<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934*
Quest Medical, Inc.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $.05 per share
- --------------------------------------------------------------------------------
(Title of Class of Securities)
74834610
- --------------------------------------------------------------------------------
(CUSIP Number)
Cypress Asset Management, Inc.
A. Ronald Lerner
William L. Garwood, Jr.
David E. Jorden
Frank P. Lee
Dan R. Japhet, Sr.
2929 Allen Parkway, Suite 2000
Houston, Texas 77019
(713) 512-2100
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
August 12, 1996
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with this statement [X]. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of less than five percent of such class.
See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page should be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
Page 1 of 17
<PAGE> 2
CUSIP No. 74834610
- --------------------------------------------------------------------------------
(1) Names of Reporting Persons S.S. or I.R.S. Identification Nos. of
Above Persons
Cypress Asset Management, Inc.
76-0496098
- --------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group
(a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
(3) SEC Use Only
- --------------------------------------------------------------------------------
(4) Source of Funds
00
- --------------------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)
[ ]
- --------------------------------------------------------------------------------
(6) Citizenship or Place of Organization
Texas
- --------------------------------------------------------------------------------
Number of (7) Sole Voting Power 185,650 Shares
Shares Bene- ________________________________________________________
ficially (8) Shared Voting Power -0-
Owned by ________________________________________________________
Each Report- (9) Sole Dispositive Power 537,314 Shares
ing Person ________________________________________________________
With (10) Shared Dispositive Power -0-
- --------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
537,314 Shares
- --------------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
[ ]
- --------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
6.5%
- --------------------------------------------------------------------------------
(14) Type of Reporting Person (See Instructions) IA
Page 2 of 17
<PAGE> 3
CUSIP No. 74834610
- --------------------------------------------------------------------------------
(1) Names of Reporting Persons S.S. or I.R.S. Identification Nos. of
Above Persons
A. Ronald Lerner
###-##-####
- --------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group
(a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
(3) SEC Use Only
- --------------------------------------------------------------------------------
(4) Source of Funds
00
- --------------------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)
[ ]
- --------------------------------------------------------------------------------
(6) Citizenship or Place of Organization
U.S.A
- --------------------------------------------------------------------------------
Number of (7) Sole Voting Power 185,650 Shares
Shares Bene- ________________________________________________________
ficially (8) Shared Voting Power -0-
Owned by ________________________________________________________
Each Report- (9) Sole Dispositive Power 537,314 Shares
ing Person ________________________________________________________
With (10) Shared Dispositive Power -0-
- --------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
537,314 Shares
- --------------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
[ ]
- --------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
6.5%
- --------------------------------------------------------------------------------
(14) Type of Reporting Person (See Instructions) IN
Page 3 of 17
<PAGE> 4
CUSIP No. 74834610
- --------------------------------------------------------------------------------
(1) Names of Reporting Persons S.S. or I.R.S. Identification Nos. of
Above Persons
William L. Garwood, Jr.
###-##-####
- --------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group
(a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
(3) SEC Use Only
- --------------------------------------------------------------------------------
(4) Source of Funds
00
- --------------------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)
[ ]
- --------------------------------------------------------------------------------
(6) Citizenship or Place of Organization
U.S.A
- --------------------------------------------------------------------------------
Number of (7) Sole Voting Power 185,650 Shares
Shares Bene- ________________________________________________________
ficially (8) Shared Voting Power -0-
Owned by ________________________________________________________
Each Report- (9) Sole Dispositive Power 537,314 Shares
ing Person ________________________________________________________
With (10) Shared Dispositive Power -0-
- --------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
537,314 Shares
- --------------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
[ ]
- --------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
6.5%
- --------------------------------------------------------------------------------
(14) Type of Reporting Person (See Instructions) IN
Page 4 of 17
<PAGE> 5
CUSIP No. 74834610
- --------------------------------------------------------------------------------
(1) Names of Reporting Persons S.S. or I.R.S. Identification Nos.
of Above Persons
David E. Jorden
###-##-####
(2) Check the Appropriate Box if a Member of a Group
(a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
(3) SEC Use Only
- --------------------------------------------------------------------------------
(4) Source of Funds
00
- --------------------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e)
[ ]
- --------------------------------------------------------------------------------
(6) Citizenship or Place of Organization
U.S.A.
- --------------------------------------------------------------------------------
Number of (7) Sole Voting Power 185,650 Shares
Shares Bene- _____________________________________________________
ficially (8) Shared Voting Power -0-
Owned by _____________________________________________________
Each Report- (9) Sole Dispositive Power 537,314 Shares
ing Person _____________________________________________________
With (10) Shared Dispositive Power -0-
- --------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
537,314 Shares
- --------------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares
[ ]
- --------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
6.5%
- --------------------------------------------------------------------------------
(14) Type of Reporting Person (See Instructions) IN
Page 5 of 17
<PAGE> 6
CUSIP No. 74834610
- --------------------------------------------------------------------------------
(1) Names of Reporting Persons S.S. or I.R.S. Identification Nos.
of Above Persons
Frank P. Lee
###-##-####
- --------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group
(a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
(3) SEC Use Only
- --------------------------------------------------------------------------------
(4) Source of Funds
00
- --------------------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e)
[ ]
- --------------------------------------------------------------------------------
(6) Citizenship or Place of Organization
U.S.A.
- --------------------------------------------------------------------------------
Number of (7) Sole Voting Power 185,650 Shares
Shares Bene- _____________________________________________________
ficially (8) Shared Voting Power -0-
Owned by _____________________________________________________
Each Report- (9) Sole Dispositive Power 537,314 Shares
ing Person _____________________________________________________
With (10) Shared Dispositive Power -0-
- --------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
537,314 Shares
- --------------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares
[ ]
- --------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
6.5%
- --------------------------------------------------------------------------------
(14) Type of Reporting Person (See Instructions) IN
Page 6 of 17
<PAGE> 7
CUSIP No. 74834610
- --------------------------------------------------------------------------------
(1) Names of Reporting Persons S.S. or I.R.S. Identification Nos.
of Above Persons
Dan R. Japhet, Sr.
###-##-####
- --------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group
(a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
(3) SEC Use Only
- --------------------------------------------------------------------------------
(4) Source of Funds
00
- --------------------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e)
[ ]
- --------------------------------------------------------------------------------
(6) Citizenship or Place of Organization
U.S.A.
- --------------------------------------------------------------------------------
Number of (7) Sole Voting Power 185,650 Shares
Shares Bene- _____________________________________________________
ficially (8) Shared Voting Power -0-
Owned by _____________________________________________________
Each Report- (9) Sole Dispositive Power 537,314 Shares
ing Person _____________________________________________________
With (10) Shared Dispositive Power -0-
- --------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
537,314 Shares
- --------------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares
[ ]
- --------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
6.5%
- --------------------------------------------------------------------------------
(14) Type of Reporting Person (See Instructions) IN
Page 7 of 17
<PAGE> 8
ITEM 1. SECURITY AND ISSUER
The class of securities to which this statement relates is
common stock, par value $.05 per share ("Common Stock"), of Quest Medical,
Inc., a Texas corporation (the "Company"). The address of the principal
executive offices of the Company is One Allentown Parkway, Allen, Texas 75002.
ITEM 2. IDENTITY AND BACKGROUND
This statement on Schedule 13D is filed by Cypress Asset
Management, Inc., a Texas corporation and investment advisor registered under
the Investment Advisers Act of 1940 ("Cypress"). The principal business of
Cypress is to provide investment advisory services for individuals, foundations
and institutions. Information with respect to the executive officers,
directors and controlling persons of Cypress, including name, business address,
present principal occupation or employment and the organization in which such
employment is conducted, and their citizenship is listed on the schedule
attached hereto as Schedule I, which is incorporated in this Schedule 13D by
reference. The address of the principal business and office of Cypress is 2929
Allen Parkway, Suite 2000, Houston, Texas 77019.
This statement is also being filed by A. Ronald Lerner,
William L. Garwood, Jr., David E. Jorden, Frank P. Lee and Dan R. Japhet, Sr.,
each a director and shareholder of Cypress. The name, business address,
present principal occupation or employment and the organization in which such
employment is conducted, and citizenship for each of such persons is included
on Schedule I attached hereto.
During the last five years, none of Cypress, Mr. Lerner, Mr.
Garwood, Mr. Jorden, Mr. Lee, Mr. Japhet, nor, to the best of Cypress'
knowledge, any other executive officer, director or
Page 8 of 17
<PAGE> 9
controlling person of Cypress, has been convicted in any criminal proceeding
(excluding traffic violations or similar misdemeanors) or has been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any violation
with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The funds used by Cypress in purchasing the shares are funds
from certain of its clients' accounts. The funds used by each of Messrs.
Lerner, Garwood, Jorden, Lee and Japhet in purchasing the shares held by such
individual personally consisted exclusively of such individual's personal
funds.
ITEM 4. PURPOSE OF TRANSACTION
As of August 12, 1996, Cypress held 537,314 shares of the
Common Stock purchased by Cypress on behalf of certain of its clients in the
ordinary course of business in its capacity as an investment adviser. As of
such date, Mr. Lerner personally held 88,150 shares of Common Stock, which he
initially purchased on behalf of himself and certain members of his family for
investment purposes. As of such date, Mr. Garwood personally held 18,100
shares of Common Stock, which he initially purchased on behalf of himself and
certain members of his family for investment purposes. As of such date, Mr.
Jorden personally held 2,000 shares of Common Stock, which he initially
purchased on behalf of himself and certain members of his family for investment
purposes. As of such date, Mr. Lee personally held 5,000 shares of Common
Stock, which he initially purchased on behalf of himself and certain members of
his family for investment purposes. As of
Page 9 of 17
<PAGE> 10
such date, Mr. Japhet personally held 27,500 shares of Common Stock, which he
initially purchased on behalf of himself and certain members of his family for
investment purposes.
On June 25, 1996, the Company announced that its projected
earnings for the second quarter of 1996 would likely be significantly lower
than previously expected, and the Common Stock fell from $10.75 per share on
June 25 to $6.00 per share on June 27. Beginning on June 26, Cypress and its
directors, believing the stock to be a good value, began purchasing additional
shares of the Common Stock and on June 30, the total number of shares held
collectively by Cypress and its directors surpassed 5% and increased to
578,089, or 7.0%, of the outstanding Common Stock of the Company. Cypress
and its directors acquired such shares in the ordinary course of business and
not with the purpose or effect of changing or influencing control of the
Company, nor in connection with or as a participant in any transaction having
such purpose or effect, and thereby planned to file a report on Schedule 13G in
early 1997.
However, after the stock price remained low for some time, it
became apparent to Cypress that even the recent replacement of the chairman of
the Company's Board of Directors was not sufficient to improve the returns to
shareholders, and Cypress began further investigation of the Company and spoke
with various persons associated with or interested in the Company. Following
these inquiries, Cypress decided on August 12 that the Company suffered from
significant weaknesses in several key areas and that drastic measures were
necessary to enhance the value of the Company for its shareholders. Cypress
determined that the best course of action would be to seek a strategic partner
for the Company, either in the form of a merger or a sale of the Company to
such party. On August 20, 1996, Cypress and its directors sent a letter to the
Company's Board
Page 10 of 17
<PAGE> 11
informing them of their recommendations and their intent to file this schedule
and urging the Board to seek a suitable merger partner for the Company.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
As of August 12, 1996, Cypress, on behalf of its clients, and
each of Messrs. Lerner, Garwood, Jorden and Lee, on behalf of himself and
certain members of his family, collectively held 537,314 shares of Common Stock
constituting approximately 6.5% of the 8,230,000 shares of the Company's
outstanding Common Stock (as reported by the Company) although Cypress does not
admit that, for purposes of Sections 13(d) and 13(g) of the Act, it is the
beneficial owner of such shares.
All of the transactions in the Company's Common Stock effected
by Cypress or any of its directors are set forth on Schedule II hereto. Except
as set forth on such schedule and otherwise herein, to the best of the filers'
knowledge, neither Cypress, its directors, nor any other persons listed on
Schedule I hereto have effected any other transactions in the Company's Common
Stock during the past sixty days.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
The shares held by Cypress on behalf of certain of its clients
are governed by an Investment Advisory Agreement between Cypress and each such
client. Pursuant to these agreements, Cypress has discretion and authority
with respect to the investment of such client's account, including the power to
purchase, sell, exchange, trade, write options on and otherwise deal in the
securities and assets acquired for such client's account.
Page 11 of 17
<PAGE> 12
The shares held by Messrs. Lerner, Garwood, Jorden, Lee and
Japhet personally are not subject to any contracts, arrangements, understandings
or relationships.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 1 -- Joint Filing Agreement.
Exhibit 2 -- Standard Form of Investment Advisory Agreement
described in Item 6.
Page 12 of 17
<PAGE> 13
After reasonable inquiry and to the best of its or his
knowledge and belief, each of the undersigned certifies that the information
set forth in this statement is true, complete and correct.
Date: August 21, 1996
CYPRESS ASSET MANAGEMENT, INC.
By: /s/ A. Ronald Lerner
-------------------------------
A. Ronald Lerner
President
/s/ A. Ronald Lerner
----------------------------------
A. Ronald Lerner
/s/ William L. Garwood, Jr.
----------------------------------
William L. Garwood, Jr.
/s/ David E. Jorden
----------------------------------
David E. Jorden
/s/ Frank P. Lee
----------------------------------
Frank P. Lee
Page 13 of 17
<PAGE> 14
/s/ Dan R. Japhet, Jr.
----------------------------------
Dan R. Japhet, Sr.
Page 14 of 17
<PAGE> 15
SCHEDULE I
DIRECTORS, EXECUTIVE OFFICERS AND CONTROLLING SHAREHOLDERS
OF CYPRESS ASSET MANAGEMENT, INC.
For each director, executive officer and controlling
shareholder of Cypress, the following table sets forth the name, business
address and present principal occupation or employment and the organization in
which such employment is conducted. Unless otherwise indicated below, each
such person is a citizen of the United States of America, the business address
of each such person is c/o Cypress Asset Management, Inc., 2929 Allen Parkway,
Suite 2000, Houston, Texas 77019, and each listed position is with Cypress.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME BUSINESS ADDRESS
---- -------------------------------------------
<S> <C>
A. Ronald Lerner Director, Investment Principal and holder of 22.5% of the outstanding
stock of Cypress
William L. Garwood, Jr. Director, Investment Principal and holder of 22.5% of the outstanding
stock of Cypress
David E. Jorden Director, Investment Principal and holder of 22.5% of the outstanding
stock of Cypress
Frank P. Lee Director, Investment Principal and holder of 22.5% of the outstanding
stock of Cypress
Dan R. Japhet, Sr. Director, Investment Principal and holder of 10% of the outstanding
stock of Cypress
</TABLE>
Page 15 of 17
<PAGE> 16
SCHEDULE II
TRANSACTIONS IN THE COMPANY'S COMMON STOCK
DURING THE PAST SIXTY DAYS
Page 16 of 17
<PAGE> 17
CYPRESS ASSET MANAGEMENT
TRANSACTION SUMMARY
?
From 06-13-96 To 08-12-96
<TABLE>
<CAPTION>
TRAN TRADE DOLLAR SOURCE BROKER
PRICE CODE DATE SECURITY AMOUNT OR DEST. QUANTITY CODE COMMISSION LOT
- ----- ---- ----- -------- ------ -------- -------- ------ ---------- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
11.00 sl 06-13-96 QUEST MEDICAL 10,970 cash 1,000 bear 30 1
6.375 by 06-26-96 QUEST MEDICAL 11,833 cash 2,000 bear 30 3
by 06-26-96 QUEST MEDICAL 11,833 margin 2,000 bear 30 3
by 06-26-96 QUEST MEDICAL 5,933 cash 1,000 bear 30 3
by 06-26-96 QUEST MEDICAL 11,833 cash 2,000 bear 30 3
by 06-26-96 QUEST MEDICAL 14,783 cash 2,500 bear 30 3
by 06-26-96 QUEST MEDICAL 14,783 cash 2,500 bear 30 3
by 06-26-96 QUEST MEDICAL 14,783 cash 2,500 bear 30 3
by 06-26-96 QUEST MEDICAL 5,933 cash 1,000 bear 30 2
by 06-26-96 QUEST MEDICAL 29,533 cash 5,000 bear 30 3
by 06-26-96 QUEST MEDICAL 5,933 cash 1,000 bear 30 3
by 06-26-96 QUEST MEDICAL 17,733 cash 3,000 bear 30 4
by 06-26-96 QUEST MEDICAL 11,833 cash 2,000 bear 30 2
by 06-26-96 QUEST MEDICAL 11,833 margin 2,000 bear 30 3
by 06-26-96 QUEST MEDICAL 29,533 cash 5,000 bear 30 2
by 06-26-96 QUEST MEDICAL 14,783 cash 2,500 bear 30 3
by 06-26-96 QUEST MEDICAL 5,933 cash 1,000 bear 30 2
by 06-26-96 QUEST MEDICAL 17,733 margin 3,000 bear 30 2
by 06-26-96 QUEST MEDICAL 14,783 cash 2,500 bear 30 3
by 06-26-96 QUEST MEDICAL 6,533 cash 1,000 2
by 06-26-96 QUEST MEDICAL 4,458 cash 750 bear 30 2
by 06-26-96 QUEST MEDICAL 4,458 cash 750 bear 30 3
by 06-26-96 QUEST MEDICAL 2,983 cash 500 bear 30 3
by 06-26-96 QUEST MEDICAL 5,933 cash 1,000 bear 30 3
by 06-26-96 QUEST MEDICAL 5,933 cash 1,000 bear 30 3
by 06-26-96 QUEST MEDICAL 5,933 cash 1,000 bear 30 3
by 06-26-96 QUEST MEDICAL 19,533 cash 3,000 4
by 06-26-96 QUEST MEDICAL 22,566 cash 3,800 13
by 06-26-96 QUEST MEDICAL 36,812 cash 6,200 14
by 06-26-96 QUEST MEDICAL 15,185 cash 2,500 5
by 06-26-96 QUEST MEDICAL 48,369 cash 7,500 6
by 06-26-96 QUEST MEDICAL 12,000 cash 2,000 3
by 06-26-96 QUEST MEDICAL 4,500 cash 750 3
by 06-26-96 QUEST MEDICAL 29,878 cash 5,000 4
by 06-26-96 QUEST MEDICAL 11,875 cash 2,000 3
by 06-26-96 QUEST MEDICAL 5,937 cash 1,000 4
by 06-26-96 QUEST MEDICAL 30,128 cash 5,000 1
by 06-26-96 QUEST MEDICAL 5,930 cash 1,000 2
by 06-26-96 QUEST MEDICAL 12,160 cash 2,000 5
by 06-26-96 QUEST MEDICAL 15,254 cash 2,500 2
by 06-26-96 QUEST MEDICAL 12,224 cash 2,000 2
by 06-26-96 QUEST MEDICAL 6,594 cash 1,000 2
by 06-26-96 QUEST MEDICAL 4,050 cash 600 2
by 06-26-96 QUEST MEDICAL 9,958 cash 1,500 3
by 06-26-96 QUEST MEDICAL 8,690 cash 1,300 3
by 06-26-96 QUEST MEDICAL 17,730 cash 3,000 bear 30 1
</TABLE>
<PAGE> 18
CYPRESS ASSET MANAGEMENT
TRANSACTION SUMMARY
?
From 06-13-96 To 08-12-96
<TABLE>
<CAPTION>
TRAN TRADE DOLLAR SOURCE BROKER
PRICE CODE DATE SECURITY AMOUNT OR DEST. QUANTITY CODE COMMISSION LOT
- ----- ---- ----- -------- ------ -------- -------- ------ ---------- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
6.357 by 06-26-96 QUEST MEDICAL 7,700 cash 1,300 bear 30 3
by 06-26-96 QUEST MEDICAL 11,830 cash 2,000 bear 30 2
by 06-26-96 QUEST MEDICAL 8,880 cash 1,500 bear 30 2
by 06-26-96 QUEST MEDICAL 8,200 cash 1,250 2
by 06-26-96 QUEST MEDICAL 53,133 cash 9,000 bear 30 5
by 06-26-96 QUEST MEDICAL 13,033 cash 2,000 4
6.000 by 06-27-96 QUEST MEDICAL 2,955 cash 450 bear 30 1
7.125 by 06-28-96 QUEST MEDICAL 11,062 cash 1,500 2
by 06-28-96 QUEST MEDICAL 260,030 cash 40,000 bear 30 5
7.500 by 07-01-96 QUEST MEDICAL 12,146 cash 1,700 bear 30 2
8.750 by 07-09-96 QUEST MEDICAL 12,638 cash 1,400 1
8.750 sl 07-10-96 QUEST MEDICAL 45,907 cash 5,000 bear 30 5
sl 07-10-96 QUEST MEDICAL 133,095 cash 15,000 bear 30 5
7.375 sl 07-17-96 QUEST MEDICAL 2,295 cash 300 2
sl 07-17-96 QUEST MEDICAL 39,396 cash 5,150 3
sl 07-17-96 QUEST MEDICAL 19,698 cash 2,575 4
sl 07-17-96 QUEST MEDICAL 14,182 cash 1,854 5
sl 07-17-96 QUEST MEDICAL 926 cash 121 6
7.250 by 07-19-96 QUEST MEDICAL 4,593 cash 600 2
</TABLE>
<PAGE> 19
EXHIBIT INDEX
Exhibit 1 -- Joint Filing Agreement
Exhibit 2 -- Standard Form of Investment Advisory Agreement
Page 17 of 17
<PAGE> 1
EXHIBIT 1
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(f) of the Securities Exchange
Act of 1934, as amended, the undersigned agree to the joint filing on behalf of
each of them a Statement on Schedule 13D (including any and all amendments
thereto) with respect to the Common Stock of Quest Medical, Inc. and further
agree that this Agreement shall be included as an Exhibit to such joint
filings.
The undersigned further agree that each party hereto is
responsible for timely filing of such Statement on Schedule 13D and any
amendments thereto, and for the completeness and accuracy of the information
concerning such party contained therein; provided that no party is responsible
for the completeness or accuracy of the information concerning the other party,
unless such party knows or has reason to believe that such information is
inaccurate.
This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original instrument, but all of such
counterparts together shall constitute but one agreement.
In evidence thereof the undersigned, being duly authorized,
hereby execute this Agreement this 21st day of August, 1996.
CYPRESS ASSET MANAGEMENT, INC.
By: /s/ A. Ronald Lerner
--------------------------------
A. Ronald Lerner
President
/s/ A. Ronald Lerner
-----------------------------------
A. Ronald Lerner
/s/ William L. Garwood, Jr.
-----------------------------------
William L. Garwood, Jr.
<PAGE> 2
/s/ David E. Jorden
-----------------------------------
David E. Jorden
/s/ Frank P. Lee
-----------------------------------
Frank P. Lee
/s/ Dan R. Japhet, Sr.
-----------------------------------
Dan R. Japhet, Sr.
<PAGE> 1
EXHIBIT 2
FORM OF INVESTMENT ADVISORY AGREEMENT
This agreement is entered into as of ______________, by and between
__________________________________ (the "Client") and CYPRESS ASSET MANAGEMENT,
INC. (the "Advisor").
1. APPOINTMENT OF THE ADVISOR Effective _____________, the Client
appoints the Advisor as Investment Advisor with respect to those assets of the
Client identified in Section 3 below hereto (as augmented or diminished from
time to time hereinafter pursuant to the provisions of this Agreement referred
to collectively hereinafter as the "Client's Account").
2. DISCRETIONARY AUTHORITY (a) Advisor is concurrently herewith
delivering to the Client a brochure (the "Brochure") pursuant to the Securities
and Exchange Commission's Investment Advisors Act Rule 204-3, promulgated under
the Investment Advisors Act of 1940, as amended. The Client hereby grants to
the Advisor (and Advisor accepts the responsibilities and obligations attendant
to such grant) full and complete discretion and authority to manage the
investment of the Client's Account, including without limitation, the power and
authority to purchase, sell, exchange, trade, write options on and otherwise
deal in the securities and assets of any type or nature that may from time to
time be acquired for the Client's Account.
(b) The Advisor shall have the absolute authority and discretion to place
brokerage orders on behalf of the Client with such broker or brokers as the
Advisor shall from time to time in its sole discretion, select. The Advisor is
specifically granted the authority to select brokers not only on the basis of
their ability to execute trades and their commission rates, but also on their
research capability and advice (and may, in its sole discretion, authorize the
payment of commissions higher than would otherwise be the case as consideration
for such research advice). The Advisor shall not be responsible for any acts
or failures to act by such broker or brokers, provided that the Advisor shall
effect trades in the Client's Account.
(c) To enable the Advisor to exercise fully its discretion in managing the
Client's Account, the Client hereby constitutes and appoints the Advisor as the
Client's agent and attorney-in-fact with full power and authority for the
Client and on the Client's behalf to buy, sell and otherwise deal in securities
and contracts relating to and for the Client's Account. The Client further
grants to the Advisor, as the Client's agent and attorney-in-fact, fully power
and authority to do and perform every act necessary and proper to be done in
the exercise of the foregoing powers as fully as the Client might or could do
if personally present. This power-of-attorney is coupled with an interest and
shall terminate only on termination of the Agreement or on receipt by the
Advisor of written notice of the death or incapacity of the Client.
<PAGE> 2
3. CUSTODIAN OF SECURITIES AND ASSETS The Client's Account or a portion
thereof has been deposited with:
__________________________Gruntal Company_______________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(said custodian, as may be changed from time to time by Client, referred to
herein as the "Custodian"). The Advisor is hereby authorized and empowered to
instruct the Custodian with respect to transactions in the securities and assets
that comprise the Client's Account, and the Custodian is hereby directed to
comply promptly with any and all of said instructions.
4. COMPENSATION For its services rendered hereunder, the Advisor shall be
paid by the Client an annual fee as designated on the attached schedule and
will be based on the market value of the Client's Account. The fee shall be
computed and payable quarterly by multiplying the applicable quarterly period.
The attached fee schedule shall be a part of this Agreement. Fees are payable
quarterly base on the value of all assets at the end of the previous quarter.
The fee for the initial period shall be prorated. Because service fees are
payable in arrears, the Client will not be eligible to receive refunds of said
fees, as payment of same is not due until services are rendered. If this
Agreement is cancelled or terminated by either party hereto, all fees shall be
prorated for the period in which such cancellation or termination occurs based
on the market value of the Client's Account at the end of the previous
quarterly period and the number of days this Agreement was in effect during the
period of cancellation or termination.
5. INVESTMENTS OBJECTIVES; LIABILITY DISCLAIMER A statement of the
investment objectives and policies and restrictions thereon of the Advisor is
set forth in the Brochure. The Advisor's authority hereunder shall not be
impaired because the Advisor may effect transactions for the Advisor's own
account, or for the accounts of others which the Advisor manages, which are
identical or similar to securities transactions the Advisor may effect for the
Client's Account at the same or different times. Except in cases of negligence
or malfeasance, or violation of applicable law, neither the Advisor nor any of
the Advisor's officers, directors or employees shall be liable hereunder for
any actions or omissions or for any errors of judgment in managing the Client's
Account. Nothing herein shall in any way constitute a waiver or limitation of
any rights to the extent such waiver or limitation is not permitted by any
federal or state securities laws.
The Advisor acknowledges that it s "fiduciary" with respect to the Client
within the meaning of, and for the purposes of, ERISA, and confirms that it is
registered as an investment adviser under the Investment Advisors Act of 1940.
6. RECORDS AND REPORTS (a) to provide the Client with an opportunity to
review carefully the Brochure, the Client shall have the right to cancel this
Agreement within five business days of the date first above written, without
penalty, by providing written notice of cancellation to the Advisor.
<PAGE> 3
(b) The Advisor shall keep and maintain records of its activities
hereunder, which records shall be open to inspection at any reasonable time by
the Client or by its duly authorized representative. The Advisor shall render
to the Client quarterly or as reasonably requested, a status report on the
Client's Account which shall include the securities and assets of the Clients
Account as of the end of each three month period and the estimated costs and
fair market value basis thereof.
7. SERVICES TO OTHER CLIENTS The Client acknowledges that the Advisor
provides and shall continue to provide services of the nature to be rendered
hereunder to clients other than the Client, and the Client agrees that the
Advisor may give advice and take action with respect to the management of its
other clients' securities and assets, which may differ from the advice given,
or the timing or nature of action taken, with respect to the Client's Account.
Nothing in this Agreement shall be deemed to impose upon the Advisor any
obligation to purchase or sell for the Client any security or property which
the advisor may, from time to time, purchase or sell for the account of any
other client. Investment advisory services are also rendered to principals of
this Advisor and to various members of their families who may or may not hold
similar securities as those of the client. It is expressly understood that
such principals, their family members and the Client will be given equal
treatment by the Advisor with respect to the securities transactions and that
family members' interests do not necessarily have to come last.
8. TERMINATION This Agreement may be terminated by either party hereto on
thirty days written notice to the other party.
9. REPRESENTATIONS AND WARRANTIES (a) The Advisor hereby represents and
warrants to the client that it is duly licensed and in good standing as an
investment advisor under the Investment Advisors Act of 1940; and that it has
the full power and authority to enter and perform this agreement.
(b) The Client hereby represents and warrants to the Advisor that is has
the full power and authority to enter and perform this Agreement; and that it
owns, free and clear of any adverse interests or restrictions on transfer
(except as otherwise noted on Exhibit A hereto) the securities and assets
listed on Exhibit A hereto.
10. DISCLOSURES Client has been informed that investment performance will
be measured on an quarterly basis, and agrees that at the end of each calendar
quarter Client will compensate Cypress Asset Management in the manner described
on the attached fee schedule.
11. MISCELLANEOUS (a) This Agreement and the rights and obligations
hereunder are not assignable or delegable by either party hereto without the
prior written consent of the other party.
(b) No amendment or modification of this Agreement shall be deemed
effective unless and until executed in writing by the parties hereto.
(c) Nothing in this Agreement shall be construed to create the
relationship of employer and employee between the Client and the Advisor. The
Client and the Advisor are not partners or joint
<PAGE> 4
venturers with each other and nothing contained in this Agreement shall be
construed to make them partners or joint venturers with each other or to impose
and liability as such on either of them.
(d) This Agreement shall be governed by, and construed and interpreted in
accordance with, the laws of the State of Texas.
(e) The Client warrants that (he/she) has received Part II of Form ADV.
(f) This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original instrument, but all which together shall
constitute but one agreement.
This Agreement and Addenda attached hereto and executed by the parties hereto,
contain the entire agreement of the parties and supersede all prior
negotiations, correspondence, understandings and agreements between or among
the parties regarding the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
____________________________________ ____________________________________
(Client Signature) (Client Signature)
CYPRESS ASSET MANAGEMENT, INC.
By:_________________________________ ____________________________________
