UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
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 Section 240.14a-12
SCIENTIFIC INDUSTRIES, INC.
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(Name of Registrant as Specified In Its Charter)
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(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)(4) and 0-11.
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computed pursuant to Exchange Act Rule 0-11 (set forth the
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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
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October 23, 2009
Dear Fellow Stockholders:
You are cordially invited to attend the 2009 Annual Meeting of
Stockholders of Scientific Industries, Inc. which will be held at
1:00 p.m. (New York time) on Wednesday, December 2, 2009 at La
Quinta Inn & Suites, 10 Aero Road, Bohemia, New York, 11716.
Information concerning the matters to be considered and voted upon
at the Annual Meeting is set out in the attached Notice of 2009 Annual
Meeting of Stockholders and Proxy Statement.
It is important that your shares be represented at the 2009 Annual
Meeting, regardless of the number of shares you hold and whether or
not you plan to attend the meeting in person. Accordingly, please
complete, sign and date the enclosed proxy card and return it as soon
as possible in the accompanying business reply envelope so that your
shares will be represented at the Annual Meeting. This will not limit
your right to vote in person or to attend the meeting.
Thank you for your continued support.
Sincerely,
/s/ Joseph G. Cremonese
_______________________
Joseph G. Cremonese
Chairman
SCIENTIFIC INDUSTRIES, INC.
70 Orville Drive
Bohemia, New York 11716
_____________
NOTICE OF 2009 ANNUAL MEETING OF STOCKHOLDERS
DECEMBER 2, 2009
Notice is hereby given that the 2009 Annual Meeting of Stockholders
(the "Annual Meeting") of Scientific Industries, Inc., a Delaware
corporation (the "Company"), will be held on Wednesday, December 2,
2009, at 1:00 p.m. (New York time) at La Quinta Inn & Suites, 10
Aero Road, Bohemia, New York, 11716, for the following purposes:
1. To elect Class A Directors to the Company's Board of
Directors to serve until the Company's annual meeting of
stockholders with respect to the year ending June
30, 2012 and until the election and qualification of their
respective successors.
2. To ratify the appointment of Nussbaum Yates Berg Klein
& Wolpow, LLP as the Company's independent registered public
accounting firm for the fiscal year ending June 30, 2010.
3. To transact such other business as may properly come
before the Annual Meeting and any adjournments or
postponements thereof.
The foregoing items of business are more fully described in the
accompanying proxy statement.
The Board of Directors has fixed the close of business on October
23, 2009, as the record date for determination of stockholders entitled
to notice of and to vote at, the Annual Meeting and at any adjournments
or postponements thereof.
A complete list of the stockholders entitled to vote at the Annual
Meeting will be available for inspection by any stockholder of the
Company at the Annual Meeting. In addition, the list will be open for
examination by any stockholder of the Company for any purpose germane
to the Annual Meeting during ordinary business hours for a period of
ten days prior to the Annual Meeting at the offices of the Company.
You are requested to fill in and sign the enclosed form of proxy,
which is being solicited by the Board of Directors of the Company,
and mail it promptly in the enclosed postage paid envelope. Any
proxy may be revoked by delivery of a later dated proxy.
By Order of your Board of Directors,
/s/ Robert P. Nichols
_____________________
Robert P. Nichols
Secretary
Bohemia, New York
October 23, 2009
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, WE KINDLY REQUEST
THAT YOU PLEASE COMPLETE, SIGN, DATE, AND PROMPTLY RETURN THE ENCLOSED
PROXY CARD IN THE POSTAGE PAID ENVELOPE PROVIDED. IF YOU ARE A
STOCKHOLDER OF RECORD AND YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE
IN PERSON IF YOU WISH, EVEN IF YOU HAVE PREVIOUSLY RETURNED YOUR PROXY
CARD.
YOUR VOTE IS IMPORTANT
SCIENTIFIC INDUSTRIES, INC.
70 Orville Drive
Bohemia, New York 11716
PROXY STATEMENT
_________________
2009 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 2, 2009
_________________
Solicitation of Proxies
_______________________
This proxy statement is furnished in connection with the solicitation of
proxies by and on behalf of the Board of Directors (the "Board") of
Scientific Industries, Inc., a Delaware corporation (the "Company"), for
use at the 2009 Annual Meeting of Stockholders (the "Annual Meeting") to
be held at La Quinta Inn & Suites, 10 Aero Road, Bohemia, New York, 11716,
on Wednesday, December 2, 2009, at 1:00 p.m. (New York time), and at any
adjournments or postponements thereof.
The Board of Directors has determined that in the event that there are
no vacancies among the six Directors of the Company prior to the 2009
Annual Meeting, the number of Directors of the Company shall, effective
with the commencement of the meeting, be increased from six to seven and
that the seventh Director in addition to the Company's two present Class
A Directors be elected at the 2009 Annual Meeting to serve until the
Company's annual meeting of stockholders with respect to the fiscal year
ending June 30, 2012, and the election and qualification of their
respective successors. In addition, the stockholders at the 2009 Annual
Meeting will be asked to ratify the appointment of Nussbaum Yates Berg
Klein & Wolpow, LLP, as the Company's independent registered public
accounting firm for the fiscal year ending June 30, 2010, and transact
such other business as may properly come before the Annual Meeting
and any adjournments or postponements thereof.
Record Date, Voting Rights
__________________________
Only stockholders of record of the Company's Common Stock, par value
$0.05 per share (the "Common Stock"), as of the close of business on
October 23, 2009 (the "Record Date"), are entitled to notice of and to
vote at the Annual Meeting and any adjournments or postponements thereof.
On the Record Date, there were 1,196,577 shares of Common Stock issued
and outstanding. Each share of Common Stock is entitled to one vote.
The presence at the Annual Meeting, in person or by a properly executed
proxy, of the holders of a majority of the outstanding shares of the
Company's Common Stock as of the Record Date is necessary to constitute a
quorum. Abstentions and broker "non-votes" are included in the
determination of the number of shares of Common Stock present at the Annual
Meeting for quorum purposes. A broker "non-vote" occurs when a nominee
holding shares of Common Stock for a beneficial owner does not vote on a
particular proposal because the nominee does not have discretionary voting
power with respect to that item and has not received instructions from
the beneficial owner.
Voting of Proxies, Revocation, Solicitation
___________________________________________
All stockholders who deliver properly executed and dated proxies to the
Company prior to the Annual Meeting will be deemed present at the Annual
Meeting regardless of whether such proxies direct the proxy holders to
vote for or against, or to withhold or abstain from
voting. The proxies, when properly executed and returned to the
Company, will be voted in accordance with the instructions given
therein by the person executing the proxy. In the absence of
instructions, properly executed proxies will be voted FOR (1) the
election of the Board's nominees, Arthur M. Borden, James S.
Segasture, and Helena R. Santos as Directors of the Company; and
(2) the ratification of the appointment by the Board of Directors of
Nussbaum Yates Berg Klein & Wolpow, LLP, as the Company's independent
registered public accounting firm for the fiscal year ending June
30, 2010.
Any stockholder who executes and delivers a proxy may revoke it at
any time before it is voted by delivering a written notice of such
revocation to the Secretary of the Company at the address of the Company
set forth in this proxy statement, by submitting a properly executed
proxy bearing a later date, or by appearing at the Annual Meeting and
requesting the return of the proxy or by voting in person. In accordance
with applicable rules, boxes and designated spaces are provided on the
proxy card for stockholders to mark if they wish either to vote for or
withhold authority to vote for the nominees for Directors, or to vote
for or against or to abstain from voting for the proposal to ratify the
appointment of the Company's independent registered public accounting
firm.
A stockholder's attendance at the Annual Meeting will not, by itself,
revoke a proxy given by that stockholder. Stockholders vote at the
Annual Meeting by casting ballots (in person or by proxy), which are
tabulated by a person who is appointed by the Board of Directors
before the Annual Meeting to serve as inspector of election at the
Annual Meeting and who has executed and verified an oath of office.
It is anticipated that this proxy statement, the enclosed proxy
card and the Company's Annual Report will be mailed to the Company's
stockholders on or about October 30, 2009.
PRINCIPAL STOCKHOLDERS
The following table sets forth as of October 23, 2009 certain
information as to each person who to the Company's knowledge, based
upon such person's representations or publicly available filings,
beneficially owned more than 5% of the outstanding shares of the
Company's Common Stock as of that date:
Name and Address of Shares Beneficially Percent of
Beneficial Owner Owned** Class***
___________________ ___________________ ___________
James S. Segasture* 187,250 (1) 15.6
Lowell A. Kleiman 139,581 (2) 11.7
16 Walnut Street
Glen Head, NY 11545
Spectrum Laboratories, Inc. 124,736 (3) 10.4
18617 Broadwick Street
Rancho Dominquez, CA 90220
Grace S. Morin* 82,950 6.9
Joseph I. Kesselman* 64,120 (4) 5.3
______________
* His or her address is c/o Scientific Industries, Inc., 70
Orville Drive, Bohemia, New York 11716.
** Beneficial ownership, as such term is used herein, is
determined in accordance with Rule
13d-3(d)(1) promulgated under the Securities Exchange Act of
1934, as amended, (the "Exchange Act") and includes voting
and/or investment power with respect to shares of Common Stock
of the Company. Unless otherwise indicated, the named person
possesses sole voting and investment power with respect to the
shares. The shares shown include shares issuable pursuant to
options held by the named person that may be exercised within
60 days of the date indicated above.
*** Percentages of ownership are based upon the number of shares of
Common Stock issued and outstanding. Shares of Common Stock that may
be acquired pursuant to options that are exercisable within 60 days of
the date indicated above are deemed outstanding for computing the
percentage ownership of the person holding such options, but are not
deemed outstanding for the percentage ownership of any other person.
(1) Includes 4,000 shares issuable upon exercise of options and
493 shares owned by his wife.
(2) Based on information reported on Schedule 13D filed with
the Securities and Exchange Commission on October 30, 2002.
(3) Based on information reported on Schedule 13G filed with the
Securities and Exchange Commission on June 15, 2009.
(4) Includes 4,000 shares issuable upon exercise of options, 735
shares of Common Stock owned jointly with his wife, and 16,000 shares
owned by his wife.
PROPOSAL 1
______________
ELECTION OF DIRECTORS
General
_______
The Company's Certificate of Incorporation provides for a classified
Board of Directors, (the "Board") consisting of three classes, each
class serving a three-year term on a staggered basis. The Company's
By-Laws provide that the number of Directors comprising the Board is
to be determined by the Board. The Board is currently comprised of
six members, of whom two are Class A Directors, two are Class B
Directors and two are Class C Directors. The Board has determined
that commencing with 2009 Annual Meeting, in the absence of any
vacancy, the number shall increase to seven by the election of a
third Class A Director. Accordingly, assuming that there will be
no vacancy, at the Annual Meeting, three Class A Directors are to
be elected to serve until the annual meeting of stockholders with
respect to the fiscal year ending June 30, 2012, and until their
successors are duly elected and qualified. In the event of a vacancy
of a Class B or Class C Director prior to the Annual Meeting, one of
the three nominees will be a nominee to fill the vacancy in that
class of Directors to serve until the end of the term of the class of
Director in which the vacancy occurred. Shares of Common Stock
represented by proxies solicited by the Board will be voted for the
nominees hereinafter named if authority to do so is not specifically
withheld. If for any reason said nominees shall become unavailable
for election, which is not now anticipated, the number of Directors
will remain at six and the proxies will be voted for the two other
nominees.
The Directors of the Company are elected by the affirmative vote of
the holders of a plurality of the shares of Common Stock present
in person or represented by proxy at the Annual Meeting and entitled
to vote. A plurality means that the nominee with the largest number
of votes is elected as Director. In tabulating the vote, abstentions
and broker "non-votes" will be disregarded and will have no effect
on the outcome of the vote.
The Board of Directors recommends that stockholders vote FOR the
election of the nominees identified below to the Board of Directors.
Nominees
________
The Board of Directors has designated Mr. Arthur M. Borden, and
James S. Segasture, current Class A Directors, and Ms. Helena R.
Santos as their nominees for election.
Arthur M. Borden, Esq. (age 89), a Director since 1974, has been
counsel to the law firm of Katten Munchin Rosenman LLP (formerly
Rosenman & Colin) during the past five years. He is a director of
Supreme Industries, Inc., a nationwide manufacturer of specialized
truck bodies.
James S. Segasture (age 73), a Director since 1991, has been a
private investor since February 1990.
Helena R. Santos (age 45), employed by the Company since 1994,
has served since August 2002 as President, Chief Executive Officer
and Treasurer. Previously she served as Vice President, Controller
from 1997 and as Secretary from May 2001. Ms. Santos was an
internal auditor with a major defense contractor from March 1991
to April 1994. She had been previously employed in public
accounting.
Other Directors
_______________
Class B Directors:
The terms of the Class B Directors currently extend to the annual
meeting of stockholders with respect to the year ending June 30, 2010.
They are:
Joseph I. Kesselman (age 84), a Director since 1961 and Chairman of
the Board from August 2002 until his resignation in February 2006, has
been for more than five years a consultant to various corporations,
including Nuclear and Environmental Protection Inc. and Hopare Holding,
S.A. (a Swiss company), both companies of which he has been a director,
and Perrot Duval Management, S.H. (a Swiss management company).
Grace S. Morin (age 61), a Director since December 4, 2006, had been
President, Director and principal stockholder of Altamira Instruments,
Inc. from December 2003 until its acquisition in November 2006 by the
Company. Ms. Morin had been employed by Altamira to supervise its
administrative functions at the Pittsburgh, Pennsylvania facility as
a full-time employee through March 31, 2009 and since that date as a
part-time consultant. Prior to December 2003, she was a general
business consultant for two years, and prior to that a member of senior
management of a designer of gas flow environmental engineered products
for approximately four years.
Class C Directors:
The terms of the Class C Directors currently extend to the annual
meeting of stockholders with respect to the year ending June 30, 2011.
They are:
Joseph G. Cremonese (age 73), a Director since November 2002 and
Chairman of the Board since February 2006, has been a marketing consultant
to the Company since 1996. Mr. Cremonese has been since 1991, President
of Laboratory Innovation Company, Ltd., which is a vehicle for technology
transfer and consulting services for companies, including the Company,
engaged in the production and sale of products for science and
biotechnology. Since March 2003, he has been a director of and
consultant to Proteomics, Inc., a producer of recombinant proteins
for medical research. Prior to 1991, he had been employed by Fisher
Scientific, the largest U.S. distributor of laboratory equipment and a
former major distributor for the Company.
Roger B. Knowles (age 84), a Director since 1965, is retired. During the
past five years he has been involved in liquidating various real estate
and manufacturing concerns.
Stock Ownership
_______________
The following table sets forth, as of October 23, 2009, relevant
information as to the shares of Common Stock beneficially owned by
(i) each Director of the Company, (ii) each executive officer of the
Company (including a nominee for Director) identified in the Summary
Compensation Table under "Executive Officers," and (iii) all directors
and executive officers as a group.
Beneficial Owner Number Percentage*
________________ ____________ ____________
Arthur M. Borden 56,740 (1) 4.7%
Joseph G. Cremonese 54,597 (2) 4.5%
Joseph I. Kesselman 64,120 (3) 5.3%
Roger B. Knowles 4,000 (4) .3%
Grace S. Morin 82,950 6.9%
James S. Segasture 187,250 (5) 15.6%
Helena R. Santos 15,779 1.3%
Robert P. Nichols 21,446 (6) 1.8%
Brookman P. March 82,950 (7) 6.9%
All current directors and
executive officers as a
group (8 persons) 486,882 (8) 40%
*See "Principal Stockholders" for calculation of percentage.
(1) Includes 12,000 shares issuable upon exercise of options.
(2) Represents 34,597 shares owned jointly with his wife and
20,000 shares issuable upon exercise of options.
(3) Includes 4,000 shares issuable upon exercise of options,
735 shares owned jointly with his wife, and 16,000 shares owned
by his wife.
(4) Represents shares issuable upon exercise of options.
(5) Includes 4,000 shares issuable upon exercise of options
and 493 shares owned by his
wife.
(6) Includes 5,000 shares issuable upon exercise of options.
(7) Represents shares owned by his wife, Ms. Morin.
(8) Includes 49,000 shares issuable upon exercise of options.
Board Committees
________________
Joseph I. Kesselman and James S. Segasture have been the sole
members of the Company's Stock Option Committee, the members of
which serve at the discretion of the Board. The Committee
administers the Company's 2002 Stock Option Plan ("2002 Plan").
Grace S. Morin, Joseph I. Kesselman, and James S. Segasture
have been the members of the Company's Compensation Committee
serving at the discretion of the Board. The Committee
administers the Company's compensation policies.
The Board of Directors acts as the Company's Audit Committee.
The Company does not have a financial expert on the Audit Committee
as defined by the Securities and Exchange Commission, however,
the Company believes that the members of the Audit Committee
have sufficient knowledge to properly evaluate and analyze the
Company's financial statements.
Meetings
________
During the fiscal year ended June 30, 2009 ("fiscal 2009"),
the Board of Directors held six meetings, at each of which all
persons who were Directors at the time were present.
Directors' Compensation and Options
___________________________________
DIRECTORS' COMPENSATION
FOR THE YEAR ENDED JUNE 30, 2009
Non-
Equity
Fees Incentive
Earned Plan
or Paid Stock Option Comp-
in Cash Awards Awards ensation
Name ($) ($) ($) ($)
(a) (b) (c) (d) (e)
_____________________________________________________________________
Arthur M.
Borden 12,000 0 0 0
Joseph G.
Cremonese 24,000 0 0 0
Joseph I.
Kesselman 12,000 0 0 0
Roger B.
Knowles 12,000 0 0 0
Grace S.
Morin 2,500 0 0 0
James S.
Segasture 12,000 0 0 0
____________________________________________________________________
DIRECTORS' COMPENSATION (CONTINUED)
Changes
in
Pension
Value and
Non- Non-
qualified qualified
Deferred Deferred All
Compens- Comp- Other
ation ensation Comp-
Earnings Earnings ensation Total
Name ($) ($) ($) ($)
(a) (f) (g) (h) (i)
____________________________________________________________________
Arthur M. 0 0 12,000
Borden
Joseph G.
Cremonese 0 36,000(1) 60,000
Joseph I.
Kesselman 0 0 12,000
Roger B.
Knowles 0 0 12,000
Grace S.
Morin 0 10,400(2) 12,900
James S.
Segasture 0 0 12,000
___________________________________________________________________
(1) Represents amount paid to his affiliate pursuant to a marketing
consulting agreement (see "Related Transactions").
(2) Represents compensation received for her services as a consultant
for Altamira but does not include her compensation as a full-time
employee through March 31, 2009.
The Company pays each Director who is not an employee of the Company
or a subsidiary a quarterly retainer fee of $1,500 and $1,000 for each
meeting attended. In addition, the Company reimburses each Director
for out-of-pocket expenses incurred in connection with attendance at
board meetings in the amount of $50 or the Director's itemized expenses,
whichever is greater. Mr. Cremonese, as Chairman of the Board since
February 2006, receives an additional fee of $1,000 per month. During
fiscal 2009, the fees to non-employee Directors aggregated $120,900,
including the consulting fees paid to Mr. Cremonese's affiliate, and
since April 1, 2009, to Ms. Morin pursuant to a consulting agreement.
The Agreement provides for her to render administrative, accounting
and bookkeeping consulting services to the Company and Altamira, at
the rate of $85 per hour, at the request of the Company through
March 17, 2011 unless terminated earlier by either the Company or she
on at least 60 days prior notice. She also received $49,200 as an
administrative employee of Altamira for the nine months ended March
31, 2009.
Pursuant to the Company's 1992 Stock Option Plan ("1992 Plan")
options to purchase 3,000 shares of Common Stock at the then fair
market value were granted to each non-employee director who was on
the Board of Directors on the first business day of each March,
in 1993, 1994, 1995, and 1996, namely Messrs. Borden, Kesselman,
Knowles and Segasture. In addition, in December 1997 and through
December 2002 the Board of Directors granted under the 1992 Plan
annually options to purchase 4,000 shares of Common Stock to each of
them exercisable at the fair market value on the date of grant.
Accordingly, as of June 30, 2009, the Company had granted under the
1992 Plan to the foregoing four non-employee Directors options to
purchase an aggregate of 128,000 shares of Common Stock, or options to
purchase 32,000 shares of Common Stock to each. The fair market
value per share of Common Stock on the dates of grant ranged from
$0.50 for options granted in 1993 to $2.40 for options granted in
2002. As of June 30, 2009, options under the 1992 Plan with respect
to 90,000 shares had been exercised by the Directors and with
respect to 10,000 shares had expired. In addition, they had
exercised options with respect to 48,000 shares granted to them
prior to the adoption of the 1992 Plan.
Under the Company's 2002 Plan, none of the Directors at the time
of the adoption by the Board of Directors of the 2002 Plan
(subsequently approved by stockholders) were eligible to receive
further option grants thereunder. Mr. Joseph G. Cremonese who was
elected a Director at the 2002 Annual Meeting of Stockholders, was
granted on December 1, 2003 a ten-year option to purchase 5,000
shares of Common Stock at the fair market value of $1.35 per share,
on February 20, 2007 a ten-year option to purchase 5,000 shares of
Common Stock at the fair market value of $3.10 per share (of which
$2,000 was recognized as stock-based compensation expense in fiscal
2009), and on September 17, 2009 a five-year option to purchase
10,000 shares at the fair market value of $1.88 per share, of which
no more than 5,000 shares may be acquired within one year of the
grant. The September 2009 option had a total fair value (as
determined using the Black-Scholes-Merton option-pricing model) of
$9,300. None of the options have been exercised to date.
Executive Officers and Key Personnel
____________________________________
Ms. Helena R. Santos and Mr. Robert P. Nichols are the executive
officers of the Company. Mr. Brookman P. March, is President and
Director of Sales and Marketing of the Company's subsidiary,
Altamira Instruments, Inc.
See "Election of Directors - Nominees" for the employment history
of Ms. Santos, a nominee for Director.
Robert P. Nichols (age 48), employed by the Company since
February 1998, has served since August 2002 as Executive Vice
President. Previously, he had been since May 2001 Vice President,
Engineering. Prior to joining the Company, Mr. Nichols was an
Engineer Manager with Bay Side Motion Group, a precision motion
equipment manufacturer from January 1996 to February 1998.
Brookman P. March (age 64) has been Director of Sales and
Marketing since November 30, 2006 and President since July 2008
of Altamira, which conducts the Company's Catalyst Research
Instruments operation. He had been Vice President and a Director
of Altamira from December 2003 until it was acquired by the
Company. Mr. March is the husband of Ms. Morin,
a Director.
The executive officers of the Company are elected by the Board
of Directors and hold office until their respective successors
are elected and qualified or until his or her earlier resignation
or removal. None of the officers need to be Directors, and more
than one office may be held by the same person. There is no
arrangement or understanding between any executive officer and
any person other than the Company regarding election as an
officer. The President of the Company's subsidiary, Altamira
Instruments, Inc. is the husband of Ms. Grace S. Morin, a
Director of the Company.
In July 2009, the Company entered into agreements with Ms.
Helena R. Santos and Mr. Robert P. Nichols related to their
employment in their current positions for the 24-month period
ending December 31, 2010. Their prior employment agreements
expired on December 31, 2008. The agreements provide a base
salary for the 12 months ended December 31, 2009 for Ms. Santos
of $130,000 and for Mr. Nichols of $120,000, plus a $5,000
bonus for each with respect to the first 12 month period. The
base salary for each for the 12 months ending December 31, 2010
is to be determined by the Company's Board of Directors, but to
be not less
than the officer's base salary for the prior 12 month period.
No other bonuses were awarded with respect to fiscal 2009.
The bonuses, if any, for the 12 month period ending December
31, 2010 are also to be determined by the Board of Directors.
A bonus of $10,000 had been awarded and paid to each officer
in fiscal 2008.
The employment agreements for Ms. Santos and Mr. March contain
termination provisions stipulating that if the Company
terminates the employment of the employee other than for death,
disability, or cause (defined as (i) conviction of a felony or
(ii) gross neglect or gross misconduct (including conflict of
interest) in the carrying out of his or her duties under the
agreement), the Company shall pay severance payments equal to
one year's salary at the rate of the compensation at the time of
termination, and continue to pay his or her regular benefits
provided by the Company for a period of two years from
termination.
Mr. Brookman P. March is employed by Altamira pursuant to a
24-month employment agreement through November 30, 2010 which
may be extended by mutual consent for an additional 12 month
period but not beyond November 30, 2012. The agreement provides
for an annual base salary of $115,000 for the first 12 month
period, and $121,900 for the second 12 month period, with
Altamira having the option to pay the $6,900 increase in base
salary in stock options of the Company (subject to Mr. March's
consent). The agreement also provides for a bonus in each of
the two 12-month periods at the discretion of Altamira's Board
of Directors. No bonuses have yet been awarded under this
agreement.
All employment agreements contain confidentiality and non-
competition covenants.
The Compensation Committee reviews and recommends to the Board of
Directors the compensation to be paid to each executive officer.
In making a determination, the Committee and the Board give material
consideration to the Company's results of operations and financial
condition, competitive factors and the Company's resources. The
compensation at times includes grants of options under its stock
option plan to the named executives. Each officer is employed
pursuant to a long-term employment agreement, containing terms
proposed by the committee and approved as reasonable by the Board
of Directors. The Board is cognizant that as a relatively small
company, the Company has limited resources and opportunities with
respect to recruiting and retaining key executives. Accordingly,
the Company has relied upon long-term employment agreements to
retain qualified personnel.
The following table summarizes all compensation paid by the Company
to each of the executive officers set forth in the table for the two
fiscal years ended June 30, 2009 and 2008. No other executive officer
earned in excess of $100,000 in any of such fiscal periods.
SUMMARY COMPENSATION TABLE
_____________________________________________________________
Non-
Equity
Incentive
Name Plan
and Stock Option Comp-
Principal Fiscal Salary Bonus Awards Awards ensation
Position Year ($) ($) ($) ($) ($)
(a) (b) (c) (d) (e) (f) (g)
_____________________________________________________________
Helena R. 2009 125,000 0 0 0 0
Santos, 2008 120,000 10,000 0 0 0
CEO,
President,
CFO
Robert P. 2009 117,500 0 0 0 0
Nichols, 2008 115,000 10,000 0 0 0
Exec.
V. P.
Brookman 2009 112,900 0 0 0 0
P. March, 2008 110,000 0 0 0 0
Director
of Sales
and Market-
ing, and
since July
2008,
President
of
Altamira
_____________________________________________________________
SUMMARY COMPENSATION TABLE (CONTINUED)
_____________________________________________________________
Non-
Qualified
Deferred All
Name Comp- Other
and ensation Comp-
Principal Earnings ensation Total
Position ($) ($) ($)
(a) (h) (i) (j)
_____________________________________________________________
Helena R. 2009 2,500(1) 127,500
Santos, 2008 2,600(1) 132,600
CEO,
President,
CFO
Robert P. 2009 2,350(1) 119,850
Nichols, 2008 2,500(1) 127,500
Exec.
V. P.
Brookman 2009 4,516(1) 117,416
P. March, 2008 4,400(1) 114,400
Director
of Sales
and Market-
ing, and
since July
2008,
President
of
Altamira
_____________________________________________________________
(1)Represents the Company's matching contribution under the
Company's 401(k) Plans.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
_____________________________________________________________
Option Awards
_____________________________________________________________
Number Inactive
Number of Plan
of Securities Awards
Securities Under- Number of
Under- lying Securities
lying Un- Unexercised Underlying Option
exercised Options(#) Unexercised Exercise Option
Options(#) Unexerci- Unearned Price Expiration
Name Exercisable sable Options ($) Date
(a) (b) (c) (d) (e) (f)
______________________________________________________________________
Robert P.
Nichols 5,000 0 0 1.25 10/2012
______________________________________________________________________
No other executive officer had any unexercised options as of June 30,
2009 and no options had been granted to any officer during fiscal 2009.
PROPOSAL 2
______________
APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors, subject to stockholders' approval, appointed
Nussbaum Yates Berg Klein & Wolpow, LLP (the "Firm") as the Company's
independent registered public accounting firm for the fiscal year
ending June 30, 2010. The Firm has audited the consolidated financial
statements of the Company since 1991. A representative of the Firm is
expected to be present at the Annual Meeting, and will have an
opportunity to make a statement to the stockholders and will be available
to respond to appropriate questions. The ratification of the appointment
will require the affirmative vote of the holders of a majority of the
outstanding shares of Common Stock present in person or represented by
proxy at the Annual Meeting and entitled to vote. Abstentions will be
included in determining the number of shares of Common Stock present
or represented and entitled to vote for purposes of approval and will
have the effect of votes "against" the proposal. Broker "non-votes"
will not be counted in determining the number of shares of Common Stock
present or represented and entitled to vote to approve the proposal and
will therefore not have the effect of votes either "for" or "against".
Stockholder ratification of the appointment is not required by the
Company's Certificate of Incorporation or By-laws or otherwise. If the
stockholders fail to ratify the appointment, the Board of Directors will
reconsider whether to retain that firm. Even if the appointment is
ratified, the Board of Directors in its discretion may direct the
appointment of a different independent registered public accounting firm
at any time during the year if the Audit Committee, currently the entire
Board of Directors determines that such a change would be in the best
interest of the Company and its stockholders.
The following is a description of the fees incurred by the Company for
services by the Firm during fiscal 2009 and fiscal 2008.
Audit Fees: The Company incurred fees of the Firm of approximately
$38,000 and $37,000, respectively, in connection with its audit of the
Company's financial statements for fiscal 2009 and fiscal 2008, and
$9,600 and $9,000, respectively, in connection with the review of the
Company's interim financial statements included in the Company's
Quarterly Reports on Form 10-Q during fiscal 2009 and fiscal 2008.
Tax Fees: The Company incurred fees of the Firm of approximately
$4,000 for each of fiscal 2009 and fiscal 2008, in connection with
preparation of the corporate tax returns.
Financial Information Systems Design and Implementation Fees: The
Firm was not engaged by the Company during either fiscal 2009 or
fiscal 2008 to provide advice regarding financial information systems
design and implementation.
Other Fees: The Company paid to the Firm $12,600 in fiscal 2008,
primarily in connection with the acquisition of Altamira. There were
no other audit related fees or other fees paid to the firm for the
two fiscal years.
The Board of Directors unanimously recommends that the stockholders
vote FOR the ratification of the appointment of Nussbaum Yates Berg
Klein & Wolpow, LLP as the independent registered public accounting
firm of the Company for the fiscal year ending June 30, 2010.
OTHER MATTERS
The Board of Directors is not aware of any matters other than those
set forth in this proxy statement that will be presented for action
at the Annual Meeting; however, if any other matters properly come
before the Annual Meeting, the persons named as proxies intend to
vote the shares of Common Stock they represent in accordance with
their judgment on such matters.
ADDITIONAL INFORMATION
The Company's Annual Report to Stockholders for the fiscal year
ended June 30, 2009, includes its Annual Report on Form 10-K for
the year which was filed with the U.S. Securities and Exchange
Commission on September 24, 2009. The Annual Report to
Stockholders on Form 10-K is not part of this proxy material,
but is being mailed to stockholders with this proxy solicitation.
STOCKHOLDER PROPOSALS
Proposals of stockholders of the Company intended to be presented
at the Company's Annual Meeting of Stockholders following the year
ending June 30, 2010 must be received by the Secretary of the
Company for inclusion in the appropriate proxy materials no later
than June 24, 2010.
EXPENSES AND SOLICITATION
The entire cost of soliciting proxies will be borne by the Company.
In addition to the use of the mails, proxies may be solicited by
officers, directors and regular employees of the Company personally
or by telephone. No additional compensation will be paid to such
persons for any additional solicitations. The Company will also
request securities brokers, custodians, nominees and fiduciaries
who hold shares of Common Stock of record to forward solicitation
material to the beneficial owners of such shares, and will reimburse
them for their reasonable out-of-pocket expenses in forwarding such
soliciting materials.
By Order of your Board of Directors,
/s/ Robert P. Nichols
_____________________
Robert P. Nichols
Secretary
Bohemia, New York
October 23, 2009
________________________________________________________________________
SCIENTIFIC INDUSTRIES, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
December 2, 2009
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Joseph G. Cremonese and Joseph I.
Kesselman, and each of them, with full power of substitution, to vote,
as a holder of the common stock, par value $0.05 per share
("Common Stock"), of Scientific Industries, Inc., a Delaware corporation
(the "Company"), all the shares of Common Stock which the undersigned is
entitled to vote, through the execution of a proxy with respect to the 2009
Annual Meeting of Stockholders of the Company (the "Annual Meeting"), to be
held at La Quinta Inn & Suites, 10 Aero Road, Bohemia, New York, on
Wednesday, December 2, 2009 at 1:00 p.m. New York time, and any and all
adjournments or postponements thereof, and authorizes and instructs said
proxies to vote in the manner directed below.
The Board of Directors recommends the vote FOR the election of the
nominees for Class A Directors named below and proposal 2.
1. Election of Class A Directors:
ARTHUR M. BORDEN HELENA R. SANTOS JAMES S. SEGASTURE
FOR all nominees ( ) WITHHOLD for all nominees ( )
If you do not wish your shares voted FOR one or more of the three nominees,
draw a line through that person's name above.
2. Proposal to ratify the appointment of the independent registered public
accounting firm, Nussbaum Yates Berg Klein & Wolpow, LLP, as the Company's
independent registered public accounting firm for the fiscal year ending
June 30, 2010.
FOR ( ) AGAINST ( ) ABSTAIN ( )
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before such meeting or adjournment or
postponement thereof.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE, PLEASE VOTE, SIGN AND DATE ON
REVERSE SIDE AND RETURN PROMPTLY.
__________________________________________________________________________
(BACK OF CARD)
PROPERLY EXECUTED AND RETURNED PROXY CARDS WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO INSTRUCTIONS TO THE
CONTRARY ARE MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF EACH OF THE
NAMED NOMINEES A DIRECTOR AND APPROVAL OF PROPOSAL NO. 2 LISTED ON THE
REVERSE SIDE OF THIS CARD.
You may revoke this proxy at any time before it is voted by (i) filing
a revocation with the Secretary of the Company, (ii) submitting a duly
executed proxy bearing a later date or time than the date or time of
the proxy being revoked; or (iii) attending the Annual Meeting and
voting in person. A stockholder's attendance at the Annual
Meeting will not by itself revoke a proxy given by the stockholder.
(Please sign exactly as the name appears
hereon. Joint owners should each sign. When
signing as attorney, executor, administrator,
trustee or guardian, please give full title as
such. If a corporation, please sign with full
corporate name by the president or other
authorized officer. If a partnership, please
sign in the partnership name by an authorized
person.)
Dated:___________,2009 _______________________________
Signature
PLEASE COMPLETE, SIGN, DATE __________________________________
AND RETURN THE PROXY CARD Signature, if held by joint owners
PROMPTLY USING THE
ENCLOSED ENVELOPE.