<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No.__)
Filed by the Registrant[X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission Only (as permitted by Rule 14a-
6(e)(2)
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
. . . . . . . . . . . . MK GOLD COMPANY. . . . . . . . . . . .
(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):
[X] No fee required.
[ ] 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:
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
4) Proposed maximum aggregate value of transaction:
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
5) Total fee paid:
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
. . . . . . . . . . . . . . . . . . . . .
2) Form, Schedule or Registration Statement No.:
. . . . . . . . . . . . . . . . . . . . .
3) Filing Party:
. . . . . . . . . . . . . . . . . . . . .
4) Date Filed:
. . . . . . . . . . . . . . . . . . . . .
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NOTICE OF SPECIAL MEETING OF STOCKHOLDERS - NOVEMBER 24, 1998
To the Stockholders of MK Gold Company:
You are cordially invited to attend the Special Meeting of Stockholders of MK
Gold Company (the "Company") to be held at the DoubleTree Hotel, 255 S. West
Temple, Salt Lake City, Utah, on Tuesday, November 24, 1998, at 11:00 a.m. for
the following purposes:
1. To approve an amendment to the Company's Certificate of Incorporation to
effect a one-for-three reverse split of the Company's Common Stock; and
2. To transact such other business as may properly come before the meeting.
Stockholders of record at the close of business on October 30, 1998 are
entitled to notice of and to vote at the meeting and at any and all adjournments
or postponements thereof. If you are unable to attend the meeting in person,
you are urged to sign, date and return the enclosed proxy as it is necessary
that holders of a majority of the outstanding shares be present, in person or by
proxy, in order to obtain a quorum for the meeting. The proxy may be returned
in the accompanying, self-addressed envelope which requires no postage if mailed
in the United States.
Dated: November __, 1998
BY ORDER OF THE BOARD OF DIRECTORS
John C. Farmer
Chief Financial Officer and Secretary
____________________
<PAGE>
MK GOLD COMPANY
60 E. South Temple, Suite 2100
Salt Lake City, Utah 84111
____________________
PROXY STATEMENT
SPECIAL MEETING OF STOCKHOLDERS
NOVEMBER 24, 1998
____________________
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of MK Gold Company, a Delaware
corporation ("MK Gold" or the "Company"), to the holders of the Company's common
stock, par value $.01 per share ("Common Stock"), for use at its Special Meeting
of Stockholders to be held at the DoubleTree Hotel, 255 S. West Temple, Salt
Lake City, Utah, on Tuesday, November 24, 1998, at 11:00 a.m., and at any and
all adjournments or postponements thereof. Any proxy delivered pursuant to this
solicitation may be revoked by the person giving it at any time prior to the
exercise thereof (i) by filing a revocation instrument with the Secretary of the
Company, (ii) by delivering a duly executed proxy bearing a later date, or (iii)
by appearing at the meeting and voting in person.
This Proxy Statement and the related proxy are first being mailed to
stockholders commencing on or about November __, 1998.
VOTING RIGHTS AND VOTE REQUIRED. Stockholders of record on October 30, 1998,
the record date, are entitled to vote at the meeting. As of October 30, 1998,
19,464,466 shares of Common Stock were outstanding and entitled to vote.
The presence at the Special Meeting, in person or by proxy, of the holders of
a majority of the shares of Common Stock outstanding at the close of business on
October 30, 1998 will constitute a quorum. For purposes of this Special Meeting,
each outstanding share of Common Stock on the record date is entitled to one
vote on all matters. Abstentions are counted for purposes of determining the
number of shares represented and entitled to vote at the meeting. However,
abstentions are not counted in determining the number of shares voting "FOR" an
item of business and, therefore, have the same effect as a vote "AGAINST" a
business item. Broker non-votes are counted for purposes of determining the
number of shares represented and entitled to vote at the meeting; however, the
shares represented thereby are not voted and do not represent a vote either
"FOR" or "AGAINST" an item of business.
VOTING OF PROXIES. The shares of Common Stock represented by all properly
executed proxies received in time for the Special Meeting will be voted in
accordance with the directions given by the stockholders. If no instructions are
given, the shares will be voted "FOR" the proposal being presented to
stockholders at the meeting.
Management knows of no business to be brought before the meeting other than
the matters described in this Proxy Statement. However, if any other matters are
properly presented for action, it is the intention of the proxy holders named in
the enclosed proxy to vote on such matters in accordance with their discretion
pursuant to such proxy.
TABULATION. Pursuant to the By-laws and policies of the Company,
representatives of ChaseMellon Shareholder Services, L.L.C. have been appointed
to serve as independent Inspectors of Election to supervise the voting of the
shares for the Special Meeting of Stockholders. The Inspectors of Election will
decide all questions respecting the qualification of voters, the validity of the
proxies and the acceptance or rejection of votes. None of the Inspectors of
Election is an officer, employee or stockholder of the Company.
<PAGE>
BUSINESS TO BE TRANSACTED
PROPOSAL TO AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION
TO EFFECT A ONE-FOR-THREE REVERSE STOCK SPLIT
INTRODUCTION
The Board of Directors of the Company has approved an amendment to the
Company's Certificate of Incorporation to effect a reverse stock split, pursuant
to which each three shares of Common Stock of the Company will become one share
of Common Stock (the "Reverse Split"). The stockholders are being asked to
approve this proposed amendment. The Reverse Split will take effect, if at all,
after it is approved by the stockholders of the Company and after filing the
amendment with the Secretary of State of the State of Delaware (the "Effective
Date"). Even if the Reverse Split is approved by the stockholders it is within
the discretion of the Board of Directors not to carry out the Reverse Split.
REASONS FOR THE REVERSE SPLIT
The Company's shares of Common Stock have been listed , and have traded, on
the National Association of Securities Dealers Automated Quotations ("Nasdaq")
National Market System since December 15, 1993, when the Company completed its
initial public offering. For continued listing on the Nasdaq National Market
System, it is necessary that, among other things, the Company's shares of
Common Stock maintain a minimum bid price of at least $1.00 per share.
Over the past several months, the bid price of the Company's shares of Common
Stock has gradually decreased and has fallen below $1.00. As a result, the
Company's shares of Common Stock are in danger of being delisted from the Nasdaq
system. Management believes that the decrease in the number of shares of Common
Stock outstanding as a consequence of the Reverse Split, if effectuated, will
result in a corresponding increase in the price per share of the Company's
Common Stock that will allow the Company to comply with the Nasdaq minimum bid
price of $1.00 per share. There can be no assurance, however, that the Reverse
Split will result in any change in the price of the Company's Common Stock or
that, if the price of the Company's Common Stock does increase as a result of
the Reverse Split, such increase will be sufficient to allow the Company to
comply with the listing requirements of the Nasdaq National Market System.
If the Reverse Split is not approved by the stockholders at the Special
Meeting, then it is highly likely that the Company's shares of Common Stock will
cease to be listed and traded on the Nasdaq system. In such event, trading, if
any, in the Company's Common Stock may thereafter be conducted in the over-the-
counter market on an electronic bulletin board established for securities that
do not meet the Nasdaq listing requirements, or in what are commonly referred to
as the "pink sheets". As a result, an investor would find it more difficult to
dispose of, or to obtain accurate quotations as to the price of, the Company's
Common Stock. In addition, if the Company's Common Stock were delisted, trading
of the Common Stock would be subject to "penny stock" rules that impose
additional sales practice requirements on broker-dealers who sell such
securities. Consequently, delisting could affect the ability or willingness of
broker-dealers to sell the Company's Common Stock and the ability of purchasers
of the Company's Common Stock to sell their securities in the secondary market.
IMPLEMENTATION OF THE REVERSE SPLIT
The Reverse Split will be formally implemented by amending the Company's
Certificate of Incorporation to provide that all outstanding shares of Common
Stock held by each holder of record on the Effective Date shall be automatically
combined at the rate of one-for-three without any further action on the part of
the holders thereof or the Company. The amendment to the Company's Certificate
of Incorporation will also provide that no fractional shares shall be issued and
that any fractional shares remaining after aggregating all fractional shares
held by a stockholder will be rounded up to the nearest whole share.
Assuming the Reverse Split is approved by the stockholders at the Special
Meeting, an appropriate amendment to the Company's Certificate of Incorporation,
as amended, will be filed with the Secretary of State of the State of Delaware.
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PRINCIPAL EFFECTS OF THE REVERSE SPLIT
If the Reverse Split is approved by the Company's stockholders, one new share
of Common Stock will be issued for each three presently outstanding shares of
Common Stock. Each stockholder's percentage ownership interest in the Company
and proportional voting power will remain unchanged except for minor differences
resulting from adjustments for fractional shares. The rights and privileges of
the holders of shares of Common Stock will be essentially unaffected by the
Reverse Split.
As of October 30, 1998, the Company had 40,000,000 authorized shares of
Common Stock of which 19,464,466 were issued and outstanding. Of the unissued
shares of Common Stock, an aggregate of 2,680,000 were reserved for issuance
under the Company's Stock Incentive Plan and the Company's Stock Option Plan for
Non-Employee Directors. As of October 30, 1998, 17,855,534 shares of the
Company's common stock remain unissued and unreserved.
As a result of the Reverse Split, the 19,464,466 shares of Common Stock
outstanding on October 30, 1998 will become approximately 6,488,156 shares of
Common Stock and any other shares issued prior to the Effective Date will be
similarly adjusted. In addition, on the Effective Date, each option to purchase
Common Stock outstanding, together with any related stock appreciation rights,
will be adjusted so that the number of shares of Common Stock issuable upon
their exercise shall be divided by three (and corresponding adjustments will be
made to the number of shares vested under each outstanding option) and the
exercise price of each option shall be multiplied by three.
No fractional shares will be issued upon the Reverse Split. Any fractional
shares remaining after aggregating all fractional shares held by a stockholder
will be rounded up to the nearest whole share. For example, if a stockholder
held 100 shares of Common Stock of the Company prior to the Reverse Split, after
the Reverse Split such stockholder would hold 34 shares.
The Reverse Split will not affect the number of authorized shares.
Accordingly, the Reverse Split will have the effect of increasing the number of
authorized and unreserved shares of the Company's Common Stock. The Company
currently has no plans to issue such shares; however, such shares may be used by
the Company for general corporate purposes.
The Reverse Split may result in some stockholders owning "odd-lots" of less
than 100 shares of Common Stock. Brokerage commissions and other costs of
transactions in odd-lots are generally somewhat higher than the costs of
transactions in "round-lots" of even multiples of 100 shares.
EXCHANGE OF STOCK CERTIFICATES
Assuming the Reverse Split is approved by the stockholders, stockholders will
be required to exchange their stock certificates for new certificates
representing the shares of new Common Stock. Stockholders will be furnished with
the necessary materials and instructions for the surrender and exchange of stock
certificates at the appropriate time by the Company's transfer agent.
Stockholders will not be required to pay a transfer or other fee in connection
with the exchange of certificates. Stockholders should not submit any
certificates until requested to do so.
FEDERAL INCOME TAX CONSEQUENCES
The following description of federal income tax consequences is based upon
the Internal Revenue Code of 1986, as amended, the applicable Treasury
Regulations promulgated thereunder, judicial authority and current
administrative rulings and practices as in effect on the date of this Proxy
Statement. This discussion is for general information only and does not discuss
consequences which may apply to special classes of taxpayers. Stockholders are
urged to consult their own tax advisors to determine the particular consequences
to them.
The exchange of shares of Common Stock for shares of new Common Stock will
not result in recognition of gain or loss. The holding period of the shares of
new Common Stock will include the stockholder's holding period for the shares of
Common Stock exchanged therefor, provided that the shares of Common Stock were
held as a
3
<PAGE>
capital asset. The adjusted basis of the shares of new Common Stock will be the
same as the adjusted basis of the shares of Common Stock exchanged therefor.
NO DISSENTER'S RIGHTS
Under Delaware law, stockholders are not entitled to dissenter's rights of
appraisal with respect to the proposed Reverse Split.
VOTE AND RECOMMENDATION
The affirmative vote of the holders of a majority of all of the outstanding
shares of Common Stock of the Company is required to approve the Reverse Split.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO APPROVE THE
REVERSE SPLIT.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding persons known by the
Company to beneficially own, as defined by the Securities and Exchange
Commission ("SEC") Rule 13d-3, more than 5% of the Company's Common Stock as of
the Record Date, based solely on information regarding such ownership available
to the Company in filings by such beneficial owners with the SEC on Schedules
13D and 13G. It also shows the same information as of the Record Date for all
Directors of the Company, the Company's Chief Executive Officer and each of the
Company's executive officers who earned in excess of $100,000 during the year
ended December 31, 1997 (collectively, the "Named Executive Officers"), and all
Directors and Executive Officers as a group. Except as set forth in the
footnotes below, all such persons possess sole voting and investment power with
respect to the shares listed.
4
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<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4)
Number of Shares
and Nature of Right to Acquire Percent
Name and Address Beneficial Within 60 Days of of
of Beneficial Owner Ownership(a) October 30, 1998 Class(b)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Certain Beneficial Owners:
- -------------------------
Leucadia National Corporation
315 Park Avenue South
New York, NY 10010 9,000,000 - 46.2
Group consisting of:
Advisory Research, Inc.
And David B. Heller.
Two Prudential Plaza
180 N. Stetson, Suite 5780
Chicago, Illinois 60601(c) 1,340,400 - 6.9
Group consisting of:
Special Situations Fund III, L.P.,
MGP Advisors Limited Partnership, L.P.,
AWM Investment Company, Inc. and
Austin W. Marxe
153 East 53 Street
New York, New York 10022(d) 1,457,500 - 7.5
Group consisting of:
Quest Advisory Corp. and
Quest Management Company
1414 Avenue of the Americas
New York, New York 10019(e) 1,657,200 - 8.5
Directors:
- ---------
R.V. Hansberger(f) 16,000 15,000 *
G.J. Humphrey 30,000 30,000 *
J.P. Miscoll(g) 32,100 30,000 *
R.S. Shriver 15,000 15,000 *
I.M. Cumming(h) 30,000 30,000 *
J.S. Steinberg(i) 30,000 30,000 *
G.F. Joklik 550,000 450,000 2.8
Nondirector Named Executive Officers:
- ------------------------------------
D.L. Babinchak 122,500 112,500 *
T.G. White(j) 109,639 102,500 *
All Directors and Executive Officers as a Group
(12) persons 1,284,239 1,155,000 6.2
- -------------------------------
* Less than 1%
</TABLE>
5
<PAGE>
(a) Amounts in Column 2 include shares listed in Column 3. For purposes of this
table, shares are considered to be "beneficially" owned if the person
directly or indirectly has the sole or shared power to vote or direct the
voting of the securities or the sole or shared power to dispose of or
direct the disposition of the securities. Shares are also considered
"beneficially owned" if a person has the right to acquire the beneficial
ownership of the shares within 60 days of October 30, 1998. Unless
otherwise indicated in these footnotes, each stockholder has sole voting
and investment power with respect to the shares beneficially owned.
(b) The percentages shown are calculated based upon the shares indicated in
column (2).
(c) According to a Statement on Schedule 13G dated February 13, 1998, Advisory
Research Inc. is the direct beneficial owner of 1,340,400 shares. David B.
Heller is President and the controlling shareholder of Advisory Research,
Inc.
(d) According to a Statement on Schedule 13G dated February 3, 1998, 1,457,500
shares are beneficially owned by Austin W. Marxe and AWM Investment
Company, which consist of 1,094,000 shares beneficially owned by Special
Situations Fund III, L.P. and 363,500 shares beneficially owned by Special
Situations Cayman Fund, L.P.
(e) According to Amendment No. 1 to a Statement on Schedule 13G dated February
10, 1998, 1,460,700 shares are beneficially owned by Quest Advisory Corp.
and 196,500 shares are beneficially owned by Quest Management Company.
(f) Mr. Hansberger shares voting and dispositive power as to 1,000 such shares
with his wife.
(g) Includes 2,100 shares beneficially owned by the J. P. Miscoll and I.
Miscoll Trust, dated November 11, 1991, Ingeburg Miscoll, Trustee.
(h) By virtue of Mr. Cumming's approximately 15.5% interest in the common
shares of Leucadia, Mr. Cumming may be deemed to be the beneficial owner of
the shares of MK Gold Common Stock owned by Leucadia.
(i) By virtue of Mr. Steinberg's approximately 14.2% interest in the common
shares of Leucadia (excluding an approximately 2% interest in Leucadia
securities held by two trusts for the benefit of Mr. Steinberg's minor
children as to which Mr. Steinberg disclaims beneficial ownership), Mr.
Steinberg may be deemed to be the beneficial owner of the shares of MK Gold
Common Stock owned by Leucadia.
(j) Mr. White has sole voting power as to 7,139 shares, sole dispositive power
as to 5,599 shares and shared dispositive power as to 0 shares.
STOCKHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
Any proposal submitted by a stockholder for action at the Company's 1999
Annual Meeting of Stockholders must be submitted in a letter to the Secretary of
the Company and received by the Company by December 24, 1998 in order for such
proposal to be included in the Company's proxy statement and form of proxy
relating to such meeting. The proposal must be in the form required by and
subject to the other requirements of applicable rules of the Securities and
Exchange Commission.
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SOLICITATION OF PROXIES
The Company will bear the costs of soliciting proxies from its stockholders
on behalf of the Board of Directors. In addition to the use of the mails,
proxies may be solicited by the directors, officers, and employees of the
Company by personal interview, telephone or telegram. Such directors, officers
and employees will not be additionally compensated for such solicitation, but
may be reimbursed for out-of-pocket expenses incurred in connection therewith.
Arrangements will also be made with brokerage houses and other custodians,
nominees and fiduciaries for the forwarding of solicitation material to the
beneficial owners of the Company's Common Stock held of record by such persons,
and the Company will reimburse such brokerage houses, custodians, nominees and
fiduciaries for reasonable out-of-pocket expenses incurred in connection
therewith.
Dated: November __, 1998 BY ORDER OF THE BOARD OF DIRECTORS
John C. Farmer
Chief Financial Officer and Secretary
7
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[FORM OF PROXY]
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE SPECIAL MEETING OF STOCKHOLDERS
NOVEMBER 24, 1998 AT 11:00 A.M.
MK GOLD COMPANY
The undersigned stockholder of MK Gold Company hereby appoints Donald L.
Babinchak and John C. Farmer and each of them, as attorneys and proxies, each
with the power to act without the other and with power of substitution and
revocation, and hereby authorizes them to represent the undersigned and vote, as
designated on the other side, all shares of stock of MK Gold Company standing in
the name of the undersigned with all powers which the undersigned would possess
if present at the Special Meeting of Stockholders of the Company to be held
November 24, 1998 or any adjournments or postponements thereof.
RECEIPT OF THE NOTICE OF ANNUAL MEETING OF STOCKHOLDERS AND THE PROXY
STATEMENT FURNISHED HEREWITH, IS HEREBY ACKNOWLEDGED.
(Continued and to be marked, dated and signed on the other side)
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
SPECIAL MEETING OF
STOCKHOLDERS
MK GOLD COMPANY
NOVEMBER 24, 1998
11:00 A.M.
THE DOUBLETREE HOTEL
255 S. WEST TEMPLE
SALT LAKE CITY, UTAH
<PAGE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE Please mark
MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. your votes as
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR indicated in
PROPOSAL 1. this example X
-
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1. To approve an amendment to the Company's
Certificate of Incorporation to effect a [ ] FOR [ ] AGAINST [ ] ABSTAIN
one-for-three reverse split of the Company's Common
Stock.
2. In their discretion the Proxies are authorized to
vote upon such other business as may properly come
before the meeting or any adjournment thereof.
The signature should agree with the name on your stock certificate. When
shares are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee, or guardian, please give full
title as such. If a corporation, please sign in full corporate name by
president or other authorized officer. If a partnership, please sign in
partnership name by authorized person.
Dated:______________________________________________________________, 1998
_________________________________________________________________________
(Signature)
__________________________________________________________________________
(Signature if held jointly)
</TABLE>
PLEASE SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE
________________________________________________________________________________
FOLD AND DETACH HERE
ADMISSION TICKET
SPECIAL MEETING OF
STOCKHOLDERS
MK GOLD COMPANY
NOVEMBER 24, 1998
11:00 A.M.
THE DOUBLETREE HOTEL
255 S. WEST TEMPLE
SALT LAKE CITY, UTAH
