority of the outstanding shares
of Common Stock present or represented by proxy and entitled to vote at the
Special Meeting at which a quorum is present is required to approve the
amendment to the Company's Certificate of Incorporation. All other matters
properly brought before the Special Meeting will be decided by a majority of the
votes cast on the matter, unless otherwise required by law. As of February 12,
1998, the Company directors and executive officers, and their affiliates, had a
beneficial interest in an aggregate of 4,382,160 shares of Common Stock,
representing approximately 4.4% of the Common Stock outstanding on February 12,
1998 (the "Record Date") and entitled to vote on all proposals to be presented
at the Special Meeting. The presence at the Special Meeting, whether in person
or by proxy, of the holders of at least a majority of the outstanding shares of
Common Stock entitled to vote thereat constitutes a quorum for the transaction
of business.
On the Record Date, there were 98,879,328 outstanding shares of Common
Stock. Only holders of record of Common Stock at the close of business on the
Record Date will be entitled to notice of, and to vote at, the Special Meeting.
Each share of Common Stock is entitled to one vote upon the amendment to the
Certificate of Incorporation and all other matters to be brought to a vote by
the Stockholders at the forthcoming Special Meeting.
Abstentions and broker non-votes will be counted as present for purposes of
determining the existence of a quorum.
PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION
The Board of Directors of the Company has recommended to the Company's
stockholders that the Company's Certificate of Incorporation be amended (the
"Charter Amendment") to increase the market price per share. The Company's
Common Stock is listed on the NASDAQ Small Cap Market. A minimum bid price of
$1.00 per share is required to assure continued listing of the Company's Common
Stock on the NASDAQ Small Cap Market. The Charter Amendment will effect a
reverse split of the outstanding shares of the Company's Common Stock on a on a
one-for-fifteen basis so that the 98,879,328 shares of the Company's Common
Stock outstanding prior to the reverse split will become 6,591,956 shares of the
Company's Common Stock
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following the reverse split All fractional shares resulting from the split will
be rounded up to the next whole share. The Charter Amendment will become
effective upon the filing of the Charter Amendment with the Secretary of State
of the State of Delaware. See the form of Certificate of Amendment appended
hereto as APPENDIX "B".
REASONS FOR CHARTER AMENDMENT; PROPOSED TRANSACTIONS
The Board of Directors of the Company believes, but cannot assure, that
approval of the Charter Amendment will increase the market price per share. The
Company's Common Stock is listed on the NASDAQ Small Cap Market. A minimum bid
price of $1.00 per share is required to assure continued listing of the
Company's Common Stock on the NASDAQ Small Cap Market. During the quarter ended
September 30, 1998, the bid price for the Common Stock remained below $1.00.
During this period, the bid price has been as low as $.0625 per share.
Management believes but cannot assure that, by reverse splitting the outstanding
shares of Common Stock on a one for fifteen basis, the bid price for the Common
Stock will exceed $1.00 per share.
Current stockholders of the Company have no dissenters' rights or
preemptive rights in connection with the reverse split of the outstanding Common
Stock.
CERTAIN EFFECTS OF THE CHARTER AMENDMENT
AND THE PROPOSED REVERSE SPLIT
Stockholders will not realize any dilution in their percentage of ownership
of the Company or their voting rights as a result of the Charter Amendment and
reverse split. The reverse split may, however, affect the market value of the
Common Stock. No assurance can be given that the market value of the Common
Stock will increase in inverse proportion to the ratio of the reverse split.
Prior to the reverse split, there were 98,879,328 Shares of the Company's
Common Stock issued and outstanding. As a result of the reverse split, there
will be 6,591,956 shares of Common Stock issued and outstanding. The Board of
Directors has total discretion in the issuance of any shares of Common Stock
which may be issued in the future. The Board of Directors could issue shares of
Common Stock to discourage attempts by others to obtain control of the Company
through merger, tender offer, proxy contest or otherwise by making such attempts
more difficult to achieve or more costly. All Issuances of additional shares
will dilute current stockholders percentage of ownership of the Company and
voting rights.
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information with respect to the beneficial
ownership of Common Stock as of the date of this Proxy Statement by: (i) each of
the Company's directors and executive officers; (ii) each person who is known by
the Company to be the beneficial owner of
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five percent or more of the outstanding shares of Common Stock; and (iii) all of
the Company's directors and executive officers as a group:
Name and Address Amount of Record
of Beneficial and Beneficial Percent of
Owner Ownership(1) Class
J. Terry Anderson 4,189,660(2) 4.2%
c/o Anderson Chemical
30 West Second Street
Litchfield, Minn. 55355
Robert L. Waligunda 192,500(3) *
18 Bennington Drive
Lawrenceville, N.J. 08648
George Otten -0- 0.0%
7546 E. Elate Street
Littleton, Co. 80120
Steven R. Schurman -0- 0.0%
7985 Vance Drive, Suite 307
Arvada, Co. 80003
Richard Brannon -0- 0.0%
503 Drake Ct.
Foster City, CA. 94404
All Officers and
Directors as a Group
(5 Persons) 4,382,160 4.4%
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* Less than one percent
(1) Prior to anticipated reverse split.
(2) Includes 1,688,140 shares owned by Mr. Anderson, 10,000 shares owned by
Bruce E. Anderson Trust under which Mr. Anderson acts as Trustee and
2,491,520 shares owned by Anderson Chemical Company for which Mr. Anderson
serves as a director and president and owns approximately 21% of the
outstanding shares. Mr. Anderson disclaims any beneficial ownership with
respect to shares of the Company owned by his brothers.
(3) Includes 30,000 shares pledged as collateral to a non-affiliate individual.
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OTHER BUSINESS
Management knows of no other matter that will come before the meeting.
However, if other matters do come before the meeting, the proxy will vote in
accordance with his best judgment.
By Order of the Board of Directors,
---------------------------
J. Terry Anderson
Chairman of the Board, President and
Treasurer
March 6, 1998
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APPENDIX A
PROXY
FRANKLIN CONSOLIDATED MINING COMPANY, INC.
76 Beaver Street
Suite 500
New York, NY 10005-3402
This Proxy is Solicited on Behalf of the Board of Directors.
The undersigned hereby appoints J. Terry Anderson as Proxy, with the power to
appoint his substitute, and hereby authorizes him to represent and to vote, as
designated below, all the shares of Common Stock of Franklin Consolidated Mining
Company, Inc. held of record by the undersigned on February 12, 1998 at the
special meeting of stockholders to be held at the Sheraton at Newark, 128
Frontage Road, Newark, New Jersey 07114, on Monday, April 6, 1998 at 6:00 p.m.,
and at any and all postponements or adjournments thereof
This proxy when properly executed will be voted in the manner directed herein by
the undersigned stockholder. If no direction is made, this proxy will be voted
FOR the Proposal No. 1.
The Board of Directors recommends that the stockholders vote FOR the Proposal
No. 1. Please review carefully the Proxy Statement delivered with this Proxy.
(1) Proposal to approve the Amendment of the Company's Certificate of
Incorporation to reverse split the Company's outstanding shares of Common Stock
on a one-for- fifteen basis.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
The Proxy is authorized to vote, in his discretion, upon such other business as
may properly come before the meeting.
________________________________________
Signature
Dated: _______________, 1998 ________________________________________
Signature, if held jointly
Please sign exactly as name appears on your stock certificate. When shares are
held by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by the President or other
authorized officer. If a partnership, please sign in partnership name by an
authorized person. Please mail the executed and completed proxy to the Company
at 76 Beaver Street, Suite 500, New York, New York 10005-3402
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APPENDIX "B"
CERTIFICCATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
FRANKLIN CONSOLIDATED MINING COMPANY, INC.
Under Section 242 of the Corporation Law of the State of Delaware
J. Terry Anderson and Robert Waligunda, respectively, the President and the
Secretary of FRANKLIN CONSOLIDATED MINING COMPANY, INC. (the "Company"), a
corporation organized and existing under and by virtue of the General
Corporation Law of the State of Delaware, DO HEREBY CERTIFY:
FIRST: That the Board of Directors of said corporation, by written consent filed
with the minutes of the Board, adopted the following resolution proposing and
declaring advisable the following amendment to the Certificate of Incorporation
of said corporation:
1. The Certificate of Incorporation is hereby amended to effect a reverse split
of the Company's outstanding Common Stock in the ratio of one share for every
fifteen shares outstanding. The Company currently has authorized 100,000,000
shares of Common Stock with a par value of $.01 per share, of which 98,879,328
shares of Common Stock are issued and outstanding, and 1,120,672 shares are
unissued. Under the new structure, the Company will have 100,000,000 shares of
Common Stock, par value $.01, authorized, of which approximately 6,591,956
shares will be issued and outstanding and 93,408,044 shares will be unissued.
All fractional shares resulting from the reverse split will be rounded up to the
next whole share. The number of authorized shares shall not change. The reverse
split shall take effect- (i) at 12:01 a.m. Eastern Standard Time on ________ __,
1998: or (ii) the filing of the Charter Amendment with the Secretary of State of
the State of Delaware, which ever occurs later.
SECOND: That the aforesaid amendment was duly adopted in accordance with the
applicable provisions of section 242 of the General Corporation Law of the State
of Delaware by the affirmative vote by the holders of the majority of the stock
of the Company entitled to vote at a special meeting of stockholders held on
April 6th, 1998.
IN WITNESS WHEREOF, we, the undersigned, have executed and subscribed this
certificate this ___ day of ________, 1998.
- ------------------------------ -------------------------------
J. Terry Anderson, President Robert Waligunda, Secretary
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