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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
PRO TECH COMMUNICATIONS, INC.
(Name of Small Business Issuer in its charter)
FLORIDA 59-3281593
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3311 INDUSTRIAL 25TH STREET, FT. PIERCE, FLORIDA 34946
(Address of principal executive offices, including zip code)
Issuer's telephone number: (407) 464-5100
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
None None
- ------------------- -----------------------------
Securities to be registered under Section 12(g) of the Act:
Common Stock, par value $.001
- -----------------------------------------------------------------------------
(Title of class)
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PART I
ITEM 1. DESCRIPTION OF BUSINESS
GENERAL
Pro Tech Communications, Inc. (the "Company") was incorporated in
the State of Florida on October 5, 1994. From August 30, 1991 to October 31,
1994, the Company's business was conducted by Pro Tech Systems, a limited
partnership organized under the laws of the State of California. Keith Larkin,
the President, Treasurer and Chairman of the Board of the Company, was the
general partner of Pro Tech Systems and there were 12 limited partners in the
limited partnership. From the formation of Pro Tech Systems in August 1991
until June 1993, the limited partnership was involved in engineering and
designing lightweight telecommunications headsets as well as preliminary
marketing efforts for the product. From June 1993 until October 1994, Pro Tech
Systems was engaged in limited manufacturing and marketing activities for its
product. On November 1, 1994, all of the assets of Pro Tech Systems were
transferred to the Company as consideration for the issuance of 2,000,000
shares of the Company's common stock, par value $.001 per share (the "Common
Stock"), which were subsequently distributed on a pro rata basis to each of the
partners of the partnership. As of December 13, 1994, Pro Tech Systems was
formally dissolved.
The Company presently designs, develops, manufactures and markets
lightweight telecommunications headsets employing what the Company believes are
new concepts in advanced lightweight design and marketing strategies involving
the sale of the Company's product directly to the commercial headset market as
a replacement for its competitors' products. The Company presently
manufacturers and markets its first design for the commercial headset market
comprised of fast food companies and other large quantity users of headset
systems, and is in the process of completing development of a second design for
the telephone user market, which includes telephone operating companies,
government agencies, business offices, and professional telephone centers. The
Company expects to commence testing this product in the fourth quarter of 1996.
The Company's business strategy is to offer lightweight headsets with design
emphasis on performance and durability at a cost below that of its competitors.
The Company intends to concentrate its efforts on the production
of that portion of the telephone headset that the user wears. There are two
components to a complete telephone headset. The first is the headset component
that the user wears, consisting of a receiver capsule and a voice tube. The
second is the electronic amplifier component which plugs into the telephone
system to be operated. Of the two components, the electronic amplifier is
relatively more complex, time consuming and costly to produce as it requires
many variations to interface with the wide variety of telephone systems in the
market and generates higher labor and material costs. The electronic amplifier
also generally offers lower profit margins than the headset component. As a
result, the Company presently does not intend to produce electronic amplifiers,
but will concentrate its efforts on the production and distribution of the
headsets having the capability of connecting to and interfacing with the
various electronic
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amplifiers and telephone systems currently in use. The Company is conducting
its own market study to determine whether it would be financially viable for
the Company to produce its own electronic amplifier. The Company believes the
study will be completed in the fall of 1996. If it is determined to proceed
with the production, marketing and sale of an amplifier, the Company
anticipates spending approximately $200,000 to research and develop the
product.
INDUSTRY BACKGROUND
The lightweight telephone headset industry was established in May
1961 when Keith Larkin, the Company's President, Treasurer and Chairman of the
Board, founded Plantronics, Inc. ("Plantronics"). One year later, Plantronics
introduced the first lightweight telephone headset under a patent issued to Mr.
Larkin. Mr. Larkin remained with Plantronics until May 1967, at which time
Plantronics was the principal manufacturer of lightweight telephone headsets in
the world, and its products were standard on the National Aeronautics and Space
Administration's Mercury, Gemini, and Apollo moon flights. See "DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS." Today, Plantronics is the
world's largest lightweight telephone headset manufacturer, with approximately
$170 million of net sales for the 1995 fiscal year.
The Company estimates that sales of lightweight telephone headsets
exceeded $200 million in 1995 with the market dominated by two companies -
Plantronics and ACS Wireless, Inc. ("ACS Wireless") - which were both founded
by Keith Larkin and which both produced headsets under his patents. Product
lines of the Company's competitors generally share similar configurations, and
are marketed at higher prices than the headset offered by the Company.
Designed specifically for air traffic controllers and other
aerospace applications, the first headsets were intended as a replacement for
the heavy, bulky headsets then in use. While lightweight telephone headset
continue to be used for such purposes, today telephone headsets are
predominantly used as a substitute to telephone handsets by a wide variety of
users, including telephone operating companies and telephone call centers (such
as airline reservations, catalog sales and credit collection operations) and to
a lesser extent, by business persons and other professionals whose occupations
require extensive, though not constant, use of the telephone. In comparison to
handsets standard on most telephones, telephone headsets provide users with the
ability to perform other tasks while communicating via telephone and as a
result are designed to allow users to work more effectively and efficiently.
In comparison to speaker phones, telephone headsets provide greater
communications clarity and security. The Company believes that these
advantages will lead to increased demand for telephone headsets.
Telephone headsets also have commercial applications, primarily
two-way radio communication systems, such as those used by fast food attendants
to communicate with patrons and other personnel. Personal computer
applications for telephone headsets include audio input and output via voice
command, voice dictation and integrated voice telephone functions.
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PRODUCTS
The ProCom. The Company's initial entry into the lightweight
telephone headset market is the "ProCom." Weighing less than 2 ounces, the
ProCom is worn by users over the head by means of a springsteel wire headband
and a cushioned earphone. Attached to the earphone, which may be worn over
either ear, is an adjustable boom which connects to the ProCom's microphone.
The ProCom headset connects to the electronic amplifier or telephone system by
means of a tensile cable at the end of which is attached an adaptor capable of
interfacing with the particular electronic amplifier or telephone system
employed by the user. Through the use of different adapters, the Company is
currently able to equip the ProCom to be compatible with all of the electronic
amplifiers and telephone systems currently in use. The ProCom will be offered
in direct competition with all models offered by Plantronics, ACS
Communications, GN Netcom, Inc. and UNEX Corporation. See "DESCRIPTION OF
BUSINESS - Competition." The Company is presently selling the ProCom to
distributors at prices ranging from $28.00 to $49.00 per headset, and the
product is sold by the Company to retailers for $54.00 per headset.
The Trinity. The Trinity has been designed for users in noisy
office environments. The Company is currently in the process of developing the
Trinity for manufacture and sale. The Company anticipates completing the
development of the product by the fourth quarter of 1996. Unlike other
headsets currently available, the Trinity will employ a light (1/2 ounce)
"acoustical ear cup" which completely surrounds the users' ear. The perimeter
of this cup rests lightly in a broad area of contact around the ear, rather
than against or in the ear itself, which the Company believes will allow the
user to wear the Trinity in comfort for extended time periods. Moreover, by
enclosing the ear, the acoustical ear cup reduces background noise, thereby
significantly improving the clarity and strength of reception from the
earphone. The Trinity has been designed as a comfortable and lightweight
alternative to the bulky commercial sound suppressant headsets which are
presently the only headsets available to users operating in noisy office
environments. The Trinity can be worn in one of two mounting methods: (i) over
the ear (without a headband) by means of a contoured ear piece inserted within
the acoustical ear cup for positioning on either the left or right ear; or (ii)
over the head, by means of a detachable headband which can support either one
or two earcups. Like the ProCom, the Trinity will be produced with a choice of
adapters capable of interfacing with the electronic amplifiers and telephone
systems of most major manufacturers. The Company presently intends to sell the
Trinity to distributors at prices ranging from $46.00 to $54.00 per headset,
and the product is expected to be sold by the Company to retailers for $68.00
per headset.
The Freedom. The Company intends to introduce the Freedom headset
for sale in the fourth quarter of 1996. After conducting its own market
research, the Company determined that there is a demand for a headset which
combines both the over-the-head and over-the-ear features. As a result, the
Company designed the Freedom to incorporate both of these features, which
should enhance the Company's ability to market the product to cellular,
personal computer and small office telephone users. The Freedom is a
commercial adaptation of the headset that the Company has designed for the
National Aeronautics and Space
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Administration ("NASA"). See "DESCRIPTION OF BUSINESS - Marketing and Sales."
The Freedom is a smaller design of the Trinity, with some components reduced by
20% in order to create a lightweight headset. The ear speaker and microphone
positioning can be adjusted by the user of the headset, thereby allowing the
product to fit numerous head and ear sizes. In addition, the Freedom has a
detachable headband allowing users the choice of wearing the headset over the
head or over the ear. The Company presently intends to sell the Freedom to
distributors at prices ranging from $28.00 to $49.00 per headset, and the
product is expected to be sold by the Company to retailers for $54.00 per
headset.
MARKETING AND SALES
The Company's marketing and sales efforts consist of direct
targeting of a variety of potential headset purchasers such as corporate system
suppliers, telephone call center managers and distributors to such purchasers.
Marketing will be conducted by the Company's officers and staff, utilizing
industry contacts and calling upon potential purchasers. The Company plans on
supplementing the marketing efforts of its employees by using independent sales
representatives after all of the Company's products have been introduced into
the market.
The Company markets and will continue to market its headsets
directly to the commercial headset market as a replacement for its
competitors' headsets. Examples of such purchasers include fast food companies
and franchisees and other large quantity users of commercial headset systems.
The Company has entered into a non-binding business relationship agreement with
McDonald's Corporation which allows the Company to sell its products on a
non-exclusive basis to McDonald franchisees and company-owned restaurants.
Initial test sales to McDonald's and its franchisees by the Company and Pro
Tech Systems totaled $424,300 in 1994, which included sales of over 8,000
headsets to more than 3,500 McDonald's restaurants. These numbers have
increased by over 18,600 headset sales to more than 7,000 restaurants during
the fiscal year ended October 31, 1995. Sales of 9,375 headsets were made to a
total of approximately 1,000 new customers during the first six months of the
current fiscal year.
As the Company expands, it will direct its marketing and sales
efforts at: (i) telephone operating companies; (ii) telephone system
manufacturers; (iii) personal computer manufacturers; and (iv) government
agencies. Manufacturers of new telephone systems and other telecommunication
equipment that utilize headsets have been identified by the Company as a
developing market for telephone headsets. Examples of such manufacturers
include Rockwell, Northern Telecom and Teknetron. Another potential large
volume purchaser of headset are manufacturers of personal computers, especially
if and when headsets become a standard personal computer accessory. In
addition, the Company plans to market its products to government agencies. The
Company's headset has been approved for sale to Boeing Defense & Space Group
("Boeing"), a prime contractor of the NASA, for use by astronauts in
outerspace. To date, the Company has had $3,825 of sales to Boeing for two
prototype headsets. While profits from government contracts are anticipated to
be minimal, such sales enhance the credibility and reputation of the selected
headset and manufacturer, especially within the telephone industry.
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The Company's directed marketing and sales efforts will be
supplemented by the distribution of the Company's products through established
channels of distribution. These include: (i) specialized headset distributors
that derive a majority of their revenues from the sale of headsets to both end
users and, to a lesser extent, resellers; and (ii) larger electronic
wholesalers that offer hundreds of products, including headsets. It is
anticipated that a majority of sales of the Company's headsets to commercial
users such as credit card companies and airlines will be through such
distributors.
As of June 26, 1996, the Company entered into two-year marketing
agreements with each of Martin Goldberg, Costas Takkas and Don Fraser, pursuant
to which Mr. Goldberg was granted the non-exclusive right to market the
Company's products throughout the United States, Mr. Takkas was granted the
non-exclusive right to market such products in Central and South America and
the Caribbean, and Mr. Fraser was granted the non-exclusive right to market
such products in all other parts of the world. As consideration for the
services to be rendered by each of such persons, the Company granted each of
such persons a warrant to purchase up to 200,000 shares of Common Stock at an
exercise price of $1.50 per share. The warrants are exercisable commencing on
September 26, 1996, and expire two years thereafter. Under each of the
agreements, the Company has also agreed to pay each of such persons two percent
of the sales of the Company's products resulting from the efforts of Messrs.
Goldberg, Takkas and Fraser.
MANUFACTURING
The Company purchases the components for its headsets from 16
suppliers in Taiwan and the United States, who produce the components to the
Company's specification based upon molds designed by the Company. An
interruption in the supply of a component for which the Company is unable to
readily procure a substitute source of supply could temporarily result in the
Company's inability to deliver products on a timely basis, which in turn could
adversely affect its operations. To date, the Company has not experienced any
shortages of supplies. In order to meet the requirements of its customers for
timely delivery of products, the Company manufactures headsets to meet
forecasted customer requirements. Since such manufacturing occurs prior to the
receipt of purchase orders, the Company maintains an inventory of finished
headsets as well as components. At October 31, 1995, the amount of the
Company's inventory was $90,061. For the six-month period ended April 30,
1996, the amount of the Company's inventory was $98,024.
Production of the Company's headsets consists of assembly
operations conducted at the Company's principal offices in Fort Pierce,
Florida. The Company believes that the Fort Pierce office presently possesses
sufficient production capacity, or could easily be expanded to accommodate up
to $4 million of sales of the Company's products. See "DESCRIPTION OF
PROPERTY." In the event that purchase orders were to exceed the production
capabilities of the Fort Pierce location, the Company would be required to
enter into subcontracting arrangements for the manufacturer of the Company's
products by third parties. A delay in establishing such arrangements, if
necessary, could adversely affect the Company's ability to deliver products on
a timely basis to its customers, which in turn could adversely affect the
Company's operations. The Company, however, believes that subcontracting the
manufacture
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of the Company's products could be accomplished on short notice given the
simple design of the Company's products.
COMPETITION
The lightweight telephone headset industry is highly competitive
and characterized by a few dominant manufacturers. The Company is aware of
several companies which manufacture telephone headsets, each of which possesses
greater financial, manufacturing, marketing and other resources than the
Company. Primary among the Company's competitors is Plantronics, the world's
largest manufacture of lightweight telephone headset, which estimates its share
of the market to be 65% in North America and 60% worldwide and reported net
sales from all of its products (including electronic amplifiers and other
headset accessories and services) of approximately $170 million for the fiscal
year 1995. Other competitors include ACS Wireless, GN Netcom, Inc. and UNEX
Corporation. ACS Wireless was founded by Mr. Larkin, and the Company believes
ACS Wireless has a market share of approximately 15%. See "DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS."
The Company believes that in selecting telephone headsets, users
primarily consider price, product quality, reliability, product design and
features, and warranty terms. The Company believes that its headsets are
superior in design and construction and substantially lower in price than the
models currently available from the Company's competitors. No assurances can
be given, however, that the Company's products will be perceived by users and
distributors as providing a competitive advantage over competing headsets. In
addition, no assurance can be given that competing technologies will not become
available which are superior, less costly or marketed by better known
companies. Also, certain customers may prefer to do business with companies
with substantially greater resources than the Company.
In addition to direct competition from other companies offering
lightweight telephone headsets, the Company may additionally face indirect
competition in its industry from technological advances such as interactive
voice response systems which require no human operators for certain
applications such as account balance inquiries or airplane flight information.
The Company believes that this competition will be more than offset by
increased demand for headsets as voice telecommunication applications expand.
PROPRIETARY PROTECTION
The Company does not presently own any patents for any of its
products or technologies. Keith Larkin, the Company's President, Treasurer,
and Chairman of the Board, has, however, transferred to the Company any and all
patentable rights he may have in the ProCom and Trinity, or any feature
thereof, as well as all other patent rights Mr. Larkin may conceive in the
course of his employment with the Company. The Company intends to seek patent
protection on its inventions at the appropriate time in the future. The
process of seeking patent protection can be lengthy and expensive, and there
can be no assurance that patents will issue from any applications filed by the
Company or that any patent issued will be of
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sufficient scope or strength or provide meaningful protection or any commercial
advantage to the Company. The Company may be subjected to, or may initiate,
litigation or patent office interference proceedings, which may require
significant financial and management resources. The failure to obtain
necessary rights or the advent of litigation arising out of any such claims
could have a material adverse effect on the Company's operations.
Certain of the Company's employees involved in engineering and
technical programs will be required to enter into confidentiality agreements as
a condition of employment. The Company does not currently own any registered
trademarks, although the Company intends to file trademark applications in the
future with respect to its distinguishing marks.
EMPLOYEES
The Company currently has 13 full-time employees and 2 part-time
employees, including 3 persons in management, 3 persons in administration, 2
persons in marketing and 5 persons in assembly and production. The Company
intends to hire up to 8 additional employees within the next three months, 4 of
whom will work in production, 2 in marketing and 1 each in shipping and
customer service. None of the Company's employees are represented by a
collective bargaining unit, and the Company believes that its relationship with
its employees is good.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
RESULTS OF OPERATIONS
SIX-MONTH PERIOD ENDED APRIL 30, 1996 AS COMPARED TO SIX-MONTH PERIOD ENDED
APRIL 30, 1995.
Net sales for the six-month period ended April 30, 1996 totalled
$403,805, representing a decrease of $4,502 in net sales for the comparable
prior six-month period. The Company commenced the sale of its product through
distributors during the first six months of fiscal 1996. Previously, the
Company sold its product directly to the end user. The sale price of the
product is discounted for distributors based upon volume purchases. See
"DESCRIPTION OF BUSINESS - Products." As a result, the cost of goods sold for
the six months ended April 30, 1996 was $162,907, as compared to $138,435 for
the comparable prior six-month period. Accordingly, the Company's gross profit
for the six-month period ended April 30, 1996 decreased by $28,973 from the
comparable prior six-month period. Selling, general and administrative
expenses for the first six months of fiscal 1996 increased by 4% over the
comparable six-month period. Consequently, net income from operations
decreased approximately 49% for the first six months of fiscal 1996 over the
comparable prior six-month period.
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The Company generated interest income of $12,908 for the first six
months of fiscal 1996 as compared to interest income of $1,003 for the
comparable prior six-month period. The interest income resulted from the
Company's investment of the net proceeds from the private placement of
securities during the six-month period ended April 30, 1996. Offsetting the
interest income during the first six months of fiscal 1996 was an interest
expense of $13,868 resulting from a loan of $250,000 from a stockholder of the
Company. The loan was repaid in April 1996. No comparable interest expense
was incurred during the first six months of fiscal 1995.
The Company generated net income of $35,575 for the first six
months of fiscal 1996 as compared to net income of $82,063 for the first six
months of fiscal 1995. The principal reasons for the decrease in net income
between the periods were the Company's investment in market research and
research and development of $32,105 during the first six months of fiscal 1996
versus $2,670 for the comparable prior six-month period, the implementation of
a new computer system during the first six months of fiscal 1996, which
resulted in an expense of $8,815, as compared to no comparable expense during
the first six months of fiscal 1995, and the decrease in profit margin
resulting from the sale of the Company's product primarily through
distributors, rather than directly to end users, during the first six months of
fiscal 1996. Sales through distributors were made at lower prices than sales
to end users.
FISCAL YEAR ENDED OCTOBER 31, 1995
For the fiscal year ended October 31, 1995, the Company realized
net sales of $830,667. Cost of goods sold for this period was $358,595, which
resulted in gross profits of $472,072. Net income for the 12-month period
totalled $43,959, after non-recurring expenses and auditing expenses in excess
of $50,000 related to the Company's sale in 1995 of 864,000 shares of Common
Stock and corporate start-up expenses.
LIQUIDITY AND CAPITAL RESOURCES
The current ratio (current assets to current liabilities) of the
Company was 2.50 to 1.00 at October 31, 1995. For the unaudited six-month
period ended April 30, 1996 the current ratio was 77.3 to 1.00 and current
assets exceeded current liabilities by 920,942.
During the fiscal year ended October 31, 1995 and thereafter, the
Company has funded its working capital requirements with cash flow from
operations and the net proceeds of $852,226 from the private sale of 1,964,000
shares of Common Stock. The Company intends to use the cash it generates from
operations and the net proceeds from the private sale of Common Stock to
increase its market share in the fast-food headset market and to enter the
telephone user market. Management believes that the Company has sufficient
funds to meet the Company's anticipated working capital requirements for at
least 12 months.
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In order for the Company to maximize the potential of the
telephone user market and to enable the Company to expand into additional
markets, including government agencies and personal computers, the Company will
require additional capital. It is anticipated that the Company will seek to
raise such additional financing through a private or public offering of equity,
although there are presently no agreements, understandings or arrangements with
respect to any additional financing and no assurances can be given that the
Company will be able to obtain such additional financing. The Company
presently does not intend to finance, to any significant extent, its growth
through debt financing.
ITEM 3. DESCRIPTION OF PROPERTY
The Company's executive, sales and manufacturing offices occupy
approximately 3,200 square feet of space located at 3309 and 3311 Industrial
25th Street, Fort Pierce, Florida 34946, pursuant to two leases expiring August
31, 1996 and November 30, 1997. The Company's aggregate monthly rent under
both leases is $1,396. The Company has the option of renewing the lease
expiring in August 1996 for an additional one-year term, on terms and
conditions to be negotiated with the landlord. The Company also has the option
of renewing the lease expiring in November 1997 for an additional two-year
period on the same terms and conditions, except the monthly rental rate will
increase by approximately $20.00 per month. The Company considers its rental
space adequate for its present operations, and believes additional space is
available near its present location, if needed.
[The balance of this page is intentionally left blank.]
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ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of the
Common Stock as of July 1, 1996 by: (i) each of the Company's officers and
directors: (ii) each person who is known by the Company to own beneficially
more than 5% of the outstanding shares of Common Stock; and (iii) all of the
Company's officers and directors as a group:
<TABLE>
<CAPTION>
Name and Address of Shares Owned
Beneficial Owner Beneficially Percentage of Class
------------------ ------------- -------------------
<S> <C> <C>
Keith Larkin 1,580,000(1) 35.1%
c/o Pro Tech Communications, Inc.
3311 Industrial 25th Street
Fort Pierce, Florida 34946
Kenneth Campbell 25,000(2) 0.6%
c/o Pro Tech Communications, Inc.
3311 Industrial 25th Street
Fort Pierce, Florida 34946
Richard Hennessey 25,000(2) 0.6%
c/o Pro Tech Communications, Inc.
3311 Industrial 25th Street
Fort Pierce, Florida 34946
Harvey M. Burstein 350,000 8.8%
3204 W. 84th Street
Leawood, Kansas 66206
Harris McLean Financial Group, Ltd. 220,000(3) 5.3%
P.O. Box 30758
Cayman Islands, B.W.I.
All officers and directors as a group 1,630,000(1)(2) 35.8%
(3 persons)
</TABLE>
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(1) Includes 540,000 shares of Common Stock underlying a stock option, which
is presently exercisable at $.50 per share and expires on April 15, 1999.
(2) Represents 25,000 shares of Common Stock underlying a stock option, which
is presently exercisable at $.50 per share and expires on April 15, 1999.
(3) Includes 200,000 shares of Common Stock underlying an option which is
presently exercisable at $.60 per share and expires on May 2, 1997.
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ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The following table sets forth certain information with respect to
the executive officers and directors of the Company:
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
---- --- -------------------------
<S> <C> <C>
Keith Larkin 72 Chairman of the Board, President and Treasurer
Kenneth Campbell 53 Director, Secretary and Vice President-Operations
Richard Hennessey 37 Vice President - Marketing
</TABLE>
Keith Larkin is the founder, Chairman of the Board, President and
Treasurer of the Company. Mr. Larkin's 30 year professional career has been
devoted to designing, manufacturing and marketing his new designs in
lightweight telephone headsets. In 1961, Mr. Larkin founded Plantronics, the
current industry leader in lightweight telephone headsets with annual sales of
all its products (including the electronic amplifier) in 1995 of approximately
$170 million. From 1961 until he sold his interest in 1967, Mr. Larkin served
as the President and Chairman of Plantronics, during which period Plantronics
established itself as the main source of lightweight telephone headsets to the
telephone industry and provided the headsets for NASA's Mercury, Gemini and
Apollo moon flights. In the late 1970s, Mr. Larkin conceived, developed and
patented a new design in headsets, and in 1980, he founded ACS Communications
to manufacture a new line of headsets to compete against the Plantronics'
headsets. With Mr. Larkin as its President, ACS Communications attained $1
million monthly sales figures to the telephone market within 3 years of
operations and replaced Plantronics' headsets on the NASA Space Shuttle. In
1986, he left ACS Communications to become involved in Christian children's
relief programs in Haiti and Honduras for a period of three years. From
January 1989 to August 1991, Mr. Larkin served as the President of Advanced
Recreational Technology, Inc., an engineering research and development company
owned by Mr. Larkin. In August 1991, Mr. Larkin founded Pro Tech Systems, a
California limited partnership which he managed as general partner. Pro Tech
Systems was formed to design, manufacture and market lightweight telephone
headsets. Upon the transfer of all of the assets of Pro Tech Systems to the
Company in November 1994, Mr. Larkin became the Chairman of the Board,
President and Treasurer of the Company, positions which he has held since such
time.
Kenneth Campbell has held the positions of Vice
President-Operations, Secretary, and a director of the Company since November
9, 1994. As Vice President-Operations, Mr. Campbell is responsible for all
aspects of manufacturing including materials management, production, quality
control, and all related accounting. From 1967 through 1979, he served as the
President of the Boathouse of Lexington, Inc., a corporation dealing in a line
of pleasure
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boats manufactured by the SeaRay Corporation. From 1980 through 1989, Mr.
Campbell owned several retail businesses specializing in consumer product
sales, including Campbell Distributors, Inc. and Campbell & Associates of Fort
Pierce, Florida, Mr. Campbell has been employed as a real estate broker for
Prudential Real Estate in 1990/1991 and as a sales manager for Pace Homes, Inc.
and Versa Development, Inc. from 1992 to 1993.
Richard Hennessey joined the Company as Director of Marketing in
August 1995 and was appointed Vice President - Marketing on June 10, 1996.
From 1982 through 1984, Mr. Hennessey was a salesman with the computer sales
division of Lanier Business Products located in Boston, Massachusetts. From
1984 through April 1994, Mr. Hennessey held various new venture sales and sales
management positions with Digital Equipment Corporation ("Digital"). From
January 1995 until Mr. Hennessey joined the Company, he was engaged in
voluntary missionary work.
ITEM 6. EXECUTIVE COMPENSATION
Set forth below is certain information concerning the compensation
paid to the Company's chief executive officer for the fiscal year ended October
31, 1995. No other executive officer of the Company received compensation in
excess of $100,000 for such fiscal year.
SUMMARY COMPENSATION TABLE
The following table provides the cash and other compensation paid
or accrued by the Company to its chief executive officer for the fiscal year
ended October 31, 1995:
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
------------------- ----------------------
Securities
Restricted Underlying
Other Annual Stock Stock LTIP All Other
Name/Position Year Salary Bonus Compensation Awards Options Payouts Compensation
- ------------- ---- ------ ----- ------------ ------ --------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Keith Larkin 1995 $27,500 0 $0 0 0 0 0
</TABLE>
EMPLOYMENT AGREEMENT
On December 9, 1994, Keith Larkin entered into a five-year
employment agreement with the Company, pursuant to which he has the duties of
President and Treasurer of the Company and has a right to receive an annual
salary of $90,000, which may increase each year by an amount not less than the
percentage increase in the United States Consumer Price Index. For the fiscal
year ended October 31, 1995, the Company paid Mr. Larkin a salary of $27,500,
and he waived his right to receive the balance of his annual salary for such
fiscal year.
12
<PAGE> 14
The Company does not have written employment agreements with Kenneth
Campbell or Richard Hennessey. During the fiscal year ended October 31, 1995,
the Company paid Messrs. Campbell and Hennessey salaries of $40,000 and $7,500,
respectively. For the fiscal year ending October 31, 1996, the Company will
pay Messrs. Campbell and Hennessey salaries of $48,000 and $40,000,
respectively.
STOCK OPTION PLAN
In April 1996, the Board of Directors of the Company adopted the
Company's 1996 Stock Option Plan (the "Plan"). The Plan provides for the grant
by the Company of options to purchase up to an aggregate of 590,000 of the
Company's authorized but unissued shares of Common Stock (subject to adjustment
in certain cases including stock splits, recapitalizations and reorganizations)
to officers, directors, consultants, and other persons rendering services to
the Company.
The purposes of the Plan are to provide incentive to employees,
including officers, directors and consultants of the Company, to encourage such
persons to remain in the employ of the Company and to attract to the Company
persons of experience and ability. The Plan terminates on April 15, 2006.
Options granted under the Plan may be either incentive stock options
within the meaning of the Internal Revenue Code of 1986, as amended ("incentive
options"), or options that do not qualify as incentive options ("nonqualified
options"). The exercise price of incentive options must be at least equal to
the fair market value of the shares of Common Stock on the date of grant;
provided, however, that the exercise price of any incentive option granted to
any person who, at the time of the grant of the option, owns stock aggregating
10% or more of the total combined voting power of the Company or of any parent
or subsidiary of the Company ("Ten Percent Shareholder"), must not be less than
110% of the fair market value of such shares on the date of grant of the
incentive option. No incentive option may be granted under the Plan to any
individual if the aggregate fair market value of the shares (determined as of
the time the option is granted) which vest (i.e. first become exercisable)
during any calendar year, under all incentive options held by such optionee
exceeds $100,000. There is no limitation on the amount of nonqualified stock
options which may be granted to any participant in the Plan. Options may be
granted under the Plan for terms of up to ten years; provided, however, that
the term of any incentive option granted to any Ten Percent Shareholder, may
not exceed five years. Options granted under the Plan to officers, directors or
employees of the Company may be exercised only while the optionee is employed
or retained by the Company. However, options which are exercisable at the time
of termination may be exercised within three months of the date of termination,
and twelve months after termination of the employment relationship or
directorship if such termination was by reason of death or permanent disability
of the optionee.
13
<PAGE> 15
On April 15, 1996, options to purchase 25,000 shares were granted to
each of Kenneth Campbell and Richard Hennessey and options to purchase 540,000
shares were granted to Keith Larkin. All of such options are immediately
exercisable at the option price of $0.50 per share and expire on April 15,
1999.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As of October 7, 1994, the Company entered into a consulting
agreement with Harvey M. Burstein, pursuant to which Mr. Burstein provided
consulting services to the Company with respect to the Company's acquisition of
the assets of Pro Tech Systems as well as other corporate matters. As
consideration for such services, the Company paid Mr. Burstein $49,100 in
1996.
In connection with the Company's sale of 1,964,000 shares of Common
Stock during 1995 and 1996, Harris McLean Financial Group, Ltd. ("Harris
McLean") acted as sales agent for the Company with respect to the sale of
shares outside of the United States. As consideration for the services of
Harris McLean, the Company paid such firm a commission of $40,950 and granted
the firm an option to purchase 200,000 shares of Common Stock at an exercise
price of $.60 per share. The option is presently exercisable and expires on
May 2, 1997.
ITEM 8. DESCRIPTION OF SECURITIES
The Company is authorized to issue 10,000,000 shares of Common
Stock, par value $.001 per share. As of July 1, 1996, there were 3,964,000
shares of Common Stock issued and outstanding to 42 stockholders of record.
Holders of Common Stock are entitled to cast one vote for each share
owned of record at all stockholder meetings for all purposes. Since holders of
Common Stock do not have cumulative voting rights, holders, individually or as
a group, of more than 50% of the outstanding shares of Common Stock present and
voting at an annual meeting of stockholders at which a quorum is present can
elect all of the directors of the Company. Holders of Common Stock have no
preemptive rights and have no right to convert their Common Stock into any
other securities. All of the outstanding shares of Common Stock are fully paid
and nonassessable.
Holders of Common Stock are entitled to receive ratably on a
pro-rata basis dividends, if any, as may be declared from time to time by the
Board of Directors in its sole discretion from funds legally available
therefor. No dividends have been declared since the Company was formed in
October 1994. In the event of liquidation, dissolution or winding up of the
Company, holders of the Common Stock are entitled to receive ratably on a
pro-rata basis the Company's assets, if any, remaining after payment of the
Company's liabilities.
American Stock Transfer & Trust Company, New York, New York, serves
as transfer agent for the Common Stock.
14
<PAGE> 16
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER SHAREHOLDER MATTERS
The Common Stock began trading on the National Association of
Securities Dealers, Inc. Electronic Bulletin Board on March 22, 1996. On July
1, 1996, the closing bid price of the Common Stock as reported on the
Electronic Bulletin Board was $1.375. The market quotation reflects
inter-dealer prices, without retail mark-up, mark-down, or commission and may
not represent an actual transaction. As of July 1, 1996, there were 42 record
holders of the Common Stock.
As of July 1, 1996, there were 3,964,000 shares of Common Stock
issued and outstanding, of which 1,964,000 shares were offered and sold in
reliance on the exemption from registration provided by Rule 504 of Regulation
D promulgated under the Securities Act of 1933 (the "Securities Act"). The
shares of Common Stock acquired pursuant to Rule 504 may be resold without
registration under the Securities Act, unless the holders of such shares would
be deemed underwriters or dealers. The balance of the outstanding shares of
Common Stock, representing 2,000,000 shares, are restricted securities and
unless registered under the Securities Act may not be sold publicly until
November 1996, at which time such shares may be sold pursuant to Rule 144
promulgated under the Securities Act. Generally, Rule 144 permits the sale by
a stockholder, within any three-month period, of such amount of shares which
does not exceed the greater of 1% of the then-outstanding shares of Common
Stock or the average weekly trading volume during the four calendar weeks prior
to such sale.
The Company granted an option to Harris McLean to purchase 200,000
shares of Common Stock at exercise price of $.60 per share. The option is
presently exercisable and expires on May 2, 1997. The option was issued, and
the shares underlying the option will be issued, pursuant to Regulation S
promulgated under the Securities Act. Accordingly, if Harris McLean exercises
the option after the effective date of this Report, the shares acquired
pursuant to the exercise of the option may be publicly resold in the United
States by Harris McLean 40 days after such firm has exercised the option and
paid full value therefor.
The Company granted options to purchase 590,000 shares to the
executive officers of the Company pursuant to Rule 701 promulgated under the
Securities Act. Accordingly, the shares underlying the options may be publicly
resold by such executive officers 90 days after the effective date of this
Report.
As of June 26, 1996, the Company issued options to purchase 200,000
shares of Common Stock to each of Messrs. Martin Goldberg, Costas Takkas and
Don Fraser pursuant to Section 4(2) of the Securities Act and Rule 506 of
Regulation D promulgated under the Securities Act. The Company has agreed to
register with the Securities and Exchange Commission (the "Commission") all of
the shares of Common Stock underlying such warrants. The Company intends to
file a Registration Statement on Form S-8 as soon as practicable after the
effective date of this Report. As a result, all of the shares of Common Stock
underlying such warrants will be freely transferable when such registration
statement is filed with the Commission.
15
<PAGE> 17
ITEM 2. LEGAL PROCEEDINGS
The Company is not a party to any legal proceeding.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Not Applicable.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
The Company has issued the following securities since its formation
in October 1994:
On November 1, 1994, all of the assets of Pro Tech Systems, a
California limited partnership, were transfered to the Company as consideration
for the issuance of 2,000,000 shares of Common Stock to 13 persons, including
Mr. Larkin and the 12 limited partners of the limited partnership. This
transaction was considered exempt from the registration requirements of the
Securities Act under Section 4(2) of the Securities Act and Rule 506 of
Regulation D promulgated under the Securities Act.
On November 3, 1994, the Company granted Westek Electronics, Inc.
("Westek"), a company controlled by Mr. Larkin's son, a two-year option to
purchase 40,000 shares of Common Stock at an exercise price $.50 per share.
The option is presently exercisable and expires on March 2, 1997. The option
was issued to Westek in consideration of a loan of $20,000 from Westek to the
Company. The loan was repaid in full on May 1, 1995. This transaction was
considered exempt from the registration requirements from the Securities Act
under Section 4(2) of the Securities Act and Rule 506 of Regulation D.
From January 5, 1995 to November 15, 1995, the Company offered and
sold 864,000 shares of Common Stock at $.50 per share to 13 persons pursuant to
Rule 504 of Regulation D promulgated under the Securities Act. In connection
with such transaction, the Company granted an option to Harris McLean to
purchase up to 200,000 shares of Common Stock. The option was granted to
Harris McLean pursuant to Regulation S promulgated under the Securities Act.
From April 8, 1996 to May 15, 1996, the Company sold 1,100,000
shares at $.50 per share to 56 persons pursuant to Rule 504 of Regulation D
promulgated of the Securities Act.
As of June 26, 1996, the Company granted to each of Martin Goldberg,
Costas Takkas and Don Fraser a warrant to purchase 200,000 shares of Common
Stock at an exercise price of $1.50 per share. These transactions were
considered exempt from the registration requirements of the Securities Act
under Section 4(2) of the Securities Act and Rule 506 of Regulation D
promulgated under the Securities Act.
16
<PAGE> 18
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Pursuant to the Company's Articles of Incorporation, the Company has
agreed to indemnify any officer or director, or any former officer or director,
to the full extent permitted by law. As a result, the Company will indemnify
any officer or director who is a party to a lawsuit by reason of such person's
service as a director or officer against expenses and amounts incurred in
connection with such lawsuit if he or she acted in good faith, and, with
respect to a criminal action or proceedings, had no reasonable cause to believe
his or her conduct was unlawful. The Company will also indemnify such persons
against expenses reasonably incurred by him or her in connection with the
defense or settlement of suit brought by or in the right of the Company to
procure a judgment in its favor, if such person acted in good faith and is not
adjudged to be liable for negligence, unless a court determines that such
person is entitled to indemnity, notwithstanding the adjudication of liability
for negligence.
On April 15, 1996, the Company granted three executive officers of
the Company options to purchase an aggregate of 590,000 shares of Common Stock.
The grants of the options were considered exempt from the registration
requirements of the Securities Act under Section 4(2) of the Securities Act and
Rule 506 of Regulation D promulgated under the Securities Act.
PART F/S
The Company's financial statements begin on page F-1 to this Report.
17
<PAGE> 19
[Peat Marwick LLP Letterhead]
700 20th Street
P.O. Box 249
Vero Beach, FL 32961
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Pro Tech Communications, Inc.:
We have audited the accompanying balance sheet of Pro Tech Communications, Inc.
as of October 31, 1995 and the related statements of income, stockholders'
equity and cash flows for the year then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Pro Tech Communications, Inc.
as of October 31, 1995, and the results of its operations and its cash flows
for the year then ended in conformity with generally accepted accounting
principles.
/s/ KPMS Peat Marwick LLP
-------------------------
KPMS Peat Marwick LLP
November 28, 1995
F-1
<PAGE> 20
PRO TECH COMMUNICATIONS, INC.
BALANCE SHEET
October 31, 1995
<TABLE>
<CAPTION>
Assets
------
<S> <C>
Current assets:
Cash and cash equivalents $571,270
Accounts receivable less allowance for doubtful
accounts of $22,080 123,073
Inventory (note 2) 90,061
Other current assets 1,122
--------
Total current assets 785,526
Net property and equipment (note 3) 90,166
--------
$875,692
========
Liabilities and Stockholders' Equity
------------------------------------
Current liabilities:
Notes payable (note 4) 250,226
Accounts payable 28,581
Accrued expenses (note 8) 34,186
--------
Total current liabilities 312,993
Stockholders' equity: (note 5)
Common stock, $.001 par value, authorized
10,000,000 shares, issued
and outstanding 2,864,000 shares 2,864
Additional paid-in capital 515,876
Retained earnings 43,959
--------
Total stockholders' equity 562,699
Commitments (note 7)
--------
$875,692
========
</TABLE>
See accompanying notes to financial statements.
F-2
<PAGE> 21
PRO TECH COMMUNICATIONS, INC.
STATEMENT OF INCOME
Year ended October 31, 1995
<TABLE>
<S> <C>
Net sales (note 9) $830,667
Cost of goods sold 358,595
--------
Gross profit 472,072
Selling, general and administrative expenses 415,407
--------
Income from operations 56,665
Other income (expense):
Interest income 2,160
Interest expense (1,967)
Miscellaneous income 1,033
-------
Income before income taxes 57,891
Income taxes (note 8) 13,932
--------
Net income $ 43,959
========
</TABLE>
See accompanying notes to financial statements.
F-3
<PAGE> 22
PRO TECH COMMUNICATIONS, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
Year ended October 31, 1995
<TABLE>
<CAPTION>
Additional
Common Paid-in Retained
Stock Capital Earnings Total
------- -------- -------- -------
<S> <C> <C> <C> <C>
Balance, November 1, 1994 $2,000 119,485 - 121,485
Issuance of 864,000
shares of common stock
(note 5) (net of costs
of $32,000) 864 396,391 - 397,255
Net earnings - - 43,959 43,959
------ ------- ------ -------
Balance, October 31, 1995 $2,864 515,876 43,959 562,699
====== ======= ====== =======
</TABLE>
See accompanying notes to financial statements.
F-4
<PAGE> 23
PRO TECH COMMUNICATIONS, INC.
STATEMENT OF CASH FLOWS
Year ended October 31, 1995
<TABLE>
<S> <C>
Cash flows from operating activities:
Cash received from sale of merchandise $ 723,566
Cash paid to vendors and employees (738,295)
Interest paid (1,967)
Interest received 2,160
---------
Net cash used by operating activities (14,536)
---------
Cash flows from investing activities:
Purchase of property and equipment (70,976)
Proceeds from sale of property and equipment 3,275
---------
Net cash used in investing activities (67,701)
---------
Cash flows from financing activities:
Principal payments on notes payable (2,420)
Repayment of loan payable (5,721)
Proceeds from note payable 250,000
Proceeds from issuance of common stock 397,255
---------
Net cash provided by financing activities 639,114
---------
Net increase in cash and cash equivalents 556,877
Cash and cash equivalents at beginning of year 14,393
---------
Cash and cash equivalents at end of year $ 571,270
=========
Reconciliation of net income to net cash used by operating
activities:
Net income 43,959
Adjustments to reconcile net income to net cash used by operating
activities:
Depreciation and amortization 20,619
Allowance for doubtful accounts 8,779
Gain on disposal of fixed assets (829)
Increase in accounts receivable (42,220)
Increase in inventory (65,914)
Increase in other assets (500)
Decrease in accounts payable (2,607)
Increase in accrued expenses 27,007
Decrease in other liabilities (2,830)
---------
Total adjustments (58,495)
---------
Net cash used by operating activities $ (14,536)
=========
</TABLE>
See accompanying notes to financial statements.
F-5
<PAGE> 24
PRO TECH COMMUNICATIONS, INC.
NOTES TO FINANCIAL STATEMENTS
October 31, 1995
(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(A) BUSINESS
Pro Tech Communications, Inc. (the "Company") was organized and
incorporated under the laws of the State of Florida for the purpose
of designing, developing, producing and marketing lightweight
telephone headsets. The current year market consists of fast-food
franchises who use the headsets in drive-thru services, but the
product has potential in other industries.
On November 1, 1994 all assets and liabilities of Pro Tech Systems (a
limited partnership) were transferred to Pro Tech Communications,
Inc. The former partners of Pro Tech Systems received 2,000,000
shares of common stock in the Company in exchange for their
respective interests in the limited partnership.
(B) CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments purchased with a
maturity of three months or less to be cash equivalents.
(C) INVENTORY
Inventories are stated at the lower of cost or market. Cost is
determined using the first-in, first-out (FIFO) method.
(D) REVENUE AND COST RECOGNITION
The Company recognizes revenues as products are shipped. New
customers are extended a 30-day trial period during which the product
may be returned. Additionally, each headset carries a two year
warranty. The Company provides, by a current charge to income, an
amount it estimates will be needed to cover future warranty
obligations for products sold during the year. The accrued liability
for warranty costs is included in the caption "Accrued expenses" in
the balance sheet.
(E) PROPERTY AND EQUIPMENT
Property and equipment is carried at cost. Depreciation is computed
using the straight-line method over the estimated useful lives of the
assets which are generally 5-10 years. Repair and maintenance costs
are charged to expense when incurred.
(Continued)
F-6
<PAGE> 25
PRO TECH COMMUNICATIONS, INC.
NOTES TO FINANCIAL STATEMENTS
(F) INCOME TAXES
Income taxes are calculated in accordance with the provisions of
Statement of Financial Accounting Standards No. 109, "Statement for
Income Taxes". Under the asset and liability method of Statement
109, deferred income taxes are recognized for the future tax
consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and
their respective tax bases. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income
in the years in which those temporary differences are expected to be
recovered or settled. Under Statement 109, the effect on deferred
taxes of a change in tax rates is recognized in income in the period
that includes the enactment date.
(2) INVENTORY
Inventory at October 31, 1995 consists of the following:
<TABLE>
<S> <C>
Raw materials $68,521
Work in process 1,000
Finished goods 20,540
-------
$90,061
=======
</TABLE>
(3) NET PROPERTY AND EQUIPMENT
The following is a summary of property and equipment at October 31, 1995:
<TABLE>
<S> <C>
Production molds $ 52,999
Office equipment 40,091
Production equipment 8,217
Leasehold improvements 6,663
Vehicles 1,984
--------
Total cost 109,954
Less: accumulated depreciation 19,788
--------
Total $ 90,166
========
</TABLE>
Total depreciation expense was $20,464 for the period ended October 31,
1995.
(Continued)
F-7
<PAGE> 26
PRO TECH COMMUNICATIONS, INC.
NOTES TO FINANCIAL STATEMENTS
(4) NOTES PAYABLE
Notes payable consisted of the following at October 31, 1995:
<TABLE>
<S> <C>
Note payable to GMAC bearing fixed interest at 18.5%; interest and
principal payable in sixty equal monthly installments of $143, final $
payment due November 1995; secured by vehicle. 226
Note payable to Euro Investment Corporation bearing annual interest at
14.3%, payable on demand 250,000
--------
Total notes payable $250,226
========
</TABLE>
(5) CAPITAL STOCK
During fiscal year 1995, the Company underwent a stock offering under Rule
504 of Regulation D promulgated under the Securities Act of 1933. The
offering sold 864,000 shares of common stock at $.50 per share, yielding
net cash proceeds of $399,255. At October 31, 1995, $2,000 was held in
escrow for the benefit of the Company pending completion of the
subscription agreement by an investor for 4,000 shares. This receivable is
netted against additional paid-in capital.
The Company, in conjunction with the stock offering of March 3, 1995,
issued warrants for 200,000 shares of common stock to the sales agent
responsible for sales outside the United States. As of October 31, 1995, a
summary of the warrants to purchase common stock, currently exercisable,
are as follows:
<TABLE>
<CAPTION>
Expiration Date Shares Exercise Price Per Warrant
--------------- ------- --------------------------
<S> <C> <C>
September 3, 1997 200,000 $.60
</TABLE>
(6) RESEARCH AND DEVELOPMENT
Research and development costs are expensed when incurred and are included
in selling, general and administrative expenses. The amount charged to
expense during fiscal year 1995 was $31,300.
(7) OPERATING LEASES
The Company leases office and production facilities under operating leases.
Future minimum lease payments for such noncancelable leases as of October
31, 1995 are as follows:
<TABLE>
<S> <C>
1996 $13,927
1997 8,232
1998 1,372
-------
Total $23,531
=======
</TABLE>
Rent expense under lease agreements totaled $15,319 for fiscal year 1995.
(Continued)
F-8
<PAGE> 27
PRO TECH COMMUNICATIONS, INC.
NOTES TO FINANCIAL STATEMENTS
(8) INCOME TAXES
Income taxes consist of the following:
<TABLE>
<CAPTION>
1995
-------
<S> <C>
Current:
Federal $12,179
State 1,753
-------
$13,932
=======
</TABLE>
The actual expense differs from the "expected" amount computed by applying
the U.S. Federal corporate income tax rate of 34% to income before income
taxes as follows:
<TABLE>
<S> <C>
Computed "expected" tax expense $ 19,683
Increase (reduction) in income taxes resulting from:
State income tax, net of federal tax benefits 1,200
Effect of graduated tax rates (11,200)
Other, net 4,249
--------
$ 13,932
========
</TABLE>
(9) MAJOR CUSTOMERS
For fiscal year 1995, approximately 60% of all sales were to McDonald's
Restaurant franchises.
F-9
<PAGE> 28
ProTech Communications, Inc.
Balance Sheet and Statement of Equity
as of April 30,1996 and April 30, 1995
(unaudited)
<TABLE>
<CAPTION>
Assets FY96 FY95
---- ----
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 693,720 256,092
Accounts Recievable less bad debt allowance
(19,382 in FY96 vs 22,040 in FY95) 140,725 145,484
Deposits being Held 500 500
Inventory (note 2) 98,024 47,794
Total current assets 932,969 449,870
Net property and equipment (note 3) 133,730 72,392
Total Assets $1,066,699 522,262
Liabilities and Stockholders' Equity
Current Liabilities: (note 4)
Accounts Payable 6,664 24,831
Accrued expenses (note 8) 5,363 12,666
Total Current Liabilities 12,027 37,497
Stockholder's Equity: (note 5)
Common Stock, $.001 par value, authorized 10,000,000
shares issued and outstanding 3,964,000 3,964 2,864
Additional Paid in Capital 971,711 360,495
Retained Earnings 43,422 39,327
Current Period Profit (Loss) 35,575 82,063
Total Stockholders' Equity $1,054,672 484,749
Commitments (note 7) ________ ________
Total Liabilities and Equity $1,066,699 522,246
</TABLE>
See accompanying notes to financial statements
F-10
<PAGE> 29
ProTech Communications, Inc.
Statement of Income
For the six months ended April 30, 1996 and 1995.
(unaudited)
<TABLE>
<CAPTION>
FY96 FY95
---- ----
<S> <C> <C>
Net Sales $403,805 408,307
Cost of Goods Sold 162,907 138,435
Gross Profit 240,898 269,871
Selling, general and administrative expenses 196,731 188,754
Income from operations 44,167 81,117
Other income (expense):
Interest income 12,908 0
Interest expense (13,868) (57)
Miscellaneous income (250) 1,003
Income before income taxes 42,957 82,063
Income taxes 7,382 0
Net Income $ 35,575 82,063
</TABLE>
See accompanying notes to financial statements.
F-11
<PAGE> 30
PRO TECH COMMUNICATIONS, INC.
STATEMENT OF STOCKHOLDER'S EQUITY
For the six months ended April 30, 1996
(unaudited)
<TABLE>
<CAPTION>
Additional
Common Paid-in Retained
Stock Capital Earnings Total
----- ------- -------- -----
<S> <C> <C> <C> <C>
Balance, November 1, 1994 $ 2,000 119,485 - 121,485
Issuance of 864,000 shares of 864 396,391 43,422 440,677
common stock (note 5) (net costs
of $32,000) March 3, 1995.
Issuance of 1,100,000 shares of 1,100 455,835 - 456,935
common stock (note 5) (net costs
of $90,050) April 8, 1996.
Net earnings - - 35,575 35,575
------ ------
Balance, April 30, 1996 $ 3.964 971,711 78,997 1,054,672
</TABLE>
See accompanying notes to financial statements
For the six months ended April 30, 1995
(unaudited)
<TABLE>
<CAPTION>
Additional
Common Paid-in Retained
Stock Capital Earnings Total
----- ------- -------- -----
<S> <C> <C> <C> <C>
Balance, November 1, 1994 $ 2,000 119,485 - 121,485
Issuance of 864,000 shares of 864 241,010 39,327 281,201
common stock (note 5) (net costs
of $32,000) March 3, 1995.
Net earnings - - 82,063 82,063
------ ------
Balance, April 30, 1995 $ 2.864 360,495 121,390 484,749
See accompanying notes to financial statements
</TABLE>
F-12
<PAGE> 31
PRO TECH COMMUNICATIONS, INC.
STATEMENT OF CASH FLOWS
For the six months ended April 30,1996 and April 30, 1995
(unaudited)
<TABLE>
<CAPTION>
FY96 FY95
---- ----
<S> <C> <C>
Cash flows from operating activities:
Cash received from sale of merchandise $ 399,994 354,634
Cash paid to vendors and employees (407,182) (384,568)
Interest paid (13,868) (57)
Interest received 12,908 1,003
-------- --------
Net cash used by operating activities (8,148) (28,988)
Cash flows from investing activities:
Purchase of property and equipment (42,092) (29,515)
Proceeds from the sale of property and equipment -0- -0-
-------- --------
Net cash used in investing activities (42,092) (29,515)
Cash flows from financing activities:
Proceeds from notes payable 20,000
Payable to employee (370)
Note payable: GMAC (644)
Principal payments on notes payable (252,113)
Proceeds from issuance of common stock 424,803 256,282
Net cash provided by financing activities 172,690 275,268
Cash and cash equivalents at beginning of period 571,270 39,327
Cash and cash equivalents at end of period $ 693,720 256,092
Reconciliation of net income to net cash used by operating
activities:
Net income $ 35,575 82,063
Adjustments to reconcile net income to net cash used by operating
activities:
Depreciation and amortization 24,062
Allowance for doubtful accounts 6,081
Increase in accounts receivable (14,332) (50,408)
Increase in Inventory (7,963) (23,647)
Decrease in accounts payable (21,875) (31,188)
Increase in accrued expenses (26,470) (2,836)
Increase in other liabilities (3,226) (2,972)
-------- --------
Total adjustments (43,723) (111,051)
Net cash used by operating activities $ (8,148) (28,988)
</TABLE>
See accompanying notes to financial statements
F-13
<PAGE> 32
PROTECH COMMUNICATIONS, INC.
NOTES TO FINANCIAL STATEMENTS
(unaudited)
Combined for April 30,1996 and April 30, 1995
(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(A) BUSINESS
Pro Tech Communications, Inc. (the "Company") was organized and
incorporated under the laws of the State of Florida for the purpose of
designing, developing, producing and marketing lightweight telephone
headsets. The current year market consists of fast-food franchises who
use the headsets in drive-thru services, but the product has potential in
other industries.
On November 1, 1994 all assets and liabilities of Pro Tech Systems
(a limited partnership) were transferred to Pro Tech Communications, Inc.
The former partners of Pro Tech Systems received 2,000,000 shares
of common stock in the Company in exchange for their respective interests
in the limited partnership.
(B) CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments purchased with a
maturity of three months or less to be cash equivalents.
(C) INVENTORY
Inventories are stated at the lower of cost or market. Cost is determined
using the first-in, first-out (FIFO) method.
(D) REVENUE AND COST RECOGNITION
The Company recognizes revenues as products are shipped. New customers
are extended a 30-day trial period during which the product may be
returned. Additionally, each headset carries a two year warranty. The
Company provides, by a current charge to income, an amount it estimates
will be needed to cover future warranty obligations for products sold
during the year. The accrued liability for warranty costs is included in
the caption "accrued expenses" in the balance sheet.
F-14
<PAGE> 33
PRO TECH COMMUNICATIONS, INC.
NOTES TO FINANCIAL STATEMENTS
(unaudited)
(E) PROPERTY AND EQUIPMENT
Property and equipment is carried at cost. Depreciation is computed
using the straight-line method over the estimated useful lives of the
assets which are generally 5-10 years. Repair and maintenance costs are
charged to expense when incurred.
(F) INCOME TAXES
Income Tax calculations have not changed from the previously audited
statements dated October 31, 1995 and the comparable period. Payments
in 1996 have been based on the estimated audited amounts.
Income taxes are calculated in accordance with the provisions of
Statement of Financial Accounting Standards No. 109, "Statement for Income
Taxes". Under the asset and liability method of Statement 109, deferred
income taxes are recognized for the future tax consequences attributable
to differences between the financial statement carrying amounts of
existing assets and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are
expected to be recovered or settled. Under Statement 109, the effect on
deferred taxes of a change in tax rates is recognized in income in the
period that includes the enactment date.
(2) INVENTORY
Inventory at April 30, 1996 vs April 30, 1995 consists of the following:
<TABLE>
<CAPTION>
FY96 FY95
---- ----
<S> <C> <C>
Raw Materials $ 78,829 24,147
Work in Progress 1,000
Finished Goods 18,195 23,647
---------- ------
$ 98,024 47,647
</TABLE>
F-15
<PAGE> 34
PRO TECH COMMUNICATIONS, INC.
NOTES TO FINANCIAL STATEMENTS
(unaudited)
(3) NET PROPERTY AND EQUIPMENT
The following is a summary of property and equipment at April 30, 1996 vs
April 30, 1995:
<TABLE>
<CAPTION>
FY96 FY95
---- ----
<S> <C> <C>
Production molds $ 80,474 40,248
Office equipment 41,266 13,487
Production equipment 22,981 12,787
Leasehold improvements 6,972 12,045
Vehicles 5,268 19,384
Research and development -0- 2,670
Incorporation fees -0- 777
Total Cost 156,961 101,397
Less: accumulated depreciation 23,231 29,006
------- -------
Total $ 133,730 72,392
</TABLE>
(4) LIABILITIES - NOTES PAYABLE
The Company as $ 0 in notes payable as of April 30, 1996.
Listed notes payable below for fiscal year 1995 were paid in full during
the current period.
FY96:
-----
Note payable to GMAC bearing fixed interest at 18.5%; interest and
principal payable in sixty equal monthly installments of $ 143, final
payment was due November 1995; secured by vehicle. Paid in full.
Note payable to Euro Investment Corporation, $250,000., bearing annual
interest at 14.3%, payable on demand, $13,868. Paid in full.
FY95:
-----
Note payable to GMAC bearing fixed interest at 18.5%; interest and
principal payable to sixty equal monthly installments of $143, outstanding
balance $4,831.29.
Note payable to Westek Electronics, Inc. ; $20,000 bearing 0%; payable in
monthly installments. Planned payment in full May 1,1995.
F-16
<PAGE> 35
PRO TECH COMMUNICATIONS, INC
NOTES TO FINANCIAL STATEMENTS
(unaudited)
(5) CAPITAL STOCK
April 8, 1996, the Company underwent a stock offering under Rule 504 of
Regulation D promulgated under the Securities Act of 1933. The offering
sold 1,100,000 shares of common stock at $0.50 per share yielding net cash
proceeds of $424,803.
March 3, 1995, the Company underwent a stock offering under Rule 504 of
Regulation D promulgated under the Securities Act of 1933. The offering
sold 864,000 shares of common stock at $0.50 per share, yielding net cash
proceeds of $396,391.
The Company, in conjunction with the stock offering of March 3, 1995,
issued warrants for 200,000 shares of common stock to the sales agent
responsible for sales outside the United States. As of April 30, 1996, a
summary of the warrants to purchase common stock, currently excercisable,
are as follows:
<TABLE>
<CAPTION>
Expiration Date Shares Exercise Price Per Warrant
--------------- ------ --------------------------
<S> <C> <C>
September 3, 1997 200,000 $0.60
</TABLE>
(6) RESEARCH AND DEVELOPMENT
Research and development costs are expensed when incurred and are
included in selling, general and administrative expenses. The amount
charged to expense during the first six months of fiscal year 1996 was
$9,474 vs $2,670 in the comparable 1995 period.
(7) OPERATING LEASES
The Company leases office and production facilities under operating
leases. Future minimum lease payments for such noncancelable leases as of
April 30, 1996 are as follows:
<TABLE>
<S> <C>
1996 $ 13,928
1997 8,232
1998 1,372
-----
Total $ 23,532
</TABLE>
Rent expensed under lease agreements totaled $8,376 for the first six
months for fiscal year 1996. $5,547 was paid in the comparable 1995
period.
F-17
<PAGE> 36
PRO TECH COMMUNICATIONS, INC.
NOTES TO FINANCIAL STATEMENTS
(unaudited)
(8) INCOME TAXES
There were no income taxes paid for the comparable 1995 period.
Estimated 1996 income taxes consist of the following:
<TABLE>
<S> <C>
Current:
Federal $ 12,180
State 2,005
------
$ 14,185
Actual income taxes paid through April 30, 1996:
Federal $ 6,090
</TABLE>
(9) MAJOR CUSTOMERS
For the first six months of fiscal year 1996, approximately 35% of sales
were to McDonald's Restaurant franchises. With sales now expanded to
new customers sold through distributors to reach a total of 65% of sales.
For the first six months of fiscal year 1995, approximately 60% of sales
were to McDonald's Restaurant franchises.
F-18
<PAGE> 37
PART III
<TABLE>
<CAPTION>
EXHIBITS
<S> <C>
3.1 Articles of Incorporation of the Company, dated October 5,
1994, and the Amendments thereto, dated January 31, 1995.
3.2 By-laws of the Company.
10.1 Employment Agreement, dated December 9, 1994, between the
Company and Keith Larkin.
10.2 Stock Option, dated March 3, 1995, issued by the Company to
Harris McLean Financial Group, Ltd.
10.3 Stock Option, dated November 3, 1994, issued by the Company
to Westek Electronics, Inc.
10.4 The Company's 1996 Stock Option Plan.
10.5 Stock Option, dated April 15, 1996, issued by the Company
to Keith Larkin.
10.6 Stock Option, dated April 15, 1996, issued by the Company
to Kenneth Campbell.
10.7 Stock Option, dated April 15, 1996, issued by the Company
to Richard Hennessey.
10.8 Lease, dated July 20, 1994, between the Company and Sid
Motel.
10.9 Lease, dated November 22, 1995, between the Company and
Sidney Motel.
10.10 Marketing Agreement, dated as of June 26, 1996, between
the Company and Martin Goldberg.
10.11 Stock Purchase Warrant, dated as of June 26, 1996, issued
by the Company to Martin Goldberg.
10.12 Marketing Agreement, dated as of June 26, 1996, between the
Company and Costas Takkas.
10.13 Stock Purchase Warrant, dated as of June 26, 1996, issued
by the Company to Costas Takkas.
10.14 Marketing Agreement, dated as of June 26, 1996, between the
Company and Don Fraser.
10.15 Stock Purchase Warrant, dated as of June 26, 1996, issued
by the Company to Don Fraser.
</TABLE>
<PAGE> 38
SIGNATURE
In accordance with Section 12 of the Securities Exchange Act of
1934, the Registrant caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized.
PRO TECH COMMUNICATIONS, INC.
Dated: July 3, 1996 By: /s/ Keith Larkin
--------------------------
Keith Larkin
President and Chairman of the Board
<PAGE> 1
EXHIBIT 3.1
ARTICLES OF INCORPORATION
ARTICLE I - NAME
The name of this corporation is Pro Tech Communications, Inc.
ARTICLE II - PRINCIPAL OFFICE
The mailing address of this corporation shall be:
3311 Industrial 25th St.
Fort Pierce, Florida 34946
ARTICLE III - PURPOSE
This corporation is organized for the purpose of transacting any or all
lawful business.
ARTICLE IV - CAPITAL STOCK
This corporation is authorized to issue 10,000,000 shares of $.50 par
value common stock which shall be designated as "Common Shares".
ARTICLE V - INITIAL REGISTERED OFFICE AND AGENT
The street address of the initial registered office of this corporation
is 3732 N.W. 16th Street, Fort Lauderdale, Florida 33311 and the name of the
initial registered agent of this corporation at that address is Filings, Inc.,
a Florida corporation.
ARTICLE VI - INITIAL BOARD OF DIRECTORS
The Corporation shall initially have one (1) director to hold office
until the first annual meeting of stockholders and his successor shall have
been duly elected
1
<PAGE> 2
and qualified, or until his earlier resignation, removal from office or death.
The number of Directors may be either increased or decreased from time to time
in accordance with the By-laws of the Corporation. The name and address of the
initial Director is:
Keith Larkin
3311 Industrial 25th St.
Fort Pierce, Florida 34946
ARTICLE VII - INCORPORATOR
The name and address of the Incorporator signing these Articles is:
Benigno Roman
Vice-President Filings, Inc., a Florida corporation
3732 N.W. 16th Street, Fort Lauderdale, Florida 33311
ARTICLE VIII - PRE-EMPTIVE RIGHTS
Every shareholder, upon the sale for cash of any new stock of this
corporation shall have the right to purchase his prorata share thereof (as
nearly as may be done without issuance of fractional shares) at the price at
which it is offered to others.
ARTICLE IX - INDEMNIFICATION
The corporation shall indemnify any Officer or Director, or any former
Officer or Director, to the full extent permitted by law.
ARTICLE X - AMENDMENT
This corporation reserves the right to amend or repeal any provision
contained in these Articles of Incorporation, or any amendment hereto, and any
right conferred upon the shareholders is subject to this reservation.
2
<PAGE> 3
IN WITNESS WHEREOF, the undersigned Incorporator has executed these
Articles of Incorporation on the date of signing.
Dated: October 5, 1994
Filings, Inc.
by Benigno Roman, Vice-President
/s/ Benigno Roman
-------------------------
Incorporator
3
<PAGE> 4
Certificate designating place of business or domicle for the service of
process within Florida, naming agent upon whom process may be served.
In compliance with Section 607.0501, Florida Statutes, the following is
submitted:
First that Pro Tech Communciations, Inc. desiring to organize or
qualify under the laws of the State of Florida, has named Filings, Inc., a
Florida corporation, located at 3732 N.W. 16th Street, Fort Lauderdale,
Florida, as its agent to accept service of process within Florida.
Dated: October 5, 1994
/s/ Benigno Roman
--------------------------------
Benigno Roman, Incorporator
Having been named to accept service of process for the above stated
Corporation, at the place designated in this certificate, I hereby agree to act
in this capacity. I further agree to comply with the provisions of all
Statutes relative to the proper and complete performance of my duties, and I am
familiar with and accept the obligations of my position as registered agent.
Dated: October 5, 1994
Filings, Inc.
by Benigno Roman, Vice-President
/s/ Benigno Roman
--------------------------------
4
<PAGE> 5
ASSIGNMENT OF INCORPORATOR'S SUBSCRIPTION
I, Leslie Heyman, President of Filings, Inc., sole Subscriber to the
Articles of Incorporation of Pro Tech Communcations, Inc., hereby assign all my
right, title and interest as Subscriber to the Capital Stock of Pro Tech
Communications, Inc. to Keith Larkin, to the extent of the total shares
presently authorized or as may be authorized by amendment in the future.
Dated: 10/07/94
Filings, Inc.
/s/ Leslie Heyman
-------------------------------
By Leslie Heyman, President
<PAGE> 6
CERTIFICATE DESIGNATING CHANGE
OF
REGISTERED AGENT
In compliance with section 607.0501, Florida Statutues, the following
is submitted:
1) Name of the Corporation is Pro Tech Communications,
Inc.
2) Street address of the Registered Office 3732 N.W.
16th Street, Fort Lauderdale, Florida 33311
3) Name of the current Registered Agent is Filings,
Inc.
4) Name of the successor Registered Agent is
Keith Larkin.
5) Street address of the new Registered Office is
3311 Industrial 25th Street, Ft. Pierce FL 32946.
6) Such change of Registered Agent and Registered
Office was authorized by an Officer of the
Corporation, so authorized by the Board of Directors.
Signature
-----------------------
Title President
----------------------
Date
-----------------------
Having been named to accept service of process for the
above named Corporation, at the place designated in this
certificate, I hereby agree to act in this capacity, and I
further agree to comply with the provisions of all Statues
relative to the proper and complete performance of my
duties.
Date: 10/07/94 Signature
--------------------- --------------------
<PAGE> 7
A true copy of each of the following papers referred to in the
foregoing minutes is appended hereto.
Waiver of Notice of Meeting
Articles of Incorporation
Receipt from Secretary of State
Resolution Designating Depository of Funds
Specimen Certificate for Shares
Stockholder List
IRC. Sec. 1244 Plan
By-laws
<PAGE> 8
STATE OF FLORIDA
[LOGO]
DEPARTMENT OF STATE
I certify the attached is a true and correct copy of the Articles of Amendment
filed on January 31, 1995, to Articles of Incorporation for PRO TECH
COMMUNICATIONS, INC. a Florida corporation, as shown by the records of this
office.
The document number of this corporation is P94000073077.
GIVEN UNDER MY HAND AND THE
GREAT SEAL OF THE STATE OF FLORIDA,
AT TALLAHASSEE, THE CAPITAL, THIS THE
THIRTY-FIRST DAY OF January, 1995
[SEAL]
/s/ Sandra B. Mortham
-----------------------------------
Sandra B. Mortham
Secretary of State
<PAGE> 9
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
PRO TECH COMMUNICATIONS, INC.
1. The name of the Corporation is PRO TECH COMMUNICATIONS, INC. (the
"Company").
2. Article IV of the Articles of Incorporation of the Company is hereby
amended to read as follows:
ARTICLE IV - CAPITAL STOCK
This corporation is authorized to issue
10,000,000 shares of common stock, par value
$.001 per share, which shall be designated as
"Common Stock".
3. Article VIII of the Articles of Incorporation of the Company with
respect to pre-emptive rights is hereby deleted in its entirety.
4. The amendment set forth in paragraph 2 hereof was duly approved by the
Company's Board of Directors as of October 29, 1994 and without shareholder
action, such shareholder action not being required by the Florida Business
Corporation Act.
5. The amendment set forth in paragraph 3 hereof was duly approved by the
Company's shareholder as of November 8, 1994 in accordance with the provisions
of the Florida Business Corporation Act.
IN WITNESS WHEREOF, the undersigned has executed these Articles of
Amendment this 26th day of January, 1995.
/s/ KEITH LARKIN
-------------------------------------
Keith Larkin
President and Chairman of the Board
<PAGE> 1
EXHIBIT 3.2
BY-LAWS
of
Pro Tech Communications, Inc.
Incorporated under the laws of the State of Florida
<PAGE> 2
ARTICLE I
OFFICES
The principal offices of the corporation shall be established and
maintained at 3311 Industrial 25th Street, Fort Pierce FL 34946. The
corporation may also have offices at such places within or without the State
of Florida as the Board of Directors may from time to time establish.
ARTICLE II
STOCKHOLDERS
1. PLACE OF MEETINGS
Meetings of stockholders shall be held at the principal office of the
corporation or at such place within or without the state of Florida as the
Board of Directors shall authorize.
2. ANNUAL MEETING
The annual meeting of stockholders shall be held annually on April 15, at
9:00 a.m.; however, if such day falls on a Sunday or legal holiday, then on the
next business day following at the same time, the stockholders shall elect a
Board of Directors and transact such other business as may properly come before
the meeting.
3. SPECIAL MEETINGS
Special meetings of the stockholders may be called by the Board of
Directors or by the President or at the written request of stockholders owning
a majority of the stock entitled to vote at such meeting. A meeting requested
by stockholders shall be called for a date not less than ten nor more than
sixty days after the request is made. The Secretary shall issue the call for
the meeting unless the President, the Board of Directors or the stockholders
shall designate another to make said call.
4. NOTICE OF MEETINGS
Written notice of each meeting of stockholders shall state the purpose of
the meeting and the time and place of the meeting. Notice shall be mailed to
each stockholder having the right and entitled to vote at such meeting at his
last address as it appears on the records of the corporation, not less than ten
nor more than sixty days before the date for such meeting. Such notice shall
be sufficient for the meeting and any adjournment thereof. If any stockholder
shall transfer his stock after notice, it shall not be necessary to notify the
transferee. Any stockholder may waive notice of any meeting either before,
during or after the meeting.
5. RECORD DATE
The Board of Directors may fix a record date not more than sixty days
prior to the date set for a meeting of stockholders as the date as of which the
stockholders of record who have the right to and are entitled to notice of and
to vote at such meeting and any adjournment thereof, shall be determined.
Notice that such date has been fixed, shall be deemed to be delivered when
deposited in the United States mail, with postage thereon prepaid, and
addressed to the shareholder at his address as it appears on the stock transfer
books of the corporation.
1
<PAGE> 3
6. VOTING
Every shareholder shall be entitled at each meeting and upon each proposal
presented at each meeting to one vote for each share of voting stock recorded
in his name on the books of the corporation on the record date as fixed by the
Board of Directors and if no record date was fixed, on the date of the meeting.
The books of records of stockholders shall be produced at the meeting upon the
request of any stockholder. Upon the demand of any Stockholder, the vote for
the Directors and the vote upon any question before the meeting shall be by
ballot. All elections for Directors shall be decided by plurality vote; all
other questions shall be decided by majority vote.
7. QUORUM
The presence, in person or by proxy, of stockholders holding a majority of
the stock of the corporation entitled to vote shall constitute a quorum at all
meetings of the stockholders. In case a quorum shall not be present at any
meeting, a majority in interest of the stockholders entitled to vote thereat,
present in person or by proxy, shall have power to adjourn the meeting from
time to time, without notice other than announcement at the meeting, until the
requisite amount of stock entitled to vote shall be represented, any business
may be transacted which might have been transacted at the meeting as originally
noticed; but only those stockholders entitled to vote at the meeting as
originally noticed shall be entitled to vote at any adjournment or
adjournments thereof.
8. PROXIES
At any stockholders meeting or any adjournment thereof, any stockholder
of record having the right and entitled to vote thereat may be represented and
vote by proxy appointed in a written instrument. No such proxy shall be voted
after three years from the date of the instrument unless the instrument
provides for a longer period. In the event that any such instrument provides
for two or more persons to act as proxies, a majority of such persons present
at the meeting, or if only one be present, that one, shall have all the powers
conferred by the instrument upon all the persons so designated unless the
instrument shall otherwise provide.
9. STOCKHOLDER LIST
After fixing a record date for a meeting, the corporation shall prepare an
alphabetical list of the names of all its shareholders who are entitled to
notice of a shareholder meeting. Such list shall be arranged by voting group
with the names and addresses of, the number and class of shares, and series if
any, of the shares held by each stockholder. This list shall be available for
inspection by any shareholder for a period of ten days prior to the meeting.
ARTICLE III
DIRECTORS
1. BOARD OF DIRECTORS
The business of the corporation shall be managed and its corporate powers
exercised by a board of Directors, each of whom shall be of full age. It shall
not be necessary for Directors to be stockholders.
2. ELECTION AND TERM OF DIRECTORS
Directors shall be elected at the annual meeting of stockholders and each
Director elected shall hold office until his successor has been elected and
qualified, or until his prior resigna-
2
<PAGE> 4
tion or removal.
3. VACANCIES
If the office of any Director, member of a committee or other officer
becomes vacant, the remaining Directors in office, by a majority vote, may
appoint any qualified person to fill such vacancy, who shall hold office for
the unexpired term and until his successor shall be duly chosen.
4. REMOVAL OF DIRECTORS
Any or all of the Directors may be removed without cause by vote of a
majority of all the stock outstanding and entitled to vote at a special
meeting of stockholders called for that purpose.
5. NEWLY CREATED DIRECTORSHIPS
The number of Directors may be increased by amendment of these by-laws by
the affirmative vote of a majority of the Directors, though less than a quorum,
or, by the affirmative vote of a majority in interest of the stockholders, at
the annual meeting or at a special meeting called for that purpose, and by like
vote the additional Directors may be chosen at such meeting to hold office
until the next annual election and their successors are elected and qualify.
6. RESIGNATION
A Director may resign at any time by giving written notice to the Board of
Directors, the President or the Secretary of the corporation. Unless otherwise
specified in the notice, the resignation shall take effect upon receipt thereof
by the Board of Directors or such officer, and the acceptance of the
resignation shall not be necessary to make it effective.
7. QUORUM OF DIRECTORS
A majority of the Directors shall constitute a quorum for the transaction
of business. If at any meeting of the Board of Directors there shall be less
than a quorum present, a majority of those present may adjourn the meeting from
time to time until a quorum is obtained, and no further notice thereof need be
given other than by announcement at the meeting which shall be so adjourned.
8. PLACE AND TIME OF BOARD MEETINGS
The Board of Directors may hold its meetings at the office of the
corporation or at such other places, either within or without the State of
Florida as it may from time to time determine.
9. REGULAR ANNUAL MEETINGS
A regular annual meeting of the Board of Directors shall be held
immediately following the annual meeting of stockholders at the place of such
annual meeting of stockholders.
10. NOTICE OF MEETINGS OF THE BOARD OF DIRECTORS
Regular meetings of the Board of Directors may be held without notice at
such time and place as it shall from time to time determine. Special meetings
of the Board of Directors shall be held upon notice to the Directors and may be
called by the President upon three days notice
4
<PAGE> 5
to each Director either personally or by mail or by wire; special meetings
shall be called by the President or by the Secretary in a like manner on
written request of one Director. Notice of a meeting need not be given to any
Director who submits a waiver of notice whether before or after the meeting or
who attends the meeting without protesting prior thereto or at its
commencement, the lack of notice to him.
11. EXECUTIVE AND OTHER COMMITTEES
The Board of Directors, by resolution, may designate two or more of their
number to one or more committees, which, to the extent provided in said
resolution or these by-laws may exercise the powers of the Board of Directors
in the management of the business of the corporation.
12. COMPENSATION
No compensation shall be paid to Directors, as such, for their services,
but by resolution of the Board of Directors, a fixed sum and expenses for
actual attendance at each regular or special meeting of the Board of Directors
may be authorized. Nothing herein contained shall be construed to preclude any
Director from serving the corporation in any other capacity and receiving
compensation.
ARTICLE IV
OFFICERS
1. OFFICES, ELECTION AND TERM
a) The Board of Directors may elect or appoint a chairman, a President,
one or more Vice-Presidents, a Secretary and a Treasurer, and such other
officers as it may determine, who have such duties and powers as hereinafter
provided.
b) All officers shall be elected or appointed to hold office until the
meeting of the Board of Directors following the next annual meeting of
stockholders and until their successors have been elected or appointed and
qualified.
2. REMOVAL, RESIGNATION, SALARY, ETC.
a) Any officer elected or appointed by the Board of Directors may be
removed by the Board of Directors with or without cause.
b) In the event of the death, resignation or removal of an officer, the
Board of Directors in its discretion may elect or appoint a successor to fill
the unexpired term.
c) Any two or more offices may be held by the same person.
d) The salaries of all officers shall be fixed by the Board of
Directors.
e) The Directors may require any officer to give security for the faithful
performance of his duties.
3. CHAIRMAN
The chairman of the Board of Directors, if one be elected, shall preside
at all meetings of the Board of Directors and he shall have and perform such
other duties as from time to time may be assigned to him by the Board of
Directors or the executive committee.
5
<PAGE> 6
4. PRESIDENT
The President shall be the chief executive officer of the corporation and
shall have the general powers and duties of supervision and management usually
vested in the office of the President of the corporation. He shall preside at
all the meetings of the stockholders if present thereat, and in the absence or
non-election of the chairman of the Board of Directors, at all meetings of the
Board of Directors, and shall have general supervision, direction and control
of the business of the corporation. Except as the Board of Directors shall
authorize the execution thereof in some other manner, he shall execute bonds,
mortgages and other contracts in behalf of the corporation, and shall cause the
seal to be affixed to any instrument requiring it and when so affixed, the seal
shall be attested by the signature of the Secretary or the Treasurer or an
Assistant Secretary or an Assistant Treasurer.
5. VICE-PRESIDENT
During the absence or disability of the President, the Vice-President, or
if there are more than one, the Executive Vice-President, shall have all the
powers and functions of the President. Each Vice-President shall perform such
other duties as the Board of Directors shall prescribe.
6. SECRETARY
The Secretary shall attend meetings of the Board of Directors and of the
stockholders, record all votes and minutes of all proceedings in a book to be
kept for that purpose, give or cause to be given notice of all meetings of
stockholders and of special meetings of the Board of Directors, keep in safe
custody the seal of the corporation and affix to any instrument when authorized
by the Board of Directors, when required prepare or cause to be prepared and
available at each meeting of stockholders a certified list in alphabetical
order of the names of stockholders entitled to vote thereat, indicating the
number of shares of each respective class held by each, keep all the documents
and records of the corporation as required by law or otherwise in a proper and
safe manner, and perform such other duties as may be prescribed by the Board of
Directors, or assigned to him by the President.
7. ASSISTANT-SECRETARIES
During the absence or disability of the Secretary, the Assistant-Secretary
or if there are more than one, the one so designated by the Secretary or by
the Board of Directors, shall all have the powers and functions of the
Secretary.
8. TREASURER
The Treasurer shall have custody of the corporate funds and securities,
shall keep full and accurate accounts of receipts and disbursements in the
corporate books, shall deposit all money and other valuables in the name and to
the credit of the corporation in such depositories as may be designated by the
Board of Directors, shall disburse funds of the corporation as may be ordered
or authorized by the Board of Directors. The Treasurer shall preserve proper
vouchers for such disbursements, render to the President and Board of Directors
at regular meetings of the Board of Directors reports of the financial
condition of the corporation and render a full financial report at the annual
meetings of the Stockholders if so requested. The Treasurer may request and
shall be furnished by all corporate officers and agents with such reports and
statements as he may require as to all fmancial transactions of the
corporation, and shall perform such other duties as are given him by these
by-laws or as from time to time are assigned to him by the Board of Directors
or the President.
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9. ASSISTANT-TREASURER
During the absence or disability of the Treasurer, the
Assistant-Treasurer, or if there are more than one, the one so designated by the
Secretary or by the Board of Directors, shall all have the powers and functions
of the Treasurer.
10. SURETIES AND BONDS
In case the Board of Directors shall so require, any officer or agent of
the corporation shall execute to the corporation a bond in such sum and with
such surety or sureties as the Board of Directors may direct, conditioned upon
the faithful performance of his duties to the corporation and including
responsibility for negligence and for the accounting for all property, funds or
securities of the corporation which may come into his hands.
ARTICLE V
CERTIFICATES FOR SHARES
1. CERTIFICATES
The shares of the corporation shall be represented by certificates. They
shall be numbered and entered on the books of the corporation as they are
issued. They shall exhibit the holder's name and the number of shares and
shall be signed by the President or a Vice-President and the Treasurer or the
Secretary and shall bear the corporate seal. When such certificates are signed
by a transfer agent or an assistant transfer agent or by a transfer clerk
acting on behalf of the corporation and a registrar, the signatures of such
officers may be facsimiles.
2. LOST OR DESTROYED CERTIFICATES
The Board of Directors may direct a new certificate or certificates to be
issued in place of any certificate or certificates theretofore issued by the
corporation, alleged to have been lost or destroyed, upon making of an
affidavit of that fact by the person claiming the certificate to be lost or
destroyed. When authorizing such issue of a new certificate or certificates,
the Board of Directors may, in its discretion and as a condition precedent to
issuance thereof, require the owner of such lost or destroyed certificate or
certificates, or his legal representative to advertise the same in such manner
as it shall require and/or give the corporation a bond in such sum and with
such surety or sureties as it may direct as indemnity against any claim that
may be made against the corporation with respect to the certificate alleged to
have been lost or destroyed.
3. TRANSFER OF SHARES
Upon surrender to the corporation or the transfer agent of the
corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, it shall be the
duty of the corporation to issue a new certificate to the person entitled
thereto, and cancel the old certificate; every such transfer shall be entered
on the transfer book of the corporation which shall be kept at its principal
office. Whenever a transfer shall be made for collateral security, and not
absolutely, it shall be so expressed in the entry of the transfer. No transfer
shall be made within ten days next preceding the annual meeting of stockholders.
4. CLOSING TRANSFER BOOKS
The Board of Directors shall have the power to close the share transfer
books of the
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corporation for a period of not more than ten days during the thirty day period
immediately preceding (a) any stockholders' meeting, or (b) any date upon which
stockholders shall be called upon to have a right to take action without a
meeting, or (c) any date for the payment of a dividend or any other form of
distribution, and only those stockholders of record at the time the transfer
books are closed, shall be recognized as such for the purpose of (a) receiving
notice of or voting at such meeting, or (b) allowing them to take appropriate
action, or (c) entitling them to receive any dividend or other form of
distribution.
ARTICLE VI
DIVIDENDS
The Board of Directors may out of funds legally available, at any regular
or special meeting, declare dividends upon the capital stock of the corporation
as and when it deems expedient. Before declaring any dividend there may be set
apart out of any funds of the corporation available for dividends, such sum or
sums as the Board of Directors from time to time in their discretion deem
proper for working capital or as a reserve fund to meet contingencies or for
equalizing dividends or for such other purposes as the Board of Directors shall
deem conducive to the interests of the corporation.
ARTICLE VII
CORPORATE SEAL
The seal of the corporation shall be circular in form and bear the name of
the corporation, the year of its origination and the words "Corporate Seal,
Florida." The seal may be used by causing it to be impressed directly on the
instrument or writing to be sealed, or upon adhesive substance affixed hereto.
The seal on the certificates for shares or on any corporate obligation for the
payment of money may be facsimile, engraved or printed.
ARTICLE VIII
EXECUTION OF INSTRUMENTS
All corporate instruments and documents shall be signed or counter-signed,
executed, verified or acknowledged by such officer or officers or other person
or persons as the Board of Directors may from time to time designate.
All checks, drafts or other orders for the payment of money, notes or
other evidences of indebtedness issued in the name of the corporation shall be
signed by such officer or officers, agent or agents of the corporation, and in
such manner as shall be determined from time to time by resolution of the Board
of Directors.
ARTICLE IX
FISCAL YEAR
The fiscal year shall begin on January 1 each year.
ARTICLE X
NOTICE AND WAIVER OF NOTICE
Whenever any notice is required by these by-laws to be given, personal
notice is not meant unless expressly so stated, and any notice so required
shall be deemed to be sufficient if
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given by depositing the same in a post office box in a seal post-paid wrapper,
addressed to the person entitled thereto at his last known post office
address, and such notice shall be deemed to have been given on the day of such
mailing. Stockholders not entitled to vote shall not be entitled to receive
notice of any meetings except as otherwise provided by statute.
Whenever any notice whatever is required to be given under the provisions
of any law, or under the provisions of the certificate of incorporation of the
corporation or by these bylaws, a waiver thereof in writing, signed by the
person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent thereto.
ARTICLE XI
CONSTRUCTION
Whenever a conflict arises between the language of these by-laws and the
certificate of incorporation, the certificate of incorporation shall govern.
ARTICLE XII
CLOSE CORPORATION
(Conduct of Business Without Meetings)
Any action of stockholders, Directors or committee may be taken without a
meeting if consent in writing, setting forth the action so taken, shall be
signed by all persons who would be entitled to vote on such action at a meeting
and filed with the Secretary of the corporation as part of the proceedings of
the stockholders, Directors or committees as the case may be.
ARRICLE XIII
AMENDMENTS
These by-laws may be altered or repealed and by-laws may be made at any
annual meeting of the stockholders or at any special meeting thereof if notice
of the proposed alteration or repeal to be made is contained in the notice of
such special meeting, by affirmative vote of a majority of the stock issued and
outstanding and entitled to vote thereat, or by the affirmative vote of a
majority of the Board of Directors at any regular meeting of the Board of
Directors or at any special meeting of the Board of Directors if notice of
the proposed alteration or repeal to be made, be contained in the notice of
such special meeting.
ARTICLE XIV
EMERGENCY BY-LAWS
1. CONDUCT OF BUSINESS WITHOUT MEETINGS
Pursuant to Florida Statue 607.0207 the corporation adopts the following
by-laws, which shall be effective only if a quorum of the Directors of the
corporation cannot be readily assembled because of some catastrophic event.
2. CALLING A MEETING
In the event of such catastrophic event, any member of the Board of
Directors shall be authorized to call a meeting of the Board of Directors.
Such member calling an emergency meeting shall use any means of communication
at their disposal to notify all other members of
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the Board of such meeting.
3. QUORUM
Any one member of the Board of Directors shall constitute a quorum of
the Board of Directors. The members of the Board of Directors meeting during
such an emergency, may select any person or persons as additional Board
members, or officers or agents of the corporation.
4. INDEMNIFICATION
The members of such emergency Board of Directors are authorized to utilize
any means at their disposal to preserve and protect the assets of the
corporation. Any action taken in good faith and acted upon in accordance with
these by-laws shall bind the corporation; and the corporation shall hold
harmless any Director, officer, employee or agent who undertakes an action
pursuant to these by-laws.
5. TERMINATION OF EMERGENCY BY-LAWS
These emergency by-laws shall not be effective at the end of the
emergency period.
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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into on the 9th day of December 1994
between PRO TECH COMMUNICATIONS, INC., a Florida corporation ("Corporation"),
and KEITH LARKIN ("Employee").
NOW, THEREFORE, the parties hereto agree as follows:
1. Term. The term of this Agreement shall commence as
of the date first above written, and unless sooner terminated hereunder, shall
terminate five (5) years after the date first above written.
2. Title. Employee shall serve as the President and
Treasurer, or in any other position consistent with Employee's status to which
he may hereafter be elected or appointed during the term of this Agreement.
3. Compensation. For all services rendered by Employee
to Corporation hereunder during the first twelve (12) months of this Agreement,
Employee shall receive an annual salary of $90,000. Such annual salary shall
be increased each year after the initial twelve-month period of this Agreement
by an amount, determined in the sole discretion of the Board of Directors of
the Corporation, of not less than the percentage increase in the United States
Consumer Price Index published by the Bureau of Labor Statistics, United States
Department of Labor. The salary shall be paid in equal bi-weekly installments
or any other payment mode in which Corporation pays its executive officers.
4. Duties. During the term of this Agreement, Employee
shall serve under the direction and control of Corporation's Board of
Directors. Employee's duties shall include, without limitation, the
supervision, management and control of all of the daily operations of
Corporation. Employee shall devote all of his time, energy and skills to the
faithful and diligent performance of his duties.
5. Expenses. During the term of this Agreement,
Corporation shall allow Employee reasonable travel, entertainment and other
expenses incurred by Employee in furtherance of the business of Corporation.
Corporation shall reimburse Employee for any such expenses paid by him subject
to the rules adopted by Corporation for handling such reimbursements.
6. Employee Benefits. Employee shall be entitled to
participate in any and all fringe benefit plans or programs, including, but not
limited to, insurance, and deferred compensation plans, maintained by
Corporation for the benefit of all executives of Corporation.
<PAGE> 2
7. Confidential Data. Employee agrees while employed by
Corporation and thereafter for a period of three years not, directly or
indirectly, to disclose or use to the detriment of the Corporation or for the
benefit of any other person or firm any confidential information or trade
secrets which are not readily available in the public domain (including, but
not limited to, the identity and particular needs of any customer of the
Corporation, the methods and techniques of any of the businesses of the
Corporation, the marketing plans and objectives of the Corporation, the
intellectual property rights of any product of the Corporation) belonging to
the Corporation, unless Employee has first obtained the express written consent
of Corporation. Employee shall deliver promptly to Corporation upon
termination of employment, or at any time Corporation may so request, all
memoranda, notes, records, reports, manuals, drawings, blueprints, formulas,
and other documents (and all copies thereof) relating to the business of
Corporation and all property associated therewith, then possessed or under the
control of the Employee. In the event of a breach or threatened breach by
Employee of the provisions of this paragraph 7, Corporation shall be entitled
to an injunction restraining Employee from disclosing, in whole or in part,
such information, or from rendering any services to any person, firm,
corporation, association or other entity to whom such information, in whole or
in part, has been disclosed or is threatened to be disclosed. Nothing
contained herein shall be construed as prohibiting Corporation from pursuing
any other remedies available to Corporation for such breach or threatened
breach, including recovery of damages from Employee. This paragraph 7 shall
survive the termination of this Agreement.
8. Discoveries and Inventions. Employee hereby assigns,
without further consideration, to Corporation, all of his rights, title and
interest in and to any and all inventions, discoveries, developments,
improvements, processes, trade secrets, trademark, copyright and patent rights
in the United States and elsewhere, techniques, designs, data and all other
work product, whether tangible or intangible, which: (i) Employee has
conceived, reduced to practice or otherwise created, either alone or jointly
with others, at any time during the five (5) years prior to the commencement of
the term of this Agreement, including, without limitation, all such inventions
with respect to lightweight telephone headsets, including, without limitation,
all such inventions with respect to Corporation's "Pro Com" and "Trinity"
models; and (ii) Employee conceives, reduces to practice, or otherwise creates,
either alone or jointly with others, during the term of Employee's employment
with Corporation. Employee shall perform all acts reasonably required by
Corporation to enable Corporation to learn of, develop and protect the rights
it receives hereunder, including, but not limited to, making full and immediate
disclosure to Corporation and assisting in the preparation and execution of all
documents required to acquire and convey to Corporation those items listed in
this paragraph 8 hereof and patent, copyright and trademark protection in the
United States and elsewhere, all at no cost to Employee.
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9. Non-Competition.
a. Employee covenants and agrees that, while in
the employment of Corporation and for three (3) years after the termination of
this Agreement, Employee shall not, for his own account or either as agent,
consultant, servant or employee, or as a shareholder of any corporation or
member of any firm, own, manage, operate, join, control, or participate in the
ownership, management, operation or control of any individual, or that division
or part of any entity or business that is a competitor of Corporation.
b. In the event of an actual or threatened
breach by Employee of any of the provisions in paragraph 9a. hereof,
Corporation shall be entitled to an injunction restraining Employee from the
prohibited conduct without the necessity of establishing irreparable injury to
Corporation unless required under Florida law. If a court of competent
jurisdiction should hold that the duration and/or scope (geographic or
otherwise) of the covenants contained in paragraph 9a. hereof are in violation
of Florida law, then, to the extent permitted by Florida law, the court shall
enforce all such covenants (geographic and otherwise) to the fullest extent
permitted under Florida law and the parties hereto agree to be bound by same,
subject to their rights of appeal. Nothing herein stated shall be construed as
prohibiting Corporation from pursuing any other remedies available to it for
such breach or threatened breach, including the recovery of damages from
Employee. In any action or proceeding to enforce the provisions of this
paragraph 9, or seeking damages for breach or threatened breach of this
paragraph 9, the prevailing party shall be reimbursed by the other party for
all costs incurred in such action or proceeding including, without limitation,
all court costs and filing fees, and all reasonable attorneys' fees, incurred
either at the trial level or at all appellate levels. Such reimbursement, if
any, shall be paid within thirty (30) calendar days after the rendition of a
final non-appealable order in such action or proceeding.
c. The existence of any claim or cause of action
by Employee against Corporation, which does not relate to this Agreement, shall
not constitute a defense to the enforcement by Corporation of the foregoing
restrictive covenant.
d. In the event Corporation obtains an injunction against
Employee arising from Employee's violation of any of the covenants set forth in
this paragraph 9, then all of the terms of and covenants in this paragraph 9
shall automatically be extended for a period of one (1) year, with such
extension period commencing, without Order of Court or any writing or other
action by the parties hereto, on the date that a final, non-appealable
injunction Order is entered against Employee in any such action or proceeding
to enforce the provisions of this paragraph.
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10. Termination. This Agreement may be terminated prior
to the term provided for by paragraph 1 hereof upon the occurrence of any of
the following events:
a. Immediately, upon written notice by
Corporation that Employee has committed an event for "cause" under paragraphs
11(a), (b), (c), (e) or (h) hereof;
b. Thirty (30) days after Corporation's notice
to Employee that he has committed an event for "cause" under paragraphs 11(d),
(f) or (g), and Employee has failed to cure any such specified violation to the
reasonable satisfaction of Corporation;
c. Upon Employee's death;
d. Upon Corporation's dissolution; or
e. At any time by written agreement of the parties.
11. Definition of "Cause". As used in this Agreement,
the term "cause" shall mean any of the following events:
a. Employee's commission of any act constituting
embezzlement, theft or misappropriation of Corporation's funds;
b. Employee's acceptance of kickbacks, bribery
or any other "off-the-books" payment which relate directly or indirectly to
Corporation's business;
c. Employee's violation of paragraph 7 above;
d. Employee's violation of paragraph 8 above;
e. Employee's violation of paragraph 9 above;
f. Employee's gross negligence or gross
malfeasance in the performance of his duties hereunder;
g. Any material breach by Employee of the terms
of this Agreement;
h. Employee's termination ofhis employment with
Corporation without the prior written consent of Corporation, except that
this subparagraph (h) shall
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not include a termination by employee of his employment with Corporation, after
thirty (30) days written notice thereof, in the event of the nonpayment by
Corporation to Employee of amounts due Employee hereunder pursuant to the terms
hereof or during said additional thirty (30) day period or other material
breach of this Agreement by Corporation.
12. Notices. All notices required to be given hereunder
shall be in writing, sent certified mail, return receipt requested, postage
prepaid to the following addresses:
If to Employee, then to:
Keith Larkin
c/o Pro Tech Communications, Inc.
3311 Industrial 25th Street
Fort Pierce, Florida 34946
If to Corporation, then to:
Chairman of the Board of Directors
Pro Tech Communications, Inc.
3311 Industrial 25th Street
Fort Pierce, Florida 34946
13. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Florida.
14. Remedies and Waivers. If a party is in breach of any
provision of this Agreement, the non-breaching party shall be entitled to
pursue all remedies available to the non-breaching party for such breach,
including, but not limited to, the recovery of damages and injunctive relief.
The waiver by either party hereto of any breach of any provision of this
Agreement shall not operate or be construed as a waiver of any subsequent
breach by either party hereto.
15. Binding Effect and Assignment. This Agreement shall
be binding upon the parties, their heirs, personal representatives, successors
and assigns. This Agreement is personal as to Employee and may not be assigned
by Employee. This Agreement may be assigned by Corporation without the prior
consent of Employee, provided, however, that: (a) the assignee shall agree in
writing to fulfill Corporation's obligations to Employee hereunder, and (b)
such an assignment shall not release Corporation from its obligations
hereunder, unless agreed to in writing by Employee.
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16. Severability. None of the provisions of this
Agreement depend on the validity of any other provision and the invalidity,
illegality or unenforceability, in whole or in part, of any provision shall not
affect any other provision herein contained.
17. Entire Understanding. This Agreement contains the
entire understanding of the parties relating to the employment of the Employee
by Corporation. It may not be changed orally but only by agreement in writing
signed by the party against whom enforcement of any waiver, change,
modification, extension or discharge is sought.
18. Headings. The headings contained herein are for
reference purposes only and shall be without substantive meaning.
19. Counterparts. This Agreement may be executed in
identical counterparts, each of which shall be deemed an original, and such
counterparts, taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement
on the date first above written.
In the presence of:
PRO TECH COMMUNICATIONS, INC.
By:/s/Keith Larkin
- -------------------------------- ---------------------------------
/s/Kenneth Campbell /s/Keith Larkin
- -------------------------------- ---------------------------------
Kenneth Campbell Keith Larkin
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EXHIBIT 10.2
FT. PIERCE, FLORIDA
GRANTED: MAY 3, 1995
THIS OPTION EXPIRES IF NOT EXERCISED ON OR BEFORE
5:00 P.M., MIAMI TIME, MAY 2, 1997
OPTION
To Purchase 200,000 Shares of Common Stock
par value $.001 per share
of
PRO TECH COMMUNICATIONS, INC.
THIS OPTION AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE HEREOF
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR
UNDER ANY STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS
OR AN OPINION SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.
THIS IS TO CERTIFY that HARRIS MCLEAN FINANCIAL GROUP LTD.("Harris
McLean") is entitled upon the due exercise hereof at any time during the
Exercise Period (as hereinafter defined) to purchase from PRO TECH
COMMUNICATIONS, INC. (the "Company"), up to two hundred thousand (200,000)
duly authorized, validly issued, fully paid and non-assessable shares of common
stock, par value $.001 per share, at a price of sixty cents ($.60) (the
"Exercise Price") (subject to adjustment as provided herein) for each share of
such common stock so purchased and to exercise the other rights, powers and
privileges hereinafter provided, all on the terms and conditions and pursuant
to the provisions hereinafter set forth.
ARTICLE I
DEFINITIONS
The terms defined in this Article I, whenever used in this Option,
shall have the respective meanings hereinafter specified. Whenever used in
this Option, any noun or pronoun shall be deemed to include both the singular
and plural and to cover all genders.
"Common Stock" means the Company's authorized common stock, par value
$.001 per share.
"Company" means Pro Tech Communications, Inc., and any successor
corporation.
"Exercise Period" means the period commencing on May 3, 1995, and
terminating at 5:00 p.m., Miami time, on May 2, 1997, or such time as otherwise
provided herein.
<PAGE> 2
"Exercise Price" means sixty cents ($.60) per share, as such price may
be adjusted from time to time pursuant to Article V.
"Harris McLean" means Harris McLean Financial Group Ltd., and any
successor corporation.
"Person" means an individual, a corporation, a joint venture, a
general or limited partnership, a trust, an unincorporated organization or a
government or any agency or political subdivision thereof.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal statute, and the rules and regulations of the Securities and
Exchange Commission promulgated thereunder, all as the same shall be in effect
from time to time.
"Option(s)" means this Option.
"Option Shares" means shares of Common Stock issued upon the exercise
of this Option.
ARTICLE II
NUMBER OF SHARES; EXERCISE OF OPTION
2.1. Number of Shares. This Option shall entitle Harris McLean
to subscribe to and purchase up to two hundred thousand (200,000) shares of
Common Stock.
2.2. Right to Exercise. Subject to the provisions contained in
this Option and upon compliance with the conditions of this Article II, Harris
McLean shall have the right at any time and from time to time during the
Exercise Period to exercise this Option in whole or in portions.
2.3. Call Option. Notwithstanding any other provision of this
Option to the contrary, if the Company notifies Harris McLean in writing that a
"Change in Control" has occurred, the Exercise Period of this Option shall
expire on the earlier to occur of (a) 5:00 P.M., Miami Time, on March 2, 1997,
or (b) ten (10) business days after the Company mails notice of such "Change in
Control" by registered or certified mail (postage prepaid, return receipt
requested) to the address of Harris McLean referred to in Section 6.2 hereof.
For purposes of this provision, the term "Change in Control" means the
acquisition of, or the signing of an agreement to purchase, at least twenty
percent (20%) of the voting securities of the Company by a person or entity or
a group acting in concert to acquire such securities.
2.4. Notice of Exercise; Issuance of Common Stock. To exercise
this Option, Harris McLean shall deliver to the Company (a) a Notice of
Exercise substantially in the form attached hereto, duly executed by Harris
McLean, (b) an amount equal to the aggregate Exercise Price for the shares of
Common Stock purchased upon due exercise of this Option, (c) this Option and
(d) a certificate executed by the Secretary of Harris McLean certifying that
attached thereto is a true and correct copy of the resolutions or
authorizations of the appropriate directors,
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<PAGE> 3
owners or otherwise, approving and authorizing the exercise of this Option and
the purchase of the Option Shares.
Payment of the Exercise Price shall be made, at the option
of Harris McLean, (i) by wire transfer of immediately available funds to an
account in a bank located in the United States designated in writing for such
purpose by the Company or (ii) by certified or official bank check payable to
the order of the Company and drawn on a member of the Chicago or New York
Clearing House. Upon receipt thereof, the Company shall, as promptly as
practicable, and in any event within seven (7) business days thereafter, cause
to be issued and delivered to Harris McLean, a certificate representing the
aggregate number of duly authorized, validly issued, fully paid and
non-assessable shares of Common Stock purchased pursuant to the exercise of
this Option registered in the name of Harris McLean. The certificates
representing such Option Shares shall bear the following legend:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD OR
OTHERWISE DISPOSED OF WITHOUT REGISTRATION UNDER SUCH ACT
OR AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE
COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED.
Notwithstanding anything contained herein to the contrary,
this Option may not be exercised if the issuance of the shares of Common Stock
upon such exercise would constitute a violation of any applicable federal or
state securities or other applicable laws or regulations. As a condition to
the exercise of this Option, the Company may require Harris McLean to make such
representations and agree to such covenants as may be required by any
applicable law or regulation.
This Option shall be deemed to have been exercised and such
certificate shall be deemed to have been issued, and Harris McLean shall be
deemed to have become the holder of record of such Option Shares for all
purposes as of the close of business on the date the Notice of Exercise,
together with payment and a certificate as herein provided and this Option, are
received by the Company.
2.5. Balance of Option Certificate. Upon exercise of this
Option in part rather than in whole, the Company shall execute and deliver to
Harris McLean a new Option certificate of like tenor evidencing the unexercised
portion of the Option and otherwise in all respects identical with this Option.
ARTICLE III
REGISTRATION
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3.1. Registration; Ownership. The Company will keep a register
in which, subject to such reasonable regulations as it may prescribe, the
Company will provide for the registration of ownership of this Option. The
Company will not at any time, except upon the dissolution, liquidation or
winding up of the Company, close such register so as to result in preventing or
delaying the exercise of this Option.
3.2. Replacement of Option. Upon receipt by the Company of
evidence satisfactory to it, in the exercise of reasonable discretion, of the
ownership of and the loss, theft, destruction or mutilation of any Option and,
in case of loss, theft or destruction, the written agreement of Harris McLean
to indemnify the Company against any resulting loss or expense or in case of
mutilation upon surrender and cancellation of such Option, the Company will
execute and deliver in lieu thereof, a new Option of like tenor.
ARTICLE IV
NO ASSIGNMENT OR TRANSFER
Harris McLean shall not assign or transfer any of its rights under
this Option. Any purported assignment or transfer of this Option in violation
of this Article IV shall be void.
ARTICLE V
ADJUSTMENT OF SHARES
In the event of any increase or decrease in the number of shares of
Common Stock outstanding by reason of a stock split or reverse stock split, the
number of shares of Common Stock issuable upon the exercise of this Option and
the Exercise Price shall be appropriately adjusted. The number of shares of
Common Stock issuable upon the exercise of this Option after such stock split
or reverse stock split shall be equal to an amount that Harris McLean would
have been entitled to, had the Option been exercised immediately prior to the
stock split or reverse stock split.
In the event that the Company shall at any time increase its
outstanding shares of Common Stock into a greater number of shares of Common
Stock by reason of a stock split, the Exercise Price in effect immediately
prior to such increase shall be proportionately reduced, and, conversely, in
case the outstanding shares of Common Stock shall be reduced into a smaller
number of shares of Common Stock by reason of a reverse stock split, the
Exercise Price in effect immediately prior to such reduction shall be
proportionately increased, calculated by dividing (i) the product of the total
number of shares of Common Stock outstanding prior to the stock split or
reverse stock split, multiplied by the Exercise Price, by (ii) the total number
of shares of Common Stock outstanding after the stock split or reverse stock
split.
ARTICLE VI
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<PAGE> 5
MISCELLANEOUS
6.1. Nonwaiver. No course of dealing or any delay or failure to
exercise any right hereunder on the part of Harris McLean or the Company shall
operate as a waiver of such right or otherwise prejudice the rights, powers or
remedies of Harris McLean or the Company.
6.2. Notice Generally. Any notice, demand or delivery to be
made pursuant to or in connection with this Option shall be sufficiently given
or made if sent by first class mail, postage prepaid, addressed to (a) Harris
McLean at its last known address appearing on the books or register of the
Company maintained for such purpose or (b) the Company at 3311 Industrial 25th
Street, Ft. Pierce, Florida 34946. Harris McLean and the Company may each
designate a different address by written notice to the other pursuant to this
Section 6.2.
6.3. Payment of Certain Expenses. Except as otherwise provided
in this Option, the Company and Harris McLean shall each pay their respective
expenses in connection with, and all taxes and other governmental charges that
may be imposed in respect of, the issue, sale and delivery of the shares of
Common Stock issuable upon the exercise of this Option.
6.4. Amendment. This Option may not be modified or amended
except by written agreement duly executed by the Company and Harris McLean.
6.5. Headings. The headings of the Articles and Sections of
this Option are for the convenience of reference only and shall not, for any
purpose, be deemed a part of this Option.
6.6 Governing Law. This Option shall be governed by the laws
of the State of Florida without reference to the conflict of laws principles
thereof.
Date of Grant: March 3, 1995
Pro Tech Communications, Inc.
By: /s/Keith Larkin
----------------------------------
Name: Keith Larkin
Title: Chief Executive Officer
5
<PAGE> 6
____________________
Date
Pro Tech Communications, Inc.
3311 Industrial 25th Street
Ft. Pierce, Florida 34946
Re: Exercise of Stock Option
Dear Sir:
Please be advised that pursuant to an Option Agreement ("Agreement"),
granted as of March 3, 1995 by Pro Tech Communications, Inc. (the "Company") to
the undersigned ("Optionee"), Optionee hereby exercises the stock option
("Option") in the amount of ______________ shares of common stock of the
Company and herewith tenders his cashier's check or certified check to the
Company in the amount of _______________________________________ ($__________)
in payment for such shares of common stock. Capitalized terms not otherwise
defined herein are defined as set forth in the Agreement.
Optionee requests _______ stock certificates for such shares issued
in the name of ____________________________ whose address is ________________
and whose social security number is _____________________________________.
Optionee hereby acknowledges, warrants and represents the following:
(1) Optionee's acknowledgements, representations, warranties
and agreements contained in the Agreement are true, complete and accurate as of
the date of this letter.
(2) The Option is presently exercisable and as such, has vested
and has not expired.
(3) Optionee is presently and has been in full compliance with
all the terms, conditions and provisions of the Agreement.
Sincerely,
------------------------------
Optionee
<PAGE> 1
EXHIBIT 10.3
FT. PIERCE, FLORIDA
GRANTED: MARCH 3, 1995
THIS OPTION EXPIRES IF NOT EXERCISED ON OR BEFORE
5:00 P.M., MIAMI TIME, MARCH 2, 1997
OPTION
To Purchase 40,000 Shares of Common Stock
par value $.001 per share
of
PRO TECH COMMUNICATIONS, INC.
THIS OPTION AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE HEREOF
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR
UNDER ANY STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS
OR AN OPINION SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.
THIS IS TO CERTIFY that WESTEK ELECTRONICS, INC. ("Westek") is
entitled upon the due exercise hereof at any time during the Exercise Period
(as hereinafter defined) to purchase from PRO TECH COMMUNICATIONS, INC. (the
"Company"), up to forty thousand (40,000) duly authorized, validly issued,
fully paid and non-assessable shares of common stock, par value $.001 per
share, at a price of fifty cents ($.50) (the "Exercise Price") (subject to
adjustment as provided herein) for each share of such common stock so purchased
and to exercise the other rights, powers and privileges hereinafter provided,
all on the terms and conditions and pursuant to the provisions hereinafter set
forth.
ARTICLE I
DEFINITIONS
The terms defined in this Article I, whenever used in this Option,
shall have the respective meanings hereinafter specified. Whenever used in
this Option, any noun or pronoun shall be deemed to include both the singular
and plural and to cover all genders.
"Common Stock" means the Company's authorized common stock, par value
$.001 per share.
"Company" means Pro Tech Communications, Inc., and any successor
corporation.
<PAGE> 2
"Exercise Period" means the period commencing on March 3, 1995, and
terminating at 5:00 p.m., Miami time, on March 2, 1997, or such time as
otherwise provided herein.
"Exercise Price" means fifty cents ($.50) per share, as such price may
be adjusted from time to time pursuant to Article V.
"Westek" means Westek Electronics, Inc., and any successor corporation.
"Person" means an individual, a corporation, a joint venture, a
general or limited partnership, a trust, an unincorporated organization or a
government or any agency or political subdivision thereof.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal statute, and the rules and regulations of the Securities and
Exchange Commission promulgated thereunder, all as the same shall be in effect
from time to time.
"Option(s)" means this Option.
"Option Shares" means shares of Common Stock issued upon the exercise
of this Option.
ARTICLE II
NUMBER OF SHARES; EXERCISE OF OPTION
2.1. Number of Shares. This Option shall entitle Westek to
subscribe to and purchase up to forty thousand (40,000) shares of Common Stock.
2.2. Right to Exercise. Subject to the provisions contained in
this Option and upon compliance with the conditions of this Article II, Westek
shall have the right at any time and from time to time during the Exercise
Period to exercise this Option in whole or in portions.
2.3. Call Option. Notwithstanding any other provision of this
Option to the contrary, if the Company notifies Westek in writing that a
"Change in Control" has occurred, the Exercise Period of this Option shall
expire on the earlier to occur of (a) 5:00 P.M., Miami Time, on March 2, 1997,
or (b) ten (10) business days after the Company mails notice of such "Change in
Control" by registered or certified mail (postage prepaid, return receipt
requested) to the address of Westek referred to in Section 6.2 hereof. For
purposes of this provision, the term "Change in Control" means the acquisition
of, or the signing of an agreement to purchase, at least twenty percent (20%)
of the voting securities of the Company by a person or entity or a group acting
in concert to acquire such securities.
2
<PAGE> 3
2.4. Notice of Exercise; Issuance of Common Stock. To exercise
this Option, Westek shall deliver to the Company (a) a Notice of Exercise
substantially in the form attached hereto, duly executed by Westek, (b) an
amount equal to the aggregate Exercise Price for the shares of Common Stock
purchased upon due exercise of this Option, (c) this Option and (d) a
certificate executed by the Secretary of Westek certifying that attached
thereto is a true and correct copy of the resolutions or authorizations of the
appropriate directors, owners or otherwise, approving and authorizing the
exercise of this Option and the purchase of the Option Shares.
Payment of the Exercise Price shall be made, at the option
of Westek, (i) by wire transfer of immediately available funds to an account in
a bank located in the United States designated in writing for such purpose by
the Company or (ii) by certified or official bank check payable to the order of
the Company and drawn on a member of the Chicago or New York Clearing House.
Upon receipt thereof, the Company shall, as promptly as practicable, and in any
event within seven (7) business days thereafter, cause to be issued and
delivered to Westek, a certificate representing the aggregate number of duly
authorized, validly issued, fully paid and non-assessable shares of Common
Stock purchased pursuant to the exercise of this Option registered in the name
of Westek. The certificates representing such Option Shares shall bear the
following legend:
THE SECURITIES REPRESENTED HEREBY HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 AND MAY NOT BE SOLD OR
OTHERWISE DISPOSED OF WITHOUT REGISTRATION
UNDER SUCH ACT OR AN OPINION OF COUNSEL,
REASONABLY SATISFACTORY TO THE COMPANY,
THAT SUCH REGISTRATION IS NOT REQUIRED.
Notwithstanding anything contained herein to the contrary,
this Option may not be exercised if the issuance of the shares of Common Stock
upon such exercise would constitute a violation of any applicable federal or
state securities or other applicable laws or regulations. As a condition to
the exercise of this Option, the Company may require Westek to make such
representations and agree to such covenants as may be required by any
applicable law or regulation.
This Option shall be deemed to have been exercised and such
certificate shall be deemed to have been issued, and Westek shall be deemed to
have become the holder of record of such Option Shares for all purposes as of
the close of business on the date the Notice of Exercise, together with payment
and a certificate as herein provided and this Option, are received by the
Company.
2.5. Balance of Option Certificate. Upon exercise of this
Option in part rather than in whole, the Company shall execute and deliver to
Westek a new Option certificate
3
<PAGE> 4
of like tenor evidencing the unexercised portion of the Option and otherwise in
all respects identical with this Option.
ARTICLE III
REGISTRATION
3.1. Registration; Ownership. The Company will keep a register
in which, subject to such reasonable regulations as it may prescribe, the
Company will provide for the registration of ownership of this Option. The
Company will not at any time, except upon the dissolution, liquidation or
winding up of the Company, close such register so as to result in preventing or
delaying the exercise of this Option.
3.2. Replacement of Option. Upon receipt by the Company of
evidence satisfactory to it, in the exercise of reasonable discretion, of the
ownership of and the loss, theft, destruction or mutilation of any Option and,
in case of loss, theft or destruction, the written agreement of Westek to
indemnify the Company against any resulting loss or expense or in case of
mutilation upon surrender and cancellation of such Option, the Company will
execute and deliver in lieu thereof, a new Option of like tenor.
ARTICLE IV
NO ASSIGNMENT OR TRANSFER
Westek shall not assign or transfer any of its rights under this
Option. Any purported assignment or transfer of this Option in violation of
this Article IV shall be void.
ARTICLE V
ADJUSTMENT OF SHARES
In the event of any increase or decrease in the number of shares of
Common Stock outstanding by reason of a stock split or reverse stock split, the
number of shares of Common Stock issuable upon the exercise of this Option and
the Exercise Price shall be appropriately adjusted. The number of shares of
Common Stock issuable upon the exercise of this Option after such stock split
or reverse stock split shall be equal to an amount that Westek would have been
entitled to, had the Option been exercised immediately prior to the stock split
or reverse stock split.
In the event that the Company shall at any time increase its
outstanding shares of Common Stock into a greater number of shares of Common
Stock by reason of a stock
4
<PAGE> 5
split, the Exercise Price in effect immediately prior to such increase shall be
proportionately reduced, and, conversely, in case the outstanding shares of
Common Stock shall be reduced into a smaller number of shares of Common Stock
by reason of a reverse stock split, the Exercise Price in effect immediately
prior to such reduction shall be proportionately increased, calculated by
dividing (i) the product of the total number of shares of Common Stock
outstanding prior to the stock split or reverse stock split, multiplied by the
Exercise Price, by (ii) the total number of shares of Common Stock outstanding
after the stock split or reverse stock split.
ARTICLE VI
MISCELLANEOUS
6.1. Nonwaiver. No course of dealing or any delay or failure to
exercise any right hereunder on the part of Westek or the Company shall operate
as a waiver of such right or otherwise prejudice the rights, powers or remedies
of Westek or the Company.
6.2. Notice Generally. Any notice, demand or delivery to be
made pursuant to or in connection with this Option shall be sufficiently given
or made if sent by first class mail, postage prepaid, addressed to (a) Westek
at its last known address appearing on the books or register of the Company
maintained for such purpose or (b) the Company at 3311 Industrial 25th Street,
Ft. Pierce, Florida 34946. Westek and the Company may each designate a
different address by written notice to the other pursuant to this Section 6.2.
6.3. Payment of Certain Expenses. Except as otherwise provided
in this Option, the Company and Westek shall each pay their respective expenses
in connection with, and all taxes and other governmental charges that may be
imposed in respect of, the issue, sale and delivery of the shares of Common
Stock issuable upon the exercise of this Option.
6.4. Amendment. This Option may not be modified or amended
except by written agreement duly executed by the Company and Westek.
6.5. Headings. The headings of the Articles and Sections of
this Option are for the convenience of reference only and shall not, for any
purpose, be deemed a part of this Option.
5
<PAGE> 6
6.6 Governing Law. This Option shall be governed by the laws of
of the State of Florida without reference to the conflict of laws principles
thereof.
Date of Grant: March 3, 1995
Pro Tech Communications, Inc.
By: /s/Keith Larkin
----------------------------------------
Name: Keith Larkin
Title: Chief Executive Officer
6
<PAGE> 7
____________________
Date
Pro Tech Communications, Inc.
3311 Industrial 25th Street
Ft. Pierce, Florida 34946
Re: Exercise of Stock Option
Dear Sir:
Please be advised that pursuant to an Option Agreement ("Agreement"),
granted as of March 3, 1995 by Pro Tech Communications, Inc. (the "Company") to
the undersigned ("Optionee"), Optionee hereby exercises the stock option
("Option") in the amount of ______________ shares of common stock of the
Company and herewith tenders his cashier's check or certified check to the
Company in the amount of _______________________________________ ($__________)
in payment for such shares of common stock. Capitalized terms not otherwise
defined herein are defined as set forth in the Agreement.
Optionee requests
_______ stock certificates for such shares issued in
the name of ____________________________ ____ whose address is
______________________________________ and whose social security number is
______________________________________.
Optionee hereby acknowledges, warrants and represents the following:
(1) Optionee's acknowledgements, representations, warranties
and agreements contained in the Agreement are true, complete and accurate as of
the date of this letter.
(2) The Option is presently exercisable and as such, has vested
and has not expired.
(3) Optionee is presently and has been in full compliance with
all the terms, conditions and provisions of the Agreement.
Sincerely,
------------------------------
Optionee
<PAGE> 1
EXHIBIT 10.4
PRO TECH COMMUNICATIONS, INC.
1996 STOCK OPTION PLAN
1. Purpose. The purpose of the 1996 Stock Option Plan of PRO
TECH COMMUNICATIONS, INC. is to provide incentive to employees, including
officers, directors and consultants of the Corporation, as defined below, to
encourage such individuals proprietary interest in the Corporation, to
encourage such individuals to remain in the employ of the Corporation, and to
attract to the Corporation individuals of experience and ability.
2. Definitions.
(a) "Board" shall mean the Board of Directors of the
Company.
(b) "Code" shall mean the Internal Revenue Code of 1986,
as amended.
(c) "Committee" shall mean the Committee appointed by the
Board in accordance with Section 4 of the Plan.
(d) "Common Stock" shall mean Company's common stock, par
value $.001 per share.
(e) "Company" shall mean Pro Tech Communications, Inc.,
a Florida corporation.
(f) "Corporation" shall mean and include the Company and
any parent or subsidiary corporation thereof, within the meaning of Section 425
of the Code.
(g) "Disability" shall mean the condition of an Employee
who is unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be expected to
result in death or which has lasted or can be expected to last for a continuous
period of not less than twelve (12) months, all within the meaning of Section
22(e)(3) of the Code.
(h) "Employee" shall mean any individual (including an
officer or a director) who is an employee of the Corporation (within the
meaning of Section 422A(a)(2) of the Code and the regulations thereunder).
(i) "Exercise Price" shall mean the price per Share of
Common Stock, determined by the Board or Committee, at which an Option may be
exercised.
(j) "Fair Market Value" of a Share of Common Stock as of
a specified date shall mean the closing price of a Share on the principal
securities exchange on which such Shares are traded on the day immediately
preceding the date as of which Fair Market Value is being determined, or on the
next preceding date on which such Shares are traded if no Shares were traded on
such immediately preceding day, or if the Shares are not traded on a securities
exchange, Fair
<PAGE> 2
Market Value shall be deemed to be the average of the high bid and low asked
prices of the Shares in the over-the-counter market on the day immediately
preceding the date as of which Fair Market Value is being determined or on the
next preceding date on which such high bid and low asked prices were recorded.
If the Shares are not publicly traded, Fair Market Value shall be determined by
the Board or Committee. In no case shall Fair Market Value be less than the
par value of a Share of the Common Stock, and in no event shall Fair Market
Value be determined with regard to restrictions other than restrictions which,
by their terms, will never lapse.
(k) "Incentive Stock Option" shall mean an Option
described in Code section 422A(b).
(l) "Nonstatutory Stock Option" shall mean an Option
which is not an Incentive Stock Option.
(m) "Option" shall mean a stock option granted pursuant
to the Plan.
(n) "Optionee" shall mean a person to whom an Option has
been granted.
(o) "Plan" shall mean this Pro Tech Communications, Inc.
1996 Stock Option Plan.
(p) "Purchase Price" shall mean the Exercise Price times
the number of whole Shares with respect to which an Option is exercised.
(q) "Share" shall mean one share of Common Stock.
(r) "Ten Percent Shareholder" shall mean any Employee
who, at the time of the grant of an Option, owns (or is deemed to own, under
Sections 422A(b)(6) and 425(d) of the Code) more than ten percent of the total
combined voting power of all classes of outstanding stock of the Corporation.
3. Effective Date. This Plan was adopted by the Board on April
15, 1996. In order for an Option under the Plan to be accorded Incentive Stock
Option treatment under the Code, this Plan must be approved by the Company's
stockholders at a duly-held meeting of the Company's stockholders within 12
months after the date the Plan was adopted by the Board. All Incentive Stock
Options granted under the Plan are made contingent upon such stockholder
approval of the Plan. If stockholder approval is not obtained within such
period, all Incentive Stock Options previously granted under the Plan shall be
deemed to be, and treated under the Code as, a Nonstatutory Stock Option.
4. Administration. The Plan shall be administered by the Board
or a Committee appointed by the Board consisting of not less than two members.
The Board may from time to time remove members from, or add members to, the
Committee. Vacancies on the Committee, however caused, shall be filled by the
Board. The Board or Committee shall from time to time at
- 2 -
<PAGE> 3
its discretion shall determine who shall be granted Options, the number of
Shares to be optioned to each and the designation of such Options as Incentive
Stock Options or Nonstatutory Stock Options. The interpretation and
construction by the Board or the Committee of any provisions of the Plan or of
any Option granted thereunder shall be binding and conclusive on all Optionees
and their legal representatives and beneficiaries.
5. Eligibility. Any Employee may be granted Incentive Stock
Options under the Plan and any Employee or officer, director, consultant of or
other person rendering services to, the Corporation may be granted Nonstatutory
Stock Options under the Plan if, in each instance, the Board or Committee
determines that such person performs services of special importance to the
management, operation and development of the business of the Corporation.
6. Stock. The stock subject to Options granted under the Plan
shall be Shares of authorized but unissued or reacquired Common Stock. The
aggregate number of Shares which may be issued under Options exercised under
this Plan shall not exceed 590,000. The number of Shares subject to Options
outstanding under the Plan at any time may not exceed the number of Shares
remaining available for issuance under the Plan. In the event that any Option
outstanding under the Plan expires for any reason or is terminated, the Shares
allocable to the unexercised portion of such Option shall again be available
for grant of Options under the Plan.
The limitations established by this Section 6 shall be subject to
adjustment upon the occurrence of the events specified and in the manner
provided in Section 9 hereof.
7. Terms and Conditions of Options. Options granted pursuant to
the Plan shall be evidenced by written agreements in such form as the Board or
the Committee shall from time to time determine, which agreements shall comply
with and be subject to the following terms and conditions:
(a) Date of Grant. Each Option shall specify its
effective date (the "date of grant"), which shall be the date specified by the
Board or Committee in its action relating to the grant of the Option, but which
date shall not be earlier than the date of the determination by the Board or
Committee to grant such Option nor more than thirty days after such date.
(b) Number of Shares. Each Option shall state the number
of Shares to which it pertains and shall provide for the adjustment thereof in
accordance with the provisions of Section 9 hereof.
(c) Exercise Price. Each Option shall state the Exercise
Price, which price shall be determined by the Board or Committee, provided
however, that the Exercise Price (i) in the case of an Incentive Stock Option
granted to an Employee who is not a Ten Percent Shareholder, shall not be less
than the par value nor less than the Fair Market Value of the Shares to which
the Option relates on the date of grant, (ii) in the case of an Incentive Stock
Option granted to an Employee who is a Ten Percent Shareholder, shall not be
less than the par value nor less than 110% of the Fair Market Value of the
Shares to which the Option relates on the date of grant, and (iii) in the case
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<PAGE> 4
of a Nonstatutory Stock Option granted to any Employee or officer or director
of the Corporation, shall not be less than the par value of the Shares to which
the Option relates. The Exercise Price of an Option shall be subject to
adjustment in accordance with Section 9 hereof. The Company may, at its
discretion, permit the cashless exercise of Options in accordance with the
procedures and restrictions established by the Board or the Committee.
(d) Exercise of Options and Medium and Time of Payment.
To exercise an Option, the Optionee shall give written notice to the Company
specifying the number of Shares to be purchased and accompanied by payment in
cash or by certified check of the full Purchase Price therefor and the amount
of any withholding tax obligation of the Corporation as described in Section
14(a) hereof. No Share shall be issued until full payment therefor has been
made.
(e) Term and Exercise of Options; Non-Transferability of
Incentive Stock Options. Subject to Section 10 hereof, Options may be
exercised as determined by the Board or Committee and as stated in the written
agreement evidencing the Option, provided, however, that no Incentive Stock
Option granted to an Employee who is not a Ten Percent Shareholder shall be
exercisable after the expiration of ten (10) years from the date it is granted,
and no Incentive Stock Option granted to an Employee who is a Ten Percent
Shareholder shall be exercisable after the expiration of five (5) years from
the date it is granted. In addition, the aggregate fair market value
(determined at the time an Incentive Stock Option is granted) of Shares with
respect to which Incentive Stock Options are exercisable for the first time by
an Optionee during any calendar year (under this Plan and all other plans
maintained by the Corporation) shall not exceed $100,000. During the lifetime
of the Optionee, an Incentive Stock Option shall be exercisable only by the
Optionee and shall not be assignable or transferable. In the event of the
Optionee's death, no Incentive Stock Option shall be transferable by the
Optionee otherwise than by will or by the laws of descent and distribution.
Restrictions on the transfer of Nonstatutory Stock Options, if any, shall be
determined by the Board and set forth in each Nonstatutory Stock Option
Agreement.
(f) Termination of Employment. In the event that an
Optionee shall cease to be employed by the Corporation for any reason, such
Optionee (or the heirs or legatees of such Optionee, if applicable) shall have
the right, subject to the restrictions of Subsection (e) hereof, to exercise
the Option at any time within three (3) months after such termination of
employment (twelve (12) months if the termination was due to the death or
Disability of the Optionee or, in the case of a Nonstatutory Stock Option,
retirement) to the extent that, on the day preceding the date of termination of
employment, the Optionee's right to exercise such Option had accrued pursuant
to the terms of the option agreement pursuant to which such Option was granted,
and had not previously been exercised.
For this purpose, the employment relationship will be treated as
continuing intact while the Optionee is on military leave, sick leave or other
bona fide leave of absence (to be determined in the sole discretion of the
Board and, in the case of an Optionee who has received an Incentive Stock
Option, only to the extent permitted under Section 422A of the Code and the
regulations promulgated thereunder). Moreover, in the case of an Optionee who
has been granted an Incentive Stock Option, employment shall, in no event, be
deemed to continue beyond the ninetieth (90th)
- 4 -
<PAGE> 5
day after the Optionee ceased active employment, unless the Optionee's
reemployment rights are guaranteed by statute or by contract.
(g) Rights as a Shareholder. An Optionee or, in the case
of an Incentive Stock Option, a transferee of a deceased Optionee or, in the
case of a Nonstatutory Stock Option, a permitted transferee shall have no
rights as a shareholder with respect to any Shares covered by his or her Option
until the date of the issuance of a stock certificate for such Shares. No
adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property) or distributions or other rights for which
the record date is prior to the date such stock certificate is issued, except
as provided in Section 9.
(h) Modification, Extension and Renewal of Options.
Subject to the terms and conditions and within the limitations of the Plan, the
Board or Committee may modify, extend or renew outstanding Options granted
under the Plan, or accept the exchange of outstanding Options (to the extent
not theretofore exercised) for the granting of new Options in substitution
therefor. Notwithstanding the foregoing, however, no modification of an Option
shall, without the consent of the Optionee, alter or impair any rights or
obligations under any Option theretofore granted under the Plan. Moreover, in
the case of any modification, extension or renewal of an Incentive Stock
Option, all of the requirements set forth herein shall apply in the same manner
as though a new Incentive Stock Option had been granted to the Optionee on the
date of such modification, extension or renewal, but only if such modification,
extension or renewal is treated, under Section 425(h) of the Code, as the
granting of a new option.
(i) Identification of Option. Each Option granted under
the Plan shall clearly identify its status as an Incentive Stock Option or
Nonstatutory Stock Option.
(j) Other Provisions. The option agreements authorized
under the Plan shall contain, in addition to those provisions provided in
Section 7(e) hereof, such other provisions not inconsistent with the terms of
the Plan, including, without limitation, restrictions upon the exercise of any
Option, and restrictions upon the transfer of Shares received upon exercise of
Options, as the Board or Committee shall deem advisable.
8. Term of Plan. Options may be granted pursuant to the Plan ten
years from the date the Plan is approved by the Company's stockholders pursuant
to Section 3 hereof.
9. Recapitalization. Subject to any required action by the
shareholders and the last sentence of subsection 7(h) hereof, the number of
Shares covered by this Plan as provided in Section 6, the number of Shares
covered by each outstanding Option, and the Exercise Price thereof shall be
proportionately adjusted for any increase or decrease in the number of issued
Shares resulting from a subdivision or consolidation of Shares, stock split, or
the payment of a stock dividend.
Subject to any required action by the shareholders of the Company and
the last sentence of Subsection 7(h) hereof, if the Company shall be the
surviving corporation in any merger or consolidation, each outstanding Option
shall pertain and apply to the securities to which a holder
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<PAGE> 6
of the number of Shares subject to the Option would have been entitled. A
dissolution or liquidation of the Company or a merger or consolidation in which
the Company is not the surviving corporation shall cause each outstanding
Option to terminate, unless the agreement of merger or consolidation shall
otherwise provide, provided that each Optionee shall, in such event, have the
right immediately prior to such dissolution or liquidation, or merger or
consolidation in which the Company is not the surviving corporation to exercise
the Option in whole or in part, subject to limitations on exercisability of
Options under Sections 7(e) and (f) hereof.
In the event of a change in the Common Stock as presently constituted,
which is limited to a change of all of its authorized shares with par value
into the same number of shares with a different par value or without par value,
the shares resulting from any such change shall be deemed to be Shares of
Common Stock within the meaning of the Plan.
To the extent that the foregoing adjustments relate to stock or
securities of the Company, such adjustments shall be made by the Board or
Committee, whose determination in that respect shall be final, binding and
conclusive.
Except as hereinbefore expressly provided in this Section 9, the
Optionee shall have no rights by reason of any subdivision or consolidation of
shares of stock of any class, stock split, or the payment of any stock dividend
or any other increase or decrease in the number of shares of stock of any class
or by reason of any dissolution, liquidation, merger, or consolidation or
spin-off of assets or stock of another corporation, and any issue by the
Company of shares of stock of any class or securities convertible into shares
of stock of any class, shall not affect, and no adjustment by reason thereof
shall be made with respect to, the number or price of Shares subject to the
Option.
The grant of an Option pursuant to the Plan shall not affect in any
way the right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure or to merge or
consolidate or to dissolve, liquidate, sell or transfer all or any part of its
business or assets.
10. Securities Law Requirements. No Shares shall be issued upon
the exercise of any Option unless and until the Company has determined that:
(i) it and the Optionee have taken all actions required to register the Shares
under the Securities Act of 1933 or perfect an exemption from the registration
requirements thereof (including the furnishing by the Optionee of an
appropriate investment letter); (ii) any applicable listing requirement of any
stock exchange on which the Common Stock is listed has been satisfied; and
(iii) any other applicable provision of state or Federal law has been
satisfied.
11. Amendment of the Plan. The Board or Committee may, insofar as
permitted by law, from time to time, with respect to any Shares at the time not
subject to Options, suspend or discontinue the Plan or revise or amend it in
any respect whatsoever except that, without approval of the shareholders of the
Company, no such revision or amendment shall:
(a) Increase the number of Shares subject to the Plan; or
- 6 -
<PAGE> 7
(b) Change the designation in Section 5 of the Plan of
the class of Employees eligible to receive options.
(c) Amend this Section 11 to defeat its purpose.
12. Application of Funds. The proceeds received by the Company
from the sale of Common Stock pursuant to the exercise of an Option will be
used for general corporate purposes or as otherwise determined by the Board.
13. No Obligation to Exercise Option. The granting of an Option
shall impose no obligation upon the Optionee to exercise such Option.
14. Withholding.
(a) Nonstatutory Options. Whenever Shares are to be
delivered upon exercise of a Nonstatutory Option, the Corporation shall be
entitled to require as a condition of delivery that the Optionee remit to the
Corporation an amount sufficient to satisfy the Corporation's federal, state
and local withholding tax obligations with respect to the exercise of the
Option.
(b) Incentive Stock Options. The acceptance of Shares
upon exercise of an Incentive Stock Option shall constitute an agreement by the
Optionee (unless and until the Corporation shall notify the Optionee that it is
relieved, in whole or in part, of its obligations under this Section 14(b)) (i)
to notify the Corporation if any or all of such Shares are disposed of by the
Optionee within two years from the date the Option was granted or within one
year from the date the Shares were transferred to the Optionee pursuant to this
exercise of the Option, and (ii) to remit to the Corporation, at the time of
and in the case of any such disposition, an amount sufficient to satisfy the
Corporation's federal, state and local withholding tax obligations with respect
to such disposition, whether or not, as to both (i) and (ii), the Optionee is
in the employ of the Corporation at the time of such disposition.
15. Governing Law. The Plan shall be governed by the laws of the
State of Florida.
- 7 -
<PAGE> 1
EXHIBIT 10.5
Optionee: Keith Larkin
Grant: 540,000 shares
PRO TECH COMMUNICATIONS, INC.
1996 STOCK OPTION PLAN
NONSTATUTORY
STOCK OPTION AGREEMENT
OPTION AGREEMENT dated as of April 15, 1996 between Pro Tech
Communications, Inc., a Florida corporation (the "Company"), having its
principal executive office at 3311 Industrial 25th Street, Ft. Pierce, Florida
34946 and Keith Larkin (the "Optionee"), having his address at A1A Barkley
Beach Club, Ft. Pierce, FL.
The Company has adopted the 1996 Stock Option Plan (the "Plan"), a
copy of which is attached hereto, and desires to grant to the Optionee the
Nonstatutory Stock Option provided for herein, all subject to the terms and
conditions of the Plan. Capitalized terms used herein and not defined have the
same meanings as set forth in the Plan.
IT IS AGREED as follows:
1. Grant of Option. The Company hereby grants to the Optionee on
the date hereof a Nonstatutory Stock Option (the "Option") to purchase (subject
to adjustment pursuant to Section 9 of the Plan) an aggregate of 540,000 of its
shares of Common Stock (the "Shares") at an option price per Share of $0.50.
2. Option Period. The Option granted hereby shall expire on
April 15, 1999 subject to earlier termination as provided in the Plan.
3. Exercise of Option.
A. The Optionee may immediately exercise the Option, or
any portion thereof, until April 15, 1999.
B. The Optionee may exercise the Option, or any portion
thereof, by delivering to the Company a written notice duly signed by the
Optionee in the form attached hereto as Exhibit A stating the number of Shares
that the Optionee has elected to purchase, and accompanied by payment (in cash
or by certified check) of an amount equal to the sum of (i) the full purchase
price for the Shares to be purchased, plus (ii) any withholding tax required to
be paid pursuant to Section 14(a) of the Plan. After receipt by the Company of
such notice and payment, the Company shall (subject to Section 10 of the Plan)
issue the Shares in the name of the Optionee and deliver the certificate
therefor to the Optionee. No Shares shall be issued until full payment
therefor and any withholding tax has been made, and the Optionee shall have
none of the rights of a shareholder in respect of such Shares until they are
issued.
4. Employment. Nothing contained in this Option Agreement shall
confer upon the Optionee any right to be employed by the Company nor prevent
the Company from terminating its
<PAGE> 2
current relationship with the Optionee at any time, with or without cause. If
the Optionee's current relationship with the Company is terminated for any
reason, the Option shall be exercisable only as to those Shares immediately
purchasable by the Optionee at the date of termination and, subject to Section
2 hereof, thereafter as provided in the Plan.
5. Transferability of Option. The Option may be transferred in
whole or in part.
6. Tax Status. The Company makes no representation or warranty
whatsoever to the Optionee as to the tax consequences of the grant or exercise
of the Option or of the disposition of Shares acquired thereunder.
7. Incorporation of Plan. The Option granted hereby is subject
to, and governed by, all the terms and conditions of the Plan, which are hereby
incorporated by reference. This Agreement, including the Plan incorporated by
reference herein, is the entire agreement among the parties hereto with respect
to the subject matter hereof and supersedes all prior agreements and
understandings. In the case of any conflict between the terms of this
Agreement and the Plan, the provisions of the Plan shall control.
8. Purchase for Investment. As a condition to the exercise in
whole or in part of the Option hereby granted, each written notice of election
shall include a representation by the Optionee that the Shares are being
purchased for investment and not for distribution or resale.
9. Notices. Any notice to be given by the Optionee hereunder
shall be sent to the Company at its principal executive offices, and any notice
from the Company to the Optionee shall be sent to the Optionee at his address
set forth above; all such notices shall be in writing and shall be delivered in
person or by registered or certified mail. Either party may change the address
to which notices are to be sent by notice in writing given to the other in
accordance with the terms hereof.
10. Governing Law. This Option Agreement shall be governed by the
laws of the State of Florida.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
PRO TECH COMMUNICATIONS, INC.
By: /s/ Richard Hennessey
---------------------------------------
Richard Hennessy (Name), its Vice President (Title)
----------------------- ----------------------
OPTIONEE:
/s/ Keith Larkin
-------------------------------------
(Name)
2
<PAGE> 3
EXHIBIT A
PURCHASE FORM
(To be signed and delivered to
Pro Tech Communications, Inc. upon exercise of the Option)
The undersigned, the holder of the foregoing Nonstatutory Stock
Option, hereby irrevocably elects to exercise the purchase rights represented
by such Option, and to purchase thereunder ________________ shares of common
stock, par value of $.001 of Pro Tech Communications, Inc. ("Shares") and
herewith makes payment of $______________ ($______ per share) therefor, plus
$_________________ ($_______ per share) for withholding tax, if any, required
pursuant to Section 14(a) of the Plan and requests that the Certificates for
the Shares be issued in the name(s) of, and delivered to _______
________________________________________________________________________ whose
address(es) is/are ___________________________________________________________.
The undersigned hereby represents that the Shares being purchased by
the exercise of this Option are being purchased for investment only and not
with a view towards the sale, transfer, or distribution thereof.
The undersigned hereby agrees to notify Pro Tech Communications, Inc.
of any early disposition of the Shares, and agrees to pay any additional
withholding tax due in connection therewith, all in accordance with Section
14(b) of the Plan.
__________________________________
__________________________________
__________________________________
__________________________________
Dated: _______________________, 19__
__________________________________
3
<PAGE> 1
EXHIBIT 10.6
Optionee: Kenneth Campbell
Grant: 25,000 shares
PRO TECH COMMUNICATIONS, INC.
1996 STOCK OPTION PLAN
NONSTATUTORY
STOCK OPTION AGREEMENT
OPTION AGREEMENT dated as of April 15, 1996 between Pro Tech
Communications, Inc., a Florida corporation (the "Company"), having its
principal executive office at 3311 Industrial 25th Street, Ft. Pierce, Florida
34946 and Kenneth Campbell (the "Optionee"), having his address at 1796 Walden
Pond Drive, Ft. Pierce, FL.
The Company has adopted the 1996 Stock Option Plan (the "Plan"), a
copy of which is attached hereto, and desires to grant to the Optionee the
Nonstatutory Stock Option provided for herein, all subject to the terms and
conditions of the Plan. Capitalized terms used herein and not defined have the
same meanings as set forth in the Plan.
IT IS AGREED as follows:
1. Grant of Option. The Company hereby grants to the Optionee on
the date hereof a Nonstatutory Stock Option (the "Option") to purchase (subject
to adjustment pursuant to Section 9 of the Plan) an aggregate of 25,000 of its
shares of Common Stock (the "Shares") at an option price per Share of $0.50.
2. Option Period. The Option granted hereby shall expire on
April 15, 1999 subject to earlier termination as provided in the Plan.
3. Exercise of Option.
A. The Optionee may immediately exercise the Option, or
any portion thereof, until April 15, 1999.
B. The Optionee may exercise the Option, or any portion
thereof, by delivering to the Company a written notice duly signed by the
Optionee in the form attached hereto as Exhibit A stating the number of Shares
that the Optionee has elected to purchase, and accompanied by payment (in cash
or by certified check) of an amount equal to the sum of (i) the full purchase
price for the Shares to be purchased, plus (ii) any withholding tax required to
be paid pursuant to Section 14(a) of the Plan. After receipt by the Company of
such notice and payment, the Company shall (subject to Section 10 of the Plan)
issue the Shares in the name of the Optionee and deliver the certificate
therefor to the Optionee. No Shares shall be issued until full payment
therefor and any withholding tax has been made, and the Optionee shall have
none of the rights of a shareholder in respect of such Shares until they are
issued.
4. Employment. Nothing contained in this Option Agreement shall
confer upon the Optionee any right to be employed by the Company nor prevent
the Company from terminating its
<PAGE> 2
current relationship with the Optionee at any time, with or without cause. If
the Optionee's current relationship with the Company is terminated for any
reason, the Option shall be exercisable only as to those Shares immediately
purchasable by the Optionee at the date of termination and, subject to Section
2 hereof, thereafter as provided in the Plan.
5. Transferability of Option. The Option may be transferred in
whole or in part.
6. Tax Status. The Company makes no representation or warranty
whatsoever to the Optionee as to the tax consequences of the grant or exercise
of the Option or of the disposition of Shares acquired thereunder.
7. Incorporation of Plan. The Option granted hereby is subject
to, and governed by, all the terms and conditions of the Plan, which are hereby
incorporated by reference. This Agreement, including the Plan incorporated by
reference herein, is the entire agreement among the parties hereto with respect
to the subject matter hereof and supersedes all prior agreements and
understandings. In the case of any conflict between the terms of this
Agreement and the Plan, the provisions of the Plan shall control.
8. Purchase for Investment. As a condition to the exercise in
whole or in part of the Option hereby granted, each written notice of election
shall include a representation by the Optionee that the Shares are being
purchased for investment and not for distribution or resale.
9. Notices. Any notice to be given by the Optionee hereunder
shall be sent to the Company at its principal executive offices, and any notice
from the Company to the Optionee shall be sent to the Optionee at his address
set forth above; all such notices shall be in writing and shall be delivered in
person or by registered or certified mail. Either party may change the address
to which notices are to be sent by notice in writing given to the other in
accordance with the terms hereof.
10. Governing Law. This Option Agreement shall be governed by the
laws of the State of Florida.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
PRO TECH COMMUNICATIONS, INC.
By: /s/ Keith Larkin
--------------------------------------
Keith Larkin (Name) its President (Title)
------------------- ------------------
OPTIONEE:
/s/ Keith Campbell
------------------------------------------
Keith Campbell (Name)
2
<PAGE> 3
EXHIBIT A
PURCHASE FORM
(To be signed and delivered to
Pro Tech Communications, Inc. upon exercise of the Option)
The undersigned, the holder of the foregoing Nonstatutory Stock
Option, hereby irrevocably elects to exercise the purchase rights represented
by such Option, and to purchase thereunder ________________ shares of common
stock, par value of $.001 of Pro Tech Communications, Inc. ("Shares") and
herewith makes payment of $______________ ($______ per share) therefor, plus
$_________________ ($_______ per share) for withholding tax, if any, required
pursuant to Section 14(a) of the Plan and requests that the Certificates for
the Shares be issued in the name(s) of, and delivered to _______
________________________________________________________________________ whose
address(es) is/are ___________________________________________________________.
The undersigned hereby represents that the Shares being purchased by
the exercise of this Option are being purchased for investment only and not
with a view towards the sale, transfer, or distribution thereof.
The undersigned hereby agrees to notify Pro Tech Communications, Inc.
of any early disposition of the Shares, and agrees to pay any additional
withholding tax due in connection therewith, all in accordance with Section
14(b) of the Plan.
__________________________________
__________________________________
__________________________________
__________________________________
Dated: _______________________, 19__
__________________________________
3
<PAGE> 1
EXHIBIT 10.7
Optionee: Richard Hennessey
Grant: 25,000 shares
PRO TECH COMMUNICATIONS, INC.
1996 STOCK OPTION PLAN
NONSTATUTORY
STOCK OPTION AGREEMENT
OPTION AGREEMENT dated as of April 15, 1996 between Pro Tech
Communications, Inc., a Florida corporation (the "Company"), having its
principal executive office at 3311 Industrial 25th Street, Ft. Pierce, Florida
34946 and Kenneth Campbell (the "Optionee"), having his address at 1796 Walden
Pond Drive, Ft. Pierce, FL.
The Company has adopted the 1996 Stock Option Plan (the "Plan"), a
copy of which is attached hereto, and desires to grant to the Optionee the
Nonstatutory Stock Option provided for herein, all subject to the terms and
conditions of the Plan. Capitalized terms used herein and not defined have the
same meanings as set forth in the Plan.
IT IS AGREED as follows:
1. Grant of Option. The Company hereby grants to the Optionee on
the date hereof a Nonstatutory Stock Option (the "Option") to purchase (subject
to adjustment pursuant to Section 9 of the Plan) an aggregate of 25,000 of its
shares of Common Stock (the "Shares") at an option price per Share of $0.50.
2. Option Period. The Option granted hereby shall expire on
April 15, 1999 subject to earlier termination as provided in the Plan.
3. Exercise of Option.
A. The Optionee may immediately exercise the Option, or
any portion thereof, until April 15, 1999.
B. The Optionee may exercise the Option, or any portion
thereof, by delivering to the Company a written notice duly signed by the
Optionee in the form attached hereto as Exhibit A stating the number of Shares
that the Optionee has elected to purchase, and accompanied by payment (in cash
or by certified check) of an amount equal to the sum of (i) the full purchase
price for the Shares to be purchased, plus (ii) any withholding tax required to
be paid pursuant to Section 14(a) of the Plan. After receipt by the Company of
such notice and payment, the Company shall (subject to Section 10 of the Plan)
issue the Shares in the name of the Optionee and deliver the certificate
therefor to the Optionee. No Shares shall be issued until full payment
therefor and any withholding tax has been made, and the Optionee shall have
none of the rights of a shareholder in respect of such Shares until they are
issued.
4. Employment. Nothing contained in this Option Agreement shall
confer upon the Optionee any right to be employed by the Company nor prevent
the Company from terminating its
<PAGE> 2
current relationship with the Optionee at any time, with or without cause. If
the Optionee's current relationship with the Company is terminated for any
reason, the Option shall be exercisable only as to those Shares immediately
purchasable by the Optionee at the date of termination and, subject to Section
2 hereof, thereafter as provided in the Plan.
5. Transferability of Option. The Option may be transferred in
whole or in part.
6. Tax Status. The Company makes no representation or warranty
whatsoever to the Optionee as to the tax consequences of the grant or exercise
of the Option or of the disposition of Shares acquired thereunder.
7. Incorporation of Plan. The Option granted hereby is subject
to, and governed by, all the terms and conditions of the Plan, which are hereby
incorporated by reference. This Agreement, including the Plan incorporated by
reference herein, is the entire agreement among the parties hereto with respect
to the subject matter hereof and supersedes all prior agreements and
understandings. In the case of any conflict between the terms of this
Agreement and the Plan, the provisions of the Plan shall control.
8. Purchase for Investment. As a condition to the exercise in
whole or in part of the Option hereby granted, each written notice of election
shall include a representation by the Optionee that the Shares are being
purchased for investment and not for distribution or resale.
9. Notices. Any notice to be given by the Optionee hereunder
shall be sent to the Company at its principal executive offices, and any notice
from the Company to the Optionee shall be sent to the Optionee at his address
set forth above; all such notices shall be in writing and shall be delivered in
person or by registered or certified mail. Either party may change the address
to which notices are to be sent by notice in writing given to the other in
accordance with the terms hereof.
10. Governing Law. This Option Agreement shall be governed by the
laws of the State of Florida.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
PRO TECH COMMUNICATIONS, INC.
By: /s/ Keith Larkin
--------------------------------------
Keith Larkin (Name) its President (Title)
------------------- ---------------------
OPTIONEE:
/s/ Richard Hennessey
------------------------------------------
Richard Hennessey (Name)
2
<PAGE> 3
EXHIBIT A
PURCHASE FORM
(To be signed and delivered to
Pro Tech Communications, Inc. upon exercise of the Option)
The undersigned, the holder of the foregoing Nonstatutory Stock
Option, hereby irrevocably elects to exercise the purchase rights represented
by such Option, and to purchase thereunder ________________ shares of common
stock, par value of $.001 of Pro Tech Communications, Inc. ("Shares") and
herewith makes payment of $______________ ($______ per share) therefor, plus
$_________________ ($_______ per share) for withholding tax, if any, required
pursuant to Section 14(a) of the Plan and requests that the Certificates for
the Shares be issued in the name(s) of, and delivered to _______
________________________________________________________________________ whose
address(es) is/are ___________________________________________________________.
The undersigned hereby represents that the Shares being purchased by
the exercise of this Option are being purchased for investment only and not
with a view towards the sale, transfer, or distribution thereof.
The undersigned hereby agrees to notify Pro Tech Communications, Inc.
of any early disposition of the Shares, and agrees to pay any additional
withholding tax due in connection therewith, all in accordance with Section
14(b) of the Plan.
__________________________________
__________________________________
__________________________________
__________________________________
Dated: _______________________, 19__
__________________________________
3
<PAGE> 1
EXHIBIT 10.8
LEASE
THIS LEASE made and entered into this 20th day of JULY, 1994 by and
between SID MOTEL herein termed the Lessor and PRO-TECH SYSTEMS herein termed
the Lessee, each in consideration of the agreements to be performed by the
other, hereby agree:
1. Property and Term: The Lessor hereby leases to the Lessee the
following described premises: 3309 Industrial 25th Street
Fort Pierce, FL
for the term beginning at 12:01 A.M. on SEPTEMBER 1, 1994 and ending at 11:59
P.M. on AUGUST 31, 1996.
2. Rent: The Lessee will pay to the Lessor as rent for the property
leased during the term, the total amount of SIXTEEN THOUSAND DOLLARS
($16,000.00) paying $666.67 plus sales tax on the first day of each month.
Due upon lease execution: $ 706.67 - First month's rent & sales tax
$ 706.67 - Last month's rent & sales tax
---------
$1,413.33
Lessee agrees to pay all applicable sales tax in regards to said monthly
rental payments at the same time said monthly rental payments become due.
In the event that any rent payment shall become overdue for a period in
excess of five (5) days, then, at Landlord's option, a "late charge" of five
percent (5%) of such payment for such period of thirty (30) days or any part
thereof, shall become immediately due and owing to Landlord, as additiional
rent.
(1)
<PAGE> 2
3. Use: The Lessee will use the property only for light electronic
research and development, and shall not make or suffer any unlawful, improper
or offensive use of the premises, or any use or occupancy thereof contrary to
any law of the State of Florida, or any ordinance of the City or County wherein
said demised premises are situated.
4. Assignment or Subleasing: No assignment of this lease or
subleasing any part of the leased property, by the Lessee or any assignee or
sublessee, shall be valid without the written consent of the Lessor. No
assignment or subleasing shall relieve the assignor or sublessor of any
obligation under this Lease. Each assignee or sublessee shall, by assuming that
status, become obligated to perform every agreement of this lease to be
performed by the Lessee; except that a sublessee shall be obligated to perform
them only insofar as they relate to the part of the property subleased and the
rent required by the sublessee, and shall be obligated to pay rent directly to
the Lessor only after default in payment by the sublessor with written demand
from the Lessor to pay rent directly to the Lessor.
5. Access by Lessor: The Lessor may enter, inspect and make such
repairs to the leased property as the Lessor may reasonably desire, at all
reasonable times.
6. Repairs: The Lessor will maintain the exterior of the leased
building, including the roof and exterior walls, in good and substantial
repair. The Lessee will maintain the interior of the leased property,
including interior ceilings, walls, floors, fixtures, pipes, doors and windows,
(including plate glass windows), in good and substantial repair. Interior
fixtures and pipes are those that project from the ceilings, walls and floors
into the room; exterior fixtures and pipes include those concealed behind, over
or under the interior ceilings, walls and floors. The Lessee will maintain all
plate glass
(2)
<PAGE> 3
windows and other windows in the leased property in good and substantial repair
and will replace all broken windows regardless of the cause of breaking. The
agreements to repair in this paragraph, except for damage or breaking of plate
glass or other windows not caused by fire, do not apply to any damage caused by
fire or other casualty.
7. Damage by Fire or Other Casualty: If the leased property is
damaged by fire or other casualty to the extent of twenty per centum or more,
the Lessor shall have the option to rebuild and repair the leased property or
to terminate this lease; if damaged to a lesser extent, the Lessor will rebuild
and repair. In the event of damage by fire or other casualty, the rent payable
under this lease shall abate, in proportion to the impairment of the use that
can reasonably be made of the property for the purpose permitted by this lease,
until the property is rebuilt and repaired (or until the lease is terminated,
if terminated in accordance with this paragraph).
8. Waiver and Exemption: Any constitutional or statutory exemption
of the Lessee or any assignee or sublessee, of any property usually kept on the
leased premises, from distress or forced sale is waived.
9. Addresses: All rent payable and notice given under this lease to
the Lessor shall be paid at place as the Lessor shall specify in writing. All
notices given under this lease to the Lessor or any assignee or sublessee of
the Lessee shall be given at the leased premises. Any notice properly mailed by
registered mail, postage and fee prepaid, shall be deemed delivered when mailed,
whether received or not.
(3)
<PAGE> 4
10. Remedies for Failure to Pay Rent: If any rent required by this
lease shall not be paid when due, the Lessor shall have the option to:
(a) Terminate this lease, resume possession of the property for his
own account, and recover immediately from the Lessee the difference between the
rent specified in the lease and the fair rental value of the property for the
remainder of the term, reduce to present worth.
(b) Resume possession and re-lease or rent the property for the
remainder of the term for the account of the Lessee, and recover from the
Lessee, at the end of the term or at the time each payment of rent comes due
under this lease as the Lessor may choose, the difference between the rent
specified in the lease and the rent received on the re-leasing or renting.
In either event, the Lessor shall also recover all expenses incurred by
reason of the breach, including reasonable attorneys' fees.
11. Remedies for Breach of Agreement: If either the Lessor or the
Lessee shall fail to perform, or shall breach any agreement of this lease other
than the agreement of the Lessee to pay rent, for ten (10) days after a written
notice specifying the performance required shall have been given to the party
failing to perform; the party so giving notice may institute action in a Court
of competent jurisdiction to terminate this lease or to compel performance of
the agreement, and the prevailing party to that litigation shall be paid by the
losing party all expenses of such litigation including a reasonable attorneys'
fees.
(4)
<PAGE> 5
12. Option to Extend Term: The Lessee shall have the option to
extend the term of this lease for an additional period of 12 months beginning
at 12:01 AM on SEPTEMBER 1, 1996 and ending at 11:59 PM on AUGUST 31, 1997,
provided that written notice of the intention of the Lessee to exercise said
option shall be delivered to the Lessor, at his address specified in Paragraph
9, at least three (3) months prior to the end of the primary term. The terms
of the extended term, including rent, shall be determined by negotiation at the
time the Lessee desires to re-lease the premises.
13. Signs: All exterior signs must have prior approval of the
Lessor and no unsightly signs shall be erected or permitted to remain on the
exterior of the leased property or on either side of the windows or door at the
front of the leased property.
14. Public Utilities and Janitorial Serviced: The Lessee shall
provide all utilities and inside janitorial services to the premises during the
term of this lease.
15. Maintenance: The Lessee will keep and maintain the leased
premises and the spaces immediately adjoining the front and the rear thereof in
a good and clean condition and will promptly remove or cause to be removed any
rubbish or trash accumulating therein.
16. Ad Valorem Real Estate Taxes: The Lessor will pay municipal
and county ad valorem real estate taxes for the first full calendar year.
Thereafter the Lessee will pay their proportionate share of any increase in such
taxes and their proportionate share shall bear the same ratio to 100 percent of
the total increase that the square footage of floor space of the entire
building.
(5)
<PAGE> 6
17. Warranty of Right to Lease: The Lessor covenants that he owns
fee simple title to all the property described in the first paragraph of this
lease and that he has full and complete right to lease the same.
18. Insurance: The Lessee agrees to obtain at his expense a policy
or policies of liability insurance in company or companies approved by the
Lessor, providing for liability insurance for bodily injury and property damage
with a combined single limit of not less than $300,000. Said policy or
policies shall be commercial general liability policies and will include the
Lessor as additional named insured. Either the original or a duplicate
original will be delivered to the Lessor and all premiums will be paid by the
Lessee.
19. Maintenance of Air-Conditioner: The LESSOR will maintain
building air-conditioning unit or units and all parts thereof in good and
substantial repair and working order.
20. Janitorial Service: Lessee will provide its own interior
janitorial service for the areas of the building.
21. Condition of Property at Lease Temination: The Lessee will
quietly surrender possession of the property and vacate same at the end of the
original term, or at the end of the extended term, as the case may be, and
return the property to the Lessor in as good conditon as when first occupied,
reasonable wear and tear expected.
22. Radon Gas Disclosure: Radon Gas is a naturally occurring
radioactive gas that, when accumulated in a building in sufficient quantities,
may present health risks to persons who are exposed to it over time. Levels
of radon that exceed Federal and State guidelines have been found in buildings
in Florida. Additional information regarding radon and radon testing may be
obtained from your county public health unit.
(6)
<PAGE> 7
23. Disability Act: Tenant shall be responsible for compliance with the
Demised Premises with all requirements of the Americans with Disabilities Act
(the "Act"), and shall indemnify, defend and save Landlord harmless from any
claim, damages or loss resulting from Tenant's failure to comply with the Act,
which indemnification shall survive the termination of this Lease.
24. Indemnity: The Lessee will, during the term of this Lease, or any
renewals, indemnify the Lessor and hold him harmless against all claims,
demands, and judgments for loss, damage, or injury to property or person
resulting or occurring as a result of act or acts or omission or omissions of
Lessee, its employees, agents or representatives, or the breach of any
obligation of Lessee as set out in this Lease, but not by reason of the
negligence of the Lessor.
IN WITNESS WHEREOF, the Lessor has caused these presents to be executed in
its name and the Lessee has hereto set his hand and seal on the day and year
first above written, in two counterparts, either of which may be considered an
original.
Signed, sealed and delivered in
the presence of:
/s/ KDL CORP.
- ------------------------------- ----------------------------------
WITNESS LESSOR
/s/ SIDNEY MOTEL OWNER
- ------------------------------- ----------------------------------
WITNESS LESSOR
/s/ KEITH LARKIN
- ------------------------------- ----------------------------------
WITNESS LESSEE
- ------------------------------- ----------------------------------
WITNESS LESSEE
(7)
<PAGE> 1
EXHIBIT 10.9
LEASE
This lease made and entered into this 22nd day of November 1995 by and
between SIDNEY MOTEL herein termed the Lessor and PRO TECH SYSTEMS herein termed
the Lessee, each in consideration of the agreements to be performed by the
other, hereby agree:
1. Property and term: The Lessor hereby leases to the Lessee the
following described premises:
3311 Industrial 25th Street
Airport Industrial Park
Ft. Pierce, FL
for the term beginning at 12:01 A.M. on Dec. 1, 1995 and ending at 11:59 P.M.
on Nov. 30, 1997.
2. Rent: The Lessee will pay the Lessor as rent for the property leased
during the term, the total amount of Fifteen Thousand Six Hundred Dollars
($15,600.00) paying the amount the first of each month in the following manner:
$650.00 Plus $39.00 Sales Tax First of Each Month
(Rental amount includes existing office furniture.)
Due upon lease execution: First Month's rent............$650.00
Sales Tax.................. 39.00
-------
TOTAL DUE..................$689.00
Lessee also agrees to pay all applicable sales tax in regards to said monthly
rental payments at the time said monthly rental payments become due.
(1)
<PAGE> 2
3. Use: The Lessee will use the leased property only for light electric
research & development, and will make no unlawful, improper or offensive use of
the leased property.
4. Assignment or Subleasing: No assignment of this lease or subleasing
any part of the leased property, by the Lessee or any assignee or sublessee,
shall be valid without the written consent of the Lessor. No assignment or
subleasing shall relieve the assignor or sublessor of any obligation under this
Lease. Each assignee or sublessee shall, by assuming that status, become
obligated to perform every agreement of this lease to be performed by the
Lessee; except that a sublessee shall be obligated to perform them only insofar
as they relate to the part of the property subleased and the rent required by
the sublessee, and shall be obligated to pay rent directly to the Lessor only
after default in payment by the sublessor with written demand from the Lessor to
pay rent directly to the Lessor.
5. Access by Lessor: The Lessor may enter, inspect and make such repairs
to the leased property as the Lessor may reasonably desire, at all reasonable
times.
6. Repairs: The Lessor will maintain the exterior of the leased building,
including the roof and exterior walls, in good and substantial repair. The
Lessee will maintain the interior of the leased property, including interior
ceilings, walls, floors, fixtures, pipes, doors and windows, (including plate
glass windows), in good and substantial repair. Interior fixtures and pipes are
those that project from the ceilings, walls and floors into the room; exterior
fixtures and pipes include those concealed behind, over or under the interior
ceilings, walls and floors. The Lessee will maintain all plate glass
(2)
<PAGE> 3
windows and other windows in the leased property in good and substantial repair
and will replace all broken windows regardless of the cause of breaking. The
agreements to repair in this paragraph, except for damage or breaking of plate
glass or other windows not caused by fire, do not apply to any damage caused by
fire or other casualty.
7. Damage by Fire or Other Casualty: If the leased property is damaged by
fire or other casualty to the extent of twenty per centum or more, the Lessor
shall have the option to rebuild and repair the leased property or to terminate
this lease; if damaged to a lesser extent, the Lessor will rebuild and repair.
In the event of damage by fire or other casualty, the rent payable under this
lease shall abate, in proportion to the impairment of the use that can
reasonably be made of the property for the purpose permitted by this lease,
until the property is rebuilt and repaired (or until the lease is terminated, if
terminated in accordance with this paragraph).
8. Waiver and Exemption: Any, constitutional or statutory exemption of
the Lessee or any assignee or sublessee, of any property usually kept on the
leased premises, from distress or forced sale is waived.
9. Addresses: All rent payable and notice given under this lease to the
Lessor shall be paid to 3307 Industrial 25th Street, Ft. Pierce, FL 34950. All
notices given under this lease to the Lessor or any assignee or sublessee of the
Lessee shall be given at the leased premises. Any notice properly mailed by
registered mail, postage and fee prepaid, shall be deemed delivered when mailed,
whether received or not.
(3)
<PAGE> 4
10. Remedies for Failure to Pay Rent: If any rent required by this lease
shall not be paid when due, the Lessor shall have the option to:
(a) Terminate this lease, resume possession of the property for his own
account, and recover immediately from the Lessee the difference between the rent
specified in the lease and the fair rental value of the property for the
remainder of the term, reduce to present worth.
(b) Resume possession and re-lease or rent the property for the remainder
of the term for the account of the Lessee, and recover from the Lessee, at the
end of the term or at the time each payment of rent comes due under this lease
as the Lessor may choose, the difference between the rent specified in the lease
and the rent received on the re-leasing or renting.
In either event, the Lessor shall also recover all expenses incurred by
reason of the breach, including reasonable attorneys' fees.
11. Remedies for Breach of Agreement: If either the Lessor or the Lessee
shall fail to perform, or shall breach any agreement of this lease other than
the agreement of the Lessee to pay rent, for ten (10) days after a written
notice specifying the performance required shall have been given to the party
failing to perform; the party so giving notice may institute action in a Court
of competent jurisdiction to terminate this lease or to compel performance of
the agreement, and the prevailing party to that litigation shall be paid by the
losing party all expenses of such litigation including a reasonable attorneys'
fees.
(4)
<PAGE> 5
12. Option to Extend Term: The Lessee shall have the option to extend the
term of this lease for an additional period of 24 months beginning at 12:01 AM
on February 1, 1994 and ending at 11:59 PM on January 31, 1996, provided that
written notice of the intention of the Lessee to exercise said option shall be
delivered to the Lessor, at his address specified in Paragraph 9, at least three
(3) months prior to the end of the primary term. The terms of the extended
term, shall remain the same as the original term. The rental rate will be
calculated at $5.00 per square foot ($667.00 plus tax monthly).
13. Signs: All exterior signs must have prior approval of the Lessor and
no unsightly signs shall be erected or permitted to remain on the exterior of
the leased property or on either side of the windows or door at the front of the
leased property.
14. Public Utilities and Janitorial Services: The Lessee shall provide
all utilities and inside janitorial services to the premises during the term of
this lease.
15. Maintenance: The Lessee will keep and maintain the leased premises
and the spaces immediately adjoining the front and the rear thereof in a good
and clean condition and will promptly remove or cause to be removed any rubbish
or trash accumulating therein.
16. Warranty of Right to Lease: The Lessor covenants that he owns fee
simple title to all the property described in the first paragraph of this lease
and that he has full and complete right to lease the same.
17. Insurance: The Lessee agrees to obtain at his expense a policy or
policies of liability insurance in company or companies approved by the Lessor,
providing for liability insurance for injuries
(5)
<PAGE> 6
or death of person or persons or damages to property sustained on the demised
premises with limits of $50,000.00 for injury or death or any one person and
$100,000.00 for injuries to, or deaths of, more than one person in any one
accident and $10,000.00 for damage to property. Said Policy or Policies will
be standard owner's, landlords', and tenants; policies and will include the
Lessor as named insured and either the original or a duplicate original will
be delivered to the Lessor and all premiums therefore will be paid by the
Lessee.
18. Maintenance of Air-Conditioner: The lessee will maintain building
air-conditioning unit or units and all parts thereof in good and substantial
repair and working order.
19. Janitorial Service: Lessee will provide its own interior janitorial
service for the areas of the building.
20. Condition of Property at Lease Termination: The Lessee will quietly
surrender possession of the property and vacate same at the end of the original
term, or at the end of the extended term, as the case may be, and return the
property to the Lessor in as good condition as when first occupied, reasonable
wear and tear expected.
21. Ad Valorem Real Estate Taxes: The Lessor will pay municipal and
county ad valorem real estate taxes.
(6)
<PAGE> 7
IN WITNESS WHEREOF, the Lessor has caused these presents to be executed in its
name and the Lessee has hereto set his hand and seal on the day and year first
above written, in two counterparts, either of which may be considered an
original.
Signed, sealed and delivered in
the presence of:
- ------------------------------------ -----------------------------------
WITNESS LESSOR
/s/ Sidney B. Motel
- ------------------------------------ -----------------------------------
WITNESS LESSOR
- ------------------------------------ -----------------------------------
WITNESS LESSEE
/s/ KEITH LARKIN
- ------------------------------------ -----------------------------------
WITNESS LESSEE
(7)
<PAGE> 1
EXHIBIT 10.10
MARKETING AGREEMENT
MARKETING AGREEMENT, dated as of June 26, 1996, between Pro Tech
Communications, Inc. (the "Company"), a Florida corporation with its offices at
3311 Industrial 25th Street, Fort Pierce, Florida 34946 and Martin Goldberg, an
individual residing at 21157 Ormond Court, Boca Raton, Florida 33433 (the
"Representative").
RECITALS:
A. The Company designs, develops, manufactures and distributes
lightweight telecommunication headsets and related products ("Headsets");
B. Representative has the ability and is willing to provide
marketing and distribution services to the Company with respect to the
Headsets; and
C. The Company desires that Representative provide such services
to the Company, subject to the terms and conditions of this Agreement.
NOW THEREFORE, the parties agree as follows:
1. Appointment and Acceptance of Agency. Seller hereby appoints
Representative as its nonexclusive representative with respect to the sale of
the Headsets in the Territory (as defined below), and Representative hereby
accepts such appointment pursuant to the terms and conditions of this
Agreement.
2. Duties of Representative. Except as otherwise agreed in
writing between the parties hereto, Representative shall, from time to time,
generate orders from third parties in the Territory for the purchase of
Headsets and shall relay such orders and any related information to the
Company. Representative shall not be required to generate any particular
volume of sales or dedicate any particular time or effort to acting as a
representative of the Company pursuant to this Agreement. Representative shall
also reasonably assist the Company in connection with any negotiations between
the Company and any third party with respect to the purchase and sale of the
Headsets. Unless otherwise expressly agreed in writing between the parties
hereto, Representative may promote the sale of other products and services of
other companies and organizations in the Territory; provided, however, that
Representative may not promote any product or service which is directly
competitive with the Headsets of the Company. Upon the request of the Company,
Representative shall also generally advise the Company with respect to the
marketing, advertising and distribution of the Headsets in the Territory.
3. Term. This Agreement shall commence as of the date hereof and
shall, subject to Paragraph 9 hereof, expire two year thereafter.
4. Territory Defined. Territory shall mean the United States of
America.
<PAGE> 2
5. Compensation. As full consideration for the services rendered
by the Representative during the term of this Agreement, Representative shall
receive: (i) a sales commission, payable quarterly and based upon revenues
actually collected by the Company, equal to two percent (2%) of the gross
revenues derived solely from the efforts of the Representative to sell the
Headsets in the Territory pursuant to Paragraph 2 hereof; and (ii) the stock
purchase warrant attached hereto as Annex A, granted as of the date hereof.
6. Relationship. Nothing herein shall constitute the
Representative as an employee or agent of the Company, except to such an extent
as the Representative may hereafter agree to in writing for a particular
purpose. Except as expressly agreed in writing, the Representative shall not
have the authority to obligate or commit the Company in any manner whatsoever.
7. Confidential Data.
(a) Representative recognizes and acknowledges that
Company's financial data, intellectual property rights, present and future
plans reduced to a writing and all other proprietary information are valuable,
special and unique assets of the Company. At no time shall Representative
disclose any such information, or any part thereof, to any person, firm,
corporation, association or other entity, without the express consent of
Company, for any reason or purpose whatsoever; provided, however, that such
information has not been intentionally disclosed by Company to the public or
required to be disclosed to a valid governmental authority or as ordered by a
court of competent jurisdiction. If Representative is legally required to make
such disclosure to such governmental authority or court, Representative shall
promptly notify Company in writing and, at Company's sole discretion,
Representative shall with respect to such information make a good faith effort
to obtain confidential treatment from such governmental authority or a
protective order from such court. Company shall reimburse and indemnify
Representative for all reasonable legal fees and expenses as incurred within
ten (10) days of the giving of written notice and statement of the incurred
legal fees and expenses.
(b) In the event of a breach or threatened breach by
Representative of the provisions of this Paragraph 7, Company shall be entitled
to an injunction restraining Representative from disclosing, in whole or in
part, such information, or from rendering any services to any person, firm,
corporation, association or other entity to whom such information, in whole or
in part, has been disclosed or is threatened to be disclosed. Nothing
contained herein shall be construed as prohibiting Company from pursuing any
other remedies available to Company for such breach or threatened breach,
including recovery of damages from Representative. This Paragraph 7 shall
survive the termination of this Agreement.
8. Benefit; Assignment. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their successors, personal
representatives, heirs and permitted assigns. This Agreement shall not be
assigned by a party without the other party's
2
<PAGE> 3
prior written consent. The foregoing notwithstanding, Representative may
assign the benefits of this Agreement to an affiliate thereof.
9. Termination. This Agreement may be terminated by a written
instrument duly executed by the parties hereto, or by either party after
written notice that the other party has breached any material provision of this
agreement and such breach has not been remedied to the satisfaction of the
non-breaching party, on or within fifteen (15) working days from the date that
the breach occurred.
10. Notices. Whenever any notice, payment, or other communication
is required to be given or delivered pursuant to this Agreement, such notice
shall be given in writing and shall be delivered in person or by certified
mail, return receipt requested, and shall be sufficiently given if personally
delivered, or by mail addressed as follows:
If to the Company: Pro Tech Communications, Inc.
3311 Industrial 25th Street
Fort Pierce, Florida 34946
Attn: President
If to the Representative: Martin Goldberg
21157 Ormond Court
Boca Raton, Florida 33433
or to such other address as either party may have by written notice designated
to the other party, given in accordance with this Paragraph 10.
11. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida.
12. Headings. Titles or headings in paragraphs contained in this
Agreement are inserted only as a matter of convenience and for reference and in
no way define, limit, extend, or prescribe the scope of this Agreement or the
intent of any provision.
13. Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
14. Entire Agreement. This Agreement constitutes the entire
agreement and understanding and supersedes all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof.
15. Amendment. This Agreement may not be amended or modified,
except by written agreement of the parties hereto.
3
<PAGE> 4
16. Specified Performance. Each party shall be entitled, without
prejudice to the rights and remedies otherwise available to such party, to
specific performance of all of the other party's obligations hereunder.
Nothing contained in this Agreement shall be construed as limiting the right of
any party hereto to seek such specific performance by bringing suit in a court
of competent jurisdiction.
17. Waiver. The provisions of this Agreement shall not be waived,
modified or amended, except by a subsequent writing signed by a duly authorized
representative of the party sought to be bound. Waiver by a party to a breach
of any of the terms of this Agreement by the other party shall not be deemed a
waiver of future compliance herewith, and such terms shall remain in full force
and effect.
IN WITNESS WHEREOF, the undersigned have cause this Agreement to be
duly executed as of the date first above written.
PRO TECH COMMUNICATIONS, INC.
By:/s/Keith Larkin
---------------------------------------
Name: Keith Larkin
------------------------------------
Title: President
-----------------------------------
Representative
By: /s/ Martin Goldberg
--------------------------------------
Martin Goldberg
4
<PAGE> 1
EXHIBIT 10.11
THIS STOCK PURCHASE WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE
EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, NOR UNDER ANY STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION UNDER SAID ACT AND ANY APPLICABLE STATE
SECURITIES LAWS OR AN OPINION SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
FT. PIERCE, FLORIDA
GRANTED: JUNE 26, 1996
THIS STOCK PURCHASE WARRANT EXPIRES
IF NOT EXERCISED ON OR BEFORE
5:00 P.M., MIAMI TIME, SEPTEMBER 26, 1998
Stock Purchase Warrant
To Purchase 200,000 Shares of Common Stock
par value $.001 per share
of
PRO TECH COMMUNICATIONS, INC.
THIS IS TO CERTIFY that Martin Goldberg ("Goldberg") is entitled upon
the due exercise hereof at any time during the Exercise Period (as hereinafter
defined) to purchase from PRO TECH COMMUNICATIONS, INC. (the "Company"), up to
two hundred thousand (200,000) duly authorized, validly issued, fully paid and
non-assessable shares of common stock, par value $.001 per share, at a price of
One Dollar and Fifty Cents ($1.50) (the "Exercise Price") (subject to
adjustment as provided herein) for each share of such common stock so purchased
and to exercise the other rights, powers and privileges hereinafter provided,
all on the terms and conditions and pursuant to the provisions hereinafter set
forth.
ARTICLE I
DEFINITIONS
The terms defined in this Article I, whenever used in this Stock
Purchase Warrant, shall have the respective meanings hereinafter specified.
Whenever used in this Stock Purchase Warrant, any noun or pronoun shall be
deemed to include both the singular and plural and to cover all genders.
"Common Stock" means the Company's authorized common stock, par value
$.001 per share.
"Company" means Pro Tech Communications, Inc., and any successor
corporation.
<PAGE> 2
"Exercise Period" means the period commencing on September 26, 1996
(three months after the date of grant), and terminating at 5:00 p.m., Miami
time, on September 26, 1998, or such time as otherwise provided herein.
"Exercise Price" means One Dollar and Fifty Cents ($1.50) per share,
as such price may be adjusted from time to time pursuant to Article V.
"Goldberg" means Martin Goldberg.
"Person" means an individual, a corporation, a joint venture, a
general or limited partnership, a trust, an unincorporated organization or a
government or any agency or political subdivision thereof.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal statute, and the rules and regulations of the Securities and
Exchange Commission promulgated thereunder, all as the same shall be in effect
from time to time.
"Stock Purchase Warrant(s)" means this Stock Purchase Warrant.
"Warrant Shares" means shares of Common Stock issued upon the exercise
of this Stock Purchase Warrant.
ARTICLE II
NUMBER OF SHARES; EXERCISE OF STOCK PURCHASE WARRANT
2.1. Number of Shares. This Stock Purchase Warrant shall
entitle Goldberg to subscribe to and purchase up to two hundred thousand
(200,000) shares of Common Stock.
2.2. Right to Exercise. Subject to the provisions contained in
this Stock Purchase Warrant and upon compliance with the conditions of this
Article II, Goldberg shall have the right at any time and from time to time
during the Exercise Period to exercise this Stock Purchase Warrant in whole or
in portions.
2.3. Notice of Exercise; Issuance of Common Stock. To exercise
this Stock Purchase Warrant, Goldberg shall deliver to the Company (a) a Notice
of Exercise substantially in the form attached hereto, duly executed by
Goldberg, (b) an amount equal to the aggregate Exercise Price for the shares of
Common Stock purchased upon due exercise of this Stock Purchase Warrant, (c)
this Stock Purchase Warrant and (d) a certificate executed by Goldberg
certifying that attached thereto is a true and correct copy of the resolutions
or authorizations of the appropriate directors, owners or otherwise, approving
and authorizing the exercise of this Stock Purchase Warrant and the purchase of
the Warrant Shares.
Payment of the Exercise Price shall be made, at the option
of Goldberg, (i) by wire transfer of immediately available funds to an account
in a bank located in the United States designated in writing for such purpose
by the Company or (ii) by certified or official
2
<PAGE> 3
bank check payable to the order of the Company and drawn on a member of the
Chicago or New York Clearing House. Upon receipt thereof, the Company shall,
as promptly as practicable, and in any event within seven (7) business days
thereafter, cause to be issued and delivered to Goldberg, a certificate
representing the aggregate number of duly authorized, validly issued, fully
paid and non-assessable shares of Common Stock purchased pursuant to the
exercise of this Stock Purchase Warrant registered in the name of Goldberg.
The certificates representing such Warrant Shares shall bear the following
legend:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF
WITHOUT REGISTRATION UNDER SUCH ACT OR AN OPINION OF COUNSEL,
REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT
REQUIRED.
Notwithstanding anything contained herein to the contrary,
this Stock Purchase Warrant may not be exercised if the issuance of the shares
of Common Stock upon such exercise would constitute a violation of any
applicable federal or state securities or other applicable laws or regulations.
As a condition to the exercise of this Stock Purchase Warrant, the Company may
require Goldberg to make such representations and agree to such covenants as
may be required by any applicable law or regulation.
This Stock Purchase Warrant shall be deemed to have been
exercised and such certificate shall be deemed to have been issued, and
Goldberg shall be deemed to have become the holder of record of such Warrant
Shares for all purposes as of the close of business on the date the Notice of
Exercise, together with payment and a certificate as herein provided and this
Stock Purchase Warrant, are received by the Company.
2.4. Balance of Stock Purchase Warrant Certificate. Upon
exercise of this Stock Purchase Warrant in part rather than in whole, the
Company shall execute and deliver to Goldberg a new Stock Purchase Warrant
certificate of like tenor evidencing the unexercised portion of the Stock
Purchase Warrant and otherwise in all respects identical with this Stock
Purchase Warrant.
ARTICLE III
REGISTRATION
3.1. Registration; Ownership. The Company will keep a register
in which, subject to such reasonable regulations as it may prescribe, the
Company will provide for the registration of ownership of this Stock Purchase
Warrant. The Company will not at any time, except upon the dissolution,
liquidation or winding up of the Company, close such register so as to result
in preventing or delaying the exercise of this Stock Purchase Warrant.
3
<PAGE> 4
3.2. Replacement of Stock Purchase Warrant. Upon receipt by the
Company of evidence satisfactory to it, in the exercise of reasonable
discretion, of the ownership of and the loss, theft, destruction or mutilation
of any Stock Purchase Warrant and, in case of loss, theft or destruction, the
written agreement of Goldberg to indemnify the Company against any resulting
loss or expense or in case of mutilation upon surrender and cancellation of
such Stock Purchase Warrant, the Company will execute and deliver in lieu
thereof, a new Stock Purchase Warrant of like tenor.
ARTICLE IV
NO ASSIGNMENT OR TRANSFER
Goldberg shall not assign or transfer any of its rights under this
Stock Purchase Warrant. Any purported assignment or transfer of this Stock
Purchase Warrant in violation of this Article IV shall be void.
ARTICLE V
ADJUSTMENT OF SHARES
In the event of any increase or decrease in the number of shares of
Common Stock outstanding by reason of a stock split or reverse stock split, the
number of shares of Common Stock issuable upon the exercise of this Stock
Purchase Warrant and the Exercise Price shall be appropriately adjusted. The
number of shares of Common Stock issuable upon the exercise of this Stock
Purchase Warrant after such stock split or reverse stock split shall be equal
to an amount that Goldberg would have been entitled to, had the Stock Purchase
Warrant been exercised immediately prior to the stock split or reverse stock
split.
In the event that the Company shall at any time increase its
outstanding shares of Common Stock into a greater number of shares of Common
Stock by reason of a stock split, the Exercise Price in effect immediately
prior to such increase shall be proportionately reduced, and, conversely, in
case the outstanding shares of Common Stock shall be reduced into a smaller
number of shares of Common Stock by reason of a reverse stock split, the
Exercise Price in effect immediately prior to such reduction shall be
proportionately increased, calculated by dividing (i) the product of the total
number of shares of Common Stock outstanding prior to the stock split or
reverse stock split, multiplied by the Exercise Price, by (ii) the total number
of shares of Common Stock outstanding after the stock split or reverse stock
split.
4
<PAGE> 5
ARTICLE VI
REGISTRATION RIGHTS
To the extent permitted by applicable law, the Company shall cause the
registration under the Securities Act of the Warrant Shares on a registration
statement on Form S-8 (or any successor form for the registration of securities
issued pursuant to an employee benefit plan). Such registration statement
shall be filed by the Company with the Securities and Exchange Commission as
soon as practicable after the Company has become a reporting company under the
Securities Exchange Act of 1934. In connection with any registration, Goldberg
shall provide the Company with such information regarding Goldberg, the Warrant
Shares and such other information as the Company shall reasonably request.
Goldberg hereby agrees to indemnify the Company and its directors and officers
with respect to any statement in or omission from such registration statement
which was made in reliance upon and in conformity with information furnished to
the Company by Goldberg. The Company shall bear the cost of such registration,
including, but not limited to, all registration and filing fees, and printing
expenses.
ARTICLE VII
MISCELLANEOUS
7.1. Nonwaiver. No course of dealing or any delay or failure to
exercise any right hereunder on the part of Goldberg or the Company shall
operate as a waiver of such right or otherwise prejudice the rights, powers or
remedies of Goldberg or the Company.
7.2. Notice Generally. Any notice, demand or delivery to be
made pursuant to or in connection with this Stock Purchase Warrant shall be
sufficiently given or made if sent by first class mail, postage prepaid,
addressed to (a) Goldberg at its last known address appearing on the books or
register of the Company maintained for such purpose or (b) the Company at 3311
Industrial 25th Street, Ft. Pierce, Florida 34946. Goldberg and the Company
may each designate a different address by written notice to the other pursuant
to this Section 7.2.
7.3. Payment of Certain Expenses. Except as otherwise provided
in this Stock Purchase Warrant, the Company and Goldberg shall each pay their
respective expenses in connection with, and all taxes and other governmental
charges that may be imposed in respect of, the issue, sale and delivery of the
shares of Common Stock issuable upon the exercise of this Stock Purchase
Warrant.
7.4. Amendment. This Stock Purchase Warrant may not be modified
or amended except by written agreement duly executed by the Company and
Goldberg.
5
<PAGE> 6
7.5. Headings. The headings of the Articles and Sections of
this Stock Purchase Warrant are for the convenience of reference only and shall
not, for any purpose, be deemed a part of this Stock Purchase Warrant.
7.6 Governing Law. This Stock Purchase Warrant shall be
governed by the laws of the State of Florida without reference to the conflict
of laws principles thereof.
Date of Grant: June 26, 1996
Pro Tech Communications, Inc.
By: /s/ Keith Larkin
---------------------------------------
Name: Keith Larkin
Title: Chief Executive Officer
6
<PAGE> 7
____________________
Date
Pro Tech Communications, Inc.
3311 Industrial 25th Street
Ft. Pierce, Florida 34946
Re: Exercise of Stock Purchase Warrant
Dear Sir:
Please be advised that pursuant to a Stock Purchase Warrant Agreement
("Agreement"), granted as of June 26, 1996 by Pro Tech Communications, Inc.
(the "Company") to the undersigned, the undersigned hereby exercises the Stock
Purchase Warrant in the amount of ______________ shares of common stock of the
Company and herewith tenders its cashier's check or certified check to the
Company in the amount of ___________________________________ ($__________) in
payment for such shares of common stock. Capitalized terms not otherwise
defined herein are defined as set forth in the Agreement.
The undersigned requests _______ stock certificates for such shares
issued in the name of ________________________________ whose address is
______________________________________ and whose social security number is
_____________________________________.
The undersigned hereby acknowledges, warrants and represents the
following:
(1) The undersigned's acknowledgements, representations,
warranties and agreements contained in the Agreement are true, complete and
accurate as of the date of this letter.
(2) The Stock Purchase Warrant is presently exercisable and as
such, has vested and has not expired.
(3) The undersigned is presently and has been in full
compliance with all the terms, conditions and provisions of the Agreement.
Sincerely,
------------------------------
<PAGE> 1
EXHIBIT 10.12
MARKETING AGREEMENT
MARKETING AGREEMENT, dated as of June 26, 1996, between Pro Tech
Communications, Inc. (the "Company"), a Florida corporation with its offices at
3311 Industrial 25th Street, Fort Pierce, Florida 34946 and Costas Takkas
("Representative"), c/o NICO Commerce Corporation, P.O. Box 1436, Georgetown,
Grand Cayman Islands, B.W.I. (the "Representative").
RECITALS:
A. The Company designs, develops, manufactures and distributes
lightweight telecommunication headsets and related products ("Headsets");
B. Representative has the ability and is willing to provide
marketing and distribution services to the Company with respect to the
Headsets; and
C. The Company desires that Representative provide such services
to the Company, subject to the terms and conditions of this Agreement.
NOW THEREFORE, the parties agree as follows:
1. Appointment and Acceptance of Agency. Seller hereby appoints
Representative as its nonexclusive representative with respect to the sale of
the Headsets in the Territory (as defined below), and Representative hereby
accepts such appointment pursuant to the terms and conditions of this
Agreement.
2. Duties of Representative. Except as otherwise agreed in
writing between the parties hereto, Representative shall, from time to time,
generate orders from third parties in the Territory for the purchase of
Headsets and shall relay such orders and any related information to the
Company. Representative shall not be required to generate any particular
volume of sales or dedicate any particular time or effort to acting as a
representative of the Company pursuant to this Agreement. Representative shall
also reasonably assist the Company in connection with any negotiations between
the Company and any third party with respect to the purchase and sale of the
Headsets. Unless otherwise expressly agreed in writing between the parties
hereto, Representative may promote the sale of other products and services of
other companies and organizations in the Territory; provided, however, that
Representative may not promote any product or service which is directly
competitive with the Headsets of the Company. Upon the request of the Company,
Representative shall also generally advise the Company with respect to the
marketing, advertising and distribution of the Headsets in the Territory.
3. Term. This Agreement shall commence as of the date hereof and
shall, subject to Paragraph 9 hereof, expire two year thereafter.
4. Territory Defined. Territory shall mean Central America,
South America and the Caribbean.
<PAGE> 2
5. Compensation. As full consideration for the services rendered
by the Representative during the term of this Agreement, Representative shall
receive: (i) a sales commission, payable quarterly and based upon revenues
actually collected by the Company, equal to two percent (2%) of the gross
revenues derived solely from the efforts of the Representative to sell the
Headsets in the Territory pursuant to Paragraph 2 hereof; and (ii) the stock
purchase warrant attached hereto as Annex A, granted as of the date hereof.
6. Relationship. Nothing herein shall constitute the
Representative as an employee or agent of the Company, except to such an extent
as the Representative may hereafter agree to in writing for a particular
purpose. Except as expressly agreed in writing, the Representative shall not
have the authority to obligate or commit the Company in any manner whatsoever.
7. Confidential Data.
(a) Representative recognizes and acknowledges that
Company's financial data, intellectual property rights, present and future
plans reduced to a writing and all other proprietary information are valuable,
special and unique assets of the Company. At no time shall Representative
disclose any such information, or any part thereof, to any person, firm,
corporation, association or other entity, without the express consent of
Company, for any reason or purpose whatsoever; provided, however, that such
information has not been intentionally disclosed by Company to the public or
required to be disclosed to a valid governmental authority or as ordered by a
court of competent jurisdiction. If Representative is legally required to make
such disclosure to such governmental authority or court, Representative shall
promptly notify Company in writing and, at Company's sole discretion,
Representative shall with respect to such information make a good faith effort
to obtain confidential treatment from such governmental authority or a
protective order from such court. Company shall reimburse and indemnify
Representative for all reasonable legal fees and expenses as incurred within
ten (10) days of the giving of written notice and statement of the incurred
legal fees and expenses.
(b) In the event of a breach or threatened breach by
Representative of the provisions of this Paragraph 7, Company shall be entitled
to an injunction restraining Representative from disclosing, in whole or in
part, such information, or from rendering any services to any person, firm,
corporation, association or other entity to whom such information, in whole or
in part, has been disclosed or is threatened to be disclosed. Nothing
contained herein shall be construed as prohibiting Company from pursuing any
other remedies available to Company for such breach or threatened breach,
including recovery of damages from Representative. This Paragraph 7 shall
survive the termination of this Agreement.
8. Benefit; Assignment. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their successors, personal
representatives, heirs and permitted assigns. This Agreement shall not be
assigned by a party without the other party's
2
<PAGE> 3
prior written consent. The foregoing notwithstanding, Representative may
assign the benefits of this Agreement to an affiliate thereof.
9. Termination. This Agreement may be terminated by a written
instrument duly executed by the parties hereto, or by either party after
written notice that the other party has breached any material provision of this
agreement and such breach has not been remedied to the satisfaction of the
non-breaching party, on or within fifteen (15) working days from the date that
the breach occurred.
10. Notices. Whenever any notice, payment, or other communication
is required to be given or delivered pursuant to this Agreement, such notice
shall be given in writing and shall be delivered in person or by certified
mail, return receipt requested, and shall be sufficiently given if personally
delivered, or by mail addressed as follows:
If to the Company: Pro Tech Communications, Inc.
3311 Industrial 25th Street
Fort Pierce, Florida 34946
Attn: President
If to the Representative: Costas Takkas
NICO Commerce Corporation
P.O. Box 1436
Georgetown, Grand Cayman Islands,
B.W.I.
or to such other address as either party may have by written notice designated
to the other party, given in accordance with this Paragraph 10.
11. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida.
12. Headings. Titles or headings in paragraphs contained in this
Agreement are inserted only as a matter of convenience and for reference and in
no way define, limit, extend, or prescribe the scope of this Agreement or the
intent of any provision.
13. Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
14. Entire Agreement. This Agreement constitutes the entire
agreement and understanding and supersedes all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof.
15. Amendment. This Agreement may not be amended or modified,
except by written agreement of the parties hereto.
3
<PAGE> 4
16. Specified Performance. Each party shall be entitled, without
prejudice to the rights and remedies otherwise available to such party, to
specific performance of all of the other party's obligations hereunder.
Nothing contained in this Agreement shall be construed as limiting the right of
any party hereto to seek such specific performance by bringing suit in a court
of competent jurisdiction.
17. Waiver. The provisions of this Agreement shall not be waived,
modified or amended, except by a subsequent writing signed by a duly authorized
representative of the party sought to be bound. Waiver by a party to a breach
of any of the terms of this Agreement by the other party shall not be deemed a
waiver of future compliance herewith, and such terms shall remain in full force
and effect.
IN WITNESS WHEREOF, the undersigned have cause this Agreement to be
duly executed as of the date first above written.
PRO TECH COMMUNICATIONS, INC.
By: /s/ Keith Larkin
--------------------------------------
Name: Keith Larkin
-----------------------------------
Title:
----------------------------------
Representative
By: /s/Costas Takkas
-------------------------------------
Costas Takkas
4
<PAGE> 1
EXHIBIT 10.13
THIS STOCK PURCHASE WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE
EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, NOR UNDER ANY STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION UNDER SAID ACT AND ANY APPLICABLE STATE
SECURITIES LAWS OR AN OPINION SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
FT. PIERCE, FLORIDA
GRANTED: JUNE 26, 1996
THIS STOCK PURCHASE WARRANT EXPIRES
IF NOT EXERCISED ON OR BEFORE
5:00 P.M., MIAMI TIME, SEPTEMBER 26, 1998
Stock Purchase Warrant
To Purchase 200,000 Shares of Common Stock
par value $.001 per share
of
PRO TECH COMMUNICATIONS, INC.
THIS IS TO CERTIFY that Costas Takkas ("Takkas") is entitled upon the
due exercise hereof at any time during the Exercise Period (as hereinafter
defined) to purchase from PRO TECH COMMUNICATIONS, INC. (the "Company"), up to
two hundred thousand (200,000) duly authorized, validly issued, fully paid and
non-assessable shares of common stock, par value $.001 per share, at a price of
One Dollar and Fifty Cents ($1.50) (the "Exercise Price") (subject to
adjustment as provided herein) for each share of such common stock so purchased
and to exercise the other rights, powers and privileges hereinafter provided,
all on the terms and conditions and pursuant to the provisions hereinafter set
forth.
ARTICLE I
DEFINITIONS
The terms defined in this Article I, whenever used in this
Stock Purchase Warrant, shall have the respective meanings hereinafter
specified. Whenever used in this Stock Purchase Warrant, any noun or
pronoun shall be deemed to include both the singular and plural and to
cover all genders.
"Common Stock" means the Company's authorized common stock, par value
$.001 per share.
"Company" means Pro Tech Communications, Inc., and any successor
corporation.
<PAGE> 2
"Exercise Period" means the period commencing on September 26, 1996
(three months after the date of grant), and terminating at 5:00 p.m., Miami
time, on September 26, 1998, or such time as otherwise provided herein.
"Exercise Price" means One Dollar and Fifty Cents ($1.50) per share,
as such price may be adjusted from time to time pursuant to Article V.
"Person" means an individual, a corporation, a joint venture, a
general or limited partnership, a trust, an unincorporated organization or a
government or any agency or political subdivision thereof.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal statute, and the rules and regulations of the Securities and
Exchange Commission promulgated thereunder, all as the same shall be in effect
from time to time.
"Stock Purchase Warrant(s)" means this Stock Purchase Warrant.
"Takkas" means Costas Takkas.
"Warrant Shares" means shares of Common Stock issued upon the exercise
of this Stock Purchase Warrant.
ARTICLE II
NUMBER OF SHARES; EXERCISE OF STOCK PURCHASE WARRANT
2.1. Number of Shares. This Stock Purchase Warrant shall
entitle Takkas to subscribe to and purchase up to two hundred thousand
(200,000) shares of Common Stock.
2.2. Right to Exercise. Subject to the provisions contained in
this Stock Purchase Warrant and upon compliance with the conditions of this
Article II, Takkas shall have the right at any time and from time to time
during the Exercise Period to exercise this Stock Purchase Warrant in whole or
in portions.
2.3. Notice of Exercise; Issuance of Common Stock. To exercise
this Stock Purchase Warrant, Takkas shall deliver to the Company (a) a Notice
of Exercise substantially in the form attached hereto, duly executed by Takkas,
(b) an amount equal to the aggregate Exercise Price for the shares of Common
Stock purchased upon due exercise of this Stock Purchase Warrant, (c) this
Stock Purchase Warrant and (d) a certificate executed by Takkas certifying that
attached thereto is a true and correct copy of the resolutions or
authorizations of the appropriate directors, owners or otherwise, approving and
authorizing the exercise of this Stock Purchase Warrant and the purchase of the
Warrant Shares.
Payment of the Exercise Price shall be made, at the option
of Takkas, (i) by wire transfer of immediately available funds to an account in
a bank located in the United States designated in writing for such purpose by
the Company or (ii) by certified or official
2
<PAGE> 3
bank check payable to the order of the Company and drawn on a member of the
Chicago or New York Clearing House. Upon receipt thereof, the Company shall,
as promptly as practicable, and in any event within seven (7) business days
thereafter, cause to be issued and delivered to Takkas, a certificate
representing the aggregate number of duly authorized, validly issued, fully
paid and non-assessable shares of Common Stock purchased pursuant to the
exercise of this Stock Purchase Warrant registered in the name of Takkas. The
certificates representing such Warrant Shares shall bear the following legend:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF
WITHOUT REGISTRATION UNDER SUCH ACT OR AN OPINION OF COUNSEL,
REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT
REQUIRED.
Notwithstanding anything contained herein to the contrary,
this Stock Purchase Warrant may not be exercised if the issuance of the shares
of Common Stock upon such exercise would constitute a violation of any
applicable federal or state securities or other applicable laws or regulations.
As a condition to the exercise of this Stock Purchase Warrant, the Company may
require Takkas to make such representations and agree to such covenants as may
be required by any applicable law or regulation.
This Stock Purchase Warrant shall be deemed to have been
exercised and such certificate shall be deemed to have been issued, and Takkas
shall be deemed to have become the holder of record of such Warrant Shares for
all purposes as of the close of business on the date the Notice of Exercise,
together with payment and a certificate as herein provided and this Stock
Purchase Warrant, are received by the Company.
2.4. Balance of Stock Purchase Warrant Certificate. Upon
exercise of this Stock Purchase Warrant in part rather than in whole, the
Company shall execute and deliver to Takkas a new Stock Purchase Warrant
certificate of like tenor evidencing the unexercised portion of the Stock
Purchase Warrant and otherwise in all respects identical with this Stock
Purchase Warrant.
ARTICLE III
REGISTRATION
3.1. Registration; Ownership. The Company will keep a register
in which, subject to such reasonable regulations as it may prescribe, the
Company will provide for the registration of ownership of this Stock Purchase
Warrant. The Company will not at any time, except upon the dissolution,
liquidation or winding up of the Company, close such register so as to result
in preventing or delaying the exercise of this Stock Purchase Warrant.
3
<PAGE> 4
3.2. Replacement of Stock Purchase Warrant. Upon receipt by the
Company of evidence satisfactory to it, in the exercise of reasonable
discretion, of the ownership of and the loss, theft, destruction or mutilation
of any Stock Purchase Warrant and, in case of loss, theft or destruction, the
written agreement of Takkas to indemnify the Company against any resulting loss
or expense or in case of mutilation upon surrender and cancellation of such
Stock Purchase Warrant, the Company will execute and deliver in lieu thereof, a
new Stock Purchase Warrant of like tenor.
ARTICLE IV
NO ASSIGNMENT OR TRANSFER
Takkas shall not assign or transfer any of its rights under this Stock
Purchase Warrant. Any purported assignment or transfer of this Stock Purchase
Warrant in violation of this Article IV shall be void.
ARTICLE V
ADJUSTMENT OF SHARES
In the event of any increase or decrease in the number of shares of
Common Stock outstanding by reason of a stock split or reverse stock split, the
number of shares of Common Stock issuable upon the exercise of this Stock
Purchase Warrant and the Exercise Price shall be appropriately adjusted. The
number of shares of Common Stock issuable upon the exercise of this Stock
Purchase Warrant after such stock split or reverse stock split shall be equal
to an amount that Takkas would have been entitled to, had the Stock Purchase
Warrant been exercised immediately prior to the stock split or reverse stock
split.
In the event that the Company shall at any time increase its
outstanding shares of Common Stock into a greater number of shares of Common
Stock by reason of a stock split, the Exercise Price in effect immediately
prior to such increase shall be proportionately reduced, and, conversely, in
case the outstanding shares of Common Stock shall be reduced into a smaller
number of shares of Common Stock by reason of a reverse stock split, the
Exercise Price in effect immediately prior to such reduction shall be
proportionately increased, calculated by dividing (i) the product of the total
number of shares of Common Stock outstanding prior to the stock split or
reverse stock split, multiplied by the Exercise Price, by (ii) the total number
of shares of Common Stock outstanding after the stock split or reverse stock
split.
4
<PAGE> 5
ARTICLE VI
REGISTRATION RIGHTS
To the extent permitted by applicable law, the Company shall cause the
registration under the Securities Act of the Warrant Shares on a registration
statement on Form S-8 (or any successor form for the registration of securities
issued pursuant to an employee benefit plan). Such registration statement
shall be filed by the Company with the Securities and Exchange Commission as
soon as practicable after the Company has become a reporting company under the
Securities Exchange Act of 1934. In connection with any registration, Takkas
shall provide the Company with such information regarding Takkas, the Warrant
Shares and such other information as the Company shall reasonably request.
Takkas hereby agrees to indemnify the Company and its directors and officers
with respect to any statement in or omission from such registration statement
which was made in reliance upon and in conformity with information furnished to
the Company by Takkas. The Company shall bear the cost of such registration,
including, but not limited to, all registration and filing fees, and printing
expenses.
ARTICLE VII
MISCELLANEOUS
7.1. Nonwaiver. No course of dealing or any delay or failure to
exercise any right hereunder on the part of Takkas or the Company shall operate
as a waiver of such right or otherwise prejudice the rights, powers or remedies
of Takkas or the Company.
7.2. Notice Generally. Any notice, demand or delivery to be
made pursuant to or in connection with this Stock Purchase Warrant shall be
sufficiently given or made if sent by first class mail, postage prepaid,
addressed to (a) Takkas at its last known address appearing on the books or
register of the Company maintained for such purpose or (b) the Company at 3311
Industrial 25th Street, Ft. Pierce, Florida 34946. Takkas and the Company may
each designate a different address by written notice to the other pursuant to
this Section 7.2.
7.3. Payment of Certain Expenses. Except as otherwise provided
in this Stock Purchase Warrant, the Company and Takkas shall each pay their
respective expenses in connection with, and all taxes and other governmental
charges that may be imposed in respect of, the issue, sale and delivery of the
shares of Common Stock issuable upon the exercise of this Stock Purchase
Warrant.
7.4. Amendment. This Stock Purchase Warrant may not be modified
or amended except by written agreement duly executed by the Company and Takkas.
5
<PAGE> 6
7.5. Headings. The headings of the Articles and Sections of
this Stock Purchase Warrant are for the convenience of reference only and shall
not, for any purpose, be deemed a part of this Stock Purchase Warrant.
7.6 Governing Law. This Stock Purchase Warrant shall be
governed by the laws of the State of Florida without reference to the conflict
of laws principles thereof.
Date of Grant: June 26, 1996
Pro Tech Communications, Inc.
By: /s/ Keith Larkin
--------------------------------------
Name: Keith Larkin
Title: Chief Executive Officer
6
<PAGE> 7
____________________
Date
Pro Tech Communications, Inc.
3311 Industrial 25th Street
Ft. Pierce, Florida 34946
Re: Exercise of Stock Purchase Warrant
Dear Sir:
Please be advised that pursuant to a Stock Purchase Warrant Agreement
("Agreement"), granted as of June 26, 1996 by Pro Tech Communications, Inc.
(the "Company") to the undersigned, the undersigned hereby exercises the Stock
Purchase Warrant in the amount of ______________ shares of common stock of the
Company and herewith tenders its cashier's check or certified check to the
Company in the amount of ___________________________________ ($__________) in
payment for such shares of common stock. Capitalized terms not otherwise
defined herein are defined as set forth in the Agreement.
The undersigned requests _______ stock certificates for such shares
issued in the name of ________________________________ whose address is
______________________________________ and whose social security number is
_____________________________________.
The undersigned hereby acknowledges, warrants and represents the
following:
(1) The undersigned's acknowledgements, representations,
warranties and agreements contained in the Agreement are true, complete and
accurate as of the date of this letter.
(2) The Stock Purchase Warrant is presently exercisable and as
such, has vested and has not expired.
(3) The undersigned is presently and has been in full
compliance with all the terms, conditions and provisions of the Agreement.
Sincerely,
------------------------------
<PAGE> 1
EXHIBIT 10.14
MARKETING AGREEMENT
MARKETING AGREEMENT, dated as of June 26, 1996, between Pro Tech
Communications, Inc. (the "Company"), a Florida corporation with its offices at
3311 Industrial 25th Street, Fort Pierce, Florida 34946 and Donald Fraser
("Representative"), c/o Euro-Trade International, Ltd., P.O. Box 341,
Georgetown, Grand Cayman Islands, B.W.I.
RECITALS:
A. The Company designs, develops, manufactures and distributes
lightweight telecommunication headsets and related products ("Headsets");
B. Representative has the ability and is willing to provide
marketing and distribution services to the Company with respect to the
Headsets; and
C. The Company desires that Representative provide such services
to the Company, subject to the terms and conditions of this Agreement.
NOW THEREFORE, the parties agree as follows:
1. Appointment and Acceptance of Agency. Seller hereby appoints
Representative as its nonexclusive representative with respect to the sale of
the Headsets in the Territory (as defined below), and Representative hereby
accepts such appointment pursuant to the terms and conditions of this
Agreement.
2. Duties of Representative. Except as otherwise agreed in
writing between the parties hereto, Representative shall, from time to time,
generate orders from third parties in the Territory for the purchase of
Headsets and shall relay such orders and any related information to the
Company. Representative shall not be required to generate any particular
volume of sales or dedicate any particular time or effort to acting as a
representative of the Company pursuant to this Agreement. Representative shall
also reasonably assist the Company in connection with any negotiations between
the Company and any third party with respect to the purchase and sale of the
Headsets. Unless otherwise expressly agreed in writing between the parties
hereto, Representative may promote the sale of other products and services of
other companies and organizations in the Territory; provided, however, that
Representative may not promote any product or service which is directly
competitive with the Headsets of the Company. Upon the request of the Company,
Representative shall also generally advise the Company with respect to the
marketing, advertising and distribution of the Headsets in the Territory.
3. Term. This Agreement shall commence as of the date hereof and
shall, subject to Paragraph 9 hereof, expire two year thereafter.
4. Territory Defined. Territory shall mean all places other than
the United States of America, Central America, South America and the Caribbean.
<PAGE> 2
5. Compensation. As full consideration for the services rendered
by the Representative during the term of this Agreement, Representative shall
receive: (i) a sales commission, payable quarterly and based upon revenues
actually collected by the Company, equal to two percent (2%) of the gross
revenues derived solely from the efforts of the Representative to sell the
Headsets in the Territory pursuant to Paragraph 2 hereof; and (ii) the stock
purchase warrant attached hereto as Annex A, granted as of the date hereof.
6. Relationship. Nothing herein shall constitute the
Representative as an employee or agent of the Company, except to such an extent
as the Representative may hereafter agree to in writing for a particular
purpose. Except as expressly agreed in writing, the Representative shall not
have the authority to obligate or commit the Company in any manner whatsoever.
7. Confidential Data.
(a) Representative recognizes and acknowledges that
Company's financial data, intellectual property rights, present and future
plans reduced to a writing and all other proprietary information are valuable,
special and unique assets of the Company. At no time shall Representative
disclose any such information, or any part thereof, to any person, firm,
corporation, association or other entity, without the express consent of
Company, for any reason or purpose whatsoever; provided, however, that such
information has not been intentionally disclosed by Company to the public or
required to be disclosed to a valid governmental authority or as ordered by a
court of competent jurisdiction. If Representative is legally required to make
such disclosure to such governmental authority or court, Representative shall
promptly notify Company in writing and, at Company's sole discretion,
Representative shall with respect to such information make a good faith effort
to obtain confidential treatment from such governmental authority or a
protective order from such court. Company shall reimburse and indemnify
Representative for all reasonable legal fees and expenses as incurred within
ten (10) days of the giving of written notice and statement of the incurred
legal fees and expenses.
(b) In the event of a breach or threatened breach by
Representative of the provisions of this Paragraph 7, Company shall be entitled
to an injunction restraining Representative from disclosing, in whole or in
part, such information, or from rendering any services to any person, firm,
corporation, association or other entity to whom such information, in whole or
in part, has been disclosed or is threatened to be disclosed. Nothing
contained herein shall be construed as prohibiting Company from pursuing any
other remedies available to Company for such breach or threatened breach,
including recovery of damages from Representative. This Paragraph 7 shall
survive the termination of this Agreement.
8. Benefit; Assignment. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their successors, personal
representatives, heirs and permitted assigns. This Agreement shall not be
assigned by a party without the other party's
2
<PAGE> 3
prior written consent. The foregoing notwithstanding, Representative may
assign the benefits of this Agreement to an affiliate thereof.
9. Termination. This Agreement may be terminated by a written
instrument duly executed by the parties hereto, or by either party after
written notice that the other party has breached any material provision of this
agreement and such breach has not been remedied to the satisfaction of the
non-breaching party, on or within fifteen (15) working days from the date that
the breach occurred.
10. Notices. Whenever any notice, payment, or other communication
is required to be given or delivered pursuant to this Agreement, such notice
shall be given in writing and shall be delivered in person or by certified
mail, return receipt requested, and shall be sufficiently given if personally
delivered, or by mail addressed as follows:
If to the Company: Pro Tech Communications, Inc.
3311 Industrial 25th Street
Fort Pierce, Florida 34946
Attn: President
If to the Representative: Donald Fraser
Euro-Trade International, Ltd.
P.O. Box 341
Georgetown, Grand Cayman Islands,
B.W.I.
or to such other address as either party may have by written notice designated
to the other party, given in accordance with this Paragraph 10.
11. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida.
12. Headings. Titles or headings in paragraphs contained in this
Agreement are inserted only as a matter of convenience and for reference and in
no way define, limit, extend, or prescribe the scope of this Agreement or the
intent of any provision.
13. Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
14. Entire Agreement. This Agreement constitutes the entire
agreement and understanding and supersedes all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof.
15. Amendment. This Agreement may not be amended or modified,
except by written agreement of the parties hereto.
3
<PAGE> 4
16. Specified Performance. Each party shall be entitled, without
prejudice to the rights and remedies otherwise available to such party, to
specific performance of all of the other party's obligations hereunder.
Nothing contained in this Agreement shall be construed as limiting the right of
any party hereto to seek such specific performance by bringing suit in a court
of competent jurisdiction.
17. Waiver. The provisions of this Agreement shall not be waived,
modified or amended, except by a subsequent writing signed by a duly authorized
representative of the party sought to be bound. Waiver by a party to a breach
of any of the terms of this Agreement by the other party shall not be deemed a
waiver of future compliance herewith, and such terms shall remain in full force
and effect.
IN WITNESS WHEREOF, the undersigned have cause this Agreement to be
duly executed as of the date first above written.
PRO TECH COMMUNICATIONS, INC.
By:/s/ Keith Larkin
--------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Representative
By: /s/ Donald Fraser
-------------------------------------
Donald Fraser
4
<PAGE> 1
EXHIBIT 10.15
THIS STOCK PURCHASE WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE
EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, NOR UNDER ANY STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION UNDER SAID ACT AND ANY APPLICABLE STATE
SECURITIES LAWS OR AN OPINION SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
FT. PIERCE, FLORIDA
GRANTED: JUNE 26, 1996
THIS STOCK PURCHASE WARRANT EXPIRES
IF NOT EXERCISED ON OR BEFORE
5:00 P.M., MIAMI TIME, SEPTEMBER 26, 1998
Stock Purchase Warrant
To Purchase 200,000 Shares of Common Stock
par value $.001 per share
of
PRO TECH COMMUNICATIONS, INC.
THIS IS TO CERTIFY that Donald Fraser ("Fraser") is entitled upon the
due exercise hereof at any time during the Exercise Period (as hereinafter
defined) to purchase from PRO TECH COMMUNICATIONS, INC. (the "Company"), up to
two hundred thousand (200,000) duly authorized, validly issued, fully paid and
non-assessable shares of common stock, par value $.001 per share, at a price of
One Dollar and Fifty Cents ($1.50) (the "Exercise Price") (subject to
adjustment as provided herein) for each share of such common stock so purchased
and to exercise the other rights, powers and privileges hereinafter provided,
all on the terms and conditions and pursuant to the provisions hereinafter set
forth.
ARTICLE I
DEFINITIONS
The terms defined in this Article I, whenever used in this Stock
Purchase Warrant, shall have the respective meanings hereinafter specified.
Whenever used in this Stock Purchase Warrant, any noun or pronoun shall be
deemed to include both the singular and plural and to cover all genders.
"Common Stock" means the Company's authorized common stock, par value
$.001 per share.
"Company" means Pro Tech Communications, Inc., and any successor
corporation.
<PAGE> 2
"Exercise Period" means the period commencing on September 26, 1996
(three months after the date of grant), and terminating at 5:00 p.m., Miami
time, on September 26, 1998, or such time as otherwise provided herein.
"Exercise Price" means One Dollar and Fifty Cents ($1.50) per share,
as such price may be adjusted from time to time pursuant to Article V.
"Fraser" means Donald Fraser.
"Person" means an individual, a corporation, a joint venture, a
general or limited partnership, a trust, an unincorporated organization or a
government or any agency or political subdivision thereof.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal statute, and the rules and regulations of the Securities and
Exchange Commission promulgated thereunder, all as the same shall be in effect
from time to time.
"Stock Purchase Warrant(s)" means this Stock Purchase Warrant.
"Warrant Shares" means shares of Common Stock issued upon the exercise
of this Stock Purchase Warrant.
ARTICLE II
NUMBER OF SHARES; EXERCISE OF STOCK PURCHASE WARRANT
2.1. Number of Shares. This Stock Purchase Warrant shall
entitle Fraser to subscribe to and purchase up to two hundred thousand
(200,000) shares of Common Stock.
2.2. Right to Exercise. Subject to the provisions contained in
this Stock Purchase Warrant and upon compliance with the conditions of this
Article II, Fraser shall have the right at any time and from time to time
during the Exercise Period to exercise this Stock Purchase Warrant in whole or
in portions.
2.3. Notice of Exercise; Issuance of Common Stock. To exercise
this Stock Purchase Warrant, Fraser shall deliver to the Company (a) a Notice
of Exercise substantially in the form attached hereto, duly executed by Fraser,
(b) an amount equal to the aggregate Exercise Price for the shares of Common
Stock purchased upon due exercise of this Stock Purchase Warrant, (c) this
Stock Purchase Warrant and (d) a certificate executed by Fraser certifying that
attached thereto is a true and correct copy of the resolutions or
authorizations of the appropriate directors, owners or otherwise, approving and
authorizing the exercise of this Stock Purchase Warrant and the purchase of the
Warrant Shares.
Payment of the Exercise Price shall be made, at the option
of Fraser, (i) by wire transfer of immediately available funds to an account in
a bank located in the United States designated in writing for such purpose by
the Company or (ii) by certified or official
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bank check payable to the order of the Company and drawn on a member of the
Chicago or New York Clearing House. Upon receipt thereof, the Company shall,
as promptly as practicable, and in any event within seven (7) business days
thereafter, cause to be issued and delivered to Fraser, a certificate
representing the aggregate number of duly authorized, validly issued, fully
paid and non-assessable shares of Common Stock purchased pursuant to the
exercise of this Stock Purchase Warrant registered in the name of Fraser. The
certificates representing such Warrant Shares shall bear the following legend:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF
WITHOUT REGISTRATION UNDER SUCH ACT OR AN OPINION OF COUNSEL,
REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT
REQUIRED.
Notwithstanding anything contained herein to the contrary,
this Stock Purchase Warrant may not be exercised if the issuance of the shares
of Common Stock upon such exercise would constitute a violation of any
applicable federal or state securities or other applicable laws or regulations.
As a condition to the exercise of this Stock Purchase Warrant, the Company may
require Fraser to make such representations and agree to such covenants as may
be required by any applicable law or regulation.
This Stock Purchase Warrant shall be deemed to have been
exercised and such certificate shall be deemed to have been issued, and Fraser
shall be deemed to have become the holder of record of such Warrant Shares for
all purposes as of the close of business on the date the Notice of Exercise,
together with payment and a certificate as herein provided and this Stock
Purchase Warrant, are received by the Company.
2.4. Balance of Stock Purchase Warrant Certificate. Upon
exercise of this Stock Purchase Warrant in part rather than in whole, the
Company shall execute and deliver to Fraser a new Stock Purchase Warrant
certificate of like tenor evidencing the unexercised portion of the Stock
Purchase Warrant and otherwise in all respects identical with this Stock
Purchase Warrant.
ARTICLE III
REGISTRATION
3.1. Registration; Ownership. The Company will keep a register
in which, subject to such reasonable regulations as it may prescribe, the
Company will provide for the registration of ownership of this Stock Purchase
Warrant. The Company will not at any time, except upon the dissolution,
liquidation or winding up of the Company, close such register so as to result
in preventing or delaying the exercise of this Stock Purchase Warrant.
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<PAGE> 4
3.2. Replacement of Stock Purchase Warrant. Upon receipt by the
Company of evidence satisfactory to it, in the exercise of reasonable
discretion, of the ownership of and the loss, theft, destruction or mutilation
of any Stock Purchase Warrant and, in case of loss, theft or destruction, the
written agreement of Fraser to indemnify the Company against any resulting loss
or expense or in case of mutilation upon surrender and cancellation of such
Stock Purchase Warrant, the Company will execute and deliver in lieu thereof, a
new Stock Purchase Warrant of like tenor.
ARTICLE IV
NO ASSIGNMENT OR TRANSFER
Fraser shall not assign or transfer any of its rights under this Stock
Purchase Warrant. Any purported assignment or transfer of this Stock Purchase
Warrant in violation of this Article IV shall be void.
ARTICLE V
ADJUSTMENT OF SHARES
In the event of any increase or decrease in the number of shares of
Common Stock outstanding by reason of a stock split or reverse stock split, the
number of shares of Common Stock issuable upon the exercise of this Stock
Purchase Warrant and the Exercise Price shall be appropriately adjusted. The
number of shares of Common Stock issuable upon the exercise of this Stock
Purchase Warrant after such stock split or reverse stock split shall be equal
to an amount that Fraser would have been entitled to, had the Stock Purchase
Warrant been exercised immediately prior to the stock split or reverse stock
split.
In the event that the Company shall at any time increase its
outstanding shares of Common Stock into a greater number of shares of Common
Stock by reason of a stock split, the Exercise Price in effect immediately
prior to such increase shall be proportionately reduced, and, conversely, in
case the outstanding shares of Common Stock shall be reduced into a smaller
number of shares of Common Stock by reason of a reverse stock split, the
Exercise Price in effect immediately prior to such reduction shall be
proportionately increased, calculated by dividing (i) the product of the total
number of shares of Common Stock outstanding prior to the stock split or
reverse stock split, multiplied by the Exercise Price, by (ii) the total number
of shares of Common Stock outstanding after the stock split or reverse stock
split.
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ARTICLE VI
REGISTRATION RIGHTS
To the extent permitted by applicable law, the Company shall cause the
registration under the Securities Act of the Warrant Shares on a registration
statement on Form S-8 (or any successor form for the registration of securities
issued pursuant to an employee benefit plan). Such registration statement
shall be filed by the Company with the Securities and Exchange Commission as
soon as practicable after the Company has become a reporting company under the
Securities Exchange Act of 1934. In connection with any registration, Fraser
shall provide the Company with such information regarding Fraser, the Warrant
Shares and such other information as the Company shall reasonably request.
Fraser hereby agrees to indemnify the Company and its directors and officers
with respect to any statement in or omission from such registration statement
which was made in reliance upon and in conformity with information furnished to
the Company by Fraser. The Company shall bear the cost of such registration,
including, but not limited to, all registration and filing fees, and printing
expenses.
ARTICLE VII
MISCELLANEOUS
7.1. Nonwaiver. No course of dealing or any delay or failure to
exercise any right hereunder on the part of Fraser or the Company shall operate
as a waiver of such right or otherwise prejudice the rights, powers or remedies
of Fraser or the Company.
7.2. Notice Generally. Any notice, demand or delivery to be
made pursuant to or in connection with this Stock Purchase Warrant shall be
sufficiently given or made if sent by first class mail, postage prepaid,
addressed to (a) Fraser at its last known address appearing on the books or
register of the Company maintained for such purpose or (b) the Company at 3311
Industrial 25th Street, Ft. Pierce, Florida 34946. Fraser and the Company may
each designate a different address by written notice to the other pursuant to
this Section 7.2.
7.3. Payment of Certain Expenses. Except as otherwise provided
in this Stock Purchase Warrant, the Company and Fraser shall each pay their
respective expenses in connection with, and all taxes and other governmental
charges that may be imposed in respect of, the issue, sale and delivery of the
shares of Common Stock issuable upon the exercise of this Stock Purchase
Warrant.
7.4. Amendment. This Stock Purchase Warrant may not be modified
or amended except by written agreement duly executed by the Company and Fraser.
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<PAGE> 6
7.5. Headings. The headings of the Articles and Sections of
this Stock Purchase Warrant are for the convenience of reference only and shall
not, for any purpose, be deemed a part of this Stock Purchase Warrant.
7.6 Governing Law. This Stock Purchase Warrant shall be
governed by the laws of the State of Florida without reference to the conflict
of laws principles thereof.
Date of Grant: June 26, 1996
Pro Tech Communications, Inc.
By: /s/ Keith Larkin
---------------------------------------
Name: Keith Larkin
Title: Chief Executive Officer
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<PAGE> 7
____________________
Date
Pro Tech Communications, Inc.
3311 Industrial 25th Street
Ft. Pierce, Florida 34946
Re: Exercise of Stock Purchase Warrant
Dear Sir:
Please be advised that pursuant to a Stock Purchase Warrant Agreement
("Agreement"), granted as of June 26, 1996 by Pro Tech Communications, Inc.
(the "Company") to the undersigned, the undersigned hereby exercises the Stock
Purchase Warrant in the amount of ______________ shares of common stock of the
Company and herewith tenders its cashier's check or certified check to the
Company in the amount of ___________________________________ ($__________) in
payment for such shares of common stock. Capitalized terms not otherwise
defined herein are defined as set forth in the Agreement.
The undersigned requests _______ stock certificates for such shares
issued in the name of ________________________________ whose address is
______________________________________ and whose social security number is
_____________________________________.
The undersigned hereby acknowledges, warrants and represents the
following:
(1) The undersigned's acknowledgements, representations,
warranties and agreements contained in the Agreement are true, complete and
accurate as of the date of this letter.
(2) The Stock Purchase Warrant is presently exercisable and as
such, has vested and has not expired.
(3) The undersigned is presently and has been in full
compliance with all the terms, conditions and provisions of the Agreement.
Sincerely,
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