<PAGE>
As filed with the Securities and Exchange Commission on February 10, 2000
Registration No. _________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ECO SOIL SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
NEBRASKA 47-0709577
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
-----------------------
10740 THORNMINT ROAD
SAN DIEGO, CA 92127
(619) 675-1660
(Address of principal executive offices, including zip code,
and telephone number)
1992 STOCK OPTION PLAN
THE AMENDED AND RESTATED 1998 STOCK OPTION PLAN OF ECO SOIL SYSTEMS, INC.
THE 1999 EQUITY PARTICIPATION PLAN OF ECO SOIL SYSTEMS, INC.
THE 1999 NEW HIRE STOCK OPTION PLAN OF ECO SOIL SYSTEMS, INC.
OPTIONS GRANTED PURSUANT TO NON-STATUTORY STOCK OPTION AGREEMENTS
(Full title of the plans)
-----------------------
WILLIAM B. ADAMS Copies to:
CHAIRMAN AND CHIEF EXECUTIVE OFFICER ROBERT E. BURWELL, ESQ.
ECO SOIL SYSTEMS, INC. LATHAM & WATKINS
10740 THORNMINT ROAD 701 "B" STREET, SUITE 2100
SAN DIEGO, CALIFORNIA 92127 SAN DIEGO, CALIFORNIA 92101
(619) 675-1660 (619) 236-1234
(Name, address, including zip code,
and telephone number, including area
code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=================================================================================================================================
Amount Proposed Maximum Proposed Maximum Amount of
Title of Securities to be Offering Price Aggregate Offering Registration
To be Registered Registered Per Share Price Fee
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.005 par value 5,721,696 $2.00 - $11.44(3) $26,798,799(3) $7,075
=================================================================================================================================
</TABLE>
(1) A maximum of 1,100,000 shares of Common Stock were reserved for issuance
under the 1992 Stock Option Plan of Eco Soil Systems, Inc., as amended (the
"1992 Plan"), 900,000 shares of which were registered under the Securities
Act of 1933, as amended, pursuant to the Registration Statement on Form S-8
(No. 333-27509) filed by the Company on May 16, 1997. A maximum of
1,600,000 shares of Common Stock were reserved for issuance under The
Amended and Restated 1998 Stock Option Plan of Eco Soil Systems, Inc. (the
"1998 Plan"). A maximum of 1,600,000 shares of Common Stock were reserved
for issuance under The 1999 Equity Participation Plan of Eco Soil Systems,
Inc. (the "1999 Equity Plan"). A maximum of 1,000,000 shares of Common
Stock were reserved for issuance under The 1999 New Hire Stock Option Plan
of Eco Soil Systems, Inc. (the "1999 New Hire Plan," and together with the
1992 Plan, the 1998 Plan and the 1999 Equity Plan, the "Plans"). A maximum
of 1,378,059 shares of Common Stock were reserved for issuance under
certain Non-Statutory Stock Option Agreements (the "Non-Statutory
Agreements"). Of the additional 200,000 shares of Common Stock reserved for
issuance under the 1992 Plan by an amendment in June 1997, 20,769 have been
issued upon exercise of options and are not being registered hereunder; the
remaining 179,231 shares reserved for issuance under the 1992 Plan are
being registered hereunder. Of the 1,600,000 shares of Common Stock
reserved for issuance under the 1998 Plan, 35,594 shares have been issued
upon exercise of options and are not being registered hereunder; the
remaining 1,564,406 shares reserved for issuance under the 1998 Plan are
being registered hereunder. Of the 1,600,000 shares of Common Stock
reserved for issuance under the 1999 Equity Plan, no shares have been
issued upon exercise of options; such shares are being registered
hereunder. Of the 1,000,000 shares of Common Stock reserved for issuance
under the 1999 New Hire Plan, no shares have been issued upon exercise of
<PAGE>
options; such shares are being registered hereunder. Of the 1,285,559
shares reserved for issuance pursuant to the Non-Statutory Agreements, no
shares have been issued; such shares are being registered hereunder.
(2) Pursuant to Rule 416(a), this Registration Statement shall also cover any
additional shares of Common Stock that become issuable under the Plans or
Non-Statutory Agreements by reason of any stock dividend, stock split,
recapitalization or other similar transaction effected without receipt of
consideration that increases the number of the Company's outstanding shares
of Common Stock.
(3) This estimate is made pursuant to Rule 457(h) solely for purposes of
calculating the registration fee. The price per share and aggregate
offering price are based upon (a) the actual exercise price for shares
subject to outstanding stock options previously granted under the Plans or
Non-Statutory Agreements and (b) the average of the high and low sales
prices of the registrant's common stock on February 8, 2000, as reported on
the Nasdaq National Market, for shares issuable upon exercise of options
not yet granted under the Plans. The following charts show the calculation
of the registration fee:
1992 Plan
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Amount of Shares Offering Price Aggregate
Type of Shares to be Registered Per Share Offering Price
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock subject to outstanding options 8,000 $3.875 $31,000.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 146,266 $4.125 $603,347.25
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 12,000 $4.19 $50,280.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 10,000 $4.44 $44,400.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 1,500 $5.63 $8,445.00
- ------------------------------------------------------------------------------------------------------
Common Stock issuable upon exercise of 1,465 $4.53 $6,636.45
options not yet granted under the 1992 Plan
- ------------------------------------------------------------------------------------------------------
Total 179,231 N/A $744,108.70
- ------------------------------------------------------------------------------------------------------
</TABLE>
1998 Plan
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Offering Price Aggregate
Type of Shares Number of Shares Per Share Offering Price
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock subject to outstanding options 323,560 $3.00 $970,680.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 10,000 $3.06 $30,600.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 10,000 $3.19 $31,900.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 50,000 $4.69 $234,500.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 20,000 $4.75 $95,000.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 302,000 $4.94 $1,491,880.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 130,250 $5.00 $651,250.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 9,000 $5.16 $46,440.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 174,000 $5.25 $913,500.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 3,000 $5.63 $16,890.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 56,125 $5.75 $322,718.75
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 1,500 $6.00 $9,000.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 5,000 $6.25 $31,250.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 22,959 $6.50 $149,233.50
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 2,000 $6.69 $13,380.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 42,000 $6.75 $283,500.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 73,500 $6.88 $505,680.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 5,000 $7.00 $35,000.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 7,000 $7.06 $49,420.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 3,000 $7.44 $22,320.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 8,000 $7.52 $60,160.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 500 $7.59 $3,795.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 3,000 $7.69 $23,070.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 10,000 $8.31 $83,100.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 5,000 $8.63 $43,150.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 6,000 $9.63 $57,780.00
- ------------------------------------------------------------------------------------------------------
Common Stock issuable upon exercise of 282,012 $4.53 $1,277,514.36
options not yet granted under the 1998 Plan
- ------------------------------------------------------------------------------------------------------
Total 1,564,406 NA $7,452,711.61
- ------------------------------------------------------------------------------------------------------
</TABLE>
1999 Equity Plan
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Amount of Shares Offering Price Aggregate
Type of Shares to be Registered Per Share Offering Price
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock subject to outstanding options 900,000 $5.00 $4,500,000.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 400,000 $5.25 $2,100,000.00
- ------------------------------------------------------------------------------------------------------
Common Stock issuable upon exercise of 300,000 $4.875 $1,359,000.00
options not yet granted under the 1999
Equity Plan
- ------------------------------------------------------------------------------------------------------
Total 1,600,000 NA $7,959,000.00
- ------------------------------------------------------------------------------------------------------
</TABLE>
1
<PAGE>
1999 New Hire Plan
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Amount of Shares Offering Price Aggregate
Type of Shares to be Registered Per Share Offering Price
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock subject to outstanding options 16,000 $3.00 $48,000.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 83,500 $4.94 $412,490.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 79,250 $5.25 $416,062.50
- ------------------------------------------------------------------------------------------------------
Common Stock issuable upon exercise of 821,250 $4.875 $3,720,262.50
options not yet granted under the 1999 New
Hire Plan
- ------------------------------------------------------------------------------------------------------
Total 1,000,000 NA $4,596,815.00
- ------------------------------------------------------------------------------------------------------
</TABLE>
Non-Statutory Agreements
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Amount of Shares Offering Price Aggregate
Type of Shares to be Registered Per Share Offering Price
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock subject to outstanding options 211,063 $2.00 $422,126.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 250,000 $2.50 $625,000.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 428,298 $3.00 $1,284,894.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 71,500 $4.00 $286,000.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 19,500 $4.13 $80,535.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 3,000 $4.19 $12,570.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 2,000 $4.38 $8,760.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 6,498 $4.50 $29,241.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 4,500 $5.00 $22,500.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 3,000 $5.19 $15,570.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 3,000 $5.38 $16,140.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 1,500 $5.44 $8,160.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 25,000 $5.63 $140,750.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 1,000 $5.75 $5,750.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 3,000 $5.94 $17,820.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 1,500 $6.13 $9,195.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 3,500 $6.25 $21,875.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 2,500 $6.38 $15,950.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 5,000 $6.50 $32,500.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 4,000 $6.88 $27,520.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 16,500 $6.94 $114,510.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 9,000 $7.00 $63,000.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 3,000 $7.19 $21,570.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 2,000 $7.31 $14,620.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 3,750 $7.44 $27,900.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 7,700 $7.50 $57,750.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 14,000 $7.69 $107,660.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 5,000 $7.93 $39,650.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 4,500 $7.94 $35,730.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 1,500 $8.13 $12,195.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 9,000 $8.19 $73,710.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 750 $8.25 $6,187.50
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 30,000 $8.31 $249,300.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 3,000 $8.44 $25,320.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 3,000 $8.56 $25,680.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 12,000 $8.63 $103,560.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 6,750 $8.69 $58,657.50
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 12,500 $9.38 $117,250.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 65,500 $9.63 $630,765.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 3,500 $9.63 $33,705.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 96,750 $9.69 $937,507.50
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 500 $9.75 $4,875.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 500 $9.88 $4,940.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 3,000 $10.50 $31,500.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 500 $10.63 $5,315.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 5,000 $10.75 $53,750.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 3,000 $10.88 $32,640.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 5,000 $11.38 $56,900.00
- ------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding options 1,500 $11.44 $17,160.00
- ------------------------------------------------------------------------------------------------------
Total 1,378,059 NA $6,046,163.50
- ------------------------------------------------------------------------------------------------------
</TABLE>
===============================================================================
1
<PAGE>
PART I
ITEM 1. PLAN INFORMATION.
Not required to be filed with this Registration Statement.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
Not required to be filed with this Registration Statement.
PART II
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents previously filed with the Securities and
Exchange Commission (the "Commission") by Eco Soil Systems, Inc, a Nebraska
corporation (the "Company"), are hereby incorporated by reference in this
Registration Statement:
(a) The Annual Report on Form 10-K for the year ended December 31,
1998 filed pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act") on April 13, 1999 (the "Annual
Report");
(b) The Quarterly Report on Form 10-Q for the quarter ended March
31, 1999 filed pursuant to the Exchange Act on May 17, 1999;
(c) The Quarterly Report on Form 10-Q for the quarter ended June
30, 1999 filed pursuant to the Exchange Act on August 16,
1999;
(d) The Quarterly Report on Form 10-Q for the quarter ended
September 30, 1999 filed pursuant to the Exchange Act on
November 15, 1999;
(e) The Current Report on Form 8-K filed pursuant to the Exchange
Act on January 26, 2000; and
(f) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A filed on January
14, 1997, pursuant to Section 12(g) of the Exchange Act.
All documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date this Registration
Statement is filed with the Commission and prior to the filing of a
post-effective amendment which indicates that all securities offered have
been sold or which deregisters all securities then remaining unsold shall be
deemed to be incorporated by reference in this Registration Statement and to
be a part of it from the respective dates of filing of such documents. Any
statement contained in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for purposes
of this Registration Statement to the extent that a
2
<PAGE>
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Sections 21-20,103 through 21-20,111 of the Nebraska Business
Corporation Act provide, in summary, that the directors and officers of the
Company may, under certain circumstances, be indemnified by the Company
against all liability expenses incurred by or imposed upon them as a result
of actions, suits or proceedings brought against them as such directors and
officers, or as directors or officers of any other organization at the
request of the Company, if they act in good faith and in a manner they
reasonably believe to be in or not opposed to the best interests of the
Company, and with respect to any criminal action or proceeding, have no
reasonable cause to believe their conduct was unlawful, except that no
indemnification shall be made against expenses in respect of any claim, issue
or matter as to which they shall have been adjudged to be liable to the
Company unless and only to the extent that the court in which such action or
suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case,
they are fairly and reasonably entitled to indemnity for such expenses which
such court shall deem proper. Sections 21-20,104 and 21-20,108(a) of the
Nebraska Business Corporation Act also provide that directors and officers of
the Company are entitled to such indemnification by the Company to the extent
that such persons are successful on the merits or otherwise in defending any
such action, suit or proceeding to which he or she is a party because he or
she was serving a director or officer of the Company.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The Exhibit Index immediately preceding the exhibits is incorporated
herein by reference.
ITEM 9. UNDERTAKINGS.
(a) The undersigned Company hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement;
3
<PAGE>
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, as amended (the "Securities
Act");
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement (or the
most recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in this Registration Statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information in
this Registration Statement;
PROVIDED, HOWEVER, that the undertakings set forth in paragraphs (a)(1)(i)
and (a)(1)(ii) above do not apply if the Registration Statement is on Form
S-3, Form S-8 or Form F-3, and the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed with or furnished to the Commission by the Company pursuant to Section
13 or 15(d) of the Exchange Act that are incorporated by reference in this
Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned Company hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Company's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise,
the Company has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Company of expenses
4
<PAGE>
incurred or paid by a director, officer or controlling person of the Company
in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the Company will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Diego, State of California, on February 10,
2000.
Eco Soil Systems, Inc.
By: /S/ WILLIAM B. ADAMS
------------------------------------------
William B. Adams
Chief Executive Officer and Chairman
of the Board
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints William B. Adams his true and
lawful attorney-in-fact, acting alone, with full power of substitution and
resubstitution for him and in his name, place and stead, in any and all
capacities to sign any and all amendments including post-effective amendments
and any registration statement filed pursuant to Rule 462(b) under the
Securities Act to this registration statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Commission, hereby ratifying and confirming all that said attorney-in-fact or
his substitute, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ WILLIAM B. ADAMS
- -------------------------------------- Chairman of the Board and Chief February 10, 2000
William B. Adams Executive Officer (Principal Executive
Officer)
/s/ MARK D. BUCKNER
- -------------------------------------- Chief Financial Officer and Secretary February 10, 2000
Mark D. Buckner (Principal Financial Officer and
Principal Accounting Officer)
/s/ DOUGLAS M. GLOFF
- -------------------------------------- President, Chief Operating Officer and February 10, 2000
Douglas M. Gloff Director
/s/ S. BARTLEY OSBORN Director February 10, 2000
- --------------------------------------
S. Bartley Osborn
/s/ WILLIAM S. POTTER Vice Chairman February __, 2000
- --------------------------------------
William S. Potter
/s/ FRIDOLIN E. FACKELMAYER Director February 10, 2000
- --------------------------------------
Fridolin E. Fackelmayer
/s/ ROBERT W. O'LEARY Director February 10, 2000
- --------------------------------------
Robert W. O'Leary
/s/ EDWARD STEEL, JR. Director February 10, 2000
- --------------------------------------
Edward Steel, Jr.
</TABLE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT PAGE
- ------- ----
<S> <C> <C>
3.1 Amended and Restated Articles of Incorporation (incorporated by
reference to Amendment No. 4 to the Company's Registration Statement on
Form SB-2 (File No. 333-15883) filed with the Commission on January 16,
1997).
3.2 Articles of Amendment to Amended and Restated Articles of Incorporation
(incorporated by reference to Amendment No. 1 to the Company's
Registration Statement on Form SB-2 (File No. 333-39399) filed with the
Commission on November 21, 1997).
3.3 Articles of Correction to Amended and Restated Articles of
Incorporation (incorporated by reference to the Company's Registration
Statement on Form SB-2 (File No. 333-39399) filed with the Commission
on November 4, 1997).
3.4 Articles of Amendment to Amended and Restated Articles of Incorporation
dated July 21, 1998 (incorporated by reference to the Company's
Quarterly Report on Form 10-QSB filed August 13, 1998).
3.5 Amended and Restated Bylaws of Eco Soil Systems, Inc. (incorporated by
reference to Amendment No. 4 to the Company's Registration Statement on
Form SB-2 (File No. 333-15883) filed with the Commission on January 16,
1997).
4.1 The 1992 Stock Option Plan of Eco Soil Systems, Inc., as amended
(incorporated by reference to Appendix A to the Company's Definitive
Proxy Statement for the 1997 Annual Meeting of Shareholders filed
with the Commission on April 30, 1997).
4.2 The Amended and Restated 1998 Stock Option Plan of Eco Soil Systems,
Inc. (incorporated by reference to Appendix A to the Company's
Definitive Proxy Statement for the 1999 Annual Meeting of Shareholders
filed with the Commission on April 30, 1999).
4.3 The 1999 Equity Participation Plan of Eco Soil Systems, Inc.
(incorporated by reference to Appendix B to the Company's Definitive
Proxy Statement for the 1999 Annual Meeting of Shareholders filed with
the Commission on April 30, 1999).
4.4 The 1999 New Hire Stock Option Plan of Eco Soil Systems, Inc.
4.5 Form of Non-Statutory Stock Option Agreement
4.6 Form of Non-Statutory Stock Option Agreement
5.1 Opinion of Fitzgerald, Schorr, Barmettler & Brennan, P.C.
23.1 Consent of Ernst & Young LLP.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT PAGE
- ------- ----
<S> <C> <C>
23.2 Consent of Fitzgerald, Schorr, Barmettler & Brennan, P.C. (included in
Exhibit 5.1 hereto). 24.1 Power of Attorney (included on signature page
hereto).
24.1 Power of Attorney (included on signature page hereto).
</TABLE>
<PAGE>
Exhibit 4.4
THE 1999 NEW HIRE STOCK OPTION PLAN
OF
ECO SOIL SYSTEMS, INC.
Eco Soil Systems, Inc., a Nebraska corporation (the "Company"), has
adopted The 1999 Employee Stock Option Plan of Eco Soil Systems, Inc. (the
"Plan"), effective June 4, 1999, for the benefit of its eligible employees.
The purposes of this Plan are as follows:
(1) To provide an additional incentive for Employees to further the
growth, development and financial success of the Company by personally
benefiting through the ownership of Company stock which recognizes such growth,
development and financial success.
(2) To enable the Company to obtain and retain the services of
Employees considered essential to the long range success of the Company by
offering them an opportunity to own stock in the Company which will reflect the
growth, development and financial success of the Company.
ARTICLE I.
DEFINITIONS
1.1 GENERAL. Wherever the following terms are used in this Plan they
shall have the meanings specified below, unless the context clearly indicates
otherwise.
1.2 AWARD LIMIT. "Award Limit" shall mean 25,000 shares of Common
Stock, as adjusted pursuant to Section 7.3.
1.3 BOARD. "Board" shall mean the Board of Directors of the Company.
1.4 CODE. "Code" shall mean the Internal Revenue Code of 1986, as
amended.
1.5 COMMITTEE. "Committee" shall mean the Compensation Committee of the
Board, or another committee of the Board, appointed as provided in Section 7.1.
1.6 COMMON STOCK. "Common Stock" shall mean the common stock of the
Company, $.005 par value per share, and any equity security of the Company
issued or authorized to be issued in the future, but excluding any preferred
stock and any warrants, options or other rights to purchase Common Stock. Debt
securities of the Company convertible into Common Stock shall be deemed equity
securities of the Company.
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1.7 COMPANY. "Company" shall mean Eco Soil Systems, Inc., a Nebraska
corporation.
1.8 CORPORATE TRANSACTION. "Corporate Transaction" shall mean any of
the following shareholder-approved transactions to which the Company is a party:
(a) a merger or consolidation in which the Company is not the
surviving entity, except for a transaction the principal purpose of which is
to change the State in which the Company is incorporated, to form a holding
company or to effect a similar reorganization as to form whereupon this Plan
and all Options are assumed by the successor entity;
(b) the sale, transfer, exchange or other disposition of all or
substantially all of the assets of the Company, in complete liquidation or
dissolution of the Company in a transaction not covered by the exceptions to
clause (a) above; or
(c) any reverse merger in which the Company is the surviving entity
but in which securities possessing more than fifty percent (50%) of the total
combined voting power of the Company's outstanding securities are transferred
or issued to a person or persons different from those who held such
securities immediately prior to such merger.
1.9 DIRECTOR. "Director" shall mean a member of the Board.
1.10 DISABILITY. "Disability" shall mean, with respect to any
Optionee, (i) the suffering of any mental or physical illness, disability or
incapacity that shall in all material aspects preclude such Optionee from
performing his or her employment duties, or (ii) the absence of such Optionee
from his or her employment duties by reason of any mental or physical illness,
disability or incapacity for a period of six (6) months during any twelve (12)
month period; provided, however, in either case, that such illness, disability
or incapacity shall be reasonably determined to be of a permanent nature by the
Committee.
1.11 EMPLOYEE. "Employee" shall mean any employee (as defined
in accordance with Section 3401(c) of the Code) of the Company, or of any
corporation which is a Subsidiary.
1.12 EXCHANGE ACT. "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
1.13 FAIR MARKET VALUE. "Fair Market Value" of a share of Common Stock
as of a given date shall be: (i) the closing sale price of a share of Common
Stock on the principal exchange on which the Common Stock is then trading, if
any, on such date, or, if shares were not traded on such date, then on the next
preceding trading day during which a sale occurred; (ii) if the Common Stock is
not traded on an exchange but is quoted on Nasdaq or a successor quotation
system, (1) the last sales price (if the Common Stock is then quoted on the
Nasdaq National Market or the Nasdaq SmallCap Market) or (2) the
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mean between the closing representative bid and asked prices (in all other
cases) for a share of the Common Stock on such date, or, if shares were not
traded on such date, then on the next preceding trading day during which a
sale occurred, as reported by Nasdaq or such successor quotation system;
(iii) if the Common Stock is not publicly traded on an exchange and not
quoted on Nasdaq or a successor quotation system, the mean between the
closing bid and asked prices for a share of Common Stock on such date, or, if
shares were not traded on such date, then on the next preceding trading day
during which a sale occurred, as determined in good faith by the Committee;
or (iv) if the Common Stock is not publicly traded, the fair market value of
a share of Common Stock established by the Committee acting in good faith.
1.14 INDEPENDENT DIRECTOR. "Independent Director" shall mean a member
of the Board who is not an Employee of the Company.
1.15 NON-QUALIFIED STOCK OPTION. "Non-Qualified Stock Option" shall
mean an Option that does not conform to the applicable provisions of Section 422
of the Code.
1.16 OFFICER. "Officer" shall mean a President, Secretary, Treasurer,
Chairman of the Board, Vice President, Assistant Secretary or Assistant
Treasurer of the Company, as such positions are described in the Company's
Bylaws, or any other person designated an "officer" of the Company by the Board
of Directors in accordance with the Company's Bylaws.
1.17 OPTION. "Option" shall mean a stock option granted under Article
III of this Plan. An Option granted under this Plan shall be a Non-Qualified
Stock Option.
1.18 OPTION SHARES. "Option Shares" shall mean shares of Common Stock
acquired by Optionees through the exercise of Options under this Plan.
1.19 OPTIONEE. "Optionee" shall mean an Employee granted an Option
under this Plan.
1.20 PERSON. "Person" shall mean a corporation, an association, a
partnership, a trust, a limited liability company, an organization, a business
or an individual.
1.21 PLAN. "Plan" shall mean The 1999 New Hire Stock Option Plan of Eco
Soil Systems, Inc.
1.22 QDRO. "QDRO" shall mean a qualified domestic relations order as
defined by the Code or Title I of the Employee Retirement Income Security Act of
1974, as amended, or the rules thereunder.
1.23 RELATED PERSON. "Related Person" shall mean (a) in the event of a
Person's death, such Person's executors, administrators, testamentary trustees,
legatees or
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beneficiaries or the executors, administrators, testamentary trustees,
legatees or beneficiaries of a Person who has become a holder of Options or
Option Shares in accordance with the terms of this Plan; or (b) a revocable
trust or custodianship the beneficiaries of which may include only such
Person, spouse or lineal descendants by blood or adoption.
1.24 RULE 16b-3. "Rule 16b-3" shall mean that certain Rule 16b-3 under
the Exchange Act, as such Rule may be amended from time to time.
1.25 SECURITIES ACT. "Securities Act" shall mean the Securities Act of
1933, as amended.
1.26 SUBSIDIARY. "Subsidiary" shall mean any corporation in an unbroken
chain of corporations beginning with the Company if each of the corporations
other than the last corporation in the unbroken chain then owns stock possessing
fifty percent (50%) or more of the total combined voting power of all classes of
stock in one (1) of the other corporations in such chain.
1.27 TERMINATION OF EMPLOYMENT. "Termination of Employment" shall mean
the time when the employee-employer relationship between an Optionee and the
Company or any Subsidiary is terminated for any reason, with or without cause,
including, but not by way of limitation, a termination by resignation,
discharge, death, Disability or retirement; but excluding (i) terminations where
there is a simultaneous reemployment or continuing employment of an Optionee by
the Company or any Subsidiary, (ii) at the discretion of the Committee,
terminations which result in a temporary severance of the employee-employer
relationship, and (iii) at the discretion of the Committee, terminations which
are followed by the simultaneous establishment of a consulting relationship by
the Company or a Subsidiary with the former employee. The Committee, in its
absolute discretion, shall determine the effect of all matters and questions
relating to Termination of Employment, including, but not by way of limitation,
the question of whether a Termination of Employment resulted from a discharge
for good cause, and all questions of whether particular leaves of absence
constitute Terminations of Employment; provided, however, that, unless otherwise
determined by the Committee in its discretion, a leave of absence, change in
status from an employee to an independent contractor or other change in the
employee-employer relationship shall constitute a Termination of Employment if,
and to the extent that, such leave of absence, change in status or other change
interrupts employment for the purposes of Section 422(a)(2) of the Code and the
then applicable regulations and revenue rulings under said Section.
Notwithstanding any other provision of this Plan, the Company or any Subsidiary
has an absolute and unrestricted right to terminate an Employee's employment at
any time for any reason whatsoever, with or without cause, except to the extent
expressly provided otherwise in writing.
1.28 TERMINATION FOR CAUSE. "Termination for Cause" shall mean the time
when the employee-employer relationship between an Optionee and the Company or
any Subsidiary is terminated for cause, as termination for cause is defined in
the
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Optionee's employment agreement; provided however, that if termination for
cause is not therein defined, it shall have such meaning, in conformance with
applicable law, as the Committee shall determine is appropriate.
ARTICLE II.
SHARES SUBJECT TO PLAN
2.1 SHARES SUBJECT TO PLAN.
(a) The shares of stock subject to Options shall be Common Stock.
The aggregate number of such shares which may be issued upon exercise of such
options under the Plan shall be 1,000,000. The shares of Common Stock of the
Company issuable upon exercise of such options may be either previously
authorized but unissued shares or treasury shares.
(b) The maximum number of shares which may be subject to Options
granted under the Plan to any individual in any fiscal year of the Company
shall not exceed the Award Limit.
2.2 ADD-BACK OF OPTIONS. If any Option to acquire shares of Common
Stock under this Plan expires or is canceled without having been fully
exercised, the number of shares subject to such Option but as to which such
Option was not exercised prior to its expiration, cancellation or exercise may
again be available for the granting of Options hereunder, subject to the
limitations of Section 2.1. Furthermore, any shares subject to Options which are
adjusted pursuant to Section 7.3 and become exercisable with respect to shares
of stock of another corporation shall be considered canceled and may again be
available for the granting of Options hereunder, subject to the limitations of
Section 2.1. Shares of Common Stock which are delivered by the Optionee or
withheld by the Company upon the exercise of any Option under this Plan, in
payment of the exercise price thereof, may again be available for the granting
of Options hereunder, subject to the limitations of Section 2.1.
ARTICLE III.
GRANTING OF OPTIONS
3.1 ELIGIBILITY. Only the following classes of persons shall be
eligible to receive grants of Options under this Plan: (i) except as provided in
(ii) below, key Employees who are not Officers or Directors of the Company, and
(ii) newly hired Employees (including Employees who will become Officers or
Directors of the Company) and who have not previously been employed by the
Company and with respect to whom Options are to be granted as an inducement
essential to such Employees' entering into employment contracts with the
Company.
3.2 NON-QUALIFIED OPTIONS. No Option granted under this Plan shall
constitute an "incentive stock option" under Section 422 of the Code.
3.3 GRANTING OF OPTIONS.
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(a) The Committee shall from time to time, in its absolute
discretion, and subject to applicable limitations of this Plan:
(i) Determine which eligible Employees are key Employees
and select from among the key Employees such of them as in its opinion should be
granted Options;
(ii) Subject to the Award Limit, determine the number
of shares to be subject to such Options granted to the selected key Employees;
(iii) Determine the terms and conditions of such Options,
consistent with this Plan.
(b) Upon the selection of a key Employee to be granted an
Option, the Committee shall instruct the Secretary of the Company to issue the
Option and may impose such conditions on the grant of the Option as it deems
appropriate. Without limiting the generality of the preceding sentence, the
Committee may, in its discretion and on such terms as it deems appropriate,
require as a condition on the grant of an Option to an Employee that the
Employee surrender for cancellation some or all of the unexercised Options which
have been previously granted to him under this Plan or otherwise. An Option, the
grant of which is conditioned upon such surrender, may have an option price
lower (or higher) than the exercise price of such surrendered Option, may cover
the same (or a lesser or greater) number of shares as such surrendered Option,
may contain such other terms as the Committee deems appropriate, and shall be
exercisable in accordance with its terms, without regard to the number of
shares, price, exercise period or any other term or condition of such
surrendered Option.
ARTICLE IV.
TERMS OF OPTIONS
4.1 OPTION AGREEMENT. Each Option shall be evidenced by a written Stock
Option Agreement, which shall be executed by the Optionee and an authorized
officer of the Company and which shall contain such terms and conditions as the
Committee shall determine, consistent with this Plan.
4.2 OPTION PRICE. The price per share of the shares subject to each
Option shall be set by the Committee; provided, however, that unless otherwise
permitted by applicable securities laws, such price shall be not less than
eighty-five percent (85%) of the Fair Market Value of the stock at the time the
option is granted.
4.3 OPTION TERM. The term of an Option shall be set by the Committee in
its discretion; provided, however, that:
(a) no Option may have a term that extends beyond the expiration
of ten (10) years from the date the Option was granted; and
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(b) the Committee may extend the term of any outstanding Option in
connection with any Termination of Employment of the Optionee, or amend any
other term or condition of such Option relating to such a termination; and
(c) Unless otherwise permitted by applicable securities laws, in
the event of an Optionee's Termination of Employment for any reason except
death, Disability or Termination for Cause, the Optionee shall have at least
thirty (30) days from the date of such Termination, to exercise the Option, and
in the event of an Optionee's Termination of Employment due to the Optionee's
death or Disability, the Optionee shall have at least six (6) months from the
date of such Option. Notwithstanding the forgoing, if an Optionee's Termination
of Employment also qualifies as a Termination for Cause, the Company, in its
discretion, may terminate the Optionee's right to exercise his or her Options on
the date of such termination or such other time as the Committee in its
discretion, shall deem appropriate.
4.4 OPTION VESTING.
(a) The period during which the right to exercise an Option in whole
or in part vests in the Optionee shall be set by the Committee and the
Committee may determine that an Option may not be exercised in whole or in
part for a specified period after it is granted; provided, however, that,
subject to Section 4.4(b), (i) unless otherwise permitted by applicable
securities laws, each Option shall become exercisable no later than five (5)
years after such Option is granted and such Option shall become exercisable
with respect to at least twenty percent (20%) of the shares of Common Stock
subject to such Option, as determined by the Committee in its sole
discretion, on each anniversary of the date of the grant of such Option; and
(ii) unless the Committee otherwise provides in the terms of the Stock Option
Agreement or this Plan otherwise so dictates, no Option shall be exercisable
by any Optionee who is then subject to Section 16 of the Exchange Act within
the period ending six months and one day after the date the Option is
granted; provided, further, that Options may become fully exercisable,
subject to reasonable conditions such as continued employment or consultancy,
at any time or during any period established by the Committee.
(b) No portion of an Option which is unexercisable at Termination
of Employment shall thereafter become exercisable, except as may be otherwise
provided by the Committee either in the Stock Option Agreement or by action of
the following the grant of the Option.
4.5 CONSIDERATION. In consideration of the granting of an Option, the
Optionee shall agree, in the written Stock Option Agreement, to remain in the
employ of the Company or any Subsidiary for a period of at least one (1) year
(or such shorter period as may be fixed in the Stock Option Agreement or by
action of the Committee following grant of the Option) after the Option is
granted. Nothing in this Plan or in any Stock Option Agreement hereunder shall
confer upon any Optionee any right to continue in the employ of the Company or
any Subsidiary or shall interfere with or restrict in any way the rights of the
Company or any Subsidiary, which are hereby expressly reserved, to
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discharge any Optionee at any time for any reason whatsoever, with or without
good cause.
4.6 FINANCIAL STATEMENTS. To the extent required by applicable
securities laws, each Optionee shall receive financial statements of the Company
at least annually.
ARTICLE V.
EXERCISE OF OPTIONS
5.1 PARTIAL EXERCISE. An exercisable Option may be exercised in whole
or in part. However, an Option shall not be exercisable with respect to
fractional shares and the Committee may require that, by the terms of the
Option, a partial exercise be with respect to a minimum number of shares.
5.2 MANNER OF EXERCISE. All or a portion of an exercisable Option shall
be deemed exercised upon delivery of all of the following to the Secretary of
the Company or such Secretary's office:
(a) A written notice complying with the applicable rules established
by the Committee stating that the Option, or a portion thereof, is exercised.
The notice shall be signed by the Optionee or other person then entitled to
exercise the Option or such portion;
(b) Such representations and documents as the Committee, in its
absolute discretion, deems necessary or advisable to effect compliance with
all applicable provisions of the Securities Act and any other federal or
state securities laws or regulations. The Committee may, in its absolute
discretion, also take whatever additional actions it deems appropriate to
effect such compliance including, without limitation, placing legends on
share certificates and issuing stop-transfer notices to agents and registrars;
(c) In the event that the Option shall be exercised pursuant to
Section 8.1 by any person or persons other than the Optionee, appropriate
proof of the right of such person or persons to exercise the Option; and
(d) Full cash payment to the Secretary of the Company for the shares
and for payment of any applicable withholding or other applicable employment
taxes with respect to which the Option, or portion thereof, is exercised.
However, the Committee, may in its discretion (i) allow a delay in payment up
to thirty (30) days from the date the Option, or portion thereof, is
exercised; (ii) allow payment, in whole or in part, through the delivery of
shares of Common Stock owned by the Optionee, duly endorsed for transfer to
the Company with a Fair Market Value on the date of delivery equal to the
aggregate exercise price of the Option or exercised portion thereof; (iii)
allow payment, in whole or in part, through the surrender of shares of Common
Stock then issuable upon exercise of the Option having a Fair Market Value on
the date of Option exercise equal to
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the aggregate exercise price of the Option or exercised portion thereof; (iv)
allow payment, in whole or in part, through the delivery of property of any
kind which constitutes good and valuable consideration; (v) allow payment, in
whole or in part, through the delivery of a full recourse promissory note
bearing interest (at no less than such rate as shall then preclude the
imputation of interest under the Code) and payable upon such terms as may be
prescribed by the Committee; (vi) allow payment, in whole or in part, through
the delivery of a notice that the Optionee has placed a market sell order
with a broker with respect to shares of Common Stock then issuable upon
exercise of the Option, and that the broker has been directed to pay a
sufficient portion of the net proceeds of the sale to the Company in
satisfaction of the Option exercise price and any applicable withholding or
other employment taxes; or (vii) allow payment through any combination of the
consideration provided in the foregoing subparagraphs (ii), (iii), (iv), (v)
and (vi). In the case of a promissory note, the Committee may also prescribe
the form of such note and the security to be given for such note. The Option
may not be exercised, however, by delivery of a promissory note or by a loan
from the Company when or where such loan or other extension of credit is
prohibited by law.
5.3 CONDITIONS TO ISSUANCE OF STOCK CERTIFICATES. The Company shall not
be required to issue or deliver any certificate or certificates for shares of
stock purchased upon the exercise of any Option or portion thereof prior to
fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all stock exchanges,
if any, on which such class of stock is then listed;
(b) The completion of any registration or other qualification of
such shares under any state or federal law, or under the rulings or
regulations of the Securities and Exchange Commission or any other
governmental regulatory body which the Committee or the Board shall, in its
absolute discretion, deem necessary or advisable;
(c) The obtaining of any approval or other clearance from any state
or federal governmental agency which the Committee or the Board shall, in its
absolute discretion, determine to be necessary or advisable;
(d) The lapse of such reasonable period of time following the
exercise of the Option as the Committee or the Board may establish from time
to time for reasons of administrative convenience; and
(e) The receipt by the Company of full payment for such shares,
including payment of any applicable withholding tax.
5.4 RIGHTS AS SHAREHOLDERS. The holders of Options shall not be, nor
have any of the rights or privileges of, shareholders of the Company in respect
of any shares purchasable upon the exercise of any part of an Option unless and
until certificates representing such shares have been issued by the Company to
such holders.
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ARTICLE VI.
ADMINISTRATION
6.1 COMPENSATION COMMITTEE. The Compensation Committee (or another
committee of the Board assuming the functions of the Committee under this Plan)
shall consist solely of two or more Independent Directors appointed by and
holding office at the pleasure of the Board, each of whom is a "non-employee
director" as defined by Rule 16(b)-3. Appointment of Committee members shall be
effective upon acceptance of appointment. Committee members may resign at any
time by delivering written notice to the Board. Vacancies in the Committee may
be filled by the Board.
6.2 DUTIES AND POWERS OF COMMITTEE. It shall be the duty of the
Committee to conduct the general administration of this Plan in accordance with
its provisions. The Committee shall have the power to interpret this Plan and
the agreements pursuant to which Options are granted or awarded, and to adopt
such rules for the administration, interpretation, and application of this Plan
as are consistent therewith and to interpret, amend or revoke any such rules.
Any such grant or award under this Plan need not be the same with respect to
each Optionee. In its absolute discretion, the Board may at any time and from
time to time exercise any and all rights and duties of the Committee under this
Plan except with respect to matters which under Rule 16b-3 are required to be
determined in the sole discretion of the Committee.
6.3 MAJORITY RULE; UNANIMOUS WRITTEN CONSENT. The Committee shall act
by a majority of its members in attendance at a meeting at which a quorum is
present or by a memorandum or other written instrument signed by all members of
the Committee.
6.4 COMPENSATION; PROFESSIONAL ASSISTANCE; GOOD FAITH ACTIONS. Members
of the Committee shall receive such compensation for their services as members
as may be determined by the Board. All expenses and liabilities which members of
the Committee incur in connection with the administration of this Plan shall be
borne by the Company. The Committee may, with the approval of the Board, employ
attorneys, consultants, accountants, appraisers, brokers, or other persons. The
Committee, the Company and the Company's officers and Directors shall be
entitled to rely upon the advice, opinions or valuations of any such persons.
All actions taken and all interpretations and determinations made by the
Committee or the Board in good faith shall be final and binding upon all
Optionees, the Company and all other interested persons. No members of the
Committee or Board shall be personally liable for any action, determination or
interpretation made in good faith with respect to this Plan or Options, and all
members of the Committee and the Board shall be fully protected by the Company
in respect of any such action, determination or interpretation.
ARTICLE VII.
MISCELLANEOUS PROVISIONS
7.1 NOT TRANSFERABLE.
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(a) Options under this Plan may not be sold, pledged, assigned, or
transferred in any manner other than by will or the laws of descent and
distribution or pursuant to a QDRO, unless and until such options have been
exercised, or the shares underlying such Options have been issued, and all
restrictions applicable to such shares have lapsed. No Option or interest or
right therein shall be liable for the debts, contracts or engagements of the
Optionee or the Optionee's successors in interest or shall be subject to
disposition by transfer, alienation, anticipation, pledge, encumbrance,
assignment or any other means whether such disposition be voluntary or
involuntary or by operation of law by judgment, levy, attachment, garnishment or
any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect, except to
the extent that such disposition is permitted by the preceding sentence.
(b) During the lifetime of the Optionee, only such Optionee may
exercise an Option (or any portion thereof) granted to such Optionee under the
Plan, unless the Option has been disposed of pursuant to a QDRO. After the death
of the Optionee, any exercisable portion of an Option may, prior to the time
when such portion becomes unexercisable under the Plan or the applicable Stock
Option Agreement or other agreement, be exercised by the Optionee's personal
representative or by any person empowered to do so under the deceased Optionee's
will or under the then applicable laws of descent and distribution.
7.2 AMENDMENT, SUSPENSION OR TERMINATION OF THIS PLAN. Except as
otherwise provided in this Section 7.2, this Plan may be wholly or partially
amended or otherwise modified, suspended or terminated at any time or from time
to time by the Board or the Committee. No action of the Board or the Committee
may be taken that would require shareholder approval as a matter of applicable
law, regulation or rule. No amendment, suspension or termination of this Plan
shall, without the consent of the holder of Options, alter or impair any rights
or obligations under any Options theretofore granted or awarded, unless the
award itself otherwise expressly so provides. No Options may be granted or
awarded during any period of suspension or after termination of this Plan.
7.3 CHANGES IN COMMON STOCK OR ASSETS OF THE COMPANY, ACQUISITION OR
LIQUIDATION OF THE COMPANY AND OTHER CORPORATE EVENTS.
(a) Subject to Section 7.3(d), (A) in the event that the Committee
determines that any dividend or other distribution (whether in the form of cash,
Common Stock, other securities, or other property), recapitalization,
reclassification, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, liquidation, dissolution, or sale, transfer, exchange
or other disposition of all or substantially all of the assets of the Company
(including, but not limited to, a Corporate Transaction), or exchange of Common
Stock or other securities of the Company, issuance of warrants or other rights
to purchase Common Stock or other securities of the Company, or other similar
corporate transaction or event, in the Committee's sole discretion, affects the
Common Stock such that an adjustment is determined by the
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Committee to be appropriate in order to prevent dilution or enlargement of
the benefits or potential benefits intended to be made available under the
Plan or with respect to an Option, or (B) in the event of any stock split or
reverse stock split, then the Committee shall, in such manner as it may deem
equitable, adjust any or all of
(i) the number and kind of shares of Common Stock (or other
securities or property) with respect to which Options may be granted under the
Plan, (including, but not limited to, adjustments of the limitations in Section
2.1 on the maximum number and kind of shares which may be issued and adjustments
of the Award Limit),
(ii) the number and kind of shares of Common Stock (or other
securities or property) subject to outstanding Options, and
(iii) the grant or exercise price with respect to any Option.
(b) Subject to Section 7.3(d), in the event of any Corporate
Transaction or other transaction or event described in Section 7.3(a) or any
unusual or nonrecurring transactions or events affecting the Company, any
Affiliate of the Company, or the financial statements of the Company or any
Affiliate, or of changes in applicable laws, regulations, or accounting
principles, the Committee in its discretion is hereby authorized to take any one
(1) or more of the following actions whenever the Committee determines that such
action is appropriate in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the Plan or
with respect to any option under this Plan, to facilitate such transactions or
events or to give effect to such changes in laws, regulations or principles:
(i) In its sole and absolute discretion, and on such terms
and conditions as it deems appropriate, the Committee may provide, either by the
terms of the agreement or by action taken prior to the occurrence of such
transaction or event and either automatically or upon the Optionee's request,
for either the purchase of any such Option for an amount of cash equal to the
amount that could have been attained upon the exercise of such Option, or
realization of the Optionee's rights had such Option been currently exercisable
or payable or fully vested or the replacement of such Option with other rights
or property selected by the Committee in its sole discretion;
(ii) In its sole and absolute discretion, the Committee may
provide, either by the terms of such Option or by action taken prior to the
occurrence of such transaction or event that it cannot be exercised after such
event;
(iii) In its sole and absolute discretion, and on such terms
and conditions as it deems appropriate, the Committee may provide, either by the
terms of such Option or by action taken prior to the occurrence of such
transaction or event, that for a specified period of time prior to such
transaction or event, such Option shall be exercisable as to all shares covered
thereby, notwithstanding anything to the contrary in (i) Section 4.4 or (ii) the
provisions of such Option;
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(iv) In its sole and absolute discretion, and on such terms
and conditions as it deems appropriate, the Committee may provide, either by the
terms of such Option or by action taken prior to the occurrence of such
transaction or event, that upon such event, such Option be assumed by the
successor or survivor corporation, or a parent or subsidiary thereof, or shall
be substituted for by similar options covering the stock of the successor or
survivor corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to the number and kind of shares and prices; and
(v) In its sole and absolute discretion, and on such terms
and conditions as it deems appropriate, the Committee may make adjustments in
the number and type of shares of Common Stock (or other securities or property)
subject to outstanding Options and/or in the terms and conditions of (including
the grant or exercise price), and the criteria included in, outstanding Options
and Options which may be granted in the future.
(c) Subject to Section 7.3(d) and 7.8, the Committee may, in its
discretion, include such further provisions and limitations in any Option as it
may deem equitable and in the best interests of the Company.
7.4 TAX WITHHOLDING. The Company shall be entitled to require payment
in cash or deduction from other compensation payable to each Optionee of any
sums required by federal, state or local tax law to be withheld with respect to
the issuance, vesting or exercise of any Option. The Committee may in its
discretion and in satisfaction of the foregoing requirement allow such Optionee
to satisfy withholding tax obligations by electing to have the Company withhold
from the shares of Common Stock to be issued upon exercise of an Option that
number of shares having a Fair Market Value equal to the minimum amount required
to be withheld based on the statutory withholding rates for federal and state
tax purposes that apply to supplemental taxable income. The Fair Market Value of
the shares of Common Stock to be withheld shall be determined on the date that
the amount of tax to be withheld is to be determined. All elections by Optionees
to have shares of Common Stock withheld for this purpose shall be made in such
form and under such conditions as the Committee may deem necessary or advisable.
7.5 LOANS. The Committee may, in its discretion, extend one (1) or more
loans to key Employees in connection with the exercise or receipt of an Option
granted under this Plan. The terms and conditions of any such loan shall be set
by the Committee.
7.6 LIMITATIONS APPLICABLE TO SECTION 16 PERSONS AND PERFORMANCE-BASED
COMPENSATION. Notwithstanding any other provision of this Plan, this Plan, and
any Option granted to any individual who is then subject to Section 16 of the
Exchange Act, shall be subject to any additional limitations set forth in any
applicable exemptive rule under Section 16 of the Exchange Act (including any
amendment to Rule 16b-3 of the Exchange Act) that are requirements for the
application of such exemptive rule. To the extent permitted by applicable law,
the Plan and Options granted or awarded
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hereunder shall be deemed amended to the extent necessary to conform to such
applicable exemptive rule.
7.7 EFFECT OF PLAN UPON OPTIONS AND COMPENSATION PLANS. The adoption of
this Plan shall not affect any other compensation or incentive plans in effect
for the Company or any Subsidiary. Nothing in this Plan shall be construed to
limit the right of the Company (i) to establish any other forms of incentives or
compensation for Employees, directors or consultants of the Company or any
Subsidiary or (ii) to grant or assume options or other rights otherwise than
under this Plan in connection with any proper corporate purpose including but
not by way of limitation, the grant or assumption of options in connection with
the acquisition by purchase, lease, merger, consolidation or otherwise, of the
business, stock or assets of any corporation, partnership, limited liability
company, firm or association.
7.8 COMPLIANCE WITH LAWS. This Plan, the granting and vesting of
Options under this Plan and the issuance and delivery of shares of Common Stock
and the payment of money under this Plan or under Options granted hereunder are
subject to compliance with all applicable federal and state laws, rules and
regulations (including but not limited to state and federal securities law and
federal margin requirements) and to such approvals by any listing, regulatory or
governmental authority as may, in the opinion of counsel for the Company, be
necessary or advisable in connection therewith. Any securities delivered under
this Plan shall be subject to such restrictions, and the person acquiring such
securities shall, if requested by the Company, provide such assurances and
representations to the Company as the Company may deem necessary or desirable to
assure compliance with all applicable legal requirements. To the extent
permitted by applicable law, the Plan and Options granted or awarded hereunder
shall be deemed amended to the extent necessary to conform to such laws, rules
and regulations.
7.9 TITLES. Titles are provided herein for convenience only and are not
to serve as a basis for interpretation or construction of this Plan.
7.10 GOVERNING LAW. This Plan and any agreements hereunder shall be
administered, interpreted and enforced under the internal laws of the State of
Delaware without regard to conflicts of laws thereof.
* * *
I hereby certify that the foregoing Plan was duly adopted by the Board
of Directors of Eco Soil Systems, Inc. on June 4, 1999.
Executed on this 4th day of June, 1999.
/s/ Mark D. Buckner
-------------------------
Secretary
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EXHIBIT 4.5
ECO SOIL SYSTEMS, INC.
NON STATUTORY STOCK OPTION AGREEMENT
The Company has granted to the Optionee, pursuant to a Notice of Grant of
Stock Options (the "GRANT AGREEMENT") an option to purchase certain shares of
Stock, upon the terms and conditions set forth in this Option Agreement (the
"OPTION"). The Option shall in all respects be subject to the terms and
conditions of the Grant Agreement, the provisions of which are incorporated
herein by reference.
1. DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. Unless otherwise defined herein, capitalized terms
shall have the meanings assigned to such terms in the Grant Agreement.
1.2 CONSTRUCTION. Captions and titles contained herein are for
convenience only and shall not affect the meaning or interpretation of any
provision of this Option Agreement. Except when otherwise indicated by the
context, the singular shall include the plural and the plural shall include the
singular. Use of the term "or" is not intended to be exclusive, unless the
context clearly requires otherwise.
2. TAX STATUS OF OPTION. As indicated in the Grant Agreement, this Option
is intended to be a Nonstatutory Stock Option and is not intended to be an
incentive stock option within the meaning of Section 422(b) of the Code. The
Optionee should consult with the Optionee's own tax advisor regarding the tax
effects of this Option.
3. ADMINISTRATION. All questions of interpretation concerning this Option
Agreement shall be determined by the Board. All determinations by the Board
shall be final and binding upon all persons having an interest in the Option.
Any officer of the Company or its subsidiaries (collectively, a "Participating
Company" and collectively, the "Participating Company Group") shall have the
authority to act on behalf of the Company with respect to any matter, right,
obligation, or election which is the responsibility of or which is allocated to
the Company herein, provided the officer has apparent authority with respect to
such matter, right, obligation, or election.
4. EXERCISE OF THE OPTION.
4.1 RIGHT TO EXERCISE. Except as otherwise provided herein, the Option
shall be exercisable in accordance with the terms of the Grant Agreement prior
to the termination of the Option (as provided in Section 6) in an amount not to
exceed the number of vested Option shares. In no event shall the Option be
exercisable for more shares than the Number of Option Shares.
4.2 METHOD OF EXERCISE. Exercise of the Option shall be by written
notice to the Company which must state the election to exercise the Option, the
number of whole shares of
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Stock for which the Option is being exercised and such other representations
and agreements as to the Optionee's investment intent with respect to such
shares as may be required pursuant to the provisions of this Option
Agreement. The written notice must be signed by the Optionee and must be
delivered in person, by certified or registered mail, return receipt
requested, by confirmed facsimile transmission, or by such other means as the
Company may permit, to the Stock Option Plan Administrator of the Company, or
other authorized representative of the Participating Company Group, prior to
the termination of the Option as set forth in Section 6, accompanied by full
payment of the aggregate Exercise Price for the number of shares of Stock
being purchased. The Option shall be deemed to be exercised upon receipt by
the Company of such written notice and the aggregate Exercise Price.
4.3 PAYMENT OF EXERCISE PRICE.
(a) FORMS OF CONSIDERATION AUTHORIZED. Except as otherwise
provided below, payment of the aggregate Exercise Price for the number of shares
of Stock for which the Option is being exercised shall be made (i) in cash, by
check, or cash equivalent, (ii) by tender to the Company, or attestation to the
ownership, of whole shares of Stock owned by the Optionee having a Fair Market
Value (as determined by the Company without regard to any restrictions on
transferability applicable to such stock by reason of federal or state
securities laws or agreements with an underwriter for the Company) not less than
the aggregate Exercise Price, (iii) by means of a Cashless Exercise, as defined
in Section 4.3(c), or (iv) by any combination of the foregoing.
(b) TENDER OF STOCK. Notwithstanding the foregoing, the Option may
not be exercised by tender to the Company, or attestation to the ownership, of
shares of Stock to the extent such tender, or attestation to the ownership, of
Stock would constitute a violation of the provisions of any law, regulation or
agreement restricting the redemption of the Company's stock. The Option may not
be exercised by tender to the Company, or attestation to the ownership, of
shares of Stock unless such shares either have been owned by the Optionee for
more than six (6) months or were not acquired, directly or indirectly, from the
Company.
(c) CASHLESS EXERCISE. A "CASHLESS EXERCISE" means the assignment
in a form acceptable to the Company of the proceeds of a sale or loan with
respect to some or all of the shares of Stock acquired upon the exercise of the
Option pursuant to a program or procedure approved by the Company (including,
without limitation, through an exercise complying with the provisions of
Regulation T as promulgated from time to time by the Board of Governors of the
Federal Reserve System). The Company reserves, at any and all times, the right,
in the Company's sole and absolute discretion, to decline to approve or
terminate any such program or procedure.
4.4 TAX WITHHOLDING. At the time the Option is exercised, in whole or
in part, or at any time thereafter as requested by the Company, the Optionee
hereby authorizes withholding from payroll and any other amounts payable to the
Optionee, and otherwise agrees to make adequate provision for (including by
means of a Cashless Exercise to the extent permitted by the Company), any sums
required to satisfy the federal, state, local and foreign tax
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withholding obligations of the Participating Company Group, if any, which
arise in connection with the Option, including, without limitation,
obligations arising upon (i) the exercise, in whole or in part, of the
Option, (ii) the transfer, in whole or in part, of any shares acquired upon
exercise of the Option, (iii) the operation of any law or regulation
providing for the imputation of interest, or (iv) the lapsing of any
restriction with respect to any shares acquired upon exercise of the Option.
The Optionee is cautioned that the Option is not exercisable unless the tax
withholding obligations of the Participating Company Group are satisfied.
Accordingly, the Optionee may not be able to exercise the Option when desired
even though the Option is vested, and the Company shall have no obligation to
issue a certificate for such shares.
4.5 CERTIFICATE REGISTRATION. Except in the event the Exercise Price is
paid by means of a Cashless Exercise, the certificate for the shares as to which
the Option is exercised shall be registered in the name of the Optionee, or, if
applicable, in the names of the heirs of the Optionee.
4.6 RESTRICTIONS ON GRANT OF THE OPTION AND ISSUANCE OF SHARES. The
grant of the Option and the issuance of shares of Stock upon exercise of the
Option shall be subject to compliance with all applicable requirements of
federal, state or foreign law with respect to such securities. The Option may
not be exercised if the issuance of shares of Stock upon exercise would
constitute a violation of any applicable federal, state or foreign securities
laws or other law or regulations or the requirements of any stock exchange or
market system upon which the Stock may then be listed. In addition, the Option
may not be exercised unless (i) a registration statement under the Securities
Act shall at the time of exercise of the Option be in effect with respect to the
shares issuable upon exercise of the Option or (ii) in the opinion of legal
counsel to the Company, the shares issuable upon exercise of the Option may be
issued in accordance with the terms of an applicable exemption from the
registration requirements of the Securities Act. THE OPTIONEE IS CAUTIONED THAT
THE OPTION MAY NOT BE EXERCISED UNLESS THE FOREGOING CONDITIONS ARE SATISFIED.
ACCORDINGLY, THE OPTIONEE MAY NOT BE ABLE TO EXERCISE THE OPTION WHEN DESIRED
EVEN THOUGH THE OPTION IS VESTED. The inability of the Company to obtain from
any regulatory body having jurisdiction the authority, if any, deemed by the
Company's legal counsel to be necessary to the lawful issuance and sale of any
shares subject to the Option shall relieve the Company of any liability in
respect of the failure to issue or sell such shares as to which such requisite
authority shall not have been obtained. As a condition to the exercise of the
Option, the Company may require the Optionee to satisfy any qualifications that
may be necessary or appropriate, to evidence compliance with any applicable law
or regulation and to make any representation or warranty with respect thereto as
may be requested by the Company.
4.7 FRACTIONAL SHARES. The Company shall not be required to issue
fractional shares upon the exercise of the Option.
5. NONTRANSFERABILITY OF THE OPTION. The Option may be exercised during the
lifetime of the Optionee only by the Optionee or the Optionee's guardian or
legal representative and may not be assigned or transferred in any manner except
by will or by the laws of descent and distribution. Following the death of the
Optionee, the Option, to the extent provided in
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Section 7, may be exercised by the Optionee's legal representative or by any
person empowered to do so under the deceased Optionee's will or under the
then applicable laws of descent and distribution.
6. TERMINATION OF THE OPTION. The Option shall terminate and may no longer
be exercised on the first to occur of (a) the Option Expiration Date, (b) the
last date for exercising the Option following termination of the Optionee's
Service as described in Section 7, or (c) a Transfer of Control to the extent
provided in Section 8.
7. EFFECT OF TERMINATION OF SERVICE.
7.1 OPTION EXERCISABILITY.
(a) DISABILITY. If the Optionee's Service (whether as an employee,
consultant or director) with the Participating Company Group is terminated
because of the Disability of the Optionee, the Option, to the extent unexercised
and exercisable on the date on which the Optionee's Service terminated, may be
exercised by the Optionee (or the Optionee's guardian or legal representative)
at any time prior to the expiration of six (6) months after the date on which
the Optionee's Service terminated, but in any event no later than the Option
Expiration Date.
(b) DEATH. If the Optionee's Service with the Participating
Company Group is terminated because of the death of the Optionee, the Option, to
the extent unexercised and exercisable on the date on which the Optionee's
Service terminated, may be exercised by the Optionee's legal representative or
other person who acquired the right to exercise the Option by reason of the
Optionee's death at any time prior to the expiration of six (6) months after the
date on which the Optionee's Service terminated, but in any event no later than
the Option Expiration Date. The Optionee's Service shall be deemed to have
terminated on account of death if the Optionee dies within thirty (30) days
after the Optionee's termination of Service.
(c) OTHER TERMINATION OF SERVICE. If the Optionee's Service with
the Participating Company Group terminates for any reason, except Disability or
death, the Option, to the extent unexercised and exercisable by the Optionee on
the date on which the Optionee's Service terminated, may be exercised by the
Optionee within thirty (30) days (or such other longer period of time as
determined by the Board, in its sole discretion) after the date on which the
Optionee's Service terminated, but in any event no later than the Option
Expiration Date.
7.2 EXTENSION IF EXERCISE PREVENTED BY LAW. Notwithstanding the
foregoing, if the exercise of the Option within the applicable time periods set
forth in Section 7.1 is prevented by the provisions of Section 4.6, the Option
shall remain exercisable until one (1) month after the date the Optionee is
notified by the Company that the Option is exercisable, but in any event no
later than the Option Expiration Date. The Company makes no representation as to
the tax consequences of any such delayed exercise. The Optionee should consult
with the Optionee's own tax advisor as to the tax consequences of any such
delayed exercise.
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7.3 EXTENSION IF OPTIONEE SUBJECT TO SECTION 16(b). Notwithstanding the
foregoing, if a sale within the applicable time periods set forth in Section 7.1
of shares acquired upon the exercise of the Option would subject the Optionee to
suit under Section 16(b) of the Exchange Act, the Option shall remain
exercisable until the earliest to occur of (i) the tenth (10th) day following
the date on which a sale of such shares by the Optionee would no longer be
subject to such suit, (ii) the one hundred and ninetieth (190th) day after the
Optionee's termination of Service, or (iii) the Option Expiration Date. The
Company makes no representation as to the tax consequences of any such delayed
exercise. The Optionee should consult with the Optionee's own tax advisor as to
the tax consequences of any such delayed exercise.
8. TRANSFER OF CONTROL.
8.1 DEFINITIONS.
(a) An "OWNERSHIP CHANGE EVENT" shall be deemed to have occurred
if any of the following occurs with respect to the Company:
(i) the direct or indirect sale or exchange in a single or
series of related transactions by the shareholders of the Company of more than
fifty percent (50%) of the voting stock of the Company;
(ii) a merger or consolidation in which the Company is a
party;
(iii) the sale, exchange, or transfer of all or substantially
all of the assets of the Company; or
(iv) a liquidation or dissolution of the Company.
(b) A "TRANSFER OF CONTROL" shall mean an Ownership Change Event
or a series of related Ownership Change Events (collectively, the "TRANSACTION")
wherein the shareholders of the Company immediately before the Transaction do
not retain immediately after the Transaction, in substantially the same
proportions as their ownership of shares of the Company's voting stock
immediately before the Transaction, direct or indirect beneficial ownership of
more than fifty percent (50%) of the total combined voting power of the
outstanding voting stock of the Company or the corporation or corporations to
which the assets of the Company were transferred (the "TRANSFEREE
CORPORATION(S)"), as the case may be. For purposes of the preceding sentence,
indirect beneficial ownership shall include, without limitation, an interest
resulting from ownership of the voting stock of one or more corporations which,
as a result of the Transaction, own the Company or the Transferee
Corporation(s), as the case may be, either directly or through one or more
subsidiary corporations. The Board shall have the right to determine whether
multiple sales or exchanges of the voting stock of the Company or multiple
Ownership Change Events are related, and its determination shall be final,
binding and conclusive.
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8.2 EFFECT OF TRANSFER OF CONTROL ON OPTION. In the event of a Transfer
of Control, the surviving, continuing, successor, or purchasing corporation or
parent corporation thereof, as the case may be (the "ACQUIRING CORPORATION"),
may either assume the Company's rights and obligations under the Option or
substitute for the Option a substantially equivalent option for the Acquiring
Corporation's stock. For purposes of this Section 8.2, the Option shall be
deemed assumed if, following the Transfer of Control, the Option confers the
right to purchase in accordance with its terms and conditions, for each share of
Stock subject to the Option immediately prior to the Transfer of Control, the
consideration (whether stock, cash or other securities or property) to which a
holder of a share of Stock on the effective date of the Transfer of Control was
entitled. The Option shall terminate and cease to be outstanding effective as of
the date of the Transfer of Control to the extent that the Option is neither
assumed or substituted for by the Acquiring Corporation in connection with the
Transfer of Control nor exercised as of the date of the Transfer of Control.
Notwithstanding the foregoing, shares acquired upon exercise of the Option prior
to the Transfer of Control and any consideration received pursuant to the
Transfer of Control with respect to such shares shall continue to be subject to
all applicable provisions of this Option Agreement except as otherwise provided
herein. Furthermore, notwithstanding the foregoing, if the corporation the stock
of which is subject to the Option immediately prior to an Ownership Change Event
described in Section 8.1(a)(i) constituting a Transfer of Control is the
surviving or continuing corporation and immediately after such Ownership Change
Event less than fifty percent (50%) of the total combined voting power of its
voting stock is held by another corporation or by other corporations that are
members of an affiliated group within the meaning of Section 1504(a) of the Code
without regard to the provisions of Section 1504(b) of the Code, the Option
shall not terminate unless the Board otherwise provides in its sole discretion.
9. ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE. In the event of any stock
dividend, stock split, reverse stock split, recapitalization, combination,
reclassification, or similar change in the capital structure of the Company,
appropriate adjustments shall be made in the number, Exercise Price and class of
shares of stock subject to the Option. If a majority of the shares which are of
the same class as the shares that are subject to the Option are exchanged for,
converted into, or otherwise become (whether or not pursuant to an Ownership
Change Event) shares of another corporation (the "NEW SHARES"), the Board may
unilaterally amend the Option to provide that the Option is exercisable for New
Shares. In the event of any such amendment, the Number of Option Shares and the
Exercise Price shall be adjusted in a fair and equitable manner, as determined
by the Board, in its sole discretion. Notwithstanding the foregoing, any
fractional share resulting from an adjustment pursuant to this Section 9 shall
be rounded up or down to the nearest whole number, as determined by the Board,
and in no event may the Exercise Price be decreased to an amount less than the
par value, if any, of the stock subject to the Option. The adjustments
determined by the Board pursuant to this Section 9 shall be final, binding and
conclusive.
10. RIGHTS AS A SHAREHOLDER, EMPLOYEE OR CONSULTANT. The Optionee shall
have no rights as a shareholder with respect to any shares covered by the Option
until the date of the issuance of a certificate for the shares for which the
Option has been exercised (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of
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the Company). No adjustment shall be made for dividends, distributions or
other rights for which the record date is prior to the date such certificate
is issued, except as provided in Section 9. If the Optionee is an Employee,
the Optionee understands and acknowledges that, except as otherwise provided
in a separate, written employment agreement between a Participating Company
and the Optionee, the Optionee's employment is "at will" and is for no
specified term. Nothing in this Option Agreement shall confer upon the
Optionee any right to continue in the Service of a Participating Company or
interfere in any way with any right of the Participating Company Group to
terminate the Optionee's Service as an Employee or Consultant, as the case
may be, at any time.
11. LEGENDS. The Company may at any time place legends referencing any
applicable federal, state or foreign securities law restrictions on all
certificates representing shares of stock subject to the provisions of this
Option Agreement. The Optionee shall, at the request of the Company, promptly
present to the Company any and all certificates representing shares acquired
pursuant to the Option in the possession of the Optionee in order to carry out
the provisions of this Section. Unless otherwise specified by the Company,
legends placed on such certificates may include, but shall not be limited to,
the following:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH
RULE 144 OR RULE 701 UNDER THE ACT, OR THE COMPANY RECEIVES AN OPINION OF
COUNSEL FOR THE HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY TO THE
COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT
FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT."
12. PUBLIC OFFERING. The Optionee hereby agrees that in the event of any
underwritten public offering of stock, including an initial public offering of
stock, made by the Company pursuant to an effective registration statement filed
under the Securities Act, the Optionee shall not offer, sell, contract to sell,
pledge, hypothecate, grant any option to purchase or make any short sale of, or
otherwise dispose of any shares of stock of the Company or any rights to acquire
stock of the Company for such period of time from and after the effective date
of such registration statement as may be established by the underwriter for such
public offering; provided, however, that such period of time shall not exceed
one hundred eighty (180) days from the effective date of the registration
statement to be filed in connection with such public offering. The foregoing
limitation shall not apply to shares registered in the public offering under the
Securities Act. The Optionee shall be subject to this Section provided and only
if the officers and directors of the Company are also subject to similar
arrangements.
13. RESTRICTIONS ON TRANSFER OF SHARES. No shares acquired upon exercise of
the Option may be sold, exchanged, transferred (including, without limitation,
any transfer to a nominee or agent of the Optionee), assigned, pledged,
hypothecated or otherwise disposed of,
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including by operation of law, in any manner which violates any of the
provisions of this Option Agreement and any such attempted disposition shall
be void. The Company shall not be required (a) to transfer on its books any
shares which will have been transferred in violation of any of the provisions
set forth in this Option Agreement or (b) to treat as owner of such shares or
to accord the right to vote as such owner or to pay dividends to any
transferee to whom such shares will have been so transferred.
14. BINDING EFFECT. Subject to the restrictions on transfer set forth
herein, this Option Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective heirs, executors, administrators,
successors and assigns.
15. TERMINATION OR AMENDMENT. The Board may terminate or amend this Option
at any time; provided, however, that except as provided in Section 8.2 in
connection with a Transfer of Control, no such termination or amendment may
adversely affect the Option or any unexercised portion hereof without the
consent of the Optionee unless such termination or amendment is necessary to
comply with any applicable law or government regulation. No amendment or
addition to this Option Agreement shall be effective unless in writing.
16. NOTICES. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given (except to the extent that this
Option Agreement provides for effectiveness only upon actual receipt of such
notice) upon personal delivery or upon deposit in the United States Post Office,
by registered or certified mail, with postage and fees prepaid, addressed to the
other party at the address shown on the Grant Agreement or at such other address
as such party may designate in writing from time to time to the other party.
17. INTEGRATED AGREEMENT. The Grant Agreement and this Option Agreement
constitute the entire understanding and agreement of the Optionee and the
Participating Company Group with respect to the subject matter contained herein
and therein and there are no agreements, understandings, restrictions,
representations, or warranties among the Optionee and the Participating Company
Group with respect to such subject matter other than those as set forth or
provided for herein or therein. To the extent contemplated herein or therein,
the provisions of the Grant Agreement and this Option Agreement shall survive
any exercise of the Option and shall remain in full force and effect.
18. APPLICABLE LAW. This Option Agreement shall be governed by the laws of
the State of Delaware as such laws are applied to agreements between Delaware
residents entered into and to be performed entirely within the State of
Delaware.
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Optionee: ________________________
Date: ________________________
EXERCISE NOTICE
Eco Soil Systems, Inc.
________________________
________________________
Attention: Stock Option Plan Administrator
Ladies and Gentlemen:
1. EXERCISE OF OPTION. I was granted a nonstatutory stock option (the
"OPTION") to purchase shares of the common stock of Eco Soil Systems, Inc. (the
"COMPANY") on ___________________, 19___, pursuant to the Notice of Grant of
Stock Options dated __________________, 19___ and the related Stock Option
Agreement (together, the "OPTION AGREEMENT"). I hereby elect to exercise the
Option as to a total of __________________ shares of the common stock of the
Company (the "SHARES"), all of which have vested in accordance with the Option
Agreement.
2. PAYMENT. Enclosed herewith is full payment in the aggregate amount
of $_____________ (representing $_______ per share) for the Shares in the manner
set forth in the Option Agreement. I authorize payroll withholding and otherwise
will make adequate provision for foreign, federal and state tax withholding
obligations of the Company, if any.
3. BINDING EFFECT. I agree that the Shares are being acquired in
accordance with and subject to the terms, provisions and conditions of the
Option Agreement set forth therein, to all of which I hereby expressly assent.
This Agreement shall inure to the benefit of and be binding upon my heirs,
executors, administrators, successors and assigns.
4. TRANSFER. I am aware that Rule 144, promulgated under the Securities
Act of 1933, which permits limited public resale of securities acquired in a
nonpublic offering, is not currently available with respect to the Shares and,
in any event, is available only if certain conditions are satisfied. I
understand that any sale of the Shares that might be made in reliance upon Rule
144 may only be made in limited amounts in accordance with the terms and
conditions of such rule and that a copy of Rule 144 will be delivered to me upon
request.
My address of record is:
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______________________________________________________________
______________________________________________________________
My Social Security Number is:
_______________________________
I understand that I am purchasing the Shares pursuant to the terms of
my Option Agreement, copies of which I have received and carefully read and
understand.
Very truly yours,
(Signature) _______________________________
(Optionee's Name Printed) _______________________________
Receipt of the above is hereby acknowledged.
ECO SOIL SYSTEMS, INC.
By: _______________________________
Name: _____________________________
Title: ____________________________
Date: _____________________________
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ECO SOIL SYSTEMS, INC.
NON STATUTORY STOCK OPTION AGREEMENT
The Company has granted to the Optionee, pursuant to a Notice of Grant
of Stock Options (the "GRANT AGREEMENT") an option to purchase certain shares
of Stock, upon the terms and conditions set forth in this Option Agreement
(the "OPTION"). The Option shall in all respects be subject to the terms and
conditions of the Grant Agreement, the provisions of which are incorporated
herein by reference.
1. DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. Unless otherwise defined herein, capitalized terms
shall have the meanings assigned to such terms in the Grant Agreement.
1.2 CONSTRUCTION. Captions and titles contained herein are for
convenience only and shall not affect the meaning or interpretation of any
provision of this Option Agreement. Except when otherwise indicated by the
context, the singular shall include the plural and the plural shall include
the singular. Use of the term "or" is not intended to be exclusive, unless
the context clearly requires otherwise.
2. TAX STATUS OF OPTION. As indicated in the Grant Agreement, this
Option is intended to be a Nonstatutory Stock Option and is not intended to
be an incentive stock option within the meaning of Section 422(b) of the
Code. The Optionee should consult with the Optionee's own tax advisor
regarding the tax effects of this Option.
3. ADMINISTRATION. All questions of interpretation concerning this
Option Agreement shall be determined by the Board. All determinations by the
Board shall be final and binding upon all persons having an interest in the
Option. Any officer of the Company or its subsidiaries (collectively, a
"Participating Company" and collectively, the "Participating Company Group")
shall have the authority to act on behalf of the Company with respect to any
matter, right, obligation, or election which is the responsibility of or
which is allocated to the Company herein, provided the officer has apparent
authority with respect to such matter, right, obligation, or election.
4. EXERCISE OF THE OPTION.
4.1 RIGHT TO EXERCISE. Except as otherwise provided herein, the
Option shall be exercisable in accordance with the terms of the Grant
Agreement prior to the termination of the Option (as provided in Section 6)
in an amount not to exceed the number of vested Option shares. In no event
shall the Option be exercisable for more shares than the Number of Option
Shares.
4.2 METHOD OF EXERCISE. Exercise of the Option shall be by written
notice to the Company which must state the election to exercise the Option,
the number of whole shares of
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Stock for which the Option is being exercised and such other representations
and agreements as to the Optionee's investment intent with respect to such
shares as may be required pursuant to the provisions of this Option
Agreement. The written notice must be signed by the Optionee and must be
delivered in person, by certified or registered mail, return receipt
requested, by confirmed facsimile transmission, or by such other means as the
Company may permit, to the Stock Option Plan Administrator of the Company, or
other authorized representative of the Participating Company Group, prior to
the termination of the Option as set forth in Section 6, accompanied by full
payment of the aggregate Exercise Price for the number of shares of Stock
being purchased. The Option shall be deemed to be exercised upon receipt by
the Company of such written notice and the aggregate Exercise Price.
4.3 PAYMENT OF EXERCISE PRICE.
(a) FORMS OF CONSIDERATION AUTHORIZED. Except as otherwise
provided below, payment of the aggregate Exercise Price for the number of
shares of Stock for which the Option is being exercised shall be made (i) in
cash, by check, or cash equivalent, (ii) by tender to the Company, or
attestation to the ownership, of whole shares of Stock owned by the Optionee
having a Fair Market Value (as determined by the Company without regard to
any restrictions on transferability applicable to such stock by reason of
federal or state securities laws or agreements with an underwriter for the
Company) not less than the aggregate Exercise Price, (iii) by means of a
Cashless Exercise, as defined in Section 4.3(c), or (iv) by any combination
of the foregoing.
(b) TENDER OF STOCK. Notwithstanding the foregoing, the Option
may not be exercised by tender to the Company, or attestation to the
ownership, of shares of Stock to the extent such tender, or attestation to
the ownership, of Stock would constitute a violation of the provisions of any
law, regulation or agreement restricting the redemption of the Company's
stock. The Option may not be exercised by tender to the Company, or
attestation to the ownership, of shares of Stock unless such shares either
have been owned by the Optionee for more than six (6) months or were not
acquired, directly or indirectly, from the Company.
(c) CASHLESS EXERCISE. A "CASHLESS EXERCISE" means the
assignment in a form acceptable to the Company of the proceeds of a sale or
loan with respect to some or all of the shares of Stock acquired upon the
exercise of the Option pursuant to a program or procedure approved by the
Company (including, without limitation, through an exercise complying with
the provisions of Regulation T as promulgated from time to time by the Board
of Governors of the Federal Reserve System). The Company reserves, at any and
all times, the right, in the Company's sole and absolute discretion, to
decline to approve or terminate any such program or procedure.
4.4 TAX WITHHOLDING. At the time the Option is exercised, in whole
or in part, or at any time thereafter as requested by the Company, the
Optionee hereby authorizes withholding from payroll and any other amounts
payable to the Optionee, and otherwise agrees to make adequate provision for
(including by means of a Cashless Exercise to the extent permitted by the
Company), any sums required to satisfy the federal, state, local and foreign
tax
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withholding obligations of the Participating Company Group, if any, which
arise in connection with the Option, including, without limitation,
obligations arising upon (i) the exercise, in whole or in part, of the
Option, (ii) the transfer, in whole or in part, of any shares acquired upon
exercise of the Option, (iii) the operation of any law or regulation
providing for the imputation of interest, or (iv) the lapsing of any
restriction with respect to any shares acquired upon exercise of the Option.
The Optionee is cautioned that the Option is not exercisable unless the tax
withholding obligations of the Participating Company Group are satisfied.
Accordingly, the Optionee may not be able to exercise the Option when desired
even though the Option is vested, and the Company shall have no obligation to
issue a certificate for such shares.
4.5 CERTIFICATE REGISTRATION. Except in the event the Exercise Price
is paid by means of a Cashless Exercise, the certificate for the shares as to
which the Option is exercised shall be registered in the name of the
Optionee, or, if applicable, in the names of the heirs of the Optionee.
4.6 RESTRICTIONS ON GRANT OF THE OPTION AND ISSUANCE OF SHARES. The
grant of the Option and the issuance of shares of Stock upon exercise of the
Option shall be subject to compliance with all applicable requirements of
federal, state or foreign law with respect to such securities. The Option may
not be exercised if the issuance of shares of Stock upon exercise would
constitute a violation of any applicable federal, state or foreign securities
laws or other law or regulations or the requirements of any stock exchange or
market system upon which the Stock may then be listed. In addition, the
Option may not be exercised unless (i) a registration statement under the
Securities Act shall at the time of exercise of the Option be in effect with
respect to the shares issuable upon exercise of the Option or (ii) in the
opinion of legal counsel to the Company, the shares issuable upon exercise of
the Option may be issued in accordance with the terms of an applicable
exemption from the registration requirements of the Securities Act. THE
OPTIONEE IS CAUTIONED THAT THE OPTION MAY NOT BE EXERCISED UNLESS THE
FOREGOING CONDITIONS ARE SATISFIED. ACCORDINGLY, THE OPTIONEE MAY NOT BE ABLE
TO EXERCISE THE OPTION WHEN DESIRED EVEN THOUGH THE OPTION IS VESTED. The
inability of the Company to obtain from any regulatory body having
jurisdiction the authority, if any, deemed by the Company's legal counsel to
be necessary to the lawful issuance and sale of any shares subject to the
Option shall relieve the Company of any liability in respect of the failure
to issue or sell such shares as to which such requisite authority shall not
have been obtained. As a condition to the exercise of the Option, the Company
may require the Optionee to satisfy any qualifications that may be necessary
or appropriate, to evidence compliance with any applicable law or regulation
and to make any representation or warranty with respect thereto as may be
requested by the Company.
4.7 FRACTIONAL SHARES. The Company shall not be required to issue
fractional shares upon the exercise of the Option.
5. NONTRANSFERABILITY OF THE OPTION. The Option may be exercised during
the lifetime of the Optionee only by the Optionee or the Optionee's guardian
or legal representative and may not be assigned or transferred in any manner
except by will or by the laws of descent and distribution. Following the
death of the Optionee, the Option, to the extent provided in
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Section 7, may be exercised by the Optionee's legal representative or by any
person empowered to do so under the deceased Optionee's will or under the
then applicable laws of descent and distribution.
6. TERMINATION OF THE OPTION. The Option shall terminate and may no
longer be exercised on the first to occur of (a) the Option Expiration Date
or (b) the last date for exercising the Option following termination of the
Optionee's Service as described in Section 7.
7. EFFECT OF TERMINATION OF SERVICE.
7.1 OPTION EXERCISABILITY.
(a) DISABILITY. If the Optionee's Service (whether as an
employee, consultant or director) with the Participating Company Group is
terminated because of the Disability of the Optionee, the Option, to the
extent unexercised and exercisable on the date on which the Optionee's
Service terminated, may be exercised by the Optionee (or the Optionee's
guardian or legal representative) at any time prior to the expiration of six
(6) months after the date on which the Optionee's Service terminated, but in
any event no later than the Option Expiration Date.
(b) DEATH. If the Optionee's Service with the Participating
Company Group is terminated because of the death of the Optionee, the Option,
to the extent unexercised and exercisable on the date on which the Optionee's
Service terminated, may be exercised by the Optionee's legal representative
or other person who acquired the right to exercise the Option by reason of
the Optionee's death at any time prior to the expiration of six (6) months
after the date on which the Optionee's Service terminated, but in any event
no later than the Option Expiration Date. The Optionee's Service shall be
deemed to have terminated on account of death if the Optionee dies within
thirty (30) days after the Optionee's termination of Service.
(c) OTHER TERMINATION OF SERVICE. If the Optionee's Service
with the Participating Company Group terminates for any reason, except
Disability or death, the Option, to the extent unexercised and exercisable by
the Optionee on the date on which the Optionee's Service terminated, may be
exercised by the Optionee within thirty (30) days (or such other longer
period of time as determined by the Board, in its sole discretion) after the
date on which the Optionee's Service terminated, but in any event no later
than the Option Expiration Date.
7.2 EXTENSION IF EXERCISE PREVENTED BY LAW. Notwithstanding the
foregoing, if the exercise of the Option within the applicable time periods
set forth in Section 7.1 is prevented by the provisions of Section 4.6, the
Option shall remain exercisable until one (1) month after the date the
Optionee is notified by the Company that the Option is exercisable, but in
any event no later than the Option Expiration Date. The Company makes no
representation as to the tax consequences of any such delayed exercise. The
Optionee should consult with the Optionee's own tax advisor as to the tax
consequences of any such delayed exercise.
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7.3 EXTENSION IF OPTIONEE SUBJECT TO SECTION 16(b). Notwithstanding
the foregoing, if a sale within the applicable time periods set forth in
Section 7.1 of shares acquired upon the exercise of the Option would subject
the Optionee to suit under Section 16(b) of the Exchange Act, the Option
shall remain exercisable until the earliest to occur of (i) the tenth (10th)
day following the date on which a sale of such shares by the Optionee would
no longer be subject to such suit, (ii) the one hundred and ninetieth (190th)
day after the Optionee's termination of Service, or (iii) the Option
Expiration Date. The Company makes no representation as to the tax
consequences of any such delayed exercise. The Optionee should consult with
the Optionee's own tax advisor as to the tax consequences of any such delayed
exercise.
8. TRANSFER OF CONTROL.
8.1 DEFINITIONS.
(a) An "OWNERSHIP CHANGE EVENT" shall be deemed to have
occurred if any of the following occurs with respect to the Company:
(i) the direct or indirect sale or exchange in a single or
series of related transactions by the shareholders of the Company of more
than fifty percent (50%) of the voting stock of the Company;
(ii) a merger or consolidation in which the Company is a
party;
(iii) the sale, exchange, or transfer of all or
substantially all of the assets of the Company; or
(iv) a liquidation or dissolution of the Company.
(b) A "TRANSFER OF CONTROL" shall mean an Ownership Change
Event or a series of related Ownership Change Events (collectively, the
"TRANSACTION") wherein the shareholders of the Company immediately before the
Transaction do not retain immediately after the Transaction, in substantially
the same proportions as their ownership of shares of the Company's voting
stock immediately before the Transaction, direct or indirect beneficial
ownership of more than fifty percent (50%) of the total combined voting power
of the outstanding voting stock of the Company or the corporation or
corporations to which the assets of the Company were transferred (the
"TRANSFEREE CORPORATION(S)"), as the case may be. For purposes of the
preceding sentence, indirect beneficial ownership shall include, without
limitation, an interest resulting from ownership of the voting stock of one
or more corporations which, as a result of the Transaction, own the Company
or the Transferee Corporation(s), as the case may be, either directly or
through one or more subsidiary corporations. The Board shall have the right
to determine whether multiple sales or exchanges of the voting stock of the
Company or multiple Ownership Change Events are related, and its
determination shall be final, binding and conclusive.
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8.2 EFFECT OF TRANSFER OF CONTROL ON OPTION. Notwithstanding
anything to the contrary contained in this Option Agreement or the Grant
Agreement, in the event of a Transfer of Control, subject to compliance with
applicable securities laws, this Option shall immediately accelerate in full
and shall become immediately exercisable as to all Shares underlying the
Option. All Shares acquired upon exercise of the Option subsequent to such
acceleration shall continue to be subject to all applicable provisions of
this Option Agreement.
9. ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE. In the event of any
stock dividend, stock split, reverse stock split, recapitalization,
combination, reclassification, or similar change in the capital structure of
the Company, appropriate adjustments shall be made in the number, Exercise
Price and class of shares of stock subject to the Option. If a majority of
the shares which are of the same class as the shares that are subject to the
Option are exchanged for, converted into, or otherwise become (whether or not
pursuant to an Ownership Change Event) shares of another corporation (the
"NEW SHARES"), the Board may unilaterally amend the Option to provide that
the Option is exercisable for New Shares. In the event of any such amendment,
the Number of Option Shares and the Exercise Price shall be adjusted in a
fair and equitable manner, as determined by the Board, in its sole
discretion. Notwithstanding the foregoing, any fractional share resulting
from an adjustment pursuant to this Section 9 shall be rounded up or down to
the nearest whole number, as determined by the Board, and in no event may the
Exercise Price be decreased to an amount less than the par value, if any, of
the stock subject to the Option. The adjustments determined by the Board
pursuant to this Section 9 shall be final, binding and conclusive.
10. RIGHTS AS A SHAREHOLDER, EMPLOYEE OR CONSULTANT. The Optionee shall
have no rights as a shareholder with respect to any shares covered by the
Option until the date of the issuance of a certificate for the shares for
which the Option has been exercised (as evidenced by the appropriate entry on
the books of the Company or of a duly authorized transfer agent of the
Company). No adjustment shall be made for dividends, distributions or other
rights for which the record date is prior to the date such certificate is
issued, except as provided in Section 9. If the Optionee is an Employee, the
Optionee understands and acknowledges that, except as otherwise provided in a
separate, written employment agreement between a Participating Company and
the Optionee, the Optionee's employment is "at will" and is for no specified
term. Nothing in this Option Agreement shall confer upon the Optionee any
right to continue in the Service of a Participating Company or interfere in
any way with any right of the Participating Company Group to terminate the
Optionee's Service as an Employee or Consultant, as the case may be, at any
time.
11. LEGENDS. The Company may at any time place legends referencing any
applicable federal, state or foreign securities law restrictions on all
certificates representing shares of stock subject to the provisions of this
Option Agreement. The Optionee shall, at the request of the Company, promptly
present to the Company any and all certificates representing shares acquired
pursuant to the Option in the possession of the Optionee in order to carry
out the provisions of this Section. Unless otherwise specified by the
Company, legends placed on such certificates may include, but shall not be
limited to, the following:
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"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS
MADE IN ACCORDANCE WITH RULE 144 OR RULE 701 UNDER THE ACT, OR THE COMPANY
RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE SECURITIES REASONABLY
SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR
HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF SUCH ACT."
12. PUBLIC OFFERING. The Optionee hereby agrees that in the event of any
underwritten public offering of stock, including an initial public offering
of stock, made by the Company pursuant to an effective registration statement
filed under the Securities Act, the Optionee shall not offer, sell, contract
to sell, pledge, hypothecate, grant any option to purchase or make any short
sale of, or otherwise dispose of any shares of stock of the Company or any
rights to acquire stock of the Company for such period of time from and after
the effective date of such registration statement as may be established by
the underwriter for such public offering; provided, however, that such period
of time shall not exceed one hundred eighty (180) days from the effective
date of the registration statement to be filed in connection with such public
offering. The foregoing limitation shall not apply to shares registered in
the public offering under the Securities Act. The Optionee shall be subject
to this Section provided and only if the officers and directors of the
Company are also subject to similar arrangements.
13. RESTRICTIONS ON TRANSFER OF SHARES. No shares acquired upon exercise
of the Option may be sold, exchanged, transferred (including, without
limitation, any transfer to a nominee or agent of the Optionee), assigned,
pledged, hypothecated or otherwise disposed of, including by operation of
law, in any manner which violates any of the provisions of this Option
Agreement and any such attempted disposition shall be void. The Company shall
not be required (a) to transfer on its books any shares which will have been
transferred in violation of any of the provisions set forth in this Option
Agreement or (b) to treat as owner of such shares or to accord the right to
vote as such owner or to pay dividends to any transferee to whom such shares
will have been so transferred.
14. BINDING EFFECT. Subject to the restrictions on transfer set forth
herein, this Option Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, executors,
administrators, successors and assigns.
15. TERMINATION OR AMENDMENT. The Board may terminate or amend this
Option at any time; provided, however, that no such termination or amendment
may adversely affect the Option or any unexercised portion hereof without the
consent of the Optionee unless such termination or amendment is necessary to
comply with any applicable law or government regulation. No amendment or
addition to this Option Agreement shall be effective unless in writing.
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16. NOTICES. Any notice required or permitted hereunder shall be given
in writing and shall be deemed effectively given (except to the extent that
this Option Agreement provides for effectiveness only upon actual receipt of
such notice) upon personal delivery or upon deposit in the United States Post
Office, by registered or certified mail, with postage and fees prepaid,
addressed to the other party at the address shown on the Grant Agreement or
at such other address as such party may designate in writing from time to
time to the other party.
17. INTEGRATED AGREEMENT. The Grant Agreement and this Option Agreement
constitute the entire understanding and agreement of the Optionee and the
Participating Company Group with respect to the subject matter contained
herein and therein and there are no agreements, understandings, restrictions,
representations, or warranties among the Optionee and the Participating
Company Group with respect to such subject matter other than those as set
forth or provided for herein or therein. To the extent contemplated herein or
therein, the provisions of the Grant Agreement and this Option Agreement
shall survive any exercise of the Option and shall remain in full force and
effect.
18. APPLICABLE LAW. This Option Agreement shall be governed by the laws
of the State of Delaware as such laws are applied to agreements between
Delaware residents entered into and to be performed entirely within the State
of Delaware.
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Optionee: ________________________
Date: ________________________
EXERCISE NOTICE
Eco Soil Systems, Inc.
___________________________
___________________________
Attention: Stock Option Plan Administrator
Ladies and Gentlemen:
1. EXERCISE OF OPTION. I was granted a nonstatutory stock option
(the "OPTION") to purchase shares of the common stock of Eco Soil Systems,
Inc. (the "COMPANY") on ___________________, 19___, pursuant to the Notice of
Grant of Stock Options dated __________________, 19___ and the related Stock
Option Agreement (together, the "OPTION AGREEMENT"). I hereby elect to
exercise the Option as to a total of __________________ shares of the common
stock of the Company (the "SHARES"), all of which have vested in accordance
with the Option Agreement.
2. PAYMENT. Enclosed herewith is full payment in the aggregate
amount of $_____________ (representing $_______ per share) for the Shares in
the manner set forth in the Option Agreement. I authorize payroll withholding
and otherwise will make adequate provision for foreign, federal and state tax
withholding obligations of the Company, if any.
3. BINDING EFFECT. I agree that the Shares are being acquired in
accordance with and subject to the terms, provisions and conditions of the
Option Agreement set forth therein, to all of which I hereby expressly
assent. This Agreement shall inure to the benefit of and be binding upon my
heirs, executors, administrators, successors and assigns.
4. TRANSFER. I am aware that Rule 144, promulgated under the
Securities Act of 1933, which permits limited public resale of securities
acquired in a nonpublic offering, is not currently available with respect to
the Shares and, in any event, is available only if certain conditions are
satisfied. I understand that any sale of the Shares that might be made in
reliance upon Rule 144 may only be made in limited amounts in accordance with
the terms and conditions of such rule and that a copy of Rule 144 will be
delivered to me upon request.
My address of record is:
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____________________________________________________________________
____________________________________________________________________
My Social Security Number is:
_____________________________________________
I understand that I am purchasing the Shares pursuant to the terms
of my Option Agreement, copies of which I have received and carefully read
and understand.
Very truly yours,
(Signature) ___________________________________
(Optionee's Name Printed) ___________________________________
Receipt of the above is hereby acknowledged.
ECO SOIL SYSTEMS, INC.
By:________________________________
Name:______________________________
Title:_____________________________
Date:______________________________
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[Letterhead of Fitzgerald, Schorr, Barmettler & Brennan, P.C]
February 10, 2000
Eco Soil Systems, Inc.
10740 Thornmint Road
San Diego, California 92127
Re: Eco Soil Systems, Inc.: Registration Statement on Form S-8
Ladies and Gentlemen:
This firm has been engaged as special counsel to Eco Soil Systems, Inc. (the
"Company") for the limited purpose of providing an opinion as to the status
of the shares of the common stock, $.005 par value of the Company (the
"Shares") issuable pursuant to the 1992 Stock Option Plan, The Amended and
Restated 1998 Stock Option Plan, The 1999 Equity Participation Plan of Eco
Soil Systems, Inc. and The 1999 New Hire Stock Option Plan of Eco Soil
Systems, Inc. (collectively the "Plans") and certain Non-Statutory Stock
Option Agreements of the Company (collectively the "Agreements"). This
opinion is being given in connection with the proposed registration of the
Shares on Form S-8 with the Securities and Exchange Commission (the
"Registration Statement").
In rendering this opinion, we have examined the law and the following documents:
A. The Certificate of Existence issued by the Secretary of State of the
State of Nebraska and dated January 7, 2000.
B. A copy of the Amended and Restated Articles of Incorporation as
certified by the Secretary of State of the State of Nebraska on
January 7, 2000.
C. A telefaxed copy of the Secretary's Certificate, executed by Mark D.
Buckner as Secretary of the Company (the "Secretary's Certificate")
with respect to the authorized and outstanding shares of the common
stock of the Company and the resolutions of the Board of Directors
authorizing the Plans, the Agreements and the filing of the
Registration Statement.
We have not been engaged nor have undertaken to review the accuracy,
completeness or sufficiency of the Registration Statement, nor with respect
to any other matter not specifically stated in this opinion, and we express
no opinion relating thereto.
<PAGE>
Eco Soil Systems, Inc.
February 10, 2000
- - Page 2 -
As to questions of fact material to our opinion, we have relied upon the
foregoing documents, including the representations of officials of the
Company contained in the above specified documents. We have not undertaken to
verify any of the foregoing by independent investigation and have assumed the
authenticity of the original documents and the conformity of the copies
submitted to us to the authentic original documents. Moreover, we have
assumed the legal capacity for all purposes relevant hereto of all natural
persons and that such persons had the requisite power and authority to
execute and deliver such documents and that the signatures thereon are
genuine.
Based upon the foregoing, we are of the opinion that under the Business
Corporation Act in effect on the date hereof in Nebraska, the Shares have
been duly authorized and, upon issuance, delivery and payment therefor in
accordance with the terms of the Plans and Agreements, respectively, as
applicable, will be validly issued and will be fully paid and nonassessable.
The foregoing opinion is limited to the laws of the State of Nebraska and we
express no opinion as to matters governed by any laws other than those of the
State of Nebraska nor to any matter not expressly addressed herein. Our
opinion is further subject to the following qualifications and exceptions:
A. The effect of any applicable bankruptcy, insolvency, reorganization,
moratorium or other similar law of general application governing
creditors' rights; and
B. General principles of equity, including (without limitation) concepts
of materiality, reasonableness, good faith and fair dealing, and other
similar doctrines affecting enforceability of agreements generally.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Yours very truly,
/S/ FITZGERALD, SCHORR, BARMETTLER & BRENNAN, P.C.
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement on
Form S-8 pertaining to Eco Soil Systems, Inc.'s 1992 Stock Option Plan, The
Amended and Restated 1998 Stock Option Plan of Eco Soil Systems, Inc., The
1999 Equity Participation Plan of Eco Soil Systems, Inc., The 1999 New Hire
Stock Option Plan of Eco Soil, Options Granted Pursuant to Non-Statutory
Stock Option Agreements, of our report dated March 9, 1999, except for Note 4
and Note 8, as to which the date is March 31, 1999, with respect to the
consolidated financial statements and schedule of Eco Soil Systems, Inc.
included in its Annual Report (Form 10-K) for the year ended December 31,
1998, filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
San Diego, California
February 9, 2000
