UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A
(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934

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 Sec.240.14a-12

N-VIRO INTERNATIONAL CORPORATION

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(Name of Registrant as Specified In Its Charter)

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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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the Form or Schedule and the date of its filing.

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June 24, 2010
To all Our Stockholders:

The Board of Directors cordially invites you to attend our Annual Meeting
of Stockholders. The meeting will be held at Brandywine Country Club, 6904
Salisbury Road, Maumee, Ohio, 43537, on July 22, 2010. The meeting will begin
at 10:30 a.m. (local time), and registration will begin at 10:00 a.m.
Refreshments will be served before the meeting.

In addition to the matters described in the attached Proxy Statement, we
will report on our business and progress during 2009 and the first quarter of
2010. Our performance for the year ended December 31, 2009 is discussed in the
enclosed 2009 Annual Report to Stockholders.

We hope you will be able to attend the meeting and look forward to seeing
you there.
Sincerely,

/s/ Timothy R. Kasmoch
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Timothy R. Kasmoch
President and Chief Executive Officer

N-VIRO INTERNATIONAL CORPORATION
3450 W. Central Avenue, Suite 328
Toledo, Ohio 43606

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 22, 2010

TO OUR STOCKHOLDERS:

NOTICE IS HEREBY GIVEN that our Annual Meeting of Stockholders will be held
at Brandywine Country Club, 6904 Salisbury Road, Maumee, Ohio, 43537, on July
22, 2010. The Annual Meeting will begin at 10:30 a.m. (local time), for the
following purposes:

1. To elect three Class II Directors for a term of two years, until
their successors are elected and qualified or until their earlier
resignation, removal from office or death.

2. To approve our 2010 Stock Option Plan.

3. To approve an amendment to our Third Amended and Restated
Certificate of Incorporation to increase the authorized shares of Common
Stock.

4. To ratify the appointment of UHY LLP to serve as our independent
auditors for our year ended December 31, 2010.

5. To transact such other business as may properly come before the
meeting or any adjournment thereof.

Your attention is directed to the Proxy Statement accompanying this Notice
for a more complete description of the matters to be acted upon at the Annual
Meeting. Our 2009 Annual Report is also enclosed. Stockholders of record as of
the close of business on May 24, 2010 will be entitled to notice of, and to vote
at, the Annual Meeting or any adjournment thereof.

BY ORDER OF THE BOARD OF DIRECTORS

/s/ James K. McHugh
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James K. McHugh
Chief Financial Officer, Secretary and Treasurer

Toledo, Ohio
June 24, 2010

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YOUR VOTE IS IMPORTANT. PLEASE COMPLETE AND SIGN THE ENCLOSED PROXY AND RETURN
IT PROMPTLY IN THE ENVELOPE PROVIDED WHETHER OR NOT YOU PLAN TO ATTEND THE
ANNUAL MEETING TO ASSURE THE PRESENCE OF A QUORUM. THE PROXY MAY BE REVOKED BY
YOU AT ANY TIME, AND GIVING YOUR PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN
PERSON IF YOU ATTEND THE ANNUAL MEETING. YOU ALSO MAY VOTE YOUR SHARES VIA THE
TELEPHONE BY ACCESSING THE TOLL-FREE NUMBER INDICATED ON YOUR PROXY CARD OR VIA
THE INTERNET BY ACCESSING THE WORLDWIDE WEBSITE INDICATED ON YOUR PROXY CARD.
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N-VIRO INTERNATIONAL CORPORATION
3450 W. CENTRAL AVENUE, SUITE 328
TOLEDO, OHIO 43606

PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 22, 2010

SOLICITATION OF PROXIES AND DATE, TIME AND PLACE OF ANNUAL MEETING

THIS PROXY STATEMENT IS FIRST BEING SENT TO THE STOCKHOLDERS OF N-VIRO
INTERNATIONAL CORPORATION (THE "COMPANY") ON OR ABOUT JUNE 24, 2010, IN
CONNECTION WITH THE SOLICITATION OF PROXIES BY OUR BOARD OF DIRECTORS TO BE
VOTED AT OUR ANNUAL MEETING OF STOCKHOLDERS (THE "ANNUAL MEETING"), WHICH IS
SCHEDULED TO BE HELD ON THURSDAY, JULY 22, 2010 AT 10:30 A.M. (LOCAL TIME) AS
SET FORTH IN THE ATTACHED NOTICE. A PROXY CARD IS ENCLOSED.

RECORD DATE

The record date for our Annual Meeting is the close of business on May 24,
2010. Only holders of record of our Common Stock on the record date are
entitled to notice of the Annual Meeting and to vote at the Annual Meeting. On
the record date, there were 5,228,666 shares of Common Stock outstanding.

WHAT VOTE IS REQUIRED TO APPROVE EACH MATTER?

Proposal One - Election of Directors - Directors will be elected by a
majority of the votes cast, meaning that the number of votes cast "for" a
director nominee must exceed the number of votes cast "against" that director
nominee.

Proposal Two - Approval of the N-Viro International Corporation 2010 Stock
Option Plan - The affirmative vote of a majority of the shares of Common Stock
present or represented by proxy at the meeting is needed to approve our 2010
Stock Option Plan.

Proposal Three - Approval of the Increase to the Authorized Common Stock -
The affirmative vote of the holders of a majority of the outstanding shares of
Common Stock entitled to vote at the meeting is needed to approve an amendment
to our Third Amended and Restated Certificate of Incorporation to increase the
number of shares of authorized Common Stock.

Proposal Four - Ratification of the Selection of UHY LLP - The affirmative
vote of a majority of the shares of Common Stock present or represented by proxy
at the meeting is needed to ratify the selection of UHY LLP as our independent
registered public accounting firm for the fiscal year ending December 31, 2010.

HOW DO I VOTE?

A share of our Common Stock cannot be voted at the Annual Meeting unless
the holder thereof is present or represented by proxy. Whether or not you plan
to attend the Annual Meeting in person, please sign, date and return the
enclosed proxy card as promptly as possible in the postage paid envelope
provided to ensure that there is a quorum and that your shares will be voted at
the Annual Meeting. When proxies in the accompanying form are returned properly
executed and dated, the shares represented thereby will be voted at the Annual
Meeting. If a choice is specified in the proxy, the shares represented thereby
will be voted in accordance with such specification. If no specification is
made, the proxy will be voted FOR approval of all four proposals. You may also
vote your shares via the telephone by accessing the toll-free number indicated
on your proxy card or via the internet by accessing the worldwide website
indicated on your proxy card.

If you hold shares through a bank, broker or other nominee, such entity
will give you separate instructions on voting your shares.

HOW DO I REVOKE MY PROXY?

Any stockholder giving a proxy has the right to revoke it any time before
it is voted by filing with our Secretary a written revocation, or by filing a
duly executed proxy bearing a later date, or by attending the Annual Meeting and
voting in person. The revocation of a proxy will not be effective until notice
thereof has been received by our Secretary at the address of the company set
forth above.

WHAT CONSTITUTES A QUORUM?

The presence at the Annual Meeting, in person or by proxy, of the holders
of a majority of the total number of shares of Common Stock outstanding on the
record date will constitute a quorum for the transaction of business by such
holders at the Annual Meeting. Abstentions will be counted as shares that are
present and entitled to vote for purposes of determining whether a quorum is
present. Shares held by nominees for beneficial owners also will be counted for
purposes of determining whether a quorum is present if the nominee has the
discretion to vote on at least one of the matters presented, even though the
nominee may not exercise discretionary voting power with respect to other
matters and even though voting instructions have not been received from the
beneficial owner (a "broker non-vote").

WHAT ARE MY VOTING RIGHTS?

Holders of Common Stock have one vote for each share on any matter that may
be presented for consideration and action by the stockholders at the Annual
Meeting. Stockholders are not entitled to cumulative voting in the election of
directors. All of the proposals except Proposal Three-- the increase of our
authorized common stock -- will require the affirmative vote of the holders of a
majority of the shares of the Common Stock present or represented by proxy at
the Annual Meeting. Proposal Three requires the approval of a majority of our
issued and outstanding shares entitled to vote at the Annual Meeting.

WHAT EFFECT WILL ABSTENTIONS AND BROKER NON-VOTES HAVE ON THE PROPOSALS?

Shares not present at the meeting and shares voting "abstain" have no
effect on the election of directors. For each of the other proposals,
abstentions have the same effect as negative votes. Broker non-votes (shares
held by brokers that do not have discretionary authority to vote on a matter and
have not received voting instructions from their clients) would have the same
effect as negative votes on Proposal Three (to amend the Third Amended and
Restated Certificate of Incorporation) but will have no effect on the other
proposals.

COST OF SOLICITATION

We will bear the cost of solicitation of proxies. In addition to
solicitation by mail, directors and officers may solicit proxies by telephone,
facsimile or personal interview. We will reimburse directors and officers for
their reasonable out-of-pocket expenses in connection with such solicitation.
We will request brokers and nominees who hold shares in their names to furnish
these proxy materials to the persons for whom they hold shares and will
reimburse such brokers and nominees for their reasonable out-of-pocket expenses
in connection therewith.

EXECUTIVE OFFICE

Our executive office is located at 3450 West Central Avenue, Suite 328,
Toledo, Ohio 43606. Our telephone number is (419) 535-6374.

FORM 10-K AVAILABLE

A COPY OF OUR ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31,
2009, INCLUDING THE FINANCIAL STATEMENTS, MAY BE OBTAINED WITHOUT CHARGE BY
WRITING TO JAMES MCHUGH, OUR CORPORATE SECRETARY, AT THE ABOVE ADDRESS. The
Annual Report is also available on our website at www.nviro.com under "Investor
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Information".

PROPOSAL 1 - ELECTION OF DIRECTORS

The Board of Directors, pursuant to our Third Amended and Restated
Certificate of Incorporation and Second Amended and Restated By-Laws, has set
the number of directors to serve for the next year at seven, three of whom are
to be elected at the Annual Meeting to serve as Class II Directors. Our By-Laws
provide for a classified Board consisting of two classes of equal or
approximately equal number based on the total number of directors fixed and
determined by a vote of a majority of our entire Board serving at the time of
such vote. The number of directors is currently set at seven. The directors
are elected for a two-year term or until the election of their respective
successors or until their resignation, removal from office or death.

The Board is currently composed of seven directors - four Class I
Directors: Carl Richard, Joseph H. Scheib, Mark D. Hagans and Joan B. Wills;
and three Class II Directors: James H. Hartung, Timothy R. Kasmoch and Thomas L.
Kovacik (whose terms will expire upon the election and qualification of
directors at the annual meetings of stockholders to be held in 2011 and 2010,
respectively).

Each of our current Class II Directors - James H. Hartung, Timothy R.
Kasmoch and Thomas L. Kovacik - is presently standing for re-election to the
Board. If elected, the nominees each will serve for a term of two-years and
until their respective successors are elected or until their earlier
resignation, removal from office or death.

Each of the nominees has consented to serve until his term expires if
elected at the Annual Meeting as a Class II Director. If any nominee declines
or is unable to accept such nomination to serve as a Class II Director, events
which the Board does not now expect, the Board may designate a substitute
nominee, in which event the proxies reserve the right to vote for such
substitute nominee. The proxy solicited hereby will not be voted to elect more
than three Class II Directors.

Under our By-Laws, a nominee for a Class II Director must be elected by a
majority of the votes cast, meaning that the number of votes cast "for" a
director nominee must exceed the number of votes cast "against" that director
nominee. Under Delaware law, if an incumbent nominee for director in an
uncontested election does not receive the requisite votes for reelection, the
director remains in office as a "holdover" director until a successor is elected
and qualified.

However, our Board has adopted a policy under which the Board will nominate
for election or re-election as a director only candidates who agree to tender,
promptly following their failure to receive the required vote for election or
re-election at the next meeting at which they would face election or
re-election, an irrevocable resignation that will be effective upon acceptance
by the Board. In addition, the Board will fill director vacancies and new
directorships only with candidates who agree to tender the same form of
resignation, promptly following their appointment to the Board. Each of Messrs.
Hartung, Kasmoch and Kovacik has submitted such a resignation to the Board.

THE BOARD OF DIRECTORS RECOMMENDS THAT MESSRS. HARTUNG, KASMOCH AND KOVACIK
BE ELECTED AT THE ANNUAL MEETING AS CLASS II DIRECTORS. The Board intends to
vote proxies received from stockholders for the election of the three Class II
Directors named above.

Certain information about all of the directors and nominees for director is
furnished below.

DIRECTORS OF THE COMPANY

The Board is currently composed of four Class I Directors: Carl Richard,
Joseph H. Scheib, Mark D. Hagans and Joan B. Wills; and three Class II
Directors: James H. Hartung, Timothy R. Kasmoch and Thomas L. Kovacik (whose
terms will expire upon the election and qualification of directors at the annual
meetings of stockholders to be held in 2011 and 2010, respectively). At each
annual meeting of stockholders, directors will be elected for a full term of two
years to succeed those directors whose terms are expiring.

The following table sets forth the names and ages of our directors.

Name Age Position
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Mark D. Hagans 43 Class I Director
James H. Hartung 67 Class II Director, Chairman of the Board*
Timothy R. Kasmoch 48 Class II Director, President and Chief Executive Officer*
Thomas L. Kovacik 62 Class II Director*
Carl Richard 83 Class I Director
Joseph H. Scheib 53 Class I Director
Joan B. Wills 57 Class I Director

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* Directors currently nominated for re-election.

MARK D. HAGANS is an attorney and partner with the law firm of Plassman, Rupp,
Short & Hagans, of Archbold, Ohio, and his practice focuses on corporation,
taxation and banking law. Mr. Hagans serves on numerous Boards of directors,
including the Fulton County Health Center, where he is presently chair of the
Finance Committee. Mr. Hagans earned his law degree from the University of
Toledo. Mr. Hagans has served as our director since December 2006 and is a
member of the Board's Audit, Finance and Technology Committees. Mr. Hagans
experience as a lawyer and businessman enables him to bring valuable resources
to the Board.

JAMES H. HARTUNG is the former President and Chief Executive Officer of the
Toledo-Lucas County (Ohio) Port Authority, a position he held from 1994 until
2008. Mr. Hartung has served as our director since January 2006 and is a member
of the Board's Compensation and Nominating Committees. Mr. Hartung's
qualifications to serve as a director and our Chairman of the Board consist of
several years experience as a businessman, as an organizational leader and
community organizer, and in dealings with local government and related agencies
that enable him to bring valuable insights to the Board.

TIMOTHY R. KASMOCH has been our President and Chief Executive Officer since
February 2006 and a director since January 2006. Until April 1, 2007, Mr.
Kasmoch was also President and CEO of Tri-State Garden Supply, d/b/a
Gardenscape, a bagger and distributor of lawn and garden products, which has
provided trucking services to our Company. Mr. Kasmoch is a graduate of Penn
State University. Mr. Kasmoch is a member of the Board's Finance and Technology
Committees. Mr. Kasmoch's qualifications to serve as a director of the Company
consist of his experience in the soil and distribution business as well as an
extensive knowledge of the transportation and trucking industry. Mr. Kasmoch's
strength is in strategic planning and he possesses a broad, fundamental
understanding of the business drivers affecting us. He is the only "insider" on
the Board.

THOMAS L. KOVACIK is presently employed as the Executive Director of
Transportation Advocacy Group of Northwest Ohio ("TAGNO"), a strategic planning
organization working with local and Ohio transportation and economic development
officials. Mr. Kovacik was previously employed by us from 1992 to 1995 as
President of Great Lakes N-Viro, at the time one of our divisions. Mr. Kovacik
has also held various positions with local government, utilities and
environmental companies, and earned a masters degree from Bowling Green State
University in Geochemistry. Mr. Kovacik has served as our director since
December 2006, and is a member of the Board's Compensation and Technology
Committees. Mr. Kovacik's qualifications to serve as a director of the Company
consist of his experience in the environmental, government and utilities
industries, and his prior position with us as a divisional president. His
strength in strategic planning and transactional experience offers a unique
perspective to the Board.

CARL RICHARD is the former Executive Vice-President of P.R. Transportation, a
trucking company located in Toledo, Ohio, and was a consultant to us from
January 2006 to April 2007. Mr. Richard served as Vice-President of C.A.
Transportation from 1988 through 2000 and as Vice-President of R.O.S.S.
Investments, a real estate holding company, from 1980 through 2000. Mr. Richard
has served as our director since December 2004 and is a member of the Board's
Nominating Committee. Mr. Richard's qualifications to serve as a director of
the Company consist of his extensive experience in the transportation and
trucking industry.

JOSEPH H. SCHEIB is the Chief Financial Officer of Broad Street Software Group,
a comprehensive software technology company located in Edenton, North Carolina,
a position he has held since June 2003. From May 2000 until February 2003, Mr.
Scheib was the Financial Operation Principal/Compliance Officer of Triangle
Securities, LLC of Raleigh, North Carolina, an asset management, brokerage and
investment banking firm. Mr. Scheib is a CPA and a graduate of East Carolina
University with a degree in accounting. Mr. Scheib has served as our director
since December 2004, and is a member of the Board's Audit, Finance and
Nomination Committees. Mr. Scheib's qualifications to serve as a director of
the Company consist of his strong financial and asset management experience and
serving the Company in a financial oversight role as the Chair of the Audit
Committee. Given his extensive knowledge and experience in finance, Mr. Scheib
has been determined to be an audit committee financial expert by the board.

JOAN B. WILLS is currently legal counsel for The Narragansett Bay Commission, a
regional sewer authority located in Providence, Rhode Island, a position she has
held since 2008. Also, Ms. Wills is currently Trustee of the Cooke Family
Trust, an owner of more than 5% of N-Viro International Corporation common
stock. From 2006 until 2008, Ms. Wills provided legal counsel to the Rhode
Island Office of Legislative Counsel, an agency involved in drafting new
legislation and amendments to the State of Rhode Island. Ms. Wills has been a
practicing attorney at various points in her career, and holds a Bachelor of
Arts degree from the University of Rhode Island and a Juris Doctorate from
Suffolk University Law School in Boston. In February 2010, Ms. Wills was made a
member of the Compensation Committee. Ms. Wills' qualifications to serve as a
director of the Company consist of her experience as an attorney in the
utilities industry.

KEY RELATIONSHIPS

Joan Wills is currently Co-Trustee of the Cooke Family Trust, an owner of
more than 5% of our common stock.

CORPORATE GOVERNANCE AND BOARD MATTERS

OUR BOARD OF DIRECTORS

Our business, property and affairs are managed under the direction of our
Board. We have determined that the Company's interests are best served by
having a Chairman of the Board who is independent of the management of the
Company because it is our view this inherently strengthens board independence in
dealing with issues that closely involve management. Our Chief Executive
Officer has responsibility for setting our strategic direction and the
day-to-day leadership and performance, while the Chairman of the Board has a
greater focus on long-range Company goals and plans and governance of our Board
of Directors. This balance between the two positions enables Mr. Kasmoch to
focus on the operational and strategic challenges we presently face, with Mr.
Hartung providing board leadership on matters of governance and management
oversight.

Our Board, as a whole, has the responsibility for risk oversight of
management. The role of our Board of Directors is to oversee the President and
Chief Executive Officer, the Executive Vice President and the Chief Financial
Officer in the operation of the Company, including management's establishment
and implementation of appropriate practices and policies with respect to areas
of potentially significant risk to us. Our Board considers risks to the Company
as part of the strategic planning process and thorough review of compliance
issues in committees of our Board, as appropriate. While the Board has the
ultimate oversight responsibility for such risk management process, various
committees of the Board are structured to oversee specific risks in the areas
covered by their respective assignments such as audits or compensation. In
addition, our Board may retain, on such terms as determined by the Board and in
its sole discretion, independent legal, financial and other consultants and
advisors to advise and assist the Board in fulfilling its oversight
responsibilities. Currently, there are no such consultants in any category
assisting or advising the Company.

Management is responsible for N-Viro's day-to-day risk management, and the
entire Board's role is to engage in informed oversight. Our Chief Executive
Officer is a member of the Board of Directors, and our Chief Financial Officer
and Executive Vice President/General Counsel regularly attend Board meetings,
which helps facilitate discussions regarding risk between the Board and our
senior management, as well as the exchange of risk-related information or
concerns between the Board and the senior management. The Board believes Mr.
Kasmoch's service as Chief Executive Officer and on the Board is appropriate
because it bridges a critical gap between our management and the Board, enabling
the Board to benefit from management's perspective on our business while the
Board performs its oversight function.

The Company's philosophy about diversity among its Board members is
discussed below under "Nominating Committee."

MEETINGS OF THE BOARD OF DIRECTORS

Our Board held six formal meetings during 2009, consisting of two regular
meetings and four special meetings. Each director attended 100% of the
aggregate number of meetings held by the Board of Directors and the Committees
of the Board of Directors on which he served, except for Messrs. Hartung and
Kovacik, who each missed one special meeting. It is the policy of the Company
that the members of the Board attend our annual stockholder meeting. Failure to
attend annual meetings without good reason is a factor the Nominating Committee
and Board will consider in determining whether to renominate a current Board
member. All members of the Board serving at the time attended the 2009 Annual
Meeting.

SHAREHOLDER COMMUNICATIONS WITH THE BOARD

We encourage stockholder communications with directors. Stockholders may
communicate with a particular director, all directors or the Chairman of the
Board by mail or courier addressed to him or the entire Board in care of James
K. McHugh, Corporate Secretary, N-Viro International Corporation, 3450 West
Central Avenue, Suite #328, Toledo, OH 43606. All correspondence should be in
a sealed envelope marked "Confidential" and will be forwarded unopened to the
director as appropriate.

BOARD INDEPENDENCE

Although we are not subject to the listing requirements of any stock
exchange, we are committed to a board in which a majority of our members consist
of independent directors, as defined under the NASDAQ rules. The Board has
reviewed the independence of its members, applying the NASDAQ standards and
considering other commercial, legal, accounting and familial relationships
between the directors and us. The Board has determined that all of the
directors and director nominees are independent other than Mr. Kasmoch, who is
not an independent director by virtue of his current position as our Chief
Executive Officer, and Mr. Hartung, who is deemed not to be independent because
his son was employed as an executive officer of the Company within the past
three years.

CODE OF ETHICS

We have adopted a Code of Ethics which covers the Chief Executive Officer
and Chief Financial Officer, which is administered and monitored by the Audit
Committee of the Board. A copy of the Code of Ethics was attached as Exhibit
14.1 to our Annual Report on Form 10-K for the year ended December 31, 2009, and
is posted on our web site at www.nviro.com.
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COMMITTEES OF THE BOARD OF DIRECTORS

The Board has the following standing committees: the Audit Committee, the
Compensation Committee, the Finance Committee, the Nominating Committee and the
Technology Committee. The composition and function of each Committee is set
forth below:

DIRECTOR AUDIT COMPENSATION NOMINATING FINANCE TECHNOLOGY
- ------------------ ----- ------------ ---------- ------- ----------

Mark D. Hagans X X* X
James H. Hartung X X
Timothy R. Kasmoch X X*
Thomas L. Kovacik X* X
Carl Richard X
Joseph H. Scheib X* X* X
Joan B. Wills X

* Committee Chair

AUDIT COMMITTEE

Our Audit Committee consisted of Messrs. Scheib, Hagans and DiPrete, until
Mr. DiPrete's resignation from the Board in May 2009. In accordance with our
Audit Committee Charter, each of the Audit Committee members must be
"independent" as determined under the NASDAQ rules. The Audit Committee
currently is not subject to, and does not follow, the independence criteria set
forth in Section 10A of the Securities Exchange Act 1934, as amended. The Board
has determined that each of the directors who serve on the Audit Committee are
"independent" under the NASDAQ rules, meaning that none of them has a
relationship with us that may interfere with their independence from us and our
management. Further, the Board has determined that Mr. Scheib qualifies as a
"financial expert" as defined by the Securities and Exchange Commission (the
"SEC").

The Audit Committee recommends the appointment of the outside auditor,
oversees our accounting and internal audit functions and reviews and approves
the terms of transactions between us and related party entities. During 2009,
the Audit Committee met two times. The Audit Committee has retained UHY LLP to
conduct the audit for the year ended December 31, 2010. The Audit committee is
governed by a written charter, a copy of which was attached to the Proxy
Statement for our annual meeting held on June 8, 2007.

COMPENSATION COMMITTEE

The Compensation Committee determines officers' salaries and bonuses and
administers the grant of stock options pursuant to our stock option plans. The
Compensation Committee does not have a written charter. The Compensation
Committee consisted of Messrs. Kovacik, Hartung and DiPrete, until Mr. DiPrete's
resignation in May 2009, and Ms. Wills, who was appointed to the Committee in
February 2010. The Compensation Committee met two times during 2009.

The Board has determined that a majority of the members of the committee
are "independent" as determined under the NASDAQ standards. Mr. Hartung is not
deemed to be "independent" due to his son, Howard Hartung, serving as one of our
executive officers until January 2008. Under the NASDAQ standards, Mr. Hartung
will not be independent for at least three years after the resignation of his
son. Despite his lack of "independence," the Board determined that Mr.
Hartung's exercise of independent judgment has not been and will not be affected
by this relationship.

FINANCE COMMITTEE

The Finance Committee, consisting of Messrs. Hagans, Kasmoch and Scheib,
assists in monitoring our cash flow requirements and approves any internal or
external financing or leasing arrangements. The Finance Committee does not have
a written charter. The Finance Committee met two times during 2009.

NOMINATING COMMITTEE

The Nominating Committee, consisting of Messrs. Scheib, Richard and
Hartung, considers and recommends to the Board qualified candidates for election
as Board members, and establishes and periodically reviews criteria for
selection of directors. The Nominating Committee does not have a written
charter. The Nominating Committee met one time during 2009.

The Nominating Committee will consider candidates recommended by
stockholders, directors, officers, third-party search firms and other sources
for nomination as a director. The Committee considers the needs of the Board
and evaluates each director candidate in light of, among other things, the
candidate's qualifications. Recommended candidates must be of the highest
character and integrity, free of any conflicts of interest and possess the
ability to work collaboratively with others, and have the time to devote to
Board activities. All candidates will be reviewed in the same manner,
regardless of the source of the recommendation. Presently, the Nominating
Committee does not consider diversity as a characteristic in its selection of
candidates except to the extent that the Nominating Committee seeks to expand
the range of categories of experience and relationships in different aspects of
the waste management process the Company requires for the different foci of its
business and potential contacts with sources of business opportunity for the
Company.

The Nominating Committee will consider all stockholder recommendations of
proposed director nominees, if such recommendations are timely received under
applicable SEC regulations and include all of the information required to be
included as set forth in the By-Laws. To be considered "timely received,"
recommendations must be received in writing at our principal executive offices,
at N-Viro International Corporation, 3450 W. Central Avenue, Suite 328, Toledo,
Ohio 43606, Attention: Chairman, Nominating Committee, c/o James K. McHugh,
Corporate Secretary, no later than March 15, 2011.

All candidates recommended by stockholders should be independent and
possess substantial and significant experience which would be of value to us in
the performance of the duties of a director. In addition, any stockholder
director nominee recommendation must include, at a minimum, the following
information: the stockholder's name; address; the number and class of shares
owned; the candidate's biographical information, including name, residential and
business address, telephone number, age, education, accomplishments, employment
history (including positions held and current position), and current and former
directorships; and the stockholder's opinion as to whether the stockholder
recommended candidate meets the definitions of "independent" under the NASDAQ
standards. In addition, the recommendation letter must provide the information
that would be required to be disclosed in the solicitation of proxies for
election of directors under federal securities laws. The stockholder must
include the candidate's statement that he/she meets these requirements; is
willing to promptly complete the Questionnaire required of all officers,
directors and candidates for nomination to the Board; will provide such other
information as the Committee may reasonably request; consents to serve on the
Board if elected; and a statement whether such candidate, if elected, intends to
tender, promptly following such person's election or re-election, an irrevocable
resignation effective upon such person's failure to receive the required vote
for re-election at the next meeting at which such person would face re-election.

COMPENSATION OF DIRECTORS

Our Board of Directors has approved the payment of cash compensation to
Nonemployee Directors in exchange for their service on the Board. The amount of
cash compensation to be received by each Nonemployee Director is $1,000 per
regular meeting attended during each calendar year, and $500 per special meeting
attended. Our Board of Directors generally has four meetings per calendar year.
The directors are reimbursed for out-of-pocket expenses incurred in attending
meetings of the Board of Directors or any committees thereof.

Under our current stock option plan, approved by the stockholders in May
2004 and amended by the stockholders in June 2008 and again in August 2009, each
Nonemployee Director automatically receives a grant of options to purchase 2,500
shares of Common Stock for each regular meeting attended, and an option to
purchase 1,250 shares of Common Stock for each special meeting attended, subject
to a maximum of options to purchase 15,000 in any year.

Directors who are our employees do not receive any additional compensation
for serving as directors. Directors who are our consultants do not receive any
additional cash compensation for serving as directors, but do receive stock
options per the provisions of the N-Viro International Corporation Second
Amended and Restated 2004 Stock Option Plan.

See "Certain Relationships and Related Transactions" for additional
compensation to directors.

DIRECTOR COMPENSATION

Fees Non-Equity Non-Qualified Non-Qualified
Earned or Incentive Incentive Deferred All
Paid in Stock Option Plan Plan Compensation Other
Name Cash Awards Awards Compensation Compensation Earnings Compensation TOTAL
- ------------------ -------- ------- -------- ------------- ------------- ------------- ------------- -------

R. Francis DiPrete $ 1,500 - $ 7,500 - - - - $ 9,000
Joseph H. Scheib $ 2,000 - $ 31,700 - - - - $ 33,700
Carl Richard $ 2,000 - $ 31,700 - - - - $ 33,700
James H. Hartung $ 2,000 - $ 32,600 - - - - $ 34,600
Mark D. Hagans $ 2,000 - $ 31,700 - - - - $ 33,700
Thomas L. Kovacik $ 1,500 - $ 31,700 - - - - $ 33,200
Joan B. Wills $ 500 - $ 2,795 - - - - $ 3,295
Timothy R. Kasmoch - - - - - - - $ 0
-------- ------- -------- ------------- ------------- ------------- ------------- --------
$ 11,500 $ 0 $169,695 $ 0 $ 0 $ 0 $ 0 $181,195
======== ======= ======== ============= ============= ============= ============= ========

PROPOSAL 2 - APPROVAL OF THE N-VIRO INTERNATIONAL CORPORATION 2010 STOCK OPTION
PLAN

In May 2010, our Board of Directors adopted the N-Viro International
Corporation 2010 Stock Option Plan (the "2010 Plan"), subject to stockholder
approval, and the 2010 Plan will become effective when stockholder approval is
obtained. The material terms of the 2010 Plan are summarized below and are
qualified in their entirety by the terms of the 2010 Plan, which is attached as
Appendix A to this Proxy Statement.

Our Board of Directors recently adopted the 2010 Plan to provide for the
grant of stock options to our key employees, officers, consultants and
Nonemployee Directors. Our most recent plan, the 2004 Second Amended and
Restated Stock Option Plan (the "2004 Plan"), is still in force but only a
limited amount of grants may be made under that plan. As of May 24, 2010,
options to purchase 2,193,550 shares of our Common Stock were outstanding under
the 2004 Plan, and options to purchase 229,775 shares of our Common Stock under
that plan had been exercised. As a result, we only have 76,675 shares available
for future grant under the 2004 Plan as of May 24, 2010. We have no other stock
incentive plans under which we may grant stock options or other stock-based
awards.

Our Board of Directors believes that our future success depends, in large
part, upon the ability to maintain a competitive position in attracting,
retaining and motivating qualified officers, other key employees and Nonemployee
Directors. Accordingly, our Board of Directors believes that approving a new
plan is in our best interest and the best interests of our stockholders.

The 2010 Plan provides for the grant of awards with respect to a maximum of
5,000,000 shares of Common Stock. The purposes of stockholder approval of the
2010 Plan are:

- - to permit the stock options granted under the 2010 Plan to qualify for
incentive stock option treatment under Section 422 of the Internal Revenue Code
1986, as amended (the "Code"); and

- - to satisfy the performance-based compensation exception to the $1 million
limit under Section 162(m) of the Code.

The approval of the 2010 Plan requires the affirmative vote of the holders
of a majority of the shares of the Common Stock present or represented by proxy
at the Annual Meeting.

OUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE N-VIRO INTERNATIONAL
CORPORATION 2010 STOCK OPTION PLAN.

DESCRIPTION OF THE 2010 PLAN

The following is a brief summary of the N-Viro International Corporation
2010 Stock Option Plan. References to our Board of Directors throughout this
summary also refer to any committee or officer to which our Board of Directors
has delegated authority with respect to the 2010 Plan.

Purpose of the 2010 Plan

The purpose of the 2010 Plan is to attract and retain qualified officers,
other key employees and Nonemployee Directors, and to provide an incentive for
such officers, key employees and directors of the Company to expand and improve
the profits and prosperity of the Company.

Administration and Duration of the 2010 Plan

The 2010 Plan is administered by our Board of Directors, unless the Board
delegates its authority to a committee appointed by the Board, provided that all
grants to persons who qualify as "named executive officers" under Regulation S-K
of the Securities and Exchange Commission, may only be delegated to a committee
that is comprised only of directors who qualify as "Nonemployee Directors"
within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934, and
as "outside directors" within the meaning of the Internal Revenue Code (the
"Code") Section 162(m) and the regulations promulgated under such section. The
administrator of the 2010 Plan is authorized, subject to the provisions of the
2010 Plan, to establish such rules and regulations as it may deem appropriate
for the proper administration of the 2010 Plan, and to make such determinations
under, and such interpretations of, and to take such steps in connection with,
the 2010 Plan and plan awards as it may deem necessary or advisable.

The 2010 Plan will have a duration of 10 years from the date the 2010 Stock
Option Plan became effective. Accordingly, the 2010 Plan will terminate in
approximately May of 2020, unless sooner terminated by the Board. Upon such
termination, the outstanding awards granted under the 2010 Plan will remain in
effect until their exercise, expiration or termination. The Board may at any
time terminate the 2010 Plan, or amend the 2010 Plan as it deems advisable;
provided that, to the extent determined by our Board of Directors, no amendment
requiring stockholder approval under any applicable legal, regulatory or listing
requirement will become effective until such stockholder approval is obtained.
Stockholder approval will be required for any amendment for which stockholder
approval is required under Section 422 of the Code or the rules of any stock
exchange on which our Common Stock is listed.

Types of Awards

The 2010 Plan provides for certain automatic grants to Nonemployee
Directors of options to purchase shares of our Common Stock, and authorizes the
administrator to grant awards of stock options to other eligible participants.
The participants to whom option awards are granted by the administrator and the
terms of the awards granted, including the number of shares of Common Stock
subject to such option awards, are within the discretion of the administrator,
subject to the terms and conditions set forth in the 2010 Plan.

Discretionary Awards; Option Price and Term. Stock option awards under the
2010 Plan may be in the form of "incentive stock options," which are options
that meet the requirements of Section 422 of the Internal Revenue Code, or
"nonqualified stock options," which are options that do not meet such
requirements. Except for incentive stock options granted to stockholders owning
more than 10% of the voting power of all classes of our capital stock, the per
share exercise price of an incentive stock option granted or to be granted
pursuant to the 2010 Plan, as determined by the administrator, will be an amount
not less than 100% of the fair market value of a share of Common Stock on the
date that the option is granted.

For purposes of the 2010 Plan, if the Common Stock is publicly traded, the
"fair market value" of a share of Common Stock is determined by reference to the
average closing price or to the mean between the closing dealer bid and asked
prices for the Common Stock, as reported on any stock exchange on which the
Common Stock is then traded, for the ten trading days immediately preceding the
day on which the grant is made. For periods in which no trades or quotations
have been reported for at least ten business days in the thirty calendar days
before the date of grant, the fair market value may be determined by reference
to an average of the closing or trading prices reported during the prior month
or in such other manner as the Board or committee may deem to be an appropriate
method of estimating the current market value.

As to nonqualified stock options granted under the 2010 Plan, the per share
exercise price of such options will also be at least 100% of the fair market
value of a share of Common Stock on the date of grant.

The term of each option awarded by the administrator will be determined by
the administrator, but in no event in excess of 10 years from the date of its
grant. Payment of the exercise price may be made in cash or by check, or, if
approved by the administrator, by delivery of shares of Common Stock owned by
the participant for at least six months which are equivalent in fair market
value to the exercise price, or by a combination of cash and shares of Common
Stock, at the election of the optionee and subject to the terms of the
applicable stock option agreement. Subject to the terms of each stock option
agreement, options granted under the 2010 Plan may be exercised in whole or in
part. Upon exercise of an option, the participant must pay in full the exercise
price for the shares of Common Stock being purchased.

Automatic Option Awards for Nonemployee Directors. After the Annual
Meeting, each Nonemployee Director who attends a regular meeting of the Board
will automatically be granted a nonqualified stock option to purchase 5,000
shares of our Common Stock, effective as of the date of the Board meeting. Also,
each Nonemployee Director who attends a special meeting of the Board will
automatically be granted a non-qualified stock option to purchase 2,500 shares
of our Common Stock effective as of the date of the Board meeting, provided that
the options granted to a Nonemployee Director during a single calendar are to be
limited to options to purchase a maximum of 30,000 shares. The exercise price
for each option will be equal to the fair market value of the Common Stock on
the meeting date, or if the meeting is not held on a business day, the preceding
business day. Each option will become exercisable six (6) months after the date
of grant, and will have a 10-year term.

Shares Subject to Awards

Subject to approval of the proposal, the number of shares of Common Stock
that may be issued by outstanding awards granted under the 2010 Plan will not in
the aggregate exceed 5,000,000, which may be original issue shares, treasury
shares, or a combination thereof.

To the extent that awards granted under the 2010 Plan expire or terminate
without having been exercised in full, the Common Stock subject to those expired
or terminated awards will become available for further award grants under the
2010 Plan. Provision is made under the 2010 Plan for appropriate adjustment in
the number of shares of Common Stock covered by the 2010 Plan, and covered by
each award granted thereunder and any related exercise or purchase price, in the
event of any change in the Common Stock by reason of a stock dividend, merger,
reorganization, stock split, recapitalization, combination, exchange of shares
or otherwise.

Eligibility and Extent of Participation

In addition to our Nonemployee Directors, all of our employees who are
designated by the administrator for participation in the 2010 Plan are eligible
to receive awards under the 2010 Plan. As of the date hereof, there were
approximately 32 individuals employed by us who were eligible to participate in
the 2010 Plan. No incentive stock option will be granted to any employee who,
immediately after such option is granted, owns our capital stock possessing more
than 10% of the total combined voting power or value of all classes of our
capital unless the exercise price at the time such incentive stock option is
granted is at least 110% of the fair market value of the shares subject to the
incentive stock option and such incentive stock option is not exercisable by its
terms after the expiration of five years from the date of its grant.

The administrator may also, in the exercise of its discretion, grant awards
under the 2010 Plan to consultants who are not our employees, except that
incentive stock options may not be granted to such non-employees. An incentive
stock option will be granted under the 2010 Plan to an employee only if the
aggregate fair market value (determined as of the date the option is granted) of
the Common Stock for which options are exercisable for the first time by such
employee during any calendar year does not exceed $100,000. Options granted to
all participants during a single calendar year shall be limited under the 2010
Plan so that such options shall in no event cover more than a maximum of 500,000
shares of Common Stock, unless the Board of Directors amends the plan to
increase such maximum.

Limitations on Transferability and Effect of Death or Termination of Employment

Except as otherwise provided by the administrator, awards granted under the
2010 Plan are generally not transferable other than by will or by the laws of
descent and distribution. If a participant's employment (or other relationship,
in the case of a consultant or director) is involuntarily terminated, or is
terminated by the participant without our express consent, for any reason other
than retirement, disability or death, his or her unvested options will terminate
upon the date of the termination of employment, unless the administrator
decides, in its sole discretion, to waive this termination and causes the
participant's option agreement to provide for an extended exercise period after
such termination. The administrator will determine, either in an award
agreement or otherwise, the extent to which vested options may be exercised
subsequent to the death of the employee or the termination of the employee's
employment. However, any incentive stock options granted under the 2010 Plan
must terminate not later than ninety days after the participant's termination of
employment for any reason other than disability or death, and it must terminate
not later than twelve months after the participant's termination of employment
as a result of death or disability.

Plan Benefits

As of May 24, 2010, approximately 38 persons were eligible to receive
awards under the 2010 Plan, including our employees, executive officers and
directors. Other than automatic grants of options to directors pursuant to the
2010 Plan, the granting of awards under the 2010 Plan is discretionary and we
cannot now determine the number of shares underlying the options to be granted
in the future to any particular person or group.

Federal Income Tax Consequences

The following is a summary of the United States federal income tax
consequences that generally will arise with respect to awards granted under the
2010 Plan. This summary is based on the federal tax laws in effect as of the
date of this proxy statement. In addition, this summary assumes that all awards
are exempt from, or comply with, the rules under Section 409A of the Code
regarding nonqualified deferred compensation. The plan provides that no award
will provide for deferral of compensation that does not comply with Section 409A
of the Code, unless the Board, at the time of grant, specifically provides that
the award is not intended to comply with Section 409A. Changes to these laws
could alter the tax consequences described below.

Incentive Stock Options. A participant will not have income upon the grant
of an incentive stock option. Also, except as described below, a participant
will not have income upon exercise of an incentive stock option if the
participant has been our employee at all times beginning with the option grant
date and ending three months before the date the participant exercises the
option. If the participant has not been so employed during that time, then the
participant will be taxed as described below under "Non-statutory Stock
Options." The exercise of an incentive stock option may subject the participant
to the alternative minimum tax.

A participant will have income upon the sale of the stock acquired under an
incentive stock option at a profit (if sales proceeds exceed the sum of the
exercise price). The type of income will depend on when the participant sells
the stock. If a participant sells the stock more than two years after the
option was granted and more than one year after the option was exercised, then
all of the profit will be long-term capital gain. If a participant sells the
stock prior to satisfying these waiting periods, then the participant will have
engaged in a disqualifying disposition and a portion of the profit will be
ordinary income and a portion may be capital gain. This capital gain will be
long-term if the participant has held the stock for more than one year and
otherwise will be short-term. If a participant sells the stock at a loss (sales
proceeds are less than the exercise price), then the loss will be a capital
loss. This capital loss will be long-term if the participant held the stock for
more than one year and otherwise will be short-term.

Non-statutory Stock Options. A participant will not have income upon the
grant of a non-statutory stock option. A participant will have compensation
income upon the exercise of a non-statutory stock option equal to the value of
the stock on the day the participant exercised the option less the exercise
price. Upon sale of the stock, the participant will have capital gain or loss
equal to the difference between the sales proceeds and the value of the stock on
the day the option was exercised. This capital gain or loss will be long-term
if the participant has held the stock for more than one year and otherwise will
be short-term.

Tax Consequences to Us. There will be no tax consequences for us except
that we will be entitled to a deduction when a participant has compensation
income. Any such deduction will be subject to the limitations of Section 162(m)
of the Code.

PROPOSAL 3 - ADOPTION OF AMENDMENT TO THE THIRD AMENDED AND RESTATED CERTIFICATE
OF INCORPORATION TO
INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK

In May 2010, our Board approved, subject to adoption by our stockholders,
an amendment to the Third Amended and Restated Certificate of Incorporation (the
"Certificate"). The proposed amendment is set forth in the Amendment to Third
Amended and Restated Certificate of Incorporation attached to this proxy
statement as Appendix B.

The proposed amendment to Article Four of the Certificate would increase
the number of authorized shares of Common Stock from 25,000,000 to 35,000,000.
As a result of the proposed increase, the total number of authorized shares of
capital stock of the Company would be increased to 37,000,000. The additional
shares of Common Stock proposed to be authorized under the Certificate would
have rights identical to currently outstanding Common Stock.

As of May 24, 2010, there were 5,228,666 shares of Common Stock and no
shares of Preferred Stock issued and outstanding. In addition, as of the same
date, the Board of Directors had reserved an aggregate of 2,213,450 shares for
issuance upon exercise of outstanding options and stock awards granted under
both the 1998 Amended and Restated Stock Option Plan and the Second Amended and
Restated 2004 Stock Option Plan, an aggregate of 724,950 shares for issuance
upon exercise of outstanding warrants to purchase shares of Common Stock, and an
aggregate of 367,500 shares for issuance upon conversion of outstanding
convertible debentures. Accordingly, as of May 24, 2010, 16,465,434 shares of
Common Stock and 2,000,000 shares of Preferred Stock remained unreserved and
available for future issuance.

Our Board of Directors believes that the authorization of the additional
shares of Common Stock is necessary to provide us with the flexibility to issue
shares of Common Stock in connection with possible future financings, joint
ventures, acquisitions, stock incentive plans and other general corporate
purposes, without the expense and delay of further stockholder approval. These
purposes may include raising funds to meet our working capital needs, providing
equity incentives to employees, officers or directors, establishing strategic
relationships with other companies, expanding our business through acquisitions
and other investment opportunities and other purposes.

The Company may pursue other capital raising activities in the future,
including the issuance of Common Stock or securities converting or exchangeable
into shares of Common Stock. In addition, in this proxy statement, we are
seeking stockholder approval for a new 2010 Stock Option Plan to authorize up to
5,000,000 shares for issuance under that plan.

If this Proposal 3 is adopted by the stockholders, our Board of Directors
will have authority to issue these additional shares of Common Stock without the
necessity of further stockholder action. Holders of the Common Stock have no
preemptive rights with respect to any shares that may be issued in the future.

Although the Board of Directors does not consider Proposal 3 to be an
anti-takeover measure, the increase in the number of authorized shares of Common
Stock and the issuance of a substantial amount of such shares, or an option to
acquire a substantial amount of such shares, could have the effect of delaying
or preventing a change-of-control of the Company without further action by the
stockholders. For example, the issuance of additional shares could decrease the
share ownership percentage of a person seeking to obtain control of the Company.

The holders of all classes of stock are not entitled to preemptive rights
with respect to the issuance of additional stock or securities convertible into,
or exercisable for, stock. Approval of the amendment and issuance of the
additional stock would not affect the rights of the holders of our currently
outstanding stock, except for effects incidental to increasing the number of
shares of our stock outstanding, such as dilution of the earnings per share and
voting rights of current holders of stock.

Adoption of Proposal 3 requires the affirmative vote of the holders of a
majority of our outstanding shares of Common Stock entitled to vote at the
meeting. Under Delaware law, stockholders are not entitled to dissenter's rights
with respect to the proposed amendment to our Amended and Restated Certificate
of Incorporation.

If Proposal 3 is adopted by the stockholders, we intend to file the
amendment to the Second Amended and Restated Certificate of Incorporation in the
form attached to this proxy statement as Appendix B, promptly following the
annual meeting.

OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE ADOPTION OF THE
AMENDMENT TO THE CERTIFICATE TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF
COMMON STOCK.

PROPOSAL 4 - RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS

The firm of UHY LLP served as independent auditors for the year ended
December 31, 2009 and has been selected by us to serve as our independent
auditors for the year ending December 31, 2010. Although the submission of this
matter for approval by the stockholders is not legally required, the Board
believes that such submission follows sound business practice and is in the best
interests of the stockholders. If the appointment is not ratified by the
holders of a majority of the shares present in person or by proxy at the Annual
Meeting, the directors will consider the selection of another accounting firm.
If such a selection were made, it may not become effective until 2011 because of
the difficulty and expense of making such a substitution. A representative of
UHY is expected to attend the Annual Meeting and therefore will be available to
respond to appropriate questions at the Annual Meeting.

The audit reports of UHY on our consolidated financial statements for the
fiscal years ended December 31, 2009 and 2008 did not contain any adverse
opinion or disclaimer of opinion, nor were they qualified or modified as to
audit scope or accounting principles.

OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF UHY LLP TO SERVE AS OUR INDEPENDENT AUDITORS
FOR THE YEAR ENDING DECEMBER 31, 2010.

OTHER MATTERS

We are not aware of any matters to be presented for action at the Annual
Meeting other than the matters set forth above. If any other matters do
properly come before the meeting or any adjournment thereof, it is intended that
the persons named in the proxy will vote in accordance with their judgment on
such matters.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

We had outstanding 5,228,666 shares of Common Stock, $.01 par value per
share, or the Common Stock, on May 24, 2010, which constitutes the only class of
our outstanding voting securities.

FIVE PERCENT STOCKHOLDERS

At May 24, 2010, the following were the only persons known to us to own
beneficially more than 5% of the outstanding shares of Common Stock:

Name Amount and Percentage of
Title of and Address of Nature of Outstanding Shares
Class Beneficial Owner Beneficial Ownership of Common Stock

- ------------ ----------------------------------------------------- -------------------- -------------------
Cooke Family Trust (1)
90 Grande Brook Circle, #1526
Common Stock Wakefield, Rhode Island 02879 627,717 12.0%
- ------------ ----------------------------------------------------- -------------------- -------------------

<FN>

1. The shares attributed to the Cooke Family Trust include 627,267 shares owned
beneficially and 450 in Common Stock warrants exercisable to purchase an equal number of
shares of Common Stock. This information was derived from the Schedule 13D Amendment #5 filed
on May 10, 2010.

SECURITY OWNERSHIP OF MANAGEMENT

The following table sets forth, as of May 24, 2010, unless otherwise
specified, certain information with respect to the beneficial ownership of our
shares of Common Stock by each person who is our director, a nominee for the
Board, each of the Named Executive Officers, and by our directors and executive
officers as a group. Unless otherwise noted, each person has voting and
investment power, with respect to all such shares, based on 5,228,666 shares of
Common Stock outstanding on the record date. Pursuant to the rules of the SEC,
shares of Common Stock which a person has the right to acquire within 60 days of
the date hereof pursuant to the exercise of stock options are deemed to be
outstanding for the purpose of computing the percentage ownership of such person
but are not deemed outstanding for the purpose of computing the percentage
ownership of any other person.

Amount and Nature of Percent of
Title of Class Name of Beneficial Owner Beneficial Ownership 1 Class
- -------------- ----------------------------------------------------------- -------------------- -----------

Common Stock Mark D. Hagans 30,400 2 0.58%
Common Stock James H. Hartung 48,500 3 0.92%
Common Stock Timothy R. Kasmoch 772,500 4 13.11%
Common Stock Thomas L. Kovacik 38,750 5 0.74%
Common Stock Carl Richard 151,350 6 2.84%
Common Stock Joseph H. Scheib 225,638 7 4.23%
Common Stock Joan B. Wills 630,217 8 12.05%
Common Stock Robert W. Bohmer 359,600 9 6.44%
Common Stock James K. McHugh 198,920 10 3.67%
Common Stock All directors and executive officers as a group (9 persons) 2,455,875 11 36.34%

<FN>

1. Except as otherwise indicated, all shares are directly owned with voting
and investment power held by the person named.

2. Represents 4,450 shares of Common Stock owned by Mr. Hagans and 25,950
shares issuable upon exercise of options which are currently exercisable at
prices ranging from $1.94 to $3.90 per share.

3. Represents 2,610 shares of Common Stock owned by Mr. Hartung, 35,000
shares issuable upon exercise of options which are currently exercisable at
prices ranging from $1.42 to $3.90 per share and 10,890 unregistered shares
issuable upon exercise of warrants which are currently exercisable at $2.00 per
share.

4. Represents 100,000 unregistered shares and 8,000 registered shares of
Common Stock owned by Mr. Kasmoch, 50,000 unregistered shares issuable upon
exercise of warrants which are currently exercisable at $1.85 per share and
614,500 shares issuable upon exercise of options which are currently exercisable
at prices ranging from $1.70 to $3.27 per share.

5. Represents 1,000 shares of Common Stock owned by Mr. Kovacik and 37,750
shares issuable upon exercise of options which are currently exercisable at
prices ranging from $1.82 to $3.90 per share.

6. Represents 47,661 shares of Common Stock owned by Mr. Richard, 46,250
shares issuable upon exercise of options which are currently exercisable at
prices ranging from $0.70 to $3.90 per share and 57,439 unregistered shares
issuable upon exercise of warrants which are currently exercisable at prices
ranging from $1.85 to $2.00 per share.

7. Represents 123,238 shares of Common Stock owned by Mr. Scheib, 47,500
shares issuable upon exercise of options which are currently exercisable at
prices ranging from $0.70 to $3.90 per share, 600 shares owned by a family
member over which Mr. Scheib acts as custodian and 54,300 unregistered shares
issuable upon exercise of warrants which are currently exercisable at prices
ranging from $1.85 to $2.52 per share.

8. Represents 2,500 shares issuable upon exercise of options which are
currently exercisable at prices ranging from $2.66 to $3.53 per share, 630,217
shares of Common Stock owned by the Cooke Family Trust, a more than 5%
stockholder of which Ms. Wills is the Co-Trustee. See further information in
the section "Five Percent Stockholders".

9. Represents 2,600 shares of Common Stock owned by Mr. Bohmer and 357,000
shares issuable upon exercise of options which are currently exercisable at
prices ranging from $1.94 to $3.27 per share.

10. Represents 8,920 shares of Common Stock owned by Mr. McHugh and a total
of 190,000 shares issuable upon exercise of options which are currently
exercisable at prices ranging from $1.50 to $3.27 per share.

11. Represents 298,479 shares of Common Stock owned directly by the
directors and officers, 628,317 shares owned indirectly, 1,356,450 shares
issuable upon exercise of options which are currently exercisable at prices
ranging from $0.70 to $3.90 per share and a total of 172,629 unregistered shares
issuable upon exercise of warrants which are currently exercisable at prices
ranging from $1.85 to $2.52 per share.

EXECUTIVE OFFICERS OF THE COMPANY

Executive officers of the Company are appointed by the Board of Directors
and hold office at the pleasure of the Board. Set forth below is biographical
and other information on the current executive officers of the Company. Mr.
Kasmoch also serves as a member of the Board and his biographical information is
set forth above under the caption "Directors of the Company."

Name Age Position
- ------------------ --- ------------------------------------------------

Timothy R. Kasmoch 48 President and Chief Executive Officer
Robert W. Bohmer 40 Executive Vice-President and General Counsel
James K. McHugh 51 Chief Financial Officer, Secretary and Treasurer

ROBERT W. BOHMER has been our Executive Vice-President (formerly Vice-President
of Business Development) and General Counsel since July 2007 and served as
general outside counsel to the Company from 2005 to 2007. From 1996 to July
2007, Mr. Bohmer had been with the law firm of Watkins, Bates and Carey, LLP,
Toledo, Ohio.

JAMES K. MCHUGH has served as our Chief Financial Officer, Secretary and
Treasurer since January 1997. Prior to that date, Mr. McHugh served the Company
and our predecessor company in various financial positions since April 1992.

EXECUTIVE COMPENSATION

COMPENSATION OF EXECUTIVE OFFICERS

The following table presents the total compensation paid to our Chief
Executive Officer, Executive Vice President and Chief Financial Officer during
2009. There were no other executive officers who were serving at the end of
2009 and whose total compensation exceeded $100,000.

SUMMARY COMPENSATION TABLE

Change in
Non-Equity Nonqualified
Incentive Deferred
Name and Principal Stock Option Plan Compensation All Other
Position Year Salary Bonus Awards Awards (4) Compensation Earnings Compensation TOTAL ($)
- --------------------------- ---- -------- ----- ------ ----------- ------------ ------------ ------------- ----------

TIMOTHY R. KASMOCH 2009 $150,000 - - $ 570,376 - - $ 10,000 $ 730,376
President and Chief 2008 $150,000 - - - - - $ 0 $ 150,000
Executive Officer (1)

ROBERT W. BOHMER 2009 $150,000 - - $ 454,344 - - $ 0 $ 604,344
Executive Vice-President + 2008 $150,000 - - $ 93,333 - - $ 0 $ 243,333
General Counsel (2)

JAMES K. MCHUGH 2009 $116,688 - - $ 190,746 - - $ 399 $ 307,833
Chief Financial Officer, 2008 $100,044 - - - - - $ 552 $ 100,596
Secretary + Treasurer (3)

<FN>

(1) For the "All Other Compensation" column, Mr. Kasmoch's spouse was
compensated for consulting services rendered to the Company at various times
during 2009. All compensation was in cash.

(2) Mr. Bohmer was not granted an option award in 2008 but the value
reflected is the amount of his 2007 grant recorded as an expense in 2008. The
value of his 2009 Option Award includes the 2007 grant award recorded as an
expense in the amount of $46,667.

(3) For the "All Other Compensation" column, Mr. McHugh is taxed on the
imputed benefit of a life insurance policy that benefits his personal
beneficiary for one-half the face value and N-Viro International Corporation for
one-half the face value of the policy.

(4) The amounts included in the Option Awards column include the aggregate
grant date fair value of options granted in the fiscal year computed in
accordance with FASB ASC Topic 718. We continue to use the Black-Scholes model
to measure the grant date fair value of stock options. For a discussion of the
valuation assumptions used to value the options, see Note 5 to our Consolidated
Financial Statements included in our annual report on Form 10-K for the fiscal
year ended December 31, 2009.

2009 GRANTS OF PLAN BASED AWARDS

Estimated Future Payouts Under Estimated Future Payouts Under
Non-Equity Incentive Plan Awards Equity Incentive Plan Awards
Grant Approval -------------------------------------- --------------------------------------
Name Date (1) Date Threshold ($) Target ($) Maximum ($) Threshold (#) Target (#) Maximum (#)
- ------------------ ---------- --------- ------------- ---------- ----------- ------------- ---------- -----------

Timothy R. Kasmoch 7/10/2009 7/10/2009 - - - - - 25,000
7/21/2009 7/21/2009 - - - - - 243,000

Robert W. Bohmer 7/10/2009 7/10/2009 - - - - - 25,000
7/21/2009 7/21/2009 - - - - - 168,000

James K. McHugh 7/10/2009 7/10/2009 - - - - - 25,000
7/21/2009 7/21/2009 - - - - - 68,000

Full Grant Base Price of
Date Fair Option
Name Value ($) Awards ($/shr.)
- ------------------ ---------- ---------------

Timothy R. Kasmoch 43,233 1.94
527,143 2.23

Robert W. Bohmer 43,233 1.94
364,444 2.23

James K. McHugh 43,233 1.94
147,513 2.23

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

OPTION AWARDS STOCK AWARDS
----------------------------------------------------------------- ----------------------------------
Equity
Equity Incentive
Incentive Plan Awards:
Plan Market # Unearned
# of # of Awards: # of Value of Shares,
Securities Securities # Securities Shares or Shares or Units or
Underlying Underlying Underlying Units of Units of Other Rights
Unexercised Unexercised Unexercised Option Option Stock That Stock That That Have
Options (#) Options (#) Unearned Exercise Expiration Have Not Have Not Not
Name Exercisable Unexercisable Options (#) Price (#) Date Vested (#) Vested ($) Vested (#)
- ------------------ ------------ -------------- ----------- ---------- ---------- ---------- ---------- ----------

Timothy R. Kasmoch 2,500 - - $ 1.70 2/15/16 - - -
Timothy R. Kasmoch 250,000 - - $ 2.00 12/31/11 - - -
Timothy R. Kasmoch 25,000 - - $ 1.94 7/11/19 - - -
Timothy R. Kasmoch 243,000 - - $ 2.23 7/22/19 - - -
Timothy R. Kasmoch 94,000 376,000 - $ 3.27 3/18/20 - - -

Robert W. Bohmer 100,000 - - $ 2.80 6/13/17 - - -
Robert W. Bohmer 25,000 - - $ 1.94 7/11/19 - - -
Robert W. Bohmer 168,000 - - $ 2.23 7/22/19 - - -
Robert W. Bohmer 64,000 256,000 - $ 3.27 3/18/20 - - -

James K. McHugh 5,000 - - $ 1.50 12/15/10 - - -
James K. McHugh 10,000 - - $ 1.50 12/7/11 - - -
James K. McHugh 12,000 - - $ 2.10 11/11/14 - - -
James K. McHugh 50,000 - - $ 2.00 12/31/16 - - -
James K. McHugh 25,000 - - $ 1.94 7/11/19 - - -
James K. McHugh 68,000 - - $ 2.23 7/22/19 - - -
James K. McHugh 20,000 80,000 - $ 3.27 3/18/20 - - -

Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other Rights
That Have
Name Not Vested (#)
- ------------------ --------------

Timothy R. Kasmoch -
Timothy R. Kasmoch -
Timothy R. Kasmoch -
Timothy R. Kasmoch -
Timothy R. Kasmoch -

Robert W. Bohmer -
Robert W. Bohmer -
Robert W. Bohmer -
Robert W. Bohmer -

James K. McHugh -
James K. McHugh -
James K. McHugh -
James K. McHugh -
James K. McHugh -
James K. McHugh -
James K. McHugh -

All options awards were made granted under the Company's current stock
option plan described under the caption "Equity Compensation Plan Information."

EMPLOYMENT AGREEMENTS

On February 13, 2007, we entered into an employment agreement with Mr.
Timothy R. Kasmoch as our President and Chief Executive Officer. Mr. Kasmoch's
employment agreement was for a two-year term commencing on February 13, 2007 and
provided for automatic renewal of successive one-year terms unless notice was
provided ninety (90) days prior to the expiration of the then current term. The
agreement provided that Mr. Kasmoch was to receive an annual base salary of
$150,000, subject to an annual increase at the discretion of the Board. In
addition, Mr. Kasmoch was eligible for an annual cash bonus in an amount to be
determined, and otherwise subject to the discretion of, the Board. Generally,
Mr. Kasmoch's employment agreement may have been terminated by us with or
without cause or by the Employee for any reason. If the agreement was
terminated by us without cause (other than by reason of the death or disability
of Mr. Kasmoch), Mr. Kasmoch would have continued to receive his base salary
then in effect for the period between the termination date and the expiration
date of the agreement. If the agreement was terminated for any other reason by
either party, Mr. Kasmoch was entitled to receive his base salary through the
effective date of the termination plus any bonus or incentive compensation which
had been earned or payable through the termination date, as provided for in the
agreement. A copy of Mr. Kasmoch's employment agreement was attached to a Form
8-K as Exhibit 10.1, filed by us on March 12, 2007.

Effective April 2, 2008, we entered into a first amendment to the
employment agreement with Mr. Kasmoch. The amendment extended the term of Mr.
Kasmoch's employment agreement for an additional two years. As a result, the
term of Mr. Kasmoch's employment agreement was set to expire on February 12,
2011, instead of February 12, 2009 as provided for in the original employment
agreement. A copy of the amendment to Mr. Kasmoch's employment agreement was
attached to a Form 8-K as Exhibit 10.1, filed by us on April 7, 2008.

Effective March 17, 2010, we entered into a new Employment Agreement (the
"Agreement") with Mr. Kasmoch commencing February 26, 2010. The Agreement is for
a five-year term commencing on February 26, 2010 and provides for automatic
renewal of successive one-year terms unless notice is provided ninety (90) days
prior to the expiration of the then current term. The agreement provides that
Mr. Kasmoch is to receive an annual base salary of $150,000, subject to annual
increase at the discretion of our Board of Directors. In addition, Mr. Kasmoch
is eligible for an annual cash bonus in an amount to be determined, and
otherwise subject to the discretion of the Board of Directors. Under the
agreement, this determination is to be based upon the Board of Directors review
of Mr. Kasmoch's performance. The Agreement also provides for a stock option
grant of 470,000 options that vest over a five year period, pursuant to the
Second Amended and Restated 2004 Stock Option Plan. While employed with the
Company, the Agreement allows Mr. Kasmoch to engage in other limited business
activities that are not competitive with and do not involve the Company, subject
to the prior disclosure to the Company's Audit Committee. The Employment
Agreement permits Mr. Kasmoch to terminate his employment in the event of a
change of control or certain enumerated material breaches thereof by the
Company. A copy of this employment agreement was attached to a Form 8-K as
Exhibit 10.1, filed by us on March 19, 2010.

In June 2007, we executed an employment agreement with Robert W. Bohmer as
our Vice-President of Business Development and General Counsel, which commenced
July 1, 2007. Mr. Bohmer's agreement was for a two-year term at $150,000 per
year plus a stock option grant of 100,000 shares. In addition, Mr. Bohmer was
eligible for an annual cash bonus in an amount to be determined. Generally, the
agreement may have been terminated by us with or without cause or by the
Employee for any reason. A copy of Mr. Bohmer's employment agreement was
attached to a Form 8-K as Exhibit 10.1, filed by us on June 20, 2007.

Effective June 19, 2008, we entered into a first amendment to the
employment agreement with Mr. Bohmer. The amendment extended the term of Mr.
Bohmer's employment agreement for an additional two years. As a result, the term
of Mr. Bohmer's employment agreement was set to expire on July 1, 2011, instead
of July 1, 2009 as provided for in the original employment agreement. Except for
the extension of the term, there were no other changes to Mr. Bohmer's
employment agreement. A copy of the amendment to Mr. Bohmer's employment
agreement was attached to a Form 8-K as Exhibit 10.1, filed by us on June 20,
2008.

Effective March 17, 2010, we entered into a new Employment Agreement (the
"Agreement") with Mr. Bohmer as our Executive Vice President and General
Counsel, commencing February 26, 2010. The Agreement is for a five-year term
commencing on February 26, 2010 and provides for automatic renewal of successive
one-year terms unless notice is provided ninety (90) days prior to the
expiration of the then current term. The Agreement provides that Mr. Bohmer is
to receive an annual base salary of $150,000, subject to an annual increase at
the discretion of our Board of Directors. In addition, Mr. Bohmer is eligible
for an annual cash bonus in an amount to be determined, and otherwise subject to
the discretion of the Board of Directors. Under the agreement, this
determination is to be based upon the President/Chief Executive Officer's and
Board of Directors review of Mr. Bohmer's performance. The Agreement also
provides for a stock option grant of 320,000 options that vest over a five year
period, pursuant to the Second Amended and Restated 2004 Stock Option Plan.
While employed with the Company, the Agreement allows Mr. Bohmer to engage in
other limited business activities that are not competitive with and do not
involve the Company, subject to the prior disclosure to the Company's Audit
Committee. The Employment Agreement permits Mr. Bohmer to terminate his
employment in the event of a change of control or certain enumerated material
breaches thereof by the Company. A copy of this employment agreement was
attached to a Form 8-K as Exhibit 10.1, filed by us on March 19, 2010.

Effective March 17, 2010, we entered into an Employment Agreement (the
"Agreement") with James K. McHugh to serve as the Company's Chief Financial
Officer commencing February 26, 2010. The Agreement is for a five-year term
commencing on February 26, 2010 and provides for automatic renewal of successive
one-year terms unless notice is provided ninety (90) days prior to the
expiration of the then current term. The agreement provides that Mr. McHugh is
to receive an annual base salary of $125,000, subject to annual increase at the
discretion of the Board of Directors of the Company. In addition, Mr. McHugh is
eligible for an annual cash bonus in an amount to be determined, and otherwise
subject to the discretion of, the Board of Directors. Under the agreement, this
determination is to be based upon the President/Chief Executive Officer's and
Board of Directors review of Mr. McHugh's performance. The Agreement also
provides for a stock option grant of 100,000 shares that vest over a five year
period, pursuant to the Second Amended and Restated 2004 Stock Option Plan.
While employed with the Company, the Agreement allows Mr. McHugh to engage in
other limited business activities that are not competitive with and do not
involve the Company, subject to the prior disclosure to the Company's Audit
Committee. The Employment Agreement permits Mr. McHugh to terminate his
employment in the event of a change of control or certain enumerated material
breaches thereof by the Company. A copy of this employment agreement was
attached to a Form 8-K as Exhibit 10.1, filed by us on March 19, 2010.

EQUITY COMPENSATION PLAN INFORMATION

We maintain two stock option plans for directors, executive officers and
key employees. The current plan was approved by the stockholders in May 2004
and was amended by the stockholders in June 2008 and August 2009. The plan, as
amended, authorizes the Board of Directors or a committee thereof, to grant
awards of incentive stock options and non-qualified stock options for up to a
maximum of 2,500,000 shares of Common Stock. The total number of options
granted and outstanding as of May 24, 2010 was 2,193,550, and the number of
options available for future issuance was 76,675. Currently, the plan is
administered by the Compensation Committee.

THE FOLLOWING REPORTS OF THE AUDIT COMMITTEE AND THE COMPENSATION COMMITTEE
SHALL NOT BE DEEMED TO BE SOLICITING MATERIAL OR TO BE INCORPORATED BY REFERENCE
IN ANY PREVIOUS OR FUTURE DOCUMENTS FILED BY THE COMPANY WITH THE SECURITIES AND
EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES EXCHANGE
ACT OF 1934, EXCEPT TO THE EXTENT THAT THE COMPANY EXPRESSLY INCORPORATES SAID
REPORTS BY REFERENCE IN ANY SUCH DOCUMENT.

COMPENSATION COMMITTEE REPORT

The following report was prepared by Thomas L. Kovacik, James H. Hartung
and Joan B. Wills as members of our Compensation Committee.

The compensation of our executive officers is determined by the
Compensation Committee of the Board.

The Compensation Committee's philosophy is to provide competitive
forms and levels of compensation compared to industrial companies of
similar size and business area. This philosophy is intended to assist us in
attracting, retaining and motivating executives with superior leadership
and management abilities. Consistent with this philosophy, the Compensation
Committee determines a total compensation structure for each officer,
consisting primarily of salary, bonus and stock options. The proportions of
the various elements of compensation vary among the officers depending upon
their levels of responsibility.

The Compensation Committee establishes salary recommendations to the
Board at a level intended to be competitive with the average salaries of
executive officers in comparable companies with adjustments made to reflect
our financial health. Bonuses are intended to provide executives with an
opportunity to receive additional cash compensation, but only if they earn
it through individual performance and our performance.

Long-term incentives are provided through stock options granted under
our Stock Option Plan. The stock options represent an additional vehicle
for aligning management's and stockholders' interest, specifically
motivating executives to remain focused on the market value of the Common
Stock in addition to earnings per share and return on equity goals.

The Compensation Committee, subject to any employment agreements in
effect with its executive officers, reviews and recommends to the Board for
approval the salaries, bonuses and long-term incentives of our officers,
including its most highly compensated executive officers. In addition, the
Committee recommends to the Board the granting of stock options under our
Stock Option Plan to executive officers and other selected employees,
directors and to consultants, and otherwise administers our Stock Option
Plan.

With respect to compensation of Mr. Timothy R. Kasmoch, our President
and Chief Executive Officer, Mr. Kasmoch's 2009 base salary was determined
by his Employment Agreement with us dated February 13, 2007, which entitled
him to an annual base salary of $150,000 over a period of two years. In
2008, an amendment dated April 2, 2008 to this Employment Agreement was
agreed upon, effectively extending the Agreement until February 2011. In
March 2010, a new employment agreement was agreed upon between the Company
and Mr. Kasmoch. See "Employment Agreements."

With respect to compensation of Mr. Robert W. Bohmer, our
Vice-President of Business Development and General Counsel, Mr. Bohmer's
2009 base salary was determined by his Employment Agreement with us dated
June 12, 2007, which entitled him to an annual base salary of $150,000 over
a period of two years. In 2008, an amendment dated June 19, 2008 to this
Employment Agreement was agreed upon, effectively extending the Agreement
until July 2011. In March 2010, a new employment agreement was agreed upon
between the Company and Mr. Bohmer. See "Employment Agreements."

With respect to compensation of Mr. James K. McHugh, our Chief
Financial Officer, Secretary and Treasurer, Mr. McHugh's 2009 base salary
was determined by the Board of Directors as recommended by the Chief
Executive Officer, which entitled him to an annual base salary of $100,000
through April 30, 2009 and $125,000 after that date, terminable at will by
either party. In March, 2010, the Company and Mr. McHugh agreed to an
employment agreement. See "Employment Agreements."

The Compensation Committee is also responsible for recommending to the
Board bonus amounts, if any, payable to Mr. Kasmoch, the Chief Executive
Officer. Any bonuses payable will be determined by the Compensation
Committee, based on the same elements and factors relating to our other
Executive Officers.

The Compensation Committee has not formulated any policy regarding
qualifying compensation paid to our Executive Officers for deductibility
under the limits of Section 162(m) of the Internal Revenue Code of 1986, as
amended, because the Compensation Committee does not anticipate that any
executive officers would receive compensation in excess of such limits in
the foreseeable future.

Thomas L. Kovacik
James H. Hartung
Joan B. Wills

AUDIT COMMITTEE REPORT

The following report was prepared by Joseph Scheib and Mark Hagans, as
members of our Audit Committee.

The Audit Committee oversees our financial reporting process on behalf
of the Board. The Audit Committee meets with management periodically to
consider the adequacy of our internal controls and the objectivity of our
financial reporting. The Audit Committee discusses these matters with our
independent auditors and with appropriate financial personnel and internal
auditors. The Audit Committee regularly meets privately with both the
independent auditors and the internal auditors, each of whom has
unrestricted access to the Audit Committee, and recommend to the Board the
appointment of the independent auditors and review periodically their
performance and independence from management. In addition, the Audit
Committee reviews our financing plans and report recommendations to the
full Board for approval and to authorize action.

Management has primary responsibility of our financial statements and
the overall reporting process, including our system of internal controls.
The independent auditors audit the annual financial statements prepared by
management, express an opinion as to whether those financial statements
fairly present our financial position, results of operations and cash flows
in conformity with generally accepted accounting principles and discuss
with the Audit Committee any issues they believe should be raised.

This year, the Audit Committee reviewed our audited financial
statements and met with both management and UHY LLP, our independent
auditors, to discuss those financial statements. Management has represented
to us that the financial statements were prepared in accordance with
generally accepted accounting principles.

The Audit Committee has received from and discussed with UHY LLP, the
written disclosure and the letter required by Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committees). These
items related to that firm's independence from us. The Audit Committee also
discussed with UHY LLP, any matters required to be discussed by Statement
on Auditing Standards No. 61 (Communication with Audit Committees).

Based on these reviews and discussions, the Audit Committee
recommended to the Board that the Company's audited financial statements be
included in the Company's Annual Report on Form 10-K for the year ended
December 31, 2009.

Joseph H. Scheib
Mark D. Hagans

INDEPENDENT AUDITORS

AUDIT FEES

Audit services of UHY LLP ("UHY") included the audit of our annual
financial statements for 2009 and 2008, and services related to quarterly
filings with the SEC through the reporting period ended September 30 in each of
those years. Fees for these services totaled approximately $72,000 for 2009 and
$67,000 for 2008.

AUDIT RELATED FEES

There were no fees billed for the years ended December 31, 2009 and
December 31, 2008 for assurance and related services by UHY that are reasonably
related to the performance of the audit or review of our financial statements.

TAX FEES

There were no fees billed for the years ended December 31, 2009 and
December 31, 2008 for professional services rendered by UHY for tax compliance,
tax advice, and tax planning.

ALL OTHER FEES

There were no fees billed for the years ended December 31, 2009 and
December 31, 2008 for assistance on accounting related matters.

Although the Audit Committee Charter does not explicitly require it, the
Audit Committee approves all engagements of outside auditors before any work is
begun on the engagement.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

None

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
our directors and executive officers, and persons who own beneficially more than
ten percent (10%) of the shares of our Common Stock, to file reports of
ownership and changes of ownership with the Securities and Exchange Commission,
or SEC. Copies of all filed reports are required to be furnished to us pursuant
to Section 16(a). Based solely on the reports received by us and on written
representations from reporting persons, we believe that the current directors
and executive officers complied with all applicable filing requirements during
the fiscal year ended December 31, 2009, with no exceptions.

STOCKHOLDERS' PROPOSALS FOR NEXT ANNUAL MEETING

Pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, any
stockholder wishing to have a proposal considered for inclusion in our proxy
solicitation material for the Annual Meeting of Stockholders to be held in 2011
must set forth such proposal in writing and file it with James K. McHugh, Chief
Financial Officer, Treasurer and Corporate Secretary of the Company, no later
than February 24, 2011, the date that is not less than 120 days before June 24,
2011. Further, pursuant to Rule 14a-4, if a stockholder fails to notify us of a
proposal before May 10, 2011, the date that is not less than 45 days before June
24, 2010 (the approximate mailing date of this proxy statement), such notice
will be considered untimely and management proxies may use their discretionary
voting authority to vote on any such proposal.

BY THE ORDER OF THE BOARD OF
DIRECTORS

/s/ James K. McHugh
----------------------
James K. McHugh
Chief Financial Officer, Secretary and Treasurer

Appendix A

N-VIRO INTERNATIONAL CORPORATION
2010 STOCK OPTION PLAN
----------------------

WHEREAS, the Stockholders of N-Viro International Corporation desire to adopt a
stock option plan for 2010 to be entitled the "N-Viro International Corporation
2010 Stock Option Plan" (the "Plan").
NOW, THEREFORE, BE IT RESOLVED, that the Plan is hereby adopted as follows:

I. PURPOSE.
-------

The purpose of this N-Viro International Corporation 2010 Stock Option
Plan is to enable N-Viro International Corporation (the "Corporation") to
attract and retain qualified officers, other key employees and Nonemployee
Directors, and to provide an incentive for such officers, key employees and
directors of the Corporation to expand and improve the profits and prosperity of
the Corporation.

The 2010 Stock Option Plan was approved by the Board of Directors on
May 20, 2010, and is being submitted for approval by the Corporation's
stockholders at the Annual Meeting of Stockholders scheduled for July 22, 2010.

II. DEFINITIONS.
-----------

The following terms shall have the meanings shown:

2.1 "Administrator" shall mean the Board of Directors or, if the Board
of Directors has delegated its authority to administer this Plan to a committee
pursuant to Article VIII hereof, the Committee.

2.2 "Board of Directors" shall mean the Board of Directors of the
Corporation.

2.3 "Code" shall mean the Internal Revenue Code of 1986, as the same
shall be amended from time to time.

2.4 "Committee" shall mean the Compensation Committee of the Board of
Directors, or such other Committee as the Board may appoint to administer this
Plan. Grants to Named Executive Officers shall be approved by the Committee
only if all members of the Committee are directors who qualify as "Nonemployee
Directors" of the Corporation within the meaning of Rule 16b-3 and as "outside
directors" within the meaning of Treasury Regulation 1.162-27(e)(3).

2.5 "Common Stock" shall mean the common stock, par value $.01 per
share, of the Corporation, except as provided in Section 6.2 of the Plan.

2.6 "Consultant" shall mean any individual engaged to perform services
for the Corporation or any of its Subsidiaries on a regular and on-going basis
who is not a common law employee of the Corporation.

2.7 "Date of Grant" shall mean the date specified by the Administrator
on which a grant of Options shall become effective. The Date of Grant shall not
be earlier than the date on which the Administrator takes action with respect
thereto.

2.8 "Employee" means any person performing services for the Corporation
or any Subsidiary as a common law employee. The Administrator may, in its
discretion, treat any individual as an Employee for purposes of this Plan even
if he or she is not employed by the Corporation, as long as he or she could
properly be classified as a common law employee of the Corporation or a
Subsidiary for payroll tax purposes.

2.9 "Fair Market Value" shall mean the fair market value of a share of
Common Stock of the Corporation as determined by the Administrator. For periods
when the Common Stock is publicly traded, this shall be determined by reference
to the average closing price for the Common Stock, as reported on any stock
exchange or electronic quotation system on which the Common Stock is then traded
or quoted, for the previous ten (10) trading days on which trades or quotations
have been reported ending on the trading day immediately preceding the day of
determination of the Fair Market Value. For periods in which fewer than 10
trades or quotations have been reported for the 30 calendar days preceding the
day of determination of the Fair Market Value, the Fair Market Value may be
determined by reference to an average of the closing or trading prices reported
during the prior month or in such other manner as the Administrator may deem to
be an appropriate method of estimating the current market value of the Common
Stock as permitted under Code.

2.10 "ISOs" shall mean stock options granted by the Corporation which
are intended to qualify as incentive stock options under Section 422 of the
Code.

2.11 "Named Executive Officer" shall mean the Corporation's Chief
Executive Officer and the four highest compensated officers (other than the
Chief Executive Officer), as determined pursuant to the executive compensation
disclosure rules of Item 402 of Regulation S-K under the Securities Exchange Act
of 1934.

2.12 "Nonemployee Director" shall mean a member of the Board of
Directors who is not an employee or Consultant of the Corporation or any
Subsidiary.

2.13 "Nonstatutory Options" shall mean stock options which are not
intended to qualify as ISOs.

2.14 "Option Agreement" shall mean a written agreement between the
Corporation and a Participant who has been granted Options under this Plan.

2.15 "Option Price" shall mean, with respect to any Option, the amount
designated in a Participant's Option Agreement as the price per share he or she
will be required to pay to exercise the Option and acquire the shares subject to
such Option. Except as otherwise provided in Section 3.3, the Option Price
shall not be less than 100% of the Fair Market Value of Common Stock as of the
Date of Grant.

2.16 "Options" shall mean any rights to purchase shares of Common Stock
granted pursuant to Article IV of this Plan, including both ISOs and
Nonstatutory Options.

2.17 "Participant" shall mean any current or former employee,
Consultant or director of the Corporation or a Subsidiary who has been granted
Options under the terms of this Plan.

2.18 "Plan" shall mean this N-Viro International Corporation 2010 Stock
Option Plan, as the same may be amended from time to time.

2.19 "Rule 16b-3" shall mean Rule 16b-3 promulgated by the Securities
and Exchange Commission under Section 16 of the Securities Exchange Act of 1934,
as amended from time to time.

2.20 "Subsidiary" shall mean any corporation which, on the date of
determination, qualifies as a subsidiary corporation of the Corporation under
Section 425(f) of the Code.

2.21 "Ten Percent Stockholder" shall mean any Participant who at the
time an ISO is granted owns (within the meaning of Section 425(d) of the Code)
more than ten percent of the voting power of all classes of stock of the
Corporation.

III. ELIGIBILITY.
-----------

3.1 Key Employees. The Administrator may grant Options under this Plan
-------------
to any officer or other key employee of the Corporation or of any Subsidiary.
In granting such Options and determining their form and amount, the
Administrator shall give consideration to the functions and responsibilities of
the individual, his or her potential contributions to profitability and sound
growth of the Corporation and such other factors as the Administrator may, in
its discretion, deem relevant.

The Administrator may also grant Options to Consultants. In granting
such Options and determining their form and amount, the Administrator shall
consider the extent of the individual's relationship to the Corporation, his or
her potential contributions to its financial success, the potential adverse
accounting consequences to the Corporation of stock option grants to
Consultants, and such other factors as the Administrator may, in its discretion,
deem to be relevant.

3.2 Named Executive Officers. Notwithstanding Section 3.1, no Named
--------------------------
Executive Officer shall be granted Options unless the grant has been approved in
advance by the Compensation Committee of the Board of Directors or another
Committee satisfying the requirements stated in Section 2.4.

3.3 Directors. Members of the Board of Directors who are employees or
---------
Consultants of the Corporation shall be eligible for Options under this Plan on
the same terms as other officers. Other members of the Board of Directors shall
be eligible for Options only to the extent specified in this Section 3.3, as it
may be amended from time to time by the Board of Directors.

(a) Each Nonemployee Director who attends at least one of the four
regularly scheduled meetings of the Board for each year shall automatically be
granted Nonstatutory Options to purchase 5,000 shares of Common Stock for each
such meeting attended during the year. In addition, each Nonemployee Director
who attends a special meeting (i.e., not a regularly scheduled meeting) of the
Board shall automatically be granted Nonstatutory Options to purchase 2,500
shares of Common Stock for each special meeting of the Board attended; provided
that the maximum number of shares with respect to which a Nonemployee Director
may be granted Options for attending either regular or special Board meetings
during any single calendar year shall be limited to 30,000 shares of Common
Stock. Options granted to a Nonemployee Director for attending Board meetings
shall be granted on the date of the meeting, and the Option Price for all such
Options shall be equal to the Fair Market Value of the Common Stock on that
date. Each such Option shall vest six (6) months after the date of grant and
shall expire (if not exercised or terminated at any earlier date) on the
earlier of (i) the tenth anniversary of grant and (ii) the day that is ninety
(90) days after the date of termination of the Nonemployee Director's service as
a director of the Corporation, unless such event is due to the death or total
and permanent disability of such Nonemployee Director, in which case such
options shall terminate twelve (12) months from the date of termination of the
Nonemployee Director's service as a director of the Corporation due to such
death or total and permanent disability.

IV. OPTIONS.
-------

4.1 Terms and Conditions. The Administrator may, in its sole
----------------------
discretion, from time to time grant Options to any officer, key employee or
Consultant of the Corporation or any one of its Subsidiaries. The grant of an
Option to an eligible officer, employee or Consultant shall be evidenced by a
written Option Agreement in substantially the form approved by the
Administrator. Such Option shall be subject to the following express terms and
conditions and to such other terms and conditions, not inconsistent with the
terms of this Plan, as the Administrator (or, in the case of a Named Executive
Officer, the Compensation Committee) may deem appropriate.

(a) Shares Covered. The Administrator shall, in its discretion,
---------------
determine the number of shares of Common Stock to be covered by the Options
granted to any Participant. The maximum number of shares of Common Stock with
respect to which Options may be granted to any Employee during any one calendar
year is 100,000 shares.

(b) Exercise Period. The term of each Option shall be for such
----------------
period as the Administrator shall determine (except as specifically provided in
Section 3.3 above), but for not more than ten years from the Date of Grant
thereof. The Administrator shall also have the discretion to determine when
each Option granted hereunder shall become exercisable, and to prescribe any
vesting schedule limiting the exercisability of such Options as it may deem
appropriate. The Administrator shall have the discretion to prescribe such
vesting schedules based on achievement of corporate or individual performance
targets as it may deem to be appropriate, in addition to vesting schedules based
upon periods of continued employment. If no other vesting schedule is specified
by the Administrator or provided pursuant to Section 3.3 above, a grant of
Options shall vest and become exercisable in five (5) equal annual installments,
with successive installments vesting, on the Date of Grant and the first four
anniversaries of the Date of Grant.

(c) Option Price. The Option Price payable for the shares of
-------------
Common Stock covered by any Option shall be determined by the Administrator but
shall in no event be less than the Fair Market Value of a share of Common Stock
on the Date of Grant (except as specifically provided in Section 3.3 above).

(d) Exercise of Options. A Participant may exercise his or her
---------------------
Options from time to time by written notice to the Corporation of his or her
intent to exercise the Options with respect to a specified number of shares.
The specified number of shares will be issued and transferred to the Participant
upon receipt by the Corporation of (i) such notice and (ii) payment in full for
such shares, and (iii) receipt of any payments required to satisfy the
Corporation's tax withholding obligations pursuant to Article V.

(e) Payment of Option Price Upon Exercise. Each Option Agreement
--------------------------------------
shall provide that the Option Price for the shares with respect to which an
Option is exercised shall be paid to the Corporation at the time of exercise.
This payment generally must be made in the form of cash. Alternatively, if the
Participant owns fewer than the lesser of either (i) 50,000 shares of the
Corporation's Common Stock, or (ii) one percent (1%) of the issued and
outstanding shares of Common Stock of the Corporation calculated as of the date
of exercise (the "Amount Held", and, for purposes of this paragraph, the
calculation of the Participant's Amount Held shall include all vested Options),
the Corporation may accept as payment of the Option Price:

(1) delivery of stock certificates for whole shares of Common Stock
already owned by the Participant for at least six months (at the time of
exercise), valued at their Fair Market Value on the business day immediately
preceding the date of exercise;

(2) delivery of a signed, irrevocable notice of exercise, accompanied
by payment in full of the Option Price by the Participant's stockbroker and an
irrevocable instruction to the Corporation to deliver the shares of Common Stock
issuable upon exercise of the Option promptly to the Participant's stockbroker
for the Participant's account;

(3) an instruction to withhold as payment of the Option Price a portion
of the shares of Common Stock issuable under the Option with a Fair Market Value
(valued as of the business day immediately preceding the date of exercise) equal
to the Option Price (provided that the amount paid in cash shall not be less
than the par value of the shares issuable upon such exercise); or

(4) any combination of the above methods equal to the total Option
Price for the shares;

provided that, the Corporation may refuse to accept any such alternative method
of payment of the Option Price to the extent it determines in good faith that
such method of exercise would violate the federal securities laws, including
Rule 16b-3, Section 402 of the Sarbanes-Oxley Act or rules regulating margin
loans.

4.2 Effect of Termination of Employment, Retirement, Disability or
-------------------------------------------------------------------
Death.
- ------

(a) If a Participant's employment (or other relationship, in the
case of a Consultant or Director) with the Corporation is involuntarily
terminated, or is terminated by the Participant without the Corporation's
express consent, for any reason other than retirement, disability or death, his
or her unvested Options shall terminate upon the date of the termination of
employment, unless the Administrator decides, in its sole discretion, to waive
this termination and causes the Participant's Option Agreement to provide for an
extended exercise period after such termination.

(b) Any Option Agreement may include such provisions as the
Administrator deems advisable with respect to the Participant's right to
exercise his or her vested Options subsequent to termination of employment,
provided that if the Participant's Option Agreement contains no other provision
on this point, the Participant's right to exercise the vested Options shall
terminate ninety (90) days after the date of termination of the Participant's
employment. No ISO shall be exercisable at any time more than ninety (90) days
after the date of termination of employment, except as provided in Section
4.2(c) or (d).

(c) Option Agreements may provide for an extended period of
continued exercisability following the Participant's retirement or other
termination with the consent of the Corporation, or subsequent to termination of
the Participant's employment by reason of total and permanent disability (within
the meaning of Section 22(e)(3) of the Code); provided, that, in no event shall
--------
any Option be exercisable after the fixed termination date set forth in the
Participant's Option Agreement pursuant to Section 4.1(b). No ISO shall be
exercisable at any time subsequent to the expiration of the period of ninety
(90) days from the date of termination of employment, or the period of twelve
(12) months from the date of termination of the Participant's employment (or
other relationship with the Corporation) by reason of total and permanent
disability, as the case may be. A termination of employment shall be considered
retirement if the Participant has reached normal retirement age under the
Corporation's retirement plan, or as otherwise mutually agreed by the
Participant and the Administrator.

(d) Any Option Agreement may, in the Administrator's sole
discretion, provide that, in the event the Participant dies while in the employ
of the Corporation (or while serving as an active Consultant), or while he or
she has the right to exercise his or her Options under the preceding Sections
4.2(b) or (c), the Options may be exercised (to the extent it had become
exercisable prior to the time of the Participant's death), during such period of
up to one year after date of the Participant's death as the Administrator deems
to be appropriate, by the personal representative of the Participant's estate,
or by the person or persons to whom the Options shall have been transferred by
will or by the laws of descent and distribution.

(e) For purposes of this Section 4.2, a Participant's employment
with the Corporation shall be considered to terminate on the last day for which
the Participant is paid through the Corporation's payroll, unless the
Administrator expressly determines that another date should be used as the date
of termination of employment. The Administrator shall determine the date of
termination of any Participant, based on its judgment as to when the Participant
is no longer employed as a common law employee or Consultant of the Corporation
or any Subsidiary. Part-time or non-exclusive employment by the Corporation may
be considered employment by the Corporation as long as the Participant is
treated as an Employee for purposes of FICA and payroll taxes, as shall
employment by a Subsidiary. In addition, the Administrator shall have full
discretion to determine whether a Participant's reduction in hours, medical or
disability leave, FMLA leave, absence on military or government service, or
other authorized leave of absence, shall constitute a termination of employment
for purposes of this Plan. Any such determination of the Administrator shall be
final and conclusive, unless overruled by the Board of Directors.

4.3 Designation of Options as Incentive Stock Options. The
-------------------------------------------------------
Administrator may, in its discretion, specify that any Options granted to a
Participant who is an employee of the Corporation or any Subsidiary shall be
ISOs qualifying under Code Section 422. Each Option Agreement which provides
for the grant of ISOs shall designate that such Options are intended to qualify
as ISOs. Each provision of the Plan and of each Option Agreement relating to an
Option designated as an ISO shall be construed so that such Option qualifies as
an ISO, and any provision that cannot be so construed shall be disregarded.
Options not otherwise designated shall be Nonstatutory Options.

Any Options granted under this Plan which are designated as ISOs shall
comply with the following additional requirements:

(a) The aggregate Fair Market Value (determined at the time an ISO
is granted) of the shares of Common Stock (together with all other stock of the
Corporation and all stock of any Subsidiary) with respect to which the ISOs may
first become exercisable by an individual Participant during any calendar year,
under all stock option plans of the Corporation (or any Subsidiaries) shall not
exceed $100,000. To the extent this limitation would otherwise be exceeded, the
Option shall be deemed to consist of an ISO for the maximum number of shares
which may be covered by ISOs pursuant to the preceding sentence, and a
Nonstatutory Option for the remaining shares subject to the Option.

(b) The Option Price payable upon the exercise of an ISO shall not
be less than the Fair Market Value of a share of Common Stock on the Date of
Grant; except as otherwise provided in Section 4.3(c) below.

(c) In the case of an ISO granted to a Participant who is a Ten
Percent Stockholder, the period of the Option shall not exceed five years from
the Date of Grant, and the Option Price shall not be less than 110 percent of
the Fair Market Value of Common Stock on the Date of Grant.

(d) The maximum term of any ISO shall be ten years, except that
the maximum term of any ISO granted to a Ten Percent Stockholder shall be five
years.

(e) No ISO granted under this Plan shall be assignable or
transferable by the Participant, except by will or by the laws of descent and
distribution. During the life of the Participant, any ISO shall be exercisable
only by the Participant.

(f) Any ISO granted under the Plan shall terminate no more than 90
days after termination of the Participant's employment as an Employee or one (1)
year after termination of the Participant's employment as an Employee or after
the date of any termination of employment by reason of the Participant's death
or disability.

(g) ISOs shall only be granted to Employees of the Company.

4.4 Authority toMake Adjustments. The Administrator may make such
------------------------------
adjustments to the terms of such Options as it may deem necessary or appropriate
in connection therewith, including amending the Option Agreement to recognize
that all or a portion of the Options no longer qualify as ISOs under Section
4.3.

4.5 Non-Assignability. Options granted under this Plan shall generally
-----------------
not be assignable or transferable by the Participant, except by will or by the
laws of descent and distribution, or as described in the next paragraph.

Notwithstanding the foregoing, the Administrator may, in its
discretion, permit a Participant to transfer all or a portion of his or her
Options to members of his or her immediate family, to trusts for the benefit of
members of his immediate family, or to family partnerships or limited liability
companies in which immediate family members are the only partners, provided that
the Participant may receive no consideration for such transfers, and that such
Options shall still be subject to termination in accordance with Section 4.2
above in the hands of the transferee.

4.6 Covenants Not to Compete. The Administrator may, in its
---------------------------
discretion, condition any Option granted to an Employee, Consultant or director
on such Participant's agreement to enter into such covenant not to compete with
the Corporation as the Administrator may deem to be desirable. Such covenant
not to compete shall be set forth in the Participant's Option Agreement, and the
Option Agreement shall provide that the Option shall be forfeited immediately,
whether otherwise vested or not, if the Administrator determines that the
Participant has violated his or her covenant not to compete. In addition, in
the Administrator's discretion, the Participant's Option Agreement may also
provide that if the Participant breaches his or her covenant not to compete, the
Corporation shall have the right to repurchase any shares of Common Stock
previously issued to the Participant pursuant to an exercise of the Option, at a
repurchase price equal to the Option Price paid by the Participant.

V. TAX WITHHOLDING.
----------------

5.1 Withholding Taxes. The Corporation shall have the right to
------------------
require Participants who are employees to remit to the Corporation an amount
sufficient to satisfy any federal, state and local withholding tax requirements
prior to the delivery of any shares of Common Stock under the Plan. If a
Participant sells, transfers, assigns or otherwise disposes of shares of Common
Stock acquired upon the exercise of an ISO within two (2) years after the date
on which the ISO was granted or within one (1) year after the receipt of the
shares of Common Stock by the Participant, the Participant shall promptly notify
the Corporation of such disposition and the Corporation shall have the right to
require the Participant to remit to the Corporation the amount necessary to
satisfy any federal, state and local tax withholding requirements imposed on the
Corporation by reason of such disposition.

5.2 Methods of Withholding. Amounts which the Corporation is entitled
-----------------------
to withhold pursuant to Section 5.1, may, at the election of the Participant and
with the approval of the Administrator, be (i) paid in cash by the Participant,
(ii) withheld from the Participant's salary or other compensation payable by the
Corporation, or (iii) withheld in the form of shares of Common Stock otherwise
issuable to the Participant upon exercise of an Option that have a Fair Market
Value on the date on which the amount of tax to be withheld is determined (the
"Tax Date") not less than the minimum amount of tax the Corporation is required
to withhold, or (iv) paid by means of the Participant's delivery to the
Corporation of shares of Common Stock already held by the Participant that have
a Fair Market Value on the Tax Date not greater than the minimum amount of tax
the Corporation is required to withhold, or (v) in any other form mutually
satisfactory to the Administrator and the Participant, provided that any such
method of satisfying the Participant's obligation does not violate any federal
or state law, including Section 402 of the Sarbanes-Oxley Act. A Participant's
election to have shares of Common Stock withheld that are otherwise issuable
shall be in writing, shall be irrevocable upon approval by the Administrator,
and shall be delivered to the Corporation prior to the Tax Date with respect to
the exercise of an Option.

VI. AGGREGATE LIMITATION ON SHARES OF COMMON STOCK.
----------------------------------------------------

6.1 Number of Shares of Common Stock. Shares of Common Stock which may
--------------------------------
be issued pursuant to Options granted under the Plan may be either authorized
and unissued shares of Common Stock or of Common Stock held by the Corporation
as treasury stock. The number of shares of Common Stock which may be issued
under this Plan shall not exceed a total of 5,000,000 shares of Common Stock,
subject to such adjustments as may be made pursuant to Section 6.2. Further,
the Options granted to all Participants during a single calendar year shall be
limited so that such Options shall in no event cover more than a maximum of
500,000 shares of Common Stock (subject to such adjustments as may be made
pursuant to Section 6.2).

For purposes of this Section 6.1, upon the exercise of an Option, the
number of shares of Common Stock available for future issuance under the Plan
shall be reduced by the number of shares actually issued to the Participant,
exclusive of any shares withheld for payment of taxes.

Any shares of Common Stock subject to an Option which for any reason
is cancelled, terminates unexercised or expires shall again be available for
issuance under the Plan.

6.2 Adjustments of Stock. The Administrator shall proportionately
----------------------
adjust the number of shares of Common Stock which may be issued under this Plan,
the number of shares of Common Stock subject to Options theretofore granted
under this Plan and the Option Price of such Options, in the event of any change
or changes in the outstanding Common Stock of the Corporation by reason of any
stock dividend, recapitalization, reorganization, merger, consolidation,
split-up, combination or any similar transaction, and make any and all other
adjustments deemed appropriate by the Administrator to prevent substantial
dilution or enlargement of the rights granted to any Participant.

New option rights may be substituted for the Options granted under the
Plan, or the Corporation's duties as to Options outstanding under the Plan may
be assumed by another corporation or by a parent or subsidiary (within the
meaning of Section 425 of the Code) of such other corporation, in connection
with any merger, consolidation, acquisition, separation, reorganization,
liquidation or like occurrence in which the Corporation is involved. In the
event of such substitution or assumption, the term Common Stock shall thereafter
include the stock of the corporation granting such new option rights or assuming
the Corporation's duties as to such Option.

6.3 Dissolution or Merger. Upon dissolution or liquidation of the
------------------------
Corporation, or upon a merger or consolidation in which the Corporation is not
the surviving corporation, all Options outstanding under the Plan shall
terminate; provided, however, that each Participant (and each other person
entitled under this Plan to exercise an Option) shall have the right,
immediately prior to such dissolution or liquidation, or such merger or
consolidation, to exercise such Participant's Options in whole or in part, but
only to the extent that such Options are otherwise exercisable under the terms
of the Plan.

VII. MISCELLANEOUS.
-------------

7.1 General Restriction. Any Option granted under this Plan shall be
--------------------
subject to the requirement that, if at any time the Board of Directors shall
determine that any registration of the shares of Common Stock, or any consent or
approval of any governmental body, or any other agreement or consent, is
necessary as a condition of the granting of an Option, or the issuance of Common
Stock in satisfaction thereof, such Option or Common Stock will not be issued or
delivered until such requirement is satisfied in a manner acceptable to the
Administrator.

7.2 Investment Representation. If the Administrator determines that a
--------------------------
written representation is necessary in order to secure an exemption from
registration under the Securities Act of 1933, the Administrator may demand that
the Participant deliver to the Corporation at the time of any exercise of any
Option, any written representation that Administrator determines to be necessary
or appropriate for such purpose, including but not limited to a representation
that the shares to be issued are to be acquired for investment and not for
resale or with a view to the distribution thereof. If the Administrator makes
such a demand, delivery of a written representation satisfactory to the
Administrator shall be a condition precedent to the right of the Participant to
acquire such shares of Common Stock.

7.3 No Right to Employment. Nothing in this Plan or in any agreement
------------------------
entered into pursuant to it shall confer upon any participating employee the
right to continue in the employment of the Corporation or affect any right which
the Corporation may have to terminate the employment of such participating
employee.

7.4 Non-Uniform Determinations. The Administrator's determinations
---------------------------
under this Plan (including, without limitation, its determinations of the
persons to receive Options, the form, amount and timing of such awards and the
terms and provisions of such awards) need not be uniform and may be made by it
selectively among Participants who receive, or are eligible to receive, awards
under this Plan, whether or not such Participants are similarly situated.

7.5 No Rights as Stockholders. Participants granted Options under this
-------------------------
Plan shall have no rights as stockholders of the Corporation as applicable with
respect thereto unless and until certificates for shares of Common Stock are
issued to them.

7.6 Transfer Restrictions. The Administrator's may determine that any
----------------------
Common Stock to be issued by the Corporation upon the exercise of Options shall
be subject to such further restrictions upon transfer as the Administrator
determines to be appropriate.

7.7 Fractional Shares. The Corporation shall not be required to issue
------------------
any fractional Common Shares pursuant to this Plan. The Administrator may
provide for the elimination of fractions or for the settlement thereof in cash.

VIII. ADMINISTRATION.
--------------

(a) The Plan shall be administered by the Board of Directors
unless the Board has delegated its authority to a Committee consisting of such
members as may be appointed by the Board of Directors from time to time.
Notwithstanding the preceding sentence, the Board of Directors may delegate its
authority with respect to Named Executive Officers only to the Compensation
Committee. With respect to other Participants, the members of the Committee
need not be members of the Board of Directors, and shall serve at the pleasure
of the Board of Directors.

(b) Except as provided in Section 3.2, the Committee shall have
the authority, in its sole discretion, from time to time: (i) to grant Options,
to officers, key employees, and Consultants of the Company, as provided for in
this Plan; (ii) to prescribe such limitations, restrictions and conditions upon
any such awards as the Committee shall deem appropriate; (iii) to determine the
periods during which Options may be exercised as it may deem appropriate; (iv)
to modify, cancel, or replace any prior Options and to amend the relevant Option
Agreements with the consent of the affected Participants, including amending
such agreements to amend vesting schedules, extend exercise periods or increase
or decrease the Option Price for Options, as it may deem to be necessary; and
(v) to interpret the Plan, to adopt, amend and rescind rules and regulations
relating to the Plan, and to make all other determinations and to take all other
action necessary or advisable for the imple-mentation and administration of the
Plan. With respect to any Named Executive Officer, this authority shall be
transferred to the Compensation Committee, or may be exercised by the Board of
Directors subject to the condition that the express approval of the Compensation
Committee must be obtained.

(c) All actions taken by the Board of Directors or Committee shall
be final, conclusive and binding upon any eligible employee. No member of the
Board of Directors or Committee shall be liable for any action taken or decision
made in good faith relating to the Plan or any award thereunder.

(d) Each member of the Committee shall be entitled, in good faith,
to rely or act upon any report or other information furnished to him or her by
any officer or other employee of the Corporation or any Subsidiary, the
Corporation's independent certified public accountants, or any executive
compensation consultant, counsel, or other professional retained by the
Corporation to assist in the administration of the Plan. No member of the Board
of Directors or the Committee shall be liable for any action or determination
made by him or her in good faith.

IX. AMENDMENT AND TERMINATION.
---------------------------

9.1 Amendment or Termination of the Plan. The Board of Directors may
--------------------------------------
at any time terminate this Plan or any part thereof and may from time to time
amend this Plan as it may deem advisable; provided, however the Board of
Directors shall obtain stockholder approval of any amendment for which
stockholder approval is required under Section 422 of the Code, or the
stockholder approval requirements imposed on the Corporation by the listing
rules of any stock exchange on which the Common Stock is listed. The
termination or amendment of this Plan shall not, without the consent of the
Participant, affect such Participant's rights under an award previously granted.

9.2 Term of Plan. Unless previously terminated pursuant to Section
--------------
9.1, the Plan shall terminate on the tenth anniversary of the Plan's original
effective date, and no Options may be granted on or after such date.

Appendix B

CERTIFICATE OF AMENDMENT
TO
THIRD AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
N-VIRO INTERNATIONAL CORPORATION

(a Delaware corporation)

N-Viro International Corporation, a Delaware corporation (the
"Corporation"), does hereby certify:

First: The original name of the Corporation is N-Viro International
Corporation.

Second: The date on which the Corporation's original Certificate of
Incorporation was filed with the Delaware Secretary of State is April 29, 1993.

Third: The Board of Directors of the Corporation, acting in accordance
with Sections 141(f) and 242 of the General Corporation Law of the State of
Delaware, adopted resolutions to amend the first paragraph of ARTICLE FOUR of
the Third Amended and Restated Certificate of Incorporation of the Corporation
to read in its entirety as follows:

The total number of all classes of stock which the Corporation shall have
authority to issue is thirty-seven million (37,000,000) shares, of which two
million (2,000,000) shares, designated as Preferred Stock, shall have a par
value of One Cent ($.01) per share (the "Preferred Stock"), and thirty-five
million (35,000,000) shares, designated as Common Stock, shall have a par value
of One Cent ($.01) per share (the "Common Stock").

Fourth: Thereafter pursuant to a resolution of the Board of Directors this
Certificate of Amendment was submitted to the stockholders of the Corporation
for their approval, and was duly adopted in accordance with the provisions of
Section 242 of the General Corporation Law of the State of Delaware.

Fifth: All other provisions of the Third Amended and Restated Certificate
of Incorporation shall remain in full force and effect.

I, James K. McHugh, being the Chief Financial Officer, Secretary and
Treasurer of the Corporation, do hereby declare and certify that the foregoing
Amendment to Third Amended and Restated Certificate of Incorporation was duly
adopted in accordance with DGCL Sections 103, 242 and 245, at the Annual Meeting
of Stockholders of the Corporation held on , 2010, and I further state
---------
that the execution of the Amendment to Third Amended and Restated Certificate of
Incorporation is my own act and deed and that the facts herein stated are true,
and accordingly I have hereunto set my hand this day of ,
---- --------------
2010.

By: _________________________________________
James K. McHugh, Chief Financial Officer,
Secretary and Treasurer

Appendix C

[N-Viro International Corporation logo]
c/o Corporate Election Services
P. O. Box 1150
Pittsburgh, PA 15230

- --------------------------------------------------------------------------------
VOTE BY TELEPHONE
- --------------------------------------------------------------------------------
Have your proxy card available when you call Toll-Free 1-888-693-8683 using a
touch-tone phone and follow the simple instructions to record your vote.

- --------------------------------------------------------------------------------
VOTE BY INTERNET
- --------------------------------------------------------------------------------
Have your proxy card available when you access the website www.cesvote.com and
follow the simple instructions to record your vote.

- --------------------------------------------------------------------------------
VOTE BY MAIL
- --------------------------------------------------------------------------------
Please mark, sign and date your proxy card and return it in the postage-paid
envelope provided or return it to: Corporate Election Services, P.O. Box 1150,
Pittsburgh PA 15230-1150.

Vote by Telephone Vote by Internet Vote by Mail
----------------------- ---------------------- -------------------
Call Toll-Free using a Access the Website and Return your proxy
touch-tone telephone: cast your vote: in the postage-paid
1-888-693-8683 www.cesvote.com envelope provided

Vote 24 hours a day, 7 days a week!
If you vote by telephone or internet, please do not send your proxy by mail.

[Graphic Omitted]

Proxy card must be signed and dated below.
Please fold and detach card at perforation before mailing.
- --------------------------------------------------------------------------------

[N-Viro International Corporation logo]

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL
MEETING OF STOCKHOLDERS TO BE HELD ON JULY 22, 2010.

Revoking all prior proxies, the undersigned, a stockholder of N-VIRO
INTERNATIONAL CORPORATION (the "Company"), hereby appoints Timothy R. Kasmoch
and James K. McHugh, and each of them, attorneys and agents of the undersigned,
with full power of substitution to vote all shares of the Common Stock, par
value $.01 per share (the "Common Stock"), of the undersigned in the Company at
the Annual Meeting of Stockholders of the Company to be held at Brandywine
Country Club, 6904 Salisbury Road, Maumee, Ohio, 43537, on July 22, 2010 at
10:30 a.m., local time, and at any adjournment thereof, as fully and effectively
as the undersigned could do if personally present and voting, hereby approving,
ratifying and confirming all that said attorneys and agents or their substitutes
may lawfully do in place of the undersigned as indicated on the reverse. In
their discretion, the proxies are authorized to vote upon any other matters
which may properly come before the meeting or any adjournment thereof.
Dated: , 2010
------------------

- --------------------------
Signature

Please sign exactly as your name appears to the left. When shares are held by
joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in the full corporation name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.

PROXY CARD MUST BE SIGNED AND DATED BELOW.
PLEASE FOLD AND DETACH CARD AT PERFORATION BEFORE MAILING.
- --------------------------------------------------------------------------------

N-VIRO INTERNATIONAL CORPORATION PROXY

THIS PROXY WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED. IF NO DIRECTIONS
ARE INDICATED, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE LISTED NOMINEES
AS CLASS II DIRECTORS AND FOR PROPOSALS 2 THROUGH 4.

1. To elect three Class II directors to serve for a term of two years and
until their successors are elected and qualified:

Nominees:
1. James H. Hartung FOR AGAINST ABSTAIN
2. Timothy R. Kasmoch FOR AGAINST ABSTAIN
3. Thomas L. Kovacik FOR AGAINST ABSTAIN

2. To approve the creation of the N-Viro International Corporation 2010
Stock Option Plan.

FOR AGAINST ABSTAIN

3. To approve an amendment to our Third Amended and Restated Certificate of
Incorporation to increase the authorized shares of Common Stock.

FOR AGAINST ABSTAIN

4. To ratify the appointment of UHY LLP as independent auditors for the
Company for 2010.

FOR AGAINST ABSTAIN

5. To transact such other business as may properly come before the meeting
or any adjournment or postponement thereof.

____ PLEASE CHECK HERE IF YOU PLAN TO ATTEND THE ANNUAL MEETING

Continued and to be signed and dated on the reverse side.