UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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14a-6(e)(2))
[ ] Definitive Proxy Statement
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[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
SCIENTIFIC INDUSTRIES, INC.
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(Name of Registrant as Specified In Its Charter)
LOWELL KLEIMAN
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
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Lowell A. Kleiman
c/o Warshaw Burstein Schlesinger & Kuh, LLP
555 Fifth Avenue, New York, NY 10017
November 12, 2002
TIME IS SHORT: VOTE THE ENCLOSED BLUE PROXY CARD TODAY!
Dear Fellow Scientific Industries Stockholder:
By now you should have received my proxy materials along with a BLUE proxy
card explaining my reasons for seeking reelection to the Board of Directors of
Scientific Industries, Inc. (the "Company"). Although the Board has tried to
avoid the issues of this contest with aspersions against me personally, the real
issue is clear: Will your investment be better protected by me or by Roger B.
Knowles? I hope you agree with me that a candidate experienced in the Company's
industry and who has a significant financial interest in the Company is
preferable to a candidate who, in my opinion, has little knowledge of the
Company and has a significantly lower financial interest in the well being of
our Company.
With less than one week remaining until the Company's 2002 Annual Meeting
scheduled for November 18, 2002, I am writing again to urge you to support my
election by signing, dating and returning the enclosed faxable BLUE proxy card
today!
MANAGEMENT VS. REALITY - A CURIOUS BATTLE
As I noted above, the Board has decided to wage a campaign of personal
attacks against me and my record with the Company. While I don't intend to
dignify their tactics by refuting each fictitious claim they make, there are
certain statements in their materials that I find so outrageous as to require a
response.
Management Claim: The Vortex Genie(R)2 Mixer was developed under my
father's leadership of the Company more than 30 years ago. Reality:
The Vortex Genie(R)2 Mixer was not developed and marketed until 1985 -
more than a decade after my father died!
Management Claim: I engaged and paid a financial advisor without the
prior knowledge or approval of the Board of Directors. Reality: Two
current Board members, Arthur Borden and Joseph Kesselman, personally
negotiated the contract with the financial advisers, the entire Board
ratified the contract on April 1, 2001 and, in my capacity as Chief
Executive Officer, I signed the contract. All of the Company's
financial liabilities resulting from the contract were disclosed to
the Company's stockholders and were verified by the Company's current
President and independent auditors.
Management Claim: The 2002 Stock Option Plan, with a stipulation
restricting option grants to current non-employee directors, was
unanimously approved by the Board of Directors at a meeting on
September 26, 2002 at which I was a participant. Reality: Management's
own proxy materials, which were mailed to stockholders on October 17,
2002, contain no such restriction. On October 28, 2002, at a Board
meeting following the initiation of my campaign and my public refusal
to approve a limitless plan, management conceded to a limitation on
the issuance of option grants to existing non-employee directors.
Management may seek to claim that the plan in its existing form was
approved on September 26, but the reality is that no limitation
existed before this contest and, it is my opinion that, without my
campaign, this Board of Directors would have continued granting
themselves options at will.
LOWELL A. KLEIMAN VS. ROGER B. KNOWLES - A CLEAR CHOICE
As I stated at the beginning of this letter, the real issue in this
campaign is whether you think your investment will be better served with me as a
stockholder voice on the Board or with Mr. Knowles. While Mr. Knowles has been
on the Board much longer than I have, he lacks knowledge of both our Company and
the industry in which it operates and he simply does not have as great a
financial interest in the Company as I do. Mr. Knowles adheres to management's
opposition to my proposal to limit future option grants to non-employee
directors and to subject future grants to stockholder approval. What is his
reason for opposing stockholder approval for option grants? According to Mr.
Knowles, asking for stockholder approval for a grant of our Company's shares to
non-employee directors is vaguely "unreasonable."
If asked why I am spending my own money and the majority of my time on this
campaign, I would answer that I do not trust Roger B. Knowles and the rest of
this Board to manage my investment and I firmly believe that they lack the
expertise and interest necessary to guide our Company during this critical time
in its development.
Please take a moment to ensure that your Company has a stockholder voice on
its Board. Sign, date and mail the enclosed BLUE proxy card today! With such
little time remaining before the Annual Meeting, I am urging stockholders to
also fax the enclosed BLUE proxy card to MacKenzie Partners, Inc. at
212-929-0308.
If you have any questions or need assistance in voting your shares, please
call Dan Sullivan or Bob Sandhu of MacKenzie Partners, Inc. at (212) 929-5500 or
(800) 322-2885.
Very Truly Yours,
/s/ LOWELL A. KLEIMAN
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Lowell A. Kleiman