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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by Rule 14a-6(e)(2))
[X]Definitive Proxy Statement
[ ]Definitive Additional Materials
[ ]Soliciting Material Pursuant to Section 240.14a-12
SCIENTIFIC INDUSTRIES, INC.
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Scientific Industries
(Letterhead)
November 28, 2014
Dear Fellow Stockholders:
You are cordially invited to attend the 2014 Annual Meeting of
Stockholders of Scientific Industries, Inc. which will be held at
11:00 a.m. (New York time) on Wednesday, January 7, 2015 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 2014 Annual
Meeting of Stockholders and Proxy Statement.
It is important that your shares be represented at the 2014 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.
80 Orville Drive, Suite 102
Bohemia, New York 11716
_____________
NOTICE OF 2014 ANNUAL MEETING OF STOCKHOLDERS
January 7, 2015
Notice is hereby given that the 2014 Annual Meeting of Stockholders
(the "Annual Meeting") of Scientific Industries, Inc., a Delaware corporation
(the "Company"), will be held on Wednesday, January 7, 2015, 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 two Class C Directors 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, 2017 and until the election and qualification of
their respective successors.
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, 2015.
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 November
28, 2014, 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
November 28, 2014
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.
80 Orville Drive, Suite 102
Bohemia, New York 11716
PROXY STATEMENT
_________________
2014 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY 7, 2015
_________________
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 2014 Annual Meeting of Stockholders (the "Annual Meeting") to be held
at La Quinta Inn & Suites, 10 Aero Road, Bohemia, New York, 11716, on
Wednesday, January 7, 2015, 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 two Directors of the Company to serve until the Company's annual
meeting of stockholders with respect to the fiscal year ending June 30, 2017,
and the election and qualification of their successors; (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, 2015; 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 November 28, 2014 (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 1,479,112 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 nominees, Joseph G. Cremonese and Roger B. Knowles as Class C
Directors 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, 2015.
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 nominees
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 December 2, 2014.
PRINCIPAL STOCKHOLDERS
The following table sets forth as of November 28, 2014 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* 162,500 11.0
Lowell A. Kleiman 139,581(1) 9.4
16 Walnut Street
Glen Head, NY 11545
Spectrum Laboratories, Inc. 127,986(2) 8.7
18617 Broadwick Street
Rancho Dominquez, CA 90220
Fulcrum, Inc. 126,449(3) 8.5
660 Kinderkamack Rd.
Oradell, NJ 07649
Joseph G. Cremonese* 104,597(4) 6.9
Grace S. Morin* 96,450(5) 6.5
Brookman P. March* 96,450(6) 6.5
* His or her address is c/o Scientific Industries, Inc., 80
Orville Drive, Suite 102, 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
February 2014.
(4) Represents 67,597 shares owned jointly with his wife, 7,000
shares owned by his wife, and 30,000 shares issuable upon
exercise of options.
(5) Includes 13,500 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
13,500 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 two Class C Directors are to be elected to serve until the
annual meeting of stockholders with respect to the fiscal year ending
June 30, 2017, and until their successors are duly elected and qualified.
During the fiscal year ended June 30, 2014 (?fiscal 2014?), the Board
held five 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 nominees identified below to the Board of Directors.
Nominees
The Board of Directors has designated Mr. Joseph G. Cremonese
and Mr. Roger B. Knowles, currently Class C Directors, as their nominees
for election.
Joseph G. Cremonese (age 78), 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 Laboratory Innovation Company, Ltd., his affiliate,
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 Fisher Scientific, the largest U.S.
distributor of laboratory equipment.
Roger B. Knowles (age 89), a Director since 1965, has been retired
for the last five years.
4
Other Directors
Class A Directors:
Helena R. Santos (age 50), 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 78), a Director since 1991, has been retired
for the last five years.
Class B Director:
Grace S. Morin (age 66), a Director since December 4, 2006, had
been President, Director and principal stockholder of Altamira Instruments,
Inc. 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.
Stock Ownership
The following table sets forth, as of November 28, 2014, 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 104,597 (1) 6.9%
Roger B. Knowles - -
Grace S. Morin 96,450 (2) 6.5%
James S. Segasture 162,500 11.0%
Helena R. Santos 15,779 1.1%
Robert P. Nichols 20,397 (3) 1.4%
Brookman P. March 96,450 (4) 6.5%
Karl D. Nowosielski 2,000 (5) 0.0%
All current directors and
executive officers as a
group (8 persons) 401,723 (6) 26.3%
5
(1) Represents 67,597 shares owned jointly with his wife, 7,000 shares
owned by his wife, and 30,000 shares issuable upon exercise of options.
(2) Includes 13,500 shares issuable upon exercise of options held by
her husband, Mr. March.
(3) Includes 2,000 shares issuable upon exercise of options.
(4) Represents 82,950 shares owned by his wife, Ms. Morin, and 13,500
shares issuable upon exercise of stock options.
(5) Represents shares issuable upon exercise of options.
(6) Includes 47,500 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 2014 the Stock Option Committee held one meeting.
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
2014, 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 five meetings during fiscal 2014. Ms.
Santos and Ms. Morin, who are not "independent" are "financial experts" as
defined by the Securities and Exchange Commission.
Directors' Compensation and Options
DIRECTORS' COMPENSATION
For the Year Ended June 30, 2014
_________________________________________________________________
Non-
Equity
Fees Incentive
Earned Plan
or Paid Stock Option Comp-
in Cash Awards Awards ensation
Name ($) ($) ($) ($)
(a) (b) (c) (d) (e)
__________________________________________________________________
Joseph G.
Cremonese 29,000 0 8,700(1) 0
Roger B.
Knowles 14,000 0 0 0
Grace S.
Morin 14,000 0 0 0
James S.
Segasture 14,000 0 0 0
___________________________________________________________________
DIRECTORS' COMPENSATION (CONTINUED)
Changes
in
Pension
Value and
Non- Non-
qualified qualified
Deferred Deferred All
Compens- Comp- Other
ation ensation Comp-
Earnings Earnings ensation Total
Name ($) ($) ($) ($)
(a) (f) (g) (h) (i)
____________________________________________________________________
Joseph G.
Cremonese 0 0 41,400(2) 79,100
Roger B.
Knowles 0 0 0 14,000
Grace S.
Morin 0 0 5,700(3) 19,700
James S.
Segasture 0 0 0 14,000
____________________________________________________________________
(1) The amount represents consulting expense recorded in fiscal 2014
for stock options granted in fiscal 2014 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 to Altamira.
6
The Company pays each Director who is not an employee of the
Company or a subsidiary a quarterly retainer fee of $2,000 and $1,400
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 $1,300 per month. During fiscal 2013, total director
compensation to non-employee Directors aggregated $126,800, 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 the 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 the exercise price of $3.10 per share; and
five-year options on September 17, 2009 to purchase 10,000 shares at the
exercise price of $1.88 per share. He also received on December 4, 2013
five-year options to purchase 10,000 shares at the exercise price of $3.45
per share, and on January 12, 2012 ten-year options to purchase 5,000
shares at an exercise price of $3.50 per share. The fiscal 2014 option
had a total fair value (as determined by the Black-Scholes-Merton option
pricing model) of $8,700 all of which was recognized as consulting expense
in 2014. He exercised 5,000 options at the price of $1.35 per share
during fiscal 2014.
Executive Officers and Key Personnel
See above for the employment history of Ms. Santos.
Robert P. Nichols (age 53), 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 69) 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 of the Company.
Karl D. Nowosielski (age 35), is the President of the Torbal
division of the Benchtop Laboratory Equipment Operations and Director
of Marketing for the Company. He had been until February 2014 Vice
President of Fulcrum, Inc. (the seller to the Company of the Torbal
division assets) since 2004.
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
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 for the compensation for
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
7
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 or loss 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, 2014 and 2013.
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 ($) ($) ($) ($) ($) ($)
(a) (b) (c) (d) (e) (f) (g) (h)
_____________________________________________________________________
Helena R. 2014 150,000 0 0 0 0 0
Santos, 2013 141,000 10,000(1) 0 0 0 0
CEO,
President,
CFO
_____________________________________________________________________
Robert P. 2014 135,000 0 0 500(3) 0 0
Nichols, 2013 129,100 5,000(1) 0 0 0 0
Exec.
V.P.
_____________________________________________________________________
Brookman 2013 135,000 0 0 2,500(5) 0 0
P. March, 2012 131,000 5,000(1) 0 1,900(4) 0 0
Director
of Sales
and
Marketing,
and
President of
Altamira
_____________________________________________________________________
Karl D. 2014 45,800(7) 0 0 3,900(6) 0 0
Nowosielski
President of
Torbal
Division
and Director
of Marketing
_____________________________________________________________________
SUMMARY COMPENSATION TABLE (CONTINUED)
_____________________________________________________________________
Changes
in
Pension
Value
and Non-
Qualified All
Name Deferred Other
and Comp- Comp-
Principal Fiscal ensation ensation Total
Position Year Earnings ($) ($)
(a) (b) (i) (j)
_____________________________________________________________________
Helena R. 2014 0 6,000(2) 156,000
Santos, 2013 0 4,200(2) 155,200
CEO,
President,
CFO
_____________________________________________________________________
Robert P. 2014 0 5,400(2) 140,900
Nichols, 2013 0 3,900(2) 138,000
Exec.
V.P.
_____________________________________________________________________
Brookman 2014 0 5,400(2) 142,900
P. March, 2013 0 5,200(2) 143,100
Director
of Sales
and
Marketing,
and
President of
Altamira
_____________________________________________________________________
Karl D. 2014 0 0 49,700
Nowosielski
President of
Torbal
Divsion
and Director
of Marketing
_____________________________________________________________________
8
(1) Represents amounts deemed earned for fiscal 2013.
(2) The amounts represent the Company?s matching contribution under
the Company's 401(k) Plans.
(3) The amount represents compensation expense for stock options
granted in fiscal 2014 valued utilizing the Black-Scholes-Merton
options pricing model, disregarding estimates of forfeitures related
to service-based vesting considerations. The option was valued at a
total of $3,500 of which $500 was expensed as stock based compensation
in fiscal 2014.
(4) The amount represents the compensation expense for the 2014 and
2012 stock options granted valued utilizing the Black-Scholes-Merton
options pricing model, disregarding estimates of forfeitures related to
service-based vesting considerations. An option grant in fiscal 2012
was valued at a total of $5,700 of which $1,900 was expensed as stock
based compensation in each of fiscal 2014 and fiscal 2013.
(5) The amount represents compensation expense for the 2014 stock
options granted valued utilizing the Black-Scholes-Merton options
pricing model, disregarding estimates of forfeitures related to
service-based vesting considerations. The 2014 option was valued
at a total of $3,500 of which $600 was expensed in fiscal 2014.
See Note (4) above.
(6) The amount represents compensation expense for a stock option
granted in fiscal 2014 as part of his employment agreement, valued
utilizing the Black-Scholes-Merton options pricing model, disregarding
estimates of forfeitures related to service-based vesting considerations.
The option was valued at $3,900, all of which was expensed as stock
based compensation in fiscal 2014.
(7) Represents salary from February 2014 to the end of fiscal 2014.
GRANTS OF PLAN-BASED AWARDS IN FISCAL YEAR ENDED JUNE 30, 2014
All Other
Estimated Estimated Stock
Future Future Awards:
Payouts Payouts Number
Under Under Of
Non-Equity Equity Shares
Incentive Incentive Of Stock
Grant Plan Plan Or Units
Name Date $ $ (#)
(a) (b) (c) (d) (e)
________________________________________________________
Brookman P. March 12/04/13 0 0 0
Robert P. Nichols 12/04/13 0 0 0
Karl D. Nowosielski 12/04/13 0 0 0
________________________________________________________
GRANTS OF PLAN-BASED AWARDS IN FISCAL YEAR ENDED JUNE 30, 2014
(CONTINUED)
All Other
Option Grant
Awards: Date
Number Exercise Fair
Of Or Base Value of
Securities Price Stock
Underlying Of Option And
Options Awards Option
Name # ($/Sh) Awards
(a) (f) (g) (h)
_________________________________________________________
Brookman P. March 2,000 3.50 3,500
Rober P. Nichols 2,000 3.50 3,500
Karl D. Nowosielski 2,000 3.67 3,900
_________________________________________________________
9
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
______________________________________________________________
Option Awards
______________________________________________________________
Number Equity
Number of Incentive
of Securities Plan Awards:
Securities Under- Number of
Under- lying Securities
lying Un- Unexercised Underlying Option
exercised Options(#) Unexercised Exercise Option
Options(#) Unexerci- Unearned Price Expiration
Name Exercisable sable Options(#) ($) Date
(a) (b) (c) (d) (e) (f)
_____________________________________________________________________
Brookman P. 9,834 3,666 0 3.07-3.71 11/2014-12/2023
March
Robert P.
Nichols 0 2,000 0 3.50 12/2023
Karl D.
Nowosielski 0 2,000 0 3.67 02/2024
_____________________________________________________________________
There were no options exercised by officers during fiscal 2014.
Employment Agreements
In May 2013, The Company entered into employment agreements
with Helena R. Santos and Robert P. Nichols extending their terms of
employment to June 30, 2015. The agreements provide for annual base
salaries for the fiscal years ending June 30, 2014 and June 30, 2015,
for Ms. Santos of $150,000 and $154,000, respectively; and for Mr. Nichols
of $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
during the terms of the agreement. 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 2014.
In May 2012, the Company entered into an employment agreement with
Mr. March extending the term through June 30, 2014, which was further
extended by mutual consent through June 30, 2015. The agreement provides
for an annual base salary of $135,000 and $140,000 for each of the fiscal
years ending June 30, 2014 and 2015. 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 2014. Mr.
March is the husband of Grace S. Morin, a Director of the Company and of
Altamira and a former principal stockholder of Altamira.
In February 2014 in conjunction with the acquisition of the Torbal
division assets from Fulcrum, Inc., the Company entered into an employment
agreement with Mr. Nowosielski providing for his employment through
February 2017, which may be extended by mutual consent for another two years.
The agreement provides for an annual base salary of $140,000, subject to
increases commencing with the second year based on percentage increases
in the Consumer Price Index, plus discretionary bonuses. The agreement
also provided for the issuance of 2,000 stock options exercisable at a
price of $3.50 per share upon commencement of employment and 4,000,
5,000, and 6,000 stock options in February 2015, 2016, and 2017,
respectively, subject to his continued employment. No bonuses have
been awarded under the agreement.
Each of the foregoing employment agreements contains confidentiality
and non-competition covenants. The employment agreements for Ms. Santos,
Mr. March, and Mr. Nowosielski 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
10
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, through
his affiliate, Laboratory Innovation Company, Ltd., has been providing
independent marketing consulting services to the Company since January 1,
2003 pursuant to a consulting agreement expiring December 31, 2014. The
agreement currently provides that Mr. Cremonese and his affiliate shall
render, at the request of the Company, marketing consulting services for
a monthly payment of $3,600. The agreement contains confidentiality and
non-competition covenants. The Company paid fees of $41,400 and $39,600
pursuant to the agreement for fiscal 2014 and fiscal 2013, respectively.
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
which expired March 31, 2014 at the rate of $85 per hour, resulting in
payments of $5,700 and $6,100 for fiscal 2014 and fiscal 2013,
respectively. The agreement contains confidentiality and non-competition
covenants.
Section 16(a) Reporting
The Company believes that, for the year ended June 30, 2014, 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, 2015. 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 a
nd its stockholders.
The following is a description of the fees incurred by the Company
for services by the Firm during fiscal 2014 and fiscal 2013.
The Company paid the Firm fees of approximately $64,000 and $62,000
for fiscal 2014 and 2013, respectively, in connection with the audit of the
Company's annual financial statements and quarterly reviews; and $6,000 for
each fiscal year for the preparation of the Company's corporate tax returns.
The Company also paid $12,600 of other fees to the Firm for fiscal 2014.
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, 2015.
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, 2014, includes its Annual Report on Form 10-K for the year
which was filed with the U.S. Securities and Exchange Commission on September
26, 2014. 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, 2015 must be received by the Secretary of the Company for inclusion
in the appropriate proxy materials no later than July 6, 2015.
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
November 28, 2014
__________________________________________________________________________
PROXY CARD:
SCIENTIFIC INDUSTRIES, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
January 7, 2015
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints James S. Segasture 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 2014 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 C Directors: JOSEPH G. CREMONESE ROGER B. KNOWLES
FOR both nominee ( ) WITHHOLD for both nominees ( )
If you wish your shares voted FOR one of the nominees, draw a line
through that person's name above.
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, 2015.
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 TO APPROVE PROPOSAL NO. 2.
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.