<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 10-K/A
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998 Commission File Number 0-10763
-------
ATRION CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Delaware 63-0821819
- ------------------------------- ----------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
One Allentown Parkway, Allen, Texas 75002
- ---------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (972) 390-9800
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock (Par Value $0.10 Per Share)
----------------------------------------
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
<TABLE>
<S> <C>
Estimated aggregate market value of the voting stock held by
nonaffiliates of the registrant at March 18, 1999...................$23,553,414
Number of shares of Common Stock outstanding
at March 18, 1999.....................................................2,825,953
</TABLE>
<PAGE> 2
AMENDMENT NO. 1
The undersigned hereby amends the following items, financial statements,
exhibits or other portions of its Annual Report on Form 10-K for the fiscal year
ended December 31, 1998 (the "Annual Report"), as set forth in the pages
attached hereto:
ITEM 10. Directors and Executive Officers of the Registrant.
ITEM 11. Executive Compensation.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management.
ITEM 13. Certain Relationships and Related Transactions
Part III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Class I
EMILE A. BATTAT
Mr. Battat, age 61, has been a director since 1987 and has served as
Chairman of the Board of the Company since January 1998 and as interim
President and Chief Executive Officer of the Company, and as Chairman
of the Board or President of each of the Company's subsidiaries, since
October 1998. Mr. Battat is President and Chief Executive Officer of
Piedmont Enterprises, Inc., a privately-held consulting firm, and has
served in such position since March 1994. Mr. Battat served as the
President and Chief Executive Officer of Minemet, Inc., a company
engaged in international trade, from August 1978 until February 1994.
From 1965 to 1978, he served with Kaiser Industries and its affiliates,
a diversified industrial group, in various functions including
strategic planning, diversification, acquisitions and divestitures,
with the last nine years as Vice President and director of Kaiser
International. Mr. Battat holds a Bachelor of Science and a Master of
Science degrees in Mechanical Engineering from Massachusetts Institute
of Technology and a Master of Business Administration from Harvard
University. He is an associate member of Sigma Xi, a scientific honor
society.
JOHN H. P. MALEY
Mr. Maley, age 64, has been a director since February 1996. Mr. Maley
has been a consultant since January 1995. He is also Chairman of
Magister Corporation, a company which manufactures orthopedic and
consumer healthcare products, and has served in such capacity since
July 1995. From 1976 to December 1994 he was President and Chief
Executive Officer of Chattanooga Group, Inc., a private corporation
that became the world's leading manufacturer of products used for
physical and sports medicine. In 1971 he founded, and from 1971 to 1974
he was President and Chief Executive Officer of, Invacare Corporation,
a company that is now recognized as the world leader in the market for
wheelchairs and a broad range of home healthcare products. From 1962 to
1970 and in 1975 Mr. Maley was associated with the consulting firm of
McKinsey & Company, Inc., becoming a partner in
2
<PAGE> 3
1968, and worked with clients of that firm in England, Australia and
the United States. Mr. Maley holds a Bachelor of Arts and a Master of
Arts degrees in Economics from Cambridge University. He is a director
of Rehabilicare, Inc.
J. KENNETH SMITH
Mr. Smith, age 70, has been a director since 1982. Preceding his
retirement in 1986, Mr. Smith was the Director - Government Relations
of Sun Exploration and Production Company (later known as Oryx Energy
Company), a company engaged in oil and gas production. Mr. Smith has a
Bachelor of Science degree in Mechanical Engineering from Texas A & M
University.
Class II
RICHARD O. JACOBSON
Mr. Jacobson, age 62, has been a director since 1992. Mr. Jacobson is
Chairman of the Board of Jacobson Warehouse Company, Inc., a privately
held warehouse company with facilities in 17 locations in eight states,
which Mr. Jacobson founded 31 years ago. He is also Chairman of the
Board of Jacobson Transportation Company, Inc., a truckload common
carrier with authority to operate in 48 states and Canada. Mr. Jacobson
has a degree in Business Administration from the University of Iowa. He
is a director of Allied Group, Inc., FelCor Suite Hotels Inc. and
Heartland Express, Inc.
JEROME J. MCGRATH
Mr. McGrath, age 76, has been a director since 1988. Mr. McGrath was Of
Counsel to the law firm of Gallagher, Boland, Meiburger & Brosnan from
January 1988 until his retirement in June 1997 and practiced law for
over 45 years. He is a graduate of Georgetown University and Georgetown
University Law Center.
HUGH J. MORGAN, JR.
Mr. Morgan, age 70, has been a director since 1988. Mr. Morgan is
Chairman of the Board of National Bank of Commerce of Birmingham, and
has served in such position since February 1990. Mr. Morgan was
employed for many years prior to 1988 by Sonat Inc., a diversified
energy holding company, where he held various positions including Vice
Chairman of the Board of Sonat Inc. and Chairman of the Board of its
wholly-owned subsidiary, Southern Natural Gas Company. Mr. Morgan holds
a Bachelor of Arts degree from Princeton University and is a graduate
of the Vanderbilt University Law School.
Class III
ROGER F. STEBBING
Mr. Stebbing, age 58, has been a director since 1992. Mr. Stebbing is
President and Chief Executive Officer of Marlboro Enterprises, Inc., a
company engaged in chemical plant engineering, design, construction and
operation, and has served in such capacities since 1976. He is also
President and Chief Executive Officer of Stebbing and Associates, Inc.,
an engineering consulting company, and has served in such capacities
since 1986. Mr. Stebbing
3
<PAGE> 4
is a licensed professional engineer and has a BSC honors degree in
Chemical Engineering from Salford University.
JOHN P. STUPP, JR.
Mr. Stupp, age 49, has been a director since 1985. He is Chief
Operating Officer and Executive Vice President of Stupp Bros., Inc., a
diversified holding company, and has served in such capacities since
April 1996 and April 1995, respectively. From January 1992 to August
1995, Mr. Stupp also served as President and since August 1995 he has
served as Chief Executive Officer of Stupp Corporation, a division of
Stupp Bros., Inc. Mr. Stupp holds a Bachelor of Science degree in
Business and Economics from Lehigh University.
The Company's Board of Directors is divided into three classes: Class
I, Class II and Class III, with each director's term to expire at the third
succeeding annual meeting of Stockholders after his election.
The information relating to executive officers of the Company is set
forth on pages 10 through 11 of the Company's Annual Report on Form 10-K.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's executive
officers and directors to file initial reports of ownership and reports of
changes of ownership of the Company's common stock with the Commission.
Executive officers and directors are required to furnish the Company with copies
of Section 16(a) forms that they file. Based upon a review of these filings and
written representations from the Company's directors and executive officers
regarding the filing of such reports, the Company believes that its directors
and executive officers complied with all applicable Section 16(a) filing
requirements during 1998.
ITEM 11. EXECUTIVE COMPENSATION.
The following table sets forth certain information concerning the
annual and long-term compensation for services in all capacities to the Company
and its subsidiaries for the years ended December 31, 1998, 1997, and 1996 of
(i) those persons who at any time during 1998 served as the Chief Executive
Officer of the Company and (ii) the other persons who served as executive
officers of the Company in 1998 and whose salary and bonus for the year ended
December 31, 1998 exceeded $100,000 (such officers are referred to herein as the
"Named Executive Officers").
4
<PAGE> 5
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term Compensation
----------------------
Annual Compensation (1) Awards
----------------------- ------
Securities
Name and Restricted Underlying All Other
Principal Position Year Salary Bonus Stock Awards Options(2) Compensation
- ------------------ ---- -------- ------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Emile A. Battat (3) 1988 $ 27,692 $ 0 $ 0 42,000(4) $ 1,880(5)
Chairman of the
Board, President
and Chief
Executive Officer
Jeffery Strickland 1988 $138,000 $ 10,000 $20,000(6) 18,000 $ 49,110(5)
Vice President and 1997 135,000 40,000 0 18,000 11,605
Chief Financial 1996 97,500 29,080 0 2,700 8,648
Officer, Secretary
and Treasurer
Charles S. Gamble 1998 $150,000 $ 55,687 0 17,500 $ 4,167(5)
President- 1997 150,000 28,800 0 7,500 9,256
Halkey-Roberts 1996 88,400 29,265 0 0 5,470
Corporation
Jerry A. Howard (7) 1998 $205,129 $ 0 0 50,000 $426,136(5)
Chairman of the 1997 400,000 50,000 0 48,000 35,913
Board, President 1996 400,000 91,000 0 5,400 34,748
and Chief
Executive Officer
Dick Rabenau(8) 1998 $131,250 $ 0 0 3,300 $147,845(5)
President- 1997 150,000 48,560 0 9,000 8,307
Atrion Medical 1996 126,658 42,232 0 2,700 6,916
Products, Inc.
</TABLE>
- ----------------
(1) In accordance with the regulations of the Commission, this
table does not include perquisites and other personal benefits
received by a Named Executive Officer since the value of
perquisites and other benefits for each Named Executive
Officer did not exceed the lesser of $50,000 or 10% of the
total annual salary and bonus reported for such Named
Executive Officer.
(2) For 1996, options granted represent incentive stock options
granted under the 1994 Stock Incentive Plan. For 1997 and 1998
for Mr. Gamble and Mr. Rabenau, options granted represent
incentive stock options and for Mr. Strickland and Mr. Howard
represent both incentive and nonqualified stock options
granted under the 1997 Stock Incentive Plan. For 1998 for Mr.
Battat, options granted represent both incentive stock options
and nonqualified stock options granted under the 1997 Stock
Incentive Plan and the 1998 Outside Directors Plan.
(3) Mr. Battat became President and Chief Executive Officer of the
Company on October 6, 1998.
(4) During 1998, options for 20,000 of these shares expired or
were terminated.
5
<PAGE> 6
(5) Includes the following paid or accrued by the Company or one
or more of its subsidiaries: (i) matching contributions to the
Atrion Corporation 401(k) Savings Plan for Mr. Strickland,
$3,428; Mr. Gamble, $4,087; Mr. Howard, $7,294; and Mr.
Rabenau, $3,281 (ii) payment of life insurance premiums for
Mr. Battat, $130; Mr. Strickland, $3,429; Mr. Gamble, $80; Mr.
Howard, $8,849; and Mr. Rabenau, $814; (iii) contributions to
the Atrion Corporation Supplemental Executive Thrift Plan for
Mr. Strickland, $4,799; and Mr. Howard, $10,211; (iv)
relocation costs incurred in connection with moving from the
Florence, Alabama area to the Allen, Texas area for Mr.
Strickland, $37,454 and Mr. Howard, $63,161; (v) payment to
Mr. Howard in connection with the termination of his
employment of $336,621, including accrued vacation pay, and
payment to Mr. Rabenau in connection with the termination of
his employment of $143,750; and (vi) director's fees in the
amount of $1,750 paid to Mr. Battat in 1998 prior to the time
he became a Named Executive Officer.
(6) At December 31, 1998, Mr. Strickland held 1,641 shares of
restricted stock having an aggregate value on that date of
$13,128.
(7) Mr. Howard ceased serving as a director, and his employment
with the Company terminated, on October 6, 1998.
(8) Mr. Rabenau's employment with Atrion Medical Products, Inc.
terminated on November 15, 1998.
INFORMATION CONCERNING STOCK OPTIONS
The following tables summarize certain information concerning
grants to and exercises by the Named Executive Officers during the year
ended December 31, 1998 of options and the value of all unexercised
options held by such persons as of December 31, 1998.
<TABLE>
<CAPTION>
OPTION GRANTS IN 1998
---------------------
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF STOCK
INDIVIDUAL GRANTS APPRECIATION FOR OPTION TERM (2)
-------------------------------------------------------------------- --------------------------------
% OF TOTAL
OPTIONS GRANTED
OPTIONS TO EMPLOYEES EXERCISE
NAME GRANTED(1) IN 1998 PRICE (1) EXPIRATION 5% 10%
- ------------------ ------------ ----------------- --------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Emile A. Battat 20,000 (3) N/A $13.25 01/31/08 (3) $166,659(3) $422,331 (3)
2,000 (4) N/A 9.00 07/09/08 11,320 28,687
20,000 (5) 7.1% 6.88 11/11/08 86,474 219,134
Jeffery Strickland 6,000 (6) 2.1% 12.19 01/20/08 45,998 116,563
12,000 (6) 4.3% 12.63 01/20/08 95,316 241,541
Charles S. Gamble 4,500 (6) 1.6% 12.25 02/09/08 34,668 87,853
13,000 (7) 4.6% 6.88 11/11/08 56,208 142,437
Jerry A. Howard 13,600 (6)(8) 4.8% 12.63 01/20/08 (8) 108,025 273,747
36,400 (6)(8) 12.9% 12.19 01/20/08 (8) 279,052 707,750
Dick Rabenau 3,300 (6)(8) 1.2% 12.25 02/09/08 (8) 25,423 64,425
</TABLE>
- ------------
6
<PAGE> 7
(1) The options granted in 1998 are, with respect to Mr. Gamble and Mr.
Rabenau, incentive stock options or, with respect to Mr. Battat, Mr.
Strickland and Mr. Howard, incentive stock options and nonqualified
stock options, granted pursuant to the 1997 Stock Incentive Plan or the
1998 Outside Directors Plan. The exercise price of the options granted
is equal to (i) with respect to incentive stock options, the average of
the high and low price per share of common stock on the date of grant,
as reported by The Nasdaq Stock Market and (ii) with respect to
nonqualified stock options, the closing price per share of common stock
on the date of grant, as reported by The Nasdaq Stock Market. The
options are not transferable by the optionee except by will or by the
laws of descent and distribution, and each option is exercisable during
the lifetime of the optionee, only by the optionee or, in the event of
disability, by the optionee's guardian or representative. All options
under the 1997 Stock Incentive Plan terminate three months after the
optionee's termination of employment except in case of death or
disability, in which case the options terminate one year after
termination of employment, and options under the 1998 Outside Directors
Plan terminate six months after the optionee ceases to be an outside
director except in the case of death or disability, in which case the
options terminate 12 months after the date the optionee ceased to be an
outside director. The number of options granted to key employees, the
term thereof and the manner in which those options are to be exercised
under the 1997 Stock Incentive Plan are determined by the Compensation
Committee, while the grants to outside directors under the 1997 Stock
Incentive Plan or the 1998 Outside Directors Plan are automatic, with
the plans specifying the term and manner of exercise.
(2) Potential realizable value is based upon the assumption that the market
price of the common stock of the Company will appreciate at the
compounded annual rate shown from the date of grant until the end of
the option term. The dollar amounts in the foregoing table have been
calculated based upon the requirements in the rules on executive
compensation disclosure adopted by the Commission and do not reflect
the Company's estimate of future growth in the price of the Company's
common stock.
(3) These options, which expired or were terminated in 1998, and,
accordingly, at December 31, 1998, had no potential realizable value,
were granted to Mr. Battat under the 1998 Outside Directors Plan on
February 1, 1998, prior to the time that he became a Named Executive
Officer. These options became, or were to become, exercisable in four
equal quarterly installments on May 1, August 1 and November 1, 1998
and February 1, 1999.
(4) These options were granted to Mr. Battat in his capacity as a director
under the 1997 Stock Incentive Plan on July 10, 1998, prior to the time
he became a Named Executive Officer. These options were immediately
exercisable.
(5) These option became first exercisable one-half one month after grant
and the remaining one-half six months after grant.
(6) These options are first exercisable one-third one year after grant, an
additional one-third three years after grant and the remaining
one-third five years after grant.
(7) These options are first exercisable one-half two years after grant and
the remaining one-half four years after grant.
(8) These options were forfeited in 1999.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN 1998
-----------------------------------
AND YEAR-END OPTION VALUES
--------------------------
Number of Securities
Underlying Unexercised Value of Unexercised
Shares Options at Year End In the Money Options(1)
Acquired Value ------------------------------ ----------------------------------
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- -------- ----------- ------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Emile A. Battat 0 $ 0 14,000(2) 10,000 $11,250 $11,250
Jeffery Strickland 0 0 25,700 34,950 0 0
Charles S. Gamble 0 0 2,500 22,500 0 14,625
Jerry A. Howard 0 0 67,750(3) 93,700(3) 0 0
Dick Rabenau 0 0 9,900(3) 14,100(3) 0 0
</TABLE>
- --------------
7
<PAGE> 8
(1) Such value is equal to the product of (i) the closing price of the
common stock of the Company on December 31, 1998 ($8.00 per share) less
the exercise price and (ii) the number of shares subject to
in-the-money options.
(2) Includes options to purchase 4,000 shares granted to Mr. Battat in his
capacity as an outside director before he became a Named Executive
Officer.
(3) These options were forfeited in 1999.
RETIREMENT PLAN
Effective January 1, 1998, the Company's non-contributory pension plan
(the "Retirement Plan") was converted into a "cash balance" retirement plan (the
"Cash Balance Plan"). The Cash Balance Plan includes all full-time active
employees of the Company and its subsidiaries other than Quest Medical, Inc.
Each participant has an account balance which represents his or her benefit
under the Cash Balance Plan. Benefits that were accrued prior to January 1, 1998
under the Retirement Plan were converted to a lump sum actuarial equivalent and
constituted the participant's initial account balance under the Cash Balance
Plan. The Cash Balance Plan provides for the Company to make annual
contributions to a participant's cash balance account in an amount equal to 5%
of the participant's eligible compensation up to the Social Security wage base
and 10% in excess thereof and for an interest credit each plan year equal to the
rate on 30 year U.S. Treasury bonds during November of the preceding plan year.
For the 1998 plan year, the interest rate was 6.11%. For purposes of the Cash
Balance Plan, "eligible compensation" is the participant's salary and bonus as
included in the Summary Compensation Table above. Generally, each participant
becomes fully vested in the benefits under such plan after five years of
employment. Benefits may be paid, subject to certain limitations under the
Internal Revenue Code, upon termination of employment, retirement or death. The
Cash Balance Plan specifies various options that participants may select for the
distribution of their accrued balance, including forms of annuity payments and
lump sum distributions. All executive officers participate in the Cash Balance
Plan. The Company's Supplemental Executive Retirement Plan was terminated at the
end of 1998. The estimated annual retirement benefits payable to the Named
Executive Officers under the Cash Balance Plan at normal retirement age of 65,
assuming 4% annual increases in eligible compensation until retirement, no
change from 1999 levels of maximum includable compensation and social security
wage base, and a 30 year U.S. Treasury bond rate of 6.5%, are as follows: Mr.
Battat, $4,747; Mr. Gamble, $11,962; and Mr. Strickland, $98,805 (Mr. Howard and
Mr. Rabenau have no retirement benefits under the Cash Balance Plan because
their account balances were distributed to them at their requests following the
termination of their employment).
DIRECTOR COMPENSATION
In 1998, the Board of Directors adopted, and stockholders approved, the
Atrion Corporation 1998 Outside Directors Stock Option Plan ("1998 Outside
Directors Plan") providing for the grant on February 1 of each year beginning
February 1, 1998 and ending on February 1, 2000, to each director, other than
the Chairman of the Board, who is an outside director of an option to purchase
10,000 shares of common stock and to the Chairman of the
8
<PAGE> 9
Board, if he is an outside director, of an option to purchase 20,000 shares of
common stock. Effective February 1, 1998 these grants took the place of cash
retainers and meeting fees theretofore paid to outside directors. The purchase
price of the common stock subject to each option granted is the fair market
value of the common stock on the date of grant. Options granted under the 1998
Outside Directors Plan vest and become exercisable in four equal quarterly
installments on May 1, August 1, November 1 and February 1 next succeeding the
date of grant provided the optionee is then serving as an outside director. Each
option expires 10 years from the date of the grant, unless it is terminated
sooner. If an optionee ceases to be an outside director for any reason other
than death or disability, he will have the right to exercise his options at any
time within six months after the date on which he ceased to be an outside
director to the extent of the full number of shares vested on the date on which
he ceased being an outside director. If the optionee ceases to be an outside
director by reason of his death or disability, then the options may be exercised
at any time within 12 months after the date on which he ceased to be an outside
director by the optionee or his legal representative, in the case of disability,
or by his heir or legatee or the personal representative, administrator or
executor of his estate, in the case of death, to the extent of the full number
of shares vested on the date on which he ceased being an outside director.
However, no option is to be exercisable after the expiration of the 10-year term
described above. In light of the recent announcement of the Financial Accounting
Standards Board that it has tentatively concluded that the fair value of options
granted to outside directors would have to be expensed as incurred, in 1999 the
Board of Directors amended the 1998 Outside Directors Plan to eliminate the
grant of any options thereunder after February 1, 1999. Therefore, there will be
no additional grants of options under the 1998 Outside Directors Plan. Effective
February 1, 2000, each outside director will be paid a fee of $1,000 per month
and $750 for each meeting of the Board of Directors at which he is in
attendance. The Company will continue to reimburse each such director for travel
and out-of-pocket expenses incurred in connection with attending meetings of the
Board of Directors.
In 1999, the Board of Directors terminated the Company's Restricted
Shares Compensation Plan for Non-Employee Directors (the "Restricted Shares
Plan"), which provided for the issuance on July 10 of each year of 400 shares of
common stock of the Company to each outside director of the Company. No shares
of common stock have been issued under the Restricted Shares Plan since 1997, as
grants under that plan were suspended with the adoption of the 1998 Outside
Directors Plan.
Pursuant to the 1997 Stock Incentive Plan, on July 10 of each year each
outside director is granted automatically an option to purchase 2,000 shares of
common stock, at an exercise price equal to the fair market value of the common
stock on the date of grant. Each such option is fully exercisable on the date of
grant and expires on the first to occur of (i) the tenth anniversary of the date
of grant; (ii) six months after the date the outside director ceases to be a
director of the Company other than as a result of his death; or (iii) one year
after the outside director ceases to be a director by reason of his death. In
1999, the Board of Directors suspended the grant of options to outside directors
under the 1997 Stock Incentive Plan until the year 2000. Accordingly, no options
will be granted to outside directors under the 1997 Stock Incentive Plan on July
10, 1999.
9
<PAGE> 10
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
From the beginning of 1998 until May 12, 1998, the members of the
Compensation Committee of the Board of Directors were Emile A. Battat, Richard
O. Jacobson, Jerome J. McGrath, John H.P. Maley, Hugh Morgan, Jr., J. Kenneth
Smith, Roger Stebbing and John P. Stupp, Jr. From May 12, 1998 until the end of
1998, the Compensation Committee members were Messrs. Jacobson, Maley, Morgan
and Smith.
During 1998, John H.P. Maley provided certain consulting services to
the Company for which he was paid $21,000. Mr. Maley has also provided
consulting services to the Company in 1999 and has been paid $10,500 for those
services. The Company expects that Mr. Maley will provide additional consulting
services in the future.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth information regarding the beneficial
ownership of shares of common stock of the Company as of April 29, 1999 by (i)
each of the directors of the Company, two of whom are also the Board of
Directors' nominees for election as directors at the annual meeting; (ii) the
executive officers of the Company who are named in the Summary Compensation
Table herein (including two former executive officers who are named in the
Summary Compensation Table); (iii) all directors and executive officers of the
Company as a group, and (iv) each other person known by the Company to be the
beneficial owner of more than 5% of the outstanding common stock of the Company.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED (A) OF CLASS (A)
- ------------------------ ---------------------- ------------
<S> <C> <C>
Emile A. Battat 88,300 (b) 3.2 %
Richard O. Jacobson 93,900 (b) 3.4 %
Jerome J. McGrath 20,800 (b) *
John H. P. Maley 17,500 (b) *
Hugh J. Morgan, Jr. 46,000 (b) 1.7 %
J. Kenneth Smith 21,220 (b)(c) *
Roger F. Stebbing 19,300 (b) *
John P. Stupp, Jr. 155,500 (b)(d) 5.6 %
Jeffery Strickland 34,584 (b)(e) 1.3 %
Charles S. Gamble 6,300 (b) *
Jerry A. Howard(f) 30,400 (f) 1.1 %
Dick Rabenau(g) 3,000 (g) *
Dimensional Fund Advisors Inc.(h) 234,150 8.5 %
T. Rowe Price Associates, Inc.(i) 275,000 10.0 %
All directors and executive
officers as a group 503,404 (j) 18.2 %
</TABLE>
- -------------
*Less than 1% of class outstanding
10
<PAGE> 11
(a) For purposes of this table, the percentage of class beneficially owned
has been computed, in accordance with Rule 13d-3(d)(1) under the
Exchange Act, on the basis of 2,524,429 shares of common stock
outstanding on April 29, 1999 plus 237,200 shares of common stock
issuable pursuant to options exercisable on April 29, 1999 or within 60
days thereafter. Except as otherwise indicated in the notes to this
table, beneficial ownership includes sole voting and investment power.
(b) The shares listed include the following shares issuable upon the
exercise of options exercisable on April 29, 1999 or within 60 days
thereafter: Mr. Battat, 24,000; Mr. Jacobson, 16,500; Mr. McGrath,
16,500; Mr. Maley, 16,500; Mr. Morgan, 16,500; Mr. Smith, 16,500; Mr.
Stebbing, 16,500; Mr. Stupp, 16,500; Mr. Strickland, 31,700; and Mr.
Gamble, 4,000. The foregoing directors and executive officers are
parties to award agreements with the Company setting forth certain
terms of the options granted to them as follows: (i) all such persons
are parties to award agreements under the 1997 Stock Incentive Plan;
(ii) all outside directors are parties to award agreements under the
1998 Outside Directors Plan; and (iii) Mr. Strickland is a party to
award agreements under the 1990 Stock Option Plan and the 1994 Stock
Incentive Plan. The shares listed for all directors and executive
officers as a group include 175,200 shares issuable upon the exercise
of options currently exercisable on April 29, 1999 or within 60 days
thereafter.
(c) Includes 630 shares held under usufruct as to which Mr. Smith has
voting power but no dispositive power.
(d) Includes 135,000 shares held by Stupp Bros., Inc. as to which shares
Mr. Stupp shares voting power and investment power as a director and
executive officer of, and as a voting trustee of a voting trust which
owns 100% of the stock of, Stupp Bros., Inc. The 135,000 shares held by
Stupp Bros., Inc. represents 5.5% of the common stock of the Company
outstanding on April 29, 1999 and 4.9% of the class computed as set
forth in note (a) above. The business address for Stupp Bros., Inc. is
120 South Central Avenue, Suite 1650, St. Louis, Missouri 63105.
(e) Includes 1,225 shares owned jointly with his wife.
(f) Mr. Howard ceased serving as a director, and his employment with the
Company terminated, on October 6, 1998. The number of shares
beneficially owned by Mr. Howard is based upon the information set
forth in the preliminary proxy statement filed with the Commission by
The Atrion Stockholder Committee on April 16, 1999.
(g) Mr. Rabenau's employment with Atrion Medical Products, Inc. terminated
on November 15, 1998. The number of shares beneficially owned by Mr.
Rabenau is based on information set forth in the Form 5 filed by him
with the Commission on February 9, 1999.
(h) The address of Dimensional Fund Advisors, Inc. is 1299 Ocean Avenue,
11th Floor, Santa Monica, California 90401. Based upon a Schedule 13G
dated February 12, 1999 filed with the Commission and furnished to the
Company by Dimensional Fund Advisors Inc. ("Dimensional"), a registered
investment adviser, reporting that Dimensional is deemed to have
beneficial ownership of 234,150 shares of common stock of the Company
and that all of such shares are held in portfolios of DFA Investment
Dimensions Group Inc., a registered open-end investment company, or in
series of the DFA Investment Trust Company, a Delaware business trust,
or the DFA Group Trust and DFA Participation Group Trust, investment
vehicles for qualified employee benefit plans, all of which Dimensional
serves as investment manager. In its Schedule 13G, Dimensional has
reported that it has sole power to vote or direct the vote and the sole
power to dispose or direct the disposition of 234,150 shares of common
stock of the Company. Dimensional has disclaimed beneficial ownership
of all such shares.
(i) The address of T. Rowe Price Associates, Inc. is 100 East Pratt Street,
Baltimore, Maryland 21202. Based upon a Schedule 13G dated February 12,
1999 filed with the Commission and furnished to the Company by T. Rowe
Price Associates, Inc. ("Price Associates") and T. Rowe Price Small-Cap
Value Fund, Inc. reporting that T. Rowe Price Small-Cap Value Fund,
Inc. has sole power to vote or direct the vote of such shares of common
stock and that Price Associates, which serves as investment adviser for
T. Rowe Price Small-Cap Value Fund, Inc., has sole power to dispose or
direct the disposition of such shares. For purposes of the reporting
requirements of the Exchange Act, Price Associates is deemed to be a
beneficial owner of such shares of common stock; however, Price
Associates has disclaimed beneficial ownership of all such shares.
(j) See notes (b)-(e) above.
11
<PAGE> 12
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
In 1998, the Company paid Piedmont Enterprises, Inc. $13,000 for
consulting services. Emile A. Battat, Chairman of the Board, President and Chief
Executive Officer of the Company, is the President and Chief Executive Officer
and sole stockholder of Piedmont Enterprises, Inc. These consulting services
were rendered prior to the time Mr. Battat began receiving compensation as an
executive officer of the Company. It is not anticipated that Piedmont
Enterprises, Inc. or Mr. Battat will render consulting services to the Company
in 1999.
See Item 11, "Compensation Committee Interlocks and Insider Participation."
12
<PAGE> 13
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Atrion Corporation
By: /s/ Emile A. Battat
-----------------------
Emile A. Battat
Chairman of the Board,
President and Chief
Executive Officer
Dated: April 30, 1999
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
Signature Capacity
/s/ Emile A. Battat Chairman of the Board,
-------------------------- President and Chief
Emile A. Battat Executive Officer
(Principal Executive Officer)
/s/ Jeffery Strickland Vice President and
-------------------------- Chief Financial Officer,
Jeffery Strickland Secretary and Treasurer
(Principal Financial and Accounting Officer)
13
<PAGE> 14
/s/ Richard O. Jacobson Director
- ----------------------------
Richard O. Jacobson
/s/ John H.P. Maley Director
- ----------------------------
John H.P. Maley
/s/ Jerome J. McGrath Director
- ----------------------------
Jerome J. McGrath
/s/ Hugh J. Morgan, Jr. Director
- ----------------------------
Hugh J. Morgan, Jr.
/s/ J. Kenneth Smith Director
- ----------------------------
J. Kenneth Smith
/s/ Roger F. Stebbing Director
- ----------------------------
Roger F. Stebbing
/s/ John P. Stupp, Jr. Director
- ----------------------------
John P. Stupp, Jr.
All dated April 30, 1999
14
