SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): November 25, 2002
SCIENTIFIC INDUSTRIES, INC.
______________________________________________________
(Exact name of registrant as specified in its charter)
Delaware 000-6658 04-2217279
_______________ _______________________ ________________
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification No.)
incorporation)
Airport International Plaza, 70 Orville Drive
Bohemia, New York 11716
_____________________________________________
(Address of principal executive offices)
(631) 567-4700
_____________________________________________
Registrant's telephone number,
including area code
Not Applicable
_____________________________________________
(Former name or former address,
if changed since last report)
ITEM 5. OTHER EVENTS
At the Annual Meeting of Stockholders of Scientific Industries, Inc., a
Delaware corporation (the "Company"), which commenced on November 18, 2002,
and was adjourned first to November 19, 2002 and adjourned then to
November 25, 2002, the stockholders of the Company took the following
actions:
(i) Elected the Board of Directors' two nominees, Messrs. Joseph G.
Cremonese and Roger B. Knowles as Class C Directors, to serve until
the Annual Meeting of Stockholders with respect to the fiscal year
ended June 30, 2005 and the due election and qualification of their
respective successors, by the following vote:
FOR WITHHELD
------- --------
Joseph G. Cremonese 818,214 5,800
Roger B. Knowles 430,056 7,154
Mr. Lowell A. Kleiman, former chief Executive Officer and President,
lost his bid for reelection as a Class C Director receiving 386,804
shares FOR (none WITHHELD);
(ii) Approved the adoption by the Board of Directors of the Company's
2002 Stock Option Plan by a vote of 786,260 FOR, 26,713 AGAINST with
1,725 ABSTAINING;
(iii) Ratified the appointment of Nussbaum Yates and Wolpow, P.C. as
the independent auditors with respect to the financial statements of
the Company for the year ending June 30, 2003 by a vote of 817,876
FOR, 5,720 AGAINST with 418 ABSTAINING; and
(iv) Rejected, by a vote of 421,281 AGAINST, 402,024 FOR and 39
ABSTAINING, the following proposal by Mr. Kleiman:
RESOLVED, that the stockholders of Scientific Industries, Inc.
demand that the Board of Directors adopt a policy (a) requiring
stockholder approval of all grants of stock options to
non-employee directors of the Company and (b) prohibiting the
aggregate number of options granted under any stock option
plan to non-employee directors as a group to be in excess of
20% of the total number of options authorized under such plan.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
99.1. Scientific Industries, Inc. 2002 Stock Option Plan.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
SCIENTIFIC INDUSTRIES, INC.
(Registrant)
Date: November 25, 2002 By: /s/ Helena R. Santos
____________________
Helena R. Santos, President and
Chief Executive Officer
______________________________________________________________________
Exhibit 99.1
SCIENTIFIC INDUSTRIES, INC.
2002 STOCK OPTION PLAN
(Effective as of February 11, 2002)
1. Purpose.
The purposes of this 2002 Stock Option Plan (the "Plan") are to induce
certain individuals to remain in the employ or service of Scientific
Industries, Inc. (the "Company") and its present and future subsidiary
corporations (each a "Subsidiary"), as defined in Section 425(f) of the
Internal Revenue Code of 1986, as amended (the "Code"), to attract new
individuals to enter into such employment and service and to encourage
such individuals to secure or increase on reasonable terms their stock
ownership in the Company. The Board of Directors of the Company
(the "Board") believes that the granting of stock options (the "Options")
under the Plan will promote continuity of management and increased
incentive and personal interest in the welfare of the Company and aid
in securing its continued growth and financial success. Options will be
either (a) "incentive stock options" (which term, when used herein, shall
have the meaning ascribed thereto by the provisions of Section 422 (b)
of the Code) or (b) options which are not incentive stock options
("non-incentive stock options"), as determined at the time of the
grant thereof by the Administrator referred to in Section 3(A) hereof.
2. Shares Subject to Plan.
Options may be granted to purchase up to one hundred thousand (100,000)
shares of the common stock, par value $0.05 per share (the "Common Stock")
of the Company. To the extent that options previously granted under the
1992 Stock Option Plan of the Company (the "Prior Plan") expire or
terminate for any reason without having been exercised, then options
exercisable for that same number of shares of Common Stock, up to a
maximum of one hundred sixty one thousand (161,000) shares, may be
granted pursuant to the Plan. For the purpose of this section 2, the
number of shares purchased upon the exercise of an Option shall be
determined without giving effect to the use by a Participant of the
right set forth in Section 8(C) hereof to deliver shares of the
Common Stock in payment of all or a portion of the option price or
the use by a Participant of the right set forth in Section 12(C)
hereof to cause the Company to withhold from the shares of the Common
Stock otherwise deliverable to him upon the exercise of an Option
shares of the Common Stock in payment of all or a portion of his
withholding obligation arising from such exercise. If any Options
expire or terminate for any reason without having been exercised in
full, new Options may thereafter be granted to purchase the unpurchased
shares subject to such expired or terminated Options. Subject to the
provisions of Section 11, the maximum number of shares of Common Stock
which may be issued in accordance with the provisions of this Section 2
shall be two hundred sixty one thousand (261,000) shares.
3. Administration.
(A) The Plan shall be administered by either the Board or, at the
option of the Board, a Committee which shall consist of two or more
members of the Board, both or all of whom shall be "disinterested
persons" within the meaning of Rule 16b-3(c)(2)(i) promulgated under
Section 16(b) of the Securities Exchange Act of 1934 (the "Exchange
Act"). The Committee, if appointed, shall be appointed annually by
the Board, which may at any time and from time to time remove any
member or members of the Committee, with or without cause, appoint
additional members to the Committee and fill vacancies, however
caused, in the Committee. A majority of the members of the Committee
shall constitute a quorum. All determinations of the Committee shall be
made by a majority of its members present at a meeting duly called and
held. Any decision or determination of the Committee reduced to writing
and signed by all of the members of the Committee shall be fully as
effective as if it had been made at a meeting duly called and held.
The Committee, or if a Committee has not been appointed, the Board,
in its capacity as administrator of the Plan, is hereinafter referred
to as the "Administrator".
(B) Subject to the express provisions of the Plan, the Administrator
shall have complete authority, in its discretion, to interpret the Plan,
to prescribe, amend and rescind rules and regulations relating to it,
to determine the terms and provisions of the respective option
agreements or certificates (which need not be identical), to
determine the individuals (each a "Participant") to whom and the
times and the prices at which Options shall be granted, the periods
during which each Option shall be exercisable, the number of shares
of the Common Stock to be subject to each Option and whether such
Option shall be an incentive stock option or a non-incentive stock
option and to make all other determinations necessary or advisable
for the administration of the Plan. In making such determinations,
the Administrator may take into account the nature of the services
rendered by the respective Participants, their present and potential
contributions to the success of the Company and the Subsidiaries and
such other factors as the Administrator in its discretion shall deem
relevant. The Administrator's determination on the matters referred to
in this section 3(B) shall be conclusive. Any dispute or disagreement
which may arise under or as a result of or with respect to any Option
shall be determined by the Administrator, in its sole discretion, and
any interpretations by the Administrator of the terms of any Option
shall be final, binding and conclusive.
4. Eligibility.
An Option may be granted only to (1) employees and key consultants of
the Company or a Subsidiary, (2) directors of the Company or a Subsidiary
who are not employees of the Company or a Subsidiary ("Outside Directors"),
and (3) employees and key consultants of a corporation which has been
acquired by the Company or a Subsidiary, whether by way of exchange or
purchase of stock, purchase of assets, merger or reverse merger, or
otherwise, who hold options with respect to the stock of such corporation
which the Company has agreed to assume. The foregoing notwithstanding,
none of Messrs. Joseph I. Kesselman, Arthur M. Borden, Roger B. Knowles
and James S. Segasture shall be eligible to receive Option grants under
the Plan.
5. Option Prices.
(A) Except as otherwise provided in Sections 5(C) and 17 hereof, the
initial per share option price of any Option which is an incentive
stock option shall not be less than the fair market value of a share of
the Common Stock on the date of grant; provided, however, that, in the
case of a Participant who owns more than 10% of the total combined voting
power of the Common Stock at the time an Option which is an incentive
stock option is granted to him, the initial per share option price shall
not be less than 110% of the fair market value of a share of the Common
Stock on the date of grant.
(B) Except as otherwise provided in Sections 5(C) and 17 hereof, the
initial per share option price of any Option which is a non-incentive
stock option shall not be less than 85 % of the fair market value of a
share of the Common Stock on the date of grant.
(C) The initial per share option price of any Option which is granted
to an Outside Director shall be equal to the fair market value of a
share of the Common Stock on the date of grant.
(D) For all purposes of this Plan, the fair market value of a share of
the Common Stock on any date shall be equal to, if the Common Stock is
listed on a national securities exchange or traded on the NASDAQ National
Market System, the closing sale price of a share of the Common Stock on
such date or, if there is no sale of the Common Stock on such date, the
average of the bid and asked prices on such exchange or system at the
close of trading on such date or, if the shares of the Common Stock are
not listed on a national securities exchange or such system on such date,
the last per share sales price of Common Stock on the market or system
of the NASD on which the Common Stock is then traded or listed
(the "Relevant Market System") during the three business days ending on
the date of grant or exercise as reported in the market report for the
Relevant Market System or if no sale has been reported for such period,
the higher of the (i) closing bid price on the Relevant Market System
on the date of grant or exercise or (ii) the average of the closing bid
prices on the Relevant Market System for the three business days
immediately preceding the date of grant or exercise, in each case as
reported in the Market Report for the Relevant Market System or, if the
shares of the Common Stock are not traded or listed on a market or system
of the NASD, as shall be determined in good faith by the Administrator.
6. Option Term.
Options shall be granted for such term as the Administrator shall
determine, not in excess of ten years from the date of the granting
thereof; provided, however, that, except as otherwise provided in
Section 17 hereof, in the case of a Participant who owns more than 10%
of the total combined voting power of the Common Stock at the time an
Option which is an incentive stock option is granted to him, the term
with respect to such Option shall not be in excess of five years from
the date of the granting thereof; and provided, further, however, that
the term of an Option granted to an Outside Director shall be ten years
from the date of the granting thereof.
7. Limitation on Amount of Incentive Stock Options Granted.
Except as otherwise provided in Section 17 hereof, the aggregate fair
market value of the shares of the Common Stock for which any Participant
may be granted incentive stock options which are exercisable for the first
time in any calendar year (whether under the terms of the Plan or any
other stock option plan of the Company) shall not exceed $100,000.
8. Exercise of Options.
(A) Except as otherwise provided in Section 17 hereof and, in the
case of an Option granted to an employee or key consultant, except as
otherwise determined by the Administrator at the time of the grant
thereof, a Participant may (i) during the period commencing on the
first anniversary of the date of the granting of an Option to him
and ending on the day preceding the second anniversary of such date,
exercise such Option with respect to one-third of the shares granted
thereby, (ii) during the period commencing on such second anniversary
and ending on the day preceding the third anniversary of the date of
the granting of such Option, exercise such Option with respect to
such number of shares as when added to the number of shares previously
purchased under the Option does not exceed two-thirds of the shares
granted thereby, and (iii) during the period commencing on such
third anniversary, exercise such Option with respect to all of the
shares granted thereby.
(B) To the extent exercisable, an Option may be exercised either in
whole at any time or in part form time to time.
(C) An Option may be exercised only by a written notice of intent to
exercise such Option with respect to a specific number of shares of
Common Stock and payment to the Company of the amount of the option
price for the number of shares of the Common Stock so specified;
provided, however, that all or any portion of such payment may be
made in kind by the delivery of shares of the Common Stock having
a fair market value on the date of delivery equal to the portion of
the option price so paid; provided, further, however, that, subject
to the requirements of Regulation T promulgated under the Exchange
Act, the Administrator may implement procedures to allow a broker
chosen by a Participant to make payment of all or any portion of the
option price payable upon the exercise of an Option and receive, on
behalf of such Participant, all or any portion of the shares of the
Common Stock issuable upon such exercise.
(D) Except in the case of an Option granted to an Outside Director,
the Administrator may, in its discretion, permit any Option to be
exercised, in whole or in part, prior to the time when it would
otherwise be exercisable.
9. Transferability.
No Option shall be assignable or transferable except by will and/or
by the laws of descent and distribution and, during the life of any
Participant, each Option granted to him may be exercised only by him.
10. Termination of Service.
(A) In the event that prior to his 65th birthday, other than by reason
of death, a Participant leaves the employ or service of the Company and
the Subsidiaries or, in the case of an Outside Director, does not stand
for re-election or is not reelected, whether voluntarily or otherwise,
each Option theretofore granted to him shall be exercisable to the
extent exercisable immediately prior to the date of termination of
employment or service (or the date the Director does not stand for
reelection or is not reelected) within the period ending the earlier
to occur of (i) the expiration of the period of three months after
the date of such termination of services or failure to stand for or be
reelected a Director and (ii) the date specified in such Option.
(B) In the event a Participant's employment or service (including the
service of an Outside Director) with the Company and the Subsidiaries
terminates by reason of his death, each Option theretofore granted to
him shall become immediately exercisable in full and shall terminate
upon the earlier to occur of (i) the expiration of the period of one
year after the date of such Participant's death and (ii) the date
specified in such Option.
(C) In the event that on or after his 65th birthday, a Participant
leaves the employ or service of the Company and the Subsidiaries by
reason of his or her disability (as such term is defined in Section
22(e)(3) of the Code) leaves the employ or service of the Company and
the Subsidiaries or, in the case of an Outside Director, resigns or
does not stand for re-election or is not reelected, each Option
theretofore granted to him shall become immediately exercisable in
full and shall terminate upon the earlier to occur of (i) the
expiration of the period of three months after the date of such
termination, resignation or failure to stand for election or to be
reelected and (ii) the date specified in such Option.
11. Adjustment of Number of Shares.
(A) In the event that a dividend shall be declared upon the Common
Stock payable in shares of the Common Stock, the number of shares of
the Common Stock then subject to any Option and the number of shares
of the Common Stock which may be purchased upon the exercise of Options
granted under the Plan but not yet covered by an Option shall be
adjusted by adding to each share the number of shares which would be
distributable thereon if such shares had been outstanding on the date
fixed for determining the stockholders entitled to receive such stock
dividend. In the event that the outstanding shares of the Common Stock
shall be changed into or exchanged for a different number or kind of
shares of stock or other securities of the Company or of another
corporation, whether through reorganization, recapitalization,
stock split-up, combination of shares, sale of assets, merger or
consolidation in which the Company is the surviving corporation,
then, there shall be substituted for each share of the Common Stock
then subject to any Option and for each share of the Common Stock
which may be purchased upon the exercise of Options granted under the
Plan but not yet covered by an Option, the number and kind of shares
of stock or other securities into which each outstanding share of the
Common Stock shall be so changed or for which each such share shall be
exchanged.
(B) In the event that there shall be any change, other than as
specified in Section 11(A) hereof, in the number or kind of outstanding
shares of the Common Stock, or of any stock or other securities into
which the Common Stock, shall have been changed, or for which it shall
have been exchanged, then, if the Administrator shall, in its sole
discretion, determine that such change equitably requires an adjustment
in the number or kind of shares then subject to any Option and the
number or kind of shares available for issuance in accordance with the
provisions of the Plan but not yet covered by an Option, such adjustment
shall be made by the Administrator and shall be effective and binding
for all purposes of the Plan and of each Option.
(C) In the case or any substitution or adjustment in accordance with
the provisions of this Section 11, the option price in each Option for
each share covered thereby prior to such substitution or adjustment
shall be the option price for all shares of stock or other securities
which shall have been substituted for such share or to which such share
shall have been adjusted in accordance with the provisions of this
Section 11.
(D) No adjustment or substitution provided for in this Section 11 shall
require the Company to sell a fractional share under any Option.
(E) In the event of the dissolution or liquidation of the Company,
the Board, in its discretion, may accelerate the exercisability of
each Option and/or terminate the same within a reasonable time thereafter.
12. Purchase for Investment, Withholding and Waivers.
(A) Unless the delivery of the shares upon the exercise of an Option
by a Participant shall be registered under the Securities Act of 1933,
such Participant shall, as a condition of the Company's obligation to
deliver such shares, be required to give a representation in writing
that he is acquiring such shares for his own account as an investment
and not with a view to, or for sale in connection with, the
distribution of any thereof.
(B) In the event of the death of a Participant, an additional
condition of exercising any Option shall be the delivery to the
Company of such tax waivers and other documents as the
Administrator shall determine.
(C) An additional condition of exercising any non-incentive
stock option shall be the entry by the Participant into such
arrangements with the Company with respect to withholding as
the Administrator shall determine; provided, however, that
such Participant may direct the Company to satisfy all or a
portion of such withholding obligation by withholding from
the shares of the Common Stock issuable to him on such exercise
shares of the Common Stock having a fair market value equal to
the portion of the withholding obligation so satisfied.
13. Declining Market Price.
Except in the case of an Option granted to an Outside Director,
in the event the fair market value of the Common Stock declines
below the option price set forth in any Option, the Administrator
may, subject to the approval of the Board, at any time, adjust,
reduce, cancel and re-grant any unexercised Option or take any similar
action it deems to be for the benefit of the Participant in light of
the declining fair market value of the Common Stock.
14. No Stockholder Status; No Restrictions on Corporate Acts; No
Employment Right.
(A) Neither any Participant nor his legal representatives, legatees
or distributees shall be or be deemed to be the holder of any share
of the Common Stock covered by an Option unless and until a
certificate for such share has been issued. Upon payment of the
purchase price therefore, a share issued upon exercise of an Option
shall be fully paid and non-assessable.
(B) Neither the existence of the Plan nor any Option shall in any
way affect the right or power of the Company or its stockholders to
make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the
Company, or any issue of bonds, debentures, preferred or prior
preference stock ahead of or affecting the Common Stock or the
rights thereof, or dissolution or liquidation of the Company, or
any sale or transfer of all or any part of its assets or business,
or any other corporate act or proceeding whether of a similar
character or otherwise.
(C) Neither the existence of the Plan nor the grant of any Option
shall require the Company or any Subsidiary to continue any
Participant in the employ or service of the Company or such Subsidiary.
15. Termination and Amendment of the Plan.
(A) The Board may at any time terminate the Plan or make such
modifications of the Plan as it shall deem advisable; provided,
however, that the Board may not, without further approval of the
holders of the shares of the Common Stock, increase the number of
shares of the Common Stock as to which Options may be granted under
the Plan (as adjusted in accordance with the provisions of Section
11 hereof), or change the class of persons eligible to participate
in the Plan, or change the manner of determining the Option prices,
or extend the period during which an Option may be granted or
exercised. Except as otherwise provided in Section 16 hereof,
no termination or amendment of the Plan may, without the consent
of the Participant to whom any Option shall theretofore have been
granted, adversely affect the rights of such Participant under such
Option.
(B) The provisions of Section 5(C) hereof may not be amended except
by the vote of the majority of the members of the Board and by the
vote of the majority of the members of the Board who are not Outside
Directors, and the provisions of said Section 5(C) shall not be
amended more than once every six months, other than to comport with
changes in the Code, the Employee Retirement Income Security Act
of 1974 or the Rules and Regulations thereunder.
16. Expiration and Termination of the Plan.
The Plan shall terminate on February 10, 2012 or at such earlier time
as the Board may determine. Options may be granted under the Plan at
any time and from time to time prior to its termination. Any Option
outstanding under the Plan at the time of termination of the Plan
shall remain in effect until such Option shall have been exercised
or shall have expired in accordance with its terms.
17. Options Granted in Connection With Acquisitions.
The Administrator may determine, in connection with the acquisition
by the Company or a Subsidiary of another corporation which will
become a Subsidiary or division of the Company (such corporation
being hereafter referred to as an "Acquired Subsidiary"), that Options
may be granted hereunder to employees and other personnel of an
Acquired Subsidiary in exchange for then outstanding options to
purchase securities of the Acquired Subsidiary. The Administrator,
at its discretion shall determine as to such Options, the option
prices, may be exercisable immediately or at any time or times
either in whole or in part, and such other provisions not
inconsistent with the Plan, or the requirements set forth in
Section 15 hereof that certain amendments to the Plan be
approved by the stockholders of the Company.