SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
(Amendment No. )
Filed by the Registrant <checked-box>
Filed by a party other than the Registrant <square>
Check the appropriate box:
<checked-box> Preliminary Proxy Statement
<square> Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
<square> Definitive Proxy Statement
<square> Definitive Additional Materials
<square> Soliciting Material Pursuant to <square> <section>240.14a-11(c)
or <square> <section>240.14a-12
SISKON GOLD CORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
<checked-box> No fee required
<square> Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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:________________________________________
<square> Fee paid previously with preliminary materials.
<square> 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:____________________________________________
<PAGE>
SISKON GOLD CORPORATION
350 Crown Point Circle, Suite 100
Grass Valley, CA 95945
(916) 273-4311
To the Shareholders of Siskon Gold Corporation:
You are invited to attend the Annual Meeting of the Shareholders of
Siskon Gold Corporation ("Siskon") which will be held on Monday, August 4,
1997, at 10:00 a.m. (Pacific Time), at the offices of Bartel Eng Linn &
Schroder, 300 Capitol Mall, Suite 1100, Sacramento, California 95814.
The accompanying Notice of the Annual Meeting of Shareholders and Proxy
Statement contain important information regarding the election of Siskon's
Board of Directors, a proposed amendment to Siskon's stock option plan, a
proposed amendment to Siskon's Articles of Incorporation increasing the
authorized share capital and the proposed reincorporation of Siskon from the
State of California to the State of Nevada. I urge you to read the materials
carefully and to give these matters your close attention.
We hope you will be able to attend the Annual Meeting, but, if you cannot
do so, it is important that your shares be represented. Accordingly, we urge
you to mark, sign, date, and return the enclosed proxy promptly. You may, of
course, revoke your proxy if you attend the meeting and choose to vote in
person.
Sincerely,
Timothy A. Callaway
President, Chief Executive Officer,
and Chairman of the Board
June 11, 1997
<PAGE>
SISKON GOLD CORPORATION
350 Crown Point Circle, Suite 100
Grass Valley, CA 95945
(916) 273-4311
NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MONDAY, AUGUST 4, 1997
NOTICE IS HEREBY GIVEN that the Annual Meeting of the shareholders of
Siskon Gold Corporation, a California corporation ("Siskon"), will be held on
Monday, August, 4, 1997, at 10:00 a.m. (Pacific Time), at the offices of Bartel
Eng Linn & Schroder, 300 Capitol Mall, Suite 1100, Sacramento, CA 95814, for
the following purposes, all of which are more completely discussed in the
accompanying Proxy Statement:
1. To elect four directors to serve one-year terms or until their
successors have been elected and qualified;
2. To approve amendments to Siskon's Articles of Incorporation
increasing the authorized share capital;
3. To approve amendments to Siskon's Amended Stock Option Plan;
4. To approve the reincorporation from the State of California to the
State of Nevada; and
5. To transact such other business as may properly come before the
Annual Meeting or any adjournments thereof.
Only shareholders of record at the close of business on June 10, 1997,
are entitled to notice of and to vote at the Annual Meeting of the
Shareholders.
BY ORDER OF THE BOARD OF DIRECTORS
Michael K. Epstein
Corporate Secretary
June 11, 1997
YOU ARE CORDIALLY INVITED TO ATTEND SISKON'S ANNUAL MEETING OF SHAREHOLDERS. IT
IS IMPORTANT THAT YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER YOU OWN.
EVEN IF YOU PLAN TO BE PRESENT AT THE ANNUAL MEETING, YOU ARE URGED TO
COMPLETE, SIGN, DATE, AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE ENVELOPE
PROVIDED. IF YOU ATTEND THIS MEETING, YOU MAY VOTE EITHER IN PERSON OR BY
PROXY. ANY PROXY GIVEN MAY BE REVOKED BY YOU IN WRITING OR IN PERSON AT ANY
TIME PRIOR TO THE EXERCISE THEREOF.
<PAGE>1
PROXY STATEMENT
of
SISKON GOLD CORPORATION
350 Crown Point Circle, Suite 100
Grass Valley, CA 95945
(916) 273-4311
INFORMATION CONCERNING THE SOLICITATION
This Proxy Statement is furnished to the shareholders of Siskon Gold
Corporation ("Siskon" or the "Company") in connection with the solicitation of
proxies on behalf of Siskon's Board of Directors for use at Siskon's Annual
Meeting Of Shareholders (the "Meeting") to be held on Monday, August 4, 1997,
at 10:00 a.m. (PDT), at the offices of Bartel Eng Linn & Schroder, 300 Capitol
Mall, Suite 1100, Sacramento, California 95814, and at any and all adjournments
thereof. Only shareholders of record on June 10, 1997, will be entitled to
notice of and to vote at the Meeting.
The proxy solicited hereby, if properly signed and returned to Siskon and
not revoked prior to its use, will be voted at the Meeting in accordance with
the instructions contained therein. If no contrary instructions are given,
each proxy received will be voted "FOR" the nominees for the Board of
Directors, "FOR" the approval of Proposal Nos. 2, 3 and 4 and, at the proxy
holders' discretion, on such other matters, if any, which may come before the
Meeting (including any proposal to adjourn the Meeting). Any shareholder
giving a proxy has the power to revoke it at any time before it is exercised by
(i) filing with Siskon written notice of its revocation addressed to Michael K.
Epstein, Corporate Secretary, Siskon Gold Corporation, 350 Crown Point Circle,
Suite 100, Grass Valley, California 95945, (ii) submitting a duly executed
proxy bearing a later date, or (iii) appearing at the Meeting and giving the
Corporate Secretary notice of his or her intention to vote in person.
Siskon will bear the entire cost of preparing, assembling, printing, and
mailing proxy materials furnished by the Board of Directors to shareholders.
Copies of proxy materials will be furnished to brokerage houses, fiduciaries,
and custodians to be forwarded to beneficial owners of the Class A common
stock. In addition to the solicitation of proxies by use of the mail, some of
the officers, directors, employees, and agents of Siskon may, without
additional compensation, solicit proxies by telephone or personal interview,
the cost of which Siskon will also bear.
A copy of Siskon's Annual Report for the year ended December 31, 1996,
accompanies this Proxy Statement.
This Proxy Statement and form of proxy were first mailed to shareholders
on or about June 20, 1997.
RECORD DATE AND VOTING RIGHTS
Siskon is authorized to issue up to 49,500,000 shares of Class A common
stock, par value $0.001, 500,000 shares of Class B common stock, par value
$0.001, and 10,000,000 shares of preferred stock, par value $0.001. Of the
10,000,000 preferred stock, 2,400 have been designated Series A convertible
preferred stock. As of June 3, 1997, 26,816,139 shares of Class A common
stock, 638 shares of Series 1 Class B common stock, and 301 shares of Series A
convertible preferred stock were issued and outstanding. Each share of Class A
common stock and Series 1 Class B common stock shall be entitled to one vote on
all matters submitted for shareholder approval. Except for Proposal No. 4, the
holders of the Series A convertible preferred stock have no voting rights. The
record date for determination of shareholders entitled to notice of and to vote
at the Meeting is June 10, 1997. Siskon's Articles of Incorporation do not
provide for cumulative voting.
<PAGE>2
The four nominees receiving the highest number of votes shall be elected
as Directors. The affirmative vote of a majority of the Class A common stock
and Series 1 Class B common stock, voting in person or by proxy together as a
class, is necessary to approve Proposal Nos. 2 and 3. The affirmative vote of
a majority of the outstanding Class A common stock, Series 1 Class B common
stock, and Series A Preferred Stock, voting as separate classes, is necessary
to approve Proposal No. 4. Under California law, abstentions and broker non-
votes shall be counted for purposes of determining a quorum, but will not be
counted for or against the proposal. Therefore, abstentions and broker non-
votes will have no effect on the election of directors, but will have the
effect of a "no" vote for Proposal Nos. 2 and 3.
PROPOSAL ONE
ELECTION OF DIRECTORS
The authorized number of Directors of Siskon is set forth in Siskon's
Bylaws as not less than five nor more than nine. The Board of Directors has
fixed this number at five Directors. Although the authorized number of
directors is currently five, there are only four nominees to the Board of
Directors. Therefore, there is a vacancy on Siskon's Board immediately after
the election. At this time, the Board has decided not to elect a fifth nominee
to the board, but may do so in the future.
All duly elected Directors will serve and hold office until the next
annual meeting or until their respective successors have been duly elected and
qualified. Unless authority is withheld, the enclosed proxy will be voted for
the four nominees. In the event that any of the nominees should unexpectedly
decline or be unavailable to act as a Director, the enclosed proxy may be voted
for a substitute nominee to be designated by the Board of Directors. The Board
of Directors has no reason to believe that any nominee will become unavailable
and has no present intention to nominate any person in addition to, or in lieu
of, those named below. On March 31, 1997, Mr. Charles D. Snead resigned as a
director. On March 31, 1997, the board appointed Mr. David A. Lawler to fill
Mr. Snead's position on the board. Mr. Lawler previously served as a Siskon
board member from April 1992 to November 1995. Mr. Lawler has replaced Mr.
Snead as a member of Siskon's Audit and Stock Option and Compensation
Committees.
The Board of Directors held eight meetings during 1996. During fiscal
1996, Messrs. Bartel and Snead comprise the Board's Audit Committee and Stock
Option and Compensation Committee. The Audit Committee held two meetings
during 1996, and the Stock Option and Compensation Committee held three
meetings during 1996. The Board does not have a Nominating Committee. Each
Director attended at least seventy-five percent of the meetings of the Board or
of the meetings of the committees on which he serves.
The primary function of the Audit Committee is to review the scope and
results of audits by Siskon's independent auditors, Siskon's internal
accounting controls, non-audit services performed by the independent
accountants, and the cost of accounting services.
The Stock Option and Compensation Committee administers the Siskon Stock
Option Plan and considers and approves compensation, remuneration, and
incentive arrangements for Officers of Siskon.
NOMINEES FOR DIRECTOR
The following table sets forth the persons nominated by the Board of
Directors for election as Directors and certain information with respect to
those persons.
<PAGE>3
NOMINEE AGE DIRECTOR SINCE
Timothy A. Callaway 45 1990
Michael K. Epstein 50 1991
Scott E. Bartel 40 1993
David A. Lawler 46 1996
BACKGROUND OF NOMINEES
TIMOTHY A. CALLAWAY. Since September 1991, Mr. Callaway has served as
the President, Chief Executive Officer, and a Director of Siskon, and, since
June 1994, as Chairman of the Board of Directors. From June 1992 to March
1994, he served as Chief Financial Officer of Siskon. From September 1990 to
September 1991, he served as President, Chief Executive Officer, and a Director
of both Centurion Gold Ltd. and U. S. Precious Metals, Inc., predecessors to
Siskon. Previously, Mr. Callaway was employed by Battle Mountain Gold Company
as President and Chief Executive Officer of its exploration and development
subsidiary, Sierra Gold Development, from August 1987 until August 1989.
MICHAEL K. EPSTEIN. Mr. Epstein has served as a Director of Siskon since
October 1991 and since March 1994 as Vice President and Chief Financial
Officer. Since February 1997, Mr. Epstein has served as corporate secretary.
For more than the previous five years, Mr. Epstein served as the Controller for
the Grupe Companies, a diversified real estate development company based in
Stockton, California.
SCOTT E. BARTEL. Mr. Bartel has served as a Director of Siskon since
April 1993. Currently, and for more than the previous five years, Mr. Bartel
has been a founding shareholder of the law firm of Bartel Eng Linn & Schroder,
Sacramento, California.
DAVID A. LAWLER. Mr. Lawler is currently, and has been for more than the
previous five years, a principal of Lawler and Associates, a geoscience
consulting firm based in Berkeley, California, specializing in evaluating
precious metal deposits. Mr. Lawler previously served as a director of the
Company from 1992 to 1995.
EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the
Executive Officers of Siskon.
<TABLE>
<CAPTION>
NAME POSITIONS WITH SISKON AGE OFFICE HELD SINCE
<S> <C> <C> <C>
Timothy A. Callaway President 45 1990
Chief Executive Officer
Chairman of the Board of Directors
Michael K. Epstein Vice President-Finance 50 1994
Chief Financial Officer
Corporate Secretary
</TABLE>
Executive Officers are elected annually by the Board of Directors and
serve at the pleasure of the Board. There is no family relationship between
any of the Officers or Directors.
<PAGE>4
BACKGROUND OF EXECUTIVES.
For the background for Messrs. Callaway and Epstein, see "Nominees for
Director" above.
DIRECTORS' COMPENSATION AND STOCK GRANT PLAN
All Directors of Siskon initially receive $10,000 of Class A common stock
for serving as Directors and thereafter each Director receives $10,000 of
Class A common stock per year pursuant to the Siskon Directors Stock Grant
Plan. Each non-employee Director also receives $500 per meeting attended. In
addition, members of the Board's Stock Option and Compensation Committee
receive options to purchase 1,500 shares of Class A common stock upon
completion of each full year of service on such Committee. The members of the
Audit Committee receive $500 per meeting attended not held concurrently with a
Director's Meeting.
EXECUTIVE COMPENSATION
The following table sets forth the aggregate cash compensation paid for
the past three years for services of Timothy A. Callaway, the President, Chief
Executive Officer, and Chairman of the Board, and of Michael K. Epstein,
Director and Chief Financial Officer. No other executive officers of Siskon
received total compensation in 1996 in an amount exceeding $100,000.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Awards Payouts
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OTHER
ANNUAL RESTRICTED SECURITIES
COMPENSA- STOCK UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL TION AWARD(S) OPTIONS PAYOUTS COMPENSA-
POSITION YEAR SALARY BONUS ($) ($) (#) ($) TION
TIMOTHY A. CALLAWAY 1996 $227,935 $4,320 $10,000(1) $0 0 $0 $0
CEO, PRESIDENT AND 1995 $208,705 0 $10,000(1) $0 0 $0 $0
CHAIRMAN OF THE 1994 $188,596 0 $10,000(1) $0 0 $0 $0
BOARD
MICHAEL K. EPSTEIN 1996 $ 98,987 0 $10,000(1) $0 50,000(2) $0 $0
CFO AND DIRECTOR 1995 $ 92,907 0 $10,000(1) $0 100,000(3) $0 $0
1994 $ 63,927 0 $10,000(1) $0 100,000(4) $0 $0
</TABLE>
(1) REPRESENTS $10,000 WORTH OF SHARES OF CLASS A COMMON STOCK
EARNED FOR SERVING AS A DIRECTOR.
(2) TEN YEAR OPTIONS TO PURCHASE 50,000 SHARES OF CLASS A COMMON
STOCK WERE GRANTED AT $1.88 PER SHARE SUBJECT TO VESTING.
10,000 SHARES VESTED IN 1996.
(3) TEN YEAR OPTIONS TO PURCHASE 100,000 SHARES OF CLASS A COMMON
STOCK WERE GRANTED AT $3.05 PER SHARE SUBJECT TO VESTING.
20,000 VESTED IN 1994, 20,000 VESTED IN 1995, 20,000 VESTED IN
1996, AND 20,000 SHALL VEST ANNUALLY FROM 1997 TO 1998. TEN
YEAR OPTIONS TO PURCHASE 100,000 SHARES OF CLASS A COMMON STOCK
AT $4.00 AND $4.24 GRANTED IN 1994 WERE CANCELLED. SEE FOOTNOTE
(4).
(4) TEN YEAR OPTIONS TO PURCHASE 50,000 SHARES OF CLASS A COMMON
STOCK AT $4.00 PER SHARE AND 50,000 SHARES OF CLASS A COMMON
STOCK AT $4.24 PER SHARE WERE GRANTED SUBJECT TO VESTING.
20,000 VESTED IN 1994 AND 20,000 VEST ANNUALLY FROM 1995 TO
1998. THE OPTIONS WERE CANCELLED IN 1995.
EMPLOYMENT AGREEMENTS
Mr. Callaway serves as President, Chief Executive Officer, and Chairman
of the Board of Directors. Mr. Callaway's Employment Agreement dated October
<PAGE>5
8, 1991, and amended on February 12, 1993, provides for compensation equal to
$150,000 per year, subject to annual cost of living increases equal to 7% of
base salary until December 31, 1995, and thereafter to be reviewed by the Board
of Directors. The term of Mr. Callaway's Employment Agreement is unstated and
may be terminated upon 60 days' notice by Mr. Callaway or by Siskon with or
without cause. In the event Mr. Callaway is terminated by Siskon without
cause, Mr. Callaway is entitled to receive severance pay equal to four years of
his annual salary. In addition, the Employment Agreement provides that in the
event Mr. Callaway is terminated other than "for cause" within six months of a
change of control, Mr. Callaway shall be paid an amount equal to five years of
his annual salary. Further, if, within two years of a change of control, Mr.
Callaway determines, in his sole discretion, that the policies and procedures
of the Board of Directors are unacceptable, upon Mr. Callaway's resignation,
Mr. Callaway shall be paid an amount equal to his annual salary. The phrase
"change of control" is defined to include (i) the issuance of 33% or more of
the outstanding securities to any individual, firm, partnership, or entity,
(ii) the issuance of 33% or more of the outstanding securities in connection
with a merger, (iii) the acquisition of Siskon in a merger or other business
combination, or (iv) the sale or transfer of 50% or more of Siskon's assets or
earning power.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires Siskon's
Directors, Executive Officers, and persons who own more than 10% of Siskon's
outstanding Class A common stock to file reports of ownership and changes in
ownership with the SEC. Directors, Executive Officers, and shareholders of
more the 10% of Siskon's Class A common stock are required by SEC regulations
to furnish Siskon with copies of the Section 16(a) forms they file.
Based solely on a review of the copies of such forms furnished to Siskon,
or written representations that such filings were not required, Siskon believes
that, during the calendar year 1996, all Section 16(a) filing requirements
applicable to its Directors, Officers, and shareholders of more than 10% of
Siskon Class A common stock were complied with.
SISKON STOCK OPTION PLAN
The Siskon Stock Option Plan (the "Stock Option Plan") was approved by
Siskon's stockholders in August 1991 and amended in June 1993 and June 1994. A
total of 660,500 shares have been approved for issuance and are subject to
options under the Stock Option Plan. Siskon is proposing to amend the Stock
Option Plan to increase the number of shares of Class A common stock covered
under the Stock Option Plan from 660,500 shares to 10,000,000 shares, assuming
Proposal No. 2 is approved increasing Siskon's authorized share capital. See
Proposal No. 3.
The Stock Option Plan permits the grant of stock options to employees,
officers, and certain directors. The purpose of the Stock Option Plan is to
attract the best available personnel to Siskon and to give employees, officers,
and certain directors of Siskon a greater personal stake in the success of the
business.
The Stock Option Plan is administered by the Stock Option and
Compensation Committee, which determines the recipients of options and the
terms of options granted, including the expiration date, exercise price, number
of shares subject to the options, and vesting requirements, if any. The
exercise price of all stock options granted under the Stock Option Plan must be
at least equal to the fair market value of such shares on the date of grant,
and the term of the stock options may be up to five years for all participants
who are members of the Stock Option and Compensation Committee and up to ten
years for all other participants.
<PAGE>6
Upon completion of each full year of service on the Stock Option and
Compensation Committee, each member of such Committee is granted options to
purchase 1,500 shares of Class A common stock, at an exercise price equal to
the closing price of such common stock on the last business day of the calendar
year.
During 1996, Mr. Callaway was not granted any options. The following
table sets forth options granted to Mr. Epstein.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants
<S> <C> <C> <C> <C>
% OF TOTAL OPTIONS
NUMBER OF SECURITIES GRANTED TO EMPLOYEES
UNDERLYING OPTIONS IN FISCAL YEAR EXERCISE OR BASE
NAME GRANTED (#) PRICE ($/SH) EXPIRATION DATE
MICHAEL K. EPSTEIN 50,000 14% $1.88 AUGUST 15, 2006
</TABLE>
The market price of the Class A common stock on the date of the
grant was $1.88.
In 1996 Messrs. Callaway and Epstein did not exercise any options.
The following table sets forth Messrs. Callaway's and Epstein's fiscal
year end option values.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<S> <C> <C> <C> <C>
(a) (b) (c) (d) (e)
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FY-END (#) IN-THE-MONEY OPTIONS
AT FY-END ($)
SHARES ACQUIRED ON EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) VALUE REALIZED ($) UNEXERCISABLE UNEXERCISABLE
TIMOTHY A. CALLAWAY 0 $0 200,000 EXERCISABLE $0(1)
MICHAEL K. EPSTEIN 0 $0 71,500 EXERCISABLE/ $0(1)
80,000 UNEXERCISABLE $0(1)
</TABLE>
(1) MARKET PRICE AT DECEMBER 31, 1996 FOR SHARE OF CLASS A COMMON STOCK WAS
$0.78 WHICH WAS BELOW THE OPTION EXERCISE PRICE.
PRINCIPAL SHAREHOLDERS
The following table sets forth, as of June 3, 1997, certain information
with respect to the beneficial ownership of shares of Siskon Class A and
Series 1 Class B common stock by all shareholders known by Siskon to be the
beneficial owners of more than five percent of the outstanding shares of such
common stock, all Directors and Executive Officers of Siskon individually, and
all Directors and all Executive Officers of Siskon as a group. As of June 3,
1997, there were 26,816,139 shares of Class A common stock, 638 shares of
Series 1 Class B common stock outstanding.
<PAGE>7
No. of Shares
Name Common Stock(1) Percent
Carl Seaman 3,539,290(2) 12.60%
12 The Poplars
Roslyn, NY
Linda Seaman 1,579,533(3) 5.75%
12 The Poplars
Roslyn, NY
Vengold, Inc. 3,347,289(4) 11.16%
200 Burrard Street, Suite 1788
Vancouver, British Columbia
Canada
Income Partnership of America 6,159,090(5) 19.41%
c/o Vanguard Communications
Benwick House
35 Levery Street
Birmingham, England
Penarth International Investments 1,947,607(6) 7.01%
c/o Alan Zazoff Associates, L.L.C.
160 Littleton Road, Suite 202
Parsippany, NJ
Timothy C. Callaway, President 448,835(7) 1.66%
Chief Executive Officer and
Chairman of the Board
Michael Epstein, Director, 118,712(8) *
Chief Financial Officer, and Secretary
Scott E. Bartel, Director 16,797(9) *
David A. Lawler 300 *
All Directors and Executive Officers
as a group (4 persons) 584,664(10) 2.17%
SERIES 1 CLASS B COMMON STOCK(1)
Charles D. Snead, Jr. 638 100.0%
<PAGE>8
Footnotes To Table
* LESS THAN ONE PERCENT.
(1) EXCEPT AS INDICATED IN THE FOOTNOTES TO THIS TABLE, THE PERSONS NAMED
IN THE TABLE HAVE SOLE VOTING AND INVESTMENT POWER WITH RESPECT TO ALL
SHARES OF SISKON CLASS A OR SERIES 1 CLASS B COMMON STOCK SHOWN AS
BENEFICIALLY OWNED BY THEM, SUBJECT TO COMMUNITY PROPERTY LAWS WHERE
APPLICABLE.
(2) CARL SEAMAN AND LINDA SEAMAN ARE HUSBAND AND WIFE. MR. AND MRS. SEAMAN
OWN $4.2 MILLION OF CONVERTIBLE NOTE WHICH IS DUE NOVEMBER 15, 1998.
THE NOTE IS CONVERTIBLE INTO CLASS A COMMON STOCK AT $1.75 PER SHARE.
INTEREST ON THE NOTE THROUGH NOVEMBER 15, 1997, IS PAID ANNUALLY IN
CLASS A COMMON STOCK AT $3.50 PER SHARE. INTEREST ON THE NOTE THROUGH
NOVEMBER 15, 1997, IS PAID ANNUALLY IN CLASS A COMMON STOCK AT $2.56
PER SHARE. MR. SEAMAN ALSO OWNS A $500,000 CONVERTIBLE NOTE WHICH IS
DUE NOVEMBER 15, 1998. THE NOTE IS CONVERTIBLE INTO CLASS A COMMON
STOCK AT $1.75 PER SHARE. INTEREST ON THE CONVERTIBLE NOTE THROUGH
NOVEMBER 15, 1997, IS PAID ANNUALLY IN CLASS A COMMON STOCK AT $1.75
PER SHARE. MR. SEAMAN HAS THE RIGHT TO CONVERT $500,000 OF THE
EXISTING CONVERTIBLE DEBT INTO CLASS A COMMON STOCK AS WELL. JORDAN
SEAMAN AND DANA MANNING, THE SEAMAN'S CHILDREN, EACH OWN A $341,704
NOTE WHICH IS CONVERTIBLE INTO CLASS A COMMON STOCK AND THE SHARES
UNDERLYING THE NOTES HELD BY THE SEAMANS' CHILDREN HAVE NOT BEEN
ATTRIBUTED TO MR. SEAMAN. AS REPORTED ON SCHEDULE 13D FILED WITH THE
SEC, MR. AND MRS. SEAMAN EACH HAVE AN INDEPENDENT RIGHT TO CONVERT UP
TO ONE-HALF OF THE CONVERTIBLE PORTION OF THE NOTE INTO CLASS A COMMON
STOCK. SEC RULE 13D-3(D) STATES THAT BENEFICIAL OWNERSHIP INCLUDES ALL
SHARES WHICH THE BENEFICIAL OWNER HAS THE RIGHT TO ACQUIRE WITHIN 60
DAYS. CONSEQUENTLY, THE AMOUNT SHOWN FOR MR. SEAMAN INCLUDES 1,077,005
SHARES OF CLASS A COMMON STOCK, THE AMOUNT WHICH HE WOULD HAVE THE
RIGHT TO ACQUIRE PURSUANT TO SUCH CONVERSION INCLUDING ACCRUED INTEREST
THROUGH MAY 1997. MR. SEAMAN ALSO HAS WARRANTS TO PURCHASE 200,000
SHARES AT $6.00 THAT EXPIRE ON NOVEMBER 10, 1997. THE AMOUNT SHOWN FOR
MR. SEAMAN ALSO INCLUDES 73,666 SHARES OF CLASS A COMMON STOCK OWNED BY
CARL & ASSOCIATES, A GENERAL PARTNERSHIP OF WHICH MR. SEAMAN OWNS AN
80% EQUITY INTEREST AND THE REMAINING 20% INTEREST IS OWNED BY HIS
CHILDREN. MR. SEAMAN DISCLAIMS BENEFICIAL OWNERSHIP OF THE 14,733
SHARES OF CLASS A COMMON STOCK ATTRIBUTED TO THE 20% INTEREST IN CARL &
ASSOCIATES. THE AMOUNT SHOWN DOES NOT INCLUDE (A) 632,857 SHARES OF
CLASS A COMMON STOCK WHICH LINDA SEAMAN HAS THE RIGHT TO ACQUIRE
PURSUANT TO THE CONVERSION OF THE NOTE, OR (B) 946,676 SHARES OF
CLASS A COMMON STOCK OWNED BY LINDA SEAMAN, THE BENEFICIAL OWNERSHIP OF
WHICH IS DISCLAIMED BY MR. SEAMAN.
(3) THE AMOUNT SHOWN FOR MRS. SEAMAN INCLUDES 632,857 SHARES OF CLASS A
COMMON STOCK WHICH SHE HAS THE RIGHT TO ACQUIRED PURSUANT TO THE
CONVERSION RIGHT DESCRIBED IN FOOTNOTE (2) INCLUDING ACCRUED INTEREST
THROUGH MAY 1997. THE AMOUNT SHOWN DOES NOT INCLUDE ANY OF THE SHARES
SHOWN AS BENEFICIALLY OWNED BY CARL SEAMAN, THE BENEFICIAL OWNERSHIP OF
WHICH IS DISCLAIMED BY MRS. SEAMAN.
(4) VENGOLD INC. OWNS A $3 MILLION CONVERTIBLE NOTE WHICH IS DUE NOVEMBER
15, 1998, WHICH IS CONVERTIBLE INTO CLASS A COMMON STOCK AT $2.56 PER
SHARE. INTEREST ON THE CONVERTIBLE NOTE THROUGH NOVEMBER 15, 1997, IS
PAID QUARTERLY IN CLASS A COMMON STOCK AT $2.56 PER SHARE. SEC RULE
13D-3(D) STATES THAT BENEFICIAL OWNERSHIP INCLUDES ALL SHARES WHICH THE
BENEFICIAL OWNER HAS THE RIGHT TO ACQUIRE WITHIN 60 DAYS.
CONSEQUENTLY, THE AMOUNT SHOWN FOR VENGOLD INCLUDES 1,186,435 SHARES OF
CLASS A COMMON STOCK, THE AMOUNT WHICH VENGOLD WOULD HAVE THE RIGHT TO
ACQUIRE PURSUANT TO SUCH CONVERSION INCLUDING ACCRUED INTEREST THROUGH
MAY 1997. VENGOLD ALSO OWNS WARRANTS TO PURCHASE 2,000,000 SHARES AT
$4.00 PER SHARE THAT EXPIRE ON NOVEMBER 15, 1998.
(5) INCOME PARTNERSHIP OF AMERICA OWNS 301 SHARES OF SERIES A CONVERTIBLE
PREFERRED STOCK WHICH IS CONVERTIBLE INTO CLASS A COMMON STOCK AT 75%
OF THE AVERAGE MARKET PRICE FOR THE TEN DAYS PRIOR TO CONVERSION. THE
SHARES SHOWN REFLECT THE CONVERSION AT THE CURRENT MARKET PRICE OF
$0.09 PER SHARE.
(6) PENARTH INTERNATIONAL INVESTMENTS OWNS $60,000 PRINCIPALS OF
CONVERTIBLE DEBT THAT IS CONVERTIBLE INTO CLASS A COMMON STOCK AT 75%
OF THE AVERAGE MARKET VALUE PRICE FOR THE FIVE DAYS PRIOR TO
CONVERSION. THE SHARES SHOWN REFLECT THE CONVERSION AT THE CURRENT
MARKET PRICE OF $0.09 PER SHARE.
(7) INCLUDES OPTIONS TO PURCHASE 200,000 SHARES OF CLASS A COMMON STOCK.
(8) INCLUDES OPTIONS TO PURCHASE 101,500 SHARES OF CLASS A COMMON STOCK.
(9) INCLUDES OPTIONS TO PURCHASE 6,000 SHARES OF CLASS A COMMON STOCK.
(10) INCLUDES OPTIONS TO PURCHASE 277,500 SHARES OF CLASS A COMMON STOCK.
<PAGE>9
CERTAIN TRANSACTIONS
On November 15, 1995, Siskon completed a private placement with Vengold
Inc. Siskon received $5 million from the private placement which is comprised
of $2 million for 39,062.5 shares of Siskon's Series 2 Class B common stock, $3
million principal convertible debt, warrants to purchase 2 million shares of
Class A common stock at $3.50 which expired on December 31, 1996 and warrants
to purchase an additional 2 million shares of Class A shares at $4.00 expiring
November 15, 1997. The Series 2 Class B shares convert at the rate of 20
shares of Class A shares for each Series 2 Class B share. The $2 million
Series 2 Class B shares equates to $2.56 per Class A share. The Series 2 Class
B shares have the same rights as the Class A shares except that the Series 2
Class B shareholders have the right to elect two Directors to the Board of
Directors. A Budget Committee of the Board was formed to approve project
budgets for the expenditure of the $5 million. The Committee was comprised of
three Directors, two of which can be appointed by the Series 2 Class B
shareholders.
During 1996, the $5 million in proceeds from the Vengold financing were
expended by Siskon, the Budget Committee was dissolved and the two directors
appointed by the holders of Series 2 Class B shares resigned. Furthermore,
during 1996, the holders of Series 2 Class B shares converted all of their
shares into 781,250 shares of Class A common stock.
In connection with the Vengold private placement on November 15, 1995,
the Seamans converted $1.8 million of their convertible debt into 707,678
shares of common stock at $2.56 per share, and agreed to receive interest at
10% per annum payable in common stock at $2.56 per share for two years and in
cash thereafter, and extend the maturity date of the debt to November 15, 1998.
The debt continues to be secured by the Big Horn and San Juan Mines.
On May 17, 1996, Siskon borrowed $500,000 from Carl Seaman which is
collateralized by the San Juan and Big Horn mines, is due November 15, 1998,
and bears interest at ten percent with the principal and interest convertible
into Class A common stock at $1.75 per share. In connection with the loan, Mr.
Seaman was granted the right to convert $500,000 of the Seaman's existing
convertible debt into Class A common stock at $1.75 per share as well. If a
price placement is completed prior to November 15, 1998, at a price below $1.75
per share, Mr. Seaman would have the right to change the conversion price of
his new note to the same as that under the private placement.
Mr. Callaway, President, Chief Executive Officer and Chairman of the
Board of Directors was paid $19,875 in 1995 for the rental of mining equipment
by Siskon.
Mr. Snead, a prior director of Siskon, was paid $47,950 in 1996 and
$80,625 in 1995 for financial and permitting services provided to Siskon
pursuant to his consulting agreement. Mr. Snead's Contract for Services
provides for monthly consulting fees equal to a minimum of $5,000 per month and
the stock compensation paid to other non-employee Directors. The Contract for
Services expired July 1, 1996. Pursuant to Mr. Snead's original agreement, Mr.
Snead purchased 1,000 shares of Series 1 Class B common stock at $1.00 per
share. Each share of Series 1 Class B common stock is convertible into 100
shares of Class A common stock for every $25,000 raised in equity or debt
financing by, and certain property ventures, acquisitions and leases entered
into by Siskon for a period of two years, and attributed to Mr. Snead's actual
level of involvement or contribution as determined by the Board of Directors
("Vesting Event"). The Series 1 Class B common stock, however, is subject to
repurchase rights by Siskon at $1.00 per share upon a Vesting Event or upon
termination of the Contract for Services. In the event Siskon exercises its
right to repurchase the Series 1 Class B common stock, Mr. Snead will have the
right to receive a percentage of the equity or debt financing proceeds raised
by Siskon and attributed to Mr. Snead. The percentages range from 7% of the
first $1 million to 3% of $5 million or more raised by Siskon.
<PAGE>10
Mr. Bartel, a director of Siskon, is a shareholder of Bartel Eng Linn &
Schroder which was paid $188,749 in 1996 and $184,340 in 1995 for legal
services provided to Siskon.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING FOR ALL NOMINEES FOR THE
ELECTION OF DIRECTORS
PROPOSAL TWO
APPROVAL OF AN AMENDMENT TO THE ARTICLES OF INCORPORATION INCREASING THE
AUTHORIZED NUMBER OF SHARES OF COMMON STOCK FROM 49,500,000 TO 300,000,000
This proposal seeks shareholder approval to amend Article FOURTH of the
Company's Articles of Incorporation to change the aggregate number of shares of
Class A Common Stock which the Company can issue from 49,500,000 to
300,000,000.
Currently, Article FOURTH of the Company's Articles of Incorporation
provide the following:
FOURTH: The aggregate number of shares which the corporation
shall have authority to issue is sixty million (60,000,000), of which
forty-nine million five hundred thousand (49,500,000) shares shall be
Class A common stock, $.001 par value, five hundred thousand (500,000)
shares shall be Class B common stock, $.001 par value, and ten million
(10,000,000) shares shall be preferred stock, $.001 par value.
At a meeting of the Company's Board of Directors held on June 3, 1997,
the Board approved a resolution to amend Article FOURTH of the Company's
Articles of Incorporation by increasing the total shares of Class A common
stock authorized for issuance from 49,500,000 to 300,000,000. Consequently,
Proposal 2 seeks shareholder approval to amend Article FOURTH of the Company's
Articles of Incorporation to read, in pertinent part, as follows:
FOURTH: The aggregate number of shares which the corporation
shall have authority to issue is three hundred ten million five hundred
thousand (310,500,000), of which three hundred million (300,000,000)
shares shall be Class A common stock, $.001 par value, five hundred
thousand (500,000) shares shall be Class B common stock, $.001 par value,
and ten million (10,000,000) shares shall be preferred stock, $.001 par
value.
Due to recent declines in the market value for the Company's Class A
common stock, in order to proceed with additional capital raising activities,
including, but not limited to, a possible shareholder's rights offering, the
Board of Directors believes that it is in the best interest of the Company and
all of its shareholders to increase the number of authorized shares of Class A
common stock from 49,500,000 to 300,000,000.
VOTE REQUIRED
Approval of Proposal 2 will require the affirmative vote of the holders
of at least a majority of the outstanding shares of Siskon Class A and Series 1
Class B common stock voting as a single class. Shareholders of Series A
preferred stock do not have the right to vote on Proposal 2.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING FOR PROPOSAL 2.
<PAGE>11
PROPOSAL THREE
APPROVAL OF
AMENDED STOCK OPTION PLAN
Siskon's Stock Option Plan currently provides for the granting of up to
660,500 shares (after adjustment for the consolidation) of Class A common
stock. On June 4, 1997, subject to shareholder approval, the Board of
Directors approved an amendment to the Stock Option Plan (herein the "Plan") to
increase the number of shares of Class A common stock issuable under the Plan
by an additional 10,000,000 shares in order to assure that the Stock Option
Plan will continue to have sufficient shares to serve as a vehicle to attract
and retain the services of key employees and to help such key employees realize
a direct proprietary interest in Siskon. In addition, the board has amended
the Plan to comply with Rule 16b-3 promulgated by the SEC. The other terms of
the Plan remain unchanged.
DESCRIPTION OF THE PLAN.
The following is a summary of the principal provisions of the Plan in
effect prior to the amendment described in this Proposal Two. The summary is
not intended to be a complete description of all the terms and provisions of
the Plan. Any shareholder of Siskon may obtain a complete copy of the Plan
upon written request to the Secretary of Siskon at its principal office in
Grass Valley, California.
ADMINISTRATION. The Plan is administered by the Stock Option and Compensation
Committee (herein the "Committee"). The Committee is responsible for the
operation of the Plan and, subject to the terms thereof, makes all
determinations regarding (i) participation in the Plan by employees of Siskon
or subsidiaries and (ii) the nature and extent of such participation. The
interpretation and construction of any provisions of the Plan by the Committee
shall be final. The Board may at any time remove a Committee member and
appoint a successor, provided the successor is a disinterested Board member.
The Plan provides that Committee members receive options to purchase
1,500 shares of Class A common stock under the Plan provided that the Committee
member serves as such for the entire year. Committee members shall not
otherwise be entitled to participate in the Plan. Options shall be granted to
Committee members for each year provided that the Committee member has served
as such for the entire year and shall have a term of five years and an exercise
price equal to the closing price of Siskon's Class A common stock as of the
last business day of the calendar year. The options granted to Committee
members shall be subject to similar forfeiture provisions and other
restrictions as other participants under the Plan.
Other than the ability to receive options, Committee members shall serve
without compensation, unless otherwise determined by the Board, provided that
Siskon shall pay the expenses of such members incurred in the administration of
the Plan, subject to approval of the Board.
ELIGIBILITY. The Plan provides for the grant of options to officers, directors
and employees of Siskon (herein "participants"). The Committee determines
which participants are to be granted options under the Plan. The options under
the Plan which have not been granted may be granted to the participants except
that Committee members may only receive options granted to them as Committee
members.
TERMS OF OPTIONS. Each option will be evidenced by a stock option agreement
between Siskon and the participants to whom such option may be granted.
Options granted to persons other than Committee members under the Plan shall
have a term of up to 10 years, as determined by the Committee, and shall be
subject to the following additional terms and conditions:
<PAGE>12
EXERCISE OF THE OPTION. Options shall become exercisable during a period or
during such periods as the Committee shall determine and may be specifically
conditioned upon achieving specified performance goals. An option may be
exercised by giving written notice of exercise to Siskon, specifying the number
of full shares of Class A common stock to be purchased and tendering payment to
Siskon of the purchase price. The Committee may, in its discretion, allow a
participant to pay the option price over such period of time as the Committee
shall, from time to time, designate, provided that the participant shall
execute a promissory note evidencing the debt on such terms and conditions as
is determined by the Committee. Interest at prime rate shall be paid on any
such promissory note and payment of the note in full must occur at the time of
the sale of the underlying stock.
OPTION PRICE. The option price will be determined by the Committee and shall
be the fair market value of Siskon's Class A common stock on the date of grant,
based upon the closing price of the Class A common stock on that date.
EMPLOYMENT AGREEMENT. The Committee may include in an option agreement a
condition that the participant shall agree to remain in the employ of Siskon
for a specified period of time following the date of grant.
TERMINATION OF STATUS AS AN EMPLOYEE OR DIRECTOR. If the participant ceases to
serve as an employee, officer or director of Siskon, the options held by the
optionee may be exercised within 90 days after the date he ceases to be an
employee, officer or director as to all or part of the shares that the optionee
was entitled to exercise at the date of such termination and after such 90-day
period all unexercised options shall terminate. Notwithstanding the foregoing,
in no event may an option be exercised after its term has expired.
DEATH. If an optionee should die while serving as an employee, officer or
director of Siskon, the options held by the participant may be exercised by the
participant's estate at any time within six months after the death and shall
terminate thereafter. If a participant should die within one month after
ceasing to serve as an employee, officer or director of Siskon, the options may
be exercised within six months after the death to the extent the option was
exercisable on the date of such death. Notwithstanding the foregoing, in no
event may an option be exercised after its term has expired.
SUSPENSION OR TERMINATION OF OPTIONS. No options shall be exercisable by any
person after its expiration date. If the Committee reasonably believes that a
participant has committed an act of misconduct, the Committee may suspend the
participant's right to exercise any option pending a final determination by the
Committee. If the Committee determines a participant has committed an act of
embezzlement, fraud, dishonesty, nonpayment of an obligation owed to Siskon,
breach of fiduciary duty or deliberate disregard of Siskon's rules resulting in
loss, damage or injury to Siskon, or if a participant makes an unauthorized
disclosure of any Siskon trade secret or confidential information, engages in
any conduct constituting unfair competition, induces any Siskon customer to
breach a contract with Siskon, or induces any principal for whom Siskon acts as
an agent to terminate such agency relationship, neither the participant nor his
or her estate shall be entitled to exercise any option whatsoever. In making
such determination, the Committee shall act fairly and in good faith and shall
give the participant an opportunity to appear and present evidence on the
participant's behalf at a hearing before the Committee. The determination of
the Committee shall be final and conclusive unless overruled by the Board of
Directors.
NONTRANSFERABILITY OF OPTIONS. An option is nontransferable, other than by
will or the laws of descent and distribution, and is exercisable only by the
participant during his or her lifetime or, in the event of death, by the
executors, administrators, legatees or heirs of his or her estate during the
time period provided above.
<PAGE>13
HOLDING REQUIREMENTS. Options granted to officers or directors pursuant to the
Plan will not be subject to any holding requirements unless otherwise stated in
the Stock Option Agreement.
OTHER PROVISIONS. The option agreement may contain such other terms,
provisions and conditions not inconsistent with the Plan as may be determined
by the Committee.
ADJUSTMENT UPON CHANGES IN CAPITALIZATION. In the event any change, such as
stock split, is made in Siskon's capitalization which results in an exchange of
Class A common stock for a greater or lesser number of shares, an appropriate
adjustment shall be made in the option price and in the number of shares
subject to the option. In the event of the proposed dissolution or liquidation
of Siskon, all outstanding options shall automatically terminate, provided that
the participant shall have the right, immediately prior to the dissolution or
liquidation, to exercise his or her options. In the event of the sale of all
or substantially all of Siskon's assets or the merger of Siskon with or into
another corporation, (i) if Siskon is the surviving corporation following a
merger or consolidation each option shall, upon exercise, entitle the holder to
the issuance of securities to which a holder of the number of shares of Class A
common stock subject to the option would be entitled after the merger or
consolidation, or (ii) all options shall otherwise terminate, provided that the
participant shall have the right, immediately prior to the merger,
consolidation, dissolution or liquidation to exercise his or her options.
AMENDMENT AND TERMINATION. The Board of Directors may amend the Plan at any
time or from time to time or may terminate it without approval of the
shareholders; provided, however, that shareholder approval is required for any
amendment which increases the number of shares for which options may be
granted, changes the designation of the class of persons eligible to be granted
options, or materially increases the benefits which may accrue to participants
under the Plan. Notwithstanding the foregoing, no action by the Board of
Directors or shareholders may alter or impair any option previously granted
under the Plan without the consent of the participant.
VOTE REQUIRED
The affirmative vote of the majority of shares of Class A common stock
and Series 1 Class B common stock present or represented and voting as a class
at the Meeting is required to approve Proposal Two.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPROVAL OF
AMENDMENTS TO THE SISKON STOCK OPTION PLAN.
PROPOSAL FOUR
APPROVAL OF REINCORPORATION
The Board of Directors has unanimously approved, subject to shareholder
approval, a change in Siskon's State of incorporation from California to Nevada
with the formation of a holding company corporate structure.
The board believes that the laws of the State of Nevada are favorable to
mining companies. Many major mining companies are incorporated in Nevada.
Siskon believes that incorporation to the State of Nevada and the formation of
a holding company will provide it with flexibility for future financings,
including, but not limited to, a possible rights offering to existing
shareholders.
<PAGE>14
In the following discussion of Proposal Three, the term "Siskon" refers
to the existing company and the term "Siskon-Nevada" refers to Siskon Gold
Corporation, a Nevada corporation, a wholly-owned subsidiary of Siskon, and the
term "Siskon-California" refers to the wholly-owned subsidiary of Siskon-Nevada
who will merge with Siskon.
Siskon-Nevada was formed for the specific purpose of effectuating the
reincorporation to the State of Nevada. Siskon-Nevada's authorized number of
common stock is 300 million and authorized number of preferred stock is 10
million. The authorized number of common stock of Siskon-Nevada is
substantially higher than the authorized number of common stock of Siskon. The
board decided to increase the number of authorized common and preferred stock
in contemplation of a possible rights offering to its existing shareholders.
GENERAL
The proposed reincorporation will be effected by the creation of Siskon-
Nevada and the creation of Siskon-California as a wholly-owned subsidiary of
Siskon-Nevada. Pursuant to an Agreement of Merger, substantially in the form
attached hereto as Exhibit A (the "Merger Agreement"), Siskon will merge with
and into Siskon-California and the shareholders of Siskon will become
shareholders of Siskon-Nevada.
Upon the effectiveness of the Merger (the "Effective Date"), (i) the
legal existence of Siskon-California as a separate corporation will cease, (ii)
Siskon will succeed to the assets and assume the liabilities of Siskon-
California, and (iii) each outstanding share of Siskon common stock (Class A
and Series 1 Class B) $.001 par value, and each share of Series A preferred
stock, $.001 par value, will automatically be converted into one share of
common stock (Class A or Series 1 Class B, as the case may be), $.001 par
value, or one share of Series A preferred stock, $.001 par value, of Siskon-
Nevada (the "Nevada Stock"). Each outstanding certificate representing a share
or shares of Siskon Class A or Series 1 Class B common stock or Series A
preferred stock will continue to represent the same number of respective shares
of Siskon-Nevada. THUS, IT WILL NOT BE NECESSARY FOR SHAREHOLDERS OF SISKON TO
EXCHANGE THEIR EXISTING STOCK CERTIFICATES FOR STOCK CERTIFICATES OF SISKON-
NEVADA. It is anticipated that subsequent to the Merger and the conversion of
the Siskon Class A common stock into Siskon-Nevada Class A common stock, the
Siskon Class A common stock will be quoted on the OTC Bulletin Board without
interruption, and that the delivery of existing Siskon-Nevada Class A or
Series 1 Class B common stock or Series A preferred stock certificates will
constitute "good delivery" of shares of Siskon-Nevada in transactions
subsequent to the Merger.
Implementation of the Proposal Four will effect a change in the legal
domicile of Siskon by the creation of a Nevada holding company and certain
other changes of a legal nature, but will not result in change in the name,
business, management, location of the principal executive offices, or assets,
liabilities or net worth of Siskon (on a consolidated basis). Further, except
as explained herein, Proposal Four will not result in any substantial
differences between the charter documents of Siskon and Siskon-Nevada, other
than the establishment of a holding company structure with Siskon as a
subsidiary of Siskon-Nevada. However, as a result of the corporate laws of the
States of California and Nevada which differ in some areas, some differences
between the charter documents of Siskon and Siskon-Nevada do exist. See
"Principal Differences Between the Bylaws of Siskon and Siskon-Nevada."
Siskon's stock option plan, including any amendments thereto, will become
Siskon-Nevada's stock option plan, and each outstanding option issued pursuant
thereto will automatically be converted into an option to purchase the same
number of shares of Siskon-Nevada stock, at the same option price per share and
upon the same terms and subject to the same conditions as set forth in such
stock option plans. Siskon's other employee benefit plans and arrangements
will also become Siskon-Nevada's employee benefit plans upon the same terms and
subject to the same conditions.
<PAGE>15
In accordance with California law, the affirmative vote of the holders of
at least a majority of the outstanding shares of Siskon Class A common stock,
Series 1 Class B common stock, and Series A preferred stock voting as separate
classes is required for approval of Proposal Four, including approval of the
Merger Agreement and the other terms of the proposed Merger. It is anticipated
that the Merger will become effective as soon as practicable following
shareholder approval. However, pursuant to the Merger Agreement, the Merger
(and thus the proposed Reincorporation) may be abandoned, even after
shareholder approval has been obtained, if circumstances arise which, in the
opinion of Siskon's Board of Directors, make it inadvisable to proceed with the
Merger. In addition, the Merger Agreement may be amended prior to the
Effective Date, either before or after shareholder approval thereof, subject to
applicable law. Under California law, dissenters' appraisal rights are not
available to holders of Siskon's Class A and Series 1 Class B common stock and
Series A preferred stock in connection with Proposal Four.
PRINCIPAL REASONS FOR REINCORPORATION
Siskon believes that the creation of a holding company under Nevada law
will facilitate future capital raising including, but not limited to, a
possible rights offering to existing shareholders.
POSSIBLE DISADVANTAGES
Siskon believes that there are no material disadvantages to Proposal
Four, although, as discussed below, Nevada law tends to provide management with
more corporate flexibility than California law.
SIGNIFICANT DIFFERENCES BETWEEN THE CORPORATION LAWS OF CALIFORNIA AND NEVADA
The corporation laws of California and Nevada differ in a number of
respects. It is impracticable to summarize all of the differences in this
Proxy Statement, but certain significant differences between the corporation
laws of California and Nevada that could materially affect the rights of
shareholders of Siskon are as follows:
1. CLASSIFICATION OF THE BOARD OF DIRECTORS. California law permits,
but does not require, the adoption of a classified Board of Directors pursuant
to which the directors can be divided into as many as three classes with
staggered terms of office and with only one class of directors coming up for
election each year. Although California law allows the future classification
of the Board of Directors upon a vote of the stockholders, Siskon's Articles of
Incorporation do not currently provide for a classified board. Nevada law
states that the bylaws or articles may provide for the classification of
directors upon the vote of shareholders. The Articles of Incorporation of
Siskon-Nevada do not provide for a classified board of directors.
2. CUMULATIVE VOTING FOR DIRECTORS. Under cumulative voting, each
share of stock entitled to vote in the election of directors has a number of
votes equal to the number of directors to be elected. A shareholder may then
cast all of his votes for a single candidate, or may allocate them among as
many candidates as such shareholder may choose. Under California law, a
company with securities listed on the NASDAQ National Market System may
eliminate cumulative voting either in its articles of incorporation or bylaws.
Consequently, when Siskon's Class A Common Stock was listed on the NASDAQ
National Market System, Siskon's shareholders eliminated such cumulative
voting. Under Nevada law, shares may not be cumulatively voted for the
election of directors unless the articles of incorporation specifically
provides for cumulative voting. The Articles of Incorporation of Siskon-Nevada
do not provide for cumulative voting in the election of directors.
3. CHANGE IN NUMBER OF DIRECTORS. Under California law, the board of
directors may fix the exact number of directors or fix the exact number of
directors within a range provided in the articles of incorporation or bylaws,
<PAGE>16
but any change in the range must be approved by the shareholders. If no range
is provided, any change in the authorized number of directors must be approved
by the shareholders. The number of directors under Nevada law is similar to
California law. The number of directors for Siskon-Nevada will not be less
than five and more than nine.
4. REMOVAL OF DIRECTORS. Under California law, a director may be
removed without cause by shareholder vote, provided that the shares voted
against such removal would not be sufficient to elect the director under
cumulative voting rules. Under Nevada law, unless the articles of
incorporation provide for a greater percentage any director may be removed from
office by the vote of stockholders representing two-thirds of the outstanding
voting power. In the event of cumulative voting, no director may be removed
except on the vote of stockholders owning sufficient shares to have prevented
his election to office in the first instance. Siskon-Nevada's articles of
incorporation do not provide for a greater percentage than state law to remove
a director.
5. LIMITATION ON CALL OF SPECIAL MEETINGS OF SHAREHOLDERS. The
Siskon-Nevada Bylaws, like Siskon's current Bylaws, provide that such meetings
may be called by the Chairman of the Board of Directors, the President, or by
shareholders entitled to cast not less than 10% of the votes at the meeting.
Under Nevada law, a special meeting of shareholders may be called by the Board
of Directors, the chairman of the board, the president, the holders of shares
entitled to cast not less than 10% of the votes at the special meeting, or such
additional persons as may be provided in the articles of incorporation or
bylaws. Limitation of shareholders' rights to call special meetings would
generally be considered to have an anti-takeover effect.
6. SHAREHOLDER VOTE FOR MERGERS. Nevada law relating to mergers and
other corporate reorganizations differs from California law in a number of
respects. Generally, California law requires a shareholder vote in more
situations than does Nevada law. Nevada law provides for a shareholder vote
(except as indicated below and for certain mergers between a parent company and
its 90% owned subsidiary) by both the acquiring and acquired corporations to
approve mergers and by shareholders of the acquired corporation for the sale by
a corporation of substantially all of its assets. California law, in addition
to requiring a shareholder vote in the foregoing circumstances, provides for a
shareholder vote of an acquiring corporation in either share-for-share
exchanges or sale of assets reorganizations and a shareholder vote of any
parent corporation whose equity securities are being issued or transferred in
connection with a corporate reorganization. California law generally requires
a class vote when a vote is required, whereas Nevada law generally does not.
Nevada law does not require a shareholder vote of the surviving
corporation in a merger if (a) the merger agreement does not amend the existing
certificate of incorporation, (b) each outstanding share of the surviving
corporation before the merger is unchanged, and (c) the number of shares to be
issued by the surviving corporation in the merger does not exceed 20% of the
shares outstanding immediately prior to such issuance. California law contains
a similar exception to shareholder voting requirements for reorganizations
where shareholder control is not diluted more than one-sixth (1/6) as a result
of the reorganization, although in California the dilution test applies to both
surviving and nonsurviving corporations involved in the merger or
reorganization.
7. DISSENTERS' RIGHTS. Under both California and Nevada law, a
shareholder of a corporation participating in certain major corporate
transactions may, under varying circumstances, be entitled to receive cash
equal to the fair market value of the shares held by such shareholder (as
determined by a court of competent jurisdiction or by agreement of the
shareholder and the corporation), in lieu of the consideration such shareholder
would otherwise receive in the transaction. The laws of California and Nevada
differ with respect to the circumstances under which dissenters' rights of
appraisal are available. Nevada law does not require dissenters' rights with
respect to (a) a sale-of-assets reorganization, (b) a merger by a corporation,
the shares of which are either listed on a national securities exchange or
widely-held (by more than 2,000 shareholders of record) if shareholders receive
shares of the surviving corporation or of a listed or widely-held corporation,
or (c) a merger in which the corporation is the surviving corporation provided
<PAGE>17
that no vote of its shareholders is required to approve the merger. (For a
discussion of the circumstances in which a vote of shareholders is not
required, see "Shareholder Vote for Mergers"). California law does, in
general, afford dissenters' rights in a sale-of-assets reorganization, and the
exclusions from dissenters' rights in mergers are somewhat different from those
in Nevada. For example, in the case of a corporation whose shares are listed
on a national securities exchange, dissenters' rights would nevertheless be
available in certain transactions for any shares with respect to which there
are certain restrictions on transfer and for any class with respect to which 5%
or more of such class claims dissenters' rights. Also, under California law,
shareholders of a corporation involved in a reorganization are not entitled to
dissenters' rights if the corporation, or its shareholders immediately before
the reorganization, or both, will own more than five-sixths (5/6) of the voting
power of the surviving or acquiring corporation or its parent entity.
8. LOANS TO OFFICERS. Under Nevada law, there is no specific
restriction with respect to a corporation's making loans to, guarantying the
obligations of, or otherwise assisting its officers or employees and those of
its subsidiaries. However, such transactions may be void or voidable if the
transaction at issue is not fair to the corporation at the time it is
authorized or approved by the board. Under California law, a corporation may
only make such a loan to, or guarantee for the benefit of, officers if such
loan or guarantee is approved by a majority of the corporation's shareholders
or, for corporations with 100 or more shareholders of record, by its board of
directors pursuant to a shareholder-approved bylaw. The Bylaws of Siskon have
such a bylaw and the bylaws of Siskon-Nevada will have a similar bylaw.
9. INDEMNIFICATION. California and Nevada have similar laws with
respect to indemnification by a corporation of its officers, directors,
employees and other agents, although Nevada's laws with respect to
indemnification are slightly more permissive. For example, the laws of both
states permit corporations to adopt a provision in their charter eliminating
the liability of a director (and also an officer in the case of Nevada) to the
corporation or its shareholders for monetary damages for breach of the
director's fiduciary duty of care (and the fiduciary duty of loyalty as well in
the case of Nevada). There are nonetheless certain differences between the
laws of the two states respecting indemnification and limitation of liability.
The Articles of Incorporation of Siskon eliminate the liability of
directors to the fullest extent permissible under California law. California
law does not permit the elimination of monetary liability where such liability
is based on: (a) intentional misconduct or knowing and culpable violation of
law; (b) acts or omissions that a director believes to be contrary to the best
interests of the corporation or its shareholders, or that involve the absence
of good faith on the part of the director; (c) receipt of an improper personal
benefit; (d) acts or omissions that show reckless disregard of the director's
duty to the corporation or its shareholders, where the director in the ordinary
course of performing a director's duties should be aware of a risk of serious
injury to the corporation or its shareholders; (e) acts or omissions that
constitute an unexcused pattern of inattention that amounts to an abdication of
the director's duty to the corporation and its shareholders; (f) interested
transactions between the corporation and a director in which a director has a
material financial interest; and (g) liability for improper distributions,
loans or guarantees.
The Articles of Incorporation of Siskon-Nevada likewise eliminates the
liability of directors and officers to the fullest extent permissible under
Nevada law. Under Nevada law, such provision may not eliminate or limit
director or officer liability for: (a) acts or omissions which involve
intentional misconduct, fraud, or a knowing violation of law; or (b) the
payment of unlawful dividends or distributions.
The limitations of liability provisions permissible under California and
Nevada law also may not limit a director's liability for violation of, or
otherwise relieve Siskon or its directors from the necessity of complying with,
federal or state securities laws, or affect the availability of non-monetary
remedies such as injunctive relief or rescission.
<PAGE>18
California law permits indemnification of expenses incurred in derivative
or third-party actions, except that with respect to derivative actions (a) no
indemnification may be made without court approval when a person is adjudged
liable to the corporation in the performance of that person's duty to the
corporation and its shareholders, unless a court determines such person is
entitled to indemnity for expenses, and then such indemnification may be made
only to the extent that such court shall determine, and (b) no indemnification
may be made without court approval in respect of amounts paid or expenses
incurred in settling or otherwise disposing of a threatened or pending action
or amounts incurred in defending a pending action which is settled or otherwise
disposed of without court approval.
Indemnification is permitted by California law only for acts taken in
good faith and believed to be in the best interests of the corporation and its
shareholders, as determined by a majority vote of a disinterested quorum of the
directors, independent legal counsel (if a quorum of independent directors is
not obtainable), a majority vote of a quorum of the shareholders (excluding
shares owned by the indemnified party) or the court handling the action.
California law requires indemnification when the individual has
successfully defended the action on the merits (as opposed to Nevada law which
requires indemnification relating to a successful defense on the merits or
otherwise). Nevada law generally permits indemnification of expenses incurred
in the defense or settlement of a derivative or third-party action, provided
there is a determination by a disinterested quorum of the directors, by
independent legal counsel, or by a majority vote of a quorum of the
stockholders that indemnification is proper in the circumstances. Without
court approval, however, no indemnification may be made in respect of any
derivative action in which such person is adjudged liable for negligence or
misconduct in the performance of his or her duty to the corporation.
10. INSPECTION OF SHAREHOLDERS' LIST. Nevada law permits any person
who has been a shareholder of record for at least 6 months, or any person
holding at least 5% of all outstanding shares, to inspect the shareholders'
list of a corporation for a purpose reasonably related to such person's
interest as a shareholder. California law provides for an absolute right of
inspection of a shareholders' list for persons holding 5% or more of the
corporation's voting shares or persons holding 1% or more of such shares who
have filed a Schedule 14B with the Securities and Exchange Commission relating
to the election of directors. (Generally, a Schedule 14B must be filed by any
shareholder engaged in the solicitation of proxies, as such terms are defined
by the federal securities laws, in connection with a contested election of
directors.)
11. PAYMENTS OF DIVIDENDS. Nevada law permits the payment of dividends
if, after the dividends have been paid, the corporation is able to pay its
debts as they become due in the usual course of business (equity test for
insolvency), and the corporation's total assets are not less than the sum of
its total liabilities plus the amount that would be needed, if the corporation
were to be dissolved at the time of the dividend payment, to satisfy the
preferential rights upon dissolution of stockholders whose preferential rights
are superior to those receiving the dividend (balance sheet test for
insolvency). In addition, Nevada law generally provides that a corporation may
redeem or repurchase its shares only if the same equity and balance sheet tests
for insolvency are satisfied. In determining whether the balance sheet test
has been satisfied, the board may: (i) use financial statements prepared on the
basis of accounting practices that are reasonable under the circumstances; (ii)
make its determination based on a fair valuation, including, but not limited
to, unrealized appreciation and depreciation; or (iii) make its determination
based upon any other method that is reasonable in the circumstances.
Under California law, any distributions (including dividends and
repurchases of shares) are limited either to retained earnings or to an amount
that would leave the corporation with tangible assets in an amount equal to at
least 125% of its tangible liabilities and with current assets in an amount at
least equal to its current liabilities (or 125% of its current liabilities if
<PAGE>19
the average pre-tax and pre-interest earnings for the preceding two fiscal
years were less than the average interest expenses for such years). Such
limitations are applied on a consolidated basis.
12. STOCK SPLITS AND REVERSE STOCK SPLITS. Under California law, no
shareholder approval is necessary for a corporation to effect a stock split by
an amendment to its articles of incorporation. However, shareholder approval
is necessary to effect a reverse stock split. Under Nevada law, the board of
directors may effect a stock split or reverse stock split without shareholder
approval provided that the stock split or reverse stock split is applied on the
outstanding and authorized shares proportionally.
PRINCIPAL DIFFERENCES BETWEEN THE BYLAWS OF SISKON-NEVADA AND SISKON-
CALIFORNIA.
The Bylaws of Siskon-California will differ from the Bylaws of Siskon-
Nevada in the following principal respects:
1. SIZE OF BOARD OF DIRECTORS. Pursuant to Section 2 of Article III
of Siskon-Nevada's Bylaws, the number of directors will be not less than three
nor more than nine. The number or range of authorized directors of Siskon-
Nevada can be changed by Board resolution alone through an amendment to the
Bylaws.
Under California law, although changes in the number of authorized
directors can only be made with the approval of the majority of the outstanding
shares, the board of directors may fix the exact number of directors within a
stated range set forth in the articles or Bylaws if that stated range has been
approved by the shareholders.
The Bylaws of Siskon-Nevada will initially provide that the authorized
number of directors will be not less than three nor more than nine. If the
Reincorporation Proposal is approved, the directors of Siskon-California on the
Effective Date of the Merger will continue to serve as directors of Siskon-
Nevada after the Merger.
2. LOANS TO OFFICERS. Under California law, a board of directors of a
corporation, acting alone, may approve a loan or guaranty to an officer, or
approve an employee benefit plan authorizing such a loan or guaranty, if a
bylaw approved by the shareholders authorizes the board to so act. Section 16
of Article III of Siskon's Bylaws authorizes the board to approve such a loan
or guaranty to officers. Such board approval, however, would need a vote
sufficient without counting the vote of any interested director and the board
must determine that such a loan or guaranty or plan may reasonably be expected
to benefit the corporation.
Under Nevada law, the board of directors, acting alone, could approve
such a loan without a bylaw approved by the shareholders.
FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER
No gain or loss will be recognized to Siskon with respect to the transfer
of its assets to Siskon-California, a wholly-owned subsidiary of Siskon-Nevada,
solely in exchange for shares of Siskon-Nevada and the assumption by Siskon of
the liabilities of Siskon-California (Internal Revenue Code Sections
sections 361(a) and 357(a)). References to sections herein
constitute references to the Internal Revenue Code of 1986, as amended.
No gain or loss will be recognized to Siskon-California upon the receipt
of the assets of Siskon in exchange for Siskon-Nevada common stock or Series A
preferred stock (section 1032(a)). The basis of the assets of Siskon in the
hands of Siskon-California will be the same as the basis of such assets in the
hands of Siskon immediately prior to the exchange (section 362(b)).
<PAGE>20
The holding period of the assets of Siskon acquired by Siskon-California
will include the period during which those assets were held by Siskon
immediately prior to the exchange (<section>1223(2)).
No gain or loss will be recognized to the shareholders of Siskon upon the
receipt of Siskon-Nevada common stock or Series A preferred stock solely in
exchange for their Siskon common stock or Series A preferred stock
(section 354(a)(1)). The basis of the shares of Siskon-Nevada common stock or
Series A preferred stock received by shareholders of Siskon will be, in each
instance, the same as the basis of the Siskon common stock or Series A
preferred stock surrendered in exchange therefor (section 358(a)(1)). The
holding period of the Siskon-Nevada common stock or Series A preferred stock to
be received by the shareholders of Siskon will include the holding period of
the Siskon common stock or Series A preferred stock surrendered in exchange
therefor, provided the shares of Siskon common stock or Series A preferred
stock were held as a capital asset on the date of the exchange
(section 1223(1)).
For the purpose of section 381 of the Code, Siskon-Nevada will be
treated as if there had been no reorganization. Accordingly, the taxable year
of Siskon will not end on the Effective Date of the Merger and the tax
attributes of Siskon enumerated in section 381(c) shall be taken into account
by Siskon-Nevada as if there had been no reorganization (section 1.381(b)-
1(a)(2) of the Income Tax Regulations). The part of the taxable year of Siskon
before the reorganization and the part of the taxable year of Siskon-Nevada
after the reorganization will constitute a single tax year of Siskon-Nevada
and, therefore, Siskon will not be required to file a federal income tax return
for any portion of such taxable year (Revenue Ruling 57-276, 1957-1 C.B. 126).
RIGHTS OF DISSENTING SHAREHOLDERS
Dissenters' rights are not available to holders of Siskon's Class A and
Series 1 Class B common stock and Series A preferred stock with respect to
Proposal Four.
VOTE REQUIRED
Approval of Proposal Four will require the affirmative vote of the
holders of at least a majority of the outstanding shares of Siskon Class A and
Series 1 Class B common stock and Series A preferred stock voting separately as
classes.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING FOR PROPOSAL FOUR.
OTHER MATTERS
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
For the calendar year 1997, the Board of Directors will retain Coopers &
Lybrand L.L.P. for its annual audit. A representative of Coopers & Lybrand
L.L.P. may be present at the 1996 Annual Meeting of Shareholders to be
available to respond to appropriate questions from shareholders.
OTHER MATTERS
As of the date of this proxy statement, the Board of Directors of Siskon
knows of no other matters that may or are likely to be presented at the
Meeting. However, in event other matters are presented at the Meeting, the
persons named in the enclosed form of proxy will vote such proxy in accordance
with their best judgement in such matters pursuant to discretionary authority
granted in the proxy.
<PAGE>21
SHAREHOLDER PROPOSALS
Shareholder proposals to be included in the Siskon's proxy statement and
proxy for its 1998 Annual Meeting must meet the requirements of Rule 14a-8
promulgated by the SEC and must be received by Siskon no later than December
28, 1998.
ADDITIONAL INFORMATION
Accompanying or preceding this proxy statement, each shareholder has
received Siskon's 1996 Annual Report containing Siskon's 1996 audited financial
statements, including the report of its independent public accountants. Upon
receipt of a written request, Siskon will furnish to any shareholder, without
charge, a copy of Siskon's 1996 Form 10-KSB filed with the SEC under the
Securities Exchange Act of 1934 (including the financial statements but not
including the exhibits thereto). Shareholders should direct any request to
Siskon Gold Corporation, 350 Crown Point Circle, Suite 100, Grass Valley,
California 95945, Attention: Michael K. Epstein, Corporate Secretary.
SISKON GOLD CORPORATION
By Order of the Board of Directors
MICHAEL K. EPSTEIN
Michael K. Epstein, Corporate Secretary
Grass Valley, California
June 11, 1997
<PAGE>
SISKON GOLD CORPORATION
350 Crown Point Circle, Suite 100, Grass Valley, CA 95945
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
THE UNDERSIGNED HEREBY APPOINTS MICHAEL K. EPSTEIN AND TIMOTHY A.
CALLAWAY, AND EACH OF THEM, AS PROXIES WITH THE POWER TO APPOINT HIS OR HER OR
THEIR SUCCESSOR, AND HEREBY AUTHORIZES THEM TO REPRESENT AND TO VOTE, AS
DESIGNATED BELOW, ALL THE SHARES OF CLASS A COMMON STOCK OF SISKON GOLD
CORPORATION ("SISKON"), HELD OF RECORD BY THE UNDERSIGNED ON JUNE 10, 1997, AT
THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON AUGUST 4, 1997, AT 10:00 A.M.
(PACIFIC TIME), AT THE OFFICES OF BARTEL ENG LINN & SCHRODER, 300 CAPITOL MALL,
SUITE 1100, SACRAMENTO, CALIFORNIA 95814 AND AT ANY AND ALL ADJOURNMENTS
THEREOF.
1. ELECTION OF DIRECTORS.
FOR ALL NOMINEES LISTED BELOW _____ WITHOUT AUTHORITY ____
(EXCEPT AS MARKED TO THE CONTRARY BELOW) (TO VOTE FOR ALL NOMINEES
BELOW)
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
TIMOTHY A. CALLAWAY MICHAEL K. EPSTEIN
SCOTT E. BARTEL DAVID A. LAWLER
2. A PROPOSAL TO AMEND THE ARTICLES OF INCORPORATION INCREASING THE
AUTHORIZED NUMBER OF SHARES OF COMMON STOCK FROM 49,500,000 TO
300,000,000.
FOR _______ AGAINST _________ ABSTAIN _____
3. A PROPOSAL TO AMEND THE SISKON STOCK OPTION PLAN TO INCREASE THE NUMBER
OF SHARES SUBJECT TO THE PLAN FROM 660,500 SHARES TO 10,000,000 SHARES.
FOR _______ AGAINST _________ ABSTAIN _____
4. A PROPOSAL TO REINCORPORATE SISKON FROM THE STATE OF CALIFORNIA TO
NEVADA.
FOR _______ AGAINST _________ ABSTAIN _____
5. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR THE NOMINEES AND FOR PROPOSAL NOS. 2, 3 AND 4.
PLEASE SIGN EXACTLY AS NAME APPEARS ON THE SHARE CERTIFICATES. WHEN
SHARES ARE HELD BY JOINT TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY,
EXECUTOR, ADMINISTRATOR, TRUSTEE, OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH.
IF A CORPORATION, PLEASE SIGN IN FULL CORPORATE NAME BY PRESIDENT OR OTHER
AUTHORIZED OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY
AUTHORIZED PERSON.
__________________________________ __________________________________
NAME (PRINT) NAME (PRINT) (IF HELD JOINTLY)
DATED: ____________
__________________________________ __________________________________
SIGNATURE SIGNATURE (IF HELD JOINTLY)
__________________________________ _________________________________
__________________________________ _________________________________
(ADDRESS) (ADDRESS)
I WILL ___ WILL NOT ___ ATTEND THE MEETING.
NUMBER OF PERSONS TO ATTEND _____.
PLEASE MARK, SIGN, DATE, AND RETURN THE PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
<PAGE>
SISKON GOLD CORPORATION
350 Crown Point Circle, Suite 100, Grass Valley, CA 95945
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
THE UNDERSIGNED HEREBY APPOINTS MICHAEL K. EPSTEIN AND TIMOTHY A.
CALLAWAY, AND EACH OF THEM, AS PROXIES WITH THE POWER TO APPOINT HIS OR HER OR
THEIR SUCCESSOR, AND HEREBY AUTHORIZES THEM TO REPRESENT AND TO VOTE, AS
DESIGNATED BELOW, ALL THE SHARES OF SERIES 1 CLASS B COMMON STOCK OF SISKON
GOLD CORPORATION ("SISKON"), HELD OF RECORD BY THE UNDERSIGNED ON JUNE 10,
1997, AT THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON AUGUST 4, 1997, AT
10:00 A.M. (PACIFIC TIME), AT THE OFFICES OF BARTEL ENG LINN & SCHRODER, 300
CAPITOL MALL, SUITE 1100, SACRAMENTO, CALIFORNIA 95814 AND AT ANY AND ALL
ADJOURNMENTS THEREOF.
1. ELECTION OF DIRECTORS.
FOR ALL NOMINEES LISTED BELOW _____ WITHOUT AUTHORITY ____
(EXCEPT AS MARKED TO THE CONTRARY BELOW) (TO VOTE FOR ALL NOMINEES
BELOW)
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
TIMOTHY A. CALLAWAY MICHAEL K. EPSTEIN
SCOTT E. BARTEL DAVID A. LAWLER
2. A PROPOSAL TO AMEND THE ARTICLES OF INCORPORATION INCREASING THE
AUTHORIZED NUMBER OF SHARES OF COMMON STOCK FROM 49,500,000 TO
300,000,000.
FOR _______ AGAINST _________ ABSTAIN _____
3. A PROPOSAL TO AMEND THE SISKON STOCK OPTION PLAN TO INCREASE THE NUMBER
OF SHARES SUBJECT TO THE PLAN FROM 660,500 SHARES TO 10,000,000 SHARES.
FOR _________ AGAINST _________ ABSTAIN _____
4. A PROPOSAL TO REINCORPORATE SISKON FROM THE STATE OF CALIFORNIA TO
NEVADA.
FOR _______ AGAINST _________ ABSTAIN _____
5. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR THE NOMINEES AND FOR PROPOSAL NOS. 2, 3 AND 4.
PLEASE SIGN EXACTLY AS NAME APPEARS ON THE SHARE CERTIFICATES. WHEN
SHARES ARE HELD BY JOINT TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY,
EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH.
IF A CORPORATION, PLEASE SIGN IN FULL CORPORATE NAME BY PRESIDENT OR OTHER
AUTHORIZED OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY
AUTHORIZED PERSON.
__________________________________ __________________________________
NAME (PRINT) NAME (PRINT) (IF HELD JOINTLY)
DATED: ____________
__________________________________ __________________________________
SIGNATURE SIGNATURE (IF HELD JOINTLY)
__________________________________ _________________________________
__________________________________ _________________________________
(ADDRESS) (ADDRESS)
I WILL ___ WILL NOT ___ ATTEND THE MEETING.
NUMBER OF PERSONS TO ATTEND _____.
PLEASE MARK, SIGN, DATE, AND RETURN THE PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
<PAGE>
SISKON GOLD CORPORATION
350 Crown Point Circle, Suite 100, Grass Valley, CA 95945
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
THE UNDERSIGNED HEREBY APPOINTS MICHAEL K. EPSTEIN AND TIMOTHY A.
CALLAWAY, AND EACH OF THEM, AS PROXIES WITH THE POWER TO APPOINT HIS OR HER OR
THEIR SUCCESSOR, AND HEREBY AUTHORIZES THEM TO REPRESENT AND TO VOTE, AS
DESIGNATED BELOW, ALL THE SHARES OF SERIES A CONVERTIBLE PREFERRED STOCK OF
SISKON GOLD CORPORATION ("SISKON"), HELD OF RECORD BY THE UNDERSIGNED ON JUNE
10, 1997, AT THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON AUGUST 4, 1997,
AT 10:00 A.M. (PACIFIC TIME), AT THE OFFICES OF BARTEL ENG LINN & SCHRODER, 300
CAPITOL MALL, SUITE 1100, SACRAMENTO, CALIFORNIA 95814 AND AT ANY AND ALL
ADJOURNMENTS THEREOF.
4. A PROPOSAL TO REINCORPORATE SISKON FROM THE STATE OF CALIFORNIA TO
NEVADA.
FOR _______ AGAINST _________ ABSTAIN _____
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR PROPOSAL NO. 4.
PLEASE SIGN EXACTLY AS NAME APPEARS ON THE SHARE CERTIFICATES. WHEN
SHARES ARE HELD BY JOINT TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY,
EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH.
IF A CORPORATION, PLEASE SIGN IN FULL CORPORATE NAME BY PRESIDENT OR OTHER
AUTHORIZED OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY
AUTHORIZED PERSON.
__________________________________ __________________________________
NAME (PRINT) NAME (PRINT) (IF HELD JOINTLY)
DATED: ____________
__________________________________ __________________________________
SIGNATURE SIGNATURE (IF HELD JOINTLY)
__________________________________ _________________________________
__________________________________ _________________________________
(ADDRESS) (ADDRESS)
I WILL ___ WILL NOT ___ ATTEND THE MEETING.
NUMBER OF PERSONS TO ATTEND _____.
PLEASE MARK, SIGN, DATE, AND RETURN THE PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
<PAGE>A-1
EXHIBIT A
FORM OF AGREEMENT OF MERGER
THIS AGREEMENT OF MERGER (this "Agreement") is entered into as of this
___ day of _________, 1997, between Siskon Gold Acquisition Corporation, a
California corporation ("Acquisition Corp."), Siskon Gold Corporation, a
California corporation ("Siskon-California") and Siskon Gold Corporation, a
Nevada corporation ("Siskon-Nevada"). (Acquisition Corp., Siskon-
California and Siskon-Nevada are hereinafter collectively referred to as
the "Constituent Corporations").
WHEREAS, Siskon-Nevada is a wholly-owned subsidiary of Siskon-
California; and
WHEREAS, Acquisition Corp. is a wholly-owned subsidiary of Siskon-
Nevada; and
WHEREAS, the respective Boards of Directors of the Constituent
Corporations have determined that, for the purpose of effecting the
reincorporation of Siskon-California in the State of Nevada, it is
advisable and to the advantage of the corporations to utilize a holding
company corporate structure; and
WHEREAS, in connection therewith and to facilitate the
reincorporation, Siskon-California will merge with and into Acquisition
Corp. and the shareholders of Siskon-California will become shareholders of
Siskon-Nevada (the "Merger") and upon the effectiveness of the Merger,
provided herein, the legal existence of Acquisition Corp. as a separate
corporation will cease and Siskon-California will become a wholly-owned
subsidiary of Siskon-Nevada.
NOW, THEREFORE, in consideration of the premises and mutual agreements
herein contained, the parties hereto agree as follows:
ARTICLE I
MERGER
1.1. THE MERGER. In accordance with the provisions of this Agreement
and the Nevada Corporations Code (the "Corporation Law"), on the date on
which this Agreement and the properly executed officers' certificates of
each Constituent Corporation or when the properly executed certificate of
merger is filed and accepted by the Nevada Secretary of State as required
by Section 78.458 of the Corporation Law (the "Effective Date" or
"Effective Time"), Siskon-California shall be merged with and into
Acquisition Corp., in the manner of and as more fully set forth in Sections
78.451 through 78.459 of the Nevada Corporations Code (the "Merger"), the
separate existence of Acquisition Corp. shall cease and Siskon-California
shall continue as the surviving corporation (the "Surviving Corporation")
under its present corporate name and as a wholly owned subsidiary of
Siskon-Nevada.
<PAGE>A-2
1.2. THE SURVIVING CORPORATION. On the Effective Date, the Surviving
Corporation shall succeed Acquisition Corp., without other transfer, to all
the rights and property of Acquisition Corp. and shall be subject to all
the debts, obligations and liabilities of Acquisition Corp. in the same
manner as if the Surviving Corporation had itself incurred them; all rights
of creditors and all liens upon the property of each of the Constituent
Corporations shall be preserved unimpaired.
ARTICLE II
CONVERSION AND EXCHANGE OF SHARES
2.1. STOCK OF SISKON-CALIFORNIA. Upon the Effective Date, by virtue
of the Merger and without any action on the part of the holder thereof,
each share of Siskon-California Class A Common Stock outstanding
immediately prior thereto shall be changed and converted automatically into
one fully paid and nonassessable share of Siskon-Nevada Class A Common
Stock, and each share of Siskon-California Series 1 Class B Common Stock
outstanding immediately prior thereto shall be changed and converted
automatically into one fully paid and nonassessable share of Siskon-Nevada
Class B Common Stock.
2.2. STOCK CERTIFICATES. On and after the Effective Date, all of the
outstanding certificates which prior to that time represented shares of
Siskon-California shall be deemed for all purposes to evidence ownership of
and to represent shares of Siskon-Nevada into which the shares of Siskon-
California represented by such certificates have been converted as herein
provided. The registered owner on the books and records of Siskon-
California or its transfer agent of any such outstanding stock certificate
shall have and shall be entitled, until such certificate shall have been
surrendered for transfer or otherwise accounted for to Siskon-Nevada or its
transfer agent, to exercise any voting or other rights with respect to and
receive any dividend or other distributions upon the shares of Siskon-
Nevada evidenced by such outstanding certificate as provided above.
2.3. OPTIONS. Each option to purchase shares of Siskon-California
Class A Common Stock granted under Siskon-California's Stock Option Plan
which is outstanding on the Effective Date, shall, by virtue of the Merger
and without any action on the part of the holder thereof, be converted into
and become an option to purchase the same number of shares of Siskon-Nevada
Class A Common Stock at the same option price per share, and upon the same
terms and subject to the same conditions as set forth in the Siskon-
California Stock Option Plan under which such options were granted, as in
effect on the Effective Date. As of the Effective Date, the Siskon-
California Stock Option Plan shall become the Siskon-Nevada Stock Option
Plan and all obligations of Siskon-California under the Siskon-California
Stock Option Plan shall be assumed by Siskon-Nevada including all
outstanding options granted pursuant to the Stock Option Plan. Upon
approval of this Merger Agreement by shareholders of Siskon-California and
Siskon-Nevada, the shareholders of Siskon-California and Siskon-Nevada
shall be deemed to have adopted and approved the assumption of the Siskon-
California Stock Option Plan by Siskon-Nevada under the same terms and
conditions that the Siskon-California Stock Option Plan was previously
adopted and approved by shareholders of Siskon-California, as amended.
<PAGE>A-3
2.4. OTHER EMPLOYEE BENEFIT PLANS. Upon the Effective Date, the
obligations of Siskon-California under or with respect to every plan,
trust, program and benefit then in effect or administered by Siskon-
California on behalf or for the benefit of the officers and employees of
Siskon-California, including plans, trusts, programs and benefits
administered by Siskon-California in which subsidiaries of Siskon-
California, their officers and employees currently are permitted to
participate (the "Employee Benefit Plans"), shall become the lawful
obligations of Siskon-Nevada and shall be implemented and administered in
the same manner and without interruption until the same are amended or
otherwise lawfully altered or terminated.
2.5. COMMON STOCK OF SISKON-NEVADA. Upon the Effective Date, the
previously outstanding 10 shares of Class A Common Stock of Siskon-Nevada
registered in the name of Siskon-California and which shall, by reason of
the Merger, be reacquired by Siskon-Nevada, shall be retired and shall
resume the status of authorized and unissued shares of Class A Common Stock
of Siskon-Nevada.
ARTICLE III
THE SURVIVING CORPORATION
3.1. CORPORATE DOCUMENTS. The Articles of Incorporation of Siskon-
California, as in effect on the Effective Date, shall continue to be the
Articles of Incorporation of Siskon-California as the surviving corporation
without change or amendment until further amended in accordance with the
provisions thereof and applicable law. The Bylaws of Siskon-California, as
in effect on the Effective Date, shall continue to be the Bylaws of Siskon-
California as the surviving corporation without change or amendment until
further amended in accordance with the provisions thereof and applicable
law. The Articles of Incorporation and Bylaws of Siskon-Nevada, as in
effect on the Effective Date, shall continue in force and effect without
change or amendment until further amended in accordance with the provisions
thereof and applicable law.
3.2. DIRECTORS AND OFFICERS. The directors and officers of Siskon-
California on the Effective Date shall be and become directors and
officers, holding the same titles and positions, of Siskon-Nevada on the
Effective Date, and after the Effective Date shall serve in accordance with
the Bylaws of Siskon-Nevada.
3.3. FURTHER ASSURANCES. From time to time, as and when required by
Siskon-Nevada or by its successors and assigns, there shall be executed and
delivered on behalf of Siskon-California such deeds and other instruments,
and there shall be taken or caused to be taken by it such further and other
action, as shall be appropriate or necessary in order to vest or perfect in
or to confer of record or otherwise in Siskon-Nevada the title to and
possession of all the property interests, assets, rights, privileges,
immunities, powers, franchises and authority of Siskon-California, and
otherwise to carry out the purposes and intent of this Merger Agreement,
and the officers and directors of Siskon-Nevada are fully authorized in the
name and on behalf of Siskon-California or otherwise to take any and all
such actions and to execute and deliver any and all such deeds and other
instruments.
<PAGE>A-4
3.4. PLAN OF REORGANIZATION. This Merger Agreement constitutes a plan
of reorganization to be carried out in the manner, on the terms, and
subject to the conditions herein set forth.
3.5. RIGHTS AND DUTIES OF SISKON-CALIFORNIA. On the Effective Date,
for all purposes, the separate existence of Acquisition Corp. shall cease
and shall be merged with and into Siskon-California. Siskon-California, as
the surviving corporation, shall continue and all property (real, personal
and mixed, all debts due on whatever account, all choices in action, and
all and every other interest of or belonging to or due to Siskon-
California; and the title to any real estate, or any interest therein,
vested in Siskon-California shall not revert or be in any way impaired by
reason of such Merger; and Siskon-California shall continue to be
responsible and liable for all of its liabilities and obligations and any
claim existing, or action or proceeding pending, by or against Siskon-
California. If at any time Siskon-Nevada shall consider or be advised that
any assignment or assurances in law or any other actions are necessary or
desirable to vest the title of any property or rights of Siskon-California
in Siskon-Nevada according to the terms hereof, the officers and directors
of Siskon-Nevada are empowered to execute and make all such property
assignments and assurances and do any and all other things necessary or
proper to vest title to such property or other rights in Siskon-Nevada, and
otherwise to carry out the purposes of this Merger Agreement.
ARTICLE IV
MISCELLANEOUS
4.1. AMENDMENT. Prior to shareholder approval, this Merger Agreement
may be amended in any manner as may be determined in the judgment of the
respective Boards of Directors of Siskon-Nevada, Siskon-California and
Acquisition Corp. After shareholder approval, this Merger Agreement may be
amended in any manner (except that Section 2.1 and any of the other
principal terms may not be amended without the approval of the shareholders
of Siskon-California) as may be determined in the judgment of the
respective Boards of Directors of Siskon-Nevada, Siskon-California and
Acquisition Corp. to be necessary, desirable or expedient in order to
clarify the intention of the parties hereto or to effect or facilitate the
purposes and intent of this Merger Agreement.
4.2. ABANDONMENT. At any time before the Effective Date, this Merger
Agreement may be terminated and the Merger contemplated hereby may be
abandoned by the Board of Directors of either Siskon-California, Siskon-
Nevada or Acquisition Corp., notwithstanding approval of this Merger
Agreement by the shareholders of Siskon-California and by the sole
shareholder of Siskon-Nevada and Acquisition Corp.
4.3. COUNTERPARTS. In order to facilitate the filing and recording of
this Merger Agreement, the same may be executed in any number of
counterparts, each of which shall be deemed to be an original.
<PAGE>A-5
IN WITNESS WHEREOF, this Merger Agreement, having first been duly
approved by the Boards of Directors of Siskon-California, Siskon-Nevada and
Acquisition Corp., has been executed on the date set forth above on behalf
of each of said two corporations by their respective duly authorized
officers.
SISKON GOLD CORPORATION,
a California corporation
By TIMOTHY A. CALLAWAY
Timothy A. Callaway, President
(Corporate Seal)
Attest:
MICHAEL K. EPSTEIN
Michael K. Epstein, Secretary
SISKON GOLD CORPORATION,
a Nevada corporation
By TIMOTHY A. CALLAWAY
Timothy A. Callaway, President
(Corporate Seal)
Attest:
MICHAEL K. EPSTEIN
Michael K. Epstein, Secretary
<PAGE>A-6
SISKON GOLD ACQUISITION CORPORATION,
a Nevada corporation
By TIMOTHY A. CALLAWAY
Timothy A. Callaway, President
(Corporate Seal)
Attest:
MICHAEL K. EPSTEIN
Michael K. Epstein, Secretary
