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. )
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ]Preliminary Proxy Statement
[ ]Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[X]Definitive Proxy Statement
[ ]Definitive Additional Materials
[ ]Soliciting Material Pursuant to Section 240.14a-12
SCIENTIFIC INDUSTRIES, INC.
-----------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
-----------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction
applies:
-----------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
-----------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
(1) Amount previously paid:
-----------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------
(3) Filing Party:
-----------------------------------------------------------------
(4) Date Filed:
-----------------------------------------------------------------
Scientific Industries
(Letterhead)
October 25, 2013
Dear Fellow Stockholders:
You are cordially invited to attend the 2013 Annual Meeting
of Stockholders of Scientific Industries, Inc. which will be held at
11:00 a.m. (New York time) on Wednesday, December 4, 2013 at La
Quinta Inn & Suites, 10 Aero Road, Bohemia, New York, 11716.
Information concerning the matters to be considered and voted
upon at the Annual Meeting is set out in the attached Notice of 2013
Annual Meeting of Stockholders and Proxy Statement.
It is important that your shares be represented at the 2013
Annual Meeting, regardless of the number of shares you hold and whether
or not you plan to attend the meeting in person. Accordingly, please
complete, sign and date the enclosed proxy card and return it as soon
as possible in the accompanying business reply envelope so that your
shares will be represented at the Annual Meeting. This will not limit
your right to vote in person or to attend the meeting.
Thank you for your continued support.
Sincerely,
/s/ Joseph G. Cremonese
_______________________
Joseph G. Cremonese
Chairman
SCIENTIFIC INDUSTRIES, INC.
70 Orville Drive
Bohemia, New York 11716
_____________
NOTICE OF 2013 ANNUAL MEETING OF STOCKHOLDERS
December 4, 2013
Notice is hereby given that the 2013 Annual Meeting of
Stockholders (the "Annual Meeting") of Scientific Industries, Inc.,
a Delaware corporation (the "Company"), will be held on Wednesday,
December 4, 2013, at 11:00 a.m. (New York time) at La Quinta Inn &
Suites, 10 Aero Road, Bohemia, New York, 11716, for the following
purposes:
1. To elect the Class B Director to the Company's Board of
Directors to serve until the Company's annual meeting of
stockholders with respect to the year ending June 30, 2016 and
until the election and qualification of her respective successor.
2. To ratify the appointment of Nussbaum Yates Berg Klein &
Wolpow, LLP as the Company's independent registered public
accounting firm for the fiscal year ending June 30, 2014.
3. To transact such other business as may properly come
before the Annual Meeting and any adjournments or postponements
thereof.
The foregoing items of business are more fully described in the
accompanying proxy statement.
The Board of Directors has fixed the close of business
on October 25, 2013, as the record date for determination of
stockholders entitled to notice of and to vote at, the Annual
Meeting and at any adjournments or postponements thereof.
A complete list of the stockholders entitled to vote at
the Annual Meeting will be available for inspection by any
stockholder of the Company at the Annual Meeting. In addition,
the list will be open for examination by any stockholder of the
Company for any purpose germane to the Annual Meeting during
ordinary business hours for a period of ten days prior to the
Annual Meeting at the offices of the Company.
You are requested to fill in and sign the enclosed form
of proxy, which is being solicited by the Board of Directors of
the Company, and mail it promptly in the enclosed postage paid
envelope. Any proxy may be revoked by delivery of a later
dated proxy.
By Order of your Board of Directors,
/s/ Robert P. Nichols
_____________________
Robert P. Nichols
Secretary
Bohemia, New York
October 25, 2013
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, WE KINDLY
REQUEST THAT YOU PLEASE COMPLETE, SIGN, DATE, AND PROMPTLY RETURN
THE ENCLOSED PROXY CARD IN THE POSTAGE PAID ENVELOPE PROVIDED.
IF YOU ARE A STOCKHOLDER OF RECORD AND YOU ATTEND THE ANNUAL
MEETING, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN IF YOU HAVE
PREVIOUSLY RETURNED YOUR PROXY CARD.
YOUR VOTE IS IMPORTANT
SCIENTIFIC INDUSTRIES, INC.
70 Orville Drive
Bohemia, New York 11716
PROXY STATEMENT
_________________
2013 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 4, 2013
_________________
Solicitation of Proxies
This proxy statement is furnished in connection with
the solicitation of proxies by and on behalf of the Board of
Directors (the "Board") of Scientific Industries, Inc., a Delaware
corporation (the "Company"), for use at the 2013 Annual Meeting
of Stockholders (the "Annual Meeting") to be held at La Quinta
Inn & Suites, 10 Aero Road, Bohemia, New York, 11716, on Wednesday,
December 4, 2013, at 11:00 a.m. (New York time), and at any
adjournments or postponements thereof.
At the Annual Meeting, stockholders of the Company will
be asked to: (1) elect one Director of the Company to serve until
the Company's annual meeting of stockholders with respect to the
fiscal year ending June 30, 2016, and the election and qualification
of her successor; (2) ratify the appointment of Nussbaum Yates Berg
Klein & Wolpow, LLP, as the Company's independent registered public
accounting firm for the fiscal year ending June 30, 2014; and (3)
transact such other business as may properly come before the Annual
Meeting and any adjournments or postponements thereof.
Record Date, Voting Rights
Only stockholders of record of the Company's Common Stock,
par value $0.05 per share (the "Common Stock"), as of the close of
business on October 25, 2013 (the "Record Date"), are entitled to
notice of and to vote at the Annual Meeting and any adjournments or
postponements thereof. On the Record Date, there were 1,342,663
shares of Common Stock issued and outstanding. Each share of
Common Stock is entitled to one vote.
The presence at the Annual Meeting, in person or by a
properly executed proxy, of the holders of a majority of the
outstanding shares of the Company's Common Stock as of the
Record Date is necessary to constitute a quorum. In the
determination of the number of shares of Common Stock present
at the Annual Meeting for quorum purposes abstentions and broker
"non-votes" are included. A broker "non-vote" occurs when a
nominee holding shares of Common Stock for a beneficial owner
does not vote on a particular proposal because the nominee
does not have discretionary voting power with respect to that
item and has not received instructions from the beneficial owner.
Voting of Proxies, Revocation, Solicitation
All stockholders who deliver properly executed and dated
proxies to the Company prior to the Annual Meeting will be deemed
present at the Annual Meeting regardless of whether such proxies
direct the proxy holders to vote for or against, or to withhold or
abstain from voting. The proxies, when properly executed and
returned to the Company, will be voted in accordance with the
instructions given therein by the person executing the proxy.
In the absence of instructions, properly executed proxies other
than with respect to broker "non-votes" will be voted FOR (1)
the election of the Board's nominee, Grace S. Morin as the Class
B Director of the Company; and (2) the ratification of the
appointment by the Board of Directors of Nussbaum Yates Berg
Klein & Wolpow, LLP, as the Company's independent registered
public accounting firm for the fiscal year ending June 30, 2014.
1
Any stockholder who executes and delivers a proxy may
revoke it at any time before it is voted by delivering a written
notice of such revocation to the Secretary of the Company at the
address of the Company set forth in this proxy statement, by
submitting a properly executed proxy bearing a later date, or by
appearing at the Annual Meeting and requesting the return of
the proxy or by voting in person. In accordance with applicable
rules, boxes and designated spaces are provided on the proxy card
for stockholders to mark if they wish either to vote for or withhold
authority to vote for the nominee for Director, or to vote for,
against or to abstain from voting for the proposal to ratify the
appointment by the Board of Directors of the Company's independent
registered public accounting firm.
A stockholder's attendance at the Annual Meeting will not,
by itself, revoke a proxy given by that stockholder. Stockholders
vote at the Annual Meeting by casting ballots (in person or by
proxy), which are tabulated by a person who is appointed by the
Board of Directors before the Annual Meeting to serve as inspector
of election at the Annual Meeting and who has executed and verified
an oath of office.
It is anticipated that this proxy statement, the enclosed
proxy card, and the Company's Annual Report will be mailed to the
Company's stockholders on or about November 4, 2013.
PRINCIPAL STOCKHOLDERS
The following table sets forth as of October 25, 2013 certain
information as to each person who to the Company's knowledge, based
upon such person's representations or publicly available filings,
beneficially owned more than 5% of the outstanding shares of the
Company's Common Stock as of that date:
Name and Address of Shares Beneficially Percent of
Beneficial Owner Owned** Class***
___________________ ___________________ __________
James S. Segasture* 163,500 12.1
Lowell A. Kleiman 139,581(1) 10.4
16 Walnut Street
Glen Head, NY 11545
Spectrum Laboratories, Inc. 127,986(2) 9.5
18617 Broadwick Street
Rancho Dominquez, CA 90220
Fluorometrix Corp. 90,090(3) 6.7
24 Timber Edge Road
Stow, MA 01775
Joseph G. Cremonese* 98,597(4) 7.2
Grace S. Morin* 94,450(5) 7.0
Brookman P. March* 94,450(6) 7.0
* His or her address is c/o Scientific Industries, Inc., 70 Orville
Drive, Bohemia, New York 11716.
2
*** Percentages of ownership are based upon the number of shares
of Common Stock issued and outstanding. Shares of Common Stock that
may be acquired pursuant to options that are exercisable within 60
days of the date indicated above are deemed outstanding for computing
the percentage ownership of the person holding such options, but are
not deemed outstanding for the percentage ownership of any other
person.
(1) Based on information reported on Schedule 13D filed with the
Securities and Exchange Commission on October 30, 2002.
(2) Based on information reported on Schedule 13G filed with the
Securities and Exchange Commission on June 15, 2009.
(3) Represents shares acquired upon sale of assets to the Company
in November 2011.
(4) Represents 56,597 shares owned jointly with his wife, 7,000
shares owned by his wife, and 35,000 shares issuable upon exercise
of options.
(5) Includes 11,500 shares issuable upon exercise of options held
by her husband, Mr. March.
(6) Represents 82,950 shares owned by his wife, Grace S. Morin
and 11,500 shares issuable upon exercise of options.
3
PROPOSAL 1
ELECTION OF DIRECTORS
General
The Company's Certificate of Incorporation provides for a
classified Board of Directors, consisting of three classes, each class
serving a three-year term on a staggered basis. Two are Class A Directors,
one is a Class B Director, and two are Class C Directors. At the Annual
Meeting, the one Class B Director is to be elected to serve until the annual
meeting of stockholders with respect to the fiscal year ending June 30, 2016,
and until her successor is duly elected and qualified. During the fiscal year
ended June 30, 2013 ("fiscal 2013"), the Board held four meetings, at each of
which all Directors were present. Shares of Common Stock represented by
executed and returned proxies solicited by the Board of Directors will be
voted for the nominee hereinafter named if authority to do so is not
specifically withheld. If for any reason said nominee shall become
unavailable for election, which is not now anticipated, the proxies will
be voted for a substitute nominee designated by the Board of Directors.
The Directors of the Company are elected by the affirmative vote of
the holders of a plurality of the shares of Common Stock present in person
or represented by proxy at the Annual Meeting and entitled to vote. A
plurality means that the nominee with the largest number of votes is elected
as Director. In tabulating the vote, abstentions and broker "non-votes"
will be disregarded and will have no effect on the outcome of the vote.
The Board of Directors recommends that stockholders vote FOR the
election of the nominee identified below to the Board of Directors.
Nominee
The Board of Directors has designated Ms. Grace S. Morin, currently
the Class B Director, as its nominee for election.
Grace S. Morin (age 65), a Director since December 4, 2006, had been
President, Director and principal stockholder of Altamira Instruments, Inc.
("Altamira") from December 2003 until its acquisition in November 2006 by
the Company. Ms. Morin had been employed by Altamira to supervise its
administrative functions at the Pittsburgh, Pennsylvania facility as a full-
time employee through March 31, 2009 and since that date as a part-time
consultant. Prior to December 2003, she was a general business consultant
for two years, and prior thereto a member of senior management of a designer
of gas flow environmental engineered products for approximately four years.
4
Other Directors
Class A Directors:
Helena R. Santos (age 49), a Director since 2009, has been employed
by the Company since 1994, and has served since August 2002 as its President,
Chief Executive Officer and Treasurer. She had served as Vice President,
Controller from 1997 and as Secretary from May 2001. Ms. Santos was an
internal auditor with a major defense contractor from March 1991 to April
1994. She had been previously employed in public accounting.
James S. Segasture (age 77), a Director since 1991, has been retired
for the last five years.
Class C Directors:
Joseph G. Cremonese (age 77), a Director since November 2002 and
Chairman of the Board since February 2006, has been, through his affiliate,
a marketing consultant to the Company since 1996. Mr. Cremonese has been
since 1991, President of his affiliate, Laboratory Innovation Company, Ltd.,
which is a vehicle for technology transfer and consulting services for
companies, engaged in the production and sale of products for science and
biotechnology. Since March 2003, he has been a director of Proteomics, Inc.,
a producer of recombinant proteins for medical research. Prior to 1991, he
had been employed by Thermo Fisher Scientific, the largest distributor in the
United States of laboratory equipment.
Roger B. Knowles (age 88), a Director since 1965, has been retired
for the last five years.
Stock Ownership
The following table sets forth, as of October 25, 2013, relevant
information as to the shares of Common Stock beneficially owned by (i)
each Director of the Company, (ii) each executive officer of the Company
identified in the Summary Compensation Table under "Executive Officers
and Key Personnel," and (iii) all directors and executive officers as
a group.
Beneficial Owner Number Percentage
Joseph G. Cremonese 98,597 (1) 7.2%
Roger B. Knowles - -
Grace S. Morin 94,450 (2) 7.0%
James S. Segasture 163,500 12.1%
Helena R. Santos 15,779 1.2%
Robert P. Nichols 18,397 1.4%
Brookman P. March 94,450 (3) 7.0%
All current directors and
executive officers as a
group (5 persons) 390,723 (4) 28.1%
5
(1) Represents 56,597 shares owned jointly with his wife, 7,000
shares owned by his wife, and 35,000 shares issuable upon exercise
of options.
(2) Includes 11,500 shares issuable upon exercise of options held
by her husband, Mr. March.
(3) Represents 82,950 shares owned by his wife, Ms. Morin, and
11,500 shares issuable upon exercise of stock options.
(4) Includes 46,500 shares issuable upon exercise of options.
Board Committees
The Company's Stock Option Committee administers the Company's
2012 Stock Option Plan. The members of the committee are non-management
Directors of the Company - James S. Segasture and Joseph G. Cremonese.
The members of the Committee serve at the discretion of the Board.
During fiscal 2013 the Stock Option Committee did not hold any meetings.
Grace S. Morin, and James S. Segasture are the current members of
the Company's Compensation Committee serving at the discretion of the
Board. The Committee administers the Company's compensation policies.
During fiscal 2013, the Compensation Committee held one meeting.
The Board of Directors acts as the Company?s Audit Committee,
which in its function as the Committee, held four meetings during fiscal
2013. Ms. Santos, who is not "independent" and Ms. Morin are "financial
experts" as defined by the Securities and Exchange Commission.
Directors' Compensation and Options
DIRECTORS' COMPENSATION
For the Year Ended June 30, 2013
_________________________________________________________________
Non-
Equity
Fees Incentive
Earned Plan
or Paid Stock Option Comp-
in Cash Awards Awards ensation
Name ($) ($) ($) ($)
(a) (b) (c) (d) (e)
__________________________________________________________________
Joseph G.
Cremonese 26,400 0 5,000(1) 0
Roger B.
Knowles 12,000 0 0 0
Grace S.
Morin 12,000 0 0 0
James S.
Segasture 12,000 0 0 0
___________________________________________________________________
DIRECTORS' COMPENSATION (CONTINUED)
Changes
in
Pension
Value and
Non- Non-
qualified qualified
Deferred Deferred All
Compens- Comp- Other
ation ensation Comp-
Earnings Earnings ensation Total
Name ($) ($) ($) ($)
(a) (f) (g) (h) (i)
____________________________________________________________________
Joseph G.
Cremonese 0 0 39,600(2) 71,000
Roger B.
Knowles 0 0 0 12,000
Grace S.
Morin 0 0 6,100(3) 18,100
James S.
Segasture 0 0 0 12,000
____________________________________________________________________
6
(1) The amount represents consulting expense recorded in fiscal 2013
for stock options granted in fiscal 2012 utilizing the Black-Scholes-
Merton options pricing model.
(2) Represents amount paid to his affiliate pursuant to a marketing
consulting agreement.
(3) Represents compensation received for her administrative services
as a consultant for Altamira.
The Company pays each Director who is not an employee of the
Company or a subsidiary a quarterly retainer fee of $1,800 and $1,200
for each meeting attended. In addition, the Company reimburses each
Director for out-of-pocket expenses incurred in connection with
attendance at board meetings in the amount of $50 or the Director's
itemized expenses, whichever is greater. Mr. Cremonese, as Chairman
of the Board receives an additional fee of $1,200 per month. During
fiscal 2013, total director compensation to non-employee Directors
aggregated $113,100, including the consulting fees paid to Mr.
Cremonese's affiliate, and to Ms. Morin.
Under the Company's 2002 Stock Option Plan, none of the
Directors existing at the time of the adoption of the plan were
eligible to receive option grants thereunder. However, Mr.
Joseph G. Cremonese who was elected a Director for the first time
at the 2002 Annual Meeting of Stockholders, was granted ten-year
options on December 1, 2003 to purchase 5,000 shares of the
Company's Common Stock at an exercise price of $1.35 per share;
ten-year options on February 20, 2007 to purchase 5,000 shares
of the Company's Common Stock at an exercise price of $3.10 per
share; five-year options on September 17, 2009 to purchase 10,000
shares at an exercise price of $1.88 per share, and five-year
options on January 12, 2012 to purchase 10,000 shares at an
exercise price of $3.45 per share. The fiscal 2012 options
had a total fair value (as determined by the Black-Scholes-
Merton option pricing model) of $10,000 of which $5,000 was
recognized as consulting expense in fiscal 2012 and $5,000 in
fiscal 2013. He exercised in October 2013 the $1.35 options
to purchase 5,000 shares.
Executive Officers and Key Personnel
Ms. Helena R. Santos and Mr. Robert P. Nichols are the
executive officers of the Company. Mr. Brookman P. March is
President and Director of Sales and Marketing of Altamira.
See "Election of Directors" for the employment history
of Ms. Santos.
Robert P. Nichols (age 52), employed by the Company
since February 1998, has served since August 2002 as Executive
Vice President. Previously, he had been since May 2001 Vice
President, Engineering. Prior to joining the Company, Mr. Nichols
was an Engineer Manager with Bay Side Motion Group, a precision
motion equipment manufacturer from January 1996 to February 1998.
Brookman P. March (age 68) has been Director of Sales
and Marketing of Altamira, which has conducted the Catalyst Research
Instruments operation since November 30, 2006 and its President since
July 2008. He had been Vice President and a Director of Altamira
from December 2003 until it was acquired by the Company. Mr. March
is the husband of Ms. Morin, a Director.
The executive officers of the Company are elected by the
Board of Directors of the corporation for which they serve as
officers and hold office until their respective successors are
elected and qualified or
7
until his or her earlier resignation or removal. None of the
officers need to be Directors, and more than one office may be
held by the same person. There is no arrangement or understanding
between any executive officer and any person other than the
Company regarding election as an officer.
The Compensation Committee reviews and recommends to the
Board of Directors the compensation to be paid to each executive
officer. Executive compensation, in all instances except the
compensation of the Chief Executive Officer ("CEO"), is based on
recommendations from the CEO. The CEO makes a determination by
comparing the performance of each executive being reviewed with
objectives established at the beginning of each fiscal year and
with objectives established during the business year with regard
to the success of the achievement of such objectives and the
successful execution of management targets and goals.
With respect to the compensation of the CEO, the Committee
considers performance criteria, 50% of which is related to the
direction, by the CEO, of the reporting executives, the
establishment of executive objectives as components for the
successful achievement of Company goals and the successful
completion of programs leading to the successful completion of
the Business Plan for the Company and 50% is based on the
achievement by the Company of its financial and personnel goals
tempered by the amount of the income of the Company during the
fiscal year.
The compensation at times includes grants of options
under its stock option plan to the named executives. Each officer
is employed pursuant to a long-term employment agreement,
containing terms proposed by the Committee and approved as
reasonable by the Board of Directors. The Board is cognizant
that as a relatively small company, the Company has limited
resources and opportunities with respect to recruiting and
retaining key executives. Accordingly, the Company has relied
upon long-term employment agreements and grants of stock options
to retain qualified personnel.
Compensation for each of its executive officers provided
by their employment agreements were based on the foregoing factors
and the operating and financial results of the segments under their
management.
The following table summarizes all compensation paid by
the Company to each of its executive officers for the fiscal
years ended June 30, 2013 and 2012.
8
SUMMARY COMPENSATION TABLE
_____________________________________________________________________
Non- Non-
Equity Qualified
Incentive Deferred
Name Plan Comp-
and Stock Option Comp- ensation
Principal Fiscal Salary Bonus Awards Awards ensation Earnings
Position Year ($) ($) ($) ($) ($) ($)
(a) (b) (c) (d) (e) (f) (g) (h)
_____________________________________________________________________
Helena R. 2013 141,000 10,000(1)0 0 0 0
Santos, 2012 138,000 0 0 0 0 0
CEO,
President,
CFO
_____________________________________________________________________
Robert P. 2013 129,100 5,000(1) 0 0 0 0
Nichols, 2012 126,300 0 0 0 0 0
Exec.
V.P.
_____________________________________________________________________
Brookman 2013 131,000 5,000(1) 0 1,900(3) 0 0
P. March, 2012 128,000 0 0 200(3) 0 0
Director
of Sales
and
Marketing,
and
President of
Altamira
_____________________________________________________________________
SUMMARY COMPENSATION TABLE (CONTINUED)
_____________________________________________________________________
Changes
in
Pension
Value
and Non-
Qualified All
Name Deferred Other
and Comp- Comp-
Principal Fiscal ensation ensation Total
Position Year Earnings ($) ($)
(a) (b) (i) (j)
_____________________________________________________________________
Helena R. 2013 0 4,200(2) 155,200
Santos, 2012 0 2,800(2) 140,800
CEO,
President,
CFO
_____________________________________________________________________
Robert P. 2013 0 3,900(2) 138,000
Nichols, 2012 0 2,500(2) 128,800
Exec.
V.P.
_____________________________________________________________________
Brookman 2013 0 5,200(2) 143,100
P. March, 2012 0 5,100(2) 133,300
Director
of Sales
and
Marketing,
and
President of
Altamira
_____________________________________________________________________
(1) Represents amounts earned for fiscal 2013.
(2) The amounts represent the Company's matching contribution under
the Company's 401(k) Plans.
(3) The amounts represent compensation expense for stock options
granted valued utilizing the Black-Scholes-Merton options pricing
model, disregarding estimates of forfeitures related to service-
based vesting considerations. The fiscal 2012 option was valued
at a total of $5,700 of which $1,900 was expensed as stock based
compensation in fiscal 2013, and $200 in fiscal 2012.
GRANTS OF PLAN-BASED AWARDS IN FISCAL YEAR ENDED JUNE 30, 2013
There were no options granted to officers during fiscal 2013.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
______________________________________________________________
Option Awards
______________________________________________________________
Number Equity
Number of Incentive
of Securities Plan Awards:
Securities Under- Number of
Under- lying Securities
lying Un- Unexercised Underlying Option
exercised Options(#) Unexercised Exercise Option
Options(#) Unexerci- Unearned Price Expiration
Name Exercisable sable Options(#) ($) Date
(a) (b) (c) (d) (e) (f)
_____________________________________________________________________
Brookman P. 8,167 3,333 0 3.07 5/2022
March
_____________________________________________________________________
9
OPTION EXERCISES IN FISCAL 2013
______________________________________________________________________
Number of Shares
Acquired on Value Realized
Name Exercise (#) on Exercise ($)
(a) (b) (c)
_______________________________________________________
Robert P. Nichols 5,000 4,000
_______________________________________________________
Employment Agreements
In May 2013, The Company entered into new employment
agreements with Helena R. Santos and Robert P. Nichols extending
their terms of employment to June 30, 2015. The new agreements
increased the annual base salaries for the fiscal years ending June
30, 2014 and June 30, 2015, of Ms. Santos from $141,000 for the fiscal
year ended June 30, 2013 to $150,000 and $154,000 respectively; and
of Mr. Nichols from $129,100 for the fiscal year ended June 30, 2013
to $135,000 and $139,000 respectively. Bonuses, if any, are to be
awarded at the discretion of the Board of Directors for each of the
fiscal years. For the fiscal year ended June 30, 2013 bonuses of $10,000
and $5,000, for Ms. Santos and Mr. Nichols, respectively, were authorized.
No bonuses were awarded for fiscal 2012.
In May 2012, the Company entered into a new employment agreement
with Mr. March extending the term through June 30, 2014, which may be
further extended by mutual consent for an additional 12 month period.
The agreement provides for an annual base salary of $131,000 and $135,000
for the fiscal years ending June 30, 2013 and 2014, respectively.
Bonuses, if any, may be awarded at the discretion of the Board of
Directors. A bonus of $5,000 was awarded to Mr. March for fiscal 2013.
No bonus was awarded for fiscal 2012.
Mr. March is the husband of Grace S. Morin, a Director of the
Company and of Altamira and a former principal stockholder of Altamira.
Each of the foregoing employment agreements contains
confidentiality and non-competition covenants. The employment agreements
for Ms. Santos and Mr. March contain termination provisions stipulating
that if the Company terminates the employment other than for death,
disability, or cause (defined as (i) conviction of a felony or (ii)
gross neglect or gross misconduct including conflict of interest, the
Company shall pay severance payments equal to one year?s salary at the
rate of the compensation at the time of termination, and continue to
pay the regular benefits provided by the Company for a period of two
years from termination.
Related Transactions
Mr. Joseph G. Cremonese, a Director since November 2002, has
been providing through his affiliate, Laboratory Innovation Company,
Ltd., independent marketing consulting services to the Company.
The services have been rendered since January 1, 2003 pursuant to
a consulting agreement expiring December 31, 2013. The agreement
currently provides that Mr. Cremonese and his affiliate
10
shall render, at the request of the Company, marketing
consulting services for a monthly payment of $3,300. The
agreement contains confidentiality and non-competition covenants.
The Company paid fees of $39,600 pursuant to the agreement for
each of fiscal 2013 and fiscal 2012.
Ms. Grace S. Morin, was elected a Director in December
2006 upon the sale of her 90.36% ownership interest in Altamira
to the Company in November 2006. Until March 31, 2009, Ms.
Morin had been employed by Altamira as an administrative employee.
Since April 1, 2009, she has provided consulting services on a
part-time basis pursuant to an agreement expiring March 31, 2014
at the rate of $85 per hour, resulting in payments of $6,100
and $5,100 for fiscal 2013 and fiscal 2012, respectively. The
agreement contains confidentiality and non-competition covenants.
Section 16(a) Reporting
The Company believes that, for the year ended June 30, 2013,
its officers, directors and 10% stockholders timely complied with
all filing requirements of Section 16(a) of the Securities
Exchange Act of 1934, as amended.
11
PROPOSAL 2
APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors, subject to stockholders' approval,
appointed Nussbaum Yates Berg Klein & Wolpow, LLP (the "Firm") as
the Company's independent registered public accounting firm for the
fiscal year ending June 30, 2014. The Firm has audited the
consolidated financial statements of the Company since 1991. A
representative of the Firm is expected to be present at the Annual
Meeting, and will have an opportunity to make a statement to the
stockholders and will be available to respond to appropriate
questions. The ratification of the appointment will require the
affirmative vote of the holders of a majority of the outstanding
shares of Common Stock present in person or represented by proxy at
the Annual Meeting and entitled to vote. Abstentions will be
included in determining the number of shares of Common Stock present
or represented and entitled to vote for purposes of approval and will
have the effect of votes "against" the proposal. Broker
"non-votes" will not be counted in determining the number of
shares of Common Stock present or represented and entitled to vote
to approve the proposal and will therefore not have the effect of
votes either "for" or "against".
Stockholder ratification of the appointment is not required by
the Company's Certificate of Incorporation or By-laws or otherwise.
If the stockholders fail to ratify the appointment, the Board of
Directors will reconsider whether to retain that firm. Even if the
appointment is ratified, the Board of Directors in its discretion may
direct the appointment of a different independent registered public
accounting firm at any time during the year if the Audit Committee,
currently the entire Board of Directors, determines that such a change
would be in the best interest of the Company and its stockholders.
The following is a description of the fees incurred by the
Company for services by the Firm during fiscal 2013 and fiscal 2012.
The Company incurred for the services of the Firm fees of
approximately $62,000 and $61,000 for fiscal 2013 and 2012,
respectively, in connection with the audit of the Company's annual
financial statements and quarterly reviews; and $5,000 for each
fiscal year for the preparation of the Company's corporate tax
returns. There were no other audit related fees or other fees paid
to the Firm for the two fiscal years.
In approving the engagement of the independent registered
public accounting firm to perform the audit and non-audit services,
the Board of Directors as the Company's Audit Committee evaluates the
scope and cost of each of the services to be performed including a
determination that the performance of the non-audit services will
not affect the independence of the firm in the performance of the audit
services.
The Board of Directors unanimously recommends that the stockholders
vote FOR the ratification of the appointment of Nussbaum Yates Berg
Klein & Wolpow, LLP as the independent registered public accounting
firm of the Company for the fiscal year ending June 30, 2014.
12
OTHER MATTERS
The Board of Directors are not aware of any matters other than
those set forth in this proxy statement that will be presented for action
at the Annual Meeting; however, if any other matters properly come before
the Annual Meeting, the persons named as proxies intend to vote the shares
of Common Stock they represent in accordance with their judgment on such
matters.
ADDITIONAL INFORMATION
The Company's Annual Report to Stockholders for the fiscal year
ended June 30, 2013, includes its Annual Report on Form 10-K for the
year which was filed with the U.S. Securities and Exchange Commission on
September 27, 2013. The Annual Report to Stockholders on Form 10-K is not
part of this proxy material, but is being mailed to stockholders with this
proxy solicitation. Certain information included herein is incorporated in
the Report by reference.
STOCKHOLDER PROPOSALS
Proposals of stockholders of the Company intended to be presented
at the Company's Annual Meeting of Stockholders following the year ending
June 30, 2014 must be received by the Secretary of the Company for
inclusion in the appropriate proxy materials no later than July 7, 2014.
EXPENSES AND SOLICITATION
The entire cost of soliciting proxies will be borne by the Company.
In addition to the use of the mails, proxies may be solicited by officers,
directors and regular employees of the Company personally or by telephone.
No additional compensation will be paid to such persons for any additional
solicitations. The Company will also request securities brokers, custodians,
nominees and fiduciaries who hold shares of Common Stock of record to forward
solicitation material to the beneficial owners of such shares, and will
reimburse them for their reasonable out-of-pocket expenses in forwarding such
soliciting materials.
By Order of your Board of Directors,
/s/ Robert P. Nichols
_____________________
Robert P. Nichols
Secretary
Bohemia, New York
October 25, 2013
__________________________________________________________________________
PROXY CARD:
SCIENTIFIC INDUSTRIES, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
December 4, 2013
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Joseph G. Cremonese and Helena R. Santos,
and each of them, with full power of substitution, to vote, as a holder
of the common stock, par value $0.05 per share ("Common Stock"), of
Scientific Industries, Inc., a Delaware corporation (the "Company"),
all the shares of Common Stock which the undersigned is entitled to vote,
through the execution of a proxy with respect to the 2013 Annual Meeting
of Stockholders of the Company (the "Annual Meeting"), to be held at
La Quinta Inn & Suites, 10 Aero Road, Bohemia, New York, on Wednesday,
December 4, 2013 at 11:00 a.m. New York time, and any and all
adjournments or postponements thereof, and authorizes and instructs said
proxies to vote in the manner directed below.
1. Election of Class B Director: GRACE S. MORIN
FOR nominee ( ) WITHHOLD for nominee ( )
2. Ratify the appointment of Nussbaum Yates Berg Klein & Wolpow, LLP,
as the Company's independent registered public accounting firm for the
fiscal year ending June 30, 2014.
FOR ( ) AGAINST ( ) ABSTAIN ( )
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before such meeting or adjournment or
postponement thereof.
The Board of Directors recommends the vote FOR the election of the named
nominee for Class B Director and proposal 2.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE, PLEASE VOTE, SIGN AND DATE ON
REVERSE SIDE AND RETURN PROMPTLY.
__________________________________________________________________________
(BACK OF CARD)
PROPERLY EXECUTED AND RETURNED PROXY CARDS WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO INSTRUCTIONS TO THE
CONTRARY ARE MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF EACH OF THE
NAMED NOMINEES AND APPROVE PROPOSALS NOs. 2 AND 3.
You may revoke this proxy at any time before it is voted by (i) filing
a revocation with the Secretary of the Company, (ii) submitting a duly
executed proxy bearing a later date or time than the date or time of
the proxy being revoked; or (iii) attending the Annual Meeting and
voting in person. A stockholder's attendance at the Annual
Meeting will not by itself revoke a proxy given by the stockholder.
(Please sign exactly as the name appears
hereon. Joint owners should each sign. When
signing as attorney, executor, administrator,
trustee or guardian, please give full title as
such. If a corporation, please sign with full
corporate name by the president or other
authorized officer. If a partnership, please
sign in the partnership name by an authorized
person.)
Dated:_________________ _______________________________
Signature
PLEASE COMPLETE, SIGN, DATE __________________________________
AND RETURN THE PROXY CARD Signature, if held by joint owners
PROMPTLY USING THE
ENCLOSED ENVELOPE.