SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
-----------------
SCHEDULE 13D
(Rule 13d-1)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(Amendment No. ____________)1
PRODUCTIVITY TECHNOLOGIES CORP.
- -------------------------------------------------------------------------------
(Name of Issuer)
COMMON STOCK, PAR VALUE $.001
- -------------------------------------------------------------------------------
(Title Class of Securities)
743 088 10 6
- -------------------------------------------------------------------------------
(CUSIP Number)
Robert Bancroft, Esq.
Hicks, Schmidlin & Bancroft
2300 Austin Parkway - Suite 120
Flint, Michigan 48507
810-232-5038
- -------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
July 22, 1998
- -------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f) or 13d- 1(g), check the
following box |_|.
Note. Schedules filed in paper format shall include a signed original and
five copies of the schedule, including all exhibits. See Rule 13d-7 for other
parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 6 Pages)
- -------------------------
1 The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter disclosure
in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Page 1 of 6 Pages
<PAGE>
SCHEDULE 13D
CUSIP No. 743 088 10 6 Page 2 of 6 Pages
--------------------- ----- -----
- ------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Michael D. Austin
###-##-####
- ------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)|X|
(b)|_|
- ------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- ------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) |_|
N/A
- ------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
- ------------------------------------------------------------------------------
7 SOLE VOTING POWER
-----------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 236,900
OWNED BY -----------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON -----------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
236,900
- ------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
236,900
- ------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
|_|
- ------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.77%
- ------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE,
RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE
ATTESTATION.
Page 2 of 6 Pages
<PAGE>
SCHEDULE 13D
CUSIP No. 743 088 10 6 Page 3 of 6 Pages
----------------------- ----- -----
- ------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Michael D. Austin Revocable Trust
[FEIN Application Pending]
- ------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)|X|
(b)|_|
- ------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- ------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) |_|
N/A
- ------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
- ------------------------------------------------------------------------------
7 SOLE VOTING POWER
-----------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 236,900
OWNED BY -----------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON -----------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
236,900
- ------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
236,900
- ------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
|_|
- ------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.77%
- ------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
00
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE,
RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE
ATTESTATION.
Page 3 of 6 Pages
<PAGE>
Item 1. Security and Issuer.
The class of equity securities to which this statement relates is the common
stock, $.001 per value per share, of Productivity Technologies Corp. (the
"Issuer"), a Delaware corporation having principal offices at 509 Madison
Avenue, New York, New York 10022.
Item 2. Identity and Background.
(a) Name. Michael D. Austin and Michael D. Austin Revocable
Trust Dated July 30, 1998 ("Austin Trust"). Michael D. Austin is the sole
trustee and sole beneficiary of the Austin Trust.
(b) Address. 3246 Fieldstone
Flushing, Michigan 48433
(c) Michael D. Austin is the President of Atlas
Technologies, Inc.
Atlas Technologies, Inc.
201 S. Alloy
Fenton, MI 48430
(d) Mr. Austin has never been convicted in a criminal
proceeding.
(e) Mr. Austin has never been a party to any civil proceeding
of a judicial or administrative body of competent jurisdiction resulting in any
judgment, decree or final order enjoining him from engaging in future violations
of, or prohibiting or mandating activities subject to, Federal or State
securities laws or finding any violation with respect to such laws.
(f) United States of America.
Item 3. Source and Amount of Funds or other Consideration.
The Issuer has made a capital contribution of 150,000 shares
of common stock to Atlas Technologies, Inc., a wholly owned subsidiary of the
Issuer, which will then distribute these shares to the Austin Trust as
compensation for Mr. Austin's services. No portion of the purchase price is or
will be represented by borrowed funds.
Item 4. Purpose of Transaction.
(a) Michael Austin and the Austin Trust have, at this time, no intention of
purchasing additional securities of the Issuer. With respect to any
disposition of the securities being transferred, the stock is subject
to a three-year restriction appearing on the legend of the certificate,
and Mr. Austin and the Austin Trust have no legal right to convey the
stock prior to expiration of this three-year time period.
(b) Michael Austin is unaware of any extraordinary corporate transaction
involving the Issuer.
(c) Michael Austin is unaware of any sale or transfer of a material part of
the assets of the Issuer.
Page 4 of 6 Pages
<PAGE>
(d) Michael Austin is unaware of any change in the present Board of
Directors of the Issuer, other than a recommendation that Michael
Austin become a Board member.
(e) Michael Austin is unaware of any material change in the present
capitalization or dividend policy of the Issuer.
(f) Michael Austin is unaware of any material changes in the Issuer's
business or corporate structure other than the previously disclosed
fact that the Austin Trust is receiving 150,000 shares of common stock
and the Ronald M. Prime Revocable Trust Dated October 7, 1977, As
Amended is also receiving 150,000 shares of common stock.
(g) Michael Austin is unaware of any changes in the Issuer's charter,
bylaws or other similar instruments.
(h) Michael Austin is unaware of any event that would cause the Issuer to
be delisted from any national securities exchange or cease to be
authorized to be quoted in an inter-dealer quotation system of a
registered national securities association.
(i) Michael Austin is unaware of any facts that would cause the class of
equity securities of the Issuer to become eligible for termination
pursuant to Section 12(g)(4) of the Act.
(j) Michael Austin is unaware of any actions similar to any of those
enumerated above.
Item 5. Interest in Securities of the Issuer.
(a) Prior to the issuance of the 150,000 shares, Michael Austin owned
86,900 shares of common stock of the Issuer. After completion of the
issuance of the shares, all shares owned by Mr. Austin will have been
contributed to the Austin Trust and Mr. Austin and the Austin Trust
will beneficially own an aggregate 236,900 shares, or 9.77 percent, of
the outstanding shares of the Issuer's common stock.
(b) Mr. Austin and the Austin Trust have the shared power to vote or direct
the vote for all of the 236,900 shares, and shared power to dispose or
direct the disposition of the 236,900 shares, subject to the three-year
restriction on transfer set forth at Item 4(a).
(c) No transactions by Michael Austin or the Austin Trust in the class of
securities to which this statement relates have been effected during
the past 60 days other than the transaction described in this
statement.
Item 6. Contracts, Arrangements, Understandings or Relationships
With Respect to Securities of the Issuer.
By Agreement of July 22, 1998, the Issuer will distribute 150,000 shares of
stock to the Austin Trust. Pursuant to the Agreement, the stock cannot be
transferred for a period of three years, and thereafter, can only be transferred
in accordance with the registration requirements of the Securities Act of 1933,
as
Page 5 of 6 Pages
<PAGE>
amended, or an applicable exemption therefrom. In all other respects, there are
no transfers of any voting rights of the securities, finder's fees, joint
ventures, loan or option arrangements, puts or calls, guarantees of profits,
division of profits or loss, or the giving or withholding of proxies. None of
the securities are pledged or may be pledged or shall be subject to a
contingency or occurrence which could give another person voting power or
investment power.
The shares in question are, as disclosed above, held in the Austin
Trust. Michael Austin is the Trustee of the Austin Trust and is
beneficiary of the Trust. Mr. Austin has the right to revoke the
Trust at any time.
Item 7. Materials to be Filed as Exhibits.
Agreement of July 22, 1998 by and between Productivity Technologies
Corp., Ronald M. Prime, Michael D. Austin and Atlas Technologies,
Inc.
SIGNATURES
AFTER REASONABLE INQUIRY AND TO THE BEST OF THE KNOWLEDGE AND BELIEF OF THE
UNDERSIGNED, THE UNDERSIGNED CERTIFY THAT THE INFORMATION SET FORTH IN THIS
STATEMENT IS TRUE, COMPLETE AND CORRECT.
Dated: August 20, 1998
/s/ Michael D. Austin
------------------------
MICHAEL D. AUSTIN
MICHAEL D. AUSTIN REVOCABLE TRUST
By: /s/ Michael D. Austin
-------------------------------
Michael D. Austin, Trustee
Page 6 of 6 Pages
<PAGE>
AGREEMENT dated July 22, 1998, by and between PRODUCTIVITY
TECH NOLOGIES CORP. ("PTC"), a Delaware corporation, RONALD M. PRIME ("Prime"),
residing at 6438 Brewer, Flint, Michigan 48507, MICHAEL D. AUSTIN ("Austin"),
residing at 3246 Fieldstone Drive, Flushing, Michigan 48433, and ATLAS
TECHNOLOGIES, INC. ("Atlas"), a Michigan corporation.
WHEREAS, PTC, Prime and Austin, doing business as AMS Holding
Company, and Atlas are parties to a Merger Agreement dated December 18, 1995
(the "Merger Agreement"); and
WHEREAS, Prime and Austin are each parties to individual
Employment Agreements with Atlas dated May 23, 1996 (respectively, the "Prime
Agreement" and the "Austin Agreement" and, collectively, the "Employment
Agreements"); and
WHEREAS, the parties desire to settle certain issues arising
under the Merger Agreement and to amend the Employment Agreements, all as set
forth herein;
IT IS AGREED:
1. Defined Terms. Capitalized terms used herein and not
otherwise defined shall have the meanings assigned to them in the Merger
Agreement.
2. Termination of Merger Agreement Escrows. The Adjustment
Escrow Agreement and the Indemnity Escrow Agreement are hereby terminated and
all amounts in the escrow accounts established thereunder (including accrued
interest) shall be distributed and paid to AMS Holding Company. The parties
agree that there are no amounts due to PTC and Atlas pursuant to Sections 2.04
and 9.01 of the Merger Agreement.
3. Amendment of Employment Agreements. The Prime Agreement and
the Austin Agreement are hereby amended to read in the forms annexed hereto as
Exhibits A and B, respectively. Except as provided in Section 4 hereof, all
obligations of Atlas to make any further payments pursuant to Sections 2.6 and
2.7 of the Employment Agreements as in effect prior to the date hereof are
hereby terminated.
1
<PAGE>
4. Termination of Bonus Escrow Agreement. The Bonus Escrow
Agreement dated January 27, 1998 among Atlas, NBD Bank, as escrow agent, Prime
and Austin is hereby terminated. Funds in the escrow account established
thereunder (including accrued interest) shall be distributed and paid as
follows: $490,000 to Atlas, $560,000 to the escrow account referred to in
Section 5 below and the balance of approximately $267,000 to Prime and Austin in
equal shares. Payment of such amounts to Prime and Austin constitutes payment of
all obligations of Atlas pursuant to Section 2.6 of the Employment Agreements.
5. Tax Indemnity and Establishment of Tax Escrow. Prime and
Austin, jointly and severally, shall indemnify and hold harmless Atlas from and
against, and shall reimburse Atlas for, all amounts disallowed by the Internal
Revenue Service ("IRS") or additional taxes assessed by the IRS, and penalties
and interest with respect thereto, with respect to research and experimentation
credits claimed by Atlas for the fiscal years ended June 30, 1991 through June
30, 1995 in excess of an aggregate amount of disallowances, additional taxes,
penalties and interest (including any thereof arising from the utilization of
such credits in years subsequent to June 30, 1995) of $187,000; provided that
the total amount of payments by Prime and Austin shall not exceed $560,000 plus
an amount equal to all interest earned on the amounts deposited in escrow
pursuant to the Tax Indemnity Escrow Agreement being entered into by Prime,
Austin and Atlas and NBD Bank, as escrow agent, concurrently with the execution
of this Agreement. Concurrently with the execution of this Agreement and the Tax
Indemnity Escrow Agreement Prime and Austin shall deposit the sum of $560,000 in
the escrow account established pursuant to the Tax Indemnity Escrow Agreement as
security for their obligations pursuant to this Section 5. Prime and Austin
shall use their best efforts on behalf of Atlas to support Atlas's contest of
such claims by the IRS. All costs incurred in contesting the tax dispute,
including the cost of appeal before the IRS or subsequent costs incurred before
the United States Tax Court, will be paid by Atlas without any ensuing claim
against Prime and Austin for indemnification for any such costs incurred.
6. Stock Issuance. As further consideration for the covenants
of Prime and Austin hereunder, within ten business days after the date hereof,
PTC shall issue and deliver to each of The Ronald M. Prime Revocable Trust and
The Michael D. Austin Revocable Trust 150,000 shares of the common stock, par
value $.001 per share, of PTC. Prime and Austin agree that such shares shall not
be assignable or transferable or hypothecated by them or by such Trusts, by
operation of law or otherwise, for a period of three years from the date of this
Agreement and thereafter only in accordance with the registration requirements
2
<PAGE>
of the Securities Act of 1933, as amended, or an exemption therefrom and that
the certificate representing such shares shall bear an appropriate legend to
such effect.
7. Austin Directorship. PTC shall use its best efforts to
cause Austin to be nominated for election as a director of PTC during the term
of the Austin Agreement, commencing with the next meeting of stockholders of PTC
at which directors are elected.
8. Representations by Prime and Austin.
(a) Prime and Austin hereby, jointly and severally,
represent and warrant to the Board of Directors of PTC that, since July 1, 1997,
through the date of this Agreement, except as set forth in a letter dated June
19, 1998 from Austin to PTC, they have not received written or verbal notice not
disclosed by them in writing to the Board of Directors of PTC:
(i) from any person, including without
limitation governmental agencies and customers, suppliers and
employees (each a "Person") of Atlas making a claim (which
shall not include invoices and other similar commercial
correspondence rendered in the ordinary course of business) or
threatening or initiating legal or administrative proceedings,
including without limitation claims or legal proceedings
arising from commercial or employment relationships or
activities affecting the environment,
(ii) from any Person canceling a customer
purchase order or terminating a customer relationship or a
supplier relationship of Atlas or threatening to do any of the
foregoing, or
(iii) from any Person, including without
limitation federal, state and local taxing authorities,
advising of tax audits, tax deficiencies or other tax
liabilities of Atlas,
in each case which could reasonably be expected to have a material adverse
effect upon the business, condition (financial or otherwise) or prospects of
Atlas or its properties, and that they know of no facts or circumstances
3
<PAGE>
pertaining to the foregoing enumerated items which could reasonably be expected
to give rise to the giving of any such notice which have not been disclosed to
the Board of Directors of PTC.
(b) The representations and warranties contained
in this Section 8 are for the benefit of PTC and Atlas. In the event of a claim
of a breach of any of the foregoing representations and warranties arising from
the alleged receipt of verbal notice, PTC and Atlas shall have the burden of
establishing such breach by clear and convincing evidence.
(c) Notwithstanding anything to the contrary in
this Agreement, (x) Prime and Austin shall have no liability to PTC or Atlas as
a result of any breach of the representations and warranties in this Section 8
unless the loss, damage or expenses ("Damages") incurred by PTC and Atlas as a
result of such breach (exclusive of attorneys' fees and expenses) is at least
$150,000 but if the Damages incurred by PTC and Atlas with respect to any such
breach are at least $150,000 the liability of Prime and Austin with respect
thereto shall be for the entire amount of such Damages, including the first
$150,000 thereof, and the reasonable attorneys' fees and expenses of PTC and
Atlas, and (y) the maximum amount of liability of Prime and Austin with respect
to any breach of the representations and warranties in this Section shall be the
amount outstanding and unpaid pursuant to Article 2A of their respective
Employment Agreements ("Article 2A") at the time a claim is made and the maximum
amount of their liability for all such breaches shall not exceed $830,282.21
each less the sum of all payments made pursuant to Article 2A. Subsequent to any
date on which payment is specified to be made pursuant to Article 2A, Atlas and
PTC will have no further right to seek indemnification with respect to any
amount for which payment has become due under Article 2A unless written notice
of breach has been received by Prime and Austin on or prior to the date such
payment is due. Indemnification payments pursuant to this Section shall be
charged equally to Prime and Austin. All claims for breaches of this Section
shall be determined by arbitration in New York, New York in accordance with the
Commercial Arbitration Rules of the American Arbitration Association. A claim
shall be deemed made hereunder when a notice of arbitration is delivered to the
American Arbitration Association in accordance with such rules.
9. Notices to Escrow Agents. Concurrently with the execution
of this Agreement, the parties shall execute and deliver to the escrow agents
under the Adjustment Escrow Agreement, the Indemnity Escrow Agreement and the
Bonus Escrow Agreement notices in the forms annexed hereto as Exhibits D-1, D-2
4
<PAGE>
and D-3, respectively.
10. General Provisions.
(a) All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed to have been duly
given or made as of the date delivered or mailed if delivered personally or by
nationally recognized courier or mailed by registered mail (postage prepaid,
return receipt requested) or by telecopy to the Parties at the following
addresses (or at such other address for a party as shall be specified by like
notice, except that notices of changes of address shall be effective upon
receipt):
(i) If to PTC or Atlas:
c/o Samuel N. Seidman
Seidman & Co.
509 Madison Avenue
New York, New York 10022
Telecopier No.: 212-843-1484
with a copy to:
Graubard Mollen & Miller
600 Third Avenue
New York, New York 10016
Attention: Noah Scooler, Esq.
Telecopier No.: 212-818-8881
(ii) If to Prime and Austin:
Ronald M. Prime
6438 Brewer
Flint, Michigan 48507
Michael D. Austin
3246 Fieldstone Drive
Flushing, Michigan 48433
with a copy to:
5
<PAGE>
Hicks, Schmidlin & Bancroft
2300 Austin Parkway - Suite 120
Flint, Michigan 48507
Attention: Robert Bancroft, Esq.
Telecopier No.: 810-232-5538
(b) Amendment. This Agreement may not be amended
or modified except by an instrument in writing signed by the parties.
(c) Headings. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
(d) Severability. If any term or other provision
of this Agreement is invalid,
illegal or incapable of being enforced by any rule of law or public policy, all
other conditions and provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that
transactions contemplated hereby are fulfilled to the extent possible.
(e) Entire Agreement. This Agreement and the
Schedules and Exhibits hereto constitute the entire agreement and supersede all
prior agreements and undertakings, both written and oral, between the parties
with respect to the subject matter hereof and, except as otherwise expressly
provided herein, are not intended to confer upon any other person any rights or
remedies hereunder.
(f) Benefit. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of the parties.
(g) Governing Law. This Agreement shall be
governed by, and construed in accordance with, the law of the State of New York.
6
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has duly
executed this Agreement on the date first above written.
PRODUCTIVITY TECHNOLOGIES CORP.
By:----------------------------------------
Name:
Title:
-----------------------------------------
RONALD M. PRIME
-----------------------------------------
MICHAEL D. AUSTIN
ATLAS TECHNOLOGIES, INC.
By:-----------------------------------------
Name:
Title:
7
