EMPLOYMENT AGREEMENT
Employment Agreement dated as of December 29, 2006, between
SCIENTIFIC INDUSTRIES, INC., a Delaware corporation 00 Xxxxxxx Xxxxx,
Xxxxxxx, Xxx Xxxx 00000 (the "Company") and XXXXXX X. XXXXXX, an
individual residing at 00 Xxxxx Xxxxx, Xxxxxx, Xxx Xxxx 00000,
("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 January 1, 2007 through December 31, 2008, 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 $120,000 per annum. The base salary
shall be payable in equal weekly installments. The Company may
also pay to Employee with respect to the period ending June 30, 2008
a bonus determined by the Board in its sole discretion. The
Board in determining the base salary for 18 months ending
June 30, 2008 and the amount of a bonus, if any, for each of the
foregoing periods shall consider the achievement and surpassing
of goals or projections set forth or referred to in the 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 during
each 12 months of employment hereunder in accordance with the
Company's employee policy.
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)
consecutive month period within 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. In the event of termination of the Agreement by
reason of breach or default by Employee, the Company shall not
be under further obligation to Employee 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 thought the date of termination.
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 or accessories 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, catalytic research
instruments or components thereof, products produced or sold
pursuant to the License Agreement between Scientific
Industries Inc., and Fluorometrix Corp. as may be amended
from time to time or related accessories of the foregoing;
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 will
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 xxxx, 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, 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 Xxx Xxxxxxxxxxx, Esq.,
Reitler Xxxxx & Xxxxxxxxxx LLC, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 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 December 29, 2006
SCIENTIFIC INDUSTRIES, INC.
By: /s/Xxxxxx X. Xxxxxxxxx
______________________
Xxxxxx X. Xxxxxxxxx,
Chairman of the Board
XXXXXX X. XXXXXX
/s/ Xxxxxx X. Xxxxxx
______________________
