-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PfWCrPrd5HebfD/Aogu0bdVy3IQ51LksCbmUcmntGJTuKlt89Ss7p/H+aCjvaluZ UbPuxa3nFOWlP4rJhW2rag== 0000949303-98-000004.txt : 19980116 0000949303-98-000004.hdr.sgml : 19980116 ACCESSION NUMBER: 0000949303-98-000004 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 19971201 ITEM INFORMATION: FILED AS OF DATE: 19980115 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: BION ENVIRONMENTAL TECHNOLOGIES INC CENTRAL INDEX KEY: 0000875729 STANDARD INDUSTRIAL CLASSIFICATION: MISC INDUSTRIAL & COMMERCIAL MACHINERY & EQUIPMENT [3590] IRS NUMBER: 841176672 STATE OF INCORPORATION: CO FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-19333 FILM NUMBER: 98507355 BUSINESS ADDRESS: STREET 1: 555 17TH ST STREET 2: STE 3310 CITY: DENVER STATE: CO ZIP: 80202 BUSINESS PHONE: 3032940750 FORMER COMPANY: FORMER CONFORMED NAME: RSTS CORP DATE OF NAME CHANGE: 19930328 8-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report: December 1, 1997 ------------------------------------------- (Date of earliest event reported) Bion Environmental Technologies, Inc. ----------------------------------------------- (Exact Name of Registrant as Specified in its Charter) Colorado 0-19333 84-1176672 ----------- ----------- ------------- (State of (Commission (I.R.S. Employer Incorporation) File No.) Identification No.) 555 17th Street, Suite 3310, Denver, Colorado 80202 ----------------------------------------------------------- (Address and Zip Code of Principal Executive Offices) Registrant's telephone number including area code: (303) 294-0750 ITEM 5. OTHER EVENTS. - -------- -------------- (A) On December 1, 1997, Bion Environmental Technologies, Inc. (which along with its subsidiaries is referred to as the "Registrant" or the "Company") signed new Employment Agreements (the "Agreements") with Jon Northrop, C.E.O., Jere Northrop, President, and M. Duane Stutzman, C.F.O., replacing previously existing employment agreements which were due to expire on December 31, 1997 for Mr. Stutzman and March 31, 1998 for Messrs. Northrop. All terms of the Agreements are essentially the same as the previously existing agreements except that the employment period is extended until December 31, 2002. Copies of the Agreements are attached hereto as Exhibits 10.1, 10.2, and 10.3, respectively. (B) On January 9, 1998 the Registrant signed a contract for the design, permitting, and construction of its patented Bion NMS' animal waste treatment system to retrofit a 3,650 sow farm in Knox County, Illinois. This retrofit to an existing lagoon based treatment system represents Bion's first expansion into Illinois. (C) On December 31, 1997, the Registrant executed a Closing Memorandum/Addendum #3 (the "Memorandum") with Bowman Family Farms, Inc. and Crystal Springs Farms, LLC (collectively "BFF") which is the third amendment to the agreement and addendum between Registrant and BFF dated October 8, 1997 as amended November 13, 1997 and November 30, 1997 (collectively the "Agreement")(see the agreement and addendum attached as Exhibit 10-1 to the Registrant's September 30, 1997 Form 8-K). The Memorandum sets forth that: 1) in consideration of payments made by BFF to Registrant the Agreement is now binding on Registrant and BFF; 2) the appointment of Michael Bowman as a director of Registrant shall be accomplished upon completion of all payments required by paragraph 5 A.i of the Agreement; 3) as well as numerous other matters related to the project contemplated in the Agreement. A copy of the Memorandum is attached hereto as Exhibit 10.4, and the Agreement is incorporated in Exhibit 10.4 by reference. (D) On December 1, 1997 the Registrant issued a bonus to M. Duane Stutzman, CFO, consisting of 20,000 class H6 Warrants (to purchase restricted and legended shares of Registrant's common stock at a price of $10.00 per share exercisable from September 15, 1998 through December 31, 2001), 10,000 class H7 Warrants (to purchase restricted and legended shares of Registrant's common stock at a price of $12.50 per share exercisable from September 15, 1999 through December 31, 2001), and 10,000 class H8 Warrants (to purchase restricted and legended shares of Registrant's common stock at a price of $15.00 per share exercisable from September 15, 1999 through December 31, 2001). (E) Effective January 1, 1998, the parties to that certain Voting Agreement (the "Voting Agreement") (see Registrant's Form 8-K dated May 19, 1997) agreed that such Voting Agreement is amended so that only shares currently owned (which totalled 4,007,797 in aggregate out of 8,559,455 total shares outstanding on January 1, 1998) by or that may be issued in the future to LoTayLingKyur, Inc. and Dublin Holding, Ltd. are to be voted by Jon Northrop, Registrant's C.E.O., and that the Voting Agreement shall expire on June 30, 1999 absent any renewal or extension. (F) Effective January 1, 1998, holders of 84% of the Registrant's common stock (post transaction) participated in an exchange transaction (the "Exchange") conducted pursuant to Section 351 of the Internal Revenue Code of 1986 as amended that resulted in the exchange of 7,463,012 warrants of various classes for 4,351,348 shares of restricted stock and 2,832,909 Class Z Warrants to purchase shares of the Registrant's common stock at $15.00 per share for a 24 month period commencing January 1, 2000. The Exchange was the result of negotiations that were initiated in response to a proposal made by certain warrant holders on November 23, 1997, and finalized on December 24, 1997 (see Exhibit 2.1 attached hereto for the Exchange offer memorandum). Schedules detailing the calculations for the Exchange, the warrants exchanged, warrants outstanding after the Exchange, and outstanding options as of January 1, 1998 are contained in Exhibits 99.1, 99.2, 99.3, and 99.4 respectively hereto. Registrant has prepared the following analysis of its capital structure on January 2, 1998 following the Exchange: Common Stock: Issued and outstanding 8,559,455 1,2 Options 3 Vested 144,460 Not Vested 79,212 Warrants 4 Vested 3,129,836 Not Vested 11,250 1 This is an increase from December 31, 1997 of 4,539,586 shares, 4,351,348 of which are as a result of the Exchange, and 188,238 of which result from the issuance of shares previously subscribed. 2 The Registrant currently is obligated to pay $130,000 under the terms of a convertible credit facility with a shareholder which, if converted, would result in the issuance of 28,889 shares of restricted Common Stock as payment in full of the obligation. (See 8-K dated December 1, 1996). If the note is converted into stock, it would result in the Company having 8,588,344 shares of Common Stock outstanding. 3 See Exhibit 99.4 hereto for a detailed listing of the options. 4 See Exhibit 99.3 hereto for a detailed listing of the warrants. Following completion of the Exchange the ownership positions of all officers and/or owners of 5% or more of the common stock of the Registrant are as follows:
Name of Holder Shares Owned Z Warrants Owned ---------------- ------------ ---------------- Dublin Holding, Ltd. 2,489,090 1,141,003 LoTayLingKyur, Inc. 1,393,808 279,330 Jere Northrop 663,707 356,528 Jon Northrop 642,034 350,556 Mark Smith and Kelly Moone 521,822 216,486 Duane Stutzman 100,237 65,259
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. - -------- ------------------------------------- a) Financial Statements None b) Pro forma Financial Information None c) Index to Exhibits 2.1: Exchange offer memorandum dated December 24, 1997. 10.1: Employment Agreement for Jon Northrop, CEO, dated December 1, 1997. 10.2: Employment Agreement for Jere Northrop, President, dated December 1, 1997. 10.3: Employment Agreement for M. Duane Stutzman, CFO, dated December 1, 1997. 10.4: Closing Memorandum/Addendum #3 between Bion Tech-nologies, Inc. and Bowman Family Farms, Inc. and Crystal Springs Farms, LLC dated December 31, 1997. 99.1: Schedule detailing calculations for Exchange offer dated December 24, 1997, to be effective January 1, 1998. 99.2: Schedule detailing warrants to be exchanged in Exchange offer dated December 24, 1997, to be effective January 1, 1998. 99.3: Schedule detailing warrants outstanding after Exchange transaction was completed on January 1, 1998. 99.4: Schedule detailing options outstanding on January 1, 1998. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. BION ENVIRONMENTAL TECHNOLOGIES, INC. Date: January 13, 1998 By: /s/ Jon Northrop ------------------------ Jon Northrop, Chief Executive Officer EX-2.1 2 Exhibit 2.1 TRANSCRIPTION OF HAND-WRITTEN FAX COMMUNICATION DATED 12/24/97. MARK A. SMITH ATTORNEY AT LAW 2305 BROADWAY BOULDER, COLORADO 80304-4106 Telephone: (303) 444-1713 FAX: (303) 449-2198 December 24, 1997 VIA FAX To: Jon Northrop, CEO, Bion Environmental Technologies, Inc. ("BION") From: Mark A. Smith Fax No: 303-294-0983 No. of Pages (excluding this page): 10 Re: BION Warrant Exchange ("EXCHANGE") - --------------------------------------- Dear Mr. Northrop: Below find a summary of the terms for an exchange of BION warrants for restricted BION common shares and a new class of BION warrants ("Z Warrants"). Based on the items set forth below, my clients Dublin Holding, Ltd. and LoTayLingKyur, Inc., my wife, Kelly Moone, and I (together with our children and others who have been our donees of BION warrants) agree to participate in the EXCHANGE: 1) The EXCHANGE, which results from an offer which we first made on 11/23/97, has been subject to ongoing negotiations which culminated in an oral agreement reached yesterday afternoon during our meeting in Golden, Colorado; 2) The purpose of the EXCHANGE is to restructure the capital structure of BION in order to: a) address the repeatedly made concerns of investment bankers and stock brokers, including without limitation individuals at: 1) at least 2 North Carolina brokerage firms; 2) Global Financial Group; 3) Sauceda & Granville; and, as recently as this past Monday, 4) Cohig that the capital structure was too complex, contained too many warrants exercisable at prices, below and/or near current market prices and looked too much like the capital structures found in old fashioned "blind pool" scam deals; b) remedy the fact that the stock of BION was already being priced as if 10,000,000 shares of stock were outstanding; c) facilitate NASDAQ application process under rules promulgated in the last six months; d) make the stock of BION more attractive to brokerage firms (and individual brokers) so that they will become involved with BION; and e) properly posture BION with investment bankers with regard to additional funding in the public and private markets which BION intends to pursue during 1998. 3) The EXCHANGE shall be effective on January 1, 1998 subject to the contingencies set forth herein: a) the transaction shall be "tax-free" pursuant to 351 of IRC (and/or other applicable provisions) except as to "boot" reflecting the value of the Z Warrants which BION and the EXCHANGE participants agree have nominal value; BION shall provide a tax opinion regarding this condition as a condition precedent to closing; b) all holders of BION Class E1 and/or Class X warrants shall participate in the EXCHANGE and shall exchange all warrants of all classes of BION which they own; BION may include other holders of classes of warrants which are owned by persons who also own Class E1 or X Warrants (for example, if a holder of Class E1 or X Warrants also owns Class A Warrants which are included in the EXCHANGE, BION may allow other holders of Class A Warrants to participate in the EXCHANGE); additionally, BION may allow employees of BION who do not own Class E1 or X Warrants to participate so long as such employees own (and exchange) not less than 100,000 BION warrants, inaggregate; c) all newly issued BION securities results from the EXCHANGE shall be issued as restricted shares and all persons who receive 65,000 or more BION shares in the EXCHANGE shall take the BION shares subject to a two year holding period prior to public resale; d) BION shall indemnify and hold harmless all participants in the EXCHANGE from any and all liability under 16(b) ("short swing profits") derived from matching the EXCHANGE transactions with any other transactions; e) definitive documentation concerning language of warrants, voting rights, resale restrictions, registration rights, etc. 4) For calculation purposes and to equate various classes of warrants to one another, an aggregate "exchange value" ("EV") shall be calculated as set forth below. BION and the participants agree and acknowledge that EV does not --- equal fair market value or price or any equivalent for the warrants to be exchanged or to be issued in the EXCHANGE. EV has been calculated to make "apples and orange and pears, etc." equivalent to one another only: a) The EV of each warrant to participate in the EXCHANGE shall be determined as set for at Exhibit A hereto (8 pages) which contains Black-Scholes values for each class of BION warrants anticipated to participate as of the stock market close ($7 3/8 per share) on 12/15/97 as calculated by BION's accounting firm (EKS&H) based on closing market price, BION stock volatility and applicable terms and exercise prices of warrants; b) Each participant's total Participant Exchange Value ("PEV") shall be calculated by multiplying the number of warrants owned by participant in each class by the Black-Scholes values in Exhibit A; c) Each participant shall be issued a number of BION restricted common shares calculated by dividing his PEV by $7.375; d) Thereafter, for each participant's shares to be issued shall be multiplied by $5.50 to yield an intermediate value ("IV") which shall be subtracted from each PEV with the resulting number ("ZV") to be used to calculate issuance to the participant of Z Warrants. The number of Z Warrants to be issued to each participant shall equal ZV divided by $2.88. The Z Warrant shall be exercisable at $15.00 per share until 12/31/01. e) Although $7.375 has been used to calculate the number of BION shares to be received by each participant, the participants and BION agree and acknowledge that this greatly overstates the current value of BION shares in the quantities being issued in the EXCHANGE as it represents "free trading", unrestricted BION shares priced by a "thin", limited trading market and that $7.375 has been used for the purposes of the EXCHANGE because it was the "value"/"price" embedded in the Black-Scholes calculations, further, the participants and BION agree and acknowledge that the $2.88 Black-Scholes value for the Z Warrants is only a calculational number and does not represent the economic or fair market value of the Z Warrants which the participants and BION believe to be of nominal value only in light of the financial condition of BION and the large multiple of Z Warrant exercise price to large negotiated transactions in BION restricted stock during the past year. 5) To simplify closing of the EXCHANGE, the EXCHANGE shall be effective upon meeting the contingencies set forth above and the return (for exchange) to BION of warrant certificates of sufficient quantity so that after the EXCHANGE the participants own not less than 80% of the common stock of BION provided, however, that the effective date shall be not earlier than January 1, 1998 nor later than January 15, 1998. Thereafter, BION shall issue the BION shares and Z Warrants as required by the EXCHANGE. /s/ Mark A. Smith ----------------------------- Mark A. Smith EX-2.1A 3 Exhibit 2.1A SUMMARY BION Black Scholes Summary of Calculations Assumptions: Volatility 68.72% Risk Free Rate 5.50% Stock Price $7.38 Measurement Price 12/15/97 Term Various
Warrant Class Call Value ------------- ---------- A $1.69 E1 $4.51 G5.1 $5.33 G5.2 $5.49 G6 $4.63 G9 $5.33 G9.1 $4.27 G9.2 $3.58 G9.3 $5.33 G9.4 $3.58 G9.5 $4.73 H3 $5.16 H4 $4.51 H5 $4.01 H6 $3.61 H7 $3.21 H8 $2.88 K1 $3.35 K2 $3.89 K3 $4.38 L1 $2.68 L1.1 $3.87 L2 $2.78 X $4.47 Z $2.88
VALUATION Measurement Class Expiration Date Term Price - -------- ---------- ----------- ---------- --------- A 4/9/99 12/15/97 1.315068493 $10.00 E1 12/31/01 12/15/97 4.046575342 $6.00 G5.1 1/21/01 12/15/97 3.104109589 $3.00 G5.2 9/12/01 12/15/97 3.745205479 $3.00 G6 4/20/02 12/15/97 4.347945205 $6.00 G9 8/1/02 12/15/97 4.630136986 $4.00 G9.1 8/1/02 12/15/97 4.630136986 $8.00 G9.2 8/1/02 12/15/97 4.630136986 $12.00 G9.3 8/1/02 12/15/97 4.630136986 $4.00 G9.4 8/1/02 12/15/97 4.630136986 $12.00 G9.5 8/1/02 12/15/97 4.630136986 $6.00 H3 12/31/01 12/15/97 4.046575342 $4.00 H4 12/31/01 12/15/97 4.046575342 $6.00 H5 12/31/01 12/15/97 4.046575342 $8.00 H6 12/31/01 12/15/97 4.046575342 $10.00 H7 12/31/01 12/15/97 4.046575342 $12.50 H8 12/31/01 12/15/97 4.046575342 $15.00 K1 10/1/99 12/15/97 1.794520548 $6.00 K2 10/1/01 12/15/97 3.797260274 $8.00 K3 10/1/03 12/15/97 5.797260274 $10.00 L1 12/1/98 12/15/97 0.961643836 $6.00 L1.1 12/1/98 12/15/97 0.961643836 $4.00 L2 12/1/99 12/15/97 1.961643836 $8.00 X 12/31/03 12/15/97 6.046575342 $10.00 Z 12/31/01 12/15/97 4.046575342 $15.00
VALUATION
Input Variables As of As of As of As of As of As of 12/15/97 12/15/97 12/15/97 12/15/97 12/15/97 12/15/97 A E1 G5.1 G5.2 G6 G9 -------- -------- -------- -------- -------- -------- Stock price $7.38 $7.38 $7.38 $7.38 $7.38 $7.38 Exercise price $10.00 $6.00 $3.00 $3.00 $6.00 $4.00 Term 1.32 4.05 3.10 3.75 4.35 4.63 Volatility 68.72% 68.72% 68.72% 68.72% 68.72% 68.72% Annual Rate of Quarterly Dividends 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Discount Rate= Bond Equivalent Yield 5.500% 5.500% 5.500% 5.500% 5.500% 5.500% Intermediate Calculations Present value of Stock Ex- dividend 7.38 7.38 7.38 7.38 7.38 7.38 Present value of Exercise Price 9.31 4.82 2.53 2.45 4.74 3.11 Cumulative Volatility 78.81% 138.24% 121.08% 132.99% 143.29% 147.87% Call Option Value Proportion of Stock Present Value 53.91% 84.12% 93.15% 93.24% 84.73% 90.71% Proportion of Exercise Price PV (24.51)% (35.08)% (60.90)% (56.52)% (34.17)% (43.81)% Call Option Value $ 1.69 $4.51 $5.33 $5.49 $ 4.63 $ 5.33 Put Option Value Proportion of Stock Present Value (46.09)% (15.88)% (6.85)% (6.76)% (15.27)% (9.29)% Proportion of Exercise Price PV 75.49% 64.92% 39.10% 43.48% 65.83% 56.19% Put Option Value $ 3.63 $1.96 $ .49 $ .57 $ 1.99 $ 1.06 Value of call from above $1.69 $4.51 $5.33 $ 5.49 $4.63 $ 5.33 Number of options/ warrants 1 1 1 1 1 1 Imputed value $1.69 $4.51 $5.33 $ 5.49 $4.63 $ 5.33
VALUATION Input Variables As of As of As of As of As of As of 12/15/97 12/15/97 12/15/97 12/15/97 12/15/97 12/15/97 G9.1 G9.2 G9.3 G9.4 G9.5 H3 -------- -------- -------- -------- -------- -------- Stock price $7.38 $7.38 $7.38 $7.38 $7.38 $7.38 Exercise price $8.00 $12.00 $4.00 $12.00 $6.00 $4.00 Term 4.63 4.63 4.63 4.63 4.63 4.05 Volatility 68.72% 68.72% 68.72% 68.72% 68.72% 68.72% Annual rate of Quarterly Dividends 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Discount rate= Bond Equivalent Yield 5.500% 5.500% 5.500% 5.500% 5.500% 5.500% Intermediate Calculations Present value of stock ex- dividend 7.38 7.38 7.38 7.38 7.38 7.38 Present value of exercise price 6.22 9.33 3.11 9.33 4.67 3.21 Cumulative volatility 147.87% 147.87% 147.87% 147.87% 147.87% 138.24% Call Option Value Proportion of Stock Present Value 80.35% 71.91% 90.71% 71.91% 85.29% 90.19% Proportion of Exercise Price PV (26.62)% (18.44)% (43.81)% (18.44)% (33.36)% (46.42)% Call Option Value $4.27 $3.58 $5.33 $3.58 $4.73 $5.16 Put Option Value Proportion of Stock Present Value (19.65)% (28.09)% (9.29)% (28.09)% (14.71)% (9.81)% Proportion of Exercise Price PV 73.38% 81.56% 56.19% 81.56% 66.64% 53.58% Put Option Value $3.12 5.54 1.06 5.54 2.02 1.00 Value of call from above $4.27 $3.58 $5.33 $3.58 $4.73 $5.16 Number of Options/ Warrants 1 1 1 1 1 1 Imputed value $4.27 $3.58 $5.33 $3.58 $4.73 $5.16
VALUATION
Input Variables As of As of As of As of As of As of 12/15/97 12/15/97 12/15/97 12/15/97 12/15/97 12/15/97 H4 H5 H6 H7 H8 K1 -------- -------- -------- -------- -------- --------- Stock price $7.38 $7.38 $7.38 $7.38 $7.38 $7.38 Exercise price $6.00 $8.00 $10.00 $12.50 $15.00 $6.00 Term 4.05 4.05 4.05 4.05 4.05 1.79 Volatility 68.72% 68.72% 68.72% 68.72% 68.72% 68.72% Annual Rate of Quarterly Dividends 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Discount Rate= Bond Equivalent Yield 5.500% 5.500% 5.500% 5.500% 5.500% 5.500% Intermediate Calculations Present value of stock ex-dividend 7.38 7.38 7.38 7.38 7.38 7.38% Present value of exercise price 4.82 6.42 8.03 10.04 12.04 5.44 Cumulative Volatility 138.24% 138.24% 138.24% 138.24% 138.24% 92.06% Call Option Value Proportion of Stock Present Value 84.12% 78.56% 73.56% 68.02% 63.17% 78.53% Proportion of Exercise Price PV (35.08)% (27.72)% (22.58)% (18.03)% (14.78)% (44.81)% Call Option Value $4.51 $4.01 $3.61 $3.21 $2.88 $3.35 Put Option Value Proportion of Stock Present Value (15.88)% (21.44)% (26.44)% (31.98)% (36.83)% (21.47)% Proportion of Exercise Price PV 64.92% 72.28% 77.42% 81.97% 85.22% 55.19% Put Option Value $1.96 3.06 4.27 5.87 7.55 $1.42 Value of call from above $4.51 $4.01 $3.61 $3.21 $2.88 $3.35 Number of options/ warrants 1 1 1 1 1 1 Imputed value $4.51 $4.01 $3.61 $3.21 $2.88 $3.35
VALUATION
Input Variables As of As of As of As of As of As of As of 12/15/97 12/15/97 12/15/97 12/15/97 12/15/97 12/15/97 12/15/97 K2 K3 L1 L1.1 L2 X Z -------- -------- -------- -------- -------- -------- -------- Stock price $7.38 $7.38 $7.38 $7.38 $7.38 $7.38 $7.38 Exercise price $8.00 $10.00 $6.00 $4.00 $8.00 $10.00 $15.00 Term 3.80 5.80 .96 .96 1.96 6.05 4.05 Volatility 68.72% 68.72% 68.72% 68.72% 68.72% 68.72% 68.72% Annual rate of Quarterly Dividends 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Discount Rate= Bond Equivalent Yield 5.500% 5.500% 5.500% 5.500% 5.500% 5.500% 5.500% Intermediate Calculations Present value of Stock Ex- Dividend 7.38 7.38 7.38 7.38 7.38 7.38 7.38 Present value of Exercise Price 6.51 7.30 5.69 3.80 4.19 7.20 12.04 Cumulative Volatility 133.91% 165.46% 67.39% 67.39% 96.25% 168.98% 138.24% Call Option Value Proportion of Stock Present Value 77.72% 79.77% 76.44% 90.70% 69.40% 80.48% 63.17% Proportion of Exercise Price PV (28.22)% (20.58)% (51.86)% (74.16)% (32.45)% (20.30)% (14.78) Call Option Value $3.89 $4.38 $2.68 $3.87 $2.78 $4.47 $2.88 Put Option Value Proportion of Stock Present Value (22.28)% (20.23)% (23.56)% (9.30)% (30.60)% (19.52)% (36.83)% Proportion of Exercise Price PV 71.78% 79.42% 48.14% 25.84% 67.55% 79.70% 85.22% Put Option Value $3.03 $4.31 $1.00 $0.29 $2.60 $4.30 $7.55 Value of call from above $3.89 $4.38 $2.68 $3.87 $2.78 $4.47 $2.88 Number of options/ warrants 1 1 1 1 1 1 1 Imputed value $3.89 $4.38 $2.68 $3.87 $2.78 $4.47 $2.88
VOLATILITY HISTORICAL VOLATILITY FOR USE WITH FAS 123 Computed Volatility 68.72% Observations per year 13
Continuously Observation Stock Compounded Date Price Dividend Rate of Return - ----------- ----------- ---------- ----------------- 31-Dec-96 5.5 31-Jan-97 6.3125 0.137783702 28-Feb-97 6 (0.050772325) 31-Mar-97 5.5 (0.087011377) 30-Apr-97 5.5 0 31-May-97 4.375 (0.228841572) 30-Jun-97 3.375 (0.259511195) 31-Jul-97 3.5 0.036367644 30-Aug-97 3.375 (0.036367644) 30-Sep-97 4.25 0.230523659 31-Oct-97 6.5 0.424883194 28-Nov-97 6.375 (0.019418086) 15-Dec-97 7.375 0.145711811
EX-10.1 4 Exhibit 10.1 EMPLOYMENT AGREEMENT --------------------- This Agreement effective as of December 1, 1997, by and between Bion Enviromental Technologies, Inc. ("Company"), and Jon Northrop ("Employee"). Company and Employee agree that, in order to preserve cash for operations of the Company, $100,000 of the salary in Paragraph 3 of this Agreement will be paid in cash according to the other terms of Paragraph 3, and the remaining $50,000 shall be accrued until such time as sufficient cash is available for payment. WHEREAS, Employee does at present act as an officer and director of the Company; WHEREAS, the Company desires to continue to retain the services of Employee as an employee upon the conditions contained in this Agreement; and WHEREAS, Employee desires to provide services to the Company under such conditions; NOW, THEREFORE, in consideration of the mutual covenants and conditions hereinafter set forth, the Company does hereby agree to engage Employee and Employee does hereby agree to be engaged by the Company, upon the terms and conditions set forth in the following paragraphs: 1. Employment Period. The Company hereby engages Employee for the ----------------- period commencing December 1, 1997 and ending December 31, 2002 ("Employment Period") to continue to serve in all present positions with the Company and to render such other services in an executive capacity as the Company shall reasonably require. Employee hereby agrees to remain in the employ of the Company for the Employment Period, subject to the provisions of this Agreement. Employee may terminate his employment with the Company upon 90 days written notice to the Company, in which case this Agreement shall terminate without liability one to the other upon the date specified by Employee. 2. Duties. Employee agrees that at all times during the Employment ------ Period he will faithfully and diligently endeavor to promote the business and business interests of the Company. This Agreement shall not restrict Employee from engaging, directly or indirectly, in any business or activity which is not competitive with the business of the Company; provided, however, that such additional business or activity does not interfere with nor is inconsistent with the performance by the Employee of his duties under this Agreement. 3. Salary and Benefits. Subject to the provisions of this --------------------- Agreement, during the Employment Period, Employee shall be compensated as follows: a.) Employee shall earn a salary of $150,000 per annum, payable in monthly installments, subject to customary payroll deductions for Federal, State, and local taxes and to such other deductions as are required by law or by mutual agreement of the Company and Employee. b.) The Board of Directors of the Company will review Employee's salary no less than once per year with a view to making such increases in Employee's salary or declaring such bonuses or other benefits as may be merited and warranted in light of factors considered pertinent by the Board of Directors. c.) Employee shall receive free of cost parking for his automobile; health, hospitalization and life insurance with coverage exceeding or equal to that now in force through the Company; as well as such other benefits as the Board may deem appropriate from time to time. d.) Employee shall be entitled to four weeks vacation per year to be taken at such times as do not interfere with the performance of his duties hereunder. 4. Expenses. All reasonable and necessary expenses incurred by -------- Employee in the performance of his duties under this Agreement, including but not limited to expenses for entertainment, travel, and similar items, shall be paid or reimbursed monthly by the Company upon receipt of appropriate documentation of such expenses. Company shall provide, at its expense, Employee with office space as necessary and secretarial, legal, accounting, and other services as may be necessary to properly support Employee's performance of his duties and to operate in the best interests of the Company. 5. Disability of Employee. In the event of the disability of ----------------------- Employee (as defined herein) prior to the expiration of the Employment Period, Employee shall nevertheless continue to be compensated at his then designated annual rate and with such benefits provided for in Paragraph 3 hereof. For purposes of this Agreement, Employee shall be deemed to be fully disabled if, because of illness or other physical or mental condition, he is unable to fully perform all of his duties under this Agreement for two successive months. In the event that he is unable to perform all or a portion of the duties required under this Agreement for short periods of time aggregating over two months in any twelve successive calendar months, he shall be deemed to be partially disabled. The compensation and benefit period shall run from the time disability commenced until Employee's condition improves sufficiently to permit him to fully perform his duties, after which date he must be available at the Company's option. The Company may require such evidence of disability as it deems appropriate. 6. Termination Upon Death and Disability. The Employment Period ------------------------------------- shall automatically terminate upon the death of Employee; provided, however, that in the event of the Employee's death, all compensation Employee is receiving under Paragraph 3 of this Agreement at the time of his death shall be paid to his legal representative for a period of one year following the date of Employee's death or the remainder of the Employment Period, whichever occurs first. At the discretion of the Board of Directors, the Employment Period may terminate upon the Disability of Employee (as defined in Paragraph 5 above); provided, however, that Employee shall continue to receive compensation in accordance with Paragraph 5 above. 7. Termination for Cause. Upon the occurrence of any of the events --------------------- listed below, the Company may terminate the Employee without further obligation under this Agreement: a.) Employee's conviction of any criminal act directly related to Employee's duties hereunder including, without limitation, misappropriation of funds or property of the Company or any other felony criminal act. b.) Employee's misfeasance or malfeasance in office, which shall mean fraud, dishonesty, willful misconduct or gross neglect of duties. c.) Breach by Employee of any material provision of this Agreement. 8. Termination Without Cause. In the event Employee is terminated ------------------------- by the Company for any reason, except as set forth in Paragraph 7 above, he shall continue to be compensated for the duration of the Employment Period as provided for in Paragraphs 3, 4, 5, and 6 hereof. 9. Termination Upon Change in Management. In the event that a -------------------------------------- change in control of the Company shall occur at any time during the Employment Period, as a result of which the Board of Directors appoints a person other than Employee to serve in the capacity for which Employee is employed hereunder or as a result of which Employee shall elect to resign his executive position hereunder, Employee nevertheless shall be entitled to the benefits of and subject to all of the terms and conditions set forth herein, including, without limitation, the right to receive compensation and benefits as provided in Paragraphs 3, 4, 5, and 6 hereof regardless of whether Employee continues to perform any services for the Company. 10. Vesting in the Event of Termination. In the event that the Employee ----------------------------------- is terminated upon death or disability (Paragraph 6), terminated without cause (Paragraph 8), or terminated upon change in management (Paragraph 9), all warrants, options, or shares issued but unvested at the date of termination shall become fully vested as of the date of termination. 11. Parties in Interest. This Agreement shall be binding upon and shall ------------------- inure to the benefit of the Company and its successors and assigns and any person acquiring, whether by merger, consolidation, liquidation, purchase of assets or otherwise, all or substantially all of the Company's equity or assets and business. 12. Choice of Law. It is the intention of the parties hereto that ------------- this Agreement and the performance hereunder and all suits and special proceedings connected herewith be construed in accordance with and pursuant to the laws of the State of Colorado and that in any action, special proceeding or other proceeding that may be brought arising out of, in connection with, or by reason of this Agreement, the laws of the State of Colorado shall be applicable and shall govern to the exclusion of the law of any other forum, without regard to the jurisdiction in which any action or special proceeding may be instituted. 13. Severance of Invalid Provisions. In the event that any one or ------------------------------- more of the provisions of this Agreement or any portions thereunder is determined to be invalid, illegal, or unenforceable in any respect, the validity, legality, and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. 14. Integrated Agreement. This Agreement shall constitute the entire -------------------- agreement between the parties hereto relating to the Employment of Employee. IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by its duly authorized officer and Employee has executed this Agreement, effective as of the date and year first above written. BION ENVIRONEMTNAL TECHNOLOGIES, INC. By: /s/ Duane Stutzman ---------------------- Authorized Officer EMPLOYEE /s/ Jon Northrop ------------------- Jon Northrop EX-10.2 5 Exhibit 10.2 EMPLOYMENT AGREEMENT --------------------- This Agreement effective as of December 1, 1997, by and between Bion Environmental Technologies, Inc. ("Company"), and Jere Northrop ("Employee"). Company and Employee agree that, in order to preserve cash for operations of the Company, $100,000 of the salary in Paragraph 3 of this Agreement will be paid in cash according to the other terms of Paragraph 3, and the remaining $50,000 shall be accrued until such time as sufficient cash is available for payment. WHEREAS, Employee does at present act as an officer and director of the Company; WHEREAS, the Company desires to continue to retain the services of Employee as an employee upon the conditions contained in this Agreement; and WHEREAS, Employee desires to provide services to the Company under such conditions; NOW, THEREFORE, in consideration of the mutual covenants and conditions hereinafter set forth, the Company does hereby agree to engage Employee and Employee does hereby agree to be engaged by the Company, upon the terms and conditions set forth in the following paragraphs: 1. Employment Period. The Company hereby engages Employee for the ----------------- period commencing December 1, 1997 and ending December 31, 2002 ("Employment Period") to continue to serve in all present positions with the Company and to render such other services in an executive capacity as the Company shall reasonably require. Employee hereby agrees to remain in the employ of the Company for the Employment Period, subject to the provisions of this Agreement. Employee may terminate his employment with the Company upon 90 days written notice to the Company, in which case this Agreement shall terminate without liability one to the other upon the date specified by Employee. 2. Duties. Employee agrees that at all times during the Employment ------ Period he will faithfully and diligently endeavor to promote the business and business interests of the Company. This Agreement shall not restrict Employee from engaging, directly or indirectly, in any business or activity which is not competitive with the business of the Company; provided, however, that such additional business or activity does not interfere with nor is inconsistent with the performance by the Employee of his duties under this Agreement. 3. Salary and Benefits. Subject to the provisions of this --------------------- Agreement, during the Employment Period, Employee shall be compensated as follows: a.) Employee shall earn a salary of $150,000 per annum, payable in monthly installments, subject to customary payroll deductions for Federal, State, and local taxes and to such other deductions as are required by law or by mutual agreement of the Company and Employee. b.) The Board of Directors of the Company will review Employee's salary no less than once per year with a view to making such increases in Employee's salary or declaring such bonuses or other benefits as may be merited and warranted in light of factors considered pertinent by the Board of Directors. c.) Employee shall receive free of cost parking for his automobile; health, hospitalization and life insurance with coverage exceeding or equal to that now in force through the Company; as well as such other benefits as the Board may deem appropriate from time to time. d.) Employee shall be entitled to four weeks vacation per year to be taken at such times as do not interfere with the performance of his duties hereunder. 4. Expenses. All reasonable and necessary expenses incurred by -------- Employee in the performance of his duties under this Agreement, including but not limited to expenses for entertainment, travel, and similar items, shall be paid or reimbursed monthly by the Company upon receipt of appropriate documentation of such expenses. Company shall provide, at its expense, Employee with office space as necessary and secretarial, legal, accounting, and other services as may be necessary to properly support Employee's performance of his duties and to operate in the best interests of the Company. 5. Disability of Employee. In the event of the disability of ----------------------- Employee (as defined herein) prior to the expiration of the Employment Period, Employee shall nevertheless continue to be compensated at his then designated annual rate and with such benefits provided for in Paragraph 3 hereof. For purposes of this Agreement, Employee shall be deemed to be fully disabled if, because of illness or other physical or mental condition, he is unable to fully perform all of his duties under this Agreement for two successive months. In the event that he is unable to perform all or a portion of the duties required under this Agreement for short periods of time aggregating over two months in any twelve successive calendar months, he shall be deemed to be partially disabled. The compensation and benefit period shall run from the time disability commenced until Employee's condition improves sufficiently to permit him to fully perform his duties, after which date he must be available at the Company's option. The Company may require such evidence of disability as it deems appropriate. 6. Termination Upon Death and Disability. The Employment Period ------------------------------------- shall automatically terminate upon the death of Employee; provided, however, that in the event of the Employee's death, all compensation Employee is receiving under Paragraph 3 of this Agreement at the time of his death shall be paid to his legal representative for a period of one year following the date of Employee's death or the remainder of the Employment Period, whichever occurs first. At the discretion of the Board of Directors, the Employment Period may terminate upon the Disability of Employee (as defined in Paragraph 5 above); provided, however, that Employee shall continue to receive compensation in accordance with Paragraph 5 above. 7. Termination for Cause. Upon the occurrence of any of the events --------------------- listed below, the Company may terminate the Employee without further obligation under this Agreement: a.) Employee's conviction of any criminal act directly related to Employee's duties hereunder including, without limitation, misappropriation of funds or property of the Company or any other felony criminal act. b.) Employee's misfeasance or malfeasance in office, which shall mean fraud, dishonesty, willful misconduct or gross neglect of duties. c.) Breach by Employee of any material provision of this Agreement. 8. Termination Without Cause. In the event Employee is terminated ------------------------- by the Company for any reason, except as set forth in Paragraph 7 above, he shall continue to be compensated for the duration of the Employment Period as provided for in Paragraphs 3, 4, 5, and 6 hereof. 9. Termination Upon Change in Management. In the event that a -------------------------------------- change in control of the Company shall occur at any time during the Employment Period, as a result of which the Board of Directors appoints a person other than Employee to serve in the capacity for which Employee is employed hereunder or as a result of which Employee shall elect to resign his executive position hereunder, Employee nevertheless shall be entitled to the benefits of and subject to all of the terms and conditions set forth herein, including, without limitation, the right to receive compensation and benefits as provided in Paragraphs 3, 4, 5, and 6 hereof regardless of whether Employee continues to perform any services for the Company. 10. Vesting in the Event of Termination. In the event that the Employee ----------------------------------- is terminated upon death or disability (Paragraph 6), terminated without cause (Paragraph 8), or terminated upon change in management (Paragraph 9), all warrants, options, or shares issued but unvested at the date of termination shall become fully vested as of the date of termination. 11. Parties in Interest. This Agreement shall be binding upon and shall ------------------- inure to the benefit of the Company and its successors and assigns and any person acquiring, whether by merger, consolidation, liquidation, purchase of assets or otherwise, all or substantially all of the Company's equity or assets and business. 12. Choice of Law. It is the intention of the parties hereto that ------------- this Agreement and the performance hereunder and all suits and special proceedings connected herewith be construed in accordance with and pursuant to the laws of the State of Colorado and that in any action, special proceeding or other proceeding that may be brought arising out of, in connection with, or by reason of this Agreement, the laws of the State of Colorado shall be applicable and shall govern to the exclusion of the law of any other forum, without regard to the jurisdiction in which any action or special proceeding may be instituted. 13. Severance of Invalid Provisions. In the event that any one or ------------------------------- more of the provisions of this Agreement or any portions thereunder is determined to be invalid, illegal, or unenforceable in any respect, the validity, legality, and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. 14. Integrated Agreement. This Agreement shall constitute the entire -------------------- agreement between the parties hereto relating to the Employment of Employee. IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by its duly authorized officer and Employee has executed this Agreement, effective as of the date and year first above written. BION ENVIRONMENTAL TECHNOLOGIES, INC. By: /s/ Jon Northrop -------------------- Authorized Officer EMPLOYEE /s/ Jere Northrop ------------------- Jere Northrop EX-10.3 6 Exhibit 10.3 EMPLOYMENT AGREEMENT --------------------- This Agreement is effective as of December 1, 1997 by and between Bion Environmental Technologies, Inc. ("Company") and M. Duane Stutzman ("Employee"). Company and Employee agree that, in order to preserve cash for operations of the Company, $90,000 of the salary in Paragraph 3 of this Agreement will be paid in cash according to the other terms of Paragraph 3, and the remaining $30,000 shall be accrued until such time as sufficient cash is available for payment. WHEREAS, Employee acts as an officer and director of the Company; and WHEREAS, the Company desires to continue to retain the services of Employee as an employee upon the conditions contained in this Agreement; and WHEREAS, Employee desires to provide services to the Company under such conditions; NOW, THEREFORE, in consideration of the mutual covenants and conditions hereinafter set forth, the Company does hereby agree to engage Employee and Employee does hereby agree to be engaged by the Company, upon the terms and conditions set forth in the following paragraphs: 1. Employment Period. The Company hereby engages Employee for the ----------------- period commending December 1, 1997 and ending December 31, 2002 ("Employment Period") to serve as Chief Financial Officer for the Company and to render such other services in an executive capacity as the Company shall reasonably require. Employee hereby agrees to remain in the employ of the Company for the Employment Period, subject to the provisions of this Agreement. Employee may terminate his employment with the Company upon 90 days written notice to the Company, in which case this Agreement shall terminate without liability one to the other upon the date specified by Employee. 2. Duties. Employee agrees that at all times during the Employment ------ Period he will faithfully and diligently endeavor to promote the business and business interests of the Company. This Agreement shall not restrict Employee from engaging, directly or indirectly, in any business or activity which is not competitive with the business of the Company; provided, however, that such additional business or activity does not interfere with nor is inconsistent with the performance by the Employee of his duties under this Agreement. 3. Salary and Benefits. Subject to the provisions of this --------------------- Agreement, during the Employment Period, Employee shall be compensated as follows: a.) Employee shall earn a salary of $120,000 per annum, payable in monthly installments, subject to customary payroll deductions for Federal, State, and local taxes and to such other deductions as are required by law or by mutual agreement of the Company and Employee. b.) The Board of Directors of the Company will review Employee's salary no less than once per year with a view to making such increases in Employee's salary or declaring such bonuses or other benefits as may be merited and warranted in light of factors considered pertinent by the Board of Directors. c.) Employee shall receive free of cost parking for his automobile; health, hospitalization and life insurance with coverage exceeding or equal to that now in force through the Company; as well as such other benefits as the Board may deem appropriate from time to time. d.) Employee shall be entitled to four weeks vacation per year to be taken at such times as do not interfere with the performance of his duties hereunder. 4. Expenses. All reasonable and necessary expenses incurred by -------- Employee in the performance of his duties under this Agreement, including but not limited to expenses for entertainment, travel, and similar items, shall be paid or reimbursed no less than monthly by the Company upon receipt of appropriate documentation of such expenses. Company shall provide, at its expense, Employee with office space as necessary and secretarial, legal, accounting, and other services as may be necessary to properly support Employee's performance of his duties and to operate in the best interests of the Company. 5. Disability of Employee. In the event of the disability of ----------------------- Employee (as defined herein) prior to the expiration of the Employment Period, Employee shall nevertheless continue to be compensated at his then designated annual rate and with such benefits provided for in Paragraph 3 hereof for a period of twelve months from the date of disability. For purposes of this Agreement, Employee shall be deemed to be fully disabled if, because of illness or other physical or mental condition, he is unable to fully perform all of his duties under this Agreement for two successive months. In the event that he is unable to perform all or a portion of the duties required under this Agreement for short periods of time aggregating over two months in any twelve successive calendar months, he shall be deemed to be partially disabled. The compensation and benefit period shall run from the time disability commenced until Employee's condition improves sufficiently to permit him to fully perform his duties, after which date he must be available at the Company's option. The Company may require such evidence of disability as it deems appropriate. 6. Termination Upon Death and Disability. The Employment Period ------------------------------------- shall automatically terminate upon the death of Employee; provided, however, that in the event of the Employee's death, all compensation Employee is receiving under Paragraph 3 of this Agreement at the time of his death shall be paid to his legal representative for a period of six months following the date of Employee's death or the remainder of the Employment Period, whichever occurs first. At the discretion of the Board of Directors, the Employment Period may terminate upon the Disability of Employee (as defined in Paragraph 5 above); provided, however, that Employee shall continue to receive compensation in accordance with Paragraph 5 above. 7. Termination for Cause. Upon the occurrence of any of the events --------------------- listed below, the Company may terminate the Employee without further obligation under this Agreement: a.) Employee's conviction of any criminal act directly related to Employee's duties hereunder including, without limitation, misappropriation of funds or property of the Company or any other felony criminal act. b.) Employee's misfeasance or malfeasance in office, which shall mean fraud, dishonesty, willful misconduct or gross neglect of duties. c.) Breach by Employee of any material provision of this Agreement. 8. Termination Without Cause. In the event Employee is terminated ------------------------- by the Company for any reason, except as set forth in Paragraph 7 above, he shall continue to be compensated for the duration of the Employment Period or twelve months, whichever occurs first, as provided for in Paragraphs 3, 4, 5, and 6 hereof. 9. Termination Upon Change in Management. In the event that a -------------------------------------- change in control of the Company shall occur at any time during the Employment Period, as a result of which the Board of Directors appoints a person other than Employee to serve in the capacity for which Employee is employed hereunder or as a result of which Employee shall elect to resign his executive position hereunder, Employee nevertheless shall be entitled to the benefits of and subject to all of the terms and conditions set forth herein, including, without limitation, the right to receive compensation and benefits as provided in Paragraphs 3, 4, 5, and 6 hereof for the remainder of the Employment Period regardless of whether Employee continues to perform any services for the Company. 10. Vesting in the Event of Termination. In the event that the ------------------------------------ Employee is terminated upon death or disability (Paragraph 6), terminated without cause (Paragraph 8), or terminated upon change in management (Paragraph 9), all warrants, options, or shares issued but unvested at the date of termination shall become fully vested as of the date of termination. 11. Parties in Interest. This Agreement shall be binding upon and shall ------------------- inure to the benefit of the Company and its successors and assigns and any person acquiring, whether by merger, consolidation, liquidation, purchase of assets or otherwise, all or substantially all of the Company's equity or assets and business. 12. Choice of Law. It is the intention of the parties hereto that ------------- this Agreement and the performance hereunder and all suits and special proceedings connected herewith be construed in accordance with and pursuant to the laws of the State of Colorado and that in any action, special proceeding or other proceeding that may be brought arising out of, in connection with, or by reason of this Agreement, the laws of the State of Colorado shall be applicable and shall govern to the exclusion of the law of any other forum, without regard to the jurisdiction in which any action or special proceeding may be instituted. 13. Severance of Invalid Provisions. In the event that any one or ------------------------------- more of the provisions of this Agreement or any portion thereunder is determined to be invalid, illegal, or unenforceable in any respect, the validity, legality, and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. 14. Integrated Agreement. This Agreement shall constitute the entire -------------------- agreement between the parties hereto relating to the employment of Employee. IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by its duly authorized officer and Employee has executed this Agreement, effective as of the date and year first above written. Bion Environmental Technologies, Inc. By: /s/ Jon Northrop ------------------ Authorized Officer EMPLOYEE /s/ M. Duane Stutzman ------------------------ M. Duane Stutzman EX-10.4 7 Exhibit 10.4 BION NMS TM INSTALLATION AGREEMENT CLOSING MEMORANDUM / ADDENDUM #3 It is AGREED this 31st day of December, 1997 between the undersigned that the agreements attached hereto at EXHIBIT A are amended as set forth herein (EXHIBIT A is incorporated herein by reference): 1.) In consideration of the receipt of $100,000 paid this day by Bowman Family Farms, Inc. and/or Crystal Springs Farms, LLC (collectively "BFF") to Bion Technologies, Inc. ("BION") pursuant to paragraph 5 A.i of EXHIBIT A, the agreements set forth at EXHIBIT A are now binding on BFF and BION and all contingencies are met and/or have been waived and work under said agreement shall commence. 2.) Michael Bowman shall become a director of BION ENVIRONMENTAL TECHNOLOGIES, INC. upon completion of all payments required by paragraph 5 A.i of EXHIBIT A. 3.) Section 8 of EXHIBIT A and Attachment C therein shall be amended to provide that: a.) If the payments under paragraph 5 A.i do not occur until after February 16,1998 but before March 15, 1998, the price per unit shall increase to $3.50; b.) If the payments required by paragraph 5 A.i occur between March 15, 1998 and April 14, 1998, the price per unit shall increase to $4.00; c.) If such payments have not been made before April 15, 1998, BFF and BION shall renegotiate the terms of unit purchase to another mutually agreeable higher price; d) BFF shall have the option of either increasing the total dollars paid for the units or decreasing the number of units purchased to reflect the higher price per unit. 4.) a.) If greater than 12 BION NMS Systems are required for performance of Phase I, the fees due BION pursuant to paragraph 5 A.i, shall increase by $20,000 for each such system above 12; b.) the fees required by paragraph 6 A.ii shall increase by $600 per month for each system above 12. 5.) Upon exercise of the option for Phase II, BFF and BION shall agree upon a work schedule and coordinate a fee schedule with such work schedule provided, however, that all fees shall be paid prior to the end of construction. 6.) If desired, the parties may subsequently incorporate this document into a more formal document but the parties agree that this shall be binding when executed below. BOWMAN FAMILY FARMS, INC. BION TECHNOLOGIES, INC. By: /s/ Michael A. Bowman By: /s/ Jon Northrop -------------------------- ------------------ Authorized Officer Authorized Officer CRYSTAL SPRINGS FARMS, LLC By: /s/ Michael A. Bowman ---------------------------- Authorized Officer EX-99.1 8 Detailed Calculations for Warrant Exchange Transaction Exhibit 99.1
Holder Class Number Blk/Sch Exch/Val #Shares@ (Blk/Sch Times #Shares $7.375 # of Warrants) @$7.375 Times $5.50 - ------- ------ ------ ------- -------------- ------- ----------- Delta Petroleum A 125,000 $1.69 $211,250 125,000 $211,250 28,644 $157,542 Dublin Holding, Ltd. E1 2,209,764 $4.51 $9,966,036 K1 50,000 $3.35 $167,500 K2 50,000 $3.89 $194,500 K3 50,000 $4.38 $219,000 L1 50,000 $2.68 $134,000 L1.1 35,000 $3.87 $135,450 L2 35,000 $2.78 $97,300 X 450,000 $4.47 $2,011,500 2,929,764 $12,925,286 1,752,581 $9,639,196 Freedman, Stanley E1 15,000 $4.51 $67,650 15,000 $67,650 9,173 $50,451 Keller, Mark E1 3,000 $4.51 $13,530 X 5,000 $4.47 $22,350 8,000 $35,880 4,865 $26,758 Keller, Richard E1 3,000 $4.51 $13,530 X 3,000 $4.47 $13,410 6,000 $26,940 3,653 $20,091 LoTayLing Kyur E1 650,000 $4.51 $2,931,500 L1.1 15,000 $3.87 $58,050 L2 15,000 $2.78 $41,700 680,000 $3,031,250 411,017 $2,260,593 Moone, Chas E1 5,000 $4.51 $22,550 X 5,000 $4.47 $22,350 10,000 $44,900 6,088 $33,485
Continued below
Current # of Total # of Z Pre-Exchange Shares % Total Holder Ram Val Warrants Shares 1/1/98 1/1/98 Shares - -------- ----------- -------------- --------- --------- --------- Delta Petroleum $53,708 18,648 156,778 185,422 2.1663 Dublin Holding, $3,286,090 1,141,003 748,209 2,500,790 29.2167 Ltd. Freedman, Stanley $17,199 5,972 0 9,173 0.1072 Keller, Mark $9,122 3,167 150 5,015 0.0586 Keller, Richard $6,849 2,378 350 4,003 0.0468 LoTayLing Kyur $770,657 267,589 1,095,990 1,507,007 17.6063 Moone, Chas $11,415 3,964 0 6,088 0.0711
# Shares @ $7.375 (Blk/Sch Times # Shares Times Holder Class Number Blk/Sch # of Warrants) @$7.375 $5.50 - ------ ------ -------- -------- --------------- --------- -------- Moone, Chris E1 50,000 $4.51 $225,500 X 50,000 $4.47 $223,500 100,000 $449,000 60,881 $334,847 Moone, Quenby E1 35,000 $4.51 $157,850 X 20,000 $4.47 $89,400 55,000 $247,250 33,525 $184,390 Mukpo,O.R. E1 10,000 $4.51 $45,100 X 10,000 $4.47 $44,700 20,000 $89,800 12,176 $66,969 Namgyel, DKJ E1 50,000 $4.51 $225,500 X 50,000 $4.47 $223,500 100,000 $449,000 60,881 $334,847 Northrop, Hallie E1 20,000 $4.51 $90,200 20,000 $90,200 12,231 $67,268 Northrop, Harley E1 31,500 $4.51 $142,065 31,500 $142,065 19,263 $105,947 Northrop, Jere A 125,000 $1.69 $211,250 E1 700,000 $4.51 $3,157,000 X 150,000 $4.47 $670,500 975,000 $4,038,750 547,627 $3,011,949 Northrop, Jon A 125,000 $1.69 $211,250 E1 685,000 $4.51 $3,089,350 X 150,000 $4.47 $670,500 960,000 $3,971,100 538,454 $2,961,498 Northrop, Lara E1 25,000 $4.51 $112,750 25,000 $112,750 15,288 $84,085 Northrop, Stephanie E1 20,000 $4.51 $90,200 20,000 $90,200 12,231 $67,268
Continued below.
Current # of Total # of Z Pre-Exchange Shares % Total Holder Rem Val Warrants Shares 1/1/98 1/1/98 Shares - ------- ------- -------- ------------- ------ -------- Moone, Chris $114,153 39,636 3,900 64,781 0.7568 Moone, Quenby $62,860 21,826 2,715 36,240 0.4234 Mukpo, O.R. $22,831 7,927 2,800 14,976 0.1750 Namgyel, DKJ $114,153 39,636 1,600 62,481 0.7300 Northrop, Hallie $22,932 7,963 29,275 41,506 0.4849 Northrop, Harley $36,118 12,541 139,558 158,821 1.8555 Northrop, Jere $1,026,801 356,528 146,413 694,040 8.1085 Northrop, Jon $1,009,602 350,556 133,913 672,367 7.8553 Northrop, Lara $28,665 9,953 54,550 69,838 0.8159 Northrop, Stephanie $22,932 7,963 29,275 41,506 0.4849
Exch/Val # Shares @ (Blk/Sch Times) # Shares $7.375 Holder Class Number Blk/Sch # of Warrants) @$7.375 Times $5.50 - ------ ------- -------- --------- --------------- ---------- ----------- Robeck, Susan E1 3,000 $4.51 $13,530 X 3,000 $4.47 $13,410 6,000 $26,940 3,653 $20,091 Schlegel- milch,B E1 1,000 $4.51 $4,510 X 1,000 $4.47 $4,470 2,000 $8,980 1,218 $6,697 Schlegel- milch,D E1 1,000 $4.51 $4,510 X 1,000 $4.47 $4,470 2,000 $8,980 1,218 $6,697 Schlegel- milch,M E1 10,000 $4.51 $45,100 X 10,000 $4.47 $44,700 20,000 $89,800 12,176 $66,969 Scott, Craig & G5.1 3,052 $5.33 $16,267 Scott, Julie G5.2 4,723 $5.49 $25,929 G6 9,665 $4.63 $44,749 G9 40,000 $5.33 $213,200 G9.1 40,000 $4.27 $170,800 G9.2 80,000 $3.58 $286,400 G9.3 75,000 $5.33 $399,750 G9.4 65,000 $3.58 $232,700 G9.5 50,000 $4.73 $236,500 367,440 $1,626,295 220,515 Smith, Ben & E1 10,000 $4.51 $45,100 Smith, Rowena 10,000 $45,100 6,115 Smith,Diana E1 70,000 $4.51 $315,700 X 30,000 $4.47 $134,100 100,000 $449,800 60,990 Smith,Jesse E1 1,000 $4.51 $4,510 X 1,000 $4.47 $4,470 2,000 $8,980 1,218
Continued below.
Current # of Total # of Z Pre-Exchange Shares % Total Holder Rem Val Warrants Shares 1/1/98 1/1/98 Shares - ------ ------- -------- ------------- ------ ------- Robeck, Susan $6,849 2,378 1,908 5,561 0.0650 Schlegel- milch, B. $2,283 793 0 1,218 0.0142 Schlegel- milch, D. $2,283 793 0 1,218 0.0142 Schlegel- milch, M. $22,831 7,927 150 12,326 0.1440 Scott, Craig & Scott, Julie $413,465 143,564 54,200 274,715 3.2095 Smith, Ben & Smith Rowena 11,466 3,981 22,300 28,415 0.3320 Smith, Diana $114,356 39,707 5,000 65,990 0.7710 Smith, Jesse $2,283 793 750 1,968 0.0230
# Shares @ (Blk/Sch Times # Shares $7.375 Holder Class Number Blk/Sch # of Warrants) @$7.375 Times $5.50 - ------- -------- ------- ---------- --------------- ---------- ------------ Smith, Mark & E1 147,154 $4.51 $663,665 Moone, Kelly X 400,154 $4.47 $1,788,688 547,308 $2,452,353 332,522 $1,828,873 Smith,N.T. E1 3,000 $4.51 $13,530 X 3,000 $4.47 $13,410 6,000 $26,940 3,653 $20,091 Smith, Pamela E1 3,000 $4.51 $13,530 X 3,000 $4.47 $13,410 6,000 $26,940 3,653 $20,091 Smith, Rosalynde E1 70,000 $4.51 $315,700 X 30,000 $4.47 $134,100 100,000 $449,800 60,990 $335,444 Smith, Shannon L. E1 1,000 $4.51 $4,510 X 1,000 $4.47 $4,470 2,000 $8,980 1,218 $6,697 Smith,Su. T. E1 10,000 $4.51 $45,100 X 10,000 $4.47 $44,700 20,000 $89,800 12,176 $66,969 Smith-Osrow, J E1 1,000 $4.51 $4,510 X 1,000 $4.47 $4,470 2,000 $8,980 1,218 $6,697 Stutzman, Duane E1 20,000 $4.51 $90,200 H3 25,000 $5.16 $129,000 H4 25,000 $4.51 $112,750 H5 20,000 $4.01 $80,200 H6 40,000 $3.61 $144,400 H7 30,000 $3.21 $96,300 H8 30,000 $2.88 $86,400 190,000 $739,250 100,237 $551,305 TOTAL 4,351,348 $23,932,412
Continued below
Current # of Total # of Z Pre-Exchange Shares % Total Holder Rem Val Warrants Shares 1/1/98 1/1/98 Shares - ------ -------- ---------- -------------- -------- --------- Smith, Mark & Moone Kelly $623,480 216,486 187,300 519,822 6.0731 Smith, N.T. $6,849 2,378 2,500 6,153 0.0719 Smith, Pamela $6,849 2,378 500 4,153 0.0485 Smith, Rosalynde $114,356 39,707 5,000 65,990 0.7710 Smith, Shannon L. 2,283 793 750 1,968 0.0230 Smith, Su. T. $22,831 7,927 0 12,176 0.1423 Smith- Osrow, J. $2,283 793 750 1,968 0.0230 Stutzman, Duane $187,945 65,259 33,583 133,820 1.5634 TOTAL $8,158,777 2,832,909 2,860,167 7,211,515 84.25
EX-99.2 9 Exhibit 99.2 Warrants Exchanged in Warrant Exchange Transaction
Exercise Period ----------------------- Beginning End Class Shares Price Date Date A 375,000 $10.00 04/09/98 04/09/99 E1 4,863,418 6.00 01/01/01 12/31/01 G5.1 3,052 3.00 01/22/96 01/21/01 G5.2 4,723 3.00 09/13/96 09/12/01 G6 9,665 6.00 04/21/97 04/20/02 G9 40,000 4.00 08/01/97 08/01/02 G9.1 40,000 8.00 08/01/97 08/01/02 G9.2 80,000 12.00 08/01/97 08/01/02 G9.3 75,000 4.00 01/15/98 08/01/02 G9.4 65,000 6.00 01/15/98 08/01/02 G9.5 50,000 12.00 01/15/98 08/01/02 H3 25,000 4.00 09/15/97 12/31/01 H4 25,000 6.00 09/15/97 12/31/01 H5 20,000 8.00 09/15/97 12/31/01 H6 40,000 10.00 09/15/98 12/31/01 H7 30,000 12.50 09/15/99 12/31/01 H8 30,000 15.00 09/15/99 12/31/01 K1 50,000 6.00 03/01/98 10/01/99 K2 50,000 8.00 03/01/00 10/01/01 K3 50,000 10.00 03/01/02 10/01/03 L1 50,000 6.00 06/01/98 12/01/98 L1.1 50,000 4.00 06/01/98 12/01/98 L2 50,000 8.00 06/01/99 12/01/99 X 1,387,154 10.00 01/01/03 12/31/03 Total Exchanged 7,463,012
EX-99.3 10 Exhibit 99.3 Warrants Outstanding on January 1, 1998, post Warrant Exchange Transaction
Exercise Period ---------------------- Beginning End Class Shares Price Date Date Vested G 25,000 $5.00 06/20/96 06/20/99 G5.1 3,678 3.00 01/22/96 01/21/01 G5.2 827 3.00 09/13/96 09/12/01 G6 4,172 6.00 04/21/97 04/20/02 G7 35,000 4.00 06/05/97 06/30/99 G8 100,000 6.00 06/05/97 06/30/00 H1 10,000 5.00 08/21/96 08/20/01 H2 14,500 3.00 08/21/96 08/20/01 H9 10,000 10.00 02/01/97 12/31/01 H9.1 10,000 12.50 02/01/97 12/31/01 H9.2 10,000 8.00 02/01/97 12/31/01 H9.3 10,000 15.00 02/01/97 12/31/01 H9.4 10,000 6.00 02/01/97 12/31/01 I1 3,750 6.00 06/09/98 12/31/01 K1 50,000 6.00 03/01/98 10/01/99 Z 2,832,909 15.00 01/01/00 12/31/01 Total Vested 3,129,836 Non-Vested I2.1 3,750 $8.00 06/09/99 12/31/01 I2.2 3,750 10.00 06/09/99 12/31/01 I2.3 3,750 12.50 06/09/99 12/31/01 Total Non-Vested 11,250 Total Warrants 3,141,086
EX-99.4 11 Exhibit 99.4 Options Outstanding on January 1, 1998
Exercise Period ---------------------- Beginning End Shares Price Date Date Vested 7,500 $5.00 08/31/96 06/30/98 14,000 5.00 08/31/96 04/30/98 10,000 1.72 08/20/97 08/19/02 10,000 2.27 08/20/97 08/19/02 1,247 4.00 10/21/97 12/31/01 25,000 6.75 10/07/97 03/31/98 18,519 4.00 09/15/97 12/31/01 10,000 6.00 09/15/97 12/31/01 694 4.00 12/16/97 12/31/01 17,500 4.00 08/01/97 08/01/02 5,000 6.25 10/06/97 12/31/98 10,000 6.25 10/06/97 09/30/98 5,000 6.75 10/06/97 03/31/99 10,000 7.25 10/06/97 03/31/99 Total Vested 144,460 Non- Vested 1,247 $6.00 10/21/98 12/31/01 1,246 8.00 10/21/99 12/31/01 1,200 4.00 02/03/98 12/31/01 1,200 6.00 02/03/99 12/31/01 1,200 8.00 02/03/00 12/31/01 8,517 6.00 09/15/98 12/31/01 8,516 8.00 09/15/99 12/31/01 10,000 8.00 09/15/98 12/31/01 10,000 10.00 09/15/98 12/31/01 10,000 12.50 09/15/99 12/31/01 10,000 15.00 09/15/99 12/31/01 834 4.00 06/02/98 12/31/01 833 6.00 06/02/99 12/31/01 833 8.00 06/02/00 12/31/01 693 6.00 12/16/98 12/31/01 693 8.00 12/16/99 12/31/01 1,734 4.00 08/04/98 12/31/01 1,733 6.00 08/04/99 12/31/01 1,733 8.00 08/04/00 12/31/01 1,000 4.00 06/09/98 12/31/01 1,000 6.00 06/09/99 12/31/01 1,000 8.00 06/09/00 12/31/01 1,334 4.00 08/11/98 12/31/01 1,333 6.00 08/11/99 12/31/01 1,333 8.00 08/11/00 12/31/01 Total Non- Vested 79,212 Total Options 223,672
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