-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, D7T7wVq0ViG1v6WKDpng8RHCjmzC64OhjeJi0N/VqLO0dbKQQVAkvW3SftN+P5rJ 9EWq5rWt+iDD+cDZhGj5yQ== 0000950129-96-001988.txt : 19960928 0000950129-96-001988.hdr.sgml : 19960928 ACCESSION NUMBER: 0000950129-96-001988 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19960821 SROS: NONE GROUP MEMBERS: A. RONALD LERNER GROUP MEMBERS: CYPRESS ASSET MANAGEMENT INC /ADV GROUP MEMBERS: DAN R. JAPHET, SR. GROUP MEMBERS: DAVID E. JORDEN GROUP MEMBERS: FRANK P. LEE GROUP MEMBERS: WILLIAM L. GARWOOD, JR. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: QUEST MEDICAL INC CENTRAL INDEX KEY: 0000351721 STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841] IRS NUMBER: 751646002 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-33902 FILM NUMBER: 96618838 BUSINESS ADDRESS: STREET 1: ONE ALLENTOWN PKWY CITY: ALLEN STATE: TX ZIP: 75002 BUSINESS PHONE: 2143909800 MAIL ADDRESS: STREET 1: ONE ALLENTOWN PARKWAY CITY: ALLEN STATE: TX ZIP: 75002 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: CYPRESS ASSET MANAGEMENT INC /ADV CENTRAL INDEX KEY: 0001012600 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 760324231 STATE OF INCORPORATION: TX FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 2929 ALLEN PARKWAY STREET 2: SUITE 2000 CITY: HOUSTON STATE: TX ZIP: 77019 BUSINESS PHONE: 7135122100 MAIL ADDRESS: STREET 1: 2929 ALLEN PARKWAY STREET 2: SUITE 2000 CITY: HOUSTON STATE: TX ZIP: 77019 FORMER COMPANY: FORMER CONFORMED NAME: CYPRESS ASSET MANAGEMENT INC /ADV DATE OF NAME CHANGE: 19960821 SC 13D 1 CYPRESS ASSET MGMT., INC. FOR QUEST MEDICAL, INC. 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934* Quest Medical, Inc. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, par value $.05 per share - -------------------------------------------------------------------------------- (Title of Class of Securities) 74834610 - -------------------------------------------------------------------------------- (CUSIP Number) Cypress Asset Management, Inc. A. Ronald Lerner William L. Garwood, Jr. David E. Jorden Frank P. Lee Dan R. Japhet, Sr. 2929 Allen Parkway, Suite 2000 Houston, Texas 77019 (713) 512-2100 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) August 12, 1996 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ]. Check the following box if a fee is being paid with this statement [X]. (A fee is not required only if the reporting person: (1) has a previous statement on file reporting beneficial ownership of more than five percent of the class of securities described in Item 1; and (2) has filed no amendment subsequent thereto reporting beneficial ownership of less than five percent of such class. See Rule 13d-7.) Note: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. *The remainder of this cover page should be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). Page 1 of 17 2 CUSIP No. 74834610 - -------------------------------------------------------------------------------- (1) Names of Reporting Persons S.S. or I.R.S. Identification Nos. of Above Persons Cypress Asset Management, Inc. 76-0496098 - -------------------------------------------------------------------------------- (2) Check the Appropriate Box if a Member of a Group (a) [ ] (b) [X] - -------------------------------------------------------------------------------- (3) SEC Use Only - -------------------------------------------------------------------------------- (4) Source of Funds 00 - -------------------------------------------------------------------------------- (5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- (6) Citizenship or Place of Organization Texas - -------------------------------------------------------------------------------- Number of (7) Sole Voting Power 185,650 Shares Shares Bene- ________________________________________________________ ficially (8) Shared Voting Power -0- Owned by ________________________________________________________ Each Report- (9) Sole Dispositive Power 537,314 Shares ing Person ________________________________________________________ With (10) Shared Dispositive Power -0- - -------------------------------------------------------------------------------- (11) Aggregate Amount Beneficially Owned by Each Reporting Person 537,314 Shares - -------------------------------------------------------------------------------- (12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ] - -------------------------------------------------------------------------------- (13) Percent of Class Represented by Amount in Row (11) 6.5% - -------------------------------------------------------------------------------- (14) Type of Reporting Person (See Instructions) IA Page 2 of 17 3 CUSIP No. 74834610 - -------------------------------------------------------------------------------- (1) Names of Reporting Persons S.S. or I.R.S. Identification Nos. of Above Persons A. Ronald Lerner ###-##-#### - -------------------------------------------------------------------------------- (2) Check the Appropriate Box if a Member of a Group (a) [ ] (b) [X] - -------------------------------------------------------------------------------- (3) SEC Use Only - -------------------------------------------------------------------------------- (4) Source of Funds 00 - -------------------------------------------------------------------------------- (5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- (6) Citizenship or Place of Organization U.S.A - -------------------------------------------------------------------------------- Number of (7) Sole Voting Power 185,650 Shares Shares Bene- ________________________________________________________ ficially (8) Shared Voting Power -0- Owned by ________________________________________________________ Each Report- (9) Sole Dispositive Power 537,314 Shares ing Person ________________________________________________________ With (10) Shared Dispositive Power -0- - -------------------------------------------------------------------------------- (11) Aggregate Amount Beneficially Owned by Each Reporting Person 537,314 Shares - -------------------------------------------------------------------------------- (12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ] - -------------------------------------------------------------------------------- (13) Percent of Class Represented by Amount in Row (11) 6.5% - -------------------------------------------------------------------------------- (14) Type of Reporting Person (See Instructions) IN Page 3 of 17 4 CUSIP No. 74834610 - -------------------------------------------------------------------------------- (1) Names of Reporting Persons S.S. or I.R.S. Identification Nos. of Above Persons William L. Garwood, Jr. ###-##-#### - -------------------------------------------------------------------------------- (2) Check the Appropriate Box if a Member of a Group (a) [ ] (b) [X] - -------------------------------------------------------------------------------- (3) SEC Use Only - -------------------------------------------------------------------------------- (4) Source of Funds 00 - -------------------------------------------------------------------------------- (5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- (6) Citizenship or Place of Organization U.S.A - -------------------------------------------------------------------------------- Number of (7) Sole Voting Power 185,650 Shares Shares Bene- ________________________________________________________ ficially (8) Shared Voting Power -0- Owned by ________________________________________________________ Each Report- (9) Sole Dispositive Power 537,314 Shares ing Person ________________________________________________________ With (10) Shared Dispositive Power -0- - -------------------------------------------------------------------------------- (11) Aggregate Amount Beneficially Owned by Each Reporting Person 537,314 Shares - -------------------------------------------------------------------------------- (12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ] - -------------------------------------------------------------------------------- (13) Percent of Class Represented by Amount in Row (11) 6.5% - -------------------------------------------------------------------------------- (14) Type of Reporting Person (See Instructions) IN Page 4 of 17 5 CUSIP No. 74834610 - -------------------------------------------------------------------------------- (1) Names of Reporting Persons S.S. or I.R.S. Identification Nos. of Above Persons David E. Jorden ###-##-#### (2) Check the Appropriate Box if a Member of a Group (a) [ ] (b) [X] - -------------------------------------------------------------------------------- (3) SEC Use Only - -------------------------------------------------------------------------------- (4) Source of Funds 00 - -------------------------------------------------------------------------------- (5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- (6) Citizenship or Place of Organization U.S.A. - -------------------------------------------------------------------------------- Number of (7) Sole Voting Power 185,650 Shares Shares Bene- _____________________________________________________ ficially (8) Shared Voting Power -0- Owned by _____________________________________________________ Each Report- (9) Sole Dispositive Power 537,314 Shares ing Person _____________________________________________________ With (10) Shared Dispositive Power -0- - -------------------------------------------------------------------------------- (11) Aggregate Amount Beneficially Owned by Each Reporting Person 537,314 Shares - -------------------------------------------------------------------------------- (12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ] - -------------------------------------------------------------------------------- (13) Percent of Class Represented by Amount in Row (11) 6.5% - -------------------------------------------------------------------------------- (14) Type of Reporting Person (See Instructions) IN Page 5 of 17 6 CUSIP No. 74834610 - -------------------------------------------------------------------------------- (1) Names of Reporting Persons S.S. or I.R.S. Identification Nos. of Above Persons Frank P. Lee ###-##-#### - -------------------------------------------------------------------------------- (2) Check the Appropriate Box if a Member of a Group (a) [ ] (b) [X] - -------------------------------------------------------------------------------- (3) SEC Use Only - -------------------------------------------------------------------------------- (4) Source of Funds 00 - -------------------------------------------------------------------------------- (5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- (6) Citizenship or Place of Organization U.S.A. - -------------------------------------------------------------------------------- Number of (7) Sole Voting Power 185,650 Shares Shares Bene- _____________________________________________________ ficially (8) Shared Voting Power -0- Owned by _____________________________________________________ Each Report- (9) Sole Dispositive Power 537,314 Shares ing Person _____________________________________________________ With (10) Shared Dispositive Power -0- - -------------------------------------------------------------------------------- (11) Aggregate Amount Beneficially Owned by Each Reporting Person 537,314 Shares - -------------------------------------------------------------------------------- (12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ] - -------------------------------------------------------------------------------- (13) Percent of Class Represented by Amount in Row (11) 6.5% - -------------------------------------------------------------------------------- (14) Type of Reporting Person (See Instructions) IN Page 6 of 17 7 CUSIP No. 74834610 - -------------------------------------------------------------------------------- (1) Names of Reporting Persons S.S. or I.R.S. Identification Nos. of Above Persons Dan R. Japhet, Sr. ###-##-#### - -------------------------------------------------------------------------------- (2) Check the Appropriate Box if a Member of a Group (a) [ ] (b) [X] - -------------------------------------------------------------------------------- (3) SEC Use Only - -------------------------------------------------------------------------------- (4) Source of Funds 00 - -------------------------------------------------------------------------------- (5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- (6) Citizenship or Place of Organization U.S.A. - -------------------------------------------------------------------------------- Number of (7) Sole Voting Power 185,650 Shares Shares Bene- _____________________________________________________ ficially (8) Shared Voting Power -0- Owned by _____________________________________________________ Each Report- (9) Sole Dispositive Power 537,314 Shares ing Person _____________________________________________________ With (10) Shared Dispositive Power -0- - -------------------------------------------------------------------------------- (11) Aggregate Amount Beneficially Owned by Each Reporting Person 537,314 Shares - -------------------------------------------------------------------------------- (12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ] - -------------------------------------------------------------------------------- (13) Percent of Class Represented by Amount in Row (11) 6.5% - -------------------------------------------------------------------------------- (14) Type of Reporting Person (See Instructions) IN Page 7 of 17 8 ITEM 1. SECURITY AND ISSUER The class of securities to which this statement relates is common stock, par value $.05 per share ("Common Stock"), of Quest Medical, Inc., a Texas corporation (the "Company"). The address of the principal executive offices of the Company is One Allentown Parkway, Allen, Texas 75002. ITEM 2. IDENTITY AND BACKGROUND This statement on Schedule 13D is filed by Cypress Asset Management, Inc., a Texas corporation and investment advisor registered under the Investment Advisers Act of 1940 ("Cypress"). The principal business of Cypress is to provide investment advisory services for individuals, foundations and institutions. Information with respect to the executive officers, directors and controlling persons of Cypress, including name, business address, present principal occupation or employment and the organization in which such employment is conducted, and their citizenship is listed on the schedule attached hereto as Schedule I, which is incorporated in this Schedule 13D by reference. The address of the principal business and office of Cypress is 2929 Allen Parkway, Suite 2000, Houston, Texas 77019. This statement is also being filed by A. Ronald Lerner, William L. Garwood, Jr., David E. Jorden, Frank P. Lee and Dan R. Japhet, Sr., each a director and shareholder of Cypress. The name, business address, present principal occupation or employment and the organization in which such employment is conducted, and citizenship for each of such persons is included on Schedule I attached hereto. During the last five years, none of Cypress, Mr. Lerner, Mr. Garwood, Mr. Jorden, Mr. Lee, Mr. Japhet, nor, to the best of Cypress' knowledge, any other executive officer, director or Page 8 of 17 9 controlling person of Cypress, has been convicted in any criminal proceeding (excluding traffic violations or similar misdemeanors) or has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION The funds used by Cypress in purchasing the shares are funds from certain of its clients' accounts. The funds used by each of Messrs. Lerner, Garwood, Jorden, Lee and Japhet in purchasing the shares held by such individual personally consisted exclusively of such individual's personal funds. ITEM 4. PURPOSE OF TRANSACTION As of August 12, 1996, Cypress held 537,314 shares of the Common Stock purchased by Cypress on behalf of certain of its clients in the ordinary course of business in its capacity as an investment adviser. As of such date, Mr. Lerner personally held 88,150 shares of Common Stock, which he initially purchased on behalf of himself and certain members of his family for investment purposes. As of such date, Mr. Garwood personally held 18,100 shares of Common Stock, which he initially purchased on behalf of himself and certain members of his family for investment purposes. As of such date, Mr. Jorden personally held 2,000 shares of Common Stock, which he initially purchased on behalf of himself and certain members of his family for investment purposes. As of such date, Mr. Lee personally held 5,000 shares of Common Stock, which he initially purchased on behalf of himself and certain members of his family for investment purposes. As of Page 9 of 17 10 such date, Mr. Japhet personally held 27,500 shares of Common Stock, which he initially purchased on behalf of himself and certain members of his family for investment purposes. On June 25, 1996, the Company announced that its projected earnings for the second quarter of 1996 would likely be significantly lower than previously expected, and the Common Stock fell from $10.75 per share on June 25 to $6.00 per share on June 27. Beginning on June 26, Cypress and its directors, believing the stock to be a good value, began purchasing additional shares of the Common Stock and on June 30, the total number of shares held collectively by Cypress and its directors surpassed 5% and increased to 578,089, or 7.0%, of the outstanding Common Stock of the Company. Cypress and its directors acquired such shares in the ordinary course of business and not with the purpose or effect of changing or influencing control of the Company, nor in connection with or as a participant in any transaction having such purpose or effect, and thereby planned to file a report on Schedule 13G in early 1997. However, after the stock price remained low for some time, it became apparent to Cypress that even the recent replacement of the chairman of the Company's Board of Directors was not sufficient to improve the returns to shareholders, and Cypress began further investigation of the Company and spoke with various persons associated with or interested in the Company. Following these inquiries, Cypress decided on August 12 that the Company suffered from significant weaknesses in several key areas and that drastic measures were necessary to enhance the value of the Company for its shareholders. Cypress determined that the best course of action would be to seek a strategic partner for the Company, either in the form of a merger or a sale of the Company to such party. On August 20, 1996, Cypress and its directors sent a letter to the Company's Board Page 10 of 17 11 informing them of their recommendations and their intent to file this schedule and urging the Board to seek a suitable merger partner for the Company. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER As of August 12, 1996, Cypress, on behalf of its clients, and each of Messrs. Lerner, Garwood, Jorden and Lee, on behalf of himself and certain members of his family, collectively held 537,314 shares of Common Stock constituting approximately 6.5% of the 8,230,000 shares of the Company's outstanding Common Stock (as reported by the Company) although Cypress does not admit that, for purposes of Sections 13(d) and 13(g) of the Act, it is the beneficial owner of such shares. All of the transactions in the Company's Common Stock effected by Cypress or any of its directors are set forth on Schedule II hereto. Except as set forth on such schedule and otherwise herein, to the best of the filers' knowledge, neither Cypress, its directors, nor any other persons listed on Schedule I hereto have effected any other transactions in the Company's Common Stock during the past sixty days. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER The shares held by Cypress on behalf of certain of its clients are governed by an Investment Advisory Agreement between Cypress and each such client. Pursuant to these agreements, Cypress has discretion and authority with respect to the investment of such client's account, including the power to purchase, sell, exchange, trade, write options on and otherwise deal in the securities and assets acquired for such client's account. Page 11 of 17 12 The shares held by Messrs. Lerner, Garwood, Jorden, Lee and Japhet personally are not subject to any contracts, arrangements, understandings or relationships. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. Exhibit 1 -- Joint Filing Agreement. Exhibit 2 -- Standard Form of Investment Advisory Agreement described in Item 6. Page 12 of 17 13 After reasonable inquiry and to the best of its or his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct. Date: August 21, 1996 CYPRESS ASSET MANAGEMENT, INC. By: /s/ A. Ronald Lerner ------------------------------- A. Ronald Lerner President /s/ A. Ronald Lerner ---------------------------------- A. Ronald Lerner /s/ William L. Garwood, Jr. ---------------------------------- William L. Garwood, Jr. /s/ David E. Jorden ---------------------------------- David E. Jorden /s/ Frank P. Lee ---------------------------------- Frank P. Lee Page 13 of 17 14 /s/ Dan R. Japhet, Jr. ---------------------------------- Dan R. Japhet, Sr. Page 14 of 17 15 SCHEDULE I DIRECTORS, EXECUTIVE OFFICERS AND CONTROLLING SHAREHOLDERS OF CYPRESS ASSET MANAGEMENT, INC. For each director, executive officer and controlling shareholder of Cypress, the following table sets forth the name, business address and present principal occupation or employment and the organization in which such employment is conducted. Unless otherwise indicated below, each such person is a citizen of the United States of America, the business address of each such person is c/o Cypress Asset Management, Inc., 2929 Allen Parkway, Suite 2000, Houston, Texas 77019, and each listed position is with Cypress.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; NAME BUSINESS ADDRESS ---- ------------------------------------------- A. Ronald Lerner Director, Investment Principal and holder of 22.5% of the outstanding stock of Cypress William L. Garwood, Jr. Director, Investment Principal and holder of 22.5% of the outstanding stock of Cypress David E. Jorden Director, Investment Principal and holder of 22.5% of the outstanding stock of Cypress Frank P. Lee Director, Investment Principal and holder of 22.5% of the outstanding stock of Cypress Dan R. Japhet, Sr. Director, Investment Principal and holder of 10% of the outstanding stock of Cypress
Page 15 of 17 16 SCHEDULE II TRANSACTIONS IN THE COMPANY'S COMMON STOCK DURING THE PAST SIXTY DAYS Page 16 of 17 17 CYPRESS ASSET MANAGEMENT TRANSACTION SUMMARY ? From 06-13-96 To 08-12-96
TRAN TRADE DOLLAR SOURCE BROKER PRICE CODE DATE SECURITY AMOUNT OR DEST. QUANTITY CODE COMMISSION LOT - ----- ---- ----- -------- ------ -------- -------- ------ ---------- --- 11.00 sl 06-13-96 QUEST MEDICAL 10,970 cash 1,000 bear 30 1 6.375 by 06-26-96 QUEST MEDICAL 11,833 cash 2,000 bear 30 3 by 06-26-96 QUEST MEDICAL 11,833 margin 2,000 bear 30 3 by 06-26-96 QUEST MEDICAL 5,933 cash 1,000 bear 30 3 by 06-26-96 QUEST MEDICAL 11,833 cash 2,000 bear 30 3 by 06-26-96 QUEST MEDICAL 14,783 cash 2,500 bear 30 3 by 06-26-96 QUEST MEDICAL 14,783 cash 2,500 bear 30 3 by 06-26-96 QUEST MEDICAL 14,783 cash 2,500 bear 30 3 by 06-26-96 QUEST MEDICAL 5,933 cash 1,000 bear 30 2 by 06-26-96 QUEST MEDICAL 29,533 cash 5,000 bear 30 3 by 06-26-96 QUEST MEDICAL 5,933 cash 1,000 bear 30 3 by 06-26-96 QUEST MEDICAL 17,733 cash 3,000 bear 30 4 by 06-26-96 QUEST MEDICAL 11,833 cash 2,000 bear 30 2 by 06-26-96 QUEST MEDICAL 11,833 margin 2,000 bear 30 3 by 06-26-96 QUEST MEDICAL 29,533 cash 5,000 bear 30 2 by 06-26-96 QUEST MEDICAL 14,783 cash 2,500 bear 30 3 by 06-26-96 QUEST MEDICAL 5,933 cash 1,000 bear 30 2 by 06-26-96 QUEST MEDICAL 17,733 margin 3,000 bear 30 2 by 06-26-96 QUEST MEDICAL 14,783 cash 2,500 bear 30 3 by 06-26-96 QUEST MEDICAL 6,533 cash 1,000 2 by 06-26-96 QUEST MEDICAL 4,458 cash 750 bear 30 2 by 06-26-96 QUEST MEDICAL 4,458 cash 750 bear 30 3 by 06-26-96 QUEST MEDICAL 2,983 cash 500 bear 30 3 by 06-26-96 QUEST MEDICAL 5,933 cash 1,000 bear 30 3 by 06-26-96 QUEST MEDICAL 5,933 cash 1,000 bear 30 3 by 06-26-96 QUEST MEDICAL 5,933 cash 1,000 bear 30 3 by 06-26-96 QUEST MEDICAL 19,533 cash 3,000 4 by 06-26-96 QUEST MEDICAL 22,566 cash 3,800 13 by 06-26-96 QUEST MEDICAL 36,812 cash 6,200 14 by 06-26-96 QUEST MEDICAL 15,185 cash 2,500 5 by 06-26-96 QUEST MEDICAL 48,369 cash 7,500 6 by 06-26-96 QUEST MEDICAL 12,000 cash 2,000 3 by 06-26-96 QUEST MEDICAL 4,500 cash 750 3 by 06-26-96 QUEST MEDICAL 29,878 cash 5,000 4 by 06-26-96 QUEST MEDICAL 11,875 cash 2,000 3 by 06-26-96 QUEST MEDICAL 5,937 cash 1,000 4 by 06-26-96 QUEST MEDICAL 30,128 cash 5,000 1 by 06-26-96 QUEST MEDICAL 5,930 cash 1,000 2 by 06-26-96 QUEST MEDICAL 12,160 cash 2,000 5 by 06-26-96 QUEST MEDICAL 15,254 cash 2,500 2 by 06-26-96 QUEST MEDICAL 12,224 cash 2,000 2 by 06-26-96 QUEST MEDICAL 6,594 cash 1,000 2 by 06-26-96 QUEST MEDICAL 4,050 cash 600 2 by 06-26-96 QUEST MEDICAL 9,958 cash 1,500 3 by 06-26-96 QUEST MEDICAL 8,690 cash 1,300 3 by 06-26-96 QUEST MEDICAL 17,730 cash 3,000 bear 30 1
18 CYPRESS ASSET MANAGEMENT TRANSACTION SUMMARY ? From 06-13-96 To 08-12-96
TRAN TRADE DOLLAR SOURCE BROKER PRICE CODE DATE SECURITY AMOUNT OR DEST. QUANTITY CODE COMMISSION LOT - ----- ---- ----- -------- ------ -------- -------- ------ ---------- --- 6.357 by 06-26-96 QUEST MEDICAL 7,700 cash 1,300 bear 30 3 by 06-26-96 QUEST MEDICAL 11,830 cash 2,000 bear 30 2 by 06-26-96 QUEST MEDICAL 8,880 cash 1,500 bear 30 2 by 06-26-96 QUEST MEDICAL 8,200 cash 1,250 2 by 06-26-96 QUEST MEDICAL 53,133 cash 9,000 bear 30 5 by 06-26-96 QUEST MEDICAL 13,033 cash 2,000 4 6.000 by 06-27-96 QUEST MEDICAL 2,955 cash 450 bear 30 1 7.125 by 06-28-96 QUEST MEDICAL 11,062 cash 1,500 2 by 06-28-96 QUEST MEDICAL 260,030 cash 40,000 bear 30 5 7.500 by 07-01-96 QUEST MEDICAL 12,146 cash 1,700 bear 30 2 8.750 by 07-09-96 QUEST MEDICAL 12,638 cash 1,400 1 8.750 sl 07-10-96 QUEST MEDICAL 45,907 cash 5,000 bear 30 5 sl 07-10-96 QUEST MEDICAL 133,095 cash 15,000 bear 30 5 7.375 sl 07-17-96 QUEST MEDICAL 2,295 cash 300 2 sl 07-17-96 QUEST MEDICAL 39,396 cash 5,150 3 sl 07-17-96 QUEST MEDICAL 19,698 cash 2,575 4 sl 07-17-96 QUEST MEDICAL 14,182 cash 1,854 5 sl 07-17-96 QUEST MEDICAL 926 cash 121 6 7.250 by 07-19-96 QUEST MEDICAL 4,593 cash 600 2
19 EXHIBIT INDEX Exhibit 1 -- Joint Filing Agreement Exhibit 2 -- Standard Form of Investment Advisory Agreement Page 17 of 17 EX-1 2 JOINT FILING AGREEMENT 1 EXHIBIT 1 JOINT FILING AGREEMENT In accordance with Rule 13d-1(f) of the Securities Exchange Act of 1934, as amended, the undersigned agree to the joint filing on behalf of each of them a Statement on Schedule 13D (including any and all amendments thereto) with respect to the Common Stock of Quest Medical, Inc. and further agree that this Agreement shall be included as an Exhibit to such joint filings. The undersigned further agree that each party hereto is responsible for timely filing of such Statement on Schedule 13D and any amendments thereto, and for the completeness and accuracy of the information concerning such party contained therein; provided that no party is responsible for the completeness or accuracy of the information concerning the other party, unless such party knows or has reason to believe that such information is inaccurate. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original instrument, but all of such counterparts together shall constitute but one agreement. In evidence thereof the undersigned, being duly authorized, hereby execute this Agreement this 21st day of August, 1996. CYPRESS ASSET MANAGEMENT, INC. By: /s/ A. Ronald Lerner -------------------------------- A. Ronald Lerner President /s/ A. Ronald Lerner ----------------------------------- A. Ronald Lerner /s/ William L. Garwood, Jr. ----------------------------------- William L. Garwood, Jr. 2 /s/ David E. Jorden ----------------------------------- David E. Jorden /s/ Frank P. Lee ----------------------------------- Frank P. Lee /s/ Dan R. Japhet, Sr. ----------------------------------- Dan R. Japhet, Sr. EX-2 3 FORM OF INVESTMENT ADVISORY AGREEMENT 1 EXHIBIT 2 FORM OF INVESTMENT ADVISORY AGREEMENT This agreement is entered into as of ______________, by and between __________________________________ (the "Client") and CYPRESS ASSET MANAGEMENT, INC. (the "Advisor"). 1. APPOINTMENT OF THE ADVISOR Effective _____________, the Client appoints the Advisor as Investment Advisor with respect to those assets of the Client identified in Section 3 below hereto (as augmented or diminished from time to time hereinafter pursuant to the provisions of this Agreement referred to collectively hereinafter as the "Client's Account"). 2. DISCRETIONARY AUTHORITY (a) Advisor is concurrently herewith delivering to the Client a brochure (the "Brochure") pursuant to the Securities and Exchange Commission's Investment Advisors Act Rule 204-3, promulgated under the Investment Advisors Act of 1940, as amended. The Client hereby grants to the Advisor (and Advisor accepts the responsibilities and obligations attendant to such grant) full and complete discretion and authority to manage the investment of the Client's Account, including without limitation, the power and authority to purchase, sell, exchange, trade, write options on and otherwise deal in the securities and assets of any type or nature that may from time to time be acquired for the Client's Account. (b) The Advisor shall have the absolute authority and discretion to place brokerage orders on behalf of the Client with such broker or brokers as the Advisor shall from time to time in its sole discretion, select. The Advisor is specifically granted the authority to select brokers not only on the basis of their ability to execute trades and their commission rates, but also on their research capability and advice (and may, in its sole discretion, authorize the payment of commissions higher than would otherwise be the case as consideration for such research advice). The Advisor shall not be responsible for any acts or failures to act by such broker or brokers, provided that the Advisor shall effect trades in the Client's Account. (c) To enable the Advisor to exercise fully its discretion in managing the Client's Account, the Client hereby constitutes and appoints the Advisor as the Client's agent and attorney-in-fact with full power and authority for the Client and on the Client's behalf to buy, sell and otherwise deal in securities and contracts relating to and for the Client's Account. The Client further grants to the Advisor, as the Client's agent and attorney-in-fact, fully power and authority to do and perform every act necessary and proper to be done in the exercise of the foregoing powers as fully as the Client might or could do if personally present. This power-of-attorney is coupled with an interest and shall terminate only on termination of the Agreement or on receipt by the Advisor of written notice of the death or incapacity of the Client. 2 3. CUSTODIAN OF SECURITIES AND ASSETS The Client's Account or a portion thereof has been deposited with: __________________________Gruntal Company_______________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ (said custodian, as may be changed from time to time by Client, referred to herein as the "Custodian"). The Advisor is hereby authorized and empowered to instruct the Custodian with respect to transactions in the securities and assets that comprise the Client's Account, and the Custodian is hereby directed to comply promptly with any and all of said instructions. 4. COMPENSATION For its services rendered hereunder, the Advisor shall be paid by the Client an annual fee as designated on the attached schedule and will be based on the market value of the Client's Account. The fee shall be computed and payable quarterly by multiplying the applicable quarterly period. The attached fee schedule shall be a part of this Agreement. Fees are payable quarterly base on the value of all assets at the end of the previous quarter. The fee for the initial period shall be prorated. Because service fees are payable in arrears, the Client will not be eligible to receive refunds of said fees, as payment of same is not due until services are rendered. If this Agreement is cancelled or terminated by either party hereto, all fees shall be prorated for the period in which such cancellation or termination occurs based on the market value of the Client's Account at the end of the previous quarterly period and the number of days this Agreement was in effect during the period of cancellation or termination. 5. INVESTMENTS OBJECTIVES; LIABILITY DISCLAIMER A statement of the investment objectives and policies and restrictions thereon of the Advisor is set forth in the Brochure. The Advisor's authority hereunder shall not be impaired because the Advisor may effect transactions for the Advisor's own account, or for the accounts of others which the Advisor manages, which are identical or similar to securities transactions the Advisor may effect for the Client's Account at the same or different times. Except in cases of negligence or malfeasance, or violation of applicable law, neither the Advisor nor any of the Advisor's officers, directors or employees shall be liable hereunder for any actions or omissions or for any errors of judgment in managing the Client's Account. Nothing herein shall in any way constitute a waiver or limitation of any rights to the extent such waiver or limitation is not permitted by any federal or state securities laws. The Advisor acknowledges that it s "fiduciary" with respect to the Client within the meaning of, and for the purposes of, ERISA, and confirms that it is registered as an investment adviser under the Investment Advisors Act of 1940. 6. RECORDS AND REPORTS (a) to provide the Client with an opportunity to review carefully the Brochure, the Client shall have the right to cancel this Agreement within five business days of the date first above written, without penalty, by providing written notice of cancellation to the Advisor. 3 (b) The Advisor shall keep and maintain records of its activities hereunder, which records shall be open to inspection at any reasonable time by the Client or by its duly authorized representative. The Advisor shall render to the Client quarterly or as reasonably requested, a status report on the Client's Account which shall include the securities and assets of the Clients Account as of the end of each three month period and the estimated costs and fair market value basis thereof. 7. SERVICES TO OTHER CLIENTS The Client acknowledges that the Advisor provides and shall continue to provide services of the nature to be rendered hereunder to clients other than the Client, and the Client agrees that the Advisor may give advice and take action with respect to the management of its other clients' securities and assets, which may differ from the advice given, or the timing or nature of action taken, with respect to the Client's Account. Nothing in this Agreement shall be deemed to impose upon the Advisor any obligation to purchase or sell for the Client any security or property which the advisor may, from time to time, purchase or sell for the account of any other client. Investment advisory services are also rendered to principals of this Advisor and to various members of their families who may or may not hold similar securities as those of the client. It is expressly understood that such principals, their family members and the Client will be given equal treatment by the Advisor with respect to the securities transactions and that family members' interests do not necessarily have to come last. 8. TERMINATION This Agreement may be terminated by either party hereto on thirty days written notice to the other party. 9. REPRESENTATIONS AND WARRANTIES (a) The Advisor hereby represents and warrants to the client that it is duly licensed and in good standing as an investment advisor under the Investment Advisors Act of 1940; and that it has the full power and authority to enter and perform this agreement. (b) The Client hereby represents and warrants to the Advisor that is has the full power and authority to enter and perform this Agreement; and that it owns, free and clear of any adverse interests or restrictions on transfer (except as otherwise noted on Exhibit A hereto) the securities and assets listed on Exhibit A hereto. 10. DISCLOSURES Client has been informed that investment performance will be measured on an quarterly basis, and agrees that at the end of each calendar quarter Client will compensate Cypress Asset Management in the manner described on the attached fee schedule. 11. MISCELLANEOUS (a) This Agreement and the rights and obligations hereunder are not assignable or delegable by either party hereto without the prior written consent of the other party. (b) No amendment or modification of this Agreement shall be deemed effective unless and until executed in writing by the parties hereto. (c) Nothing in this Agreement shall be construed to create the relationship of employer and employee between the Client and the Advisor. The Client and the Advisor are not partners or joint 4 venturers with each other and nothing contained in this Agreement shall be construed to make them partners or joint venturers with each other or to impose and liability as such on either of them. (d) This Agreement shall be governed by, and construed and interpreted in accordance with, the laws of the State of Texas. (e) The Client warrants that (he/she) has received Part II of Form ADV. (f) This Agreement may be executed in any number of counterparts, each of which shall be deemed an original instrument, but all which together shall constitute but one agreement. This Agreement and Addenda attached hereto and executed by the parties hereto, contain the entire agreement of the parties and supersede all prior negotiations, correspondence, understandings and agreements between or among the parties regarding the subject matter hereof. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. ____________________________________ ____________________________________ (Client Signature) (Client Signature) CYPRESS ASSET MANAGEMENT, INC. 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