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PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. )
File by the Registrant [XX]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for use of the
[XX] Definitive Proxy Statement Commission only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
AMERALIA, INC.
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(Name of Registrant as Specified In Its Charter)
Robert C.J. van Mourik, Executive Vice President
------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate Box:)
[XX] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and O-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule O-11:(1)
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
(1) Set forth the amount on which the filing fee is calculated and state how
it was determined.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule O-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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AMERALIA, INC.
818 Taughenbaugh Blvd.
Rifle, Colorado 81650
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 21, 2001
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May 15, 2001
TO THE SHAREHOLDERS OF AMERALIA, INC.:
The Annual Meeting of Shareholders of AmerAlia, Inc., a Utah
corporation, ("AmerAlia" or "we") will be held at the DoubleTree Hotel, 9599
Skokie Blvd, Skokie, Chicago, Illinois, on June 21, 2001 at 10:00 a.m. local
time, to consider and take action on:
1. The election of seven directors to serve until the next annual
meeting of shareholders and until their successors have been
elected and qualified.
2. A proposal to approve the AmerAlia, Inc. 2001 Directors' Incentive
Plan.
3. A proposal to approve stock options exercisable for a total of
650,000 shares of common stock granted to certain directors and
executive officers of AmerAlia.
4. A proposal to approve the AmerAlia, Inc. 2001 Stock Option Plan.
5. 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
April 27, 2001, 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 WE HOPE
YOU WILL ATTEND.
Shareholders, whether or not they expect to be present at the meeting,
are requested to sign and date the enclosed proxy and return it promptly in the
envelope enclosed for that purpose. Any person giving a proxy has the power to
revoke it at any time by following the instructions provided in the Proxy
Statement.
By Order of the Board of Directors:
Bill H. Gunn, President
PLEASE DATE, SIGN AND PROMPTLY RETURN YOUR PROXY SO THAT YOUR SHARES MAY BE
VOTED IN ACCORDANCE WITH YOUR WISHES. THE GIVING OF SUCH PROXY DOES NOT AFFECT
YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND THE MEETING.
YOUR VOTE IS IMPORTANT
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AMERALIA, INC.
818 TAUGHENBAUGH BLVD.
RIFLE, COLORADO 81650
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 21, 2001
May 15, 2001
This Proxy Statement is being furnished to shareholders of AmerAlia,
Inc. ("AmerAlia" or the "we") in connection with the solicitation of proxies by
and on behalf of AmerAlia's Board of Directors for use at the Annual Meeting of
shareholders of AmerAlia (the "Annual Meeting") and at any adjournments or
postponements thereof. The Annual Meeting will be held at 10:00 a.m. local time,
at the DoubleTree Hotel, 9599 Skokie Blvd, Skokie, Chicago, Illinois, on June
21, 2001. This Proxy Statement will be first mailed to the shareholders on or
about May 19, 2001.
VOTING SECURITIES
Holders of record of AmerAlia's common stock (the "Common Stock") at
the close of business on April 27, 2001 (the "Record Date") will be entitled to
vote on all matters. On the Record Date, we had 11,903,710 shares of Common
Stock outstanding and 82 shares of Series E Preferred Stock outstanding. The
holders of shares of Common Stock are entitled to one vote per share; the
holders of the Series E Preferred Stock are not entitled to vote. Our voting
securities include only the outstanding Common Stock.
A majority of the issued and outstanding shares of the Common Stock,
entitled to vote, represented in person or by proxy, constitutes a quorum for
the transaction of business at the meeting. As described in more detail below,
if there is a quorum present the seven 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 our Secretary, 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.
We will bear the cost of the solicitation. In addition to solicitation
by mail, we will request banks, brokers and other custodian nominees and
fiduciaries to supply proxy materials to the beneficial owners of AmerAlia's
Common Stock for whom they hold shares and will reimburse them for their
reasonable expenses.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
At April 27, 2001, we had one class of outstanding voting securities, our
common stock (referred to herein as the "Common Stock"). The following table
sets forth information as of April 27, 2001 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.
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Name & Address Amount & Nature Percent Percent
of of Beneficial of of Voting
Beneficial Owner Ownership Class Securities
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Bill H. Gunn 474,060 (1) 3.9% 1.0%
Robert C.J. van Mourik 320,384 (2) 2.6% 1.2%
John F. Woolard 277,500 (3) 2.2% 0.2%
Geoffrey C. Murphy 115,000 (4) 1.0% 0.3%
Neil E. Summerson 150,000 (5) 1.2% nil
Robert A. Cameron 150,000 (6) 1.2% nil
Samuel A. Stern 83,210 (7) 0.7% 0.1%
Roger Day 76,000 (8) 0.6% 0.1%
OFFICERS & DIRECTORS
AS A GROUP (8 PERSONS) 1,646,154 (9) 12.4% 2.9%
Jacqueline Badger Mars 5,397,460 (10) 45.1% 45.1%
at the Jacqueline
Badger Mars Trust dated
Feb 5, 1975 as amended
6885 Elm St., McLean, VA 22101
Charles D. O'Kieffe 674,310 (11) 5.7% 5.7%
523 Washington Ave.,
Wilmette, IL 60091
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(1) Mr. Gunn: Includes 87,935 shares of Common Stock owned directly by Mr.
Gunn and 96,125 shares of Common Stock owned by Gunn Development Pty.
Ltd. (of which Mr. Gunn is a controlling shareholder); options to
acquire 140,000 shares of Common Stock at $1.50 per share until June
28, 2006; and options (which are subject to shareholder approval) to
acquire 150,000 shares of Common Stock at $1.09 per share until April
30, 2005. Mr. Gunn has pledged 107,310 shares to another stockholder as
security for a loan. Does not include 70,000 Stock Appreciation Rights
issued at $1.50 per share expiring June 28, 2006.
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(2) 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 and options (which are subject to shareholder approval)
to acquire 100,000 shares of Common Stock at $1.09 per share expiring
April 30, 2005.
(3) Mr. Woolard: Includes 27,500 shares of Common Stock, options to acquire
100,000 shares of Common Stock at $1.09 per share exercisable through
March 31, 2003 (which are subject to shareholder approval), and options
to acquire 150,000 shares of Common Stock at $1.50 per share
exercisable through March 31, 2003.
(4) Mr. Murphy: Includes 40,000 shares of Common Stock. Also includes
options to acquire 75,000 shares with an exercise price of $1.09 per
share expiring April 30, 2005 (which options are subject to shareholder
approval).
(5) Mr. Summerson: Represents options to acquire 75,000 shares of Common
Stock for $1.50 per share expiring June 28, 2006 and options (which are
subject to shareholder approval) to acquire 75,000 shares of Common
Stock at $1.09 per share expiring April 30, 2005. The options are held
by Glendower Investments Pty. Ltd. as trustee for a trust of which Mr.
Summerson and his family are beneficiaries.
(6) Mr. Cameron: Represents options to acquire 75,000 shares of Common
Stock at $1.50 per share expiring on June 28, 2006 and options (which
are subject to shareholder approval) to acquire 75,000 shares of Common
Stock at $1.09 per share expiring April 30, 2005. The options are held
by Jacinth Pty. Ltd., a company in which Robert Cameron, a director of
AmerAlia, is a controlling shareholder.
(7) Mr. Stern. Includes 8,210 shares issued to Mr. Stern in March 2001 to
compensate him for legal and other services rendered to AmerAlia. Also
includes options (which are subject to shareholder approval) to acquire
75,000 shares with an exercise price of $1.09 per share expiring April
30, 2005
(8) Mr. Day: Represents 16,000 shares and options to purchase 60,000 shares
of Common Stock at $1.50 per share until December 31, 2003.
(9) All officers and directors: Includes beneficial ownership of Messrs.
Gunn, van Mourik, Woolard, Murphy, Summerson, Cameron, Stern and Day as
described in notes 1, 2, 3, 4, 5, 6, 7 and 8, above. Does not include
options held by Mr. Day to acquire 40,000 shares of Common Stock at
$1.50 per share, which vest through December 31, 2003.
(10) Mars Trust: Includes 5,397,460 shares of Common Stock. See "Certain
Relationships and Related Party Transactions".
(11) Mr. O'Kieffe: Includes 567,000 shares of Common Stock owned by Mr.
O'Kieffe and 107,310 shares pledged by Mr. Gunn as security for a loan.
The above table does not include the possible effect of issuance
of up to 140,000 shares of common stock pursuant to the exercise of options at
$1.50 per share until June 28, 2006 held by persons who are neither officers,
directors, nor significant shareholders of AmerAlia.
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The Series E Stock consists of 82 shares issued at $1,000 per share.
Under the Statement of Preferences governing the Series E preferred stock, the
rights of the preferred stockholders to convert their shares expired October 31,
2000. Holders of 2,904 shares of preferred stock exercised their conversion
rights during October. The outstanding 82 shares of preferred stock, held by a
single person, have a liquidation preference of $1,000 per share plus accrued
dividends and are entitled to a dividend of 10% of the liquidation preference
when declared by the Board. The dividends are cumulative if unpaid. The
preferred stock does not have voting rights.
To the best of our knowledge, there are no arrangements, understandings
or agreements relative to the disposition of any of our securities, the
operation of which would at a subsequent date result in a change in control of
AmerAlia.
PROPOSAL 1
ELECTION OF DIRECTORS
The following seven persons are nominated as directors of AmerAlia for
a term of one year and until the election and qualification of their successors:
Bill H. Gunn Robert C.J. van Mourik John F. Woolard
Neil E. Summerson Robert A. Cameron Geoffrey C. Murphy
Samuel A. Stern
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 our Board of Directors, unless a shareholder withholds authority
to vote for any or all of the nominees. The seven nominees receiving the
greatest number of affirmative votes will be elected as directors. If any
nominee is unable to serve, or will not serve for good cause, 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.
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
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.
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First
Elected or
Name & Age Position Appointed
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Bill H. Gunn Chairman of the Board, 02/84
Age 59 President, & Chief
Executive Officer
Robert C.J. van Mourik Director, 09/90
Age 48 Executive Vice President 01/89
Chief Financial Officer,
Secretary & Treasurer
Neil E. Summerson Director 09/90
Age 53
(1,2)
Robert A. Cameron Director 09/90
Age 62
(2)
John F. Woolard Director, 10/98
Age 61 Executive Vice President 06/98
Geoffrey C. Murphy Director 06/99
Age 60
(1,2)
Samuel A. Stern Director 11/00
Age 71
Roger Day Vice President of Operations 02/99
Age 51
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(1) Members of the Compensation Committee.
(2) Members of the Audit Committee
There are no family relationships among the officers or directors. 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. None of
our directors is a director of a company having securities registered under
Section 12 or subject to Section 15(d) of the Securities Exchange Act of 1934 or
a company registered under the Investment Company Act of 1940.
Directors hold office until the next annual meeting of shareholders and
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.
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A brief summary of the business experience of each person who is
currently an officer or director of AmerAlia, and such person's service with us
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. His principal activity is now serving as
our Chairman and President.
ROBERT C.J. VAN MOURIK
Mr. van Mourik graduated in 1974 with a Bachelor of Applied Science
(Chemistry) and in 1981 with a Masters Degree in Business Administration. His
employment experience includes manufacturing, real estate development and
marketing, investment consulting and corporate reconstruction. He has served as
our Executive Vice President, Chief Financial Officer, Treasurer and Secretary
since 1989 and in September 1990, he was elected a Director. In addition to
serving as an executive officer and director of AmerAlia, Mr. Van Mourik manages
his own investments.
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 serves as one of our Directors and also is a director
of several Australian public and private companies.
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 until 1991, 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
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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 later transferred to AmerAlia. Presently, Mr. Cameron
serves as one of our Directors and for more than the past five years Mr. Cameron
has been serving as an independent consultant.
JOHN F. 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. Woolard serves as our Executive Vice President and a Director.
GEOFFREY C. MURPHY
Mr. Murphy serves as one of our Directors and 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 of Business
Administration from the Amos Tuck School of Business Administration at Dartmouth
College.
SAMUEL A. STERN
Presently, Mr. Stern serves as one of our Directors. Mr. Stern is a
founding partner in the Washington, D.C. firm of Hills and Stern and serves as
an attorney and advisor for a number of domestic and international clients. He
was a partner in Wilmer Cutler Pickering in Washington, D.C. from 1962 to 1988
and maintained an office there from 1997 to 1999. He was also, until December
1999, General Counsel, Global Energy Investors, LLC., a developer of power
projects. From July 1994 through February 1997 he was of counsel to Rogers &
Wells, another international law firm with offices in Washington, D.C. Mr. Stern
is also a director of several privately-held companies involved in energy
production, software and venture capital financing. He has extensive experience
in project financing in the United States and abroad. He holds degrees in
Economics from the University of Pennsylvania and in law from Harvard.
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 our
lease. Mr. Day also serves as one of our Directors.
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors held three formal meetings during the fiscal
year ended June 30, 2000. Each director attended all of the formal meetings
either in person or by telephone. The Board of Directors has since held seven
meetings through April 27, 2001 at which all directors were present
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either in person or by telephone. In addition, regular communications were
maintained throughout the year among all of our officers and directors and the
directors acted by unanimous consent fourteen times during fiscal 2000 and once
subsequently. We have standing audit and compensation committees. We do not have
a standing nomination committee.
Audit Committee. The audit committee is comprised of Messrs. Summerson,
Murphy and Cameron. Each of the members of the audit committee is independent as
that term is defined in Rule 4400(a)(15) of the Nasdaq listing standards. The
committee held one formal meeting during the fiscal year ended June 30, 2000 and
one meeting subsequently through April 27, 2001. The Board of Directors has
adopted a written charter for the audit committee, a copy of which is attached
hereto.
The following constitutes the report the Audit Committee has made to the Board
of Directors:
REPORT OF THE AUDIT COMMITTEE
To the Board of Directors of AmerAlia, Inc.
We hereby report to the Board of Directors of AmerAlia, Inc. that, in
connection with the financial statements for the year ended June 30, 2000, and
the anticipated preparation of the financial statements for the year ending June
30, 2001, we have
o reviewed and discussed the audited financial statements with
management;
o recommended the appointment of independent accountants;
o reviewing the arrangements and standards for and the scope of
the audit by independent accountants;
o reviewed the independence of the independent accountants;
o considered the adequacy of the system of internal accounting
controls and reviewing any proposed corrective actions;
o reviewed and monitoring our policies regarding business ethics
and conflicts of interest;
o reviewed the activities and recommendations of our accounting
department;
o discussed with the independent auditors the matters required
to be discussed by SAS 60 (Codification of Statements on
Auditing Standards, AU section 380), as may be modified or
supplemented; and
o received the written disclosures and the letter from the
independent accountants required by Independence Standards
Board Standard No. 1 (Independence Standards Board Standard
No. 1, Independence Discussions with Audit Committees), as may
be modified or supplemented, and discussed with the
independent accountant the accountant's independence.
Based on those disclosures and discussions, we are not aware of any
relationship between the independent auditors and AmerAlia that affects the
objectivity or independence of the independent auditors. Based on the
discussions and our review discussed above, we recommended to the Board of
Directors that the audited financial statements for fiscal 2000 be included in
AmerAlia's 2000 Annual Report to shareholders.
Respectfully submitted,
The AmerAlia, Inc. Audit Committee
Neil E. Summerson, Chairman
Geoffrey C. Murphy, Member
Robert A. Cameron, Member
Compensation Committee. A compensation committee comprising the
non-executive directors of the Board of Directors was formed early in 1993 and
determined the management fees payable to Messrs. Gunn, van Mourik and Woolard,
as set out below. The compensation committee now comprises Mr. Summerson and Mr
Murphy, neither has been an officer nor an employee of AmerAlia or any of our
subsidiaries during the fiscal year ended June 30, 2000, or subsequently.
Neither Mr. Summerson nor Mr. Murphy has any other direct or indirect
relationship with AmerAlia requiring disclosure by us pursuant to Item 401 of
Regulation S-K. Furthermore, no executive officer of AmerAlia served as a member
of the compensation committee (or similar committee) of another entity which
dealt with compensation paid to any member of our compensation committee, or
with which any other interlocking relationship exists.
The compensation committee held one formal meeting during the fiscal
year ended June 30, 2000 and two meetings (including two meetings by phone)
subsequently through April 27, 2001. The compensation committee has the
authority to review and make recommendations to our Board of Directors with
respect to the compensation of our executive officers.
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 AmerAlia's directors and officers and persons who own more than
10% of AmerAlia's equity securities to file reports of ownership and changes in
ownership with the Securities and Exchange Commission (the
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"SEC"). Directors, officers, and greater-than-10% shareholders are required by
SEC regulation to furnish us 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, 1998 through June 30, 2000, all filing requirements applicable to
officers, directors, and greater-than-10% shareholders were met in accordance
with the requirements of Section 16(a) except as follows:
- We are aware that Mr. Hudson, through his ownership of an interest
in THG, acquired beneficial ownership in additional securities
which have not been reported as required. Mr. Hudson may have
acquired or disposed of other shares of AmerAlia common stock or
derivative securities. We have no knowledge of his activities or
whether he complied with his reporting obligations. Mr. Hudson
ceased being subject to the reporting obligations of Section 16(a)
in April 1999, following the dissolution of The THG Partnership.
Until October 31, 2000, we were obligated to pay common stock dividends
to the holders of our Series E Preferred Stock as a class. Some of these holders
were 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.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information regarding compensation paid
to our officers during the three fiscal years ended June 30, 2000. Messrs. Gunn
and Woolard were the only executive officers receiving compensation exceeding
$100,000 during fiscal 2000, as shown below. Compensation to Mr. Gunn is paid to
Gunn Development Pty. Ltd., of which Mr. Gunn is a controlling shareholder.
We have no plans for the payment or accrual for payment of any amounts
to any executive officer in connection with his resignation, retirement, or
other termination, or change of control or change in the executive officer's
responsibilities.
We have adopted a group medical insurance plan for our employees which
includes dental coverage. This plan also provides a minimum amount of life
insurance. We have not adopted any other benefit plan for our employees. Prior
to the adoption of that plan, we reimbursed Messrs. Woolard, Gunn, and Day for
certain medical expenses and insurance premiums. We currently have no stock
ownership, other profit-sharing or pension plans, but may adopt such plans in
the future. We have no retirement plans and, therefore, have not made
contributions to any such plan on behalf of the named officers. We acquired a
vehicle during the 1994 year for Mr. Gunn's use.
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Annual Compensation Long Term Compensation
---------------------------------- --------------------------------
Awards Payout
Name and Year Salary Bonus Other --------------------------------
Position Restricted Options LTIP All Other
Awards & SAR's Payout Compensation
Bill H. Gunn
President and 2000 $150,000 -0- $14,000(a) -0- -0- -0- -0-
Chief Executive 1999 $125,000 -0- $14,000(a) -0- -0- -0- -0-
Officer 1998 $100,000 -0- $14,000(a) -0- -0- -0- -0-
=================================================================================================================
John F. Woolard, $150,000 -0- $14,000(a)(b) -0- -0- -0- -0-
Executive Vice 2000 $135,000 -0- $9,333(a)(b) -0- -0- -0- -0-
President 1999
=================================================================================================================
Notes: (a) Directors fees
(b) These fees have not been paid but have been accrued as liabilities.
OPTIONS/SAR GRANTED DURING YEAR ENDED JUNE 30, 2000
During the fiscal year ended June 30, 1999, we granted stock options,
as described below, to Roger Day who became an executive officer in April 1999.
In May 2000 as part of an arrangement to compensate directors for
significant services expended on our behalf over an extended period of time, we
granted Mr. Gunn options to purchase 150,000 shares, Mr. van Mourik options to
purchase 100,000 shares, and Messrs. Cameron and Summerson options to purchase
75,000 shares each. These options are subject to shareholder approval and expire
April 30, 2003. The exercise price was determined based upon the market price of
our shares during August 2000.
In April 2001, the Board of Directors extended this arrangement to
include additional options to other directors. As in the case with the previous
grants, these March 2001 grants are also subject to shareholder approval. These
include an option to John F. Woolard (who also an executive vice president) to
purchase 100,000 options at $1.09 per share, exercisable through March 31, 2003.
The Board also approved the issuance of options to purchase 75,000 shares at
$1.09 per share to each of Samuel A. Stern and Geoffrey C. Murphy, directors who
are not executive officers. These options are exercisable through April 30, 2005
and are also subject to shareholder approval. These options expire three months
after the holder is no longer a member of the Board of Directors. The exercise
price was in excess of market price at the time granted, and is equal to the
price of the options granted to the other directors.
2001 Directors' Incentive Plan: In March 2001, the Board of Directors
adopted a plan by which each director (who is not an employee or officer) is
granted an option to purchase 75,000 shares at a current market price when a
person joins the Board of Directors, and additional options to purchase 37,500
shares to each such director sitting at July 1 of each year. The exercise price
for these options is the average market price of our common stock during the
month of June preceding each grant date, and the options have a three-year term.
See Proposal 2.
2001 Stock Option Plan: In March 2001, the Board of Directors also
adopted a stock option plan for its officers, employees, and consultants. The
Board of Directors (through its compensation committee) can issue options to
acquire up to 1,000,000 shares to officers, employees and consultants to provide
incentives to attract, retain and motivate eligible persons whose present and
potential contributions are important to our success by offering them an
opportunity to participate in our future performance through awards of stock
options. In each case, the Board of Directors (through its compensation
committee) will determine the price at which options may be issued, the term of
the options, and the number of options to be issued. In no case may the exercise
price be less than the
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market value of the underlying shares at the time of grant. This plan is subject
to shareholder approval and at the present time, we have not granted any options
under this plan.
We have not adopted any other stock option or stock appreciation rights
plan.
AGGREGATED OPTION/SAR EXERCISES AND FISCAL YEAR-END OPTION/SAR VALUE TABLE.
No officer exercised stock options during the fiscal year ended June
30, 2000, or subsequently. The following table sets forth information regarding
the year-end value of options and Stock Appreciation Rights held by the Chief
Executive Officer and the other named officers on June 30, 2000: No other Stock
Appreciation Rights have been granted, or are held by, any such person
................................................................................................................
(a) (b) (c) (d) (e)
................................................................................................................
Name Shares acquired on Value realized # of unexercised Value of
exercise options at FY end in-the-money options
(exercisable/ at FY end
unexercisable) (exercisable/
unexercisable)
................................................................................................................
Bill H. Gunn -0- -0- 140,000 52,500
................................................................................................................
Robert C.J. van Mourik -0- -0- 75,000 28,125
................................................................................................................
John Woolard -0- -0- 250,000 143,750
................................................................................................................
Roger Day -0- -0- 40,000 15,000
................................................................................................................
................................................................................................................
(a) (b) (c) (d) (e)
................................................................................................................
Name Shares acquired on Value realized # of unexercised Value of
exercise SAR's at FY end in-the-money SAR's
(exercisable/ at FY end
unexercisable) (exercisable/
unexercisable)
................................................................................................................
Bill H. Gunn -0- -0- 70,000 -0-
................................................................................................................
LONG TERM INCENTIVE PLAN, AWARDS, DEFINED BENEFIT AND ACTUARIAL PLANS
We do not have any long term incentive compensation plans, defined
benefit plans, or actuarial plans. There are no plans to pay bonuses or deferred
compensation to our employees. We have not adopted any medical, life or other
insurance plan for our employees.
COMPENSATION OF DIRECTORS
Our directors are authorized to receive $14,000 cash compensation per
year for their services as Directors each year. In connection with certain
consulting services rendered by them, we paid or accrued liabilities to an
affiliate of Robert A. Cameron $25,972 for services rendered during the fiscal
year ended June 30, 2000, and $18,302 for the fiscal year ended June 30, 1999.
The Board of Directors has also adopted a Directors' Incentive Plan to provide
additional incentive to the directors. As described above and more fully in
Proposal 2 below, this plan is subject to shareholder approval.
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In addition, we paid Coloney Von Soosten + Associates Inc. a retainer
of $2,500 per month for financial and administrative services. Hours in excess
of 15 per month were paid to Coloney Von Soosten + Associates Inc. at the rate
of $200 per hour. This consulting agreement ended in September 2000. Geoffrey C.
Murphy is a principal of Coloney Von Soosten + Associates Inc., and had primary
responsibility for the services it provided to us Mr. Murphy became a director
in June 1999 following the annual meeting of shareholders.
In each case, Directors are reimbursed expenses incurred on behalf of
AmerAlia on a fully accountable basis.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
We do not have any compensation plan or arrangement with respect to any
executive officer which plan or arrangement results or will result from the
resignation, retirement or any other termination of such individual's employment
with AmerAlia. We do not have any plan or arrangement with respect to any such
persons which will result from a change in control or a change in the
individual's responsibilities following a change in control.
Our only employment contract is with the President of our wholly-owned
subsidiary, Natural Soda, Roger Day who is also our vice president of
operations. In April 1999, effective November 1998, we entered into a five year
employment agreement with Mr. Day who was 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. We 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 on Board approval of the
employment agreement; the remainder vest annually through November 2002. In
addition, we advanced $25,000 to Mr. Day as a loan, which amount will be
forgiven over the period of his employment. In October, 2000, we granted Mr. Day
a stock bonus of 16,000 shares of common stock.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
TRANSACTIONS WITH MANAGEMENT AND OTHERS
The following sets out information regarding transactions between
officers, directors and significant shareholders of AmerAlia during the most
recent two fiscal years and subsequently.
Corporate Loans - Loans to AmerAlia. During the fiscal years ended June
30, 1999 and 2000, certain related parties advanced loans to us as detailed in
Note 5 to the Financial Statements which states that we owed $9,333 to our
directors and affiliates at June 30, 1999 and $131,762 at June 30, 2000. This
comprised advances to us, as well as accrued but unpaid compensation and
directors fees. The following summarises our liabilities to related parties:
Related Party June 30, 2000 June 30, 1999
------------- ------------- -------------
Ahciejay Pty. Ltd. (an affiliate of Robert van Mourik) $ 51,700 $ -0-
Jacinth Pty. Ltd. (an affiliate of Robert A. Cameron) 28,729 -0-
John F. Woolard 23,333 9,333
Geoffrey C. Murphy 14,000 -0-
Neil E. Summerson 14,000 -0-
-------------- --------------
Total: $ 131,762 $ 9,333
-------------- ---------------
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In addition, at June 30, 2000 we owed John F. Woolard $50,818 for
reimbursement of expenses paid on behalf of the company. This liability was
extinguished in July 2000.
Corporate Loans - Loans from AmerAlia. As detailed in Note 2 to the
Financial Statements, we advanced funds to Gunn Development Pty. Ltd., an
associate of Mr. Gunn. The following summarizes these advances during the fiscal
years ended June 30, 1999 and 2000:
Balance due from Gunn Development at June 30, 1998: $ 17,674
Advances to Gunn Development during year: 60,508
Repayments received during year: 35,174
Net interest accrued: Nil
--------
Balance due from Gunn Development at June 30, 1999: $ 43,008
Advances to Gunn Development during year: 28,063
Repayments received during year: 14,000
Net interest accrued: Nil
--------
Balance due from Gunn Development at June 30, 2000: $ 57,071
--------
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,
we advanced short-term loans of $68,670 and $125,000, respectively to Bill H.
Gunn. These advances were evidenced by written documents and bore interest at
10% per annum. Mr. Gunn repaid the loans and interest in May 1999.
Compensation Arrangements. We entered into an employment agreement with
Roger Day, our Vice President of Operations, in November 1998, as described
above under "Executive Compensation - Employment contracts, Termination of
Employment and Change-In-Control Arrangements". This agreement was approved by
the Board of Directors in April 1999. Mr. Day is now President of Natural Soda,
Inc., our wholly owned subsidiary.
In March 2001, we issued 8,210 shares to Samuel A. Stern, a director
who has provided significant legal and other services to us in connection with
our efforts to finance our Rock School Project. Mr. Stern, a practicing lawyer,
billed us $8,702.60 for these services, at rates less than his normal hourly
rates for such services. We also issued 8,210 shares to Mr. Stern's law partner
for services he had performed. Mr. Stern has no interest in or control over the
shares issued to his law partner.
Our directors and our other officers are compensated as described above
under "Executive Compensation -- Compensation of Directors."
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. When the Mars Trust
purchased these shares, the price of our common stock was less than $1.30 per
share, as quoted by the Nasdaq SmallCap Market. 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 paid to us.
Guaranty Agreement. We entered into an agreement with the Mars Trust on
September 13, 1999 for the purpose of establishing a loan with Bank of America,
N.A. We subsequently borrowed $4.2 million from Bank of America for one year.
The Mars Trust facilitated the loan by guaranteeing its repayment in a manner
satisfactory to the bank. To compensate the Trust, we agreed to pay an amount
equal to 10% per year of the amount guaranteed, payable in shares of our
restricted common
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stock valued according to a formula based on future market prices of our common
stock. On January 20, 2000 the Mars Trust facilitated a further loan for $1
million and again, in July 2000, for $2.126 million. Additional guaranty
agreements provided for the same level of fees. In September 2000, we and the
Mars Trust amended the guaranty agreements to aggregate the three guaranties
into a single guaranty for a total loan of $7.326 million.
On December 1, 2000 we renegotiated the Mars Trust Guaranty in order to
borrow a further $1.6 million from the Bank of America and to extend the
maturity date for the combined loans to December 1, 2001. The total guaranty fee
has now increased to $1,350,000 and will be met through the issue of a number of
shares to be determined by future events. The fee is not payable until after we
announce our permanent financing or a strategic alliance for the development of
the Rock School Project. We agreed that if, during the term of the Guaranty, it
appeared that arrangements for the development of the Rock School Project are
not reasonably forthcoming, the Board of Directors will determine whether other
actions may be in the best interests of our stakeholders. We granted the Trust
security over our entire interest in Natural Soda, Inc., a wholly owned
subsidiary formed to acquire our entire interest in the Rock School Project and
the Rock School Lease, as collateral for the repayment of the entire loan and
the Trust's liability under this Guaranty.
THG Partnership Transactions. In connection with the settlement of a
pre-existing debt, we 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 former significant shareholder, Mr. Bill H. Gunn, Chairman and CEO
of AmerAlia, and Mr. Marvin H. Hudson, a former Vice President.
On October 13, 1998 THG notified us that 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. We assumed THG's liability to the ANZ
Bank in exchange for payment to us of the amount of the outstanding
indebtedness. This debt was approximately A$300,000 ($180,000). Consequently,
effective October 18, 1998, we 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;
- 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 with THG, then an affiliate,
management believed the substance of the transaction was between us and the ANZ
Bank. We believed it 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 us. Subsequently, THG dissolved.
The RIT units were liquidated in May 1999 and the debt to the ANZ Bank
repaid. We received $418,346 as total consideration for the issue of the 450
shares of Series E Preferred Stock upon liquidation of our RIT investment.
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None of our nominees or directors is, or has been, a partner or
executive officer of any investment banking firm that has performed services for
us during the last fiscal year or that we propose to have perform services
during the current year. We are not aware of any other relationship between our
directors and the company that are similar in nature and scope to those
relationships listed above except as described above.
Dividend Payments. During the fiscal year ended June 30, 2000,
dividends aggregating $298,600 became payable to the holders of the Series E
Preferred Stock. We have since paid these dividends to the holders of the Series
E Preferred Stock through the issuance of 298,600 shares of our restricted
common stock. We have paid a further $74,650 in dividends for the quarter ended
September 30, 2000 through the issuance of 74,650 shares of our common stock.
Employment Disputes. Marvin Hudson, formerly our vice president,
employee and greater-than-10% shareholder, has made certain claims against us
and has filed litigation against us as described above. We have also filed
litigation against Mr. Hudson.
PROPOSAL 2-
APPROVAL OF THE AMERALIA, INC. 2001 DIRECTORS' INCENTIVE PLAN
INTRODUCTION
The Board of Directors believes that the AmerAlia 2001 Directors'
Incentive Plan (the "Directors' Incentive Plan") is an integral part of
AmerAlia's approach to long-term incentive compensation for its directors. 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. On April 16, 2001, the
closing price for a share of common stock was $1.03.
In the past, AmerAlia has granted options to its directors on an ad hoc
basis, including those grants described in Proposal 3, below. The Board of
Directors approved and believes that it is preferable that future grants be
pursuant to plans, such as the Directors' Incentive Plan, which have been
approved by the shareholders.
PRINCIPAL PROVISIONS OF THE DIRECTORS' INCENTIVE PLAN
The principal provisions of the Directors' Incentive Plan are
summarized below. You may obtain a copy of the Directors' Incentive Plan by
writing or calling AmerAlia, Inc. at its corporate office.
GENERAL
The Directors' Incentive Plan provides for the grant of non-qualified
stock options to directors who are neither employees nor executive officers of
AmerAlia ("Outside Directors"). A total of 1,000,000 shares of common stock are
reserved and available for grant and issuance pursuant to the Directors'
Incentive Plan. The total number of shares is subject to adjustment for stock
splits, reverse stock splits, stock dividends, recapitalizations,
reclassifications and similar changes in the capital structure of AmerAlia
without consideration.
The Directors' Incentive Plan will be administered by a committee
appointed by the Board (the "Committee"), or if no such Committee is appointed
the Board will administer the Directors' Incentive Plan. As a part of the
Directors' Incentive Plan, the Board granted an option to purchase
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75,000 shares to each of its two most recently-appointed directors, Geoffrey C.
Murphy and Samuel A Stern, as described in proposal 3, below.
OPTIONS
Each Outside Director is granted an option to purchase 75,000 shares at
the current market price when that person joins the Board of Directors, and
additional options to purchase 37,500 shares to each Outside Director sitting at
July 1 of each year. The exercise price for these latter options is the average
market price of our common stock during the month of June preceding each grant
date, and the options have a three-year term. The number of shares subject to
purchase and the price per share under each outstanding option shall be adjusted
to reflect any stock dividend, stock split, recapitalization or similar event.
Options granted under the Directors' Incentive Plan are exercisable in
whole or in part from time to time commencing six months from the date of the
grant for a period as set forth in the Directors' Incentive Plan. Any options
granted will expire three years after grant, or three months after the holder
ceases to be one of our directors.
If this plan is in effect on July 1, 2001, each of the outside
directors of AmerAlia then serving will be entitled to receive an option to
purchase 37,500 shares of common stock with an exercise price equal to the
average price of our common stock in June 2001. Currently these persons include
Messrs. Summerson, Cameron, Murphy and Stern. These options will be exercisable
through June 30, 2004.
TERM OF PLAN/AMENDMENT OR TERMINATION OF PLAN
Unless earlier terminated as provided herein, the Directors' Incentive
Plan will terminate on April 16, 2011. The Board may at any time terminate or
amend the Directors' Incentive Plan in any respect, including without limitation
amendment of any form of option agreement or instrument to be executed pursuant
to the Directors' Incentive Plan. However, the Board will not, without the
approval of the shareholders of AmerAlia, amend the Directors' Incentive Plan in
any manner that requires such shareholder approval.
U.S. FEDERAL INCOME TAX CONSEQUENCES
The following discussion briefly summarizes the U.S. federal income tax
consequences of the issuance and exercise of non-qualified stock options to the
Outside Directors and AmerAlia. State and local tax consequences may differ. Tax
consequences to persons who are not citizens or residents of the United States
may also differ.
Non-Qualified Stock Options. An Outside Director generally is not
required to recognize income on the grant of a non-qualified stock option.
Instead, ordinary compensation income generally is required to be recognized on
the date the holder exercises the non-qualified stock option. In general, the
amount of ordinary compensation income required to be recognized is equal to the
excess of the aggregate fair market value of the shares on the date of exercise
over the aggregate exercise price per share paid for such shares.
Gain or Loss on Sale or Exchange of Shares. In general, gain or loss
from the sale or exchange of shares acquired upon the exercise of non-qualified
stock options will be treated as capital gain or loss, provided that the shares
are held as capital assets at the time of the sale or exchange.
Deductibility by AmerAlia. In the case of a non-qualified stock option,
at the same time the holder is required to recognize ordinary income, AmerAlia
will generally be allowed a deduction in an amount equal to the amount of
ordinary income so recognized.
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RECOMMENDATION
The Board of Directors recommends a vote FOR approval of the AmerAlia,
Inc. 2001 Directors' Incentive Plan. Approval of the Directors' Incentive Plan
requires the affirmative vote of a majority of the votes cast on this proposal
at the meeting.
PROPOSAL 3 -
APPROVAL OF STOCK OPTIONS EXERCISABLE FOR A TOTAL OF 650,000 SHARES
OF COMMON STOCK GRANTED TO CERTAIN DIRECTORS, EXECUTIVES, AND
OFFICERS OF AMERALIA.
As described above in "Executive Compensation: Options/SAR Granted
During Year Ended June 30, 2000," in May 2000, the Board of Directors granted
the options to certain of our directors, executives, and officers as part of a
plan to compensate directors for significant services expended on our behalf
over an extended period of time. Also as previously described, in April 2001,
the Board granted additional options to other directors. Because of recent
interpretations of the Nasdaq Stock Market, the Board concluded that these
options should be subject to shareholder approval. The option recipients have
each approved this condition.
- A non-qualified stock option granted to Bill H. Gunn in May
2000, which is exercisable for 150,000 shares of common stock
at an exercise price of $1.09 per share expiring on April 30,
2005. The compensation committee recommended, and the Board
approved this grant to Mr. Gunn in recognition of the fact
that he has been our Chairman and President since 1984 and
has exerted substantially his full-time efforts on our behalf
since then, at times for limited, deferred, or no
compensation. The Board approved the options to Mr. Gunn in
recognition of these services over an extended period of
time.
- A non-qualified stock option granted to Robert C.J. van
Mourik in May 2000, which is exercisable for 100,000 shares
of common stock at an exercise price of $1.09 per share
expiring on April 30, 2005. The compensation committee
recommended, and the Board approved this grant to Mr. Van
Mourik in recognition of the fact that he has been our
Executive Vice President and Chief Financial Officer since
1989 and has assisted Mr. Gunn in numerous activities,
frequently on a substantially full-time basis, also
frequently for limited, deferred, or no compensation.
- A non-qualified stock option granted to Robert A. Cameron in
May 2000, which is exercisable for 75,000 shares of common
stock at an exercise price of $1.09 per share expiring on
April 30, 2005. The compensation committee recommended, and
the Board approved this grant to Mr. Cameron in recognition
of the fact that he, also, has served as one of our directors
since 1990 and has in the past expended significant efforts
on behalf of our Rock School project, which Mr. Cameron
developed before AmerAlia acquired the project. Like Mr. Gunn
and Mr. van Mourik, Mr. Cameron performed numerous duties in
the past for us in exchange for limited, deferred, and
occasionally no compensation.
- A non-qualified stock option granted to Neil E. Summerson in
May 2000, which is exercisable for 75,000 shares of common
stock at an exercise price of $1.09 per share expiring on
April 30, 2005. The Board approved this grant to Mr.
Summerson in
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recognition of the fact that he has been a director of
AmerAlia since 1990 and, as the case with Messrs. Gunn, van
Mourik, and Cameron, he expended a significant amount of
efforts on behalf of AmerAlia. Mr. Summerson received very
little compensation from AmerAlia over the years for the
efforts he expended as a director and in a consulting
capacity.
The disinterested members of our Board of Directors approved the
foregoing options in May 2000. At that time, the disinterested members were John
F. Woolard and Geoffrey C. Murphy. In April 2001, the disinterested members of
the Board of Directors granted the following options. These options were not
contemplated at the time the disinterested members of the Board approved the
options granted in May 2000.
- A non-qualified stock option granted to John F. Woolard in
April 2001, which is exercisable for 100,000 shares of common
stock at an exercise price of $1.09 per share expiring on
March 31, 2003. The compensation committee recommended, and
the Board approved this grant to Mr. Woolard to replace
options that had been granted to him in connection with the
commencement of his services to AmerAlia in February 1998,
which expired on March 31, 2001. At the time the options
expired, the market price of our common stock made the
exercise of the expiring options unrealistic. These options
are at a higher price than the options that expired ($1.09
per share as compared to $1.00 per share). These options were
also granted in recognition of the services he has performed
for AmerAlia as an Executive Vice President and director.
- A non-qualified stock option granted to Samuel A. Stern in
April 2001, which is exercisable for 75,000 shares of common
stock at an exercise price of $1.09 per share exercisable
through April 30, 2005. The compensation committee
recommended, and the Board approved this grant to Mr. Stern
in connection with his becoming a director of AmerAlia in
November 2000. Although this grant had been discussed with
Mr. Stern and the directors before his appointment to the
Board, the Board only finalized this grant to Mr. Stern in
connection with the approval of (and as a part of) the
Directors' Incentive Plan.
- A non-qualified stock option granted to Geoffrey C. Murphy in
April 2001, which is exercisable for 75,000 shares of common
stock at an exercise price of $1.09 per share exercisable
through April 30, 2005. The compensation committee
recommended, and the Board approved this grant to Mr. Murphy
in recognition of his becoming a director of AmerAlia for no
compensation at the time, and to provide Mr. Murphy the same
incentive granted to Mr. Stern. As is the case with Mr.
Stern, although this grant had been discussed in November
2000, it was only approved in April 2001 in connection with
the approval of (and as a part of) the Directors' Incentive
Plan.
Rule 16b-3 provides an exemption from the operation of these provisions with
respect to the acquisition of options if one of the following conditions is met:
- The transaction is approved by the entire board of directors;
- The transaction is approved by a committee of the board of
directors that is composed solely of two or more
"non-employee directors" (defined generally to include any
director who is (1) not currently an officer or employee of
the company; (2) is not a consultant to the company that
receives annual compensation of $60,000 or more; and (3) does
not maintain an interest in any transaction, and is not
engaged in a business relationship, requiring disclosure in
the company's annual proxy statement.
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- The transaction is approved or ratified by the shareholders
of the company; or at least six months elapse from the date
of acquisition of the option to the date of disposition of
the option or the underlying security.
RECOMMENDATION
Therefore, in order to maintain maximum flexibility under Rule 16b-3
and to ensure compliance with Nasdaq rules and interpretations, we are proposing
that our shareholders specifically ratify the grant of the options to the
foregoing directors. The Board of Directors recommends that shareholders vote
FOR Proposal 3.
PROPOSAL 4
APPROVAL OF THE AMERALIA, INC. 2001 STOCK OPTION PLAN
INTRODUCTION
The AmerAlia, Inc. 2001 Stock Option Plan is intended to encourage
stock ownership by employees, consultants, and officers of AmerAlia, its
divisions and subsidiary corporations, so that they may acquire or increase
their proprietary interest in AmerAlia, and to encourage such employees,
consultants, and officers to remain in the employment of or associated with
AmerAlia and to put forth maximum efforts for the success of AmerAlia and its
business. On April 16, 2001, the closing price for a share of common stock was
$1.03.
The Board of Directors approved and believes that it is desirable that
the shareholders approve the AmerAlia, Inc. 2001 Stock Option Plan (the "Stock
Option Plan") which authorizes the issuance of up to 1,000,000 shares of common
stock as described below.
PRINCIPAL PROVISIONS OF THE STOCK OPTION PLAN
The principal provisions of the Stock Option Plan are summarized below.
You may obtain a copy of the Directors' Incentive Plan by writing or calling
AmerAlia, Inc. at its corporate office.
GENERAL
The Stock Option Plan provides for the grant of incentive stock
options, non-qualified stock options, and a combination thereof to employees,
consultants, and officers of AmerAlia and its subsidiaries (each a
"Participant"). The Stock Option Plan will be administered by AmerAlia's
compensation committee consisting of not less than two members of the Board of
Directors of AmerAlia or alternatively, in the absence of a compensation
committee the entire Board shall administer the Stock Option Plan.
The total number of shares reserved and available for grant and
issuance pursuant to the Stock Option Plan will be 1,000,000 shares of common
stock. The total number of shares is subject to adjustment for stock splits,
reverse stock splits, stock dividends, recapitalizations, reclassifications and
similar changes in the capital structure of AmerAlia without consideration.
OPTIONS
Under the Stock Option Plan, the Board of Directors (through its
compensation committee) may grant to each participant, incentive stock options,
non-qualified stock options, or a combination thereof according to the terms set
forth in the Stock Option Plan. In each case, the Board of Directors (through
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its compensation committee) will determine the price at which options may be
issued, the term of the options, and the number of options to be issued. In no
case may the exercise price be less than the market value of the underlying
shares at the time of grant. Options granted under the Stock Option Plan will be
exercisable in whole or in part in lots of 100 shares from time to time
commencing six months from the date of the grant for a period as set forth in
the plan.
An employee or officer, must exercise his or her options within three
months after termination (not including death, disability, retirement, or for
"cause"). If such person is terminated or removed for "cause," any and all
options expire immediately upon termination or removal. With respect to death,
disability or retirement of an optionee, the option must be exercised within one
year after the date of death, disability or retirement.
Options granted under the Stock Option Plan are not transferable by the
participant otherwise than by will or the laws of descent and distribution, and
are exercisable, during the participant's lifetime, only by the participant.
Currently, these persons who are also directors of AmerAlia are
eligible to receive option grants under this plan: Bill H. Gunn, Robert C.J. van
Mourik, and John F. Woolard. The Board has not approved any grants under the
plan to date, and has not made any commitment to do so.
TERM OF PLAN/AMENDMENT OR TERMINATION OF PLAN
Options may be granted pursuant to the Stock Option Plan from time to
time within a period of ten years from the date the Stock Option Plan is adopted
by the Board, or the date the plan is approved by the shareholders of AmerAlia,
whichever is earlier. The Board at any time and from time to time may suspend,
terminate, modify or amend the Stock Option Plan. However, the Board will not,
without the approval of the shareholders of AmerAlia, amend the Stock Option
Plan in any manner that requires such shareholder approval.
US FEDERAL INCOME TAX CONSEQUENCES
The following discussion briefly summarizes the federal income tax
consequences of the issuance and exercise of incentive stock options and
non-qualified stock options to the participants and AmerAlia. State and local
tax consequences may differ.
Incentive Stock Options. Generally, a participant will not recognize
income on the grant or exercise of an incentive stock option. However, the
difference between the exercise price and the fair market value of the stock on
the date of exercise is an adjustment item for purposes of the alternative
minimum tax. If a participant does not exercise an incentive stock option within
certain specified periods after termination of employment, the option may
terminate or the participant may recognize ordinary income on the exercise of
the incentive stock option in the same manner as on the exercise of a
non-qualified stock option, as described below.
Non-Qualified Stock Options. Non-Qualified Stock Options granted under
the Stock Option Plan receive similar treatment as under the Directors'
Incentive Plan. Please see the discussion under "Proposal 2: US Federal Income
Tax Consequences: Non-Qualified Stock Options" for an explanation.
Gain or Loss on Sale or Exchange of Shares. In general, gain or loss
from the sale or exchange of shares acquired upon the exercise of incentive and
non-qualified stock options will be treated as capital gain or loss, provided
that the shares are held as capital assets at the time of the sale or exchange.
However, if certain holding period requirements are not satisfied at the time of
the sale or
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exchange of shares acquired upon the exercise of an incentive stock option (a
"disqualifying disposition"), a participant is required to recognize ordinary
income upon such disposition equal to the difference between the option's
exercise price and the stock's fair market value at the time of option exercise.
Deductibility by AmerAlia. AmerAlia generally is not allowed a
deduction in connection with the grant or exercise of an incentive stock option.
However, if a participant is required to recognize income as a result of a
disqualifying disposition, AmerAlia will be entitled to a deduction equal to the
amount of ordinary income so recognized. Similar to the treatment under the
Directors' Incentive Plan, at the same time the participant is required to
recognize ordinary income for a non-qualified stock option (including an
incentive stock option that is treated as a non-qualified stock option as
described above), AmerAlia will generally be allowed a deduction in an amount
equal to the amount of ordinary income recognized.
RECOMMENDATION
The Board of Directors recommends a vote FOR Proposal 4: the approval
of the AmerAlia, Inc. 2001 Stock Option Plan. Approval of the Stock Option Plan
requires the affirmative vote of a majority of the votes cast on this proposal
at the meeting.
INDEPENDENT AUDITORS
The Board of Directors selected the independent accounting firm of HJ &
Associates with respect to audit of our consolidated financial statements for
the fiscal year ending June 30, 2000, as well as many prior fiscal years. A
representative of HJ & Associates is not expected to be present at the Annual
Meeting.
Audit Fees. In connection with professional services rendered for the
audit of our annual financial statements for the most recent fiscal year and the
reviews of the financial statements included in our quarterly reports filed on
Form 10-Q for the most recent fiscal year, we were billed fees in the aggregate
amount of $14,090.
Financial Information Systems Design and Implementation Fees. We do not
have an information system or a local area network. Moreover, we do not have a
hardware or software system that aggregates source data underlying the financial
statements or generates information that is significant to our financial
statements taken as a whole, nor did we engage our principal accountant to
design, develop or implement any such system.
All Other Fees. No fees other than those mentioned above were billed
for services rendered by our principal accountant for the most recent fiscal
year.
The audit committee has considered the information described in
"Financial Information Systems Design and Implementation Fees" and "All Other
Fees" above and believes that it is compatible with maintaining the principal
accountant's independence.
Our principal accountant (through its full time employees) performed
all work regarding the audit of our financial statements for the most recent
fiscal year.
PROPOSALS FROM SHAREHOLDERS
Proposals from shareholders intended to be present at the next Annual
Meeting of shareholders should be addressed to AmerAlia, Inc., Attention:
Corporate Secretary, 818 Taughenbaugh Blvd., Rifle, Colorado 81650 and we must
receive the proposals by December 15, 2001. Upon receipt of any such proposal,
we shall determine whether or not to include any such proposal in the Proxy
Statement and proxy in accordance with applicable law. It is suggested that
shareholders forward such proposals by Certified Mail-Return Receipt Requested.
After December 15, 2001, any shareholder proposal submitted outside the process
of Rule 14a-8 will be considered to be untimely.
ANNUAL REPORT TO SHAREHOLDERS
This proxy statement is being accompanied by our annual report to
shareholders. The annual report to shareholders does include our audited
financial statements.
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ANNUAL REPORT ON FORM 10-K AND QUARTERLY REPORT ON FORM 10-Q
OUR ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED JUNE 30, 2000, OUR
QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDED DECEMBER 31, 2000, AND OTHER
REPORTS FILED UNDER THE SECURITIES EXCHANGE ACT OF 1934, ARE AVAILABLE TO ANY
SHAREHOLDER AT NO COST UPON REQUEST TO: CORPORATE SECRETARY, 818 TAUGHENBAUGH
BLVD., RIFLE, COLORADO 81650, OR BY TELEPHONE: (970) 625-9134, OR THROUGH THE
INTERNET AT WWW.SEC.GOV.
OTHER MATTERS
We do not know of any other matters to be brought before the meeting.
Should any other matter requiring a vote of shareholders arise at the meeting,
the persons named in the proxy will vote the proxies in accordance with their
best judgment.
By Order of the Board of Directors:
AMERALIA, INC.
Bill H. Gunn, President
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APPENDIX A
AMERALIA, INC.
AUDIT COMMITTEE CHARTER
Adopted by the Board of Directors
effective May 6, 2000, as amended April 16, 2001
ORGANIZATION AND QUALIFICATIONS
There shall be a committee of the Board of Directors of AmerAlia, Inc. to be
known as the Audit Committee.
Independence. The Audit Committee shall be composed of a minimum of
three directors, each of whom is independent of the management of the
Corporation and is free of any relationship that, in the opinion of the Board of
Directors, would interfere with his or her exercise of independent judgment as a
member of the Audit Committee. Each member shall otherwise be considered
"independent" as defined in Nasdaq Marketplace Rule 4200(a)(14), as such rule
may be amended from time-to-time.(1)
Financial Literacy. All members of the Audit Committee must be able to
read and understand fundamental financial statements (including a balance sheet,
income statement, and cash flow statement) and shall have a working familiarity
with basic finance and accounting practices.
At least one member of the Audit Committee must have past employment
experience in finance or accounting, requisite professional certification in
accounting, or other comparable experience or background (including a current or
past position as a chief executive or financial officer or other senior officer
with financial oversight responsibilities).
Selection. The members of the committee shall be elected by the Board
of Directors at its annual
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(1) As of April 1, 2000, Nasdaq Marketplace Rule 4200(a)(14) reads as
follows: "Independent director" means a person other than an officer or employee
of the company or its subsidiaries or any other individual having a relationship
which, in the opinion of the company's board of directors, would interfere with
the exercise of independent judgement in carrying out the responsibilities of a
director. The following persons shall not be considered independent:
(A) a director who is employed by the corporation or any of its
affiliates for the current year or any of the past three years;
(B) a director who accepts any compensation from the corporation or any
of its affiliates in excess of $60,000 during the previous fiscal year,
other than compensation for board service, benefits under a tax-qualified
retirement plan, or non-discretionary compensation;
(C) a director who is a member of the immediate family of an individual
who is, or has been in any of the past three years, employed by the
corporation or any of its affiliates as an executive officer. Immediate
family includes a person's spouse, parents, children, siblings,
mother-in-law, father-in-law, brother-in-law, sister-in-law, son-in-law,
daughter-in-law, and anyone who resides in such person's home;
(D) a director who is a partner in, or a controlling shareholder or an
executive officer of, any for-profit business organization to which the
corporation made, or from which the corporation received, payments (other
than those arising solely from investments in the corporation's securities)
that exceed 5% of the corporation's or business organization's consolidated
gross revenues for that year, or $200,000, whichever is more, in any of the
past three years;
(E) a director who is employed as an executive of another entity where
any of the company's executives serve on that entity's compensation
committee.
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organizational meeting and shall serve thereafter until their successors shall
be duly elected. The members of the Audit Committee may designate a Chair by
majority of the full committee membership.
PURPOSE
The Audit Committee shall provide assistance to the corporate directors
in fulfilling their responsibility to the shareholders, potential shareholders,
and investment community relating to corporate accounting, reporting practices
of the corporation, and the quality and integrity of the financial reports of
the corporation.
In doing so, it is the responsibility of the Audit Committee to
maintain free and open means of communication between the directors, the
independent auditors, and the financial management of the corporation.
The independent auditors shall be accountable to the Audit Committee
and to the Board of Directors as representative of the shareholders.
Responsibilities
In carrying out its responsibilities, the Audit Committee believes its
policies and procedures should remain flexible in order to best react to
changing conditions; and to ensure to the directors and shareholders the
corporate accounting and reporting practices of the corporation are in
accordance with all requirements and are of the highest quality.
In carrying out these responsibilities, the Audit Committee will:
- Review and recommend to the directors the independent auditors to be
selected to audit the financial statements of the corporation and its
divisions and subsidiaries.
- Receive from the independent auditors on not less than an annual basis
a formal written statement delineating all relationships between the
auditor and AmerAlia. This statement shall be consistent with
Independence Standard Board Standard #1. (i) The Audit Committee shall
thereafter engage in a dialogue with the auditor with respect to any
disclosed relationships or services that (in the opinion of the Audit
Committee) may impact the objectivity and independence of the auditor.
(ii) The Audit Committee shall take, or recommend the Board of
Directors take, appropriate action to oversee the independence of the
outside auditor, including (without limitation) consideration of
appointment of a new firm of independent auditors.
- Meet with the independent auditors and financial management of the
corporation at a minimum of once a year (i) to review any comments or
recommendations of the independent auditors; (ii) to discuss the
matters required to be discussed by SAS 60 (Codification of Statements
on Auditing Standards, AU section 380), as may be modified or
supplemented; (iii) to review the adequacy and effectiveness of the
accounting and financial controls of the corporation; (iv) to assess
the quality of earnings; and (v) to review the annual report to
shareholders to ensure the independent auditors are satisfied with the
disclosure and content of the financial statements and other financial
information presented to the shareholders.
- Review current financial results and interim financial statements with
management and the independent auditor as the Committee deems
appropriate
- Inquire of management and the independent auditor about significant
risks or exposures and assess the steps management has taken to
minimize such risk to the company.
- Review accounting and financial human resources and succession planning
within the company.
- Submit the minutes of all meetings of the Audit Committee to, or
discuss the matters discussed at each committee meeting with, the Board
of Directors.
- Investigate any matter brought to its attention within the scope of its
duties, with the power to retain outside counsel for this purpose if,
in its judgment, that is appropriate.
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- In addition to the above-mentioned meetings and as part of the Audit
Committee's job to foster open communication, the committee should meet
at least annually with management and the independent auditors in
separate executive sessions to discuss any matters the committee or
each of these groups believe should be discussed privately.
Annual Review and Assessment
The Audit Committee will review and assess this charter and (to the
extent necessary) amend or modify this charter on not less than an annual basis.
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AMERALIA, INC.
2001 DIRECTORS' Incentive Plan
As Adopted April 16, 2001
1 PURPOSE. The purpose of this 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. Capitalized terms not defined in the text are
defined in Section 15.
2 SHARES SUBJECT TO THE PLAN.
2.1 NUMBER OF SHARES AVAILABLE. Subject to Section 2.2, the total number of
Shares reserved and available for grant and issuance pursuant to this
Plan will be 1,000,000 Shares of AmerAlia common stock. Subject to
Section 2.2, Shares that are subject to issuance upon exercise of an
Option but cease to be subject to such Option for any reason other than
exercise of such Option will again be available for grant and issuance
in connection with future Options under this Plan. At all times
AmerAlia shall reserve and keep available a sufficient number of Shares
as shall be required to satisfy the requirements of all outstanding
Options granted under this Plan.
2.2 ADJUSTMENT OF SHARES. In the event that the number of outstanding
Shares is changed by a stock dividend, recapitalization, stock split,
reverse stock split, subdivision, combination, reclassification or
similar change in the capital structure of AmerAlia without
consideration, then
(a) the number of Shares reserved for issuance under this Plan, and
(b) the Exercise Prices of and number of Shares subject to outstanding
Options, will be proportionately adjusted, subject to any required
action by the Board or the shareholders of AmerAlia and compliance with
applicable securities laws; provided, however, that fractions of a
Share will not be issued but will either be replaced by a cash payment
equal to the Fair Market Value of such fraction of a Share or will be
rounded up to the nearest whole Share, as determined by the Committee.
3 ELIGIBILITY. Outside Directors are eligible to receive options
pursuant to this Plan. A person may be granted more than one award
under this Plan.
4 OPTIONS.
4.1 OPTION GRANT. Each Outside Director will receive:
AmerAlia, Inc. 2001 Directors' Incentive Plan Page 1
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(a) an Option to purchase 75,000 shares of AmerAlia common stock when such
person is appointed to the Board and accepts such appointment; and
(b) an Option to purchase 37,500 shares of AmerAlia common stock on July 1
of each year if such person is an Outside Director on such date.
4.2 FORM OF OPTION GRANT. Each Option granted under this Plan will be
evidenced by an Option Agreement, and will be in the form of Exhibit
"A" to this Plan, such stock option agreement must be accepted by the
Outside Director within 45 days after the Date of Grant to be
effective. Any Option not accepted by such Outside Director in writing
within such 45 day period shall expire and be terminated without
further action.
4.3 DATE OF GRANT. The Date of Grant of an Option will be:
(a) with respect to Options granted pursuant to Section 4.1(a), above, the
date the Outside Director accepts his or her appointment to the Board
or the date this Plan is adopted by the Board, whichever is later; and
(b) with respect to Options granted pursuant to Section 4.1(b), above, July
1 of each year such person is an Outside Director.
4.4 EXERCISE PERIOD.
(a) Options granted to persons at the time this Plan is adopted will be
exercisable for a period commencing six months after the Date of Grant
and ending April 30, 2005.
(b) Except with respect to Options granted to persons at the time this Plan
was adopted, each option will be exercisable commencing six moths after
the Date of Grant, for three years after the Date of Grant.
4.5 EXERCISE PRICE. The Exercise Price of an Option will be:
(a) $1.09 per share for Options granted to persons at the time this Plan is
adopted;
(b) The Fair Market Value of the Shares underlying the Options during the
month immediately preceding the Date of Grant for options granted
pursuant to Section 4.1(a) hereof; and
(c) The Fair Market Value of the Shares underlying the Options during the
month of June immediately preceding the Date of Grant for options
granted pursuant to Section 4.1(b) hereof.
4.6 METHOD OF EXERCISE. Options may be exercised only by delivery to
AmerAlia of a written stock option subscription agreement (the
"Subscription Agreement") in a form
AmerAlia, Inc. 2001 Directors' Incentive Plan Page 2
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attached hereto, together with payment in full of the Exercise Price
for the number of Shares being purchased.
4.7 TERMINATION. Notwithstanding the exercise periods set forth in the
Stock Option Agreement, exercise of an Option will always be subject to
the following:
(a) If the Outside Director is Terminated for any reason except death, then
the Outside Director may exercise Options held by the Outside Director
during the period ending three (3) months after the Termination Date,
but in any event, no later than the expiration date of the Options.
(b) If the Outside Director is Terminated because of death, then the
Options held by the Outside Director may be exercised during the period
ending twelve (12) months after the Termination Date, but in any event
no later than the expiration date of the Options.
5 PAYMENT FOR OPTION EXERCISE. Payment for option exercise must be made
in the manner set forth in the Option Agreement.
6 WITHHOLDING TAXES.
6.1 WITHHOLDING GENERALLY. Whenever Shares are to be issued upon exercise
of Options granted under this Plan, AmerAlia may require the Outside
Director to remit to AmerAlia an amount sufficient to satisfy federal,
state and local withholding tax requirements prior to the delivery of
any certificate or certificates for such Shares.
6.2 STOCK WITHHOLDING. When, under applicable tax laws, an Outside Director
incurs tax liability in connection with the exercise of any Option that
is subject to tax withholding and the Outside Director is obligated to
pay AmerAlia the amount required to be withheld, the Board may in its
sole discretion allow the Outside Director to satisfy the minimum
withholding tax obligation by electing to have AmerAlia withhold from
the Shares to be issued that number of Shares having a Fair Market
Value equal to the minimum amount required to be withheld, determined
on the date that the amount of tax to be withheld is to be determined.
All elections by an Outside Director to have Shares withheld for this
purpose will be made in accordance with the requirements established by
the Committee and be in writing in a form acceptable to the Committee
7 CERTIFICATES. All certificates for Shares delivered upon the exercise
of an Option granted under this Plan will be subject to such stock
transfer orders, legends and other restrictions as the Committee may
deem necessary or advisable, including restrictions under any
applicable federal, state or foreign securities law, or any rules,
regulations and other requirements of the SEC or any stock exchange or
automated quotation system upon which the Shares may be listed or
quoted.
8 SECURITIES LAW AND OTHER REGULATORY COMPLIANCE.
AmerAlia, Inc. 2001 Directors' Incentive Plan Page 3
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8.1 COMPLIANCE WITH LAWS REQUIRED. An Option will not be effective unless
such Option is in compliance with all applicable federal and state
securities laws, rules and regulations of any governmental body, and
the requirements of any stock exchange or automated quotation system
upon which the Shares may then be listed or quoted, as they are in
effect on the Date of Grant of the Option and also on the date of
exercise or other issuance.
8.2 OBLIGATION TO ISSUE CERTIFICATES. Notwithstanding any other provision
in this Plan, AmerAlia will have no obligation to issue or deliver
certificates for Shares issuable upon exercise of an Option granted
under this Plan prior to:
(a) obtaining any approvals from governmental agencies that AmerAlia
determines are necessary or advisable; and/or
(b) completion of any registration or other qualification of such Shares
under any state or federal law or ruling of any governmental body that
AmerAlia determines to be necessary or advisable.
8.3 NO REGISTRATION OBLIGATION. AmerAlia will be under no obligation to
register the Shares with the SEC or to effect compliance with the
registration, qualification or listing requirements of any state
securities laws, stock exchange or automated quotation system, and
AmerAlia will have no liability for any inability or failure to do so.
9 NO OBLIGATION TO RETAIN. Nothing in this Plan or any Option granted
under this Plan will confer or be deemed to confer on any Outside
Director any right to continue to stand for election as a director of,
or to continue any other relationship with, AmerAlia or any Parent or
Subsidiary of AmerAlia, or limit in any way the right of AmerAlia or
any Parent or Subsidiary of AmerAlia to terminate any relationship with
the Outside Director at any time, with or without cause to the extent
such relationship is terminable.
10 CORPORATE TRANSACTIONS.
10.1 ASSUMPTION OR REPLACEMENT OF OPTIONS BY SUCCESSOR. In the event of
(a) a dissolution or liquidation of AmerAlia; or
(b) a merger or consolidation in which AmerAlia is not the surviving
corporation (other than a merger or consolidation with a wholly-owned
subsidiary, a reincorporation of AmerAlia in a different jurisdiction,
or other transaction in which there is no substantial change in the
shareholders of AmerAlia or their relative stock holdings and the
Options granted under this Plan are assumed, converted or replaced by
the successor corporation, which assumption will be binding on all
Outside Directors); or
AmerAlia, Inc. 2001 Directors' Incentive Plan Page 4
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(c) a merger in which AmerAlia is the surviving corporation but after which
the shareholders of AmerAlia immediately prior to such merger (other
than any shareholder that merges, or which owns or controls another
corporation that merges, with AmerAlia in such merger) cease to own
their shares or other equity interest in AmerAlia; or
(d) the sale of substantially all of the assets of AmerAlia,
any or all outstanding Options may be assumed, converted or replaced by
the successor corporation (if any), which assumption, conversion or
replacement will be binding on all Outside Directors. In the
alternative, the successor corporation may substitute equivalent
Options or provide substantially similar consideration to Outside
Directors as was provided to shareholders (after taking into account
the existing provisions of the Options). If such successor corporation
(if any) fails or refuses to assume or substitute Options as provided
above pursuant to a transaction described in this Subsection 10.1, such
Options will expire on the completion of such transaction.
10.2 OTHER TREATMENT OF OPTIONS. Subject to any greater rights granted to
Outside Directors under the foregoing provisions of this Section 10, in
the event of the occurrence of any transaction described in Section
10.1, any outstanding Options will be treated as provided in the
applicable agreement or plan of merger, consolidation, dissolution,
liquidation, sale of assets or other "corporate transaction."
11 ADOPTION AND SHAREHOLDER APPROVAL.
11.1 EFFECTIVENESS. This Plan was adopted by the Board pursuant to
resolutions effective the date first written above, and is effective
immediately.
11.2 SHAREHOLDER APPROVAL. The Board may, in its discretion, submit this
Plan for approval by the shareholders of AmerAlia consistent with
applicable laws.
11.3 SECTION 16 COMPLIANCE. So long as AmerAlia is subject to Section 16 of
the Exchange Act, recipients of Options must comply with the reporting
requirements of Section 16(a) and will be subject to the short-swing
profit provisions of Section 16(b) of the Exchange Act except to the
extent an exemption therefrom may be available.
12 TERM OF PLAN/GOVERNING LAW. Unless earlier terminated as provided
herein, this Plan will terminate ten (10) years from the date this Plan
is adopted by the Board. This Plan and all agreements thereunder shall
be governed by and construed in accordance with the laws of the State
of Utah.
13 AMENDMENT OR TERMINATION OF PLAN. The Board may at any time terminate
or amend this Plan in any respect, including without limitation
amendment of any form of Option Agreement or instrument to be executed
pursuant to this Plan; provided, however, that
AmerAlia, Inc. 2001 Directors' Incentive Plan Page 5
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the Board will not, without the approval of the shareholders of
AmerAlia, amend this Plan in any manner that requires such shareholder
approval.
14 NONEXCLUSIVITY OF THE PLAN. Neither the adoption of this Plan by the
Board, the submission of this Plan to the shareholders of AmerAlia for
approval, nor any provision of this Plan will be construed as creating
any limitations on the power of the Board to adopt such additional
compensation arrangements as it may deem desirable, including, without
limitation, the granting of stock options and bonuses otherwise than
under this Plan, and such arrangements may be either generally
applicable or applicable only in specific cases.
15 DEFINITIONS. As used in this Plan, the following terms will have the
following meanings:
15.1 "Board" means the Board of Directors of AmerAlia.
15.2 "Committee" means the committee appointed by the Board to administer
this Plan, or if no such committee is appointed, the Board.
15.3 "Date of Grant" means the date on which an Option is granted pursuant
to Section 4.3.
15.4 "Exchange Act" means the Securities Exchange Act of 1934, as amended.
15.5 "Exercise Price" means the price at which a holder of an Option may
purchase the Shares issuable upon exercise of the Option pursuant to
Section 4.5.
15.6 "Fair Market Value" means, as of any date, the value of a share of
AmerAlia's common stock determined as follows:
(a) if such common stock is then quoted on the Nasdaq National Market, its
average closing price on the Nasdaq National Market for the twenty
trading days preceding the date of determination as reported in The
Wall Street Journal;
(b) if such common stock is publicly traded and is then listed on a
national securities exchange, its average closing price for the twenty
trading days preceding the date of determination on the principal
national securities exchange on which the common stock is listed or
admitted to trading as reported in The Wall Street Journal;
(c) if such common stock is publicly traded but is not quoted on the Nasdaq
National Market nor listed or admitted to trading on a national
securities exchange, the average of the closing prices for the twenty
trading days preceding the date of determination as reported in The
Wall Street Journal or if not reported in The Wall Street Journal, in
another source for stock price quotations selected by the Committee in
its sole discretion
(d) if none of the foregoing is applicable, by the Committee in good faith.
AmerAlia, Inc. 2001 Directors' Incentive Plan Page 6
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15.7 "Option" means an award of an option to purchase Shares pursuant to
Section 4.
15.8 "Option Agreement" means, with respect to each Option, the signed
written agreement between AmerAlia and the Outside Director setting
forth the terms and conditions of the Option.
15.9 "Outside Director" means any director who is not;
(a) a current employee of AmerAlia or any Parent or Subsidiary of AmerAlia;
(b) a former employee of AmerAlia or any Subsidiary of AmerAlia who is
receiving compensation for prior services (other than benefits under a
tax-qualified pension plan);
(c) a current or former officer of AmerAlia or any Subsidiary of AmerAlia;
or
(d) currently receiving compensation for personal services in any capacity,
other than as a director, from AmerAlia or any Subsidiary of AmerAlia.
15.10 "Plan" means this plan, as amended from time to time.
15.11 "SEC" means the Securities and Exchange Commission.
15.12 "Shares" means shares of AmerAlia's Common Stock reserved for issuance
under this Plan, as adjusted pursuant to Section 2, and any successor
security.
15.13 "Subsidiary" means any corporation (other than AmerAlia) in an unbroken
chain of corporations beginning with AmerAlia if each of the
corporations other than the last corporation in the unbroken chain owns
stock possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.
15.14 "Termination" or "Terminated" means, or purposes of this Plan with
respect to an Outside Director, that the Outside Director dies,
resigns, is not re-elected when standing for re-election, or is removed
by the shareholders from his or her position as an Outside Director of
AmerAlia or a Subsidiary of AmerAlia. The date on which any of the
foregoing events takes place shall be the "Termination Date".
This Plan was approved by the Board of Directors of AmerAlia at a
meeting held on April 16, 2001.
AmerAlia, Inc.
Seal By: ___________________________
Bill H. Gunn, President
AmerAlia, Inc. 2001 Directors' Incentive Plan Page 7
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ATTEST: ___________________________________
Robert C.J. van Mourik, Secretary
AmerAlia, Inc. 2001 Directors' Incentive Plan Page 8
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AMERALIA, INC.
2001 STOCK OPTION PLAN
As Adopted April 16, 2001
1. Purpose; Restrictions on Amount Available Under the Plan. The
AmerAlia, Inc. 2001 Stock Option Plan (the "Plan") is intended to encourage
stock ownership by employees, consultants, officers, and directors (who are also
employees or officers) of AmerAlia, Inc. ("AmerAlia"), its divisions and
Subsidiary Corporations, so that they may acquire or increase their proprietary
interest in AmerAlia, and to encourage such employees, consultants, officers and
directors to remain in the employment of or associated with AmerAlia and to put
forth maximum efforts for the success of AmerAlia and its business. It is
further intended that options granted by the Committee pursuant to Section 6 of
this Plan shall constitute "incentive stock options" ("Incentive Stock Options")
within the meaning of Section 422 of the Internal Revenue Code, and the
regulations issued thereunder, and options granted by the Committee pursuant to
Section 7 of this Plan shall constitute "non-qualified stock options"
("Non-qualified Stock Options").
2. Definitions. As used in this Plan, the following words and phrases
shall have the meanings indicated:
(a) "Disability" shall mean an Optionee's inability to engage
in any substantial gainful activity by reason of any medically determinable
physical or mental impairment that can be expected to result in death or that
has lasted or can be expected to last for a continuous period of not less than
12 months.
(b) "Employer Corporation" is the entity which employs the
person granted options under this Plan.
(c) "Fair Market Value" means, as of any date, the value of a
share of AmerAlia's common stock determined as follows:
(i) if such common stock is then quoted on the Nasdaq
National Market, its average closing price on the Nasdaq National Market for the
twenty trading days preceding the date of determination as reported in The Wall
Street Journal;
(ii) if such common stock is publicly traded and is
then listed on a national securities exchange, its average closing price for the
twenty trading days preceding the date of determination on the principal
national securities exchange on which the common stock is listed or admitted to
trading as reported in The Wall Street Journal;
(iii) if such common stock is publicly traded but is
not quoted on the Nasdaq National Market nor listed or admitted to trading on a
national securities exchange, the average of the closing prices for the twenty
trading days preceding the date of determination as reported in The Wall Street
Journal or if not reported in The Wall Street Journal, in another source for
stock price quotations selected by the Committee in its sole discretion; or
(iv) if none of the foregoing is applicable, by the
Committee in good faith.
37
(d) "Internal Revenue Code" shall mean the United States
Internal Revenue Code of 1986, as amended from time to time (codified at Title
26 of the United States Code), and any successor legislation.
(e) "Parent Corporation" shall mean any corporation (other
than the Employer Corporation) in an unbroken chain of corporations ending with
the Employer Corporation if, at the time of granting an Option, each of
AmerAlias other than the Employer Corporation owns stock possessing 50% or more
of the total combined voting power of all classes of stock in one of the other
corporations in such chain.
(f) "Subsidiary Corporation" shall mean any corporation (other
than the Employer Corporation) in an unbroken chain of corporations beginning
with the Employer Corporation if, at the time of granting an Option, each of
AmerAlias other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
3. Administration.
(a) The Plan shall be administered by the Compensation
Committee (the "Committee"), consisting of not less than two members of the
Board of Directors of AmerAlia (the "Board") or alternatively, in the absence of
a designated and qualified committee, the entire Board shall serve as the
Committee.
(b) The Committee shall have the authority in its discretion,
subject to and not inconsistent with the express provisions of the Plan, to
administer the Plan and to exercise all the powers and authorities either
specifically granted to it under the Plan or necessary or advisable in the
administration of the Plan, including (without limitation): the authority to
grant Options; to determine which Options shall constitute Incentive Stock
Options and which Options shall constitute Non-qualified Stock Options; to
determine the purchase price of the shares of Common Stock covered by each
Option (the "Option Price"); to determine the persons to whom, and the time or
times at which, Options shall be granted; to determine the number of shares to
be covered by each Option; to determine Fair Market Value per share; to
interpret the Plan; to prescribe, amend and rescind rules and regulations
relating to the Plan; to determine the terms and provisions of the Option
Agreements (which need not be identical) entered into in connection with Options
granted under the Plan; and to make all other determinations deemed necessary or
advisable for the administration of the Plan. The Committee may delegate to one
or more of its members or to one or more agents such administrative duties as it
may deem advisable, and the Committee or any person to whom it has delegated
duties as aforesaid may employ one or more persons to render advice with respect
to any responsibility the Committee or such person may have under the Plan.
(c) The Board shall fill all vacancies, however caused, in the
Committee. The Board may from time to time appoint additional members to the
Committee, and may at any time
AMERALIA, INC. 2001 STOCK OPTION PLAN PAGE 2
38
remove one or more Committee members and substitute others. One member of the
Committee shall be selected by the Board as chairman. The Committee shall hold
its meetings at such times and places as it shall deem advisable. All
determinations of the Committee shall be made by not less than a majority of its
members either present in person or participating by conference telephone at a
meeting or by written consent. The Committee may appoint a secretary and make
such rules and regulations for the conduct of its business as it shall deem
advisable, and shall keep minutes of its meetings. The secretary need not be a
member of the Committee or a member of the Board.
(d) No member of the Board or Committee shall be liable for
any action taken or determination made in good faith with respect to the Plan or
any Option granted hereunder.
4. Eligibility.
(a) Subject to certain limitations hereinafter set forth,
Options may be granted to employees, consultants, officers, and directors (who
are also employees or officers) of AmerAlia or its present or future divisions
and Subsidiary Corporations, provided such persons meet minimum requirements, if
any, as may be established by the Committee, in its discretion. In determining
the persons to whom Options shall be granted and the number of shares to be
covered by each Option, the Committee shall take into account the duties of the
respective persons, their present and potential contributions to the success of
AmerAlia and such other factors as the Committee shall deem relevant in
connection with accomplishing the purpose of the Plan. A person to whom an
Option has been granted hereunder is sometimes referred to herein as an
"Optionee."
(b) An Optionee shall be eligible to receive more than one
grant of an Option during the term of the Plan, but only on the terms and
subject to the restrictions hereinafter set forth.
5. Stock.
(a) The stock subject to Options hereunder shall be shares of
AmerAlia's common stock, $.01 par value per share ("Common Stock"). Such shares
may, in whole or in part, be authorized but unissued shares or shares that shall
have been or that may be reacquired by AmerAlia. The aggregate number of shares
of Common Stock as to which Options may be granted from time to time under the
Plan shall not exceed 1,000,000. The limitations established by the preceding
sentences shall be subject to adjustment as provided in Section 8(i) hereof.
(b) In the event that any outstanding Option under the Plan
for any reason expires or is terminated without having been exercised in full,
the shares of Common Stock allocable to the unexercised portion of such Option
(unless the Plan shall have been terminated) shall become available for
subsequent grants of options under the Plan.
AMERALIA, INC. 2001 STOCK OPTION PLAN PAGE 3
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6. Incentive Stock Options.
(a) Options granted pursuant to this Section 6 are intended to
constitute Incentive Stock Options and shall be subject to the following special
terms and conditions, in addition to the general terms and conditions specified
in Section 8 hereof. Consultants who are not employees of AmerAlia shall not be
entitled to receive Incentive Stock Options.
(b) The aggregate Fair Market Value (determined as of the date
the Incentive Stock Option is granted) of the shares of Common Stock, with
respect to which Incentive Stock Options granted under this and any other plan
of AmerAlia or any Parent Corporation or Subsidiary Corporation are exercisable
for the first time by an Optionee during any calendar year, may not exceed the
amount set forth in Section 422(d) of the Internal Revenue Code.
(c) Incentive Stock Options granted under this Plan are
intended to satisfy all requirements for incentive stock options under the
Internal Revenue Code and the Treasury Regulations thereunder and,
notwithstanding any other provision of this Plan, the Plan and all Incentive
Stock Options granted under it shall be so construed, and all contrary
provisions shall be so limited in scope and effect and, to the extent they
cannot be so limited, they shall be void.
7. Non-qualified Stock Options. Options granted pursuant to this
Section 7 are intended to constitute Non-qualified Stock Options and shall be
subject only to the general terms and conditions specified in Section 8 hereof.
8. Terms and Conditions of Options. Each Option granted pursuant to the
Plan shall be evidenced by a written Option Agreement between AmerAlia and the
Optionee, which agreement shall comply with and be subject to the following
terms and conditions:
(a) Number of Shares. Each Option Agreement shall state the
number of shares of Common Stock to which the Option relates.
(b) Type of Option. Each Option Agreement shall specifically
identify the portion, if any, of the Option which constitutes an Incentive Stock
Option and the portion, if any, which constitutes a Non-qualified Stock Option.
(c) Option Price. (i) Each Option Agreement shall state the
Option Price, which (except as otherwise set forth in paragraphs 8(c)(ii)hereof)
shall be not less than the Fair Market Value per share on the date of grant of
the Option.
(ii) Any Incentive Stock Option granted under the
Plan to a person owning more than ten percent of the total combined voting power
of the Common Stock shall be at a price of not less than 110% of the Fair Market
Value per share on the date of grant of the Option.
AMERALIA, INC. 2001 STOCK OPTION PLAN PAGE 4
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(iii) The Option Price shall be subject to adjustment
as provided in Section 8(i) hereof.
(iv) The date on which the Committee adopts a
resolution expressly granting an Option shall be considered the day on which
such Option is granted.
(d) Term of Options. (i) Options shall be exercisable over the
exercise period as and at the times the Committee, in its sole discretion, may
determine, as reflected in the Option Agreement, provided however, the exercise
period does not exceed five years from the date of grant of the Option.
(ii) The Committee shall have the authority to
accelerate the exercisability of any outstanding Option at such time and under
such circumstances as it, in its sole discretion, deems appropriate.
(iii) The exercise period shall be subject to earlier
termination as provided in Sections 8(f) and 8(g) hereof, and furthermore, shall
be terminated upon surrender of the Option by the holder thereof if such
surrender has been authorized in advance by the Committee.
(e) Method of Exercise and Medium and Time of Payment.
(i) An Option may be exercised as to any or all full
shares of Common Stock as to which the Option has become exercisable, provided
however, that an Option may not be exercised at any one time as to fewer than
100 shares (or such number of shares as to which the Option is then exercisable
if such number of shares is less than 100).
(ii) Each exercise of an Option granted hereunder,
whether in whole or in part, shall be by written notice to the Secretary of
AmerAlia designating the number of shares as to which the Option is exercised,
and shall be accompanied by payment in full of the Option Price (in cash or
shares) for the number of shares so designated, together with any written
statements or investment letter required by any applicable securities laws.
(iii) The Option Price shall be paid in cash, in
shares of Common Stock having a Fair Market Value as determined by the Board of
Directors equal to such Option Price or in a combination of cash and shares of
the Common Stock, and (subject to approval of the Board of Directors) may be
effected in whole or in part (A) with monies received from AmerAlia at the time
of exercise as a compensatory cash payment, or (B) with monies borrowed from
AmerAlia pursuant to repayment terms and conditions as shall be determined from
time to time by the Committee, in its discretion, separately with respect to
each exercise of Options and each Optionee, provided however, that each such
method and time for payment and each such borrowing and terms and conditions of
repayment shall be permitted by and be in compliance with applicable law.
AMERALIA, INC. 2001 STOCK OPTION PLAN PAGE 5
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(iv) The Board of Directors shall have the sole and
absolute discretion to determine whether or not property other than cash or
shares of Common Stock may be used to purchase the shares of Common Stock
hereunder and, if so, to determine the value of the property received.
(f) Termination. Except as provided in this Section 8(f) and
in Section 8(g) hereof, an Option may not be exercised unless the Optionee is
then an employee or consultant or officer or a director (who is also an employee
of officer) to AmerAlia or a division or Subsidiary Corporation thereof (or a
corporation or a Parent or Subsidiary Corporation of such corporation issuing or
assuming the option in a transaction to which Section 424(a) of the Internal
Revenue Code applies), and unless the Optionee has remained continuously as such
an employee or consultant or officer or director to AmerAlia since the date of
grant of the Option.
(i) If the Optionee ceases to be an employee or
consultant or officer or director (who is also an employee or officer) to
AmerAlia, its divisions or Subsidiary Corporations (other than by reason of
death, Disability or retirement or termination for "Cause," as Cause may be
defined in any applicable agreement or in the good faith determination of the
Board of Directors), all Options of such Optionee that are exercisable at the
time of such cessation may, unless earlier terminated in accordance with their
terms, be exercised within three months after such cessation, provided however,
that if the employment or consulting relationship of an Optionee shall terminate
for Cause all Options theretofore granted to such Optionee shall, to the extent
not theretofore exercised, terminate immediately upon such termination or
removal.
(ii) Nothing in the Plan or in any Option granted
pursuant hereto shall confer upon an individual any right to continue in the
employment of AmerAlia or any of its divisions or Subsidiary Corporations or
interfere in any way with the right of AmerAlia or its shareholders or any such
division or Subsidiary Corporation to terminate such employment or other
relationship between the individual and AmerAlia or any of its divisions and
subsidiary corporations.
(g) Death, Disability or Retirement of Optionee. If an
Optionee shall die while employed by, or a consultant to, AmerAlia or a
Subsidiary Corporation thereof, or within three months after the termination of
such Optionee's employment or consulting relationship, other than termination
for Cause, or if the Optionee's employment or consulting relationship, shall
terminate by reason of Disability or retirement, all Options theretofore granted
to such Optionee (whether or not otherwise exercisable) may, unless earlier
terminated in accordance with their terms, be exercised by the Optionee or by
the Optionee's estate or by a person who acquired the right to exercise such
Option by bequest or inheritance or otherwise by reason of the death or
Disability of the Optionee, at any time within one year after the date of death,
Disability or retirement of the Optionee.
(h) Nontransferability. (i) Options granted under the Plan
shall not be transferable other than by will or by the laws of descent, and
Options may be exercised, during the lifetime of the Optionee, only by the
Optionee and thereafter only by his legal representative.
AMERALIA, INC. 2001 STOCK OPTION PLAN PAGE 6
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(ii) Any attempted sale, pledge, assignment,
hypothecation or other transfer of an option contrary to the provisions hereof
and the levy of any execution, attachment or similar process upon an Option
shall be null and void and without force or effect and shall result in automatic
termination of the Option.
(iii) (A) As a condition to the transfer of any
shares of Common Stock issued upon exercise of an Option granted under this
Plan, AmerAlia may require an opinion of counsel, satisfactory to AmerAlia, to
the effect that such transfer will not be in violation of the Securities Act of
1933 or any other applicable securities laws or that such transfer has been
registered under federal and all applicable state securities laws. (B) Further,
AmerAlia shall be authorized to refrain from delivering or transferring shares
of Common Stock issued under this Plan until the Board of Directors determines
that such delivery or transfer will not violate applicable securities laws and
the Optionee has tendered to AmerAlia any federal, state or local tax owed by
the Optionee as a result of exercising the Option, or disposing of any Common
Stock, when AmerAlia has a legal liability to satisfy such tax. (C) AmerAlia
shall not be liable for damages due to delay in the delivery or issuance of any
stock certificate for any reason whatsoever, including, but not limited to, a
delay caused by listing requirements of any securities exchange or any
registration requirements under the Securities Act of 1933, the Securities
Exchange Act of 1934, or under any other state or federal law, rule or
regulation. (D) AmerAlia is under no obligation to take any action or incur any
expense in order to register or qualify the delivery or transfer of shares of
Common Stock under applicable securities laws or to perfect any exemption from
such registration or qualification. (E) Furthermore, AmerAlia will have no
liability to any Optionee for refusing to deliver or transfer shares of Common
Stock if such refusal is based upon the foregoing provisions of this Paragraph.
(i) Effect of Certain Changes.
(i) If there is any change in the number of shares of
Common Stock through the declaration of stock dividends, or through
recapitalization resulting in stock splits, or combinations or exchanges of such
shares, the number of shares of Common Stock available for Options, the number
of such shares covered by outstanding Options, and the price per share of such
Options, shall be proportionately adjusted by the Committee to reflect any
increase or decrease in the number of issued shares of Common Stock, provided
however, that any fractional shares resulting from such adjustment shall be
eliminated.
(ii) In the event of the proposed dissolution or
liquidation of AmerAlia, in the event of any corporate separation or division,
including, but not limited to, split-up, split-off or spin-off, or in the event
of a merger or consolidation of AmerAlia with another corporation, the Committee
may (but is not obligated to) provide that the holder of each Option then
exercisable shall have the right to exercise such Option (at its then Option
Price) solely for the kind and amount of shares of stock and other securities,
property, cash or any combination thereof receivable upon such dissolution,
liquidation, or corporate separation or division, or merger or consolidation by
a holder of the number of shares of Common Stock for
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which such Option might have been exercised immediately prior to such
dissolution, liquidation, or corporate separation or division, merger or
consolidation; or the Committee may provide, in the alternative, that each
Option granted under the Plan shall terminate as of a date to be fixed by the
Committee; provided, however, that not less than 30 days' written notice of the
date so fixed shall be given to each Optionee, who shall have the right, during
the period of 30 days preceding such termination, to exercise the Options as to
all or any part of the shares of Common Stock covered thereby. In such case the
Committee may (but is not obligated to) provide that Options not otherwise
exercisable may be exercised in such circumstances.
(iii) Paragraph (ii) of this Section 8(i) shall not
apply to a merger or consolidation in which AmerAlia is the surviving
corporation and shares of Common Stock are not converted into or exchanged for
stock, securities of any other corporation, cash or any other thing of value.
Notwithstanding the preceding sentence, in case of any consolidation or merger
of another corporation into AmerAlia in which AmerAlia is the surviving
corporation and in which there is a reclassification or change (including a
change to the right to receive cash or other property) of the shares of Common
Stock (other than a change in par value, or from par value to no par value, or
as a result of a subdivision or combination, but including any change in such
shares into two or more classes or series of shares), the Committee may provide
that the holder of each Option then exercisable shall have the right to exercise
such Option solely for the kind and amount of shares of stock and other
securities (including those of any new direct or indirect parent of AmerAlia),
property, cash or any combination thereof receivable upon such reclassification,
change, consolidation or merger by the holder of the number of shares of Common
Stock for which such Option might have been exercised.
(iv) In the event of a change in the Common Stock of
AmerAlia as presently constituted, which is limited to a change of all of its
authorized shares with par value into the same number of shares with a different
par value or without par value, the shares resulting from any such change shall
be deemed to be the Common Stock within the meaning of the Plan.
(v) To the extent that the foregoing adjustments
relate to stock or securities of AmerAlia, such adjustments shall be made by the
Committee, whose determination in that respect shall be final, binding and
conclusive, provided that each Incentive Stock Option granted pursuant to this
Plan shall not be adjusted in a manner that causes such option to fail to
continue to qualify as an Incentive Stock Option within the meaning of Section
422 of the Internal Revenue Code.
(vi) Except as previously expressly provided in this
Section 8(i), this Optionee shall have no rights by reason of any subdivision or
consolidation of shares of stock of any class or the payment of any stock
dividend or any other increase or decrease in the number of shares of stock of
any class or by reason of any dissolution, liquidation, merger, or consolidation
or spin-off of assets or stock of another corporation; and any issue by AmerAlia
of shares of stock of any class, or securities convertible into shares of stock
of any class, shall not affect, and no adjustment by reason thereof shall be
made with respect to, the number or price of
AMERALIA, INC. 2001 STOCK OPTION PLAN PAGE 8
44
shares of Common Stock subject to the Option. The grant of an Option pursuant to
the Plan shall not affect in any way the right or power of AmerAlia to make
adjustments, reclassifications, reorganizations or changes of its capital or
business structures or to merge or to consolidate or to dissolve, liquidate or
sell, or transfer all or part of its business or assets.
(j) Rights as Shareholder - Non-Distributive Intent.
(i) Neither a person to whom an Option is granted,
nor such person's legal representative, heir, legatee or distributee, shall be
deemed to be the holder of, or to have any rights of a holder with respect to,
any shares subject to such Option, until after the Option is exercised and the
shares are issued to the person exercising such Options.
(ii) Upon exercise of an Option at a time when there
is no registration statement in effect under the Securities Act of 1933 relating
to the shares issuable upon exercise and available for delivery of a prospectus
meeting the requirements of Section 10(a)(3) of said Act, shares may be issued
to the Optionee only if the Optionee represents and warrants in writing to
AmerAlia that the shares purchased are being acquired for investment and not
with a view to the distribution thereof.
(iii) No shares shall be issued upon the exercise of
an Option unless and until there shall have been compliance with any then
applicable requirements of the Securities and Exchange Commission, or any other
regulatory agencies having jurisdiction over AmerAlia.
(iv) No adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other property) or
distribution or other rights for which the record date is prior to the date such
stock certificate is issued, except as provided in Section 8(i) hereof.
(k) Other Provisions. The Option Agreements authorized under
the Plan shall contain such other provisions, including, without limitation, (i)
the imposition of restrictions upon the exercise of an Option, and (ii) in the
case of an Incentive Stock Option, the inclusion of any condition not
inconsistent with such Option qualifying as an Incentive Stock Option, as the
Committee shall deem advisable.
(l) Leave of Absence. The Committee shall be entitled to make
such rules, regulations, and determinations as it deems appropriate under the
Plan with respect to any leave of absence taken by the recipient of any Option
awarded hereunder. Without limiting the generality of the foregoing, the
Committee shall be entitled to determine:
(i) whether or not any such leave of absence shall
constitute a termination of employment within the meaning of the Plan; and
(ii) the impact, if any, of any such leave of absence
on awards under the Plan theretofore made to any recipient who takes such leave
of absence.
AMERALIA, INC. 2001 STOCK OPTION PLAN PAGE 9
45
(m) Non-Uniform Determinations. The Committee's determinations
under the Plan (including, without limitation, determination of the persons to
receive awards, the form, amount and timing of such awards, the terms and
provisions of such awards, and the agreements evidencing same) need not be
uniform and may be made selectively among persons who receive, or who are
eligible to receive, awards under the Plan, whether or not such persons are
similarly situated.
9. Agreement by Optionee Regarding Withholding Taxes. If the Committee
shall so require, as a condition of exercise, each Optionee shall agree that:
(a) No later than the date of exercise of any Option granted
hereunder, the Optionee will pay to AmerAlia or make arrangements satisfactory
to the Committee regarding payment of any federal, state or local taxes of any
kind required by law to be withheld upon the exercise of such Option;
(b) AmerAlia shall, to the extent permitted or required by
law, have the right to deduct federal, state and local taxes of any kind
required by law to be withheld upon the exercise of such Option from any payment
of any kind otherwise due to the Optionee. For withholding tax purposes, the
shares of Common Stock shall be valued on the date the withholding obligation is
incurred; and
(c) AmerAlia shall not be obligated to advise any Optionee of
the existence of any such tax or the amount which AmerAlia will be so required
to withhold.
10. Agreement by Optionee With Respect to Section 16. If the Optionee
is subject to the reporting requirements of Section 16(a) of the Securities
Exchange Act of 1934, as amended, the grant of this option shall not be
effective until such person complies with the reporting requirements of Section
16(a).
11. Term of Plan. Options may be granted pursuant to the Plan from time
to time within a period of ten years from the date the Plan is adopted by the
Board, or the date the Plan is approved by the shareholders of AmerAlia,
whichever is earlier.
12. Amendment and Termination of the Plan.
(a) (i) The Board at any time and from time to time may
suspend, terminate, modify or amend the Plan;
(ii) provided, however, that any amendment that would: (A)
materially increase the benefits accruing to participants under the Plan, or (B)
increase the number of shares of Common Stock as to which Options may be granted
under the Plan or (C) materially modify the requirements as to eligibility for
participation in the Plan, shall be subject to the
AMERALIA, INC. 2001 STOCK OPTION PLAN PAGE 10
46
approval of the holders of a majority of the shares of Common Stock of AmerAlia
presented or represented, and entitled to vote at a duly constituted and held
meeting of shareholders;
(iii) provided further that any such increase or
modification that may result from adjustments authorized by Section 8(i) hereof
shall not require such approval.
(b) Except as provided in Section 8 hereof, no suspension,
termination, modification or amendment of the Plan may adversely affect any
Option previously granted, unless the written consent of the Optionee is
obtained.
13. Approval of Shareholders. The Plan shall take effect upon its
adoption by the Board but shall be subject to the approval of the holders of the
shares of Common Stock of AmerAlia present or represented and entitled to vote
at a duly constituted and held meeting of shareholders, which approval must
occur within 12 months after the date the Plan is adopted by the Board. If the
shareholders do not approve this plan within the 12 month period set forth in
the preceding sentence, all Incentive Stock Options granted hereunder will be
converted to Non-Qualified Stock Options and the Committee will not be able to
issue Incentive Stock Options thereafter.
14. Assumption. The terms and conditions of any outstanding Options
granted pursuant to this Plan shall be assumed by, be binding upon and inure to
the benefit of any successor corporation to AmerAlia and shall continue to be
governed by, to the extent applicable, the terms and conditions of this Plan.
Such successor corporation shall not otherwise be obligated to assume this Plan.
15. Termination of Right of Action. Every right of action arising out
of or in connection with the Plan by or on behalf of AmerAlia or of any
Subsidiary, or by any shareholder of AmerAlia or of any Subsidiary against any
past, present or future member of the Board, or against any employee, or by an
employee (past, present or future) against AmerAlia or any Subsidiary, will,
irrespective of the place where an action may be brought and irrespective of the
place of residence of any such shareholder or employee, cease and be barred by
the expiration of three years from the date of the act or omission in respect of
which such right of action is alleged to have risen.
16. Tax Litigation. AmerAlia shall have the right, but not the
obligation, to contest, at its expense, any tax ruling or decision,
administrative or judicial, on any issue which is related to the Plan and which
the Board believes to be important to holders of Options issued under the Plan
and to conduct any such contest or any litigation arising therefrom to a final
decision.
AMERALIA, INC. 2001 STOCK OPTION PLAN PAGE 11
47
17. Adoption.
(a) This Plan was approved by the Board of Directors of
AmerAlia at a meeting on April 16, 2001.
(b) This Plan was approved by the shareholders of AmerAlia at
a meeting on ____________, 2001.
AmerAlia, Inc.
Seal
ATTEST: By:
-----------------------------
Bill H. Gunn, President
- -------------------------------------
Robert C.J. van Mourik, Secretary
AMERALIA, INC. 2001 STOCK OPTION PLAN PAGE 12
48
PROXY
AMERALIA, INC.
818 TAUGHENBAUGH BLVD.
RIFLE, COLORADO 81650
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 April
27, 2001, at the Annual Meeting of Shareholders to be held on June 21, 2001 and
at any adjournments or postponements thereof.
1 ELECTION OF DIRECTORS
[ ] FOR all nominees [ ] WITHHOLD AUTHORITY
listed below to vote for all nominees
(except as marked to listed below
the contrary below)
(INSTRUCTION) To withhold authority to vote for any individual nominee mark
the box next to the nominee's name below.
[ ] Bill H. Gunn [ ] Robert C.J. van Mourik [ ] John F. Woolard
[ ] Neil E. Summerson [ ] Robert A. Cameron [ ] Geoffrey C. Murphy
[ ] Samuel A. Stern
2. AMERALIA, INC. 2001 DIRECTORS' INCENTIVE PLAN
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. STOCK OPTIONS EXERCISABLE FOR A TOTAL OF 650,000 SHARES OF COMMONS STOCK
GRANTED TO CERTAIN DIRECTORS, AND EXECUTIVE OFFICERS OF AMERALIA.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(over)
49
4. AMERALIA,INC. 2001 STOCK OPTION PLAN
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
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.
Dated , 2001
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Signature
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Signature (if held jointly)
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Title
Please sign exactly as name appears hereon.
When shares are held by joint tenants, both
should sign. When signing as an 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.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
IN THE ENCLOSED ENVELOPE