SALARY CONTINUATION AGREEMENT
Exhibit 10.4
This Salary Continuation Agreement (the “Agreement”) is dated August 3, 2011 between
Meridian Bioscience, Inc., an Ohio Corporation (the “Corporation”) and Xxxx X. Xxxxxxxxx, Chief
Executive Officer (“Executive”).
WITNESSETH:
WHEREAS, the Corporation and Executive wish to amend a salary continuation agreement dated January
19, 1995, and previously amended on April 24, 2001, and further amended on December 29, 2008 to be
compliant with Section 409A of the Internal Revenue Code, as amended;
WHEREAS, Executive is a Specified Employee as defined in Article I below;
WHEREAS, it is the consensus of the Board of Directors that Executive’s services have been of
exceptional merit, in excess of the compensation paid and an invaluable contribution to the profits
and position of the Corporation in its field of activity;
WHEREAS, the Board of Directors further believes that Executive’s experience, knowledge of
corporate affairs, reputation and industry contacts are of such value and his continued services so
essential to Corporation’s future growth and profits that it would suffer severe financial loss
should Executive terminate his services; and
WHEREAS, it is the desire of the Corporation and the Executive to enter into this Agreement under
which the Corporation will agree to make certain payments to Executive upon his retirement or
disability and, alternatively, to his beneficiaries in the event of his premature death while
employed by the Corporation.
NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained, the
Corporation and the Executive, agree as follows:
ARTICLE I. — DEFINITIONS
| A. | Effective Date |
The effective date of this Agreement shall be January 19, 1995.
| B. | Retirement Date |
The Retirement Date for purposes of this Agreement and assuming the Executive has
reached the age of 62, shall mean the first day of the calendar month following the
Executive’s seperation from service with the Corporation.
| X. | Xxxxxxxxx Benefits |
Severance Benefits under this Agreement shall mean those benefits to which the
Executive is entitled in the event he is discharged by the Corporation without
cause. Any dispute as to determination of “ cause” shall be subject to the terms of
Article VI.B., “Claims Procedure”.
| D. | Termination of Service |
Termination of Service shall mean the Corporation’s discharge of the Executive for
cause.
| E. | Specified Employee |
Specified Employee shall have the meaning defined in IRC Section 409A, as amended.
ARTICLE II. — EMPLOYMENT
| A. | Employment |
Corporation agrees to employ Executive in such capacity as the Corporation may from
time to time determine with such duties, responsibilities and compensation as
determined by the Board of Directors.
Executive agrees to remain in the Corporation’s employment; to devote his full time
and attention exclusively to the business of the Corporation and to use his best
efforts to provide faithful and satisfactory service to the Corporation.
Employment services shall include temporary disability not to exceed three months
and “leaves of absence” specifically granted Executive by the Board of Directors.
| B. | No Employment Agreement Created |
No provision of this Agreement shall be deemed to restrict or limit any existing
employment agreement by and between the Corporation and the Executive nor shall any
conditions herein create specific employment rights to the Executive nor limit the
right of the Corporation to discharge
the Executive with or without cause. In a similar fashion, no provision shall limit
the Executive’s rights to voluntarily sever his employment at any time.
ARTICLE III. — BENEFITS
The following benefits provided by the Corporation to the Executive are in the nature of a
fringe benefit and shall in no event be construed to affect nor limit the Executive’s
current or prospective salary increases, cash bonuses or profit-sharing distributions or
credits. All benefits paid pursuant to the terms of this Agreement are subject to applicable
federal, state and local withholding and income taxes.
| A. | Retirement Benefits |
The Executive shall be entitled to receive $600,000 from the Corporation through 120
monthly payments of $5,000 each, beginning on the first day of the seventh month
following the Executive’s “Retirement Date,” where the Executive shall receive in a
single sum the first seven months of such payments. Thereafter, commencing on the
first day of the eighth month following the Executive’s Retirement Date, the
payments shall continue for a period of 113 months.
In the event that the Executive should die following his Retirement Date but before
the expiration of 120 months, the unpaid balance of such monthly payments shall be
commuted at 8% and paid in a single sum to the beneficiary selected by the Executive
in the Beneficiary Designation Form provided by the Corporation. In the absence of
or failure of the Executive to designate a beneficiary, the unpaid balance of such
monthly payments shall be commuted at 8% and paid in a single sum to the Executive’s
estate. For purposes of this paragraph, the single sum amount shall be paid to the
beneficiary selected by the Executive, or paid to the Executive’s estate, as the
case may be, on the first day of the first month following the month of death.
| B. | Benefits in the Event of Discharge by the Corporation Without Cause (Severance
Benefits) |
If Executive is discharged without cause, Executive shall be entitled to receive
$5,000 monthly, for a continuous period of 120 months.
Such level of Severance Benefits shall commence on the first day of the seventh
month following separation of service, whereby the Executive shall receive in a
single sum the first seven months of such payments. Thereafter, commencing on the
first day of the eighth month following separation of service, such level
ofSeverance Benefits shall continue for a period of 113 months.
In the event that the Executive should die following such separation of service but
before the expiration of the 120 months, the unpaid balance of such monthly payments
shall be commuted at 8% and paid in a single sum to the beneficiary selected by the
Executive in the Beneficiary Designation Form provided by the Corporation. In the
absence or failure of the Executive to designate a beneficiary, the unpaid balance
of such monthly payments shall be commuted at 8% and paid in a single sum to the
Executive’s estate. For purposes of this paragraph, the single sum amount will be
paid to the beneficiary selected by the Executive, or paid to the Executive’s
estate, as the case may be, on the first day of the first month following the month
of death.
| C. | Termination of Service for Cause |
Should Executive be discharged for cause, all Executive’s benefits under this
Agreement shall be forfeited and this Agreement shall become null and void. If a
dispute arises as to discharge “for cause”, such dispute shall be resolved as set
forth in Article VI. B.
| D. | Death Benefit Prior to Retirement |
Should the Executive die before the Retirement Date, the Corporation agrees to pay
to the Executive’s designated beneficiary in the Beneficiary Designation Form, or in
the absence or failure of the Executive to designate a beneficiary, to the
Executive’s estate, a single sum of $350,000 on the first day of the first month
following the Executive’s death. If the provisions of Article III. B. are in effect,
this provision is null and void.
ARTICLE IV. — RESTRICTIONS UPON FUNDING
Corporation shall have no obligation to set aside, earmark or entrust any fund or money with
which to pay its obligations under this Agreement. The Executive, his beneficiaries or any
successor in interest to him shall be and remain simply a general creditor of the
Corporation in the same manner as any other creditor having a general claim for matured and
unpaid compensation.
The Corporation reserves the absolute right, in its sole discretion, to either fund the
obligations undertaken by this Agreement or to refrain from funding the same and to
determine the extent nature, and method of such funding.
Should the Corporation elect to fund this Agreement, in whole or in part, through the
purchase of life insurance, mutual funds, disability policies or annuities, the Corporation
reserves the absolute right, in its sole discretion, to terminate such funding at any time,
in whole or in part. At no time shall Executive be deemed to
have any lien nor right, title or interest in or to any specific funding investment or to
any assets of the Corporation.
If the Corporation elects to invest in a life insurance, disability or annuity policy upon
the life of Executive, then Executive shall assist the Corporation by freely submitting to a
physical exam and supplying such additional information necessary to obtain such insurance
or annuities.
ARTICLE V. — MISCELLANEOUS
| A. | Alienability and Assignment Prohibition |
Except to the extent provided below, neither Executive, his widow nor any other
beneficiary under this Agreement shall have any power or right to transfer, assign,
anticipate, hypothecate, mortgage, commute, modify or otherwise encumber in advance
any of the benefits payable hereunder nor shall any of said benefits be subject to
seizure for the payment of any debts, judgments, alimony or separate maintenance
owed by the Executive or his beneficiary, nor be transferable by operation of law in
the event of bankruptcy, insolvency or otherwise. In the event Executive or any
beneficiary attempts assignment, commutation, hypothecation, transfer or disposal of
the benefits hereunder, the Corporation’s liabilities shall forthwith cease and
terminate. Notwithstanding the preceding prohibition, in the event Executive and his
spouse divorce, the value of the benefits payable hereunder may be subject to the
division for the benefit of Executive’s spouse pursuant to a divorce decree or other
similar domestic relations order.
| B. | Binding Obligation of Corporation and Any Successor in Interest |
This Agreement shall be binding upon the parties hereto, their successors,
beneficiaries, heirs and personal representatives.
| C. | Amendment and Revocation |
It is agreed by and between the parties hereto that, during the lifetime of the
Executive, this Agreement may be amended or revoked at any time or times, in whole
or in part, by the mutual written assent of the Executive and the Corporation. For
any benefits not yet accrued pursuant to Article III. B., the Corporation shall have
the sole discretion to amend or revoke this Agreement at any time or times, in whole
or in part, by a written amendment. For purposes hereof, benefits shall be
considered to have accrued only to the extent of the Executive’s entitlement under
Article III. B. determined as if the Executive is discharged without cause as of the
date of the amendment.
| D. | Gender |
Whenever in this Agreement words are used in the masculine or neuter gender, they
shall be read and construed as in the masculine, feminine or neuter gender, whenever
they should so apply.
| E. | Effect on Other Corporation Benefit Plans |
Nothing contained in this Agreement shall affect the right of the Executive to
participate in or be covered by any qualified or non-qualified pension, profit
sharing, group, bonus or other supplemental compensation or fringe benefit plan
constituting a part of Corporation’s existing or future compensation structure.
| F. | Non-compete Agreement |
In the event the Executive violates any non-competition and confidentiality
agreement (or similar agreement) with the Corporation, determined in the sole and
absolute discretion of the Plan Administrator, no further benefits shall be payable
pursuant to this Agreement. This provision is in addition to any remedies the
Corporation might otherwise have for such a violation and does not otherwise modify
any such agreement.
| G. | Headings |
Headings and Subheadings in this Agreement are inserted for reference and
convenience only and shall not be deemed a part of this Agreement.
| H. | Applicable Law |
The validity and interpretation of this Agreement shall be governed by the laws of
the State of Ohio.
ARTICLE VI. — ERISA PROVISIONS
| A. | Named Fiduciary and Plan Administrator |
The “Named Fiduciary and Plan Administrator” of this plan shall be the Compensation
Committee of the Board of Directors of the Corporation. The Named Fiduciary and Plan
Administrator shall be responsible for the management, control and administration of
the Salary Continuation Agreement as established herein. The Named Fiduciary and
Plan Administrator may delegate to others certain aspects of the management and
operation responsibilities of the plan including the employment of advisors and the
delegation of ministerial duties to qualified individuals. The Named Fiduciary and
Plan Administrator shall have all powers
necessary to discharge its duties under the Agreement, including the sole and
absolute authority to interpret and construe the terms and provisions of this
Agreement and to determine eligibility for benefits hereunder.
| B. | Claims Procedure |
In the event that benefits under this Agreement are not paid to the Executive (or to
his beneficiary in the case of the Executive’s death) and such claimants feel they
are entitled to receive such benefits, then a written claim must be made to the
Named Fiduciary and Plan Administrator named above within 60 days from the date
payments are refused. The Named Fiduciary and Plan Administrator shall review the
written claim and if the claim is denied, in whole or in part, shall provide in
writing within 90 days of receipt of such claim, the specific reasons for such
denial, reference to the provisions of this Agreement upon which the denial is based
and any additional material or information necessary to perfect the claim. Such
written notice shall further indicate the additional steps to be taken by claimants
if a further review of the claim denial is desired. A claim shall be deemed denied
if the Named Fiduciary and Plan Administrator fails to take any action within the
aforesaid 90-day period.
If claimants desire a second review, they shall notify the Named Fiduciary and Plan
Administrator in writing within 60 days of the first claim denial. Claimants may
review the Agreement or any documents relating thereto and submit any written issues
and comments they may feel appropriate. In its sole discretion, the Named Fiduciary
and Plan Administrator shall then review the second claim and provide a written
decision within 60 days of receipt of such claim. This decision shall likewise state
the specific reasons for the decision and shall include reference to specific
provisions of the Agreement upon which the decision is based. This decision of the
Named Fiduciary and Plan Administrator shall be binding and conclusive upon all
parties; and may be overturned by a court of competent jurisdiction only upon a
finding that the decision was arbitrary and capricious.
IN WITNESS WHEREOF, the parties hereto acknowledge that each has carefully read this Agreement
and executed the original thereof on the 3 day of August, 2011 and that, upon execution,
each has received a conforming copy.
/s/ Xxxxxx X. Xxxxxx
|
/s/ Xxxx X. Xxxxxxxxx
|
|||||
/s/ Xxxxxxx Xxxxxxxx
|
/s/ Xxxxxxx Xxxxx
|
