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As filed with the Securities and Exchange commission on October 6, 1995
File No- 33 _____
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
ABATIX ENVIRONMENTAL CORP.
(Exact name of issuer as specified in its charter)
Delaware 75-1908110
(State or other jurisdiction (I.R.S. employer
of incorporation or organization) Identification No.)
8311 Eastpoint Drive, Suite 400
Dallas, Texas 75227
(Address of principal executive offices) (Zip Code)
1994 STOCK OPTION PLAN
AND
EMPLOYMENT AGREEMENT
(Full title of the plans)
Frank J. Cinatl, IV
Vice President
Abatix Environmental Corp.
8311 Eastpoint Drive, Suite 400
Dallas, Texas 75227
(Name and address of agent for service)
(214) 381-1146
(Telephone number, including area code, of agent for service)
Copy to:
Jim Schneider, Esq.
Atlas, Pearlman, Trop & Borkson, P.A.
3200 North Military Trail, Suite 205
Boca Raton, Florida 33431
(407) 697-4828
<PAGE>
CALCULATION OF REGISTRATION FEE
Proposed Proposed
maximum maximum
offering aggregate Amount of
Title of securities Amount to be price per offering registration
to be registered registered(1) share(1) price(1) fee
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Common Stock
($.001 par value) 170,000 shares $2.25-3.75 $451,563 $156.00
- -----------------------------------------------------------------------------
(1) Pursuant to Rule 457(h), the maximum aggregate offering price was
calculated based upon the exercise price as to outstanding Options covering
160,000 shares, and pursuant to Rule 457(c) the maximum aggregate offering
price was calculated based upon the average of the bid and ask price within
5 business days prior to the date of filing this registration statement
covering 10,000 shares.
2
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ABATIX ENVIRONMENTAL CORP.
CROSS REFERENCE SHEET REQUIRED BY ITEM 501(b) OF REGULATION S-K
FORM S-8 ITEM NUMBER AND CAPTION IN PROSPECTUS
CAPTION
1. Forepart of registration statement Facing Page of Registration Statement
and outside front cover page of and Cover Page of Prospectus
prospectus
2. Inside front and outside back Inside Cover Page of Prospectus and
cover pages of prospectus Outside Cover Page of Prospectus
3. Summary information, risk factors
and ratio of earnings to fixed
charges Not Applicable
4. Use of proceeds Not Applicable
5. Determination of offering price Not Applicable
6. Dilution Not Applicable
7. Selling security holders Sales by Selling Security Holders
8. Plan of distribution Cover Page of Prospectus and Sales by
Selling Security Holders
9. Description of securities to be Description of Securities; Stock
registered Option Plan; Employment Agreement and
Sales by Selling Security Holders
10. Interests of named experts and Not Applicable
counsel
11. Material changes Not Applicable
12. Incorporation of certain Incorporation of Certain Documents by
information by reference Reference
13. Disclosure of Commission
position on indemnification for
Securities Act liabilities Indemnification
3
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PROSPECTUS
ABATIX ENVIRONMENTAL CORP.
170,000 SHARES OF COMMON STOCK
($.001 PAR VALUE)
To be Issued pursuant to the 1994 Stock Option Plan
and the Employment Agreement
This Prospectus is part of a Registration Statement which registers an
aggregate 170,000 shares of Common Stock, $.001 par value ("Common Stock") of
Abatix Environmental Corp. ("Abatix" or the "Company") which have been
issued, as set forth herein, to officers, directors and key employees of the
Company pursuant to stock options to purchase up to 170,000 shares of the
Common Stock (the "Options") under and in accordance with the 1994 Stock
Option Plan (the "Option Plan") and the employment agreement (the "Employment
Agreement") with an employee of the company. Such selling stockholders are
hereinafter collectively referred to as the "Selling Security Holders." All
of the Options were granted to such officers, directors or key employees
pursuant to the Option Plan and Employment Agreement and concomitant to
individual written options. The Company has been advised by the Selling
Security Holders that they may sell all or a portion of their shares of
Common Stock from time to time in the over-the-counter market in negotiated
transactions, directly or through brokers or otherwise, and that such shares
will be sold at market prices prevailing at the time of such sales or at
negotiated prices.
No person has been authorized by the Company to give any information or to
make any representation other than as contained in this Prospectus, and if
given or made, such information or representation must not be relied upon as
having been authorized by the Company. Neither the delivery of this
Prospectus nor any distribution of the shares of the Common Stock issuable
upon exercise of the Options under the terms of the Option Plan and
Employment Agreement shall, under any circumstances, create any implication
that there has been no change in the affairs of the Company since the date
hereof.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SECURITIES IN ANY STATE
TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH STATE.
The date of this Prospectus is October 6, 1995.
4
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy
statements and other information filed with the Commission can be inspected
and copied at the Public Reference facilities of the Commission at 450 Fifth
street, N.W., Washington, D.C. 20549. Copies of this material can also be
obtained at prescribed rates from the Public Reference section of the
Commission at its principal office at 450 Fifth street, N.W., Washington,
D.C. 20549. The Company's Common Stock is traded through NASDAQ under the
symbol "ABIX."
The Company has filed with the Commission a Registration Statement on Form
S-8 (the "Registration Statement") under the Securities Act of 1933, as
amended (the "Act"), with respect to an aggregate of 170,000 shares of the
Company's Common Stock, to be issued to certain officers, directors and key
employees of the Company pursuant to the Option Plan and Employment Agreement
and separate option agreements. This Prospectus, which is Part I of the
Registration Statement, omits certain information contained in the
Registration Statement. For further information with respect to the Company
and the shares of the Common Stock offered by this Prospectus, reference is
made to the Registration Statement, including the exhibits thereto.
Statements in this Prospectus as to any document are not necessarily
complete, and where any such document is an exhibit to the Registration
Statement or is incorporated by reference herein, each such statement is
qualified in all respects by the provisions of such exhibit or other
document, to which reference is hereby made, for a full statement of the
provisions thereof. A copy of the Registration Statement, with exhibits, may
be obtained from the Commission's office in Washington, D.C. (at the above
address) upon payment of the fees prescribed by the rules and regulations of
the Commission, or examined there without charge.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference and made a part hereof:
The Company's Annual Report on Form 10-K for the year ended December 31, 1994.
The Company's Form 10-Q Quarterly Report for the quarterly period ended
March 31, 1995.
The Company's Form 10-Q Quarterly Report for the quarterly period ended
June 30, 1995.
5
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All reports and documents filed by the Company pursuant to section 13, 14 or
15(d) of the Exchange Act, prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference herein and to be a part hereof from the respective
date of filing of such documents. Any statement incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document, which also is or is deemed to be incorporated by
reference herein, modifies or supersedes such statement. Any statement
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute part of this Prospectus.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of the Prospectus has been
delivered, on the written request of any such person, a copy of any or all
of the documents referred to above which have been or may be incorporated by
reference in this Prospectus, other than exhibits to such documents. Written
requests for such copies should be directed to Corporate Secretary, Abatix
Environmental Corp., 8311 Eastpoint Drive, Suite 400, Dallas, Texas 75227,
telephone (214) 381-1146.
THE COMPANY
Abatix markets and distributes personal protection and safety equipment, and
durable and nondurable supplies to the asbestos and lead abatement,
industrial safety and hazardous materials industries. The Company also
distributes tools to the construction industry. During 1994, the Company
sold over 8,000 products consisting of equipment and supplies to over 3,000
customers from its eight distribution centers in Texas, California, Arizona,
Colorado and Washington. Currently, approximately 65 percent of the
Company's sales are to the asbestos and lead abatement industries, and
approximately 13 percent, 12 percent and 10 percent of its sales are to the
construction, industrial safety and hazardous materials industries,
respectively. The Company believes a majority of its sales for the
foreseeable future will continue to be made to asbestos and lead abatement
contractors, and project organizers and managers. At present, the Company
estimates its share of the asbestos abatement supply market to be
approximately 15 percent to 20 percent in the markets served by the Company.
OPTION PLAN
GENERAL INFORMATION
On September 30, 1994 the Board of Directors of the Company approved the
issuance of stock Options pursuant to which the Board of Directors authorized
and reserved up to 140,000 shares of the Company's Common Stock for issuance.
The Board of Directors also gave the discretion of granting these Options to
management, defined as the Chief Executive Officer and Chief Operating
Officer ("Management"). At the time the Board of Directors authorized the
Option Plan, the members of the Board of Directors and Management consisted
of Terry W. Shaver and Gary L. Cox. Mr. Lamont C. Laue joined the Board of
Directors in January 1995.
6
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PURPOSE
The purpose of this Option Plan is to reward key employees and executives of
the Company for past contributions as well as to induce executives and key
employees of the Company who are in a position to contribute materially to
the Company's prosperity to remain with the Company, to offer incentives and
rewards in recognition of their share in the Company's progress and to
encourage participants to continue to promote the best interests of the
Company.
ADMINISTRATION
The Option Plan is to be administered by Management, who is authorized to
construe and interpret the Option Plan and to make all final determinations
necessary or appropriate for its administration. Management is charged with
the responsibility to interpret the Option Plan and, to the extent and in the
manner contemplated in the Option Plan, has discretion to prescribe, amend
and rescind rules and regulations relating to the Option Plan. Management
also has the responsibility to determine the terms and provisions of any
amendments of the respective option agreements relating to the issuance of
the Options including the ability to conform the option agreements in order
to comply with any law or regulation applicable thereto. Management's
determination as to all of the foregoing matters is deemed to be conclusive.
Any action to be taken by Management shall require the unanimous consent of
all members, but in the event the members cannot agree on any action to be
taken with respect to any issue, then the Board of Directors shall act in
lieu of the Management for purposes of determining any issue relating to the
Option Plan.
ELIGIBILITY
An eligible optionee under the Option Plan shall be any person who, at the
date the Option is granted, is either (i) an active employee of the Company
having been employed for a minimum of sixty (60) days, or (ii) a Director or
officer of the Company. These Options may not be transferred or assigned by
an optionee or pledged, encumbered or otherwise disposed of except by an
optionee's last will and testament or by the laws of descent and distribution
or with the express written consent of Management. Any forfeited or
terminated Option shall be eligible for redesignation and regrant to eligible
optionees as determined by Management.
The Option Plan, provides for and reconfirms the issuance of Options to
purchase an aggregate of 140,000 shares of the Company's Common Stock.
Messrs. Terry W. Shaver, Gary L. Cox and Frank J. Cinatl are officers of the
Company. Mr. Frank J. Cinatl was granted Options to purchase 30,000 shares
of Common Stock; 10,000 of these Options were exercisable on the date of
grant, 10,000 became exercisable January 1, 1995 and 10,000 Options will be
exercisable January 1, 1996. Messrs. Terry W. Shaver and Gary L. Cox were
each granted Options to purchase 20,000 shares of Common Stock; 10,000 of
these Options became exercisable January 1, 1995 and 10,000 Options will be
exercisable January 1, 1996. Messrs. Terry W. Shaver and Gary L. Cox were
each granted additional Options to purchase 1,250 shares of Common Stock,
exercisable January 1, 1996. These Options became available for regrant
after the termination of employment of the Optionee on July 13, 1995.
8
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(a) OPTION PRICE. The exercise price per share of the Company's Common Stock
issuable upon the exercise of the Options was established by the Board of
Directors on the grant date at $2.25 per share for the Options vested on the
date of grant, $2.50 per share for the Options exercisable on January 1, 1995
and $2.75 per share for the Options exercisable on January 1, 1996. Options
to purchase 2,500 shares were forfeited upon the termination of an Optionee.
On August 17, 1995, Options to purchase these 2,500 shares were regranted at
the market price on that day of $3.375.
(b) TERM OF OPTION. Each Option shall be exercisable for a period of two
years from the date such Options become exercisable.
(c) PAYMENT FOR SHARES. The purchase price for an Option is payable in cash
and is to be paid in full upon exercise of the Option.
ACCELERATION OF VESTING PERIOD
Notwithstanding the designated exercise period for Options as heretofore
described, the proposed dissolution or liquidation of the Corporation, or in
the event of a proposed sale of all or substantially all of the assets of the
Corporation, the Board of Directors may declare that each Option granted
under this Option Plan shall terminate as of a date to be fixed by the Board
of Directors; provided that not less than thirty (30) days written notice of
the date so fixed shall be given to each Eligible Person holding an Option,
and each such Eligible Person shall have the right, during the period of
thirty (30) days preceding such termination to exercise his Option as to all
or any part of the shares of Stock covered thereby, including shares of Stock
as to which such Option would not otherwise be exercisable. Nothing set
forth herein shall extend the term set for purchasing the shares of Stock set
forth in the Option.
TERMINATION OF EMPLOYMENT
In the event the Optionee's employment terminates, the option periods are
described as follows:
(a) If an Optionee shall die (i) while an employee of the Company or a
Subsidiary or (ii) within three months after termination of his employment
with the Company or a Subsidiary because of his disability, or retirement or
otherwise, his Options may be exercised, to the extent that the Optionee
shall have been entitled to do so on the date of his death or such
termination of employment, by the person or persons to whom the Optionee's
right under the Option pass by will or applicable law, or if no such person
has such right, by his executors or administrators, at any time, or from time
to time, but not later than the expiration date specified in Paragraph 5
hereof or one year after the Optionee's death, whichever date is earlier.
8
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(b) If an Optionee's employment by the Company or a Subsidiary shall
terminate because of his disability and such Optionee has not died within the
following three months, he may exercise his Options, to the extent that he
shall have been entitled to do so at the date of the termination of his
employment, at any time, or from time to time, but not later than the
expiration date specified in Paragraph 5 hereof or one year after termination
of employment, whichever date is earlier.
(c) If an Optionee's employment shall terminate by reason of his retirement
in accordance with the terms of the Company's tax-qualified retirement plans
or with the consent of the Board or the Stock Option Committee or
involuntarily other than by termination for cause, and such Optionee has not
died within the following three months, he may exercise his Option to the
extent he shall have been entitled to do so at the date of the termination of
his employment, at any time and from to time to time, but not later than the
expiration date specified in Paragraph 5 hereof or thirty (30) days after
termination of employment, whichever date is earlier. For purposes of this
Paragraph 11, termination for cause shall mean termination of employment by
reason of the Optionee's commission of a felony, fraud, breach of contract,
gross negligence or willful misconduct which has resulted, or is likely to
result, in substantial and material damage to the Company or a Subsidiary,
all as the Committee or the Company in its sole discretion may determine.
(d) If, except as noted in 11(e), an Optionee's employment shall terminate
for any reason other than death, disability, retirement or otherwise, all
right to exercise his Option shall terminate on the date of such employment
termination.
(e) In the event the Company terminates the employment of Messrs. Shaver,
Cox, or Cinatl whether or not for cause, the Options and the period for
exercise thereof shall not be affected in any manner by such termination.
EMPLOYMENT AGREEMENT
Options to purchase 30,000 shares of the Company's Common Stock were granted
to an employee pursuant to the Employment Agreement dated August 2, 1993. If
certain criteria are obtained each year of the three year Employment
Agreement (defined to be August 1 through July 31), the employee earns
Options to purchase 10,000 shares of the Company's Common Stock in each of
those three years. The exercise price of the Options is the bid price
established by Nasdaq on the day after the date that the employee achieves
the criteria. The Options are exercisable for one year after they are earned.
On June 15, 1994, the employee met the requirements in the first year of the
Employment Agreement and received Options to purchase 10,000 shares of Common
Stock. The opening bid price on the following day was $2.25. On
June 16, 1995, the Company granted the employee an extension to exercise
these Options until October 14, 1995.
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On March 2, 1995, the employee met the requirements in the second year of the
Employment Agreement and received Options to purchase 10,000 shares of Common
Stock. The opening bid price on the following day was $3.00. These Options
expire, if not exercised, on March 3, 1996.
In July 1995, prior to the third year of the Employment Agreement, the
Company and the employee negotiated a new employment agreement ("New
Employment Agreement") which is dated August 1, 1995. The first year of the
New Employment Agreement supersedes the third and final year of the
Employment Agreement. If certain criteria are met, the New Employment
Agreement entitles the employee to Options to purchase 10,000 shares of the
Company's Common Stock only in the first year of the New Employment
Agreement. All other terms and conditions related to these Options remain
unchanged from the Employment Agreement. Any reference to Employment
Agreement herein incorporates the New Employment Agreement.
OPTIONS OUTSTANDING UNDER THE OPTION PLAN AND THE EMPLOYMENT AGREEMENT
As of September 22, 1995, 13 participants held and/or remain entitled to
receive Options under the Option Plan and Employment Agreement to purchase
an aggregate of 170,000 shares of Common Stock. The number of shares
underlying Options exercisable at such date under the Option Plan and
Employment Agreement, to be exercisable at subsequent dates under the Option
Plan and Employment Agreement and the names of the related participants are
as set forth below.
<TABLE>
<CAPTION>
SHARES UNDERLYING
OUTSTANDING SHARES UNDERLYING
SHARES UNDERLYING EXERCISABLE OPTIONS TO BE
NAME OF HOLDER INITIAL GRANT OPTIONS EXERCISABLE
____________________ _________________ _______________ ________________
<S> <C> <C> <C>
OPTION PLAN:
Melanie Capps 10,000 5,000 5,000
Frank Cinatl 30,000 20,000 10,000
Gary Cox 21,250 10,000 11,250
Leland Gearhart 12,500 10,000 2,500
Charles Harrington 5,000 2,500 2,500
Marvin Krueger 5,000 2,500 2,500
Brian MacGregor 15,000 10,000 5,000
Dan Roeber 5,000 2,500 2,500
Terry Shaver 21,250 10,000 11,250
Bill Stratford 5,000 2,500 2,500
Jeffery Thompson 7,500 2,500 5,000
Becky Voorhees 2,500 2,500 -
EMPLOYMENT AGREEMENT:
Barry Horvitz 30,000 20,000 10,000
</TABLE>
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FEDERAL INCOME TAX EFFECTS
The following discussion applies to Options issued under the Option Plan and
Employment Agreement and is based on federal income tax laws and regulations
in effect on December 31, 1994. It does not purport to be a complete
description of the federal income tax consequences of the Option Plan and
Employment Agreement, and it does not describe the consequences of the state,
local or foreign tax laws which may be applicable. Accordingly, any person
receiving a grant under the Option Plan and Employment Agreement should
consult with his or her own tax adviser.
The Options are not subject to the provisions of the Employee Retirement
Income Security Act of 1974 and are not qualified under Section 401(a) of the
Internal Revenue Code of 1986, as amended (the "Code"). Furthermore, Options
granted under the Option Plan and Employment Agreement are not "Incentive
Stock Options," as described in Section 422 of the Code.
NON-STATUTORY OPTIONS
The recipient of an Option under the Option Plan and Employment Agreement
("Non-Statutory Option") does not recognize taxable income on the date of
grant of the Non-Statutory Option, but recognizes ordinary income generally
at the date of exercise in the amount of the difference between the Option
exercise price and the fair market value of the Common Stock on the date of
exercise. However, if the recipient is subject to the restrictions on resale
of Common Stock under Section 16 of the Exchange Act, such person generally
recognizes ordinary income at the end of the six-month period following the
date of exercise in the amount of the difference between the Option exercise
price and the fair market value of the Common Stock at the end of the
six-month period. Nevertheless, such person may elect within 30 days after
the date of exercise to recognize ordinary income as of the date of exercise.
The amount of ordinary income recognized by the Option holder is deductible
by the Company in the year that income is recognized.
If a holder of Non-Statutory Options pays the Option exercise price solely in
cash, his basis in the shares acquired is equal to the fair market value of
the Common Stock on the date ordinary income is recognized, and upon
subsequent disposition, any further gain or loss is taxable either as
short-term or long-term capital gain or loss, depending on how long the
shares are held. The holding period for the Common Stock commences as of the
date ordinary income is recognized.
If the holder of a Non-Statutory Option pays the exercise price, in full or
in part, with shares of previously acquired Common Stock, if permitted under
the Option Plan and Employment Agreement, no gain or loss is recognized upon
the disposition of such previously acquired shares according to rulings
issued by the Internal Revenue Service. Shares received, equal in number to
the previously acquired shares exchanged thereof or, have the same basis and
holding period as the previously acquired shares. Shares received in excess
of the number of previously acquired shares have a basis equal to the fair
market value of the additional shares as of the date ordinary income is
recognized. The holding period for such additional shares commences as of
the date ordinary income is recognized.
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RESTRICTIONS UNDER SECURITIES LAWS
The sale of any shares of Common Stock acquired upon the exercise of stock
options must be made in compliance with federal and state securities laws.
Officers, directors and 10% or greater stockholders of the Company may be
deemed to be "affiliates" of the Company under the federal securities laws
and, as such, should be aware that resales by affiliates can only be made
pursuant to an effective Registration Statement, Rule 144 or any other
applicable exemption. Officers, directors and 10% or greater stockholders
are also subject to the "short swing" profit rule of Section 16(b) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). Section
16(b) of the Exchange Act generally provides that, if an officer, director or
10% and greater stockholder sold any Common Stock of the Company acquired
pursuant to the exercise of a stock option, he would generally be required to
pay any "profits" resulting from the sale of the stock and receipt of the
stock option. Section 16(b) exempts all option exercises from being treated
as purchases and, instead, treats an option grant (including the grant of
options pursuant to plans such as the Company's Option Plan and Employment
Agreement) as a purchase of the underlying security, which grant/"purchase"
may be matched with any sale of the underlying security within six (6) months
of the date of grant. Stop transfer instructions will be placed with the
transfer agent of the Company's Common Stock with respect to all stock
certificates issued under the Option Plan and Employment Agreement.
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SALES BY SELLING SECURITY HOLDERS
The following table sets forth the name of each Selling Security Holder, the
amount of shares of Common Stock held directly or indirectly or underlying
the Options owned by each holder on September 22, 1995 (including Options
vested and to be vested), the amount of shares of Common Stock underlying
such Options to be offered by each such holder, the amount of Common Stock to
be owned by each such holder following sale of such shares of Common Stock
and the percentage of shares of Common Stock to be owned by each such holder
following completion of such offering.
<TABLE>
<CAPTION>
SHARES TO PERCENTAGE
NUMBER OF BE OWNED TO BE OWNED
NAME OF SELLING SHARES SHARES TO AFTER AFTER
SECURITY HOLDER OWNED (1) BE OFFERED OFFERING OFFERING
- ------------------- ---------- ----------- ---------- -------------
<S> <C> <C> <C> <C>
OPTION PLAN:
Melanie Capps 10,000 10,000 - -
Frank Cinatl 30,500 30,000 500 -
Gary Cox 414,750 21,250 393,500 16.9%
Leland Gearhart 14,500 12,500 2,000 0.1%
Charles Harrington 5,000 5,000 - -
Marvin Krueger 5,000 5,000 - -
Brian MacGregor 19,000 15,000 4,000 0.2%
Dan Roeber 5,000 5,000 - -
Terry Shaver 624,250 21,250 603,200 25.9%
Bill Stratford 5,000 5,000 - -
Jeffery Thompson 9,500 7,500 2,000 0.1%
Becky Voorhees 2,500 2,500 - -
EMPLOYMENT AGREEMENT:
Barry Horvitz 30,000 30,000 - -
</TABLE>
(1) - Includes shares of Common Stock underlying the Options registered
pursuant to this registration statement.
DESCRIPTION OF SECURITIES
The Company is currently authorized to issue up to 20,000,000 shares of
Common Stock, par value $.00l per share, of which 2,161,814 shares were
outstanding as of August 31, 1995. The Company is also authorized to issue
up to 2,000,000 shares of Preferred Stock, par value $l.00 per share, none of
which shares were outstanding as of the date of this Prospectus.
The Company anticipates filing with the State of Delaware an amendment to its
Articles of Incorporation that will reduce the authorized capital to
5,000,000 shares of Common Stock and 500,000 shares of Preferred Stock. An
Information Statement was mailed on September 1, 1995 to shareholders of
record on August 18, 1995.
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COMMON STOCK
Subject to the dividend rights of the holders of Preferred Stock, holders of
shares of Common Stock are entitled to share, on a ratable basis, such
dividends as may be declared by the Board of Directors out of funds legally
available therefor. Upon liquidation, dissolution or winding up of the
Company, after payment to creditors and holders of preferred stock that may
be outstanding, the assets of the Company will be divided pro rata on a per
share basis among the holders of the Common Stock.
Each share of Common Stock entitles the holders thereof to one vote. Holders
of Common Stock do not have cumulative voting rights which means that the
holders of more than 50% of the shares voting for the election of Directors
can elect all of the Directors if they choose to do so, and, in such event,
the holders of the remaining shares will not be able to elect any Directors.
The By-Laws of the Company require that only a majority of the issued and
outstanding shares of Common Stock of the Company need be represented to
constitute a quorum and to transact business at a stockholders' meeting. The
Common Stock has no preemptive, subscription or conversion rights and is not
redeemable by the Company.
PREFERRED STOCK
The Preferred Stock may be issued by resolutions of the Company's Board of
Directors from time to time without any action of the stockholders. Such
resolutions may authorize issuances of such Preferred Stock in one or more
series and may fix and determine dividend and liquidation preferences, voting
rights, conversion privileges, redemption terms and other privileges and
rights of the shares of each authorized series.
NASDAQ
The Company's Common Stock is traded on NASDAQ under the symbol "ABIX."
TRANSFER AGENT
The Transfer Agent for the shares of Common Stock is North American Transfer
Co., 147 West Merrick Road, Freeport, New York 11520.
LEGAL MATTERS
Legal matters in connection with the securities being offered hereby will be
passed upon for the Company by Atlas, Pearlman, Trop & Borkson, P.A.,
3200 North Military Trail, Suite 205, Boca Raton, Florida 33431.
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EXPERTS
The financial statements and schedule of the Company as of December 31, 1994
and 1993, and for each of the years in the three-year period ended
December 31, 1994, have been incorporated by reference herein and in the
registration statement in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated by reference herein,
and upon the authority of said firm as experts in accounting and auditing.
The report of KPMG Peat Marwick LLP covering the December 31, 1994, financial
statements refers to a change in method of accounting for income taxes in
1993.
INDEMNIFICATION
Section 145 of the General Corporation Law of Delaware, under which
jurisdiction the Company is incorporated, empowers a corporation to indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative by reason of the fact that he or
she is or was a director, officer, employee or agent of the corporation or is
or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation or enterprise. A corporation may
indemnify against expenses (including attorneys' fees) and, other than in
respect of an action by or in the right of the corporation, against
judgments, fines and amounts paid in settlement actually and reasonably
incurred in connection with such action, suit or proceeding if the person
indemnified acted in good faith and in a manner he or she reasonably believed
to be in or not opposed to the best interests of the corporation, and with
respect to any criminal action or proceeding, had no reasonable cause to
believe his or her conduct was unlawful. In the case of an action by or in
the right of the corporation, no indemnification of expenses may be made in
respect to any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extant that
the Court of Chancery or the court in which such action was brought shall
determine that, despite the adjudication of liability, such person is fairly
and reasonably entitled to indemnity for such expenses which the court shall
deem proper section 145 of the General Corporation Law of Delaware further
provides that to the extent a director, officer, employee or agent of the
corporation has been successful in the defense of any action, suit or
proceeding referred to above or in the defense of any claim, issue or matter
therein, he or she shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him or her in connection
therewith.
The Certificate of Incorporation and By-Laws of the Company will require the
Company to indemnify its Directors and officers to the fullest extent
permitted by the General Corporation Law of the State of Delaware.
15
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The documents listed in (a) through (e) below are incorporated by reference
in the Registration Statement. All documents subsequently filed by the
Registrant pursuant to Section 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), prior to the filing of
a post-effective amendment which indicates that all securities offered have
been sold or which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference in the Registration Statement and to
be part thereof from the date or filing of such documents.
(a) The Registrant's latest annual report and, where interests in a plan are
being registered, the plan's latest annual report filed pursuant to Section
13(a) or 15(d) of the Exchange Act, or, in the case of the Registrant, either
(i) the latest prospectus filed pursuant to Rule 424(b) under the Securities
Act of 1933, as amended (the "Act"), that contains audited financial
statements for the Registrant's latest fiscal year for which such statements
have been filed or (2) the Registrant's effective registration statement on
Form 10 or 30F filed under the Exchange Act containing audited financial
statements for the Registrant's latest fiscal year.
(b) The Registrant's Form l0-Q Quarterly Report for the quarterly period
ending March 31, 1995.
(c) The Registrant's Form l0-Q Quarterly Report for the quarterly period
ending June 30, 1995.
(d) All other reports filed pursuant to Section 13 or 15(d) of the Exchange
Act since the end of the fiscal year covered by the Registrant document
referred to in (a) above.
(e) The description of the Common Stock of the Company which is contained in
a registration statement filed under the Exchange Act, including any
amendment or report filed for the purpose of updating such description.
ITEM 4. DESCRIPTION OF SECURITIES
The class of securities to be offered hereby is registered under section 12
of the securities Exchange Act of 1934, as amended. A description of the
Registrant's securities is set forth in the Prospectus incorporated as a part
of this Registration Statement.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not Applicable.
16
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of Delaware, under which
jurisdiction the Company is incorporated, empowers a corporation to indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative by reason of the fact that he or
she is or was a director, officer, employee or agent of the corporation or is
or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation or enterprise. A corporation may
indemnify against expenses (including attorneys' fees) and, other than in
respect of an action by or in the right of the corporation, against
judgments, fines and amounts paid in settlement actually and reasonably
incurred in connection with such action, suit or proceeding if the person
indemnified acted in good faith and in a manner he or she reasonably believed
to be in or not opposed to the best interests of the corporation, and with
respect to any criminal action or proceeding, had no reasonable cause to
believe his or her conduct was unlawful. In the case of an action by or in
the right of the corporation, no indemnification of expenses may be made in
respect to any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that
the Court of Chancery or the court in which such action was brought shall
determine that, despite the adjudication of liability, such person is fairly
and reasonably entitled to indemnity for such expenses which the court shall
deem proper. Section 145 of the General Corporation Law of Delaware further
provides that to the extent a director, officer, employee or agent of the
corporation has been successful in the defense of any action, suit or
proceeding referred to above or in the defense of any claim, issue or matter
therein, he or she shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him or her in connection
therewith.
The Certificate of Incorporation and By-Laws of the Company will require the
Company to indemnify its Directors and officers to the fullest extent
permitted by the General Corporation Law of the State of Delaware.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
At the present time, Options to purchase 170,000 shares of the Registrant's
Common Stock have been granted, and no Options to purchase have heretofore
been exercised. The designated Participants in the Option Plan and
Employment Agreement were executive officers and key employees of the
Registrant totaling 13 in number. Inasmuch as the securities were issued to
persons who were deemed knowledgeable, sophisticated and/or had access to
comprehensive information relevant to the Registrant, such transactions were
undertaken in reliance on the exemption from registration provided by Section
4(2) of the Securities Act of 1933.
17
<PAGE>
ITEM 8. EXHIBITS
EXHIBIT DESCRIPTION
- -------- ------------
(4) (a) Copy of the Registrant's 1994 Stock Option Plan and Form of Option
Agreements
(b) Employment Agreement of Barry Horvitz dated August 2, 1993
(c) Employment Agreement of Barry Horvitz dated August 1, 1995
(5) Opinion of Atlas, Pearlman, Trop & Borkson, P. A. relating to the
issuance of shares of Common Stock pursuant to the Option Plan,
Employment Agreement and New Employment Agreement
(24) (a) Consent of Atlas, Pearlman, Trop & Borkson, P.A. included in the
opinion filed as exhibit (5) hereto
(24) (b) Independent Auditors' Consent
ITEM 9. UNDERTAKINGS
(1) The undersigned Registrant hereby undertakes:
(a) To file, during any period in which offerings or sales are being made, a
post-effective amendment to this Registration Statement to include any
material information with respect to the plan of distribution not previously
disclosed in the Registration statement or any material change to such
information in the Registration Statement;
(b) That, for the purposes of determining any liability under the Act, each
such post-effective amendment shall be deemed to be a new Registration
Statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof; and
(c) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
(2) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the Registrant's
annual report pursuant to Section 13 (a) or Section 15(d) of the Exchange Act
(and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the Registration Statement shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
18
<PAGE>
(3) Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of
expenses incurred or paid by a director, officer of controlling person of the
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the Registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
19
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Dallas and the State of Texas, on
the 5th day of October, 1995.
ABATIX ENVIRONMENTAL CORP.
By: /S/ TERRY W. SHAVER
-------------------------
Terry W. Shaver
Chairman of the Board,
President and Principal
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
- -------------------- -------------------------------------- ---------------
/S/ TERRY W. SHAVER Chairman of the Board, President and October 5, 1995
- ------------------- Principal Executive Officer
Terry W. Shaver
/S/ GARY L. COX Executive Vice President, Chief October 5, 1995
- ------------------- Opterating Officer and Director
Gary L. Cox
/S/ FRANK J. CINATL Vice President and Principal October 5, 1995
- ------------------- Financial and Accounting Officer
Frank J. Cinatl, IV
/S/ LAMONT C. LAUE Director October 5, 1995
- -------------------
Lamont C. Laue
20
<PAGE>
EXHIBITS
OF
ABATIX ENVIRONMENTAL CORP.
FILED WITH
S-8 REGISTRATION STATEMENT
FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION
<PAGE>
EXHIBIT INDEX
ABATIX ENVIRONMENTAL CORP.
EXHIBIT DESCRIPTION PAGE
- -------- ------------ ------
(4) (a) Copy of the Registrant's 1994 Stock Option Plan and Form
of Option Agreements
(b) Employment Agreement of Barry Horvitz dated August 2, 1993
(c) Employment Agreement of Barry Horvitz dated August 1, 1995
(5) Opinion of Atlas, Pearlman, Trop & Borkson, P. A. relating
to the issuance of shares of Common Stock pursuant to the
Option Plan, Employment Agreement and New Employment
Agreement
(24) (a) Consent of Atlas, Pearlman, Trop & Borkson, P.A. included
in the opinion filed as exhibit (5) hereto
(24) (b) Independent Auditors' Consent
ABATIX ENVIRONMENTAL CORP.
1994 STOCK OPTION PLAN
1. GRANT OF OPTIONS; GENERALLY. In accordance with the provisions
hereinafter set forth in this stock option plan, the name of which is the
Abatix Environmental Corp. 1994 STOCK OPTION PLAN (the "Option Plan"), the
Board of Directors (the "Board") or, when constituted, the Compensation and
Stock Option Committee (the "Stock Option Committee") of Abatix Environmental
Corp. (the "Corporation" or "Company") is hereby authorized to issue from
time to time on the Corporation's behalf to any one or more Eligible Persons,
as hereinafter defined, options to acquire shares ("Options") of the
Corporation's $.001 par value common stock (the "Stock").
2. TYPE OF OPTIONS. The Board or the Stock Option Committee is also, in its
discretion authorized to issue options which are hereinafter referred to
collectively as NSOs, or singularly as an NSO. Except where the context
indicates to the contrary, the term "Option" or "Options" means NSOs.
3. AMOUNT OF STOCK. The aggregate number of shares of Stock which may be
purchased pursuant to the exercise of Options shall be 140,000 shares. If an
Option ceases to be exercisable, in whole or in part, the shares of Stock
underlying such Option shall continue to be available under this Option Plan.
Further, if shares of Stock are delivered to the Corporation as payment for
shares of Stock purchased by the exercise of an Option granted under this
Option Plan, such shares of Stock shall also be available under this Option
Plan. If there is any change in the number of shares of Stock, on account of
the declaration of stock dividends, recapitalization resulting in stock
split-ups, or combinations or exchanges of shares of Stock, or otherwise, the
number of shares of Stock available for purchase upon the exercise of
Options, the shares of Stock subject to any Option and the exercise price of
any outstanding Option shall be appropriately adjusted by the Board or the
Stock Option Committee. The Board or the Stock Option Committee shall give
notice of any adjustments to each Eligible Person granted an Option under
this Option Plan, and such adjustments shall be effective and binding on all
Eligible Persons. If because of one or more recapitalizations,
reorganizations or other corporate events the holders of outstanding Stock
receive something other than shares of Stock then, upon exercise of an
Option, the Eligible Person will receive what the holder would have owned if
the holder had exercised the Option immediately before the first such
corporate event and not disposed of anything the holder received as a result
of the corporate event.
4. ELIGIBLE PERSONS. An Eligible Person means (i) any individual who has
been employed by the Corporation or by any subsidiary of the Corporation, for
a continuous period of at least sixty (60) days, or (ii) any director of the
Corporation or of any subsidiary of the Corporation.
<PAGE>
5. GRANT OF OPTIONS. The Board or the Stock Option Committee has the right
to issue the Options established by this Option Plan to Eligible Persons.
The Board or the Stock Option Committee shall follow the procedures
prescribed for it elsewhere in this Option Plan. A grant of Options shall be
set forth in a writing (see Exhibit 1) signed on behalf of the Corporation or
by a majority of the members of the Stock Option Committee. The writing shall
identify the Option being granted and shall set forth the terms which govern
the Option. The terms shall be determined by the Board or the Stock Option
Committee, and may include, among other terms, the number of shares of Stock
that may be acquired pursuant to the exercise of the Options, when the
Options may be exercised, the period for which the Option is granted and
including the expiration date, the effect on the Option if the Eligible
Person terminates employment and whether the Eligible Person may deliver
shares of Stock to pay for the shares of Stock to be purchased by the
exercise of the Option. However, no term shall be set forth in the writing
which is inconsistent with any of the terms of this Option Plan. The terms
of an Option granted to an Eligible Person may differ from the terms of an
Option granted to another Eligible Person, and may differ from the terms of
an earlier Option granted to the same Eligible Person.
6. OPTION PRICE. The Option price per share shall be determined by the
Board or the Stock Option Committee at the time any Option is granted, and
shall be not less than 75% of the fair market value (but in no event less
than the par value) of one share of Stock on the date the Option is granted,
as determined by the Board or the Stock Option Committee. Fair market value
as used herein shall be:
(a) If shares of Stock shall be traded on an exchange or over-the-counter
market, the mean between the high and low sales prices of Stock on such
exchange or over-the-counter market on which such shares shall be traded on
that date, or if such exchange is closed or if no shares shall have traded on
such date, on the last preceding date on which such shares shall have traded.
(b) If shares of Stock shall not be traded on an exchange or
over-the-counter market, the value as determined by a recognized appraiser as
selected by the Board or the Stock Option Committee.
7. PURCHASE OF SHARES. An Option shall be exercised by the tender to the
Corporation of the full purchase price of the Stock with respect to which the
Option is exercised and written notice of the exercise. The purchase price
of the Stock shall be in United States dollars, payable in cash or by check,
or in property or Corporation stock, if so permitted by the Board or the
Stock Option Committee in accordance with the discretion granted in Paragraph
5 hereof, having a value equal to such purchase price. The Corporation shall
not be required to issue or deliver any certificates for shares of Stock
purchased upon the exercise of an Option prior to (i) if requested by the
Corporation, the filing with the Corporation by the Eligible Person of a
representation in writing that it is the Eligible Person's then present
intention to acquire the shares being purchased for investment and not for
resale, and/or (ii) the completion of any registration or other qualification
of such shares under any government regulatory body, which the Corporation
shall determine to be necessary or advisable.
2
<PAGE>
8. STOCK OPTION COMMITTEE. The Stock Option Committee may be appointed from
time to time by the Corporation's Board of Directors. The Board may from
time to time remove members from or add members to the Stock Option Committee.
The members of the Stock Option Committee shall elect one of its members as
its chairman. The Stock Option Committee shall hold its meetings at such
times and places as its chairman shall determine. A majority of the Stock
Option Committee's members present in person shall constitute a quorum for
the transaction of business. All determinations of the Stock Option
Committee will be made by the majority vote of the members constituting the
quorum. The members may participate in a meeting of the Stock Option
Committee by conference telephone or similar communications equipment by
means of which all members participating in the meeting can hear each other.
Participation in a meeting in that manner will constitute presence in person
at the meeting. Any decision or determination reduced to writing and signed
by all members of the Stock Option Committee will be effective as if it had
been made by a majority vote of all members of the Stock Option Committee at
a meeting which is duly called and held.
9. ADMINISTRATION OF OPTION PLAN. In addition to granting Options and to
exercising the authority granted to it elsewhere in this Option Plan, the
Board or the Stock Option Committee is granted the full right and authority
to interpret and construe the provisions of this Option Plan, promulgate,
amend and rescind rules and procedures relating to the implementation of the
Option Plan and to make all other determinations necessary or advisable for
the administration of the Option Plan, consistent, however, with the intent
of the Corporation that Options granted or awarded pursuant to the Option
Plan comply with the provisions of Paragraph 17 herein. All determinations
made by the Board or the Stock Option Committee shall be final, binding and
conclusive on all persons including the Eligible Person, the Corporation and
its shareholders, employees, officers and directors. No member of the Board
or the Stock Option Committee will be liable for any act or omission in
connection with the administration of this Option Plan unless it is
attributable to that member's willful misconduct.
10. RESTRICTIONS ON ISSUANCE OF STOCK. The Corporation shall not be
obligated to sell or issue any shares of Stock pursuant to the exercise of an
Option unless the Stock with respect to which the Option is being exercised
is at that time effectively registered or exempt from registration under the
Securities Act of 1933, as amended, and any other applicable laws, rules and
regulations. The Corporation may condition the exercise of an Option granted
in accordance herewith upon receipt from the Eligible Person, or any other
purchaser thereof, of a written representation that at the time of such
exercise it is his or her then present intention to acquire the shares of
stock for investment and not with a view to, or for sale in connection with,
any distribution thereof; except that, in the case of a legal representative
of an Eligible Person, "distribution" shall be defined to exclude
distribution by will or under the laws of descent and distribution. Prior to
issuing any shares of Stock pursuant to the exercise of an Option, the
Corporation shall take such steps as it deems necessary to satisfy any
withholding tax obligations imposed upon it by any level of government.
3
<PAGE>
11. EXERCISE IN THE EVENT OF DEATH OR TERMINATION OF EMPLOYMENT. (a) If an
Optionee shall die (i) while an employee of the Company or a Subsidiary or
(ii) within three months after termination of his employment with the Company
or a Subsidiary because of his disability, or retirement or otherwise, his
Options may be exercised, to the extent that the Optionee shall have been
entitled to do so on the date of his death or such termination of employment,
by the person or persons to whom the Optionee's right under the Option pass
by will or applicable law, or if no such person has such right, by his
executors or administrators, at any time, or from time to time, but not later
than the expiration date specified in Paragraph 5 hereof or one year after
the Optionee's death, whichever date is earlier.
(b) If an Optionee's employment by the Company or a Subsidiary shall
terminate because of his disability and such Optionee has not died within the
following three months, he may exercise his Options, to the extent that he
shall have been entitled to do so at the date of the termination of his
employment, at any time, or from time to time, but not later than the
expiration date specified in Paragraph 5 hereof or one year after termination
of employment, whichever date is earlier.
(c) If an Optionee's employment shall terminate by reason of his retirement
in accordance with the terms of the Company's tax-qualified retirement plans
or with the consent of the Board or the Stock Option Committee or
involuntarily other than by termination for cause, and such Optionee has not
died within the following three months, he may exercise his Option to the
extent he shall have been entitled to do so at the date of the termination of
his employment, at any time and from to time to time, but not later than the
expiration date specified in Paragraph 5 hereof or thirty (30) days after
termination of employment, whichever date is earlier. For purposes of this
Paragraph 11, termination for cause shall mean termination of employment by
reason of the Optionee's commission of a felony, fraud, breach of contract,
gross negligence or willful misconduct which has resulted, or is likely to
result, in substantial and material damage to the Company or a Subsidiary,
all as the Committee or the Company in its sole discretion may determine.
(d) If, except as noted in 11(e), an Optionee's employment shall terminate
for any reason other than death, disability, retirement or otherwise, all
right to exercise his Option shall terminate on the date of such employment
termination.
(e) In the event the Company terminates the employment of Messrs. Shaver,
Cox, or Cinatl whether or not for cause, the Options and the period for
exercise thereof shall not be affected in any manner by such termination.
4
<PAGE>
12. CORPORATE EVENTS. In the event of the proposed dissolution or
liquidation of the Corporation, or in the event of a proposed sale of all or
substantially all of the assets of the Corporation, the Board of Directors
may declare that each Option granted under this Option Plan shall terminate
as of a date to be fixed by the Board of Directors; provided that not less
than thirty (30) days written notice of the date so fixed shall be given to
each Eligible Person holding an Option, and each such Eligible Person shall
have the right, during the period of thirty (30) days preceding such
termination to exercise his Option as to all or any part of the shares of
Stock covered thereby, including shares of Stock as to which such Option
would not otherwise be exercisable. Nothing set forth herein shall extend
the term set for purchasing the shares of Stock set forth in the Option.
13. NO GUARANTEE OF EMPLOYMENT. Nothing in this Option Plan or in any
writing granting an Option will confer upon any Eligible Person the right to
continue in the employ of the Eligible Person's employer, or will interfere
with or restrict in any way the right of the Eligible Person's employer to
discharge such Eligible Person at any time for any reason whatsoever, with or
without cause.
14. NONTRANSFERABILITY. No Option granted under the Option Plan shall be
transferable other than by will or by the laws of descent and distribution.
During the lifetime of the Optionee, an Option shall be exercisable only by
him.
15. NO RIGHTS AS SHAREHOLDER. No Optionee shall have any rights as a
shareholder with respect to any shares subject to his Option prior to the
date of issuance to him of a certificate or certificates for such shares.
16. AMENDMENT AND DISCONTINUANCE OF OPTION PLAN. The Corporation's Board of
Directors may amend, suspend or discontinue this Option Plan at any time.
However, no such action may prejudice the rights of any Eligible Person who
has prior thereto been granted Options under this Option Plan. Further, no
amendment to this Option Plan which has the effect of (a) increasing the
aggregate number of shares of Stock subject to this Option Plan (except for
adjustments pursuant to Paragraph 3 herein), or (b) changing the definition
of Eligible Person under this Option Plan, may be effective unless and until
approval of the shareholders of the Corporation is obtained in the same
manner as approval of this Option Plan is required. The Corporation's Board
of Directors is authorized to seek the approval of the Corporation's
shareholders for any other changes it proposes to make to this Option Plan
which require such approval; however, the Board of Directors may modify the
Option Plan, as necessary, to effectuate the intent of the Option Plan as a
result of any changes in the tax, accounting or securities laws treatment of
Eligible Persons and the Option Plan, subject to the provisions set forth in
this Paragraph 16.
5
<PAGE>
17. COMPLIANCE WITH OTHER LAWS AND REGULATIONS. The Option Plan, the grant
and exercise of Options thereunder, and the obligation of the Company to sell
and deliver shares under such Options, shall be subject to all applicable
federal and state law, rules, and regulations and to such approvals by any
government or regulatory agency as may be required. The Company shall not be
required to issue or deliver any certificates for shares of Stock prior to
(a) the listing of such shares on any stock exchange or over-the-counter
market on which the Stock may then be listed and (b) the completion of any
registration or qualification of such shares under any federal or state law,
or any ruling or regulation of any government body which the Company shall,
in its sole discretion, determine to be necessary or advisable. Moreover, no
Option may be exercised if its exercise or the receipt of Stock pursuant
thereto would be contrary to applicable laws.
18. DISPOSITION OF SHARES. In the event any share of Stock acquired by an
exercise of an Option granted under the Option Plan shall be transferable
other than by will or by the laws of descent and distribution within two
years of the date such Option was granted or within one year after the
transfer of such share pursuant to such exercise, the Optionee shall give
prompt written notice thereof to the Corporation or the Stock Option
Committee.
19. NAME. The Option Plan shall be known as the "1994 Stock Option Plan."
20. NOTICES. Any notice hereunder shall be in writing and sent by certified
mail, return receipt requested or by facsimile transmission (with electronic
or written confirmation of receipt) and when addressed to the Corporation
shall be sent to it at its office, 8311 Eastpoint Drive, Suite 400, Dallas,
Texas 75227, facsimile number (214) 381-9513, attention: Terry Shaver, and
when addressed to the Committee shall be sent to it at 8311 Eastpoint Drive,
Suite 400, Dallas, Texas 75227, subject to the right of either party to
designate at any time hereafter in writing some other address, facsimile
number or person to whose attention such notice shall be sent.
6
<PAGE>
21. HEADINGS. The headings preceding the text of paragraphs: hereof are
inserted solely for convenience of reference, and shall not constitute a part
of this Option Plan nor shall they affect its meaning, construction or effect.
22. EFFECTIVE DATE. This Option Plan, the 1994 Stock Option Plan, was
adopted by the Board of Directors of the Company on September 30, 1994. The
effective date of the Option Plan shall be September 30, 1994.
Dated as of September 30, 1994. ABATIX ENVIRONMENTAL CORP.
By: S/S TERRY W. SHAVER
---------------------
Title: PRESIDENT
7
<PAGE>
EXHIBIT 1
STOCK OPTION AGREEMENT
<PAGE>
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT ("Agreement") is made and entered into as of the
__ day of ______________ 1995, by and between ABATIX ENVIRONMENTAL CORP., a
Delaware corporation (the "Corporation" or "Company"), Management as
hereinafter defined, and _________________________ (the "Optionee").
WITNESSETH:
WHEREAS, the Company adopted a stock option plan effective as of
September 30, 1994 (the "Option Plan"); and
WHEREAS, pursuant to the Option Plan, the Company and Management (as defined
in the Option Plan) desire to grant to Optionee, and Optionee desires to
accept, the Options (as hereinafter defined) pursuant to the terms and
provisions set forth herein.
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and conditions contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
1. GRANT OF OPTIONS. (a) Subject to equitable adjustment upon the
occurrence of certain events as is provided in Paragraph 5 below, the Company
granted to Optionee the option ("Option") to purchase the maximum of
_________________________ (__,___) shares ("Option shares") of the voting
common stock ("Stock") of the Company, par value $.001 per share. The Option
Shares shall be treasury, or authorized but previously unissued, shares of
Stock of the Company as determined by the Company's Board of Directors
("Board") from time to time. The Company, during the term of this Agreement,
will at all times reserve and keep available, and will seek or obtain from
any regulatory body having jurisdiction, any requisite authority necessary to
issue and to sell, the number of shares of Stock that shall be sufficient to
satisfy the requirements of this Agreement. The inability of the Company
(after reasonable good faith attempts) to obtain from any regulatory body
having jurisdiction the authority deemed necessary by counsel for the Company
for the lawful issuance and sale of its Stock hereunder shall relieve the
Company of any liability in respect of the failure to issue or sell Stock as
to which the requisite authority has not been obtained.
(b) Notwithstanding anything contained herein to the contrary, the Options
granted herein are such as defined and provided in the Option Plan. In this
regard, this Option is granted pursuant to and is governed by the terms of
the Option Plan and, unless the context otherwise requires, terms used herein
shall have the same meaning as in the Option Plan. This Option shall he
governed by the Option Plan as it exists on the date of this Agreement as
such Option Plan may be amended or revised hereafter; PROVIDED, HOWEVER, that
any such amendments and revisions to the Option Plan after the date hereof
shall not affect this Option to the extent such amendments and revisions
materially alter the rights and duties set forth in the Option Plan and this
Agreement as of the date hereof.
<PAGE>
(c) The granting and acceptance of this Option shall impose no obligation
upon the Optionee to exercise such Option.
(d) For all purposes hereof, the date that these Options are deemed to be
granted shall be September 30, 1994, notwithstanding the date of this
Agreement.
2. EXERCISE OF THE OPTION. (a) Subject to the provisions of this Agreement
and the Option Plan, the Optionee may exercise this Option in whole or in
part at any time prior to expiration of the Option Period, subject to any
exercise requirements set forth herein and in the Option Plan. In this
regard, the Optionee shall deliver a written notification to Management and
to the Board in the form attached hereto as EXHIBIT "A" and incorporated
herein by reference specifying the date that this Option was granted, the
number of Option Shares elected to be acquired and any other information
which may be reasonably requested by Management or the Company from time to
time.
(b) The exercise notice shall be accompanied by a fully executed
Subscription Agreement in the form attached hereto as EXHIBIT "B" and
incorporated herein by reference and a check payable to the Company
representing collected funds in the full amount of the Exercise Price (as
hereinafter defined) for the Option Shares being acquired.
(c) If, in the opinion of counsel for the Company, such a representation is
required under the Securities Act of 1933 or any other applicable law,
regulation or rule of any governmental authority, then, as a condition to the
exercise of any portion of the Option, the Company may require the Optionee
to represent and warrant at the time of such exercise that any Option Shares
acquired upon exercise of the Option are being acquired only for investment
and not with any present intention to sell or distribute such Option Shares
unless and until such Option Shares are or become fully registered and
tradable in the public market place.
(d) Promptly after the exercise of the Option as described above and the
payment of the full Exercise Price, the Optionee shall be entitled to the
issuance of a stock certificate evidencing his ownership of the Option Shares
acquired, subject to appropriate legends recommended by counsel to the
Company or required by applicable laws, regulations or rules of any
appropriate governmental authority. Optionee shall have none of the rights
of a shareholder in the Company until Option Shares are acquired by and
issued to him as provided in this Agreement, and no adjustment shall be made
for dividends or other rights for which the record date is prior to the date
such stock certificate is (or should reasonably be) issued except to the
extent provided in Paragraph 5 of this Agreement.
2
<PAGE>
3. EXERCISE PRICE. (a) The purchase price ("Exercise Price") for Option
Shares purchased pursuant to the exercise of this Option granted pursuant
hereto shall be as outlined in Paragraph 4 (b). The Exercise Price shall be
adjusted on an equitable basis if the Option Shares are adjusted upon the
occurrence of certain events as provided in Paragraph 5 of this Agreement in
order to reflect an Exercise Price for the adjusted number of Option Shares
substantially equivalent to the Exercise Price for the original number of
Option Shares to which the Optionee was entitled to purchase prior to
occurrence of those designated events.
(b) The Exercise Price shall be paid to the Company in full in cash upon
exercise of the Option pursuant to this Agreement. Any exercise of this
Option granted pursuant to this Agreement shall be invalid and have no effect
if the Exercise Price is not paid in full as provided herein.
4. OPTION PERIOD AND EXERCISE SCHEDULE. (a) Subject to the provisions of
Paragraph 4 (b) and (c) hereof, the Option shall be exercisable within the
two year period (the "Option Period") commencing on the date such Options are
eligible for exercise.
(b) Subject to the provisions of Paragraph 4 (c) hereof, the Option may be
exercised during the Option Period to acquire Option Shares. In this regard,
Optionee may exercise this Option with respect to the Option Shares as
follows:
Number of Option Shares Eligible for Exercise Price
Date Options Become Purchase from and After the Date Price Per
Exercisable Options Become Exercisable Option Share
- -------------------- ------------------------------------ ----------------
___________________ _______________ $__________
___________________ _______________ $__________
___________________ _______________ $__________
Total
===============
(c) The Option Period may be accelerated or shortened upon the occurrence of
a Corporate Event (as defined in Paragraph 7 hereof), in which event the
Exercise Schedule shall be waived and the entire Option granted and
outstanding pursuant hereto will be immediately exercisable in full.
3
<PAGE>
(d) Termination of Employment: (i) If an Optionee shall die (1) while an
employee of the Company or a Subsidiary or (2) within three months after
termination of his employment with the Company or a Subsidiary because of his
disability, or retirement or otherwise, his Options may be exercised, to the
extent that the Optionee shall have been entitled to do so on the date of his
death or such termination of employment, by the person or persons to whom the
Optionee's right under the Option pass by will or applicable law, or if no
such person has such right, by his executors or administrators, at any time,
or from time to time, but not later than the expiration date specified in
Paragraph 5 hereof or one year after the Optionee's death, whichever date is
earlier.
(ii) If an Optionee's employment by the Company or a Subsidiary shall
terminate because of his disability and such Optionee has not died within the
following three months, he may exercise his Options, to the extent that he
shall have been entitled to do so at the date of the termination of his
employment, at any time, or from time to time, but not later than the
expiration date specified in Paragraph 4 (a) hereof or one year after
termination of employment, whichever date is earlier.
(iii) If an Optionee's employment shall terminate by reason of his
retirement in accordance with the terms of the Company's tax-qualified
retirement plans or with the consent of the Board or the Stock Option
Committee or involuntarily other than by termination for cause, and such
Optionee has not died within the following three months, he may exercise his
Option to the extent he shall have been entitled to do so at the date of the
termination of his employment, at any time and from to time to time, but not
later than the expiration date specified in Paragraph 4 (a) hereof or thirty
(30) days after termination of employment, whichever date is earlier. For
purposes of this Paragraph 4, termination for cause shall mean termination of
employment by reason of the Optionee's commission of a felony, fraud, breach
of contract, gross negligence or willful misconduct which has resulted, or is
likely to result, in substantial and material damage to the Company or a
Subsidiary, all as the Committee or the Company in its sole discretion may
determine.
(iv) If, except as noted in Paragraph 11 (e) of the Option Plan, an
Optionee's employment shall terminate for any reason other than death,
disability, retirement or otherwise, all right to exercise his Option shall
terminate on the date of such employment termination.
5. ADJUSTMENT TO OPTION SHARES AND EXERCISE PRICE. The aggregate number of
Option Shares available to be acquired pursuant to the exercise of the Option
hereunder, and the Exercise Price per Option Share, shall all be
proportionately and equitably adjusted for any increase or decrease in the
number of issued shares of Stock subsequent to the date of this Agreement
resulting from (i) a stock split (forward or reverse) or other subdivision or
consolidation of shares of stock or any other capital adjustment having such
effect, (ii) the payment of a stock dividend, or (iii) any other increase or
decrease in such shares of Stock effected without receipt of adequate and
fair market value consideration by the Company.
4
<PAGE>
6. SUBSTITUTION FOR STOCK. If the Company shall be the surviving
corporation in any merger or consolidation, this Option shall pertain, apply
and relate to, and shall permit the Optionee to acquire, the new restated
securities of the Company subject to equitable adjustments to reflect (i)
the ownership that the Optionee would have been entitled to achieve in the
Company after consummation of the merger or consolidation assuming that the
Optionee had exercised the Option and owned Stock immediately before
consummation of such transaction, and (ii) the occurrence of the events noted
in Paragraph 5 (i) - (iii) above.
7. CORPORATE EVENTS. In the event of the proposed dissolution or
liquidation of the Corporation, or in the event of a proposed sale of all or
substantially all of the assets of the Corporation, the Board of Directors
may declare that each Option shall terminate as of a date to be fixed by the
Board of Directors; provided that not less than thirty (30) days written
notice of the date so fixed shall be given to each Eligible Person holding an
Option, and each such Eligible Person shall have the right, during the period
of thirty (30) days preceding such termination to exercise his Option as to
all or any part of the shares of Stock covered thereby, including shares of
Stock as to which such Option would not otherwise be exercisable. Nothing
set forth herein shall extend the term set for purchasing the shares of Stock
set forth in the Option.
8. RESTRICTIONS ON ISSUANCE OF STOCK. The Corporation shall not be
obligated to sell or issue any shares of Stock pursuant to the exercise of an
Option unless the Stock with respect to which the Option is being exercised
is at that time effectively registered or exempt from registration under the
Securities Act of 1933, as amended, and any other applicable laws, rules and
regulations. The Corporation may condition the exercise of an Option granted
in accordance herewith upon receipt from the Eligible Person, or any other
purchaser thereof, of a written representation that at the time of such
exercise it is his or her then present intention to acquire the shares of
stock for investment and not with a view to, or for sale in connection with,
any distribution thereof; except that, in the case of a legal representative
of an Eligible Person, "distribution" shall be defined to exclude
distribution by will or under the laws of descent and distribution. Prior to
issuing any shares of Stock pursuant to the exercise of an Option, the
Corporation shall take such steps as it deems necessary to satisfy any
withholding tax obligations imposed upon it by any level of government.
5
<PAGE>
9. NOTICES. All notices, demands or other communications required or
provided hereunder shall be in writing and shall be deemed to have been given
at the earlier of (i) actual receipt, or (ii) three (3) days after deposit in
the United States Mail as provided below. Notice may be sent by personal
service to the parties at the addresses set forth below, or at such other
addresses as such parties may designate by notice to the other parties, or by
deposit in the United States Mail, certified or registered, postage prepaid,
return receipt requested, addressed to the parties at the addresses set forth
below or at such other addresses as such parties may designate by notice to
the other parties.
If to the Company: Abatix Environmental Corp.
8311 Eastpoint Drive, Suite 400
Dallas, Texas 75227
Attn: President
with a copy to: Jim Schneider, Esq.,
Atlas, Pearlman, Trop & Borkson, P.A.
3200 North Military Trail, Suite 205
Boca Raton, Florida 33431
If to the Stock Option Committee: c/o Abatix Environmental Corp.
8311 Eastpoint Drive, Suite 400
Dallas, Texas 75227
Attn: Stock Option Committee
If to Optionee: ____________________________________
____________________________________
____________________________________
____________________________________
10. APPLICABLE LAW. This Agreement and the obligations of the parties
hereunder shall be interpreted, construed, governed and enforced in
accordance with the laws of the State of Texas, and shall be performed in
Dallas County, Texas.
6
<PAGE>
11. ENTIRE AGREEMENT. Subject to and except as set forth in the provisions
of the Option Plan, this Agreement contains the entire agreement among the
parties hereto relative to the transactions contemplated hereby, and
supersedes all other oral and written agreements, express or implied
concerning the subject matter of this Agreement. No variations,
modifications or changes to this Agreement shall be binding upon a party
unless set forth in a document duly executed by or on behalf of such party.
12. NONTRANSFERABILITY. No Option granted under the Option Plan shall be
transferable by the Optionee other than by will or by the laws of descent and
distribution.
13. INDEPENDENT COVENANTS. The provisions contained in this Agreement are
independent and separate. In the event that any provision is declared
unenforceable, the other provisions shall not be affected or impaired but
shall remain valid and enforceable.
14. CONSENT AND WAIVER. No consent or waiver, express or implied, by any
party hereto of any breach or default by any other party hereto in the
performance of its obligations hereunder shall be deemed or construed to be a
consent or waiver to or of any other breach or default in the performance by
such party of the same or any other obligations of such party hereunder.
Failure on the part of any party to complain of any act or failure to act of
the other party or to declare the other party in default, irrespective of how
long such failure continues, shall not constitute a waiver by such party of
its rights hereunder.
15. SEVERABILITY. If any provision of this Agreement or the application
thereof to any person or circumstance shall he held invalid or unenforceable
to any extent, such illegality or unenforceability shall extend to that
provision solely, and the remainder of this Agreement shall be enforced to
the greatest extent permitted by law as if such illegal or unenforceable
provision were not incorporated herein.
16. RELATIONSHIP OF THE OPTIONEE. The relationship between the Optionee and
the Company shall be limited to the performance of the transactions
contemplated by this Agreement and in accordance with the terms of this
Agreement. Nothing herein shall be construed to authorize Optionee to act as
general agent for any other except as provided herein. Furthermore, the
Company and any related entity are not by this Agreement or any Option
granted pursuant to the Option Plan obligated to continue the employment of
the Optionee.
7
<PAGE>
17. SUCCESSORS. This Agreement shall be binding upon the parties hereto,
their heirs, administrators, successors and executors, and the parties hereto
do covenant and agree that they themselves and their respective heirs,
executors, successors and administrators will execute any and all
instruments, releases and consents that may be reasonably required of them to
more fully execute the provisions of this Agreement. Except as otherwise
provided herein, this Agreement shall inure to the benefit of and be
enforceable by and against the respective heirs, executors, administrators,
legal representatives and successors of the Optionee.
18. THIRD PARTY BENEFICIARY. Nothing in this Agreement shall be deemed to
create any right in any creditor or other person not a party hereto (other
than the successors and assigns of a party hereto), and this instrument shall
not be construed in any respect to be a contract in whole or in part for the
benefit of any other party except as aforesaid.
19. ADDITIONAL ACTS. In connection with this Agreement, as well as all
transactions contemplated by this Agreement, Optionee agrees to execute and
deliver such additional documents or perform such additional acts as may be
necessary or appropriate to effectuate, carry out and perform all of the
terms, provisions and conditions of this Agreement and all such transactions
provided herein.
20. COUNTERPARTS. This agreement may be executed in several counterparts,
each of which shall serve as an original for all purposes, but all copies of
which shall constitute but one and the same Agreement.
21. HEADINGS. The headings preceding the text of paragraphs: hereof are
inserted solely for convenience of reference, and shall not constitute a part
of this Stock Option Agreement nor shall they affect its meaning,
construction or effect.
22. ENFORCEMENT. In the event it becomes necessary for any party hereto to
file suit to enforce this Agreement or any provision contained herein, the
prevailing party in such action shall be entitled to recover in addition to
all other remedies or damages, court costs, expenses of litigation and
reasonable attorneys fees incurred in such suit.
23. BUSINESS DAYS. Whenever the terms of this Agreement call for the
performance of a specific act on a specified date, which date falls on a
Saturday, Sunday or legal holiday, the date for the performance of such act
shall be postponed to the next succeeding regular business day following
such Saturday, Sunday or legal holiday.
8
<PAGE>
24. TERM OF THE AGREEMENT. The term ("Term") of this Agreement shall
commence on the date hereof and shall continue until expiration of the Option
Period at which time this Agreement shall automatically terminate.
IN WITNESS WHEREOF, the parties to this Agreement have hereunto set their
hands to be effective as of the 30th day of September, 1994
COMPANY:
ABATIX ENVIRONMENTAL CORP.,
A DELAWARE CORPORATION
By:___________________________________
Name:_________________________________
Title:________________________________
By:___________________________________
Name:_________________________________
Title:________________________________
COMMITTEE:
By:___________________________________
Name:_________________________________
By:___________________________________
Name:_________________________________
OPTIONEE:
By:___________________________________
Name:_________________________________
9
<PAGE>
EXHIBIT A
TO
STOCK OPTION AGREEMENT
NOTIFICATION OF EXERCISE OF OPTION
_______________, 199_
To: The Board of Directors and Stock Option Plan Committee of Abatix
Environmental Corp.
Pursuant to the terms of that certain Abatix Stock Option Agreement dated to
be effective as of the 30th day of September, 1994 by and between Abatix
Environmental Corp. (the "Corporation" or "Company"), and the undersigned as
Optionee, the Company granted the undersigned an option to purchase
_________________________ (__,___) shares (the "Option Shares") of the
Company's voting common stock, $.00l par value (the "Stock"), at an exercise
price of _________________________ ($ _.__) per share (the "Option Price").
In connection therewith, the undersigned hereby gives notice of the
undersigned's election to exercise such Option for _________________________
(__,___) Option Shares. Enclosed herewith is a check/cash in the amount of
_________________________ and __/100 Dollars ($__,___.__) as payment in full
of the Exercise Price for such Option Shares.
Very truly yours,
Signature:_____________________________
Name:__________________________________
Date:__________________________________
<PAGE>
EXHIBIT B
TO
STOCK OPTION AGREEMENT
SUBSCRIPTION AGREEMENT
Abatix Environmental Corp.
8311 Eastpoint Drive, Suite 400
Dallas, Texas 75227
ATTENTION: President
Gentlemen:
1. SUBSCRIPTION FOR SHARES. (a) The undersigned ("Subscriber") hereby
subscribes for and agrees to purchase ______________________________
(_________) shares (the "Shares") or the voting common stock, par value $.00l
per share (the "Stock"), of ABATIX ENVIRONMENTAL CORP., a Delaware
corporation ("Abatix") pursuant to this Subscription Agreement. Terms not
otherwise defined herein shall have the meaning ascribed to them in that
certain Abatix Stock Option Plan (the "Option Plan") dated to be effective as
of September 30, 1994, and that certain Option Agreement by and between
Abatix and the subscriber dated to be effective as of September 30, l994.
(b) Upon execution and completion of this Subscription Agreement, the
undersigned hereby agrees to deliver the completed Subscription Agreement to
Abatix at the following address:
Abatix Environmental Corp.
8311 Eastpoint Drive, Suite 400
Dallas, Texas 75227
(c) Abatix offers these shares to the undersigned subject to the conditions
referred to in this Subscription Agreement, the Option Plan and the Option
Agreement. Abatix reserves the right to reject any subscription in whole or
in part if any such conditions are not fulfilled and satisfied on or before
the Closing Date.
2. SUBSCRIPTION AMOUNT. The shares will be issued by Abatix to the
undersigned, and the undersigned will acquire and invest in the shares,
pursuant to this Subscription Agreement. The undersigned hereby agrees to
pay the sum of _________________________ ($_.__) per share, and thus an
aggregate purchase price of _________________________ and __/100 Dollars
($__,___.__) (the "Subscription Amount"), to acquire the number of subscribed
Shares referenced above. The Subscription Amount is enclosed with this
Subscription Agreement.
<PAGE>
3. REPRESENTATIONS AND WARRANTIES. The undersigned hereby represents and
warrants to Abatix as follows:
(a) The undersigned hereby acknowledges that it (i) has received copies of,
or has been afforded the opportunity to examine and copy, all desired
financial records, documents, and other books and records of and relating to
Abatix, (ii) has been provided the opportunity to ask questions of, and
receive answers from, Abatix or its officers or representatives concerning
Abatix and/or the Shares and to obtain any additional information, to the
extent Abatix or its officers or representatives possess such information or
can acquire it without unreasonable effort or expense, necessary to verify
the accuracy of the information and materials heretofore delivered; (iii)
understands the information obtained as described above, the business in
which Abatix engages, the risks and speculative nature of the business of
Abatix and that risks or obtaining a return on its investment in the shares
are very high and speculative; (iv) is aware that there are economic risks
that could adversely affect an investment in the Shares, and (v) has had
ready access to any and all documents which it deems relevant to the purchase
of the Shares and no requested information, oral or written, has been
withheld.
(b) The undersigned is making the investment decision based on the
information and materials heretofore delivered or available to the
undersigned by or on behalf of Abatix.
(c) If the shares to be acquired pursuant hereto have been effectively
registered under a "shelf" or other registration statement with the
Securities and Exchange Commission ("Commission"), then the undersigned
hereby agrees to provide any information required by the Company and
otherwise to comply with the terms of Paragraph 7 hereof with respect to such
Shares. If the Shares have not been registered with the Commission as
described above, then the undersigned understands, acknowledges and agrees
that, in reliance upon its representations set forth herein, the Shares have
not been (i) registered under the Securities Act of 1933, as amended and
enacted in the United States of America (the "Act"), the securities laws of
any state of the United States ("State Act") or the law of any other lawful
jurisdiction ("Other Applicable Laws"), or (ii) approved by the Commission,
or any other securities regulatory authority of any state or other lawful
jurisdiction, nor has the Commission or any other commission or authority
passed upon or endorsed the merits of this transaction or the accuracy or
adequacy of any information or materials furnished to the undersigned by or
on behalf of Abatix.
(d) If the Shares are not registered as described above and Abatix has not
undertaken to register the resale of any of the Shares under the Act, any
State Act, or any Other Applicable Laws, the undersigned understands,
acknowledges and agrees that, until such registration takes place (if ever),
the undersigned must bear the economic risk of holding the Shares for an
indefinite period of time unless the Shares are offered, resold or
transferred in a transaction or as part of a transition in connection with
which Abatix has received an opinion of counsel satisfactory to Abatix that
an exemption from such registration is available or compliance with such
registration requirements is not required.
2
<PAGE>
(e) The undersigned is able to bear the economic risk of investing in
Abatix, including a loss of the entire investment or consideration deemed to
be invested in Abatix, and it has no need in the foreseeable future for
liquidity in its investment in Abatix except (to the extent applicable) as
may be available through the public markets as a result of a registration as
described above.
(f) The undersigned understands that the investment in Abatix is a
speculative undertaking with advantages and benefits that are generally
available only to a certain type of investor, and represents that:
(i) The undersigned is experienced and sophisticated in investment matters,
including investments similar to an investment in Abatix and who alone or
with its representative or advisor has such knowledge and experience in
financial and business matters that the undersigned is capable of evaluating
the merits and risks of the investment in the Shares; and
(ii) The undersigned has carefully considered and evaluated the risks and
advantages of investing in Abatix; and
(iii) All commitments of the undersigned to all investments of this nature
bear a reasonable relation to its net worth and to the amount of income which
it expects to receive during the current taxable year; and
(iv) Unless such shares are registered as described above, the undersigned
is purchasing the shares for investment purposes for its own account and not
for any other person and not with the view to immediate resale or
distribution of the shares; and
(v) The undersigned is in a financial position that is stable and liquid so
that an investment in Abatix would not impair its ability to meet reasonably
foreseeable financial demands and contingencies.
(g) The undersigned recognizes that Abatix' historical performance may not
be indicative of future performance and that a purchase of the shares may
involve certain risks.
(h) If the Shares are not registered as described above, the undersigned
will not transfer the Shares without registering then under any applicable
federal, state or other securities laws unless the undersigned obtains an
opinion of counsel satisfactory to Abatix stating that the transfer is exempt
from registration or such registration is not required under such laws.
(i) The undersigned represents that, to the undersigned's best knowledge,
the offer of Shares to, and purchase of Shares by, the undersigned, will not
and does not violate the provisions of any applicable law or regulation to
which such offer and sale is subject.
3
<PAGE>
(j) If the Shares have not been registered as described herein, the
undersigned understands and agrees that the certificates representing the
shares issued to the undersigned pursuant to this Subscription Agreement
shall reflect legends in substantial conformity with the following:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ("SHARES") HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED AND ENACTED IN THE
UNITED STATES OF AMERICA (THE "ACT"), THE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES ("STATE ACT"), OR THE LAWS OF ANY OTHER LAWFUL JURISDICTION
("OTHER APPLICABLE LAWS"). ACCORDINGLY, THE HOLDER OF THIS CERTIFICATE MAY
NOT REOFFER, RESELL, RENOUNCE OR TRANSFER THE SHARES DIRECTLY OR INDIRECTLY
IN THE UNITED STATES UNLESS SUCH REOFFER, RESALE, RENUNCIATION, TRANSFER OR
DELIVERY OF THE SHARES IN THE UNITED STATES IS MADE IN COMPLIANCE WITH THE
REGISTRATION REQUIREMENTS OF THE ACT, AND APPLICABLE STATE ACT, AND ANY OTHER
APPLICABLE LAWS OR AS PART OF A TRANSACTION IN CONNECTION WITH WHICH THE
COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
SUCH TRANSACTION IS EXEMPT FROM SUCH REGISTRATION REQUIREMENTS OR COMPLIANCE
WITH SUCH REGISTRATION REQUIREMENTS IS NOT REQUIRED."
(k) If the Shares have been registered as described herein, then the
undersigned understands and agrees that the certificates representing the
shares may reflect other legends as may be deemed necessary or appropriate by
the Company from time to time.
(l) The undersigned acknowledges that stop transfer instructions will be
issued to Abatix' transfer agent and registrar with respect to the Shares to
restrict transfer of the Shares not in compliance with the foregoing
restrictions and legends (if any).
4. INDEMNIFICATION OF ABATIX. The undersigned agrees to indemnify and hold
harmless Abatix and its directors and officers, affiliates or anyone acting
on behalf of Abatix from and against all damages, losses, costs and expenses
(including reasonable attorneys' fees) which they or any of them may incur by
reason of the failure of the undersigned to fulfill any of the terms or
conditions of this Subscription Agreement or by reason of any breach of the
representations and warranties made by the undersigned herein, or in any
document provided by the undersigned to Abatix.
4
<PAGE>
5. FORM OF OWNERSHIP. Please indicate the form of ownership desired for the
Shares. The undersigned shall supply Abatix with any and all information
requested by Abatix with respect to the form of ownership of the Shares which
is requested.
_____ Individual (one signature required)
_____ Joint Tenants with right of survivorship (All parties must sign)
_____ Tenants-in-common (All parties must sign)
_____ Trust (Trustee must sign as follows: [TRUSTEE NAME] as trustee for
[TRUST NAME] dated [DATE OF TRUST AGREEMENT OR ARRANGEMENT])
_____ Nominee
_____ Other entities
__________________________________________
Please PRINT the exact name (registration)
6. SHARE TRANSFER RESTRICTIONS. If the Shares offered herein have not been
registered under the Act, any State Act or any Other Applicable Laws, these
Shares may not be reoffered, resold, renounced or transferred directly or
indirectly unless such Shares are subsequently registered under or comply
with the Act, State Act and Other Applicable Laws, or unless the shares are
offered, resold, renounced or transferred as part of a transaction in
connection with which Abatix has received an opinion of counsel satisfactory
to Abatix that an exemption from such registration is available or compliance
with such registration requirements is not required.
These Shares may not be offered in whole or in part, directly or indirectly,
to any purchaser unless the transaction is in compliance with all applicable
securities laws or regulations and the terms and provisions of the
Subscription Agreement.
5
<PAGE>
7. RESTRICTIONS ON ISSUANCE OF STOCK. The Corporation shall not be
obligated to sell or issue any shares of Stock pursuant to the exercise of an
Option unless the Stock with respect to which the Option is being exercised
is at that time effectively registered or exempt from registration under the
Act, and any other applicable laws, rules and regulations. The Corporation
may condition the exercise of an Option granted in accordance herewith upon
receipt from the Eligible Person, or any other purchaser thereof, of a
written representation that at the time of such exercise it is his or her
then present intention to acquire the shares of stock for investment and not
with a view to, or for sale in connection with, any distribution thereof;
except that, in the case of a legal representative of an Eligible Person,
"distribution" shall be defined to exclude distribution by will or under the
laws of descent and distribution. Prior to issuing any shares of Stock
pursuant to the exercise of an Option, the Corporation shall take such steps
as it deems necessary to satisfy any withholding tax obligations imposed upon
it by any level of government.
8. INDEMNIFICATION OF SUBSCRIBER. Abatix agrees to indemnify and hold
harmless the Subscriber from and against all damages, losses, costs and
expenses (including reasonable attorneys' fees) which they or any of them may
incur by reason of the failure of Abatix to fulfill any of the terms or
conditions of this Subscription Agreement.
9. MISCELLANEOUS. (a) The undersigned agrees not to transfer or assign
this Subscription Agreement, or any of the undersigned's interests herein.
(b) The undersigned Subscriber agrees that the undersigned Subscriber may
not cancel, terminate, or revoke this Subscription Agreement or any agreement
of the undersigned made hereunder and that this Subscription Agreement shall
survive the death or disability of the undersigned Subscriber and shall be
binding upon the undersigned Subscriber's heirs, executors, administrators,
successors and assigns.
(c) Subject to the terms and provisions of the Option Plan and Option
Agreement, this Subscription Agreement constitutes the entire agreement among
the parties hereto with respect to the subject matter hereof, and this
Subscription Agreement may be amended only by a writing executed by all
parties.
(d) The undersigned and Abatix agree that each will execute and deliver or
cause to be executed and delivered all such further and other documents and
assurances, and do or cause to be done all such further acts and things as
say be necessary or desirable, to carry out the intent of this Subscription
Agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK]
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_________________________________________
Name or Subscriber (please print or type)
_________________________________________
Signature of Subscriber
Address: ________________________________
________________________________
________________________________
Taxpayer Identification No.: ____________
EXECUTED AT:
_________________________________________
City and State
This _____ day of ______________, 1995
SUBSCRIPTION ACCEPTED:
ABATIX ENVIRONMENTAL CORP.
By:______________________________________
Name:____________________________________
Title:___________________________________
Date:____________________________________
7
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into as of
the 2nd day of August, 1993 (the "Effective Date"), by and between Abatix
Environmental Corp., a Delaware corporation (the "Company"), and Barry
Horvitz (the "Employee").
W I T N E S S E T H:
WHEREAS, the Company is a for-profit corporation incorporated under the laws
of the State of Delaware and is engaged in certain sales activities and other
related endeavors ancillary to such activities (hereinafter referred to as
the "Business");
WHEREAS, Employee is possessed of particular skills, knowledge and abilities
useful to the Business of the Company; and
WHEREAS, the Company desires to employ the Employee, and the Employee desires
to be employed by Company to aid and assist the Company in carrying out the
Business of the Company, pursuant to the terms and conditions contained
herein.
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and conditions contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
ARTICLE I
EMPLOYMENT
SECTION 1.01. EMPLOYMENT AND TITLE. (a) Company hereby agrees to employ
Employee, and Employee hereby accepts employment as salesperson, upon the
terms and conditions hereinafter set forth, each Party expressly revoking any
and all prior employment agreements to which the Parties may be mutually
subject. As salesperson, Employee shall serve Company and its affiliates on
a full-time basis subject to the supervision and control of the Management
(hereinafter referred to as the "Management"). Employee hereby agrees to
serve the Company in such capacity for the period commencing on the Effective
Date and ending on July 31, 1996 unless this Agreement is terminated prior to
such date pursuant to the terms of Section 3 hereof (hereinafter referred to
as the "Employment Term").
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(b) During the term of this Agreement, the Company will employ Employee and
Employee will render services to the Company in such capacities and with
respect to such matters as the Management of the Company may determine,
including providing expertise and advice pertaining to sales activities of
the Company.
(c) Unless otherwise authorized by the Company's Management, the Employee
shall [NOT] have the right to make any contracts or commitments for or on
behalf of the Company, to sign or endorse any commercial paper, contracts,
or instruments of any nature, and to enter into any obligation binding the
Company to the payment of money or otherwise.
(d) Employee agrees to serve the Company faithfully and to the best of his
abilities in the capacity referenced above and in any other work or activity
in furtherance of the business of the Company in which his talents may be
applied in a manner commensurate with his position, training, knowledge,
skills and abilities, and to perform any and all duties described by the
Management or any other appropriate officer of the Company, during the course
of his employment. Except as otherwise may be approved by the Management of
the Company, Employee further agrees to devote all of his business time,
attention, abilities and energy exclusively to the business of the Company
throughout the Employment Term, except for vacation periods and periods of
sick leave in accordance with the Company's policies as may be adopted or
amended by the Management from time to time.
(e) The Employee further agrees to abide by the Company's Articles of
Incorporation, Bylaws, rules and regulations as may be in effect, amended
and/or established from time to time by the Management and/or authorized
officers after the Employee has been provided with such document.
(f) Employee shall keep the President and other Management of the Company
informed, as the President may request or direct, as to all activities in
which Employee proposes to be or is engaged on behalf of the Company.
SECTION 1.02. GENERAL OBLIGATIONS AND DUTIES. During the term of this
Agreement:
(a) In carrying out this Agreement and the lawful business affairs of the
Company, Employee shall also accept such other duties and assignments as the
Management of the Company may from time to time determine provided it
pertains to outside sales.
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ARTICLE II
COMPENSATION, COMMISSION AND BENEFITS
SECTION 2.01. COMPENSATION. (a) As full compensation for all services
rendered pursuant to this Agreement, the Employee shall be entitled to
receive from the Company an aggregate base salary (hereinafter referred to as
the "Base Salary") at the rate of Ten Thousand and No/100 Dollars
($10,000.00) per month, which Base Salary shall be reduced to Eight Thousand
and No/100 Dollars ($8,000.00) per month beginning the 13th month and
continuing through the 36th month of this Agreement.
(1) If no additional employment agreement has been entered into and Employee
continues to work for the Company after the 36th month, then each year
thereafter, the Company further agrees to continue the Base Salary of Eight
Thousand and No/100 Dollars ($8,000.00) per month contingent upon the
Employee's continued achievement of a minimum of $400,000.00 in Gross Profits
(as defined in Section 2.02 (d)) for the previous twelve month period.
(b) The monthly Base Salary to be paid to the Employee hereunder shall be
paid in two (2) equal installments each month, less applicable withholding,
FICA, other taxes and authorized deductions, if any. Such installments shall
be paid on the first (1st) and fifteenth (15th) day of each calendar month,
beginning with the execution of this Agreement. All salary payments are
subject to appropriate withholding for federal, state, local and FICA taxes.
(c) In the event that the employee attains $300,000.00 in gross Profit in the
fiscal year then an additional 2% commission per year is to be paid; and in
the event that the employee attains an additional $100,000.00 in Gross Profit,
then an additional 2% commission is to be paid and when each additional
increment of $100,000.00 Gross Profit is achieved.
d) In the event that the employee attains Gross Profit of $400,001.00 in the
fiscal year, then a bonus of $20,000.00 will be paid.
(e) In the event that the employee attains Gross Profit of $500,001.00 in the
fiscal year, then a bonus of $15,000.00 will be paid.
(f) In the event that the employee attains Gross Profit of $550,001.00 in the
fiscal year, then a bonus of $10,000.00 will be paid.
(g) A car phone allowance of $125.00 per month payable on the 1st of each
month.
(h) A digital pager will be provided and payable by the Company.
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SECTION 2.02. COMMISSIONS. (a) Employee shall be entitled to receive
commissions (the "Commissions") at the rate of twenty-five (25%) percent
under this Agreement for monthly Gross Profit on sales to accounts assigned
to the Employee during the term of this Agreement.
(b) The Commission shall accrue hereunder with respect to gross profit on
monthly sales to customers (as defined in Section 4.01 (ii)) assigned to the
Employee, the prior acceptance of a credit application of a Customer and
within the limits of the credit terms set by the Company. The Commission
shall be due and payable less the $10,000.00, ($8,000.00 beginning the 13th
month), Base Salary paid the previous month on the last business day of each
calendar month for sales by the Employee and accepted by the Company during
the prior calendar month during the Term hereof. If commissions during any
month do not exceed Base Salary, Employee will have no obligation to refund
the difference.
(c) For purposes of this Article 2, "Net Sales" shall mean the gross amount
actually charged by the Company net of freight and taxes in connection with
sales to accounts assigned to the Employee during the Term hereof and for
which a purchase order has been accepted by the Company, net of any
adjustments, restocking charges, and gross amounts refunded or returned to
the Customer on sales by the Employee within the current or any previous
fiscal year.
(d) For purposes of this Article 2, "Gross Profit" shall mean Net Sales less
the cost of goods sold as determined by the first in first out method and any
applicable freight and taxes.
SECTION 2.03. REIMBURSEMENT FOR EXPENSES. As permitted by Company's
President or Management from time to time, Employee shall be authorized to
incur reasonable business expenses in connection with performing his duties
hereunder and promoting the business of the Company. The Company shall
reimburse Employee for all of his reasonable business expenses (including
reasonable expenditures for travel, meals and hotel accommodations) incurred
in the course of his employment by the Company pursuant to this Agreement up
to an amount not to exceed Five Hundred and no/100 dollars ($500.00) per
month. Expenses are non cumulative in respect to the monthly limit. All
reimbursements shall be in accordance with the Company's established expense
reimbursement policies and shall be expressly conditioned upon the Company's
receipt of all required information or documentation as generally determined
by the Company, including, without limitation, all information or
documentation necessary or appropriate for deduction of the payments by the
Company on its federal and/or state income tax returns (even if the payments
are not fully deductible by the Company) and all appropriate information
relating to (i) the amount of the expenditure, (ii) the time, place and
designation of the type of entertainment, travel or other expense, (iii) the
business or other reason for the expenditure, and (iv) the names, occupations
and addresses of each person entertained.
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<PAGE>
SECTION 2.04. OTHER BENEFITS. Employee shall be entitled to participate in
medical and health, 401-K, Profit-Sharing plans, and other benefits generally
made available to employees of the Company, as from time to time determined
by the Company's President or Management. In this regard, Employee shall be
responsible for any costs generally charged to such employees for
participation therein, however, the Company will be responsible for the
premiums for the employee and family coverage in the medical and health plan.
SECTION 2.05. VACATION. Employee shall be entitled to take two (2) weeks'
vacation with pay each year. Vacation time shall be taken with due
consideration to the services required of Employee and the requirements of
the Company.
SECTION 2.06. AUTO ALLOWANCE. Employee shall receive a car allowance of
$500.00 per month payable on the 1st day of each month.
SECTION 2.07. DEFINITION OF YEAR. Whenever the term "year" or "per year" is
used in this Section, it shall mean 12 full calendar months (plus any partial
month in the first year) from the Effective Date of this Agreement and each
12 month period thereafter.
SECTION 2.08. STOCK OPTIONS. 10,000 stock options per year will be granted
for the first 3 years of the agreement, (a total of 30,000), IF the Employee
achieves Gross Profit of at least $500,001.00 per year. Option price to be
determined by the bid price of the Company's stock, as established by Nasdaq
on the day after the date that the employee achieves the $500,001.00 Gross P
rofit goal. Employee shall have one (1) year after achieving the stock
option to exercise such option.
ARTICLE III
TERM AND TERMINATION
SECTION 3.01. TERM. If the Employment Term is extended beyond the initial
Term pursuant to this Agreement, it is expressly understood and agreed that
Employee shall then be employed at the will of the Company and the employment
continued hereby may be terminated at any time with cause (as hereinafter
defined).
SECTION 3.02. EARLY TERMINATION. The employment of the Employee may be
terminated in the following manner:
(a) The Company may terminate Employee's employment hereunder upon the
occurrence of any of the following events, which termination shall be deemed
a termination without "Cause" or for reasons other than "Cause":
(i) Employee's employment hereunder shall be automatically terminated upon
the death of Employee.
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<PAGE>
(ii) Employee's employment hereunder shall automatically terminate within 90
days, upon a determination by Company's President or Management that Employee
is subject to a "Permanent Disability". For purposes of this Agreement, the
term "Permanently Disabled" or "Permanent Disability" shall mean a disability
by reason of the occurrence of an injury or disease (including a mental
illness or illness caused by substance abuse) or a physical or mental
condition which, in the opinion of the Company's President, [(i)] results in
Employee becoming unable adequately to perform his customary duties for the
Company, and (ii) has existed for a continuous period of at least twelve (12)
consecutive weeks, of which time such person has been unable to average in
excess of thirty-five (35) hours per week of the type of work for which such
person is employed by the Company. In determining whether Employee is
Permanently Disabled, the Company may rely upon the opinion of any doctor
licensed to practice medicine who has been selected by the Company, and any
other evidence the Company deems appropriate. The Company shall be the sole
judge as to whether Employee is Permanently Disabled as defined herein, and
its judgment shall be binding and conclusive.
(iii) The Employee's employment hereunder shall automatically terminate upon
the (1) liquidation and/or dissolution of the Company (other than after a
defined "Change of Control"), (2) or discontinuance of substantially all
active operations of the Business. The termination of the Employee's
employment pursuant to this subparagraph (iii) shall be effective on the date
that the event described above occurs unless a later date is determined by
the Management.
(b) Employee's employment hereunder shall automatically terminate upon a
determination by the Company's President that any of the following events
have occurred, which termination shall be deemed to be a termination for
"Cause":
(i) Employee has materially failed or refused to faithfully, diligently and
satisfactorily perform the usual and customary duties of his employment or
adhere to the provisions of this Agreement.
(ii) Employee has failed or refused to comply with the reasonable policies,
standards, regulations, instructions or directions of the Company which, from
time to time, may be established and/or amended by the Management and/or
authorized officers of the Company.
(iii) Employee has conducted himself in an unprofessional, unethical, immoral
or fraudulent manner, or engages in any activity which is grossly detrimental
to the reputation, character and standing of the Company.
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<PAGE>
(iv) The Employee has conducted himself in a manner which constitutes neglect
of his duties, willful misconduct, fraud upon the Company, dishonesty,
misappropriation of Company assets or similar criminal conduct.
(v) Employee has materially breached any duty or obligation required by this
Agreement.
(vi) Employee has resigned for any reason other than as a result of a breach
of this Agreement by the Company.
(c) In the event Employee's employment and this Agreement are terminated
pursuant to this Section 3.02, the Company shall have no obligation to pay
any compensation or benefits other than those which accrued prior to the date
of termination.
SECTION 3.03. INVOLUNTARY TERMINATION AFTER "CHANGE OF CONTROL." In the
event of a "Change of Control" as defined below, the Company shall have the
right to terminate Employee's employment and this Agreement, however, the
Company will be required to pay Employee upon termination, (i) $200,000 if
termination occurs in months 1-12, of employment, (ii) $100,000 if
termination occurs in months 13-24, and (iii) the remaining Base Salary if
termination occurs in any month thereafter.
For purposes of this Section 3.03 of this Agreement, a "Change of Control"
shall be deemed to have taken place if: (i) a third person, including a
"group" as determined in accordance with Section 13(d)(3) of the Securities
Exchange Act of 1934, becomes the beneficial owner of shares of the Company
having forty-five percent (45%) or more of the total number of votes that may
be cast for the election of directors of the Company; or (ii) as a result of,
or in connection with, any cash tender or exchange offer, merger or other
business combination, sale of assets or contested election, or any
combination of the foregoing transactions (a "Transaction"), the persons who
were directors of the Company before the Transaction shall cease to
constitute a majority of the Management of the Company or any successor to
the Company.
SECTION 3.04. EMPLOYEE'S RESIGNATION. In the event Employee terminates this
Agreement other than by reason of his death or disability as defined in this
Article III, Employer shall have no further obligations under this Agreement,
other than for payment of all unpaid salary, if any, accrued but unpaid
through the date of such termination.
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ARTICLE IV
COVENANT NOT TO COMPETE AND CONFIDENTIAL INFORMATION
SECTION 4.01. NON-COMPETITION. (a) In consideration of his employment
hereunder and in recognition that the relationship between himself and the
Company is one of trust, the Employee covenants and agrees that the Employee
will not, directly or indirectly, for his or her own account or benefit, or
for the account or benefit of any other person or party:
(i) own, manage, engage in, control, be employed by, participate in or be
connected with, in any manner whatsoever, the ownership, management,
operation or control of any business which sells, promotes or distributes
products or services, or which otherwise performs services, which are
reasonably like and which may reasonably compete with those products or
services offered by the Company or any affiliate or future subsidiary of the
Company at any time during the term of this Agreement or as of the date of
termination of the Employee;
(ii) Canvas, solicit or accept business from "Customers of the Company"
(except on behalf of the Company) which, for purposes of this Agreement,
shall mean any person or entity which has been contacted by the Employee in
the course of his employment with the Company or its affiliates or future
subsidiaries, or has engaged in business with the Company or any of its
affiliates or future subsidiaries during the one (1) year period prior to the
date of termination of the Employee's employment hereunder;
(iii) Directly or indirectly request or advise any Customer of the Company to
withdraw, curtail or cancel such Customer's business with the Company, or
otherwise interfere with the business relationship between such Customers and
the Company, or any of its affiliates or future subsidiaries;
(iv) Directly or indirectly disclose to any person, firm or corporation any
information relating to any acquisition candidate;
(vi) Otherwise aid, consult or assist anyone engaged in any business which is
competitive with the "Business of the Company", which "Business of the
Company" shall include all business activities in which the Company or any of
its affiliates or future subsidiaries is engaged at any time during the Term
of this Agreement or in which the Company or any of its affiliates or future
subsidiaries plans to engage at the date of termination of the Employee; or
(vii) Communicate to any person or entity any trade secrets, customer lists,
information (financial or otherwise), strategies, systems, methods or any
other business data or secrets of the Company, any of the Company's
affiliates or future subsidiaries.
8
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(b) Employee's covenants against competition as set forth in subparagraph (a)
above shall commence on the date of this Agreement and shall continue (i) for
a period of one (1) year after the date of termination of Employee's
employment hereunder for Cause (as herein defined). The restraints against
competition imposed on and agreed to by Employee hereunder shall apply to,
and be enforceable in, the area within fifty (50) miles of any location where
the Company, or any of its affiliates, subsidiaries, is doing business as of
the date of termination of Employee's employment hereunder.
SECTION 4.02. TRADE SECRETS. (a) In consideration of his employment
hereunder, and in recognition that the relationship between himself and the
Company is one of trust, the Employee covenants and agrees that the Employee
will not, directly or indirectly, for his own account or benefit, or for the
account or benefit of any other person or party, communicate to any person or
entity any trade secrets, customer lists, information (financial or
otherwise), strategies, systems, methods or any other business data or
secrets of Company, any of the Company's affiliates or future subsidiaries.
(b) Employee's covenant against disclosure as set forth in subparagraph (a)
above shall commence on the date of this Agreement and shall continue for a
period of one (1) year from the date of termination of this Agreement for
cause.
SECTION 4.03. NONDISCLOSURE OF CONFIDENTIAL INFORMATION. (a) Employee
acknowledges that the Company may disclose certain confidential information
to Employee during the Employment Term to enable him to perform his duties
hereunder. Employee hereby covenants and agrees that he will not, without
prior written consent of the Company, during the Term of this Agreement or at
any time thereafter, disclose or permit to be disclosed to any third party by
any method whatsoever any of the confidential information of the Company.
For purposes of this Agreement, "confidential information" shall include, but
not be limited to, any and all records, notes, memoranda, data, ideas,
processes, methods, techniques, systems, programs, computer software,
writings, research, personnel information, plans, or any other information of
whatever nature in the possession or control of the Company which has not
been published or disclosed to the general public, or which gives to the
Company an opportunity to obtain an advantage over competitors who do not
know of or use it. Employee further agrees that if his employment hereunder
is terminated for any reason, he will leave with the Company and will not
take originals or copies of any and all records, papers, programs, computer
software and documents and all matter of whatever nature which bear secret or
confidential information of the Company.
(b) During the Employment Term Employee agrees that he will not directly or
indirectly for himself or for the benefit of, or in conjunction with any
other entity:
(i) call upon any individual or entity who or which was a or customer of
Employer at any time during the term of Employee's employment with Employer,
for the purpose of soliciting, selling, servicing, diverting, taking,
transferring or interfering with any of the customer's patronage of Employer;
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(ii) call upon any individual or entity who or which during the one (1) year
period preceding Employee's termination of employment has been the subject of
a solicitation, in the form of a written proposal or other presentation by
Employer or Employee; or
(iii) solicit or attempt to solicit any Employee(s) of Employer in order to
cause the termination of his, her or their employment with Employer.
Subparagraph (a) herein shall not be applicable if and to the extent Employee
is required to testify in a judicial or regulatory proceeding pursuant to an
order of a judge or administrative law judge issued after Employee and his
legal counsel urge that the aforementioned confidentiality be preserved.
The covenants set forth in this Section are in consideration of employment,
or continuing employment, and the compensation paid to Employee during his
employment by the Company. The foregoing covenants will not prohibit
Employee from disclosing confidential or other information to other employees
of the Company or to third parties to the extent that such disclosure is
necessary to the performance of his duties under this Agreement.
SECTION 4.04. REMEDY FOR BREACH. Employee expressly recognizes and
acknowledges that the terms and conditions of this Agreement and specifically
Article IV. hereunder are reasonable as to time and area, necessary to
protect the legitimate business interests of the Company, and are not unduly
burdensome to Employee.
Further, Employee expressly acknowledges and agrees that irreparable injury
will result to the Company and to its business and properties in the event of
any breach by Employee of any of the provisions of this Article IV, and that
Employee's continued employment is predicated on the commitments undertaken
by him pursuant thereto. In the event of any breach of any of Employee's
commitments pursuant to this Article IV, the Company shall be entitled to any
other remedies and damages available, to injunctive relief to restrain the
violation of such commitments by Employee or by any person or persons acting
for or with Employee in any capacity whatsoever.
SECTION 4.05. WAIVER OF BREACH. The waiver of either party of a breach of
any provision of this Agreement shall not operate or be construed as a waiver
of any subsequent breach by either Employer or Employee. The failure to
enforce any provision(s) of the Agreement shall not be construed as a waiver
of such provision(s).
SECTION 4.06. SURVIVAL OF COVENANTS. The covenants of Article IV hereof
shall survive any termination of Employee's employment and any termination of
this Agreement, and be enforceable according to their terms.
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ARTICLE V
MISCELLANEOUS
SECTION 5.01. NOTICES. All notices, demands or other communications
required or provided hereunder shall be in writing and shall be deemed to
have been given at the earlier of (i) actual receipt, or (ii) three (3) days
after deposit in the United States Mail as provided below. Notice may be
sent by personal service to the parties at the addresses set forth below, or
at such other addresses as such parties may designate by notice to the other
parties, or by deposit in the United States mail, certified or registered,
postage prepaid, return receipt requested, addressed to the parties at the
addresses set forth below or at such other addresses as such parties may
designate by notice to the other parties.
If to the Company: Abatix Environmental Corp.
8311 Eastpoint Drive, Suite 400
Dallas, TX 75227
Attn: Terry W. Shaver
with a copy to: Arter, Hadden, Johnson & Bromberg
1717 Main Street, Suite 4100
Dallas, Texas 75201
Attn: Glen A. Bellinger
If to Employee: Barry Horvitz
10727 Braes Forest
Houston, TX 77071
SECTION 5.02. APPLICABLE LAW. THIS AGREEMENT AND THE OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE INTERPRETED, CONSTRUED, GOVERNED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, and shall be performed in
Dallas County, Texas.
SECTION 5.03. ENTIRE AGREEMENT. This Agreement contains the entire
agreement among the parties hereto relative to the transactions contemplated
hereby, and supersedes all other oral and written agreements, express or
implied, concerning the subject matter of this Agreement. No variations,
modifications or changes in this Agreement shall be binding upon a party
unless set forth in a document duly executed by or on behalf of such party.
SECTION 5.04. ASSIGNABILITY. The Company, its transferees, successors and
assigns reserve the right to assign this Agreement, and all of the rights and
obligations of Company hereunder, to any of their respective successors,
affiliates or future subsidiaries. Neither this Agreement, nor the rights
and obligations created under it, may be assigned by the Employee without the
prior written consent of the Company.
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SECTION 5.05. INDEPENDENT COVENANTS. The provisions contained in this
Agreement are independent and separate. In the event that any provision is
declared unenforceable, the other provisions shall not be affected or
impaired but shall remain valid and enforceable.
SECTION 5.06. CONSENT AND WAIVER. No consent or waiver, express or implied,
by any party hereto of any breach or default by any other party shall be
deemed or construed to be a consent or waiver to or of any other breach or
default. Failure on the part of any party to complain of any act or failure
to act of the other party or to declare the other party in default,
irrespective of how long such failure continues, shall not constitute a
waiver by such party of its rights hereunder.
SECTION 5.07. SEVERABILITY. If any provision of this Agreement or the
application thereof to any person or circumstance shall be held invalid or
unenforceable to any extent, such illegality or unenforceability shall extend
to that provision only, and the remainder of this Agreement shall be enforced
to the greatest extent permitted by law as if such illegal or unenforceable
provision were not incorporated herein.
SECTION 5.08. RELATIONSHIP OF THE EMPLOYEE. The relationship between the
Employee and the Company shall be limited to the performance of the duties
and responsibilities contemplated by and in accordance with the terms of this
Agreement. Nothing herein shall be construed to authorize Employee to act as
agent of the Company for any other purposes.
SECTION 5.09. SUCCESSORS. Subject to the provisions of Section 5.04 hereof,
this Agreement shall be binding upon the parties hereto, their heirs,
administrators, successors, executors and assigns, and the parties hereto
covenant and agree that they themselves and their respective heirs,
executors, successors, administrators and assigns will execute any and all
instruments, releases, assignments and consents that may be reasonably
required to more fully implement the provisions of this Agreement. Except as
otherwise provided herein, this Agreement shall inure to the benefit of and
be enforceable by and against the respective heirs, executors,
administrators, legal representatives, successors and assigns of the Employee.
SECTION 5.10. THIRD PARTY BENEFICIARY. Nothing in this Agreement shall be
deemed to create any right in any creditor or other person not a party hereto
(other than the successors and assigns of a party hereto), and this
instrument shall not be construed in any respect to be a contract in whole or
in part for the benefit of any other party except as aforesaid.
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SECTION 5.11. ADDITIONAL ACTS. In connection with this Agreement, as well
as all transactions contemplated by this Agreement, Employee agrees to
execute and deliver such additional documents or perform such additional acts
as may be necessary or appropriate to effectuate, carry out and perform all
of the terms, provisions and conditions of this Agreement.
SECTION 5.12. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall serve as an original for all purposes, but
all copies of which shall constitute but one and the same Agreement.
SECTION 5.13. HEADINGS AND CAPTIONS. The Article and Section headings and
other captions contained in this Agreement are inserted only as a matter of
convenience, do not form a part of this Agreement and in no way define,
limit, extend or describe the scope, meaning, construction or effect of this
Agreement or any provision hereof or the intent of the parties.
SECTION 5.14. DEEMED REJECTION. Except as is expressly provided otherwise
herein, the failure of a party to respond, within the response period set
forth in the request in question (which response period shall not be less
than five (5) business days nor more than ten (10) business days from the
date on which the party in question is deemed to have received notice of such
request pursuant to Section 5.01 above), either in the affirmative or in the
negative, to any request it receives from another party or the Company
relating to a proposed act and in respect of which such party is entitled to
vote pursuant to this Agreement, shall conclusively be deemed for all
purposes to be a vote by such party against the act set forth in such request.
SECTION 5.15. ENFORCEMENT. In the event it becomes necessary for any party
hereto to file suit to enforce this Agreement or any provision contained
herein, the prevailing party in such action shall be entitled to recover,
in addition to all other remedies or damages, court costs, expenses of
litigation and reasonable attorneys fees incurred in such suit, and shall be
performed in Dallas county, Texas.
SECTION 5.16. BUSINESS DAYS. Whenever the terms of this Agreement call for
the performance of a specific act on a specified date, which date falls on a
Saturday, Sunday or legal holiday, the date for the performance of such act
shall be postponed to the next succeeding regular business day following such
Saturday, Sunday or legal holiday.
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SECTION 5.17. LIMITATIONS OF ACTIONS. Any action or suit under this
Agreement or relating in any way to Employee's employment with the Company
must be brought within one (1) year after the alleged breach of this
Agreement, and the parties hereby waive any statute of limitations to the
contrary.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first set forth above.
COMPANY:
Abatix Environmental Corp.,
a Delaware Corporation,
By: S/S GARY L. COX
------------------
Name: Gary L. Cox
Title: Executive Vice President
EMPLOYEE:
S/S BARRY HORVITZ
--------------------
Name: Barry Horvitz
14
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into as of
the 1ST day of AUGUST, 1995 (the "Effective Date), by and between Abatix
Environmental Corp., a DELAWARE corporation (the "Company"), and BARRY
HORVITZ (the "Employee").
W I T N E S S E T H:
WHEREAS, the Company is a for-profit corporation incorporated under the laws
of the State of Delaware and is engaged in certain sales activities and other
related endeavors ancillary to such activities (hereinafter referred to as
the "Business");
WHEREAS, Employee is possessed of particular skills, knowledge and abilities
useful to the Business of the Company; and
WHEREAS, the Company desires to employ the Employee, and the Employee desires
to be employed by Company to aid and assist the Company in carrying out the
Business of the Company, pursuant to the terms and conditions contained
herein.
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and conditions contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
ARTICLE I
EMPLOYMENT
SECTION 1.01. EMPLOYMENT AND TITLE. (a) Company hereby agrees to employ
Employee, and Employee hereby accepts employment as salesperson, upon the
terms and conditions hereinafter set forth, each Party expressly revoking any
and all prior employment agreements to which the Parties may be mutually
subject. As salesperson, Employee shall serve Company and its affiliates on
a full-time basis subject to the supervision and control of the Management
(hereinafter referred to as the "Management"). Employee hereby agrees to
serve the Company in such capacity for the period commencing on the Effective
Date and ending on July 31, 1999 unless this Agreement is terminated prior to
such date pursuant to the terms of Section 3 hereof (hereinafter referred to
as the "Employment Term").
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(b) During the term of this Agreement, the Company will employ Employee and
Employee will render services to the Company in such capacities and with
respect to such matters as the Management of the Company may determine,
including providing expertise and advice pertaining to sales activities of
the Company.
(c) Unless otherwise authorized by the Company's Management, the Employee
shall [NOT] have the right to make any contracts or commitments for or on
behalf of the Company, to sign or endorse any commercial paper, contracts, or
instruments of any nature, and to enter into any obligation binding the
Company to the payment of money or otherwise.
(d) Employee agrees to serve the Company faithfully and to the best of his
abilities in the capacity referenced above and in any other work or activity
in furtherance of the business of the Company in which his talents may be
applied in a manner commensurate with his position, training, knowledge,
skills and abilities, and to perform any and all duties described by the
Management or any other appropriate officer of the Company, during the course
of his employment. Except as otherwise may be approved by the Management of
the Company, Employee further agrees to devote all of his business time,
attention, abilities and energy exclusively to the business of the Company
throughout the Employment Term, except for vacation periods and periods of
sick leave in accordance with the Company's policies as may be adopted or
amended by the Management from time to time.
(e) The Employee further agrees to abide by the Company's Articles of
Incorporation, Bylaws, rules and regulations as may be in effect, amended
and/or established from time to time by the Management and/or authorized
officers after the Employee has been provided with such document.
(f) Employee shall keep the President and other Management of the Company
informed, as the President may request or direct, as to all activities in
which Employee proposes to be or is engaged on behalf of the Company.
SECTION 1.02. GENERAL OBLIGATIONS AND DUTIES. During the term of this
Agreement:
(a) In carrying out this Agreement and the lawful business affairs of the
Company, Employee shall also accept such other duties and assignments as the
Management of the Company may from time to time determine provided it
pertains to outside sales.
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ARTICLE II
COMPENSATION, COMMISSION AND BENEFITS
SECTION 2.01 COMPENSATION. As full compensation for all services rendered
pursuant to this Agreement, the Employee shall be entitled to receive from
the Company an aggregate base salary (hereinafter referred to as the "Base
Salary") at the rate of Ten Thousand and No/100 Dollars ($10,000.00) per
month through the 48th month of this Agreement.
(a) If no additional employment agreement has been entered into and Employee
continues to work for the Company after the 48th month, then each year
thereafter, the Company further agrees to continue the Base Salary of Ten
Thousand and No/100 Dollars ($10,000.00) per month contingent upon the
Employee's continued achievement of a minimum of $480,000.00 in Gross Profits
(as defined in Section 2.02 (d)) for the previous twelve month period.
(b) The monthly Base Salary to be paid to the Employee hereunder shall be
paid in two (2) equal installments each month, less applicable withholding,
FICA, other taxes and authorized deductions, if any. Such installments shall
be paid on the first (1st) and fifteenth (15th) day of each calendar month,
beginning with the execution of this Agreement. All salary payments are
subject to appropriate withholding for federal, state, local and FICA taxes.
(c) In the event that the employee attains $300,000.00 in Gross Profit in
the fiscal year, then an additional 2% commission per year is to be paid;
and in the event that the Employee attains an additional $100,000.00 in
Gross Profit, then an additional 2% commission is to be paid and when each
additional increment of $100,000.00 Gross Profit is achieved.
(d) In the event that the Employee attains Gross Profit of $400,001.00 in
the fiscal year, then a bonus of $20,000 will be paid.
(e) In the event that the Employee attains a Gross Profit of $500,001.00 in
the fiscal year, then a bonus of $15,000.00 will be paid.
(f) In the event that the Employee attains a Gross Profit of $550,001.00 in
the fiscal year, then a bonus of $10,000.00 will be paid.
(g) In the event that the employee attains a Gross Profit of $700,001.00 in
the fiscal year, then a Bonus of $5,000.00 will be paid.
(h) In the event that the employee attains a Gross Profit of $800,001.00 in
the fiscal year, then a Bonus of $5,000.00 will be paid.
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(i) In the event that the employee attains a Gross Profit of $900,001.00 in
the fiscal year, then a Bonus of $5,000.00 will be paid.
(j) In the event that the employee attains a Gross Profit of $1,000,001.00
in the fiscal year, then a Bonus of $10,000.00 will be paid.
(k) A car phone allowance of $175.00 per month payable on the 1st of each
month.
(l) A digital pager will be provided and payable by the Company.
SECTION 2.02. COMMISSIONS. (a) Employee shall be entitled to receive
commissions (the "Commissions") at the rate of twenty-five (25%) percent
under this Agreement for monthly Gross Profit on sales to accounts assigned
to the Employee during the term of this Agreement.
(b) The Commission shall accrue hereunder with respect to gross profit on
monthly sales to customers (as defined in Section 4.01 (ii)) assigned to the
Employee, the prior acceptance of a credit application of a Customer and
within the limits of the credit terms set by the Company. The Commission
shall be due and payable less the $10,000.00. Base Salary paid the previous
month on the last business day of each calendar month for sales by the
Employee and accepted by the Company during the prior calendar month during
the Term hereof. If commissions during any month do not exceed Base Salary,
Employee will have no obligation to refund the difference.
(c) For purposes of this Section 2.02, "Net Sales" shall mean the gross
amount actually charged by the Company net of freight and taxes in connection
with sales to accounts assigned to the Employee during the Term hereof and
for which a purchase order has been accepted by the Company, net of any
adjustments, restocking charges, and gross amounts refunded or returned to
the Customer on sales by the Employee within the current or any previous
fiscal year.
(d) For purposes of this Section 2.02, "Gross Profit" shall mean Net Sales
less the cost of goods sold as determined by the first in first out method
and any applicable freight and taxes.
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SECTION 2.03. REIMBURSEMENT FOR EXPENSES. As permitted by Company's
President or Management from time to time, Employee shall be authorized to
incur reasonable business expenses in connection with performing his duties
hereunder and promoting the business of the Company. The Company shall
reimburse Employee for all of his reasonable business expenses (including
reasonable expenditures for travel, meals and hotel accommodations) incurred
in the course of his employment by the Company pursuant to this Agreement up
to an amount not to exceed Seven Hundred Fifty and no/100 dollars ($750.00)
per month. Expenses are non cumulative in respect to the monthly limit.
All reimbursements shall be in accordance with the Company's established
expense reimbursement policies and shall be expressly conditioned upon the
Company's receipt of all required information or documentation as generally
determined by the Company, including, without limitation, all information or
documentation necessary or appropriate for deduction of the payments by the
Company on its federal and/or state income tax returns (even if the payments
are not fully deductible by the Company) and all appropriate information
relating to (i) the amount of the expenditure, (ii) the time, place and
designation of the type of entertainment, travel or other expense, (iii) the
business or other reason for the expenditure, and (iv) the names, occupations
and addresses of each person entertained.
SECTION 2.04. OTHER BENEFITS. Employee shall be entitled to participate in
medical and health, 401-K, Profit-Sharing plans, and other benefits generally
made available to employees of the Company, as from time to time determined
by the Company's President or Management. In this regard, Employee shall be
responsible for any costs generally charged to such employees for
participation therein, however, the Company will be responsible for the
premiums for the employee and family coverage in the medical and health plan.
SECTION 2.05. VACATION. Employee shall be entitled to take two (2) weeks'
vacation with pay each year. Vacation time shall be taken with due
consideration to the services required of Employee and the requirements of
the Company.
SECTION 2.06. AUTO ALLOWANCE. Employee shall receive a car allowance of
$750.00 per month payable on the 1st day of each month.
SECTION 2.07 DEFINITION OF YEAR. Whenever the term "year" or "per year" is
used in this Section, it shall mean 12 full calendar months (plus any partial
month in the first year) from the Effective Date of this Agreement and each
12 month period thereafter.
SECTION 2.08 STOCK OPTIONS. 10,000 stock options will be granted the first
year of the Agreement, if the Employee achieves Gross Profit of at least
$500,001.00. Option price to be determined by the bid price of the Company's
stock, as established by NASDAQ on the day after the date that the Employee
achieves $500,001.00 Gross Profit goal. Employee shall have one (1) year
after achieving the stock option to exercise such option.
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ARTICLE III
TERM AND TERMINATION
SECTION 3.01. TERM. If the Employment Term is extended beyond the initial
Term pursuant to this Agreement, it is expressly understood and agreed that
Employee shall then be employed at the will of the Company and the employment
continued hereby may be terminated at any time with cause (as hereinafter
defined).
SECTION 3.02. EARLY TERMINATION. The employment of the Employee may be
terminated in the following manner:
(a) The Company may terminate Employee's employment hereunder upon the
occurrence of any of the following events, which termination shall be deemed
a termination without "Cause" or for reasons other than "Cause":
(i) Employee's employment hereunder shall be automatically terminated upon
the death of Employee.
(ii) Employee's employment hereunder shall automatically terminate within 90
days, upon a determination by Company's President or Management that Employee
is subject to a "Permanent Disability". For purposes of this Agreement, the
term "Permanently Disabled" or "Permanent Disability" shall mean a disability
by reason of the occurrence of an injury or disease (including a mental
illness or illness caused by substance abuse) or a physical or mental
condition which, in the opinion of the Company's President, [(i)] results in
Employee becoming unable adequately to perform his customary duties for the
Company, and (ii) has existed for a continuous period of at least twelve (12)
consecutive weeks, of which time such person has been unable to average in
excess of thirty-five (35) hours per week of the type of work for which such
person is employed by the Company. In determining whether Employee is
Permanently Disabled, the Company may rely upon the opinion of any doctor
licensed to practice medicine who has been selected by the Company, and any
other evidence the Company deems appropriate. The Company shall be the sole
judge as to whether Employee is Permanently Disabled as defined herein, and
its judgment shall be binding and conclusive.
(iii) The Employee's employment hereunder shall automatically terminate upon
the (1) liquidation and/or dissolution of the Company (other than after a
defined "Change of Control"), (2) or discontinuance of substantially all
active operations of the Business. The termination of the Employee's
employment pursuant to this subparagraph (iii) shall be effective on the date
that the event described above occurs unless a later date is determined by
the Management.
6
<PAGE>
(b) Employee's employment hereunder shall automatically terminate upon a
determination by the Company's President that any of the following events
have occurred, which termination shall be deemed to be a termination for
"Cause":
(i) Employee has materially failed or refused to faithfully, diligently and
satisfactorily perform the usual and customary duties of his employment or
adhere to the provisions of this Agreement.
(ii) Employee has failed or refused to comply with the reasonable policies,
standards, regulations, instructions or directions of the Company which, from
time to time, may be established and/or amended by the Management and/or
authorized officers of the Company.
(iii) Employee has conducted himself in an unprofessional, unethical, immoral
or fraudulent manner, or engages in any activity which is grossly detrimental
to the reputation, character and standing of the Company.
(iv) The Employee has conducted himself in a manner which constitutes neglect
of his duties, willful misconduct, fraud upon the Company, dishonesty,
misappropriation of Company assets or similar criminal conduct.
(v) Employee has materially breached any duty or obligation required by this
Agreement.
(vi) Employee has resigned for any reason other than as a result of a breach
of this Agreement by the Company.
(c) In the event Employee's employment and this Agreement are terminated
pursuant to this Section 3.02, the Company shall have no obligation to pay
any compensation or benefits other than those which accrued prior to the date
of termination.
SECTION 3.03. INVOLUNTARY TERMINATION AFTER "CHANGE OF CONTROL." In the
event of a "Change of Control" as defined below, the Company shall have the
right to terminate Employee's employment and this Agreement, however, the
Company will be required to pay Employee upon termination, (i) $200,000 if
termination occurs in months 1-12, of employment, (ii) $200,000 if
termination occurs in months 13-24, and (iii) the remaining Base Salary if
termination occurs in any month thereafter.
7
<PAGE>
For purposes of this Section 3.03 of this Agreement, a "Change of Control"
shall be deemed to have taken place if: (i) a third person, including a
"group" as determined in accordance with Section 13(d)(3) of the Securities
Exchange Act of 1934, becomes the beneficial owner of shares of the Company
having forty-five percent (45%) or more of the total number of votes that may
be cast for the election of directors of the Company; or (ii) as a result of,
or in connection with, any cash tender or exchange offer, merger or other
business combination, sale of assets or contested election, or any
combination of the foregoing transactions (a "Transaction"), the persons who
were directors of the Company before the Transaction shall cease to
constitute a majority of the Management of the Company or any successor to
the Company.
SECTION 3.04. EMPLOYEE'S RESIGNATION. In the event Employee terminates this
Agreement other than by reason of his death or disability as defined in this
Article III, Employer shall have no further obligations under this Agreement,
other than for payment of all unpaid salary, if any, accrued but unpaid
through the date of such termination.
ARTICLE IV
COVENANT NOT TO COMPETE AND CONFIDENTIAL INFORMATION
SECTION 4.01. NON-COMPETITION. (a) In consideration of his employment
hereunder and in recognition that the relationship between himself and the
Company is one of trust, the Employee covenants and agrees that the Employee
will not, directly or indirectly, for his or her own account or benefit, or
for the account or benefit of any other person or party:
(i) Own, manage, engage in, control, be employed by, participate in or be
connected with, in any manner whatsoever, the ownership, management,
operation or control of any business which sells, promotes or distributes
products or services, or which otherwise performs services, which are
reasonably like and which may reasonably compete with those products or
services offered by the Company or any affiliate or future subsidiary of the
Company at any time during the term of this Agreement or as of the date of
termination of the Employee;
(ii) Canvas, solicit or accept business from "Customers of the Company"
(except on behalf of the Company) which, for purposes of this Agreement,
shall mean any person or entity which has been contacted by the Employee in
the course of his employment with the Company or its affiliates or future
subsidiaries, or has engaged in business with the Company or any of its
affiliates or future subsidiaries during the two (2) year period prior to the
date of termination of the Employee's employment hereunder;
8
<PAGE>
(iii) Directly or indirectly request or advise any Customer of the Company to
withdraw, curtail or cancel such Customer's business with the Company, or
otherwise interfere with the business relationship between such Customers and
the Company, or any of its affiliates or future subsidiaries;
(iv) Directly or indirectly disclose to any person, firm or corporation any
information relating to any acquisition candidate;
(v) Otherwise aid, consult or assist anyone engaged in any business which is
competitive with the "Business of the Company", which "Business of the
Company" shall include all business activities in which the Company or any of
its affiliates or future subsidiaries is engaged at any time during the Term
of this Agreement (including, but not limited to, the operation of a
residential and commercial mechanical services business and the acquisition
of such types of business) or in which the Company or any of its affiliates
or future subsidiaries plans to engage at the date of termination of the
Employee; or
(vi) Communicate to any person or entity any trade secrets, customer lists,
information (financial or otherwise), strategies, systems, methods or any
other business data or secrets of the Company, any of the Company's
affiliates or future subsidiaries.
(b) Employee's covenants against competition as set forth in subparagraph (a)
above shall commence on the date of this Agreement and shall continue (i) for
a period of one (1) year after the date of termination of Employee's
employment hereunder for Cause (as herein defined). The restraints against
competition imposed on and agreed to by Employee hereunder shall apply to,
and be enforceable in, the area within fifty (50) miles of any location where
the Company, or any of its affiliates, subsidiaries, is doing business as of
the date of termination of Employee's employment hereunder.
SECTION 4.02. TRADE SECRETS. (a) In consideration of his employment
hereunder, and in recognition that the relationship between himself and the
Company is one of trust, the Employee covenants and agrees that the Employee
will not, directly or indirectly, for his own account or benefit, or for the
account or benefit of any other person or party, communicate to any person or
entity any trade secrets, customer lists, information (financial or
otherwise), strategies, systems, methods or any other business data or
secrets of Company, any of the Company's affiliates or future subsidiaries.
(b) Employee's covenant against disclosure as set forth in subparagraph (a)
above shall commence on the date of this Agreement and shall continue for a
period of one (1) year from the date of termination of this Agreement for
cause.
9
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SECTION 4.03. NONDISCLOSURE OF CONFIDENTIAL INFORMATION. (a) Employee
acknowledges that the Company may disclose certain confidential information
to Employee during the Employment Term to enable him to perform his duties
hereunder. Employee hereby covenants and agrees that he will not, without
prior written consent of the Company, during the Term of this Agreement or at
any time thereafter, disclose or permit to be disclosed to any third party by
any method whatsoever any of the confidential information of the Company.
For purposes of this Agreement, "confidential information" shall include, but
not be limited to, any and all records, notes, memoranda, data, ideas,
processes, methods, techniques, systems, programs, computer software,
writings, research, personnel information, plans, or any other information of
whatever nature in the possession or control of the Company which has not
been published or disclosed to the general public, or which gives to the
Company an opportunity to obtain an advantage over competitors who do not
know of or use it. Employee further agrees that if his employment hereunder
is terminated for any reason, he will leave with the Company and will not
take originals or copies of any and all records, papers, programs, computer
software and documents and all matter of whatever nature which bear secret or
confidential information of the Company.
(b) During the Employment Term Employee agrees that he will not directly or
indirectly for himself or for the benefit of, or in conjunction with any
other entity:
(i) call upon any individual or entity who or which was a or customer of
Employer at any time during the term of Employee's employment with Employer,
for the purpose of soliciting, selling, servicing, diverting, taking,
transferring or interfering with any of the customer's patronage of Employer;
(ii) call upon any individual or entity who or which during the two (2) year
period preceding Employee's termination of employment has been the subject of
a solicitation, in the form of a written proposal or other presentation by
Employer or Employee; or
(iii) solicit or attempt to solicit any Employee(s) of Employer in order to
cause the termination of his, her or their employment with Employer.
Subparagraph (a) herein shall not be applicable if and to the extent Employee
is required to testify in a judicial or regulatory proceeding pursuant to an
order of a judge or administrative law judge issued after Employee and his
legal counsel urge that the aforementioned confidentiality be preserved.
The covenants set forth in this Section are in consideration of employment,
or continuing employment, and the compensation paid to Employee during his
employment by the Company. The foregoing covenants will not prohibit
Employee from disclosing confidential or other information to other employees
of the Company or to third parties to the extent that such disclosure is
necessary to the performance of his duties under this Agreement.
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SECTION 4.04. REMEDY FOR BREACH. Employee expressly recognizes and
acknowledges that the terms and conditions of this Agreement and specifically
Article IV. hereunder are reasonable as to time and area, necessary to
protect the legitimate business interests of the Company, and are not unduly
burdensome to Employee.
Further, Employee expressly acknowledges and agrees that irreparable injury
will result to the Company and to its business and properties in the event of
any breach by Employee of any of the provisions of this Article IV, and that
Employee's continued employment is predicated on the commitments undertaken
by him pursuant thereto. In the event of any breach of any of Employee's
commitments pursuant to this Article IV, the Company shall be entitled to any
other remedies and damages available, to injunctive relief to restrain the
violation of such commitments by Employee or by any person or persons acting
for or with Employee in any capacity whatsoever.
SECTION 4.05. WAIVER OF BREACH. The waiver of either party of a breach of
any provision of this Agreement shall not operate or be construed as a waiver
of any subsequent breach by either Employer or Employee. The failure to
enforce any provision(s) of the Agreement shall not be construed as a waiver
of such provision(s).
SECTION 4.06. SURVIVAL OF COVENANTS. The covenants of Article IV hereof
shall survive any termination of Employee's employment and any termination of
this Agreement, and be enforceable according to their terms.
ARTICLE V
MISCELLANEOUS
SECTION 5.01. NOTICES. All notices, demands or other communications
required or provided hereunder shall be in writing and shall be deemed to
have been given at the earlier of (i) actual receipt, or (ii) three (3) days
after deposit in the United States Mail as provided below. Notice may be
sent by personal service to the parties at the addresses set forth below, or
at such other addresses as such parties may designate by notice to the other
parties, or by deposit in the United States mail, certified or registered,
postage prepaid, return receipt requested, addressed to the parties at the
addresses set forth below or at such other addresses as such parties may
designate by notice to the other parties.
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If to the Company: Abatix Environmental Corp.
8311 Eastpoint Drive, Suite 400
Dallas, TX 75227
Attn: Terry W. Shaver
with a copy to: Arter, Hadden, Johnson & Bromberg
1717 Main Street, Suite 4100
Dallas, Texas 75201
Attn: Glen A. Bellinger
If to Employee: Barry Horvitz
4911 Braes Valley
Houston, TX 77096
SECTION 5.02. APPLICABLE LAW. This Agreement and the obligations of the
parties hereunder shall be interpreted, construed, governed and enforced in
accordance with the laws of the State of Texas, and shall be performed in
Dallas County, Texas.
SECTION 5.03. ENTIRE AGREEMENT. This Agreement contains the entire
agreement among the parties hereto relative to the transactions contemplated
hereby, and supersedes all other oral and written agreements, express or
implied, concerning the subject matter of this Agreement. No variations,
modifications or changes in this Agreement shall be binding upon a party
unless set forth in a document duly executed by or on behalf of such party.
SECTION 5.04. ASSIGNABILITY. The Company, its transferees, successors and
assigns reserve the right to assign this Agreement, and all of the rights and
obligations of Company hereunder, to any of their respective successors,
affiliates or future subsidiaries. Neither this Agreement, nor the rights
and obligations created under it, may be assigned by the Employee without the
prior written consent of the Company.
SECTION 5.05. INDEPENDENT COVENANTS. The provisions contained in this
Agreement are independent and separate. In the event that any provision is
declared unenforceable, the other provisions shall not be affected or
impaired but shall remain valid and enforceable.
SECTION 5.06. CONSENT AND WAIVER. No consent or waiver, express or implied,
by any party hereto of any breach or default by any other party shall be
deemed or construed to be a consent or waiver to or of any other breach or
default. Failure on the part of any party to complain of any act or failure
to act of the other party or to declare the other party in default,
irrespective of how long such failure continues, shall not constitute a
waiver by such party of its rights hereunder.
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SECTION 5.07. SEVERABILITY. If any provision of this Agreement or the
application thereof to any person or circumstance shall be held invalid or
unenforceable to any extent, such illegality or unenforceability shall extend
to that provision only, and the remainder of this Agreement shall be enforced
to the greatest extent permitted by law as if such illegal or unenforceable
provision were not incorporated herein.
SECTION 5.08. RELATIONSHIP OF THE EMPLOYEE. The relationship between the
Employee and the Company shall be limited to the performance of the duties
and responsibilities contemplated by and in accordance with the terms of this
Agreement. Nothing herein shall be construed to authorize Employee to act as
agent of the Company for any other purposes.
SECTION 5.09. SUCCESSORS. Subject to the provisions of Section [5.04]
hereof, this Agreement shall be binding upon the parties hereto, their heirs,
administrators, successors, executors and assigns, and the parties hereto
covenant and agree that they themselves and their respective heirs,
executors, successors, administrators and assigns will execute any and all
instruments, releases, assignments and consents that may be reasonably
required to more fully implement the provisions of this Agreement. Except as
otherwise provided herein, this Agreement shall inure to the benefit of and
be enforceable by and against the respective heirs, executors,
administrators, legal representatives, successors and assigns of the
Employee.
SECTION 5.10. THIRD PARTY BENEFICIARY. Nothing in this Agreement shall be
deemed to create any right in any creditor or other person not a party hereto
(other than the successors and assigns of a party hereto), and this
instrument shall not be construed in any respect to be a contract in whole or
in part for the benefit of any other party except as aforesaid.
SECTION 5.11. ADDITIONAL ACTS. In connection with this Agreement, as well
as all transactions contemplated by this Agreement, Employee agrees to
execute and deliver such additional documents or perform such additional acts
as may be necessary or appropriate to effectuate, carry out and perform all
of the terms, provisions and conditions of this Agreement.
SECTION 5.12. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall serve as an original for all purposes, but
all copies of which shall constitute but one and the same Agreement.
SECTION 5.13. HEADINGS AND CAPTIONS. The Article and Section headings and
other captions contained in this Agreement are inserted only as a matter of
convenience, do not form a part of this Agreement and in no way define,
limit, extend or describe the scope, meaning, construction or effect of this
Agreement or any provision hereof or the intent of the parties.
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SECTION 5.14. DEEMED REJECTION. Except as is expressly provided otherwise
herein, the failure of a party to respond, within the response period set
forth in the request in question (which response period shall not be less
than five (5) business days nor more than ten (10) business days from the
date on which the party in question is deemed to have received notice of such
request pursuant to Section [5.01] above), either in the affirmative or in
the negative, to any request it receives from another party or the Company
relating to a proposed act and in respect of which such party is entitled to
vote pursuant to this Agreement, shall conclusively be deemed for all
purposes to be a vote by such party against the act set forth in such request.
SECTION 5.15. ENFORCEMENT. In the event it becomes necessary for any party
hereto to file suit to enforce this Agreement or any provision contained
herein, the prevailing party in such action shall be entitled to recover, in
addition to all other remedies or damages, court costs, expenses of
litigation and reasonable attorneys fees incurred in such suit.
SECTION 5.16. BUSINESS DAYS. Whenever the terms of this Agreement call for
the performance of a specific act on a specified date, which date falls on a
Saturday, Sunday or legal holiday, the date for the performance of such act
shall be postponed to the next succeeding regular business day following such
Saturday, Sunday or legal holiday.
SECTION 5.17. LIMITATIONS OF ACTIONS. Any action or suit under this
Agreement or relating in any way to Employee's employment with the Company
must be brought within one (1) year after the alleged breach of this
Agreement, and the parties hereby waive any statute of limitations to the
contrary.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first set forth above.
COMPANY:
Abatix Environmental Corp.,
a Delaware Corporation,
By: S/S TERRY W. SHAVER
---------------------
Name: Terry W. Shaver
Title: President
EMPLOYEE:
S/S BARRY HORVITZ
--------------------
Name: Barry Horvitz
14
October 3, 1995
Abatix Environmental Corp.
8311 Eastpoint Drive., #400
Dallas, Texas 75227
Re: Registration Statement on Form S-8, 1994 Stock Option Plan and
Employment Agreement with Barry Horvitz
Gentlemen:
This opinion is submitted pursuant to the applicable rules of the Securities
and Exchange Commission with respect to the registration by Abatix
Environmental Corp. ("the Company") of 170,000 shares of Common Stock, par
value $.001 per share (the "Common Stock") issued pursuant to the 1994 Stock
Option Plan of Abatix Environmental Corp. (the "Plan") and a separate
Employment Agreement with Barry Horvitz (the "Agreement").
In our capacity as counsel to the Company, we have examined the original,
certified, conformed, photostat or other copies of the Plan and the Agreement,
the Company's Certificate of Incorporation, By-Laws and corporate minutes
provided to us by the Company. In all such examinations we have assumed the
genuineness of all signatures on original documents, and the conformity to
originals or certified documents of all copies submitted to us as conformed,
photostat or other copies. In passing upon certain corporate records and
documents of the Company, we have necessarily assumed the correctness and
completeness of the statements made or included therein by the Company and
we express no opinion thereon.
Based upon and in reliance of the foregoing, we are of the opinion that the
Common Stock, when issued in accordance with the terms of the Plan and
Agreement, will be validly issued, fully paid and non-assessable.
We hereby consent to the use of this opinion in the Registration Statement
of Form S-8 to be filed with the Commission.
Very truly yours,
S/S ATLAS, PEARLMAN, TROP & BORKSON, P.A.
-----------------------------------------
ATLAS, PEARLMAN, TROP & BORKSON, P.A.
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Abatix Environmental Corp.
We consent to the use of our report incorporated herein by reference and to
the reference to our firm under the heading "Experts" in the prospectus. Our
report refers to a change in method of accounting for income taxes in 1993.
S/S KPMG PEAT MARWICK LLP
--------------------------
KPMG Peat Marwick LLP
Dallas, Texas
October 5, 1995
