ABATIX ENVIRONMENTAL CORP.
8311 EASTPOINT DRIVE, SUITE 400
DALLAS, TEXAS 75227
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO THE HOLDERS OF THE COMMON STOCK:
PLEASE TAKE NOTICE that the 1999 Annual Meeting of the Stockholders of
Abatix Environmental Corp., a Delaware corporation (the "Company"), will be held
at the Holiday Inn, LBJ Northeast, 11350 LBJ Freeway, Dallas, Texas 75238 on
Thursday, May 20, 1999 at 9:00 A.M., Central Time, or at any and all
adjournments thereof, for the following purposes:
1. To elect five directors to the Board of Directors;
2. To amend the Certificate of Incorporation to change the name of the Company
to Abatix Corp.;
3. To ratify of the appointment of independent auditors; and
4. To transact such other business as may properly come before the meeting or
any adjournment thereof.
The Proxy Statement dated April 30, 1999 is attached.
The Board of Directors has fixed the close of business on April 20,
1999 as the record date for the determination of stockholders entitled to notice
of, and to vote, at the meeting.
Stockholders who do not expect to be present at the meeting are urged
to complete, date, sign and return the enclosed proxy. No postage is required if
the enclosed envelope is used and mailed in the United States.
BY ORDER OF THE BOARD OF DIRECTORS,
Gary L. Cox, Secretary
Dallas, Texas
April 30, 1999
<PAGE>
ABATIX ENVIRONMENTAL CORP.
8311 EASTPOINT DRIVE, SUITE 400
DALLAS, TEXAS 75227
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
The Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Abatix Environmental Corp., a Delaware corporation
(the "Company"), of proxies for use at the 1999 Annual Meeting of Stockholders
("Annual Meeting") to be held at the Holiday Inn, LBJ Northeast, 11350 LBJ
Freeway, Dallas, Texas 75238 on Thursday, May 20, 1999 at 9:00 A.M., Central
Time, or at any and all adjournments thereof. The cost of this solicitation will
be borne by the Company. Directors, officers and employees of the Company may
solicit proxies by telephone, telegraph or personal interview. The Annual Report
of the Company for the fiscal year ended December 31, 1998 is being mailed
together with this Proxy Statement and form of Proxy. The approximate date of
mailing of this Proxy Statement and form of Proxy is April 30, 1999.
OUTSTANDING STOCK AND VOTING RIGHTS
In accordance with the By-Laws of the Company, the Board of Directors
has fixed the close of business on April 20, 1999 as the record date for
determining the stockholders entitled to notice of, and to vote at, the Annual
Meeting. Only stockholders of record on that date, on which the transfer books
of the Company remained open, will be entitled to vote. A stockholder who
submits a proxy on the accompanying form has the power to revoke it by notice of
revocation directed to the proxy holders of the Company at any time before it is
voted. Unless authority is withheld in writing, proxies that are properly
executed will be voted for the proposals thereon. Although a stockholder may
have given a proxy, such stockholder may nevertheless attend the meeting, revoke
the proxy and vote in person. The affirmative vote of a plurality of the shares
of Common Stock present or represented at the meeting is required to elect
Directors. The ratification of the appointment of the Company's auditors will
require the affirmative vote of a majority of the shares of the Company's Common
Stock voting at the Annual Meeting in person or by proxy.
As of April 20, 1999, the record date for determining the stockholders
of the Company entitled to vote at the Annual Meeting, approximately 1,762,148
shares of the Common Stock of the Company, $.001 par value ("Common Stock"),
were issued and outstanding. Each share of Common Stock entitles the holder to
one vote on all matters brought before the Annual Meeting. The quorum necessary
to conduct business at the Annual Meeting consists of a majority of the
outstanding shares of Common Stock as of the record date.
<PAGE>
Brokers who hold shares for the accounts of their clients may vote such
shares either as directed by their clients or in their own discretion if
permitted by the stock exchange or other organization of which they are members.
Members of the New York Stock Exchange are permitted to vote their client's
proxies in their own discretion as to the election of directors if the client
has not furnished voting instructions within ten days of the meeting. Certain
proposals other than the election of directors are "non-discretionary" and
brokers who have received no instructions from their clients do not have
discretion to vote on those items. When brokers vote proxies on some but not all
of the proposals at a meeting, the missing votes are referred to as "broker
non-votes." If any such proposals were on the agenda for this meeting, broker
non-votes would be included in determining the presence of a quorum at the
meeting, but they would not be considered "shares present" for voting purposes
and would have no impact on the outcome of such proposals, with the exception of
the proposal to amend the Certificate of Incorporation. The proposed amendment
to the Certificate of Incorporation to change the name of the Company will
require a majority vote of the outstanding shares and broker non-votes have the
effect of a negative vote on the proposed amendment to the Certificate of
Incorporation.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth Common Stock ownership information as of
March 31, 1999, with respect to (i) each person known to the Company to be the
beneficial owner of more than 5% of the Company's Common Stock, (ii) each
director and executive officer of the Company and (iii) all directors and
executive officers of the Company as a group. This information as to beneficial
ownership was furnished to the Company by or on behalf of the persons named.
Unless otherwise indicated, the business address of each person listed is 8311
Eastpoint Drive, Suite 400, Dallas, Texas 75227.
Shares
Beneficially Percent of
Name Owned (1) Class (2)
- ---- ------------ ------------
Terry W. Shaver (3) 594,450 33.7%
Gary L. Cox (4) 358,484 20.3%
Frank J. Cinatl (5) 14,000 0.8%
Brian G. Mendelsohn (6) 1,500 0.1%
Lamont C. Laue (7) 2,000 0.1%
Donald N. Black (7) 5,100 0.3%
All executive officers and directors
as a group (6 persons) 975,534 55.4%
(1) Unless otherwise provided, amount represents shares for which the
beneficial owner has sole voting and investment power and includes
options currently exercisable or exercisable within 60 days.
<PAGE>
(2) The percentage of class is calculated assuming that the beneficial
owner has exercised any options or other rights to subscribe which are
currently exercisable within sixty (60) days and that no other options
or rights or warrants to subscribe have been exercised by anyone else.
(3) Mr. Shaver is President, Chief Executive Officer and a Director of
the Company.
(4) Mr. Cox is Executive Vice President, Chief Operating Officer, Secretary
and a Director of the Company.
(5) Mr. Cinatl is Vice President, Chief Financial Officer and a Director of
the Company.
(6) Mr. Mendelsohn is Vice President of Sales and Marketing of the Company.
(7) Mr. Laue and Mr. Black are Directors of the Company.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
All required reports were filed within the appropriate time limits.
ELECTION OF DIRECTORS
The Board of Directors is responsible for the overall affairs of the
Company. The names of the nominees, their principal occupations and the year in
which they became Directors, are set forth.
NOMINEES FOR ELECTION
Director
Name and Principal Occupation Age Since
- ----------------------------------- ----- --------
Terry W. Shaver, President and 41 1988
Chief Executive Officer
Gary L. Cox, Executive Vice 45 1988
President, Chief Operating
Officer and Secretary
Frank J. Cinatl, IV, Vice 38 1999
President, Chief Financial Officer
Lamont C. Laue, Retired 69 1995
Donald N. Black, Retired 47 1998
<PAGE>
Each Director is elected for a period of one year at the Company's
annual meeting of stockholders. Executive officers are appointed annually and,
except to the extent governed by employment contracts, serve at the discretion
of the Board of Directors.
TERRY W. SHAVER has served as President, Chief Executive Officer and a
Director of the Company since its incorporation in December 1988 and of its
predecessor, T&T Supply Company, Inc., since its organization in May 1983. From
February 1979 until May 1983, Mr. Shaver was a Sales Representative with Global
Safety Resources, Inc., Dallas, Texas, a distributor of industrial safety
equipment and supplies. From July 1978 to January 1979, Mr. Shaver was a Sales
Representative with Continental Industrial Supply Corp., Richardson, Texas, a
distributor of industrial equipment and supplies. Between January 1977 and July
1978, Mr. Shaver was a Sales Representative with Briggs-Weaver, Inc., Dallas,
Texas, a distributor of industrial equipment and supplies.
GARY L. COX has been Executive Vice President, Chief Operating Officer
and a Director of the Company since its organization and Vice President and a
Director of its predecessor company, T & T Supply Company, Inc., since February
1985. From April 1984 to December 1985, Mr. Cox also was Vice President of
Diamond Built, Inc., Dallas, Texas, a real estate investment and construction
company. Between January 1980 and March 1984, Mr. Cox was President of W.R. Cox
Electric, Inc., Dallas, Texas, an electrical contracting firm and was with that
company in various capacities commencing in June 1974.
FRANK J. CINATL, IV has been Vice President and Chief Financial Officer
of the Company since 1994 and was appointed to the Board of Directors in
February 1999. From 1989 to 1994, Mr. Cinatl was Manager of External Financial
Reporting for The LTV Corporation, Dallas, Texas, a steel, aerospace/defense and
energy company. Between 1983 and 1989, Mr. Cinatl was an auditor for an
international public accounting firm.
LAMONT C. LAUE has been a Director of the Company since January 1995. Mr.
Laue also served as a Director of the Company from 1989 until 1991. Between 1960
and December 1987, Mr. Laue was employed in various executive capacities with
Sun Exploration and Production Company or affiliates thereof. During this time,
Mr. Laue was the Manager of Business Planning and Economics Analysis for the
Production Division from January 1984 to December 1987, and was the Manager of
Operations Services for the Sun Gas Company between January 1981 and December
1983. Mr. Laue retired from Sun Exploration and Production Company in December
1987.
DONALD N. BLACK was appointed a Director of the Company in February
1998, and was elected a Director at the 1998 annual meeting. Between 1979 and
1996, Mr. Black was employed by and owned Gena Laboratories Inc. ("Gena"), a
manufacturer and distributor of professional beauty products. Mr. Black
originally joined Gena in December 1979 as General Manager, became Vice
President in 1985, then served as President from 1989 until November 1996, when
Styling Technology Corporation acquired Gena. Prior to Gena, Mr. Black was a
regional manager for Professional Beauty Supply from 1977 to 1979 and a regional
manager for Milo Beauty Co., from 1974 to 1977, both Salon Product Distribution
Companies. Mr. Black is a 1974 graduate of Duke University with a BA in
Economics.
<PAGE>
Messrs. Cox, Laue and Black comprise the Company's audit committee. Its
duties include the selection and recommendation of independent auditors subject
to the approval of the stockholders, review of the scope and results of the
annual audit, and review of the adequacy and effectiveness of the Company's
internal control structure. The audit committee met once during 1998.
The Company has not established a standing nominating or compensation
committee of the Board of Directors at the present time. During 1998, the Board
of Directors held four meetings that were attended by all of the Directors,
except Mr. Cinatl who was not appointed to the Board of Directors until 1999.
All Directors who are not otherwise employed by the Company received
during 1998 an annual fee of $5,000 for serving as Directors. Directors will
also be reimbursed for reasonable expenses incurred in connection with their
attendance at meetings.
There are no family relationships among the Company's Executive Officers and
Directors.
Section 145 of the General Corporation Law of Delaware permits the
indemnification of directors, officers, employees and agents of Delaware
corporations. The Company's Certificate of Incorporation and By-Laws provide
that the Company shall indemnify its Directors and Officers to the full extent
permitted by the General Corporation Law of the State of Delaware.
EXECUTIVE COMPENSATION
The Company has no Compensation Committee. However, all directors
participated in decisions by the Board of Directors with respect to compensation
for the Company's key executives. The current compensation program for executive
officers consists of three major elements: (1) base salary; (2) performance base
bonuses; and (3) periodic stock option grants. Currently no directors or
employees of the Company, including officers, have any unexercised stock
options. It is the policy of the Company to review executive officer base
salaries in relation to comparable positions of responsibility in similar sized
companies and based upon the executive officer's performance. In establishing
base salary levels and determining performance base bonuses, the Board has
considered the competitiveness of the entire compensation package.
All of the Company's Executive Officers are full-time employees. Total
cash compensation paid to all Executive Officers as a group for services
provided to the Company in all capacities during the fiscal year ended in
December 31, 1998 aggregated to $472,000. Set forth below is a summary
compensation table in the tabular format specified in the applicable rules of
the Securities and Exchange Commission with respect to all Executive Officers of
the Company or any of its subsidiaries who received total salary and bonus that
exceeded $100,000 during the periods reflected.
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
------------------------------------------- -------------------------------------
Securities
Name and Restricted underlying
principal Other annual stock Options/ LTIP All other
position Year Salary Bonus compensation award(s) SARs (#) payouts compensation
- -------------- ------- ------------- ----------- --------------- ------------- ------------- -------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Terry W. 1998 $156,000 $40,000 $12,000* - - - -
Shaver, 1997 $150,000 $10,000 $12,000* - - - -
President 1996 $135,000 $31,250 $12,000* - 11,250 - -
and CEO
Gary L. 1998 $156,000 $10,000@ $12,000* - - - -
Cox, 1997 $150,000 $10,000@ $12,000* - - - -
Exec. V.P. 1996 $135,000 $16,250@ $12,000* - 11,250 - -
and COO
Frank J. 1998 $84,000 $25,000 $1,140 - - - -
Cinatl, 1997 $80,000 $7,500 $1,140 - - - -
V.P. 1996 $72,000 $30,000 $1,140 - 10,000 - -
and CFO
<FN>
* - Amounts represent the annual value of vehicles and related maintenance
benefits ($12,000) provided to such executive officers in all years presented. @
@ - Mr. Cox elected to defer $15,000 of his 1996 bonus until January 1997,
$10,000 of his 1997 bonus until January 1998 and his entire $40,000 bonus for
1998 until January 1999.
</FN>
</TABLE>
There are currently no stock option, stock appreciation rights or long-term
compensation plans for any employees, including the executives, of the Company.
EMPLOYMENT AGREEMENTS
Messrs. Shaver and Cox are parties to employment agreements with the
Company expiring December 31, 2000. These agreements provide for minimum annual
compensation of $170,000 each. Such employment agreements preclude each
individual from competing with the Company for a period of twelve months
following termination of his employment for cause or by reason of his
voluntarily leaving the employ of the Company. The employment agreements also
require them to maintain the confidentiality of proprietary data relating to the
Company and its activities and services. The employment agreements also provide
for certain executive benefits such as the use of an automobile, reimbursement
of business expenses, health insurance and related benefits.
<PAGE>
PERFORMANCE GRAPH
The following table compares total stockholder returns for the Company
over the last five years to the CRSP Total Return Index for The Nasdaq Stock
Market and for Nasdaq Non-Financial Stocks assuming a $100 investment made on
December 31, 1993. The stock performance shown on the graph below is not
necessarily indicative of future price performance. The closing price is used to
compute the return for Abatix Environmental Corp.
1993 1994 1995 1996 1997 1998
------ ------ ------ ------ ------ ------
Abatix Environmental Corp. $100 $ 62 $ 96 $ 89 $ 81 $112
Nasdaq Total Return Index $100 $ 98 $138 $170 $209 $293
Nasdaq Non-Financial Stocks Index $100 $100 $146 $187 $286 $277
RETIREMENT PLANS
The Company has a 401(K) Plan, pursuant to which the Company
contributed $38,154, $59,195 and $46,549 during 1998, 1997 and 1996,
respectively. At this time, Terry W. Shaver, Gary L. Cox, Frank J. Cinatl and 75
other employees are eligible to participate in the 401(K) Plan, which requires
all employees to have performed services to the Company for at least one year.
Contributions by an employee in any one year may not exceed the lesser of 15% of
their respective salary or the Internal Revenue Service specified limits. The
Company currently matches 20% of the employees' contributions on an ongoing
basis, but the Board of Directors may approve an increase or a decrease in the
matching portion at any time in the future.
<PAGE>
Transactions with Management and Affiliates
Mr. Gary L. Cox owed the Company approximately $80,000 at December 31,
1998. The original amount was loaned to Mr. Cox to pay the tax liability
associated with the exercise of stock options in 1993. The interest rate on this
loan is the prime rate plus 200 basis points. In January 1999, the Board of
Directors accepted 22,766 shares of the Company's stock from Mr. Cox as payment
in full of the balance owed to the Company.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
ELECTION OF NOMINEES FOR DIRECTORS SET FORTH ABOVE.
AMENDMENT TO THE CERTIFICATE OF INCORPORATION
The Board of Directors of the Company is submitting for approval by the
stockholders an amendment to the Company's Certificate of Incorporation to
change the name to Abatix Corp. The removal of "Environmental" from the
Company's name reflects the direction of the Company towards the construction
and industrial markets.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
AMENDMENT TO THE CERTIFICATE OF INCORPORATION.
APPOINTMENT OF THE COMPANY'S AUDITORS
The appointment of KPMG LLP as independent auditors of the Company for
the fiscal year ended December 31, 2000 will be ratified.
Although the Board of Directors of the Company is submitting the
appointment of KPMG LLP for stockholder approval, it reserves the right to
change the selection of KPMG LLP as auditors, at any time during the fiscal
year, if it deems such change to be in the best interest of the Company, even
after stockholder approval.
Representatives of KPMG LLP are expected to be present at the Annual
Meeting with the opportunity to make a statement if they so desire, and will be
available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
APPOINTMENT OF THE COMPANY'S AUDITORS.
<PAGE>
INTEREST OF CERTAIN PERSONS IN
OPPOSITION TO MATTERS TO BE ACTED UPON
The Company is not aware of any substantial interest, direct or
indirect, by securities holdings or otherwise of any officer, director or
associate of the foregoing persons in any matter to be acted on, as described
herein, other than elections to offices.
OTHER MATTERS
Management is not aware of any other business that may come before the
meeting. However, if additional matters properly come before the meeting,
proxies will be voted at the discretion of the proxy holders.
STOCKHOLDER'S PROPOSALS TO BE PRESENTED AT
THE COMPANY'S NEXT ANNUAL MEETING OF
STOCKHOLDERS
Stockholder proposals intended to be presented at the 2000 Annual
Meeting of Stockholders of the Company must be received by the Company, at its
principal executive offices no later than December 31, 1999, for inclusion in
the Proxy Statement and Proxy relating to the 2000 Annual Meeting of
Stockholders.
AVAILABILITY OF FORM 10-K ANNUAL REPORT
Copies of the Company's Annual Report on Form 10-K for the year ended
December 31, 1998, as filed with the Securities and Exchange Commission, are
available without charge to stockholders upon request to Mr. Frank J. Cinatl,
Vice President, Abatix Environmental Corp., 8311 Eastpoint Drive, Suite 400,
Dallas, Texas 75227.
BY ORDER OF THE BOARD OF DIRECTORS
Gary L. Cox, Secretary
Dallas, Texas
April 30, 1999
