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. 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 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 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 Secretary, 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 $115,000 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 the 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 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, 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. 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 December 29, 2006
SCIENTIFIC INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
_______________________
Xxxxxx X. Xxxxxxxxx,
Chairman of the Board
XXXXXX X. XXXXXXX
/s/ Xxxxxx X. Xxxxxxx
________________________
