<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / 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 Section 240.14a-12
Venturi Technologies, 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:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / 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:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
VENTURI TECHNOLOGIES, INC.
6295 EAST 56TH AVENUE
COMMERCE CITY, COLORADO 80022
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MEETING DATE: JUNE 22, 2000
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders
(the "Annual Meeting") of Venturi Technologies, Inc. (the "Company") to be held
on Thursday, June 22, 2000 at the Adams Mark Hotel, 2929 Briarpark Drive,
Houston, Texas 77042, commencing at 2:00 p.m. Central Daylight Time to consider
and act upon the following matters:
1. To elect five directors to the Board of Directors to serve
until the next annual meeting of shareholders or until their
respective successors are elected and qualified;
2. To approve an amendment to the Company's Articles of
Incorporation to increase the number of shares of capital
stock authorized by the Company from 27,000,000 shares of
common stock and 5,000,000 shares of preferred stock to
50,000,000 shares of common stock and 7,000,000 shares of
preferred stock;
3. To approve the adoption of the Company's 2000 Stock Incentive
Plan for employees and consultants, and to allocate and
reserve 1,750,000 shares of the Company's common stock for
issuance pursuant to options granted under the Plan;
4. To ratify the appointment of Child & Company as independent
auditors of the Company for the fiscal year ending December
31, 2000; and
5. To transact such other business as may properly come before
the Meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this notice.
The Board of Directors has fixed the close of business on May 31, 2000,
as the record date for the determination of shareholders entitled to vote at the
Annual Meeting or any adjournments thereof, and only record holders of voting
stock at the close of business on that day will be entitled to vote. At the
record date, the Company had the following voting securities outstanding:
<TABLE>
<CAPTION>
Number of Number of
Voting Securities Shares Outstanding Votes
----------------- ------------------ ----------
<S> <C> <C>
Common stock: 13,169,020 shares 13,169,020
Series A Preferred Stock: 64,410 shares 70,438
Series D Preferred Stock: 2,303,738 shares 4,607,476
Series F Preferred Stock: 250,000 shares 1,250,000
</TABLE>
Shareholders who do not plan to attend the Annual Meeting are urged to
read the enclosed proxy statement and to fill in, date, and sign the enclosed
proxy card and return it to the Company in the enclosed envelope.
By Order of the Board of Directors,
Randy K. Johnson
Secretary and General Counsel
June 7, 2000
Salt Lake City, Utah
<PAGE>
THIS PROXY STATEMENT AND THE ACCOMPANYING MATERIALS ARE SOLELY FOR THE
INFORMATION OF PRESENT SHAREHOLDERS OF THE COMPANY. NO ONE SHOULD BUY OR SELL
ANY SECURITY IN RELIANCE ON ANY STATEMENT HEREIN. THIS PROXY STATEMENT AND THE
ACCOMPANYING MATERIALS ARE NEITHER AN OFFER TO BUY OR SELL, NOR A SOLICITATION
OF OFFERS TO BUY OR SELL ANY SECURITY.
VENTURI TECHNOLOGIES, INC.
6295 EAST 56TH AVENUE
COMMERCE CITY, COLORADO 80022
TO OUR SHAREHOLDERS:
The Annual Meeting of the Shareholders of Venturi Technologies, Inc., a
Nevada corporation (the "Company"), will be held at the Adams Mark Hotel, 2929
Briarpark Drive, Houston, Texas 77042, commencing at 2:00 p.m. Central Daylight
Time, on June 22, 2000, to consider and vote on the following matters described
in this notice and the accompanying Proxy Statement:
1. To elect five directors to the Board of Directors to serve
until the next annual meeting of shareholders or until their
respective successors are elected and qualified;
2. To approve an amendment to the Company's Articles of
Incorporation to increase the number of shares of capital
stock authorized by the Company from 27,000,000 shares of
common stock and 5,000,000 shares of preferred stock to
50,000,000 shares of common stock and 7,000,000 shares of
preferred stock;
3. To approve the adoption of the Company's 2000 Stock Incentive
Plan for employees and consultants, and to allocate and
reserve 1,750,000 shares of the Company's common stock for
issuance pursuant to options granted under the Plan;
4. To ratify the appointment of Child & Company as independent
auditors of the Company for the fiscal year ending December
31, 2000; and
5. To transact such other business as may properly come before
the Meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this notice.
The Board of Directors has fixed the close of business on May 31, 2000,
as the record date for the determination of shareholders entitled to vote at the
Annual Meeting or any adjournments thereof, and only record holders of voting
stock at the close of business on that day will be entitled to vote. At the
record date, the Company had the following voting securities outstanding:
<TABLE>
<CAPTION>
Number of Number of
Voting Securities Shares Outstanding Votes
----------------- ------------------ -----------
<S> <C> <C>
Common stock: 13,169,020 shares 13,169,020
Series A Preferred Stock: 64,410 shares 70,438
Series D Preferred Stock: 2,303,738 shares 4,607,476
Series F Preferred Stock: 250,000 shares 1,250,000
</TABLE>
-1-
<PAGE>
VENTURI TECHNOLOGIES, INC.
6295 EAST 56TH AVENUE
COMMERCE CITY, COLORADO 80022
----------
PROXY STATEMENT
----------
ANNUAL MEETING OF SHAREHOLDERS
MEETING DATE: JUNE 22, 2000
This Proxy Statement is being sent on or about June 7, 2000 in
connection with the solicitation of proxies by the Board of Directors of Venturi
Technologies, Inc., a Nevada corporation (the "Company" or "Venturi"). The
proxies are for use at the 2000 Annual Meeting of the Shareholders of the
Company, which will be held at the Adams Mark Hotel, 2929 Briarpark Drive,
Houston, Texas 77042, on June 22, 2000, commencing at 2:00 p.m. Central Daylight
Time, and at any meetings held upon adjournment thereof (the "Annual Meeting").
The record date for the Annual Meeting is the close of business on May 31, 2000
(the "Record Date"). Only holders of record of the Company's common stock and
voting preferred stock on the Record Date are entitled to notice of the Annual
Meeting and to vote at the Annual Meeting.
A proxy card is enclosed. Whether or not you plan to attend the Annual
Meeting in person, please mark, date, sign and return to the Company the
enclosed proxy card as promptly as possible to ensure that your shares will be
voted at the Annual Meeting. Any shareholder who returns a proxy has the power
to revoke it at any time prior to its effective use by filing with the Secretary
of the Company an instrument revoking it or a duly executed proxy bearing a
later date, or by attending the Annual Meeting and voting in person. Unless
contrary instructions are given, any such proxy, if not revoked, will be voted
at the Annual Meeting for the five nominees for election as directors as set
forth in this Proxy Statement; for the amendment to the Company's Articles of
Incorporation to increase the number of shares of capital stock authorized by
the Company from 27,000,000 shares of common stock and 5,000,000 shares of
preferred stock to 50,000,000 shares of common stock and 7,000,000 shares of
preferred stock; for the adoption of a stock option plan for employees and
consultants to be known as the 2000 Stock Incentive Plan and the allocation of
1,750,000 shares of the Company's common stock for issuance pursuant to options
granted under the 2000 Stock Incentive Plan; for the proposal to ratify the
appointment of Child & Company as the independent auditors of the Company for
the fiscal year ending December 31, 2000; and as recommended by the Board of
Directors, in its discretion, with regard to all other matters which may
properly come before the Annual Meeting. The Company does not currently know of
any such other matters.
At the Record Date there were 13,169,020 shares of the Company's
common stock outstanding, each of which is entitled to one vote on any matter
that may be presented for consideration and action by the shareholders at the
Annual Meeting. Also at the Record Date there were 64,410 shares of Series A
Preferred Stock issued and outstanding, convertible into 70,438 shares of
common stock, each of which is entitled to one vote on any matter that may be
presented for consideration and action by the shareholders at the Annual
Meeting. Also at the Record Date there were 2,303,738 shares of Series D
Preferred Stock issued and outstanding, each of which is entitled to two
votes on any matter that may be presented for consideration and action by the
shareholders at the Annual Meeting, other than the election of directors.
With respect to the election of directors, the holders of Series D Preferred
Stock, voting together as a separate class, are entitled to elect 20% of the
directors serving on the Board of Directors. Since the Board will consist of
five seats, the holders of Series D Preferred Stock, voting as a separate
class, have the right to elect one director. Once that director is elected,
the holders of Series D Preferred Stock do not participate in the voting on
other nominees for the Board. As of the Record Date there were 250,000 shares
of Series F Preferred Stock issued and outstanding, convertible into a total
of 1,250,000 shares of common stock, each of which is entitled to one vote on
any matter that may be presented for consideration and action by the
shareholders at the Annual Meeting.
The presence, either in person or by proxy, of persons entitled to vote
a majority of the Company's outstanding voting stock is necessary to constitute
a quorum for the transaction of business at the Annual Meeting. Abstentions and
broker non-votes are counted for purposes of determining a quorum, but are not
considered as having voted for purposes of determining the outcome of a vote.
Except as set forth above, no other voting securities of the Company were
outstanding at the Record Date.
In order for action to be taken on any matter, it must receive a
majority of the votes present and voting in person or by proxy except the
election of directors. Directors may be elected by a plurality vote. The four
nominees for director receiving the highest number of votes of all voting stock
except the Series D Preferred Stock at the Annual Meeting will be elected. The
one nominee for director receiving the highest number of votes of Series D
Preferred Stock at the Annual Meeting will also be elected. Unless instructed
otherwise, the shares represented by proxies to management will be voted for the
named nominees.
The cost of preparing, assembling, printing and mailing this Proxy
Statement and the accompanying form of proxy, and the cost of soliciting proxies
relating to the Annual Meeting, will be borne by the Company. The Company may
request banks and brokers to solicit their customers who
-2-
<PAGE>
beneficially own Common Stock listed of record in names of nominees, and will
reimburse such banks and brokers for their reasonable out-of-pocket expenses for
such solicitations. The solicitation of proxies by mail may be supplemented by
telephone, telegram and personal solicitation by officers, directors and regular
employees of the Company, but no additional compensation will be paid to such
individuals.
PROPOSAL NO. 1: ELECTION OF DIRECTORS
The Board of Directors of the Company consists of five members. The
holders of Series D Preferred Stock, voting separately as a class, have the
right to elect 20% of the total number of directors. Consequently, the holders
of Series D Preferred Stock are entitled to elect one director and the holders
of all of the other voting stock of the Company, voting together, are entitled
to elect the remaining four directors. The five persons named below have been
nominated to stand for election as directors of the Company at the Meeting to
serve for the coming year or until such time as their successors shall be
elected and qualified. Four of the individuals have been nominated by management
to be voted upon by the holders of common stock, Series A Preferred Stock,
Series D Preferred Stock and Series F Preferred Stock; and one of the
individuals has been nominated by the holders of Series D Preferred Stock to be
voted upon only by the holders of Series D Preferred Stock. The Board of
Directors recommends that the shareholders vote for the nominees listed below.
All of the nominees are currently members of the Board, having been
elected on March 9, 2000. The Company expects that all of the nominees will be
able to serve as directors. If any nominee should become unavailable, however,
it is intended that the proxy holders will vote for a substitute designated by
management. No family relationships exist among the members of the Board of
Directors.
The name and certain information regarding each nominee is set forth
below:
<TABLE>
<CAPTION>
NAME AGE DIRECTOR SINCE POSITION
---- --- -------------- --------
NOMINATED BY MANAGEMENT:
<S> <C> <C> <C>
Bruce E. Ranck 51 March 2000 Chairman of the Board and director
Michael F. Dougherty 46 March 2000 President, Chief Executive Officer and director
Mitchell J. Martin 44 March 2000 Chief Operating Officer and director
Daniel Dornier 38 March 2000 Director
NOMINATED BY HOLDERS OF SERIES D PREFERRED STOCK:
Stuart W. Thorn 44 March 2000 Director
</TABLE>
BRUCE E. RANCK has served as Chairman of the board of directors of
Venturi since March 9, 2000. Mr. Ranck is managing partner of True Blue
Partners, an investment partnership located in Houston, Texas. From 1995 to 1999
Mr. Ranck was President and Chief Executive Officer of Browning Ferris
Industries, Inc. (BFI), a worldwide leader in the waste industry, having served
as President and Chief Operating Officer of BFI since 1991, and as Executive
Vice President from 1989 to 1991. Prior to 1989 Mr. Ranck was Regional Vice
President of BFI. BFI was an early and successful pioneer in the business
strategy of consolidating a highly fragmented service industry through strategic
acquisitions.
MICHAEL F. DOUGHERTY has served as Chief Executive Officer of Venturi
since February 22, 2000, and as President and Chief Executive Officer since May
21, 2000. For 20 years prior to joining Venturi, Mr. Dougherty was employed in
management capacities by BFI, and Allied Waste Industries following its
acquisition of BFI. Most recently, Mr. Dougherty was District Manager for the
Eastern Pennsylvania District of Allied Waste Industries and Area Vice-President
of BFI with responsibilities for a seven state area. Mr. Dougherty received a BS
degree in accounting from Mount Saint Mary's College in Emmitsburg, Maryland.
MITCHELL J. MARTIN has served as a director and as Vice President of
Venturi since March 9, 2000. Effective May 21, 2000, Mr. Martin was named Chief
Operating Officer of the Company. In partnership with Lloyd E. Peterman, Mr.
Martin founded Martin & Peterman, Inc. ("MPI"), a professional carpet cleaning
services company recently acquired by Venturi. Prior to its acquisition by
Venturi, MPI had operations in seven states, generating annual revenue in excess
of $11 million. Mr. Martin is one of approximately 200 IICRC Senior Certified
Carpet Inspectors nationwide. This certification is an industry acknowledgment
of expertise in the carpet cleaning and restoration area. Mr. Martin attended
the University of Pittsburgh.
-3-
<PAGE>
DANIEL DORNIER has served as a director of Venturi since March 9, 2000.
Mr. Dornier is a Managing Director and Partner of Greenwich AG, a German Venture
Capital Investment Company. Since 1995 Mr. Dornier has managed investment
portfolios for high net worth individuals in Europe. Between 1993 and 1995 Mr.
Dornier was a private investment manager for various family owned businesses,
and prior to that he was an investment banker at SBC Warburg, Dillon, Reed. Mr.
Dornier obtained an undergraduate degree in Business Administration from the
University of Nuertingen, Germany, and an MBA from City University in Bellevue,
Washington.
STUART W. THORN has served as a director of Venturi since March 9,
2000. Mr. Thorn is the President and Chief Operating Officer of Beaulieu Group,
LLC, an international leader in the manufacture of carpets and rugs. From 1995
to 1997, Mr. Thorn was Chief Financial Officer for Beaulieu Group, LLC. Prior to
Joining Beaulieu Group, Mr. Thorn was Vice President of Finance for the
International Grocery Products Division of the Campbell Soup Company. Mr. Thorn
received a Bachelor and a Master's degree in Business Administration from the
Wharton School of Business of the University of Pennsylvania.
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Bylaws of Venturi provide for a Board of Directors of between
one and nine members. Prior to March 9, 2000, the board of directors
consisted of three members, Gaylord M. Karren, John M. Hopkins and James
K. Stone. Each of those members attended all board meetings held during
1999. On March 9, 2000, Mr. Stone resigned from the board and Messrs.
Bruce E. Ranck, Michael F. Dougherty, Mitchell J. Martin, Stuart W. Thorn
and Daniel Dornier were appointed to fill the vacancy created by Mr.
Stone's resignation and the newly created vacancies.
On May 21, 2000, Messrs. Karren and Hopkins resigned from the Board in
order to pursue other business interests, leaving a current Board consisting of
five members. Two of the Company's directors are executive officers and
employees of the Company. During 1999 the Company did not have an Audit
Committee or a Compensation Committee of the board. Effective as of March 9,
2000, an Audit Committee and a Compensation Committee were created.
The current members of the Audit Committee are Messrs. Thorn (chair),
Ranck and Dornier. The Audit Committee is responsible for recommending an
accounting firm to serve as the Company's independent auditors, reviewing the
annual audit of the Company, reviewing audit and any non-audit fees paid to the
Company's independent auditors, reviewing the scope and results of internal
audit activities and reviewing compliance with the Company's accounting policies
and regulatory requirements. The Audit Committee reports its findings and
recommendations to the board for appropriate action.
The current members of the Compensation Committee are Messrs. Ranck
(chair) and Thorn. The Compensation Committee supervises the Company's
compensation policies, administers incentive plans, reviews officers' salaries
and bonuses, approves significant changes in employee benefits and recommends to
the board such other forms of compensation as it deems appropriate.
EXECUTIVE COMPENSATION
During the first few months of 2000, the Company has undergone a
major change in management at both the director and officer level.
Throughout 1999, and before, the Company had three directors: Gaylord M.
Karren, John M. Hopkins and James K. Stone. Mr. Karren was Chairman
of the Board and Chief Executive Officer, Mr. Hopkins was President, Mr.
Stone was Vice President--Operations, and Randy K. Johnson was Secretary
and General Counsel.
On February 22, 2000, Michael F. Dougherty joined the Company as Chief
Executive Officer pursuant to the terms of a three year written Employment
Agreement. The Employment Agreement provides that Mr. Dougherty will receive an
annual base salary of $200,000 and may receive annual bonuses up to 60% of his
base salary, depending upon whether the Company achieves certain financial
performance criteria to be set by the board. Mr. Dougherty was also granted a
ten year incentive stock option to purchase up to 850,000 shares of the
Company's common stock for $2.40 per share, which option vests in increments of
150,000 shares per year, 200,000 shares when the Company achieves three
consecutive months of break-even and 200,000 shares when the Company achieves
three consecutive months of greater than $100,000 earnings before taxes,
depreciation and interest ("EBITDA"). Mr. Dougherty's employment may be
terminated at any time with or without cause, provided that if terminated
without cause the Company will pay to Mr. Dougherty a severance payment equal to
one year's then base salary plus the previous year's incentive bonus.
On March 9, 2000, James K. Stone resigned as a director and Bruce E.
Ranck, Michael F. Dougherty, Stuart W. Thorn, Daniel Dornier and Mitchell J.
Martin were appointed as directors, along with Messrs. Karren and Hopkins. Mr.
Ranck was appointed Chairman of the Board. For his services as Chairman of the
Board, Mr. Ranck was granted a ten year non-qualified stock option to purchase
212,000 shares of the Company's common stock for $2.40 per share. The option
vests in increments of 37,334 shares per year, 50,000 shares when the Company
achieves three consecutive months of break-even, and 50,000 shares when the
Company achieves three consecutive months of EBITDA in excess of $100,000 per
month.
-4-
<PAGE>
On March 27, 2000, Stephen S. Abate joined the Company as Chief
Financial Officer. Mr. Abate receives an annual base salary of $130,000, and is
eligible for an annual incentive bonus up to 40% of his base salary if certain
financial performance criteria are met. Mr. Abate was also granted a ten year
incentive stock option to purchase up to 100,000 shares of the Company's common
stock for $2.40 per share, which option vests in increments of 17,650 shares per
year, 23,530 shares when the Company achieves three consecutive months of
break-even and 223,530 shares when the Company achieves three consecutive months
of greater than $100,000 EBITDA. Mr. Abate's employment may be terminated at any
time with or without cause, provided that if terminated without cause the
Company will pay to Mr. Abate a severance payment equal to one year's then base
salary plus the previous year's incentive bonus.
On May 5, 2000, the Company entered into an agreement with Messrs.
Karren and Hopkins, pursuant to which (a) Messrs. Karren and Hopkins agreed to
resign as officers and directors of the Company effective May 21, 2000, (b)
Messrs. Karren and Hopkins agreed to transfer to the Company a total of
1,200,000 of their shares of common stock in the Company in order to assist the
Company in payment of unpaid state and federal payroll taxes, (c) the Company
entered into separate nine month consulting agreements with Messrs. Karren and
Hopkins pursuant to which the Company will pay to each of them consulting fees
of $14,583 per month and grant to each of them a five year non-qualified stock
option to purchase 150,000 shares of the Company's common stock for $0.01 per
share, and (d) Messrs. Karren and Hopkins each entered into a confidentiality
and four year non-compete agreement in favor of the Company.
On May 10, 2000, the Company sold the restoration portion of its
business to Mr. Stone, and in connection with the sale Mr. Stone resigned as an
officer of the Company and entered into a confidentiality and four year
non-compete agreement in favor of the Company.
The following table sets forth information as to the compensation paid to
Venturi's Chief Executive Officer, President, Vice President--Operations and
Secretary for the three years ended December 31, 1999.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term Compensation
-----------------------------------
Annual Compensation Awards Payouts
------------------------------------------------ ------------------ -----------------
Other
Annual Restricted Securities Long-term All Other
Name and Compensa- Stock Underlying Incentive Compensa-
Principal Position Year Salary($) Bonus($) tion($) Awards($) Options/SARs(#) Payout($) tion($)
------------------ ---- ---------- -------- ------- --------- ------------ --------- --------
(1)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gaylord M. Karren, 1999 20,700 0 130,038 0 100,000 0 0
Chairman, CEO and 1998 20,000 0 90,000 0 104,000 0 0
Director 1997 0 0 90,000 0 0 0 0
(prior to 2000)
John M. Hopkins, 1999 20,697 0 126,406 0 100,000 0 0
President and Director 1998 20,000 0 90,000 0 104,000 0 0
(prior to 2000) 1997 0 0 90,000 0 0 0 0
James K. Stone, VP-- 1999 63,750 0 0 0 250,000 0 0
Operations, Director 1998 48,000 0 0 0 2,000 0 0
(2) 1997 0 0 0 0 0 0 0
Randy K. Johnson, 1999 62,500 (3) 0 77,831(3) 0 200,000 0 0
Secretary and General 1998 0 0 0 0 0 0 0
Counsel (3) 1997 0 0 0 0 0 0 0
</TABLE>
(1) During the previous three fiscal years, the Company paid management
fees to Messrs. Karren and Hopkins, or to entities owned principally by
them, in the approximate amounts indicated in the table. These fees
were for services rendered by the officers.
(2) Mr. Stone was an Executive Vice President and a director of the Company
until March 9, 2000, at which time he resigned as a director and was
appointed as Vice President--Restoration.
(3) On May 1, 1999, the Company entered into a three year employment
agreement with Randy K. Johnson, Secretary and General Counsel of the
Company, pursuant to which Mr. Johnson was to devote at least half of
his working time to the Company, and be paid half salary, until August
1, 1999, at which time he would devote full time to the company at full
salary. Pursuant to the Agreement, the Company will pay to Mr. Johnson
an annual salary of $125,000. In connection with the Agreement, the
Company also granted to Mr. Johnson a ten year
-5-
<PAGE>
non-qualified stock option to purchase 200,000 shares of the Company's
common stock for $0.01 per share. The option fully vested on December
31, 1999. Mr. Johnson's employment may be terminated at any time with
or without cause, provided that if terminated without cause the Company
will pay to Mr. Johnson severance payments equal to six months base
salary. Prior to becoming employed by Venturi, Mr. Johnson provided
legal services to Venturi as an attorney in private practice. During
the year ended December 31, 1999, Mr. Johnson was paid $62,500 in
salary and $77,831 for legal services as an outside attorney.
OPTION/SAR GRANTS IN 1999
The following table sets forth information concerning individual grants
of stock options to the Named Executive Officers during the fiscal year ended
December 31, 1999.
<TABLE>
<CAPTION>
Number of Percent of total Exercise or Expiration
Securities options/SARs Base Date
Underlying granted to Price
Options/SARs employees in
granted fiscal
Name year
----
<S> <C> <C> <C> <C>
Gaylord M. Karren (1) 100,000 9.8% $2.40 1/04
John M. Hopkins (2) 100,000 9.8% $2.40 1/04
James K. Stone (3) 250,000 24.5% $2.40 1/05
Randy K. Johnson (4) 200,000 19.6% $0.01 4/09
</TABLE>
(1) On January 4, 1999, two separate stock options were granted to Gaylord M.
Karren, Chairman of the Board and Chief Executive Officer of the Company,
each entitling the holder to purchase 50,000 shares of common stock for
$2.40 per share. One of the options for 50,000 shares vested immediately
upon grant, and the other option for 50,000 vests one year from the date of
grant.
(2) On January 4, 1999, two separate stock options were granted to John M.
Hopkins, President and a Director of the Company, each entitling the holder
to purchase 50,000 shares of common stock for $2.40 per share, to vest one
year from the date of grant. One of the options for 50,000 shares vested
immediately upon grant, and the other option for 50,000 vests one year from
the date of grant.
(3) On January 4, 1999, a ten year stock option was granted to James K. Stone,
Executive Vice President and a Director of the Company, to purchase 250,000
shares of common stock for $2.40 per share, to vest one year from the date
of grant.
(4) On August 1, 1999, a ten year stock option was granted to Randy K. Johnson
to purchase 200,000 shares of common stock for $0.01 per share, which fully
vested on December 31, 1999.
AGGREGATED OPTION/SAR EXERCISES IN 1999
AND DECEMBER 31, 1999 OPTION/SAR VALUES
The following table sets forth information concerning the exercise of options by
the Named Executive Officers during the fiscal year ended December 31, 1999, as
well as the aggregate number and value of unexercised options held by the Named
Executive Officers on December 31, 1999.
<TABLE>
<CAPTION>
Number of Securities
Underlying Value of Unexercised
Unexercised Options/SARs In-the-Money Options/SARs at
at December 31, 1999(#) December 31, 1999($) (1)
-------------------------------- --------------------------------
Shares Acquired Value
Name On Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
---- --------------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Gaylord M. Karren -0- -0- 154,000 50,000 $321,710 $ 23,750
John M. Hopkins -0- -0- 154,000 50,000 $321,710 $ 23,750
James K. Stone -0- -0- 2,000 250,000 $ 930 $118,750
Randy K. Johnsom -0- -0- 200,000 -0- $573,000 $ 0
</TABLE>
-6-
<PAGE>
(1) Calculated on the basis of the closing price for the Company's common
stock on the over-the-counter market (OTC-BB) for December 31, 1999 of
$2.875 per share, minus the per share exercise price multiplied by the
number of shares underlying the option.
DIRECTORS' COMPENSATION
No Compensation has been paid to any directors for service in such
capacity in the past, and no such compensation is presently payable to
directors, but directors may be reimbursed for certain expenses in connection
with attendance at Board and committee meetings. At such time as the Board of
Directors deems appropriate, the Company intends to consider adoption of an
appropriate policy to compensate non-employee directors, to attract and retain
the services of qualified non-employee directors.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information set forth herein describes certain transactions between
the Company and certain affiliated parties. Future transactions, if any, will be
approved by a majority of the disinterested members of the Company and will be
on terms no less favorable to the Company than those that could be obtained from
unaffiliated parties.
Until May 21, 2000, the Company had an outstanding loan from Gaylord M.
Karren, the Company's former Chairman and Chief Executive Officer. On May 21,
2000, the loan was repaid in full. The loan did not bear interest, was payable
on demand, and had no scheduled repayment terms with the exception of the
payment of $1,965 per month to Mr. Karren to enable him to repay the source of
the loan funds, a second mortgage on his personal residence.
The Company also had obtained loans from James K. Stone, a former
director and Vice President of the Company, with unpaid principal balances as of
May 1, 2000 of $273,639, which loans bore interest ranging from 9.4% to 11.5%.
The Company's obligations on the loans from Mr. Stone were transferred to, and
assumed by, Venturi Flood & Fire Restoration, Inc. on May 1, 2000. As part of
the sale by the Company of the restoration portion of its business to Mr. Stone
effective May 1, 2000, Mr. Stone released the Company from any further
obligations with respect to his loans.
Randy K. Johnson joined Venturi full time from the private practice of
law on August 1, 1999. During the year ended December 31, 1999, Venturi paid Mr.
Johnson a total of $77,831 for legal services rendered to Venturi prior to
August 1, 1999. Venturi still owes Mr. Johnson $21,760.25 for legal services
rendered prior to August 1, 1999.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers, directors and greater than 10% shareholders to
file reports of ownership (on Form 3) and periodic changes in ownership (on
Forms 4 and 5) of Company securities with the Securities and Exchange
Commission. Based solely on its review of copies of such forms and such written
representations regarding compliance with such filing requirements as were
received from its executive officers, directors and greater than 10%
shareholders (if any), the Company believes that all such Section 16(a) filing
requirements were complied with during 1999, except as described below in this
paragraph. Randy K. Johnson became the Secretary of the Company on May 1, 2000,
and failed to timely file an initial statement of beneficial ownership. He filed
a Form 3 statement of beneficial ownership on May 22, 2000. Michael F. Dougherty
became Chief Executive Officer of the Company on February 22, 2000, and failed
to timely file an initial statement of beneficial ownership. He filed a Form 3
statement of beneficial ownership on May 22, 2000. Stephen S. Abate became Chief
Financial Officer of the Company on March 27, 2000, and filed a Form 3 statement
of beneficial ownership on May 22, 2000. Bruce E. Ranck, Stuart W. Thorn, Daniel
Dornier and Mitchell J. Martin became directors of the Company on March 9, 2000,
and they failed to timely file initial statements of beneficial ownership.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth security ownership information of the
Company's common stock and Series D and Series F Preferred Stock (which are
convertible into shares of common stock and currently have voting rights as if
converted into common stock), as of May 25, 2000, for (i) each beneficial owner
of more than 5% of the outstanding common stock or Series A, Series D or Series
F Preferred Stock; (ii) each executive officer of the Company; (iii) each
director of the Company; and (iv) all directors and officers as a group. There
are no beneficial owners of Series A Preferred Stock who hold more than 5% of
that series of preferred stock. Series B Preferred Stock and Series C Preferred
Stock are omitted because the holders thereof have no voting rights.
-7-
<PAGE>
<TABLE>
<CAPTION>
Series D Series F
Common Stock Preferred Stock (2) Preferred Stock (3)
------------ ------------------- -------------------
Amount Percent Amount Percent Amount Percent
Name and Address of Beneficially of Beneficially of Beneficially of
Registered Owner(1) Owned Class(4) Owned Class(4) Owned Class(4)
------------------- ----- -------- ----- -------- ----- --------
<S> <C> <C> <C> <C> <C> <C>
5%SHAREHOLDERS
--------------
Beaulieu Group, LLC 1,000 (5) * 2,303,738 100.0% 0 *
Carl M. Bouckaert 219,654 (6) 1.6% 0(8) * 0 *
Marie T. Bouckaert 219,655 (7) 1.6% 0(8) * 0 *
Greenwich AG 1,775,223 (9) 11.9% 0 * 0 *
Rainer Bischoff 293,750(10) 2.2% 0 * 75,000 30.0%
Aspen Capital Resources LLC 1,383,333(11) 9.5% 0 * 0 *
BER Investments, Ltd. 391,666(12) 2.9% 0 * 100,000 40.0%
OFFICERS AND DIRECTORS
----------------------
Bruce E. Ranck 0(13) * 0 * 0(13) *
Michael F. Dougherty 0(14) * 0 * 0 *
Mitchell J. Martin 387,666(15) 2.9% 0 * 0 *
Stuart W. Thorn 0 * 0 * 0 *
Daniel Dornier 293,750(16) 2.2% 0 * 75,000 30.0%
Randy K. Johnson 200,000(17) 1.5% 0 * 0 *
Steven S. Abate 0(18) * 0 * 0 *
Executive Officers and
Directors as a Group (7 persons) 881,416 6.3% 0 * 75,000 30.0%
</TABLE>
--------------
* Less then 1%
(1) The address for Beaulieu Group, LLC and for Mr. and Mrs. Bouckaert is 1502
Coronet Drive, Dalton, Georgia 30720; the address for Greenwich AG and for
Dr. Rainer Bischoff is Neuer Wall 32, 20354 Hamburg, Germany; the address
for Aspen Capital Resources LLC is 8989 South Schofield Circle, Sandy, Utah
84093; the address for BER Investments, Ltd. is 2500 City West Blvd., Suite
1050, Houston, Texas 77042. The address for Messrs. Ranck, Dougherty,
Martin, Thorn, Dornier, Johnson and Abate is c/o Venturi Technologies,
Inc., 6295 East 56th Avenue, Commerce City, Colorado 80022.
(2) The Series D Preferred Stock is convertible into common stock at the
conversion ratio of two shares of common stock for each one share of Series
D Preferred Stock. The Series D Preferred Stock currently has voting rights
as if converted into common stock.
(3) The Series F Preferred Stock is convertible into common stock at the
conversion ratio of five shares of common stock for each one share of
Series F Preferred Stock. The Series F Preferred Stock currently has voting
rights as if converted into common stock.
(4) The percentages shown are based on the amount of outstanding securities of
the class or series indicated plus, for each shareholder, any securities
such shareholder has the right to acquire within sixty days pursuant to
options or warrants.
(5) Consists of a presently exercisable warrant to purchase common stock.
(6) Consists of 123,173 shares of common stock owned of record by Mr. Bouckaert
and an immediately exercisable warrant to purchase 96,481 shares of common
stock.
(7) Consists of 123,173 shares of common stock owned of record by Mrs.
Bouckaert and an immediately exercisable warrant to purchase 96,482 shares
of common stock.
(8) Mr. and Mrs. Bouckaert are the controlling owners of Beaulieu Group, LLC,
and Mr. Bouckaert is the Chairman and Chief Executive Officer of Beaulieu
Group, LLC.
(9) Consists of 1,685,469 shares of common stock owned of record by Greenwich
AG and an immediately exercisable warrant to purchase 89,754 shares of
common stock.
(10) Consists of a presently exercisable warrant to purchase common stock. In
addition, Dr. Bischoff is a managing director of Greenwich AG.
(11) Consists of 350,000 shares of common stock owned of record by Aspen Capital
Resource Partners, LLC and presently exercisable warrants to purchase
1,033,333 shares of common stock.
(12) Consists of a presently exercisable warrant to purchase common stock.
(13) Does not include an option to purchase 212,000 shares or common stock,
which will not vest within sixty days. Mr. Ranck is the managing partner of
BER Investments, Ltd.
(14) Does not include an option to purchase 850,000 shares of common stock,
which will not vest within sixty days.
(15) Includes 372,750 shares owned of record by Mr. Martin and 14,916 shares
representing Mr. Martin's pro-rata portion of shares held by various
partnerships of which Mr. Martin is a partner.
(16) Consists of a presently exercisable warrant to purchase common stock. In
addition, Mr. Dornier is a managing director of Greenwich AG.
(17) Consists of a presently exercisable option to purchase common stock.
(18) Does not include an option to purchase 100,000 shares of common stock,
which will not vest within sixty days.
-8-
<PAGE>
PROPOSAL NO. 2: PROPOSED APPROVAL OF AN AMENDMENT TO THE COMPANY'S
ARTICLES OF INCORPORATION TO INCREASE THE AMOUNT OF AUTHORIZED SHARES TO
50,000,000 SHARES OF COMMON STOCK AND 7,000,000 SHARES OF PREFERRED STOCK.
The Company currently has outstanding 13,169,020 shares of common stock and
3,408,993 shares of preferred stock, convertible into 7,670,759 shares of common
stock. In addition, the Company has issued or granted warrants to purchase a
total of 3,885,178 shares of common stock and options to purchase a total of
4,304,894 shares of common stock. Management foresees a likelihood of issuing
additional shares of common and preferred stock, and granting additional options
and warrants in order to raise capital that will be needed to fund continuing
operations and growth.
In view of the foregoing, management has deemed it necessary for the
Company to amend its Certificate of Incorporation to authorize the issuance of
additional shares of both common and preferred stock. On March 9, 2000, the
board of directors approved an amendment to the Company's Certificate of
Incorporation increasing the number of shares of common stock the Company is
authorized to issue from 27,000,000 to 50,000,000 shares and the number of
shares of preferred stock the Company is authorized to issue from 5,000,000 to
7,000,000 shares.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
PROPOSAL TO APPROVE THE AMENDMENT TO THE COMPANY'S CERTIFICATE OF
INCORPORATION TO INCREASE THE AUTHORIZED SHARES.
PROPOSAL NO. 3: PROPOSED APPROVAL OF THE ADOPTION OF A STOCK INCENTIVE
PLAN TO BE KNOWN AS THE 2000 STOCK INCENTIVE PLAN, AND TO ALLOCATE 1,750,000
SHARES OF COMMON STOCK TO THE PLAN.
On March 9, 2000, the Company's Board of Directors terminated the Dual
Stock Option Plan adopted by the Company in July 1997. As of the record date
options to purchase a total of 1,822,569 shares of common stock had been granted
under the Dual Stock Option Plan. Also on March 9, 2000 the board adopted,
subject to approval by the Company's shareholders, a stock incentive plan to be
known as the "Venturi Technologies, Inc. 2000 Stock Incentive Plan," and the
board agreed to reserve for issuance under the Plan a total of 1,750,000 shares
of the Company's common stock.
In connection with the management transition that occurred during
February and March 2000, the board granted a total of 1,462,000 options to
the following individuals. 1,162,000 of the options are intended to have been
issued under the Plan.
<TABLE>
<CAPTION>
Name Title No. Options
---- ----- -----------
<S> <C> <C>
Gaylord M. Karren Former Chairman and Chief 150,000
Executive Officer
John M. Hopkins Former President and Director 150,000
Bruce E. Ranck Chairman of the Board 212,000
Michael F. Dougherty Chief Executive Officer 850,000
Stephen S. Abate Chief Financial Officer 100,000
</TABLE>
The options granted to Messrs. Karren and Hopkins are five year
non-qualified options with an exercise price of $0.01 per share, that are
fully vested. These options were not granted as part of the Plan. The option
granted to Mr. Ranck is a ten year non-qualified option with an exercise
price of $2.40 per share that vests in increments of 37,334 shares per year,
50,000 shares at break-even, and 50,000 shares when the Company has three
consecutive months of earnings before interest, taxes, depreciation and
amortization ("EBITDA") in excess of $100,000. The option granted to Mr.
Dougherty is a ten year incentive stock option with an exercise price of
$2.40 per share that vests in increments of 150,000 shares per year, 200,000
shares at break-even, and 200,000 shares when the Company has three
consecutive months of EBITDA in excess of $100,000. The option granted to Mr.
Abate is a ten year incentive stock option with an exercise price of $2.40
per share that vests in increments of 17,650 shares per year, 23,530 shares
when the Company achieves three consecutive months of break-even and 223,530
shares when the Company achieves three consecutive months of greater than
$100,000 EBITDA. The options granted to Messrs. Ranck, Dougherty and Abate
are intended to be granted under the Plan.
The board believes that it is in the best interests of the Company to
attract and retain the services of experienced and knowledgeable executive
management, employees and consultants. The Plan is designed to provide an
incentive to officers and other key employees of the Company and its
subsidiaries and is intended to align the interests of these officers and other
employees with those of the Company's shareholders.
PLAN SUMMARY
The 2000 Stock Incentive Plan (the "Plan") was adopted by the board on
March 9, 2000, subject to shareholder approval. The Plan provides for the grant
of incentive stock options to employees and nonstatutory stock options and stock
purchase rights to employees, directors and consultants. A total of 1,750,000
shares of our common stock have been reserved for issuance under the Plan. The
board of directors may amend, modify or terminate the Plan at any time as long
as such amendment, modification or termination does not impair the rights of
plan participants previously granted options under the Plan. The Plan will
terminate March 9, 2010, unless terminated earlier by the board of directors.
The compensation committee of
-9-
<PAGE>
the board of directors administers the Plan and determines the terms of options
granted, including the exercise price, the number of shares subject to
individual option awards and the vesting period of such options.
INCENTIVE STOCK OPTIONS.
The terms of incentive stock options granted under the Plan are dictated in
large measure by the Internal Revenue Code of 1986, as amended. Incentive stock
options may only be granted to employees of the Company, and incentive stock
options will automatically terminate unless exercised within ninety days after
termination of employment. No employee may be granted incentive options to
purchase more than 200,000 shares. The exercise price under incentive stock
options cannot be lower than 100% of the fair market value of the common stock
on the date of grant and, in the case of incentive stock options granted to
holders of more than 10% of the Company's voting stock, not less than 110% of
such fair market value. The term of an incentive stock option cannot exceed 10
years, and the term of an incentive stock option granted to a holder of more
than 10% of the Company's voting stock cannot exceed five years. Stock purchase
rights may be issued either alone, in addition to, or in tandem with other
awards granted under the Plan and/or cash awards made outside of the Plan.
NONSTATUTORY STOCK OPTIONS.
Nonstatutory stock options may be granted under the Plan to employees,
directors and consultants of the Company. The board of directors and the
compensation committee of the board have broad discretion in the terms of
nonstatutory stock options under the Plan, including the exercise price, term,
vesting, etc.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
PROPOSAL TO ADOPT THE 2000 STOCK INCENTIVE PLAN AND TO RESERVE 1,750,000 SHARES
OF COMMON STOCK TO BE ISSUED UPON EXERCISE OF OPTIONS GRANTED UNDER THE PLAN.
PROPOSAL NO. 4: RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS
On March 9, 2000, the board unanimously approved, subject to ratification
by the Company's shareholders, the appointment of Child & Company, PC of Salt
Lake City, Utah as the Company's independent auditors for the Company and its
subsidiaries for the fiscal year ending December 31, 2000. Child & Company, PC
has served as the Company's independent auditors since 1997.
A representative of Child & Company, PC is expected to be present at the
Annual Meeting and will have the opportunity to make statements and to respond
to appropriate questions raised at the Annual Meeting.
THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE APPOINTMENT OF
CHILD & COMPANY, PC AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE YEAR ENDING
DECEMBER 31, 2000.
ANNUAL REPORT
A copy of the Company's Annual Report, including financial statements for
the years ended December 31, 1998 and 1999 is being mailed with this Proxy
Statement to shareholders of record on the Record Date.
INDEPENDENT AUDITORS
Child & Company, P.C. served as the Company's independent auditors for
1999. It is anticipated that a representative of Child & Company, P.C.
will be present at the Annual Meeting and will be available to respond
to appropriate questions.
SHAREHOLDER PROPOSALS
Shareholders who wish to include proposals for action at the Company's 2001
Annual Meeting of Shareholders in next year's proxy statement must, in addition
to other applicable requirements, cause their proposals to be received in
writing by the Company at its address set forth on the first page of this Proxy
Statement no later than January 1, 2001. Such proposals should be addressed to
the Company's Secretary and may be included in next year's proxy statement if
they comply with certain rules and regulations promulgated by the Securities and
Exchange Commission.
-10-
<PAGE>
OTHER MATTERS
PRESENTED BY MANAGEMENT
Management knows of no matters other than those listed in the attached
Notice of the Annual Meeting which are likely to be brought before the Annual
Meeting. However, if any other matters should properly come before the Annual
Meeting or any adjournment thereof, the persons named in the enclosed proxy will
vote all proxies given to them in accordance with their best judgment of such
matters.
PRESENTED BY SHAREHOLDERS
Pursuant to the Bylaws of the Company, only such business shall be
conducted, and only such proposals shall be acted upon, at an annual meeting of
shareholders as are properly brought before the meeting. For business to be
properly brought before an annual meeting by a shareholder, in addition to any
other applicable requirements, timely notice of the matter must be first given
to the Secretary of the Company. To be timely, written notice must be received
at the principal executive offices of the Company not less than 60 days nor more
than 120 days prior to the scheduled meeting; provided, however, that if less
than 70 days' notice or prior public disclosure of the date of the scheduled
meeting has been given to shareholders, then notice of the proposed business
matter must be received not later than 10 days after the mailing of notice of
the meeting or such public disclosure. Any notice to the Secretary must include
as to each matter the shareholder proposes to bring before the meeting: (a) a
brief description of the proposal desired to be brought before the meeting and
the reason for conducting such business at the annual meeting, (b) the name and
record address of the shareholder proposing such business and any other
shareholders known by such shareholder to be supporting such proposal, (c) the
class and number of shares of the Company which are beneficially owned by the
shareholder on the date of such shareholder notice and by other shareholders
known by such shareholder to be supporting such proposal on the date of such
shareholder notice, and (d) any financial interest of the shareholder in such
proposal.
Each shareholder is urged to complete, date, sign and promptly return the
enclosed proxy card. Any questions should be addressed to Randy K. Johnson,
Secretary of Venturi Technologies, Inc., 170 South Main Street, Suite 900, Salt
Lake City, Utah 84111; telephone (801) 575-5000; fax (801) 575-5006.
VENTURI TECHNOLOGIES, INC.
-------------------------------------
Randy K. Johnson
Secretary and General Counsel
June 7, 2000
Salt Lake City, Utah
-11-
<PAGE>
VENTURI TECHNOLOGIES, INC.
2000 STOCK INCENTIVE PLAN
(Incentive and Non-Statutory Options)
1. PURPOSES.
The purpose of this Plan is to provide incentives to attract, retain and
motivate eligible persons whose present and potential contributions are
important to the success of the Venturi Technologies, Inc., a Nevada corporation
(the "Company") and its Subsidiaries, by offering them an opportunity to
participate in the Company's future performance through awards of Options.
2. STOCK SUBJECT TO PLAN
The Company shall reserve 1,750,000 shares of its $0.001 par value common
stock (the "Shares") to be issued upon exercise of the options which may be
granted from time to time under this Plan. As it may from time to time
determine, the Board may authorize that the Shares may be comprised, in whole or
in part, of authorized but unissued shares of the common stock of the Company or
of issued shares which have been reacquired. If options granted under the Plan
terminate or expire before being exercised in whole or in part, the Shares
subject to those options which have not been issued may be the subject of
subsequent options granted under the Plan.
3. ADMINISTRATION OF THE PLAN
The Compensation Committee of the Board (hereinafter called the
"Committee") shall administer the Plan. Subject to the express provisions of the
Plan and guidelines which may be adopted from time to time by the Board, the
Committee shall have plenary authority in its discretion (a) to determine the
individuals to whom, and the time at which, options are granted, and the number
and purchase price of the Shares subject to each option; (b) to determine
whether the options granted shall be Incentive Stock Options within the meaning
of the Code, or Non-statutory Stock Options; (c) to interpret the Plan and
prescribe, amend and rescind rules and regulations relating to it; (d) to
determine the terms and provisions (and amendments thereof) of the respective
option agreements subject to Section 6 of the Plan, which need not be identical,
including, if the Committee shall determine that a particular option is to be an
Incentive Stock Option, such terms and provisions (and amendments thereof) as
the Committee deems necessary to provide for an Incentive Stock Option or to
conform to any change in any law, regulation, ruling or interpretation
applicable to Incentive Stock Options; and (e) to make any and all
determinations which the Committee deems necessary or advisable in administering
the Plan. The Committee's determination on the foregoing matters shall be
conclusive. No Member of the Committee shall be liable for any action taken or
decision made in good faith relating to the Plan or any award thereunder.
<PAGE>
4. PERSONS ELIGIBLE.
Incentive or Non-statutory Stock Options may be granted to employees
(including directors who are also employees) of the Company or its subsidiaries.
An employee may be granted more than one Option under this Plan. In making the
selection of employees eligible to be granted Options, and in determining the
form and amount of awards, the Committee shall consider any factors deemed
relevant, including the individual's functions, responsibilities, value of
services to the Company or its subsidiaries, and past and potential
contributions to the Company's or its subsidiaries' profitability and sound
growth. For this purpose, "employee" shall conform to the requirements of
Section 422 of the Code.
Non-statutory Stock Options may be granted to consultants, contractors and
advisors (including directors) of the Company or its subsidiaries, provided that
such consultants, contractors and advisors render bona fide services not in
connection with the offer and sale of securities in a capital-raising
transaction. A person may be granted more than one Option under this Plan.
The aggregate fair market value (determined as of the time the option is
granted) of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by an optionee during any calendar year (under
all incentive stock option plans of the Company or its subsidiaries) shall not
exceed $100,000.
5. CHANGES IN CAPITAL STRUCTURE
In the event of changes in the outstanding capital stock of the Company by
reason of any stock dividend, stock split or reverse split, reclassification,
recapitalization, merger, consolidation, reorganization or liquidation, the
Committee and/or the Board may make such adjustments in (a) the aggregate number
and class of shares available under the Plan; (b) the number and class of shares
to which optionees will thereafter be entitled upon exercise of their options;
and (c) the price which optionees shall be required to pay upon such exercise;
as it deems appropriate, and such determination shall be final, binding and
conclusive.
In the event of any merger of the Company (except with a subsidiary) or any
acquisition of 80 percent or more of its gross assets or stock, or any
reorganization or liquidation of the Company (an "Event"), the Board shall make
arrangements (the "Arrangements") which shall be binding upon the holders of
unexpired options then outstanding under this Plan (d) for the substitution of
new options for any portion of such unexpired options; (e) for the assumption of
any portion of such unexpired options by any successor to the Company; (f) for
the acceleration of the expiration date of any portion of such unexpired options
to a date not earlier than thirty (30) days after notice to the optionee; or (g)
for the cancellation of such portion of unexpired options in exchange for the
payment by any successor to the Company of deferred compensation to the optionee
in an amount equal to the difference between the fair market value of the Shares
subject to such unexpired portion and the aggregate exercise price of the Shares
under the terms of such
-2-
<PAGE>
unexpired portion on the date of the Event, in installments which correspond to
the vesting schedule of the unexpired option.
Notwithstanding the foregoing, if an Event should occur, the Arrangements
which the Board shall make to each portion of all outstanding unexercised
options shall be limited to either (h) providing for the substitution of new
options for such portion; (i) providing the holder of such portion with no less
than thirty (30) days to exercise such portion in full; (j) causing any
successor corporation to assume such portion in full; or (k) canceling such
portion and causing any successor corporation to pay deferred compensation to
the holder of such portion at the time such portion would have become
exercisable, in an amount equal to the difference between the fair market value
of the Shares subject to the portion and the aggregate exercise price of the
portion on the Date of the Event.
6. TERMS AND CONDITIONS OF OPTIONS
Each option granted under this Plan shall be evidenced by a stock option
agreement (an "Agreement") which is not inconsistent with the terms of this
Plan, and the form of which the Committee may from time to time determine,
provided that the Agreement shall contain the substance of the following:
a. OPTION PRICE. The option price for Incentive Stock Options shall be
not less than 100% of the fair market value of the Shares at the time the
option is granted, which shall be the date the Committee or its delegate,
awards the grant. If the optionee, at the time the option is granted, owns
stock possessing more than ten percent (10%) of the total combined voting
power of all the classes of stock of the Company or of its parent or
subsidiaries (a "Principal Shareholder"), the option price of Incentive
Stock Options shall be not less than 110% of the fair market value of the
Shares at the time the option is granted. Determination of fair market
value shall be made by the Committee in good faith pursuant to the
provisions of ss.422 of the Code and the regulations thereto. The option
price for Non-statutory Options shall be as determined by the Committee in
its sole discretion.
b. METHOD OF EXERCISE. At the time of purchase, Shares purchased under
options shall be paid for in full either (i) in cash; (ii) at the
discretion of the Board, with a promissory note secured by the Shares
purchased; (iii) at the discretion of the Committee and/or Board, with
outstanding stock of the Company at such value as the Board shall determine
in its sole discretion to be the fair market value of such stock; or (iv) a
combination of promissory note (if permitted pursuant to (ii) above), stock
(if permitted pursuant to (iii) above), and/or cash. To the extent that the
right to purchase Shares has accrued under an option, the optionee may
exercise said option from time to time by giving written notice to the
Company stating the number of Shares with respect to which the optionee is
exercising the option, and submitting
-3-
<PAGE>
with said notice payment of the full purchase price of said Shares either
in cash or, at the discretion of the Board and/or Committee as described
above, with a promissory note, outstanding stock of the Company, or a
combination of cash, promissory note, and/or such stock. As soon as
practicable after receiving such notice and payment, the Company shall
issue or cause to be issued a certificate or certificates representing such
Shares. The Shares so issued shall be out of authorized but unissued Shares
or reacquired Shares of the Company's capital stock, as the Board and/or
Committee, or its delegate, may elect. The time of such delivery of a
certificate or certificates representing the Shares purchased may be
postponed by the Company for such period as may be required for it with
reasonable diligence to comply with such procedures as may, in the opinion
of counsel to the Company, be desirable in view of federal and state laws,
including corporate securities laws and revenue and taxation laws. If the
optionee (or other person entitled to exercise the option) fails to accept
delivery of any or all of the number of Shares specified in such notice
upon tender of delivery of the certificate or certificates representing
them, the right to exercise the option with respect to such undelivered
Shares may be terminated.
c. OPTION TERM. The Committee and/or Board may grant options for any
term, but shall not grant any options for a term longer than ten (10) years
from the date the option is granted (except in the case of an Incentive
Stock Option granted to a Principal Shareholder in which case the term
shall be no longer than five (5) years from the date the option is
granted). Each option shall be subject to earlier termination as provided
in this Section 6. Any Incentive Stock Option or Non-statutory Stock Option
that is not yet vested and exercisable at the date of the employee's
termination of employment, death or disability shall expire and shall be
null and void as of the date of the termination of employment, death or
disability.
d. EXERCISE OF OPTIONS. Each option granted under this Plan shall be
exercisable during such period and for such number of Shares as shall be
determined by the Committee as limited by the other provisions of this
Plan.
e. NONASSIGNABILITY OF OPTION RIGHTS. No option shall be assignable or
transferable by the optionee except by will or by the laws of descent and
distribution. During the life of an optionee, the option shall be
exercisable only by the optionee.
f. EFFECT OF TERMINATION OF EMPLOYMENT OR DEATH OR DISABILITY. In the
event the optionee's employment with the Company or its subsidiaries ceases
during the optionee's life for any reason, including retirement, any
Incentive Stock Option or unexercised portion thereof granted to an
employee optionee which is otherwise exercisable, shall terminate and
expire upon the date of termination of employment. In the event of the
death or disability (as defined in the Code) of the optionee while
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employed by the Company, any option or unexercised portion thereof granted
to the optionee, shall terminate and expire as of the date of the
optionee's death.
g. RIGHTS OF OPTIONEE. An optionee shall have no rights as a
stockholder with respect to any Shares subject to an option until the date
of issuance of a stock certificate or certificates to the optionee for such
Shares. No adjustment shall be made for dividends or other rights of which
the record date is prior to the date such stock certificate is issued.
Neither this Plan, nor any action or agreement thereunder, shall confer any
rights of continued employment, any rights to election or retention as an
officer or director, or any rights to serve as a consultant.
7. RESTRICTED STOCK AND REDEMPTION
Until such shares are registered with the Securities and Exchange
Commission, and qualified under the laws of the applicable states, the shares of
stock to be issued to an optionee upon exercise of options granted pursuant to
the Plan ("Option Shares") will be "restricted stock" as defined in the
applicable Federal and state securities laws. Stock option agreements entered
into pursuant to the Plan may provide that in the event an optionee's employment
is terminated for any reason, then the Company shall have the right to redeem
and repurchase Option Shares from the optionee upon such terms and conditions as
may be set forth in the stock option agreement.
8. USE OF PROCEEDS
The proceeds from the sale of stock pursuant to options granted under the
Plan shall constitute general funds of the Company.
9. AMENDMENT OF PLAN
The Board may at any time amend the Plan, provided that no amendment may
affect any then outstanding options or any unexercised portions thereof, and
provided further that any such amendment increasing the number of Shares
reserved under the Plan, altering the employees or class of employee eligible to
be granted incentive stock options under the Plan, or amending this Section 9,
shall be subject to shareholder approval.
10. EFFECTIVE DATE AND TERMINATION OF PLAN
This Plan was adopted by the Board of Directors on March 9, 2000, and was
approved by the holders of a majority of the shares of common stock of the
Company on June 22, 2000. The Board may terminate this Plan at any time. If not
earlier terminated, the Plan shall terminate March 9, 2010. Termination of the
Plan will not affect rights and obligations theretofore granted and then in
effect.
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This Plan, the granting of any option hereunder, and the issuance of stock
upon the exercise of any option, shall be subject to such approval or other
conditions as may be required or imposed by any regulatory authority having
jurisdiction to issue regulations or rules with respect thereto, including,
without limitation, the State of Nevada (state of incorporation) and the
Securities and Exchange Commission.
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CERTIFICATE OF SECRETARY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned does hereby certify that the undersigned is the
Secretary of Venturi Technologies, Inc., a corporation duly organized and
existing under and by virtue of the laws of the State of Nevada; that the above
and foregoing 2000 Stock Incentive Plan was duly and regularly adopted by the
Board of Directors of said Corporation at a meeting of the Board of Directors on
March 9, 2000; the above and foregoing 2000 Stock Option Plan was ratified by
the shareholders of said Corporation by written consent of a majority of the
outstanding voting shares of the Corporation on June 22, 2000; and that the
above and foregoing 2000 Stock Option Plan is now in full force and effect.
DATED:
------------------------------
Randy K. Johnson
Secretary
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VENTURI TECHNOLOGIES, INC.
2000 STOCK INCENTIVE PLAN
STOCK OPTION AGREEMENT
Unless otherwise defined herein, the terms defined in the Plan shall have
the same defined meanings in this Option Agreement.
I. NOTICE OF STOCK OPTION GRANT
[Optionee's Name and Address]
You have been granted an option to purchase Common Stock of the Company, subject
to the terms and conditions of the Plan and this Option Agreement, as follows:
Grant Number
-------------------------
Date of Grant
-------------------------
Vesting Commencement Date
-------------------------
Exercise Price per Share $
-------------------------
Total Number of Shares Granted
-------------------------
Total Exercise Price $
-------------------------
Type of Option: Incentive Stock Option
Nonstatutory Stock Option
Term/Expiration Date:
-------------------------
Vesting Schedule:
This Option may be exercised, in whole or in part, in accordance with the
following schedule:
Termination Period:
This Option may be exercised for three (3) months after termination of your
employment or consulting relationship, or such longer period as may be
applicable upon death or disability of Optionee as provided in the Plan. In the
event of the Optionee's change in status from Employee to Consultant or
Consultant to Employee, this Option Agreement shall remain in effect. In no
event shall this Option be exercised later than the Term/Expiration Date as
provided above.
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II. AGREEMENT
1. GRANT OF OPTION. Venturi Technologies, Inc., a Nevada corporation
(the"Company"), hereby grants to the Optionee named in the Notice of Grant (the
"Optionee"), an option (the "Option") to purchase the total number of shares of
Common Stock (the "Shares") set forth in the Notice of Grant, at the exercise
price per share set forth in the Notice of Grant (the "Exercise Price") subject
to the terms, definitions and provisions of the 2000 Stock Incentive Plan as
amended and restated from time to time (the "Plan") adopted by the Company,
which is incorporated herein by reference. Unless otherwise defined herein, the
terms defined in the Plan shall have the same defined meanings in this Option
Agreement.
If designated in the Notice of Grant as an Incentive Stock Option("ISO"), this
Option is intended to qualify as an Incentive Stock Option as defined in Section
422 of the Code. Nevertheless, to the extent that it exceeds the $100,000 rule
of Code Section 422(d), this Option shall be treated as a Nonstatutory Stock
Option ("NSO").
2. EXERCISE OF OPTION.
(a) RIGHT TO EXERCISE. This Option shall be exercisable during its
term in accordance with the Vesting Schedule set out in the Notice of Grant and
with the applicable provisions of the Plan and this Option Agreement. In the
event of Optionee's death, disability or other termination of the employment or
consulting relationship, this Option shall be exercisable in accordance with the
applicable provisions of the Plan and this Option Agreement.
(b) METHOD OF EXERCISE. This Option shall be exercisable by written
notice (in such form as the Board approves, including the form attached hereto
as Exhibit A) which shall state the election to exercise the Option, the number
of Shares in respect of which the Option is being exercised, and such other
representations and agreements as to the holder's investment intent with respect
to such shares of Common Stock as may be required by the Company pursuant to the
provisions of the Plan. Such written notice shall be signed by the Optionee and
shall be delivered in person or by certified mail to the Secretary of the
Company. The written notice shall be accompanied by payment of the Exercise
Price. This Option shall be deemed to be exercised upon receipt by the Company
of such written notice accompanied by the Exercise Price.
No Shares will be issued pursuant to the exercise of an Option unless such
issuance and such exercise shall comply with all relevant provisions of law and
the requirements of any stock exchange upon which the Shares may then be listed.
Assuming such compliance, for income tax purposes the Shares shall be considered
transferred to the Optionee on the date on which the Option is exercised with
respect to such Shares.
3. METHOD OF PAYMENT. Payment of the Exercise Price shall be by any of
the following, or a combination thereof, at the election of the Optionee:
(a) cash;
(b) check;
(c) wire transfer;
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(d) promissory note;
(e) surrender of other shares of Common Stock of the Company which
(A) in the case of Shares acquired pursuant to the exercise of a Company option,
have been owned by the Optionee for more than six (6) months on the date of
surrender, and (B) have a Fair Market Value on the date of surrender equal to
the Exercise Price of the Shares as to which the Option is being exercised; or
(f) consideration received by the Company under a cashless exercise
program implemented by the Company in connection with the Plan.
4. RESTRICTIONS ON EXERCISE. This Option may not be exercised until such
time as the Plan has been approved by the stockholders of the Company, or if the
issuance of such Shares upon such exercise or the method of payment of
consideration for such Shares would constitute a violation of any applicable
federal or state securities or other law or regulation, including any rule under
Part 207 of Title 12 of the Code of Federal Regulations ("Regulation G") as
promulgated by the Federal Reserve Board.
5. TERMINATION OF RELATIONSHIP. In the event an Optionee's Continuous
Status as an Employee or Consultant terminates, Optionee may, to the extent
otherwise so entitled at the date of such termination (the "Termination Date"),
exercise this Option during the Termination Period set out in the Notice of
Grant. To the extent that Optionee was not entitled to exercise this Option at
the date of such termination, or if Optionee does not exercise this Option
within the time specified herein, the Option shall terminate.
6. DISABILITY OF OPTIONEE. Notwithstanding the provisions of Section 6
above, in the event of termination of an Optionee's consulting relationship or
Continuous Status as an Employee as a result of his or her disability, Optionee
may, but only within twelve (12) months from the date of such termination (and
in no event later than the expiration date of the term of such Option as set
forth in the Option Agreement), exercise the Option to the extent otherwise
entitled to exercise it at the date of such termination; provided, however, that
if such disability is not a "disability" as such term is defined in Section
22(e)(3) of the Code, in the case of an Incentive Stock Option such Incentive
Stock Option shall cease to be treated as an Incentive Stock Option and shall be
treated for tax purposes as a Nonstatutory Stock Option on the day three (3)
months and one (1) day following such termination. To the extent that Optionee
was not entitled to exercise the Option at the date of termination, or if
Optionee does not exercise such Option to the extent so entitled within the time
specified herein, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.
7. DEATH OF OPTIONEE. In the event of termination of Optionee's
Continuous Status as an Employee or Consultant as a result of the death of
Optionee, the Option may be exercised at any time within twelve (12) months
following the date of death (but in no event later than the date of expiration
of the term of this Option as set forth in Section 10 below), by Optionee's
estate or by a person who acquired the right to exercise the Option by bequest
or inheritance, but only to the extent the Optionee could exercise the Option at
the date of death.
8. NON-TRANSFERABILITY OF OPTION. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the
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lifetime of Optionee only by Optionee. The terms of this Option shall be binding
upon the executors, administrators, heirs, successors and assigns of the
Optionee.
9. TERM OF OPTION. This Option may be exercised only within the term set
out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option. The limitations set out
in Section 7 of the Plan regarding Options designated as Incentive Stock Options
and Options granted to stockholders who hold greater than ten percent (10%) of
the voting power of all classes of stock of the Company or any Parent or
Subsidiary shall apply to this Option.
10. TAX CONSEQUENCES. Set forth below is a brief summary as of the date of
this Option of some of the federal and state tax consequences of exercise of
this Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY
INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE
SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE
SHARES.
(a) Exercise of ISO. If this Option qualifies as an ISO, there will
be no regular federal income tax liability or state income tax liability upon
the exercise of the Option, although the excess, if any, of the Fair Market
Value of the Shares on the date of exercise over the Exercise Price will be
treated as an adjustment to the alternative minimum tax for federal tax purposes
and may subject the Optionee to the alternative minimum tax in the year of
exercise.
(b) Exercise of ISO Following Disability. If the Optionee's
Continuous Status as an Employee or Consultant terminates as a result of
disability that is not total and permanent disability as defined in Section
22(e)(3) of the Code, to the extent permitted on the date of termination, the
Optionee must exercise an ISO within ninety (90) days of such termination for
the ISO to be qualified as an ISO.
In the event that the Optionee ceases to be an Employee but remains a
Consultant, any Incentive Stock Option of the Optionee that remains unexercised
shall cease to qualify as an Incentive Stock Option and will be treated for tax
purposes as a Nonstatutory Stock Option on the date three (3) months and one
(1)day following such change of status.
(c) Exercise of Nonstatutory Stock Option. There may be a regular
federal and state income tax liability upon the exercise of a Nonstatutory Stock
Option. The Optionee will be treated as having received compensation income
(taxable at ordinary income tax rates) equal to the excess, if any, of the Fair
Market Value of the Shares on the date of exercise over the Exercise Price. If
Optionee is an Employee or a former Employee, the Company will be required to
withhold from Optionee's compensation or collect from Optionee and pay to the
applicable taxing authorities an amount in cash equal to a percentage of this
compensation income at the time of exercise, and may refuse to honor the
exercise and refuse to deliver Shares if such withholding amounts are not
delivered at the time of exercise.
(d) Disposition of Shares. In the case of an NSO, if Shares are held
for at least one year, any gain realized on disposition of the Shares will be
treated as long-term capital gain for federal and state income tax purposes. In
the case of an ISO, if Shares transferred pursuant to the Option are held for at
least one year after exercise and are disposed of at least two years after the
Date of Grant, any gain realized on disposition of the Shares will also be
treated as long-term capital gain for federal and state income tax purposes. If
Shares purchased under an ISO are disposed of
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within such one-year period or within two years after the Date of Grant, any
gain realized on such disposition will be treated as compensation income
(taxable at ordinary income rates) to the extent of the difference between the
Exercise Price and the lesser of (1) the Fair Market Value of the Shares on the
date of exercise, or (2) the sale price of the Shares.
(e) Notice of Disqualifying Disposition of ISO Shares. If the Option
granted to Optionee herein is an ISO, and if Optionee sells or otherwise
disposes of any of the Shares acquired pursuant to the ISO on or before the
later of (1) the date two years after the Date of Grant, or (2) the date one
year after the date of exercise, the Optionee shall immediately notify the
Company in writing of such disposition. Optionee agrees that Optionee may be
subject to income tax withholding by the Company on the compensation income
recognized by the Optionee.
11. ENTIRE AGREEMENT; GOVERNING LAW. The Plan is incorporated herein by
reference. The Plan, this Option Agreement and the Exercise Notice constitute
the entire agreement of the parties with respect to the subject matter hereof
and supersede in their entirety all prior undertakings and agreements of the
Company and Optionee with respect to the subject matter hereof, and may not be
modified adversely to the Optionee's interest except by means of a writing
signed by the Company and Optionee. This agreement is governed by Nevada law
except for that body of law pertaining to conflict of laws.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the Date
of Grant set forth on the cover sheet above.
VENTURI TECHNOLOGIES, INC.
By:
---------------------------
Its:
-----------------------
OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE
OPTION HEREOF IS EARNED ONLY BY CONTINUING CONSULTANCY OR EMPLOYMENT AT THE WILL
OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR
ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT
NOTHING IN THIS AGREEMENT, NOR IN THE COMPANY'S STOCK OPTION PLAN WHICH IS
INCORPORATED HEREIN BY REFERENCE, SHALL CONFER UPON OPTIONEE ANY RIGHT WITH
RESPECT TO CONTINUATION OF EMPLOYMENT OR CONSULTANCY BY THE COMPANY, NOR SHALL
IT INTERFERE IN ANY WAY WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO
TERMINATE OPTIONEE'S EMPLOYMENT OR CONSULTANCY AT ANY TIME, WITH OR WITHOUT
CAUSE. OPTIONS UNDER THE PLAN ARE GRANTED IN A DISCRETIONARY FASHION, AND THE
GRANT OF ONE OR MORE OPTIONS UNDER THE PLAN SHALL NOT GIVE RISE TO A RIGHT IN
ANY EMPLOYEE OR CONSULTANT TO RECEIVE ADDITIONAL OPTION GRANTS IN THE FUTURE.
FURTHER, THE BOARD RETAINS THE RIGHT, IN ITS SOLE DISCRETION, TO TERMINATE THE
PLAN FOR ANY REASON, OR NO REASON, AT ANY TIME.
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<PAGE>
Optionee acknowledges receipt of a copy of the Plan and represents that he is
familiar with the terms and provisions thereof, and hereby accepts this Option
subject to all of the terms and provisions thereof. Optionee has reviewed the
Plan and this Option in their entirety, has had an opportunity to obtain the
advice of counsel prior to executing this Option and fully understands all
provisions of the Option. Optionee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Administrator upon
any questions arising under the Plan or this Option. Optionee further agrees to
notify the Company upon any change in the residence address indicated below.
OPTIONEE:
------------------------------
Signature
Printed Name:
Residence Address:
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EXHIBIT A
2000 STOCK INCENTIVE PLAN
EXERCISE NOTICE
Venturi Technologies, Inc.
6295 East 56th Avenue
Commerce City, Colorado 80022
Attention: Secretary
1. EXERCISE OF OPTION. Effective as of today, ____________________, the
undersigned ("Optionee") hereby elects to exercise Optionee's option to
purchase_________ shares of Common Stock (the "Shares") of VENTURI TECHNOLOGIES,
INC. (the "Company") under and pursuant to the 2000 Stock Incentive Plan, as
amended (the "Plan") and the [ ] Incentive [ ] Nonstatutory Stock Option
Agreement dated ____________________ (the "Option Agreement"). Optionee herewith
delivers to the Company the full purchase price for the Shares.
2. REPRESENTATIONS OF OPTIONEE. Optionee acknowledges that Optionee has
received, read and understood the Plan and the Option Agreement and agrees to
abide by and be bound by their terms and conditions.
3. RIGHTS AS STOCKHOLDER. Until the stock certificate evidencing such
Shares is issued (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), no right to vote
or receive dividends or any other rights as a stockholder shall exist with
respect to the Optioned Stock, notwithstanding the exercise of the Option. The
Company shall issue (or cause to be issued) such stock certificate promptly
after the Option is exercised. No adjustment will be made for a dividend or
other right for which the record date is prior to the date the stock certificate
is issued, except as provided in Section 12 of the Plan.
Optionee shall enjoy rights as a stockholder until such time as Optionee
disposes of the Shares or the Company and/or its assignee(s) exercises the Right
of First Refusal or Repurchase Option contained in this Exercise Notice. Upon
such exercise, Optionee shall have no further rights as a holder of the Shares
so purchased except the right to receive payment for the Shares so purchased in
accordance with the provisions of the Stock Purchase Agreement, and Optionee
shall forthwith cause the certificate(s) evidencing the Shares so purchased to
be surrendered to the Company for transfer or cancellation.
4. TAX CONSULTATION. Optionee understands that Optionee may suffer adverse
tax consequences as a result of Optionee's purchase or disposition of the
Shares. Optionee represents that Optionee has consulted with any tax consultants
Optionee deems advisable in connection with the purchase or disposition of the
Shares and that Optionee is not relying on the Company for any tax advice.
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5. ENTIRE AGREEMENT. The Plan, Notice of Grant and Option Agreement are
incorporated herein by reference. This Agreement, the Plan, and the Option
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Purchaser with respect to the subject matter
hereof, and may not be modified adversely to the Purchaser's interest except by
means of a writing signed by the Company and Purchaser.
Submitted by: Accepted by:
OPTIONEE: VENTURI TECHNOLOGIES, INC.
By:
----------------------------- ---------------------------
(Signature) Its:
---------------------------
CONSENT OF SPOUSE
I, ___________________________, spouse of ______________________, have read and
approve the foregoing Agreement. In consideration of granting of the right to my
spouse to purchase shares of VENTURI TECHNOLOGIES, INC., as set forth in the
Agreement, I hereby appoint my spouse as my attorney-in-fact in respect to the
exercise of any rights under the Agreement and agree to be bound by the
provisions of the Agreement insofar as I may have any rights in said Agreement
or any shares issued pursuant thereto under the community property laws or
similar laws relating to marital property in effect in the state of our
residence as of the date of the signing of the foregoing Agreement.
Dated:
-----------------------------
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VENTURI TECHNOLOGIES, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
JUNE 22, 2000, 2:00 P.M. (CENTRAL TIME)
THIS PROXY SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF
VENTURI TECHNOLOGIES, INC.
THE UNDERSIGNED HEREBY APPOINTS MICHAEL F. DOUGHERTY AND RANDY K. JOHNSON, AND
EACH OF THEM, EACH WITH FULL POWER OF SUBSTITUTION, AS PROXIES TO VOTE AT THE
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON THURSDAY, JUNE 22, 2000, BEGINNING
AT 2:00 P.M., (CENTRAL DAYLIGHT TIME), AT ADAMS MARK HOTEL, 2929 BRIARPARK
DRIVE, HOUSTON, TEXAS, AND AT ALL ADJOURNMENTS THEREOF, ALL SHARES OF VOTING
STOCK WHICH THE UNDERSIGNED WOULD BE ENTITLED TO VOTE ON MATTERS SET FORTH BELOW
IF PERSONALLY PRESENT:
1. ELECTION OF DIRECTORS.
[ ] FOR ALL NOMINEES LISTED BELOW (EXCEPT AS MARKED TO THE CONTRARY BELOW)
[ ] WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED BELOW
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THAT NOMINEE'S NAME IN THE LIST BELOW.)
BRUCE E. RANCK
MICHAEL F. DOUGHERTY
MITCHELL J. MARTIN
DANIEL DORNIER
STUART W. THORN
2. APPROVAL OF AN AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION TO
INCREASE THE AMOUNT OF AUTHORIZED SHARES.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. APPROVAL OF THE ADOPTION OF A STOCK INCENTIVE PLAN TO BE KNOWN AS THE 2000
STOCK INCENTIVE PLAN, AND TO ALLOCATE 1,750,000 SHARES OF COMMON STOCK TO
THE PLAN.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. APPROVAL OF APPOINTMENT OF INDEPENDENT AUDITORS.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
________________________________________________________________________________
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY
DIRECTION IS INDICATED, WILL BE VOTED FOR PROPOSALS 1, 2, 3 AND 4. IN THEIR
DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER MATTERS AS MAY
PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT(S) THEREOF.
DATED: ___________________________, 2000
________________________________________________________________________________
SIGNATURE
________________________________________________________________________________
(THIS PROXY SHOULD BE MARKED, DATED AND SIGNED BY EACH SHAREHOLDER EXACTLY AS
SUCH SHAREHOLDER'S NAME APPEARS HEREON AND RETURNED PROMPTLY. PERSONS SIGNING IN
A FIDUCIARY CAPACITY SHOULD SO INDICATE. IF SHARES ARE HELD BY JOINT TENANTS OR
AS COMMUNITY PROPERTY, BOTH SHOULD SIGN. IF A CORPORATION, PLEASE SIGN IN FULL
CORPORATION NAME BY THE PRESIDENT OR BY AN AUTHORIZED CORPORATE OFFICER. IF A
PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY AN AUTHORIZED PERSON.)
SHAREHOLDERS SHOULD MARK, SIGN AND RETURN
THIS PROXY PROMPTLY TO ZIONS FIRST NATIONAL BANK
IN THE ENCLOSED ENVELOPE.
