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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(AMENDMENT NO. 1)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended JULY 31, 2000
Commission File Number 0-5958
MERIDIAN MEDICAL TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 52-0898764
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(State of Incorporation) (I.R.S. Employer Identification No.)
10240 Old Columbia Road, Columbia Maryland 21046
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 410-309-6830
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EXPLANATORY NOTE:
This Amendment No. 1 to the Form 10-K of Meridian Medical
Technologies, Inc. (the "Company") for the fiscal year ended July 31, 2000 is
filed solely to add Part III of Form 10-K, which was omitted from the Form
10-K as filed on October 25, 2000 in reliance on General Instruction G(3)
thereto.
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PART III
ITEM 10 DIRECTORS AND EXECUTIVE OFFICERS OF THE
REGISTRANT
Information regarding executive officers was included in the Form 10-K
filed on October 25, 2000.
The Company's Board of Directors consists of five members and is
divided into three classes, as nearly equal in number as reasonably possible.
The following table sets forth certain information regarding the Board of
Directors. Unless otherwise indicated, each director held the position indicated
or another senior executive position with the same entity for the last five
years.
<TABLE>
<CAPTION>
DIRECTOR
NAME AND AGE PRINCIPAL OCCUPATION AND OTHER DIRECTORSHIPS SINCE
------------ -------------------------------------------- -----
<S> <C> <C>
CLASS I DIRECTOR WHOSE TERM
WILL EXPIRE FOLLOWING FISCAL
2000
E. Andrews Grinstead, III Chief Executive Officer, Hybridon, Inc. 1996
Age 53 (biotechnology); Director, Pharmos Corporation
(pharmaceutical company)
CLASS II DIRECTORS WHOSE
TERMS WILL EXPIRE FOLLOWING
FISCAL 2001
Bruce M. Dresner Vice President for Investments, Columbia University 1985
Age 52
David L. Lougee Managing Partner, Mirick, O'Connell, DeMallie & Lougee 1996
Age 60 (law firm); Director, Vialog Corporation
(teleconferencing service provider)
CLASS III DIRECTORS WHOSE
TERMS WILL EXPIRE FOLLOWING
FISCAL 2002
James H. Miller Chairman, President and Chief Executive Officer of the 1989
Age 62 Company
Robert G. Foster Chairman, President and Chief Executive Officer, 1996
Age 62 Commonwealth BioVentures, Inc. (venture capital firm)
</TABLE>
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors
and executive officers, and persons who beneficially own more than ten
percent of a registered class of the Company's equity securities, to file
with the SEC initial reports of ownership and reports of changes in ownership
of Common Stock of the Company. Executive officers, directors and greater
than ten percent stockholders are required by SEC regulations to furnish the
Company with copies of all Section 16(a) forms they file. To the Company's
knowledge, based solely upon a review of the copies of such reports furnished
to the Company and written representations that no other reports were
required during fiscal 2000, all Section 16(a) filing requirements applicable
to its officers, directors and greater than ten percent stockholders were
complied with.
ITEM 11 EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information for the three fiscal years
ended July 31, 2000 as to compensation paid for services rendered to the Company
by the President and Chief Executive Officer and the three other executive
officers of the Company who were employed by the Company as of July 31, 2000 and
whose total annual salary and bonus for fiscal 2000 exceeded $100,000 (the
"Named Executives").
<TABLE>
<CAPTION>
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ANNUAL COMPENSATION LONG-TERM
COMPENSATION AWARDS
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SECURITIES
UNDERLYING ALL OTHER COMPENSATION
NAME AND FISCAL SALARY BONUS OPTIONS/SARS ($)(2)
PRINCIPAL POSITION YEAR ($)(1) ($) (#)
<S> <C> <C> <C> <C> <C>
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James H. Miller 2000 375,000 210,000 60,000 37,294
Chairman, President and CEO 1999 365,384 - 25,000 29,483
1998 325,000 - 50,000 23,143
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Dennis P. O'Brien (3) 2000 151,462 79,900 45,000 9,390
Vice President - Finance 1999 63,269 - - 5,000
and Chief Financial Officer 1998 - - - -
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Peter A. Garbis 2000 134,800 44,800 20,000 12,369
Vice President 1999 128,654 - 19,600 5,693
1998 113,983 - 1,285 5,824
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Gerald L. Wannarka (4) 2000 157,577 56,400 25,000 11,039
Sr. Vice President 1999 147,154 - 22,900 11,434
1998 81,250 - 7,000 785
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</TABLE>
(1) Includes amounts deferred at the election of the Named
Executive under the Company's
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401(k) Plan.
(2) Includes Company matching contributions under the Company's
401(k) Plan in the following amounts for fiscal 2000: Mr.
Miller, $2,942; Mr. O'Brien, $1,695; Mr. Garbis, $4,849; and
Dr. Wannarka $3,272. The Company provides group accidental
death and disability and term life insurance to all its
employees who work more than 30 hours per week. The death and
disability benefit and life insurance benefit under the
Company's plan is up to 200% of the insured person's annual
compensation (as defined in the plan), except in the case of
certain employees, including the Named Executives, with
respect to whom benefits are up to 300% of the insured
person's annual income. Premiums paid attributable to such
benefits in fiscal 2000 were as follows: Mr. Miller, $23,582;
Mr. O'Brien, $1,696; Mr. Garbis $1,520; and Dr. Wannarka,
$1,767.
(3) Mr. O'Brien was named Vice President - Finance and Chief
Financial Officer as of March 8, 1999.
(4) Dr. Wannarka was hired as a Vice President as of December 15,
1997 and subsequently promoted to Senior Vice President as of
September 30, 1998.
STOCK OPTIONS
The following table sets forth further information regarding grants of
options to purchase Common Stock made by the Company during fiscal 2000 to the
Named Executives.
<TABLE>
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Option/SAR Grants In Last Fiscal Year
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Potential Realizable Value
at Assumed Annual Rates of
Stock Price Appreciation
for Option Term(1)
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Number of Percent of Total
Securities Options/SARs
Name Underlying Granted to
Options/SARs Employees in Exercise Price Expiration 5% ($) 10% ($)
Granted(2) Fiscal 2000 per Share Date
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<S> <C> <C> <C> <C> <C> <C>
James H. Miller 40,000 21.3% $5.625 09/28/2009 $141,501 $358,592
20,000 $8.625 06/07/2010 $108,484 $274,921
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Dennis P. O'Brien 25,000 16.0% $5.625 09/28/2009 $88,438 $224,120
20,000 $8.625 06/07/2010 $108,484 $274,921
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Peter A. Garbis 20,000 7.1% $5.625 09/28/2009 $70,751 $179,296
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Gerald L. Wannarka 25,000 8.9% $5.625 09/28/2009 $88,438 $224,120
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</TABLE>
(1) Disclosures of the 5% and 10% assumed annual compound rates of
stock appreciation are mandated by the rules of the SEC and do
not represent the Company's estimate or projection of future
Common Stock prices. The actual value realized may be greater
or less than the potential realizable value set forth in the
table.
(2) Consists of stock options granted pursuant to the 1986 Stock
Option Plan and the 1997 Long-Term Incentive Plan. Each option
granted vests in cumulative annual installments of 25%,
commencing one year from the date of grant and expires ten
years from the date of
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grant. The exercise price of each option granted is equal to
the last reported sale price on the date of grant.
The following table summarizes certain information regarding
outstanding options held by the Named Executives as of July 31, 2000. No stock
options were exercised by the Named Executives during fiscal 2000.
<TABLE>
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AGGREGATED OPTION/SAR EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR-END OPTION/SAR VALUES
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Number of Securities Value of Unexercised
Underlying Unexercised Options/SARS at In-the-Money
Fiscal Year End (#) Options/SARS at Fiscal Year End ($)(1)
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<S> <C> <C>
Name Exercisable/Unexercisable Exercisable/Unexercisable
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James H. Miller 106,250/113,750(2) $127,422/$444,453
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Dennis P. O'Brien 2,500/52,500 $16,094/$277,969
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Peter A. Garbis 9,543/35,343 $38,810/$204,597
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Gerald L. Wannarka 9,225/45,675 $38,489/$255,842
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</TABLE>
(1) Value is calculated as the difference between the fair market
value of a share of Common Stock on July 31, 2000 ($12.063 per
share) and the exercise price of the options.
(2) Excludes 148,512 shares underlying exercisable and
unexercisable options assumed by the Company in connection
with the 1996 merger. Such options are exercisable for $.005
per share.
EMPLOYMENT AND CHANGE OF CONTROL AGREEMENTS
The Company is party to an employment agreement (the "Employment
Agreement"), effective in fiscal 1997, with James H. Miller. Under the
Employment Agreement, the Company will employ Mr. Miller as President and
Chief Executive Officer. The Employment Agreement has an initial term of
three years, provides for a minimum base salary (currently $400,000) and
customary benefits, and has been extended annually to maintain a three year
term. The Company may terminate the Employment Agreement upon disability or
retirement or for "Cause" (as defined in the Employment Agreement). If the
Company terminates the Employment Agreement for any reason other than
disability, retirement or Cause, or Mr. Miller terminates the Employment
Agreement for "Good Reason," as defined in the Employment Agreement, Mr.
Miller will be entitled to receive a lump sum payment equal to 200% of his
base salary for the preceding 12 months and continued life, disability,
accident and health insurance coverage for up to 24 months. In addition, all
stock options previously awarded under the Company's stock option plans would
become immediately exercisable and any transfer restrictions on restricted
securities would lapse. The Employment Agreement further provides that any
benefits or payments pursuant to these provisions will be reduced to the
extent that such amounts received (together with any other amounts received
that must be included in such determination) would constitute an "excess
parachute payment" as defined in Section 280G of the Internal Revenue Code of
1986, as amended ("Code").
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The Company is party to change of control agreements (the "Change of
Control Agreements") with Peter Garbis, Robert Kilgore, Gerald Wannarka and
Dennis O'Brien (the "Executives"). These Change of Control Agreements each have
a term of three years, beginning in fiscal 1999 with respect to Messrs. Garbis,
Wannarka and O'Brien. The Change of Control Agreement with Mr. Kilgore also has
a term of three years, beginning in fiscal 2000. Under these Change of Control
Agreements, the Company will continue to pay the Executives their Base Salary
(as defined in the Change of Control Agreements) as well as continue life and
health insurance coverage for a period of 12 months following the occurrence of
both a Change of Control and a Termination Event (as such terms are defined in
the Change of Control Agreements). In addition, pursuant to certain of each
Executive's stock option agreements, certain stock options awarded under the
Company's stock option plans would become immediately exercisable following both
a Change of Control and termination of the Executive's employment by the Company
for any reason other than Cause or by the Executive for Good Reason (as such
terms are defined in the stock option agreements).
COMPENSATION OF DIRECTORS
Each of the Company's directors other than Mr. Miller received,
during fiscal 2000, a $10,000 retainer fee payable in quarterly installments,
$1,500 for each meeting of the Board personally attended (other than meetings
held by telephone conference as to which no fee is paid) and an automatic
grant on the date of each annual meeting of non-statutory stock options
covering 5,700 shares of Common Stock under the 1997 Long-Term Incentive
Plan. In addition, non-employee directors who have served for at least one
year and who will continue to serve as directors immediately following the
annual meeting receive on the date of each annual meeting automatic grants of
non-statutory stock options covering 1,300 shares of Common Stock under the
1986 Stock Option Plan (which continues in effect until the earlier of the
termination of the 1986 Stock Option Plan or the unavailability of shares of
Common Stock for grants thereunder). Options so granted have an exercise
price equal to the fair market value of the Common Stock on the date of
grant, become exercisable in 25 percent cumulative annual installments and
generally expire 10 years from the date of grant. If a director is removed
from office, all options granted to such director pursuant to the automatic
grants will expire immediately upon such removal. During fiscal 2000, Messrs.
Dresner, Foster, Grinstead and Lougee were each granted options covering
1,300 shares of Common Stock pursuant to the 1986 Stock Option Plan at an
exercise price of $6.063 per share. In addition, during fiscal 2000, Messrs.
Dresner, Foster, Grinstead and Lougee were each granted options covering
5,700 shares of Common Stock pursuant to the 1997 Long-Term Incentive Plan at
an exercise price of $6.063 per share. Mr. Grinstead has been on medical
leave from his principal employment at Hybridon, Inc. and from the Company's
Board. Mr. Grinstead has declined receipt of Board fees during the period of
his medical leave.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation and Stock Option Committee of the Board of Directors
is comprised of only non-employee directors of the Company. Messrs. Foster,
Grinstead and
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Lougee currently serve as members of the Committee. Mr. Lougee is the Managing
Partner of the law firm of Mirick, O'Connell, DeMallie & Lougee. From time to
time, attorneys with the firm provide legal services to the Company.
ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Set forth below is a table showing certain information with respect to
those persons known to the Company to be the beneficial owners of more than 5%
of the outstanding shares of Common Stock, the Named Executives, each director
of the Company and all executive officers and directors of the Company as a
group as of November 27, 2000.
<TABLE>
<CAPTION>
Number of Shares
Beneficially Owned
Beneficial Owner Directly or Indirectly(1)(2) Percent of Class(3)
---------------- ---------------------- ----------------
<S> <C> <C>
Commonwealth BioVentures Entities 406,447(4) 12.7%
4 Milk Street
Portland, ME 04101
Mylan Laboratories, Inc. 272,229(5)(6) 8.8%
P.O. Box 4310
781 Chestnut Ridge Road
Morgantown, West Virginia 26504
EM Industries, Incorporated 243,476(5)(7) 7.9%
7 Skyline Drive
Hawthorne, New York 10532
Munder Capital Management 190,100 6.3%
480 Pierce Street
Birmingham, Michigan 48009
Nomura Holding America Inc. 204,770(5)(8) 6.3%
2 World Financial Center, Building B
New York, New York 10281
Internationale Nederlanden 174,491(5)(9) 5.4%
(U.S.) Investment Corporation
135 East 57th Street
New York, New York 10022
Bruce M. Dresner 40,475 1.3%
Robert G. Foster(10) 54,285(11) 1.8%
Peter A. Garbis 10,763 *
E. Andrews Grinstead, III 26,475 *
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David L. Lougee 19,343 *
James H. Miller 291,680(12) 8.8%
Dennis P. O'Brien 9,050 *
Gerald L. Wannarka 12,450 *
All directors and executive officers as a 464,521 13.3%
group (8 persons)
</TABLE>
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* Less than 1%
(1) Unless otherwise indicated, includes shares held directly by
the individual as well as by such individual's spouse, shares
held in trust and in other forms of indirect ownership over
which shares the individual effectively exercises sole voting
and investment power and shares which the named individual has
a right to acquire within sixty days of November 27, 2000,
pursuant to the exercise of stock options or warrants.
(2) Includes the following number of shares of Common Stock
issuable upon exercise of stock options exercisable within 60
days of November 27, 2000: Mr. Dresner, 38,975; Mr. Foster,
18,975; Mr. Garbis, 10,763; Mr. Grinstead, 26,475; Mr. Lougee,
18,975; Mr. Miller, 281,012; Mr. O'Brien, 8,750; Dr. Wannarka,
12,450; and all directors and executive officers as a group,
416,375.
(3) Based upon 3,038,641 shares of Common Stock outstanding as of
the record date, plus shares of Common Stock issuable within
60 days of November 27, 2000 under option or warrant.
(4) Consists of shares and warrants owned by Commonwealth
BioVentures IV Limited Partnership (54,040 shares and warrants
to purchase 32,842 shares which may be exercised within 60
days) and Commonwealth BioVentures V Limited Partnership
(189,651 shares and warrants to purchase 129,914 shares which
may be exercised within 60 days) (collectively the "Funds").
Robert G. Foster is President of Commonwealth BioVentures,
Inc. ("CBI"), which is the general partner of BioVentures
Limited Partnership ("BPLP"), which, in turn, is the general
partner of each of the Funds. These numbers exclude certain
shares and warrants held by Mr. Foster, held jointly by Mr.
Foster and his spouse or children, and held by Mr. Foster in a
profit sharing plan with CBI. See footnotes 10 and 11.
(5) The information set forth in the table above is derived solely
from a Schedule 13D or 13G or the most recent amendment
thereof filed with the Commission.
(6) Includes 43,556 shares of Common Stock subject to presently
exercisable warrants.
(7) Includes 29,038 shares of Common Stock subject to presently
exercisable warrants.
(8) Includes 204,770 shares of Common Stock subject to presently
exercisable warrants.
(9) Includes warrants to purchase Company Common Stock exercisable
for 174,491 shares of non-voting Common Stock, convertible, on
a one-for-one basis, into shares of voting Common Stock.
(10) Mr. Foster, a director of the Company, is the President of
CBI, which is the general partner of BPLP, which, in turn, is
the general partner of each of the Funds. Mr. Foster disclaims
beneficial ownership of all shares held by such entities. See
footnote 4.
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(11) Includes 13,619 of Common Stock held jointly by Mr. Foster
with his wife or children, 2,900 shares Mr. Foster disclaims,
18,975 shares subject to options exercisable within 60 days
and 18,791 shares subject to warrants exercisable within 60
days.
(12) Includes 6,726 shares of Common Stock subject to presently
exercisable warrants and 3,942 shares of Common Stock, but
excludes 760 shares of Common Stock held by Mr. Miller's
children and grandchildren. Mr. Miller disclaims beneficial
ownership of the shares of Common Stock held by his children
and grandchildren.
ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company is party to a loan agreement providing for a term loan and
a revolving credit facility with Internationale Nederlanden (U.S.) Capital
Corporation ("ING"), which is an affiliate of Internationale Nederlanden (U.S.)
Investment Corporation, which in turn is the beneficial owner of in excess of 5%
of the outstanding Common Stock representing warrants received by ING in
financing transactions with the Company. See "Security Ownership of Certain
Beneficial Owners and Management." The term loan was in an aggregate principal
amount of $3.75 million at July 31, 2000, and matures on March 31, 2003. The
term loan bears interest at a rate of either the Eurodollar loan rate plus 3.5%;
or the greater of the prime rate plus 1.5% (11.0% at July 31, 2000) or the
federal funds rate plus 2.0%. The Company's line of credit with ING was
increased in fiscal 1999 in order to permit the Company to borrow up to a
maximum of $8.5 million and bears interest at either the Eurodollar rate plus
3.25%; or the greater of the prime rate plus 1.25% (10.75% at July 31, 2000) or
the federal funds rate plus 1.75%. On October 31, 2000, the Company's line of
credit reverted back to a maximum of $6.5 million.
Nomura Holding America Inc. ("Nomura") owns $15 million aggregate
principal amount of senior subordinated notes issued by the Company. The notes
mature on April 30, 2005 and bear 12% interest, payable quarterly in arrears. In
connection with the issuance of the notes, Nomura received warrants to purchase
in excess of 5% of the Company's outstanding Common Stock at an exercise price
of $11.988 per share. See "Security Ownership of Certain Beneficial Owners and
Management." Since their issuance in April 1998, the warrants have been adjusted
to reduce the exercise price to $4.625 per share.
Dey Laboratories, an affiliate of EM Industries, Inc. ("EM"), a
beneficial owner of in excess of 5% of the outstanding Common Stock, is the
exclusive distributor of the Company's EpiPen-Registered Trademark- line of
auto-injectors. The Company's contract with EM extends until the year 2010,
so long as certain minimum quantity requirements are met, and generated
revenues of approximately $23.9 million to the Company in fiscal 2000. In
January 1996, a predecessor to Dey Laboratories provided a
non-interest-bearing loan to the Company in the amount of $375,000. The loan
was repaid in full during fiscal 2000.
The Company is party to a development, manufacturing and supply
agreement with Mylan Laboratories, Inc. ("Mylan"), a beneficial owner of in
excess of 5% of the outstanding Common Stock. The Company supplies vials and
pre-filled syringes containing certain drug products to be marketed by Mylan.
The agreement generated
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revenue of approximately $637,000 in fiscal 2000, which consisted of a $325,000
license fee and $312,000 of product sales. The contract extends until January 1,
2010.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this amendment to be signed on its
behalf by the undersigned, thereunto duly authorized.
MERIDIAN MEDICAL TECHNOLOGIES, INC.
By: /s/ Dennis P. O'Brien
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Dennis P. O'Brien,
Vice President - Finance
and Chief Financial Officer
Date: November 27, 2000
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