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DRAFT
DATED: 4/16/99
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(Rule 14A-101)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement [ ] Confidential, for Use of the
[ ] Definitive Additional Materials Commission Only (as permitted)
[ ] Soliciting Material Pursuant to by Rule 14a-6(e)(2)
Rule 14a-11(c) or Rule 14a-12
ATRION CORPORATION
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(Name of Registrant as Specified In Its Charter)
THE ATRION STOCKHOLDER COMMITTEE
Jerry A. Howard
R. Scott Nieboer
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No Fee Required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(I)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
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filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total Fee Paid:
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[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 3
PRELIMINARY PROXY SUBJECT TO COMPLETION APRIL ___, 1999
PROXY STATEMENT IN SUPPORT OF
THE ATRION STOCKHOLDER COMMITTEE
104 Woodmont Boulevard, Suite 200
NASHVILLE, TN 37205
(615) 279-9102
IN CONNECTION WITH THE
1999 ANNUAL MEETING OF STOCKHOLDERS OF
ATRION CORPORATION
ONE ALLENTOWN PARKWAY
ALLEN, TX 75002
TO BE HELD ON ____, 1999
This Proxy Statement and the enclosed BLUE proxy card are being
furnished to stockholders of Atrion Corporation ("Atrion" or the "Company") in
connection with the solicitation of proxies by The Atrion Stockholder Committee
(the "Committee"), Jerry A. Howard and R. Scott Nieboer, for use at the 1999
Annual Meeting of Stockholders of the Company and at any adjournments thereof
(the "1999 Annual Meeting"). The Company has not yet announced the date, time,
place or the record date of the 1999 Annual Meeting, but the Committee expects
that the Company will provide such information in due course. Only stockholders
of record at the close of business on the record date will be entitled to notice
of and to vote at the 1999 Annual Meeting.
Leading the Committee is Mr. Jerry A. Howard, the former President,
Chief Executive Officer and Chairman of the Board of Directors of the Company.
Mr. Howard has historically been a long term supporter of the Company and its
management, however, Mr. Howard has become increasingly concerned about the
decline in the stock price of the Company, and believes the current environment
represents an appropriate time for the Company to pursue a course of action
aimed at maximizing stockholder value in a timely fashion
THIS SOLICITATION IS BEING MADE BY THE COMMITTEE IN OPPOSITION TO THE
INCUMBENT BOARD OF DIRECTORS AND MANAGEMENT OF THE COMPANY.
THE COMMITTEE BELIEVES ITS PLAN, AS OUTLINED AND DESCRIBED HEREIN, WILL
DELIVER THE MAXIMUM PRESENT VALUE FOR YOUR SHARES OF COMMON STOCK. IN ORDER TO
BEGIN TO IMPLEMENT THE PLAN, THE COMMITTEE BELIEVES THAT THE COMMITTEE NOMINEES
MUST HAVE REPRESENTATION ON THE COMPANY'S BOARD OF DIRECTORS. ACCORDINGLY, YOU
ARE URGED TO VOTE TO REPLACE THE INCUMBENT DIRECTORS WHO WILL STAND FOR
REELECTION AT THE 1999 ANNUAL MEETING WITH THE COMMITTEE'S NOMINEES (MESSRS.
HOWARD AND NIEBOER) BY MARKING, SIGNING, DATING AND PROMPTLY RETURNING THE
ENCLOSED BLUE PROXY CARD IN THE POSTAGE PAID ENVELOPE PROVIDED. AS THERE WILL
LIKELY BE ONLY TWO DIRECTORS ELECTED AT THE 1999 ANNUAL MEETING, OUT OF A TOTAL
OF SEVEN DIRECTORS, THERE CAN BE NO ASSURANCE THAT THE COMMITTEE'S NOMINEES WILL
BE ABLE TO CONVINCE THE BOARD TO ADOPT THEIR PROPOSALS AND IMPLEMENT THE PLAN.
IF THEY DO NOT SUCCEED, THE COMMITTEE INTENDS TO NOMINATE ADDITIONAL DIRECTORS
TO STAND FOR ELECTION AT THE 2000 ANNUAL MEETING OF STOCKHOLDERS TO REPLACE THE
INCUMBENT DIRECTORS STANDING FOR REELECTION AT SUCH MEETING.
Any stockholder who executes and delivers such proxy will have the
right to revoke it at anytime before it is exercised, by filing with the
Committee c/o The Atrion Stockholder Committee, 104 Woodmont Boulevard, Suite
200, Nashville, TN 37205, or with the Secretary of the Company at its principal
executive offices at One Allentown Parkway, Allen, TX 75002, an instrument
revoking it or a duly executed proxy bearing a later date, or by appearing in
person and voting at the 1999 Annual Meeting.
<PAGE> 4
This Proxy Statement is first being sent or given to one or more
stockholders on or about April __, 1999. According to the Company's annual
report on Form 10-K for the fiscal year ended December 31, 1998, there were
2,825,953 shares of Common Stock outstanding on March 18, 1999, and, unless
otherwise indicated, references herein to the percentage of outstanding shares
of Common Stock owned by any person were computed based upon such number of
outstanding shares. Each share of Common Stock is entitled to one vote.
IMPORTANT
CAREFULLY REVIEW THIS PROXY STATEMENT AND THE ENCLOSED MATERIAL. YOUR
VOTE IS IMPORTANT. NO MATTER HOW MANY OR HOW FEW SHARES YOU OWN, PLEASE VOTE FOR
THE ELECTION OF THE COMMITTEE'S NOMINEES BY SIGNING, MARKING, DATING AND
PROMPTLY MAILING THE ENCLOSED BLUE PROXY CARD.
IF YOU OWN SHARES OF THE COMPANY BUT YOUR STOCK CERTIFICATE IS HELD FOR
YOU BY A BROKERAGE FIRM, BANK OR OTHER INSTITUTION, IT IS VERY LIKELY THAT THE
STOCK CERTIFICATE IS ACTUALLY IN THE NAME OF SUCH BROKERAGE FIRM, BANK OR OTHER
INSTITUTION. IF SO, ONLY SUCH ENTITY CAN EXECUTE A BLUE PROXY CARD AND VOTE YOUR
SHARES OF COMMON STOCK. THE BROKERAGE FIRM, BANK OR OTHER INSTITUTION HOLDING
THE SHARES FOR YOU IS REQUIRED TO FORWARD PROXY MATERIALS TO YOU AND SOLICIT
YOUR INSTRUCTIONS WITH RESPECT TO THE GRANTING OF PROXIES; IT CANNOT VOTE YOUR
SHARES UNLESS IT RECEIVES YOUR SPECIFIC INSTRUCTIONS.
THE COMMITTEE REQUESTS THAT YOU VOTE ONLY THE BLUE PROXY CARD PROVIDED
BY THE COMMITTEE AND THAT YOU NOT RETURN ANY PROXY CARD PROVIDED TO YOU BY THE
COMPANY EVEN TO VOTE AGAINST THE CURRENT BOARD'S SLATE OF INCUMBENT DIRECTORS.
RETURNING ANY PROXY CARD PROVIDED TO YOU BY THE COMPANY COULD REVOKE THE BLUE
PROXY CARD THAT YOU SIGN, DATE AND MAIL.
BY SIGNING, DATING AND MAILING THE BLUE PROXY CARD YOU, AS OWNERS OF
THE COMPANY, WILL SEND A MESSAGE TO THE BOARD OF DIRECTORS THAT YOU ARE IN FAVOR
OF MAXIMIZING STOCKHOLDER VALUE IN A TIMELY FASHION.
If you have any questions about giving your proxy or require assistance
in voting your shares, please call:
THE ATRION STOCKHOLDER COMMITTEE
104 WOODMONT BOULEVARD, SUITE 200
NASHVILLE, TN 37205
(615) 279-9102
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<PAGE> 5
THE COMMITTEE AND ITS NOMINEES
The Committee was formed on April 10, 1999 in response to its members'
concern about the price of the Company's Common Stock. The Committee is
presently comprised of its founding members; Jerry A. Howard, the former
President, Chief Executive Officer and Chairman of the Board of Directors of the
Company and R. Scott Nieboer, an investment banking executive, each of whom are
stockholders of the Company. The Committee is deemed to be the beneficial owner
of 50,400 shares or 1.78% of the Common Stock of the Company. (See "Reasons for
the Solicitation")
From December 1984 through October 1998, Jerry A. Howard served the
Company in various executive capacities, including President, Chief Executive
Officer and Chairman of the Board of Directors. In January 1998, Mr. Howard
resigned as the Company's Chairman, but remained its Chief Executive Officer
until October 1998, to oversee the Company's transition from a natural gas
company to a medical device company. In October 1998, Mr. Howard resigned as the
Company's Chief Executive Officer and a member of the Board of Directors.
R. Scott Nieboer has been engaged in the securities business for the
past twelve years. From July 1986 to February 1988, Mr. Nieboer was employed by
Merrill Lynch & Co. in New York. From February 1988 to October 1998, Mr. Nieboer
was employed by J.C. Bradford & Co., an investment-banking firm located in
Nashville, TN. While at J.C. Bradford & Co., Mr. Nieboer held the title of
partner and was manager of the firm's proprietary arbitrage trading activities.
In October 1998, Mr. Nieboer resigned as a partner of J.C. Bradford & Co. to
form a new company, 5th Market, Inc., which is designing an electronic
securities trading network for use by institutional investors.
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<PAGE> 6
BACKGROUND OF THE PROPOSAL
As more fully discussed below, the Committee is soliciting proxies in
connection with the 1999 Annual Meeting for the election of Jerry A. Howard and
R. Scott Nieboer (the "Committee Nominees") to the Board of Directors of the
Company.
From December 1984 until October 1998, Jerry A. Howard served in
various executive capacities including President, Chief Executive Officer and
Chairman of the Board of Directors of the Company. During much of this period,
the Company was engaged in natural gas related businesses.
In April 1994, the Company began to diversify its operations by
acquiring its Atrion Medical Products subsidiary from Ryder International for
$14.3 million, which subsidiary designs, develops, manufactures and sells
proprietary products for the medical products industry.
In May 1996, the Company further expanded its operations into the
medical products business by purchasing Halkey-Roberts for $11.7 million. This
subsidiary designs, develops, manufactures and sells proprietary medical device
and inflation control components.
Due to the changed environment resulting from the deregulation of the
natural gas industry, the Company's Board of Directors decided to divest its
natural gas businesses. The sale of the Company's principle natural gas related
assets was consummated in May 1997; however, the Company retained ownership of a
22 mile long oxygen pipeline that operates between Decatur, Alabama and
Courtland, Alabama.
In January 1998, the Company consummated the purchase of Quest Medical
Products, a manufacturer of cardiovascular and specialized intravenous fluid
delivery products for approximately $23.7 million.
In January 1998, Mr. Howard resigned as the Company's Chairman of the
Board, but remained as the Company's President and Chief Executive Officer to
oversee the transition of the Company to a manufacturer and marketer of medical
related products.
On October 6, 1998, after almost 14 years of service with the Company
Mr. Howard resigned from the Board of Directors and as the Company's President &
Chief Executive Officer. Following his resignation Mr. Howard has held
conversations with several other stockholders, who have expressed concern
regarding the price of the Company's Common Stock, and about alternative means
of achieving maximum value for all stockholders.
Mr. Howard, along with the other member of the Committee, now believe
that a business strategy involving the ongoing operation of the Company will
provide less value to stockholders on a net present value basis when compared to
a strategy involving the sale of the Company or its component businesses to
companies seeking a strategic position, additional product lines or additional
capacity in the various industries in which the Company operates. The Committee
believes that such a change in strategy could only be accomplished by obtaining
representation on the Company's Board of Directors and using its best efforts to
convince a majority of the Directors to effect such sale or sales.
On March 12, 1999, Mr. Howard delivered a letter to the Company's
Secretary at its principal executive offices in Allen, TX, pursuant to Sections
1.15 of Article One of the Company's By-laws which, among other things, notified
the Company of his intent to nominate Directors for election to the Company's
Board at the next annual stockholders' meeting in opposition to the nominees put
forth by the Company's current Board of Directors.
On March 22, 1999 the Company initiated a tender offer to purchase
400,000 shares of its Common Stock in a Dutch Auction at prices between $8.00
and $10.00 per share.
In its offer to purchase, the Company stated that "The Board of
Directors believes that the Shares are undervalued at the present
time and that the purchase of Shares is an attractive use of the
Company's financial resources."
The Company's Common Stock closed at $8.00 per share on March 16,
1999, the day before the announcement of the tender offer.
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<PAGE> 7
REASONS FOR THE SOLICITATION
The Committee was formed to initiate actions to enhance stockholder
value on a timely basis by offering stockholders an alternate slate of nominees
in opposition to the Company's nominees at the 1999 Annual Meeting. Jerry A.
Howard, who is heading the Committee, has historically been a long-term
supporter of the Company, past member of the Company's management team and Board
of Directors, and has been a stockholder since 1985. The Committee is deeply
concerned about the current market value of the Company's common stock.
SEVERE DECLINE IN THE MARKET VALUE OF COMMON STOCK
On May 30, 1997, the date the Company completed the sale of its
principal natural gas businesses, the price of the Company's Common Stock was
$13.875 per share. Since that time, the Common Stock of the Company has declined
by approximately 41% to 8.125, which was the closing price of the stock on March
11, 1999, the date preceding Mr. Howard's notification to the Company of his
intent to nominate Directors at the 1999 Annual Meeting. For illustrative
purposes, the following graph compares a hypothetical $1.00 investment in the
Company's Common Stock to that of a hypothetical $1.00 investment made in the
Media General Index of Medical Instruments and Supplies, both hypothetical
investments being made on May 30, 1997.
COMPARISON OF CUMULATIVE TOTAL RETURN OF COMPANY AND PEER GROUP
<TABLE>
<CAPTION>
5/30/97 6/30/97 9/30/97 12/31/97 3/31/98 6/30/98 9/30/98 12/31/98 3/11/99
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ATRION Corp 100 113.51 99.74 101.33 82.16 64.82 57.06 58.43 59.34
MG Group Index 100 105.21 108.84 104.31 125.4 121.88 111.87 134.72 146.36
</TABLE>
VALUATION DISCREPANCY
Due to the decline in the price of the Company's Common Stock, the
Committee believes that there exists a significant discrepancy between the
current market price of the Company's Common Stock and the intrinsic value of
the Company's underlying businesses.
The valuation methodologies used by the Committee included: 1) a
discounted cash flow analysis using certain information from publicly available
financial statements and certain assumptions and projections applied to those
statements, 2) a comparison of selected financial information of the Company
with similar information from publicly held companies in the industry, and 3) a
comparison of selected financial information of the Company with information
from a group of recent company acquisition transactions occurring in the
industry and similar industries.
LACK OF STRATEGIC OR SYNERGISTIC MIX OF BUSINESSES
Although most of the Company's businesses are medical related, the
Committee believes the various businesses which are part of and comprise the
Company lack a strategic fit and synergy. The Committee believes that each of
the component parts of the Company's business would be attractive as an
acquisition candidate to a larger entity in a related industry who would be able
to consolidate various overlapping functions and benefit from potential cost
savings from the operations of those businesses.
THE COMMITTEE'S PLAN
The Committee believes that the most attractive alternative for
increasing the value of the Common Stock, on a net present value basis, may be
through the sale of the Company or its component businesses. The Committee
believes that the two members of the current Board of Directors who are standing
for reelection at the 1999 Annual Meeting, and perhaps those who will stand for
election at the annual meeting of stockholders in 2000, will have to be replaced
with its own nominees if it is to achieve its goal of maximizing stockholder
value.
If the Committee is successful in having its nominees elected to the
Company's Board of Directors at the 1999 Annual Meeting, the Committee Nominees
intend to use their best efforts to influence a sale of the Company or its
component businesses in an effort to provide stockholders with the maximum net
present value per share for each share of Common Stock owned. As there will
likely be only two Directors elected at the 1999 Annual Meeting, out of a total
of seven Directors, there can be no assurance that the Committee's nominees will
be able to convince the Board to
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<PAGE> 8
adopt their proposals and implement the Plan. If they do not succeed, the
Committee intends to nominate additional Directors to stand for election at the
annual meeting of stockholders in 2000 to replace the incumbent Directors
standing for reelection at such meeting.
NO ASSURANCE CAN BE GIVEN THAT A SALE, DIVESTITURE OR OTHER
EXTRAORDINARY TRANSACTION CAN BE ACCOMPLISHED OR WOULD RESULT IN ACHIEVING FULL
VALUE FOR STOCKHOLDERS.
BY MARKING, DATING, SIGNING AND MAILING THE ENCLOSED BLUE PROXY CARD,
YOU WILL BE VOTING FOR A SLATE OF NOMINEES COMMITTED TO PROVIDING STOCKHOLDERS
WITH AN ALTERNATIVE BUSINESS PLAN AIMED AT MAXIMIZING THE VALUE OF YOUR HOLDINGS
IN THE COMMON STOCK OF THE COMPANY.
YOUR VOTE IS EXTREMELY IMPORTANT. THE COMMITTEE URGES YOU NOT TO DELAY
IN CASTING YOUR VOTE IN FAVOR OF THE COMMITTEE'S NOMINEES.
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<PAGE> 9
PROPOSAL FOR ELECTION OF DIRECTORS
The Committee is soliciting the proxies of stockholders for the
election of the Committee's Nominees, Jerry A. Howard and R. Scott Nieboer, as
Directors of the Company at the 1999 Annual Meeting, to serve until their
successors are duly elected and qualified.
On March 12, 1999, Jerry A. Howard provided written notice to the
Company of his intent to nominate himself and R. Scott Nieboer for election to
the Board. Such notice was provided pursuant to Section 1.15 of Article One of
the Company's By-laws which sets forth certain requirements for stockholders
intending to nominate candidates for election to the Board, including, in
general, the requirement that a notice containing specified information be
submitted to the Company not more than 90 days nor less than 60 days prior to
the first anniversary of the preceding year's annual meeting of stockholders
(May 12, 1998). For information concerning the nominees, see "The Committee
Nominees" below.
In accordance with the Company's Certificate of Incorporation and
by-laws, the number of Directors of the Corporation is fixed by resolution
adopted by a majority of the entire Board. The Directors are to be divided into
three classes, as nearly equal in number as possible. At each annual meeting of
stockholders, members of one of the classes, on a rotating basis, are elected
for a three-year term. Based on information contained in reports filed by the
Company with the Securities and Exchange Commission, the Board is currently
comprised of eight Directors, but the Company intends to reduce the size of its
Board of Directors to seven effective at the 1999 Annual Meeting. Therefore, the
Committee believes it is the Company's intention to nominate two Directors to
stand for election at the 1999 Annual Meeting.
THE COMMITTEE NOMINEES
Each of the Committee Nominees has consented to serve as a director if
elected. The members of the Committee have entered into an Agreement pursuant to
which they have agreed to nominate each other as directors at the 1999 Annual
Meeting, to share the expenses of the proxy solicitation campaign, and to
indemnify each other against certain liabilities arising out of the proxy
solicitation campaign. The information below concerning age, principal
occupation, Directorships and beneficial ownership of Common Stock has been
furnished by the respective nominees.
<TABLE>
<CAPTION>
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NAME AND ADDRESS AGE PRINCIPAL OCCUPATION NUMBER OF SHARES
BENEFICIALLY OWNED
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<S> <C> <C>
Jerry A. Howard 56 From December 1984 to October 1998, Mr. Howard was 30,400
3011 Country Club Drive employed by Atrion Corporation in an executive capacity.
McKinney, TX 75070 During this period, Mr. Howard held various titles
including President, Chief Executive Officer and Chairman
of the Board of Directors. From October 1998 to present,
Mr. Howard has been self-employed and engaged in the
management of his personal investments.
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R. Scott Nieboer 37 From 1986 to 1988, Mr. Nieboer was employed by Merrill 20,000
217 Lynwood Terrace Lynch & Co. in New York. From 1988 to October 1998, Mr.
Nashville, TN 37205 Nieboer was employed by J.C. Bradford & Co., an
investment-banking firm located in Nashville, TN. At J.C.
Bradford & Co., Mr. Nieboer held the title of Partner and
was manager of the firm's proprietary arbitrage trading
operations. In October 1998, Mr. Nieboer left J.C.
Bradford & Co. to form a new company, 5th Market, Inc.,
which will specialize in electronic trading systems for
institutional investors.
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
All transactions in securities of the Company engaged in by any member
of the Committee during the past two years are summarized on Appendix A.
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<PAGE> 10
VOTING AND PROXY PROCEDURES
The presence, in person or by proxy, of a majority of the
outstanding shares of the Company's Common Stock will constitute a quorum at the
1999 Annual Meeting. Each outstanding share of Common Stock is entitled to one
vote on each matter properly presented at that meeting. Directors of the Company
are elected by a plurality of the votes cast by the stockholders entitled to
vote at a meeting at which a quorum is present. A plurality means that the
nominees with the largest number of votes are elected as Directors.
Consequently, election of the Committee Nominees requires the affirmative vote
of a plurality of the votes cast in the election at the Annual Meeting, assuming
a quorum is present or otherwise represented at the Annual Meeting. All other
matters submitted at the Annual Meeting will be determined by a majority of the
votes cast.
Abstentions and broker non-votes will be counted as present and
represented at the Annual Meeting for purposes of determining a quorum.
Abstentions and broker non-votes, however, will have no effect on the outcome of
the election of Directors. If no directions are given and the signed BLUE Proxy
Card is returned, the attorneys-in-fact appointed in the proxy will vote the
shares of Common Stock represented by that BLUE Proxy Card FOR the election of
the Committee Nominees. In instances where brokers are prohibited from
exercising customary discretionary authority for beneficial owners who have not
returned proxies to the brokers, those shares of Common Stock will not be
counted in the vote total.
Stockholders of record as of the close of business on the Record Date
will be entitled to vote at the Annual Meeting. IF YOU WERE A STOCKHOLDER OF
RECORD ON THE RECORD DATE, YOU WILL RETAIN THE VOTING RIGHTS IN CONNECTION WITH
THE ANNUAL MEETING EVEN IF YOU SELL OR SOLD YOUR SHARES OF THE COMPANY'S COMMON
STOCK AFTER THE RECORD DATE.
Accordingly, it is important that you vote the shares of Common Stock
held by you on the Record Date or grant a proxy to vote such shares whether or
not you still own such shares.
The Committee believes that two Directors are to be elected at the 1999
Annual Meeting to hold office until the 2002 annual meeting of the stockholders
of the Company and until their successors have been duly elected and qualified.
The Committee is soliciting your proxy in support of the election of the
Committee Nominees. If you wish to vote for the Committee Nominees by proxy, you
must submit the BLUE Proxy Card furnished to you by the Committee and must NOT
submit the Board of Directors' white Proxy Card. If a stockholder submits both a
BLUE Proxy Card and the Company's white Proxy Card, only the latest dated proxy
will be counted.
Remember, only your latest dated, validly executed proxy will count.
Therefore, even if you have already returned a white management proxy card, YOU
CAN SUPPORT THE COMMITTEE NOMINEES BY RETURNING A LATER DATED BLUE PROXY CARD.
If you choose to return a BLUE proxy card, please do not subsequently return any
white proxies, even to vote against management's Board slate, as that white
proxy may revoke the BLUE proxy you have submitted.
Any stockholder giving a proxy may revoke it at any time before it is
voted by attending the 1999 Annual Meeting and voting his or her shares of the
Company's Common Stock in person, by giving written notice to the Secretary of
the Company at One Allentown Drive, Allen, TX stating that the proxy has been
revoked, or by delivery of a proxy bearing a later date. An executed proxy card
may be revoked at any time before its expiration by marking, dating, signing and
delivering a written revocation before the time that the action authorized by
the executed proxy becomes effective. A revocation may be in any written form
validly signed by the record holder as long as it clearly states that the proxy
card, which is properly completed, will constitute a revocation of an earlier
consent. Although a revocation is effective if delivered to the Company, the
Committee requests that either the original or photostatic copies of all
revocations of all white proxies be mailed or delivered to The Atrion
Stockholder Committee, 104 Woodmont Boulevard, Suite 200, Nashville, TN 37205,
so that it will be aware of all revocations and can more accurately determine
the validity of received proxies.
STOCKHOLDERS OF RECORD ON THE RECORD DATE ARE ELIGIBLE TO VOTE ON THE MATTERS
DISCUSSED ABOVE. THE COMMITTEE RECOMMENDS THAT ANYONE OWNING SHARES OF THE
COMPANY'S COMMON STOCK BENEFICIALLY (BUT NOT OF RECORD), SUCH AS A PERSON WHOSE
OWNERSHIP OF SHARES IS THROUGH A BROKER, BANK OR OTHER FINANCIAL INSTITUTION,
SHOULD INSTRUCT THAT BROKER, BANK OR FINANCIAL INSTITUTION TO EXECUTE THE BLUE
PROXY CARD ON HIS OR HER BEHALF OR TO HAVE THE BROKER, BANK OR FINANCIAL
INSTITUTION'S NOMINEE EXECUTE THE BLUE PROXY CARD.
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<PAGE> 11
SOLICITATION OF PROXIES; EXPENSES
Proxies may be solicited by the Committee, its members and by its
agents by mail, telephone, telegraph and personal solicitation. Banks, brokerage
houses and other custodians, nominees and fiduciaries will be requested to
forward proxy solicitation material to the beneficial owners of the Company's
Common Stock that such institutions hold of record.
The entire expense of preparing and mailing this Proxy Statement, and
the total expenditures relating to the solicitation of proxies (including,
without limitation, costs, if any, related to advertising, printing, fees of
attorneys, financial advisors, solicitors, consultants, accountants, public
relations, transportation and litigation) will be borne by the Committee.
The Committee estimates that its total expenditures relating to this
proxy solicitation will be approximately $100,000. Total expenditures to date
relating to this proxy solicitation have been approximately $35,000. In the
event that the Committee is successful in electing its nominees to the Company's
Board, the Committee intends to seek reimbursement from the Company for its
expenses in connection with this proxy solicitation.
CERTAIN INFORMATION CONCERNING THE COMMITTEE, ITS NOMINEES AND THE OTHER
PARTICIPANTS IN THE SOLICITATION
Information concerning Jerry A. Howard and R. Scott Nieboer
(collectively, the "Committee") who are each "participants in the solicitation"
as defined in the proxy rules promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and their affiliates and associates, is set forth on Appendix A hereto.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
The Company and Mr. Howard are parties to an agreement entered into at
the time of Mr. Howard's resignation from the Company pursuant to which Mr.
Howard is entitled to receive certain monies from the Company throughout 1999.
ADDITIONAL INFORMATION
Stockholders are referred to the Company's Proxy Statement with respect
to the compensation and remuneration paid and payable and other information
related to the Company's officers and Directors, beneficial ownership of the
Company's securities and the procedures for submitting proposals for
consideration at the 2000 Annual Meeting of Stockholders of the Company. Certain
information contained herein is based on, or incorporated by reference to, the
Company's Proxy Statement. The Committee is not aware that any of such
information is inaccurate or incomplete.
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<PAGE> 12
APPENDIX A
COMMITTEE MEMBER'S PURCHASE AND SALES HISTORY
The following table provides information regarding the purchase and sales of
each member of the Committee for the prior two years:
<TABLE>
<CAPTION>
================================================================================================
DATE NATURE OF TRANSACTION NUMBER OF SHARES
================================================================================================
<S> <C> <C>
1/27/99 Purchase by Jerry A. Howard 400
- ------------------------------------------------------------------------------------------------
7/24/98 Purchase by Jerry A. Howard 1,961
- ------------------------------------------------------------------------------------------------
7/16/98 Purchase by Jerry A. Howard 10,000
- ------------------------------------------------------------------------------------------------
1/25/99 Purchase by R. Scott Nieboer 2,000
- ------------------------------------------------------------------------------------------------
1/29/99 Purchase by R. Scott Nieboer 1,500
- ------------------------------------------------------------------------------------------------
2/5/99 Purchase by R. Scott Nieboer 5,000
- ------------------------------------------------------------------------------------------------
2/19/99 Purchase by R. Scott Nieboer 3,500
- ------------------------------------------------------------------------------------------------
3/15/99 Purchase by R. Scott Nieboer 8,000
- ------------------------------------------------------------------------------------------------
</TABLE>
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Appendix A
PRELIMINARY COPY--FOR THE INFORMATION OF
THE SECURITIES AND EXCHANGE COMMISSION ONLY
ATRION CORPORATION
1999 ANNUAL MEETING
SOLICITATION IN OPPOSITION TO THE COMPANY'S NOMINEES
THIS PROXY IS SOLICITED ON BEHALF OF THE ATRION STOCKHOLDER COMMITTEE,
JERRY A. HOWARD AND R. SCOTT NIEBOER (COLLECTIVELY, THE "COMMITTEE"), FOR THE
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON , 1999, OR ANY POSTPONEMENT OR
ADJOURNMENT THEREOF.
THE UNDERSIGNED hereby constitute(s) and appoint(s) Jerry A. Howard and
R. Scott Nieboer and each of them with authority to act without the other, as
attorneys and proxies, with full power of substitution, to represent and to vote
all shares of the common stock of Atrion Corporation (the "Company") that the
undersigned would be entitled to vote if personally present at the above stated
Annual Meeting, and at any postponement or adjournment thereof, as instructed
below. The undersigned hereby revokes any previous proxies with respect to the
matters covered by this proxy.
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1. ELECTION OF DIRECTORS
The Atrion Stockholder Committee nominees:
The Committee recommends a vote FOR the election of
the Committee Nominees listed below:
Jerry A. Howard and R. Scott Nieboer
FOR the two nominees [ ] WITHHOLD AUTHORITY [ ]
listed above (except as marked to vote for the two nominees
to the contrary below) listed above
Instruction: To withhold authority to vote for any individual nominee,
mark FOR above and write that nominee's name in the space provided below.
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This Proxy will be voted in accordance with the undersigned
stockholder's directions hereon. In the absence of such directions, the Proxy
will be voted FOR the election of the Committee Nominees specified above.
As to such other matters as properly may come before the Annual
Meeting, this Proxy will be voted by the proxies named above according to their
discretion.
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Dated: __________________________________________
Signature:_______________________________________
Title: __________________________________________
Signature if held Jointly:_______________________
Please sign exactly as your name appears hereon.
When shares are held by joint tenants, both should
sign. When signing as an attorney, executor,
administer, trustee, guardian, or corporate
executor give full title as such. If a
corporation, sign in corporate name by authorized
person. If a partnership, sign in partnership name
by authorized person.
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PLEASE VOTE, DATE, SIGN AND PROMPTLY RETURN THIS PROXY USING THE
ENCLOSED POSTAGE PREPAID ENVELOPE.
