SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A-2
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended April 30, 1996
Commission file number 0-11571
AEQUITRON MEDICAL, INC.
(Exact name of registrant as specified in its charter)
14800 Twenty-eighth Avenue North
Minneapolis, Minnesota 55447
(Address of principal executive offices)
Incorporated under the laws of IRS Identification Number
the State of Minnesota 41-1359703
(612) 557-9200
(Registrant's telephone number including area code)
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 per share
(Title of Class)
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 and (2) has been subject to such filing requirements for
the past 90 days. X Yes --- 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 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. [ x ]
The issuer's revenues for 1996, its most recent fiscal year, were $38,447,800.
The aggregate market value of the Company's common stock held by nonaffiliates
of the Company on July 23, 1996 computed at The Nasdaq National Market closing
price of $7.50 was $35,785,665.
The Company has one class of equity securities outstanding: common stock, $.01
par value per share. On July 19, 1996, there were 4,940,842 shares outstanding.
This Amendment No. 2 to the Form 10-K for the year ended April 30, 1996
is being filed to amend Item 11 of Part III to revise the "Option Grants During
1996 Fiscal Year," which Item 11 is amended and restated as follows:
ITEM 11. EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth all cash compensation paid or to be paid
by the Company, as well as certain other compensation paid or accrued, during
fiscal years 1994, 1995 and 1996 to the Chief Executive Officer and the four
highest paid executive officers whose total salary and bonus exceeded $100,000
based on salary and bonus earned during fiscal year 1996.
Long Term Compensation
--------------------------------
Awards Payouts
Name and Principal Fiscal --------------------------------
Position Year Annual Compensation Restricted Securities LTIP All Other
- ---------------------- ----- ------------------------------------ Stock Underlying Payouts Compen-
Salary ($) Bonus ($) Other ($) Awards ($) Options ($) sation($)
---------- --------- --------- ---------- ------- ----- ----------
James B. Hickey, Jr. 1996 $209,231 $ 57,538 $ -- $ -- 150,000 $ -- $17,000(1)
President and Chief 1995 187,615 100,356 -- -- 25,000 -- 18,428
Executive Officer 1994 150,385 275,000 23,996
Jeffrey A. Blair 1996 139,423 38,341 -- -- 45,000 -- 3,859(2)
Sr. Vice President 1995 127,523 47,821 -- -- 16,000 -- 3,388
Sales & Marketing 1994 76,154 9,375 20,000 -- 100,000 -- 30,728
William M. Milne 1996 115,322 31,159 -- -- 45,000 -- 3,670(2)
Chief Financial 1995 108,436 40,663 -- -- 10,000 -- 3,493
Officer 1994 102,887 -- -- -- 10,000 -- 9,980
Robert A. Samec 1996 100,786 26,677 -- -- 45,000 -- 3,238(2)
Vice President 1995 94,282 35,356 -- -- 12,000 -- 1,568
Regulatory Affairs 1994 88,800 -- -- -- 10,000 -- --
Edson R. Weeks, III 1996 97,769 26,887 -- -- 45,000 -- 3,991(2)
Vice President 1995 86,961 32,611 -- -- 12,000 -- 3,017
Operations 1994 79,700 -- -- -- 10,000 -- 2,949
- ------------------------------
(1) Represents forgiveness of a portion ($12,500) of a debt owed by Mr. Hickey
to the Company as a result of the Company's payment of the closing expenses
on his home, plus $4,500 paid by the Company pursuant to a Company match
under the 401(K) Plan.
(2) Represents the amount paid by the Company pursuant to a Company match under
the 401(k) Plan.
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Option Grants During 1996 Fiscal Year
The following table provides information regarding stock options
granted during fiscal 1996 to the named executive officers in the Summary
Compensation Table. The Company has not granted any stock appreciation rights.
Individual Grants
-----------------------------------------------
Potential Realizable
Value at Assumed
Number of % of Total Annual Rates of
Securities Options Stock Price
Underlying Granted to Exercise or Appreciation for
Options Employees in Base Price Expiration Option Term(1)
Name Granted Fiscal Year ($/Sh) Date 5% ($) 10% ($)
- --------------------- ------------ ------------------ ------------- ------------- ---------- ---------
James B. Hickey, Jr. 125,000(2) 25.10% $5.50 06/19/05 $432,365 $1,095,698
25,000(3) 5.02% $7.125 08/21/05 $112,022 $283,885
Jeffrey A. Blair 25,000(2) 5.02% $5.50 06/19/05 $86,472 $219,139
20,000(3) 4.02% $7.125 08/21/05 $89,616 $227,107
William M. Milne 25,000(2) 5.02% $5.50 06/19/05 $86,472 $219,139
20,000(3) 4.02% $7.125 08/21/05 $89,616 $227,107
Robert C. Samec 25,000(2) 5.02% $5.50 06/19/05 $86,472 $219,139
20,000(3) 4.02% $7.125 08/21/05 $89,616 $227,107
Edson R. Weeks, III 25,000(2) 5.02% $5.50 06/19/05 $86,472 $219,139
20,000(3) 4.02% $7.125 08/21/05 $89,616 $227,107
- ------------------
(1) The potential realizable value portion of the foregoing table
illustrates value that might be realized upon exercise of the options
immediately prior to the expiration of their term, assuming the
specified compounded rates of appreciation on the Company's Common
Stock over the term of the options. These numbers do not take into
account provisions of certain options providing for termination of the
option following termination of employment, nontransferability or
vesting over periods.
(2) Option becomes exercisable with respect to 20% of the shares covered
thereby on July 1 of each of 1998, 1999, 2000, 2001 and 2002. The
exercise price was equal to 100% of the fair market value on June 19,
1995, the date of grant.
(3) Option becomes exercisable with respect to 20% of the shares covered
thereby on August 21 of each of 1996, 1997, 1998, 1999 and 2000. The
exercise price was equal to 100% of the fair market value of the Common
Stock on August 21, 1995, the date of grant.
2
Aggregated Option Exercises During 1996 Fiscal Year and Fiscal Year-End Option
Values
The following table provides information related to options exercised by
the named executive officers during fiscal 1996 and the number and value of
options held at fiscal year-end. The Company does not have any outstanding stock
appreciation rights.
Value of Unexercised
Number of Securities In-the-Money Options at
Shares Underlying Unexercised April 30, 1996
Acquired on Value Options at April 30, 1996 Exercisable/
Name Exercise Realized(1) Exercisable/Unexercisable Unexercisable(2)
- --------------- ----------- ---------- ------------------------- -----------------------
James B. Hickey, Jr. -- -- 190,000 exercisable $873,750 exercisable
260,000 unexercisable $660,624 unexercisable
Jeffrey A. Blair 15,000 $45,938 58,200 exercisable $255,662 exercisable
87,800 unexercisable $213,900 unexercisable
William M. Milne 12,000 $40,500 23,625 exercisable $100,093 exercisable
60,875 unexercisable $100,406 unexercisable
Robert A. Samec -- -- 23,025 exercisable $97,668 exercisable
62,475 unexercisable $106,206 unexercisable
Edson R. Weeks, III 10,000 $33,750 23,025 exercisable $97,668 exercisable
62,475 unexercisable $106,206 unexercisable
(1) Value is calculated based on the amount, if any, by which the closing
price for the Common Stock as quoted on the Nasdaq National Market on
the date of exercise exceeds the option exercise price, multiplied by
the number of shares to which the exercise relates.
(2) Value is calculated on the basis of the difference between the option
exercise price and the closing sale price for the Company's Common
Stock at April 30, 1996 as quoted on the Nasdaq National Market,
multiplied by the number of shares of Common Stock underlying the
option.
Employment Contracts and Termination of Employment Arrangements
The Company has entered into an employment agreement with James B.
Hickey, Jr., which, in addition to the compensation shown in the Summary
Compensation Table, provides for compensation in the event Mr. Hickey's
employment with the Company is terminated under certain circumstances. Upon
termination of employment initiated by the Company's Board of Directors other
than for cause, Mr. Hickey will receive salary and medical insurance for twelve
(12) months. Upon termination for cause, payment of severance shall be at the
discretion of the Board.
The Company also entered into an employment agreement with Jeffrey A.
Blair. In addition to the compensation shown in the Summary Compensation Table,
Mr. Blair has the right to six months of severance pay if the Board terminates
his employment without cause.
As described in the Compensation and Stock Option Committee Report, the
Company entered into Change In Control Employment Agreements with each of James
B. Hickey, Jr., William M. Milne, Jeffrey A. Blair, Robert C. Samec, Edson R.
Weeks, III, Patricia A. Hamm and Earl H. Slee. Each such Agreement provides
that, following a change of control of the Company, if the executive officer is
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subsequently terminated without cause or voluntarily resigns within 12 months of
such change of control, he or she will receive a lump sum amount equal to two
times his or her current base compensation plus two times his or her target
bonus under the Company's Management Incentive Plan. In addition, all options
will become fully vested upon such termination or resignation and will be
exercisable for three months.
Compensation of Directors
Since 1987, the Company has paid each non-employee director an annual
fee of $12,000, payable in twelve monthly installments. In addition, since April
1995, such directors also receive $1,000 for each Board meeting attended in
person or $500 for attending a meeting by telephone conference. Nonemployee
directors also receive an automatic annual grant of a non-qualified stock option
pursuant to the 1988 Stock Option Plan on the date of the Company's annual
meeting each year. Each option granted enables that director to purchase 10,000
shares of the Company's Common Stock at an option exercise price equal to the
fair market value of such shares on the date the option is granted. Each option
granted to a director is exercisable beginning one year after the date of grant,
and will generally expire at the earlier of (i) twelve months after the optionee
ceases to be a director and (ii) five years after the date of grant.
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SIGNATURES
Pursuant to the requirements of Section 13 of the Securities Exchange
Act of 1934, the Company has caused this Report to be signed on its behalf by
the undersigned, thereunto duly authorized.
Dated: November 12, 1996
AEQUITRON MEDICAL, INC. "Company"
/s/ James B. Hickey, Jr.
James B. Hickey, Jr., President
and Chief Executive Officer
/s/ William M. Milne
William M. Milne, Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this amendment to Form 10-K for year ended April 30, 1996 has been signed below
by the following persons on behalf of the Company and in the capacities and on
the dates indicated.
Signature and Title Date
/s/ James B. Hickey, Jr. November 12, 1996
James B. Hickey, Jr., President,
Chief Executive Officer and
Director (Principal Executive Officer)
/s/ William M. Milne November 12, 1996
William M. Milne, Chief Financial Officer
(Principal Financial Officer)
* November 12, 1996
Lawrence A. Lehmkuhl, Director
* November 12, 1996
David B. Morse, Director
* November 12, 1996
Gerald E. Rhodes, Director
* November 12, 1996
Ervin F. Kamm, Jr., Director
* /s/ James B. Hickey, Jr. November 12, 1996
James B. Hickey, Jr., Attorney-in-Fact
pursuant to Power of Attorney
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