<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
GAMMA BIOLOGICALS, INC.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
---------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
----------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------------------
(5) Total fee paid:
---------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
GAMMA BIOLOGICALS, INC.
3700 MANGUM ROAD, HOUSTON, TEXAS 77092
JUNE 28, 1995
Dear Shareholder:
You are cordially invited to attend the annual meeting of shareholders to be
held August 10, 1995, at 3:00 p.m., Central time, at the offices of the
Company, 3700 Mangum Road, Houston, Texas.
It will be a pleasure for the officers and directors to meet with you and
have an opportunity to answer any questions you may have about Company affairs.
The officers and directors will be available to talk individually with
shareholders before and after the meeting.
Whether or not you plan to attend the meeting, we urge you to sign and return
the enclosed proxy so that your shares will be represented at the meeting.
Sincerely,
[Signature of David E. Hatcher appears here]
David E. Hatcher
Chairman of the Board
<PAGE>
GAMMA BIOLOGICALS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The annual meeting of shareholders of Gamma Biologicals, Inc. (the "Company")
will be held August 10, 1995, at 3:00 p.m., Central time, at the offices of the
Company, 3700 Mangum Road, Houston, Texas 77092, for the following purposes:
1. To elect directors;
2. To consider and act upon a proposal to approve the Company's 1995
Employee Stock Option Plan, pursuant to which options to acquire up to
250,000 shares of the Company's Common Stock may be granted to officers
and key employees; and
3. To transact such other business as may properly come before the meeting
or any adjournments thereof.
The Board of Directors has fixed the close of business on June 19, 1995 as
the record date for the meeting, and only holders of Common Stock of record at
such time will be entitled to vote at the meeting or any adjournments thereof.
Further information regarding the meeting and the nominees for election as
directors is set forth in the accompanying proxy statement.
By order of the Board of Directors,
[Signature of Lawrence E. Letwin appears here]
Lawrence E. Letwin
Secretary
June 28, 1995
PLEASE DATE, SIGN AND RETURN THE ENCLOSED PROXY
AT YOUR EARLIEST CONVENIENCE.
<PAGE>
GAMMA BIOLOGICALS, INC.
3700 MANGUM ROAD, HOUSTON, TEXAS 77092
JUNE 28, 1995
----------------
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies for use at the annual meeting of shareholders (the "Meeting") of Gamma
Biologicals, Inc. (the "Company") to be held at the time and place and for the
purposes set forth in the foregoing Notice of Annual Meeting of Shareholders
(the "Notice") and at any adjournments thereof.
SOLICITATION AND VOTING OF PROXIES
The solicitation will be conducted by mail. The Company will bear the expense
of the solicitation of proxies, including the charges and expenses of brokerage
firms and others incurred in forwarding solicitation material to beneficial
owners of stock. Further solicitation of proxies may be made by telephone or
oral communication with shareholders of the Company following the original
solicitation. All further solicitation will be by regular employees of the
Company who will not be additionally compensated therefor.
Proxies in the accompanying form are solicited by the management at the
direction of the Board of Directors. Execution and return of the proxy will not
in any way affect a shareholder's right to attend the Meeting and to vote in
person, and a shareholder giving a proxy has the power to revoke it at any time
before it is exercised by giving written notice to the Company at or prior to
the Meeting. A proxy may also be revoked by execution of a proxy bearing a
later date or by attendance at the Meeting and voting in person by ballot.
Properly executed proxies in the accompanying form, received in due time and
not previously revoked, will be voted as specified. A proxy received by
management which does not withhold authority to vote or on which no
specification has been indicated will be voted for the proposals set forth in
this Proxy Statement and for the nominees for the Board of Directors of the
Company named in Proposal No. 1 of this Proxy Statement. A majority of the
outstanding shares will constitute a quorum at the Meeting. Abstentions and
broker non-votes are counted for purposes of determining the presence or
absence of a quorum for the transaction of business. Abstentions are counted in
tabulations of the votes cast on proposals presented to shareholders, whereas
broker non-votes are not counted for purposes of determining whether a proposal
has been approved.
At the date of this Proxy Statement, management of the Company does not know
of any business to be presented at the Meeting other than those matters which
are set forth in the Notice accompanying this Proxy Statement. If any other
business should properly come before the Meeting, it is intended that the
shares represented by proxies will be voted with respect to such business in
accordance with the judgment of the persons named in the proxy.
1
<PAGE>
COMMON STOCK OUTSTANDING AND PRINCIPAL HOLDERS THEREOF
Only holders of Common Stock of the Company of record at the close of
business on June 19, 1995 are entitled to notice of and to vote at the Meeting.
At that date, there were outstanding 4,541,134 shares of the Company's Common
Stock, which is the only class of stock that has been issued by the Company.
Each shareholder is entitled to one vote for each share of Common Stock held of
record by the shareholder on that date for all matters coming before the
Meeting and, except as otherwise provided by applicable law, a favorable vote
consists of a simple majority of the votes cast. Shareholders are not entitled
to cumulate their votes in the election of directors, which means that the
holders of more than half of the shares voting for the election of directors
can elect all of the directors if they choose to do so.
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth, as of May 1, 1995, the ownership of the
Company's Common Stock by (i) each shareholder, if any, who is known by the
Company to own beneficially more than 5% of the outstanding Common Stock, (ii)
each director, (iii) each named executive officer and (iv) all directors and
executive officers as a group. Except as otherwise indicated, the shareholders
listed in the table have sole voting and investment power with respect to the
shares indicated. All information with respect to beneficial ownership has been
furnished by the shareholders to the Company.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME OF OF BENEFICIAL PERCENT
BENEFICIAL OWNER OWNERSHIP OF CLASS
---------------- ----------------- --------
<S> <C> <C>
Betty Francis Hatcher.......................... 226,205(1) 4.95%
David E. Hatcher............................... 156,099(2) 3.39%
John J. Moulds................................. 33,600(3) *
Bryan J. Brieden............................... 29,820(4) *
John Case...................................... 15,849(5) *
R. Bruce LaBoon................................ 12,500(6) *
Hayle B. Randolph.............................. 10,100(6) *
All executive officers and directors as a group
(10 persons).................................. 521,420(7) 11.04%
ZPR Investment Management, Inc.
1642 N. Volusia Ave.
Orange City, FL 32763......................... 323,800 7.13%
</TABLE>
- - --------
* Less than 1.0%.
(1) Includes 31,106 shares which can be acquired during the next 60 days
pursuant to the exercise of outstanding stock options.
(2) Includes 60,000 shares which can be acquired during the next 60 days
pursuant to the exercise of outstanding stock options and 10,000 shares
owned of record by Patsy J. Hatcher, wife of David E. Hatcher, beneficial
ownership of which is disclaimed by Mr. Hatcher.
(3) Includes 24,875 shares which can be acquired during the next 60 days
pursuant to the exercise of stock options.
(4) Includes 10,000 shares which can be acquired during the next 60 days
pursuant to the exercise of outstanding stock options. Also includes 1,500
shares owned of record by Mrs. Brieden and 726 shares owned of record by
Mrs. Brieden as trustee, beneficial ownership of all of which is disclaimed
by Mr. Brieden.
2
<PAGE>
(5) Includes 7,250 shares which can be acquired during the next 60 days
pursuant to the exercise of outstanding stock options and 799 shares owned
of record by Mrs. Case, beneficial ownership of which is disclaimed by Mr.
Case.
(6) Includes 10,000 shares which can be acquired during the next 60 days
pursuant to the exercise of outstanding stock options.
(7) Includes 181,731 shares which can be acquired during the next 60 days
pursuant to the exercise of outstanding stock options.
PROPOSAL NO. 1--ELECTION OF DIRECTORS
INFORMATION CONCERNING DIRECTORS
It is proposed that six directors will be elected at the Meeting, each to
hold office until the annual meeting of shareholders in 1996 and until his or
her successor is duly elected and qualified. The Company has no reason to
believe that any nominee will be unavailable to serve at the time of election.
All the nominees are presently members of the Board of Directors of the
Company. There are no family relationships among any of the directors of the
Company. The names of the nominees, together with information as to their
principal occupations, age, and experience, are as follows:
<TABLE>
<CAPTION>
DIRECTOR
NAME PRINCIPAL OCCUPATION AGE SINCE
---- -------------------- --- --------
<S> <C> <C> <C>
Bryan J. Brieden........ Consultant(1) 67 1970
Betty Francis Hatcher... Executive Vice President--Product 62 1988
Development and Assistant Secretary of the
Company(2)
David E. Hatcher........ Chairman of the Board and Chief Executive 72 1970
Officer of the Company(3)
R. Bruce LaBoon......... Partner, Law Firm of Liddell, Sapp, Zivley, 54 1991
Hill & LaBoon, L.L.P.(4)
John J. Moulds.......... President and Chief Operating Officer of 51 1991
the Company(5)
Hayle B. Randolph....... Blood services consultant(6) 64 1991
</TABLE>
- - --------
(1) In 1994, Mr. Brieden retired as President of Bryan Biologicals, Inc., a
distributor of laboratory supplies, a position he held for more than five
years. Mr. Brieden now serves as a consultant to Bryan Biologicals, Inc.
(2) Ms. Hatcher served as the Senior Vice President and Secretary of the
Company prior to becoming a consultant to the Company in 1988. Ms. Hatcher
was appointed Assistant Secretary of the Company in February 1989 and was
appointed Director of Product Development of the Company in February 1990.
She was appointed Executive Vice President of the Company in August 1992.
(3) Mr. Hatcher also served as the President of the Company until June 1992.
(4) Mr. LaBoon served as a director of the Company from 1979 through 1986.
(5) Mr. Moulds joined the Company in 1975 and became Vice President--
Consultation and Education in 1980. Mr. Moulds became Executive Vice
President and Chief Operating Officer of the Company in 1989 and was
appointed President and Chief Operating Officer of the Company in June
1992.
(6) Mr. Randolph served as President and Chief Executive Officer of Blood
Systems, Inc. until his retirement in March 1991. Mr. Randolph served as a
consultant on various projects for Blood Systems, Inc. and as the Executive
Director of Blood Systems Research Foundation until January 15, 1993 and is
currently an independent consultant to the blood services industry.
3
<PAGE>
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company met four times during fiscal 1995. The
Board has established two standing committees, the Audit Committee and the
Compensation/Stock Option Committee, both comprised of Messrs. Brieden, LaBoon
and Randolph. The Audit Committee exercises oversight with respect to the
Company's accounting practices and procedures and its relationship with its
independent auditors, and the Compensation/Stock Option Committee makes
recommendations to the Board of Directors regarding the compensation of
officers and employees of the Company and the granting of options under the
Company's 1991 Employee Stock Option Plan. The Audit Committee met two times
during fiscal 1995, and the Compensation/Stock Option Committee met one time
during fiscal 1995. There is no nominating committee. No incumbent director
attended fewer than 75% of the total number of meetings of the Board of
Directors and of all committees of the board on which he or she served in
fiscal 1995.
DIRECTOR COMPENSATION
Directors of the Company who are also employees of the Company do not receive
fees for attending meetings of the Board of Directors. Non-employee directors
of the Company receive a retainer of $3,000 per year, payable in quarterly
installments, and a fee of $600 for each meeting of the Board of Directors and
for each meeting of each committee of the Board of Directors attended by such
director.
EXECUTIVE OFFICERS
The following table sets forth the names, ages, length of service as an
officer, and the positions of the persons who are not directors and who are
executive officers of the Company:
<TABLE>
<CAPTION>
NAME AGE OFFICER SINCE POSITION
---- --- ------------- --------
<S> <C> <C> <C>
John Case.................. 68 1980 Vice President--Regulatory Affairs
Margaret J. O'Bannion...... 40 1989 Vice President--Finance and Chief
Financial Officer
Jimmie L. Turner........... 56 1989 Vice President--Customer Services
Gary L. Parrish............ 58 1994 Vice President--National Sales
</TABLE>
Mr. Case joined the Company in 1976 and became Vice President--Regulatory
Affairs in 1980. Ms. O'Bannion joined the Company in 1978 and was named
Controller of the Company in 1987. Ms. O'Bannion became Vice President--Finance
and Chief Financial Officer in August 1989. Mr. Turner joined the Company in
1976 as a sales representative and became Vice President--Customer Services in
August 1989. Mr. Parrish joined the Company in 1977 as a sales representative
and was named National Sales Manager in 1988. He became Vice President--
National Sales in August 1994.
4
<PAGE>
COMPENSATION/STOCK OPTION COMMITTEE REPORT(/1/)
The Compensation/Stock Option Committee of the Board of Directors (the
"Committee") is composed entirely of outside directors and is responsible for
developing and making recommendations to the Board with respect to the
Company's executive compensation policies. This Committee Report sets forth the
components of the Company's executive officer compensation and describes the
basis on which the fiscal 1995 compensation determinations were made by the
Committee with respect to the executive officers of the Company.
In designing its executive compensation programs, the Company follows its
belief that executive compensation should reflect the value created for
shareholders while supporting the Company's strategic goals. The following
objectives have been adopted by the Committee:
1. Executive compensation should be meaningfully related to the value
created for shareholders;
2. Executive compensation programs should reflect and promote the Company's
value and reward individuals for outstanding contributions to the
Company's success; and
3. Short and long term executive compensation play a critical role in
attracting and retaining well qualified executives.
The Committee currently implements a compensation program based on three
components: a base salary, a bonus program related to Company and individual
performance during the relevant year, and a stock option program. The Committee
regularly reviews the various components of the Company's executive
compensation to ensure that they are consistent with the Company's objectives.
BASE SALARY. The Committee, in recommending the appropriate base salaries of
the Company's executive officers, generally considers the level of executive
compensation in similar companies in the industry. In addition, the Committee
takes into account (i) the performance of the Company and the roles of the
individual executive officers with respect to such performance and (ii) the
particular executive officer's specific responsibilities, and the long-term
performance of such executive officer in those areas of responsibility.
ANNUAL INCENTIVES. The bonus program provides direct financial incentives, in
the form of an annual cash bonus, to executive officers to achieve and exceed
the Company's annual goals. The Committee recommends cash bonuses based upon
the Committee's evaluation of the contributions of each individual officer
during the applicable fiscal year in achieving the goals of the Company for
that year.
LONG-TERM INCENTIVES. The stock option program is currently the Company's
primary long-term incentive plan for executive officers and key employees. The
objectives of the stock option program are to align executive officer
compensation and shareholder return, and to enable executive officers to
develop and maintain a significant, long-term stock ownership position in the
Company's Common Stock. In addition, grants of stock options to the named
executive officers and others are intended to retain and motivate executives to
improve long-term corporate and stock market performance. Stock options are
granted at the prevailing market value and will only have value if the
Company's stock price increases. Generally, grants of stock options vest in
equal amounts over four years, and executives must be employed by the Company
at the time of vesting in order to exercise a stock option.
- - --------
(1) Notwithstanding filings by the Company with the Securities and Exchange
Commission ("SEC") that have incorporated or may incorporate by reference
other SEC filings (including this proxy statement) in their entirety, this
Compensation Committee Report shall not be incorporated by reference into
such filings and shall not be deemed to be "filed" with the SEC except as
specifically provided otherwise or to the extent required by Item 402 of
the Regulation S-K.
5
<PAGE>
Consistent with the Company's compensation program outlined above,
compensation for each of the named executive officers, as well as other senior
executives, consists of a base salary, bonus and stock options. The base
salaries for the named executive officers for fiscal 1995 were at levels below
competitive amounts paid to executives with comparable qualifications,
experience and responsibilities of other companies engaged in the same or
similar business as the Company. The Committee has not yet determined the
amount of cash bonuses, if any, to be paid to the named executive officers for
fiscal 1995.
The Committee believes that the compensation of the chief executive officer
("CEO") should be impacted by Company performance. Mr. Hatcher founded the
Company in 1970 and has served as its CEO since that time. During fiscal 1995,
Mr. Hatcher received a base salary of $207,834, which the Committee believes to
be average for the base salary for chief executive officers with comparable
qualifications, experience and responsibilities of other companies engaged in
the same or similar business as the Company. At this time, this Committee has
not made a determination as to the bonus, if any, to be paid to Mr. Hatcher,
for fiscal 1995.
Compensation Committee: Bryan J. Brieden, R. Bruce LaBoon and Hayle B.
Randolph.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Except as set forth below, no member of the Compensation/Stock Option
Committee of the Board of Directors of the Company was, during fiscal 1995, an
officer or employee of the Company or any of its subsidiaries, was formerly an
officer of the Company or any of its subsidiaries, or had any relationships
requiring disclosure.
During fiscal 1995, no executive officer of the Company served as (i) a
member of the compensation committee (or other board committee performing
equivalent functions) of another entity, one of whose executive officers served
on the compensation committee of the Board of Directors, (ii) a director of
another entity, one of whose executive officers served on the Compensation
Committee of the Board of Directors, or (iii) a member of the Compensation
Committee (or other board committee performing equivalent functions) of another
entity, one of whose executive officers served as a director of the Company.
The Company distributes its products in the State of Michigan through Bryan
Biologicals, Inc. In fiscal 1995, the Company's sales to Bryan Biologicals,
Inc. amounted to approximately $222,000 or 1.2% of the Company's net sales. Mr.
Bryan J. Brieden, a director of the Company, is a consultant to, and former
president and principal owner of, Bryan Biologicals, Inc. The Company believes
that these sales were on terms at least as favorable as those which could have
been obtained elsewhere. As of May 1, 1995, Bryan Biologicals, Inc. owed the
Company approximately $102,000 on open account for product purchases made from
December 1994 through April 1995. No interest is charged by the Company on such
obligation. The largest amount owed to the Company by Bryan Biologicals, Inc.
at any time during fiscal 1995 was approximately $113,000.
During fiscal 1995 the Company retained the law firm of Liddell, Sapp,
Zivley, Hill & LaBoon, L.L.P. and proposes to retain the firm in the current
fiscal year. Mr. LaBoon, a director of the Company, is a partner in the firm.
6
<PAGE>
COMPENSATION TABLES
The cash and other compensation paid by the Company and its subsidiaries
during fiscal 1995 to each of the executive officers of the Company as to whom
the total cash compensation exceeded $100,000 were as follows:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
---------------------------------- ------------
SECURITIES
NAME AND PRINCIPAL FISCAL OTHER ANNUAL UNDERLYING ALL OTHER
POSITION YEAR SALARY BONUS COMPENSATION OPTIONS COMPENSATION
------------------ ------ ------- ------ ------------ ------------ ------------
($) ($) ($) (#) ($)
<S> <C> <C> <C> <C> <C> <C>
David E. Hatcher........ 1995 207,834 0 11,423(1) 0 27,405(4)
Chairman of the Board and 1994 200,125 35,000 20,745 15,000 26,512
Chief Executive Officer 1993 196,279 25,000 13,222 10,000 25,580
John J. Moulds.......... 1995 139,757 0 1,874(2) 0 6,098(5)
President, Chief Operating 1994 125,125 20,000 7,915 15,000 5,408
Officer and Director 1993 116,473 15,000 5,082 10,000 5,281
Betty Francis Hatcher... 1995 102,065 0 6,217(3) 0 16,297(6)
Executive Vice President, 1994 95,138 6,500 7,720 10,000 15,436
Assistant Secretary and 1993 91,281 5,000 4,809 7,500 14,486
Director
John Case............... 1995 102,065 0 0 0 0
Vice President-- 1994 95,138 6,500 2,087 5,000 0
Regulatory Affairs 1993 93,204 5,000 546 2,000 0
</TABLE>
- - --------
(1) Represents payments by the Company for the named executive's taxes on split
dollar premium payment.
(2) Represents payments by the Company for the named executive's taxes on split
dollar premium payment.
(3) Represents payments by the Company for the named executive's taxes on split
dollar premium payment.
(4) Represents the dollar value of premiums paid by the Company with respect to
a split dollar life insurance policy for the benefit of the named
executive.
(5) Includes $4,594 which represents the dollar value of premiums paid by the
Company with respect to a split dollar life insurance policy for the
benefit of the named executive, and $1,504 which represents Company
matching contributions pursuant to the Company's 401(k) Retirement Savings
Plan.
(6) Includes $15,226 which represents the dollar value of premiums paid by the
Company with respect to a split dollar life insurance policy for the
benefit of the named executive, and $1,071 which represents Company
matching contributions pursuant to the Company's 401(k) Retirement Savings
Plan.
7
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
OPTION VALUES AT FISCAL YEAR END
<TABLE>
<CAPTION>
NUMBER OF
UNEXERCISED OPTIONS VALUE OF UNEXERCISED
SHARES AT END OF FISCAL 1995 IN-THE-MONEY OPTIONS AT END
ACQUIRED VALUE (EXERCISABLE/ OF FISCAL 1995
NAME ON EXERCISE REALIZED UNEXERCISABLE) (EXERCISABLE/UNEXERCISABLE)
---- ----------- -------- --------------------- ---------------------------
<S> <C> <C> <C> <C>
David E. Hatcher........ 0 0 60,000/20,000 $58,538/0
John J. Moulds.......... 0 0 24,875/18,125 $11,495/0
Betty Francis Hatcher... 0 0 31,106/12,869 $21,322/0
John Case............... 0 0 7,250/ 5,250 $ 4,353/0
</TABLE>
8
<PAGE>
PERFORMANCE GRAPH
The following performance graph provided by the Frank Russell Company
compares the performance of the Company's Common Stock to the Russell 2000
Index and a Peer Group Index (as defined below) for the Company's last five
fiscal years. Many of the Company's peers are privately-held companies, or
subsidiaries or divisions of larger publicly-held companies. As a result, there
is only one public company to which the Company may realistically compare
itself. Accordingly, the Peer Group Index consists of Immucor, Inc. The graph
below assumes $100 invested on April 1, 1990 in Company Common Stock or Index
and that any dividends are reinvested.
[PERFORMANCE GRAPH TO COME]
9
<PAGE>
SEVERANCE AGREEMENTS
The Company has entered into severance agreements with Mr. Hatcher, Ms.
Hatcher, Mr. Moulds, Ms. O'Bannion and Mr. Turner which provide severance
benefits upon a change of control of the Company. Under these agreements, if
one of the named employee's employment is terminated without cause following a
change of control, he or she will be compensated by the Company as described
below. The employee will receive a lump sum payment equal to a specified
percentage of his or her average annual compensation for the five years
preceding the change of control. The percentage for Mr. Hatcher is 299% and the
percentage for the other named employees is 200%. Stock options granted to the
employee by the Company and not then exercisable will become immediately
exercisable in full. The Company is required to pay the employee all amounts
owed to the employee by the Company under any deferred compensation
arrangements. The Company is also required to reimburse the employee for all
legal fees incurred as a result of termination of employment following a change
of control.
SPLIT-DOLLAR AGREEMENTS
The Company has purchased life insurance policies insuring the lives of Mr.
Brieden, Ms. Hatcher, Mr. Hatcher, Mr. Moulds, Ms. O'Bannion, Mr. Turner and
Lawrence E. Letwin and has entered into split-dollar agreements with these
persons. The Company is the owner of the policies and by the terms of the
split-dollar agreements is obligated to pay all premiums and to take all
necessary steps, upon the death of the insured, to obtain the death benefits
provided under the policies. The insured is obligated to reimburse the Company
on an annual basis for the value of the economic benefit of the policy to the
insured for that year (as determined for federal income tax purposes). Upon the
death of the insured, the Company is entitled to receive a portion of the death
benefits provided under the policy equal to the amounts of net premiums and
interest on policy loans, if any, to the insured paid by the Company, plus 3%
interest. This amount is payable from the death benefits. With respect to all
policy proceeds in excess of the amounts required to be paid to the Company,
the insured has the right to designate the beneficiaries of the policy and the
right to elect the settlement option with respect to such proceeds. The Company
has the right to obtain loans secured by the policy. The insured may also
obtain loans secured by the policy, with the Company's consent. With the
consent of the Company, interest on policy loans to the insured may be paid by
the Company. All dividends declared by the issuer of the policy will be first
applied to purchase one-year term insurance on the insured's life in an amount
not to exceed the guaranteed cash value of the policy at the next policy
anniversary, with any remaining dividends being used to purchase additional
paid-up insurance.
PROPOSAL NO. 2--1995 EMPLOYEE STOCK OPTION PLAN
On June 1, 1995, the Board of Directors of the Company approved and
recommended for submission to the shareholders for their approval the Gamma
Biologicals, Inc. 1995 Employee Stock Option Plan (the "1995 Plan"), which
would be effective on August 10, 1995 upon approval by the shareholders.
Approval of the 1995 Plan requires the affirmative vote of the holders of a
majority of the outstanding shares of the Common Stock present, or represented,
and entitled to vote at the annual meeting. A copy of the 1995 Plan is attached
to this Proxy Statement as Exhibit A.
SUMMARY OF THE 1995 PLAN
The 1995 Plan provides for the grant of options ("Options") to key employees
of the Company, including officers and directors who are also employees of the
Company, on the basis of their present and potential
10
<PAGE>
contributions to the Company and such other factors as the Compensation/Stock
Option Committee (comprised of directors who are not eligible to participate)
deems relevant.
Pursuant to the terms of the 1995 Plan, up to 250,000 shares of Common Stock
may be issued pursuant to Options granted thereunder and no participant may
receive Options to purchase in excess of 100,000 shares. Options may not be
granted under the 1995 Plan after August 10, 2005. Except as provided below and
subject to early termination upon termination of employment, the term of the
Options may not exceed ten years. The option price payable upon the exercise of
Options may be paid with cash or by the assignment to the Company of shares of
Common Stock owned by the optionee having a value equal to the exercise price,
or by any combination of those two methods. On June 19, 1995, the Common Stock
underlying the Options to be granted under the 1995 Plan was trading on the
American Stock Exchange at $4.50 per share.
The Compensation/Stock Option Committee has complete authority to issue
either (i) incentive stock options ("Incentive Stock Options") within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code") and/or (ii) non-qualified stock options ("Non-Qualified Options").
Certain differences between Incentive Stock Options and Non-Qualified Options
are discussed below.
INCENTIVE STOCK OPTIONS
The exercise price of Incentive Stock Options granted under the 1995 Plan may
not be less than 100% of the fair market value of the Common Stock of the
Company on the date of the grant. With respect to any participant who owns more
than 10% of the Company's outstanding Common Stock, the exercise price of any
Incentive Stock Option granted must be at least equal to 110% of the fair
market value on the date of the grant and the maximum term of the option may
not exceed five years. Under the terms of the 1995 Plan, the aggregate fair
market value of the Common Stock (as determined on the grant date) with respect
to which incentive stock options are exercisable for the first time by an
employee in any calendar year may not exceed $100,000.
Recipients of Incentive Stock Options granted under the 1995 Plan will not
realize taxable gain for federal income tax purposes on the date of grant or
the date of exercise of an option. However, the difference between the fair
market value of the stock acquired (on the date of exercise of an option) and
the option price will be an adjustment for purposes of calculating the
alternative minimum tax of the optionee in the year the option is exercised.
Recipients of Incentive Stock Options will incur taxable gain for federal
income tax purposes on the difference between the sales proceeds received and
the option price when the shares acquired through the exercise of Incentive
Stock Options have been sold. If the optionee does not dispose of the shares so
acquired until two years after the date of grant and one year after the date of
exercise of the option, the gain from the sale of the shares will be taxed as a
long-term gain or loss and the Company will not be entitled to a tax deduction
in connection with the exercise of the option. If the optionee disposes of the
shares prior to the end of this required holding period, the optionee generally
will recognize taxable gain in the year of the disposition. An amount equal to
the difference between the fair market value of the stock (on the date of
exercise) and the option price will be recognized by the optionee as ordinary
income, and the excess of the sales proceeds received upon the disposition over
the fair market value of the stock (on the date of exercise), if any, will be
taxed as capital gain. The Company will receive a corresponding deduction in
the year of the disposition. Any such deduction will be limited to the maximum
deduction allowable pursuant to the Internal Revenue Code, including the
limitations on excessive employee remuneration under Section 162(m) of the
Internal Revenue Code.
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NON-QUALIFIED OPTIONS
The exercise price for Non-Qualified Options granted under the 1995 Plan
shall be determined by the Compensation/Stock Option Committee, but in no event
shall be less than the par value of the Common Stock.
Recipients of Non-Qualified Options will realize no income on the date of
grant. Ordinary income will be realized by the optionee when the non-qualified
stock option is exercised. The amount of such income will be equal to the
excess of the fair market value on the exercise date of the shares of Common
Stock issued to the optionee over the exercise price of such shares. The
optionee's holding period for federal income tax purposes with respect to the
shares acquired will begin on the date of exercise. The tax basis of the stock
acquired upon the exercise of the option will be equal to the sum of (i) the
exercise price of such option and (ii) the amount included in income with
respect to the exercise of such option. Any gain or loss on the subsequent sale
of the stock will be either a long term or short term capital gain or loss
depending on the optionee's holding period for the Common Stock disposed by the
optionee.
The Company will be entitled, subject to the usual rules as to reasonableness
of compensation, to a deduction for federal income tax purposes in the same
amount as the optionee is considered to have realized ordinary income upon the
exercise of the option. The deduction will be allowed for the taxable year of
the Company in which such ordinary income is recognized by the optionee. Any
such deduction will be limited to the maximum deduction allowable pursuant to
the Internal Revenue Code, including the limitations on excessive employee
remuneration under Section 162(m) of the Internal Revenue Code.
THE BOARD OF DIRECTORS RECOMMENDS ADOPTION OF THE 1995 PLAN.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In May 1992, the Company sold its plastics division to JB Plastics, Inc., a
Texas corporation, for an aggregate of approximately $220,000 payable over a
period of three years. The Company purchases products from JB Plastics, Inc.,
and during fiscal 1995, the Company's purchases from JB Plastics, Inc. amounted
to approximately $459,000. The Company believes that these purchases were on
terms at least as favorable as those which could have been obtained elsewhere.
As of May 1, 1995, the Company owed JB Plastics, Inc. approximately $0 on open
account for product purchases. As of March 31, 1995, JB Plastics owed to the
Company approximately $120,000, consisting of a note receivable for the initial
purchase price and additional advances to JB Plastics, Inc. from the Company.
Mr. Moulds, a director of the Company, is a director of JB Plastics, Inc.
The Company distributes its products in the State of Michigan through Bryan
Biologicals, Inc. In fiscal 1995, the Company's sales to Bryan Biologicals,
Inc. amounted to approximately $222,000 or 1.2% of the Company's net sales. Mr.
Bryan J. Brieden, a director of the Company, is a consultant to, and former
president and principal owner of, Bryan Biologicals, Inc. The Company believes
that these sales were on terms at least as favorable as those which could have
been obtained elsewhere. As of May 1, 1995, Bryan Biologicals, Inc. owed the
Company approximately $102,000 on open account for product purchases made from
December 1994 through April 1995. No interest is charged by the Company on such
obligation. The largest amount owed to the Company by Bryan Biologicals, Inc.
at any time during fiscal 1995 was approximately $113,000.
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During fiscal 1995 the Company retained the law firm of Liddell, Sapp,
Zivley, Hill & LaBoon, L.L.P. and proposes to retain the firm in the current
fiscal year. Mr. LaBoon, a director of the Company, is a partner in the firm.
RELATIONSHIP WITH INDEPENDENT AUDITORS
The independent auditors of the Company are Deloitte & Touche LLP who have
acted in that capacity for many years. The Company has requested that Deloitte
& Touche LLP act as the independent auditors for the Company for fiscal 1996.
Representatives of Deloitte & Touche LLP will be present at the Meeting, having
the opportunity to make a statement if they desire to do so, and will be
available to respond to appropriate questions addressed to them.
PROPOSALS OF SHAREHOLDERS
Proposals of shareholders intended to be presented at the 1996 annual meeting
of shareholders must be received by the Company at its principal executive
offices (3700 Mangum Road, Houston, Texas 77092) by February 27, 1996, for
inclusion in the Company's proxy materials relating to the annual meeting.
GENERAL
The management does not intend to present any matter for action at the
Meeting other than the matters described above, and does not know of any other
matters to be brought before the Meeting. However, if any such other matter
should properly come before the Meeting, or if any vacancy in the proposed
slate of directors should be caused by an unexpected occurrence before the
holding of the election, the proxies will vote thereon in accordance with the
recommendations of management or for such other nominee as management may
select.
The information set forth above as to the present principal occupations of
the nominees for directors, as to their beneficial ownership of securities of
the Company, and as to other information not of record with the Company is
based upon information furnished to the Company by those nominees.
By order of the Board of Directors,
[Signature of Lawrence E. Letwin appears here]
Lawrence E. Letwin
Secretary
June 28, 1995
THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH PERSON WHOSE PROXY IS BEING
SOLICITED, UPON THE WRITTEN REQUEST OF ANY SUCH PERSON, A COPY OF THE ANNUAL
REPORT OF THE COMPANY ON FORM 10-K FOR THE FISCAL YEAR ENDED MARCH 31, 1995, AS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE FINANCIAL
STATEMENTS AND SCHEDULES THERETO. REQUESTS FOR COPIES OF THE ANNUAL REPORT
SHOULD BE DIRECTED TO MS. MARGARET J. O'BANNION, GAMMA BIOLOGICALS, INC., 3700
MANGUM ROAD, HOUSTON, TEXAS 77092.
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EXHIBIT A
GAMMA BIOLOGICALS, INC.
1995 EMPLOYEE STOCK OPTION PLAN
ARTICLE I
Purpose
Gamma Biologicals, Inc. (the "Company") is largely dependent for the
successful conduct of its business on the initiative, effort and judgment of
its officers and employees and the officers and employees of its subsidiaries.
The Company's 1995 Employee Stock Option Plan (the "Plan") is intended to
provide the officers and the key employees of the Company and its subsidiaries
an incentive through stock ownership in the Company and encourage them to
remain in the Company's employ. Moreover, since the stock options provided for
in the Plan are subject to various alternative provisions of the Internal
Revenue Code of 1986, as amended (the "Code"), the Committee will have certain
flexibility in shaping options granted under the Plan to the particular
circumstances of the optionee, thus recognizing the full value of the stock
option.
ARTICLE II
Administration
The Plan shall be administered by the Stock Option Committee (the
"Committee"), which shall at all times consist of not less than two members of
the Board of Directors of the Company (the "Board"), and shall not include any
persons that are not members of the Board. All members of the Committee shall
be selected by (and serve at the pleasure of) the Board. All members of the
Committee shall be "disinterested persons" within the meaning of Rule 16b-3 of
the General Rules and Regulations under the Securities Exchange Act of 1934, as
amended (the "1934 Act"). Subject to the express provisions of the Plan and the
policies of each stock exchange or national automated quotation system on which
any of the Company's stock at any time may be listed or quoted, the Committee
shall have plenary authority, in its discretion, to recommend to the Board the
individuals within the class set forth in Article IV to whom, and the time and
price per share at which, stock options shall be granted, the number of shares
to be subject to each stock option and the other terms and provisions of their
respective Agreements, as defined herein (which need not be identical). In
making such recommendations and determinations, the Committee may take into
account the nature of the services rendered by the respective employees, their
present and potential contributions to the Company's success and such other
factors as the Committee in its discretion shall deem relevant.
Subject to the express provisions of the Plan, the Committee shall also have
plenary authority (i) to interpret the Plan, (ii) to prescribe, amend and
rescind rules and regulations regulating it, (iii) to recommend to the Board
the terms and provisions of the respective stock options (which need not be
identical), (iv) to determine the duration and purposes of leaves of absence
that may be granted to participants without constituting a termination of their
employment for purposes of the Plan, (v) to accelerate or extend the
exercisability or vesting of any or all stock options, and (vi) to make all
other determinations necessary or advisable for the administration of the Plan.
The Committee shall hold meetings at such time and places as it may determine.
Acts by the majority of the Committee or acts reduced to or approved in writing
by a majority of the members of the Committee shall be the valid acts of the
Committee. From time to time the Board may increase the size of the Committee
and appoint additional members thereof, remove members (with or without
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cause), and appoint new members in substitution therefor, or fill vacancies
however caused, subject to the requirements that the members of the Committee
shall be "disinterested persons" as described above and that there always be at
least two members of the Committee. The Committee's determination on the
matters referred to in this Plan shall be final, conclusive and binding upon
all optionees.
ARTICLE III
Shares Subject to Plan and Duration of Plan
Under the Plan the Board may, but only upon recommendation of the Committee,
grant to eligible persons incentive stock options (as defined in the Code)
and/or non-qualified stock options to purchase up to but not exceeding an
aggregate amount of 250,000 shares of the Company's $0.10 par value Common
Stock ("Common Stock") (subject to adjustment as provided in Article VIII).
Shares subject to stock options under the Plan may be either authorized and
unissued shares or issued shares that have been acquired by the Company and are
being held in its treasury, in the sole discretion of the Board. When stock
options have been granted under the Plan and have lapsed unexercised or
partially unexercised or have been surrendered for cancellation by the optionee
thereof, the shares which were subject thereto may be reoptioned under the
Plan. The maximum number of shares of Common Stock that may be delivered
pursuant to stock options to any employee under this Plan shall not exceed
100,000 (subject to adjustment as provided in Article VIII). No stock options
shall be granted more than 10 years after the effective date of the Plan.
ARTICLE IV
Eligibility and Participation
To the fullest extent permitted by applicable securities laws, all officers
and employees of the Company, any Parent Corporation, any Subsidiary
Corporation (including, without limitation, Parent Corporations or Subsidiary
Corporations which become such after adoption of the Plan) and their respective
divisions shall be eligible to receive stock options under the Plan, and
employment by any of such Parent Corporations and Subsidiary Corporations shall
constitute employment by the Company for purposes of this Plan; provided,
however, that no member of the Committee shall be entitled to receive a stock
option under this Plan while serving as a member of the Committee. Directors of
the Company who are not regular employees of the Company are not eligible to
participate in the Plan. For purposes of the Plan, the term "Parent
Corporation" shall have the meaning set forth in Section 424(e) of the Code,
and the term "Subsidiary Corporation" shall have the meaning set forth in
Section 424(f) of the Code.
ARTICLE V
Terms and Conditions of Stock Options
Each stock option granted under the Plan shall be evidenced by a stock option
agreement (the "Agreement"), the form of which shall have been approved by the
Committee. The Agreement shall be executed by the Company and the optionee and
shall set forth the terms and conditions of the stock option, which terms and
conditions shall include, but not be limited to, the following:
(a) Option Price. The option price shall be determined by the Committee,
but shall not in any event be less than the par value of the Common Stock.
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(b) Term of Stock Option. The term of the stock option shall be selected
by the Committee, but in no event shall such term exceed ten (10) years
from the date such option is granted. Each such stock option shall be
subject to earlier termination as hereinafter provided.
(c) Transferability. Stock options granted hereunder shall not be
transferable other than by will or operation of the laws of descent and
distribution or pursuant to a qualified domestic relations order as defined
in the Code or Title I of the Employee Retirement Income Security Act of
1974, as amended, or the rules thereunder. During the lifetime of the
optionee, stock options granted hereunder shall be exercisable only by the
optionee, or the optionee's guardian or legal representative.
(d) Vesting. The Committee shall have complete discretion in determining
when stock options granted hereunder are to vest; provided, however, that
the sale of the shares of Common Stock issued upon the exercise of the
stock option by any person subject to Section 16 of the 1934 Act shall not
be allowed until at least six months after the grant of the stock option.
Such vesting determination for each stock option is to be made prior to or
at the time that stock option is granted.
(e) Termination of Employment. In the event of an optionee's termination
of employment with the Company for any reason other than death, all stock
options granted hereunder shall thereupon terminate. Upon the termination
of an optionee's employment by reason of his death, his stock option shall
terminate to the extent it was not exercisable at the date of optionee's
death, but to the extent it was then exercisable by the optionee, the
optionee's estate or the beneficiaries thereof shall be entitled to
exercise such options for a period of one (1) year from the date of the
optionee's death but not thereafter. Notwithstanding any other provisions
of this subparagraph (e), no stock option shall be exercised after the
expiration of ten (10) years from the date such option is granted.
(f) Other Conditions. At its sole discretion, the Committee may impose
other conditions upon the stock options granted hereunder, so long as those
conditions do not conflict with any other provisions of the Plan. Such
conditions may include, by way of illustration, but not by way of
limitation, percentage limitations upon the exercisability of stock options
granted hereunder.
ARTICLE VI
Incentive Stock Options
The Committee and the Board, in recommending and granting stock options
hereunder, shall have the discretion to determine that certain options shall be
Incentive Stock Options, as defined in Section 422 of the Code, while other
options shall be Non-Qualified Stock Options. Neither the members of the
Committee, the members of the Board nor the Company shall be under any
obligation or incur any liability to any person by reason of the determination
by the Committee or the Board whether an option granted under the Plan shall be
an Incentive Stock Option or a Non-Qualified Stock Option. The provisions of
this Article VI shall be applicable to all Incentive Stock Options at any time
granted or outstanding under the Plan.
All Incentive Stock Options granted or outstanding under the Plan shall be
granted and held subject to and in compliance with the terms and conditions
specifically set forth in Articles II, III, IV, and V hereof and, in addition,
subject to and in compliance with the following further terms and conditions:
(a) the per share option price of all Incentive Stock Options shall not
be less than one hundred percent (100%) of the Fair Market Value (as
defined below) of one share of the Company's Common Stock at the time the
option is granted (notwithstanding any provision of Article V hereof to the
contrary);
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(b) no Incentive Stock Option shall be granted to any person who, at the
time of the grant, owns stock possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company or any
Parent Corporation or Subsidiary Corporation of the Company; provided,
however, that this ownership limitation will be waived if at the time the
option is granted the per share option price is at least one hundred ten
percent (110%) of the Fair Market Value of one share of the Company's
Common Stock and such option by its terms is not exercisable after the
expiration of five (5) years from the date such option is granted;
(c) an Incentive Stock Option shall not be transferable other than by
will or the laws of descent and distribution, and shall be exercisable
during the lifetime of the optionee only by the optionee; and
(d) the aggregate Fair Market Value of all shares of Common Stock
(determined at the time of the grant of the option) with respect to which
Incentive Stock Options are exercisable for the first time by any optionee
during any one calendar year shall not exceed $100,000.
For purposes of the Plan, the term "Fair Market Value" on any date shall mean
(i) if the Common Stock is listed or admitted to trade on a national securities
exchange or national market system, the closing price of the Common Stock, as
published in the Wall Street Journal, so listed or admitted to trade on such
date or, if there is no trading of the Common Stock on such date, then the
closing price of the Common Stock on the next preceding date on which there was
trading in such shares; (ii) if the Common Stock is not listed or admitted to
trade on a national securities exchange or national market system, the mean
between the bid and asked price for the Common Stock on such date, as furnished
by the National Association of Securities Dealers, Inc. through NASDAQ or a
similar organization if NASDAQ is no longer reporting such information; or
(iii) if the Common Stock is not listed or admitted to trade on a national
securities exchange and if bid and asked prices for the Common Stock are not so
furnished through NASDAQ or a similar organization, the value established by
the Committee for purposes of granting stock options under the Plan. In
addition to the above rules, Fair Market Value shall be determined without
regard to any restriction other than a restriction which, by its terms, will
never lapse.
ARTICLE VII
Exercise of Stock Options
Stock options granted hereunder may be exercised in whole or in part at any
time or from time to time during their respective terms, but only to the extent
that they have vested and only by tendering to the Company written notice of
exercise accompanied by the aggregate purchase price for the shares with
respect to which the stock option is being exercised. The purchase price of
shares of Common Stock of the Company acquired upon the exercise of any stock
option granted under the Plan may be paid by an optionee by the payment of cash
or check, or, upon receipt of all required regulatory approvals, if any, by the
assignment to the Company of shares of the Company's Common Stock theretofore
owned by the optionee having a Fair Market Value equal to such option price, or
by any combination thereof.
No stock option shall be exercisable unless the Plan and all shares issuable
on the exercise thereof have been registered under the Act and all other
applicable securities laws, and there is available for delivery a prospectus
meeting the requirements of Section 10 of the Securities Act of 1933, as
amended (the "1933 Act"), or the Company shall have first received the opinion
of its counsel that registration under the 1933 Act and all other applicable
securities laws is not required in connection with such issuance. At the time
of exercise, if the shares with respect to which the stock option is being
exercised have not been registered under the 1933
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Act and all other applicable securities laws, the Company may require the
optionee to give the Company whatever written assurance counsel for the Company
may require that the shares are being acquired for investment and not with a
view to the distribution thereof, and that the shares will not be disposed of
without the written opinion of such counsel that registration under the 1933
Act and all other applicable securities laws is not required. Share
certificates issued to the optionee upon exercise of the stock option shall
bear a legend to the foregoing effect to the extent counsel for the Company
deems it advisable.
In the event that the Company is required to withhold payroll or other
federal or state taxes upon the grant or exercise of any non-qualified stock
option granted pursuant to this Plan, then upon the exercise of any such stock
option, the Company shall be entitled to withhold that number of shares
otherwise deliverable upon the exercise of the stock option as it may be
required to so withhold in order to satisfy its obligations under applicable
tax laws. The Company shall also have the right to withhold from the cash
compensation otherwise payable by the Company or any subsidiary to the optionee
any amount necessary to satisfy its payroll or other tax withholding
obligations. The Company may also require, as a condition to exercise of any
non-qualified stock option granted under this Plan, the payment by the optionee
to the Company by cash or check of the amount of any taxes which are required
to be withheld by the Company upon the exercise of the option.
ARTICLE VIII
Adjustments
(a) Adjustments Upon Changes in Capitalization. Subject to any required
action by the Company's directors and shareholders, the number of shares
provided for in each outstanding stock option and the price per share thereof,
and the number of shares provided for in the Plan, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of the
Company's Common Stock resulting from a subdivision or consolidation of shares
or the payment of a stock dividend (but only on the Common Stock), a stock
split, a reverse stock split, or any other increase or decrease in the number
of such shares effected without receipt of consideration by the Company, and
shall also be proportionately adjusted in the event of a spin-off, spin-out, or
other distribution of assets to shareholders of the Company, to the extent
necessary to prevent dilution of the interests of grantees pursuant to the Plan
or of the other shareholders of the Company, as applicable. If the Company
shall engage in a merger, consolidation, reorganization or recapitalization,
each outstanding stock option (or if such transaction involves less than all of
the shares of the Company's Common Stock, then a number of stock options
proportionate to the number of such involved shares), shall become exercisable
for the securities and other consideration to which a holder of the number of
shares of the Company's Common Stock subject to each such stock option would
have been entitled to receive in any such merger, consolidation, reorganization
or recapitalization.
(b) Acceleration. In the event of a potential merger or consolidation
involving the Company (regardless of whether the Company is the surviving
entity of such merger or consolidation), a potential liquidation or dissolution
of the Company, a potential sale or other disposition by the Company of all or
substantially all of its assets, or a potential sale or other disposition by
the shareholders of the Company of all or substantially all of the outstanding
Common Stock to one purchaser (any such merger, consolidation, liquidation,
dissolution, or sale being referred to herein as a "Significant Event"), then
the Company shall have the option of terminating all outstanding stock options
upon the actual occurrence of the Significant Event, by notice to all optionees
at least 15 days before the occurrence of the Significant Event. In
consideration for this option of the Company to terminate outstanding stock
options, the Company, if it exercises its option, shall waive
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any and all restrictions on the vesting of optionees' rights under stock
options granted pursuant to this Plan, and optionees' rights under their
respective stock options shall vest in full, subject to the actual occurrence
of the Significant Event. Any exercise by an optionee in these circumstances
may be conditioned upon the occurrence of the Significant Event. If the Company
exercises its option under this paragraph (b), upon the actual occurrence of
the Significant Event each outstanding stock option shall terminate. If the
potential Significant Event does not in fact occur for any reason, then the
Company's exercise of its option under this paragraph (b) shall have no effect
and the optionee's rights will be vested only to the extent that they would be
vested if the Company had never exercised its option under this paragraph (b).
Notwithstanding any other provision of this Plan to the contrary, with regard
to any and all optionees subject to Section 16 of the 1934 Act, if the Company
exercises its option herein, the stock options held by such optionees shall
terminate as set forth above, provided, however, that vesting of any such
optionee's rights under such stock options shall not be accelerated without the
prior consent of such optionee.
(c) Change of Par Value. In the event of a change in the Company's Common
Stock which is limited to a change of all of its authorized shares with par
value into the same number of shares with a different par value or without par
value, the shares resulting from any such change shall be deemed to be Common
Stock within the meaning of the Plan.
(d) Miscellaneous. The adjustments provided for in this Article shall be made
by the Committee, whose determination in that respect shall be final, binding
and conclusive. Except as hereinbefore expressly provided in this Article, the
holder of a stock option shall not be entitled to the privilege of stock
ownership as to any shares of Common Stock or other stock not actually issued
and delivered to the holder. Any issue by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall not
affect and no adjustment by reason thereof shall be made with respect to the
number or price of shares of the Company's Common Stock subject to any stock
option. The grant of a stock option pursuant to the Plan shall not affect in
any way the right or power of the Company to, among other things, make
adjustments, reclassifications, reorganizations or changes of its capital or
business structure or to merge or to consolidate or to dissolve or liquidate or
sell or transfer all or any part of its business or assets.
ARTICLE IX
Issuance of Stock Certificates
Upon exercise of a stock option, the person exercising the stock option shall
be entitled to one (1) stock certificate evidencing the shares acquired upon
such exercise; provided, however, that any person who tenders Common Stock of
the Company in payment of a portion or all of the purchase price of Common
Stock purchased upon exercise of the stock option shall be entitled to receive
a separate certificate representing the number of shares purchased in
consideration of the tender of such Common Stock.
ARTICLE X
Continuation of Employment
Nothing contained in the Plan (or in any stock option granted pursuant to the
Plan) shall confer upon any employee any right to continue in the employ of the
Company or any Parent Corporation or Subsidiary Corporation or constitute any
contract or agreement of employment or interfere in any way with the right of
the Company, the Parent Corporation or any Subsidiary Corporation to reduce any
person's compensation from the rate in existence at the time of the granting of
a stock option or to terminate such person's employment. Nothing contained
herein or in any Agreement shall affect any other contractual rights of an
employee.
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ARTICLE XI
Amendment or Discontinuance
The Board of the Company may at any time and from time to time amend,
rescind, suspend or terminate the Plan, as it shall deem advisable, provided
that the Plan may not be amended in any manner which would cause the Plan to no
longer comply with Rule 16b-3 of the General Rules and Regulations under the
1934 Act, or any successor rule, or the provisions of the Code applicable to
Incentive Stock Options, as such rule or provisions shall read as of the time
of amendment. In addition to Board approval of any amendment to the Plan, if
Rule 16b-3 of the General Rules and Regulations under the 1934 Act, or any
successor rule, or the provisions of the Code applicable to Incentive Stock
Options, as such rule or provisions shall read as of the time of amendment,
requires shareholder approval of such amendment, then such amendment shall be
approved by the holders of a majority of the voting stock of the Company
(voting as a single class) present, or represented, and entitled to vote at a
meeting of such shareholders duly held in accordance with the applicable laws
of the state or other jurisdiction in which the Company is incorporated.
In addition, no change may be made in, and no amendment, rescission,
suspension or termination of the Plan shall have an effect on, stock options
previously granted under the Plan which may impair or alter the rights or
obligations of the holders thereof, except that any change may be made in stock
options previously granted with the consent of the optionees.
ARTICLE XII
Miscellaneous
(a) Governing Law. The Plan and the stock options issued hereunder shall be
governed by, and construed and enforced in accordance with, the laws of the
State of Texas applicable to contracts made and performed within that State.
(b) No Liability for Good Faith Determinations. Neither the members of the
Board nor any member of the Committee shall be liable for any act, omission or
determination taken or made in good faith with respect to the Plan or any stock
option granted under it. All Board and Committee members shall also be
entitled, with respect to all matters relating to the Plan, to all of the
protections and rights, including without limitation indemnification and
limitation of liability rights, provided to Board members generally pursuant to
applicable law, the Articles of Incorporation of the Company, the Bylaws of the
Company or otherwise.
(c) Information Confidential. As partial consideration for the granting of
each stock option hereunder and subject to the provisions of applicable law,
the optionee shall keep confidential the manner and amount of his participation
in the Plan; provided, however, that such information may be given in
confidence to a financial institution to the extent that such information is
necessary in order to secure a loan for the exercise of any stock options
granted to such optionee. In the event any breach of this promise comes to the
attention of the Committee, and in addition to any other rights and remedies of
the Company or the Board against such optionee, in determining whether to
recommend the grant of any future stock option to such optionee, the Committee
shall take into consideration such breach as a factor militating against the
advisability of granting any future stock option to such employee.
(d) Other Benefits. Participation in the Plan shall not preclude the optionee
from eligibility in any other stock option plan of the Company, its Parent
Corporation or any Subsidiary Corporation or any benefit,
A-7
<PAGE>
insurance, pension, profit sharing, retirement, bonus or other extra
compensation plans that the Company, its Parent Corporation or any Subsidiary
Corporation has adopted, or may, at any time, adopt for the benefit of its
employees.
(e) Execution of Receipts and Releases. Any issuance or transfer of shares of
Common Stock to the optionee, or to his legal representative, heir, legatee or
distributee, in accordance with the provisions hereof, shall, to the extent
thereof, be in full satisfaction of all claims of such persons hereunder. The
Board may require any optionee, legal representative, heir, legatee or
distributee, as a condition precedent to such issuance or transfer, to execute
a release and receipt therefor in such form as it shall determine.
(f) Company Records. Records of the Company, the Parent Corporation or any
Subsidiary Corporation regarding the optionee's period of employment,
termination of employment and the reason therefor, leaves of absence, re-
employment and other matters shall be conclusive for all purposes hereunder,
unless determined by the Committee in its sole discretion to be incorrect.
(g) Information. The Company, the Parent Corporation and any Subsidiary
Corporation shall, upon request or as may be specifically required hereunder,
furnish or cause to be furnished to the Committee all of the information or
documentation that is necessary or required by the Committee or the Board to
perform their respective duties and functions under the Plan.
(h) No Liability of Company. The Company assumes no obligation or
responsibility to the optionee or his legal representatives, heirs, legatees or
distributees for any act of, or failure to act by, the Committee or the Board.
(i) Severability. In the event any provision of the Plan shall be held to be
illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining provisions hereof, but shall be fully severable and the
Plan shall be construed and enforced as if the illegal or invalid provision had
never been included herein.
(j) Notice. Whenever any notice is required or permitted hereunder, such
notice must be in writing and personally delivered or sent by mail. Any notice
required or permitted to be delivered hereunder shall be deemed to be delivered
on the date that it is personally delivered or, whether actually received or
not, on the third business day after it is deposited in the United States mail,
certified or registered, postage prepaid, addressed to the person who is to
receive it at the address which such person has theretofore specified by
written notice delivered in accordance herewith. The Company or an optionee may
change, at any time and from time to time, by written notice to the other, the
address which it or he had theretofore specified for receiving notices. Until
it is changed in accordance herewith, the Company and each optionee shall
specify as its and his address for receiving notices the address set forth in
the Agreement pertaining to the shares to which such notice relates.
ARTICLE XIII
Shareholder Approval
The Plan shall be effective as of the date when it is approved by the holders
of a majority of the outstanding voting stock of the Company (voting as a
single class) present, or represented, and entitled to vote at a meeting of
such shareholders duly held in accordance with the applicable laws of the state
or other jurisdiction in which the Company is incorporated.
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<PAGE>
GAMMA BIOLOGICALS, INC.
PROXY FOR ANNUAL MEETING TO BE HELD AUGUST 10, 1995
The undersigned hereby appoints David E. Hatcher and John J. Moulds, or either
of them, each with power of substitution, the proxies of the undersigned, to
vote the stock of the undersigned at the annual meeting of shareholders of
Gamma Biologicals, Inc., to be held at the offices of the Company at 3700
Mangum Road, Houston, Texas on August 10, 1995, at 3:00 P.M., Central time, or
at any adjournments thereof, as follows:
1. To elect as directors the following persons: Bryan J. Brieden, Betty F.
Hatcher, David E. Hatcher, R. Bruce LaBoon, John J. Moulds and Hayle B.
Randolph.
2. To adopt the 1995 Employee Stock Option Plan.
3. To vote in accordance with the recommendations of management upon
whatever other business may properly come before the meeting.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS and will be voted as
indicated by the shareholder. Unless a contrary direction is indicated, the
proxies shall vote the shares FOR the election as directors of the Board's
nominees, FOR the 1995 Employee Stock Option Plan, and in accordance with the
recommendations of management on any other business coming before the meeting.
(continued on reverse side)
<PAGE>
/X/ Please mark your SHARES IN YOUR NAME
votes as in this
example.
FOR WITHHOLD AUTHORITY
1. DIRECTORS.: all nominees to vote for all nominees
See reverse side. / / / /
For, except vote withheld from the following nominee(s):
--------------------------------------------------------
FOR AGAINST ABSTAIN
2. 1995 Employee Stock Option Plan / / / / / /
3. OTHER BUSINESS. To vote in accordance with the / / / / / /
recommendations of management upon whatever other
business may properly come before the meeting.
SIGNATURE(S) DATE PLEASE MARK, SIGN, DATE
---------------------------- ------ AND RETURN THE PROXY
CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
SIGNATURE(S) DATE PLEASE DO NOT FOLD,
---------------------------- ------ BEND OR MUTILATE THIS
NOTE: Please sign your name here exactly CARD
as it appears hereon. Joint owners must
each sign. When signing as attorney,
executor, administrator, trustee or
guardian, please give your full title
as it appears hereon.
