--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

Exhibit 10.1

CHANGE IN CONTROL AGREEMENT
 
THIS CHANGE IN CONTROL AGREEMENT (the “Agreement”) is entered into as of the
31st day of March, 2009 (the “Effective Date”) by and between ATRION
CORPORATION, a Delaware Corporation (the “Company”) and DAVID A. BATTAT (the
“Executive”).

W I T N E S S E T H:
 
WHEREAS, the Executive is currently employed as the President and Chief
Operating Officer of the Company and as President of Halkey-Roberts Corporation
(“Halkey-Roberts”), a Company subsidiary; and
WHEREAS, the Company and the Executive desire to provide certain benefits to the
Executive in the event the Executive’s employment with the Company or
Halkey-Roberts is terminated in connection with a change in control of the
Company.
NOW, THEREFORE, in consideration of the foregoing, the mutual provisions
contained herein, and for other good and valuable considerations, the parties
hereto agree as follows:
1.  
Term of Agreement.

 
(a) The term of this Agreement shall commence on the Effective Date and shall
terminate on the second anniversary of the Effective Date, provided, however,
that commencing on the day after the Effective Date and continuing on each day
thereafter (each such day being hereinafter referred to as a “Renewal Date”),
the term of this Agreement shall be automatically extended so as to terminate on
the second anniversary of such Renewal Date unless the Company shall give
written notice to the Executive that the term of this Agreement shall not be so
extended as of a specified Renewal Date, in which event this Agreement shall
automatically terminate on the second anniversary of such specified Renewal
Date.
 
(b) Notwithstanding subsection (a) hereof, this Agreement shall continue in
effect (i)  until the date two years beyond the initial or any extended date of
termination in the event of a Change in Control (as defined in Exhibit A hereto)
prior to such date of termination, and (ii) thereafter until the date that all
obligations of the Company hereunder have been paid in full.
 
 
2.
Termination of Employment.

 
(a) As set forth in detail in this Section 2, if the Executive’s employment by
the Company or Halkey-Roberts is terminated in contemplation of or within two
years following a Change in Control, the Executive shall be entitled to the
compensation provided in Section 3 of this Agreement unless such termination is
as a result of (i) the Executive’s death, (ii) the Executive’s Disability (as
defined below), (iii) the Executive’s termination for Just Cause (as defined
below), or (iv) termination of employment by the Executive other than for Good
Reason (as defined below).
 
(b) The Executive shall be considered to be subject to a "Disability" if, as a
result of physical or mental sickness or incapacity or accident, the Executive
is unable to perform the normal duties of his employment with the Company or
Halkey-Roberts for a period of ninety (90) days in any one hundred twenty (120)
day period.  If there is any disagreement between the Company and the Executive
as to whether the Executive was unable to perform the normal duties of his
employment due to Disability, the same shall be determined after examination of
the Executive by a physician selected by the Executive (or, if the Executive is
unable to make such selection, it shall be made by the Executive's spouse  or,
if the Executive is not married or if his spouse is unable or  unwilling to make
the selection, by any other adult member of the Executive's immediate family)
and approved by the Company.  The costs and expenses of such examination shall
be borne by the Company.  The determination of such physician shall be
conclusive evidence as to whether the Executive was unable to perform the normal
duties of his employment due to Disability.  If the Executive does not permit
such examination by such physician, then, for purposes hereof, the determination
as to whether the Executive was unable to perform the normal duties of his
employment due to Disability shall be made by the Board of Directors of the
Company (the “Board”).  Nothing herein shall have any effect upon the
Executive's eligibility to receive any disability benefits from the Company or
Halkey-Roberts pursuant to the terms and conditions of any disability plan or
other arrangement which the Company or Halkey-Roberts may have in effect from
time to time.
 
 
 
 

--------------------------------------------------------------------------------

 
 
(c) In the event the Executive’s employment with the Company or Halkey-Roberts
is terminated by the Company or Halkey-Roberts, whether or not in contemplation
of or within two years following a Change in Control, (i) for Just Cause, (ii)
by the Executive for other than Good Reason (as defined below), or (iii) due to
the Executive’s death of Disability, then the Executive shall not be entitled to
the compensation provided in Section 3 below or other compensation or benefits
hereunder.  The term “Just Cause” shall mean (A) the Executive's continuing
willful failure to perform his material duties and obligations as President and
Chief Operating Officer of the Company or as President of Halkey-Roberts (except
by reason of his death or incapacity due to his Disability) after written notice
thereof by the Company to the Executive, and the Executive's failure or refusal
to perform such duties and obligations within thirty (30) days after the receipt
of such notice by the Executive or (B) the conviction of, or the entering of a
plea of nolo contendere by, the Executive with respect to a felony (other than
as a result of a traffic violation or as a result of vicarious liability),
provided that on or after a Change in Control, Just Cause shall be limited to
only clause (B) above.  For purposes of this Section 2(c), no act, or failure to
act, on Executive's part shall be considered "willful" unless done, or omitted
to be done, by him not in good faith and without reasonable belief that his
action or omission was in the best interests of the Company or
Halkey-Roberts.  The Company must assert a Just Cause termination event no later
than ninety (90) days after discovery of such event.
 
(d) In the event the Executive’s employment with the Company or Halkey-Roberts
is terminated in contemplation of or within two years following a Change in
Control (i) by the Company or Halkey-Roberts without Just Cause or (ii) by the
Executive for Good Reason, the Executive shall be entitled to the compensation
and other benefits provided in Section 3 below.  The term “Good Reason” shall
mean any one or more of the following: (A) without the Executive's express
written consent, any diminution in the Executive's titles, authorities,
responsibilities or the assignment of the Executive to any duties inconsistent
with his position, duties, responsibilities and status with the Company as its
President and Chief Operating Officer and President of Halkey-Roberts or the
removal by the Board, or the failure or refusal of the Board to re-elect, the
Executive as the President and Chief Operating Officer of the Company and
President of Halkey-Roberts at any time during the term of this Agreement; (B)
the Company's breach of any provision of this Agreement or any other breach by
the Company or Halkey-Roberts of any provision of any agreement between the
Company or Halkey-Roberts and the Executive and failure, within the ten (10) day
period following its receipt of written notice from the Executive describing
such breach in reasonable detail, to promptly commence in good faith to cure
such breach (if curable); provided that such cure must be effected no later than
thirty (30) days following such notice and provided further that such cure right
shall not be available on more than one occasion in any twelve (12) month
period; (C) failure of the Company to obtain the assumption in writing (a copy
of which is delivered to the Executive) of the Company's obligations hereunder
to the Executive by any successor to the Company prior to or at the time of a
merger, acquisition, consolidation, disposition of substantially all of the
assets of the Company or similar transaction.  For purposes of clause (A) above,
a "diminution in the Executive's titles, authorities or responsibilities" shall
be deemed to have occurred if the Company is no longer required to file reports
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934,
as amended.
 
 
 
 

--------------------------------------------------------------------------------

 
 
The Executive must assert a "Good Reason" termination event no later than ninety
(90) days after the Executive discovers such event.
(e) Any termination of the Executive’s employment by the Company or
Halkey-Roberts as set forth in Section 2(c)(i) or 2(d)(i) or by the Executive as
set forth in Section 2(c)(ii) or 2(d)(ii) shall be communicated to the other
party by a Notice of Termination.  For purposes of this Agreement, a “Notice of
Termination” shall mean a written notice which shall state the specific
termination provision in this Agreement pursuant to which such termination
allegedly falls and which sets forth in reasonable detail the facts and
circumstances which form the basis for such termination.
 
3.  
Termination Payment.

 
(a) In the event the Executive’s employment is terminated pursuant to Section
2(d), the Executive shall be entitled to receive the following payments:
 
the Executive’s base salary and annual bonus for the calendar year in which the
date of termination falls, in each case prorated for the number of days of the
calendar year that elapsed prior to the date of termination, accrued vacation
pay and unreimbursed business expenses, such payment to be made as soon as
practicable following the termination date but in any event within two and
one-half (2½) months after the end of the calendar year in which the Executive's
employment is terminated; and
 
two times the sum of (A) the Executive’s base salary for the twelve (12) months
immediately preceding the month in which the Executive’s employment is
terminated and (B) the sum of the (i) average of the annual bonuses paid, or
that would have been paid had the Executive’s employment with Halkey-Roberts not
been terminated, to the Executive under the Halkey-Roberts Incentive
Compensation Plan for the three calendar years prior to the calendar year in
which such termination occurs and (ii) average of the annual bonuses received by
the Executive under any other bonus or incentive plan of the Company or
Halkey-Roberts for the three calendar years prior to the calendar year in which
such termination occurs, such payment to be made as soon as practicable
following the termination date but in no event later than ten (10) days after
the termination date.
 
(b) In addition to the payments provided for in Section 3(a), in the event the
Executive’s employment is terminated as set forth in Section 2(d), all stock
options and/or equity granted to the Executive shall fully vest and become
exercisable on the termination date and upon the Executive's termination of
employment the Company or Halkey-Roberts shall pay one-hundred percent (100%) of
the premiums for twelve (12) months of continuation coverage for health benefits
under the Consolidated Omnibus Budget Reconciliation Act of 1985 for the
Executive and his eligible dependents.
 
4. Withholding.  The Company shall be entitled to withhold from amounts to be
paid to the Executive hereunder any federal, state, or local withholding or
other taxes or charges which it is from time to time required to withhold;
provided, that the amount so withheld shall not exceed the minimum amount
required to be withheld by law in light of the circumstances.  The Company shall
be entitled to rely on an opinion of tax counsel if any question as to the
amount or requirement of any such withholding shall arise.
 
 
 
 

--------------------------------------------------------------------------------

 
 
5. Notices.  All notices provided for by this Agreement shall be in writing and
shall be (a) personally delivered to the party thereunto entitled or (b)
deposited in the United States mail, postage prepaid, addressed to the party to
be notified at the address listed below (or at such other address as may have
been designated by written notice), certified or registered mail, return receipt
requested.  The notice shall be deemed to be received (a) if by personal
delivery, on the date of its actual receipt by the party entitled thereto or (b)
if by mail, two (2) days following the date of deposit in the United States
mail.
 
To the Company:                 Atrion Corporation
One Allentown Parkway
Allen, Texas  75002
Attention:  Chief Financial Officer
To Executive:                        David A. Battat
To the most recent address
on file with the Company.
6. Parties Bound.  This Agreement and the rights and obligations hereunder shall
be binding upon and inure to the benefit of the Company, Executive, and their
respective heirs, personal representatives, successors and assigns; provided,
however, that Executive may not assign any rights or obligations hereunder
without the express written consent of Company.  This Agreement shall also bind
and inure to the benefit of any successor of the Company by merger or
consolidation, or any assignee of all or substantially all of the Company's
properties.
 
7. Invalid Provisions.  If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under present or future laws effective during
the term hereof, such provision shall be fully severable; this Agreement shall
be construed and enforced as if such illegal, invalid, or unenforceable
provision had never comprised a part hereof; and the remaining provisions hereof
shall remain in full force and effect and shall not be affected by the illegal,
invalid, or unenforceable provision or by its severance herefrom.
 
8. No Mitigation; No Set-Off.
 
(a) No Duty to Mitigate.  In the event of any termination of employment
hereunder, Executive shall be under no obligation to seek other employment and
there shall be no offset against any amounts due Executive under this Agreement
on account of any remuneration attributable to any subsequent employment that
Executive may obtain.
 
(b) Other Payments.  Any amounts or benefits payable to the Executive under this
Agreement are, in addition to, and are not in lieu of, amounts payable to the
Executive under any other salary continuation or cash severance arrangement of
the Company or any other type of agreement entered into between the parties, and
to the extent paid or provided under any other such arrangement or agreement
shall not be offset from the amounts or benefits due hereunder, except to the
extent expressly provided in such other arrangement or agreement.
 
9. Attorneys' Fees And Costs.  In the event that it becomes necessary for the
Executive to seek legal counsel with regard to a dispute, claim or issue under
this Agreement or the Executive deems it necessary to initiate arbitration in
order to enforce his rights hereunder, then the Company shall bear and, upon
notification to the Company by the Executive, immediately advance to the
Executive all expenses of such dispute, claim, issue or arbitration, including
the reasonable fees and expenses of the counsel of the Executive incurred in
connection with such dispute, claim, issue or arbitration, unless an arbitrator
determines that the Executive's position was frivolous or otherwise taken in bad
faith, in which case an arbitrator may determine that Executive shall bear his
own legal fees. Notwithstanding any existing or prior attorney-client
relationship between the Company and the counsel selected by the Executive, the
Company irrevocably consents to the Executive's entering into an attorney-client
relationship with such counsel, and in that connection the Company and the
Executive agree that a confidential relationship shall exist between the
Executive and such counsel.
 
 
 
 

--------------------------------------------------------------------------------

 
 
10. Arbitration.  All disputes and controversies arising under or in connection
with this Agreement, shall be settled by arbitration conducted before one (1)
arbitrator sitting in New York, New York, or such other location agreed to by
the parties hereto, in accordance with the National Rules for the Resolution of
Employment Disputes of the American Arbitration Association then in effect. The
determination of the arbitrator shall be final and binding on the parties.
Judgment may be entered on the award of the arbitrator in any court having
proper jurisdiction. All expenses of such arbitration, including the fees and
expenses of the counsel for the Executive, shall be borne by the Company unless
the arbitrator determines that Executive's position was frivolous or otherwise
taken in bad faith, in which case the arbitrator may determine that Executive
shall bear his own legal fees.
 
11. Section Headings.  The headings contained in this Agreement are for
reference purposes only and do not affect in any way the meaning or
interpretation of this Agreement.
 
12. Multiple Counterparts.  This Agreement may be executed in counterparts, each
of which for all purposes is to be deemed an original, and both of which
constitute, collectively, one agreement; but in making proof of this Agreement,
it shall not be necessary to produce or account for more than one such
counterpart.
 
13. Governing Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, without regard to its
conflict-of-law rules.
 
14. Section 409A.  This Agreement is not intended to provide for the deferral of
compensation within the meaning of Section 409A of the Internal Revenue Code of
1986, as amended, but, rather, is intended to satisfy the short-term deferral
exemption under Treasury Regulation § 1.409A-1(b)(4).  To that end, all payments
provided for under Section 3(a) of this Agreement shall be made no later than
two and one-half (2½) months after the end of the calendar year in which the
Executive's employment is terminated.
 
15. Entire Agreement.  This Agreement contains the entire agreement of the
parties hereto, and supersedes all prior agreements and understandings, oral or
written, if any, between the parties hereto, with respect to the subject matter
hereof. No modification or amendment of any of the terms, conditions, or
provisions herein may be made otherwise than by written agreement signed by the
parties hereto.
 
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
and delivered as of the date first above written.
 
 

   ATRION CORPORATION            By: /s/ Jeffery Strickland    Its: Vice
President and Chief Financial Officer        /s/ David A. Battat    DAVID A.
BATTAT        

 
 

 
 

--------------------------------------------------------------------------------

 

Exhibit A

(a)           For purposes of the Agreement, the term “Change in Control” shall
mean the occurrence of any one of the following events:
(i)           any person (as the term “person” is used in Section 13(d) (3) or
Section 14(d) (2) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) (other than the Company, any of its subsidiaries, or any
trustee or other fiduciary holding securities of the Company under an employee
benefit plan of the Company or any of its subsidiaries) becomes the beneficial
owner (as the term “beneficial owner” is defined under Rule 13d-3 or any
successor rule or regulation promulgated under the Exchange Act) of securities
of the Company representing 25% or more of the combined voting power of the
then-outstanding voting securities of the Company
(ii)           the Company is merged, consolidated or reorganized into or with
another corporation or other person and as a result of such merger,
consolidation or reorganization less than 50% of the combined voting power of
the then-outstanding securities of such corporation or person immediately after
such transaction are held in the aggregate by the holders of voting securities
of the Company immediately prior to such transaction;
(iii)           the stockholders of the Company approve a plan of complete
liquidation of the Company or the Company sells all or substantially all of its
assets to any other corporation or other person and as a result of such sale
less than 50% of the combined voting power of the then-outstanding voting
securities of such corporation or person immediately after such transaction are
held in the aggregate by the holders of voting securities of the Company
immediately prior to such sale; or
(iv)           during any period of two consecutive years, individuals who, at
the beginning of any such period, constitute the directors of the Company cease
for any reason to constitute at least a majority thereof unless the election or
the nomination for election by the Company's stockholders of each director of
the Company first elected during such period was approved by a vote of at least
two-thirds of the directors of the Company then still in office who were
directors of the Company at the beginning of any such period.

 

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------