SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------------
FORM 10-K/A #1
AMENDMENT TO
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended: September 30, 1995 Commission File
Number: 0-18671
NUTRAMAX PRODUCTS, INC.
(Exact name of registrant as specified in its charter)
Delaware 061200464
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9 Blackburn Drive, Gloucester, Massachusetts 01930
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (508) 283-1800
PORTIONS AMENDED
----------------
Part III of the Company's Annual Report on Form 10-K is amended by the inclusion
of the information set forth on the following pages.
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant.
Name Age Position
- ---- --- --------
Bernard J. Korman 64 Chairman of the Board of Directors
Donald E. Lepone 51 President, Chief Executive Officer and Director
Donald M. Gleklen 59 Director
Frederick W. McCarthy 54 Director
Dennis M. Newnham 55 Director
Michael F. Sandler 50 Director
Robert F. Burns 47 Vice President, Chief Financial Officer
and Treasurer
Gary A. LeDuc 41 Vice President - Materials Management
John J. Manheimer 48 Vice President - Sales
James W. McGrath, Jr. 51 Vice President - Regulatory Affairs and
Technical Services
Richard C. Zakin 38 Vice President - Marketing
Michael C. Bill 42 Vice President - Operations, Optopics
Laboratories
Mr. Korman has been a Director and Chairman of the Board of the Company
since August 1993. Mr. Korman served as President and Chief Executive Officer
from 1980 to October 1995 and a Director from 1980 to January 1996 of MEDIQ
Incorporated ("MEDIQ") (healthcare services). He is also Chairman of the Board
of Directors of PCI Services, Inc. (pharmaceutical packaging services). Mr.
Korman is a Director of Mental Health Management, Inc. (behavioral health
management services), The New America High Income Fund (financial services), The
Pep Boys, Inc. (automotive supplies), Today's Man, Inc. (retail men's clothing
2
<PAGE>
sales), Omega Healthcare Investors, Inc. (real estate investment trust) and
InnoServ Technologies, Inc. (medical equipment support services).
Mr. Lepone has been President, Chief Executive Officer and a Director of
the Company since its inception.
Mr. Gleklen has been a Director of the Company since 1990. He has been
President of Jocard Financial Services, Inc. (financial consulting services)
since September 1994. Mr. Gleklen served as Senior Vice President - Corporate
Development of MEDIQ from 1985 to March 1994. Mr. Gleklen served as Managing
Partner of Brobyn Capital Partners (venture capital) from March 1994 to
September 1994. Mr. Gleklen also serves as a director of Gandalf Technologies,
Inc. (telecommunications technology) and New West Eyeworks, Inc. (retail eyewear
stores).
Mr. McCarthy has been a Director of the Company since 1991. He has served
as Chairman of Triumph Corporate Finance Group, Inc. and Triumph Capital Group
(investment management) since 1990. Mr. McCarthy is also a director of The
Fairchild Corporation (aerospace and industrial products) RC/Arby's Corporation
(soft drink/fast food businesses) and Seminole Kraft Corporation (paper
products). Mr. McCarthy served as a managing director and a member of the Board
of Directors of Drexel Burnham Lambert Incorporated (investment banking) from
1974 to January 1990.
Mr. Newnham has been a Director of the Company since 1987. Mr. Newnham is
the Chairman, President and Chief Executive Officer of Adirondack Beverages. Mr.
Newnham has been a venture capitalist consultant since March 1994. Mr. Newnham
served as President and Chief Executive Officer of Lea & Perrins, Inc.
(manufacturer of condiments) from 1983 to March 1994. Mr. Newnham is also a
director of United Water Resources (a holding company for water related
businesses).
Mr. Sandler, a certified public accountant, has been a Director of the
Company since July 1990, and was Chief Financial Officer and Treasurer of the
Company from July 1990 to August 1994. He has been Senior Vice President-Finance
and Chief Financial Officer since November 1988, Treasurer since 1991, and a
Director since November 1994, of MEDIQ. He has also served as Vice President and
Chief Financial Officer of PCI Services, Inc. since September 1991. He has
served as Vice President of PRN Holdings, Inc. ("PRN"), a wholly-owned
subsidiary of MEDIQ, since May 1992, and also served as Chief Financial Officer
of PRN from January 1989 to September 1992. Mr. Sandler also serves as a
director of Mental Health Management, Inc. and InnoServ Technologies, Inc.
Mr. Burns, a certified public accountant, has been Vice President, Chief
Financial Officer and Treasurer of the Company since August 1994. From 1984 to
August 1994, Mr. Burns served as Vice President - Finance for Tetley, Inc. (tea
and coffee manufacturer), a subsidiary of Allied-Lyons PLC.
3
<PAGE>
Mr. LeDuc has been Vice President - Materials Management of the Company
since May 1991. He served as Vice President - Shareholder Relations of the
Company from July 1990 to May 1991.
Mr. Manheimer has been Vice President - Sales of the Company since 1990. He
was formerly Executive Vice President - Sales of Mercury Foam Corp.
(manufacturer of health and beauty aids) from 1983 to 1990.
Mr. McGrath has been Vice President - Regulatory Affairs and Technical
Services of the Company since August 1994, and was Vice President - Operations
of the Company from July 1993 to August 1994. He served as Director of Quality
Assurance and Quality Control of the Company from September 1992 to June 1993.
Mr. McGrath served as Director of Quality Assurance of Circa Pharmaceutical Co.,
Inc. (pharmaceutical manufacturer) from May 1991 to July 1992. He also served as
Vice President - Technical Services for Nice-Pak Products (pharmaceutical,
device and consumer products manufacturer) from March 1990 to May 1991. He also
served as President and General Manager of NASKA Pharmacal Co., Inc.
(pharmaceutical manufacturer), a division of Rugby/Darby Group Companies, Inc.,
from March 1985 to March 1990.
Mr. Zakin has been Vice President - Marketing of the Company since June
1993. He served as General Manager of the Company from September 1992 to June
1993 and Vice President - Marketing of the Company from July 1990 to September
1992. Mr. Zakin was formerly a consultant to the Company from 1988 to 1990.
Mr. Bill has been Vice President - Operations of Optopics Laboratories
Division of the Company since June 1993. Mr. Bill was the Facilities Manager of
NASKA Pharmacal Co., Inc. (pharmaceutical manufacturer), a division of
Rugby/Darby Group Companies, Inc. from March 1989 to May 1993. Mr. Bill
previously held various production and plant operations management positions for
Lederle Laboratories (pharmaceutical manufacturer), a Division of American
Cynamid.
4
<PAGE>
Other Key Employees
In addition to the directors and executive officers listed above, the
following person is also expected to make significant contributions to the
business of the Company:
<TABLE>
<CAPTION>
Name and Age Principal Occupation or Employment during the Last five Years
- ------------ -------------------------------------------------------------
<S> <C>
Joseph F. Callaghan President and Chief Operating Officer, Powers Pharmaceutical
53 Corporation (a subsidiary of the Company)
</TABLE>
Item 11. Executive Compensation.
Summary Compensation Table
The following table sets forth certain information regarding compensation
paid during each of the last three fiscal years to the Company's Chief Executive
Officer and each of the Company's other executive officers whose annual
compensation for fiscal 1995 exceeded $100,000.
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
------------------- ------------
Name and Stock All Other
Principal Position Year Salary Bonus Options(#) Compensation
- ------------------ ---- ------ ----- ---------- ------------
<S> <C> <C> <C> <C> <C>
Donald E. Lepone(1) 1995 $290,000 $100,000 -- $ 7,000(3)
President and Chief 1994 265,000 309,000(2) 500,000 11,000
Executive Officer 1993 220,000 -- -- 10,000
Richard C. Zakin(1) 1995 $157,000 $ 39,000 20,000 $ 6,000(4)
Vice President - Marketing 1994 143,000 205,000(2) -- 10,000
1993 110,000 -- 20,000 9,000
John J. Manheimer(5) 1995 $143,000 $ 25,000 $20,000 $ 6,000(6)
Vice President - Sales 1994 140,000 20,000 -- 8,000
1993 123,000 25,000 20,000 6,000
Robert F. Burns 1995 $127,000 $ 14,000 10,000 $ 2,000(7)
Vice President, Chief 1994 10,000 -- -- --
Financial Officer and
Treasurer
James W. McGrath 1995 $106,000 $ 10,000 $ 10,000 $ 5,000(8)
Vice President - Operations 1994 103,000 10,000 -- 6,000
1993 78,000 -- 5,000 --
</TABLE>
5
<PAGE>
- ----------------
(1) The Company has employment agreements with Messrs. Lepone and Zakin,
expiring in 1998 and 1997, respectively, pursuant to which they are
currently entitled to receive annual base salaries of $309,750 and $160,000,
respectively, and may also receive incentive compensation, depending upon
their and the Company's performance.
(2) Includes the value of stock awarded as bonus compensation pursuant to
employment agreements with the Company in the amounts of $143,000 and
$86,000 for Messrs. Lepone and Zakin, respectively.
(3) Includes approximately $4,900 representing the Company's contributions to
the Employees' Saving Plan account of Mr. Lepone, $800 of automobile
expenses and $1,400 of group life expenses.
(4) Includes approximately $4,700 representing the Company's contributions to
the Employees' Saving Plan account of Mr. Zakin, $500 of automobile
expenses and $300 of group life expenses.
(5) The Company has an employment arrangement with Mr. Manheimer, pursuant to
which he is currently entitled to receive an annual base salary of $145,000,
and may also receive incentive compensation, depending upon the Company's
performance.
(6) Includes approximately $4,900 representing the Company's contributions to
the Employees' Savings Plan account of Mr. Manheimer, $300 of automobile
expenses and $800 of group life expenses.
(7) Includes approximately $100 representing the Company's contributions to the
Employees' Saving Plan account of Mr. Burns, $100 of group life expenses and
$1,600 of moving expenses.
(8) Includes approximately $3,600 representing the Company's contributions to
the Employees' Saving Plan account of Mr. McGrath and $900 of group life
expenses.
Stock Options
The following table summarizes stock options granted during fiscal 1995 to
the executive officers listed in the Summary Compensation Table. No options were
granted to Mr. Lepone in fiscal 1995.
6
<PAGE>
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Potential
Realizable Value
at Assumed
Annual Rates of
Stock Price
Appreciation for
Individual Grants Option Term(1)
- ----------------------------------------------------------------------------------------------- --------------------
Percent of Total
Options
Granted to Exercise or
Options Employees in Base Price Expiration
Name Granted(#)(2) Fiscal Year ($/Sh) Date 5% ($) 10% ($)
- --------- -------------- ----------- --------- ---------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Mr. Lepone -- -- -- -- -- --
Mr. Zakin 20,000 33.3% 9.375 12/18/99 $52,000 $114,000
Mr. Manheimer 20,000 33.3% 9.375 12/18/99 $52,000 $114,000
Mr. Burns 10,000 16.7% 9.6875 9/21/2000 $27,000 $ 59,000
Mr. McGrath 10,000 16.7% 9.50 10/31/99 $26,000 $ 58,000
</TABLE>
- ----------------
(1) The information in these columns illustrates the value that might be
realized upon exercise of the options assuming the specified compound rates
of appreciation of the Company's Common Stock over the term of the options.
The potential realizable value columns are based on the total amount of
options granted. However, the total amount may not become exercisable (see
Note 2). In addition, the amounts reflected do not take into account amounts
required to be paid for federal or state income taxes or option provisions
regarding termination of the option following termination of employment or
nontransferability requirements. These amounts were calculated based on
requirements of the Securities and Exchange Commission and do not
necessarily reflect the Company's estimate of future stock price growth.
(2) The options indicated become exercisable in 20% installments over a five
year period commencing on the grant date.
7
<PAGE>
The following table provides information relating to the value of
unexercised options held by the executive officers listed in the Summary
Compensation Table at the end of fiscal 1995. No options were exercised by the
executive officers included in the Summary Compensation Table in fiscal 1995.
Value of Unexercised Stock Options at Fiscal Year End
Total Number of Value of Unexercised
Unexercised In-The-Money Options
Options(#) at Year End(1)
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
Mr. Lepone 150,000 400,000 $200,000 --
Mr. Zakin 41,000 24,000 102,500 $10,000
Mr. Manheimer 31,000 24,000 62,500 10,000
Mr. McGrath 5,000 10,000 1,000 4,000
Mr. Burns 2,000 8,000 1,000 2,500
- ------------------
(1) Represents the difference between the exercise price of the options and the
closing price of the Company's Common Stock at September 29, 1995 (the last
trading day of the fiscal year).
Compensation of Directors
Directors who are employees of the Company receive no additional
compensation for their service as directors or as members of Committees of the
Board. Non-employee directors receive an annual director's fee of $10,000 for
their services in such capacities. In addition, each non-employee director
received in August 1991, options under the Company's 1988 Stock Option Plan to
acquire 25,000 shares of the Company's Common Stock at a price of $6.00 per
share, vesting in five equal annual installments.
8
<PAGE>
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth, as of January 1, 1996 the beneficial
ownership of shares of the Company's common stock, par value $.001 per share by
each of the directors of the Company, each executive officer named in the
Summary Compensation Table (included elsewhere herein) and by all directors and
officers of the Company as a group.
Percent
Number of Class
Name of Shares (1) Outstanding(2)
- ---- ------------- -------------
Bernard J. Korman 55,539(3) *
Donald E. Lepone 546,345(4) 6.8%
Michael F. Sandler(5) 22,880(6) *
Donald M. Gleklen 37,000(3) *
Frederick W. McCarthy 25,000(3) *
Dennis M. Newnham 27,000(3) *
Robert F. Burns 2,000(7) *
John J. Manheimer 35,589(8) *
James W. McGrath 7,259(9) *
Richard C. Zakin 99,247(10) 1.2%
All directors and officers as a group
(13 persons) 1,011,106(11) 11.4%
- ------------
* Less than one percent.
(1) Except as otherwise indicated below, all shares are beneficially owned, and
sole investment and voting power is held, by the person named.
(2) All percentages are rounded to the nearest tenth, and are based upon the
number of shares outstanding, including, as appropriate, the shares
referred to in the notes below.
(3) Includes options to acquire 25,000 shares of Common Stock.
(4) Includes options to acquire 150,000 shares of Common Stock.
(5) Mr. Sandler is an officer and director of MEDIQ. Any shares, the beneficial
ownership of which may be attributable to Mr. Sandler by virtue of his
relationships with MEDIQ, have not been included.
(6) Includes options to acquire 20,000 shares of Common Stock.
(7) Represents options to acquire shares of Common Stock.
(8) Includes options to acquire 35,000 shares of Common Stock.
(9) Includes options to acquire 7,000 shares of Common Stock.
(10) Includes options to acquire 45,000 shares of Common Stock.
(11) Includes options to acquire an aggregate of 380,000 shares of Common Stock
(including the options described above).
9
<PAGE>
MEDIQ Investment Services, Inc., a wholly-owned subsidiary of MEDIQ, is the
owner of 4,037,258 shares, or approximately 47%, of the outstanding Common
Stock. Bessie G. Rotko, Michael J. Rotko, Judith M. Shipon, Lionel Felzer and
Provident National Bank, as Trustees under an Agreement of Trust dated November
18, 1983, are the indirect beneficial owners of approximately 52% of MEDIQ's
outstanding voting power, and may therefore be deemed "controlling persons" of
MEDIQ. The address of the Trustees is c/o Lionel Felzer, MEDIQ Incorporated, One
MEDIQ Plaza, Pennsauken, New Jersey 08110. A portion of the shares of the
Company's Common Stock owned by MEDIQ is subject to exchange for outstanding
MEDIQ debentures and a portion is pledged by MEDIQ as collateral for certain
MEDIQ indebtedness. The Board of Directors of MEDIQ is currently in the process
of exploring alternative ways to maximize MEDIQ's shareholder value, which could
include the disposition of its holdings in the Company.
According to a filing with the Securities & Exchange Commission, Warburg,
Pincus Counsellors, Inc. is the beneficial owner of an aggregate of 596,100
shares, or approximately 7% of the outstanding shares of Common Stock. The
address of such stockholder is 466 Lexington Avenue, New York, New York 10017.
Except as set forth above, the Company is not aware of any person or entity
which is the beneficial owner of more than five percent of the Common Stock.
10
<PAGE>
Ownership of MEDIQ Voting Stock
Set forth below is information concerning the ownership of shares of MEDIQ
common stock, par value $1.00 per share ("MEDIQ Common Stock"), and MEDIQ series
A preferred stock, par value $.50 per share ("MEDIQ Preferred Stock"), for each
of the directors of the Company, each executive officer named in the Summary
Compensation Table (included elsewhere herein) and for all directors and
officers of the Company as a group.
<TABLE>
<CAPTION>
Common Stock Preferred Stock
------------ ---------------
Number Percent of Class Number Percent of Class
Name of Shares(1) Outstanding(2) of Shares(1) Outstanding(2)
- ---- ------------ -------------- ------------ --------------
<S> <C> <C> <C> <C>
Bernard J. Korman 2,052,411(3) 10.9% 801,030(4) 12.6%
Donald E. Lepone 18,327 * -- --
Michael F. Sandler 175,594(5) * -- --
Donald M. Gleklen 10,000 * -- --
Frederick W. McCarthy -- -- -- --
Dennis M. Newnham -- -- -- --
Robert F. Burns -- -- -- --
John J. Manheimer 500 * -- --
James W. McGrath, Jr -- -- -- --
Richard C. Zakin -- -- -- --
All directors and officers
as a group (13 persons) 2,393,724(6) 12.6% 801,030(4) 12.6%
</TABLE>
- ------------------
* Less than one percent.
(1) Except as otherwise indicated below, all shares are beneficially owned, and
sole investment and voting power is held, by the person named.
(2) All percentages are rounded to the nearest tenth, and are based upon the
number of shares outstanding, including, as appropriate, the shares referred
to in the notes below.
(3) Includes 899,681 shares which may be acquired upon exercise of stock
options, acquired upon conversion of convertible debentures and held in
retirement accounts; 21,204 shares held by Mr. Korman as custodian for his
children, and 36,800 shares owned by Mr. Korman's spouse. This amount
excludes the 801,030 shares of Preferred Stock owned by Mr. Korman which may
be converted into Common Stock on a one for one basis. The address of Mr.
Korman is 3001 Red Lion Road, Philadelphia, PA 19114.
(4) Includes 21,204 shares held by Mr. Korman as custodian for his children.
(5) Includes shares held in retirement accounts and shares which may be acquired
upon exercise of stock options.
(6) Includes shares held in retirement accounts, shares which may be acquired
upon exercise of stock options and the shares referred to in notes 3 and 4
above.
11
<PAGE>
Item 13. Certain Relationships and Related Transactions.
The Company and MEDIQ have a services agreement under which the Company
obtains certain legal, financial and management services from MEDIQ. For the
fiscal year ended September 30, 1995, the Company paid MEDIQ $100,000 pursuant
to such services agreement. The Company has agreed, pursuant to a tax
allocation/sharing agreement, to reimburse MEDIQ for any future tax assessment
against MEDIQ resulting from the Company's operations, and the Company will be
reimbursed by MEDIQ for any future tax benefit derived by MEDIQ resulting from
the Company's operations, for periods of time during which the Company was a
member of MEDIQ's consolidated group. The Company was included in MEDIQ's
consolidated group until MEDIQ's ownership was reduced from 81.7% to below 50%
in August 1991. The Company obtains certain of its insurance through MEDIQ's
insurance program. Insurance premiums under such programs were $409,000 for the
fiscal year ended September 30, 1995.
12
<PAGE>
SIGNATURES
Pursuant to requirements of Section 13 of 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.
Dated: January 26, 1996 NUTRAMAX PRODUCTS, INC.
By: \s\Robert F. Burns
------------------------------------------
Robert F. Burns
Vice President, Treasurer and
Chief Financial Officer
13
<PAGE>
SIGNATURES
Pursuant to requirements of Section 13 of 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.
Dated: NUTRAMAX PRODUCTS, INC.
By:
----------------------------------
Robert F. Burns
Vice President, Treasurer and
Chief Financial Officer
14
