Exhibit 10.23
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") dated February 15, 2001 between
Meridian Bioscience, Inc., an Ohio corporation ("Meridian") and Xxxx X.
Xxxxxxxxx, who resides at 0000 Xxxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxx 00000
("Kraeutler").
W I T N E S S E T H :
WHEREAS, Meridian and Kraeutler desire to enter into an employment
arrangement; 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
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serve Meridian, on the terms and conditions set forth herein.
2. Term. Subject to the provisions for earlier termination as
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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.
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3.1 Kraeutler shall serve as President 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.
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4.1 Base Salary. During the Term of Kraeutler's employment with
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Meridian, as compensation for Kraeutler's services under this Agreement,
Meridian agrees to pay to Kraeutler an annual base salary (the "Base
Salary") of Two Hundred Eighty Thousand Seven Hundred Dollars. 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
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bonus as established by the Board of Directors in addition to Base Salary.
4.3 Other Compensation. In addition to compensation specified in
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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
granted to Kraeutler shall vest according to the option agreement entered
into with Kraeutler at the time of the grant of such options; provided,
however, that the options 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
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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.
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6.1 Benefit Plans and Programs. Kraeutler shall be entitled, at
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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
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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
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2, Kraeutler's employment may be terminated under the following circumstances:
7.1 Death. Kraeutler's employment is terminated upon his
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death.
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7.2 Disability. Kraeutler's employment may be terminated by
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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
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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
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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
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
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that repeated failures shall constitute the bad faith of Meridian; or (v)
removal of Kraeutler as President, other than for Cause.
8. Compensation Upon Termination.
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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).
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(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 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
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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
voting power of the surviving entity ; (iii) during any period of One year
after January 1, 2001, individuals who at the beginning of such period
constitute the Board of Directors and any new director whose nomination by
the Board for election by Meridian's shareholders was approved by a vote of
at least two-thirds of the Directors then still in office who either were
Directors at the beginning of the period or whose election or nomination
for election was previously so approved, cease for any reason to constitute
a majority thereof; 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, control or
power to vote Fifty Percent or more 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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxx 00000
18. Headings. The headings of the sections contained in this Agreement
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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
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counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
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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
ADDENDUM TO EMPLOYMENT AGREEMENT
The parties acknowledge that the reference to a Supplemental Income Agreement
in Section 8.3(vi) of the Employment Agreement dated February 15, 2001 between
Meridian Bioscience, Inc. and Xxxx X. Xxxxxxxxx should have and does in fact
refer to a Salary Continuation Agreement dated January 19, 1995, as the same may
have in the past and be in the future amended from time to time.
IN WITNESS WHEREOF, the parties have executed this Addendum this 24th day of
April, 2001.
MERIDIAN BIOSCIENCE, INC.
BY:
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Xxxxxxx X. Xxxxx
Chief Executive Officer
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Xxxx X. Xxxxxxxxx
