Microsoft Word 10.0.2627;UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X] Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-12
Altair Nanotechnologies Inc.
-----------------------------------------------
(Name of Registrant as Specified In Its Charter)
-----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
_______________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
_______________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
_______________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
_______________________________________________________________________
(5) Total fee paid:
_______________________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
___________________________________________________________________
(2) Form, Schedule or Registration Statement No.:
___________________________________________________________________
(3) Filing Party:
___________________________________________________________________
(4) Date Filed:
___________________________________________________________________
ALTAIR NANOTECHNOLOGIES INC.
204 Edison Way
Reno, Nevada 89502
U.S.A.
MANAGEMENT INFORMATION CIRCULAR
AND PROXY STATEMENT
Solicitation of Proxies
-----------------------
THIS MANAGEMENT INFORMATION CIRCULAR AND PROXY STATEMENT (THE
"INFORMATION CIRCULAR") IS FURNISHED IN CONNECTION WITH THE SOLICITATION BY THE
MANAGEMENT OF ALTAIR NANOTECHNOLOGIES INC. (THE "CORPORATION") OF PROXIES TO BE
USED AT THE ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS OF THE CORPORATION TO BE
HELD AT THE TIME AND PLACE AND FOR THE PURPOSES SET FORTH IN THE ENCLOSED NOTICE
OF MEETING (THE "MEETING"). This Information Circular, the notice of Meeting
attached hereto, and the accompanying form of proxy and the Annual Report of the
Corporation for the year ended December 31, 2004 are first being mailed to the
shareholders of the Corporation on or about April 22, 2005. It is expected that
the solicitation will be primarily by mail, but proxies may also be solicited
personally, by email, by facsimile or by telephone by officers of the
Corporation without additional compensation therefor. If one or more
shareholders files a proxy statement or solicits proxies in opposition to the
recommendations of the Board of Directors, the Corporation may engage outside
solicitors to assist with its solicitation of proxies. Details regarding any
such engagement will be set forth in a supplement to this Information Statement.
The cost of solicitation by management will be borne directly by the
Corporation. Arrangements will be made with brokerage firms and other
custodians, nominees and fiduciaries for the forwarding of solicitation
materials to the beneficial owners of the Common Shares of the Corporation
("Common Shares") held by such persons, and the Corporation will reimburse such
brokerage firms, custodians, nominees and fiduciaries for the reasonable
out-of-pocket expenses incurred by them in connection therewith.
Appointment and Revocation of Proxies
-------------------------------------
The persons named in the enclosed form of proxy are officers and/or
directors of the Corporation. A SHAREHOLDER DESIRING TO APPOINT SOME OTHER
PERSON TO REPRESENT HIM AT THE MEETING MAY DO SO either by inserting such
person's name in the blank space provided in that form of proxy or by completing
another proper form of proxy and, in either case, depositing the completed proxy
at the office of the transfer agent indicated on the enclosed envelope not later
than 48 hours (excluding Saturdays and holidays) before the time of holding the
Meeting, or delivered to the chairman on the day of the Meeting or adjournment
thereof.
A proxy given pursuant to this solicitation may be revoked by
instrument in writing, including another proxy bearing a later date, executed by
the shareholder or by his attorney authorized in writing, and deposited either
at the Corporation's principal office located at 204 Edison Way, Reno, Nevada at
any time up to and including the last business day preceding the day of the
Meeting, or any adjournment thereof, at which the proxy is to be used, or with
the chairman of such Meeting on the day of the Meeting, or adjournment thereof,
or in any other manner permitted by law.
Voting of Proxies
-----------------
UNLESS OTHERWISE INDICATED ON THE FORM OF PROXY, SHARES REPRESENTED BY
PROPERLY EXECUTED PROXIES IN FAVOR OF PERSONS DESIGNATED IN THE PRINTED PORTION
OF THE ENCLOSED FORM OF PROXY WILL BE VOTED (I) TO ELECT MANAGEMENT'S [________]
NOMINEES FOR DIRECTOR, (II) TO RATIFY THE APPOINTMENT OF DELOITTE & TOUCHE LLP
AS THE CORPORATION'S INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER
31, 2005, (III) TO APPROVE THE ALTAIR NANOTECHNOLOGIES INC 2005 STOCK INCENTIVE
PLAN, AND (IV) TO RATIFY THE AMENDMENT TO THE BYLAWS INCREASING THE QUORUM
REQUIREMENT FOR SHAREHOLDER MEETINGS. IF SO INDICATED ON THE FORM OF PROXY,
SHARES REPRESENTED BY PROPERLY EXECUTED PROXIES IN FAVOR OF PERSONS DESIGNATED
IN THE PRINTED PORTION OF THE ENCLOSED FORM OF PROXY WILL BE WITHHELD FROM
VOTING WITH RESPECT TO, OR VOTED AGAINST, ANY OR ALL OF THE FOUR MATTERS
IDENTIFIED IN THE PRECEDING SENTENCE. The enclosed form of proxy confers
discretionary authority upon the persons named therein with respect to
amendments or variations to matters identified in the notice of Meeting, or
other matters which may properly come before the Meeting. At the time of
printing this Information Circular, management of the Corporation knows of no
such amendments, variations or other matters to come before the Meeting.
Voting Securities
-----------------
The authorized capital of the Corporation consists of an unlimited
number of Common Shares. As of March 17, 2005, the Corporation had issued and
outstanding 58,785,289 Common Shares.
The Corporation shall make a list of all persons who are registered
holders of Common Shares on April 18, 2005 (the "Record Date") and the number of
Common Shares registered in the name of each person on that date. Each
shareholder is entitled to one vote for each Common Share registered in his name
as it appears on the list except to the extent that such shareholder has
transferred any of his shares after the Record Date and the transferee of those
shares produces properly endorsed share certificates or otherwise establishes
that he owns the shares and demands, not later than ten days before the Meeting,
that his name be included in the list. In such case the transferee is entitled
to vote those shares at the Meeting in lieu of the transferor.
One-third of the outstanding Common Shares entitled to vote,
represented in person or by properly executed proxy, is required for a quorum at
the Meeting. Abstentions and broker non-votes, which are indications by a broker
that it does not have discretionary authority to vote on a particular matter,
will be counted as "represented" for the purpose of determining the presence or
absence of a quorum.
Under the Canada Business Corporations Act (the "CBCA"), once a quorum
is established, in connection with the election of directors, the [____]
nominees receiving the highest number of votes will be elected. In order to
approve each of the proposals in respect of the ratification of the appointment
of independent auditors, the approval of the stock incentive plan and the
approval of the bylaw amendment, the votes cast in favour of such proposal must
exceed the votes cast against. Abstentions and broker non-votes will not have
the effect of being considered as votes cast against any of the matters
considered at the Meeting.
2
Exchange Rate Information
-------------------------
The following exchange rates represent the noon buying rate in New York
City for cable transfers in Canadian dollars (CDN. $), as certified for customs
purposes by the Federal Reserve Bank of New York. The following table sets
forth, for each of the years indicated, the period end exchange rate, the
average rate (i.e. the average of the exchange rates on the last day of each
month during the period), and the high and low exchange rates of the U.S. Dollar
(U.S. $) in exchange for the Canadian Dollar (CDN. $) for the years indicated
below, based on the noon buying rates.
======================================================================================
For the Year Ended December 31,
======================================================================================
2004 2003 2002 2001 2000
--------------- ------------- ------------- ------------- ------------- --------------
======================================================================================
(Each U.S. Dollar Purchases the Following Number of Canadian dollars)
======================================================================================
High 1.3970 1.5750 1.6128 1.6023 1.5600
--------------- ------------- ------------- ------------- ------------- --------------
Low 1.1775 1.2923 1.5108 1.4933 1.4350
--------------- ------------- ------------- ------------- ------------- --------------
Average 1.2984 1.3916 1.5702 1.5519 1.4871
--------------- ------------- ------------- ------------- ------------- --------------
Year End 1.2034 1.2923 1.5800 1.5925 1.4995
--------------- ------------- ------------- ------------- ------------- --------------
PROPOSAL NO. 1 -- ELECTION OF DIRECTORS
The Articles of Continuance of the Corporation (the "Articles") provide
that the board of directors of the Corporation (the "Board") may consist of a
minimum of three and a maximum of nine directors, to be elected annually. Each
director will hold office until the next annual meeting or until his successor
is duly elected unless his office is earlier vacated in accordance with the
by-laws of the Corporation. Pursuant to the Articles, the Board has been
empowered to set the size of the Board, subject to any limitations set forth in
the Articles of the CBCA. The Articles provide that the Board may, between
meetings of shareholders, appoint one or more additional directors, but only if,
after such appointment, the total number of directors would not be greater than
one and one-third times the number of directors required to have been elected at
the last annual meeting of shareholders.
[identity of nominees to be inserted when determined by nominating committee]
3
Set forth below is a description of each of the directors, nominees and
executive officers of the Corporation, including their principal occupations for
the past five years:
IF ANY OF THE NOMINEES IS FOR ANY REASON UNAVAILABLE TO SERVE AS A
DIRECTOR, PROXIES IN FAVOR OF MANAGEMENT WILL BE VOTED FOR ANOTHER NOMINEE IN
THEIR DISCRETION UNLESS THE SHAREHOLDER HAS SPECIFIED IN THE PROXY THAT HIS
SHAERS ARE TO BE WITHHELD FROM VOTING IN THE ELECTION OF DIRECTORS.
Directors
Alan J. Gotcher, 55, was appointed as Chief Executive Officer and a
director of the Corporation in August 2004 and was also appointed as President
of the Corporation in March 2005. Prior to joining Altair, Dr. Gotcher was
Chairman and CEO of InDelible Technologies, Inc., a development stage company
that provides secure logistics through covert bar code marking systems and
invisible bar code reading technologies from January 2000 to August 2004. From
2000 through 2003, Dr. Gotcher was co-managing partner of IdeaSpring, LLC, a
private investment company, and from 2000 through August 2004, Dr. Gotcher was
President and CEO of A Gotcher & Co., Inc., a consulting firm. Prior to founding
InDelible, Dr. Gotcher spent fourteen years with Avery Dennison, where he served
as Senior Vice president, Manufacturing & Technology, and Chief Technology
Officer. During his tenure, Dr. Gotcher led Avery's teams that created and
commercialized the Duracell On-Cell tester battery label and pressure sensitive
battery labels and the United States Postal Service's self-stick stamp products.
Prior to joining Avery Dennison, Dr. Gotcher was Laboratory Director, U.S.
Corporate Research and Development, with Raychem Corporation where he lead the
business development teams that created, developed and commercialized the
conductive polymer- based PolySwitch(R) over-current protection device business.
Jon N. Bengtson, 61, has been a director of the Corporation since July
2003 and was appointed Chairman of the Board in June 2004. He currently serves
as the Chairman of the Board of The Sands Regent Hotel Casino and is chairman of
the board of Radica Games Limited. Mr. Bengtson began his career with Harrah's,
where he served for nine years in various management positions, including vice
president of management information systems. He joined International Game
Technology in 1980 as vice president, chief financial officer and director and
was subsequently promoted to vice president of marketing in 1982. Mr. Bengtson
joined The Sands Regent Hotel Casino in June 1984 and served in various
positions, including vice president of finance and administration, chief
financial officer, treasurer and director, senior vice president and director
and executive vice president and chief operating officer and director until
December 1993. In January 1994 he joined Radica Games Limited as vice president,
chief financial officer and was appointed president and chief executive officer
of Radica USA in December 1994 and was appointed chairman of the board in
January 1996. Mr. Bengtson was a founder and chief financial officer of
ShareGate, Inc., a venture funded telecommunications equipment company from
March 1996 until October 2001. Mr. Bengtson is also the founder and chief
financial officer for Pinyon Technology, a start-up technology corporation
developing wireless antenna networking technology. He holds a bachelors degree
in Business Administration and a Master of Business Administration degree from
the University of Nevada, Reno.
James I. Golla, 72, has been a director of the Corporation since
February 1994. He also currently serves as a director of Assure Energy, Inc.,
Radiant Energy Corp. and Galantas Gold Corp. Mr. Golla was a journalist with the
Globe and Mail, Canada's national newspaper, from 1954 until his retirement
early in 1997.
George E. Hartman, 56, was elected a director of the Corporation in
March 1997. From 1995 until 1998, Mr. Hartman served as President of Planvest
Pacific Financial Corp. ("Planvest Pacific"), a Vancouver-based financial
planning firm with U.S. $1 billion of assets under management. Mr. Hartman also
4
served on the board of directors of Planvest Capital Corp., the parent of
Planvest Pacific. From 1998 until 2000, Mr. Hartman was Senior Vice President of
Financial Concept Group until the firm's sale to Assante Corporation, a North
American financial services industry consolidator. At that time, he became Chief
Executive Officer of PlanPlus Inc., Canada's oldest firm specializing in the
development and distribution of wealth management software to the financial
services industry. Mr. Hartman also continues as President of Hartman &
Corporation, Inc., a firm he founded in 1991 which provides consulting services
to the financial services industry. Since April 2004, Mr. Hartman has worked as
a consultant with The Covenant Group, a management consulting firm. Mr. Hartman
is the author of Risk is a Four-Letter Word--The Asset Allocation Approach to
Investing, a Canadian best-seller published in 1992, and is the author of its
sequel, Risk is STILL a Four Letter Word, released in 2000.
David S. King, 55, has been a director of the Corporation since
February 2004. In October 2000, he founded and has since been the managing
partner of Advanced Technology Group LLC, which works with research and
development enterprises to accelerate their commercialization of innovative
technologies. Dr. King was employed by the National Institute of Standards and
Technology from 1976 through 2000. He began his career as a research chemist in
the Physics Laboratory where he developed a research program aimed at a basic
understanding of energy flow and chemical reactivity in high energy density
materials, in bimolecular collisions and small molecular clusters and at metal
interfaces. From 1994 to 1999 Dr. King was a Program Manager in the Advanced
Technology Program, where he recommended and implemented long-range technology
investment strategies; served as technical or business evaluator for over 1,000
research and development proposals, formally evaluated corporate technology
development and commercialization strategies; and served as program manager for
approximately 25 innovative, industry-led research and development projects in
areas of chemistry, physics and biotechnology. From 1999 to 2000, he was Science
Advisor, Physics Laboratory, and then Science Advisor in the Office of the Under
Secretary of Commerce for Technology. He then founded the Advanced Technology
Group LLC in October 2000, for which he continues to work. Dr. King holds a
Bachelor of Arts degree in Chemistry, a Doctor of Philosophy degree in Chemical
Physics and an Executive Masters of Science and Engineering in the Management of
Technology, all from the University of Pennsylvania.
Christopher E. Jones, 58, was appointed a director of the Corporation
effective May 1, 2004. Since 1998, Mr. Jones has been the Vice President of
Manufacturing and Engineering at Behr Process Corporation, where he is
responsible for the construction and operations of all coating plant operations
for the larger DIY architectural coatings corporation in North America. Prior to
joining Behr Process, Mr. Jones was the President of Kronos Louisiana and the
Vice President of Manufacturing of Kronos International. Kronos was the fourth
largest producer of titanium dioxide in the world. Mr. Jones earned a Bachelors
of Arts degree in Chemistry from Oakland University and a Ph.D in
Organo-Metallic Chemistry from Michigan State University and completed
postdoctoral work at University of Leeds, England and University of Alberta in
Edmonton, Canada.
Michel Bazinet M.D., 49, was appointed a director of the Corporation
effective July 9, 2004. Since January 2003, Dr. Bazinet has been Chairman & CEO
of privately held Replicor, Inc., which develops new antiviral and anticancer
therapies. Prior to his involvement with Replicor, from 1996 to 2000, Dr.
Bazinet was the founder and medical director of Mediconsult, a healthcare
knowledge company. Mediconsult completed its initial public offering in 1999 and
was ultimately acquired by The Cybear Group in 2000. Dr. Bazinet, a
board-certified urologist, received his MD from Sherbrooke University. He
completed his residency at McGill University, Montreal, and has been a research
fellow at Memorial Sloan-Kettering Cancer Center, New York. Dr. Bazinet, a
former assistant professor of both urology and oncology at McGill University, is
also an accomplished speaker, medical industry author and consultant.
5
Rudi E. Moerck, 58, served as Vice President of Business Development of
the Corporation from January 2002 until April 2002, served as President of the
Corporation from April 2002 until March 2005 and has been a director since
December 2003. Since March 2005, Mr. Moerck has been working as a consultant for
Spectrum Pharmaceuticals, Irvine, CA. Prior to joining the Corporation, in April
1997, Dr. Moerck founded www.Smrtdoc.com, a consulting services provider to the
pharmaceutical, virtual pharmaceutical and fine chemical industries. Dr. Moerck
also held key senior management positions, including Senior Vice President and
General Manager as well as Senior Vice President of Sales and Marketing with
Catalytica Pharmaceuticals between June 1998 and January 2002. Prior to joining
Catalytica Pharmaceuticals, Dr. Moerck held the position of President of
Salsbury Chemicals, a subsidiary of Cambrex Corporation, from 1996-1997 and held
the position of President of the Pharmaceuticals and Fine Chemicals Group of
Cambrex from 1997-1998. Degussa Corporation and Degussa AG employed Dr. Moerck
for 13 years during which he held various positions of increasing
responsibility, which included the successful green field launch of Degussa's
hydrogen peroxide business in North America. Dr. Moerck obtained a bachelors
degree in Biology/Chemistry from Florida Southern College, Lakeland, Florida in
1969 and a Ph.D. in Organic Chemistry from University of Florida in 1975, and
completed Postdoctoral Fellowships at Ohio State University between 1975 and
1979.
Executive Officers
------------------
The executive officers of the Corporation are Alan J. Gotcher, Edward
H. Dickinson, Douglas K. Ellsworth and Roy Graham. Certain information regarding
Dr. Gotcher is set forth above under "Election of Directors - Directors."
Certain information regarding Messrs. Dickinson, Ellsworth and Graham follows.
Edward H. Dickinson, 58, was appointed Chief Financial Officer of the
Corporation in March 2000, and was appointed Secretary in June 2001. Mr.
Dickinson had previously served as Director of Finance of the Corporation since
August 1996. From 1994 to 1996, Mr. Dickinson was employed by the Southern
California Edison Company as a negotiator of non-utility power generation
contracts. Mr. Dickinson was Vice President and Director of Geolectric Power
Company during 1993 and 1994, and from 1987 through 1992, he was the Director of
Finance and Administration for OESI Power Corporation. Prior to 1987, Mr.
Dickinson held various accounting and program management positions in the United
States Department of Energy. Mr. Dickinson, who is a certified public
accountant, obtained a masters degree in Accounting from California State
University, Northridge in 1978.
Douglas K. Ellsworth, 51, was appointed President, Altair
Nanomaterials, Inc., the operating subsidiary through which the Corporation
conducts its nanotechnology business, in June 2003 and Senior Vice President of
the Corporation in March 2004. Mr. Ellsworth previously held various other
positions with Altair Nanomaterials, Inc. Prior to joining the Corporation, Mr.
Elsworth was the Manager, Technical Support for BHP Minerals' Center for
Minerals Technology in Reno, Nevada from 1984 through 1999. Mr. Ellsworth began
work at BHP in 1984 as the chief chemist. Mr. Ellsworth worked as a chemist and
manager at Skyline Labs in Colorado and Alaska in 1975-1979 and as a chemist for
Utah International, Inc.'s Minerals Laboratory in Sunnyvale California from
1979-1984. Mr. Ellsworth received his B.S. degree in chemistry and geology from
the State University of New York College, Oneonta.
Roy Graham, 54, was appointed Senior Vice President of the Corporation
in January 2005. Mr. Graham was the President and CEO of modeMD, Inc., a
developer of wireless application software and systems for the healthcare
industry, from May 2002 through December 2004. From January 2000 until April
2002, Mr. Graham served as managing partner of Incline Consulting, L.L.C., a
business consulting firm. He has also held senior vice president and
director-level sales and marketing roles with Wyse Technology, Tandem Computers,
and Digital Equipment Corporation. Mr. Graham received a Bachelor of Science
degree with honors from Sussex University in the United Kingdom.
6
Key Employees
-------------
Bruce J. Sabacky, 54, was appointed Vice President of Research and
Engineering for Altair Nanomaterials, Inc., the operating subsidiary through
which the Corporation conducts its nanotechnology business, in October 2003. Dr.
Sabacky joined Altair Nanomaterials, Inc. in January 2001 as Director of
Research and Engineering. Prior to that, he was the Manager of Process
Development at BHP's Center for Minerals Technology from 1996 to 2001, where he
was instrumental in developing the nanostructured materials technology. Dr.
Sabacky was the Technical Superintendent for Minera Escondida Ltda. from 1993 to
1996 and was a Principal Process Engineer with BHP from 1991 to 1993. Prior to
that, he held senior engineering positions in the minerals and metallurgical
industries. Dr. Sabacky obtained Bachelors and Masters degrees in Metallurgical
Engineering from the South Dakota School of Mines and Technology and a Ph.D in
Materials Science & Mineral Engineering with minors in Chemical Engineering and
Mechanical Engineering from the University of California, Berkeley.
Security Ownership of Certain Beneficial Owners and Management
--------------------------------------------------------------
Set forth below is information with respect to beneficial ownership of
Common Shares as of March 18, 2005 by the Corporation's Chief Executive Officer,
the Corporation's former Chief Executive Officer, by the three additional
persons serving as executive officers as of December 31, 2004 whose total
compensation for 2004 exceeded $100,000, and the most highly compensated
non-executive employee (collectively, the "named executive officers"), by each
of the directors of the Corporation, by persons known to the Corporation to
beneficially own more than 5% of the outstanding Common Shares, and by all
current officers and directors of the Corporation as a group. Unless otherwise
indicated, each of the shareholders named in the table has sole voting and
investment power with respect to the Common Shares identified as beneficially
owned. The Corporation is not aware of any arrangements, the operation of which
may at a subsequent date result in a change in control of the Corporation.
------------------ ----------------------------------------- ------------------------ ----------------
Title of Class Name and Address of Beneficial Owner Amount and Nature of Percentage of
Beneficial Ownership
(1) Class (2)
------------------ ----------------------------------------- ------------------------ ----------------
Common Alan J. Gotcher (Chief Executive 282,240(3) *
Officer and Director)
930 Tahoe Blvd., #802-216
Incline Village, Nevada 89451
------------------ ----------------------------------------- ------------------------ ----------------
Common Rudi E. Moerck (Former President and 500 *
Director)
900 So. Meadows Pkwy., #3611
Reno, Nevada 89521
------------------ ----------------------------------------- ------------------------ ----------------
Common Douglas K. Ellsworth (Senior Vice 112,533(4) *
President)
4310 Wild Eagle Terrace
Reno, Nevada 89511
------------------ ----------------------------------------- ------------------------ ----------------
Common Edward H. Dickinson (Chief Financial 397,700(5) *
Officer and Secretary)
659 Caughlin Glen
Reno, Nevada 89509
------------------ ----------------------------------------- ------------------------ ----------------
7
------------------ ----------------------------------------- ------------------------ ----------------
Title of Class Name and Address of Beneficial Owner Amount and Nature of Percentage of
Beneficial Ownership
(1) Class (2)
------------------ ----------------------------------------- ------------------------ ----------------
Common Bruce J. Sabacky (Employee) 5,000(13) *
8555 Council Lane
Reno, Nevada 89511
------------------ ----------------------------------------- ------------------------ ----------------
Common Jon N. Bengtson (Director) 50,000(6) *
2370 Solari Drive
Reno, Nevada 89509
------------------ ----------------------------------------- ------------------------ ----------------
Common James I. Golla (Director) 80,000(7) *
829 Terlin Boulevard
Mississauga, Ontario L5H 1T1
------------------ ----------------------------------------- ------------------------ ----------------
Common George Hartman (Director) 35,800(8) *
136 Colborne
Fenelon Falls, ON K0M 1N0
------------------ ----------------------------------------- ------------------------ ----------------
Common David S. King (Director) 60,000(9) *
123 Tenth St. SE
Washington, D.C. 20003
------------------ ----------------------------------------- ------------------------ ----------------
Common Christopher Jones (Director) 50,000(10) *
1140 Cuchara Drive
Del Mar, California 92014
------------------ ----------------------------------------- ------------------------ ----------------
Common Michel Bazinet (Director) 0 *
343 Brookfield Avenue
Mount-Royal, Quebec H3P 2A7
------------------ ----------------------------------------- ------------------------ ----------------
Common William P. Long (Chief Executive 722,700 1.2%
Officer and director until May 1, 2004)
57 Sunset Rim
Cody, Wyoming 82414
------------------ ----------------------------------------- ------------------------ ----------------
Common Louis Schnur (5% Shareholder) 5,249,851(11) 8.9%
6941 South Western Avenue
Chicago, ILL 60636
------------------ ----------------------------------------- ------------------------ ----------------
Common All Directors and Officers as a Group 1,073,77312) 1.8%
(11 persons)
------------------ ----------------------------------------- ------------------------ ----------------
* Represents less than 1% of the outstanding Common Shares.
(1) Includes all Common Shares issuable pursuant to the exercise of options
and warrants that are exercisable within 60 days of March 18,, 2005.
Does not include any Common Shares subject to options that are not
exercisable within 60 days of March 18, 2005 or subject to options that
vest only upon the occurrence of events, such as a rise in the market
price of the Common Shares, outside of the control of the optionee.
(2) Based on 58,785,289 Common Shares outstanding as of March 18, 2005.
Common Shares underlying options, warrants or other convertible or
exercisable securities are, to the extent exercisable within 60 days of
March 18, 2005, deemed to be outstanding for purposes of calculating
the percentage ownership of the owner of such convertible securities,
but not for purposes of calculating any other person's percentage
ownership.
8
(3) Includes 250,000 Common Shares subject to options granted to Mr.
Gotcher pursuant to the 1998 Plan. Includes 2,140 Common Shares owned
by his wife and 500 Common Shares owned by his adult stepson, with
respect to which Mr. Gotcher disclaims beneficial ownership.
(4) Includes 107,200 Common Shares subject to options granted to Mr.
Ellsworth pursuant to the 1998 Plan.
(5) Includes 150,000 Common Shares subject to options granted to Mr.
Dickinson pursuant to the 1996 Plan and 241,200 Common Shares subject
to options granted to Mr. Dickinson pursuant to the 1998 Plan.
(6) Includes 50,000 Common Shares subject to options granted to Mr.
Bengtson pursuant to the 1998 Plan.
(7) Includes 10,000 Common Shares subject to options granted to Mr. Golla
pursuant to the 1996 Plan and 50,000 Common Shares subject to options
granted to Mr. Golla pursuant to the 1998 Plan.
(8) Includes 35,000 Common Shares subject to options granted to Mr. Hartman
pursuant to the 1998 Plan.
(9) Includes 50,000 Common Shares subject to options granted to Mr. King
pursuant to the 1996 Plan.
(10) Includes 50,000 Common Shares subject to options granted to Mr. Jones
pursuant to the 1996 Plan.
(11) Based solely on Schedule 13D dated April 7, 2004 filed by Mr. Schnur.
Such Schedule 13D indicates that 3,116,022 of such shares are subject
to presently exercisable warrants to purchase Common Shares. All such
warrants have been exercised. The Corporation believes that Mr. Schnur
has sold a substantial portion of his holdings of Common Shares and has
asked Mr. Schnur to update his Schedule 13D.
(12) Includes 260,000 Common Shares subject to options granted to officers
and directors pursuant to the 1996 Plan and 738,400 Common Shares
subject to options granted to officers and directors pursuant to the
1998 Plan.
(13) Includes 5,000 Common Shares subject to options granted to Mr. Sabacky
pursuant to the 1998 Plan.
Executive Compensation
----------------------
(a) Compensation of Officers
The following table, presented in accordance with Regulation 14A
promulgated under the United States Securities Exchange Act of 1934, as amended
(the "Exchange Act"), sets forth all compensation for services rendered in all
capacities to the Corporation and its subsidiaries for the fiscal years ended
December 31, 2004, December 31, 2003 and December 31, 2002 in respect of the
named executive officers.
9
======================================================================================================================
Summary Compensation Table
------------------- -------- ------------------------------------- ---------------------------------- ----------------
Name and Title Fiscal Annual Compensation Long Term Compensation
Year
Ended
Dec.
31,
------------------- -------- ------------------------------------- ---------------------------------- ----------------
- Restricted Securities
Shares or Securities
Restricted Under
Other Annual Share Options LTIP All Other
Salary Bonus Compensation Units Granted Payouts Compensation
(U.S.$) (U.S. $) (U.S.$) (#) (#) (U.S.$) (U.S. $)
------------------- -------- --------- ---------- ---------------- ----------- ------------ --------- ----------------
Alan J. Gotcher, 2004 100,481 Nil Nil Nil 350,000 Nil Nil
Chief Executive -------- --------- ---------- ---------------- ----------- ------------ --------- ----------------
Officer and 2003 Nil Nil Nil Nil Nil Nil Nil
Director -------- --------- ---------- ---------------- ----------- ------------ --------- ----------------
2002 Nil Nil Nil Nil Nil Nil Nil
======================================================================================================================
Rudi E Moerck, 2004 146,538 Nil Nil Nil Nil Nil Nil
Former President -------- --------- ---------- ---------------- ----------- ------------ --------- ----------------
and Director 2003 110,000 50,000 Nil Nil 50,000 Nil Nil
------------------- -------- --------- ---------- ---------------- ----------- ------------ --------- ----------------
2002 84,500 Nil Nil Nil 300,000 Nil Nil
======================================================================================================================
Douglas K. 2004 122,343 18,750 Nil Nil Nil Nil Nil
Ellsworth, Sr. -------- --------- ---------- ---------------- ----------- ------------ --------- ----------------
Vice President 2003 105,774 40,000 Nil Nil 110,000 Nil Nil
------------------- -------- --------- ---------- ---------------- ----------- ------------ --------- ----------------
2002 92,653 Nil Nil Nil 10,000 Nil Nil
======================================================================================================================
Edward H. 2004 112,500 17,250 Nil Nil Nil Nil Nil
Dickinson, Chief -------- --------- ---------- ---------------- ----------- ------------ --------- ----------------
Financial Officer 2003 85,000 25,000 Nil Nil 110,000 Nil Nil
------------------- -------- --------- ---------- ---------------- ----------- ------------ --------- ----------------
2002 85,000 Nil Nil Nil Nil Nil Nil
======================================================================================================================
Bruce J. Sabacky, 2004 113,481 12,938 Nil Nil Nil Nil Nil
Vice President of -------- --------- ---------- ---------------- ----------- ------------ --------- ----------------
Altair 2003 99,463 13,215 Nil Nil 110000 Nil Nil
Nanomaterials, -------- --------- ---------- ---------------- ----------- ------------ --------- ----------------
Inc. 2002 98,502 Nil Nil Nil 10000 Nil Nil
======================================================================================================================
William P. Long 2004 167,369 50,880 Nil Nil Nil Nil 29,000 (2)
(Chief Executive -------- --------- ---------- ---------------- ----------- ------------ --------- ----------------
Officer Until May 2003 109,440 60,000 Nil Nil 110,000 Nil Nil
1, 2004) -------- --------- ---------- ---------------- ----------- ------------ --------- ----------------
2002 100,320 9,120 Nil Nil 100,000 Nil 117,694 (3)
======================================================================================================================
(1) Represents bonus earned during indicated fiscal year.
(2) Represents value of company automobile given to employee.
(3) This amount includes $116,000 representing the value, as of the issue
date, of 200,000 Common Shares issued to Dr. Long in December 2002 in
connection with the termination of certain terms of his employment
agreement. It also includes $1,694 representing the value of personal
use of a company-owned automobile.
10
(b) Option Grants in 2004
The following table provides details with respect to stock options, if
any, granted to the named executive officers during the year ended December 31,
2004:
-------------------- ------------ ---------- ------------- ---------- -------------- ------------- ------------------------
Market Value
% of Total of Potential Realizable
Options Securities Value at Assumed Rates
Granted to Exercise Underlying of Share Price
Securities Employees Price Options on Appreciation for
Under in per the Date of Option Term
options Grant Financial Share Grant Expiration (US$)
Name Granted Date Year (US$) (US$) Date 5% 10%
-------------------- ------------ ---------- ------------- ---------- -------------- ------------- ------------------------
Alan J. Gotcher 50,000 05/18/04 3.0% 2.09 2.08 8/31/05 28,233 62,993
(Chief Executive
Officer and
Director)(1)
-------------------- ------------ ---------- ------------- ---------- -------------- ------------- ---------- -------------
Alan J. Gotcher 300,000 08/16/04 18.0% 1.02 1.02 8/16/14 84,542 186,816
(Chief Executive
Officer and
Director)
-------------------- ------------ ---------- ------------- ---------- -------------- ------------- ---------- -------------
(1) Mr. Gotcher was serving as an independent consultant, and not as an
officer or director, when the option was granted.
(c) Aggregated Option Exercises and Year-end Option Values
The following table provides information regarding options held by the
named executive officers as at December 31, 2004 and options exercised by them
during the year ended December 31, 2004:
------------------------------ ----------- ------------ ----------------------------- ------------------------------
Securities
Acquired Aggregate Number of Securities Value of Unexercised
on Value Underlying Unexercised In-the-Money Options at
Exercise Realized Options at December 31, 2004 December 31, 2004
----------- ------------ ----------------------------- ------------------------------
Exercisable Unexercisable Exercisable Unexercisable
Name (#) ($) (#) (#) ($) ($)
------------------------------ ----------- ------------ ------------- --------------- ------------- ----------------
Alan J. Gotcher, Chief Nil Nil 150,000 200,000 200,000 338,000
Executive Officer and
Director
------------------------------ ----------- ------------ ------------- --------------- ------------- ----------------
Rudi E. Moerck, Former Nil Nil 300,000 50,000 478,000 85,500
President and Director
------------------------------ ----------- ------------ ------------- --------------- ------------- ----------------
Douglas K. Ellsworth, Sr. Nil Nil 125,000 Nil 202,550 N/A
Vice President
------------------------------ ----------- ------------ ------------- --------------- ------------- ----------------
Edward H. Dickinson, Chief Nil Nil 384,700 Nil 253,850 N/A
Financial Officer
------------------------------ ----------- ------------ ------------- --------------- ------------- ----------------
Bruce J. Sabacky, Vice 25,000 62,500 30,000 Nil 48,700 N/A
President of Altair
Nanomaterials, Inc.
------------------------------ ----------- ------------ ------------- --------------- ------------- ----------------
11
(d) Compensation of Directors
The Corporation pays all directors who are not employees of the
Corporation a fee of $3,000 per quarter. In addition, directors who are not
employees and provide service in the following positions receive the following
additional fees:
Position Additional Compensation
------------------ -----------------------
Chairman of the Board $3,000 per quarter
Executive Committee Member $2,000 per quarter
Audit or Compensation Committee Chair $1,000 per quarter
Audit or Compensation Committee Member $1,000 per quarter
Other Committee Chair or Member Determined upon formation
of committee
In addition, directors are entitled to receive compensation to the
extent that they provide services to the Corporation at rates that would be
charged by such directors for such services to arm's length parties. No amounts
were paid Dr. Gotcher and Dr. Moerck in 2004 in their capacities as directors.
Directors of the Corporation and its subsidiaries are also entitled to
participate in the 1996 Plan and the 1998 Plan. During 2004, the Corporation
granted options to purchase 75,000 Common Shares to Mr. King and options to
purchase 75,000 Common Shares to Mr. Jones under the 1996 Plan. During 2004, the
Corporation granted options to purchase 75,000 Common Shares to Mr. Hartman,
options to purchase 75,000 Common Shares to Mr. Golla and options to purchase
75,000 Common Shares to Mr. Bazinet under the 1998 Plan.
(e) Employment Contracts
The Corporation has entered into employment agreements with Alan J.
Gotcher, Douglas K. Ellsworth, Edward H. Dickinson and Bruce J. Sabacky.
Dr. Gotcher's employment agreement commenced on August 16, 2004 with an
initial term of two years with an option for the Corporation to extend for one
additional year. His annual salary is $275,000 per year, and he is eligible to
receive an annual bonus equal to up to one-half of his base salary upon
achievement of performance measures mutually agreed to by Dr. Gotcher and the
Board. In connection with his employment agreement, Dr. Gotcher was granted
300,000 options to purchase the Common Shares as reflected above in "Option
Grants in 2004". If Dr. Gotcher's employment is terminated by the Corporation
without cause, he is entitled to receive his regular salary for a period of nine
months from the date of termination. His employment agreement also contains a
covenant not to compete for 12 months following termination of employment.
Mr. Ellsworth's employment agreement commenced on November 10, 2004
with a term of 18 months. His annual salary is $125,000. If Mr. Ellsworth's
employment is terminated by the Corporation without cause, he is entitled to
receive his regular salary for a period of nine months from the date of
termination. His employment agreement also contains a covenant not to compete
clause for 12 months following termination of employment.
Mr. Dickinson's employment agreement commenced on November 10, 2004
with a term of 18 months. His annual salary is $115,000. If Mr. Dickinson's
employment is terminated by the Corporation without cause, he is entitled to
receive his regular salary for a period of nine months from the date of
termination. His employment agreement also contains a covenant not to compete
clause for 12 months following termination of employment.
12
Dr. Sabacky's employment agreement commenced on November 10, 2004 with
a term of 18 months. His annual salary is $110,000. If Dr. Sabacky's employment
is terminated by the Corporation without cause, he is entitled to receive his
regular salary for a period of nine months from the date of termination. His
employment agreement also contains a covenant not to compete clause for 12
months following termination of employment.
(f) Compensation Committee Interlocks and Insider Participation
The Corporation established a Compensation Committee on November 10,
2003 to administer its executive compensation program. In April 2004, the Board
replaced the Compensation Committee with a Compensation, Corporate Governance
and Nominations Committee (the "Compensation and Nominating Committee") of the
Board. The Compensation and Nominating Committee consists of George Hartman
(Chair), James Golla and David King, each of whom is independent under Nasdaq's
listing standards applicable to such committee. If elected by the shareholders,
Messrs. Hartman, Golla and King are expected to be members of the Committee
during 2005.
In addition to evaluating and approving employment contracts for key
employees throughout the year, the Board, the Compensation Committee (prior to
April 2004) and the Compensation and Nominating Committee formally considered
compensation issues 12 times during the 2004 fiscal year in connection with the
authorization of grants of options to purchase Common Shares.
(g) Compensation Committee Report
Notwithstanding anything to the contrary set forth in any of the
Corporation's previous filings under the United States Securities Act of 1933,
as amended (the "Securities Act"), or the Exchange Act, that incorporates by
reference, in whole or in part, subsequent filings including, without
limitation, this Information Circular and Proxy Statement, the Compensation
Committee Report and the Performance Graph set forth below shall not be deemed
to be incorporated by reference into any such filings.
[to be added in definitive proxy]
The foregoing is submitted by the Compensation and Nominating
Committee:
George Hartman, Chair
James Golla
David King
(h) Performance Graph
The following chart compares the total cumulative shareholder return
over the five-year period ended December 31, 2004 for U.S. $100 invested in the
Common Shares with the total return of all shares traded on the NASDAQ National
Market and NASDAQ SmallCap Market (the "NASDAQ Index") and the total return of
shares included in the Standard & Poor's Specialty Chemicals Index (the "S&P
Specialty Chemicals Index"). All data assumes reinvestment of dividends and
other distributions.
[LINE-GRAPH REPRESENTATION "CUMULATIVE VALUE OF $100 INVESTMENT" - 12/31/99
THROUGH 12/312/04 - OMITTED]
12/31/99 12/31/00 12/31/01 12/31/02 12/31/03 12/31/04
-------- -------- -------- -------- -------- --------
Altair Nanotechnologies Inc. 100 38 35 13 66 68
Nasdaq Index 100 60 48 33 49 54
S&P Specialty Chemicals Index 100 87 81 47 55 63
13
Audit Committee and Audit Committee Report
------------------------------------------
Audit Committee(1)
The Audit Committee operates pursuant to a written charter adopted by
the Board. In April 2004, the Board amended and restated the charter of the
Audit Committee ("Committee"), a copy of which may be found on the Altair
Nanotechnologies Inc. website, http://www.altairnano.com under the heading
"Investor Relations." A copy may also be obtained free of charge by mailing a
request in writing to: Secretary, Altair Nanotechnologies Inc. 204 Edison Way,
Reno, Nevada 89502.
The Committee is comprised solely of non-employee directors, each of
whom has been determined by the Board to be independent under the requirements
of the NASDAQ listing standards. The Committee was comprised of Jon Bengtson,
George Hartman and James Golla during the period January 2004 through April 2004
and was comprised of Jon Bengtson, George Hartman and Christopher Jones during
the period May 2004 through December 2004. If elected by the shareholders, Jon
Bengtson, George Hartman and Christopher Jones are expected to be members of the
Committee during 2005. The Committee met four times via conference call during
the fiscal year ended December 31, 2004.
The Board has determined in its business judgment that each member of
the Committee satisfies the requirements with respect to financial literacy set
forth in NASD Rule 4350(d)(2)(A)(iv); and the Board has determined than Jon
Bengtson, the Chair of the Committee, is an "audit committee financial expert"
as such term is defined in Item 401(h) of Regulation S-K promulgated by the SEC,
is independent under Item 7(d)(3)(iv) of Schedule 14A under the Exchange Act and
is, as a result of his past employment experience in finance or accounting,
requisite professional certification in accounting or other comparable
experience or background, sophisticated with respect to financial matters.
The Committee's responsibility is to assist the Board in its oversight
of the (a) quality and integrity of the Corporation's financial reports, (b) the
independence and qualifications of the Corporation's independent auditor and (c)
the compliance by the Corporation with legal and regulatory requirements.
Management of the Corporation has the responsibility for the Corporation's
financial statements as well as the Corporation's financial reporting process,
principles and internal controls. The Corporation's independent auditors are
responsible for performing an audit of the Corporation's financial statements
and expressing an opinion as to the conformity of such financial statements with
generally accepted accounting principles.
Audit Committee Report
This section is not "soliciting material," is not deemed "filed" with
the Securities and Exchange Commission, and is not to be incorporated by
reference in any filing of the Corporation under the Securities Act of 1933 or
the Securities Exchange Act of 1934, each as amended, regardless of date or any
other general incorporation language in such filing.
In this context, the Committee has reviewed and discussed the audited
financial statements of the Corporation as of and for the year ended December
31, 2004 with management and the independent auditors. The Committee has
discussed with the independent auditors the matters required to be discussed by
Statement on auditing Standards No. 61 (Communication with Audit Committees), as
currently in effect. In addition, the Committee has received the written
disclosures and the letter from the independent auditors required by
Independence Standards Board Standard No. 1 (Independence Discussions with Audit
Committees), as currently in effect, and it has discussed with the independent
auditors their independence from the Corporation.
14
The Committee has also considered whether the independent auditor's
provision of non-audit services to the Corporation is compatible with
maintaining the auditors' independence.
The members of the Committee are not engaged in the accounting or
auditing profession and, consequently, are not experts in matters involving
auditing or accounting including in respect of auditor independence. As such, it
is not the duty of the Committee to plan or conduct audits or to determine that
the Corporation's financial statements fairly present the Corporation's
financial position and results of operation and are in accordance with generally
accepted accounting principles and applicable laws and regulations. Each member
of the Committee is entitled to rely on (i) the integrity of those persons
within the Corporation and of the professionals and experts (such as the
independent auditor) from which the Committee receives information, (ii) the
accuracy of the financial and other information provided to the Committee by
such persons, professionals or experts absent actual knowledge to the contrary
and (iii) representations made by management or the independent auditors as to
any information technology services of the type described in Rule 2-01(c)(4)(ii)
of Regulation S-X and other non audit services provided by the independent
auditor to the Corporation.
Based on the reports and discussions described above, the Committee
recommended to the Board that the audited financial statements be included in
the Corporation's Annual Report on form 10-K for the year ended December 31,
2004, for filing with the SEC.
AUDIT COMMITTEE
Jon Bengtson
George Hartman
Christopher Jones
_________, 2005
-----------------------------
Meetings of Directors and Attendance at Shareholders Meetings
-------------------------------------------------------------
During the fiscal year ended December 31, 2004, the Board held two
meetings in person and five via conference call. All directors attended the
in-person meeting and all directors participated in all conference calls with
the exception of Mr. Hartman, who was absent one conference call. In addition,
the Board considered and acted on various matters throughout the year by
executing eight consent resolutions.
The Corporation does not have a policy with respect to the attendance
of shareholder meetings by directors. All members of the Board attended the June
2004 shareholders meeting.
Nominating Committee
--------------------
The purpose of the Compensation and Nominating Committee is (i) to
discharge the Board's responsibilities relating to compensation of the
Corporation's executives and, if needed, to produce an annual report on
executive compensation for inclusion in the Corporation's proxy statement, in
accordance with the rules and regulations of the SEC and (ii) to recommend to
the Board the slate of director nominees for election to the Corporation's Board
of Directors, individuals to fill vacancies occurring between annual meetings of
stockholders, and individuals for nomination as members of the standing
committees of the Board and (iii) to develop and recommend to the Board a set of
corporate governance principles applicable to the Corporation.
15
In identifying nominees for directors, the Compensation and Nominating
Committee takes into consideration such factors as it deems appropriate. These
factors may include judgment, skill, diversity, experience with businesses and
other organizations of comparable size, relationship of work experience and
education to the current and proposed lines of business of the Corporation, the
interplay of the candidate's experience with the experience of other Board
members, and the extent to which the candidate would be a desirable addition to
the Board and any committees of the Board and the extent to which the candidate
satisfies any objective requirements (such as residence, independence or
expertise requirements) applicable to the Board or any committees of the Board.
The Compensation and Nominating Committee considers candidates submitted by
shareholders in accordance with the policies set forth in the most recent proxy
statement delivered to shareholders and may, but is not be required to, consider
candidates proposed by management.
The Compensation and Nominating Committee met 13 times during 2004 in
person or by telephone. The members of the Compensation and Nominating Committee
are George Hartman (Chair), James Golla and David King, each of whom are
independent under Nasdaq's listing standards. The charter governing operations
of the Compensation and Nominating Committee was adopted in April 2004 and is
available at our website at www.altairnano.com under "Investor Relations."
Shareholder Suggestions for Nominees and Communications with the Board of
Directors
The Board will consider director candidates recommended by
shareholders. Such recommendations should include the name, age, address,
telephone number, principal occupation or employment, background and
qualifications of the nominee and the name, address, telephone number and number
of Common Shares owned of the shareholder making the recommendation and should
be sent to the Secretary of the Corporation at the address first set forth
above. Candidates submitted by shareholders in accordance with the policies set
forth in the most recent proxy statement delivered to shareholders are
considered under the same standards as nominees recommended by other persons.
Shareholders may send communications to the Board or to specified
individual directors by mailing such communications to the Secretary of the
Corporation at the address of the Corporation first set forth above and
indicating that such communications are for the Board or specified individual
directors, as appropriate. All communications received by mail are forwarded to
the directors to which they are addressed unless the communications contain
information substantially similar to that forwarded by the same shareholder, or
an associated shareholder, within the past 90 days.
Section 16(a) Beneficial Ownership Reporting Compliance
-------------------------------------------------------
Section 16(a) of the Exchange Act requires the Corporation's officers
and directors to file reports concerning their ownership of Common Shares with
the SEC and to furnish the Corporation with copies of such reports. Based solely
upon the Corporation's review of the reports required by Section 16 and
amendments thereto furnished to the Corporation, the Corporation believes that
all reports required to be filed pursuant to Section 16(a) of the Exchange Act
during 2004, were filed with the SEC on a timely basis except as follows: (a) a
Form 3 for Christopher Jones, a Director, was due on May 11, 2004 but was filed
on May 12, 2004; (b) a Form 3 for Douglas Tullio, a Vice President, was due on
January 19, 2004, but was filed on January 20, 2004; (c) a Form 3 for David
King, a Director, was due on February 26, 2004 but was filed on March 29, 2004;
(d) a Form 4 for James Golla, a Director, was due on July 11, 2004 but was filed
on July 16, 2004; (e) a Form 4 for George Hartman, a Director, was due on July
11, 2004 but was filed on July 16, 2004; (f) a Form 4 for Alan Gotcher, Chief
Executive Officer, was due on August 18, 2004 but was filed on August 19, 2004;
(g) a Form 4 for Edward Dickinson, Chief Financial Officer, was due on September
9, 2004 but was filed on September 14, 2004; and (h) a Form 4 for Edward
Dickinson, Chief Financial Officer, was due on September 5, 2004 but was filed
on September 14, 2004.
16
Code of Ethics and Code of Conduct
----------------------------------
The Corporation has adopted the Code of Ethics for Senior Executive,
Financial Officers and Members of the Management Executive Committee (the "Code
of Ethics"), which constitutes a code of ethics that applies to the principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions, as defined in Item 406 of
Regulation S-K under the Securities Exchange Act of 1934. We have posted the
Code of Ethics on our website at www.altairnano.com under "Investor Relations."
The Corporation has adopted the Altair Nanotechnologies Inc. Code of
Conduct (the "Code of Conduct"), which constitutes a code of conduct applicable
to all officers, directors and employees that complies with Nasdaq Rule 4350(n).
We have posted the Code of Conduct on our website at www.altairnano.com under
"Investor Relations."
Certain Relationships and Related Transactions
----------------------------------------------
On December 31, 2003, we entered into a consulting agreement with
Advanced Technology Group LLC ("ATG"), whose managing partner is David King, a
director of the Corporation. The agreement stipulates that ATG will furnish
consulting services in reviewing potential federal grant opportunities and
providing proposal development assistance on selected programs for a period of
one year. Under the terms of the agreement, ATG is paid on a contingency basis
at a rate of 6%of the first $1,000,000 in grant monies secured from applications
prepared in any calendar year plus 3.5% of any cumulative amounts over
$1,000,000. ATG also agreed to provide consulting services at a rate of $200 per
hour upon request of the Corporation. In October 2004, we paid ATG $6,000 in
fees in connection with securing a $100,000 grant from the National Science
Foundation for development of nano-structured electrodes for use in lithium ion
ultra-capacitors. Also, in October 2004, we paid ATG $4,500 in fees for
consulting work in connection with product marketing.
On or about June 5, 2004, the Corporation entered into a settlement
agreement with Toyota on Western, Inc. and its owner, Louis Schnur, who were
significant shareholders of the Corporation. Pursuant to the settlement
agreement, we agreed to transfer to Mr. Schnur 100,000 Common Shares, amend
certain early termination provisions of a warrant, to register the re-sale of
certain Common Shares and release Mr. Schnur from all claims. In exchange, Mr.
Schnur and Toyota and Western agreed to release the Corporation from all claims
and to cease certain solicitation and communication activities for a period of
one year.
Effective May 1, 2004, the Corporation entered into a separation
agreement with William P. Long, wherein Dr. Long resigned as Chief Executive
Officer of the Corporation and resigned all his other positions with the
Corporation and its subsidiaries except for his position as President of Mineral
Recovery Systems, Inc., a subsidiary of the Corporation. Dr. Long's employment
in that capacity continued until December 31, 2004 at an annualized rate of
$175,000, his salary in effect prior to entering the separation agreement. Dr.
Long was also granted an extension, until 2007, of the expiration date of
200,000 options that would have otherwise expired in 2004 and 2005. In addition
to an agreement to provide consulting services to the Corporation, the
separation agreement included a 12-month noncompetition, nonsolicitation and
nondisparagement covenant as well as a release of claims.
On March 10, 2005, the Corporation granted 26,500 options to purchase
Common Shares to Edward Dickinson, 27,200 options to purchase Common Shares to
Douglas Ellsworth and 25,000 options to purchase Common Shares to Bruce Sabacky.
The Corporation has entered into employment agreements with Alan J.
Gotcher, Douglas K. Ellsworth, Edward H. Dickinson and Bruce J. Sabacky, each of
which are described under "Employment Contracts" above.
17
Vote Required
In connection with the election of directors, the [________] nominees
receiving the highest number of votes will be elected.
PROPOSAL NO. 2 -- RATIFICATION OF APPOINTMENT OF
INDEPENDENT PUBLIC ACCOUNTANTS
Ratification of the appointment by the Board of Deloitte & Touche LLP
as the independent public accountants for the Corporation for the fiscal year
ending December 31, 2005, and authorization of the Board to set their
remuneration, is to be voted upon at the Meeting. Representatives of Deloitte &
Touche LLP are not expected to be present at the Meeting.
Audit Fees. During the fiscal years ended December 31, 2003 and 2004, the
aggregate fees billed by Deloitte & Touche for the audit of the Corporation's
financial statements for such fiscal years, for the reviews of the Corporation's
interim financial statements and for the review of SEC registration statements
were $93,533 and $103,047, respectively.
Audit-Related Fees. During the fiscal years ended December 31, 2003 and 2004,
Deloitte & Touche did not bill the Corporation for assurance and related
services related to the performance of the audit or review beyond the fees
disclosed under "Audit Fees" above.
Tax Fees. During the fiscal years ended December 31, 2003 and 2004, the
Corporation did not pay to Deloitte & Touche any fees for tax compliance, advice
and planning.
All Other Fees. During the fiscal year ended December 31, 2003, the Corporation
did not pay Deloitte & Touche any other fees not reported above. During the
fiscal year ended December 31, 2004, the Corporation paid Deloitte & Touche
$118,903 of consulting fees in connection with the implementation requirements
of Section 404 of the Sarbanes - Oxley Act and $1,288 in connection with a
review of the Corporation's accounting policies for overhead costs.
Audit Committee Pre-Approval Policy. The Audit Committee pre-approves the
services provided to the Corporation by Deloitte & Touche in connection with the
audit of the Corporation's annual financial statements, the review of the
Corporation's quarterly financial statements and tax preparation and
consultation. Management is not permitted to engage Deloitte & Touche for other
audit or permitted non-audit services without the case-by-case pre-approval of
the Audit Committee.. The Audit Committee approved all the services provided to
the Corporation by Deloitte & Touche described above.
Vote Required and Recommendation of the Board of Directors
----------------------------------------------------------
The affirmative vote of a majority of the votes cast on this proposal
shall constitute ratification of the appointment of Deloitte & Touche LLP.
The Board recommends a vote FOR ratification of the appointment of
Deloitte & Touche LLP as independent public accountants for the fiscal year
ending December 31, 2005 and authorization of the board of directors to set
their remuneration.
PROPOSAL NO. 3 - APPROVAL OF ALTAIR NANOTECHNOLOGIES INC. 2005 STOCK INCENTIVE
PLAN
In ________, 2005, the Board approved, subject to shareholder approval,
the Altair Nanotechnologies Inc. 2005 Stock Incentive Plan (the "2005 Plan"),
pursuant to which the Board (or subcommittee thereof) will be authorized to
grant options and other incentive awards with respect to an aggregate of three
18
million Common Shares. If the 2005 Plan is approved by shareholders, the
authority of the Corporation to grant options with respect to the 834,500 Common
Shares available under the 1996 Plan and the 1998 Plan shall cease. Under rules
governing the Corporation's listing on the Nasdaq SmallCap Market, the
Corporation is required to seek shareholder approval for the 2005 Plan. Such
approval is also required in order for the Corporation to be able to grant
incentive stock options under the 2005 Plan.
The Board of the Corporation believes that the availability of stock
options and other incentives is an important factor in the Corporation's ability
to attract and retain qualified employees and to provide an incentive for them
to exert their best efforts on behalf of the Corporation. The Corporation has,
and may periodically continue to, use stock options and other incentive awards
to compensate consultants that provide services to the Corporation.
Description of the 2005 Stock Incentive Plan
The following summary of the 2005 Plan is qualified in its entirety by
reference to the full text of the 2005 Plan , a copy of which is available from
the Corporation upon request.
Shares Reserved for Issuance Under the 2005 Plan. The Corporation has reserved a
total of three million Common Shares for issuance under the 2005 Plan. The
number and kind of shares available for grants under the 2005 Plan will be
adjusted proportionately by the Board if the number of outstanding Common Shares
is hereafter increased or decreased or changed into or exchanged for a different
number or kind of shares or other securities of the Corporation by reason of any
stock split, combination of shares, dividend payable in shares, recapitalization
or reclassification. As of March 17, 2005, the closing sale price of the Common
Shares, as reported by the Nasdaq SmallCap Market, was $4.20 per share.
Types of Awards. The 2005 Plan authorizes the Board to grant incentive stock
options, non-incentive stock options, stock bonuses, restricted stock and
performance-based awards.
Eligibility. Grants under the 2005 Plan may, at the discretion of the Board, be
awarded to directors, officers and employees and non-employee agents,
consultants, advisers and independent contractors of the Corporation or any
parent or subsidiary of the Corporation. The Corporation currently has 8
directors, 27 employees and officers, and an indeterminable number of
consultants and advisers who could be eligible to receive grants under the 2005
Plan.
Administration. The Board administers the 2005 Plan. Subject to the terms of the
2005 Plan, the Board may from time to time adopt and amend rules and regulations
relating to the administration of the 2005 Plan, advance the lapse of any
waiting period, accelerate any exercise date, waive or modify any restriction
applicable to shares (except those restrictions imposed by law) and make all
other determinations in the judgment of the Board necessary or desirable for the
administration of the 2005 Plan. The Board may delegate to a committee of the
Board any or all authority for administration of the 2005 Plan other than the
right to amend or terminate the 2005 Plan.
Amendment and Termination of the 2005 Plan. The Board may amend the 2005 Plan at
any time in any respect, subject to any legal or regulatory restriction. Except
for changes in outstanding options in connection with changes in capital
structure and Significant Transactions (as defined blow), no change in an option
already granted may be made without the consent of the holder of the option. The
2005 Plan will terminate when all shares reserved for issuance under the 2005
Plan have been issued and all restrictions on such shares have lapsed or when
earlier terminated by the Board.
19
Description of Stock Options
Options Terms. With respect to each option grant, the Board determines
the number of shares subject to the option, the exercise price, the term of the
option and the time or times at which the option may be exercised. At the time
of the grant of an option or at any time thereafter, the Board may provide that
an optionee who exercised an option to purchase Common Shares shall
automatically receive a new option to purchase additional shares equal to the
number of shares surrendered and may specify the terms and conditions of such
new options.
Exercise of Options. Except as described under "Termination of
Employment, Disability or Death" below or as determined by the Board, an option
may not be exercised unless, when exercised, the optionee is an employee of, or
is providing service to, the Corporation or any subsidiary of the Corporation
and has been continuously so employed or providing service since the date the
option was granted. Absence on leave approved by the Corporation, parent or
subsidiary or on account of illness or disability is not deemed a termination or
interruption of employment or service for this purpose. Unless otherwise
determined by the Board, vesting of options continues during a medical, family
or military leave of absence, whether paid or unpaid, and vesting of options is
suspended during any other unpaid leave of absence.
When exercising an option, the optionee must pay the full purchase
price in cash or check unless the Board determines otherwise. Subject to the
approval of the Board, which may be withheld for any or no reason, an optionee
may pay for all or some of the shares with Common Shares of the Corporation
valued at fair market value, restricted stock, performance units or other
contingent awards denominated in either stock or cash or other forms of
consideration. The 2005 Plan permits the Board to accept promissory notes as
consideration for stock options; however promissory notes are generally not
sufficient consideration for the issuance of Common Shares under the CBCA.
Termination of Employment, Disability or Death. Unless otherwise
determined by the Board at any time, if an optionee ceases to be employed by or
to provide service to the Corporation, any parent or subsidiary of the
Corporation for any reason other than death or total disability, the optionee
may exercise any option then held at any time prior to the earlier of its
expiration date or 30 days following the termination date, but only if and to
the extent the option was exercisable as of the termination date. Any portion of
an option not exercisable at the date of termination lapses.
Unless otherwise determined by the Board, if the optionee's employment
or service terminates because of total disability, the optionee may exercise any
option then held at any time prior to the earlier of its expiration date or 12
months after the date of termination, but only to the extent the option was
exercisable on the date of termination.
Unless otherwise determined by the Board, if an optionee dies while in
the employment of or providing services to the Corporation or any parent or
subsidiary of the Corporation, the option then held may be exercised by the
optionee's legal heirs at any time prior to the earlier of its expiration date
or 12 months after the date of death, but only if and to the extent the option
was exercisable as of the date of death.
Non-Transferability of Options. Unless otherwise determined by the
Board at any time, each stock option granted under the 2005 Plan by its terms is
nonassignable and nontransferable by an optionee, either voluntarily or by
operation of law, other than by will or the laws of descent or distribution upon
the death of an optionee. An option may be exercised only by an optionee or,
after death, by a successor or representative of an optionee.
20
Merger, Reorganization, Dissolution, Stock Split or Similar Event. In
the event of a merger, consolidation, plan of exchange, acquisition of property
or stock, split-up, split-off, spin-off, reorganization or liquidation to which
the Corporation is a party or any sale, lease, exchange or other transfer (in
one transaction or a series of related transactions) of all, or substantially
all, of the assets of the Corporation, or the transfer by one or more
shareholders, in one transfer or several related transfers, of 50% of more of
the Common Shares outstanding on the date of such transfer (or the first of such
related transfers) to persons, other than wholly-owned subsidiaries or family
trusts, who were not shareholders of the Corporation prior to the first such
transfer (each, a "Significant Transaction"), the Board shall, in its sole
discretion and to the extent possible under the structure of the Significant
Transaction, select one of the following alternatives for treating outstanding
options under the 2005 Plan:
o Outstanding options shall remain in effect in accordance with
their terms;
o Outstanding options shall be converted into options to purchase
stock in one or more of the corporations, including the
Corporation, that are the surviving or acquiring corporations in
the Significant Transaction (with the amount, type of securities
subject thereto and exercise price of the converted options being
determined by the Board taking into account the relative values of
the companies involved in the Significant Transaction)
o The Board shall provide a period at least 10 days before the
completion of the Significant Transaction during which outstanding
options may be exercised to the extent then exercisable, and upon
the expiration of that period, all unexercised options shall
immediately terminate. (The Board may, in its sole discretion,
accelerate the exercisability of options so that they are
exercisable in full during that period.)
In the event of the dissolution of the Corporation, options will be treated as
provided in the immediately preceding paragraph.
Stock Bonuses and Restricted Stock.
The Board may award Common Shares under the 2005 Plan as stock bonuses
or as restricted stock. Shares awarded as a bonus or as restricted stock are
subject to the terms, conditions and restrictions determined by the Board,
including restrictions concerning transferability and forfeiture of the shares
awarded. The Board may require the recipient to sign an agreement as a condition
of the award, which agreement shall contain any terms, conditions, restrictions,
representations and warranties required by the Board. The certificates
representing the shares shall bear any legends required by the Board.
Performance-based Awards.
Under the 2005 Plan, the Board may grant performance-based awards.
These awards are intended to qualify as qualified performance-based compensation
under Section 162(m) of the Internal Revenue Code (the "Code") and regulations
thereunder. Performance-based awards shall be denominated at the time of grant
either in Common Shares or in dollar amounts. Performance-based awards may be
granted in whole or in part if the Corporation achieves written objective goals
established by the Board over a designated period of time. Payment of an award
earned may be in cash or stock or both as determined by the Board. In addition
to the requirement that participants satisfy certain performance goals, the
Board may impose additional restrictions to payment under a performance-based
award.
21
No participant may receive in any fiscal year stock-based performance
awards under which the aggregate amount payable under the awards exceeds the
equivalent of 500,000 Common Shares or cash-based performance awards under which
the aggregate amount payable exceeds $1,000,000.
United States Federal Income Tax Consequences
The following is a general discussion of certain United States federal
income tax consequences of stock options granted under the 2005 Plan. The
discussion does not describe any tax consequences under the tax laws of any
state, locality or foreign jurisdiction and does not include any tax
consequences associated with any awards other than stock options. Furthermore,
the discussion is based on the provisions of the Internal Revenue Code (the
"Code") and regulations, rulings and judicial decisions thereunder as of the
date hereof, and such authorities may be repealed or modified retroactively so
as to result in federal income tax consequences different from those discussed
below. The discussion below does not discuss all federal tax consequences that
may be relevant to a particular grantee, and is not intended as tax advice. Each
grantee should consult his or her individual tax adviser.
Options
Incentive Options. No income is recognized by the grantee of an
incentive stock option upon the grant or timely exercise of the incentive stock
option. Exercise of an incentive stock option may, however, give rise to taxable
ordinary income to the optionee if the optionee subsequently engages in a
"disqualifying disposition," as described below. Additionally, the spread
between the fair-market value of shares obtained upon exercise of an incentive
stock option and the exercise price normally is an adjustment to alternative
minimum taxable income and may result in the optionee having to pay federal
alternative minimum tax for the year of exercise.
A sale, exchange or disposition by an optionee of Common Shares
acquired through the exercise of an incentive stock option more than one year
after the transfer of the shares to such optionee and more than two years after
the date of grant of the incentive stock option will result in any difference
between the net sale proceeds and the exercise price being treated as long-term
capital gain (or loss) to the optionee. If such a sale, exchange or disposition
(including inter vivos gifts) takes place within two years after the date of
grant of the incentive stock option or within one year from the date of exercise
of the incentive stock option, such sale or exchange will generally constitute a
"disqualifying disposition" of the Common Shares.
A disqualifying disposition will have the following results: any excess
of (i) the lesser of (a) the fair market value of one Common Share at the time
of exercise of the incentive stock option or (b) the amount realized on a
disqualifying disposition of the Common Shares through sale; less (ii) the
exercise price, will be ordinary income to the optionee, subject to applicable
tax reporting requirements. Any further gain generally will qualify as capital
gain, and will be long-term capital gain if the holding period for such Common
Shares is more than one year from the date of exercise.
Non-Incentive Options. Provided that the exercise price is not less
than the fair market value of the underlying stock on the date of grant, no
income is recognized by the grantee of a non-incentive stock option until the
non-incentive option is exercised. When the non-incentive stock option is
exercised, the optionee recognizes ordinary compensation income, and the
Corporation generally becomes entitled to a deduction, in the amount by which
the fair market value of the shares subject to the non-incentive stock option at
the time of exercise exceeds the exercise price. With respect to non-incentive
options exercised by certain executive officers, the Corporation's deduction can
22
in certain circumstances be limited by the $1,000,000 cap on deductibility set
forth in Section 162(m) of the Code. The Corporation is required to withhold on
all amounts treated as ordinary income to optionees who are employees of the
Corporation or an affiliate of the corporation. Upon the sale of shares acquired
by exercise of a stock option, the optionee generally will recognize capital
gain or loss measured by the difference between the sale proceeds and the fair
market value of the shares on the date of exercise. That gain or loss will be
long-term if shares have been held for more than one year.
Canadian Income Taxation
If an optionee is a resident of the United States and not a resident of
Canada, and if the optionee has not been employed in Canada, (i) neither the
receipt nor the exercise of a stock option will give rise to federal Canadian
income tax liability and (ii) the sale of the underlying Common Shares generally
will not be subject to federal Canadian income tax unless (a) the optionee and
the optionee's affiliates owned, at any time in the five year period before
sale, 25% or more of the outstanding Common Shares, or (b) if the Common Shares
are used in carrying on a business in Canada.
Restrictions on Transferability of Shares
The Corporation is not obligated to cause to be issued or delivered any
certificates evidencing Common Shares pursuant to the 2005 Plan unless and until
the Corporation is advised by its counsel that the issuance and delivery of such
certificates is in compliance with all applicable laws and regulations of any
governmental authority and the requirements of any securities exchange on which
Common Shares are traded. The Corporation may require, as a condition of the
issuance and delivery of certificates evidencing Common Shares pursuant to the
2005 Plan, that the recipient of such shares make such covenants, agreements and
representations, and that such certificates bear such legends as the
Corporation, in its sole discretion, deems necessary or desirable.
Securities Authorized for Issuance Under Equity Compensation Plans
In addition to the existing 1996 Plan and 1998 Plan, the Corporation
has an Employee Stock Purchase Plan ("ESPP") which allows employees to purchase
common shares through payroll deductions when, as and if determined by our board
of directors. The ESPP, which is a broadly-based plan open to all employees,
other than executive officers, has not been approved by shareholders. The
following table sets forth certain information with respect to compensation
plans under which equity securities are authorized for issuance at December 31,
2004 (without giving effect to the approval of the 2005 Plan):
23
---------------------------------- -------------------- -------------------- -----------------------
Number of securities
Number of remaining available
securities to be for future issuance
issued upon Weighted-average under equity
exercise of exercise price of compensation plans
outstanding outstanding (excluding securities
options, warrants options, warrants reflected in column
and rights and rights (a))
Plan Category (a) (b) (c)
---------------------------------- -------------------- -------------------- -----------------------
Equity compensation plans 3,293,700 $2.28 1,048,000(1)
approved by security holders
---------------------------------- -------------------- -------------------- -----------------------
Equity compensation plans not
approved by security holders None N/A 348,552
---------------------------------- -------------------- -------------------- -----------------------
Total 3,293,700 $2.28 1,396,552
---------------------------------- -------------------- -------------------- -----------------------
(1) During the period January 1, 2005 through March 18, 2005, the Corporation
granted to employees 213,500 options to purchase Common Shares.
If the 2005 Plan is approved by shareholders, the authority of the Corporation
to grant options with respect to the 834,500 Common Shares currently available
under the 1996 Plan and the 1998 Plan shall cease.
New Plan Benefits
No awards have been granted under the 2005 Plan. The Corporation is
unable to determine the amount of awards that may be granted in the future to
its officers, directors or affiliates, inasmuch as grants of awards are subject
to the discretion of the Board.
Vote Required for Approval and Recommendation by the Board
The Board recommends a vote FOR approval of the 2005 Plan. The proposal
to approve the 2005 Plan must be approved by the holders of at least a majority
of the votes cast at the Meeting. Abstentions and broker nonvotes are counted
for purposes of determining whether a quorum exists at the Meeting but are not
counted and have no effect on the results of the vote.
PROPOSAL NO. 4 - APPROVAL OF BYLAW AMENDMENT TO INCREASE QUORUM
REQUIREMENT FOR SHAREHOLDER MEETINGS
The Proposed Bylaw Amendment.
Prior to September 30, 2004, Section 14 of the bylaws of the
Corporation (the "Bylaws") provided that a quorum would be present at a meeting
of the shareholders if two shareholders were present, in person or by proxy, at
the shareholders meeting. On September 30, 2004, the Board approved an Bylaw
amendment to the Bylaws (the "Bylaw Amendment") replacing the quorum requirement
in Section 14 of the Bylaws with the following:
A quorum of shareholders for the transaction of business is present at
a meeting of shareholders if not less than 33 ? of the shares entitled
to vote at the meeting are present in person or represented by proxy.
24
The Bylaw Amendment does not affect any other provisions of the Bylaws. The
Bylaw Amendment was effective when adopted, and applies to the Meeting; however,
under the CBCA, the Corporation is required to seek ratification of shareholders
of any amendment to the Bylaws at the next shareholders meeting. If the Bylaw
Amendment is not approved by the shareholders at the Meeting, it will cease to
be effective.
Purpose and Effect of Bylaw Amendment.
The purpose of the Bylaw Amendment is to increase the quorum
requirement for shareholders meetings from two shareholders to a number of
shareholders holding 33 ? of the shares entitled to vote at the shareholders
meeting. The Board approved the Bylaw Amendment, and is recommending approval of
the Bylaw Amendment to the shareholders of the Corporation, in order to comply
with rules governing its listing on the Nasdaq SmallCap Market.
Prior to September 30, 2004, the Corporation relied upon an exemption
from the requirements of Nasdaq Stock Market Rule 4350(f). Nasdaq Stock Market
Rule 4350(f) requires that each issuer have a minimum quorum requirement for its
shareholders meetings of at least 33?% of the outstanding shares of its voting
stock. Altair requested, and relied upon, the exemption from Nasdaq Stock Market
Rule 4350(f) prior to September 30, 2004 on the basis that a greater quorum
requirement would be contrary to generally accepted business practices in Canada
and under the CBCA. In light of changes in rules and policies governing the
NASDAQ SmallCap Market, the Corporation became concerned in 2004 that it would
cease to qualify for the exemption it had previously received from Nasdaq Stock
Market Rule 4350(f). In anticipation of that possibility, the Board approved the
Bylaw Amendment in order to bring the quorum requirement set forth in the Bylaws
into compliance with Nasdaq Stock Market Rule 4350(f).
Vote Required for Approval and Recommendation by the Board
The Board recommends a vote FOR the proposed Bylaw Amendment. The Bylaw
Amendment must be approved by the holders of at least a majority of the votes
cast at the Annual Meeting. Abstentions and broker nonvotes are counted for
purposes of determining whether a quorum exists at the Annual Meeting but are
not counted in connection with, and have no effect on the results, of the vote.
OTHER MATTERS
Proposals of Shareholders
-------------------------
Pursuant to rules adopted by the SEC, if a shareholder intends to
propose any matter for a vote at the Meeting but failed to notify the
Corporation of such intention prior to [45 days prior to mailing], then a proxy
solicited by the Board may be voted on such matter in the discretion of the
proxy holder, without discussion of the matter in the proxy statement soliciting
such proxy and without such matter appearing as a separate item on the proxy
card.
In order to be included in the proxy statement and form of proxy
relating to the Corporation's annual meeting of shareholders to be held in 2006,
proposals which shareholders intend to present at such annual meeting must be
received by the corporate secretary of the Corporation, at the Corporation's
principal business office, 204 Edison Way, Reno, Nevada 89502, no later than
[anniversary of 120 days prior to mailing]. If a shareholder intends to propose
any matter for a vote at the Corporation's annual meeting of shareholders to be
held in the 2006 calendar year, but fails to notify the Corporation of such
intention prior to [anniversary of 45 days prior to mailing], then a proxy
solicited by the Board may be voted on such matter in the discretion of the
proxy holder, without discussion of the matter in the proxy statement soliciting
such proxy and without such matter appearing as a separate item on the proxy
card.
25
Undertakings
------------
Unless the Corporation has received contrary instructions, the
Corporation intends to deliver only one copy of this Information Circular and
one copy of the Annual Report for the year ended December 31, 2004 to multiple
shareholders sharing the same address. Upon written or oral request, the
Corporation will provide, without charge, an additional copy of such documents
to each shareholder at a shared address to which a single copy of such documents
was delivered. Shareholders at shared addresses that are receiving a single copy
of such documents but wish to receive multiple copies, and shareholders at
shared addresses that are receiving multiple copies of such documents but wish
to receive a single copy, should contact Edward Dickinson, Chief Financial
Officer, at 204 Edison Way, Reno, Nevada, 89502, U.S.A., or at the following
telephone number: (775) 858-3750.
Upon written or oral request, the Corporation will provide, without
charge, to each person to whom a copy of this Information Circular has been
delivered, a copy of the Corporation's Annual Report on Form 10-K for the year
ended December 31, 2004 filed with the SEC (other than the exhibits except as
expressly requested). Requests should be directed to Edward Dickinson, Chief
Financial Officer, at 204 Edison Way, Reno, Nevada, 89502, U.S.A., or at the
following telephone number: (775) 858-3750.
* * * * * * * * *
The contents and sending of this Information Circular have been
approved by the directors of the Corporation.
DATED as of the __th day of April, 2005.
ALTAIR NANOTECHNOLOGIES INC.
/s/ Alan J. Gotcher
------------------------------------------
Alan J. Gotcher, Chief Executive Officer
26
PROXY
Altair Nanotechnologies Inc.
Annual and Special Meeting Of Shareholders
on
May 26, 2005
This Proxy Is Solicited By The Board of Directors Of
Altair Nanotechnologies Inc.
The undersigned shareholder of Altair Nanotechnologies Inc. (the
"Corporation") hereby nominates, constitutes and appoints Alan J. Gotcher, Chief
Executive Officer and director, or failing him, Edward Dickinson, Chief
Financial Officer, or instead of any of them, ___________________________, as
nominee of the undersigned to attend and vote for and on behalf of the
undersigned at the annual and special meeting of shareholders of the Corporation
(the "Meeting") to be held on the 26th day of May, 2005 and at any adjournment
or adjournments thereof, to the same extent and with the same power as if the
undersigned were personally present at the said meeting or such adjournment or
adjournments thereof, and without limiting the generality of the power hereby
conferred, the nominees are specifically directed to vote the shares represented
by this proxy as indicated below.
The shares represented by this proxy will be voted and, where a choice
is specified, will be voted as directed. Where no choice is specified, this
proxy will confer discretionary authority and will be voted in favour of all
nominees of the Board of Directors, in favour of the ratification of the
appointment of auditors, in favour of the 2005 Stock Incentive Plan and in
favour of the proposed bylaw amendment.
This proxy also confers discretionary authority to vote in respect of
any amendments or variations to the matters identified in the Notice of Meeting,
matters incident to the conduct of the Meeting and any other matter which may
properly come before the Meeting about which the Corporation did not have notice
as of the date the definitive Information Circular and Proxy Statement of the
Corporation was filed with the SEC and in such manner as such nominee in his
judgement may determine.
A shareholder has the right to appoint a person to attend and act for
him and on his behalf at the Meeting other than the persons designated in this
form of proxy. Such right may be exercised by filling the name of such person in
the blank space provided and striking out the names of management's nominees, or
by completing another proper form of proxy and, in either case, depositing the
proxy as instructed below.
To be valid, this proxy must be received by the transfer agent at 120
Adelaide Street West, Suite 420, Toronto, Ontario M5H 4C3, Canada not later than
48 hours (excluding Saturdays and holidays) before the time of holding the
Meeting or adjournment thereof, or delivered to the chairman on the day of the
Meeting or adjournment thereof.
The nominees are directed to vote the shares represented by this proxy
as follows:
(1) ELECTION OF DIRECTORS, each to serve until the next annual meeting
of shareholders of the Corporation and until their respective
successor shall have been duly elected and shall qualify:
[ ] FOR all nominees listed below (except as marked to the
contrary).
[ ] WITHHOLD AUTHORITY to vote for all nominees listed below.
[ ] (INSTRUCTION: To withhold authority to vote for any
individual nominee, strike a line through the nominee's name
in the list below.)
[to be added in definitive filing]
[See Reverse Side]
(2) Proposal to ratify the appointment of Deloitte & Touche LLP as
independent auditors of the Corporation for the fiscal year ending
December 31, 2005 and to authorize the board of directors to fix their
remuneration.
[ ] FOR [ ] AGAINST [ ] WITHHOLD
(3) Proposal to approve the Altair Nanotechnologies Inc. 2005 Stock
Incentive Plan. [ ] FOR [ ] AGAINST [ ] WITHHOLD
(4) Proposal to approve the Bylaw Amendment increasing the quorum
requirement for shareholders meeting from two shareholders to 33 1/3%
of the shares entitled to vote at the meeting.
[ ] FOR [ ] AGAINST [ ] WITHHOLD
(5) At the nominee's discretion upon any amendments or variations to
matters specified in the notice of the Meeting, matters incident to the
conduct of the Meeting, and upon any other matters as may properly come
before the Meeting or any adjournments thereof about which the
Corporation did not have notice as of the date45 days before the date
on which the Corporation first mailed proxy materials to shareholders.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE
INSTRUCTIONS GIVEN ON ANY VOTE OR BALLOT CALLED AT THE MEETING. UNLESS A
SPECIFIC INSTRUCTION IS INDICATED, SAID SHARES WILL BE VOTED IN FAVOR OF ALL
NOMINEES OF THE BOARD OF DIRECTOR, AND IN FAVOUR OF RATIFICATION OF THE
APPOINTMENT OF AUDITORS, THE APPROVAL OF THE 2005 STOCK INCENTIVE PLAN AND
APPROVAL OF THE BYLAW AMENDMENT, ALL OF WHICH ARE SET FORTH IN THE
ACCORPORATIONING CIRCULAR, RECEIPT OF WHICH IS HEREBY ACKNOWLEDGED.
This proxy revokes and supersedes all proxies of earlier date.
DATED this ____ day of ________________ , 2005.
PRINT NAME: _______________________________
SIGNATURE: ________________________________
NOTES:
(1) This proxy must be signed by the shareholder or his attorney duly
authorized in writing, or if the shareholder is a corporation, by the
proper officers or directors under its corporate seal, or by an officer
or attorney thereof duly authorized.
(2) A person appointed as nominee to represent a shareholder need not be a
shareholder of the Corporation.
(3) If not dated, this proxy is deemed to bear the date on which it was
mailed on behalf of the management of the Corporation.
(4) Each shareholder who is unable to attend the Meeting is respectfully
requested to date and sign this form of proxy and return it using the
self-addressed envelope provided.
ALTAIR NANOTECHNOLOGIES INC.
NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that an annual and special meeting (the
"Meeting") of the shareholders of Altair Nanotechnologies Inc. (the
"Corporation") will be held at the Reno Hilton, 2500 E. 2nd Street, Reno, Nevada
89502, Thursday, the 26th day of May 2005, at the hour of 10:00 o'clock in the
morning (Pacific time) for the following purposes:
(1) To receive the audited financial statements of the Corporation for the
twelve months ended December 31, 2004, together with the report of the
auditors thereon;
(2) To elect directors;
(3) To ratify the appointment of the appoint auditors and to authorize the
directors to fix their remuneration;
(4) To consider and vote upon the proposal to approve the Altair
Nanotechnologies Inc. 2005 Stock Incentive Plan.
(5) To consider and vote upon the proposal to approve a bylaw amendment
increasing the quorum requirement for shareholders meeting from two
shareholders to 33 ? of the shares entitled to vote at the meeting.
(6) To transact such further or other business as may properly come before
the Meeting or any adjournment or adjournments thereof.
This notice is accompanied by a form of proxy, a copy of the
Circular, the annual report to shareholders of the Corporation containing the
audited consolidated financial statements of the Corporation for the fiscal year
ended December 31, 2004, and a supplemental mailing list form.
Shareholders who are unable to attend the Meeting in person are
requested to complete, date, sign and return the enclosed form of proxy so that
as large a representation as possible may be had at the Meeting.
DATED at Toronto, Ontario as of the ____ day of May, 2005.
BY: ORDER OF THE BOARD
(Sgd.) Alan J. Gotcher
-------------------------------------
Chief Executive Officer