<PAGE>
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. )
File by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for use of the Commission only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
AMERALIA, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
JOHN F. WOOLARD, EXECUTIVE VICE PRESIDENT
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate Box:)
/X/ 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:
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(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)
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / 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.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
AMERALIA, INC.
311 RALEIGH ROAD
KENILWORTH, IL 60043
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 28, 1999
- --------------------------------------------------------------------------------
May 28, 1999
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 Embassy Suites Denver South, 10250
East Costilla Avenue, Englewood, Colorado 80112 on June 28, 1999 at 10:00 a.m.
local time, to consider and take action on:
1. The election of six directors to serve until the next annual meeting of
shareholders and until their successors have been elected and qualified.
2. 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 24,
1999, 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.
<TABLE>
<S> <C>
By Order of the Board of Directors:
Bill H. Gunn, President
</TABLE>
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.
311 RALEIGH ROAD
KENILWORTH, IL 60043
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 28, 1999
May 28, 1999
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 Embassy Suites Denver South, 10250 East Costilla Avenue, Englewood, CO 80112,
on June 28, 1999. This Proxy Statement will be first mailed to the shareholders
on or about June 1, 1999.
VOTING SECURITIES
Holders of record of the Company's common stock (the "Common Stock") at the
close of business on May 24, 1999 (the "Record Date") will be entitled to vote
on all matters. On the Record Date, the Company had 7,659,766 shares of Common
Stock outstanding and 2,986 shares of Series E Preferred Stock. The holders of
shares of Common Stock are entitled to one vote per share; the holders of the
Series E Preferred Stock are entitled to 1,000 votes per share. The Company's
voting securities include its outstanding Common Stock and Series E Preferred
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 six nominees for the Board receiving the greatest
number of affirmative votes will be elected as directors (proposal 1).
Management may, in its discretion, seek an adjournment of the meeting to a
specific time and place if a quorum is not present.
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 24, 1999, 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
<PAGE>
information as of May 24, 1999 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>
AMOUNT & NATURE PERCENT OF
NAME & ADDRESS OF BENEFICIAL PERCENT VOTING
OF BENEFICIAL OWNER OWNERSHIP OF CLASS SECURITIES
- ------------------------------------------------------------------------- ---------------- --------- -----------
<S> <C> <C> <C>
Neil E. Summerson........................................................ 75,000(1) 1.0% nil
Bill H. Gunn............................................................. 337,645(2) 4.3% 1.2%
Robert van Mourik........................................................ 220,384(3) 2.8% 1.4%
John F. Woolard.......................................................... 274,500(8) 3.5% 0.2%
Robert A. Cameron........................................................ 75,000(5) 1.0% nil
Roger Day................................................................ 20,000(8) 0.3% nil
Geoffrey C. Murphy....................................................... 40,000 0.5 0.5
OFFICERS & DIRECTORS AS A GROUP (7 persons).............................. 1,042,529(9) 12.3% 3.2%
Madeline Ahern........................................................... 478,119(4) 5.9% 4.5%
atf The Bromley Family Trust
8th fl, 87 Wickham Tce,
Brisbane, Qld, Australia
Jacqueline Badger Mars................................................... 5,097,460(7) 52.8% 47.9%
atf the Jacqueline Badger Mars Trust
dated Feb 5, 1975 as amended
6885 Elm St., McLean, VA 22101
Mary L. Tiscornia........................................................ 467,830(9) 5.8% 4.4%
448 Ignacio Boulevard
Suite 338
Novato, CA 94949
</TABLE>
- ------------------------
(1) MR. SUMMERSON: Represents options to acquire 75,000 shares of Common Stock
for $1.50 per share expiring on June 28, 2006, held by Glendower Investments
Pty. Ltd. as trustee of a trust of which Mr. Summerson and his family are
beneficiaries.
(2) MR. GUNN: Includes 18,685 shares of Common Stock owned directly by Mr. Gunn
and 116,960 shares of Common Stock owned by Gunn Development Pty. Ltd. (of
which Mr. Gunn is a controlling shareholder); 62 shares of Series E
Preferred Stock (convertible into common shares at the rate of 1,000:1); and
options to acquire 140,000 shares of Common Stock at $1.50 per share
expiring on dates up to June 28, 2006. Does not include 70,000 Stock
Appreciation Rights issued at $1.50 per share expiring on dates up to June
28, 2006.
(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 75,000 shares of
Common Stock at $1.50 per share expiring on June 28, 2006.
2
<PAGE>
(4) BROMLEY FAMILY TRUST: Includes 102,119 shares of Common Stock, and 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 75,000
shares of Common Stock at $1.50 per share expiring on 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) MARS TRUST: Includes 3,097,460 shares of Common Stock and 2,000 shares of
Series E Preferred Stock. See "Certain Relationships and Related Party
Transactions".
(7) MR. WOOLARD: Includes 4,500 shares of Common Stock, 20 shares of Series E
Preferred Stock, options to acquire 100,000 shares of Common stock at $1.00
per share exercisable through March 31, 2001, and options to acquire 150,000
shares of Common Stock at $1.50 per share exercisable through March 31,
2003.
(8) ALL OFFICERS AND DIRECTORS: Includes beneficial ownership of Messrs. Gunn,
Summerson, Woolard, van Mourik, and Cameron as described in notes 1, 2, 3,
5, and 8, above, Mr. Murphy, and options held by Roger Day, an executive
officer who is not a director to acquire 20,000 shares of Common Stock at
$1.50 per share. Does not include options held by Mr. Day to acquire 80,000
shares of Common Stock at $1.50 per share which vest over a period of four
years commencing November 1999 until December 31, 2003.
(9) Includes 61,830 shares of Common Stock and 406 shares of Series E Preferred
Stock.
The Series E Stock consists of 2,986 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 arrears 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 during that six month period.
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:
<TABLE>
<S> <C> <C>
Bill H. Gunn Robert C.J. van Mourik John F. Woolard
Neil E. Summerson Robert A. Cameron Geoffrey C. Murphy
</TABLE>
3
<PAGE>
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 the Board of Directors of the Company, unless a
shareholder withholds authority to vote for any or all of the nominees. The six
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
NAME & AGE POSITION OR APPOINTED
- ------------------------------------------ ---------------------------------- -------------
<S> <C> <C>
Bill H. Gunn.............................. Chairman of the Board, 02/84
Age 57 President, & Chief
Executive Officer
Robert van Mourik......................... Director, Executive Vice 09/90
Age 46 President, Chief Financial 01/89
(2) Officer, Secretary & Treasurer
Neil E. Summerson......................... Director 09/90
Age 51
(1,2)
Robert A. Cameron......................... Director 09/90
Age 60
(2)
John Woolard.............................. Director 10/98
Age 59 Executive Vice President 06/98
Geoffrey Murphy........................... Nominee NA
Age 58
Roger Day................................. Vice President of Operations 02/99
Age 49
</TABLE>
There are no family relationships among the officers or directors.
- ------------------------
(1) Members of the Compensation Committee.
(2) Members of the Audit Committee.
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
4
<PAGE>
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 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
Until July 1997, Mr. Summerson 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. During the current fiscal year, Mr. Summerson resigned as Receiver
and Manager of Denison Resources Ltd.
5
<PAGE>
ROBERT A. CAMERON
Mr. Cameron graduated with Honors in Metallurgical and Chemical Engineering
from the University of Adelaide, Australia in April, 1961. Mr. Cameron has had
16 years experience as Chief Executive Officer and director of a number of
Australian public companies. Mr. Cameron has been responsible for developing
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. This led to the investigation of natural soda deposits in
the United States and securing the Rock School Lease interest which was later
transferred to the Company.
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. Presently,
Mr. Wollard serves as Executive Vice President and Director of the Company.
GEOFFREY MURPHY
Mr. Murphy has, for more than the past five years, been a principal of
Coloney, von Soosten & Associates, Inc., a consulting firm located in
Kenilworth, Illinois. Mr. Murphy graduated with a Bachelor's degree from
Dartmouth College, and a Master's degree of Business Administration from the
Amos Tuck School of Business Administration at Dartmouth College.
ROGER DAY
Mr. Day is a graduate from Michigan Technical University with approximately
twenty years experience in researching, developing and managing operations
similar to AmerAlia's undertakings. Mr. Day previously held senior technical and
management positions with two mining operations in Colorado. As Vice President
of Operations, Mr. Day is responsible for supervising the design, construction
and management of the solution mine and processing plant on the Company's lease.
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 six formal meetings during the fiscal year ended
June 10, 1998 and four meetings subsequently through March 31, 1999. Each
director attended all 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 five times during fiscal 1998 and seven times through March
31, 1999. AmerAlia has standing audit and compensation committees. It does not
have a standing nomination committee. During the fiscal year ended June 30,
1998, the compensation committee met once and did not meet during the subsequent
period through March 31, 1999. The audit committee was formed in February 1998
and has met once subsequent to the fiscal year ended June 30, 1998. Each member
of those committees attended each of those meetings in person or by telephone.
6
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
SECTION 16(A) DISCLOSURE
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 10%
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-10% 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, AmerAlia believes that during the period from July 1,
1997 through April 15, 1999, all filing requirements applicable to officers,
directors, and greater-than-10% shareholders were complied with in accordance
with the requirements of Section 16(a) except as follows:
- - The THG Partnership, of which Ms. Tiscornia, Bill H. Gunn, and Marvin H.
Hudson were partners, exercised an option and acquired 450 shares of
AmerAlia's Series E Preferred Stock in November 1998; Ms. Tiscornia and Mr.
Gunn reported this transaction on a Form 4 in April 1999.
- - Mr. Gunn filed a Form 4 in October 1997 reporting transactions which took
place in November 1996.
- - Mary L. 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. Ms. Tiscornia ceased being subject to
the reporting obligations of Section 16(a) in December 1998.
- - The Jacqueline Badger Mars Trust filed 32 Forms 4 in December 1997 reporting
transactions which took place since May 1994. In August 1998, in connection
with an administrative proceeding brought by the SEC, Ms. Mars, without
admitting or denying the issues identified in the order, consented to the
entry of a cease and desist order in which she agreed to cease and desist
from committing or causing any violations of, and committing or causing any
future violations of, Sections 13(d) and 16(a) of the Securities and
Exchange Act of 1934 and Rules 13d-1, 13d-2, 16a-2 and 16a-3 promulgated
thereunder.
- - Mr. Neil Summerson filed a Form 4 in April 1998 reporting a transaction which
occurred in January 1998.
- - Although Roger Day was appointed an executive officer of AmerAlia effective
in November 1998, the appointment was not approved by the Board of Directors
until April 1999. Consequently Mr. Day did not file a Form 3 until April
1999. Mr. Day considers this report to have been timely since his
appointment was not effective without Board approval.
- - Mr. Marvin Hudson (no longer subject to the reporting obligations of Section
16(a)) filed Forms 4 in October 1997 reporting transactions which occurred
in November 1996 and July 1997. In addition, AmerAlia is aware that Mr.
Hudson has acquired beneficial ownership in additional securities through
his ownership of an interest in THG which have not been reported as
required. Mr. Hudson may have acquired or disposed of other shares of
AmerAlia common stock or derivative securities without the knowledge of the
Company which have not been reported. Mr. Hudson ceased being subject to the
reporting obligations of Section 16(a) in April 1999, following the
dissolution of The THG Partnership.
AmerAlia is obligated to pay common stock dividends to the holders of its
Series E Preferred Stock as a class. Some of these holders are subject to the
reporting obligations of Section 16(a). It is the position of these reporting
persons that the dividends are exempt from the reporting requirements by virtue
of Rule 16a-9 and, therefore, reports were not required to be filed to report
each issuance of dividends.
7
<PAGE>
AmerAlia is aware that the THG Partnership elected to dissolve and
distribute its assets to its partners in March 1999, and completed the
distribution in April 1999. As a result of this distribution, Marvin H. Hudson
ceased to be subject to the reporting requirements of Section 16(a).
As a result of having acquired shares in May 1997 and having sold shares in
August 1997, Ms. Mary Tiscornia generated a short swing profit of $2,340. Upon
becoming aware of this, Ms. Tiscornia brought the matter to the AmerAlia's
attention and voluntarily remitted this amount to the company in June 1998 in
settlement of her Section 16(b) 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 existence 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.
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, 1998. 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 RESTRICTED OPTIONS & ALL OTHER
POSITION YEAR SALARY BONUS OTHER AWARDS SAR'S LTIP PAYOUT COMPENSATION
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Bill H. Gunn 1998 $ 100,000 -0- 14,000 -0- -0- -0- -0-
President and 1997 $ 100,000 -0- 8,000 -0- -0- -0- -0-
Chief Executive 1996 $ 100,000 -0- 8,000(1) -0- 210,000(2) -0- -0-
Officer
</TABLE>
Notes:
(1) Directors fees
(2) Consists of 140,000 options and 70,000 stock appreciation rights granted to
Mr. Gunn as described in more detail below.
Mr. Gunn's salary was increased to $150,000 per year during 1999. 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. In April 1999, effective November 1998, the Company
entered into a five year employment agreement with Roger Day who is employed
with the title of Vice President of Operations. As compensation for services
rendered under the employment agreement, Mr. Day shall receive a salary of
$100,000 per annum, plus bonuses and salary increases as the Board of Directors
may determine in its sole discretion. AmerAlia also granted Mr. Day options to
acquire 100,000 shares of Common Stock for an exercise price of $1.50 per share,
exercisable through December 31, 2003. Options to acquire 20,000 shares vested
in Board approval; the remainder vest annually through November 2002.
8
<PAGE>
OPTIONS AND OPTION PLANS. During the fiscal year ended June 30, 1998,
AmerAlia granted stock options to acquire 250,000 shares to John Woolard in
connection with his becoming a consultant to AmerAlia in February 1998. 100,000
of these options are exercisable at $1.00 per share through March 31, 2001; the
remaining 150,000 options are exercisable at $1.50 per share through March 31,
2003. Mr. Woolard became an executive officer of AmerAlia on June 1, 1998.
Subsequent to the end of the 1998 fiscal year, AmerAlia granted stock options,
as described above, to Roger Day who became an executive officer in April 1999.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES.
No officer exercised stock options during the fiscal year ended June 30,
1998, 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, 1998: No Stock Appreciation Rights
have been granted, or are held by, any such person:
<TABLE>
<CAPTION>
(A) (B) (C) (D) (E)
# OF
UNEXERCISED VALUE OF
OPTIONS AT FY IN-THE-MONEY
END OPTIONS AT FY END
SHARES ACQUIRED (EXERCISABLE/ (EXERCISABLE/
NAME ON EXERCISE VALUE REALIZED UNEXERCISABLE) UNEXERCISABLE)
<S> <C> <C> <C> <C>
Bill H. Gunn -0- -0- 140,000 -0-
Robert van Mourik -0- -0- 75,000 -0-
John Woolard -0- -0- 100,000 25,000
150,000
</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
AmerAlia's directors are authorized to receive $14,000 cash compensation for
their services as Directors each year. In connection with certain consulting
services rendered by them, the Company paid or accrued liabilities to an
affiliate of Robert A. Cameron $7,007 for services rendered during the fiscal
year ended June 30, 1998, and $18,302 for the nine months ended March 31, 1999
(determined at the rate of $75 per hour).
In addition, AmerAlia pays Geoffrey C. Murphy, a nominee to become a
director, a retainer of $2,500 per month for financial and administration
services. Hours in excess of 15 per month are paid to Mr. Murhpy at the rate of
$200 per hour.
In each case, Directors are reimbursed expenses they incurred on behalf of
AmerAlia on a fully accountable basis.
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 during the most recent two
fiscal years and during the subsequent fiscal year.
9
<PAGE>
CORPORATE LOANS. During the fiscal year ended June 30, 1998, certain
related parties advanced loans to AmerAlia as detailed in Note 6 to the
Financial Statements which states that AmerAlia owed $35,354 to directors and
affiliates of the company at June 30, 1998. This comprised advances to AmerAlia,
as well as accrued but unpaid compensation and directors fees. As of June 30,
1997 AmerAlia owed $13,377 to Gunn Development Pty. Ltd., an affiliate of Mr.
Bill H. Gunn, an officer of the company. By June 30, 1998 AmerAlia had repaid
the balance due and had advanced further funds to Gunn Development. The
following summarizes these advances during the fiscal year ended June 30, 1998
and subsequently:
<TABLE>
<CAPTION>
<S> <C>
Balance due to Gunn Development at June 30, 1997: $ 13,377
Advances to Gunn Development during year: 173,881
Repayments received during year: 142,830
Net interest accrued: Nil
--------
Balance due from Gunn Development at June 30,
1998: $ 17,674
Advances to Gunn Development subsequent to fiscal
year Nil
Repayments received subsequent to fiscal year 21,300
Net interest accrued subsequent to fiscal year Nil
--------
Balance due to Gunn Development at March 31, 1999 $ 3,626
</TABLE>
These advances bear no interest, are due on demand, and are not evidenced by
promissory notes. However, on January 6, 1999 and on March 3, 1999, AmerAlia
advanced short-term loans of $68,670 and $125,000, respectively to Bill H. Gunn.
These advances were evidenced by written documents and bear interest at 10% per
annum. Mr. Gunn has advised AmerAlia that he intends to repay these amounts in
full by the end of June 1999.
COMPENSATION ARRANGEMENTS. AmerAlia entered into an employment agreement
with Roger Day, its vice president of operations, in November 1998, as described
above under "Executive Compensation-- Employment Agreements." This agreement was
approved by the Board of Directors in April 1999.
Directors and officers of AmerAlia are compensated as described above under
"Executive Compensation--Compensation of Directors."
THG PARTNERSHIP TRANSACTIONS. In connection with the settlement of a
preexisting debt, AmerAlia granted the THG Partnership an option until October
1998 to exchange units of the Rural Investment Trust, an Australian public real
estate investment trust, for an additional 450 shares of Series E Preferred
Stock or (at THG's election) to purchase 450 shares of Series E Preferred Stock
for $450,000 in cash. The partners of The THG Partnership were Miss Mary L.
Tiscornia, a significant shareholder of the company, Mr. Bill H. Gunn, Chairman
and CEO of the Company, and Mr. Marvin H. Hudson, a former Vice President.
On October 13, 1998 THG notified AmerAlia it was exercising its option to
put the RIT investment to AmerAlia.
As part of its own working capital requirements, THG had secured a debt
facility with the ANZ Bank in Australia using the RIT investment as collateral.
AmerAlia has assumed THG's liability to the ANZ Bank in exchange for payment to
AmerAlia of the amount of the outstanding indebtedness. This debt was
approximately A$300,000 ($180,000). Consequently, effective October 18, 1998,
AmerAlia and THG entered into an agreement whereby:
- THG assigned the RIT units to AmerAlia;
- THG paid to AmerAlia the amount of its outstanding debt due to ANZ Bank;
- AmerAlia assumed liability for THG's debt to the ANZ Bank, guaranteed it
would pay principal and interest in accordance with the requirements of
the loan facility, and indemnified THG and its partners against any loss
which it might incur in settling the debt;
10
<PAGE>
- THG delivered to AmerAlia transfer documents and powers of attorney
sufficient to enable AmerAlia to transfer the RIT investment into
AmerAlia's name.
Although the transaction occurred between AmerAlia and THG, then an
affiliate, management believes the substance of the transaction is between
AmerAlia and the ANZ Bank. AmerAlia believes it has gained access to this
borrowing on favorable terms without the costs normally associated with secured
borrowing from financial institutions. THG did not receive any consideration for
providing the credit facility to AmerAlia. Subsequently THG dissolved.
The credit facility with ANZ Bank is a 90 day bank bill facility with
interest and fees payable in advance, and at March 31, 1999, approximately
A$300,000 ($189,000) remained outstanding. The current cost of funds is
currently about 8.4% per year. The ANZ Bank has not consented to the assignment
of the facility to AmerAlia. Because the ANZ Bank did not release THG from its
obligations and since AmerAlia now has the benefit of the facility and the
entire loan balance, AmerAlia did agree to indemnify THG from any liability to
the ANZ Bank, as described above.
SHORT SWING LIABILITY. As a result of having acquired shares in May 1997
and having sold shares in August 1997, Ms. Mary Tiscornia generated a short
swing profit of $2,340. Upon becoming aware of this, Ms. Tiscornia brought the
matter to the AmerAlia's attention and voluntarily remitted this amount to the
company in June 1998 in settlement of her Section 16(b) liability.
Because Marvin Hudson has failed to file the reports required under Section
16(a) of the Securities Exchange Act of 1934, as amended, the Company does not
know whether he may have any short-swing liability. Mr. Hudson is no longer an
affiliate of AmerAlia.
PURCHASE OF COMMON STOCK AND WARRANTS. On December 30, 1998, Ms. Jacqueline
Badger Mars, in her capacity as trustee for the Jacqueline Badger Mars Trust
(the "Mars Trust"), acquired 700,000 shares of AmerAlia common stock at $1.50
per share for a total investment of $1,050,000. At the time that the Mars Trust
purchased these shares, the price of AmerAlia common stock as quoted by the
Nasdaq SmallCap Market was less than $1.30 per share. Included with the purchase
were 700,000 common stock purchase warrants, granting the Mars Trust the right
to buy an additional 700,000 shares of common stock at a price of $2.00 per
share through March 31, 1999. On March 26, 1999, the Mars Trust exercised these
warrants for a total of $1,400,000 which was paid to AmerAlia.
CONVERSION OF SERIES OF PREFERRED STOCK INTO COMMON STOCK. At the beginning
of the 1998 fiscal year, Ms. Jacqueline Badger Mars in her capacity as trustee
of the Jacqueline Badger Mars Trust held shares of Series A, B, and D Preferred
Stock. At a meeting held on June 30, 1998, the shareholders of AmerAlia approved
the following conversions and exchanges:
- 666,666 shares of Series A preferred stock were exchanged by agreement
with AmerAlia for 666,666 shares of common stock;
- 25,000 shares of Series B preferred stock were exchanged for 125,000
shares of common stock in accordance with the statement of preferences
which established the Series B stock; and
- the 2,000 shares of Series D Preferred stock were exchanged by agreement
with AmerAlia for 2,000 shares of Series E Preferred Stock which hold the
same preferences as those attributable to the Series D stock.
AmerAlia reached an agreement with Miss Madeline Ahern who held the
remaining 26,000 shares of Series B Preferred Stock as trustee for the Bromley
Family Trust, to exchange the outstanding Series B shares held by the Bromley
Family Trust, together with accrued but unpaid dividends due of $36,000, for 296
shares of Series E Preferred Stock. This exchange was accomplished based on the
respective liquidation values of the Series B and Series E Preferred Stock
11
<PAGE>
AmerAlia negotiated with the holders of the outstanding 750 shares of Series
C Preferred Stock an exchange, based upon their respective liquidation values,
for 60 shares of Series E Preferred Stock. One of the holders of the Series C
Preferred Stock was Mr. John Woolard who received 20 shares of Series E
Preferred Stock. Subsequently, AmerAlia appointed Mr. Woolard an executive
officer (in June 1998) and a director (in October 1998) of AmerAlia.
AmerAlia negotiated with THG and the Bromley Family Trust, the remaining
holders of 180 shares of Series D Preferred Stock, an exchange for 180 shares of
Series E Preferred Stock and an exchange of an option to acquire 450 shares of
Series D Preferred Stock for an option to acquire 450 shares of Series E Stock.
As a result of these transactions, the shares of Series E Preferred Stock
are the only shares of preferred stock currently outstanding.
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
AmerAlia during the last fiscal year or that AmerAlia proposes to have perform
services during the current year. AmerAlia is not aware of any other
relationship between its directors and the company that are similar in nature
and scope to those relationships listed in paragraphs (b)(1) through (5) of this
Item 13 except as described above.
DIVIDEND PAYMENTS. During the fiscal year ended June 30, 1998, dividends of
$356,554 became payable on the Series A, B, C, D and E Preferred Stock and
AmerAlia, upon the agreement with the investors, paid this dividend through the
issuance of a total of 356,554 shares of restricted common stock in accordance
with the statements of preferences. Many of the holders of the Series E
Preferred Stock are affiliated with the Company.
During the three fiscal quarters after the 1998 fiscal year, dividends
aggregating $209,215 became payable to the holders of the Series E Preferred
Stock. (The Series A, B, C, and D shares were converted or exchanged for Series
E Preferred Stock pursuant to shareholder approval at the meeting held on June
30, 1998.) AmerAlia paid, or will pay, these dividends to the holders of the
Series E Preferred Stock through the issuance of 209,215 shares of its
restricted common stock.
EMPLOYMENT DISPUTES. Marvin Hudson, formerly a vice president, employee and
greater-than-10% shareholder of the Company, orally resigned as vice president
in June 1998. At a meeting held on June 2, 1998, the Board of Directors accepted
his resignation, and further stated that were Mr. Hudson to revoke his
resignation, "he is hereby terminated from all positions he held with the
Company." Subsequent to the end of the 1998 fiscal year, Marvin Hudson revoked
his resignation by denying he had resigned, and he has made a claim for
compensation allegedly due to him in connection with his prior employment and
status as an officer. Mr. Hudson is claiming this compensation pursuant to an
employment agreement that was never approved by the Company's board of
directors, and which exists in at least two different forms. AmerAlia denies any
liability to Mr. Hudson pursuant to either form of employment agreement or
otherwise. Mr. Hudson was, a partner in the THG Partnership and, consequently,
continued to be an affiliate of AmerAlia until April 1999 when THG distributed
its assets (AmerAlia common stock and Series E Preferred Stock to its partners.
In addition, Jeff Hudson, a son of Mr. Hudson, has presented an agreement
purportedly signed by the president of AmerAlia in July 1997 which provides for
Jeff Hudson to perform "general consulting services" for AmerAlia, and provides
for the issuance of 70,000 options to Jeff Hudson. AmerAlia denies the existence
of this contract, and is not aware that Jeff Hudson performed any services
whatsoever pursuant to this contract. Consequently AmerAlia has denied any
liability under this purported agreement to Jeff Hudson.
Neither Marvin Hudson nor his son Jeff has yet commenced or threatened
litigation, although both have made claims for compensation allegedly due them.
AmerAlia has engaged in discussions with both parties in an effort to resolve
the situations.
12
<PAGE>
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 ending June 30, 1999, 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, 311 Raleigh Road, Kenilworth, IL 60043 and must
be received by the Company by October 1, 1999. 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.
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, 1998,
ITS QUARTERLY REPORT ON FORM 10-QSB FOR THE PERIOD ENDED MARCH 31, 1999, 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,
311 RALEIGH ROAD, KENILWORTH, IL 60043, OR BY TELEPHONE: (847) 256-9021.
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.
<TABLE>
<S> <C>
By Order of the Board of Directors:
AMERALIA, INC.
Bill H. Gunn, President
</TABLE>
13
<PAGE>
AMERALIA, INC.
311 RALEIGH ROAD
KENILWORTH, IL 60043
PROXY THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Bill H. Gunn and John F. Woolard, 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
24, 1999, at the Special Meeting of Shareholders to be held on June 28, 1999 and
at any adjournments or postponements thereof.
1. ELECTION OF DIRECTORS
<TABLE>
<S> <C>
FOR ALL NOMINEES LISTED BELOW WITHHOLD AUTHORITY
(EXCEPT AS MARKED TO THE CONTRARY BELOW) / / to vote for all nominees listed below / /
</TABLE>
(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 / / John F. Woolard
/ / Neil E. Summerson / / Robert A. Cameron / / Geoffrey C. Murphy
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
(OVER)
<PAGE>
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.
Date: ___________________, 1999
_______________________________
Signature
_______________________________
Signature if held jointly
PLEASE MARK, SIGN, DATE AND
RETURN THE PROXY CARD
PROMPTLY IN THE ENCLOSED
ENVELOPE.
