SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: June 18, 2002
AMERALIA, INC.
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Commission file number: 0-15474
Utah 84-0631765
- ------------------------------ ----------------------------
(State or other jurisdiction (IRS Employer Identification
incorporation or organization) Number)
20971 E. Smoky Hill Rd, Centennial, CO 80015
--------------------------------------------
(Address of Principal Executive Offices)
(720) 876-2373
---------------------------------------------------
Registrant's telephone number, including area code:
818 Taughenbaugh Blvd, Rifle, CO 81650
-----------------------------------------------
(Former Address of Principal Executive Offices)
ITEM 5. OTHER EVENTS.
JOHN F. WOOLARD
We sadly announce the passing in the early hours of July 3, 2002 of our
Director, Executive Vice President, shareholder, supporter and friend, John F.
Woolard after a long illness. We were pleased to see his attendance at our
recent Annual Meeting of Shareholders and his attendance and contributions to
the meetings of the Board of Directors held at that time. John Woolard has been
a firm and long-time supporter of AmerAlia and its shareholders and directors.
We shall miss him. We extend our sympathy to his wife, Ann and his son, John.
ANNUAL MEETING OF SHAREHOLDERS; ELECTION OF DIRECTORS
AmerAlia, Inc., held its annual meeting of shareholders on June 18,
2002. At the annual meeting the shareholders only considered the election of
directors. At the meeting, the following seven persons were nominated as
directors of AmerAlia for a term of one year and until the election and
qualification of their successors. At the annual meeting of shareholders,
10,239,281 shares were represented in person or by proxy (being approximately
73.3% of the total number of shares outstanding), and Bill H. Gunn, Robert van
Mourik, John F. Woolard, Neil E. Summerson, Robert A. Cameron, Geoffrey C.
Murphy, and James V. Riley were each re-elected to the board of directors as
follows:
--------------------------------------------------------------------------------------------
NAME SHARES SHARES
FOR WITHHELD
--------------------------------------------------------------------------------------------
Bill H. Gunn 10,061,931 177,350
--------------------------------------------------------------------------------------------
Robert C.J. van Mourik 9,798,431 403,850
--------------------------------------------------------------------------------------------
John F. Woolard 10,164,431 37,850
--------------------------------------------------------------------------------------------
Neil E. Summerson 9,658,931 543,350
--------------------------------------------------------------------------------------------
Robert A. Cameron 9,658,931 543,350
--------------------------------------------------------------------------------------------
Geoffrey C. Murphy 10,024,931 177,350
--------------------------------------------------------------------------------------------
James V. Riley 10,024,931 177,350
--------------------------------------------------------------------------------------------
As a result of their election and their service on the board of
directors as of July 1, 2002, each of Neil E. Summerson, Robert A. Cameron,
Geoffrey C. Murphy, and James V. Riley will receive options to acquire 37,500
shares of AmerAlia pursuant to its 2001 Directors' Incentive Plan which the
shareholders had approved at the 2000 annual meeting held in June 2001. The
options are exercisable pursuant to the terms of that plan at an exercise price
equal to the average market price of the AmerAlia common stock during June 2002,
and will be exercisable through June 30, 2005. The purpose of the Directors'
Incentive Plan is to provide incentives to attract, retain and motivate persons
whose present and potential contributions as members of the Board of AmerAlia,
Inc. are important to AmerAlia's success and the success of its subsidiaries, by
offering them an opportunity to participate in AmerAlia's future performance
through awards of options.
RESULTS OF LITIGATION VERSUS MARVIN HUDSON
Summary of the Case. In July 1999, AmerAlia filed a complaint against
Mr. Hudson in the Colorado District Court for Arapahoe County, Colorado (civ.
act. no. 99-CV-2207) (the "State Action"). As claims for relief against Marvin
H. Hudson, a former officer and employee, AmerAlia alleged:
o that an employment contract that Mr. Hudson alleged AmerAlia entered
into with him were forgeries or procured by fraud or duress and,
therefore, not enforceable (the "Fraudulent Employment Contracts"); and
o that Mr. Hudson had converted to his own use funds, documents, personal
property, and equipment belonging to AmerAlia ("Conversion").
In the State Action, AmerAlia sought damages and exemplary damages
against Mr. Hudson, as well as an injunction and an accounting. Mr. Hudson
sought to remove this action to the federal court, but the federal court
remanded it back to the Arapahoe County District Court. In November 1999 the
Arapahoe County District Court granted Mr. Hudson's motion to change venue of
the State Action to El Paso County, Colorado where it was assigned case no.
99-CV-3050 in Division 5.
In December 1999 Mr. Hudson filed an answer with counterclaims in the
State Action in which he denied the material allegations of AmerAlia's complaint
and alleged against AmerAlia:
o "Breach of Contract" in which Mr. Hudson alleged that he had been
employed by AmerAlia pursuant to an employment contract executed by Mr.
Gunn in 1996 on behalf of AmerAlia which AmerAlia breached when it
allegedly terminated Mr. Hudson's employment in June 1998. Mr. Hudson
alleged that this employment contract provided for a salary of $80,000
per year, options to purchase 30,000 shares of common stock per year,
and 200,000 stock appreciation rights;
o damages for alleged "Willful and Wanton Breach of Contract" and
"Wrongful Termination"; and
o alleged violation of the Colorado Wage Claim Act (Section 8-4-101
et seq.) and common law fraud.
Mr. Hudson also named Messrs. Gunn, van Mourik and Summerson
individually and as officers and directors of AmerAlia although only AmerAlia
and Mr. Gunn were served and were involved in this action. AmerAlia and Mr. Gunn
replied to Mr. Hudson's counterclaims denying all of Mr. Hudson's material
allegations. The action was transferred to the El Paso County (Colorado)
district court.
Pre-Trial Decisions. Trial was held on the matter from April 30 through
May 10, 2002. Before submitting the case to the jury, the Court directed a
verdict:
o In favor of Bill Gunn by dismissing Mr. Hudson's claims for breach of
contract, wrongful termination in violation of public policy, wage
claim act, extreme and outrageous conduct, and defamation.
o In favor of AmerAlia, by dismissing Mr. Hudson's claims against
AmerAlia, the court (by directed verdict) dismissed Mr. Hudson's claims
against AmerAlia for defamation, extreme and outrageous conduct, and
under the Colorado wage claim act.
Jury Verdict
In its deliberations, the jury considered the remaining claims and
reached conclusions on the claims against Hudson, AmerAlia and Mr. Gunn as
follows:
o In favor of Mr. Hudson by dismissing AmerAlia's claims against
Mr. Hudson for conversion of AmerAlia's assets.
o The only remaining claims against AmerAlia were for breach of contract,
wrongful termination in violation of public policy, and common law
fraud.
- The jury found in favor of AmerAlia in the claim for wrongful
termination in violation of public policy.
- The jury found in favor of Mr. Hudson on the breach of
contract claim and awarded damages to Mr. Hudson from AmerAlia
in the amount of $322,900.
There were two remaining claims: common law fraud against Mr. Gunn and
common law fraud against AmerAlia. The jury would have only considered those
claims had they found that there was no valid contract. Since the jury found
that there was a valid contract, they did not need to consider the common law
fraud claims.
In conclusion, the jury assessed damages against AmerAlia for $322,900
because it found that the contract that Mr. Hudson presented was valid and
AmerAlia had breached that contract.
Following the jury's verdict, both parties filed certain post-trial
motions in which the court denied Mr. Hudson's motion for attorneys' fees and
accepted AmerAlia's calculation of interest. As a result, AmerAlia anticipates
that the court will enter judgment for Mr. Hudson in an amount less than
$400,000. Judgment has not yet been entered. After the entry of judgment, the
parties have ten days to file post-trial motions if any party desires. These
could include a motion for judgment notwithstanding the verdict, interest,
attorneys' fees, reduction of the award, and other possible actions. Either
party can appeal the judgment. Were AmerAlia to appeal the judgment, it would
have to post a bond. AmerAlia has made no decision whether to appeal the
judgment.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
AMERALIA, INC.
July 9, 2002 By: /s/ Robert van Mourik
-------------------------
Robert C.J. van Mourik,
Executive Vice President