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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
NEW BRUNSWICK SCIENTIFIC
- -----------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
-----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
___________________________________________________________________________
2) Form, Schedule or Registration Statement No.:
___________________________________________________________________________
3) Filing Party:
___________________________________________________________________________
4) Date Filed:
___________________________________________________________________________
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NEW BRUNSWICK SCIENTIFIC CO., INC.
-----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 29, 1997
-----------------
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 offices of the Corporation, 44 Talmadge Road, Edison, New
Jersey 08818, on Thursday, May 29, 1997, at 10:00 A.M. Eastern Daylight Savings
Time, for the following purposes:
1. To elect three Class I directors of the Corporation to terms of
three years.
2. To approve and adopt an amendment to the New Brunswick Scientific
Co., Inc. 1991 Nonqualified Stock Option Plan increasing the number
of authorized shares by 200,000.
3. To approve and adopt an amendment to the New Brunswick Scientific
Co., Inc. 1989 Stock Option Plan for Nonemployee Directors
increasing the number of authorized shares by 100,000.
4. 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 14, 1997, 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, 1996, is being sent to you herewith.
By Order of the Board of Directors
ADELE LAVENDER, Secretary
April 15, 1997
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.
<PAGE>
NEW BRUNSWICK SCIENTIFIC CO., INC.
44 TALMADGE ROAD
EDISON, NEW JERSEY 08818
-----------------
PROXY STATEMENT
-----------------
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 offices of the Corporation, 44 Talmadge
Road, Edison, New Jersey 08818, on Thursday, May 29, 1997 at 10:00 A.M., Eastern
Daylight Savings Time. This Proxy Statement and enclosed form of proxy are being
sent to shareholders commencing on or about April 15, 1997.
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 14, 1997, 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 3,809,982 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, only the three directors
designated as Class I directors are to be elected at the 1997 Annual Meeting.
Those 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.
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The following table presents the name, age and principal occupation of each
nominee and present director.
NOMINEES FOR TERM EXPIRING AT THE 2000 ANNUAL MEETING (CLASS I)
<TABLE>
<CAPTION>
First
Became
Name Age Principal Occupation Director In
- ---- --- -------------------- ------------
<S> <C> <C> <C>
Bernard Leon ........ 69 Consultant, and Of Counsel to the law firm of Crummy, Del 1996
Deo, Dolan, Griffinger & Vecchione
Kiyoshi Masuda ...... 72 President of American & Foreign Market Research, Inc.; 1980
President of FerriShield, Inc.
Ernest Gross ........ 78 Attorney in Private Practice 1984
PRESENT DIRECTORS
Terms Expiring at the 1998 Annual Meeting (Class II)
Sigmund Freedman .... 80 Treasurer of the Corporation 1958
Martin Siegel ....... 68 Chairman of the Board of Valiant International Multimedia 1980
Corporation
Dr. David Pramer .... 74 Executive Assistant for Research Policy and Administration, 1962(1)
Rutgers University
Terms Expiring at the 1999 Annual Meeting (Class III)
David Freedman ...... 76 Chairman of the Board of the Corporation 1958
Ezra Weisman ........ 56 President of the Corporation 1971
Dr. Marvin Weinstein 80 President, Research Advisory Service 1981
</TABLE>
- ------
(1) 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
Mr. Leon is an attorney, has a consulting practice, and is Of Counsel to
the law firm of Crummy, Del Deo, Dolan, Griffinger & Vecchione. Mr. Leon was
employed by Hoffmann La-Roche from 1961 until his retirement in 1994 at which
time he was Assistant Vice President, Patent Counsel and Director of
Licensing, Business Development and Acquisitions. Prior to 1961 he was a
Patent Examiner with the U.S. Patent Office.
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.
Ezra Weisman has served as President and Chief Executive Officer of the
Corporation since May 1, 1989. Mr. Weisman previously served as Vice President
Sales of the Corporation for more than five years prior to 1987, and as Vice
President Corporate Development from April, 1987 through April, 1989.
Marvin Weinstein, Ph.D. is the owner of a consulting business, Research
Advisory Service, and was also a Director of Epitope, Inc. until his
retirement in 1994. Dr. Weinstein retired in 1981 as Vice President
Microbiology and Antibiotic Research of Schering Corp., a position he held
since 1977.
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.
2
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Martin Siegel was Chairman of the Board of Weldotron Corporation, a packaging
machinery manufacturing company, for approximately 33 years until 1994. He is
currently Chairman of the Board of Valiant International Multimedia Corporation.
David Pramer, Ph.D. has had a 45 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. Siegel,
Weinstein 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 two times during the year
ended December 31, 1996. The Board has a Compensation Committee which consists
of Messrs. Masuda, Pramer and Gross which met five times during the year ended
December 31, 1996. 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, Weisman, Gross and Siegel. 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 five times during the year ended December 31, 1996.
The Board also has a nominating committee consisting of Messrs. Weinstein and
Pramer which met one time during the year ended December 31, 1996. 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, stockholders or external sources. Names of
prospective candidates may be submitted to the Secretary of the Corporation for
referral to the Committee. Any stockholder 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, 1996, there were four meetings of the
Board of Directors. Mr. Leon did not attend one of the two Board meetings held
during 1996 subsequent to his election to the board on May 29, 1996.
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SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information, as of April 14, 1997,
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
- ----- --------- -----
Bernard Leon .................................. 1,575 (1)
Kiyoshi Masuda ................................ 13,964 (5) (1)
Ernest Gross .................................. 9,344 (5)(6) (1)
Sigmund Freedman (2) .......................... 546,058 14.3%
Martin Siegel ................................. 13,124 (5) (1)
Dr. David Pramer .............................. 4,575 (5)(7) (1)
David Freedman (2) ............................ 565,432 (3) 14.8%
Ezra Weisman .................................. 48,195 (4) (1)
Dr. Marvin Weinstein .......................... 9,607 (5) (1)
All directors and executive officers as a group
(eleven). .................................... 1,222,689 (8) 32.1%
- ------
(1) Less than 1 percent.
(2) Messrs. David and Sigmund Freedman are brothers. 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 29.1% of the Common
stock of the Corporation.
(3) This figure includes 5,250 shares owned by Mr. Freedman's wife directly
but does not include 51,562 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 26,250 shares which may be acquired by Mr. Weisman
within 60 days under Nonqualified Stock Option Agreements and the 1991
Nonqualified Stock Option Plan for Officers and Key Employees.
(5) This figure includes respective shares which may be acquired within 60
days under a stock option plan for nonemployee directors as follows: Mr.
Masuda -- 9,764; Mr. Gross -- 6,457; Mr. Siegel -- 11,024; Dr. Pramer --
3,517 and Dr. Weinstein -- 8,977.
(6) This figure includes 1,050 shares owned by Mr. Gross' wife and 1,837
shares owned jointly by Mr. Gross and his wife.
(7) This figure includes 1,050 shares owned by Dr. Pramer's wife.
(8) This figure includes 75,439 shares which may be acquired by the officers and
directors as a group within 60 days under Nonqualified Stock Option
Agreements, the 1991 Stock Option Plan for Officers and Key Employees and
the 1989 Stock Option Plan for Nonemployee Directors.
4
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information, as of April 14, 1997,
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) 565,432(2) 14.8%
44 Talmadge Road
Edison, New Jersey 08818
Sigmund Freedman (1) 546,058 14.3%
44 Talmadge Road
Edison, New Jersey 08818
The TCW Group, Inc. 349,125 9.2%
865 South Figueroa Street
Los Angeles, California 90017
Heartland Advisors, Inc. 231,105 6.1%
790 North Milwaukee Street
Milwaukee, Wisconsin 53202
Dimensional Fund Advisors, Inc. 202,705(3) 5.3%
1299 Ocean Avenue -- 11th Floor
Santa Monica, California 90401
- ------
(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 29.1% of the Common stock of the Corporation.
(2) This figure includes 5,250 shares owned by Mr. Freedman's wife directly
but does not include 51,562 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) According to a recently filed Schedule 13G, Dimensional Fund Advisors, Inc.
has sole voting power over 138,220 shares and sole dispositive power over
all of the shares indicated above. 34,440 shares are owned by DFA Investment
Dimensions Group Inc. (the Fund) and 30,045 shares are owned by The DFA
Investment Trust Company (the Trust). Persons who are officers of
Dimensional Fund Advisors Inc. also serve as officers of the Fund and the
Trust and in such capacities vote the shares owned by the Fund and the
Trust.
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 ........ 76 Chairman of the Board
Ezra Weisman .......... 56 President
Sigmund Freedman ...... 80 Treasurer
Adele Lavender (2) .... 72 Secretary
Samuel Eichenbaum ..... 57 Vice President, Finance and Chief
Financial Officer
5
<PAGE>
- ------
(1) Mr. Ezra Weisman became President and Chief Executive Officer of the
Corporation in May, 1989. Messrs. David and Sigmund Freedman and Mr.
Weisman 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.
(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
Messrs. David Freedman, and Ezra Weisman, who have employment agreements 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, 1996, all filing requirements applicable to its officers, directors
and greater than ten percent beneficial owners were complied with on a timely
basis.
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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 (#)(2)
- -------- ---- ---------- ----- --------------
David Freedman 1996 $212,901 -- --
Chairman of the Board 1995 212,151 -- --
1994 206,700 -- --
Ezra Weisman 1996 164,800 $14,490 --
President and Chief 1995 164,800 -- --
Executive Officer 1994 160,000 14,190 5,250
Samuel Eichenbaum 1996 94,372 25,080 --
Vice President, Finance 1995 92,359 21,000 10,500
and Chief Financial Officer 1994 89,420 27,720 --
- ------
(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) Does not include options to purchase membership interests in DGI
BioTechnologies, L.L.C., the Corporation's majority-owned drug discovery
operation further described below.
The Directors of the Corporation who are not also full time employees of the
Corporation are paid $5,000 annually plus $600 for each Board meeting they
attend, $300 for each Committee meeting they attend and $300 per day for special
assignments. 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 1989 Stock
Option Plan for Nonemployee Directors. 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 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.
Sigmund Freedman, who is employed by the Corporation as Treasurer and is also
a Director of the Corporation was paid $85,000 during 1996 as compensation for
his services as Treasurer.
Mr. Weisman's services as President and Chief Executive Officer of the
Corporation are governed under the terms of an employment agreement with the
Corporation effective January 1, 1994. The agreement which was scheduled to
expire on December 31, 1996, and by its terms, was extended to December 31,
1997, provides for a salary of $160,000 with increases at the Board's
discretion, bonuses if certain criteria are met and a grant in 1994 of options
to purchase 5,250 shares of the Corporation's Common stock at $4.86 per share.
The Corporation loaned Ezra Weisman $62,500 in December 1996 for 10 years
without interest; the proceeds of the loan were paid to the Corporation by Mr.
Weisman in order to exercise options for 10,500 shares of the Corporation's
Common stock. These shares of stock have been pledged to the Corporation to
secure the loan.
The Corporation entered into an Employment and Consulting Agreement (the
"Agreement") with Mr. David Freedman on January 1, 1996. The employment portion
of the Agreement (the "Employment Term") runs for a term of three years,
provides for payment of an annual salary of $212,901, with increases and bonuses
at the Board's discretion, business expenses and use of a company car. Under the
terms of his previous Employment
7
<PAGE>
Agreement, Mr. Freedman deferred $18,750 of his 1992 and $25,000 of his 1993,
1994 and 1995 compensation, which deferred amount will be paid with interest at
the prime rate on December 31, 1998, unless the Company elects to pay it sooner.
If the Employment Term 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. At the expiration of the Employment
Term, Mr. Freedman will serve as a consultant and independent contractor to the
Corporation, pursuant to the consulting portion of the Agreement (the
"Consultant Term") for a three year term at the rate of $100,000 per year with
increases at the Board's discretion. At any time during the Agreement, Mr.
Freedman has the option to forego the Consultant Term.
David Freedman, Ezra Weisman and Samuel Eichenbaum, in their capacity as
members of the Board of Managers of DGI BioTechnologies, L.L.C. (DGI), the
Corporation's majority-owned drug discovery operation, each received options to
purchase 50,000 membership interests in DGI. In addition, Bernard Leon, who is
also a member of the Board of Managers of DGI and one of the founders and a
minority shareholder in DGI, holds options to purchase 50,000 membership
interests in DGI which were granted to him prior to his becoming a director of
the Corporation.
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, 1997
are as follows: David Freedman -- $533,019; Ezra Weisman -- $437,180; and Samuel
Eichenbaum -- $302,494.
In addition, the Corporation has entered into a termination agreement with
Samuel Eichenbaum which provides for a payment equal to 100% of his current
annual base salary at the time of such termination if he is involuntarily
terminated for any reason after the occurrence of a change in control of the
Corporation.
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 $150,000
per year payable upon retirement at Normal Retirement Date:
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 $16,948 $34,480 $52,012 $66,778 $72,778
$180,000 $16,948 $34,480 $52,012 $66,778 $72,778
$200,000 $16,948 $34,480 $52,012 $66,778 $72,778
$220,000 $16,948 $34,480 $52,012 $66,778 $72,778
$240,000 $16,948 $34,480 $52,012 $66,778 $72,778
$260,000 $16,948 $34,480 $52,012 $66,778 $72,778
8
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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, 1996,
the years of credited service under the Pension Plan for Messrs. David Freedman;
Ezra Weisman and Samuel Eichenbaum are 50 and 34 and 11, respectively. During
the fiscal year ended December 31, 1996, benefits under the Pension Plan were
paid to David Freedman in the amount of $62,564.
OPTIONS EXERCISED DURING 1996 AND FISCAL YEAR END OPTION VALUES
The following table sets forth information concerning the 1996 fiscal
year-end value of unexercised options for each of the Named Executive Officers
based upon the closing price of $7.00 per share on December 31, 1996.
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised in
Shares Options/SARs the Money Options/SARs
Acquired Value ----------------------------- --------------------------------
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
----------------- ------------- ---------- ------------- ------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
David Freedman -- -- -- -- -- --
Ezra Weisman 10,500 $4,438 26,250 10,500 $36,950 $22,300
Samuel Eichenbaum 2,100 $ 888 8,400 12,600 $17,300 $24,700
</TABLE>
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
and 401(k) plans, that are generally available to all of the Corporation's
employees.
Base salary levels for the Corporation's executive officers, including the
Chief Executive Officer, 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 and are measured against published survey
information. In reviewing the salary levels of the executive officers and the
Chief Executive Officer 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, 1996, the Compensation of Ezra Weisman, the
President and Chief Executive Officer of the Company, consisted of a salary of
$164,800. Under the terms of his Employment Agreement, Mr. Weisman is entitled
to receive a bonus if certain operating goals are exceeded. A bonus of $14,490
was paid to Mr. Weisman for the year ended December 31, 1996. Mr. Weisman did
not participate in any decisions related to his compensation.
Submitted by the
Compensation Committee of the Board of Directors
Ernest Gross
Kiyoshi Masuda
Dr. David Pramer
9
<PAGE>
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, 1996, 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, 1991 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
$225--------------------------------------------------------------------------
$200--------------------------------------------------------------------------
$
D $175-------------------------------------------------------------------------@
O
L @
L $150---------------------------------------------------------$----------------
A
R
S $125--------------------------------------------------------------------------
$ $ #
$ @ #
$100#$@--------------------------#-------------@------------------------------
#@ #
$75--------------------------------------------------------------------------
$50--------------------------------------------------------------------------
1992 1992 1993 1994 1995 1996
------------------------------------------------------
# THE CORPORATION @ MG SCIENTIFIC
INSTRUMENTS GROUP
INDEX
$ MEDIA GENERAL INDEX
------------------------------------------------------
<TABLE>
<CAPTION>
========================================================================================
1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------
The Corporation 100 92.00 98.00 108.00 92.75 118.61
- ----------------------------------------------------------------------------------------
MG Industry Group 401 -- Scientific
Instruments Index 100 94.12 104.05 100.97 157.02 173.79
- ----------------------------------------------------------------------------------------
Media General Index 100 104.00 119.39 118.39 153.50 185.38
========================================================================================
</TABLE>
10
<PAGE>
ITEM 2. PROPOSAL TO AMEND THE 1991 NONQUALIFIED STOCK OPTION PLAN TO RESERVE
AN ADDITIONAL 200,000 SHARES FOR ISSUANCE THEREUNDER
In 1992, the Corporation adopted, effective as of December 1991, the 1991
Nonqualified Stock Option Plan (the "1991 Plan"). The 1991 Plan provides for the
granting of options to purchase shares of the Corporation's Common stock, par
value $0.0625 per share, to be drawn from authorized but unissued stock. Four
hundred twenty thousand (420,000) shares were previously available for options
pursuant to the 1991 Plan, including 210,000 shares approved by the
Corporation's shareholders in May, 1995, but the number of shares would be
appropriately adjusted in the event of certain changes in the capital structure
of the Corporation. All amounts have been adjusted to reflect a 5% stock
dividend paid on May 15, 1996. As options have been granted with respect to a
large portion of those 420,000 shares, Management desires to amend the 1991 Plan
to increase the total number of shares available for options to 620,000, thus
adding 200,000 more shares to the 1991 Plan. The purpose of the 1991 Plan
continues to be to attract and retain the services of experienced and talented
persons as executives, managers and supervisors of the Corporation. All of the
above shares will be adjusted to give effect to a 10% stock dividend payable May
15, 1997, on the Corporation's Common stock.
The following is a brief summary of the 1991 Plan. The complete text is
attached as Exhibit A hereto.
DESCRIPTION OF THE STOCK OPTION PLAN
The 1991 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 1991 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 1991 Plan. The Board of Directors is able to amend the 1991
Plan without further approval by the shareholders, except insofar as such
approval is required by the 1991 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 1991 Plan after December 11, 2001.
Options granted under the 1991 Plan may have an exercise period of up to ten
years. The 1991 Plan provides that no option can be exercised within the first
year following the date of grant. Twenty percent of the options granted become
exercisable on each of the first five anniversaries of the date of grant.
The 1991 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, 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 six 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 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.
Options covering 139,872 shares remain available for grant under the 1991
Plan. No determination has been made with respect to future recipients of
options under the 1991 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
1991 Plan, to be covered by such options.
11
<PAGE>
Options granted under the 1991 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 grantee 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 1991 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 1991 Plan.
The closing price of the Common stock of the Corporation on March 25, 1997,
as quoted on the Nasdaq was $6-5/8 per share.
Management recommends a vote "FOR" the amendment.
ITEM 3. PROPOSAL TO AMEND 1989 STOCK OPTION PLAN FOR NONEMPLOYEE DIRECTORS TO
RESERVE AN ADDITIONAL 100,000 SHARES FOR ISSUANCE THEREUNDER
In 1989, the Corporation adopted, effective April 11, 1989, the 1989 Stock
Option Plan for Nonemployee Directors (the "1989 Plan"). The following is a
brief summary of the 1989 Plan. The complete text is attached as Exhibit B
hereto.
DESCRIPTION OF THE STOCK OPTION PLAN
The 1989 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. One hundred five thousand (105,000) shares are
subject to the 1989 Plan, but the number of shares would be appropriately
adjusted in the event of certain changes in the capital structure of the
Corporation. All amounts have been adjusted to reflect a 5% stock dividend paid
on May 15, 1996. Shareholders will have no pre-emptive rights with regard to
shares allotted to the 1989 Plan. The purpose of the 1989 Plan is to attract and
retain the services of experienced and talented persons as directors of the
Corporation. All of the above shares will be adjusted to give effect to a 10%
stock dividend payable May 15, 1997, on the Corporation's Common stock.
The 1989 Plan is administered by a Committee appointed by the Board. The
Committee consists of at least three persons who may, but need not, be Directors
of the Corporation and who are not eligible to participate in the 1989 Plan or
other stock-related plans of the Corporation. 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 1989 Plan. The Board of Directors is able to amend the 1989
Plan without further approval by the Shareholders, except insofar as such
approval is required by the 1989 Plan for amendments which materially modify the
eligibility requirements for receiving options, increase the total number of
shares covered by the 1989 Plan, or otherwise materially increase the benefits
accruing to optionees.
No options may be granted under the 1989 Plan after April 30, 1999. Options
granted under the 1989 Plan may have an exercise period of up to ten years. The
1989 Plan provides that no option can be exercised within the first year
following the date of grant. Twenty percent of the options granted become
exercisable on each of the first five anniversaries of the date of grant.
The 1989 Plan provides that when an optionee ceases to be a director of the
Corporation for any reason other than death, 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 directorship due to death, all options may be
exercised by the executor, administrator or beneficiary of the estate of such
optionee, for a period of six 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.
12
<PAGE>
The exercise price per share of each option will not be less than eighty-five
percent (85%) of 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 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.
Options covering 1,028 shares remain available for grant under the 1989 Plan.
No determination has been made with respect to future recipients of options
under the 1989 Plan, and it is not possible to specify the directors to whom
such options may be granted, or the number of shares, within the limitations of
the 1989 Plan, to be covered by such options.
Options granted under the 1989 Plan are not intended to be stock options of
the various types specifically referred to in the Internal Revenue Code of 1986,
as amended, but, instead, would be considered as non-statutory options taxable
under established general principles of tax law. 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 grantee of a
non-qualified 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, 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 covering the issuance of shares pursuant to exercise of
options granted under the 1989 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 100,000
additional shares to be added to the 1989 Plan.
The closing price of the Common Stock of the Corporation on March 25, 1997,
as quoted on Nasdaq was $6-5/8 per share.
MANAGEMENT RECOMMENDS A VOTE "FOR" THE AMENDMENT.
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, 1996, this
firm earned commissions in the amount of $120,738 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.
Bernard Leon holds a less than 1% interest in DGI BioTechnologies, L.L.C.
(DGI), the Corporation's majority-owned and fully funded entity seeking to
develop a novel, small molecule drug discovery platform. Mr. Leon also acts as a
consultant to DGI and in such capacity was paid $4,964 by DGI during the year
ended December 31, 1996. Mr. Leon had been a minority shareholder in the
corporation which sold the DGI technology to the Corporation.
The Corporation loaned Ezra Weisman $62,500 in December 1996 for 10 years
without interest; the proceeds of the loan were paid to the Corporation by Mr.
Weisman in order to exercise options for 10,500 shares of the Corporation's
Common stock. These shares of stock have been pledged to the Corporation to
secure the loan.
13
<PAGE>
AUDITORS
The Corporation has selected KPMG Peat Marwick LLP to be the independent
auditors for the Corporation for the fiscal year ending December 31, 1997.
A representative of KPMG Peat Marwick LLP is expected to be present at the
meeting with the opportunity to make a statement if they desire to do so and to
respond to appropriate questions.
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.
1998 SHAREHOLDER PROPOSALS
Shareholder proposals submitted for inclusion in the Proxy Statement of the
Board of Directors for the 1998 Annual Meeting of Shareholders, must be received
by the Corporation at 44 Talmadge Road, Edison, New Jersey 08818 on or before
December 23, 1997.
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
14
<PAGE>
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 for the year ended
December 31, 1996, 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
<PAGE>
APPENDIX "A"
NEW BRUNSWICK SCIENTIFIC CO., INC.
1991 NONQUALIFIED STOCK OPTION PLAN
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. 1991 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 [620,000 if the amendment is approved] 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, including
treasury shares. 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.
A-1
<PAGE>
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.
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").
A-2
<PAGE>
5.3 Installment Exercise. No Option may be exercised, in whole or part, until
one year after the date upon which such Options are granted (the "Grant Date").
Options shall thereafter become exercisable in installments. Twenty percent
(20%) of the Options granted shall become exercisable one (l) 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 (5) years. 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, rather than fractional shares. 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 in cash or by check, bank
draft, or postal or express money order. At the Committee's discretion, all or
part of the Option Price may be paid by delivery of shares of Common stock of
the Company having an aggregate fair market value equal to the portion of the
Option Price not otherwise satisfied in cash or by check. The Committee shall
determine acceptable methods for tendering shares of Common stock as payment
upon exercise of an Option and may impose such limitations and prohibitions on
the use of such stock to exercise an Option as it deems appropriate.
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 six (6) 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 six 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 six
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 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.
A-3
<PAGE>
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.
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.
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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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<PAGE>
APPENDIX "B"
NEW BRUNSWICK SCIENTIFIC CO., INC.
1989 STOCK OPTION PLAN
FOR
NONEMPLOYEE DIRECTORS
1. PURPOSE
The New Brunswick Scientific Co., Inc. 1989 Stock Option Plan for Nonemployee
Directors (the "Plan") is intended to enable New Brunswick Scientific Co., Inc.
(the "Company") to attract and retain experienced and qualified independent
directors and to provide them with incentives to promote the best interests of
the Company by enabling and encouraging them, through the grant of nonqualified
stock options (the "Options") to acquire Company stock.
As used in the Plan, the term "nonqualified stock options" means options
which 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").
The term "related corporation" means any corporation which is a "subsidiary
corporation" of the Company as defined in Section 425(f) of the Code.
2. ADMINISTRATION
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") which shall be composed of at least three (3) persons who
may, but need not be members of the Board of Directors. No member of the
Committee shall be eligible to participate nor shall have been eligible to
participate in the Plan (or in any other plan of the Company or any of its
affiliates entitling the participants therein to acquire stock, stock options or
stock appreciation rights of the Company or any of its affiliates) for a period
of at least one (I) year prior to his or her election to serve on the Committee.
Subject to the terms of the Plan, the Committee shall have the authority to
determine the persons to whom nonqualified stock options shall be granted under
the Plan and to recommend the date of grant and the other terms and conditions
thereof. The Committee shall have the 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. 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 hereunder, except those resulting
from such member's willful misconduct.
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 any 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.
3. ELIGIBILITY
The persons eligible to participate in the Plan shall be the nonemployee
directors (except any director who may be ineligible as a result of his
appointment to the Committee) of the Company who may be designated by the
Committee. The persons eligible to receive Options under the Plan are
hereinafter referred to as "Eligible Individuals".
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4. STOCK SUBJECT TO THE PLAN
Subject to adjustment in accordance with the provisions of Section 10 hereof,
100,000 shares (205,000 if the amendment is approved) of Common stock, par value
$.0625 per share of the Company ("Shares"), shall be available for the grant of
Options under the Plan. Shares issuable under the Plan shall be authorized but
unissued Shares of the Company, including treasury shares.
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.
5. GRANTS AND PRICE OF OPTIONS
(a) Grants. From time to time until the expiration or earlier termination of
the Plan, the Committee may grant Options to Eligible Individuals (such grantees
are hereinafter referred to as "Optionees") under the Plan. Options granted
pursuant to the Plan to such Eligible Individuals shall be in such form as the
Committee shall from time to time approve, and shall be subject to the terms and
conditions of this Plan.
(b) 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 eighty-five percent
(85%) of 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 (i) the last
reported closing price of a share as quoted by the Nasdaq and reported in The
Wall Street Journal (or other reputable financial publication in the event The
Wall Street Journal is unavailable); or if at any time the Company's Common
stock is not eligible for quotation on Nasdaq; (ii) 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.
6. TERM OF OPTIONS
Unless earlier terminated pursuant to any provision hereof, all Options
granted under the Plan shall expire on a date which is no later than the date
that is ten (10) years after the date of grant of such Option (the "Expiration
Date").
7. EXERCISE AND PAYMENT
(a) Exercise. Options shall become exercisable in installments. Twenty
percent (20%) of the Options granted shall become exercisable one (I) year after
the date upon which such Options are granted (the "Grant Date") and twenty
percent (20%) shall become exercisable each year thereafter until all Options
are exercisable at the end of five (5) years. Notwithstanding the foregoing
sentence, all options shall immediately become exercisable upon the death of an
Optionee. Except as otherwise provided in Section 8 below, Options shall only be
exercisable by an Optionee while he or she remains a director of the Company. An
Option which becomes exercisable pursuant to the foregoing provisions may be
exercised at any time, in whole or in part, up to the expiration or termination
of the Option; provided, however, that no Option may be exercised after ten (10)
years after the Grant Date. Options may be exercised, in whole or in part, from
time to time by giving written notice of exercise to the Company at its
principal office, specifying the number of Shares to be purchased and
accompanied by payment in full of the aggregate purchase price for such Shares.
All Options may be exercised as to less than the full amount of Shares available
at the time of exercise, but must be exercised in multiples of full Shares,
rather than fractional Shares.
(b) Payment. The Option Price shall be payable in cash or by check, bank
draft, or postal or express money order.
8. TERMINATION OF OPTIONS AND TRANSFERABILITY
(a) Termination of Optionee's Directorship. If an Optionee ceases to be a
director of the Company for any reason other than death (as described in
Subsection (b) below) prior to the Expiration Date of any Options, such Option
shall terminate immediately upon such cessation.
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<PAGE>
(b) Death of Optionee. If an Optionee dies while a director 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 six (6) 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 death.
(c) 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.
9. 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.
10. ADJUSTMENTS
(a) The number of Shares which may be issued under the Plan, as stated in
Section 4 hereof, 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 to reflect:
(i) any stock dividend or stock split, (ii) any subdivision or combination of
outstanding shares or (iii) 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.
(b) In the event the Company is liquidated or a corporate transaction
described in Section 425(a) of the Code and the Treasury Regulations issued
thereunder occurs (such as, for example, a merger, consolidation, acquisition of
property or stock, separation, or reorganization), each outstanding Option shall
be assumed by the surviving or successor corporation, if any.
11. AMENDMENT OR DISCONTINUANCE OF THE PLAN
The Board at any time, and from time to time, may suspend or discontinue the
Plan or amend it in any respect whatsoever, provided, however, that, without the
approval of the holders of at least a majority of the outstanding Shares, the
Plan may not be amended so as to materially (a) increase the benefits accruing
to participants under the Plan; (b) increase the number of Shares which may be
issued under the Plan; (except for adjustments permitted or required under
Section 10 hereof): (c) modify the requirements as to eligibility for
participation in the Plan; or (d) materially increase the cost of the Plan to
the Company; and provided further, that no such suspension, discontinuance or
amendment shall materially impair the rights of any holder of an outstanding
Option without the consent of such holder.
12. 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.
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<PAGE>
13. SHAREHOLDER APPROVAL
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.
14. NO OBLIGATION TO EXERCISE OPTION
The granting of an Option shall impose no obligation upon an Optionee to
exercise such Option.
15. TERMINATION OF PLAN
No Options may be granted after April 30, 1999, 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.
16. MISCELLANEOUS PROVISIONS
(a) Rights as a Stockholder. An Optionee shall have no rights as a
stockholder with respect to any Shares covered by his Option until the issuance
of a stock certificate to him representing such Shares.
(b) 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 s all 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.
(c) 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.
(d) Governing Law. This Plan shall, to the maximum extent possible, be
construed in a manner consistent with the Code and shall otherwise be
governed by the laws of the State of New Jersey.
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<PAGE>
This Proxy is Solicited on Behalf of the Board of Directors
NEW BRUNSWICK SCIENTIFIC CO., INC.
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS
MAY 29, 1997
The undersigned hereby constitutes and appoints David Freedman, Sigmund
Freedman and Ezra Weisman, 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 29, 1997, and at any adjournment thereof.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE
<PAGE>
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 ----- -------- ------------
Class I Bernard Leon 2000 Annual Meeting
Class I Kiyoshi Masuda 2000 Annual Meeting
Class I Ernest Gross 2000 Annual Meeting
For, except vote withheld from the following nominee(s)
- -------------------------------------------------------
FOR AGAINST ABSTAIN
2. The approval and / / / / / /
adoption of an
amendment to the
New Brunswick Scientific Co., Inc. 1991
Nonqualified Stock Option Plan Increasing
the number of authorized shares by
200,000.
3. The approval and
adoption of an / / / / / /
amendment to the
New Brunswick
Scientific Co., Inc. 1989 Stock Option
Plan for NonemployeE Directors increasing
the number of authorized shares by
100,000.
Management Recommends A Vote FOR
Proposals 2 and 3 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 two or more
persons all should sign.
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