<PAGE>
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. )
File by the Registrant [XX]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[XX] Preliminary Proxy Statement [ ] Confidential, for use of the
[ ] Definitive Proxy Statement Commission only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
AMERALIA, INC.
-----------------------------
(Name of Registrant as Specified In Its Charter)
ROBERT C. J. VAN MOURIK, EXECUTIVE VICE PRESIDENT
-------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate Box:)
[XX] No fee required.
[ ] 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:
(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:
(5) Total fee paid:
[ ] 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:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
AMERALIA, INC.
1155 Kelly Johnson Boulevard
Colorado Springs, CO 80928
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on June 19, 1998
- --------------------------------------------------------------------------------
May ___, 1998
TO THE SHAREHOLDERS OF AMERALIA, INC.:
The Annual Meeting of Shareholders of AmerAlia, Inc., a Utah corporation,
("AmerAlia" or the "Company") will be held at ______________________________,
____ _______________, Englewood, Colorado _____ on June 19, 1998 at 10:00 a.m.
local time, to consider and take action on:
1. The election of four directors to serve until the next annual meeting
of shareholders and until their successors have been elected and qualified.
2. Approval of the conversion by the Jacqueline Mars Trust of Series A
Preferred Stock to Common Stock, and Series D Preferred Stock to Series E Stock.
3. Such other business as may properly come before the meeting, or any
adjournments or postponements thereof.
The discussion of the proposals set forth above is intended only as a
summary, and is qualified in its entirety by the information contained in the
accompanying Proxy Statement.
Only holders of record of common stock at the close of business on May 5,
1998, will be entitled to notice of and to vote at this Annual Meeting, and any
postponements or adjournments thereof.
SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON AND THE
MANAGEMENT OF THE COMPANY HOPES THAT YOU WILL FIND IT CONVENIENT TO ATTEND.
Shareholders, whether or not they expect to be present at the meeting, are
requested to sign and date the enclosed proxy and return it promptly in the
envelope enclosed for that purpose. Any person giving a proxy has the power to
revoke it at any time by following the instructions provided in the Proxy
Statement.
By Order of the Board of Directors:
<PAGE>
Bill H. Gunn, President
PLEASE DATE, SIGN AND PROMPTLY RETURN YOUR PROXY SO THAT YOUR SHARES
MAY BE VOTED IN ACCORDANCE WITH YOUR WISHES. THE GIVING OF SUCH PROXY DOES NOT
AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND THE MEETING.
YOUR VOTE IS IMPORTANT
<PAGE>
AMERALIA, INC.
1155 KELLY JOHNSON BOULEVARD
COLORADO SPRINGS, CO 80928
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 19, 1998
May 15, 1998
This Proxy Statement is being furnished to shareholders of AmerAlia, Inc.
("AmerAlia" or the "Company") in connection with the solicitation of proxies by
and on behalf of the Company's Board of Directors for use at the Annual Meeting
of shareholders of the Company (the "Annual Meeting") and at any adjournments or
postponements thereof. The Annual Meeting will be held at 10:00 a.m. local
time, at __________________, _____________, Englewood, CO 80112, on June 19,
1998. This Proxy Statement will be first mailed to the shareholders on or about
May 19, 1997.
VOTING SECURITIES
Holders of record of the Company's common stock (the "Common Stock") at the
close of business on May 5, 1998 (the "Record Date") will be entitled to vote on
all matters. On the Record Date, the Company had 4,439,151 shares of Common
Stock outstanding and 2,536 shares of Series E Preferred Stock entitled to 1,000
votes per share at all meetings of shareholders. The holders of shares of
Common Stock are entitled to one vote per share. The Company's only class of
voting securities is the Common Stock.
A majority of the issued and outstanding shares of the Common Stock
entitled to vote, represented in person or by proxy, constitutes a quorum for
the transaction of business at the meeting. As described in more detail below,
if there is a quorum present:
the four nominees for the Board receiving the greatest number of
affirmative votes will be elected as directors (proposal 1); and
a majority of the outstanding shares must vote in favor of proposals 2 and
3 for their approval.
Management may, in its discretion, seek an adjournment of the meeting to a
specific time and place if sufficient votes are not cast for the approval of
proposals 2 or 3. Management may also recommend that the meeting be adjourned
if a quorum is not present. Management has not determined whether to do so,
however. The proxy holder will vote all proxies it receives which have directed
a vote FOR proposal 2 in favor of any adjournment for the purpose of soliciting
additional votes; the proxy holder will vote all proxies received which voted
against proposal 2 against any such adjournment; all proxies which direct an
abstention with respect to the vote on
<PAGE>
proposal 2 will abstain from voting on any adjournment proposed for the purpose
of soliciting additional votes.
Abstentions will be treated as shares present or represented and entitled
to vote for purposes of determining the presence of a quorum, but will not be
considered as votes cast in determining whether a matter has been approved by
the shareholders. Any shares a broker indicates on its proxy that it does not
have the authority to vote on any particular matter because it has not received
direction from the beneficial owner thereof will not be counted as voting on a
particular matter.
A shareholder who gives his proxy pursuant to this solicitation may revoke
it at any time before it is voted either by giving notice of the revocation
thereof to the Secretary of the Company, by filing another proxy with the
Secretary or by attending the Annual Meeting and voting in person. All properly
executed and unrevoked proxies, if received in time, will be voted in accordance
with the instructions of the beneficial owners contained thereon.
The Company will bear the cost of the solicitation. In addition to
solicitation by mail, the Company will request banks, brokers and other
custodian nominees and fiduciaries to supply proxy materials to the beneficial
owners of the Company's Common Stock for whom they hold shares and will
reimburse them for their reasonable expenses in so doing.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
At May 5, 1998, AmerAlia had two classes of outstanding voting securities,
its common stock (referred to herein as the "Common Stock") and its Series E
Preferred Stock (each share of which is equivalent to the beneficial ownership
of 1,000 shares of Common Stock). The following table sets forth information as
of May 5, 1998 with respect to the ownership of the Common Stock and Series E
Preferred Stock for all directors, individually, all executive officers named in
the compensation table, all executive officers and directors as a group, and all
beneficial owners of more than five percent of the Common Stock (not including
shares held in the name of known depositories, such as CEDE & Co., for the
benefit of the underlying beneficial shareholders). The following shareholders
have sole voting and investment power with respect to the shares unless
indicated otherwise.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
Name & Address Amount & Nature Percent Percent
of of Beneficial of of Voting
Beneficial Owner Ownership Class Securities
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
Mr N. E. Summerson 557,866 (1) 11.77% 5.85%
c/o Ernst & Young
1 Eagle St
Brisbane, Qld, Australia
</TABLE>
2
<PAGE>
<TABLE>
<S> <C> <C> <C>
Bill H. Gunn 1,428,100 (2) 25.60% 3.63%
"Codrington"
Bowenville, Qld, Australia
Robert van Mourik 595,384 (3) 12.43% 2.08%
127 Central Ave
St Lucia, Qld, Australia
Robert A. Cameron 150,000 (5) 3.27% -0-%
OFFICERS & DIRECTORS
AS A GROUP (5 PERSONS) 3,001,350 (10) 44.57% 11.85%
Madeline Ahern 440,519 (4) 9.15% 6.32%
atf The Bromley Family Trust
8th fl, 87 Wickham Tce,
Brisbane, Qld, Australia
Marvin H. Hudson 905,453 (6) 17.32% 3.09%
51 Old Broadmoor Road
Colorado Springs, CO 80906
Jacqueline Badger Mars 3,497,460 (7) 54.32% 50.14%
atf the Jacqueline
Badger Mars Trust dated
Feb 5, 1975 as amended
6885 Elm St., McLean, VA
Mary L Tiscornia 776,785 (8) 15.08% 2.36%
448 Ignacio Boulevard, Suite 338
Novato, CA 94949
The THG Partnership 563,640 (9) 11.32% 1.63%
c/o M.L. Tiscornia
448 Ignacio Boulevard, Suite 338
Novato, CA 94949
</TABLE>
(1) MR. SUMMERSON: Represents 407,866 shares of Common Stock held as
Receiver & Manager for Denison Resources Ltd. (Receiver & Manager
appointed), as well as options to acquire 150,000 shares of Common Stock
for $1.00 per share expiring on dates up to June 28, 2006 held by
Glendower Investments Pty. Ltd. as trustee of a trust of which Mr.
Summerson and his family are beneficiaries.
3
<PAGE>
(2) MR. GUNN: Includes 7,500 shares of Common Stock owned directly by Mr.
Gunn and 131,960 shares of Common Stock owned by Gunn Development Pty.
Ltd. (of which Mr. Gunn is a controlling shareholder); options to acquire
60000 shares of Common Stock at $1.00 per share expiring on dates up to
June 28, 2006; and an interest in the THG Partnership as set forth in
note (9), below and further described in "CERTAIN RELATIONSHIPS AND
RELATED PARTY TRANSACTIONS.". Includes 125,000 Stock Appreciation Rights
issued at $1.50 per share expiring on dates up to March 31, 2001.
(3) MR. VAN MOURIK: Includes 500 shares of Common Stock owned directly by Mr.
van Mourik, 90,759 shares of Common Stock owned by Ahciejay Pty. Ltd. as
Trustee for The R.C.J. Trust, and 54,125 shares of Common Stock owned by
the R.C.J. Superannuation Fund, as to both of which Mr. van Mourik and
his family are beneficiaries. Also includes options to acquire 350,000
shares of Common Stock at $1.00 per share expiring on dates up to June
28, 2006. Includes 100,000 Stock Appreciation Rights issued at $1.50
per share expiring on dates up to March 31, 2001.
(4) BROMLEY FAMILY TRUST: Includes 64,519 shares of Common Stock, 376 shares
of Series E Preferred Stock. The Bromley Family Trust is a trust for the
benefit of relatives of Robert van Mourik's spouse. Neither Mr. van
Mourik nor his wife has any direct or indirect interest in the Bromley
Family Trust, although Mrs. van Mourik is a contingent, unnamed
beneficiary. Neither Mr. nor Mrs. van Mourik has received any
distributions from the Bromley Family Trust and neither influences nor
controls the decisions of the trustee. SEE "CERTAIN RELATIONSHIPS AND
RELATED PARTY TRANSACTIONS."
(5) MR. CAMERON: Includes no shares, but includes options to acquire 150,000
shares of Common Stock at $1.00 per share expiring on dates up to June
28, 2006. The options are held by Jacinth Pty. Ltd. a company in which
Robert Cameron, a director of the company, is a controlling shareholder.
(6) MR. HUDSON: Includes 101,813 shares of Common Stock; options to acquire
140,000 shares of Common Stock at $1.00 per share expiring on dates up to
June 28, 2006; and an interest in the THG Partnership as set forth in
note (9), below and further described in "CERTAIN RELATIONSHIPS AND
RELATED PARTY TRANSACTIONS." Includes 100,000 Stock Appreciation Rights
issued at $1.50 per share expiring on dates up to March 31, 2001.
(7) MARS TRUST: Includes 1,497,460 shares of Common Stock and 2,000 shares of
Series E Preferred Stock (received in exchange for the Series D Preferred
Stock. SEE "CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS" and
Proposal No. 2, below.
(8) MS. TISCORNIA: Includes 50,645 shares of Common Stock, options to acquire
162,500 shares of Common Stock at $2.00 per share expiring on December
31, 1998 and an interest in the THG Partnership as set forth in note (9),
below and further described in "CERTAIN RELATIONSHIPS AND RELATED PARTY
TRANSACTIONS."
4
<PAGE>
(9) THG PARTNERSHIP: Includes 13,640 shares of Common Stock, 100 shares of
Series E Preferred Stock, and an option until 18 October 1998 to acquire
450 shares of Series E Preferred Stock. Ms. Tiscornia and Messrs. Gunn
and Hudson (described in notes (2), (6), and (8), above) are the sole
equity owners of THG Partnership.
(10) ALL OFFICERS AND DIRECTORS: Includes the interests of Messrs. Summerson,
Gunn, van Mourik and Cameron as described in notes (1), (2), (3) and (4),
above, and, in addition, 20 shares of Series E Preferred Stock and
options to acquire 250,000 shares of Common Stock at $1.00 per share
expiring on dates up to March 31, 2003.
The foregoing table does not include the possible effect of issuance of
up to 113,333 shares of Common Stock pursuant to the exercise of options held by
persons who are neither officers, directors, nor significant shareholders of the
Company, which options are exercisable as follows:
13,333 at $1.50 until 31 July 1998
87,500 at $2.00 until 31 December 1998
100,000 at $1.00 until 1 March 1999
The Series E Stock consists of 2,536 shares issued at $1,000 per share.
These shares were issued in December 1997 in exchange for the surrender of
outstanding Series B Preferred Stock, Series C Preferred Stock, and Series D
Preferred Stock. The Series E Preferred Stock is entitled to a dividend
preference of 10% per year, payable quarterly in restricted Common Stock valued
at $1 per share through October 31, 2000. The Series E Stock is convertible
into Common Stock at the option of the holder until October 31, 2000 on the
basis of 1,000 shares of Common Stock per share of Series E Stock and, until
converted, each share of Series E Preferred Stock is entitled to 1,000 votes at
any meeting of the shareholders of the Company. The Company may redeem all or
any portion of the outstanding shares of Series E Stock at any time upon giving
six months notice, but only if the holder fails to exercise its conversion
rights.
The Company knows of no arrangement, the operation of which may, at a
subsequent date, result in change in control of the Company.
PROPOSAL 1-
ELECTION OF DIRECTORS
The following persons are nominated as directors of the Company for a
term of one year and until the election and qualification of their successors:
Bill H. Gunn Robert C.J. van Mourik
Neil E. Summerson Robert A. Cameron
These persons will constitute the entire Board of Directors. The person
named in the proxy intends to vote for those nominees, each of whom has been
recommended for election by
5
<PAGE>
the Board of Directors of the Company, unless a shareholder withholds authority
to vote for any or all of the nominees. The four nominees receiving the
greatest number of affirmative votes will be elected as directors. If any
nominee is unable to serve or, for good cause, will not serve, the person named
in the proxy reserves the right to substitute another person of his choice as
nominee in his place. Each of the nominees has agreed to serve, if elected.
IDENTIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the names and ages of all the Directors
and Executive Officers of AmerAlia, positions held by each such person, and when
such person was first elected or appointed. The directors each serve until
their successors are duly elected and qualified; officers are appointed by, and
serve at the pleasure of, the Board of Directors.
<TABLE>
<CAPTION>
First
Elected or
Name & Age Position Appointed
---------- -------- ---------
<S> <C> <C>
Bill H. Gunn Chairman of the Board, 02/08/84
Age 56 President, & Chief
Executive Officer
Robert van Mourik Director, 09/26/90
Age 45 Executive Vice President 01/25/89
(2) Chief Financial Officer,
Secretary & Treasurer
Neil E. Summerson Director 09/26/90
Age 50
(1,2)
Robert A. Cameron Director 09/26/90
Age 59
(2)
John Woolard Executive Vice President* 02/04/98
Age 58
</TABLE>
There are no family relationships among the officers or directors.
(1) Members of the Compensation Committee.
(2) Members of the Audit Committee
* Mr. Woolard is not yet an executive vice president of the Company, but is
expected to become Executive Vice President before this proxy statement is
mailed to shareholders.
6
<PAGE>
No arrangement exists between any of the above officers and directors
pursuant to which any one of those persons was elected to such office or
position.
Directors hold office until the next meeting of shareholders and until a
successor is elected and qualified, or until their resignation. Executive
officers are elected at annual meetings of the Board of Directors. Each such
officer holds office for one year or until a successor has been duly elected and
qualified or until death, resignation or removal. No director of the Company
is a director of another company having securities registered under Section 12
of the Securities Exchange Act of 1934 or a company registered under the
Investment Company Act of 1940.
A brief summary of the business experience of each person who is currently
an officer or director of the Company, and such person's service with the
Company is as follows:
BILL H. GUNN
Mr. Gunn graduated in Commerce from the University of Queensland in 1963,
achieving his Accounting Certificate from the University of Queensland in the
same year. Subsequently, he was admitted as a member of the Australian Society
of Certified Practising Accountants and has successfully completed and passed
the examinations for admittance as a Certified Public Accountant (CPA) in the
USA.
Since March, 1977, Mr. Gunn has been a self-employed investor, CPA, and a
Director of several Stock Exchange listed public companies, as well as a number
of majority owned private corporations. These companies have been active in the
field of retailing, hotels, feed mills, mining exploration, automotive
components, securities investment, financing, property development and numerous
related fields.
During his business experience, Mr. Gunn has been exposed to a wide variety
of corporate investments and has been involved in major business acquisition and
development activities. He is particularly knowledgeable on business activities
and investments in the Queensland region of Australia, which is widely regarded
as the major Australian growth state. His principal activity is now acting as
Chairman and President of the Company.
ROBERT VAN MOURIK
Mr. van Mourik graduated in 1974 with a Bachelor of Applied Science
(Chemistry) and worked for six years as an Industrial Chemist in Quality Control
and Production. While completing studies in a Masters Degree in Business
Administration at Newcastle University, he worked in Corporate Financial
Planning for Australian Wire Industries, a subsidiary of Broken Hill Proprietary
Ltd. After completing this degree in 1981, he moved to Queensland to participate
in real estate development and its sales and marketing. In 1983, he joined
United Capital as an Investment Consultant and became Executive Director of
United Capital in April, 1986. In that position, he was instrumental in United
Capital's reconstruction and has since been heavily involved in the development
of Ameralia's activities. Since January 25, 1989, he has served as
7
<PAGE>
Executive Vice President, Chief Financial Officer, Treasurer and Secretary of
the company, and on September 26 1990, he was appointed a director of the
Company.
NEIL E. SUMMERSON
Mr. Summerson until 31 July 1997 was the senior partner, and for five years
prior was managing partner, in the international accounting firm of Ernst &
Young, at its offices in Brisbane, Australia. Prior to 1992, he worked in the
Corporate Recovery and Insolvency Division, which is involved in the
administration of insolvent companies, as well as providing counsel to small
businesses in the area of taxation, audit procedures and management advisory
services. Mr. Summerson received his Bachelor of Commerce degree from the
University of Queensland in 1968. He is a Fellow of the Institute of Chartered
Accountants, an Associate of the Australian Institute of Credit Management, a
Registered Public Accountant in Queensland, a registered Company Liquidator in
Queensland, an Official Liquidator, and an Officer of the Supreme Court of
Queensland. Mr. Summerson is a director of several Australian public and
private companies.
On November 17, 1989, Mr. Summerson was appointed Receiver and Manager of
Denison Resources Ltd., an affiliate of the Company, and in his official
capacity, is attributed the beneficial ownership of the Common Stock owned by
Denison.
ROBERT A. CAMERON
Mr. Cameron graduated with Honors in Metallurgical and Chemical Engineering
from the University of Adelaide, Australia in April, 1961. Prior to Mr.
Cameron's formation of Denison Resources Ltd in 1983, Mr. Cameron was employed
in both Australia and the United Kingdom accruing approximately 24 years of
senior management experience, not only in the Australian mining industry
regarding both large and small companies, but also specific experience in the
exploration for and mining of soda products. This includes 16 years as Chief
Executive Officer and director of a number of Australian public companies. Mr.
Cameron has been responsible for developing a number of mining operations
involving such industrial minerals as rutile, zircon, ilmenite, bentonite clay,
calcium carbonate and silver and gold properties. From 1983, Mr. Cameron was
Chairman of the Board of Directors of Denison Resources Ltd., an Australian
stock exchange listed public company formed for the specific purpose of
exploring and developing underground natural soda resources in Queensland,
Australia. In January, 1989 Denison Resources (USA) Corporation, a wholly owned
subsidiary of Denison Resources Ltd., acquired the "Rock School Lease". In
early November 1989, the Australian Stock Exchange suspended Denison Resources
Ltd. from quotation of its shares at the request of its directors. On November
17 & 20, 1989, Mr. Neil E. Summerson was appointed Receiver and Manager for
Denison Resources Ltd. by two creditors as a result of Denison Resources Ltd.
being in default under certain loan agreements which were secured by an
equitable mortgage over Denison Resources Ltd. Under Australian law, the
creditors' action did not require court approval or supervision, and the
receivership continues.
8
<PAGE>
JOHN WOOLARD
Mr. Woolard graduated from the University of Wisconsin, Madison, Wisconsin,
in June 1961. He received a Bachelor of Science degree with a major in
economics. After graduation he was employed by an advertising agency, working
in all major departments and finally as an account executive handling $5,000,000
annual advertising budgets. He joined an investment banking firm in 1968. In
his 30 years in the investment banking business, Mr. Woolard has supervised all
departments in the firm, including retail sales, corporate finance,
underwriting, and accounting. Mr. Woolard has been a registered principal with
the New York Stock Exchange member firm, Stiffel, Nicolas & Co. for more than
the past five years until taking a leave of absence in January 1998. He is also
a director and an investor in a number of privately-held companies.
There are no significant employees who are not also directors or executive
officers, described above. There are no family relationships among the officers
or directors.
MEETINGS OF THE BOARD AND COMMITTEES
The Board of Directors held seven formal meetings during the fiscal year
ended June 30, 1997 and three meetings subsequently through March 31, 1998.
Each director attended at least 75% of the formal meetings either in person or
by telephone. In addition, regular communications were maintained throughout
the year among all of the officers and directors of the Company and the
directors acted by unanimous consent three times during fiscal 1997 and five
times through March 31, 1998. AmerAlia has standing audit and compensation
committees. It does not have a standing nomination committee. During the
fiscal year ended June 30, 1997, the compensation committee met once, and once
during the subsequent period through March 31, 1998. The audit committee was
formed in February 1998 and has not yet met. Each member of those committees
attended each of those meetings in person or by telephone.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's directors and officers and persons who own more than ten
percent of the Company's equity securities, to file reports of ownership and
changes in ownership with the Securities and Exchange Commission (the "SEC").
Directors, officers and greater than ten-percent shareholders are required by
SEC regulation to furnish the Company with copies of all Section 16(a) reports
filed.
Based solely on its review of the copies of the reports it received from
persons required to file, the Company believes that during the period from July
1, 1996 through March 31, 1998, all filing requirements applicable to its
officers, directors and greater than ten-percent shareholders were complied with
except as follows: Mr. Marvin Hudson filed Forms 4 in October 1997 reporting
transactions which took place in November 1996 and July 1997. Mr. Bill Gunn
filed a Form 4 in October 1997 reporting a transaction which took place in
November 1996. The Jacqueline Badger Mars Trust filed Forms 3 and 4 in December
1997 reporting transactions that
9
<PAGE>
took place since November 1993. Ms. Tiscornia filed a Form 3 in April 1998
reporting transactions which occurred in November 1996, and a Form 5 in April
1998 reporting subsequent transactions through March 31, 1998.
In addition, the THG Partnership, owner of shares of Series E Preferred
Stock (and, previously, Series D Preferred Stock), receives shares of the
Company's Common Stock as dividends on a quarterly basis. This creates
additional filing obligations for Bill Gunn, Marvin Hudson, and Mary Tiscornia,
the owners of the THG Partnership. The filings required by the dividend
payments for December 1996, March, June, September, October, and December 1997,
and March 1998 were made in April 1998.
Neil E. Summerson filed a Form 4 in April 1998 reporting a transaction
which occurred in January 1998.
The Board of Directors granted options to the members of the Board of
Directors in January 1998 as described below. The Company has received no
evidence that these transactions have been reported.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information regarding compensation paid to
the chief executive officer and the other principal officers of AmerAlia for the
three years ended June 30, 1997. No other person who is currently an executive
officer of AmerAlia earned salary and bonus compensation exceeding $100,000
during any of those years. This includes all compensation paid to him by the
Company and any subsidiary.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
Annual Compensation Long Term Compensation
------------------------------------------------------------------------
Awards Payout
Name and Year Salary Bonus Other -------------------------------------- All Other
Position Restricted Options LTIP Compensation
Awards & Payout
SAR's
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Bill H. Gunn
President and 1997 $100,000 -0- 8,000(1) -0- -0- -0- -0-
Chief 1996 $100,000 -0- 8,000(1) -0- 70,000(2) -0- -0-
Executive 1995 $100,000 -0- 8,000(1) -0- -0- -0- -0-
Officer
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
Robert van
Mourik, Chief 1997 $55,000 -0- 8,000(1) -0- -0- -0- -0-
Financial 1996 $55,000 -0- 8,000(1) -0- -0- -0- -0-
Officer 1995 $55,000 -0- 8,000(1) -0- -0- -0- -0-
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
<TABLE>
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Marvin H.
Hudson, 1997 $174,000 -0- -0- -0- -0- -0- -0-
formerly Vice 1996 $ 55,000 -0- -0- -0- 70,000(2) -0- -0-
President (3) 1995 $ 55,000 -0- -0- -0- -0- -0- -0-
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTES: (1) Directors fees
(2) See below
(3) As of April 15, 1998, Mr. Hudson resigned as an executive officer
of the Comany
The Company has no compensation, employee benefit, retirement, or option
plans. The Company does grant options on a case by case basis, in the
discretion of the Board of Directors.
EMPLOYMENT AGREEMENTS. The Company has entered into a six consulting
agreement with John Woolard by which, when adequate funding is available, Mr.
Woolard will be employed as Executive Vice President prior to the time this
proxy is to be mailed to the shareholders. Since February 1998 Mr. Woolard has
been working as a consultant to the Company in various managerial and other
capacities for a fee of $10,000 per month. Because of a lack of funds, this fee
has accrued, and Mr. Woolard will not become and executive officer of the
Company until adequate financing is available. Both the Company and Mr. Woolard
expect that their relationship will continue following the termination of the
consulting agreement in August 1998. If the agreement is not renewed following
its term, AmerAlia will pay Mr. Woolard a continuing consulting fee of $5,000
per month for a minimum of twelve months thereafter, anticipating not less than
30 hours service by Mr. Woolard per month.
OPTIONS AND OPTION PLANS.
No stock options or stock appreciation rights were granted during the
fiscal year ended June 30, 1997. Subsequent to the end of the 1997 fiscal year,
options were granted to said persons as follows:
OPTION GRANTS SUBSEQUENT TO FISCAL 1997
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
- -------------------------------------------------------------------------------------------------------------------------------
Name and Position Options Granted % of total options granted to Exercise or base Expiration date
(#) employees and consultants in price
fiscal year
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Bill H. Gunn, President 300,000 50% $1.00 3/31/2001
300,000 6/28/2006
- -------------------------------------------------------------------------------------------------------------------------------
Robert van Mourik, 150,000 29% $1.00 3/31/2001
Executive Vice President 200,000 6/28/2006
- -------------------------------------------------------------------------------------------------------------------------------
Marvin Hudson, formerly -0-
Vice President (1)
- -------------------------------------------------------------------------------------------------------------------------------
John Woolard, Executive 100,000 21% $1.00 3/31/2001
Vice President (2) 150,000 3/31/2003
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
11
<PAGE>
(1) Mr. Hudson was an executive officer at the time the options were granted.
He no longer is an executive officer.
(2) Mr. Woolard was appointed an executive officer of the Company in calendar
1998, after the end of the 1997 fiscal year.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES.
No stock options were exercised during the fiscal year ended June 30, 1997,
or subsequently. The following table sets forth information regarding the
year-end value of options being held by the Chief Executive Officer and the
other named officers such persons on June 30, 1997: No Stock Appreciation
Rights have been granted, or are held by, any such person:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
- -------------------------------------------------------------------------------------------------------------------------------
Name Shares acquired on Value realized # of unexercised Value of in-the-money
exercise options at FY end options at FY end
(exercisable/ (exercisable/
unexercisable) unexercisable)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Bill H. Gunn -0- -0- 140,000 -0-
- -------------------------------------------------------------------------------------------------------------------------------
Robert van Mourik -0- -0- 70,000 -0-
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
LONG TERM INCENTIVE COMPENSATION PLANS, DEFINED BENEFIT AND ACTUARIAL PLANS
AmerAlia has no long term incentive compensation plans, defined benefit
plans, or actuarial plans. There are no plans to pay bonuses or deferred
compensation to employees of the Company. The Company has not adopted any
medical, life or other insurance plan for its employees.
COMPENSATION OF DIRECTORS
GENERAL. AmerAlia' directors are authorized to receive $8,000 cash
compensation for their services each year. In connection with certain
consulting services rendered by them, the Company paid affiliates of certain
directors as follows:
an affiliate of Robert A. Cameron $2,538 for services rendered during the
fiscal year ended June 30,1997, and $5,957 for the nine months ended March
31, 1998 (determined at the rate of $600 per day);
The Brisbane, Queensland, Australia office of Ernst & Young, of which Neil
E. Summerson was managing partner, $8,000 for services rendered during the
fiscal year ended June 30,1997, and no amounts for the nine months ended
March 31, 1998 (determined at the normal professional rates of Ernst &
Young).
In each case, Messrs. Cameron and Summerson were reimbursed expenses they
incurred on behalf of AmerAlia on a fully accountable basis.
12
<PAGE>
AmerAlia has no other arrangements pursuant to which it compensates its
directors for acting in their capacities as such.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The following sets out information regarding transactions between officers,
directors and significant shareholders of the company.
Loans made to the Company by related parties as detailed in the Financial
Statements which states that the Company owed $80,000 to directors and
affiliates of the Company at June 30, 1997. This comprised advances to the
Company, compensation and directors fees accrued but unpaid.
As of June 30, 1996 the Company had advances of $35,719 to Gunn
Development Pty. Ltd., an affiliate of Mr. Bill H. Gunn, and $26,811 to Mr.
Marvin Hudson, formerly an officer of the Company. As of June 30, 1997 the
advance to Gunn Development Pty. Ltd. had been repaid and Gunn Development Pty.
Ltd. had advanced further funds to the Company; and the advance to Mr. Marvin
Hudson had been reduced. The following summarizes these advances during the
fiscal year ended June 30, 1997:
GUNN
DEVELOPMENT PTY. LTD.
- ---------------------
Balance at June 30, 1996: $ 35,719
Repayments made during year: 49,096
Advances made during year: Nil
Interest accrued: Nil
Balance at June 30, 1997: $(13,377)
--------
MR. M. HUDSON
- -------------
Balance at June 30, 1996: $ 26,811
Advances made during year: 49,354
Repayments made during year 66,101
Interest accrued: Nil
Balance at June 30, 1997: $ 10,064
--------
These advances bear no interest, are due on demand, and are not evidenced
by promissory notes. Mr. Marvin Hudson, formerly an officer of AmerAlia, repaid
his entire balance due following the end of the fiscal year. At March 31, 1998,
the Company's indebtedness to Mr. Gunn had increased to $49,488 as a result of
accrued but unpaid compensation.
13
<PAGE>
During the 1997 fiscal year, dividends of $233,790 became payable on the
Series A, Series B and Series D Preferred Stock and the Company, upon the
agreement of the investors, paid this dividend through the issuance of 233,790
shares of restricted Common Stock in accordance with the statements of
preferences. In October 1995, the Jacqueline Badger Mars Trust, holder of all
the Series A Preferred Stock and a portion of the Series B Preferred Stock,
entered into an agreement to purchase 2,000 shares of Series D Preferred Stock,
which shares have the preferences and conversion privileges discussed elsewhere
herein. The funds used to subscribe for the shares were held in an escrow
account, pending disbursement in accordance with the provisions of the escrow
agreement. As at June 30, 1997 $1,760,000 was disbursed under the agreement for
the issue of 1,760 shares of Series D Preferred Stock. The remaining $240,000
was disbursed in September 1997 for the issue of another 240 shares.
Subsequent to fiscal year 1997 through March 31, 1998, a further 293,154
shares were issued in lieu of dividends to holders of Preferred Stock.
In September 1996, a secured creditor, NZI Securities Australia Ltd.
("NZI"), declared a default on indebtedness of approximately A$1,200,000 and
advised the Company that NZI intended to immediately exercise its power of sale
over the RIT units NZI held as collateral. This debt was subsequently acquired
from NZI by the THG Partnership ("THG"), an affiliate of the Company, and the
Company then concluded an agreement with THG to settle the debt as discussed
more fully in the Company's filing on Form 10-K for the year ended 30 June 1996.
As a part of the settlement the Company agreed to issue to THG 100 shares
of its Series D Convertible Preferred Stock. In addition, THG has an option
until 18 October, 1998, to sell the RIT units to the Company for $450,000
payable by the issue of 450 shares of Series D Preferred Stock. If THG chooses
not to exercise this option, THG may, in its discretion during the option period
pay $450,000 in cash to purchase 450 shares of Series D Preferred Stock. THG is
an affiliate of AmerAlia in that Mary L. Tiscornia, a significant shareholder of
the Company, is the managing General Partner, and both Bill Gunn, President of
the Company, and Marvin Hudson, formerly a Vice President of the Company, are
joint owners of THG together with Ms. Tiscornia.
As a result of a sale of the Company's common stock in August 1997 by Mary
L. Tiscornia and the receipt of dividends by THG, Ms. Tiscornia is potentially
liable for a Section 16(b) profit of $2,340. Ms. Tiscornia has now agreed to
pay these funds to the Company in settlement of this liability.
As a result of a sale of the Company's Common Stock made by Mr. Hudson in
May 1996 and an acquisition in August 1996, allegations were made on behalf of a
shareholder that Mr. Hudson was liable under Section 16(b) of the Securities
Exchange Act of 1934 for certain profits. The Company engaged in discussions
with Mr. Hudson as to the existance of these liabilities and a resolution was
achieved in January 1997 when Mr. Hudson tendered $51,727 to the Company in
satisfaction of his alleged liability of $52,000. In addition, Mr. Hudson
surrendered 5,000 shares of Common Stock to the Company for cancellation in
July 1997.
14
<PAGE>
Mrs Jacqueline Badger Mars has notified the Company of her intention as
trustee of the Jacqueline Badger Mars Trust to convert its holdings of Series A
and Series B Convertible Preferred Stock into Common Stock as discussed above.
No nominee or director of the Company is, or has been, a partner or
executive officer of any investment banking firm that has performed services for
the Company during the last fiscal year or that the Company proposes to have
perform services during the current year.
No director, executive officer, nominee for election as a director, any
member of the immediate family of any of the foregoing, or any corporation or
organization of which any of the foregoing persons is an executive officer,
partner or beneficial holder of ten percent or more of any class of equity
securities, or any trust or other estate in which any such person has a
substantial beneficial interest or as to which such person serves as a trustee
or in a similar capacity, was indebted to the Company at any time, except as
disclosed above.
PROPOSAL 2
APPROVAL OF CERTAIN STOCK CONVERSIONS
In November 1997, the Jacqueline Mars Trust (the "Trust") converted shares
of Series A Preferred Stock and Series B Preferred Stock into shares of Common
Stock of AmerAlia, as described below. In addition, the Trust converted its
outstanding Series D Preferred Stock into Series E Preferred Stock. In
December 1997, certain other holders of the Series B and the Series C Preferred
Stock converted the outstanding shares of Preferred Stock to Series E Preferred
Stock. See the table, above, under "Principal Shareholders" to determine the
current holdings of AmerAlia Common Stock by the named people.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
DESCRIPTION OF NUMBER OF CONVERSION OR RESULTING
PREFERRED AND SHARES OF EXCHANGE RATIO NUMBER OF
SHAREHOLDER PREFERRED SHARES OF
COMMON STOCK
--------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Series A - the Trust# 666,666 1:1 666,666
--------------------------------------------------------------------------------------------
Series B - the Trust 25,000 1:5 250,000
--------------------------------------------------------------------------------------------
SHARES OF SERIES
E PREFERRED
STOCK
--------------------------------------------------------------------------------------------
Series B - Bromley 26,000 ^ 296
Family Trust plus accrued
interest
--------------------------------------------------------------------------------------------
Series C - unaffiliated 750 ^ 60
investors*
--------------------------------------------------------------------------------------------
</TABLE>
15
<PAGE>
<TABLE>
<S> <C> <C> <C>
--------------------------------------------------------------------------------------------
Series D - the Trust# 2,000 ^ 2,000
--------------------------------------------------------------------------------------------
Series D - Bromley 80 ^ 80
Family Trust
--------------------------------------------------------------------------------------------
Series D - THG 100 ^ 100
Partnership
--------------------------------------------------------------------------------------------
option to acquire 450 -- 450
Series D - THG
Partnership
--------------------------------------------------------------------------------------------
</TABLE>
# These transactions are subject to shareholder approval in this Proposal
number 2. The other transactions are not being submitted to the
shareholders for approval or ratification.
* The unaffiliated investors included a partnership of which John Woolard,
now an executive vice president of AmerAlia, was a member. At the time of
the investment, Mr. Woolard was not affiliated with AmerAlia.
^ The shares of Series B, Series C and Series D Preferred Stock were
exchanged for shares of Series E Preferred Stock based on their respective
liquidation preferences, equivalent to $1,000 per share liquidation
preference for the Series E Preferred Stock.
SERIES A EXCHANGE. The Series A Preferred Stock was issued in December
1993 to the Trust in consideration for its investment of $1,000,000. The Series
A Preferred Stock was convertible by the holder (the Trust) until December 10,
1996, at the rate of $1.50 per share. The Series A Preferred Stock had a
liquidation preference of $1.50 per share and, therefore, were convertible into
666,666 shares of Common Stock. As noted, that conversion right expired by its
terms, although the Company and the Trust had previously agreed to extend the
Trust's conversion right beyond December 10, 1996. A contractual modification
to the statement of preferences as filed with the Utah Secretary of State has
questionable validity, so the Trust and the Company agreed to the exchange
procedure in lieu of conversion.
In consideration for various agreements relating to the conversion of the
Series B Preferred Stock and the exchange of the Series D Preferred Stock (both
discussed below), the directors of AmerAlia agreed to allow the Trust to
exchange the Series A Preferred Stock for Common Stock on the same terms and
conditions as the conversion would have allowed had the conversion been
completed timely.
The exchange of the Series A Preferred Stock allowed the Company to
eliminate any further obligation to pay dividends to the holders of the Series
A Preferred Stock. The statement of preferences which established the Series A
Preferred Stock required the payment of dividends of 9% annually (approximately
$.135 per share). Although the dividends were payable in shares of restricted
Common Stock, the dividend requirement and the payment diluted the remaining
holders of Common Stock. Consequently, the Board of Directors believes that
allowing the Trust to
16
<PAGE>
exchange the shares of Series A Preferred Stock for Common Stock was in the best
interests of the shareholders and the Company. (In that connection, it should
be noted that the Trust does not have any representatives on the Board of
Directors of AmerAlia.)
SERIES B CONVERSION. The Series B Preferred Stock was issued to the Trust
in October 1993 and to the Bromley Family Trust of Queensland, Australia
("Bromley"), in June 1994. Each of the two investors paid $10.00 per share for
the Series B Preferred Stock, and the shares had a liquidation preference equal
to that amount. The shares were convertible into Common Stock through October
29, 1997 at the rate of $2.00 per share (five shares of Common Stock for each
share of Series B Preferred Stock. The Series B Preferred Stock also carried an
annual dividend requirement of 9% ($.90 per share) payable in shares of Common
Stock.
The Trust converted the Series B Preferred Stock to Common Stock in
accordance with the requirements of the statement of preferences which
established the Series B Preferred Stock.
In December 1997, Bromley exchanged its shares of Series B Preferred Stock,
together with the accrued but unpaid dividends thereon of $36,000, for 296
shares of the Series E Preferred Stock.
SERIES C EXCHANGE. The Series C Preferred Stock was issued in April 1995
to certain unaffiliated investors in consideration for their investment of $80
per share (a total of $60,000). (It should be noted that one of the investors
was an affiliate of John Woolard, currently an executive officer of AmerAlia.
At the time of the investment Mr. Woolard was not an affiliate of AmerAlia.)
The Series C Preferred Stock is convertible by the holder until April 22,
2005 at the rate of 53 shares of Common Stock for each share of Series C
Preferred Stock (approximately $1.50 per share). The Series C Preferred Stock
were, therefore, convertible into 40,000 shares of Common Stock. The Series C
Preferred Stock also carried an annual dividend requirement of 5% ($4.00 per
share) payable in cash.
In the opinion of the Board of Directors, the Series C Preferred Stock
unnecessarily complicated AmerAlia's capital structure, and the cash dividend
requirement was burdensome in light of the Company's financial position. After
negotiations with the holders of the Series C Preferred Stock, the holders
agreed to exchange the Series C Preferred Stock for 60 shares of Series E
Preferred Stock (described below).
SERIES D EXCHANGE. The Series D Preferred Stock consisted of 2,180 shares
which were issued to the Trust (2,000 shares), Bromley (80 shares) and an
affiliate of AmerAlia, the THG Partnership ("THG") (100 shares) at the rate of
$1,000 per share cash (in the case of the Trust and Bromley) and cancellation of
indebtedness (in the case of THG). The Series D Exchange was mandated because
there were clerical errors in the statement of preferences of the Series D
Preferred Stock as filed with the Secretary of State of Utah which could not be
corrected. Consequently, the Company established a class of preferred stock
denominated the "Series E Preferred Stock" and the holders of the Series D
Preferred Stock each agreed to exchange their shares of Series D Preferred Stock
for the new Series E Preferred Stock. The preferences attributable to the
Series E Preferred Stock are the same
17
<PAGE>
as the preferences which (but for the clerical errors) should have been
attributable to the Series D Preferred Stock.
The Series E Preferred Stock requires the payment of a dividend at the rate
of 10% ($100 per share per year), payable in shares of restricted Common Stock
valued at $1.00 per share for the purposes of paying the dividend. The Series E
Preferred Stock is convertible at the option of the holder in shares of Common
Stock at the rate of $1.00 per share (1,000 shares of Common Stock for each
share of Series E Preferred Stock). In addition, the Series E Preferred Stock
is redeemable by the Company at any time, upon six months' notice, but only if
the holder fails to exercise its conversion rights during that six month period.
REASONS FOR REQUESTING SHAREHOLDER APPROVAL
In all cases, the Board of Directors of AmerAlia had the authority to
approve the exchanges of the Preferred Stock without shareholder approval, and
the Trust had a contractual right to convert the Series B Preferred Stock with
no requirement for Board or shareholder approval. However, the Trust, in
agreeing to exchange the Series A Preferred Stock (as discussed above) required
that the exchanges of the Series A Preferred Stock for Common Stock and the
Series D Preferred Stock for Series E Preferred Stock be submitted to the
shareholders for approval.
If the shareholders fail to approve the two exchanges, the agreement
between the Trust and the Company allows the Trust to submit the matter to
arbitration. In the case of the Series A exchange, the arbitrators will be
asked to determine:
Whether the Company received adequate consideration on September
18, 1996, for its agreement to extend the Trust's conversion right
with respect to the Series A Preferred Stock; and
Whether the Company received adequate consideration for its original
issuance of the Series A Preferred Stock to the Trust.
In the case of the Series D exchange, the arbitrators will be asked to
determine whether the Company received adequate consideration for its original
issuance of the Series D Preferred Stock to the Trust.
In either case, if the arbitrators determine the answers in the
affirmative, the exchanges will be confirmed notwithstanding the lack of
shareholder approval. If the answers from the arbitration panel are in the
negative, the Trust will retain all rights it may have against AmerAlia in
connection with:
The purported September 1996 agreement for extension of the Series A
Preferred Stock conversion period; and
The apparently inaccurate statement of preferences filed describing
the Series D Preferred Stock.
18
<PAGE>
The other exchanges are not subject to a shareholder approval requirement
and, therefore, will be treated as having been completed whether or not the
shareholders or arbitrators approve the transactions with the Trust.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors recommends that the shareholders approve the
exchanges for several reasons. Most importantly, the exchange of the Series A
Preferred Stock eliminated a dividend payment obligation which has the potential
of diluting the holders of Common Stock indefinitely. Furthermore, prior to the
exchanges, AmerAlia's capital structure was significantly more complex; as a
result of the exchanges there is only one class of Preferred Stock outstanding.
Finally, the Series A exchange for Common Stock occurred at a price of $1.50 per
share, in excess of the price of the Common Stock at the time as quoted in the
Nasdaq SmallCap market. Thus the exchange was, in fact, anti-dilutive.
Approval of the exchanges requires the affirmative vote of a majority of
the shares voting at the meeting at which a quorum is present. The Trust has
advised the Company that the Trust will cast all of its votes for and against
Proposal number 2 in the same proportion as the other shareholders cast votes
for an against approval.
Management and the Board of Directors have each advised the Company that
they intend to cast votes for shares under their control (as described above)
FOR approval of Proposal no. 2.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE
PROPOSAL FOR THE APPROVAL OF PROPOSAL NUMBER 2. Unless otherwise specified, the
enclosed proxy will be voted "FOR" the approval of Proposal no. 2.
INDEPENDENT AUDITORS
The independent accounting firm of Jones Jensen & Company was selected by
the Board of Directors with respect to audit of the consolidated financial
statements of the company for the fiscal year ended June 30, 1998, as well as
many prior fiscal years. A representative of Jones Jensen & Company is not
expected to be present at the annual meeting.
PROPOSALS FROM SHAREHOLDERS
Proposals from shareholders intended to be present at the next Annual
Meeting of shareholders should be addressed to the Company at AmerAlia, Inc.,
Attention: Corporate Secretary, 1155 Kelly Johnson Boulevard, Suite 111,
Colorado Springs, CO 80920 and must be received by the Company by October 1,
1998. Upon receipt of any such proposal, the Company 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 such proposals be forwarded by
Certified Mail-Return Receipt Requested.
19
<PAGE>
ANNUAL REPORT TO SHAREHOLDERS
This proxy statement is being accompanied by the Company's annual report to
shareholders. The annual report to shareholders does include the audited
financial statements for the Company.
ANNUAL REPORT ON FORM 10-KSB AND QUARTERLY REPORT ON FORM 10-QSB
THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE YEAR ENDED JUNE 30,
1997, ITS QUARTERLY REPORT ON FORM 10-QSB FOR THE PERIOD ENDED DECEMBER 31,
1998, AND OTHER REPORTS FILED BY AMERALIA UNDER THE SECURITIES EXCHANGE ACT OF
1934, ARE AVAILABLE TO ANY SHAREHOLDER AT NO COST UPON REQUEST TO: CORPORATE
SECRETARY, 1155 KELLY JOHNSON BOULEVARD, SUITE 111, COLORADO SPRINGS, CO 80920,
OR BY TELEPHONE: (719) ________.
20
<PAGE>
OTHER MATTERS
Management does not know of any other matters to be brought before the
meeting. Should any other matter requiring a vote of shareholders arise at the
meeting, the persons named in the proxy will vote the proxies in accordance with
their best judgment.
By Order of the Board of Directors:
AMERALIA, INC.
Bill H. Gunn, President
21
<PAGE>
<TABLE>
<S><C>
AMERALIA, INC.
1155 KELLY JOHNSON BOULEVARD
SUITE 111
COLORADO SPRINGS, CO 80920
PROXY THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Bill H. Gunn and Robert van Mouriik, or either one of them, as Proxy, each with the power to
appoint his substitute, and hereby authorizes them to vote, as designated below, all of the shares of Common Stock or Preferred
Stock of AmerAlia, Inc. held of record by the undersigned on May 5, 1998, at the Special Meeting of Shareholders to be held on June
19, 1998 and at any adjournments or postponements thereof.
1. ELECTION OF DIRECTORS FOR all nominees listed below WITHHOLD AUTHORITY
(EXCEPT AS MARKED TO THE CONTRARY BELOW) / / to vote for all nominees listed below / /
(INSTRUCTION) TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE MARK THE BOX NEXT TO THE NOMINEE'S NAME BELOW.)
/ / Bill H. Gunn / / Robert van Mourik / / Neil A. Summerson / / Robert A. Cameron
2. Approval of the conversion by the Jacqueline Mars Trust of Series A Preferred Stock to Common Stock, and Series D Preferred
Stock to Series E Stock.
/ / Yes / / No / / Abstain
3. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting.
(OVER)
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO
DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION AS DIRECTORS OF ALL NOMINEES AND WILL ABSTAIN FROM VOTING ON ALL OTHER
MATTERS.
PLEASE SIGN EXACTLY AS NAME APPEARS BELOW. WHEN SHARES ARE HELD BY JOINT TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY,
AS EXECUTOR, ADMINISTRATOR, TRUSTEE, OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. IF A CORPORATION, PLEASE SIGN IN FULL CORPORATE
NAME BY PRESIDENT OR OTHER AUTHORIZED OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY AUTHORIZED PERSON.
_______________________________________________
Signature
Date: _______________________ ,1998
_______________________________________________
Signature if held jointly
_____________________________________________
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY
CARD PROMPTLY IN THE ENCLOSED ENVELOPE
_____________________________________________
</TABLE>
