EMPLOYMENT AGREEMENT
Employment Agreement dated as of July 31, 2009 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 Executive Vice President
and Secretary of the Company since May 2001 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 he has
continued to be employed as Executive Vice President and Secretary of the
Company 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 shall devote his full time to the affairs and
business of the Company for which he will serve in senior executive
positions or offices as the Board of Directors (the "Board") shall
designate with respect to the operations of the Company, including
engineering and product control of the Company, exclusive of the
Company's subsidiary Altamira Instruments Inc., for which Employee
shall perform such engineering duties as requested by its President.
For the purposes of this Agreement, 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 for the 12 months ended December 31, 2009
of $120,000 and for the 12 months ended December 31, 2010 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 shall also pay Employee a bonus of $5,000 with respect to
his services rendered and to be rendered during the first year of the
Term, payable no later than March 1, 2010 and may also pay to Employee
with respect to the 12 months ended December 31, 2010 a bonus determined
by the Board in its sole discretion. The Board in determining the base
salary and for the 12 months ending December 31, 2010 and the amount of a
bonus, if any, and with respect to his services provided during such year
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's base salary and benefits accrued and payable up
to the date of such termination, and reimburse him 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 lesser of the period of 12 months commencing with the date of
termination or the period ending December 31, 2010, 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 his base salary and benefits accrued and payable
up to the date of such termination, and reimburse him 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 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 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 or a subsidiary, or which hereinafter may be sold, developed
or contemplated, by the Company or a subsidiary 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 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 (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: July 31, 2009
SCIENTIFIC INDUSTRIES, INC.
By:/s/ Xxxxxx X. Xxxxxxxxx
__________________________________________
Xxxxxx X. Xxxxxxxxx, Chairman of the Board
/s/ Xxxxxx X. Xxxxxxx
___________________________________________
XXXXXX X. XXXXXXX
