EMPLOYMENT AGREEMENT
Employment Agreement dated as of September 1, 2004 between
SCIENTIFIC INDUSTRIES, INC., a Delaware corporation 00 Xxxxxxx
Xxxxx, Xxxxxxx, Xxx Xxxx 00000 (the "Company") and XXXXXX X.
XXXXXXX, an individual residing at 00 Xxxxx Xxxxxx, Xxxxx Xxxxx, Xxx
Xxxx, 00000 ("Employee").
WITNESSETH:
WHEREAS, Employee has been employed as a senior executive
officer of the Company since May 2001 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, 2006, 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 his full time to the affairs and
business of the Company for which he will serve 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: Chief Operating Officer, Executive Vice President
and Treasurer, it being agreed that Employee may hold more than
one executive office, provided that his duties will not require
him to devote more time to the performance of his duties on
behalf of the Company than is reasonable. As a senior executive
officer Employee shall report directly to the President or
Chief Executive Officer of the Company. Employee shall use his
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 his compensation hereunder, Employee shall be paid
by the Company a base salary determined by the Board of
Directors but not less than $105,000 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 December
31, 2005 and the 12 month period ending December 31, 2006 a
bonus determined by the Board in its sole discretion. The Board
in determining the base salary for the 12 month period ending
December 31, 2006 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 his 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 $250,000.
6. Other Benefits; Vacation.
a. Employee shall be entitled to receive from the Company
such medical, hospital and disability benefits, life
insurance, 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 he shall be entitled to receive
the base salary due him 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 he 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 the purpose of this Section 8 and of Sections 9, 10
and 11 "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 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,
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. Patents. Employee agrees that all inventions, copyrightable
material, secret processes, formulae, trademarks, trade secrets
and the like, discovered or developed by him while in the
employ of the Company, whether in the course of his employment,
on company time or property, or otherwise, shall be the
exclusive property of the Company and Employee agrees to
execute such instruments of transfer, assignment, conveyance or
confirmation and such other documents as may be requested by
the Company to transfer, confirm and perfect in the Company all
legally protectible rights in any such inventions,
copyrightable materials, secret processes, formulae,
trademarks, trade secrets and the like at no expense to
Employee.
11. 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, Section 9
or Section 10 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, Section 9 and Section 10 are
necessary and reasonable to protect the Company in the
conduct of its business. If any restriction contained in
Section 8, Section 9 or Section 10 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.
12. Insurance. The Company agrees to include Employee in the
coverage of any directors' and officers' liability insurance
policy it provides on behalf of its directors or other senior
executive officers.
13. 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
him at his 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.
14. 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.
15. 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 September 1, 2004
SCIENTIFIC INDUSTRIES, INC.
By: /s/Xxxxxx X. Xxxxxx
____________________________
Xxxxxx X. Xxxxxx, President
XXXXXX X. XXXXXXX
/s/Xxxxxx X. Xxxxxxx
_________________________________
