<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. 3)
<TABLE>
<CAPTION>
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<S> <C> <C> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
/X/ Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
</TABLE>
Notes:
ALASKA GOLD COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
ALASKA GOLD COMPANY
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or Item 22(a)(2) of
Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3).
/ / 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 (Set forth the amount on which the filing fee is calculated
and state how it was determined):
----------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------------------------------
/X/ 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:
----------------------------------------------------------------------------------
</TABLE>
Notes:
<PAGE>
ALASKA GOLD COMPANY
2959 N. ROCK ROAD
WICHITA, KANSAS 67226
February 12, 1996
Dear Shareholder:
You are cordially invited to attend a Special Meeting of Shareholders of
Alaska Gold Company (the "Company") to be held on March 14, 1996 at 9:00 a.m.,
local time, at 2959 N. Rock Road, 5th Floor Conference Room, Wichita, Kansas
67226. The purpose of the Special Meeting is to approve and adopt the Agreement
and Plan of Merger, dated as of September 1, 1995 (the "Merger Agreement"),
adopted by the Board of Directors of Mueller Industries, Inc. ("Mueller" or the
"Major Shareholder"), providing for the acquisition by the Company of all of its
outstanding shares of Common Stock (the "Company Stock"), other than the shares
owned by the Major Shareholder, for a consideration of $0.25 in cash for each
outstanding share. The Major Shareholder owns approximately 85% of the Company's
outstanding Common Stock. Pursuant to the Merger Agreement, this acquisition
would be effected by means of a merger of Mueller Acquisition Corporation
("Newco"), a Delaware corporation wholly owned by the Major Shareholder, into
the Company (the "Merger"), as a result of which the Company will become wholly
owned by the Major Shareholder.
Your Company's Board of Directors has reviewed the terms and conditions of
the Merger Agreement as well as other factors, including that:
- Since its incorporation in 1975, the Company has lost money in each year,
with the exception of 1975 and 1985. Total profits in those two years
aggregated $3.1 million. In the other 18 years, the Company's total losses
aggregated over $100 million. In the time period 1976 to 1984, the Company
lost $51.5 million. In the time period 1986 to 1994, the Company lost
another $50.9 million.
- As of September 30, 1995, the Company owed creditors more than $100
million. The vast majority of this debt is currently due and payable.
Included in this debt is $95 million of term loans and advances from
Mueller, plus an additional $4.9 million in notes payable to Mueller.
- In 1990, prior to its delisting by the Pacific Stock Exchange, the Company
Stock traded between $0.625 and $0.0625 per share. Since 1990, the Company
has lost more than $20 million.
- The Company's stockholders' deficit was $96.4 million at September 30,
1995.
You are urged to read carefully the accompanying Proxy Statement in its
entirety, including the section entitled "Special Factors," for important
information regarding the Merger. After consideration of each of these factors,
your Company's Board of Directors has unanimously determined that the terms of
the Merger are fair to and in the best interests of shareholders of the Company
other than the Major Shareholder and has unanimously approved the Merger
Agreement. The affirmative vote of holders of a majority of the outstanding
Company Stock entitled to vote at the Special Meeting is required to approve and
adopt the Merger Agreement. Because the Major Shareholder intends to vote all of
its shares in favor of the Merger Agreement, approval and adoption of the Merger
Agreement is assured.
Promptly after the Merger is consummated, a Letter of Transmittal with
instructions will be mailed to all shareholders of record to use in surrendering
their certificates representing Company Stock. PLEASE DO NOT SEND YOUR
CERTIFICATES UNTIL YOU RECEIVE THE LETTER OF TRANSMITTAL.
A form of proxy solicited by the Company's Board of Directors is enclosed
for your convenience. Please mark, sign, date and return it promptly. If you
attend the Special Meeting, you may vote your shares personally whether or not
you have previously submitted a proxy; however, please complete, sign, date and
promptly return the enclosed proxy. All properly executed proxies received prior
to or at the Special Meeting, unless revoked, will be voted at the Special
Meeting in accordance with the instructions on the proxies. Your prompt return
of the enclosed proxy will be greatly appreciated.
Sincerely yours,
[LOGO]
James E. Browne
SECRETARY
<PAGE>
ALASKA GOLD COMPANY
2959 N. ROCK ROAD
WICHITA, KANSAS 67226
------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON MARCH 14, 1996
------------------------
A Special Meeting of shareholders of Alaska Gold Company (the "Company")
will be held at 2959 N. Rock Road, 5th Floor Conference Room, Wichita, Kansas
67226 on March 14, 1996, at 9:00 a.m., local time, for the following purposes:
1. To consider and vote upon a proposal to approve and adopt the
Agreement and Plan of Merger (the "Merger Agreement"), dated as of September
1, 1995, adopted by the Board of Directors of Mueller Industries, Inc.
("Mueller" or the "Major Shareholder"), pursuant to which, among other
things, (a) Mueller Acquisition Corporation ("Newco"), a Delaware
corporation wholly owned by the Major Shareholder, will be merged with and
into the Company with the Company being the surviving corporation (the
"Merger"), and (b) all shares of the Company's Common Stock (the "Company
Stock") other than the shares of Company Stock owned by the Major
Shareholder, will be converted into the right to receive $0.25 cash per
share, and thereafter the Company will be wholly owned by Mueller.
2. To transact such other business as may properly come before the
Special Meeting and any adjournment thereof.
The Merger Agreement is attached as ANNEX A to the accompanying Proxy
Statement. Shareholders who do not wish to accept the $0.25 cash per share
payment and who comply with the requirements of Section 262 of the Delaware
General Corporation Law have the right to seek an appraisal by the Delaware
Court of Chancery of the fair value of their shares of Company Stock. For a
description of the rights of shareholders pursuant to Section 262 and a
description of the procedures thereunder, see "Appraisal Rights" in the
accompanying Proxy Statement. A copy of the text of Section 262 is attached as
ANNEX B to the accompanying Proxy Statement. The Proxy Statement and the ANNEXES
thereto form a part of this Notice.
The Board of Directors of the Company has fixed the close of business on
February 9, 1996 as the record date for determining the shareholders entitled to
notice of and to vote at the Special Meeting and any adjournment thereof. The
affirmative vote of holders of a majority of the outstanding Company Stock
entitled to vote at the Special Meeting is required to approve and adopt the
Merger Agreement. The Merger does not require the approval of a majority of the
shareholders of the Company other than the Major Shareholder (the "Public
Shareholders"). Because the Major Shareholder owns approximately 85% of the
Company Stock and intends to vote all of such shares in favor of the Merger
Agreement, approval and adoption of the Merger Agreement is assured.
Nevertheless, the Company is holding the Special Meeting because it is required
to do so under Delaware law and proxies are being solicited pursuant to the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
PLEASE SIGN AND RETURN THE ENCLOSED PROXY CARD PROMPTLY TO ENSURE YOUR
REPRESENTATION AT THE SPECIAL MEETING, WHETHER OR NOT YOU PLAN TO ATTEND. YOUR
PROXY MAY BE REVOKED BY YOU AT ANY TIME BEFORE IT IS VOTED AT THE SPECIAL
MEETING.
[LOGO]
James E. Browne
SECRETARY
Wichita, Kansas
February 12, 1996
PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY,
WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE SPECIAL MEETING
PLEASE DO NOT SEND IN ANY CERTIFICATES FOR YOUR SHARES AT THIS TIME.
<PAGE>
February 12, 1996
ALASKA GOLD COMPANY
2959 N. ROCK ROAD
WICHITA, KANSAS 67226
(316) 636-6316
------------------------
PROXY STATEMENT FOR SPECIAL MEETING OF SHAREHOLDERS
------------------------
INTRODUCTION
This Proxy Statement is being furnished to shareholders of Alaska Gold
Company, a Delaware corporation (the "Company"), in connection with the
solicitation of proxies by the Board of Directors of the Company (the "Board")
for use at the Company's Special Meeting of Shareholders to be held on March 14,
1996 and at any adjournment or postponement thereof (the "Special Meeting").
MATTERS TO BE CONSIDERED AT THE MEETING
At the Special Meeting, shareholders will be asked to approve and adopt the
Agreement and Plan of Merger, dated as of September 1, 1995 (the "Merger
Agreement"), by and among the Company, Mueller Industries, Inc. ("Mueller" or
the "Major Shareholder") and Mueller Acquisition Corporation ("Newco"), a
Delaware corporation which is wholly owned by Mueller. The Merger Agreement
provides, by means of a merger (the "Merger") of Newco with and into the
Company, for the acquisition by the Company, for a consideration of $0.25 in
cash per share, without interest (the "Merger Consideration"), of each share of
the Company's Common Stock, par value $.10 per share (the "Company Stock"),
outstanding at the effective time of the Merger (the "Effective Time"), other
than shares of the Company Stock held by the Major Shareholder. The Major
Shareholder, who owns all of Newco's outstanding capital stock, owns
approximately 85% of the Company Stock. In connection with, but only in
connection with, the consummation of the Merger, the Major Shareholder will
cancel, simultaneously with the consummation of the Merger, the shares of
Company Stock owned by it, and has waived its right to receive the Merger
Consideration. As a result of the Merger, the Company will become wholly owned
by the Major Shareholder. A copy of the Merger Agreement is attached to this
Proxy Statement as ANNEX A. The surviving corporation in the Merger will be the
Company. At the Effective Time, each share of Company Stock outstanding
immediately prior to the Effective Time (other than shares of Company Stock held
by the Major Shareholder) will be converted into the right to receive the Merger
Consideration in cash, without interest. See "Special Factors" and "The Merger."
------------------------
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF
SUCH TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED
IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
------------------------
The date of this Proxy Statement, and the approximated date it will be
mailed to shareholders, is February 12, 1996.
VOTING AT THE MEETING
The Board has fixed the close of business on February 9, 1996 as the record
date (the "Record Date") for determining the holders of Company Stock entitled
to notice of, and to vote at, the Special Meeting. As of the Record Date, there
were (i) 5,000,000 shares of Company Stock outstanding and entitled to vote and
approximately 3,722 holders of record of Company Stock. The presence, in person
i
<PAGE>
or by properly executed proxy, of holders of a majority of the outstanding
shares of Company Stock is necessary to constitute a quorum at the Special
Meeting. Each shareholder is entitled to one vote for each share of Company
Stock held by such shareholder.
Under Delaware law, the affirmative vote of holders of a majority of the
outstanding shares of Company Stock entitled to vote at the Special Meeting is
required to approve the Merger. Because the Major Shareholder, which owns
approximately 85% of the Company Stock, intends to vote its shares in favor of
the Merger, approval and adoption of the Merger Agreement is assured.
Nevertheless, the Company is holding the Special Meeting because it is required
to do so under Delaware law, and proxies are being solicited pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules
and regulations promulgated thereunder.
APPRAISAL RIGHTS
Under Section 262 of the Delaware General Corporation Law ("DGCL"), holders
of record of shares of Company Stock who do not wish to accept the Merger
Consideration and who have neither voted in favor of the Merger nor consented
thereto in writing have the right to seek an appraisal of the fair value of
their shares in the Delaware Court of Chancery (the "Delaware Court"). A vote in
favor of the Merger or a consent thereto in writing constitutes a waiver of such
appraisal rights. In addition, shareholders who vote in favor of the Merger may
later be estopped from challenging it in a subsequent lawsuit. See "SPECIAL
FACTORS -- Appraisal Rights" and ANNEX B.
PROXIES
All shares of Company Stock represented at the Special Meeting by properly
executed proxies received prior to or at the Special Meeting, unless such
proxies previously have been revoked, will be voted at the Special Meeting in
accordance with the instructions on the proxies. IF NO SUCH INSTRUCTIONS ARE
INDICATED, PROXIES WILL BE VOTED FOR THE APPROVAL OF THE MERGER AGREEMENT. As
noted under "Appraisal Rights," a vote FOR the approval of the Merger will
constitute a waiver of the appraisal rights associated with the Company Stock.
The Board does not know of any other matters which are to come before the
Special Meeting. If any other matters are properly presented at the Special
Meeting for action, the persons named in the enclosed form of proxy and acting
thereunder will have the discretion to vote on such matters in accordance with
their best judgment.
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before it is voted. Proxies may be revoked by filing with
the Secretary of the Company written notice of revocation bearing a later date
than the proxy, by duly executing and delivering to the Secretary of the
Company, at or prior to the Special Meeting, a subsequent proxy relating to the
same shares of Company Stock, or by attending the Special Meeting and voting in
person (although attendance at the Special Meeting will not, by itself,
constitute a revocation of proxy). Any written notice revoking a proxy should be
sent to Alaska Gold Company, 2959 N. Rock Road, Wichita, Kansas 67226.
Proxies are being solicited by and on behalf of the Board. The Company will
bear the cost of preparing and mailing the proxy material furnished to the
Company's shareholders in connection with the Special Meeting. Proxies will be
solicited by mail. Directors, officers and employees of the Company may also
solicit proxies by telephone, telegram or personal contact. Such persons will
receive no additional compensation for such services but may be reimbursed for
out-of-pocket expenses in connection with such solicitation. Copies of
solicitation materials will be furnished to fiduciaries, custodians and
brokerage houses for forwarding to beneficial owners of Company Stock held in
the names of such fiduciaries, custodians and brokerage houses.
All information contained in this Proxy Statement concerning Newco, the
Major Shareholder and the plans for Newco and the Company after the Merger has
been supplied by Newco. All other information contained in this Proxy Statement
has been supplied by the Company.
ii
<PAGE>
POSITION OF THE COMPANY'S BOARD; CONFLICTS OF INTEREST
The Board has determined that the acquisition of the Company Stock pursuant
to the Merger Agreement is in the best interests of the Company and the Public
Shareholders and has approved the Merger Agreement.
SHAREHOLDERS SHOULD BE AWARE THAT IN CONSIDERING THE MERGER, THE TERMS OF
THE MERGER WERE ESTABLISHED BY THE BOARD OF DIRECTORS OF NEWCO, AND AGREED TO BY
THE COMPANY, THAT THE BOARD OF THE COMPANY IS COMPRISED IN ITS ENTIRETY OF
DIRECTORS THAT ARE AFFILIATED WITH MUELLER, AND THAT THE TERMS OF THE MERGER
WERE NOT THE SUBJECT OF ARM'S-LENGTH NEGOTIATIONS AMONG ANY OF SUCH ENTITIES.
NEITHER MUELLER, THE COMPANY NOR ANY OF THEIR DIRECTORS RETAINED AN UNAFFILIATED
REPRESENTATIVE TO ACT SOLELY ON BEHALF OF THE PUBLIC SHAREHOLDERS FOR THE
PURPOSE OF NEGOTIATING THE TERMS OF THE MERGER OR PREPARING A REPORT CONCERNING
THE FAIRNESS OF THE MERGER. NEVERTHELESS, BASED UPON CAREFUL CONSIDERATION OF
ALL THE FACTORS DESCRIBED BELOW UNDER "SPECIAL FACTORS," THE BOARD BELIEVES THAT
THE TERMS OF THE MERGER ARE FAIR TO THE PUBLIC SHAREHOLDERS. SEE "SPECIAL
FACTORS" AND "INTEREST OF PERSONS IN THE MERGER, CONFLICTS OF INTEREST" BELOW.
No person is authorized to give any information or make any representation
not contained in this Proxy Statement, and, if given or made, such information
or representation should not be relied upon as having been authorized. The
delivery of this Proxy Statement shall not, under any circumstances, create any
implication that there has been no change in the information set forth herein or
in the affairs of the Company or Newco since the date hereof.
ADDITIONAL INFORMATION
Pursuant to the requirements of Section 13(e) of the Exchange Act and Rule
13e-3 promulgated thereunder, the Company, as issuer of the class of equity
securities which is the subject of the Rule 13e-3 transaction, together with
Newco and Mueller, has filed with the Securities and Exchange Commission (the
"Commission") a Transaction Statement on Schedule 13E-3 (the "Schedule 13E-3")
relating to the transactions contemplated by the Merger Agreement. As permitted
by the rules and regulations of the Commission, this Proxy Statement omits
information, exhibits and undertakings contained in the Schedule 13E-3. Such
additional information can be inspected at and obtained from the Commission in
the manner set forth below under "Available Information."
Statements contained herein concerning any documents are not necessarily
complete and, in each instance, reference is made to the copy of such document
filed as an exhibit to the Schedule 13E-3. Each such statement is qualified in
its entirety by such reference.
iii
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Exchange Act
and, in accordance therewith, is required to file periodic reports, proxy
statements and other information with the Commission relating to its business,
financial statements and other matters. Such reports, proxy statements and other
information filed by the Company, as well as the aforementioned Schedule 13E-3,
may be inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and may
be available at the Regional Offices of the Commission located at 500 West
Madison Avenue, Suite 1400, Chicago, Illinois 60661, and Seven World Trade
Center, 13th Floor, New York, New York 10048. Copies of such material can also
be obtained from the Commission at prescribed rates by addressing written
requests for such copies to the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549.
THIS PROXY STATEMENT INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT
PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE WITHOUT
CHARGE UPON REQUEST FROM THE CORPORATE SECRETARY'S OFFICE, ALASKA GOLD COMPANY,
2959 N. ROCK ROAD, WICHITA, KANSAS 67226, TELEPHONE NUMBER (316) 636-6316. IN
ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE NO
LATER THAN MARCH 7, 1996.
INFORMATION INCORPORATED BY REFERENCE
The following documents are incorporated by reference herein:
The Company's Annual Report on Form 10-K for the year ended December 31,
1994;
The Company's Quarterly Reports on Form 10-Q for the quarters ended April 1,
1995, July 1, 1995 and September 30, 1995; and
The Company's Current Report on Form 8-K filed with the Commission on
September 13, 1995.
All other documents filed by the Company pursuant to Section 13(a) or 15(d)
of the Exchange Act after December 31, 1994, and prior to the date of this Proxy
Statement, shall be deemed to be incorporated by reference herein.
Any statement contained in a document filed with the Commission prior to the
date hereof and incorporated by reference herein shall be deemed to be modified
or superseded for purposes hereof to the extent that a statement contained
herein (or in any other subsequently filed document which also is incorporated
by reference herein) modifies or supersedes such statement. The modifying or
superseding statement may, but need not, state that it has modified or
superseded a prior statement or include any other information set forth in the
document that is not so modified or superseded. The making of a modifying or
superseding statement shall not be deemed an admission that the modified or
superseded statement, when made, constituted an untrue statement of a material
fact, an omission to state a material fact necessary to make a statement not
misleading, or the employment of a manipulative, deceptive or fraudulent device,
contrivance, scheme, transaction, act, practice, course of business or artifice
to defraud, as those terms are used in the Securities Act of 1933, as amended
(the "Securities Act"), the Exchange Act or the rules and regulations
thereunder. Any statement so modified shall not be deemed in its unmodified form
to constitute a part hereof for purposes of the Exchange Act. Any statement so
superseded shall not be deemed to constitute a part hereof for purposes of the
Exchange Act.
iv
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
INTRODUCTION............................................................................................... i
Matters to be Considered at the Meeting.................................................................. i
Voting at the Meeting.................................................................................... i
Appraisal Rights......................................................................................... ii
Proxies.................................................................................................. ii
Position of the Company's Board; Conflicts of Interest................................................... iii
ADDITIONAL INFORMATION..................................................................................... iii
AVAILABLE INFORMATION...................................................................................... iv
INFORMATION INCORPORATED BY REFERENCE...................................................................... iv
SUMMARY.................................................................................................... 1
The Special Meeting...................................................................................... 1
The Merger............................................................................................... 1
Required Vote............................................................................................ 1
Appraisal Rights......................................................................................... 1
The Effective Time....................................................................................... 2
Background of the Merger................................................................................. 2
Recommendation of Board of Directors, Fairness of the Transaction........................................ 2
Other Opinions........................................................................................... 3
Purpose and Reasons for the Merger....................................................................... 3
Outlook.................................................................................................. 3
Interests of Certain Persons in the Merger, Conflicts of Interest........................................ 4
Financing of the Merger.................................................................................. 4
Expenses of the Merger................................................................................... 4
Conditions to the Merger................................................................................. 5
Exchange of Certificates................................................................................. 5
Federal Income Tax Consequences.......................................................................... 5
Certain Litigation Concerning the Proposed Merger........................................................ 5
Business of the Company.................................................................................. 5
Selected Consolidated Financial Data..................................................................... 6
Recent Developments...................................................................................... 6
Dividends................................................................................................ 6
Newco.................................................................................................... 6
SPECIAL FACTORS............................................................................................ 7
Background of the Merger................................................................................. 7
Timing of the Merger..................................................................................... 7
Proceedings of the Board, Fairness of the Transaction.................................................... 8
Fairness of the Merger................................................................................... 8
Reports and Appraisals................................................................................... 10
Structure and Purpose of the Merger...................................................................... 10
Alternatives to the Merger............................................................................... 11
Certain Effects of the Merger............................................................................ 11
Interests of Certain Persons in the Merger, Conflicts of Interest........................................ 11
Certain Federal Income Tax Consequences of the Merger.................................................... 12
Appraisal Rights......................................................................................... 13
Financing of the Merger.................................................................................. 16
Expenses of the Merger................................................................................... 16
Certain Litigation Concerning the Proposed Merger........................................................ 16
</TABLE>
v
<PAGE>
<TABLE>
<CAPTION>
PAGE
---------
THE MERGER................................................................................................. 16
<S> <C>
General.................................................................................................. 16
Required Vote............................................................................................ 16
Effective Time........................................................................................... 16
Payment for Shares of Company Stock...................................................................... 17
Conditions to the Merger, Waiver......................................................................... 17
Certain Covenants of the Company and Newco............................................................... 18
Termination, Amendments.................................................................................. 18
No Third-Party Beneficiaries............................................................................. 18
CERTAIN INFORMATION REGARDING NEWCO, THE MAJOR SHAREHOLDER AND THE SURVIVING CORPORATION................... 19
DESCRIPTION OF COMPANY STOCK............................................................................... 19
RECENT MARKET PRICES....................................................................................... 20
Dividends................................................................................................ 20
BUSINESS OF THE COMPANY.................................................................................... 21
Overview................................................................................................. 21
Transactions with Affiliates............................................................................. 21
Selected Consolidated Financial Data..................................................................... 22
Management's Discussion and Analysis of Results of Operations and Financial Condition.................... 23
BENEFICIAL OWNERSHIP OF SHARES OF COMMON STOCK OF THE COMPANY.............................................. 26
Beneficial Ownership..................................................................................... 26
Certain Transactions in Company Stock.................................................................... 26
Proxy Solicitation....................................................................................... 26
Current Information: Delisting and Deregistration........................................................ 26
Independent Auditors..................................................................................... 27
Future Shareholder Proposals............................................................................. 27
Other Business........................................................................................... 27
INDEX TO FINANCIAL STATEMENTS.............................................................................. F-1
ANNEX A: AGREEMENT AND PLAN OF MERGER...................................................................... A-1
ANNEX B: SECTION 262 OF THE DELAWARE GENERAL CORPORATION LAW............................................... B-1
</TABLE>
vi
<PAGE>
SUMMARY
The following is a summary of information contained in this Proxy Statement.
This summary is not intended to be a complete statement of all material features
of the Merger and is qualified in its entirety by reference to the more detailed
information appearing elsewhere in this Proxy Statement, including the Annexes
attached hereto. Terms used but not defined in this summary have the meanings
ascribed to them elsewhere in this Proxy Statement. Shareholders are urged to
read this Proxy Statement and the Annexes hereto in their entirety.
THE SPECIAL MEETING
A Special Meeting of Shareholders of the Company will be held on March 14,
1996 at 9:00 a.m. local time, at 2959 N. Rock Road, 5th Floor Conference Room,
Wichita, Kansas 67226, to approve and adopt a proposal recommended by the Board
to approve the Merger Agreement, by and among the Company, Newco and the Major
Shareholder, which provides for the merger of Newco with and into the Company. A
copy of the Merger Agreement is attached hereto as ANNEX A. See "Introduction."
THE MERGER
The Merger Agreement provides that, subject to the approval of the Merger
Agreement by the shareholders of the Company and satisfaction of other
conditions, Newco will be merged with and into the Company, and the Company will
be the surviving corporation and will become wholly owned by the Major
Shareholder. The Major Shareholder, who owns all of Newco's outstanding capital
stock, owns 4,250,027 shares or approximately 85% of the Company Stock. Pursuant
to the Merger Agreement, at the Effective Time, each share of Company Stock
outstanding, other than shares held by the Major Shareholder, will be
automatically converted into the right to receive the Merger Consideration. The
holders of such shares are referred to throughout this Proxy Statement as the
"Public Shareholders." In connection with, and only in connection with, the
consummation of the Merger, the Major Shareholder has agreed to cancel,
simultaneously with the consummation of the Merger, the shares of Company Stock
owned by it and has waived its right to receive the Merger Consideration. After
consummation of the Merger, the entire equity interest in the Company will be
beneficially owned by the Major Shareholder. See "The Merger," "Special Factors
- -- Interests of Certain Persons in the Merger, Conflicts of Interest" and
"Special Factors -- Certain Effects of the Merger."
REQUIRED VOTE
Under Delaware law, the affirmative vote of the holders of a majority of the
shares of Company Stock voting at the Special Meeting is required for approval
of the Merger Agreement. Because the Major Shareholder, which owns approximately
85% of the Company Stock, intends to vote its shares in favor of the Merger,
approval and adoption of the Merger Agreement is assured. Nevertheless, the
Company is holding the Special Meeting because it is required to do so under
Delaware law and proxies are being solicited pursuant to the Exchange Act and
the rules and regulations promulgated thereunder.
APPRAISAL RIGHTS
Under Section 262 of the DGCL, holders of record of shares of Company Stock
who do not wish to accept the Merger Consideration have the right to seek an
appraisal of the fair value of their shares of Company Stock in the Delaware
Court. Holders of Company Stock desiring to exercise their appraisal rights
under the DGCL are referred to herein as "Appraisal Shareholders."
Each Appraisal Shareholder who has not voted in favor of the Merger and who
wishes to assert a right to appraisal must make a written demand to the Company
which reasonably informs the Company of the Appraisal Shareholders' identity and
his or her intention to demand an appraisal for his or her shares of Company
Stock. Failure to make such demand on or before March 14, 1996 will foreclose an
Appraisal Shareholder's right to an appraisal.
Within 120 days after the Effective Time (the "120-Day Period"), any
Appraisal Shareholder who has properly demanded an appraisal and who has not
withdrawn his or her demand (such Appraisal
1
<PAGE>
Shareholders being hereinafter referred to collectively as the "Dissenting
Shareholders") and the Company each has the right to file in the Delaware Court
a petition (the "Petition") demanding a determination of the fair value of the
shares of Company Stock (the "Dissenting Shares") held by all of the Dissenting
Shareholders. If, within the 120-Day Period, no Petition shall have been filed
as provided above, all rights to an appraisal will cease and all of the
Dissenting Shareholders will become entitled to receive the Merger
Consideration, without interest thereon after the Effective Time, with respect
to such Dissenting Shares. The Company is not obligated and does not intend to
file a Petition.
Upon the filing of the Petition, service of a copy thereof is required to be
made upon the surviving corporation, which shall, within 20 days after such
service, file in the office of the Register in Chancery in which the Petition
was filed, a duly verified list containing the names and addresses of all
Appraisal Shareholders. The Delaware Court may order that notice of the time and
place fixed for the hearing on the Petition be sent by registered or certified
mail to the surviving corporation and all of the Dissenting Shareholders, and be
published at least one week before the day of the hearing in a newspaper of
general circulation published in the City of Wilmington, Delaware or in another
publication determined by the Delaware Court. If a hearing on the Petition is
held, the Delaware Court is empowered to determine which Appraisal Shareholders
have complied with the provisions of Section 262 of the DGCL and are entitled to
an appraisal of their shares of Company Stock. See "SPECIAL FACTORS -- Appraisal
Rights" and ANNEX B.
THE EFFECTIVE TIME
The Merger will become effective as of the filing of a Certificate of
Merger, consistent with the Merger Agreement, with the Secretary of State of the
State of Delaware (the "Effective Time"). The Merger will be consummated only
upon satisfaction or waiver, where permissible, of the terms and conditions
contained in the Merger Agreement and provided that the Merger Agreement has not
been terminated. If the Merger has not been consummated by June 30, 1996, either
the Company or Newco may terminate the Merger Agreement so long as the reason
that the Merger has not been consummated is not due to the failure of the party
choosing to terminate to fulfill any of its obligations thereunder. No such
waiver or termination will require the vote or consent of the holders of Company
Stock.
BACKGROUND OF THE MERGER
The terms of the Merger were established by the Board of Directors of Newco
and agreed to by the Company. The Board is comprised in its entirety of
directors who are affiliated with Mueller. The sole director and executive
officer of Newco is William H. Hensley. Mr. Hensley's principal occupation is to
serve as Vice-President, General Counsel and Secretary of the Major Shareholder.
The terms of the Merger were not the subject of arm's-length negotiations among
any of Newco, the Company or Mueller and neither Mueller, the Company nor any of
their directors retained an unaffiliated representative to act solely on behalf
of the Public Shareholders for the purpose of negotiating the terms of the
Merger or preparing a report concerning the fairness of the Merger. For a
description of the factors considered in the determination of the Merger
Consideration and the fairness of the transaction, see "SPECIAL FACTORS --
Proceedings of the Board, Fairness of the Transaction, -- Fairness of the
Merger." For a description of the events leading up to the approval of the
Merger Agreement, see "SPECIAL FACTORS -- Background of the Merger."
RECOMMENDATION OF BOARD OF DIRECTORS, FAIRNESS OF THE TRANSACTION
At a meeting held on September 1, 1995, the Board met to consider the Merger
and unanimously concluded that the Merger is fair to and in the best interests
of the Public Shareholders, approved and adopted the Merger Agreement and
directed that a proposal to approve and adopt the Merger and the Merger
Agreement be submitted to a vote of the Company's shareholders. For a discussion
of the factors considered by the Board in reaching their determination, see
"Special Factors -- Proceedings of the Board, Fairness of the Transaction and --
Fairness of the Merger."
2
<PAGE>
THE BOARD HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT. MEMBERS OF THE
BOARD HAVE CERTAIN INTERESTS WHICH MAY PRESENT THEM WITH CONFLICTS OF INTEREST
IN CONNECTION WITH THE MERGER. See "Special Factors -- Interest of Certain
Persons in the Merger, Conflicts of Interest."
OTHER OPINIONS
Neither the Company, Newco nor Mueller has received any report, opinion or
appraisal from an outside party which is materially related to the Merger.
PURPOSE AND REASONS FOR THE MERGER
The Company entered into the Merger Agreement because the Board concluded
that the terms of the Merger are fair to and in the best interests of the Public
Shareholders. Since its incorporation in 1975, the Company has lost money in
each year, with the exception of 1975 and 1985. Total profits in those two years
aggregated $3.1 million. In the other 18 years, the Company's total losses
aggregated over $100 million. In the time period 1976 to 1984, the Company lost
$51.5 million. In the time period 1986 to 1994, the Company has lost another
$50.9 million. As of September 30, 1995, the Company owed creditors more than
$100 million. The vast majority of this debt is currently due and payable.
Included in this debt is $95 million of term loans and advances from Mueller,
plus an additional $4.9 million in notes payable to Mueller. In 1990, prior to
its delisting by the Pacific Stock Exchange, the Company's Stock traded between
$0.625 and $0.0625. Since 1990, the Company has lost more than another $20
million and its stockholders' equity was a negative $96.4 million at September
30, 1995.
Because of the consistency and magnitude of the Company's losses, the Board
considered it unlikely that the indebtedness owing to Mueller could be repaid.
As a result, the Board considered the terms of the Merger, in which the Public
Shareholders will receive the Merger Consideration, to be preferable to filing
for protection under the bankruptcy laws, in which event it would be unlikely
that the Public Shareholders would receive any distribution with respect to
their investment. In light of these factors, the Board believed that the Merger
could improve the Company's prospects for viability because it would enable
Mueller to realize the benefits and bear the risks of complete ownership of the
Company including the opportunity to (i) facilitate inter-company activity
between Mueller and the Company, (ii) permit combinations of management and
other resources of the Company and Mueller, including, among other things, the
consolidation of the Company's business and operating structure with a view
toward improving operations and reducing expenses of the Company, (iii) enable
the Company's management (or any successors thereto) to devote itself to
building long-term values for the Company without the concern that such efforts
may adversely affect short-term results, and (iv) eliminate the need for the
Company to comply with the reporting requirements of the Exchange Act and to
maintain separately audited financial statements. See "Special Factors --
Proceedings of the Board, Fairness of the Transaction, -- Structure and Purpose
of the Merger and -- Certain Effects of the Merger."
The structure of the acquisition as a merger was determined by Newco. The
Merger has been structured as a merger of Newco and the Company in order to
effectuate the acquisition of all the outstanding shares of Company Stock other
than shares owned by the Major Shareholder, thereby transferring the entire
beneficial equity interest in the Company to the Major Shareholder. The Merger
has been structured as a merger of Newco into the Company, with the Company as
the surviving corporation, in order to preserve the Company's corporate entity
and existing contractual arrangements with third parties. See "Special Factors
- -- Structure and Purpose of the Merger."
OUTLOOK
The continued viability of the Company as a going concern is dependent upon
its ability to generate sufficient working capital through future profitable
operations and sales of assets, including land owned by the Company, and to
maintain or restructure its existing financing from Mueller in a manner
acceptable to both Mueller and the Company. The Board believed it was unlikely
that the Company would be able to repay all of its outstanding obligations to
Mueller. However, the Board
3
<PAGE>
believed that the Merger could improve the Company's prospects for viability
because it would facilitate inter-company activity between Mueller and the
Company, permit the consolidation of the Company's business and operating
structure with a view toward improving operations and reducing expenses of the
Company, and eliminate the need for the Company to comply with the reporting
requirements of the Exchange Act and to maintain separately audited financial
statements.
INTERESTS OF CERTAIN PERSONS IN THE MERGER, CONFLICTS OF INTEREST
In considering the recommendation of the Board with respect to the Merger,
shareholders should be aware that members of the Company's management and the
Board have interests summarized below which present them with conflicts of
interest in connection with the Merger Agreement. The Board was aware of these
conflicts and considered them among the other matters described under "Special
Factors -- Background of the Merger" and "-- Proceedings of the Board, Fairness
of the Transaction." See "Special Factors -- Interests of Certain Persons in the
Merger, Conflicts of Interest."
OWNERSHIP OF THE COMPANY AFTER THE MERGER. After the Merger, the Major
Shareholder will own all of the Company's outstanding capital stock. See
"Certain Information Regarding Newco, the Major Shareholder and the Surviving
Corporation."
DIRECTORS OF THE COMPANY AFTER THE MERGER. The Merger Agreement provides
that, after the Merger, the current directors of the Company will remain in such
capacities with the surviving corporation until their successors are duly
elected or appointed in accordance with applicable law.
EMPLOYMENT OF COMPANY'S EMPLOYEES. Newco has indicated that, subsequent to
the Merger, the current officers and employees of the Company will remain in
such capacities with the surviving corporation.
INDEMNIFICATION OF DIRECTORS AND OFFICERS. Under the Company's existing
Certificate of Incorporation, By-laws and certain indemnification arrangements,
and under currently effective officers' and directors' liability insurance, the
Company's officers and directors may have certain rights to indemnification with
respect to any litigation relating to the Merger. See "Special Factors --
Proceedings of the Board, Fairness of the Transaction," and "The Merger --
Certain Covenants of the Company and Newco."
FINANCING OF THE MERGER
Approximately $237,500 will be required in order to pay (i) the holders of
all outstanding shares of Company Stock, other than shares of Company Stock held
by the Major Shareholder, for their shares and (ii) the expenses in connection
with the Merger. Newco has represented to the Company that it has sufficient
cash to enable it to consummate the Merger and that it will be funded with
adequate cash before the Effective Time (except that the Merger Consideration
will be paid directly by the Major Shareholder). Accordingly, financing is not a
condition to the consummation of the Merger. See "Special Factors -- Financing
of the Merger."
EXPENSES OF THE MERGER
Whether or not the Merger is consummated, Newco has agreed to (i) assume all
of the obligations of the Major Shareholder and any entity formed by it incurred
for purposes of completing the Merger, including Newco, and including without
limitation, indemnities, contribution, compensation and expense reimbursements,
and (ii) pay all reasonable attorneys' fees, expenses and disbursements incurred
in connection with the transactions contemplated by the Merger Agreement.
Notwithstanding the foregoing, Newco will not assume any obligation to pay the
Merger Consideration or any fees and expenses if the Merger Agreement is
terminated because of a material breach by the Company of any of its
representations, warranties or covenants under the Merger Agreement. See
"Special Factors -- Expenses of the Merger."
4
<PAGE>
CONDITIONS TO THE MERGER
The obligations of the parties to consummate the Merger are subject to the
approval of the Merger Agreement by the shareholders of the Company, and
compliance with other covenants and conditions. See "The Merger -- Conditions to
the Merger, Waiver" and "-- Certain Covenants of the Company and Newco."
EXCHANGE OF CERTIFICATES
As soon as practicable following the Effective Time, a letter of transmittal
and instructions for use in surrendering certificates for Company Stock in
exchange for the Merger Consideration will be mailed to all shareholders.
Shareholders must return the completed letters of transmittal and their
certificates in accordance with the instructions in order to exchange their
certificates for the Merger Consideration to be received by such shareholder.
At or promptly after the Effective Time, cash in an amount sufficient to pay
all shareholders the amounts to which they will become entitled as a result of
the Merger will be deposited with Continental Stock Transfer & Trust Co. (the
"Exchange Agent"). As soon as practicable after the Effective Time, the Exchange
Agent will commence distributing cash to each shareholder (other than the Major
Shareholder) upon the surrender by such shareholder of stock certificates for
Company Stock accompanied by a duly executed letter of transmittal. After the
Merger, each outstanding certificate which prior thereto represented issued and
outstanding shares of Company Stock shall be deemed for all purposes to
represent only the right of the holder to receive $0.25 in cash, without
interest, per share of Company Stock (other than shares of Company Stock held by
the Major Shareholder).
HOLDERS OF COMPANY STOCK SHOULD NOT FORWARD THEIR STOCK CERTIFICATES WITH THE
ENCLOSED PROXY CARD. TRANSMITTAL MATERIALS AND INSTRUCTIONS RELATING TO STOCK
CERTIFICATES WILL BE MAILED TO SHAREHOLDERS AS SOON AS PRACTICABLE AFTER THE
EFFECTIVE TIME. SEE "THE MERGER."
FEDERAL INCOME TAX CONSEQUENCES
Generally, if the Merger is consummated, each shareholder of record at the
Effective Time (other than the Major Shareholder) will be entitled to receive
cash for their shares and will recognize taxable gain or loss for federal income
tax purposes equal to the difference, if any, between the amount of such cash
received and the tax basis of the stock exchanged. Each shareholder should
consult such shareholder's tax adviser as to the particular consequences of the
Merger to such shareholder, including the application of state, local and
foreign tax laws. See "Special Factors -- Certain Federal Income Tax
Consequences of the Merger."
CERTAIN LITIGATION CONCERNING THE PROPOSED MERGER
There is no litigation concerning the Merger.
BUSINESS OF THE COMPANY
The Company mines placer gold in Nome, Alaska. See "Business of the
Company." The Company is incorporated in Delaware and its principal executive
offices are located at 2959 N. Rock Road, Wichita, Kansas 67226; telephone
number (316) 636-6316.
5
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The following table sets forth selected historical financial information for
the Company for each of the five years in the period ended December 31, 1994 and
for the nine months ended September 30, 1995 and September 24, 1994. The
following information should be read in conjunction with "Business of the
Company -- Management's Discussion and Analysis of Results of Operations and
Financial Condition" and the Consolidated Financial Statements and related Notes
included elsewhere in this Proxy Statement.
ALASKA GOLD COMPANY
SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
NINE MONTHS ENDED YEAR ENDED
-------------------- -----------------------------------------------------
9/30/95 9/24/94 1994 1993 1992 1991 1990
--------- --------- --------- --------- --------- --------- ---------
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
Sales................................. $ 3,542 $ 3,636 $ 5,537 $ 8,402 $ 6,712 $ 6,864 $ 8,444
Operating Income (loss)............... (381) (1,515) (1,612) 20 556 (15,516) (3,704)
Net loss.............................. (2,535) (2,869) (3,505) (1,336) (747) (17,961) (9,225)
Net loss per share.................... (0.51) (0.57) (0.70) (0.27) (0.15) (3.59) (1.85)
Total assets.......................... 9,036 8,300 6,714 2,551 4,635 3,424 15,366
Accumulated deficit................... (101,785) (98,614) (99,250) (95,745) (94,409) (93,662) (75,701)
Term loans and advances payable to
Mueller.............................. 95,016 91,011 91,334 88,296 89,106 85,609 82,747
Long-term debt........................ 6,089 1,686 4,958 -- 7 7 26
Dividends per share................... -- -- -- -- -- -- --
Book Value per share.................. (19.278) (18.643) (18.771) (18.070) (17.802) (17.653) (14.061)
</TABLE>
RECENT DEVELOPMENTS
During the fourth quarter of 1995, the Company borrowed an additional $1.9
million from Mueller. Proceeds from these borrowings were used to fund open pit
operations. In addition, the Company sold approximately 9,500 ounces of gold
from its inventory for $3.7 million dollars. At December 30, 1995, approximately
twenty-eight ounces remained in inventory, valued at less than $10,000. Proceeds
from these sales were used to fund operating costs of open pit operations and to
reimburse Mueller for services provided to and payments made on the Company's
behalf. These payments to Mueller, after giving effect to the additional
borrowings, reduced the total debt owed to Muller by approximately $.7 million
in the fourth quarter.
DIVIDENDS
The Company has never paid a cash dividend to its shareholders. Pursuant to
the DGCL, the Company is permitted to pay dividends only out of its surplus as
defined by such law or, if there is no such surplus, out of its net profits for
the fiscal year in which the dividend is declared and/or its net profits for the
preceding fiscal year (exclusive, in the case of the Company, of any depletion).
The Company has been prohibited by such law from paying dividends.
NEWCO
Newco is a Delaware corporation organized by the Major Shareholder on August
30, 1995 in connection with the Merger. The Major Shareholder owns all of the
capital stock of Newco. The sole director and executive officer of Newco is
William H. Hensley. Mr. Hensley's principal occupation is to serve as
Vice-President, General Counsel and Secretary of the Major Shareholder. Prior to
the Merger, Newco will not have any significant assets or liabilities (other
than rights and obligations related to the Merger).
6
<PAGE>
SPECIAL FACTORS
BACKGROUND OF THE MERGER
Following the meeting of the Board of Directors of the Major Shareholder
held on August 10, 1995, the Major Shareholder made a formal proposal to the
Company's Board of Directors to buy all of the Company Stock not owned by it for
a consideration of $.25 in cash for each outstanding share (the "Proposal"). The
Board determined that it would be appropriate to review the advisability and
fairness of the Proposal to the Public Shareholders.
TIMING OF THE MERGER
The Merger is being undertaken at this time because the Board believed that
it could improve the Company's prospects for viability because it would
facilitate inter-company activity between Mueller and the Company, permit
combinations of management and other resources of the Company and Mueller,
including, among other things, the consolidation of the Company's business and
operating structure with a view toward improving operations and reducing
expenses of the Company, enable the Company's management (or any successors
thereto) to devote itself to building long-term values for the Company without
the concern that such efforts may adversely affect short-term results, and
eliminate the need for the Company to comply with the reporting requirements of
the Exchange Act and to maintain separately audited financial statements. See
"Special Factors -- Proceedings of the Board, Fairness of the Transaction, --
Structure and Purpose of the Merger and -- Certain Effects of the Merger."
The fact that the Company had substantially more gold in inventory at the
end of the third quarter did not influence the timing of the transaction. The
Company's open pit mining operations involve removing the overburden and
stockpiling pay gravel during the winter near the wash plant area. During the
summer, after natural thawing, the pay gravel is processed through the wash
plant and the gold recovered. The Company determined to hold most of its gold in
inventory until completion of the processing operations, which occurred after
the end of the third quarter. The Company sold approximately 9,500 ounces of
gold from its inventory for $3.7 million. Proceeds from these sales were used to
fund operating costs of open pit operations and to reimburse Mueller for
services provided to and payments made on behalf of the Company. These payments
to Mueller, after giving effect to an additional $1.9 million borrowed during
the fourth quarter of 1995, reduced the total debt owed to Mueller by
approximately $.7 million in the fourth quarter. At December 30, 1995,
approximately twenty-eight ounces of gold remained in inventory, valued at less
than $10,000.
Although the Company had net income of $481,000 for the quarter ended
September 30, 1995, its operations are not anticipated to generate sufficient
profits to generate sustained net income or repay a meaningful amount of its
current debt. Since the Company amortizes its open pit mining costs using a
percentage of completion method, any increase in actual gold production compared
to projected production will have a positive effect in the period in which the
remaining gold is processed. The Company's recovery per yard of pay gravel
compared favorably to its projections, which had a positive effect in that
quarter. Management believes that the Company will essentially break even in the
fourth quarter. However, in both 1992 and 1993, the Company had a profitable
quarter, but at the end of both years it reported losses for the year as a
whole. The same result will be true for the Company in 1995, namely a loss for
the year as a whole. During the first six months of 1996, the Company
anticipates that its operations will be unprofitable. Wash operations have now
ceased and no new gold will be processed through the wash plant until the summer
of 1996. In the meantime, the Company will continue to incur ongoing
administrative costs and interest expense. While lower losses or, perhaps, a
profitable quarter in the latter half of 1996 is possible, as was the case in
1995, the Company's operations are not anticipated to generate sufficient
profits to generate sustained net income, much less repay a meaningful amount of
its current debt.
7
<PAGE>
PROCEEDINGS OF THE BOARD, FAIRNESS OF THE TRANSACTION
DETERMINATIONS OF THE BOARD OF DIRECTORS OF THE COMPANY, MUELLER AND NEWCO
THE COMPANY. At a meeting held on September 1, 1995, the Board unanimously
determined that the terms of the Merger are fair to and in the best interests of
the Public Shareholders and approved the Merger Agreement. The Merger Agreement
was subsequently executed and delivered on September 1, 1995. See "SPECIAL
FACTORS -- Fairness of the Merger."
THE COMPANY'S BOARD OF DIRECTORS. The Company's Board is comprised of two
directors, both of whom are affiliated with the Major Shareholder. Gary L.
Barker is a Director of the Company as well as its President and Chief Operating
Officer. Mr. Barker's principal occupation since April of 1991 has been to serve
as President of Arava Natural Resources Company, Inc., which is a wholly owned
subsidiary of the Major Shareholder. Richard W. Corman is a Director of the
Company as well as its Treasurer and Chief Financial Officer. Since March of
1991, Mr. Corman has been employed by the Major Shareholder in the capacity of
Director of Corporate Accounting.
MUELLER AND NEWCO. At meetings held on August 10, 1995 and September 5,
1995, the Board of Directors of Mueller and Newco, respectively, unanimously
determined that the terms of the Merger are fair to and in the best interests of
the Public Shareholders and approved the Merger Agreement. The Merger Agreement
was executed and delivered on September 1, 1995. See "SPECIAL FACTORS --
Fairness of the Merger, -- Structure and Purpose of the Merger."
SHAREHOLDERS SHOULD BE AWARE THAT IN CONSIDERING THE MERGER, THE TERMS OF
THE MERGER WERE ESTABLISHED BY THE BOARD OF DIRECTORS OF NEWCO, AND AGREED TO BY
THE COMPANY, THAT THE BOARD OF THE COMPANY IS COMPRISED IN ITS ENTIRETY OF
DIRECTORS THAT ARE AFFILIATED WITH MUELLER, AND THAT THE TERMS OF THE MERGER
WERE NOT THE SUBJECT OF ARM'S-LENGTH NEGOTIATIONS AMONG ANY OF SUCH ENTITIES.
NEITHER MUELLER, NEWCO NOR THE COMPANY NOR ANY OF THEIR DIRECTORS RETAINED AN
UNAFFILIATED REPRESENTATIVE TO ACT SOLELY ON BEHALF OF THE PUBLIC SHAREHOLDERS
FOR THE PURPOSE OF NEGOTIATING THE TERMS OF THE MERGER OR PREPARING A REPORT
CONCERNING THE FAIRNESS OF THE MERGER. NEVERTHELESS, BASED UPON CAREFUL
CONSIDERATION OF ALL THE FACTORS DESCRIBED UNDER "SPECIAL FACTORS", THE BOARD
BELIEVES THAT THE TERMS OF THE MERGER ARE FAIR TO THE PUBLIC SHAREHOLDERS. SEE
"SPECIAL FACTORS" AND "INTEREST OF CERTAIN PERSONS IN THE MERGER, CONFLICTS OF
INTEREST" BELOW.
FAIRNESS OF THE MERGER
The Board concluded that the Merger is advisable and fair to the Public
Shareholders. In reaching this conclusion, the Board considered a number of
factors, all of which are discussed below, in light of the Board's knowledge of
and familiarity with the business, financial condition, results of operations
and prospects of the Company, as well as the industry it serves, the risks
associated with achieving its prospective operating results and general economic
and market conditions. In view of the wide variety of factors considered in
connection with its evaluation of the Merger, the Board did not find it
practicable to, and did not, quantify or otherwise attempt to assign relative
weights to the specific factors considered in reaching its determination. The
Board considered each of the factors to be an integral basis of its
determination to recommend the Merger and was not able to assign relative
importance to any one factor over another factor.
In particular, the Board considered the following factors, each of which
supports the Board's fairness determination:
(a) The Company's overall financial condition.
- Since its incorporation in 1975, the Company has lost money in each year,
with the exception of 1975 and 1985. Total profits in those two years
aggregated $3.1 million. In the other 18 years,
8
<PAGE>
the Company's total losses aggregated over $100 million. In the time
period 1976 to 1984, the Company lost $51.5 million. In the time period
1986 to 1994, the Company lost another $50.9 million.
- As of September 30, 1995, the Company owed creditors more than $100
million. The vast majority of this debt is currently due and payable.
Included in this debt is $95 million of term loans and advances from
Mueller, plus an additional $4.9 million in notes payable to Mueller.
- The Company's stockholders' deficit was $93.9 million at year end 1994.
Because of the consistency and magnitude of the Company's losses, the Board
considered it unlikely that the indebtedness owing to Mueller could be repaid.
As a result, the Board considered the terms of the Merger, in which the Public
Shareholders will receive the Merger Consideration, to be preferable to filing
for protection under the bankruptcy laws, in which event it would be unlikely
that the Public Shareholders would receive any distribution with respect to
their investment. In light of these factors, the Board believed that the Merger
could improve the Company's prospects for viability because it would enable
Mueller to realize the benefits and bear the risks of complete ownership of the
Company including the opportunity to (i) facilitate inter-company activity
between Mueller and the Company, (ii) permit combinations of management and
other resources of the Company and Mueller, including, among other things, the
consolidation of the Company's business and operating structure with a view
toward improving operations and reducing expenses of the Company, (iii) enable
the Company's management (or any successors thereto) to devote itself to
building long-term values for the Company without the concern that such efforts
may adversely affect short-term results, and (iv) eliminate the need for the
Company to comply with the reporting requirements of the Exchange Act and to
maintain separately audited financial statements. See "Special Factors --
Proceedings of the Board, Fairness of the Transaction, -- Structure and Purpose
of the Merger and -- Certain Effects of the Merger."
(b) The Board considered the relationship of the Merger Consideration to the
actual and projected financial results of the Company for 1994 and 1995,
respectively, as summarized below. The Board believed that its fairness
determination was supported because, as shown below, the actual and projected
financial results demonstrate the continuation of the Company's negative overall
performance despite an increase of $13 per ounce in the projected market price
for gold.
ALASKA GOLD COMPANY
SUMMARY OF ACTUAL AND PROJECTED
RESULTS OF OPERATIONS
(IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE NINE MONTHS
ENDED FOR THE YEAR ENDED
SEPTEMBER 30, 1995 DECEMBER 31, 1994
---------------------- --------------------
ACTUAL PROJECTED ACTUAL PROJECTED
--------- ----------- --------- ---------
<S> <C> <C> <C> <C>
Net sales.................................................. $ 3,542 $ 6,411 $ 5,537 $ 6,713
Operating income (loss).................................... (381) 1,873 (1,612) (1,318)
Net loss before taxes...................................... (2,535) (690) (3,505) (3,419)
Assumption for projection gold market price per ounce, in
dollars per ounce......................................... N/A 390 N/A 377
</TABLE>
(c) The relationship of the Merger Consideration to both the market price of
the Company Stock prior to the announcement of the Proposal, the historical
trading range for the Company Stock as well as the lack of liquidity provided by
the market for the Company Stock.
- In 1990, prior to its delisting by the Pacific Stock Exchange, the
Company's Stock traded between $0.625 and $0.0625. Since March 21, 1991,
the Company Stock traded, if at all, in the over-the-counter market as
reported on the National Daily Quotation Service "Pink Sheets."
9
<PAGE>
However, because of its limited and sporadic market, the Company Stock is
no longer listed in the Pink Sheets. As a result, there is no established
public trading market for the Company Stock.
- The Board considered the Merger Consideration to be fair in relation to
the trading prices for the Company Stock referred to above which pre-date
the Company Stock's delisting by the Pacific Stock Exchange. Moreover, the
Board believed the Merger Consideration would exceed any distribution made
from the Company's bankruptcy estate in the event that the Company filed
for protection under the Bankruptcy Code. (As of February 7, 1996, the
off-pink sheets bid and asked prices for the Company Stock were $0.0625
and $0.3125, respectively.)
(d) Local economic conditions.
The Board considered the economic conditions in the locality of the
Company's land holdings and the demand for such land. Although the Company has
substantial land holdings in Alaska, demand for such land is dependent upon
local economic conditions. The Board believed that such existing conditions
supported its fairness determination because land sales, which have consisted
primarily of small residential lots in the Nome and Fairbanks areas, have been
sporadic and thus may not be relied upon as a consistent source of revenue for
the Company.
(e) Other considerations.
- The Board also considered that to seek to maximize shareholder value
through a liquidation involved substantial uncertainty, expense and delay,
and, in any event, would most likely result in the cancellation of the
Company Stock for no consideration due to the significant amount of
outstanding debt owed by the Company.
- Due to the position of the Major Shareholder, which owns approximately 85%
of the Company Stock outstanding, the Board believed that it would have
been unable to solicit acquisition offers for the Company from third
parties. No other expressions of interest in acquiring the Company have
been received by the Company or the Major Shareholder.
REPORTS AND APPRAISALS
Neither Mueller, the Company nor any of their respective directors retained
an unaffiliated representative to act solely on behalf of the Public
Shareholders for the purpose of negotiating the terms of the Merger or preparing
a report concerning the fairness of the Merger to the Public Shareholders or
received any report, opinion or appraisal from an outside party in connection
with the Merger.
STRUCTURE AND PURPOSE OF THE MERGER
The Merger is not structured to require the approval of a majority of the
Public Shareholders. In addition, neither Mueller, the Company nor any of their
respective directors retained an unaffiliated representative to act solely on
behalf of the Public Shareholders for the purpose of negotiating the terms of
the Merger or preparing a report concerning the fairness of the Merger. While
these factors could be viewed as unfavorable to a determination of fairness, the
Company believes, based upon the factors discussed above, that the terms of the
Merger are fair to the Public Shareholders.
The Merger has been structured as a merger of Newco and the Company in order
to effectuate the acquisition of all the outstanding shares of Company Stock
other than shares owned by the Major Shareholder, thereby transferring the
entire beneficial equity interest in the Company to the Major Shareholder. The
Merger has been structured as a merger of Newco into the Company, with the
Company as the surviving corporation, in order to preserve the Company's
corporate entity and existing contractual arrangements with third parties.
In addition to providing the Company the additional flexibility in dealing
with its assets that is inherent in a closely held corporation, the Major
Shareholder believes that the Company would
10
<PAGE>
benefit from the reduction in costs associated with the termination of the
Company's obligations and reporting requirements under the Securities laws. See
"Special Factors -- Background of the Merger" and "-- Proceedings of the Board,
Fairness of the Transaction."
For all of the same reasons discussed above, each of Newco and the Major
Shareholder believes that the Merger is fair to the Public Shareholders. Newco
and the Major Shareholder did not attach relative weights to the factors
considered in reaching their conclusions. See "Special Factors -- Proceedings of
the Board, Fairness of the Transaction."
ALTERNATIVES TO THE MERGER
The Board considered the following alternatives to the Merger: (i) an
exchange transaction whereby the Public Shareholders would receive shares of
common stock of Mueller in exchange for their Company Stock and (ii) filing for
protection under the bankruptcy laws.
Approximately 89% of the Public Shareholders own less than 100 shares of
Company Stock and approximately 45% of the Public Shareholders own less than 10
shares of Company Stock. Because of the disparity in value between the Company
Stock and Mueller's common stock, the Board determined that such a transaction
would result in the majority of the Public Shareholders receiving cash in lieu
of fractional Mueller shares. Moreover, because Mueller is a publicly traded
company, Public Shareholders interested in acquiring an equity interest in
Mueller could purchase shares in the public market. The Board further determined
that the Merger would be beneficial to the Public Shareholders because in the
event that the Company is compelled to file for protection under the bankruptcy
laws, it would be unlikely that the Public Shareholders would receive any
distribution with respect to their investment.
No alternatives were considered whereby the Public Shareholders would
maintain an equity interest in the Company.
CERTAIN EFFECTS OF THE MERGER
If the proposed Merger is consummated, the present holders of the Company
Stock (other than the Major Shareholder) will no longer have an equity interest
in the Company. Instead, each holder of Company Stock will have the right to
receive $0.25 in cash, without interest, for each such share held (other than
shares held by the Major Shareholder).
The Company would, as a result of the Merger, become a privately held
company. Company Stock would cease trading entirely, the registration of Company
Stock under the Exchange Act would terminate and the Company would cease filing
reports with the Commission. Moreover, the Company would be relieved of the
obligation to comply with the proxy rules of Regulation 14A under Section 14 of
the Exchange Act and its officers, directors and 10% shareholders would be
relieved of the reporting requirements and restrictions on insider trading under
Section 16 of the Exchange Act. Accordingly, less information would be required
to be made publicly available than presently is the case.
Immediately after the Merger, all of the then outstanding Company Stock
would be owned by the Major Shareholder. The Company's total stockholders'
deficit at December 31, 1994 was $(93,853,000) and its net loss for 1994 was
$(3,505,000). Through its 85% ownership of the outstanding Company Stock, the
Major Shareholder's current interest in such total stockholders' deficit and net
loss is $(79,775,000) and $(2,979,250), respectively. The Major Shareholder's
interest will increase, as a result of the Merger, to 100%. See "Special Factors
- -- Interests of Certain Persons in the Merger, Conflicts of Interest" and
"Certain Information Regarding Newco and the Major Shareholder."
INTERESTS OF CERTAIN PERSONS IN THE MERGER, CONFLICTS OF INTEREST
In considering the recommendation of the Board with respect to the Merger,
shareholders should be aware that members of the Company's management and the
Board as comprised have certain interests in the Merger which are described
below and which are in addition to, and may conflict with the interests of
shareholders generally in connection with, the Merger Agreement. As described
below, the directors of the Company are affiliated with the Major Shareholder.
Gary L. Barker is a Director of
11
<PAGE>
the Company as well as its President and Chief Operating Officer. Mr. Barker's
principal occupation since April of 1991 has been to serve as President of Arava
Natural Resources Company, Inc., which is a wholly owned subsidiary of the Major
Shareholder. Richard W. Corman is a Director of the Company as well as its
Treasurer and Chief Financial Officer. Since March of 1991, Mr. Corman has been
employed by the Major Shareholder in the capacity of Director of Corporate
Accounting. The Board was aware of those conflicts and considered them among the
other matters described under "Special Factors -- Background of the Merger," "--
Proceedings of the Board, Fairness of the Transaction," and "-- Structure and
Purpose of the Merger." As of the date of this Proxy Statement, no officer or
director was the beneficial owner of any shares of Company Stock. All of the
Company's officers and directors as a group own less than 1% of Mueller's
outstanding common stock.
Neither Mueller, the Company nor any of their respective directors retained
an unaffiliated representative to act solely on behalf of the Public
Shareholders for the purpose of negotiating the terms of the Merger or preparing
a report concerning the fairness of the Merger for such shareholders.
Nevertheless, based upon careful consideration of all of the factors
discussed in this Proxy Statement, the Board believes that the terms of the
Merger are fair to the Public Shareholders.
OWNERSHIP OF THE COMPANY AFTER THE MERGER. After consummation of the
Merger, the entire equity interest in the Company will be beneficially owned by
the Major Shareholder.
DIRECTORS OF THE COMPANY AFTER THE MERGER. The Merger Agreement provides
that after the Merger, the current directors of the Company will remain in such
capacities with the surviving corporation until successors are duly elected or
appointed in accordance with applicable law.
EMPLOYMENT OF COMPANY'S EMPLOYEES. Newco has indicated that, subsequent to
the Merger, the current officers and employees of the Company will remain in
such capacities with the surviving corporation.
INDEMNIFICATION OF DIRECTORS AND OFFICERS. Under the Company's existing
Certificate of Incorporation, By-Laws and applicable indemnification agreements
and under currently effective officers' and directors' liability insurance, the
Company's officers and directors may have rights to indemnification with respect
to any litigation relating to the Merger. See "Special Factors -- Proceedings of
the Board, Fairness of the Transaction" and "The Merger -- Certain Covenants of
the Company and Newco."
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER
The following is a brief description of the material federal income tax
consequences of the Merger. This summary contains general information and does
not address tax consequences that may be relevant to types of investors subject
to special treatment under the federal income tax laws (such as dealers in
securities, banks, insurance companies and foreign individuals and entities).
EACH SHAREHOLDER SHOULD CONSULT HIS OR HER OWN TAX ADVISORS WITH RESPECT TO THE
SPECIFIC TAX CONSEQUENCES OF THE MERGER TO HIM OR HER, INCLUDING THE APPLICATION
AND EFFECT OF FEDERAL, STATE, LOCAL AND FOREIGN TAX LAWS.
The exchange of shares of Company Stock for $0.25 per share in the Merger
will be a taxable transaction to Public Shareholders of Company Stock. A Public
Shareholder will recognize gain or loss under federal income tax laws in an
amount by which the proceeds received in exchange for such shares exceed or are
less than the holder's tax basis in the shares. If the shares were a capital
asset in the hands of the Public Shareholder, such gain or loss would be capital
rather than ordinary and, in such instances, would be long term if the shares
are considered to have been held more than one year and short term if they are
considered to have been held one year or less on the date of the Merger.
Currently, the maximum federal income tax rate on capital gains is 28% as
opposed to 39.6% for ordinary income. Capital losses may be used to offset
capital gains. For individuals, any capital losses in excess of capital gains
may be used to offset income from other sources of up to $3,000 per year. Any
12
<PAGE>
remaining capital losses carry forward to future years, subject to the same
annual limits. For corporations, capital losses may only be used to offset
capital gains. Any unused capital losses may generally be carried back for three
years and carried forward five years.
The waiver by the Major Shareholder in connection with, and only in
connection with, the consummation of the Merger, of its right to receive the
Merger Consideration will not result in the recognition by it of taxable gain.
The consummation of the Merger will not result in the recognition by the
Company of taxable gain.
Under the backup withholding rules, unless an exemption applies under the
applicable law and regulations, the Exchange Agent will be required to withhold,
and will withhold, 31% of all cash payments made in exchange for shares of
Company Stock unless the shareholder or other payee provides his tax
identification number (social security number, in the case of an individual, or
employer identification number, in the case of a corporation) and certifies that
such number is correct. Each Public Shareholder and, if applicable, each other
payee should complete and sign the substitute Form W-9 to be included in the
transmittal materials and instructions relating to stock certificates to be
mailed to Public Shareholders as soon as practicable after the Effective Time,
so as to provide the information and certification necessary to avoid backup
withholding, unless an applicable exemption exists and is proved in a manner
satisfactory to the Company and the Exchange Agent.
APPRAISAL RIGHTS
The following is a summary of the provisions of Section 262 of the DGCL
relating to appraisal rights. Section 262 of the DGCL is reproduced in its
entirety as ANNEX B to this Proxy Statement, and this summary is qualified in
its entirety by reference to ANNEX B. Shareholders should read carefully ANNEX B
and, if they wish to exercise their rights to an appraisal, follow carefully the
procedures set forth therein. Any shareholders considering demanding an
appraisal are advised to consult legal counsel.
Under Section 262 of the DGCL, holders of record of shares of Company Stock
who do not wish to accept the Merger Consideration have the right to seek an
appraisal of the fair value of their shares of Company Stock (the "Shares") in
the Delaware Court. EACH SHAREHOLDER IS URGED TO READ CAREFULLY THE MATERIALS
CONTAINED IN THIS PROXY STATEMENT, INCLUDING ANNEX B, AND THE OTHER MATERIALS
INCORPORATED HEREIN IN MAKING A DETERMINATION WHETHER TO ACCEPT THE MERGER
CONSIDERATION OR TO SEEK AN APPRAISAL PURSUANT TO THE DGCL. FAILURE TO COMPLY
WITH THE PROCEDURES SET FORTH HEREIN OR IN THE DGCL MAY RESULT IN A LOSS OF
THEIR APPRAISAL RIGHTS. Shareholders desiring to exercise their appraisal rights
under the DGCL are referred to herein as "Appraisal Shareholders."
Each Appraisal Shareholder who has not voted in favor of the Merger and who
wishes to assert a right to appraisal must, on or before March 14, 1996, make a
written demand for the appraisal of his or her shares of Company Stock to the
Company at the address set forth below. Failure to make such demand on or before
March 14, 1996 will foreclose an Appraisal Shareholder's right to an appraisal.
The demand must reasonably inform the Company of the identity of the Appraisal
Shareholder making the demand as well as the intention of such Appraisal
Shareholder to demand an appraisal of the fair value of the shares of Company
Stock held by such shareholder.
For purposes of making an appraisal demand, the address of the Company is:
Alaska Gold Company, 2959 N. Rock Road, Suite 500, Wichita, Kansas 67226,
Attention: President.
Only a holder of record of shares of Company Stock, or a person duly
authorized and explicitly purporting to act on the record holder's behalf, is
entitled to assert an appraisal right with respect to the shares of Company
Stock registered in the record holder's name. BENEFICIAL OWNERS WHO ARE NOT
RECORD HOLDERS AND WHO WISH TO EXERCISE APPRAISAL RIGHTS ARE
13
<PAGE>
ADVISED TO CONSULT PROMPTLY WITH THE APPROPRIATE RECORD HOLDERS AS TO THE TIMELY
EXERCISE OF APPRAISAL RIGHTS. A record holder, such as a broker, who holds
shares of Company Stock as a nominee for others may exercise appraisal rights
with respect to the shares of Company Stock held for one or more beneficial
owners, while not exercising such rights for other beneficial owners. In such a
case, the written demand should set forth the number of shares of Company Stock
as to which the demand is made. Where no shares of Company Stock are expressly
mentioned, the demand will be presumed to cover all shares of Company Stock held
in the name of such record holder.
A holder of shares of Company Stock held in "street name" who desires an
appraisal must take such actions as may be necessary to ensure that a timely and
proper demand for an appraisal is made by the record holder of such shares of
Company Stock. Shares of Company Stock held through brokerage firms, banks and
other financial institutions are frequently deposited with and held of record in
the name of a nominee of a central security depository. Any holder of shares of
Company Stock desiring an appraisal who held his or her shares of Company Stock
through a brokerage firm, bank or other financial institution is responsible for
ensuring that the demand for an appraisal is made by the record holder. The
Appraisal Shareholder should instruct such firm, bank or institution that the
demand for an appraisal must be made by the record holder of the shares of
Company Stock, which might be the nominee of a central security depository if
the shares of Company Stock have been so deposited. As required by Section 262
of the DGCL, a demand for an appraisal must reasonably inform the Company of the
identity of the record holder (which might be a nominee as described above) and
of such holder's intention to seek an appraisal of such shares of Company Stock.
A demand for an appraisal of shares of Company Stock owned of record by two
or more joint holders must identify and be signed by or for all of the holders.
A demand for an appraisal signed by trustees, executors, administrators,
guardians, attorneys-in-fact, officers of corporations or others acting in a
fiduciary or representative capacity must so identify the persons signing the
demand.
An appraisal demand may be withdrawn by an Appraisal Shareholder within 60
days after the Effective Time, but thereafter the written approval of the
Company is needed for any such withdrawal. Upon withdrawal of an appraisal
demand, a holder of shares of Company Stock will be entitled to receive the
Merger Consideration. No interest will be paid on this amount.
Within 120 days after the Effective Time (the "120-Day Period"), any
Appraisal Shareholder who has properly demanded an appraisal and who has not
withdrawn his or her demand as provided above (such Appraisal Shareholders being
hereinafter referred to collectively as the "Dissenting Shareholders") and the
Company each has the right to file in the Delaware Court a petition (the
"Petition") demanding a determination of the fair value of the dissenting shares
of Company Stock (the "Dissenting Shares") held by all of the Dissenting
Shareholders. If, within the 120-Day Period, no Petition shall have been filed
as provided above, all rights to an appraisal will cease and all of the
Dissenting Shareholders will become entitled to receive the Merger
Consideration, without interest thereon after the Effective Time, with respect
to such Dissenting Shares of Company Stock. The Company is not obligated and
does not intend to file such a Petition. Any Dissenting Shareholder is entitled,
pursuant to a written request to the Company made within the 120-Day Period, to
receive from the Company a statement setting forth the aggregate number of
shares of Company Stock with respect to which demands for appraisal have been
received and the aggregate number of Dissenting Shareholders.
Upon the filing of the Petition, service of a copy thereof is required to be
made upon the surviving corporation, which, within 20 days after such service,
must file in the office of the Register in Chancery in which the Petition was
filed, a duly verified list containing the names and addresses of all Appraisal
Shareholders. The Delaware Court may order that notice of the time and place
fixed for the hearing on the Petition be sent by registered or certified mail to
the surviving corporation and all of the Dissenting Shareholders, and be
published at least one week before the day of the hearing in a newspaper of
general circulation published in the City of Wilmington, Delaware or in another
publication determined by the Delaware Court. The Delaware Court will approve
the form of notice by mail
14
<PAGE>
and by publication. The costs relating to these notices will be borne by the
Company. If a hearing on the Petition is held, the Delaware Court is empowered
to determine which Appraisal Shareholders have complied with the provisions of
Section 262 of the DGCL and are entitled to an appraisal of their shares of
Company Stock. The Delaware Court may require that Dissenting Shareholders
submit their stock certificates which had represented Shares of Company Stock
for notation thereon of the pendency of the appraisal proceedings. The Delaware
Court is empowered to dismiss the proceedings as to any Dissenting Shareholder
who does not comply with such requirement. Accordingly, Dissenting Shareholders
are cautioned to retain their stock certificates pending resolution of the
appraisal proceedings.
Dissenting Shares of Company Stock will be appraised by the Delaware Court
at their fair value as of the Effective Time, exclusive of any element of value
arising from the accomplishment or expectation of the Merger. The value so
determined for the shares of Company Stock could be equal to, more than or less
than the Merger Consideration, and could be based upon considerations other
than, or in addition to, the Merger Consideration, the market value of the
shares of Company Stock, asset values and earning capacity. The Company reserves
the right to assert in any appraisal proceeding that the fair value of the
shares of Company Stock as of the Effective Time is less than the Merger
Consideration.
In WEINBERGER V. UOP, INC., ET AL. (decided February 1, 1983), the Delaware
Supreme Court stated, among other things, that "proof of value by any techniques
or methods which are generally considered acceptable in the financial community
and otherwise admissible in court" should be considered in an appraisal
proceeding, and that "fair price obviously requires consideration of all
relevant factors involving the value of a company..." The Delaware Supreme Court
stated that in making this determination of fair value the court must consider
market value, asset value, dividends, earnings prospects, the nature of the
enterprise and any other factors which could be ascertained as of the date of
the merger that shed any light on future prospects of the merged corporation.
The Delaware Supreme Court also held that "elements of future value, including
the nature of the enterprise, which are known or susceptible of proof as of the
date of the merger and not the product of speculation, may be considered." In
addition, the Delaware Supreme Court stated in WEINBERGER that while ordinarily
a stockholder's only monetary remedy would be an appraisal, such remedy may not
be adequate "in cases, particularly where fraud, misrepresentation,
self-dealing, deliberate waste of corporate assets, or gross and palpable
overreaching are involved," and that in such cases the Delaware Court would be
free to fashion any form of appropriate relief.
The Delaware Court may also, on application, (i) determine a fair rate of
interest, simple or compound, if any, to be paid to Dissenting Shareholders in
addition to the value of the Dissenting Shares of Company Stock for the period
from the Effective Time to the date of payment, (ii) assess costs among the
parties as the Delaware Court deems equitable and (iii) order all or a portion
of the expenses incurred by any Dissenting Shareholder in connection with the
appraisal proceeding, including, without limitation, reasonable attorney's fees
and fees and expenses of experts, to be charged pro rata against the value of
all Dissenting Shares of Company Stock. Determinations by the Delaware Court are
subject to appellate review by the Delaware Supreme Court.
Dissenting Shareholders are generally permitted to participate in the
appraisal proceedings. No appraisal proceeding in the Delaware Court shall be
dismissed as to any Dissenting Shareholder without the approval of the Delaware
Court, and this approval may be conditioned upon terms which the Delaware Court
deems just.
From and after the Effective Time, Dissenting Shareholders will not be
entitled to vote their shares of Company Stock for any purpose and will not be
entitled to receive payment of dividends or other distributions in respect of
such shares of Company Stock payable to shareholders of record thereafter.
15
<PAGE>
FINANCING OF THE MERGER
Approximately $237,500 will be required in order to pay (i) the holders of
all outstanding shares of Company Stock, other than shares of Company Stock held
by the Major Shareholder, for their shares of Company Stock and (ii) the
expenses in connection with the Merger. Newco has represented to the Company
that it has sufficient cash to enable it to consummate the Merger and that it
will be funded with adequate cash before the Effective Time (except that the
Merger Consideration will be paid directly by the Major Shareholder).
Accordingly, financing is not a condition to the consummation of the Merger.
EXPENSES OF THE MERGER
<TABLE>
<CAPTION>
EXPENSE ITEM ESTIMATED AMOUNT
- --------------------------------------------------------------------------- -----------------
<S> <C>
Merger Consideration....................................................... $ 187,500
Printing and Mailing Costs................................................. 10,000
Legal and Accounting Fees and Expenses..................................... 40,000
-----------------
$ 237,500
-----------------
-----------------
</TABLE>
CERTAIN LITIGATION CONCERNING THE PROPOSED MERGER
There is no litigation concerning the Merger.
THE MERGER
GENERAL
The Merger Agreement provides that, subject to the adoption of the Merger
Agreement by the shareholders of the Company and compliance with certain other
covenants and conditions, Newco will be merged with and into the Company and the
Company will be the surviving corporation, with the Major Shareholder
constituting its sole shareholder. All material terms of the Merger Agreement
have been disclosed in the body of this Proxy Statement. All references to the
terms and conditions of the Merger Agreement in this Proxy Statement are
qualified in their entirety by reference to the Merger Agreement, a copy of
which is attached hereto as ANNEX A.
At the Effective Time, each outstanding share of Company Stock (other than
shares of Company Stock held by the Major Shareholder) will be converted into
the right to receive $0.25 in cash, without interest. In connection with, and
only in connection with, the consummation of the Merger, the Major Shareholder
is waiving its right to receive any consideration in exchange for the Company
Stock owned by it.
REQUIRED VOTE
The presence, in person or by properly executed proxy, of the holders of a
majority of the outstanding shares of Company Stock is necessary to constitute a
quorum at the Special Meeting. Each shareholder is entitled to one vote for each
share of Company Stock held by such shareholder. Under Delaware law, the
affirmative vote of holders of a majority of the shares of outstanding Company
Stock entitled to vote at the Special Meeting is required to approve the Merger.
For purposes of this vote, abstentions will be counted as shares of Company
Stock voted, while broker non-votes will not be so counted. The Merger does not
require the approval of a majority of the Public Shareholders of the Company.
Because the Major Shareholder, which holds approximately 85% of the Company
Stock, intends to vote its shares of Company Stock in favor of the Merger,
approval and adoption of the Merger Agreement is assured. Nevertheless, the
Company is holding the Special Meeting because it is required to do so under
Delaware law and proxies are being solicited pursuant to the Exchange Act and
the rules and regulations promulgated thereunder.
EFFECTIVE TIME
The Merger will become effective by filing a Certificate of Merger,
consistent with the Merger Agreement, with the Secretary of State of Delaware.
The Merger will be consummated only upon
16
<PAGE>
satisfaction or waiver, where permissible, of the terms and conditions of the
Merger Agreement and provided that the Merger Agreement has not been terminated.
If the Merger has not been consummated by June 30, 1996, either the Company or
Newco may terminate the Merger Agreement so long as the reason that the Merger
has not been consummated is not due to the failure of the party choosing to
terminate to fulfill any of its obligations thereunder. No such waiver or
termination will require the vote or consent of the holders of Company Stock.
PAYMENT FOR SHARES OF COMPANY STOCK
In order to receive the cash to which Public Shareholders will be entitled
as a result of the Merger, each holder of certificates representing shares of
Company Stock will be required to surrender such holder's stock certificate or
certificates, together with a duly executed letter of transmittal, to the
Exchange Agent. Upon receipt of such certificate or certificates together with a
duly executed letter of transmittal, the Exchange Agent will issue a check or
draft to the person or persons entitled thereto in an amount equal to $0.25 for
each share of Company Stock represented by such stock certificate or
certificates. If any payment for shares of Company Stock is to be made in a name
other than that in which the certificates for such shares of Company Stock
surrendered for payment are registered on the stock transfer books of the
Company as of the Effective Time, certificates so surrendered must be properly
endorsed or otherwise in proper form for transfer and the person requesting such
payment must pay to the Exchange Agent any transfer or other taxes required by
reason of the payment to a person other than the registered owner of the
certificate or certificates surrendered or shall establish to the satisfaction
of the Exchange Agent that such tax has been paid or is not applicable. No
interest will be paid or accrued on amounts payable upon the surrender of any
stock certificate.
Instructions with regard to the surrender of certificates, together with a
letter of transmittal to be used for this purpose, will be mailed to
shareholders as promptly as practicable after the Effective Time. It also is
expected that letters of transmittal will be available at the office of the
Exchange Agent no later than the first business day following the Effective
Time. Shareholders should surrender certificates for shares of Company Stock
only with a letter of transmittal.
SHAREHOLDERS SHOULD NOT SEND IN ANY STOCK CERTIFICATES WITH THE ENCLOSED
PROXY CARD
CONDITIONS TO THE MERGER, WAIVER
The respective obligations of Newco and the Company to consummate the Merger
are subject to the satisfaction or waiver, on or before the Effective Time, of
the conditions that (a) the approval of the Merger and the Merger Agreement at
the Special Meeting by the affirmative vote of the holders of a majority of the
outstanding shares of Company Stock entitled to vote at the Special Meeting, (b)
any waiting period applicable to the Merger under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 (the "Hart-Scott-Rodino Act") shall have
terminated or expired, (c) the absence of any statute, rule or regulation which
makes consummation of the Merger illegal or otherwise prohibited or any order,
decree, injunction or judgment enjoining the consummation of the Merger and (d)
the receipt of an opinion of counsel of the Company, in form and substance
reasonably satisfactory to the Company and Newco, as to the validity of the
Merger under Delaware Law.
The obligations of Newco to consummate the Merger are subject to the
satisfaction or waiver, on or before the Effective Time, of the additional
conditions that (a) the representations and warranties of the Company contained
in the Merger Agreement and in any certificate or other writing delivered by the
Company pursuant thereto shall be true and correct in all material respects at
and as of the Effective Time as if made at and as of such time; (b) the Company
shall have performed and complied in all material respects with each obligation,
agreement and covenant to be performed by and complied with by it under the
Merger Agreement at or prior to the Effective Time; (c) receipt by Newco of a
certificate signed by an executive officer of the Company to the effect set
forth in clauses (a) and (b) of this Paragraph; (d) the holders of not more than
5% of the outstanding shares of Company Stock shall have exercised their
appraisal rights in the Merger in accordance with Delaware Law; and (e) no
action or proceeding shall have been commenced or threatened for the purpose of
17
<PAGE>
obtaining an injunction, order or damages before any court or governmental
agency or other regulatory or administrative agency or commission, domestic or
foreign, which Newco shall on advice of counsel reasonably determine would (1)
result in the imposition of material limitations on the ability of the Company
or Newco effectively to consummate the Merger, (2) have the effect of rendering
the Merger violative of any applicable law, or (3) have a material adverse
effect on the business, assets or financial condition of the surviving
corporation.
The obligations of the Company to consummate the Merger are subject to the
satisfaction or waiver, on or before the Effective Time, of the additional
conditions that (a) the representations and warranties of Newco contained in the
Merger Agreement and in any certificate or other writing delivered by Newco
pursuant thereto shall be true and correct in all material respects as of the
Effective Time as if made at and as of such time (other than any inaccuracies in
such representations or warranties that are attributable to the Company); (b)
Newco shall have performed in all material respects all of its obligations to be
performed and complied with by it under the Merger Agreement at or prior to the
Effective Time; (c) receipt by the Company of a certificate signed by an
executive officer of Newco to the effect set forth in clauses (a) and (b) of
this Paragraph; and (d) no action or proceeding shall have been commenced or
threatened for the purpose of obtaining an injunction, order or damages before
any court or governmental agency or other regulatory or administrative agency or
commission, domestic or foreign, which the Company shall on advice of counsel
reasonably determine would (1) result in the imposition of material limitations
on the ability of the Company or Newco effectively to consummate the Merger, (2)
have the effect of rendering the Merger violative of any applicable law, or (3)
have a material adverse effect on the business, assets or financial condition of
the surviving corporation.
CERTAIN COVENANTS OF THE COMPANY AND NEWCO
VOTE. The Company has agreed, in accordance with applicable law, to use its
best efforts to solicit from its shareholders proxies in favor of the approval
of the Merger and the Merger Agreement.
PAYMENT OF EXPENSES. Whether or not the Merger is consummated, Newco has
agreed to (i) assume all of the obligations of the Major Shareholder and any
entity formed by it for purposes of completing the Merger, including Newco,
including without limitation, indemnities, contribution, compensation and
expense reimbursements, and (ii) pay all reasonable attorneys' fees, expenses
and disbursements incurred in connection with the transactions contemplated by
the Merger Agreement. Notwithstanding the foregoing, Newco will not assume any
obligation to pay the Merger Consideration or any fees and expenses if the
Merger Agreement is terminated because of a material breach by the Company of
any of its respective representations, warranties or covenants under the Merger
Agreement.
TERMINATION, AMENDMENTS
The Merger Agreement may be terminated before the Effective Time (a) by the
mutual consent of the Boards of Directors of Newco and the Company, or (b) by
either the Board of Directors of Newco or the Company if the Merger shall not
have been consummated on or before June 30, 1996; PROVIDED, HOWEVER, that
neither party may terminate the Merger Agreement pursuant to clause (b) if the
failure of such party to fulfill any of its obligations under the Merger
Agreement shall have been the reason the Merger shall not have been consummated
on or before said date.
Subject to applicable law, the Merger Agreement may be amended, modified and
supplemented by the mutual consent of the Company and Newco (as authorized by
each Board of Directors) at any time prior to the Effective Time.
NO THIRD-PARTY BENEFICIARIES
The Merger is being consummated expressly and solely for the benefit of the
parties thereto and no other person is entitled or shall be deemed to be
entitled to any benefits or rights thereunder, nor shall be authorized or
entitled to enforce any rights, claims or remedies thereunder.
18
<PAGE>
CERTAIN INFORMATION REGARDING NEWCO, THE MAJOR SHAREHOLDER
AND THE SURVIVING CORPORATION
Newco is a Delaware corporation organized on August 30, 1995 in connection
with the Merger. Newco's principal offices are located at 2959 N. Rock Road,
Wichita, Kansas 67226. The Major Shareholder is the sole shareholder of Newco.
The sole director and executive officer of Newco is William H. Hensley. Mr.
Hensley's principal occupation is to serve as Vice-President, General Counsel
and Secretary of the Major Shareholder.
Prior to the Merger, Newco will not have any significant assets or
liabilities (other than its rights and obligations in connection with the Merger
Agreement) and will not engage in any activities other than those incident to
its formation and the transactions contemplated by the Merger Agreement. At the
date of this Proxy Statement, the authorized capital stock of Newco consists of
1,000 shares of common stock, $.01 par value per share, all of which are issued
and outstanding and owned by the Major Shareholder.
The Major Shareholder, as the sole shareholder of Newco, and the Board of
Directors of Newco, have approved and adopted the Merger Agreement.
The Major Shareholder owns approximately 85% of the Company Stock.
Pursuant to the Merger Agreement, the Company will be the surviving
corporation in the Merger under the laws of Delaware. The Certificate of
Incorporation and By-Laws of the Company as in effect immediately prior to the
Effective Time will be the surviving corporation's Certificate of Incorporation
and By-Laws. The directors of the Company immediately prior to the Effective
Time will be the directors of the surviving corporation and the officers of the
Company immediately prior to the Effective Time will be the officers of the
surviving corporation. The surviving corporation will be wholly owned by the
Major Shareholder.
DESCRIPTION OF COMPANY STOCK
COMMON STOCK. Of the 10,000,000 shares of Common Stock, $.10 par value,
which the Company is authorized to issue, 5,000,000 shares were, as of November
3, 1995, outstanding and held by approximately 3,722 shareholders of record.
Holders of Company Stock are entitled to one vote per share on all matters
to be voted upon by the shareholders. Holders of Company Stock are entitled to
receive such dividends as may be declared from time to time by the Board out of
funds legally available therefor. In the event of liquidation, dissolution or
winding up of the Company, the holders of Company Stock are entitled to share
ratably in all assets remaining after payment of liabilities, have no preemptive
or conversion rights and are not subject to further call or assessment by the
Company. There are no redemption or sinking fund provisions applicable to the
Company Stock. The Company Stock currently outstanding is validly issued, fully
paid and nonassessable.
19
<PAGE>
The following table sets forth, from fiscal 1991 through December 30, 1995,
the high and low sales prices for the Company Stock. Bid prices represent
quotations by dealers making a market in the Company Stock and reflect
inter-dealer prices without adjustments for mark-ups, mark-downs or commissions
and may not necessarily represent actual transactions in the Company Stock.
Quarters that are marked in the table with an asterisk(*) indicate quarters that
were not priced in the Pink Sheets due to an absence of transactions in the
Company Stock.
RECENT MARKET PRICES
<TABLE>
<CAPTION>
HIGH LOW
----- ---------
<S> <C> <C>
1991
First Quarter to March 21......................................................... 1/2 1/16
First Quarter after March 21...................................................... * *
Second Quarter.................................................................... * *
Third Quarter..................................................................... * *
Fourth Quarter.................................................................... * *
1992
First Quarter..................................................................... * *
Second Quarter.................................................................... * *
Third Quarter..................................................................... * *
Fourth Quarter.................................................................... * *
1993
First Quarter..................................................................... * *
Second Quarter.................................................................... * *
Third Quarter..................................................................... * *
Fourth Quarter.................................................................... * *
1994
First Quarter..................................................................... * *
Second Quarter.................................................................... * *
Third Quarter..................................................................... * *
Fourth Quarter.................................................................... * *
1995
First Quarter..................................................................... * *
Second Quarter.................................................................... * *
Third Quarter..................................................................... * *
Fourth Quarter.................................................................... * *
</TABLE>
As of February 7, 1996, the off-pink sheets bid and asked prices for the
Company Stock were $.0625 and $.3125, respectively. Since March 21, 1991, the
Company Stock has not been priced in the Pink Sheets due to inactivity.
DIVIDENDS
The Company has never paid a cash dividend to its shareholders. Pursuant to
the DGCL, the Company is permitted to pay dividends only out of its surplus as
defined by such law or, if there is no such surplus, out of its net profits for
the fiscal year in which the dividend is declared and/or its net profits for the
preceding fiscal year (exclusive, in the case of the Company, of any depletion).
The Company has been prohibited by such law from paying dividends.
20
<PAGE>
BUSINESS OF THE COMPANY
OVERVIEW
The Company mines placer gold in Nome, Alaska. Historically, operations have
been conducted using floating, bucket-line dredges. The Company expects limited
dredge operations in 1995. The Company produced 14,173 net ounces of gold in
1994, 22,440 net ounces of gold in 1993, 17,965 net ounces of gold in 1992,
19,016 net ounces of gold in 1991, and 20,771 net ounces of gold in 1990, at a
net production cost of $376 per ounce in 1994, $280 per ounce in 1993, $306 per
ounce in 1992, $407 per ounce in 1991, and $415 per ounce in 1990.
Properties consist of approximately 14,500 acres in and adjacent to Nome. In
addition, the Company owns or has patented claims on approximately 10,400 acres
in the Fairbanks, Alaska area and approximately 3,000 acres in the Hogatza,
Alaska area.
During 1992-93, the Company undertook a pilot project to evaluate open pit
mining in the Nome area. Under this method of mining, pay gravel is removed
during the winter months when the ground is frozen. It is then processed the
following summer after natural thawing has occurred. The results of the initial
project were inconclusive. Consequently, the Company conducted a second test pit
during the 1993-94 winter. Processing of the stock-piled pay gravel from this
pilot project confirmed that this method of mining is viable. The Company plans
to move approximately 1.5 million cubic yards of dirt in 1995, about three times
as much as during 1994. Based on the results of past exploratory drilling, the
Company believes there may be various areas available on its properties to
sustain open pit mining for ten years.
TRANSACTIONS WITH AFFILIATES
ALASKA GOLD COMPANY
TRANSACTIONS WITH AFFILIATES
<TABLE>
<CAPTION>
NINE-MONTHS TWELVE-MONTHS
-------------- ------------------------------
1995 1994 1993
-------------- -------------- --------------
<S> <C> <C> <C>
Produced gold sold to Mueller.................................... $ -- $ 5,309,000 $ --
Gold received as royalties, sold to Mueller...................... 505,000 -- --
Management fees paid to Mueller.................................. 165,000 235,000 163,000
Management fees paid to Arava.................................... 73,800 87,000 108,000
Reimbursements to Mueller for Audit fees, Legal fees, Insurance,
etc............................................................. 216,000 321,000 246,000
Interest expense on borrowings from Mueller...................... 3,332,000 3,496,000 2,396,000
Interest payments to Mueller..................................... $ 259,000 $ 230,000 $ 3,207,000
<CAPTION>
SEPTEMBER 30, DECEMBER 31, DECEMBER 25,
1995 1994 1993
-------------- -------------- --------------
<S> <C> <C> <C>
Accounts receivable-due on demand from Arava..................... $ 183,000 $ 191,000 $ 200,000
Term loans and advances payable to Mueller, due on demand with
interest on principal only at the London Interbank Offering Rate
plus .75 percent................................................ 95,016,000 91,334,000 88,296,000
Notes payable to Mueller, due December 31, 2001:
7% Note dated February 28, 1994................................ 2,000,000 2,000,000 --
8.75% Note dated May 27, 1994.................................. 600,000 600,000 --
8.75% Note dated August 4, 1994................................ 800,000 800,000 --
8.75% Note dated April 3, 1995................................. 600,000 -- --
8.75% Note dated April 28, 1995................................ 900,000 -- --
Total notes payable to Mueller................................... $ 4,900,000 $ 3,400,000 $ --
</TABLE>
21
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The following table sets forth selected historical financial information for
the Company for each of the five years in the period ended December 31, 1994 and
for the nine months ended September 30, 1995 and September 24, 1994. The
following information should be read in conjunction with "Business of the
Company -- Management's Discussion and Analysis of Results of Operations and
Financial Condition" and the Consolidated Financial Statements and related Notes
included elsewhere in this Proxy Statement. The following information is not
necessarily indicative of future financial conditions or results of operations.
SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
NINE MONTHS ENDED YEAR ENDED
-------------------------- --------------------------------------------------------------
9/30/95 9/24/94 1994 1993 1992 1991 1990
------------- ----------- ----------- ---------- ----------- ----------- -----------
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
Sales...................... $ 3,542 $ 3,636 $ 5,537 $ 8,402 $ 6,712 $ 6,864 $ 8,444
Operating Income (loss).... (381) (1,515) (1,612) 20 556 (15,516) (3,704)
Net loss................... (2,535) (2,869) (3,505) (1,336) (747) (17,961) (9,225)
Net loss per share......... (0.51) (0.57) (0.70) (0.27) (0.15) (3.59) (1.85)
Total assets............... 9,036 8,300 6,714 2,551 4,635 3,424 15,366
Accumulated deficit........ (101,785) (98,614) (99,250) (95,745) (94,409) (93,662) (75,701)
Term loans and advances
payable to Mueller....... 95,016 91,011 91,334 88,296 89,106 85,609 82,747
Long-term debt............. 6,089 1,686 4,958 -- 7 7 26
Dividends
per share................ -- -- -- -- -- -- --
</TABLE>
22
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
RESPONSIBILITY FOR FINANCIAL STATEMENTS
Management has prepared and is responsible for the consolidated financial
statements and related financial information included in this Proxy Statement.
These financial statements were prepared in accordance with generally accepted
accounting principles which are consistently applied and appropriate in the
circumstances. The statements necessarily include amounts based on management's
best judgment and estimates.
The Company maintains accounting and other control systems, including
internal audits of its operations, to provide reasonable assurance that assets
are safeguarded and that the books and records reflect the authorized
transactions of the Company. Underlying the concept of reasonable assurance is
the premise that the cost of control should not exceed the benefit. Management
believes that the Company's accounting and other control systems appropriately
recognize this cost/benefit relationship.
The Company's independent accountants, Ernst & Young LLP, provide an
independent objective assessment of the degree to which management meets its
responsibility for fairness in financial reporting. They evaluate the Company's
system of internal accounting control in determining the nature and extent of
audit tests and perform such tests and other procedures as they deem necessary
to reach and express an opinion on the financial statements. The report of Ernst
& Young LLP appears on page F-2.
The Board is responsible for reviewing and monitoring the Company's
financial reports and accounting practices. The Board meets to discuss audit and
financial reporting matters with representatives of management and the
independent accountants. The independent accountants have direct access to the
Board.
PERFORMANCE IN 1994 COMPARED TO 1993
The Company's total sales decreased to $5,537,000 in 1994 from $8,402,000 in
1993. This decrease was attributable to a 37 percent decrease in gold production
to 14,173 ounces in 1994 from 22,440 in 1993, offset by a 3 percent increase in
the average selling price of gold to $386 per ounce in 1994 from $376 per ounce
in 1993. The decrease in gold production was attributable to: (a) operation of
the dredges in areas of marginal yield, (b) cessation of operations of Dredge 6
and (c) obtaining lesser yields from open pit operations in 1994 compared to
1993.
Cost of sales decreased to $6,332,000 in 1994 compared to $7,570,000 in
1993. This decrease was also attributable to decreased gold production. However,
production costs increased to $376 per ounce in 1994 compared to $280 per ounce
in 1993. This increase was principally due to declining yields in the areas
dredged in 1994 compared to 1993. General and administrative expenses of
$817,000 in 1994 remained consistent compared to $812,000 in 1993.
Interest expense increased to $3,549,000 in 1994 from $2,398,000 in 1993,
due to increases in interest rates and additional borrowings. The rate charged
on the Company's term loans and advances from Mueller is based on the London
Interbank Offering Rate ("LIBOR") plus .75 percent. At December 31, 1994, the
rate charged by Mueller on term loans and advances was 6.89 percent compared to
3.98 percent at December 25, 1993. Interest rates on additional borrowings made
in 1994 ranged from 7 percent to 8.75 percent.
The Company received other income of $1,656,000 in 1994 compared to
$1,042,000 in 1993. This increase was principally due to sales of land,
including recognition of profit of $503,000 on a land sale previously deferred
pending remediation of the site.
PERFORMANCE IN 1993 COMPARED TO 1992
The Company's total sales increased to $8,402,000 in 1993 from $6,712,000 in
1992. This increase was attributable to: (a) a 25 percent increase in gold
production to 22,440 ounces in 1993 from 17,965
23
<PAGE>
in 1992 and (b) a 9 percent increase in the average selling price of gold to
$376 per ounce in 1993 from $345 per ounce in 1992. Gold production from
dredging operations in 1993 remained consistent with 1992. The increase in
ounces produced was attributable to the open pit project which yielded 4,910
ounces.
Cost of sales increased to $7,570,000 in 1993 compared to $4,768,000 in
1992. Costs associated with the increase in production related to open pit
operations were responsible for the increase. In addition, the Company incurred
a $240,000 charge upon the cancellation of purchase commitments for equipment
related to open pit operations.
General and administrative expenses increased to $812,000 in 1993 compared
to $755,000 in 1992. This increase was principally due to increases in
management fees.
The Company recorded charges for restructuring of $633,000 in 1992 in
anticipation of abandoning dredge operations. No additional charges were
provided in 1993.
Interest expense decreased to $2,398,000 in 1993 from $2,790,000 in 1992,
due to a decrease in the interest rate. At December 25, 1993, the rate charged
by Mueller was 3.98 percent compared to 4.06 percent at December 26, 1992.
The Company received other income of $1,042,000 in 1993 compared to
$1,487,000 in 1992. The reduction in other income was due to a decrease in
royalty income.
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital requirements are subject to significant
fluctuations because of the seasonal nature of operations, operating costs and
the operating cycle of open pit mining. Total aggregate operating costs during
the first nine months of 1995 were approximately $5.0 million.
The Company's principal sources of funds are: (a) gold sales, (b) land
sales, (c) gravel sales, and (d) royalties. Due to the inherent uncertainties of
mineral extraction combined with fluctuations of gold prices which are subject
to worldwide factors, the Company cannot reasonably predict the amount of cash
realizable from the above-mentioned sources.
At December 31, 1994, the Company was indebted to Mueller for $94,734,000 in
notes, term loans and advances, including interest of $30,812,000. Payment of
term loans, advances and interest totaling $91,334,000 are due on demand. The
Company does not expect to be able to generate sufficient funds from operations
to repay such advances or such term loans. Mueller has provided no assurances
that it will not demand payment. To date, Mueller has not discussed
circumstances whereby it would demand payment on the credit facilities.
Moreover, Mueller has given no indication of "capping" advances to the Company
other than declining to guarantee that such advances will be made.
During 1994, Mueller advanced additional funds to the Company in the form of
three separate notes totaling $3,400,000. Principal on each of the notes is due
December 31, 2001. The notes are secured by interest in substantially all assets
of the Company. In addition, the Company borrowed $2,161,000 from a bank to
purchase equipment used in open pit mining operations. This note is payable in
quarterly installments of principal and interest through September, 1998. The
note is secured by the equipment purchased with proceeds. The note is also
guaranteed by Mueller. Mueller's guarantee is secured by a security interest in
substantially all assets of the Company. During the first nine months of 1995,
the Company borrowed an additional $1,500,000 from Mueller (the "Notes"). The
Notes include interest at eight and three-quarters percent (8.75%) per annum
payable quarterly beginning June 30, 1995. Principal on the Notes is due
December 21, 2001. The Notes are secured by an interest in substantially all
assets of the Company. Subsequent to the end of the third quarter, the Company
borrowed additional funds from Mueller with terms similar to the above Notes.
The continued viability of the Company as a going concern is dependent upon
its ability to generate sufficient working capital through future profitable
operations and/or sales of assets, including land owned by the Company, and to
maintain, or restructure its existing financing from Mueller in
24
<PAGE>
a manner acceptable to the Company. The Company has no current plans or
prospects for restructuring its existing financing from Mueller on terms
advantageous to the Company and acceptable to Mueller. The Company's ability to
attain and maintain profitable operations is also subject to adverse
fluctuations in the market price of gold. If the Company is unable to generate
or obtain sufficient working capital, or if demand is made for the payment of
the loans and advances made to it by Mueller and its predecessors in interest,
the Company's management may have no choice other than to file for protection
under the bankruptcy laws. In that event, it is likely that the Public
Shareholders would receive no distribution with respect to their shares of
Company Stock from the Company's bankruptcy estate.
At December 31, 1994, the Company did not have any significant commitments
for capital expenditures.
The Company has a restructuring reserve of $1,676,000 to provide for the
anticipated expenditures associated with cessation of dredging operations and
related costs. In addition, the Company has established an environmental reserve
of $1,800,000 to provide for anticipated expenditures of future remediation.
Timing of expenditures, and the source of funds to cover such expenditures from
both reserves, have not been determined.
From time to time, the Company has hedged fluctuations in the price of gold
by entering into futures contracts to minimize the risk of market fluctuations.
No such hedging transactions occurred in 1993 or 1994.
On August 29, 1994, the Company granted to Mueller an option to purchase
gold produced or received as royalties. Terms of the option include establishing
the method of pricing Mueller purchases as the average of the London PM price
for gold for the first ten days following shipment to the refiner. Sales to
Mueller for the year ended December 31, 1994 were $5,309,000.
IMPACT OF INFLATION
During the past three years, inflation has not had a significant impact on
the Company's operations.
RESULTS OF OPERATIONS FOR THE FIRST NINE MONTHS OF 1995
Activity through the third quarter consisted of excavation of pay gravel
from the open pit and operation of the wash plant to process pay gravel mined
during the preceding winter and spring.
During the first nine months of 1995, the Company's sales were $3,542,000
(9,199 ounces) compared to $3,636,000 (9,460 ounces) in 1994. Cost of sales
decreased to $3,347,000 in 1995 compared to $4,586,000 in 1994. Gold produced
increased in 1995 to 17,440 ounces for the first three quarters compared to
12,327 ounces for the same period in 1994. Gold inventory consisted of 9,323
ounces at the end of the quarter. The reduction in cost of sales is due to the
decrease in ounces sold as well as efficiencies gained in the open pit method of
mining. During 1994, the majority of produced ounces were mined by dredging. In
1995, all the production has been from the open pit method of mining.
The Company's open pit mining operations involve removing the overburden and
stockpiling pay gravel during the winter near the wash plant area. During the
summer, after natural thawing, the pay gravel is processed through the wash
plant and the gold recovered. The Company determined to hold most of its gold in
inventory until completion of the processing operations, which occurred after
the end of the third quarter. Thus, the amount of gold in inventory increased
over the nine month period. That gold has now been sold, and the net proceeds
have been applied towards the Company's existing debt obligations. At the end of
the fourth quarter of 1995, the Company's gold inventory was close to zero.
General and administrative expenses have remained constant in 1995 compared
to 1994. Total interest expense has increased in 1995 to $3,454,000 compared to
$2,362,000 in 1994. This increase is due to increased borrowings and increased
interest rates in 1995. Other income, net, increased to
25
<PAGE>
$1,300,000 for the first nine months of 1995 compared to $1,008,000 in the first
nine months of 1994. This increase is due to increases in gravel sales and
royalty income offset by a reduction in gains on land sales.
As of September 30, 1995, the Company was indebted to Mueller for
$95,016,000 in term loans and advances.
BENEFICIAL OWNERSHIP OF SHARES OF COMMON STOCK
OF THE COMPANY
BENEFICIAL OWNERSHIP
The following table sets forth, to the best of the Company's knowledge, the
beneficial ownership of voting securities, as of December 29, 1995, with respect
to (i) each person or group known to the Company to own more than 5% of the
outstanding shares of Company Stock and (ii) each director and executive officer
of the Company.
(a) SECURITY OWNERSHIP OF BENEFICIAL OWNERS
The security ownership of each person known by the Company to be the owner
of more than five percent (5%) of the Company Stock as of December 29, 1995 is
as follows:
<TABLE>
<CAPTION>
AMOUNT
NAME AND ADDRESS OF BENEFICIALLY
TITLE CLASS BENEFICIAL OWNER OWNED PERCENT OF CLASS
- ------------------------ ---------------------------- --------------------- -----------------------
<S> <C> <C> <C>
Common Stock $.10 Mueller Industries, Inc. 4,250,027 shares of Approximately 85%
Par Value 2959 N. Rock Road Wichita, Company Stock
KS 67226
</TABLE>
(b) SECURITY OWNERSHIP OF MANAGEMENT
As of December 29, 1995, no officer or director was the beneficial owner of
any shares of Company Stock. All of the Company's officers and directors as a
group own less than 1% of the outstanding common stock of the Major Shareholder.
CERTAIN TRANSACTIONS IN COMPANY STOCK
On May 5, 1995, Mueller Industries, Inc. purchased in a private transaction
27 shares of Company Stock at a price of $0.25 per share.
PROXY SOLICITATION
Proxies are being solicited by and on behalf of the Company. All expenses of
this solicitation, including the cost of preparing and mailing this Proxy
Statement, will be borne by the Company. In addition to solicitation by uses of
the mails, proxies may be solicited by directors, officers and employees of the
Company in person or by telephone, telegram or other means of communication.
Such directors, officers and employees will not be additionally compensated, but
may be reimbursed for out-of-pocket expenses in connection with such
solicitation. Arrangements will also be made with custodians, nominees and
fiduciaries for forwarding of proxy solicitation material to beneficial owners
of Company Stock held of record by such persons, and the Company may reimburse
such custodians, nominees and fiduciaries for reasonable expenses incurred in
connection therewith.
CURRENT INFORMATION: DELISTING AND DEREGISTRATION
After the Effective Time, the Company Stock will cease trading entirely,
registration of Company Stock under the Exchange Act will terminate and the
Company will cease filing reports with the Commission. Moreover, the Company
will be relieved of the obligation to comply with the proxy rules of Regulation
14A under Section 14 of the Exchange Act, and its officers, directors and 10%
shareholders will be relieved of the reporting requirements and "short-swing"
trading liability under Section 16 of the Exchange Act.
26
<PAGE>
INDEPENDENT AUDITORS
Representatives of Ernst & Young LLP, the Company's independent auditors,
are expected to be present at the Special Meeting and will have an opportunity
to make a statement should they desire to do so. Such representatives are also
expected to be available to respond to questions.
FUTURE SHAREHOLDER PROPOSALS
If the Merger is not consummated, any shareholder who wishes to present a
proposal for inclusion in the Proxy Statement for action at future Annual
Meetings of Shareholders must comply with the rules and regulations of the
Commission then in effect. The date by which such proposals must be received by
the Company for inclusion in the Company's Proxy Statement for the 1995 Annual
Meeting has not yet been determined. If the Merger is not consummated, the
Company will inform holders of the Company Stock of the date by which such
proposals must be received by the Company for inclusion in the Company's Proxy
Statement for the 1995 Annual Meeting of Shareholders.
OTHER BUSINESS
The Board does not intend to bring any other matters before the Special
Meeting and does not know of any matters to be brought before the Special
Meeting by others. If any other matter should come before the Special Meeting,
it is the intention of the persons named in the accompanying proxy to vote the
proxy on behalf of the shareholders they represent in accordance with their best
judgment.
27
<PAGE>
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Report of Independent Auditors............................................................................. F-2
Statements of Operations for the years ended December 31, 1994, December 25, 1993, and December 26, 1992... F-3
Balance Sheets as of December 31, 1994 and December 25, 1993............................................... F-4
Statements of Cash Flows for the years ended December 31, 1994, December 25, 1993, and December 26, 1992... F-5
Notes to Financial Statements.............................................................................. F-6
Data for the periods ended September 30, 1995 and September 24, 1994....................................... F-11
Pro Forma Financial Data................................................................................... F-15
Condensed Balance Sheet (Unaudited)...................................................................... F-16
Notes to Pro Forma Financial Data........................................................................ F-17
Book Value Per Share (Unaudited)......................................................................... F-17
</TABLE>
F-1
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders
Alaska Gold Company
We have audited the accompanying balance sheets of Alaska Gold Company as of
December 31, 1994 and December 25, 1993, and the related statements of
operations and cash flows of each of the three years in the period ended
December 31, 1994. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Alaska Gold Company at
December 31, 1994 and December 25, 1993, and the results of its operations and
its cash flows for each of the three years in the period ended December 31,
1994, in conformity with generally accepted accounting principles.
As discussed in Note 10 to the financial statements, the Company's
stockholders' deficit and significant debt payable to Mueller Industries, Inc.
raise substantial doubt about its ability to continue as a going concern. The
continued viability of the Company is dependent upon its ability to generate
sufficient working capital through future profitable operations and to maintain
or restructure its existing financing from Mueller Industries, Inc. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
ERNST & YOUNG LLP
Wichita, Kansas
February 8, 1995
F-2
<PAGE>
ALASKA GOLD COMPANY
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1994, DECEMBER 25, 1993, AND DECEMBER 26, 1992
<TABLE>
<CAPTION>
1994 1993 1992
--------- --------- ---------
(IN THOUSANDS, EXCEPT
PER SHARE DATA)
<S> <C> <C> <C>
Net sales....................................................................... $ 228 $ 8,402 $ 6,712
Sales to Mueller................................................................ 5,309 -- --
--------- --------- ---------
Total Sales................................................................. 5,537 8,402 6,712
Cost of sales................................................................... 6,332 7,570 4,768
General and administrative expenses............................................. 817 812 755
Restructuring charge............................................................ -- -- 633
--------- --------- ---------
Operating income (loss)..................................................... (1,612) 20 556
Interest expense:
Mueller....................................................................... (3,496) (2,396) (2,790)
Other......................................................................... (53) (2) --
Other income, net............................................................... 1,656 1,042 1,487
--------- --------- ---------
Loss before income taxes.................................................... (3,505) (1,336) (747)
Income tax expense.............................................................. -- -- --
--------- --------- ---------
Net loss........................................................................ $ (3,505) $ (1,336) $ (747)
--------- --------- ---------
--------- --------- ---------
Number of common shares of Company Stock outstanding............................ 5,000 5,000 5,000
--------- --------- ---------
--------- --------- ---------
Net loss per share.............................................................. $ (0.70) $ (0.27) $ (0.15)
--------- --------- ---------
--------- --------- ---------
</TABLE>
See accompanying notes to financial statements.
F-3
<PAGE>
ALASKA GOLD COMPANY
BALANCE SHEETS
AS OF DECEMBER 31, 1994 AND DECEMBER 25, 1993
ASSETS
<TABLE>
<CAPTION>
1994 1993
----------- ----------
(IN THOUSANDS, EXCEPT
SHARE DATA)
<S> <C> <C>
Current assets:
Cash................................................................................ $ 542 $ 350
Receivables......................................................................... -- 113
Gold inventories.................................................................... 233 61
Due from affiliate.................................................................. 191 200
Prepaid preparation cost............................................................ 1,568 199
Restricted cash..................................................................... -- 400
----------- ----------
Total current assets.............................................................. 2,534 1,323
Properties, net....................................................................... 4,155 809
Deferred preparation costs............................................................ -- 394
Other assets.......................................................................... 25 25
----------- ----------
Total assets...................................................................... $ 6,714 $ 2,551
----------- ----------
----------- ----------
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Current portion of long-term debt................................................... $ 486 $ --
Accounts payable.................................................................... 239 160
Accrued expenses.................................................................... 314 438
Deferred income..................................................................... -- 529
Term loans and advances payable to Mueller.......................................... 91,334 88,296
----------- ----------
Total current liabilities......................................................... 92,373 89,423
Long-term debt:
Notes payable to Mueller............................................................ 3,400 --
Other............................................................................... 1,558 --
Environmental reserve................................................................. 1,800 1,800
Restructuring reserve................................................................. 1,436 1,676
----------- ----------
Total liabilities................................................................. 100,567 92,899
----------- ----------
Stockholders' deficit:
Common stock, $.10 par value; 10,000,000 shares of Company Stock authorized;
5,000,000 shares of Company Stock issued and outstanding........................... 500 500
Additional paid-in capital.......................................................... 4,897 4,897
Accumulated deficit................................................................. (99,250) (95,745)
----------- ----------
Total stockholders' deficit....................................................... (93,853) (90,348)
----------- ----------
Commitments and contingencies......................................................... -- --
----------- ----------
Total liabilities and stockholders' deficit....................................... $ 6,714 $ 2,551
----------- ----------
----------- ----------
</TABLE>
See accompanying notes to financial statements.
F-4
<PAGE>
ALASKA GOLD COMPANY
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1994, DECEMBER 25, 1993 AND DECEMBER 26, 1992
<TABLE>
<CAPTION>
1994 1993 1992
--------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss...................................................................... $ (3,505) $ (1,336) $ (747)
Adjustments to reconcile net loss to net cash provided by (used in) operating
activities:
Interest not paid on Mueller borrowings..................................... 3,266 2,380 2,788
Depreciation................................................................ 572 242 184
Depreciation not charged to operations...................................... -- -- (64)
Gain on sales of land....................................................... (1,108) (266) (249)
Gain on disposals of machinery and equipment................................ (37) (76) (60)
Changes in assets and liabilities:
Receivables................................................................. 113 (113) --
Inventories................................................................. (172) 206 532
Capitalized preparation costs............................................... (975) 1,991 (1,731)
Other assets................................................................ 409 27 (260)
Current liabilities......................................................... (574) 93 622
Other liabilities........................................................... (240) (24) 633
Other, net.................................................................. -- (32) --
--------- --------- ---------
Net cash provided by (used in) operating activities....................... (2,251) 3,092 1,648
--------- --------- ---------
Cash flows from investing activities:
Capital expenditures.......................................................... (3,920) (224) (21)
Proceeds from sales of properties............................................. 1,147 347 612
--------- --------- ---------
Net cash provided by (used in) investing activities....................... (2,773) 123 591
--------- --------- ---------
Cash flows from financing activities:
Net principal repayments and advances from Mueller............................ (228) (3,190) 709
Issuance of notes payable to Mueller.......................................... 3,400 -- --
Issuance of other long-term debt.............................................. 2,161 -- --
Principal repayments on advances from affiliates.............................. -- -- (2,780)
Repayment of long-term debt................................................... (117) -- (14)
--------- --------- ---------
Net cash provided by (used in) financing activities....................... 5,216 (3,190) (2,085)
--------- --------- ---------
Increase in cash................................................................ 192 25 154
Cash at beginning of year....................................................... 350 325 171
--------- --------- ---------
Cash at end of year............................................................. $ 542 $ 350 $ 325
--------- --------- ---------
--------- --------- ---------
</TABLE>
For supplemental disclosures of cash flow information and financing activities,
see notes 1, 5 and 9.
See accompanying notes to financial statements.
F-5
<PAGE>
ALASKA GOLD COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994, DECEMBER 25, 1993 AND DECEMBER 26, 1992
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION AND BASIS OF PRESENTATION
Alaska Gold Company (the "Company") mines placer gold deposits in the State
of Alaska and is an 85 percent owned subsidiary of Mueller Industries, Inc.
("Mueller").
GOLD INVENTORIES
Inventories of gold are carried at the lower of average cost or market.
Costs include materials, labor costs, and mining costs including depreciation.
MINE PREPARATION COSTS
Expenditures incurred in preparation and excavation of the open pit and
extracting gold-bearing gravel from the pit are classified as prepaid
preparation costs. These expenditures are capitalized as inventory when the
gold-bearing material is processed through the wash plant the following year.
Costs also include test drilling and contractor charges associated with all
mining functions.
Expenditures related to the thawing of gold-bearing gravel and stripping of
overburden in preparation for dredging operations are classified as deferred
preparation costs, and are charged to the cost of production of gold inventories
on the units-of-production method based upon average actual costs incurred.
Costs charged to production are based upon the quantity of gravel dredged which
is determined by engineering estimates performed each year. Expenditures
relating to preparation of the dredges for the following operating season are
deferred and charged to operations of that season. At December 31, 1994, no
expenditures have been deferred related to dredging operations.
PROPERTIES
Depreciation of machinery and equipment is provided on the straight-line
basis over estimated useful lives ranging from three to seven years.
Maintenance, minor repairs, and renewals are charged to operations as incurred.
Major repairs and renewals are capitalized and charged against future
operations.
Upon retirement or sale, the cost of the assets disposed of and the related
accumulated depreciation are eliminated from the accounts, and any resulting
gain or loss is recognized in current operations.
INCOME TAXES
The Company is included in Mueller's consolidated federal income tax return.
The Company and Mueller have entered into an agreement for the allocation of
federal and state income taxes, the general result of which is to have the tax
liability of the Company determined on a stand-alone basis. The Company accounts
for income taxes under the liability method required by SFAS No. 109, ACCOUNTING
FOR INCOME TAXES.
STATEMENT OF CASH FLOWS
For purposes of the statement of cash flows, temporary investments with a
maturity of three months or less are considered to be cash equivalents.
RECLASSIFICATION
Certain amounts in the 1993 and 1992 financial statements have been
reclassified to conform with the 1994 presentation.
2. GOLD INVENTORIES
Gold inventories at December 31, 1994 and December 25, 1993, consisted of
717 and 217 troy ounces, respectively.
F-6
<PAGE>
ALASKA GOLD COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1994, DECEMBER 25, 1993 AND DECEMBER 26, 1992
3. PROPERTIES
Properties are as follows (in thousands):
<TABLE>
<CAPTION>
1994 1993
--------- ---------
<S> <C> <C>
Land and land improvements............................................ $ 207 $ 209
Machinery and equipment............................................... 5,992 2,073
--------- ---------
Total properties, at cost......................................... 6,199 2,282
Less accumulated depletion and depreciation........................... 2,044 1,473
--------- ---------
$ 4,155 $ 809
--------- ---------
--------- ---------
</TABLE>
4. TERM LOANS, AND ADVANCES PAYABLE TO MUELLER
At December 31, 1994 and December 25, 1993, the Company had $23,753,000 in
term loans owed to Mueller. At December 31, 1994 and December 25, 1993, the
Company also had advances payable to Mueller of $67,581,000 and $64,543,000,
respectively, including unpaid interest amounting to $30,812,000 and
$27,546,000. The term loans and advances bear interest, on principal only, at
the London Interbank Offering Rate ("LIBOR") plus .75 percent. The interest rate
at December 31, 1994 was 6.89 percent.
Payment of the term loans and advances is due on demand and, accordingly,
the balance due is classified as a current liability. The advances have been
used by the Company to meet operating costs and to finance working capital
requirements. The Company does not currently expect to be able to generate
sufficient funds from operations to fully repay the advances or term loans, if
payment were demanded by Mueller.
5. LONG-TERM DEBT
Long-term debt consists of the following (in thousands):
<TABLE>
<CAPTION>
1994 1993
--------- ---------
<S> <C> <C>
7% Note Dated February 28, 1994 to Mueller............................ $ 2,000 $ --
8.75% Note dated May 27, 1994 to Mueller.............................. 600 --
8.75% Note dated August 4, 1994 to Mueller............................ 800 --
8.5% Note dated September 19, 1994 to bank............................ 2,044 --
--------- ---------
Total long-term debt.............................................. 5,444 --
Less current portion.................................................. 486 --
--------- ---------
$ 4,958 $ --
--------- ---------
--------- ---------
</TABLE>
During 1994, Mueller advanced funds to the Company in the form of three
separate Notes totaling $3,400,000. Interest on the Notes is payable quarterly.
Principal on each of the Notes is due December 31, 2001. The Notes are secured
by an interest in substantially all assets of the Company.
In 1994, the Company used proceeds of the 8.5 percent bank Note to purchase
equipment. This Note is payable in quarterly installments of principal and
interest through September, 1998. Annual maturities are $486,000 in 1995,
$528,000 in 1996, $575,000 in 1997 and $455,000 in 1998. The Note is secured by
the equipment purchased with the proceeds. The Note is also guaranteed by
Mueller. Mueller's guarantee is secured by a security interest in substantially
all assets of the Company.
Interest paid on the above Notes plus interest paid on term loans and
advances payable to Mueller was $274,000 in 1994, $3,206,000 in 1993, and
$2,004,000 in 1992.
F-7
<PAGE>
ALASKA GOLD COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1994, DECEMBER 25, 1993 AND DECEMBER 26, 1992
6. STOCKHOLDERS' DEFICIT
Under the Delaware General Corporation Law, the Company is permitted to pay
dividends only out of surplus (as defined by such law) or, if there is no such
surplus, out of net profits for the fiscal year in which the dividend is
declared and/or net profits for the preceding fiscal year (before deducting
depletion expense on mineral properties). At December 31, 1994 and December 25,
1993, the Company was prohibited by such law from paying dividends.
During 1994, 1993, and 1992, the accumulated deficit increased by
$3,505,000, $1,336,000 and $747,000, reflecting the net loss for the respective
years.
7. COMMITMENTS AND CONTINGENCIES
The Company is subject to environmental standards imposed by federal, state,
and local environmental laws and regulations. Expenditures for environmental
matters were $425,000 in 1994 and were not significant during 1993, or 1992. To
provide for future estimated remediation costs, the Company established a
reserve of $1,800,000 in 1991. The timing of expenditures for this remediation
has not been determined. No charges have been applied against this reserve in
1994, 1993 or 1992. In the opinion of management, the outcome of any
environmental proceedings will not materially affect the overall financial
position of the Company.
8. OTHER INCOME
"Other income, net" included in the statement of operations consists of the
following (in thousands):
<TABLE>
<CAPTION>
1994 1993 1992
--------- --------- ---------
<S> <C> <C> <C>
Gain on sales of land.......................................... $ 1,108 $ 266 $ 249
Royalty income................................................. 246 316 690
Sales of waste gravel.......................................... 53 321 229
Interest income................................................ 49 45 34
Mineral exploration leases..................................... 163 18 39
Gain on disposals of machinery and equipment................... 37 76 60
Other, net..................................................... -- -- 186
--------- --------- ---------
$ 1,656 $ 1,042 $ 1,487
--------- --------- ---------
--------- --------- ---------
</TABLE>
At December 25, 1993 the Company had deferred $529,000 of income on the sale
of 4.9 acres of land pending resolution of environmental matters. During 1994,
remediation of the site was completed and portions of the sale proceeds
previously held in escrow, were paid to the Company. The deferred amount less a
portion of the remediation costs, resulted in a $503,000 gain which is included
in gain on sales of land in 1994.
F-8
<PAGE>
ALASKA GOLD COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1994, DECEMBER 25, 1993 AND DECEMBER 26, 1992
9. INCOME TAXES
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets are presented below (in thousands):
Deferred tax assets:
<TABLE>
<CAPTION>
1994 1993
---------- ----------
<S> <C> <C>
Net operating loss carry forwards.................................. $ 2,303 $ 2,620
Mining expenses.................................................... 3,163 4,133
Other accruals and reserves........................................ 1,138 1,571
Property, plant and equipment...................................... 101 213
---------- ----------
Total deferred tax assets........................................ 6,705 8,537
Less valuation allowance........................................... (6,705) (8,537)
---------- ----------
Net deferred tax assets............................................ $ -- $ --
---------- ----------
---------- ----------
</TABLE>
During 1994 and 1993, in accordance with the Company's tax sharing agreement
with Mueller, no income taxes were provided. There were no income taxes paid or
refunded during the year.
10. GOING CONCERN AND RESTRUCTURING CHARGE
The Company's stockholders' deficit and significant debt payable to Mueller
(see Notes 4, 5 and 6) raise substantial doubt about its ability to continue as
a going concern. The continued viability of the Company is dependent upon its
ability to generate sufficient working capital through future profitable
operation and sales of idle or obsolete assets, including land that the Company
does not intend to mine, and to maintain, or restructure its existing financing
from Mueller in a manner acceptable to the Company and Mueller. In 1993,
management of the Company decided to discontinue dredging operations after the
extraction of previously thawed fields and adjacent fields that are naturally
thawed. During 1994, the Company performed a pilot project of mining by the open
pit method. Management determined that the results of the open pit pilot project
were sufficient to justify further open pit mining on a larger scale. If open
pit mining is not successful, gold production by the Company could cease and
future operations would then consist primarily of land management. The Company
would continue leasing mining properties to others, selling gravel and selling
real estate.
To provide for costs associated with restructuring the method of operations
to an alternative form, the Company established a restructuring reserve in 1991.
In 1992, the Company increased its restructuring reserve by charging an
additional $633,000 to operations. The purpose of this reserve is to provide for
anticipated expenditures associated with cessation of the dredging operations
including dismantling and scrapping the remaining dredges. During 1994, $24,000
was charged against this reserve. The timing of expenditures for the remaining
balance of $1,676,000 is undetermined, except for $240,000 which is classified
as current.
11. MINE PREPARATION COSTS
Substantially all mining costs associated with the wintertime excavation of
an open pit are classified as prepaid until the pay gravel is processed in the
following year. These expenditures, which totaled $1,568,000 in 1994 and
$199,000 in 1993, are capitalized as inventory when the processing occurs. In
1994, $394,000 of mine preparation costs associated with dredging was charged to
production. At December 31, 1994, no additional amounts remain deferred for
preparation costs on dredging operations.
F-9
<PAGE>
ALASKA GOLD COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1994, DECEMBER 25, 1993 AND DECEMBER 26, 1992
12. RELATED PARTY TRANSACTIONS
On August 29, 1994, the Company granted to Mueller an option to purchase
gold produced or received as royalties. Terms of the option include establishing
the method of pricing Mueller purchases, as the average of the London PM price
for gold for the first ten days following shipment to the refiner. Sales to
Mueller for the year ended December 31, 1994 were $5,309,000.
The Company has transactions, not otherwise disclosed in the financial
statements, with affiliates including the payment of management fees and
reimbursement of insurance and other expenses. Management fees paid to Arava
Natural Resources Company, Inc., a wholly-owned subsidiary of Mueller, were
$87,000 in 1994, $108,000 in 1993, and $120,000 in 1992. Management fees paid to
Mueller were $235,000 in 1994, $163,000 in 1993, and $110,000 in 1992. Payments
to Mueller for reimbursement of insurance and other expenses were $321,000 in
1994, $246,000 in 1993, and $250,000 in 1992.
F-10
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ALASKA GOLD COMPANY
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE QUARTER ENDED FOR THE NINE MONTHS ENDED
---------------------------- ----------------------------
SEPTEMBER 30, SEPTEMBER 24, SEPTEMBER 30, SEPTEMBER 24,
1995 1994 1995 1994
------------- ------------- ------------- -------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Net sales........................................... $ 3,033 $ 7 $ 3,542 $ 220
Sales to Mueller.................................... -- 3,416 -- 3,416
------------- ------------- ------------- -------------
Total sales......................................... 3,033 3,423 3,542 3,636
Cost of sales....................................... 2,035 3,685 3,347 4,586
General and administrative expenses................. 176 210 576 565
------------- ------------- ------------- -------------
Operating income (loss)......................... 822 (472) (381) (1,515)
Interest expense:
Mueller........................................... (1,099) (910) (3,332) (2,356)
Other............................................. (38) (6) (122) (6)
Other income, net................................. 796 383 1,300 1,008
------------- ------------- ------------- -------------
Income (loss) before income taxes............... 481 (1,005) (2,535) (2,869)
Income tax expense.................................. -- -- -- --
------------- ------------- ------------- -------------
Net income (loss)................................... $ 481 $ (1,005) $ (2,535) $ (2,869)
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Number of common shares outstanding................. 5,000 5,000 5,000 5,000
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Net income (loss) per share......................... $ 0.10 $ (0.20) $ (0.51) $ (0.57)
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
See accompanying notes to financial statements.
F-11
<PAGE>
ALASKA GOLD COMPANY
BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
SEPTEMBER 30, 1995 DECEMBER 31, 1994
------------------ -----------------
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............................................. $ 964 $ 542
Gold inventory........................................................ 2,496 233
Due from affiliate.................................................... 183 191
Prepaid preparation costs............................................. 353 1,568
---------- -----------------
Total current assets................................................ 3,996 2,534
Property and equipment, net............................................. 5,015 4,155
Other assets............................................................ 25 25
---------- -----------------
$ 9,036 $ 6,714
---------- -----------------
---------- -----------------
<CAPTION>
LIABILITIES AND STOCKHOLDERS' DEFICIT
<S> <C> <C>
Current liabilities:
Current portion of long-term debt..................................... $ 496 $ 486
Accounts payable...................................................... 260 239
Accrued expenses...................................................... 327 314
Term loans and advances payable to Mueller............................ 95,016 91,334
---------- -----------------
Total current liabilities........................................... 96,099 92,373
Long-term debt:
Notes payable to Mueller.............................................. 4,900 3,400
Other................................................................. 1,189 1,558
Environmental reserve................................................... 1,800 1,800
Restructuring reserve................................................... 1,436 1,436
---------- -----------------
Total liabilities................................................... 105,424 100,567
---------- -----------------
Stockholders' deficit:
Common stock, $.10 par value; 10,000,000 shares authorized; 5,000,000
shares issued and outstanding........................................ 500 500
Additional paid-in capital............................................ 4,897 4,897
Accumulated deficit................................................... (101,785) (99,250)
---------- -----------------
Total stockholders' deficit......................................... (96,388) (93,853)
---------- -----------------
Commitments and contingencies........................................... -- --
---------- -----------------
$ 9,036 $ 6,714
---------- -----------------
---------- -----------------
</TABLE>
See accompanying notes to financial statements.
F-12
<PAGE>
ALASKA GOLD COMPANY
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED
--------------------------------------
SEPTEMBER 30, 1995 SEPTEMBER 24, 1994
------------------ ------------------
(IN THOUSANDS)
<S> <C> <C>
Cash flows from operating activities:
Net loss............................................................. $ (2,535) $ (2,869)
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities:
Interest not paid on Mueller borrowings............................ 3,073 2,309
Depreciation....................................................... 798 219
Gain on sales of land.............................................. (149) (637)
Changes in assets and liabilities:
Receivables........................................................ -- 113
Inventories........................................................ (2,263) (1,160)
Due from affiliate................................................. 8 63
Prepaid preparation costs.......................................... 1,215 249
Current liabilities................................................ 34 341
------- -------
Net cash provided by (used in) operating activities.............. 181 (1,372)
------- -------
Cash flows from investing activities:
Capital expenditures................................................. (1,659) (3,697)
Proceeds from sales of properties.................................... 150 639
------- -------
Net cash used in investing activities............................ (1,509) (3,058)
------- -------
Cash flows from financing activities:
Issuance of other long-term debt..................................... -- 2,162
Net principal repayments and advances from Mueller................... 609 406
Repayment of other long-term debt.................................... (359) --
Issuance of notes payable to Mueller................................. 1,500 3,400
------- -------
Net cash provided by financing activities........................ 1,750 5,968
------- -------
Increase in cash and cash equivalents.................................. 422 1,538
Cash and cash equivalents at the beginning of the period............... 542 350
------- -------
Cash and cash equivalents at the end of the period..................... $ 964 $ 1,888
------- -------
------- -------
</TABLE>
See accompanying notes to financial statements.
F-13
<PAGE>
ALASKA GOLD COMPANY
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 -- FINANCIAL STATEMENTS
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. This information should be read in conjunction
with the Company's Annual Report on Form 10-K, including the annual financial
statements incorporated therein.
The accompanying unaudited interim financial statements include all
adjustments which are, in the opinion of management, necessary to a fair
statement of the results for the interim periods presented. Certain amounts in
the 1994 quarterly financial statements have been reclassified to conform with
current period presentation.
Operations of the Company are seasonal in nature because of the climatic
conditions in Alaska. In addition, the Company sells gold based upon gold market
conditions and cash needs and does not necessarily sell gold in any given
period, quarter, or year. Accordingly, the results of operations for any interim
period are not necessarily indicative of the results for any other period or for
a full year.
NOTE 2 -- SALES TO MUELLER
On August 29, 1994, the Company granted to Mueller, the Company's majority
stockholder, an option to purchase gold produced or received as royalties. Terms
of the option include establishing the method of pricing as the average of the
London PM price for gold for the first ten days following shipment to the
refiner. During the first nine months of 1995, no produced gold was sold to
Mueller. However, in February 1995, Mueller purchased $505,000 of gold received
as royalties by the Company.
NOTE 3 -- PREPAID PREPARATION COSTS
Expenditures related to open pit mining and removal of overburden and pay
gravel in preparation for wash plant operations are classified as prepaid
preparation costs. These expenditures are capitalized as inventory when the
gold-bearing material is processed through the wash plant.
NOTE 4 -- COMMITMENTS AND CONTINGENCIES
The Company is subject to normal environmental standards imposed by federal,
state and local environmental laws and regulations. Management believes that the
outcome of any environmental proceedings will not materially affect the overall
financial position of the Company.
NOTE 5 -- PROPOSED MERGER TRANSACTION
On September 1, 1995, the Company's Board of Directors approved an Agreement
and Plan of Merger (the Plan). Under the Plan, all of the Company's common stock
will be acquired by the majority stockholder, for cash. The Company expects this
merger transaction to be completed by the end of this year. The proposed merger
will be voted upon by the stockholders of the Company. Mueller, the holder of
approximately 85 percent of the outstanding shares, has expressed its intent of
voting in favor of the merger.
NOTE 6 -- NOTES PAYABLE TO MUELLER
During the first nine months of 1995, the Company borrowed an additional
$1,500,000 from Mueller (the Notes). The Notes include interest at eight and
three quarters percent (8.75%) payable quarterly beginning June 30, 1995.
Principal on the Notes is due December 31, 2001, and is secured by an interest
in substantially all assets of the Company. Subsequent to the end of the third
quarter, the Company borrowed an additional $900,000 from Mueller with terms
similar to the above Notes.
F-14
<PAGE>
PRO FORMA FINANCIAL DATA
The following unaudited pro forma condensed balance sheet as of December 31,
1994 and September 30, 1995 gives effect to the Merger of Newco with and into
Alaska Gold. The pro forma adjustments related to the pro forma condensed
balance sheet are computed assuming the Merger was consummated as of the balance
sheet dates presented. The pro forma information is based on the historical
financial statements of Alaska Gold giving effect to the transaction under the
assumptions and adjustments in the accompanying notes to the pro forma financial
data.
The pro forma statements have been prepared based upon the balance sheet of
Alaska Gold as of December 31, 1994 and September 30, 1995. These pro forma
statements may not be indicative of the results that actually would have
occurred if the combination had been in effect on the dates indicated or which
may be obtained in the future. The pro forma financial data should be read in
conjunction with the audited financial statements of Alaska Gold contained
elsewhere herein.
F-15
<PAGE>
ALASKA GOLD COMPANY
PRO FORMA CONDENSED BALANCE SHEET
The following balance sheet presents the pro forma effect of the proposed
transaction. The proposed transaction results in no significant change to
capitalization. The effect on the statements of income and cash flow and the
ratio of fixed charges is immaterial and, therefore, is not presented.
ASSETS
<TABLE>
<CAPTION>
SEPTEMBER 30, 1995 DECEMBER 31, 1994
----------------------------------- ------------------------------------
PRO FORMA PRO PRO FORMA
HISTORICAL ADJUSTMENTS FORMA HISTORICAL ADJUSTMENTS PRO FORMA
---------- ----------- -------- ---------- ----------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Current assets...................... $ 3,996 $ 13(3) $ 4,009 $ 2,534 $ 13(3) $ 2,547
Properties, net..................... 5,015 -- 5,015 4,155 -- 4,155
Other assets........................ 25 -- 25 25 -- 25
---------- ----- -------- ---------- ----- ---------
$ 9,036 $ 13 $ 9,049 $ 6,714 $ 13 $ 6,727
---------- ----- -------- ---------- ----- ---------
---------- ----- -------- ---------- ----- ---------
LIABILITIES & STOCKHOLDERS' DEFICIT
Current term loans and
advances payable
to Mueller......................... $ 95,016 -$- $ 95,016 $ 91,334 -$- $ 91,334
Other current liabilities........... 1,083 -- 1,083 1,039 -- 1,039
---------- ----- -------- ---------- ----- ---------
Total current liabilities......... 96,099 -- 96,099 92,373 -- 92,373
Long-term debt:
Notes payable to Mueller.......... 4,900 -- 4,900 3,400 -- 3,400
Other............................. 1,189 -- 1,189 1,558 -- 1,558
Other Noncurrent liabilities........ 3,236 -- 3,236 3,236 -- 3,236
Stockholders' deficit............... (96,388) 13(3) (96,375) (93,853) 13(3) (93,840)
---------- ----- -------- ---------- ----- ---------
$ 9,036 $ 13 $ 9,049 $ 6,714 $ 13 $ 6,727
---------- ----- -------- ---------- ----- ---------
---------- ----- -------- ---------- ----- ---------
</TABLE>
See Notes to Pro Forma Financial Data
F-16
<PAGE>
ALASKA GOLD COMPANY
NOTES TO PRO FORMA FINANCIAL DATA
1. BASIS OF PRESENTATION
The accompanying pro forma condensed balance sheet as of September 30, 1995
and December 31, 1994 have been prepared assuming the transactions described
below occurred as of the balance sheet date presented. The pro forma condensed
balance sheets do not purport to be indicative of the financial position which
actually would have occurred had the transactions described below occurred at an
earlier date, or which may be expected to occur in the future. These pro forma
condensed balance sheets should be read in conjunction with the historical
financial statements of the Company included elsewhere in this Proxy Statement.
2. PRO FORMA TRANSACTIONS
The accompanying pro forma condensed balance sheets have been prepared as if
the Merger Agreement was effective as of the balance sheet dates presented.
Pursuant to the Merger Agreement, the Company will, among other things, (i)
merge with Newco, and (ii) purchase all outstanding common stock except the
common stock owned by Mueller, which will result in the Company becoming a
wholly owned subsidiary of Mueller.
3. PRO FORMA ADJUSTMENTS TO THE HISTORICAL FINANCIAL STATEMENTS
(a) Adjustments reflect the following:
<TABLE>
<C> <S> <C>
- Capitalization of Mueller Acquisition Company with $250 thousand cash.... $ 250
- Purchase of Minority Interest shares of Company Stock for an aggregate (187)
price of $187 thousand..................................................
- Expenses related to the proposed transaction estimated at $50 thousand... (50)
---------
$ 13
---------
---------
</TABLE>
<TABLE>
<CAPTION>
BOOK VALUE PER SHARE
--------------------------------------------------------
DECEMBER 31, DECEMBER 25, SEPTEMBER 30, SEPTEMBER 24,
1994 1993 1995 1994
------------ ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
a. Actual Shares of Company Stock 5,000,000 5,000,000 5,000,000 5,000,000
Outstanding..........................
b. Total Stockholders' deficit $(000).... $ (93,853) $ (90,348) $ (96,388) $ (93,217)
------------ ------------ ------------- -------------
c. Book Value per share (b/a)............ $ (18.771) $ (18.070) $ (19.278) $ (18.643)
------------ ------------ ------------- -------------
------------ ------------ ------------- -------------
</TABLE>
F-17
<PAGE>
ANNEX A
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
ALASKA GOLD COMPANY,
MUELLER INDUSTRIES, INC.
AND
MUELLER ACQUISITION CORPORATION
DATED AS OF SEPTEMBER 1, 1995
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ARTICLE I
THE MERGER
<S> <C> <C> <C>
SECTION 1.1. Meeting of Alaska Gold's Stockholders; Proxy Statement; Schedule 13E-3.......... A-4
1.2. The Merger...................................................................... A-5
1.3. Conversion of Outstanding Shares................................................ A-5
1.4. Surrender and Exchange.......................................................... A-6
1.5. Certificate of Incorporation.................................................... A-6
1.6. By-Laws......................................................................... A-6
1.7. Directors and Officers.......................................................... A-6
1.8. Stock Transfer Books............................................................ A-6
<CAPTION>
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF ALASKA GOLD
<S> <C> <C> <C>
SECTION 2.1. Corporate Organization.......................................................... A-6
2.2. Capitalization.................................................................. A-7
2.3. Authorization and Validity of Agreement......................................... A-7
2.4. No Conflict or Violation........................................................ A-7
2.5. Consents and Approvals.......................................................... A-7
<CAPTION>
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF MUELLER ACQUISITION
<S> <C> <C> <C>
SECTION 3.1. Corporate Organization.......................................................... A-7
3.2. Subsidiaries and Equity Investments............................................. A-7
3.3. Authorization and Validity of Agreement......................................... A-8
3.4. No Conflict or Violation........................................................ A-8
3.5. Consents and Approvals.......................................................... A-8
<CAPTION>
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF MUELLER
<S> <C> <C> <C>
SECTION 4.1. Corporate Organization.......................................................... A-8
4.2. Title to Cancelled Shares....................................................... A-8
4.3. Authorization and Validity of Agreement......................................... A-8
4.4. No Conflict or Violation........................................................ A-8
<CAPTION>
ARTICLE V
COVENANT OF ALASKA GOLD
<S> <C> <C> <C>
SECTION 5.1. Vote............................................................................ A-9
<CAPTION>
ARTICLE VI
COVENANTS OF MUELLER ACQUISITION
<S> <C> <C> <C>
SECTION 6.1. Conduct of Mueller Acquisition.................................................. A-9
6.2. Access to Information........................................................... A-9
6.3. Other Fees and Expenses......................................................... A-9
</TABLE>
A-1
<PAGE>
<TABLE>
<CAPTION>
ARTICLE VII
COVENANTS OF MUELLER
<S> <C> <C> <C>
SECTION 7.1. Vote............................................................................ A-9
7.2. No Sale or Disposition; Waiver.................................................. A-10
<CAPTION>
ARTICLE VIII
OTHER AGREEMENTS
<S> <C> <C> <C>
SECTION 8.1. Best Efforts.................................................................... A-10
8.2. Notification of Certain Matters................................................. A-10
8.3. Further Assurances.............................................................. A-10
<CAPTION>
ARTICLE IX
CONDITIONS TO THE MERGER
<S> <C> <C> <C>
SECTION 9.1. Conditions to the Obligations of Each Party..................................... A-10
9.2. Conditions to the Obligation of Alaska Gold..................................... A-11
9.3. Conditions to the Obligation of Mueller Acquisition............................. A-11
<CAPTION>
ARTICLE X
TERMINATION
<S> <C> <C> <C>
SECTION 10.1. Termination..................................................................... A-12
10.2. Effect of Termination........................................................... A-12
<CAPTION>
ARTICLE XI
MISCELLANEOUS
<S> <C> <C> <C>
SECTION 11.1. Notices......................................................................... A-12
11.2. Survival........................................................................ A-12
11.3. Amendment....................................................................... A-13
11.4. Waiver.......................................................................... A-13
11.5. Successors and Assigns.......................................................... A-13
11.6. Governing Law................................................................... A-13
11.7. Integration..................................................................... A-13
11.8. Headings and References......................................................... A-13
11.9. Counterparts; Effectiveness..................................................... A-13
</TABLE>
A-2
<PAGE>
INDEX TO DEFINED TERMS
<TABLE>
<CAPTION>
DEFINED TERM WHERE DEFINED
- ------------------------------------------------------------------------------------------------- ---------------
<S> <C>
Agreement........................................................................................ Introduction
Alaska Gold...................................................................................... Introduction
Cancelled Shares................................................................................. Section 1.3(a)
Certificate of Merger............................................................................ Section 1.2(b)
Common Stock..................................................................................... Section 2.2
Delaware Law..................................................................................... Section 1.2(a)
Effective Time................................................................................... Section 1.2(b)
Exchange Act..................................................................................... Section 1.1(b)
HSR Act.......................................................................................... Section 2.5
Merger........................................................................................... Recitals
Merger Consideration............................................................................. Section 1.3(a)
Mueller.......................................................................................... Introduction
Mueller Acquisition.............................................................................. Introduction
Paying Agent..................................................................................... Section 1.4(a)
Proxy Statement.................................................................................. Section 1.1(b)
SEC.............................................................................................. Section 1.1(b)
Schedule 13E-3................................................................................... Section 1.1(b)
Shares........................................................................................... Section 1.3(a)
Special Meeting.................................................................................. Section 1.1(a)
Surviving Corporation............................................................................ Section 1.2(a)
</TABLE>
A-3
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of September 1, 1995 (this
"AGREEMENT") by and among ALASKA GOLD COMPANY, a Delaware corporation ("ALASKA
GOLD"), MUELLER ACQUISITION CORPORATION, a Delaware corporation ("MUELLER
ACQUISITION"), and MUELLER INDUSTRIES, INC., a Delaware Corporation ("MUELLER").
WHEREAS, Mueller Acquisition is wholly owned by Mueller;
WHEREAS, Mueller owns shares of common stock of Alaska Gold;
WHEREAS, the parties hereto desire to effect the merger of Mueller
Acquisition with and into Alaska Gold (the "MERGER") pursuant to the terms of
this Agreement;
WHEREAS, upon the consummation of the Merger, each share of common stock of
Mueller Acquisition will be converted into and become one share of common stock
of the surviving corporation; and
WHEREAS, the Board of Directors of each of Alaska Gold and Mueller
Acquisition have determined that the Merger contemplated hereby is fair to and
in the best interests of Alaska Gold and its shareholders and Mueller
Acquisition and its sole shareholder;
NOW THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the parties hereto agree as follows:
ARTICLE I
THE MERGER
SECTION 1.1. MEETING OF ALASKA GOLD'S STOCKHOLDERS; PROXY STATEMENT;
SCHEDULE 13E-3. (a) Alaska Gold will take all action necessary in accordance
with applicable law to convene a meeting of its stockholders (the "SPECIAL
MEETING") as promptly as practicable after the date hereof to consider and vote
upon the Merger. The Board of Directors of Alaska Gold, subject to its fiduciary
duties as advised by counsel, will recommend that Alaska Gold's stockholders
vote in favor of the Merger and the approval and adoption of this Agreement.
(b) As soon as practicable, Alaska Gold shall file with the Securities and
Exchange Commission (the "SEC") under the Securities Exchange Act of 1934 (the
"EXCHANGE ACT"), and shall use its best efforts to have cleared by the SEC, a
proxy statement (together with any amendments or supplements thereto, the "PROXY
STATEMENT"), with respect to the Special Meeting. In addition, Alaska Gold and
Mueller Acquisition shall file with the SEC and make available to Alaska Gold's
stockholders, as required by applicable law, a joint Schedule 13E-3 (together
with any amendments or supplements thereto, the "SCHEDULE 13E-3") with respect
to the Special Meeting and the Merger. Mueller Acquisition and Mueller will
provide all information relating to them or their affiliates (other than Alaska
Gold) for use in preparation of the Proxy Statement and Schedule 13E-3. Alaska
Gold will provide all information, other than that relating to Mueller
Acquisition, Mueller or their respective affiliates (other than Alaska Gold),
for use in the Proxy Statement and in the Schedule 13E-3. The information
provided and to be provided by Alaska Gold, Mueller Acquisition and Mueller,
respectively, for use in the Proxy Statement and in the Schedule 13E-3 shall be
true and correct in all material respects and shall not omit to state any
material fact necessary in order to make such information not misleading as of
the date of the Proxy Statement or the Schedule 13E-3, as the case may be, and
as of the date of the Special Meeting. Alaska Gold will promptly advise Mueller
Acquisition and Mueller and Mueller Acquisition or Mueller, as the case may be,
will promptly advise Alaska Gold, in writing, if at any time prior to the
Effective Time (as defined in Section 1.2 (b)) Alaska Gold, Mueller Acquisition
or Mueller shall obtain knowledge of any facts that might make it necessary or
appropriate to amend or supplement the Proxy Statement or the Schedule 13E-3 in
order to make the statements contained or
A-4
<PAGE>
incorporated by reference therein not misleading or to comply with applicable
law. The Proxy Statement shall contain the recommendation of the Board of
Directors of Alaska Gold referred to in subdivision (a) of this Section 1.1 as
well as the conclusion of the Board of Directors of Alaska Gold that the terms
and conditions of the Merger are fair to the stockholders of Alaska Gold (other
than Mueller).
SECTION 1.2. THE MERGER. (a) At the Effective Time, the Merger shall occur
in accordance with the General Corporation Law of the State of Delaware
("DELAWARE LAW"), whereupon the separate existence of Mueller Acquisition shall
cease, and Alaska Gold shall be the surviving corporation (the "SURVIVING
CORPORATION").
(b) As soon as practicable after all of the conditions set forth in Article
IX have been satisfied or waived, Alaska Gold and Mueller Acquisition will file,
or cause to be filed, with the Secretary of State of the State of Delaware a
certificate of merger for the Merger in accordance with Delaware Law (the
"CERTIFICATE OF MERGER"). The Merger shall become effective at the time such
filing is made or at such other time as is set forth in the Certificate of
Merger (the "EFFECTIVE TIME").
(c) From and after the Effective Time, the Surviving Corporation shall
possess all the rights, privileges, powers and franchises and be subject to all
of the restrictions, disabilities and duties of Alaska Gold and Mueller
Acquisition, all as provided under Delaware Law.
SECTION 1.3. CONVERSION OF OUTSTANDING SHARES.
(a) At the Effective Time:
(i) each share of Common Stock (as defined in Section 2.2) of Alaska
Gold (a "SHARE" and, collectively, the "SHARES") outstanding immediately
prior to the Effective Time (except for the Cancelled Shares hereinafter
refered to) shall, except as otherwise provided in subsections (a)(iii) and
(b) of this Section 1.3, be converted into and represent the right to
receive $0.25 in cash (the "MERGER CONSIDERATION");
(ii) each Share held by Mueller outstanding immediately prior to the
Effective Time (a "CANCELLED SHARE" and, collectively, the "CANCELLED
SHARES") shall, by virtue of the Merger, and without any action on the part
of the holder thereof, be cancelled and retired and cease to exist, without
any conversion thereof; PROVIDED, HOWEVER, that in connection with, and only
in connection with, the consummation of the Merger, Mueller waives its right
to receive the Merger Consideration and consents to being treated less
favorably than the other stockholders of Alaska Gold; and
(iii) each share of common stock of Mueller Acquisition outstanding
immediately prior to the Effective Time shall be converted into and become
one share of common stock of the Surviving Corporation.
(b) Notwithstanding subsection (a)(i) of this Section 1.3, Shares
outstanding immediately prior to the Effective Time and held by a holder who has
not voted in favor of the Merger or consented thereto in writing and who has
demanded appraisal for such Shares in accordance with Delaware Law shall not be
converted into a right to receive the Merger Consideration pursuant to such
subsection (a)(i) unless such holder fails to perfect or withdraws or loses his
right to appraisal. If after the Effective Time such holder fails to perfect or
withdraws or loses his right to appraisal, such Shares shall thereupon be deemed
to have been converted into and to represent the right to receive, at the
Effective Time, the Merger Consideration pursuant to the terms of subsection
(a)(i) of this Section 1.3, without any interest thereon or addition thereto.
Alaska Gold shall give Mueller Acquisition prompt notice of any demands received
by Alaska Gold for appraisal of Shares, and Mueller Acquisition shall have the
right to participate in all negotiations and proceedings with respect to such
demands. Alaska Gold shall not, except with the prior written consent of Mueller
Acquisition, make any payment with respect to, or settle or offer to settle, any
such demands.
A-5
<PAGE>
SECTION 1.4. SURRENDER AND EXCHANGE. (a) Promptly after the Effective
Time, the Surviving Corporation, or such bank or trust company acting as paying
agent (the "PAYING AGENT") for the Merger pursuant to an agreement in a form to
be mutually agreed upon by Alaska Gold and Mueller Acquisition, shall mail or
cause to be mailed to each holder of Shares at the Effective Time a letter of
transmittal for use in surrendering for exchange the certificate or certificates
representing such Shares. After the Effective Time, each such holder, upon
surrender to the Paying Agent of such certificate or certificates (together with
such letter of transmittal duly executed), will be entitled to receive the
Merger Consideration. Until so surrendered, each such certificate shall after
the Effective Time represent for all purposes only the right to receive the
Merger Consideration. At the Effective Time, Mueller Acquisition shall furnish
or cause to be furnished to the Paying Agent funds equal to the aggregate Merger
Consideration payable to the holders of Shares. After the Effective Time, there
shall be no further registration or transfers of Shares. The Surviving
Corporation shall establish reasonable procedures for the delivery of the Merger
Consideration to holders of Shares whose stock certificates have been lost,
destroyed or mutilated.
(b) If any delivery of the Merger Consideration is to be made pursuant to
Section 1.3(a)(i) to a person other than the registered holder of the
certificate or certificates surrendered in exchange therefor, it shall be a
condition to such delivery that the certificate or certificates so surrendered
shall be properly endorsed or be otherwise in proper form for transfer and that
the person requesting such delivery shall (i) pay to the Paying Agent any
transfer or other taxes required as a result of delivery to a person other than
the registered holder or (ii) establish to the satisfaction of the Paying Agent
that such tax has been paid or is not payable.
(c) Any holder of Shares who has not exchanged his Shares for the Merger
Consideration in accordance with subsection (a) within six months after the
Effective Time shall have no further claim upon the Paying Agent and shall
thereafter look only to the Surviving Corporation for payment in respect of his
Shares. Notwithstanding the foregoing, no party hereto shall be liable to a
holder of Shares for any amount paid to a public official pursuant to applicable
abandoned property laws.
SECTION 1.5. CERTIFICATE OF INCORPORATION. The Certificate of
Incorporation of Alaska Gold as in effect immediately prior to the Effective
Time shall be the Certificate of Incorporation of the Surviving Corporation
until amended in accordance with applicable law.
SECTION 1.6. BY-LAWS. The By-Laws of Alaska Gold as in effect immediately
prior to the Effective Time shall be the By-Laws of the Surviving Corporation
until amended in accordance with applicable law.
SECTION 1.7. DIRECTORS AND OFFICERS. From and after the Effective Time,
until successors are duly elected or appointed in accordance with applicable
law, (a) the directors of Alaska Gold at the Effective Time shall be the
directors of the Surviving Corporation and (b) the officers of Alaska Gold at
the Effective Time shall be the officers of the Surviving Corporation.
SECTION 1.8. STOCK TRANSFER BOOKS. At the Effective Time the stock
transfer books of Alaska Gold shall be closed and no transfer of shares of
Common Stock shall thereafter be made on such stock transfer books.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF ALASKA GOLD
Alaska Gold represents and warrants to Mueller Acquisition and Mueller that:
SECTION 2.1. CORPORATE ORGANIZATION. Alaska Gold is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation, and has all requisite corporate power and
authority to own its properties and assets and to conduct its businesses as now
conducted.
A-6
<PAGE>
SECTION 2.2. CAPITALIZATION. The authorized capital stock of Alaska Gold
consists of 10,000,000 shares, consisting of 10,000,000 shares of Common Stock,
par value $0.10 per share (the "COMMON STOCK"), 5,000,000 shares of which are
issued and outstanding, all of which have been duly authorized and validly
issued, and are fully paid and nonassessable and no personal liability attaches
to the ownership thereof. The Common Stock is the only outstanding capital stock
of Alaska Gold.
SECTION 2.3. AUTHORIZATION AND VALIDITY OF AGREEMENT. Alaska Gold has the
corporate power to enter into this Agreement, to carry out its obligations
hereunder, and to consummate the Merger. The execution and delivery of this
Agreement and the performance of Alaska Gold's obligations hereunder have been
duly authorized by all necessary corporate action, including, without
limitation, by the Board of Directors of Alaska Gold. The consummation of the
Merger has been duly authorized by all necessary corporate action, other than
the affirmative vote of the stockholders of Alaska Gold in accordance with
applicable law and this Agreement, and approval of the Merger by the
stockholders of Alaska Gold has been recommended by the Board of Directors of
Alaska Gold. This Agreement has been duly executed by Alaska Gold and
constitutes the valid and binding obligation of Alaska Gold enforceable against
Alaska Gold in accordance with its terms, except (i) to the extent that
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other laws affecting the enforcement of creditors' rights
generally, and (ii) that the availability of equitable remedies, including
specific performance, is subject to the discretion of the court before which any
proceeding therefor may be brought.
SECTION 2.4. NO CONFLICT OR VIOLATION. As of the date hereof and as of the
Effective Time, the execution, delivery and performance by Alaska Gold of this
Agreement and consummation of the Merger does not and will not (i) violate or
conflict with any provision of the Certificate of Incorporation or By-Laws of
Alaska Gold, or (ii) violate any provision of law, or any order, judgment or
decree of any court or other governmental or regulatory authority.
SECTION 2.5. CONSENTS AND APPROVALS. As of the Effective Time, no material
consent, waiver, authorization or approval of any governmental or regulatory
authority, domestic or foreign, or of any other person, firm or corporation, and
no material declaration or notification to or filing or registration with any
such governmental or regulatory authority, is required on the part of Alaska
Gold in connection with the execution and delivery of this Agreement by Alaska
Gold, the performance by Alaska Gold of its obligations hereunder, or the
consummation of the Merger, other than in connection with or in compliance with
the applicable provisions of Delaware Law, the Exchange Act or the Hart-
Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR ACT").
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF MUELLER ACQUISITION
Mueller Acquisition represents and warrants to Alaska Gold that:
SECTION 3.1. CORPORATE ORGANIZATION. Mueller Acquisition is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. Since its date of incorporation, Mueller Acquisition has not
engaged in any activities not related to the acquisition, or proposed
acquisition, of Shares or the transactions contemplated by this Agreement and
the Merger and as of the Effective Time Mueller Acquisition will have no
liabilities other than those incurred to facilitate or in connection with the
acquisition, or proposed acquisition, of Shares or the transactions contemplated
by this Agreement and the Merger.
SECTION 3.2. SUBSIDIARIES AND EQUITY INVESTMENTS. As of the date of this
Agreement there are no corporations of which Mueller Acquisition owns, directly
or indirectly, shares of capital stock having in the aggregate 50% or more of
the total combined voting power of the issued and outstanding shares of capital
stock entitled to vote generally in the election of directors of such
corporation.
A-7
<PAGE>
SECTION 3.3. AUTHORIZATION AND VALIDITY OF AGREEMENT. Mueller Acquisition
has the corporate power to enter into this Agreement and to carry out its
obligations hereunder. The execution and delivery of this Agreement, the
performance of Mueller Acquisition's obligations hereunder and the consummation
of the Merger have been duly authorized by the Board of Directors and by the
sole stockholder of Mueller Acquisition and no other proceedings on the part of
Mueller Acquisition are necessary to authorize such execution, delivery and
performance. This Agreement has been duly executed by Mueller Acquisition and is
the legal, valid and binding obligation of Mueller Acquisition, enforceable
against Mueller Acquisition in accordance with its terms, except (i) to the
extent that enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other laws affecting the enforcement of creditors' rights
generally, and (ii) that the availability of equitable remedies, including
specific performance, is subject to the discretion of the court before which any
proceeding therefor may be brought.
SECTION 3.4. NO CONFLICT OR VIOLATION. As of the date hereof and as of the
Effective Time, the execution, delivery and performance by Mueller Acquisition
of this Agreement and consummation of the Merger does not and will not (i)
violate or conflict with any provision of the charter documents or By-Laws of
Mueller Acquisition, or (ii) violate any provision of law, or any order,
judgment or decree of any court or other governmental or regulatory authority.
SECTION 3.5. CONSENTS AND APPROVALS. As of the Effective Time, no material
consent, waiver, authorization or approval of any governmental or regulatory
authority, domestic or foreign, or of any other person, firm or corporation, and
no material declaration or notification to or filing or registration with any
such governmental or regulatory authority, is required on the part of Mueller
Acquisition in connection with the execution and delivery of this Agreement by
Mueller Acquisition, the performance by Mueller Acquisition of its obligations
hereunder, or the consummation of the Merger, other than in connection with or
in compliance with the applicable provisions of Delaware Law, the Exchange Act
or the HSR Act.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF MUELLER
Mueller represents and warrants to Alaska Gold that:
SECTION 4.1. CORPORATE ORGANIZATION. Mueller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware.
SECTION 4.2. TITLE TO CANCELLED SHARES. All of the Cancelled Shares are
owned of record and beneficially by Mueller free and clear of all liens.
SECTION 4.3. AUTHORIZATION AND VALIDITY OF AGREEMENT. Mueller has the
corporate power to enter into this Agreement and to carry out its obligations
hereunder. The execution and delivery of this Agreement and the performance of
Mueller's obligations hereunder have been duly authorized by the board of
directors of Mueller and no other proceedings on the part of Mueller are
necessary to authorize such execution, delivery and performance. This Agreement
has been duly executed by Mueller and is the legal, valid and binding obligation
of Mueller, enforceable against Mueller in accordance with its terms, except (i)
to the extent that enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or other laws affecting the enforcement of creditors'
rights generally, and (ii) that the availability of equitable remedies,
including specific performance, is subject to the discretion of the court before
which any proceeding therefor may be brought.
SECTION 4.4. NO CONFLICT OR VIOLATION. As of the date hereof and as of the
Effective Time, the execution, delivery and performance by Mueller of this
Agreement and consummation of the Merger does not and will not (i) violate or
conflict with any provision of the charter documents or By-Laws of Mueller, or
(ii) violate any provision of law, or any order, judgment or decree of any court
or other governmental or regulatory authority.
A-8
<PAGE>
ARTICLE V
COVENANT OF ALASKA GOLD
Alaska Gold agrees that:
SECTION 5.1. VOTE. From and after the date hereof, Alaska Gold will, to
the extent required by applicable law or as otherwise reasonably requested by
Mueller Acquisition and in accordance with Delaware Law and its Certificate of
Incorporation and By-Laws, use its best efforts to (a) solicit from the
stockholders of Alaska Gold proxies in favor of the approval of this Agreement
and (b) take all other action necessary or helpful to secure a vote of
stockholders in favor of the Merger and to approve this Agreement.
ARTICLE VI
COVENANTS OF MUELLER ACQUISITION
Mueller Acquisition agrees that:
SECTION 6.1. CONDUCT OF MUELLER ACQUISITION. From and after the date of
this Agreement and until the Effective Time, Mueller Acquisition shall conduct
its business solely in the ordinary course consistent with past practice and,
without the prior written consent of Alaska Gold, will not, except as required
or permitted pursuant to the terms hereof or as may occur in the ordinary course
of business consistent with past practice:
(i) make any change in its Certificate of Incorporation; or
(ii) take any other action that would cause any of the representations
and warranties made in this Agreement not to remain true and correct; or
(iii) commit itself to do any of the foregoing.
SECTION 6.2. ACCESS TO INFORMATION. From and after the date hereof and
subject to the execution of such confidentiality agreements as Mueller
Acquisition shall reasonably require, Mueller Acquisition will give Alaska Gold
and its counsel, financial advisors, auditors and other authorized
representatives reasonable access to the offices, properties, books and records
of Mueller Acquisition and will instruct Mueller Acquisition's employees,
counsel and financial advisors to cooperate with any such person in its
investigation of Mueller Acquisition.
SECTION 6.3. OTHER FEES AND EXPENSES. Whether or not the Merger is
consummated (except as provided below), from and after the date hereof and
without the execution of any further instrument, Mueller Acquisition will (a)
assume all of the obligations of Mueller and of any entity formed by it for
purposes of completing the Merger (including but not limited to Mueller
Acquisition) including, without limitation, indemnities, contribution,
compensation and expense reimbursements. Mueller Acquisition will pay all
reasonable attorneys' fees, expenses and disbursements of Alaska Gold incurred
prior to or after the date hereof in connection with the transactions
contemplated by this Agreement; PROVIDED, HOWEVER, that Mueller Acquisition
shall not be obligated to assume any obligation or to pay any fees and expenses
under this Section 6.3 if this Agreement is terminated because of a material
breach by Alaska Gold of any of its representations, warranties or covenants
contained hereunder.
ARTICLE VII
COVENANTS OF MUELLER
Mueller agrees that:
SECTION 7.1. VOTE. Mueller will vote the Cancelled Shares in favor of the
approval and adoption of this Agreement and the approval of the Merger.
A-9
<PAGE>
SECTION 7.2. NO SALE OR DISPOSITION; WAIVER. From and after the date of
this Agreement and until the earlier of the Effective Time and the termination
of this Agreement, Mueller will not sell or otherwise dispose of any Cancelled
Shares other than to any of its respective affiliates or otherwise to facilitate
the consummation of the transactions contemplated by this Agreement.
ARTICLE VIII
OTHER AGREEMENTS
The parties hereto agree that:
SECTION 8.1. BEST EFFORTS. Upon the terms and subject to the conditions
set forth in this Agreement, each party shall use its best efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations, including
without limitation under the HSR Act, to consummate the transactions
contemplated by this Agreement as promptly as possible.
SECTION 8.2. NOTIFICATION OF CERTAIN MATTERS. Each party to this Agreement
will give prompt notice to the other parties hereof of:
(i) any notice or other communication from any person or entity alleging
that the consent of such person or entity is or may be required in
connection with the transactions contemplated by this Agreement;
(ii) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions
contemplated by this Agreement;
(iii) any action, suit, claim, investigation or proceeding commenced or,
to its knowledge, threatened against, relating to or involving or otherwise
affecting Alaska Gold on the one hand, or Mueller Acquisition and/or Mueller
on the other hand, which is reasonably likely to affect materially the
transactions contemplated by this Agreement;
(iv) the occurrence, or failure to occur, of any event or change in
circumstances where such occurrence or failure to occur would be likely to
cause any representation or warranty contained in this Agreement to be
untrue and inaccurate in any material respect at any time from the date
hereof to the Effective Time; and
(v) any material failure of such party to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder.
No such notification shall affect the representations or warranties of the
parties or the conditions to the obligations of the parties hereunder.
SECTION 8.3. FURTHER ASSURANCES. At and after the Effective Time, the
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of Alaska Gold or Mueller
Acquisition, any deeds, bills of sale, assignments or assurances and to take and
do in the name and on behalf of Alaska Gold or Mueller Acquisition any other
actions and things to vest, perfect or confirm of record or otherwise in the
Surviving Corporation any and all right, title and interest in, to and under any
of the rights, properties or assets of Alaska Gold acquired or to be acquired by
the Surviving Corporation as a result of, or in connection with, the Merger.
ARTICLE IX
CONDITIONS TO THE MERGER
SECTION 9.1. CONDITIONS TO THE OBLIGATIONS OF EACH PARTY. The obligations
of Alaska Gold and Mueller Acquisition to consummate the Merger are subject to
(a) the approval of the Merger and this Agreement at the Special Meeting by the
affirmative vote of at least the holders of a majority of the
A-10
<PAGE>
Shares outstanding on the record date of such Special Meeting (b) any waiting
period applicable to the Merger under the HSR Act shall have terminated or
expired, (c) the absence of any statute, rule or regulation which makes
consummation of the Merger illegal or otherwise prohibited or any order, decree,
injunction or judgment enjoining the consummation of the Merger, and (d) the
receipt of an opinion of counsel to Alaska Gold, in form and substance
reasonably satisfactory to Alaska Gold and Mueller Acquisition, as to the
validity of the Merger under Delaware Law.
SECTION 9.2. CONDITIONS TO THE OBLIGATION OF ALASKA GOLD. The obligation
of Alaska Gold to consummate the Merger is subject to the satisfaction or waiver
of the following further conditions:
(a) Mueller Acquisition shall have performed in all material respects
all of its obligations hereunder required to be performed by it at or prior
to the Effective Time;
(b) the representations and warranties of Mueller Acquisition contained
in this Agreement and in any certificate or other writing delivered by
Mueller Acquisition pursuant hereto shall be true in all material respects
at and as of the Effective Time as if made at and as of such time (other
than any inaccuracies in such representations or warranties that are
attributable to Alaska Gold);
(c) receipt by Alaska Gold of a certificate signed by an executive
officer of Mueller Acquisition to the effect set forth in paragraphs (a) and
(b) of this Section; and
(d) no action or proceeding shall have been commenced or threatened for
the purpose of obtaining an injunction, order or damages before any court or
governmental agency or other regulatory or administrative agency or
commission, domestic or foreign, which Alaska Gold shall on advice of
counsel, reasonably determine would (1) result in the imposition of material
limitations on the ability of Alaska Gold or Mueller Acquisition effectively
to consummate the Merger, (2) have the effect of rendering the Merger
violative of any applicable law, or (3) have a material adverse effect on
the business, assets or financial condition of the Surviving Corporation.
SECTION 9.3. CONDITIONS TO THE OBLIGATION OF MUELLER ACQUISITION. The
obligation of Mueller Acquisition to consummate the Merger is subject to the
satisfaction or waiver of the following further conditions:
(a) Alaska Gold shall have performed in all material respects all of its
obligations hereunder required to be performed by it at or prior to the
Effective Time;
(b) the representations and warranties of Alaska Gold contained in this
Agreement and in any certificate or other writing delivered by Alaska Gold
pursuant hereto shall be true in all material respects at and as of the
Effective Time as if made at and as of such time;
(c) receipt by Mueller Acquisition of a certificate signed by an
executive officer of Alaska Gold to the effect set forth in paragraphs (a)
and (b) of this Section;
(d) the holders of not more than 5% of the outstanding shares of Common
Stock shall have exercised their appraisal rights in the Merger in
accordance with Delaware Law; and
(e) no action or proceeding shall have been commenced or threatened for
the purpose of obtaining an injunction, order or damages before any court or
governmental agency or other regulatory or administrative agency or
commission, domestic or foreign, which Mueller Acquisition shall on advice
of counsel, reasonably determine would (1) result in the imposition of
material limitations on the ability of Alaska Gold or Mueller Acquisition
effectively to consummate the Merger, (2) have the effect of rendering the
Merger violative of any applicable law, or (3) have a material adverse
effect on the business, assets or financial condition of the Surviving
Corporation.
A-11
<PAGE>
ARTICLE X
TERMINATION
SECTION 10.1. TERMINATION. This Agreement may be terminated and the Merger
may be abandoned at any time prior to the Effective Time:
(a) by mutual written consent of Alaska Gold and Mueller Acquisition
after approval of their respective Board of Directors; or
(b) by either Alaska Gold or Mueller Acquisition after approval of the
Board of Directors of Alaska Gold or Mueller Acquisition, as the case may
be, if the Merger has not been consummated on or before December 1, 1995;
PROVIDED, HOWEVER, that neither party may terminate this Agreement pursuant
to this clause (b) if the failure of such party to fulfill any of its
obligations under this Agreement shall have been the reason that the Merger
shall not have been consummated on or before said date.
SECTION 10.2. EFFECT OF TERMINATION. If this Agreement is terminated
pursuant to Section 10.1, this Agreement shall become void and of no effect with
no liability on the part of any party hereto.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. NOTICES. All notices, requests and other communications to
any party hereunder shall be in writing (including facsimile or similar writing)
and shall be given:
(a) if to Alaska Gold to:
Alaska Gold Company
2959 North Rock Road
Wichita, Kansas 67226
Facsimile: (316) 636-6390
Attention: Gary L. Barker
(b) if to Mueller Acquisition to:
Mueller Acquisition Corporation
c/o Alaska Gold Company
2959 North Rock Road
Wichita, Kansas 67226
Facsimile: (316) 636-6390
Attention: William H. Hensley
or such other address or facsimile number as such party may hereafter specify by
notice to the other party hereto. Each such notice, request or other
communication shall be effective (i) if given by facsimile, when such facsimile
is transmitted to the facsimile number specified in this Section and the
appropriate confirmation is provided, (ii) if given via United States mail,
three days after such notice is deposited in the mail in a postage pre-paid
envelope, or (iii) if given by any other means, when delivered at the address
specified in this Section.
SECTION 11.2. SURVIVAL. None of the representations, warranties,
agreements or covenants contained herein shall survive the Effective Time except
for the agreements contained in Sections 1.3, 1.4, 1.5 and 8.3.
A-12
<PAGE>
SECTION 11.3. AMENDMENT. Subject to applicable law, any provision of this
Agreement may be amended by the parties hereto, by action of each of their
respective Board of Directors or by their respective officers duly authorized by
such Board of Directors, at any time prior to the Effective Time. Any amendment
to this Agreement shall be in writing signed by all the parties hereto.
SECTION 11.4. WAIVER. (a) At any time prior to the Effective Time,
Mueller Acquisition on the one hand, and Alaska Gold on the other hand, may (i)
extend the time for the performance of any agreement of the other party or
parties hereto, (ii) waive any accuracy in the representations and warranties
contained herein or in any document delivered pursuant hereto, or (iii) waive
compliance with any agreement or condition contained herein; PROVIDED, HOWEVER,
that if such waiver would have the same effect as any decrease of the amount or
change in the type of the Merger Consideration or any amendment to Article IX,
Article X or Section 11.3 hereof, such waiver shall also be approved by the
respective Board of Directors of each of Alaska Gold and Mueller Acquisition.
Any agreement on the part of any party to any such extension or waiver shall be
effective only if set forth in a writing signed on behalf of such party and
delivered to the other parties.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other right, power or privilege. The
rights and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
SECTION 11.5. SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; PROVIDED, HOWEVER, that no party may assign
or otherwise transfer any of its rights under this Agreement without the consent
of the other parties hereto.
SECTION 11.6. GOVERNING LAW. This Agreement shall be construed in
accordance with and governed by the internal laws of the State of Delaware
without regard to principles of conflict of laws.
SECTION 11.7. INTEGRATION. This Agreement embodies the entire agreement
and understanding among the parties hereto and supersedes all prior agreements
and understandings relating to the subject matter hereof.
SECTION 11.8. HEADINGS AND REFERENCES. The headings of the Articles and
Sections of this Agreement are inserted for convenience only and shall not
constitute a part hereof.
SECTION 11.9. COUNTERPARTS; EFFECTIVENESS. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have received
counterparts hereof signed by the other party hereto.
A-13
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
ALASKA GOLD COMPANY
By: /s/_Gary L. Barker________________
Name: Gary L. Barker
Title: President
MUELLER ACQUISITION CORPORATION
By: /s/_William H. Hensley____________
Name: William H. Hensley
Title: President and Secretary
MUELLER INDUSTRIES, INC.
By: /s/_William H. Hensley____________
Name: William H. Hensley
Title: Vice President, General
Counsel and
Secretary
A-14
<PAGE>
ALASKA GOLD COMPANY
2959 NORTH ROCK ROAD
WICHITA, KANSAS 67226
January 10, 1996
Mueller Acquisition Corporation
c/o Alaska Gold Company
2959 North Rock Road
Wichita, Kansas 67226
Mueller Industries, Inc.
2959 North Rock Road
Wichita, Kansas 67226
Attention: William H. Hensley
Re: Merger Agreement -- Amendment No. 1
- -------------------------------------------
Reference is made to that certain Agreement and Plan of Merger By and Among
Alaska Gold Company, Mueller Industries, Inc. and Mueller Acquisition
Corporation, dated as of September 1, 1995 (the "Merger Agreement"). The
undersigned, by this letter confirm their understanding and agreement with
respect to certain matters as set forth below.
1. The date "December 1, 1995" is hereby deleted from Section 10.1(b) of
the Merger Agreement and replaced with the date "March 15, 1996."
2. This amendment will become effective when executed as provided by all
parties.
Very truly yours,
ALASKA GOLD COMPANY
By: /s/_Gary L. Barker________________
Gary L. Barker
President
Accepted and Agreed to this
10th day of January, 1996
MUELLER ACQUISITION CORPORATION
By: /s/_William H. Hensley_________
William H. Hensley
President and Secretary
MUELLER INDUSTRIES, INC.
By: /s/_William H. Hensley_________
William H. Hensley
Vice President, General Counsel
and Secretary
A-15
<PAGE>
ALASKA GOLD COMPANY
2959 NORTH ROCK ROAD
WICHITA, KANSAS 67226
February 5, 1996
Mueller Acquisition Corporation
c/o Alaska Gold Company
2959 North Rock Road
Wichita, Kansas 67226
Mueller Industries, Inc.
2959 North Rock Road
Wichita, Kansas 67226
Attention: William H. Hensley
Re: Merger Agreement -- Amendment No. 2
- -------------------------------------------
Reference is made to that certain Agreement and Plan of Merger By and Among
Alaska Gold Company, Mueller Industries, Inc. and Mueller Acquisition
Corporation, dated as of September 1, 1995, as amended January 10, 1996 (the
"Merger Agreement"). The undersigned, by this letter confirm their understanding
and agreement with respect to certain matters as set forth below.
1. The date "March 15, 1996" is hereby deleted from Section 10.1(b) of the
Merger Agreement and replaced with the date "June 30, 1996."
2. This amendment will become effective when executed as provided by all
parties.
Very truly yours,
ALASKA GOLD COMPANY
By: /s/_Gary L. Barker________________
Gary L. Barker
President
Accepted and Agreed to this
5th day of February, 1996
MUELLER ACQUISITION CORPORATION
By: /s/_William H. Hensley_________
William H. Hensley
President and Secretary
MUELLER INDUSTRIES, INC.
By: /s/_William H. Hensley_________
William H. Hensley
Vice President, General Counsel
and Secretary
A-16
<PAGE>
ANNEX B
SECTION 262 OF THE GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
262 APPRAISAL RIGHTS. (a) Any stockholder of a corporation of this State
who holds shares of stock on the date of the making of a demand pursuant to
subsection (d) of this section with respect to such shares, who continuously
holds such shares through the effective date of the merger or consolidation, who
has otherwise complied with subsection (d) of this section and who has neither
voted in favor of the merger or consolidation nor consented thereto in writing
pursuant to Section 228 of this title shall be entitled to an appraisal by the
Court of Chancery of the fair value of his shares of stock under the
circumstances described in subsections (b) and (c) of this section. As used in
this section, the word "stockholder" means a holder of record of stock in a
stock corporation and also a member of record of a nonstock corporation; the
words "stock" and "share" mean and include what is ordinarily meant by those
words and also membership or membership interest of a member of a nonstock
corporation; and the words "depository receipt" mean a receipt or other
instrument issued by a depository representing an interest in one or more
shares, or fractions thereof, solely of stock of a corporation, which stock is
deposited with the depository.
(b) Appraisal rights shall be available for the shares of any class or
series of stock of a constituent corporation in a merger or consolidation to be
effected pursuant to Section 251, 252, 254, 257, 258, 263 or 264 of this title:
(1) Provided, however, that no appraisal rights under this section shall
be available for the shares of any class or series of stock, which stock, or
depository receipts in respect thereof, at the record date fixed to
determine the stockholders entitled to receive notice of and to vote at the
meeting of stockholders to act upon the agreement of merger or
consolidation, were either (i) listed on a national securities exchange or
designated as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc. or (ii) held
of record by more than 2,000 holders; and further provided that no appraisal
rights shall be available for any shares of stock of the constituent
corporation surviving a merger if the merger did not require for its
approval the vote of the holders of the surviving corporation as provided in
subsections (f) or (g) of Section 251 of this title.
(2) Notwithstanding paragraph (1) of this subsection, appraisal rights
under this section shall be available for the shares of any class or series
of stock of a constituent corporation if the holders thereof are required by
the terms of an agreement of merger or consolidation pursuant to Section
251, 252, 254, 257, 258, 263 and 264 of this title to accept for such stock
anything except:
a. Shares of stock of the corporation surviving or resulting from
such merger or consolidation, or depository receipts in respect thereof;
b. Shares of stock of any other corporation, or depository receipts
in respect thereof, which shares of stock or depository receipts at the
effective date of the merger or consolidation will be either listed on a
national securities exchange or designated as a national market system
security on an interdealer quotation system by the National Association
of Securities Dealers, Inc. or held of record by more than 2,000 holders;
c. Cash in lieu of fractional shares or fractional depository
receipts described in the foregoing subparagraphs a. and b. of this
paragraph; or
d. Any combination of the shares of stock, depository receipts and
cash in lieu of fractional shares or fractional depository receipts
described in the foregoing subparagraphs a., b. and c. of this paragraph.
(3) In the event all of the stock of a subsidiary Delaware corporation
party to a merger effected under Section 253 of this title is not owned by
the parent corporation immediately prior to the merger, appraisal rights
shall be available for the shares of the subsidiary Delaware corporation.
B-1
<PAGE>
(c) Any corporation may provide in its certificate of incorporation that
appraisal rights under this section shall be available for the shares of any
class or series of its stock as a result of an amendment to its certificate of
incorporation, any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all of the assets of
the corporation. If the certificate of incorporation contains such a provision,
the procedures of this section, including those set forth in subsections (d) and
(e) of this section, shall apply as nearly as is practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which appraisal rights are
provided under this section is to be submitted for approval at a meeting of
stockholders, the corporation, not less than 20 days prior to the meeting,
shall notify each of its stockholders who was such on the record date for
such meeting with respect to shares for which appraisal rights are available
pursuant to subsections (b) or (c) hereof that appraisal rights are
available for any or all of the shares of the constituent corporations, and
shall include in such notice a copy of this section. Each stockholder
electing to demand the appraisal of his shares shall deliver to the
corporation, before the taking of the vote on the merger or consolidation, a
written demand for appraisal of his shares. Such demand will be sufficient
if it reasonably informs the corporation of the identity of the stockholder
and that the stockholder intends thereby to demand the appraisal of his
shares. A proxy or vote against the merger or consolidation shall not
constitute such a demand. A stockholder electing to take such action must do
so by a separate written demand as herein provided. Within 10 days after the
effective date of such merger or consolidation, the surviving or resulting
corporation shall notify each stockholder of each constituent corporation
who has complied with this subsection and has not voted in favor of or
consented to the merger or consolidation of the date that the merger or
consolidation has become effective; or
(2) If the merger or consolidation was approved pursuant to Section 228
or 253 of this title, the surviving or resulting corporation, either before
the effective date of the merger or consolidation or within 10 days
thereafter, shall notify each of the stockholders entitled to appraisal
rights of the effective date of the merger or consolidation and that
appraisal rights are available for any or all of the shares of the
constituent corporation, and shall include in such notice a copy of this
section. The notice shall be sent by certified or registered mail, return
receipt requested, addressed to the stockholder at his address as it appears
on the records of the corporation. Any stockholder entitled to appraisal
rights may, within 20 days after the date of mailing of the notice, demand
in writing from the surviving or resulting corporation the appraisal of his
shares. Such demand will be sufficient if it reasonably informs the
corporation of the identity of the stockholder and that the stockholder
intends thereby to demand the appraisal of his shares.
(e) Within 120 days after the effective date of the merger or consolidation,
the surviving or resulting corporation or any stockholder who has complied with
subsections (a) and (d) hereof and who is otherwise entitled to appraisal
rights, may file a petition in the Court of Chancery demanding a determination
of the value of the stock of all such stockholders. Notwithstanding the
foregoing, at any time within 60 days after the effective date of the merger or
consolidation, any stockholder shall have the right to withdraw his demand for
appraisal and to accept the terms offered upon the merger or consolidation.
Within 120 days after the effective date of the merger or consolidation, any
stockholder who has complied with the requirements of subsections (a) and (d)
hereof, upon written request, shall be entitled to receive from the corporation
surviving the merger or resulting from the consolidation a statement setting
forth the aggregate number of shares not voted in favor of the merger or
consolidation and with respect to which demands for appraisal have been received
and the aggregate number of holders of such shares. Such written statement shall
be mailed to the stockholder within 10 days after his written request for such a
statement is received by the surviving or resulting corporation or within 10
days after expiration of the period for delivery of demands for appraisal under
subsection (d) hereof, whichever is later.
B-2
<PAGE>
(f) Upon the filing of any such petition by a stockholder, service of a copy
thereof shall be made upon the surviving or resulting corporation, which shall
within 20 days after such service file in the office of the Register in Chancery
in which the petition was filed a duly verified list containing the names and
addresses of all stockholders who have demanded payment for their shares and
with whom agreements as to the value of their shares have not been reached by
the surviving or resulting corporation. If the petition shall be filed by the
surviving or resulting corporation, the petition shall be accompanied by such a
duly verified list. The Register in Chancery, if so ordered by the Court, shall
give notice of the time and place fixed for the hearing of such petition by
registered or certified mail to the surviving or resulting corporation and to
the stockholders shown on the list at the addresses therein stated. Such notice
shall also be given by 1 or more publications at least 1 week before the day of
the hearing, in a newspaper of general circulation published in the City of
Wilmington, Delaware or such publication as the Court deems advisable. The forms
of the notices by mail and by publication shall be approved by the Court, and
the costs thereof shall be borne by the surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have become entitled to
appraisal rights. The Court may require the stockholders who have demanded an
appraisal for their shares and who hold stock represented by certificates to
submit their certificates of stock to the Register in Chancery for notation
thereon of the pendency of the appraisal proceedings; and if any stockholder
fails to comply with such direction, the Court may dismiss the proceedings as to
such stockholder.
(h) After determining the stockholders entitled to an appraisal, the Court
shall appraise the shares, determining their fair value exclusive of any element
of value arising from the accomplishment or expectation of the merger or
consolidation, together with a fair rate of interest, if any, to be paid upon
the amount determined to be the fair value. In determining such fair value, the
Court shall take into account all relevant factors. In determining the fair rate
of interest, the Court may consider all relevant factors, including the rate of
interest which the surviving or resulting corporation would have had to pay to
borrow money during the pendency of the proceeding. Upon application by the
surviving or resulting corporation or by any stockholder entitled to participate
in the appraisal proceeding, the Court may, in its discretion, permit discovery
or other pretrial proceedings and may proceed to trial upon the appraisal prior
to the final determination of the stockholder entitled to an appraisal. Any
stockholder whose name appears on the list filed by the surviving or resulting
corporation pursuant to subsection (f) of this section and who has submitted his
certificates of stock to the Register in Chancery, if such is required, may
participate fully in all proceedings until it is finally determined that he is
not entitled to appraisal rights under this section.
(i) The Court shall direct the payment of the fair value of the shares,
together with interest, if any, by the surviving or resulting corporation to the
stockholders entitled thereto. Interest may be simple or compound, as the Court
may direct. Payment shall be so made to each such stockholder, in the case of
holders of uncertificated stock forthwith, and the case of holders of shares
represented by certificates upon the surrender to the corporation of the
certificates representing such stock. The Court's decree may be enforced as
other decrees in the Court of Chancery may be enforced, whether such surviving
or resulting corporation be a corporation of this State or of any state.
(j) The costs of the proceeding may be determined by the Court and taxed
upon the parties as the Court deems equitable in the circumstances. Upon
application of a stockholder, the Court may order all or a portion of the
expenses incurred by any stockholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and the
fees and expenses of experts, to be charged pro rata against the value of all
the shares entitled to an appraisal.
(k) From and after the effective date of the merger or consolidation, no
stockholder who has demanded his appraisal rights as provided in subsection (d)
of this section shall be entitled to vote such stock for any purpose or to
receive payment of dividends or other distributions on the stock (except
dividends or other distributions payable to stockholders of record at a date
which is prior to
B-3
<PAGE>
the effective date of the merger or consolidation); provided, however, that if
no petition for an appraisal shall be filed within the time provided in
subsection (e) of this section, or if such stockholder shall deliver to the
surviving or resulting corporation a written withdrawal of his demand for an
appraisal and an acceptance of the merger or consolidation, either within 60
days after the effective date of the merger or consolidation as provided in
subsection (e) of this section or thereafter with the written approval of the
corporation, then the right of such stockholder to an appraisal shall cease.
Notwithstanding the foregoing, no appraisal proceeding in the Court of Chancery
shall be dismissed as to any stockholder without the approval of the Court, and
such approval may be conditioned upon such terms as the Court deems just.
(l) The shares of the surviving or resulting corporation to which the shares
of such objecting shareholders would have been converted had they assented to
the merger or consolidation shall have the status of authorized and unissued
shares of the surviving or resulting corporation. (Last amended by Ch. 79, L.
'95, eff. 7-1-95.)
B-4
<PAGE>
PROXY
ALASKA GOLD COMPANY
SPECIAL MEETING OF SHAREHOLDERS MARCH 14, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints GARY L. BARKER and RICHARD W. CORMAN, and
each of them, Proxies of the undersigned with power of substitution to each, to
vote all shares of Alaska Gold Company (the "Company") which the undersigned is
entitled to vote at the Special Meeting of Shareholders to be held on March 14,
1996 at 9:00 a.m. local time at the offices of the Company at 2959 N. Rock Road,
5th Floor Conference Room, Wichita, Kansas 67226.
<TABLE>
<S> <C>
1. APPROVAL AND ADOPTION OF AGREEMENT AND PLAN OF MERGER. Approval and adoption of the Agreement and Plan of Merger,
dated as of September 1, 1995 (the "Merger Agreement"), among the Company, Mueller Acquisition Corporation and
Mueller Industries, Inc., as described in the Proxy Statement.
</TABLE>
/ / FOR / / AGAINST / / ABSTAIN
<TABLE>
<S> <C>
2. TRANSACTION OF OTHER BUSINESS. Transaction of such other business as may properly come before the meeting or any
adjournments or postponements thereof.
</TABLE>
(CONTINUED ON REVERSE SIDE)
<PAGE>
<TABLE>
<S> <C>
SHARES WILL BE VOTED AS DIRECTED EXCEPT THAT IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED IN FAVOR OF PROPOSAL 1. THE
UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE PROXY STATEMENT OF THE COMPANY DATED FEBRUARY 12, 1996.
</TABLE>
DATED: _______________________ , 1996
_____________________________________
(Signature)
_____________________________________
(Signature, if jointly held)
_____________________________________
Title: ______________________________
Please sign exactly as your name
appears on your stock certificate.
When shares are held by joint
tenants, both should sign. When
signing as an attorney, executor,
administrator, trustee or guardian,
give full title as such. If a
corporation, sign in full corporation
name by President or other authorized
officer. If a partnership, sign in
partnership name by authorized
person. This Proxy votes all shares
in all capacities.
PLEASE SIGN, DATE AND MAIL YOUR PROXY CARD PROMPTLY.