SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. N/A)
Filed by the registrant XX
Filed by a party other than the registrant
Check the appropriate box:
XX Preliminary proxy statement
Definitive proxy statement
Definitive additional materials
Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
AMERICAN ABSORBENTS NATURAL PRODUCTS, INC.
(Name of Registrant as Specified in Its Charter)
NICHOLAS N. WENTWORTH ON BEHALF OF THE BOARD OF DIRECTORS
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
X $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
$500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
Fee computed on table below per Exchange Act Rules 14-a6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction
applies:____________________________
(2) Aggregate number of securities to which transactions
applies:__________________________
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:_______
(4) Proposed maximum aggregate value of transaction:_________
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: N/A
(2) Form, schedule or registration statement no: 14A
(3) Filing party: American Absorbents Natural Products, Inc.
(4) Date filed: N/A
AMERICAN ABSORBENTS NATURAL PRODUCTS, INC.
________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
________________
The annual meeting of the shareholders of American Absorbents Natural
Products, Inc., a Utah Corporation, (the Company) will be held, in
accordance with the bylaws of the Company, at the Metropolitan Club, 600
South Congress Avenue Suite 1300, Austin, Texas, on Wednesday, July 28, 1999,
at 1:00 P. M. for the following purposes:
1. To elect five directors;
2. To receive the reports of officers (without taking any
action thereon);
3. To authorize the board to hire a qualified independent
certified public accountant to act as independent
auditor and accountant for the Company for the fiscal
year ending January 31, 2000;
4. To ratify and approve transactions with Austin Young, Inc.
including the borrowing of working capital funds, use
of assets as collateral, and office/equipment leases;
and,
5. To ratify the compensation for directors who are not
employees.
6. To transact such other business as may properly come
before the meeting.
Only holders of common stock of record on the books of the Company at the
close of business on April 30, 1999, will be entitled to notice of and to vote
at the annual meeting of shareholders and any adjournment or adjournments or
postponement or postponements thereof. A list of shareholders entitled to
vote at the annual meeting of shareholders will be kept on file at the offices
of the Company at least ten days prior to the annual meeting of shareholders
and may be reviewed by any shareholder during regular business hours.
The enclosed proxy, which is being solicited on behalf of the Board of
Directors of the Company, should be completed, dated, signed and returned
promptly to assure that your vote will be included.
YOU MAY, OF COURSE, CHOOSE TO REVOKE YOUR PROXY IN THE MANNER DESCRIBED IN
THIS PROXY AT ANY TIME BEFORE IT HAS BEEN VOTED AT THE ANNUAL MEETING OF
SHAREHOLDERS, AND PERSONALLY CAST YOUR VOTES.
Kimberly A. Love, Secretary
Austin, Texas
June 16, 1999
AMERICAN ABSORBENTS NATURAL PRODUCTS, INC.
3800 HUDSON BEND ROAD, SUITE #300
AUSTIN, TEXAS 78734
____________
PROXY STATEMENT
____________
SOLICITATION AND REVOCATION OF PROXY
The accompanying proxy is being furnished to holders of Common Stock ($0.001
par value), of American Absorbents Natural Products, Inc., a Utah corporation,
(the Company) and is solicited by the Board of Directors of the Company for
use at the annual meeting of the shareholders to be held at The Metropolitan
Club, 600 South Congress Avenue Suite 1300, Austin Texas, on Wednesday, July
28, 1999, 1:00 PM (local time), and any postponements or adjournments thereof.
The expenses of preparing, assembling, printing and mailing the proxy
statement and material used in the solicitation of proxies will be borne by
the Company. It is contemplated that proxies will be solicited principally
through the use of the mails, but officers, directors and regular employees
of the Company may solicit proxies personally or by telephone or mail.
Any shareholder executing a proxy retains the right to revoke it by giving
written notice dated after the date of the proxy and before the proxy is
counted at the annual meeting of shareholders, to the Secretary of the
Company, by duly executing a subsequent proxy relating to the same shares and
delivering it to the Secretary of the Company, or by attending the annual
meeting of shareholders and voting in person. Any written notice revoking a
proxy should be sent to the offices of the Company at the address listed
above.
All shares represented at the annual meeting of shareholders by properly
executed proxies received prior to or at the annual meeting of shareholders,
unless such proxies previously have been revoked, will be voted at the annual
meeting of shareholders in accordance with the instructions on the proxies. If
no instructions are indicated, proxies will be voted for each nominee and for
each item set forth in the Proxy. If any other matters are properly
presented to the annual meeting of shareholders for action, the persons
named on the enclosed form or forms of proxy and acting thereunder will have
discretion to vote on such matters in accordance with their best judgment.
The Board of Directors has fixed the close of business on April 30, 1999, as
the record date for the determination of shareholders entitled to notice of
and to vote at the annual meeting of shareholders. As of the record date,
there were 7,420,252 shares of common stock ($0.001 par value) of the Company
outstanding. Holders of record of common stock on the record date are
entitled to cast one vote per share, to be exercised in person or by
properly executed proxy, with respect to each matter to be considered by them
at the annual meeting of shareholders.
The presence, in person or by properly executed proxy, of the holders of a
majority of the outstanding shares of common stock entitled to vote is
necessary to constitute a quorum at the annual meeting of shareholders.
The approval of at least a majority of those shares of common stock voted at
the annual meeting of shareholders for each nominee and for each item set
forth in the notice of annual meeting of shareholders will be required to
elect the nominees and to approve such matters.
Copies of this proxy statement and enclosed proxy card were filed with the
Washington, D.C. office of the Securities & Exchange Commission a minimum of
ten days prior to them being sent to shareholders on approximately June 16,
1999.
THE BOARD OF DIRECTORS RECOMMENDS THAT HOLDERS OF COMMON STOCK VOTE
FOR THE NOMINEES AND MATTERS TO BE VOTED UPON AT THE ANNUAL MEETING OF
SHAREHOLDERS.
ELECTION OF DIRECTORS
The Board of Directors has nominated five persons to be elected at the annual
meeting of shareholders, each to serve until the next annual meeting of
shareholders and until their successor is elected and qualified. To
be elected, a director must receive the votes of a majority of the shares
present at the meeting by proxy or in person, provided that a majority of
all shares are present at the meeting by proxy or in person. Shares
represented by the proxies solicited by the Board of Directors will be voted
(unless otherwise directed) in favor of the election as directors of the
persons named below. The bylaws of the Company provide for a maximum of
nine directors. The enclosed proxy cannot be voted for a greater number of
persons than the number of nominees named.
Each nominee has agreed to serve as a director of the Company if elected.
However, in the unexpected event of the refusal or inability of any nominee
for director to serve, proxies may be voted for a substitute nominee
designated by the Board of Directors, or the Board may be reduced accordingly.
The following information concerning the principal occupation of each nominee
during the past five years and certain other information have been furnished
to the Company by each nominee for director:
<TABLE>
<S> <C> <C>
SERVED AS
NAME AGE DIRECTOR SINCE
John E Krings 69 New Nominee
Robert L. Bitterli 42 1999
Aaron Thomas 34 New Nominee
Don Chapman 63 1999
Richard A. Waterfield59 1999
</TABLE>
ROBERT L. BITTERLI was appointed Interim Acting President on April 5, 1999 and
appointed Chief Executive Officer, President and Director effective May 12,
1999. Mr. Bitterli founded and served as President of Windfall Corporation,
a management consulting firm, specializing in corporations seeking and
working with government contracts. He also served as President of Security
First Group Benefits Corporation, one of the Trilon Financial group of
companies (the 12th largest financial organizations in the world), providing
marketing, sales, communication and administrative services to employers for
both qualified and non- qualified pension and retirement plans. He served
as Vice President of Security First Group, a company providing investments
and investment advisory services and as General Partner of the Diversified
Securities Network, a company specializing in the sales of securities and
limited partnerships. Mr. Bitterli was with Security First Group for twelve
years. He also owns J&B Properties, a residential property investment and
management company, and a majority interest in Devin Lane Publishing, a
publisher of thriller fiction. He served with honor in the United States
Army in an enlisted and commissioned capacity. He holds a B.S. degree in
Psychology from Campbell University in Bueise Creek, North Carolina and an
M.A. in Business Administration and Personnel Management, both from Webster
University in St. Louis, Missouri. Age 42.
THE HONORABLE JOHN E. KRINGS is currently president of Krings Corporation.
Krings Corporation provides consulting services for the defense industry,
National Aeronautics and Space Agency, and the Federal Aviation Agency.
Prior to serving as President of Krings Corporation, Mr. Krings served as
Assistant Secretary of Defense. The President appointed Mr. Krings as the first
Director, Operational Test and Evaluation (DOT&E), Department of Defense
(DOD), at the level of Assistant Secretary of Defense. As such, he worked
directly for the Secretary of Defense and Congress. Mr. Krings also served
on the Defense Resources Board and the Defense Acquisitions Board. He
evaluated and reported independently to the Congress and the Secretary of
Defense in regard to the effectiveness and suitability of all major weapons
systems as a prerequisite to military systems entering full production. Mr.
Krings has thirty years experience in aerospace design, engineering,
testing, marketing and management with McDonnell Douglas Corporation.
He was responsible for all of McDonnell Douglas Corporation Navy and Marine
Corps programs. Mr. Krings served in the Air Force and Air National Guard
as a fighter pilot, test pilot, and nuclear weapons expert. Mr. Krings
holds a B.S. degree in Chemistry and Physics. Age 69
AARON THOMAS President and founder of Premier Resources Inc., a distributor of
environmentally safe products. Premier Resources was founded in 1996 and
has estimated sales for 1999 of $28,000,000 of environmentally friendly
products. Prior to forming Premier Resources, Mr. Thomas was with Marketing
Strategies for The Future, a marketing company which specialized in bringing
private labeled products to the market. Mr. Thomas spends much of his time
and resources giving back to the less fortunate. He has received national
acclaim for his efforts in helping the disabled, as well as awards from Bnai
Brith and the Red Cross. Age 34
DONALD R. CHAPMAN has served as a director of the Company since May 1999.
From 1962 to the present, Mr. Chapman has been involved in real estate
investments including purchase and sale of properties, financing of
properties, construction of properties and sub-division development. Since
1970, he has been self-employed through the ownership of his own automobile
sales and financing company, Don Chapman Motor Sales. From 1960 to 1970,
Mr. Chapman was employed in auto sales and financing by Republic Finance
Company. From 1959 to 1960, he was in auto sales for Armstrong-Johnson Ford
in Austin, Texas. Mr. Chapman attended the University of Texas at Austin from
1954 to 1959. Age 63.
RICHARD A. WATERFIELD has served as a director of the Company since March
1999. He has been the owner of Database Marketing, a high tech marketing
company, since February 1997 and the owner of Waterworks Productions since
October 1992. Mr. Waterfield has been a loan consultant and lobbyist with
Waterfield and Associates since October 1991. He was elected as a
representative to the Texas State Legislature for District 88 and served two
terms from 1986 to 1991. During that time he was voted Outstanding Freshman
Legislator. He served on the Human Services Agriculture Committee and as a
member of the Congressional Oil and Gas Advisory Committee. From 1984 to
1991, Mr. Waterfield was the owner of Washita Investments, a commodities
trading firm. He was a part owner in Canadian Feed-yard working in
commercial cattle feeding operations, commodity trading and risk management
from 1975 to 1984. Mr. Waterfield has served on the Canadian City Council,
the Canadian School Board and on the board of directors of First State Bank
of Canadian, Texas. He attended Oklahoma State University majoring in
business and animal science. Age 59.
There are no known arrangements or understandings between any of the foregoing
individuals and any other person pursuant to which they were elected as a
director or as a nominee.
The Company has no audit, nominating, or compensation committees. The present
Board of Directors met twelve times during the fiscal year ended January 31,
1998. All incumbent directors attended at least 75% or more of the total
number of meetings of the Board of Directors during the last fiscal year or
for such shorter period that they served as a director.
EXECUTIVE COMPENSATION
The following table sets forth the aggregate remuneration paid or accrued for
the fiscal years ended January 31, 1997, 1998 and 1999, as to each officer
of the Company whose aggregate remuneration exceeds $100,000, and as to the
aggregate remuneration of all officers as a group:
<TABLE>
<S> <C> <C> <C> <C>
ANNUAL COMPENSATION (1)LONG-TERM COMPENSATION
AWARDS PAYOUTS
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
RESTRICTED
NAME AND YEAR SALARY BONUS OTHER ANNUAL STOCK OPTIONS/ LTIP ALL OTHER
PRINCIPAL $ $ COMPENSATION AWARDS SAR'S PAYOUTS COMPENSATION
POSTIONS $ $ # $ $
Terry L. Young,CEO
1997 -0- 7,000 -0- 56,500 -0- -0- -0-
1998 60,000 -0- -0- 7,188 100,000 -0- -0-
1999 63,000 -0- -0- 27,746 -0- -0- -0-
All
Officers 1997 64,8007,000 -0- 106,592 -0- -0- -0-
as a
Group (3 persons)
1998 143,400 -0- -0- 46,325 225,000 -0- -0-
(3 persons)
1999 251,438 -0- -0- 84,998 -0- -0- -0-
(6 persons)
</TABLE>
1) Excludes the value of personal use of Company office facilities and
certain other personal benefits. The value of such personal benefits cannot
be specifically or precisely ascertained without unreasonable effort. After
reasonable inquiry, however, the Company believes that the aggregate annual
amount of such personal benefits does not exceed $50,000 per person or 10% of
the total annual salary and bonus for the named executive officer or officers
as a group.
Neither the Company nor its wholly owned subsidiary has a written employment
contract with any of its officers. All of the officers are currently paid
a regular monthly salary by the Company.
The Company does not have any pension, retirement, deferred compensation or
similar plan for its officers, directors or employees. It does have an
incentive stock option plan for its officers, directors, employees and
other persons who perform substantial services for or on behalf of the
Company. The 1995 Stock Option Plan provides for the granting of options on
a maximum of 1,000,000 shares of the Company's common stock (which number is
subject to adjustments in the event of stock dividends, stock splits and
other similar events).
The 1995 Stock Option Plan is administered by the Board of Directors, or, at
its option, a duly authorized committee of the Board. Options may be
granted at the market bid price of the common stock at the time of issuance
and can be exercised by the payment of cash, surrender of shares of common
stock of the Company equivalent to the option exercise price or through a
reduction in the number of shares received pursuant to the option exercise
equivalent to the amount of the option exercise price. The term of any option
granted may extend for seven years from the date of grant. No options were
granted pursuant to the 1995 Stock Option Plan to Officers and Directors
during the fiscal year ended January 31, 1999. The four directors during
fiscal year 1999, Terry L. Young, David W. Redding, William C. Branch and
Nicholas N. Wentworth each received 5,000 shares of restricted common stock
for their services on the board of directors. The fair market value of the
common stock was $0.75 per share.
Under Utah law the Company is entitled to pay compensation to its directors.
The Company has adopted a policy of compensation for its directors, subject
to ratification by the shareholders proposed here in. The Company may
implement a cash compensation plan to compensate its directors at some
point in the future. Directors are also eligible to receive stock options
under the 1995 Stock Option Plan.
1995 STOCK OPTION PLAN
The Company does not have any pension, retirement, deferred compensation, or
similar plan for its officers or employees. The Company does have an
incentive stock option plan for its officers, directors, employees and
persons who perform substantial services for or on behalf of the Company.
The Company's 1995 Stock Option Plan which replaced the 1993 Stock Option
Plan (under which no options were granted) authorizes the grant of stock
options with respect to up to 1,000,000 shares of the common stock (which
number is subject to adjustments in the event of stock dividends, stock splits
and other similar events) and, accordingly, 1,000,000 shares of authorized
but unissued stock have been set aside by the Board of Directors for issuance
subject to options that may be granted under the 1995 Stock Option Plan. The
Plan is administered by the Board of Directors, or, at its option, a duly
authorized committee of the Board. All employees (including executive
officers and directors) of the Company, and its subsidiary, together with
other persons who perform substantial services for or on behalf of the
Company, are eligible to receive options under the 1995 Stock Option Plan.
The term of the 1995 Stock Option Plan is for a period of five years from the
date of the plan. Options granted under the Plan are granted at the market
"bid" price of the common stock at the time of grant and may be exercised by
the optionee by the payment of cash, surrender of shares of common stock of
the Company equivalent to the option exercise price or through a reduction in
the number of shares received pursuant to the option exercise equivalent to
the amount of the option exercise price for a period of seven years from the
date of grant. No options were granted under the 1995 Stock Option Plan
during the fiscal year ended January 31, 1999.
The following table sets forth the aggregated option/SAR exercises in the last
fiscal year and the fiscal year- end option/SAR values:
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FY-END OPTION/SAR VALUES
<TABLE>
<S> <C> <C> <C> <C>
NUMBER OF VALUE OF
SHARES UNEXERCISED in-the-Money
ACQUIRED Options/SAR's Options/SAR's
ON VALUE at FY END (#) at FY End($)
EXERCISE REALIZED Exercisable Exercisable
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
David W. Redding -0- -0- 100,000 E 0/0
Kimberly A. Love -0- -0- 25,000 E 0/0
</TABLE>
The exercisable options listed in the above table were granted to the
officer listed on June 17, 1997. No options were exercised during the fiscal
year ended January 31, 1999. The options for David Redding are currently
under dispute.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Austin Young, Inc. is the major stockholder of the Company, beneficially
owning 3,179,118 shares, or approximately 42.84% of the common stock at
March 31, 1999, which amount includes the shares beneficially owned by
Austin Young, Inc. as described above. Austin Young, Inc. is controlled by
Terry L. Young, the Chief Executive Officer, Chairman and controlling
shareholder of the Company during the fiscal year ended January 31, 1999.
Austin Young, Inc. is a publicly held Texas corporation that operates as a
realestate developer principally in the Austin, Texas area. It also owns a
publishing company, American Crisis Publishing, Inc., which publishes drug
and alcohol abuse literature, educational books and magazines for ages
5 through adult, and coloring books for children ages one through four. Mr.
Young owns approximately 90% and the public shareholders own approximately
10% of the outstanding common stock of Austin Young, Inc. Mr. Young
beneficially owns 3,179,118 shares or approximately 42.84% of the outstanding
stock of the company at March 31, 1999, which amount includes the shares owned
by Austin Young, Inc. as described above.
On October 8, 1993, the Company entered into a Commercial Earnest Money
Contract with Cassidy Consolidated Properties, Inc., a corporation controlled
by the former spouse of Terry L. Young. The purchase price of the building
purchased pursuant to the contract was $180,000, paid by the issuance of
6,000 shares of common stock and a note payable of $150,000 payable at the
rate of $1,500 per month. The seller acquired the building in 1992 for
$150,000. In August, 1996, this mortgage was paid off and refinanced at
a bank using collateral of Austin Young, Inc. as security and granting Austin
Young, Inc. a security interest in the warehouse facility. During the fiscal
year ended January 31, 1999 the bank loan was repaid from proceeds of a
private stock offering.
In February 1992, the Company issued stock to the shareholders of American
Absorbents, Inc. in return for all of the outstanding shares of such company.
Terry L. Young received 290,000 shares, or approximately 41% of the shares
of common stock issued in such transaction. Mr. Young received 200,000 of
the 290,000 shares for services rendered in founding the subsidiary of the
Company. The remaining shares were also issued for services rendered to the
Company.
On May 13, 1991, 3,380,000 (pre-split) shares were purchased by the Company
from Austin Young, Inc. for $65,000 and canceled. The Company agreed that
Austin Young, Inc. would have the right to repurchase these shares for the
same price at any time up to June 1, 1993. On July 15, 1992, the Company
issued 3,380,000 (post-split) shares to Austin Young, Inc. for debt relief of
$65,000.
In February 1993, the Company issued to Austin Young, Inc. a five-year option
to purchase up to 1,000,000 shares of common stock at an exercise price of
$3.00 per share. On June 16, 1993, Austin Young, Inc. exercised its option
to purchase 12,000 shares. On June 17, 1997, Austin Young, Inc. returned
the remaining 988,000 options to the Company for cancellation.
Austin Young, Inc. furnishes to the Company the office space and some
equipment currently used by the Company pursuant to a 5-year lease dated
July 1996, for a monthly lease rate of $1,900.
Austin Young, Inc. has advanced funds to the Company from time to time for
operating expenses. At January 31, 1999, the Company owed approximately
$50,000 in principal to Austin Young, Inc., which amount was evidenced by a
promissory note bearing interest at 7% per annum and due on demand. The
note payable to Austin Young, Inc. was reduced by $129,052 during the fiscal
year ended January 31, 1999 from proceeds of a private stock offering.
CHANGE IN CONTROL
There were no arrangements known to management the effect of which would
result in a change of control of the Company, nor did such a change of
control occur during the fiscal year ended January 31, 1999. During the
first part of fiscal year 2000 several changes in management occurred as
follows which resulted in a virtual change in managing control of the Company.
Terry L. Young resigned as Chief Executive Officer effective March 1, 1999 and
his term as Chairman of the Board of Directors and as a director on April 30,
1999.
David W. Redding's services as President, Chief Operating Officer, Assistant
Secretary, and Treasurer terminated effective May 12, 1999.
William C. Branch resigned as a member of the Board of Directors effective
February 26, 1999.
Donald L. Gillespie and Richard A. Waterfield were elected to the Board of
Directors of the Company in March 1999.
Robert L. Bitterli was appointed Interim Acting President on April 5, 1999 and
appointed Chief Executive Officer, President and Director effective May 12,
1999.
Donald R. Chapman was elected a Director in May 1999.
James W. Haake was appointed Chief Operating Officer in June 1999.
Nicholas N. Wentworth was elected as Chairman of the Board of directors May
10, 1999.
RATIFICATION AND APPROVAL OF THE APPOINTMENT OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The board will hire a qualified independent certified public accountant to act
as independent auditor and accountant for the Company for the fiscal year
ending January 31, 2000.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information furnished by the following
persons concerning the common stock ($0.001 par value) ownership as of March
31, 1999, of (i) each person whois known to the Company to be the beneficial
owner of more than 5 percent of the common stock; (ii) all directors and
nominees for director; and, (iii) all directors, nominees for director and
officers of the Company as a group:
<TABLE>
<S> <C> <C> <C>
NAME AND ADDRESS NUMBER OF SHARESOF COMMON STOCK COMMON STOCK
OF BENEFICIAL OWNER SUBJECT PERCENT OF CLASS
TO OPTIONS OR
WARRANTS
Austin Young, Inc. 3,179,118 -0- 42.84
3800 Hudson Bend Rd.
Austin, TX 78734
Terry L. Young 3,179,118 -0- 42.84
3800 Hudson Bend Rd.
Austin, TX 78734
David W. Redding 232,559 100,000* 4.42
3800 Hudson Bend Rd.
Austin, TX 78734
William C. Branch 232,662 -0- 3.14
3800 Hudson Bend Rd.
Austin, TX 78734
Nicholas N. Wentworth 43,335 -0- 0.58
3800 Hudson Bend Rd.
Austin, TX 78734
James R. Toney 27,081 -0- 0.36
3800 Hudson Bend Rd.
Austin, TX 78734
Kimberly A. Love -0- 25,000 0.34
3800 Hudson Bend Rd.
Austin, TX 78734
Daniel F. Creedon 41,170 -0- 0.55
3800 Hudson Bend Road.
Austin, TX 78734
Mark W. Martich 100 -0- 0.00
3800 Hudson Bend Rd.
Austin, TX 78734
Richard A. Waterfield -0- -0- 0.00
3800 Hudson Bend Rd.
Austin, TX 78734
Donald L. Gillespie 62,600 -0- 0.84
3800 Hudson Bend Rd.
Austin, TX 78734
Officers and Directors 3,714,211 125,000 52.27
as a Group (10 Persons)
</TABLE>
* Under dispute
1) Unless otherwise indicated, the second column reflects amounts as to
which the beneficial listed in the first column has sole voting power and sole
investment power.
2) The total number of shares of common stock outstanding as of March 31,
1999, was 7,420,252. Option shares to each named director or officer, which
are not currently outstanding but which are subject to option exercise, are
deemed to be outstanding for the purpose of computing that director's,
officer's or group's percentage of ownership of outstanding shares of common
stock, but are not deemed to be outstanding for computing the percentage of
common stock owned by any other person.
3) Austin Young, Inc. is approximately 90% controlled by Terry L. Young,
its Chairman and CEO. Mr. Young was a director, officer and 42.84%
controlling shareholder of the Company through his control position in Austin
Young, Inc. Of the shares set forth above, 47,000 are held in brokerage
accounts in the name of Austin Young, Inc.
4) Of the shares set forth above for Terry L. Young, 2,910,292 are
owned of record by Austin Young, Inc., a corporation controlled by Mr. Young;
47,000 are held in brokerage accounts in the name of Austin Young, Inc.;
113,894 are held in the name of Mr. Young; 80,918 are held in the name of
Terry L. Young and Austin Young, Inc.; 2,800 are owned of record by the
spouse of Mr. Young; 4,214 are held in the name of Kim E. Coleman as custodian
for Gretchen Coleman, and, 20,000 are held in brokerage accounts of record by
the children of Mr. Young.
5) Of the shares set forth above for David W. Redding, 205,059 are held
in the name of David W. Redding; 27,000 are held in the name of David W.
Redding for the benefit of family members, and, 500 are owned of record by
the spouse of Mr. Redding.
6) Of the shares set forth above for William C. Branch, 177,189 are
owned of record by Mr. Branch, 29,000 are owned of record by Mr. Branch as
custodian for the Charles P. Davis Trust and 26,473 are held of record by Mr.
Branch as custodian for family members.
7) Of the shares set forth above for Donald L. Gillespie, 62,500 are
held in the name of Mr. Gillespie and 100 are owned of record by the spouse of
Mr. Gillespie.
8) Of the shares set forth above for Daniel F. Creedon, 16,898 are held
in the name of Mr. Creedon and 24,242 are held in a brokerage account for the
benefit of Mr. Creedon.
9) Of the shares set forth above for Nicholas N. Wentworth, 10,000 are
held in the name of Mr. Wentworth and 33,335 are held in a brokerage account
for the benefit of Mr. Wentworth.
SECURITY OWNERSHIP OF NOMINEES & NEWLY ELECTED OFFICERS AND DIRECTORS:
The following table sets forth the security ownership on March 31, 1999 for
each of the nominees and newly elected officers and directors elected to
their positions subsequent to March 31, 1999:
<TABLE>
<S> <C> <C> <C>
NAME AND ADDRESS NUMBER OF SHARESOF COMMON STOCK COMMON STOCK
OF BENEFICIAL OWNER SUBJECT PERCENT OF CLASS
TO OPTIONS OR
WARRANTS
John E. Krings 9600 0 .13%
Marina Club No. 8
4408 Long Champ Drive
Austin, Texas 78646
Robert L. Bitterli 226,800 -0- 3.05%
3800 Hudson Bend Rd.
Austin, TX 78734
Aaron Thomas 0 0 0
733 Cowboys Parkway
Irving, Texas 75063
James W. Haake 17,500 -0- 0.24%
3800 Hudson Bend Rd.
Austin, TX 78734
Donald R. Chapman 17,468 -0- 0.24%
3800 Hudson Bend Rd.
Austin, TX 78734
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RATIFICATION AND APPROVAL OF THE BORROWING OF WORKING CAPITAL FUNDS,
USE OF COLLATERAL AND OFFICE/EQUIPMENT LEASES FROM AUSTIN, YOUNG, INC.
From time to time, since inception, the Company has been advanced working
capital funds from Austin Young, Inc. No working capital funds were
advanced to the Company during the fiscal year ended January 31, 1999.
During fiscal 1999 the note to Austin Young, Inc. was reduced by $129,052
in principal. At January 31, 1999, the total amount owing to Austin Young,
Inc. was $50,000. Such amount is evidenced by a demand promissory note
bearing interest at 7% per annum. Management of the Company believes that the
terms of the note are fair to the Company. In addition, the Company has used
collateral of Austin Young, Inc. to secure bank financing on the warehouse
facility in Austin, Texas and has in turn given Austin Young, Inc. a
security interest in the warehouse facility for the use of Austin Young,
Inc.'s assets as collateral. That note was repaid during the year ended
January 31, 1999 and the security interest in the warehouse facility
was released by Austin Young, Inc. The Company also leases office space and
equipment from Austin Young, Inc. at a rate of $1,900 per month. However,
because none of the directors at such time that these transactions were made
was a disinterested party, the transactions may be subject to challenge by the
shareholders.
Section 16-10a-851 of the Utah Revised Business Corporation Act provides that
no such conflicting interest transactions may be enjoined, be set aside, or
give rise to an award of damages or other sanctions, in a proceeding by a
shareholder or by or in the right of the corporation, if the shareholders
holding qualified shares approve the transactions at any time, provided that
the shareholders holding a majority of such qualified shares are present at
a duly held meeting and a majority of such qualified shares present at the
meeting vote in favor of the transactions. For purposes of this section, the
term "qualified shares" means those shares otherwise entitled to vote on the
transactions, except shares owned or controlled by a director who has a
conflicting interest respecting the transactions, or by a related
person of that director (see "Security Ownership of Certain Beneficial
Owners and Management"). There are approximately 3,149,139 common shares
qualified to vote on this proposal. In addition, the transactions may not be
enjoined, be set aside, or give rise to an award of damages or other
sanctions, in a proceeding by a shareholder or by or in the right of the
corporation, if the transactions, judged according to the circumstancesat the
time of commitment, is established to have been fair to the corporation.
Therefore, the Board of Directors is seeking ratification and approval of the
transactions described above at the annual meeting of shareholders by persons
holding qualified shares. If less than a majority of the persons holding
qualified shares are present at the annual meeting of shareholders, or if
less than a majority of such qualified shares are voted for ratification and
approval of such transactions, the transactions may be challenged under the
section set forth above. Notwithstanding a failure by the shareholders to
ratify and approve the transactions, the Board of Directors believes that under
the circumstances at the time of such transactions with Austin Young, Inc.,
such transactions were fair to the Company and does not intend to seek
rescission of the granting of loans, use of collateral or lease agreements by
Austin Young, Inc. to the Company.
LEGAL PROCEEDINGS
Neither the Company, any of its properties, nor its subsidiary is a party to
any material pending legal proceeding or government action, including any
material bankruptcy, receivership, or similar proceedings. Management of the
Company does not believe that there are any material proceedings to which any
director, officer or affiliate of the Company or its subsidiary, any owner of
record, beneficially, of more than 5 percent of the common stock of the
Company, or any associate of any such director, officer or affiliate of the
Company, or security holder is a party adverse to the Company or its
subsidiary or has a material interest adverse to the Company or its
subsidiary. The Company does, from time to time, get involved in litigation
in the carrying out of its operations.
On or about May 25, 1998, the Company received service on a lawsuit (Cause No.
9804737) that was filed in the 126th Judicial District Court of Travis
County, Texas by Mr. Charles R. Walden, Jr. (former President of the
Company). Named as defendants in the lawsuit were American Absorbents Natural
Products, Inc. and Terry L. Young. Prior to receiving service on the lawsuit,
the Company had filed a lawsuit against Mr. Walden seeking the return and
cancellation of 200,000 common shares he had been sold at a reduced rate
pursuant to a 30 month note by Austin Young, Inc. in return for future
services to the Company to get the Company beyond the development stage.
Mr. Walden's services to the Company was terminated for cause within 60 days
of the transaction. Subsequent to the sale by note of the shares to Mr.
Walden by Austin Young, Inc., the Company purchased the note from Austin
Young, Inc. The Company sought to have these shares canceled for the
benefit of all shareholders for failure on Mr. Walden's part to perform the
required services and failure to pay the note when due in August, 1997. The
Company did not expect this litigation to have any material impact on the
Company, its management or its operations. This matter was settled in
arbitration in early 1999 by Mr. Walden's return to the Company of 50,000 of
the common shares for a $15,000 payment by the Company to Mr. Walden and the
Company's forgiveness of the note in exchange for return of an additional
40,000 shares to the Company. Mr. Walden is only allowed to sell 4,000 shares
of his remaining shares each 30-day period.
On or about July 6, 1998, the Company filed a Complaint For Declaratory Relief
(Case No. 98-07-145-CV) in the Circuit Court of the State of Oregon for the
County of Harney against David Calkins seeking removal of a Claim of Lien
Upon Chattels. Mr. Calkins was contracted by the Company to install milling
equipment for the Company in its Oregon Milling Facility. Mr. Calkins alleged
that he was not completely paid for the installation and filed a Claim of
Lien Upon Chattels (No. 980681) in the amount of $10,806.37. The Company
alleges that, after deducting items that were completed without the Company's
approval and for the personal benefit of Mr. Calkins and after paying directly
to Service Providers items that were billed to the Company by Mr. Calkins,
the contract fees were all paid to Mr. Calkins. The Company's management
does not expect this litigation to have any material impact on the Company,
its management or its operations.
The Company is currently investigating certain allegations of improprieties
involving former officers of the Company. The Company does not believe that
the improprieties even if true would have a materially adverse impact on the
Company.
FINANCIAL STATEMENT
The audited financial statements of the Company for the years ended January
31, 1999 and 1998 are included with this proxy statement.
SHAREHOLDER PROPOSALS FOR THE 2000 ANNUAL MEETING OF SHAREHOLDERS
The next annual meeting of shareholders of the Company is presently and
tentatively scheduled for July 12, 2000. Proposals of shareholders
intended to be presented at such meeting must be received by the Secretary
of the Company at the offices of the Company at the address listed above no
later than January 31, 2000.
OTHER BUSINESS
As of the date of this Proxy Statement, The Board of Directors knows of no
other matters to be presented for action at the annual meeting of
shareholders. If other matters are properly presented, the person named in
the proxy intends to vote in accordance with their best judgment on such
matters.
By Order of the Board of Directors
s/Nicholas N. Wentworth__________________
Nicholas N. Wentworth, Chairman of the Board
Austin, Texas
June 16, 1999
AMERICAN ABSORBENTS NATURAL PRODUCTS, INC.
3800 hudson bend road, ste. #300 AUSTIN, TX. 78734
PROXY
This proxy is solicited on behalf of the board of directors. The undersigned
hereby appoints Nicholas N. Wentworth as Proxy, with the power to appoint
his substitute, and hereby authorizes him to represent and to vote, as
designated below, all the shares of common stock of American Absorbents
Natural Products Inc. held of record by the undersigned on April 30, 1999, at
the annual meeting of shareholders to be held on July 28, 1999, or any
postponements or adjournments thereof.
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1. ELECTION OF DIRECTORS
FOR all nominees listed below (except as marked to the contrary below)
WITHHOLD AUTHORITY to vote for all nominees listed below.
(Instruction: To withhold authority to vote for any individual
nominee, strike a line throughthe nominee's name in the list below.)
ROBERT BITTERL DON CHAPMAN JOHN E. KRINGS AARON THOMAS RICHARD
WATERFIELD
2. To authorize the board to hire a qualified independent certified public
accountant to act as independent auditor and accountant for the Company for
the fiscal year ending January 31, 2000; (Circle One)
FOR AGAINST ABSTAIN
3. Proposal to ratify and approve the transactions with Austin Young, Inc.
(Circle One)
FOR AGAINST ABSTAIN
4. Proposal to ratify that all non-employee directors be paid the value of
$500 in common stock per meeting attended and that said stock shall be
issued based on the average closing asking price for the thirty days
preceding the meeting.
FOR AGAINST ABSTAIN
5. In his discretion, the Proxy is authorized to vote upon such other
business as may properly come before the meeting.
FOR AGAINST ABSTAIN
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1, 2, 3, 4 AND 5.
Shares held by joint tenants requires both signatures. When signing as
attorney, executor, administrator, trustee or guardian, please give full
title as such. If a corporation, please sign in full corporate name by
authorized officer. If a partnership, please sign in partnership name by
authorized person.
____________________________________ ____________________________________
Signature if individually held
Corporation or Partnership Name
Print Name(s)_____________________________________________________________
____________________________________ By:____________________________________
Signature if jointly held
Authorized officer or person
Date:____________________________,1999 NUMBER OF SHARES________________
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY.
