EMPLOYMENT AGREEMENT
Exhibit 10.23
This Employment Agreement (the “Agreement”) is dated December 29, 2008 between
Meridian Bioscience, Inc., an Ohio corporation (the “Meridian”) and Xxxx X.
Xxxxxxxxx, Chief Executive Officer (“Kraeutler”).
W I T N E S S E T H :
WHEREAS, Meridian and Kraeutler desire to amend an employment agreement dated
February 15, 2001; and
WHEREAS, Meridian wishes to assure itself of the services of Kraeutler for the
period hereinafter provided, and Kraeutler is willing to be employed by Meridian for
such period, upon the terms and conditions provided in this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants contained
herein and for other good and valuable consideration, the receipt of which is mutually
acknowledged, Meridian and Kraeutler agree as follows:
1. Employment. Meridian hereby employs Kraeutler, and Kraeutler shall serve
Meridian, on the terms and conditions set forth herein.
2. Term. Subject to the provisions for earlier termination as
hereinafter provided, Kraeutler shall be employed for thirty-six months commencing on the
date hereof (the “Initial Term”). The Agreement shall have a three year evergreen term.
Accordingly, the Agreement shall automatically be extended daily for an additional one day period
until a date thirty-six months after either party gives the other written notice of its intent to
stop the automatic daily extension. The Initial Term together with any extensions
shall hereinafter be referred to as the “Term.”
3. Position and Duties; Place of Performance.
3.1 Kraeutler shall serve as Chief Executive Officer of Meridian
and shall perform all duties customarily
attendant to that position and shall include those duties reasonably assigned to
Kraeutler from time-to-time by the Board of Directors of Meridian.
3.2 Kraeutler shall devote substantially all of his working time and effort to Meridian
and shall not, without Meridian’s prior written consent, furnish like or similar services to
anyone else or engage directly or indirectly in any activity adverse to Meridian’s interests.
Kraeutler will promote and develop business opportunities relating to Meridian’s current and
anticipated future business that come to his attention in a manner consistent with
Kraeutler’s duties and Meridian’s best interests.
3.3 In connection with Kraeutler’s employment by Meridian, Kraeutler will be
based at the principal place of business of Meridian in Cincinnati, Ohio.
4. Compensation.
4.1 Base Salary. During the Term of Kraeutler’s employment with
Meridian, as compensation for Kraeutler’s services under this Agreement, Meridian agrees to
pay to Kraeutler an annual base salary (the “Base Salary”) of Five Hundred Twenty-Five
Thousand Dollars ($525,000). Meridian’s Board of Directors shall in good faith review the
Base Salary annually, taking into account changes in Kraeutler’s responsibilities, increases in
the cost of living, performance of Kraeutler, increases in salaries to other executives
of Meridian and other pertinent factors, and may, in its reasonable discretion,
increase the Base Salary. Any increase in the Base Salary shall not serve to limit or
reduce any other obligation to Kraeutler under this Agreement. The Base Salary shall not be
reduced without the express written consent of Kraeutler. The term Base Salary as
used in this Agreement shall refer to the Base Salary as so increased.
4.2 Annual Bonus. Kraeutler shall be eligible to receive an annual bonus
as established by the Board of Directors in addition to Base Salary.
4.3 Other Compensation. In addition to compensation specified in this
Agreement, Kraeutler shall be eligible to receive stock options and other compensation under
Meridian’s compensation plans and arrangements available from time to time to Meridian’s
officers. Meridian stock options, restricted stock and other incentive compensation
subject to vesting (Award), granted to Kraeutler shall vest according to the agreement entered
into with Kraeutler at the time of the grant of such Award; provided, however, that
the Award shall fully vest upon the happening of any of the following events:
Change of Control Event (as defined in Section 8.7) or termination of
Kraeutler’s employment without Cause (as defined in Section 7.3), due to death or
Disability (as defined in Section 7.2) or Kraeutler’s termination of employment for Good
Reason (as defined in Section 7.4).
5. Expense Reimbursement. Kraeutler shall be entitled to prompt reimbursement
by Meridian for all reasonable out-of-pocket expenses incurred by him in
performing services under this Agreement, upon submission of such accounts and records
as may be required under Meridian policy.
6. Other Benefits.
6.1 Benefit Plans and Programs. Kraeutler shall be entitled, at Meridian’s expense, to such
medical, dental, hospitalization, life insurance, pension plan, profit-sharing, employee
benefits and such other similar employment privileges and benefits or perquisites as
are afforded generally from time to time to other senior officers of Meridian.
6.2 Vacation. During the Term of Kraeutler’s employment with
Meridian, Kraeutler shall be entitled to paid vacation time in accordance with the
plans, practices, policies, and programs applicable to other senior officers of Meridian, but
in no event shall such vacation time be less than four weeks per year.
7. Termination of Employment. Notwithstanding the provisions of Section 2,
Kraeutler’s employment may be terminated under the following circumstances:
7.1 Death. Kraeutler’s employment is terminated upon his death.
7.2 Disability. Kraeutler’s employment may be terminated by Meridian due to illness or other physical or
mental disability of Kraeutler, resulting in his inability to perform substantially his
duties under this Agreement for a period of Ninety or more consecutive days or for
One Hundred Eighty days in the aggregate during any consecutive Twelve month period
(“Disability”).
7.3 Cause. Kraeutler’s employment may be terminated by Meridian
upon Notice of Termination to Kraeutler of action taken by the Board of
Directors of Meridian to discharge Kraeutler for Cause, which Notice of Termination
shall be delivered to Kraeutler within Ninety days after the Board of Directors has
both (x) knowledge of the conduct or event allegedly constituting Cause and (y)
reason to believe that such conduct or event constitutes grounds to terminate
Kraeutler for Cause. As used herein, “Notice of Termination” means a resolution duly
adopted by the affirmative vote of not less than a simple majority of the members of the Board of
Directors of Meridian, excluding Kraeutler, at a meeting called for the purpose of
determining that Kraeutler engaged in conduct that constitutes Cause (and at which
Kraeutler had a reasonable opportunity, together with his counsel, to be heard before
the Board of Directors prior to such vote). For purposes of this Agreement,
Meridian shall have “Cause” to terminate Kraeutler’s employment upon:
(i) an intentional act of fraud, embezzlement or theft in the course of
Kraeutler’s employment with Meridian resulting in material harm to Meridian; or
(ii) intentional wrongful damage to material assets of Meridian.
Any act or omission by Kraeutler shall be deemed “intentional” only if done, or omitted to be
done, by Kraeutler not in good faith and without the reasonable belief that his action or
omission was in or not opposed to the best interests of Meridian. Failure to meet
performance standards or objectives set by Meridian shall not constitute “Cause” for
purposes of this Agreement.
7.4 Good Reason. Kraeutler’s employment may be terminated by
Kraeutler for Good Reason. For purposes of this Agreement, “Good Reason” shall
mean (i) the assignment to Kraeutler of any duties materially inconsistent with
Kraeutler’s position (including, without limitation, status, offices, titles and
reporting requirements), authority, duties or responsibilities as contemplated by this
Agreement, or any other action by Meridian that results in a material diminution in such
position, authority, duties or responsibilities, excluding for this purpose an action not
taken in bad faith and that is remedied by Meridian within Ten days after receipt
of written notice thereof given by Kraeutler, provided that repeated instances of such action
shall constitute the bad faith of Meridian; (ii) a 5% or more reduction in Kraeutler’s Base
Salary or other benefits under this Agreement; (iii) the relocation of Meridian’s principal
offices to a location more than Fifty miles from the current location of such offices; (iv) any
material failure by Meridian to comply with any of the provisions of this Agreement, other than
a failure not occurring in bad faith and which is remedied by Meridian within Ten
days after receipt of written notice thereof given by Kraeutler, provided that
repeated failures shall constitute the bad faith of Meridian; or (v) removal of
Kraeutler as Chief Executive Officer, other than for Cause.
8. Compensation Upon Termination.
8.1 If Kraeutler’s employment is terminated voluntarily without Good Reason, terminated as a result of
Kraeutler’s death, or is terminated by Meridian for Cause, Kraeutler, or his estate, shall be
entitled to:
(i) any Base Salary earned but not yet paid;
(ii) any bonus awarded pursuant to Section 4.2 of this Agreement but not yet paid;
(iii) upon Kraeutler’s death, all or a portion of the Performance Bonus that he would have
received pursuant to Section 4.2 (assuming that Kraeutler and/or Meridian achieves the
goals necessary to receive any level of bonus potential for that year) for the year
in which the termination occurred (pro rata, according to the number of days Kraeutler
was employed by Meridian during such year) payable in a lump sum.
(iv) reimbursement in accordance with this Agreement of any reasonable business
expense incurred by Kraeutler but not yet paid; and
(v) other benefits accrued and earned by Kraeutler through the date of
his death or termination in accordance with applicable plans and programs of Meridian.
8.2 If Kraeutler’s employment is terminated as a result of Kraeutler’s Disability,
Kraeutler shall be entitled to receive on an annual basis until Kraeutler reaches age
sixty-five the full amount of Kraeutler’s Base Salary plus Performance Bonus and group
health and life insurance benefits until Kraeutler reaches age 65 at the same level that
Kraeutler was receiving such benefits at the date of termination. Compensation paid shall be
prorated during periods of less than one year. The amount of annual Base Salary
plus Performance Bonus shall be computed by averaging the Base Salary plus Performance Bonus
earned by Kraeutler during the preceding three fiscal years of Meridian.
8.3 If (a) Kraeutler’s employment is terminated by Meridian without Cause, (b)
Kraeutler terminates his employment with Meridian for Good Reason or (c) Kraeutler’s employment
is terminated for any reason (with or without Cause or voluntary or involuntary) upon or within
ninety days of a Change of Control Event (as defined below), Kraeutler shall be entitled to:
(i) (A) any Base Salary earned but not yet paid, plus (B) three times his Base
Salary (computed as the average annual Base Salary of Kraeutler for the preceding thirty-six
months).
(ii) any bonuses awarded pursuant to Section 4.2 of this Agreement but not yet
paid and three times the average annual Performance Bonus received by Kraeutler for the
preceding thirty-six months.
(iii) continued participation in all employee benefit plans and/or programs at
Meridian’s expense in which he was participating on the date of his termination of
employment for a period equal to the lesser of three years and the date that Kraeutler is
employed at another location.
(iv) reimbursement in accordance with this Agreement of any business expenses
incurred by Kraeutler but not yet paid to him on the date of his termination of employment.
(v) engagement, for a three month period, by Meridian on Kraeutler’s
behalf of a recognized job recruitment agency for the purpose of locating subsequent
employment for Kraeutler in a position of equal rank to Kraeutler’s position with Meridian.
(vi) full vesting in Kraeutler’s Supplemental Income Agreement as if Kraeutler had
reached age sixty-two and all premiums paid and full vesting in Kraeutler’s options to purchase
Meridian stock.
8.4 Unless otherwise indicated, any payments payable under this Section 8
shall be paid in a lump sum payment as soon as practical after Kraeutler’s
termination of employment but in any event no later than thirty days thereafter.
8.5 If, under the terms of any employee benefit plan referred to in subsection 8.3(iii)
above, Kraeutler may not continue his participation, he shall be provided with the
after-tax economic equivalent of the benefits provided under any plan in which he was
previously eligible to participate for the period specified in subsection 8.3(iii) above. The
economic equivalent of any benefit foregone shall be deemed to be the cost that would
be incurred by Kraeutler in obtaining such benefit.
8.6 Any amounts due under this Section 8 are in the nature of severance
payments or liquidated damages, or both, and shall fully compensate Kraeutler and his
dependents or beneficiaries, as the case may be, for any and all direct damages and
consequential damages that any of them may suffer as a result of termination of
Kraeutler’s employment in breach of this Agreement, and they are not in the nature of a penalty.
Upon termination of Kraeutler’s employment for any reason other than by Meridian for
Cause or by Kraeutler for Good Reason, Kraeutler and Meridian will, at the option of
Kraeutler, execute and deliver to each other a general release releasing the other and in
the case of Meridian its officers, directors, employees, agents, trustees, parents, subsidiaries,
predecessors, and affiliates (the “Releasees”) from all causes of action, claims, or demands that
either party may then have or have had against the Releasees based on any matter or thing,
including but not limited to Kraeutler’s employment with Meridian or the termination of
his employment (but not the obligations under this Agreement that continue after the date
on which Kraeutler’s employment terminates). The execution of this release shall be a
condition to the receipt by Kraeutler of the payments and benefits described in this
Section 8 except that the execution of this release shall not be a condition for the
receipt by Kraeutler of base salary earned but not yet paid, bonuses awarded
pursuant to Section 4.2 of this Agreement but not yet paid and reimbursement of any
business expenses incurred by Kraeutler but not yet paid.
8.7 As used herein, a “Change of Control Event” means (i) the sale of all, or
substantially all of the assets of Meridian; (ii) a merger, or recapitalization, or
similar transactions which results in the shareholders of Meridian immediately prior to
such event owning less than 60% of the fair market value or the voting power of the
surviving entity ; (iii) the date during any 12-month period that majority of
Meridian’s Board of Directors is replaced by directors whose appointment is not endorsed by a
majority of the members of Meridian’s Board of Directors before the date of appointment
or election; or (iv) the acquisition, directly or indirectly, of the beneficial
ownership (within the meaning of that term as it is used in Section 13(d) of the
Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder) of Fifty
Percent or more of the outstanding voting securities of Meridian by any person, entity
or group; provided, however, that a Change in Control of Meridian shall not include the
purchase of additional securities of Meridian by any person in Control of Meridian as of
December 31, 2000. This definition shall not apply to the purchase of Shares by
underwriters in connection with a public offering of securities of Meridian, or the
purchase of shares of up to Twenty-Five Percent of any class of securities of Meridian by
a tax-qualified employee stock benefit plan. The term “Control” means (i) ownership or control
of more than 50% of the fair market value or voting power of the outstanding shares of any
class of voting securities of Meridian, directly or indirectly, or (ii) the ability,
in any manner, to elect a majority of the directors of Meridian. The term
“person” refers to an individual or a corporation, partnership, trust, association,
joint venture, pool, syndicate, sole proprietorship, unincorporated organization or any
other form of entity not listed.
9. Covenants and Confidential Information. Kraeutler and Meridian hereby
reaffirm the terms of that certain Non-Competition and Confidentiality Agreement by and
among Meridian and its affiliated companies and its subsidiaries and Kraeutler dated
October 8, 1992. Such agreement is hereby incorporated herein by reference.
10. Parachute Payment. If Kraeutler is liable for the payment of any excise
tax (the “Basic Excise Tax”) because of Section 4999 of the Internal Revenue Code of
1986, as amended (the “Code”), or any successor or similar provision, with respect to
any payments or benefits received or to be received from Meridian or any successor to
Meridian, whether provided under this Agreement or otherwise, Meridian shall pay
Kraeutler an amount (the “Special Reimbursement”) which, after payment by Kraeutler (or
on Kraeutler’s behalf) of any federal, state and local taxes applicable to the
payment, including, without limitation, any further excise tax under such Section 4999
of the Code, on, with respect to or resulting from the Special Reimbursement, equals
the net amounts of the Basic Excise Tax.
11. Assignability; Binding Nature. This Agreement shall be binding upon and
inure to the benefit of the Parties and their respective successors, heirs (in the case of
Kraeutler) and assigns.
12. Entire Agreement. Except to the extent otherwise provided herein, this
Agreement contains the entire understanding and agreement between the Parties concerning the
subject matter hereof and supersedes any prior agreements, whether written or oral, between the
Parties concerning the subject matter hereof.
13. Amendment or Waiver. No provision in this Agreement may be amended
unless such amendment is agreed to in writing and signed by both Kraeutler and an
authorized officer of Meridian. No waiver by either Party of any breach by the other Party
of any condition or provision contained in this Agreement to be performed by such other Party
shall be deemed a waiver of a similar or dissimilar condition or provision at the same or any
prior or subsequent time. Any waiver must be in writing and signed by Kraeutler or
an authorized officer of Meridian, as the case may be.
14. Severability. If any provision or portion of this Agreement
shall be determined to be invalid or unenforceable for any reason, in whole or in part, the
remaining provisions of this Agreement shall be unaffected thereby and shall remain in full force
and effect to the fullest extent permitted by law.
15. Survivorship. The respective rights and obligations of the
Parties hereunder shall survive any termination of Kraeutler’s employment with
Meridian to the extent necessary to the intended preservation of such rights and
obligations as described in this Agreement.
16. Governing Law. This Agreement shall be governed by and construed and
interpreted in accordance with the internal substantive laws of Ohio, without reference to
principles of conflict of laws.
17. Notices. Any notice given to either Party shall be in writing
and shall be deemed to have been given when delivered personally or One day after
having been sent by overnight courier service or Three days after having been sent by
certified or registered mail, postage prepaid, return receipt requested, duly addressed
to the Party concerned at the address indicated below or to such changed address as such Party
may subsequently give such notice of:
If to Meridian or the Board:
|
Meridian Bioscience, Inc. | |
| 0000 Xxxxx Xxxxx Xxxxx | ||
| Xxxxxxxxxx, Xxxx 00000 | ||
If to Kraeutler:
|
Xxxx X. Xxxxxxxxx | |
| Cincinnati, Ohio |
18. Headings. The headings of the sections contained in this Agreement are for convenience only and shall
not be deemed to control or affect the meaning or construction of any provision of this Agreement.
19. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which together will
constitute one and the same instrument.
IN WITNESS WHEREOF, Kraeutler and Meridian have executed this Agreement as of the
date and year first above written.
| MERIDIAN BIOSCIENCE, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| XXXX X. XXXXXXXXX | ||||
