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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1 TO FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM ____________ TO ____________
COMMISSION FILE NO. 001-13543
ANGEION CORPORATION
(Exact name of registrant as specified in its charter)
MINNESOTA 41-1579150
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
350 Oak Grove Parkway, St. Paul, Minnesota 55127
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (651) 484-4874
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 Par Value
Preferred Stock Purchase Rights
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 the 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. [ ]
As of March 31, 2000, 3,379,724 shares of Common Stock of the
Registrant were outstanding, and the aggregate market value of the Common Stock
of the Registrant as of that date (based upon the last reported sale price of
the Common Stock at that date as reported by the Nasdaq National Market),
excluding outstanding shares beneficially owned by directors and executive
officers) was approximately $9,608,000.
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THE FOLLOWING ITEMS ARE AMENDED TO READ AS FOLLOWS:
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
INFORMATION ABOUT DIRECTORS
The following table sets forth certain information regarding the
Company's directors as of March 31, 2000.
<TABLE>
<CAPTION>
NAME OF DIRECTOR AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
- ---------------- --- ---------------------------------------- --------------
<S> <C> <C> <C>
Arnold A. Angeloni . . . . . . . . . . 57 President of Gateway Alliance LLC 1990
Dennis E. Evans. . . . . . . . . . . . . 61 President and Chief Executive Officer of 1990
Hanrow Financial
James B. Hickey, Jr. . . . . . . . . . 46 Management Consultant and Private 1998
Investor
Glen Taylor . . . . . . . . . . . . . . . .58 Chairman and Chief Executive Officer of 1992
Taylor Corporation
Richard E. Jahnke . . . . . . . . . . . 51 President and Chief Executive Officer of 2000
the Company
John C. Penn . . . . . . . . . . . . . . . 59 Vice Chairman and Chief Executive 2000
Officer Satellite Industries, Inc. and
Satellite Shelters, Inc.
Mark W. Sheffert . . . . . . . . . . . . 51 Chairman and Chief Executive Officer of 2000
Manchester Companies, Inc.
</TABLE>
OTHER INFORMATION ABOUT DIRECTORS
ARNOLD A. ANGELONI has been President of Gateway Alliance LLC, a
consulting firm for start-up ventures and business consolidations, since January
1996. From 1961 to 1995, Mr. Angeloni was employed by Deluxe Corporation, a
provider of check products and services to the financial payments industry, in
various administrative, marketing, and operations positions, most recently as
Senior Vice President and President of the Business Systems Division.
DENNIS E. EVANS has been President and Chief Executive Officer of
Hanrow Financial Group Ltd., a merchant banking partnership, since February
1989. Mr. Evans also serves on the board of directors of Minnesota Power & Light
Co.
JAMES B. HICKEY, JR. was President and Chief Executive Officer of the
Company from July 1998 to December 1999. From 1993 to 1997, Mr. Hickey was
President and Chief Executive Officer of Aequitron Medical, Inc., a
publicly-traded medical device company, whose principle products were portable
ventilators, infant apnea monitors and sleep diagnostic equipment. He also
serves on the board of directors of Allied Healthcare, Inc., Pulmonetics
Systems, Inc. and Vital Images, Inc.
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RICHARD E. JAHNKE has served as the Company's President and Chief
Executive Officer since January 2000. Since August 1998, Mr. Jahnke has also
served as the President and Chief Executive Officer of Medical Graphics. From
1993 to March 1998, Mr. Jahnke served as President and Chief Operating Officer
of CNS, Inc., a consumer health care products company. From 1991 to 1993, he was
Executive Vice President and Chief Operating Officer of Lemna Corporation, which
manufacturers and sells waste water treatment systems. From 1986 to 1991, Mr.
Jahnke was general manager of the government operations division of ADC
Telecommunications, an electronic communications systems manufacturer. From 1982
to 1986, he was Director of Marketing and Business and Technical Development at
BMC Industries, Inc. From 1972 to 1982, he held various positions of increasing
responsibility in engineering, sales and marketing management at 3M Company.
JOHN C. PENN has served as Vice Chairman and Chief Operating Officer of
Satellite Industries, Inc., a manufacturer of portable restroom facilities and
also of Satellite Shelters, Inc., a distributor of relocatable buildings, since
March 1998. From 1990 to March 1998, Mr. Penn served as President and Chief
Executive Officer of CDI Management Corp. From 1988 to 1990, he served as
President and Chief Executive Officer of Benson Optical Company. During the
previous 26 years, he served in various senior operations capacities for various
companies. Mr. Penn serves and has served on the Board of Directors of several
privately held corporations. He also served as a director of Medical Graphics
from December 1996 to December 1999.
MARK W. SHEFFERT has over 25 years of financial and financial services
experience. He is the founder of Manchester Companies, Inc. ("MCI") whose
business is investment banking, management consulting, corporate renewal and
commercial finance. Before founding MCI in December 1994, Mr. Sheffert was a
senior executive with First Bank System for over eight years where he served in
various high-level management capacities and was eventually named one of two
Presidents of First Bank System. Before joining First Bank System, Mr. Sheffert
was Chief Operating Officer and Director of North Central Life Insurance
Company. Mr. Sheffert serves on the Board of Directors of Telident, Inc.,
LifeRate Systems, Inc. and Fourth Shift, Inc. Mr. Sheffert also served as a
director of Medical Graphics from 1997 to December 1999.
GLEN TAYLOR is Chairman of the Board and Chief Executive Officer of
Taylor Corporation, which he founded in 1975. Taylor Corporation's businesses
include printing, direct mail marketing and electrical manufacturing. Mr. Taylor
also is the owner of the Minnesota Timberwolves, a National Basketball
Association franchise.
EXECUTIVE OFFICERS OF THE COMPANY
Set forth below is biographical and other information on the executive
officers of the Company. Mr. Jahnke's biographical information is set forth
above under "Information About Directors."
Name Age Title
---- --- -----
Richard E. Jahnke 51 President and Chief Executive Officer
Dale H. Johnson 54 Chief Financial Officer
Dale H. Johnson, CPA, was appointed Chief Financial Officer in
January 2000. Prior to joining the Company, Mr. Johnson served as the Chief
Financial Officer of Medical Graphics from March 1997 to December 1999. From
1995 to 1997, Mr. Johnson served as a consultant to various companies in
financial distress. From 1994 to 1995, he served as Chief Financial Officer
to Larson Companies, a privately-owned group of heavy truck dealerships. From
1991 to 1994, he served as Chief Financial Officer to National Marrow Donor
Program. From 1971 to 1986, he served as Chief Financial Officer for the
Pepsi subsidiary of MEI Corporation. In 1986, MEI was acquired by PepsiCo,
Inc., and thereafter Mr. Johnson served as Area Chief Financial Officer to
PepsiCo., Inc. During the previous five years, he worked as an accountant
with Arthur Andersen & Co. and served as a finance officer in the United
States Army. Mr. Johnson holds a B.A. in Economics and Accounting from St.
John's University and is a Certified Public Accountant.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.
To the Company's knowledge, based solely on a review of the copies of
such reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 1999, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than ten percent beneficial owners were complied with, except that each
of Messrs. Angeloni, Evans, Hickey and Taylor, as well as five former directors
of the Company, Messrs. Joyce, Kiser, McFarlin, Maurer and Wilson, were late in
reporting options granted in December, 1999.
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ITEM 11. EXECUTIVE COMPENSATION.
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION. The following table
sets forth the cash and non-cash compensation for the fiscal years ended
December 31, 1999, December 31, 1998 and July 31, 1997 and for the five month
Transition Period ended December 31, 1997 ("TP97") earned by, or awarded to Mr.
Hickey who served as the Chief Executive Officer of the Company in fiscal year
ended December 31, 1999 and the only other executive officers of the Company
whose total cash compensation exceed $100,000 ("Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation ------------
------------------- RESTRICTED SECURITIES
NAME AND PRINCIPAL STOCK UNDERLYING ALL OTHER
POSITION YEAR SALARY BONUS AWARD OPTIONS COMPENSATION(1)
-------- ---- ------ ----- ------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
James B. Hickey, Jr. (2) 1999 $ 260,000 - $ 9,000
President and Chief Executive 1998 105,000 - - 100,000 3,750
Officer 1997 - - - - -
William J. Rissmann(3) 1999 70,807 37,750 74,000(4)
Vice President of Product 1998 137,052 8,750 - - 6,000
Development TP97 46,162 - - - 2,500
1997 107,056 - - - -
Terrence W. Bunge(5) 1999 82,642 75,250 78,000(7)
Vice President of Interventional 1998 113,327 66,013 - - 6,000
Technology TP97 - (6) - - - 2,500
1997 - (6) - 3,333 - -
</TABLE>
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(1) Except as otherwise noted, the amounts represent an automobile allowance
paid by the Company.
(2) Mr. Hickey joined the Company in July 1998 and served as Chief
Executive Officer until December 1999.
(3) Mr. Rissmann terminated his employment with the Company in January 1999.
(4) Represents $3,000 in automobile allowance and $71,000 as a severance
payment
(5) Mr. Bunge joined the Company in February 1997 and terminated his
employment with the Company in June 1999.
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(6) Mr. Bunge received a restricted stock award in 1997 in lieu of receiving
cash compensation.
(7) Represents an automobile allowance of $3,000 and a severance payment of
$75,000.
OPTION GRANTS AND EXERCISES
There were no options granted by the Company or exercised by the Named
Executive Officers in fiscal 1999.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
DECEMBER 31, 1999 DECEMBER 31, 1999(1)
------------------- ---------------------
Exercisable Unexercisable Exercisable Unexersiable
----------- ------------- ----------- ------------
<S> <C> <C> <C> <C>
James B. Hickey, Jr. 25,000 75,000 - -
William J. Rissmann -0- -0- - -
Terrence W. Bunge -0- -0- - -
</TABLE>
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(1) Value based on the difference between the fair market value of the
Common Stock on December 31, 1999 ($1.938) and the exercise price of
the options.
COMPENSATION OF DIRECTORS
Directors of the Company receive no cash compensation (except as
discussed below) for their services as members of the Board of Directors,
although their out-of-pocket expenses incurred on behalf of the Company are
reimbursed.
Pursuant to the Company's 1994 Non-Employee Director Plan ("Director
Plan"), non-employee directors of the Company automatically receive an annual
grant of shares of Common Stock equal to $24,000, as determined by the fair
market value of one share of Common Stock on the date of grant (a "Director
Stock Award"), and an annual grant of an option to purchase 3,000 shares of
Common Stock (a "Director Option") on the date of each Annual Meeting of
Shareholders upon their election or re-election, as the case may be, as a
non-employee director of the Company. On October 1, 1999 the Board of Directors
amended the Director Plan to (i) extend the term of the Director Plan by five
years to October 7, 2004 and (ii) increase the maximum number of shares to
Common Stock available for issuance under the Director Plan from 20,000 shares
to 250,000 shares. This amendment to the Director Plan was approved by
shareholders at the December 31, 1999 Annual Meeting of Shareholders.
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EMPLOYMENT AGREEMENTS
In December 1999 the Company entered into a written employment agreement
with Mr. Richard E. Jahnke under which Mr. Jahnke agreed to serve as President
and Chief Executive Officer of the Company. In exchange for his service, Mr.
Jahnke will receive a salary of $265,000, a cash bonus of up to 35% of his
annual salary based upon a bonus plan established by the Board of Directors, as
well as an automobile reimbursement of up to $600 per month. Mr. Jahnke was also
elected as a member of the Board of Directors in January 2000 and receives no
additional compensation for this service. The agreement will terminate upon 30
days written notice by either party, upon notice by the Company of termination
"for cause" or upon the event of Mr. Jahnke's death or disability. The agreement
also contains a non-compete provision for one year after the termination of Mr.
Jahnke's employment.
As an inducement to enter into the employment agreement, Mr. Jahnke
received a restricted stock grant for 20,000 shares of the Company's common
stock under the Company's 1993 Stock Incentive Plan. Mr. Jahnke also received a
grant of options to purchase the Company's common stock in a total amount of
180,000 shares. These options expire 10 years from the date of issuance and
vesting is accelerated upon a "change in control" as defined in the Company's
stock option agreements. Options to purchase 50,000 shares vested on December
21, 1999. Options to purchase 25,000 will vest on each of the first and second
anniversary dates of Mr. Jahnke's employment. Options to purchase the remaining
80,000 shares will vest according to a performance schedule established by the
Company's Board of Directors.
ITEM 12. SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT.
The following table sets forth information as of April 15, 2000
concerning the beneficial ownership of the common stock of the Company by (i)
the only shareholders known by the Company to own more than five percent of
the common stock of the Company, (ii) each director of the Company, (iii)
each Named Executive Officer listed in the Summary Compensation Table and
each current executive officer, and (iv) all executive officers and directors
of the Company as a group.
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<TABLE>
<CAPTION>
SHARES
SHARES OF ACQUIRABLE
NAME AND ADDRESS COMMON WITHIN
OF BENEFICIAL OWNER STOCK (1) 60 DAYS TOTAL PERCENTAGE
- ------------------- ------------ ------- ----- ----------
<S> <C> <C> <C> <C>
Deephaven Market Neutral Trading, Ltd. (2)
1712 Hopkins Crossroads
Minnetonka, Minnesota 55305 294,796 0 294,796 8.0%
Arnold A. Angeloni 17,250 1,050 18,300 *
Dennis E. Evans (3) 54,353 1,050(4) 55,403 1.6%
James B. Hickey, Jr. 5,677 25,000 30,677 *
Richard E. Jahnke 200 70,000 70,200 2.0%
Dale Johnson 0 3,000 3,000 *
John C. Penn 0 0 0 *
Mark W. Sheffert 0 0 0 *
Glen Taylor 52,669 1,050 53,719 1.6%
William J. Rissman 0 0 0 *
Terrance W. Bunge (5) 6,023 0 6,023 *
All executive officers and directors as a group 428,468 101,150 529,618 15.2%
(10 persons)
</TABLE>
* Indicates ownership of less than one percent.
(1) Except as noted, all shares beneficially owned by each person as of the
record date were owned of record, and each person had sole voting power
and sole investment power for all such shares beneficially held.
(2) Reflects $4,498,000 aggregate principal amount of 7 1/2% Senior
Convertible Notes due 2003 held by Deephaven Market Neutral Trading,
Ltd. into common stock of the Company at the conversion price of
$15.258.
(3) Includes 36,333 shares of common stock beneficially owned by Hanrow
Financial. Of this amount, Hanrow Capital Fund owns 3,000 shares;
Hanrow Capital Fund III owns 25,000 shares; and Hanrow Business
Finance, Inc. owns 4,167 shares of common stock. Mr. Evans, a
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director of the Company is the President and Chief Executive Officer
of Hanrow Financial. Hanrow Financial is the general partner of Hanrow
Capital Fund and Hanrow Capital Fund III and affiliated with Hanrow
Business Finance, Inc.
(4) The amount set forth as shares acquirable within 60 days relates only to
shares acquirable by Mr. Evans.
(5) Includes 2,500 shares held by an individual retirement account for the
benefit of Mr. Bunge.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
In January 1999, the Company entered into financing agreements with
Norwest Business Credit, Inc. (the "Bank") in which the Bank made two term loans
to the Company in the amount of $4,000,000 and $2,000,000. The loan in the
amount of $4,000,000 was guaranteed by Glen Taylor, a director of the Company,
and the $2,000,000 loan was guaranteed by a private investor not affiliated with
the Company. These term loans were repaid by the Company in May 1999. As a
condition to receiving the loans, Mr. Taylor and the private investor were
required to deposit $4,000,000 and $2,000,000, respectively, into accounts under
the Bank's control earning interest at approximately 4.95% per annum. Upon
deposit, the individuals guaranteeing these loans received a one-time commitment
fee equal to 2% of the respective loan amount and a guarantee fee equal to an
annualized rate of 5.05%. These transactions resulted in total annualized rates
of return to Mr. Taylor and the private investor of approximately 12%. Mr.
Taylor received fees totaling $148,000 from the Company for his agreement to
guaranty the $4,000,000 loan.
On March 12, 1999, the Company received an equity investment of
$10,000,000 from the Company's strategic partner, Sanofi-Synthelabo, as a result
of the Company receiving premarket approval ("PMA") for its 2020 ICD and lead
systems. This payment was made in accordance with and pursuant to the Investment
Agreement. As a result of the equity investment, Sanofi-Synthelabo received
warrants to purchase 909,017 and 540,541 shares of the Company's Common Stock at
exercise prices of $0.10 and $11.10 per share, respectively. As a subsequent
event, Sanofi-Synthelabo surrendered 745,994 shares of the Company's common
stock and warrants to purchase an additional 1,897,186 shares as part of the
Asset Purchase Agreement of March 24, 2000 with ELA Medical and
Sanofi-Synthelabo.
On March 26, 1999 Manchester Companies, Inc., the parent company of
Manchester Financial Group, Inc., of which Mark Sheffert, a director of the
Company, is the sole shareholder, entered into a 12- month agreement with the
Company pursuant to which Manchester agreed to provide certain services to
Angeion relative to Angeion's financing and capitalization, management of
expenses, restructuring of obligations, financial and account support and Nasdaq
listing. Manchester was paid $239,175 for these services in fiscal 1999.
Mr. Sheffert was not a director of Angeion at the time the transaction was
entered into and did not become a director until January 2000.
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SIGNATURES
Pursuant to the requirements of the Section 13 or or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this
Amendment No. 1 to the Report on Form 10-K to be signed on its behalf by the
undersigned.
ANGEION CORPORATION
April 28, 2000 By /s/ Richard E. Jahnke
-------------------------------------
Richard E. Jahnke
President and Chief Executive Officer
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