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. _3__)
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)
1-10676
(Commission File Number)
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 _____________
(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 15 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 15
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 19, 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; (This statement is
included in the Proxy Statement on Page 7, incorporated herein
by reference.)
? If theTransaction 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 13 and "Affect of the Transaction on Company" on page
21, 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 13 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 24 of the Proxy Statement, incorporated herein
by reference.)
?
A complete description of the transaction can be found in Proposal
Number 1 beginning on Page 3 of the Proxy Statement.
Item 2. Subject Company Information
(a) This Transaction is being conducted by the issuer:
THE COEUR D'ALENES COMPANY
3900 E Broadway
Spokane, WA 99220-2610
(509) 924-6363
(b) Total shares of Common Stock outstanding as of May 7, 2002:
5,335,530
(c) There is currently no established public trading market for the
Company's common stock. The range of high bid and low bid quotations for
the Company's common stock, by quarters, as reported on the over-the-
counter market for the period beginning October 1, 1999 through March
31, 2002, is set forth in dollars per share below:
High - Low
January 1 - March 31 2002 $.05 - $.05
October 1 - December 31 2001 $.05 - $.05
July 1 - September 30 2001 $.12 - $.05
April 1 - June 30 2001 $.10 - $.10
January 1 - March 31 2001 $.12 - $.10
October 1 - December 31 2000 $.12 - $.12
July 1 - September 30 2000 $.12 - $.12
April 1 - June 30 2000 $.25 - $.12
January 1 - March 31 2000 $.31 - $.12
October 1 - December 31 1999 $.12 - $.12
The source of the above quotations is the Spokane over-the-counter
listing, and the above quotations reflect inter-dealer prices, without
retail mark-up, markdown or commission and may not necessarily represent
actual transactions. In addition, the lack of an established public
trading market for the Company's common stock should be kept in mind in
reviewing the above quotations. The prices shown are reflective of
Transactions for a limited number of shares.
(d) The Company has not declared or paid any dividend on the shares of
common stock in the last two (2) fiscal years. A loan agreement
currently in place with the Company's primary lender restricts the
Company from paying any cash dividends in excess of 10% of after tax net
income. There also have not been any changes in or disagreements with
the Company's independent public accountants concerning accounting or
financial disclosures.
(e) n/a
(f) 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
October 2001 5,274 $2,260 $0.43
May 2001 776 $ 400 $0.52
February 2001 584 $ 320 $0.55
September 2000 1,055 $ 540 $0.51
June 2000 1,014 $ 590 $0.58
The preceding information can also be found beginning on page 9 of the
Proxy Statement, incorporated herein by reference.
Item 3. Identify and Background of Filing Person
(a) 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
(b) n/a
(c) n/a
Item 4. Terms of the Transaction.
(a) 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.
For more information, see "Structure of the Transaction" beginning on
page 15 of the Proxy Statement, incorporated herein by reference.)
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 24; 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. For
more information, see discussion beginning on page 7 of the Proxy
Statement, incorporated herein by reference.
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 section entitled "Structure of the Transaction"
beginning on Page 15; this information is incorporated herein by
reference.
Item 5. Past Contacts, Transactions, Negotiations and Agreements.
(a) 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.
(b) n/a
(c) 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
October 2001 5,274 $2,260 $0.43
May 2001 776 $ 400 $0.52
February 2001 584 $ 320 $0.55
September 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.
This information is included on page 9 of the Proxy Statement and is
incorporated herein by reference.
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 described in Proposal No. 1 of the Proxy Statement (the
"Transaction"). 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
Securities and Exchange 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 15, incorporated herein by reference.
The Company at the present time does not intend to engage in, nor is
aware of any reason for it to be involved in, any events or the
transactions of the type described in this Item 6 after the completion
of the Transaction.
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 18 and "Affect of the
Transaction on the Company" at page 21. These sections are
incorporated herein by reference.
Item 8. Fairness of the Transaction.
The Directors and Management of the Company, including Mr. Coulson,
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 $0.25 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 beginning on page 5 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.
Item 9. Reports, Opinions, Appraisals and Negotiations.
The Company received an assessment as to the fair market value of the
Company's equity on a minority interest basis from Cronkite & Kissell, a
company providing business valuation and financial advisory services
located in Los Angeles, California. This assessment was obtained by the
Company for the information of the Board of Directors and the Company
did not request Cronkite & Kissell to issue a fairness opinion. Since
the Board of Directors of the Company considered only the statistical
information concerning prices of shares of common stock of several
companies as provided in the assessment, the Company does not believe
that the assessment itself is a document that is materially related to
the Transaction.
The address of Cronkite & Kissell is 1888 Century Park East, Suite 1900,
Los Angeles, CA 90067. The Company believes that Cronkite & Kissell has
the qualifications to provide valuation services, but the Company does
not have any specific information regarding such qualifications.
Cronkite & Kissell had provided valuation services to other companies in
the metals industry but the Company had not had any contact or
arrangement for services with Cronkite & Kissell previously. The
Company did not follow any express method of selection of Cronkite &
Kissell nor did the Company have any material relationship with Cronkite
& Kissell within the previous two years. The assessment did not related
to the fairness of the consideration; the Company, acting through its
Board of Directors, solely determined the amount of consideration to be
paid to unaffiliated shareholders.
A summary of the assessment issued by Cronkite & Kissell is set forth on
page 8 of the Proxy Statement; this information is incorporated herein
by reference. The assessment also has been filed as Exhibit 1 to this
statement and Exhibit 1 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. If the
Transaction, however, 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 Ttransaction,
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 are held in depositories.
The cost of the Transaction is expected to be around $20,000 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.
For more information, see the discussion beginning on page 10 of the
Proxy Statement, incorporated herein by reference.
Item 11. Interest in Securities of Subject Company.
The information required by Item 1008(a) of Regulation M-A is set forth
in the Proxy Statement in the section entitled "Security Ownership of
Management" at page 29; 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.
There have not been any transactions during the last sixty days
involving the Company's common stock and executive officers or
directors.
Item 12. The Solicitation or Recommendation.
Three of the Company's Directors, listed below, will be cashed out
unless they acquire additional shares; if Dr. Robert Shanewise combines
his accounts, his total holdings of record would be more than 1,000
shares.
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. None of the
Directors identified in this section have made a recommendation separate
from the unanimous resolutions adopted by the Directors. This
information is included in the Proxy Statement beginning on page 11 and
is incorporated herein by reference.
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), were
filed on December 27, 2001 with the Company's most recent Annual Report
on Form 10-KSB for the fiscal year ended September 29, 2001. This
Annual Report has been furnished to the shareholders with the mailing of
the Proxy Statement. 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 May 9, 2002 for the quarter ended March 25, 2002 and are
incorporated herein by reference.
Ratio of earnings to fixed charges are as follows:
Six Month Period Ended March 25, 2002: -2.46:1
Fiscal Year Ended September 29, 2001: -.54:1
Fiscal Year Ended September 30, 2000: .61:1
Fiscal Year Ended September 25, 1999: .57:1
Fiscal Year Ended September 26, 1998: .83:1
Fiscal Year Ended September 27, 1997: .42:1
Book Value per share of the Company's Common stock as of March 25, 2002
was $0.54.
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. For a more complete
discussion of the financial impact, refer to Proposal No. 1 of the Proxy
Statement in the section entitled "Affect of the Transaction on the
Company", beginning on page 21; this information 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.
This information is included in the Proxy Statement on page 11 and is
incorporated herein by reference.
Item 15. Additional Information.
No additional material is required by this item.
Item 16. Exhibits.
Exhibit No. Description of Document
1 Cronkite and Kissell valuation and
assessment
of the equity of The Coeur d'Alenes
Company
dated August 31, 2001.
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
May 8, 2002