SECURITIES AND EXCHANGE COMMISSION
WASHINGTON DC 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report: May 22, 1999
(Date of earliest event reported)
Bion Environmental Technologies, Inc.
(Exact Name of Registrant as Specified in its Charter
Colorado 0-19333 84-1176672
(State of (Commission (I.R.S. Employer
Incorporation) File No.) Identification No.)
555 17th Street, Suite 3310, Denver, Colorado 80202
(Address and Zip Code of Principal Executive Offices)
Registrant's telephone number including area code: (303) 294-0750
<PAGE>
ITEM 5. OTHER EVENTS.
1. Effective May 22, 1999, Bion Environmental Technologies, Inc. (the
"Company") issued a convertible note for $260,000 to the LTLK Defined
Benefit Plan ("DBP"), a shareholder in return for the assignment to the
Company of two mortgage notes originally held by DBP. See Exhibit 10.1.
2. During the period from May 22, 1999 through June 30, 1999, LoTayLingKyur,
Inc. ("LTLK"), a shareholder of the Company, advanced $240,079.19 to the
Company, which sum has been added to the convertible promissory note set
forth at Exhibit 10.1 to the Company's Form 8-K dated May 21, 1999.
3. On June 1, 1999, the Company issued four H16 Warrants to purchase 356,000
shares of common stock at $2.25 per share (adjusted for the recent stock
dividend) (in the form attached hereto as Exhibit 10.3) to three
officer/directors (153,000 to Jon Northrop, Chief Executive Officer;
122,000 to Jere Northrop, Chief Technical Officer; and 63,000 to M. Duane
Stutzman, Chief Financial Officer) and one additional employee for services
rendered. See Exhibit 10.2.
4. On June 1, 1999, the Company issued 40,000 options under its Fiscal Year
1994 Incentive Plan to one shareholder for professional services rendered.
See Exhibit 10.3.
5. The Company's relatively complex capital structure as of June 30, 1999 is
set forth below. See Exhibit 10.4.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BION ENVIRONMENTAL TECHNOLOGIES, INC.
Date: July 22, 1999 By: /s/ M. Duane Stutzman
-----------------------------
M. Duane Stutzman, Chief
Financial Officer
<PAGE>
INDEX TO EXHIBITS
Financial Statements and Exhibits.
10.1 Promissory note to the LTLK Defined Benefit Plan.
10.2 Form of Class H16 Warrant.
10.3 Form of option issued under the Company's Fiscal Year 1994 Incentive Plan.
10.4 Capital Structure.
Exhibit 10.1
Initial Principal: $260,000
Date Due: December 31, 2001
PROMISSORY NOTE ("Note")
FOR VALUE RECEIVED, the undersigned, Bion Environmental Technologies,
Inc., a Colorado corporation ("MAKER"), hereby promises to pay to the order of
the LTLK Deferred Benefit Plan, ("HOLDER"), and its successors and assignees, at
409 Spruce Street, Boulder, Colorado 80302, or at such other place as the HOLDER
of this Note may from time to time designate in writing, all sums due under this
Note (plus interest) in lawful and immediately available money of the United
States. The initial principal of this loan is $260,000. Simple interest shall be
accrued at one percent (1.0%) per month from date owed by MAKER. All outstanding
principal and interest shall be due and payable on or before December 31, 2001,
if not previously paid. If this Note or interest due hereunder is not paid when
due or declared due hereunder, the principal shall draw interest at the rate of
one and one half percent (1.5%) per month.
The outstanding principal and interest due hereunder shall be convertible,
in whole or in part, at the option of HOLDER, into shares of MAKER's common
stock ("Shares") at a price of $2.00 per share (equitably adjusted for
subsequent stock splits, dividends, mergers, etc.) at any time prior to payment
by MAKER of such principal and interest. MAKER shall give HOLDER 90 days' notice
of intent to pay the principal and interest of this Note during which period
HOLDER may elect to convert this Note to MAKER's common stock. Upon issuance,
MAKER represents that all shares received as a result of conversion of this Note
shall be fully-paid and non-assessable.
As additional consideration for making this Note, MAKER will issue one (1)
X Warrant, to purchase one share of MAKER's common stock at a price of $8.00 per
share (equitably adjusted for subsequent stock splits, dividends, mergers, etc.,
subsequent to the dividend declared May 21, 1999) for a 24 month period
commencing January 1, 2000, for each $1.00 of principal amount of the Note
advanced by Holder (no X Warrants will be issued for interest accumulated on the
principal amount of this Note).
Upon default by the MAKER of the timely payment of principal or interest
due hereunder or upon any Event of Default as hereinafter defined, the HOLDER
may, in its sole discretion, withhold any payments due and payable to MAKER and
apply same to the MAKER's obligations hereunder. In addition, upon any Event of
Default, the HOLDER may declare the full amount of this Note immediately due and
payable.
If any one or more of the following events ("Events of Default") shall
occur for any reason whatsoever (and whether such occurrence shall be voluntary
or involuntary or come about or be effected by operation of law, pursuant to or
in compliance with any judgment, decree of order of any court, or any order,
rule or regulation of any administrative or governmental body, or otherwise) the
HOLDER of this Note may, at its option, upon written notice to MAKER, declare
this Note and any other promissory note issued by MAKER to HOLDER (whether or
not then due in accordance with its terms) to be due and payable, whereupon the
entire balance of this Note shall forthwith become and be due and payable:
(a) MAKER fails to make payment of principal or of interest on this
Note or any other obligation of MAKER when such shall become due and payable,
whether at the stated maturity thereof or by acceleration or otherwise;
(b) MAKER (1) admits its inability to pay its debts as they become
due; (2) files a petition in bankruptcy or makes a petition to take advantage of
an insolvency act; (3) makes an assignment for the benefit of creditors; (4)
commences a proceeding for the appointment of a receiver, trustee, liquidator,
or conservator of itself or of the whole or any substantial part of its
properties; (5) files a petition or answer seeking reorganization or arrangement
or similar relief under the federal bankruptcy laws or any other applicable law
or statute or the United States or any State;
(c) MAKER (1) is adjudged as bankrupt, (2) a court enters an order,
judgment or decree, appointing a receiver, trustee, liquidator or conservator of
MAKER or of the whole or any substantial part of its properties, or approve a
petition filed against MAKER seeking reorganization or similar relief under the
federal bankruptcy laws or any other applicable law or statute of the United
States or any state; (3) under the provisions of any other law for the relief or
aid of debtors, a court assumes custody or control of MAKER or the whole or any
substantial part of its properties; (4) there is commenced against MAKER any
proceeding for any of the foregoing relief; (5) a petition in bankruptcy is
filed against MAKER; or (6) MAKER by any act indicates its consent to approval
of or acquiescence in any such proceeding or petition.
Except as otherwise hereinabove expressly provided, MAKER hereby waives
diligence, demand, protest, presentment and all notices (whether of nonpayment,
dishonor, protest, acceleration or otherwise) and consents to acceleration of
the time of payment, surrender or substitution of security or forbearance, or
other indulgence, without notice.
Jurisdiction and venue shall be in a court of general jurisdiction located
in Boulder, Colorado. In the event that litigation is necessary to collect the
principal (and interest) of the Note, HOLDER shall be entitled to reasonable
attorneys' fees and litigation costs associated therewith.
BION ENVIRONMENTAL TECHNOLOGIES, INC.
By: __________________________________
Authorized Officer
Date: May 22, 1999
Exhibit 10.2
Void after 3:30 p.m., Denver Time, on December 31, 2001
Warrant to Purchase
__________ Shares
of Common Stock
CLASS H16 WARRANT TO PURCHASE COMMON STOCK
OF
BION ENVIRONMENTAL TECHNOLOGIES, INC.
This is to certify that ______________ ("Holder"), is entitled to purchase,
subject to the provisions of this Warrant, from Bion Environmental Technologies,
Inc., a Colorado corporation ("Company"), at any time on or after January 1,
2000, and not later than 3:30 p.m., Denver Time, on December 31, 2001, unless
extended as provided in Section (a) below __________ shares of common stock, no
par value per share, of the Company ("Common Stock") at a purchase price per
share of $2.25 (in cash or fair market value of property acceptable to the
Company). The number of shares of Common Stock to be received upon the exercise
of this Warrant and the price to be paid for a share of Common Stock may be
adjusted from time to time as hereinafter set forth. The shares of Common Stock
deliverable upon such exercise, and as adjusted from time to time, are
hereinafter sometimes referred to as "Warrant Stock" and the exercise price of a
share of Common Stock in effect at any time and as adjusted from time to time is
hereinafter sometimes referred to as the "Exercise Price."
(a) Exercise of Warrant. Subject to the provisions of Sections (k) hereof,
this Warrant may be exercised in whole or in part at any time or from time to
time on or after January 1, 2000, but not later than 3:30 p.m., Denver time on
December 31, 2001, or if such date is a day on which banking institutions are
authorized by law to close, then on the next succeeding day which shall not be
such a day, by presentation and surrender hereof to the Company or at the office
of its stock transfer agent, if any, with the Purchase Form annexed hereto duly
executed and accompanied by payment of the Exercise Price (in cash or equivalent
value) for the number of shares specified in such form, together with all
federal and state taxes applicable upon such exercise. The Company may
unilaterally extend the time within which the Warrant may be exercised but is
not obligated to do so, but not longer than twelve (12) months. The Company may
unilaterally reduce the exercise price per share. If this Warrant should be
exercised in part only, the Company shall, upon surrender of this Warrant for
cancellation, execute and deliver a new Warrant evidencing the right hereunder.
Upon receipt by the Company of this Warrant at the office or agency of the
Company, in proper form for exercise, the Holder shall be deemed to be the
holder of record of the shares of Common Stock issuable upon such exercise,
notwithstanding that the stock transfer books of the Company shall then be
closed or that certificates representing such shares of Common Stock shall not
then be actually delivered to the Holder.
(b) Reservation of shares. The Company, hereby agrees that at all times
subsequent hereto there shall be reserved for issuance and/or delivery upon
exercise of this Warrant such number of shares of its Common Stock as shall be
required for issuance or delivery upon exercise of this Warrant ("Warrant
Stock").
(c) Fractional Shares. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. With
respect to any fraction of a share called for upon any exercise hereof, the
Company shall pay to the Holder an amount in cash equal to such fraction
multiplied by the current market value of such fractional share, determined as
follows:
(1) If the Common Stock is listed on a national securities exchange
or admitted to unlisted trading privileges on such exchange, the current
value shall be the last reported sale price of the Common Stock on such
exchange on the last business day prior to the date of exercise of this
Warrant or if no such sale is made on such day, the average closing bid
and asked prices for such day on such exchange; or
(2) If the Common Stock is not so listed or admitted to unlisted
trading privileges, the current value shall be the mean of the last
reported bid and asked prices reported by the National Association of
Securities Dealers Automated Quotation System (or, if not so quoted on
NASDAQ, by the National Quotation Bureau, Inc.) on the last business day
prior to the day of the exercise of this Warrant; or
(3) If the Common Stock is not so listed or admitted to unlisted
trading privileges and bid and asked prices are not so reported, the
current value shall be an amount, not less than book value, determined in
such reasonable manner as may be prescribed by the Board of Directors of
the Company, such determination to be final and binding on the Holder.
(d) Exchange, Assignment or Loss of Warrant. This Warrant is exchangeable,
without expense, at the option of the Holder, upon presentation and surrender
hereof to the Company or at the office of its stock transfer agent, if any, for
other Warrants of different denominations entitling the Holder thereof to
purchase in the aggregate the same number of shares of Common Stock purchasable
hereunder. No assignment of this Warrant may be made without the written consent
of the Company which the Company may deny in its sole discretion. Any assignment
hereof shall be made by surrender of this Warrant to the Company or at the
office of its stock transfer agent, if any, with the Assignment Form annexed
hereto duly executed and funds sufficient to pay any transfer tax; whereupon the
Company shall, without charge, execute and deliver a new Warrant in the name of
the assignee named in such instrument of assignment and this Warrant shall
promptly be canceled. This Warrant may be divided upon presentation hereof at
the office of the Company or at the office of its stock transfer agent, if any,
together with a written notice specifying the names and denominations in which
new Warrants are to be issued and signed by the Holder hereof. The terms
"Warrant" and "Warrants" as used herein include any Warrants issued in
substitution for a replacement of this Warrant, or into which this Warrant may
be divided or exchanged. Upon receipt by the Company of evidence satisfactory to
it of the loss, theft, destruction or mutilation of this Warrant, and (in the
case of loss, theft or destruction) of reasonably satisfactory indemnification,
and upon surrender and cancellation of this Warrant, if mutilated, the Company
will execute and deliver a new Warrant of like tenor and date. Any such new
Warrant executed and delivered shall constitute an additional contractual
obligation on the part of the Company, whether or not this Warrant so lost,
stolen, destroyed, or mutilated shall be at any time enforceable by anyone.
(e) Rights of the Holder. The Holder shall not, by virtue hereof, be
entitled to any rights of a shareholder in the Company, either at law or equity,
and the rights of the Holder are limited to those expressed in the Warrant and
are not enforceable against the Company except to the extent set forth herein.
Exhibit 10.2
(f) Adjustments to Exercise Price and Number of Shares. Anything in this
Section (f) to the contrary notwithstanding, in case the Company shall at any
time issue Common Stock or Convertible Securities by way of dividend or other
distribution on any stock of the Company or subdivide or combine the outstanding
shares of Common Stock, the Company shall equitably adjust the terms of this
Warrant.
(g) Officer's Certificate. Whenever the Exercise Price shall be adjusted
as required by the provisions of Section (f) hereof, the Company shall forthwith
file in the custody of its Secretary or an Assistant Secretary at its principal
office, and with its stock transfer agent, if any, an officer's certificate
showing the adjusted Exercise Price determined as herein provided and setting
forth in reasonable detail the facts requiring such adjustment. Each such
officer's certificate shall be made available at all reasonable times for
inspection by the Holder and the Company shall, forthwith after each such
adjustment, deliver a copy of such certificate to the Holder. Such certificate
shall be conclusive as to the correctness of such adjustment.
(h) Notices to Warrant Holders. So long as this Warrant shall be
outstanding and unexercised (i) if the Company shall pay any dividend or make
any distribution upon the Common Stock or (ii) if the Company shall offer to the
Holders of Common Stock for subscription or purchase by them any shares of stock
of any class or any other rights or (iii) if any capital reorganization of the
Company, reclassification of the capital stock of the Company, consolidation or
merger of the Company with or into another corporation, sale, lease or transfer
of all or substantially all of the property and assets of the Company to another
corporation, or voluntary or involuntary dissolution, liquidation or winding up
of the Company shall cause to be delivered to the Holder, at least ten days
prior to the date specified in (x) or (y) below, as the case may be, a notice
containing a brief description of the proposed action and stating the date on
which (x) a record is to be taken for the purpose of such dividend, distribution
or rights, or (y) such reclassification, reorganization, consolidation, merger,
conveyance, lease, dissolution, liquidation or winding up is to take place and
the date, if any, is to be fixed as of which the Holders of Common Stock of
record shall be entitled to exchange their shares of Common Stock for securities
or other property deliverable upon such reclassification, reorganization,
consolidation, merger, conveyance, dissolution, liquidation or winding up.
(i) Reclassification, Reorganization or Merger. In case of any
reclassification, capital reorganization or other change of outstanding shares
of Common Stock of the Company (other than a change in par value, or from no par
value to par value, or as a result of an issuance of Common Stock by way of
dividend or other distribution or of a subdivision or combination), or in case
of any consolidation or merger of the Company with or into another corporation
(other than a merger with a subsidiary in which merger the Company is the
continuing corporation and which does not result in any reclassification,
capital reorganization or other change of outstanding shares of Common Stock of
the class issuable upon exercise of this Warrant) or in case of any sale or
conveyance to another corporation of the property of the Company as an entirety
or substantially as an entirety, the Company shall cause an effective provision
to be made so that the Holder shall have the right thereafter, by exercising
this Warrant, to purchase the kind and amount of shares of stock and other
securities and property receivable upon such reclassification, capital
reorganization or other change, consolidation, merger, sale or conveyance. Any
such provision shall include a provision for adjustments which shall be as
Exhibit 10.2
nearly equivalent as may be practicable to the adjustments provided for in this
Warrant. The foregoing provisions of this Section (i) shall similarly apply to
successive reclassifications, capital reorganizations and changes of shares of
Common Stock and to successive consolidations, mergers, sales or conveyances. In
the event that in any such capital reorganization or reclassification,
consolidation, merger, sale or conveyance, additional shares of Common Stock
shall be issued in exchange, conversion, substitution or payment, in whole or in
part, for or of a security of the Company other than Common Stock, any such
issue shall be treated as an issue of Common Stock covered by the provisions of
subsection (f) hereof with the amount of the consideration received upon the
issue thereof being determined by the Board of Directors of the Company, such
determination to be final and binding on the Holder.
(j) Transfer to Comply with the Securities Act of 1933.
(1) This Warrant or the Warrant Stock or any other security issued or
issuable upon exercise of this Warrant may not be sold, transferred or
otherwise disposed of except to a person who, in the opinion of counsel
for the Company, is a person to whom this Warrant or such Warrant Stock
may legally be transferred pursuant to Section (d) hereof without
registration and without the delivery of a current prospectus under the
Securities Act with respect thereto and then only against receipt of an
agreement of such person to comply with the provisions of this Section (j)
with respect to any resale or other disposition of such securities.
(2) This warrant may be exercised only if a registration statement
covering the warrant stock has been declared effective by the U.S.
Securities & Exchange Commission or an exemption from registration has
been established to the satisfaction of legal counsel of the Company.
(3) This Warrant may not be assigned or transferred with out the
express written consent of the Company, which may be withheld or granted
in the sole discretion of the Company.
(4) The Company may cause the following legend to be set forth on
each certificate representing Warrant Stock or any other security issued
or issuable upon exercise of this Warrant, unless counsel for the Company
is of the opinion as to any such certificate that such legend is
unnecessary:
"The securities represented by this certificate may not be offered for
sale, sold or otherwise transferred except pursuant to an effective registration
statement under the Securities Act of 1933 (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."
(k) Applicable Law. This Warrant shall be governed by, and construed in
accordance with, the laws of the State of Colorado.
Bion Environmental Technologies, Inc.
Date: _______________ By: ___________________________________
Authorized Officer
<PAGE>
PURCHASE FORM
Class H16 Warrant, January 1, 2000 through December 31, 2001, __________
shares @$2.25/share
Dated ___________________
The undersigned hereby irrevocably elects to exercise this warrant to the extent
of purchasing __________ shares of Bion Environmental Technologies, Inc. Common
Stock and hereby makes payment of $________________ in payment of the actual
exercise price thereof.
------------------
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name
(please typewrite or print in block letters)
Address____________________________________________________________
Signature__________________________________________________
ASSIGNMENT FORM
FOR VALUE RECEIVED, __________________________ hereby sells, assigns, and
transfers unto:
Name_____________________________________________________
(please typewrite or print in block letters)
Address____________________________________________________________
___________________________________________________________________
___________________________________________________________________
the right to purchase Common Stock represented by this Warrant to the extent of
______________ shares as to which such right is exercisable and does hereby
irrevocably constitute and appoint _______________________________, attorney, to
transfer the same on the books of the Company with full power of substitution in
the premises.
Signature _________________________________________
Dated: _______________________
Exhibit 10.3
Option Agreement under the Company's Fiscal Year 1994 Incentive Plan
This OPTION AGREEMENT is made this _____ day of ___________ between Bion
Environmental Technologies, Inc., a Colorado Corporation ("Company"), 555 17th
Street, Suite 3310, Denver, Colorado 80202, and
_______________ ("Optionee").
In consideration of the mutual covenants hereinafter set forth and for other
good and valuable consideration, the parties hereto agree as follows:
1. Grant of Option. Pursuant to the provisions of the Company's Fiscal Year
1994 Incentive Plan ("Plan"), the Company hereby grants to the Optionee, subject
to the terms and conditions of the Plan (as it presently exists and as it may
hereafter be amended), and subject to the further terms and conditions
hereinafter set forth, the right and option to purchase from the Company all or
any part of an aggregate of ________ shares of the Company's no par value common
stock ("Common Stock") at the purchase price of $2.50 per share ("Shares"), such
option to be exercised only as hereinafter provided. The option ("Option") is
not intended to be, and will not be treated as, an Incentive Stock Option within
the meaning of Section 422A of the Internal Revenue Code of 1986, as amended.
The number of Shares with respect to which the Option is exercisable, and the
purchase price with respect to each Share to be acquired pursuant to the
exercise of the Option herein granted, each are subject to adjustment under
certain circumstances as more fully set forth in the Plan. The term "Common
Stock" as used herein shall include any other class of stock or other securities
resulting from any such adjustment.
2. Exercise of Option. The Option herein granted shall be exercisable
commencing on January 1, 2000 and to the extent that it has not theretofore been
exercised, shall expire at 11:59 P.M. on December 31, 2001.
3. Option Exercise. Subject to the terms and conditions of Section 2 above,
the Option granted hereunder may be exercised in whole or in any part, and may
be exercised in part from time to time, all subject to the limitations on
exercise set forth herein and in the Plan, provided that no partial exercise of
the Option shall be for an aggregate exercise price of less than $1,000 unless
such partial exercise is for the last remaining unexercised portion of the
Option. The partial exercise of the Option shall not cause the expiration,
termination or cancellation of the remaining portion thereof. The Option may be
exercised by delivering written notice, in the form attached hereto, to the
principal office of the Company, to the attention of its Secretary, no less than
three business days in advance of the effective date of the proposed exercise.
Such notice shall be accompanied by this Option Agreement and shall specify the
number of Shares of Common Stock with respect to which the Option is being
exercised and the effective date of the proposed exercise, and shall be signed
by the Optionee. The Optionee may withdraw such notice at any time prior to the
close of business on the business day immediately preceding the effective date
of the proposed exercise, in which case this Option Agreement shall be returned
to the Optionee.
4. Payment of the Purchase Price. Payment for Shares of Common Stock to be
purchased upon the exercise of the Option shall be made on the effective date of
such exercise either (i) in cash, by certified check, bank cashier's check or
wire transfer, or (ii) subject to the approval of the Incentive Plan Committee,
in Shares of Common Stock owned by the Optionee and valued at their fair market
value on the effective date of such exercise (determined in accordance with the
method for establishing fair market value as set forth in the Plan), or partly
in Shares of Common Stock with the balance in cash, by certified check, bank
cashier's check or wire transfer. Any payment in Shares of Common Stock shall be
effected by the delivery of such Shares to the Secretary of the Company, duly
endorsed in blank or accompanied by stock powers duly executed in blank,
together with any other documents and evidences as the Secretary of the Company
shall require from time to time.
The Option may be exercised by a broker-dealer acting on behalf of the
Optionee if (i) the broker-dealer has received from the Optionee or the Company
a fully-and-duly-endorsed agreement evidencing the Option and instructions
signed by the Optionee requesting that the Company deliver the Shares of Common
Stock subject to the Option to the broker-dealer on behalf of the Optionee and
specifying the account into which such Shares should be deposited, (ii) adequate
provision has been made with respect to the payment of any withholding taxes due
upon such exercise and (iii) the broker-dealer and the Optionee have otherwise
complied with Section 220.3(e)(4) of Regulation T, 12 CFR Part 220.
Certificates for Shares of Common Stock purchased upon the exercise of the
Option shall be issued in the name of the Optionee and delivered to the Optionee
as soon as practicable following the effective date on which the Option is
exercised.
5. Effect of Termination of Employment. If Optionee was an employee of the
Company at the time the Option was granted, this Option shall be subject to
termination in accordance with the Plan in the event that the employment of the
Optionee with the Company shall terminate.
6. Acceleration of Exercise Date Upon Change in Control. Upon the occurrence
of a "change in control" (as defined in the Plan) the Option shall become fully
and immediately exercisable and shall remain exercisable until its expiration,
termination or cancellation pursuant to the terms of the Plan and this Option
Agreement.
7. Investment Representations. The Optionee hereby represents and warrants
that:
(a) Any Shares purchased upon exercise of the Option shall be acquired
for the Optionee's account for investment only, and not with a view to, or for
sale in connection with, any distribution of the Shares in violation of the
Securities Act of 1933, as amended ("Securities Act"), any rule or regulation
under the Securities Act, or any applicable state securities law.
(b) The Optionee has had such opportunity as the Optionee has deemed
adequate to obtain from representatives of the Company such information as is
necessary to permit the Optionee to evaluate the merits and risks of his
investment in the Company.
(c) The Optionee is able to bear the economic risk of holding any
Shares acquired pursuant to the exercise of the Option for an indefinite period.
Upon exercise of the Option, the Optionee shall be deemed to have
reaffirmed, as of the date of exercise, the representations made in this Section
7.
8. Securities Law Matters. The Company shall be under no obligation to
effect the registration pursuant to the Securities Act of any Shares to be
issued pursuant the Option or to effect similar compliance under any state
securities laws. Notwithstanding anything to the contrary, the Company shall not
be obligated to cause to be issued or delivered any certificates evidencing the
Shares pursuant to the Option unless and until the Company is advised by its
counsel that the issuance and delivery of such certificates is in compliance
with all applicable laws, regulations of governmental authority and the
requirements of any securities exchange on which the Shares of Common Stock are
traded. The Company may, in its sole discretion, defer the effectiveness of any
exercise of the Option in order to allow the issuance of Shares of Common Stock
pursuant to the Option to be made pursuant to registration or an exemption from
the registration or other methods for compliance available under federal or
state securities laws. The Company shall inform the Optionee in writing of its
decision to defer the effectiveness of the exercise of the Option. During the
period that the effectiveness of the exercise of the Option has been deferred,
the Optionee may, by written notice, withdraw such exercise and obtain the
refund of any amount paid with respect thereto.
9. Withholding Taxes. The Company's obligation to deliver Shares upon
exercise of the Option shall be subject to the Optionee's satisfaction of all
applicable federal, state and local tax withholding requirements, in accordance
with the provisions of the Plan.
10. Legend on Stock Certificate. If appropriate, all stock certificates
representing Shares of Common Stock issued to the Optionee upon exercise of the
Option shall have affixed thereto two legends substantially in the following
forms, in addition to any other legend required by applicable law, unless such
shares have been acquired by Optionee pursuant to an effective registration
statement under the Securities Act of 1933:
"The shares of stock represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and may not be
transferred, sold or otherwise disposed of in the absence of an effective
registration statement with respect to the shares evidenced by this certificate,
or an opinion of counsel satisfactory to the Company to the effect that
registration under such Act is not required."
"In addition, these shares may not be sold or transferred pursuant to
Regulation S under the Securities Act of 1933, or pursuant to any other rule or
regulation pertaining to the sale or transfer of securities to a non-U.S. person
or entity, which may have the effect of reducing Rule 144's holding period to
less than one year."
11. Non-Transferability. The Option shall not be assignable or transferable
otherwise than by will or by the laws of descent and distribution. During the
lifetime of the Optionee, the Option shall be exercisable only by him.
12. Rights of Stockholder. The Optionee shall have no rights as a
stockholder with respect to any Shares subject to the Option until the date of
the issuance of a stock certificate with respect to such Shares. Except as
otherwise expressly provided in the Plan, no adjustment to the Option shall be
made for dividends or other rights for which the record date occurs prior to the
date such stock certificate is issued.
13. No Special Employment Rights Created. Nothing contained in the Option or
the Plan shall confer upon the Optionee any right with respect to the
continuation of his employment, if any, by the Company or interfere in any way
with the right of the Company, subject to the terms of any separate employment
agreement to the contrary, at any time to terminate such employment or to
increase or decrease the compensation of the Optionee from the rate in existence
at the time of the grant of the Option.
14. Failure to Comply. The failure by the Optionee to comply with any of the
terms and conditions of the Option or of the Plan, unless such failure is
remedied by the Optionee within ten days after having been notified of such
failure by the Incentive Plan Committee, shall be grounds for the cancellation
and forfeiture of the Option, in whole or in part, as the Committee, in its
absolute discretion, may determine.
15. Binding Effect. The Optionee hereby acknowledges receipt of a copy of
the Plan and agrees to be bound by all the terms and provisions thereof. The
terms of the Plan as it presently exists, and as it may hereafter be amended,
are deemed incorporated herein by reference, and any conflict between the terms
of this Option Agreement and the provisions of the Plan shall be resolved by the
Committee, whose determination shall be final and binding on all parties.
16. Notices. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery or by
registered or certified mail, or facsimile, addressed to a party at the address
set forth herein or at such other address as such party may designate by notice
in accordance with this paragraph.
IN WITNESS WHEREOF, the Company has caused this Option Agreement to be
executed by its duly authorized officer and the Optionee has executed this
Agreement as of the day and year first above written.
BION ENVIRONMENTAL TECHNOLOGIES, INC.
By:
Authorized Officer
Optionee, _________________, hereby acknowledges receipt of this Option
Agreement for ____________ (BION) shares @$2.50 per share exercisable commencing
on January 1, 2000 and expiring on December 31, 2001.
__________________________________
__________________________________
(Optionee Signature) Date
<PAGE>
OPTION EXERCISE FORM
TO: BION ENVIRONMENTAL TECHNOLOGIES, INC.
Attn: Secretary
555 17th Street, Suite 3310
Denver, Colorado 80202
RE: Notice of Intention to Exercise Option
(___________ shares @ $2.50/share, exercise period 1/01/00
through 12/31/01)
I, ______________, am the Optionee under the Non Qualified Stock Option
Agreement ("Agreement") entered into with Bion Environmental Technologies, Inc.
("Company") on _____________. Pursuant to such Agreement, I hereby provide you
with official notice that I elect to partially/fully (circle one) exercise my
Option to purchase Shares of
the Company's Common Stock as follows:
Number of Shares: ______________________
Effective Date of Exercise:________________
I understand that payment for the Shares of Common Stock to be purchased by me
pursuant to the exercise of the Option must be made on the effective date of
exercise in accordance with the Plan. I further understand and agree that the
Company shall have the right to require me to remit to the Company in cash an
amount sufficient to satisfy federal, state and local withholding tax
requirements, if any, attributable to my exercise of the Option prior to the
delivery of any certificate or certificates for such Shares.
I understand that this election to exercise the Option is irrevocable once it is
effective in accordance with the terms and conditions of the Plan.
The certificate for the Shares should be delivered to me at the address listed
below:
NAME OF OPTIONEE:
Please typewrite or print
ADDRESS: _________________________________________________
_________________________________________________
_________________________________________________
SOCIAL SECURITY NUMBER: _____________________________
DATED: ________________, ______
Signature of Optionee
Exhibit 10.4
Capital Structure
Common Stock
As of June 30, 1999 the Company had 10,090,295 shares of Common Stock issued and
outstanding and 18,821 shares of subscribed stock.
Options and Warrants
As of June 30, 1999 the Company has outstanding options and warrants as follows:
Options outstanding under the Fiscal Year 1994 Incentive Compensation Plan and
the Non Employee Director Compensation Plan:
Vesting Date Expires
Director Plan ($1.55) 11,112 Vested 8/19/02
($2.04) 11,112 Vested 8/19/02
($2.91) 11,112 Vested 11/17/03
Total Director Plan 33,336
Incentive ($1.80) 3,612 Vested 7/22/99
Compensation ($2.50) 40,000 Vested* 12/31/01
Plan ($2.70) 27,778 Vested 12/31/02
($3.04) 1,112 Vested 1/28/01
($3.60) 11,161 Vested 12/31/01
($3.60) 1,600 Vested 03/03/00
($3.60) 927 Vested 10/31/99
($3.60) 19,445 Vested 8/1/00
($3.60) 1,734 Vested 03/03/00
($3.60) 19,954 Vested 12/31/02
($3.60) 1,019 Vested 03/18/00
($3.60) 7,750 Vested 06/30/00
($3.60) 1,038 9/1/99+ 12/31/02
($3.60) 26,251 4/30/00+ 12/31/02
($3.60) 26,251 4/30/01+ 12/31/02
($3.60) 26,251 4/30/02+ 12/31/02
($3.72) 1,112 Vested 8/31/00
($4.05) 1,112 Vested 11/30/00
($5.40) 1,600 Vested 03/03/00
($5.40) 13,303 Vested 12/31/01
($5.40) 4,276 Vested 6/30/00
($5.40) 1,926 8/4/99+ 12/31/01
($5.40) 1,482 8/11/99+ 12/31/01
($5.40) 10,613 11/19/99+ 12/31/02
($5.40) 1,556 3/4/00+ 12/31/02
($5.40) 1,038 3/16/00+ 12/31/02
($5.40) 1,464 4/1/00+ 12/31/02
($5.40) 1,038 6/1/00+ 12/31/02
($5.40) 1,038 9/1/00+ 12/31/02
($5.63) 1,112 Vested 5/31/00
($7.20) 11,112 Vested 12/31/01
($7.20) 1,334 2/3/00+ 12/31/01
($7.20) 770 12/16/99+ 12/31/01
($7.20) 1,926 8/4/00+ 12/31/01
($7.20) 1,482 8/11/00+ 12/31/01
($7.20) 4,417 9/15/99+ 12/31/01
($7.20) 10,613 11/19/00+ 12/31/00
($7.20) 1,556 3/04/01+ 12/31/02
($7.20) 1,038 3/16/01+ 12/31/02
($7.20) 1,464 4/1/01+ 12/31/02
($7.20) 1,038 6/1/01+ 12/31/02
($7.20) 1,038 9/1/01+ 12/31/02
($7.20) 18,381 4/30/00+ 12/31/02
($7.20) 18,381 4/30/01+ 12/31/02
($7.20) 18,381 4/30/02+ 12/31/02
($9.00) 11,112 Vested 12/31/01
($11.25) 11,112 9/15/99+ 12/31/01
($13.50) 11,112 9/15/99+ 12/31/01
($13.50) 28,898 4/30/00+ 12/31/02
($13.50) 28,898 4/30/01+ 12/31/02
($13.50) 28,898 4/30/02+ 12/31/02
-------
Total Employee 471,514
Total Director Plan
and Incentive Plan 504,850
=======
+Non-vested employee options equal 290,683
Warrants outstanding as of June 30, 1999 consist of the following:
$2.25 warrants:
exercisable 1/01/00 through 12/31/01 356,000
---------
Total $2.25 warrants 356,000
$2.70 warrants:
exercisable 1/22/96 through 1/21/01: 1,115
exercisable 8/21/96 through 8/20/01: 16,112
exercisable 9/13/96 through 9/12/01: 919
exercisable 3/01/99 through 12/31/02: 27,778
---------
Total $2.70 warrants 45,924
$3.60 warrants:
exercisable 11/2/98 through 12/31/02: 18,519
exercisable 12/1/98 through 12/31/02 18,519
exercisable 12/01/99 through 12/31/02: 18,519+
exercisable 4/30/00 through 12/31/02 26,251+
exercisable 4/30/01 through 12/31/02 26,251+
exercisable 4/30/02 through 12/31/02 26,251+
---------
Total $3.60 warrants 134,310
$4.50 warrants:
exercisable 8/21/96 through 8/20/01 11,112
Total $4.50 warrants 11,112
$5.40 warrants:
exercisable 2/1/97 through 12/31/01: 11,112
exercisable 4/21/97 through 4/20/02: 3,148
exercisable 6/5/97 through 6/30/00: 27,779
exercisable 3/1/98 through 10/1/99: 55,556
exercisable 6/9/98 through 12/31/01: 4,167
---------
Total $5.40 warrants 101,762
$7.20 warrants:
exercisable 2/1/97 through 12/31/01: 11,112
exercisable 12/01/00 through 12/31/02: 18,519+
exercisable 4/30/00 through 12/31/02 18,381+
exercisable 4/30/01 through 12/31/02 18,381+
exercisable 4/30/02 through 12/31/02 18,381+
---------
Total $7.20 warrants 84,774
$8.00 warrants:
exercisable 1/01/00 through 12/31/01: 3,988,513
---------
Total $8.00 warrants + dividend 3,988,513
$9.00 warrants:
exercisable 2/1/97 through 12/31/01: 11,112
Total $9.00 warrants 11,112
$11.25 warrants:
exercisable 2/1/97 through 12/31/01: 11,112
Total $11.25 warrants 11,112
$13.50 warrants:
exercisable 2/1/97 through 12/31/01: 11,112
exercisable 1/1/00 through 12/31/01: 3,545,476
exercisable 4/30/00 through 12/31/02 28,898+
exercisable 4/30/01 through 12/31/02 28,898+
exercisable 4/30/02 through 12/31/02 28,898+
---------
Total $13.50 warrants 3,643,282
Total of all warrants currently outstanding 8,387,901
+Non-vested employee warrants equal 257,628
Convertible Notes
The entire outstanding balances of the three notes held by LoTayLingKyur,
Inc. ("LTLK"), a shareholder, and the LTLK Defined Benefit Plan ("DBP"), also a
shareholder, may be converted as of June 30, 1999, into the Company's common
stock as follows:
Convertible at
Principal Interet Total $1.80 per share for
--------- -------- ------------- --------------------
1. $993,622.84 $11,121.59 $1,004,744.43 558,191 shares
2. $626,667 $8,288.10 $634,955.18 352,753 shares
3. $260,000 $3,438.71 $$263,438.71 146,355 shares
The entire outstanding balance of the note held by Harley Northrop, a
shareholder, may be converted as of June 30, 1999 into the Company's common
stock as follows:
Convertible at
Principal Interest Total $2.00 per share for
------------ ---------- ---------- --------------------
1. $260,000.00 $51,049.72 311,049.72 155,525 shares
- --------
1 This option becomes exercisable on 01/01/00.
