SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X] Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for use of the commission only (as permitted by Rule
14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
REGI U.S., INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on
which the filing fee is calculated and state how it was
determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing or 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>
REGI U.S., INC.
#185-10751 SHELLBRIDGE WAY
RICHMOND, BRITISH COLUMBIA V6X 2W8
CANADA
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 5, 2000
To the Shareholders of REGI U.S., Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of REGI U.S.,
Inc. (the "Company") will be held in Salon #216 of the Holiday Inn, Vancouver
Airport, 10720 Cambie Road, Richmond, British Columbia, Canada, on Tuesday,
December 5, 2000, at 10:00 a.m. for the purpose of considering and voting upon
the following matters:
1. ELECTION OF DIRECTORS. To elect three (3) directors for a term of one
year or until their successors have been elected and qualified.
2. APPROVAL OF AUDITOR. Approval of Manning, Elliott as auditor until the
close of the next Annual Meeting.
3. AMENDMENT TO STOCK OPTION PLAN. Approval of increase in maximum number
of shares which may be optioned and sold pursuant to the Stock Option Plan.
4. WHATEVER OTHER BUSINESS may properly come before the Annual Meeting or
any adjournments thereof.
Only those shareholders of record at the close of business on October 25th, 2000
shall be entitled to notice of, and to vote at, the Annual Meeting or any
adjournments thereof.
Further information regarding voting rights and the business to be transacted at
the Annual Meeting is given in the accompanying Proxy Statement. Your continued
interest as a shareholder in the affairs of the Company, its growth and
development, is genuinely appreciated by the directors, officers and personnel
who serve you.
November 10, 2000 BY ORDER OF THE BOARD OF
DIRECTORS
/s/ John Robertson
---------------
John Robertson
President
YOUR VOTE IS IMPORTANT
----------------------
Whether or not you plan to attend the Annual Meeting, please sign and date your
Proxy card and return it in the enclosed postage prepaid envelope.
<PAGE>
REGI U.S., INC.
#185-10751 SHELLBRIDGE WAY
RICHMOND, BRITISH COLUMBIA V6X 2W8
CANADA
PROXY STATEMENT
---------------
Information Concerning the Solicitation of Proxies
This Proxy Statement and the accompanying Proxy is furnished to the shareholders
of REGI U.S., INC. (the "Company") in connection with the solicitation of
proxies on for use at the Company's Annual Meeting of Shareholders (the "Annual
Meeting"). The Annual Meeting will be held on Tuesday, December 5, 2000, at
Salon #216 of the Holiday Inn Vancouver Airport, 10720 Cambie Road, Richmond,
British Columbia, Canada, at 10:00 am.(PST). A copy of the Company's annual
report on Form 10-KSB was made available to shareholders electronically via
filing on EDGAR on August 31, 2000, and accompanies this Proxy Statement.
Only stockholders of record on October 25, 2000 are entitled to vote at the
Annual Meeting.
The enclosed Proxy is solicited by and on behalf of the Board of Directors of
the Company, with the cost of solicitation borne by the Company. Solicitation
may be made by directors and officers of the Company. Solicitation may be made
by use of the mails, by telephone, facsimile and personal interview. The
Company does not expect to pay any compensation for the solicitation of proxies,
except to brokers, nominees and similar recordholders for reasonable expenses in
mailing proxy materials to beneficial owners.
If the enclosed Proxy is duly executed and received in time for the Annual
Meeting, it is the intention of the persons named in the Proxy to vote the
shares represented by the Proxy FOR the three nominees listed in this Proxy
Statement and FOR the other items listed in the Proxy, unless otherwise
directed. Any proxy given by a shareholder may be revoked before its exercise
by notice to the Company in writing, by a subsequently dated proxy, or at the
Annual Meeting prior to the taking of the shareholder vote. The shares
represented by properly executed, unrevoked proxies will be voted in accordance
with the specifications in the Proxy. Shareholders have one vote for each share
of Common Stock held, including the election of directors. Shareholders are not
entitled to cumulate their votes in the election of directors.
This Proxy Statement and the accompanying Proxy are being sent to shareholders
on or before November 15, 2000.
Record Date and Voting Rights
The record date for determination of Stockholders who are entitled to notice of
and to vote at the Annual Meeting is October 25, 2000.
The Company is authorized to issue up to 20,000,000 shares of common stock,
without par value. As of October 31, 2000, there were 10,217,735 shares of
common stock issued and outstanding. Each share of Common Stock is entitled to
one vote on all matters submitted for shareholder approval.
BUSINESS OF THE MEETING
There are three (3) matters being presented for consideration by the
shareholders at the Annual Meeting, the election of three (3) directors; the
approval of Manning Elliott as auditor of the Company, and the amendment to the
Stock Option Plan.
<PAGE>
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
GENERAL
The Company's Bylaws ("Bylaws") provide that the number of directors must fall
within a range of 2 to 9, the exact number to be determined by the shareholders.
Directors are elected for a term of one year and until their successors have
been elected and qualified. There are currently three (3) directors of the
Company.
INFORMATION WITH RESPECT TO NOMINEES
The following table lists the persons nominated by the Board of Directors for
election as directors and also lists certain information with respect to those
persons.
<TABLE>
<CAPTION>
Principal Occupation of
Nominee Age Since Director Ownership [1] Ownership
------- --- ----- ------------------------ -------------- ---------
<S> <C> <C> <C> <C> <C>
John G. Robertson 59 July 1992 Executive Officer 5,676,050 55.55%
common
shares [2]
Brian Cherry 60 July 1992 Vice President 300,500 2.94%
common
shares [3]
James L. Vandeberg 56 November Partner, Ogden Murphy 75,000 0.73%
1999, COO Wallace common shares [4]
since
November
1999
<FN>
[1] The ownership includes the beneficial ownership of securities and the beneficial ownership of
securities that can be acquired within 60 days from October 31, 2000 upon the exercise of options.
Each beneficial owner's percentage ownership is determined by assuming that options that are held by
such person and which are exercisable within 60 days from October 31, 2000, are exercised, for the
purpose of computing percentage ownership.
[2] John Robertson has been a director since July 1992. Includes rights to purchase, pursuant to
stock options, 300,000 common shares at $1.00 per share granted on June 12, 1997, which expire January
3, 2001. Includes 5,367,900 shares registered in the name of Rand Energy Group Inc. See Note (5)
below for an explanation of the beneficial ownership of Rand Energy Group, Inc. Mr. Robertson
disclaims beneficial ownership of these shares beyond the extent of his pecuniary interest. Mr.
Robertson's address is the same as the Company's.
[3] Brian Cherry has been a director of the Company since July 1992. Includes rights to
purchase, pursuant to stock options, 50,000 common shares at $1.00 per share granted on June 26,
1997, and rights to purchase, pursuant to stock options, 75,000 common shares at $0.75 per share
granted on November 11, 1998. Mr. Cherry's address is the same as the Company's.
[4] James Vandeberg was appointed to the Board of Directors in November 1999. Includes rights to
purchase, pursuant to stock options, 75,000 common shares at $0.75 per share granted on November 29,
1999. Mr. Vandeberg's address is Ogden Murphy Wallace, One Union Square, Suite 2424, Seattle,
Washington.
[5] Rand Energy Group Inc. is owned 51% by Reg Technologies Inc. and 49% by Rand Cam Engine Corp.
Under Rule 13d-3 under the Securities Exchange Act of 1934, both Reg Technologies Inc. and Rand Cam
Engine Corp. could be considered the beneficial owner of the 5,367,900 shares registered in the name
of Rand Energy Group Inc. Reg Technologies Inc. is a British Columbia corporation listed on the
Canadian Venture Exchange that has financed the research on the Rand Cam Engine since 1986. Since
October 1984 Mr. Robertson has been President and a Director of Reg Technologies Inc. SMR Investment
Ltd., a British Columbia corporation, holds a controlling interest in Reg Technologies Inc. Since May
1977 Mr. Robertson has been President and a member of the Board of Directors of SMR Investments Ltd.
Susanne M. Robertson, Mr. Robertson's wife, owns SMR Investment Ltd.
Accordingly, in Note (2) above, beneficial ownership of the 5,367,900 shares registered in the name of
Rand Energy Group Inc. has been attributed to Mr. Robertson. The Company believes it would be
misleading and not provide clear disclosure to list as beneficial owners in the table the other
entities and persons discussed in this paragraph, although a strict reading of Rule 13d-3 under the
Securities Exchange Act of 1934 might require each such entity and person to be listed in the
beneficial ownership table.
</TABLE>
<PAGE>
BACKGROUND OF NOMINEES
JOHN G. ROBERTSON - PRESIDENT, PRINCIPAL EXECUTIVE OFFICER AND A MEMBER OF THE
BOARD OF DIRECTORS
Mr. Robertson has been the President and Principal Executive Officer and a
Director of the Company since its formation in July, 1992. Since October 1984
Mr. Robertson has been President and a Director of Reg Technologies Inc., a
British Columbia corporation listed on the Canadian Venture Exchange that has
financed the research on the Rand Cam Engine since 1986. REGI U.S. is ultimately
controlled by Reg Technologies Inc. REGI U.S. is controlled by Rand Energy
Group, Inc., a British Columbia corporation of which Reg Technologies Inc. is
the majority shareholder. REGI U.S. owns the U.S. rights to the Rand Cam (TM)
technology and Rand Energy Group, Inc. owns the worldwide rights exclusive of
the U.S. Mr. Robertson has been the Chairman, President and Chief Executive
Officer of IAS Communications, Inc., an Oregon corporation traded on the OTC
bulletin board, since December 1994. Since June 1997 Mr. Robertson has been
President, Principal Executive Officer and a Director of Information
Highway.com, Inc., a Florida corporation traded on the OTC bulletin board. Mr.
Robertson is also the President and Founder of Teryl Resources Corp., a British
Columbia company trading on the Canadian Venture Exchange involved in mineral
exploration. He is also President of LinuxWizardry Systems, Inc. (formerly Flame
Petro-Minerals Corp.), a British Columbia company trading on the OTC bulletin
board involved in development and marketing of Linux-based products. Since May
1977 Mr. Robertson has been President and a member of the Board of Directors of
SMR Investments Ltd., a private British Columbia corporation engaged in
management of public companies.
JAMES L. VANDEBERG - CHIEF OPERATING OFFICER AND A MEMBER OF THE BOARD OF
DIRECTORS
Mr. Vandeberg became a director of the Company and its Chief Operating Officer
in November 1999. Mr. Vandeberg is a partner in the Seattle, Washington law
firm of Ogden, Murphy, Wallace. He has served as counsel to the Company since
1996. Mr. Vandeberg's practice focuses on the corporate finance area, with an
emphasis on securities and acquisitions. Mr. Vandeberg was previously general
counsel and secretary of two NYSE companies and is a director of Information
Highway.com, Inc., a Florida corporation traded on the OTC bulletin board. He is
also a Director and Chief Operating Officer of IAS Communications, Inc., an
Oregon corporation traded on the OTC bulletin board. He is a member and former
director of the American Society of Corporate Secretaries. He became a member
of the Washington Bar Association in 1969 and of the California Bar Association
in 1973. Mr. Vandeberg graduated cum laude from the University of Washington
with a Bachelor of Arts degree in accounting in 1966, and from New York
University School of Law in 1969, where he was a Root-Tilden Scholar.
BRIAN CHERRY - VICE PRESIDENT AND A MEMBER OF THE BOARD OF DIRECTORS
Mr. Cherry has been Vice President and a Director of the Company since its
inception in July 1992. Since October 1994 Mr. Cherry has served as Vice
President in charge of patents and technology for the Rand Cam Engine. Since
April 1990 Mr. Cherry has been a director of Reg Technologies, Inc., a British
Columbia corporation listed on the Canadian Venture Exchange that has financed
the research on the Rand Cam Engine since 1986.
VOTE REQUIRED
A majority of votes by the shares of common stock present or represented and
voting at the meeting is required to elect the nominees.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING FOR ALL NOMINEES FOR THE
BOARD OF DIRECTORS.
<PAGE>
EXECUTIVE COMPENSATION OF MANAGEMENT, OWNERSHIP OF CERTAIN
STOCKHOLDERS, AND CERTAIN RELATED TRANSACTIONS
The following table lists the Company's executive officers during fiscal year
2000:
<TABLE>
<CAPTION>
Positions with the
Name Company Age Office Held Since
------------------------------ ----------------------- --- ---------------------
<S> <C> <C> <C>
John G. Robertson President and Chief
Executive Officer 59 July 1992
James Vandeberg Chief Operating Officer 56 Director since
November 1999; and
COO since August 1999
Brian Cherry Vice President 60 July 1992
Patrick Badgely Vice President 56 February 1994
Jennifer Lorette Secretary and Chief 28 Vice President and CFO
Financial Officer since June 1994;
Secretary since October,
1997; and Treasurer since
October 1996
</TABLE>
Executive officers are elected annually by the Board of Directors and serve at
the pleasure of the Board. There is no family relationship between any of the
officers and directors. Memberships on the Boards of other public companies are
set out on page 3 in the biographies of each of the nominee directors, and
memberships on the Boards of other public companies for each of the executive
officers who are not directors are set out below.
BACKGROUND OF EXECUTIVE OFFICERS
The biographies of Messrs. Robertson and Vandeberg, and Cherry can be found on
page 3.
PATRICK BADGLEY - was appointed Vice President, Research and Development of the
Company in February 1994. He is directing and participating in the technical
development of the Rand Cam compressor, gasoline engine and diesel engine.
Previously, Mr. Badgley had been employed for 16 years at Adiabatics, Inc., in
Columbus, Indiana. Between 1986 and 1994, Mr. Badgley was the Director of
Research and Development at Adiabatics, where he directly oversaw several
government and privately sponsored research programs including the lightweight,
quiet 30 kW APU project for ARPA. He was also the Program Manager for the Gas
Research Institute project for emissions reduction of two-stoke cycle natural
gas engines. He was also Program Manger for several coal fuel diesel engine
programs for the Department of Energy and for uncooled engine programs for a
Wankel engine for NASA and for a piston type diesel engine for the U.S. Army.
Mr. Badgley's work has covered all phases of research, design, development and
manufacturing, from research on ultra-high speed solenoids and fuel sprays, to
new product conceptuali-zation and production implementation of fuel pumps and
fuel injectors. Previously, he also worked at Curtiss Wright and John Deere on
Wankel engine development. Mr. Badgley received his Bachelor of Science degree
in Mechanical Engineering from Ohio State University and has done graduate work
at Purdue University. Since December 1994, Mr. Badgley has been a Vice
President of IAS Communications, Inc., an Oregon corporation traded on the OTC
bulletin board. Since July 1993 he has been a Director of Reg Technologies
Inc., a British Columbia corporation listed on the Canadian Venture Exchange.
REGI U.S. is ultimately controlled by Reg Technologies Inc.
<PAGE>
SIGNIFICANT EMPLOYEES:
CAROL COLEMAN
--------------
Ms. Coleman, 40, is a Chartered Accountant with over 10 years of experience in
the accounting industry. Her accounting background is in a variety of areas
including manufacturing and high-tech. Ms. Coleman's joined the Company in
October 1999. Her duties as Controller of the Company include management of the
accounting, management reporting, banking, insurance and payroll.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely upon a review of Forms 3, 4 and 5 furnished to the Company, other
than Mr. Vandeberg, Mr. Badgley, and Mr. Cherry, who furnished no Forms to the
Company during the year, no officer, director or beneficial owner of more than
ten percent of the Common Stock of the Company failed to file on a timely basis
reports required to be filed by Section 16(a) of the Exchange Act during the
most recent fiscal year.
BOARD COMMITTEES
The Board of Directors does not have any committees.
BOARD OF DIRECTORS MEETINGS
The Company held no Board meetings since its last annual meeting. The Company
passed three consent resolutions approved by all directors.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS.
To the best knowledge of the Officers and Directors of the Company, neither the
Company nor any of its Officers, Directors or nominees are parties to any legal
proceeding or litigation other than as described below. Further, the Officers
and Directors know of no threatened or contemplated legal proceedings or
litigation other than as described below. None of the Officers and Directors
have been convicted of a felony or none have been convicted of any criminal
offense, felony and misdemeanor relating to securities or performance in
corporate office. To the best of the knowledge of the Officers and Directors,
no investigations of felonies, misfeasance in office or securities
investigations are either pending or threatened at the present time.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
The following table sets forth the aggregate cash compensation paid for services
rendered to the Company during the last three fiscal years by the Company's
Chief Executive Officer and the Company's most highly compensated execu-tive
officers who served as such at the end of the last fiscal year. No executive
officer had an annual salary and bonus in excess of $100,000 during such year.
<PAGE>
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
NAME AND OTHER ANNUAL SECURITIES UNDERLYING
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) COMPENSATION ($) OPTIONS/SARS (#) (1)
-------------------- ---------- ---------- --------- ---------------- --------------------
<S> <C> <C> <C> <C> <C>
John G. Robertson. . 2000 -0- -0- -0- -0-
President, Chief . . 1999 -0- -0- -0- -0-
Executive Officer. . 1998 -0- -0- -0- -300,000-
-------------------- ---------- ---------- ---------- --------------- --------------------
<FN>
(1) Represents options granted June 12, 1997 under the Company's Stock Option Plan exercisable
within 60 days from October 31, 2000.
</TABLE>
A management fee of $2,500.00 per month is accrued for payment to Access
Information Services, Inc., a corporation controlled by the Robertson Family
Trust, the beneficiary of which is Kelly Robertson, daughter of John G.
Robertson. Further, the sum of $1,500.00 per month is accrued for payment to
Access Information Services, Inc. for rent and secretarial services.
The Company has no other agreement at this time, with any officer or director,
regarding employment with the Company or compensation for services other than
herein described. Compensation of officers and directors is determined by the
Company's Board of Directors and not subject to shareholder approval. The
Company may in the future create retirement, pension, profit sharing, insurance
and medical reimbursement plans covering its Officers and Directors. At the
present time, no such plans exist. No advances have been made or are
contemplated by the Company to any of its Officers or Directors.
Option Grants in Last Fiscal Year (Individual Grants)
<TABLE>
<CAPTION>
Number of
Securities Percent of total
Underlying options granted to
Options granted employees in Exercise or base
Name (#) fiscal year price ($/share) Expiration date
--------------- ---------------- ------------------- ------------------ -----------------
<S> <C> <C> <C> <C>
James Vandeberg 75,000 15.79% $ 0.75 November 29, 2004
--------------- ---------------- ------------------- ------------------ -----------------
</TABLE>
STOCK OPTIONS EXERCISED AND HELD AT YEAR END
The following table sets forth certain information concerning exercises of stock
options pursuant to a stock option plan by the named Executive Officers and
Directors during the year ended April 30, 2000 and stock options held at year
end.
<PAGE>
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR END OPTION VALUES
Value of
Number of Options at
Options at Year End Year End (1)
Shares
Acquired on Value
Name Exercise Realized Exercisable / Unexercisable Exercisable / Unexercisable
<S> <C> <C> <C> <C>
------------------ ------------------- ------------ --------------------------- ----------------------------
John G. Robertson. -0- -0- 300,000 / 0 $ Nil / 0
------------------ ------------------- ------------ --------------------------- ----------------------------
Brian Cherry . . . -0- -0- 125,000 / 0 $ 2,325 / 0
------------------- ------------ --------------------------- ----------------------------
Patrick Badgley. . -0- -0- 0 / 0 $ Nil / 0
------------------- ------------ --------------------------- ----------------------------
James L. Vandeberg -0- -0- 75,000 / 0 $ 2,325 / 0
------------------- ------------ --------------------------- ----------------------------
Jennifer Lorette . -0- -0- 60,000 / 0 $ 310 / 0
------------------ ------------------- ------------ --------------------------- ----------------------------
<FN>
(1) On April 30, 2000, the closing price of Common Stock was $0.781. For purposes of the foregoing table,
stock options with an exercise price less than that amount are considered to be "in-the-money" and are
considered to have a value equal to the difference between this amount and the exercise price of the stock
option multiplied by the number of shares covered by the stock option.
</TABLE>
STOCK OPTION PLAN
The Company adopted a Key Employees Incentive Stock Option Plan on April 30,
1993 and was subsequently amended as the Stock Option Plan (the "Plan") on March
30, 1995 and effective November 1, 1996. A total of 1,000,000 shares were
approved by the Board of Directors for issuance under the option agreements,
subject to the Plan, to key employees, officers, directors and consultants of
the Company. During the fiscal year, 475,000 options were granted under the
Plan to certain employees and consultants in connection with normal employment
and consulting practice, with the exercise price being $0.75 per share as to
175,000 shares, $1.00 as to 150,000 shares and $1.25 as to 150,000 shares.
The Plan permits the grant of stock options to employees, officers, directors
and consultants. There are approximately seven (7) persons under the Plan. The
purpose of the Plan is to attract the best available personnel to the Company
and to give employees a greater personal stake in the success of the Company.
The Plan is effective until November 1, 2006. Stock options are granted at the
discretion of the directors.
The terms of the Plan include the following information. The Plan is
administered by the Board of Directors of the Company or a committee so
designated by it comprised of three (3) Board members. Under the Plan, the
option price for the common shares to be issued under the Plan will be
determined by the Board except in the case of an Incentive Stock Option, as
defined in the Plan, the price not less than the fair market value of the
Company's common shares on the date of grant of the stock option. If the
optionee owns common shares representing more than 10% of the combined total
voting power of all classes of shares of the Company (the
"Shareholder-Optionee"), then the option price must be at least 110% of the fair
market value of the common shares on the date of the grant. The term of the
stock option granted under the Plan may not exceed 10 years from the date such
option is granted, unless the optionee is a Shareholder-Employee, then the term
of option may not exceed five years from the date of the grant. The market
value of the securities underlying the options as at October 31, 2000 was
$388,125.
<PAGE>
U.S. Federal Tax Consequences
Non-Qualified Stock Options
The grant of non-qualified stock options under the Plan will not result in the
recognition of any taxable income by the optionee. An optionee will recognize
ordinary income on the date of exercise of the non-qualified stock option equal
to the excess, if any, of (1) the fair market value of the Common Shares
acquired as of the exercise date, over (2) the exercise price. The tax basis of
these Common Shares for purposes of a subsequent sale includes the non-qualified
option price paid and the ordinary income reported on exercise of the
non-qualified stock option. The income reportable on exercise of a
non-qualified stock option is subject to federal income and employment tax
withholding. Generally, the Company will be entitled to a deduction for its
taxable year within which the optionee recognizes compensation income in the
amount reportable as income by the optionee on the exercise of a non-qualified
stock option.
Incentive Stock Options (qualified under Section 422 of the Code)
In general, an optionee will not recognize taxable income upon the grant or
exercise of an incentive stock option. However, upon the exercise of an
incentive stock option, the excess of the fair market value on the date of
exercise of the Common Shares received over the exercise price of the stock
option is treated as an item of adjustment for the purpose of calculating
alternative minimum taxable income.
If the optionee has held the Common Shares acquired upon exercise of an
incentive stock option for at least two years after the date of grant, and for
at least one year after the date of exercise, upon disposition of the Common
Shares by the optionee, the difference (if any) between the sales price of the
Common Shares and the exercise price of the stock option is treated as long-term
capital gain or loss. If the optionee does not satisfy these incentive stock
option holding period requirements, the optionee will recognize ordinary income
at the time of the disposition of the Common Shares, generally in an amount
equal to the excess of the fair market value of the Common Shares at the time
the stock option was exercised over the exercise price of the stock option. The
balance of the gain realized (if any) will be long-term or short-term capital
gain, depending on the holding period. If the optionee sells the Common Shares
prior to the satisfaction of the incentive stock option holding period
requirements, but at a price below the fair market value of the Common Shares at
the time the stock option was exercised, the amount of ordinary income is
limited to the amount realized on the sale over the exercise price of the stock
option.
In order for the exercise of an incentive stock option to qualify for the
foregoing tax treatment, the optionee generally must be an employee (within the
meaning of section 422 of the Code) of the Company or one of its subsidiaries
from the date the incentive stock option is granted through the date three
months before the date of exercise (one year before the date of exercise in the
case of an optionee who is terminated due to disability).
PERFORMANCE STOCK PLAN
The Company adopted a Performance Stock Plan on June 24, 1997. The Performance
Stock Plan authorizes the issuance of up to 1,000,000 shares of common stock of
the Company to be issued to key employees, officers, directors and consultants
of the Company. There were no shares issued pursuant to the Performance Stock
Plan during the fiscal year.
<PAGE>
The following tables set out the amount of options received or to be received by
the Company's executive officers as a group, the Company's current directors who
are not executive officers as a group; each nominee for election as a director;
each other person who received or is to receive 5% of such options and all
employees, including all current officers who are not executive officers, as a
group:
<TABLE>
<CAPTION>
NAMED EXECUTIVE OFFICER
NAME NUMBER OF OPTIONS OPTION PRICES OPTION EXPIRY DATES
--------------------------------- ----------------- -------------- -------------------
<S> <C> <C> <C>
John Robertson, President and CEO 300,000 $ 1.00 January 3, 2001
----------------- -------------- -------------------
TOTAL:. . . . . . . . . . . . . . 300,000
--------------------------------- -----------------
</TABLE>
<TABLE>
<CAPTION>
EXECUTIVE OFFICERS AS A GROUP
NAME NUMBER OF OPTIONS OPTION PRICES OPTION EXPIRY DATES
----------------------------- ------------------ ------------------ -------------------
<C> <C> <S> <C> <C>
[1] 350,000 $1.00 January 3, 2001
75,000 0.75 November 29, 2004
50,000 1.00 June 26, 2002
85,000 0.75 November 11, 2003
TOTAL: 560,000
</TABLE>
There are no Directors who are not Executive Officers.
<TABLE>
<CAPTION>
NOMINEES FOR ELECTION AS DIRECTORS
NAME NUMBER OF OPTIONS OPTION PRICES OPTION EXPIRY DATES
<S> <C> <C> <C>
John G. Robertson, President and
member of the Board of Directors [2] 300,000 $ 1.00 January 3, 2001
James L. Vandeberg, Chief Operating
Officer and member of the Board
of Directors 75,000 $ 0.75 November 29, 2004
Brian Cherry, Vice President
and member of the Board of Directors 50,000 $ 1.00 June 25, 2002
75,000 $ 0.75 November 11, 2003
<PAGE>
TOTAL: 125,000
</TABLE>
<TABLE>
<CAPTION>
NUMBER
OF OPTION EXPIRY
5% option holders [3] OPTIONS OPTION PRICES DATES
<S> <C> <C> <C>
John G. Robertson 300,000 $ 1.00 January 3, 2001
Brian Cherry 50,000 $ 1.00 June 26, 2002
75,000 $ 0.75 November 11, 2003
Paul Lamarche 50,000 $ 1.00 June 26, 2002
James L. Vandeberg 75,000 $ 0.75 November 29, 2004
Jennifer Lorette 60,000 $ 1.00 January 3, 2001
10,000 $ 0.75 November 11, 2003
Garry Savage 150,000 $ 1.00 July 7, 2004
100,000 $ 0.75 July 7, 2004
All Employees, including all current
officers who are not executive officers,
as a group: 325,000 [4] [4]
</TABLE>
All shares are held beneficially and of record and each record shareholder has
sole voting and investment power.
[1] Includes John Robertson, James Vandeberg, Jennifer Lorette, Brian
Cherry, and Patrick Badgley
[2] Mr. Robertson is the only Named Executive Officer of the Company.
[3] 5% of the 1,000,000 stock options available under the Plan is 50,000
options.
[4] Prices range from $0.75 to $1.25. Expiry dates range from June 26, 2002
to July 7, 2004.
There are Canadian and U.S. persons who have been granted options under the
Plan. Each optionee has been advised to seek his or her own tax advice.
LONG TERM INCENTIVE PLAN AWARDS
The Company does not have any Long Term Incentive Plans.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL
ARRANGEMENTS
The Company does not have any employment contracts, termination of employment
and change of control arrangements.
REPRICING OF OPTIONS
There were no options repriced during the fiscal year.
CANCELLATION OF OPTIONS
There were no stock options cancelled during the fiscal year.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of October 31, 2000, the outstanding Class A
Common Stock of the Company owned of record or beneficially by each person who
owned of record, or was known by the Company to own beneficially, more than 5%
of the Company's Common Stock. A person is deemed to be the beneficial owner of
securities that can be acquired by such person within 60 days from such date
upon the exercise of options. Each beneficial owner's percentage ownership is
determined by assuming that options that are held by such person and which are
exercisable within 60 days from the date are exercised. As of October 31, 2000,
there were 10,217,735 common shares issued and outstanding.
NAME AND ADDRESS OF BENEFICIAL OWNER AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNER CLASS
Rand Energy Group, Inc. [1] 5,325,000 52.11%
[1] Rand Energy Group Inc. is owned 51% by Reg Technologies Inc. and 49% by
Rand Cam Engine Corp. Under Rule 13d-3 under the Securities Exchange Act of
1934, both Reg Technologies Inc. and Rand Cam Engine Corp. could be considered
the beneficial owner of the 5,367,900 shares registered in the name of Rand
Energy Group Inc. Reg Technologies Inc. is a British Columbia corporation
listed on the Canadian Venture Exchange that has financed the research on the
Rand Cam Engine since 1986. Since October 1984 Mr. Robertson has been President
and a Director of Reg Technologies Inc. SMR Investment Ltd., a British Columbia
corporation, holds a controlling interest in Reg Technologies Inc. Since May
1977 Mr. Robertson has been President and a member of the Board of Directors of
SMR Investments Ltd. Susanne M. Robertson, Mr. Robertson's wife, owns SMR
Investment Ltd. Rand Cam Engine Corp. is a privately held company whose stock
is reportedly owned 50% by The Watchtower Society, a religious organization, 34%
by James McCann and the balance by several other shareholders. Mr. McCann has
indicated that he donated the shares held by The Watchtower Society to that
organization but has retained a voting proxy for those shares.
Rand Cam Engine Corp. is a privately held company whose stock is reportedly
owned 50% by The Watchtower Society, a religious organization, 34% by James
McCann and the balance by several other shareholders. Mr. McCann has indicated
that he donated the shares held by The Watchtower Society to that organization
but has retained a voting proxy for those shares. Accordingly, the beneficial
ownership of the 5,367,900 shares registered in the name of Rand Energy Group
Inc. can be attributed to The Watchtower Society and Mr. McCann. The Company
believes it would be misleading and not provide clear disclosure to list as
beneficial owners in the table the other entities and persons discussed in this
paragraph, although a strict reading of Rule 13d-3 under the Securities Exchange
Act of 1934 might require each such entity and person to be listed in the
beneficial ownership table.
The following table sets forth, as of October 31, 2000, the name and
shareholdings beneficially owned by each director, naming each, and directors
and executive officers as a group. A person is deemed to be the beneficial owner
of securities that can be acquired by such person within 60 days from such date
upon the exercise of options. Each beneficial owner's percentage ownership is
determined by assuming that options that are held by such person and which are
exercisable within 60 days from the date are exercised. As of October 31, 2000,
there were 10,217,735 common shares issued and outstanding.
<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE OF
CLASS A
CLASS A SHARES OWNED
NAME SHARES OWNED (NOT FULLY DILUTED)
------------------------------------------------------- ------------- -------------------
<S> <C> <C>
John G. Robertson[1][2] [6]President and member of the
Board of Directors. . . . . . . . . . . . . . . . . . . 5,676,050 55.55%
------------- -------------------
James L. Vandeberg [3], Chief Operating Officer and
member of the Board of Directors. . . . . . . . . . . . 75,000 0.73%
------------- -------------------
Brian Cherry [1][4], Vice-President and Member of the
Board of Directors. . . . . . . . . . . . . . . . . . . 300,500 2.94%
------------- -------------------
ALL OFFICERS & DIRECTORS AS A GROUP [5]
(FIVE INDIVIDUALS). . . . . . . . . . . . . . . . . . . 6,111,550 59.81%
------------------------------------------------------- ------------- -------------------
</TABLE>
Except as noted below, all shares are held beneficially and of record and each
record shareholder has sole voting and investment power.
[1] These individuals are the Executive Officers and Directors of the
Company and may be deemed to be "parents or founders" of the Company as that
term is defined in the Rules and Regulations promulgated under the Securities
Act of 1933, as amended.
[2] Includes 8,150 common shares and rights to purchase, pursuant to stock
options, 300,000 common shares. Includes 5,367,900 shares registered in the
name of and Energy Group Inc. See Note (6) below for an explanation of the
beneficial ownership of Rand Energy Group Inc. Mr. Robertson disclaims
beneficial ownership of these shares beyond the extent of his pecuniary
interest. Mr. Robertson's address is the same as the Company's.
[3] Includes 75,000 options that are currently exercisable. Mr. Vandeberg's
address is Ogden Murphy Wallace, One Union Square, Suite 2424, Seattle,
Washington.
[4] Includes 175,500 common shares and 125,000 options that are currently
exercisable. Mr. Cherry's address is the same as the Company's.
[5] Includes common shares and stock options for Brian Cherry, Jennifer
Lorette, James Vandeberg, Peter Badgley and John Robertson, exercisable within
60 days.
[6] Rand Energy Group Inc. is owned 51% by Reg Technologies Inc. and 49% by
Rand Cam Engine Corp. Under Rule 13d-3 under the Securities Exchange Act of
1934, both Reg Technologies Inc. and Rand Cam Engine Corp. could be considered
the beneficial owner of the 5,367,900 shares registered in the name of Rand
Energy Group Inc. Reg Technologies Inc. is a British Columbia corporation
listed on the Canadian Venture Exchange that has financed the research on the
Rand Cam Engine since 1986. Since October 1984 Mr. Robertson has been President
and a Director of Reg Technologies Inc. SMR Investment Ltd., a British Columbia
corporation, holds a controlling interest in Reg Technologies Inc. Since May
1977 Mr. Robertson has been President and a member of the Board of Directors of
SMR Investments Ltd. Susanne M. Robertson, Mr. Robertson's wife, owns SMR
Investment Ltd.
Accordingly, in Note (2) above, beneficial ownership of the 5,367,900
shares registered in the name of Rand Energy Group Inc. has been attributed to
Mr. Robertson. The Company believes it would be misleading and not provide
clear disclosure to list as beneficial owners in the table the other entities
and persons discussed in this paragraph, although a strict reading of Rule 13d-3
under the Securities Exchange Act of 1934 might require each such entity and
person to be listed in the beneficial ownership table
Rand Cam Engine Corp. is a privately held company whose stock is reportedly
owned 50% by The Watchtower Society, a religious organization, 34% by James
McCann and the balance by several other shareholders. Mr. McCann has indicated
<PAGE>
that he donated the shares held by The Watchtower Society to that organization
but has retained a voting proxy for those shares.
CERTAIN RELATED TRANSACTIONS AND LEGAL PROCEEDINGS WITH DIRECTORS
Pursuant to an agreement dated August 1992 (the "August 1992 Agreement"), the
Company issued 5,700,000 shares of its Common Stock at a deemed value of $0.01
per share to Rand Energy Group Inc. ("RAND") in exchange for certain valuable
rights, tech-nology, information, and other tangible and intangible assets
relating to the United States rights to the Rand Cam Engine (the "Original
Engine"). RAND is 51% controlled by Reg Technologies, Inc., a publicly-held
British Columbia corporation ("Reg Tech"). Reg Tech's president is also the
president of the Company and its Vice President is also a Director of the
Company.
The Company also agreed to pay semiannually to RAND a royalty of 5% of any net
profits to be derived by the Company from revenues received as a result of its
license of the Original Engine.
As part of the August 1992 Agreement, the Company also agreed to pay
semi-annually to Brian Cherry a royalty of 1% of any net profits to be derived
by the Company from revenues received as a result of the August 1992 Agreement.
Also in August 1992, the Company sold 300,000 shares of its Common Stock at
$0.01 per share to Brian Cherry.
In an agreement dated April 13, 1993 among the Company, RAND, Reg Tech and Brian
Cherry (the "April 1993 Agreement"), and made as an amendment to a previous
Amendment Agreement dated November 23, 1992, between RAND, Reg Resources Corp.
(Reg Tech) and Brian Cherry and an original agreement dated July 30, 1992,
between RAND, Reg Resources Corp. and Brian Cherry, Cherry agreed to: (a) sell,
transfer and assign to RAND all his right, title and interest in and to the
technology related to the RC/DC Engine, (the "Technology") including all pending
and future patent applications in respect of the Technology for all countries
except the United States of America, together with any improvements, changes or
other variations to the Technology; (b) sell, transfer and assign to the Company
(then called Sky Technologies Inc.), all his right, title and interest in and to
the Technology, including all pending and future patent applications in respect
of the Technology for the United States of America, together with any
improvements, changes or other variations to the Technology.
Other provisions of the April 1993 Agreement call for the Company (a) to pay to
RAND a continuing royalty of 5% of the net profits derived from the Technology
by the Company and (b) to pay to Brian Cherry a continuing royalty of 1% of the
net profits derived from the Technology by the Company.
A final provision of the April 1993 Agreement assigns and transfers ownership to
the Company of any patents, inventions, copyrights, know-how, technical data,
and related types of intellectual property conceived, developed or created by
RAND or its associated companies either prior to or subsequent to the date of
the agreement, which results or derives from the direct or indirect use of the
Original Engine and/or RC/DC Engine technologies by RAND.
In November 1993, in consideration for certain technology transferred to the
Company, as described above, Brian Cherry was issued 100,000 Common Shares of
Reg Tech (deemed value $200,000). There was no connection between this
transaction and the transaction involving the acquisition of the Canadian rights
to the Machine Vision Tech-nology described below. At that time the Company did
not have available cash to pay to Mr. Cherry and there was no public market for
the stock of the Company. Based upon his desire for some degree of immediate
liquidity, management agreed to issue shares of Reg Tech to Mr. Cherry and to
treat this as an advance. As previously noted, Reg Tech owns 51% of RAND which
<PAGE>
owns 66.7% of the Common Stock of the Company. Both Mr. Cherry and Mr.
Robertson are officers and directors of both the Company and Reg Tech.
The terms of the agreements referenced above were negotiated by the parties in
non-arm's-length transactions but were deemed by the parties involved to be fair
and equitable under the circumstances existing at the time.
In 1995, the Company acquired an exclusive limited sublicense to market and
dis-tribute in Canada the rights to Machine Vision Technology for the following
consideration:
(1) $200,000;
(2) royalty payments equal to 2% of all net revenue derived from sales in
Canada, to be paid 30 days after the end of each calendar quarter;
(3) minimum annual royalty payments as follows:
$
December 31, 1996 1,000
December 31, 1997 3,000
December 31, 1998 4,500
annually thereafter 6,000
On October 31, 1995, the Company sold its rights to the Machine Vision
Technology to Reg Tech for $200,000. All obligations pursuant to the sublicense
were transferred to Reg Tech.
CHANGES IN CONTROL
There are no arrangements known to the Company the operation of which may result
in a change of control of the Company.
PROPOSAL NO. 2 - APPROVAL OF AUDITOR
RELATIONSHIP WITH INDEPENDENT AUDITOR
The Company has retained the firm of Elliot Tulk Pryce Anderson as independent
auditor of the Company for the fiscal year ending April 30, 2000. Elliot Tulk
Pryce Anderson has been retained as auditor for the Company since April 1993.
Elliot Tulk Pryce Anderson is changing its name to Manning Elliot. The
Company does not expect a representative of Manning Elliott to be present at the
Annual Meeting.
The Board of Directors recommends that Manning Elliott serve as auditor of the
Company until the next Annual Meeting. Elliot Tulk Pryce Anderson (now known as
Manning Elliott), independent Chartered Accountants, performed the audit of the
consolidated financial statements for the Company for the year ended April 30,
2000.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL NO. 2.
PROPOSAL NO. 3 - AMENDMENT TO STOCK OPTION PLAN
The Company's Stock Option Plan was approved by the Board of Directors in April
1993, as amended and approved by the Board in October, 1995, and further amended
and approved by the Board in February, 1997. A total of 1,000,000 shares were
approved by the Board for issuance under the option agreements, subject to the
Plan. The Plan permits the grant of stock options to employees, officers,
directors and consultants. The purpose of the Plan is to attract the best
available personnel to the Company and to give employees a greater personal
stake in the success of the Company.
<PAGE>
On November 29, 1999, the Board of Directors, by unanimous consent, increased
the maximum number of shares which may be optioned and sold pursuant to the Plan
from 1,000,000 to 2,500,000.
Although shareholder approval is not technically required for the amendment to
the Plan, the Board of Directors believes it is prudent to do so and recommends
that the maximum number of common shares which may be optioned and sold pursuant
to the Plan be increased to 2,500,000.
Votes will be counted respecting proxies received or shareholders present at the
meeting only. Abstentions and brokers' non-votes will not be counted.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL NO. 3.
OTHER MATTERS
-------------
TRANSFER AGENT
The Nevada Agency and Trust Company, located at 50 West Liberty Street, Suite
880, Reno, Nevada, USA, phone (775) 322-0626, fax (775) 322-5623 is the transfer
agent for the Company's common shares.
STOCKHOLDER PROPOSALS
Stockholder proposals to be included in the Company's Proxy Statement and Proxy
for its 2001 Annual Meeting must meet the requirements of Rule 14a-8 promulgated
by the Securities and Exchange Commission and must be received by the Company no
later than August 30, 2001.
ADDITIONAL INFORMATION
Each shareholder has received the Company's Annual Report containing the
Company's 2000 audited financial statements, including the report of its
independent chartered accountants. Upon receipt of a written request, the
Company will furnish to any shareholder, without charge, a copy of the Company's
2000 Form 10-KSB as filed with the SEC under the Securities Exchange Act of 1934
(including the financial statements and the schedules thereto and a list briefly
describing the exhibits thereto). Shareholders should direct any request to the
Company, #185 - 10751 Shellbridge Way, Richmond, British Columbia, Canada, V6X
2W8, Attention: Jennifer Lorette, Secretary.
ACTION ON OTHER MATTERS
The Board of Directors knows of no other matters to be brought before the
share-holders at the Annual Meeting. In the event other matters are presented
for a vote at the Meeting, the proxy holders will vote shares represented by
properly executed proxies in their discretion in accordance with their judgment
on such matters.
At the Meeting, management will report on the Company's business and
share-holders will have the opportunity to ask questions.
REGI U.S., INC.
By Order of the Board of Directors
/s/ John G. Robertson
-------------------
John G. Robertson
President
<PAGE>
Richmond, British Columbia
November 10, 2000
