ONSITE ENERGY CORP, PRE 14A, 2000-11-15

ONSITE ENERGY CORP
PRE 14A, 2000-11-15
ENGINEERING SERVICES

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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. __)

Filed by the Registrant |X|
Filed by a party other than the Registrant |_|

Check the appropriate box:
|X| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
|_| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to |_|ss.240.14a-11(c)
or |_|ss.240.14a-12

ONSITE ENERGY CORPORATION
----------------------------------------------
(Name of Registrant as Specified In Its Charter)

------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

|X| No fee required
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11

1) Title of each class of securities to which transaction applies:

2) Aggregate number of securities to which transaction applies:

3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):

4) Proposed maximum aggregate value of transaction:

5) Total fee paid:

|_| Fee paid previously with preliminary materials.

|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:

<PAGE>ii

To the Stockholders of Onsite Energy Corporation:

On behalf of Onsite Energy Corporation, a Delaware corporation ("Onsite"), I
would like to invite you to attend the 2000 Annual Meeting of the Stockholders
of Onsite. The meeting will be held on Thursday, January 11, 2001, at 8:00 a.m.
(Pacific Standard Time) at the Grand Pacific Palisades Resort, 5805 Armada
Drive, Carlsbad, CA 92008.

The accompanying Notice of the Annual Meeting of the Stockholders and Proxy
Statement set forth the matters to be considered and acted upon at the meeting.
The Proxy Statement contains important information concerning the election of
directors, the approval of an amendment to Onsite's 1993 Stock Option Plan to
increase the number of shares available for grant under the Plan and increase
the term of options granted to outside directors, and the approval of an
amendment to Onsite's certificate of incorporation increasing the number of
shares available for issuance by Onsite. The Board strongly recommends your
approval of these proposals. Additional information about these proposals is
included in the accompanying materials, and I urge you to read the same
carefully, and to give all of these matters your close attention.

I hope that you will be able to attend the meeting. If you cannot attend the
meeting, however, it is important that your shares be represented. Accordingly,
I urge you to mark, sign, date and return the enclosed proxy promptly. You may,
of course, withdraw your proxy if you attend the meeting and choose to vote in
person.

Thank you for your continued commitment to Onsite.

Very truly yours,

ONSITE ENERGY CORPORATION

Richard T. Sperberg
President and Chief Executive Officer

December 4, 2000

<PAGE>iii

ONSITE ENERGY CORPORATION
701 Palomar Airport Road, Suite 200
Carlsbad, CA 92009
760/931-2400

NOTICE OF THE 2000 ANNUAL MEETING OF STOCKHOLDERS
To Be Held On January 11, 2001

NOTICE IS HEREBY GIVEN that the 2000 Annual Meeting of the Stockholders of
Onsite Energy Corporation, a Delaware corporation ("Onsite"), will be held on
Thursday, January 11, 2001, at 8:00 a.m. (Pacific Standard Time). The meeting
will be held at the Grand Pacific Palisades Resort, 5805 Armada Drive, Carlsbad,
CA 92008, for the following purposes, all of which are more completely discussed
in the accompanying Proxy Statement:

1. To elect two directors of Onsite to hold office until the 2001 Annual
Meeting of Stockholders, and to elect two directors of Onsite to hold
office until the 2002 Annual Meeting of Stockholders, and until their
successors are elected and qualified;

2. To approve an amendment to Onsite's 1993 Stock Option Plan (i) to increase
the number of shares available for grant under the Plan; and (ii) to
increase the term of non-discretionary options granted to non-employee
directors;

3. To approve an amendment to Onsite's Certificate of Incorporation to
increase the authorized number of shares available for issuance by Onsite;
and

4. To transact such other business as may properly come before the meeting or
any adjournments thereof.

Only stockholders of record of Class A Common Stock, Series C Convertible
Preferred Stock and Series E Convertible Preferred Stock at the close of
business on November 27, 2000, are entitled to notice of and to vote on the
above proposals at the 2000 Annual Meeting of the Stockholders.

By Order of the Board of Directors

ONSITE ENERGY CORPORATION

Audrey Nelson Stubenberg
Secretary

December 4, 2000

YOU ARE CORDIALLY INVITED TO ATTEND ONSITE'S 2000 ANNUAL MEETING OF
STOCKHOLDERS. IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED REGARDLESS OF THE
NUMBER YOU OWN. EVEN IF YOU PLAN TO BE PRESENT AT THE ANNUAL MEETING, YOU ARE
URGED TO COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE
ENVELOPE PROVIDED. IF YOU ATTEND THE MEETING, YOU MAY VOTE EITHER IN PERSON OR
BY PROXY. ANY PROXY GIVEN MAY BE REVOKED BY YOU IN WRITING OR IN PERSON AT ANY
TIME PRIOR TO THE EXERCISE THEREOF.

<PAGE>1

PROXY STATEMENT
of
ONSITE ENERGY CORPORATION
701 Palomar Airport Road, Suite 200
Carlsbad, CA 92009
760/931-2400

Information Concerning the Solicitation

This Proxy Statement is furnished to the stockholders of Onsite Energy
Corporation, a Delaware corporation ("Onsite"), in connection with the
solicitation of proxies on behalf of Onsite's Board of Directors for use at
Onsite's 2000 Annual Meeting of the Stockholders (the "Meeting"), including any
adjournments thereof. The Meeting will be held on Thursday, January 11, 2001, at
8:00 a.m. (Pacific Standard Time), at the Grand Pacific Palisades Resort, 5805
Armada Drive, Carlsbad, CA 92008. Only stockholders of record on November 27,
2000, are entitled to notice of and to vote at the Meeting.

The proxy solicited hereby (if properly signed and returned to Onsite, and not
revoked prior to its use) will be voted at the Meeting in accordance with its
instructions. Absent any contrary instructions, each proxy received will be
voted "FOR" the nominees for the Board of Directors, "FOR" the proposed
amendment to Onsite's 1993 Stock Option Plan, and "FOR" the proposed amendment
to Onsite's Certificate of Incorporation. Additionally, each proxy received will
be voted (at the proxy holders' discretion) on such other matters, if any, that
may properly come before the Meeting (including any proposal to adjourn the
Meeting).

Any stockholder giving a proxy may revoke it at any time before it is exercised.
To revoke a proxy, a stockholder must either (i) file with Onsite written notice
of its revocation (addressed to the Secretary, Onsite Energy Corporation, 701
Palomar Airport Road, Suite 200, Carlsbad, CA 92009); (ii) submit a duly
executed proxy bearing a later date; or (iii) appear in person at the Meeting
and give the Secretary notice of the stockholder's intention to vote in person.

Onsite bears the entire cost of preparing, assembling, printing and mailing
proxy materials furnished by the Board of Directors to stockholders. Copies of
proxy materials are furnished to brokerage houses, fiduciaries and custodians to
be forwarded to beneficial owners of Onsite's Class A Common Stock. In addition
to the solicitation of proxies by mail, some of the officers, directors,
employees and agents of Onsite may, without additional compensation, solicit
proxies by telephone or personal interview. Onsite bears the cost of these
additional solicitations.

A copy of Onsite's Annual Report on Form 10-KSB for the year ended June 30,
2000, accompanies this Proxy Statement and proxy card.

This Proxy Statement and proxy card were first mailed to stockholders on or
about December 4, 2000.

Record Date and Voting Rights

Onsite is authorized to issue up to 23,999,000 shares of Class A Common Stock,
par value $0.001, 1,000 shares of Class B Common Stock, par value $0.001, and
1,000,000 shares of preferred stock, par value $0.001. As of October 27, 2000,
19,389,187 shares of Class A Common Stock were issued and outstanding. No shares
of Class B Common Stock, Series A Convertible Preferred Stock, Series B
Convertible Preferred Stock or Series D Convertible Preferred Stock are
outstanding. In October 2000, Onsite exercised its rights under a Share
Repurchase Agreement to repurchase all of the issued and outstanding shares of
Series D Convertible Preferred Stock (157,000 shares) for $0.001 per share of
Series D Convertible Preferred Stock. Additionally, 649,120 shares of Series C

<PAGE>2

Convertible Preferred Stock and 50,000 shares of Series E Convertible Preferred
Stock were issued and outstanding.

Each share of Class A Common Stock is entitled to one vote on all matters
submitted for stockholder approval. Each share of Series C Convertible Preferred
Stock and Series E Convertible Preferred Stock is entitled to vote on all
matters submitted for stockholder approval as if each share was converted into
Class A Common Stock. Each share of Series C Convertible Preferred Stock is
convertible into five shares of Class A Common Stock. Thus each share of Series
C Convertible Preferred Stock is entitled to the equivalent of five votes on all
matters submitted for stockholder approval. Each share of Series E Convertible
Preferred Stock is convertible into 100 shares of Class A Common Stock. Thus
each share of Series E Convertible Preferred Stock is entitled to the equivalent
of 100 votes on all matters submitted for stockholder approval. The Class A
Common Stock, the Series C Convertible Preferred Stock and the Series E
Convertible Preferred Stock vote together as one class.

The record date for determination of stockholders of Class A Common Stock,
Series C Convertible Preferred Stock and Series E Convertible Preferred Stock
are entitled to notice of and to vote at the Meeting is November 27, 2000.
Onsite's Certificate of Incorporation does not provide for cumulative voting.

The plurality of the votes of the Class A Common Stock, Series C Convertible
Preferred Stock (voting on an as-converted basis) and Series E Convertible
Preferred Stock (voting on an as-converted basis), voting together as one class,
present in person or represented by proxy at the Meeting and entitled to vote on
the election of directors shall elect the nominees for the Board of Directors.
The affirmative vote of a majority of the Class A Common Stock, Series C
Convertible Preferred Stock (voting on an as-converted basis) and Series E
Convertible Preferred Stock (voting on an as converted basis), voting together
as one class, present in person or represented by proxy at the Meeting and
entitled to vote on each of Proposal No. 2 and Proposal No. 3 described below
(which shares voting affirmatively also constitute at least a majority of the
required quorum) is necessary to approve each of Proposal No. 2 and Proposal No.
3. Under Delaware law, abstentions and broker non-votes are counted to determine
quorum. Broker non-votes are not counted, however, to calculate voting power
(that is, the number of shares present in person or represented by proxy, and
entitled to vote on a measure). Abstentions, however, are counted to calculate
voting power.

PROPOSAL NO. 1

ELECTION OF DIRECTORS

General Information

At the Meeting, stockholders will be asked to elect Messrs. H. Tate Holt and
Frank J. Mazanec as directors of the first class to serve until the 2002 annual
meeting and until their successors are elected and qualified, and Messrs.
Charles C. McGettigan and Richard T. Sperberg as directors of the second class
to serve until the 2001 annual meeting and until their successors are elected
and qualified.

Under Article III, Section 2 of Onsite's Bylaws, the authorized number of
directors is required to be between five and 11, as set by the Board of
Directors. The Board has fixed the current number at five.

The Board of Directors is divided into two (2) classes. The first class
currently consists of three (3) directors and the second class currently
consists of two (2) directors. Each class expires in alternating years.
Directors of the first class were elected at the 1996 annual meeting of
stockholders (held on December 4, 1996) to hold office for a term originally

<PAGE>3

scheduled to expire in 1998 (and until their successors are elected and
qualified). Directors of the second class were elected at the 1997 annual
meeting (held on December 5, 1997), to hold office for a term originally
scheduled to expire in 1999 (and until their successors are elected and
qualified). Accordingly, the directors of the first class elected at the Meeting
will hold office for a term expiring at the 2002 annual meeting (and until their
respective successors have been duly elected and qualified), and the directors
of the second class elected at the Meeting will hold office for term expiring at
the 2001 annual meeting (and until their respective successors have been duly
elected and qualified).

In October 1997, Onsite entered into a Stock Subscription Agreement with Westar
Capital, Inc. ("Westar Capital"), a wholly-owned subsidiary of Western
Resources, Inc. ("Western Resources"). Under the Stock Subscription Agreement,
Westar Capital purchased 2,000,000 shares of Onsite Class A Common Stock at
$0.50 per share, and 200,000 shares of Onsite Series C Convertible Preferred
Stock at $5 per share. Additionally, under the terms of the Stock Subscription
Agreement, Westar Capital had the initial right to elect one director to
Onsite's Board of Directors, and selected Rita A. Sharpe. Ms. Sharpe served as a
director until October 5, 1998, when she resigned in order to assume a new
position with Western Resources. Mr. Leroy P. Wages subsequently was appointed a
director to fill the vacancy created by Ms. Sharpe's resignation. Mr. Wages
resigned as a director on December 16, 1998, and Westar Capital has not
designated an individual to replace Mr. Wages.

Further, Westar Capital entered into a Stockholders Agreement with certain
principal stockholders of Onsite that held, in the aggregate with Westar
Capital, more than fifty percent (50%) of the voting stock of Onsite. Under the
terms of the Stockholders Agreement, (i) Westar Capital currently has the right
to nominate a number of directors equal to the number of directors that Westar
Capital would have the ability to elect if Onsite utilized cumulative voting
(and without regard to classes of directors) less one (but not less than one
director) and the principal stockholders to the Stockholders Agreement have
agreed to vote for Westar Capital's nominees; and (ii) Westar Capital has agreed
to vote for the remaining nominees selected by Onsite's Nominating Committee.
Additionally, under the Certificate of Designations for the Series C Convertible
Preferred Stock if, at any time, four or more quarterly dividends, whether or
not consecutive, on the Series C Convertible Preferred Stock are in default,
Westar Capital, as the holder of the Series C Convertible Preferred Stock, is
entitled to elect the smallest number of directors as would constitute a
majority of the Board of Directors. While Onsite has been unable to pay four
quarterly dividends, as of the date of this Proxy Statement Westar Capital has
not exercised its right to elect a majority of the Board of Directors.

In June 1998, Onsite completed a transaction with SYCOM Enterprises, LLC ("SYCOM
LLC") (and certain related companies) through which SYCOM ONSITE Corporation, a
wholly-owned subsidiary of Onsite ("SO Corporation"), acquired all of the
project assets and assumed specific project liabilities of SYCOM LLC in exchange
for 1,750,000 shares of Onsite Class A Common Stock. Under a Sale and
Noncompetition Agreement among Onsite, SO Corporation, SYCOM Corporation and
SYCOM Enterprises, L.P. ("SYCOM LP"), SO Corporation, on behalf of itself and
Onsite, had acquired the right to the services and expertise of SYCOM
Corporation's employees in exchange for 157,500 shares of Onsite Series D
Convertible Preferred Stock. Effective June 30, 2000, Onsite terminated the Sale
and Noncompetition Agreement in accordance with its terms, and in October 2000,
Onsite exercised its rights under a Share Repurchase Agreement to repurchase all
of the outstanding shares of Series D Convertible Preferred Stock for $157.
Furthermore, on October 17, 2000, as part of the on-going termination of the
SYCOM relationship, Onsite, SYCOM LLC, SYCOM Corporation and SYCOM LP entered
into an agreement under which the parties agreed to negotiate and execute
certain other agreements, including an agreement for the sale by SYCOM LLC of
the shares of Class A Common Stock currently owned by SYCOM LLC.

Additionally, as part of the transaction certain of Onsite's principal
stockholders entered into a Voting Agreement with SYCOM LLC and SYCOM
Corporation. Following the close of the SYCOM LLC asset acquisition, the number
of directors had been expanded to eight, and under the terms of the Voting
Agreement SYCOM LLC and SYCOM Corporation had the right to nominate two of
Onsite's eight directors and initially had selected Messrs. S. Lynn Sutcliffe
and Richard L. Wright. Mr. Sutcliffe served as a director until September 22,
2000, and then resigned his position, and Mr. Wright served as a director until

<PAGE>4

September 1, 2000, when he resigned his position. In October 2000, the Voting
Agreement was terminated by the parties.

As discussed above, in December 1998, Mr. Wages resigned as a director, and in
September 2000, Messrs. Sutcliffe and Wright resigned as directors.
Additionally, in February 1999, and January 2000, Messrs. William M. Gary III
and Timothy G. Clark, respectively, also resigned as directors. Messrs. Gary,
Clark and Sutcliffe were directors of the first class, and Messrs. Wages and
Wright were directors of the second class. In August 2000, the Board elected Mr.
Mazanec as a director. As discussed above, Westar Capital has not designated a
replacement for Mr. Wages. Thus, with the current number of directors fixed at
five, one vacancy currently exists on the Board.

Messrs. Holt and Mazanec, current directors of Onsite of the first class (and
whose terms were scheduled to expire in 1998) are nominees to hold office until
the 2002 annual meeting. Messrs. McGettigan and Sperberg, current directors of
Onsite of the second class (and whose terms were scheduled to expire in 1999)
are nominees to hold office until the 2001 annual meeting. The holders of
Onsite's Class A Common Stock, Series C Convertible Preferred Stock (voting on
an as-converted basis) and Series E Convertible Preferred Stock (voting on an
as-converted basis), voting together as one class, will be entitled to vote on
the election of Messrs. Holt and Mazanec, and of Messrs. McGettigan and
Sperberg.

Unless authority is withheld, the enclosed proxy will be voted FOR the above
nominees. In the event that any nominee should unexpectedly decline or be
unavailable to act as a director, the enclosed proxy may be voted for a
substitute nominee to be designated by the Board of Directors. The Board of
Directors has no reason to believe that the nominees will become unavailable,
and has no present intention to nominate any person in addition to, or in lieu
of, the nominees.

The Board of Directors held eleven (11) meetings during the last fiscal year.
All of the nominees for attended at least seventy-five percent (75%) of all
meetings and meetings of committees on which they serve or served.

Committees of the Board of Directors

During the 2000 fiscal year, Messrs. McGettigan, Holt and Clark (until his
resignation in January 2000) comprised the Audit Committee; Messrs. McGettigan
and Holt comprised the Compensation Committee; and Messrs. McGettigan, Sperberg
and Sutcliffe (until his resignation in September 2000) comprised the Nominating
Committee. Mr. McGettigan has served as the Chairman of the Board since December
1994.

The primary functions of the Audit Committee are to review the scope and result
of the audit performed by Onsite's independent accountants, Onsite's internal
accounting controls, non-audit services performed by the independent accountants
and the cost of accounting services. The Compensation Committee administers
Onsite's 1993 Stock Option Plan and approves certain employees' compensation.
Both the Audit and the Compensation Committees are comprised only of
non-employee directors. The Nominating Committee acts as the selection committee
to nominate candidates for election to the Board of Directors.

Directors Nominated for Election

The following table sets forth certain business information for the last five
years about the individuals nominated by the Board of Directors for election to
the first and second classes of directors:

<PAGE>5

Directors of the First Class:

Nominee Age Director Since
----------------- ----- ----------------

H. Tate Holt 48 1994

Frank J. Mazanec 52 2000

Background of Nominees of the First Class

H. Tate Holt. Mr. Holt has been a director of Onsite since May 1994. Mr. Holt
currently is the President and Chief Executive Officer of Newstar Ltd.
("Newstar"), a development stage company seeking to market meter reading
services via satellite. Prior to joining Newstar, Mr. Holt served as the
President of Holt & Associates, a corporate growth management consulting firm,
and held that position from July 1990 through August 1999. In his position with
Holt & Associates, Mr. Holt assisted small and medium-sized clients in
developing and achieving aggressive growth targets. Mr. Holt currently serves on
the Boards of Directors of DBS Industries, Inc., and AremisSoft Corporation. He
is the author of the book "The Business Doc - Prescriptions for Growth." Mr.
Holt holds an A.B. from Indiana University.

Frank J. Mazanec. Mr. Mazanec has served as a director of Onsite since August
2000. Mr. Mazanec has been employed by Onsite and its predecessor, Onsite
Energy, a California corporation ("Onsite-Cal"), since 1991. Mr. Mazanec is a
licensed professional engineer in Colorado, and currently serves as Senior Vice
President of Onsite. For over 20 years, he has developed and managed over
$100,000,000 in energy generation, waste management and environmental projects.
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.

Directors of the Second Class:

Nominee Age Director Since
------------------------ ----- ----------------

Charles C. McGettigan 55 1993

Richard T. Sperberg 49 1982 (1)

(1) Includes time of service with Onsite-Cal.

Background of Nominees of the Second Class

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. 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 Cuisine Solutions, Inc., Modtech, Inc., PMR

<PAGE>6

Corporation, Sonex Research, Inc., Tanknology - NDE Corporation and Wray-Tech
Instruments, Inc. Mr. McGettigan is a graduate of Georgetown University and
received his Master of Business Administration from the Wharton School of the
University of Pennsylvania.

Richard T. Sperberg. Mr. Sperberg has been a director and the Chief Executive
Officer of Onsite since its inception, served as Onsite's President from its
inception through October 1998, and was re-elected President in June 2000. Mr.
Sperberg served as Onsite's Chief Financial Officer from May 1997 through July
1998. 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 Energy Management, Inc., reorganized into Onsite Energy Corporation. Mr.
Sperberg has been involved in project management of energy efficiency, advanced
energy technologies, alternative energy and cogeneration projects for over 23
years, with specific management experience with Onsite-Cal, the Gas Research
Institute, and the U.S. Department of Energy. Mr. Sperberg previously served on
the Boards of Directors of the American Cogeneration Association and the San
Diego Cogeneration Association, currently serves as a director of the National
Association of Energy Service Companies ("NAESCO"), and served as the President
of NAESCO from 1997 to 1999. 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.

THE BOARD OF DIRECTORS RECOMMENDS VOTING FOR THE NOMINEES IN THE ELECTION OF
DIRECTORS.

PROPOSAL NO. 2

APPROVAL OF AMENDMENT TO THE ONSITE
1993 STOCK OPTION PLAN

In February 1994, Onsite's stockholders approved the 1993 Stock Option Plan (the
"Plan") and in 1997 amended the Plan. Subject to stockholder approval, the Board
of Directors and the Compensation Committee approved an amendment to the Plan to
increase the number of shares subject to the Plan by 600,000 shares of Class A
Common Stock, and approved an amendment to the Plan to increase the term of the
non-discretionary options granted to non-employee directors from five years to
10 years. Currently under the Plan, a total of 3,300,000 shares of Class A
Common Stock may be issued, of which 2,767,476 shares were subject to options as
of October 27, 2000. The purpose of the Plan is to attract and retain the best
personnel and to give option recipients a greater personal stake in the success
of the business. Also, by increasing the term of non-discretionary options for
non-employee directors, the non-employee directors are provided with an
additional incentive to continue their service as a director of Onsite. As
discussed below, the Plan is a "dual plan" that provides for the grant of both
nonqualified options and incentive stock options. A copy of the amended Plan is
attached as Appendix A.

Description of the Plan

The increase of the number of shares available under the Plan will not effect
previously granted options. The following is a summary of the provisions of the
Plan. The summary is not intended to be a complete description of all terms and
provisions of the Plan.

Eligibility. The Plan provides for the grant of options to employees,
directors, officers and consultants who the Compensation Committee determines
are rendering valuable services to Onsite or any subsidiary (the
"Participants"). Except for non-discretionary grants of options, the
Compensation Committee determines the recipients of options and the terms of
options granted.

<PAGE>7

Administration. The Plan is administered by the Compensation Committee,
which currently consists of two disinterested Board members. The Compensation
Committee is responsible for the operation of the Plan and, subject to the terms
thereof and certain exceptions for discretionary grants to non-employee
directors, makes all determinations regarding (i) participation in the Plan by
eligible persons; and (ii) the nature and extent of participation. The
interpretation and construction of any provisions of the Plan by the Board or
Compensation Committee is final. The Board may at any time remove a Compensation
Committee member and appoint a successor, provided the successor is a
disinterested Board member.

Other than the ability to receive compensation individually as directors of
Onsite, Compensation Committee members serve without compensation, unless
otherwise determined by the Board, provided that Onsite shall pay the expenses
of such members incurred in the administration of the Plan, subject to approval
of the Board.

Non-discretionary Grants. Non-employee directors of Onsite are
automatically granted options to purchase 25,000 shares of Class A Common Stock
on (i) the date he or she becomes a director; and (ii) each anniversary date of
the date he or she became a director. The exercise price of such options is the
fair market value on date granted. Each option currently is exercisable for five
years. Upon stockholder approval of Proposal No. 2, each non-discretionary
option granted will be exercisable for 10 years, and the terms of options
previously granted to Messrs. McGettigan (225,000 shares with current term
expiration dates ranging from January 25, 2001, to July 13, 2005) and Holt
(200,000 shares with current term expiration dates ranging from January 25,
2001, to May 4, 2005) will be extended to 10 years.

Terms of Options. Each option is evidenced by a stock option agreement
between Onsite and the Participants. Options granted have terms of up to 10
years, as determined by the Compensation Committee and are subject to other
additional terms and conditions as set forth in the Plan. In the case of a
Participant who owns more than ten percent (10%) of Onsite's Class A Common
Stock, the term of any Incentive Stock Option shall not be more than five years
from the date of the grant.

Number of Shares of Class A Common Stock Subject to Any One Option. The
Compensation Committee determines the number of shares subject to an option
grant. However, the fair market value (determined as of the date of grant) of
the Class A Common Stock for which Incentive Stock Options may first become
exercisable by any Participant during any calendar year may not exceed $100,000.

Exercise of Options. Options become exercisable during a period or
during such periods as the Compensation Committee determines and may be
specifically conditioned upon achieving specified performance goals. An option
may be exercised by giving written notice of exercise to Onsite specifying the
number of full shares of Class A Common Stock to be purchased and tendering
payment of the purchase price to Onsite. The option price of an Incentive Stock
Option or Non-Qualified Stock Option is payable in full upon exercise. Payment
of the option price upon exercise may be made in cash or by check.

Option Price. The option price is determined by the Compensation
Committee but for Incentive Stock Options, the exercise price is the fair market
value of Onsite's Class A Common Stock on the date of grant. In the case of an
Incentive Stock Option granted to a Participant who owns more than ten percent
(10%) of the Class A Common Stock, the exercise price will be one hundred ten
percent (110%) of the fair market value.

Employment Agreement. The Compensation Committee may include in an
option agreement a condition that the Participant shall agree to remain in the
employ of Onsite for a specified period of time following the date of grant.

<PAGE>8

Termination of Status as an Employee. If the Participant ceases to
serve as an employee, consultant or director of Onsite other than for permanent
and total disability or death, all or part of the shares that the Participant
was entitled to exercise at the date of such termination may be exercised within
three months after the date service to Onsite ceases, or such period specified
in the option agreement. After such three month period, all unexercised options
shall terminate. If the Participant is an employee and the Participant's
employment terminates but the Participant continues as a director or consultant,
the Participant shall be entitled to exercise within three months of termination
of services to Onsite; however, if the Participant does not exercise within
three months of termination of employment, then the option shall not qualify as
an Incentive Stock Option. Notwithstanding the foregoing, in no event may an
option be exercised after its term has expired.

Death or Permanent Disability. If an Participant should die or become
permanently or totally disabled while serving as an employee, officer,
consultant or director of Onsite, options held by the Participant may be
exercised by the Participant, the Participant's estate or descendant at any time
within 12 months after the death or permanent disability and shall terminate
thereafter. If a Participant should die within the period where the options may
be exercised, then the options may be exercised within 12 months after the death
to the extent the option was exercisable on the date of such death.
Notwithstanding the foregoing, in no event may an option be exercised after its
term has expired.

Suspension or Termination of Options. No option shall be exercisable by
any person after its expiration date. If the Board of Directors or the
Compensation Committee reasonably believes that a Participant has committed an
act of misconduct, the Compensation Committee may suspend the Participant's
right to exercise any option pending a final determination by the Board or the
Compensation Committee. If the Compensation Committee determines a Participant
has committed an act of embezzlement, fraud, breach of fiduciary duty or
deliberate disregard of Onsite's rules resulting in loss, damage or injury to
Onsite, or if a Participant makes an unauthorized disclosure of any company
trade secret or confidential information, engages in any conduct constituting
unfair competition, induces any of Onsite's customers or contracting parties to
breach a contract with Onsite, or induces any principal for whom Onsite acts as
an agent to terminate such agency relationship, neither the Participant nor his
or her estate shall be entitled to exercise any option whatsoever. In making
such determination, the Board or the Compensation Committee shall act fairly and
in good faith and shall give the Participant an opportunity to appear and
present evidence on the Participant's behalf at a hearing before the
Compensation Committee. The determination of the Board or the Compensation
Committee shall be final and conclusive.

Transferability of Options. An option is non-transferable, other than
by will or the laws of descent and distribution, and is exercisable only by the
Participant during his or her lifetime, or, in the event of death, by the
executors, administrators, designated beneficiary, legatees or heirs of his or
her estate during the time period provided above.

Compliance with Securities Laws. It is the intent of Onsite that the
Plan will comply with Rule 16b-3 of the Securities Exchange Act of 1934, as
amended.

Other Provisions. The option agreement may contain such other terms,
provisions and conditions not inconsistent with the Plan as may be determined by
the Board or Compensation Committee.

U.S. Federal Tax Aspects

Options granted under the Plan may be either Incentive Stock Options (which
satisfy the requirements of Section 422 of the Internal Revenue Code) or
Non-Qualified Options (which are not intended to meet such requirements). The
United States federal income tax treatment for the two types of options
generally differs as follows:

<PAGE>9

Incentive Options. No taxable income is recognized by the Participant
at the time of the option grant, and no taxable income is generally recognized
at the time the option is exercised. The Participant will, however, recognize
taxable income in the year in which the purchased shares are sold or otherwise
made the subject of a taxable disposition. For federal tax purposes,
dispositions are divided into two categories: (i) qualifying; and (ii)
disqualifying. A qualifying disposition occurs if the sale or other disposition
is made after the Participant has held the shares for more than two years after
the option grant date and more than one year after the exercise date. If either
of these two holding periods is not satisfied, then a disqualifying disposition
will result.

Upon a qualifying disposition of the shares, the Participant will recognize
long-term capital gain in an amount equal to the excess of (i) the amount
realized upon the sale or other disposition of the purchased shares over (ii)
the exercise price paid for those shares. If there is a disqualifying
disposition of the shares, then the excess of (i) the fair market value of the
shares on the exercise date over (ii) the exercise price paid for those shares
will be taxable as ordinary income to the Participant. Any additional gain or
loss recognized upon the disposition will be taxable as a capital gain or loss.

If the Participant makes a disqualifying disposition of the purchased shares,
then Onsite will be entitled to an income tax deduction for the taxable year in
which such disposition occurs, equal to the excess of (i) the fair market value
of such shares on the option exercise date over (ii) the exercise price paid for
the shares. In no other instance will Onsite be allowed a deduction with respect
to the Participant's disposition of the purchased shares.

Non-Qualified Options. No taxable income is recognized by a Participant
upon the grant of a Non-Qualified Option. The Participant will in general
recognize ordinary income, in the year in which the option is exercised, equal
to the excess of the fair market value of the purchased shares on the exercise
date over the exercise price paid for the shares, and the Participant will be
required to satisfy the tax withholding requirements applicable to such income.

Onsite will be entitled to an income tax deduction equal to the amount of
ordinary income recognized by the Participant with respect to the exercised
Non-Qualified Option. The deduction will in general be allowed for the taxable
year of Onsite in which such ordinary income is recognized by the Participant.

Withholding Taxes. Onsite is entitled to take appropriate measures to
withhold from the shares of Class A Common Stock, or to otherwise obtain from
the recipients, sufficient sums in cash, check or shares of stock as the
Compensation Committee deems necessary to satisfy any applicable federal, state
and local withholding taxes, including FICA taxes, before the delivery of the
Class A Common Stock to the recipient.

Accounting Treatment

Option grants with an exercise price per share equal to one hundred percent
(100%) of the fair market value of the shares at the time of grant will not
result in any direct charge to Onsite's earnings. However, the fair value of
those options must be disclosed in the notes to Onsite's financial statements,
in the form of proforma statements, indicating the impact those options would
have upon Onsite's reported earnings if the value of those options, at the time
of grant, were treated as compensation expense. In addition, the number of
outstanding options may be a factor in determining Onsite's earnings per share
on a diluted basis.

On March 31, 1999, the Financial Accounting Standards Board issued an Exposure
Draft of a proposed interpretation of APB Opinion 25, "Accounting for Stock
Issued to Employees." Under the proposed interpretation, as modified on August
11, 1999, option grants made to non-employee consultants (but not non-employee
Board members) after December 15, 1998, will result in a direct charge to
Onsite's reported earnings based upon the fair value of the option measured
initially as of the grant date and then subsequently on the vesting date of each

<PAGE>10

installment of the underlying option shares (if vesting applies). Such charge
will accordingly include the appreciation in the value of the option shares over
the period between the grant date of the option (or, if later, the effective
date of the final amendment) and the vesting date of each installment of the
option shares (if vesting applies).

Adjustment Upon Changes in Capitalization. In the event any change,
such as a stock split, is made in Onsite's capitalization which results in an
exchange of Class A Common Stock for a greater or lesser number of shares, an
appropriate adjustment shall be made in the option price and in the number of
shares subject to the option. In the event of the proposed dissolution or
liquidation of Onsite, the Compensation Committee either may cancel each
outstanding option upon a cash payment or accelerate the time within with each
outstanding option may be exercised. In the event of the sale of all or
substantially all of Onsite's assets or the merger of Onsite with or into
another corporation, (i) if Onsite is the surviving corporation following a
merger or consolidation, the Board shall determine an appropriate adjustment of
the number and kind of securities with respect to which outstanding options may
be exercised and the exercise price; or (ii) if Onsite is not the surviving
corporation, the Compensation Committee either may cancel each outstanding
option upon a cash payment or accelerate the time within which each outstanding
option may be exercised.

Amendment and Termination. The Board may amend the Plan to materially
increase the benefits accruing to the option holder without stockholder
approval, except to the extent that stockholder approval is required to maintain
the status of the Plan as an Incentive Stock Option Plan. Notwithstanding the
foregoing, no action by the Board or stockholders may alter or impair any option
previously granted under the Plan without the consent of the Participant.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF AN AMENDMENT TO THE
ONSITE 1993 STOCK OPTION PLAN INCREASING THE NUMBER OF SHARES AVAILABLE FOR
GRANT THEREUNDER AND INCREASING THE LENGTH OF THE TERM OF NON-DISCRETIONARY
OPTIONS GRANTED TO NON-EMPLOYEE DIRECTORS.

PROPOSAL NO. 3

APPROVAL OF AMENDMENT TO ONSITE'S CERTIFICATE OF
INCORPORATION TO INCREASE THE AUTHORIZED NUMBER OF SHARES
AVAILABLE FOR ISSUANCE BY ONSITE

Onsite filed its Certificate of Incorporation on July 9, 1993. Thereafter,
amendments to the Certificate of Designation abolishing the Series A Convertible
Preferred Stock and Series B Convertible Preferred Stock and Certificates of
Designation creating the Series C Convertible Preferred Stock, Series D
Convertible Preferred Stock and Series E Convertible Preferred Stock have been
filed. The amendments abolishing the Series A Convertible Preferred Stock and
Series B Convertible Preferred Stock were filed after the holders of such shares
voluntarily converted their shares to Class A Common Stock in 1996. As discussed
in more detail below, stockholder approval is being sought for an amendment to
Onsite's Certificate of Incorporation to increase the number of shares
authorized and available for issuance in order to give Onsite a sufficient
reserve of shares of Class A Common Stock for future issuances, and enable
Onsite to have sufficient shares available upon and after the conversion of the
Series C Convertible Preferred Stock and the Series E Convertible Preferred
Stock.

<PAGE>11

Description of Outstanding Shares

The Series C Convertible Preferred Stock was created in October 1997, in
connection with the Stock Subscription Agreement executed by Onsite and Westar
Capital, discussed under Proposal No. 1 above. As a result of the October 1997
transaction with Westar Capital, the exercise by Onsite of two additional calls
on Westar Capital to purchase additional shares of Series C Convertible
Preferred Stock and the payment of dividends on the Series C Convertible
Preferred Stock (paid in shares of Series C Convertible Preferred Stock), Westar
Capital currently is the holder of 4,500,000 shares of Class A Common Stock and
649,120 shares of Series C Convertible Preferred Stock. Each share of Series C
Convertible Preferred Stock is convertible into five shares of Class A Common
Stock and convertible in the aggregate into shares 3,245,600 shares of Onsite
Class A Common Stock.

The Series D Convertible Preferred Stock was created in June 1998, in connection
with the SYCOM transaction. However, as discussed under Proposal No. 1 above, in
October 2000, Onsite exercised its rights under a Share Repurchase Agreement to
repurchase all of the issued and outstanding shares of Series D Convertible
Preferred Stock (157,000 shares) for nominal consideration ($0.001 per share of
Series D Convertible Preferred Stock), and thus no shares of Series D
Convertible Preferred Stock currently are outstanding.

The Series E Convertible Preferred Stock was created in August 1999, in
connection with a private placement transaction with a few current shareholders
of Onsite. In exchange for $1,000,000, Onsite issued 50,000 shares of Series E
Convertible Preferred Stock to four current shareholders of Onsite, including
Mr. McGettigan. The Series E Convertible Preferred Stock currently is
convertible in the aggregate into 5,000,000 shares of Onsite Class A Common
Stock. In addition to shares of Series E Convertible Preferred Stock, the
purchasers were granted warrants to purchase 1,250,000 shares of Onsite Class A
Common Stock at $0.75 per share, and 1,250,000 shares of Onsite Class A Common
Stock at $0.50 per share.

Onsite currently is authorized to issue up to 23,999,000 shares of Class A
Common Stock, par value $0.001, 1,000 shares of Class B Common Stock, par value
$0.001, and 1,000,000 shares of preferred stock, par value $0.001. As of October
27, 2000, 19,389,187 shares of Class A Common Stock were issued and outstanding.
Also, 649,120 shares of Series C Convertible Preferred Stock and 50,000 shares
of Series E Convertible Preferred Stock were issued and outstanding. No shares
of Class B Common Stock, Series A Convertible Preferred Stock, Series B
Convertible Preferred Stock or Series D Convertible Preferred Stock are
outstanding.

Increase in Authorized Number of Shares

A sufficient number of authorized shares of Class A Common Stock is not
available to cover the conversion of the Series C Convertible Preferred Stock
and Series E Convertible Preferred Stock into Class A Common Stock. Upon the
conversion of the Series C Convertible Preferred Stock and the Series E
Convertible Preferred Stock, 8,245,600 additional shares of Class A Common Stock
will need to be available for issuance by Onsite. In order to give Onsite a
sufficient reserve of shares of Class A Common Stock for future issuances, and
enable Onsite to have sufficient shares available upon and after the conversion
of the Series C Convertible Preferred Stock and the Series E Convertible
Preferred Stock, stockholder approval is being sought for an amendment to
Onsite's Certificate of Incorporation to increase the number of shares
authorized and available for issuance.

<PAGE>12

Furthermore, the ability to issue preferred stock provides Onsite with a
valuable tool in the future development of transactions designed to continue to
contribute to Onsite's growth. The Series C Convertible Preferred Stock and the
Series E Convertible Preferred Stock currently account for the majority of the
authorized shares of preferred stock. Accordingly, stockholder approval is being
sought for an amendment to Onsite's Certificate of Incorporation increasing the
authorized number of preferred shares reserved for issuance.

The proposed amendment to Onsite's Certificate of Incorporation would
increase the number of shares available for issuance by 15,000,000 shares, to a
total of 40,000,000 shares. Of these 40,000,000 shares, 37,999,000 would be
designated as Class A Common Stock. The amendment also would increase the
authorized number of preferred shares reserved for issuance by 1,000,000, to
2,000,000. Hence 2,000,000 of the 40,000,000 shares would be reserved for
issuance as preferred shares. Onsite has no present agreement to issue the
additional preferred shares. A copy of the proposed amendment is attached hereto
as Appendix B.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF AN AMENDMENT TO
ONSITE'S CERTIFICATE OF INCORPORATION TO INCREASE THE AUTHORIZED NUMBER OF
SHARES AVAILABLE FOR ISSUANCE BY ONSITE.

DIRECTORS AND EXECUTIVE OFFICERS

Current Directors

For information on the persons currently serving as directors of Onsite, see
Directors Nominated for Election above.

Executive Officers

The following table sets forth certain business information for the last five
years with respect to the current executive officers of Onsite.

Name Positions with Onsite Age Office Held Since
---------------------------------- ------------------------------------- ----------- -----------------------

Charles C. McGettigan Chairman of the Board 55 1994
---------------------------------- ------------------------------------- ----------- -----------------------
Richard T. Sperberg President and Chief Executive 49 1982 (1)
Officer
---------------------------------- ------------------------------------- ----------- -----------------------
J. Bradford Hanson Chief Financial Officer 45 1995 (2)
---------------------------------- ------------------------------------- ----------- -----------------------
Frank J. Mazanec Senior Vice President 52 1992 (1)
---------------------------------- ------------------------------------- ----------- -----------------------
Keith G. Davidson Senior Vice President 49 1994 (3)
---------------------------------- ------------------------------------- ----------- -----------------------
Elizabeth T. Lowe Vice President 37 1997
---------------------------------- ------------------------------------- ----------- -----------------------
Bruce A. Hedman Vice President 50 1998
---------------------------------- ------------------------------------- ----------- -----------------------
Audrey Nelson Stubenberg Secretary/General Counsel 37 1998
---------------------------------- ------------------------------------- ----------- -----------------------

</TABLE>

(1) Includes time of service with Onsite-Cal and service as Vice President of
Onsite.
(2) Mr. Hanson served as Chief Financial Officer of Onsite from August 1995
through May 1997, rejoining Onsite in October 1998.
(3) Includes time of service as Vice President of Onsite.

Executive officers are elected periodically by the Board of Directors and serve
at the pleasure of the Board. No family relationship exists between any of the
officers or directors.

<PAGE>13

Background of Executive Officers

For the business backgrounds of Messrs. McGettigan, Sperberg and Mazanec, see
Directors Nominated for Election above.

J. Bradford Hanson. Mr. Hanson has over 15 years of financial accounting,
administration and shareholder relations experience in the energy efficiency
services, financial, manufacturing, software development and retail market
sectors. Mr. Hanson, who has served as Onsite's Chief Financial Officer since
October 1998, also served as Onsite's Chief Financial Officer from August 1995
through May 1997. From May 1997 through October 1998, Mr. Hanson worked for
Sports Group International, Inc., and as an independent financial and accounting
consultant. Mr. Hanson earned a Bachelor of Science from San Diego State
University and is a Certified Public Accountant.

Keith G. Davidson. Mr. Davidson has been a Vice President of Onsite since 1994,
and currently serves as Senior Vice President of Onsite. Mr. Davidson has over
25 years of diversified management experience in energy and environmental
technology, product commercialization and market development. Mr. Davidson is
responsible for one of Onsite's internal business units. 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 previously
served 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 and the American Gas Association's Industrial and Commercial Hall of
Flame. Mr. Davidson earned a Bachelor of Science in Mechanical Engineering from
the University of Missouri and a Master of Science in Mechanical Engineering
from Stanford University.

Elizabeth T. Lowe. As Vice President, Ms. Lowe heads up Onsite's Northern
California office. She is responsible for marketing, operations and regulatory
representation in Northern California, as well as targeted national account
strategies and projects in other regions of the West, including Colorado and
Texas. Ms. Lowe also adds to Onsite's consulting capabilities in the areas of
natural gas and electricity purchases and overall customer strategies to reduce
energy costs. Ms. Lowe joined Onsite in 1997. Prior to joining Onsite, from 1996
to 1997 Ms. Lowe served as Vice President of Western Operations for
DukeSolutions, Inc. (formerly Duke/Louis Dreyfus), heading up the Western region
operations for this Duke Energy subsidiary. The Western region group worked with
retail and wholesale customers to develop and implement overall energy
purchasing strategies through negotiations training, strategic alliances, and
engineering and pricing solutions. Prior to joining DukeSolutions, Ms. Lowe
spent 10 years in energy and environmental consulting, and most recently (from
1991 to 1996) developed and directed Barakat & Chamberlin's Corporate Energy
Management practice. In this capacity, she assisted large energy consumers in
the development of energy cost reduction strategies through procurement and
management of fuels, tariff and contract negotiations, aggregation strategies
and demand-side management planning. Ms. Lowe is an associate member of the
California Manufacturers Association and the California League of Food
Processors, and is the President of the Power Association of Northern
California. Ms. Lowe earned a Master of Environment Management in Resource
Economics and Policy from Duke University's Nicholas School of Environment and a
Bachelor of Arts in Public Policy Studies from Duke University's School of
Policy Studies and Public Affairs.

Dr. Bruce A. Hedman. Dr. Hedman joined Onsite in 1998, as Vice President,
Consulting Services, and together with Mr. Davidson is responsible for Onsite's
consulting services business. Dr. Hedman has over 20 years of experience in
energy and environmental technology development, new product commercialization,
and market research and development. Before joining Onsite, from 1995 to 1998
Dr. Hedman was Executive Director of the Industrial Center Inc. in Arlington,
Virginia, a natural gas industry technology transfer and market development

<PAGE>14

organization that supports commercial introduction of new natural gas
technologies in the industrial market. Dr. Hedman has a Bachelor of Science,
Master of Science and Ph.D. in Mechanical Engineering from Drexel University in
Philadelphia, Pennsylvania.

Audrey Nelson Stubenberg, Esq. Ms. Nelson Stubenberg has over 10 years
experience as a practicing transactional attorney and currently serves as
Onsite's Secretary and General Counsel. She joined Onsite in 1994. Prior to
joining Onsite, Ms. Nelson Stubenberg was an associate with the San Diego law
firm of Procopio, Cory, Hargreaves and Savitch, a business and commercial
transactions firm. A member of the California State Bar and the American Bar
Association, Ms. Nelson Stubenberg earned a Bachelor of Arts from the University
of Redlands and a Juris Doctorate from the University of San Diego School of
Law.

Directors' Compensation

Beginning June 1, 1998, non-employee directors are entitled to a fixed fee for
personal attendance at a Board meeting (of $1,000 per meeting), or for
attendance at a meeting via telephone (of $750). Additionally, non-employee
directors' out-of-pocket expenditures currently are reimbursed.

As previously discussed, non-employee directors currently receive periodic
grants of stock options issued under the Plan's non-discretionary grants of
options. Each non-employee director automatically is granted an option to
purchase 25,000 shares of Onsite Class A Common Stock on the date he or she
becomes a director of Onsite, and on each anniversary date thereafter. The
exercise price is the fair market value of the Onsite Class A Common Stock on
the date of becoming a director and on the anniversary date, as appropriate.
Each option when granted is immediately exercisable and currently has a five
year term. As discussed under Proposal No. 2 above, stockholder approval is
being sought to increase the term of such options to 10 years. Directors who
also are officers of Onsite do not receive additional compensation for serving
as directors.

Executive Compensation

The following table sets forth the aggregate cash compensation paid for the past
three fiscal years by Onsite for services of Mr. Sperberg (Chief Executive
Officer), and the four most highly compensated executive officers whose
compensation exceeds $100,000 per year (Messrs. Mazanec (Senior Vice President),
Davidson (Senior Vice President), Hanson (Chief Financial Officer) and Dower
(former Vice President)), plus two other former executive officers of Onsite who
would have been included with the executive officers but for the fact that they
were not executive officers at the end of the fiscal year (Messrs. Sutcliffe
(former President) and Aiello (former Vice President)).

[Remainder of page intentionally left blank]

<PAGE>15

SUMMARY COMPENSATION TABLE

Long Term Compensation
----------------------------------------------------

Annual Compensation Awards Payouts
------------------------------------------ --------------------------- ---------
Restricted Securities
Other Annual Stock Underlying LTIP All Other
Name and Fiscal Salary Bonus Compensation Award(s) Options/SARs Payouts Compensation
Principal Position Year ($) ($) ($) ($) (#) ($) ($)
------------------------- -------- ------------ ------------- --------------- ----------- ---------------- ---------- ------------

Richard T. Sperberg 2000 $158,957 $ -0- $15,285 (6) -0- 602,159 (10) -0- $17,500 (19)
President and CEO 1999 $175,000 $ -0- $12,372 (6) -0- -0- -0- $ -0-
1998 $149,125 (3) $32,500 $17,889 (6) -0- 126,954 (11) -0- $ -0-
------------------------- -------- ------------ ------------- --------------- ----------- ---------------- ---------- ------------
Frank J. Mazanec 2000 $133,381 $39,998 $ 8,909 (6) -0- 397,904 (12) -0- $18,000 (20)
Senior Vice President 1999 $140,000 $40,000 $ 8,909 (6) -0- -0- -0- $ -0-
1998 $137,154 (3) $22,083 $10,923(6)(7) -0- 75,000 (13) -0- $ -0-
------------------------- -------- ------------ ------------- --------------- ----------- ---------------- ---------- ------------
Keith G. Davidson 2000 $133,531 $39,998 $ 8,111 (6) -0- 377,597 (14) -0- $18,000 (21)
Senior Vice President 1999 $140,000 $40,000 $ 8,385 (6) -0- -0- -0- $ -0-
1998 $121,342 (3) $23,333 $ 7,702 (6) (7) -0- 140,000 (15) -0- $ -0-
------------------------- -------- ------------ ------------- --------------- ----------- ---------------- ---------- ------------
J. Bradford Hanson (1) 2000 $117,031 $20,833 $ 7,200 (6) -0- 100,000 (16) -0- $15,000 (22)
Chief Financial Officer 1999 $ 76,891 $15,104 $ 4,350 (6) -0- 100,000 (16) -0- $ -0-
------------------------- -------- ------------ ------------- --------------- ----------- ---------------- ---------- ------------
Roger C. Dower (2) 2000 $118,050 $12,138 $ 6,600 (6) -0- -0- -0- $ 5,000 (23)
Former Vice President 1999 $119,300 $14,400 (4) $ 6,600 (6) -0- 100,000 (17) -0- $ -0-
------------------------- -------- ------------ ------------- --------------- ----------- ---------------- ---------- ------------
S. Lynn Sutcliffe (2) 2000 $252,780 $ -0- $ 6,600 (6) -0- -0- -0- $25,706 (24)
Former President 1999 $278,486 $ -0- $ 6,600 (6) -0- -0- -0- $ -0-
------------------------- -------- ------------ ------------- --------------- ----------- ---------------- ---------- ------------
Dominick J. Aiello (2) 2000 $104,702 $ 9,638 $18,534(6)(8) -0- -0- -0- $10,000 (25)
Former Vice President 1999 $120,000 $36,000 (5) $65,741(6)(9) -0- 164,281 (18) -0- $ -0-
------------------------- -------- ------------ ------------- --------------- ----------- ---------------- ---------- ------------
</TABLE>

(1) Mr. Hanson became an executive officer of Onsite in fiscal year 1999, and
thus information for Mr. Hanson is being reported for fiscal years 1999 and
2000 only.

(2) Messrs. Dower, Sutcliffe and Aiello are former executive officers of
Onsite. Mr. Dower served as an executive officer of Onsite through
September 26, 2000. Messrs. Sutcliffe and Aiello ceased to serve as
executive officers of Onsite prior to June 30, 2000. Messrs. Sutcliffe and
Dower are employees of SYCOM Corporation and/or eNERGYSolve.com
Corporation, and Mr. Aiello is no longer an employee of SYCOM Corporation.
Pursuant to a Sale and Noncompetition Agreement executed in connection with
the SYCOM LLC asset acquisition, Onsite acquired the right to the services
of SYCOM Corporation and all of its employees, including Messrs. Dower,
Sutcliffe and Aiello. As reported under Proposal No. 1 above, Onsite
terminated the Sale and Noncompetition Agreement effective June 30, 2000.
Because Messrs. Dower, Sutcliffe and Aiello became officers of Onsite in

<PAGE>16

fiscal year 1999, information for Messrs. Dower, Sutcliffe and Aiello is
being reported for fiscal years 1999 and 2000 only.

(3) In fiscal year 1997, certain executive officers agreed to defer certain
portions of their base salary and other compensation from approximately
December 1, 1996 through June 30, 1997. This deferred compensation was
repaid in fiscal year 1998 (on December 31, 1997), with simple interest at
the rate of fifteen percent (15%) per annum.

(4) Mr. Dower was entitled to a management bonus from SYCOM Corporation and, as
disclosed in footnote (17) below, he agreed to accept payment of a portion
of this bonus ($36,000) in the form of a five year option to purchase
100,000 shares of Onsite's Class A Common Stock at $0.4185 per share.

(5) Mr. Aiello was entitled to a management bonus from SYCOM Corporation of
$72,000 and he agreed to accept payment of one-half of this bonus, plus
certain commissions as disclosed in footnote (25) below, in the form of a
five year option to purchase 164,281 shares of Onsite's Class A Common
Stock at $0.4185 per share. These options, however, have expired.

(6) Includes a company car or car expense allowance and premiums for life
insurance (if any).

(7) Includes commissions paid or advanced in connection with negotiated
customer contracts pursuant to the commission policy of Onsite.

(8) Includes commissions paid or advanced in connection with negotiated
customer contracts pursuant to the commission policy of SYCOM Corporation.

(9) Pursuant to the commission policy of SYCOM Corporation, Mr. Aiello was
entitled to certain commissions payable by SYCOM Corporation in cash, and
he agreed to accept payment of one-half of these commissions, plus certain
bonuses as disclosed in footnote (5) above, in the form of a five-year
option to purchase 164,281 shares of Onsite's Class A Common Stock at
$0.4185 per share. As stated in footnote (5), these options have expired.

(10) Includes (i) a five year option to purchase 126,954 shares of Class A
Common Stock at $0.10725 per share, as repriced on June 1, 2000, subject to
vesting as follows: 42,318 shares vested on each of April 1, 1999 and 2000;
and 42,318 shares vest on April 1, 2001; (ii) 10 year options to purchase
225,205 shares of Class A Common Stock at $0.0975 per share, as repriced on
June 1, 2000 (which options are fully vested); and (iii) a five year option
to purchase 250,000 shares of Class A Common Stock at $0.10725 per share,
as repriced on June 1, 2000 (which option is fully vested).

(11) Includes a five year option to purchase 126,954 shares of Class A Common
Stock granted on April 1, 1998, at $0.10725 per share (as repriced on June
1, 2000), subject to vesting as follows: 42,318 shares vested on each of
April 1, 1999, and 2000; and 42,318 shares vest on April 1, 2001.

(12) Includes (i) a 10 year option to purchase 75,000 shares of Class A Common
Stock at $0.0975 per share, as repriced on June 1, 2000, subject to vesting
as follows: 25,000 shares vested on each of April 1, 1999 and 2000; and
25,000 shares vest on April 1, 2001; and (ii) 10 year options to purchase
322,904 shares of Class A Common Stock at $0.0975 per share, as repriced on
June 1, 2000 (which options are fully vested).

(13) Includes a five year option to purchase 75,000 shares of Class A Common
Stock granted on April 1, 1998, at $0.0975 per share (as repriced on June
1, 2000), subject to vesting as follows: 25,000 shares vested on each of
April 1, 1999, and 2000; and 25,000 shares vest on April 1, 2001.

<PAGE>17

(14) Includes (i) a 10 year option to purchase 100,000 shares of Class A Common
Stock at $0.0975 per share, as repriced on June 1, 2000, subject to vesting
as follows: 33,334 shares vested on April 1, 1999; 33,333 shares vested on
April 1, 2000; and 33,333 shares vest on April 1, 2001; and (ii) 10 year
options to purchase 277,597 shares of Class A Common Stock at $0.0975 per
share, as repriced on June 1, 2000 (which options are fully vested).

(15) Includes 10 year options to purchase (i) 40,000 shares of Class A Common
Stock granted on October 27, 1997, at $0.0975 per share (as repriced on
June 1, 2000) (which option is fully vested); and (ii) 100,000 shares of
Class A Common Stock granted on April 1, 1998, at $0.0975 per share (as
repriced on June 1, 2000), subject to vesting as follows: 33,334 shares
vested on April 1, 1999; 33,333 shares vested on April 1, 2000; and 33,333
shares vest on April 1, 2001.

(16) Includes a 10 year option to purchase 100,000 shares of Class A Common
Stock granted on October 30, 1998, at $0.0975 per share (as repriced on
June 1, 2000), subject to vesting as follows: 33,334 shares vested on
October 30, 1999; 33,333 shares vested on October 30, 2000; and 33,333
shares vest on October 30, 2001.

(17) As disclosed in footnote (4) above, Mr. Dower was entitled to a management
bonus from SYCOM Corporation and he agreed to accept payment of a portion
of this bonus ($36,000) in the form of a five year option to purchase
100,000 shares of Onsite's Class A Common Stock at $0.4185 per share.

(18) Pursuant to the commission policy of SYCOM Corporation, Mr. Aiello was
entitled to certain commissions payable by SYCOM Corporation in cash, and
he agreed to accept payment of one-half of these commissions, plus certain
bonuses as disclosed in footnote (5) above, in the form of a five-year
option to purchase 164,281 shares of Onsite's Class A Common Stock at
$0.4185 per share. As stated in footnote (5) above, these options have
expired.

(19) In August 1999, in connection with the private placement of shares of
Series E Convertible Preferred Stock to certain existing shareholders of
Onsite, certain current and former executive officers of Onsite, including
Mr. Sperberg, entered into a Salary Reduction Agreement pursuant to which
they agreed to reductions in salary and/or commissions owed (for a six
month period from August 1999 through January 2000) in exchange for shares
of Class A Common Stock and certain Warrants. Thus the table includes the
salary reduction taken by Mr. Sperberg in exchange for 87,500 shares of
Class A Common Stock and Warrants to purchase 43,750 shares of Class A
Common Stock (21,875 shares at each of $0.50 per share and $0.75 per share
exercise prices), which Warrants expire August 13, 2009.

Each of the Salary Reduction Agreements entered into by certain current or
former executive officers of Onsite, as described above, hereinafter in
these footnotes shall be referred to as the "Salary Reduction Agreement."

(20) Includes the salary reduction taken by Mr. Mazanec under the Salary
Reduction Agreement in exchange for 90,000 shares of Class A Common Stock
and Warrants to purchase 45,000 shares of Class A Common Stock (25,000
shares at each of $0.50 per share and $0.75 per share exercise prices),
which Warrants expire August 13, 2009.

(21) Includes the salary reduction taken by Mr. Davidson under the Salary
Reduction Agreement in exchange for 90,000 shares of Class A Common Stock
and Warrants to purchase 45,000 shares of Class A Common Stock (25,000
shares at each of $0.50 per share and $0.75 per share exercise prices),
which Warrants expire August 13, 2009.

(22) Includes the salary reduction taken by Mr. Hanson under the Salary
Reduction Agreement in exchange for 75,000 shares of Class A Common Stock
and Warrants to purchase 37,500 shares of Class A Common Stock (18,750
shares at each of $0.50 per share and $0.75 per share exercise prices),
which Warrants expire August 13, 2009.

<PAGE>18

(23) Includes commissions of SYCOM Corporation relinquished by Mr. Dower under
the Salary Reduction Agreement in exchange for 25,000 shares of Onsite
Class A Common Stock and Warrants to purchase 12,500 shares of Onsite Class
A Common Stock (6,250 shares at each of $0.50 per share and $0.75 per share
exercise prices), which Warrants expire August 13, 2009.

(24) Includes the salary reduction from SYCOM Corporation taken by Mr. Sutcliffe
under the Salary Reduction Agreement in exchange for 128,532 shares of
Onsite Class A Common Stock and Warrants to purchase 64,266 shares of
Onsite Class A Common Stock (32,133 shares at each of $0.50 per share and
$0.75 per share exercise prices), which Warrants expire August 13, 2009.

(25) Includes commissions of SYCOM Corporation relinquished by Mr. Aiello under
the Salary Reduction Agreement in exchange for 50,000 shares of Onsite
Class A Common Stock and Warrants to purchase 25,000 shares of Onsite Class
A Common Stock (12,500 shares at each of $0.50 per share and $0.75 per
share exercise prices), which Warrants expire August 13, 2009.

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>
<S> <C> <C> <C> <C> <C>

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
---------------------------- ---------------- ------------------ ---------------- ----------------- ----------------

NONE

</TABLE>

[Remainder of page intentionally left blank]

<PAGE>19

AGGREGATED OPTION/SARS EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SARS VALUES

<TABLE>
<S> <C> <C> <C> <C>
Number of Value of
Securities Underlying Unexercised
Shares Unexercised In-the-Money
Acquired Options/SARs at FY End Options
On Value (#) at FY End
Exercise Realized Exercisable/ Exercisable/
Name (#) ($) Unexercisable Unexercisable *
------------------------------ ---------------- ---------------- ------------------------- --------------------
Richard T. Sperberg -0- $ -0- 709,841/42,318 $ -0-/$ -0-
------------------------------ ---------------- ---------------- ------------------------- --------------------
Frank J. Mazanec -0- $ -0- 372,904/25,000 $ -0-/$ -0-
------------------------------ ---------------- ---------------- ------------------------- --------------------
Keith G. Davidson -0- $ -0- 344,264/33,333 $ -0-/$ -0-
------------------------------ ---------------- ---------------- ------------------------- --------------------
J. Bradford Hanson -0- $ -0- 66,667/33,333 $ -0-/$ -0-
------------------------------ ---------------- ---------------- ------------------------- --------------------
Roger C. Dower -0- $ -0- 100,000/-0- $ -0-/$ -0-

</TABLE>

* Based upon the average price of $0.095 as of June 30, 2000.

Report of the Compensation Committee on the Repricing of Options

As discussed under Proposal No. 1 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 employees of Onsite,
including executive officers who are employees of Onsite, at several times the
then current market price for Onsite's Class A Common Stock, the Compensation
Committee believed the purpose of the Plan was not adequately being served.
Thus, as an additional incentive to all employees of Onsite, including executive
officers who are employees of Onsite, on June 1, 2000, the Compensation
Committee approved a repricing of outstanding options held by current employees
of Onsite to the then current market price of Onsite's Class A Common Stock of
$0.0975 per share.

Compensation Committee:

/s/ CHARLES C. MCGETTIGAN
---------------------
Charles C. McGettigan

/s/ H. TATE HOLT
-----------------------
H. Tate Holt

<PAGE>20

Onsite 1993 Stock Option Plan

Please see discussion under PROPOSAL NO. 2 above.

Onsite 401(k) Plan

Since 1990, Onsite has maintained 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. Pursuant to a 1994 amendment to the 401(k) plan, Onsite provides
a matching contribution in Class A Common Stock 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).

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 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 months prior to sale. At the
end of Onsite's fiscal year, 681,637 shares of Onsite Class A Common Stock were
earned by all participants of the Onsite 401(k) plan, of which 198,661 shares in
the aggregate (all shares vested) have been earned by Messrs. Sperberg, Mazanec,
Davidson, Hanson, Dower, Sutcliffe and Aiello.

VOTING SECURITIES AND PRINCIPAL STOCKHOLDERS THEREOF

The following table sets forth certain information about the ownership of
Onsite's Class A Common Stock as of October 27, 2000, 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 named executive officer; and (iii) all directors and officers of
Onsite as a group. The table includes Class A Common Stock issuable upon the
exercise of Options or Warrants that are exercisable within 60 days. Except as
indicated in the footnotes to the table, the named persons 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
-------------------------------------------- -------------------- -------------------
Dominick J. Aiello 75,000 (1) *
1140 Bloomfield Avenue, Suite 200
West Caldwell, NJ 07006
-------------------------------------------- -------------------- -------------------
Keith G. Davidson 513,294 (2) 2.60
701 Palomar Airport Road, Suite 200
Carlsbad, CA 92009
-------------------------------------------- -------------------- -------------------

<PAGE>21

Class A Common Stock
------------------------------------------

Name and Address Amount of Percent of Class
of Beneficial Owner Ownership
-------------------------------------------- -------------------- -------------------
Roger C. Dower 137,500 (3) *
27 Worlds Fair Drive, First Floor
Somerset, NJ 08873
-------------------------------------------- -------------------- -------------------
Gruber & McBaine Capital Management., LLC 4,494,573 (4) 19.74
50 Osgood Place
San Francisco, CA 94133
-------------------------------------------- -------------------- -------------------
Jon D. Gruber 9,601,291 (5) 36.75
50 Osgood Place
San Francisco, CA 94133
-------------------------------------------- -------------------- -------------------
J. Bradford Hanson 179,267 (6) *
701 Palomar Airport Road, Suite 200
Carlsbad, CA 92009
-------------------------------------------- -------------------- -------------------
H. Tate Holt 372,882 (7) 1.75
701 Palomar Airport Road, Suite 200
Carlsbad, CA 92009
-------------------------------------------- -------------------- -------------------
Lagunitas Partners, L.P. 3,375,000 (8) 14.83
50 Osgood Place
San Francisco, CA 94133
-------------------------------------------- -------------------- -------------------
Thomas Lloyd-Butler 4,502,573 (9) 19.78
50 Osgood Place
San Francisco, CA 94133
-------------------------------------------- -------------------- -------------------
Frank J. Mazanec 915,361 (10) 4.60
Mazanec Family Trust
701 Palomar Airport Road, Suite 200
Carlsbad, CA 92009
-------------------------------------------- -------------------- -------------------
J. Patterson McBaine 9,580,691 (11) 36.67
50 Osgood Place
San Francisco, CA 94133
-------------------------------------------- -------------------- -------------------

<PAGE>22

Class A Common Stock
------------------------------------------

Name and Address Amount of Percent of Class
of Beneficial Owner Ownership
-------------------------------------------- -------------------- -------------------
Charles C. McGettigan 5,499,218 (12) 23.68
50 Osgood Place
San Francisco, CA 94133
-------------------------------------------- -------------------- -------------------
Proactive Investment Managers, L.P. 4,969,218 (13) 21.84
50 Osgood Place
San Francisco, CA 94133
-------------------------------------------- -------------------- -------------------
Proactive Partners, L.P. 4,829,383 (14) 21.30
50 Osgood Place
San Francisco, CA 94133
-------------------------------------------- -------------------- -------------------
Richard T. Sperberg 3,371,983 (15) 16.47
701 Palomar Airport Road, Suite 200
Carlsbad, CA 92009
-------------------------------------------- -------------------- -------------------
S. Lynn Sutcliffe 1,942,798 (16) 9.99
27 Worlds Fair Drive, First Floor
Somerset, NJ 08873
-------------------------------------------- -------------------- -------------------
SYCOM Enterprises, LLC 1,750,000 9.03
27 Worlds Fair Drive, First Floor
Somerset, NJ 08873
-------------------------------------------- -------------------- -------------------
Westar Capital, Inc. 7,770,100 (17) 34.33
818 South Kansas Street
Topeka, KS 66601
-------------------------------------------- -------------------- -------------------
Myron A. Wick III 4,969,218 (18) 21.84
50 Osgood Place
San Francisco, CA 94133
-------------------------------------------- -------------------- -------------------
All Directors and Officers as a Group (9) 13,390,412 (19) 51.84
-------------------------------------------- -------------------- -------------------

</TABLE>

(1) In August 1999 in connection with the private placement of shares of Series
E Convertible Preferred Stock to certain existing shareholders of Onsite,
certain current or former executive officers of Onsite, including Mr.
Aiello, entered into Salary Reduction Agreements pursuant to which they
agreed to reductions in salary and/or commissions owed (for a six month
period from August 1999 through January 2000) in exchange for shares of
Class A Common Stock and certain Warrants. The table reflects 50,000 shares
of Class A Common Stock issued to Mr. Aiello under the Salary Reduction
Agreement and 25,000 shares of Class A Common Stock that may be immediately

<PAGE>23

acquired upon the exercise of Warrants expiring August 13, 2009.

(2) In addition to 34,030 shares of Class A Common Stock over which Mr.
Davidson has sole voting and investment power (which number includes 30,600
shares held by Mr. Davidson's minor children), the table reflects 344,264
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), March 13, 2007 (100,000 shares), October 28, 2007 (40,000)
and April 1, 2008 (66,667). The table also reflects 90,000 shares of Class
A Common Stock and 45,000 shares of Class A Common Stock that may be
immediately acquired upon the exercise of Warrants expiring August 13, 2009
issued to Mr. Davidson under the Salary Reduction Agreement.

(3) Includes 100,000 shares of Class A Common Stock that may be immediately
acquired upon the exercise of Options expiring May 26, 2004. The table also
reflects the 25,000 shares of Class A Common Stock and 12,500 shares of
Class A Common Stock that may be immediately acquired upon the exercise of
Warrants expiring August 13, 2009 issued to Mr. Dower under the Salary
Reduction Agreement.

(4) Gruber & McBaine Capital Management, LLC ("Gruber & McBaine"), the
successor-in-interest to Gruber & McBaine Capital Management, Inc., a
California corporation, is an investment advisor and a general partner of
Lagunitas Partners, L.P. Consequently, Gruber & McBaine has or shares
voting or dispositive power over 3,369,573 shares of Class A Common Stock
(which number includes 2,250,000 shares of Class A Common Stock underlying
22,500 shares of Series E Convertible Preferred Stock) and 1,125,000 shares
of Class A Common Stock that may be immediately acquired upon the exercise
of Warrants expiring August 2, 2009. See also footnote (8).

(5) Mr. Gruber is a member of Gruber & McBaine Capital Management, LLC, which
is an investment advisor and a general partner of Lagunitas Partners, L.P.,
and is a general partner of Proactive Investment Managers, L.P., which also
is an investment advisor and general partner of Proactive Partners, L.P.,
and Fremont Proactive Partners, L.P. Consequently, in addition to 137,500
shares of Class A Common Stock over which Mr. Gruber has sole voting and
investment power (which number includes shares held by Mr. Gruber's family
members and foundations), Mr. Gruber also has or shares voting or
dispositive power over 6,978,791 shares of Class A Common Stock (which
number includes 4,250,000 shares of Class A Common Stock underlying 42,500
shares of Series E Convertible Preferred Stock) and 2,485,000 shares of
Class A Common Stock that may be immediately acquired upon the exercise of
Warrants expiring September 11, 2002, June 30, 2003, and August 2, 2009.
See also footnotes (8) and (14).

(6) Includes 100 shares of Class A Common Stock over which Mr. Hanson has sole
voting and dispositive power and 66,667 shares of Class A Common Stock that
may be immediately acquired upon the exercise of Options expiring October
30, 2008. The table also reflects the 75,000 shares of Class A Common Stock
and 37,500 shares of Class A Common Stock that may be immediately acquired
upon the exercise of Warrants expiring August 13, 2009 issued to Mr. Hanson
under the Salary Reduction Agreement.

(7) Includes 142,882 shares of Class A Common Stock over which Mr. Holt has
sole voting and dispositive power and 200,000 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), May 4, 2002 (25,000 shares), May 4, 2003
(25,000 shares), May 4, 2004 (25,000 shares), and May 4, 2005 (25,000
shares).

(8) Includes 2,250,000 shares of Class A Common Stock underlying 22,500 shares
of Series E Convertible Preferred Stock and 1,125,000 shares of Class A
Common Stock that may be immediately acquired upon the exercise of Warrants
expiring August 2, 2009, and over which Lagunitas Partners, L.P.
("Lagunitas") has sole voting and investment power.

<PAGE>24

(9) Mr. Lloyd-Butler is a member of Gruber & McBaine Capital Management, LLC,
an investment advisor and a general partner of Lagunitas Partners, L.P.
Consequently, in addition to the 8,000 shares of Class A Common Stock over
which he has sole voting and investment power, Mr. Lloyd-Butler has or
shares voting or dispositive power over 3,369,573 shares of Class A Common
Stock (which number includes 2,250,000 shares of Class A Common Stock
underlying 22,500 shares of Series E Convertible Preferred Stock) and
1,125,000 shares of Class A Common Stock that may be immediately acquired
upon the exercise of Warrants expiring August 2, 2009. See also footnote
(8).

(10) Includes 472,904 shares of Class A Common Stock that may be immediately
acquired upon the exercise of Options expiring November 20, 2005 (7,736
shares), January 25, 2006 (46,816 shares), May 22, 2006 (18,352 shares),
March 13, 2007 (250,000 shares), April 1, 2008 (50,000) and August 23, 2010
(100,000). Additionally, the table reflects (i) 142,751 shares of Class A
Common Stock over which Mr. Mazanec, as a trustee of the Mazanec Family
Trust, has or shares voting or dispositive power; and (ii) 90,000 shares of
Class A Common Stock and 45,000 shares of Class A Common Stock that may be
immediately acquired upon the exercise of Warrants expiring August 13, 2009
issued to Mr. Mazanec under the Salary Reduction Agreement.

The table also reflects 164,706 shares of Class A Common Stock that are
subject to an Agreement of Stock Purchase and Sale among Messrs. Mazanec,
Hector A. Esquer, William M. Gary and Sperberg. Messrs. Esquer, Gary and
Sperberg had entered into such Agreement whereby they 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 WEM into Onsite, with respect to the shares sold. The term
of this Agreement has expired as between Messrs. Gary and Mazanec, and thus
the table reflects all adjustments for shares that have vested and been
paid for in full, or returned to Mr. Gary.

(11) Mr. McBaine is a member of Gruber & McBaine Capital Management, LLC, an
investment advisor and a general partner of Lagunitas Partners, L.P., and
is a general partner of Proactive Investment Managers, L.P., also an
investment advisor and a general partner of Proactive Partners, L.P., and
Fremont Proactive Partners, L.P. Consequently, in addition to the 116,900
shares of Class A Common Stock over which he has sole voting and investment
power (which number includes shares held by Mr. McBaine's family members),
Mr. McBaine has or shares voting or dispositive power over 6,978,791 shares
of Class A Common Stock (which number includes 4,250,000 shares of Class A
Common Stock underlying 42,500 shares of Series E Convertible Preferred
Stock) and 2,485,000 shares of Class A Common Stock that may be immediately
acquired upon the exercise of Warrants expiring September 11, 2002, June
30, 2003, and August 2, 2009. See also footnotes (8) and (14).

(12) Includes Options to purchase 75,000, 25,000, 25,000, 25,000, 25,000, 25,000
and 25,000 shares of Class A Common Stock exercisable until January 25,
2001, July 13, 2001, April 23, 2002, July 13, 2002, July 13, 2003, July 13,
2004, and July 13, 2005, respectively. In addition to 305,000 shares of
Class A Common Stock in which Mr. McGettigan has sole voting and investment
power (which number includes 250,000 shares of Class A Common Stock
underlying 2,500 shares of Series E Convertible Preferred Stock), Mr.
McGettigan is a general partner of Proactive Investment Managers, L.P., an
investment advisor and a general partner of Proactive Partners, L.P., and
Fremont Proactive Partners, L.P., and is a general partner of McGettigan,
Wick & Co., Inc., and consequently has or shares voting or dispositive
power over 3,609,218 shares of Class A Common Stock (which number includes
2,250,000 shares of Class A Common Stock underlying 22,500 shares of Series
E Convertible Preferred Stock), and 1,360,000 shares of Class A Common
Stock that may be immediately acquired upon the exercise of Warrants
expiring September 11, 2002, June 30, 2003, and August 2, 2009. See also
footnote (14).

(13) Proactive Investment Managers, L.P. ("PIM"), 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 3,609,218
shares of Class A Common Stock (which number includes 2,000,000 shares of
Class A Common Stock underlying 20,000 shares of Series E Convertible
Preferred Stock) and 1,280,000 shares of Class A Common Stock that may be
immediately acquired upon the exercise of Warrants expiring September 11,

<PAGE>25

2002, June 30, 2003, and August 2, 2009. The table also reflects 80,000
shares of Class A Common Stock that may be immediately acquired upon the
exercise of Warrants expiring June 30, 2003, and over which PIM has sole
voting and investment power. See also footnote (14).

(14) In addition to 2,475,478 shares of Class A Common Stock over which
Proactive Partners, L.P. ("Proactive") has sole voting and investment power
(which number includes 2,000,000 shares of Class A Common Stock underlying
20,000 shares of Series E Convertible Preferred Stock), the table reflects
1,280,000 shares of Class A Common Stock that may be immediately acquired
upon the exercise of Warrants expiring September 11, 2002, June 30, 2003,
and August 2, 2009. The table also reflects 1,073,905 shares of Class A
Common Stock that are subject to the Stockholders Agreement among certain
stockholders of Onsite, including Proactive, and Westar Capital (the
"Stockholders Agreement").

(15) Includes 709,841 shares of Class A Common Stock that may be immediately
acquired upon the exercise of Options expiring November 20, 2005 (107,781
shares), January 25, 2006 (52,808 shares), May 22, 2006 (64,616 shares),
March 13, 2002 (250,000 shares), April 1, 2003 (84,636), and August 23,
2005 (150,000 shares), 325,988 shares of Class A Common Stock that may be
immediately acquired upon the exercise of Warrants expiring September 11,
2002, 526,370 shares over which Mr. Sperberg has sole voting and investment
power, 110,545 shares held by Mr. Sperberg's minor son, and 87,500 shares
of Class A Common Stock and 43,750 shares of Class A Common Stock that may
be immediately acquired upon the exercise of Warrants expiring August 13,
2009 issued to Mr. Sperberg under the Salary Reduction Agreement. The table
also reflects 1,216,097 shares of Class A Common Stock that are subject to
the Stockholders Agreement among certain stockholders of Onsite, including
Mr. Sperberg, and Westar Capital.

Additionally the table reflects 351,892 shares of Class A Common Stock that
are subject to an Agreement of Stock Purchase and Sale among Messrs.
Sperberg, Esquer, Gary and Mazanec. As previously disclosed, Messrs.
Sperberg, Esquer and Gary 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 WEM into Onsite, with respect to the
shares sold. As previously disclosed, the term of this Agreement has
expired as between Messrs. Gary and Mazanec.

(16) Mr. Sutcliffe is the majority shareholder of SSBKK, Inc., the sole member
of SYCOM LLC and of SYCOM Corporation, and consequently has or shares
voting or dispositive power over 1,750,000 shares of Class A Common Stock.
Additionally, the table reflects 128,532 shares of Class A Common Stock and
64,266 shares of Class A Common Stock that may be immediately acquired upon
the exercise of Warrants expiring August 13, 2009 issued to Mr. Sutcliffe
under the Salary Reduction Agreement.

(17) Includes the following securities that are subject to the Stockholders
Agreement among certain stockholders of Onsite and Westar Capital:
4,524,500 shares of Class A Common Stock, and 3,245,600 shares of Class A
Common Stock underlying 649,120 shares of Series C Convertible Preferred
Stock. The table does not reflect unpaid dividends of 32,031 shares of
Series C Convertible Preferred Stock.

(18) Mr. Wick is a general partner of Proactive Investment Managers, L.P., an
investment advisor and a general partner of Proactive Partners, L.P., and
Fremont Proactive Partners, L.P., and is a general partner of McGettigan,
Wick & Co., Inc., and consequently has or shares voting or dispositive
power over 3,609,218 shares of Class A Common Stock and 1,360,000 shares of
Class A Common Stock that may be immediately acquired upon the exercise of
Warrants expiring September 11, 2002, June 30, 2003, and August 2, 2009.
See also footnote (14).

(19) Includes the aggregate of ownership of Messrs. Aiello, Davidson, Dower,
Hanson, Holt, Mazanec, McGettigan, Sperberg and Sutcliffe as set forth in
footnotes (1), (2), (3), (6), (7), (10), (12), (15) and (16), and an
aggregate of 146,000 shares of Class A Common Stock held by other officers
and directors, 164,409 shares of Class A Common Stock that may be acquired
within the next 60 days upon the exercise of options held by other officers
and 351,892 shares of Class A Common Stock that are subject to a Stock
Purchase Agreement among Messrs. Esquer, Gary, Mazanec and Sperberg. For
purposes of calculating this footnote, the number of shares attributable to

<PAGE>26

Mr. Sperberg does not include the 351,892 shares that are subject to the
above Stock Purchase Agreement because these shares are counted as owned by
Messrs. Mazanec and Esquer.

* Less than one percent (1%).

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"). 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, 1999, through the end of the 2000 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 report (Form 4) covering one transaction
inadvertently was filed late by Mr. McGettigan; and (ii) one report (Form 5)
covering one transaction inadvertently was filed late by each of Messrs.
Sperberg, Mazanec, Davidson, Hanson, Dower, Sutcliffe and Aiello, and Audrey
Nelson Stubenberg. Additionally, Onsite has not received copies of a Form 5 from
five former officers and three former directors of Onsite.

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Onsite's Class A Common Stock currently is traded on the NASD Over-the-Counter
(OTC) Electronic Bulletin Board. The following table sets forth the high and low
prices per share of Class A Common Stock for the prior two fiscal years (1999
and 2000) by quarters. The following market quotation reflects inter-dealer
prices without retail mark-ups, markdowns or commissions, and may not represent
actual transactions.

---------------------- ------------- -------------
Quarter Ended High Low
---------------------- ------------- -------------

September 30, 1998 $1.25 $0.7812

December 31, 1998 $0.781 $0.4687

March 31, 1999 $0.9062 $0.50

June 30, 1999 $0.625 $0.3125

September 30, 1999 $0.45 $0.26

December 31, 1999 $0.33 $0.14

March 31, 2000 $0.58 $0.155

June 30, 2000 $0.285 $0.09

<PAGE>27

As of October 27, 2000, there were approximately 244 holders of record of
Onsite's Class A Common Stock.

Onsite has not paid any dividends on its Common Stock, nor does Onsite
anticipate paying dividends on its Common Stock in the foreseeable future.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

August 1999 Private Placement

In August 1999, Onsite completed a private placement of shares of Series E
Convertible Preferred Stock and the issuance of warrants to purchase shares of
Onsite Class A Common Stock with Mr. McGettigan, the Chairman of the Board, and
other related investors, including Proactive and Lagunitas Partners, L.P.,
current shareholders of Onsite. Terms of the placement include the issuance of
50,000 shares of Series E Convertible Preferred Stock (which is convertible
initially into 5,000,000 shares of Class A Common Stock) in exchange for
$1,000,000, warrants to purchase 1,250,000 shares of Onsite Class A Common Stock
at $0.50 per share, and warrants to purchase 1,250,000 shares of Onsite Class A
Common Stock at $0.75 per share. Mr. McGettigan is a general partner of
Proactive, a shareholder of Onsite, and, as stated above, is the Chairman of the
Board of Directors of Onsite.

OTHER MATTERS

Relationship with Independent Accountants

Hein + Associates, LLP ("Hein") has served as Onsite's independent accountants
since July 1995. For the fiscal year 2000 the Board of Directors has continued
to retain, and expects to continue retain, Hein; however, the Board may seek
competitive bids for its annual audit. A representative of Hein may be present
at the Meeting to be available to respond to appropriate questions from
stockholders.

Other Matters

The Board of Directors of Onsite knows of no other matters that may be or are
likely to be presented at the Meeting. However, if additional matters are
presented at the Meeting, the persons named in the enclosed proxy will vote such
proxy in accordance with their best judgment on such matters pursuant to the
discretionary authority granted to them by the terms and conditions of the
proxy.

Stockholder Proposals

Stockholder proposals to be included in Onsite's Proxy Statement and proxy card
for Onsite's next annual meeting must meet the requirements of Rule 14a-8
promulgated by the SEC, and must be received by Onsite no later than June 25,
2001.

<PAGE>28

Additional Information

A copy of Onsite's Form 10-KSB for fiscal year ended June 30, 2000, containing
Onsite's 2000 audited financial statements, including the report of its
independent public accountants, accompanies this Proxy Statement. Stockholders,
however, may obtain additional copies by written request addressed to Onsite's
Secretary, Audrey Nelson Stubenberg.

ONSITE ENERGY CORPORATION

By Order of the Board of Directors

Audrey Nelson Stubenberg
Secretary

Carlsbad, CA
December 4, 2000

<PAGE>A-1

Appendix A

ONSITE ENERGY CORPORATION
AMENDED AND RESTATED
1993 STOCK OPTION PLAN
(amended and restated as of January 11, 2001)

1. Purpose; Definitions.

(a) Purpose. The purpose of the Plan is to attract, retain and motivate
officers, employees, consultants and directors of the Company, or a Subsidiary,
by giving them the opportunity to acquire Stock ownership in the Company.

(b) Definitions. For purposes of the Plan, the following terms have the
following meanings:

(i) "Administrator" means the Compensation Committee referred to in
Section 4 in its capacity as administrator of the Plan in accordance with
Section 4.

(ii) "Board" means the Board of Directors of the Company.

(iii)"Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.

(iv) "Commission" means the Securities and Exchange Commission, and
any successor agency.

(v) "Company" means Onsite Energy Corporation, a Delaware corporation.

(vi) "Director" shall mean a member of the Board.

(vii) "Disinterested Person" has the meaning set forth in Rule 16b-3
under the Exchange Act, and any successor definition adopted by the
Commission.

(viii) "Effective Date" has the meaning set forth in Section 2.

(ix) "Eligible Person" shall mean in the case of the grant of an
Incentive Stock Option, all employees of the Company or a Subsidiary, and
in the case of a Nonqualified Stock Option, any director, officer or
employee of the Company or other person who, in the opinion of the Board,
is rendering valuable services to the Company, including without
limitation, an independent contractor, outside consultant or advisor to the
Company.

(x) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.

(xi) "Fair Market Value" shall mean (i) if the stock is listed or
admitted to trade on a national securities exchange, the closing price of
the stock on the Composite Tape, as published in the Western Edition of the
Wall Street Journal, of the principal national securities exchange on which
the stock is so listed or admitted to trade, on such date, or, if there is
no trading of the stock on such date, then the closing price of the stock
as quoted on such Composite Tape on the next preceding date on which there
was trading in such shares; (ii) if the stock is not listed or admitted to

<PAGE>A-2

trade on a national securities exchange, the last price for the stock on
such date, as furnished by the National Association of Securities Dealers,
Inc. ("NASD") through the NASDAQ National Market Reporting System or a
similar organization if the NASD is no longer reporting such information;
(iii) if the stock is not reported on the National Market Reporting System,
the mean between the closing bid and asked price for the stock on such
date, as furnished by the NASD; and (iv) if the stock is not reported on
the National Market Reporting System and if bid and asked prices for the
stock are not furnished by the NASD or a similar organization, the values
established by the Administrator for purposes of granting options under the
Plan.

(xii) "Grant Date" means the date of grant of any Option.

(xiii) "Incentive Stock Option" shall mean an Option that is an option
within the meaning of Section 422 of the Code, the award of which contains
such provisions as are necessary to comply with that section.

(xiv) "Nonqualified Stock Option" shall mean an Option that is
designated a Nonqualified Stock Option.

(xv) "Officer" shall mean an officer of the Company and an officer who
is subject to Section 16 of the Exchange Act.

(xvi) "Option" shall mean an option to purchase Stock under this Plan,
and shall be designated by the Committee as an Incentive Stock Option or a
Nonqualified Stock Option.

(xvii) "Option Agreement" means the written option agreement covering
an Option.

(xviii) "Optionee" means the holder of an option.

(xix) "Plan" means this Onsite Energy Corporation 1993 Stock Option
Plan, as amended from time to time.

(xx) "Rule 16b-3" means Rule 16b-3 under Section 16(b) of the Exchange
Act, as amended from time to time, and any successor rule.

(xxi) "Stock" means the Class A Common Stock, par value $0.001, of the
Company, and any successor entity.

(xxii) "Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if, at the time of granting of the
Option, each of the corporations other than the last corporation in the
unbroken chain owns stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.

(xxiii) "Tax Date" means the date defined in Section 7.

(xxiv) "Vesting Date" means the date on which an Option becomes wholly
or partially exercisable.

2. Effective Date; Term of Plan. The Effective Date of this Plan shall be
February 14, 1994, the date of shareholder approval of the same, which approval
was obtained within twelve (12) months of the date of Board approval of this
Plan. This Plan, but not Options already granted, shall terminate automatically
ten (10) years after its adoption by the Board, unless terminated earlier by the
Board under Section 13. No Options shall be granted after termination of this

<PAGE>A-3

Plan but all Options granted prior to termination shall remain in effect in
accordance with their terms.

3. Number and Source of Shares of Stock Subject to the Plan. Subject to the
provisions of Section 8, the total number of shares of Stock with respect to
which Options may be granted under this Plan is 3,900,000 shares of Stock. The
shares of Stock covered by any canceled, expired or terminated Option or the
unexercised portion thereof shall become available again for grant under this
Plan. The shares of Stock to be issued hereunder upon exercise of an Option may
consist of authorized and unissued shares or treasury shares.

4. Administration of the Plan. This Plan shall be administered by a committee
of at least two (2) members of the Board to which administration of this Plan is
delegated by the Board, all of whom shall be Disinterested Persons (the
"Compensation Committee"). The "Administrator" shall mean the "Compensation
Committee" referred to in this Section 4 in its capacity as administrator of the
Plan in accordance with this Section 4. The Administrator may delegate
nondiscretionary administrative duties to such employees of the Company, or a
Subsidiary, as it deems proper.

Subject to the express provisions of this Plan, the Administrator shall
have the authority to construe and interpret this Plan and any agreements
defining the rights and obligations of the Company and Optionees under this
Plan, to further define the terms used in this Plan, to prescribe, amend and
rescind rules and regulations relating to the administration of this Plan, to
determine the duration and purposes of leaves of absence which may be granted to
Optionees without constituting a termination of their employment for purposes of
this Plan and to make all other determinations necessary or advisable for the
administration of this Plan.

Any decision or action of the Administrator in connection with this Plan or
Options granted or shares of Stock purchased under this Plan shall be final and
binding. The Administrator shall not be liable for any division, action or
omission respecting this Plan, or any Options granted or shares of Stock sold
under this Plan. The Board at any time may abolish the Compensation Committee
and revest in the Board the administration of the Plan; provided that all
members of the Board at the time of such action must be "Disinterested Persons."

5. Grant of Options; Terms and Conditions of Grant.

(a) Grant of Options. One (1) or more Options may be granted to any
Eligible Person. Subject to the express provisions of the Plan, the
Administrator (or the Board of Directors as set forth in subsection (ii) below)
shall determine from the Eligible Persons those individuals to whom Options
under the Plan shall be granted. Subject to the express provisions of the Plan,
each Option so granted shall be designated by the Administrator (or the Board of
Directors as set forth in subsection (ii) below) as either a Nonqualified Stock
Option or an Incentive Stock Option.

Subject to the express provisions of the Plan, the Administrator (or the
Board of Directors as set forth in subsection (ii) below) shall specify the
Grant Date, the number of shares of Stock covered by the Option, the exercise
price, and the terms and conditions for exercise of the Options. If the
Administrator (or the Board of Directors as set forth in subsection (ii) below)
fails to specify the Grant Date, the Grant Date shall be the date of the action
taken by the Administrator (or the Board of Directors as set forth in subsection
(ii) below) to grant the Option. As soon as practicable after the Grant Date,
the Company will provide the Optionee with a written Option Agreement in the
form approved by the Administrator (or the Board of Directors as set forth in
subsection (ii) below), which sets out the Grant Date, the number of shares of
Stock covered by the Option, the exercise price and the terms and conditions for
exercise of the Option.

<PAGE>A-4

(i) Non-discretionary. Effective as of July 13, 1993, a non-employee
director of the Company automatically shall be granted Options to purchase
twenty-five thousand (25,000) shares of Stock on (i) the date he or she
becomes a director; and (ii) each anniversary date of the date he or she
became a director. The exercise price of such Options shall be the Fair
Market Value on such date. The Options shall have a ten (10) year term.

(ii) Discretionary. The Administrator may, in its absolute discretion,
grant Options under this Plan at any time and from time to time before the
expiration of ten (10) years from the Effective Date to officers,
employees, consultants and directors of the Company and its Subsidiaries.
Additionally, the Board of Directors may, in its absolute discretion, grant
Options under this Plan at any time and from time to time before the
expiration of ten (10) years from the Effective Date to any non-employee
director of the Company and its Subsidiaries.

(b) General Terms and Conditions. Except as otherwise provided herein, the
Options shall be subject to the following terms and conditions and such other
terms and conditions not inconsistent with this Plan as the Administrator may
impose:

(i) Exercise of Option. In order to exercise all or any portion of any
Option granted under this Plan, an Optionee must remain as an officer,
employee, consultant or director of the Company, or a Subsidiary, until the
Vesting Date. The Option shall be exercisable on or after each Vesting Date
in accordance with the terms set forth in the Option Agreement.

(ii) Option Term. Each Option and all rights or obligations thereunder
shall expire on such date as shall be determined by the Administrator (or
the Board of Directors as set forth in subsection (a) (ii) above), but not
later than ten (10) years after the grant of the Option (five (5) years in
the case of an Incentive Stock Option when the Optionee owns more than ten
percent (10%) of the total combined voting power of all classes of stock of
the Company), and shall be subject to earlier termination as hereinafter
provided.

(iii) Exercise Price. The Exercise Price of any Option shall be
determined by the Administrator (or the Board of Directors as set forth in
subsection (a) (ii) above), but in the case of Incentive Stock Options
shall not be less than one hundred percent (100%) (one hundred ten percent
(110%) in the case of an Optionee who owns more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company) of
the Fair Market Value of the Common Stock on the date the Incentive Stock
Option is granted.

(iv) Method of Exercise. To the extent the right to purchase shares of
Stock has accrued, Options may be exercised, in whole or in part, from time
to time in accordance with their terms by written notice from the Optionee
to the Company stating the number of shares of Stock with respect to which
the Option is being exercised and accompanied by payment in full of the
exercise price. Payment may be made in cash, certified check or, at the
absolute discretion of the Administrator, by non-certified check.

(v) Restrictions on Stock; Option Agreement. At the time it grants
Options under this Plan, the Company may retain, for itself or others,
rights to repurchase the shares of Stock acquired under the Option or
impose other restrictions on such shares. The terms and conditions of any
such rights or other restrictions shall be set forth in the Option
Agreement evidencing the Option. No Option shall be exercisable until after
execution of the Option Agreement by the Company and the Optionee.

(vi) Nonassignability of Option Rights. No Option shall be
transferable other than by will or by the laws of descent and distribution.
During the lifetime of an Optionee, only the Optionee may exercise an
Option.

<PAGE>A-5

(vii) Exercise After Certain Events.

(1) Termination of Employment/Consulting/Directorship. If for any
reason other than permanent and total disability or death (as defined
below) an Optionee ceases to be employed by or to be a consultant or
director of the Company, or a Subsidiary, Options held at the date of
such termination (to the extent then exercisable) may be exercised, in
whole or in part, at any time within three (3) months after the date
of such termination, or such lesser period specified in the Option
Agreement, or such longer period as specified by the Administrator
(but in no event after the earlier of (i) the expiration date of the
Option as set forth in the Option Agreement; and (ii) ten (10) years
from the Grant Date).

If an Optionee granted an Incentive Stock Option terminates
employment but continues as a consultant, advisor or in a similar
capacity to the Company or a Subsidiary, the Optionee need not
exercise the Option within three (3) months of termination of
employment but shall be entitled to exercise within three (3) months
of termination of services to the Company or the Subsidiary (one (1)
year in the event of permanent disability or death), or such longer
period as specified by the Administrator. However, if the Optionee
does not exercise within three (3) months of termination of
employment, the Option will not qualify as an Incentive Stock Option.

(2) Permanent Disability and Death. If an Optionee becomes
permanently and totally disabled (within the meaning of Section
22(e)(3) of the Code), or dies while employed by the Company, or while
acting as an officer, consultant or director of the Company, or a
Subsidiary (or if the Optionee dies within the period that the Option
remains exercisable after termination of employment or affiliation),
Options then held (to the extent then exercisable) may be exercised by
the Optionee, the Optionee's personal representative, or by the person
to whom the Option is transferred by will or the laws of descent and
distribution, in whole or in part, at any time within one (1) year
after the disability or death or any lesser period specified in the
Option Agreement (but in no event after the earlier of (i) the
expiration date of the Option as set forth in the Option Agreement;
and (ii) ten (10) years from the Grant Date).

(3) Compliance with Securities Laws. The Company shall not be
obligated to issue any shares of Stock upon exercise of an Option
unless such shares are at that time effectively registered or exempt
from registration under the federal securities laws and the offer and
sale of the shares of Stock are otherwise in compliance with all
applicable securities laws. The Company intends to register the shares
of Stock under the federal securities laws and to take whatever other
steps may be necessary to enable the shares of Stock to be offered and
sold under federal or other securities laws. Upon exercising all or
any portion of an Option, an Optionee may be required to furnish
representations or undertakings deemed appropriate by the Company to
enable the offer and sale of the shares of Stock or subsequent
transfers of any interest in such shares to comply with applicable
securities laws. Evidences of ownership of shares of the Stock
acquired upon exercise of Options shall bear any legend required by,
or useful for purposes of compliance with, applicable securities laws,
this Plan or the Option Agreement evidencing the Option.

6. Limitations on Grant of Incentive Stock Options.

(a) The aggregate Fair Market Value (determined as of the Grant Date) of
the Stock for which Incentive Stock Options may first become exercisable by any
Optionee during any calendar year under this Plan, together with that of Stock
subject to Incentive Stock Options first exercisable (other than as a result of
acceleration pursuant to Section 9(a)) by such Optionee under any other plan of
the Company or any Subsidiary, shall not exceed One Hundred Thousand Dollars
($100,000).

(b) There shall be imposed in the Option Agreement relating to Incentive
Stock Options such terms and conditions as are required in order that the Option
be an "incentive stock option" as that term is defined in Section 422 of the
Code.

<PAGE>A-6

(c) No Incentive Stock Option may be granted to any person who, at the time
the Incentive Stock Option is granted, owns shares of outstanding Stock
possessing more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company, unless the exercise price of such Option is at
least one hundred ten percent (110%) of the Fair Market Value of the stock
subject to the Option and such Option by its terms is not exercisable after the
expiration of five (5) years from the Grant Date.

(d) No Incentive Stock Option may be granted to any person who is not an
employee of the Company.

7. Payment of Taxes. Upon the disposition by an Optionee or other person of
shares of an Option prior to satisfaction of the holding period requirements of
Section 422 of the Code, or upon the exercise of a Nonqualified Stock Option,
the Company shall have the right to require such Optionee or such other person
to pay by cash, or check payable to the Company, the amount of any taxes that
the Company may be required to withhold with respect to such transactions. Any
such payment must be made promptly when the amount of such obligation becomes
determinable (the "Tax Date"). The Administrator may, in lieu of such cash
payment, withhold that number of shares of the Stock underlying the Option
sufficient to satisfy such withholding.

8. Adjustment for Changes in Capitalization. The existence of outstanding
Options shall not affect the Company's right to effect adjustments,
recapitalizations, reorganizations or other changes in its or any other
corporation's capital structure or business, any merger or consolidation, any
issuance of bonds, debentures, preferred or prior preference stock ahead of or
affecting the Stock, the dissolution or liquidation of the Company or any other
corporation's assets or business or any other corporate act whether similar to
the events described above or otherwise. Subject to Section 9, if the
outstanding shares of the Stock are increased or decreased in number or changed
into or exchanged for a different number or kind of securities of the Company or
any other corporation by reason of a recapitalization, reclassification, stock
split, combination of shares, stock dividend or other event, an appropriate
adjustment of the number and kind of securities with respect to which Options
may be granted under this Plan, the number and kind of securities as to which
outstanding Options may be exercised, and the exercise price at which
outstanding Options may be exercised will be made.

9. Dissolution, Liquidation, Merger.

(a) Company Not The Survivor. In the event of a dissolution or liquidation
of the Company, a merger, consolidation, combination or reorganization in which
the Company is not the surviving corporation, or a sale of substantially all of
the assets of the Company (as determined in the sole discretion of the Board of
Directors), the Administrator, in its absolute discretion, may cancel each
outstanding Option upon payment in cash to the Optionee of the amount by which
any cash and the fair market value of any other property that the Optionee would
have received as consideration for the shares of Stock covered by the Option if
the Option had been exercised before such liquidation, dissolution, merger,
consolidation, combination, reorganization or sale exceeds the exercise price of
the Option. In addition to the foregoing, in the event of a dissolution or
liquidation of the Company, or a merger, consolidation, combination or
reorganization, in which the Company is not the surviving corporation, the
Administrator, in its absolute discretion, may accelerate the time within which
each outstanding Option may be exercised.

(b) Company is the Survivor. In the event of a merger, consolidation,
combination or reorganization in which the Company is the surviving corporation,
the Board of Directors shall determine the appropriate adjustment of the number
and kind of securities with respect to which outstanding Options may be
exercised, and the exercise price at which outstanding Options may be exercised.
The Board of Directors shall determine, in its sole and absolute discretion,
when the Company shall be deemed to survive for purposes of this Plan.

<PAGE>A-7

10. Successor Corporations. In the event of a merger in which the Company is
not the surviving corporation, the successor entity may assume the obligations
under all outstanding Options.

11. Suspension and Termination. In the event the Board or the Administrator
reasonably believes an Optionee has committed an act of misconduct specified
below, the Administrator may suspend the Optionee's right to exercise any Option
granted hereunder pending final determination by the Board or the Administrator.
If the Administrator determines that an Optionee has committed an act of
embezzlement, fraud, breach of fiduciary duty or deliberate disregard of the
Company rules resulting in loss, damage or injury to the Company, or if an
Optionee makes an unauthorized disclosure of any Company trade secret or
confidential information, engages in any conduct constituting unfair
competition, induces any Company customer to breach a contract with the Company
or induces any principal for whom the Company acts as agent to terminate such
agency relationship, neither the Optionee nor his estate shall be entitled to
exercise any Option hereunder. In making such determination, the Board or the
Administrator shall act fairly and in good faith, and shall give the Optionee an
opportunity to appear and present evidence on the Optionee's behalf. The
determination of the Board or the Administrator shall be final and conclusive.

12. No Rights as Shareholder or to Continued Employment. An Optionee shall have
no rights as a shareholder with respect to any shares of Stock covered by an
Option. An Optionee shall have no right to vote any shares of Stock, or to
receive distributions of dividends or any assets or proceeds from the sale of
Company assets upon liquidation, until such Optionee has effectively exercised
the Option and fully paid for such shares of Stock. Subject to Sections 8 and 9,
no adjustment shall be made for dividends or other rights for which the record
date is prior to the date title to the shares of Stock has been acquired by the
Optionee. The grant of an Option shall in no way be construed so as to confer on
any Optionee the rights to continued employment by the Company, or a Subsidiary.

13. Termination; Amendment. The Board may amend, suspend or terminate this Plan
at any time and for any reason, but no amendment, suspension or termination
shall be made that would impair the right of any person under any outstanding
Options without such person's consent not unreasonably withheld; provided,
further, that any amendment that (i) increases the number of shares of Stock
available for issuance under this Plan (except as provided in Sections 8 and 9);
(ii) materially changes the class of persons who are eligible for the grant of
Options; or (iii) materially increases the benefits accruing to participants
under this Plan, shall be subject to the approval of the Company's shareholders;
provided, further, however, that the Board may amend this Plan at any time as
necessary to comply with applicable federal and state securities laws, rules and
regulation even if such amendment otherwise would require shareholder approval
under subsections (ii) and/or (iii) hereof. Shareholder approval shall not be
required for any other amendment of this Plan.

14. Governing Law. This Plan and the rights of all persons under this Plan shall
be construed in accordance with and under applicable provisions of the laws of
the State of Delaware.

<PAGE>B-1

Appendix B

ONSITE ENERGY CORPORATION
(a Delaware corporation)

FORM OF
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION

RESOLVED: That the Certificate of Incorporation of the Corporation be
amended by changing ARTICLE IV so that, as amended, this Article shall read
in its entirety as follows:

ARTICLE IV

The aggregate number of shares which the Corporation shall have the
authority to issue is forty million (40,000,000) of which thirty-seven
million nine hundred ninety-nine thousand (37,999,000) shares will be Class
A Common Stock, par value $.001 per share, one thousand (1,000) shares
shall be Class B Common Stock, par value $.001 per share, and two million
(2,000,000) shares will be Preferred Stock, par value $.001.

The Preferred Stock may be issued in any number of series, as determined by
the Board of Directors. The Board may, by resolution, fix the designation
and number of shares of any such series, and may determine, alter or revoke
the rights, including voting rights, preferences, privileges and
restrictions pertaining to any wholly unissued series. The Board may
thereafter in the same manner increase or decrease the number of shares of
any such series (but not below the number of shares of that series then
outstanding).

<PAGE>

Class A Common Stock PROXY

ONSITE ENERGY CORPORATION
2000 Annual Meeting of Stockholders To Be Held January 11, 2001
This proxy is solicited on behalf of the Board of Directors

Revoking any such prior appointment, the undersigned, a stockholder of Onsite
Energy Corporation ("Onsite"), hereby appoints Charles C. McGettigan and Richard
T. Sperberg, and each of them (collectively, the "Proxies"), attorneys and
agents of the undersigned, with full power of substitution, to vote all shares
of the Class A Common Stock of the undersigned in Onsite at the 2000 Annual
Meeting of Stockholders of Onsite to be held at the Grand Pacific Palisades
Resort, 5805 Armada Drive, Carlsbad, CA 92009, on January 11, 2001, at 8:00 a.m.
(Pacific Standard Time), and at any adjournments thereof, as fully and
effectually as the undersigned could do if personally present and voting, hereby
approving, ratifying and confirming all that the Proxies or their substitutes
may lawfully do in place of the undersigned as indicated below. In their
discretion, the Proxies also are authorized to vote upon such other matters as
may properly come before the meeting.

This proxy, when properly executed, will be voted as directed. If no direction
is indicated for a proposal, this proxy will be voted FOR Proposal Nos. 1, 2 and
3.

1. Election of Directors.

FOR all nominees listed below _____ WITHOUT AUTHORITY ____
(except as marked to (to vote for all nominees below)
the contrary below)

(INSTRUCTIONS: To withhold authority to vote for any individual nominee, strike
a line through the nominee's name in the list below.)

H. Tate Holt Frank J. Mazanec Charles C. McGettigan Richard T. Sperberg

2. Proposal to approve an amendment to the Onsite Energy Corporation 1993 Stock
Option Plan increasing the number of shares available for grant under the Plan
and increasing the term of non-discretionary options granted to non-employee
directors.

FOR AGAINST ABSTAIN

3. Proposal to approve an amendment to Onsite's Certificate of Incorporation to
increase the authorized number of shares available for issuance by Onsite.

FOR AGAINST ABSTAIN

4. Upon any other matters that may properly come before the meeting or any
adjournments thereof.

FOR AGAINST ABSTAIN

Please sign exactly as name appears below.

Dated: , 200__

---------------------------------
Signature

When shares are held by joint tenants both should sign. When
signing as attorney, executor, administrator, trustee or
guardian, please give full title as such. If a corporation,
please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in
partnership name by authorized person.

Please mark, sign, date and return the proxy card promptly using the enclosed
envelope.

<PAGE>

Series C Convertible Preferred Stock PROXY

ONSITE ENERGY CORPORATION
2000 Annual Meeting of Stockholders To Be Held January 11, 2001
This proxy is solicited on behalf of the Board of Directors

Revoking any such prior appointment, the undersigned, a stockholder of Onsite
Energy Corporation ("Onsite"), hereby appoints Charles C. McGettigan and Richard
T. Sperberg, and each of them (collectively, the "Proxies"), attorneys and
agents of the undersigned, with full power of substitution, to vote all shares
of the Series C Convertible Preferred Stock of the undersigned in Onsite at the
2000 Annual Meeting of Stockholders of Onsite to be held at the Grand Pacific
Palisades Resort, 5805 Armada Drive, Carlsbad, CA 92009, on January 11, 2001, at
8:00 a.m. (Pacific Standard Time), and at any adjournments thereof, as fully and
effectually as the undersigned could do if personally present and voting, hereby
approving, ratifying and confirming all that the Proxies or their substitutes
may lawfully do in place of the undersigned as indicated below. In their
discretion, the Proxies also are authorized to vote upon such other matters as
may properly come before the meeting.

This proxy, when properly executed, will be voted as directed. If no direction
is indicated for a proposal, this proxy will be voted FOR Proposal Nos. 1, 2 and
3.

1. Election of Directors.

FOR all nominees listed below _____ WITHOUT AUTHORITY ____
(except as marked to (to vote for all nominees below)
the contrary below)

(INSTRUCTIONS: To withhold authority to vote for any individual nominee, strike
a line through the nominee's name in the list below.)

H. Tate Holt Frank J. Mazanec Charles C. McGettigan Richard T. Sperberg

FOR AGAINST ABSTAIN

3. Proposal to approve an amendment to Onsite's Certificate of Incorporation to
increase the authorized number of shares available for issuance by Onsite.

FOR AGAINST ABSTAIN

4. Upon any other matters that may properly come before the meeting or any
adjournments thereof.

FOR AGAINST ABSTAIN

Please sign exactly as name appears below.

Dated: , 200__

---------------------------------
Signature

Please mark, sign, date and return the proxy card promptly using the enclosed
envelope.

<PAGE>

Series E Convertible Preferred Stock PROXY

ONSITE ENERGY CORPORATION 2000
Annual Meeting of Stockholders To Be Held January 11, 2001
This proxy is solicited on behalf of the Board of Directors

Revoking any such prior appointment, the undersigned, a stockholder of Onsite
Energy Corporation ("Onsite"), hereby appoints Charles C. McGettigan and Richard
T. Sperberg, and each of them (collectively, the "Proxies"), attorneys and
agents of the undersigned, with full power of substitution, to vote all shares
of the Series E Convertible Preferred Stock of the undersigned in Onsite at the
2000 Annual Meeting of Stockholders of Onsite to be held at the Grand Pacific
Palisades Resort, 5805 Armada Drive, Carlsbad, CA 92009, on January 11, 2001, at
8:00 a.m. (Pacific Standard Time), and at any adjournments thereof, as fully and
effectually as the undersigned could do if personally present and voting, hereby
approving, ratifying and confirming all that the Proxies or their substitutes
may lawfully do in place of the undersigned as indicated below. In their
discretion, the Proxies also are authorized to vote upon such other matters as
may properly come before the meeting.

This proxy, when properly executed, will be voted as directed. If no direction
is indicated for a proposal, this proxy will be voted FOR Proposal Nos. 1, 2 and
3.

1. Election of Directors.

FOR all nominees listed below _____ WITHOUT AUTHORITY ____
(except as marked to (to vote for all nominees below)
the contrary below)

(INSTRUCTIONS: To withhold authority to vote for any individual nominee, strike
a line through the nominee's name in the list below.)

H. Tate Holt Frank J. Mazanec Charles C. McGettigan Richard T. Sperberg

FOR AGAINST ABSTAIN

3. Proposal to approve an amendment to Onsite's Certificate of Incorporation to
increase the authorized number of shares available for issuance by Onsite.

FOR AGAINST ABSTAIN

4. Upon any other matters that may properly come before the meeting or any
adjournments thereof.

FOR AGAINST ABSTAIN

Please sign exactly as name appears below.

Dated: , 200__

---------------------------------
Signature

Please mark, sign, date and return the proxy card promptly using the enclosed
envelope.