Edgar Filing: ALTAIR NANOTECHNOLOGIES INC

Microsoft Word 10.0.2627;UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

Filed by the Registrant [X] Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[ ] Preliminary Proxy Statement

[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))

[X] Definitive Proxy Statement

[ ] Definitive Additional Materials

[ ] Soliciting Material Pursuant to ss.240.14a-12

Altair Nanotechnologies Inc.
-----------------------------------------------
(Name of Registrant as Specified In Its Charter)

-----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1) Title of each class of securities to which transaction applies:

_______________________________________________________________________

(2) Aggregate number of securities to which transaction applies:

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(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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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

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(2) Form, Schedule or Registration Statement No.:

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(4) Date Filed:

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ALTAIR NANOTECHNOLOGIES INC.
204 Edison Way
Reno, Nevada 89502
U.S.A.

MANAGEMENT INFORMATION CIRCULAR
AND PROXY STATEMENT

Solicitation of Proxies
-----------------------

THIS MANAGEMENT INFORMATION CIRCULAR AND PROXY STATEMENT (THE
"INFORMATION CIRCULAR") IS FURNISHED IN CONNECTION WITH THE SOLICITATION BY THE
MANAGEMENT OF ALTAIR NANOTECHNOLOGIES INC. (THE "CORPORATION") OF PROXIES TO BE
USED AT THE ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS OF THE CORPORATION TO BE
HELD AT THE TIME AND PLACE AND FOR THE PURPOSES SET FORTH IN THE ENCLOSED NOTICE
OF MEETING (THE "MEETING"). This Information Circular, the notice of Meeting
attached hereto, and the accompanying form of proxy and the Annual Report of the
Corporation for the year ended December 31, 2004 are first being mailed to the
shareholders of the Corporation on or about April 22, 2005. It is expected that
the solicitation will be primarily by mail, but proxies may also be solicited
personally, by email, by facsimile or by telephone by officers of the
Corporation without additional compensation therefor. If one or more
shareholders files a proxy statement or solicits proxies in opposition to the
recommendations of the board of directors of the Corporation (the "Board of
Directors" or the "Board"), the Corporation may engage outside solicitors to
assist with its solicitation of proxies. Details regarding any such engagement
will be set forth in a supplement to this Information Statement.

The cost of solicitation by management will be borne directly by the
Corporation. Arrangements will be made with brokerage firms and other
custodians, nominees and fiduciaries for the forwarding of solicitation
materials to the beneficial owners of the Common Shares of the Corporation
("Common Shares") held by such persons, and the Corporation will reimburse such
brokerage firms, custodians, nominees and fiduciaries for the reasonable
out-of-pocket expenses incurred by them in connection therewith.

Appointment and Revocation of Proxies
-------------------------------------

The persons named in the enclosed form of proxy are officers and/or
directors of the Corporation. A SHAREHOLDER DESIRING TO APPOINT SOME OTHER
PERSON TO REPRESENT HIM AT THE MEETING MAY DO SO either by inserting such
person's name in the blank space provided in that form of proxy or by completing
another proper form of proxy and, in either case, depositing the completed proxy
at the office of the transfer agent indicated on the enclosed envelope not later
than 48 hours (excluding Saturdays and holidays) before the time of holding the
Meeting, or by delivering the completed proxy to the chairman on the day of the
Meeting or adjournment thereof.

A proxy given pursuant to this solicitation may be revoked by
instrument in writing, including another proxy bearing a later date, executed by
the shareholder or by his attorney authorized in writing, and deposited either
at the Corporation's principal office located at 204 Edison Way, Reno, Nevada at
any time up to and including the last business day preceding the day of the
Meeting, or any adjournment thereof, at which the proxy is to be used, or with
the chairman of such Meeting on the day of the Meeting, or adjournment thereof,
or in any other manner permitted by law.

Voting of Proxies
-----------------

THE COMMON SHARES REPRESENTED BY A DULY COMPLETED PROXY WILL BE VOTED
OR WITHHELD FROM VOTING IN ACCORDANCE WITH THE INSTRUCTIONS OF THE SHAREHOLDER
ON ANY BALLOT THAT MAY BE CALLED FOR AND, IF THE SHAREHOLDER SPECIFIES A CHOICE
WITH RESPECT TO ANY MATTTER TO BE ACTED UPON, SUCH COMMON SHARES WILL BE VOTED
ACCORDINGLY. UNLESS OTHERWISE INDICATED ON THE FORM OF PROXY, SHARES REPRESENTED
BY PROPERLY EXECUTED PROXIES IN FAVOR OF PERSONS DESIGNATED IN THE PRINTED
PORTION OF THE ENCLOSED FORM OF PROXY WILL BE VOTED (I) TO ELECT MANAGEMENT'S
SEVEN NOMINEES FOR DIRECTOR, (II) TO RATIFY THE APPOINTMENT OF DELOITTE & TOUCHE
LLP AS THE CORPORATION'S INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING
DECEMBER 31, 2005, (III) TO APPROVE THE ALTAIR NANOTECHNOLOGIES INC 2005 STOCK
INCENTIVE PLAN, AND (IV) TO RATIFY THE AMENDMENT TO THE BYLAWS INCREASING THE
QUORUM REQUIREMENT FOR SHAREHOLDER MEETINGS. The enclosed form of proxy confers
discretionary authority upon the persons named therein with respect to
amendments or variations to matters identified in the notice of Meeting, or
other matters which may properly come before the Meeting. At the time of
printing this Information Circular, management of the Corporation knows of no
such amendments, variations or other matters to come before the Meeting.

At the Meeting, shareholders of the Corporation will be asked to
approve the Altair Nanotechnologies Inc. 2005 Stock Incentive Plan (the "2005
Plan"). Pursuant to the 2005 Plan, directors and executive officers of the
Corporation will be eligible to receive grants of options and other incentive
awards. To the knowledge of the Corporation, such persons hold an aggregate of
79,073 issued and outstanding Common Shares as of the date hereof. Approval of
the 2005 Plan will be obtained if a majority of the votes cast are in favour
thereof. See "Proposal No. 3 - Approval of the Altair Nanotechnologies Inc. 2005
Stock Incentive Plan."

Voting Securities and Principal Holders of Voting Securities
------------------------------------------------------------

The authorized capital of the Corporation consists of an unlimited
number of Common Shares. As of April 11, 2005, the Corporation had issued and
outstanding 58,785,789 Common Shares.

The Corporation shall make a list of all persons who are registered
holders of Common Shares on April 18, 2005 (the "Record Date") and the number of
Common Shares registered in the name of each person on that date. Each
shareholder is entitled to one vote for each Common Share registered in his name
as it appears on the list except to the extent that such shareholder has
transferred any of his shares after the Record Date and the transferee of those
shares produces properly endorsed share certificates or otherwise establishes
that he owns the shares and demands, not later than ten days before the Meeting,
that his name be included in the list. In such case the transferee is entitled
to vote those shares at the Meeting in lieu of the transferor.

One-third of the outstanding Common Shares entitled to vote,
represented in person or by properly executed proxy, is required for a quorum at
the Meeting. Abstentions will be counted as "represented" for purposes of
determining the presence or absence of a quorum. Complete broker non-votes,
which are indications by a broker that it does not have discretionary authority
to vote on any of the matters to be considered at the Meeting, will not be
counted as "represented" for the purpose of determining the presence or absence
of a quorum.

To the knowledge of the directors and executive officers of the
Corporation, as of April 11, 2005, no person beneficially owns, directly or
indirectly, or exercises control of direction over more than 10% of the
outstanding Common Shares.

Under the Canada Business Corporations Act (the "CBCA"), once a quorum
is established, in connection with the election of directors, the seven nominees
receiving the highest number of votes will be elected. In order to approve each
of the proposals in respect of the ratification of the appointment of
independent auditors, the approval of the 2005 Plan and the approval of the
Bylaw Amendment (as defined herein), the votes cast in favour of such proposal
must exceed the votes cast against. Abstentions and broker non-votes will not
have the effect of being considered as votes cast against any of the matters
considered at the Meeting.

Exchange Rate Information
-------------------------

The following exchange rates represent the noon buying rate in New York
City for cable transfers in Canadian dollars (CDN. $), as certified for customs
purposes by the Federal Reserve Bank of New York. The following table sets
forth, for each of the years indicated, the period end exchange rate, the
average rate (i.e. the average of the exchange rates on the last day of each
month during the period), and the high and low exchange rates of the U.S. Dollar
(U.S. $) in exchange for the Canadian Dollar (CDN. $) for the years indicated
below, based on the noon buying rates.

--------------------------------------------------------------------------------------
For the Year Ended December 31,
--------------------------------------------------------------------------------------
2004 2003 2002 2001 2000
--------------- ------------- ------------- ------------- ------------- --------------
(Each U.S. Dollar Purchases the Following Number of Canadian dollars)
--------------------------------------------------------------------------------------

High 1.3970 1.5750 1.6128 1.6023 1.5600
--------------- ------------- ------------- ------------- ------------- --------------
Low 1.1775 1.2923 1.5108 1.4933 1.4350
--------------- ------------- ------------- ------------- ------------- --------------
Average 1.2984 1.3916 1.5702 1.5519 1.4871
--------------- ------------- ------------- ------------- ------------- --------------
Year End 1.2034 1.2923 1.5800 1.5925 1.4995
--------------- ------------- ------------- ------------- ------------- --------------

PROPOSAL NO. 1 -- ELECTION OF DIRECTORS

The Articles of Continuance of the Corporation (the "Articles") provide
that the Board may consist of a minimum of three and a maximum of nine
directors, to be elected annually. The Board presently consists of eight
directors; the Board has determined to reduce the number of directors
constituting the whole Board to seven directors effective as of the Meeting.
Each director will hold office until the next annual meeting or until his
successor is duly elected unless his office is earlier vacated in accordance
with the by-laws of the Corporation. Pursuant to the Articles, the Board has
been empowered to set the size of the Board, subject to any limitations set
forth in the Articles of the CBCA. The Articles provide that the Board may,
between meetings of shareholders, appoint one or more additional directors, but
only if, after such appointment, the total number of directors would not be
greater than one and one-third times the number of directors required to have
been elected at the last annual meeting of shareholders.

Certain information with respect to the seven nominees for director
approved by the Board is set forth in the table below:

-------------------------- -------------------- ----------------- ------------------------------
Number of Common Shares
Period of Beneficially Owned or Over
Name & Province/State Office with Service as a Which Control is Exercised
and Country Corporation Director as of March 18, 2005(1)
-------------------------- -------------------- ----------------- ------------------------------

Alan J. Gotcher Chief Executive Since 2004 281,740(2)
Officer and
Director
Nevada, U.S.A.
-------------------------- -------------------- ----------------- ------------------------------

Jon N. Bengtson Chairman(A) Since 2003 50,000 (3)
Nevada, U.S.A.
-------------------------- -------------------- ----------------- ------------------------------

James Golla Director(C) Since 1994 80,000 (4)
Ontario, Canada
-------------------------- -------------------- ----------------- ------------------------------

George Hartman Director(A) (C) Since 1997 35,800 (5)
Ontario, Canada
-------------------------- -------------------- ----------------- ------------------------------

David King Director(C) Since 2004 60,000 (6)
Washington, D.C., U.S.A.
-------------------------- -------------------- ----------------- ------------------------------

Christopher E. Jones Director (A) Since 2004 50,000(7)
California, U.S.A.
-------------------------- -------------------- ----------------- ------------------------------

Michel Bazinet Director Since 2004 0
Quebec, Canada
-------------------------- -------------------- ----------------- ------------------------------

(A) Member of Audit Committee
(C) Member of Compensation, Corporate Governance and Nominations Committee

(1) The information as to Common Shares beneficially owned or over which
control or direction is not within the knowledge of the Corporation and
has been furnished by the respective nominees individually. This
information includes all Common Shares issuable pursuant to the
exercise of options that are exercisable within 60 days of March 18,
2005. Does not include any Common Shares subject to options that are
not exercisable within 60 days of March 18, 2005 or subject to options
that vest only upon the occurrence of events, such as a rise in the
market price of the Common Shares, outside of the control of the
optionee.
(2) Includes 250,000 Common Shares subject to options granted to Mr.
Gotcher pursuant to the Corporation's 1998 Stock Option Plan (the "1998
Plan"). Includes 2,140 Common Shares owned by his wife and 500 Common
Shares owned by his adult stepson, with respect to which Mr. Gotcher
disclaims beneficial ownership.
(3) Includes 50,000 Common Shares subject to options granted to Mr.
Bengtson pursuant to the 1998 Plan.
(4) Includes 10,000 Common Shares subject to options granted to Mr. Golla
pursuant to the Corporation's 1996 Stock Option Plan (the "1996 Plan").
and 50,000 Common Shares subject to options granted to Mr. Golla
pursuant to the 1998 Plan.

(5) Includes 10,000 Common Shares subject to options granted to Mr. Hartman
pursuant to the 1996 Plan and 25,000 Common Shares subject to options
granted to Mr. Hartman pursuant to the 1998 Plan.
(6) Includes 50,000 Common Shares subject to options granted to Mr. King
pursuant to the 1996 Plan.
(7) Includes 50,000 Common Shares subject to options granted to Mr. Jones
pursuant to the 1996 Plan.

IF ANY OF THE NOMINEES IS FOR ANY REASON UNAVAILABLE TO SERVE AS A
DIRECTOR, PROXIES IN FAVOR OF MANAGEMENT WILL BE VOTED FOR ANOTHER NOMINEE IN
THEIR DISCRETION UNLESS THE SHAREHOLDER HAS SPECIFIED IN THE PROXY THAT HIS
SHARES ARE TO BE WITHHELD FROM VOTING IN THE ELECTION OF DIRECTORS.

Set forth below is a description of each of the directors, nominees and
executive officers of the Corporation, including their principal occupations for
the past five years:

Directors

Alan J. Gotcher, 55, was appointed as Chief Executive Officer and a
director of the Corporation in August 2004 and was also appointed as President
of the Corporation in March 2005. Prior to joining the Corporation, Dr. Gotcher
was chairman and chief executive officer of InDelible Technologies, Inc., a
development stage company that provides secure logistics through covert bar code
marking systems and invisible bar code reading technologies from January 2000 to
August 2004. From 2000 through 2003, Dr. Gotcher was co-managing partner of
IdeaSpring, LLC, a private investment company, and from 2000 through August
2004, Dr. Gotcher was president and chief executive officer of A Gotcher & Co.,
Inc., a consulting firm. Prior to founding InDelible, Dr. Gotcher spent fourteen
years with Avery Dennison, where he served as senior vice president,
manufacturing & technology, and chief technology officer. During his tenure, Dr.
Gotcher led Avery's teams that created and commercialized the Duracell On-Cell
tester battery label and pressure sensitive battery labels and the United States
Postal Service's self-stick stamp products. Prior to joining Avery Dennison, Dr.
Gotcher was laboratory director, U.S. Corporate Research and Development, with
Raychem Corporation where he lead the business development teams that created,
developed and commercialized the conductive polymer- based PolySwitch(R)
over-current protection device business.

Jon N. Bengtson, 61, has been a director of the Corporation since July
2003 and was appointed Chairman of the Board in June 2004. He currently serves
as the chairman of the board of The Sands Regent Hotel Casino and is chairman of
the board of Radica Games Limited. Mr. Bengtson began his career with Harrah's
Entertainment, Inc., where he served for nine years in various management
positions, including vice president of management information systems. He joined
International Game Technology in 1980 as vice president, chief financial officer
and director and was subsequently promoted to vice president of marketing in
1982. Mr. Bengtson joined The Sands Regent Hotel Casino in June 1984 and served
in various positions, including vice president of finance and administration,
chief financial officer, treasurer and director, senior vice president and
director, executive vice president, chief operating officer and director until
December 1993. In January 1994, he joined Radica Games Limited as vice president
and chief financial officer and was appointed president and chief executive
officer of Radica USA Ltd. in December 1994 and was appointed chairman of the
board in January 1996. Mr. Bengtson was a founder and chief financial officer of
ShareGate, Inc., a venture funded telecommunications equipment company from
March 1996 until October 2001. Mr. Bengtson is also the founder and chief
financial officer for Pinyon Technology, a start-up technology corporation
developing wireless antenna networking technology. He holds a bachelors degree
in business administration and a Master of Business Administration degree from
the University of Nevada, Reno.

James I. Golla, 72, has been a director of the Corporation since
February 1994. He also currently serves as a director of Assure Energy, Inc.,
Radiant Energy Corp. and Galantas Gold Corp. Mr. Golla was a journalist with the
Globe and Mail, Canada's national newspaper, from 1954 until his retirement in
1997.

George E. Hartman, 56, was elected a director of the Corporation in
March 1997. From 1995 until 1998, Mr. Hartman served as president of Planvest
Pacific Financial Corp., a Vancouver-based financial planning firm with U.S. $1
billion of assets under management. Mr. Hartman also served on the board of
directors of Planvest Capital Corp., the parent of Planvest Pacific. From 1998
until 2000, Mr. Hartman was senior vice president of Financial Concept Group
until the firm's sale to Assante Corporation, a North American financial
services industry consolidator. At that time, he became chief executive officer
of PlanPlus Inc., Canada's oldest firm specializing in the development and
distribution of wealth management software to the financial services industry.
Today, Mr. Hartman remains as a director and major shareholder of PlanPlus Inc.
Mr. Hartman also continues as President of Hartman & Corporation, Inc., a firm
he founded in 1991 which provides consulting services to the financial services
industry. Since April 2004, Mr. Hartman has worked as a consultant with The
Covenant Group, a management consulting firm. Mr. Hartman is the author of Risk
is a Four-Letter Word--The Asset Allocation Approach to Investing, a Canadian
best-seller published in 1992, and is the author of its sequel, Risk is STILL a
Four Letter Word, released in 2000.

David S. King, 55, has been a director of the Corporation since
February 2004. In October 2000, he founded and has since been the managing
partner of Advanced Technology Group LLC, which works with research and
development enterprises to accelerate their commercialization of innovative
technologies. Dr. King was employed by the National Institute of Standards and
Technology ("NIST") from 1976 through 2000. He began his career as a research
chemist in the Physics Laboratory of NIST where he developed a research program
aimed at a basic understanding of energy flow and chemical reactivity in high
energy density materials, in bimolecular collisions and small molecular clusters
and at metal interfaces. From 1994 to 1999 Dr. King was a program manager in the
Advanced Technology Program of NiST, where he recommended and implemented
long-range technology investment strategies; served as technical or business
evaluator for over 1,000 research and development proposals, formally evaluated
corporate technology development and commercialization strategies; and served as
program manager for approximately 25 innovative, industry-led research and
development projects in areas of chemistry, physics and biotechnology. From 1999
to 2000, he was science advisor, Physics Laboratory, and then science advisor in
the Office of the Under Secretary of Commerce for Technology. He then founded
the Advanced Technology Group LLC, a consulting firm, in October 2000, for which
he continues to work. Dr. King holds a Bachelor of Arts degree in Chemistry, a
Doctor of Philosophy degree in Chemical Physics and an Executive Masters of
Science and Engineering in the Management of Technology, all from the University
of Pennsylvania.

Christopher E. Jones, 58, was appointed a director of the Corporation
effective May 1, 2004. Since 1998, Mr. Jones has been the Vice President of
Manufacturing and Engineering at Behr Process Corporation, where he is
responsible for the construction and operations of all coating plant operations
for the largest DIY architectural coatings corporation in North America. Prior
to joining Behr, Mr. Jones was the president of Kronos Louisiana and the vice
president of manufacturing of Kronos International, Inc. Kronos is the fourth
largest producer of titanium dioxide in the world. Mr. Jones earned a Bachelors
of Arts degree in Chemistry from Oakland University and a Ph.D in
Organo-Metallic Chemistry from Michigan State University and completed
postdoctoral work at University of Leeds, England and University of Alberta in
Edmonton, Canada.

Michel Bazinet, 49, was appointed a director of the Corporation
effective July 9, 2004. Since January 2003, Dr. Bazinet has been chairman &
chief executive officer of privately held Replicor, Inc., which develops new
antiviral and anticancer therapies. Prior to his involvement with Replicor, Inc.
from 1996 to 2000, Dr. Bazinet was the founder and medical director of
Mediconsult, a healthcare knowledge company. Mediconsult completed its initial
public offering in 1999 and was ultimately acquired by The Cybear Group in 2000.
Dr. Bazinet, a board-certified urologist, received his MD from Sherbrooke
University. He completed his residency at McGill University, Montreal, and has
been a research fellow at Memorial Sloan-Kettering Cancer Center, New York. Dr.
Bazinet, a former assistant professor of both urology and oncology at McGill
University, is also an accomplished speaker, medical industry author and
consultant.

Executive Officers
------------------

The executive officers of the Corporation are Alan J. Gotcher, Edward
H. Dickinson, Douglas K. Ellsworth and Roy Graham. Certain information regarding
Dr. Gotcher is set forth above under "Election of Directors - Directors."
Certain information regarding Messrs. Dickinson, Ellsworth and Graham follows.

Edward H. Dickinson, 58, was appointed Chief Financial Officer of the
Corporation in March 2000, and was appointed Secretary in June 2001. Mr.
Dickinson had previously served as Director of Finance of the Corporation from
August 1996 through March 2000. From 1994 to 1996, Mr. Dickinson was employed by
the Southern California Edison Company as a negotiator of non-utility power
generation contracts. Mr. Dickinson was vice president and director of
Geolectric Power Company during 1993 and 1994, and from 1987 through 1992, he
was the director of finance and administration for OESI Power Corporation. Prior
to 1987, Mr. Dickinson held various accounting and program management positions
in the United States Department of Energy. Mr. Dickinson, who is a certified
public accountant, obtained a masters degree in Accounting from California State
University, Northridge in 1978.

Douglas K. Ellsworth, 51, was appointed President, Altair
Nanomaterials, Inc., the operating subsidiary through which the Corporation
conducts its nanotechnology business, in June 2003 and Senior Vice President of
the Corporation in March 2004. Mr. Ellsworth previously held various other
positions with Altair Nanomaterials, Inc. Prior to joining the Corporation, Mr.
Elsworth was the manager of technical support for BHP Inc.'s' Center for
Minerals Technology in Reno, Nevada from 1984 through 1999. Mr. Ellsworth began
work at BHP in 1984 as the chief chemist. Mr. Ellsworth worked as a chemist and
manager at Skyline Labs in Colorado and Alaska in 1975 to 1979 and as a chemist
for Utah International, Inc.'s Minerals Laboratory in Sunnyvale California from
1979-1984. Mr. Ellsworth received his bachelor of science degree in chemistry
and geology from the State University of New York College, Oneonta.

Roy Graham, 54, was appointed Senior Vice President of the Corporation
in January 2005. Mr. Graham was the president and chief executive officer of
modeMD, Inc., a developer of wireless application software and systems for the
healthcare industry, from May 2002 through December 2004. From January 2000
until April 2002, Mr. Graham served as managing partner of Incline Consulting,
L.L.C., a business consulting firm. He has also held senior vice president and
director-level sales and marketing roles with Wyse Technology, Tandem Computers,
and Digital Equipment Corporation. Mr. Graham received a bachelor of science
degree with honors from Sussex University in the United Kingdom.

Key Employees
-------------

Bruce J. Sabacky, 54, was appointed Vice President of Research and
Engineering for Altair Nanomaterials, Inc., the operating subsidiary through
which the Corporation conducts its nanotechnology business, in October 2003. Dr.

Sabacky joined Altair Nanomaterials, Inc. in January 2001 as Director of
Research and Engineering. Prior to that, he was the manager of process
development at BHP Minerals Inc.'s Center for Minerals Technology from 1996 to
2001, where he was instrumental in developing the nanostructured materials
technology. Dr. Sabacky was the technical superintendent for Minera Escondida
Ltda. from 1993 to 1996 and was a principal process engineer with BHP from 1991
to 1993. Prior to that, he held senior engineering positions in the minerals and
metallurgical industries. Dr. Sabacky obtained bachelor of science and master of
science degrees in Metallurgical Engineering from the South Dakota School of
Mines and Technology and a Ph.D in Materials Science & Mineral Engineering with
minors in Chemical Engineering and Mechanical Engineering from the University of
California, Berkeley.

Security Ownership of Certain Beneficial Owners and Management
--------------------------------------------------------------

Set forth below is information with respect to beneficial ownership of
Common Shares as of March 18, 2005 by the Corporation's Chief Executive Officer,
the Corporation's former Chief Executive Officer, by the three additional
persons serving as executive officers as of December 31, 2004 whose total
compensation for 2004 exceeded $100,000, and the most highly compensated
non-executive employee (collectively, the "named executive officers"), by each
of the directors of the Corporation, by persons known to the Corporation to
beneficially own more than 5% of the outstanding Common Shares, and by all
current officers and directors of the Corporation as a group. Unless otherwise
indicated, each of the shareholders named in the table has sole voting and
investment power with respect to the Common Shares identified as beneficially
owned. The Corporation is not aware of any arrangements, the operation of which
may at a subsequent date result in a change in control of the Corporation.

------------------ ----------------------------------------- ------------------------ ----------------
Amount and Nature of
Beneficial Ownership Percentage of
Title of Class Name and Address of Beneficial Owner (1) Class (2)
------------------ ----------------------------------------- ------------------------ ----------------

Common Alan J. Gotcher (Chief Executive 281,740(3) *
Officer and Director)
930 Tahoe Blvd., #802-216
Incline Village, Nevada 89451
------------------ ----------------------------------------- ------------------------ ----------------
Common Rudi E. Moerck (Former President and 500 *
Director)
900 So. Meadows Pkwy., #3611
Reno, Nevada 89521
------------------ ----------------------------------------- ------------------------ ----------------
Common Douglas K. Ellsworth (Senior Vice 112,533(4) *
President)
4310 Wild Eagle Terrace
Reno, Nevada 89511
------------------ ----------------------------------------- ------------------------ ----------------
Common Edward H. Dickinson (Chief Financial 397,700(5) *
Officer and Secretary)
659 Caughlin Glen
Reno, Nevada 89509
------------------ ----------------------------------------- ------------------------ ----------------
Common Bruce J. Sabacky (Employee) 5,000(6) *
8555 Council Lane
Reno, Nevada 89511
------------------ ----------------------------------------- ------------------------ ----------------

------------------ ----------------------------------------- ------------------------ ----------------

Common Jon N. Bengtson (Director) 50,000(7) *
2370 Solari Drive
Reno, Nevada 89509
------------------ ----------------------------------------- ------------------------ ----------------
Common James I. Golla (Director) 80,000(8) *
829 Terlin Boulevard
Mississauga, Ontario L5H 1T1
------------------ ----------------------------------------- ------------------------ ----------------
Common George Hartman (Director) 35,800(9) *
136 Colborne
Fenelon Falls, ON K0M 1N0
------------------ ----------------------------------------- ------------------------ ----------------
Common David S. King (Director) 60,000(10) *
123 Tenth St. SE
Washington, D.C. 20003
------------------ ----------------------------------------- ------------------------ ----------------
Common Christopher Jones (Director) 50,000(11) *
1140 Cuchara Drive
Del Mar, California 92014
------------------ ----------------------------------------- ------------------------ ----------------
Common Michel Bazinet (Director) 0 *
343 Brookfield Avenue
Mount-Royal, Quebec H3P 2A7
------------------ ----------------------------------------- ------------------------ ----------------
Common William P. Long (Chief Executive 722,700 1.2%
Officer and director until May 1, 2004)
57 Sunset Rim
Cody, Wyoming 82414
------------------ ----------------------------------------- ------------------------ ----------------
Common Louis Schnur (5% Shareholder) 5,249,851(12) 8.9%
6941 South Western Avenue
Chicago, ILL 60636
------------------ ----------------------------------------- ------------------------ ----------------
Common All Directors and Officers as a Group 1,073,773(13) 1.8%
(11 persons)
------------------ ----------------------------------------- ------------------------ ----------------

* Represents less than 1% of the outstanding Common Shares.

(1) Includes all Common Shares issuable pursuant to the exercise of options
and warrants that are exercisable within 60 days of March 18, 2005.
Does not include any Common Shares subject to options that are not
exercisable within 60 days of March 18, 2005 or subject to options that
vest only upon the occurrence of events, such as a rise in the market
price of the Common Shares, outside of the control of the optionee.
(2) Based on 58,785,289 Common Shares outstanding as of March 18, 2005.
Common Shares underlying options, warrants or other convertible or
exercisable securities are, to the extent exercisable within 60 days of
March 18, 2005, deemed to be outstanding for purposes of calculating
the percentage ownership of the owner of such convertible securities,
but not for purposes of calculating any other person's percentage
ownership.
(3) Includes 250,000 Common Shares subject to options granted to Mr.
Gotcher pursuant to the 1998 Plan. Includes 2,140 Common Shares owned
by his wife and 500 Common Shares owned by his adult stepson, with
respect to which Mr. Gotcher disclaims beneficial ownership.
(4) Includes 107,200 Common Shares subject to options granted to Mr.
Ellsworth pursuant to the 1998 Plan.

(5) Includes 150,000 Common Shares subject to options granted to Mr.
Dickinson pursuant to the 1996 Plan and 241,200 Common Shares subject
to options granted to Mr. Dickinson pursuant to the 1998 Plan.
(6) Includes 5,000 Common Shares subject to options granted to Mr. Sabacky
pursuant to the 1998 Plan.
(7) Includes 50,000 Common Shares subject to options granted to Mr.
Bengtson pursuant to the 1998 Plan.
(8) Includes 10,000 Common Shares subject to options granted to Mr. Golla
pursuant to the 1996 Plan and 50,000 Common Shares subject to options
granted to Mr. Golla pursuant to the 1998 Plan.
(9) Includes 35,000 Common Shares subject to options granted to Mr. Hartman
pursuant to the 1998 Plan.
(10) Includes 50,000 Common Shares subject to options granted to Mr. King
pursuant to the 1996 Plan.
(11) Includes 50,000 Common Shares subject to options granted to Mr. Jones
pursuant to the 1996 Plan.
(12) Based solely on Schedule 13D dated April 7, 2004 filed by Mr. Schnur.
Such Schedule 13D indicates that 3,116,022 of such shares are subject
to presently exercisable warrants to purchase Common Shares. All such
warrants have been exercised. The Corporation believes that Mr. Schnur
has sold substantially all of his holdings of Common Shares but has
been unable to verify such belief. The Corporation has asked Mr. Schnur
to update his Schedule 13D but, to date, he has not.
(13) Includes 260,000 Common Shares subject to options granted to officers
and directors pursuant to the 1996 Plan and 738,400 Common Shares
subject to options granted to officers and directors pursuant to the
1998 Plan.

Executive Compensation
----------------------

(a) Compensation of Officers

The following table, presented in accordance with Regulation 14A
promulgated under the United States Securities Exchange Act of 1934, as amended
(the "Exchange Act"), sets forth all compensation for services rendered in all
capacities to the Corporation and its subsidiaries for the fiscal years ended
December 31, 2004, December 31, 2003 and December 31, 2002 in respect of the
named executive officers.

======================================================================================================================
Summary Compensation Table

------------------- -------- ------------------------------------- ---------------------------------- ----------------
Name and Title Fiscal Annual Compensation Long Term Compensation
Year
Ended
Dec.
31,
------------------- -------- ------------------------------------- ---------------------------------- ----------------
Restricted Securities
Shares or Securities
Restricted Under
Other Annual Share Options LTIP All Other
Salary Bonus Compensation Units Granted Payouts Compensation
(U.S.$) (U.S. $) (U.S.$) (#) (#) (U.S.$) (U.S. $)
------------------- -------- --------- ---------- ---------------- ----------- ------------ --------- ----------------

Alan J. Gotcher, 2004 100,481 Nil Nil Nil 350,000 Nil Nil
Chief Executive -------- --------- ---------- ---------------- ----------- ------------ --------- ----------------
Officer and 2003 Nil Nil Nil Nil Nil Nil Nil
Director -------- --------- ---------- ---------------- ----------- ------------ --------- ----------------
2002 Nil Nil Nil Nil Nil Nil Nil
======================================================================================================================
Rudi E Moerck, 2004 146,538 Nil Nil Nil Nil Nil Nil
Former President -------- --------- ---------- ---------------- ----------- ------------ --------- ----------------
and Director 2003 110,000 50,000 Nil Nil 50,000 Nil Nil
------------------- -------- --------- ---------- ---------------- ----------- ------------ --------- ----------------
2002 84,500 Nil Nil Nil 300,000 Nil Nil
======================================================================================================================
Douglas K. 2004 122,343 18,750 Nil Nil Nil Nil Nil
Ellsworth, Sr. -------- --------- ---------- ---------------- ----------- ------------ --------- ----------------
Vice President 2003 105,774 40,000 Nil Nil 110,000 Nil Nil
------------------- -------- --------- ---------- ---------------- ----------- ------------ --------- ----------------
2002 92,653 Nil Nil Nil 10,000 Nil Nil
======================================================================================================================
Edward H. 2004 112,500 17,250 Nil Nil Nil Nil Nil
Dickinson, Chief -------- --------- ---------- ---------------- ----------- ------------ --------- ----------------
Financial Officer 2003 85,000 25,000 Nil Nil 110,000 Nil Nil
------------------- -------- --------- ---------- ---------------- ----------- ------------ --------- ----------------
2002 85,000 Nil Nil Nil Nil Nil Nil
======================================================================================================================
Bruce J. Sabacky, 2004 113,481 12,938 Nil Nil Nil Nil Nil
Vice President of -------- --------- ---------- ---------------- ----------- ------------ --------- ----------------
Altair 2003 99,463 13,215 Nil Nil 110000 Nil Nil
Nanomaterials, -------- --------- ---------- ---------------- ----------- ------------ --------- ----------------
Inc. 2002 98,502 Nil Nil Nil 10000 Nil Nil
======================================================================================================================
William P. Long 2004 167,369 50,880 Nil Nil Nil Nil 29,000 (2)
(Chief Executive -------- --------- ---------- ---------------- ----------- ------------ --------- ----------------
Officer Until May 2003 109,440 60,000 Nil Nil 110,000 Nil Nil
1, 2004) -------- --------- ---------- ---------------- ----------- ------------ --------- ----------------
2002 100,320 9,120 Nil Nil 100,000 Nil 117,694 (3)
======================================================================================================================

(1) Represents bonus earned during indicated fiscal year.
(2) Represents value of company automobile given to employee.
(3) This amount includes $116,000 representing the value, as of the issue
date, of 200,000 Common Shares issued to Dr. Long in December 2002 in
connection with the termination of certain terms of his employment
agreement. It also includes $1,694 representing the value of personal
use of a company-owned automobile.

(b) Option Grants in 2004

The following table provides details with respect to stock options, if
any, granted to the named executive officers during the year ended December 31,
2004:

-------------------- ------------ ---------- ------------- ---------- -------------- ------------- ------------------------
Market Value
% of Total of Potential Realizable
Options Securities Value at Assumed Rates
Granted to Exercise Underlying of Share Price
Securities Employees Price Options on Appreciation for
Under in per the Date of Option Term
options Grant Financial Share Grant Expiration (US$)
Name Granted Date Year (US$) (US$) Date 5% 10%
-------------------- ------------ ---------- ------------- ---------- -------------- ------------- ------------------------

Alan J. Gotcher 50,000 05/18/04 3.0% 2.09 2.08 8/31/05 28,233 62,993
(Chief Executive
Officer and
Director)(1)
-------------------- ------------ ---------- ------------- ---------- -------------- ------------- ---------- -------------
Alan J. Gotcher 300,000 08/16/04 18.0% 1.02 1.02 8/16/14 84,542 186,816
(Chief Executive
Officer and
Director)
-------------------- ------------ ---------- ------------- ---------- -------------- ------------- ---------- -------------

(1) Mr. Gotcher was serving as an independent consultant, and not as an
officer or director, when the option was granted.

The following table provides information regarding options held by the
named executive officers as at December 31, 2004 and options exercised by them
during the year ended December 31, 2004:

------------------------------ ----------- ------------ ----------------------------- ------------------------------
Securities
Acquired Aggregate Number of Securities Value of Unexercised
on Value Underlying Unexercised In-the-Money Options at
Exercise Realized Options at December 31, 2004 December 31, 2004
----------- ------------ ----------------------------- ------------------------------
Exercisable Unexercisable Exercisable Unexercisable
Name (#) ($) (#) (#) ($) ($)
------------------------------ ----------- ------------ ------------- --------------- ------------- ----------------

Alan J. Gotcher, Chief Nil Nil 150,000 200,000 200,000 338,000
Executive Officer and
Director
------------------------------ ----------- ------------ ------------- --------------- ------------- ----------------
Rudi E. Moerck, Former Nil Nil 300,000 50,000 478,000 85,500
President and Director
------------------------------ ----------- ------------ ------------- --------------- ------------- ----------------
Douglas K. Ellsworth, Sr. Nil Nil 125,000 Nil 202,550 N/A
Vice President
------------------------------ ----------- ------------ ------------- --------------- ------------- ----------------

Edward H. Dickinson, Chief Nil Nil 384,700 Nil 253,850 N/A
Financial Officer
------------------------------ ----------- ------------ ------------- --------------- ------------- ----------------
Bruce J. Sabacky, Vice 25,000 62,500 30,000 Nil 48,700 N/A
President of Altair
Nanomaterials, Inc.
------------------------------ ----------- ------------ ------------- --------------- ------------- ----------------

(d) Compensation of Directors

The Corporation pays all directors who are not employees of the
Corporation a fee of $3,000 per quarter. In addition, directors who are not
employees and provide service in the following positions receive the following
additional fees:

Position Additional Compensation
------------------ -----------------------
Chairman of the Board $3,000 per quarter
Executive Committee Member $2,000 per quarter
Audit or Compensation Committee Chair $1,000 per quarter
Audit or Compensation Committee Member $1,000 per quarter
Other Committee Chair or Member Determined upon formation
of committee

In addition, directors are entitled to receive compensation to the
extent that they provide services to the Corporation at rates that would be
charged by such directors for such services to arm's length parties. No amounts
were paid Dr. Gotcher and Dr. Moerck in 2004 in their capacities as directors.

Directors of the Corporation and its subsidiaries are also entitled to
participate in the 1996 Plan and the 1998 Plan. During 2004, the Corporation
granted options to purchase 75,000 Common Shares to Mr. King and options to
purchase 75,000 Common Shares to Mr. Jones under the 1996 Plan. During 2004, the
Corporation granted options to purchase 75,000 Common Shares to Mr. Hartman,
options to purchase 75,000 Common Shares to Mr. Golla and options to purchase
75,000 Common Shares to Mr. Bazinet under the 1998 Plan. Options granted to Mr.
Gotcher are described under "Option Grants in 2004" above.

(e) Employment Contracts

The Corporation has entered into employment agreements with Alan J.
Gotcher, Douglas K. Ellsworth, Edward H. Dickinson and Bruce J. Sabacky.

Dr. Gotcher's employment agreement commenced on August 16, 2004 with an
initial term of two years with an option for the Corporation to extend for one
additional year. His annual salary is $275,000 per year, and he is eligible to
receive an annual bonus equal to up to one-half of his base salary upon
achievement of performance measures mutually agreed to by Dr. Gotcher and the
Board. In connection with his employment agreement, Dr. Gotcher was granted
300,000 options to purchase the Common Shares as reflected above in "Option

Grants in 2004." If Dr. Gotcher's employment is terminated by the Corporation
without cause, he is entitled to receive his regular salary for a period of nine
months from the date of termination. His employment agreement also contains a
covenant not to compete for 12 months following termination of employment.

Mr. Ellsworth's employment agreement commenced on November 10, 2004
with a term of 18 months. His annual salary is $125,000. If Mr. Ellsworth's
employment is terminated by the Corporation without cause, he is entitled to
receive his regular salary for a period of nine months from the date of
termination. His employment agreement also contains a covenant not to compete
clause for 12 months following termination of employment.

Mr. Dickinson's employment agreement commenced on November 10, 2004
with a term of 18 months. His annual salary is $115,000. If Mr. Dickinson's
employment is terminated by the Corporation without cause, he is entitled to
receive his regular salary for a period of nine months from the date of
termination. His employment agreement also contains a covenant not to compete
clause for 12 months following termination of employment.

Dr. Sabacky's employment agreement commenced on November 10, 2004 with
a term of 18 months. His annual salary is $110,000. If Dr. Sabacky's employment
is terminated by the Corporation without cause, he is entitled to receive his
regular salary for a period of nine months from the date of termination. His
employment agreement also contains a covenant not to compete clause for 12
months following termination of employment.

(f) Compensation Committee Interlocks and Insider Participation

The Corporation established a Compensation Committee on November 10,
2003 to administer its executive compensation program. In April 2004, the Board
replaced the Compensation Committee with a Compensation, Corporate Governance
and Nominations Committee (the "Compensation and Nominating Committee") of the
Board. The Compensation and Nominating Committee consists of George Hartman
(Chair), James Golla and David King, each of whom is independent under Nasdaq's
listing standards applicable to such committee. None of Messrs. Hartman, Golla
or King is currently or has formerly been an officer or employee of the
Corporation or its subsidiaries. On December 1, 2003, the Corporation entered
into consulting agreement with a corporation whose managing partner is Mr. King.
See "Interest of Informed Persons in Material Transactions." If elected by the
shareholders, Messrs. Hartman, Golla and King are expected to be members of the
Committee during 2005.

In addition to evaluating and approving employment contracts for key
employees throughout the year, the Board, the Compensation Committee (prior to
April 2004) and the Compensation and Nominating Committee formally considered
compensation issues 12 times during the 2004 fiscal year in connection with the
authorization of grants of options to purchase Common Shares.

(g) Compensation Committee Report on Executive Compensation

Notwithstanding anything to the contrary set forth in any of the
Corporation's previous filings under the United States Securities Act of 1933,
as amended (the "Securities Act"), or the Exchange Act, that incorporates by
reference, in whole or in part, subsequent filings including, without
limitation, this Information Circular and Proxy Statement, the Compensation
Committee Report and the Performance Graph set forth below shall not be deemed
to be incorporated by reference into any such filings.

As required by the proxy rules promulgated by the United States
Securities and Exchange Commission (the "SEC") and applicable Canadian
securities laws, this Compensation Committee Report describes the overall
compensation goals and policies applicable to the executive officers of the
Corporation, including the basis for determining the compensation of executive
officers for the 2004 fiscal year.
14

In determining the amount and composition of compensation for the
Corporation's executive officers, the Board is guided by several factors.
Because the Corporation has a small number of employees, compensation practices
are flexible in response to the needs and talents of the individual officer,
entrepreneurial, and geared toward rewarding contributions that enhance
shareholder value. In prior years, because the Corporation had no substantial
revenues from operations and needed capital for research and development, the
Corporation kept salaries and bonuses at levels that the Corporation believed
were lower than many of the Corporation's competitors and compensated employees
(including executive officers) primarily in the form of stock options. Going
forward, the Corporation intends to use a combination of more competitive
salaries, cash bonuses and stock options to align the interest of the executive
officers and other employees with the long-term interests of the Corporation and
its shareholders and to attract and retain talented employees who can enhance
the Corporation's value.

Compensation Components
-----------------------

Annual Base Salary. The Corporation's compensation of its executive
officers consists of three components: base salary, bonuses, and long-term
incentive awards in the form of stock options. The Board establishes base
salaries based primarily on its subjective judgment, taking into consideration
both qualitative and quantitative factors. Among the factors considered by the
Board are: (i) the qualifications and performance of each executive officer;
(ii) the performance of the Corporation as measured by such factors as progress
in product development and increased shareholder value; (iii) salaries provided
by other companies inside and outside the industry that are of a comparable size
and at a similar development stage, to the extent known; and (iv) the capital
position and needs of the Corporation. The Board does not assign any specific
weights to these factors in determining salaries. It does, however, try to keep
base salaries as low as possible, consistent with the needs and status of the
executive officers, in order to preserve capital for future growth and
development.

Incentive Bonuses. The Corporation may also compensate its executive
officers in the form of bonuses. In addition, the Corporation may pay bonuses to
other key employees in the future as a reward for significant and specific
achievements that have a significant impact on shareholder value. Because the
Corporation does not have a history of earnings per share, net income, or other
conventional data to use as a benchmark for determining the amount or existence
of bonus awards, the Board generally makes such determinations based on its
subjective evaluation of each individual's contribution to the Corporation. In
some cases, however, bonuses payable to individuals may be tied to specific
criteria identified at the time of engagement. In any event, the Compensation
Committee reserves the right to increase or decrease incentive bonuses, based on
its assessment of individual and team performance and the circumstances
surrounding that performance.

In the 2004 fiscal year, the executive management team, except the CEO,
were eligible for a "performance bonus" ranging from 40%-60% of base salary,
depending on level of individual responsibility. The bonus was to be paid 60% in
cash and 40% in the equivalent value of stock options. Payment of any bonus was
based on the attainment of separate, specified corporate and individual
objectives. Corporate/team objectives were set in 3 areas; revenue, product
licensing or commercialization and cost control. Full attainment of all three
objectives would have resulted in each member receiving one-half of their full
bonus entitlement. Achieving less than all three objectives resulted in a
reduction of the bonus level. No team bonus was awarded if at least 70% of the
team's objectives were not met. In fiscal 2004, the management team achieved 83%
of its team objectives and bonuses were awarded accordingly. Similarly, each
executive was evaluated against specific personal objectives and was eligible to
receive one-half of their bonus entitlement for full attainment of their

individual objectives. Achieving less than all three objectives resulted in a
reduction of the bonus level. No individual bonus was awarded if at least 70% of
the executive's personal objectives were not met. In fiscal 2004, individual
executives achieved 65%-95% of their personal objectives and bonuses were
awarded accordingly.

Stock Options. As stated, in the past, the Corporation has relied
extensively on stock options to compensate executive officers and other key
employees. The 1996 Plan and the 1998 Plan are designed to give each option
holder an interest in preserving and maximizing shareholder value in the longer
term, to reward option holders for past performance and to give option holders
the incentive to remain with the Corporation long term. Individual grants are
determined on the basis of the Board's assessment of an individual's current and
expected future performance, level of responsibilities, and the importance of
his or her position with, and contribution to, the Corporation. In the 2004
fiscal year, the Board granted options to purchase 300,000 Common Shares to Dr.
Gotcher in connection with his employment agreement. In addition, as part of its
evaluation and bonus process, the Board granted options to purchase 26,500
Common Shares to Edward Dickinson, options to purchase 27,200 Common Shares to
Douglas Ellsworth, options to purchase 25,000 Common Shares to Bruce Sabacky and
options to purchase 100,000 Common Shares to Dr. Gotcher. The Board did consider
the number, vesting status and exercise price of existing options in the course
of determining whether to grant additional options.

CEO Compensation. In the fiscal year 2004, the CEO received a base
salary according to the terms of his employment agreement. In addition, the CEO
was awarded a "performance bonus" of $95,000 in cash and was awarded options to
purchase Common Shares, which awards have a collective value equal to 69% of his
base salary. The bonus and options were awarded following an aggregated
assessment of CEO performance by each independent Director, based on both
quantitative and qualitative criteria. Quantitatively, CEO performance
objectives were set in 3 areas; revenue, product licensing or commercialization
and cost control. In fiscal 2004, the CEO achieved 83% of his personal
quantitative objectives. Qualitatively, the CEO's performance was measured
against sixteen criteria including: enhancing shareholder value, developing
corporate guiding principles, strategic planning, operating policies and
procedures, effective organizational structure, management succession planning,
employee morale and productivity, proactive change management, progress
evaluation, communication with the Board, operational control, leading by
exemplary example, enabling team performance, facilitating Board duties, being
an effective company spokesperson and meeting corporate financial and
operational objectives. In fiscal 2004, the CEO achieved 100% of his personal
qualitative objectives.

The foregoing is submitted by the Compensation and Nominating
Committee:

George Hartman, Chair
James Golla
David King

(h) Performance Graph

The following chart compares the total cumulative shareholder return
over the five-year period ended December 31, 2004 for U.S. $100 invested in the
Common Shares with the total return of all shares traded on the NASDAQ National
Market and NASDAQ SmallCap Market (the "NASDAQ Index") and the total return of
shares included in the Standard & Poor's Specialty Chemicals Index (the "S&P
Specialty Chemicals Index"). All data assumes reinvestment of dividends and
other distributions.

12/31/99 12/31/00 12/31/01 12/31/02 12/31/03 12/31/04
-------- -------- -------- -------- -------- --------

Altair Nanotechnologies Inc. 100 38 35 13 66 68
Nasdaq Index 100 60 48 33 49 54
S&P Specialty Chemicals Index 100 87 81 47 55 63

Audit Committee and Audit Committee Report
------------------------------------------

Audit Committee

The Audit Committee operates pursuant to a written charter adopted by
the Board. In April 2004, the Board amended and restated the charter of the
Audit Committee ("Audit Committee"), a copy of which may be found on the
Corporation's website, http://www.altairnano.com under the heading "Investor
Relations." A copy may also be obtained free of charge by mailing a request in
writing to: Secretary, Altair Nanotechnologies Inc. 204 Edison Way, Reno, Nevada
89502.

The Audit Committee is comprised solely of non-employee directors, each
of whom has been determined by the Board to be independent under the
requirements of the NASDAQ listing standards. The Audit Committee was comprised
of Jon Bengtson, George Hartman and James Golla during the period January 2004
through April 2004 and was comprised of Jon Bengtson, George Hartman and
Christopher Jones during the period May 2004 through December 2004. If elected
by the shareholders, Jon Bengtson, George Hartman and Christopher Jones are
expected to be members of the Audit Committee during 2005. The Audit Committee
met four times via conference call during the fiscal year ended December 31,
2004.

The Board has determined in its business judgment that each member of
the Audit Committee satisfies the requirements with respect to financial
literacy set forth in NASD Rule 4350(d)(2)(A)(iv) and applicable Canadian
securities laws; and the Board has determined than Jon Bengtson, the Chair of
the Audit Committee, is an "audit committee financial expert" as such term is
defined in Item 401(h) of Regulation S-K promulgated by the SEC, is independent
under Item 7(d)(3)(iv) of Schedule 14A under the Exchange Act and is, as a
result of his past employment experience in finance or accounting, requisite
professional certification in accounting or other comparable experience or
background, sophisticated with respect to financial matters.

The Audit Committee's responsibility is to assist the Board in its
oversight of the (a) quality and integrity of the Corporation's financial
reports, (b) the independence and qualifications of the Corporation's
independent auditor and (c) the compliance by the Corporation with legal and
regulatory requirements. Management of the Corporation has the responsibility
for the Corporation's financial statements as well as the Corporation's
financial reporting process, principles and internal controls. The Corporation's
independent auditors are responsible for performing an audit of the
Corporation's financial statements and expressing an opinion as to the
conformity of such financial statements with generally accepted accounting
principles.

Audit Committee Report

This section is not "soliciting material," is not deemed "filed" with
the SEC, and is not to be incorporated by reference in any filing of the
Corporation under the Securities Act or the Securities Exchange Act of 1934,
each as amended, regardless of date or any other general incorporation language
in such filing.
17

In this context, the Audit Committee has reviewed and discussed the
audited financial statements of the Corporation as of and for the year ended
December 31, 2004 with management and the independent auditors. The Audit
Committee has discussed with the independent auditors the matters required to be
discussed by Statement on auditing Standards No. 61 (Communication with Audit
Committees), as currently in effect. In addition, the Audit Committee has
received the written disclosures and the letter from the independent auditors
required by Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees), as currently in effect, and it has discussed
with the independent auditors their independence from the Corporation.

The Audit Committee has also considered whether the independent
auditor's provision of non-audit services to the Corporation is compatible with
maintaining the auditors' independence.

The members of the Audit Committee are not engaged in the accounting or
auditing profession and, consequently, are not experts in matters involving
auditing or accounting including in respect of auditor independence. As such, it
is not the duty of the Audit Committee to plan or conduct audits or to determine
that the Corporation's financial statements fairly present the Corporation's
financial position and results of operation and are in accordance with generally
accepted accounting principles and applicable laws and regulations. Each member
of the Audit Committee is entitled to rely on (i) the integrity of those persons
within the Corporation and of the professionals and experts (such as the
independent auditor) from which the Audit Committee receives information, (ii)
the accuracy of the financial and other information provided to the Audit
Committee by such persons, professionals or experts absent actual knowledge to
the contrary and (iii) representations made by management or the independent
auditors as to any information technology services of the type described in Rule
2-01(c)(4)(ii) of Regulation S-X and other non audit services provided by the
independent auditor to the Corporation.

Based on the reports and discussions described above, the Audit
Committee recommended to the Board that the audited financial statements be
included in the Corporation's Annual Report on form 10-K for the year ended
December 31, 2004, for filing with the SEC.

AUDIT COMMITTEE

Jon Bengtson
George Hartman
Christopher Jones

April 11, 2005

Meetings of Directors and Attendance at Shareholders Meetings
-------------------------------------------------------------

During the fiscal year ended December 31, 2004, the Board held three
meetings in person and five meetings via conference call. All directors attended
the in-person meeting and all directors participated in all conference calls
with the exception of Mr. Hartman, who was absent for one conference call. In
addition, the Board considered and acted on various matters throughout the year
by executing eight consent resolutions.

The Corporation does not have a policy with respect to the attendance
of shareholder meetings by directors. All members of the Board attended the June
2004 shareholders meeting.

Nominating Committee
--------------------

The purpose of the Compensation and Nominating Committee is (i) to
discharge the Board's responsibilities relating to compensation of the
Corporation's executives and, if needed, to produce an annual report on
executive compensation for inclusion in the Corporation's proxy statement, in
accordance with the rules and regulations of the SEC and (ii) to recommend to
the Board the slate of director nominees for election to the Corporation's Board
of Directors, individuals to fill vacancies occurring between annual meetings of
stockholders, and individuals for nomination as members of the standing
committees of the Board and (iii) to develop and recommend to the Board a set of
corporate governance principles applicable to the Corporation.

In identifying nominees for directors, the Compensation and Nominating
Committee takes into consideration such factors as it deems appropriate. These
factors may include judgment, skill, diversity, experience with businesses and
other organizations of comparable size, relationship of work experience and
education to the current and proposed lines of business of the Corporation, the
interplay of the candidate's experience with the experience of other Board
members, and the extent to which the candidate would be a desirable addition to
the Board and any committees of the Board and the extent to which the candidate
satisfies any objective requirements (such as residence, independence or
expertise requirements) applicable to the Board or any committees of the Board.
The Compensation and Nominating Committee considers candidates submitted by
shareholders in accordance with the policies set forth in the most recent proxy
statement delivered to shareholders and may, but is not be required to, consider
candidates proposed by management.

The Corporate Governance and Nominating Committee met 13 times during
2004 in person or by telephone. The members of the Compensation and Nominating
Committee are George Hartman (Chair), James Golla and David King, each of whom
is independent under Nasdaq's listing standards. The charter governing
operations of the Compensation and Nominating Committee was adopted in April
2004 and is available at the Corporation's website at www.altairnano.com under
"Investor Relations."

Shareholder Suggestions for Nominees and Communications with the Board of
Directors

The Board will consider director candidates recommended by
shareholders. Such recommendations should include the name, age, address,
telephone number, principal occupation or employment, background and
qualifications of the nominee and the name, address, telephone number and number
of Common Shares owned of the shareholder making the recommendation and should
be sent to the Secretary of the Corporation at the address first set forth
above. Candidates submitted by shareholders in accordance with the policies set
forth in the most recent proxy statement delivered to shareholders are
considered under the same standards as nominees recommended by other persons.

Shareholders may send communications to the Board or to specified
individual directors by mailing such communications to the Secretary of the
Corporation at the address of the Corporation first set forth above and
indicating that such communications are for the Board or specified individual
directors, as appropriate. All communications received by mail are forwarded to
the directors to which they are addressed unless the communications contain
information substantially similar to that forwarded by the same shareholder, or
an associated shareholder, within the past 90 days.

Section 16(a) Beneficial Ownership Reporting Compliance
-------------------------------------------------------

Section 16(a) of the Exchange Act requires the Corporation's officers
and directors to file reports concerning their ownership of Common Shares with

the SEC and to furnish the Corporation with copies of such reports. Based solely
upon the Corporation's review of the reports required by Section 16 and
amendments thereto furnished to the Corporation, the Corporation believes that
all reports required to be filed pursuant to Section 16(a) of the Exchange Act
during 2004, were filed with the SEC on a timely basis except as follows: (a) a
Form 3 for Christopher Jones, a Director, was due on May 11, 2004 but was filed
on May 12, 2004; (b) a Form 3 for Douglas Tullio, a Vice President, was due on
January 19, 2004, but was filed on January 20, 2004; (c) a Form 3 for David
King, a Director, was due on February 26, 2004 but was filed on March 29, 2004;
(d) a Form 4 for James Golla, a Director, was due on July 11, 2004 but was filed
on July 16, 2004; (e) a Form 4 for George Hartman, a Director, was due on July
11, 2004 but was filed on July 16, 2004; (f) a Form 4 for Alan Gotcher, Chief
Executive Officer, was due on August 18, 2004 but was filed on August 19, 2004;
(g) a Form 4 for Edward Dickinson, Chief Financial Officer, was due on September
9, 2004 but was filed on September 14, 2004; and (h) a Form 4 for Edward
Dickinson, Chief Financial Officer, was due on September 5, 2004 but was filed
on September 14, 2004.

Code of Ethics and Code of Conduct
----------------------------------

The Corporation has adopted the Code of Ethics for Senior Executive,
Financial Officers and Members of the Management Executive Committee (the "Code
of Ethics"), which constitutes a code of ethics that applies to the principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions, as defined in Item 406 of
Regulation S-K under the Exchange Act. The Code of Ethics is available on the
Corporation's website at www.altairnano.com under "Investor Relations."

The Corporation has adopted the Altair Nanotechnologies Inc. Code of
Conduct (the "Code of Conduct"), which constitutes a code of conduct applicable
to all officers, directors and employees that complies with Nasdaq Rule 4350(n).
The Code of Conduct is available on the Corporation's website at
www.altairnano.com under "Investor Relations."

Indebtedness of Directors and Executive Officers
------------------------------------------------

There is currently no outstanding indebtedness of (i) any present or
former director, executive officer or employee; or (ii) any associate of any
current or former director, executive officer or employee, either owing to the
Corporation or any of its subsidiaries, or owing to another entity which is the
subject of a guarantee, support agreement, letter of credit or similar
arrangement or understanding provided by the Corporation or any of its
subsidiaries.

Certain Relationships and Related Transactions
----------------------------------------------

On December 31, 2003, the Corporation entered into a consulting
agreement with Advanced Technology Group LLC ("ATG"), whose managing partner is
David King, a director of the Corporation. The agreement stipulates that ATG
will furnish consulting services in reviewing potential federal grant
opportunities and providing proposal development assistance on selected programs
for a period of one year. Under the terms of the agreement, ATG is paid on a
contingency basis at a rate of 6% of the first $1,000,000 in grant monies
secured from applications prepared in any calendar year plus 3.5% of any
cumulative amounts over $1,000,000. ATG also agreed to provide consulting
services at a rate of $200 per hour upon request of the Corporation. In October
2004, the Corporation paid ATG $6,000 in fees in connection with securing a
$100,000 grant from the National Science Foundation for development of

nano-structured electrodes for use in lithium ion ultra-capacitors. Also, in
October 2004, the Corporation paid ATG $4,500 in fees for consulting work in
connection with product marketing. The address of ATG is set forth as the
address of David King under "Security Ownership of Certain Beneficial Owners and
Management" above.

On or about June 5, 2004, the Corporation entered into a settlement
agreement with Toyota on Western, Inc. and its owner, Louis Schnur, who were
significant shareholders of the Corporation. Pursuant to the settlement
agreement, the Corporation agreed to transfer to Mr. Schnur 100,000 Common
Shares, amend certain early termination provisions of a warrant, register the
re-sale of certain Common Shares and release Mr. Schnur from all claims. In
exchange, Mr. Schnur and Toyota on Western agreed to release the Corporation
from all claims and to cease certain solicitation and communication activities
for a period of one year. The address of Mr. Schnur is set forth above under
"Security Ownership of Certain Beneficial Owners and Management."

Effective May 1, 2004, the Corporation entered into a separation
agreement with William P. Long, wherein Dr. Long resigned as Chief Executive
Officer of the Corporation and resigned all his other positions with the
Corporation and its subsidiaries except for his position as President of Mineral
Recovery Systems, Inc., a subsidiary of the Corporation. Dr. Long's employment
in that capacity continued until December 31, 2004 at an annualized rate of
$175,000, which was his salary in effect prior to entering the separation
agreement. Dr. Long was also granted an extension, until 2007, of the expiration
date of 200,000 options that would have otherwise expired in 2004 and 2005. In
addition to an agreement to provide consulting services to the Corporation, the
separation agreement included a 12-month non-competition, non-solicitation and
non-disparagement covenant as well as a release of claims. The address of Mr.
Long is set forth above under "Security Ownership of Certain Beneficial Owners
and Management."

On March 10, 2005, the Corporation granted 26,500 options to purchase
Common Shares to Edward Dickinson, 27,200 options to purchase Common Shares to
Douglas Ellsworth and 25,000 options to purchase Common Shares to Bruce Sabacky.
On April 8, 2005, the Corporation granted 100,000 options to purchase Common
Shares to Alan Gotcher. The address of each of the foregoing is set forth above
under "Security Ownership of Certain Beneficial Owners and Management."

The Corporation has entered into employment agreements with Alan J.
Gotcher, Douglas K. Ellsworth, Edward H. Dickinson and Bruce J. Sabacky, each of
which is described under "Employment Contracts" above. The address of each of
the foregoing is set forth above under "Security Ownership of Certain Beneficial
Owners and Management."

Vote Required
-------------

In connection with the election of directors, the seven nominees
receiving the highest number of votes will be elected.

PROPOSAL NO. 2 -- RATIFICATION OF APPOINTMENT OF
INDEPENDENT PUBLIC ACCOUNTANTS

Ratification of the appointment by the Board of Deloitte & Touche LLP
as the independent public accountants for the Corporation for the fiscal year
ending December 31, 2005, and authorization of the Board to set their
remuneration, is to be voted upon at the Meeting. Representatives of Deloitte &
Touche LLP are not expected to be present at the Meeting. Deloitte & Touche LLP
were first appointed auditors of the Corporation on June 22, 2001, prior to
which McGovern, Hurley Cunningham acted as auditors of the Corporation from 1992
to June 22, 2001.

Audit Fees. During the fiscal years ended December 31, 2003 and 2004, the
aggregate fees billed by Deloitte & Touche LLP for the audit of the
Corporation's financial statements for such fiscal years, for the reviews of the
Corporation's interim financial statements and for the review of SEC
registration statements were $93,533 and $103,047, respectively.

Audit-Related Fees. During the fiscal years ended December 31, 2003 and 2004,
Deloitte & Touche LLP did not bill the Corporation for assurance and related
services related to the performance of the audit or review beyond the fees
disclosed under "Audit Fees" above.

Tax Fees. During the fiscal years ended December 31, 2003 and 2004, the
Corporation did not pay to Deloitte & Touche LLP any fees for tax compliance,
advice and planning.

All Other Fees. During the fiscal year ended December 31, 2003, the Corporation
did not pay Deloitte & Touche LLP any other fees not reported above. During the
fiscal year ended December 31, 2004, the Corporation paid Deloitte & Touche LLP
$118,903 of consulting fees in connection with the implementation requirements
of Section 404 of the Sarbanes - Oxley Act and $1,288 in connection with a
review of the Corporation's accounting policies for overhead costs.

Audit Committee Pre-Approval Policy. The Audit Committee pre-approves the
services provided to the Corporation by Deloitte & Touche LLP in connection with
the audit of the Corporation's annual financial statements, the review of the
Corporation's quarterly financial statements and tax preparation and
consultation. Management is not permitted to engage Deloitte & Touche LLP for
other audit or permitted non-audit services without the case-by-case
pre-approval of the Audit Committee. The Audit Committee approved all the
services provided to the Corporation by Deloitte & Touche LLP described above.

Vote Required and Recommendation of the Board of Directors
----------------------------------------------------------

The affirmative vote of a majority of the votes cast on this proposal
shall constitute ratification of the appointment of Deloitte & Touche LLP.

The Board recommends a vote FOR ratification of the appointment of
Deloitte & Touche LLP as independent public accountants for the fiscal year
ending December 31, 2005 and authorization of the board of directors to set
their remuneration.

PROPOSAL NO. 3 - APPROVAL OF ALTAIR NANOTECHNOLOGIES INC.
2005 STOCK INCENTIVE PLAN

In January 2005, the Board approved, subject to shareholder approval,
the 2005 Plan, pursuant to which the Board (or subcommittee thereof) will be
authorized to grant options and other incentive awards with respect to an
aggregate of 3,000,000 Common Shares. If the 2005 Plan is approved by
shareholders, the authority of the Corporation to grant options with respect to
the 834,500 Common Shares available under the 1996 Plan and the 1998 Plan shall
cease. Under rules governing the Corporation's listing on the Nasdaq SmallCap
Market, the Corporation is required to seek shareholder approval for the 2005
Plan. Such approval is also required in order for the Corporation to be able to
grant incentive stock options under the 2005 Plan.

The Board believes that the availability of stock options and other
incentives is an important factor in the Corporation's ability to attract and
retain qualified employees and to provide an incentive for them to exert their
best efforts on behalf of the Corporation. The Corporation has, and may
periodically continue to, use stock options and other incentive awards to
compensate consultants that provide services to the Corporation.

Description of the 2005 Stock Incentive Plan

The following summary of the 2005 Plan is qualified in its entirety by
reference to the full text of the 2005 Plan, a copy of which is available from
the Corporation upon request.

Shares Reserved for Issuance Under the 2005 Plan. The Corporation has
reserved a total of 3,000,000 Common Shares for issuance under the 2005 Plan.
The number and kind of shares available for grants under the 2005 Plan will be
adjusted proportionately by the Board if the number of outstanding Common Shares
is hereafter increased or decreased or changed into or exchanged for a different
number or kind of shares or other securities of the Corporation by reason of any
stock split, combination of shares, dividend payable in shares, recapitalization
or reclassification. As of April 8, 2005, the closing sale price of the Common
Shares, as reported by the Nasdaq SmallCap Market, was $3.69 per share.

Types of Awards. The 2005 Plan authorizes the Board to grant incentive
stock options, non-incentive stock options, stock bonuses, restricted stock and
performance-based awards.

Eligibility. Grants under the 2005 Plan may, at the discretion of the
Board, be awarded to directors, officers and employees and non-employee agents,
consultants, advisers and independent contractors of the Corporation or any
parent or subsidiary of the Corporation. The Corporation currently has 8
directors, 27 employees and officers, and an indeterminable number of
consultants and advisers who could be eligible to receive grants under the 2005
Plan.

Administration. The Board will administer the 2005 Plan. Subject to the
terms of the 2005 Plan, the Board may from time to time adopt and amend rules
and regulations relating to the administration of the 2005 Plan, advance the
lapse of any waiting period, accelerate any exercise date, waive or modify any
restriction applicable to shares (except those restrictions imposed by law) and
make all other determinations in the judgment of the Board necessary or
desirable for the administration of the 2005 Plan. The Board may delegate to a
committee of the Board any or all authority for administration of the 2005 Plan
other than the right to amend or terminate the 2005 Plan.

Amendment and Termination of the 2005 Plan. The Board may amend the
2005 Plan at any time in any respect, subject to any legal or regulatory
restriction. Except for changes in outstanding options in connection with
changes in capital structure and Significant Transactions (as defined blow), no
change in an option already granted may be made without the consent of the
holder of the option. The 2005 Plan will terminate when all shares reserved for
issuance under the 2005 Plan have been issued and all restrictions on such
shares have lapsed or when earlier terminated by the Board.

Description of Stock Options

Options Terms. With respect to each option grant, the Board determines
the number of shares subject to the option, the exercise price, the term of the
option and the time or times at which the option may be exercised. At the time
of the grant of an option or at any time thereafter, the Board may provide that
an optionee who exercised an option to purchase Common Shares shall
automatically receive a new option to purchase additional shares equal to the
number of shares surrendered and may specify the terms and conditions of such
new options.

Exercise of Options. Except as described under "Termination of
Employment, Disability or Death" below or as determined by the Board, an option
may not be exercised unless, when exercised, the optionee is an employee of, or
is providing service to, the Corporation or any subsidiary of the Corporation

and has been continuously so employed or providing service since the date the
option was granted. Absence on leave approved by the Corporation, parent or
subsidiary or on account of illness or disability is not deemed a termination or
interruption of employment or service for this purpose. Unless otherwise
determined by the Board, vesting of options continues during a medical, family
or military leave of absence, whether paid or unpaid, and vesting of options is
suspended during any other unpaid leave of absence.

When exercising an option, the optionee must pay the full purchase
price in cash or check unless the Board determines otherwise. Subject to the
approval of the Board, which may be withheld for any or no reason, an optionee
may pay for all or some of the shares with Common Shares of the Corporation
valued at fair market value, restricted stock, performance units or other
contingent awards denominated in either stock or cash or other forms of
consideration. The 2005 Plan permits the Board to accept promissory notes as
consideration for stock options; however promissory notes are generally not
sufficient consideration for the issuance of Common Shares under the CBCA.

Termination of Employment, Disability or Death. Unless otherwise
determined by the Board at any time, if an optionee ceases to be employed by or
to provide service to the Corporation, any parent or subsidiary of the
Corporation for any reason other than death or total disability, the optionee
may exercise any option then held at any time prior to the earlier of its
expiration date or 30 days following the termination date, but only if and to
the extent the option was exercisable as of the termination date. Any portion of
an option not exercisable at the date of termination lapses.

Unless otherwise determined by the Board, if the optionee's employment
or service terminates because of total disability, the optionee may exercise any
option then held at any time prior to the earlier of its expiration date or 12
months after the date of termination, but only to the extent the option was
exercisable on the date of termination.

Unless otherwise determined by the Board, if an optionee dies while in
the employment of or providing services to the Corporation or any parent or
subsidiary of the Corporation, the option then held may be exercised by the
optionee's legal heirs at any time prior to the earlier of its expiration date
or 12 months after the date of death, but only if and to the extent the option
was exercisable as of the date of death.

Non-Transferability of Options. Unless otherwise determined by the
Board at any time, each stock option granted under the 2005 Plan by its terms is
nonassignable and nontransferable by an optionee, either voluntarily or by
operation of law, other than by will or the laws of descent or distribution upon
the death of an optionee. An option may be exercised only by an optionee or,
after death, by a successor or representative of an optionee.

Merger, Reorganization, Dissolution, Stock Split or Similar Event. In
the event of a merger, consolidation, plan of exchange, acquisition of property
or stock, split-up, split-off, spin-off, reorganization or liquidation to which
the Corporation is a party or any sale, lease, exchange or other transfer (in
one transaction or a series of related transactions) of all, or substantially
all, of the assets of the Corporation, or the transfer by one or more
shareholders, in one transfer or several related transfers, of 50% of more of
the Common Shares outstanding on the date of such transfer (or the first of such
related transfers) to persons, other than wholly-owned subsidiaries or family
trusts, who were not shareholders of the Corporation prior to the first such
transfer (each, a "Significant Transaction"), the Board shall, in its sole
discretion and to the extent possible under the structure of the Significant
Transaction, select one of the following alternatives for treating outstanding
options under the 2005 Plan:

o Outstanding options shall remain in effect in accordance with
their terms;

o Outstanding options shall be converted into options to purchase
stock in one or more of the corporations, including the
Corporation, that are the surviving or acquiring corporations in
the Significant Transaction (with the amount, type of securities
subject thereto and exercise price of the converted options being
determined by the Board taking into account the relative values of
the companies involved in the Significant Transaction)

o The Board shall provide a period at least 10 days before the
completion of the Significant Transaction during which outstanding
options may be exercised to the extent then exercisable, and upon
the expiration of that period, all unexercised options shall
immediately terminate. (The Board may, in its sole discretion,
accelerate the exercisability of options so that they are
exercisable in full during that period.)

In the event of the dissolution of the Corporation, options will be treated as
provided in the immediately preceding paragraph.

Stock Bonuses and Restricted Stock.
-----------------------------------

The Board may award Common Shares under the 2005 Plan as stock bonuses
or as restricted stock. Shares awarded as a bonus or as restricted stock are
subject to the terms, conditions and restrictions determined by the Board,
including restrictions concerning transferability and forfeiture of the shares
awarded. The Board may require the recipient to sign an agreement as a condition
of the award, which agreement shall contain any terms, conditions, restrictions,
representations and warranties required by the Board. The certificates
representing the shares shall bear any legends required by the Board.

Performance-based Awards.
-------------------------

Under the 2005 Plan, the Board may grant performance-based awards.
These awards are intended to qualify as qualified performance-based compensation
under Section 162(m) of the Code and regulations thereunder. Performance-based
awards shall be denominated at the time of grant either in Common Shares or in
dollar amounts. Performance-based awards may be granted in whole or in part if
the Corporation achieves written objective goals established by the Board over a
designated period of time. Payment of an award earned may be in cash or stock or
both as determined by the Board. In addition to the requirement that
participants satisfy certain performance goals, the Board may impose additional
restrictions to payment under a performance-based award.

No participant may receive in any fiscal year stock-based performance
awards under which the aggregate amount payable under the awards exceeds the
equivalent of 500,000 Common Shares or cash-based performance awards under which
the aggregate amount payable exceeds $1,000,000.

United States Federal Income Tax Consequences

The following is a general discussion of certain United States federal
income tax consequences of stock options granted under the 2005 Plan. The
discussion does not describe any tax consequences under the tax laws of any
state, locality or foreign jurisdiction and does not include any tax
consequences associated with any awards other than stock options. Furthermore,
the discussion is based on the provisions of the Code and regulations, rulings
and judicial decisions thereunder as of the date hereof, and such authorities

may be repealed or modified retroactively so as to result in federal income tax
consequences different from those discussed below. The discussion below does not
discuss all federal tax consequences that may be relevant to a particular
grantee, and is not intended as tax advice. Each grantee should consult his or
her individual tax adviser.

Options

Incentive Options. No income is recognized by the grantee of an
incentive stock option upon the grant or timely exercise of the incentive stock
option. Exercise of an incentive stock option may, however, give rise to taxable
ordinary income to the optionee if the optionee subsequently engages in a
"disqualifying disposition," as described below. Additionally, the spread
between the fair-market value of shares obtained upon exercise of an incentive
stock option and the exercise price normally is an adjustment to alternative
minimum taxable income and may result in the optionee having to pay federal
alternative minimum tax for the year of exercise.

A sale, exchange or disposition by an optionee of Common Shares
acquired through the exercise of an incentive stock option more than one year
after the transfer of the shares to such optionee and more than two years after
the date of grant of the incentive stock option will result in any difference
between the net sale proceeds and the exercise price being treated as long-term
capital gain (or loss) to the optionee. If such a sale, exchange or disposition
(including inter vivos gifts) takes place within two years after the date of
grant of the incentive stock option or within one year from the date of exercise
of the incentive stock option, such sale or exchange will generally constitute a
"disqualifying disposition" of the Common Shares.

A disqualifying disposition will have the following results: any excess
of (i) the lesser of (a) the fair market value of one Common Share at the time
of exercise of the incentive stock option or (b) the amount realized on a
disqualifying disposition of the Common Shares through sale; less (ii) the
exercise price, will be ordinary income to the optionee, subject to applicable
tax reporting requirements. Any further gain generally will qualify as capital
gain, and will be long-term capital gain if the holding period for such Common
Shares is more than one year from the date of exercise.

Non-Incentive Options. Provided that the exercise price is not less
than the fair market value of the underlying stock on the date of grant, no
income is recognized by the grantee of a non-incentive stock option until the
non-incentive option is exercised. When the non-incentive stock option is
exercised, the optionee recognizes ordinary compensation income, and the
Corporation generally becomes entitled to a deduction, in the amount by which
the fair market value of the shares subject to the non-incentive stock option at
the time of exercise exceeds the exercise price. With respect to non-incentive
options exercised by certain executive officers, the Corporation's deduction can
in certain circumstances be limited by the $1,000,000 cap on deductibility set
forth in Section 162(m) of the Code. The Corporation is required to withhold on
all amounts treated as ordinary income to optionees who are employees of the
Corporation or an affiliate of the corporation. Upon the sale of shares acquired
by exercise of a stock option, the optionee generally will recognize capital
gain or loss measured by the difference between the sale proceeds and the fair
market value of the shares on the date of exercise. That gain or loss will be
long-term if shares have been held for more than one year.

Canadian Income Taxation

If an optionee is a resident of the United States and not a resident of
Canada, and if the optionee has not been employed in Canada, (i) neither the
receipt nor the exercise of a stock option will give rise to federal Canadian
income tax liability and (ii) the sale of the underlying Common Shares generally

will not be subject to federal Canadian income tax unless (a) the optionee and
persons who do not deal at arm's length with the optionee owned, at any time in
the five year period before sale, 25% or more of the outstanding Common Shares,
or (b) if the Common Shares are used in carrying on a business in Canada.

Restrictions on Transferability of Shares

The Corporation is not obligated to cause to be issued or delivered any
certificates evidencing Common Shares pursuant to the 2005 Plan unless and until
the Corporation is advised by its counsel that the issuance and delivery of such
certificates is in compliance with all applicable laws and regulations of any
governmental authority and the requirements of any securities exchange on which
Common Shares are traded. The Corporation may require, as a condition of the
issuance and delivery of certificates evidencing Common Shares pursuant to the
2005 Plan, that the recipient of such shares make such covenants, agreements and
representations, and that such certificates bear such legends as the
Corporation, in its sole discretion, deems necessary or desirable.

Securities Authorized for Issuance Under Equity Compensation Plans

In addition to the existing 1996 Plan and 1998 Plan, the Corporation
has an Employee Stock Purchase Plan ("ESPP") which allows employees to purchase
Common Shares through payroll deductions when, as and if determined by the Board
of Directors. The ESPP, which is a broadly-based plan open to all employees,
other than executive officers, has not been approved by shareholders. The
following table sets forth certain information with respect to compensation
plans under which equity securities are authorized for issuance at December 31,
2004 (without giving effect to the approval of the 2005 Plan):

---------------------------------- -------------------- -------------------- -----------------------
Number of securities
Number of remaining available
securities to be for future issuance
issued upon Weighted-average under equity
exercise of exercise price of compensation plans
outstanding outstanding (excluding securities
options, warrants options, warrants reflected in column
and rights and rights (a))
Plan Category (a) (b) (c)
---------------------------------- -------------------- -------------------- -----------------------

Equity compensation plans 3,293,700 $2.28 1,048,000(1)
approved by security holders
---------------------------------- -------------------- -------------------- -----------------------
Equity compensation plans not
approved by security holders None N/A 348,552
---------------------------------- -------------------- -------------------- -----------------------
Total 3,293,700 $2.28 1,396,552
---------------------------------- -------------------- -------------------- -----------------------

(1) During the period January 1, 2005 through April 11, 2005, the Corporation
granted to employees 313,500 options to purchase Common Shares.

If the 2005 Plan is approved by shareholders, the authority of the Corporation
to grant options with respect to the 834,500 Common Shares currently available
under the 1996 Plan and the 1998 Plan shall cease.

New Plan Benefits

No awards have been granted under the 2005 Plan. The Corporation is
unable to determine the amount of awards that may be granted in the future to
its officers, directors or affiliates, inasmuch as grants of awards are subject
to the discretion of the Board.

Vote Required for Approval and Recommendation by the Board

The Board recommends a vote FOR approval of the 2005 Plan. The proposal
to approve the 2005 Plan must be approved by the holders of at least a majority
of the votes cast at the Meeting. Abstentions and broker nonvotes are not
counted and have no effect on the results of the vote.

PROPOSAL NO. 4 - APPROVAL OF BYLAW AMENDMENT
TO INCREASE QUORUM REQUIREMENT FOR SHAREHOLDER MEETINGS

The Proposed Bylaw Amendment.

Prior to September 30, 2004, Section 14 of the bylaws of the
Corporation (the "Bylaws") provided that a quorum would be present at a meeting
of the shareholders if two shareholders were present, in person or by proxy, at
the shareholders meeting. On September 30, 2004, the Board approved an amendment
to the Bylaws (the "Bylaw Amendment") replacing the quorum requirement in
Section 14 of the Bylaws with the following:

A quorum of shareholders for the transaction of business is present at
a meeting of shareholders if not less than 33 1/3% of the shares
entitled to vote at the meeting are present in person or represented by
proxy.

The Bylaw Amendment does not affect any other provisions of the Bylaws. The
Bylaw Amendment was effective when adopted, and applies to the Meeting; however,
under the CBCA, the Corporation is required to seek ratification of shareholders
of any amendment to the Bylaws at the next shareholders meeting. If the Bylaw
Amendment is not approved by the shareholders at the Meeting, it will cease to
be effective.

Purpose and Effect of Bylaw Amendment.

The purpose of the Bylaw Amendment is to increase the quorum
requirement for shareholders meetings from two shareholders to a number of
shareholders holding 33 1/3% of the shares entitled to vote at the shareholders
meeting. The Board approved the Bylaw Amendment, and is recommending approval of
the Bylaw Amendment to the shareholders of the Corporation, in order to comply
with rules governing its listing on the Nasdaq SmallCap Market.

Prior to September 30, 2004, the Corporation relied upon an exemption
from the requirements of Nasdaq Stock Market Rule 4350(f). Nasdaq Stock Market
Rule 4350(f) requires that each issuer have a minimum quorum requirement for its
shareholders meetings of at least 33 1/3% of the outstanding shares of its
voting stock. The Corporation requested, and relied upon, the exemption from
Nasdaq Stock Market Rule 4350(f) prior to September 30, 2004 on the basis that a
greater quorum requirement would be contrary to generally accepted business
practices in Canada and under the CBCA. In light of changes in rules and
policies governing the NASDAQ SmallCap Market, the Corporation became concerned
in 2004 that it would cease to qualify for the exemption it had previously
received from Nasdaq Stock Market Rule 4350(f). In anticipation of that
possibility, the Board approved the Bylaw Amendment in order to bring the quorum
requirement set forth in the Bylaws into compliance with Nasdaq Stock Market
Rule 4350(f).

Vote Required for Approval and Recommendation by the Board

The Board recommends a vote FOR the proposed Bylaw Amendment. The Bylaw
Amendment must be approved by the holders of at least a majority of the votes
cast at the Meeting. Abstentions and broker nonvotes are not counted in
connection with, and have no effect on the results, of the vote.

OTHER MATTERS

Proposals of Shareholders
-------------------------

Pursuant to rules adopted by the SEC, if a shareholder intends to
propose any matter for a vote at the Meeting but failed to notify the
Corporation of such intention prior to March 8, 2006, then a proxy solicited by
the Board may be voted on such matter in the discretion of the proxy holder,
without discussion of the matter in the proxy statement soliciting such proxy
and without such matter appearing as a separate item on the proxy card.

In order to be included in the proxy statement and form of proxy
relating to the Corporation's annual meeting of shareholders to be held in 2006,
proposals which shareholders intend to present at such annual meeting must be
received by the corporate secretary of the Corporation, at the Corporation's
principal business office, 204 Edison Way, Reno, Nevada 89502, no later than
December 23, 2005.

Undertakings
------------

Unless the Corporation has received contrary instructions, the
Corporation intends to deliver only one copy of this Information Circular and
one copy of the Annual Report for the year ended December 31, 2004 to multiple
shareholders sharing the same address. Upon written or oral request, the
Corporation will provide, without charge, an additional copy of such documents
to each shareholder at a shared address to which a single copy of such documents
was delivered. Shareholders at shared addresses that are receiving a single copy
of such documents but wish to receive multiple copies, and shareholders at
shared addresses that are receiving multiple copies of such documents but wish
to receive a single copy, should contact Edward Dickinson, Chief Financial
Officer, at 204 Edison Way, Reno, Nevada, 89502, U.S.A., or at the following
telephone number: (775) 858-3750.

Additional Information
----------------------

Additional information relating to the Corporation is available on
SEDAR at www.sedar.com. Financial information is provided in the Corporation's
comparative financial statements and Management Discussion and Analysis for the
year ended December 31, 2004. Shareholders may contact Shaun Drake at 56
Temperance Street, 4th Floor, Toronto, Ontario M5H 3V5 (416-361-0737), to
request copies of the Company's financial statements and Management Discussion
and Analysis.

Upon written or oral request, the Corporation will provide, without
charge, to each person to whom a copy of this Information Circular has been
delivered, a copy of the Corporation's Annual Report on Form 10-K for the year
ended December 31, 2004 filed with the SEC (other than the exhibits except as
expressly requested). Requests should be directed to Edward Dickinson, Chief
Financial Officer, at 204 Edison Way, Reno, Nevada, 89502, U.S.A., or at the
following telephone number: (775) 858-3750.

* * * * * * * * *

The contents and sending of this Information Circular have been
approved by the directors of the Corporation.

DATED as of the 11th day of April, 2005.

ALTAIR NANOTECHNOLOGIES INC.

/s/ Alan J. Gotcher
-----------------------------------------------------
Alan J. Gotcher, Chief Executive Officer

PROXY
Altair Nanotechnologies Inc.
Annual and Special Meeting Of Shareholders

on
May 26, 2005

This Proxy Is Solicited By The Board of Directors Of
Altair Nanotechnologies Inc.

The undersigned shareholder of Altair Nanotechnologies Inc. (the
"Corporation") hereby nominates, constitutes and appoints Alan J. Gotcher, Chief
Executive Officer and director, or failing him, Edward Dickinson, Chief
Financial Officer, or instead of any of them, ___________________________, as
nominee of the undersigned to attend and vote for and on behalf of the
undersigned at the annual and special meeting of shareholders of the Corporation
(the "Meeting") to be held on the 26th day of May, 2005 and at any adjournment
or adjournments thereof, to the same extent and with the same power as if the
undersigned were personally present at the said meeting or such adjournment or
adjournments thereof, and without limiting the generality of the power hereby
conferred, the nominees are specifically directed to vote the shares represented
by this proxy as indicated below.
The shares represented by this proxy will be voted and, where a choice
is specified, will be voted as directed. Where no choice is specified, this
proxy will confer discretionary authority and will be voted in favour of all
nominees of the Board of Directors, in favour of the ratification of the
appointment of auditors, in favour of the 2005 Stock Incentive Plan and in
favour of the proposed bylaw amendment.
This proxy also confers discretionary authority to vote in respect of
any amendments or variations to the matters identified in the Notice of Meeting,
matters incident to the conduct of the Meeting and any other matter which may
properly come before the Meeting about which the Corporation did not have notice
as of the date the definitive Information Circular and Proxy Statement of the
Corporation was filed with the SEC and in such manner as such nominee in his
judgement may determine.
A shareholder has the right to appoint a person to attend and act for
him and on his behalf at the Meeting other than the persons designated in this
form of proxy. Such right may be exercised by filling the name of such person in
the blank space provided and striking out the names of management's nominees, or
by completing another proper form of proxy and, in either case, depositing the
proxy as instructed below.
To be valid, this proxy must be received by the transfer agent at 120
Adelaide Street West, Suite 420, Toronto, Ontario M5H 4C3, Canada not later than
48 hours (excluding Saturdays and holidays) before the time of holding the
Meeting or adjournment thereof, or delivered to the chairman on the day of the
Meeting or adjournment thereof.
The nominees are directed to vote the shares represented by this proxy
as follows:

(1) ELECTION OF DIRECTORS, each to serve until the next annual meeting
of shareholders of the Corporation and until their respective
successor shall have been duly elected and shall qualify:
[ ] FOR all nominees listed below (except as marked to the
contrary).
[ ] WITHHOLD AUTHORITY to vote for all nominees listed below.
[ ] (INSTRUCTION: To withhold authority to vote for any
individual nominee, strike a line through the nominee's name
in the list below.)

Michel Bazinet Jon N. Bengtson James I. Golla Alan J. Gotcher
George E. Hartman Christopher E. Jones David S. King

[See Reverse Side]

(2) Proposal to ratify the appointment of Deloitte & Touche LLP as
independent auditors of the Corporation for the fiscal year ending
December 31, 2005 and to authorize the board of directors to fix their
remuneration.
[ ] FOR [ ] AGAINST [ ] WITHHOLD

(3) Proposal to approve the Altair Nanotechnologies Inc. 2005 Stock
Incentive Plan. [ ] FOR [ ] AGAINST [ ] WITHHOLD

(4) Proposal to approve the Bylaw Amendment increasing the quorum
requirement for shareholders meeting from two shareholders to 33 1/3%
of the shares entitled to vote at the meeting.

[ ] FOR [ ] AGAINST [ ] WITHHOLD

(5) At the nominee's discretion upon any amendments or variations to
matters specified in the notice of the Meeting, matters incident to the
conduct of the Meeting, and upon any other matters as may properly come
before the Meeting or any adjournments thereof about which the
Corporation did not have notice as of the date45 days before the date
on which the Corporation first mailed proxy materials to shareholders.

THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE
INSTRUCTIONS GIVEN ON ANY VOTE OR BALLOT CALLED AT THE MEETING. UNLESS A
SPECIFIC INSTRUCTION IS INDICATED, SAID SHARES WILL BE VOTED IN FAVOR OF ALL
NOMINEES OF THE BOARD OF DIRECTOR, AND IN FAVOUR OF RATIFICATION OF THE
APPOINTMENT OF AUDITORS, THE APPROVAL OF THE 2005 STOCK INCENTIVE PLAN AND
APPROVAL OF THE BYLAW AMENDMENT, ALL OF WHICH ARE SET FORTH IN THE
ACCORPORATIONING CIRCULAR, RECEIPT OF WHICH IS HEREBY ACKNOWLEDGED.

This proxy revokes and supersedes all proxies of earlier date.

DATED this ____ day of ________________ , 2005.

PRINT NAME: _______________________________

SIGNATURE: ________________________________

NOTES:

(1) This proxy must be signed by the shareholder or his attorney duly
authorized in writing, or if the shareholder is a corporation, by the
proper officers or directors under its corporate seal, or by an officer
or attorney thereof duly authorized.
(2) A person appointed as nominee to represent a shareholder need not be a
shareholder of the Corporation.
(3) If not dated, this proxy is deemed to bear the date on which it was
mailed on behalf of the management of the Corporation.
(4) Each shareholder who is unable to attend the Meeting is respectfully
requested to date and sign this form of proxy and return it using the
self-addressed envelope provided.

ALTAIR NANOTECHNOLOGIES INC.

NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS

NOTICE IS HEREBY GIVEN that an annual and special meeting (the
"Meeting") of the shareholders of Altair Nanotechnologies Inc. (the
"Corporation") will be held at the Reno Hilton, 2500 E. 2nd Street, Reno, Nevada
89502, Thursday, the 26th day of May 2005, at the hour of 10:00 o'clock in the
morning (Pacific time) for the following purposes:

(1) To receive the audited financial statements of the Corporation for the
twelve months ended December 31, 2004, together with the report of the
auditors thereon;

(2) To elect directors;

(3) To ratify the appointment of the appoint auditors and to authorize the
directors to fix their remuneration;

(4) To consider and vote upon the proposal to approve the Altair
Nanotechnologies Inc. 2005 Stock Incentive Plan.

(5) To consider and vote upon the proposal to approve a bylaw amendment
increasing the quorum requirement for shareholders meeting from two
shareholders to 33 1/3 of the shares entitled to vote at the meeting.

(6) To transact such further or other business as may properly come before
the Meeting or any adjournment or adjournments thereof.

This notice is accompanied by a form of proxy, a copy of the
Circular, the annual report to shareholders of the Corporation containing the
audited consolidated financial statements of the Corporation for the fiscal year
ended December 31, 2004, and a supplemental mailing list form.

Shareholders who are unable to attend the Meeting in person are
requested to complete, date, sign and return the enclosed form of proxy so that
as large a representation as possible may be had at the Meeting.

DATED at Toronto, Ontario as of the 11th day of April, 2005.

BY: ORDER OF THE BOARD

(Sgd.) Alan J. Gotcher
-------------------------------------
Chief Executive Officer

APPENDIX

ALTAIR NANOTECHNOLOGIES INC.

2005 STOCK INCENTIVE PLAN

1. Purpose. The purpose of this 2005 Stock Incentive Plan (the "Plan") is to
enable Altair Nanotechnologies Inc. (the "Company") to attract and retain the
services of (i) selected employees, officers and directors of the Company or any
parent or subsidiary of the Company and (ii) selected nonemployee agents,
consultants, advisers and independent contractors of the Company or any parent
or subsidiary of the Company. For purposes of this Plan, a person is considered
to be employed by or in the service of the Company if the person is employed by
or in the service of any entity (the "Employer") that is either the Company or a
direct or indirect subsidiary of the Company.

2. Shares Subject to the Plan. Subject to adjustment as provided below and in
Section 10, the shares to be offered under the Plan shall consist of Common
Stock of the Company, and the total number of shares of Common Stock that may be
issued under the Plan shall be 3,000,000 shares. If an option or
Performance-Based Award granted under the Plan expires, terminates or is
canceled, the unissued shares subject to that option or Performance-Based Award
shall again be available under the Plan. If shares awarded as a bonus pursuant
to Section 7 or sold pursuant to Section 8 under the Plan are forfeited to or
repurchased by the Company, the number of shares forfeited or repurchased shall
again be available under the Plan.

3. Effective Date and Duration of Plan.

3.1 Effective Date. The Plan shall become effective as of the date it
is approved by the stockholders of the Company. No Incentive Stock Option (as
defined in Section 5 below) granted under the Plan shall become exercisable and
no payments shall be made under a Performance-Based Award, however, until the
Plan is approved by the affirmative vote of the holders of a majority of the
shares of Common Stock represented at a shareholders meeting at which a quorum
is present or by means of unanimous consent resolutions, and the exercise of any
Incentive Stock Options granted under the Plan before approval shall be
conditioned on and subject to that approval. Subject to this limitation, options
and Performance-Based Awards may be granted and shares may be awarded as bonuses
or sold under the Plan at any time after the effective date and before
termination of the Plan.

3.2 Duration. The Plan shall continue in effect until all shares
available for issuance under the Plan have been issued and all restrictions on
the shares have lapsed. The Board of Directors may suspend or terminate the Plan
at any time except with respect to options, Performance-Based Awards and shares
subject to restrictions then outstanding under the Plan. Termination shall not
affect any outstanding options, any outstanding Performance-Based Awards or any
right of the Company to repurchase shares or the forfeitability of shares issued
under the Plan.

4. Administration.

4.1 Board of Directors. The Plan shall be administered by the Board of
Directors of the Company, which shall determine and designate the individuals to
whom awards shall be made, the amount of the awards and the other terms and
conditions of the awards. Subject to the provisions of the Plan, the Board of
Directors may adopt and amend rules and regulations relating to administration
of the Plan, advance the lapse of any waiting period, accelerate any exercise
date, waive or modify any restriction applicable to shares (except those
restrictions imposed by law) and make all other determinations in the judgment
of the Board of Directors necessary or desirable for the administration of the
Plan. The interpretation and construction of the provisions of the Plan and
related agreements by the Board of Directors shall be final and conclusive. The
Board of Directors may correct any defect or supply any omission or reconcile
any inconsistency in the Plan or in any related agreement in the manner and to
the extent it deems expedient to carry the Plan into effect, and the Board of
Directors shall be the sole and final judge of such expediency.

4.2 Committee. The Board of Directors may delegate to any committee of
the Board of Directors (the "Committee") any or all authority for administration
of the Plan. If authority is delegated to the Committee, all references to the
Board of Directors in the Plan shall mean and relate to the Committee, except
(i) as otherwise provided by the Board of Directors and (ii) that only the Board
of Directors may amend or terminate the Plan as provided in Sections 3 and 11.

5. Types of Awards, Eligibility, Limitations. The Board of Directors may, from
time to time, take the following actions, separately or in combination, under
the Plan: (i) grant Incentive Stock Options, as defined in Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), as provided in Sections
6.1 and 6.2; (ii) grant options other than Incentive Stock Options
("Non-Statutory Stock Options") as provided in Sections 6.1 and 6.3; (iii) award
stock bonuses as provided in Section 7; (iv) sell shares subject to restrictions
as provided in Section 8; and (v) award Performance-Based Awards as provided in
Section 9. Awards may be made to employees, including employees who are officers
or directors, and to other individuals described in Section 1 selected by the
Board of Directors; provided, however, that only employees of the Company or any
parent or subsidiary of the Company (as defined in subsections 424(e) and 424(f)
of the Code) are eligible to receive Incentive Stock Options under the Plan. The
Board of Directors shall select the individuals to whom awards shall be made and
shall specify the action taken with respect to each individual to whom an award
is made. At the discretion of the Board of Directors, an individual may be given
an election to surrender an award in exchange for the grant of a new award.

6. Option Grants.

6.1 General Rules Relating to Options.

6.1-1 Terms of Grant. The Board of Directors may grant
options under the Plan. With respect to each option grant, the Board of
Directors shall determine the number of shares subject to the option, the
exercise price, the period of the option, the time or times at which the option
may be exercised and

whether the option is an Incentive Stock Option or a Non-Statutory Stock Option.
At the time of the grant of an option or at any time thereafter, the Board of
Directors may provide that an optionee who exercised an option with Common Stock
of the Company shall automatically receive a new option to purchase additional
shares equal to the number of shares surrendered and may specify the terms and
conditions of such new options.

6.1-2 Exercise of Options. Except as provided in Section
6.1-4 or as determined by the Board of Directors, no option granted under the
Plan may be exercised unless at the time of exercise the optionee is employed by
or in the service of the Company and shall have been so employed or provided
such service continuously since the date the option was granted. Except as
provided in Sections 6.1-4 and 10, options granted under the Plan may be
exercised from time to time over the period stated in each option in amounts and
at times prescribed by the Board of Directors, provided that options may not be
exercised for fractional shares. Unless otherwise determined by the Board of
Directors, if an optionee does not exercise an option in any one year for the
full number of shares to which the optionee is entitled in that year, the
optionee's rights shall be cumulative and the optionee may purchase those shares
in any subsequent year during the term of the option.

6.1-3 Nontransferability. Each Incentive Stock Option and,
unless otherwise determined by the Board of Directors (either at, or at any time
following, the time of grant), each other option granted under the Plan by its
terms (i) shall be nonassignable and nontransferable by the optionee, either
voluntarily or by operation of law, except by will or by the laws of descent and
distribution of the state or country of the optionee's domicile at the time of
death, and (ii) during the optionee's lifetime, shall be exercisable only by the
optionee.

6.1-4 Termination of Employment or Service.

6.1-4(a) General Rule. Unless otherwise determined by
the Board of Directors (either at, or at any time following, the time of grant),
if an optionee's employment or service with the Company terminates for any
reason other than because of total disability or death as provided in Sections
6.1-4(b) and (c), his or her option may be exercised at any time before the
expiration date of the option or the expiration of 30 days after the date of
termination, whichever is the shorter period, but only if and to the extent the
optionee was entitled to exercise the option at the date of termination.

6.1-4(b) Termination Because of Total Disability. Unless
otherwise determined by the Board of Directors, if an optionee's employment or
service with the Company terminates because of total disability, his or her
option may be exercised at any time before the expiration date of the option or
before the date 12 months after the date of termination, whichever is the
shorter period, but only if and to the extent the optionee was entitled to
exercise the option at the date of termination. The term "total disability"
means a medically determinable mental or physical impairment that is expected to
result in death or has lasted or is expected to last for a continuous period of
12 months or more and that, in the opinion of the Company and two independent
physicians, causes the optionee to be unable to perform his or her duties as an
employee, director, officer or consultant of the Employer and unable to be

engaged in any substantial gainful activity. Total disability shall be deemed to
have occurred on the first day after the two independent physicians have
furnished their written opinion of total disability to the Company and the
Company has reached an opinion of total disability.

6.1-4(c) Termination Because of Death. Unless otherwise
determined by the Board of Directors, if an optionee dies while employed by or
providing service to the Company, his or her option may be exercised at any time
before the expiration date of the option or before the date 12 months after the
date of death, whichever is the shorter period, but only if and to the extent
the optionee was entitled to exercise the option at the date of death and only
by the person or persons to whom the optionee's rights under the option shall
pass by the optionee's will or by the laws of descent and distribution of the
state or country of domicile at the time of death.

6.1-4(d) Amendment of Exercise Period Applicable to
Termination. The Board of Directors may at any time extend the 30-day and
12-month exercise periods any length of time not longer than the original
expiration date of the option. The Board of Directors may at any time increase
the portion of an option that is exercisable, subject to terms and conditions
determined by the Board of Directors.

6.1-4(e) Failure to Exercise Option. To the extent that
the option of any deceased optionee or any optionee whose employment or service
terminates is not exercised within the applicable period, all further rights to
purchase shares pursuant to the option shall cease and terminate.

6.1-4(f) Leave of Absence. Absence on leave approved by
the Employer or on account of illness or disability shall not be deemed a
termination or interruption of employment or service. Unless otherwise
determined by the Board of Directors, vesting of options shall continue during a
medical, family or military leave of absence, whether paid or unpaid, and
vesting of options shall be suspended during any other unpaid leave of absence.

6.1-5 Purchase of Shares.

6.1-5(a) Notice of Exercise. Unless the Board of
Directors determines otherwise, shares may be acquired pursuant to an option
granted under the Plan only upon the Company's receipt of written notice from
the optionee of the optionee's binding commitment to purchase shares, specifying
the number of shares the optionee desires to purchase under the option and the
date on which the optionee agrees to complete the transaction, and, if required
to comply with the Securities Act of 1933 and/or governing state securities laws
of laws of foreign countries with jurisdiction, containing a representation that
it is the optionee's intention to acquire the shares for investment and not with
a view to distribution.

6.1-5(b) Payment. Unless the Board of Directors
determines otherwise (either at, or at any time following, the time of grant),
on or before the date specified for completion of the purchase of shares

pursuant to an option exercise, the optionee must pay the Company the full
purchase price of those shares in cash or by check or, with the consent of the
Board of Directors, in whole or in part, in Common Stock of the Company valued
at fair market value, restricted stock or other contingent awards denominated in
either stock or cash, promissory notes (to the extent permitted by governing
law) and other forms of consideration. Unless otherwise determined by the Board
of Directors, any Common Stock provided in payment of the purchase price must
have been previously acquired and held by the optionee for at least six months.
The fair market value of Common Stock provided in payment of the purchase price
shall be the closing price of the Common Stock last reported before the time
payment in Common Stock is made or, if earlier, committed to be made, if the
Common Stock is publicly traded, or another value of the Common Stock as
specified by the Board of Directors. No shares shall be issued until full
payment for the shares has been made, including all amounts owed for tax
withholding. With the consent of the Board of Directors (either at, or at any
time following, the time of grant), an optionee may request the Company to apply
automatically the shares to be received upon the exercise of a portion of a
stock option (even though stock certificates have not yet been issued) to
satisfy the purchase price for additional portions of the option.

6.1-5(c) Tax Withholding. Each optionee who has
exercised an option shall, immediately upon notification of the amount due, if
any, pay to the Company in cash or by check amounts necessary to satisfy any
applicable federal, state and local tax withholding requirements. If additional
withholding is or becomes required (as a result of exercise of an option or as a
result of disposition of shares acquired pursuant to exercise of an option)
beyond any amount deposited before delivery of the certificates, the optionee
shall pay such amount, in cash or by check, to the Company on demand. If the
optionee fails to pay the amount demanded, the Company or the Employer may
withhold that amount from other amounts payable to the optionee, including
salary, subject to applicable law. With the consent of the Board of Directors,
an optionee may satisfy this obligation, in whole or in part, by instructing the
Company to withhold from the shares to be issued upon exercise or by delivering
to the Company other shares of Common Stock; provided, however, that the number
of shares so withheld or delivered shall not exceed the minimum amount necessary
to satisfy the required withholding obligation.

6.1-5(d) Reduction of Reserved Shares. Upon the exercise
of an option, the number of shares reserved for issuance under the Plan shall be
reduced by the number of shares issued upon exercise of the option (less the
number of any shares surrendered in payment for the exercise price or withheld
to satisfy withholding requirements).

6.1-6 Limitations on Grants to Non-Exempt Employees. Unless
otherwise determined by the Board of Directors, if an employee of the Company or
any parent or subsidiary of the Company is a non-exempt employee subject to the
overtime compensation provisions of Section 7 of the Fair Labor Standards Act
(the "FLSA"), any option granted to that employee shall be subject to the
following restrictions: (i) the option price shall be at least 85 percent of the
fair market value, as described in Section 6.2-4, of the Common Stock subject to
the option on the date it is granted; and (ii) the option shall not be
exercisable until at least six months after the date it is granted; provided,
however, that this six-month restriction on exercisability will cease to apply

if the employee dies, becomes disabled or retires, there is a change in
ownership of the Company, or in other circumstances permitted by regulation, all
as prescribed in Section 7(e)(8)(B) of the FLSA.

6.2 Incentive Stock Options. Incentive Stock Options shall be subject
to the following additional terms and conditions:

6.2-1 Limitation on Amount of Grants. If the aggregate fair
market value of stock (determined as of the date the option is granted) for
which Incentive Stock Options granted under this Plan (and any other stock
incentive plan of the Company or its parent or subsidiary corporations, as
defined in subsections 424(e) and 424(f) of the Code) are exercisable for the
first time by an employee during any calendar year exceeds $100,000, the portion
of the option or options not exceeding $100,000, to the extent of whole shares,
will be treated as an Incentive Stock Option and the remaining portion of the
option or options will be treated as a Non-Statutory Stock Option. The preceding
sentence will be applied by taking options into account in the order in which
they were granted. If, under the $100,000 limitation, a portion of an option is
treated as an Incentive Stock Option and the remaining portion of the option is
treated as a Non-Statutory Stock Option, unless the optionee designates
otherwise at the time of exercise, the optionee's exercise of all or a portion
of the option will be treated as the exercise of the Incentive Stock Option
portion of the option to the full extent permitted under the $100,000
limitation. If an optionee exercises an option that is treated as in part an
Incentive Stock Option and in part a Non-Statutory Stock Option, the Company
will designate the portion of the stock acquired pursuant to the exercise of the
Incentive Stock Option portion as Incentive Stock Option stock by issuing a
separate certificate for that portion of the stock and identifying the
certificate as Incentive Stock Option stock in its stock records.

6.2-2 Limitations on Grants to 10 percent Shareholders. An
Incentive Stock Option may be granted under the Plan to an employee possessing
more than 10 percent of the total combined voting power of all classes of stock
of the Company or any parent or subsidiary (as defined in subsections 424(e) and
424(f) of the Code) only if the option price is at least 110 percent of the fair
market value, as described in Section 6.2-4, of the Common Stock subject to the
option on the date it is granted and the option by its terms is not exercisable
after the expiration of five years from the date it is granted.

6.2-3 Duration of Options. Subject to Sections 6.1-2, 6.1-4
and 6.2-2, Incentive Stock Options granted under the Plan shall continue in
effect for the period fixed by the Board of Directors, except that by its terms
no Incentive Stock Option shall be exercisable after the expiration of 10 years
from the date it is granted.

6.2-4 Option Price. The option price per share shall be
determined by the Board of Directors at the time of grant. Except as provided in
Section 6.2-2, the option price shall not be less than 100 percent of the fair
market value of the Common Stock covered by the Incentive Stock Option at the
date the option is granted. The fair market value shall be the closing price of
the Common Stock last reported before the time the option is granted, if the
stock is publicly traded, or another value of the Common Stock as specified by
the Board of Directors.

6.2-5 Limitation on Time of Grant. No Incentive Stock Option
shall be granted on or after the tenth anniversary of the last action by the
Board of Directors adopting the Plan or approving an increase in the number of
shares available for issuance under the Plan, which action was subsequently
approved within 12 months by the shareholders.

6.2-6 Early Dispositions. If within two years after an
Incentive Stock Option is granted or within 12 months after an Incentive Stock
Option is exercised, the optionee sells or otherwise disposes of Common Stock
acquired on exercise of the Option, the optionee shall within 30 days of the
sale or disposition notify the Company in writing of (i) the date of the sale or
disposition, (ii) the amount realized on the sale or disposition and (iii) the
nature of the disposition (e.g., sale, gift, etc.).

6.3 Non-Statutory Stock Options. Non-Statutory Stock Options shall be
subject to the following terms and conditions, in addition to those set forth in
Section 6.1 above:

6.3-1 Option Price. The option price for Non-Statutory Stock
Options shall be determined by the Board of Directors at the time of grant and
may be any amount determined by the Board of Directors.

6.3-2 Duration of Options. Non-Statutory Stock Options
granted under the Plan shall continue in effect for the period fixed by the
Board of Directors.

7. Stock Bonuses. The Board of Directors may award shares under the Plan as
stock bonuses. Shares awarded as a bonus shall be subject to the terms,
conditions and restrictions determined by the Board of Directors. The
restrictions may include restrictions concerning transferability and forfeiture
of the shares awarded, together with any other restrictions determined by the
Board of Directors. The Board of Directors may require the recipient to sign an
agreement as a condition of the award, but may not require the recipient to pay
any monetary consideration other than amounts necessary to satisfy tax
withholding requirements. The agreement may contain any terms, conditions,
restrictions, representations and warranties required by the Board of Directors.
The certificates representing the shares awarded shall bear any legends required
by the Board of Directors. The Company may require any recipient of a stock
bonus to pay to the Company in cash or by check upon demand amounts necessary to
satisfy any applicable federal, state or local tax withholding requirements. If
the recipient fails to pay the amount demanded, the Company or the Employer may
withhold that amount from other amounts payable to the recipient, including
salary, subject to applicable law. With the consent of the Board of Directors, a
recipient may satisfy this obligation, in whole or in part, by instructing the
Company to withhold from any shares to be issued or by delivering to the Company
other shares of Common Stock; provided, however, that the number of shares so
withheld or delivered shall not exceed the minimum amount necessary to satisfy
the required withholding obligation. Upon the issuance of a stock bonus, the

number of shares reserved for issuance under the Plan shall be reduced by the
number of shares issued, less the number of shares withheld or delivered to
satisfy withholding obligations.

8. Restricted Stock. The Board of Directors may issue shares under the Plan for
any consideration (including promissory notes and services) determined by the
Board of Directors. Shares issued under the Plan shall be subject to the terms,
conditions and restrictions determined by the Board of Directors. The
restrictions may include restrictions concerning transferability, repurchase by
the Company and forfeiture of the shares issued, together with any other
restrictions determined by the Board of Directors. All Common Stock issued
pursuant to this Section 8 shall be subject to a purchase agreement, which shall
be executed by the Company and the prospective purchaser of the shares before
the delivery of certificates representing the shares to the purchaser. The
purchase agreement may contain any terms, conditions, restrictions,
representations and warranties required by the Board of Directors. The
certificates representing the shares shall bear any legends required by the
Board of Directors. The Company may require any purchaser of restricted stock to
pay to the Company in cash or by check upon demand amounts necessary to satisfy
any applicable federal, state or local tax withholding requirements. If the
purchaser fails to pay the amount demanded, the Company or the Employer may
withhold that amount from other amounts payable to the purchaser, including
salary, subject to applicable law. With the consent of the Board of Directors, a
purchaser may satisfy this obligation, in whole or in part, by instructing the
Company to withhold from any shares to be issued or by delivering to the Company
other shares of Common Stock; provided, however, that the number of shares so
withheld or delivered shall not exceed the minimum amount necessary to satisfy
the required withholding obligation. Upon the issuance of restricted stock, the
number of shares reserved for issuance under the Plan shall be reduced by the
number of shares issued, less the number of shares withheld or delivered to
satisfy withholding obligations.

9. Performance-Based Awards. The Board of Directors may grant awards intended to
qualify as qualified performance-based compensation under Section 162(m) of the
Code and the regulations thereunder ("Performance-Based Awards").
Performance-Based Awards shall be denominated at the time of grant either in
Common Stock ("Stock Performance Awards") or in dollar amounts ("Dollar
Performance Awards"). Payment under a Stock Performance Award or a Dollar
Performance Award shall be made, at the discretion of the Board of Directors, in
Common Stock ("Performance Shares"), or in cash or in any combination thereof.
Performance-Based Awards shall be subject to the following terms and conditions:

9.1 Award Period. The Board of Directors shall determine the period of
time for which a Performance-Based Award is made (the "Award Period").

9.2 Performance Goals and Payment. The Board of Directors shall
establish in writing objectives ("Performance Goals") that must be met by the
Company or any subsidiary, division or other unit of the Company ("Business
Unit") during the Award Period as a condition to payment being made under the
Performance-Based Award. The Performance Goals for each award shall be one or
more targeted levels of performance with respect to one or more of the following
objective measures with respect to the Company or any Business Unit: earnings,
earnings per share, stock price increase, total shareholder return (stock price

increase plus dividends), return on equity, return on assets, return on capital,
economic value added, revenues, operating income, inventories, inventory turns,
cash flows or any of the foregoing before the effect of acquisitions,
divestitures, accounting changes, and restructuring and special charges
(determined according to criteria established by the Board of Directors). The
Board of Directors shall also establish the number of Performance Shares or the
amount of cash payment to be made under a Performance-Based Award if the
Performance Goals are met or exceeded, including the fixing of a maximum payment
(subject to Section 9.4). The Board of Directors may establish other
restrictions to payment under a Performance-Based Award, such as a continued
employment requirement, in addition to satisfaction of the Performance Goals.
Some or all of the Performance Shares may be issued at the time of the award as
restricted shares subject to forfeiture in whole or in part if Performance Goals
or, if applicable, other restrictions are not satisfied.

9.3 Computation of Payment. During or after an Award Period, the
performance of the Company or Business Unit, as applicable, during the period
shall be measured against the Performance Goals. If the Performance Goals are
not met, no payment shall be made under a Performance-Based Award. If the
Performance Goals are met or exceeded, the Board of Directors shall certify that
fact in writing and certify the number of Performance Shares earned or the
amount of cash payment to be made under the terms of the Performance-Based
Award.

9.4 Maximum Awards. No participant may receive in any fiscal year Stock
Performance Awards under which the aggregate amount payable under the Awards
exceeds the equivalent of 500,000 shares of Common Stock or Dollar Performance
Awards under which the aggregate amount payable under the Awards exceeds
$1,000,000.

9.5 Tax Withholding. Each participant who has received Performance
Shares shall, upon notification of the amount due, pay to the Company in cash or
by check amounts necessary to satisfy any applicable federal, state and local
tax withholding requirements. If the participant fails to pay the amount
demanded, the Company or the Employer may withhold that amount from other
amounts payable to the participant, including salary, subject to applicable law.
With the consent of the Board of Directors, a participant may satisfy this
obligation, in whole or in part, by instructing the Company to withhold from any
shares to be issued or by delivering to the Company other shares of Common
Stock; provided, however, that the number of shares so delivered or withheld
shall not exceed the minimum amount necessary to satisfy the required
withholding obligation.

9.6 Effect on Shares Available. The payment of a Performance-Based
Award in cash shall not reduce the number of shares of Common Stock reserved for
issuance under the Plan. The number of shares of Common Stock reserved for
issuance under the Plan shall be reduced by the number of shares issued upon
payment of an award, less the number of shares delivered or withheld to satisfy
withholding obligations.

10. Changes in Capital Structure.

10.1 Stock Splits, Stock Dividends. If the outstanding Common Stock of
the Company is hereafter increased or decreased or changed into or exchanged for
a different number or kind of shares or other securities of the Company by
reason of any stock split, combination of shares, dividend payable in shares,
recapitalization or reclassification, appropriate adjustment shall be made by
the Board of Directors in the number and kind of shares available for grants
under the Plan and in all other share amounts set forth in the Plan. In
addition, the Board of Directors shall make appropriate adjustment in the number
and kind of shares as to which outstanding options, or portions thereof then
unexercised, shall be exercisable, so that the optionee's proportionate interest
before and after the occurrence of the event is maintained. Notwithstanding the
foregoing, the Board of Directors shall have no obligation to effect any
adjustment that would or might result in the issuance of fractional shares, and
any fractional shares resulting from any adjustment may be disregarded or
provided for in any manner determined by the Board of Directors. Any such
adjustments made by the Board of Directors shall be conclusive.

10.2 Mergers, Reorganizations, Etc. In the event of a merger,
consolidation, plan of exchange, acquisition of property or stock, split-up,
split-off, spin-off, reorganization or liquidation to which the Company is a
party, any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all, or substantially all, of the assets of
the Company, or the transfer by one or more shareholders, in one transfer or
several related transfers, of 50% of more of the Common Stock outstanding on the
date of such transfer (or the first of such related transfers) to persons, other
than wholly-owned subsidiaries or family trusts, who were not shareholders of
the Company prior to the first such transfer (each, a "Transaction"), the Board
of Directors shall, in its sole discretion and to the extent possible under the
structure of the Transaction, select one of the following alternatives for
treating outstanding options under the Plan prior to the consummation of the
Transaction:

10.2-1 Outstanding options shall remain in effect in
accordance with their terms.

10.2-2 Outstanding options shall be converted into options to
purchase stock in one or more of the corporations, including the Company, that
are the surviving or acquiring corporations in the Transaction. The amount, type
of securities subject thereto and exercise price of the converted options shall
be determined by the Board of Directors of the Company, taking into account the
relative values of the companies involved in the Transaction and the exchange
rate, if any, used in determining shares of the surviving corporation(s) to be
held by holders of shares of the Company following the Transaction. Unless
otherwise determined by the Board of Directors, the converted options shall be
vested only to the extent that the vesting requirements relating to options
granted hereunder have been satisfied.

10.2-3 The Board of Directors shall provide a period of at
least 10 days before the completion of the Transaction during which outstanding
options may be exercised to the extent then exercisable, and upon the expiration

of that period, all unexercised options shall immediately terminate. The Board
of Directors may, in its sole discretion, accelerate the exercisability of
options so that they are exercisable in full during that period.

10.3 Dissolution of the Company. In the event of the dissolution of the
Company, options shall be treated in accordance with Section 10.2-3.

10.4 Rights Issued by Another Corporation. The Board of Directors may
also grant options and stock bonuses and Performance-Based Awards and issue
restricted stock under the Plan with terms, conditions and provisions that vary
from those specified in the Plan, provided that any such awards are granted in
substitution for, or in connection with the assumption of, existing options,
stock bonuses, Performance-Based Awards and restricted stock granted, awarded or
issued by another corporation and assumed or otherwise agreed to be provided for
by the Company pursuant to or by reason of a Transaction.

11. Amendment of the Plan. The Board of Directors may at any time modify or
amend the Plan in any respect. Except as provided in Section 10, however, no
change in an award already granted shall be made without the written consent of
the holder of the award if the change would adversely affect the holder.

12. Approvals. The Company's obligations under the Plan are subject to the
approval of state and federal authorities or agencies with jurisdiction in the
matter. The Company will use its best efforts to take steps required by state or
federal law or applicable regulations, including rules and regulations of the
Securities and Exchange Commission and any stock exchange on which the Company's
shares may then be listed, in connection with the grants under the Plan. The
foregoing notwithstanding, the Company shall not be obligated to issue or
deliver Common Stock under the Plan if such issuance or delivery would violate
state or federal securities laws. Unless the Company determines, with advice of
counsel that such legend is not necessary, certificates representing all shares
of Common Stock issued in connection with the Plan will contain a legend
indicating that such shares of Common Stock are "restricted securities," as
defined under Rule 144 promulgated under the Securities Act of 1933, as amended,
and that such shares may not be transferred unless such transfer is registered
under the Securities Act and governing state securities laws or exempt from the
registration requirements of the same.

13. Employment and Service Rights. Nothing in the Plan or any award pursuant to
the Plan shall (i) confer upon any employee any right to be continued in the
employment of an Employer or interfere in any way with the Employer's right to
terminate the employee's employment at will at any time, for any reason, with or
without cause, or to decrease the employee's compensation or benefits, or (ii)
confer upon any person engaged by an Employer any right to be retained or
employed by the Employer or to the continuation, extension, renewal or
modification of any compensation, contract or arrangement with or by the
Employer.

14. Rights as a Shareholder. The recipient of any award under the Plan shall
have no rights as a shareholder with respect to any shares of Common Stock until
the date the recipient becomes the holder of record of those shares. Except as
otherwise expressly provided in the Plan, no adjustment shall be made for
dividends or other rights for which the record date occurs before the date the
recipient becomes the holder of record.

Approved by Board of Directors subject to stockholder approval: January 2005.

Approved by stockholders and adopted: [__________________]