PROXY STATEMENT
PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. ______)
PROXY STATEMENT
Filed by the Registrant x
Filed by a Party other than the Registrant
Check the appropriate box:
_____ Preliminary Proxy Statement
_____ Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2)
x Definitive Proxy Statement
-----
_____ Definitive Additional Materials
_____ Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
TECHNICAL ENVIRONMENTAL SOLUTIONS, INC.
---------------------------------------
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
_____ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
_____ $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
_____ Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0- 11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
_____ Fee paid previously with preliminary materials.
_____ Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
TECHNICAL ENVIRONMENT SOLUTIONS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 21, 2000
NOTICE IS HEREBY GIVEN that the Annual Meeting (the "Annual Meeting") of
the shareholders (the "Shareholders") of Technical Environment Solutions, Inc.,
a Colorado corporation (the "Company"), will be held at 10:00 a.m. on August 21,
2000, at the Company's offices at 370 Seventeenth Street, Suite 4250, Denver,
Colorado 80202, and any adjournments or postponements thereof for the following
purposes:
1. To elect the following three (3) persons to serve as directors of the
Company until the next Annual Meeting of Shareholders and thereafter
until their successors shall have been elected and qualified: Gerd
Behrens, Frank Behrens, and Wolfgang Kleen;
2. To adopt an amendment ("Amendment") to the Company's Articles of
Incorporation, as amended, (the "Articles"), which would effect an
increase in the number of authorized shares of Common Stock from
20,000,000 shares to 80,000,000 shares, without having any effect upon
the authorized, issued and outstanding shares of Common Stock, and to
create a new class of the securities of the Company, consisting of
40,000,000 authorized shares of blank check Preferred Stock to be
issued by the Company's Board of Directors from time to time in
series;
3. To ratify the selection of Levine Hughes & Mithuen Inc. as the
independent public accountants of the Company for the fiscal year
ending December 31, 2000; and
4. To approve and adopt an Incentive Stock Option Plan of the Corporation
pursuant to which options to purchase Common Stock may be granted to
certain personnel of the Corporation.
5. To approve and adopt a Nonqualified Stock Option Plan of the
Corporation pursuant to Which options to purchase Common Stock may be
granted to certain personnel of the Corporation and others who are not
employed by the Corporation.
6. To consider and act upon such other business as may properly come
before the Annual Meeting or any adjournments thereof.
Only Shareholders of record at the close of business on July 6, 2000, shall
be entitled to notice of and to vote at the Annual Meeting or any adjournments
thereof. All Shareholders are cordially invited to attend the Annual Meeting in
person.
By Order of the Board of Directors
---------------------------------------
Gerd Behrens, Chairman of the Board
July 20, 2000
Munchen, Germany
IF YOU DO NOT EXPECT TO BE PRESENT AT THE ANNUAL MEETING AND WISH YOUR SHARES OF
COMMON STOCK TO BE VOTED, YOU ARE REQUESTED TO SIGN AND MAIL PROMPTLY THE
ENCLOSED PROXY WHICH IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. A
RETURN ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES, IS
ENCLOSED FOR THAT PURPOSE.
<PAGE>
TECHNICAL ENVIRONMENT SOLUTIONS, INC.
C/O TES Com GmbH, 25 Impler Strasse
Munchen, 81371, Germany
PROXY STATEMENT
Dated July 20, 2000
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 21, 2000
Throughout this document, we express monetary amounts in German Deutsche
Marks and United States Dollars. Unless specified otherwise, monetary amounts
expressed in German Deutsche Marks have been translated into, and
correspondingly expressed in, United States Dollars based upon the Noon Buying
Rate of the Federal Reserve Bank of New York on December 31 of the applicable
year. These translations are made solely for the convenience of the reader and
are not necessarily expressed in monetary amounts that would have resulted had
the exchange rate on the date of the actual transaction been used.
GENERAL
This Proxy Statement is being furnished to the shareholders of Technical
Environment Solutions, Inc., a Colorado corporation (the "Company"), in
connection with the solicitation of proxies by the Board of Directors of the
Company (the "Board of Directors") from holders (the "Shareholders") of
outstanding shares of common stock, no par value, of the Company (the "Common
Stock"), for use at the Annual Meeting of the Shareholders to be held at 10:00
a.m. on August 21, 2000, at the Company's offices at 370 Seventeenth Street,
Suite 4250, Denver, Colorado 80202, and any adjournments or postponements
thereof (the "Annual Meeting"). This Proxy Statement, Notice of Annual Meeting
of Shareholders and the accompanying Proxy Card are first being mailed to
shareholders on or about July 21, 2000.
VOTING SECURITIES AND VOTE REQUIRED
Only Shareholders of record at the close of business on July 6, 2000, (the
"Record Date") are entitled to notice of and to vote the shares of Common Stock,
no par value, of the Company held by them on such date at the Annual Meeting or
any and all adjournments thereof. As of the Record Date, 17,938,075 shares of
Common Stock were outstanding. There was no other class of voting securities
outstanding at that date.
Each share of Common Stock held by a Shareholder entitles such Shareholder
to one vote on each matter that is voted upon at the Annual Meeting or any
adjournments thereof.
A majority of the outstanding shares of the corporation entitled to vote,
represented in person or by proxy, is necessary to constitute a quorum at the
Annual Meeting. Assuming that a quorum is present, (i) the affirmative vote of
the holders of a majority of the shares of Common Stock present at the Annual
Meeting in person or by proxy will be required to elect each of the three
nominees for directors of the Company, (ii) the affirmative vote of the holders
of a majority of the shares of Common Stock present at the Annual Meeting in
person or by proxy will be required to adopt an amendment to the Company's
Articles of Incorporation which would effect an increase in the number of
authorized shares of Common Stock from 20,000,000 shares to 80,000,000 shares,
and to create a new class of the securities of the Company, consisting of
40,000,000 authorized shares of blank check Preferred Stock to be issued by the
Company's Board of Directors from time to time in series, (iii) the
affirmative vote of the holders of a majority of the shares of Common Stock
<PAGE>
present at the Annual Meeting in person or by proxy will be required to ratify
the selection of Levine Hughes & Mithuen Inc. as the independent public
accountants of the Company for the fiscal year ending December 31, 2000, (iv)
the affirmative vote of the holders of a majority of the shares of Common Stock
present at the Annual Meeting in person or by proxy will be required to approve
and adopt the proposed Incentive Stock Option Plan, and (v) the affirmative vote
of the holders of a majority of the shares of Common Stock present at the Annual
Meeting in person or by proxy will be required to approve and adopt the proposed
Nonqualified Stock Option Plan.
Abstentions and broker "non-votes" will be counted toward determining the
presence of a quorum for the transaction of business; however, abstentions will
have the effect of a negative vote on the proposals being submitted. Abstentions
may be specified on all proposals. A broker "non-vote" will have no effect on
the outcome of any of the proposals.
If the accompanying proxy is properly signed and returned to the Company
and not revoked, it will be voted in accordance with the instructions contained
therein. Unless contrary instructions are given, the persons designated as proxy
holders in the accompanying Proxy will vote "FOR" the election of the three
nominees for directors of the Company, "FOR" the amending of the Articles of
Incorporation, "FOR" the ratification of the selection of Levine Hughes &
Mithuen Inc. as the independent public accountants of the Company for the fiscal
year ending December 31, 2000, "FOR" the approval of the Incentive Stock Option
Plan, "FOR" approval of the Nonqualified Stock Option Plan, and as recommended
by the Board of Directors with regard to any other matters or, if no such
recommendation is given, in their own discretion. The Company's executive
officers and directors have advised the Company that they intend to vote their
shares (including those shares over which they hold voting power), representing
approximately 49.9% as of the Record Date, of the outstanding shares of Common
Stock, in favor of each of the proposals above. Each Proxy granted by a
Shareholder may be revoked by such Shareholder at any time thereafter by writing
to the Secretary of the Company prior to the Annual Meeting, or by execution and
delivery of a subsequent Proxy or by attendance and voting in person at the
Annual Meeting, except as to any matter or matters upon which, prior to such
revocation, a vote shall have been cast pursuant to the authority conferred by
such Proxy.
Representatives from Levine Hughes & Mithuen Inc. are not expected to
attend the Annual Meeting.
The cost of soliciting these Proxies, consisting of the printing, handling,
and mailing of the Proxy and related material, and the actual expense incurred
by brokerage houses, custodians, nominees and fiduciaries in forwarding proxy
materials to the beneficial owners of the shares of Common Stock, will be paid
by the Company.
In order to assure that there is a quorum, it may be necessary for certain
officers, directors, regular employees and other representatives of the Company
to solicit Proxies by telephone or telegraph or in person. These persons will
receive no extra compensation for their services.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth information as of the Record Date
concerning: (i) each person who is known by the Company to own beneficially more
than 5% of the Company's outstanding Common Stock; (ii) each of the Company's
executive officers and directors; and (iii) all executive officers and directors
as a group. Common Stock not outstanding but deemed beneficially owned by virtue
of the right of an individual to acquire shares within 60 days is treated as
outstanding only when determining the amount and percentage of Common Stock
owned by such individual. Except as noted, each person or entity has sole voting
and sole investment power with respect to the shares shown.
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<PAGE>
SHARES BENEFICIALLY OWNED
<TABLE>
<CAPTION>
Amount and Nature of Percent of
Name Position Beneficial Ownership Ownership
---- -------- -------------------- ---------
<S> <C> <C> <C>
Gerd Behrens President and
a Director 6,260,000 34.9%
Frank Behrens Secretary-Treasurer
and a Director 2,000,000 11.1%
Dieter Gastinger Director 700,000 3.9%
Jutta Behrens (1) 6,260,000 34.9%
Karsten Behrens (2) 1,003,500 5.6%
All officers and directors
as a group (3 persons)(3) 8,960,000 49.9%
--------------------------
</TABLE>
(1) Gerd and Jutta Behrens are husband and wife, and each own shares
separately. Gerd Behrens individually owns 5,000,000 shares and Jutta
Behrens individually owns 1,260,000 shares. Under SEC rules, as husband and
wife, each of them may be considered the beneficial owner of the shares
held by the other.
(2) Karsten Behrens is the son of Gerd and Jutta Behrens. Gerd and Jutta
Behrens disclaim beneficial ownership of the shares held by their son.
(3) Does not include 1,003,500 shares held by Karsten Behrens because he is
neither an officer nor a director of the Company. Includes 1,260,000 shares
held individually by Jutta Behrens because these may be considered to be
beneficially owned by her husband, Gerd Behrens.
There are no outstanding options, warrants or rights to purchase securities
from the Company.
BOARD OF DIRECTORS AND COMMITTEE MEETINGS
During the last fiscal year the Company held three Board meetings, and each
director attended 100% of the those meetings.
The Company currently is in the process of searching for outside directors
who will serve as members of an Audit Committee. This Audit Committee will
assist the Board in fulfilling its responsibility to stockholders relating to
the quality and integrity of the Company's financial reports and accounting and
reporting practices. At this time, the Company does not have an audit or
compensation committee.
EXECUTIVE COMPENSATION
Summary Compensation Table. The following table summarizes all compensation
paid to the officers and directors of the Company for services rendered to the
Company during the last three fiscal years. Gerd Behrens' salary for 1998
includes 95,500 DM from TES (80,000 DM of which he elected to defer until the
time that the Company has funds available to pay him) and 57,600 DM from
Environmental Technologies and Software Solutions, Inc. ("ENTECS") (all of which
he elected to defer until the time that the Company has funds available to pay
him). This unpaid salary has been included as an accrued expense of related
parties in the balance sheet of the Company as of December 31, 1998. He also has
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<PAGE>
elected to defer payment of his salary for 1999. Frank Behrens' salary for 1998
was paid to him by ENTECS. Dieter Gastinger's salary for 1998 and 1999 was paid
to him by ENTECS.
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
------------------- ------------
Salary/Consulting Fees Number of
Name and ---------------------- Other Annual Options
Pricipal Position Year DM US$ Compensation Awarded
----------------- ---- ------- ------ ------------ --------
<S> <C> <C> <C> <C> <C>
Gerd Behrens, 1999 48,000 24,615 -0- -0-
President 1998 153,100 91,841 -0- -0-
and Director 1997 57,600 32,141 -0- -0-
Frank Behrens, 1999 51,100 26,205 -0- -0-
Secretary-Treasurer 1998 77,500 46,490 -0- -0-
and Director 1997 40,250 22,460 -0- -0-
Dieter Gastinger, 1999 53,750 27,564 -0- -0-
Director 1998 52,850 31,704 -0- -0-
1997 -0- -0- -0- -0-
Jutta Behrens, 1999 6,000 3,076 -0- -0-
Treasurer and Director 1998 -0- -0- -0- -0-
prior to August 1999 1997 -0- -0- -0- -0-
</TABLE>
Employment and Consulting Agreements
The Company has entered into an employment agreement with Gerd Behrens
under which Mr. Behrens will be paid approximately 8,000 DM (US $4,762) per
month; however, since July 1, 1999 his salary is at a monthly rate of 660 DM.
Mr. Behrens has deferred payment of this compensation until the Company has
funds available to pay him. The Company previously had a consulting agreement
with Frank Behrens to prepare a business plan and an investment memorandum for
which he was paid a flat rate. Gerd Behrens and Frank Behrens devote their full
time and attention to the Company and its subsidiaries.
Directors
Other than in accordance with their employment or consulting arrangements,
the members of the Board of Directors are not compensated for their services as
directors; however, they are reimbursed for all reasonable expenses incurred in
connection with those services.
Option Plans
Except as described below, the Company has no retirement, pension, profit
sharing, stock option or insurance or medical reimbursement plans or programs
covering its officers and directors.
The Board of Directors of the Company has adopted a stock option plan,
which provides for the grant of options to purchase an aggregate of not more
than 500,000 shares of the Company's common stock. The purpose of the stock
option plan is to make options available to directors, management, key
employees, consultants and technical advisers of the Company. A grant of stock
options to these individuals will provide them with a more direct stake in the
-4-
<PAGE>
future of the Company and provide them with additional rewards and incentives
for contributing to the Company's success.
A committee appointed by the Board of Directors administers the stock
option plan. This committee determines the following:
o the persons to be granted options under the plan
o the number of shares subject to each option
o the term of the option
o the manner in which the option may be exercised
o the exercise price of each option, subject to the requirement that no
option may be exercisable more than 10 years after the date of grant.
The committee will have the power to establish such other terms and
conditions for options granted under the stock option plan as they determine are
necessary and appropriate. No option granted under the plan shall be
transferable otherwise than by will or the laws of descent and distribution. The
exercise price of stock options granted under the plan will be established by
the Board of Directors in their sole discretion and may be less than the fair
market value of the underlying shares on the date of grant as determined by the
committee. The exercise price may be paid in cash or in common stock or a
combination of cash and common stock.
As of the date of this Annual Report, no options have been granted under
the stock option plan.
It is anticipated that if the Incentive Stock Option Plan and Nonqualified
Stock Option Plan being submitted to the shareholders for their consideration at
this meeting are approved, those Plans shall supersede the plan described
immediately above.
CERTAIN TRANSACTIONS
In connection with the founding of the Company, Gerd Behrens acquired
4,500,000 shares of its common stock. Subsequent to the founding and prior to
the time that the Company raised any funds from outside directors, Mr. Behrens
sold his wife, Jutta Behrens, and his sons, Karsten and Frank Behrens, 2,760,000
of these shares. Mr. Behrens paid approximately 90,870 DM (US $54,089) for his
original 4,500,000 shares. The shares discussed in this paragraph have been
adjusted to reflect a stock dividend issued in December 1998.
Jutta Behrens, the wife of Gerd Behrens, has loaned the Company an
aggregate of 330,000 DM since 1996. The initial loan was made on March 20, 1996,
in the amount of 80,000 DM (US $51,992) for a four-year term and bears interest
at 9.25% per year. The second loan was made on September 10, 1996, in the amount
of approximately 50,000 DM (US $32,495) for a five-year term and bears interest
at 8% per year. In April 1999 Jutta Behrens loaned the Company 200,000 DM. The
loan had an initial term of one year and automatically extends for additional
one-year terms if not previously repaid. It bore interest at a rate of 4.15% per
annum until April 2000 at which time the rate of interest increased to 5.4% per
annum.
In connection with their financing efforts in Germany, TES and ENTECS
entered into consulting agreements with Yvonne Marquard, who was at that time a
director of ENTECS and a shareholder of TES. Mrs. Marquard is the wife of
Michael Marquard, who was an employee of the Company. Under the agreements Mrs.
Marquard was paid a consulting or finder's fee based upon the difference between
20% of the gross proceeds raised and the amount of commission or fees actually
paid to brokers or finders for the sale of the companies' securities. Mrs.
Marquard did not receive any payments from TES under its agreement in either
1998 or 1999; however, ENTECS paid Mrs. Marquard approximately 146,525 DM
(US$87,897) under its agreement in 1998 and 45,000 DM (US$23,077) in 1999. In
addition, TES paid Mrs. Marquard approximately 86,399 DM (US$51,829) in 1998 and
42,200 DM (US$21,641) in 1999 for marketing-consultant services.
-5-
<PAGE>
The Company paid Karsten Behrens, a major shareholder in the Company,
consulting fees equal to approximately 12,255 DM (US$7,352) in 1998. These fees
were for the performance of legal services for the Company and the writing and
drafting of the Company's business plan and offering materials that were used to
raise funds from German investors.
In 1999, the Company sold 200,000 DM of convertible debentures to Yvonne
Marquard, a former director of ENTECS and shareholder of the Company. The
debentures are convertible into common stock of the Company at US$0.25 per share
and bear interest at 3.5% per annum.
The management of the Company believes that the above transactions were on
terms no less favorable than could be obtained from unaffiliated third parties.
The Company does not presently have any policies regarding future affiliated
transactions.
Except as otherwise disclosed herein, there have been no related party
transactions or any other transactions or relationships required to be disclosed
pursuant to Item 404 of Regulation S-B.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended, generally
requires the Company's directors and executive officers and persons who own more
than 10% of a registered class of the Company's equity securities ("10% owners")
to file with the Securities and Exchange Commission initial reports of ownership
and reports of changes in ownership of common stock and other equity securities
of the Company. Directors and executive officers and 10% owners are required by
Securities and Exchange Commission regulation to furnish the Company with copies
of all Section 16(a) forms they file. Gerd Behrens, Jutta Behrens, Frank Behrens
and Karsten Behrens failed to timely file Forms 4 or Forms 5 reporting the
increases in their shareholdings which resulted from the merger acquisition of
ENTECS. In addition, Karsten Behrens failed to timely file Forms 4 or a Form 5
to report dispositions of the Company's common stock. To the Company's
knowledge, based solely on review of copies of such reports furnished to the
Company and verbal representations that no other reports were required to be
filed during the fiscal year ended December 31, 1999, the Company's directors,
executive officers and 10% owners were not required to file any other Section
16(a) reports.
PROPOSAL 1
ELECTION OF THREE (3) PERSONS
TO SERVE AS DIRECTORS OF THE COMPANY
The Company's directors are elected annually to serve until the next Annual
Meeting of Shareholders and thereafter until their successors shall have been
elected and qualified. The number of directors presently authorized by the
Bylaws of the Company shall be three (3). The number of directors may be changed
by the Board from time to time.
Unless otherwise directed by shareholders, the proxy holders will vote all
shares represented by proxies held by them for the election of the following
nominees, of whom Messers. Gerd Behrens and Frank Behrens are now members of the
Company's Board of Directors. The Company is advised that all nominees have
indicated their availability and willingness to serve if elected. In the event
that any nominee becomes unavailable or unable to serve as a director of the
Company prior to the voting, the proxy holder will vote for a substitute nominee
in the exercise of his best judgment.
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<PAGE>
Information Concerning Nominees
Gerd Behrens is the father of Frank Behrens. There are no other family
relationships between any director or executive officer and any other director
or executive officer. Set forth below is biographical information with respect
to the Company's founders and promoters and each officer and director.
Gerd Behrens, age 62, founder and promoter, has been Chairman of the Board
and President of the Company since inception. Mr. Behrens holds a Diploma as a
Businessman (Dipl. Kaufmann), which is roughly equivalent to a Bachelors Degree
in Business Administration in the United States. Mr. Behrens has over 36 years
of experience in business with a variety of firms and has served in a number of
positions, including senior management positions, since 1989. From 1989 until
the founding of the Company, Mr. Behrens was the managing director of Data
Consult, a firm located in Munich, Germany, that purchased and sold used
computers. Since the founding of the Company, Mr. Behrens has devoted
substantially all of his time to the business and affairs of the Company.
Frank Behrens, age 33, has been Secretary and a director of the Company
since March 3, 1995. Mr. Behrens is a graduate of Ludwig-Maximillians University
in Munich in Geography and Economics. Mr. Behrens has served as a consultant to
various firms, including the Company, since graduating in 1995. Mr. Behrens'
consulting services have related primarily to environmental management and
controlling systems. Mr. Behrens provided the Company with assistance in the
writing and drafting of its business plan and offering materials that were used
to raise funds from German investors.
Wolfgang Kleen, age 52, has been responsible for sales and marketing for
the Company since December 1999. Mr. Kleen has 12 years prior experience in
Germany as a sales and marketing director for a telecommunications and
computer-renting service, which is a subsidiary of Granada-Group/England.
Furthermore, Mr. Kleen served as a member of the German Board of Directors of
the Granada-Group. Since 1995 Mr. Kleen has been involved in sales and marketing
consultations for various companies in Germany.
Board Recommendation
The Board recommends a vote FOR the election of each of the three nominees
for directors of the Company.
PROPOSAL 2
PROPOSED AMENDMENT TO THE ARTICLES OF
INCORPORATION TO INCREASE THE AUTHORIZED
SHARES OF COMMON STOCK AND TO CREATE
A NEW CLASS OF SECURITIES
The Board of Directors has approved a resolution, subject to Shareholder
approval, to amend the Company's Articles of Incorporation to increase the total
number of authorized shares of Common Stock from 20,000,000 shares of Common
Stock to 80,000,000 shares of Common Stock, and to create a new class of the
securities of the Company, consisting of 40,000,000 authorized shares of blank
check Preferred Stock to be issued by the Company's Board of Directors from time
to time in series. The form of amendment (the "Amendment") to the Articles of
Incorporation is attached as Exhibit A, and reference is made to the Amendment
for the complete terms thereof.
-7-
<PAGE>
The Company's Articles of Incorporation currently authorize the issuance of
20,000,000 shares of Common Stock, no par value. As of March 31, 2000,
16,638,075 shares of Common Stock were issued and outstanding. The Amendment
will not affect the number of shares of Common Stock issued and outstanding, but
will only affect the total number of shares of Common Stock authorized for
issuance by the Company. The Board of Directors believes that adoption of this
Proposal will increase acceptance of the Company's Common Stock by the financial
community and the investing public and, accordingly, should enhance shareholder
value.
If approved by the Shareholders, the Amendment to the Articles of
Incorporation will increase the Company's authorized capital stock from
20,000,000 shares of Common Stock to 80,000,000 shares of Common Stock, and will
create a new class of the securities of the Company, consisting of 40,000,000
authorized shares of blank check Preferred Stock to be issued by the Company's
Board of Directors from time to time in series.
Approval of the Amendment requires the affirmative vote of the holders of a
majority of the outstanding shares of Common Stock entitled to notice of, and to
vote at, the Special Meeting. If the Amendment is approved by the Shareholders,
it will become effective as of the date and time it is filed with the office of
the Secretary of State of Colorado. The filing will be made as soon as
practicable following the approval of the Amendment by the Shareholders.
Board Recommendation
The Board recommends a vote FOR the adoption of the Amendment to the
Company's Articles of Incorporation to increase the authorized shares of Common
Stock from 20,000,000 shares to 80,000,000 shares, and to create a new class of
the securities of the Company, consisting of 40,000,000 authorized shares of
blank check Preferred Stock to be issued by the Company's Board of Directors
from time to time in series, and each of the Resolutions with respect thereto
set forth in Exhibit A hereto.
PROPOSAL 3
RATIFICATION OF SELECTION OF
LEVINE HUGHES & MITHUEN INC. AS INDEPENDENT
PUBLIC ACCOUNTANTS OF COMPANY
The Board of Directors has selected Levine Hughes & Mithuen Inc. as
independent public accountants of the Company for the fiscal year ending
December 31, 2000, and has further directed that the Company submit the
selection of independent public accountants for ratification by shareholders at
the Annual Meeting of Shareholders.
Board Recommendation
The Board recommends a vote FOR the ratification of the selection of Levine
Hughes & Mithuen Inc. as independent public accountants of the Company for the
fiscal year ending December 31, 2000.
PROPOSAL 4
THE INCENTIVE STOCK OPTION PLAN PROPOSAL
The Board of Directors believes that it is in the best interests of the
Company to adopt an Incentive Stock Option Plan (the "ISOP") in the form
attached hereto as Exhibit B, which provides for the granting to members of
management and employees of the Company of incentive stock options (within the
meaning of Section 422 of the Internal Revenue Code) to purchase an aggregate of
not more than 2,500,000 shares of the Common Stock for the purpose of providing
members of management and employees of the Company with a more direct stake in
the future of the Company and to encourage them to remain with the Company. The
following summary of the provisions of the ISOP is qualified in its entirety by
express reference to the text of the ISOP attached as Exhibit B hereto. Terms
not otherwise defined in this summary shall have the meaning given to them in
the text of the ISOP.
Eligible Employees and Reservation of Stock. All officers and employees of
the Company shall be eligible to participate in the ISOP. The Board shall
reserve two million five hundred thousand (2,500,000) of the authorized but
unissued shares of the Common Stock for issuance upon the exercise of the
options. Such number of shares shall be the aggregate number of shares which may
be issued under options granted pursuant to the ISOP.
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<PAGE>
Administration. The ISOP shall be administered by a compensation
committee of the Board or any committee of the Board performing similar
functions, as appointed from time to time by the Board (the "Committee"). The
Committee shall be constituted so as to permit the ISOP to comply with Rule
16b-3 promulgated by the Securities and Exchange Commission (the "Commission")
under the Securities Exchange Act of 1934, as amended ("Rule 16b-3"). The ISOP
is intended to qualify and operate pursuant to the provisions of Rule 16b-3 as
in effect at this time or in compliance with any amendments adopted to that Rule
in the future or in compliance with any successor rule adopted by the
Commission.
The Committee shall administer the ISOP and shall have discretionary
authority to (a) determine the persons to whom options shall be granted, (b)
determine the quantity of shares to be included in each option, (c) interpret
the ISOP, and (d) promulgate such rules and regulations under the ISOP as they
may deem necessary and proper. Decisions made by the Committee within their
discretionary authority shall be final and conclusive as to all parties and
shall not be subject to review.
Options, Grants, Term and Exercise. Upon the terms and conditions set forth
in the ISOP, the Committee may grant on behalf of the Company options to
purchase shares of Common Stock to eligible employees ("Optionees"). The
exercise price of each option shall be not less than the fair market value of
the Common Stock on the date of grant; provided, however, that if the amount of
stock owned by the Optionee is more than ten percent (10%) of the total combined
voting power of all classes of capital stock of the Company as of the date of
grant, the exercise price of each such option shall be not less than one hundred
ten percent (110%) of the fair market value of the Common Stock on the date of
grant. Fair market value for purposes of ISOP shall be defined as the closing
bid price on the date of grant, or if there was no trading on the date of grant,
then the closing bid price on the last trading date prior to the date of grant,
or, if none, then the price of the last sale of stock, or as determined by the
Committee.
The term of an option shall be for a period of no more than ten (10) years
from the date of grant of such option, provided, however, that if the amount of
stock owned by the Optionee is more than ten percent (10%) of the total combined
voting power of all classes of capital stock of the Company as of the date of
grant the term of an Option shall be for a period of no more than five (5) years
from the date of grant of such Option.
An Option shall be exercisable in whole or in part by written notice
delivered to and received by the Secretary of the Company at its principal
office, any time during the term of the option. In no case, however, may an
option under this ISOP be exercised if there remains on the date of exercise an
incentive stock option which was granted before the granting of such option to
such Optionee to purchase stock in the Company or in a corporation which (at the
time of the granting of such option) is a parent or subsidiary corporation of
the Company, or in a predecessor corporation of any such corporations.
The notice shall among other things state the number of shares with respect
to which the option is being exercised, and shall be signed by the Optionee. The
option price shall be paid in cash, cash equivalents or secured notes acceptable
to the Committee, by arrangement with a broker which is acceptable to the
Committee where payment of the option price is made pursuant to an irrevocable
direction to the broker to deliver all or part of the proceeds from the sale of
the option shares to the Company, by the surrender of shares of common stock
owned by the Optionee exercising the option and having a fair market value on
the date of exercise equal to the option price, or by the surrender of options
to purchase Common Stock having a fair market value on the date of exercise
equal to the option price or in any combination of the foregoing.
In the event the Company or the shareholders of the Company enter into an
agreement to dispose of all or substantially all of the assets or stock of the
Company by means of a sale, reorganization or liquidation, or otherwise, an
option shall become immediately exercisable with respect to the full number of
shares subject to that option, during the period commencing as of the date of
such agreement and ending when the disposition of assets or stock contemplated
by the agreement is consummated or the agreement is terminated. The Company
shall seek to notify Optionees in writing of any event which may constitute such
sale, reorganization, liquidation or otherwise.
The option shall not be exercised at any time when its exercise, or the
delivery of shares referred to in the notice, would, in the opinion of the
Company, constitute the violation of any law, governmental regulation or ruling.
During the Optionee's lifetime, the option shall be exercisable only by the
Optionee or, in the event of the Optionee's incapacity, by his guardian or other
legal representative.
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The exercise price of all incentive stock options granted under the ISOP
must be equal to the fair market value of such shares on the date of grant as
determined by the Committee, based on guidelines set forth in the ISOP. The
exercise price may be paid in cash or (if the ISOP shall meet the requirements
of rules adopted under the Securities Exchange Act of 1934) in Common Stock or a
combination of cash and Common Stock. The term of each option and the manner in
which it may be exercised will be determined by the Committee, subject to the
requirement that no option may be exercisable more than 10 years after the date
of grant. With respect to an incentive stock option granted to a participant who
owns more than 10% of the voting rights of the Company's outstanding capital
stock on the date of grant, the exercise price of the option must be at least
equal to 110% of the fair market value on the date of grant and the option may
not be exercisable more than five years after the date of grant.
Options not Transferable. No option may be assigned or transferred other
than by will or under the laws of descent and distribution, and no option shall
be pledged or otherwise encumbered or subject to execution, attachment or
similar legal process. In the event of the death of an Optionee, his option may
be exercised during its term by the person designated in the will of the
Optionee, or, if no testamentary disposition was made, by the legal
representative of the Optionee, within one (1) year following his death;
provided, however, such option shall only be exercisable if it was exercisable
according to the terms hereof on the date of the Optionee's death. Any attempted
assignment, transfer, pledge, hypothecation or other disposition of the option,
contrary to the provisions of this Agreement, or the levy of any execution,
attachment or similar process upon the option, shall void the option.
Notwithstanding the above, any ?derivative security,? as such term is defined
under Rule 16b-3, issued under the ISOP shall be transferable by the Optionee
only to the extent such transfer is not or would not be prohibited by Rule
16b-3. In addition, the shares of Common Stock acquired upon exercise of options
granted pursuant to the ISOP shall not be transferable by the Optionee until six
months after the date of grant, unless the Committee consents to such transfer.
Certain Federal Income Tax Consequences
The following summary generally describes the principal federal (and not
state and local) income tax consequences of options granted under the ISOP. It
is general in nature and is not intended to cover all tax consequences that may
apply to an ISOP participant or to the Company. The provisions of the Code and
the regulations thereunder relating to these matters ("Treasury Regulations")
are complex, and their impact in any case may depend upon the particular
circumstances. Each holder of an option under the ISOP should consult the
holder's own accountant, legal counsel or other financial advisor regarding the
tax consequences of participation in the ISOP. This discussion is based on the
Code as currently in effect.
If an option (whether under the ISOP or the NQSOP) is granted to a
participant in accordance with the terms of the ISOP or the NQSOP, no income
will be recognized by such participant at the time the option is granted.
Generally, on exercise of a non-statutory option (i.e., an option granted
under the NQSOP), the amount by which the fair market value of the shares of the
Common Stock on the date of exercise exceeds the purchase price of such shares
will be taxable to the participant as ordinary income, and, in the case of any
employee, the Company will be required to withhold tax on the amount of income
recognized by the employee upon exercise of a non-statutory option. Such amount
will be deductible for tax purposes by the Company in the year in which the
participant recognizes the ordinary income. The disposition of shares acquired
upon exercise of a non-statutory option will result in capital gain or loss
(long-term or short-term depending on the applicable holding period) in an
amount equal to the difference between the amount realized on such disposition
and the sum of the purchase price and the amount or ordinary income recognized
in connection with the exercise of the non-statutory option.
Generally, on exercise of an option granted under the ISOP, an employee
will not recognize any income and the Company will not be entitled to a
deduction for tax purposes. However, the difference between the purchase price
and the fair market value of the shares of Common Stock received ("ISO shares")
on the date of exercise will be treated as a positive adjustment in determining
alternative minimum taxable income, which may subject the employee to the
alternative minimum tax ("AMT"). Upon the disposition of the ISO shares, the
employee will recognize long-term or short-term capital gain or loss (depending
on the applicable holding period) in an amount equal to the difference between
the amount realized on such disposition and the purchase price of such shares.
Generally, however, if the employee disposes of the ISO shares within two years
after the date of option grant or within one year after the date of option
exercise (a "disqualifying disposition"), the employee will recognize ordinary
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income, and the Company will be entitled to a deduction for tax purposes for the
taxable year in which the disqualifying disposition occurs, in the amount of the
excess of the fair market value of the shares on the date of exercise over the
purchase price (or, if less, the amount of the gain on sale). Any excess of the
amount realized by the holder on the disqualifying disposition over the fair
market value of the shares on the date of exercise of the ISO will ordinarily
constitute capital gain. If an option is exercised through the use of Common
Stock previously owned by the employee, such exercise generally will not be
considered a taxable disposition of the previously owned shares and, thus, no
gain or loss will be recognized with respect to such shares upon such exercise.
However, proposed Treasury Regulations would provide that, if the previously
owned shares are ISO shares and the holding period requirement for those shares
was not satisfied at the time they were used to exercise an option, such use
would constitute a disqualifying disposition of such previously owned ISO
shares, resulting in the recognition of ordinary income (but not any additional
capital gain) in the amount described above. If an otherwise qualifying ISO
first becomes executable in any one year for shares having a fair market value,
determined as of the date of the grant, in excess of $100,000, the portion of
the option in respect of such excess shares will be treated as a non-statutory
option.
Section 16(b) of the Securities Exchange Act of 1934, as amended, generally
requires officers, directors and 10% stockholders of the Company to disgorge
profits realized by buying and selling the Company's Common Stock within a six
month period. Consequently, by application of Code Section 83 to these
participants who are subject to Section 16, generally the relevant date for
recognizing and measuring the amount of ordinary income in connection with an
exercise of a non-statutory option (or AMT in the case of an ISO), as well as
the relevant date for recognizing and measuring the amount of an employee's
ordinary income and the Company's tax deduction in connection with a
disqualifying disposition of ISO shares as discussed above, will be the later
of: (i) six months following the date of grant, and (ii) the date of exercise of
the option unless such participants elect otherwise under Code Section 83(b).
As of the date of this Proxy Statement, no options have been granted under
the ISOP.
Board Recommendation
The Board recommends a vote FOR the adoption of the ISOP as included in
Exhibit B.
PROPOSAL 5
NON-QUALIFIED STOCK OPTION PLAN PROPOSAL
The Board of Directors also believes that it is in the best interests of
the Company to adopt a Non-Qualified Stock Option Plan (the "NQSOP") in the form
attached hereto as Exhibit C, which provides for the grant of options not
considered incentive stock options within the meaning of Section 422 of the
Internal Revenue Code to purchase an aggregate of not more than 2,500,000 shares
of the Common Stock of the Company for the purpose of providing certain key
employees, independent contractors, technical advisors and directors of the
Company with options as additional rewards and incentives for contributing to
the success of the Company. The following summary of the provisions of the NQSOP
is qualified in its entirety by express reference to the text of the ISOP
attached as Exhibit C hereto. Terms not otherwise defined in this summary shall
have the meaning given to them in the text of the NQSOP.
Eligible Persons and Reservation of Stock. Key employees, independent
contractors, technical advisors and directors of the Company with the incentive
to contribute to the success of the Company shall be eligible to participate in
the NQSOP. The Board shall reserve 2,500,000 of the authorized but unissued
shares of the Common Stock for issuance upon the exercise of the options. Such
number of shares shall be the aggregate number of shares which may be issued
under options granted pursuant to the NQSOP.
Administration. The NQSOP shall be administered by a compensation
committee of the Board or any committee of the Board performing similar
functions, as appointed from time to time by the Board (the "Committee"). The
Committee shall be constituted so as to permit the NQSOP to comply with Rule
16b-3 promulgated by the Securities and Exchange Commission (the "Commission")
under the Securities Exchange Act of 1934, as amended ("Rule 16b-3"). The NQSOP
is intended to qualify and operate pursuant to the provisions of Rule 16b-3 as
in effect at this time or in compliance with any amendments adopted to that Rule
in the future or in compliance with any successor rule adopted by the
Commission.
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<PAGE>
The Committee shall administer the NQSOP, and shall have discretionary
authority to (a) determine the persons to whom options shall be granted, (b)
determine the quantity of shares to be included in each option, (c) interpret
the NQSOP, and (d) promulgate such rules and regulations under the NQSOP as they
may deem necessary and proper. Decisions made by the Committee within their
discretionary authority shall be final and conclusive as to all parties and
shall not be subject to review.
Options, Grants, Term and Exercise. Upon the terms and conditions set forth
in the NQSOP, the Committee may grant on behalf of the Company, options to
purchase shares of the Company's common stock to any key employee, independent
contractor, technical advisor or director of the Company or any of its
subsidiaries hereinafter organized or acquired (the "Optionees"). The option
price for the Common Stock to be issued under the NQSOP may be greater than,
less than or equal to the market value of the stock at the date of grant in the
discretion of the Committee ("Option Price").
The NQSOP shall become effective upon its adoption by the Company's Board
of Directors and by a majority of the outstanding security holders of the
Company. It shall continue in effect for a term of ten (10) years unless sooner
terminated.
The number of shares optioned to an Optionee shall be exercisable in whole
or in part at any time during the term of the option. An option may not be
exercised for fractional shares of the stock of the Company.
In the event the Company or the Shareholders of the Company enter into an
agreement to dispose of all or substantially all of the assets or stock of the
Company by means of a sale, reorganization, liquidation or otherwise, an Option
shall become immediately exercisable with respect to the full number of shares
subject to that option, during the period commencing as of the date of such
agreement and ending when the disposition of assets or stock contemplated by the
agreement is consummated or the agreement is terminated. The Company shall seek
to notify Optionees in writing of any event which may constitute such sale,
reorganization, liquidation or otherwise.
An option may only be exercised when written notice of such exercise has
been given to the Company at its principal business office by the person
entitled to exercise the option and full payment for the shares with respect to
which the option is exercised has been received by the Company. The notice shall
state the number of shares with respect to which the option is being exercised,
and shall among other things be signed by the Optionee. The Option Price shall
be paid in cash, cash equivalents or secured notes acceptable to the Committee,
by arrangement with a broker which is acceptable to the Committee where payment
of the Option Price is made pursuant to an irrevocable direction to the broker
to deliver all or part of the proceeds from the sale of the option shares to the
Company, by the surrender of shares of common stock owned by the Optionee
exercising the option and having a fair market value on the date of exercise
equal to the option price, or by the surrender of options to purchase common
stock having a fair market value on the date of exercise equal to the option
price or in any combination of the foregoing. Until the issuance of stock
certificates, no right to vote or receive dividends or any other rights as a
Shareholder shall exist with respect to the optioned shares notwithstanding the
exercise of the Option. Generally, no adjustment will be made for a dividend or
other rights for which the record date is prior to the date the stock
certificate is issued.
An option may be exercised by the Optionee only while he is, and has
continually been since the date of the grant of the option, an employee,
independent contractor, technical advisor or director of the Company, its
subsidiaries, its parent or its successor companies, except that to the extent
that installments have accrued and remain unexercised on the date of the
Optionee's death, such option of the deceased Optionee may be exercised within
one year after the death of such Optionee, but in no event later than five years
after the date of grant of such option, by (and only by) the person or persons
to whom his rights under such option shall have passed by will or by laws of
descent and distribution. An option may be exercised in accordance with this the
NQSOP as to all or any portion of the shares subject to the Option from time to
time, but shall not be exercisable with respect to fractions of a share.
Options not Transferable. Options under the NQSOP may not be sold, pledged,
assigned or transferred in any manner otherwise than by will or the laws of
descent or distribution, and may be exercised during the lifetime of an Optionee
only by such Optionee. Further, no option shall be pledged or otherwise
encumbered or subject to execution, attachment or similar legal process. Any
attempted assignment, transfer, pledge, hypothecation or similar disposition of
the option, contrary to the provisions of this Agreement, or the levy of any
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<PAGE>
execution, attachment or similar process upon the option, shall void the option.
Notwithstanding the above, any ?derivative security,? as such term is defined
under Rule 16b-3, issued under the NQSOP shall be transferable by the Optionee
only to the extent such transfer is not or would not be prohibited by Rule
16b-3. In addition, the shares of Common Stock acquired upon exercise of options
granted pursuant to the NQSOP shall not be transferable by the Optionee until
six months after the date of grant, unless the Committee consents to such
transfer.
Tax Consequences. For a description of the federal income tax consequences
associated with options under the NQSOP, please see "Certain Federal Income Tax
Consequences above under Proposal 4.
As of the date of this Proxy Statement, no options have been granted under
the NQSOP.
Board Recommendation
The Board recommends a vote FOR the adoption of the NQSOP as included in
Exhibit C hereto.
GENERAL
Other Matters
The Board of Directors does not know of any matters that are to be
presented at the Annual Meeting of Shareholders other than those stated in the
Notice of Annual Meeting and referred to in this Proxy Statement. If any other
matters should properly come before the Annual Meeting, it is intended that the
proxies in the accompanying form will be voted as the persons named therein may
determine in their discretion.
Shareholder Proposals
If any shareholder of the Company intends to present a proposal for
consideration at the 2001 Annual Meeting of Shareholders and desires to have
such proposal included in the proxy statement and form of proxy distributed by
the Board of Directors with respect to such meeting, such proposal must be
received at the Company's offices, C/O TES Com GmbH, 25 Impler Strasse, Munchen,
81371, Germany, Attention: Secretary, no later than May 23, 2001.
By Order of the Board of Directors
------------------------------------------
Gerd Behrens
Chairman of the Board and President
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<PAGE>
EXHIBIT A
ARTICLES OF AMENDMENT OF THE ARTICLES OF INCORPORATION
OF
TECHNICAL ENVIRONMENT SOLUTIONS, INC.
FIRST: The name of the Corporation is Technical Environment Solutions, Inc.
SECOND: Immediately upon the effectiveness of this amendment to the
Corporation's Articles of Incorporation pursuant to the Colorado Business
Corporation Act (the "Effective Time"), the number of authorized shares of
Common Stock shall be increased from 20,000,000 no par value common shares to
80,000,000 no par value common shares, and a new class of securities of the
Company shall be created, consisting of 40,000,000 authorized shares of blank
check Preferred Stock, to be issued by the Board of Directors from time to time
in series. This Amendment shall not affect the outstanding and issued shares of
Common Stock in any way. This Amendment authorizes the officers of the
Corporation to increase the stated capital of the Corporation to reflect the
change in outstanding shares of the Corporation.
This Amendment shall be effectuated by striking in its entirety Article 4
and by substituting in lieu thereof the following:
The total number of shares of all classes which the Corporation has
authority to issue is 120,000,000, of which 80,000,000 shares shall be Common
Stock, and 40,000,000 shares shall be blank check Preferred Stock.
The designations and the preferences, conversion and other rights, voting
powers, restrictions, limitations as to distributions, qualifications, and terms
and conditions of redemption of the shares of each class of stock are as
follows:
PREFERRED STOCK
The Preferred Stock may be issued from time to time by the Board of
Directors as shares of one or more series. The description of shares of each
series of Preferred Stock, including any preferences, conversion and other
rights, voting powers, restrictions, limitations as to distributions,
qualifications, and terms and conditions of redemption shall be as set forth in
resolutions adopted by the Board of Directors and in Articles of Amendment to
State Terms of Series Shares filed as required by law from time to time prior to
the issuance's of any shares of such series.
The Board of Directors is expressly authorized, prior to issuances, by
adopting resolutions providing for the issuances of, or providing for a change
in the number of, shares of any particular series of Preferred Stock and, if and
to the extent from time to time required by law, by filing Articles of Amendment
to State Terms of Series Shares to set or change the number of shares to be
included in each series of Preferred Stock and to set or change in any one or
more respect the designations, preferences, conversion or other rights, voting
powers, restrictions, limitations as distributions, qualifications, or terms and
conditions of redemption relating to the shares of each such series.
Notwithstanding the foregoing, the Board of Directors shall not be authorized to
change the right of the Common Stock of the Corporation to vote one vote per
share on all matters submitted for stockholder action. The authority of the
Board of Directors with respect to each series of Preferred Stock shall include,
but not be limited to, setting or changing the following:
<PAGE>
(a) the distinctive serial designation of such series and the number
of shares constituting such series (provided that the aggregate number of
shares constituting all series of Preferred Stock shall not exceed
40,000,000);
(b) the annual distribution rate on shares of such series, whether
distributions shall be cumulative and, if so, from which date or dates;
(c) whether the shares of such series shall be redeemable and, if so,
the terms and conditions of such redemption, including the date or dates
upon and after which such shares shall be redeemable, and the amount per
share payable in case of redemption, which amount may vary under different
conditions and at different redemption dates;
(d) the obligation, if any, of the Corporation to redeem or repurchase
shares of such series pursuant to a sinking fund;
(e) whether shares of such series shall be convertible into, or
exchangeable for, shares of stock of any other class or classes and, if so,
the terms and conditions of such conversion or exchange, including the
price or prices or the rate or rates of conversion or exchange and the
terms of adjustment, if any;
(f) whether the shares of such series shall have voting rights, in
addition to the voting rights provided by law, and if so, the terms of such
voting rights;
(g) the rights of the shares of such series in the event of voluntary
or involuntary liquidation, dissolution or winding-up of the Corporation;
and
(h) any other relative rights, powers, preferences, qualifications,
limitations or restrictions thereof relating to such series which may
authorized under the Colorado Business Corporation Act.
The shares of Preferred Stock of any one series shall be identical with
each other in all respects except as to the dates from and after which dividends
thereon shall cumulate, if cumulative.
COMMON STOCK
Subject to all of the rights of the Preferred Stock as expressly provided
herein, by law or by the Board of Directors pursuant to this Article, the Common
Stock of the Corporation shall possess all such rights and privileges as are
afforded to capital stock by applicable law in the absence of any express grant
of rights or privileges in these Articles of Incorporation, including, but not
limited to, the following rights and privileges:
(a) distributions may be declared and paid or set apart for payment
upon the Common Stock out of any assets or funds of the Corporation legally
available for the payment of distributions;
(b) the holders of Common Stock shall have the right to vote for the
election of directors and on all other matters requiring stockholder
action, each share being entitled to one vote; and
(c) upon the voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, the net assets of the Corporation shall be
distributed pro rata to the holders of the Common Stock in accordance with
their respective rights and interests.
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<PAGE>
THIRD: By written informal action, unanimously taken by the Board of
Directors of the Corporation effective the 8th day of June, 2000, pursuant to
and in accordance with Sections 7-108-202 and 7-110-103 of the Colorado Business
Corporation Act, the Board of Directors of the Corporation duly adopted and
recommended the amendment described above to the Corporation's Shareholders for
their approval.
FOURTH: Notice having been properly given to the Shareholders in accordance
with Sections 7-107-105 and 7-110-103, at a meeting of Shareholders held on
August 21, 2000, the number of votes cast for the amendment by the each voting
group entitled to vote on the amendment was sufficient for approval by that
voting group.
IN WITNESS WHEREOF, Technical Environment Solutions, Inc., has caused these
presents to be signed in its name and on its behalf by Gerd Behrens, its
President, and its corporate seal to be hereunder affixed and attested by Frank
Behrens, its Secretary, on this 8th day of June, 2000, and its President
acknowledges that these Articles of Amendment are the act and deed of Technical
Environment Solutions, Inc., and, under the penalties of perjury, that the
matters and facts set forth herein with respect to authorization and approval
are true in all material respects to the best of his knowledge, information and
belief.
ATTEST: TECHNICAL ENVIRONMENT SOLUTIONS, INC.
By:_____________________________ By:______________________
Frank Behrens, Secretary Gerd Behrens, President
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<PAGE>
EXHIBIT B
THE ISOP ADOPTION PROPOSAL
RESOLVED, that the Incentive Stock Option Plan in the form set forth
hereinbelow be, and it hereby is, adopted as the Incentive Stock Option Plan of
the Company:
TECHNICAL ENVIRONMENT SOLUTIONS, INC.
INCENTIVE STOCK OPTION PLAN
1. Purpose of the Plan. The Technical Environment Solutiuons, Inc.
Incentive Stock Option Plan (the "Plan") is intended to provide additional
incentive to key employees of Technical Environment Solutions, Inc. (the
"Company") and encourage their stock ownership.
2. Eligible Employees. All officers and employees of the Company shall be
eligible to participate in the Plan.
3. Reservation of Option Stock. The Board of Directors of the Company (the
"Board") shall reserve two million five hundred thousand (2,500,000) of the
authorized but unissued shares of the Company's no par value common stock (the
"Common Stock") for issuance upon the exercise of the options (the "Option
Stock"). Such number of shares shall be the aggregate number of shares which may
be issued under Options granted pursuant to this Plan.
4. Administration and Operation of the Plan. The Plan shall be administered
by a compensation committee of the Board or any committee of the Board
performing similar functions, as appointed from time to time by the Board (the
"Committee"). The Committee shall be constituted so as to permit the Plan to
comply with Rule 16b-3 promulgated by the Securities and Exchange Commission
(the "Commission") under the Securities Exchange Act of 1934, as amended ("Rule
16b-3"). The Plan is intended to qualify and operate pursuant to the provisions
of Rule 16b-3 as in effect at this time or in compliance with any amendments
adopted to that Rule in the future or in compliance with any successor rule
adopted by the Commission.
The Committee shall administer the Plan, and shall have discretionary
authority to (a) determine the persons to whom Options shall be granted, (b)
determine the quantity of shares to be included in each Option, (c) interpret
the Plan, and (d) promulgate such rules and regulations under the Plan as they
may deem necessary and proper. Decisions made by the Committee within their
discretionary authority shall be final and conclusive as to all parties and
shall not be subject to review.
5. Options. Upon the terms and conditions hereinafter set forth, the
Committee may grant on behalf of the Company options (the "Options" or,
individually, an "Option") to purchase shares of Common Stock to eligible
employees (the "Optionees" or, individually, the "Optionee"). The Options shall
be substantially in form and substance as set forth in Exhibit A.
6. Exercise Price. The exercise price of each Option shall be not less than
the fair market value of the Common Stock on the date of grant; provided,
however, that if the amount of stock owned by the Optionee is more than ten
percent (10%) of the total combined voting power of all classes of capital stock
<PAGE>
of the Company as of the date of grant, the exercise price of each Option shall
be not less than one hundred ten percent (110%) of the fair market value of the
Common Stock on the date of grant. Fair market value for purposes of this
Section 6 shall be defined as the closing bid price on the date of grant, or if
there was no trading on the date of grant, then the closing bid price on the
last trading date prior to the date of grant, or, if none, then the price of the
last sale of stock, or as determined by the Committee.
7. Terms of Options. The term of an Option shall be for a period of no more
than ten (10) years from the date of grant of such Option, provided, however,
that if the amount of stock owned by the Optionee is more than ten percent (10%)
of the total combined voting power of all classes of capital stock of the
Company as of the date of grant the term of an Option shall be for a period of
no more than five (5) years from the date of grant of such Option.
8. Exercise of Options. Subject to Section 14 hereof, an Option shall be
exercisable in whole or in part by written notice delivered to and received by
the Secretary of the Company at its principal office, any time during the term
of the Option. In no case, however, may an Option under this Plan be exercised
if there remains on the date of exercise an incentive stock option which was
granted before the granting of such Option to such Optionee to purchase stock in
the Company or in a corporation which (at the time of the granting of such
option) is a parent or subsidiary corporation of the Company, or in a
predecessor corporation of any such corporations.
The notice shall state the number of shares with respect to which the
Option is being exercised, shall contain a representation and agreement by the
Optionee substantially in the form and substance as set forth in the investment
letter attached hereto as Exhibit B, and shall be signed by the Optionee. The
option price shall be paid in cash, cash equivalents or secured notes acceptable
to the Committee, by arrangement with a broker which is acceptable to the
Committee where payment of the option price is made pursuant to an irrevocable
direction to the broker to deliver all or part of the proceeds form the sale of
the option shares to the Company by the surrender of shares of common stock
owned by the Optionee exercising the Option and having a fair market value on
the date of exercise equal to the option price, or by the surrender of options
to purchase common stock having a fair market value on the date of exercise
equal to the option price or in any combination of the foregoing.
In the event the Company or the shareholders of the Company enter into an
agreement to dispose of all or substantially all of the assets or stock of the
Company by means of a sale, reorganization or liquidation, or otherwise, an
Option shall become immediately exercisable with respect to the full number of
shares subject to that Option, notwithstanding the preceding provisions of this
Section 8, during the period commencing as of the date of such agreement and
ending when the disposition of assets or stock contemplated by the agreement is
consummated or the agreement is terminated. The Company shall seek to notify
Optionees in writing of any event which may constitute such sale,
reorganization, liquidation or otherwise.
The Option shall not be exercised at any time when its exercise, or the
delivery of shares referred to in the notice, would, in the opinion of the
Company, constitute the violation of any law, governmental regulation or ruling.
During the Optionee's lifetime, the Option shall be exercisable only by the
Optionee or, in the event of the Optionee's incapacity, by his guardian or other
legal representative.
9. Securities to be Unregistered. The Company shall be under no obligation
to register or assist the Optionee in registering either the Options or the
Option Stock under the federal securities law or any state securities law and
both the Options and all Option Stock shall be "restricted securities" as
defined in Rule 144 of the General Rules and Regulations of the Securities Act
of 1933 (the "Act"), and may not be offered for sale, sold or otherwise
transferred except pursuant to an effective registration statement under the
Act, or pursuant to an exemption from registration under the Act, the
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<PAGE>
availability of which is to be established to the satisfaction of the Company.
Accordingly, all certificates evidencing shares covered by the Option, and any
securities issued and replaced or exchanged therefor, shall bear a restrictive
legend to this effect.
10. Assignment or Transfer. No Option may be assigned or transferred other
than by will or under the laws of descent and distribution, and no Option shall
be pledged or otherwise encumbered or subject to execution, attachment or
similar legal process. In the event of the death of an Optionee, his Option may
be exercised during its term by the person designated in the will of the
Optionee, or, if no testamentary disposition was made, by the legal
representative of the Optionee, within one (1) year following his death;
provided, however, such Option shall only be exercisable if it was exercisable
according to the terms hereof on the date of the Optionee's death. Any attempted
assignment, transfer, pledge, hypothecation or other disposition of the Option,
contrary to the provisions of this Agreement, or the levy of any execution,
attachment or similar process upon the Option, shall void the Option.
Notwithstanding the above, any ?derivative security,? as such term is defined
under Rule 16b-3, issued under the Plan shall be transferable by the Optionee
only to the extent such transfer is not or would not be prohibited by Rule
16b-3. In addition, the shares of Common Stock acquired upon exercise of Options
granted pursuant to this Plan shall not be transferable by the Optionee until
six months after the date of grant, unless the Committee consents to such
transfer.
11. Optionee as Shareholder. An Optionee shall have no rights as a
shareholder of the Company with respect to the shares of Option Stock covered by
an Option until the date of the issuance of stock certificate(s) to him. No
adjustment will be made for dividends or other rights with respect to which the
record date is prior to the date of such stock certificate or certificates.
12. Adjustment for Changes in Capital Structure. In the event of a change
in the capital structure of the Company as a result of any stock dividend, stock
split, combination or reclassification of shares, recapitalization, merger,
consolidation or reorganization, the number of shares covered by the Options
granted pursuant to this Plan shall be appropriately adjusted by the Committee,
whose determination shall be final.
13. Employment of Optionee. Except as otherwise provided in this Agreement,
the Optionee may not exercise any Option unless the Optionee has been
continuously employed with the Company, a parent or subsidiary, from the date of
grant to and including the later of the date of exercise or three months
following the termination of the employee?s employment.
The existence of this Plan shall not impose or be construed as imposing
upon the Company, or any parent or subsidiary of the Company, any obligation to
employ the Optionee for any period of time, and shall not supersede or in any
way increase the obligations of the Company, or any parent or subsidiary of the
Company, under any employment contract now or hereafter existing with any
Optionee.
14. Termination. The Plan may be terminated at any time by action of the
Committee, but in all events this Plan shall terminate ten (10) years from the
date of its approval by the shareholders of the Company, or from its adoption by
the Board, whichever is earlier, and no Options shall be granted under the Plan
after such termination, although Options granted prior to such termination may
continue to be exercised after such date in accordance with the terms hereof.
The Plan shall also terminate upon (a) the merger or consolidation of the
Company with one or more other corporations in which the Company is not the
surviving corporation, (b) the dissolution or liquidation of the Company, (c)
the appointment of a receiver for all, or substantially all, of the assets or
business of the Company, (d) the appointment of a trustee for the Company after
a petition has been filed for the Company's liquidation under applicable
statutes, (e) the filing of a petition in bankruptcy on behalf of the Company
under applicable statutes, or (f) the sale, lease or exchange of all, or
substantially all, of the assets or business of the Company. The Company shall
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<PAGE>
notify an Optionee in writing thirty (30) days prior to the happening of any of
the events described in clauses (a) through (f) of the preceding sentence.
15. Limitation. The aggregate fair market value (determined on the date the
Option is granted) of stock subject to an Option granted to an Optionee in any
calendar year shall not exceed $100,000.
16. Amendment. No material change or modification of this Plan shall be
valid unless in writing and approved by the Committee, the Company's
shareholders and each Optionee affected by such change.
17. Governing Law. This Plan shall be governed and construed in accordance
with the laws of the State of Colorado.
IN WITNESS WHEREOF, the Board of Directors has adopted this Plan the 8th
day of June, 2000.
TECHNICAL ENVIRONMENT SOLUTIONS, INC.
(The "Company")
By:_________________________________
Gerd Behrens, President
ATTEST:
_________________________________
Frank Behrens, Secretary
The Shareholders approved this Plan on ______________, 2000.
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<PAGE>
EXHIBIT A
TO INCENTIVE STOCK OPTION PLAN
OF
TECHNICAL ENVIRONMENT SOLUTIONS, INC.
STOCK OPTION GRANT FORM
Technical Environment Solutions, Inc., a Colorado corporation (the
"Company"), hereby grants to ____________________________________________ the
right and option to purchase ____________ (______) shares of the Common Stock,
no par value, of the Company at the exercise price of $_________________ per
share. This option is granted as of the date set forth below and shall expire
_______ years from such date. This Option is subject to all the terms and
conditions of the Technical Environment Solutions, Inc. Incentive Stock Option
Plan, which are incorporated herein by this reference, and may not be assigned
or transferred except as provided therein. Further, the recipient of this Option
hereby acknowledges that if the shares of Common Stock acquired upon exercise of
this Option are not held for at least six months from the date of grant, the
grant of the Option will be deemed a purchase that may be matched against any
sales of Company securities occurring within six months of the grant and may
create liability for the recipient pursuant to Section 16(b) of the Securities
Exchange Act of 1934, as amended.
Common Stock acquired pursuant to this Option may be subject to special tax
treatment under Internal Revenue Code Section 422 if held for at least two years
from the date set forth below and for at least one year from the date of
exercise of this Option.
Dated:______________________, 20_____.
TECHNICAL ENVIRONMENT SOLUTIONS,
INC.
(The "Company")
By:_________________________________
Gerd Behrens, President
ATTEST:
_________________________________
Frank Behrens, Secretary
The option represented by this certificate and the shares of common stock
underlying this option have not been registered under the Securities Act of 1933
(the "Act") and are "restricted securities" as that term is defined in Rule 144
under the Act. Neither the option nor the shares underlying the option may be
offered for sale, sold or otherwise transferred except pursuant to an effective
registration statement under the Act, or pursuant to an exemption from
registration under the Act, the availability of which is to be established to
the satisfaction of the Company.
<PAGE>
EXHIBIT B
TO
INCENTIVE STOCK OPTION PLAN
OF
TECHNICAL ENVIRONMENT SOLUTIONS, INC.
OPTION EXERCISE FORM
Technical Environment Solutions, Inc.
Gentlemen:
I hereby elect to exercise Options to purchase __________ shares of
Technical Environment Solutions, Inc. (the "Company") Common Stock, no par value
(the "Securities"), pursuant to the Company's Incentive Stock Option Plan, dated
_________________, 2000, and as subsequently amended.
I acknowledge to the Company that (1) the Securities to be issued to me are
being acquired for investment and not with a view to the distribution thereof,
(2) I will not offer, sell, transfer or otherwise dispose of the Securities
except in a transaction which does not violate the Securities Act of 1933, as
amended (the "Act"), and (3) the Securities are "restricted securities" as that
term is defined in Rule 144 of the General Rules and Regulations under the Act.
I acknowledge and understand that the Securities are unregistered and must
be held indefinitely unless they are subsequently registered under the Act or an
exemption from such registration is available. I also understand that the
Company is the only person which may register its securities under the Act.
Furthermore, the Company has not made any representations, warranties or
covenants to me regarding the registration of the Securities or compliance with
Regulation A or some other exemption under the Act.
I further acknowledge that I am fully aware of the applicable limitations
on the resale of the Securities. Rule 144 permits sales of "restricted
securities" upon compliance with certain requirements. If Rule 144 is available
for the resale of the securities, I may resell the Securities only in accordance
with its limitations.
I further acknowledge that I understand that the Company is subject to the
so called ?short swing? profit provisions of Section 16(b) of the Securities
Exchange Act of 1934, as amended (the ?1934 Act?), and that if this exercise is
found to be in violation of those provisions, I will be obligated to make
payment to the Company of any profits which I derive as a result of the matching
of sales and purchases within the statutory period. I also understand that if
the shares of Common Stock to be acquired upon exercise of this Option have not
been held for at least six months from the date of grant, the grant of the
Option will be deemed a purchase that may be matched against any sales of
Company securities occurring within six months of the grant and may create
liability for me pursuant to Section 16(b) of the 1934 Act.
I acknowledge that I am liable for all withholding taxes if the shares
issued pursuant to this Option are disposed of within one year of issuance or
two years of the date of grant of the Option.
Any and all certificates representing the Securities, and any securities
issued in replacement or exchange therefor, shall bear substantially the
following legend, which I have read and understood.
The shares represented by this certificate have not been registered under
the Securities Act of 1933 (the "Act") and are "restricted securities" as that
term is defined in Rule 144 under the Act. The shares may not be offered for
<PAGE>
sale, sold or otherwise transferred except pursuant to an effective registration
statement under the Act, or pursuant to an exemption from registration under the
Act, the availability of which is to be established to the satisfaction of the
Company.
I further agree that the Company shall have the right to issue stop
transfer instructions to its transfer agent to bar the transfer or for failure
to pay necessary withholding taxes in the case of disposition of the shares
within one year of issuance of the shares or two years of the date of grant of
the Option of any of my certificates except in accordance with the Act. I
acknowledge that the Company has informed me of its intention to issue such
instructions.
Dated: ______________________, 20____.
Very truly yours,
___________________________
Optionee
___________________________
(Please print or type name)
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<PAGE>
EXHIBIT C
THE NONQUALIFIED PLAN ADOPTION PROPOSAL
RESOLVED, that the Nonqualified Stock Option Plan in the form set forth
hereinbelow be, and it hereby is, adopted as the Nonqualified Stock Option Plan
of the Company:
TECHNICAL ENVIRONMENT SOLUTIONS, INC.
NON-QUALIFIED STOCK OPTION PLAN
1. Purpose. The purpose of the Technical Environment Solutions, Inc.
Non-Qualified Stock Option Plan (the "Plan") is to promote the growth and
general prosperity of Technical Environment Solutions, Inc. (herein called the
"Company") and its subsidiaries by permitting the Company to grant options to
purchase shares of its Common Stock ("Options"), to attract and retain the best
available personnel for positions of substantial responsibility and to provide
certain key employees, independent contractors, technical advisors and directors
of the Company with an additional incentive to contribute to the success of the
Company.
2. Administration and Operation of the Plan. The Plan shall be administered
by a compensation committee of the Board or any committee of the Board
performing similar functions, as appointed from time to time by the Board (the
"Committee"). The Committee shall be constituted so as to permit the Plan to
comply with Rule 16b-3 promulgated by the Securities and Exchange Commission
(the "Commission") under the Securities Exchange Act of 1934, as amended ("Rule
16b-3"). The Plan is intended to qualify and operate pursuant to the provisions
of Rule 16b-3 as in effect at this time or in compliance with any amendments
adopted to that Rule in the future or in compliance with any successor rule
adopted by the Commission.
The Committee shall administer the Plan, and shall have discretionary
authority to (a) determine the persons to whom Options shall be granted, (b)
determine the quantity of shares to be included in each Option, (c) interpret
the Plan, and (d) promulgate such rules and regulations under the Plan as they
may deem necessary and proper. Decisions made by the Committee within their
discretionary authority shall be final and conclusive as to all parties and
shall not be subject to review.
3. Eligibility. Upon the terms and conditions hereafter set forth, the
Committee may grant on behalf of the Company, options (the "Options" or,
individually, an "Option") to purchase shares of the Company's common stock to
any key employee, independent contractor, technical advisor or director of the
Company or any of its subsidiaries hereinafter organized or acquired. The
Options shall be substantially in form and substance as set forth in Exhibit A.
4. Stock to be Optioned. Subject to the provisions of Section 10, the
maximum number of shares which may be optioned and sold under the Plan is Two
Million Five Hundred Thousand (2,500,000) shares of no par value authorized, but
unissued, or reacquired Common Stock of the Company; provided that 2,500,000
shares shall be the number of shares available for issuance under this Plan.
5. Term. The Plan shall become effective upon its adoption by the Company's
Board of Directors and by a majority of the outstanding security holders of the
Company. It shall continue in effect for a term of ten (10) years unless sooner
terminated under Section 9.
<PAGE>
6. Option Price. The option price for the Common Stock to be issued under
the Plan may be greater than, less than or equal to the market value of the
stock at the date of grant in the discretion of the Committee.
7. Exercise of Option.
(a) The number of shares optioned to an employee or director shall be
exercisable in whole or in part at any time during the term of the Option. An
Option may not be exercised for fractional shares of the stock of the Company.
In the event the Company or the Shareholders of the Company enter into
an agreement to dispose of all or substantially all of the assets or stock of
the Company by means of a sale, reorganization, liquidation or otherwise, an
Option shall become immediately exercisable with respect to the full number of
shares subject to that Option, notwithstanding the preceding provisions of this
Section 7(a), during the period commencing as of the date of such agreement and
ending when the disposition of assets or stock contemplated by the agreement is
consummated or the agreement is terminated. The Company shall seek to notify
Optionees in writing of any event which may constitute such sale,
reorganization, liquidation or otherwise.
(b) An Option may only be exercised when written notice of such exercise
has been given to the Company at its principal business office by the person
entitled to exercise the Option and full payment for the shares with respect to
which the Option is exercised has been received by the Company. The notice shall
state the number of shares with respect to which the Option is being exercised,
shall contain a representation and agreement by the Optionee substantially in
the form and substance as set forth in the investment letter attached hereto as
Exhibit B, and shall be signed by the Optionee. The Option Price shall be paid
in cash, cash equivalents or secured notes acceptable to the Committee, by
arrangement with a broker which is acceptable to the Committee where payment of
the Option Price is made pursuant to an irrevocable direction to the broker to
deliver all or part of the proceeds form the sale of the option shares to the
Company by the surrender of shares of common stock owned by the Optionee
exercising the Option and having a fair market value on the date of exercise
equal to the option price, or by the surrender of options to purchase common
stock having a fair market value on the date of exercise equal to the option
price or in any combination of the foregoing. Until the issuance of stock
certificates, no right to vote or receive dividends or any other rights as a
Shareholder shall exist with respect to the optioned shares notwithstanding the
exercise of the Option. No adjustment will be made for a dividend or other
rights for which the record date is prior to the date the stock certificate is
issued except as provided in Section 10.
(c) An Option may be exercised by the Optionee only while he is, and has
continually been since the date of the grant of the Option, an employee,
independent contractor, technical advisor or director of the Company, its
subsidiaries, its parent or its successor companies, except that to the extent
that installments have accrued and remain unexercised on the date of the
Optionee's death, such Option of the deceased Optionee may be exercised within
one year after the death of such Optionee, but in no event later than five years
after the date of grant of such Option, by (and only by) the person or persons
to whom his rights under such Option shall have passed by will or by laws of
descent and distribution.
(d) An Option may be exercised in accordance with this Section 7 as to
all or any portion of the shares subject to the Option from time to time, but
shall not be exercisable with respect to fractions of a share.
8. Options not Transferable. Options under this Plan may not be sold,
pledged, assigned or transferred in any manner otherwise than by will or the
laws of descent or distribution, and may be exercised during the lifetime of an
Optionee only by such Optionee. Further, no Option shall be pledged or otherwise
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<PAGE>
encumbered or subject to execution, attachment or similar legal process. Any
attempted assignment, transfer, pledge, hypothecation or similar disposition of
the Option, contrary to the provisions of this Agreement, or the levy of any
execution, attachment or similar process upon the Option, shall void the Option.
Notwithstanding the above, any ?derivative security,? as such term is defined
under Rule 16b-3, issued under the Plan shall be transferable by the Optionee
only to the extent such transfer is not or would not be prohibited by Rule
16b-3. In addition, the shares of Common Stock acquired upon exercise of Options
granted pursuant to this Plan shall not be transferable by the Optionee until
six months after the date of grant, unless the Committee consents to such
transfer.
9. Amendment or Termination of the Plan.
(a) The Committee, with approval by a majority of the outstanding
security holders and by each Optionee affected by such change, may amend the
Plan from time to time in such respects as the Committee and the Company's
security holders may deem advisable.
(b) The Committee may at any time terminate the Plan. Any such
termination of the Plan shall not affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not been
terminated.
10. Adjustments Upon Changes In Capitalization. If all or any portion of an
Option is exercised subsequent to any stock dividend, split-up,
recapitalization, combination or exchange of shares, merger, consolidation,
acquisition of property or stock, separation, reorganization or liquidation, as
a result of which shares of any class shall be issued in respect of outstanding
shares of Common Stock or shares of Common Stock shall be changed into the same
or a different number of shares of the same or another class or classes, the
person or persons so exercising such an Option shall receive, for the aggregate
price payable upon such exercise of the Option, the aggregate number and class
of shares which, if shares of Common Stock (as authorized at the date of the
granting of such Option) had been purchased at the date of granting of the
Option for the same aggregate price (on the basis of the price per share
provided in the Option) and had not been disposed of, such person or persons
would be holding at the time of such exercise, as a result of such purchase and
any such stock dividend, split-up, recapitalization, combination or exchange of
shares, merger, consolidation, acquisition of property or stock, separation,
reorganization or liquidation; provided, however, that no fractional share shall
be issued upon any such exercise, and the aggregate price paid shall be
appropriately reduced on account of any fractional share not issued. In the
event of any such change in the outstanding Common Stock of the Company, the
aggregate number of and class of shares remaining available under the Plan shall
be that number and class which a person, to whom an Option had been granted for
all of the available shares under the Plan on the date preceding such change,
would be entitled to receive as provided in the first sentence of this Section
10.
11. Optionee as Shareholder. An Optionee shall have no rights as a
shareholder of the Company with respect to the shares of the Company' Common
Stock covered by such Option until the date of the issuance of stock
certificate(s) to him. No adjustment will be made for dividends or other rights
with respect to which the record date is prior to the date of such stock
certificate or certificates.
12. Employment of Optionee. The existence of this Plan shall not impose or
be construed as imposing upon the Company, or any parent or subsidiary of the
Company, any obligation to employ or contract for services with the Optionee for
any period of time, and shall not supersede or in any way increase the
obligations of the Company, or any parent or subsidiary of the Company, under
any employment or other contract now or hereafter existing with any Optionee.
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<PAGE>
13. Agreement and Representations of Optionee. As a condition to the
exercise of any portion of an Option, the Company may require the person
exercising such Option to represent and warrant at the time of any such exercise
that the shares are being purchased only for investment and without any present
intention to sell or distribute such shares if, in the opinion of counsel for
the Company, such a representation is required under the Securities Act of 1933
or any other applicable law, regulation or rule of any government agency.
14. Securities to be Unregistered. The Company shall be under no obligation
to register or assist the Optionee in registering either the Options or the
Common Stock covered by an Option under the federal securities law or any state
securities law, and both the Options and all Common Stock issuable thereunder
shall be "restricted securities" as defined in Rule 144 of the General Rules and
Regulations of the Securities Act of 1933 (the "Act"), and may not be offered
for sale, sold or otherwise transferred except pursuant to an effective
registration statement under the Act, or pursuant to an exemption from
registration under the Act, the availability of which is to be established to
the satisfaction of the Company. Accordingly, all certificates evidencing shares
covered by the Option, and any securities issued and replaced or exchanged
therefor, shall bear a restrictive legend to this effect.
15. Reservation of Shares of Common Stock. The Company, during the term of
this Plan, will at all times reserve and keep available, and will seek or obtain
from any regulatory body having jurisdiction, any requisite authority in order
to issue and sell such number of shares of its Common Stock as shall be
sufficient to satisfy the requirements of the Plan. Inability of the Company to
obtain from any regulatory body having jurisdiction authority deemed by the
Company's counsel to be necessary to the lawful issuance and sale of any shares
of its stock hereunder, shall relieve the Company of any liability in respect of
the non-issuance or sale of such stock as to which such requisite authority
shall not have been obtained.
16. Governing Law. This Plan shall be governed and construed in accordance
with the laws of the State of Colorado.
17. Definitions. As used herein, the following definitions shall apply:
(a) "Common Stock" shall mean Common Stock, no par value of the
Company.
(b) "Continuous Employment" shall mean employment without interruption,
by any one or more of the Company, its parent, its subsidiaries and its
successor companies. Employment shall not be considered interrupted in the case
of sick leave, military leave or any other leave of absence approved by the
Company or in the case of transfers between payroll locations of the Company or
among the Company, its parent, its subsidiaries or its successor companies.
(c) "Internal Revenue Code" shall mean the Internal Revenue Code of
1986, as amended.
(d) "Option" shall mean a stock option granted pursuant to the Plan.
(e) "Parent" shall mean a "parent corporation" as defined in Section
425(e) and (g) of the Internal Revenue Code.
(f) "Plan" shall mean the Nonstatutory Stock Option Plan of the
Company.
(g) "Shareholders" shall mean the holders of outstanding shares of the
Company's Common Stock.
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<PAGE>
(h) "Subsidiary" shall mean a "subsidiary corporation" as defined in
Section 425(f) and (g) of the Internal Revenue Code.
(i) "Successor Company" means any company which acquires all or
substantially all of the stock or assets of the Company.
IN WITNESS WHEREOF, the Board of Directors has adopted this Plan this 8th
day of June, 2000.
TECHNICAL ENVIRONMENT SOLUTIONS,
INC.
(The "Company")
By:__________________________________
Gerd Behrens, President
ATTEST:
____________________________________
Frank Behrens, Secretary
The Shareholders approved this Plan on ________________, 2000.
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<PAGE>
EXHIBIT A
TO
TECHNICAL ENVIRONMENT SOLUTIONS, INC.
NON-QUALIFIED STOCK OPTION PLAN
STOCK OPTION GRANT FORM
Technical Environment Solutions, Inc. (the "Company") hereby grants to
____________________________________ the right and option to purchase
____________ shares of the Common Stock, no par value, of the Company at the
exercise price of $______________ per share. This Option is granted as of the
date set forth below and shall expire _______ years from such date. This Option
is subject to all the terms and conditions of the Company Non-Qualified Stock
Option Plan which are incorporated herein by this reference, and may not be
assigned or transferred except as provided therein. Further, the recipient of
this Option hereby acknowledges that if the shares of Common Stock acquired upon
exercise of this Option are not held for at least six months from the date of
grant, the grant of the Option will be deemed a purchase that may be matched
against any sales of Company securities occurring within six months of the grant
and may create liability for the recipient pursuant to Section 16(b) of the
Securities Exchange Act of 1934, as amended.
Dated:______________________, 20____.
TECHNICAL ENVIRONMENT SOLUTIONS,
INC.
(The "Company")
By:__________________________________
Gerd Behrens, President
ATTEST:
____________________________________
Frank Behrens, Secretary
The option represented by this certificate and the shares of common stock
underlying this option have not been registered under the Securities Act of 1933
(the "Act") and are "restricted securities" as that term is defined in Rule 144
under the Act. Neither the option nor the shares underlying the option may be
offered for sale, sold or otherwise transferred except pursuant to an effective
registration statement under the Act, or pursuant to an exemption from
registration under the Act, the availability of which is to be established to
the satisfaction of the Company.
<PAGE>
EXHIBIT B
TO
TECHNICAL ENVIRONMENT SOLUTIONS, INC.
NON-QUALIFIED STOCK OPTION PLAN
OPTION EXERCISE FORM
Technical Environment Solutions, Inc.
Gentlemen:
I hereby elect to exercise Options to purchase __________ shares of
Technical Environment Solutions, Inc. (the "Company") Common Stock, no par value
(the "Securities"), pursuant to the Company's Non-Qualified Stock Option Plan,
dated __________, 2000, and as subsequently amended.
I acknowledge to the Company that (1) the Securities to be issued to me are
being acquired for investment and not with a view to the distribution thereof,
(2) I will not offer, sell, transfer or otherwise dispose of the Securities
except in a transaction which does not violate the Securities Act of 1933, as
amended (the "Act"), and (3) the Securities are "restricted securities" as that
term is defined in Rule 144 of the General Rules and Regulations under the Act.
I acknowledge and understand that the Securities are unregistered and must
be held indefinitely unless they are subsequently registered under the Act or an
exemption from such registration is available. I also understand that the
Company is the only person which may register its securities under the Act.
Furthermore, the Company has not made any representations, warranties or
covenants to me regarding the registration of the Securities or compliance with
Regulation A or some other exemption under the Act.
I further acknowledge that I am fully aware of the applicable limitations
on the resale of the Securities. Rule 144 permits sales of "restricted
securities" upon compliance with certain requirements. If Rule 144 is available
for the resale of the securities, I may resell the Securities only in accordance
with its limitations.
I further acknowledge that I understand that the Company is subject to the
so called ?short swing? profit provisions of Section 16(b) of the Securities
Exchange Act of 1934, as amended (the ?1934 Act?), and that if this exercise is
found to be in violation of those provisions, I will be obligated to make
payment to the Company of any profits which I derive as a result of the matching
of sales and purchases within the statutory period. I also understand that if
the shares of Common Stock to be acquired upon exercise of this Option have not
been held for at least six months from the date of grant, the grant of the
Option will be deemed a purchase that may be matched against any sales of
Company securities occurring within six months of the grant and may create
liability for me pursuant to Section 16(b) of the 1934 Act.
Any and all certificates representing the Securities, and any securities
issued in replacement or exchange therefor, shall bear substantially the
following legend, which I have read and understood.
The shares represented by this certificate have not been registered under
the Securities Act of 1933 (the "Act")) and are "restricted securities" as that
term is defined in Rule 144 under the Act. The shares may not be offered for
sale, sold or otherwise transferred except pursuant to an effective registration
statement under the Act, or pursuant to an exemption from registration under the
Act, the availability of which is to be established to the satisfaction of the
Company.
<PAGE>
I agree that the Company shall have the right to issue stop transfer
instructions to its transfer agent to bar the transfer except in accordance with
the Act. I acknowledge that the Company has informed me of its intention to
issue such instructions.
I further agree that the Company shall have the right to take such action
as it deems necessary to make appropriate federal and state withholding payments
on my behalf.
Dated: ______________________, 20_____.
Very truly yours,
______________________________________
Optionee
_________________________________
(Please print or type name)
-2-
<PAGE>
TECHNICAL ENVIRONMENT SOLUTIONS, INC.
ANNUAL MEETING OF SHAREHOLDERS
August 31, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of ACCELR8 TECHNOLOGY CORPORATION, a Colorado
corporation (the "Company"), acknowledges receipt of the Notice of Annual
Meeting of Shareholders and Proxy Statement, dated ____________, 2000, and
hereby appoints Harry J. Fleury and Thomas V. Geimer, or either of them, each
with the power of substitution, as Attorneys and Proxies to represent and vote
all shares of Common Stock of the Company which the undersigned would be
entitled to vote at the Annual Meeting of Shareholders and at any adjournment or
adjournments thereof, hereby revoking any proxy or proxies heretofore given and
ratifying and confirming all that said Attorneys and Proxies may do or cause to
be done by virtue thereof with respect to the following matters:
1. Election of each of the following three (3) persons to serve as
directors of the Corporation until the next Annual Meeting of
Shareholders and thereafter until their successors shall have been
elected and qualified:
Thomas V. Geimer
FOR /___/ AGAINST /___/ ABSTAIN /___/
David C. Wilhelm
FOR /___/ AGAINST /___/ ABSTAIN /___/
A. Alexander Arnold
FOR /___/ AGAINST /___/ ABSTAIN /___/
2. Ratification of the selection of Levine Hughes & Mithuen Inc. as the
independent public accountants of the Company for the fiscal year
ending July 31, 2000.
FOR /___/ AGAINST /___/ ABSTAIN /___/
3. To act upon such other matters as may properly come before the Meeting
or any adjournments thereof.
4. To act upon such other matters as may properly come before the Meeting
or any adjournments thereof.
5. Aproval of the proposal to approve and adopt an Incentive Stock Option
Plan of the Corporation pursuant to which options to purchase Common
Stock may be granted to certain personnel of the Company.
FOR /___/ AGAINST /___/ ABSTAIN /___/
6. Aproval of the proposal to approve and adopt a Nonqualified Stock
Option Plan of the Company pursuant to which options to purchase
Common Stock may be granted to certain personnel of the Company and
others who are not employed by the Company.
FOR /___/ AGAINST /___/ ABSTAIN /___/
This Proxy, when properly executed, will be voted as directed. If no direction
is indicated, the Proxy will be voted FOR the election of each of the nominees
listed above to the Board of Directors, FOR the amending of the Articles of
Incorporation, FOR the proposal to ratify the selection of Levine Hughes &
<PAGE>
Mithuen Inc. as the independent public accountants of the Company for the fiscal
year ending July 31, 2000, FOR the approval of the Incentive Stock Option Plan,
and FOR the approval of the Nonqualified Stock Option Plan.
Dated:________________________, 2000 --------------------------------
--------------------------------
PLEASE SIGN, DATE AND MAIL THIS PROXY IMMEDIATELY IN THE ENCLOSED ENVELOPE.
PLEASE SIGN EXACTLY AS NAME APPEARS ON THE LABEL ATTACHED TO THIS PROXY. WHEN
SHARES ARE HELD BY JOINT TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY,
EXECUTOR, ADMINISTRATOR, TRUSTEE, OR GUARDIAN, PLEASE GIVE FULL TITLE AS IT
APPEARS HEREON. IF A CORPORATION, PLEASE SIGN IN FULL CORPORATE NAME BY AN
AUTHORIZED OFFICER AND AFFIX CORPORATE SEAL. IF A PARTNERSHIP, PLEASE SIGN IN
FULL PARTNERSHIP NAME BY AUTHORIZED PERSON. NO POSTAGE IS REQUIRED IF RETURNED
IN THE ENCLOSED ENVELOPE AND MAILED IN THE UNITED STATES. TES.
