EMPLOYMENT AGREEMENT
Employment Agreement dated July 31, 2009, 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 with the two year period ended December 31, 2008
covered by an Employment Agreement dated December 29, 2006, and the
Company and Employee desire that although she has continued to be
employed as President, Chief Executive Officer and Chief Financial Officer
since January 1, 2009 through the date hereof, the Employee continue to
be employed through December 31, 2010 as a senior executive officer of
the Company with the employment for the two year period then ended be
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 pursuant hereto
shall be for the period from January 1, 2009 through December 31, 2010,
unless terminated earlier pursuant to the provisions of Section 7 hereof;
such period is herein referred to as the "Term".
3. Duties. Employee has devoted and shall devote her full time to
the affairs and business of the Company 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 for the 12 months ended December 31, 2009
of $130,000 and for the 12 months ended December 31, 2010, a base salary
to be determined by the Board of Directors but not less than $130,000.
The base salary shall be payable in equal weekly installments. The
Company shall also pay to Employee for her services for the first year
of the Term a bonus of $5,000 payable no later than March 1, 2010 in
light of her expanded duties through the date hereof. Her bonus, if
any, for the 12 months ending December 31, 2010 shall be determined by
the Board in its sole discretion. The Board in determining her base
salary for 12 months ending December 31, 2010 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 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 the base salary and benefits accrued
and payable up to the date of such termination, and reimburse her for e
xpenses 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 for reason of breach or default by the
Company or by the Company without cause, Employee shall have no
obligation to mitigate damages and shall not be reduced by any
compensation she may receive elsewhere during such period. "Cause"
shall mean conviction for a felony or the failure of Employee to cure
any of the following by the end of the 10 day period following delivery
of written notice of such termination to Employee setting forth: (i)
the gross negligence or gross misconduct (including conflict of interest
in carrying out Employee's duties under this Agreement), or (ii) the
repeated or substantial failure, refusal or neglect to perform Employee's
duties in accordance with Paragraph 3 hereof, or (iii) the engaging by
Employee in a material act or acts of dishonesty affecting the Company
or its subsidiaries, or (iv) alcohol abuse or illegal use of drugs by
Employee in a manner materially and repeatedly interfering with
performance of Employee's obligations under this Agreement.
c. If such termination by the Company is made, notice in writing
shall be given as set forth in Paragraph 12. If such termination is
other than pursuant to Paragraph 7(a) or for Cause, the Company shall
pay to Employee severance payments equal to one year's salary at the
rate of the compensation Employee is receiving at the time of
termination. All such severance payments shall be payable bimonthly
over the following 12 months and Employee shall receive the benefits
set forth in Paragraph 6(a) for a period of two years from termination.
d. In the event of termination of the Agreement by reason of breach
or default by Employee or for Cause, the Company shall not be under
further obligation to Employee except to pay Employee her base salary
and benefits accrued and payable up to the date of such termination,
and reimburse her 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 Sections 9 and 10, "Company"
includes each of its subsidiaries.
b. From the date hereof through the 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 and its subsidiaries (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 and its subsidiaries, or which
hereinafter may be sold, developed or contemplated, by the Company and its
subsidiaries 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 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 or a subsidiary, 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 or a subsidiary (whether now
or hereafter existing) conceived, discovered or made by Employee during
the Term exclusively belongs to the Company or a subsidiary (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
or a subsidiary, 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 Employee
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 July 31, 2009
SCIENTIFIC INDUSTRIES, INC.
By:/s/ Xxxxxx X. Xxxxxxxxx
__________________________________________
Xxxxxx X. Xxxxxxxxx, Chairman of the Board
/s/ Xxxxxx X. Xxxxxx
_____________________________________________
Xxxxxx X. Xxxxxx
