<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[x] Revised Preliminary Proxy Statement
[ ] Definitive Proxy Statement
WORLDWATER CORP.
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(Name of Registrant as Specified In Its Charter)
BOARD OF DIRECTORS OF WORLDWATER CORP.
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
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(1) Aggregate number of securities to which transactions applies:
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:(1)
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(4) Proposed maximum aggregate value of transaction:
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(5) Total Fee Paid:
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[ ] Fee paid previously with preliminary materials:
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[ ] 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:
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(2) Form, Schedule or Registration Statement No:
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(3) Filing Party:
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(4) Date Filed:
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(5) Set forth the amount on which the filing fee is calculated and
state how it was determined.
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<PAGE> 3
WORLDWATER CORP.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 16, 1999
As a stockholder of WorldWater Corp. (the "COMPANY"), you are hereby given
notice of and invited to attend in person or by proxy the Annual Meeting of
Stockholders of the Company (the "ANNUAL MEETING") to be held at the Hopewell
Valley Golf Club, Hopewell, New Jersey, on Wednesday, June 16, 1999, at 2:00
p.m., local time, for the following purposes:
1. To elect five directors for the ensuing year and until their successors
shall be elected and duly qualified;
2. To approve the 1999 WorldWater Corp. Incentive Stock Option Plan, which
will provide for the issuance of a maximum of 2,000,000 shares of the
Company's Common Stock through the year 2009;
3. To consider and vote upon the amendment to the Restated Articles of
Incorporation of the Company to increase the Company's authorized capital
stock from 30,000,000 to 50,000,000 shares for potential future
acquisitions; and
4. To transact such other business as may properly come before the Annual
Meeting and any adjournment thereof.;
The Board of Directors has fixed the close of business on April 30, 1999
as the record date for the determination of stockholders entitled to notice of
and to vote at the Annual Meeting and any adjournment thereof. Only stockholders
of record at the close of business on the record date are entitled to notice of
and to vote at the Annual Meeting. The transfer books of the Company will not be
closed.
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. HOWEVER, WHETHER
OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, MANAGEMENT DESIRES TO HAVE THE
MAXIMUM REPRESENTATION AT THE ANNUAL MEETING AND RESPECTFULLY REQUESTS THAT YOU
DATE, EXECUTE AND MAIL PROMPTLY THE ENCLOSED PROXY IN THE ENCLOSED STAMPED
ENVELOPE FOR WHICH NO ADDITIONAL POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES.
A proxy may be revoked by a stockholder any time prior to its use as
specified in the enclosed proxy statement.
By Order of the Board of Directors
QUENTIN T. KELLY,
Chairman and Chief
Executive Officer
Pennington, New Jersey
________________, 1999
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YOUR VOTE IS IMPORTANT.
PLEASE EXECUTE AND RETURN PROMPTLY THE
ENCLOSED PROXY CARD IN THE POSTAGE PAID ENVELOPE PROVIDED HEREIN.
WORLDWATER CORP.
Pennington Business Park
55 Route 31 South
Pennington, New Jersey 08534
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PROXY STATEMENT
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FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 16, 1999
_______________
TO OUR STOCKHOLDERS:
This Proxy Statement is furnished to stockholders of WorldWater Corp.
(the "COMPANY") for use at the Annual Meeting of Stockholders to be held at the
Hopewell Valley Golf Club, Hopewell, New Jersey, on Wednesday, June 16, 1999, at
2:00 p.m., local time, or at any adjournment or adjournments thereof (the
"ANNUAL MEETING"). The enclosed proxy is being solicited by the Board of
Directors of the Company (the "BOARD") and is subject to revocation at any time
prior to the voting of the proxy. Unless a different choice is indicated, all
duly executed proxies received by the Company will be voted in accordance with
the instructions set forth on the back side of the proxy card. The record of
stockholders entitled to vote at the Annual Meeting was taken at the close of
business on April 30, 1999 (the "RECORD DATE"). This Proxy Statement and the
enclosed proxy card are being sent or given to stockholders on or about May __,
1999.
VOTING PROCEDURES AND REVOCABILITY OF PROXIES
The accompanying proxy card is designed to permit each stockholder of
record at the close of business on the Record Date to vote with respect to the
election of directors, the adoption of the 1999 WorldWater Corp. Incentive Stock
Option Plan, the increase in the Company's authorized capital stock from
30,000,000 to 50,000,000 shares and on any other proposal properly brought
before the Annual Meeting. The proxy card provides space for a stockholder to
(a) vote in favor of or to withhold voting for each nominee for the Board, (b)
vote for or against each proposal to be considered
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<PAGE> 5
at the Annual Meeting, or (c) abstain from voting on any proposal other than the
election of directors. The election of the directors will be decided by a
plurality of the votes cast at the Annual Meeting by the holders of the Common
Stock. For all matters, the affirmative vote of a majority of the votes present
or represented by proxy and entitled to be cast at the Annual Meeting by holders
of the Common Stock is required to take stockholder action.
The presence at the Annual Meeting, in person or by proxy, of the holders
of a majority of the votes entitled to be cast by all holders of the Common
Stock will constitute a quorum for the transaction of business at the Annual
Meeting. If a quorum is not present, in person or by proxy, the Annual Meeting
may be adjourned from time to time until a quorum is obtained. In the case of
any meeting called for the election of directors, those who attend the second
such adjourned meetings, although less than a majority, shall constitute a
quorum for the purpose of electing directors. Shares as to which authority to
vote has been withheld with respect to any matter brought to a vote before the
stockholders will not be counted as a vote in favor of such matter.
Abstentions and broker nonvotes will be counted for purposes of
determining the presence or absence of a quorum for the transaction of business.
With respect to all matters other than the election of directors, an abstention
will have the same effect as a vote against any specified proposal. Stockholders
are urged to sign the accompanying proxy card and return it promptly.
When a signed proxy card is returned with choices specified with respect
to voting matters, the shares represented will be voted by the proxies
designated on the proxy card in accordance with the stockholder's instructions.
The proxies for the stockholders are Quentin T. Kelly and John A. Pell. A
stockholder wishing to name another person as his or her proxy may do so by
crossing out the names of the designated proxies and inserting the name of such
other person to act as his or her proxy. In that case, it will be necessary for
the stockholder to sign the proxy card and deliver it to the person named as his
or her proxy and for the person so named to be present and vote at the Annual
Meeting. Proxy cards so marked should not be mailed to the Company.
If a signed proxy card is returned and the stockholder has made no
specifications with respect to voting matters, the shares will be voted (a) for
the election of the nominees for director, (b) for adopting the stock option
plan, (c) for the increase in the Company's authorized capital stock, and (d) at
the discretion of the proxies, on any other matter that may properly come before
the Annual Meeting or any adjournment of the Annual Meeting. Valid proxies will
be voted at the Annual Meeting and at any adjournment of the Annual Meeting in
the manner specified.
Any stockholder giving a proxy has the unconditional right to revoke it at
any time before it is voted by any act inconsistent with the proxy, including
notifying the Secretary of the Company in writing, executing a subsequent proxy
or personally appearing at the Annual Meeting and casting a contrary vote.
However, no revocation will be effective unless notice of such revocation has
been received by the Company at or prior to the Annual Meeting.
The total issued and outstanding shares of common stock, $.001 par value
per share (the "Common Stock"), as of March 1, 1999 consisted of 24,994,904
shares.
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<PAGE> 6
MATTERS TO BE BROUGHT BEFORE THE MEETING
PROPOSAL ONE - ELECTION OF DIRECTORS
Five persons, Quentin T. Kelly, Dr. Martin G. Beyer, Joseph Cygler, Dr.
Russell L. Sturzebecker and Rolf Hafeli are nominated to be elected as directors
at the Annual Meeting, four of whom currently serve as directors of the Company.
If elected, each of these directors will hold office until the next annual
meeting of stockholders or until his successor is duly elected and qualified.
The election of directors will be decided by a plurality of the votes entitled
to be cast at the meeting by holders of the Common Stock. The nominees have
consented to serve if elected, but, if the nominees become unable to serve, the
persons named as proxies may exercise their discretion to vote for a substitute
nominee. Management has no reason to believe that any nominee will be unable to
serve.
Other nominations for election to the Board may be made by the Board, or
by any stockholder or shareholder representing at least ten percent of the votes
which all shareholders of the corporation are entitled to cast.
Quentin T. Kelly founded the Company in 1984 and has been Chief Executive
Officer since then. Mr. Kelly was previously Director of Information Services
and Assistant to the President of Westinghouse Electric Corporation from 1965
to 1971 and subsequently became President of Kelly-Jordan Enterprises, Inc., a
publicly-held leisure products company from 1971 to 1975, and then President of
Pressurized Products, Inc., manufacturers and international marketers of
specialized water systems and products, from 1976 to 1984. Mr. Kelly is an
alumnus of Kenyon College. He has many years' experience in international
business relating to water and power needs in the developing world. He has
worked on water supply and solar power projects with governments and several of
the international assistance agencies (USAID, UNDP and UNICEF), particularly in
the Philippines, Lebanon, Sudan, North Africa and Sub-Saharan Africa and India.
Dr. Martin G. Beyer was appointed a Director of the Company in 1995 and
serves as Consultant - International Marketing. He was Secretary-General of the
Global Consultation on Water and Sanitation, sponsored by the United Nations
Development Programme and the World Bank, held in New Delhi, India in 1990 and
attended by over 600 delegates from 115 countries. Previously, Dr. Beyer was
Senior Advisor for Water Supply and Sanitation for UNICEF, Chairman of the
United Nations Intersecretariat Group for Water Resources, Chairman of the
Advisory Panel to the UNDP/World Bank global project for testing and developing
of hand pumps, and Deputy Regional Director for UNICEF in the Americas. Dr.
Beyer has a Ph.D. degree in Economic Geology from the University of Stockholm
and speaks ten languages, including French, Spanish, German, Italian and
Portuguese. He resides in Princeton, New Jersey.
Joseph Cygler has been a Director of the Company since January 1984, and a
former Vice President of Marketing and Executive Vice-President. He has been
Chief Executive Officer of the CE&O Group, an organization assisting companies
in operations management, since 1986. Previously he was an executive at
Kepner-Tregoe, Inc., an international business consulting firm, from 1976 to
1986, an executive with Honeywell Information Systems from 1964 to 1976, and a
marketing representative with International Business Machines from 1961 to 1964.
Mr. Cygler has a BS in Engineering from the U.S. Military Academy at West Point.
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Rolf Hafeli is 33 years old, and is the President of Hafeli Asset Management,
which is based in Hirschthal, Switzerland. He is a graduate in Economics of
Zurich University with an emphasis in Environmental Economics.
Dr. Russell L. Sturzebecker was appointed a Director of the Company in 1997
and serves as Consultant- International Health. He is a retired Director of
Health and Education of West Chester University (Pennsylvania). He is an author
and publisher of histories of World War II-Pacific Theater and of the Olympic
Games. He is a retired Colonel, US Air Force, who accompanied General Douglas
MacArthur's troops in the invasion of the Philippines and is a close associate
of President Fidel V. Ramos of the Philippines.
THE BOARD URGES STOCKHOLDERS TO VOTE "FOR"
EACH OF THE NOMINEES FOR DIRECTOR SET FORTH ABOVE
PROPOSAL TWO - APPROVAL OF 1999 WORLDWATER CORP. INCENTIVE STOCK OPTION PLAN
STOCK OPTION PLAN
The Company's success is largely dependent upon the efforts of its key
employees as well as its directors and consultants. In order to continue to
attract, motivate and retain outstanding key employees, the Board of Directors
believes it is essential to provide compensation incentives that are competitive
with those provided by other companies. In addition, the Board of Directors
believes it is important to further the identity of interests of key employees
with those of the stockholders by encouraging ownership of the Company's Common
Stock. Accordingly, the Board of Directors has adopted the 1999 WorldWater Corp.
1999 Incentive Stock Option Plan, as amended (the "OPTION PLAN"), which is
attached as Exhibit A.
During the year ended December 31, 1995, an Executive Stock Option Plan
was adopted "to provide a competitive means by which the Company may seek,
acquire and retain highly qualified persons as officers, employees, directors
and consultants". Shares granted under this plan shall not exceed 850,000 shares
with a term of the option not greater than 7 years from the date granted. No
options have been issued to date under this plan.
During the year ended December 31, 1996, the Company awarded shares of
stock directly to employees. However, to comply with IRS regulations and the
Company's new capital structure stock options issued to employees in 1996 were
replaced by Incentive Stock Options in 1997. During the year ended December 31,
1996, the Board of Directors created new categories for Incentive Stock Options
(ISO). Employees who had qualified for common stock shares as part of their
current or future compensation qualified under this plan. A total of 29,700
common stock share options were issued to replace options earned in 1996. A
total of 86,300 stock options were granted under this category during the year
ended December 31, 1997.
An additional 123,025 common stock options were also issued to employees
in compensation for deferred loan repayments or deferred salaries at a ratio of
0.70 percent of one ISO to each $1 deferred for the year December 31, 1996.
Also, a further Stock Option category was created for Company Directors,
investors and consultants having outstanding matured loans to the Company.
Relating to this, Stock Options totaling 83,175 were granted during the year
ended December 31, 1996.
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<PAGE> 8
All stock options issued to date are exercisable at $.40. Stock options
for employees still employed by the Company must be exercised within 5 years of
earning the options. Options earned by others for service or lending to the
Company must be exercised within 3 years of earning the options.
The following is a summary of certain major provisions of the Option Plan:
General
Under the Option Plan, options covering shares of Common Stock are granted
to key employees and directors of, and consultants to, the Company. The options
are intended to qualify either as incentive stock options ("ISOs") pursuant to
Section 422 of the Code, or will constitute nonqualified stock options
("NQSOs"). Options may be granted at any time prior to April 30, 2009. Provided
the stockholders approve the Option Plan, a maximum of 2,000,000 shares of
Common Stock (subject to adjustment to prevent dilution) would be available for
issuance under the Option Plan.
Administration
The Option Plan will be administered by the Stock Option Committee,
comprised of no less than two nor more than five non-employee directors (the
"Stock Option Committee"). The Option Plan provides that the Stock Option
Committee has full and final authority to select the key employees, directors
and consultants to whom awards are granted, the number of shares of Common Stock
with respect to each option awarded, the exercise price or prices of each
option, the vesting and exercise periods of each option, whether an option may
be exercised as to less than all of the Common Stock subject to the option, and
such other terms and conditions of each option, if any, that are not
inconsistent with the provisions of the Option Plan. In addition, subject to
certain conditions, the Stock Option Committee is authorized to modify, extend
or renew outstanding options. In general, the Stock Option Committee is
authorized to construe, interpret and administer the Option Plan and the
provisions of the options granted thereunder, prescribe and amend rules for the
operation of the Option Plan and make all other determinations necessary or
advisable for its implementation and administration.
Eligibility
Eligibility to participate in the Option Plan is limited to key employees
and directors of, and consultants to, the Company and its subsidiaries as
determined by the Stock Option Committee. Because of the discretion possessed by
the Stock Option Committee with respect to key employees, directors and
consultants, it is not possible to indicate the number of persons who may be
selected to participate in the Option Plan, the number of options that may be
granted to them or the number of shares of Common Stock subject to each option.
Notwithstanding the foregoing, the number of shares of Common Stock for which
options can be granted to any individual (including, without limitation, a
"Covered Employee" as defined in Section 162(m)(3) of the Code) may not exceed
2,000,000 shares of Common Stock.
Terms of Options and Limitations on Right to Exercise
Under the Option Plan, the exercise price of options will not be less than
the fair market value of the Common Stock on the date of grant (and not less
than 110% of the fair market value in the case of an incentive stock option
granted to an optionee owning 10% or more of the Common Stock of the Company).
Options granted to employees, directors or consultants shall not be exercisable
after the expiration of ten years from the date of grant (or five years in the
case of incentive stock options granted to an optionee owning 10%
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or more of the Common Stock of the Company) or such earlier date determined by
the Board of Directors or Stock Option Committee.
The Option Plan permits the exercise of options by payment of the exercise
price in cash or by an exchange of shares of Common Stock of the Company
previously owned by the optionee, or a combination of both, in an amount equal
to the aggregate exercise price for the shares subject to the option or portion
thereof being exercised. The optionee is entitled to elect to pay all or a
portion of the aggregate exercise price by having shares of Common Stock having
a fair market value on the date of exercise equal to the aggregate exercise
price withheld by the Company or sold by a broker-dealer under certain
circumstances. In addition, upon the exercise of any option granted under the
Option Plan, the Company, in its discretion, may make financing available to the
optionee for the purchase of shares of Common Stock subject to the option on
such terms as the Stock Option Committee shall approve. An option may not be
exercised except (i) by the optionee, (ii) by a person who has obtained the
optionee's rights under the option by will or under the laws of descent and
distribution, or (iii) by a permitted transferee as contemplated by the Option
Plan.
Termination of Employment
The Stock Option Committee determines at the time each option is granted
the conditions that will apply to the exercise of such option in the event the
holder of an option ceases to be an employee or director of, or consultant to,
the Company or any of its subsidiaries for any reason. In the event of death of
an optionee while in the employ or while serving as a director of or consultant
to the Company or any of its subsidiaries, such option will be exercisable in
full within the year next succeeding the date of death or such other period as
may be specified in the option agreement, but in no case later than the
expiration date of such option.
Dilution or Other Adjustments
Under certain circumstances, the Stock Option Committee will make
adjustments with respect to the options, or any provisions of the Option Plan,
as it deems appropriate to prevent dilution or enlargement of option rights.
Amendment and Termination
The Board of Directors may amend, abandon, suspend or terminate the Option
Plan or any portion thereof at any time; provided, however, no amendment that
requires stockholder approval in order for the Option Plan to continue to comply
with Sections 162(m) or 422 of the Code or any other applicable law, rule or
regulation (including, without limitation, the Code, the Exchange Act or any
self-regulatory organization such as a national securities exchange) will be
made unless such amendment has received the requisite approval of stockholders.
In addition, no amendment may be made that adversely affects any of the rights
of an Optionee under any option theretofore granted, without such Optionee's
consent. The Option Plan is scheduled to expire on April 30, 2009.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
Under the Option Plan, the Company may grant options which, for federal
income tax purposes, (a) are treated as "incentive stock options" within the
meaning of Section 422 of the Code or (b) are treated as nonqualified options
subject to Section 83 of the Code. The federal income tax consequences of each
type of option are different for the participants and for the Company.
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<PAGE> 10
Incentive Stock Options
For an option granted pursuant to the Option Plan that qualifies as an
incentive stock option, present law provides: (a) the participant will not
realize taxable income upon either the receipt or the exercise of the option;
provided, however, that in connection with the computation of the alternative
minimum tax, the amount by which the fair market value of the Common Stock at
the time of exercise exceeds the exercise price generally will constitute an
adjustment item; (b) any gain or loss upon a disposition constituting a
qualifying disposition of shares acquired pursuant to the exercise of the option
will be treated as capital gain or loss (assuming that such shares are a capital
asset in the hands of the participant); and (c) no deduction will be allowed at
any time to the Company or any parent or subsidiary of the Company for federal
income tax purposes in connection with the grant or exercise of the option or a
disposition constituting a qualifying disposition of shares acquired pursuant to
the exercise of the option. A disposition of shares acquired upon exercise of an
incentive stock option will constitute a qualifying disposition if it does not
occur within two years of the granting of the option or within one year after
the transfer of substantially all of the incidents of ownership in the shares to
the participant, and the participant is an employee of the Company (or defined
affiliates) at all times from the grant of the option until three months prior
to exercise (twelve months in the case of total disability or death). A
disposition not satisfying such holding period requirements results in a
disqualifying disposition. If Common Stock acquired upon exercise of an
incentive stock option is disposed of by the participant in a disqualifying
disposition, the participant will be treated as receiving ordinary income equal
to the difference between the fair market value of the transferred shares on the
date of exercise and the exercise price of such shares, less in most cases any
decline in value of the shares from the date of exercise to the date of sale. In
the event the sales price received in a disqualifying disposition of such Common
Stock exceeds the value of the Common Stock on the date of exercise, the
disqualifying disposition also will result in capital gain to the extent of such
excess (assuming that such Common Stock is a capital asset in the hands of the
participant). The amount treated as ordinary Income to the participant because
of the disqualifying disposition will normally be allowed as a federal income
tax deduction of the Company (or any parent or subsidiary of the Company) for
compensation expense.
For purposes of computing a participant's capital gain or loss on the sale
of shares that were acquired under the Option Plan pursuant to the exercise of
an incentive stock option, the participant's basis in such shares generally will
be equal to any amount paid by the participant to the Company for the shares
plus the amount, if any, recognized as ordinary income to the participant with
respect to the shares due to a disqualifying disposition. The participant's
holding period for such shares generally should begin at the time of the
participant's exercise of an option.
The Company and any parent or subsidiary of the Company will not be liable
to any participant or other person if it is determined for any reason by the
Internal Revenue Service or any court having jurisdiction that any option
granted pursuant to the Option Plan does not qualify for tax treatment as an
incentive stock option under Section 422 of the Code.
Nonqualified Options
For an option granted pursuant to the Option Plan that does not qualify as
an incentive stock option, no taxable income will be realized by the participant
upon the grant of such a nonqualified option. A participant generally will
recognize ordinary taxable income (compensation), subject to withholding, upon
exercise of a nonqualified option in an amount equal to the excess of the fair
market value of the Common Stock on the date of exercise over the option price
paid.
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<PAGE> 11
For purposes of determining gain or loss upon a subsequent disposition of
Common Stock acquired upon the exercise of a nonqualified option, the
participant's basis in such shares will generally be equal to the purchase price
paid to the Company for the Common Stock increased by the amount, if any,
includable in the participant's taxable income with respect to the Common Stock.
The participant's holding period for determining whether gain or loss on such
subsequent disposition is short-term or long-term generally shall begin at the
time of the Optionee's exercise of the option.
The foregoing is intended as a summary of the effect of certain federal
income tax consequences associated with the Option Plan and does not purport to
be complete. It is recommended that participants consult their own tax advisors
for counseling. The tax treatment under foreign, state or local law is not
covered in this summary.
STOCKHOLDER APPROVAL
The affirmative vote of holders of a majority of the shares of Common
Stock, represented in person or by proxy and entitled to vote, at the Annual
Meeting is required to approve the Option Plan. The Board of Directors believes
the proposed Option Plan is in the best interest of the Company and its
stockholders and is important in order to help assure the ability of the Company
to continue to recruit and retain highly qualified key employees and directors.
THE BOARD RECOMMENDS A VOTE "FOR" THE COMPANY'S OPTION PLAN
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table and notes thereto set forth certain information known
to the Company with respect to the beneficial ownership of the Company's Common
Stock as of April 8, 1999 by (a) the "Named Executive Officers" identified under
the caption "Executive Compensation and Other Information," (b) each director of
the Company, (c) each person known by the Company to be the beneficial owner of
more than 5% of the Company's Common Stock, and (d) all executive officers and
directors of the Company as a group.
<TABLE>
<CAPTION>
Amount and
Nature of Beneficial Percent of
Name and Address of Beneficial Owner (1) Ownership(2) Class
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Quentin T. Kelly .................................................... 2,500,000 10%
Dr. Martin Beyer .................................................... 43,000 *
Joseph Cygler ....................................................... 250,000 1%
Peter Ferguson ...................................................... 162,000 *
Thomas Leyden ....................................................... 50,700 *
Dr. Russell Sturzebecker ............................................ 36,141 *
All executive officers and directors as a group
(6 persons) ......................................................... 15.8%
The George S. Mennen Revocable Trust ................................ 1,333,333 5.3%
</TABLE>
* Less than one percent
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<PAGE> 12
(1) The address for each person listed is Pennington Business Park, 55 Route 31
South, Pennington, New Jersey 08534.
(2) For purposes of this table, a person or group of persons is deemed to have
"beneficial ownership" of any shares of Common Stock which such person has the
right to acquire within 60 days of March 31, 1999. For purposes of computing the
percentage of outstanding shares of Common Stock held by each person or group of
persons named above, any security which such person or persons has or have the
right to acquire within such date is deemed to be outstanding but is not deemed
to be outstanding for the purpose of computing the percentage ownership of any
other person. Except as indicated in the footnotes to this table and pursuant to
applicable community property laws, the Company believes based on information
supplied by such persons, that the persons named in this table have sole voting
and investment power with respect to all shares of Common Stock which they
beneficially own.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act of 1934, as amended (the "Exchange
Act"), requires the Company's executive officers and directors and persons who
own more than ten percent of a registered class of the Company's equity
securities (collectively, the "Reporting Persons") to file reports of ownership
and changes in ownership with the Securities and Exchange Commission and to
furnish the Company with copies of these reports. The Company believes that all
filings required to be made by the Reporting Persons during the fiscal year
ended December 31, 1998 were made on a timely basis.
MANAGEMENT
The following table sets forth the names, ages and positions of the
executive officers and directors of the Company as of March 1, 1999. Their
respective backgrounds are described in "Matters to be Brought Before the
Meeting - Proposal One - Election of Directors," other than Messrs. Pell,
Rangarajan, Leyden, Ferguson and McNulty whose backgrounds are described
following the table:
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
- ---- --- -------------------------
<S> <C> <C>
Quentin T. Kelly 64 Chairman of the Board and Chief Executive Officer
John A. Pell 73 President and Chief Operating Officer
Dr. Anand Rangarajan 47 Vice President, General Manager
Thomas Leyden 43 Vice President, Marketing
Peter Ferguson 55 Vice President
Thomas McNulty, Jr. 35 Controller
Dr. Martin Beyer 67 Director
Joseph Cygler 63 Secretary and Director
Dr. Russell Sturzebecker 82 Director
</TABLE>
John A. Pell has served as President and Chief Operating Officer of the
Company since June 23, 1998. Mr. Pell was a senior officer with Chase Manhattan
Bank in New York and London where he was in charge of African banking activities
for U.S. Multinationals. He was Managing Director of a European Bank
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<PAGE> 13
Consortium and President of a trade finance banking organization in Hong Kong.
He is a graduate of Princeton University and the Wharton School (MBA) of the
University of Pennsylvania.
Dr. Anand Rangarajan, Vice President and General Manager, is a solar and water
pump specialist. He has 20 years experience in all aspects of the solar electric
business and has pioneered the development of several proprietary solar water
pumping systems, products and markets. His systems have been installed in over
20 countries. He holds his Ph.D. in Engineering from University of Wisconsin.
Thomas Leyden, Vice President of Marketing, has 16 years in the solar and
renewable energy industry. He has been president of a U.S. solar thermal company
and a Canadian spring water bottling company. Before joining WorldWater, he was
an executive with a photovoltaic manufacturing and marketing company that
conducted business in the United States, Europe and Asia. Mr. Leyden was the
founding president of the Maryland-DC Solar Energy Industry Association and
represents WorldWater in the national SEIA. He is a graduate of Princeton
University.
Peter I. Ferguson, Vice President of Administration, joined WorldWater in 1989.
He previously served as a vice president and general management executive and
accountant for companies in New York and New Jersey. He graduated from Rutgers
University.
Thomas McNulty, Jr., CPA MBA, Controller of the Company is a Certified Public
Accountant in New Jersey and Pennsylvania with his Masters Degree in
Accounting/Taxation. He is a member of the American Institute of Certified
Public Accountants, the New Jersey Society of Public Accountants, and the
Pennsylvania Institute of Certified Public Accountants.
MEETING ATTENDANCE AND COMMITTEES OF THE BOARD
The business of the Company is managed under the direction of the Board.
The Board meets during the Company's fiscal year to review significant
developments affecting the Company and to act on matters requiring Board
approval. The Board held two formal meeting and acted by unanimous written
consent eighteen times during the fiscal year ended December 31, 1998. All of
the directors attended at least 80% of the Board meetings.
Stock Option Committee. The Board of Directors will establish a Stock
Option Committee to administer the 1999 Incentive Stock Option Plan upon
approval by the shareholders. The committee will be comprised of at least two
non-employee directors.
The Board of Directors does not have a standing nominating committee,
compensation committee, or any other committee performing similar functions. The
functions customarily attributable to a nominating committee or a compensation
committee are performed by the Board of Directors as a whole.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY COMPENSATION TABLE
The following table sets forth information with respect to the
compensation paid by the Company to its chief executive officer and to each
other executive officer of the Company who received at least $100,000 in salary
and bonus during 1998 (the "Named Executive Officers").
Page -13-
<PAGE> 14
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION (1) AWARDS
----------------------- ------
SECURITIES
NAME AND FISCAL UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS (#) COMPENSATION
- ------------------ ---- ------ ----- ----------- ------------
<S> <C> <C> <C> <C> <C>
Quentin T. Kelly, 1998 $42,000 $0 $0 $0
Chairman & Chief Executive
Officer
</TABLE>
During 1998, no options to purchase shares of Common Stock were granted
under the Company's stock options plans.
DIRECTOR COMPENSATION
The Company does not pay its non-employee directors.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Included in notes payable and long-term debt at December 31, 1998 and
1997, are amounts payable to employees, directors and their immediate relatives
as follows:
<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
Directors $109,400 $379,750
Employees 110,000 41,400
Immediate relatives 38,000 12,000
-------- --------
Total $257,400 $433,150
======== ========
</TABLE>
Directors notes payable declined $270,350 primarily due to conversion of
such debt into common stock. This included conversion of a $100,000 note
payable to the Chairman into 200,000 shares of common stock.
The Company occupied space in 1998 and 1997 that is owned by its
Chairman/CEO and leased this space on a month to month basis. The amount paid to
the Chairman/CEO amounted to$30,000 in 1998 and 1997.
STOCKHOLDER PROPOSALS
A proper proposal submitted by a stockholder in accordance with applicable
rules and regulations for presentation at the Company's next annual meeting that
is received at the Company's principal executive office by December 31, 1999
will be included in the Company's proxy statement and form of proxy for that
meeting.
Page -14-
<PAGE> 15
PERSONS MAKING THE SOLICITATION
The enclosed proxy is solicited on behalf of the Board of Directors of the
Company. The cost of soliciting proxies in the accompanying form will be paid by
the Company. Officers of the Company may solicit proxies by mail, telephone or
telegraph. Upon request, the Company will reimburse brokers, dealers, banks and
trustees, or their nominees, for reasonable expenses incurred by them in
forwarding proxy material to beneficial owners of shares of the Common Stock.
INDEPENDENT PUBLIC ACCOUNTANTS
DeAngelis & Higgins, LLC., independent certified public accountants, has
been selected by the Board of Directors as the Company's independent auditor for
the current fiscal year. A representative of DeAngelis & Higgins, LLC. is
expected to be present at the Annual Meeting, will have an opportunity to make a
statement if he or she desires to do so and is expected to be available to
respond to appropriate questions.
OTHER MATTERS
The Board of Directors is not aware of any matter to be presented for
action at the meeting other than the matters set forth herein. Should any other
matter requiring a vote of stockholders arise, the proxies in the enclosed form
confer upon the person or persons entitled to vote the shares represented by
such proxies discretionary authority to vote the same in accordance with their
best judgment in the interest of the Company.
FINANCIAL STATEMENTS
The consolidated balance sheet of the Company as of December 31, 1998,
and the related consolidated statements of operations, stockholders'
deficiency, and cash flows for the year ended December 31, 1998 contained on
pages F1 through F25 of the Company's Annual Report on Form 10-KSB, the
Management's Discussion and Analysis or Plan of Operation contained on pages 11
through 12 of such Annual Report, and the Changes in and Disagreements with
Accountants on Accounting and Financial Disclosure on page 13 of such Annual
Report are incorporated by reference in this Proxy Statement. The remainder of
the Annual Report does not constitute a part of the proxy solicitation
material.
THE COMPANY WILL PROVIDE, WITHOUT CHARGE, TO EACH PERSON TO WHOM A COPY OF
THIS PROXY STATEMENT IS DELIVERED, UPON THE WRITTEN OR ORAL REQUEST OF SUCH
PERSON AND BY FIRST CLASS MAIL OR OTHER EQUALLY PROMPT MEANS WITHIN ONE BUSINESS
DAY OF RECEIPT OF SUCH REQUEST, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM
10-KSB. REQUESTS SHOULD BE DIRECTED TO THE ATTENTION OF JOHN A. PELL, WORLDWATER
CORP., PENNINGTON BUSINESS PARK, 55 ROUTE 31 SOUTH, PENNINGTON, NEW JERSEY
08534.
By Order of the Board of Directors,
QUENTIN T. KELLY,
Chairman and Chief
Executive Officer
May 7, 1999
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<PAGE> 16
EXHIBIT A
1999 STOCK OPTION PLAN
A-6
WORLDWATER CORP.
1999 INCENTIVE STOCK OPTION PLAN
ARTICLE I
Establishment, Purpose, and Duration
1.1 Establishment of the Plan. WorldWater Corp., a Nevada corporation
(the "Company"), hereby establishes an incentive compensation plan for the
Company and its subsidiaries to be known as the "1999 Incentive Stock Plan", as
set forth in this document. Unless otherwise defined herein, all capitalized
terms shall have the meanings set forth in Section 2.1 herein. The Plan permits
the grant of Incentive Stock Options, Non-qualified Stock Options and Restricted
Stock.
The Plan was adopted by the Board of Directors of the Company on
April 30, 1999 and shall become effective on _______________ (the "Effective
Date"), subject to the approval by vote of shareholders of the Company in
accordance with applicable laws.
1.2 Purpose of the Plan. The purpose of the Plan is to promote the
success of the Company and its subsidiaries by providing incentives to Key
Employees that will promote the identification of their personal interest with
the long-term financial success of the Company and with growth in shareholder
value. The Plan is designed to provide flexibility to the Company including its
subsidiaries, in its ability to motivate, attract, and retain the services of
Key Employees upon whose judgment, interest, and special effort the successful
conduct of its operation is largely dependent.
1.3 Duration of the Plan. The Plan shall commence on the Effective Date,
as described in Section 1.1 herein, and shall remain in effect, subject to the
right of the Board of Directors to terminate the Plan at any time pursuant to
Article XI herein, until June 16, 2009, at which time it shall terminate except
with respect to Awards made prior to, and outstanding on, that date which shall
remain valid in accordance with their terms.
ARTICLE II
Definitions
2.1 Definitions. Except as otherwise defined in the Plan, the following
terms shall have the meanings set forth below:
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<PAGE> 17
a. "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 under the Securities Exchange Act of 1934,
as amended (the "Exchange Act").
b. "Agreement" means a written agreement implementing the grant of
each Award signed by an authorized officer of the Company and by the
Participant.
c. "Award" means, individually or collectively, a grant under this
Plan of Incentive Stock Options, Non-qualified Stock Options and Restricted
Stock.
d. "Award Date" or "Grant Date" means the date on which an Award is
made by the Committee under this Plan.
e. "Beneficial Owner" shall have the meaning ascribed to such term
in Rule 13d-3 under the Exchange Act.
f. "Board" or "Board of Directors" means the Board of Directors of
the Company, unless otherwise indicated.
g. "Change in Control" shall be deemed to have occurred if the
conditions set forth in any one of the following paragraphs shall have been
satisfied:
(i) any Person (other than the Company, any Subsidiary, a
trustee or other fiduciary holding securities under any employee benefit plan of
the Company, or its Subsidiaries), who or which, together with all Affiliates
and Associates of such Person, is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company representing 20% or more of the
combined voting power of the Company's then outstanding securities; or (ii) if,
at any time after the Effective Date, the composition of the Board of Directors
of the Company shall change such that a majority of the Board of the Company
shall no longer consist of Continuing Directors; or (iii) if at any time, (1)
the Company shall consolidate with, or merge with, any other Person and the
Company shall not be the continuing or surviving corporation, (2) any Person
shall consolidate with or merge with the Company, and the Company shall be the
continuing or surviving corporation and, in connection therewith, all or part of
the outstanding Stock shall be changed into or exchanged for stock or other
securities of any other Person or cash or any other property, (3) the Company
shall be a party to a statutory share exchange with any other Person after which
the Company is a subsidiary of any other Person, or (4) the Company shall sell
or otherwise transfer 50% or more of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to any Person or Persons.
h. "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
i. "Committee" means the Board of Directors of the Company or
committee established by the Board to administer the Plan pursuant to Article
III herein, all of the members of
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<PAGE> 18
which shall be "non-employee directors" as defined in Rule 16b-3, as amended,
under the Exchange Act or any similar or successor rule. There shall be no
fewer than three, nor more than 5, members on the Committee. Unless otherwise
determined by the Board of Directors of the Company, the wholly-owned
subsidiary of the Company, shall constitute the Committee.
j. "Company" means WorldWater Corp., or any successor thereto as
provided in Article XIII herein.
k. "Continuing Director" means an individual who was a member of the
Board of Directors of the Company on the Effective Date or whose subsequent
nomination for election or re-election to the Board of Directors of the Company
was recommended or approved by the affirmative vote of two-thirds of the
Continuing Directors then in office.
l. "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
m. "Fair Market Value" of a Share means the fair market value as
determined pursuant to a reasonable method adopted by the Committee in good
faith for such purpose.
n. "Incentive Stock Option" or "ISO" means an option to purchase
Stock, granted under Article VI herein, which is designated as an incentive
stock option and is intended to meet the requirements of Section 422A of the
Code.
o. "Key Employee" means an officer or other key employee of the
Company or its Subsidiaries, who, in the opinion of the Committee, can
contribute significantly to the growth and profitability of, or perform services
of major importance to, the Company and its Subsidiaries.
p. "Non-qualified Stock Option" or "NQSO" means an option to
purchase Stock, granted under Article VI herein, which is not intended to be an
Incentive Stock Option.
q. "Option" means an Incentive Stock Option or a Non-qualified Stock
Option.
r. "Participant" means a Key Employee who is granted an Award under
the Plan.
s. "Period of Restriction" means the period during which the
transfer of Shares of Restricted Stock is restricted, pursuant to Article VIII
herein.
t. "Person" shall have the meaning ascribed to such term in Section
3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof,
including a "group" as defined in Section 13(d).
Page -18-
<PAGE> 19
u. "Plan" means the WorldWater Corp. 1999 Incentive Stock Plan, as
described and as hereafter from time to time amended.
v. "Related Option" means an Option with respect to which a Stock
Appreciation Right has been granted.
w. "Restricted Stock" means an Award of Stock granted to a
Participant pursuant to Article VII herein.
x. "Stock" or "Shares" means the common stock of the Company.
y. "Subsidiary" shall mean a corporation at least 50% of the total
combined voting power of all classes of stock of which is owned by the Company,
either directly or through one or more of its Subsidiaries.
ARTICLE III
Administration
3.1 The Committee. Except as otherwise reserved for consideration and
approval by the Board of Directors, the Plan shall be administered by the
Committee which shall have all powers necessary or desirable for such
administration.
(a) Subject to the provisions of the Plan, the Committee shall have
the following plenary powers: (i) to establish, amend or waive rules or
regulations for the Plan's administration; (ii) except in those instances in
which a dispute arises, to construe and interpret the Agreements and the Plan;
and (iii) to make all other determinations and take all other actions necessary
or advisable for the administration of the Plan.
(b) (1) Subject to the provisions of the Plan, the Committee shall
have the following qualified powers that shall be subject to approval, amendment
and modification by the Board of Directors: (i) to determine the terms and
conditions upon which the Awards may be made and exercised; (ii) to determine
all terms and provisions of each Agreement, which need not be identical; (iii)
to construe and interpret the Agreements and the Plan in the event of a dispute
between the Participant and the Committee; and (iv) to accelerate the
exercisability of any Award or the termination of any Period of Restriction.
(2) In approving the Committee's determinations or other
recommendations under (b)(1), the Board of Directors may make such amendments,
modifications or qualifications as it deems in the best interest of the Company,
and the Board shall provide specific instructions to the Committee for
implementation of the same.
(3) In its sole discretion, the Board of Directors may waive
by resolution one or more of its approval rights under (b)(1) and authorize the
Committee to proceed without seeking
Page -19-
<PAGE> 20
further approvals either on a case by case basis or permanently until further
notice from the Board. Such waiver shall be communicated in writing to the
Committee which shall maintain a permanent record of such waiver(s).
(c) The express grant in this Plan of any specific power to the
Committee shall not be construed as limiting any power or authority of the
Committee, except as otherwise stated in paragraph 3.1(b).
3.2 Selection of Participants. The Committee shall have the authority to
grant Awards under the Plan, from time to time, to such Key Employees as may be
selected by it. Each Award shall be evidenced by an Agreement.
3.3 Decisions Binding. All determinations and decisions made by the
Board or the Committee pursuant to the provisions of the Plan shall be final,
conclusive and binding.
3.4 Rule 16b-3 Requirements. Notwithstanding any other provision of the
Plan, the Board or the Committee may impose such conditions on any Award, and
amend the Plan in any such respects, as may be required to satisfy the
requirements of Rule 16b-3, as amended (or any successor or similar rule), under
the Exchange Act.
3.5 Indemnification of Committee. In addition to such other rights of
indemnification as they may have as directors or as members of the Committee,
the members of the Committee shall be indemnified by the Company against
reasonable expenses, including attorneys' fees, actually and reasonably incurred
in connection with the defense of any action, suit or proceeding, or in
connection with any appeal therein, to which they or any of them may be a party
by reason of any action taken or failure to act under or in connection with the
Plan or any Award granted or made hereunder, and against all amounts reasonably
paid by them in settlement thereof or paid by them in satisfaction of a judgment
in any such action, suit or proceeding, if such members acted in good faith and
in a manner which they believed to be in, and not opposed to, the best interests
of the Company and its Subsidiaries.
3.6 Certain Determinations. In connection with the Committee's good
faith determination of "Fair Market Value" as required herein, the Committee
may, as guidance, take into consideration the book value of the Common Stock of
the Company, the relationship between the traded price and book value of shares
for financial institutions of similar size and similar operating results to the
Company and its subsidiary bank, any reasonably recent trades of the Common
Stock of the Company brought to the attention of the Committee and such
additional relevant information as the Committee in its judgment deems
necessary. In its sole discretion, the Committee may, but is not obligated to,
consult with and/or engage an investment banker or other appropriate advisor to
advise the Committee in connection with its good faith determination of "Fair
Market Value" herein.
ARTICLE IV
Stock Subject to the Plan
Page -20-
<PAGE> 21
4.1 Number of Shares. Subject to adjustment as provided in Section 4.3
herein, the maximum aggregate number of Shares that may be issued pursuant to
Awards made under the Plan shall not exceed 2,000,000. No more than one-third of
the aggregate number of such Shares shall be issued in connection with
Restricted Stock Awards. Except as provided in Sections 4.2 herein, the issuance
of Shares in connection with the exercise of, or as other payment for Awards,
under the Plan shall reduce the number of Shares available for future Awards
under the Plan.
4.2 Lapsed Awards or Forfeited Shares. If any Award granted under this
Plan (for which no material benefits of ownership have been received, including
dividends) terminates, expires, or lapses for any reason other than by virtue of
exercise of the Award, or if Shares issued pursuant to Awards (for which no
material benefits of ownership have been received, including dividends) are
forfeited, any Stock subject to such Award again shall be available for the
grant of an Award under the Plan.
4.3 Capital Adjustments. The number and class of Shares subject to each
outstanding Award, the Option Price and the aggregate number and class of Shares
for which Awards thereafter may be made shall be subject to such adjustment, if
any, as the Committee in its sole discretion deems appropriate to reflect such
events as stock dividends, stock splits, recapitalizations, mergers,
consolidations or reorganizations of or by the Company.
ARTICLE V
Eligibility
Persons eligible to participate in the Plan include all employees of the
Company and its Subsidiaries who, in the opinion of the Committee, are Key
Employees, and directors.
ARTICLE VI
Stock Options
6.1 Grant of Options. Subject to the terms and provisions of the Plan,
Options may be granted to Key Employees at any time and from time to time as
shall be determined by the Committee. The Committee shall have complete
discretion in determining the number of Shares subject to Options granted to
each Participant, provided, however, that the aggregate Fair Market Value
(determined at the time the Award is made) of Shares with respect to which any
Participant may first exercise ISOs granted under the Plan during any calendar
year may not exceed $100,000 or such amount as shall be specified in Section
422A of the Code and rules and regulation thereunder.
6.2 Option Agreement. Each Option grant shall be evidenced by an Agreement
that shall specify the type of Option granted, the Option Price (as hereinafter
defined), the duration of the Option, the number of Shares to which the Option
pertains, any conditions imposed upon the exercisability of Options in the event
of retirement, death, disability or other termination of
Page -21-
<PAGE> 22
employment, and such other provisions as the Committee shall determine. The
Agreement shall specify whether the Option is intended to be an Incentive Stock
Option within the meaning of Section 422A of the Code, or Nonqualified Stock
Option not intended to be within the provisions of Section 422A of the Code.
6.3 Option Price. The exercise price per share of Stock covered by an
Option ("Option Price") shall be determined by the Committee subject to the
following limitations. The Option Price shall not be less than 100% of the Fair
Market Value of such Stock on the Grant Date. An ISO granted to an employee who,
at the time of grant, owns (within the meaning of Section 425(d) of the Code)
Stock possessing more than 10% of the total combined voting power of all classes
of Stock of the Company, shall have an Option Price which is at least equal to
110% of the Fair Market Value of the Stock.
6.4 Duration of Options. Each Option shall expire at such time as the
Committee shall determine at the time of grant provided, however, that no ISO
shall be exercisable later than the tenth (10th) anniversary date of its Award
Date.
6.5 Exercisability. Options granted under the Plan shall be exercisable at
such times and be subject to such restrictions and conditions as the Committee
shall determine, which need not be the same for all Participants. No Option,
however, shall be exercisable until the expiration of at least six months after
the Award Date, except that such limitation shall not apply in the case of death
or disability of the Participant.
6.6 Method of Exercise. Options shall be exercised by the delivery of a
written notice to the Company in the form prescribed by the Committee setting
forth the number of Shares with respect to which the Option is to be exercised,
accompanied by full payment for the Shares. The Option Price shall be payable to
the Company in full either in cash, by delivery of Shares of Stock valued at
Fair Market Value at the time of exercise, delivery of a promissory note (in the
Committee's discretion) or by a combination of the foregoing. As soon as
practicable, after receipt of written notice and payment, the Company shall
deliver to the Participant, stock certificates in an appropriate amount based
upon the number of Options exercised, issued in the Participant's name. No
Participant who is awarded Options shall have rights as a shareholder until the
date of exercise of the Options.
6.7 Restrictions on Stock Transferability. The Committee shall impose such
restrictions on any Shares acquired pursuant to the exercise of an Option under
the Plan as it may deem advisable, including, without limitation, restrictions
under the applicable Federal securities law, under the requirements of the
National Association of Securities Dealers, Inc. or any stock exchange upon
which such Shares are then listed and under any blue sky or state securities
laws applicable to such Shares.
6.8 Nontransferability of Options. No Option granted under the Plan may be
sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
otherwise than by will or by
Page -22-
<PAGE> 23
the laws of descent and distribution. Further, all Options granted to a
Participant under the Plan shall be exercisable during his lifetime only by such
Participant or his guardian or legal representative.
ARTICLE VII
Restricted Stock
7.1 Grant of Restricted Stock. Subject to the terms and provisions of the
Plan, the Committee, at any time and from time to time, may grant shares of
Restricted Stock under the Plan to such Participants and in such amounts as it
shall determine. Participants receiving Restricted Stock Awards are not required
to pay the Company therefor (except for applicable tax withholding) other than
the rendering of services.
7.2 Restricted Stock Agreement. Each Restricted Stock grant shall be
evidenced by an Agreement that shall specify the Period of Restriction, the
number of Restricted Stock Shares granted, and such other provisions as the
Committee shall determine.
7.3 Transferability. Except as provided in this Article VII and subject to
the limitation in the next sentence, the Shares of Restricted Stock granted
hereunder may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated until the termination of the applicable Period of
Restriction or upon earlier satisfaction of other conditions as specified by the
Committee in its sole discretion and set forth in the Agreement. No shares of
Restricted Stock shall be sold until the expiration of at least six months after
the Award Date, except that such limitation shall not apply in the case of death
or disability of the Participant. All rights with respect to the Restricted
Stock granted to a Participant under the Plan shall be exercisable during his
lifetime only by such Participant or his guardian or legal representative.
7.4 Other Restrictions. The Committee shall impose such other restrictions
on any Shares of Restricted Stock granted pursuant to the Plan as it may deem
advisable including, without limitation, restrictions under applicable Federal
or state securities laws, and may legend the certificates representing
Restricted Stock to give appropriate notice of such restrictions.
7.5 Certificate Legend. In addition to any legends placed on certificates
pursuant to Section 7.4 herein, each certificate representing shares of
Restricted Stock granted pursuant to the Plan shall bear the following legend:
"The sale or other transfer of the Shares of Stock represented by this
certificate, whether voluntary, involuntary, or by operation of law, is
subject to certain restrictions on transfer set forth in the 1999
Incentive Stock Plan of WorldWater Corp., in the rules and administrative
procedures adopted pursuant to such Plan, and in an Agreement dated
June 16, 1999. A copy of the Plan, such rules and procedures, and such
Restricted Stock Agreement may be obtained from the Secretary of
WorldWater Corp."
Page -23-
<PAGE> 24
7.6 Removal of Restrictions. Except as otherwise provided in this Article,
Shares of Restricted Stock covered by each Restricted Stock Award made under the
Plan shall become freely transferable by the Participant after the last day of
the Period of Restriction. Once the Shares are released from the restrictions,
the Participant shall be entitled to have the legend required by Section 7.5
herein removed from his Stock certificate.
7.7 Voting Rights. During the Period of Restriction, Participants holding
Shares of Restricted Stock granted hereunder may exercise full voting rights
with respect to those Shares.
7.8 Dividends and Other Distributions. During the Period of Restriction,
Participants holding shares of Restricted Stock granted hereunder shall be
entitled to receive all dividends and other distributions paid with respect to
those shares while they are so held. If any such dividends or distributions are
paid in Shares, the Shares shall be subject to the same restrictions on
transferability as the Shares of Restricted Stock with respect to which they
were distributed.
7.9 Termination of Employment Due to Retirement. Unless otherwise provided
in the Agreement, in the event that a Participant terminates his employment with
the Company or one of its Subsidiaries because of normal retirement (as defined
in the rules of the Company in effect at the time), any remaining Period of
Restriction applicable to the Restricted Stock Shares pursuant to Section 7.3
herein shall automatically terminate and, except as otherwise provided in
Section 7.4 herein the Shares of Restricted Stock shall thereby be free of
restrictions and freely transferable. Unless otherwise provided in the
Agreement, in the event that a Participant terminates his employment with the
Company because of early retirement (as defined in the rules of the Company in
effect at the time), the Committee, in its sole discretion, may waive the
restrictions remaining on any or all Shares of Restricted Stock pursuant to
Section 7.3 herein and add such new restrictions to those Shares of Restricted
Stock as it deems appropriate.
7.10 Termination of Employment Due to Death or Disability. In the event a
Participant's employment is terminated because of death or disability during the
Period of Restriction, any remaining Period of Restriction applicable to the
Restricted Stock pursuant to Section 7.3 herein shall automatically terminate
and, except as otherwise provided in Section 7.4 herein the shares of Restricted
Stock shall thereby be free of restrictions and fully transferable.
7.11 Termination of Employment for Other Reasons. Unless otherwise
provided in the Agreement, in the event that a Participant terminates his
employment with the Company for any reason other than for death, disability, or
retirement, as set forth in Sections 7.9 and 7.10 herein, during the Period of
Restriction, then any shares of Restricted Stock still subject to restrictions
as of the date of such termination shall automatically be forfeited and returned
to the Company.
ARTICLE VIII
Change in Control
Page -24-
<PAGE> 25
In the event of a Change in Control of the Company, the Committee, as
constituted before such Change in Control, in its sole discretion may, as to any
outstanding Award, either at the time the Award is made or any time thereafter,
take any one or more of the following actions: (i) provide for the acceleration
of any time periods relating to the exercise or realization of any such Award so
that such Award may be exercised or realized in full on or before a date
initially fixed by the Committee; (ii) provide for the purchase or settlement of
any such Award by the Company, upon a Participant's request, for an amount of
cash equal to the amount which could have been obtained upon the exercise of
such Award or realization of such Participant's rights had such Award been
currently exercisable or payable; (iii) make such adjustment to any such Award
then outstanding as the Committee deems appropriate to reflect such Change in
Control; or (iv) cause any such Award then outstanding to be assumed, or new
rights substituted therefor, by the acquiring or surviving corporation in such
Change in Control.
ARTICLE IX
Modification, Extension and Renewals of Awards
Subject to the terms and conditions and within the limitations of the
Plan, the Committee may modify, extend or renew outstanding Awards, or, if
authorized by the Board, accept the surrender of outstanding Awards (to the
extent not yet exercised) granted under the Plan and authorize the granting of
new Awards pursuant to the Plan in substitution therefor, and the substituted
Awards may specify a lower exercise price than the surrendered Awards, a longer
term than the surrendered Awards or may contain any other provisions that are
authorized by the Plan. The Committee may also modify the terms of any
outstanding Agreement. Notwithstanding the foregoing, however, no modification
of an Award, shall, without the consent of the Participant, adversely affect the
rights or obligations of the Participant.
ARTICLE X
Amendment, Modification and Termination of the Plan
10.1 Amendment, Modification and Termination. At any time and from time to
time, the Board may terminate, amend, or modify the Plan. Such amendment or
modification may be without shareholder approval except to the extent that such
approval is required by the Code, pursuant to the rules under Section 16 of the
Exchange Act, by any national securities exchange or system on which the Stock
is then listed or reported, by any regulatory body having jurisdiction with
respect thereto or under any other applicable laws, rules or regulations.
10.2 Awards Previously Granted. No termination, amendment or modification
of the Plan other than pursuant to Section 4.3 herein shall in any manner
adversely affect any Award theretofore granted under the Plan, without the
written consent of the Participant.
ARTICLE XI
Withholding
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<PAGE> 26
11.1 Tax Withholding. The Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy Federal, State and local taxes (including the
Participant's FICA obligation) required by law to be withheld with respect to
any grant, exercise, or payment made under or as a result of this Plan.
11.2 Stock Withholding. With respect to withholding required upon the
exercise of Nonqualified Stock Options, or upon the lapse of restrictions on
Restricted Stock, or upon the occurrence of any other similar taxable event,
Participants may elect, subject to the approval of the Committee, to satisfy the
withholding requirement, in whole or in part, by having the Company withhold
Shares of Stock having a Fair Market Value equal to the amount required to be
withheld. The value of the Shares to be withheld shall be based on Fair Market
Value of the Shares on the date that the amount of tax to be withheld is to be
determined. All elections shall be irrevocable and be made in writing, signed by
the Participant on forms approved by the Committee in advance of the day that
the transaction becomes taxable.
ARTICLE XII
Successors
All obligations of the Company under the Plan, with respect to Awards
granted hereunder, shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation or otherwise, of all or substantially all of the business
and/or assets of the Company.
ARTICLE XIII
General
13.1 Requirements of Law. The granting of Awards and the issuance of
Shares of Stock under this Plan shall be subject to all applicable laws, rules,
and regulations, and to such approvals by any governmental agencies or self
regulatory organizations (i.e. exchanges) as may be required.
13.2 Effect of Plan. The establishment of the Plan shall not confer upon
any Key Employee any legal or equitable right against the Company, a Subsidiary
or the Committee, except as expressly provided in the Plan. The Plan does not
constitute an inducement or consideration for the employment of any Key
Employee, nor is it a contract between the Company or any of its Subsidiaries
and any Key Employee. Participation in the Plan shall not give any Key Employee
any right to be retained in the service of the Company or any of its
Subsidiaries.
13.3 Creditors. The interests of any Participant under the Plan or any
Agreement are not subject to the claims of creditors and may not, in any way, be
assigned, alienated or encumbered.
13.4 Governing Law. The Plan, and all Agreements hereunder, shall be
governed, construed and administered in accordance with and governed by the laws
of the State of Nevada and
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<PAGE> 27
the intention of the Company is that ISOs granted under the Plan qualify as such
under Section 422A of the Code.
13.5 Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
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<PAGE> 28
EXHIBIT B
[FRONT OF PROXY CARD]
WORLDWATER CORP.
BOARD OF DIRECTORS PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS AT
2:00 P.M., WEDNESDAY, JUNE 16, 1999
The undersigned stockholder of WorldWater Corp. (the "Company") hereby
appoints Quentin T. Kelly and John A. Pell, or either of them, as proxies, each
with full powers of substitution, to vote the shares of the undersigned at the
above-stated Annual Meeting and at any adjournment(s) thereof:
(1) ELECTION OF DIRECTORS:
<TABLE>
<S> <C>
[ ] FOR the nominee listed below [ ] WITHHOLD AUTHORITY
(except as provided to the contrary below) to vote for the nominee listed below
</TABLE>
Quentin T. Kelly
Dr. Martin Beyer
Joseph Cygler
Rolf Hafeli
Dr. Russell Sturzebecker
(INSTRUCTION: To withhold authority to vote for any individual nominee(s),
write that nominee's name on the space provided below):
(2) Approval of the 1999 Incentive Stock Option Plan:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(3) Approval of the increase in the authorized capital stock of the
Company from 30,000,000 shares to 50,000,000 Shares.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(4) On any other business that may properly come before the meeting;
hereby revoking any proxy or proxies heretofore given by the undersigned.
(Please sign on the reverse side)
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<PAGE> 29
[BACK OF PROXY CARD]
(Continued from reverse side)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND WILL BE
VOTED IN ACCORDANCE WITH THE SPECIFICATIONS MADE ON THE REVERSE SIDE. IF A
CHOICE IS NOT INDICATED WITH RESPECT TO ITEMS (1), (2) (3) AND (4), THIS PROXY
WILL BE VOTED "FOR" SUCH ITEMS. THE PROXIES WILL USE THEIR DISCRETION WITH
RESPECT TO ANY MATTER REFERRED TO IN ITEM (4). THIS PROXY IS REVOCABLE AT ANY
TIME BEFORE IT IS EXERCISED.
Receipt herewith of the Company's Notice of Meeting and Proxy Statement, dated
May , 1999, is hereby acknowledged.
Dated: , 1999
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
(Signature of Stockholder(s))
(Joint owners must EACH sign. Please sign EXACTLY
as your name(s) appear(s) on this card. When
signing as attorney, trustee, executor,
administrator, guardian or corporate officer,
please give your FULL title.)
PLEASE SIGN, DATE AND MAIL TODAY.
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