QuickLinks-- Click here to rapidly navigate through this documentSCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934Filed by the Registrant [X] Filed by a Party other than the Registrant [ ] Check the appropriate box: [X] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)(Amendment No. )[ ] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12 CHEROKEE MINERALS AND OIL,
| Filed by the Registrantý | ||
| Filed by a Party other than the Registranto | ||
Check the appropriate box: | ||
| ý | Preliminary Proxy Statement | |
| o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
| o | Definitive Proxy Statement | |
| o | Definitive Additional Materials | |
| o | Soliciting Material Pursuant to §240.14a-11(c) or §240.14a-12 | |
HYDROMAID INTERNATIONAL, INC. | ||||
(Name of Registrant as Specified In Its Charter) | ||||
(Name of Person(s) Filing Proxy Statement, if other than the Registrant) | ||||
| Payment of Filing Fee (Check the appropriate box): | ||||
| ý | No fee required | |||
| o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11 | |||
| (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 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): | |||
| (4) | Proposed maximum aggregate value of transaction: | |||
| (5) | Total fee paid: | |||
| o | Fee paid previously with preliminary materials. | |||
| o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(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: | |||
HYDROMAID INTERNATIONAL, INC.
(Name of Registrant as Specified in its Charter)
N/A
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
1) Title of each class of securities to which transaction
applies: N/A
2) Aggregate number of securities to which transaction applies:
N/A
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined: N/A
4) Proposed maximum aggregate value of transaction: N/A
5) Total fee paid: $0.
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(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: $0.
2) Form, Schedule or Registration Statement No.: N/A
3) Filing Party: N/A
4) Date Filed: N/A
CHEROKEE MINERALS AND OIL, INC.
12222 South 1000
1350 East #1
Draper Parkway
Draper, Utah 84020
_________________________
PRELIMINARY PROXY STATEMENT
_______________
Regarding an Amendment to the Articles of Incorporation
Reflecting a Change of Name
_______________
Approximate date of Mailing of this Proxy Statement: December 26, 1998
INTRODUCTION
April 30, 2002
SOLICITATION OF PROXIES
Date, Time, and Place
This Proxy Statement isand the accompanying proxy/voting instruction form ("Proxy Form") are being furnishedmailed beginning on or about the date shown above, to holders of common shares (the "Stockholders") in connection with the solicitation of proxies by the Board of Directors (the "Board of Cherokee Minerals and
Oil, Inc.Directors" or "Board") of HYDROMAID INTERNATIONAL, INC., a Nevada corporation (the "Company"), to be used at the Annual Meeting of Stockholders (the "Meeting"), to be held September 20, 2002 in Salt Lake City Utah.
Quorum and Voting
Proxies are solicited to give all Stockholders of record at the close of business on April 30, 2002 (the "Record Date"), an opportunity to vote on matters that come before the Meeting. This procedure is necessary because Stockholders live in various states and many may not be able to attend the Meeting. Shares of Common Stock (the "Shares") can be voted only if the Stockholder is present in person or is represented by proxy. The presence, in person or by proxy, of the holders of a majority of the total outstanding voting Shares is necessary to constitute a quorum at the Meeting.
When your Proxy Form is returned properly signed, the Shares represented will be voted in accordance with your directions. You can specify your choices by marking the appropriate boxes on the enclosed Proxy Form. If your Proxy Form is signed and returned without specifying choices, the Shares will be voted as recommended by the Board of Directors. Abstentions marked on the Proxy Form and broker non-votes are voted neither "for" nor "against" items being voted upon, but are counted in the determination of a quorum.
As of the Record Date, there were 26,974,538 Shares outstanding. Each outstanding Share is entitled to one vote on each matter properly brought before the Meeting other than the election of Directors if any stockholders elect to vote by cumulative voting.
No stockholder may cumulate votes in connection
withthe election of directors unless the candidates' names have been placed in nomination prior to commencement of the voting and the stockholder has given notice at the Meeting, prior to the voting, of the stockholder's intention to cumulate votes. If any stockholder has given such a resolutionnotice, then every stockholder entitled to vote may cumulate votes for candidates in nomination and give one candidate a number of votes equal to the number of directors to be elected, multiplied by the number of votes to which that stockholder's shares are entitled, or distribute the stockholder's votes on the same principle among any or all of the candidates, as the stockholder thinks fit. The candidates receiving the highest number of votes, up to the number of directors to be elected, shall be elected.
Solicitation and Cost
The Company will bear all costs and expenses related to this solicitation of proxies by the Board of Directors, providing for an amendmentincluding the costs of preparing, printing, and mailing to the
Articles of Incorporation changing the name of the Company to "Hydro-Maid
International, Inc." to be voted upon at a special meeting of the stockholders
of the Company (the "Meeting"). The Meeting is to be held at 12222 South 1000
East, #1, Draper, Utah, on January 15, 1999, at 2:00 o'clock p.m., Mountain
Standard Time. The accompanying Notice of Special Meeting of Stockholders this Proxy Statement and the enclosed Proxy are first being mailedaccompanying materials. In addition to
stockholders on or about December 26, 1998.
This amendment is the only matter to be presented to the stockholders.
Section 78.390 of the Nevada Revised Statutes provides that every
amendment to the Articles of Incorporation of a corporation shall first be
adopted by the resolution of the Board of Directors and then be subject to the
approval of persons owning a majority of the securities entitled to vote on
any such amendment. See the caption "Amendment to the Articles of
Incorporation and Vote Required for Approval," herein.
The cost of preparing, printing and mailing each of these documents and
of the solicitation of proxies by use of the mails, the Directors, Officers, and employees of the Company, will be bornewithout receiving additional compensation, may solicit proxies personally, by telephone, or by any other means of communication.
Revocability of Proxy
If you wish to give your proxy to someone other than the Company.
Solicitation will be made by mail and/or follow-up telephone calls. The
Company will request brokers, custodians, nominees and other like parties to
forward copies of proxy materials to beneficial owners of the Company's $0.001
par value common stock(the "Common Stock") and will reimburse such parties for
their reasonable and customary charges or expenses in this regard.
Record Date and Outstanding Shares.
- ----------------------------------
The Board of Directors has fixed December 15, 1998, as the record date
for the determination of holders of Common Stock entitled to notice of and to
vote at the Meeting. At the close of business on that date, there are or will
be 21,246,244 shares of Common Stock outstanding and entitled to vote.
Holders of Common Stock will be entitled to one vote per share in the approval
of the change of name.
PROXIES AND REVOCABILITY OF PROXIES
The enclosed Proxy is being solicitedpersons designated by the Board of Directors, for useall names appearing on the enclosed Proxy Form must be crossed out and the name of another person or persons inserted. The signed Proxy Form must be presented at the Meeting and any adjournments thereof and will not be voted at any other
meeting. All proxies that are properly executed, received by the Company
prior to or at the Meeting and not properly revoked will be voted at the
Meeting or any adjournment thereof in accordance with the instructions given
therein.
Any Proxy given pursuant to this solicitation may be revoked by the person giving itor persons representing you. You may revoke your proxy at any time before it is voted. Proxies may be revoked by:
Filing with the President of the Company, at or before the taking of the
votevoted at the Meeting by executing a later-dated proxy, by voting by ballot at the Meeting, or by filing a written noticerevocation of revocation bearing a later date
than the date of the Proxy; (ii) duly executing a subsequent Proxy
relating to the same shares and delivering it to the President ofyour proxy with the Company before the Meeting;Meeting.
Your vote is important. Accordingly, you are urged to sign and return the accompanying Proxy Form whether or (iii) attendingnot you plan to attend the Meeting and voting in
person (although attendanceMeeting. If you do attend, you may vote by ballot at the Meeting, willthereby canceling any proxy previously given.
As a matter of policy, proxies, ballots, and voting tabulations that identify individual Stockholders are kept private by the Company. Such documents are available for examination only by the inspectors of election and certain personnel associated with processing Proxy Forms and tabulating the vote. The vote of any Stockholder is not disclosed except as may be necessary to meet legal requirements.
Documents Incorporated by Reference
The Company specifically incorporates the Financial Statements for the year ended December 31, 2001, filed as part of the 2001 Annual Report on Form 10-KSB in response to Item 13 of the 10-KSB (the "Annual Report"). The Annual Report and accompanying Financial Statements should have been enclosed in the mailing containing this Proxy Statement. If you did not receive a copy of itself
constitute a revocation of a Proxy). Any written notice revoking a
Proxy shouldthe Annual Report and Financial Statements, please contact the Company and request that the information be sent to Cherokee Minerals and Oil, Inc., 12222 South
1000 East, #1, Draper, Utah 84020, Ronald L. LaFord, President, or hand
deliveredyou. A copy of the 2001 Annual Report may be obtained from the Company without cost to the President, at or beforerequesting Stockholder by contacting the taking of the vote at the
Meeting.
DISSENTERS' RIGHT OF APPRAISAL
The Nevada Revised Statutes does not provide for dissenter's rights of
appraisal in connection with a change of name of a Nevada corporation.
Accordingly, stockholders will not have appraisal rights with respect to the
proposed change of the Company's name.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
No director, executive officer, nominee for election as a director,
associate of any director, executive officer or nominee or any other person
has any substantial interest, direct or indirect, by security holdings or
otherwise, in the proposed amendment to change the name of the Company or in
any action covered by the related resolutions adopted by the Board of
Directors, which is not shared by all other stockholders.
Company.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Voting Securities.
- -----------------
The securities that are entitled to vote at the Meeting consist of
21,246,244 shares of $0.001 par value Common StockSecurities
As of the Company. Each shareRecord Date for the Annual Meeting of Common Stock is entitled to one vote. TheStockholders, the number of issued and outstanding shares of Common Stock at the close of business on December 15, 1998, the record date
for determining stockholders entitled to notice of and to vote on the
amendment to the Company's Articles of Incorporation, are or will be
21,246,244, held by approximately 355 stockholders.
Security Ownership of totaled 26,974,538.
Principal Holders and Management.
- ------------------------------------------------------
To the knowledge of management and based upon a review of the stock
ledger maintained by the Company's transfer agent and registrar, theStockholders
The following table sets forth information concerning the beneficial ownership of the Company's Shares as of December 31, 2001 for (i) each current Director and each nominee for Director (ii) each named executive officer of the Company as defined in 402(a)(2) of Regulation S-B of the Securities Act of 1933, (iii) all persons whoknown by the Company to beneficially own more than five
percent5% of the Company's Common Stockvoting Shares, and (iv) all officers and Directors of the Company as a group. See also "Certain Relationships and Related Transactions" below.
| Name | Title | Amount and Nature of Ownership(1)(2) | Percentage of Class(3) | ||||
|---|---|---|---|---|---|---|---|
| Mark S. Brewer(4) | Vice President and Director | 279,333 | 1.0 | % | |||
| Bruce H. Haglund(5) | Secretary and Director | 211,000 | * | ||||
| Bart C. Warner(6) | Beneficial Owner | 4,902,447 | 18.2 | % | |||
| All Directors and Executive Officers as a Group(7) | 499,333 | 1.8 | % | ||||
Certain Relationships and Related Transactions
On November 8, 2000, the Company extended a $300,000 loan to Lighthouse Capital, Inc., a company
engagedwhich is solely owned by entities controlled by Culley W. Davis ("Davis"), formerly the Chairman of the Board and Chief Executive Officer of the Company who resigned as an officer and director of the Company effective December 31, 2001. The note pertaining thereto bears interest at the rate of 6.2 percent per annum and is payable on or before November 8, 2001. On December 31, 2001, the Company, Lighthouse Inc., and Liquitek Enterprises, Inc. agreed that Liquitek Enterprises, Inc. would assume the responsiblilty for this $300,000 loan and accrued interest in consideration for Liquitek Enterprises, Inc. being relieved of its obligation to Lighthouse, Inc.
In October 2000, the development and marketing of technology used in the automobile
industry. During the period of 1984 until 1990, Mr. Davis founded and served
as President of Vencor International, Inc., a developer of form-fitted,
reusable, cloth diapers for medical and non-medical applications. From 1979
until 1984 Mr. Davis founded and operated Capital Diamond Corporation, a
diamond and jewelry wholesaling company.
In May 1996, Mr. DavisCompany entered into a stipulationmonth-to-month lease with Lighthouse Capital, Inc., which is solely owned by entities controlled by Davis. The monthly lease payment totals $9,200. In September 2001, the Company terminated this month-to-month lease.
Gibson, Haglund & Paulsen, the Company's attorneys, incurred approximately $77,000 and $150,000 in legal fees for judgmentservices rendered during 2001 and permanent injunction (the "Injunction") with2000, respectively. Bruce H. Haglund, a Director, the Department of FinanceSecretary, and stockholder of the State of Idaho (the "State") in connection withCompany, is a complaint (the "Complaint")
filed by the State alleging that Mr. Davis violated provisionsmember of the Idaho
Securities Act. In accordancelaw firm.
On October 20, 1999, J. Steven Young was appointed as a Director of the Company. For his service as a Director and a consultant for a two-year period, the Company entered into an agreement with Mr. Young providing that the Injunction,Company will compensate him by issuing a total of 300,000 shares of the Company's Common Stock. The Company issued 200,000 shares for the first year of service and recorded compensation expense of approximately $974,000 and $239,000 for the years ended December 31, 2000 and 1999, respectively. The additional 100,000 shares for the second year of service were not issued, and Mr. Davis paid a $50,000
fine to the state and was permanently enjoined from violating the Idaho
Securities Act, from offering or selling unregistered securities in Idaho, and
from transacting securities business in Idaho without applicable securities
licenses.
Ronald L. LaFord, President
Mr. LaFord has been servingYoung resigned as President and a member of the Board of Directors of ESSI since September 1997. From March 1994the Company in August 2001.
Compliance With Section 16 (a) of the Exchange Act
Section 16 (a) of the Securities Exchange Act requires the Company's officers, Directors, and persons who own more than 10% of a registered class of the Company's equity securities to file reports of ownership and changes in ownership with the SEC. Officers, Directors, and greater than 10% beneficial owners are required by Securities and Exchange Commission ("SEC") regulation to furnish the Company with copies of all Section 16 (a) forms they file. The Company believes all filing requirements applicable to its Officers, Directors have now been complied with. Required filings by 10% beneficial owners have not been filed as of the date of this Proxy Statement.
Board of Directors
The Board of Directors has the responsibility for establishing broad corporate policies and for overseeing the overall performance of the Company. However, in accordance with corporate governance principles, the Board is not involved in day-to-day operating details. Members of the Board of Directors are kept informed of the Company's business through discussions with the Chairman and other officers, by reviewing analyses and reports sent to them, and by participating in Board and committee meetings.
The Board held one formal meeting during 2001, although the members of the Board met at least monthly informally. All Directors attended more than 75% of the Meetings held.
Committees of the Board
During 1999, the Board of Directors established a number of committees, including a Finance Committee, an Audit Committee, and a Compensation Committee, each of which is briefly described below. Upon the election of Directors at the Meeting, the Committees will be reconstituted for the ensuing year.
The Finance Committee was established to oversee Company expenditures and approve contracts entered into by the Company requiring the payment of $50,000 or more. As of the date of this Proxy Statement, the Committee consists of Bruce H. Haglund and Mark S. Brewer.
The Audit Committee was established to meet with management to consider the adequacy of the internal controls and the objectivity of financial reporting; the committee meets with the independent auditors and with appropriate Company financial personnel about these matters. The committee recommends to the Board of Directors the appointment of the independent auditors, subject to ratification by the Stockholders at the Annual Meeting. The independent auditors periodically meet alone with the committee and always have unrestricted access to the committee. As of the date of this Proxy Statement, the committee consists of Mark S. Brewer and Bruce H. Haglund.
The Compensation Committee negotiates employment contracts, recommends to the Board of Directors compensation for officers, Directors, and employees, and administers management incentive compensation plans, including stock option plans. As of the date of this Proxy Statement, the committee consists of Bruce H. Haglund and Mark S. Brewer. There is one vacancy on the Compensation Committee at this time.
Compensation of Directors
The Company's policy is not to pay cash compensation to directors who are employees or consultants of the Company for their services as directors, but reimburses reasonable out-of-pocket expenses of directors for attendance at meetings.
Limitation of Liability and Indemnification Matters
The Company's Certificate of Incorporation limits the liability of directors to the maximum extent permitted by Nevada law. Such limitation of liability does not apply to liabilities arising under the federal securities laws and does not affect the availability of equitable remedies such as injunctive relief or rescission.
The Company's Bylaws provide that the Company shall indemnify its directors and executive officers and may indemnify its other officers and employees and other agents to the fullest extent permitted by law. The Company believes that indemnification under its Bylaws covers at least negligence and gross negligence on the part of indemnified parties. The Company's Bylaws also permit it to secure insurance on behalf of any officer, director, employee, or other agent for any liability arising out of his or her actions in such capacity, regardless of whether the Bylaws permit such indemnification.
At present, there is no pending litigation or proceeding involving any director, officer, employee, or agent of the Company where indemnification will be required or permitted. The Company is not aware of any threatened litigation or proceeding that might result in a claim for such indemnification.
ELECTION OF DIRECTORS
(Item 1 on Proxy Form)
The Bylaws of the Company provide for the Directors to number at least three and no more than seven. Three members of the Board of Directors are to be elected at the Meeting. The nominees selected by the Board of Directors are listed on the following pages. Stockholders have cumulative voting rights when voting for Directors; accordingly, any Stockholder may multiply the number of Shares he or she is entitled to vote by the number of Directors to be elected and allocate votes among the candidates in any manner provided such candidate was in nomination prior to the meeting. Stockholders may exercise such cumulative voting rights, either in person or by proxy, with or without advance notice to the Company. Any Shares not voted, whether by abstention, broker non-vote, or otherwise, have no impact on the vote.
The Board of Directors intends to vote proxies equally for the nominees unless otherwise instructed on the Proxy Form. If you do not wish your Shares to be voted for particular nominees, please identify the exceptions in the designated space provided on the Proxy Form. If at the time of the Meeting one or more of the nominees have become unavailable to serve, Shares represented by proxies will be voted for the remaining nominees and for any substitute nominee or nominees designated by the Board of Directors.
Directors elected at the Meeting will hold office until September 1997,
Mr. LaFordthe next Annual Meeting or until their successors have been elected and qualified. For each nominee there follows a brief listing of principal occupation for at least the past five years, other major affiliations, and age as of April 30, 2002.
Nominees for Election as Directors
The names, ages, and positions of the nominees for election as Directors are as follows:
| Name | Age | Position with the Company | First Elected | |||
|---|---|---|---|---|---|---|
| Bruce H. Haglund | 50 | Secretary, Director | 1998 | |||
| Mark S. Brewer | 44 | VP Marketing, Director | 1998 |
The Board of Directors intends to nominate an additional candidate for election as a Director prior to the annual meeting of the Company's stockholders and will amend this Proxy Statement prior to circulation to stockholders.
Bruce H. Haglund, Director and Secretary
Bruce H. Haglund served as a Director and Secretary of National MarketingESSI from 1992 until December 1998 and Advertisinghas served in the same positions for Flying
J Corporation,the Company since December 1998. Mr. Haglund is a principal in the law firm of Gibson, Haglund & Paulsen, with offices in Orange County, California, and Sandy, Utah, based companywhere he has been engaged in the developmentprivate practice of law since 1980. He is the Secretary of Metalclad Corporation, a public company whose stock is traded on the Nasdaq Small Cap Market, and operation
of truck stops and service stations. From 1986 to 1994 he served in various
capacities for Citizens Utilities Company including, Director of
Administration and Supply, Managing Coordinator of Marketing and Sales and
Coordinator of Vehicle Procurement and Maintenance. From 1980 until 1985, Mr.
LaFord wasLiquitek Enterprises, Inc., a Senior Manager for Union Carbide Corporation. From 1974 until
1979 he was a Senior Consultant for General Telephone and Electronics (GTE).
Mr. LaFord received his A.A. degree in Civil Engineering and B.A. degree in
Marketing and Business Administration from Central Washington University.public company whose stock is traded on the OTC Bulletin Board. He is a graduate of the General Telephone and Electronics SchoolUniversity of Management.
Utah College of Law.
Mark S. Brewer, Director and Vice President, Mr.Marketing
Mark S. Brewer has beenserved as Vice President and a member of the Board of Directors of ESSI from 1997 and has continued in the same capacities with the Company since September 1997. HeDecember 1998. Mr. Brewer also serves as President of Search International and Onkli, Incorporated. Search International was founded by Mr. Brewer in 1990 for the purpose of developing and marketing new products. He founded Onkli, Incorporated in 1991 for the purpose of creating and packaging consumer houseware products. In 1979, Mr. Brewer joined Advertising Professionals, a full service advertising agency whichthat he acquired in 1989 and operated until 1996.
Vote Required
The two Director nominees receiving the highest number of votes will be elected. Management intends to vote "FOR" all of the Director nominees set forth above.
The Board of Directors unanimously recommends that the Company's Stockholders vote "FOR" the election of the foregoing slate of nominees for the Board of Directors, and your proxy will be so voted unless you specify otherwise.
Executive Officers
The name and position of the Company's executive officers who are not also nominees for Directors are as follows:
Paul A. Kujanpaa, Vice President, of Manufacturing
Mr. Kujanpaa has been Vice President of Manufacturing offor ESSI and the Company since July 1998. From 1997 to 1998 he served as Senior Manager of Order Fulfillment and Logistics for Haworth, Inc. From 1994 until 1997 Mr. Kujanpaa was a Management Consulting Manager for Grant Thornton LLP, the country's seventh largest accounting and management consulting firm. During the period of 1991 to 1993 he held the position of Senior Management Consultant for Booz, Allen & Hamilton, an international management consultingmanagement-consulting firm ranked among the top five in the world. From 1989 until 1991, Mr. Kujanpaa worked as Management Consultant for A.T. Kearney Incorporated, an international management
consultingmanagement-consulting firm based in Chicago, Illinois. During the period of 1988 to 1989, Mr. Kujanpaa was a partner of and Engineer Consultant for Metz and Associates Incorporated, a manufacturing engineering consulting firm whichthat was sold to A.T. Kearney Incorporated in 1989. From 1986 to 1988 he held the position of Manufacturing Engineering Consultant for Ingersoll Engineers Incorporated of Rockford, Illinois. Mr. Kujanpaa received his B.S. in Manufacturing Engineering from Brigham Young University.
John W. Nagel, Chief Financial Officer
Ronald M. Turner, Vice President, Sales
Ronald M. Turner joined the Company as National Sales Director in late 1999 and was promoted to Vice President, Sales in October 2000. Mr. Nagel joinedTurner, a Certified Marketing Executive, came to the Company from the position of Executive Director of Sales and Marketing Executives of Madison, Inc., a position he held for eight years. He spent the previous 28 years in sales management with the American Breeders Service where he consistently exceeded his annual sales goals. Mr. Turner studied sales management and marketing at Syracuse University and holds a B. S. degree from Utah State University.
RATIFICATION OF APPOINTMENT OF AUDITORS
(Item 2 on Proxy Form)
General
In conjunction with a merger and reorganization of ESSI and the Company, the Company changed auditors in January 1999. The Company's former accountants, Jones, Jensen & Co., were dismissed effective January 26, 1999, and Squar, Milner, Reehl & Williamson, LLP ("Squar Milner"), were appointed as Chief Financial Officerthe Company's principal accountants. There were no disagreements with the former accountants and are no disagreements with the current accountants on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure.
Squar Milner has no financial interest in the Company. A representative of Squar Milner is expected to be present at the Annual Meeting, will have an opportunity to make a memberstatement if he or she so desires, and is expected to be available to respond to appropriate questions.
Squar Milner performed various audit and other services for the Company during 2001. Such services included an audit of annual financial statements, interim reviews of quarterly financial statements, review and consultation connected with certain filings with the SEC, internal control reviews required by certain contractual agreements or requested by the Company's management, consultation on tax, financial accounting and reporting matters, and meetings with the Audit Committee of the Board of Directors in September 1998. From 1988Directors.
Audit Fees
Following is a summary of the 2001 fees paid to August 1998, Mr. Nagel
served as Director of Finance for WVUE Television of New Orleans, Louisiana.
During the period of 1983 to 1988 he was operator and part owner of several
franchised ice cream parlors. From 1980 to 1983 Mr. Nagel held positions in
administration and management for The Nautilus Group, Inc., a poultry
incubation equipment manufacturer and portable electronic stage lighting
system manufacturer. From 1968 to 1980, Mr. Nagel worked for Arthur Anderson
& Co. in numerous capacities relating to consultingSquar Milner for the design and
implementation of computer-based management information systems. He served as
an officer in the U.S. Navy Supply Corps from 1962 to 1966. Mr. Nagel was
awarded his M.B.A. degree from Harvard University and his B.S. degree in
accounting from Ohio State University.
Bruce H. Haglund, Secretary and Director
Bruce H. Haglund has served as a Director and Secretary of ESSI since
September 1998. Mr. Haglund has practiced law in Orange County, California
since 1980. Since April 1994, Mr. Haglund has been a principal in the law
firm of Gibson, Haglund & Johnson. From February 1991 to April 1994, Mr.
Haglund was a principal in the law firm of Phillips, Haglund, Haddan &
Jeffers. From 1984 to February 1991, he was a partner in the law firm of
Gibson & Haglund. He is memberaudit of the BoardCompany's December 31, 2000 financial statements and reviews of Directors of Santa Barbara
Restaurant Group, Inc. andquarterly reports filed with the Secretary of Metalclad Corporation, public
companies whose stock is traded onSEC in 2001:
| | | | All Other | | | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Payments in Year Ended | Annual Audit | Tax | Audit- Related | Non-Audit- Related | Total All Other | Total | ||||||||||||
| December 31, 2001 | $ | 56,794 | $ | 3,571 | $ | 1,500 | $ | 3,560 | $ | 5,060 | $ | 65,425 | ||||||
The Company has accrued approximately $40,000 through April 30, 2002 for the NASDAQ Small Cap Market. Mr. Haglund
is also the Secretary and a memberaudit of the Board of Directors of Aviation
Distributors, Inc. and Renaissance Golf Products, Inc., public companies whose
stock is traded on the OTC/BB. He is a graduate of the University of Utah
College of Law.
Contractual Arrangements Regarding Changes in Control.
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Pursuant to an Agreement and Plan of Reorganization (the "Plan") dated
November 12, 1998, and deemed to have been closed as of December 11, 1998,
between the Company; Environmental Systems & Solutions, Inc., a Nevada
corporation ("ESSI"), and the stockholders of ESSI (sometimes collectively
called the "ESSI Stockholders"), the ESSI Stockholders became the controlling
stockholders of the Company in a transaction viewed as a reverse acquisition,31, 2001 financial statements by Squar Milner, and the Company becameis current in the payment of fees due the auditors.
All Other Fees
The Company paid fees of approximately $5,060 to Squar Milner for all other services provided by it during 2001, including audit-related services of $1,500. Non-Audit related fees were for review of 2001 proxy statement and for a 91% majority-owned subsidiaryrepresentative of ESSI. The Plan was
treated as a recapitalizationSquar Milner to attend the May 19, 2001 stockholders meeting.
Report of the Company for accounting purposes.
Changes in Control Since the Beginning of the Last Fiscal Year.
- --------------------------------------------------------------Audit Committee
The Plan was adopted, ratified and approved by the Board of Directors of the Company has appointed an Audit Committee currently composed of two directors, Messrs. Brewer and Haglund.
The Board of Directors has adopted a written charter for the Audit Committee. The Audit Committee's job is one of oversight as set forth in its Charter. It is not the duty of the Audit Committee to prepare the Company's financial statements, to plan or conduct audits, or to determine that the Company's financial statements are complete and accurate and are in accordance with generally accepted accounting principles. The Company's management is responsible for preparing the Company's financial statements and for maintaining internal control. The independent auditors are responsible for auditing the financial statements and for expressing an opinion as to whether those audited financial statements fairly present the financial position, results of operations, and cash flows of the Company in conformity with generally accepted accounting principles.
The Audit Committee has reviewed and discussed the Company's audited financial statements with management and with Squar Milner, the Company's independent auditors for 2001.
The Audit Committee has discussed with Squar Milner the matters required to be discussed by Statement on Auditing Standards No. 61.
The Audit Committee has received from Squar Milner the written statements required by Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees, and has discussed Squar Milner's independence with them, and has considered the compatibility of non-audit services with the auditors' independence.
Based on the review and discussions referred to above, the Audit Committee has recommended to the Board of Directors that the audited financial statements be included in the Company's Annual Report on Form 10-KSB for the year ended December 31, 2001 for filing with the Securities and Exchange Commission.
The Audit Committee
Mark S. Brewer
Bruce H. Haglund
Use of the Report of the Audit Committee and Audit Committee Charter
In accordance with and to the extent permitted by applicable law or regulation, the information contained in the Report of the Audit Committee and the Audit Committee Charter shall not be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, and shall not be deemed to be soliciting material or to be filed with the SEC under the Securities Act of 1933 or the Securities Exchange Act of 1934.
Vote Required
Ratification of the appointment of auditors requires a majority of the votes cast thereon. Any Shares not voted, whether by abstention, broker non-vote, or otherwise, have no impact on the vote. If the Stockholders do not ratify this appointment, other independent auditors will be considered by the Board of Directors upon recommendation of the Audit Committee. The affirmative vote of a majority of the outstanding Shares is required to approve this proposal. Management intends to vote "FOR" the proposal to ratify the auditors.
The Board of Directors unanimously recommends that the Company's Stockholders vote "FOR" the ratification of the auditors, and your proxy will be so voted unless you specify otherwise.
REPORT ON EXECUTIVE COMPENSATION
The Company's compensation programs are designed to link executives' compensation to the performance of the Company. The annual salary paid to executives over the past three years reflect fixed amounts that are deemed competitive for executives with comparable ability and experience in the industry.
Compensation of Officers
The following table sets forth the aggregate compensation paid by the Company for services rendered during the periods indicated to the Company's Chief Executive Officer and all officers whose compensation exceeded $100,000 for the year.
Summary Compensation Table
| ANNUAL COMPENSATION | LONG-TERM COMPENSATION | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| OTHER ANNUAL COMPEN- SATION ($) | AWARDS | PAYOUTS | ||||||||||||||
| NAME AND PRINCIPAL POSITION | YEAR | SALARY ($) | BONUS ($) | RESTRICTED STOCK ($) | OPTIONS/ SARS (#) | LTIP PAYOUTS ($) | ALL OTHER(1) | |||||||||
| Culley W. Davis, Chairman, CEO(1), | 2001 2000 1999 | 30,000 240,000 115,845 | — — — | 110,000 — — | (3) | — — — | — 225,000 300,000 | (4) (5) | — — — | — — — | ||||||
| Ronald L. LaFord, President(1)(2) | 2001 2000 1999 | 68,650 120,000 96,000 | — — — | — — — | — — — | — — 60,000 | (6) | — — — | — — — | |||||||
Option Grants in Last Fiscal Year—Individual Grants
There were no new option grants during the fiscal year ended December 31, 2001.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values
The former principal stockholdersfollowing table sets forth the number of options, both exercisable and unexercisable, held by each of the named executive officers of the Company and the value of any in-the-money options at December 31, 2001 (assuming a market value of $.08 on December 31, 2001):
| Name | Shares Acquired Upon Exercise | Value Realized | Number of Unexercised Options At Fiscal Year-End Exercisable/ Unexercisable | Value of Unexercised In-the-Money Options at Fiscal Year Exercisable/ Unexercisable | ||||
|---|---|---|---|---|---|---|---|---|
| Culley W. Davis | -0- | -0- | 490,000/107,500 | $0/$0 | ||||
| Ronald L. LaFord | -0- | -0- | 126,667/-0- | $0/$0 |
SUBMISSION OF STOCKHOLDER PROPOSALS
Stockholder proposals intended for inclusion in next year's proxy statement should be sent via certified mail-return receipt requested to Bruce H. Haglund, Secretary, Jamboree Center, 2 Park Plaza, Suite 450, Irvine, California 92614 and must be received by February 28, 2003.
MISCELLANEOUS AND OTHER MATTERS
Management knows of no matters to come before the Meeting other than those specified herein. If any other matter should come before the Meeting, then the persons named in the enclosed form of proxy will have discretionary authority to vote all proxies with respect thereto in accordance with their percentage of
ownershipjudgment.
Documents Incorporated by Reference
The Company specifically incorporates the Financial Statements for the year ended December 31, 2001, filed as part of the outstanding voting securities2001 Annual Report on Form 10-KSB in response to Item 13 of the Company prior to10-KSB. The Annual Report and attached Financial Statements should have been enclosed in the completionmailing containing this Proxy Statement.
A copy of the Plan were: Joe K. Johnson, former President and Director,
owned 2,118,000 shares of the Company (47.4%); Melinda Johnson, former
Secretary/Treasurer and Director (and wife of Joe K. Johnson), owned 947,340
shares of the Company (21.2%); and Chiricahua Company, owned 947,340 shares of
the Company (21.2%). Chiricahua Company is wholly-owned by David C. Merrell, a
former director and executive officer of the Company.
The source of the consideration used by ESSI and the ESSI Stockholders
to acquire their respective interests in the Company was the exchange of
100% of the outstanding Common Stock of ESSI pursuant to the Plan.
The basis of the "control" by the ESSI Stockholders is stock ownership.
For further information, see the 8-K CurrentCompany's current Annual Report of the Company dated
October 16, 1998; its 8-K-A1 Current Report dated October 16, 1998; and its
8-K-A2 Current Report dated October 16, 1998, all of which have been
previouslyon Form 10-KSB as filed with the Securities and Exchange Commission, including the financial statements and which are
incorporated hereinschedules thereto but without other exhibits, is being mailed to each Stockholder together with this Proxy Statement. Additional copies may be obtained by reference. These Reports,Stockholders without charge by writing to: HydroMaid International, Inc., 1350 East Draper Parkway, Draper, Utah 84020. Copies of any exhibits to the Annual Report, specifically listed in the Annual Report, may be obtained by Stockholders with a charge equal to the Company's cost to copy and other Reportssend any requested exhibit.
HYDROMAID INTERNATIONAL, INC.
Proxy Form for Annual Meeting of Stockholders to be Held on September 20, 2002
The undersigned hereby constitutes and appoints Mark S. Brewer and Bruce H. Haglund, and each of them, the true and lawful attorneys, agents, and proxies of the Company, may be reviewed onundersigned, with full power of substitution, to vote with respect to all the Internet at www.sec.govshares of Common Stock, par value $.001, of HYDROMAID INTERNATIONAL, INC. (the "Company"), standing in the EDGAR Archives.
AMENDMENT TO THE ARTICLES OF INCORPORATION
AND VOTE REQUIRED FOR APPROVAL
The purpose of the amendment to change the name of the Company to
"Hydro-Maid International, Inc." is to give the Company a name that reflects
its present business operations as being conducted by the Company's
subsidiary, "ESSI."
Section 78.390 of the Nevada Revised Statutes provides that every
amendment to the Articles of Incorporation of a corporation shall first be
adopted by the resolution of the Board of Directors and then be subject to the
approval of persons owning a majority of the securities entitled to vote on
any such amendment.
Quorum and Voting.
- -----------------
In accordance with the Nevada Revised Statutes, an amendment must be
adopted by persons owning a majority of the outstanding voting securities;
accordingly, persons who own in excess of the majority of the outstanding
voting securities of the Company will be required to be present to constitute
a quorum, and persons owning in excess of a majority of the outstanding voting
securities of the Company will be required to vote in favor of the name change
or this proposal will not be adopted.
OTHER MATTERS
The Board of Directors of the Company is not aware of any business other
than the aforementioned matter that will be presented for considerationundersigned at the Meeting. If other matters properly come beforeclose of business on April 30, 2002, at the Annual Meeting it is the
intention of the person named in the enclosed Proxy to vote thereon in
accordance with his best judgment.
TRANSFER OF STOCK CERTIFICATES
Subject to adoption of the amendment, on or after January 15, 1999,
stockholders may forward their stock certificates to Interwest Transfer
Company, 1981 Murray-Holladay Road, Salt Lake City, Utah 84117, Telephone
(801) 272-9294, together with $15 for each stock certificate requested to be
issued or transferred for new stock certificates bearing the new name of the
Company and its new Cusip Number. If stock certificates are being transferred
into the same name, no signature is required; if being transferred to a new
name, the stock certificate submitted must be signed and the signature must be
guaranteed by a "Medallion Member" bank or broker dealer. A stock power
similarly signed and guaranteed will also be acceptable.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. STOCKHOLDERS WHO DO
NOT EXPECT TO ATTEND THE MEETING IN PERSON ARE URGED TO EXECUTE AND RETURN THE
ENCLOSED PROXY IN THE REPLY ENVELOPE PROVIDED.
By Order of the Board of Directors,
December 15, 1998 Ronald L. LaFord
Draper, Utah President and Director
CHEROKEE MINERALS AND OIL, INC.
December 15, 1998
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS OF
CHEROKEE MINERALS AND OIL, INC.
TO BE HELD JANUARY 15, 1999
TO ALL STOCKHOLDERS:
NOTICE is hereby given that a special meeting of the stockholders
of CHEROKEE MINERALS AND OIL, INC. has been calledStockholders to be held on January 15,
1999,September 20, 2002, and at 12222 South 1000 East, #1, Draper, Utah, at the hour of 2:00 o'clock
p.m., Mountain Standard Time, for the following purposes:
1. To amend the Company's Articles of Incorporation to change
its name to "Hydro-Maid International, Inc."
2. To conduct such other business as may properly come before
the meeting.
The Board of Directors of Cherokee Minerals and Oil, Inc. has set
5:00 o'clock p.m. on December 15, 1998, as the record date for the purpose of
determining the stockholders of the Company who shall be entitled to notice of
and to vote at the meeting.
Draper, Utah CHEROKEE MINERALS AND OIL, INC.
December 15, 1998 BY ORDER OF THE BOARD OF DIRECTORS
PROXY
FOR A SPECIAL MEETING OF STOCKHOLDERS OF
CHEROKEE MINERALS AND OIL, INC.
TO BE HELD JANUARY 15, 1999
By completing and returning this Proxy to Cherokee Minerals and Oil, Inc.
(the "Company"), you will be designating Ronald L. LaFord, the President of
the Company, to vote all of your shares of the Company's Common Stock as
indicated below.
Please complete this Proxy by clearly marking the appropriate column(s),
filling out the stockholder information and dating below, and returning it to
the Company in the enclosed self-addressed, envelope.
Matters of business are as follows:
PROPOSAL 1 - CHANGE OF NAME: Shall the name of the Company be changed
to "Hydro-Maid International, Inc."?
YES NO ABSTAIN
___ ____ ____
The undersigned hereby acknowledges receipt of the Company's Proxy
Statement dated December 15, 1998, and expressly revokes any and all proxies
heretofore given or executedadjournments and postponements thereof, to vote:
1. | Election of Directors: | |||||
FOR all nominees listed below (Except as marked to the contrary below) | ||||||
WITHHOLD AUTHORITY (Circle nominees for whom voting authority is to be withheld.) | ||||||
BRUCE H. HAGLUND | MARK S. BREWER | |||||
2. | To consider and ratify the appointment of SQUAR, MILNER, REEHL & WILLIAMSON, LLP as independent auditors of the Company for the fiscal year ending December 31, 2002: | |||||||||||||
| FOR | AGAINST | ABSTAIN | ||||||||||||
| 3. | In their discretion, the Board of Directors is authorized to vote this Proxy upon such other matters as may properly come before the meeting or any adjournment or postponement thereof. | |||||||||||||
The shares represented by this Proxy will be voted in the manner directed herein by the undersigned with respectstockholder. If no directions to the sharescontrary are made, this Proxy will be voted FOR the election of stock represented in this Proxy. (Pleaseall of the director nominees named above and FOR approval of Proposal 2 if necessary.
DATED: | , 2002 | |||
(Signature) | ||||
(Signature, if held jointly) |
IMPORTANT: Please sign exactly as your name appears on
your stock certificate(s)). Joint ownersat the left. Each joint owner should both sign. If signing in a
representative capacity,Executors, administrators, and trustees should give full titlestitle. If a corporation, please sign in full corporate name by an authorized officer. If a partnership, please sign in partnership name by an authorized person.
Please mark, sign, date, and attach proofreturn promptly.
THIS PROXY IS BEING SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF HYDROMAID INTERNATIONAL, INC.