UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14f-1
SCHEDULE 14F-1 INFORMATION
Information Statement Pursuant to Section 14(f)
of the Securities and Exchange Act of 1934 and
Securities and Exchange Rule 14f-1
ART DESIGN, INC.
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(Name of Registrant as Specified in its Charter)
Colorado 000-52690 86-1061005
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(State or other (Commission File (I.R.S. Employer
jurisdiction Number) Identification No.)
of Incorporation)
11044 Research Blvd., Suite A-200
Austin, TX 78759
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(Address of principal executive offices)
Company's telephone number, including area code: (512) 795-2300
ART DESIGN, INC.
11044 Research Blvd., Suite A-200
Austin, TX 78759
April 25, 2012
On April 25, 2012, Kathy Sheehan, Todd Sheehan, John Barton and Rebecca
Gregarek appointed Michael Smith and Rick Wilber as directors. Following the
appointments of Michael Smith and Rick Wilber, Kathy Sheehan and Todd Sheehan
resigned as our officers.
Following the resignations of Kathy Sheehan and Todd Sheehan as our
officers, Michael Smith was appointed our Chief Executive Officer and Marc
Spezialy was appointed our Principal Financial and Accounting Officer. Ten days
after this Schedule 14-f is mailed to our shareholders, Kathy Sheehan, Todd
Sheehan and Rebecca Gregarek will resign as directors.
Michael Smith (age 52) has been the Chief Executive Officer of Kingman
Energy LLC, a company he founded, since June 2011. Kingman Energy LLC focuses on
the exploration and development of shallow oil fields with a history of proven
petroleum production. From February 2001 to July 2008, Mr. Smith served as Vice
President of Victoria Energy, an oil and gas brokerage company. Since June 1995,
Mr. Smith has served as Vice President of Jersey Investment, a company focused
on commercial real estate development.
Marc Spezialy (age 29) was a manager at PricewaterhouseCoopers LLP between
July 2011 and March 2012 in their Austin, Texas office. Between December 2009
and July 2011 Mr. Spezialy was with the accounting firm of Maxwell Locke and
Ritter in Austin, Texas. Between July 2004 and December 2009 Mr. Spezialy was
with PricewaterhouseCoopers LLP in their San Francisco, California and Austin,
Texas offices. Mr. Spezialy received a Bachelor of Science in Accounting and
Finance from the University of San Francisco and is a licensed CPA in Texas and
California.
Rick A. Wilber (age 63) has been a director of Synergy Resources
Corporation, a publicly traded oil and gas exploration and development company,
since September 2008. Since 1984, Mr. Wilber has been a private investor in, and
a consultant to, numerous development stage companies. In 1974, Mr. Wilber was
co-founder of Champs Sporting Goods, a retail sporting goods chain, and served
as its President from 1974-1984. He has been a Director of Ultimate Software
Group Inc. since October 2002 and serves as a member of its audit and
compensation committees. Mr. Wilber was a director of Ultimate Software Group
between October 1997 and May 2000. He served as a director of Royce
Laboratories, Inc., a pharmaceutical concern, from 1990 until it was sold to
Watson Pharmaceuticals, Inc. in April 1997 and was a member of its compensation
committee.
Rick Wilber is our only independent director, as that term is defined in
section 803 of the listing standards of the NYSE Amex. None of our directors is
a "financial expert", as that term is defined in the regulations of the
Securities and Exchange Commission.
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Executive Compensation
During the two years ended December 31, 2011 we did not pay any
compensation to Kathy Sheehan or Todd Sheehan.
During the year ended December 31, 2011 we did not pay any compensation to
our directors.
We do not have any outstanding options or other types of equity awards. We
do not have any type of equity incentive plans, retirement plans or similar
plans or arrangements for our officers or directors. We have not entered into
any contracts or arrangements with our officers or directors that would provide
them with compensation resulting from their resignation, retirement, or any
other termination of their employment with us or from a change-in-control us or
a change of their responsibilities following a change-in-control.
Employment Agreement with Michael Smith
In April 2012 we entered into an employment agreement with Michael Smith.
The employment agreement provides that we will pay Mr. Smith an annual salary of
$120,000 during the term of the agreement. The employment agreement will
continue in force until terminated by us or Mr. Smith.
During each year of the employment term, Mr. Smith is entitled to six
weeks of paid vacation days. During the employment term, Mr. Smith will be
entitled to receive any benefits which are provided to our full time employees
in accordance with our policies and practices and subject to Mr. Smith's
satisfaction of any applicable conditions of eligibility.
In the event of Mr. Smith's illness or disability for a continuous period
of six months during which he is unable to render services, Mr. Smith's
compensation will continue during such period, and at the end of such period we
may terminate Mr. Smith's employment on 30 days' prior written notice. Any
dispute as to Mr. Smith's disability will be submitted to an impartial and
reputable physician which we select and which is agreeable to Mr. Smith.
We may terminate the employment agreement at any time for cause, which
means: (i) a willful act by Mr. Smith that is not in our financial best
interest; (ii) a willful failure by Mr. Smith to follow the reasonable, prudent
and lawful direction of our directors; or (iii) a failure by Mr. Smith to
substantially perform his duties within 30 days after our demand for substantial
performance. If Mr. Smith's employment is terminated for cause, we must pay him
his full salary through the date of termination.
Mr. Smith may terminate his employment: for good reason. "Good reason"
means: (A) a change-in-control of the Company (i.e. the acquisition by which any
person of more than 50% of our common stock, or a change in a majority of our
directors which has not been approved by the incumbent directors); (B) our
failure to comply with any material provision of the employment agreement which
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has not been cured within 10 days after notice of such noncompliance has been
given by Mr. Smith; or (C) any termination of Mr. Smith's employment other than
for cause.
If, within one year following a change-in-control, Mr. Smith resigns for
good reason or we terminate his employment without cause, Mr. Smith will
receive: (i) a lump-sum severance payment equal to $120,000, less applicable
deductions and withholdings; (ii) the full amount of any bonus for the fiscal
year in which he is terminated, less applicable deductions and withholdings;
(iii) immediate vesting of any unvested shares under any outstanding stock
options; and (iv) should he be eligible for and elect to continue health
insurance pursuant to COBRA, payment of COBRA premiums for twelve months
following the termination of his employment.
In the event of Mr. Smith's death during the term, we will pay to his
beneficiary an amount equal to the monthly rate of his salary for a period of
six months.
Mr. Smith may terminate the employment agreement on 90 days notice to us,
in which case we will pay Mr. Smith his salary up to the end of the 90 days.
Except as provided above, upon the termination of Mr. Smith's employment
we will pay him his salary up through the date of termination.
Employment Agreement with Marc Spezialy
In April 2012 we entered into an employment agreement with Marc Spezialy.
The employment agreement provides that we will pay Mr. Spezialy an annual salary
of $120,000 during the term of the agreement. The employment agreement will
continue in force until terminated by us or Mr. Spezialy.
During the employment term, Mr. Spezialy will be entitled to receive any
benefits which are provided to our full time employees in accordance with our
policies and practices and subject to Mr. Spezialy's satisfaction of any
applicable conditions of eligibility.
The following table shows, as of April 25, 2012 the number and percentage
of outstanding shares owned by Michael Smith, Rick Wilber and Marc Spezialy.
Unless otherwise indicated, each owner has sole voting and investment powers
over his shares of common stock.
Transaction with a Related Party
We plan to enter into an agreement with Kingman Operating Company, Inc., a
subsidiary of Kingman Energy, LLC which will provide for the following:
o the payment to Kingman $475,000 for the assignment of a 100% working
interest (75% net revenue interest) in an oil and gas lease covering 200
acres in the Minerva-Rockdale field in Milam County, Texas.
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o the payment to Kingman $275,000 to drill and, if warranted, complete any
well we elect to drill on the lease. Kingman will be paid $1,000 a month
for operating any wells we complete on this lease.
o the conveyance to Kingman of a 10% working interest in the lease when we
have recovered, from the net proceeds of the sale of any oil or gas
produced from any wells drilled or completed on the lease, an amount equal
to the cost of drilling, testing, completing, equipping and operating any
wells on the lease.
o the right to acquire a 100% working interest (75% net revenue interest) on
or before November 1, 2012 in a lease covering 300 acres, which lease is
immediately adjacent to the 200 acre lease referred to above. The cost of
this lease will be $1,275,000. If we acquire this lease, we will pay
Kingman $275,000 to drill and complete any wells which we choose to drill
on the lease, and $1,000 a month for operating any wells on the lease.
Share Ownership
Our common stock is the only class of equity security that we have
outstanding. Each share of our common stock entitles its holder to one vote at
any meeting of our shareholders. On April 25, 2012 we had 10,820,600 outstanding
shares of common stock. The following table shows the shares ownership of
Michael Smith, Marc Spezialy, and Rick Wilber.
Number
Name of Shares Percent of Class
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Michael Smith 1,600,000 (1) 14.6%
Marc S. Spezialy -- --
Rick A. Wilber 1,100,000 10.0%
(1) Shares are owned of record by Kingman Energy, LLC, a company controlled by
Mr. Smith.
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