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Title:

Proxy Statement

Entities:

International Absorbents Inc.

Date:

2002

Size:

110KB total

Price:

$49

ID:

#818637

 

 

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Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


PROXY STATEMENT

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934.

         
Filed by the Registrant:   (X BOX)
Filed by a Party other than the Registrant:   (BOX)
Check the Appropriate Box:    
(BOX)   Preliminary Proxy Statement
(BOX)   Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
(X BOX)   Definitive Proxy Statement
(BOX)   Definitive Additional Materials
(BOX)   Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

International Absorbents Inc.
1569 Dempsey Road
North Vancouver, British Columbia, Canada V7K 1S8

(Exact name of Registrant as specified in its charter)

Not Applicable
(Name of Person(s) Filing Proxy Statement if other than the Registrant)

British Columbia, Canada
(Jurisdiction of Incorporation or Organization)

Payment of Filing Fee (Check the appropriate box):

     
(X BOX)   No Fee Required
(BOX)   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 transaction:
   
    5. Total fee paid:
   
(BOX)   Fee paid previously with preliminary materials.
(BOX)   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 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:
   

 


TABLE OF CONTENTS

NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS
PROXY STATEMENT
RECORD DATE AND OUTSTANDING SHARES
APPOINTMENT AND REVOCATION OF PROXIES
QUORUM; ABSTENTIONS; BROKER NON-VOTES
VOTING OF PROXIES
ANNUAL REPORT
CONSOLIDATION
PRINCIPAL SHAREHOLDERS AND
SHARE OWNERSHIP OF MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
THE AUDIT COMMITTEE REPORT
FINANCIAL STATEMENTS
AUDITORS
STOCK OPTION GRANTS
STOCK OPTION PLANS
SPECIAL BUSINESS
OTHER MATTERS
FORWARD-LOOKING STATEMENTS
PROPOSALS OF SHAREHOLDERS
BOARD APPROVAL
SCHEDULE A
Description of the 2003 Stock Option Plan for U.S. Participants
Certain U.S. Federal Income Tax Information
Certain Canadian Federal Income Tax Information
SCHEDULE B
Certain Canadian Federal Income Tax Information
Certain U.S. Federal Income Tax Information
SUPPLEMENTAL MAILING LIST RETURN CARD
Form of Proxy
INSTRUCTIONS FOR COMPLETION OF PROXY


Table of Contents

International Absorbents Inc.

Products and Technology for the Good of the Environment"

May 24, 2002

 

Dear Shareholder:

I am pleased to invite you to the Annual and Special Meeting of Shareholders (the Meeting) of INTERNATIONAL ABSORBENTS INC. (IABI) on Thursday, June 27, 2002, at 10:00 AM, Pacific Savings Time, at the Xchange Conference Centre, 2nd Floor, 888 Dunsmuir Street, Vancouver, British Columbia, Canada.

Important information concerning the matters to be acted upon at the Meeting is contained in the accompanying Notice of Annual and Special Meeting of Shareholders and the Proxy Statement. After careful consideration, our Board of Directors has unanimously approved the proposals described in the Proxy Statement and recommends that you vote FOR each proposal.

The Board of Directors has fixed the close of business as of May 9, 2002 as the record date for determining those shareholders who are entitled to notice of and to vote at the meeting and any adjournment thereof.

Your vote is important. Registered shareholders can vote their shares over the Internet, by using a toll-free telephone number, faxing or by mailing back a traditional proxy card. Voting over the Internet, by telephone, by fax or written proxy will ensure your representation at the Meeting if you do not attend in person. Instructions for using these convenient services are provided on the back of the Form of Proxy and the information card enclosed. Mailing your completed proxy card or using the Internet, fax or telephone voting procedures will not prevent you from voting in person at the Meeting if you wish to do so.

Our Board of Directors and members of management look forward to meeting personally those shareholders who attend the Meeting.

A copy of our Annual Report to Shareholders for the fiscal year 2002 is included in this mailing to all shareholders entitled to notice of and to vote at the Meeting.

Sincerely,

/s/ Gordon Ellis

Gordon L. Ellis
Chairman and Chief Executive Officer

     
Corporate Office:
1569 Dempsey Rd.
N. Vancouver, BC V7K 1S8
  Sales/Manufacturing:
1051 Hilton Avenue
Bellingham, WA 98225
     
Tel: (604) 681-6181
Fax: (604) 904-4105
  Tel: (360) 734-7415
Fax: (360) 671-1588
www.absorbent.com

 


Table of Contents

INTERNATIONAL ABSORBENTS INC.
1569 Dempsey Road,
North Vancouver, British Columbia
Canada V7K 1S8

NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS

To be Held Thursday June 27, 2002

NOTICE IS HEREBY GIVEN that the Annual and Special Meeting (the Meeting) of the shareholders of International Absorbents Inc. (the Company), a corporation incorporated under the laws of British Columbia, Canada, will be held at the Xchange Conference Centre, 2nd Floor, 888 Dunsmuir Street, Vancouver, British Columbia, Canada on Thursday, June 27, 2002 at 10:00 a.m. (Pacific time) for the following purposes:

1.   To elect the following persons as Class I Directors of the Company to serve for a term of two years and until their successors are duly elected:

  Gordon L. Ellis
 
Douglas E. Ellis
 
Shawn M. Dooley

2.   To appoint Moss Adams, Chartered Accountants, as the Companys independent public auditors for the fiscal year ending January 31, 2003.
 
3.   To approve the granting of stock options to directors and officers of the Company.
 
4.   To approve the 2003 Stock Option Plan for U.S. Participants and authorize the reservation of 600,000 Common Shares for issuance under the plan.
 
5.   To approve the 2003 Equity Stock Option Plan and authorize the reservation of 500,000 Common Shares for issuance under the plan.
 
6.   To approve a special resolution that the Company amalgamate with Total Absorb Inc., and the amalgamated company be called International Absorbents Inc.

The Board of Directors has fixed the close of business on May 9, 2002 as the record date for the determination of shareholders entitled to notice of and to vote at the Meeting or any adjournment(s) thereof.

Whether or not you expect to attend the Meeting in person, shareholders are urged to complete, sign, date and return the enclosed Form of Proxy in the enclosed envelope. A proxy will not be valid unless it is received at the office of the Transfer Agent, Pacific Corporate Trust Company, 10th Floor, 625 Howe Street, Vancouver, British Columbia, Canada V6C 3B6, not less than 48 hours (excluding Saturdays, Sundays and holidays) before the time fixed for the Meeting. A form of Proxy received at the offices of the Transfer Agent or Company after this time, but prior to the Meeting, may be accepted or rejected as late, at the discretion of the Chairman. Your form of Proxy will be returned to you if you are present at the Meeting and should request its return.

     
Dated at Vancouver, British Columbia,
the 24th day of May, 2002.
  BY ORDER OF THE BOARD OF DIRECTORS
     
    /s/ Gordon Ellis
Gordon L. Ellis, Chairman

 


Table of Contents

INTERNATIONAL ABSORBENTS INC.
1569 Dempsey Road,
North Vancouver, British Columbia
Canada V7K 1S8
www.absorbent.com

PROXY STATEMENT

ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS
To Be Held June 27, 2002


SOLICITATION OF PROXIES

THIS PROXY STATEMENT IS FURNISHED IN CONNECTION WITH THE SOLICITATION OF PROXIES BY THE BOARD OF DIRECTORS (THE BOARD OF DIRECTORS OR BOARD) OF INTERNATIONAL ABSORBENTS INC. (THE COMPANY), A CORPORATION INCORPORATED UNDER THE LAWS OF BRITISH COLUMBIA, CANADA, FOR USE AT THE ANNUAL AND SPECIAL MEETING (THE MEETING) OF THE SHAREHOLDERS OF THE COMPANY TO BE HELD ON JUNE 27, 2002 AT 10:00 a.m. (local time), AT THE XCHANGE CONFERENCE CENTRE, 888 DUNSMUIR STREET, 2nd FLOOR, VANCOUVER, BRITISH COLUMBIA, CANADA FOR THE PURPOSES SET FORTH IN THE ACCOMPANYING NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS.

This Proxy Statement and the accompanying Form of Proxy are being mailed on or about May 24, 2002, to all shareholders entitled to vote at the meeting. It is expected that the solicitation will be primarily by mail. Proxies may also be solicited personally or by mail, telephone, facsimile by directors, officers or regular employees for no additional compensation, however, out-of-pocket expenses will be reimbursed. Brokerage houses and other custodians, nominees and fiduciaries will be requested, in connection with the shares registered in their names, to forward solicitation materials to the beneficial owners of such shares. The Company will reimburse brokerage firms and other persons representing beneficial owners of the common shares for their reasonable expenses in forwarding solicitation material to such beneficial owners. THE COSTS OF THIS SOLICITATION WILL BE BORNE BY THE COMPANY.

Advance notice of the Meeting was published in Vancouver, British Columbia on May 7, 2002.

RECORD DATE AND OUTSTANDING SHARES

Only shareholders of record at the close of business on May 9, 2002 (the Record Date) are entitled to notice of and to vote at the Meeting. The only outstanding voting securities of the Company are common shares without par value (the Common Shares).

As of the Record Date, 5,662,144 Common Shares were issued and outstanding and held of record by approximately 3,248 shareholders. The closing price of the Companys Common Shares on the OTC Bulletin Board on the Record Date was (US) $2.50 under the symbol IABI.

APPOINTMENT AND REVOCATION OF PROXIES

The persons named in the accompanying Form of Proxy are executive officers of the Company planning to be in attendance at the Meeting and nominated by the Board of Directors. A SHAREHOLDER DESIRING TO APPOINT SOME OTHER PERSON (WHO NEED NOT BE A SHAREHOLDER) TO REPRESENT HIM OR HER AT THE MEETING AS PROXYHOLDER MAY DO SO, EITHER BY:

  (a)   STRIKING OUT THE PRINTED NAMES AND INSERTING THE DESIRED PERSONS NAME IN THE BLANK SPACE PROVIDED IN THE FORM OF PROXY; OR
 
  (b)   BY COMPLETING ANOTHER PROPER FORM OF PROXY.

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Table of Contents

The completed Form of Proxy must be received at the office of the transfer agent, Pacific Corporate Trust Company (the Transfer Agent), located at 625 Howe Street, 10th Floor, Vancouver, British Columbia, Canada V6C 3B8, not less than 48 hours (excluding Saturdays, Sundays and holidays) before the time fixed for the Meeting or before the time that the Meeting is to be reconvened following any adjournment thereof. A Form of Proxy received at the offices of the Transfer Agent or the Company after this time, but prior to the Meeting, may be accepted or rejected as late, at the discretion of the Chairman.

A shareholders Form of Proxy will be returned if the shareholder is present at the Meeting and should request its return. A shareholder who has given a Form of Proxy may also revoke it by an instrument in writing delivered to the office of the Transfer Agent or to the registered office of the Company, Suite 700 - 595 Howe Street, Vancouver, British Columbia, Canada V6C 2T5, at any time up to and including the last business day preceding the day of the Meeting, or any adjournment thereof, or to the Chairman of the Meeting on the day of the Meeting or any adjournment thereof, or in any other manner provided by law. If the shareholder is a corporation, any such instrument of revocation must be executed under the corporate seal or by a duly authorized officer or attorney of the corporation.

QUORUM; ABSTENTIONS; BROKER NON-VOTES

At the Meeting, the Companys transfer agent will determine the presence of a quorum and tabulate the results of the votes by shareholders. A quorum exists when one member and one proxy holder are personally present at the meeting and holding or representing not less than one-twentieth of the total number of issued and outstanding Common Shares that are entitled to vote at the Meeting. A quorum is necessary for the transaction of business at the Meeting. A nominee for election to a position on the Board of Directors will be elected as a director if the votes cast for the nominee exceed the votes cast against the nominee and exceed the votes cast for any other nominee for that position. Abstentions and broker non-votes (shares held by a broker or nominee that does not have the authority, either express or discretionary, to vote on a particular matter) are counted for purposes of determining the presence or absence of a quorum for the transaction of business at the Meeting. For the election of directors, abstentions and broker non-votes will have the effect of neither a vote for nor a vote against the nominee. If a quorum is present, approval of the special resolution of the amalgamation of the Company with its wholly-owned subsidiary, Total Absorb, Inc., requires the affirmative vote of three-quarters of the Common Shares of the shareholders present or represented and entitled to vote at the Meeting. Approval of all other matters that properly come before the meeting, including the proposals to approve the Companys appointment of an auditor, approve certain stock option grants to insiders, approve the 2003 Stock Option Plan for U.S. Participants and the 2003 Equity Stock Option Plan require the affirmative vote of a majority of the Common Shares of shareholders present or represented and entitled to vote at the Meeting. As in the election of directors, abstentions and broker non-votes will have the effect of neither a vote for nor against such actions.

VOTING OF PROXIES

If the Form of Proxy is properly completed and returned to the Transfer Agent, the shares represented by the Form of Proxy will be voted at the Meeting. Where a shareholder indicates a choice with respect to any matter to be acted upon at the Meeting, the shares will be voted in accordance with the specification so made. IF A CHOICE IS NOT SO SPECIFIED, IT IS INTENDED THAT THE PERSON DESIGNATED BY THE BOARD OF DIRECTORS IN THE ACCOMPANYING FORM OF PROXY WILL VOTE THE SHARES REPRESENTED BY THE FORM OF PROXY IN FAVOUR OF EACH MATTER IDENTIFIED ON THE FORM OF PROXY AND, THEREFORE, FOR THE NOMINEES OF THE COMPANY FOR DIRECTORS AND AUDITOR, FOR THE APPROVAL OF GRANTS OF STOCK OPTIONS TO INSIDERS OF THE COMPANY, FOR THE 2003 EMPLOYEE STOCK OPTION PLAN U.S. PARTICIPANTS, FOR THE 2003 EQUITY STOCK OPTION PLAN, AND FOR THE AMALGAMATION OF INTERNATIONAL ABSORBENTS INC. AND TOTAL ABSORB INC.

The Form of Proxy accompanying this Proxy Statement confers discretionary authority upon the named proxyholder with respect to amendments or variations to the matters identified in the accompanying Notice of Annual and Special Meeting and with respect to any other matters, which may properly come before the Meeting. As of the date of this Proxy Statement, the Board of Directors of the Company knows of no such amendment or variation or matters to come before the Meeting other than those referred to in the accompanying Notice of Annual and Special Meeting.

ANNUAL REPORT

The Annual Report for the Fiscal Year ended January 31, 2002 is being mailed to shareholders with this Proxy Statement. The Annual Report is not to be considered as proxy soliciting material. A copy of the Companys Annual Report on Form 10-KSB (without exhibits) will be provided upon written request to the Secretary, c/o the Companys address at 1569 Dempsey Road, North Vancouver, British Columbia, Canada V7K 1S8.

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CONSOLIDATION

On December 20, 2000 the Company held an Extraordinary General Meeting. At that time, the shareholders approved a special resolution granting the Board of Directors the authority to enact a consolidation of the Companys Common Shares. At a meeting of the Board of Directors held on March 23, 2001, the Board of Directors approved a Resolution to effect an amendment to the Companys Memorandum to consolidate all issued and unissued Common Shares as follows: each four (4) shares of Common Shares were consolidated into one (1) new share of Common Shares. The Company set the record date as of April 9, 2001 to effect the exchange of shares. Upon the effectiveness of the consolidation the purchase or conversion price and number of Common Shares to be acquired pursuant to each of the Companys then-outstanding option, warrant or convertible instrument was adjusted proportionately. All amounts relating to shares and share prices throughout this Proxy Statement reflect the effect of the consolidation.

PRINCIPAL SHAREHOLDERS AND
SHARE OWNERSHIP OF MANAGEMENT

The following table provides information, as of April 2 2002, with respect to Common Share ownership by (i) the persons known to management beneficially owning Common Shares carrying more than 5% of the voting rights attached to all Common Shares of the Company, (ii) each director, (iii) the Chief Executive Officer, (iv) each Executive Officer named in the Summary Compensation Table, and (v) all directors and Executive Officers as a group. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission (the SEC). In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares subject to options, warrants and securities convertible into Common Shares held by that person that are exercisable as of April 2, 2001 or exercisable within 60 days thereof are deemed outstanding. As of April 2, 2002, there were 5,662,144 Common Shares outstanding. Except as otherwise indicated in the footnotes below, all of the shares listed for a person named in the table are directly held with sole voting and dispositive power.

Unless otherwise noted, the address for each stockholder below is: c/o International Absorbents, Inc., 1569 Dempsey Road, North Vancouver, British Columbia, Canada V7K 1S8.

                         
Title of Class   Name and Address of Beneficial Owner   Amount Owned   Percentage of Class

Common
  Gordon L. Ellis     335,576 (1)(2)(3)(4)     5.60 %
 
  North Vancouver, British Columbia, Canada                
Common
  Stephen H. Silbernagel     148,750 (5)     2.56 %
 
  Vancouver, British Columbia, Canada                
Common
  John J. Sutherland     10,005 (6)     *  
 
  West Vancouver, British Columbia, Canada                
Common
  Douglas E. Ellis     95,174 (7)(8)(9)     1.65 %
 
  White Rock, British Columbia, Canada                
Common
  Shawn M. Dooley     115,802 (10)     2.00 %
 
  Bellingham, Washington, United States                
Common
  David H. Thompson     26,501 (11)     *    
 
  Bellingham, Washington, United States                

Common
  Directors and Executive Officers as a Group (6 Persons)     674,134       11.56 %

(1)   Includes 54,125 Common Chares underlying incentive stock options granted to 495894 British Columbia Ltd., over which Mr. G. Ellis has voting and dispositive powers.
(2)   Includes 15,000 Common Shares held by Stelyconi Enterprises Ltd., over which Mr. G. Ellis has voting and dispositive powers.
(3)   Includes 90,576 Common Shares held by Gordann Consultants Ltd.. Mr. G. Ellis owns a 51% interest and Mr. Ellis spouse owns a 49% interest in Gordann Consultants Ltd. Mr. G. Ellis has voting and dispositive powers over these shares.
(4)   Includes 75,000 Common Shares held by ABE Industries (1980) Inc. Mr. G. Ellis has voting and dispositive powers over these shares.
(5)   Includes 15,000 Common Shares underlying incentive stock options granted to Mr. Silbernagel.
(6)   Includes 10,000 Common Shares underlying incentive stock options granted to Mr. Sutherland.
(7)   Includes 37,500 Common Shares underlying incentive stock options granted to Mr. D. Ellis.
(8)   Includes 12,500 Common Shares held by Sarah Ellis. Mr. D. Ellis has voting and dispositive powers over these shares.
(9)   Includes 12,500 Common Shares held by Colby Ellis. Mr. D. Ellis has voting and dispositive powers over these shares.
(10)   Includes 31,250 common shares underlying incentive stock options granted to Mr. Dooley.
(11)   Includes 21,750 common shares underlying incentive stock options granted to Mr. Thompson.
*   Less than 1%

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Compliance with Section 16(a) of the Securities Exchange Act of 1934

Section 16(a) of the Securities Exchange Act of 1934, as amended (the Exchange Act), requires the Companys officers and directors, and persons who beneficially own more than 10% of a registered class of the Companys equity securities to file reports of securities ownership and changes in such ownership with the SEC. Officers, directors and greater than 10% beneficial owners also are required by the rules promulgated by the SEC to furnish the Company with copies of all Section 16(a) forms they file.

Based solely on its review of the copies of such forms received by it, the Company believes that, during the fiscal year ended January 31, 2002, such officers, directors and greater than 10% beneficial owners filed all reports required of them on a timely basis.

DIRECTORS AND EXECUTIVE OFFICERS

Election of Directors
(Item 1 of Form of Proxy)

The Articles of the Company provide for a Board of Directors consisting of not fewer than three (3) members. The number of Directors may be determined by resolution of the Board of Directors at any meeting; presently, the Board has set the number of Directors at five (5). In addition, the Articles of the Company provide for division of the Board of Directors into two (2) classes, whereby the term of office for each class of directors alternately expires upon the second succeeding general meeting. At the present time, Class I has three (3) directors with terms expiring in 2002 and Class II has two (2) directors with terms expiring in 2003.

Unless otherwise directed in the accompanying Form of Proxy, each person appointed in the Form of Proxy intends to nominate and vote the shares represented by such Form of Proxy FOR the election of the following nominees for the office of director of the Company, each to serve as a Class I director for a term of two years or until his successor is duly elected or appointed, unless his office is earlier vacated in accordance with the Articles of the Company or he becomes disqualified to act as a director. Each nominee is presently a director, and his term of office will expire at the Meeting unless he is re-elected, in which case his term will expire in 2004.

                 
            Present Position   Served as
Class   Director   Age   with Company   Director Since

I   Gordon L. Ellis   55   Director, Chairman, President, CEO   1985
I   Douglas E. Ellis   51   Director, Secretary, President of Absorption Corp   1998
I   Shawn M. Dooley   42   Director, VP Sales & Marketing   1998

Although the Company does not anticipate that the above-named nominees will refuse or be unable to accept or serve as directors of the Company, the persons appointed in the enclosed accompanying Form of Proxy intend, if a nominee becomes unavailable, to vote the shares represented by the Form of Proxy FOR the election of such other person as may be nominated or designated by the Board of Directors, unless they are directed by the Form of Proxy to do otherwise.

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The following information is provided in respect to Class II directors of the Company who will continue to serve as directors until their terms expire at the annual meeting in 2003:


 

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