EMPLOYMENT AGREEMENT
Employment Agreement dated May 14, 2010 as of January 1, 2010
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 period thereafter through December 31, 2010 covered by
an Employment Agreement dated July 31, 2009, the Company and Employee
desire that he continue to be employed through June 30, 2011 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 pursuant hereto
shall be for the period from January 1, 2010 through June 30, 2011,
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 at the rate of $123,600 per annum. The
base salary shall be payable in equal weekly installments. The Company
may also pay to Employee a bonus determined by the Board in its sole
discretion for his services rendered during the six months ended June 30,
2010 and a bonus for his services rendered during the fiscal year ended
June 30, 2011. The bonus, if any, shall be paid within four months
following the end of the related period. The Board in determining 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 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, which currently is $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 the
Term 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 (i) 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 or
(ii) by the Company for Cause. 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 June 30, 2011, 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. "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. In the event of termination of the Agreement by the Company
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 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 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.
b. 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 May 14, 2010
SCIENTIFIC INDUSTRIES, INC.
By:/s/ Xxxxxx X. Xxxxxx
___________________________
Xxxxxx X. Xxxxxx, President
XXXXXX X. XXXXXXX
/s/ Xxxxxx. X. Xxxxxxx
___________________________
