<PAGE>
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 /X/
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 CO., INC.
- -----------------------------------------------------------------------------
(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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4) Proposed maximum aggregate value of transaction:
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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:
___________________________________________________________________________
<PAGE>
NEW BRUNSWICK SCIENTIFIC CO., INC.
------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 30, 2000
------------
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 Tuesday, May 30, 2000 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 and two Class III directors of the Corporation to terms of two
years.
2. To approve and adopt an amendment to the New Brunswick Scientific Co.,
Inc. 1998 Nonqualified Stock Option Plan for Ten Percent
Shareholder-Directors increasing the number of authorized shares by
100,000.
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 14, 2000,
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, 1999 is being sent to you herewith.
By Order of the Board of
Directors
ADELE LAVENDER, Secretary
April 17, 2000
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 Tuesday, May 30, 2000 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 17, 2000.
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, 2000,
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 5,494,053 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, three directors designated as
Class I directors are to be elected at the 2000 Annual Meeting and two
directors who have been appointed as Class III directors (one to fill a vacancy
and another to fill an unexpired term) must also stand for election. The Class
I directors to be elected shall serve terms of three years and the Class III
directors to be elected shall complete the remaining two years of the three
year terms.
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.
1
<PAGE>
The following table presents the name, age and principal occupation of each
nominee and present director.
NOMINEES FOR TERMS EXPIRING AT THE 2003 ANNUAL MEETING (CLASS I)
<TABLE>
<CAPTION>
First
Became
Name Age Principal Occupation Director In
- ---- ----- -------------------- -----------
<S> <C> <C> <C>
Peter Schkeeper ................. 55 President of Schkeeper Inc. 1999
Kiyoshi Masuda .................. 75 President of American & Foreign Market Research, Inc.; 1980
President of FerriShield, Inc.
Ernest Gross .................... 81 Attorney in Private Practice 1984
NOMINEES FOR TERMS EXPIRING AT THE 2002 ANNUAL MEETING (CLASS III)
Kenneth Freedman (1) ............ 41 General Manager and Director/Treasurer of Auricle 1999
Communications
Dr. Jerome Birnbaum ............. 60 Co-founder and Director of Achillion Pharmaceuticals, 2000
Inc. and Pharmaceutical R&D Consultant
Terms Expiring at the 2001 Annual Meeting (Class II)
Sigmund Freedman (1)(2) ......... 83 Treasurer of the Corporation 1958
Martin Siegel ................... 72 Chairman of the Board of Valiant International Multimedia 1980
Corporation
Dr. David Pramer ................ 77 Executive Assistant for Research Policy and 1962(3)
Administration, Rutgers University
Term Expiring at the 2002 Annual Meeting (Class III)
David Freedman (1)(2) ........... 79 Chairman of the Board of the Corporation 1958
</TABLE>
- ------------
(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
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.
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 has been appointed by the Board of Directors to fill the
unexpired term of Ezra Weisman who resigned from the Board in January 2000.
Currently, Dr. Birnbaum 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.
2
<PAGE>
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.
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 48-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.
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.
Bernard Leon, who had served as a director of the Corporation since 1996
passed away in March 2000.
Committees
The Board of Directors has an Audit Committee, consisting of Messrs.
Siegel, Leon (until his death) 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 three
times during the year ended December 31, 1999. The Board has a Compensation
Committee which consists of Messrs. Masuda, Pramer, Leon (until his death) and
Gross which met eight times during the year ended December 31, 1999. 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, Weisman (until he left the Company in January 2000), 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 24 times during the
year ended December 31, 1999. 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, 1999. 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 must be
submitted in writing to the Secretary of the Corporation by December 22, 2000
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, 1999, there were nine meetings of the
Board of Directors. Mr. Leon did not attend three of the Board Meetings held
during 1999.
3
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information, as of April 14, 2000,
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.
<TABLE>
<CAPTION>
Amount and
Name of Nature of
Beneficial Beneficial Percent of
Owner Ownership Class
- ---------- ---------- ----------
<S> <C> <C>
Peter Schkeeper ......................................... --
Kiyoshi Masuda .......................................... 39,809(1) (2)
Ernest Gross ............................................ 39,625(1)(3) (2)
Kenneth Freedman (4) .................................... 31,597 (2)
Dr. Jerome Birnbaum ..................................... --
Sigmund Freedman (4) .................................... 785,431(5) 14.3%
Martin Siegel ........................................... 25,070(1) (2)
Dr. David Pramer ........................................ 29,995(1)(6) (2)
David Freedman (4) ...................................... 793,060(5)(7) 14.4%
Ezra Weisman ............................................ 35,356(8) (2)
Samuel Eichenbaum ....................................... 25,994(9) (2)
All directors and executive officers as a group ......... 1,805,937(10) 32.9%
</TABLE>
- ------------
(1) This figure includes respective shares which may be acquired within 60 days
under a stock option plan for nonemployee directors as follows: Mr. Masuda
-- 16,753, Mr. Gross -- 29,569; Mr. Siegel -- 2,014; and Dr. Pramer --
23,908.
(2) Less than 1 percent.
(3) This figure includes 1,397 shares owned by Mr. Gross' wife and 8,659 shares
owned jointly by Mr. Gross and his wife.
(4) 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 29.3% of the Common stock of
the Corporation including 2.1% attributable to shares which may be
acquired within 60 days under stock option agreements.
(5) This figure includes 58,630 shares which may be acquired within 60 days
under a stock option agreement and under the 1998 Stock Option Plan for
10% Shareholder-Directors.
(6) This figure includes 1,397 shares owned by Dr. Pramer's wife and 4,690
shares owned jointly by Dr. Pramer and his wife.
(7) This figure includes 123,490 shares owned by Mr. Freedman's wife directly
but does not include 54,017 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.
(8) Mr. Weisman left the Corporation in January 2000.
(9) This figure includes 4,994 shares which may be acquired by Mr. Eichenbaum
within 60 days under the 1991 Nonqualified Stock Option Plan for Officers
and Key Employees.
(10) This figure includes 194,498 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, 2000,
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) 734,430(2)(3) 13.4%
44 Talmadge Road
Edison, New Jersey 08818
Sigmund Freedman (1) 726,801(3) 13.3%
44 Talmadge Road
Edison, New Jersey 08818
The TCW Group, Inc. 306,858 5.6%
865 South Figueroa Street
Los Angeles, California 90017
Dimensional Fund Advisors, Inc. 328,576 6.0%
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 26.6% of the Common stock of the Corporation.
(2) This figure includes 123,490 shares owned by Mr. Freedman's wife directly
but does not include 54,017 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 58,630 shares which may be acquired within 60 days
under a stock option agreement and under the 1998 Stock Option Plan for
10% Shareholder-Directors.
5
<PAGE>
Executive Officers
The following table presents the name, age and present office or position
of each of the Corporation's executive officers:
<TABLE>
<CAPTION>
Name Age Present Office or Position (1)
----- ----- ------------------------------
<S> <C> <C>
David Freedman .............. 79 Chairman of the Board
Sigmund Freedman ............ 83 Treasurer
Adele Lavender (2) .......... 75 Secretary
Samuel Eichenbaum ........... 60 Vice President, Finance and Chief Financial Officer
Lee Eppstein (3) ............ 57 Vice President, Technology
</TABLE>
- ------------
(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.
(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.
(3) Mr. Eppstein was appointed as Vice President, Technology in February 2000.
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, 1999, all filing requirements applicable to its officers,
directors and greater than ten percent beneficial owners were complied with on
a timely basis.
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 $100,000 for the last fiscal year (the
"Named Executive Officers").
6
<PAGE>
SUMMARY COMPENSATION TABLE
Annual Compensation(1)
<TABLE>
<CAPTION>
Name and
Principal
Position Year Salary ($) Bonus Options (#) (2)
- --------- ---- ---------- ----- ---------------
<S> <C> <C> <C> <C>
David Freedman 1999 $235,500 -- 22,000
Chairman of the Board 1998 223,500 -- 27,500
1997 223,500 -- 66,550
Sigmund Freedman 1999 101,000 -- 22,000
Treasurer 1998 98,000 -- 27,500
1997 98,000 -- 66,550
Ezra Weisman (3) 1999 200,000 -- --
President and Chief Executive Officer 1998 190,000 -- 22,000
1997 190,000 $34,236 60,500
Samuel Eichenbaum 1999 122,173 -- --
Vice President, Finance 1998 103,461 -- 16,500
and Chief Financial Officer 1997 101,120 35,000 4,235
</TABLE>
- ------------
(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.
(3) Mr. Weisman left the Corporation in January 2000 and under the terms of a
settlement agreement in connection therewith, will receive annually, for
three years, amounts equal to his 1999 salary 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. The following table indicates the number of options granted to eligible
Directors in 1999 and the exercise price thereof of the Corporation's Common
stock on the date of grant.
Number of Shares
Granted At
Name $4.55 Per Share (1)
---- -------------------
Martin Siegel ................... 5,500
Dr. David Pramer ................ 5,500
Kiyoshi Masuda .................. 5,500
Ernest Gross .................... 5,500
- ------------
(1) Fair market value on the date of grant.
Mr. Weisman, formerly President and Chief Executive Officer of the
Corporation left the Company in January 2000. The Corporation loaned Mr.
Weisman $62,500 in December 1996 and $102,000 in August 1998 for 10 years
without interest in order to exercise options for 13,975 and 27,951 shares,
respectively, of the Corporation's Common stock. The loans were repaid by Mr.
Weisman in February 2000.
7
<PAGE>
The Corporation entered into an Employment and Consulting Agreement (the
"Agreement") with Mr. David Freedman on January 1, 1999. The employment portion
of the Agreement (the "Employment Term") runs for a term of three years and
provides for payment of an annual salary of $235,500, with increases and
bonuses at the Board's discretion, business expenses and use of a company car.
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, (DGI), the
Corporation's majority-owned drug discovery operation, in 1996 each received
options to purchase 50,000 membership interests in DGI. Prior to leaving the
Corporation in January 2000, Mr. Weisman exercised his options.
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 (excluding Mr. Weisman) assuming that such
terminations occurred as of March 31, 2000 are as follows: David Freedman -
$570,061; Sigmund Freedman - $248,750; and Samuel Eichenbaum - $289,856.
In addition, the Corporation has entered into a termination agreement with
Samuel Eichenbaum which provides for a payment equal to 200% 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. The Corporation loaned Mr. Eichenbaum $51,250 in August 1998 for
10 years without interest in order to exercise options for 13,975 shares of the
Corporation's Common stock. These shares of stock have been pledged to the
Corporation to secure the loan.
All Other Compensation
As a result of the interest-free loans to Messrs. Weisman and Eichenbaum
(In order to exercise certain stock options) the Corporation has foregone
$10,544 and $3,275, respectively, 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
$160,000 per year payable upon retirement at Normal Retirement Date:
8
<PAGE>
Estimated Annual Benefits
Years of Continuous Service
<TABLE>
<CAPTION>
Annual Salary 10 20 30 40 45
------------- -------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
$ 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 $18,108 $36,840 $55,572 $71,338 $77,738
$200,000 $18,108 $36,840 $55,572 $71,338 $77,738
$220,000 $18,108 $36,840 $55,572 $71,338 $77,738
$240,000 $18,108 $36,840 $55,572 $71,338 $77,738
$260,000 $18,108 $36,840 $55,572 $71,338 $77,738
</TABLE>
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, 1999,
the years of credited service under the Pension Plan for Messrs. David
Freedman; Sigmund Freedman, Ezra Weisman and Samuel Eichenbaum are 53, 53, 37
and 14, respectively. During the fiscal year ended December 31, 1999, benefits
under the Pension Plan were paid to David and Sigmund Freedman in the amounts
of $62,564 and $68,675, respectively.
Options Granted During 1999
The following table sets forth information for the Named Executive
Officers with respect to grants of options to purchase Common stock of the
Company made during the fiscal year ended December 31, 1999.
STOCK OPTION GRANTS IN FISCAL 1999
Individual Grants
<TABLE>
<CAPTION>
Potential Realizable Value
at Assumed Annual Rates
% of of Stock Price
Total Options Exercise Appreciation for 5-Year
Granted Price Per Expira- Option Term ($)(2)
Options in Fiscal Share tion ----------------------------------
Grantee Name Granted (#) Year ($/Sh.) Date 5% 10%
- ------------ ------------ ------------- --------- ----------- --------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
David Freedman (1) 22,000 28.6% $ 4.55 03/17/05 $ 27,628 $ 61,051
Sigmund Freedman 22,000 28.6% $ 4.55 03/17/05 $ 27,628 $ 61,051
All Shareholders (3) -- -- -- -- $ 7,566,799 $ 16,720,648
All Optionees (4) 77,000 100.0% $ 4.55 (5) $ 96,699 $ 213,679
% of Total Shareholder
Value -- -- -- -- 1.3% 1.3%
</TABLE>
- ------------
(1) Consists of stock options granted pursuant to a non-qualified stock option
plan at fair market value on the date of grant, exercisable 50% upon grant
with the balance exercisable in five equal annual installments commencing
one year after date of grant, and expires six years after date of grant.
9
<PAGE>
(2) These amounts represent certain assumed rates of appreciation for a given
exercise price only. Actual gains, if any, on stock option exercises and
Common stock holdings are dependent on the future performance of the
Common stock. There is no assurance that the amounts reflected will be
realized.
(3) Based on an aggregate of 5,344,000 shares of Common stock outstanding as of
December 31, 1999, and a price per share of $5.125, the fair market value
of the Company's Common stock at the close of business on such date.
(4) Exclusive of stock options granted to nonemployee directors, see page 7.
(5) Represents the actual exercise price of options granted during 1999;
Options granted during 1999 will expire on the dates in 2005 equal to six
years from the dates of grant.
Options Exercised During 1999 and Fiscal Year End Option Values
The following table sets forth information concerning the 1999 fiscal
year-end value of unexercised options for each of the Named Executive Officers
based upon the closing price of $5.125 per share on December 31, 1999.
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised in
Shares Options/SARs the Money Options/SARs ($)
Acquired Value ------------------------------- ------------------------------
Name on Exercise Realized($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ------------- ------------- ------------- --------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
David Freedman -- -- 11,000 11,000 $ 6,375 $6,375
Sigmund Freedman -- -- 11,000 11,000 $ 6,375 $6,375
Ezra Weisman 13,975 -- 11,387 17,600 $12,108 $7,192
Samuel Eichenbaum -- -- 18,969 15,741 $19,507 $5,817
</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, 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, 1999, the compensation of Ezra Weisman,
formerly the President and Chief Executive Officer of the Corporation,
consisted of a salary of $200,000. Mr. Weisman left the Corporation in January
2000.
10
<PAGE>
For the year ended December 31, 1999, the compensation of David Freedman,
the Chairman of the Board of the Corporation, consisted of a salary of
$235,500. In addition, Mr. Freedman received 22,000 nonqualified stock options
exercisable at $4.55 per share, the fair market value on the date of grant. Mr.
Freedman has an Employment Agreement which expires December 31, 2001.
Mr. Weisman and Mr. Freedman did not participate in any decisions related
to their compensation.
Submitted by the
Compensation Committee of the Board of Directors
Ernest Gross
Kiyoshi Masuda
Dr. David Pramer
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, 1999, this firm earned commissions in the amount of $141,408 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 Ezra Weisman $62,500 in December 1996 and $102,000
in August 1998 for 10 years without interest in order to exercise options for
13,975 and 27,951 shares, respectively, of the Corporation's Common stock.
These loans were repaid by Mr. Weisman in February 2000.
The Corporation loaned Samuel Eichenbaum $51,250 in August 1998 for 10
years without interest in order to exercise options for 13,975 shares of the
Corporation's Common stock. These shares of stock have been pledged to the
Corporation to secure the loan.
11
<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, 1999, 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, 1994 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
[GRAPH OMITTED]
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
1994 1995 1996 1997 1998 1999
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
The Corporation 100 85.88 109.82 152.10 113.92 107.05
- ----------------------------------------------------------------------------------------------
MG Industry Group 401 - Scientific
Instruments Index 100 137.35 160.36 198.48 199.57 322.44
- ----------------------------------------------------------------------------------------------
Media General Index 100 129.66 156.58 203.33 248.56 303.21
- ----------------------------------------------------------------------------------------------
</TABLE>
12
<PAGE>
ITEM 2. PROPOSAL TO AMEND THE 1998 NONQUALIFIED STOCK OPTION PLAN FOR TEN
PERCENT SHAREHOLDER-DIRECTORS
In 1998, the Corporation adopted the 1998 Nonqualified Stock Option Plan
for Ten Percent Shareholder-Directors (the "1998 Plan"). The 1998 Plan provides
for the granting of options to purchase shares of the Corporation's Common
stock, par value $.0625 per shares, to be drawn from authorized but unissued
stock. One-hundred-ten-thousand (110,000) shares were previously available for
options pursuant to the 1998 Plan which were approved by the Corporation's
shareholders in May, 1998, 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 10% stock dividend
paid on May 14, 1999. As options have been granted with respect to a large
portion of those 110,000 shares, Management desires to amend the 1998 Plan to
increase the total number of shares available for options to 210,000, thus
adding 100,000 more shares to the 1998 Plan. The purpose of the 1998 Plan is to
enable the Corporation to retain the services of individuals with experience
and exceptional managerial and analytical talent. All of the above shares will
be adjusted to give effect to a 10% stock dividend payable May 15, 2000, on the
Corporation's Common stock.
The following is a brief summary of the proposed Plan. The complete text
is attached as Appendix A hereto.
Description of the Stock Option Plan
The 1998 Plan is administered by a Committee composed of members of the
Board, who are not employees of the Corporation and who are not eligible to
participate in the 1998 Plan. The Committee determines both the number of
optionees and the number of shares to be optioned to any individual under the
1998 Plan. The Board of Directors may amend the 1998 Plan without further
approval by the Shareholders, except insofar as such approval is required by
the 1998 Plan for amendments which materially modify the eligibility
requirements for receiving options, increase the total number of shares covered
by the 1998 Plan, or otherwise materially increase the benefits accruing to
optionees.
No options may be granted under the 1998 Plan after March 17, 2008.
Options granted under the 1998 Plan may have an exercise period of up to ten
years. The 1998 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. All options will immediately vest on the death of an optionee.
In the sole discretion of the Committee, it may accelerate the vesting
schedule of any options issued under the 1998 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 1998 Plan provides that when an Optionee ceases to be a director or
ten percent owner of the Corporation for any reason other than death, voluntary
retirement after attaining age 65 or disability prior to the expiration date of
any options, such unexercised options shall terminate as of the date of such
termination of directorship or ten percent ownership whichever is later.
If an optionee dies while a director or ten percent owner of the
Corporation or retires, all unexercised options shall remain exercisable for
(i) a period of twelve (12) months from the date of death or retirement, as the
case may be or (ii) until the expiration date, whichever occurs first. In the
case of death, the option may be exercised by the executor or administrator of
the optionee's estate or by any person who acquires the option from the
optionee by bequest or inheritance. 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
13
<PAGE>
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 (a) shares of the Corporation's
Common stock having an aggregate fair market value equal to the portion of the
option price outstanding or (b) the optionees personal recourse note with such
terms as the Committee may approve.
Options granted under the 1998 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 optionee 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 related to the ordinary income realized by the optionee.
The closing price of the Common stock of the Corporation on March 31,
2000, as quoted on the Nasdaq was $7.00 per share.
Management recommends a vote "FOR" the amendment.
AUDITORS
The Corporation has selected KPMG LLP to be the independent auditors for
the Corporation for the fiscal year ending December 31, 2000.
A representative of KPMG 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.
2001 SHAREHOLDER PROPOSALS
Shareholder proposals submitted for inclusion in the Proxy Statement of
the Board of Directors for the 2001 Annual Meeting of Shareholders, must be
received by the Corporation at 44 Talmadge Road, Edison, New Jersey 08818 on or
before December 23, 2000.
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 405 for the
year ended December 31, 1999, 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.
1998 NONQUALIFIED STOCK OPTION PLAN
FOR
TEN PERCENT SHAREHOLDER -- DIRECTORS
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. 1998 Nonqualified Stock Option Plan for Ten
Percent Shareholder -- Directors.
1.2 Purpose. The Plan is intended to enable New Brunswick Scientific Co.,
Inc. (the "Company") to retain the services of directors with experience and
exceptional 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 100,000 (210,000 if the amendment is approved) 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 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.
2.3 Successor Corporation. 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.
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
A-1
<PAGE>
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.
3.3 Committee Members. The Committee shall be composed of all of the
members of the Board of Directors who are not employees of the Company. 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 (1) year prior
to his or her election to serve on 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 Eligible
Individual of the Company who own ten percent (10%) or more of the Company's
Common Stock (except any person who may be ineligible as a result of his or her
appointment to 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 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 one hundred percent
(100%) 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 (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.
A-2
<PAGE>
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 shareowner. 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 Directorship or Ten Percent Shareholding. If an
Optionee ceases to be an Eligible Individual 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
directorship or cessation of ten percent (10%) ownership whichever is later.
5.8 Death of Optionee. If an Optionee dies while an Eligible Individual 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 an
Eligible Individual by reason of voluntary retirement after attaining the age
of 65 or by reason of disability and if on the date of termination of the
directorship or cessation of ten percent (10%) ownership whichever is later the
Optionee holds an Option that is not fully exercised, then for a period of
twelve months after the date of termination of the directorship or cessation of
ten percent (10%) ownership whichever is later 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 the
directorship or cessation of ten percent (10%) ownership whichever is later. If
such Optionee dies within twelve months after the date of termination of the
directorship or cessation of ten percent (10%) ownership whichever is later 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
A-3
<PAGE>
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.
5.11 Accelerated Vesting.
(a) Notwithstanding and in addition to 5.11(b) and (c) 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."
(c) All options shall immediately rest on the death of any Eligible
Individual.
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.
A-4
<PAGE>
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 or to retain him as a director, and the right of the
Company or its subsidiary corporations to terminate the directorship of any
person shall not be diminished or affected by reason of such grant of an
Option.
6.6 No Obligation to Exercise Option. The granting of an Option shall
impose no obligation upon an Optionee to exercise such Option.
6.7 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.
6.8 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.
6.9 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.
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 do 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.
A-5
<PAGE>
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Shareholders
NEW BRUNSWICK SCIENTIFIC CO., INC.
May 30, 2000
<PAGE>
<TABLE>
<CAPTION>
Please Detach and Mail in the Envelope Provided
- ------------------------------------------------------------------------------------------------------------------------------------
[X] Please mark your
votes as in this
example.
MANAGEMENT RECOMMENDS A VOTE FOR THE NOMINEES LISTED BELOW
<S> <C> <C> <C> <C> <C>
FOR WITHHELD
1. Election of [ ] [ ] CLASS NOMINEES TERM EXPIRES
Directors ----- -------- ------------
Class I Peter Schkeeper 2002 Annual Meeting
Class I Klyoshi Masude 2003 Annual Meeting
For, except vote withheld from the following nominee(s) Class I Ernest Gross 2003 Annual Meeting
Class III Kenneth Freedman* 2002 Annual Meeting
Class III Jerome Birnbaum** 2002 Annual Meeting
________________________________________________________ * To fill vacancy.
** To fill unexpired term.
2. The approval and adoption of an FOR AGAINST ABSTAIN
amendment to the New Brunswick [ ] [ ] [ ]
Scientific Co., Inc. 1999 Nonqualified
Stock Option Plan for Ten Percent
Shareholder-Directors.
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 two or more persons all should sign.
</TABLE>
