-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CwvLKmkB9g+cUX1OuGvkw7AYao6xMNoDdsMIpxTNLs3t5879OhIB5VkQdT7yAqrF JQN1+/WHJHw/L0bJRGXuLg== 0000950134-97-005814.txt : 19970811 0000950134-97-005814.hdr.sgml : 19970811 ACCESSION NUMBER: 0000950134-97-005814 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970808 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUNSHINE MINING & REFINING CO CENTRAL INDEX KEY: 0000833376 STANDARD INDUSTRIAL CLASSIFICATION: PRIMARY SMELTING & REFINING OF NONFERROUS METALS [3330] IRS NUMBER: 752231378 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10012 FILM NUMBER: 97653821 BUSINESS ADDRESS: STREET 1: 877 WEST MAIN STREET STREET 2: SUITE 600 CITY: BOISES STATE: ID ZIP: 83702 BUSINESS PHONE: 2083450660 MAIL ADDRESS: STREET 1: 877 W MAIN STREET SUITE 600 CITY: BOISE STATE: ID ZIP: 83702 FORMER COMPANY: FORMER CONFORMED NAME: SUNSHINE MINING CO /DE DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: SUNSHINE HOLDINGS INC DATE OF NAME CHANGE: 19880915 10-Q 1 FORM 10-Q FOR QUARTER ENDED JUNE 30, 1997 1 ================================================================================ FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended June 30, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For The Transition Period From ______________________ to _____________________ Commission File Number 1-10012 SUNSHINE MINING AND REFINING COMPANY - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 75-2618333 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 877 W. Main, Suite 600, Boise, Idaho 83702 - -------------------------------------------------------------------------------- (Address of principal executive offices) Registrant's telephone number including area code (208) 345-0660 -------------- - -------------------------------------------------------------------------------- Former name, former address and former fiscal year, if changed since last report Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Number of Shares Outstanding Title of Each Class of Common Stock at August 4, 1997 - ----------------------------------- ---------------------------- Common Stock, $.01 par value 255,137,312 Page 1 of 9 2 SUNSHINE MINING AND REFINING COMPANY CONSOLIDATED BALANCE SHEETS (In Thousands)
(Unaudited) June 30 December 31 1997 1996 ------------ ------------ ASSETS Current assets: Cash and cash investments $ 7,157 $ 16,317 Silver bullion 7,765 7,989 Accounts receivable 1,277 2,624 Inventories (Note 2) 2,598 2,523 Other current assets 1,400 1,108 ------------ ------------ Total current assets 20,197 30,561 Property, plant and equipment, at cost 142,261 141,409 Less accumulated depreciation, depletion and amortization (74,448) (72,124) ------------ ------------ 67,813 69,285 Investments and other assets 5,078 5,640 ------------ ------------ Total assets $ 93,088 $ 105,486 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,611 $ 987 Accrued expenses 3,720 4,015 ------------ ------------ Total current liabilities 5,331 5,002 Long-term debt 31,515 31,515 Accrued pension and other postretirement benefits 5,959 6,074 Other long-term liabilities and deferred credits 4,613 5,032 Stockholders' equity: Common stock--$.01 par value; 600,000 shares authorized; shares issued: June 30, 1997 - 259,803 December 31, 1996 - 259,652 2,598 2,597 Paid-in capital 704,342 704,343 Deficit (660,031) (647,832) ------------ ------------ 46,909 59,108 Less treasury stock, at cost: June 30, 1997 - 4,666 shares December 31, 1996 - 4,671 shares 1,239 1,245 ------------ ------------ 45,670 57,863 ------------ ------------ Total liabilities and stockholders' equity $ 93,088 $ 105,486 ============ ============
See accompanying notes. -2- 3 SUNSHINE MINING AND REFINING COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS (In Thousands, Except Per Share Amounts) (Unaudited)
Quarter Ended Six Months Ended June 30, June 30, -------------------- -------------------- 1997 1996 1997 1996 -------- -------- -------- -------- Operating revenues $ 4,758 $ 4,025 $ 11,312 $ 7,352 Mark to market loss (372) (1,074) (186) (604) -------- -------- -------- -------- 4,386 2,951 11,126 6,748 -------- -------- -------- -------- Costs and expenses: Cost of revenues 5,456 4,580 11,964 8,205 Depreciation, depletion and amortization 1,214 1,061 2,522 2,021 Exploration 2,048 1,950 4,410 4,474 Selling, general and administrative expense 1,461 1,367 2,841 2,619 -------- -------- -------- -------- 10,179 8,958 21,737 17,319 -------- -------- -------- -------- Operating loss (5,793) (6,007) (10,611) (10,571) Other income (expense): Interest income 200 429 410 611 Interest and debt expense (1,013) (990) (2,029) (1,286) Other, net (4) 25 31 83 -------- -------- -------- -------- (817) (536) (1,588) (592) -------- -------- -------- -------- Net loss (6,610) (6,543) (12,199) (11,163) Gain on retirement and exchange of preferred stock -- 40,124 -- 40,124 Preferred stock dividend requirements -- -- -- (2,622) -------- -------- -------- -------- Income (loss) applicable to common shares $ (6,610) $ 33,581 $(12,199) $ 26,339 ======== ======== ======== ======== Income (loss) per common share: Primary $ (0.03) $ 0.16 $ (0.05) $ 0.13 ======== ======== ======== ======== Fully diluted $ (0.03) $ 0.15 $ (0.05) $ 0.12 ======== ======== ======== ======== Weighted average common shares outstanding 255,137 212,471 255,100 202,230 ======== ======== ======== ========
See accompanying notes. -3- 4 SUNSHINE MINING AND REFINING COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands) (Unaudited)
Six Months Ended June 30, 1997 1996 -------- -------- Cash used by operating activities: Net loss $(12,199) $(11,163) Adjustments to reconcile net loss to net cash used by operations: Depreciation, depletion and amortization 2,522 2,021 Exploration costs charged to operations 4,410 4,474 Amortization of debt issuance costs 323 195 Other -- (60) Net (increase) decrease in: Silver bullion 224 601 Accounts receivable 1,347 (135) Inventories (74) (586) Other assets and deferred charges (328) (340) Net increase (decrease) in: Accounts payable and accrued expenses 479 1,862 Accrued pension and other postretirement benefits (114) 79 Other liabilities and deferred credits (413) (749) -------- -------- Net cash used by operations (3,823) (3,801) -------- -------- Cash provided (used) by investing activities: Additions to property, plant and equipment and exploration expenditures (5,460) (6,197) Proceeds from investments 273 700 -------- -------- Net cash used by investing activities (5,187) (5,497) -------- -------- Cash provided (used) by financing activities: Costs associated with conversion of preferred stock into common stock -- (1,028) Proceeds from issuance of common stock upon exercise of stock options and warrants -- 1 Proceeds from issuance of long term debt -- 30,000 Debt issuance costs (150) (2,320) -------- -------- Net cash provided (used) by financing activities (150) 26,653 -------- -------- Increase (decrease) in cash and cash investments (9,160) $ 17,355 Cash and cash investments, January 1 16,317 12,837 -------- -------- Cash and cash investments, June 30 $ 7,157 $ 30,192 ======== ======== Supplemental cash flow information - Interest paid in cash $ 1,411 876 ======== ========
See accompanying notes. -4- 5 SUNSHINE MINING AND REFINING COMPANY NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS June 30, 1997 1. BASIS OF PRESENTATION The accompanying unaudited consolidated condensed financial statements of Sunshine Mining and Refining Company ("Sunshine" or the "Company") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six month period ended June 30, 1997 are not necessarily indicative of the results that may be expected for the year ended December 31, 1997. For further information, refer to the consolidated financial statements and footnotes thereto included in Sunshine's report on Form 10-K for the year ending December 31, 1996. 2. INVENTORIES The components of inventory consist of the following:
June 30 December 31 1997 1996 ------- ----------- Precious Metals Inventories: Work in process $1,169 $1,144 Finished goods 309 405 Materials and supplies inventories 1,120 974 ------ ------ $2,598 $2,523 ====== ======
3. RECENT ACCOUNTING PRONOUNCEMENTS In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per Share" which becomes effective for the Company's 1997 consolidated financial statements beginning in the fourth quarter of 1997. SFAS No. 128 will eliminate the disclosure of primary earnings per share which includes the dilutive effect of stock options, warrants and other convertible securities ("Common Stock Equivalents") and instead requires reporting of "basic" earnings per share, which will exclude Common Stock Equivalents. Additionally, SFAS No. 128 changes the methodology for fully diluted earnings per share. In the opinion of the Company's management, it is not anticipated that the adoption of this new accounting standard will have a material effect on the reported earnings per share of the Company. 5 6 SUNSHINE MINING AND REFINING COMPANY Management's Discussion and Analysis of Financial Condition and Results of Operations for the Six Months Ended June 30, 1997 and 1996 LIQUIDITY AND CAPITAL RESOURCES The Company's principal product at this time is silver produced from its Sunshine Mine in Kellogg, Idaho. Due to low silver prices, the Company's operations have not generated positive cash flow, and the costs of exploration, general and administrative expense, and interest charges have been funded from available cash balances. In 1992, in response to low silver prices the Company implemented an exploration program to find lower-cost silver reserves in the Sunshine Mine and in Latin America. The first such ore body found, the West Chance, is in the previously undeveloped western section of the Sunshine Mine. The Company has almost completed development of the West Chance and has begun full-scale mining operations in the ore body. A significant reduction in the Company's cash production cost per ounce is anticipated in the second half of 1997 as a result of production increases. The anticipated improvements will not restore the Company to profitability at current silver prices; however, the Company's international exploration program has identified other properties which have significant potential to further improve results. The Company will soon complete pre-feasibility studies on its Pirquitas Mine in Northwest Argentina, a property identified and acquired in late 1995. These studies are expected to confirm that Pirquitas will be a large low-cost silver/tin producer and add significantly to the Company's reserve base. Development of the property as a 5,500 ton per day operation is currently being studied and would likely require a capital investment of approximately $70-80 million. The Company has not yet begun to seek funding sources for this project. In the second quarter of 1997, the Company acquired the rights to a property in the Chubut province of Argentina, which it has named "La Joya del Sol." Surface sampling and underground drilling has identified at least three epithermal quartz veins on the property containing significant amounts of high-grade gold mineralization. Based on the veins' width, strike length and the consistency of the mineralization, the Company believes La Joya del Sol will likely be an important gold mine. In addition, several other outcrops similar in appearance to those already being tested have been identified on the surface, but as yet no work has been commenced. The Company has not yet begun to estimate capital and operating costs. Should development of the property be warranted, the Company will have to obtain capital from outside sources, which it has not as yet identified. The Company considers the addition of new producing properties through its exploration program vital to its return to profitability, and has budgeted approximately $5.8 million for exploration in 1997, compared to expenditures of $10.2 million in 1996. Future spending on exploration projects is contingent on the Company's ability to raise new funding. The Company believes its success in finding and developing new properties will assist it in raising the funds required to continue its exploration program as well as in funding the development of the properties it has already identified. However, no assurance can be given that the necessary exploration and development funds can be obtained. At the end of the second quarter of 1997, the Company's working capital was $14.9 million, which is considered adequate for the foreseeable future. Operating, Investing, and Financing Activities Cash used in operating activities was $3.8 million in the first half of 1997 and 1996. The cash operating loss increase of $0.4 million in the first half of 1997 was offset by changes in working capital components. The cash operating loss increased primarily due to the $0.7 million increase in interest and debt expense related to the Eurobonds. Approximately $5.2 and $5.5 million of cash was used by investing activities in the 1997 and 1996 six-month periods, respectively. Cash provided by financing activities was $26.7 million in the first half of 1996 as a result of the Company's Notes Offering. 6 7 RESULTS OF OPERATIONS THE THREE MONTHS ENDED JUNE 30, 1997 COMPARED TO THE THREE MONTHS ENDED JUNE 30, 1996 Consolidated operating revenues increased approximately $0.7 million for the second quarter of 1997 compared to the second quarter of 1996. The increase in operating revenues resulted from an increase in silver sales volumes (764,000 ounces of silver in the 1997 quarter compared to 655,000 ounces in the 1996 quarter) and the associated $0.6 million increase in by-product revenue partially offset by a $0.52 (10.1%) decrease in average silver price received per ounce. The silver sales volume increase primarily resulted from a 145,000 ounce (22%) increase in production in the 1997 quarter. Mark to market losses on silver in work-in-process inventories and investment silver bullion decreased $0.7 million. The mark to market losses were caused by declines in the silver price during the periods, resulting in writedowns of the value of the Company's work-in-process inventories and silver bullion held for investment. Cost of revenues increased $0.9 million (19%) (from $4.6 million in the 1996 quarter to $5.5 million in the 1997 quarter) primarily due to the 22% increase in production in 1997, partially offset by lower unit production costs. Unit production costs decreased $.58 (9.4%) to $5.60 per ounce of silver primarily due to the increase in silver production from 1996 to 1997 (803 thousand ounces produced from 37,867 tons at 21.98 ounces per ton in 1997 versus 659 thousand ounces from 28,077 tons at 24.17 ounces per ton in 1996). Depreciation, depletion and amortization increased by approximately $153 thousand as a result of increased production in the 1997 period. Interest income decreased $229 thousand due to lower average invested cash balances. THE SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 1996 Consolidated operating revenues increased approximately $4.0 million (53.9%) for the first six months of 1997 compared to the first six months of 1996 primarily due to an increase in sales volume (1.8 million ounces of silver in the first six months of 1997 compared to 1.2 million ounces of silver in the same period of 1996) and the associated $1.3 million increase in by-product revenue. The increase in sales volumes primarily resulted from a 491,000 ounce (40.5%) increase in production in 1997 compared to 1996, and a 53 thousand ounce increase in sales volume of finished silver. Mark to market losses on work-in-process silver inventories and silver bullion held for investment amounted to $186 thousand and $604 thousand in 1997 and 1996, respectively. The losses were due to declines in the per ounce silver price during the periods, from $4.74 to $4.60 between December 31, 1996 and June 30, 1997; and from $5.28 to $4.98 between December 31, 1995 to June 30, 1996. The price per ounce has declined further since June 30, 1997 and additional mark to market losses will be incurred in the third quarter if the price does not recover. Cost of revenues increased $3.8 million (46%) (from $8.2 million in the first six months of 1996 to $12.0 million in the first six months of 1997) primarily due to the 40.5% increase in production in 1997, partially offset by lower unit production costs. Unit production costs decreased $.75 (12.3%) to $5.34 primarily due to the 40.5% increase in silver production (1.7 million ounces produced from 83,667 tons at 21.08 ounces per ton in 1997 versus 1.2 million ounces from 58,317 tons at 21.46 ounces per ton in 1996). Depreciation, depletion and amortization increased by approximately $501 thousand as a result of increased production figures in the 1997 period. Interest income decreased by $201 thousand due to lower average invested cash balances. Interest expense increased $743 thousand due to the Company's Notes Offering completed in March, 1996. 7 8 SUNSHINE MINING AND REFINING COMPANY PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS None ITEM 2. CHANGES IN SECURITIES None ITEM 3. DEFAULTS UPON SENIOR SECURITIES None ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS On June 10, 1997, at Sunshine's Annual Meeting of Stockholders, for which proxies were solicited pursuant to Regulation 14A, holders of common stock voted on the following matters: 1. The following nominees for director were elected by the vote indicated:
Broker Name For Withheld Non-votes -------------------- ----------- --------- --------- G. Chris Andersen 178,430,296 8,454,423 0 V. Dale Babbitt 178,367,352 8,517,367 0 George M. Elvin 178,427,824 8,456,895 0 Daniel D. Jackson 178,417,085 8,467,634 0 Oren G. Shaffer 178,398,242 8,486,477 0 John S. Simko 178,300,512 8,584,207 0 Robert B. Smith, Jr. 178,427,239 8,457,480 0
2. The proposal to amend the Certificate of Incorporation of Sunshine to increase the authorized Common Stock to 600 million shares was approved by the following vote: For: 155,231,706 Against: 27,169,879 Abstain: 4,483,134 Broker Non-Votes 0
3. The alternative proposals to amend the Certificate of Incorporation of Sunshine to effect a one-for-three, one-for-five or one-for-eight reverse stock split of the issued and outstanding shares of Sunshine's Common Stock at the discretion of the Board of Directors of Sunshine were approved by the following vote: For: 159,255,785 Against: 23,446,969 Abstain: 4,181,965 Broker Non-Votes 0
ITEM 5. OTHER INFORMATION None ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits *Exhibit No. 3.1 Certificate of Incorporation of Sunshine Mining and Refining Company, as amended by the Certificate of Amendment effective June 26, 1997, increasing Sunshine's authorized common stock, par value $.01, to 600,000,000 (600 million) shares. *Exhibit No. 27 Financial Data Schedule. *Filed herewith 8 9 (b) Reports on Form 8-K None SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereto duly authorized. SUNSHINE MINING AND REFINING COMPANY Dated: August 8, 1997 By: /s/ WILLIAM W. DAVIS ------------------------------ William W. Davis Executive Vice President and Chief Financial Officer 9 10 INDEX TO EXHIBITS
EXHIBIT DESCRIPTION ------- ----------- 3.1 Certificate of Incorporation of Sunshine Mining and Refining Company, as amended by the Certificate of Amendment effective June 26, 1997, increasing Sunshine's authorized common stock, par value $.01, to 600,000,000 (600 million) shares. 27 Financial Data Schedule.
EX-3.1 2 CERTIF. OF INC. AS AMENDED BY CERTIF. OF AMENDMENT 1 EXHIBIT 3.1 CERTIFICATE OF INCORPORATION OF SUNSHINE MINING AND REFINING COMPANY FIRST: The name of the Corporation is Sunshine Mining and Refining Company. SECOND: The registered office of the Corporation in the state of Delaware is located at 1013 Centre Road in the City of Wilmington, County of New Castle. The name and address of its registered agent is Corporation Service Company, 1013 Centre Road, Wilmington, Delaware 19805. THIRD: The nature of the business, objects and purposes to be transacted, promoted or carried on by the Corporation are as follows: To engage in and carry on the business of exploring for, developing and utilizing natural resources of every kind and description; to explore for, to develop and to mine, mill, concentrate, convert, smelt, treat, refined, prepare for market, manufacture, buy, sell, exchange, and otherwise to produce, process and deal in natural resources of every kind and description, including without limitation, ores, metals, minerals, oil, natural gas, timber, water, and all other natural products and the products and by-products thereof of every kind and description and by whatever means the same can be and may hereafter be bought, sold, conveyed, transferred, produced, processed, handled or otherwise dealt in; to buy, sell, exchange, lease, acquire and otherwise deal in real property, mines, mineral rights and claims of any nature whatsoever, timber rights, and interests of any nature whatsoever in oil and gas; to own, lease, hire, rent, as lessee or lessor, operate and manage all types of real property, buildings and fixtures, and the machinery, equipment and other personal property and facilities necessary to the conduct, operation and management of such business and all other activity in connection therewith; To manufacture, purchase or otherwise acquire, invest in, own, mortgage, pledge, sell, assign and transfer or otherwise dispose of, trade, deal in and with goods, wares and merchandise and personal property of every class and description; To acquire, and pay for in cash, stock, or bonds of this Corporation or otherwise, the goodwill, rights, assets and property, and to undertake or assume the whole or any part of the obligations or liabilities of any person, partnership, trust, joint stock company, syndicate, firm, association or corporation; To acquire, hold, use, sell, assign, lease, grant licenses in respect of, mortgage or otherwise dispose of letters patent of the United States or any foreign country, patent rights, licenses and privileges, inventions, improvements and processes, copyrights, trademarks and trade names, relating to or useful in connection with any business of this Corporation; To acquire by purchase, subscription or otherwise, and to receive, hold, own, sell, assign, exchange, transfer, mortgage, pledge or otherwise dispose of or deal in and with any of the shares of the capital stock, or any voting trust certificates in respect of the shares of capital stock, scrip, warrants, rights, bonds, debentures, notes, trust receipts and other securities, obligations, chooses in action and evidences of indebtedness or interest issued or created by any corporations, joint stock companies, syndicates, associations, firms, trusts or persons, public or private, or by the government of the United States of America, or by any foreign government, or by any state, territory, province municipality or other political subdivision or by any governmental agency, and as owner thereof to possess and exercise all rights, powers and privileges of ownership, including the right to execute consents and vote thereon, and to do any and all acts and things necessary or advisable for the preservation, protection, improvement and enhancement in value thereof; To borrow or raise moneys for any of the purposes of the Corporation and, from time to time without limit as to amount, to draw, make, accept, endorse, execute and issue promissory notes, drafts, bills of exchange, warrants, bonds, debentures and other negotiable or non-negotiable instruments and evidences of indebtedness, and to secure the payment of any thereof and of the interest thereon by mortgage upon or pledge, conveyance or assignment in trust of the whole or any part of the property of the Corporation, whether at the time owned or thereafter acquired, and to sell, pledge or otherwise dispose of such bonds or other obligations of the Corporation for its corporate purposes; To purchase, receive, take by grant, gift, devise, bequest or otherwise, lease, or otherwise acquire, own, hold, improve, employ, use and otherwise deal in and with, real or personal property, or any interest therein, wherever situated, and to sell, convey, lease, exchange, transfer or otherwise dispose of, or mortgage or pledge, all or any of the Corporation's property and assets, or any interest therein, wherever situated; and CERTIFICATE OF INCORPORATION - 1 2 To engage in any lawful act or activities for which corporations may be organized under the General Corporation Law of Delaware. The business and purposes specified in the foregoing clauses shall, except where otherwise expressed, be in nowise limited or restricted by reference to, or inference from, the terms of any other clause in this Certificate of Incorporation, but the business and purposes specified in each of the foregoing clauses of this Article shall be regarded as independent business and purposes. FOURTH: The total number of shares which the Corporation shall have authority to issue is Six Hundred Twenty Million (620,000,000), of which stock Six Hundred Million (600,000,000) shares of the par value of $0.01 each shall be designated Common Stock and of which Twenty Million (20,000,000) shares of the par value of $1.00 each shall be designated Preferred Stock. Section 1. Power of Board to Issue Preferred Stock. Shares of Preferred Stock may be issued from time to time in one or more series, each of such series to have distinctive serial designations, which may be by distinguishing number, letter or title, as shall hereafter be determined in the resolution or resolutions providing for the issue of such Preferred Stock from time to time adopted by the Board of Directors of the Company at a regularly called meeting without dissenting vote, pursuant to authority so to do which is hereby conferred upon and vested in the Board of Directors. Section 2. Terms of Preferred Stock. Each series of Preferred Stock (i) may have such number of shares; (ii) may have such voting powers, including, without limitation, the right to vote as a class in connection with a Business Combination (as defined in Article Fifth), full or limited, or may be without voting powers; (iii) may be subject to redemption at such time or times and at such price or prices; (iv) may be entitled to receive dividends, which may be cumulative or noncumulative, at such rate or rates, on such conditions, from such date or dates, and at such times, and payable in preference to, or in such relation to, the dividends payable on any other class or classes or series of stock; (v) may have such rights upon the dissolution of, or upon any distribution of the assets of, the Corporation; (vi) may be convertible into, or exchangeable for, shares of any other class or classes of stock of the Corporation at such price or prices or at such rates of exchange, and with such adjustments; (vii) may be entitled to the benefit of a sinking fund or purchase fund to be applied to the purchase or redemption of shares of such series in such amount or amounts; (viii) may be entitled to the benefit of conditions and restrictions upon the creation of indebtedness of the Corporation or any subsidiary, upon the issue of any additional stock (including, without limitation, additional shares of such series or of any other series) and upon the payment of dividends or the making of other distributions on and the purchase redemption or other acquisition by the Corporation or any subsidiary of any outstanding stock of the Corporation; and (ix) may have such other relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof; all as shall be stated in said resolution or resolutions adopted by the Board of Directors providing for the issue of such Preferred Stock. Except where otherwise set forth in the resolution or resolutions adopted by the Board of Directors providing for the issue of any series of Preferred Stock, the number of shares comprising such series may be increased or decreased (but not below the number of share then outstanding) from time to time by like action of the Board of Directors. Section 3. Redemption or Purchase of Preferred Stock. Shares of any series of Preferred Stock which have been redeemed (whether through the operation of a sinking fund or otherwise) or purchased by the Corporation, or of which, if convertible or exchangeable, have been converted into or exchanged for shares of stock of any other class or classes, shall have the status of authorized and unissued shares of Preferred Stock and may be reissued as a part of the series of which they were originally a part or may be reclassified and reissued as part of a new series of Preferred Stock to be created by resolution or resolutions of the Board of Directors or as part of any other series of Preferred Stock, all subject to the conditions or restrictions on issuance set forth in the resolution or resolutions adopted by the Board of Directors providing for the issue of any series of Preferred Stock and to any filing required by law. Section 4. Voting Rights. Except as otherwise provided by law or by the resolution or resolutions adopted by the Board of Directors providing for the issue of any series of Preferred Stock, the Common Stock shall have the exclusive right to vote for the election of directors and for all other purposes, each holder of the Common Stock being entitled to one vote for each share held. Section 5. Dividends. Subject to all the rights of the Preferred Stock or any series thereof, the holders of the Common Stock shall be entitled to receive, when, as and if declared by the Board of Directors, out of funds legally available therefor, dividends payable in cash, stock or otherwise. Section 6. Liquidation. Upon any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, and after the holders of the Preferred Stock of each series shall have been paid in full the amounts to which they respectively shall be entitled, or a sum sufficient for such payments in full shall have been set aside, the remaining net assets of the Corporation shall be distributed pro rata to the holders of the Common Stock in accordance with their respective rights in interest, to the exclusion of the holders of the Preferred Stock. FIFTH: Vote Required to Approve Business Combinations. In addition to the vote of stockholders otherwise required by law or by the terms of any other Article of this Certificate of Incorporation, the affirmative vote or consent of the holders of a majority of all shares of outstanding stock entitled to vote thereon, and a majority of each series or class of Preferred Stock which under this Certificate of Incorporation or by the resolution or resolutions of the Board of Directors authorizing the issuance of such Preferred Stock is entitled to vote thereon CERTIFICATE OF INCORPORATION - 2 3 as a class, shall be required to approve any Business Combination. As used in this Article Fifth, the term "Business Combination" shall include any merger or consolidation of the Corporation with or into any other corporation, firm or entity which under the applicable provisions of Delaware law is required to be submitted to a vote of stockholders, or the sale, lease, exchange or other disposition (including, without limitation, any disposition in connection with any dissolution, liquidation or winding up of the Corporation) of all or substantially all of the property and assets of the Corporation (including its good will and corporate franchises) to any other corporation, firm or entity. SIXTH: The Corporation is to have perpetual existence. SEVENTH: In furtherance and not in limitation of the powers conferred by statute, the power to adopt, amend or repeal the bylaws of the Corporation is hereby conferred upon and vested in the Board of Directors. EIGHTH: Whenever a compromise or arrangement is proposed between this Corporation and its creditors or any class of them and/or between this Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the state of Delaware may, on the application in a summary way of this Corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for this Corporation under the provision of section 279 of Title 8 of the Delaware Code order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of this Corporation as consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of this Corporation, as the case may be, and also on this Corporation. NINTH: Meetings of stockholders may be held within or without the State of Delaware, as the bylaws may provide. The books of this Corporation may be kept (subject to any provision contained in the statutes) outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the bylaws of the Corporation. Elections of directors need not be by written ballot unless the bylaws of the Corporation shall so provide. TENTH: The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation; provided, however, that no amendment to this Certificate of Incorporation shall, directly or indirectly, amend, alter, change or repeal any of the provisions of Article Fourth, Section 1 or any of the provisions of Article Fifth, unless the amendment effecting such amendment, alteration, change or repeal shall receive the affirmative vote or consent of the holders of (i) 66 2/3% of the outstanding stock of the Corporation entitled to vote thereon, and (ii) 66 2/3% of each class or series of Preferred Stock which under this Certification of Incorporation or by the resolution or resolutions of the Board of Directors authorizing the issuance of such class of Preferred Stock is entitled to vote thereon as a separate class. ELEVENTH: The name and mailing address of the incorporator is as follows: Name Mailing Address ---- --------------- Rebecca L. Saunders 877 W. Main St., Suite 600 Boise, ID 83702 TWELFTH: To the fullest extent permitted by the Delaware General Corporation Law, as it now exists or may hereafter be amended, a director of the Corporation shall not be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent that such exemption from liability or limitation thereof is not permitted under the Delaware General Corporation Law as the same exists or may hereafter be amended. Any repeal or modification of this paragraph by the stockholders of the Corporation shall be prospective only and shall not adversely affect any limitation on the personal liability of a director of the Corporation existing at the time of such repeal or modification. THIRTEENTH: Any director may be removed, with or without cause, by a vote of the holders of a majority of the shares then entitled to vote thereon. THE UNDERSIGNED, being the incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, does make this Certificate, hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly have hereunto set my hand this 25th day of October, 1995. /s/ Rebecca L. Saunders ----------------------------------- Rebecca L. Saunders, Incorporator CERTIFICATE OF INCORPORATION - 3 EX-27 3 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEET AT JUNE 30, 1997 (UNAUDITED) AND THE CONSOLIDATED STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED) AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 6-MOS DEC-31-1997 JAN-01-1997 JUN-30-1997 7,157 0 7,277 0 2,598 20,197 142,261 74,448 93,088 5,331 31,515 0 0 2,597 43,073 93,088 11,312 11,126 11,964 14,486 4,410 0 2,029 (12,199) 0 (12,199) 0 0 0 (12,199) (0.05) (0.05)
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