U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB/A NO. 2
(MARK ONE)
<CHECKED-BOX> ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED JUNE_30,_1997.
<SQUARE> TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ________TO_________
COMMISSION FILE NUMBER 1-12738
ONSITE ENERGY CORPORATION
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
DELAWARE 33-0576371
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
701 PALOMAR AIRPORT ROAD, SUITE 200
CARLSBAD, CALIFORNIA 92009
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(760) 931-2400
(ISSUER'S TELEPHONE NUMBER)
SECURITIES REGISTERED UNDER SECTION 12(B) OF THE ACT: NONE
SECURITIES REGISTERED UNDER SECTION 12(G) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON
WHICH REGISTERED
CLASS A COMMON STOCK OTC BULLETIN BOARD
CHECK WHETHER THE ISSUER (1) FILED ALL REPORTS REQUIRED TO BE FILED BY
SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING THE
PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS
REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR THE PAST 90 DAYS. YES <CHECKED-BOX> NO <SQUARE>
CHECK IF NO DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM 405 OF
REGULATION S-B IS CONTAINED IN THIS FORM, AND NO DISCLOSURE WILL BE
CONTAINED, TO THE BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR
INFORMATION STATEMENTS INCORPORATED BY REFERENCE IN PART III OF THIS FORM
10-KSB OR ANY AMENDMENT TO THIS FORM 10-KSB. <SQUARE>
STATE ISSUER'S REVENUES FOR ITS MOST RECENT FISCAL YEAR: $9,561,375
STATE THE AGGREGATE MARKET VALUE OF THE VOTING AND NON-VOTING COMMON EQUITY
HELD BY NON AFFILIATES COMPUTED BY REFERENCE TO THE PRICE AT WHICH THE
COMMON EQUITY WAS SOLD, OR THE AVERAGE BID AND ASKED PRICE OF SUCH COMMON
EQUITY, AS OF A SPECIFIED DATE WITHIN THE PAST 60 DAYS: $1,835,946 AS OF
SEPTEMBER 22, 1997.
THE NUMBER OF SHARES OF COMMON STOCK OUTSTANDING AS OF SEPTEMBER 22, 1997,
IS 10,944,172.
DOCUMENTS INCORPORATED BY REFERENCE: NONE
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
DIRECTORS
The following table sets forth the persons currently serving as directors
of Onsite, and certain information with respect to those persons.
Director Age Director Since
Charles C. McGettigan 52 1993
Richard T. Sperberg 46 1982 (1)
William M. Gary III 46 1982 (1)
H. Tate Holt 45 1994
Timothy G. Clark 58 1994
(1) Includes time of service with Onsite-Cal.
BACKGROUND OF DIRECTORS
CHARLES C. MCGETTIGAN. Mr. McGettigan has been a director of Onsite since
its inception in 1993, and began serving as the Chairman of the Board in
December 1994. Mr. McGettigan became a director of Western Energy
Management, Inc., currently a wholly-owned subsidiary of Onsite
("Western"), in May 1992. He was a founding partner in 1991 and is a
general partner of Proactive Investment Managers, L.P., which is the
general partner of Proactive Partners, L.P., a merchant banking fund. Mr.
McGettigan co-founded McGettigan, Wick & Co., Inc., an investment banking
firm, in 1988. From 1984 to 1988, he was a Principal, Corporate Finance,
of Hambrecht & Quist, Inc. He currently serves on the Boards of Directors
of digital dictation inc., I-Flow Corporation, Modtech, Inc., NDE
Environmental Corporation, Phoenix Network, Inc., PMR Corporation, Sonex
Research, Inc. and Wray-Tech Instruments, Inc. Mr. McGettigan is a
graduate of Georgetown University, and received his MBA from The Wharton
School of Business of the University of Pennsylvania.
RICHARD T. SPERBERG. Mr. Sperberg has been a director, and the Chief
Executive Officer and President, of Onsite since its inception in 1993, and
currently also serves as the Chief Financial Officer. He has been the
Chief Executive Officer of Western since January 1993, and began serving as
a director of Western in February 1994. In 1982, Mr. Sperberg co-founded
Onsite-Cal, and served as President, Chief Executive Officer and a director
until February 1994, when Onsite-Cal and Western reorganized into Onsite.
Mr. Sperberg has been involved in project management of energy efficiency,
advanced energy technologies, alternative energy and cogeneration projects
for twenty (20) years, with specific management experience with Onsite-Cal,
the Gas Research Institute, and the U.S. Department of Energy. He holds a
Masters of Science in Nuclear Engineering from the University of
California, Los Angeles, and a Bachelor of Science in Nuclear Engineering
from the University of California, Santa Barbara. Mr. Sperberg previously
served on the Boards of Directors of the American Cogeneration Association
and the San Diego Cogeneration Association, and currently serves on the
Board of Directors of the National Association of Energy Service Companies
("NAESCO"), and as NAESCO's First Vice President.
WILLIAM M. GARY III. Mr. Gary has been the Executive Vice President,
Secretary and a director of Onsite since its inception in 1993. Mr. Gary
co-founded Onsite-Cal in 1982, and served as the Chairman of the Board and
the Executive Vice President of Onsite-Cal until February 1994, when
Onsite-Cal and Western reorganized into Onsite. Mr. Gary has been involved
in energy efficiency, alternative energy and cogeneration projects for
twenty (20) years. Prior to co-founding Onsite-Cal, Mr. Gary was a
consultant with Arco Solar and held numerous management positions with San
Diego Gas & Electric in the alternative energy and conservation fields. He
currently serves as a member of the Board of Directors of the San Diego
Cogeneration Association. Mr. Gary holds a Bachelor of Science in
Mechanical Engineering from California Polytechnic University. He is a
licensed professional engineer in California and a Certified Energy
Manager.
H. TATE HOLT. Mr. Holt has been a director of Onsite since May 1994. Mr.
Holt currently is the President of Holt & Associates, a corporate growth
management consulting firm, and has held that position since July 1990.
Previously, from 1987 to 1990, Mr. Holt was Senior Vice President of
Automatic Data Processing, Inc. ("ADP"), in Santa Clara, California. Mr.
Holt has over twenty (20) years of experience in various senior sales and
marketing positions with Fortune 50 and Inc. 500 companies, including IBM,
Triad Systems and ADP. He has participated in major restructuring and
strategic planning in several divisions of each of these companies. Since
1990, Holt & Associates has assisted its small and medium-sized clients in
developing and achieving aggressive growth targets. Mr. Holt currently
serves on the Board of Directors of DBS Industries, Inc., and is the author
of the book "The Business Doc - Prescriptions for Growth." Mr. Holt holds
an A.B. from Indiana University.
TIMOTHY G. CLARK. Mr. Clark began serving as a director of Onsite in
October 1994. The former President and Chief Executive Officer of KA
Industries, Inc., a privately owned corporation that manufactures and sells
premium gift baked goods, Mr. Clark currently serves as a consultant to a
variety of clients through his own firm, T.G. Clark & Associates. From
1991 to 1994, Mr. Clark was a managing partner at Hankin & Co., a
consulting company focusing on business and financial planning, including
turnarounds. He currently serves on Board of Directors of Orchids Paper
Products Company. Mr. Clark holds an A.B. from the University of Southern
California and a Master of Business Administration from the Harvard
University Graduate School of Business.
COMPLIANCE WITH SECTION 16 OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Onsite directors, executive officers and persons who own more than ten
percent (10%) of Onsite's Class A Common Stock to file reports of ownership
and changes in ownership with the Securities and Exchange Commission (the
"SEC") and, as applicable, the American Stock Exchange (the "AMEX") or the
National Association of Securities Dealers (the "NASD"). Directors,
officers and stockholders of more than ten percent (10%) of Onsite's Class
A Common Stock are required by the SEC regulations to furnish Onsite with
copies of all Section 16(a) forms they file.
Based solely on review of the copies of such forms furnished to Onsite, or
written representations that such filings were not required, Onsite
believes that since July 1, 1996, through the end of its most recent fiscal
year, all Section 16(a) filing requirements applicable to its directors,
officers and stockholders of more than ten percent (10%) of Onsite's Class
A Common Stock were complied with except as follows: (i) one (1) report
(Form 5) covering three (3) transactions inadvertently was filed late by
Mr. Holt; (ii) one (1) report (Form 5) covering two (2) transactions
inadvertently was filed late by Mr. Clark; and (iii) one (1) report
covering one (1) transaction inadvertently was filed late by Mr. Schall.
Additionally, Onsite has not received copies of a Form 5 from two (2)
former officers of Onsite.
EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the
executive officers of Onsite. *
Name Positions with Onsite Age Office Held Since
Charles C. McGettigan Chairman of the Board 52 1994
Richard T. Sperberg President, Chief Executive 46 1982 (1)
Officer, Chief Financial
Officer
William M. Gary III Executive Vice President, 46 1982 (1)
Secretary
Hector A. Esquer Vice President 39 1991 (1)
Frank J. Mazanec Vice President 49 1992 (1)
Keith G. Davidson Vice President 46 1994
Hugh E. Schall Vice President 56 1996
* Michael C. McMurtry served as Vice President of Onsite until his
resignation in February 1997, and William G. Gang served as Vice President
of Onsite until his resignation in July 1997.
(1) Includes time of service with Onsite-Cal.
Executive officers are elected annually by the Board of Directors and serve
at the pleasure of the Board. No family relationship exists between any of
the officers or directors.
BACKGROUND OF EXECUTIVE OFFICERS
For the business backgrounds of Messrs. McGettigan, Sperberg and Gary, see
BACKGROUND OF DIRECTORS above.
HECTOR A. ESQUER. Mr. Esquer is a professional engineer licensed in the
states of California and New Mexico. Mr. Esquer joined Onsite-Cal in 1986,
and is responsible for the overall management of project implementation.
Mr. Esquer previously was a Project Engineer for San Diego Gas & Electric
and Fluor Corporation. Mr. Esquer holds a Bachelor of Science in
Electrical Engineering from San Diego State University and is a Certified
Energy Manager.
FRANK J. MAZANEC. Since 1992, Mr. Mazanec has been employed by Onsite and
its predecessor, Onsite-Cal. Mr. Mazanec is a licensed professional
engineer in Colorado. Over the past twenty (20) years, he has developed
and managed over One Hundred Million Dollars ($100,000,000) in energy
generation, waste management and environmental projects. Prior to joining
Onsite-Cal in 1992, Mr. Mazanec served as West Coast Regional Director for
Wheelabrator Technologies, which included responsibility for the Spokane
and Pierce County, Washington and Baltimore, Maryland, Waste-to-Energy
facilities. In 1990, he formed Integrated Waste Management, Inc., through
which he served as a consultant to Onsite-Cal until joining Onsite-Cal in
1992. Mr. Mazanec is responsible for managing one of Onsite's internal
business units. Mr. Mazanec has a Bachelor of Science in Civil Engineering
from the University of Vermont, a Bachelor of Science in Economics and
Finance from Fairleigh Dickinson University, and a Master of Business
Administration from the University of Southern California.
KEITH G. DAVIDSON. Mr. Davidson has been a Vice President of Onsite since
1994, and has over twenty (20) years of diversified management experience
in energy and environmental technology, product commercialization and
market development. Mr. Davidson is responsible for Onsite's professional
services practice and energy services business in Northern California,
Texas and the mid-West. Prior to joining Onsite in 1994, Mr. Davidson was
Director, Power Generation and Transportation Systems for the Gas Research
Institute in Chicago, Illinois, where he led the gas industry's
collaborative development programs directed at natural gas growth markets
of electric power generation, cogeneration and natural gas vehicles. Mr.
Davidson was past President of the American Cogeneration Association, and a
member of the American Society of Heating, Refrigerating and Air
Conditioning Engineers, and currently serves as the co-Chairman of CADER.
He is the recipient of several industry honors, including the Association
of Energy Engineers' Cogeneration Professional of the Year in 1989, and was
inducted into the American Gas Association's Industrial and Commercial Hall
of Flame. Mr. Davidson is responsible for managing one of Onsite's
internal business units. He earned a Bachelor of Science in Mechanical
Engineering from the University of Missouri and a Master of Science in
Mechanical Engineering from Stanford University.
HUGH E. SCHALL. Mr. Schall joined Onsite in 1996 and is responsible for
Onsite's professional and energy services provided to heavy industry. Mr.
Schall is a registered Professional Engineer in nineteen (19) states and
has designed facilities for the power, oil and gas, chemical, and pulp and
paper industries. Prior to joining Onsite, Mr. Schall was an Executive
Vice President with HNTB Corporation, where his responsibilities covered
the firm's design practice in the Western United States. Mr. Schall was
the principal-in-charge of the design that won the 1987 American Consulting
Engineers Council's (ACEC) highest award, the "Grand Conceptor," for the I-
90 Mt. Baker Ridge Tunnel in Seattle, Washington. This same project also
won the American Society of Civil Engineers' (ASCE) and the National
Society of Professional Engineers' (NSPE) highest design awards. Mr.
Schall's design for the Anti-Siltation Project at the Port of Grays Harbor,
Washington, and Paper Recycling Facility for Stone Container at Missoula,
Montana, also won ACEC grand awards. He has operated oil, gas and nuclear
fired power plants, and has managed recycled pulp and paper operations.
Mr. Schall earned a Bachelor of Science in Engineering from the U.S. Naval
Academy, and a Master of Business Administration from Golden Gate
University.
ITEM 10. EXECUTIVE COMPENSATION
The following table sets forth the aggregate cash compensation paid for the
past three (3) fiscal years by Onsite and its predecessors for services of
Mr. Sperberg (President, Chief Executive Officer and Chief Financial
Officer), and the four (4) most highly compensated executive officers:
Messrs. Gary (Executive Vice President and Secretary), Mazanec (Vice
President), Davidson (Vice President) and Gang (former Vice President).
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
Annual Compensation Awards Payouts
Restricted Securities LTIP Pay- All Other
Other Annual Stock Underlying outs Compensation
Name and Fiscal Salary Bonus Compensation Award(s) Options ($) ($)
Principal Position Year ($) ($) ($) ($) (#)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Richard T. 1997 $136,000 $-0- $15,781 (1) -0- 356,716 (4) -0- $ -0-
Sperberg, 1996 $130,000 $13,473 $15,953 (1) -0- 375,205 (5) -0- $ -0-
CEO and President 1995 $145,000 $-0- $7,501 (1) -0- -0- (6) -0- $ -0-
William M. Gary 1997 $120,000 $-0- $7,953 (1) -0- 78,870 (7) -0- $ -0-
III, 1996 $115,000 $4,504 $12,945 (1) -0- 145,361 (8) -0- $ -0-
EVP and Secretary 1995 $124,000 $-0- $8,178 (1) -0- -0- (9) -0- $ -0-
Frank J. Mazanec, 1997 $127,000 $-0- $64,471 (1) (2) -0- 277,652 (10) -0- $ -0-
Vice President 1996 $120,000 $8,815 $49,663 (1) (2) -0- 142,904 (11) -0- $ -0-
1995 $122,167 $-0- $7,667 (1) -0- -0- (12) -0- $ -0-
Keith G. Davidson 1997 $102,000 $-0- $20,838 (1) (2) -0- 119,118 (13) -0- $ -0-
Vice President 1996 $105,000 $1,426 $43,860 (1) (2) -0- 137,597 (14) -0- $ -0-
1995 $110,625 $-0- $5,459 (1) -0- -0- (15) -0- $ -0-
William G. Gang, 1997 $105,000 $-0- $39,656 (1) (2) (3) -0- 35,251 (16) -0- $ -0-
Vice President 1996 $100,000 $3,023 $33,178 (1) (2) (3) -0- 97,062 (17) -0- $ -0-
1995 $41,667 $-0- $15,775 (1) (2) (3) -0- 70,000 (18) -0- $ -0-
</TABLE>
* Mr. Gang resigned as Vice President of Onsite effective as of July 9,
1997.
(1) Includes a company car or car expense allowance and premiums for life
insurance pursuant to the terms of a written employment agreement (which
terminated in February 1997), or pursuant to the terms of an offer of
employment or continued employment (See EMPLOYMENT AGREEMENTS WITH
EXECUTIVE OFFICERS).
(2) Includes commissions paid or advanced in connection with negotiated
customer contracts pursuant to the commission policy of Onsite.
(3) Includes temporary living accommodation expense reimbursement pursuant
to the offer of employment.
(4) Includes (i) a five year option to purchase 250,000 shares of Class A
Common Stock at $0.3251 per share granted on March 13, 1997, subject to
vesting: 83,334 shares vest in fiscal year 1998; 83,333 shares vest in
fiscal year 1999; and 83,333 shares vest in fiscal year 2000; and (ii) five
year options to purchase 42,100 shares of Class A Common Stock at $0.2956
per share, as repriced on March 13, 1997, and a 10 year option to purchase
64,616 shares of Class A Common Stock at $0.2956 per share, as repriced on
March 13, 1997 (which options are fully vested).
(5) Includes (i) a five year option to purchase 150,000 shares of Class A
Common Stock at $0.28 per share, as repriced on August 9, 1995, subject to
vesting as follows: 50,000 shares vested in fiscal year 1995, 50,000 shares
vested in fiscal year 1996, and 50,000 shares vested in fiscal year 1997;
and (ii) 10 year options to purchase (a) 52,808 shares of Class A Common
Stock at $0.50 per share granted on November 20, 1995; (b) 107,781 shares
of Class A Common Stock at $0.50 per share granted on January 25, 1996; and
(c) 64,616 shares of Class A Common Stock at $0.2956 per share granted on
May 22, 1996, and as repriced on March 13, 1997 (which options are fully
vested).
(6) Mr. Sperberg previously reported a 10 year option to purchase 150,000
shares of Class A Common Stock at $0.875 per share, which subsequently was
relinquished.
(7) Includes (i) a five year option to purchase 25,000 shares of Class A
Common Stock at $0.3251 per share granted on March 13, 1997, subject to
vesting: 8,334 shares vest in fiscal year 1998; 8,333 shares vest in fiscal
year 1999; and 8,333 shares vest in fiscal year 2000; and (ii) five year
options to purchase 39,200 shares of Class A Common Stock at $0.2956 per
share, as repriced on March 13, 1997, and a 10 year option to purchase
14,670 shares of Class A Common Stock at $0.2956 per share, as repriced on
March 13, 1997 (which options are fully vested).
(8) Includes (i) a five year option to purchase 100,000 shares of Class A
Common Stock at $0.28 per share, as repriced on August 9, 1995, subject to
vesting as follows: 33,334 shares vested in fiscal year 1995, 33,333
shares vested in fiscal year 1996, and 33,333 shares vested in fiscal year
1997; and (ii) 10 year options to purchase (a) 13,608 shares of Class A
Common Stock at $0.50 per share granted on November 20, 1995; (b) 17,083
shares of Class A Common Stock at $0.50 per share granted on January 25,
1996; and (c) 14,670 shares of Class A Common Stock at $0.2956 per share
granted on May 22, 1996, and as repriced on March 13, 1997 (which options
are fully vested).
(9) Mr. Gary previously reported a 10 year option to purchase 100,000
shares of Class A Common Stock at $0.875 per share, which subsequently was
relinquished.
(10) Includes (i) a 10 year option to purchase 250,000 shares of Class A
Common Stock at $0.2956 per share granted on March 13, 1997, subject to
vesting: 83,334 shares vest in fiscal year 1998; 83,333 shares vest in
fiscal year 1999; and 83,333 shares vest in fiscal year 2000; and (ii) five
year options to purchase 9,300 shares of Class A Common Stock at $0.2956
per share, as repriced on March 13, 1997, and a 10 year option to purchase
18,352 of Class A Common Stock at $0.2956 per share, as repriced on March
13, 1997 (which options are fully vested).
(11) Includes 10 year options to purchase (i) 70,000 shares of Class A
Common Stock at $0.25 per share, as repriced on August 9, 1995, subject to
vesting as follows: 23,334 shares vested in fiscal year 1995, 23,333
shares vested in fiscal year 1996, and 23,333 shares vested in fiscal year
1997; (ii) 7,736 shares of Class A Common Stock at $0.50 per share granted
on November 20, 1995; (iii) 46,816 shares of Class A Common Stock at $0.50
per share granted on January 25, 1996; and (iv) 18,352 shares of Class A
Common Stock at $0.2956 per share granted on May 22, 1996, and as repriced
on March 13, 1997 (which above options are fully vested).
(12) Mr. Mazanec previously reported a 10 year option to purchase 70,000
shares of Class A Common Stock at $0.875 per share, which subsequently was
relinquished.
(13) Includes 10 year options to purchase (i) 100,000 shares of Class A
Common Stock at $0.2956 per share granted on March 13, 1997, subject to
vesting as follows: 33,334 shares vest in fiscal year 1998; 33,333 shares
vest in fiscal year 1999; and 33,333 shares vest in fiscal year 2000; and
(ii) 19,118 shares of Class A Common Stock at $0.2956 per share granted on
May 22, 1996, and as repriced on March 13, 1997 (which options are fully
vested).
(14) Includes 10 year options to purchase (i) 70,000 shares of Class A
Common Stock at $0.25 per share, as repriced on August 9, 1995, subject to
vesting as follows: 23,334 shares vested in fiscal year 1995, 23,333
shares vested in fiscal year 1996, and 23,333 shares vested in fiscal year
1997; (ii) 37,072 shares of Class A Common Stock at $0.50 per share granted
on November 20, 1995; (iii) 11,407 shares of Class A Common Stock at $0.50
per share granted on January 25, 1996; and (iv) 19,118 shares of Class A
Common Stock at $0.2956 per share granted on May 22, 1996, and as repriced
on March 13, 1997 (which options are fully vested).
(15) Mr. Davidson previously reported a 10 year option to purchase 70,000
shares of Class A Common Stock at $0.875 per share, which subsequently was
relinquished.
(16) Includes 10 year options to purchase (i) 25,000 shares of Class A
Common Stock at $0.2956 per share granted on March 13, 1997, subject to
vesting as follows: 8,334 shares vest in fiscal year 1998; 8,333 shares
vest in fiscal year 1999; and 8,333 shares vest in fiscal year 2000; and
(ii) 10,251 shares of Class A Common Stock at $0.2956 per share granted on
May 22, 1996, and as repriced on March 13, 1997 (which options are fully
vested).
(17) Includes 10 year options to purchase (i) 70,000 shares of Class A
Common Stock at $0.25 per share, as repriced on August 9, 1995, subject to
vesting as follows: 23,334 shares vested in fiscal year 1996, 23,333
shares vested in fiscal year 1997, and, had Mr. Gang continued employment
with Onsite, 23,333 shares would have vested in fiscal year 1998; (ii)
5,528 shares of Class A Common Stock at $0.50 per share granted on November
20, 1995; (iii) 11,283 shares of Class A Common Stock at $0.50 per share
granted on January 25, 1996; and (iv) 10,251 shares of Class A Common Stock
at $0.2956 per share granted on May 22, 1996, and as repriced on March 13,
1997 (which options are fully vested).
(18) Represents a 10 year option to purchase 70,000 shares of Class A
Common Stock at $0.25 per share, as repriced on August 9, 1995, subject to
vesting as follows: 23,334 shares vested in fiscal year 1996; 23,333 shares
vested in fiscal year 1997; and, had Mr. Gang continued employment with
Onsite, 23,333 shares would have vested in fiscal year 1998.
The following table sets forth options granted by Onsite to the individuals
listed in the Summary Compensation Table.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
Number of Percentage of
Securities Total
Underlying Options/SARs
Options/SARs Granted to Exercise or Market
Granted Employees Base Price Price on Date Expiration
Name (#) In Fiscal Year ($/Share) of Grant Date
<S> <C> <C> <C> <C> <C>
Richard T. Sperberg 250,000 15.5 $0.3251 $0.2956 3/13/02
4,000 (1) * $0.2956 $0.2956 2/15/99
38,100 (1) 2.36 $0.2956 $0.2956 1/13/98
64,616 (1) 4.0 $0.2956 $0.2956 5/22/06
William M. Gary III 25,000 1.55 $0.3251 $0.2956 3/13/02
3,000 (1) * $0.2956 $0.2956 2/15/99
500 (1) * $0.2956 $0.2956 12/18/97
35,700 (1) 2.21 $0.2956 $0.2956 1/13/98
14,670 (1) * $0.2956 $0.2956 5/22/06
Frank J. Mazanec 250,000 15.5 $0.2956 $0.2956 3/13/07
4,000 (1) * $0.2956 $0.2956 2/15/99
500 (1) * $0.2956 $0.2956 12/18/97
8,800 (1) 2.22 $0.2956 $0.2956 1/13/98
18,352 (1) 1.14 $0.2956 $0.2956 5/22/06
Keith G. Davidson 100,000 6.2 $0.2956 $0.2956 3/13/07
19,118 (1) 1.19 $0.2956 $0.2956 5/22/06
William G. Gang 25,000 1.55 $0.2956 $0.2956 3/13/07
10,251 (1) * $0.2956 $0.2956 5/22/06
</TABLE>
(1) Represents options repriced on March 13, 1997.
* Less than one percent (1%).
Aggregated Option/SARs Exercises in Last Fiscal Year and
FISCAL YEAREND OPTION/SARS VALUES
<TABLE>
<CAPTION>
Number of Value of
Securities Unexercised
Shares Underlying In-the-Money
Acquired Unexercised Options
On Value Options/SARs at FY at FY End
Exercise Realized End (#) Exercisable/
Name (#) ($) Exercisable/ Unexercisable
Unexercisable
<S> <C> <C> <C> <C>
Richard T. Sperberg -0- -0- 417,305/250,000 $ -0-/-0-
William M. Gary III -0- -0- 184,561/25,000 $ -0-/-0-
Frank J. Mazanec -0- -0- 156,204/250,000 $ -0-/-0-
Keith G. Davidson -0- -0- 137,597/100,000 $ -0-/-0-
William G. Gang 5,528 -0- 33,584/48,333 $ -0-/-0-
</TABLE>
Ten Year Option/SAR Repricings
<TABLE>
<CAPTION>
Number of Market Price Length of
Securities of Stock at Exercise Original Option
Underlying Time of Price at Time Term Remaining
Options/SARs Repricing or of Repricing New Exercise at Date of
Repriced or Amendment ($) or Price Repricing or
Amended Amendment ($) Amendment
Name Date (#) ($)
<S> <C> <C> <C> <C> <C> <C>
Richard T. Sperberg 8/9/95 150,000 $0.25 $3.75 $0.28 8 yr. 6 mon.
3/13/97 38,100 $0.2956 $5.3125 $0.2956 10 mon.
3/13/97 4,000 $0.2956 $5.6275 $0.2956 2 yr. 11 mon.
3/13/97 64,616 $0.2956 $1.9375 $0.2956 9 yr. 2 mon.
William M. Gary 8/9/95 100,000 $0.25 $3.75 $0.28 8 yr. 6 mon.
3/13/97 34,500 $0.2956 $5.3125 $0.2956 10 mon.
3/13/97 500 $0.2956 $6.10 $0.2956 9 mon.
3/13/97 3,000 $0.2956 $5.6375 $0.2956 2 yr. 11 mon.
3/13/97 14,670 $0.2956 $1.9375 $0.2956 9 yr. 2 mon.
Frank J. Mazanec 8/9/95 70,000 $0.25 $3.75 $0.25 8 yr. 6 mon.
3/13/97 8,800 $0.2956 $5.3125 $0.2956 10 mon.
3/13/97 500 $0.2956 $6.10 $0.2956 9 mon.
3/13/97 4,000 $0.2956 $5.6275 $0.2956 2 yr. 11 mon.
3/13/97 18,352 $0.2956 $1.9375 $0.2956 9 yr. 2 mon.
Keith G. Davidson 8/9/95 70,000 $0.25 $3.75 $0.25 8 yr. 6 mon.
3/13/97 19,118 $0.2956 $1.9375 $0.2956 9 yr. 2 mon.
William G. Gang 8/9/95 50,000 $0.25 $0.75 $0.25 9 yr. 5 mon.
3/13/97 10,251 $0.2956 $1.9375 $0.2956 9 yr. 2 mon.
</TABLE>
Report of the Board of Directors and the Compensation Committee
on the Repricing of Options
As discussed above, the purpose of Onsite's 1993 Stock Option Plan is to
attract and retain the best personnel to Onsite and to give option
recipients a greater personal stake in the success of the business. With
the exercise prices on a number of options held by executive officers at
several times the then current market price for Onsite's Class A Common
Stock, the Board of Directors and the Compensation Committee believed the
purpose of the Plan was not adequately being served. Thus, as an
additional incentive to both executive officers and all employees of
Onsite, the Board of Directors and the Compensation Committee approved two
separate repricings of outstanding options, one in August 1995 and one in
March 1997. On August 9, 1995, all outstanding options (held by executive
officers and employees) that had been granted between (or were effective as
of) February 15, 1994, and the date of the repricing were repriced to the
then current market price of Onsite's Class A Common Stock of $0.25 per
share. On March 13, 1997, all outstanding options (held by executive
officers and employees) with exercise prices of greater than $0.50 were
repriced to the then current market price of $0.2956.
Compensation Committee and the Board of Directors:
/S/ CHARLES C. MCGETTIGAN /S/ RICHARD T. SPERBERG
/S/ H. TATE HOLT /S/ WILLIAM M. GARY III
/S/ TIMOTHY G. CLARK
EMPLOYMENT AGREEMENTS WITH EXECUTIVE OFFICERS
Prior to February 1997, Onsite had employment agreements with the following
executive officers: Mr. Sperberg, to serve as President and Chief Executive
Officer; Mr. Gary, to serve as Executive Vice President, Chief Operating
Officer and Secretary; and Messrs. Esquer, Mazanec and Davidson, to serve
as Vice Presidents. By their terms, the various employment agreements
automatically renewed for one (1) year terms unless terminated within
ninety (90) days of the applicable renewal date, that is, February 15 of
each year. In November 1996, Onsite notified the above executive officers
that the subject employment agreements would not be renewed, and thus would
be terminated effective as of February 15, 1997. The terminations were
made for administrative purposes and should not be interpreted as a
reflection of the performance by the above executive officers.
ONSITE STOCK OPTION AND COMPENSATION PLANS
ONSITE 1993 STOCK OPTION PLAN
Onsite's 1993 Stock Option Plan (the "Plan") was approved by the
stockholders in February 1994, and is administered by the Compensation
Committee. At the 1996 annual meeting, stockholders approved an amendment
to the Plan increasing the number of shares subject to the Plan by an
additional seven hundred fifty thousand (750,000) shares. Under the Plan,
as amended, a total of two million nine hundred fifty thousand (2,950,000)
shares of Class A Common Stock may be issued, of which two million three
hundred fifty-eight thousand three hundred eight (2,358,308) shares were
subject to options as of October 16, 1997. The Plan is a "dual plan" that
provides for the grant of both Incentive and Nonqualified Stock Options.
The majority of options granted to date have been Incentive Stock Options.
Subject to stockholder approval which will be sought at the 1997 Annual
Meeting of Stockholders, the Compensation Committee and the Board of
Directors have approved amendments to the Plan (i) to increase the number
of shares subject to the Plan by an additional three hundred fifty thousand
(350,000) shares; and (ii) to authorize the Board of Directors to amend the
Plan as necessary to comply with applicable federal and state securities
law, rules and regulations, and to make discretionary grants of options to
non-employee directors of Onsite.
The purpose of the Plan is to attract and retain the best personnel to
Onsite and to give option recipients a greater personal stake in the
success of the business. All employees, consultants, officers and
directors of Onsite and any subsidiary are eligible for grants of options
under the Plan. However, directors serving on the Compensation Committee
as disinterested persons currently are not eligible for grants of options
except for the non-discretionary options described in the Plan. The
amendments to the Plan would increase the number of shares of Class A
Common Stock subject to the Plan, and therefore available for grant to
eligible individuals, and would allow non-employee directors, including the
directors serving on the Compensation Committee as disinterested persons,
to be eligible for discretionary grants of options under the Plan.
At a regular meeting of the Board of Directors held on April 23, 1997, the
Board of Directors approved the grant, subject to stockholder approval, to
each of the non-employee directors (Messrs. McGettigan, Holt and Clark) of
options to purchase an additional twenty-five thousand (25,000) shares of
Class A Common Stock of Onsite. The exercise price is the fair market
value of Onsite Class A Common Stock on the date of the grant, and the term
is five (5) years. The Plan currently provides for non-discretionary, or
automatic, grants to each non-employee director of options to purchase
twenty-five thousand (25,000) shares of Onsite Class A Common Stock on the
date he or she becomes a director of Onsite, and on the anniversary of such
date thereafter. Non-employee directors receive no other compensation for
serving as directors of Onsite. Hence, in light of the compensation (amount
and form) typically paid by other public companies to their non-employee
directors, this additional grant was intended by the Board of Directors to
serve as an immediate incentive to the non-employee directors to continue
their service as directors of Onsite. The approval of the above amendments
will constitute approval of these discretionary grants to Messrs.
McGettigan, Holt and Clark, the non-employee directors of Onsite.
Additionally, currently no amendments may be made to the Plan to increase
the limit on the maximum number of shares underlying the options to be
granted (except for adjustments resulting from stock splits and similar
events), to modify the eligibility requirements, or to increase materially
the benefits accruing to participants under the Plan without stockholder
approval. The Plan currently can be amended by the Board of Directors
without stockholder approval in substantially all other aspects. The
amendment to the Plan would allow the Board of Directors to amend the Plan
as necessary to comply with applicable federal and state securities laws,
rules and regulations even if such amendment otherwise would require
stockholder approval because the amendment modifies the eligibility
requirements or increases materially the benefits accruing to Plan
participants. Any amendment to the Plan that increases the number of shares
of stock available for issuance under the Plan nevertheless would continue
to require stockholder approval. This amendment would allow the Board of
Directors and Compensation Committee to continue to administer the Plan in
the usual course of business, amending the Plan as necessary to ensure
continued compliance with applicable law.
Except for non-discretionary grants of options, currently the Compensation
Committee determines the recipients of options and the terms of options
granted, including the exercise price, number of shares subject to the
options and the conditions to exercise thereof, and the terms of any direct
sales of shares underlying options. The exercise price for all options
currently is to be determined by the Compensation Committee, except for
non-discretionary options, and except in the case of an Incentive Stock
Option to an employee who owns more than ten percent (10%) of all classes
of the Onsite voting stock combined, in which case the exercise price will
be one hundred ten percent (110%) of fair market value. (The amendment to
the Plan would allow the Board of Directors to make discretionary grants of
options to non-employee directors of Onsite, and allow the Board to
determine the exercise price for such grants.) In no case will the
exercise period exceed ten (10) years, and, in the case of an Incentive
Stock Option for an employee who owns more than ten percent (10%) of all
classes of Onsite's voting stock combined, the exercise period shall not
exceed five (5) years.
Currently the Plan can be terminated at any time by the Board of Directors.
If the Plan is terminated, options previously granted nevertheless shall
continue in accordance with the provisions of the Plan without materially
affecting the recipients' rights under such options.
ASSUMPTION OF THE OUTSTANDING OPTIONS OF WESTERN
WESTERN STOCK OPTION PLANS. Western previously maintained the following
stock option plans for Western officers, directors, consultants and
employees: the 1990 Amended Non-Statutory Stock Option Plan, and the 1991
Amended Non-Statutory Stock Option Plan (collectively, the "Western
Plans"). Options covering an aggregate of five hundred twenty-six thousand
nine hundred seventy-three (526,973) shares of Western Common Stock at
exercise prices varying from eighty-eight cents ($0.88) to Nine and 63/100
Dollars ($9.63) per share were outstanding under the Western Plans as of
February 15, 1994. Pursuant to the reorganization with Onsite-Cal and
Western (the "Reorganization"), Onsite assumed each unexpired and
unexercised option under the Western Plans, subject to adjustment as to the
number of shares of Onsite Class A Common Stock and the exercise price in
order to reflect the Reorganization exchange ratio (one (1) share of Onsite
Class A Common Stock for five (5) shares of Western Common Stock and five
(5) times the original exercise price).
WESTERN NON-PLAN OPTIONS. Western also had granted options outside of the
Western Plans (the "Western Non-Plan Options") covering an aggregate of
five hundred fifty-two thousand five hundred (552,500) shares of Western
Common Stock at exercise prices varying from One and 6.25/100 Dollars
($1.0625) to One and 22/100 Dollars ($1.22) per share of Western Common
Stock, which were outstanding as of December 29, 1993. Pursuant to the
Reorganization, Onsite assumed each of the unexpired and unexercised
Western Non-Plan Options, subject to adjustment as to the number of shares
of Onsite Class A Common Stock and the exercise price in order to reflect
the Reorganization exchange ratio (one (1) share of Onsite Class A Common
Stock for five (5) shares of Western Common Stock and five (5) times the
original exercise price).
REGISTRATION. Onsite has filed a Registration Statement on Form S-8 under
the Securities Act of 1933, as amended, covering the shares of Onsite Class
A Common Stock available under the Plan. The Registration Statement on
Form S-4 dated January 11, 1994, covers the shares of Onsite Class A Common
Stock issuable upon the exercise of Onsite options created by the
assumption by Onsite of the Western Non-Plan Options. No new options will
be granted under the Western Plans.
ONSITE 401(K) PLAN. Since 1990, through its predecessors, Onsite has
implemented a 401(k) plan. The Onsite 401(k) plan provides for broad based
employee participation and all Onsite employees are eligible to enroll
after meeting certain criteria such as the length of employment, hours
worked and age. In October 1994, the Board approved an amendment to the
Onsite 401(k) plan to provide for a matching contribution of seventy-five
percent (75%) of the employees' contribution (up to six percent (6%) of
salary, subject to customary limitations on contributions by highly
compensated individuals) in the form of Onsite Class A Common Stock.
The shares contributed by Onsite are subject to certain vesting periods.
Certain officers and directors who cease participation in the Onsite 401(k)
plan may not participate for at least six (6) months. Further, except in
limited distributions such as termination of employment, retirement,
disability or death, any Onsite Class A Common Stock distributed to any
officer or director from the Onsite 401(k) plan must be held by the
participant for six (6) months prior to sale. At the end of Onsite's
fiscal year, one hundred twenty-two thousand eight hundred ten (122,810)
shares of Onsite Class A Common Stock were earned by all participants of
the Onsite 401(k) plan, of which eighty-two thousand five hundred seventy-
two (82,572) shares in the aggregate (sixty-two thousand seven hundred
thirty-seven (66,737) shares vested) have been earned by Messrs. Sperberg,
Gary, Mazanec, Davidson and Gang.
ITEM 11. VOTING SECURITIES AND PRINCIPAL STOCKHOLDERS THEREOF
The following table sets forth certain information with respect to the
ownership of Onsite's Class A Common Stock, including Class A Common Stock
issuable upon exercise of Options or Warrants exercisable within sixty (60)
days, by (i) those persons known by Onsite to be the beneficial owners of
more than five percent (5%) of the total number of outstanding shares of
any class entitled to vote; (ii) each director and highly compensated
officer; and (iii) all directors and officers of Onsite as a group. Except
as indicated in the footnotes to the table, the persons named in the table
have sole voting and investment power with respect to all shares of Onsite
Class A Common Stock shown as beneficially owned by them, subject to
community property laws where applicable. The ownership figures in the
table are based on the books and records of Onsite.
Class A Common Stock
Name and Address Amount of Percent of Class
of Beneficial Owner Ownership
Timothy G. Clark 125,000 (1) 1.13
701 Palomar Airport Road, Suite 200
Carlsbad, CA 92009
Keith G. Davidson 204,961 (2) 1.84
701 Palomar Airport Road, Suite 200
Carlsbad, CA 92009
Hector A. Esquer 600,957 (3) 5.41
701 Palomar Airport Road, Suite 200
Carlsbad, CA 92009
William M. Gang 40,145 (4) *
701 Palomar Airport Road, Suite 200
Carlsbad, CA 92009
William M. Gary III 2,378,873 (5) 21.54
701 Palomar Airport Road, Suite 200
Carlsbad, CA 92009
Gruber & McBaine Capital Mgmt. 3,168,677 (6) 28.05
50 Osgood Place
San Francisco, CA 94133
Jon D. Gruber 3,272,177 (7) 28.97
50 Osgood Place
San Francisco, CA 94133
H. Tate Holt 298,082 (8) 2.7
240 Wilson Way
Larkspur, CA 94939
Lagunitas Partners, L.P.
50 Osgood Place 852,447 (9) 7.77
San Francisco, CA 94133
Frank J. Mazanec 661,884 (10) 5.91
701 Palomar Airport Road, Suite 200
Carlsbad, CA 92009
J. Patterson McBaine 3,275,077 (11) 28.99
50 Osgood Place
San Francisco, CA 94133
Charles C. McGettigan 2,150,457 (12) 18.84
50 Osgood Place
San Francisco, CA 94133
Proactive Investment Managers, L.P. 1,979,066 (13) 17.57
50 Osgood Place
San Francisco, CA 94133
Proactive Partners, L.P. 1,889,422 (14) 16.82
50 Osgood Place
San Francisco, CA 94133
Hugh E. Schall 33,334 (15) *
701 Palomar Airport Road, Suite 200
Carlsbad, CA 92009
Richard T. Sperberg 3,097,605 (16) 26.10
701 Palomar Airport Road, Suite 200
Carlsbad, CA 92009
Myron A. Wick III 1,979,066 (17) 17.57
50 Osgood Place
San Francisco, CA 94133
All Directors and Officers as a Group 9,551,171 (18) 70.74
(10 persons)
(1) Includes Options to purchase 50,000, 25,000, 25,000 and 25,000 shares
of Class A Common Stock exercisable until January 25, 2001, October 3,
2001, April 23, 2002, and October 3, 2002, respectively.
(2) In addition to 3,430 shares of Class A Common Stock over which Mr.
Davidson has sole voting and investment power, the table reflects 170,931
shares of Class A Common Stock that may be immediately acquired upon the
exercise of Options expiring August 9, 2005 (70,000 shares), November 20,
2005 (37,072 shares), January 25, 2006 (11,407 shares), May 22, 2006
(19,118 shares), and March 13, 2007 (33,334 shares). Additionally, the
table reflects 30,600 shares held by Mr. Davidson's children.
(3) In addition to 67,020 shares of Class A Common Stock over which Mr.
Esquer has sole voting and investment power, the table reflects 133,342
shares of Class A Common Stock that may be immediately acquired upon the
exercise of Options expiring December 18, 1997 (500 shares), January 13,
1998 (11,100 shares), February 15, 1999 (3,000 shares), August 9, 2005
(50,000 shares), November 20, 2005 (5,528 shares), January 25, 2006 (33,439
shares), May 22, 2006 (13,108 shares), and March 13, 2007 (16,667 shares),
and 2,865 shares of Class A Common Stock that may be immediately acquired
upon the exercise of Warrants expiring November 30, 1997, December 18,
1997, January 15, 1998, and June 30, 1999.
The table also reflects the following securities that all are subject
to an Agreement of Stock Purchase and Sale: 379,757 shares of Class A
Common Stock, and 17,973 shares of Class A Common Stock that may be
immediately acquired upon the exercise of Warrants expiring November 30,
1997, December 18, 1997, January 15, 1998, and June 30, 1999. As previously
disclosed, Messrs. Sperberg, Gary and Esquer have entered into such
Agreement whereby they have sold, subject to payment and vesting schedules,
shares of Onsite-Cal to Messrs. Esquer and Mazanec. Until a share is paid
for all voting and dispositive rights remain with the seller. Upon vesting
and payment, each such purchaser of the Onsite-Cal shares became entitled
to the same number of Onsite Class A Common Stock received by the sellers,
pursuant to the reorganization of Onsite-Cal and Western (the
"Reorganization"), with respect to the shares sold. The table reflects all
adjustments for shares that have vested and been paid for in full.
(4) Includes 40,145 shares of Class A Common Stock over which Mr. Gang has
sole voting and investment power. As previously reported, Mr. Gang
resigned as Vice President of Onsite in July 1997.
(5) In addition to 1,725,912 shares of Class A Common Stock over which Mr.
Gary has sole voting and investment power, the table also reflects 192,895
shares of Class A Common Stock that may be immediately acquired upon the
exercise of Options expiring December 18, 1997 (500 shares), January 13,
1998 (35,700 shares), February 15, 1999 (3,000 shares), August 9, 2005
(100,000 shares), November 20, 2005 (13,608 shares), January 25, 2006
(17,083 shares), May 22, 2006 (14,670 shares), and March 13, 2002 (8,334
shares), and 82,234 shares of Class A Common Stock that may be immediately
acquired upon the exercise of Warrants expiring November 30, 1997, December
18, 1997, January 15, 1998, April 16, 1998, May 31, 1998, and June 30,
1999. This total does not include shares of Class A Common Stock
underlying a warrant issued to Mr. Gary in connection with a loan to
Onsite. The table also reflects 142,856 shares held by Mr. Gary's children.
Additionally the table reflects the following securities that all are
subject to an Agreement of Stock Purchase and Sale: 360,525 shares of
Class A Common Stock, and 17,307 shares of Class A Common Stock that may be
acquired upon the exercise of Warrants expiring November 30, 1997, December
18, 1997, January 15, 1998, and June 30, 1999. As previously disclosed,
Messrs. Sperberg, Gary and Esquer have entered into such Agreement whereby
they have sold, subject to payment and vesting schedules, shares of Onsite-
Cal to Messrs. Esquer and Mazanec. Until a share is paid for all voting and
dispositive rights remain with the seller. Upon vesting and payment, each
such purchaser of the Onsite-Cal shares became entitled to the same number
of Onsite Class A Common Stock received by the sellers, pursuant to the
Reorganization, with respect to the shares sold. The table reflects all
adjustments for shares that have vested and been paid for in full.
(6) Gruber & McBaine Capital Management, a California corporation ("Gruber
& McBaine"), is a general partner of Lagunitas Partners, L.P., and
Proactive Investment Managers, L.P. Consequently, in addition to the
16,400 shares of Class A Common Stock over which Gruber & McBaine has sole
voting and investment power, Gruber & McBaine has or shares voting or
dispositive power over 2,800,248 shares of Class A Common Stock and 352,029
shares of Class A Common Stock that may be immediately acquired upon the
exercise of Warrants expiring September 27, 1998, December 17, 1998, April
8, 1998, May 23, 1998, March 1, 1999, June 30, 1999, and September 11,
2002.
(7) Mr. Gruber is a general partner of Gruber & McBaine Capital
Management, which is a general partner of Lagunitas Partners, L.P., and
Proactive Investment Managers, L.P. Consequently, in addition to 103,500
shares of Class A Common Stock over which Mr. Gruber has sole voting and
investment power, Mr. Gruber also has or shares voting or dispositive power
over 2,816,648 shares of Class A Common Stock and 352,029 shares of Class A
Common Stock that may be immediately acquired upon the exercise of Warrants
expiring September 27, 1998, December 17, 1998, April 8, 1998, May 23,
1998, March 1, 1999, June 30, 1999, and September 11, 2002.
(8) In addition to 143,082 shares of Class A Common Stock over which Mr.
Holt, as President of Holt & Associates, has sole voting and investment
power, the table also reflects 125,000 shares of Class A Common Stock that
may be immediately acquired upon the exercise of Options expiring January
25, 2001 (50,000 shares), May 4, 2001 (25,000 shares), April 23, 2002
(25,000 shares), and May 4, 2002 (25,000 shares). Additionally the table
reflects 30,000 shares held by Mr. Holt's children.
(9) In addition to 820,477 shares of Class A Common Stock over which
Lagunitas Partners, L.P. ("Lagunitas"), has sole voting and investment
power, Lagunitas has or shares dispositive power over 31,970 shares of
Class A Common Stock that may be immediately acquired upon the exercise of
Warrants expiring September 27, 1998, and June 30, 1999.
(10) In addition to 47,932 shares of Class A Common Stock over which Mr.
Mazanec has sole voting and investment power, the table also reflects
239,538 shares of Class A Common Stock that may be immediately acquired
upon the exercise of Options expiring December 18, 1997 (500 shares),
January 13, 1998 (8,800 shares), February 15, 1999 (4,000 shares), August
9, 2005 (70,000 shares), November 20, 2005 (7,736 shares), January 25, 2006
(46,816 shares), May 22, 2006 (18,352 shares), and March 13, 2007 (83,334
shares), and 3,562 shares of Class A Common Stock that may be immediately
acquired upon the exercise of Warrants expiring November 30, 1997, December
18, 1997, January 15, 1998, and June 30, 1999.
The table also reflects the following securities that all are subject
to an Agreement of Stock Purchase and Sale: 353,870 shares of Class A
Common Stock, and 16,982 shares of Class A Common Stock that may be
immediately acquired upon the exercise of Warrants expiring November 30,
1997, December 18, 1997, January 15, 1998, and June 30, 1999. As previously
disclosed, Messrs. Sperberg, Gary and Esquer have entered into such
Agreement whereby they have sold, subject to payment and vesting schedules,
shares of Onsite-Cal to Messrs. Esquer and Mazanec. Until a share is paid
for all voting and dispositive rights remain with the seller. Upon vesting
and payment, each such purchaser of the Onsite-Cal shares became entitled
to the same number of Onsite Class A Common Stock received by the sellers,
pursuant to the Reorganization, with respect to the shares sold. The table
reflects all adjustments for shares that have vested and been paid for in
full.
(11) Mr. McBaine is a general partner of Lagunitas Partners, L.P., and
Proactive Investment Managers, L.P. Consequently, in addition to the
106,400 shares of Class A Common Stock over which he has sole voting and
investment power, Mr. McBaine has or shares voting or dispositive power
over 2,816,648 shares of Class A Common Stock and 352,029 shares of Class A
Common Stock that may be immediately acquired upon the exercise of Warrants
expiring September 27, 1998, December 17, 1998, April 8, 1998, May 23,
1998, March 1, 1999, June 30, 1999, and September 11, 2002.
(12) Includes Options to purchase 75,000, 25,000, 25,000 and 25,000 shares
of Class A Common Stock exercisable until January 25, 2001, July 13, 2001,
April 23, 2002, and July 13, 2002, respectively. In addition to 21,391
shares of Class A Common Stock in which Mr. McGettigan has sole voting and
investment power, Mr. McGettigan is a general partner of Proactive
Investment Managers, L.P., and consequently has or shares voting or
dispositive power over 1,659,007 shares of Class A Common Stock, and
320,059 shares of Class A Common Stock that may be immediately acquired
upon the exercise of Warrants expiring September 27, 1998, December 17,
1998, April 8, 1998, May 23, 1998, March 1, 1999, June 30, 1999, and
September 11, 2002.
(13) Proactive Investment Managers, L.P., is a general partner of Proactive
Partners, L.P., and Fremont Proactive Partners, L.P., and consequently has
or shares voting or dispositive power over 1,659,007 shares of Class A
Common Stock and 320,059 shares of Class A Common Stock that may be
immediately acquired upon the exercise of Warrants expiring September 27,
1998, December 17, 1998, April 8, 1998, May 23, 1998, March 1, 1999, June
30, 1999, and September 11, 2002.
(14) In addition to 1,599,172 shares of Class A Common Stock over which
Proactive Partners, L.P. has sole voting and investment power, the table
reflects 290,250 shares of Class A Common Stock that may be immediately
acquired upon the exercise of Warrants expiring September 27, 1998,
December 17, 1998, April 8, 1998, May 23, 1998, March 1, 1999, June 30,
1999, and September 11, 2002.
(15) Includes 33,334 shares of Class A Common Stock that may be immediately
acquired upon the exercise of Options expiring November 6, 2006 (16,667
shares), and March 13, 2007 (16,667 shares).
(16) In addition to 1,810,912 shares of Class A Common Stock over which Mr.
Sperberg has sole voting and investment power, the table also reflects
500,639 shares of Class A Common Stock that may be immediately acquired
upon the exercise of Options expiring January 13, 1998 (38,100 shares),
February 15, 1999 (4,000 shares), August 9, 2005 (150,000 shares), November
20, 2005 (52,808 shares), January 25, 2006 (107,781 shares), May 22, 2006
(64,616 shares), and March 13, 2002 (83,334 shares), and 408,222 shares of
Class A Common Stock that may be immediately acquired upon the exercise of
Warrants expiring November 30, 1997, December 18, 1997, January 15, 1998,
April 16, 1998, May 31, 1998, June 30, 1999, and September 11, 2002. This
total does not include shares of Class A Common Stock underlying a warrant
issued to Mr. Sperberg in connection with a loan to Onsite. Additionally
the table reflects 36,000 shares held by Mr. Sperberg's son.
The table also reflects the following securities that all are subject
to an Agreement of Stock Purchase and Sale: 360,525 shares of Class A
Common Stock and 17,307 shares of Class A Common Stock that may be
immediately acquired upon the exercise of Warrants expiring November 30,
1997, December 18, 1997, January 15, 1998, and June 30, 1999. As previously
disclosed, Messrs. Sperberg, Gary and Esquer have entered into such
Agreement whereby they have sold, subject to payment and vesting schedules,
shares of Onsite-Cal to Messrs. Esquer and Mazanec. Until a share is paid
for all voting and dispositive rights remain with the seller. Upon vesting
and payment, each such purchaser of the Onsite-Cal shares became entitled
to the same number of Onsite Class A Common Stock received by the sellers,
pursuant to the Reorganization, with respect to the shares sold. The table
reflects all adjustments for shares that have vested and been paid for in
full.
(17) Mr. Wick is a general partner of Proactive Investment Managers, L.P.,
and consequently has or shares voting or dispositive power over these
shares including 1,659,007 shares of Class A Common Stock and 320,059
shares of Class A Common Stock that may be immediately acquired upon the
exercise of Warrants expiring September 27, 1998, December 17, 1998, April
8, 1998, May 23, 1998, March 1, 1999, June 30, 1999, and September 11,
2002.
(18) Includes the aggregate of ownership of Messrs. Clark, Davidson,
Esquer, Gang, Gary, Holt, Mazanec, McGettigan, Schall and Sperberg as set
forth in footnotes (1), (2), (3), (4), (5), (8), (10), (12), (15) and (16).
* Less than one percent (1%).
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Grant of Warrants
In January 1997, Onsite executed an energy services agreement (the "ESA")
with a customer to perform an energy analysis and audit on the customer's
facilities. A condition of the ESA was that Onsite procure and maintain a
payment and performance bond for one hundred percent (100%) of the
construction cost set forth in the ESA.
In accordance with the terms and conditions of the ESA, Onsite procured the
requisite bonds. In order to obtain the bonds, however, Onsite was
required to post an irrevocable letter of credit in the amount of One
Hundred Fifty Thousand Dollars ($150,000) in favor of the surety company,
and Mr. Sperberg was required to execute personal guarantees and indemnity
agreements. The collateral for the letter of credit consists of a deposit
of funds posted by Proactive Partners, L.P. ("Proactive"), a shareholder of
Onsite. Mr. McGettigan, the Chairman of the Board of Directors of Onsite,
is a general partner of Proactive, and Mr. Sperberg is the President, Chief
Executive Officer and Chief Financial Officer of Onsite.
In exchange, and as consideration, for the agreement by Proactive to post
the necessary collateral for the letter of credit, and by Mr. Sperberg to
execute the necessary guarantees and indemnity agreements, Onsite agreed
(i) to indemnify each of Proactive and Mr. Sperberg in the event Onsite
defaults under the ESA and/or the bonds, and as a result of such default,
the surety company seeks to draw on the letter of credit and/or enforce the
personal guarantee and indemnity agreement of Mr. Sperberg, which
indemnities are to be secured by the assets of Onsite; and (ii) to issue
warrants to each of Proactive and Mr. Sperberg to acquire shares of Class A
Common Stock of Onsite. Onsite agreed to issue warrants to Proactive
representing the right to acquire two hundred thousand (200,000) shares of
Class A Common Stock of Onsite at the exercise price of $0.1875 per share,
which was the current price of Onsite's Class A Common Stock on the OTC
Electronic Bulletin Board at the time of the meeting of the Board of
Directors of Onsite held on September 11, 1997, at which meeting this
transaction was approved. The number of shares that are the subject of the
Proactive warrants represent twenty-five percent (25%) of the amount of the
collateral posted by Proactive. Similarly, Onsite agreed to issue warrants
to Mr. Sperberg representing the right to acquire three hundred twenty-five
thousand nine hundred eighty-eight (325,988) shares of Onsite's Class A
Common Stock at the exercise price of $0.1875 per share, which represents
six percent (6%) of the aggregate amount of the bonds.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, Onsite has duly caused this Form 10-KSB
to be signed on its behalf by the undersigned, thereunto duly authorized.
ONSITE ENERGY CORPORATION
Date: October 28, 1997 By: RICHARD T. SPERBERG
Richard T. Sperberg, President
