UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A No. 1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
December 20, 2002
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(Date of earliest event reported)
SCIENTIFIC INDUSTRIES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-6658 04-2217279
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(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
incorporation)
70 Orville Drive, Bohemia, New York 11716-2512
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(Address of principal executive offices)
(631) 567-4700
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or former address, if changed since last report)
This is Amendment No. 1 to the Current Report on Form 8-K, dated
January 6, 2003, for the purpose of filing the Employment Agreement,
dated as of January 1, 2003, between Scientific Industries, Inc.
and Helena R. Santos.
Item 7: Financial Statement and Exhibits
Exhibit 3(ii) Amended and Restated By Laws, adopted December 20, 2002.
Exhibit 10(a) Copy of employment agreement with Helena R. Santos.*
Exhibit 10(b) Copy of consultant agreement with Joseph Cremonese and
Laboratory Innovation Company, Ltd.
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* Filed with this Amendment.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: January 22, 2003
SCIENTIFIC INDUSTRIES, INC.
(Registrant)
/s/ Helena R. Santos
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Helena R. Santos
President, Chief Executive
Officer
Exhibit 10(a)
EMPLOYMENT AGREEMENT
Employment Agreement dated as of January 1, 2003 between SCIENTIFIC
INDUSTRIES, INC., a Delaware corporation 70 Orville Drive, Bohemia, New
York 11716 (the "Company") and HELENA R. SANTOS, an individual residing
at 16 Gerta Court, Selden, New York 11784, ("Employee").
WITNESSETH:
WHEREAS, Employee has been employed as a senior executive officer of
the Company since 1997 and the Company and Employee desire the Employee
continue to be employed as a senior executive officer of the Company on
the terms and conditions hereinafter contained;
NOW, THEREFORE, it is hereby agreed as follows:
1. Employment. The Company hereby employs and Employee agrees to be
employed as a senior executive officer of the Company for the Term as
defined in Section 2 to perform the duties described in Section 3 hereof.
2. Term. The employment of Employee by the Company shall continue
from the date hereof through December 31, 2004, unless terminated earlier
pursuant to the provisions of Section 7 hereof. The period from the date
hereof until the date of termination of employment pursuant to this
Agreement is herein referred to as the "Term".
3. Duties. Employee shall devote her full time to the affairs and
business of the Company for which she will serve as in such senior
executive positions or offices as the Board of Directors (the "Board")
shall designate. For the purposes of this Agreement, senior executive
offices means any one or more of the following: President, Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer,
Executive Vice President and Treasurer, it being agreed that Employee
may hold more than one executive office, provided that her duties will
not require her to devote more time to the performance of her duties on
behalf of the Company than is reasonable. As a senior executive officer
Employee shall report directly to the Board through the Chairman of the
Board of the Company. Employee shall use her best efforts to promote
the interests and welfare of the Company. The duties shall be principally
performed at the principal executive offices of the Company.
4. Salary. As her compensation hereunder, Employee shall be paid by
the Company a base salary determined by the Board of Directors but not
less than $100,000 per annum. The base salary shall be payable in equal
weekly installments. The Company may also pay to Employee with respect
to each of the 12 month periods ended December 31, 2003 and December 31,
2004 a bonus determined by the Board in its sole discretion. The Board
in determining the base salary for 12 months ended December 31, 2004 and
the amount of a bonus, if any, shall consider the achievement and
surpassing of goals or projections set forth or referred to in the 12
month operation plan for the relevant period approved by the Board,
including but not limited to, cash flow and earnings; the Employee's
performance of her executive responsibilities, and such other criteria
as the Board deems relevant.
5. Expenses.
a. Subject to the authorization of the Board, Employee will be
authorized to incur reasonable and necessary expenses in connection with
the discharge of Employee's duties and in promoting the business of the
Company. The Company will, according to its practices, reimburse Employee
for all such expenses upon presentation of a properly itemized account of
such expenditures, setting forth the business reasons for such expenditures
on a timely basis.
b. Employee agrees to cooperate with the Company in the Company's efforts
to obtain and maintain a term insurance policy on the life of Employee with
the Company as sole beneficiary in such principal amount as may be determined
by the Board, currently anticipated to be $500,000.
6. Other Benefits; Vacation.
a. Employee shall be entitled to receive from the Company such medical,
hospital and disability benefits, life insurance coverage, holiday and sick
pay consistent with those made available to the officers of the Company and
to participate in the Company's Plan under Section 401(k) of the Internal
Revenue Code in accordance with its terms.
b. Employee shall be entitled to an annual vacation of three weeks during
each 12 months of employment hereunder.
7. Termination.
a. In the event of Employee's death during the Term, this Agreement shall
terminate automatically as of the date of death, except with respect to any
accrued but unsatisfied obligations to the date of death. In the event of
Employee's disability (as hereinafter defined) for sixty (60) consecutive
calendar days or ninety (90) calendar days in the aggregate during any
twelve (12) months of the Term, the Company shall have the right, by written
notice to Employee, to terminate this Agreement as of the date of such notice,
except with respect to any accrued but unsatisfied obligation to the date of
such termination. "Disability" for the purposes of this Agreement shall mean
Employee's physical or mental disability so as to render Employee incapable of
carrying out Employee's essential duties under this Agreement. In the event
of a termination by the Company pursuant to this Section 7(a), the Company
shall not be under any further obligation to Employee hereunder except to
pay Employee: (i) base salary and benefits accrued and payable up to the
date of such termination, and (ii) reimbursement for expenses accrued and
payable under Section 5 hereof through the date of termination.
b. This Agreement may be terminated by either Employee or the Company
(other than as provided in Section 7(a)) upon thirty (30) days' written
notice if, during the Term, the other of them shall be in breach of or in
default under any provision of this Agreement. In the event of termination
of this Agreement by reason of breach or default by the Company, Employee
shall have no obligation to mitigate damages, and she shall be entitled
to receive the base salary due her at the rate in effect on the date
written notice is delivered hereunder for the then balance of the Term,
not reduced by any compensation she may receive elsewhere during such
period.
8. Non-Competition; Non-Interference; Non-Solicitation.
a. For purposes of this Section 8 and of Sections 9 and 10, "Company"
includes each of its subsidiaries.
b. From the date hereof through end of the Term, Employee will not,
without the express written approval of the Board, directly or
indirectly, own, manage, operate, control, invest or acquire an
interest in, or otherwise engage or participate in, or be associated
with in any way, any business which competes directly or indirectly
with the business or proposed business of the Company (a "Competitive
Business"); provided, however, that Employee may, directly or indirectly,
own, invest or acquire an interest in the aggregate of up to one percent
(1%) of the capital stock of a corporation whose capital stock is traded
publicly.
Additionally, from the date hereof through the date which is 18
months after the date of termination of employment (the "Restricted
Period"), Employee will not, without the express written approval of
the Board, directly or indirectly, become associated with a Competitive
Business, or otherwise engage in or assist in any enterprise, which
develops, markets, sells, manufactures or designs products currently
being sold, developed or contemplated (including those acquired or
about to be acquired) by the Company, or which hereinafter may be
sold, developed or contemplated, by the Company as of the date of
termination, including, but not limited to, mixers, including vortex
mixers, rotating, shaking or oscillating apparatus; thermoelectric
apparatus; or any industrial or laboratory processes, apparatus or
equipment (the "Products").
c. During the Restricted Period, Employee will not without the
express prior written approval of the Board of Directors (i)
directly or indirectly, in one or a series of transactions, recruit,
solicit or otherwise induce or influence any proprietor, partner,
stockholder, lender, director, officer, employee, sales agent,
joint venturer, investor, lessor, supplier, customer, consultant,
agent, representative or any other person which has a business
relationship with the Company to discontinue, reduce or modify
during the Restrictive Period such employment, agency or business
relationship with the Company, or (ii) employ or seek to employ
or cause any Competitive Business to employ or seek to employ any
person or agent who is then (or was at any time within one (1)
year prior to the date Employee or the Competitive Business
employs or seeks to employ such person) engaged or retained
by the Company or a business acquired or sold by the Company.
9. Confidential Information.
a. Employee agrees that during and after the Term Employee w
ill not, directly or indirectly, disclose to any person, or use or
otherwise exploit for the benefit of Employee or for the benefit of
anyone other than the Company, any Confidential Information
(as defined in Section 9(c)). Employee shall have no obligation
hereunder to keep confidential any Confidential Information if and
to the extent disclosure of any therefor is specifically required by
law; provided, however, that in the event disclosure is required by
applicable law, Employee shall provide the Company with prompt notice
of such requirement, prior to making any disclosure, so that the
Company may seek an appropriate protective order.
b. At the request of the Company, Employee agrees to deliver to
the Company, at any time during the Term, or thereafter, all
Confidential Information which Employee may possess or control.
Employee agrees that all Confidential Information of the Company
(whether now or hereafter existing) conceived, discovered or made
by Employee during the Term exclusively belongs to the Company
(and not to Employee). Employee will promptly disclose such
Confidential Information to the Company and perform all actions
reasonably requested by the Company to establish and confirm such
exclusive ownership.
c. "Confidential Information" means any confidential information
including, without limitation, any patent, patent application, copyright,
trademark, trade name, service mark, service name, "know-how", trade
secrets, customer lists, vendor lists, customer pricing or terms, details
of client or consultant contracts, pricing policies, cost information,
operational methods, marketing plans or strategies, product development
techniques or plans, business acquisition plans or any portion or phase
of any business, scientific or technical information, ideas, discoveries,
designs, computer programs (including source or object codes), processes,
procedures, formulae, improvements, information relating to the products
currently being sold, developed or contemplated, by the Company, or which
hereinafter may be sold, developed or contemplated, by the Company through
the date of termination of the Term, including, but not limited to, mixers,
including vortex mixers, rotating, shaking or oscillating apparatus;
thermoelectric apparatus; or any industrial or laboratory processes,
apparatus or equipment relating thereto (the "Products") or other
proprietary or intellectual property of the Company, whether or not in
written or tangible form, and whether or not registered, and including
all memoranda, notes, summaries, plans, reports, records, documents and
other evidence thereof. The term "Confidential Information" does not
include, and there shall be no obligation hereunder with respect to,
information that becomes generally available to the public other than
as a result of a disclosure by Consultants not permissible hereunder.
10. Remedies.
a. Nothing herein contained is intended to waive or diminish any rights
the Company may have at law or in equity at any time to protect and defend
its legitimate property interests including its business relationship with
third parties, the foregoing provisions being intended to be in addition to
and not in derogation or limitation of any other rights the Company may have
at law or in equity.
Since a breach of the provisions of Section 8 or Section 9 could not
adequately be compensated by money damages, the Company shall be entitled,
in addition to any other right and remedy available to it, to an appropriate
order from a court of competent jurisdiction restraining such breach or
a threatened breach, and in any such case no bond or other security shall
be required to be posted in connection therewith. Employee agrees that
the provisions of Section 8 or Section 9 are necessary and reasonable to
protect the Company in the conduct of its business. If any restriction
contained in Section 8 or Section 9 shall be deemed to be invalid, illegal,
or unenforceable by reason of the extent, duration, or geographical scope
thereof, or otherwise, then the court making such determination shall have
the right to reduce such extent, duration, geographical scope, or other
provisions hereof, and in its reduced form such restriction shall then be
enforceable in the manner contemplated hereby.
11. Insurance. The Company agrees to include Employee in the coverage
of any directors' and officers' liability it provides on behalf of its
directors or other senior executive officers and, if Employee is a
fiduciary under a Company plan, coverage under the applicable fiduciary
liability insurance policy.
12. Notices. Any notices pertaining to this Agreement if to the Company
shall be addressed to the Company at its address set forth in the opening
paragraph of this Agreement, with a copy of any notice to the Company to be
sent to Leo Silverstein, Esq., Reitler Brown LLC, 800 Third Avenue, New York,
New York 10022 and if to Employee shall be addressed to her at her address
stated in the opening of paragraph of this Agreement. All notices shall be
in writing and shall be deemed duly given if personally delivered or sent
by registered or certified mail, overnight or express mail or by telefax.
If sent by registered or certified mail, notice shall be deemed to have been
received and effective three days after mailing; if by overnight or express
mail or by telefax, notice shall be deemed received the next business day
after being sent. Any party may change its address for notice hereunder by
giving notice of such change in the manner provided herein.
13. Entire Agreement. This Agreement contains the entire agreement of the
parties respecting the subject matter contained herein. No modification of
any provision hereof shall be effective except by a written agreement signed
by the parties hereto.
14. Miscellaneous.
a. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York applicable to contracts entirely made and
performed therein.
b. This Agreement shall be binding upon and inure to the benefit of the
parties, their respective successors, heirs and assigns (where permitted).
c. The waiver by one party hereto of any breach by the other
(the "Breaching Party") of any provision of this Agreement shall not operate
or be construed as a waiver of any other (prior or subsequent) breach by the
Breaching Party, and waiver of a breach of a provision in one instance shall
not be deemed a waiver of a breach of such provision in any other circumstance.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as
of the year and date first above written.
Dated as of January 1, 2003
SCIENTIFIC INDUSTRIES, INC.
By: /s/ Joseph I. Kesselman
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Joseph I. Kesselman, Chairman of the Board
/s/ Helena R. Santos
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HELENA R. SANTOS