INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy State Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.)
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 Com-
mission Only (as permitted by
Rule14A-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Under Rule 14a-12
INTERNATIONAL ISOTOPES INC.
------------------------------------------------
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Registrant) Payment of Filing Fee (Check the appropriate box):
[ ] No Fee Required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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_______________________________________________________________________________
(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):
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[ ] Fee paid previously with preliminary materials:
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[ ] 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.
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(4) Date Filed:
INTERNATIONAL ISOTOPES INC.
4137 Commerce Circle
Idaho Falls, Idaho 83401
(208) 524-5300
---------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 29, 2003
---------------
To the Shareholders of
INTERNATIONAL ISOTOPES INC.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
International Isotopes Inc. (the "Company"), a Texas corporation, will be held
at O'Hara's, 120 Cedar Street, New York, NY 10006, on Tuesday, April 29, 2003,
at 2:00 p.m., eastern time, for the following purposes:
1. To elect three (3) directors to serve until the next
succeeding annual meeting and until their respective successors are elected and
qualified;
2. To ratify the appointment by the Board of Directors of
Hansen, Barnett & Maxwell as independent certified public accountants of the
Company for the fiscal year ending December 31, 2003;
3. To approve an amendment to the Company's Articles of
Incorporation to provide, in accordance with Texas law, that shareholder actions
may be taken by written consent of the requisite percentage of shareholders
without a shareholder meeting or a vote of all shareholders; and
4. To transact such other business as properly may come
before the meeting or any adjournment thereof.
The close of business on March 28, 2003 has been fixed by the Board of
Directors as the record date for the Annual Meeting. Only shareholders of
record on that date will be entitled to notice of and to vote at the Annual
Meeting or any adjournment thereof, notwithstanding transfer of any stock on
the books of the Company after such record date. The stock transfer books will
not be closed.
A Proxy Statement, form of Proxy, and copy of the Annual Report on Form
10-KSB as filed with the Securities and Exchange Commission with respect to the
Company's operations during the fiscal year ended December 31, 2002, accompany
this notice.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL MEETING.
IF YOU DO NOT EXPECT TO ATTEND IN PERSON, PLEASE SIGN AND DATE THE ENCLOSED
FORM OF PROXY AND RETURN IT TO THE ADDRESS SET FORTH ON THE REVERSE SIDE OF THE
PROXY. SHAREHOLDERS WHO ATTEND THE ANNUAL MEETING MAY REVOKE THEIR PROXIES AND
VOTE IN PERSON IF THEY DESIRE.
By Order of the Board of Directors
STEVE T. LAFLIN
President and CEO
April __, 2003
INTERNATIONAL ISOTOPES INC.
4137 Commerce Circle
Idaho Falls, Idaho 83401
(208) 524-5300
---------------
PROXY STATEMENT
For the Annual Meeting of Shareholders
To be Held on April 29, 2003
SOLICITATION OF PROXIES
This Proxy Statement is furnished to shareholders of International
Isotopes Inc., a Texas corporation (the "Company"), in connection with the
solicitation of proxies by the Board of Directors to be voted at the Annual
Meeting of Shareholders of the Company to be held at O'Hara's, 120 Cedar
Street, New York, NY 10006 on Tuesday, April 29, 2003, at 2:00 p.m., eastern
time, or at any adjournment thereof, for the purposes set forth in the
accompanying Notice of Annual Meeting of Shareholders. References herein to the
"Company" include its subsidiary, unless the context otherwise requires.
This Proxy Statement and form of Proxy are being mailed to shareholders
on or about April 4, 2003. If the enclosed form of Proxy is executed and
returned, it may nevertheless be revoked by the shareholder at any time by
filing with the Secretary of the Company a written revocation or a duly
executed proxy bearing a later date. A shareholder who attends the meeting in
person may revoke his or her proxy at that time and vote in person if so
desired. All proxies duly signed, dated, and returned will be voted as
specified therein, but unless otherwise specified, will be deemed to grant
authority to vote:
(1) FOR the election of the three (3) nominees listed under
"Election of Directors" as nominees of the Company for election as
directors;
(2) FOR the ratification of the appointment by the Board of
Directors of Hansen, Barnett & Maxwell as independent certified public
accountants of the Company for the fiscal year ending December 31, 2003;
and
(3) FOR approval of an amendment to the Company's Articles of
Incorporation to provide, in accordance with Texas law, that shareholder
actions may be taken by written consent of the requisite percentage of
shareholders without a shareholder meeting or a vote of all
shareholders.
The enclosed Proxy is solicited by and on behalf of the Board of
Directors of the Company. The Company is unaware of any additional matters not
set forth in the Notice of Annual Meeting of Shareholders that will be
presented for consideration at the Annual Meeting. If any other matters are
properly brought before the Annual Meeting and presented for a vote of the
shareholders, the persons named in the Proxy will vote in accordance with their
best judgment upon such matters, unless otherwise restricted by law.
The cost of solicitation of proxies will be borne by the Company. In
addition to the use of the mails, proxies may also be solicited by personal
interview, facsimile transmission, and telephone by directors, officers,
employees, and agents of the Company. The Company will also supply brokers,
nominees, or other custodians with the numbers of Proxy forms, Proxy
Statements, and Annual Reports they may require for forwarding to beneficial
owners, and the Company will reimburse such persons for their expense in so
doing.
OUTSTANDING CAPITAL STOCK AND STOCK OWNERSHIP OF
DIRECTORS, CERTAIN EXECUTIVE OFFICERS
AND PRINCIPAL SHAREHOLDERS
The record date for the determination of the shareholders entitled to
notice of and to vote at the Annual Meeting has been established by the Board
of Directors as the close of business on March 28, 2003. As of March 28, 2003,
the Company had issued and outstanding and entitled to vote at the Annual
Meeting 95,581,135 shares of Common Stock, par value $.01 per share ("Common
Stock"). (For a description of the voting rights of the Common Stock, see
"Quorum and Voting" herein.)
The following table sets forth information as of March 28, 2003,
regarding the beneficial ownership of the Company's Common Stock by each person
or group known by management of the Company to own more than five percent of
the outstanding shares of Common Stock of the Company, by each of the Company's
executive officers named in the Summary Compensation Table below, by each of
the Company's directors (and director nominees) and by all of its directors
(and nominees) and executive officers as a group.
Shares of Common Stock Beneficially
Owned and Percentage of Outstanding
Shares as of
March 28, 2003
Name Number(1) Percent
----------------------------------------- ---------- -------
John M. McCormack (2).................... 24,367,499 25.5%
Marie C. Keane and James J. Keane (3).... 12,055,961 12.6%
Walter O'Hearn (3)....................... 12,033,463 12.6%
William Nicholson (4).................... 14,020,286 14.7%
Dr. Ralph M. Richart (5) ................ 10,843,261 11.3%
Steve T. Laflin (6) ..................... 6,000,000 6.3%
Christopher Grosso (7)................... 2,372,789 2.5%
Randall O'Kane .......................... 0 0
Directors and executive officers as a
group (3 persons) (3).................... 19,216,050 20.1%
(1) Unless otherwise indicated, to the knowledge of the Company, all shares
are owned directly and the owner has sole voting and investment power.
(2) Includes an aggregate of 10,964,409 shares owned by Mr. McCormack's
children's trusts. Mr. McCormack disclaims beneficial ownership of such
shares.
(3) Includes 1,470,394 shares owned by Keane Securities Co., Inc., of which
Mr. Keane and Mr. O'Hearn are officers.
(4) Includes 5,000,000 shares in the name of Auric Partners in which Mr.
Nicholson is a principal.
(5) Includes 679,998 shares owned by Dr. Richart's children's trusts.
(6) Includes options to purchase 6,000,000 shares of common stock that are
exercisable by Mr. Laflin within 60 days of April 30, 2003. Does not
include options to purchase 5,000,000 shares of common stock granted to
Mr. Laflin but not exercisable by Mr. Laflin within 60 days of April 30,
2003.
(7) Includes 508,137 shares owned by Diane Grosso.
Section 16(a) Beneficial Ownership Reporting Compliance.
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers to file reports relating to their
ownership and change in ownership of the Company's Common Stock with the
Securities and Exchange Commission and the NASD. The Company is unaware of any
officers and directors of the Company who failed to timely file a Form 4 or
Form 5 in connection with their purchase or sale of Common Stock.
2
QUORUM AND VOTING
The presence, in person or by proxy, of the holders of a majority of the
voting power of the outstanding shares of Common Stock of the Company entitled
to vote is necessary to constitute a quorum at the meeting. The affirmative
vote of a majority of the voting power represented at the meeting, present in
person or represented by proxy, and entitled to vote is required for the
election of directors. A holder of shares of Common Stock will be entitled to
one vote per share of Common Stock as to each matter properly brought before
the meeting. Cumulative voting is not permitted in the election of directors.
Abstentions and votes "withheld" are included in the determination of the
number of shares present at the meeting for purposes of determining a quorum.
Broker non-votes are counted for purposes of determining whether a quorum is
present on any particular matter only if authority to vote on the matter is
granted by the respective proxy. Abstentions and broker non-votes have the
effect of negative votes on matters requiring approval of a specified
percentage of the outstanding shares. For matters requiring approval by the
holders of a specified percentage of the voting power represented at the
meeting and entitled to vote, abstentions will have the effect of negative
votes but broker non-votes will have no effect.
PROPOSAL ONE
ELECTION OF DIRECTORS
Three directors will be elected at the Annual Meeting for terms expiring
at the next Annual Meeting. The directors will continue to serve until their
respective successors are duly elected and qualified.
Shares represented by proxies returned duly executed will be voted,
unless otherwise specified, in favor of the three nominees for the Board of
Directors named below. The proxies cannot be voted for more than three
nominees. The nominees have indicated that they are able and willing to serve
as directors. If any (or all) such persons should be unable to serve, the
persons named in the enclosed proxy will vote the shares covered thereby for
such substitute nominee (or nominees) as the Board of Directors may select.
Shareholders may withhold authority to vote for any nominee by striking a line
through the name of such nominee in the space provided for such purpose on the
form of Proxy.
Nominees for Directors
Ralph M. Richart, M.D., age 69, was elected by the Board of Directors on
January 22, 2002. The other directors elected him to serve as Chairman on April
24, 2002. Dr. Richart is a professor and Vice Chairman of the Department of
Pathology at Columbia University College of Physicians and Surgeons, where he
has been employed since 1963. Dr. Richart has previously served on the Board of
Directors of several publicly held companies and multiple corporate medical
advisory boards as well as serving as CEO in several privately held companies
in the fields of medicine and electronics. Additionally his extensive
experience also includes leading clinical trials resulting in FDA product
approval and he has served as an advisor to medical device and pharmaceutical
companies as well as the FDA.
Steve T. Laflin, age 46, was elected to fill a vacant seat on the Board
in June 2001. Mr. Laflin had been the President and General Manager of the
Company's subsidiary, International Isotopes Idaho Inc., since 1996. In August
2001 Mr. Laflin was promoted from President and General Manager of the
Company's wholly owned subsidiary to President and Chief Executive Officer of
the Company. Mr. Laflin has a BS degree in Physics from Idaho State University
and has been employed in various senior engineering and management positions in
the nuclear industry since 1992.
Christopher Grosso, age 35, was elected as a director on April 24, 2002.
He is currently a principal of Kershner Grosso, Inc., a New York based money
management and investment banking firm. During his 13 years at Kershner Grosso,
Mr. Grosso has been its Senior Research Analyst and Portfolio Manager, and has
led the firm's investment banking and venture capital activities. Prior to
joining Kershner Grosso, he was with Howe and Rusling Investment Management and
Chase Manhattan Bank. Mr. Grosso also currently serves on the board of
directors of Hibernia Food, PLC. Mr. Grosso received his B.S. in business
administration from Skidmore College.
3
Retiring Director
Randall O'Kane, age 43, was first elected as a director at the 2001
Annual Meeting. He is a founding member of RadQual, LLC, which was founded to
develop a wide range of radioactive sources for the nuclear medicine and PET
markets. From 1991 to the present he has been President and CEO of Technology
Imaging Services, which sells accessories and sources to the nuclear medicine
market. Mr. O'Kane is a 1980 graduate of Dartmouth College with a degree in
biology. Mr. O'Kane is not standing for re-election at the 2003 Annual Meeting.
The Board of Directors met ten (10) times during 2002. No director
attended fewer than 75 percent of the aggregate of (1) the total number of
meetings of the Board of Directors and (2) the total number of meetings held by
all committees of the Board on which he served.
Audit Committee. The Audit Committee, first established in January 1997,
currently consists of Dr. Ralph Richart, Christopher Grosso and Randall O'Kane.
Dr. Richart and Mr. Grosso are each an "independent director" under NASD rules.
Mr. O'Kane is not standing for re-election at the 2003 annual meeting. The
Board of Directors has adopted a written charter for the Audit Committee. The
Audit Committee is directly responsible for the appointment, compensation, and
oversight of the Company's independent auditors. Under SEC rules, the
independent auditing firm is required to report directly to the Audit
Committee. The responsibility of the Audit Committee includes resolving
disagreements between Company management and the auditor related to financial
reporting. The Audit Committee is responsible for establishing procedures for
receipt of complaints relating to accounting, internal control, and auditing
and confidential, anonymous information submitted by employees relating to
questionable accounting or auditing matters. The committee has the authority to
employ independent counsel and other advisors in connection with its duties.
The Audit Committee met once during fiscal 2002.
Compensation Committee. The Compensation Committee, established in
January 1997, currently consists of Dr. Ralph Richart, Randall O'Kane and
Christopher Grosso. Mr. O'Kane is not standing for re-election at the 2003
annual meeting. The Compensation Committee reviews the compensation and
benefits of all officers of the Company, makes recommendations to the Board of
Directors and reviews general policy matters relating to compensation and
benefits of employees of the Company, including administration of the Company's
2002 Amended and Restated Long Term Incentive Plan. The Compensation Committee
met once during fiscal 2002.
PROPOSAL TWO
RATIFICATION OF SELECTION OF AUDITOR
The Board of Directors has selected Hansen, Barnett & Maxwell as
independent certified public accountants to audit the consolidated financial
statements of the Company for the fiscal year ending December 31, 2003, and has
determined that it would be desirable to request that the shareholders ratify
such selection. The decision was approved by the audit committee of the Board
of Directors. The affirmative vote of a majority of the outstanding shares of
Common Stock present at the Annual Meeting in person or by proxy is necessary
for the ratification of the appointment by the Board of Directors of Hansen,
Barnett & Maxwell as independent certified public accountants. Representatives
of Hansen, Barnett & Maxwell are expected to be present at the Annual Meeting,
will have the opportunity to make a statement if they desire to do so and will
be available to respond to appropriate questions from shareholders.
Although shareholder ratification is not required for the selection of
Hansen, Barnett & Maxwell as the Board of Directors has the responsibility for
selecting the Company's independent certified public accountants, the selection
is being submitted for ratification at the Annual Meeting with a view towards
soliciting the shareholders' opinions, which the Board of Directors will take
into consideration in future deliberations.
4
Audit Fees
The aggregate fees billed by Hansen, Barnett & Maxwell for professional
services rendered for the audit of the Company's annual financial statements
for fiscal year 2002 and the reviews of the financial statements included in
the Company's form 10-Q's for fiscal year 2002 were approximately $44,000.
Financial Information Systems Design and Implementation Fees and Other Fees
Hansen, Barnett & Maxwell has not provided any professional services to
the Company in connection with financial information systems design or
implementation and has not charged the Company any other fees in addition to
its audit fees.
In addition to the amounts paid to Hansen, Barnett & Maxwell, the
Company also incurred charges from Posten, Denny & Killpack of approximately
$20,000 for their assistance in preparation of quarterly and annual reports.
The Board of Directors recommends a vote FOR the ratification of Hansen,
Barnett & Maxwell as independent certified public accountants of the Company
for the fiscal year ending December 31, 2003.
PROPOSAL THREE
APPROVAL OF AMENDMENT TO ARTICLES OF INCORPORATION
TO PERMIT SHAREHOLDER ACTIONS BY WRITTEN CONSENT
Article 9.10 of the Texas Business Corporation Act ("TBCA") states that
a Texas corporation's Articles of Incorporation may provide that any action
required by the TBCA to be taken at any annual or special meeting of
shareholders, or any action which may be taken at any annual or special meeting
of shareholders, may be taken without a meeting, without prior notice, and
without a vote, if a consent or consents in writing, setting forth the actions
so taken, shall be signed by the holder or holders of shares having not less
than the minimum number of votes that would be necessary to take such action at
a meeting at which the holders of all shares entitled to vote on the action
were present and voted. Pursuant to the Company's current Articles of
Incorporation and applicable Texas law, shareholders owning a majority of the
Company's outstanding capital stock authorized to vote must be present in
person or proxy to constitute a quorum at a meeting of shareholders. Once a
quorum is present, the vote of a majority of the shares present, in person or
by proxy, constitutes an act of the shareholders of the Company, with the
exception of certain statutorily specified actions, such as mergers, the sale
of substantially all assets or dissolution of the Company, which require
approval by a majority of all outstanding shares and not just a majority of the
shares present and constituting a quorum.
The Company's Articles of Incorporation do not presently include a
provision permitting action by the written consent of shareholders owning the
requisite percentage of shares without a meeting. As a result, under Texas law
and the Company's current Articles of Incorporation, a shareholder meeting is
required unless the Company can obtain the written consent of 100% of its
shareholders for a given action, effectively an impossibility for a public
corporation.
Although the Company remains a publicly traded corporation with an
estimated 320 shareholders, a majority of the Company's outstanding common
stock entitled to vote at annual and special meetings of the Company's
shareholders is currently held by less than 10 persons. Such persons are listed
in this Proxy Statement under the heading "Outstanding Capital Stock and Stock
Ownership of Directors, Certain Executive Officers and Principal Shareholders."
In the event, as expected, this proposal to amend the Articles of Incorporation
is approved by the current shareholders, these named persons would have the
ability to take action on behalf of all shareholders by written consent,
without prior notice to other shareholders, and without a meeting or vote of
all shareholders.
5
The Company's Board of Directors believes that because these individuals
have the ability, acting together, to elect directors and take any other
shareholder action at a scheduled meeting of the shareholders, to avoid the
time and expense required to hold a meeting of shareholders, it would be in the
best interest of the Company and its shareholders to amend the Articles of
Incorporation to give the Company the flexibility to act more quickly and cost
effectively without a meeting when the Board determines that it is in the best
interest of the Company to do so.
Passage of such proposal will not mean that the Company's shareholders
will cease to be entitled to notice of shareholder actions. Pursuant to the
rules of the Securities and Exchange Commission ("SEC"), all public companies
that are subject to the SEC's reporting and disclosure rules, such as the
Company, are required, in connection with any shareholder action taken by
written consent of less than all shareholders, to provide to all shareholders
the same information that would have been required to be provided in a Proxy
Statement had a meeting been required under the corporation's governing law.
Moreover, though not required to, it is expected that the Company will continue
to hold annual meetings of shareholders in order to give all shareholders the
opportunity to be present to ask questions of and receive answers from the
Board of Directors and Company management concerning the Company and its
operations.
In accordance with Texas law, the Board of Directors has previously
adopted a resolution authorizing an amendment to the Company's Articles of
Incorporation to allow for shareholder action by written consent and providing
that, after submission to and approval by the shareholders, such amendment be
filed with the Texas Secretary of State.
The Board of Directors recommends a vote for approval of an amendment to
the Company's Articles of Incorporation to permit, in accordance with Texas
law, shareholder actions to be taken by written consent of the requisite
percentage of shareholders without a shareholder meeting or vote of all
shareholders.
EXECUTIVE OFFICERS OF THE COMPANY
The executive officers of the Company are as follows:
Name Age Position with Company
-------------------- --- ------------------------------------
Dr. Ralph M. Richart 69 Chairman of the Board
Steve T. Laflin 46 President, Chief Executive Officer,
Chief Financial Officer and Director
Information concerning the business experience of Dr. Richart and Mr.
Laflin is provided under the caption "Election of Directors" above.
All executive officers are elected annually by the Board of Directors to
serve until the next annual meeting of the Board of Directors and until their
respective successors are chosen and qualified.
EXECUTIVE COMPENSATION AND OTHER MATTERS
The following information summarizes annual and long-term compensation
for services in all capacities to the Company for the fiscal years ended
December 31, 2000, 2001 and 2002 of the Chief Executive Officer during those
respective years and the other four most highly compensated executive officers
of the Company with annual income of $100,000 or more (collectively, the "Named
Executive Officers"):
6
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
Awards
Annual Compensation Securities
-------------------------- Underlying All Other
Name and Bonus Options Stock Compensation
Principal Position Year Salary($) ($) (#) Grants ($) (1) ($)(2)
-------------------------- ---- -------- ------- ------------ -------------- ------------
Steve T. Laflin (3) 2000 $ 95,000 -0- -0- -0- -0-
President and CEO 2001 $106,885 -0- -0- -0- -0-
2002 $120,000 -0- -0- -0- -0-
David M. Camp (4) 2000 $137,321 -0- -0- -0- -0-
President, Chief Executive 2001 $ 75,833 -0- -0- -0- 140,000(5)
Officer and Director 2002 -0- -0- -0- -0- -0-
Tommy L. Thompson (4) 2000 $157,402 -0- -0- $43,750 -0-
(Former) Executive Vice 2001 -0- -0- -0- -0- -0-
President and Chief 2002 -0- -0- -0- -0- -0-
Operating Officer
George Butterworth (4) 2000 $111,316 -0- -0- -0- -0-
Vice President 2001 -0- -0- -0- -0- -0-
2002 -0- -0- -0- -0- -0-
Bryce Drake (4) 2000 $106,327 -0- -0- -0- -0-
Vice President 2001 -0- -0- -0- -0- -0-
2002 -0- -0- -0- -0- -0-
Paul Landers (4) 2000 $ 73,069 (6 months) -0- -0- -0- -0-
Chief Financial Officer 2001 $ 99,567 -0- -0- -0- 67,500(5)
2002 -0- -0- -0- -0- -0-
---------------
(1) Represents the difference between the price paid by the named executive
officer and the fair market value of such security on the date of
purchase.
(2) Except as described in Note 5, none of the named executive officers
received any perquisites or other personal benefits in 2000, 2001 or
2002 that in the aggregate exceeded $50,000 or 10% of such named
executive officer's salary and bonus for such year. See Note (1) above.
(3) Mr. Laflin was elected by the Board of Directors to serve as President
and Chief Executive Officer of I3 in August 2001.
(4) Dr. Camp resigned as President and Chief Executive Officer in August
2001, and as Chairman of the Board effective April 24, 2002. Mr.
Thompson resigned as Executive Vice-President, Chief Operating Officer
and Director in November 2000. Mr. Butterworth resigned as Vice
President in January 2001. Mr. Drake resigned as Vice President in
January 2001. Mr. Landers resigned as Chief Financial Officer in August
2001.
(5) Severance compensation.
7
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information regarding options to purchase
Common Stock of the Company granted during the fiscal year ended December 31,
2002 to the Named Executive Officers.
Percent of
No. of Securities Total Options
Underlying Options Granted to Employees Exercise Price Expiration
Name Granted (#) in Fiscal Year 2002 (1) Per Share Date
------------------ ------------------ ----------------------- -------------- -----------------
Steve T. Laflin 10,000,000 77% $.02 February 28, 2009
David M. Camp -0- - - -
Tommy L. Thompson -0- - - -
George Butterworth -0- - - -
Bryce Drake -0- - - -
Paul Landers -0- - - -
AGGREGATED OPTION EXERCISES IN
LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
None of the Named Executive Officers exercised options to purchase
Common Stock in 2002. The following table sets forth certain information with
regard to the outstanding options to purchase Common Stock as of the end of the
year ended December 31, 2002 for the persons named in the Summary Compensation
Table above.
Shares
Acquired on Value
Name Exercise (#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
-------------------------- ------------ ----------- ----------- ------------- ----------- -------------
Number of Securities
Underlying Unexercised Value of Unexercised
Options at Fiscal In-the-Money Options
Year-End(#) At Fiscal Year-End($)(1)
--------------------------- ---------------------------
David M. Camp............. -0- -0- -0- -0- -0- -0-
Tommy L. Thompson......... -0- -0- -0- -0- -0- -0-
George Butterworth........ -0- -0- -0- -0- -0- -0-
Bryce Drake............... -0- -0- -0- -0- -0- -0-
Steve T. Laflin........... -0- -0- 3,250,000 7,750,000 -0- $200,000
Paul Landers.............. -0- -0- -0- -0- -0- -0-
(1) Based on the last sale price of .04 of the Company's Common Stock as
reported in the pink sheets on December 31, 2002. The exercise price of the
options in this table are $.076 per share (1,000,000 shares) and $.02 per share
(10,000,000 shares).
8
Employment Agreements
In April 2001, the Company entered into an Employment Agreement with
Steve Laflin to serve as the Company's new President and Chief Executive
Officer upon Dr. Camp's resignation and Mr. Laflin's election to the President
and CEO position by the Board of Directors. Mr. Laflin was elected President
and Chief Executive Officer by the Board of Directors in August 2001. Mr.
Laflin's agreement provides for a four-year term at a base salary of $120,000.
Mr. Laflin is entitled to bonus compensation at the discretion of the Board of
Directors and the Compensation Committee. In connection with his Employment
Agreement, Mr. Laflin was granted stock options to purchase 1,000,000 shares of
the Company's Common Stock at an exercise price of $.076 per share, the fair
market value of the Company's Common Stock on the date of grant. Of this
amount, 500,000 options vested immediately with the remainder vesting in two
equal installments of 250,000 in April 2002 and April 2003, respectively.
Additionally, in March 2002, Mr. Laflin was granted 10,000,000 new options at
$.02 per share. Of these shares, 2,500,000 shares vested immediately and the
rest vest in equal installments in February 2003, 2004 and 2005.
Compensation of Directors
Employee directors of the Company do not receive additional compensation
for their services as directors. Prior to its initial public offering, the
Company did not pay director's fees but did reimburse directors for their
expenses. Following the Company's initial public offering and until January
2001, the Company paid each non-employee director $500 per meeting for their
services as directors. The Company continues to reimburse directors for all
expenses incurred in connection with their activities as directors.
Non-employee directors and employee directors of the Company are entitled to
receive certain stock option awards under the Company's 2002 Amended and
Restated Long Term Incentive Plan.
Certain Transactions
Mr. Randall O'Kane and Mr. Keith Allberg, who were originally elected as
directors at the Company's 2001 annual meeting, are each founding members of
RadQual, LLC. The Company and entered into a contract with RadQual pursuant to
which I3 will manufacture nuclear medicine, reference and calibration standards
sources for RadQual. The contract has an estimated yearly value of $1,300,000
to RadQual. Mr. Allberg resigned as a director in January, 2003 and Mr. O'Kane
is not standing for re-election at the 2003 annual meeting.
The Company believes that all prior transactions and loans between the
Company and its officers, directors and 5% or greater stockholders have been on
terms no less favorable than could be obtained by the Company from unaffiliated
third parties. All future transactions between the Company and its officers,
directors and 5% or greater stockholders will be on terms no less favorable
than can be obtained by the Company from unaffiliated third parties and will be
approved by a majority of the independent, disinterested directors of the
Company.
REPORT OF AUDIT COMMITTEE
General
The Audit Committee currently consists of three (3) members, none of
which serve as executive officers of the Company. Set forth below is a report
prepared by Messrs. O'Kane, Richart and Grosso in their capacity as the Audit
Committee addressing the Company's audit policies for the fiscal year 2002.
The Audit Committee has: (i) reviewed and discussed the audited
financial statements of the Company with Company management; (ii) discussed
with the Company's independent auditors the matters required to be discussed by
Statement on Auditing Standards No. 61 as may be modified or supplemented; and
(iii) received certain disclosures from the auditors regarding the auditors'
independence as required by the Independence Standards Board Standard No. 1, as
may be modified or supplemented, and discussed with the auditors the auditors'
independence.
9
Based on the review and discussions referred to above, the Audit
Committee recommended to the Board of Directors that the audited financial
statements be included in the Company's Annual Report on Form 10-KSB for the
fiscal year 2002. The Audit Committee has adopted a written charter.
Dr. Richart and Mr. Grosso each meet the NASDAQ definition of an
independent director. Mr. O'Kane does not meet the definition of an independent
director because of his affiliation with RadQual. See "Certain Transactions"
above. Although each is well versed in financial matters, none of the members
of the Audit Committee currently meet the SEC definition of an "audit committee
financial expert."
Submitted by the Audit Committee of
the Board of Directors
Christopher Grosso, Chairman
Dr. Ralph M. Richart
Randall O'Kane
ANNUAL REPORT ON FORM 10-KSB
UPON WRITTEN REQUEST OF ANY BENEFICIAL SHAREHOLDER OR SHAREHOLDER OF
RECORD, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL
YEAR ENDED DECEMBER 31, 2002 (INCLUDING THE EXHIBITS, FINANCIAL STATEMENTS, AND
THE SCHEDULES THERETO) REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 13A-1 UNDER THE SECURITIES EXCHANGE ACT OF 1934,
MAY BE OBTAINED, WITHOUT CHARGE, FROM STEVE T. LAFLIN, PRESIDENT, 4137 COMMERCE
CIRCLE, IDAHO FALLS, IDAHO 83401. A COPY OF SUCH FORM 10-KSB ACCOMPANIED THIS
PROXY STATEMENT SENT TO SHAREHOLDERS IN CONNECTION WITH THE ANNUAL MEETING.
SHAREHOLDER PROPOSALS
Shareholder proposals to be presented at the 2004 Annual Meeting of
Shareholders, for inclusion in the Company's Proxy Statement and form of Proxy
relating to that meeting, must be received by the Company at its offices in
Idaho Falls, Idaho, addressed to the Secretary of the Company, not later than
December 31, 2003. Such proposals must comply with the Bylaws of the Company
and the requirements of Regulation 14A of the Securities Exchange Act of 1934.
OTHER MATTERS
At the date of this Proxy Statement, management was not aware that any
matters not referred to in this Proxy Statement would be presented for action
at the meeting. If any other matters should come before the meeting, the
persons named in the accompanying form of Proxy will have discretionary
authority to vote all proxies in accordance with their best judgment, unless
otherwise restricted by law.
By Order of the Board of Directors
/s/ Steve T. Laflin
-------------------
STEVE T. LAFLIN
President and CEO
Dated: April __, 2003
10
PROXY
THIS PROXY IS SOLICTED ON BEHALF OF THE BOARD OF DIRECTORS
OF INTERNATIONAL ISOTOPES INC.
The undersigned hereby appoints: Dr. Ralph M. Richart and Steve T.
Laflin, as proxies, and hereby authorizes each of them to represent and to
vote, as designed on the reverse side, all of the shares of Common Stock of
International Isotopes Inc. held of record by the undersigned on March 28, 2003
at the Annual Meeting of Shareholders to be held on April 29, 2003, or any
adjournment thereof.
The Board of Directors recommends that you vote FOR the nominees and the
proposals listed hereon. This proxy when properly executed will be voted in the
manner directed herein by the undersigned shareholder. If no direction is
given, this proxy will be voted FOR the nominees and the proposals.
(Please see reverse side)
1. To elect three (3) Directors.
WITHOLD
FOR all nominees AUTHORITY
listed below to vote for all
(except as marked nominees
to contrary) listed below
| | | |
INSTRUCTION: To withhold authority to vote for any individual nominee, strike
a line through the nominee's name in the list below:
Ralph M. Richart, Steve T. Laflin, Christopher Grosso.
2. Proposal to ratify the Board of Director's selection of Hansen, Barnett &
Maxwell as independent auditors.
FOR AGAINST ABSTAIN
| | | | | |
3. Proposal to approve an amendment to the Company's Articles of Incorporation
to provide, in accordance with Texas law, that shareholder actions may be taken
by written consent of the requisite percentage of shareholders without a
shareholder meeting or vote of all shareholders.
FOR AGAINST ABSTAIN
| | | | | |
4. In their direction to vote upon such other business as may properly come
before the meeting.
DATED:_____________________, 2003.
________________________________________________________________________________
(SIGNATURE OF SHAREHOLDER)
________________________________________________________________________________
(SIGNATURE IF HELD JOINTLY)
Please sign exactly as name appears hereon. When shares are held by joint
tenants both should sign. when signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign full corporate name by president or other officer. If a partnership,
please sign in partnership name by authorized person.