(EXHIBIT 10-5)
EMPLOYMENT AND CONSULTING AGREEMENT
between
NEW BRUNSWICK SCIENTIFIC CO., INC.
and
XXXXX XXXXXXXX
January 1, 1999
EMPLOYMENT AND CONSULTING AGREEMENT
AGREEMENT, made as of the 1st day of January 1999 between NEW
BRUNSWICK SCIENTIFIC, CO., INC., a New Jersey corporation, with its principal
place of business located at 00 Xxxxxxxx Xxxx, X.X. Xxx 0000, Xxxxxx, Xxx
Xxxxxx, 00000-0000 (referred to in this Agreement as the "Company") and XXXXX
XXXXXXXX, residing in Highland Park, New Jersey (referred to in this
Agreement as "Xxxxxxxx").
W I T N E S S E T H :
WHEREAS, the Company currently employs Xxxxxxxx under an Employment
Agreement dated January 1, 1996 which expired December 31, 1998 and
WHEREAS, the Company desires to continue to retain Xxxxxxxx'x
services as an officer of the Company upon the terms and conditions set forth
in this Agreement, and Xxxxxxxx desires to continue such employment, and
WHEREAS, the parties desire to provide for the terms and conditions
upon which the Company may secure the services of Xxxxxxxx as a consultant to
the Company following the expiration of Xxxxxxxx'x term of service as an
employee of the Company,
NOW, THEREFORE, in consideration of the promises and mutual
covenants herein contained, the parties agree as follows:
ARTICLE 1
EMPLOYMENT
1.1 Employment. The Company hereby employs Xxxxxxxx and Xxxxxxxx
hereby accepts such employment. Xxxxxxxx will devote his best efforts and
substantially all his full business time and attention to performing such
duties.
1.2 Consultant. Following the expiration of Xxxxxxxx'x period of
service as an employee of the Company, as provided in Section 4.1 below,
Xxxxxxxx agrees to serve as a consultant and independent contractor to the
Company, rendering such advice and assistance to the Company as they may
mutually agree. Xxxxxxxx agrees to render services as reasonably requested by
the Company on 10-days' advance notice, written or oral, subject to a maximum
of 50 full or partial days of service during each twelve-month period
following the commencement of his services as a consultant under this
Agreement.
1.3 Performance of Services. Xxxxxxxx shall observe and comply with
such rules, regulations and policies as may be determined from time to time
by the Board of Directors of the Company (the "Board") in writing, within the
scope of his duties as an employee or consultant.
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ARTICLE 2
COMPENSATION
2.1 Salary. For his services under this Agreement as an employee of the
Company, Xxxxxxxx shall receive a salary, payable in such regular intervals as
shall be determined by the Company, which shall be at the rate of Two Hundred
and Thirty-Five Thousand Five Hundred Dollars ($235,500.00).
2.2 Salary Increases. The rate of salary provided for in Section 2.1
shall be reviewed by the Board not less often than annually and may be increased
from time to time and in such amount as the Board, in its discretion, may
determine, on the basis of the same criteria used for other executive employees
of the Company.
2.3 Discretionary Bonus. The Company may, but is not required to, pay
Xxxxxxxx such bonus or bonuses as the Board may from time to time determine,
consistent with the bonuses paid to other executive employees of the Company,
and in addition to such bonuses as may be payable to Xxxxxxxx pursuant to other
bonus plans or arrangements. During his period of service as an employee,
Xxxxxxxx shall be entitled to participate in bonus programs or arrangements
generally available for executive employees of the Company, but the Board
retains full discretion as to the amount of the bonus, if any, to be paid to
Xxxxxxxx.
2.4 Consulting Payments. In exchange for his services as a consultant
to the Company pursuant to Section 1.2, Xxxxxxxx shall be paid at the rate of
One Hundred Thousand Dollars ($100,000.00) per year. Payments shall be made in
regular equal installments as the Company and Xxxxxxxx may agree, but no less
frequently than monthly.
2.5 Withholding. All payments of salary, bonuses and other compensation
for services pursuant to this Agreement shall be subject to the customary
withholding of taxes as required by law.
ARTICLE 3
FRINGE BENEFITS
3.1 Participation in Plans. (a) During his period of service as an
employee of the Company, Xxxxxxxx shall be entitled to all additional fringe
benefits, including, but not limited to, health and life insurance programs
which may be generally available to other executive employees of the Company,
subject to Section 3.1(c).
(b) Following termination of Xxxxxxxx'x services to the
Company as an employee, for any reason other than a termination pursuant to
Section 4.3(b), the Company shall pay all premiums necessary to continue the
medical and life insurance coverage previously provided to Xxxxxxxx and his
spouse under Section 3.1(a), or other comparable coverage, until the death of
Xxxxxxxx and his spouse. However, following his period of service as an employee
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of the Company, in place of the health insurance plan generally available for
executives employees of the Company, the Company shall thereafter provide for
Xxxxxxxx (and for his spouse when she attains the age of 65) a policy of medical
insurance that offers coverage as a supplement to Medicare benefits. The basic
terms of such policy shall provide, in conjunction with Medicare, benefits that
are comparable to the coverage previously provided to Xxxxxxxx as an executive
employee of the Company.
(c) All matters of eligibility for coverage of benefits under
any plan or plans of health, hospitalization, life or other insurance provided
by the Company shall be determined in accordance with the provisions of the
insurance policies. The Company shall not be liable to Xxxxxxxx, or his spouse
or beneficiaries or other successors, for any amount payable or claimed to be
payable under any plan of insurance. So long as Xxxxxxxx beneficially holds 10%
or more of the Common stock of the Company, he shall not be eligible to
participate in any plan of the Company involving the Common stock or any
derivative security of the Company (although otherwise eligible) where his
participation in that plan would prevent the Common stock or derivative
securities issued under that plan from qualifying for exemption under Section
16(b) of the Securities Exchange Act of 1934, as amended.
3.2 Holidays and Sick Leave. During his period of service as an
employee of the Company, Xxxxxxxx shall be entitled to such paid holidays and
sick leave, and other benefit programs, as and to the extent that the Company
generally provides the same from time to time to other executive employees.
3.3 Vacation and Professional Leave. During his period of service as an
employee of the Company, Xxxxxxxx shall be entitled to vacation and additional
leave to attend conventions and professional meetings each year during this
Agreement as permitted under the employment policies of the Company in effect at
such time.
3.4 Business Expenses. The parties acknowledge that Xxxxxxxx shall
incur, from time to time as either an employee or as a consultant, for the
benefit of the Company and in furtherance of the Company's business, various
business expenses. The Company agrees that it shall either pay such expenses
directly, advance sums to Xxxxxxxx to be used for payment of such expenses, or
reimburse Xxxxxxxx for such expenses incurred by him. Xxxxxxxx agrees to submit
to the Company such documentation as may be reasonably necessary to substantiate
that all expenses paid or reimbursed hereunder were reasonably related to the
performance of his duties as an employee or consultant.
3.5 Company Car. The Company recognizes that Xxxxxxxx, whether serving
as an employee or as a consultant, requires the use of an automobile in the
performance of his duties and therefore agrees to furnish an automobile to
Xxxxxxxx for his sole use. Title to such automobile shall at all times remain
with the Company. The automobile will be replaced upon request by Xxxxxxxx, but
not more frequently than every three (3) years. The Company shall pay for the
fuel, insurance, maintenance, and repair costs associated with said automobile,
except the cost of fuel consumed in driving the automobile for personal use.
Upon termination of this Agreement for any reason, the automobile shall be
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returned to the Company unless Xxxxxxxx elects, within thirty (30) days after
such termination, to purchase the automobile from the Company. Any purchase
pursuant to the preceding sentence shall be at book value unless a lesser price
is mutually agreed to and shall be completed within sixty (60) days after the
termination of this Agreement.
3.6 Split-Dollar Insurance Coverage. The Company and Xxxxxxxx are
currently parties to a split-dollar life insurance agreement, providing for the
division of rights and obligations in connection with a One Million Dollar
($1,000,000.00) life insurance policy on Xxxxxxxx'x life. The Company and
Xxxxxxxx hereby ratify that agreement and further provide that, following
termination of this Agreement and for remainder of Xxxxxxxx'x life, the Company
will continue to contribute the sum of Forty Thousand Dollars ($40,000.00) (or
the actual amount of the premiums, whichever is less) towards each annual
premium due under such policy, or replacement policy obtained by Xxxxxxxx. The
Company's contribution following the termination of this Agreement shall be
taken into account in determining the amount to which the Company is entitled to
receive from the policy proceeds upon Xxxxxxxx'x death. Except, as specifically
set forth in this Section 3.6, all matters regarding the insurance policy shall
be governed by the terms of the split-dollar life insurance agreement pertaining
to the policy.
ARTICLE 4
TERM AND TERMINATION OF EMPLOYMENT
4.1 Employment Term. The employment term of this Agreement shall be
three (3) years commencing on January 1, 1999 (the "Employment term"), unless
terminated prior to such date in accordance with the terms of this Agreement.
4.2 Consultant Term. Upon expiration of the three-year employment term
of this Agreement pursuant to Section 4.1, this Agreement shall continue for an
additional three-year period, during which time Xxxxxxxx shall serve as a
consultant to the Company, as provided in Article 1.2 above (the "Consultant
term"), unless this Agreement is terminated prior to such date in accordance
with the terms of this Agreement.
4.3 Termination. This Agreement shall terminate prior to the expiration
of its Employment or Consultant term upon occurrence of any one or more of the
following events:
(a) Mutual Agreement. The parties may mutually agree to
terminate this Agreement at any time.
(b) Termination for Cause. The Company may terminate this
Agreement for cause at any time. "Cause" shall include, but not be
limited to the following: any material violation of the terms of this
Agreement by Xxxxxxxx; conviction of Xxxxxxxx of any crime (or found
criminally liable for any fraud) against the Company or its property or
any crime involving moral turpitude or reasonably likely to bring
discredit upon the Company; material failure to perform or meet
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reasonable standards of performance established in writing by the Board
of Directors of the Company with respect to Xxxxxxxx'x position; and
any material violation of reasonable operating policy formally adopted
by the Company from time to time. The determination of whether Cause
exists shall be made in good faith by a majority vote of the entire
Board.
(c) Death of Xxxxxxxx. This Agreement shall immediately
terminate upon the death of Xxxxxxxx.
(d) Disability of Xxxxxxxx. In the event that Xxxxxxxx becomes
"disabled", as defined below, the Company shall have the option to
terminate this Agreement by giving 30-days' advance written notice to
Xxxxxxxx. For purposes of this Agreement, the term "disabled" or
"disability" shall mean the inability of Xxxxxxxx to perform his
regular duties for the Company for a period of six (6) consecutive
months, as reasonably determined by the Board, in accordance with
uniform rules consistently applied to all employees and supported by
the written opinion of at least one (1) physician. For purposes of this
Agreement, Xxxxxxxx shall first be deemed disabled on the date that is
six (6) months after the initial onset of his condition, as described
above.
(e) Termination of Consulting by Xxxxxxxx. At any time during
the Consultant term of this Agreement, Xxxxxxxx may terminate this
Agreement by written notice to the Company.
4.4 Termination Benefits. Following termination of this Agreement, the
Company shall make the following payments to Xxxxxxxx, as applicable, subject,
however, to Sections 2.6 and 4.5, and without limitation on Xxxxxxxx'x rights
and obligations, if any, arising other than under this Agreement:
(a) Accrued Compensation. Regardless of the reason for
termination of this Agreement, the Company shall pay, within a reasonable period
of time following such termination, all compensation payments (including accrued
and unused vacation compensation during the Employment term) and reimbursement
for expenses as may be due, accrued or payable as of the date of such
termination. Payments for Xxxxxxxx'x services as a consultant shall be deemed to
accrue on an equal daily basis throughout the year, regardless of the number of
days of consulting services actually rendered during the final partial year
prior to termination of this Agreement. Following termination of this Agreement,
Xxxxxxxx, or his successors, as the case may be, shall also be entitled to the
deferred compensation pursuant to Section 2.5 and entitled to fringe benefits as
expressly provided in Article 3 with regard to the period after termination of
this Agreement.
(b) Death Benefit. In the event that this Agreement is
terminated by reason of Xxxxxxxx'x death, the Company shall pay to Xxxxxxxx'x
beneficiary (as designated in writing by Xxxxxxxx and delivered to the Company
during the lifetime of Xxxxxxxx), or if no such beneficiary is so designated,
then to the personal representative of Xxxxxxxx'x estate, a death benefit equal
to the annual compensation (exclusive of fringe benefits under Article 3)
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payable by the Company to Xxxxxxxx at the time of his death. The payment by the
Company shall be made within forty-five (45) days of such termination of
employment.
(c) Disability Benefit. In the event that this Agreement is
terminated by reason of Xxxxxxxx'x disability, the Company shall pay to Xxxxxxxx
(or his personal representative) a disability benefit equal to the annual
compensation (exclusive of fringe benefits under Article 3) payable by the
Company to Xxxxxxxx at the time of such disability. The payment by the Company
shall be made within forty-five (45) days of such termination of employment.
4.5 Limit on Termination Payments. In no event shall the amounts
payable by the Company pursuant to Section 4.4 exceed the amounts that would be
deductible by the Company under the provisions of Section 280G of the Internal
Revenue Code of 1986, as amended. The amount deductible by the Company shall be
determined by the independent auditors regularly retained by the Company.
ARTICLE 5
MISCELLANEOUS
5.1 Assignment Prohibited. This Agreement is personal to Xxxxxxxx
hereto and he may not assign or delegate any of his rights or obligations
hereunder without first obtaining the written consent of the Company. The
Company may not assign this Agreement without the written consent of Xxxxxxxx,
except in connection with (i) a merger or consolidation of the Company (in which
case the merged or consolidated entity shall remain fully liable for its
obligations as the Company under this Agreement), or (ii) a transfer of this
Agreement to a subsidiary or affiliate, provided that the subsidiary or
affiliate continues the primary business of the Company, and further, provided
that, in the case of a transfer to a subsidiary or affiliate, the Company shall
remain liable for its obligations under this Agreement.
5.2 Amendments. No amendments or additions to this agreement shall be
binding unless in writing and signed by the party against whom enforcement of
such amendment of addition is sought.
5.3 Paragraph Headings. The paragraph headings used in this Agreement
are included solely for convenience and shall not affect or be used in
connection with the interpretation of this Agreement.
5.4 Legal Expenses of Enforcement. If either party commences a legal
action or other proceeding for enforcement of this Agreement, or because of an
alleged dispute, breach, default or misrepresentation in connection with any of
the provisions of this Agreement, the prevailing party shall be entitled to
reasonable attorneys' fees and other costs incurred in connection with that
action or proceeding, in addition to any other relief to which it may be
entitled.
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5.5 Severability. If any provision of this Agreement is declared
invalid by any tribunal, then such provision shall be deemed automatically
modified to conform to the requirements for validity as declared at such time,
and as so modified, shall be deemed a provision of this Agreement as though
originally included herein. In the event that the provision invalidated is of
such a nature that it cannot be so modified, the provision shall be deemed
deleted from this Agreement as though the provision had never been included
herein. In either case, the remaining provisions of this Agreement shall remain
in effect.
5.6 Arbitration. Any controversy, claim or dispute arising out of or
relating to this Agreement or its construction and interpretation shall be
settled by arbitration in accordance with the rules of the American Arbitration
Association, and judgment upon the award rendered in such arbitration may be
entered in any court having jurisdiction thereof. In addition, any controversy,
claim or dispute concerning the scope of this arbitration clause or whether a
particular dispute falls within this arbitration clause shall also be settled by
arbitration in accordance with the rules of the American Arbitration
Association.
5.7 Choice of Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New Jersey.
5.8 Other Agreements. This Agreement is not intended to and shall not
affect the rights and obligations of the Company or Xxxxxxxx under any other
agreement between them, pertaining to stock option rights, severance benefits,
or otherwise.
5.9 Notices. All notices required or permitted hereunder shall be in
writing and shall be delivered in person or sent by certified or registered
mail, return receipt requested, postage prepaid to each party at the address
first written above or at such other address as provided in writing.
5.10 Binding Effect. This Agreement shall be binding upon, and inure
to the benefit of, the parties, their heirs, successors and assigns.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
ATTEST: NEW BRUNSWICK SCIENTIFIC CO., INC.
[Corporate Seal]
By:
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Xxxx Xxxxxxx
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Secretary
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Witness Xxxxx Xxxxxxxx
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