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.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the
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November 24, 2015
Dear Fellow Stockholders:
You are cordially invited to attend the 2015 Annual Meeting
of Stockholders of Scientific Industries, Inc. which will be held at
11:00 a.m. (New York time) on Wednesday, January 7, 2016 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 2015
Annual Meeting of Stockholders and Proxy Statement.
It is important that your shares be represented at the 2015
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 2015 ANNUAL MEETING OF STOCKHOLDERS
January 7, 2016
Notice is hereby given that the 2015 Annual Meeting of
Stockholders (the "Annual Meeting") of Scientific Industries, Inc.,
a Delaware corporation (the "Company"), will be held on Wednesday,
January 7, 2016, 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 A 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, 2018 and 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, 2016.
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 23, 2015, 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 24, 2015
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
_________________
2015 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY 7, 2016
_________________
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 2015 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, 2016, 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, 2018, 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, 2016; 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 23, 2015 (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 1,489,112 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, James S. Segasture and Helena R. Santos as Class A 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, 2016.
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 4, 2015.
PRINCIPAL STOCKHOLDERS
The following table sets forth as of November 23, 2015 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:
Amount and
Name Nature of Beneficial Ownership % of Class
___________________________ ______________________________ __________
Spectrum Laboratories, Inc. 127,986 (1) 8.6%
18617 Broadwick Street
Rancho Dominquez, CA 90220
Fulcrum, Inc. 126,449 (2) 8.5%
100 Delawanna Avenue
Clifton, NJ 07014
Lowell A. Kleiman 122,581 (3) 8.2%
16 Walnut Street
Glen Head, NY 11545
Joseph G. Cremonese* 104,597 (4) 6.9%
Roger B. Knowles* - -
Grace S. Morin* 89,950 (5) 6.1%
James S. Segasture* 162,500 (6) 10.9%
Helena R. Santos* 15,779 1.1%
Robert P. Nichols* 20,397 (7) 1.4%
Brookman P. March* 89,950 (8) 6.1%
Karl D. Nowosielski* 6,000 (9) 0.0%
All directors and executive
officers as a group (8 persons) 399,223 (10) 26.2%
2
* His or her address is c/o Scientific Industries, Inc., 80 Orville Drive,
Suite 102, Bohemia, New York 11716.
** 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 Form 3 filed with the Securities and
Exchange Commission on June 27, 2011.
(2) Shares issued in connection with the acquisition of the Torbal division
assets from Fulcrum, Inc. on February 26, 2014.
(3) Based on information reported in his Schedule 13D filed with the
Securities and Exchange Commission on January 8, 2015.
(4) 77,597 shares are owned jointly with his wife, 7,000 shares are owned
by his wife, and 20,000 shares are issuable upon exercise of options.
(5) Includes 7,000 shares issuable upon exercise of options held by her
husband, Mr. March.
(6) Shares owned jointly with his wife.
(7) Includes 2,000 shares issuable upon exercise of options.
(8) Represents 82,950 shares owned by Ms. Morin, his wife and 7,000 shares
issuable upon exercise of options.
(9) Represents shares issuable upon exercise of options.
(10) Includes 35,000 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 A Directors are to
be elected to serve until the annual meeting of stockholders with
respect to the fiscal year ending June 30, 2018, and until their
successors are duly elected and qualified. During the fiscal year
ended June 30, 2015 ("fiscal 2015"), 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 nominees identified below to the Board of Directors.
Nominees
The Board of Directors has designated Mr. James S.
Segasture and Ms. Helena R. Santos, currently Class A Directors, as
their nominees for election.
Helena R. Santos (age 51), 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 79), a Director since 1991, has
been retired for the last five years.
Other Directors
Joseph G. Cremonese (age 79), 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 Fisher Scientific, the largest U.S. distributor of laboratory
equipment.
4
Roger B. Knowles (age 90), a Director since 1965, has been
retired for the last five years.
Grace S. Morin (age 67), 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 23, 2015,
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 89,950(2) 6.1%
James S. Segasture 162,500 10.9%
Helena R. Santos 15,779 1.1%
Robert P. Nichols 20,397(3) 1.4%
Brookman P. March 89,950(4) 6.1%
Karl D. Nowosielski 6,000(5) 0.0%
All current directors and executive 399,223(6) 26.2%
officers as a group (8 persons)
(1) Represents 77,597 shares owned jointly with his wife, 7,000
shares owned by his wife, and 20,000 shares issuable upon exercise
of options.
(2) Includes 7,000 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
7,000 shares issuable upon exercise of stock options.
5
(5) Represents shares issuable upon exercise of options.
(6) Includes 35,000 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 2015 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 2015, 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
2015. 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 and Options
DIRECTORS' COMPENSATION
For the Year Ended June 30, 2015
_________________________________________________________________
Non-
Equity
Fees Incentive
Earned Plan
or Paid Stock Option Comp-
in Cash Awards Awards ensation
Name ($) ($) ($) ($)
(a) (b) (c) (d) (e)
__________________________________________________________________
Joseph G.
Cremonese 29,200 0 0 0
Roger B.
Knowles 13,600 0 0 0
Grace S.
Morin 13,600 0 0 0
James S.
Segasture 13,600 0 0 0
___________________________________________________________________
DIRECTORS' COMPENSATION (CONTINUED)
Changes
in
Pension
Value and
Non- Non-
qualified qualified
Deferred Deferred All
Compens- Comp- Other
ation ensation Comp-
Earnings Earnings ensation Total
Name ($) ($) ($) ($)
(a) (f) (g) (h) (i)
____________________________________________________________________
Joseph G.
Cremonese 0 0 43,200(1) 72,400
Roger B.
Knowles 0 0 0 13,600
Grace S.
Morin 0 0 4,300(2) 17,900
James S.
Segasture 0 0 0 13,600
____________________________________________________________________
(1) Represents amount paid to his affiliate pursuant to a marketing
consulting agreement.
(2) 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 $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 2015, total director compensation to non-employee Directors
aggregated $117,500, 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 serving 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,
6
subsequent to the adoption of the plan, 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; five-year options on
September 17, 2009 to purchase 10,000 shares at the exercise price of
$1.88 per share; five-year options on January 7, 2011 to purchase
10,000 shares at the exercise price of $3.24; five-year options on
January 12, 2012 to purchase 10,000 shares at the exercise price of
$3.45 per share, and ten-year options on December 4, 2013 to
purchase 5,000 shares at an exercise price of $3.50 per share.
He exercised 20,000 options during fiscal 2015 at prices of $1.88
and $3.24 with respect to 10,000 and 10,000 shares, respectively.
Executive Officers and Key Personnel
See above for the employment history of Ms. Santos.
Robert P. Nichols (age 54), 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 70) 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 36), is the President of the Torbal
division of the Benchtop Laboratory Equipment Operations and Director
of Marketing for the Company. He had been since 2004 until February
2014 Vice President of Fulcrum, Inc. (the seller of the Torbal
division assets).
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
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.
7
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, 2015 and 2014.
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 ($) ($) ($) ($) ($) ($)
(a) (b) (c) (d) (e) (f) (g) (h)
_____________________________________________________________________
Helena R. 2015 154,000 0 0 0 0 0
Santos, 2014 150,000 0 0 0 0 0
CEO,
President,
CFO
_____________________________________________________________________
Robert P. 2015 139,000 0 0 1,200(2) 0 0
Nichols, 2014 135,000 0 0 500(2) 0 0
Exec.
V.P.
_____________________________________________________________________
Brookman 2015 140,000 0 0 2,800(3) 0 0
P. March, 2014 135,000 0 0 2,500(3) 0 0
Director
of Sales
and
Marketing,
and
President of
Altamira
_____________________________________________________________________
Karl D. 2015 140,500 0 0 7,100(4) 0 0
Nowosielski2014 45,800(5) 0 0 3,900(4) 0 0
President of
Torbal
Division
and Director
of Marketing
_____________________________________________________________________
SUMMARY COMPENSATION TABLE (CONTINUED)
_____________________________________________________________________
Changes
in
Pension
Value
and Non-
Qualified All
Name Deferred Other
and Comp- Comp-
Principal Fiscal ensation ensation Total
Position Year Earnings ($) ($)
(a) (b) (i) (j)
_____________________________________________________________________
Helena R. 2015 0 6,200(1) 160,200
Santos, 2014 0 6,000(1) 156,000
CEO,
President,
CFO
_____________________________________________________________________
Robert P. 2015 0 5,600(1) 145,800
Nichols, 2014 0 5,400(1) 140,900
Exec.
V.P.
_____________________________________________________________________
Brookman 2015 0 5,600(1) 148,400
P. March, 2014 0 5,400(1) 142,900
Director
of Sales
and
Marketing,
and
President of
Altamira
_____________________________________________________________________
Karl D. 2015 0 5,600(1) 153,200
Nowosielski 2014 0 0 49,700
President of
Torbal
Divsion
and Director
of Marketing
_____________________________________________________________________
(1) The amounts represent the Company's matching contribution under
the Company's 401(k) Plans.
(2) The amount represents 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 2014 option was valued
at a total of $3,500 of which $1,200 was expensed as stock based
compensation in fiscal 2015.
(3) The amounts represent 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. The 2014 option was valued
at a total of $3,500 of which $1,200 was expensed in fiscal 2015
plus $1,600 for the 2012 stock option.
(4) The amounts represent compensation expense for the 2015 and 2014
stock options granted in 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 options were valued at a total of $7,100 and $3,900, respectively,
all of which was expensed as stock based compensation in the respective
periods.
8
(5) Represents salary from February 2014 to the end of fiscal 2014.
GRANTS OF PLAN-BASED AWARDS IN FISCAL YEAR ENDED JUNE 30, 2015
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)
________________________________________________________
Karl D. Nowosielski 02/26/15 0 0 0
________________________________________________________
GRANTS OF PLAN-BASED AWARDS IN FISCAL YEAR ENDED JUNE 30, 2015
(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 # ($/Sh) Awards
(a) (f) (g) (h)
_________________________________________________________
Karl D. Nowosielski 4,000 2.80 7,100
_________________________________________________________
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
______________________________________________________________
Option Awards
______________________________________________________________
Number Equity
Number of Incentive
of Securities Plan Awards:
Securities Under- Number of
Under- lying Securities
lying Un- Unexercised Underlying Option
exercised Options(#) Unexercised Exercise Option
Options(#) Unexerci- Unearned Price Expiration
Name Exercisable sable Options(#) ($) Date
(a) (b) (c) (d) (e) (f)
_____________________________________________________________________
Brookman P. 5,667 1,333 0 3.50-3.71 11/2014-12/2023
March
Robert P.
Nichols 667 1,333 0 3.50 12/2023
Karl D.
Nowosielski 667 5,333 0 2.80-3.67 02/2024-02/2015
_____________________________________________________________________
There were no options exercised by officers during 2015.
Employment Agreements
In June 2015, The Company entered into employment agreements
with Ms. Helena R. Santos and Robert P. Nichols extending their terms
of employment to June 30, 2016. The agreements provide for annual base
salaries for the fiscal years ending June 30, 2015 and June 30, 2016,
for Ms. Santos of $154,000 and $157,080 respectively; and for Mr.
Nichols of $139,000 and $141,780 respectively. Bonuses, if any, are
to be awarded at the discretion of the Board of Directors for each of
the fiscal years. No bonuses were awarded for fiscal 2015 or fiscal
2014.
In June 2015, the Company entered into an employment agreement
with Mr. March extending the term through June 30, 2016. The agreement
provides for an annual base salary of $140,000 and $142,800 for the
fiscal years ending June 30, 2015 and 2016, respectively. Bonuses,
if any, may be awarded at the discretion of the Board of Directors.
No bonuses were awarded for fiscal 2015 or 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.
9
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 provided 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 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
(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, 2015. 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 $43,200 and $41,400 pursuant
to the agreement for fiscal 2015 and fiscal 2014, respectively.
Ms. Grace S. Morin, was elected a Director in December 2006
following the sale of her 90.36% ownership interest in Altamira to
the Company in November 2006. Up 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 December 31, 2015 at the
rate of $85 per hour, resulting in payments of $4,300 and $5,700
for fiscal 2015 and fiscal 2014, respectively. The agreement
contains confidentiality and non-competition covenants.
Section 16(a) Reporting
The Company believes that, for the year ended June 30, 2015,
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.
10
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, 2016. 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 2015 and fiscal 2014.
The Company incurred for the services of the Firm fees of
approximately $65,000 and $64,000 for fiscal 2015 and 2014,
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.
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, 2016.
11
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, 2015, includes its Annual Report on Form 10-K for
the year which was filed with the U.S. Securities and Exchange Commission
on September 28, 2015. 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
August 26, 2016.
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 24, 2015
12
__________________________________________________________________________
PROXY CARD:
SCIENTIFIC INDUSTRIES, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
January 7, 2016
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Joseph G. Cremonese and Grace S. Morin,
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 2015 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,
January 7, 2016 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 A Directors: JAMES S. SEGASTURE HELENA R. SANTOS
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, 2016.
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
nominees for Class A Directors 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.