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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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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Scientific Industries
(Letterhead)
October 14, 2012
Dear Fellow Stockholders:
You are cordially invited to attend the 2012 Annual Meeting
of Stockholders of Scientific Industries, Inc. which will be held at
11:00 a.m. (New York time) on Thursday, November 29, 2012 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 2012
Annual Meeting of Stockholders and Proxy Statement.
It is important that your shares be represented at the 2012
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 2012 ANNUAL MEETING OF STOCKHOLDERS
November 29, 2012
Notice is hereby given that the 2012 Annual Meeting of Stockholders
(the "Annual Meeting") of Scientific Industries, Inc., a Delaware corporation
(the "Company"), will be held on Thursday, November 29, 2012, 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, 2015 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, 2013.
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 8,
2012, 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 19, 2012
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
_________________
2012 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 29, 2012
_________________
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 2012 Annual Meeting of Stockholders (the "Annual Meeting") to be held
at La Quinta Inn & Suites, 10 Aero Road, Bohemia, New York, 11716, on
Thursday, November 29, 2012, 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, 2015,
and the election and qualification of their respective 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, 2013; 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 8,
2012 (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 1,335,712 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,
Helena R. Santos and James S. Segasture as 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, 2013.
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 Directors, 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 October 23, 2012.
PRINCIPAL STOCKHOLDERS
The following table sets forth as of October 8, 2012 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* 166,500 12.5
Lowell A. Kleiman 139,581(1) 10.4
16 Walnut Street
Glen Head, NY 11545
Fluorometrix Corp. 90,090(2) 6.7
24 Timber Edge Road
Stow, MA 01775
Spectrum Laboratories, Inc. 127,986(3) 9.6
18617 Broadwick Street
Rancho Dominquez, CA 90220
Grace S. Morin* 94,450(4) 7.0
Brookman P. March* 94,450(5) 7.0
Joseph G. Cremonese* 87,097(6) 6.3
* 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) Represents shares acquired upon sale of assets to the Company in
November 2011.
(3) Based on information reported on Schedule 13G filed with the Securities
and Exchange Commission on June 15, 2009.
(4) Includes 11,500 shares issuable upon exercise of options held by her
husband, Mr. March.
(5) Represents 82,950 shares owned by his wife, Grace S. Morin and 11,500
shares issuable upon exercise of options.
(6) 44,097 shares are owned jointly with his wife, 3,000 shares are owned
by his wife, and 40,000 shares are 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. The number of Directors constituting the
Board was reduced from six to five upon the death in July, 2011 of a
Director, Mr. Joseph I. Kesselman. 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, 2015,
and until their successors are duly elected and qualified. During the
fiscal year ended June 30, 2012 ("fiscal 2012"), 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 nominees hereinafter named if
authority to do so is not specifically withheld. If for any reason said
nominees 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 Ms. Helena R. Santos and Mr.
James S. Segasture, both currently Class A Directors, as their nominees for
election.
Helena R. Santos (age 48), 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. Prior thereto, she 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 76), a Director since 1991, has been a private
investor since February 1990.
4
Other Directors
Class B Director:
Grace S. Morin (age 64), 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. She was for two years
ending December 2003, a general business consultant, and for approximately four
years prior thereto a member of senior management of a designer of gas flow
environmental engineered products.
Class C Directors:
Joseph G. Cremonese (age 76), a Director since November 2002 and
Chairman of the Board since February 2006, has been a marketing consultant to
the Company since 1996. Mr. Cremonese has been since 1991, President of
Laboratory Innovation Company, Ltd., which is a vehicle for technology transfer
and consulting services for companies, including the Company, 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 87), a Director since 1965, has been retired for
more than five years.
Stock Ownership
The following table sets forth, as of October 8, 2012, 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 87,097 (1) 6.3%
Grace S. Morin 94,450 (2) 7.0%
Grace S. Morin 87,783
James S. Segasture 166,500 12.5%
Helena R. Santos 15,779 1.2%
Robert P. Nichols 21,446 (3) 1.6%
Brookman P. March 94,450 (4) 7.0%
All current directors and
executive officers as a group
(5 persons) 385,272 (5) 27.7%
5
(1) 44,097 shares are owned jointly with his wife, 3,000 shares are owned
by his wife, and 40,000 shares are issuable upon exercise of options.
(2) Includes 11,500 shares issuable upon exercise of options held by her
husband, Mr. March.
(3) Includes 5,000 shares issuable upon exercise of options.
(4) Represents 82,950 shares owned by his wife, Ms. Morin, and 11,500
shares issuable upon exercise of stock options.
(5) Includes 56,500 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 2012 the
Stock Option Committee held two 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 2012,
the Compensation Committee held two meetings.
The Board of Directors acts as the Company's Audit Committee, which in
its function as the Committee, held four meetings during fiscal 2012. Ms.
Santos, who is not "independent" and Ms. Morin are "financial experts" as
defined by the Securities and Exchange Commission.
6
Directors' Compensation and Options
DIRECTORS' COMPENSATION
For the Year Ended June 30, 2012
Non-
Equity
Fees Incentive
Earned Plan
or Paid Stock Option Comp-
in Cash Awards Awards ensation
Name ($) ($) ($) ($)
(a) (b) (c) (d) (e)
_____________________________________________________________________
Joseph G.
Cremonese 27,600 0 5,000(1) 0
Roger B.
Knowles 13,200 0 0 0
Grace S.
Morin 13,200 0 0 0
James S.
Segasture 13,200 0 0 0
____________________________________________________________________
DIRECTORS' COMPENSATION (CONTINUED)
Changes
in
Pension
Value and
Non- Non-
qualified qualified
Deferred Deferred All
Compens- Comp- Other
ation ensation Comp-
Earnings Earnings ensation Total
Name ($) ($) ($) ($)
(a) (f) (g) (h) (i)
____________________________________________________________________
Joseph G.
Cremonese 0 0 37,800(2) 70,400
Roger B.
Knowles 0 0 0 13,200
Grace S.
Morin 0 0 5,100(3) 18,300
James S.
Segasture 0 0 0 13,200
____________________________________________________________________
(1) The amount represents consulting expense recorded in fiscal 2012
for stock options granted in fiscal 2012 valued and expensed 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 2012, total director
compensation to non-employee Directors aggregated $115,100, including the
consulting fees paid to Mr. Cremonese's affiliate, and to Ms. Morin.
Under the Company's 2002 Plan, none of the Directors at the time
of the adoption by the Board of Directors of the 2002 Plan were eligible
to receive option grants thereunder. However, each of Roger B. Knowles
and James S. Segasture held options which expired on December 31, 2011
granted under the Company's 1992 Stock Option Plan to purchase 4,000 shares
of Common Stock at the exercise price of $2.40 per share. Mr. Joseph G.
Cremonese who was elected a Director at the 2002 Annual Meeting of
Stockholders, was granted ten year options on December 1, 2003 to purchase
5,000 shares of Common Stock at the exercise price of $1.35 per share,
ten-year options on February 20, 2007 to purchase 5,000 shares of 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 $1.53 per share, and five-year options on
January 12, 2012 to purchase 10,000 shares at the exercise price of $3.45
per share. The $3.45 option had a total fair value (as determined by the
Black-Scholes-Merton option-pricing
7
model) of $10,000 of which $5,000 was recognized as consulting expense
in fiscal 2012. None of the options have been exercised to date.
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 the Company's subsidiary, Altamira Instruments, Inc.
See "Election of Directors" for the employment history of Ms. Santos.
Robert P. Nichols (age 51), 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 67) 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 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. In making a
determination, the Committee and the Board give material consideration to the
Company's results of operations and financial condition, competitive factors
and the Company's resources. 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.
In September 2011, The Company entered into new employment agreements
with Ms. Helena R. Santos and Robert P. Nichols extending their terms of
employment to June 30, 2013. The new agreements increased their annual base
salaries for the fiscal years ending June 30, 2012 and June 30, 2013 - for Ms.
Santos from $135,000 for the fiscal year ended June 30, 2011 to $138,000 and
$141,000 respectively; and for Mr. Nichols from $123,600 for the fiscal year
ended June 30, 2011 to $126,320 and $129,100 respectively. Bonuses, if any,
are to be awarded at the discretion of the Board of Directors for each of the
fiscal years ending June 30, 2012 and June 30, 2013. For the year ended June
30, 2011, the Board of Directors authorized
8
bonuses of $4,000 for Ms. Santos and $3,000 for Mr. Nichols. No bonuses were
awarded for the fiscal year ended June 30, 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 each of the
fiscal years ending June 30, 2013 and 2014, respectively, up from $128,000
for the year ended June 30, 2012. Bonuses, if any, may be awarded at the
discretion of the Board of Directors. A bonus of $5,000 was paid to Mr. March
during fiscal 2011 for his services during the twelve month period ended
November 30, 2010, under the previous contract, no bonus was awarded for
fiscal 2012.
Mr. March is the husband of Grace S. Morin, a Director of the
Company and of Altamira and a former principal stockholder of Altamira.
Each of the foregoing employment agreements contains confidentiality
and non-competition covenants. The employment agreements for Ms. Santos and
Mr. March contain termination provisions stipulating that if the Company
terminates the employment other than for death, disability, or cause
(defined as (i) conviction of a felony or (ii) gross neglect or gross
misconduct (including conflict of interest), the Company shall pay severance
payments equal to one year?s salary at the rate of the compensation at the
time of termination, and continue to pay medical health benefits provided
by the Company for a period of two years from termination.
Compensation for each executive officer provided by his or her
employment agreement was based on the foregoing factors and the operating
and financial results of the segments under his or her management.
The following table summarizes all compensation paid by the Company
to each of its executive officers for the fiscal years ended June 30, 2012
and 2011.
9
SUMMARY COMPENSATION TABLE
______________________________________________________________________
Non- Non-
Equity Qualified
Incentive Deferred
Name Plan Comp-
and Stock Option Comp- ensation
Principal Fiscal Salary Bonus Awards Awards ensation Earnings
Position Year ($) ($) ($) ($) ($) ($)
(a) (b) (c) (d) (e) (f) (g) (h)
______________________________________________________________________
Helena R. 2012 138,000 0 0 0 0 0
Santos, 2011 135,000 4,000(1) 0 0 0 0
CEO,
President,
CFO
______________________________________________________________________
Robert P. 2012 126,300 0 0 0 0 0
Nichols, 2011 123,600 3,000(1) 0 0 0 0
Exec.
V.P.
______________________________________________________________________
Brookman 2012 128,000 0 0 200(3) 0 0
P. March, 2011 122,650 5,000(1) 0 2,900(3) 0 0
Director
of Sales
and
Marketing,
and
President of
Altamira
______________________________________________________________________
SUMMARY COMPENSATION TABLE (CONTINUED)
______________________________________________________________________
Changes
in
Pension
Value
and Non-
Qualified All
Name Deferred Other
and Comp- Comp-
Principal Fiscal ensation ensation Total
Position Year Earnings ($) ($)
(a) (b) (i) (j)
______________________________________________________________________
Helena R. 2012 0 2,800(2) 140,800
Santos, 2011 0 2,800(2) 141,800
CEO,
President,
CFO
______________________________________________________________________
Robert P. 2012 0 2,500(2) 128,800
Nichols, 2011 0 2,500(2) 129,100
Exec.
V.P.
______________________________________________________________________
Brookman 2012 0 5,100(2) 133,300
P. March, 2011 0 5,100(2) 135,650
Director
of Sales
and
Marketing,
and
President of
Altamira
______________________________________________________________________
(1) Represents amounts paid for fiscal 2011.
(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
with stock-based compensation costs of $5,500 to be recognized in the
future.
10
GRANTS OF PLAN-BASED AWARDS IN FISCAL YEAR ENDED JUNE 30, 2012
_______________________________________________________________________
Estimated All Other All Other
Future Stock Option
Payouts Estimated Awards: Awards:
under Future Number Number
Non- Payment of Shares of
Equity Under of Securities
Grant Incentive Equity Stock Underlying
Name Date Plan Plan Units(#) Options (#)
(a) (b) Awards Awards (c) (d)
_______________________________________________________________________
Brookman
P. March 05/10/12 0 0 0 5,000
_______________________________________________________________________
GRANTS OF PLAN-BASED AWARDS IN FISCAL YEAR ENDED JUNE 30, 2012 (CONTINUED)
_______________________________________________________________________
Grant
Date
Exercise Fair
or Base Value of
Price of Stock
Option and
Grant Awards Option
Name Date ($/Sh) Awards
(a) (b) (e) (f)
_______________________________________________________________________
Brookman
P. March 05/10/12 3.71 $5,700
_______________________________________________________________________
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
_______________________________________________________________________
Option Awards
_______________________________________________________________________
Number Equity
Number of Incerntive
of Securities Plan Awards:
Securities Under- Number of
Under- lying Securities
lying Un- Unexercised Underlying Option
exercised Options(#) Unexercised Exercise Option
Options(#) Unexerci- Unearned Price Expiration
Name Exercisable sable Options(#) ($) Date
(a) (b) (c) (d) (e) (f)
______________________________________________________________________
Robert P.
Nichols 5,000 0 0 1.25 10/2012
______________________________________________________________________
Brookman P. 5,666 5,834 0 3.07 5/2022
March
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11
STOCK AWARDS
During fiscal 2012, there were no stock awards granted to officers and
no executive officer exercised any options.
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 for over ten
years. The services have been rendered since January 1, 2003 pursuant
to a consulting agreement which was extended in January, 2012 through
December 31, 2012. The agreement as amended and restated currently
provides that Mr. Cremonese and his affiliate shall render, at the
request of the Company, marketing consulting services of at least 60,
but not more than 96, days per year at the rate of $660 per day with
a monthly payment of $3,300, with the Company's obligation reduced to
the extent the consulting services are less than 60 days for the 12
month period. The agreement contains confidentiality and non-competition
covenants. The Company paid the affiliate pursuant to the agreement
$37,800 and $36,000 for fiscal 2012 and fiscal 2011, 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. Under the purchase agreement Ms. Morin received
(in addition to $361,000 in cash paid and an aggregate of 112,950 shares
of the Company's Common Stock issued at the time of acquisition), an
amount equal to 4.518% (90.36% of 5%) of net sales of Altamira for each
of five designated periods, subject to possible described adjustment.
Accordingly, she received $59,700 for the period from December 1, 2006
through June 30, 2007, $131,000 for the year ended June 30, 2008; $97,000
for the year ended June 30, 2009; $126,400 for the year ended June 30, 2010;
and $38,000 for the five months ended November 30, 2010. She also received
in fiscal 2008 $36,400 as reimbursement for the Company's treatment of the
transaction as a purchase of assets for tax purposes.
Until March 31, 2009, Ms. Morin had been employed full-time 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, 2013 at the rate of $85 per hour, which resulted in a
payment of $5,100 and $9,000 for fiscal 2012 and fiscal 2011, respectively.
The agreement contains confidentiality and non-competition covenants.
Section 16(a) Reporting
The Company believes that, for the year ended June 30, 2012, 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.
12
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, 2013. 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 2012 and fiscal 2011:
The Company incurred for the services of the Firm fees of
approximately $61,000 and $54,000 for fiscal 2012 and 2011, 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, 2013.
13
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, 2012, 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, 2012.
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, 2013 must be received by the Secretary of the Company for inclusion in
the appropriate proxy materials no later than June 23, 2013.
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 19, 2012
14
__________________________________________________________________________
PROXY CARD:
SCIENTIFIC INDUSTRIES, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
November 29, 2012
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 2012 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 Thursday,
November 29, 2012 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:
HELENA R. SANTOS JAMES S. SEGASTURE
FOR both nominees ( ) WITHHOLD for both nominees ( )
If you do not 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, 2013.
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
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 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.