Exhibit 10.4.5


 


EMPLOYMENT AGREEMENT


 


This Employment Agreement dated as of the 1st day of November, 2005,
between Bio-Reference Laboratories, Inc, a New Jersey corporation with its
principal place of business at 481 Edward H. Ross Drive, Elmwood Park, New
Jersey 07407 (the “Company”) and Richard L. Faherty, residing at 36 Clark Road,
Port Jervis, NY 12771 (the “Employee”).


 


W I T N E S S E T H :


 


WHEREAS, the Company
is primarily engaged in the operation of a clinical laboratory in northern New
Jersey, and


 


WHEREAS, the Company
desires to avail itself of the Employee’s knowledge and experience and to
employ the Employee as Director of Information Services on the terms and
conditions hereinafter set forth, and


 


WHEREAS, the
Employee desires to be so employed by the Company on the terms and conditions
hereinafter set forth.


 


NOW, THEREFORE, in
consideration of the mutual covenants herein contained, the parties agree as
follows:


 


2.         Term of Employment.  The Company agrees to employ the Employee as
Director of Information Services, or in such other position of comparable
status and responsibility as the Company may from time to time direct and/or
desire, and the Employee agrees to accept such employment with the Company, for
a term commencing as of the date of full execution of this Agreement (the “Commencement
Date”) and continuing until October 31, 2009 or such later date to which
the Agreement is extended pursuant to Section 2 hereof (the “Expiration
Date”), or unless sooner terminated as provided in this Agreement (the “Employment
Period”).  As used in this Agreement, the
term “Employment Period” shall also include any periods for which this
Agreement is extended pursuant to Section 2 hereof.


 


2. Extension. This Agreement may be
extended beyond the Initial Expiration Date for additional one year periods at
the Company’s option. This Agreement shall be automatically extended at the end
of each Company fiscal year for an additional one year term beyond its then
Expiration Date unless the Company gives written notice to the Employee not
less than ten (10) days prior to the end of such fiscal year that it
elects not to extend the Agreement. (the “Non-Extension Notice”). By way of
example:


 


	
  If
  the

  	
   

  	
   

  	
   

  
	
  Company
  Fails to

  	
   

  	
   

  	
   

  
	
  Give
  Non-Extension

  	
   

  	
  Agreement Expiration Date

  	
   

  
	
  Notice
  Prior to

  	
   

  	
  Automatically Extended to

  	
   

  
	
  October 21

  	
   

  	
  October 31

  	
   

  
	
  2006

  	
   

  	
  2010

  	
   

  
	
  2007

  	
   

  	
  2011

  	
   

  
	
  2008

  	
   

  	
  2012

  	
   

  



 


Once the Company gives a Non-Extension
Notice, this Agreement shall terminate at the close of business on October 31
of the Company’s third fiscal year succeeding the fiscal year in which the
Non-Extension Notice was given. By way of example, if the Non-Extension Notice
is given in fiscal 2007 prior to October 21 of such year, the Agreement
shall terminate October 31, 2010.


 


3.   Duties.


 


a.               During the Employment Period, the
Employee shall perform such duties and exercise such powers relating to the
Company as are commensurate with those of a Director of Information Services
and shall have such other duties and powers as the Board of Directors or Management
shall from time to time assign to him, including by way of example, but not
limitation, duties with respect to any of the Company’s associated
companies.  As used in this Agreement,
the term “Associated Companies” shall mean any company (i) of which not
less than fifty (50%) percent of the equity is beneficially owned by the
Company or (ii) any subsidiary of such company, if any.


 


b.              During the Employment Period, the
Employee shall devote at least 90% of his working time during normal business
hours and his best efforts and ability to the business of the Company, shall
faithfully and diligently perform the duties of his employment with the Company
and shall do all reasonably in his power to promote, develop and extend the
business of the Company.


 


c.               During the Employment Period, the
Employee shall not, except as a representative of the Company or with the
written consent of the Company, be directly or indirectly engaged, concerned or
interested in the conduct of any other business competing or likely to compete
with the Company; provided, that notwithstanding anything contained in this
Agreement to the contrary, the Employee shall not be precluded from devoting a
reasonable amount of his time to:


 


	
  i.

  	
  Serving with the prior written approval of the Company as a director
  or member of a committee of any organization involving no conflict of
  interest with the business of the Company;

  
	
   

  	
   

  
	
  ii.

  	
  Managing his personal investments; provided, that such activities
  shall not materially interfere with the Employee’s performance of his duties
  hereunder; and

  



 


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  iii.

  	
  Participating in the management and maintenance of his privately held
  consulting service corporations (CH Consulting Services and MD Management &
  Support Services, Inc.), providing that such management and maintenance
  services do not interfere with the further terms and conditions of this
  Agreement.

  



 


d.              The Employee shall be employed at the
offices of the Company located in Elmwood Park, New Jersey; provided that the
Employee acknowledges and agrees that the proper performance of these duties
may make it necessary to spend reasonable periods of time in other parts of the
country.


 


4.   Compensation.


 


a.               During the Employment Period, the
Company shall pay the Employee as compensation for his services under this
Agreement, a minimum Base compensation at an annual rate of Four Hundred
Thousand ($400,000) Dollars (the “Base Compensation”).  The Base Compensation shall be payable in
equal installments in accordance with regular payroll procedures established by
the Company.  At the appropriate time
thereafter at least once during each fiscal year, the Company will consider
increasing the Employee’s compensation under this Agreement, based upon the
performance of the Company and of the Employee during the fiscal year with such
increase, if granted, taking effect as of the date determined by the Company.


 


b.              The Company shall lease and insure,
either under the Company’s policy or by reimbursement to the Employee, an automobile
for the benefit of the Employee.  The
Company shall be responsible for maintenance, gasoline, repair and all other
such costs but only to the extent such expenses relate to business use of the
automobile.  At the end of the lease
term, or in the event of the termination of this Agreement for any reason,
including non-renewal, the Employee shall have the following options:


 


	
  i.

  	
  Surrender the automobile to the Company;

  
	
   

  	
   

  
	
  ii.

  	
  Assume the Company’s lease payment obligation; or

  
	
   

  	
   

  
	
  iii.

  	
  Exercise the purchase option of the lease, if any.

  



 


c.               The Company shall promptly pay or
reimburse the Employee for all expenses incurred by the Employee in the
performance of his duties under this Agreement. 
Such expenses shall be limited to reasonable out-of-pocket expenses
necessarily and actually incurred by the Employee in the performance of his
duties; provided that (i) the expenses have been detailed on a form
acceptable to the Company and submitted to the Company for review and approval
and (ii) appropriate supporting documentation is submitted together with
the approved expense form.


 


d.              The Employee shall be entitled to
participate in any fringe benefit and bonus plans available to the Company’s
employees as in effect from time to time, to the extent the Employee may be
eligible to do so under the applicable provisions of the plans including but
not limited to pension, profit sharing, stock option and similar plans and life
and medical insurance plans or coverage maintained by the Company for senior
personnel and/or all personnel.


 


e.               The Employee shall be entitled to such
vacation, personal time and holidays as he is eligible for under the Company’s
Employment and Personnel Policy as the same presently exists or may hereafter
be amended.


 


f.                 Notwithstanding the provisions of
subparagraph (a) of this section 4, the Employee shall also be
entitled to a percentage increase in his Base Compensation as in effect on June 30
of each year that this Agreement is in effect, equal to the percentage increase
in the Consumer Price Index – All Items for the New York metropolitan area (or
any successor index) for such month of June as compared to such Consumer
Price Index for the month of June in the immediately preceding year.  Any such increase shall be effective on the
next following February 1.  No
adjustments shall be made for a decrease in such Index.


 


5.   Disability.  If during the Employment Period, the Employee
shall incur a Total Disability then, subject to the earlier termination of this
Agreement or the earlier termination of the disability, the Company shall
compensate the Employee as provided in subparagraphs (a), (b), (c) and (d) of
this Section 5.


 


a.               For the month in which the Employee
incurs the total disability, and for the following twelve (12) months of the
disability, the Company shall compensate the Employee at a rate equal to his
then current Base Compensation.


 


b.              For a period of three (3) months
commencing upon the termination of the period described in subparagraph (a),
the Company shall not pay Employee any portion of his Base Compensation and
Employee shall be on an unpaid leave of absence.


 


c.               If the Employee’s disability shall
terminate at any time prior to the expiration of the period described in
subparagraph (b) of this Section 5, then the Employee shall return to
full and active employment with the Company under the terms of this Agreement;
provided that if he shall again become disabled within a period of three (3) months
after such return, and such disability is related to his original disability, then
the Employee shall be deemed to have been continuously disabled from the date
he incurred the original disability.


 


d.              Upon expiration of the three (3) month
period described in subparagraph (b) of this Section 5, the
employment of Employee shall terminate, unless an additional leave of absence
is granted by the Company, in which event the employment of the Employee shall
terminate upon the expiration of the additional leave of absence.


 


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e.               In the event the Employee shall incur a
Partial Disability then during the period of the Partial Disability, the
Employee’s Base Compensation shall be equitably adjusted according to the time
that he is able to devote to the affairs of the Company.


 


f.                 In addition to the foregoing, the
Employee shall be entitled to receive the amounts, if any, as may be payable to
him by reason of his disability under policies of insurance maintained by the
Company.


 


g.              As used in this Agreement, the term “Total
Disability” shall mean disability such that, for physical or mental reasons,
the employee is unable to perform any of his usual duties to the Company on a
full-time basis.  As used in this
Agreement, the term “Partial Disability” shall mean a disability, such that for
physical or mental reasons, the Employee is unable to perform all of his usual
duties to the Company on a full-time basis.


 


6.   Termination.


 


a.               Termination
by Death.  If the Employee
dies during the Employment Period, the Company’s obligations under this
Agreement shall terminate six (6) months after the date of death and the
Employee’s estate shall be entitled to all arrearages of Base Compensation and
expenses.  In addition, the Employee’s
estate (or such other named beneficiary) shall be entitled to the amounts, if
any, as may be payable to his estate or beneficiaries under policies of
insurance maintained by the Company.


 


b.              Termination
for Cause.  This Agreement
and the Employee’s employment with the Company may be terminated for Cause at
any time in accordance with subparagraph (d) of this Section 6.  In the event this Agreement is terminated for
Cause, the Employee shall be entitled to all arrearages of Base Compensation
and expenses through the Date of Termination but shall not be entitled to
further compensation.  As used in this
Agreement, and without limitation, the term “Cause” shall mean:


 


	
  i.

  	
  An act or acts of dishonesty constituting criminal acts by the
  Employee resulting or intending to result directly or indirectly in gain to
  or personal enrichment of the Employee at the Company’s expense;

  
	
   

  	
   

  
	
  ii.

  	
  The commission of any crime involving fraud, embezzlement or theft by
  the Employee;

  
	
   

  	
   

  
	
  iii.

  	
  The Employee’s material breach of this Employment Agreement.

  



 


c.               Termination
at the Option of the Employee. 
This Agreement and the Employee’s employment with the Company may be
terminated at any time, at the election of the Employee, for Good Reason in
accordance with subparagraph (d) of this Section 6.  In the event this Agreement is terminated for
Good Reason, the Employee shall be paid during the remainder of the Employment
Period (computed without giving effect to the earlier termination hereunder),
his Base Compensation (other than due to Partial Disability) at the rate in
effect as of the Date of Termination, and shall continue to be entitled to
employee benefits as if he were still employed by the Company, until completion
of such Employment Period (computed without giving effect to the earlier
termination hereunder).  As used in the
Agreement, and without limitation, the term “Good Reason” shall mean:


 


	
  i.

  	
  The assignment to the Employee of duties inconsistent with the office
  of Director of Information Services of the Company or his then current
  office, removal of the Employee from such office or substantial reduction in
  the nature or status of the Employee’s then current responsibilities;

  
	
   

  	
   

  
	
  ii.

  	
  The reduction of the Employee’s then current Base Compensation (other
  than due to Partial Disability);

  
	
   

  	
   

  
	
  iii.

  	
  The relocation of the Company’s principal executive offices to a
  location more than fifty (50) miles from the Company’s current principal
  executive offices or the transfer of the Employee to a place other than the
  Company’s principal executive offices (excepting required travel on the
  Company’s business in a manner substantially similar to the Employee’s then
  current travel obligations); and

  
	
   

  	
   

  
	
  iv.

  	
  The failure by the Company to provide the Employee with the benefits
  at least as favorable as those in which the Employee was then participating.

  



 


d.              Notice
of Termination.  Any
purported termination of the Employee’s employment shall be communicated by a
written notice of termination to the other party hereto and shall specify the
Date of Termination (the “Notice of Termination”).  Such notice shall indicate a specified termination
provision in this Agreement which is relied upon, recite the facts and
circumstances claimed to provide the basis for such termination and specify the
Date of Termination.  As used in this
Agreement, the term “Date of Termination” shall mean the date specified in the
Notice of Termination, which date shall not be less than thirty (30) days nor
more than sixty (60) days from the date the Notice of Termination is
given.  If within thirty (30) days from
the date the Notice of Termination is given, the party receiving such notice
notifies the other party that a dispute exists concerning such termination, the
Date of Termination shall be the date on which the dispute is finally
resolved.  The Date of Termination shall
be extended by notice of dispute only if such notice is given in good faith and
the party giving such notice pursues the resolution of such dispute with
reasonable diligence.  Notwithstanding
the pendency of any such dispute, the Company will continue to pay the Employee
his full Base Compensation in effect as of the date of the Notice of
Termination and continue the Employee as a participant in all compensation,
benefit and insurance plans in which he was participating at such date, until
the dispute is finally resolved.  Amounts
paid under this subparagraph (d) are in addition to all other amounts due
under this Agreement and shall not be offset against or reduce any other
amounts due under this Agreement.


 


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7.   Change in Control.  In the event of a Change in Control and, as a
result of such Change in Control, the Employee is terminated without Cause or
the Employee elects within a reasonable time thereafter to terminate his
employment as a result of such Change in Control, then the Employee shall
receive the following benefits:


 


a.                                       The
Company shall pay to the Employee his full Base Compensation at the rate in
effect at the time of the Notice of Termination through the Date of
Termination.


 


b.                                      In
lieu of any further Base Compensation payments for periods subsequent to the
Date of Termination, the Company shall pay to the Employee as severance pay not
later than the tenth business day following the Date of Termination, a lump sum
payment (the “Severance Payment”) equal to 2.99 times the average of the annual
Compensation which was payable by the Company and includible in the Employee’s
gross income for federal income tax purposes for the five (5) calendar
years, or for the portion of such period during which the Employee was actually
employed by the Company if the Employee has been employed by the Company for
less than five (5) calendar years, preceding the earlier of the calendar
year in which a Change in Control occurred or the calendar year of the Date of
Termination (the “Base Period”).  Such
average shall be determined in accordance with the provisions of Section 280G(d) of
the Internal Revenue Code of 1986 as amended (the “Code”). In no event shall
such “average” exceed the annual Compensation payable by the Company and
includible in the Employee’s gross income for federal income tax purposes for
the calendar year preceding the earlier of the calendar year in which a Change
of Control occurred or the calendar year of the Date of Termination. As used in
this Agreement, the term “Compensation” shall mean and include every type and
form of compensation includible in the Employee’s gross income in respect of
his employment by the Company including compensation income recognized as a
result of the exercise of stock options or sale of the stock so acquired,
except to the extent otherwise provided in Congressional or Joint Committee
Reports or temporary or final regulations interpreting Section 280G(d) of
the Code.


 


c.                                       The
Severance Payment shall be reduced by the amount of any other payment or the
value of any benefit received or to be received by the Employee in connection
with the termination of his employment or contingent upon a Change in Control
(whether payable pursuant to the terms of this Agreement, any other plan,
agreement or arrangement with the Company) unless (i) the Employee shall
have effectively waived his receipt or enjoyment of such payment or benefit
prior to the date of payment of the Severance Payment, (ii) in the opinion
of tax counsel selected by the Company such other payment or benefit does not
constitute a “parachute payment” within the meaning of Section 280G(b)(2) of
the Code, or (iii) in the opinion of such tax counsel, the Severance
Payment (in its full amount or as partially reduced, as the case may be) plus
all other payments or benefits which constitute “parachute payments” within the
meaning of Section 280G(b)(2) of the Code are reasonable compensation
for services actually rendered, within the meaning of Section 280G(b)(4) of
the Code, and such payments are deductible by the Company.  The value of any non-cash benefit or any
deferred cash payment shall be determined by the Company in accordance with the
principles of Section 280G(d)(3) and (4) of the Code.


 


d.                                      Except
to the extent that Congressional or Joint Committee Reports or temporary or
final regulations interpreting Section 280G of the Code specify that such
payments would result, under subsection (c) above, in a reduction in
the Severance Payment:


 


	
  i.

  	
  The Company shall pay to the Employee, not later than the tenth
  business day following the Date of Termination, a lump sum amount equal to
  the sum of (x) any bonus compensation which has been allocated or awarded for
  a fiscal year preceding the Date of Termination but has not yet been paid,
  and (y) a pro rata portion of any bonus compensation which the Employee has
  earned for the fiscal year in which the Date of Termination occurs determined
  by multiplying the Employee’s prior years’ bonus compensation by a fraction
  equal to the number of full calendar months in the fiscal year prior to the
  Date of Termination over twelve.

  
	
   

  	
   

  
	
  ii.

  	
  The Company shall also pay all legal fees and expenses incurred by
  the Employee as a result of such termination (including all such fees and
  expenses, if any, incurred in contesting or disputing any such termination or
  in seeking to obtain or enforce any right or benefit provided by this
  Agreement).

  



 


e.                                       If
it is established pursuant to a final determination of a court or an Internal
Revenue Service proceeding that, notwithstanding the good faith of the Employee
and the Company in applying the terms of this Section 8, the aggregate “parachute
payments” paid are in an amount that would result in any portion of such “parachute
payments” not being deductible by the Company by reason of Section 280G of
the Code, then the Employee shall have an obligation to pay the Company upon
demand an amount equal to the sum of (i) the portion of the aggregate “parachute
payments” paid that would not be deductible by reason of Section 280G of
the Code and (ii) interest on the amount set forth in clause (i) of
this sentence at the applicable Federal rate (as defined in Section 1274(d) of
the Code) from the date of receipt of such excess until the date of such
payment.


 


f.                                         As used in the Agreement, the
term “Change in Control” shall mean a change in control of a nature


 


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that would be required to be reported in response to Item 6(e) of Schedule 14A
of Regulation 14A issued under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”) as in effect as of the date hereof (regardless of whether
or not a Proxy Statement is being filed pursuant to such Regulation at such
time), or if Item 6(e) is no longer in effect, any subsequent regulation
issued under the Exchange Act for a similar purpose, whether or not the Company
is subject to such reporting requirements; provided, that without limitation,
such a change in control shall be deemed to have occurred if:


 


	
  i.

  	
  any “Person” other than the Employee is or becomes the “beneficial
  owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
  indirectly, of securities of the Company representing 25% or more of the
  combined voting power of the Company’s then outstanding securities;

  
	
   

  	
   

  
	
  ii.

  	
  during any period of two consecutive fiscal years (not including any
  period prior to the date of the Agreement), individuals who at the beginning
  of such period constitute the Board of Directors, and any new director, whose
  election by the Board or nomination for election by the Company’s
  stockholders was approved by a vote of at least two-thirds of the directors
  then still in office who either were directors at the beginning of the period
  or whose election or nomination for elections was previously approved, cease
  for any reason to constitute a majority of the Board; or

  
	
   

  	
   

  
	
  iii.

  	
  the business of the Company is disposed of by the Company pursuant to
  a liquidation, sale of assets of the Company, or otherwise.

  



 


8.   Confidential Information.  The Employee acknowledges an obligation of
confidentiality to the Company and shall not divulge, disclose or communicate
any trade secret, private or confidential information or other proprietary
knowledge of the Company or its associated companies obtained or acquired by
him while so employed.  This restriction
shall apply after the termination of Employee’s employment without limit in
point of time but shall cease to apply to information or knowledge which may
come into the public domain or whose disclosure may be required by law or court
order or pursuant to the written consent of the Company.


 


9.   Return of Information.  Upon termination of employment, the Employee
agrees to not take with him and to deliver to the Company all records, notes,
data, memoranda, models, equipment, blueprints, drawings, manuals, letters,
reports and all other materials of a secret or confidential nature relating to
the business of the Company which are in possession or control of the Employee.


 


10. General Provisions.


 


a.               This Agreement contains the entire transaction
between the parties, and there are no other representations, warranties,
conditions or agreements relating to the subject matter of this Agreement.


 


b.              The waiver by any party of any breach or
default of any provision of this Agreement shall not operate or be construed as
a waiver of any subsequent breach.


 


c.               This Agreement may not be changed orally
but only by an Agreement in writing duly executed on behalf of the party
against which enforcement of any waiver, change, modification, consent or discharge
is sought.


 


d.              This Agreement shall be binding upon and
be enforceable against the Company and its successors and assigns.  Insofar as the Employee is concerned, this
Agreement is personal and cannot be assigned.


 


e.               This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.


 


f.                 This Agreement shall be construed
pursuant to and in accordance with the laws of the State of New Jersey.


 


g.              If any term or provision of this
Agreement is held or deemed to be invalid or unenforceable, in whole or in
part, by a court of competent jurisdiction, this Agreement shall be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of this Agreement.


 


h.              Any dispute, grievance or controversy
arising under or in conjunction with this Agreement shall be referred to the
Board of Directors of the Company and shall be dealt with by personal
discussion, and if not satisfactorily resolved, shall be submitted under the Rules of
the American Arbitration Association of New York City.


 


i.                  Any consent of the Company required
under this Agreement shall not be unreasonably withheld or delayed.


 


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IN WITNESS WHEREOF,
the parties have executed this Agreement on the date first above written.


 


	
   

  	
  COMPANY:

  
	
   

  	
  Bio-Reference Laboratories, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  S/ Marc D. Grodman

  	
   

  
	
   

  	
  By: Marc D. Grodman, President

  
	
   

  	
  Duly Authorized

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EMPLOYEE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  S/ Richard L. Faherty

  	
   

  
	
   

  	
  Richard L. Faherty

  



 


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