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:
| | Preliminary Proxy Statement
| | Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2)
|X| Definitive Proxy Statement
| | Definitive Additional Materials
| | Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
FRANKLIN CONSOLIDATED MINING CO., INC.
(Name of Registrant as Specified in Its Charter)
FRANKLIN CONSOLIDATED MINING CO., 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:
_______________________________________________________
2) Aggregate number of securities to which transaction applies:
_______________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
_______________________________________________________
4) Proposed maximum aggregate value of transaction:
_______________________________________________________
5) Total Fee Paid:
_______________________________________________________
| | Fee paid previously with preliminary materials.
| | Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid: ________________________________
2) Form Schedule or Registration Statement No. ____________
3) Filing Party: __________________________________________
4) Date Filed: ____________________________________________
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FRANKLIN CONSOLIDATED MINING CO., INC.
76 Beaver Street
Suite 500
New York, NY 10005-3402
Telephone (212) 344-2828
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To Be Held - October 12, 1998
A Annual Meeting of Stockholders of Franklin Consolidated Mining Co., Inc., a
Delaware corporation (the "Company"), will be held at the Holiday Inn, 304 Rte.
22 West, Springfield, N.J. 07081, on Monday, October 12, 1998 at 5:30 p.m., for
the following purposes:
(1) The election of four directors for a term expiring at the 1999 Annual
Meeting of Shareholders or until their respective successors have been duly
elected and qualified (the "Election of Directors");
(2) The approval of an amendment to the Certificate of Incorporation of the
Company to change the name of the Company from "Franklin Consolidated Mining
Co., Inc." to "WCM Capital, Inc." (The "Certificate of Incorporation
Amendment");
(3) To approve the appointment of Lazar Levine & Felix LLP as independent
auditors for the Company for the fiscal year ended December 31, 1998; and
(4) The transaction of such other business as may properly come before the
meeting or any adjournment thereof.
Only holders of the Company's Common Stock, of record on August 13, 1998 are
entitled to notice of, and to vote at, the meeting or any adjournment thereof.
At August 13, 1998, the record date for determination of stockholders entitled
to vote at the meeting or any adjournments thereof, 3,955,173 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,
/s/ Robert Waligunda
-----------------------------------
New York, New York
September 10, 1998 Robert Waligunda, Secretary
<PAGE>
FRANKLIN CONSOLIDATED MINING CO., INC.
-----------------------
ANNUAL MEETING OF SHAREHOLDERS
Tuesday, October 12, 1998
------------------------
PROXY STATEMENT
------------------------
GENERAL INFORMATION
This Proxy Statement (the "Proxy Statement") is furnished in connection with the
solicitation of proxies by the Board of Directors of Franklin Consolidated
Mining Co., Inc., a Delaware corporation (the "Company"), for use at the Annual
Meeting of Shareholders of the Company to be held on Tuesday, October 12, 1998
or any and all adjournments thereof, with respect to the following matters:
(1) The election of four directors for a term expiring at the 1999 Annual
Meeting of Shareholders or until their respective successors have been duly
elected and qualified (the "Election of Directors");
(2) The approval of an amendment to the Certificate of Incorporation of the
Company to change the name of the Company from "Franklin Consolidated Mining
Co., Inc." to "WCM Capital, Inc." (The "Certificate of Incorporation
Amendment");
(3) To approve the appointment of Lazar Levine & Felix LLP as independent
auditors for the Company for fiscal year ended December 31, 1998; and
(4) The transaction of such other business as may properly come before the
meeting or any adjournment thereof.
The Annual Meeting (the "Meeting") will be held on October 12, 1998 at 5:30 p.m.
at the Holiday Inn, 304 Rte. 22 West, Springfield, N.J. 07081. The Notice of
Annual Meeting, Proxy Statement, Proxy Card and the Annual Report will be mailed
on or about September 11, 1998 to shareholders of record of the Company as of
August 13, 1998.
If the enclosed proxy card is properly executed and returned in time to be voted
at the meeting, the shares of Common Stock represented will be voted in
accordance with the instructions contained therein. Executed proxies that
contain no instructions will be voted in favor of all of the proposals set forth
above.
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VOTING RIGHTS AND OUTSTANDING SHARES
Only shareholders of record at the close of business on August 13, 1998 are
entitled to notice of and to vote at the Annual Meeting. As of the close of
business on August 13, 1998, 3,955,173 shares of common stock, par value $.01
per share (the "Common Stock") of the Company were issued and outstanding. Each
share of Common Stock entitles the record holder thereof to one (1) vote on all
matters properly brought before the Annual Meeting. Pursuant to Delaware law,
abstentions are not counted as votes against the election of directors, but
proxies on which abstentions are marked are counted for purposes of determining
the presence of a quorum. Broker non-voters are not counted as shares entitled
to vote at the meeting.
The presence in person or by proxy of a majority of the shares held by
shareholders entitled to vote at the Annual Meeting is necessary in order to
constitute a quorum for the meeting. If a quorum is present, the matters set
forth herein and in the accompanying notice will require an affirmative vote by
a majority of the votes to which shareholders voting at the meeting are entitled
with respect to each such matter.
REVOCABILITY OF PROXIES
Shareholders who execute proxies for the Annual Meeting may revoke their proxies
at any time prior to their exercise, by delivering written notice of revocation
to the Company at the address on the Notice of Annual Meeting, by delivering a
duly executed proxy bearing a later date, or by attending the Annual Meeting and
voting in person.
BOARD OF DIRECTORS PROXY SOLICITATION
The costs of soliciting the proxies and of the meeting, including the costs of
preparing and mailing this Proxy Statement and other material, will be borne by
the Company. As of the Record Date, it is anticipated that the total cost to the
Company will be approximately $35,000 (including legal and other professional
fees). In addition to solicitation by mail, certain directors, officers and
regular employees of the Company may, without additional compensation, solicit
proxies by telephone, personal interview or facsimile transmission to encourage
shareholder participation in the voting process. The Board of Directors has
appointed directors J. Terry Anderson and Robert L. Waligunda as the proxy
holders for the Annual Meeting of Shareholders. The Company will also request
banks, brokers, and others who hold shares in the Company in nominee names to
distribute proxy soliciting material to beneficial owners, and will reimburse
such banks and brokers for reasonable out-of-pocket expenses which they may
incur in so doing.
The Company's executive offices are currently located at 76 Beaver Street, Suite
500, New York, New York 10005.
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ELECTION OF DIRECTORS
Item 1 on Proxy Card
The Board of Directors has fixed the number of directors constituting the whole
Board as four and has selected the following nominees for election to a term
expiring at the 1999 Annual Meeting or until their successors have been elected
and qualified:
William C. Martucci
Robert Waligunda
Ronald Ginsberg
Robert W. Singer
Unless authority to vote for directors is withheld in the proxy, the persons
named in the accompanying proxy intend to vote for the election of the five
nominees listed above.
All nominees have indicated a willingness to serve as directors, but if any of
them should decline or be unable to act as a director, the persons named in the
proxy will vote for the election of another person or persons as the Board of
Directors recommends. Of all of the nominees for director, only Mr. Waligunda
was previously elected by the shareholders at the last Annual Meeting of
Shareholders held in November, 1995. There are no family relationships between
the nominees for the Board of Directors.
The following biographical information is furnished with respect to each of the
five nominees for election at the Annual Meeting. The information includes age
as of the date of the meeting, present position, if any, with the Company,
period served as director, and other business experience during the past five
years. The offices referred to in the second column refer to the offices with
the Company unless stated otherwise.
WILLIAM C. MARTUCCI, 56 From 1974 to the present, Mr. Martucci has
served as president and chairman of United
Grocers Clearing House, Inc., a privately
held company he founded to serve the
coupon redemption, fulfillment and
promotional needs of manufacturers and
retailers. Mr. Martucci is the sole
stockholder, director and president of POS
Financial, Inc., an ATM/Kiosk network. In
1997 Mr. Martucci founded and is the sole
director, officer and shareholder of
Shoppers Online, Inc. which transmits
full-motion video merchandising programs
to retail outlets. Additionally, Mr.
Martucci is the sole shareholder, director
and president of U.S. Mining, Inc. ("USM")
Mr. Martucci received a Bachelor of
Science in Philosophy from Florida
International University in 1973.
Robert L. Waligunda, 52. Mr. Waligunda has served as a Director of
Director, Secretary, Treasurer the Company since 1985 and as Secretary
and Treasurer of the Company since August
1995. From 1965 to the present, Mr.
Waligunda has served as founder, President
and principal stockholder of Sky
Promotions,
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Inc., a Pittstown, New Jersey marketing
and management company involved in sales,
advertising and marketing of hot air
balloons and inflatable products. He is
the founder and director of International
Professional Balloon Pilots Racing
Association, a member of the advisory
board of Aerostar International, Inc., the
world's oldest and largest balloon
manufacturing company, and a member of the
National Aeronautic Association, the
Experimental Aircraft Association, and the
Airplane Owner and Pilots Association. Mr.
Waligunda received a Masters of Science
degree in guidance and psychological
services from Springfield College in 1968.
RONALD GINSBERG, 63 Mr. Ginsberg; is President of the Foodtown
Supermarket Cooperative, headquartered in
Edison, New Jersey. He is also Secretary
and Director of Twin County Grocers
located in Edison, New Jersey and Director
of the New Jersey Food Council. Mr.
Ginsberg attended Drexel Institute of
Technology and Temple University.
ROBERT W. SINGER, 50. Mr. Singer currently holds the position of
Assistant Majority Leader in the New
Jersey Senate. Prior to being elected as a
state Senator, he served three terms in
the New Jersey Assembly. In this latter
capacity, Mr. Singer was named Majority
Whip, by his Colleagues and served as both
Vice Chairman of the Commerce and
Regulated Professions Committee and
Community Development, Agriculture and
Tourism Committee. Senator Singer has
distinguished himself, among his national
peers, for his ability to create
environments where high technology and
economic development can coexist with
environmental priorities. Additionally,
the Senator is Vice-President of Corporate
Relations for Community/Kimball Medical
Centers, and affiliate of the St. Barnabas
Health Care System.
The Board of Directors met 3 times during 1997. All of the directors attended
100% of the meetings of the Board. The Board of Directors has established an
Audit Committee currently comprised of Messrs. Anderson, Otten and Schurman who
are not slated for re-election and whose term will expire when their successors
are duly elected and qualified. The Board of Directors will appoint new members
to the Audit Committee at its annual meeting, immediately following the Annual
Meeting of Shareholders. The Audit Committee's function includes recommending
annually to the Board of Directors a firm of independent auditors to audit and
review the Company's books, records and the scope of such firm's audit,
reviewing reports and recommendations of the Company's independent auditors,
review the scope of all-internal audits
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and reports and recommendations in connection therewith and review non-audit
services provided by the Company's principal independent auditors. The Audit
Committee has not held any meetings since its formation in February, 1998. There
are no other Committees of the Board other than the Audit Committee.
EXECUTIVE OFFICERS
The executive officers of the Company are appointed annually by the Board of
Directors and, to date, have served an indefinite term. The current officers
serve on a part-time basis. No family relationship exists between any of the
executive officers of the Company.
Name Age Position
J. Terry Anderson 51 Chairman, President, Director
Robert L. Waligunda 53 Secretary, Treasurer, Director
Richard Brannon 49 Vice President - West Coast
Operations
BENEFICIAL OWNERSHIP OF COMMON STOCK
Directors and Executive Officers
The following table lists the beneficial ownership of shares of the Company's
Common Stock as of August 13, 1998 for (a) all directors, (b) all nominees for
director (c) all executive officers, (d) each person who is known by the company
to be the beneficial owner of five percent or more of the outstanding shares of
Common Stock, (e) all directors and executive officers as a group.
<TABLE>
<CAPTION>
Name of Amount and Current Percent Percent of Class if
Beneficial Owner Nature of of Class Shareholders Approve
Beneficial Restated Certificate of
Ownership Incorporation
<S> <C> <C> <C>
J. Terry Anderson 167,586 (1) 4.2% #
Robert Waligunda 7,700 (2) 2.2% #
William C. Martucci -0-
George Otten -0- #
Steven Schurman -0- #
Richard Brannon -0- #
Ronald Ginsberg -0- #
Robert W. Singer -0- #
------------ -----
175,286 4.4%
All Officers and
Directors as a Group
(5 persons)
- --------------------
# Less than one percent
</TABLE>
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(1) Includes 67,526 shares owned by Mr. Anderson, 400 shares owned by Bruce E.
Anderson Trust under which Mr. Anderson acts as trustee and 99,661 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 family members other than those specifically
set forth above.
(2) Includes 1200 shares pledged as collateral to a non-affiliate individual.
- ---------------------
To the Company's knowledge and based solely on a review of such materials as are
required by the Securities and Exchange Commission, no officer, director or
beneficial holder of more than ten percent of the Company's issued and
outstanding shares of Common Stock ("Beneficial Owner") has filed any forms and
reports required to be filed pursuant to Section 16(a) of the Securities and
Exchange Act of 1934, as amended (the "Exchange Act"), during the fiscal year
ended December 31, 1997; and no officer, director or Beneficial Holder has
submitted any representation letter to the Company stating that they are not
subject to the filing requirements under Section 16 of the Exchange Act for
fiscal year 1997.
CERTAIN PRINCIPAL OWNERS
As of the Record Date, no persons are known to the Company to be the beneficial
owners of more than (5%) of the Company's Common Stock, the only voting stock of
the Company as of the Record Date. The Company has 3,955,173 shares of Common
Stock issued and outstanding as of the Record Date.
EXECUTIVE COMPENSATION
The Company's three executive officers, Messrs. Anderson, Waligunda and Brannon,
received no significant compensation in fiscal year 1997. The Company granted no
options to any of the Company's Executive Officers in 1997. None of the
Company's executive officers owns any options of the Company and there were no
exercise of any option in 1997 by any such persons.
The Company has not adopted any stock option plans, medical insurance plans or
retirement, pension, profit sharing or insurance plans for the benefit of its
directors, officers or employees.
No officer or director of the Company receives any cash compensation for
services rendered as a director and/or officer.
None of the Company officers have entered into written employment agreements
with the Company.
CERTAIN TRANSACTIONS WITH EXECUTIVE OFFICERS AND DIRECTORS
During fiscal year 1998, Mr. Anderson lent the Company approximately $23,000 and
Anderson Chemical Company, a company for which Mr. Anderson serves as director
and president, lent the Company approximately $85,000 for working capital and
other expenses. Additionally, in July, 1997, Anderson Chemical Company loaned
the Company $20,000 evidenced by a Promissory Note bearing interest at a rate of
12% per annum. As of the Record Date, these loans remain outstanding.
On December 25, 1976, the Company leased 28 patented mining claims from Audrey
and David Hayden ("Hayden") and Dorothy Kennec pursuant to a mining lease and
option to purchase dated November 12, 1976 (the "Hayden/Kennec Lease"). On
November 13, 1997, US Mining,
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Inc., a New Jersey corporation wholly owned and controlled by Mr. Martucci
("USM"), entered into an agreement with Hayden to purchase her interest in the
Hayden/Kennec Lease (the "Hayden Contract"). It is anticipated that the closing
will occur on delivery by Hayden of clear title to the property. Upon the
closing of the transactions contemplated by the Hayden Contract, USM will own
50% of the mineral rights evidenced by the Hayden/Kennec Leases.
On March 5, 1998, the Company executed a promissory note (the "Note") in the
aggregate principal amount of Nine Hundred Fifty Five Thousand Seven Hundred
Fifty Six Dollars and Twenty Two Cents ($955,756.22) in favor of USM. The
aggregate principal amount of the Note represented certain monies advanced by
POS Financial, Inc., a New Jersey corporation owned and controlled by Mr.
Martucci ("POS") to fund operations and development of the Company's mining
properties. The Note was thereafter assigned to USM on March 9, 1998. The Note
bears interest at a rate of 8% per annum. The Note was originally due and
payable on May 4, 1998; however, USM extended this date to July 4, 1998 (the
"Maturity Date"). The Note was secured by a security interest in substantially
all of the assets of the Company (the "Secured Assets"). As of September 1,
1998, the Company owes USM approximately $1,154,561.48, which includes principal
and accrued and unpaid interest on the Note.
As of the Maturity Date, the Company has been unable to pay the obligations
evidenced by the Note. The Company is currently exploring its options with
respect to fulfilling its obligations under the Note, including the possibility
of satisfying this obligation by issuing common stock of the Company to the
holder in lieu of a cash payment.
CERTIFICATE OF INCORPORATION AMENDMENT
Item 2 on Proxy Card
The Board of Directors of the Company has proposed that the Company's Amended
and Restated Certificate of Incorporation (the "Restated Certificate of
Incorporation") be further amended to change the name of the Company from
"Franklin Consolidated Mining Co., Inc." to "WCM Capital, Inc." The proposed
amendment is as follows:
"FIRST: The name of the corporation shall be "WCM Capital, Inc."
The Amendment to the Company's Restated Certificate of Incorporation changing
the name of the Company, if passed, would become effective upon the filing with
the Secretary of State of Delaware a Certificate of Amendment, which filing is
expected to take place shortly after the Shareholders approve the amendment. The
affirmative vote of the holders of a majority of the outstanding shares of
Common Stock entitled to vote on the Amendment at the 1998 Annual Meeting is
required to approve the Certificate of Incorporation Amendment.
The Board of Directors believe that a name change would be beneficial to the
Company because it allows for a diversity of operations which is consistent with
the future plans of the Company.
The Board recommends a vote for IN FAVOR OF the Certificate of Incorporation
Amendment.
Appointment of Auditors
Item 3 on Proxy Card
The Board of Directors has appointed Lazar Levine & Felix LLP, to audit the
financial statements of the Company for the fiscal year ended December 31, 1998.
The Company retained Lazar Levine & Felix LLP ("LLP") as its independent
auditors for fiscal year 1997 after notifying JH
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Cohn, LLP ("Cohn") of its decision to dismiss the firm as its independent
auditors. The decision to dismiss Cohn was approved by the Board of Directors of
the Company. Representatives of LLF will not be present at the meeting.
During fiscal year 1995 and 1996 of the Company, none of the reports issued by
Cohn on the financial statements of the Company contained an adverse opinion or
a disclaimer of opinion or was qualified or modified as to audit scope, or
account principles; however, Cohn has qualified or modified its reports on the
financial statements of the Company as a going concern. During fiscal years 1995
and 1996 and any subsequent interim periods prepared by Cohn prior to their
dismissal, there were no disagreements between the Company and Cohn concerning
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure which would have caused Cohn to make a reference to the
subject matter thereof in its report had such disagreement not been resolved to
the satisfaction of Cohn.
The proposal will be approved if it receives the affirmative vote of a majority
of the shares of common stock of the Company represented at the meeting.
The Board of Directors recommends that you vote IN FAVOR OF the appointment of
LLF, Proxies solicited by the Board of Directors will be so voted unless
stockholders specify otherwise.
Other Business
The Board of Directors is not aware of any other matters to be presented at the
meeting. IF any other matters would properly come before the meeting, the
persons named in the enclosed proxy form will vote the proxies in accordance
with their best judgment.
SUBMISSION OF SHAREHOLDER PROPOSALS
Proposals of Shareholders intended to be submitted at the next annual meeting
must be received by the Company on or before March 1, 1999 to be eligible for
inclusion in the Company's proxy statement, an accompanying notice of proxy for
such meeting.
INCORPORATION BY REFERENCE
Any document incorporated by reference and not delivered to holders herewith may
be obtained by any holder upon his or her request, whether written or oral,
within one business day of the receipt by the Company of such request, by
contacting Robert Waligunda, Secretary of the Company, 78 Beaver Street, Suite
500, New York, New York 10005, Telephone Number 212-344-2828, Facsimile Number
212-344-4537.
ANNUAL REPORT TO STOCKHOLDERS
A copy of the Company's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1997 as filed with the Securities and Exchange Commission may be
obtained by written request to the Company at its principal offices in New York,
New York.
Date: Sept. 10, 1998 By Order of the Board of Directors
/s/ Robert Waligunda
----------------------------------
Robert Waligunda, Secretary
