☒ April 6, 2020 efficient than mailing to all stockholders. 6, 2020 21, 2020 6, 2020. 20, 2020. shares in person, (ii) advise our Secretary at our principal executive office in writing before the proxy holders vote your shares, (iii) deliver later dated and signed proxy instructions, or (iv) cast a new vote by the Internet or by telephone (not later than 11:59 p.m., Eastern Time, on May nominee or nominees proposed by the Board or the Board may reduce the number of directors to be elected. 2023 Board. 2021 firm. Mr. Athey was employed by T. Rowe Price Associates, Inc. from 1978 until January 2017, serving from 1981 until January 2017 as a Vice President, and from 1991 until 2014 as President and Portfolio Manager of T. Rowe Price 2022 SPAULDING leadership to the Company’s Board of Directors as well as work with our Chief Executive Officer, Mr. David Battat, in the evaluation, planning, and implementation of corporate strategy and in operational and financial matters. In addition to his participation in strategic and financial matters, Mr. David Battat focuses on operational matters, including the day-to-day management of our business. 2019. Charter to the Board of Directors. Our Board 2019. Board. the proposed transaction. our Board. non-employee director is then serving as a member of our 2019: Stock Awards ($)(2) for Mr. Strickland, the Compensation Committee takes into account the recommendations of Messrs. Emile Battat and David Battat. Our Compensation Committee incentive bonus was $800,000, which was approximately 11% less than his bonus for 2018, and Mr. Strickland’s cash incentive bonus was 2018. 2019. a reduction of the Company’s matching contribution that would have been made in our 401(k) Plan, with the make-up contribution to be in an amount equal to the amount by which our matching contribution to our 401(k) Plan is reduced as a result of the deferral election made under the NQDC Plan. Base salary and bonus compensation are eligible for deferral under the NQDC Plan, and a participant may defer not less than 10% and not more than 90% of his or her base salary and bonus compensation. Each year our Compensation Committee selects the key management or highly compensated employees who are eligible to participate in the NQDC Plan, and each of those employees makes an election whether or not to participate in the NQDC Plan and at what level he or she wishes to defer compensation. Participants may also elect how their deferred funds are deemed to be invested among the investment options designated by the Compensation Committee, which are generally the same as those available under the 401(k) Plan, as well as the Company’s common stock. In addition, participating employees choose the schedule on which these funds are to be distributed to them or their beneficiaries upon retirement, death, or certain other events. Amounts deferred or credited under the NQDC Plan are credited with notional investment earnings based on participant investment elections made from among the investment options available under the NQDC Plan. No amounts are credited with above-market earnings. Stock Ownership Guidelines for Officers this proxy statement. Compensation Committee Report Name and Principal Non-Equity Incentive Plan Compensation ($)(2) All Other Compensation ($) Emile A Battat Chairman of the Board David A. Battat President and Chief Executive Officer Jeffery Strickland Vice President and Chief Financial Officer, Secretary and Treasurer 2019: Number of Securities Underlying Unexercised Options Exercisable (#) Number of Securities Underlying Unexercised Options Unexercisable (#) Option Exercise Price ($) Option Expiration Date base salary and bonus compensation. Participants elect how their deferred funds are deemed to be invested among the investment options designated by the Compensation Committee, which are generally the same as those available under the 401(k) Plan, as well as the Company’s common stock. In addition, participating employees choose the schedule on which these funds are to be distributed to them or their beneficiaries upon retirement, death, or certain other events. Amounts deferred or credited under the NQDC Plan are credited with notional investment earnings based on participant investment elections made from among the investment options available under the NQDC Plan. No amounts are credited with above-market earnings. The NQDC Plan is unfunded. Participants have an unsecured contractual commitment from the Company to pay the amounts due under the NQDC Plan from the general assets of the Company. Potential Termination and Change in Control Payments cause, and if Mr. Strickland’s employment termination is due to his death or disability the RSUs awarded to him in May 2018 will vest and convert to common stock on the termination date. Change in Control without Termination of Employment Type of Payment or Benefit Termination for Just Cause or Without Good Reason ($) 2019, excluding amounts payable under our 401(k) Plan to each executive officer: 2020. 2018. $3,000. There were no fees billed by Grant Thornton LLP for the year ended December 31, above. 2019. to be held in 2021. THE BOARD OF DIRECTORS Number of Shares Beneficially Owned(1) Percent of Class(1) and has sole power to dispose or direct the disposition of 146,392 shares of our common stock and that T. Rowe Price Small-Cap Value Fund, Inc. has sole power to vote or direct the vote of 96,423 shares of our common stock. T. Rowe Price Associates, Inc. has expressly denied beneficial ownership of all such shares. The address of T. Rowe Price Associates, Inc. and T. Rowe Price Small Cap-Value Fund, Inc.is 100 East Pratt Street, Baltimore, Maryland 21202. 7, 2020. COST AND METHOD OF SOLICITATION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Exchange Act of 1934 (Amendment No. )☑☐Preliminary Proxy Statement☐Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))☑Definitive Proxy Statement☐Definitive Additional Materials☐Soliciting Material under §240.14a-12Atrion Corporation(Name of Registrant as Specified In Its Charter)(Name of Person(s) Filing Proxy Statement, if other than the Registrant)Payment of Filing Fee (Check the appropriate box):☑No fee required.☐Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.(1)Title of each class of securities to which transaction applies:(2)Aggregate number of securities to which transaction applies:(3)Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):(4)Proposed maximum aggregate value of transaction:(5)Total fee paid:☐Fee paid previously with preliminary materials.☐Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.(1)Amount Previously Paid:(2)Form, Schedule or Registration Statement No.:(3)Filing Party:(4)Date Filed:
☐ Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
☒ Definitive Proxy Statement
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☐ Soliciting Material under §240.14a-12Atrion CorporationOne Allentown Pkwy.Allen, TX 75002Tel 972-390-9800 10, 201720172020 annual meeting of stockholders of Atrion Corporation to be held on Thursday, May 21, 2020 at 10:00 a.m., Central Time, at our offices in Allen, Texas on Tuesday, May 23, 2017 at 10:00 a.m., Central Time.Texas. A notice of the annual meeting and the Company’s proxy statement accompany this letter. The business to be conducted at the annual meeting is described in our proxy statement. We have also made a copy of our 20162019 Annual Report to Stockholders available with our proxy statement.As in prior years, We encourage you to read these materials because they contain important information about the Company.are being furnished to stockholders primarily onover the Internet.Internet, as we have done in recent years. Accordingly, we have mailed to our stockholders a Notice of Internet Availability of Proxy Materials with instructions on how our proxy materials may be accessed and reviewed on the Internet and how votes may be cast. This method of distribution is more resource and cost efficient.and continued interest in, the Company.Sincerely, David A. BattatPresident and Chief Executive Officer
President and Chief Executive Officer
One Allentown Parkway
Allen, Texas 7500220172020 annual meeting of stockholders of Atrion Corporation (the “Company”) will be held on Thursday, May 21, 2020 at 10:00 a.m., Central Time, at the Company’s offices, One Allentown Parkway, Allen, Texas on Tuesday, May 23, 2017, at 10:00 a.m., Central Time,75002, for the following purposes:1.To elect two Class I directors.2.To ratify the appointment of Grant Thornton LLP as our independent registered public accounting firm for the year 2017.3.To approve, on an advisory basis, executive officer compensation.4.To conduct an advisory vote on the frequency of future advisory voting to approve executive officer compensation.5.To transact such other business as may properly come before the meeting.28, 201723, 2020 as the record date for the determination of stockholders entitled to notice of and to vote at the annual meeting and at any adjournment thereof.By Order of the Board of DirectorsJeffery StricklandVice President and Chief FinancialOfficer, Secretary and Treasurer
Vice President and Chief Financial
Officer, Secretary and Treasurer10, 2017MEETING, we hope you will vote as soon as possible. To vote your shares, please refer to the instructions for voting in the Company’s proxy statement or in the NoticeMEETING. TO VOTE YOUR SHARES, PLEASE REFER TO THE INSTRUCTIONS FOR VOTING IN THE COMPANY’S PROXY STATEMENT OR IN THE NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS or proxy card. 1 1 4 6 10 11 12 12 18 18 19 19 20 20 21 21 22 22 23 25 26 27 27 28 29 30 32 32 32 32 32 33
One Allentown Parkway
Allen, Texas 75002
MAY 23, 201720172020 annual meeting of stockholders to be held at the Company’s offices, One Allentown Parkway, Allen, Texas 75002 on Tuesday,Thursday, May 23, 201721, 2020 at 10:00 a.m., Central Time, and at any adjournment of such meeting. The notice of annual meeting, proxy statement, and form of proxy and the Company’s 20162019 Annual Report are first being made available to stockholders on or about April 10, 2017.Questions and answers about the proxy materialsand our annual meeting
AND OUR ANNUAL MEETING●election of two Class I directors;●ratification of the appointment of Grant Thornton LLP as our independent registered public accounting firm for the year 2017;●to approve, on an advisory basis, executive officer compensation; and●to conduct an advisory vote on the frequency of future advisory voting to approve executive officer compensation.A: Stockholders Entitled to Vote. Stockholders of record at the close of business on March 28, 2017,23, 2020, the record date for the meeting, will be entitled to notice of, and to vote at, the annual meeting and at any adjournment thereof. At the close of business on the record date, we had outstanding and entitled to vote 1,836,8051,840,582 shares of common stock, our only voting securities. Holders of record of shares of common stock outstanding on the record date will be entitled to one vote for each share held of record on that date upon each matter presented to the stockholders to be voted upon at the meeting.A: Registered Stockholders. Registered stockholders may vote (i) by attending the annual meeting, (ii) by following the instructions onin your Notice of Internet Availability for voting by telephone or on the Internet at www.proxyvote.com or (iii) by signing, dating, and mailing in a proxy card. Please note that the Internet and telephone voting facilities will close at 11:59 p.m., Eastern Time, on May 22, 2017. broker or other nominee that holds your shares and present that proxy at the annual meeting to vote your shares.2017;2020; and “FOR” approval, on an advisory basis, of our executive officer compensation; and,on an advisory basis, to hold advisory voting to approve our executive officer compensation every “1 Year.”compensation. In addition, in their discretion the persons designated as proxies will vote upon such other business as may properly come before the meeting.22, 2017)20, 2020). If your shares are held by a broker, bank, or other nominee, you must request instructions as to how to revoke your proxy from the broker, bank, broker or other nominee that holds your shares. broker or other nominee holds your shares and you wish to attend the annual meeting and vote in person, you must obtain a legal proxy from the record holder of the shares giving you the right to vote the shares. Thewill be held if a majorityas of the shares of our common stock outstanding on the record date entitled to vote is representedmust be present in person or represented by proxy at the meeting, constitutingto have a quorum. Abstentions and broker non-votes will be counted as present and represented at the annual meeting for purposes of determining a quorum.ElectionElections of directors and advisory voting on executive compensation and on the frequency of holding advisory voting to approve our executive officer compensation are not deemed to be routine matters. Accordingly, your broker, bank, or other nominee iswill not be entitled to vote your shares on those matters unless voting instructions are received from you. PursuantCompany’s Bylaws,number of directors areto be elected, the election of directors is an uncontested election. Therefore, at the annual meeting a director is to be elected by a pluralitythe affirmative vote of the majority of the votes cast by(meaning that the stockholders present in person or by proxy and entitled to vote.number of votes cast “FOR” a nominee must exceed the number of votes cast “AGAINST” such nominee). Abstentions and broker non-votes will have no effect on the election of directors. Ratification of the appointment of Grant Thornton LLP and approval, on an advisory basis, of our executive officer compensation each requires the affirmative vote of a majority of the shares present, in person or by proxy, at the meeting and entitled to vote thereon. Abstentions will have the same effect as a negative vote, and broker non-votes will have no effect, on the proposal to ratify the appointment of Grant Thornton LLP and on the proposal to approve, on an advisory basis, our executive officer compensation. With respect to the advisory vote on the frequency of advisory voting to approve our executive officer compensation, the frequency choice receiving the greatest number of votes cast will be considered the preference of our stockholders. Abstentions and broker non-votes will have no effect on this advisory vote.Item No.TEM 120202023 and until the election and qualification of their successors in office. Both of thesuccessors. The nominees for election as Class I directors named below and all of the directors continuing in office after the annual meeting are currently members of our Board of Directorsand such nominees and all of such nominees and directors continuing in office other than Preston G. Athey, were previously elected by our stockholders. It is intended thatUnless otherwise directed, the persons named as proxies willintend to vote forall proxies “FOR the election of the nominees named below. If thesuch nominees, named below, who have indicated their willingness to serve as directors if elected, are not candidates when the election occurs, proxies may be voted for the election of anya substitute nominees.
Principal Occupation, Positions and Offices, Other Directorships, and Business Experience202079,82, has been a director since 1987 and has served as Chairman of the Board of the Company since January 1998 and as Chairman of Halkey-Roberts Corporation, or Halkey-Roberts, one of our subsidiaries, since October 1998. He has served as our executive Chairman since May 2011. Mr. Battat served as Chief Executive Officer of the Company from October 1998 until May 2011, as President of the Company from October 1998 until May 2007, and as Chairman or President of each of the Company’s subsidiaries, other than Halkey-Roberts, from October 1998 until May 2011. Mr. Battat holds Bachelor of Science and Master of Science degrees in Mechanical Engineering from Massachusetts Institute of Technology and a Master of Business Administration degree from Harvard University. He is an associate member of Sigma Xi, a scientific honor society. Mr. Battat’s many years of executive-level experience at other companies, his education and training, and his in-depth knowledge of the Company’s operations and finances gained through his 2932 years as a director and 13 years as our Chief Executive Officer enable him to provide our Board of Directors with strong and capable leadership.53,56, has been a director since February 2006 and has been a private investor since May 2008. Prior to May 2008, Mr. Spaulding was the President of Worldwide Commercial Operations of Abbott Vascular and a Vice President and corporate officer of Abbott Laboratories, which he joined in April 2006 upon its acquisition of Guidant Corporation’s vascular intervention assets. Between 2005 and April 2006, Mr. Spaulding served as the President of International Operations of Guidant Corporation, a medical device manufacturer, and also served on the Guidant Management Committee from 2002 until 2005. From 2003 to 2005, he was the President of Europe, Middle East, Africa, and Canada of Guidant Corporation. From 2000 to 2003, Mr. Spaulding served as President of Guidant Corporation’s cardiac surgery business. Mr. Spaulding holds a Master’s degree in Biomedical Engineering and a Bachelor of Science degree in Mechanical Engineering from the University of Miami. Mr. Spaulding’s over 21 years of healthcare experience, including service as an officer of publicly-held companies with medical device operations, his knowledge of regulatory and operational matters affecting the development and marketing of medical devices, and his educational background enable Mr. Spaulding to bring a valuable and unique perspective to our Board of Directors.201867,70, has been a director since March 2017 and a private investor since his retirement in January 2017 from T. Rowe Price Associates, Inc., a subsidiary of T. Rowe Price Group, Inc., a global investment managementSmall CapSmall-Cap Value Fund. He is a Certified Investment Counselor and also holds the Chartered Financial Analyst designation. Mr. Athey received a Bachelor of Arts degree from Yale University and a Master of Business Administration degree from Stanford University. Mr. Athey’s many years of experience as a securities analyst and equity portfolio manager and his keen interest in good corporate governance are expectedenable him to provide the Board of Directors with valuable financial and governance insight.88,91, has been a director since 1988 and a private investor since 2003. He served as Chairman of the Board of National Bank of Commerce of Birmingham from February 1990 until April 2003. Previously,Prior to that time, Mr. Morgan spent over 26 years at Southern Natural Gas Company and 14 years at Sonat Inc., its parent company, after its formation in 1973. At the time of his retirement in 1987, Mr. Morgan was serving as the Chairman of the Board of Southern Natural Gas Company and as Vice Chairman of the Board of Sonat Inc. Mr. Morgan holds a Bachelor of Arts degree from Princeton University and is a graduate of the Vanderbilt University Law School and the Advanced Management Program at Harvard Business School. Mr. Morgan’s legal and business background, including his substantial experience as a senior officer and director of Sonat Inc. and its subsidiary Southern Natural Gas Company, and his long-term service as a director of the Company enable him to provide our Board of Directors valuable insight into corporate operations and governance and financial matters.2019Roger F. StebbingMr. Stebbing, age 76, has been a director since 1992 and has been our lead director since December 2007. Mr. Stebbing is President and Chief Executive Officer of Stebbing and Associates, Inc., an engineering consulting company, and has served in such capacities since 1986. Mr. Stebbing is a licensed professional engineer and has a BSc honors degree in Chemical Engineering from Salford University. Mr. Stebbing has extensive experience in the design and development of complex projects and provides our Board of Directors valuable engineering knowledge, expertise and insight, as well as an in-depth knowledge of the Company gained through his long-time service as a director.67,70, has been a director since 1985. He has served as President since March 2004, and as Chief Executive Officer since March 2014, of Stupp Bros., Inc., a diversified holding company. From April 1995 until March 2004, he served as Executive Vice President and Chief Operating Officer of Stupp Bros., Inc., and since August 1995 he has also served as Chief Executive Officer of Stupp Corporation, a division of Stupp Bros., Inc. Through its subsidiaries, Stupp Bros., Inc. has two operating divisions: Stupp Bridge Company, a fabricator offabricates steel highway and railroad bridges; and Stupp Corporation, a producer of custom-made high frequency weld and spiral weldbridges, produces pipe for natural gas and oil transmission;transmission pipelines, and three subsidiaries: APCI, LLC, an integratoroffers general, steel, and industrial construction services. Mr. Stupp also serves as a director of linear friction welding technology; Stupp Coatings LLC, coating applicators for steel line pipe; and Midwest BankCentre, a Missouri bank holding company.Bros., Inc. Mr. Stupp holds a Bachelor of Science degree in Business and Economics from Lehigh University. He serves as a director of Spire Inc., and as the chairman of its audit committee andis a member of its compensation and strategycorporate governance committees. Mr. Stupp’s substantial experience as President and Chief Executive Officer of Stupp Bros., Inc., as Chief Executive Officer of Stupp Corporation, and as a director of public companies and non-profit organizations, as well as his long-term relationship with the Company, provides our Board of Directors valuable financial and operational expertise.
NOMINEES,
EMILE A BATTAT AND RONALD N. SPAULDING.Information Regarding Board of Directors and Committeesof Directors believes that this leadership structure is appropriatein the best interests of the Company and effective becauseour stockholders and that it fosters innovative, responsive, and strong leadership for the Company. This leadership structure permits Mr. Emile Battat, who has had many years of experience with the Company, to continue to play a key role as Chairman of the Board and thereby provideNASDAQNasdaq Stock Market LLC, or Nasdaq, listing rules, a majority of the members of our Board of Directors must qualify as “independent directors,” as determined by our Board of Directors.Board. In making the determination whether our directors are independent, our Board of Directors applies the requirements for director independence set forth in the Nasdaq listing rules. After considering the relationship of each director with the Company, our Board of Directors has determined that Messrs. Athey, Morgan, Spaulding, Stebbing and Stupp are independent directors within the meaning of those rules and that our Chairman, of the Board, Mr. Emile Battat, is not an independent director. Our Audit, Compensation, and Corporate Governance Committees are comprised solely of independent directors. Our independent directors meet regularly in executive sessions without management present. Mr. Stebbing,Spaulding, who is currently the Chair of the Corporate Governance Committee, is serving as our lead director. Asdirector and as such he is responsible for calling, establishing agendas for, and moderating the Board of Directors’ executive sessions.sevensix meetings during 2016.2019. Each director serving in 2016 attended at least 75% of the aggregate of (i) the total number of meetings of the Board of Directors and (ii) the total number of meetings of all committees on which he served that were held in 20162019 during the time he served as a director or as a member of such committees.of thewe have a relatively small number of directors, our Board of Directors has determined, and has adopted a resolution providing, that nominees for election to the Board of Directors will be selected by a majority vote of the directors meeting the Nasdaq independence requirements. Accordingly, our Board of Directors does not have a separate nominating committee or a nominating committee charter. In accordance with resolutions adopted by the Board, of Directors in selecting nominees for election as directors our Board, of Directors, with the assistance of our Corporate Governance Committee, will review and evaluate candidates submitted by directors and management and by our stockholders. Stockholders who would like to suggest qualified candidates for selection by our independent directors as nominees of our Board of Directors should provide written notification thereof to the Secretary of the Company at our principal executive offices and include the candidates’ qualifications. In considering possible nominees, our independent directors are to take into account the following: (i) each director should be an individual of the highest character and integrity; (ii) each director should have substantial experience that is relevant to our Company; (iii) each director should have sufficient time available to devote to the affairs of the Company; and (iv) each director should represent the best interest of all of our stockholders. Our Board of Directors believes that having directors with diverse backgrounds, and business experience, and skills is in our best interest,interest. Under our nominating process, when we are seeking new candidates for our Board, we consider the needs of the Company, taking into account the skills andfactors are considered in connection with the selection of nominees for election as directors.factors. Our current directors have diverse industry backgrounds, including substantial experience in medical device, industrial, engineering, financial, and energy companies.companies, and diverse skills. All possible nominees are to be reviewed in the same manner, regardless of whether they have been submitted by stockholders, directors, or management.OurThe Board of Directors, directlyDirectly and through its committees, the Board of Directors reviews our material risk exposures, including operational risks, investment risks, financial risks, and compensation risks. Our Board of Directors and its committees meet with management when necessary in performing these oversight functions. of Directors has four standing committees: the Executive Committee, the Corporate Governance Committee, the Compensation Committee, and the Audit Committee.OurThe Executive Committee is currently comprised of Messrs. Emile Battat and Morgan.Our of Directors has determined that the members of our Corporate Governance Committee, Compensation Committee, and Audit Committee must meet the independence requirements of the Nasdaq listing rules for directors and that the Audit Committee members must also meet the criteria for independence set forth in Rule 10A-3(b)(1) under the Securities Exchange Act of 1934, as amended, not have participated in the preparation of the financial statements of the Company or any current subsidiary during the past three years, and be able to read and understand fundamental financial statements. The Nasdaq listing rules also require that, in determining the independence of any director who will serve on our Compensation Committee, our Board of Directors must consider all factors specifically relevant to determining whether such director has a relationship to the Company whichthat is material to that director’s ability to be independent from management in connection with the duties of a Compensation Committee member, including the source of compensation of such director and whether such director is affiliated with the Company, a Company subsidiary, or an affiliate of a Company subsidiary.Spaulding and Stebbing,Spaulding, assists in the evaluation of possible nominees for election to the Board of Directors as requested by the Board, of Directors, reviews annually and advises the Board of Directors with respect to the compensation of directors, administers the Company’s stock ownership guidelines, and recommends to the Board of Directors (i) the number of of Directors, after considering the recommendation of our Chairman of the Board, (iii) corporate governance guidelines if the Corporate Governance Committee deems them appropriate for the Company, and (iv) proposed changes to the charter of the Corporate Governance Committee. At the request of the Board of Directors, the Corporate Governance Committee assisted in the evaluation of Mr. Athey and determined that he met the criteria established by the Board of Directors for service as a director. In making recommendations to the Board of Directors as to director compensation, our Corporate Governance Committee considers our directors’ responsibilities and time devoted by them in fulfilling their duties as directors, the skills required, and market data on director compensation and takes into account recommendations made by Mr. Emile Battat. Except for Mr. Emile Battat, who is Chairman of our Board, of Directors, our executive officers are not involved in determining or recommending the amount or form of director compensation. Our Board of Directors has adopted a written charter for the Corporate Governance Committee, a copy of which is available aton our website atwww.atrioncorp.com. The Corporate Governance Committee met one timetwo times in 2016.Our2019. of Directors with respect to annual cash incentive bonuses for our executive officers who participate in the Atrion Corporation Short-Term Incentive Compensation Plan, or Short-Term Incentive Plan. The primary processes and procedures for the consideration and determination of executive compensation, the roleroles of our executive officers in determining or recommending the amount and form of executive officer compensation, the extent of delegation of authority, and the role of compensation consultants in determining or recommending executive officer compensation are set forthdiscussed in “Compensation Discussion and Analysis” atbeginning on page 1012 of this proxy statement. Our Board of Directors has adopted a written charter for the Compensation Committee, a copy of which is available on our website atwww.atrioncorp.com. The Compensation Committee met four times in 2016.atbeginning on page 1012 of this proxy statement. Stebbing and Stupp, appoints, determines the appropriate compensation for, and oversees the work of the Company’s independent auditors, assists the Board of Directors in its oversight of our accounting and financial reporting principles and policies and internal audit controls and procedures, and oversees related-partyrelated persons transactions. The Audit Committee reviews and assesses, at least annually, the Audit Committee Charter and is to recommend any changes toin the Audit Committee of Directors has determined that each member of the Audit Committee meets the independence rules and other criteria for Audit Committee membership set forth above and that Mr. Stupp qualifies as an audit committee financial expert. OurThe Board of Directors has adopted a written charter for the Audit Committee, a copy of which is available on our website atwww.atrioncorp.com. Our Audit Committee met sixfive times in 2016.Board of Directors.StockholderStockholders Meetings of Directors has a policy encouraging each director to attend, if practicable, our annual meetings of stockholders. All of the directors who were serving at the time of the 20162019 annual meeting attended that meeting.The of Directors has adopted a Code of Business Conduct that applies to our employees, including our executive officers, and to the members of our Board of Directors.$150,000$300,000 within three years of the date of election to the Board of Directors, except that non-employee directors who elect to receive at least 25% of the cash portion of their annual cash retainers in shares of our common stock under the Non-Employee Director Stock Purchase Plan or in stock units under the Non-Employee Director Deferred Compensation Plan and continue such election annually are permitted five years to meet the guidelines. Shares of our stock that count toward those guidelines are shares owned outright, shares held as restricted stock, shares underlying stock units, and shares held in certain trusts, family limited partnerships, or limited liability companies or similar investment vehicles.that counts toward these guidelines is described in “Stock Ownership GuidelinesOfficers” at page 14 of this proxy statement.Board of Directors.TheBoard.The Stock Purchase PlanThis plan allows non-employee directors to elect to receive fully-vested stock and restricted stock in lieu of some or all of their cash fees. The foregone fees are converted into shares of fully-vested stock and restricted stock on the day the applicable cash fees otherwise would have been paid. The restricted stock vests in equal amounts on the first day of the second, third, and fourth calendar quarters following receipt of the stock, provided the non-employee director is then serving as a member of the Board of Directors.Board of Directors.Board. Each stock unit account is credited with additional whole or partial stock units reflecting dividends that would have been paid on the number of shares represented by that stock unit account. The stock units held in a non-employee director’s stock unit account are distributed in the form of whole shares of common stock, with cash paid for fractional stock units, in the January following the year in which his or her service as a director ceases or in January of a particular year, as specified by the non-employee director in his or her deferred fee election form.2016:Name Fees Earned or Paid in Cash ($)(1) All Other
Compensation ($) Total ($) Preston G. Athey(3) — — — — Hugh J. Morgan, Jr. 72,000 60,000 132,000 Ronald N. Spaulding 66,000 60,000 — 126,000 Roger F. Stebbing 72,000 60,000 — 132,000 John P. Stupp, Jr. 78,000 (4) 60,000 1,425 (5) 139,425 Name
or Paid in Cash
($)(1)
($)(2) All Other
Compensation
($) Total
($) Preston G. Athey 66,000 60,000 — 126,000 Hugh J. Morgan, Jr. 72,000 60,000 132,000 Ronald N. Spaulding 72,000 60,000 — 132,000 John P. Stupp, Jr. 78,000(3) 60,000 2,661(4) 140,661 Each non-employee director who served in 2016 received a cash retainer of $66,000 for his service as a director. The Chairmen of the Corporate Governance Committee and the Compensation Committee are each paid an annual cash retainer of $6,000 and the Chairman of the Audit Committee is paid an annual cash retainer of $12,000.(2)Amounts shown reflect the aggregate fair value of the awards on the date they were granted, computed in accordance with Financial Accounting Standards Board’s Accounting Standards Codified Topic 718, or ASC 718. The amount shown for each director includes $73.50 paid in cash in lieu of fractional shares.(3)Mr. Athey was first elected to the Board of Directors in March 2017.(4)Mr. Stupp elected to defer $7,800 of his cash fees for 2016 into stock units, pursuant to the Deferred Compensation Plan. As a result, Mr. Stupp’s stock unit account was credited with 20.46 stock units, which amount was based on the closing market price of our common stock on December 31, 2015, the last trading date prior to the date of issuance, which was $381.20 per share.(5)Amount shown represents the value of stock units credited to Mr. Stupp’s stock unit account in 2016 on account of dividends paid on our common stock during the prior calendar year, in accordance with the terms of the Deferred Compensation Plan.describesis designed to explain our philosophy and objectives underlying our compensation philosophies, the factors we consider in developing and maintaining our compensation packages andprogram, the elements of our compensation arrangementsprogram for our executives.executives, the processes we follow in setting compensation, and the determinations related to our executive compensation for 2019. We recognize that the medical device industry is very competitive, and our executive compensation program is intended to attract, retain, and motivate executives who lead our business and to align their interests with the long-term interests of our stockholders. The principal elements of our compensation program are base salaries, annual cash incentive bonuses, and long-term incentives in the form of equity awards. We also provide our NQDC Plan for the benefit of certain of our highly-compensated employees, including our executive officers. We believe that our compensation program provides appropriate incentives to our executives to achieve our financial and strategic goals without encouraging them to take excessive risks in their business decisions. Our compensation program is designed to reward our executive officers for high level corporate and individual performance. We believe 2016 was another good year financially and otherwise for the Company, although our financial results were not as strong as in 2015.corporate. The financial highlights for 20152018 and 20162019 and the percentage changes from 20152018 to 20162019 are as follows: 2016 2015 Change Revenues $ 143,487,000 $ 145,733,000 -1.5 % Operating Income 39,126,000 42,510,000 -8.0 % Net Income 27,581,000 28,925,000 -4.7 % Income per Diluted Share $ 14.85 $ 15.47 -4.0 % Operating Income as a Percentage of Year End Stockholders’ Equity 24.0 % 29.5 % -5.5 % 2019 2018 Change Revenues $ 155,066,000 $ 152,488,000 1.7% Operating Income $ 40,529,000 $ 41,707,000 -2.8% Net Income $ 36,761,000 $ 34,255,000 7.3% Income per Diluted Share $ 19.73 $ 18.44 7.0% Operating Income as a Percentage of Year End Stockholders’ Equity 17.0% 19.8% -2.8% 20162019 was an important factor in determining our incentive compensation for that year. Elements of the program are also intended to reward key personnelemployees for individual responsibilities, experience, performance, and capacity to influence our results. We provide limited perquisites for our executive officers. We have stock ownership guidelines that are intended to help ensure that our present and future executive officers, as well as certain other designated officers of the Company or our subsidiaries, acquire and maintain a meaningful equity stake in the Company.program.program and our NQDC Plan. Annually, the Compensation Committee reviews tally sheets to obtain an overview of total compensation of our executive officers. These tally sheets identify the annual compensation for each of our executive officers in previous years, including base salaries, cash incentive bonuses, discretionary cash bonuses, equity awards, benefits, and perquisites. Each executive officer’s tally sheet also shows the amount payable to that executive officer upon termination of employment under variouscertain circumstances and reflectsdetails the executive officer’s equity ownership, including stock owned free of restrictions, restricted stock, restricted stock units, or RSUs, and stock options.Mr. Emile Battat, our Chairman, and Mr. David Battat, our President and Chief Executive Officer,executive officers attend meetings, or parts of meetings, of the Compensation Committee. TheCommittee at the Committee’s invitation. Although the Compensation Committee generally does not delegate the authority to make equity awards.awards, in both 2018 and 2019 it delegated to Mr. David Battat the authority to grant awards of RSUs within specified limits to employees of the Company who are not officers of the Company or its subsidiaries at the vice-president level or above at any time and from time to time in his discretion, with the more recent delegation extending through December 31, 2020. Our executive officers are responsible for the salaries, salary increases, cash incentive bonuses, and discretionary cash bonuses for key personnelemployees in our operating units who are not executive officers, and, as hereinafter described, they administer our Short-Term Incentive Plan, subject to our Compensation Committee’s review of, and recommendations to our Board of Directors various times in recent years, at the request of our Compensation Committee, over the past 15 years, and generally at two-year intervals during that period, we have engaged Mercer, a global consulting firm, to provide information regarding the compensation forof executive officers. The materials from Mercer haveThis information has provided us with informationinsight regarding base salary, target bonus, target total annual compensation, long-term incentives, and total direct compensation and have been usedprovided by ourother companies. Our Compensation Committee has used this information to obtain a more thorough understandingan analysis of compensation practices of various companies, including certain companies in the medical products and devices industry, and to assist our Compensationthe Committee in formulating its recommendations to our Board of Directors regarding the compensation structure and levels for our executive officers. In 2015,Most recently, Mercer was engaged by the Companyin late 2019 at the request of the Compensation Committee to provide market compensation data for executive officers. The information, which was set forth in aMercer’s report, delivered in December 2015, coveredMarch 2020, set forth information as to base salaries, target bonusbonuses as a percent of salary, total annual compensation, long-term incentives, and total direct compensation for 13 medical products and device companies selected by Mercer with market capitalizations ranging from $242$469 million to $3.5$9.6 billion. Also included in the March 2020 report was a review of outside director compensation. Our Compensation Committee used information in the December 2015 report in connection with its review of, and recommendations respecting, the base salaries and the cash incentive bonuses under our Short-Term Incentive Plan for 2016 for Mr. David Battat and Mr. Strickland.Elementselementscomponents of our compensation program. Additional elements are our health insurance plan, retirement benefits under our Section 401(k) Savings Plan, or 401(k) Plan, and limited perquisites. We utilize these elementsforms of compensation because we believe they are necessary or helpful in achieving the objectives of our compensation program. For example, baseBase salaries are designed to attract and retain executive officers and other key personnelemployees and are intended to be at competitive levels.levels and to provide our executive officers and other key employees a level of assured cash compensation commensurate with their positions within the Company. Annual cash incentive bonuses and equity awards are intended to reward executive officers and other key personnelemployees and to provide incentives for superior results by us and for individual responsibility and performance. Equity awards also are intended to align the interests of our executive officers and other key personnelemployees with the interests of our stockholders. The combination of these elementscomponents is designed to compensate employees fairly for the services they provide on a regular basis. Generally, the Compensation Committee analyzes the individual performance of our executive officers, with input from Messrs. Emile Battat and David Battat with respect to Mr. Strickland’s individual performance.We believe that basein terms of attractingbecause they help us attract and retainingretain executive officers and other key employees.employees and provide them a level of assured cash compensation commensurate with their positions within the Company. Annual cash incentive bonuses for our executive officers and other key personnel,employees, which provide them with the opportunity to receive cash compensation in addition to their base salaries, are intended to reward them for the Company’s performance and for individual performance as well. We believe that long-term incentives in the form of equity awards help align the interests of our executive officers and other key personnelemployees with the interests of our stockholders. We also believe that equity awards further our efforts to promote the profitabilitygrowth and growthprofitability of the Company. We do not have a specific policy of awarding options as opposed to restricted stock or restricted stock units,RSUs, and for the past several years stock options,RSUs, restricted stock, and restricted stock unitsoptions have all been important elements ofawarded in our compensation program. We view our health insurance benefits, along with certain other benefits, as necessary to attract and retain employees.him. For 2016, the cash bonuses forhim a number of years ago. Messrs. David Battat and Strickland were awarded are eligible to be selected to participate in, and may receive cash bonusesbonuses if recommended by our Compensation Committee and approved by our Board of Directors.bonuses. However, none of our executive officers is paid a fixed or guaranteed annual cash bonus. We endeavor to structure our compensation program so that our base salaries and annual cash bonus opportunities are adequate to attract and retain key personnel.employees. In addition, we seek to provide sufficient long-term equity compensation to motivate our executive officers and other key personnelemployees to focus on our performance over the longer term. We believeprogram is designed in a manner so asprograms are balanced and do not tomotivate or encourage unnecessary or excessive risk taking. Our executive officers’ basetaking because of, in part, the following:amountsin amount, and thereforefor most non-executive employees constitute the largest part of their total compensation, and thus do not encourage risk taking bytaking.executive officers. Our annual and long-term incentive compensation arrangements forfocuses on achievement of short-term goals, and short-term goals may encourage the taking of risks at the expense of long-term results, we believe that our annual incentive compensation programs represent a reasonable portion of our employees’ total compensation opportunities. The annual incentive compensation to our executive officers who participate in the Short-Term Incentive Plan is subject to the review by the Compensation Committee and approval by our Board.performance on an annual basisexecutive officers have significant value tied to long-term stock price performance. As described above, we have established procedures related to the timing and overapproval of equity awards.longer term. Weabove, we believe that those incentiveour employee compensation programs taken together with base salaries, are balancedappropriately balance risk and the desire to focus employees on short-term goals as well as long-term goals important to the Company’s success and do not promote excessive risk taking.considerstakes into account the following corporate factors in establishing our compensation program andwhen making compensation recommendations and decisions:●our earnings per share;●our operating income;●total stockholder return;●our return on equity;●safety; and●efficiency of our operations.2016,2019, our stockholders overwhelmingly approved, on an advisory basis, our executive compensation, with approximately 98%99% of the shares present, in person or by proxy, at the meeting and entitled to vote thereon being voted to approve the compensation of our executive officers. The Compensation Committee has consideredtaken into account those results in deciding to retain our general approach to executive compensation.In structuringprogram, we start with the annual base salary and build on that component.program. The factors considered when fixing an executive officer’s base salary are performance, responsibilities, experience, capacity to influence our results, competitive conditions, and length of service with us. When considering the base salaries for our executive officers, our Compensation Committee reviews thetheir total annual compensation for those executive officers for previous years as set forth in the tally sheets described above, including base salaries, formula cash incentive bonuses, and discretionary cash bonuses, long-term incentive awards, benefits, and perquisites. For 2016,2019, the base salaries of our three executive officers were as follows: Thethe base salary of Mr. Emile Battat, which is fixed2012-2015;2012-2018; the base salary of Mr. David Battat was $620,000, unchanged from his 2015 base salary;salary in the period 2015-2018; and the base salary of Mr. Strickland was fixed at $280,000, also$300,000, unchanged from his 2015 base salary.salary in 2017 and 2018. The 20162019 base salaries of Messrs. David Battat and Strickland were fixed in accordance with recommendations of our Compensation Committee, after taking into consideration information provided by Mercer in early 2018, as well as the factors described above and recommendations of Mr. Emile Battat in the case of Mr. David Battat’s base salary and Messrs. Emile Battat and David Battat in the case of Mr. Strickland’s base salary.Our executive officers, other than personnelemployees are eligible to be selected to participate in our Short-Term Incentive Plan. Under this plan, an awards pool is established each year equal to a portion of our subsidiaries’ operating profits and is funded through contributions by our subsidiaries as determined under the terms of the plan. The awards pool is used to pay cash bonuses under employment agreements, other discretionary cash bonuses to employees who are not participating in the Short-Term Incentive Plan, and other employment-related expenses. The balance of the awards pool, if any, is available for cash incentive bonuses to participating executive officers and other key personnel.employees. Cash incentive bonuses are based in part on a bonus allocation formula that takes into account a number of factors, including the participant’s salary, an individual bonus rate, the profitability of the subsidiary employing the participant (where applicable), and individual participant performance. cash incentive bonus amounts determined pursuant to that formula for ourparticipating executive officers are subjectreviewed by our Chairman of the Board, who does not participate in the Short-Term Incentive Plan. The Chairman makes the initial determinations as to reviewthe bonus amounts, and those determinations are then reviewed by our Compensation Committee, which takes into account the recommendations of the Chairman of the Board.information provided by Mercer. The Compensation Committee then makes recommendations as to the bonus amounts to our Board of Directors, which determinesfixes the cash incentive bonus amountsbonuses for ourthe executive officers.officers participating in the Short-Term Incentive Plan. In the case of key personnel,employees, the bonus amounts determined pursuant to the formula are subject to adjustments by our executive officers. TheUnder the Short-Term Incentive Plan provides that cash incentive bonuses thereunder for each year are to be determined by MarchApril 15 of the year immediately following the year for which the pool is established, with at least 75% of a participant’s bonus to be paid by April 15 of that March 15year and the balance, which is generally 25% of the bonus amount, to be paid by MarchApril 15 of the following yearyear. No participant in the Short-Term Incentive Plan has any vested right to such bonus or any part thereof until paid, and in most cases if the participanta participant’s employment terminates prior to payment his or her bonus is employed by the Company at the time for payment.forfeited. The plan is administered generally by our executive officers, subject to our Compensation Committee’s review of, and recommendations to our Board of Directors with respect to, bonuses for Mr.Messrs. David Battat and Mr. Strickland. For 2016,2019, Mr. David Battat’s cash$250,000, with 75% of each incentive$325,000, which was equal to his bonus for 2016 having already been paid in 2017 to Mr. David Battat and Mr. Strickland and the remaining 25% to be paid to each of them by March 15, 2018 provided he is employed by the Company at the time for payment. The cash incentive bonuses for Messrs. David Battat and Strickland were $100,000, or 11.1%, and $10,000, or 3.8%,, respectively, less than their bonuses for each of the years in the period 2013-2015. Mr. Emile Battat is entitled to annual cash incentive bonuses equal to a fixed percentage of year-to-year increases in our operating income as provided in his employment agreement. Our Compensation Committee has the authority to exercise its discretion to adjust any increase in our operating income to disregard one-time, nonrecurring extraordinary items and is to make such equitable adjustments as are required to give effect to acquisitions, divestitures or similar corporate transactions. For 2016, Mr. Emile Battat was not entitled to a cash incentive bonus based on such formula.2016.personnelemployees with the interests of our stockholders in focusing on long-term growth and stock performance. We review the costs and benefits to us from the various forms of long-term compensation, including stock options, restricted stock, and restricted stock units. RSUs.restricted stock unitsRSUs may continue to have value, though possibly reduced, if our profitability declines and the market price of our stock does not increase or even declines.10thtenth business day immediately following the last day of each “blackout period,” as defined in the Corporation’sCompany’s Insider Trading Policy. Those equity awards are to be made only at meetings of the Compensation Committee, including telephonic meetings, and not through actions by written consent. In 2019, the Committee awarded Mr. Strickland 131.72 RSUs that are convertible into shares of our common stock on a one-for-one basis on the earlier of the following: five years after the award date and a change in control of the Company, provided he is then employed by the Company. No equity awards were made to Mr. Emile Battat or Mr. David Battat in 2019.2016.We also maintain a 401(k) Plan for all of ourOur employees, including our executive officers. Underofficers, are also eligible to participate in our 401(k) Plan,Plan. Under that plan, we make matching contributions of up to 3.5% of a participant’s eligible compensation. Our executive officers are fully vested in our matching contributions. Perquisites are not a significant component of compensation for our executive officers.atbeginning on page 1923 of this proxy statement.being designateddesignation as being subject to the guidelines. The guidelines also provide that if an executive officer or a designated officer fails to meet the guidelines or having met the guidelines fails to continue to meet them, two-thirds of each bonus payable to such executive officer or designated officer is to be paid in a form that counts toward the guidelines until the guidelines are met. SharesStock ownership that counts under these guidelines is described in “Stock Ownership Guidelines for Directors” on page 9 of our stock that count toward those guidelines are shares owned outright, shares held as restricted stock, shares underlying stock units and shares held in certain trusts, family limited partnerships or limited liability companies or similar investment vehicles.ThisBeginning in 2018 this limitation does notapplies to all forms of compensation, subject to certain “grandfather” provisions that apply however, to “performance-based”performance-based compensation. Although the Compensation Committee is cognizant of the limitations imposed by Section 162(m), the Compensation Committee believes that the primary purpose of our executive compensation program is to support the Company’s business strategy and the long-term interests of our stockholders. Therefore, the Compensation Committee maintains the flexibility to awardrecommend or recommendaward compensation that may not be tax-deductible if doing so furthers the objectives of our executive compensation program.restricted stock unitsRSUs held, and the potential benefits they may realize upon the sale of the stock underlying these awards. We also have a policy discouraging the hedging of the risk of ownership of our securities. Hugh J. Morgan, Jr. (Chairman) Preston G. Athey Ronald N. Spaulding John P. Stupp, Jr.
Position Year Salary ($) Stock Awards ($)(1) Total ($) 2016 600,000 — — 11,118 (3) 611,118 2015 600,000 — — 15,843 615,843 2014 600,000 220,668 229,734 19,838 1,070,240 2016 620,000 — 800,000 (4) 17,494 (5) 1,437,494 2015 620,000 — 900,000 21,314 1,541,314 2014 600,000 220,668 900,000 24,480 1,745,148 2016 280,000 — 250,000 (6) 17,556 (7) 547,556 2015 280,000 — 260,000 16,535 556,535 2014 270,000 100,000 260,000 15,161 645,161 Name and
Principal Position Year
($)(1)
($)(2)
($)(2)
Incentive Plan
Compensation
($)(1)(3) Change in Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($) All Other
Compensation
($) Total
($)
Chairman 2019 600,000 — — — 15,661 20,349(4) 636,010 2018 600,000 — — 34,682 8,676 21,914 665,272 2017 600,000 1,195,032 1,218,900 171,824 348 22,966 3,209,070
President and Chief
Executive Officer 2019 620,000 — — 800,000 184,066 21,995(5) 1,626,061 2018 620,000 — — 900,000 —(6) 25,530 1,543,530 2017 620,000 1,433,232 1,388,000 850,000 2,151 22,338 4,315,721
Vice President and
Chief Financial Officer,
Secretary and Treasurer 2019 300,000 100,000 — 325,000 9,423 29,381(7) 783,804 2018 300,000 300,000 — 325,000 2,848 25,151 952,999 2017 300,000 200,000 — 275,000 89 30,878 805,967 The amounts presented in this column represent the full aggregate grant date fair value of stock awards made during the year computed in accordance with ASC 718. The assumptions used in the valuations may be found in Note 8 to the financial statements included as a part of our Annual Report on Form 10-K/A for the year ended December 31, 2016.(2)The award to Mr. Emile Battat was made to him under his employment agreement with us. The awards to Messrs. David Battat and Strickland were made to them under our Short-Term Incentive Plan which provides for at least 75% of an award for a year to be paid by March 15 of the succeeding year and the remaining amount to be paid by March 15 of the following year provided the participant who was to receive the payment was employed by the Company at the time for payment.(3)Includes the following paid or accrued by us or one or more of our subsidiaries: (i) matching contributions to our 401(k) Plan of $9,275; (ii) dividends on restricted stock of $1,350; and (iii) payment of life insurance premiums of $493.(4)This amount was awarded to Mr. David Battat for 2016 pursuant to the Short-Term Incentive Plan, with 75% of such amount having already been paid to him in 2017 and the remaining 25% to be paid to him by March 15, 2018 provided he is employed by the Company at the time for payment.(5)Includes the following paid or accrued by us or one or more of our subsidiaries: (i) matching contributions to our 401(k) Plan of $9,275; (ii) dividends on restricted stock of $7,200; and (iii) payment of life insurance premiums of $1,019.(6)This amount was awarded to Mr. Strickland for 2016 pursuant to the Short-Term Incentive Plan, with 75% of such amount having already been paid to him in 2017 and the remaining 25% to be paid to him by March 15, 2018 provided he is employed by the Company at the time for payment.(7)Includes the following paid or accrued by us or one or more of our subsidiaries: (i) matching contributions to the 401(k) Plan of $9,275; (ii) payment of life insurance premiums of $3,325; and (iii) $4,956, which is the dollar value of dividend equivalents credited in 2016 with respect to unvested restricted stock units in Mr. Strickland’s stock unit account under the 2006 Equity Plan.2016:Estimated Possible Payouts UnderNon-Equity Incentive Plan AwardsNameGrant Type(1)Threshold ($)Target ($)(2)Maximum ($)Emile A BattatIncentive Compensation———David A. BattatIncentive Compensation—800,000—Jeffery StricklandIncentive Compensation—250,000—(1)For a description of these awards, see “Incentive Compensation” below and “Certain Agreements, Plans and Transactions” at page 17 of this proxy statement. No equity awards were made to our executive officers in 2016.(2)These amounts represent the cash incentive bonuses earned in 2016, with 75% of the cash incentive bonuses for Mr. David Battat and Mr. Strickland having already been paid to them in 2017 and the remaining 25% to be paid to them by March 15, 2018 if they are employed by the Company at the time for payment. These incentive compensation awards do not have threshold or maximum payout amounts.Name Grant Type Grant Date Estimated Possible Payouts Under
Non-Equity Incentive Plan Awards All Other
Stock
Awards:
Number
of Shares
of Stock
or Units (#) All Other
Option
Awards:
Number of
Securities
Underlying
Options (#) Exercise or
Base Price
of Option
Awards
($/Sh)
Fair Value
of Stock
and Option
Awards
($)(2) Threshold
($)
($)(1) Maximum
($) Emile A Battat Restricted Stock — — — — — — — — Options — — — — — — — — Incentive Compensation — — — — — — — — David A. Battat Restricted Stock — — — — — — — — Options — — — — — — — — Incentive Compensation N/A — 800,000 — — — — — Jeffery Strickland RSUs 8/23/19 — — — 131.72 — — 100,000 Incentive Compensation N/A — 325,000 — — — — — is fixed by hisfor each calendar year during the term at $600,000. The term of our employment agreement.agreement with Mr. Emile Battat expires on December 31, 2021 and automatically renews for additional one-year terms unless either we or Mr. Emile Battat notifies the other of termination at least six months prior to the expiration of the then-current term. Base salaries for Mr. Strickland and Mr. David Battat are reviewed annually, and adjustments are generally made on the basis of our performance as measured by certainOur executive officers, other than and certain key employees are eligible to be selected to participate in our Short-Term Incentive Plan. Mr. Emile Battat is eligible for annual cash incentive awards under the terms of his employment agreement. These arrangements are described in more detail in “Certain Agreements, Plans and Transactions” at page 17 of this proxy statement and have been designed to foster a corporate culture focused on bottom line results by providing our executive officers and key employees with a substantial stake in reducing costs and increasing sales and productivity while conserving capital resources. In addition, our executive officers may receive discretionary bonuses if recommended by our Compensation Committee and approved by our Board of Directors.The following table sets forth summary information concerning our executive officers’ outstanding equity awards as of December 31, 2016:Outstanding Equity Awards at Fiscal Year-End Option Awards Stock Awards Name Number of Shares or Units of Stock That Have Not Vested (#) Market Value of Shares or Units of Stock That Have Not Vested ($)(1) Emile A Battat 25,000 — 181.44 5/26/18 — — David A. Battat 20,000 5,000 (2) 228.08 5/18/19 1,500 (2) 760,800 Jeffery Strickland — — — — 1,515 (3) 768,408 (1)Based on the closing price of $507.20 per share of the common stock of the Company on December 31, 2016.(2)These awards vest on May 18, 2017.(3)Comprised of 1,193 restricted stock units that vest on May 18, 2017 and 322 restricted stock units that vest on May 22, 2019.The following table sets forth summary information concerning stock options exercised and the value realized upon exercise and the vesting of stock and the value realized upon vesting for our executive officers during the year ended December 31, 2016:Option Exercises and Stock Vested Option Awards Stock Awards Name Number of Shares
Acquired on Exercise (#) Value Realized
on Exercise ($) Number of Shares
Acquired on Vesting (#) Value Realized
on Vesting ($)(1) Emile A Battat — — 1,500 584,438 David A. Battat — — 1,500 592,613 Jeffery Strickland — — — — (1)Based on the average of the high and low sales prices of the Company’s common stock on the vesting dates.Certain Agreements, Plans and TransactionsWe have an employment agreement with Mr. Emile Battat that provides that he will serve as a senior executive officer of the Company and, subject to his election as a director by our stockholders, will serve as Chairman of the Board if so elected by our Board of Directors. Mr. Emile Battat’s employment agreement fixes his base salary for each calendar year during the term at $600,000. In addition, he is entitled to receive a cash bonus each year equal to a percentage of the increase in operating income for such calendar year over operating income for the prior calendar year, subject to equitable adjustments in operating income in the discretion of the Compensation Committee. Our employment agreement with Mr. Emile Battat also provides for certain payments to be made and benefits provided to him upon termination of employment, as discussed in “Potential Termination and Change in Control Payments” at page 19 of this proxy statement. The term of our employment agreement with Mr. Emile Battat expires on December 31, 2021 and automatically renews for additional one-year terms unless either we or Mr. Emile Battat notifies the other of termination at least 30 days prior to the expiration of the then-current term.Our Short-Term Incentive Plan, in which our executive officers other than Mr. Emile Battat, and certain key employees are eligible to be selected to participate in our Short-Term Incentive Plan. Our Short-Term Incentive Plan provides for the establishment each year of an awards pool that is equal to a portion of our subsidiaries’ operating profits and is funded through contributions by those subsidiaries. The awards pool is used to pay bonuses under employment agreements, other discretionary bonuses to employees who are not participating in the Short-Term Incentive Plan, and other employment-related expenses. The balance of the awards pool, if any, is available for bonuses to participating executive officers and other key personnel.employees. Bonuses under the Short-Term Incentive Plan are based in part on a bonus allocation formula that takes into account a number of factors, including the participant’s salary, an individual bonus rate, the profitability of the subsidiary employing the participant (where applicable), and individual participant performance. The bonus amounts determined pursuant to that formula for ourparticipating executive officers are reviewed by our Chairman of the Board who makes the initial determinations as to the bonus amounts. The Chairman’s determinations are then subject to reviewreviewed by our Compensation Committee, which takes into account themakes recommendations of the Chairman of the Board, and the Compensation Committee’s recommendation as to the bonus amounts to our Board of Directors, whichDirectors. The Board then fixes the bonuses.amount of the bonuses for our executive officers participating in the Short-Term Incentive Plan. The bonus amounts determined pursuant to the bonus formula for key personnelemployees are subject to review and adjustment by our executive officers. Bonuses under the Short-Term Incentive Plan are determined by the MarchApril 15 immediately following the performance year, with at least 75% of thea participant’s bonus to be paid by April 15 of that March 15year and the balance, which is generally 25% of the bonus, to be paid by the following March 15April 15. No participant in the Short-Term Incentive Plan has any vested right to such bonus or any part thereof until paid, and generally if the participanta participant’s employment terminates prior to payment, his or her bonus is employed by the Company at the time for payment.forfeited. For 2016,2019, Mr. David Battat was awarded a cash incentive bonus under the Short-Term Incentive Plan of $800,000, and Mr. Strickland was awarded a cash incentive bonus of $250,000,$325,000. The Short-Term Incentive Plan has been designed to foster a corporate culture focused on bottom line results by providing participating executive officers and other key employees with 75%a substantial stake in reducing costs and increasing sales and productivity while conserving capital resources. In addition, our executive officers may receive discretionary bonuses if recommended by our Compensation Committee and approved by our Board of each bonus having already been paidDirectors.20172019 are convertible into shares of our common stock on a one-for-one basis on the earlier of the following: five years after the award date and the remaining 25% to be paid by March 15, 2018 provided the executive officer is employed by the Company at the time for payment.We have a change in control agreement with Mr. David Battat that provides that he will be entitled to certain payments and benefits in the event his employment is terminated in connection with a change in control of the Company, provided he is then employed by the Company. Those RSUs were granted to Mr. Strickland under our 2006 Equity Plan. No equity awards were granted to Mr. Emile Battat or Mr. David Battat in 2019.discussedof December 31, 2019: Option Awards Stock Awards Name Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#) Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#) Option
Exercise
Price
($) Option
Expiration
Date Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)
of Shares or
Units of Stock
That Have
Not Vested
($)(1) Emile A Battat 4,000 6,000(2) 464.05 3/13/23 1,740(2) 1,307,610 David A. Battat 4,000 6,000(3) 538.00 5/23/23 1,800(3) 1,352,700 Jeffery Strickland — — — — 967.66(4) 727,196 “Potential Terminationthis column are based on the closing price of $751.50 per share of the common stock of the Company on December 31, 2019.Change131.72 RSUs that vest on August 23, 2024. Option Awards Stock Awards Name Number of Shares
Acquired on Exercise
(#) Value Realized
on Exercise
($) Number of Shares
Acquired on Vesting
(#)
Vesting
($)(1) Emile A Battat — — 580 458,142 David A. Battat — — 600 535,800 Jeffery Strickland — — — — Control Payments” atthis column are based on the average of the high and low sales prices of the Company’s common stock on the vesting dates.Name
Contributions
in Last FY
($)(1)
Contributions
in Last FY
($)(2)
Earnings in
Last FY
($)(3) Aggregate
Withdrawals/
Distributions
($)
Balance at
Last FYE
($)(4) Emile A Battat 31,214 — 15,661 — 787,469 David A. Battat 607,500 — 184,066 — 1,344,177 Jeffery Strickland 331,875 6,475 9,423 — 606,829 1918 of this proxy statement. statement in the “Salary” or “Non-Equity Incentive Plan Compensation” columns.hasand are included in the Summary Compensation Table in the “All Other Compensation” column.severance plan pursuant to which Mr. Strickland will be entitled to certain payments if his employment is terminated under certain circumstances in connection with a change in controlselect group of key management or highly compensated employees of the Company and its subsidiaries, including our executive officers, to defer income under a nonqualified plan. As such, the plan provides a vehicle for the eligible employees to defer amounts higher than the limits established for our 401(k) Plan, which is a qualified plan. The Company is to credit make-up contributions to the account of each of each participant who makes a deferral election for base salary under the NQDC Plan that results in a reduction of the Company’s matching contribution that would have been made in our 401(k) Plan, with the make-up contribution to be in an amount equal to the amount by which our matching contribution to our 401(k) Plan is reduced as discusseda result of the deferral election made under the NQDC Plan. Base salary and bonus compensation are eligible for deferral under the NQDC Plan. Each year our Compensation Committee selects the key management or highly compensated employees who are eligible to participate in “Potential Terminationthe NQDC Plan, and Changeeach of those employees makes an election whether or not to participate in Control Payments”the NQDC Plan and at page 19what level he or she wishes to defer compensation. Participants may defer not less than 10% and not more than 90% of this proxy statement.18cause.vest.vest and convert to common stock.and restricted stock, and RSUs held by Messrs. Emile Battat, David Battat, and Strickland will vest under the terms of the 2006 Equity Plan.2016:Name Termination Without Just Cause, For Good Reason, or upon Death or Disability ($) Termination Without
Just Cause or For
Good Reason in
Connection with a
Change in Control ($) Change in
Control ($) Emile A Battat Severance Payment — 791,727 1,583,453 — Equity Awards(1) — — — — Retirement Benefits(2) 102,009 102,009 102,009 — Health Benefits — 17,506 17,506 — Unreimbursed Business Expenses 136,000 136,000 136,000 — Accrued Vacation Pay — — — — Total 238,009 1,047,243 1,838,968 — David A. Battat Severance Payment — — 3,840,000 — Equity Awards(1) — — 2,156,400 2,156,400 Retirement Benefits(2) 92,710 92,710 92,710 — Health Benefits — — 8,352 — Unreimbursed Business Expenses 100,950 100,950 100,950 — Accrued Vacation Pay 11,923 11,923 11,923 — Total 205,583 205,583 6,210,335 2,156,400 Jeffery Strickland Severance Payment — — 280,000 — Equity Awards(1) — — 768,388 768,388 Retirement Benefits(2) 338,648 338,648 338,648 — Health Benefits — — — — Unreimbursed Business Expenses — — — — Accrued Vacation Pay 5,385 5,385 5,385 — Total 344,033 344,033 1,392,421 768,388 (1)Represents the market price as of December 31, 2016 of equity awards vesting on termination of employment or change in control less, in the case of options, the exercise price of those options.(2)These retirement benefits are the market value of the vested amount contributed by the Company to each executive officer’s account under the 401(k) Plan.Name Type of Payment
or Benefit Termination for
Just Cause
or Without
Good Reason
($) Termination
Without Just
Cause, For
Good Reason,
or upon
Retirement,
Death, or
Disability
($) Termination
Without Just
Cause or For
Good Reason
in Connection
with a Change
in Control
($) Change
in Control
($) Emile A Battat Severance Payment — 668,835 1,337,671 — Equity Awards(1) — 3,032,310 3,032,310 3,032,310 787,469 787,469 787,469 — Health Benefits — 18,499 18,499 — Unreimbursed Business Expenses 160,168 160,168 160,168 — Accrued Vacation Pay — — — — Total 947,637 4,667,281 5,336,117 3,032,310 David A. Battat Severance Payment — — 3,740,000 — Equity Awards(1) — — 2,633,700 2,633,700 1,344,177 1,344,177 1,344,177 — Health Benefits — — 8,820 — Unreimbursed Business Expenses 162,000 162,000 162,000 — Accrued Vacation Pay — — — — Total 1,506,177 1,506,177 7,888,697 2,633,700 Jeffery Strickland Severance Payment — — 300,000 — Equity Awards(1) — 382,198(3) 727,196 727,196 606,829 606,829 606,829 — Health Benefits — — — — Unreimbursed Business Expenses — — — — Accrued Vacation Pay 5,769 5,769 5,769 — Total 612,598 994,796 1,639,794 727,196 2016,2019, Messrs. Athey, Morgan, Spaulding, and Stupp served as members of the Compensation Committee. None of the members of the Compensation Committee was or had previously been an officer or employee of the Company or our subsidiaries or had any relationship requiring disclosure pursuant to Item 404 of Regulation S-K. Additionally, during 2016,2019, none of our executive officers was a member of the board of directors, or any committee thereof, of any other entity one of the executive officers of which served as a member of our Board of Directors, or any committee thereof.20No. 2
PUBLIC ACCOUNTING FIRM2017.2020. Although ratification by stockholders of the selection of Grant Thornton LLP is not required by law, the selection of Grant Thornton LLP is being submitted to our stockholders for ratification because we believe it is a good corporate practice. If stockholders do not ratify the selection, the Audit Committee will reconsider whether to retain Grant Thornton LLP. Even if the selection is ratified, the Audit Committee, in its discretion, may change the appointment at any time during the year if it determines that such a change would be in the best interest of us and our stockholders. A representative of Grant Thornton LLP will attend the annual meeting, will have an opportunity to make a statement, and will be available to respond to appropriate questions.2017.$361,865$384,656 for the year ended December 31, 20162019 and were $351,161$394,796 for the year ended December 31, 2015.There were no31, 2016 or for the year ended December 31, 201521, 2019 for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit Fees” above.Tax FeesThe aggregate fees billed by Grant Thornton LLP for professional services rendered for tax servicesabove were $22,472 for the year ended December 31, 2016 and $85,736 for the year ended December 31, 2015. These fees relate to federal and state tax compliance and tax advice in each such year.All Other Fees2016 other than those set forth2018 for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and not reported under “Audit Fees” above. The aggregate2015,2019 tax services. The aggregate fees billed by Grant Thornton LLP for tax services were $44,287 for the year ended December 31, 2018. These fees relate to federal and state tax compliance and tax advice.above, totaled $51,257 and related to utility tax incentives and compliance and reporting under the Affordable Care Act.pre-approvepre-approve fee levels for each of the following categories: audit, audit-related, and tax compliance/planning services. Any proposed services exceeding pre-approved fee levels will require specific pre-approval by the Audit Committee. Approval for such services may be requested at the next Audit Committee meeting or, if earlier approval is necessary, it may be obtained in accordance with the Audit Committee’s delegation to the Audit Committee Chairman as described below. The term of any pre-approval is 12 months from the date of the pre-approval unless the Audit Committee specifically provides for a different period. The Audit Committee will not delegate to our management its responsibilities to pre-approve services performed by the independent registered public accounting firm. However, the Audit Committee has delegated pre-approval authority to the Audit Committee Chairman for unplanned services that arise during the year. The Chairman has the authority to review and approve permissible services up to $15,000 per service, provided that the aggregate amount of such services does not exceed $30,000 in any calendar year. The Audit Committee Chairman must report, for informational purposes only, any pre-approval decisions to the Audit Committee at its next scheduled meeting. During the year ended December 31, 2016,2019, no services were provided by Grant Thornton LLP other than in accordance with the pre-approval policies and procedures then in place.2016.2019. The Audit Committee has discussed with Grant Thornton LLP, our independent registered public accounting firm, the matters required to be discussed by Auditing Standard No. 1301,Communications with Audit Committees, as adopted byapplicable standards of the Public Company Accounting Oversight Board. The Audit Committee has received the written disclosures and the letter from the independent registered public accounting firmGrant Thornton LLP required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm’sGrant Thornton’s communications with the Audit Committee concerning independence and has discussed with the independent registered public accounting firm the independent registered public accounting firm’sGrant Thornton LLP its independence.10-K/A10-K for the year ended December 31, 2016.John P. Stupp, Jr. (Chairman)Hugh J. Morgan, Jr.Ronald N. SpauldingRoger F. StebbingNo. 3at page10on page 12 of this proxy statement. This vote will be similar to the advisory votes on the compensation of our executive officers that we have held annually since 2011. We have helddetermined to hold an advisory vote on the compensation of our executive officers annually since 2011, anduntil the next required vote on the frequency of stockholder voting on the compensation of the Company’s executive officers, which will occur at our 2023 annual meeting, unless the Board of Directors hereafter determines that a different frequency for such advisory voting is in the best interests of our stockholders. Accordingly, unless the Board of Directors makes such a determination, the next advisory vote on the compensation of our executive officers following the 2020 annual meeting will occur at the annual meeting of stockholders will again vote, on an advisory basis, on the frequency with which we will hold such a vote after this annual meeting.20162019 annual meeting, with approximately 98%99% of the shares present, in person or by proxy, at the meeting and entitled to vote thereon being voted to approve, on an advisory basis, the compensation of our executive officers.20172020 annual meeting of stockholders:20172020 annual meeting of stockholders, as disclosed in said proxy statement pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, compensation tables and narrative discussion.”The Board of Directors recommends A vote “FOR” the approval, on an advisory basis, of OUR executive OFFICER COMPENSATION as presented in this proxy statement.Item No. 4ADVISORY VOTE ON THE FREQUENCY OF ADVISORY VOTING ON THECOMPENSATION OF OUR EXECUTIVE OFFICERSPursuant to Section 14A of the Securities Exchange Act of 1934, as amended, we are also requesting stockholders to vote, on an advisory basis, on how frequently we present a request for an advisory vote on the compensation of our executive officers. Stockholders will be able to cast their votes on whether we present the advisory vote on our executive compensation every “1 Year,” “2 Years” or “3 Years” or may abstain from voting.We recognize that there are advantages and disadvantages to each of the presented options for the frequency of an advisory vote on executive compensation. However, we are recommending that our stockholders select a frequency of every year for the advisory vote on the compensation of our executive officers. Since 2011, we have been conducting an advisory vote annually on our executive compensation. We believe that we should continue holding an annual vote so that stockholders can express their views on our executive compensation program every year. The Board of Director’s determination was influenced by the fact that the compensation of our executive officers is evaluated, adjusted and approved on an annual basis. The Board of Directors believes that, as part of the annual review process, stockholder sentiment should be a factor that is taken into consideration by the Board of Directors and our Compensation Committee in making decisions with respect to executive compensation.Although the Board of Directors recommends a vote every year, stockholders will be able to specify one of the three choices set forth above or abstain from voting on this proposal. Stockholders are not voting to approve or disapprove the Board of Directors’ recommendation.The Board of Directors will consider the frequency choice receiving the highest number of votes cast as the stockholders’ preferred choice for the frequency of advisory voting on the compensation of our executive officers. Because this vote is advisory and not binding on the Board of Directors or the Company in any way, the Board of Directors may decide that it is in the best interests of our stockholders and the Company to hold an advisory vote on executive compensation more or less frequently than the option preferred by our stockholders. However, we value the opinions of our stockholders, and we will consider the outcome of the vote in making determinations regarding the presentation of vote proposals in future proxy statements.UNANIMOUSLY RECOMMENDS THAT YOUA VOTE “FOR” THE APPROVAL, ON AN ADVISORY BASIS, FOR A FREQUENCY OF EVERY “1 YEAR” FOR ADVISORY VOTING ON THE COMPENSATION OF OUR EXECUTIVE OFFICERS.31, 201723, 2020 by (i) each of our directors, twoone of whom are alsois the Board of Directors’ nomineesnominee for election as directorsa director at the annual meeting; (ii) our executive officers who are named in the Summary Compensation Table herein; (iii) all of our directors and executive officers as a group; and (iv) each other person known by us to be the beneficial owner of more than 5% of our outstanding common stock:Name of Beneficial Owner Preston G. Athey 125 * David A. Battat(2) 107,168 (3) 5.76 % Emile A Battat(4) 152,273 8.29 % Hugh J. Morgan, Jr. 17,500 * Ronald N. Spaulding 2,051 (5) * Roger F. Stebbing 6,150 * John P. Stupp, Jr. 140,844 (6) 7.67 % Jeffery Strickland 4,230 (7) * BlackRock, Inc.(8) 97,109 5.29 % T. Rowe Price Associates, Inc.(9) 242,541 13.20 % All directors and executive officers as a group (8 persons)(10) 430,341 23.10 % *Less than 1% of class.(1)Based on 1,836,805Name of Beneficial Owner
Beneficially Owned(1)
of Class(1) Preston G. Athey 502 * 98,815(3) 5.35% 154,673(5) 8.38% Hugh J. Morgan, Jr. 16,874 * Ronald N. Spaulding 2,128(6) * John P. Stupp, Jr. 140,844(7) 7.65% Jeffery Strickland 1,879(8) * 105,970 5.76% 184,601 10.03% 163,395 8.88% 146,392 7.95% 415,715 22.44% of the Company outstanding on March 31, 2017, plus shares that can be acquired through the exercise of options or vesting of restricted stock units within 60 days thereafter by the specified individual or group. Except as otherwise indicated in the notes to this table, beneficial ownership includes sole voting and investment power.(2)The business address for Mr. David Battat is One Allentown Parkway, Allen, Texas 75002-4206. Mr. David Battat is the son of Mr. Emile Battat.(3)These shares include 25,000 shares of common stock of the Company issuable upon the exercise of options exercisable on March 31, 2017 or within 60 days thereafter and 55,500 shares held in a family trust as to which shares Mr. David Battat has shared voting and investment power. Mr. David Battat is a party to an award agreement setting forth certain terms of options granted to him under the 2006 Equity Plan.(4)The business address for Mr. Emile Battat is One Allentown Parkway, Allen, Texas 75002-4206.(5)These shares are held in a family trust, of which Mr. Spaulding is the trustee.(6)These shares include 135,000 shares held by Stupp Bros., Inc. as to which Mr. Stupp shares voting power and investment power as a director and executive officer, and as a voting trustee of a voting trust which owns 100% of the voting stock, of Stupp Bros., Inc. The 135,000 shares held by Stupp Bros., Inc., which are pledged to that company’s lenders as security for its working capital line of credit, represent 7.35% of our common stock outstanding as of March 31, 2017. Mr. Stupp is the direct beneficial owner of 5,844 shares, all of which shares are pledged as collateral for a mortgage loan. These shares do not include 22,330 shares held in a family trust, the co-trustees of which are Mr. Stupp’s wife and one of his children or 457 stock units held in Mr. Stupp’s stock unit account that will not be converted into shares of our common stock within 60 days after March 31, 2017. The business address for Mr. Stupp and Stupp Bros., Inc. is 3800 Weber Road, St. Louis, Missouri 63125.(7)These shares are held in a family limited partnership, the general partner of which is a limited liability company in which Mr. Strickland is a member. Mr. Strickland has shared voting and investment power over these shares. These shares include 1,203 shares of common stock of the Company issuable on the vesting of restricted stock units that will vest on May 18, 2017 but exclude 325 shares of common stock issuable on the vesting of restricted stock units that will not vest until May 22, 2019.(8)The address of BlackRock, Inc. is 55 East 52nd Street, New York, New York 10022. This information is based on a Schedule 13G dated January 30, 2017 filed with the SEC reporting that BlackRock, Inc. has the sole power to vote or direct the vote of 94,419 shares of our common stock and the sole power to dispose or direct the disposition of 97,109 shares of our common stock.(9)The address of T. Rowe Price Associates, Inc. is 100 East Pratt Street, Baltimore, Maryland 21202. This information is based upon a Schedule 13G/A dated February 7, 2017 filed with the SEC reporting that T. Rowe Price Associates, Inc. has sole power to vote or direct the vote of 73,959 shares of our common stock and has sole power to dispose or direct the disposition of 242,541 shares of our common stock and thatT. Rowe Price Small-Cap Value Fund, Inc. has sole power to vote or direct the vote of 168,582 shares of our common stock. For purposes of the reporting requirements of the Securities Exchange Act of 1934, as amended, T. Rowe Price Associates, Inc. is deemed to be a beneficial owner of such shares of common stock but has expressly disclaimed beneficial ownership of all such shares.(10)See notes (1)-(7) above.SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCESection 16(a) of the Securities Exchange ActCompany outstanding on March 23, 2020, plus shares that can be acquired through the exercise of 1934,options or vesting of RSUs within 60 days thereafter by the specified individual or group. Except as amended, requires our officers, directorsotherwise indicated in the notes to this table, beneficial ownership includes sole voting and persons who own more than 10%investment power.to file initial reportsoutstanding as of ownershipMarch 23, 2020. Mr. Stupp is the direct beneficial owner of 5,844 shares, of which 5,206 shares are pledged as collateral for a mortgage loan. These shares do not include 22,330 shares held in a family trust, the co-trustees of which are Mr. Stupp’s wife and reportsone of changes of ownershiphis children or 497 stock units held in Mr. Stupp’s stock unit account that will not be converted into shares of our common stock within 60 days after March 23, 2020. The business address for Mr. Stupp and Stupp Bros., Inc. is 3800 Weber Road, St. Louis, Missouri 63125.provide copiesdispose or direct the disposition of those reports48,880 shares of our common stock. The address of Kayne Anderson Rudnick Investment Management, LLC is 1800 Avenue of the Stars, 2nd Floor, Los Angeles, California 90067.us. We assistvote or direct the vote of 162,066 shares of our directorscommon stock and officers with completingthe shared power to dispose or direct the disposition of 163,395 shares of our common stock, that Neuberger Berman Investment Advisers LLC has the shared power to vote or direct the vote of 162,066 shares of our common stock and filing these reports. Basedthe shared power to dispose or direct the disposition of 163,395 shares of our common stock, that Neuberger Berman Equity Funds has the shared power to vote or direct the vote of 114,795 shares of our common stock and the shared power to dispose or direct the disposition of 114,795 shares of our common stock, and that Neuberger Berman Genesis Fund has the shared power to vote or direct the vote of 114,795 shares of our common stock and the shared power to dispose or direct the disposition of 114,795 shares of our common stock. Neuberger Berman Group LLC, Neuberger Berman Investment Advisers LLC, and certain affiliated entities have disclaimed beneficial ownership of all such shares. The address of Neuberger Berman Group LLC, Neuberger Berman Investment Advisers LLC, Neuberger Berman Equity Funds, and Neuberger Berman Genesis Fund is 1290 Avenue of the Americas, New York, New York 10104.reviewSchedule 13G/A dated February 14, 2020 filed with the SEC reporting that T. Rowe Price Associates, Inc. has sole power to vote or direct the vote of these filings and written representations from our directors and officers, we believe that all reports were filed timely in 2016, except that a Form 4 for Mr. Strickland reporting the sale of two49,969 shares of the Company’sour common stock was filed one day late.20182020 annual meeting of stockholders, such proposals must be received by us on or before December 11, 2017.20182021 annual meeting must be delivered not earlier than December 24, 201722, 2020 and not later than January 23, 2018,21, 2021, provided the date of the 20182021 annual meeting is not more than 30 days before or more than 60 days after May 23, 2018.21, 2021. Our Bylaws also specify the information that must be included in the notice that stockholders must provide to the Secretary of the Company in order to propose any business to be conducted at an annual meeting or to nominate one or more persons for election to our Board of Directors at an annual meeting or a special meeting called for the purpose of electing directors. The Chairman of the meeting may refuse to transact any business presented or to acknowledge the nomination of any person made without compliance with the procedures set forth in our Bylaws. The foregoing summary is qualified in its entirety by reference to the full text of our Bylaws which is on file with the SEC and is available upon request to the Secretary of the Company.specifically are not incorporated by reference into any other filings with the SEC.SEC unless specifically provided otherwise in such filings. In addition, this proxy statement includes our website address. This website address is intended to provide inactive, textual references only. The information on our website is not part of this proxy statement.By Order of the Board of DirectorsJeffery StricklandVice President and Chief FinancialOfficer, Secretary and TreasurerApril 10, 2017
Vice President and Chief Financial
Officer, Secretary and TreasurerATRION CORPORATIONONE ALLENTOWN PARKWAYALLEN, TX 75002VOTE BY INTERNET -www.proxyvote.comUse the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALSIf you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.VOTE BY PHONE - 1-800-690-6903Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.VOTE BY MAILMark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:E22183-P88572KEEP THIS PORTION FOR YOUR RECORDSTHIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.DETACH AND RETURN THIS PORTION ONLYATRION CORPORATIONForAllWithholdAllFor AllExceptTo withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below.The Board of Directors recommends you vote “FOR” the nominees listed in Item 1.☐☐☐1.Election of DirectorsNominees:01) Emile A Battat02) Ronald N. SpauldingThe Board of Directors recommends you vote “FOR” Items 2 and 3.ForAgainstAbstain2.Ratification of the appointment of Grant Thornton LLP as the Company’s independent registered public accounting firm for the year 2017.☐☐☐3.Advisory vote to approve executive officer compensation.☐☐☐The Board of Directors recommends you vote “1 Year” on Item 4.1 Year2 Years3 YearsAbstain4.Advisory vote on the frequency of advisory voting to approve executive officer compensation.☐☐☐☐Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.Signature [PLEASE SIGN WITHIN BOX]DateSignature (Joint Owners)DateV.1.1Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.E22184-P88572ATRION CORPORATIONANNUAL MEETING OF STOCKHOLDERSTHIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORSThe undersigned hereby appoints Hugh J. Morgan, Jr., and John P. Stupp, Jr., or either of them, as proxies of the undersigned, with full power of substitution, and hereby authorizes them to represent and to vote, as specified on the reverse side of this proxy and in their discretion upon such other matters that may properly come before the meeting or any adjournment thereof, all of the shares of Common Stock of Atrion Corporation that the undersigned is entitled to vote at the annual meeting of stockholders of Atrion Corporation to be held at 10:00 a.m., Central Time, on Tuesday, May 23, 2017, at the offices of Atrion Corporation, One Allentown Parkway, Allen, TX 75002, and at any adjournment thereof.This proxy, if properly executed and returned, will be voted as directed or, if no direction is given, will be voted “FOR” the nominees listed in Item 1, “FOR” Items 2 and 3 and “1 Year” on Item 4. If any other matters properly come before the meeting, this proxy will be voted as determined by the proxies in their discretion.PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED REPLY ENVELOPE.Continued and to be signed on reverse sideV.1.1