Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a)
of
the Securities Exchange Act of 1934
(Amendment
No. )
Filed
by
the Registrant [XX]
Filed
by
a Party other than the Registrant [ ]
Check
the
appropriate box:
[
] Preliminary
Proxy Statement [
] Confidential, for use of the Commission
[X] Definitive
Proxy Statementonly
(as
permitted by Rule 14a-6(e)(2))
[
] Definitive
Additional Materials
[
] Soliciting
Material Pursuant to Rule 14a-11(c) or Rule 14a-12
METALLINE
MINING COMPANY
(Name
of
Registrant as Specified In Its Charter)
Merlin
Bingham, President
(Name
of
Person(s) Filing Proxy Statement)
Payment
of Filing Fee (Check the appropriate Box:)
|
[
]
|
Fee
computed on table below per Exchange Act Rules 14a-6(i)(4) and
O-11.
|
| |
(1)
|
Title
of each class of securities to which transaction
applies:
|
| |
(2)
|
Aggregate
number 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 O-11:1
|
| |
(4)
|
Proposed
maximum aggregate value of transaction:
|
|
[
]
|
Fee
paid previously with preliminary
materials.
|
|
1
|
Set
forth the amount on which the filing fee is calculated and state
how it
was determined.
|
|
[
]
|
Check
box if any part of the fee is offset as provided by Exchange Act
Rule
O-11(a)(2) and identify the filing for which the offsetting fee was
paid
previously. Identify the previous filing by registration statement
number,
or the Form or Schedule and the date of its
filing.
|
| |
(1)
|
Amount
Previously Paid:
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| |
(2)
|
Form,
Schedule or Registration Statement
No.:
|
June
5,
2006
To
Our
Shareholders:
You
are
cordially invited to the annual meeting of Shareholders (the "Meeting") of
Metalline Mining Company (the "Company") to be held at the Coeur d’Alene Inn,
West 414 Appleway, Coeur d’Alene, Idaho on Friday, July 7, 2006 at 10:00
a.m. local time.
The
formal Notice of the Meeting and Proxy Statement describing the matters to
be
acted upon at the Meeting are contained in the following pages. Shareholders
also are entitled to vote on any other matters which properly come before the
Meeting.
Enclosed
is a proxy which will enable you to vote your shares on the matters to be
considered at the Meeting even if you are unable to attend the Meeting. Please
mark the proxy to indicate your vote, date and sign the proxy and return it
in
the enclosed envelope as soon as possible for receipt prior to the
Meeting.
WHETHER
YOU OWN FEW OR MANY SHARES OF STOCK, PLEASE BE SURE YOU ARE REPRESENTED AT
THE
MEETING EITHER BY ATTENDING IN PERSON OR BY RETURNING YOUR PROXY AS SOON AS
POSSIBLE.
Sincerely,
Merlin
Bingham, President
METALLINE
MINING COMPANY
Coeur
d’Alene, Idaho 83815
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
TO
BE HELD ON JULY
7, 2006
June
5,
2006
To
the
Shareholders of Metalline Mining Company:
The
Annual Meeting of Shareholders (the "Meeting") of Metalline Mining Company,
a
Nevada corporation (the "Company"), will be held at the Coeur d’Alene Inn, West
414 Appleway, Coeur d’Alene, Idaho on Friday, July 7, 2006 at 10:00 a.m.
local time, for the purpose of considering and voting upon proposals
to:
1. Approve
an expansion of the board to four directors.
2. Elect
three directors to serve until the next annual meeting of shareholders
or until
their successors are elected and qualified.
3.
Elect
a
fourth director to serve until the next annual meeting of shareholders
or until
his successor is elected and qualified.
4.
Approve
an amendment to the Company's Articles of Incorporation authorizing the
Company
to issue 160,000,000 shares of which 150,000,000 shares shall be Common
Stock,
$0.01 par value, and 10,000,000 shares shall be Preferred Stock, $0.01
par
value.
5.
Approve
an amendment to the Company’s Articles of Incorporation to delete the
requirement that shareholders must decide the number of directors to hold
office
during the ensuing term.
6.
Approve
the adoption of the Company’s 2006 Stock Option Plan.
7.
Transact
such other business as may lawfully come before the Meeting or any
adjournment(s) thereof.
The
Board
of Directors is not aware of any other business to come before the Meeting.
Pursuant to the Company's Bylaws, the Board of Directors has fixed the close
of
business on Wednesday, May 24, 2006 as the record date for determination of
the
shareholders entitled to vote at the Meeting and any adjournments
thereof.
You
are
requested to complete and sign the enclosed proxy which is solicited by the
Board of Directors and to return it promptly in the enclosed envelope. The
proxy
will not be used if you attend the Meeting and vote in person.
EACH
SHAREHOLDER, WHETHER OR NOT HE PLANS TO ATTEND THE MEETING, IS REQUESTED TO
COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY CARD. ANY PROXY
GIVEN BY THE SHAREHOLDER MAY BE REVOKED BY FILING WITH THE SECRETARY OF THE
COMPANY A WRITTEN REVOCATION OR A DULY EXECUTED PROXY BEARING A LATER DATE.
ANY
SHAREHOLDER PRESENT AT THE MEETING MAY REVOKE HIS OR HER PROXY AND VOTE IN
PERSON ON EACH MATTER BROUGHT BEFORE THE MEETING. HOWEVER, IF YOU ARE A
SHAREHOLDER WHOSE SHARES ARE NOT REGISTERED IN YOUR OWN NAME, YOU WILL NEED
ADDITIONAL DOCUMENTATION FROM YOUR RECORD HOLDER TO VOTE IN PERSON AT THE
MEETING.
BY
ORDER
OF THE BOARD OF DIRECTORS,
Merlin
Bingham, President and Chairman of the Board
METALLINE
MINING COMPANY
1330
E. Margaret Avenue
Coeur
d’Alene, Idaho 83815
PROXY
STATEMENT
ANNUAL
MEETING OF SHAREHOLDERS
JULY
7, 2006
June
5,
2006
To
Our
Shareholders:
This
proxy statement (the "Proxy Statement") is furnished in connection with the
solicitation by the Board of Directors of Metalline Mining Company (the
"Company") of proxies to be used at the Annual Meeting of Shareholders (the
"Meeting") to be held at the Coeur d’Alene Inn, West 414 Appleway,
Coeur d’Alene, Idaho on Friday, July 7, 2006 at 10:00 a.m. local time, and
at any adjournments or postponements thereof. The Meeting is being held for
the
purposes set forth in the accompanying Notice of Annual Meeting of Shareholders.
This Proxy Statement, the accompanying proxy card and the Notice of Annual
Meeting of Shareholders (collectively, the "Proxy Materials") are first being
mailed to shareholders beginning on or about June 5, 2006.
GENERAL
INFORMATION
Solicitation
The
enclosed proxy is being solicited by the Company's Board of Directors and
the
Company’s transfer agent, OTC Stock Transfer. The costs of the solicitation will
be borne by the Company. Proxies may be solicited personally or by mail,
telephone, facsimile or telegraph by directors and officers of the Company,
none
of whom will receive any additional compensation for such solicitations,
or by
OTC Stock Transfer, which will receive compensation in an amount no greater
than
$500. The Company will reimburse banks, brokers, nominees, custodians and
fiduciaries for their reasonable out-of-pocket expenses incurred in sending
the
proxy materials to beneficial owners of the shares.
Voting
Rights and Votes Required
Holders
of shares of Metalline Mining Company common stock (the "Common Stock"),
at the
close of business on Wednesday, May 24, 2006 (the "Record Date") are entitled
to
notice of, and to vote at, the Meeting. On the Record Date, 34,109,787 shares
of
Common Stock were outstanding. Holders of Common Stock are entitled to one
vote
per share.
The
presence, in person or by proxy, of holders of one-third of all of the shares
entitled to vote at the Meeting constitutes a quorum for the transaction of
business at the Meeting. In the event there are not sufficient votes for a
quorum or to approve any proposals at the time of the Meeting, the Meeting
may
be adjourned in order to permit further solicitation of proxies. Abstentions
will count towards quorum requirements.
As
to the
election of directors under Proposal Two, the proxy card being provided by
the
Board enables a shareholder to vote for the election of each of the nominees
proposed by the Board, or to withhold authority to vote for one or more of
the
nominees being proposed. Directors are elected by a plurality of votes cast,
without respect to either (i) broker non-votes, or (ii) proxies as to which
authority to vote for one or more of the nominees being proposed is
withheld.
The
affirmative vote of a majority of the shares outstanding and entitled to
vote on
the matter is required to approve Proposals Four and Five. As to these
proposals, a shareholder may: (i) vote "FOR" the proposals, (ii) vote "AGAINST"
the proposals, or (iii) "ABSTAIN" with respect to the proposals.
The
affirmative vote of a majority of the shares cast at the meeting and entitled
to
vote on the matter is required to approve Proposals One, Three and Six. As
to
these proposals, a shareholder may: (i) vote "FOR" the proposals, (ii) vote
"AGAINST" the proposals, or (iii) "ABSTAIN" with respect to the proposals.
The
proposed corporate actions on which the shareholders are being asked to vote
are
not corporate actions for which shareholders of a Nevada corporation have the
right to dissent under the Nevada General Corporation Law.
Voting
and Revocability of Proxies
Shares
of
Common Stock represented by all properly executed proxies received at the
Company's transfer agent by Monday, July 3, 2006 will
be
voted as specified in the proxy. Unless contrary instructions are indicated
on
the proxy, the shares of Common Stock represented by such proxy will be voted
"FOR" the slate of directors described herein and the expansion of the Board
to
four members (electing Robert Kramer); “FOR” adoption of the amendments to the
Articles Incorporation of the Company; and “FOR” adoption of the 2006 Stock
Option Plan as described herein. Management and the Board of Directors of
the
Company know of no other matters to be brought before the Meeting other than
as
described herein. If any other matters properly are presented to the
shareholders for action at the Meeting and any adjournments or postponements
thereof, the proxy holder named in the enclosed proxy intends to vote in
his
discretion on all matters on which the shares of Common Stock represented
by
such proxy are entitled to vote.
The
giving of the enclosed proxy does not preclude the right to vote in person
should the shareholder giving the proxy so desire. A proxy may be revoked at
any
time prior to its exercise by (i) providing notice in writing to the Company's
corporate secretary that the proxy is revoked; (ii) presenting to the Company
a
later-dated proxy; or (iii) by attending the Meeting and voting in
person.
SECURITY
OWNERSHIP OF
CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth as of May 15, 2006, the number of shares of the
Company’s outstanding $0.01 par value common stock beneficially owned by each of
the Company’s current directors and the Company’s executive officers and the
number of shares beneficially owned by all of the Company’s current directors
and named executive officers as a group:
|
Name
and Address of
Beneficial
Owner
|
|
Position
|
|
Amount
and
Nature
of Beneficial
Ownership
|
|
Percent
of
Common
Stock
|
|
| |
|
|
|
|
|
|
|
|
Merlin
D. Bingham
1330
E. Margaret Avenue
Coeur
d’Alene, ID 83815
|
|
|
President
and Director
|
|
|
2,295,639(1
|
)
|
|
6.7
|
%
|
| |
|
|
|
|
|
|
|
|
|
|
|
Roger
Kolvoord
1330
E. Margaret Ave.
Coeur
d’Alene, ID 83815
|
|
|
Vice
President-Business and Director
|
|
|
1,110,406(2
|
)
|
|
3.2
|
%
|
| |
|
|
|
|
|
|
|
|
|
|
|
Wayne
Schoonmaker
1330
E. Margaret Ave.
Coeur
d’Alene, ID 83815
|
|
|
Treasurer,
Secretary
|
|
|
89,568
|
|
|
Less
than 1.0
|
%
|
| |
|
|
|
|
|
|
|
|
|
|
|
Wesley
Pomeroy
1330
E. Margaret Ave.
Coeur
d’Alene, ID 83815
|
|
|
Director
|
|
|
550,000(3
|
)
|
|
1.6
|
%
|
| |
|
|
|
|
|
|
|
|
|
|
|
Terry
Brown
1330
E. Margaret Ave.
Coeur
d’Alene, ID 83815
|
|
|
Vice
President-Operations
|
|
|
312,500(4
|
)
|
|
Less
than 1.0
|
%
|
| |
|
|
|
|
|
|
|
|
|
|
|
All
current directors and executive officers as a group (five
persons)
|
|
|
|
|
|
4,358,113(5
|
)
|
|
12.8
|
%
|
(1)
Includes options to acquire 1,000,000 shares of the Company’s common stock at
$2.59 per share until May 1, 2016. These options do not vest until the
increase
in authorized common stock (Proposal Four) is approved.
(2)
Includes options to acquire 750,000 shares of the Company’s common stock at
$2.59 per share until May 1, 2016. These options do not vest until the
increase
in authorized common stock (Proposal Four) is approved.
(3)
Includes 150,000 warrants exercisable at $1.25 per share and expiring on
February 20, 2011. Also includes options to acquire 250,000 shares of the
Company’s common stock at $2.59 per share until May 1, 2016. These options do
not vest until the increase in authorized common stock (Proposal Four) is
approved.
(4)
Includes (i) options to acquire 10,000 shares of the Company’s common stock at
$2.00 per share, vesting on October 1, 2005 and expiring on October 1,
2012;
and (ii) options
to acquire 250,000 shares of the Company’s common stock at $2.59 per share until
May 1, 2016. These options do not vest until the increase in authorized
common
stock (Proposal Four) is approved.
(5)
Includes securities reflected in footnotes 1 - 4.
|
b)
|
Security
Ownership of Certain Beneficial
Owners
|
In
addition to the security ownership of the Company’s officers and directors, the
following table sets forth as of May 15, 2006, the number of shares of the
Company’s Common Stock beneficially owned by each person who owned of record, or
was known to own beneficially, more than 5% of the Company’s outstanding shares
of Common Stock:
|
Name
and Address of Beneficial
Owner
|
|
Amount
and Nature of Beneficial
Ownership
|
Percentage
of Common Stock
|
| |
|
|
|
|
Britannia
Holdings
King’s
House The Grange
St.
Peter Port Guernsey Channel Islands
|
|
2,769,000
|
8.12%
|
__________
MANAGEMENT
Executive
officers of the Company are elected by the Board of Directors, and serve for
a
term of one year and until their successors have been elected and qualified
or
until their earlier resignation or removal by the Board of Directors. There
are
no family relationships among any of the directors and executive officers of
the
Company.
The
following table sets forth the names and ages of all executive officers and
directors whose terms will not expire prior to the annual meeting, and all
persons nominated to serve as directors and the positions and offices that
each
person hold with the Company:
|
Name
of Director or Officer
and
Position in the Company
|
Officer
or
Director Since
|
Age
|
Office(s)
Held and Other Business Experience
|
| |
|
|
|
|
Merlin
Bingham
President
and Chairman of the Board of Directors
|
1996
|
72
|
Since
October 1996, Mr. Bingham has been the President and Chairman of
the Board
of Directors of the Company. From 1963 to 1983 Mr. Bingham worked
in
exploration for mining and oil companies in the western U.S. and
Alaska,
Zambia, the United Arab Emirates, Ecuador and Mexico. From 1983 to
1996,
Mr. Bingham has been a consulting geologist. Mr. Bingham received
a B.S.
degree in Mineralogy from the University of Utah in
1963
|
| |
|
|
|
|
Roger
Kolvoord,
Vice
President
and
Director
|
Director
since 2002; Officer since 2003
|
66
|
Dr.
Kolvoord has been a director of the Company since August 2002 and
was
appointed Vice President, Business in April 2003. Dr. Kolvoord has
a B.S.
degree in geology from the University of Michigan, a M.S. in Mineralogy
form the University of Utah, and a Ph.D. in geochemistry from the
University of Texas at Austin. He worked in exploration and exploration
research for Kennecott Copper Company, Ranchers Exploration and
Development Corporation, and ARCO, and operated a services company
providing field services to oil and gas and mining companies. He
has
extensive mining and energy exploration experience. He was a manager
with
the Boeing Company for 14 years, working mainly in program management
and
new business development capacities in information systems and in
remote
sensing and geospatial information (mapping) ventures. An Associate
Technical
Fellow
of the Boeing Company, he returned to private consulting practice
in 2000.
Mr. Kolvoord is an active member of the American Association of Petroleum
Geologists and the Society of Mining Engineers. He resides in the
Puget
Sound region of Washington.
|
| |
|
|
|
|
Wesley
Pomeroy, Director (1),
(2), (3)
|
2005
|
52
|
Mr.
Pomeroy was appointed to the Board of Directors in September 2005
to fill
an existing vacancy. Mr. Pomeroy is currently President of The Joe
Dandy Mining Company, which has had gold properties in Cripple
Creek,
Colorado since 1887. He is a member of the Front Range Oil and
Gas LLC and
the POMOCO LLC (Pomeroy Oil Company). He is also currently a consulting
geologist with Vortex Petroleum Inc. and has been associated since
1977
with various exploration and oil and gas companies. Also since
1977 Mr.
Pomeroy has been a member in good standing of the American
Association
of Petroleum Geologists and the Rocky Mountain Association of
Geologists. Mr.
Pomeroy received a Bachelor of Science degree in geology from Colorado
State University in 1977 and an MBA from the University of Colorado
in
1990. Mr. Pomeroy is registered Professional Geologist PG-2858
for the
State of Wyoming. He resides in the Denver, Colorado
area.
|
| |
|
|
|
|
Terry
Brown,
Vice
President-Operations
|
2005
|
46
|
Mr.
Brown was appointed Vice President-Operations in September 2005.
Mr. Brown
has 22 years experience in the mining industry in the United States,
Mexico and Chile and has most recently been active as a consulting
geologist in Mexico. His background is in exploration and project
management, mine development and feasibility studies, and mining
operations. Mr. Brown is a Certified Professional Geologist and is
a
member of the American Institute of Professional Geologists and the
Society of Economic Geologists. He received a Bachelor of Science
degree
in geology from the New Mexico Institute of Mining & Technology in
1983. Mr. Brown resides in Chihuahua, Mexico.
|
| |
|
|
|
|
Wayne
Schoonmaker, Treasurer and Secretary
|
1997
|
68
|
Mr.
Schoonmaker was appointed Secretary & Treasurer of the Company in
August 1997 and has held that position since that time. He is also
currently Secretary & Treasurer of Hanover Gold Company, Inc. of
Spokane, Washington and Secretary & Treasurer and Director of
Independence Lead Mines Company of Wallace, Idaho. During the period
of
1979 through 1993, Mr. Schoonmaker was employed at Asarco Incorporated
as
Chief Accountant of the Troy Mine and as Financial Manager of Asarco's
Northwest Mining Department. From July 1978 to December 1978, Mr.
Schoonmaker was Assistant Treasurer of the Bunker Hill Mining Company,
and
from 1964 to 1978, he was Assistant Secretary of Hecla Mining Company.
Mr.
Schoonmaker received a Bachelor of Science degree in Accounting from
the
University of Montana in 1962 and an MBA from the University of Idaho
in
1987. Mr. Schoonmaker is a Certified Public Accountant in the states
of
Idaho and Montana.
|
| |
|
|
|
|
Robert
Kramer,
Director
(1),
(2), (3)
|
Nominated
2006
|
60
|
Robert
Kramer, C.A., C.P.A. is nominated to the Board of Directors as part
of
this proxy statement. Mr.
Kramer is the co-founder and Chief Executive Officer of Current Technology
Corporation (OTCBB:CRTCF). The company was formed in 1987 to research,
develop and commercialize electrotherapeutic products for the treatment
of
hair loss. An entrepreneur by nature, with a particular interest
in the
financial sector, he has been a founder/principal of a number of
private
companies offering commercial mortgages, venture capital and tax
driven
investments. Prior to co-founding Current Technology, he was a joint
venture partner in an enterprise that raised funding for approximately
20
public mining companies conducting exploration activities in Western
Canada. A graduate of the University of California, Berkeley with
a degree
in economics, Mr. Kramer has been a member of the Canadian Institute
of
Chartered Accountants and the Institute of Chartered Accountants
of
British Columbia for over 30 years. In 2000, he earned his designation
as
a Certified Public Accountant in the State of Illinois. In 2005 he
was
admitted as a Fellow to The Institute of Chartered Securities and
Administrators.
|
| |
|
|
|
Except
as
indicated in the above table, no director of the Company is a director of an
entity that has its securities registered pursuant to Section 12 of the
Securities Exchange Act of 1934.
| (1) |
Mr.
Pomeroy is the only member of the Audit Committee. Mr. Kramer will
also be
a member if he is elected to the Board of Directors.
|
| (2) |
Mr.
Pomeroy is the only member of the Nominating Committee. Mr. Kramer
will
also be a member if he is elected to the Board of
Directors.
|
| (3) |
Mr.
Pomeroy is the only member of the Compensation Committee. Mr. Kramer
will
also be a member if he is elected to the Board of
Directors.
|
Meetings
of the Board and Committees
The
Company's Board of Directors held 14 meetings during the Company's year ended
October 31, 2005, and 3 additional meetings through the date of this Proxy
Statement. Such meetings consisted of consent Directors' minutes signed by
all
Directors and actual meetings at which all of the Directors were present
in
person or by telephone. The Company does not have a formal policy with regard
to
board members' attendance at annual meetings, but encourages them to attend
shareholder meetings. All Board members attended each meeting of the Directors
during the past fiscal year.
There
is
no arrangement or understanding between any Director and any other person
pursuant to which any person was selected as a Director.
Directors
of the Company are not paid for their services as such. The directors are
reimbursed for all expenses incurred by them in attending board
meetings.
Committees
Audit
Committee:
The
Company has a separately-designated standing audit committee established in
accordance with Section 3(a)(58)(A) of the Exchange Act. The Board of Directors
has adopted a written charter for the audit committee, which is available on
our
website at www.metalin.com. The audit committee did not hold any meetings
through the Record Date.
The
Audit
Committee’s responsibility is to monitor and oversee management’s internal
controls and financial reporting process, and the Company’s independent
accountants. The following generally describes the functions performed by the
audit committee:
•
reviews
and discusses audited financial statements with management and the independent
accountants;
•
discusses with the independent accountants the matters required to be discussed
by SAS 61 (Codification of Statements on Auditing Standards, AU
section 380), as modified by SAS 89 and SAS 90; and
•
receives the written disclosures and the letter from the independent accountants
required by Independence Standards Board Standard No. 1 (Independence
Standards Board Standard No.1, Independence
Discussions with Audit Committees),
as may
be modified or supplemented, and discusses with the independent accountant
the
accountant's independence.
Nominating
Committee:
Our
Nominating Committee oversees the process by which individuals may be nominated
to our board of directors. Our Nominating Committee's charter, which is
available on our website at www.metalin.com, was adopted by the board of
directors on May 1, 2006.
The
functions performed by the Nominating Committee include identifying potential
directors and making recommendations as to the size, functions and composition
of the Board and its committees. In making nominations, our Nominating Committee
is required to submit candidates who have the highest personal and professional
integrity, who have demonstrated exceptional ability and judgment and who shall
be most effective, in conjunction with the other nominees to the board, in
collectively serving the long-term interests of the shareholders.
The
Nominating Committee considers nominees proposed by our shareholders. To
recommend a prospective nominee for the Nominating Committee's consideration,
you may submit the candidate's name by delivering notice in writing to Metalline
Mining Company, c/o Burns, Figa and Will, P.C., 6400 S. Fiddlers Green
Circle, Suite 1000, Greenwood Village, CO 80111, USA.
A
shareholder nomination submitted to the Nominating Committee must include at
least the following information (and can include such other information the
person submitting the recommendation desires to include), and must be submitted
to the Company by the date mentioned in this proxy statement under the heading
"Proposal From Shareholders" as such date may be amended in cases where the
annual meeting has been changed as contemplated in SEC Rule 14a-8(e), Question
5:
| (i). |
The
name, address, telephone number, fax number and e-mail address of
the
person submitting the
recommendation;
|
| (ii). |
The
number of shares and description of the Company voting securities
held by
the person submitting the nomination and whether such person is holding
the shares through a brokerage account (and if so, the name of the
broker-dealer) or directly;
|
| (iii). |
The
name, address, telephone number, fax number and e-mail address of
the
person being recommended to the nominating committee to stand for
election
at the next annual meeting (the "proposed nominee") together with
information regarding such person's education (including degrees
obtained
and dates), business experience during the past ten years, professional
affiliations during the past ten years, and other relevant
information.
|
| (iv). |
Information
regarding any family relationships of the proposed nominee as required
by
Item 401(d) of SEC Regulation S-K. (v)
|
| (v). |
Information
whether the proposed nominee or the person submitting the recommendation
has (within the ten years prior to the recommendation) been involved
in
legal proceedings of the type described in Item 401(f) of SEC Regulation
S-K (and if so, provide the information regarding those legal proceedings
required by Item 401(f) of Regulation S-K).
|
| (vi). |
Information
regarding the share ownership of the proposed nominee required by
Item 403
of Regulation S-K.
|
| (vii). |
Information
regarding certain relationships and related party transactions of
the
proposed nominee as required by Item 404 of Regulation S-K.
|
| (viii). |
The
signed consent of the proposed nominee in which he or she
|
| a. |
consents
to being nominated as a director of the Company if selected by the
nominating committee,
|
| b. |
states
his or her willingness to serve as a director if elected for compensation
not greater than that described in the most recent proxy
statement;
|
| c. |
states
whether the proposed nominee is "independent" as defined by Section
121A
of the American Stock Exchange Company Guide; and
|
| d. |
attests
to the accuracy of the information submitted pursuant to paragraphs
(i),
(ii), (iii), (iv), (v), (vi), and (vii),
above.
|
Although
the information may be submitted by fax, e-mail, mail, or courier, the
nominating committee must receive the proposed nominee's signed consent, in
original form, within ten days of making the nomination.
When
the
information required above has been received, the Nominating Committee will
evaluate the proposed nominee based on the criteria described below, with the
principal criteria being the needs of the Company and the qualifications of
such
proposed nominee to fulfill those needs.
The
process for evaluating a director nominee is the same whether a nominee is
recommended by a shareholder or by an existing officer or director. The
Nominating Committee will:
1. Establish
criteria for selection of potential directors, taking into consideration the
following attributes which are desirable for a member of our Board of Directors:
leadership; independence; interpersonal skills; financial acumen; business
experiences; industry knowledge; and diversity of viewpoints. The Nominating
Committee will periodically assess the criteria to ensure it is consistent
with
best practices and the goals of the Company.
2. Identify
individuals who satisfy the criteria for selection to the Board and, after
consultation with the Chairman of the Board, make recommendations to the Board
on new candidates for Board membership.
3. Receive
and evaluate nominations for Board membership which are recommended by existing
directors, corporate officers, or shareholders in accordance with policies
set
by the Nominating Committee and applicable laws.
The
Nominating Committee has held no formal meetings and has taken one action by
unanimous written consent through the Record Date. On May 1, 2006 by unanimous
consent the Nominating Committee nominated the three directors currently serving
on our board of directors to stand for reelection. The Nominating Committee
also
nominated Robert Kramer to serve as the fourth director on our board of
directors.
Compensation
Committee: On
May 1,
2006, our Board of Directors adopted a Compensation Committee charter, which
is
available on our website at www.metalin.com. The Compensation Committee has
not
held any meetings through the Record Date. The Compensation Committee has the
authority to establish or recommend to the Board of Directors for determination
the compensation of our chief executive officer and our other executive
officers.
Code
of Ethics: On
May 1,
2006, our Board of Directors adopted a code of ethics that applies to all of
our
officers and employees, including our principal executive officer, principal
financial officer, principal accounting officer and controller. Our Code of
Ethics establishes standards and guidelines to assist our directors, officers,
and employees in complying with both our corporate policies and with the law
and
is posted at our website: www.metalin.com.
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Securities Exchange Act of 1934, as amended, requires the Company's
Officers and Directors and persons who own more than 10% of the Company's
outstanding Common Stock to file reports of ownership with the Securities and
Exchange Commission ("SEC"). Directors, officers, and greater than 10%
shareholders are required by SEC regulations to furnish the Company with copies
of all Section 16(a) forms they file.
Based
solely on a review of Forms 3, 4, and 5 and amendments thereto furnished to
the
Company during and for the Company's year ended October 31, 2005 there were
no
Directors, officers or more than 10% shareholders of the Company who failed
to
timely file a Form 3, 4 or 5.
EXECUTIVE
COMPENSATION
Compensation
and other Benefits of Executive Officers
The
following table sets out the compensation received for the fiscal years October
31, 2005, 2004 and 2003 in respect to each of the individuals who were the
Company's chief executive officer at any time during the last fiscal year and
the Company's four most highly compensated executive officers whose total salary
and bonus exceeded $100,000 (the "Named Executive Officers").
|
SUMMARY
COMPENSATION TABLE
|
| |
|
|
|
|
|
|
|
|
FISCAL
YEAR COMPENSATION
|
|
LONG
TERM COMPENSATION
|
| |
|
|
|
|
Awards
|
Payouts
|
|
Name
and
Principal
Position
|
Year
|
Salary
($)
|
Bon-us
($)
|
Other
Annual
Compensation
|
Securities
Underlying
Option/SARs
Granted
|
Restricted
Shares
or
Restricted Share
Units
|
LTIP
Payouts
($)
|
All
other
Compensation
($)
|
| |
|
|
|
|
|
|
|
|
|
Merlin
Bingham,
President
|
2005
2004
2003
|
$201,563
$101,563
$33,854
|
$0
$0
$0
|
0
60,938(1)
135,417(1)
|
0
0
0
|
0
0
0
|
0
0
0
|
0
0
0
|
| |
|
|
|
|
|
|
|
|
|
Roger
Kolvood, Vice President
|
2005
2004
2003
|
$81,250
$118,750
$33,854
|
$0
$0
$0
|
0
74,479(1)
155,729(1)
|
0
0
0
|
0
0
0
|
0
0
0
|
0
0
0
|
| |
|
|
|
|
|
|
|
|
|
Wayne
Schoonmaker, Secretary, Treasurer
|
2005
2004
2003
|
$20,250
$20,250
$8,438
|
$0
$0
$0
|
0
18,563(1)
35,438(1)
10,125(1)
|
0
0
0
|
0
0
0
|
0
0
0
|
0
0
0
|
| |
|
|
|
|
|
|
|
|
|
Terry
Brown,
Vice
President
|
2005
2004
2003
|
$56,160
$0
$0
|
$0
$0
$0
|
0
0
0
|
0
0
0
|
0
0
0
|
0
0
0
|
0
0
0
|
| (1) |
Represents
the value of shares of the Company’s common stock issued as compensation
for services rendered, based on the fair market value of such shares
on
the date of issuance.
|
Agreements
with Management
The
Company receives rent-free office space in Coeur d'Alene, Idaho from its
president. The value of the space is not considered materially significant
for
financial reporting purposes. The Company also has given $9,560 in cash advances
for travel to two of its officers at October 31, 2005.
There
are
no other arrangements or understandings between any executive officer and any
director or other person pursuant to which any person was selected as a director
or an executive officer.
Option/Stock
Appreciation Rights ("SAR") Grants during the most recently completed Fiscal
Year.
During
the fiscal year ended October 31, 2005, the Company did not grant common
stock options.
Aggregated
Option/SAR Exercised in Last Financial Year and Fiscal Year-End Option/SAR
Values.
The
following table sets forth information on unexercised options at October 31,
2005. None of the executive officers exercised any stock option during fiscal
2005.
AGGREGATED
OPTION/SAR EXERCISED IN LAST
FINANCIAL YEAR AND FISCAL YEAR-END OPTION/SAR VALUES.
| |
Number
of Securities Underlying
Unexercised
Options/SARs at FY End (#)
|
|
|
Value
of
Unexercised
Options/SARs at
FY-End
($)
|
|
Name
|
Exercisable
(#)
|
Unexercisable
|
Exercisable
|
Unexercisable
|
|
Merlin
Bingham
|
100,000
|
0
|
0
|
0
|
|
Roger
Kolvoord
|
100,000
|
0
|
0
|
0
|
|
Wayne
Schoonmaker
|
50,000
|
0
|
0
|
0
|
(1)
Because there was no positive spread between the respective exercise prices
of
outstanding stock options and the closing price of the Company's common stock
on
October 31, 2005 ($0.83), none of the options were
in-the-money.
The
Directors of the Company have historically not been compensated for their
services, although the Company may determine to provide compensation as greater
duties are assigned to directors. In addition, no pension or retirement benefit
plan has been instituted by the Company and none is proposed at this time and
there is no arrangement for compensation with respect to termination of the
directors in the event of change of control of the Company.
Benefit
Plans.
The
Company's shareholders approved a Qualified Stock Option Plan at the annual
meeting of shareholders held March 1, 2001. During the years ended October
31,
2001 and 2002, options for 350,000 shares and 100,000 shares, respectively,
were
granted to officers and directors of the Company. There were no options granted
during the years ended October 31, 2003, 2004 and 2005. Options for 100,000
shares granted to Daniel E. Gorski expired upon his upon his resignation in
September 2004.
The
Company’s Board of Directors approved the 2006 Stock Option Plan on May 1, 2006,
under which a maximum of 5,000,000 shares of common stock will be reserved
to be
issued upon the exercise of options or the grant of stock bonuses if the
Plan
(Proposal Six) and the increase in authorized common stock (Proposal
Four) are approved. As of May 15, 2006, options to acquire 2,750,000 shares
were outstanding under the Plan; provided however, that the options do not
vest
until the Plan (Proposal Six) and the increase in authorized common stock
(Proposal Four) are approved.
Repricing
of Options.
None
Transactions
with Management and Others and Certain Business
Relationships
The
Company receives rent-free office space in Coeur d'Alene, Idaho from its
president. The value of the space is not considered materially significant
for
financial reporting purposes. The Company also has given $9,560 in cash advances
for travel to two of its officers at October 31, 2005 under an accountable
plan
per IRS Regulations.
Other
than the transactions stated above, none of the directors or executive officers
of the Company, nor any person who owned of record or was known to own
beneficially more than 5% of the Company’s outstanding shares of its Common
Stock, nor any associate or affiliate of such persons or companies, has any
material interest, direct or indirect, in any transaction that has occurred
since its inception in August 1993, or in any proposed transaction, which has
materially affected or will affect the Company.
INDEPENDENT
PUBLIC ACCOUNTANTS
We
have
selected Williams & Webster, P.S. to continue to serve as our independent
registered public accounting firm. Representatives of Williams & Webster are
not expected to be present at the annual meeting.
Audit
Fees.
The
aggregate fees and expenses billed by Williams & Webster, P.S. for
professional services rendered for the audit of the Company's annual financial
statements and the review of the financial statements included in the Company's
periodic reports filed with the SEC on Forms 10-Q, were $18,409 and $21,647
for
the fiscal years ended October 31, 2004 and 2005,
respectively.
Audit-Related
Fees.
There
were no fees billed by Williams & Webster, P.S. for audit related services
rendered during fiscal 2004 and 2005.
Tax
Fees.
No
fees
were billed to us by Williams & Webster, P.S., for tax compliance or tax
advice
All
Other Fees
No
fees
were billed to us by Williams & Webster, P.S., for any other
fees.
Our
principal accountant (through its full time employees) performed all work
regarding the audit of our financial statements for the most recent fiscal
year.
No
pre-approval was required under "Tax Fees" and "All Other Fees" as no services
were performed by Williams & Webster, P.S., and no fees incurred.
PROPOSAL
ONE
EXPANSION
OF THE BOARD
The
Board
of Directors approves and recommends to the shareholders that the Board
of
Directors be expanded to four directors. The number of Directors on the
Company's Board of Directors has been established under Article 5 of the
Company’s Articles of Incorporation between three and nine, and the shareholders
determine the number of directors to hold office for the ensuing term.
Discussion
of Expansion of the Board
The
Board
has determined that a fourth director is necessary to manage the Company
more
adequately and efficiently. For example, the Company intends to file a
listing
application with a senior stock exchange. Most senior stock exchange listings
require the Company to have at least 50% of its board consisting of independent
directors. Moreover, most senior exchange listings require adding directors
with
financial expertise. To meet the senior exchange listing requirements,
the Board
of Directors has determined that it is necessary to expand the Board to
four
directors to create a vacancy for another independent director with financial
expertise.
The
Board
of Directors recommends a vote "FOR" the expansion of the Board to four
directors. Unless otherwise specified, the enclosed proxy will be voted "FOR"
the expansion of the Board.
PROPOSAL
TWO
ELECTION
OF DIRECTORS
The
Board
of Directors is nominating the three current Directors for reelection to
serve
for a one year term or until their successors are elected and
qualified.
Nominees
for Election of Directors
The
persons named in the enclosed form of Proxy will vote the shares represented
by
such Proxy for the election of the three nominees for Director named below.
If,
at the time of the Meeting, any of these nominees shall become unavailable
for
any reason, which event is not expected to occur, the persons entitled
to vote
the Proxy will vote for such substitute nominee or nominees, if any, as
they
determine in their sole discretion. If elected, Merlin Bingham, Roger Kolvoord,
and Wesley Pomeroy will each hold office a term of one year, until their
successors are duly elected or appointed or until their earlier death,
resignation or removal.
The
Board
of Directors recommends a vote "FOR" the election of Messrs. Bingham, Kolvoord,
and Pomeroy. Unless otherwise specified, the enclosed proxy will be voted
"FOR"
the election of the Board of Directors' slate of nominees. Neither Management
nor the Board of Directors of the Company is aware of any reason which
would
cause any nominee to be unavailable to serve as a Director.
PROPOSAL
THREE
ELECTION
OF FOURTH DIRECTOR
The
Board
of Directors nominates Robert Kramer as the fourth director. The number
of
Directors on the Company's Board of Directors has been established under
Article
5 of the Company’s Articles of Incorporation between three and nine, and the
shareholders determine the maximum number of directors to hold office for
the
ensuing term. The shareholders must first approve the expansion of the
Board to
four directors (Proposal One) and then vote for a fourth director. Therefore,
if
Proposal One was approved, then the shareholders will vote the shares
represented by such Proxy for the election of Robert Kramer as the fourth
Director.
Nominee
for Election of Fourth Director
If
Proposal One was approved, the persons named in the enclosed form of Proxy
will
vote the shares represented by such Proxy for the election of Robert Kramer
as
the fourth nominee for Director. If, at the time of the Meeting, Mr. Kramer
shall become unavailable for any reason, which event is not expected to
occur,
the persons entitled to vote the Proxy will vote for such substitute nominee,
if
any, as they determine in their sole discretion. If elected, Mr. Kramer
will
hold office for a term of one year, until his successor is duly elected
or
appointed or until his earlier death, resignation or
removal.
The
Board
of Directors recommends a vote "FOR" the election of Mr. Kramer. Unless
otherwise specified, the enclosed proxy will be voted "FOR" the election
of Mr.
Kramer as the fourth director. Neither Management nor the Board of Directors
of
the Company is aware of any reason which would cause Mr. Kramer to be
unavailable to serve as a Director.
PROPOSAL
FOUR
AMENDMENT
TO THE ARTICLES OF INCORPORATION
TO
INCREASE THE NUMBER OF
SHARES
OF AUTHORIZED COMMON STOCK AND
TO
AUTHORIZE PREFERRED STOCK
The
Board
of Directors of the Company has approved an amendment to the Company's Articles
of Incorporation to increase the number of shares of authorized Common Stock
from 50,000,000 shares to 150,000,000 shares, and to authorize 10,000,000
shares, $0.01 par value, of Preferred Stock.
The
amendment to Article 4, Capitalization, of the Articles of Incorporation
will
read as follows:
No.
4
CAPITALIZATION
The
aggregate number of shares of all classes of capital stock which this
Corporation shall have authority to issue is 160,000,000 shares, of which
10,000,000 shares shall be shares of Preferred Stock, par value $0.01 per share,
and 150,000,000 shares shall be shares of Common Stock, $0.01 par value per
share.
Preferred
Stock.
The
designations and the powers, preferences and rights, and the qualifications,
limitations or restrictions of the Preferred Stock, and variations in the
relative rights and preferences as between different series shall be established
in accordance with the Nevada General Corporation Law by the Board of
Directors.
Except
for such voting powers with respect to the election of directors or other
matters as may be stated in the resolutions of the Board of Directors creating
any series of Preferred Stock, the holders of any such series shall have no
voting power whatsoever.
Common
Stock.
The
holders of Common Stock shall have and possess all rights as shareholders of
the
Corporation, including such rights as may be granted elsewhere by these Articles
of Incorporation, except as such rights may be limited by the preferences,
privileges and voting powers, and the restrictions and limitations of the
Preferred Stock.
Subject
to preferential dividend rights, if any, of the holders of Preferred Stock,
dividends on the Common Stock may be declared by the Board of Directors and
paid
out of any funds legally available therefor at such times and in such amounts
as
the Board of Directors shall determine.
Background
and Discussion of Proposed Amendment
The
proposed increase in the authorized Common Stock and to authorize Preferred
Stock has been recommended by the Board of Directors to ensure that an adequate
supply of authorized unissued shares is available for general corporate needs.
With respect to the Company's authorized capital: (i) 34,109,787 shares of
Common Stock were outstanding on May 24, 2006; (ii) an additional 5,000,000
shares of authorized Common Stock have been reserved for issuance under the
Company’s option plans if the increase in authorized common stock and Proposal
Six are approved; (iii) approximately 15,657,068 shares
of
authorized common stock have been reserved for issuance upon exercise of
warrants and options. The Company does not have any Preferred Stock authorized.
The additional authorized shares of Common Stock may be used for additional
options and warrants, for raising additional capital for the operations of
the
Company or acquiring other businesses, and may also be used for such purposes
as
future stock dividends or stock splits. There are currently no plans or
arrangements relating to the issuance of any of the additional shares of
Common
Stock, other than pursuant to the exercise of options or warrants. Such shares
would be available for future issuance without further action by the
shareholders, unless required by the Company's Articles of Incorporation
or
Bylaws or by applicable law.
Anti-Takeover
Effects.
The
issuance of additional shares of Common Stock and Preferred Stock by the Company
may also potentially have an anti-takeover effect by making it more difficult
to
obtain stockholder approval of various actions, such as a merger or removal
of
management. The increase in authorized shares of Common Stock and the
authorization to issue Preferred Stock have not been proposed for an
anti-takeover related purpose and the Board of Directors and management have
no
knowledge of any current efforts to obtain control of the Company or to effect
large accumulations of its Common Stock or Preferred Stock.
Dilutive
Effects.
The
authorization and subsequent issuance of additional shares of Common Stock
and
Preferred Stock may, among other things, have a dilutive effect on earnings
per
share and on the equity and voting power of existing holders of Common Stock.
The actual effect on the holders of Common Stock cannot be ascertained until
the
shares of Common Stock are issued in the future. However, such effects might
include dilution of the voting power and reduction of amounts available on
liquidation.
Preferred
Stock.
The
10,000,000 shares of Preferred Stock may be issued in series from time to time
with such designations, rights, preferences and limitations as the Company’s
Board of Directors may determine by resolution. Any series of preferred stock
may possess voting, dividend, liquidation and redemption rights superior to
those of the Company’s Common Stock. The rights of the holders of Common Stock
will be subject to and may be adversely affected by the rights of the holders
of
any of the Preferred Stock that may be issued in the future. Issuance of a
series of Preferred Stock, or providing desirable flexibility in connection
with
possible acquisitions and other corporate purposes, could make it more difficult
for a third party to acquire, or discourage a third party from acquiring our
outstanding shares of Common Stock and make removal of the Board of Directors
more difficult. The Company has no shares of Preferred Stock currently
authorized, and the Company has no present plans to issue any shares of
Preferred Stock.
Vote
Required and Recommendation of Board
Proposal
Four requires the affirmative vote of a majority of the shares outstanding.
The
Board of Directors recommends that shareholders vote "FOR" the proposed
amendment to the Articles of Incorporation.
PROPOSAL
FIVE
AMENDMENT
TO THE ARTICLES OF INCORPORATION
TO
DELETE REQUIREMENT THAT SHAREHOLDERS
DETERMINE
NUMBER OF DIRECTORS
The
Board
of Directors of the Company has approved an amendment to the Company's Articles
of Incorporation to delete the requirement that shareholders decide the number
of directors from three through nine to hold office during the ensuing
term.
The
amendment to Article 5, Governing Board, of the Articles of Incorporation will
read as follows:
No.
5
GOVERNING
BOARD
This
Corporation shall be governed by at least three directors and not more than
nine
directors. The directors shall be elected at the annual meetings or any special
meeting of the stockholders called for the purpose of electing directors,
the
holder of each share of stock of this corporation shall have one vote and
a
plurality of the votes cast at the election shall decide the persons to hold
such directorships.
The
Board
of Directors during a term may decrease in number by the resignation or death
of
one or more members, but the maximum number of directors cannot be increased.
The majority of the surviving directors, in the case of a vacancy by resignation
or death, may appoint a person or persons to fill a vacancy or
vacancies.
Discussion
of Proposed Amendment
The
proposed amendment to delete the requirement that shareholders determine
the
number of directors for the ensuing term has been recommended by the Board
of
Directors to ensure that the Board has flexibility during the corporate year
to
respond to the Company’s managerial needs. The Board of Directors is more
familiar with the Company’s affairs, and from time to time, the Board may
determine that additional directors are necessary to manage the Company more
adequately and efficiently. For example, the Company intends to file a listing
application with a senior stock exchange. Any senior stock exchange listing
may
require the Company to have at least 50% of its board consisting of independent
directors. Moreover, a senior exchange listing may require adding directors
with
financial expertise. The Board’s ability to restructure itself to respond to
corporate changes during the year is severely limited by the provision that
requires shareholder approval for any adjustment to the number of directors.
If
the
proposed amendment is approved, the Board will have the flexibility to determine
the number of directors, a number that cannot be less than three and no greater
than nine, in a timely manner. At this time, the Board has no present plans
to
increase the number of directors beyond four.
Vote
Required and Recommendation of Board
Proposal
Five requires the affirmative vote of a majority of the shares outstanding.
The
Board of Directors recommends that shareholders vote "FOR" the proposed
amendment to the Articles of Incorporation.
PROPOSAL
SIX
ADOPTION
OF 2006 STOCK OPTION PLAN
On
May 1,
2006, the Board of Directors of the Company adopted the 2006 Stock Option
Plan
(the "Plan"), under which a maximum of 5,000,000 shares of common stock
will be
reserved to be issued upon the exercise of options ("Options") or the grant
of
stock bonuses ("Bonuses") if the Plan and the increase in authorized common
stock (Proposal Four) are approved. The Plan includes two types of Options.
Options intended to qualify as incentive stock options under Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code") are referred
to as
"Incentive Options." Options which are not intended to qualify as Incentive
Options are referred to as "Non-Qualified Options." Bonuses, which may
also be
granted under the Plan, are the outright issuance of shares of Common Stock.
Shareholder
approval of the Plan is sought: (i) to permit the issuance of Options
which will qualify as Incentive Options pursuant to the Code; and (ii) to
comply with Section 711 of the American Stock Exchange Company Guide (in
the
event we become a listed company on the American Stock Exchange), which
requires
shareholder approval of equity compensation plans in which officers, directors,
employees, or consultants may participate.
Options
or bonuses may be granted under the 2006 Stock Option Plan prior to approval
by
the shareholders. The following table sets forth summary information as
to
options granted under the Plan:
|
Name
and Position
|
Dollar
Value ($)
|
Number
of Options
|
| |
|
|
|
Merlin
Bingham,
President
|
*
|
1,000,000
|
| |
|
|
|
Roger
Kolvood,
Vice
President
|
*
|
750,000
|
| |
|
|
|
Executive
Group
|
*
|
1,750,000
|
| |
|
|
|
Non-Executive
Director Group(1)
|
*
|
750,000
|
| |
|
|
|
Non-Executive
Officer Employee Group
|
*
|
250,000
|
| |
|
|
| |
|
|
*
Not
determinable.
(1)
Includes 500,000 stock options granted to Robert Kramer, director nominee,
subject to his appointment to the Board.
The
Plan is intended to provide incentives to officers, employees, consultants
and
advisers (including members of the Board of Directors), who contribute to
the
success of the Company by offering them the opportunity to acquire an ownership
interest in it. The Board of Directors believes that this also will help
to
align the interests of our management and employees with the interests of
shareholders. The terms of the Plan concerning the Incentive Options and
Non-Qualified Options are substantially the same except that only employees
of
the Company or its subsidiaries are eligible to receive Incentive Options.
Non-Qualified Options may be granted to employees, officers and consultants
of
the Company.
The
number of shares reserved for issuance under the Plan is a maximum aggregate
so
that the number of Incentive Options and/or Non-Qualified Options that may
be
granted reduces the number of Bonuses which may be granted, and vice versa.
Administration
of the Plan
The
Plan is administered by the Board of Directors, or a committee appointed by
the
Board of Directors (the “Committee”). In addition to determining who will be
granted Options or Bonuses, the Committee has the authority and discretion
to
determine when Options and Bonuses will be granted and the number of Options
and
Bonuses to be granted. The Committee also may determine a vesting and/or
forfeiture schedule for Bonuses and/or Options granted, the time or times when
each Option becomes exercisable, the duration of the exercise period for Options
and the form or forms of the agreements, certificates or other instruments
evidencing grants made under the Plan. The Committee may determine the purchase
price of the shares of common stock covered by each Option and determine the
Fair Market Value per share. The Committee also may impose additional conditions
or restrictions not inconsistent with the provisions of the Plan. The Committee
may adopt, amend and rescind such rules and regulations as in its opinion may
be
advisable for the administration of the Plan.
The
Committee also has the power to interpret the Plan and the provisions in the
instruments evidencing grants made under it, and is empowered to make all other
determinations deemed necessary or advisable for the administration of it.
Eligibility
Participants
in the Plan may be selected by the Committee from employees, officers,
consultants and advisors (including Board members) of the Company and its
subsidiary and affiliated companies. The Committee may take into account
the
duties of persons selected, their present and potential contributions to
the
success of the Company and such other considerations as the Committee deems
relevant to the purposes of the Plan. As of the Record Date, there are
approximately five employees (including three officers) who are eligible
to
participate in the Plan.
The
grant of Options or Bonuses under the Plan does not confer any rights with
respect to continuation of employment, and does not interfere with the right
of
the recipient or the Company to terminate the recipient's employment, although
a
specific grant of Options or Bonuses may provide that termination of employment
or cessation of service as an employee, officer, or consultant may result in
forfeiture or cancellation of all or a portion of the Bonuses or Options.
Adjustment
In
the event a change, such as a stock split, is made in our capitalization which
results in an exchange or other adjustment of each share of Common Stock for
or
into a greater or lesser number of shares, appropriate adjustments will be
made
to unvested Bonuses and in the exercise price and in the number of shares
subject to each outstanding Option. The Committee also may make provisions
for
adjusting the number of Bonuses or underlying outstanding Options in the event
we effect one or more reorganizations, recapitalizations, rights offerings,
or
other increases or reductions of shares of our outstanding Common Stock. Options
and Bonuses may provide that in the event of the dissolution or liquidation
of
the Company, a corporate separation or division or the merger or consolidation
of the Company, the holder may exercise the Option on such terms as it may
have
been exercised immediately prior to such dissolution, corporate separation
or
division or merger or consolidation; or in the alternative, the Committee
may provide that each Option granted under the Plan shall terminate as of a
date
fixed by the Committee.
Other
Provisions
The
exercise price of any Option granted under the Plan must be no less than 100%
of
the "fair market value" of our Common Stock on the date of grant. Any Incentive
Stock Option granted under the Plan to a person owning more than 10% of the
total combined voting power of the Common Stock shall be at a price of no less
than 110% of the Fair Market Value per share on the date of grant.
The
exercise price of an Option may be paid in cash, in shares of our Common Stock
or other property having a fair market value equal to the exercise price of
the
Option, or in a combination of cash, shares and property. The Committee shall
determine whether or not property other than cash or Common Stock may be used
to
purchase the shares underlying an Option and shall determine the value of the
property received.
Income
Tax Consequences of the Plan
The
Incentive Options issuable under the Plan are structured to qualify for
favorable tax treatment to recipients provided by Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"). Pursuant to
Section 422 of the Code, Optionees will not be subject to federal income
tax at the time of the grant or at the time of exercise of an Incentive Option.
In addition, provided that the stock underlying the Option is not sold within
two years after the grant of the Option and is not sold within one year
after the exercise of the Option, then the difference between the exercise
price
and the sales price will be treated as long-term capital gain or loss. An
Optionee also may be subject to the alternative minimum tax upon exercise
of his
Options. The Company will not be entitled to receive any income tax deductions
with respect to the granting or exercise of Incentive Options or the sale
of the
Common Stock underlying the Options. The exercise price of Incentive Options
granted cannot be less than the fair market value of the underlying Common
Stock
on the date the Options were granted. In addition, the aggregate fair market
value (determined as of the date an Option is granted) of the Common Stock
underlying the Options granted to a single employee which become exercisable
in
any single calendar year may not exceed the maximum permitted by the Code
for
Incentive Options. This amount currently is $100,000. No Incentive Option
may be
granted to an employee who, at the time the Option would be granted, owns
more
than ten percent of the outstanding stock of the Company unless the exercise
price of the Options granted to the employee is at least 110 percent of the
fair market value of the stock subject to the Option and the Option is not
exercisable more than five years from the date of grant.
Non-Qualified
Options will not qualify for the special tax benefits given to Incentive
Options
under Section 422 of the Code. An Optionee does not recognize any taxable
income at the time he or she is granted a Non-Qualified Option. However,
upon
exercise of the Option, the Optionee recognizes ordinary income for federal
income tax purposes measured by the excess, if any, of the then fair market
value of the shares over the exercise price. The ordinary income recognized
by
the Optionee will be treated as compensation and will be subject to income
tax
withholding by the Company (if an employee) or self-employment tax (if a
non-employee). Upon an Optionee's sale of shares acquired pursuant to the
exercise of a Non-Qualified Option, any difference between the sale price
and
the fair market value of the shares on the date when the Option was exercised
will be treated as long-term or short-term capital gain or loss. Upon an
Optionee's exercise of a Non-Qualified Option, the Company will be entitled
to a
tax deduction in the amount recognized as ordinary income to the Optionee
(provided that the Company effects withholding with the respect to the deemed
compensation if the Optionee is an employee).
Vote
Required and Recommended
Proposal
Six requires the affirmative vote of a majority of the votes cast by the
shareholders entitled to vote at the meeting.
The
Board of Directors of the Company recommends that shareholders vote “FOR” the
proposal to adopt the Plan. Unless otherwise specified, the enclosed proxy
will
be voted "FOR" the adoption of the Plan described in this Proposal. The Plan
provides a means of compensating recipients without utilizing our cash
resources. Moreover, the Board of Directors believes that the Plan will better
align the interests of our employees, officers, consultants and advisors with
the interests of our shareholders by providing for increased share ownership
which will provide an additional incentive for those persons to work for the
success of the Company and to maximize shareholder value. In addition, the
Board
of Directors believes that the Plan provides an incentive for those persons
to
put forth maximum efforts for our success in order to maximize the value of
the
compensation provided to them through the Bonuses and Options.
ANNUAL
REPORT TO SHAREHOLDERS
Included
with this Proxy Statement is the Company's 2005 Annual Report (as amended)
on
Form 10-KSB/A No. 1 for the year ended October 31, 2005 and its Form 10-QSB
for
the quarter ended January 31, 2006.
OTHER
MATTERS
Management
and the Board of Directors of the Company know of no matters to be brought
before the Meeting other than as set forth herein. However, if any such other
matters properly are presented to the shareholders for action at the Meeting
and
any adjournments or postponements thereof, it is the intention of the proxy
holder named in the enclosed proxy to vote in his discretion on all matters
on
which the shares represented by such proxy are entitled to vote.
SHAREHOLDER
PROPOSALS
Proposals
from shareholders intended to be present at the next Annual Meeting of
shareholders should be addressed to Metalline Mining Company, Attention:
Corporate Secretary, 1330 E. Margaret Avenue, Coeur d’Alene, Idaho
83815 and
we
must receive the proposals by January 31, 2007. Upon receipt of any such
proposal, we shall determine whether or not to include any such proposal in
the
Proxy Statement and proxy in accordance with applicable law. It is suggested
that shareholders forward such proposals by Certified Mail-Return Receipt
Requested. After January 31, 2007, any shareholder proposal submitted outside
the process of Rule 14a-8 will be considered to be untimely.
BY
ORDER OF THE BOARD OF DIRECTORS:
METALLINE
MINING COMPANY
Merlin
Bingham, President