SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
VENTURIAN CORP.
- --------------------------------------------------------------------------------
(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)(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:
<PAGE>
VENTURIAN CORP.
11111 EXCELSIOR BOULEVARD
HOPKINS, MINNESOTA 55343
(612) 931-2500
NOTICE AND PROXY STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 12, 1999
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 12, 1999 at 2:00 p.m.
Minneapolis time, for the following purposes:
1. To elect two directors for a term of three years.
2. 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 5, 1999 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 12, 1999
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE AND RETURN YOUR
PROXY CARD.
<PAGE>
PROXY STATEMENT
OF
VENTURIAN CORP.
11111 EXCELSIOR BOULEVARD, HOPKINS, MINNESOTA 55343
TELEPHONE NUMBER (612) 931-2500
Mailing Date: April 12, 1999
ANNUAL MEETING OF SHAREHOLDERS, MAY 12, 1999
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 12, 1999 at 2:00 p.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 5, 1999 are entitled to notice of and to vote at the annual
meeting. As of said date, there were outstanding 1,212,468 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
<PAGE>
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 2002. 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
<TABLE>
<CAPTION>
Principal Occupation or
Director of the Employment and Other
Nominee (Age) Company Since Directorships Held
------------- --------------- -----------------------
TO BE ELECTED FOR THREE YEAR TERMS EXPIRING ON THE DATE OF THE ANNUAL MEETING OF
SHAREHOLDERS IN 2002:
<S> <C> <C>
Gary B. Rappaport (62) September 1983 Chairman of the Board and Chief Executive Officer of
the Company since 1983, President from 1983 until
March 1996 and from December 1996 to February 1998.
Anthony S. Cleberg (46)* June 1996 Mr. Cleberg is presently Executive Vice President
and Chief Financial Officer of Morrison Knudsen
Corporation, an engineering, construction and
operations company doing business in approximately
33 countries. Mr. Cleberg was the Corporate Vice
President for Business Development for Honeywell,
Inc. from March 1995 to April 1997. 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
</TABLE>
2
<PAGE>
<TABLE>
<S> <C> <C>
for Honeywell's Military Avionics
Systems Group from February 1991 to June 1992.
DIRECTORS WHOSE TERM OF OFFICE WILL CONTINUE
TERMS EXPIRING ON THE DATE OF THE ANNUAL MEETING OF SHAREHOLDERS IN 2000:
Morris M. Sherman (63)* 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 (53) 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 (66)** 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.
TERMS EXPIRING ON THE DATE OF THE ANNUAL MEETING OF SHAREHOLDERS IN 2001:
Melissa E. Rappaport (31) May 1998 Ms. Rappaport is Director of Sales Performance and
Analysis at American West Airlines after previously
serving as Manager of Financial Planning from May
1996 to March 1997. Ms. Rappaport was a Senior
Analyst for Fleet Planning from January through May
1996 and an Analyst, Financial Planning from August
1994 and January 1996 with Northwest Airlines
Corporation. Ms. Rappaport received her M.B.A. from
the University of Chicago in June 1994. Ms.
Rappaport is the daughter of Gary B. Rappaport,
</TABLE>
3
<PAGE>
<TABLE>
<S> <C> <C>
Chairman of the Board and Chief Executive Officer of
the Company.
J. Stephen Schmidt (53)* May 1998 Mr. Schmidt has owned T.N.B. Holdings, Inc., a real
estate and financial holding company for more than
five years. Mr. Schmidt also serves as Chairman of
Wavecrest Technologies, a high-technology
electronics measurement company; Chairman, President
and Chief Executive Officer of PriMed International,
a development stage medical device company; and is a
consultant to the Board of Directors of
Shufflemasters Gaming, Inc., a supplier to the
gaming industry.
Stuart B. Utgaard (53)** July 1989 President, Enterprise Investments, Inc., for more
than five years. Enterprise Investments, Inc.
provides internal and external corporate growth
consulting services. Mr. Utgaard is also the
President of Sportsman's Warehouse, a retailer of
hunting, camping and fishing products, and Pacific
Flyway Wholesale, a wholesaler of hunting, camping
and fishing products.
</TABLE>
* Member of the Audit Committee during 1998.
** Member of the Compensation Committee during 1998.
INFORMATION REGARDING THE BOARD OF DIRECTORS
AND ITS COMMITTEES FOR 1998
The Board of Directors met on four occasions during 1998. 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 1998, the Audit Committee consisted of Morris M. Sherman,
Anthony S. Cleberg and J. Stephen Schmidt, 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 one occasion during 1998.
4
<PAGE>
COMPENSATION COMMITTEE; COMPENSATION COMMITTEE INTERLOCKS
During 1998, 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 1998.
No member of the Compensation Committee was, during the 1998 fiscal
year or previously, an officer or employee of the Company, nor did any member
have any relationship or transaction 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, 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 1998, each of Messrs. Sherman, McNamara, Utgaard, Cleberg, Schmidt
and Ms. Rappaport were granted 707 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 April 5, 1999:
<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 Quarterdeck Public Equities, LLC 129,610 (direct) (a) 10.16%
Stock 10100 Santa Monica Boulevard 21,000 (indirect) (b) 1.73%
Suite 1425
Los Angeles, CA 90067
</TABLE>
5
<PAGE>
<TABLE>
<S> <C> <C> <C>
Common Hesperus Partners Ltd. 63,876 (direct) (c) 5.27%
Stock 225 W. Washington St., Suite 1650
Chicago, Illinois 60606
Common White Dwarf Partners, L.P. 56,274 (direct)(c) 4.64%
Stock 225 W. Washington St., Suite 1650
Chicago, Illinois 60606
Common The Charles Schwab Company 66,216 (direct) (d) 5.46%
Stock Trustee for Venturian Group Profit
Sharing Plan and Trust
One Montgomery Street
San Francisco, California 94104
Common Gary B. Rappaport 124,932 (direct) (e) 24.24%
Stock 11111 Excelsior Boulevard 178,363 (indirect) (f)
Hopkins, Minnesota 55343
Common Oppenheimer Group, Inc. 73,650 (indirect) (g) 6.07%
Stock World Financial Center
New York, New York 10281
</TABLE>
6
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
As of April 5, 1999, 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 of of Beneficial Percentage
Class Beneficial Owner Ownership of Class
- ---------- ---------------- ----------------- ----------
<S> <C> <C> <C>
Common Gary B. Rappaport 124,932 (direct)(e) 24.24%
Stock 178,363 (indirect)(f)
Common Stuart B. Utgaard 4,207 (direct) *
Stock
Common Morris M. Sherman 2,357 (direct) *
Stock
Common Charles B. Langevin 59,850 (direct)(h) 4.75%
Stock
Common Richard F. McNamara 2,207 (direct) *
Stock
Common Don M. House, Jr. 30,000 (direct)(i) 2.41%
Stock
Common Anthony S. Cleberg 4,457 (direct) *
Stock
Common J. Stephen Schmidt 55,757 (direct) 4.60%
Stock
Common Melissa E. Rappaport 13,022 (direct) 1.07%
Stock
Common Mary F. Jensen 20,250 (direct)(j) 1.65%
Stock
Common Reinhild D. Hinze 19,541 (direct)(k) 1.59%
Stock
</TABLE>
7
<PAGE>
<TABLE>
<S> <C> <C> <C>
Common All directors and executive 336,580 (direct)
Stock officers as a group (11 in 178,363 (indirect)(l) 37.85%
number including the above)
</TABLE>
* Less than 1% of the outstanding shares.
(a) Includes 63,005 shares of common stock issuable pursuant to a debenture
convertible by Quarterdeck Public Equities, LLC, at its option, at $8.00
per share.
(b) Shares owned by Jon D. Kutler, an affiliate of Quarterdeck Public Equities,
LLC.
(c) Hesperus Partners Ltd. ("Hesperus") and White Dwarf Partners, L.P. ("White
Dwarf") are affiliates. Voting and investment power with respect to the
shares owned by Hesperus 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., and, with respect to the
shares owned by White Dwarf, may be deemed shared with Pluto L.L.C., the
general partner of White Dwarf.
(d) 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.
(e) Includes 38,600 shares of the common stock of the Company which Mr.
Rappaport could acquire (but has not yet purchased) pursuant to presently
exercisable options.
(f) 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 66,216 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.
(g) 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.
(h) Includes 48,750 shares of the common stock of the Company which Mr.
Langevin could acquire (but has not yet purchased) pursuant to presently
exercisable options.
(i) Consists of 30,000 shares of the common stock of the Company which Mr.
House could acquire (but has not yet purchased) pursuant to presently
exercisable options.
8
<PAGE>
(j) Includes 17,250 shares of the common stock of the Company which Ms. Jensen
could acquire (but has not yet purchased) pursuant to presently exercisable
options.
(k) Includes 13,500 shares of the common stock of the Company which Ms. Hinze
could acquire (but has not yet purchased) pursuant to presently exercisable
options.
(l) Notes (e)-(k) 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 and 62 1983(1)
Chief Executive Officer -
Venturian Corp. and
Napco International Inc.
Mary F. Jensen Chief Financial Officer - Venturian 44 1987(1)
Corp. and Napco International Inc.
Charles B. Langevin Director, President of 53 1986(1)
Napco International Inc.
Reinhild D. Hinze Treasurer, Vice President 49 1985(1)
Operations - Napco
International Inc. and
Assistant Secretary - Venturian
Corp.
Don M. House, Jr. President and Chief Operating 46 1998(2)
Officer - Venturian Corp.
</TABLE>
(1) Each of the indicated officers has been employed by the Company for more
than five years.
(2) Mr. House joined the Company in December 1997. In February 1998 he was
appointed President and Chief Operating Officer by the Board of Directors.
Previously, Mr. House was President of Porsa System, Inc., a designer and
builder of custom fixtures and displays, from July 1996 to July 1997. Mr. House
also served as President of P.C. Express, Inc. from April 1995 to December 1995
and President of Apeiron, Inc., a start-up
9
<PAGE>
manufacturer of high precision laser measurement systems, from May 1994 to April
1995. Mr. House was President of Comtrol Corp., a manufacturer of multiport
serial communications controllers from October 1989 to October 1993. Prior to
October 1989, Mr. House served in various capacities at Honeywell Information
Systems for more than 10 years.
EXECUTIVE COMPENSATION
Set forth below is certain information concerning compensation paid for
1998 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 1998 125,000 40,000 38,600 4,976(1)
Chairman of the Board 1997 125,000 -- -- 6,896(1)
of Directors, President, 1996 125,000 -- -- 8,549(1)
Chief Executive Officer
Charles B. Langevin 1998 120,000 175,512 -- 1,310(2)
President 1997 108,000 -- -- 756(2)
Napco International Inc. 1996 102,000 14,708 37,500 950(2)
Don M. House, Jr.(3) 1998 120,000 80,000 -- --
President 1997 7,769 -- -- --
Venturian Corp.
Mary F. Jensen 1998 70,164 38,790 -- 2,450(2)
Chief Financial Officer 1997 61,000 -- -- 625(2)
Venturian Corp. and 1996 61,000 6,967 7,500 548(2)
Napco International Inc.
Reinhild D. Hinze 1998 63,600 38,790 -- 2,246(2)
Vice President, Operations 1997 63,600 -- -- 533(2)
Napco International Inc. 1996 63,600 6,967 7,500 572(2)
</TABLE>
(1) Includes amounts contributed by the Company pursuant to the matching
provisions of its Profit Sharing/401(k) Plan ($1,310, $950 and $950 in
1998, 1997 and 1996, 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 ($3,666, $5,946 and $7,599 in
1998, 1997 and 1996, respectively). The benefits to Mr. Rappaport were
computed using the "foregone interest" method, which measures the
difference between the
10
<PAGE>
Company's current premium payment and the present value of its recovery of
such premium, utilizing a discount rate of 5.56%, 6.65% and 6.74% for 1998,
1997 and 1996, respectively.
(2) Consists of amounts contributed by the Company pursuant to the matching
provisions of its Profit Sharing/401(k) Plan.
(3) Mr. House joined the Company in December 1997.
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 $50,000 or 10% of the compensation reported for such person.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF POTENTIAL REALIZABLE
SECURITIES TOTAL OPTIONS VALUE AT ASSUMED
UNDERLYING GRANTED TO ANNUAL RATE OF STOCK
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION PRICE APPRECIATION FOR
NAME GRANTED (#) FISCAL YEAR PRICE ($/SH) DATE OPTION TERM
- ---- ----------- ------------- ------------ ---------- ----------------------
5% 10%
-- ---
<S> <C> <C> <C> <C> <C> <C>
Gary B. Rappaport 38,600 92.7% $7.7675 5/5/2003 $82,850 $183,076
</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, 1998, 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, 1998 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 38,600 38,600/ -- -- / --
Charles B. Langevin 48,750 48,750/ -- $174,079/ --
Don M. House 30,000 30,000/15,000 37,500/15,000
Mary F. Jensen 12,000 12,000/3,000 40,254/7,251
Reinhild D. Hinze 12,000 12,000/3,000 40,254/7,251
</TABLE>
11
<PAGE>
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 $108,000 to $120,000 in 1998. Ms. Jensen received
an increase in base salary from $61,000 to $72,000 in 1998. No other executive
officer received an increase in base salary in 1998.
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. The executive officers
received an aggregate of $373,092 in bonuses in 1998.
12
<PAGE>
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 1998 the Committee granted an
aggregate of 41,600 incentive stock options to 2 employees, of which amount one
executive officer was granted an aggregate of 38,600 options.
Stuart B. Utgaard
Richard F. McNamara
TRANSACTIONS WITH CERTAIN RELATED PARTIES
As of December 31, 1998, loans totaling $132,143 under the Company's Loan
Program for Key Executive Officers were outstanding from its executive officers,
of which $70,268 was loaned to Mr. Rappaport, $40,000 was loaned to Mr.
Langevin, and $21,875 was loaned to Ms. Hinze. The loans are secured by 18,595
shares of the Company's common stock, which had an aggregate market value of
$102,273 on April 5, 1999.
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 63 aerospace and defense product and service
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
<TABLE>
<CAPTION>
COMPANY 1992 1994 1995 1996 1997 1998
------- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Venturian Corp. 100 79.31 68.96 112.07 127.59 160.26
Industry Index 100 97.36 124.50 158.71 217.96 203.03
Broad Market 100 104.99 136.18 169.23 207.00 291.96
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INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The firm of Grant Thornton LLP, independent certified public accountants,
was engaged to audit the books and accounts of the Company for its fiscal year
ended December 31, 1998. 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 or she 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, 1999.
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 1998 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 1998.
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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, 1999.
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 1998 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 12, 1999
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<S> <C> <C> <C> <C> <C>
VENTURIAN CORP THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROXY ANNUAL MEETING OF SHAREHOLDERS, MAY 12, 1999
The undersigned hereby appoints Morris M. Sherman and Don M. House, Jr., 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 12, 1999
at 2:00 p.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:
VENTURIAN CORP.
11111 Excelsior Boulevard
Hopkins, Minnesota 55343
1. Election of two directors for a three-year term expiring on the date of the annual meeting in 2002 as
set forth below and until their successors are elected.
[ ] FOR all the nominees listed below [ ] WITHHOLD AUTHORITY for all nominees
GARY B. RAPPAPORT, ANTHONY S. CLEBERG
To withhold authority for any individual nominee(s), write name(s) below:
----------------------------------------------------------------------
(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 PROPOSAL 1.
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: _______________________, 1999
----------------------------------
Signature
-----------------------------------
Signature
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
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