SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14 (C)
OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
File by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Information Statement [ ] Confidential,for Use of the Commission
[ ] Definitive Information Statement Only (as permitted by Rule 14c-5(d)(2)
PRINCETON MINING COMPANY
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Information Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
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(1) Title of each class of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount of which the filing fee is calculated and state how it
was determined):
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[ ] Check box if any part of the fee is offset as provided by Exchange
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fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
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PRINCETON MINING COMPANY
3801 William D. Tate Avenue, Suite 100
Grapevine, TX 76051
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Information Statement Pursuant to Section 14C
of the Securities Exchange Act of 1934
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This information statement is provided by the Board of Directors of
Princeton Mining Company, a Nevada corporation (the "Company" or "PRNM"), to all
holders of common stock of the Company in connection with the stockholder
approval obtained by written majority consent authorizing.
1. Reverse split of the Company's current outstanding shares on a 1 for
9 basis;
2. Change the name of the Company to Lifestyle Innovations, Inc.;
3. Amend the Certificate of Incorporation to increase the authorized
shares to 250,000,000;
4. Amend the Certificate of Incorporation to decrease the par value to
$.001; and
5. Approve Princeton Mining Company's 2002 Stock Option Plan
(The above actions to be collectively referred to as the"Amendments").
The Board of Directors and the person owning the majority of the
outstanding common stock of PRNM have unanimously adopted, ratified and approved
a resolution to effect the Amendment. In accordance with the regulations of the
Securities and Exchange Commission (the "Commission"), the shareholders Consent
will become effective approximately 21 days following the distribution of this
information statement to the Company's shareholders. It is expected that the
amendments to the Certificate of Incorporation will become effective on or about
July 1, 2002.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU
ARE REQUESTED NOT TO SEND US A PROXY
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The Company's principal executive office address is 3801 William D.
Tate Avenue, Suite 100, Grapevine, TX 76051. This Information Statement will be
mailed to the Company's stockholders on or about June 9, 2002.
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INTRODUCTION
GENERAL
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On May 12, 2002, the Board of Directors approved, subject to
shareholder approval, the Amendments. On May 15, 2002, the Amendments were
approved by the written consent of a majority of the Company's common
stockholders. A copy of the proposed amendment to the Articles of Incorporation
is attached to this Information Statement as Appendix A. A copy of the Princeton
Mining Company 2002 Stock Option Plan is attached to this Information Statement
as Appendix B. The Board of Directors has fixed the close of business on May 15,
2002 as the record date for the determination of shareholders who are entitled
to give consent and receive this Information Statement. As of the record date,
the Company had outstanding 27,677,140 shares of common stock held by
approximately 1,048 shareholders of record.
REVERSE STOCK SPLIT
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On April 15, 2002, the Board of Directors and holder of a majority of the
outstanding Common Stock of the Company authorized and approved by written
consent a Reverse Stock Split of one-for-nine of the Companys outstanding Common
Stock. The intent of the Reverse Stock Split is to increase the marketability
and liquidity of the Common Stock. However, shareholders are cautioned that
there can be no assurance that this will come to pass.
As of the date of this Information Statement, it is anticipated that the
Reverse Stock Split will become effective on or about July 1, 2002 (the
"Effective Date"). The procedures for consummation of the Reverse Stock Split
are attached hereto as Exhibit A.
PURPOSES AND EFFECTS OF THE REVERSE STOCK SPLIT
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The Common Stock is listed for trading on the OTC Bulletin Board under the
symbol PRNM. On the Record Date, the reported closing price of the Common Stock
on the OTC Bulletin Board was $.58 per share.
The Board believes that the current per-share price of the Common Stock has
limited the effective marketability of the Common Stock because of the
reluctance of many brokerage firms and institutional investors to recommend
lower-priced stocks to their clients or to hold them in their own portfolios.
Certain policies and practices of the securities industry may tend to discourage
individual brokers within those firms from dealing in lower-priced stocks. Some
of those policies and practices involve time-consuming procedures that make
handling of lower-priced stock economically unattractive. The brokerage
commission on lower-priced stock may also represent a higher percentage of the
sale price than the brokerage commission on a higher priced issue. Any reduction
in brokerage commissions resulting from the Reverse Stock Split may be offset,
however, in whole or in part, by increased brokerage commissions required to be
paid by stockholders selling "odd lots" created by such Reverse Stock Split.
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On the Record Date the number of beneficial holders of the Common Stock was
approximately 1,048. The Company does not anticipate that the Reverse Stock
Split will result in a significant reduction in the number of such holders, and
does not currently intend to effect any Reverse Stock Split that would result in
a reduction in the number of holders large enough to eliminate the Company's
being subject to the periodic reporting requirements of the Securities and
Exchange Commission.
The Reverse Stock Split would have the following effects upon the number of
shares of Common Stock outstanding (27,677,140 shares as of the Record Date)
assuming that no additional shares of Common Stock are issued by the Company
after the Record Date and that the Reverse Stock Split is effected and without
taking into account any increase in the number of outstanding shares resulting
from the exercise of outstanding options. In addition, the Common Stock's par
value will be reduced of $0.001 per share following the Reverse Stock Split, and
the number of shares Common Stock outstanding will be reduced to approximately
3,075,238 shares.
At the Effective Date, each share of Common Stock issued and outstanding
immediately prior thereto (the "Old Shares") will be reclassified as and changed
into the appropriate fraction of a share of the Common Stock (the "New Common
Stock"), subject to the treatment of fractional share interests as described
below. Shortly after the Effective Date, the Company will send transmittal forms
to the holders of the Old Common Stock to be used in forwarding their
certificates formerly representing Old Common Stock for surrender and exchange
for certificates representing New Common Stock. No certificates or scrip
representing fractional share interests in the New Common Stock will be issued,
and no such fractional share interest will entitle the holder thereof to vote,
or to any rights of a shareholder of the Company. In lieu of any such fractional
share interest, each holder of Old Common Stock who would otherwise be entitled
to receive a fractional share interest of New Common Stock will in lieu receive
one full share upon surrender of certificates formerly representing Old Common
Stock held by such holder.
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FEDERAL INCOME TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT
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The following is a summary of the material federal income tax consequences
of the proposed Reverse Stock Split. This summary does not purport to be
complete and does not address the tax consequences to holders that are subject
to special tax rules, such as banks, insurance companies, regulated investment
companies, personal holding companies, foreign entities, non-resident alien
individuals, broker-dealers and tax-exempt entities. This summary is based on
the Internal Revenue Code of 1986, as amended (the "Code"), Treasury regulations
and proposed regulations, court decisions and current administrative rulings and
pronouncements of the Internal Revenue Service (the "IRS"), all of which are
subject to change, possibly with retroactive effect, and assumes that the New
Common Stock will be held as a "capital asset" (generally, property held for
investment) as defined in the Code. Holders of Old Common Stock are advised to
consult their own tax advisers regarding the federal income tax consequences of
the Reverse Stock Split in light of their personal circumstances and the
consequences under state, local and foreign tax laws.
1. The Reverse Stock Split will qualify as a recapitalization described in
Section 368(a)(1)(E) of the Code.
2. No gain or loss will be recognized by the Company in connection with the
Reverse Stock Split.
3. No gain or loss will be recognized by a shareholder who exchanges all of his
or her Old Common Stock solely for New Common Stock.
4. The aggregate basis of the New Common Stock to be received in the Reverse
Stock Split (including any whole shares received in lieu of fractional shares)
will be the same as the aggregate basis of the Old Common Stock surrendered in
exchange therefore.
5. The holding period of the New Common Stock to be received in the Reverse
Stock Split (including any whole shares received in lieu of fractional shares)
will include the holding period of the Old Common Stock surrendered in exchange
therefore.
THE FOREGOING SUMMARY IS INCLUDED FOR GENERAL INFORMATION ONLY. ACCORDINGLY,
EACH HOLDER OF COMMON STOCK OF THE COMPANY IS URGED TO CONSULT WITH HIS OR HER
OWN TAX ADVISER WITH RESPECT TO THE TAX CONSEQUENCES OF THE PROPOSED REVERSE
STOCK SPLIT, INCLUDING THE APPLICATION AND EFFECT OF THE LAWS OF ANY STATE,
MUNICIPAL, FOREIGN OR OTHER TAXING AUTHORITY.
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AMENDMENT TO INCREASE NUMBER OF AUTHORIZED SHARES
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The Board of Directors believes that it is advisable and in the
Company's best interests to have available additional authorized but unissued
shares of common and preferred stock in an amount adequate to provide for the
Company's future needs. The additional shares will be available for issuance
from time to time by the Company in the discretion of the Board of Directors,
normally without further stockholder action (except as may be required for a
particular transaction by applicable law, requirements of regulatory agencies or
by stock exchange rules), for any proper corporate purpose including, among
other things, future acquisitions of property or securities of other
corporations, stock dividends, stock splits, stock options, convertible debt and
equity financing. The availability of additional authorized but unissued shares
will be achieved by effectuating an increase in the number of authorized shares
of common stock from 29,000,000 to 250,000,000. This step is necessary, in the
judgment of the Board of Directors, in order to raise additional capital and
carry out the Company's business objectives.
From time to time, the Company may consider acquisitions or other
transactions which may require the issuance of shares of Common Stock. The
Company presently has no understandings or arrangements which would require the
issuance of any of the additional shares of Common Stock which are proposed to
be authorized. Further, there are no definitive agreements at this time
respecting any merger or consolidation with or acquisition of another business,
or the sale or liquidation of the Company or its business. However, management
believes that the increase in the number of authorized shares of Common Stock is
in the best interest of the Company and its stockholders since additional shares
of Common Stock will provide the Company with the flexibility of having a
broader choice in the type and number of equity securities available to it for
the above and other corporate purposes.
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Due to the Board of Directors' discretion in connection with the
issuance of additional shares of Common Stock to be issued in a private
placement, it may, under certain circumstances, possess
timing and other advantages in responding to a tender offer or other attempt to
gain control of the Company, which may make such attempts more difficult and
less attractive. For example, issuance of additional shares would increase the
number of shares outstanding and could necessitate the acquisition of a greater
number of shares by a person making a tender offer and could make such
acquisition more difficult since the recipient of such additional shares may
favor the incumbent management. Moreover, these advantages give the Board of
Directors the ability to provide any such holders with a veto power over actions
proposed to be taken by the holders of the Company's Common Stock. This could
have the effect of insulating existing management from removal, even if it is in
the best interest of the common stockholders. Management of the Company is not
aware of any existing of threatened efforts to obtain control of the Company.
ADOPTION OF THE PRINCETON MINING COMPANY CORPORATION 2002 STOCK OPTION PLAN
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The following summary provides an overview of the more commonly applicable
terms of the Princeton Mining Company 2002 Stock Option Plan (the "Plan"). A
full and complete copy of the Plan is attached hereto as Appendix B.
The Plan shall be administered in accordance with Rule 16b-3 under the
Exchange Act. Therefore, future grants of stock options thereunder are exempt
from Section 16(b) short-swing profit liability. A total of 2,000,000 shares of
Common Stock, $.10 par value, subject to adjustments for changes in
capitalization or reorganization, may be issued pursuant to the Plan. As
discussed below, the Plan is a "dual plan" which provides for the grant of both
Non-Qualified Options and Incentive Stock Options.
ELIGIBILITY TO RECEIVE OPTIONS. All employees, officers and directors of
Princeton Mining Company and any subsidiary are eligible for grants of options
under the Plan. However, Directors who are not officers or employees may only
receive Non-Qualified Stock Options, not Incentive Stock Options.
The Board of Directors, or the Compensation Committee, which shall serve at
the pleasure of the Board of Directors and be comprised of two or more
Non-Employee Directors, as defined in Rule 16b-3 under the Exchange Act, shall
have sole discretion to determine which eligible person shall receive future
grants of options under the Plan.
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THE OPTIONS. Options will be granted pursuant to Stock Option Agreements
which contains such terms and conditions as the Board of Directors or
Compensation Committee determines to be consistent with the Plan.
EXERCISE PRICE. The Board of Directors or Compensation Committee shall
determine the exercise price for all options, and except in the case of an
Incentive Stock Option to an employee who owns more than 10% of the total
combined voting power of all classes of stock of Princeton Mining Company, in
which case the exercise price will be 110% of fair market value. However, the
purchase price may not be less than the fair market value of the shares subject
to the option on the date the option is granted.
TIME OF EXERCISE. The Board of Directors or Compensation Committee shall
determine the dates of exercise for all options, but in no case will the
exercise period exceed 10 years except in the case of an Incentive Stock Option
for an employee who owns more than 10% of the total combined voting power of all
classes of stock of Princeton Mining Company in which case the exercise period
shall be five (5) years.
NUMBER OF SHARES OF COMMON STOCK SUBJECT TO AN OPTION. The Board of
Directors or Compensation Committee will determine the number of shares of
Common Stock subject to an option. However, the fair market value of the stock,
determined as of the date of grant, for which Incentive Stock Options may first
become exercisable by an Optionee during any calendar year under the Plan,
together with that of stock subject to Incentive Stock Options first exercisable
(other than as a result of acceleration) by such Optionee under another plan of
Princeton Mining Company or any subsidiary or parent corporation shall not
exceed $100,000.
OTHER TERMS, COVENANTS AND CONDITIONS. The other terms, conditions and
restrictions may vary. The grant of an option does not restrict Princeton Mining
Company's right to terminate employment of a recipient at any time.
ADJUSTMENT IN NUMBER, PRICE, AND KIND OF SHARES. The shares of common stock
of Princeton Mining Company subject to the options shall be appropriately
adjusted by the Board of Directors in the event of a reorganization, merger,
consolidation, recapitalization, reclassification, stock split, stock dividend,
etc. In the event of a dissolution or liquidation of Princeton Mining Company, a
merger, consolidation, combination or reorganization in which Princeton Mining
Company is not the surviving corporation, or a sale of substantially all of the
assets of Princeton Mining Company, any outstanding option shall become fully
vested immediately upon Princeton Mining Company's public announcement of any of
the foregoing.
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TERMINATION OF STATUS AS AN EMPLOYEE, OFFICER OR DIRECTOR. If an Optionee
ceases to serve as an employee, officer or director of Princeton Mining Company
the options held by the Optionee may be exercised within three months after the
date the Optionee ceases rendering services. After such three month period, all
unexercised options shall terminate. If an Optionee granted an Incentive Stock
Option terminates employment but continues as a consultant, advisor or in a
similar capacity to Princeton Mining Company, the Optionee need not exercise the
option within three months of termination of employment but shall be entitled to
exercise within three months of termination of services to Princeton Mining
Company (one year in the event of death or disability). However, if the Optionee
does not exercise within three months of termination of employment, the option
will not qualify as an Incentive Stock Option. Notwithstanding the foregoing, in
no event may an option be exercised after its term has expired.
RIGHTS AS STOCKHOLDER. The Optionee shall have no rights as a stockholder
with respect to any shares until the date of issuance of a stock certificate for
such shares.
DEATH. If an Optionee should die while serving as an employee, officer or
director of Princeton Mining Company, the options held may be exercised by the
Optionee's estate at any time within one year after the death and shall
terminate thereafter. Notwithstanding the foregoing, in no event may an option
be exercised after its term has expired.
AMENDMENTS. Without stockholder approval, no amendments may be made to the
Plan to increase the limit on the maximum number of shares to be granted (except
for adjustments resulting from stock splits and similar events), to modify the
eligibility requirements or to increase materially the benefits accruing to
participants under the Plan. In substantially all other aspects, the Plan can be
amended by the Board of Directors.
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SUSPENSION OR TERMINATION OF OPTIONS. No options shall be exercisable by
any person after its expiration date. If the Compensation Committee reasonably
believes that a participant has committed an act of misconduct, the Compensation
Committee may suspend the Optionee's right to exercise any option pending a
final determination by the Compensation Committee. If the Compensation Committee
determines an Optionee has committed an act of embezzlement, fraud, breach of
fiduciary duty or deliberate disregard of Princeton Mining Company's rules or if
a participant makes an unauthorized disclosure of any trade secret or
confidential information, engages in any conduct constituting unfair
competition, induces any of Princeton Mining Company's customers or contracting
parties to breach a contract with Princeton Mining Company, or induces any
principal for whom Princeton Mining Company acts as an agent to terminate such
agency relationship, neither the Optionee nor his 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 Optionee an opportunity to
appear and present evidence on the Optionee's behalf at a hearing before the
Compensation Committee. The determination of the Compensation Committee shall be
final and conclusive unless overruled by the Board of Directors.
NON-TRANSFERABILITY OF OPTIONS. An option is nontransferable, other than by
will or the laws of descent and distribution, and is exercisable only by the
Optionee 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
referenced above.
TERMINATION OF THE PLAN. The Plan can be terminated at any time by the
Board of Directors. If not terminated earlier by the Board of Directors, the
Plan will terminate automatically in or around August, 2012. If the Plan is
terminated, options previously granted shall nevertheless continue in accordance
with the provisions of the Plan without materially affecting the recipients'
rights under such options.
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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.
FEDERAL TAX ASPECTS. The Plan is a "dual plan" in that it provides for the
grant of both Non-Qualified Options and Incentive Stock Options.
NON-QUALIFIED OPTIONS. In general, the grant of an option under the Plan
that is designated as a non-qualified option will not result in taxable income
to the recipient at the time of grant.
In general, under the Plan, an Optionee who exercised the option will
recognize ordinary income in an amount equal to the excess of the fair market
value of the shares at the time of exercise over the option price.
An exception to the general rules set forth above exists in the case of
common stock subject to a substantial risk of forfeiture and which is
non-transferable. This occurs if restrictions in connection with the issuance of
the stock options are present. In such circumstances, ordinary income will be
recognized when the risk of forfeiture lapses or the shares become transferable,
whichever occurs first, rather than the dates described in the two foregoing
paragraphs, unless the participant timely files a statement with the IRS
electing to be taxed on the date of issuance.
Princeton Mining Company will be entitled to tax deductions in the same
amounts and at the same times as the participant takes amounts into income. The
Optionee's cost basis in the acquired shares will be the same as the fair market
value of the shares on the date they are valued to determine taxable income.
INCENTIVE STOCK OPTIONS. The grant of an option under the Plan that is
designated as an Incentive Stock Option under Section 422 of the Internal
Revenue Code and if the requirements of Section 422 are met, will not result in
taxable gain to the recipient at the time of the grant nor at the time of
exercise. The Optionee will, however, recognize taxable income in the year in
which the shares purchased under the Incentive Stock Option are sold or
otherwise made the subject of disposition.
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For federal income tax purposes, dispositions are divided into two
categories: qualifying and disqualifying. The Optionee will make a qualifying
disposition of the purchased shares if the sale or other disposition of such
shares is made after the participant has had the shares for more than two years
after the grant date of the Incentive Stock Option and more than one year after
the exercise date. If the participant fails to satisfy either of these two
holding periods prior to the sale or other disposition of the purchased shares,
then a disqualifying disposition will result.
Upon a qualifying disposition, the Optionee will recognize capital gain in
an amount equal to the excess of (i) the amount realized upon the sale or other
disposition of the purchased shares over (ii) the option price paid for the
shares. If there is a disqualifying disposition of the shares, then the Optionee
will recognize as ordinary income in an amount equal to the excess of (i) the
fair market value of those shares at the date of exercise over (ii) the option
price paid for such shares. Any additional gain recognized upon the disposition
will be capital gain.
If the participant makes a disqualifying disposition of the purchased
shares, then Princeton Mining Company will be entitled to an income tax
deduction for the taxable year in which such disposition occurs, equal to the
amount by which the fair market value of such shares on the date the option was
exercised exceeded the option price. In no other instance will Princeton Mining
Company be allowed a deduction with respect to the Optionee's disposition of the
purchased shares.
WITHHOLDING TAXES. Princeton Mining Company is entitled to take appropriate
measures to withhold from the shares of common stock, or to otherwise obtain
from the recipients, sufficient sums Princeton Mining Company deems necessary to
satisfy any applicable federal, state and local withholding taxes, including
FICA taxes, before the delivery of the common stock to the recipient.
VOTE REQUIRED. Adoption of the Plan requires approval of the majority of
the voting power of the shares of Princeton Mining Company Common Stock, which
has occurred pursuant to the written consent of the Majority Holder.
VOTE REQUIRED FOR APPROVAL
Section 78.390 of the Nevada Revised Statutes ("NRS") provides an outline
of the scope of the amendments of the Articles of Incorporation allowed a Nevada
corporation and the procedures and requirements to effect an amendment to the
Articles of Incorporation of a Delaware corporation. Pursuant to Section 78.390
proposed amendments must first be adopted by the Board of Directors and then
submitted to shareholders for their consideration at an annual or special
meeting and must be approved by a majority of the outstanding voting securities.
Section 78.320 of the NRS provides that any action required to be taken at a
special or annual meeting of the stockholders of a Nevada corporation may be
taken by written consent, in lieu of a meeting, if the consent is signed by
stockholders owning at least a majority of the voting power.
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The Board of Directors of PRNM and persons owning and having voting
power in excess of 50% of the outstanding voting securities of PRNM have
adopted, ratified and approved the change in the authorized shares of PRNM. No
further votes are required or necessary to effect the proposed amendment.
The securities that would have been entitled to vote if a meeting was
required to be held to amend the Company's Articles of Incorporation consist of
27,677,140 shares of issued and outstanding shares of the Company's $.10 par
value common voting stock outstanding on May 15, 2002, the record date for
determining shareholders who would have been entitled to notice of and to vote
on the proposed amendment to TSPT's Articles of Incorporation.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Percentage of
Common Stock Common Stock
Beneficially Beneficially Owned
Name (1) Title Owned (1) On Record Date
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Randy Howell Chief 18,000,000 65.04%
2842 Placid Circle Exec. Off.
Grapevine, TX 76051 & Director
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ADDITIONAL INFORMATION
Additional information concerning PRNM, including its Form 10-KSB
statement, which has been filed with the Securities and Exchange Commission, may
be accessed through the EDGAR archives, at www.sec.gov.
DATED: June 4, 2002
BY ORDER OF THE BOARD OF DIRECTORS:
/s/ Randy Howell, CEO
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