exh10n.htm


     

    
      

      

    

    Exhibit
10n

    
 

    ATRION
CORPORATION

    


    DEFERRED
COMPENSATION PLAN FOR

    NON-EMPLOYEE
DIRECTORS

    (As
amended and restated as of December 2, 2008)

    


    


    


    1.  Purpose;
Effective Date.  Atrion Corporation (the "Company") has
established this Deferred Compensation Plan for Non-Employee Directors (the
"Plan") for the purpose of providing an unfunded nonqualified deferred
compensation plan for the non-employee directors of the Company (the
"Directors"). The Plan shall be effective as of the date of approval by the
Board of Directors of the Company (the "Board").

     

    2.  Eligibility.
Persons eligible to defer compensation under the Plan shall consist of the
Directors.  Any Director who has submitted a Deferred Fee Election
Form, as defined below, is hereinafter referred to as a
"Participant."

     

    3.  Deferred
Fees.  A Director may elect to defer receipt of all or a
portion of the cash fees payable for services as a director and for services as
a member of a Committee of the Board for a calendar year (the "Fees") by
submitting to the Company an election form with respect to such Fees (the
"Deferred Fee Election Form").  The Deferred Fee Election Form must be
submitted to the Company no later than the applicable Deferral Deadline, as
defined below.  A Deferred Fee Election Form submitted by a
Participant shall be irrevocable once the Deferral Deadline for those Fees has
passed, but the Participant may modify or terminate a Deferred Fee Election Form
with respect to Fees payable in any year by submitting a revised Deferred Fee
Election Form or otherwise giving written notice to the Company at any time on
or prior to the Deferral Deadline for those Fees.  The Deferral
Deadline for an election to defer Fees for services performed in any calendar
year shall be the last day of the prior calendar year; provided, however, that
the Deferral Deadline for a Director's first year of eligibility in this Plan
shall be the 30th day following the date the Director becomes eligible to
participate in this Plan with respect to Fees payable for services performed
after the election is made.  Directors are eligible to participate in
the Plan upon election to the Board.

    


    4.  Stock
Unit Accounts.

     

    (a)  Accounts.
The Company shall establish on its books a Stock Unit Account ("Stock Unit
Account") for each Participant that elects to defer Fees, which shall be
denominated in Stock Units, including fractional Stock Units.  On the
first business day of each calendar year, the Stock Unit Account shall be
credited with a number of Stock Units equal to the Fees deferred by the Director
(the "Deferred Fees") divided by the closing price of the common stock of the
Company (the "Common Stock") on the next preceding date on which any Shares of
Common Stock were traded on any national securities exchange on which shares of
Common Stock are listed. Also on the first business day of each calendar year,
each Stock Unit Account shall be credited with an additional number of Stock
Units (including fractional Stock Units) equal to the total amount of dividends
that would have been paid during the prior year on the number of Stock Units
recorded as the balance of that Stock Unit Account on each date such dividends
were paid divided by the closing price for the Common Stock on such dividend
payment dates.

     

     

    
 

    
      
        
        

      

      
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    (b)  Statement
of Account. At least annually, a report shall be issued by the Company to each
Participant setting forth the balance of the Participant's Stock Unit Account
under the Plan.

     

    (c)  Effect
of Change in Control on Stock Unit Accounts. At the time of consummation of a
Change in Control (as defined below), if any, any Stock Units that are not
vested shall vest.  At such time, the total amount credited to a
Participant's Stock Unit Account shall be converted into a credit for cash or
common stock of the acquiring company ("Acquiror Stock") based on the
consideration received by stockholders of the Company ("Stockholders") in the
Change in Control, as follows:

     

    (i)  Stock
Transaction. If Stockholders receive Acquiror Stock in the Change in Control,
then (1) the amount credited to each Participant's Stock Unit Account shall be
converted into a credit for the number of shares of Acquiror Stock that the
Participant would have received as a result of the Change in Control if the
Participant had actually held the Common Stock credited to his or her Stock Unit
Account immediately prior to the consummation of the Change in Control, and (2)
Stock Unit Accounts will thereafter be denominated in shares of Acquiror Stock
and ongoing deferral of Fees shall continue to be made into the Stock Unit
Accounts as so denominated in accordance with the terms of outstanding deferral
elections.

     

    (ii)  Cash
or Other Property Transaction. If Stockholders receive cash or other property in
the Change in Control, then (1) the amount credited to a Participant's Stock
Unit Account shall be converted into a cash credit for the amount of cash or the
value of the property that the Participant would have received as a result of
the Change in Control if the Participant had actually held the Common Stock
credited to his or her Stock Unit Account immediately prior to the consummation
of the Change in Control, and the cash so credited to the Participant shall be
distributed in a lump sum to the Participant in January of the year following
the Change of Control, and (2) Stock Unit Accounts shall no longer exist under
the Plan, and there shall be no ongoing deferrals.

     

    (iii)  Combination
Transaction. If Stockholders receive Acquiror Stock and cash or other property
in the Change in Control, then (1) the amount credited to each Participant's
Stock Unit Account shall be converted in part into a credit for Acquiror Stock
under Section 4(c)(i) and in part into a credit for cash under Section 4(c)(ii)
in the same proportion as such consideration is received by the Stockholders,
and (2) ongoing deferral and crediting of Fees shall continue to be made into
the Stock Unit Accounts as provided in Section 4(c)(i) in accordance with the
terms of outstanding deferral elections.

      

    (iv)  Change
in Control.  For purposes of this Plan, a "Change of Control" shall
mean the occurrence of any of the following events: (a) any person, entity or
affiliated group, excluding the Company or any employee benefit plan of the
Company, acquiring more than twenty-five percent (25%) of the then outstanding
shares of voting stock of the Company, (b) the consummation of any merger or
consolidation of the Company into another company, such that the holders of the
shares of the voting stock of the Company immediately before such merger or
consolidation own less than fifty percent (50%) of the voting power of the
securities of the surviving company or the parent of the surviving company, (c)
the adoption of a plan for complete liquidation of the Company or the sale or
disposition of all or substantially all of the Company's assets of the Company,
such that after the transaction, the holders of the shares of the voting stock
of the Company immediately prior to the transaction own less than fifty percent
(50%) of the voting securities of the acquiror or the parent of the acquiror, or
(d) during any period of two (2) consecutive years, individuals who at the
beginning of such period constituted the Board (including for this purpose any
new director whose election or nomination for election by the Company's
stockholders was approved by a vote of at least a majority of the directors then
still in office who were directors at the beginning of such period) cease for
any reason to constitute at least a majority of the Board.

     

     

     

    
      
        
        

      

      
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    5.  Vesting.  Subject
to Section 6 hereof, each Stock Unit, other than Stock Units credited on the
first business day of each year to a Stock Unit Account as a dividend
equivalent, shall vest as follows:  (a) 25% of such Stock Unit shall
vest on the date on which it is credited to the Stock Unit Account; (b) 25% of
such Stock Unit shall vest on the April 1 immediately following the date on
which it is credited to the Stock Unit Account; (c) 25% of such Stock Unit shall
vest on the July 1 immediately following the date on which it is credited to the
Stock Unit Account; and (d) 25% of such Stock Unit shall vest on the October 1
immediately following the date on which it is credited to the Stock Unit
Account.  Except as otherwise provided in Section 4(c), the foregoing
vesting schedule requires continued service through each applicable vesting date
as a condition to the vesting of the applicable portion of each Stock
Unit.  Each Stock Unit credited on the first business day of each year
to a Stock Unit Account as a dividend equivalent shall be fully vested when
credited to such Stock Unit Account.

    


    6.  Termination
as Director.  If a Participant ceases to be a member of the
Board for any reason, all Stock Units credited to such Participant’s Stock Unit
Account that have not vested as of the last day that such Participant is a
member of the Board shall immediately be forfeited and shall terminate and there
shall be no payment therefor, or delivery of Common Stock with respect thereto,
to such Participant.

    


    7.  Distributions.

     

    (a)  Timing
of Distributions.  Each Deferred Fee Election Form shall include an
election by the Participant as to the timing of distributions with respect to
Deferred Fees.  Except as otherwise provided in this Section 7, such
elections shall be irrevocable with respect to Deferred Fees once the Deferral
Deadline for such Deferred Fees has passed.  All distributions from
the Plan shall be made in shares of Common Stock with one share of Common Stock
to be distributed for each Stock Unit in the Participant’s Stock Unit Account
plus cash for any fractional Stock Units.

     

    (b)  Distribution
Timing and Valuation. Distributions shall be made (i) in January of the year
following the year in which service as a director of the Company ceases for any
reason or (ii) in January of the year the Participant elects in the Deferred Fee
Election Form which, except in the case of Stock Units credited to a Stock Unit
Account as a dividend equivalent, shall in no case be earlier than the January
following the year in which the Stock Unit is credited to the Participant’s
Stock Unit Account.  All distributions due under the Plan in any year
shall be made on a date in January determined by the Compensation Committee of
the Board (the "Committee").  All distributions shall be based on
Stock Unit Account balances as of the close of business on the last trading day
of the immediately preceding year plus any additional Stock Units credited to
the Stock Unit Account pursuant to the third sentence of Section 4(a) above.  

     

     

    
      
        
        

      

      
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    (c)  Designation
of Beneficiaries; Death.

     

    (i)  Each
Participant shall have the right, at any time, to designate any person or
persons as the Participant's beneficiary or beneficiaries (both primary as well
as secondary) to whom distributions under this Plan shall be made in the event
of the Participant's death prior to completion of distribution due under the
Plan. If greater than fifty percent (50%) of the distribution is designated to a
beneficiary other than the Participant's spouse, such beneficiary designation
shall be consented to by the Participant's spouse. Each beneficiary designation
shall be in written form prescribed by the Company and will be effective only if
filed with the Company during the Participant's lifetime. Such designation may
be changed by the Participant at any time without the consent of a beneficiary,
subject to the spousal consent requirement above. If no designated beneficiary
survives the Participant, the Participant's distributions shall be made to the
Participant's surviving spouse or, if no spouse survives, to the Participant's
estate.

     

    (ii)  Upon
the death of a Participant, all distributions shall be made in January of the
year following death.

     

    (d)  Distribution
to Guardian. If a distribution under the Plan is due to a minor or a person
declared incompetent or to a person incapable of handling the disposition of his
property, the Committee may direct such distribution to the guardian, legal
representative or person responsible for the care and custody of such minor,
incompetent or person. The Committee may require proof of incompetence,
minority, incapacity or guardianship as it may deem appropriate prior to such
distribution. Such distribution shall completely discharge the Committee and the
Company from all liability with respect to such distribution.

     

    (e)  Withholding;
Payroll Taxes. The Company shall withhold from distributions made hereunder any
taxes required to be withheld from such distributions under federal, state or
local law.

     

    8.  Administration.

     

    (a)  Committee
Duties. This Plan shall be administered by the Committee. The Committee shall
have responsibility for the general administration of the Plan and for carrying
out its intent and provisions. The Committee shall interpret the Plan and have
such powers and duties as may be necessary to discharge its responsibilities.
The Committee may, from time to time, employ other agents and delegate to them
such administrative duties as it sees fit, and may from time to time consult
with counsel who may be counsel to the Company.

     

    (b)  Binding
Effect of Decisions. The decision or action of the Committee in respect of any
question arising out of or in connection with the administration, interpretation
and application of the Plan and the rules and regulations promulgated hereunder
shall be final, conclusive and binding upon all persons having any interest in
the Plan.

     

     

    
      
        
        

      

      
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    9.  Amendment
and Termination of the Plan.

     

    (a)  Amendment.
The Board may at any time amend the Plan in whole or in part; provided, however,
that no amendment shall affect the terms of any previously deferred amounts or
the terms of any irrevocable Deferred Fee Election Form of any
Participant.

     

    (b)  Termination.
The Board may at any time partially or completely terminate the Plan if, in its
judgment, the tax, accounting, or other effects of the continuance of the Plan,
or potential distributions thereunder, would not be in the best interests of the
Company.

     

    (i)  Partial
Termination. The Board may partially terminate the Plan by instructing the
Committee not to accept any additional Deferred Fee Election Forms and
terminating all existing Deferred Fee Election Forms to the extent such Deferred
Fee Election Forms have not yet become irrevocable. In the event of such a
partial termination, the Plan shall continue to operate and be effective with
regard to all elections regarding Deferred Fees made prior to the effective date
of such partial termination.

     

    (ii)  Complete
Termination. The Board may completely terminate the Plan as provided in this
Section 9(b)(ii). In connection with any complete termination, the Company shall
take all actions necessary so that Participants do not incur any taxes under
Section 409A of the Internal Revenue Code.

     

    (1)  In
the event the Board causes a complete termination of the Plan (other than in
connection with a Change in Control Event as provided in Section 9(b)(ii)(2)),
the Plan shall continue to operate as in a partial termination except as
provided in this Section 9(b)(ii)(1). For a period selected by the Board of at
least 12 months from the date the Board takes action to terminate the Plan, the
Plan shall continue to make distributions otherwise due under the terms of the
Plan absent termination of the Plan. On a date selected by the Board that is
more than 12 months from the date the Board took action to terminate the Plan,
the Plan shall cease to operate, the Company shall determine the balance of each
Participant's Stock Unit Account as of the close of business on such date and
the Company shall distribute such Stock Unit Account balances to the
Participants in a single lump sum distribution as soon as practicable after such
date, but in no event shall such distribution be made later than 24 months after
the date the Board took action to terminate the Plan.

     

    (2)  The
Board may completely terminate the Plan at any time during the 30 days preceding
or the 12 months following a Change in Control Event (as defined in the proposed
regulations under Section 409A of the Internal Revenue Code in effect as of the
effective date of the Plan or in any revised or final regulations adopted after
the effective date of the Plan). In that event, on the effective date of the
complete termination, the Plan shall cease to operate, the Company shall
determine the balance of each Participant's Stock Unit Account as of the close
of business on such effective date, and the Company shall distribute such Stock
Unit Account balance, whether or not then vested, to the Participants in a
single lump sum distribution as soon as practicable after such effective date
and in no event later than 12 months after such effective date.

     

     

    
      
        
        

      

      
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    10.  Miscellaneous.

     

    (a)  No
Funding.  The obligations of the Company to make distributions under
this Plan shall be interpreted solely as an unfunded, contractual obligation to
distribute only those amounts credited to the Participant's Stock Unit
Account.  Any assets set aside, including any assets transferred to a
grantor trust or purchased by the Company with respect to amounts payable under
the Plan, shall be subject to the claims of the Company's general creditors, and
no person other than the Company shall, by virtue of the provisions of the Plan,
have any interest in such assets.

     

    (b)  Non-assignability.
Neither a Participant nor any other person shall have the right to commute,
sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber,
transfer, hypothecate or convey any Stock Unit Account or, in advance of actual
receipt, the amounts, if any, payable hereunder, or any part thereof, which are,
and all rights to which are, expressly declared to be non-assignable and
nontransferable. No part of the distributions to be made hereunder shall, prior
to actual distribution, be subject to seizure or sequestration for the payment
of any debts, judgments, alimony or separate maintenance owed by a Participant
or any other person, nor be transferable by operation of law in the event of a
Participant's or any other person's bankruptcy or insolvency.

    


    (c)  Compliance
with Laws.  This Plan and the issuance and delivery of shares of
Common Stock under this Plan are subject to compliance with all applicable
federal and state laws, rules and regulations (including but not limited to
state and federal securities law and federal margin requirements) and to such
approvals by any listing, regulatory or governmental authority as may, in the
opinion of counsel for the Company, be necessary or advisable in connection
therewith. Any securities delivered under this Plan shall be subject to such
restrictions, and the person acquiring such securities shall, if requested by
the Company, provide such assurances and representations to the Company as the
Company may deem necessary or desirable to assure compliance with all applicable
legal requirements. To the extent permitted by applicable law, the Plan shall be
deemed amended to the extent necessary to conform to such laws, rules and
regulations.

     

    (d)  Governing
Law. The provisions of this Plan shall be construed and interpreted according to
the laws of the State of Texas, except as preempted by federal law.

     

    (e)  Validity.
In case any provision of this Plan shall be held illegal or invalid for any
reason, said illegality or invalidity shall not affect the remaining parts
hereof, but this Plan shall be construed and enforced as if such illegal and
invalid provisions had never been inserted herein.

     

    (f)  Notice.
Any notice or filing required or permitted to be given to the Company or the
Committee under the Plan shall be sufficient if in writing and hand delivered,
or sent by registered or certified mail, to the Secretary of the Company. Such
notice shall be deemed given as of the date of delivery or, if delivery is made
by mail, as of the date shown on the postmark on the receipt for registration or
certification.

     

    (g)  Successors.
The provisions of this Plan shall bind and inure to the benefit of the Company
and its successors and assigns. The term successors as used herein shall include
any corporate or other business entity which shall, whether by merger,
consolidation, purchase or otherwise acquire all or substantially all of the
business and assets of the Company, and successors of any such corporation or
other business entity.

    
 

     

     

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