Letter to Shareholders
Our last newsletter solicited shareholder response to three issues designed to redirect the future of our corporation. All three were approved; however, only the stock option incentive plan needs formal shareholder approval. Voting was:
YES NO ABSTAIN
Increase authorized shares 61,650 19,182 23,394
Split the stock 64,425 17,967 22,322
Formulate an option plan 57,495 37,375 8,694
The board of directors amended the Articles to increase the outstanding share to 4,000,000 (regulated by statute proportionately to the split). Issuance of ten new shares for each single share outstanding was approved. New stock certificates are being printed by U.S. Banknote Company, which will reflect the above changes. Important details on how to exchange your shares are included in this newsletter.
Company directors have called a special shareholders meeting January 17, 1984, in Sacramento. The notice is printed on page three of this newsletter. We ask that you ratify three motions:
1. Incentive stock option plan for officers and employees.
2. Annual meeting date change/amendment to Bylaws.
3. Update and revision of Bylaws.
1. Approval of the stock option incentive plan for key officers is necessary to attract, keep and motivate personnel. A stock option is sometimes referred to as the "golden carrot plan". With this plan the directors will have discretionary flexibility in seeking a professional staff in lieu of customary salaries. The complete plan is on pages 3 and $ of this newsletter.
2. Approval of changing the date of the annual meeting has several benefits. The near weekend date of Friday will help distant shareholders arrange travel plans. June was selected to eliminate concern about inclement weather (most children have begun summer vacation, and it will be a great experience for the youngsters). We have cleared and reserved the Saturday after the meeting with our lessee, Lucky Chance Mining, to visit the mine in Alleghany. Our lessee is proud of the work they are doing. They welcome the opportunity to demonstrate this to Original Sixteen tone shareholders. It should be an exciting and informative day. The drive from Sacramento t Alleghany is about 21/2 hours…paved roads. Overnight accommodations are available in Nevada City and Downieville.
3. Approval of authorizing the officers and directors to prepare bylaw revisions for the annual meeting is a task long overdue. This has been suggested various times in the past, but nothing was done. We intend to retain the flavor of suitable historical language. Because of California legislation this updating is a must. It requires the approval of our shareholders. This motion authorizes management to complete the work and submit the revised bylaws to the shareholders for approval at the next annual meeting.
We ask for your continuing patience during this period of company reorganization. You have been asked to read and do many things in this newsletter. We have one more item for you.
A form entitled Stock Transfer and Exchange is included in this mail-out. Follow its directions carefully, please. If you have any questions, phone or write Securities Registrar and Transfer Corporation. They have the knowledge and experience to help you.
ACTIVITIES IN ALLEGHANY
Relations with our lessee have improved significantly. None of the past officers, directors or employees of the lessee remain. Professional progress reports are being submitted.
LCM officers have encouraged us to come to the mine. Our underground monitoring program is well underway in establishing the current status of the mine workings. As LCM continues its pumping program we will inspect each accessible level.
LCM is driving two tunnels, scheduled to intersect in three weeks. This main haulage way will enable miners efficient ingress and egress to the ore zones LCM plans to mine.
Opening the mill has been more difficult than LCM planned. Many of the crushing and concentrating pieces of equipment did not work. Some that did were improperly installed and had to be removed. It is premature to predict a date the mill will become capable of steady production.
Michael M. Miller