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 Rule 14a-11(c) or Rule 14a-12
VENTURIAN CORPORATION
- --------------------------------------------------------------------------------
(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
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(2) or Item 22(a)(2) of
Schedule 14A.
[ ] Fee computed on table below per Exchange Act Rules 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 transactions 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:
VENTURIAN CORP.
11111 EXCELSIOR BOULEVARD
HOPKINS, MINNESOTA 55343
(612) 931-2500
NOTICE AND PROXY STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 7, 1997
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, 11111 Excelsior
Boulevard, Hopkins, Minnesota, on Wednesday, May 7, 1997 at 10:00 a.m.
Minneapolis time, for the following purposes:
1. To elect three directors for a term of three years.
2. To adopt the 1996 Non-Employee Director Stock 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
March 31, 1997 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 7, 1997
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE AND RETURN YOUR
PROXY CARD.
PROXY STATEMENT
OF
VENTURIAN CORP.
11111 EXCELSIOR BOULEVARD, HOPKINS, MINNESOTA 55343
TELEPHONE NUMBER (612) 931-2500
Mailing Date: April 7, 1997
ANNUAL MEETING OF SHAREHOLDERS, MAY 7, 1997
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, 11111 Excelsior Boulevard, Hopkins,
Minnesota 55343, on May 7, 1997 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 March 31, 1997 are entitled to notice of and to vote at the annual
meeting. As of said date, there were outstanding 750,189 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, directors will be elected to hold office until
the annual meeting of shareholders in 2000. The persons named in the enclosed
form of proxy will vote the proxied shares for the election of the nominees
listed below, unless such vote is withheld in the proxy. If, prior to the
meeting, a 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 any 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 each nominee listed below.
Set forth below is certain information concerning the nominees 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 2000:
Morris M. Sherman (61)* 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 (51) November 1990 Mr. Langevin was named President of
Napco International Inc., a
wholly-owned subsidiary of the
Company, in 1996. Previously, Mr.
Langevin was the Executive Vice
President of Napco International
Inc. for more than five years.
Richard F. McNamara (64)** 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 after-market,
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.
DIRECTORS WHOSE TERM OF OFFICE WILL CONTINUE
TERMS EXPIRING ON THE DATE OF THE ANNUAL MEETING OF SHAREHOLDERS IN 1998:
Debra L. Rappaport (32) 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.
Ms. Rappaport is the daughter of
Gary B. Rappaport, Chairman of the
Board, President and Chief Executive
Officer of the Company.
Stuart B. Utgaard (51)** July 1989 President, Enterprise Investments,
Inc., for more than five years.
Enterprise Investments, Inc.
provides internal and external
corporate growth consulting
services.
TERMS EXPIRING ON THE DATE OF THE ANNUAL MEETING OF SHAREHOLDERS IN 1999:
Gary B. Rappaport (60) September 1983 Chairman of the Board and Chief
Executive Officer of the Company
since 1983, President from 1983
until March 1996 and since December
1996.
Anthony S. Cleberg (44)* Mr. Cleberg presently is the
Corporate Vice President for
Business Development for Honeywell,
Inc. Mr. Cleberg was the Vice
President of Taxes for Honeywell's
Space and Aviation Business from
November 1994 to February 1995 and
served as the Vice President of
Finance for Honeywell's Space and
Aviation Business from July 1993 to
November 1994. Mr. Cleberg was the
Group Controller of Honeywell's
Industrial Automation and Control
Division from June 1992 to July 1993
and was Group Controller for
Honeywell's Military Avionics
Systems Group from February 1991 to
June 1992.
* Member of the Audit Committee during 1996.
** Member of the Compensation Committee during 1996.
INFORMATION REGARDING THE BOARD OF DIRECTORS
AND ITS COMMITTEES FOR 1996
The Board of Directors met on four occasions during 1996. 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 1996, the Audit Committee consisted of Morris M. Sherman and
Anthony S. Cleberg, 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 two occasions during 1996.
COMPENSATION COMMITTEE; COMPENSATION COMMITTEE INTERLOCKS
During 1996, 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 1996.
No member of the Compensation Committee was, during the 1996 fiscal
year or previously, an officer or employee of the Company, nor did any member
have any relationship or transaction with the Company which is required to be
reported under Item 402(j) of Regulation S-K under the Securities Exchange Act
of 1934, as amended.
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. Pursuant to the
Venturian Corp. 1996 Non-Employee Director Stock Plan being submitted to the
shareholders for approval, and provided such approval is obtained, each
non-employee director shall be granted, on the day following each annual meeting
of shareholders, the lesser of 500 shares of the Company's Common Stock or the
largest number of whole shares having a fair market value on such day not
greater than $5,000.
In 1996, subject to shareholder approval, each of Messrs. Sherman,
McNamara, Utgaard and Ms. Rappaport have been granted 500 shares of Venturian
Corp. common stock.
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 March 31, 1997:
<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) 10.68%
Stock 225 W. Washington St., Suite 1650
Chicago, Illinois 60606
Common The Charles Schwab Company 44,144 (direct)(b) 5.88%
Stock Trustee for Venturian Group Profit
Sharing Plan and Trust
One Montgomery Street
San Francisco, California 94104
Common Gary B. Rappaport 64,888 (direct)(c) 24.27%
Stock 1600 Second Street South 119,599 (indirect)(d)
Hopkins, Minnesota 55343
Common Oppenheimer Group, Inc. 49,100 (indirect)(e) 6.55%
Stock World Financial Center
New York, New York 10281
</TABLE>
SECURITY OWNERSHIP OF MANAGEMENT
As of March 31, 1997, 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:
Amount and Nature
Title of Name of Beneficial Percentage
Class Beneficial Owner Ownership of Class
- -------- ------------------ ----------------- --------
Common Gary B. Rappaport 64,888 (direct)(c) 24.27%
Stock 119,599 (indirect)(d)
<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 Stuart B. Utgaard 500 (direct) *
Stock
Common Morris M. Sherman 600 (direct) *
Stock
Common Charles B. Langevin 33,650 (direct)(f) 4.33%
Stock
Common Richard F. McNamara 500 (direct) *
Stock
Common Debra L. Rappaport 8,835 (direct) 1.42%
Stock 1,845 (indirect)(g)
Common Mary F. Jensen 9,000 (direct)(h) 1.19%
Stock
Common Reinhild D. Hinze 11,027 (direct)(i) 1.46%
Stock
Common All directors and executive 129,000 (direct)
Stock officers as a group (11 in 121,944 (indirect)(j) 31.29%
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 10,000 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 44,144 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) Includes 26,250 shares of the common stock of the Company which Mr.
Langevin could acquire (but has not yet purchased) pursuant to presently
exercisable options.
(g) These shares are owned by a trust created by Mr. Rappaport's mother for the
benefit of Ms. Rappaport.
(h) 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.
(i) Includes 7,000 shares of the common stock of the Company which Ms. Hinze
could acquire (but has not yet purchased) pursuant to presently exercisable
options.
(j) Notes (c)-(d) and (f)-(i) are incorporated herein by this reference
thereto.
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, 60 1983(1)
President and Chief Executive
Officer - Venturian Corp. and
Napco International Inc.
Mary F. Jensen Chief Financial Officer - Venturian 42 1987(1)
Corp. and Napco International Inc.
Charles B. Langevin Director, President of 51 1986(1)
Napco International Inc.
Reinhild D. Hinze Treasurer, Vice President 47 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.
EMPLOYMENT AGREEMENTS
The Company has entered into an Employment Agreement with Mr. Langevin. The
Agreement provides a base salary of $102,000 in 1996 and $108,000 in 1997. The
employment term is two years. The Agreement is terminable for cause (as defined
therein) or upon Mr. Langevin's death. In addition, the Company may terminate
Mr. Langevin's employment at any time without cause upon 10 days written notice.
The Agreement also includes confidentiality provisions and a one year noncompete
provision.
EXECUTIVE COMPENSATION
Set forth below is certain information concerning compensation paid for
1996 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 1996 125,000 -- -- 8,549(1)
Chairman of the Board 1995 125,000 -- -- 9,200(1)
of Directors, President, 1994 117,187 -- -- 27,726(1)
Chief Executive Officer
Charles B. Langevin 1996 102,000 14,708 25,000 950(2)
President 1995 92,214 42,180 -- 576(2)
Napco International Inc. 1994 92,217 14,000 -- 461(2)
</TABLE>
(1) Includes amounts contributed by the Company pursuant to the matching
provisions of its Profit Sharing/401(k) Plan ($950, $781 and $299 in 1996,
1995 and 1994, 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 ($7,599, $8,419 and $10,427 in 1996, 1995 and 1994,
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 6.74%, 6.28% and 6.83% for 1996,
1995 and 1994, 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 $50,000 or 10% of the compensation reported for such person.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
NUMBER OF PERCENT OF POTENTIAL REALIZABLE
SECURITIES TOTAL OPTIONS VALUE AT ASSUMED
UNDERLYING GRANTED TO ANNUAL RATE OF STOCK
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION PRICE APPRECIATION FOR
NAME GRANTED(#) FISCAL YEAR PRICE ($/Sh) DATE OPTION TERM
- ---- ---------- ------------- ------------ ---------- ----------------------
5% 10%
------- --------
<S> <C> <C> <C> <C> <C> <C>
Charles B. Langevin 25,000 20.0% $5.75 2/22/2006 $90,404 $229,100
</TABLE>
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, 1996, 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, 1996 as quoted in
the National Association of Securities Dealers Automated Quotation System.
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised in-the-
Options at Year-End Money Options at Year-End
Name Options Exercisable/Unexercisable Exercisable/Unexercisable
---- ------- ------------------------- -----------------------------
<S> <C> <C> <C>
Gary B. Rappaport 10,000 10,000/--- $ 0/--
Charles B. Langevin 32,500 26,250/6,250 45,469/14,844
</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. Mr. Langevin received an
increase in base salary from $92,214 to $102,000 in 1996. No other executive
officer received an increase in base salary in 1996.
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. In 1996 the Committee granted an
aggregate of 75,000 incentive stock options to 29 employees, of which amount
executive officers were granted an aggregate of 35,000 options.
Stuart B. Utgaard
Richard F. McNamara
TRANSACTIONS WITH CERTAIN RELATED PARTIES
As of December 31, 1996, 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 $241,140 on March 31, 1997.
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 41 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
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
Venturian Corp. 100 155.65 119.93 95.11 82.71 134.40
Industry Group 100 111.69 136.49 130.49 175.13 216.43
NASDAQ Index 100 100.98 121.13 127.17 164.96 204.98
ADOPTION OF NON-EMPLOYEE DIRECTOR STOCK PLAN
The Board of Directors of the Company recommends the adoption of the
Venturian Corp. 1996 Non-Employee Director Stock Option Plan (the "Plan"). The
Plan was adopted by the Board of Directors in May 1996.
The Plan provides for the automatic grant of shares to non-employee
directors ("Director Shares"). Subject to adjustment as provided in the Plan,
the maximum number of Common Shares which can be granted under the Plan is
10,000. 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.
The purpose of the Plan is to advance the interests of the Company and its
shareholders by allowing the Company to better attract and retain the best
available persons for service as members of the Board of Directors and to
provide additional incentive to the non-employee directors to continue to serve
by affording them an opportunity to acquire a proprietary interest in the
Company. The Plan terminates on the earlier of: (i) May 9, 2001, (ii) the
decision of the Board of Directors to discontinue the Plan, or (iii) the grant
of all shares authorized under the Plan.
The Plan has the following features:
ADMINISTRATION.
The Plan is to be administered by the Board of Directors of the Company.
The board may authorize the Compensation Committee, consisting of at least two
directors, to exercise the powers conferred under the Plan, other than the
powers to amend or terminate the Plan.
Neither the Board nor the Compensation Committee may exercise any
discretion regarding to whom Director Shares will be granted, when they will be
granted or the number of Director Shares to be granted.
ELIGIBILITY AND GRANTS.
Each member of the Board of Directors is eligible to participate in the
Plan provided that the member is not currently, and has not during the previous
12-month period been, an employee of the Company or any of its subsidiaries.
Each eligible non-employee Director who was a Director of May 9, 1996 and
automatically received an initial grant of 500 shares. Thereafter, following
each annual meeting of shareholders of the company, each non-employee Director
automatically receives a grant of the lesser of 500 shares or the largest number
of whole shares having a fair market value not in excess of $5,000. Fair market
value of a Common Share is the average of the bid and asked price or the closing
price, as appropriate of the Common share as reported in the National
Association of Securities Dealers.
AMENDMENT.
The Board of Directors may amend or discontinue the Plan at any time,
provided, however, the Plan may not be amended more than once every six months,
other than to comply with changes in the Internal Revenue Code, the Employee
Retirement Income Security Act or the rules thereunder. In addition, the Board
may not take any action without shareholder approval if such action would (i)
increase by more than 10% the number of Common Shares issuable under the Plan
(not including increases to reflect stock splits and stock dividends), (ii)
change the eligibility requirements, or (iii) materially increase the benefits
which may accrue to participants under the Plan.
TERMS OF OUTSTANDING DIRECTOR OPTIONS.
Subject to shareholder approval, each of Messrs. Sherman, McNamara, Utgaard
and Ms. Rappaport have received grants of 500 Common Shares under the Plan.
As of March 31, 1997, the aggregate market value of the 2,000 Common Shares
granted under the Plan was $24,000, based on the average of the bid and asked
prices for a Common Share as quoted in the National Association of Securities
Dealers Automated Quotation System.
EFFECT ON FEDERAL INCOME TAXATION.
Generally, the acquisition of Common Shares under the Plan will result in
ordinary income to the recipient as of the date of issuance in an amount equal
to the fair market value of the Common Shares at such date. The Company will
generally be entitled to a deduction in an identical amount.
The foregoing summary of the Plan does not purport to be complete and is
qualified in its entirety by reference to the Plan. The full text of the Plan is
available to any shareholder who desires a copy, upon written request to the
Company, attention: Mary Jensen, 11111 Excelsior Boulevard, Hopkins, Minnesota
55343.
THE BOARD OF DIRECTORS RECOMMENDS APPROVAL OF THE VENTURIAN CORP. 1996
NON-EMPLOYEE DIRECTOR STOCK PLAN. A majority of the shares represented at the
annual meeting must be cast in favor of the Plan for it to be adopted.
The following table shows the benefits to be received by non-employee
directors under the Plan.
NEW PLAN BENEFITS
NAME AND POSITION DOLLAR VALUE($)* NUMBER OF UNITS
- ----------------- ---------------- ---------------
All current directors who are not 16,250 2,000
executive officers as a group (5
persons)
* Represents the value of the 2,000 shares received by non-employee directors in
1996, based on the closing price of a share of common stock on December 31,
1996.
In 1997, based on the closing price as of March 31, 1997, the Company will
issue 416 shares to each of its non-employee directors.
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, 1996. 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, 1997.
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 1996 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 1996, except that Messrs. Sherman, McNamara, Utgaard and
Ms. Rappaport each 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, 1997.
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 1996 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 7, 1997
VENTURIAN CORP.
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Venturian Corp.
11111 Excelsior Boulevard Annual Meeting of Shareholders, May 7, 1997
Hopkins, Minnesota 55343
The undersigned hereby appoints Morris M.
Sherman 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, 11111 Excelsior
Boulevard, Hopkins, Minnesota 55343, on
Wednesday, May 7, 1997 at 10:00 A.M., local
time, and any adjournment thereof, and
thereat to vote the undersigned's 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 three directors for a three-year term expiring on the date of
the annual meeting in 2000 as set forth below and until their successors
are elected.
[ ] FOR all the nominees listed [ ] WITHHOLD AUTHORITY for all
below nominees
Morris M. Sherman, Charles B. Langevin, Richard F. McNamara
To withhold authority for any individual nominee(s), write name(s)
below:
----------------------------------------------------------------------
2. Adoption of the Venturian Corp. 1996 Non-Employee Director Stock Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
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 MARK, SIGN, DATE AND RETURN 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: ___________________________, 1997
________________________________________
Signature
________________________________________
Signature
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE
Appendix to Venturian Corp. 1997 Proxy Statement
VENTURIAN CORP.
1996 NON-EMPLOYEE DIRECTOR
STOCK PLAN
1. Purpose of Plan
This Plan shall be known as the "Venturian Corp. 1996 Non-Employee
Director Stock Plan" and is hereinafter referred to as the "Plan." The purposes
of the Plan are to attract and retain the best available personnel for service
as directors of Venturian Corp. (the "Company") and to provide additional
incentive to the non-employee directors to continue to serve on the Board of
Directors by affording them an opportunity to acquire a proprietary interest in
the Company. It is intended that these purposes be effected through the granting
of stock as provided herein.
2. Stock Subject to Plan
The stock to be subject to the Plan shall be shares of the Company's
authorized Common Stock, par value $1.00 per share (the "Shares"). Subject to
the adjustment as provided in Section 7 hereof, the maximum number of Shares for
which grants may be made under this Plan shall be 10,000 Shares. Any Shares
which, for any reason, are cancelled or redeemed shall be again available for
grant during the term of the Plan.
3. Administration of Plan
The Plan shall be effective as of May 9, 1996, according to the terms
and conditions herein, and subject to subsequent approval by the shareholders of
the Company. The Plan shall be administered by the Board of Directors of the
Company (the "Board"). The Board may authorize the Compensation Committee
thereof, consisting of at least two (2) members appointed by the Board (the
"Committee"), to exercise the powers conferred on the Board under the Plan,
other than the power under Section 8 hereof to amend or terminate the Plan.
The interpretation and construction by the Board or Committee of any
provisions of the Plan shall be final. No member of the Board or Committee shall
be liable for any action or determination made in good faith with respect to the
Plan.
4. Eligibility and Grant
Each member of the Board who is not, and has not during the immediately
preceding 12-month period been, an employee of the Company or any subsidiary of
the Company shall automatically be a participant (a "Participant") in the Plan.
Subject to Section 10 hereof, each Participant is hereby granted 500
Shares. Each Participant shall also be granted, on the day following the
Company's Annual Meeting of Shareholders, that number of Shares equal to the
lesser of (x) 500 Shares or (y) the largest number of whole Shares having a fair
market value on such day not in excess of $5,000.
5. Fair Market Value
The "fair market value" on a specified date shall mean the average of
the bid and asked prices or the closing price, whichever is appropriate, at
which a Share is traded on the over-the-counter market, as reported in the
National Association of Securities Dealers Automated Quotation System, or the
closing price for a Share on the stock exchange, if any, on which Shares are
primarily traded, but if no Shares were traded on such dates, then on the last
previous date on which a Share was so traded or, if none of the above is
applicable, the value of a Share as established by the Board for such date using
any reasonable method of valuation.
6. Requirements
(a) The grant of Shares may be contingent upon receipt from the
Participant of a representation that the Participant is acquiring the Shares for
investment and not with a view to distribution thereof. Certificates for Shares
so issued may be restricted as to transfer upon advice of legal counsel that
such restriction is appropriate to comply with applicable securities laws and
shall be appropriately legended
(b) The grant of Shares hereunder shall only be effective at such time
as counsel to the Company shall have determined that the issuance and delivery
of Shares will not violate any state or federal securities or other laws. The
Company may, in its sole discretion, defer the effectiveness of any grant
hereunder in order to permit registration or an exemption from registration for
such issuance of Shares for the purpose of compliance with applicable federal
and state securities laws.
(c) Nothing in the Plan or in any agreement hereunder shall confer on
any Participant any right to continue as a director of the Company or affect, in
any way, the right of the Company to terminate his or her service as a director
at any time.
(d) If the Board (excluding the Director accused of misconduct)
determines that the Participant has committed an act of embezzlement, fraud,
dishonesty, nonpayment of an obligation owed to the Company, breach of fiduciary
duty or deliberate disregard of Company rules or policies resulting in loss,
damage or injury to the Company, or if a Participant makes an unauthorized
disclosure of any Company trade secret or confidential information, engages in
any conduct constituting unfair competition, induces any Company customer to
breach a contract with the Company, then the Participant shall forfeit his or
her Shares to the Company. In making such a determination, the Board (excluding
the Director accused of such misconduct) shall give the Participant an
opportunity to appear and present evidence on the Participant's behalf at a
hearing before the Board.
7. Dilution or other Adjustments
If there shall be any change in the Shares of the Company through
merger, consolidation, reorganization, recapitalization, stock dividend, stock
split or other change in the corporate structure, appropriate adjustments in the
Plan shall be made by the Board. In the event of any such changes, adjustments
shall include, where appropriate, changes in the aggregate number of Shares
subject to the Plan, in order to prevent dilution or enlargement of rights
hereunder.
8. Amendment or Discontinuance of Plan
The Board may amend or discontinue the Plan at any time provided,
however, that the Plan may not be amended more than once every six months, other
than to comport with changes in the Internal Revenue Code, the Employee
Retirement Income Security Act, or the rules thereunder. No amendment of the
Plan shall, without shareholder approval: (i) increase by more than 10% the
number of Shares issuable under the Plan as provided in Section 2 hereof (not
including increases to reflect stock splits and stock dividends); (ii) change
the eligibility requirements in Section 4 hereof; or (iii) materially increase
the benefits which may accrue to participants under the Plan.
9. Termination of Plan
Unless the Plan shall have been discontinued as provided in Section 8
hereof, or all Shares authorized hereunder shall have been granted, the Plan
shall terminate on May 9, 2001. No grant may be made after such date, but
termination of the Plan shall not alter or impair any rights or obligations of
the Company or the Participant under any grant.
10. Shareholder Approval
The Plan shall be null and void, and each grant hereunder shall be null
and void, if the shareholders of the Company shall not have approved the Plan
prior to May 9, 1997. In the event such shareholder approval is not so obtained,
any Shares granted hereunder shall be forfeited to the Company.
