SASKATOON, SASKATCHEWAN, Aug. 28, 2009 (Marketwire) -- Athabasca Potash Inc. ("API" or the "Company") (TSX:API)
The annual and special meeting of the Company scheduled for 2:00 p.m. on September 3, 2009 will determine the future of the Company and is now only days away. Shareholder votes are important to the outcome, regardless to the number of shares that you hold, and API wants to help shareholders ensure that all shareholder votes are counted.
Shareholders are invited to attend the meeting in person at the Delta Bessborough Hotel, 601 Spadina Crescent East, Saskatoon, Saskatchewan. Whether a shareholder can be there in person or not, shareholders are encouraged to vote by completing and signing the proxy form provided to them by management and returning it following the instructions on the form. Please disregard the proxy received from CSIT and sign on the proxy titled "THIS PROXY IS SOLICITED BY MANAGEMENT OF ATHABASCA POTASH INC." To be sure votes are counted, please return your proxy prior to 4:30 p.m., Toronto time, on Monday, September 1, 2009.
If you have misplaced your proxy or require assistance in voting your proxy, please contact Laurel Hill Advisory Group for assistance, toll free at 1-800-316-9827 or outside North America (416) 637-4661.
Shareholders are being asked to vote on a few questions at the meeting, but the central issue shareholders must decide is the composition of the Board of Directors of API since that will set the direction and determine the future of API. If shareholders vote for the management nominated directors, API can continue the strategic process announced in its July 16, 2009 press release. The slate proposed by dissident shareholders led by Dawn Zhou, the former CEO of API and her company (the "Zhou Group ") are challenging the management proposed slate.
Among the vague and misleading claims in the dissident circular is that the current Board of Directors (the nominees proposed for election by management) "are not adequately exploring all of the options which may be available to the Company with respect to the development of the Burr Project." This is an absolutely false statement.
It is the view of the independent directors that one thing is clear and that is that the goal of the dissident is the return of control of API to Dawn Zhou.
The independent directors of the incumbent Board have no objective other than to provide good governance and act in the best interests of the Company and its shareholders.
The Board, except Ms. Zhou, does not believe the dissidents present a favourable option to API shareholders. Shareholders are urged not to sign and return any forms of proxy that may be sent to them by the Zhou Group.
The Role of Dawn Zhou
On June 25, 2009, after serious and lengthy deliberation by the Board of Directors over a period of time that commenced in mid 2008, Dawn Zhou was removed from her role as President and CEO of API.
The CEO dismissal was the result of a deliberative process of the Board over a year's duration. It involved consultations with Dawn Zhou and numerous others, including with lawyers and professional search and compensation advisors.
On October 8, 2008, after months of observation and deliberation by the Board, the Board advised Ms. Zhou during a performance evaluation at a full Board meeting that they were of the opinion that she was not qualified to hold the position of President and CEO of the Company. By this time, the Board, except Ms. Zhou, but including Ken MacNeill, formally concluded that Ms. Zhou was too inexperienced and unqualified and that she suffered a lack of major transaction and major project development experience. In short, it was the entire Board's opinion that she did not possess sufficient knowledge of business process. The Board concluded that Ms. Zhou, albeit a highly entrepreneurial founder who had acquired a large share position as a result of a property vend in and share option awards, did not perform or demonstrate the executive capacity and experience to continue to run the Company and deliver the best long term value for shareholders.
The performance evaluation at the October, 2008 Board meeting was presented to Ms. Zhou by the Board, led by then Board Chair, Ken MacNeill. Mr. MacNeill is now part of the Zhou Group slate. Mr. MacNeill resigned from the Board shortly after this review was presented.
During and subsequent to the observation period, the Board had to deal with a litany of decision and management issues created by the former CEO. These issues included:
- The Board had to intervene to stop the CEO's unauthorized multi-million dollar plans to lease new corporate headquarters.
- The Board had to redefine the Company's project plans with proper budget constraints.
- The Board had to force the CEO, on threat of dismissal, to answer questions raised by the Board. The Board also had to force her to provide the Company's geological information for a review to a Board member, who is a PhD geologist.
- The Board determined that the Company had to retain advisors to organize its partner search for the Company's Burr Project and instructed the lead director to supervise that effort. Ms. Zhou ignored the structure of the engagement with the lead director and failed to keep the lead director or the Board informed on significant process developments up to the time of her termination.
- The Board had to re-write and/or cause to be edited most material information releases the Company issued.
- As CEO, she bridled at any constraints on her management autonomy and efforts by the Board to put in place accounting and authorization limit policies controlling expenditure and payment limits, especially as related to the authority to make, and the manner of accounting for, future expenditure commitments.
- The Board had to revisit and renegotiate a number of employment contracts that, when reviewed by the Board, confirmed that the CEO had either negotiated or changed such agreements in ways that were not authorized or expected by the Board or in line with good governance practices for the Company.
After the October, 2008 performance evaluation, the Board defined a rapid succession plan to recruit an Executive Chairman ready to become CEO and requested Ms. Zhou's cooperation. As part of this plan Ms. Zhou was offered the position of Non-Executive Chairman in respect of her founding role and asked to cooperate in the search for a new CEO. Ms.
