-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OwJxtHY3dErY+HDNPXKXlVYY6lLatZsBCdnbH7Sk/Kyowxmt8oZ5BFx8yK37vCHj hT4AqF0TY5JhMILd6JxFIw== /in/edgar/work/0001085037-00-000333/0001085037-00-000333.txt : 20001120 0001085037-00-000333.hdr.sgml : 20001120 ACCESSION NUMBER: 0001085037-00-000333 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20001114 FILED AS OF DATE: 20001117 FILER: COMPANY DATA: COMPANY CONFORMED NAME: REGI U S INC CENTRAL INDEX KEY: 0000922330 STANDARD INDUSTRIAL CLASSIFICATION: [3510 ] IRS NUMBER: 911580146 STATE OF INCORPORATION: OR FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: SEC FILE NUMBER: 000-23920 FILM NUMBER: 771913 BUSINESS ADDRESS: STREET 1: #185-10751 SHELLBRIDGE WAY CITY: RICHMOND B C CANADA STATE: A1 ZIP: V7A 5G8 BUSINESS PHONE: 6042414214 MAIL ADDRESS: STREET 1: #185-10751 SHELLBRIDGE WAY CITY: RICHMOND B C STATE: A1 FORMER COMPANY: FORMER CONFORMED NAME: SKY TECHNOLOGIES INC /OR/ DATE OF NAME CHANGE: 19940427 DEF 14A 1 0001.txt 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 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. 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. 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.
Principal Occupation of Nominee Age Since Director Ownership [1] Ownership - ------- --- ----- ------------------------ -------------- --------- 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 [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.
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. 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:
Positions with the Name Company Age Office Held Since - ------------------------------ ----------------------- --- --------------------- 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
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. 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 $100,000 during such year.
LONG-TERM COMPENSATION ANNUAL COMPENSATION AWARDS NAME AND OTHER ANNUAL SECURITIES UNDERLYING PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) COMPENSATION ($) OPTIONS/SARS (#) (1) - -------------------- ---------- ---------- --------- ---------------- -------------------- John G. Robertson. . 2000 -0- -0- -0- -0- President, Chief . . 1999 -0- -0- -0- -0- Executive Officer. . 1998 -0- -0- -0- -300,000- - -------------------- ---------- ---------- ---------- --------------- -------------------- (1) Represents options granted June 12, 1997 under the Company's Stock Option Plan exercisable within 60 days from October 31, 2000.
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 $1,500.00 per month is accrued for payment to Access Information Services, Inc. for rent and secretarial services. The Company has no other agreement at this time, with any officer or director, regarding employment with the Company or compensation for services other than herein described. Compensation of officers and directors is determined by the Company's Board of Directors and not subject to shareholder approval. The Company may in the future create retirement, pension, profit sharing, insurance and medical reimbursement plans covering its Officers and Directors. At the present time, no such plans exist. No advances have been made or are contemplated by the Company to any of its Officers or Directors. Option Grants in Last Fiscal Year (Individual Grants)
Number of Securities Percent of total Underlying options granted to Options granted employees in Exercise or base Name (#) fiscal year price ($/share) Expiration date - --------------- ---------------- ------------------- ------------------ ----------------- James Vandeberg 75,000 15.79% $ 0.75 November 29, 2004 - --------------- ---------------- ------------------- ------------------ -----------------
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.
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 - ------------------ ------------------- ------------ --------------------------- ---------------------------- 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 - ------------------ ------------------- ------------ --------------------------- ---------------------------- (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.
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. 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. 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:
NAMED EXECUTIVE OFFICER NAME NUMBER OF OPTIONS OPTION PRICES OPTION EXPIRY DATES - --------------------------------- ----------------- -------------- ------------------- John Robertson, President and CEO 300,000 $ 1.00 January 3, 2001 ----------------- -------------- ------------------- TOTAL:. . . . . . . . . . . . . . 300,000 - --------------------------------- -----------------
EXECUTIVE OFFICERS AS A GROUP NAME NUMBER OF OPTIONS OPTION PRICES OPTION EXPIRY DATES - ----------------------------- ------------------ ------------------ ------------------- [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
There are no Directors who are not Executive Officers.
NOMINEES FOR ELECTION AS DIRECTORS NAME NUMBER OF OPTIONS OPTION PRICES OPTION EXPIRY DATES 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 TOTAL: 125,000
NUMBER OF OPTION EXPIRY 5% option holders [3] OPTIONS OPTION PRICES DATES 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]
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. 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.
PERCENTAGE OF CLASS A CLASS A SHARES OWNED NAME SHARES OWNED (NOT FULLY DILUTED) - ------------------------------------------------------- ------------- ------------------- 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% - ------------------------------------------------------- ------------- -------------------
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 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 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. 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 Richmond, British Columbia November 10, 2000 -----END PRIVACY-ENHANCED MESSAGE-----