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As filed with the Securities and Exchange Commission on November 10, 1999
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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COMMODORE APPLIED TECHNOLOGIES, INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 11-3312952
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
150 EAST 58TH STREET, SUITE 3400
NEW YORK, NEW YORK 10155
(Address of Principal Executive Offices) (Zip Code)
COMMODORE APPLIED TECHNOLOGIES, INC. 1998 STOCK OPTION PLAN
(Full Title of the Plan)
PAUL E. HANNESSON
CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER
COMMODORE APPLIED TECHNOLOGIES, INC.
150 EAST 58TH STREET, SUITE 3400
NEW YORK, NEW YORK 10155
(Name and Address of Agent For Service)
(212) 308-5800
(Telephone Number, Including Area Code, of Agent For Service)
Copies to:
STEPHEN A. WEISS, ESQ.
ANTHONY J. MARSICO, ESQ.
GREENBERG TRAURIG
200 PARK AVENUE
NEW YORK, NEW YORK 10166
TEL: (212) 801-9200
FAX: (212) 801-6400
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CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Amount maximum maximum Amount of
Title of to be offering price aggregate registration
securities to be registered registered(1) per share offering price fee
- ------------------------------------------ --------------------- --------------------- ----------------------- --------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.001 per share 1,000,000 shares(2) $.9375 (3) $ 937,500 $ 260.63 (2)
========================================== ===================== ===================== ======================= ====================
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(1) Pursuant to Rule 416 under the Securities Act of 1933, as amended (the
"Securities Act"), the number of shares of common stock, par value
$0.001 per share (the "Common Stock"), of Commodore Applied
Technologies, Inc. (the "Company") being registered shall be adjusted
to include any additional shares which may become issuable as a result
of stock splits, stock dividends, or similar transactions.
(2) On December 5, 1997, the Company filed a Registration Statement on Form
S-8 (Registration No. 333-41643) (the "Prior Registration Statement")
covering 4,000,000 shares of Common Stock underlying options granted
and available to be granted under the Company's 1996 Stock Option Plan
(the "1996 Plan"). A registration fee of $6,002.40 was paid in
connection with the Prior Registration Statement. In December 1998, the
Company terminated the 1996 Plan, and all of the options granted
thereunder were subsequently surrendered to the Company for
cancellation. At the time of such cancellation, none of the 4,000,000
shares of Common Stock covered by the Prior Registration Statement had
been issued by the Company. On December 15, 1998, the Company's Board
of Directors adopted the Commodore Applied Technologies, Inc. 1998
Stock Option Plan (the "1998 Plan"), under which options to purchase an
aggregate of 5,000,000 shares of Common Stock may be granted. Pursuant
to General Instruction E to Form S-8, this Registration Statement
constitutes (i) Post-Effective Amendment No. 1 to the Prior
Registration Statement, and (ii) a new Registration Statement relating
to an aggregate of 5,000,000 shares of Common Stock underlying options
granted and available to be granted under the 1998 Plan, consisting of
(a) 4,000,000 shares of Common Stock previously registered under the
Prior Registration Statement, which are being carried forward hereby,
and (b) 1,000,000 shares of Common Stock being registered hereby. The
$260.63 registration fee paid in connection with this Registration
Statement relates to the 1,000,000 shares of Common Stock being
registered hereby.
(3) Computed in accordance with Rule 457(c) under the Securities Act solely
for the purpose of calculating the total registration fee. Based on the
average of the high and low prices (rounded to the nearest cent) of the
Common Stock as reported on the American Stock Exchange on November 8,
1999.
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EXPLANATORY NOTE
The documents containing the information specified in Part I of Form
S-8 will be sent or given to participating employees as specified by Rule
428(b)(1) of the Securities Act of 1933, as amended (the "Securities Act"). Such
documents are not required to be and are not filed with the Securities and
Exchange Commission (the "Commission") either as part of this registration
statement on Form S-8 (the "Registration Statement"), or as a prospectus or
prospectus supplement pursuant to Rule 424. These documents and the documents
incorporated by reference into this Registration Statement pursuant to Item 3 of
Part II of this Registration Statement, taken together, constitute a prospectus
that meets the requirements of Section 10(a) of the Securities Act.
The following reoffer prospectus filed as part of the Registration
Statement has been prepared in accordance with the requirements of Part I of
Form S-3 and, pursuant to General Instruction C of Form S-8, may be used by
certain officers, directors and controlling stockholders of the Company for the
reoffer and resale to the public of shares of Common Stock to be issued to them
upon exercise of options heretofore or hereafter granted under the Commodore
Applied Technologies, Inc. 1998 Stock Option Plan (the "Plan"). Such persons may
be deemed to be "affiliates" of the Company within the meaning of the Securities
Act and the rules and regulations of the Commission promulgated thereunder, and
such shares may be deemed to be "control securities" within the meaning of
General Instruction C to Form S-8.
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PROSPECTUS
1,584,750 SHARES
COMMODORE APPLIED TECHNOLOGIES, INC.
COMMON STOCK
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The persons named in this prospectus as "selling stockholders" may offer and
sell for their own accounts up to an aggregate of 1,584,750 shares of our common
stock. The selling stockholders will acquire these shares when they exercise
stock options granted to them under our 1998 Stock Option Plan. The selling
stockholders have not informed us that they currently intend to sell any of
these shares.
The selling stockholders may sell the shares from time to time in transactions
occurring either on or off the American Stock Exchange, at prevailing market
prices or at negotiated prices. Sales may be made through brokers or to dealers,
who are expected to receive commissions or discounts (which may be in excess of
customary commissions or discounts). The selling stockholders and participating
brokers and dealers may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, as amended, in which event any profit on the sale of the
shares by those selling stockholders and any discounts or commissions received
by those brokers or dealers may be deemed to be underwriting compensation under
the Securities Act.
Our company is an environmental treatment and services company that offers a
range of services and technologies directed principally at remediating
contamination in soils, liquids and other materials and at disposing of or
reusing certain waste by-products. If our pending merger with Global Energy
Investors, Inc. is completed, we will be involved in the purchase and operation
of electric power plants in emerging foreign markets.
We will not receive any proceeds from sales of the shares by the selling
stockholders, but will receive proceeds from the exercise of stock options by
the selling stockholders. We will pay all expenses incurred to register the
shares, which are estimated to be approximately $47,500, but all brokerage
commissions and other expenses incurred by individual selling stockholders will
be paid by them.
Our common stock is traded on the American Stock Exchange under the symbol
"CXI". On November 8, 1999, the closing sale price of the common stock on the
American Stock Exchange was $.9375 per share.
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INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. PLEASE
SEE THE "RISK FACTORS" SECTION BEGINNING ON PAGE 4 OF THIS PROSPECTUS FOR A
DISCUSSION OF CERTAIN FACTORS YOU SHOULD CONSIDER BEFORE INVESTING IN OUR COMMON
STOCK.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
----------------------
The date of this prospectus is November 10, 1999.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and
other information with the Securities and Exchange Commission (the "SEC") that
are required to be filed under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). You may read and copy such reports, proxy statements and
other information at the SEC's public reference rooms located at 450 Fifth
Street, N.W., Washington, D.C. 20549, at Seven World Trade Center, Suite 1300,
New York, New York 10048, and at Northwest Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511. Please call the SEC at
1-800-SEC-0330 for further information on the public reference rooms. Our SEC
filings are also available to the public from the SEC's internet site on the
World Wide Web at http://www.sec.gov. Copies of these reports, proxy statements
and other information also can be inspected at the offices of the American Stock
Exchange, 86 Trinity Place, New York, New York 10006.
We have filed a registration statement on Form S-8 with the SEC with
respect to the shares. This prospectus constitutes a part of that registration
statement. As allowed by SEC rules, this prospectus does not contain all of the
information you can find in the registration statement and its exhibits. In
addition, there may have been changes in the facts set forth in this prospectus
since the date it was filed. For further information about us and our common
stock, you should consult the registration statement and its exhibits.
Statements in this prospectus regarding the contents of any documents are not
necessarily complete, and each statement is qualified in its entirety by
reference to the copy of the document on file with the SEC. You may inspect and
obtain copies of the registration statement and any of its amendments, including
exhibits filed as a part of the registration statement or an amendment to the
registration statement, through the entities listed above.
The SEC allows us to "incorporate by reference" certain information we
file with the SEC, which means that we can disclose important information to you
by referring you to another document filed separately with the SEC. Information
contained in a previously filed document that we incorporate by reference is
considered to be a part of this prospectus, except for any information
superseded by information in this prospectus. Information that we file with the
SEC after the date of this prospectus will automatically update and supersede
the information contained or incorporated by reference in this prospectus.
The following documents we filed with the SEC pursuant to the Exchange
Act (File No. 1-11871), as well as any future filings under Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act made prior to the termination of the
offering, are incorporated by reference:
(a) our Annual Report on Form 10-K for the year ended December 31,
1998, including the exhibits thereto;
(b) our Quarterly Reports on Form 10-Q for the fiscal quarters ended
March 31, June 30 and September 30, 1999;
(c) our Current Report on Form 8-K dated December 25, 1998, and
Amendment No. 1 on Form 8-K/A thereto filed with the SEC on March 9, 1999;
(d) our Current Reports on Form 8-K dated April 21, 1999, August 17,
1999 and October 1, 1999; and
(e) the description of our common stock contained in our registration
statement on Form 8-A, dated June 24, 1996, as amended by our registration
statement on Form 8-A/A, dated June 26, 1996, filed under Section 12(b) of the
Exchange Act, including any amendment or report filed for the purpose of
updating such information.
We will provide without charge to each person, including any beneficial
owner, to whom a copy of this prospectus is delivered a copy of any or all
documents incorporated by reference into this prospectus except the exhibits to
such documents (unless such exhibits are specifically incorporated by reference
in such documents). Requests for copies can be made by writing or telephoning us
at our principal executive office at 150 East 58th Street, Suite 3400, New York,
New York 10155, Attention: General Counsel; telephone number (212) 308-5800.
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CERTAIN DEFINITIONS AND TRADEMARK
Unless otherwise stated or where the context otherwise requires,
references in this prospectus to "we," "our" or the "company" refer to Commodore
Applied Technologies, Inc. and its direct and indirect subsidiaries. SET(TM) is
our trademark.
FORWARD-LOOKING STATEMENTS
This prospectus includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act
based on our current expectations and projections about future events. These
forward-looking statements are subject to a number of risks and uncertainties
which could cause our actual results to differ materially from historical
results or those anticipated. Certain of those risks and uncertainties are
beyond our control. The words "believe," "expect," "anticipate" and similar
expressions identify forward-looking statements. We undertake no obligation to
publicly update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise. New risk factors emerge from time
to time and it is not possible for us to predict all such risk factors, nor can
we assess the impact of all such risk factors on our business or the extent to
which any factor, or combination of factors, may cause actual results to differ
materially from those forecast in any forward-looking statements. Given these
risks and uncertainties, investors should not place undue reliance on
forward-looking statements as a prediction of actual results. See "Risk
Factors--Forward-Looking Statements and Associated Risks."
THE COMPANY
We are an environmental treatment and services company that provides a
range of services related to remediating contamination in soils, liquids and
other materials and disposing of or reusing certain waste by-products. Our
environmental services business, which accounts for substantially all of our
current revenues, offers a full range of services related to environmental
management for on-site and off-site identification, investigation, remediation
and management of hazardous, mixed and radioactive wastes, as well as waste
remediation services through the use of our proprietary technology, known as SET
(solvated electron technology). We believe that SET is the only patented,
non-thermal, portable and scalable process that is currently available for
treating and decontaminating soils, liquids and other materials containing PCBs,
pesticides, dioxins, chemical weapons and warfare agents and other toxic
contaminants.
Demand for our environmental technology and services is anticipated to
arise principally from two sources:
o the need for alternative environmental treatment and disposal
methods for toxic substances (such as the SET technology),
which involve limited safety risks with respect to air
pollution and transportation of hazardous materials and do not
result in large volumes of residual waste that require further
treatment prior to disposal; and
o stricter legislation and regulations mandating new or
increased levels of air and water pollution control and solid
waste management.
Our business strategy is to expand our environmental services business
and commercialize our SET technology. We plan to execute this strategy by:
o strengthening our relationships with our present industrial
and government-sector customers, particularly the Department
of Energy and Department of Defense, by continuing to provide
high-quality environmental management and consulting services;
o focusing our marketing efforts with respect to the SET
technology on selected niche markets within certain strategic
environmental market segments, such as government mixed waste
remediation and chemical weapons demilitarization, where we
believe SET offers the greatest immediate value and meets
pressing customer needs; and
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o establishing additional collaborative joint working and
marketing arrangements with established engineering and
environmental service organizations to pursue commercial
opportunities in the public and private sector.
On April 21, 1999, the company, executed a definitive agreement (the
"Prior Agreement") to initially acquire a 50% interest in Global Energy
Investors, LLC.. ("Global") with the company to have the ability to acquire the
remainder of Global upon the occurrence of certain conditions. The Prior
Agreement was later ratified by the company's board of directors on May 4, 1999,
and was the subject of the company's Current Report on Form 8-K filed on May 19,
1999.
Under the Prior Agreement, the company undertook to raise $10 million
in new working capital by August 31, 1999, but was not able to complete a
financing prior to such date. As a consequence, the company and Global agreed to
allow the Prior Agreement to lapse and began discussions on a new agreement for
a transaction that, if consummated, would permit the company to acquire Global.
On October 1, 1999, the company, Global Energy Investors, Inc., a
successor to Global ("GEI"), each of the stockholders of GEI and Commodore
Global Energy, Inc., a wholly-owned subsidiary of the company formed (or to be
formed) for purposes of this transaction ("CGE"), executed a definitive
Agreement and Plan of Merger (the "New Agreement"). Pursuant to the New
Agreement, subject to the satisfaction of several conditions, GEI would merge
with and into CGE, with CGE to survive the merger (the "Merger"). In exchange
for their shares of stock in GEI, the stockholders of GEI would receive an
aggregate of 12,500,000 newly issued shares of the company's common stock, par
value $0.001 per share (the "common stock") under the following conditions:
9,000,000 of such shares of common stock would be issued to the GEI stockholders
upon the effective time of the Merger; the remaining 3,500,000 shares (the
"Escrowed Shares") would be held in escrow and released to the GEI stockholders
only if, during the two year period following the effective time of the Merger
(the "Appreciation Period"), the common stock were to trade at or above $3.00
per share for not less than twenty (20) consecutive trading days (the
"Triggering Event"). If the Triggering Event does not occur during the
Appreciation Period, the Escrowed Shares of common stock would be returned to
the company and cancelled. Additionally, the Merger Agreement was amended on
October 25, 1999 ("First Amendment") resulting in an extension of the Merger
Agreement as long as the company continues to pay to GEI $30,000 per month as
compensation for GEI's business development services to the company. The company
has previously paid GEI for such services at such monthly rate since April 1999.
GEI's business involves identifying existing and potential power plants
in emerging market countries for ownership and operation. Additionally, GEI also
has plans to focus on the acquisition and operation of nuclear power plants in
the United States. GEI's principal officers include Robert C. McFarlane, the
former National Security Advisor to President Ronald Reagan, and Robert Traylor,
a 40-year veteran in the nuclear industry.
The Merger is contingent upon, among other things, approval of the
boards of directors of the company and GEI, the approval of the Merger by the
company's stockholders and the successful completion of a financing by the
company, the net proceeds of which are not less than $5,000,000.
Following the Merger, the company expects to elect Mr. McFarlane, as
Chairman of the Board and Chief Executive Officer of the company and Messrs.
Traylor and Paul E. Hannesson, as Vice Chairmen of the company. Mr. Hannesson
will remain President of the company.
We are incorporated under the laws of the State of Delaware. Our
principal executive offices are located at 150 East 58th Street, Suite 3400, New
York, New York 10155, and our telephone number at that address is (212)
308-5800.
RISK FACTORS
You should carefully consider the risks described below before deciding
to invest in our common stock. The risks and uncertainties we describe below are
not the only ones that we face. Additional risks and uncertainties that we do
not presently know about or that we currently believe are immaterial may also
impair our business operations. If any of the possible events described below
actually occurred, our business, financial condition or results of
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operations could be materially adversely affected. If that happened, the trading
price of our common stock could decline, and you could lose all or part of your
investment.
WE HAVE A HISTORY OF LOSSES FROM OPERATIONS AND WE EXPECT TO INCUR LOSSES
IN THE FUTURE
We have experienced significant operating losses since our inception.
We had net losses of $5,643,000 during 1996, $15,694,000 during 1997, $
5,535,000 during 1998 and $ 1,406,000 during the six months ended June 30, 1999.
Our losses have resulted from a combination of:
o significant investments in our research and development activities;
o large expenditures for infrastructure to support our anticipated future
growth;
o significant costs associated with our commercialization activities;
o lack of meaningful revenues due to significant delays in our obtaining
material project contracts from potential governmental and
private-sector customers; and
o general and administrative expenses.
Until we are able to begin one or more large projects for our SET technology,
which we have been unable to obtain to date, or until such time as other
projects are begun, if ever, we will continue to experience losses. We expect to
incur operating losses in the future due primarily to:
o continuing expenditures for our product development and
commercialization activities;
o investments in complementary products and technologies; and
o costs associated with expansion of our environmental management
services business.
As a result of these losses, as of June 30, 1999, we had an accumulated
deficit of approximately $36,851,000. In addition, we have had to significantly
curtail our business operations and lay off a significant number of our
employees in an attempt to control such losses. However, even though we have
taken such steps, there can be no assurance that we will be able to operate
profitably during the remainder of 1999, or in the future.
OUR SET TECHNOLOGY HAS NOT BEEN PROVEN TO BE EFFECTIVE ON A LARGE-SCALE
COMMERCIAL BASIS
Our SET technology has never been utilized on a large-scale basis.
There can be no assurance that this technology will perform successfully on a
large-scale commercial basis or that it will be profitable. We have never tested
SET under the conditions and in the volumes that will be required to be
profitable, and we cannot predict all of the difficulties that may arise. In
addition, not all of the results of the tests we conducted on SET have been
verified by an independent testing laboratory. Thus, it is possible that this
technology may require further research, development, design and testing, as
well as regulatory clearances, before it can be commercialized on a large scale.
Additionally, our ability to operate our business successfully will depend on a
variety of factors, many of which are beyond our control, including:
o competition from companies with greater financial and other resources
than we have;
o cost and availability of supplies that we use;
o changes in governmental initiatives and requirements that affect our
technologies and services;
o changes in regulatory requirements that apply to our business; and
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o costs associated with equipment repair and maintenance.
WE MAY NOT BE ABLE TO OBTAIN ANY COLLABORATIVE AGREEMENTS, LICENSES OR PROJECT
CONTRACTS
Our business is largely dependent on entering into collaborative joint
working arrangements with established engineering and environmental companies,
or entering into joint venture agreements involving the application of our
technologies. To date, only one of our operating subsidiaries and its
collaborative joint working partners have been awarded material project
contracts. There can be no assurance that we will be able to enter into any
other definitive joint project arrangements or joint venture collaborative
agreements. Even if we are able to enter into such arrangements or agreements,
there can be no assurance that they will be on terms and conditions that are
sufficiently beneficial to us, or that they will enable us to generate profits.
If we are not able to enter into commercially attractive collaborative working
arrangements in the future, we may have to license our technologies to third
parties that are not affiliated with us. There also can be no assurance that we
will be able to enter into such license arrangements or, if we do, that such
arrangements will produce any income to us. In addition, our existing project
contracts, and any project contract that may be awarded to us and/or any of our
joint working partners in the future, may be curtailed, delayed, redirected or
terminated at any time. Problems or delays that we experience on any specific
project could materially adversely affect our business and financial condition.
MARKET ACCEPTANCE OF OUR TECHNOLOGY AND SERVICES STILL REMAINS UNCERTAIN
Many potential users of our SET technology have already invested
substantial funds in other forms of environmental remediation technology,
including (i) incineration, (ii) plasma arc, (iii) vitrification, (iv) molten
metal, (v) molten salt, (vi) chemical neutralization, (vii) catalytic
electrochemical oxidation and (viii) supercritical wet oxidation. Our growth and
future financial performance will depend on our ability to demonstrate to
prospective partners and customers the advantages of our environmental
technology over other technologies. There can be no assurance that we will be
successful in this effort. Furthermore, it is possible that competing
technologies may be perceived to have, or may actually have, certain advantages
over our technology for certain industries or applications.
WE MAY NOT BE ABLE TO COMPETE SUCCESSFULLY IN THE ENVIRONMENTAL SERVICES
INDUSTRY
Competition in the environmental services industry is intense. The
industry is dominated by large companies such as Bechtel, Westinghouse, Foster
Wheeler and ICF Kaiser, among others. These companies are called upon to serve
as primary contractors and consultants on a large portion of the Superfund,
federal and state government, Department of Energy and Department of Defense
projects. Additionally, many smaller engineering firms, construction firms,
consulting firms and other specialty firms have entered the environmental
services industry in recent years, and additional firms can be expected to enter
the industry in the future. Many of our competitors in the environmental
services industry have significantly greater financial resources and more
established market positions than we do. There can be no assurance that we will
be able to compete with these companies, or that other firms will not expand
into or develop expertise in the areas in which we specialize.
WE MAY BE SIGNIFICANTLY AFFECTED BY EXTENSIVE ENVIRONMENTAL REGULATIONS
The scope and nature of environmental regulation, at the federal, state
and local levels, has expanded dramatically in recent years. Such regulations
impose stringent guidelines on companies that generate and handle hazardous
materials, as well as other companies involved in various aspects of the
environmental services industry. Any future increases or changes in regulation
may result in our incurring additional costs for equipment, retraining,
development of new remediation plans, handling of hazardous materials and other
costs.
In addition to the burdens imposed on our operations by various
environmental regulations, federal law imposes strict joint and several
liability on (i) present and former owners and operators of facilities that
release hazardous substances into the environment, (ii) generators and
transporters of such substances and (iii) persons arranging for the disposal of
such substances. All such persons may be liable for the costs and damages
(including penalties and fines) associated with environmental remediation,
including investigation, cleanup and natural resource damages. These costs can
be very substantial. In light of the growing trend to impose and
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expand the responsibility and scope of liability for environmental cleanup
costs, there can be no assurance that we will not be liable for such costs and
damages or exposed to other liabilities for our business activities.
As our environmental technology is commercialized, we may be required
to obtain environmental liability insurance in the future in amounts greater
than those we currently maintain. There can be no assurance, however, that such
insurance will provide coverage against all claims made against us. In addition,
as the cost of cleaning or correcting environmental hazards can be extremely
high, even if we are determined to be liable for costs that are covered by our
insurance, there can be no assurance that such coverage will be adequate to pay
the entire cost. If that occurs, we may be responsible for paying costs in
excess of our insurance coverage, which could have a material adverse effect on
our business, financial condition and results of operations.
OUR FUTURE SUCCESS MAY DEPEND ON CONTINUED ENVIRONMENTAL REGULATION IN
CERTAIN AREAS
The growth of the environmental services industry has been largely
attributable to, and tracks, the increase in environmental regulation since the
1970s. The demand for environmental services has been largely the result of
facility owners attempting to comply with, or avoid liability under, existing or
newly imposed environmental regulations at the federal, state and local levels.
Because of the burden imposed on the industry in complying with such
regulations, efforts have been made by various groups to seek the relaxation or
repeal of certain forms of environmental regulation. While such efforts to relax
environmental regulation have been largely unsuccessful to date, there can be no
assurance that the scope or growth of environmental regulation will not be
curtailed in the future. Any relaxation of environmental regulation may result
in a decline in demand for environmental services and may adversely affect our
operations.
WE ARE DEPENDENT UPON THE SPENDING LEVELS OF GOVERNMENTAL AND INDUSTRIAL
ENTITIES
Because of the nature of sites requiring environmental services, the
growing public emphasis on environmental matters and the cost of environmental
services, a significant portion of all funds budgeted for such services has
already been spent by governmental agencies and large industrial entities. While
third-party reimbursement may be sought in various cleanups, most Superfund
cleanups, as well as weapons and other nuclear facility cleanups, involve
significant spending by governmental agencies. As budget constraints and
emphasis on employment, international competition and other considerations grow,
certain governmental agencies and industrial entities may choose to delay or
curtail expenditures for environmental services. Any curtailment or delays in
spending for environmental services by governmental agencies or industrial
entities can be expected to have a material adverse effect on the environmental
services industry and on our operations and prospects.
OUR BUSINESS IS HEAVILY DEPENDENT UPON CONTRACTS TO PROVIDE SERVICES FOR THE
DEPARTMENT OF ENERGY
A significant portion of our revenues during the past two years have
come from contracts that we have to provide services for the Department of
Energy. Revenues from our contract to provide technical management support
services to the Department of Energy for the opening and operation of the Waste
Isolation Pilot Plant near Carlsbad, New Mexico constituted approximately 62% of
our total revenues in 1997. Revenues from our contract to provide technical,
engineering and scientific support for the closedown and cleanup of the
Department of Energy's facility at Rocky Flats, Colorado accounted for
approximately 23% of our total revenues in 1997. The Waste Isolation Pilot Plant
contract will expire on September 30, 2000, and the Rocky Flats contract will
expire on June 30, 2000. In order for us to replace the revenues attributable to
such large projects, we must secure one or more large projects or a large number
of smaller projects. There is no assurance that we can adequately replace such
projects with other projects that will produce as much revenue. If we fail to do
so, our business, financial condition and results of operations will be
materially adversely affected. Furthermore, there is no assurance that we will
not continue to be dependent on a small number of major customers for a
significant portion of our revenues.
OUR CASH NEEDS ARE SIGNIFICANT AND WE WILL NEED ADDITIONAL FUNDING IN THE FUTURE
We have required and will require substantial working capital to
support our ongoing operations. As is common in the environmental services
industry, payments for services rendered by us are generally received pursuant
to specific draw schedules after services are rendered. Thus, pending the
receipt of payments for
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services rendered, we must typically fund substantial project costs, including
significant labor and other costs, from internal and outside financing sources.
Prior to our initial public offering, financing for all of our
activities had been provided in the form of direct equity investments and loans
by Commodore Environmental Services, Inc. ("COES"), the owner of approximately
34% of our outstanding common stock. Since the consummation of our initial
public offering in July 1996, we have financed our operations internally without
utilizing any substantial bank lines of credit. Because of expenditures relating
to research and development and other infrastructure expenditures, we have
experienced periodic working capital shortages. As a result of such working
capital shortages, we were required to raise additional capital in 1997 through
private placements of our preferred stock and common stock, from which we
received aggregate net proceeds of approximately $4.0 million. In addition, we
received an aggregate of approximately $9,450,000 from unsecured loans from COES
in 1997 and 1998, which loans were retired in the debt restructurings which took
place in March and September, 1998. Currently Advanced Sciences has begun
repayment of an intercompany loan to the company of approximately $420,000 by
borrowing funds under its line of credit. We also closed an equipment financing
loan providing approximately $1,000,000 in working capital in July 1999.
Notwithstanding such financing, we expect that we will require
significant additional capital either in the form of debt or equity in the near
future to support the following activities:
o development and commercialization activities;
o investments in complementary products and technologies, including the
acquisition of GEI;
o expansion of our environmental management services business; and
o general and administrative functions.
Our future capital requirements and the adequacy of our available funds depend
on numerous factors, including:
o successful commercialization of our technology;
o acquisition of complementary products and technologies;
o magnitude, scope and results of our development efforts;
o progress of regulatory affairs activities;
o our ability to maintain and obtain new collaborative working
arrangements and agreements;
o competing technological and market developments; and
o the nature and timing of remediation and cleanup projects and permits
required.
There can be no assurance we will be able to obtain additional
financing on acceptable terms, if at all. We may seek to raise additional
capital through public or private offerings of equity or debt or through
collaborative agreements, strategic alliances with corporate partners and
others, or through other contractual arrangements with third parties. If
adequate funds are not available, we may be required to delay, scale back or
eliminate one or more of our development programs or certain aspects of our
operations (in addition to those we have already curtailed), or to obtain funds
by entering into arrangements with collaborative partners or others that may
require us to relinquish rights to our technology that we would not otherwise
relinquish, or to license third parties to commercialize our technology that we
would otherwise seek to develop ourselves. Failure to obtain adequate timely
financing could cause GEI to terminate the agreement between us. If adequate
funds are not available, our business, financial condition and results of
operations will be materially adversely affected.
8
<PAGE>
THE PATENT AND OTHER INTELLECTUAL PROPERTY PROTECTION WE CURRENTLY HAVE MAY NOT
BE ADEQUATE TO PROTECT US FROM INFRINGEMENT BY OTHERS AND WE CANNOT BE SURE THAT
OUR BUSINESS DOES NOT INFRINGE ON THE PROPRIETARY RIGHTS OF OTHERS
We are highly dependent upon proprietary technology and seek to protect
such technology through a combination of patents, licenses and trade secrets. We
have applied for and obtained patents for certain proprietary aspects of our
technology and processes in the United States and other countries. Our success
depends, in large part, on our ability to obtain additional patents, protect the
patents that we currently own, maintain trade secrecy protection and operate
without infringing on the proprietary rights of third parties. The patents that
we currently own are improvement patents, which are more difficult to monitor
for infringement than those that would be contained in a patent covering a
pioneering invention or technology. There can be no assurance that any of our
pending patent applications will be approved, that we will develop additional
proprietary technology that is patentable, that any patents issued to us will
provide us with competitive advantages or will not be challenged by third
parties or that the patents of others will not have an adverse effect on our
ability to conduct our business. Furthermore, there can be no assurance that
others will not independently develop similar or superior technologies,
duplicate elements of our technologies, or design around our technology.
In the future, we may need to acquire licenses to, or to contest the
validity of, issued or pending patents of third parties. There can be no
assurance that any license acquired under such patents would be made available
to us on acceptable terms, if at all, or that we would prevail in any such
contest. In addition, we could incur substantial costs in defending ourselves in
suits brought against us for alleged infringement of another party's patents or
in defending the validity or enforceability of our patents. In addition to
patent protection, we also rely on trade secrets, proprietary know-how and
technology, which we seek to protect, in part, by entering into confidentiality
agreements with our prospective working partners and collaborators, employees
and consultants. There can be no assurance that these agreements will not be
breached, that we would have adequate remedies for any breach, or that our trade
secrets and proprietary know-how will not otherwise become known or be
independently discovered by others.
OUR ACQUISITION PROGRAM POSES SPECIAL RISKS AND FINANCIAL CONSEQUENCES TO US
As part of our growth strategy, we may seek to acquire or invest in
complementary (including competitive) businesses, products or technologies.
Acquisitions involve numerous risks, including:
o difficulties in the assimilation of the acquired operations,
technologies and products;
o diversion of management's attention from other business concerns; and
o potential departures of key employees of the acquired company.
If we successfully identify acquisitions in the future, completing such
acquisitions may result in:
o new issuances of our stock that may be dilutive to current owners;
o increases in our debt and contingent liabilities; and
o additional amortization expenses related to goodwill and other
intangible assets.
Any of these risks could materially adversely affect our business, financial
condition and results of operations.
9
<PAGE>
We continue to explore potential acquisitions. We may not be able to
identify, successfully complete or integrate potential acquisitions in the
future. However, even if we can, we cannot be sure that such acquisitions will
have a positive impact on our business or operating results.
OUR PENDING ACQUISITION OF GLOBAL ENERGY INVESTORS, INC. POSES ADDITIONAL RISKS
Investment in emerging markets is speculative and involves certain
risks. Individual foreign economies may differ favorably or unfavorably from
developed country economies in such respects as growth of gross domestic
product, rate of inflation, capital reinvestment, resources, self-sufficiency
and balance of payments position. In addition, there is a possibility of
expropriation or confiscatory taxation, imposition of capital controls, exchange
controls or other monetary restrictions, imposition of withholding taxes on
dividend or interest payments, or other similar developments, which could affect
investments in those countries.
In the past many emerging countries have experienced and continue to experience
high rates of inflation. In certain countries inflation has at times accelerated
rapidly to hyper-inflationary levels, creating a negative interest rate
environment and sharply eroding the value of outstanding financial assets in
those countries. In addition, if deterioration occurs in an emerging country's
balance of payments or for other reasons, a country could impose temporary
restrictions on capital remittances.
Due to investment in instruments denominated in currencies other than the U.S.
dollar, the value of the investment as measured in U.S. dollars will be affected
by changes in foreign currency exchange rates. Many of the currencies of
emerging countries have experienced significant devaluations relative to the
dollar or other major adjustments. To the extent the company invests in projects
not denominated or linked to dollars, a decline in the value of such currency
would reduce the value of certain investments.
WE ARE HEAVILY DEPEND ON OUR KEY MANAGEMENT AND OUR ABILITY TO HIRE OTHER
QUALIFIED PERSONNEL
Our success depends to a significant extent upon the performance of
senior management and other key employees and on our ability to continue to
attract and retain highly qualified personnel. We have employment agreements
with each of our key employees. In addition, our key employees own shares of our
common stock and have options to purchase additional shares. Nonetheless, such
individuals could leave the company. Should any of the members of our senior
management be unable or unwilling to continue in their present roles, or should
such persons determine to enter into competition with us, our operations and
prospects could be adversely affected. Competition for highly skilled employees
with technical, management, marketing, sales, product development and other
specialized training is intense, and we cannot assure you that we will be
successful in attracting and retaining such personnel in the future. We
presently do not carry any key-man life insurance.
WE HAVE VERY LIMITED MANUFACTURING OPERATIONS AND RELY ON OUTSIDE SOURCES OF
SUPPLY FOR MOST OF THE STRATEGIC COMPONENTS USED IN OUR SET TECHNOLOGY
We currently have very limited manufacturing capabilities and
experience in manufacturing the components used in our SET process. We intend to
continue to rely on outside sources of supply for most of the strategic
components utilized in the SET technology. If we were unable to obtain a
sufficient supply of required components, we could experience significant delays
in the manufacture of SET equipment, which could result in the loss of orders
and customers and could have a material adverse affect on our business,
financial condition and results of operations. In addition, if the cost of raw
materials or finished components were to increase, there can be no assurance
that we would be able to pass such increase to our customers. The use of outside
suppliers also entails risks of quality control and disclosure of proprietary
information.
OUR BOARD OF DIRECTORS HAS A POTENTIAL CONFLICT OF INTERESTS
Paul E. Hannesson, our Chairman of the Board, President and Chief
Executive Officer, also serves as the Chairman of the Board and Chief Executive
Officer of our affiliate, Commodore Separation Technologies, Inc.
("Separation"), and devotes a portion of his business and professional time and
efforts to Separation's business. In addition, six out of seven members of our
board of directors also serve as directors of Separation. Mr. Hannesson and
those other directors may have potential conflicts of interest with respect to,
among other things, potential corporate opportunities, business combinations,
joint ventures and/or other business opportunities that may become
10
<PAGE>
available to them. Moreover, while Mr. Hannesson has agreed to devote a
significant portion of his business and professional time and efforts to the
Company, potential conflicts of interest also include the amount of time and
effort devoted by him to Separation. We may be materially adversely affected if
Mr. Hannesson and/or the other directors choose to place the interests of
Separation before those of the company.
Mr. Hannesson and the other directors have agreed that, to the extent
such opportunities arise, they will carefully consider a number of factors,
including:
o whether such opportunities are within our line of business;
o whether such opportunities are consistent with our strategic
objectives; and
o whether we will be able to undertake or benefit from such
opportunities.
In addition, our board has adopted a policy whereby any future transactions
between the Company and any of its subsidiaries, affiliates, officers,
directors, or principal stockholders will be on terms no less favorable to us
than could reasonably be obtained in "arm's length" transactions with
independent third parties. Mr. Hannesson and the other directors also owe
fiduciary duties of care and loyalty to us under Delaware law. However, our
failure to resolve any conflicts of interest in our favor could materially
adversely affect our business, financial condition and results of operations.
FUTURE SALES OF OUR COMMON STOCK MAY HAVE A DEPRESSIVE EFFECT ON THE MARKET
PRICE OF OUR STOCK
On a fully-diluted basis (including the full exercise of the options
that have been granted under our 1998 Stock Option Plan as of the date of this
prospectus), approximately 51,830,613 shares of our common stock would be
outstanding on the date of this prospectus. Of such shares, 25,629,936 shares
would be freely tradable without restriction or further registration under the
Securities Act, except to the extent such shares are held by our "affiliates."
The remaining 26,200,677 shares are "restricted securities" as defined in Rule
144 promulgated under the Securities Act, and may only be sold in the public
market if such shares are registered under the Securities Act or sold in
accordance with Rule 144 or another exemption from registration under the
Securities Act. We cannot predict the effect, if any, that future sales of
shares, or the availability of shares for future sale, will have on the
prevailing market price of our common stock. Sales of substantial amounts of our
common stock, or the perception that such sales could occur, could adversely
affect prevailing market prices for our common stock.
THE ISSUANCE OF NEW SHARES UPON EXERCISE OF STOCK OPTIONS AND GEI ACQUISITION
WILL CAUSE DILUTION TO OUR CURRENT STOCKHOLDERS
On the date of this prospectus, employees had outstanding options under
our 1998 Stock Option Plan to purchase an aggregate of approximately 3,426,412
shares of our common stock at an exercise price of approximately $0.4375 per
share. Our 1998 Stock Option Plan authorizes our board of directors to grant
options to purchase up to an additional 1,573,588 shares of our common stock. If
all of these options were to be exercised, our stockholders would experience a
dilution in their percentage ownership of the company. In addition, the
acquisition of GEI would cause the issuance of at least 9 million and possibly
as many as 12.5 million shares, causing further dilution in the percentage
ownership of existing stockholders.
WE DO NOT ANTICIPATE PAYING ANY DIVIDENDS ON OUR COMMON STOCK
We have never paid any dividends on our common stock. We do not
anticipate paying any cash dividends on our common stock in the foreseeable
future. The current policy of our board of directors is to retain earnings to
finance the operations and expansion of our business. Any future determination
to pay dividends will depend on our results of operations, financial condition,
capital requirements, contractual restrictions and other factors deemed relevant
by our board of directors.
THE MARKET PRICE OF OUR COMMON STOCK HAS FLUCTUATED CONSIDERABLY AND WILL
PROBABLY CONTINUE TO DO SO
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<PAGE>
The stock markets have experienced extreme price and volume
fluctuations. The market prices for our common stock and publicly traded
warrants have been historically volatile. The market prices of our securities
could be subject to wide fluctuations in the future as well in response to a
variety of events or factors, some of which may be beyond our control. These
could include, without limitation:
o future announcements of new competing technologies;
o the status of our acquisition of GEI;
o changing policies and regulations of the federal government and state
governments;
o the status of our patent protection and other intellectual property
rights;
o quarterly fluctuations in our financial results;
o liquidity of the market for our securities;
o public perception of our company and our entry into new markets; and
o general conditions in our company's industry and the economy.
OUR CHARTER CONTAINS AUTHORIZED, UNISSUED PREFERRED STOCK THAT MAY INHIBIT A
TAKEOVER
Our certificate of incorporation and by-laws contain provisions that
could make it more difficult for a third party to acquire the company. Our
certificate of incorporation authorizes our board of directors to issue
preferred stock without stockholder approval and upon such terms as it may
determine. The rights of holders of our common stock are subject to, and may be
adversely affected by, the rights of future holders of preferred stock. In
addition, our by-laws require stockholders to provide advance notice to nominate
candidates for election as directors and to submit proposals for consideration
at stockholder meetings. Section 203 of the Delaware General Corporation Law
makes it more difficult for an "interested stockholder" (generally a 15%
stockholder) to effect various business combinations with a corporation for a
three-year period after the stockholder becomes an "interested stockholder." In
general, these provisions may discourage a third party from attempting to
acquire our company and, therefore, may inhibit a change of control of our
company under circumstances that could give stockholders an opportunity to
realize a premium over then-prevailing market prices.
OUR FAILURE AND THE FAILURE OF OUR CUSTOMERS AND PARTNERS TO BE YEAR 2000
COMPLIANT COULD NEGATIVELY IMPACT OUR BUSINESS
The Year 2000 issue is the result of computer programs written using
two digits rather than four to define the applicable year. Any computer program
or microprocessor that uses only two digits to recognize years may recognize a
date specifying "00" as the year 1900 rather than the year 2000, which could
result in miscalculations or system or equipment failures.
We rely on information technology systems and non-information
technology systems (e.g., equipment with embedded microprocessors) in connection
with our business operations. In addition, we rely upon the proper functioning
of the computer and non-information technology systems of our collaborative
partners, suppliers and customers.
We believe that we are taking reasonable steps to identify and address
those matters that could cause serious interruptions in our business and
operations due to Year 2000 issues. Our efforts include programs to address our
internal Year 2000 readiness as well as the readiness of our collaborative
partners, suppliers and customers. While we believe that our mainframe database
and operating systems are Year 2000 compliant, no assurance can be given that
all of our systems will be Year 2000 compliant. Any of the following could have
a material adverse effect on our business, financial condition and results of
operations:
o a failure to fully identify all Year 2000 dependencies in our systems;
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<PAGE>
o a failure to fully identify all Year 2000 dependencies in the systems
of our collaborative partners, suppliers and customers;
o a failure of our collaborative partners, suppliers and customers to
adequately address their Year 2000 issues;
o the failure of any contingency plans developed to protect our business
and operations from Year 2000-related interruptions; and
o delays in the implementation of new systems resulting from Year 2000
problems.
THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS THAT ARE SUBJECT TO A NUMBER
OF RISKS AND UNCERTAINTIES
This prospectus contains forward-looking statements within the meaning
of Section 27A of the Securities Act and Section 21E of the Exchange Act, based
on our current expectations and projections about future events, including:
o strategic plans;
o potential growth, including penetration of developed markets and
opportunities in emerging markets;
o planned operational changes and research and development efforts;
o Year 2000 issues;
o future financial performance, including expected capital expenditures;
o research and development expenditures;
o potential acquisitions; and
o future cash sources and requirements.
These forward-looking statements are subject to a number of risks and
uncertainties, including those identified in "Risk Factors," which could cause
our actual results to differ materially from historical results or those
anticipated and certain of which are beyond our control. The words "believe,"
"expect," "anticipate" and similar expressions identify forward-looking
statements. We undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.
The risks included here are not exhaustive. Other sections of this
prospectus may describe additional factors that could adversely impact our
business and financial performance. Moreover, we operate in a very competitive
and rapidly changing environment. New risk factors emerge from time to time and
it is not possible for us to predict all such risk factors, nor can we assess
the impact of all such risk factors on our business or the extent to which any
factor, or combination of factors, may cause actual results to differ materially
from those contained in any forward-looking statements. Given these risks and
uncertainties, investors should not place undue reliance on forward-looking
statements as a prediction of actual results.
USE OF PROCEEDS
All of the common stock offered hereby is being sold by or for the
selling stockholders. We will not receive any proceeds from the sale of the
common stock offered hereby. We will, however, receive the exercise price upon
the exercise of options by the selling stockholders. We plan to use any such
proceeds for working capital and general corporate purposes.
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<PAGE>
SELLING STOCKHOLDERS
This prospectus may be used by the persons named below to re-offer and
re-sell to the public shares of our common stock issuable to them when they
exercise their stock options granted under our 1998 Stock Option Plan. These
persons may be considered "affiliates" of the company within the meaning of the
Securities Act and the rules and regulations of the SEC thereunder, and such
shares may be considered "control securities" within the meaning of General
Instruction C to Form S-8. Executive officers, directors and others who are
considered to be "affiliates" of the company who acquire our common stock under
our 1998 Stock Option Plan may be added to the list of selling stockholders
below, and the number of shares the selling stockholders may sell pursuant to
this prospectus may be increased or decreased, by use of a prospectus supplement
filed with the SEC. An "affiliate" is defined in Rule 405 under the Securities
Act as a "person that directly, or indirectly, through one or more
intermediaries, controls or is controlled by, or is under common control with"
the company. Although a person's name is included in the table below, neither
that person nor we are making an admission that such person is our "affiliate."
The following table sets forth: (i) the name of each selling
stockholder; (ii) the nature of any position, office or other material
relationship the selling stockholder has held with the company or its affiliates
within the past three years; (iii) the number of shares of common stock, and the
percentage (if 1% or more) of the outstanding shares of such class, owned as of
November 8, 1999; (iv) the number of shares which may be sold pursuant to this
prospectus for the account of the selling stockholder; and (v) the number of
such shares, and the percentage (if 1% or more) of the outstanding shares of
such class, that will be owned by the Selling Stockholder, assuming the sale of
all the shares offered pursuant to this prospectus. Since we have not been
informed whether or not any selling stockholders intend to sell any shares, the
following table has been prepared assuming that all shares offered under this
prospectus will be sold to parties unaffiliated with the selling stockholders.
The inclusion of shares in the table below does not constitute a commitment to
sell any shares. Unless otherwise indicated, the selling stockholders have sole
voting and investment power with respect to their shares.
<TABLE>
<CAPTION>
Shares of Shares of
Common Stock Common Stock
Owned Prior to Owned After
the Sale(1) the Sale
----------------------- ------------------------
Number of
Shares
Which May Be
Name and Position/Relationship Number Percent(2) Sold Hereby Number Percent(2)
- ------------------------------ ------ ---------- ----------- ------ ----------
<S> <C> <C> <C> <C> <C>
Paul E. Hannesson (3)............ 577,500 2.4% 577,500 0 *
Peter E. Harrod (4).............. 255,000 1.1% 255,000 0 *
James M. DeAngelis (5)........... 181,250 * 181,250 0 *
William E. Ingram (6)............ 150,000 * 150,000 0 *
Kenneth L. Adelman (7)........... 70,000 * 70,000 0 *
William R. Toller (8)............ 70,000 * 70,000 0 *
Herbert A. Cohen (9)............. 71,000(10) * 70,000 1,000 *
David L. Mitchell (11)........... 70,000 * 70,000 0 *
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<CAPTION>
Shares of Shares of
Common Stock Common Stock
Owned Prior to Owned After
the Sale(1) the Sale
----------------------- ------------------------
Number of
Shares
Which May Be
Name and Position/Relationship Number Percent(2) Sold Hereby Number Percent(2)
- ------------------------------ ------ ---------- ----------- ------ ----------
<S> <C> <C> <C> <C> <C>
Bentley J. Blum (12)............. 70,000 * 70,000 0 *
Edward L. Palmer (13)............ 70,000 * 70,000 0 *
Total....................... 1,584,750 6.3% 1,584,750 1,000 *
</TABLE>
* Represents less than 1% of the outstanding shares of our common stock.
(1) Includes the aggregate number of shares (subject to adjustment)
issuable to the selling stockholders upon exercise of currently
outstanding stock options granted under our 1998 Stock Option Plan,
whether or not such options are currently exercisable. Unless otherwise
indicated, other than the shares issuable upon exercise of options
granted under our 1998 Stock Option Plan, the selling stockholders do
not own or have a right to purchase any other shares of our common
stock.
(2) Percentages based on 23,702,263 shares of our common stock outstanding
on November 8, 1999.
(3) Mr. Hannesson has been a director of the company since March 1996 and
was appointed Chairman of the Board in November 1996. Mr. Hannesson
also served as Chief Executive Officer from March to October 1996 and
as President from March to September 1996, and was re-appointed Chief
Executive Officer on November 18, 1996 and President on May 1, 1997.
Mr. Hannesson served as a director of COES from February 1993 to June
1998 and as its Chairman of the Board and Chief Executive Officer from
November 1996 to June 1998. Mr. Hannesson also served as President of
COES from February 1993 to July 1996 and from May 1997 to June 1998.
Mr. Hannesson also currently serves as the Chairman of the Board and
Chief Executive Officer of Separation, Commodore Solution Technologies,
Inc. and Commodore CFC Technologies, Inc., subsidiaries of the company.
Mr. Hannesson also serves as Chairman of the Board of Lanxide
Corporation ("Lanxide"), a research and development company developing
metal and ceramic materials. Lanxide is affiliated with the company by
significant common ownership.
(4) Mr. Harrod has served as an executive officer of Commodore Advanced
Sciences, Inc., a wholly-owned subsidiary of the company, since 1991
and as its President since October 28, 1996. Mr. Harrod has also served
as Senior Vice President of Commodore Solution Technologies, Inc., a
wholly-owned subsidiary of the company, since November 1997.
(5) Mr. DeAngelis has served as Vice President--Finance and Treasurer of
the company since July 1998. Mr. DeAngelis was appointed Senior Vice
President--Sales & Marketing of Separation in September 1996, after
having served as its Vice President--Marketing since November 1995. Mr.
DeAngelis has also served as the President of Commodore CFC
Technologies, Inc., a wholly-owned subsidiary of the company, since
September 1996.
(6) Mr. Ingram served as Vice President and Controller from October 1996 to
March 1997, as Vice President- Finance from March to May 1997, and as
Vice President and Controller of the Company from June 1997 to present.
(7) Dr. Adelman has served as a director of the company since July 1996 and
has served as its Executive Vice President, Marketing and International
Development since May 1997. Dr. Adelman also joined the Board of
Directors of Separation in April 1997. Dr. Adelman served as a director
of COES from July 1996 to June 1998. Dr. Adelman resigned his
management positions effective December 31, 1998.
(8) Mr. Toller joined the board of directors of the company in March 1998.
Mr. Toller also joined the board of directors of Separation in April
1997 and served as a consultant to COES from July 1997 to February
1998. Mr. Toller served as Vice Chairman of Lanxide from July 1997 to
February 1998.
(9) Mr. Cohen has served as a director of the company since July 1996 and
as a director of Separation since March 1998. Mr. Cohen served as a
director of COES from July 1996 to June 1998.
(10) Includes 1,000 shares of our common stock, and 70,000 shares of our
common stock underlying options granted to Mr. Cohen under our 1998
Stock Option Plan.
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(11) Mr. Mitchell has served as a director of the company since July 1996
and as a director of Separation since April 1997. Mr. Mitchell served
as a director of COES from July 1996 to June 1998.
(12) Mr. Blum has been a director of the company since March 1996 and served
as its Chairman of the Board from March to November 1996. Mr. Blum has
served as a director of Separation since August 1996. Mr. Blum has
served as a director of COES since 1984 and served as its Chairman of
the Board from 1984 to November 1996. Mr. Blum also currently serves as
a director of Commodore Solution Technologies, Inc. and Commodore CFC
Technologies, Inc., wholly-owned subsidiaries of the company.
(13) Mr. Palmer has served as a director of the company since July 1998.
PLAN OF DISTRIBUTION
All or a portion of the shares offered hereby may be sold, from time to
time, by or for the selling stockholders in one or more transactions on the
American Stock Exchange, in the public market off the American Stock Exchange,
in privately negotiated transactions, or in a combination of such transactions.
Such sales may be made either at fixed prices which may be changed, at market
prices prevailing at the time of sale, at prices related to prevailing market
prices or at negotiated prices. The shares may be sold by or for the selling
stockholders by one or more of the following methods, without limitation:
o block trades in which a broker or dealer will attempt to sell the
shares as agent, but may position and resell a portion of the block as
principal to facilitate the transaction;
o purchases by a broker or dealer as principal and resale by such broker
or dealer for its account pursuant to this prospectus;
o an exchange distribution in accordance with the rules of such exchange;
o ordinary brokerage transactions and transactions in which a broker may
solicit purchasers;
o privately negotiated transactions;
o short sales; and
o a combination of any such methods of sale.
In effecting sales, brokers and dealers engaged by the selling
stockholders may arrange for other brokers or dealers to participate. Brokers or
dealers may receive compensation in the form of discounts, concessions or
commissions from the selling stockholders (or, if any such broker-dealer acts as
agent for the purchaser of such shares, from such purchaser) in amounts to be
negotiated which may be less than, or in excess of, those customary in the types
of transactions involved. Any shares of common stock that qualify for sale
pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather
than pursuant to this prospectus.
The selling stockholders and any broker-dealers or agents that
participate with the selling stockholders in the distribution of the shares may
be deemed to be "underwriters" within the meaning of the Securities Act, and any
commissions received by them and any profit received by them may be deemed to be
underwriting commissions or discounts under the securities act.
Under applicable rules and regulations under the Exchange Act, any
person engaged in the distribution of the shares may not simultaneously engage
in market-making activities with respect to our common stock for a period of one
business day prior to the commencement of such distribution. In addition and
without limiting the foregoing, each selling stockholder will be subject to
applicable provisions of the Exchange Act and the rules and regulations
thereunder, including, without limitation, Regulation M, which provisions may
limit the timing of purchases and sales of our common stock by the selling
stockholders. All of the foregoing may limit the marketability of the shares.
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To our knowledge, no underwriting arrangements have been entered into
by the selling stockholders with respect to the shares as of the date of this
prospectus . If we are notified by a selling stockholder that any material
arrangement has been entered into with a broker or dealer for the sale of shares
through a block trade, special offering or secondary distribution, or a purchase
by a broker or dealer, we will file a supplement to this prospectus, if
required, pursuant to Rule 424(b) under the Securities Act, disclosing (a) the
name of each such selling stockholder and of the participating broker or dealer,
(b) the number of shares involved, (c) the price at which such shares were sold,
(d) the commissions paid or the discounts or concessions allowed to such broker
or dealer, where applicable, (e) that such broker or dealer did not conduct any
investigation to verify the information set out or incorporated by reference in
this prospectus, and (f) other facts material to the transaction.
We will maintain the effectiveness of the registration statement of
which this prospectus is a part until the earlier of (i) two years after the
effective date of the registration statement, or (ii) such time as all the
shares registered hereby have been sold or are no longer subject to volume or
manner of sale restrictions under the Securities Act.
In order to comply with the securities laws of certain states, if
applicable, the shares will be sold in such jurisdictions only through
registered or licensed brokers or dealers.
We will pay all expenses incurred to register the shares, which are
estimated to be approximately $47,500 , but all brokerage commissions and other
expenses incurred by individual selling stockholders will be paid by them. There
is no assurance that any of the selling stockholders will sell any or all of the
shares offered hereby.
LEGAL MATTERS
The validity of the shares offered hereby has been passed upon by our
counsel, Greenberg Traurig, New York, New York. A shareholder of Greenberg
Traurig holds options to purchase 275,000 shares of COES common stock.
EXPERTS
The financial statements incorporated in this prospectus by
reference to the Annual Report on Form 10K of Commodore Applied Technologies,
Inc. as of December 31, 1998 and 1997 and for each of the three years in the
period ended December 31, 1998 have been so incorporated in reliance on the
report (which contains an explanatory paragraph relating to the Company's
ability to continue as a going concern as described in Note 2 to the
financial statements) of PricewaterhouseCoopers LLP, independent accountants,
given on the authority of such firm as experts in auditing and accounting.
17
<PAGE>
========================================= ====================================
We have not authorized any dealer,
salesperson or other person to give any 1,584,750 SHARES
information or represent anything not
contained or incorporated by reference in COMMODORE APPLIED TECHNOLOGIES, INC.
this prospectus. You must not rely on any
unauthorized information. This prospectus COMMON STOCK
does not offer to sell any shares in any
jurisdiction where it is unlawful. The
information in this prospectus is current
only as of its date.
---------------------
TABLE OF CONTENTS
PROSPECTUS
Page
---------------------
Where You Can Find More Information.....2
Certain Definitions and Trademark.......3
Forward-looking Statements..............3
The Company.............................3
Risk Factors............................4
Use of Proceeds........................13
Selling Stockholders...................14
Plan of Distribution...................16
Legal Matters..........................17
Experts................................17 November 10, 1999
========================================= ====================================
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The Company hereby incorporates by reference into this Registration
Statement on Form S-8 (the "Registration Statement") the following documents
heretofore filed by the Company with the Commission (File No. 1-11871) pursuant
to the Securities Exchange Act of 1934, as amended (the "Exchange Act"):
(a) The Company's Annual Report on Form 10-K for the year ended
December 31, 1998, including the exhibits thereto;
(b) The Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31 and June 30, 1999;
(c) The Company's Current Report on Form 8-K dated December 25,
1998, and Amendment No. 1 on Form 8-K/A thereto filed with the
SEC on March 9, 1999;
(d) The Company's Current Reports on Form 8-K dated April 21,
1999, August 17, 1999 and October 1, 1999; and
(e) The description of the Company's Common Stock contained in its
Registration Statement on Form 8-A, dated June 24, 1996, as
amended by the Company's Registration Statement on Form 8-A/A,
dated June 26, 1996, including any other amendment or report
filed for the purpose of updating such information.
In addition, all documents subsequently filed by the Company pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing
of a post-effective amendment to this Registration Statement which indicates
that all securities offered hereby have been sold or which deregisters all such
securities then remaining unsold, shall be deemed to be incorporated herein by
reference and to be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
The validity of the Common Stock to which this Registration Statement
relates will be passed upon for the Company by Greenberg Traurig, New York, New
York. A shareholder of Greenberg Traurig holds options to purchase 275,000
shares of COES common stock.
Item 6. Indemnification of Directors and Officers.
Section 145(a) of the General Corporation Law of the State of Delaware
(the "General Corporation Law") provides that a Delaware corporation may
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the corporation) by reason of the fact that he or she is or was a
director, officer, employee or agent of the corporation or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation or enterprise, against expenses, judgments, fines and
amounts paid in settlement actually and reasonably incurred by him or her in
connection with such action, suit or proceeding if he or she acted in good faith
and in a manner he or she reasonably believed to be in or not opposed to
II-1
<PAGE>
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no cause to believe his or her conduct was unlawful.
Section 145(b) of the General Corporation Law provides that a Delaware
corporation may indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit by or in
the right of the corporation to procure a judgment in its favor by reason of the
fact that such person acted in any of the capacities set forth above, against
expenses actually and reasonably incurred by him or her in connection with the
defense or settlement of such action or suit if he or she acted under similar
standards as set forth above, except that no indemnification may be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
court in which such action or suit was brought shall determine that despite the
adjudication of liability, but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to be indemnified for such
expenses which the court shall deem proper.
Section 145 of the General Corporation Law further provides that to the
extent a director or officer of a corporation has been successful on the merits
or otherwise in the defense of any action, suit or proceeding referred to in
subsections (a) and (b) or in the defense of any claim, issue or matter therein,
he or she shall be indemnified against expenses actually and reasonably incurred
by him or her in connection therewith; that indemnification provided for by
Section 145 shall not be deemed exclusive of any other rights to which the
indemnified party may be entitled; and that the corporation may purchase and
maintain insurance on behalf of such person against any liability asserted
against him or her or incurred by him or her in any such capacity or arising out
of his or her status as such, whether or not the corporation would have the
power to indemnify him or her against such liabilities under such Section 145.
Section 102(b)(7) of the General Corporation Law provides that a
corporation in its original certificate of incorporation or an amendment thereto
validly approved by stockholders may eliminate or limit personal liability of
members of its board of directors or governing body for monetary damages for
breach of a director's fiduciary duty. However, no such provision may eliminate
or limit the liability of a director for breaching his or her duty of loyalty,
failing to act in good faith, engaging in intentional misconduct or knowingly
violating a law, paying a dividend or approving a stock repurchase or redemption
which was illegal, or obtaining an improper personal benefit. A provision of
this type has no effect on the availability of equitable remedies, such as
injunction or rescission, for breach of fiduciary duty. The Company's
Certificate of Incorporation contains such a provision.
Article Thirteenth of the Company's Certificate of Incorporation
eliminates the personal liability of directors and/or officers to the Company or
its stockholders for monetary damages for breach of fiduciary duty as a
director; provided that such elimination of the personal liability of a director
and/or officer of the Company does not apply to (i) any breach of such person's
duty of loyalty to the Company or its stockholders, (ii) acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) actions prohibited under Section 174 of the General Corporation Law
(i.e., liabilities imposed upon directors who vote for or assent to the unlawful
payment of dividends, unlawful repurchases or redemption of stock, unlawful
distribution of assets of the Company to the stockholders without the prior
payment or discharge of the Company's debts or obligations, or unlawful making
or guaranteeing of loans to directors and/or officers), or (iv) any transaction
from which the director derived an improper personal benefit. In addition,
Article Fourteenth of the Company's Certificate of Incorporation and Article VI
of the Company's By-Laws provide that the Company shall indemnify its corporate
personnel, directors and officers to the fullest extent permitted by the General
Corporation Law, as amended from time to time.
The Company has in force a combined insurance policy with its
affiliates under which its directors and officers are insured (with limits of
$10 million per occurrence and $10 million in the aggregate) against certain
expenses in connection with the defense of such actions, suits or proceedings to
which they are parties by reason of being or having been directors or officers
of the Company.
The Company and its officers, directors and other persons are entitled
to be indemnified under certain circumstances for certain securities law
violations in accordance with the provisions of an underwriting agreement dated
June 28, 1996, by and among the Company, Bentley J. Blum and National Securities
Corporation, as representative of the several underwriters.
II-2
<PAGE>
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling the Company
as disclosed above, the Company has been informed that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act and is therefore unenforceable.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibit
Number Description
- ------- -----------
4.1 Certificate of Incorporation of the Company. (1)
4.2 By-laws of the Company. (1)
4.3 Specimen Form of Common Stock Certificate. (1)
*4.4 Commodore Applied Technologies, Inc. 1998 Stock Option Plan.
*4.5 Form of Option Agreement.
*5.1 Opinion of Greenberg Traurig.
*23.2 Consent of PricewaterhouseCoopers LLP.
*23.3 Consent of Greenberg Traurig (contained in Exhibit 5.1).
*25.1 Power of Attorney (included as part of the signature page to
this Registration Statement and incorporated herein by
reference).
- ------------------------
* Filed herewith electronically.
(1) Incorporated herein by reference. Filed as an exhibit to the Company's
Registration Statement on Form S-1 (Registration No. 333-4396) filed with
the Commission on May 2, 1996.
II-3
<PAGE>
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement (or the most
recent post-effective amendment hereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in this
Registration Statement. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or
high and of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20 percent
change in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement; and
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information in this
Registration Statement;
provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed by the Company pursuant to Section 13 or Section 15(d) of the Exchange Act
that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of the annual report of the
employee benefit plans pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of New York, State of New York, on this 2nd day of
November, 1999.
COMMODORE APPLIED TECHNOLOGIES, INC.
By: /s/ Paul E. Hannesson
------------------------------------
Paul E. Hannesson
Chairman of the Board, President
and Chief Executive Officer
II-5
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Paul E. Hannesson and James M. DeAngelis,
and each of them, his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, and any other regulatory authority, granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their substitutes, may lawfully
do or cause to be done by virtue hereof.
--------------------
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
--------- -------- ----
<S> <C> <C>
/s/ Paul E. Hannesson Chairman of the Board, President November 02, 1999
- ------------------------------ and Chief Executive Officer
Paul E. Hannesson (principal executive officer)
/s/ James M. DeAngelis Vice President--Finance and Treasurer November 02, 1999
- ------------------------------ (principal financial and accounting
James M. DeAngelis officer)
/s/ William R. Toller Director November 02, 1999
- ------------------------------
William R. Toller
/s/ Bentley J. Blum Director November 02, 1999
- ------------------------------
Bentley J. Blum
/s/ Kenneth L. Adelman Director November 02, 1999
- ------------------------------
Kenneth L. Adelman
/s/ Herbert A. Cohen Director November 02, 1999
- ------------------------------
Herbert A. Cohen
/s/ David L. Mitchell Director November 02, 1999
- ------------------------------
David L. Mitchell
/s/ Edward L. Palmer Director November 02, 1999
- ------------------------------
Edward L. Palmer
</TABLE>
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
4.1 Certificate of Incorporation of the Company. (1)
4.2 By-laws of the Company. (1)
4.3 Specimen Form of Common Stock Certificate. (1)
*4.4 Commodore Applied Technologies, Inc. 1998 Stock Option Plan.
*4.5 Form of Option Agreement.
*5.1 Opinion of Greenberg Traurig.
*23.2 Consent of PricewaterhouseCoopers LLP.
*23.3 Consent of Greenberg Traurig (contained in Exhibit 5.1).
*25.1 Power of Attorney (included as part of the signature page to
this Registration Statement and incorporated herein by
reference).
- ------------------------
* Filed herewith electronically.
(1) Incorporated herein by reference. Filed as an exhibit to the Company's
Registration Statement on Form S-1 (Registration No. 333-4396) filed with
the Commission on May 2, 1996.
<PAGE>
Exhibit 4.4
OPTION NO. ______________________
COMMODORE APPLIED TECHNOLOGIES, INC.
1998 STOCK OPTION PLAN
NON-QUALIFIED STOCK OPTION
GRANTED TO
____________________________
OPTIONEE
_________________________ _________________________
Number of Shares Price per Share
DATE GRANTED:____________ EXPIRATION DATE:_________
<PAGE>
NON-QUALIFIED STOCK OPTION AGREEMENT
AGREEMENT made as of this [ ] day of [ ],
[199__] (the "Date of Grant") between COMMODORE APPLIED TECHNOLOGIES, INC., a
Delaware corporation (hereinafter referred to as the "Company"), and [
], residing at [ ] (hereinafter referred to as the
"Employee").
W I T N E S S E T H:
WHEREAS, the Company desires, in connection with the employment of the
Employee and in accordance with its 1998 Stock Option Plan (the "Plan"), to
provide the Employee with an opportunity to acquire Common Stock, $0.001 par
value (hereinafter referred to as "Common Stock"), of the Company on favorable
terms and thereby increase his proprietary interest in the continued progress
and success of the business of the Company;
NOW, THEREFORE, in consideration of the premises, the mutual covenants
herein set forth and other good and valuable consideration, the Company and the
Employee hereby agree as follows:
1. CONFIRMATION OF GRANT OF OPTION. Pursuant to a determination by
the Board of Directors of the Company, the Company, subject to the terms of the
Plan and this Agreement, hereby grants to the Employee as a matter of separate
inducement and agreement, and in addition to and not in lieu of salary or other
compensation for services, the right to purchase (hereinafter referred to as the
"Option") an aggregate of [NUMBER] shares of Common Stock, subject to adjustment
as provided in the Plan (such shares, as adjusted, hereinafter being referred to
as the "Shares"). The Option is NOT intended to qualify as an incentive stock
option under Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code").
2. PURCHASE PRICE. The purchase price of shares of Common Stock
covered by the Option will be [$____] per share, subject to adjustment as
provided in the Plan.
3. EXERCISE OF OPTION. The Option shall be exercisable on the terms
and conditions hereinafter set forth:
(a) The Option shall become exercisable cumulatively as to the
following amounts of the number of Shares originally subject thereto (after
giving effect to any adjustment pursuant to the Plan), on the dates indicated:
(i) as to 20% of such Shares on or after [ ];
(ii) as to 20% of such Shares on or after [ ];
(iii) as to 20% of such Shares on or after [ ];
<PAGE>
(iv) as to 20% of such Shares on or after [ ]; and
(v) as to 20% of such Shares on or after [ ].
(b) The Option may be exercised pursuant to the provisions of
this Section 3, by notice and payment to the Company as provided in Sections 9
and 14 hereof.
4. TERM OF OPTION. The term of the Option shall be a period of ten
(10) years from the Date of Grant, subject to earlier termination or
cancellation as provided in this Agreement. This Option, to the extent
unexercised, shall expire on the day immediately prior to the tenth (10th)
anniversary of the Date of Grant. The holder of the Option shall not have any
rights to dividends or any other rights of a stockholder with respect to any
shares of Common Stock subject to the Option until such shares shall have been
issued to him (as evidenced by the appropriate entry on the books of the Company
or a duly authorized transfer agent of the Company) provided that the date of
issuance shall not be earlier than the date this Option is exercised and payment
of the full purchase price of the shares of Common Stock (with respect to which
this Option is exercised) is made to the Company.
5. NON-TRANSFERABILITY OF OPTION. The Option shall not be assigned,
transferred or otherwise disposed of, or pledged or hypothecated in any way, and
shall not be subject to execution, attachment or other process, except as may be
provided in the Plan. Any assignment, transfer, pledge, hypothecation or other
disposition of the Option attempted contrary to the provisions of the Plan, or
any levy of execution, attachment or other process attempted upon the Option,
will be null and void and without effect. Any attempt to make any such
assignment, transfer, pledge, hypothecation or other disposition of the Option
will cause the Option to terminate immediately upon the happening of any such
event; provided, however, that any such termination of the Option under the
foregoing provisions of this Section 5 will not prejudice any rights or remedies
which the Company or any Parent or Subsidiary may have under this Agreement or
otherwise.
6. EXERCISE UPON CESSATION OF EMPLOYMENT. (a) If the Employee at
any time ceases to be an employee of the Company and of any Parent or Subsidiary
(i) by reason of his discharge for Good Cause or (ii) due to his voluntary
termination of employment without the written consent of the Committee, the
Option shall, at the time of such termination of employment, terminate and the
Employee shall forfeit all rights hereunder. If, however, the Employee for any
other reason (other than Disability or death) ceases to be such an Employee, the
Option may, subject to the provisions of Section 5 hereof, be exercised by the
Employee to the same extent the Employee would have been entitled under Section
3 hereof to exercise the Option immediately prior to such cessation of
employment, at any time within [________DAYS/MONTHS/YEARS] after such cessation
of employment, at the end of which period the Option, to the extent not then
exercised, shall terminate and the Employee shall forfeit all rights hereunder,
even if the Employee subsequently returns to the employ of the Company or any
Parent or Subsidiary. In no event, however, may the Option be exercised after
the expiration of the term provided in Section 4 hereof.
(b) The Option shall not be affected by any change of duties
or position of
<PAGE>
the Employee so long as he continues to be an a full-time employee of the
Company or of any Parent or Subsidiary thereof. If the Employee is granted a
temporary leave of absence, such leave of absence shall be deemed a continuation
of his employment by the Company or of any Parent or Subsidiary thereof for the
purposes of this Agreement, but only if and so long as the employing corporation
consents thereto.
7. EXERCISE UPON DEATH OR DISABILITY. (a) If the Employee dies
while he is employed by the Company or by any Parent or Subsidiary, [AND ON OR
AFTER THE FIRST DATE UPON WHICH HE WOULD HAVE BEEN ENTITLED TO EXERCISE THE
OPTION UNDER THE PROVISIONS OF SECTION 3 HEREOF], the Option may, subject to the
provisions of Section 5 hereof, be exercised [WITH RESPECT TO ALL OR ANY PART OF
THE SHARES OF COMMON STOCK AS TO WHICH THE DECEASED EMPLOYEE HAD NOT EXERCISED
THE OPTION AT THE TIME OF HIS DEATH (REGARDLESS OF WHETHER THE OPTION WAS FULLY
EXERCISABLE AT SUCH TIME)] [(TO THE SAME EXTENT THE EMPLOYEE WOULD HAVE BEEN
ENTITLED UNDER SECTION 3 HEREOF TO EXERCISE THE OPTION IMMEDIATELY PRIOR TO HIS
DEATH)], by the estate of the Employee (or by the person or persons who acquire
the right to exercise the Option by written designation of the Employee) at any
time within [________ DAYS/MONTHS/YEARS] after the death of the Employee, at the
end of which period the Option, to the extent not then exercised, shall
terminate and the estate or other beneficiaries shall forfeit all rights
hereunder. In no event, however, may the Option be exercised after the
expiration of the term provided in Section 4 hereof.
(b) In the event that the employment of the Employee by the
Company and any Parent or Subsidiary is terminated by reason of the Disability
of the Employee [AND ON OR AFTER THE FIRST DATE UPON WHICH HE WOULD HAVE BEEN
ENTITLED TO EXERCISE THE OPTION UNDER THE PROVISIONS OF SECTION 3 HEREOF], the
Option may, subject to the provisions of Section 5 hereof, be exercised [WITH
RESPECT TO ALL OR ANY PART OF THE SHARES OF COMMON STOCK AS TO WHICH HE HAD NOT
EXERCISED THE OPTION AT THE TIME OF HIS DISABILITY OR RETIREMENT (REGARDLESS OF
WHETHER THE OPTION WAS FULLY EXERCISABLE AT SUCH TIME)] [(TO THE SAME EXTENT THE
EMPLOYEE WOULD HAVE BEEN ENTITLED UNDER SECTION 3 HEREOF TO EXERCISE THE OPTION
IMMEDIATELY PRIOR TO HIS EMPLOYMENT TERMINATION DUE TO DISABILITY)] by the
Employee within the period ending [________ DAYS/MONTHS/YEARS] after the date of
such termination of employment, at the end of which period the Option, to the
extent not then exercised, shall terminate and the Employee shall forfeit all
rights hereunder even if the Employee subsequently returns to the employ of the
Company or any Parent or Subsidiary. In no event, however, may the Option be
exercised after the expiration of the term provided in Section 4 hereof.
8. REGISTRATION. At the time of issuance, the shares of Common
Stock subject hereto and issuable upon the exercise hereof may not be registered
under the Securities Act of 1933, as amended, and, if required upon the request
of counsel to the Company, the Employee will give a representation as to his
investment intent with respect to such shares prior to their issuance as set
forth in Section 9 hereof. The Company may register or qualify the shares
covered by the Option for sale pursuant to the Securities Act of 1933, as
amended, at any time prior to or after the exercise in whole or in part of the
Option.
9. METHOD OF EXERCISE OF OPTION. (a) Subject to the terms and
conditions of this Agreement, the Option shall be exercisable by notice in the
manner set forth in Exhibit A hereto (the
<PAGE>
"Notice") and provision for payment to the Company in accordance with the
procedure prescribed herein. Each such Notice shall:
(i) state the election to exercise the Option and the number
of Shares with respect to which it is being exercised;
(ii) contain a representation and agreement as to investment
intent, if required by counsel to the Company with respect to such Shares,
in a form satisfactory to counsel to the Company;
(iii) be signed by the Employee or the person or persons
entitled to exercise the Option and, if the Option is being exercised by
any person or persons other than the Employee, be accompanied by proof,
satisfactory to counsel to the Company, of the right of such other person
or persons to exercise the Option;
(iv) include payment of the full purchase price for the shares
of Common Stock to be purchased pursuant to such exercise of the Option;
and
(v) be received by the Company on or before the date of the
expiration of this Option. In the event the date of expiration of this
Option falls on a day which is not a regular business day at the Company's
executive office in [CITY/STATE] then such written Notice must be received
at such office on or before the last regular business day prior to such
date of expiration.
(b) Payment of the purchase price of any shares of Common
Stock, in respect of which the Option shall be exercised, shall be made by the
Employee or such person or persons at the place specified by the Company on the
date the Notice is received by the Company (i) by delivering to the Company a
certified or bank cashier's check payable to the order of the Company, (ii) if
consented to by the Company in writing, by delivering to the Company properly
endorsed certificates of shares of Common Stock (or certificates accompanied by
an appropriate stock power) with signature guaranties by a bank or trust
company, (iii) by having withheld from the total number of shares of Common
Stock to be acquired upon the exercise of this Option a specified number of such
shares of Common Stock, (iv) by any form of "cashless" exercise or (v) by any
combination of the foregoing. [FOR PURPOSES OF THE IMMEDIATELY PRECEDING
SENTENCE, AN EXERCISE EFFECTED BY THE TENDER OF COMMON STOCK (OR DEEMED TO BE
EFFECTED BY THE TENDER OF COMMON STOCK) MAY BE CONSUMMATED ONLY WITH COMMON
STOCK (I) HELD BY THE EMPLOYEE FOR SIX (6) MONTHS OR (II) ACQUIRED BY THE
EMPLOYEE OTHER THAN UNDER THE PLAN (OR A SIMILAR PLAN MAINTAINED BY THE
COMPANY).]
(c) The Option shall be deemed to have been exercised with
respect to any particular shares of Common Stock if, and only if, the preceding
provisions of this Section 9 and the provisions of Section 10 hereof shall have
been complied with, in which event the Option shall be deemed to have been
exercised on the date the Notice and related payment were received by the
Company. Anything in this Agreement to the contrary notwithstanding, any Notice
given pursuant to the provisions of this
<PAGE>
Section 9 shall be void and of no effect if all of the preceding provisions of
this Section 9 and the provisions of Section 10 shall not have been complied
with.
(d) The certificate or certificates for shares of Common
Stock as to which the Option shall be exercised will be registered in the name
of the Employee (or in the name of the Employee's estate or other beneficiary if
the Option is exercised after the Employee's death), or if the Option is
exercised by the Employee and if the Employee so requests in the notice
exercising the Option, will be registered in the name of the Employee and
another person jointly, with right of survivorship and will be delivered as soon
as practical after the date the Notice is received by the Company (accompanied
by full payment of the exercise price), but only upon compliance with all of the
provisions of this Agreement.
(e) If the Employee fails to accept delivery of and pay for
all or any part of the number of Shares specified in such Notice, his right to
exercise the Option with respect to such undelivered Shares may be terminated in
the sole discretion of the Committee. The Option may be exercised only with
respect to full Shares.
(f) The Company shall not be required to issue or deliver any
certificate or certificates for shares of its Common Stock purchased upon the
exercise of any part of the Option prior to the payment to the Company, upon its
demand, of any amount requested by the Company for the purpose of satisfying its
liability, if any, to withhold federal, state or local income or earnings tax or
any other applicable tax or assessment (plus interest or penalties thereon, if
any, caused by a delay in making such payment) incurred by reason of the
exercise of this Option or the transfer of shares thereupon. Such payment shall
be made by the Employee in cash or, with the written consent of the Company, by
tendering to the Company shares of Common Stock equal in value to the amount of
the required withholding. In the alternative, the Company may, at its option,
satisfy such withholding requirements by withholding from the shares of Common
Stock to be delivered to the Employee pursuant to an exercise of the Option a
number of shares of Common Stock equal in value to the amount of the required
withholding.
10. APPROVAL OF COUNSEL. The exercise of the Option and the issuance
and delivery of shares of Common Stock pursuant thereto shall be subject to
approval by the Company's counsel of all legal matters in connection therewith,
including, but not limited to, compliance with the requirements of the
Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder, and the requirements of any
stock exchange or automated trading medium upon which the Common Stock may then
be listed or traded.
11. RESALE OF COMMON STOCK. (a) If so requested by the Company,
upon any sale or transfer of the Common Stock purchased upon exercise of the
Option, the Employee shall deliver to the Company an opinion of counsel
satisfactory to the Company to the effect that either (i) the Common Stock to be
sold or transferred has been registered under the Securities Act of 1933, as
amended, and that there is in effect a current prospectus meeting the
requirements of Section 10(a) of said Act which is being or will be delivered to
the purchaser or transferee at or prior to the time of delivery of the
certificates evidencing the Common Stock to be sold or transferred, or (ii) such
Common Stock may then be sold without violating Section 5 of said Act.
<PAGE>
(b) The Common Stock issued upon exercise of the Option shall
bear the following (or similar) legend if required by counsel for the Company:
THE SHARES EVIDENCED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS THEY HAVE FIRST
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
UNLESS, IN THE OPINION OF COUNSEL FOR THE COMPANY, SUCH REGISTRATION
IS NOT REQUIRED.
12. RESERVATION OF SHARES. The Company shall at all times during the
term of the Option reserve and keep available such number of shares of the
Common Stock as will be sufficient to satisfy the requirements of this
Agreement.
13. LIMITATION OF ACTION. The Employee and the Company each
acknowledges that every right of action accruing to him or it, as the case may
be, and arising out of or in connection with this Agreement against the Company
or a Parent or Subsidiary, on the one hand, or against the Employee, on the
other hand, shall, irrespective of the place where an action may be brought,
cease and be barred by the expiration of three years from the date of the act or
omission in respect of which such right of action arises.
14. NOTICES. Each notice relating to this Agreement shall be in
writing and delivered in person, by recognized overnight carrier or by certified
mail to the proper address. All notices to the Company or the Committee shall
be addressed to them at [ADDRESS], Attn: [OFFICER]. All notices to the
Employee shall be addressed to the Employee or such other person or persons at
the Employee's address above specified. Anyone to whom a notice may be given
under this Agreement may designate a new address by notice to that effect.
15. BENEFITS OF AGREEMENT. This Agreement shall inure to the benefit
of the Company, the Employee and their respective heirs, executors,
administrators, personal representatives, successors and assigns.
16. SEVERABILITY. In the event that any one or more provisions of
this Agreement shall be deemed to be illegal or unenforceable, such illegality
or unenforceability shall not affect the validity and enforceability of the
remaining legal and enforceable provisions hereof, which shall be construed as
if such illegal or unenforceable provision or provisions had not been inserted.
17. GOVERNING LAW. This Agreement will be construed and governed in
accordance with the laws of the State of Delaware.
18. EMPLOYMENT. Nothing contained in this Agreement shall be
construed as (a) a contract of employment between the Employee and the Company
or any Parent or Subsidiary, (b) as a
<PAGE>
right of the Employee to be continued in the employ of the Company or of any
Parent or Subsidiary, or (c) as a limitation of the right of the Company or of
any Parent or Subsidiary to discharge the Employee at any time, with or without
cause (subject to any applicable employment agreement).
19. DEFINITIONS. Unless otherwise defined herein, all capitalized
terms used in this Agreement shall have the same definitions as set forth in the
Plan.
20. INCORPORATION OF TERMS OF PLAN. This Agreement shall be
interpreted under, and subject to, all of the terms and provisions of the Plan,
which are incorporated herein by reference.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Date of Grant set forth above.
[ ]
By:________________________________
Name:
Title:
___________________________________
[Name of Employee]
___________________________________
Social Security Number
ATTEST:
_________________________
<PAGE>
EXHIBIT A
NON-QUALIFIED STOCK OPTION EXERCISE FORM
[DATE]
[Company Name]
[Address]
[City, State and Zip Code]
Attention: [OFFICER]
Dear Sirs:
Pursuant to the provisions of the Non-Qualified Stock Option Agreement
dated [ ] (the "Agreement"), whereby you have granted to me a Non-Qualified
Option (the "Option") to purchase up to [ ] shares of the Common Stock of [
] (the "Company") subject to the terms of the Agreement, I hereby notify you
that I elect to exercise my option to purchase [ ] of the shares of Common
Stock covered by such Option at the [$___] per share price specified therein.
In full payment of the price for the shares being purchased hereby, I am
delivering to you herewith (i) certified or bank cashier's check payable to the
order of the Company in the amount of $____________, $_____________ of
this amount is the purchase price of the shares, and the balance represents
payment of withholding taxes as follows: Federal $_____________, State
$_________ and Local $_______. or (ii) a certificate or certificates for [
] shares of Common Stock of the Company, and which have a fair market value as
of the date hereof of $___________, [and a certified or bank cashier's check,
payable to the order of the Company, in the amount of $________________].(1)
or (ii) a certificate or certificates for [ ] shares of Common Stock of
the Company, and which have a fair market value as of the date hereof of
$___________, [and a certified or bank cashier's check, payable to the order of
the Company, in the amount of $________________].(2) Any such stock certificate
or certificates are endorsed, or accompanied by an appropriate stock power, to
the order of the Company, with my signature guaranteed by a bank or trust
company or by a member firm of the New York Stock Exchange. I hereby
acknowledge that I am purchasing these shares for investment purposes only and
not for resale in violation of any federal or state securities laws.
Very truly yours,
______________________________
[Address]
(For notices, reports, dividend checks and
other communications to stockholders.)
- -------------------
(1) $_____________ of this amount is the purchase price of the shares, and the
balance represents payment of withholding taxes as follows: Federal
$_____________, State $_________ and Local $_______.
(2) $_____________ of this amount is at least equal to the current market value
of one share of Common Stock of the Company, and the balance represents
payment of withholding taxes as follows: Federal $________, State $_______
and Local $______.
<PAGE>
Exhibit 4.5
COMMODORE APPLIED TECHNOLOGIES, INC.
1998 STOCK OPTION PLAN
_______________
AS AMENDED AND RESTATED EFFECTIVE AS OF DECEMBER 15, 1998
<PAGE>
COMMODORE APPLIED TECHNOLOGIES, INC.
1998 STOCK OPTION PLAN
INTRODUCTION
Commodore Applied Technologies, Inc., a Delaware corporation
(hereinafter referred to as the "Corporation"), hereby establishes an incentive
compensation plan to be known as the "COMMODORE APPLIED TECHNOLOGIES, INC. 1998
STOCK OPTION PLAN" (hereinafter referred to as the "Plan"), as set forth in this
document. The Plan permits the grant of Non-Qualified Stock Options.
The Plan became effective on December 15, 1998 and was Amended and
Restated as of such date.
The purpose of the Plan is to promote the success and enhance the
value of the Corporation by linking the personal interests of Participants to
those of the Corporation's stockholders by providing Participants with an
incentive for outstanding performance. The Plan is further intended to assist
the Corporation in its ability to motivate, and retain the services of,
Participants upon whose judgment, interest and special effort the successful
conduct of its and its subsidiaries' operations is largely dependent.
<PAGE>
DEFINITIONS
For purposes of this Plan, the following terms shall be defined as follows
unless the context clearly indicates otherwise:
(a) "AWARD AGREEMENT" shall mean the written agreement, executed by an
appropriate officer of the Corporation, pursuant to which a Plan Award is
granted.
(b) "BOARD OF DIRECTORS" shall mean the Board of Directors of the
Corporation.
(c) "CODE" shall mean the Internal Revenue Code of 1986, as amended, and
the rules and regulations thereunder.
(d) "COMMITTEE" shall mean the Board of Directors of the Corporation or
any committee of two or more persons designated by the Board of Directors to
serve as the Committee.
(e) "COMMON STOCK" shall mean the common stock, par value $0.001 per
share, of the Corporation.
(f) "CONSULTANT" shall mean an individual who is in a Consulting
Relationship with the Corporation or any Parent or Subsidiary.
(g) "CONSULTING RELATIONSHIP" shall mean the relationship that exists
between an individual and the Corporation (or any Parent or Subsidiary) if (i)
such individual or (ii) any entity of which such individual is an executive
officer or owns a substantial equity interest has entered into a written
consulting contract with the Corporation or any Parent or Subsidiary.
(h) "CORPORATION" shall mean Commodore Applied Technologies, Inc., a
Delaware corporation.
(i) "DISABILITY" shall have the same meaning as the term "permanent and
total disability" under Section 22(e)(3) of the Code.
(j) "EMPLOYEE" shall mean a common-law employee of the Corporation or of
any Parent or Subsidiary.
(k) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder.
(l) "FAIR MARKET VALUE" of the Corporation's Common Stock on a Trading Day
shall mean the last reported sale price for Common Stock or, in case no such
reported sale takes place on such Trading Day, the average of the closing bid
and asked prices for the Common Stock for such Trading Day, in either case on
the principal national securities exchange on which the Common Stock is listed
or admitted to trading, or if the Common Stock is not listed or admitted to
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<PAGE>
trading on any national securities exchange, but is traded in the
over-the-counter market, the closing sale price of the Common Stock or, if no
sale is publicly reported, the average of the closing bid and asked quotations
for the Common Stock, as reported by the National Association of Securities
Dealers Automated Quotation System ("NASDAQ") or any comparable system or, if
the Common Stock is not listed on NASDAQ or a comparable system, the closing
sale price of the Common Stock or, if no sale is publicly reported, the average
of the closing bid and asked prices, as furnished by two members of the National
Association of Securities Dealers, Inc. who make a market in the Common Stock
selected from time to time by the Corporation for that purpose. In addition,
for purposes of this definition, a "Trading Day" shall mean, if the Common Stock
is listed on any national securities exchange, a business day during which such
exchange was open for trading and at least one trade of Common Stock was
effected on such exchange on such business day, or, if the Common Stock is not
listed on any national securities exchange but is traded in the over-the-counter
market, a business day during which the over-the-counter market was open for
trading and at least one "eligible dealer" quoted both a bid and asked price for
the Common Stock. An "eligible dealer" for any day shall include any
broker-dealer who quoted both a bid and asked price for such day, but shall not
include any broker-dealer who quoted only a bid or only an asked price for such
day. In the event the Corporation's Common Stock is not publicly traded, the
Fair Market Value of such Common Stock shall be determined by the Committee in
good faith.
(m) "GOOD CAUSE" shall have the equivalent meaning (or the same
meaning as "cause" or "for cause") set forth in any employment agreement between
the Participant and the Corporation or Parent or Subsidiary or, in the absence
of any such agreement, such term shall mean (i) the Participant's willful or
gross misconduct or willful or gross negligence in the performance of his duties
for the Corporation or for any Parent or Subsidiary after prior written notice
of such misconduct or negligence and the continuance thereof for a period of 30
days after receipt by such Participant of such notice, (ii) the Participant's
intentional or habitual neglect of his duties for the Corporation or for any
Parent or Subsidiary after prior written notice of such neglect, (iii) the
Participant's theft or misappropriation of funds of the Corporation or of any
Parent or Subsidiary, fraud, criminal misconduct, breach of fiduciary duty or
dishonesty in the performance of his duties on behalf of the Corporation or any
Parent or Subsidiary or commission of a felony, or crime of moral turpitude or
any other conduct reflecting adversely upon the Corporation or any Parent or
Subsidiary, (iv) the Participant's violation of any covenant not to compete or
not to disclose confidential information with respect to the Corporation or (v)
the direct or indirect breach by the Participant of the terms of a related
consulting contract with the Corporation or any Parent or Subsidiary.
(n) "GOOD REASON" shall have the meaning set forth in any employment
contract between the Employee and the Corporation (or any Parent or Subsidiary)
of such term (or of Constructive Termination, Constructive Discharge or similar
term) or, in the event there is no such contract (or no such term set forth in
any such contract), the definition (if any) set forth in the appropriate Plan
Award.
(o) "NON-QUALIFIED OPTION" shall mean a stock option which does not
satisfy the requirements for, or which is not intended to be eligible for,
tax-favored treatment under Section
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<PAGE>
422 of the Code.
(p) "OPTION" shall mean a Non-Qualified Stock Option granted pursuant
to the provisions of Section VI hereof.
(q) "OPTIONEE" shall mean a Participant who is granted an Option
under the terms of this Plan.
(r) "PARENT" shall mean a corporation which directly or indirectly
owns more than fifty percent (50%) of the Corporation's outstanding Common
Stock.
(s) "PARTICIPANT" shall mean any Employee or other person
participating under the Plan.
(t) "PLAN AWARD" shall mean an Option granted pursuant to the terms
of this Plan.
(u) "SECURITIES ACT" shall mean the Securities Act of 1933, as
amended, and the rules and regulations thereunder.
(v) "SUBSIDIARY" shall mean a corporation of which more than fifty
percent (50%) of its outstanding voting common stock is directly or indirectly
owned by the Corporation.
(w) "TERMINATION OF CONSULTING RELATIONSHIP" shall mean the
cessation, abridgment or termination of a Consultant's Consulting Relationship
with the Corporation or any Parent or Subsidiary as a result of (i) the
Consultant's death or Disability, (ii) the cancellation, annulment, expiration,
termination or breach of the written consulting contract between the Corporation
(or any Parent or Subsidiary) and the Consultant (or any other entity) giving
rise to the Consulting Relationship or (iii) if the written consulting contract
is not directly between the Corporation (or any Parent or Subsidiary) and the
Consultant, the Consultant's termination of service with, or sale of all or
substantially all of his equity interest in, the entity which has entered into
the written consulting contract with the Corporation, Parent or Subsidiary.
-4-
<PAGE>
II
ADMINISTRATION
The Plan shall be administered by the Committee, which shall be
composed of the entire Board of Directors or of two or more Non-Employee
Directors, as defined in Rule 16b-3(b)(3) promulgated under the Exchange Act.
Subject to the provisions of the Plan, the Committee may establish from time to
time such regulations, provisions, proceedings and conditions of awards which,
in its sole opinion, may be advisable in the administration of the Plan. A
majority of the Committee shall constitute a quorum, and, subject to the
provisions of Section V of the Plan, the acts of a majority of the members
present at any meeting at which a quorum is present, or acts approved in writing
by all of the members of the Committee, shall be the acts of the Committee as a
whole.
III
SHARES AVAILABLE
Subject to the adjustments provided in Section VII of the Plan, the
aggregate number of shares of the Common Stock which may be granted for all
purposes under the Plan shall be Five Million (5,000,000) shares. Shares of
Common Stock underlying awards of securities (derivative or not) shall be
counted against the limitation set forth in the immediately preceding
sentence and may be reused to the extent that the related Plan Award to any
individual is settled in cash, expires, is terminated unexercised, or is
forfeited. Common Stock granted to satisfy Plan Awards under the Plan may
be authorized and unissued shares of the Common Stock, issued shares of such
Common Stock held in the Corporation's treasury or shares of Common Stock
acquired on the open market.
IV
ELIGIBILITY
Officers and key employees of the Corporation, or of any Parent or
Subsidiary, who are regularly employed on a salaried basis as common law
employees, and Consultants and directors of the Corporation or of any Parent or
Subsidiary who are not Employees, shall be eligible to participate in the Plan.
Where appropriate under this Plan, directors who are not Employees shall be
referred to as "employees" and their service as directors as "employment".
V
AUTHORITY OF COMMITTEE
The Plan shall be administered by, or under the direction of, the
Committee, which shall administer the Plan so as to comply at all times with
Section 16 of the Exchange Act and the rules and regulations promulgated
thereunder, to the extent such compliance is required, and shall otherwise have
plenary authority to interpret the Plan and to make all determinations specified
in or permitted by the Plan or deemed necessary or desirable for its
administration or for the conduct of the Committee's business. All
interpretations and determinations of the Committee may be made
-5-
<PAGE>
on an individual or group basis and shall be final, conclusive and binding on
all interested parties. Subject to the express provisions of the Plan, the
Committee shall have authority, in its discretion, to determine the persons to
whom Plan Awards shall be granted, the times when such Plan Awards shall be
granted, the number of Plan Awards, the exercise price of each Plan Award, the
period(s) during which a Plan Award shall be exercisable (whether in whole or in
part), the restrictions to be applicable to Plan Awards and the other terms and
provisions thereof (which need not be identical). In addition, the authority of
the Committee shall include, without limitation, the following:
(a) FINANCING. The arrangement of temporary financing for an Optionee by
registered broker-dealers, under the rules and regulations of the Federal
Reserve Board, for the purpose of assisting an Optionee in the exercise of an
Option, such authority to include the payment by the Corporation of the
commissions of the broker-dealer;
(b) PROCEDURES FOR EXERCISE OF OPTION. The establishment of procedures
for an Optionee (i) to exercise an Option by payment of cash, (ii) to have
withheld from the total number of shares of Common Stock to be acquired upon the
exercise of an Option that number of shares having a Fair Market Value, which,
together with such cash as shall be paid in respect of fractional shares, shall
equal the Option exercise price of the total number of shares of Common Stock to
be acquired, (iii) to exercise all or a portion of an Option by delivering that
number of shares of Common Stock already owned by him having a Fair Market Value
which shall equal the Option exercise price for the portion exercised and, in
cases where an Option is not exercised in its entirety, and subject to the
requirements of the Code, to permit the Optionee to deliver the shares of Common
Stock thus acquired by him in payment of shares of Common Stock to be received
pursuant to the exercise of additional portions of such Option, the effect of
which shall be that an Optionee can in sequence utilize such newly acquired
shares of Common Stock in payment of the exercise price of the entire Option,
together with such cash as shall be paid in respect of fractional shares and
(iv) to engage in any form of "cashless" exercise. The Committee may, in its
sole discretion, require that an exercise described under any one or more or the
methods described under clauses (ii), (iii) or (iv) of the immediately preceding
sentence (to the extent such exercise is, or is deemed to constitute, an
exercise effected by the tendering of Common Stock) be consummated with Common
Stock (i) held by the Optionee for at least six (6) months or (ii) acquired by
the Optionee other than under this Plan or a similar program.
(c) WITHHOLDING. The establishment of a procedure whereby a number of
shares of Common Stock may be withheld from the total number of shares of Common
Stock to be issued upon exercise of an Option or for the tender of shares of
Common Stock owned by any Participant to meet any obligation of withholding for
taxes incurred by the Participant upon such exercise. The Committee may, in its
sole discretion, require that if any such withholding is effected by the
tendering of Common Stock, such withholding shall be consummated with Common
Stock (i) held by the Optionee for at least six (6) months or (ii) acquired by
the Optionee other than under this Plan or a similar program.
VI
STOCK OPTIONS
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<PAGE>
The Committee shall have the authority, in its discretion, to grant
Non-Qualified Stock Options. The terms and conditions of the Options shall be
determined from time to time by the Committee; PROVIDED, HOWEVER, that the
Options granted under the Plan shall be subject to the following:
(a) EXERCISE PRICE. The Committee shall establish the exercise price at
the time any Option is granted at such amount as the Committee shall determine.
The exercise price will be subject to adjustment in accordance with the
provisions of Section VII of the Plan.
(b) PAYMENT OF EXERCISE PRICE. The exercise price per share of Common
Stock with respect to each Option shall be payable at the time the Option is
exercised. Such price shall be payable in cash or pursuant to any of the other
methods set forth in Sections V(a) or (b) hereof, as determined by the
Committee. Shares of Common Stock delivered to the Corporation in payment of
the exercise price shall be valued at the Fair Market Value of the Common Stock
on the date preceding the date of the exercise of the Option.
(c) EXERCISABILITY OF OPTIONS. Except as provided in Section VI(e)
hereof, each Option shall be exercisable in whole or in installments, and at
such time(s), and subject to the fulfillment of any conditions on, and to any
limitations on, exercisability as may be determined by the Committee at the time
of the grant of such Options. The right to purchase shares of Common Stock
shall be cumulative so that when the right to purchase any shares of Common
Stock has accrued such shares of Common Stock or any part thereof may be
purchased at any time thereafter until the expiration or termination of the
Option.
(d) EXERCISE UPON OPTIONEE'S TERMINATION OF EMPLOYMENT OR TERMINATION OF
CONSULTING RELATIONSHIP. For purposes of determining whether any Optionee has
incurred a termination of employment (or a Termination of Consulting
Relationship), an Optionee who is both an employee (or a Consultant) and a
director of the Corporation and/or any Parent or Subsidiary shall be considered
to have incurred a termination of employment (or a Termination of Consulting
Relationship) only upon his termination of service both as an employee (or as a
Consultant) and as a director. Furthermore, (i) if an Optionee's employment (or
Consulting Relationship) is terminated by the Corporation or by any Parent or
Subsidiary for Good Cause or (ii) if an Optionee voluntarily terminates his
employment other than for Good Reason or Disability or without the written
consent of the Committee (or incurs a voluntary Termination of Consulting
Relationship other than for Disability), regardless of whether such Optionee
continues to serve as a director of the Corporation or of any Parent or
Subsidiary, then the Optionee shall, at the time of such termination of
employment (or Termination of Consulting Relationship), forfeit his rights to
exercise any and all of the outstanding Option(s) theretofore granted to him.
(e) DIVIDEND EQUIVALENTS FOR OUTSTANDING OPTIONS. The Committee may, in
its sole discretion, provide that amounts equivalent to dividends shall be
payable with respect to one or more shares of Common Stock subject to vested but
unexercised Option(s) granted to a Participant. Subject to the terms contained
in the appropriate Plan Award, dividend equivalents related to a
-7-
<PAGE>
Participant's Options(s) shall be credited to a suspense account (and remain the
property of the Corporation) at such times (and in such amounts) as are
dividends payable to the then shareholders of record of the Corporation's Common
Stock. Dividend equivalents shall be payable to the Participant in cash or in
Common Stock, as set forth under the terms of the Plan Award, if and at such
time as the related Option(s) are exercised.
VII
ADJUSTMENT OF SHARES; MERGER OR
CONSOLIDATION, ETC. OF THE CORPORATION
(a) RECAPITALIZATION, ETC. In the event there is any change in the
outstanding Common Stock of the Corporation by reason of any reorganization,
recapitalization, stock split, stock dividend, combination of shares or
otherwise, there shall be substituted for or added to each share of Common Stock
theretofore appropriated or thereafter subject, or which may become subject, to
any Option, the number and kind of shares of stock or other securities into
which each outstanding share of Common Stock shall be so changed or for which
each such share shall be exchanged, or to which each such share shall be
entitled, as the case may be, and the per share price thereof also shall be
appropriately adjusted.
(b) MERGER, CONSOLIDATION OR CHANGE IN CONTROL OF CORPORATION. Upon (i)
the merger or consolidation of the Corporation with or into another corporation
(pursuant to which the stockholders of the Corporation immediately prior to such
merger or consolidation will not, as of the date of such merger or
consolidation, own a beneficial interest in shares of voting securities of the
corporation surviving such merger or consolidation having at least a majority of
the combined voting power of such corporation's then outstanding securities), if
the agreement of merger or consolidation does not provide for (1) the
continuance of the Options granted hereunder or (2) the substitution of new
options for Options granted hereunder, or for the assumption of such Options by
the surviving corporation, (ii) the dissolution, liquidation, or sale of all or
substantially all the assets of the Corporation to a person unrelated to the
Corporation or to a direct or indirect owner of a majority of the voting power
of the Corporation's then outstanding voting securities (such sale of assets
being referred to as an "Asset Sale") or (iii) the Change in Control of the
Corporation, then, subject to the determination of the Board of Directors, the
holder of any such Option theretofore granted and still outstanding (and not
otherwise expired) shall have the right immediately prior to the effective date
of such merger, consolidation, dissolution, liquidation, Asset Sale or Change in
Control of the Corporation to exercise such Option(s) in whole or in part
without regard to any installment provision that may have been made part of the
terms and conditions of such Option(s); provided that all conditions precedent
to the exercise of such Option(s), other than the passage of time, have
occurred. The Corporation, to the extent practicable, shall give advance notice
to affected Optionees of such merger, consolidation, dissolution, liquidation,
Asset Sale or Change in Control of the Corporation. Unless otherwise provided in
the subject Award Agreement or merger, consolidation or Asset Sale agreement,
all such Options which are not so exercised shall be forfeited as of the
effective time of such merger, consolidation, dissolution, liquidation or Asset
Sale (but not in the case of a Change in Control of the Corporation). In the
event the Corporation becomes a subsidiary of another corporation (the "New
Parent Corporation") with respect to which the stockholders of the Corporation
(as determined immediately before such transaction)
-8-
<PAGE>
own, immediately after such transaction, a beneficial interest in shares of
voting securities of the New Parent Corporation having at least a majority of
the combined voting power of such New Parent Corporation's then outstanding
securities, there shall be substituted for Options granted hereunder, options to
purchase common stock of the Parent Corporation.
(c) DEFINITION OF CHANGE IN CONTROL OF THE CORPORATION. As used
herein, a "Change in Control of the Corporation" shall be deemed to have
occurred if any person (including any individual, firm, partnership or other
entity) together with all Affiliates and Associates (as defined under Rule 12b-2
of the General Rules and Regulations promulgated under the Exchange Act) of such
person (but excluding (i) a trustee or other fiduciary holding securities under
an employee benefit plan of the Corporation or any subsidiary of the
Corporation, (ii) a corporation owned, directly or indirectly, by the
stockholders of the Corporation in substantially the same proportions as their
ownership of the Corporation, (iii) the Corporation or any subsidiary of the
Corporation or (iv) only as provided in the immediately following sentence, a
Participant together with all Affiliates and Associates of the Participant) who
is not a stockholder or an Affiliate or Associate of a stockholder of the
Corporation on the date of stockholder approval of the Plan is or becomes the
Beneficial Owner (as defined in Rule 13d-3 promulgated under the Exchange Act),
directly or indirectly, of securities of the Corporation representing 30% or
more of the combined voting power of the Corporation's then outstanding
securities. The provisions of clause (iv) of the immediately preceding sentence
shall apply only with respect to the Option(s) held by the Participant who,
together with his Affiliates or Associates, if any, is or becomes the direct or
indirect Beneficial Owner of the percentage of securities set forth in such
clause.
VIII
MISCELLANEOUS PROVISIONS
(a) ADMINISTRATIVE PROCEDURES. The Committee may establish any procedures
determined by it to be appropriate in discharging its responsibilities under the
Plan. All actions and decisions of the Committee shall be final.
(b) ASSIGNMENT OR TRANSFER. No grant or award of any Plan Award or any
rights or interests therein shall be assignable or transferable by a Participant
except (i) by will or the laws of descent and distribution, (ii) pursuant to a
domestic relations order or (iii) to the Participant's spouse or children.
(c) INVESTMENT REPRESENTATION. With respect to shares of Common Stock
received pursuant to the exercise of an Option, the Committee may require, as a
condition of receiving such securities, that the Participant furnish to the
Corporation such written representations and information as the Committee deems
appropriate to permit the Corporation, in light of the existence or nonexistence
of an effective registration statement under the Securities Act, to deliver such
securities in compliance with the provisions of the Securities Act.
(d) WITHHOLDING TAXES. In the case of the issuance or distribution of
Common Stock or other securities hereunder upon the exercise of any Plan Award
the Corporation, as a
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condition of such issuance or distribution, may require the payment (through
withholding from the Participant's salary, reduction of the number of shares of
Common Stock or other securities to be issued, or otherwise) of any federal,
state, local or foreign taxes required to be withheld. Each Participant may
satisfy the withholding obligations by paying to the Corporation a cash amount
equal to the amount required to be withheld or, subject to the Committee's
consent thereto, by tendering to the Corporation a number of shares of Common
Stock having a value equivalent to such cash amount, or by use of any available
procedure approved by the Committee as described under Section V(c) hereof.
(e) COSTS AND EXPENSES. The costs and expenses of administering the Plan
shall be borne by the Corporation and shall not be charged against any award nor
to any employee receiving a Plan Award.
(f) FUNDING OF PLAN. The Plan shall be unfunded. The Corporation shall
not be required to segregate any of its assets to assure the payment of any Plan
Award under the Plan. Neither the Participants nor any other persons shall have
any interest in any fund or in any specific asset or assets of the Corporation
or any other entity by reason of any Plan Award, except to the extent expressly
provided hereunder. The interests of each Participant and former Participant
hereunder are unsecured and shall be subject to the general creditors of the
Corporation.
(g) OTHER INCENTIVE PLANS. The adoption of the Plan does not preclude the
adoption by appropriate means of any other incentive plan for employees.
(h) PLURALS AND GENDER. Where appearing in this Plan, masculine gender
shall include the feminine and neuter genders, and the singular shall include
the plural, and vice versa, unless the context clearly indicates a different
meaning.
(i) HEADINGS. The headings and sub-headings in this Plan are inserted for
the convenience of reference only and are to be ignored in any construction of
the provisions hereof.
(j) SEVERABILITY. In case any provision of this Plan shall be held
illegal or void, such illegality or invalidity shall not affect the remaining
provisions of this Plan, but shall be fully severable, and the Plan shall be
construed and enforced as if said illegal or invalid provisions had never been
inserted herein.
(k) LIABILITY AND INDEMNIFICATION. (i) Neither the Corporation nor any
Parent or Subsidiary shall be responsible in any way for any action or omission
of the Committee, or any other fiduciaries in the performance of their duties
and obligations as set forth in this Plan. Furthermore, neither the Corporation
nor any Parent or Subsidiary shall be responsible for any act or omission of any
of their agents, or with respect to reliance upon advice of their counsel,
provided that the Corporation and/or the appropriate Parent or Subsidiary relied
in good faith upon the action of such agent or the advice of such counsel.
(ii) Neither the Corporation, any Parent or Subsidiary, the Committee,
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nor any agents, employees, officers, directors or shareholders of any of them,
nor any other person shall have any liability or responsibility with respect to
this Plan, except as expressly provided herein.
(l) INCAPACITY. If the Committee shall receive evidence satisfactory to
it that a person entitled to receive payment of, or exercise, any Plan Award is,
at the time when such benefit becomes payable or exercisable , a minor, or is
physically or mentally incompetent to receive such Plan Award and to give a
valid release thereof, and that another person or an institution is then
maintaining or has custody of such person and that no guardian, committee or
other representative of the estate of such person shall have been duly
appointed, the Committee may make payment of such Plan Award otherwise payable
to such person to (or permit such Plan Award to be exercised by) such other
person or institution, including a custodian under a Uniform Gifts to Minors
Act, or corresponding legislation (who shall be an adult, a guardian of the
minor or a trust company), and the release by such other person or institution
shall be a valid and complete discharge for the payment or exercise of such Plan
Award.
(m) COOPERATION OF PARTIES. All parties to this Plan and any person
claiming any interest hereunder agree to perform any and all acts and execute
any and all documents and papers which are necessary or desirable for carrying
out this Plan or any of its provisions.
(n) GOVERNING LAW. All questions pertaining to the validity, construction
and administration of the Plan shall be determined in accordance with the laws
of the State of Delaware
(o) NONGUARANTEE OF EMPLOYMENT OR CONSULTING RELATIONSHIP. Nothing
contained in this Plan shall be construed as a contract of employment (or as a
consulting contract) between the Corporation (or any Parent or Subsidiary), and
any employee or Participant, as a right of any employee or Participant to be
continued in the employment of (or in a Consulting Relationship with) the
Corporation (or any Parent or Subsidiary), or as a limitation on the right of
the Corporation or any Parent or Subsidiary to discharge any of its employees
(or Consultants), at any time, with or without cause (but subject to the terms
of any applicable employment or consulting agreement).
(p) NOTICES. Each notice relating to this Plan shall be in writing and
delivered in person, by recognized overnight courier or by certified mail to the
proper address. Except as otherwise provided in any Award Agreement with
respect to the exercise thereunder, all notices to the Corporation or the
Committee shall be addressed to it at 150 East 58th Street, Suite 3400, New
York, New York 10155, Attn: Chief Executive Officer. All notices to
Participants, former Participants, beneficiaries or other persons acting for or
on behalf of such persons shall be addressed to such person at the last address
for such person maintained in the Committee's records.
(q) WRITTEN AGREEMENTS. Each Plan Award shall be evidenced by a signed
written agreement (the "Award Agreements") between the Corporation and the
Participant containing the terms and conditions of the award.
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IX
AMENDMENT OR TERMINATION OF PLAN
The Board of Directors of the Corporation shall have the right to
amend, suspend or terminate the Plan at any time; provided, however that except
as otherwise provided herein, no amendment, suspension or termination of the
Plan shall alter or impair any Plan Award previously granted under the Plan
without the consent of the holder thereof.
X
TERM OF PLAN
The Plan shall automatically terminate on the day immediately
preceding the tenth (10th) anniversary of the date the Plan was adopted by the
Board of Directors of the Corporation, unless sooner terminated by such Board of
Directors. No Plan Awards may be granted under the Plan subsequent to the
termination of the Plan.
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EXHIBIT 5.1
[GREENBERG TRAURIG LETTERHEAD]
November 10, 1999
Commodore Applied Technologies, Inc.
150 East 58th Street, Suite 3400
New York, New York 10155
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as counsel to Commodore Applied Technologies, Inc., a
Delaware corporation (the "Company"), in connection with the preparation of a
Registration Statement on Form S-8 (the "Registration Statement") to be filed
under the Securities Act of 1933, as amended (the "Securities Act"), for the
registration of an aggregate of 5,000,000 shares (the "Shares") of the Company's
common stock, par value $.001 per share (the "Common Stock"), consisting of: (a)
3,426,412 shares of Common Stock issuable upon exercise of currently outstanding
options heretofore granted under the Commodore Applied Technologies, Inc. 1998
Stock Option Plan (the "Plan"); and (b) 1,573,588 shares of Common Stock
underlying options presently available to be granted under the Plan.
In connection with this opinion, we have examined the Registration
Statement, the Company's Certificate of Incorporation, By-laws and minutes, and
such other documents and records as we have deemed relevant. In our
examinations, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals, and the conformity
with the originals of all documents submitted to us as copies. In addition, we
have made such other examinations of law and of fact as we have deemed
appropriate in order to form a basis for the opinion hereinafter expressed.
With respect to the issuance of the Shares by the Company, we have
assumed that the Shares will be issued, and the certificates evidencing the same
will be duly delivered, in accordance with the respective terms of the Plan, and
against receipt of the consideration stipulated therefor, which will not be less
than the par value of the Shares.
Based on the foregoing, we are of the opinion that the Shares have been
duly authorized and, when issued and paid for in accordance with the foregoing
assumptions, will be validly issued, fully paid and non-assessable.
The opinion set forth above is limited to the Delaware General
Corporation Law, as amended.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving this opinion and consent, we do not thereby
admit that we are acting within the category of persons whose consent is
required under Section 7 of the Securities Act, or the rules and regulations of
the Securities and Exchange Commission promulgated thereunder.
Very truly yours,
/s/ GREENBERG TRAURIG
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of our report dated April 8, 1999 relating
to the financial statements (which contain an explanatory paragraph relating
to the Company's ability to continue as a going concern) which appear in
Commodore Applied Technologies, Inc.'s Annual Report on Form 10-K for the
year ended December 31, 1998. We also consent to the reference to us under
the heading "Experts" in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
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PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
November 10, 1999
