SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ALANCO ENVIRONMENTAL RESOURCES CORPORATION
------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
ARIZONA 86-0220694
------------------------ ------------------------
(State of Incorporation) (I.R.S. Employer ID No.)
15900 N. 78th Street, Suite 101, Scottsdale, Arizona 85260
-------------------------------------------------------------
(Address of Principal Offices)
Alanco Environmental Resources Corporation
1998 Robert R. Kauffman Stock Option Agreement
&
Alanco Environmental Resources Corporation
1998 John A. Carlson Stock Option Agreement
&
Alanco Environmental Resources Corporation
1996 Directors and Officers
Stock Option Plan
--------------------------------------------
(Full Title of the Plans)
Cynthia L. Castellano
Alanco Environmental Resources Corporation
15900 N. 78th Street, Suite 101
Scottsdale, AZ 85260
---------------------------------------------
(Name and address of Agent for Service)
(602) 607-1010
-----------------------------------------------------------
(Telephone number, including area code of Agent for Service)
CALCULATION OF REGISTRATION FEE
Title of Amount of Max. Off. Maximum Amount of
Securities Securities Price Per Aggregate Registration
Registered Registered Share Offering Price Fee
- ---------------- ---------- ------- ---------- ----------
Common Stock (1) 67,500 $1.00 $67,500 $19.91
Common Stock (2) 1,100,000 $0.469 (3) $515,900 $152.19
---------
$172.10
(1) Issuable upon the exercise of Options granted pursuant to the 1996
Directors and Officers Stock Option Plan.
(2) Issuable upon the exercise of Options granted pursuant to the 1998 Robert
R. Kauffman Stock Option Agreement and the 1998 John A. Carlson Stock
Option Agreement.
(3) Estimated price in accordance with Rule 457(h) and based upon the last
reported sale on the Nasdaq SmallCap Market on October 15, 1998.<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.
The documents containing the information related to the Alanco
Environmental Resources Corporation 1998 Robert R. Kauffman Stock Option
Agreement, the Alanco Environmental Resources Corporation 1998 John A. Carlson
Stock Option Agreement, and the 67,500 shares of common stock underlying
certain options granted under the Alanco Environmental Resources Corporation
1996 Directors and Officers Stock Option Plan which is being filed as part of
this Registration Statement (the "Registration Statement") and documents
incorporated by reference in response to Item 3 of Part II of this Registration
Statement, which taken together constitute a prospectus that meets the
requirements of Section 10(a) of the Securities Act of 1933 (the "Securities
Act") will be sent or given to participants by the Registrant as specified by
Rule 428(b)(1) of the Securities Act.
Item 2. Registrant Information and Employee Plan Annual Information.
As required by this Item, the Registrant shall provide to participants a
written statement advising them of the availability without charge, upon
written or oral request, of documents incorporated by reference in Item 3 of
Part II hereof and of documents required to be delivered pursuant to Rule
428(b) under the Securities Act. The statement shall include the address
listing the title or department and telephone number to which the request is to
be directed.
Part II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The Registrant incorporates the following documents filed with the
Securities and Exchange Commission by reference in this Registration Statement:
(a) The Registrant's Annual Report on Form 10-K for the fiscal year ended
June 30, 1998.
(b) The Registrant's Definitive Proxy Statement filed October 13, 1998.
(c) All other documents filed by Registrant after the date of this
Registration Statement under Section 13(a), 13(c), 14 and 15(d) of the
Securities Exchange Act of 1934, (the Exchange Act) since the end of the fiscal
year covered by the annual report referred to in (a) above.<PAGE>
Item 4. Description of Securities: The Registrant's no par value common stock
is listed for trading on the NASDAQ System under the symbol _ ALAN_ .
Each share of common stock is entitled to its pro rata share of any
dividends declared by the Registrant. Each share of common stock is
entitled to one vote on all matters submitted to the stockholders.
Cumulative voting for the election of directors is permitted. There
are no other liquidation rights, preemptive rights or other rights
attached to the common stock and nor is the common stock subject to
any call, assessment or liability of the Registrant.
Item 5. Interests of Named Experts and Counsel: Not applicable.
Item 6. Indemnification of Officers and Directors.
The Registrant's Articles of Incorporation and Bylaws and the laws of the
State of Arizona provide for indemnification of directors and officers of the
Registrant who are indemnified generally against expenses actually and
reasonably incurred in connection with proceedings, whether civil or criminal,
provided that it is determined that they acted in good faith, were not found
guilty, and, in any criminal matter, had reasonable cause to believe that their
conduct was not unlawful.
Item 7. Exemption from Registration Claimed: Not Applicable
Item 8. Exhibits.
EXHIBIT INDEX
Exhibit Page or
Number Description Method of Filing
---------- -------------------------------- -----------------
4.1 1998 Robert R. Kauffman Stock Filed herewith
Option Agreement
4.2 1998 John A. Carlson Stock Filed herewith
Option Agreement
4.3 Alanco Environmental Resources Filed herewith
Corporation 1996 Directors and
Officers Stock Option Plan
5 Opinion rendered by Dennis Filed herewith
Brovarone, counsel for the
Registrant (including consent)
23.1 Consent of Singer Lewak Filed herewith
Greenbaum & Goldstein, LLP
23.2 Consent of Hein & Associates Filed herewith
23.3 Consent of Counsel See Exhibit 5
3<PAGE>
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes.
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to the Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information in the
Registration Statement;
(iii) To include any material information with respect to the Plan of
distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
Provided, however, that paragraphs (a)(1)(I) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended
that are incorporated by reference into this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new Registration Statement to the securities offered
therein, and the offering of such securities offered at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934 that is incorporated by
reference in the Registration Statement shall be deemed to be a new
Registration Statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the provisions
described in Item 6, or otherwise, the Registrant has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel
4<PAGE>
that matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Scottsdale, State of Arizona on this 21st day of
October, 1998.
ALANCO ENVIRONMENTAL RESOURCES CORPORATION
By: /s/John A. Carlson
-------------------------------------------
John A. Carlson, Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities indicated.
NAME TITLE DATE
/s/Robert R. Kauffman Chairman of the Board 10/16/1998
- ----------------------- Chief Executive Officer
Robert R. Kauffman
/s/James T. Hecker Director 10/16/1998
- -----------------------
James T. Hecker
/s/Harold S. Carpenter Director 10/16/1998
- -----------------------
Harold S. Carpenter
/s/Steven P. Oman Director 10/16/1998
- -----------------------
Steven P. Oman
/s/Edward J. Maley Director 10/16/1998
- -----------------------
Edward J. Maley
5<PAGE>
ALANCO ENVIRONMENTAL RESOURCES CORPORATION
1998 ROBERT R. KAUFFMAN STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT ("Agreement") is made and entered into this
25th day of August, 1998 ("Grant Date"), by and between ALANCO ENVIRONMENTAL
RESOURCES CORPORATION, an Arizona corporation (the "Company"), and ROBERT R.
KAUFFMAN (the "Optionee").
RECITALS
The Company, through its Board of Directors (the "Board"), has determined
that in order to attract and retain the best available personnel for positions
of substantial responsibility to provide successful management of the Company's
business, it must offer a compensation package that provides key employees of
the Company an opportunity to participate financially in the success of the
Company by developing an equity interest in it. By this Agreement, the Company
and the Optionee desire to establish the terms upon which the Company is
willing to grant to the Optionee, and upon which the Optionee is willing to
accept from the Company, an option to purchase shares of common stock, no par
value, of the Company ("Common Stock").
IN CONSIDERATION of the promises and of the mutual agreements hereinafter
set forth, the parties agree as follows:
1. Grant of Non-Statutory Stock Option. Subject to the terms and
conditions hereinafter set forth, the Company grants to the Optionee the right
and option (the "Option") to purchase from the Company all or any part of an
aggregate number of One Million (1,000,000) shares of Common Stock, authorized
but unissued or, at the option of the Company, treasury stock if available (the
"Optioned Shares").
2. Purchase Price. The price to be paid for the Optioned Shares (the
"Purchase Price") upon exercise of the Option, or any part thereof, shall be
the lower of (i) $1.00 per share or (ii) the price per share which is equal to
the average low daily bid price of any ten (10) consecutive trading days from
July 1, 1998 until thirty (30) days following the date of public release of the
Company's Summary Financial Results for its fiscal year ending June 30, 1998.
3. Vesting of Options; Exercise. The Options shall vest as follows:
Five Hundred Thousand (500,000) Options shall vest upon the Grant Date, and
provided Optionee is still employed by the Company, an additional Two Hundred
Fifty Thousand (250,000) Options shall vest upon January 1, 1999, and the final
Two Hundred Fifty Thousand (250,000) Options shall vest upon July 1, 1999. In
addition, all unvested options shall immediately vest in the event the
employment of Optionee with the Company is terminated by the Company. The
Option may be exercised by the Optionee, in whole or in part from time to time,
for any number of shares up to the full amount of shares then vested.
4. Termination of Option. The Option shall not be exercisable as to any
shares not vested and will automatically terminate with respect to non-vested
shares if the continuous employment requirement is not satisfied, unless
Optionee is terminated by the Company. Vested Shares, to the extent not
exercised, shall terminate upon the tenth (10th) anniversary of the Grant date
(the "Option Term").
5. Exercise of Option. Subject to the terms and conditions of this
Agreement, the Option may be exercised only by completing and signing a written
notice to the Company in substantially the following form:
1<PAGE>
I hereby exercise the Option granted to me by Alanco Environmental
Resources Corporation and elect to purchase _________________ shares
of no par value Common Stock of Alanco Environmental Resources
Corporation for [the purchase price set forth in Paragraph 2 of this
Stock Option Agreement].
6. Payment of Purchase Price. Payment of the Purchase Price may be made
as follows:
(a) In United States dollars in cash or by check, bank draft or
money order payable to the Company; or
(b) At the discretion of the Board, through the delivery of shares
of Common Stock with an aggregate fair market value at the date of such
delivery, equal to the Purchase Price; or
(c) By a combination of both (a) and (b) above.
The Board shall determine acceptable methods for tendering Common Stock as
payment upon exercise of an Option and may impose such limitations and
conditions on the use of Common Stock to exercise an Option as it deems
appropriate. At the election of the Optionee and subject to the acceptance of
such election by the Board, to satisfy the Company's withholding obligations,
it may retain such number of shares of Common Stock subject to the exercised
Option which have an aggregate fair market value on the date of exercise equal
to the Company's aggregate federal, state, and local tax withholding and FICA
and FUTA obligations with respect to the exercise of the Option by the
Optionee.
7. Adjustments. In the event of any stock split, reverse stock split,
stock dividend, combination or reclassification of shares of Common Stock or
any other increase or decrease in the number of issued shares of Common Stock
effected without receipt of consideration by the Company, the number and kind
of Optioned Shares and the Purchase Price per share shall be proportionately
and appropriately, adjusted without any change in the aggregate Purchase Price
to be paid therefor upon exercise of the Option.
8. Liquidation, Sale of Assets or Merger. Provided that the Options
shall have been fully vested for at least 30 days, in the event of a
dissolution or liquidation of the Company, the Option will terminate
immediately prior to the consummation of such action, unless otherwise provided
by the Board. In the event of a proposed sale of all or substantially all of
the assets of the Company, or the merger of the Company with or into another
corporation, the option shall be assumed or an equivalent option shall be
substituted by such successor corporation.
9. Optionee Not A Shareholder. The Optionee shall not be deemed for any
purposes to be a shareholder of the Company with respect to any of the Optioned
Shares except to the extent that the Option herein granted shall have been
exercised and a stock certificate issued therefor.
10. Covenants of the Company. The Company covenants and agrees that all
shares of Common Stock issued upon the exercise of the Option will, upon
issuance and payment therefor in accordance with the terms hereof, be validly
issued, fully paid and nonassessable.
11. Registration of Common Stock. The Company shall promptly cause
appropriate securities registration statements to be filed with respect to the
2<PAGE>
shares underlying the Option so that upon exercise of the Option the Common
Stock received may be freely tradeable.
12. Notices. Any notice to be given under the terms of the Agreement
("Notice") shall be addressed to the Company in care of its Secretary at 15900
N. 78th Street, Suite 101, Scottsdale, Arizona 85260, or at its then current
corporate headquarters. Notice to be given to the Optionee shall be addressed
to him at his then current residential address as appearing on the records of
the Company. Notice shall be deemed duly given when enclosed in a properly
sealed envelope and deposited by certified mall, return receipt requested, in a
post office or branch post office regularly maintained by the United States
Government.
13. Governing Law. This Agreement is executed pursuant to and shall be
governed by and construed in accordance with the laws of the State of Arizona.
14. Entire Agreement. This Agreement constitutes the entire agreement of
the parties with respect to the subject matter hereof and supersedes all prior
understandings and agreements written or oral of any party hereto. This
Agreement may not be amended, waived, discharged or terminated, except by a
written instrument signed by both the Company and the Optionee.
IN WITNESS WHEREOF, the Company has caused this instrument to be executed
by its duly authorized officer, and the Optionee has hereunto affixed his
signature.
ALANCO ENVIRONMENTAL RESOURCES CORPORATION, an Arizona corporation
By: /s/James T. Hecker /s/Harold S. Carpenter
---------------------- ------------------------
James T. Hecker Harold S. Carpenter
Its: Compensation/Administrative Committee
OPTIONEE:
/s/Robert R. Kauffman
- ---------------------------
Robert R. Kauffman
3<PAGE>
ALANCO ENVIRONMENTAL RESOURCES CORPORATION
1998 JOHN A. CARLSON STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT ("Agreement") is made and entered into this
9th day of September, 1998 ("Grant Date"), by and between ALANCO ENVIRONMENTAL
RESOURCES CORPORATION, an Arizona corporation (the "Company"), and JOHN A.
CARLSON (the "Optionee").
RECITALS
The Company, through its Board of Directors (the "Board"), has determined
that in order to attract and retain the best available personnel for positions
of substantial responsibility to provide successful management of the Company's
business, it must offer a compensation package that provides key employees of
the Company an opportunity to participate financially in the success of the
Company by developing an equity interest in it. By this Agreement, the Company
and the Optionee desire to establish the terms upon which the Company is
willing to grant to the Optionee, and upon which the Optionee is willing to
accept from the Company, an option to purchase shares of common stock, no par
value, of the Company ("Common Stock").
IN CONSIDERATION of the promises and of the mutual agreements hereinafter
set forth, the parties agree as follows:
1. Grant of Non-Statutory Stock Option. Subject to the terms and
conditions hereinafter set forth, the Company grants to the Optionee the right
and option (the "Option") to purchase from the Company all or any part of an
aggregate number of One Hundred Thousand (100,000) shares of Common Stock,
authorized but unissued or, at the option of the Company, treasury stock if
available (the "Optioned Shares").
2. Purchase Price. The price to be paid for the Optioned Shares (the
"Purchase Price") upon exercise of the Option, or any part thereof, shall be
the lower of (i) $1.00 per share or (ii) the price per share which is equal to
the average low daily bid price of any ten (10) consecutive trading days from
July 1, 1998 until thirty (30) days following the date of public release of the
Company's Summary Financial Results for its fiscal year ending June 30, 1998.
3. Vesting of Options; Exercise. The Options shall vest as follows:
Fifty Thousand (50,000) Options shall vest upon March 1, 1999, and the
remaining Fifty Thousand (50,000) Options shall vest upon September 1, 1999,
provided Optionee is still employed by the Company. In addition, all unvested
options shall immediately vest in the event the employment of Optionee with the
Company is terminated by the Company. The Option may be exercised by the
Optionee, in whole or in part from time to time, for any number of shares up to
the full amount of shares then vested.
4. Termination of Option. The Option shall not be exercisable as to any
shares not vested and will automatically terminate with respect to non-vested
shares if the continuous employment requirement is not satisfied, unless
Optionee is terminated by the Company. Vested Shares, to the extent not
exercised, shall terminate upon the tenth (10th) anniversary of the Grant date
(the "Option Term").
5. Exercise of Option. Subject to the terms and conditions of this
Agreement, the Option may be exercised only by completing and signing a written
notice to the Company in substantially the following form:
I hereby exercise the Option granted to me by Alanco Environmental
Resources Corporation and elect to purchase _________________ shares
1<PAGE>
of no par value Common Stock of Alanco Environmental Resources
Corporation for [the purchase price set forth in Paragraph 2 of this
Stock Option Agreement].
6. Payment of Purchase Price. Payment of the Purchase Price may be made
as follows:
(a) In United States dollars in cash or by check, bank draft or
money order payable to the Company; or
(b) At the discretion of the Board, through the delivery of shares
of Common Stock with an aggregate fair market value at the date of such
delivery, equal to the Purchase Price; or
(c) By a combination of both (a) and (b) above.
The Board shall determine acceptable methods for tendering Common Stock as
payment upon exercise of an Option and may impose such limitations and
conditions on the use of Common Stock to exercise an Option as it deems
appropriate. At the election of the Optionee and subject to the acceptance of
such election by the Board, to satisfy the Company's withholding obligations,
it may retain such number of shares of Common Stock subject to the exercised
Option which have an aggregate fair market value on the date of exercise equal
to the Company's aggregate federal, state, and local tax withholding and FICA
and FUTA obligations with respect to the exercise of the Option by the
Optionee.
7. Adjustments. In the event of any stock split, reverse stock split,
stock dividend, combination or reclassification of shares of Common Stock or
any other increase or decrease in the number of issued shares of Common Stock
effected without receipt of consideration by the Company, the number and kind
of Optioned Shares and the Purchase Price per share shall be proportionately
and appropriately, adjusted without any change in the aggregate Purchase Price
to be paid therefor upon exercise of the Option.
8. Liquidation, Sale of Assets or Merger. Provided that the Options
shall have been fully vested for at least 30 days, in the event of a
dissolution or liquidation of the Company, the Option will terminate
immediately prior to the consummation of such action, unless otherwise provided
by the Board. In the event of a proposed sale of all or substantially all of
the assets of the Company, or the merger of the Company with or into another
corporation, the option shall be assumed or an equivalent option shall be
substituted by such successor corporation.
9. Optionee Not A Shareholder. The Optionee shall not be deemed for any
purposes to be a shareholder of the Company with respect to any of the Optioned
Shares except to the extent that the Option herein granted shall have been
exercised and a stock certificate issued therefor.
10. Covenants of the Company. The Company covenants and agrees that all
shares of Common Stock issued upon the exercise of the Option will, upon
issuance and payment therefor in accordance with the terms hereof, be validly
issued, fully paid and nonassessable.
11. Registration of Common Stock. The Company shall promptly cause
appropriate securities registration statements to be filed with respect to the
shares underlying the Option so that upon exercise of the Option the Common
Stock received may be freely tradeable.
2<PAGE>
12. Notices. Any notice to be given under the terms of the Agreement
("Notice") shall be addressed to the Company in care of its Secretary at 15900
N. 78th Street, Suite 101, Scottsdale, Arizona 85260, or at its then current
corporate headquarters. Notice to be given to the Optionee shall be addressed
to him at his then current residential address as appearing on the records of
the Company. Notice shall be deemed duly given when enclosed in a properly
sealed envelope and deposited by certified mall, return receipt requested, in a
post office or branch post office regularly maintained by the United States
Government.
13. Governing Law. This Agreement is executed pursuant to and shall be
governed by and construed in accordance with the laws of the State of Arizona.
14. Entire Agreement. This Agreement constitutes the entire agreement of
the parties with respect to the subject matter hereof and supersedes all prior
understandings and agreements written or oral of any party hereto. This
Agreement may not be amended, waived, discharged or terminated, except by a
written instrument signed by both the Company and the Optionee.
IN WITNESS WHEREOF, the Company has caused this instrument to be executed
by its duly authorized officer, and the Optionee has hereunto affixed his
signature.
ALANCO ENVIRONMENTAL RESOURCES CORPORATION, an Arizona corporation
By: /s/Robert R. Kauffman
----------------------
Robert R. Kauffman
Its: Chairman and Chief Executive Officer
OPTIONEE:
/s/John A. Carlson
- ------------------------
John A. Carlson
3<PAGE>
ALANCO ENVIRONMENTAL RESOURCES CORPORATION
1996 DIRECTORS AND OFFICERS
STOCK OPTION PLAN
ARTICLE I
DEFINITIONS
As used herein, terms have the meaning hereinafter set forth unless the
context should clearly indicate the contrary:
(a) "Board" shall mean the Board of Directors of the Company;
(b) "Days" shall mean for calculation purposes the days of the week in
which the New York Stock Exchange conducts and is open for regular trading
activity;
(c) "Company" shall mean Alanco Environmental Resources Corporation, an
Arizona corporation;
(d) "Director" shall mean a member of the Board;
(e) "Grant" means the issuance of an Option hereunder to an Optionee
entitling such Optionee to acquire Stock on the terms and conditions set forth
in a Stock Option Agreement to be entered into with the Optionee;
(f) "Officer" shall mean an Executive Officer of the Company;
(g) "Option" shall mean the right granted to an Optionee to acquire Stock
of the Company pursuant to the Plan;
(h) "Optionee" shall mean an Officer of the Company or a Director of the
Company to whom a Grant hereunder has been made;
(i) "Plan" shall mean the Alanco Environmental Resources Corporation 1996
Directors and Officers Stock Option Plan, the terms of which are herein set
forth;
(j) "Stock" shall mean the common stock of the Company or, in the event
the outstanding shares of stock are hereafter changed into or exchanged for
shares of different stock or securities of the Company or some other
corporation, such other stock or securities;
(k) "Stock Option Agreement" shall mean the agreement between the Company
and an Optionee under which an Optionee may acquire Stock pursuant to the Plan.<PAGE>
ARTICLE II
THE PLAN
2.1 NAME. The plan shall be known as the "Alanco Environmental
Resources Corporation 1996 Directors and Officers Stock Option Plan."
2.2 PURPOSE. The purpose of the Plan is to advance the business and
development of the Company and its shareholders by affording to the Directors
and Officers of the Company the opportunity to acquire a propriety interest in
the Company by the grant of Options to such persons under the terms herein set
forth. By doing so, the Company seeks to motivate, retain and attract highly
competent, highly motivated Executive Officers and Directors to lead the
Company through this critical time in its evolution and ensure the success of
the Company. The Options to be granted hereunder are non-statutory Options
made available to Directors and Officers of Alanco Environmental Resources
Corporation.
2.3 EFFECTIVE DATE. The Plan shall become effective upon its adoption
by the Board of the Company.
2.4 TERMINATION DATE. The Plan shall terminate ten (10) years from the
date the Plan is adopted by the Board of the Company and at such time any
Options granted hereunder shall be void and of no further force or effect.
ARTICLE III
PARTICIPANTS
Only Executive Officers and Directors of the Company shall be eligible to
be granted an Option under the Plan. The Board may grant Options to any
Director or Officer in accordance with such determinations as the Board may,
from time to time, in its sole discretion make.
ARTICLE IV
ADMINISTRATION
4.1 The Plan shall be administered by the Board of Directors of the
Company. Subject to the express provisions of the Plan, the Board shall have
the sole discretion and authority to determine from among eligible persons
those to whom and the time or times at which Options may be granted and the
number of shares of Stock to be subject to each Option. Subject to the express
provisions of the Plan, the Board shall also have complete authority to
interpret the Plan, to prescribe, amend and rescind rules and regulations
related to it and to determine the details and provisions of each Stock Option
Agreement and to make all other determinations necessary or advisable in the
administration of the Plan.
4.2 RECORDS OF PROCEEDINGS. The Board shall maintain written minutes of
its actions which shall be maintained among the records of the Company.<PAGE>
4.3 MAJORITY. A majority of the members of the Board shall constitute a
quorum and any action taken by a majority present at such meeting, when
properly noticed, at which a quorum is present or any action taken without a
meeting evidenced by a writing executed by all members of the Board shall
constitute the action of the Board.
4.4 COMPANY ASSISTANCE. The Company shall supply full and timely
information to the Board in all matters relating to eligible Optionees, their
status, death, retirement, disability and such other pertinent facts as the
Board may require. The Company shall furnish the Board with such clerical and
other assistance as is necessary in the performance of its duties.
ARTICLE V
SHARES OF STOCK SUBJECT TO THE PLAN
5.1 LIMITATION. The number of shares of Stock which may be issued and
sold hereunder shall not exceed 750,000 shares.
5.2 OPTIONS GRANTED UNDER THE PLAN. Shares of stock with respect to
which an Option is granted hereunder, but which lapses prior to exercise, shall
be considered available for grant hereunder. Therefore, if Options granted
hereunder shall terminate for any reason without being wholly exercised, new
Options may be granted hereunder covering the number of shares to which such
terminated Options related.
5.3 ANTI-DILUTION. In the event the Stock subject to Options hereunder is
changed into or exchanged for a different number or kind of stock or other
securities of the Company or of another organization by reason of merger,
consolidation or reorganization, recapitalization, reclassification,
combination of shares, stock split or stock dividend;
(a) The aggregate number and kind of shares of Stock subject to Options
which may be granted hereunder shall be adjusted appropriately;
(b) Rights under outstanding Options granted hereunder, both as to the
number of subject shares and the Option price, shall be adjusted appropriately;
(c) Where dissolution or liquidation of the Company or any merger or
consolidation in which the Company is not a surviving corporation is involved,
each outstanding Option shall terminate and the Optionee holding such Option
shall have the right immediately prior to such dissolution, liquidation, merger
or combination to exercise his Option, in whole or in part, to the extent that
it shall not have been exercised without regard to any installment exercise
provision.
The manner of application of the foregoing provision shall be determined
solely by the committee and any such adjustment may provide for the elimination
of fractional share interests.
ARTICLE VI
6.1 OPTIONS. Each Option granted hereunder shall be evidenced by
minutes of a meeting of or the written consent of the Board and by a written<PAGE>
Stock Option Agreement dated as of the date of grant and executed by the
Company and the Optionee, which agreement shall set forth such terms and
conditions as may be determined by the Board consistent with the Plan.
6.2 LIMITATIONS.
(a) The maximum number of shares for which an Option or Options may be
granted under the Plan to any one Director or Officer shall be 150,000.
(b) The Options granted hereunder are non-statutory Options which do not
satisfy the requisites of Section 422 of the Internal Revenue Code, as amended.
6.3 OPTION PRICE. The per share Option price for the stock subject to
each Option shall be Sixty percent (60%) of the NASDAQ closing bid price per
share on the date of grant or such other price as the Board may determine.
6.4 OPTION PERIOD. Each Option granted hereunder must be granted within
five (5) years from the effective date of the Plan. The period for the
exercise of each Option shall be determined by the Board, but in no instance
shall such period exceed five (5) years from the date of grant of the Option.
Options may be exercised by a Director or Officer for whole shares only.
Director or Officer Optionees may exercise their Option in whole at any time,
or in part from time to time in each year on a cumulative basis with any
portion not exercised to be carried over for exercise in subsequent years.
Options shall be exercised by written notice of intent to exercise the Option
with respect to a specified number of shares delivered to the Company at its
principal office and payment in full to the Company at said office of the
amount of the Option price for the number of shares with respect to which the
Option(s) are then being exercised.
6.5 NON-TRANSFERABILITY OF OPTION. No Option or any right relative
thereto shall be transferred by an Optionee otherwise than by will or by the
laws of descent and distribution. During the lifetime of an Optionee, the
Option shall be exercisable only by him or her.
6.6 RIGHTS AS A SHAREHOLDER. An Optionee or a transferee of an Option
shall have no rights as a shareholder of the Company with respect to any shares
subject to any unexercised Options.
6.7 REQUIRED FILINGS. An Optionee to whom an Option is granted under
the terms of the Plan is required to file appropriate reports with the Internal
Revenue Service. As a condition of the receipt of an Option hereunder,
Optionees shall agree to make necessary filings with the Internal Revenue
Service. The Company shall assist and cooperate with Optionees by providing
the necessary information required for compliance of this condition.
ARTICLE VII
STOCK CERTIFICATES
7.1 ISSUANCE. The Company shall issue and deliver any certificate for
shares of Stock purchased upon the exercise of any Option granted hereunder.
7.2 TRANSFER RESTRICTIONS. The Board shall instruct the Secretary of
the Corporation to impose restrictions of the subsequent transferability of
Stock issued pursuant to Options to be granted hereunder. The Stock of the<PAGE>
Company to be issued pursuant to the exercise of an Option shall have such
restrictions prominently displayed as a legend on such certificate.
ARTICLE VIII
TERMINATION, AMENDMENT, OR MODIFICATION OF THE PLAN
The Board may at any time terminate the plan, and may at any time and from
time to time and in any respect amend or modify the Plan.
ARTICLE IX
EMPLOYMENT
9.1 EMPLOYMENT. Nothing in the Plan or any Option granted hereunder or
in any Stock Option Agreement shall confer upon a non-employee Director
receiving such Option or Stock Option Agreement the status as an employee of
the Company. Further, nothing in the Plan or any Option granted hereunder
shall in any manner create in any Optionee the right to continue their
relationship with the Company or create any vested interest in such
relationship, including employment.
9.2 OTHER COMPENSATION PLANS. The adoption of the Plan shall not effect
any other stock option, incentive, or other compensation plan in effect for the
Company or any of its subsidiaries, nor shall the Plan preclude the Company or
any subsidiary thereof from establishing any other forms of incentive or other
compensation for employees or non-employee Directors of the Company, or any
subsidiary thereof.
9.3 PLAN EFFECT. The Plan shall be binding upon the successors and
assigns of the Company.
9.4 TENSE. When used herein nouns in the singular shall include the
plural.
9.5 HEADINGS OF SECTIONS ARE NOT PART OF THE PLAN. Headings of articles
and sections hereof are inserted for convenience and reference and constitute
no part of the Plan.
Alanco Environmental Resources Corporation<PAGE>
DENNIS BROVARONE
ATTORNEY AND COUNSELOR AT LAW
11249 West 103rd Drive
Westminster, Colorado 80021
ph: 303 466 4092 / fax: 303 466 4826
October 15, 1998
Board of Directors
Alanco Environmental
Resources Corporation
Re: Registration Statement on Form S-8
Gentlemen:
You have requested my opinion as to the legality of the issuance by Alanco
Environmental Resources Corporation, (the "Corporation") of up to 1,167,500
shares of Common Stock (the "Shares") pursuant to a Registration Statement on
Form S-8 (the "Registration Statement") to be filed on or before October 21,
1998.
Pursuant to your request I have reviewed and examined:(1).The Articles of
Incorporation of the Corporation, as amended (the "Articles"); (2). The Bylaws
of the Corporation, as certified by the Secretary of the Corporation; (3). The
minute book of the Corporation; (4). A copy of certain resolutions of the
Board of Directors of the Corporation; (5). The Registration Statement; (6).The
Agreements and Stock Option Plan and Option Agreements covered by the
Registration Statement; and (7).Such other matters as I have deemed relevant in
order to form my opinion.
Based upon the foregoing, and subject to the qualifications set forth below,
I am of the opinion that the Shares, if issued as described in the Registration
Statement will have been duly authorized, legally issued, fully paid and non-
assessable.
This opinion is furnished by me as counsel to the Corporation and is solely
for your benefit. Neither this opinion nor copies hereof may be relied upon by
any other person without my prior written consent. My opinion is subject to
the qualification that no opinion is expressed herein as to the application of
state securities or Blue Sky laws.
Not withstanding the above, I consent to the use of this opinion in the
Registration Statement.
Very truly yours,
/s/Dennis Brovarone
- -------------------
Dennis Brovarone <PAGE>
SINGER LEWAK GREENBAUM & GOLDSTEIN LLP
10960 Wilshire Boulevard, Suite 1100
Los Angeles, California 90024
Telephone (310)477-3924
Fax (310)478-6070
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated August 15, 1997, accompanying the consolidated
financial statements of Alanco Environmental Resources Corporation (formerly
known as Alanco Resources Corporation) and subsidiaries appearing in the 1998
Annual Report of Alanco Environmental Resources Corporation to its shareholders
and accompanying the schedule included in the Annual Report on Form 10-K for
the year ended June 30, 1998 which are incorporated by reference in this
Registration Statement. We consent to the incorporation by reference in the
Registration Statement of the aforementioned reports.
/s/ Singer Lewak Greenbaum & Goldstein LLP
SINGER LEWAK GREENBAUM & GOLDSTEIN LLP
Los Angeles, California
October 19, 1998<PAGE>
HEIN & ASSOCIATES LLP
717 Seventeenth Street, Suite 1600
Denver, Colorado 80202-3330
Phone (303)298-9600
Fax (303)298-8118
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference of our report dated August 20,
1998 accompanying the consolidated financial statements of Alanco Environmental
Resources Corporation to the Form S-8 Registration Statement of Alanco
Environmental Resources Corporation.
/s/HEIN & ASSOCIATES LLP
HEIN & ASSOCIATES LLP
Denver, Colorado
October 19, 1998<PAGE>
