SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
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NEW BRUNSWICK SCIENTIFIC CO., INC.
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(Name of Registrant as Specified in Its Charter)
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NEW BRUNSWICK SCIENTIFIC CO., INC.
--------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 28, 2002
--------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of New
Brunswick Scientific Co., Inc., a New Jersey corporation (the "Corporation"),
will be held at the Clarion Hotel, 2055 Lincoln Highway (Route 27), Edison,
New Jersey, on Tuesday, May 28, 2002 at 10:00 A.M. Eastern Daylight Saving
Time, for the following purposes:
1. To elect four Class III directors of the Corporation to terms
of three years.
2. To approve and adopt an amendment to the New Brunswick
Scientific Co., Inc. 2001 Nonqualified Stock Option Plan for
Officers and Key Employees increasing the number of authorized
shares by 200,000.
3. To transact such other business as may properly come before the
meeting and any and all adjournments thereof.
The Board of Directors has fixed the close of business on April 9, 2002, as
the record date for the determination of shareholders who are entitled to
notice of, and to vote at, the meeting. A copy of the Annual Report of the
Corporation for the year ended December 31, 2001 is being sent to you
herewith.
By Order of the Board of Directors
ADELE LAVENDER, Secretary
April 10, 2002
ALL SHAREHOLDERS ENTITLED TO VOTE AT THE MEETING ARE REQUESTED TO COMPLETE,
DATE, SIGN AND PROMPTLY RETURN THE ENCLOSED PROXY WHETHER OR NOT YOU PLAN TO
ATTEND THE MEETING. A RETURN ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN
THE UNITED STATES, IS ENCLOSED FOR THIS PURPOSE.
NEW BRUNSWICK SCIENTIFIC CO., INC.
44 Talmadge Road
Edison, New Jersey 08818
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PROXY STATEMENT
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ANNUAL MEETING OF SHAREHOLDERS
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors to be used at the Annual Meeting of
Shareholders of New Brunswick Scientific Co., Inc., a New Jersey corporation
(the "Corporation"), to be held at the Clarion Hotel, 2055 Lincoln Highway
(Route 27), Edison, New Jersey, on Tuesday, May 28, 2002 at 10:00 A.M.,
Eastern Daylight Saving Time. This Proxy Statement and enclosed form of proxy
are being sent to shareholders commencing on or about April 10, 2002.
You are requested to complete, date and sign the accompanying proxy and
return it promptly in the enclosed envelope. Proxies duly executed and
received in time for the meeting will be voted in accordance with the
directions thereon at the meeting. Such proxies may, nevertheless, be revoked
at any time prior to the voting thereof by filing a written notice of
revocation with the Secretary of the Corporation. Please note that mere
presence at the meeting will not be effective to revoke a proxy. If you attend
the meeting and wish to revoke your proxy, you still must deliver written
notice to the Secretary of the Corporation before the voting thereof.
The Board of Directors has fixed the close of business on April 9, 2002, as
the record date for the determination of shareholders who are entitled to
notice of, and to vote at, the meeting. As of the record date, the Corporation
had outstanding 6,922,479 shares of Common stock, the holders of which are
entitled to one vote per share.
ITEM 1. ELECTION OF DIRECTORS
The Corporation's Certificate of Incorporation provides for classification
of the Board of Directors into three classes with staggered terms of office.
In accordance with the Certificate of Incorporation, four directors designated
as Class III directors are to be elected at the 2002 Annual Meeting. The Class
III directors to be elected shall serve terms of three years.
Nominees for Directors
The persons named on the enclosed proxy will vote such proxy for the
nominees listed below and on the proxy except where authority has been
withheld as to a particular nominee or as to all such nominees. The Board of
Directors has no reason to believe that any of the nominees for the office of
director will not be available for election as a director. However, should any
of them become unwilling or unable to accept nomination for election, it is
intended that the individuals named in the enclosed proxy may vote for the
election of such other persons as the Board of Directors may nominate. A
majority of the votes cast by holders of Common stock is required for approval
of these proposals. Abstentions and broker non-votes are not counted as votes
cast on any matter to which they relate.
The following table presents the name, age and principal occupation of each
nominee and present director.
1
NOMINEES FOR TERMS EXPIRING AT THE 2005 ANNUAL MEETING (CLASS III)
First
Became a
Name Age Principal Occupation Director In
- ---- --- -------------------- -----------
David Freedman (1)(2) ................ 81 Chairman of the Board and Chief Executive Officer of the Corporation 1958
Kenneth Freedman (1) ................. 43 General Manager and Director/Treasurer of Auricle 1999
Communications
Dr. Jerome Birnbaum .................. 62 Co-founder and Director of Achillion Pharmaceuticals, Inc. and 2000
Pharmaceutical R&D Consultant
James T. Orcutt ...................... 44 President of the Corporation 2001
Terms Expiring at the 2003 Annual Meeting (Class I)
Peter Schkeeper ...................... 57 President of Schkeeper, Inc. 1999
Kiyoshi Masuda ....................... 77 President of American & Foreign Market Research, Inc.; 1980
President of FerriShield, Inc.
Ernest Gross ......................... 83 Attorney in Private Practice 1984
Terms Expiring at the 2004 Annual Meeting (Class II)
Sigmund Freedman (1)(2) .............. 85 Treasurer of the Corporation 1958
Daniel S. Van Riper .................. 61 Special Advisor, Sealed Air Corporation 2001
Dr. David Pramer ..................... 79 Executive Assistant for Research Policy 1962(3)
and Administration, Rutgers University
- ----------------
(1) Kenneth Freedman is the son of David Freedman and the nephew of Sigmund
Freedman.
(2) David and Sigmund Freedman are brothers.
(3) Dr. Pramer was previously a director of the Corporation from 1962 to 1976.
He was appointed a director again on April 11, 1989.
Business Experience of Directors
David Freedman serves as Chairman of the Corporation's Board of Directors, a
position he has held since the Corporation was incorporated in 1958. Mr.
Freedman previously served as President and Chief Executive Officer of the
Corporation until his resignation from that position on May 1, 1989. Mr.
Freedman was reappointed as Chief Executive Officer in 2000.
Kenneth Freedman has, since February 1992, been employed by Auricle
Communications, a not-for-profit corporation dedicated to radio programming.
From 1985 to 1991 he was the Station Manager of WFMU-FM in East Orange, New
Jersey.
Jerome Birnbaum, Ph.D. is a Co-founder and Director of Achillion
Pharmaceuticals, Inc., a start-up biotechnology company. Previously, Dr.
Birnbaum was employed by Merck and Co., Inc. from 1970-1987 in various
positions culminating as Vice President, Microbiology and Agricultural
Research. From 1987 until his retirement in January 2000 he was employed in
various positions by Bristol-Myers Squibb Company culminating as Senior Vice
President, Strategic R&D Operations.
James T. Orcutt was employed by the Corporation in May, 2000 as President of
the Life Science division and served in that capacity until his appointment as
President of the Corporation on September 10, 2001. Prior to joining the
Corporation, Mr. Orcutt spent 5 years as Senior Vice President of Sales,
Marketing and Development with Boekel Industries and 12 years with Barnstead/
Thermolyne in various sales and marketing management positions. Prior to his
employment with Barnstead/Thermolyne he was employed as a project engineer and
a field engineer.
2
Peter Schkeeper has, since January 1, 1993, been the President of Schkeeper
Inc., a professional engineering inspection services company. From 1972 to
1992 Mr. Schkeeper was employed by Valcor Engineering Corporation in a number
of different positions ending with division President.
Kiyoshi Masuda has been the owner and President of American & Foreign Market
Research, Inc. since 1958. From 1985 to 1994 he was President of Yano Research
Institute USA, Ltd. Since 1994 he has been President of FerriShield Inc.
Ernest Gross is an attorney-at-law who retired in 1984 from Rutgers
University where he had been a Professor and Associate Director of the
Institute of Management and Labor Relations from 1971 to 1983.
Sigmund Freedman has been Treasurer and a Director of the Corporation since
its incorporation in 1958. Mr. Freedman also served as Secretary of the
Corporation from 1958 to 1985.
Daniel S. Van Riper is a special advisor to management of Sealed Air
Corporation, a leading global manufacturer of a wide range of food, protective
and specialty packaging materials and systems. From July 1, 1998 until January
1, 2002, he was Senior Vice President and Chief Financial Officer of Sealed
Air. Prior to joining Sealed Air, Mr. Van Riper spent 36 years with KPMG LLP,
a major independent audit and accounting firm, including 26 years as a
partner.
David Pramer, Ph.D. has had a 50-year career at Rutgers University, New
Brunswick, New Jersey. Dr. Pramer had served as a Professor of Microbiology
and until 1994 he also served as Associate Vice President of the University
responsible for corporate liaison activities and transfer of University
research technology to government and industrial users. From 1980 to 1988, he
was the Director of the Waksman Institute of Microbiology, a research and
educational unit within the University. Dr. Pramer currently holds the
position of Executive Assistant for Research Policy and Administration at the
University.
Committees
The Board of Directors has an Audit Committee, consisting of Messrs. Van
Riper, Schkeeper and Gross, whose function is to meet with management and the
independent auditors on matters pertaining to the Company's financial
statements and internal accounting controls. This Committee met five times
during the year ended December 31, 2001. The Board has a Compensation
Committee which consists of Messrs. Masuda, Pramer, and Gross which met six
times during the year ended December 31, 2001. This Committee reviews the
Corporation's policies with respect to employment, pension benefits and stock
option plans and recommends modifications to such policies. The Board has an
Executive Committee consisting of Messrs. David Freedman, Schkeeper, Gross and
Pramer. This Committee handles certain matters that do not require action by
the full Board and represents the interests of the Board in connection with
matters arising between Board meetings. This Committee met four times during
the year ended December 31, 2001. The Board also has a nominating committee
consisting of Messrs. David Freedman, Schkeeper and Pramer which met one time
during the year ended December 31, 2001. This Committee acts as a screening
committee for candidates considered for election to the Board. In this
capacity it concerns itself with the composition of the Board with respect to
depth of experience, balance of professional interests, required expertise and
other factors and evaluates prospective nominees identified by the Committee
on its own initiative or referred to it by other Board members, management,
shareholders or external sources. Names of prospective candidates must be
submitted in writing to the Secretary of the Corporation by December 20, 2002
for referral to the Committee. Any shareholder who wishes to make a nomination
at an annual or special meeting for the election of directors must do so in
compliance with procedures set forth in the Corporation's By-Laws.
During the year ended December 31, 2001, there were five meetings of the
Board of Directors.
3
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information, as of April 9, 2002,
concerning the beneficial ownership of the Corporation's Common stock for (a)
each director (and nominee for director); (b) each of the named officers (the
"Named Executive Officers" as defined in the Executive Compensation section);
and (c) all directors and executive officers of the Corporation as a group.
Unless otherwise indicated, stock ownership includes sole voting power and
sole investment power.
Amount and
Name of Nature of
Beneficial Beneficial Percent of
Owner Ownership Class
----- --------- -----
David Freedman (1) .................................. 1,067,535(2)(3) 15.4%
Kenneth Freedman (1) ................................ 46,481(4) (4)
Dr. Jerome Birnbaum ................................. 8,250(4) (5)
James T. Orcutt ..................................... 8,711(6) (5)
Peter Schkeeper ..................................... 9,250(4) (5)
Kiyoshi Masuda ...................................... 78,139(4) 1.1%
Ernest Gross ........................................ 74,646(4)(7) 1.1%
Sigmund Freedman (1) ................................ 958,643(2) 13.8%
Daniel S. Van Riper ................................. 6,600(4) (5)
Dr. David Pramer .................................... 68,427(4)(8) (5)
Samuel Eichenbaum ................................... 46,472(4) (5)
Dr. Lee Eppstein .................................... 16,409(4) (5)
All directors and executive officers as a group ..... 2,389,543(2)(3) 34.5%
- ----------------
(1) Messrs. David and Sigmund Freedman are brothers, Kenneth Freedman is the
son and nephew of David and Sigmund Freedman, respectively. Although
neither David, Sigmund or Kenneth Freedman is the beneficial owner of the
stockholdings of any of the others, if David, Sigmund and Kenneth Freedman
choose to act in concert they would control 29.9% of the Common stock of
the Corporation including 2.2% attributable to shares which may be acquired
within 60 days under stock option plans.
(2) This figure includes shares which may be acquired within 60 days under the
1998 Stock Option Plan for 10% Shareholder-Directors as follows: David
Freedman -- 96,261 and Sigmund Freedman -- 49,511.
(3) This figure includes 149,422 shares owned by Mr. Freedman's wife directly
but does not include 65,359 shares owned by a trust for the benefit of Mr.
Freedman's wife. Mr. Freedman has neither voting nor investment control
over the shares held by the Trust.
(4) This figure includes respective shares which may be acquired within
60 days under stock option plans for nonemployee directors as follows:
Mr. Masuda -- 42,190, Mr. Gross -- 62,481; Dr. Pramer -- 50,592;
Mr. Schkeeper -- 8,250; Dr. Birnbaum -- 8,250; Mr. Van Riper -- 1,100; and
Kenneth Freedman -- 8,250.
(5) Less than 1 percent.
(6) This figure includes respective shares which may be acquired within 60 days
under the 1991 Nonqualified Stock Option Plan for Officers and Key
Employees as follows: Mr. Orcutt -- 4,400; Mr. Eichenbaum -- 21,062; and
Dr. Eppstein -- 7,686.
(7) This figure includes 1,689 shares owned by Mr. Gross' wife and 10,476
shares owned jointly by Mr. Gross and his wife.
(8) This figure includes 1,689 shares owned by Dr. Pramer's wife and 16,146
shares owned jointly by Dr. Pramer and his wife.
(9) This figure includes 360,033 shares which may be acquired by the officers
and directors as a group within 60 days under the 1991 Stock Option Plan
for Officers and Key Employees, the 1998 Stock Option Plan for 10%
Shareholder-Directors and the 1989 and 1999 Stock Option Plans for
Nonemployee Directors.
4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information, as of April 9, 2002,
concerning the only persons who, to the best of Management's knowledge, own
beneficially more than five percent (5%) of the Corporation's Common stock.
Unless otherwise indicated, stock ownership includes sole voting power and
sole investment power.
Name and Address of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership Class
---------------- -------------------- -----
David Freedman (1) 971,274(2)(3) 14.0%
44 Talmadge Road
Edison, New Jersey 08818
Sigmund Freedman (1) 909,112(3) 13.1%
44 Talmadge Road
Edison, New Jersey 08818
Dimensional Fund Advisors, Inc. 426,166 6.2%
1299 Ocean Avenue - 11th Floor
Santa Monica, California 90401
Royce & Associates, Inc. 433,777 6.3%
1414 Avenue of the Americas
New York, NY 10019
- ----------------
(1) Messrs. David and Sigmund Freedman are brothers. By virtue of their
stockholdings, they may be deemed to be "control persons" of the
Corporation. Although neither brother is the beneficial owner of the
stockholdings of the other, if David and Sigmund Freedman choose to act in
concert they would control 27.2% of the Common stock of the Corporation.
(2) This figure includes 149,422 shares owned by Mr. Freedman's wife directly
but does not include 65,359 shares owned by a trust for the benefit of Mr.
Freedman's wife. Mr. Freedman has neither voting nor investment control
over the shares held by the trust.
(3) This figure excludes shares which may be acquired within 60 days under the
1998 Stock Option Plan for 10% Shareholder-Directors as follows: David
Freedman -- 96,261 and Sigmund Freedman -- 49,511.
5
Executive Officers
The following table presents the name, age and present office or position of
each of the Corporation's executive officers:
Name Age Present Office or Position (1)
- ---- --- ------------------------------
David Freedman .... 81 Chairman of the Board and Chief Executive Officer
James T. Orcutt ... 44 President
Sigmund Freedman .. 85 Treasurer
Adele Lavender (2) 77 Secretary
Samuel Eichenbaum . 62 Vice President, Finance and Chief Financial Officer
Dr. Lee Eppstein .. 59 Vice President, Technology
- ----------------
(1) Messrs. David and Sigmund Freedman are also directors of the Corporation
(see "Election of Directors" above). Adele Lavender, who had served as
Administrative Assistant to Mr. David Freedman from 1970 until June 30,
1990, was appointed Secretary of the Corporation in 1985. Mr. Eichenbaum
was appointed Chief Financial Officer of the Corporation in February, 1985
and Vice President, Finance in May 1990. Mr. Eichenbaum was Assistant
Treasurer of the Corporation from May, 1986 through April, 1990. James T.
Orcutt, a director of the Corporation, was appointed President of the Life
Sciences Division in May 2000 and President of the Corporation on September
10, 2001. Dr. Eppstein was appointed Vice President, Technology in February
2000.
(2) Ms. Lavender retired from her position as Administrative Assistant to Mr.
David Freedman effective June 30, 1990. Ms. Lavender continues to serve on
a part-time basis and in an emeritus capacity as Secretary of the
Corporation.
The officers serve at the pleasure of the Board of Directors, except for
David Freedman, who has an employment agreement with the Corporation. The
officers are normally elected at the meeting of directors immediately
following the Annual Meeting of the Shareholders and serve until their
successors are elected and qualified.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's officers and directors, and persons who own more than ten
percent (10%) of a registered class of the Corporation's equity securities, to
file reports of ownership and changes in ownership with the Securities and
Exchange Commission (SEC) and the Nasdaq. Officers, directors and greater than
ten percent shareholders are required by SEC regulation to furnish the
Corporation with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Corporation believes that, during the year
ended December 31, 2001, all filing requirements applicable to its officers,
directors and greater than ten percent beneficial owners were complied with on
a timely basis.
6
EXECUTIVE COMPENSATION
The following table sets forth a summary for the last three fiscal years of
the compensation awarded to, earned by, or paid to, the Chief Executive
Officer of the Corporation and the most highly compensated executive officers
whose individual remuneration exceeded $100,000 for the last fiscal year (the
"Named Executive Officers").
SUMMARY COMPENSATION TABLE
Annual Compensation(1)
Name and Principal Position Year Salary ($) Bonus Options (#)
--------------------------- ---- ---------- ----- -----------
David Freedman 2001 $252,000 $57,395 --
Chairman of the Board and 2000 252,000 -- 55,000
Chief Executive Officer 1999 235,500 -- 26,620
James T. Orcutt (2) 2001 165,962 36,425 --
President
Sigmund Freedman 2001 101,000 -- --
Treasurer 2000 101,000 -- 8,250
1999 101,000 -- 26,620
Samuel Eichenbaum 2001 150,000 39,175 --
Vice President, Finance 2000 148,303 -- 19,800
and Chief Financial Officer 1999 122,173 -- --
Dr. Lee Eppstein 2001 120,000 27,325 --
Vice President, Technology 2000 120,000 -- 16,500
Ezra Weisman (3) 2000 11,538 -- --
President and Chief Executive Officer 1999 200,000 -- --
- ----------------
(1) While each of the Named Executive Officers received perquisites or other
personal benefits in the years set forth above, the value of these benefits
are not indicated since they did not exceed in the aggregate the lesser of
$50,000 or 10% of the Named Executive Officer's salary and bonus in any
year.
(2) Mr. Orcutt was elected President of the Corporation on September 10, 2001.
(3) Mr. Weisman left the Corporation in January 2000 and under the terms of a
settlement agreement in connection therewith, receives amounts equal to his
1999 salary through January 2003, payable weekly.
The Directors of the Corporation who are not also full time employees of the
Corporation are paid $10,000 annually plus $600 for each Board meeting they
attend, $300 for each Committee meeting they attend lasting less than 2 hours,
$400 for each meeting in excess of 2 hours and $400 per day for special
assignments. Committee chairmen receive an annual fee of $2,500 in addition to
$500 for each meeting they attend. Members of the Executive Committee receive
an annual fee of $1,000 in addition to $500 for each meeting they attend. In
addition, outside Directors of the Corporation (i.e., those who are not also
officers of the Corporation) are eligible to be granted options to purchase
stock in the Corporation pursuant to the Corporation's 1999 Stock Option Plan
for Nonemployee Directors and were eligible for options under a predecessor
plan which expired in 1999. Option prices are set at not less than 85% of the
fair market value of the stock on the date of grant. These options are
generally exercisable over a five-year period in 20% annual installments
beginning one year after date of grant. David Freedman and Sigmund Freedman,
who are not eligible for grants of options under this plan, are the sole
members of the plan committee which determines option grants and exercise
prices. Daniel S. Van Riper, a director of the Corporation was granted 5,500
options in 2001 at an exercise price of $2.73 per share, the fair market value
on the date of grant.
7
The Corporation entered into an Employment Agreement (the "Agreement") with
Mr. David Freedman effective January 1, 2002. The Agreement runs for a term of
three years and provides for payment of an annual salary of $264,600, with
increases and bonuses at the Board's discretion, business expenses and use of
a company car. If the Agreement is terminated because of death or disability,
the Corporation shall pay within 45 days, a benefit equal to Mr. Freedman's
annual salary. If it is terminated for cause, the Corporation has no further
obligations after the date of termination. If the Agreement is terminated due
to Mr. Freedman's retirement from active service to the Corporation as an
employee during the term of the Agreement, or at its termination or any
extension thereof, the Corporation shall pay to Mr. Freedman, over 36 months,
a retirement benefit equal to three (3) times the annual salary payable to Mr.
Freedman at the time of such retirement.
The Corporation entered into termination agreements with each of the Named
Executive Officers. Those agreements provide for payments by the Corporation
to such individuals in the event that their employment relationship with the
Corporation is terminated as a result of a transaction, not approved by the
Corporation which effects a change in control of the Corporation, in an
aggregate amount equal to 125% of the total salary and bonuses paid to them
during the two years preceding their termination.
The estimated amounts of compensation that would have been owed to the Named
Executive Officers assuming that such terminations occurred as of March 31,
2002 are as follows: David Freedman -- $630,000; Sigmund Freedman --$252,500;
Samuel Eichenbaum -- $375,000; and, Dr. Lee Eppstein -- $300,000.
In addition, the Corporation has entered into termination agreements with
Samuel Eichenbaum and James T. Orcutt which provide for payments equal to 200%
of their current annual base salary at the time of termination if they are
involuntarily terminated for any reason after the occurrence of a change in
control of the Corporation. The Corporation loaned Mr. Eichenbaum $51,250 in
August 1998 for 10 years without interest in order to exercise options for
16,909 shares of the Corporation's Common stock. The current balance due on
the loan is $35,000. These shares of stock have been pledged to the
Corporation to secure the loan.
All Other Compensation
As a result of the interest-free loan to Mr. Eichenbaum (in order to
exercise certain stock options) the Corporation has foregone $2,481 in
interest.
Pension Plan
The Named Executive Officers participate in the Corporation's Salaried
Employees' Retirement Plan (the "Pension Plan"), which provides pension
benefits to all salaried employees of the Corporation meeting certain age and
length of service requirements. The following table sets forth the estimated
annual pension benefits from the Pension Plan, based upon a maximum salary of
$200,000 per year payable upon retirement at Normal Retirement Date:
8
Estimated Annual Benefits
Years of Continuous Service
Annual Salary 10 20 30 40 45
- ------------- -- -- -- -- --
$ 60,000 $ 6,508 $13,240 $19,972 $25,738 $28,138
$ 80,000 $ 8,828 $17,960 $27,092 $34,858 $38,058
$100,000 $11,148 $22,680 $34,212 $43,978 $47,978
$120,000 $13,468 $27,400 $41,332 $53,098 $57,898
$140,000 $15,788 $32,120 $48,452 $62,218 $67,818
$160,000 $18,108 $36,840 $55,572 $71,338 $77,738
$180,000 $20,428 $41,560 $62,692 $80,458 $87,658
$200,000 $22,748 $46,280 $69,812 $89,578 $97,578
The normal retirement benefit formula for plan participants provides that
benefits are the sum of the following:
1. .5% of annual compensation up to $7,800 plus 1% of annual compensation
in excess of $7,800 multiplied by Credited Service prior to January 1, 1983.
2. .6% of annual compensation up to $7,800 plus 1.2% of annual
compensation in excess of $7,800 for each year of Credited Service from
January 1, 1983 to Normal Retirement Date up to a maximum of 35 years
(maximum includes years of service prior to January 1, 1983) (as such terms
are defined in the Pension Plan).
3. .8% of annual compensation for each year of Credited Service in excess
of 35 years.
The benefit amounts listed in the above table are not subject to any
deduction for Social Security or other offset amounts. As of December 31,
2001, the years of credited service under the Pension Plan for Messrs. David
Freedman; James T. Orcutt; Sigmund Freedman, Samuel Eichenbaum and Dr. Lee
Eppstein are 55, 1, 55, 16 and 19, respectively. During the fiscal year ended
December 31, 2000, benefits under the Pension Plan were paid to David and
Sigmund Freedman in the amounts of $62,564 and $68,675, respectively.
Options Granted During 2001
No options were granted to any of the Named Executive Officers during the
fiscal year ended December 31, 2001.
Options Exercised During 2001 and Fiscal Year End Option Values
The following table sets forth information concerning the 2001 fiscal
year-end value of unexercised options for each of the Name Executive Officers
based upon the closing price of $5.47 per share on December 31, 2001.
Number of Unexercised Value of Unexercised in
Shares Options/SARs The Money Options/SARs($)(2)
Acquired Value --------------------------- ---------------------------
Name on Exercise Realized($)(1) Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- -------------- ----------- ------------- ----------- -------------
David Freedman ...................... -- -- 41,261 18,634 $59,449 $24,429
James T. Orcutt ..................... -- -- -- -- -- --
Sigmund Freedman .................... -- -- 41,261 18,634 $59,449 $24,429
Samuel Eichenbaum ................... -- -- 17,102 7,986 $25,826 $12,538
Dr. Lee Eppstein .................... -- -- 7,179 7,189 $10,712 $10,914
- ----------------
(1) Market value of underlying securities on date of exercise, minus the
exercise price multiplied by the number of shares.
(2) Market value of underlying securities at fiscal year-end, minus the
exercise price multiplied by the number of shares.
9
Report of the Compensation Committee of the Board of Directors
The Compensation Committee of the Board of Directors establishes the
compensation for the Corporation's executive officers. The Compensation
Committee is composed of three non-employee directors, currently Mr. Ernest
Gross, Mr. Kiyoshi Masuda and Dr. David Pramer, who have no interlocking
relationships as to which applicable Securities and Exchange Commission rules
require disclosure.
The Corporation compensates its executive officers through a combination of
base salary, bonus, periodic grants of stock options, the use of Corporation
owned automobiles and split dollar life insurance. In addition, executive
officers participate in benefit plans, including medical, dental, life
insurance, pension and 401(k) plans, that are generally available to all of
the Corporation's employees.
Base salary levels for the Corporation's executive officers, are set
generally to be competitive in relation to the salary levels of executive
officers within the industry and other companies of comparable size and
complexity. Base salary levels are also influenced by the performance of the
Corporation with respect to growth in sales and net income, return on
shareholders' equity, return on sales and assets, sales per employee and
market capitalization. In addition, compensation is measured against published
survey information. In reviewing the salary levels of the executive officers
of the Corporation, the Compensation Committee takes into account the
problem-solving ability required to satisfactorily fulfill the positions'
assigned duties and responsibilities and the impact the positions have on the
operation and profitability of the Corporation.
For the year ended December 31, 2001, the compensation of David Freedman,
the Chairman of the Board of the Corporation, consisted of a salary of
$252,000. Mr. Freedman has an Employment Agreement which expires December 31,
2004 and calls for a salary of $264,600 for 2002. Mr. Freedman did not
participate in any decisions related to his compensation.
Submitted by the
Compensation Committee of the Board of Directors
Ernest Gross (Chairman)
Kiyoshi Masuda
Dr. David Pramer
Report of the Audit Committee of the Board of Directors
The Audit Committee of the Board is responsible for providing independent,
objective oversight of the Corporation's accounting functions and internal
controls. The Audit Committee is composed of three (3) directors, each of whom
is independent as defined by the National Association of Securities Dealers'
listing standards. The Audit Committee operates under a written charter
approved by the Board of Directors.
Management is responsible for the Corporation's internal controls and
financial reporting process. The independent accountants are responsible for
performing an independent audit of the Corporation's consolidated financial
statements in accordance with generally accepted auditing standards and to
issue a report thereon. The Audit Committee's responsibility is to monitor and
oversee these processes.
In connection with these responsibilities, the Audit Committee met with
management and the independent accountants to review and discuss the December
31, 2001 financial statements. The Audit Committee also discussed with the
independent accountants the matters required by Statement on Auditing
Standards No. 61 (Communications with Audit Committees). The Audit Committee
also received written disclosures from the independent accountants as required
by Independence Standards Board Standard No. 1 (Independence Discussions with
Audit Committees), and the Audit Committee discussed with the independent
accountants that firm's independence.
10
Based upon the aforementioned the Audit Committee recommended to the Board
of Directors that the audited consolidated financial statements be included in
the Corporation's Annual Report on Form 10-K for the year ended December 31,
2001, to be filed with the Securities and Exchange Commission.
The Audit Committee
Daniel S. Van Riper (Chairman)
Ernest Gross
Peter Schkeeper
Certain Relationships and Transactions
David Freedman is the owner of Bio-Instrument Ltd., a foreign firm that acts
as an agent for sales of the Corporation's products to customers in Israel,
and earns commissions on those sales. During the year ended December 31, 2001,
this firm earned commissions in the amount of $212,128 on purchases by
customers in Israel of the Corporation's products. These commissions paid by
the Corporation to Bio-Instrument Ltd. were comparable to commissions paid to
unrelated distributors and sales representatives.
The Corporation loaned Samuel Eichenbaum $51,250 in August 1998 for 10 years
without interest in order to exercise options for 16,109 shares of the
Corporation's Common stock. The current balance due on the loan is $35,000.
These shares of stock have been pledged to the Corporation to secure the loan.
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STOCK PERFORMANCE CHART
The following chart compares the yearly change in the cumulative total
shareholder return on the Corporation's Common stock during the last five
years ended December 31, 2001, with the cumulative total return of the Media
General Composite Index and an index comprised of the Media General Industry
Group 401 -- Scientific Instruments. The comparison assumes that $100 was
invested on December 31, 1996 in the Corporation's Common stock and in each of
the other two indices.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG NEW BRUNSWICK SCIENTIFIC CO., INC.
MEDIA GENERAL INDEX AND
MG SCIENTIFIC INSTRUMENTS GROUP INDEX
[graphic omitted]
- -----------------------------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001
- -----------------------------------------------------------------------------------------------------
The Corporation 100 138.50 103.73 97.48 86.79 114.45
- -----------------------------------------------------------------------------------------------------
MG Industry Group 401 - Scientific
Instruments Index 100 123.77 124.45 201.08 225.05 146.15
- -----------------------------------------------------------------------------------------------------
Media General Index 100 129.85 158.74 193.64 174.80 154.77
- -----------------------------------------------------------------------------------------------------
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ITEM 2. PROPOSAL TO AMEND THE 2001 NON-QUALIFIED STOCK OPTION PLAN TO RESERVE
AN ADDITIONAL 200,000 SHARES FOR ISSUANCE THEREUNDER
In 2001, the Corporation adopted the 2001 Stock Option Plan for officers and
key employees (the "2001 Plan"). The 2001 Plan provides for the granting of
options to purchase shares of the Corporation's Common
stock, par value $.0625 per share, to be drawn from authorized but unissued
stock. Two hundred thousand (200,000) shares were previously available for
options pursuant to the 2001 Plan, but the number of shares will be
appropriately adjusted in the event of certain changes in the capital
structure of the Corporation. Shareholders will have no pre-emptive rights
with regard to shares allotted to the 2001 Plan. As options have been granted
with respect to a large portion of those 200,000 shares, Management desires to
amend the 2001 Plan to increase the total number of shares available for
options to 400,000, thus adding 200,000 more shares to the 2001 Plan. The
purpose of the 2001 Plan is to attract and retain the services of experienced
and talented persons as employees of the Corporation.
The total number of authorized shares of Common stock of the Corporation is
25,000,000 of which 6,922,479 were outstanding as of April 9, 2002, the record
date. As of April 9, 2002, the Corporation has outstanding, options to
purchase 768,734 shares of its Common stock, including 143,000 options granted
under the 2001 Plan.
The following is a brief summary of the 2001 Plan. The complete text is
attached as Appendix A hereto.
Description of the Stock Option Plan
The 2001 Plan is administered by a Committee appointed by the Board. The
Committee consists of at least two persons who are Directors of the
Corporation and who are not eligible to receive any options under the 2001
Plan and no member of the Committee may have received any such options for the
one (1) year period prior to election to serve on the Committee. Participants
are selected by the Committee on the basis of the Committee's judgment as to
each person's overall contribution to the success of the Corporation. The
Committee determines both the number of optionees and the number of shares to
be optioned to any individual under the 2001 Plan. The Board of Directors is
able to amend the 2001 Plan without further approval by the shareholders,
except insofar as such approval is required by the 2001 Plan for amendments
which materially modify the eligibility requirements for the receiving of
options, increase the total number of shares covered by the Plan, or otherwise
materially increase the benefits accruing to optionees.
No options may be granted under the 2001 Plan after March 14, 2011. Options
granted under the 2001 Plan may have an exercise period of up to ten years.
The 2001 Plan provides that the Committee shall determine the time when any
such options shall be exercisable. Generally, twenty percent (20%) of the
options granted shall become exercisable one year after the grant date and
twenty percent (20%) shall become exercisable each year thereafter until all
options are exercisable at the end of five years, provided however, the
Committee shall have the full discretion at the time of granting each option
to make such options immediately exercisable on grant or subject to vesting
over one or more specified periods of time different from the general vesting
schedule.
In the sole discretion of the Committee, it may accelerate the vesting
schedule of any options issued under the 2001 Plan. In the event of a change
in control of the Corporation by a single person or group of affiliated
persons or entities, such options will vest immediately before the change in
control.
The 2001 Plan provides that when an optionee ceases to be an employee of the
Corporation for any reason other than death, voluntary retirement after
attaining age 65 or disability, all rights to exercise unexercised options
cease, whether or not accrued at the date of termination. In the event of
termination of an optionee's employment due to death, voluntary retirement or
disability, all options which have become exercisable as of the date of the
optionee's death may be exercised by the executor, administrator or
beneficiary of the estate of such optionee, for a period of twelve (12) months
or the unexpired term of the option (whichever is less). In no event can a
stock option be exercised after 10 years from the date it is granted, or such
earlier date as may be specified in the option. The options are not
transferable except in the event of death.
The exercise price per share of each option must be at least the fair market
value on the date of grant which, generally, is the closing price for the
Corporation's Common stock as quoted on the Nasdaq. Payment for the full
13
number of shares covered by the portion of any option exercised will be made in
full at the time of exercise. Payment can be made by delivery of cash, check,
bank draft or postal or express money order. At the Committee's sole discretion,
payment can be made by delivery of shares of the Corporation's Common stock
having an aggregate fair market value equal to the portion of the option price
outstanding or at the discretion of the Committee, by delivery of the Optionee's
personal recourse note with such terms as the Committee may approve.
Options covering 57,000 shares remain available for grant under the 2001
Plan. No determination has been made with respect to future recipients of
options under the 2001 Plan, and it is not possible to specify to whom such
options may be granted, or the number of shares, within the limitations of the
2001 Plan, to be covered by such options.
Options granted under the 2001 Plan are intended to be non-statutory
options. Under current Federal income tax law, the grant of a
non-transferable, non-statutory option generally is not a taxable event
for the grantee or for the Corporation. Rather, the recipient of a
non-statutory option generally realizes ordinary income upon exercise of the
option in an amount equal to the excess of the fair market value of the stock
acquired over the option price. The Corporation is entitled to claim a
corresponding tax deduction, subject to the rules pertaining to the
reasonableness of compensation and the withholding of income taxes, in an amount
equal to the ordinary income realized by the grantee.
The Corporation has filed the necessary registration statements under the
Securities Act of 1933 to cover the issuance of shares pursuant to exercise of
options granted under the 2001 Plan so that such registration statements are
effective prior to the exercise of options for those shares. The Corporation
expects to amend those registration statements to extend coverage to the
200,000 additional shares to be added to the 2001 Plan.
The closing price of the Common stock of the Corporation on March 18, 2002,
as quoted on the Nasdaq was $8.75 per share.
Management recommends a vote "FOR" the amendment.
INDEPENDENT AUDITORS
The Board of Directors has selected KPMG LLP as the Company's independent
auditors to make an examination of the accounts of the Company for the fiscal
year 2002. KPMG LLP has served as the independent auditors of the Company for
many years. Representatives of KPMG LLP are expected to be present at the
Annual Meeting and will be available to respond to appropriate questions and
to make such statements as they may desire.
The fees billed for services rendered for the Company by KPMG LLP for fiscal
2001 were as follows:
Annual audit including foreign locations and reviews of the
quarterly financial statements included in the Company's
Forms 10-Q $168,700
Financial Information Systems Design and
Implementation Fees $ --
All Other Fees $ 98,600(1)
(1) Consists of tax compliance and tax consultation fees and fees for audits
of the financial statements of employee benefit plans and review of
filings with the Securities and Exchange Commission.
The Audit Committee has considered whether the provision of the services
covered under the captions "Financial Information Systems Design and
Implementation Fees" and "All Other Fees" above is compatible with maintaining
the auditor's independence.
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OTHER MATTERS
Management does not know of any other matters which are likely to be brought
before the meeting. However, in the event that any other matters properly come
before the meeting, the persons named in the enclosed proxy will vote said
proxy in accordance with their judgment on such matters.
2003 SHAREHOLDER PROPOSALS
Shareholder proposals submitted for inclusion in the Proxy Statement of the
Board of Directors for the 2003 Annual Meeting of Shareholders, must be
received by the Corporation at 44 Talmadge Road, Edison, New Jersey 08818 on
or before December 20, 2002.
GENERAL
The cost of this solicitation will be borne by the Corporation. Brokers will
be asked to forward solicitation material to beneficial owners of stock and
will be reimbursed for their out-of-pocket expenses.
By Order of the Board of Directors
ADELE LAVENDER, Secretary
ANNUAL REPORT ON FORM 10-K
The Corporation will provide without charge to each shareholder who requests
it in writing, a copy of its Annual Report on Form 10-K 405 for the year ended
December 31, 2001, including the financial statements and schedules thereto
(but without the exhibits thereto) filed with the Securities and Exchange
Commission. The Corporation will furnish any exhibit to such Annual Report to
any shareholder requesting the same upon payment of a fee equal to the
Corporation's reasonable expenses in furnishing such exhibit. All requests for
the Annual Report on Form 10-K 405 or exhibits thereto should be addressed to
Samuel Eichenbaum, Vice President, Finance, New Brunswick Scientific Co., Inc.
44 Talmadge Road, Edison, New Jersey 08818-4005.
15
Appendix "A"
NEW BRUNSWICK SCIENTIFIC CO., INC.
2001 NONQUALIFIED STOCK OPTION PLAN
FOR
OFFICERS AND KEY EMPLOYEES
ARTICLE 1
NAME AND PURPOSE
1.1 Name. The name of the stock option plan (the "Plan") shall be the New
Brunswick Scientific Co., Inc. 2001 Nonqualified Stock Option Plan.
1.2 Purpose. The Plan is intended to enable New Brunswick Scientific Co.,
Inc. (the "Company") to attract and retain experienced and exceptional
executive employees with managerial and analytical talent, upon whom, in large
measure, the sustained progress, growth and profitability of the Company
depends. Accordingly, the Plan is intended to provide them with favorable
opportunities to purchase equity in the Company through the grant of
nonqualified stock options (the "Options"), thereby encouraging them to
contribute to the Company's future success and prosperity, and enhancing the
value of the Company for the benefit of its other share owners.
ARTICLE 2
SHARES SUBJECT TO THE PLAN
2.1 Number of Shares. The stock subject to options issued under this Plan
shall be shares of the Company's Common stock, par value $.0625 per share (the
"Shares"). The total amount of Shares with respect to which options may be
granted shall be 200,000 shares, subject to adjustment in accordance with the
provisions of Section 2.2. Shares issuable under the Plan shall be authorized
but unissued Shares of the Company. If any Option granted under the Plan
expires or otherwise terminates, in whole or in part, without having been
exercised, the Shares subject to the unexercised portion of such Option shall
be available for the granting of Options under the Plan as fully as if such
Shares had never been subject to an Option.
2.2 Adjustments. The number of Shares that may be issued under the Plan, as
stated in Section 2.1, and the number of Shares issuable upon exercise of
outstanding Options under the Plan (as well as the exercise price per share
under such outstanding Options shall be equitably adjusted by the Committee
(referred to in Section 3.2) to reflect: (a) any stock dividend or stock
split, (b) any subdivision or combination of outstanding shares or (c) any
other reorganization or change in the stock or capital structure of the
Company in connection with which the Company issues additional shares of
capital stock without receiving any consideration therefor.
ARTICLE 3
ADMINISTRATION OF PLAN
3.1 Stock Options. As used in the Plan, the term "Options" or "nonqualified
stock options" means options that are not intended to qualify as incentive
stock options under Section 422A of the Internal Revenue Code of 1986, as
amended from time to time (the "Code").
3.2 Committee Authority in General. Except as otherwise provided below, the
Plan shall be administered by a Stock Option Committee (the "Committee")
appointed by the Board of Directors of the Company (the "Board"). The
Committee shall have full authority to establish, from time to time, such
rules and regulations, not inconsistent with the provisions of the Plan, for
the proper administration of the Plan, and to make such determinations and
interpretations under or in connection with the Plan and the Options granted
hereunder, as it deems necessary or advisable. All such rules, regulations,
determinations and interpretations shall be binding and conclusive upon the
Company, its stockholders, employees (including former employees), and
directors, and any related corporation, and upon their respective legal
representatives, beneficiaries, successors and assigns and upon all other
persons claiming under or through any of them.
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3.3 Committee Members. The Committee shall be composed of at least two (2)
persons who are members of the Board of Directors. No member of the Committee
may receive any options under the Plan, and no member may have received any
such options for a period of at least one (l) year prior to his or her
election to serve on the Committee. The Board may from time to time remove
members from, or add members to, the Committee. The Board may on its own
motion, amend the requirements, for eligibility for service on the Committee
as may be reasonably required, in the judgment of the Board, in order to
qualify each member of the Committee as a "disinterested person," as defined
in the regulations of the Securities and Exchange Commission pertaining to
Section 16(b) of the Securities Exchange Act of 1934.
3.4 Actions of the Committee. The Committee shall hold meetings at such
times and places as it may determine. A majority of the members of the
Committee shall constitute a quorum for the transaction of business, and a
vote of the majority of those members present at any meeting, or acts approved
in writing by a majority of the Committee, shall decide any question before
the Committee.
3.5 Exoneration. No member of the Board or of the Committee shall be liable
for any action or determination made in good faith with respect to the Plan or
any Option granted under this Plan, except those resulting from such member's
gross negligence or willful misconduct.
3.6 Indemnification. In addition to such other rights of indemnification as
they may have as members of the Board or the Committee, the Company shall
defend, indemnify and hold harmless the members of the Committee against all
costs and expenses reasonably incurred by them in connection with any action,
suit or proceeding to which they or any of them may be party by reason of any
action taken or failure to act under or in connection with the Plan or any
Option granted hereunder, and against all amounts paid or payable by them in
settlement thereof provided such settlement is approved by independent legal
counsel selected by the Company or paid or payable by them in satisfaction of
a judgment in any such action, suit or proceeding, except a judgment based
upon a finding of bad faith on the part of the Board or Committee member
seeking indemnification hereunder, provided that upon the institution of any
such action, suit or proceeding a Committee member shall, in writing, give the
Company notice thereof and an opportunity, at its own expense, to handle and
defend the same before such committee member undertakes to handle and defend
it on her or his own behalf.
ARTICLE 4
ELIGIBILITY
The persons eligible to participate in the Plan shall be executive,
managerial, or supervisory employees (except any employee who may be
ineligible as a result of his or her appointment to the Committee) of the
Company and its subsidiary companies who may be designated by the Committee.
The persons eligible to receive Options under the Plan are referred to in this
Plan as "Eligible Individuals." The Committee shall have the full discretion
and authority to determine the persons to whom Options shall be granted under
the Plan and to recommend the date of grant and the other conditions thereof,
subject to the express terms of this Plan.
ARTICLE 5
OPTION TERMS
5.1 Price of Options. The purchase price per Share (the "Option Price")
under each Option granted under the Plan shall be determined and fixed by the
Committee in its discretion, but shall not be less than the fair market value
of such Shares on the date of grant of such Option. The fair market value of a
Share on any day shall mean (a) the last reported closing price of a Share as
quoted by Nasdaq and reported in The Wall Street Journal (or other reputable
financial publication, in the event The Wall Street Journal is unavailable);
or (b) if at any time the Company's Common stock is not eligible for quotation
on Nasdaq, such other method of determining fair market value as shall be
permitted by the Code or the rules or regulations thereunder, and adopted by
the Committee from time to time.
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5.2 Maximum Exercise Period. The Committee shall fix the term of all
Options, provided that such term shall not exceed ten years from the date of
grant of such Option (the "Expiration Date").
5.3 Installment Exercise. On the grant of each Option under this Plan (the
"Grant Date"), the Committee shall determine the time when any of such Options
shall be exercisable. Generally, twenty percent (20%) of the Options granted
shall become exercisable one (1) year after the Grant Date and twenty percent
(20%) shall become exercisable each year thereafter until all Options are
exercisable at the end of five years, provided, however, the Committee shall
have the full discretion at the time of granting each Option to make such
Options immediately exercisable on grant or subject to vesting over one or
more specified periods of time different from the general vesting schedule.
The time at which such Options shall become exercisable, in whole or in part,
shall be set forth in the Nonqualified Stock Option Agreement described in
Section 5.10 below. An Option may be exercised as to less than the full amount
of Shares then available for purchase under the Option, but must be exercised
in multiples of full shares of stock. An Option may not be exercised more than
ten times during the term of the Option.
5.4 Payment. The Option Price shall be payable: (a) in cash or by check,
bank draft, or postal or express money order, (b) at the discretion of the
Committee, through delivery of shares of Common stock having a fair market
value equal as of the date of the exercise to the cash exercise price of the
Option, or (c) at the discretion of the Committee, by delivery of the
optionee's personal recourse note with such terms as the Committee may
approve, or (d) at the discretion of the Committee, by any combination of (a),
(b) and (c) above. The Committee shall set forth in the Nonqualified Stock
Option Agreement, the form of permitted payment of the exercise price.
Notwithstanding the foregoing, the Committee, in its sole discretion, may
amend any outstanding Nonqualified Stock Option Agreement to permit one or
more of the additional forms of payment set forth in (b), (c) or (d) above by
providing written notice of such amendment to the optionee.
5.5 Method of Exercise. An Option, or portion of an Option, shall be
exercised by delivery of a written notice of exercise to the Company,
accompanied by payment in full of the purchase price for the Shares with
respect to which the Option is exercised. Until such Shares are issued, the
holder of the Option shall have none of the rights of a share owner. In its
discretion, the Committee may require that the exercise of an Option be
conditioned upon the execution by the optionee of a written election under
Section 83(b) of the Code.
5.6 Transferability. No Option shall be assignable or transferable by an
optionee otherwise than by will or by the laws of descent and distribution,
and during the lifetime of the optionee, the Option shall be exercisable only
by him, or in the event of his legal disability by his legal representative.
5.7 Termination of Employment. If an optionee ceases to be employed by the
Company for any reason other than death, voluntary retirement after attaining
age 65 or disability (as described in Section 5.9 below) prior to the
Expiration Date of any Options, such unexercised Option shall terminate as of
the date of such termination of employment.
5.8 Death of Optionee. If an optionee dies while an employee of the Company
and if on the date of death an optionee holds an Option that is not fully
exercised, then for a period of twelve (12) months after the optionee's death
or the unexpired term of the Option, whichever is less, the Option may be
exercised by the executor or administrator of the optionee or by any person
who acquires the Option from the optionee by bequest or inheritance, to the
extent that the optionee could have exercised such Option on the date of his
or her death.
5.9 Retirement or Disability of Optionee. If an optionee ceases to be
employed by the Company or its subsidiary corporations by reason of voluntary
retirement after attaining the age of 65 or by reason of disability and if on
the date of termination of employment the optionee holds an Option that is not
fully exercised, then for a period of twelve (12) months after the date of
termination of employment or the unexpired Option term, whichever is less, the
Option may be exercised to the extent that the optionee had the right to
exercise such Option as of the date of termination of employment. If such
optionee dies within twelve (12) months after the date of termination of
employment and if on the date of his death he held an Option that is not fully
exercised, then to the extent and for the period that the optionee could have
exercised the Option under this Section 5.9 had he survived, the Option may be
exercised by the executor or administrator of the optionee or by any person
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who acquires the Option from the optionee by bequest or inheritance. A
"disability" shall, for all purposes under this plan, be defined as set forth
in Section 105(d)(4) of the Internal Revenue Code of 1986, as amended.
5.10 Option Agreement and Further Conditions. As soon as practicable after
the grant of an Option, each optionee shall enter into, and be bound by the
terms of, a nonqualified stock option agreement (the "Nonqualified Stock
Option Agreement") which shall state the number of Shares to which the Option
pertains. The Nonqualified Stock Option Agreement shall set forth such terms,
conditions and restrictions regarding the Option not inconsistent with the
Plan as the Committee shall determine. Without limiting the generality of the
foregoing, the Committee, in its discretion, may impose further conditions
upon the exercisability of Options and restrictions on transferability with
respect to Shares issued upon exercise of Options.
5.11 Accelerated Vesting. (a) Notwithstanding and in addition to 5.11(b)
below, at any time, and from time to time, in the sole discretion of the
Committee, the Committee may accelerate the vesting schedule of any Options
issued under this Plan. Where the Committee determines that it shall
accelerate the vesting of any option, it shall notify the affected optionee in
writing.
(b) In the event of a "Change in Control" of the Company, any Options not
yet exercisable shall immediately vest and become exercisable. For purposes of
this Agreement, "Change in Control" means the acquisition of the beneficial
ownership of a majority of the voting securities of the Company and/or
substantially all of the assets of the Company by a single person or entity or
a group of affiliated persons or entities. Such Options shall vest immediately
before the Change in Control.
ARTICLE 6
MISCELLANEOUS PROVISIONS
6.1 Registration of Shares. The Company may, but shall not be obligated to,
register the Options or the Shares received upon exercise of an Option, or
both, with the Securities and Exchange Commission and any state securities law
commission or agency. In the absence of such registration, both the Options
and the Shares:
(i) will be issued only pursuant to an exemption from registration;
(ii) cannot be sold, pledged, transferred or otherwise disposed of in the
absence of an effective registration statement or an opinion of counsel
satisfactory to the Company that such registration is not required; and
(iii) will bear an appropriate restrictive legend setting forth the
statement contained in subparagraph (ii) above.
The Company shall not be required to sell or issue any Shares under any
Option if the issuance of such Shares would, in the judgment of the Company,
constitute or result in a violation by the Optionee or the Company of any
provision of law or regulation of any governmental agency. The Company at its
discretion, may require the optionee to sign, when exercising an Option, an
investment letter satisfactory to the Company.
6.2 Application of Funds. The funds received by the Company upon the
exercise of Options and otherwise under the Plan shall be used for general
corporate purposes as permitted by law.
6.3 Withholding of Taxes. The obligation of the Company to deliver Shares
upon the exercise of any Option shall be subject to any applicable Federal,
state and local tax withholding requirements.
6.4 Governing Law. This Plan shall, to the maximum extent possible, be
governed by the laws of the State of New Jersey.
6.5 Employment Rights. The grant of an Option under this Plan shall not
impose on the Company or its subsidiary corporations any obligation to
continue to employ any optionee, and the right of the Company or its
subsidiary corporations to terminate the employment of any person shall not be
diminished or affected by reason of such grant of an Option.
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ARTICLE 7
AMENDMENT AND TERMINATION
7.1 Authority of Board of Directors. Except as otherwise provided in Section
7.2, the Board at any time, and from time to time, may suspend or discontinue
the Plan or amend it in any respect as the Board may deem appropriate and in
the best interests of the Company; provided, however, that no such suspension,
discontinuance or amendment shall materially impair the rights of any holder
of any Option granted under this Plan prior to such amendment, suspension or
termination, without the consent of such holder.
7.2 Shareholder Approval of Amendments. No amendment of this Plan shall be
made which would, without the approval of the shareholders holding at least a
majority of the outstanding shares of the Company voted at a meeting of such
shareholders: (a) materially increase the benefits accruing to participants
under the Plan; (b) increase the number of Shares that may be issued under the
Plan (except for adjustments permitted or required under Section 2.2 above);
materially modify the requirements as to eligibility for participation in the
Plan; or (d) extend the term during which Options may be granted or exercised.
7.3 Termination. No Options may be granted after ten years after the date on
which this Plan was approved by the Board, provided, however, that the Plan
and all outstanding Options shall remain in effect until such Options have
expired or vested, as the case may be, or are terminated in accordance with
the Plan.
ARTICLE 8
SHAREHOLDER APPROVAL AND EFFECTIVE DATE
This Plan is subject to the approval of the holders of at least a majority
of the votes cast by the holders of shares entitled to vote thereon, which
approval shall be obtained at the annual shareholder's meeting following the
adoption of the Plan by the Board. If the shareholders shall not approve the
Plan as aforesaid, the Plan shall not be effective, and any and all actions
taken prior thereto shall be null and void or shall, if necessary, be deemed
to have been fully rescinded.
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Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Shareholders
NEW BRUNSWICK SCIENTIFIC CO., INC.
May 28, 2002
o Please Detach and Mail in the Envelope Provided o
A / X / Please mark your
votes as in this
example.
MANAGEMENT RECOMMENDS A VOTE FOR THE NOMINEES LISTED BELOW
FOR WITHHELD
1. Election of CLASS NOMINEES TERM EXPIRES
Directors / / / / ----- -------- ------------
For, except vote withheld from the Class III David Freedman 2005 Annual Meeting
following nominee(s) Class III Kenneth Freedman 2005 Annual Meeting
Class III Dr. Jerome Birnbaum 2005 Annual Meeting
- ---------------------------------- Class III James T. Orcutt 2005 Annual Meeting
FOR AGAINST ABSTAIN
2. The approval and adoption of an amendment to / / / / / /
the New Brunswick Scientific Co., Inc. 2001
Nonqualified Stock Option Plan for Officers
and Key Employees Increasing the number of Authorized shares by 200,000.
Management Recommends A Vote FOR Proposal 2 Listed Above.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY IN THE ENCLOSED ENVELOPE.
SIGNATURE(S) DATE
----------------------------------------------- ---------------
Note: Please sign exactly as your name appears hereon. Executors,
administrators, trustees, etc. should so indicate when signing, giving
full title as such. If signer is a corporation, execute in full corporate
name by authorized officer. If shares held in the name of one or more
persons all should sign.
This Proxy is Solicited on behalf of the Board of Directors
NEW BRUNSWICK SCIENTIFIC CO., INC.
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS
MAY 28, 2002
The undersigned hereby constitutes and appoints David Freedman and
Sigmund Freedman, and each of them, proxies of the undersigned, with full power
of substitution to represent and vote, as designated on the reverse side, all
shares of the Common stock of New Brunswick Scientific Co., Inc. (the
"Corporation") which the undersigned could represent and vote if personally
present at the Annual Meeting of Shareholders of the Corporation to be held on
May 28, 2002, and at any adjournment thereof.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE