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(c)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to SS. 240.14a-11(c)
or SS. 240.14a-12
VENTURIAN CORP.
(Name of Registrant as Specified in its Charter)
Mark S. Weitz
Leonard, Street and Deinard
150 South Fifth Street, Suite 2300
Minneapolis, Minnesota 55402
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rule 14a-6(i)(4)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 computer
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:
VENTURIAN CORP.
1300 SOUTH SECOND STREET
HOPKINS, MINNESOTA 55343
(612) 931-2500
NOTICE AND PROXY STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 8, 1996
NOTICE
To the Holders of Common Stock of Venturian Corp:
The Annual Meeting of Shareholders of Venturian Corp. (the "Company")
will be held at the headquarters office of the Company, 1300 South Second
Street, Hopkins, Minnesota, on Wednesday, May 8, 1996 at 10:00 a.m. Minneapolis
time, for the following purposes:
1. To elect one director for a term of three years.
2. To adopt an amendment to the Venturian Corp. 1995 Stock Option
Plan.
3. To consider and act on such other business as may properly
come before the meeting or any adjournment or adjournments
thereof.
The Company's Board of Directors has fixed the close of business on
April 1, 1996 as the record date for the determination of shareholders entitled
to receive notice of and to vote at the meeting and any adjournment thereof.
By Order of the Board of Directors
Morris M. Sherman
Secretary
April 10, 1996
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE AND RETURN YOUR
PROXY CARD.
PROXY STATEMENT
OF
VENTURIAN CORP.
1300 SECOND STREET SOUTH, HOPKINS, MINNESOTA 55343
TELEPHONE NUMBER (612) 931-2500
Mailing Date: April 10, 1996
ANNUAL MEETING OF SHAREHOLDERS, MAY 8, 1996
This Proxy Statement is furnished to shareholders of Venturian Corp.
(the "Company") in connection with the solicitation by the Board of Directors of
proxies for use at the annual meeting of shareholders to be held at the
headquarters office of the Company, 1300 Second Street South, Hopkins, Minnesota
55343, on May 8, 1996 at 10:00 a.m., local time, and at any adjournment thereof,
for the purposes set forth in the accompanying Notice of Meeting.
VOTING RIGHTS AND PROCEDURE
Only holders of record of the Company's common stock at the close of
business on April 1, 1996 are entitled to notice of and to vote at the annual
meeting. As of said date, there were outstanding 747,789 shares of common stock.
Each share is entitled to one vote at the meeting. Under the Company's bylaws,
33-1/3 percent of the outstanding shares are required to constitute a quorum at
the meeting. The affirmative vote of a majority of the Common Shares present, in
person or by proxy, and entitled to vote at the annual meeting, is required to
approve the matters mentioned in the foregoing Notice of Annual Meeting of
Shareholders. If a shareholder abstains from voting as to a matter, then the
shares held by such shareholder shall be deemed present at the annual meeting
for determining whether a quorum is present and for purposes of calculating the
vote as to such matter, but will not be deemed to have been voted in favor of
such matter. If a broker returns a "non-vote" proxy, indicating a lack of
authority to vote on a matter, then the shares covered by such non-vote shall be
deemed present at the meeting for purposes of determining whether a quorum is
present but shall not be deemed to be represented at the meeting for purposes of
calculating the vote with respect to such matter.
ELECTION OF DIRECTORS
The business and affairs of the Company are managed under the direction
of its Board of Directors. The Company's bylaws were amended in 1994 to provide
for a Board of eight directors divided into classes of three, three and two
directors, respectively. The directorships do not run concurrently. Each year
the terms of one class of directors expire. Directors are elected to serve until
the term of their class has expired and a successor is duly elected and
qualified.
At the annual meeting, one director will be elected to hold office
until the annual meeting of shareholders in 1999. The persons named in the
enclosed form of proxy will vote the proxied shares for the election of the
nominee listed below, unless such vote is withheld in the proxy. If, prior to
the meeting, the nominee ceases to be a candidate for election because he is
unable to serve, or for good cause will not serve, the proxied shares will be
voted for a substitute nominee designated by the Chairman of the Board of
Directors. The Board of Directors has no reason to believe that the nominee will
cease to be a candidate prior to the meeting. The affirmative vote of a majority
of shares represented at the meeting in person or by proxy will be required to
elect the nominee for the indicated term. The Board of Directors recommends a
vote FOR election of the nominee listed below.
Set forth below is certain information concerning the nominee for
director and each director whose term of office will continue after the meeting:
NOMINEES
Principal Occupation or
Director of the Employment and Other
Nominee (Age) Company Since Directorships Held
------------- ------------- ------------------
To be elected for a three-year term expiring on the date of the annual meeting
of shareholders in 1999:
Gary B. Rappaport (59) September 1983 Chairman of the Board and
Chief Executive Officer of
the Company since 1983,
President from 1983 until
March 1996.
Michael R. Sill, a director since 1984, and Edward Jay Phillips, a
director since May 1994, have each indicated that they will not stand for
re-election. At present, there are no nominees for such positions. Accordingly,
there will be two vacancies in the class of directors which serves until the
annual meeting of shareholders in 1999. The Board of Directors intends to
appoint two persons to fill such vacancies after an appropriate search has been
made for qualified individuals.
DIRECTORS WHOSE TERM OF OFFICE WILL CONTINUE
Terms expiring on the date of the annual meeting of shareholders in 1997:
Morris M. Sherman (60)* May 1988 Secretary of the Company
since 1987. Mr. Sherman has
been a partner in the law
firm of Leonard, Street and
Deinard Professional
Association for more than
five years.
Charles B. Langevin (50) November 1990 Mr. Langevin was named
Executive Vice President of
Napco International Inc., a
wholly- owned subsidiary of
the Company, in January 1990.
Previously, Mr. Langevin was
a Vice President of Napco
International Inc. for more
than five years.
Richard F. McNamara (63)** May 1994 Owner and Chief Executive
Officer of Activar, Inc. for
more than five years.
Activar, Inc. is a
mini-conglomerate consisting
of seventeen companies in
industrial plastics, sheet
metal, the automotive
aftermarket, construction
supply, electronics and
financial services. Mr.
McNamara serves on the board
of directors of Rimage, Inc.,
which designs, manufactures
and sells computer diskette
and digital tape duplication
and finishing systems.
Terms expiring on the date of the annual meeting of shareholders in 1998:
Debra L. Rappaport (31) May 1994 Ms. Rappaport presently is
the President of Rappaport
Marketing and New Media
Consultants. Ms. Rappaport
was the Director of Marketing
and Sales for PC Express,
Inc., a former subsidiary of
the Company from October 1992
to July 1995 and Vice
President of Marketing for
Venturian Software, Inc., a
wholly-owned subsidiary of
the Company, from October
1992 through January 1995.
From October 1990 to October
1992, Ms. Rappaport was a
sales and marketing
consultant for InterFax,
Inc., which marketed
interactive fax technology to
companies nationally. Prior
to joining InterFax, Inc.,
Ms. Rappaport was a graduate
student at the Wharton School
of Business at the University
of Pennsylvania from
September 1988 to May 1990.
Ms. Rappaport is the daughter
of Gary B. Rappaport,
Chairman of the Board,
President and Chief Executive
Officer of the Company.
Stuart B. Utgaard (50)** July 1989 President, Enterprise
Investments, Inc., for more
than five years. Enterprise
Investments, Inc. provides
internal and external
corporate growth consulting
services.
* Member of the Audit Committee during 1995.
** Member of the Compensation Committee during 1995.
INFORMATION REGARDING THE BOARD OF DIRECTORS
AND ITS COMMITTEES FOR 1995
The Board of Directors met on five occasions during 1995. The Board
does not have a nominating committee or any committee performing similar
functions. All directors attended at least 80% of the meetings of the Board and
Board Committees on which they served.
AUDIT COMMITTEE
During 1995, the Audit Committee consisted of Michael R. Sill, Edward
Jay Phillips and Morris M. Sherman, non-employee members of the Board.
The Audit Committee provides direct communication between the Company,
the independent auditors and the Board of Directors. It is intended to assure
the independent auditors of the freedom, cooperation and opportunity necessary
to accomplish their functions. It is also intended to assure that appropriate
action is taken on the recommendations of the auditors. The Audit Committee met
on three occasions during 1995.
COMPENSATION COMMITTEE; COMPENSATION COMMITTEE INTERLOCKS
During 1995, the Compensation Committee consisted of Stuart B. Utgaard
and Richard F. McNamara, non-employee members of the Board.
The Compensation Committee sets the compensation policy for the
Company, administers the Company's bonus plans, and makes recommendations to the
Board of Directors. The Compensation Committee met on one occasion during 1995.
No member of the Compensation Committee was, during the 1995 fiscal
year or previously, an officer or employee of the Company.
OTHER MATTERS
The Board of Directors has determined that all non-employee directors
of the Company shall be paid an annual retainer of $4,000 each, plus (i) the sum
of $500 for attendance at any meeting of the Board of Directors or Board
Committee (only a single fee to be paid in case a committee meeting should fall
on the same date as a meeting of the Board) and (ii) reimbursement for
out-of-pocket expenses incurred in attending any such meeting.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following are the only persons known to the Company to own of
record or beneficially more than five percent of any class of voting securities
of the Company as of April 1, 1996:
<TABLE>
<CAPTION>
Amount and Nature
Title of Name and Address of of Beneficial Percentage
Class Beneficial Owner Ownership of Class
-------- ------------------- ------------- ----------
<S> <C> <C> <C>
Common Hesperus Partners Ltd. 80,100 (direct) (a) 10.71%
Stock 225 W. Washington St., Suite 1650
Chicago, Illinois 60606
Common The Charles Schwab Company 51,544 (direct) (b) 6.89%
Stock Trustee for Venturian Group Profit
Sharing Plan and Trust
One Montgomery Street
San Francisco, California 94104
Common Gary B. Rappaport 72,078 (direct) (c) 26.10%
Stock 1600 Second Street South 126,999 (indirect) (d)
Hopkins, Minnesota 55343
Common Oppenheimer Group, Inc. 49,100 (indirect) (e) 6.57%
Stock World Financial Center
New York, New York 10281
Common Dimensional Fund Advisors, Inc. 42,140 (indirect) (f) 5.64%
Stock 1299 Ocean Ave., Suite 650
Santa Monica, California 90401
</TABLE>
SECURITY OWNERSHIP OF MANAGEMENT
As of April 1, 1996, individual directors, and the directors and
executive officers of the Company as a group, owned shares of the Company's
common stock as indicated by the following table:
<TABLE>
<CAPTION>
Amount and Nature
Title of Name and Address of of Beneficial Percentage
Class Beneficial Owner Ownership of Class
- -------- ------------------- ------------- ----------
<S> <C> <C> <C>
Common Gary B. Rappaport 72,078 (direct)(c) 26.10%
Stock 126,999 (indirect)(d)
Common Stuart B. Utgaard 500 (indirect) *
Stock
Common Morris M. Sherman 100 (direct) *
Stock
Common Charles B. Langevin 21,150 (direct)(g) 2.78%
Stock
Common Debra L. Rappaport 8,335 (direct) 1.36%
Stock 1,845 (indirect)(h)
Common Mary F. Jensen 9,000 (direct)(i) 1.19%
Stock
Common Reinhild D. Hinze 10,027 (direct)(j) 1.33%
Stock
Common All directors and executive 120,690 (direct)(k)
Stock officers as a group (11 in 129,344 (indirect) 31.67%
number including the above)
</TABLE>
* Less than 1% of the outstanding shares.
(a) Voting and investment power with respect to these shares may be deemed
shared with Sirius Partners L.P., the general partner of Hesperus
Partners Ltd. and with Sirius Corporation, the general partner of
Sirius Partners L.P., each of which has the same address as Hesperus
Partners Ltd.
(b) These shares are owned by The Charles Schwab Trust Company ("Schwab")
as trustee for the Venturian Group Profit Sharing/401(k) Plan. For
purposes of the reporting requirements of the Securities Exchange Act
of 1934, Schwab is deemed to be a beneficial owner of such securities;
however, Schwab expressly disclaims any beneficial interest in said
shares.
(c) Includes 15,000 shares of the common stock of the Company which Mr.
Rappaport could acquire (but has not yet purchased) pursuant to
presently exercisable options.
(d) These shares are owned by trusts created under the will of Max E.
Rappaport, deceased, for the benefit of his wife and two children
(including Gary B. Rappaport, a trustee of said trusts), and by a trust
created by Mr. Rappaport's mother for the benefit of his two daughters.
Mr. Rappaport shares the voting and investment power with respect to
said shares in his capacity as trustee or co-trustee of said trusts.
Also includes 51,544 shares held by the Venturian Group Profit
Sharing/401(k) Plan. Mr. Rappaport, by virtue of his position on the
investment committee for the Plan, holds voting and dispositive power
with respect to these shares.
(e) Beneficial ownership is reported on behalf of the parent and various
subsidiaries of Oppenheimer Group, Inc., and for investment advisory
clients or discretionary accounts of such subsidiaries. Oppenheimer
Group, Inc. disclaims beneficial ownership of such shares.
(f) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 42,140 shares, all
of which shares are held in portfolios of DFA Investment Dimensions
Group Inc., a registered open-end investment company, or in series of
the DFA Investment Trust Company, a Delaware business trust, or the DFA
Group Trust and DFA Participation Group Trust, investment vehicles for
qualified employee benefit plans, all of which Dimensional Fund
Advisors Inc. serves as investment manager. Dimensional disclaims
beneficial ownership of all such shares.
(g) Includes 13,750 shares of the common stock of the Company which Mr.
Langevin could acquire (but has not yet purchased) pursuant to
presently exercisable options.
(h) These shares are owned by a trust created by Mr. Rappaport's mother for
the benefit of Ms. Rappaport.
(i) Includes 7,000 shares of the common stock of the Company which Ms.
Jensen could acquire (but has not yet purchased) pursuant to presently
exercisable options.
(j) Includes 6,000 shares of the common stock of the Company which Ms.
Hinze could acquire (but has not yet purchased) pursuant to presently
exercisable options.
(k) Includes 41,750 shares of the common stock of the Company which the
officers and directors could acquire (but have not yet purchased)
pursuant to presently exercisable options.
EXECUTIVE OFFICERS
The executive officers are elected to serve one year or until their
respective successors are elected. The present executive officers are:
<TABLE>
<CAPTION>
Name Office Age Officer Since
- ----------------- -------------------------- ------- -------------
<S> <C> <C> <C>
Gary B. Rappaport Chairman of the Board and 59 1983(1)
Chief Executive Officer -
Venturian Corp. and Napco
International Inc.
Thomas E. Desmond President and Chief Operating Officer 46 1996(2)
Mary F. Jensen Chief Financial Officer - Venturian 41 1987(1)
Corp. and Napco International Inc.
Charles B. Langevin Director, Executive Vice President 50 1986(1)
and Chief Commercial Officer -
Napco International Inc.
Reinhild D. Hinze Treasurer, Vice President 46 1985(1)
Operations - Napco
International Inc. and
Assistant Secretary - Venturian
Corp.
</TABLE>
(1) Each of the indicated officers has been employed by the Company for
more than five years.
(2) Mr. Desmond became an executive officer on March 18, 1996. Prior to
joining the company, Mr. Desmond was Chairman and President of Consumer
Health Services, Inc. (1983-1985), a health care information services
and marketing company; thereafter, he was President of Desmond
Adventures, Inc., an international tour operations and travel marketing
firm (1986-1996).
EMPLOYMENT AGREEMENTS
The Company has entered into an Employment Agreement with Mr. Desmond.
The Agreement provides a base salary of $120,000 per year, less the cost to the
Company of providing two leased cars to Mr. Desmond during the employment term.
The employment term is three and one-half years, and is automatically renewable
for additional one-year terms unless either Mr. Desmond or the Company provides
notice to the other of intention not to renew. The Agreement is also terminable
for cause (as defined therein) or upon Mr. Desmond's death. In addition, the
Company may terminate Mr. Desmond's employment at any time, but in such event is
obligated to pay Mr. Desmond his base salary for six months. The Company has
granted Mr. Desmond incentive stock options to purchase up to 50,000 shares of
the Company's common stock, which options vest in six month increments during
the initial employment term. The Agreement also includes confidentiality
provisions and a one year noncompete provision. The Company has agreed to grant
Mr. Desmond options to purchase an additional 50,000 shares on March 18, 1997 if
the proposed amendment to the Company's option plan, as set forth herein, is
adopted by the shareholders of the Company. Such additional options are subject
to a similar three and one-half year vesting schedule.
EXECUTIVE COMPENSATION
Set forth below is certain information concerning compensation paid for
1995 to the Chief Executive Officer and one executive officer. No other
executive officer received total salary and bonus in excess of $100,000.
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
------------------- ------------
Name and All Other
Principal Position Year Salary($) Bonus($) Options(#) Compensation($)
- ------------------ ---- --------- -------- ---------- ---------------
<S> <C> <C> <C> <C> <C>
Gary B. Rappaport 1995 125,000 -- -- 9,200(1)
Chairman of the Board 1994 117,187 -- -- 27,726(1)
of Directors, President, 1993 100,000 -- -- 10,551(1)
Chief Executive Officer
Charles B. Langevin 1995 92,214 42,180 -- 576(2)
Executive Vice 1994 92,214 14,000 -- 461(2)
President and Chief 1993 92,217 -- -- 461(2)
Commercial Officer -
Napco International Inc.
</TABLE>
(1) Includes amounts contributed by the Company pursuant to the matching
provisions of its Profit Sharing/401(k) Plan ($781, $299 and $500 in
1995, 1994 and 1993, respectively), the benefit to Mr. Rappaport in
connection with a split dollar insurance policy on the life of Mr.
Rappaport which is funded by the Company ($8,419, $10,427 and $10,051
in 1995, 1994 and 1993, respectively) and, with respect to 1994, the
payment of a $10,000 fee in consideration for providing a personal
guarantee for certain debt which the Company incurred. The benefits to
Mr. Rappaport were computed using the "foregone interest" method, which
measures the difference between the Company's current premium payment
and the present value of its recovery of such premium, utilizing a
discount rate of 6.28%, 6.83%, and 5.54% for 1995, 1994 and 1993,
respectively.
(2) Consists of amounts contributed by the Company pursuant to the matching
provisions of its Profit Sharing/401(k) Plan.
Certain expenditures made by the Company in the ordinary course of
business may have provided officers and directors of the Company with incidental
personal benefits not available to other employees. The aggregate amount of such
other compensation with respect to any named individual did not equal or exceed
the lesser of $50,000 or 10% of the compensation reported for such person.
OPTION GRANTS DURING FISCAL YEAR
No options were granted to Mr. Rappaport or Mr. Langevin during the
Company's last fiscal year.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The persons named in the Annual Compensation table did not exercise any
stock options or stock appreciation rights during the last fiscal year. As of
December 31, 1995 stock options which remain unexercised had the following
values, based on the difference between the option exercise price and the
closing price of the Company's common stock on December 31, 1995 as quoted in
the National Association of Securities Dealers Automated Quotation System.
<TABLE>
<CAPTION>
Number of Value of Unexercised
Unexercised Options in-the-Money
at Year-End Options at Year-End
Name Options Exercisable/Unexercisable Exercisable/Unexercisable
- ---- ------- ------------------------- -------------------------
<S> <C> <C> <C>
Gary B. Rappaport 15,000 15,000/--- $0
Charles B. Langevin 8,400 7,500/--- 0
</TABLE>
COMPENSATION COMMITTEE REPORT
The Company's executive compensation program is designed to attract,
motivate, reward and retain the management talent needed to achieve its business
objectives.
It does this by providing incentives to achieve Company objectives, by
rewarding executives for exceptional financial performance by the Company, by
recognizing superior individual achievement and by utilizing competitive base
salaries.
Accordingly, assessments of both individual and corporate performance
influence executives' compensation levels, although the emphasis to date has
been on corporate performance. This includes the ability to implement the
Company's business plans as well as to react to unanticipated external factors
that can have a significant impact on corporate performance. Compensation
decisions for all executives, including the Chief Executive Officer, are based
on the same criteria.
There are three major current components of the Company's compensation
program: Base Salary, Short Term Incentive Awards and Long Term Incentive
Compensation.
BASE SALARY
A competitive base salary is vital to support the philosophy of
management development and career orientation of executives and is consistent
with the long-term nature of the Company's business.
Salary levels and adjustments to salaries are a result of annual
reviews of competitive positioning (how the Company's salary structure for
comparable positions compares with that of other companies), business
performance and general economic factors. There is no specific weighting of
these factors. Executive officers receive an annual performance review and,
based upon such review, may receive an adjustment in base salary. None of the
Company's executive officers received an increase in base salary in 1995.
SHORT TERM INCENTIVE AWARDS
Short term incentive awards to executives are granted in cash pursuant
to the Company's bonus plans to recognize contributions to the business.
The bonus plans, which are adopted annually, set profitability goals
for each subsidiary. Other goals, such as reducing inventory and receivables,
may be set as well. The specific bonus an executive receives is primarily
dependent on overall performance of the subsidiary for which such executive has
responsibility. Assessment of an individual's relative performance is made
annually based on a number of factors which include initiative, business
judgment, technical expertise and management skills.
LONG TERM INCENTIVE PLANS
The Compensation Committee believes that it is important for the
Company's executive officers to focus not just on short term achievements, but
on the long term financial health and development of the Company. Accordingly,
the Committee may utilize awards of incentive stock options. However, no options
were granted in 1995.
Stuart B. Utgaard
Richard F. McNamara
TRANSACTIONS WITH CERTAIN RELATED PARTIES
As of December 31, 1995, loans totaling $191,518 under the Company's
Loan Program for Key Executive Officers were outstanding from its executive
officers, of which $120,268 was loaned to Mr. Rappaport, $40,000 was loaned to
Mr. Langevin, $21,875 was loaned to Ms. Hinze and $9,375 was loaned to Ms.
Jensen. The loans are secured by 20,095 shares of the Company's common stock,
which had an aggregate market value of $138,153 on April 1, 1996.
SHARE INVESTMENT PERFORMANCE
The following graph shows changes over the past five-year period in the
value of $100 invested in: (1) the Company's Common Stock; (2) the NASDAQ Index;
and (3) an industry group of 42 multi-industry companies, not including the
Company. The industry group consists of companies which have been publicly
traded at least since January 1, 1991.
The year-end values of each investment are based on share price
appreciation plus dividends paid in cash, assuming the reinvestments of
dividends. The calculations exclude trading commissions and taxes.
COMPARISON OF CUMULATIVE TOTAL RETURN
OF THE COMPANY, AN INDUSTRY GROUP AND THE NASDAQ MARKET INDEX
---------------- FISCAL YEAR ENDING --------------
(amounts in dollars)
COMPANY 1990 1991 1992 1993 1994 1995
VENTURIAN CORP. 100 77.17 120.11 92.55 73.40 63.83
INDUSTRY INDEX 100 113.16 126.38 154.44 147.66 198.16
NASDAQ MARKET INDEX 100 128.38 129.64 155.50 163.26 211.77
ADOPTION OF AMENDMENT TO STOCK OPTION PLAN
The Board of Directors of the Company recommends the adoption of an
amendment to the Venturian Corp. 1995 Stock Option Plan (the "Plan"), increasing
the number of shares subject to options to 250,000. The Plan was adopted by the
Board of Directors and the shareholders in April 1995.
The purpose of the Plan is to promote the Company's welfare by
encouraging selected employees of the Company or of any present or future
subsidiary of the Company to acquire a proprietary interest in the Company,
thereby creating an additional incentive on the part of such employees to
advance the progress and financial success of the Company and to continue in its
employ.
The Plan currently provides for the granting of options to purchase up
to an aggregate of 125,000 Common Shares to employees or independent contractors
of the Company. Options to purchase up to 125,000 Common Shares have been
granted and the Board has determined that increasing the number of shares
subject to options is necessary to provide a sufficiently large option pool to
attract and retain qualified executives. In particular, the Company has agreed
to grant Mr. Desmond options to purchase up to 50,000 shares and to seek
shareholder approval of the proposed amendment.
The following table shows the benefits under the Plan to be received by
Mr. Desmond.
NEW PLAN BENEFITS
Venturian Corp. 1995 Stock Option Plan
Name and Position Dollar Value ($) Number of Units
----------------- ---------------- ---------------
Thomas E. Desmond, N/A Options to purchase
President and Chief up to 50,000 shares
Operating Officer
Under the Plan, options to purchase 85,000 shares, at exercise prices
ranging from $5.75 to $7.125, are presently held by all current executive
officers as a group (including Mr. Desmond); no options are presently held by
all current directors who are not officers; and options to purchase 125,000
shares, at exercise prices ranging from $5.00 to $7.125, are presently held by
all employees, including all current officers who are not executive officers, as
a group. As of April 1, 1996, the shares of common stock underlying all
presently issued options had an aggregate market value of $859,375.
In the event of a change in corporate structure or capitalization
affecting the Company's Common Shares, the maximum number of shares available
under the Plan and subject to outstanding options will be adjusted accordingly.
Any unsold shares subject to an option under the Plan which for any reason
expires or otherwise terminates may again be subject to option under the Plan.
Options that are granted under the Plan may be either options that qualify as
incentive stock options within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended ("Incentive Options"), or those that do not
qualify as such incentive stock options ("Non-Incentive Options"). Independent
contractors may not be granted Incentive Options. The Plan currently terminates
on the earliest of (i) the date when all Common Shares available under the Plan
are acquired through the exercise of options, (ii) ten years after its adoption
(April 25, 2005), or (iii) such date as the Board of Directors determines.
The Plan has the following additional features:
Administration
The Plan shall be administered by the Board of Directors or a committee
appointed by the Board of Directors consisting solely of at least two directors
who are disinterested persons within the meaning of Section 16 of the Securities
Exchange Act of 1934 (hereafter, the "Committee").
The Committee, subject to the terms of the Plan, has the authority to
select persons to whom options will be granted and to determine the terms of the
options, including the number of shares subject to each option, the option
exercise price, the option duration, the manner in which the option becomes
exercisable and whether the option is an Incentive Option or Non-Incentive
Option.
Eligible Employees.
All salaried employees and independent contractors are eligible to
receive options under the Plan.
Option Price and Vesting.
Incentive Options may not be granted at a purchase price less than the
fair market value of the Common Shares on the date of the grant (or, for an
option granted to a person holding more than 10% of the Company's voting stock,
at less than 110% of fair market value).
Duration of Options.
The term of each option, which is fixed at the date of grant, may not
exceed ten years from the date the option is granted (except that an Incentive
Option granted to a person holding more than 10% of the Company's voting stock
may be exercisable only for five years). Options may be made exercisable in
whole or in installments, as determined by the Committee. Options which have
been granted to employees whose employment is terminated for any reason other
than gross and willful misconduct or due to death or total disability may be
exercised for a period of ninety days after the employee's termination by the
optionee or the person(s) to whom the rights under such option shall have
passed, as the case may be. The options of an optionee whose employment is
terminated for gross and willful misconduct shall be terminated.
Transfer.
Options may not be transferred other than by will, the laws of descent
and distribution, or, if applicable, pursuant to a qualified domestic relations
order. During the lifetime of an optionee, options may be exercised only by the
optionee.
Amendment.
The Board of Directors may amend the Plan as it deems advisable, but no
amendment of the Plan, shall, without shareholder approval, increase the maximum
number of shares available under the Plan, expand the class of persons eligible
to be granted options under the Plan or decrease the minimum option price. The
Board of Directors may terminate the Plan at any time, provided that outstanding
options are not affected.
Repurchase of Shares
In the event of the severance of an optionee's employment with the
Company for any reason, other than retirement at or after age 65, death or total
disability, within six months after the date of the optionee's exercise of any
segment of an option, then such optionee will be required, at the election of
the Company, upon written notice to such optionee, to sell back to the Company
all option shares purchased during such six-month period and the three months
ensuing, at the fair market value of the shares as of the date when the subject
shares had been purchased.
Effect of Federal Income Taxation.
Counsel for the Company has advised that the federal income tax
attributes of options granted under the Plan are as described in the following
paragraphs:
Under the Internal Revenue Code of 1986, as amended (the "Code"), the
recipient of an option that qualifies as an incentive stock option within the
meaning of Section 422 of the Code ("Incentive Option") receives a tax benefit
of income deferral if the recipient meets the holding period requirements of
Section 422. Neither the grant nor the exercise of an Incentive Option results
in taxable income to the optionee or a deduction of the issuer; however, the
amount by which the fair market value of the Common Shares on the date of
exercise exceeds the exercise price is an item of tax preference under the
Internal Revenue Code, as amended, and may therefore subject the optionee to
alternative minimum tax. When the optionee ultimately sells the Common Shares
acquired upon the exercise of an Incentive Option, the amount by which the sale
price exceeds the exercise price will be treated as a long-term capital gain.
There is no limitation on the value of Common Shares subject to the Incentive
Option; however, the aggregate fair market value of the Common Shares
(determined as of the date of grant) that may become first exercisable with
respect to any recipient in any calendar year under the Incentive Plan may not
exceed $100,000.
Generally, with respect to options that do not qualify as Incentive
Options ("Non-Incentive Options"), the acquisition of Common Shares through the
exercise of Non-Incentive Options will result in ordinary income to the optionee
as of the date of exercise in an amount by which the fair market value of the
Common Shares at such date exceeds the exercise price. Upon exercise, the
Company will generally be entitled to a deduction in an identical amount. When
an optionee disposes of such Common Shares, any difference between the amount
received and the fair market value of the Common Shares on the date of exercise
will be treated as a long or short-term capital gain, as the case may be,
depending on the period of time the optionee has held the Common Shares.
The foregoing summary of the effect of federal income taxation upon
participants in the Incentive Plan with respect to the receipt of an option or
Common Shares received upon the exercise of any option does not purport to be
complete. Reference is made to the applicable provisions of the Code.
No options have been granted under the Plan and no decisions have been
made as to future option grants.
The foregoing summary of the Plan does not purport to be complete and
is qualified in its entirety by reference to the Plan itself. The full text of
the Plan will be provided to any shareholder who desires a copy, upon written
request to the Company, attention Mary Jensen, 1600 Second Street South,
Hopkins, Minnesota 55343.
THE BOARD OF DIRECTORS RECOMMENDS APPROVAL OF THE ADOPTION OF THE
PROPOSED AMENDMENT TO THE VENTURIAN CORP. 1995 STOCK OPTION PLAN.
The affirmative vote of a majority of the votes represented by the
Common Shares voting at the Annual Meeting is required to approve this proposal.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The firm of Grant Thornton, independent certified public accountants,
has been engaged to audit the books and accounts of the Company for its fiscal
year ending December 31, 1995. Grant Thornton has served as auditors of the
Company and its predecessor since 1970.
The Company expects that a representative of Grant Thornton will be
present at the annual meeting of shareholders and will have an opportunity to
make any statement he deems appropriate. Further, said representative will be
available at the meeting to respond to appropriate questions. There will be no
shareholder vote with respect to engagement of independent certified public
accountants, because the Board of Directors has not yet made a decision
regarding the selection of auditors for the Company's fiscal year ending
December 31, 1996.
SOLICITATION OF PROXIES
The costs and expenses of solicitation of proxies will be paid by the
Company. In addition to the use of the mails, proxies may be solicited by the
directors, officers, and regular employees of the Company by telephone or
telegraph.
Proxies in the form enclosed are solicited by the Board of Directors.
Any shareholder giving a proxy in such form may revoke it at any time before it
is exercised. Such proxies, if received in time for voting and not revoked, will
be voted at the meeting.
The Company will reimburse banks, brokerage firms and other custodians,
nominees and fiduciaries for reasonable expenses incurred by them in sending
proxy material to the beneficial owners of its common stock.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange
Act") requires the Company's directors, executive officers, certain employees
and persons who own more than ten percent of a registered class of the Company's
equity securities, to file with the Securities and Exchange Commission initial
reports of ownership and changes in ownership of Common Shares and other equity
securities of the Company. Officers, directors and greater than ten percent
shareholders are required by SEC regulation to furnish the Company with all
Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of
such reports furnished to the Company during fiscal 1995 and written
representations that no other reports were required, all Section 16(a) filing
requirements applicable to officers, directors and greater than ten percent
shareholders were satisfied during fiscal 1995, except that Mr. Sill filed a
Form 4 late.
SHAREHOLDER PROPOSALS
Any shareholder desiring that the Company include a specific proposal
in its Proxy Statement for its next annual meeting of shareholders must submit
the same to the Company, in writing, no later than December 9, 1996.
MISCELLANEOUS
Management is not aware that any other matter will be presented for
action at the meeting. If, however, other matters do properly come before the
meeting, it is the intention of the persons designated as proxies to vote the
proxied shares in accordance with their best judgment.
The Company's annual report for the year 1995 has been mailed with this
Proxy Statement.
It is important that proxies be returned promptly. Shareholders who do
not expect to attend the meeting in person are urged to sign, date and mail the
proxy by return mail.
By order of the Board of Directors.
Morris M. Sherman
Secretary
April 10, 1996
[LOGO]
PROXY
VENTURIAN CORP.
1600 SECOND STREET SOUTH
HOPKINS, MINNESOTA 55343
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Annual Meeting of Shareholders, May 8, 1996
The undersigned hereby appoints Thomas E. Desmond and Mary F. Jensen, or either
of them, the attorneys and proxies of the undersigned, with full power of
substitution, to attend the annual meeting of shareholders of VENTURIAN CORP.
(the "Company"), to be held at the headquarters office of the Company, 1600
Second Street South, Hopkins, Minnesota 55343, on Wednesday, May 8, 1996 at
10:00 a.m., local time, and any adjournment thereof, and thereat to vote the
undersigned shares of stock in the Company as follows and in their discretion
upon any other business that may properly come before the meeting:
1. Election of one director for a three-year term expiring on the date of the
annual meeting in 1999 as set forth below and until a successor is elected.
[ ] FOR nominee listed below [ ] WITHHOLD AUTHORITY
GARY B. RAPPAPORT
This proxy cannot be voted for more than one nominee
2. Adoption of the proposed amendment to Venturian Corp. 1995 Stock Option Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued, and to be completed and signed on the reverse side)
(Continued from the other side)
This Proxy when properly executed will be voted in the manner specified herein
by the undersigned stockholder. If no specification is made, this proxy will be
voted for proposals 1 and 2.
Please sign exactly as name appears at left.
When the shares are held by joint tenants,
both should sign. When signing as attorney,
executor, administrator, trustee or
guardian, please give full title as such. If
a corporation, please sign in full corporate
name by president or other authorized
officer. If a partnership, please sign in
partnership name by authorized person.
DATED: ______________________________, 1996
___________________________________________
Signature
___________________________________________
Signature
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
