UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13E-3
RULE 13E-3 TRANSACTION STATEMENT UNDER SECTION 13(e)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. _2__)
THE COEUR D'ALENES COMPANY
(Name of the Issuer)
THE COEUR D'ALENES COMPANY
(Name of Persons Filing Statement)
COMMON STOCK, NO PAR VALUE
(Title of Class of Securities)
192119 10 9
(CUSIP Number of Class Securities)
Marilyn A Schroeder
Vice President/CFO
The Coeur d'Alenes Company
P O Box 2610
Spokane, WA 99220-2610
509) 924-6363
Name, Address and Telephone Numbers of Person Authorized to
Receive Notices and Communications on Behalf of the Persons
Filing Statement)
COPY TO:
Lawrence Small
Paine, Hamblen, Coffin, Brooke & Miller, LLP
717 W Sprague Suite 1200
Spokane, WA 99201-3505
This statement is filed in connection with (check the
appropriate box):
a. [ X ] The filing of solicitation materials or an
information statement subject to Regulation 14A (Section
240.14a-1 through 240.14b-2), Regulation 14C (Section
240.14c-1 through 240.14c-101) or Rule 13e-3c
(Section240.13e-3c) under the Securities Exchange Act of
1934 ("the Act").
b. [ ] The filing of a registration statement under the
Securities Act of 1933.
c. [ ] A tender offer.
d. [ ] None of the above.
Check the following box if the soliciting materials or
information statement referred to in checking box (a) are
preliminary copies: [ X ]
Check the following box if the filing is a final amendment
reporting the results of the transaction: [ ]
Calculation of Filing Fee
Transaction valuation* Amount of filing fee
$15,822 $3.16
*The transaction value is based on the assumption that only
those holders of record with less than 1,000 shares will be
cashed out as a result of this transaction. There may be
more shareholders that fall into this category who
currently have their stock with a depository. The total
shares held by shareholders of record with less than 1,000
shares are 63,287. The transaction value is calculated by
multiplying 63,287 shares by the purchase price of $0.25
per share. The amount of the filing fee is calculated in
accordance with Rule 0-11 of the Securities Exchange Act of
1934, as amended, and equals 1/50th of one percent of the
aggregate value of this transaction.
[ ] Check the box if any part of the fee is offset as
provided by Section 240.0-11(a)(2) and identify the filing
which the offsetting fee was previously paid. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
Amount previously Paid: ___________________
Form or Registration No.: ___________________
Filing Party: ______________________________
Date Filed: _______________________________
Item 1. Summary Term Sheet:
The terms of the Transaction are summarized as follows:
The purpose of the transaction is to cash out
Shareholders holding less than one thousand (1,000)
shares of common stock in a record or nominee account
at 6:01 p.m. on June 12, 2002 (the "Effective Time");
the Transaction is being undertaken at this time in
order to provide small, unaffiliated shareholders with
an economic means of liquidating their shares, as well
as reducing the Company's expense of compliance with
federal securities laws. (For additional information,
see proxy statement, "Reasons for Transaction", page
10 which is incorporated herein by reference.)
The ratio for the reverse split is one (1) share for
every one thousand (1,000) shares beneficially owned
at the Effective Time; (For additional information,
see discussion in proxy statement entitled "Structure
of the Transaction" on page 10 which is incorporated
herein by reference.)
Shareholders who are cashed out will receive $0.25 for
each share beneficially owned the moment before the
Effective Time; the Directors believe that the
purchase price is fair, as it is higher than the fair
market value determined by an appraisal received by
the Company. (For more information, see the
discussion in the proxy statement entitled "Affect of
the Transaction on Company Shareholders" at page 13,
incorporated herein by reference.
The transaction must be approved by a majority of the
Shareholders including Shareholders who are affiliated
with the Company as officers, directors or employees;
If the transaction is approved, then the Company
intends to file a certification of termination of
registration of its common stock with the Securities
and Exchange Commission and the Company will cease to
be a reporting company; Officers, directors and
holders of 10% or more of the outstanding shares of
common stock also will not be subject to other
provisions of federal securities law. (For additional
information, see the proxy statement discussion
entitled "Effect on Shareholders" at page 8 and
"Affect of the Transaction on Company" on page 15,
incorporated herein by reference.)
The transaction, if approved, will not have any affect
on Shareholders beneficially owning one thousand
(1,000) or more shares of the Company's common stock;
the Directors determined on January 28, 2002 that
$0.25 per share was a fair purchase price. (For
additional information, see section entitled "Effect
on Shareholders" at page 8 of the proxy statement,
incorporated herein by reference.)
If the Transaction is approved, small Shareholders
(thereafter referred to as Cashed-Out Shareholders)
will have dissenter appraisal rights under Idaho law;
a Cashed-Out Shareholder, however, must have sent a
notice to the Company prior to the meeting and not
voted for the Transaction. (For additional
information, see section entitled "Dissenter's
Appraisal Rights" on page 19 of the proxy statement,
incorporated herein by reference.
A complete description of the transaction can be found in
Proposal Number 1 beginning on Page 1 of the Proxy
Statement.
Item 2. Subject Company Information
This Transaction is being conducted by the issuer:
THE COEUR D'ALENES COMPANY
3900 E Broadway
Spokane, WA 99220-2610
(509) 924-6363
Item 3. Identify and Background of Filing Person
The filing person is the subject company:
THE COEUR D'ALENES COMPANY
3900 E Broadway
Spokane, WA 99220-2610
(509) 924-6363
Directors:
Jimmie T G Coulson, Director, President/CEO
P O Box 2610
Spokane, WA 99220-2610
(509) 924-6363
Wendell J Satre, Director
2822 E Snowberry Lane
Spokane, WA 99223
(509) 536-5627
Marilyn Schroeder, Director, Vice President/CFO
P O Box 2610
Spokane, WA 99220-2610
(509) 924-6363
Robert P Shanewise, Director
921 W Comstock Court
Spokane, WA 99203
(509) 443-1944
Lawrence A Stanley, Director
Empire Bolt and Screw
1501 E Trent
Spokane, WA 99202
(509) 534-0636
Officers:
Jimmie T G Coulson, Director, President/CEO
P O Box 2610
Spokane, WA 99220-2610
(509) 924-6363
Lawrence A Coulson, Vice President/GM Stock Steel
P O Box 2610
Spokane, WA 99220-2610
Marilyn Schroeder, Director, Vice President/CFO
P O Box 2610
Spokane, WA 99220-2610
(509) 924-6363
Item 4. Terms of the Transaction.
The Transaction includes both a reverse stock split and a
forward split of the Company's common stock. If this
Transaction is approved and occurs, the reverse split will
occur at 6:00 P.M. Pacific time on June 12, 2002 (the
Effective Time). All shareholders on June 12, 2002 will
receive one share of the Company's common stock for every
1,000 shares of the Company's common stock held in their
record or nominee accounts at that time. Any Shareholder
who has the beneficial interest in fewer than 1,000 shares
of the Company's common stock at the Effective Time
(referred to herein as a "Cashed Out Shareholder") will
receive a cash payment instead of fractional shares. This
cash payment will be $0.25 per share as determined by the
Board of Directors at a regularly scheduled meeting of the
Board held on November 29, 2001 and reaffirmed at a
subsequent regularly scheduled meeting of the Board held on
January 28, 2002. The Directors considered an independent
valuation report prepared by Cronkite and Kissell that
established the value of the shares at $0.08 per share as
of August 31, 2001. The Directors, however, did not accept
the conclusions and recommendations of that report;
consequently, it will not be provided to the Shareholders
as part of the proxy statement. A copy of the report will
be provided to any shareholder upon request. The Directors
determined that $0.25 was a more appropriate value.
Immediately following the Effective Time for the reverse
split, all Shareholders who are not Cashed Out Shareholders
will receive 1,000 shares of the Company's common stock for
every one share of stock they received as a result of the
reverse stock split. If a Shareholder holds 1,000 or more
shares in a record or nominee account prior to the
Transaction, any fractional share in those accounts will
not be cashed out after the reverse split and the total
number of shares held in those accounts will not change as
a result of the Transaction.
In accordance with Section 30-1302 of the Idaho Code,
Cashed Out Shareholders have the right to dissent from the
Transaction and to receive payment in cash for the "fair
value" of those shares voted against the Transaction.
Instructions regarding the assertion of dissenter rights
are contained in the section entitled Dissenters Appraisal
Rights at page 19; this section is incorporated herein by
reference. See also Appendix A to the Proxy Statement.
No provisions have been made by the Company to grant
unaffiliated security holders access to the corporate files
of the Company or to obtain counsel or appraisal services
at the expense of the Company. The Company believes that
the Transaction is procedurally fair to unaffiliated small
shareholders, because the Directors understand their
fiduciary responsibilities, have authorized several tender
offers to small shareholders previously, and have tried to
establish active trading markets. Dissenter appraisal
rights are also available.
Item 1004(f) of Regulation M-A is not applicable.
A complete description of the terms of the transaction is
included in Proposal No. 1 of the Proxy Statement, Special
Factors beginning on page 4 and also in the Structure of
the Transaction beginning on Page 10 and are incorporated
herein by reference.
Item 5. Past Contacts, Transactions, Negotiations and
Agreements.
There have been no sales or acquisitions of the Company's
common stock by any of the executive officers or directors
of the Company where the aggregate value of the
transactions exceeded $60,000 during the past two years.
The Company has been conducting tender offers to holders of
200 and fewer shares continuously over the past two years.
Total shares purchased and the price paid for the Common
Stock is detailed in the following table:
Avg Cost
Date # of shares Total Cost Per
Share
Oct 2001 5,274 $2,260 $0.43
May 2001 776 $ 400 $0.52
Feb 2001 584 $ 320 $0.55
Sept 2000 1,055 $ 540 $0.51
June 2000 1,014 $ 590 $0.58
There were no negotiations, transactions or material
contacts between the Company and any of its executive
officers, directors or affiliates that would qualify as
significant corporate events, as that term is defined by
Item 1005(b) and (c) of Regulation M-A..
There are no agreements between the Company, its executive
officers, directors or any affiliates and any other party
with respect to the Company's common stock which would be
subject to Item 1005(e) of Regulation M-A.
Item 6. Purposes of the Transaction and Plans or
Proposals.
The securities acquired in the Transaction will be held in
treasury of the Company; Idaho law allows its domestic
corporations to hold their shares of common stock in
treasury for limited purposes.
Effective January 28, 2002, the Company merged its wholly-
owned subsidiary, Union Iron Works, Inc. of Spokane back
into the parent company. This merger is intended to
eliminate the expense of maintaining two separate
businesses. It is unrelated to the reverse split
contemplated at this time. There are no other plans,
proposals or negotiations regarding any extraordinary
transactions such as a merger, reorganization or
liquidation involving the Company.
There are no plans, proposals or negotiations that might
result in any purchase, sale or transfer of a material
amount of assets of the Company.
There are no plans, proposals or negotiations that might
result in a material change in the present dividend rate or
policy or any indebtedness or capitalization of the
Company.
There are no plans, proposals or negotiations that might
result in any change in the present board of directors or
management of the Company except in the normal course of
board member retirement and replacement.
There are no plans, proposals or negotiations that might
result in any change in the Company's corporate structure.
The Company has only one class of securities and, if the
Transaction is approved, the Transaction will result in the
securities becoming eligible for termination of
registration under Section 12(g)(4) of the Act (15 U.S.C.
781). The Company's listing of common stock on the NASDAQ
Bulletin Board will be discontinued.
The purpose of the transaction is more fully described in
Proposal No. 1 of the Proxy Statement under "Reasons for
the Transaction" beginning on Page 10 and is incorporated
herein by reference.
Item 7. Purposes, Alternative, Reasons and Effects.
The information required by this Item 7 and Item 1013 of
Regulation M-A is set forth in the proxy statement in the
section entitled "Background and Purpose of the
Transaction" at page 13 and "Affect of the Transaction on
the Company" at page 13. These sections are incorporated
herein by reference.
Item 8. Fairness of the Transaction.
The Directors and Management of the Company believe this
transaction is fair to all unaffiliated shareholders of the
Company. The small shareholders currently have no way to
liquidate their investment in the Company without incurring
costs that are disproportionate to the overall value of the
stock. This transaction provides a method to cash out
these shareholders. The Company commissioned a going
concern valuation study and report from an independent
appraiser in an effort to arrive at a fair purchase price
for the fractional shares. Since the conclusion of $0.08
per share was based on financial information of comparable
companies much larger than the Company, the Board
determined to set the price at $0.25. Over the last two
years, the range of high and low bids has been $0.31 to
$0.05. Market price is not a relevant measure of fairness,
as there is not an active trading market. Over the last
five years, after tax earnings per share have averaged
$0.02 and $0.01 over the last three years. At $0.25 per
share, the purchase price represents twelve and one half
times average after tax net income per share based on the
last five years and twenty five times average after tax net
income per share based on the last three years. The
purchase price represents roughly 50% of current book
value.
This transaction will not have a material affect on
shareholders holding 1,000 or more shares of the Company's
stock. The Company will no longer be a registered,
reporting Company, but without an active trading market
over the last ten years, the registration does not provide
a material benefit to the unaffiliated shareholders.
No Director dissented or abstained from voting on the
Transaction.
The Transaction does not require the approval of a majority
of the unaffiliated shareholders voting as a separate
class.
A majority of the directors who are not employees of the
Company has not retained an unaffiliated representative to
act solely on behalf of unaffiliated shareholders for
purposes of negotiating the terms of this transaction nor
to prepare a report concerning the fairness of the
transaction.
A complete discussion of the fairness of the transaction
can be found in Proposal No. 1 of the Proxy Statement,
Fairness of the Transaction beginning on page 4 and
incorporated herein by reference.
This transaction was approved by all the Directors who are
not employees of the Company.
There have been no firm offers made by an unaffiliated
person during the last two years to acquire the Company or
a significant part of the Company's assets.
A complete discussion of the fairness of the transaction
can be found in Proposal No. 1 of the Proxy Statement,
"Fairness of the Transaction", starting on Page 4 and
incorporated herein by reference.
Item 9. Reports, Opinions, Appraisals and Negotiations.
The information required by this Item is set forth in the
proxy statement in the section entitled "Structure of the
Transaction" at page 11; this section is incorporated
herein by reference.
Item 10. Source and Amounts of Funds or Other
Consideration.
The source of funds for the transaction will be the
Company's working capital. The total number of fractional
shares that will be purchased and the total cash to be paid
by the Company are unknown. However, if the Transaction
had been completed as of January 1, 2002, the cash payment
that would have been issued to cashed out shareholders
would have been at least $15,822 based on 63,287 shares
held by 599 registered shareholders. The actual amounts
will depend on the number of cashed out shareholders at the
Effective Time of the transaction, which may vary from the
number identified on January 1, 2002. The Company is not
able to determine at this time the number of shareholder
accounts with fewer than 1,000 shares that are held in
depositories.
The cost of the transaction is expected to be around
$15,000 not including the payment to cashed out
shareholders. Legal fees, solicitation materials and
mailing are the only significant costs the Company
anticipates at this time.
Item 11. Interest in Securities of Subject Company.
The information required by Item 1008(a) of Regulation M-A
is set forth in the Annual Report in the section entitled
"Security Ownership of Management" at page 15; this section
is incorporated by reference. Joel E. Simpson is still an
employee of the Company but he is not considered part of
Management for disclosure purposes. This information can
also be found in Proposal No. 2 of the Proxy Statement,
Security Ownership and Certain Beneficial Ownership of
Management, beginning on page 24 and is also incorporated
herein by reference.
The only transaction during the last sixty days involving
the Company's common stock and executive officers or
directors was a single transaction on December 21, 2001.
The transaction was an unsolicited offer to sell to Company
employees the shares of common stock held by Eliot
Investments Limited Partners. This Partnership offered to
sell the shares quoted at the market price, which at that
time was $0.05. The total shares involved were 4,205. Of
those 4,205, Jimmie Coulson acquired 189 shares, Marilyn
Schroeder acquired 2,516 shares and other employees who are
not executive officers or directors acquired the remaining
1,500 shares.
Item 12. The Solicitation or Recommendation.
Three of the Company's Directors, listed below, will be
cashed out unless they acquire additional shares or if Dr.
Robert Shanewise combines his accounts, to bring their
total holdings of record to more than 1,000.
Robert P. Shanewise
Wendell J. Satre
Lawrence A. Stanley
As all of the Directors believe this transaction is in the
best interest of the Company and all of the unaffiliated
shareholders, all five intend to vote their shares in favor
of this transaction.
No Director or executive officer has made a recommendation
separate from the unanimous resolutions adopted by the
directors either in support of or opposed to this
transaction to any other party.
Item 13. Financial Statements.
Audited financial statements for the two previous fiscal
years required to be filed with the Company's most recent
annual report under Sections 13 and 15(d) of the Exchange
Act (15 U.S.C. 78m; 15 U.S.C. 78o), have been filed with
the Company's most recent annual report on Form 10-KSB for
the fiscal year ended in September 2001. The Annual Report
was filed on December 27, 2001. The Form 10-KSB for the
year ending September 29, 2001 is included with the mailing
of the proxy statement to shareholders as the Company's
annual report. The financial statements begin on Page F1,
immediately following page 17 of the Form 10-KSB and are
incorporated herein by reference.
The financial statements required to be included with the
Company's most recent quarterly report are contained in the
most recent Form 10-QSB, filed on February 7, 2002 for the
quarter ended December 25, 2001 and are incorporated herein
by reference.
Book Value per share of the Company's Common stock as of
December 25, 2001 was $0.56.
The Transaction will have no material effect on the
Company's balance sheet, income statement or earnings per
share for the current fiscal year. The Transaction will
not have a material effect on the Company's book value per
share for the current fiscal year. A more complete
discussion of the financial impact can be found in Proposal
No. 1 of the Proxy Statement under The Effect of the
Transaction on the Company, beginning on page 15 and is
incorporated herein by reference.
Item 14. Persons/Assets, Retained, Employed, Compensated
or Used.
No person or class of persons are directly or indirectly
employed, retained, or are to be compensated to make
solicitations or recommendations in connection with this
transaction.
No Officer, employee or corporate assets of the Company has
or will be employed or used by the Company in connection
with this transaction.
Item 15. Additional Information.
No additional material is required under this item.
Item 16. Exhibits.
None
SIGNATURE
After due inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this
statement is true, complete and correct.
/S/ Marilyn A. Schroeder
Vice President/CFO
February 1, 2002